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 June 30, 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: 14,363,234 shares as of July 24, 2023.

TOMPKINS FINANCIAL CORPORATION

FORM 10-Q

INDEX

PART I -FINANCIAL INFORMATION
			PAGE
	Item 1 –	Financial Statements Consolidated Statements of Condition as of June 30, 2023 (Unaudited) and December 31, 2022 (Audited)	1
		Consolidated Statements of Income for the three and six months ended June 30, 2023 and 2022 (Unaudited)	2
		Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2023 and 2022 (Unaudited)	3
		Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022 (Unaudited)	4
		Consolidated Statements of Changes in Shareholders’ Equity for the three and six months ended June 30, 2023 and 2022 (Unaudited)	6
		Notes to Unaudited Consolidated Financial Statements	8
	Item 2 -	Management’s Discussion and Analysis of Financial Condition and Results of Operations	46
	Item 3 -	Quantitative and Qualitative Disclosures About Market Risk	66
	Item 4 -	Controls and Procedures	67
PART II - OTHER INFORMATION
	Item 1 –	Legal Proceedings	67
	Item 1A – Risk Factors		67
	Item 2 –	Unregistered Sales of Equity Securities and Use of Proceeds	68
	Item 3 -	Defaults Upon Senior Securities	68
	Item 4 -	Mine Safety Disclosures	68
	Item 5 -	Other Information	68
	Item 6 -	Exhibits	70
SIGNATURES			71

Item 1. Financial Statements

TOMPKINS FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF CONDITION

(In thousands, except share and per share data)	As of		As of
ASSETS	06/30/2023		12/31/2022
	(unaudited)		(audited)
Cash and noninterest bearing balances due from banks	$	65,916	$	18,572
Interest bearing balances due from banks	15,698		59,265
Cash and Cash Equivalents	81,614		77,837
Available-for-sale debt securities, at fair value (amortized cost of $1,688,051 at June 30, 2023 and $1,831,791 at December 31, 2022)	1,468,003		1,594,967
Held-to-maturity securities, at amortized cost (fair value of $262,444 at June 30, 2023 and $261,692 December 31, 2022)	312,369		312,344
Equity securities, at fair value (amortized cost $778 at June 30, 2023 and $777 at December 31, 2022)	778		777
Total loans and leases, net of unearned income and deferred costs and fees	5,352,365		5,268,911
Less: Allowance for credit losses	48,545		45,934
Net Loans and Leases	5,303,820		5,222,977
Federal Home Loan Bank and other stock	23,649		17,720
Bank premises and equipment, net	81,087		82,140
Corporate owned life insurance	86,709		85,556
Goodwill	92,602		92,602
Other intangible assets, net	2,513		2,708
Accrued interest and other assets	173,094		181,058
Total Assets	$	7,626,238	$	7,670,686
LIABILITIES
Deposits:
Interest bearing:
Checking, savings and money market	3,659,220		3,820,739
Time	770,594		631,411
Noninterest bearing	2,024,837		2,150,145
Total Deposits	6,454,651		6,602,295
Federal funds purchased and securities sold under agreements to repurchase	50,483		56,278
Other borrowings	387,100		291,300
Other liabilities	97,563		103,423
Total Liabilities	$	6,989,797	$	7,053,296
EQUITY
Tompkins Financial Corporation shareholders' equity:
Common Stock - par value $0.10 per share: Authorized 25,000,000 shares; Issued: 14,441,413 at June 30, 2023; and 14,555,741 at December 31, 2022	1,444		1,456
Additional paid-in capital	298,133		302,763
Retained earnings	537,095		526,727
Accumulated other comprehensive loss	(195,520)		(208,689)
Treasury stock, at cost – 124,265 shares at June 30, 2023, and 128,749 shares at December 31, 2022	(6,185)		(6,279)
Total Tompkins Financial Corporation Shareholders’ Equity	634,967		615,978
Noncontrolling interests	1,474		1,412
Total Equity	$	636,441	$	617,390
Total Liabilities and Equity	$	7,626,238	$	7,670,686

See notes to unaudited consolidated financial statements.

1

TOMPKINS FINANCIAL CORPORATION

 CONSOLIDATED STATEMENTS OF INCOME 

	Three Months Ended				Six Months Ended
(In thousands, except per share data) (Unaudited)	06/30/2023		06/30/2022		06/30/2023		06/30/2022
INTEREST AND DIVIDEND INCOME
Loans	$	63,527	$	52,505	$	124,369	$	103,636
Due from banks	183		64		322		105
Available-for-sale debt securities	6,618		7,063		13,361		13,833
Held-to-maturity securities	1,219		1,201		2,433		2,330
Federal Home Loan Bank and other stock	323		120		623		225
Total Interest and Dividend Income	71,870		60,953		141,108		120,129
INTEREST EXPENSE
Time certificates of deposits of $250,000 or more	2,526		400		4,313		826
Other deposits	13,119		1,647		23,513		3,267
Federal funds purchased and securities sold under agreements to repurchase	15		15		29		31
Other borrowings	4,314		629		7,111		1,129
Total Interest Expense	19,974		2,691		34,966		5,253
Net Interest Income	51,896		58,262		106,142		114,876
Less: Provision for credit loss expense	2,253		856		1,428		336
Net Interest Income After Credit for Credit Loss Expense	49,643		57,406		104,714		114,540
NONINTEREST INCOME
Insurance commissions and fees	8,672		8,429		18,181		17,746
Wealth management fees	4,678		4,596		9,187		9,513
Service charges on deposit accounts	1,640		1,756		3,386		3,535
Card services income	3,087		2,959		5,769		5,502
Other income	1,603		1,241		3,544		2,717
Net loss on securities transactions	(7,065)		(37)		(7,052)		(84)
Total Noninterest Income	12,615		18,944		33,015		38,929
NONINTEREST EXPENSE
Salaries and wages	25,337		24,396		49,849		47,668
Other employee benefits	6,647		6,341		13,388		12,138
Net occupancy expense of premises	3,327		3,131		6,626		6,672
Furniture and fixture expense	2,105		2,004		4,159		3,995
Amortization of intangible assets	84		219		167		437
Other operating expense	14,468		13,029		27,937		25,049
Total Noninterest Expenses	51,968		49,120		102,126		95,959
Income Before Income Tax Expense	10,290		27,230		35,603		57,510
Income Tax Expense	1,784		6,329		7,685		13,305
Net Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation	8,506		20,901		27,918		44,205
Less: Net Income Attributable to Noncontrolling Interests	31		32		62		63
Net Income Attributable to Tompkins Financial Corporation	$	8,475	$	20,869	$	27,856	$	44,142
Basic Earnings Per Share	$	0.59	$	1.45	$	1.94	$	3.06
Diluted Earnings Per Share	$	0.59	$	1.45	$	1.94	$	3.05

See notes to unaudited consolidated financial statements.

2

TOMPKINS FINANCIAL CORPORATION

 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME 

	Three Months Ended
(In thousands) (Unaudited)	06/30/2023		06/30/2022
Net income attributable to noncontrolling interests and Tompkins Financial Corporation	$	8,506	$	20,901
Other comprehensive (loss) income, net of tax:
Available-for-sale debt securities:
Change in net unrealized loss during the period	(13,237)		(43,449)
Reclassification adjustment for net realized loss on sale of available-for-sale debt securities included in net income	5,325		0
Employee benefit plans:
Amortization of net retirement plan actuarial loss	197		389
Amortization of net retirement plan prior service cost	41		40
Other comprehensive loss	(7,674)		(43,020)
Subtotal comprehensive income (loss) attributable to noncontrolling interests and Tompkins Financial Corporation	832		(22,119)
Less: Net income attributable to noncontrolling interests	(31)		(32)
Total comprehensive income (loss) attributable to Tompkins Financial Corporation	$	801	$	(22,151)

	Six Months Ended
(In thousands) (Unaudited)	06/30/2023		06/30/2022
Net income attributable to noncontrolling interests and Tompkins Financial Corporation	$	27,918	$	44,205
Other comprehensive income, net of tax:
Available-for-sale debt securities:
Change in net unrealized loss during the period	7,341		(123,854)
Reclassification adjustment for net realized loss on sale of available-for-sale debt securities included in net income	5,325		0
Employee benefit plans:
Amortization of net retirement plan actuarial loss	421		853
Amortization of net retirement plan prior service cost	82		82
Other comprehensive income (loss)	13,169		(122,919)
Subtotal comprehensive income (loss) attributable to noncontrolling interests and Tompkins Financial Corporation	41,087		(78,714)
Less: Net income attributable to noncontrolling interests	(62)		(63)
Total comprehensive income (loss) attributable to Tompkins Financial Corporation	$	41,025	$	(78,777)

See notes to unaudited consolidated financial statements.

3

TOMPKINS FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Six Months Ended
(In thousands) (Unaudited)	06/30/2023		06/30/2022
OPERATING ACTIVITIES
Net income attributable to Tompkins Financial Corporation	$	27,856	$	44,142
Provision for credit loss expense	1,428		336
Depreciation and amortization of premises, equipment, and software	5,418		5,245
Amortization of intangible assets	167		437
Earnings from corporate owned life insurance	(1,169)		(593)
Net amortization on securities	1,856		3,280
Amortization/accretion related to purchase accounting	(369)		(511)
Net loss on securities transactions	7,052		84
Net gain on sale of loans originated for sale	(65)		(57)
Proceeds from sale of loans originated for sale	2,174		362
Loans originated for sale	(2,495)		(1,127)
Net gain on sale of bank premises and equipment	(54)		(41)
Net excess tax benefit from stock based compensation	13		29
Stock-based compensation expense	2,155		1,973
Decrease in accrued interest receivable	718		176
Increase (decrease) in accrued interest payable	742		(86)
Other, net	(678)		(2,132)
Net Cash Provided by Operating Activities	44,749		51,517
INVESTING ACTIVITIES
Proceeds from maturities, calls and principal paydowns of available-for-sale debt securities	79,018		134,653
Proceeds from sales of available-for-sale debt securities	73,832		0
Purchases of available-for-sale debt securities	(18,044)		(149,148)
Purchases of held-to-maturity securities	0		(28,320)
Net increase in loans	(84,989)		(85,037)
Proceeds from sale/redemptions of Federal Home Loan Bank stock	54,747		25,148
Purchases of Federal Home Loan Bank and other stock	(60,676)		(32,065)
Proceeds from sale of bank premises and equipment	98		123
Purchases of bank premises, equipment and software	(3,344)		(4,774)
Redemption of corporate owned life insurance	20		0
Other, net	(138)		(142)
Net Cash Provided by (Used in) Investing Activities	40,524		(139,562)
FINANCING ACTIVITIES
Net (decrease) increase in demand, money market, and savings deposits	(286,827)		22,907
Net increase (decrease) in time deposits	139,452		(44,583)
Net decrease in Federal funds purchased and securities sold under agreements to repurchase	(5,795)		(16,712)
Increase in other borrowings	145,100		235,600
Repayment of other borrowings	(49,300)		(64,000)
Cash dividends	(17,423)		(16,634)
Common stock issued	0		0
Repurchase of common stock	(6,378)		(14,128)
Shares issued for employee stock ownership plan	0		2,951
Net shares issued related to restricted stock awards	(207)		(29)
Net proceeds from exercise of stock options	(118)		(42)
Net Cash (Used in) Provided by Financing Activities	(81,496)		105,330
Net Increase in Cash and Cash Equivalents	3,777		17,285
Cash and cash equivalents at beginning of period	77,837		63,107
Total Cash and Cash Equivalents at End of Period	$	81,614	$	80,392

See notes to unaudited consolidated financial statements.

4

TOMPKINS FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Six Months Ended
(In thousands) (Unaudited)	06/30/2023		06/30/2022
Supplemental Information:
Cash paid during the year for - Interest	$	34,493	$	5,578
Cash paid during the year for - Taxes	7,999		10,871
Transfer of loans to other real estate owned	0		82
Right-of-use assets obtained in exchange for new lease liabilities	422		568

See notes to unaudited consolidated financial statements.

5

TOMPKINS FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited)

(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 April 1, 2022	$	1,460	$	305,880	$	490,200	$	(135,849)	$	(5,642)	$	1,443	$	657,492
Net income attributable to noncontrolling interests and Tompkins Financial Corporation					20,869						32		20,901
Other comprehensive loss							(43,020)						(43,020)
Total Comprehensive Income													(22,119)
Cash dividends ($0.57 per share)					(8,299)								(8,299)
Common stock repurchased and returned to unissued status (49,629 shares)	(5)		(3,753)										(3,758)
Stock-based compensation expense			1,028										1,028
Directors deferred compensation plan (2,688 shares)			205						(205)				0
Restricted stock activity (7,217 shares)	(1)		(25)										(26)
Balances at June 30, 2022	$	1,454	$	303,335	$	502,770	$	(178,869)	$	(5,847)	$	1,475	$	624,318
Balances at April 1, 2023	$	1,456	$	303,357	$	537,331	$	(187,846)	$	(5,976)	$	1,443	$	649,765
Net income attributable to noncontrolling interests and Tompkins Financial Corporation					8,475						31		8,506
Other comprehensive loss							(7,674)						(7,674)
Total Comprehensive Income													832
Cash dividends ($0.60 per share)					(8,711)								(8,711)
Net exercise of stock options (315 shares)			(10)										(10)
Common stock repurchased and returned to unissued status (108,219 shares)	(11)		(6,367)										(6,378)
Stock-based compensation expense			1,110										1,110
Directors deferred compensation plan (3,386 shares)			209						(209)				0
Restricted stock activity (6,341 shares)	(1)		(166)										(167)
Balances at June 30, 2023	$	1,444	$	298,133	$	537,095	$	(195,520)	$	(6,185)	$	1,474	$	636,441

6

(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					44,142						63		44,205
Other comprehensive loss							(122,919)						(122,919)
Total Comprehensive Loss													(78,714)
Cash dividends ($1.14 per share)					(16,634)								(16,634)
Net exercise of stock options (630 shares)			(42)										(42)
Common stock repurchased and returned to unissued status (179,797 shares)	(18)		(14,110)										(14,128)
Stock-based compensation expense			1,973										1,973
Shares issued for employee stock ownership plan (37,454 shares)	4		2,947										2,951
Directors deferred compensation plan (1,679 shares)			56						(56)				0
Restricted stock activity (14,684 shares)	(2)		(27)										(29)
Balances at June 30, 2022	$	1,454	$	303,335	$	502,770	$	(178,869)	$	(5,847)	$	1,475	$	624,318
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					27,856						62		27,918
Other comprehensive income							13,169						13,169
Total Comprehensive Income													41,087
Cash dividends ($1.21 per share)					(17,423)								(17,423)
Net exercise of stock options (1,824 shares)			(118)										(118)
Common stock repurchased and returned to unissued status (108,219 shares)	(11)		(6,367)										(6,378)
Stock-based compensation expense			2,155										2,155
Directors deferred compensation plan ((4,484) shares)			(94)						94				0
Restricted stock activity (7,933 shares)	(1)		(206)										(207)
Adoption of Accounting Guidance					(65)								(65)
Balances at June 30, 2023	$	1,444	$	298,133	$	537,095	$	(195,520)	$	(6,185)	$	1,474	$	636,441

See notes to unaudited consolidated financial statements

7

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 June 30, 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.

8

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 tables summarize available-for-sale debt securities held by the Company at June 30, 2023 and December 31, 2022:

	Available-for-Sale Debt Securities
June 30, 2023	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(In thousands)
U.S. Treasuries	$	190,275	$	0	$	22,181	$	168,094
Obligations of U.S. Government sponsored entities	592,694		0		69,151		523,543
Obligations of U.S. states and political subdivisions	90,330		1		8,284		82,047
Mortgage-backed securities – residential, issued by
U.S. Government agencies	54,852		9		5,919		48,942
U.S. Government sponsored entities	757,400		0		114,265		643,135
U.S. corporate debt securities	2,500		0		258		2,242
Total available-for-sale debt securities	$	1,688,051	$	10	$	220,058	$	1,468,003

	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

9

Held-to-Maturity Debt Securities

The following tables summarize held-to-maturity debt securities held by the Company at June 30, 2023 and December 31, 2022:

	Held-to-Maturity Securities
June 30, 2023	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(In thousands)
U.S. Treasuries	$	86,370	$	0	$	12,598	$	73,772
Obligations of U.S. Government sponsored entities	225,999		0		37,327		188,672
Total held-to-maturity debt securities	$	312,369	$	0	$	49,925	$	262,444

	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. Realized gains on sales of available-for-sale debt securities were $0 for both the three and six months ended June 30, 2023 and June 30, 2022. During the second quarter of 2023, the Company sold $80.9 million of available-for-sale debt securities at a loss of $7.1 million. Sales of available-for-sale investment securities were the result of general investment portfolio and interest rate risk management. Realized losses for the three and six months ended June 30, 2023 were $7.1 million, and $0 for the three and six months ended June 30, 2022, respectively. Proceeds from the sale of available-for-sale debt securities were $73.8 million for the three and six months ended June 30, 2023, and $0 for the three and six months ended June 30, 2022. The Company's investment portfolio includes callable securities that may be called prior to maturity. There were no realized gains or losses on called available-for-sale debt securities for both the three and six months ended June 30, 2023 and June 30, 2022. The Company also recognized net losses of $12,000 for the three months ended June 30, 2023 and net gains of $1,000 for the six months ended June 30, 2023, compared to net losses of $36,700 and $83,700 for the three and six months ended June 30, 2022, respectively, on equity securities, reflecting the change in fair value.

The following table summarizes available-for-sale debt securities that had unrealized losses at June 30, 2023, and December 31, 2022:

June 30, 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	$	168,094	$	22,181	$	168,094	$	22,181
Obligations of U.S. Government sponsored entities	28,596		758		494,947		68,393		523,543		69,151
Obligations of U.S. states and political subdivisions	26,104		756		55,842		7,528		81,946		8,284
Mortgage-backed securities – residential, issued by
U.S. Government agencies	6,244		254		42,351		5,665		48,595		5,919
U.S. Government sponsored entities	13,055		727		630,081		113,538		643,136		114,265
U.S. corporate debt securities	0		0		2,242		258		2,242		258
Total available-for-sale debt securities	$	73,999	$	2,495	$	1,393,557	$	217,563	$	1,467,556	$	220,058

10

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 June 30, 2023 and December 31, 2022:

June 30, 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	$	73,772	$	12,598	$	73,772	$	12,598
Obligations of U.S. Government sponsored entities	8,176		751		180,496		36,576		188,672		37,327
Total held-to-maturity debt securities	$	8,176	$	751	$	254,268	$	49,174	$	262,444	$	49,925

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

11

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 June 30, 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 Federal Home Loan Bank ("FHLB") 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 "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 June 30, 2023 or December 31, 2022.

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.

June 30, 2023
(In thousands)	Amortized Cost		Fair Value
Available-for-sale debt securities:
Due in one year or less	$	47,677	$	46,893
Due after one year through five years	514,770		461,320
Due after five years through ten years	269,157		230,292
Due after ten years	44,195		37,421
Total	875,799		775,926
Mortgage-backed securities	812,252		692,077
Total available-for-sale debt securities	$	1,688,051	$	1,468,003

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

12

June 30, 2023
(In thousands)	Amortized Cost		Fair Value
Held-to-maturity debt securities:
Due after five years through ten years	$	312,369	$	262,444
Total held-to-maturity debt securities	$	312,369	$	262,444

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 of 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 FHLB stock is tied to the Company’s borrowing levels with the FHLB. Holdings of FHLBNY stock and ACBB stock totaled $23.6 million and $95,000, respectively, at June 30, 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 June 30, 2023, we determined that no impairment write-downs were required.

13

4. Loans and Leases

Loans and leases at June 30, 2023 and December 31, 2022 were as follows:

(In thousands)	06/30/2023		12/31/2022
Commercial and industrial
Agriculture	$	64,815	$	85,073
Commercial and industrial other	701,006		705,700
PPP loans*	613		756
Subtotal commercial and industrial	766,434		791,529
Commercial real estate
Construction	249,847		201,116
Agriculture	215,915		214,963
Commercial real estate other	2,487,067		2,437,339
Subtotal commercial real estate	2,952,829		2,853,418
Residential real estate
Home equity	185,529		188,623
Mortgages	1,348,448		1,346,318
Subtotal residential real estate	1,533,977		1,534,941
Consumer and other
Indirect	1,419		2,224
Consumer and other	85,794		75,412
Subtotal consumer and other	87,213		77,636
Leases	16,972		16,134
Total loans and leases	5,357,425		5,273,658
Less: unearned income and deferred costs and fees	(5,060)		(4,747)
Total loans and leases, net of unearned income and deferred costs and fees	$	5,352,365	$	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. As such, these policies are reflective of new originations as well as those balances held at December 31, 2022. 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 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 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.

14

The below tables are an age analysis of past due loans, segregated by class of loans, as of June 30, 2023 and December 31, 2022:

June 30, 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	$	0	$	53	$	0	$	53	$	64,762	$	64,815
Commercial and industrial other	60		2,266		2,704		5,030		695,976		701,006
PPP loans*	0		0		0		0		613		613
Subtotal commercial and industrial	60		2,319		2,704		5,083		761,351		766,434
Commercial real estate
Construction	0		65		0		65		249,782		249,847
Agriculture	165		0		0		165		215,750		215,915
Commercial real estate other	0		15,408		9,405		24,813		2,462,254		2,487,067
Subtotal commercial real estate	165		15,473		9,405		25,043		2,927,786		2,952,829
Residential real estate
Home equity	333		588		1,110		2,031		183,498		185,529
Mortgages	0		1,000		8,141		9,141		1,339,307		1,348,448
Subtotal residential real estate	333		1,588		9,251		11,172		1,522,805		1,533,977
Consumer and other
Indirect	13		25		44		82		1,337		1,419
Consumer and other	160		119		138		417		85,377		85,794
Subtotal consumer and other	173		144		182		499		86,714		87,213
Leases	0		0		0		0		16,972		16,972
Total loans and leases	731		19,524		21,542		41,797		5,315,628		5,357,425
Less: unearned income and deferred costs and fees	0		0		0		0		(5,060)		(5,060)
Total loans and leases, net of unearned income and deferred costs and fees	$	731	$	19,524	$	21,542	$	41,797	$	5,310,568	$	5,352,365
*SBA Paycheck Protection Program

15

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

16

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 June 30, 2023 and December 31, 2022:

June 30, 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
Commercial and industrial other	$	2,494	$	3,146	$	0
Subtotal commercial and industrial	2,494		3,146		0
Commercial real estate
Agriculture	0		179		0
Commercial real estate other	6,659		11,476		0
Subtotal commercial real estate	6,659		11,655		0
Residential real estate
Home equity	0		2,891		0
Mortgages	181		13,318		7
Subtotal residential real estate	181		16,209		7
Consumer and other
Indirect	0		87		0
Consumer and other	0		236		27
Subtotal consumer and other	0		323		27
Total loans and leases	$	9,334	$	31,333	$	34

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

17

The Company recognized $0 of interest income on nonaccrual loans during the three and six months ended June 30, 2023 and 2022.

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 June 30, 2023, considers the allowance to be appropriate, under certain 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 expense in the Company's consolidated statements of income.

18

The following table details activity in the allowance for credit losses on loans for the three and six months ended June 30, 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 June 30, 2023
(In thousands)	Commercial & Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Finance Leases		Total
Allowance for credit losses:
Beginning balance	$	6,316	$	27,186	$	10,858	$	1,628	$	111	$	46,099
Charge-offs	0		0		0		(169)		0		(169)
Recoveries	13		(9)		114		78		0		196
Provision (credit) for credit loss expense	356		1,791		139		143		(10)		2,419
Ending Balance	$	6,685	$	28,968	$	11,111	$	1,680	$	101	$	48,545

Three Months Ended June 30, 2022
(In thousands)	Commercial & Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Finance Leases		Total
Allowance for credit losses:
Beginning balance	$	7,027	$	22,982	$	10,447	$	1,588	$	82	$	42,126
Charge-offs	0		(23)		(51)		(82)		0		(156)
Recoveries	6		764		197		76		0		1,043
Provision (credit) for credit loss expense	781		(496)		489		9		(3)		780
Ending Balance	$	7,814	$	23,227	$	11,082	$	1,591	$	79	$	43,793

Six Months Ended June 30, 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 2016-13	2		16		46		0		0		64
Charge-offs	0		0		(2)		(275)		0		(277)
Recoveries	59		1,237		178		111		0		1,585
Provision (credit) for credit loss expense	585		428		(265)		486		5		1,239
Ending Balance	$	6,685	$	28,968	$	11,111	$	1,680	$	101	$	48,545

Six Months Ended June 30, 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)		(50)		(51)		(278)		0		(402)
Recoveries	26		805		307		168		0		1,306
Provision (credit) for credit loss expense	1,476		(2,341)		687		209		15		46
Ending Balance	$	7,814	$	23,227	$	11,082	$	1,591	$	79	$	43,793

19

The following table details activity in the liabilities for off-balance sheet credit exposures for the three and six months ended June 30, 2023 and 2022:

Three Months Ended June 30,
(In thousands)	2023		2022
Liabilities for off-balance sheet credit exposures at beginning of period	$	3,151	$	2,720
(Credit) provision for credit loss expense related to off-balance sheet credit exposures	(166)		76
Liabilities for off-balance sheet credit exposures at end of period	$	2,985	$	2,796

Six Months Ended June 30,
(In thousands)	2023		2022
Liabilities for off-balance sheet credit exposures at beginning of period	$	2,796	$	2,506
Provision for credit loss expense related to off-balance sheet credit exposures	189		290
Liabilities for off-balance sheet credit exposures at end of period	$	2,985	$	2,796

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

(In thousands)	Real Estate		Business Assets		Other		Total		ACL Allocation
June 30, 2023
Commercial and Industrial	$	2,494	$	0	$	0	$	2,494	$	0
Commercial Real Estate	10,146		0		0		10,146		1,082
Residential Real Estate	181		0		0		181		0
Total	$	12,821	$	0	$	0	$	12,821	$	1,082

(In thousands)	Real Estate		Business Assets		Other		Total		ACL Allocation
December 31, 2022
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 three and six months ended June 30, 2023, and no new TDRs reported in the three and six months ended June 30, 2022.

20

The following table presents credit quality indicators by total loans on an amortized cost basis by origination year as of June 30, 2023 and December 31, 2022:

June 30, 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	$	54,166	$	110,845	$	75,993	$	33,954	$	39,929	$	169,064	$	203,109	$	2,954	$	690,014
Special Mention	0		0		112		297		113		1,488		771		0		2,781
Substandard	0		0		94		420		26		1,175		6,496		0		8,211
Total Commercial and Industrial - Other	$	54,166	$	110,845	$	76,199	$	34,671	$	40,068	$	171,727	$	210,376	$	2,954	$	701,006
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Commercial and Industrial - PPP:
Pass	$	0	$	0	$	350	$	263	$	0	$	0	$	0	$	0	$	613
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	$	350	$	263	$	0	$	0	$	0	$	0	$	613
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Commercial and Industrial - Agriculture:
Pass	$	5,774	$	13,555	$	3,754	$	3,903	$	3,559	$	10,452	$	23,314	$	344	$	64,655
Special Mention	0		0		53		0		0		0		30		0		83
Substandard	0		0		0		63		0		11		3		0		77
Total Commercial and Industrial - Agriculture	$	5,774	$	13,555	$	3,807	$	3,966	$	3,559	$	10,463	$	23,347	$	344	$	64,815
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Commercial Real Estate
Pass	$	89,762	$	323,682	$	363,357	$	315,106	$	275,367	$	978,544	$	30,045	$	5,937	$	2,381,800
Special Mention	0		640		2,028		1,672		11,142		35,097		1,384		0		51,963
Substandard	0		15,369		108		0		2,915		34,796		116		0		53,304
Total Commercial Real Estate	$	89,762	$	339,691	$	365,493	316,778		289,424		1,048,437		$	31,545	$	5,937	$	2,487,067
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Commercial Real Estate - Agriculture:
Pass	$	7,532	$	34,610	$	23,534	$	22,303	$	24,520	$	98,149	$	1,165	$	2,396	$	214,209
Special Mention	0		0		0		0		390		1,088		0		0		1,478
Substandard	0		0		0		0		179		49		0		0		228
Total Commercial Real Estate - Agriculture	$	7,532	$	34,610	$	23,534	$	22,303	$	25,089	$	99,286	$	1,165	$	2,396	$	215,915
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0

21

(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	$	40,996	$	78,869	$	16,481	$	9,976	$	11,449	$	84,040	$	8,036	$	249,847
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	$	40,996	$	78,869	$	16,481	$	9,976	$	11,449	$	84,040	$	8,036	$	249,847
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Residential - Home Equity
Performing	$	1,244	$	2,363	$	969	$	583	$	910	$	9,697	$	164,163	$	2,709	$	182,638
Nonperforming	0		0		0		0		0		451		2,440		0		2,891
Total Residential - Home Equity	$	1,244	$	2,363	$	969	$	583	$	910	$	10,148	$	166,603	$	2,709	$	185,529
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	0	$	2	$	0	$	0	$	2
Residential - Mortgages
Performing	$	50,668	$	191,160	$	265,103	$	231,672	$	113,613	$	482,913	$	0	$	0	$	1,335,129
Nonperforming	0		395		330		868		908		10,818		0		0		13,319
Total Residential - Mortgages	$	50,668	$	191,555	$	265,433	$	232,540	$	114,521	$	493,731	$	0	$	0	$	1,348,448
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Consumer - Direct
Performing	$	31,859	$	15,186	$	12,737	$	6,302	$	5,360	$	11,263	$	2,851	$	0	$	85,558
Nonperforming	0		5		1		3		92		132		3		0		236
Total Consumer - Direct	$	31,859	$	15,191	$	12,738	$	6,305	$	5,452	$	11,395	$	2,854	$	0	$	85,794
Current-period gross writeoffs	$	155	$	8	$	0	$	14	$	36	$	13	$	0	$	0	$	226
Consumer - Indirect
Performing	$	0	$	0	$	123	$	113	$	676	$	420	$	0	$	0	$	1,332
Nonperforming	0		0		0		0		71		16		0		0		87
Total Consumer - Indirect	$	0	$	0	$	123	$	113	$	747	$	436	$	0	$	0	$	1,419
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	39	$	10	$	0	$	0	$	49

22

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

23

The following table presents 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 and six month periods ended June 30, 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.

24

	Three Months Ended
(In thousands, except share and per share data)	6/30/2023		6/30/2022
Basic
Net income available to common shareholders	$	8,475	$	20,869
Less: income attributable to unvested stock-based compensation awards	(8)		(67)
Net earnings allocated to common shareholders	8,467		20,802
Weighted average shares outstanding, including unvested stock-based compensation awards	14,502,161		14,524,975
Less: average unvested stock-based compensation awards	(188,028)		(207,560)
Weighted average shares outstanding - Basic	14,314,133		14,317,415
Diluted
Net earnings allocated to common shareholders	8,467		20,802
Weighted average shares outstanding - Basic	14,314,133		14,317,415
Plus: incremental shares from assumed conversion of stock-based compensation awards	32,654		70,186
Weighted average shares outstanding - Diluted	14,346,787		14,387,601
Basic EPS	$	0.59	$	1.45
Diluted EPS	$	0.59	$	1.45

Stock-based compensation awards representing 60,891 and 1,848 of common shares during the three months ended June 30, 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.

	Six Months Ended
(In thousands, except share and per share data)	6/30/2023		6/30/2022
Basic
Net income available to common shareholders	$	27,856	$	44,142
Less: income attributable to unvested stock-based compensation awards	(26)		(143)
Net earnings allocated to common shareholders	27,830		43,999
Weighted average shares outstanding, including unvested stock-based compensation awards	14,511,078		14,568,102
Less: unvested stock-based compensation awards	(190,763)		(209,633)
Weighted average shares outstanding - Basic	14,320,315		14,358,469
Diluted
Net earnings allocated to common shareholders	27,830		43,999
Weighted average shares outstanding - Basic	14,320,315		14,358,469
Plus: incremental shares from assumed conversion of stock-based compensation awards	47,866		74,183
Weighted average shares outstanding - Diluted	14,368,181		14,432,652
Basic EPS	$	1.94	$	3.06
Diluted EPS	$	1.94	$	3.05

Stock-based compensation awards representing approximately 32,036 and 6,113 of common shares during the six months ended June 30, 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.

25

7. Other Comprehensive Income (Loss)

The following tables present reclassifications out of accumulated other comprehensive income (loss) for the three and six month periods ended June 30, 2023 and 2022:

	Three Months Ended June 30, 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	$	(17,531)	$	4,294	$	(13,237)
Reclassification adjustment for net realized loss on sale of available-for-sale debt securities included in net income	7,052		(1,727)		5,325
Net unrealized gains/losses	(10,479)		2,567		(7,912)
Employee benefit plans:
Amortization of net retirement plan actuarial gain	261		(64)		197
Amortization of net retirement plan prior service cost	54		(13)		41
Employee benefit plans	315		(77)		238
Other comprehensive (loss) income	$	(10,164)	$	2,490	$	(7,674)

	Three Months Ended June 30, 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	$	(57,544)	$	14,095	$	(43,449)
Reclassification adjustment for net realized loss on sale of available-for-sale debt securities included in net income	0		0		0
Net unrealized gains/losses	(57,544)		14,095		(43,449)
Employee benefit plans:
Amortization of net retirement plan actuarial gain	514		(125)		389
Amortization of net retirement plan prior service cost	53		(13)		40
Employee benefit plans	567		(138)		429
Other comprehensive (loss) income	$	(56,977)	$	13,957	$	(43,020)

26

	Six Months Ended June 30, 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	$	9,724	$	(2,383)	$	7,341
Reclassification adjustment for net realized loss on sale of available-for-sale debt securities included in net income	7,052		(1,727)		5,325
Net unrealized gains/losses	16,776		(4,110)		12,666
Employee benefit plans:
Amortization of net retirement plan actuarial loss	558		(137)		421
Amortization of net retirement plan prior service cost	109		(27)		82
Employee benefit plans	667		(164)		503
Other comprehensive (loss) income	$	17,443	$	(4,274)	$	13,169

	Six Months Ended June 30, 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	$	(164,025)	$	40,171	$	(123,854)
Reclassification adjustment for net realized gain on sale of available-for-sale debt securities included in net income	0		0		0
Net unrealized gains/losses	(164,025)		40,171		(123,854)
Employee benefit plans:
Amortization of net retirement plan actuarial loss	1,129		(276)		853
Amortization of net retirement plan prior service cost	109		(27)		82
Employee benefit plans	1,238		(303)		935
Other comprehensive (loss) income	$	(162,787)	$	39,868	$	(122,919)

27

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

(In thousands)	Available-for- Sale Debt Securities		Employee Benefit Plans		Accumulated Other Comprehensive (Loss) Income
Balance at March 31, 2023	$	(158,225)	$	(29,621)	$	(187,846)
Other comprehensive income before reclassifications	(13,237)		0		(13,237)
Amounts reclassified from accumulated other comprehensive (loss) income	5,325		238		5,563
Net current-period other comprehensive income (loss)	(7,912)		238		(7,674)
Balance at June 30, 2023	$	(166,137)	$	(29,383)	$	(195,520)
Balance at January 1, 2023	$	(178,803)	$	(29,886)	$	(208,689)
Other comprehensive income (loss) before reclassifications	7,341		0		7,341
Amounts reclassified from accumulated other comprehensive (loss) income	5,325		503		5,828
Net current-period other comprehensive (loss) income	12,666		503		13,169
Balance at June 30, 2023	$	(166,137)	$	(29,383)	$	(195,520)

(In thousands)	Available-for- Sale Debit Securities		Employee Benefit Plans		Accumulated Other Comprehensive (Loss) Income
Balance at March 31, 2022	$	(94,965)	$	(40,884)	$	(135,849)
Other comprehensive (loss) income before reclassifications	(43,449)		0		(43,449)
Amounts reclassified from accumulated other comprehensive (loss) income	0		429		429
Net current-period other comprehensive income (loss)	(43,449)		429		(43,020)
Balance at June 30, 2022	$	(138,414)	$	(40,455)	$	(178,869)
Balance at January 1, 2022	$	(14,560)	$	(41,390)	$	(55,950)
Other comprehensive (loss) income before reclassifications	(123,854)		0		(123,854)
Amounts reclassified from accumulated other comprehensive (loss) income	0		935		935
Net current-period other comprehensive (loss) income	(123,854)		935		(122,919)
Balance at June 30, 2022	$	(138,414)	$	(40,455)	$	(178,869)

28

The following tables present the amounts reclassified out of each component of accumulated other comprehensive (loss) income for the three and six months ended June 30, 2023 and 2022:

Three Months Ended June 30, 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	$	(7,052)	Net (loss) gain on securities transactions
	1,727		Tax expense
	(5,325)		Net of tax
Employee benefit plans:
Amortization of the following 2
Net retirement plan actuarial loss	(261)		Other operating expense
Net retirement plan prior service cost	(54)		Other operating expense
	(315)		Total before tax
	77		Tax benefit
	$	(238)	Net of tax

Three Months Ended June 30, 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 following2
Net retirement plan actuarial loss	(514)		Other operating expense
Net retirement plan prior service cost	(53)		Other operating expense
	(567)		Total before tax
	138		Tax benefit
	$	(429)	Net of tax

29

Six Months Ended June 30, 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	$	(7,052)	Net (loss) gain on securities transactions
	1,727		Tax expense
	(5,325)		Net of tax
Employee benefit plans:
Amortization of the following2
Net retirement plan actuarial loss	(558)		Other operating expense
Net retirement plan prior service cost	(109)		Other operating expense
	(667)		Total before tax
	164		Tax benefit
	$	(503)	Net of tax

Six Months Ended June 30, 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 following2
Net retirement plan actuarial loss	(1,129)		Other operating expense
Net retirement plan prior service cost	(109)		Other operating expense
	(1,238)		Total before tax
	303		Tax benefit
	$	(935)	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").

30

8. Employee Benefit Plans

The following tables set 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 the unrecognized transitional obligation or transition asset, and the amounts of recognized gains and losses, prior service cost recognized, and gain or loss recognized due to settlement or curtailment.

Components of Net Periodic Benefit Cost

	Pension Benefits				Life and Health				SERP Benefits
	Three Months Ended				Three Months Ended				Three Months Ended
(In thousands)	6/30/2023		6/30/2022		6/30/2023		6/30/2022		6/30/2023		6/30/2022
Service cost	$	0	$	0	$	1	$	43	$	7	$	(13)
Interest cost	814		529		88		59		275		206
Expected return on plan assets	(1,195)		(1,474)		0		0		0		0
Amortization of net retirement plan actuarial loss	274		285		(13)		46		0		183
Amortization of net retirement plan prior service (credit) cost	0		0		(15)		(15)		69		68
Net periodic benefit (income) cost	$	(107)	$	(660)	$	61	$	133	$	351	$	444

	Pension Benefits				Life and Health				SERP Benefits
	Six Months Ended				Six Months Ended				Six Months Ended
(In thousands)	6/30/2023		6/30/2022		6/30/2023		6/30/2022		6/30/2023		6/30/2022
Service cost	$	0	$	0	$	16	$	87	$	21	$	39
Interest cost	1,637		992		177		111		574		407
Expected return on plan assets	(2,394)		(2,942)		0		0		0		0
Amortization of net retirement plan actuarial loss	578		608		(20)		98		0		423
Amortization of net retirement plan prior service cost (credit)	0		0		(30)		(30)		139		139
Net periodic benefit (income) cost	$	(179)	$	(1,342)	$	143	$	266	$	734	$	1,008

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 $0.5 million and $0.9 million, net of tax, as amortization of amounts previously recognized in accumulated other comprehensive (loss) income, for the six months ended June 30, 2023 and 2022, respectively.

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

31

9. Other Income and Operating Expense

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

	Three Months Ended				Six Months Ended
(In thousands)	6/30/2023		6/30/2022		6/30/2023		6/30/2022
Noninterest Income
Other service charges	$	649	$	669	$	1,264	$	1,296
Earnings from corporate owned life insurance	554		171		1,169		593
Net gains on the sale of loans originated for sale	27		53		65		57
Other income	373		348		1,046		771
Total other income	$	1,603	$	1,241	$	3,544	$	2,717
Noninterest Expenses
Marketing expense	$	1,688	$	1,456	$	2,792	$	2,513
Professional fees	2,124		1,719		3,928		3,325
Legal fees	635		498		1,054		708
Technology expense	3,656		3,690		7,663		7,373
FDIC insurance	779		677		1,833		1,378
Cardholder expense	1,116		1,280		2,133		2,422
Other expenses	4,470		3,709		8,534		7,330
Total other operating expense	$	14,468	$	13,029	$	27,937	$	25,049

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 fiscal year ended December 31, 2022, the Company adopted 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.

32

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, and 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 the 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.

33

The following tables present noninterest income, segregated by revenue streams in-scope and out-of-scope of ASC 606, for the three and six months ended June 30, 2023 and 2022:

	Three Months Ended
(In thousands)	06/30/2023		06/30/2022
Noninterest Income
In-scope of Topic 606:
Commissions and Fees	$	7,979	$	7,872
Installment Billing	(42)		(46)
Refund of Commissions	113		10
Contract Liabilities/Deferred Revenue	(295)		(266)
Contingent Commissions	917		859
Subtotal Insurance Revenues	8,672		8,429
Trust and Asset Management	3,637		3,122
Mutual Fund & Investment Income	1,041		1,474
Subtotal Investment Service Income	4,678		4,596
Service Charges on Deposit Accounts	1,640		1,756
Card Services Income	3,087		2,959
Other	325		308
Noninterest Income (in-scope of ASC 606)	18,402		18,048
Noninterest Income (out-of-scope of ASC 606)	(5,787)		896
Total Noninterest Income	$	12,615	$	18,944

	Six Months Ended
(In thousands)	06/30/2023		06/30/2022
Noninterest Income
In-scope of Topic 606:
Commissions and Fees	$	16,495	$	15,836
Installment Billing	(40)		(2)
Refund of Commissions	172		(18)
Contract Liabilities/Deferred Revenue	(298)		(267)
Contingent Commissions	1,852		2,197
Subtotal Insurance Revenues	18,181		17,746
Trust and Asset Management	7,072		6,625
Mutual Fund & Investment Income	2,115		2,888
Subtotal Investment Service Income	9,187		9,513
Service Charges on Deposit Accounts	3,386		3,535
Card Services Income	5,769		5,502
Other	674		624
Noninterest Income (in-scope of ASC 606)	37,197		36,920
Noninterest Income (out-of-scope of ASC 606)	(4,182)		2,009
Total Noninterest Income	$	33,015	$	38,929

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

34

which the Company's performance obligations have been fully satisfied. Receivables for the insurance and wealth management services segments amounted to $3.7 million and $2.8 million, respectively, at June 30, 2023, compared to $6.1 million and $2.5 million, respectively, at December 31, 2022. Included in those amounts are contract assets related to contingent income of $1.3 million and $2.9 million, respectively, at June 30, 2023 and December 31, 2022, and contract liabilities of $2.5 million and $1.6 million, respectively at June 30, 2023 and December 31, 2022.

Contract Acquisition Costs

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

11. Financial Guarantees

The Company currently does not issue any guarantees that would require liability recognition or disclosure, other than standby letters of credit. The Company extends standby letters of credit to its customers in the normal course of business. The standby letters of credit are generally short-term. As of June 30, 2023, the Company’s maximum potential obligation under standby letters of credit was $36.2 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.

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.

35

Three Months Ended June 30, 2023
(In thousands)	Banking		Insurance		Wealth Management		Intercompany		Consolidated
Interest income	$	71,870	$	1	$	0	$	(1)	$	71,870
Interest expense	19,975		0		0		(1)		19,974
Net interest income	51,895		1		0		0		51,896
Provision for credit loss expense	2,253		0		0		0		2,253
Noninterest income	(378)		8,798		4,736		(541)		12,615
Noninterest expense	41,385		7,201		3,922		(540)		51,968
Income before income tax expense	7,879		1,598		814		(1)		10,290
Income tax expense	1,147		437		200		0		1,784
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation	6,732		1,161		614		(1)		8,506
Less: Net income attributable to noncontrolling interests	31		0		0		0		31
Net Income attributable to Tompkins Financial Corporation	$	6,701	$	1,161	$	614	$	(1)	$	8,475
Depreciation and amortization	$	2,652	$	44	$	44	$	0	$	2,740
Assets	7,569,195		44,640		28,896		(16,493)		7,626,238
Goodwill	64,655		19,866		8,081		0		92,602
Other intangibles, net	975		1,496		42		0		2,513
Net loans and leases	5,303,820		0		0		0		5,303,820
Deposits	6,481,556		0		(11,019)		(15,886)		6,454,651
Total Equity	565,505		35,070		35,866		0		636,441

Three Months Ended June 30, 2022
(In thousands)	Banking		Insurance		Wealth Management		Intercompany		Consolidated
Interest income	$	60,953	$	1	$	0	$	(1)	$	60,953
Interest expense	2,692		0		0		(1)		2,691
Net interest income	58,261		1		0		0		58,262
Provision for credit loss expense	856		0		0		0		856
Noninterest income	6,329		8,573		4,598		(556)		18,944
Noninterest expense	39,395		6,812		3,469		(556)		49,120
Income before income tax expense	24,339		1,762		1,129		0		27,230
Income tax expense	5,465		494		370		0		6,329
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation	18,874		1,268		759		0		20,901
Less: Net income attributable to noncontrolling interests	32		0		0		0		32
Net Income attributable to Tompkins Financial Corporation	$	18,842	$	1,268	$	759	$	0	$	20,869
Depreciation and amortization	$	2,515	$	44	$	36	$	0	$	2,595
Assets	7,786,614		47,222		26,915		(18,290)		7,842,461
Goodwill	64,500		19,866		8,081		0		92,447
Other intangibles, net	1,236		1,830		58		0		3,124
Net loans and leases	5,118,710		0		0		0		5,118,710
Deposits	6,786,754		0		(847)		(16,386)		6,769,521
Total Equity	563,994		34,860		25,464		0		624,318

36

Six Months Ended June 30, 2023
(In thousands)	Banking		Insurance		Wealth Management		Intercompany		Consolidated
Interest income	$	141,108	$	2	$	0	$	(2)	$	141,108
Interest expense	34,968		0		0		(2)		34,966
Net interest income	106,140		2		0		0		106,142
Provision for credit loss expense	1,428		0		0		0		1,428
Noninterest income	6,321		18,433		9,357		(1,096)		33,015
Noninterest expense	81,233		14,417		7,572		(1,096)		102,126
Income before income tax expense	29,800		4,018		1,785		0		35,603
Income tax expense	6,136		1,110		439		0		7,685
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation	23,664		2,908		1,346		0		27,918
Less: Net income attributable to noncontrolling interests	62		0		0		0		62
Net Income attributable to Tompkins Financial Corporation	$	23,602	$	2,908	$	1,346	$	0	$	27,856
Depreciation and amortization	$	5,241	$	88	$	89	$	0	$	5,418

Six Months Ended June 30, 2022
(In thousands)	Banking		Insurance		Wealth Management		Intercompany		Consolidated
Interest income	$	120,129	$	2	$	0	$	(2)	$	120,129
Interest expense	5,255		0		0		(2)		5,253
Net interest income	114,874		2		0		0		114,876
Provision for credit loss expense	336		0		0		0		336
Noninterest income	12,522		18,007		9,532		(1,132)		38,929
Noninterest expense	76,584		13,314		7,193		(1,132)		95,959
Income before income tax expense	50,476		4,695		2,339		0		57,510
Income tax expense	11,630		1,310		365		0		13,305
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation	38,846		3,385		1,974		0		44,205
Less: Net income attributable to noncontrolling interests	63		0		0		0		63
Net Income attributable to Tompkins Financial Corporation	$	38,783	$	3,385	$	1,974	$	0	$	44,142
Depreciation and amortization	$	5,093	$	88	$	64	$	0	$	5,245

13. Fair Value Measurements

FASB ASC Topic 820, Fair Value Measurements and Disclosures (ASC 820), defines fair value, establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements. ASC 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.

37

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

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

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

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

The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of June 30, 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
June 30, 2023
(In thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Assets
Available-for-sale debt securities
U.S. Treasuries	$	168,094	$	0	$	168,094	$	0
Obligations of U.S. Government sponsored entities	523,543		0		523,543		0
Obligations of U.S. states and political subdivisions	82,047		0		82,047		0
Mortgage-backed securities – residential, issued by:
U.S. Government agencies	48,942		0		48,942		0
U.S. Government sponsored entities	643,135		0		643,135		0
U.S. corporate debt securities	2,242		0		2,242		0
Total Available-for-sale debt securities	$	1,468,003	$	0	$	1,468,003	$	0
Equity securities, at fair value	$	778	$	0	$	0	$	778
Derivatives designated as hedging instruments	3,420		0		3,420		0
Liabilities
Derivatives not designated as hedging instruments	$	18	$	0	$	18	$	0

38

Recurring Fair Value Measurements
December 31, 2022
(In thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Assets
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
Liabilities
Derivatives not designated as hedging instruments	$	21	$	0	$	21	$	0

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), for the periods ended June 30, 2023 and December 31, 2022, was immaterial.

There were no transfers between Levels 1, 2 and 3 for the six months ended June 30, 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.

Derivatives: The Company has contracted with a third party vendor to provide periodic valuations for its interest rate derivatives to determine the fair value of its interest rate contracts. The vendor utilizes standard valuation methodologies applicable to interest rate derivatives such as discounted cash flow analysis. Such valuations are based upon readily observable market data and are therefore considered Level 2 valuations by the Company.

Certain assets are measured at fair value on a nonrecurring basis. For the Company, these include loans held for sale, individually evaluated loans, and other real estate owned ("OREO"). For the three and six months ended June 30, 2023, certain individually 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 based upon customized discounting criteria. In addition to collateral dependent evaluated loans, certain other real estate owned were remeasured and reported at fair value based upon the fair value of the underlying collateral. The fair values of other real estate owned are estimated using Level 2 inputs based on observable market data or Level 3 inputs based on customized discounting criteria. In general, the fair values of other real estate owned are based upon appraisals, with discounts made to reflect estimated costs to sell the real estate. Upon initial recognition, fair value write-downs are taken through a charge-off to the allowance for credit losses. Subsequent fair value write-downs on other real estate owned are reported in other noninterest expense.

39

Three months ended June 30, 2023
(In thousands)			Fair value measurements at reporting date using:						Gain (losses) from fair value changes
Assets:	As of 06/30/2023		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Three months ended 06/30/2023
Individually evaluated loans	$	8,822	$	0	$	0	$	8,822	$	0

Three months ended June 30, 2022
(In thousands)			Fair value measurements at reporting date using:						Gain (losses) from fair value changes
Assets:	As of 06/30/2022		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		06/30/2022
Individually evaluated loans	$	814	$	0	$	0	$	814	$	59
Other real estate owned	33		0		33		0		0

Six months ended June 30, 2023
(In thousands)			Fair value measurements at reporting date using:						Gain (losses) from fair value changes
Assets:	As of 06/30/2023		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Six months ended 06/30/2023
Individually evaluated loans	$	8,822	$	0	$	0	$	8,822	$	826
Other real estate owned	36		0		0		36		22

Six months ended June 30, 2022
(In thousands)			Fair value measurements at reporting date using:						Gain (losses) from fair value changes
Assets:	As of 06/30/2022		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Six months ended 06/30/2022
Individually evaluated loans	$	1,320	$	0	$	0	$	1,320	$	59
Other real estate owned	33		0		33		0		22

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 in this Report.

40

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. 

The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments at June 30, 2023 and December 31, 2022. The carrying amounts shown in the table are included in the Consolidated Statements of Condition under the indicated captions.

Estimated Fair Value of Financial Instruments
June 30, 2023
(In thousands)	Carrying Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
Financial Assets:
Cash and cash equivalents	$	81,614	$	81,614	$	81,614	$	0	$	0
Securities - held-to-maturity	312,369		262,444		0		262,444		0
FHLB and other stock	23,649		23,649		0		23,649		0
Accrued interest receivable	24,147		24,147		0		24,147		0
Loans/leases, net1	5,303,820		4,920,418		0		0		4,920,418
Financial Liabilities:
Time deposits	$	770,594	$	757,593	$	0	$	757,593	$	0
Other deposits	5,684,057		5,684,057		0		5,684,057		0
Fed funds purchased and securities sold
under agreements to repurchase	50,483		50,483		0		50,483		0
Other borrowings	387,100		384,013		0		384,013		0
Accrued interest payable	2,162		2,162		0		2,162		0

41

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

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 risk 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. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the

42

Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s existing credit derivatives result from participations of loan participation arrangements, therefore, are not used to manage interest rate risk in the Company’s assets or liabilities.

Fair Value Hedges of Interest Rate Risk

The Company is exposed to changes in the fair value of certain of its fixed-rate assets due to changes in benchmark interest rates. The Company uses interest rate swaps to manage its exposure to changes in fair value on these instruments attributable to changes in the designated benchmark interest rate. Interest rate swaps designated as fair value hedges involve the payment of fixed-rate amounts to a counterparty in exchange for the Company receiving variable-rate payments over the life of the agreements without the exchange of the underlying notional amount.

For derivatives designated and that qualify as fair value hedges, the gain or loss on the derivative as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in interest income.

As of June 30, 2023, the following amounts were recorded on the balance sheet related to cumulative basis adjustment for fair value hedges. As of December 31, 2022, there no balances for Fixed Rate Loans.

Line Item in the Statement of Financial Position in Which the Hedged Item is Included	Carrying Amount of the Hedged Assets/(Liabilities)	Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets/(Liabilities)
	June 30, 2023	June 30, 2023
Fixed Rate Loans1	$146,680	$(3,320)
Total	$146,680	$(3,320)
1 These amounts include the amortized cost basis of closed portfolios of fixed rate loans used to designate hedging relationships in which the hedged item is the stated amount of assets in the closed portfolio anticipated to be outstanding for the designated hedged period. At June 30, 2023, the amortized cost basis of the closed portfolios used in these hedging relationships was $795.6 million; the cumulative basis adjustments associated with these hedging relationships was $3.3 million; and the amounts of the designated hedged items were $150 million.

Non-designated Hedges

The Company’s existing credit derivatives result from participations in interest rate swaps provided by external lenders as part of loan participation arrangements, 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 Consolidated Statements of Condition

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 June 30, 2023 and December 31, 2022. The Company began entering into derivative transactions in the second quarter of 2022. Amounts below are presented on a net basis in accordance with applicable accounting guidance.

Derivative Assets
	June 30, 2023
	Notional		Balance Sheet	Fair
(In thousands)	Amount		Location	Value*
Derivatives designated as hedging instruments
Interest Rate Products	$	150,000	Other Assets	$	3,420
Total derivatives designated as hedging instruments				$	3,420
*The Fair Value reported for June 30, 2023 includes $121,000 of accrued interest receivable.

43

Derivative Assets
	December 31, 2022
	Notional		Balance Sheet	Fair
(In thousands)	Amount		Location	Value
Derivatives designated as hedging instruments
Interest Rate Products	$	0	Other Assets	$	0
Total derivatives designated as hedging instruments				$	0

Derivative Liabilities
	June 30, 2023
	Notional		Balance Sheet	Fair
(In thousands)	Amount		Location	Value
Derivatives not designated as hedging instruments
Risk Participation Agreement	$	7,499	Other Liabilities	$	18
Total derivatives not designated as hedging instruments				$	18

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

Tabular Disclosure of the Effect of Fair Value and Cash Flow Hedge Accounting on the Consolidated Statements of Income

The table below presents the effect of the Company’s derivative financial instruments on the consolidated statements of income as of June 30, 2023:

The Effect of Fair Value and Cash Flow Hedge Accounting on the Statement of Financial Performance
	Location of Gain or (Loss) Recognized in Income on Derivative
	Three Months Ended June 30, 2023		Three Months Ended June 30, 2022
(In thousands)	Interest Income
Total amounts of income and expense line items presented in the statement of financial performance in which the effects of fair value or cash flow hedges are recorded	$	305	$	0
The effects of fair value and cash flow hedging:
Gain or (loss) on fair value hedging relationships in Subtopic 815-20
Interest contracts
Hedged items	(3,320)		0
Derivatives designated as hedging instruments	3,625		0

44

The Effect of Fair Value and Cash Flow Hedge Accounting on the Statement of Financial Performance
	Location of Gain or (Loss) Recognized in Income on Derivative
	Six Months Ended June 30, 2023		Six Months Ended June 30, 2022
(In thousands)	Interest Income
Total amounts of income and expense line items presented in the statement of financial performance in which the effects of fair value or cash flow hedges are recorded	$	305	$	0
The effects of fair value and cash flow hedging:
Gain or (loss) on fair value hedging relationships in Subtopic 815-20
Interest contracts
Hedged items	(3,320)		0
Derivatives designated as hedging instruments	3,625		0

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 and six months ended June 30, 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		Amount of Gain or (Loss) Recognized in Income on Derivative
		Three Months Ended
(In thousands)		June 30, 2023		June 30, 2022
Risk Participation Agreement	Other income / (expense)	$	8	$	41
Total		$	8	$	41

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		Amount of Gain or (Loss) Recognized in Income on Derivative
		Six Months Ended
(In thousands)		June 30, 2023		June 30, 2022
Risk Participation Agreement	Other income / (expense)	$	2	$	41
Total		$	2	$	41

Credit-risk-related Contingent Features

Applicable for OTC derivatives with dealers

The Company has agreements with each of its derivative counterparties that contain a provision where if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the company could also be declared in default on its derivative obligations.

As of June 30, 2023, the fair value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements was $0. As of June 30, 2023, the Company has not posted any collateral related to these agreements. The interest rate hedge counterparty has posted $3.5 million of collateral in proportion to potential losses in the derivative position.

45

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

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 June 30, 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.

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.

46

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 and six months ended June 30, 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.

This Report may include comparisons of the Company’s performance to that of a peer group, which is comprised of the group of 176 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 March 31, 2023 (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 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 the Company's Quarterly Report on Form 10-Q for the period ended March 31, 2023 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; cybersecurity incidents and threats, the ability to continue to introduce competitive new products and services on a timely, cost-

47

effective basis; governmental and public policy changes, including environmental regulation; reliance on large customers; the ability to access financial resources in the amounts, at the times and on the terms required to support the Company's future businesses; and 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.

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:

•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

48

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 half 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 developments, the Company took a number of preemptive actions in the first quarter, 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. The Company’s total deposits of $6.5 billion at June 30, 2023 were down $54.4 million or 0.8% from March 31, 2023, reflecting minimal deposit outflow. At June 30, 2023, the Company estimates total uninsured deposits of $2.8 billion. These uninsured deposit balances of $2.8 billion at June 30, 2023 include $1.1 billion of collateralized government deposits and $1.8 billion of uninsured deposits without liquid collateral pledged. Total insured deposits and collateralized government deposits represent 73.6% of the Company's total FDIC insurance eligible deposits at June 30, 2023. Furthermore, the Company’s regulatory capital ratios at June 30, 2023, were up over December 31, 2022. At June 30, 2023, Tier 1 leverage and Total Capital ratios were 9.57% and 14.48%, respectively, compared to 9.34% and 14.42% at December 31, 2022.

RESULTS OF OPERATIONS

Performance Summary

Net income for the second quarter of 2023 was $8.5 million or $0.59 diluted earnings per share, compared to $20.9 million or $1.45 diluted earnings per share for the same period in 2022. Net income for the first six months of 2023 was $27.9 million or $1.94 diluted earnings per share compared to $44.1 million or $3.05 diluted earnings per share for the first six months of 2022. Net income for the three and six months ended June 30, 2023 was down $12.4 million or 59.4% and $16.3 million or 36.9%, respectively, when compared to the same periods in 2022. The decrease in net income for both the three and six month periods was primarily due to the increase in interest rates on interest-bearing liabilities outpacing increases on interest earning asset yields, and the sale of $80.9 million of available-for-sale securities at a pre-tax loss of $7.1 million. The sale of the available-for-sale securities at a loss was undertaken for general investment portfolio and interest rate risk management. The proceeds of the sale were redeployed to invest in higher yielding available-for-sale securities, and to pay down approximately $65.0 million of overnight borrowings with the FHLB.

Return on average assets ("ROA") for the quarter ended June 30, 2023 was 0.45%, compared to 1.07% for the quarter ended June 30, 2022. Return on average shareholders’ equity ("ROE") for the second quarter of 2023 was 5.22%, compared to 13.09% for the same period in 2022. For the year-to-date period ended June 30, 2023, ROA and ROE totaled 0.74% and 8.76%, respectively, compared to 1.13% and 13.17%, 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 $6.7 million for the second quarter of 2023, a decrease of $12.1 million or 64.4% from net income of $18.8 million for the same period in 2022. For the six months ended June 30, 2023, the banking segment reported net income of $23.6 million, a decrease of $15.2 million or 39.1% from the same period in 2022. The decrease in net income for the three and six month periods ended June 30, 2023 compared to the same periods in 2022 was due to lower net interest income; lower noninterest income, which included a pre-tax loss of $7.1 million on the sale of $80.9 million of available-for-sale securities; higher operating expenses; and an increase in provision for credit losses expense.

49

Net interest income of $51.9 million for the second quarter of 2023 was down $6.4 million or 10.9% from the same period in 2022. For the six months ended June 30, 2023, net interest income of $106.1 million was down $8.7 million or 7.6% compared to the first six months of 2022. The decrease in net interest income and net interest margin in the current quarter compared to both prior periods was due primarily to the increase in interest rates on interest-bearing liabilities outpacing increases on interest earning asset yields due to the higher interest rate environment.

The provision for credit losses was $2.3 million for the three months ended June 30, 2023, compared to $856,000 for the same period in 2022. For the six month period ended June 30, 2023, the provision for credit losses was $1.4 million compared to $336,000 for the same period in 2022. The increase in provision for credit losses for both the three and six month periods is mainly driven by weaker economic forecasts, loan growth and additional reserves for individually evaluated loans. For additional information, see the section titled "The Allowance for Credit Losses" below.

Noninterest income was a loss of $378,000 for the three months ended June 30, 2023, which was down $6.7 million or 106.0% compared to the same period in 2022. For the six months ended June 30, 2023, noninterest income of $6.3 million was down $6.2 million or 49.5% compared to the six months ended June 30, 2022. The decrease was mainly driven by the pre-tax loss on the sale of securities of $7.1 million and lower service charges on deposit accounts, which were down $116,000 and $149,000, respectively, for the three and six months ended June 30, 2023, compared to the same periods in 2022. These were partially offset by cardholder service fees and income on bank owned life insurance being up $128,000 and $383,000 over the second quarter of 2022 and $267,000 and $576,000 over the first six months of 2022, respectively.

Noninterest expense of $41.4 million and $81.2 million for the three and six months ended June 30, 2023, respectively, was up $2.0 million or 5.1% and $4.6 million or 6.1%, respectively, over the same periods in 2022. The main driver for the increase in noninterest expenses was the annual merit increases in salaries and wages. Included in the quarter and year-to-date increases in 2023 were professional fees (up $355,000 and $546,000) and the non-service component of post-retirement compensation (up $395,000 and $815,000, respectively).

Insurance Segment

The insurance segment reported net income of $1.2 million for the three months ended June 30, 2023, which was down $107,000 or 8.4% compared to the second quarter of 2022. Total noninterest revenue was up $225,000 or 2.6% for the second quarter of 2023 compared to the same quarter in the prior year, primarily due to growth in both personal lines and employee benefits. The growth in personal lines commission revenue is attributed to new business, growth within the existing client base and premium increases related to change in general market conditions.

For the six months ended June 30, 2023, net income was down $477,000 or 14.1% compared to the same period in the prior year. Total revenue for the year-to-date period ended June 30, 2023, was up $426,000 or 2.4% compared to the same period last year. The increase in revenues for the six months ended June 30, 2023 compared to the prior year is mainly due to growth in overall commission revenue of $451,000 or 2.5%, with increases in personal lines (up 8.0%), commercial lines (up 1.9%), and employee benefit expense (up 4.1%) and driven by new business along with rate increases related to current market conditions.

Noninterest expenses for the three months ended June 30, 2023 were up $389,000 or 5.7% compared to the three months ended June 30, 2022. Year-to-date noninterest expenses were up $1.1 million or 8.3% compared to the six months ended June 30, 2022. The increase in noninterest expenses for the three and six months ended June 30, 2023 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 $614,000 for the three months ended June 30, 2023, which was down $145,000 or 19.1% compared to the second quarter of 2022. Revenue for the second quarter of 2023 was up $138,000 or 3.0% compared to the same period last year, primarily due to favorable market conditions during the second quarter of 2023, which contributed to an increase in assets under management. Total expense for the second quarter of 2023 was up $453,000 or 13.1% compared to the second quarter of 2022, which was primarily attributable to an increase in salaries and wages and benefits as well as professional fees, largely related to employee recruiting fees.

For the six months ended June 30, 2023, net income of $1.3 million was down $628,000 or 31.8% compared to the same period in the prior year. Total revenue for the year-to-date period ended June 30, 2023 was down $175,000 or 1.8% as compared to the prior year period. Noninterest expense for the six months ended June 30, 2023 was up $379,000 or 5.3% as compared to the prior year period, mainly in professional fees and salaries and wages and benefits.

50

Net Interest Income

The following tables show average interest-earning assets and interest-bearing liabilities, and the corresponding yield or cost associated with prior quarter of 2023 and for each of the three and six month periods ended June 30, 2023 and 2022:

Average Consolidated Statements of Condition and Net Interest Analysis (Unaudited)
	Quarter Ended						Quarter Ended
	June 30, 2023						March 31, 2023
	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	$	13,585	$	183	5.40	%	$	12,733	$	139	4.42	%
Securities (1)
U.S. Government securities	1,972,719		7,304		1.49	%	2,033,307		7,424		1.48	%
State and municipal (2)	92,194		590		2.57	%	93,201		599		2.60	%
Other securities (2)	3,288		56		6.86	%	3,284		53		6.55	%
Total securities	2,068,201		7,950		1.54	%	2,129,792		8,076		1.54	%
FHLBNY and FRB stock	23,211		323		5.59	%	16,750		300		7.26	%
Total loans and leases, net of unearned income (2)(3)	5,304,717		63,709		4.82	%	5,251,278		61,034		4.71	%
Total interest-earning assets	7,409,714		72,165		3.91	%	7,410,553		69,549		3.81	%
Other assets	226,086						223,240
Total assets	$	7,635,800					$	7,633,793
LIABILITIES & EQUITY
Deposits
Interest-bearing deposits
Interest bearing checking, savings, & money market	3,701,229		10,590		1.15	%	3,833,566		8,641		0.91	%
Time deposits	745,970		5,055		2.72	%	673,871		3,541		2.13	%
Total interest-bearing deposits	4,447,199		15,645		1.41	%	4,507,437		12,182		1.10	%
Federal funds purchased & securities sold under agreements to repurchase	56,083		15		0.11	%	57,523		14		0.10	%
Other borrowings	379,744		4,314		4.56	%	269,752		2,796		4.20	%
Total interest-bearing liabilities	4,883,026		19,974		1.64	%	4,834,712		14,992		1.26	%
Noninterest bearing deposits	2,004,560						2,065,701
Accrued expenses and other liabilities	97,660						102,172
Total liabilities	6,985,246						7,002,585
Tompkins Financial Corporation Shareholders’ equity	649,097						629,784
Noncontrolling interest	1,457						1,424
Total equity	650,554						631,208
Total liabilities and equity	$	7,635,800					$	7,633,793
Interest rate spread					2.27	%					2.55	%
Net interest income/margin on earning assets			52,191		2.83	%			54,557		2.99	%
Tax Equivalent Adjustment			(295)						(311)
Net interest income per consolidated financial statements			$	51,896					$	54,246

51

Average Consolidated Statements of Condition and Net Interest Analysis (Unaudited)
	Quarter Ended						Quarter Ended
	June 30, 2023						June 30, 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	$	13,585	$	183	5.40	%	$	88,094	$	64	0.29	%
Securities (1)
U.S. Government securities	1,972,719		7,304		1.49	%	2,305,102		7,746		1.35	%
State and municipal (2)	92,194		590		2.57	%	97,481		619		2.55	%
Other securities (2)	3,288		56		6.86	%	3,337		28		3.40	%
Total securities	2,068,201		7,950		1.54	%	2,405,920		8,393		1.40	%
FHLBNY and FRB stock	23,211		323		5.59	%	12,234		120		3.92	%
Total loans and leases, net of unearned income (2)(3)	5,304,717		63,709		4.82	%	5,115,340		52,733		4.14	%
Total interest-earning assets	7,409,714		72,165		3.91	%	7,621,588		61,310		3.23	%
Other assets	226,086						209,057
Total assets	$	7,635,800					$	7,830,645
LIABILITIES & EQUITY
Deposits
Interest-bearing deposits
Interest bearing checking, savings, & money market	3,701,229		10,590		1.15	%	4,073,279		890		0.09	%
Time deposits	745,970		5,055		2.72	%	603,791		1,157		0.77	%
Total interest-bearing deposits	4,447,199		15,645		1.41	%	4,677,070		2,047		0.18	%
Federal funds purchased & securities sold under agreements to repurchase	56,083		15		0.11	%	54,885		15		0.11	%
Other borrowings	379,744		4,314		4.56	%	169,390		629		1.49	%
Total interest-bearing liabilities	4,883,026		19,974		1.64	%	4,901,345		2,691		0.22	%
Noninterest bearing deposits	2,004,560						2,189,132
Accrued expenses and other liabilities	97,660						100,813
Total liabilities	6,985,246						7,191,290
Tompkins Financial Corporation Shareholders’ equity	649,097						637,896
Noncontrolling interest	1,457						1,459
Total equity	650,554						639,355
Total liabilities and equity	$	7,635,800					$	7,830,645
Interest rate spread					2.27	%					3.01	%
Net interest income/margin on earning assets			52,191		2.83	%			58,619		3.09	%
Tax Equivalent Adjustment			(295)						(357)
Net interest income per consolidated financial statements			$	51,896					$	58,262

52

Average Consolidated Statements of Condition and Net Interest Analysis (Unaudited)
	Year to Date Period Ended						Year to Date Period Ended
	June 30, 2023						June 30, 2022
	Average						Average
	Balance				Average		Balance				Average
(Dollar amounts in thousands)	(YTD)		Interest		Yield/Rate		(YTD)		Interest		Yield/Rate
ASSETS
Interest-earning assets
Interest-bearing balances due from banks	$	13,161	$	322	4.93	%	$	110,984	$	105	0.19	%
Securities (1)
U.S. Government securities	2,002,846		14,728		1.48	%	2,299,389		15,108		1.32	%
State and municipal (2)	92,695		1,188		2.58	%	99,602		1,267		2.57	%
Other securities (2)	3,286		110		6.70	%	3,363		51		3.06	%
Total securities	2,098,827		16,026		1.54	%	2,402,354		16,426		1.38	%
FHLBNY and FRB stock	19,998		623		6.29	%	11,172		225		4.06	%
Total loans and leases, net of unearned income (2)(3)	5,278,145		124,744		4.77	%	5,085,808		104,088		4.13	%
Total interest-earning assets	7,410,131		141,715		3.86	%	7,610,318		120,844		3.20	%
Other assets	224,671						259,809
Total assets	$	7,634,802					$	7,870,127
LIABILITIES & EQUITY
Deposits
Interest-bearing deposits
Interest bearing checking, savings, & money market	3,767,032		19,230		1.03	%	4,116,870		1,638		0.08	%
Time deposits	710,119		8,596		2.44	%	617,616		2,455		0.80	%
Total interest-bearing deposits	4,477,151		27,826		1.25	%	4,734,486		4,093		0.17	%
Federal funds purchased & securities sold under agreements to repurchase	56,799		29		0.10	%	59,536		31		0.11	%
Other borrowings	325,052		7,111		4.41	%	147,466		1,129		1.54	%
Total interest-bearing liabilities	4,859,002		34,966		1.45	%	4,941,488		5,253		0.21	%
Noninterest bearing deposits	2,034,961						2,149,201
Accrued expenses and other liabilities	99,905						103,451
Total liabilities	6,993,868						7,194,140
Tompkins Financial Corporation Shareholders’ equity	639,494						674,545
Noncontrolling interest	1,440						1,442
Total equity	640,934						675,987
Total liabilities and equity	$	7,634,802					$	7,870,127
Interest rate spread					2.41	%					2.99	%
Net interest income/margin on earning assets			106,749		2.90	%			115,591		3.06	%
Tax Equivalent Adjustment			(607)						(715)
Net interest income per consolidated financial statements			$	106,142					$	114,876

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.

Net Interest Income 

Net interest income is the Company’s largest source of revenue, representing 80.4% and 76.3%, respectively, of total revenues for the three and six months ended June 30, 2023, compared to 75.5% and 74.7% for the same periods 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.

53

Net interest income for the three months and six months ended June 30, 2023, was down $6.4 million or 10.9%, and $8.7 million or 7.6%, respectively, from the same periods 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 2023 over 2022.

Net interest margin for the three months ended June 30, 2023 was 2.83% compared to 3.09% for the same period in 2022. Net interest margin for the six months ended June 30, 2023 was 2.90% compared to 3.06% for the same period in 2022. The decrease in net interest margin for the three and six months ended June 30, 2023 compared to the same periods in 2022 was due to increases 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.

The quarterly net interest margin for the second quarter of 2023 was 2.83%, down from a net interest margin of 2.99% for the first quarter of 2023. The decrease in net interest margin was driven mainly by higher funding costs during the second quarter as a result of higher average rates paid on interest-bearing deposits and borrowings exceeding the growth in average asset yields. The average cost of interest-bearing liabilities for the second quarter of 2023 was 1.64% compared to 1.26% for the first quarter of 2023, while the average yield on interest earning assets was 3.91% and 3.81% for the same two periods. Average interest-bearing deposit balances for the second quarter of 2023 were down $60.2 million or 1.3%, while other borrowings were up $110.0 million or 40.8%, compared to the first quarter of 2023.

Interest income for the three and six months ended June 30, 2023 was $72.2 million and $141.7 million, up 17.7% and 17.3%, respectively, compared to the same periods in 2022. The growth in the three and six month periods was mainly driven by higher interest earning asset yields due to the higher interest rate environment. The three and six months ended June 30, 2023 average yield on interest-earning assets increased 68 and 66 basis points, respectively, while average interest earning assets decreased $211.9 million or 2.8% and $200.2 million or 2.6%, respectively, compared to the same period in 2022. The increase in interest income was mainly in interest and fees on loans, driven by higher yields and higher average balances for the three and six months ended June 30, 2023, compared to the same periods in 2022. The three and six months ended June 30, 2023 average loan balances for the second quarter of 2023 were up $189.4 million or 3.7% and $192.3 million or 3.8% from the same periods of 2022. The average yield on loans for the three and six months ended June 30, 2023, of 4.82% and 4.77% was up 68 and 64 basis points from the same periods in 2022. For the three and six months ended June 30, 2023, average balances for securities were down $337.7 million or 14.0% and $303.5 million or 12.63%, respectively, over the same periods in 2022, while the average yield on securities of 1.54% for the three and six months ended June 30, 2023, was up 14 and 16 basis points, respectively, over the same periods in 2022. During the second quarter of 2023, the Company sold $80.9 million of available-for-sale securities, which had an average yield of 0.48%, and a remaining average life of 2.3 years. Approximately $15.0 million of the proceeds from the sale were reinvested in available-for-sale securities with an average yield of approximately 4.86%, while the remaining proceeds were used to pay down approximately $65.0 million of overnight borrowings with the FHLB.

Interest expense for the three months ended June 30, 2023, increased $17.3 million or 642.3%, and increased $29.7 million or 565.6% for the six month period ended June 30, 2023 compared to the same periods in 2022. The average cost of interest-bearing deposits for the three and six months ended June 30, 2023 was 1.41% and 1.25%, respectively, up 123 and 108 basis points, respectively, compared to the same periods in 2022. Average interest-bearing deposits for the three and six months ended June 30, 2023, were down $230.0 million or 4.9% and $257.3 million or 5.4%, respectively, from the same three and six months period in 2022. Average noninterest bearing deposits were down $184.6 million or 8.4% for the three months ended June 30, 2023 when compared to the second quarter of 2022, and for the six months ended June 30, 2023 were down $114.2 million or 5.3% compared to the same period in 2022. Average other borrowings for the three and six months ended June 30, 2023 were up $210.4 million or 124.2%, and up $177.6 million or 120.4%, respectively, compared to the same periods 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 ("ACL") at an appropriate level. Provision for credit losses in the second quarter of 2023 was $2.3 million compared to $856,000 for the second quarter of 2022. Provision for credit losses for the six months ended June 30, 2023 was $1.4 million compared to $336,000 for the same period in 2022. The provision for credit losses for the three and six months ended June 30, 2023 and 2022 included a credit to provision expense of $166,000 and expense of $189,000, respectively, related to off-balance sheet credit exposures compared to a provision of $76,000 and $290,000, respectively, for the same periods in 2022. The increase in provision for credit losses for both the three and six month periods is mainly driven by weaker economic forecasts, loan growth, and changes in 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.

54

Noninterest Income 

Noninterest income was $12.6 million and $33.0 million for the three and six months ended June 30, 2023, which were down $6.3 million and $5.9 million, respectively, from the same periods in 2022. Noninterest income for the three and six months ended June 30, 2023 includes a pre-tax loss of $7.1 million on sale of available-for-sale securities. Noninterest income represented 19.6% of total revenue for the second quarter of 2023 and 23.7% for the six months ended June 30, 2023, compared to 24.5% and 25.3%, respectively, for the same periods in 2022.

Insurance commissions and fees, the largest component of noninterest income, were $8.7 million for the second quarter of 2023, an increase of 2.9% from the same period for the prior year. The increase in insurance commissions and fees in the second quarter of 2023 over the same period in 2022 was mainly life and health insurance and defined benefit plan commissions which grew by 9.2% and 7.5%, respectively. For the first six months of 2023, insurance commissions and fees were up $435,000 or 2.5% compared to the same period in 2022. The increase in revenues for the six months ended June 30, 2023 compared to the prior year period was primarily due to growth in personal lines revenue, which was up 8.2%, attributable to new business, growth within the existing client base and premium increases related to change in general market conditions.

Wealth management fees of $4.7 million in the second quarter of 2023 were up $82,000 or 1.8% compared to the second quarter of 2022. For the first six months of 2023, wealth management fees were down $326,000 or 3.4% compared to the same period in 2022. Wealth management fees include trust services, financial planning, wealth management services, and brokerage related services. The fair value of assets managed by, or in custody of, Tompkins was $3.1 billion at June 30, 2023, up from $2.8 billion at June 30, 2022. The increase in assets from prior year was mainly a result of stronger market performance, in comparison to declining markets experienced during the second quarter of 2022.

Service charges on deposit accounts of $1.6 million and $3.4 million for the three and six months ended June 30, 2023 were down $116,000 or 6.6% and $149,000 or 4.2%, respectively, over the same periods in 2022, mainly due to lower net overdraft fees.

Card services income in the second quarter of 2023 was up $128,000 or 4.3% over the same three month period end in 2022, and up $267,000 or 4.9% for the six months ended June 30, 2023 compared to the same period in 2022.

Other income of $1.6 million in the second quarter of 2023 was up $362,000 or 29.2% compared to the same period in 2022. For the first six months of 2023, other income of $3.5 million was up $827,000 or 30.4% compared to the same period in 2022. The increase for the three and six months ended June 30, 2023 compared to the same periods in 2022 was mainly due to higher earnings on bank owned life insurance. Earnings on bank owned life insurance were up $383,000 and $576,000, respectively, as certain separate account policies in 2022 were unfavorably impacted by decreases in the market value of the underlying assets.

Noninterest Expense 

Noninterest expense of $52.0 million for the second quarter of 2023 and $102.1 million for the first six months of 2023 was up 5.8%, and 6.4%, respectively, compared to the same periods in 2022.

Expenses associated with compensation and benefits comprise the largest component of noninterest expense, representing 61.5% and 61.9% of total noninterest expense for the three and six months ended June 30, 2023. Salaries and wages expense for the three and six months ended June 30, 2023, respectively, increased by 941,000 or 3.9%, and $2.2 million or 4.6%, respectively, compared to the same periods in 2022. The increases were mainly due to normal merit increases. Employee benefits for the three and six months ended June 30, 2023 increased by $306,000 or 4.8% and $1.3 million or 10.3%, respectively. The increase is mainly as a result of higher health care expense.

Other expense categories, not related to compensation and benefits, for the three and six months ended June 30, 2023 were up $1.6 million or 8.7%, and up $2.7 million or 7.6%, respectively from the prior year periods. Contributing to the growth in these expenses for the three and six months ended June 30, 2023, compared to the same periods in 2022 were the following: other losses, up $517,000 or 461.6% and $439,000 or 155.7%, respectively, mainly due to recent fraud related to Home Equity Lines of Credit ("HELOC") products; expenses related to the Company’s retirement plans, up $411,000 or 360.5% and $854,000 or 442.5%, respectively; professional fees, up $405,000 or 23.5% and $603,000 or 18.1%, respectively, marketing expenses, up $232,000 or 15.9% and $279,000 or 11.1%, respectively, FDIC insurance, up $102,000 or 15.1% and $455,000 or 33.0%, respectively; and travel and meetings expenses, up $160,000 or 50.6% and $329,000 or 67.4%, respectively.

55

Income Tax Expense 

The provision for income taxes was $1.8 million for an effective rate of 17.3% for the second quarter of 2023, compared to tax expense of $6.3 million and an effective rate of 23.2% for the same quarter in 2022. For the first six months of 2023, the provision for income taxes was $7.7 million for an effective rate of 21.6% compared to tax expense of $13.3 million and an effective rate of 23.1% for the same period in 2022. The effective rates differ from the U.S. and state statutory rates 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 decrease in the effective tax rate for the three and six months ended June 30, 2023, compared to the same periods in 2022 is largely due to the anticipated retention of certain New York State tax benefits.

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 qualified average assets of no more than $8.0 billion for the taxable year. Based on current estimates of average assets during 2023, the Company expects to retain the benefits in 2023.

FINANCIAL CONDITION

Total assets were $7.6 billion at June 30, 2023, down $44.4 million or 0.6% from December 31, 2022. The decrease in total assets from year-end 2022 was mainly due to a decrease in available-for-sale securities, partially offset by an increase in the loan portfolio, compared to December 31, 2022. Total securities were $1.8 billion at June 30, 2023, down $126.9 million or 6.7% compared to the $1.9 billion reported at year-end 2022. The decrease was mainly due to the sale of $80.9 million of available-for-sale securities during the second quarter of 2023. Total loans were up $83.5 million or 1.6% over year-end 2022. Total deposits at June 30, 2023 were down $147.6 million or 2.2% from December 31, 2022. Other borrowings at June 30, 2023 increased $95.8 million or 32.9% from December 31, 2022, as loan growth outpaced deposit growth.

Securities

As of June 30, 2023, the Company’s securities portfolio was $1.8 billion or 23.4% 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
	June 30, 2023				December 31, 2022
(In thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
U.S. Treasuries	$	190,275	$	168,094	$	190,170	$	167,251
Obligations of U.S. Government sponsored entities	592,694		523,543		681,192		601,167
Obligations of U.S. states and political subdivisions	90,330		82,047		93,599		85,281
Mortgage-backed securities - residential, issued by
U.S. Government agencies	54,852		48,942		58,727		52,668
U.S. Government sponsored entities	757,400		643,135		805,603		686,222
U.S. corporate debt securities	2,500		2,242		2,500		2,378
Total available-for-sale debt securities	$	1,688,051	$	1,468,003	$	1,831,791	$	1,594,967

Held-to-Maturity Debt Securities
	June 30, 2023				December 31, 2022
(In thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
U.S. Treasuries	$	86,370	$	73,772	$	86,478	$	73,541
Obligations of U.S. Government sponsored entities	225,999		188,672		225,866		188,151
Total held-to-maturity debt securities	$	312,369	$	262,444	$	312,344	$	261,692

As of June 30, 2023, the available-for-sale debt securities portfolio had net unrealized losses of $220.0 million compared to net unrealized losses of $236.8 million at December 31, 2022. The decrease in unrealized losses related to the available-for-sale debt securities portfolio, which reflects the amount that the amortized cost exceeds fair value, was impacted by interest rate volatility in the market, as well as the sale of $80.1 million in securities at a pre-tax loss of $7.1 million during the first six

56

months of 2023. Approximately $15.0 million of the proceeds from the sale were reinvested in available-for-sale securities, while the remaining proceeds were used to pay down approximately $65.0 million of overnight borrowing with the FHLB. Management’s policy is to purchase investment grade securities that on average have relatively short duration, which helps mitigate interest rate risk and provides sources of liquidity without significant risk to capital.

The Company evaluates available-for-sale and held-to-maturity debt securities in an unrealized loss position to determine whether the decline in the fair value below the amortized cost basis (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 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.

The Company determined that at June 30, 2023, all impaired available-for-sale and held-to-maturity debt securities were because of changes in interest rates and levels of market liquidity, relative to when the investment securities were purchased, and not due to the credit worthiness of the underlying issuers. 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. Therefore, the Company carried no ACL at June 30, 2023 and there was no credit loss expense recognized by the Company with respect to the securities portfolio during the three and six months ended June 30, 2023.

Loans and Leases
Loans and leases as of the end of the second quarter and prior year-end period were as follows:
(In thousands)	06/30/2023		12/31/2022
Commercial and industrial
Agriculture	$	64,815	$	85,073
Commercial and industrial other	701,006		705,700
PPP loans	613		756
Subtotal commercial and industrial	766,434		791,529
Commercial real estate
Construction	249,847		201,116
Agriculture	215,915		214,963
Commercial real estate other	2,487,067		2,437,339
Subtotal commercial real estate	2,952,829		2,853,418
Residential real estate
Home equity	185,529		188,623
Mortgages	1,348,448		1,346,318
Subtotal residential real estate	1,533,977		1,534,941
Consumer and other
Indirect	1,419		2,224
Consumer and other	85,794		75,412
Subtotal consumer and other	87,213		77,636
Leases	16,972		16,134
Total loans and leases	5,357,425		5,273,658
Less: unearned income and deferred costs and fees	(5,060)		(4,747)
Total loans and leases, net of unearned income and deferred costs and fees	$	5,352,365	$	5,268,911

57

The below table shows a more detailed break-out of commercial real estate ("CRE") loans as of June 30, 2023 and December 31, 2022:

	06/30/2023				12/31/2022
CRE Concentration	Balance		% CRE		Balance		% CRE
Construction	$	249,847	8.46	%	$	201,031	7.05	%
Multi-family/Single family real estate	629,305		21.31	%	587,467		20.59	%
Agriculture	221,303		7.49	%	211,231		7.40	%
Retail1	428,556		14.51	%	434,998		15.25	%
Hotels/motels	159,603		5.41	%	144,710		5.07	%
Office space2	257,101		8.71	%	236,281		8.28	%
Mixed/Other	1,007,113		34.11	%	1,037,614		36.36	%
Total CRE	$	2,952,828	100.00	%	$	2,853,332	100.00	%
1Reatail includes 3.1% and 3.2% of owner occupied real estate at June 30, 2023 and December 31, 2022.
2Office space includes 1.5% of owner occupied real estate at both June 30, 2023 and December 31, 2022.

 

Total loans and leases of $5.4 billion at June 30, 2023 were up $83.5 million or 1.6% from December 31, 2022, mainly in the commercial real estate, and partially offset by the decline commercial loan balances. As of June 30, 2023, total loans and leases represented 70.2% 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 June 30, 2023, down $1.0 million or 0.1% compared to December 31, 2022, and comprised 28.7% of total loans and leases at June 30, 2023.

The Company may sell residential real estate loans in the secondary market based on interest rate considerations. The Company's Asset/Liability Committee meets regularly and establishes standards for selling and retaining residential real estate mortgage originations. 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 six months of 2023 and 2022, the Company sold residential loans totaling $2.1 million and $305,000, respectively, recognizing gains of $65,000 and $57,000, 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 $945,000 at June 30, 2023, and $973,000 at December 31, 2022. 

Commercial real estate loans and commercial and industrial loans totaled $3.0 billion and $766.4 million, respectively, and represented 55.2% and 14.3%, respectively, of total loans and leases as of June 30, 2023. The commercial real estate portfolio was up $99.4 million or 3.5% over year-end 2022, while commercial and industrial loans were down $25.1 million or 3.2%.

As of June 30, 2023, agriculturally-related loans totaled $280.7 million or 5.2% 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.

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

58

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.

The Allowance for Credit Losses

The below table represents the allowance for credit losses as of June 30, 2023 and December 31, 2022. The table provides, 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)	6/30/2023		12/31/2022
Allowance for credit losses
Commercial and industrial	$	6,685	$	6,039
Commercial real estate	28,968		27,287
Residential real estate	11,111		11,154
Consumer and other	1,680		1,358
Finance leases	101		96
Total	$	48,545	$	45,934

As of June 30, 2023, the total allowance for credit losses was $48.5 million, up $2.6 million or 5.7% compared to December 31, 2022. The ACL as a percentage of total loans measured 0.91% at June 30, 2023, compared to 0.87% at December 31, 2022. The increase in the ACL from year-end 2022 reflects updated economic forecasts for unemployment and gross domestic product ("GDP") coupled with loan growth, mainly in the real estate portfolios, and the addition of a specific reserve added to one commercial real estate relationship.

Asset quality measures at June 30, 2023 were generally favorable compared with December 31, 2022. Loans internally-classified Special Mention or Substandard were up $19.8 million or 20.2% compared to December 31, 2022. Nonperforming loans and leases were down $1.5 million or 4.5% from year end 2022 and represented 0.59% of total loans at June 30, 2023 compared to 0.62% at December 31, 2022. The allowance for credit losses covered 154.76% of nonperforming loans and leases at June 30, 2023, compared to 139.86% at December 31, 2022. The increase in Special Mention and Substandard loans and leases was mainly due to one commercial real estate loan totaling approximately $15.3 million being added to Substandard, and one commercial real estate relationship totaling approximately $18.6 million being added to Special Mention during the second quarter of 2023.

59

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

Analysis of the Allowance for Credit Losses
(In thousands)	6/30/2023			6/30/2022
Average loans outstanding during period	$	5,278,145		$	5,085,808
Allowance at beginning of year, prior to adoption of ASU 2016-13	45,934			42,843
Impact of adopting ASU 2016-13	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			50
Residential real estate	2			51
Consumer and other	275			278
Finance leases	0			0
Total loans charged-off	$	277		$	402
RECOVERIES OF LOANS PREVIOUSLY CHARGED-OFF:
Commercial and industrial	59			26
Commercial real estate	1,237			805
Residential real estate	178			307
Consumer and other	111			168
Total loans recovered	$	1,585		$	1,306
Net loans recovered	(1,308)			(904)
Provision for credit losses related to loans	1,239			46
Balance of allowance at end of period	$	48,545		$	43,793
Allowance for credit losses as a percentage of total loans and leases	0.91		%	0.85		%
Annualized net (recoveries) charge-offs on loans to average total loans and leases during the period	(0.05)		%	(0.04)		%

The provision for credit losses for loans was $2.4 million for the three months ended June 30, 2023, compared to $780,000 for the same period in 2022. For the six month period ended June 30, 2023, the provision for credit losses for loans was $1.2 million compared to $46,000 for the same period in 2022. The provision expense for credit losses for loans is based upon the Company's quarterly evaluation of the appropriateness of the allowance for credit losses. As discussed above, the ACL model estimated higher reserves at June 30, 2023 due to lower GDP and unemployment forecasts coupled with loan growth and additional reserves for an individually evaluated commercial loan. Net loan and lease recoveries for the six months ended June 30, 2023 were $1.3 million compared to net recoveries of $904,000 for the same period in 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 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.

For the three months ended June 30, 2023, the provision for credit losses for off-balance sheet credit exposures was a credit of $166,000 compared to provision expense of $76,000 for the same period in 2022. For the six month period ended June 30, 2023, the provision for credit losses for off-balance sheet credit exposures was $189,000 compared to $290,000 for the same six month period in 2022.

60

Analysis of Past Due and Nonperforming Loans
(In thousands)	6/30/2023			12/31/2022			6/30/2022
Loans 90 days past due and accruing
Commercial and industrial	$	0		$	25		$	62
Residential real estate	7			0			0
Consumer and other	27			0			0
Total loans 90 days past due and accruing	$	34		$	25		$	62
Nonaccrual loans
Commercial and industrial	$	3,146		$	618		$	293
Commercial real estate	11,655			13,858			12,545
Residential real estate	16,209			13,544			11,536
Consumer and other	323			269			291
Total nonaccrual loans	$	31,333		$	28,289		$	24,665
Performing troubled debt restructuring*	0			4,530			4,872
Total nonperforming loans and leases	$	31,367		$	32,844		$	29,599
Other real estate owned	36			152			122
Total nonperforming assets	$	31,403		$	32,996		$	29,721
Allowance as a percentage of nonperforming loans and leases	154.76		%	139.86		%	147.95		%
Total nonperforming loans and leases as percentage of total loans and leases	0.59		%	0.62		%	0.57		%
Total nonperforming assets as percentage of total assets	0.41		%	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 loans past due 90 days and accruing, nonaccrual loans, modified loans due to financial difficulty, and foreclosed real estate/other real estate owned. Total nonperforming assets of $31.4 million at June 30, 2023 were down $1.6 million or 4.8% compared to December 31, 2022, and up $1.7 million or 5.7% compared to June 30, 2022. Nonperforming assets represented 0.41% of total assets at June 30, 2023, down from 0.43% at December 31, 2022, and up from 0.38% at June 30, 2022. Our peer group's average ratio of nonperforming assets to total assets was 0.28% at March 31, 2023.

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 June 30, 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. 

The ratio of the allowance to nonperforming loans and leases (loans past due 90 days and accruing, nonaccrual loans and restructured troubled debt) was 154.76% at June 30, 2023, compared to 139.86% at December 31, 2022, and 147.95% at June 30, 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.

61

The Company, through its internal loan review function, identified 18 commercial relationships from the loan portfolio totaling $47.0 million at June 30, 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 18 relationships at June 30, 2023, that were Substandard, there were 6 relationships that equaled or exceeded $1.0 million, which in aggregate totaled $43.2 million, the largest of which was $16.9 million. The Company continues to monitor these potential problem relationships; however, management cannot predict the extent to which continued weak economic conditions or other factors may further impact borrowers. These loans remain in a performing status due to a variety of factors, including payment history, the value of collateral supporting the credits, and personal or government guarantees. These factors, when considered in the aggregate, give management reason to believe that the current risk exposure on these loans does not warrant accounting for these loans as nonperforming. However, these loans do exhibit certain risk factors, which have the potential to cause them to become nonperforming. Accordingly, management's attention is focused on these credits, which are reviewed on at least a quarterly basis.

Capital

Total equity was $636.4 million at June 30, 2023, an increase of $19.1 million or 3.1% from December 31, 2022. The increase was the result of decrease in unrealized losses on the available-for-sale portfolio from $178.8 million at year-end 2022 to $166.1 million at June 30, 2023, and an increase in retained earnings.

Additional paid-in capital decreased by $4.6 million, from $302.8 million at December 31, 2022, to $298.1 million at June 30, 2023. The decrease was primarily attributable to a $6.3 million aggregate purchase price related to the Company's repurchase and retirement of 108,219 shares of its common stock during the first six months of 2023 pursuant to its publicly announced stock repurchase plan; partially offset by $2.2 million attributed to stock-based compensation.

Retained earnings increased by $10.4 million or 2.0% from $526.7 million at December 31, 2022, to $537.1 million at June 30, 2023, mainly reflecting net income of $27.9 million for the year-to-date period, less dividends of $17.4 million.

Accumulated other comprehensive loss decreased from a net loss of $208.7 million at December 31, 2022, to a net loss of $195.5 million at June 30, 2023, reflecting a $12.7 million decrease in unrealized losses on available-for-sale debt securities, mainly due to the sale of securities with a realized pre-tax loss of $7.1 million and a $503,000 decrease related to post-retirement benefit plan losses.

Cash dividends paid in the first six months of 2023 totaled approximately $17.4 million or $1.21 per common share, representing 62.5% of year to date 2023 earnings through June 30, 2023, compared to cash dividends of $16.6 million or $1.14 per common share paid in the first six months of 2022. Cash dividends per share during the first six months of 2023 were up 5.3% over the same period in 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 meets all capital adequacy requirements to which they are subject.

62

The following table provides a summary of the Company’s capital ratios as of June 30, 2023: 

Regulatory Capital Analysis
June 30, 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)	$	789,322	14.48	%	$	572,407	10.50	%	$	545,149	10.00	%
Tier 1 Capital (to risk weighted assets)	$	736,317	13.51	%	$	463,377	8.50	%	$	436,119	8.00	%
Tier 1 Common Equity (to risk weighted assets)	$	736,317	13.51	%	$	381,604	7.00	%	$	354,347	6.50	%
Tier 1 Capital (to average assets)	$	736,317	9.57	%	$	307,613	4.00	%	$	384,517	5.00	%

As of June 30, 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 14.5% at June 30, 2023, compared with 14.4% as of December 31, 2022. Tier 1 capital as a percent of risk weighted assets remained unchanged from June 30, 2023 compared to the end of 2022 at 13.5%. Tier 1 capital as a percent of average assets was 9.6% at June 30, 2023, up from 9.3% as of December 31, 2022. Common equity Tier 1 capital was 13.5% at the end of the second quarter of 2023, identical to the end of 2022.

As of June 30, 2023, the capital ratios for the Company’s subsidiary bank also exceeded the minimum required capital ratios for well capitalized institutions, plus the fully phased-in capital conservation buffer.

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 elected to utilize the five-year CECL transition.

Deposits and Other Liabilities

Total deposits of $6.5 billion at June 30, 2023 were down $147.6 million or 2.2% from December 31, 2022, and were down $54.4 million or 0.8% from March 31, 2023. The decrease from year-end 2022 was primarily in noninterest bearing deposits, which were down $125.3 million or 5.8% and in checking, money market and savings balances, which collectively were down $161.5 million or 4.2%. These decreases were partially offset by increases in time deposits, which were up $139.2 million or 22.0% compared to December 31, 2022.

The most significant source of funding for the Company is core deposits. The Company defines core deposits as total deposits less time deposits of $250,000 or more, brokered deposits, municipal money market deposits, and reciprocal deposit relationships with municipalities. Core deposits decreased by $296.3 million or 5.3% from year-end 2022, to $5.3 billion at June 30, 2023. Core deposits at June 30, 2023 were down $115.2 million or 2.1% from March 31, 2023. Core deposits represented 81.9% of total deposits at June 30, 2023, compared to 84.5% of total deposits at December 31, 2022 and 82.9% at March 31, 2023.

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 $50.5 million at June 30, 2023, and $56.3 million at December 31, 2022. Management generally views retail repurchase agreements as an alternative to large time deposits.

The Company’s other borrowings totaled $387.1 million at June 30, 2023, up $95.8 million or 32.9% from $291.3 million at December 31, 2022. Borrowings at June 30, 2023 consisted of $252.1 million in overnight FHLB advances and $135.0 million of FHLB term advances, compared to $241.3 million in FHLB overnight advances and $50.0 million of FHLB term advances at year end 2022. Of the $135.0 million in FHLB term advances at June 30, 2023, $20.0 million is due to mature in less than one year and $115.0 million is due to mature in over one year.

63

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 large, stable core deposit base and strong capital position are the foundation for the Company’s liquidity position. The Company uses a variety of resources to meet its liquidity needs, which include deposits, cash and cash equivalents, short-term investments, cash flow from lending and investing activities, repurchase agreements, and borrowings. The Company’s Asset/Liability Management Committee monitors asset and liability positions of the Company’s subsidiary banks individually and on a combined basis. The Committee reviews periodic reports on liquidity and interest rate sensitivity positions. Comparisons with industry and peer groups are also monitored. The Company’s strong reputation in the communities it serves, along with its strong financial condition, provides access to numerous sources of liquidity as described below. Management believes these diverse liquidity sources provide sufficient means to meet all demands on the Company’s liquidity that are reasonably likely to occur. Management measures liquidity, including the level of cash, unencumbered securities, and the availability of dependable borrowing sources. The Board has set a policy limit stating that reliable sources of liquidity should remain in excess of 6% of total assets. The ratio was 19.6% at June 30, 2023 compared to 21.6% of assets at December 31, 2022.

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, municipal money market deposits, reciprocal deposits, bank borrowings, securities sold under agreements to repurchase and overnight and term advances from the FHLB. Rates and terms are the primary determinants of the mix of these funding sources. Non-core funding sources of $1.6 billion at June 30, 2023 increased $238.8 million or 17.4% as compared to year-end 2022. Non-core funding sources, as a percentage of total liabilities, were 23.0% at June 30, 2023, compared to 19.4% at December 31, 2022. 

Non-core funding sources may require securities to be pledged against the underlying liability. Securities held at carrying value of $1.6 billion at June 30, 2023 and $1.8 billion at December 31, 2022, and were either pledged or sold under agreements to repurchase. Pledged securities represented 81.9% of total securities at June 30, 2023, compared to 82.4% of total securities at December 31, 2022.

Cash and cash equivalents totaled $81.6 million as of June 30, 2023 which increased 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 $46.9 million on June 30, 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 $692.1 million at June 30, 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 June 30, 2023, up $9.5 million or 0.6% 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, and FHLB advances. Through its subsidiary bank, the Company has borrowing relationships with the FHLB 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 June 30, 2023, the established borrowing capacity with the FHLB was $1.7 billion, or 22.3% of total assets, with available unencumbered mortgage-related assets of $1.3 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 June 30, 2023 the available borrowing capacity with the Federal Reserve Bank was $245.7 million, secured by investment securities. In addition to the available borrowing lines at the FHLB and Federal Reserve Bank, the Company maintains $137.7 million of unencumbered securities which could be pledged to further enhance secured borrowing capacity.

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

64

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"): provides the disclosure requirements for derivatives and hedging activities with the intent to provide users of financial statements with an enhanced understanding of: (a) how and why an entity uses derivative instruments, (b) how the entity accounts for derivative instruments and related hedged items, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. Further, qualitative disclosures are required that explain the Company’s objectives and strategies for using derivatives, as well as quantitative disclosures about the fair value of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative instruments.

As required by ASU 2022-01, the Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting.

In accordance with the FASB’s fair value measurement guidance [in ASU 2011-04], the Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio.

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 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

65

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 levels approved by the Company’s Board of Directors. The Committee also considers strategies to manage this exposure and incorporates these strategies into the investment and funding decisions of the Company.

The Company’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 May 31, 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 4.4%, 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 3.3% 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.

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 June 30, 2023. The Company’s one-year net interest rate gap was a negative $728.4 million or 9.55% of total assets at June 30, 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 affected by external factors such as a rise or decline in interest rates, loan or securities prepayments, and deposit withdrawals.

66

Condensed Static Gap - June 30, 2023						Repricing Interval
(In thousands)	Total		0-3 months			3-6 months			6-12 months			Cumulative 12 months
Interest-earning assets1	$	7,392,909	$	1,104,481		$	301,120		$	555,824		$	1,961,425
Interest-bearing liabilities	4,867,398		2,259,284			129,591			300,982			2,689,857
Net gap position			$	(1,154,803)		$	171,529		$	254,842		$	(728,432)
Net gap position as a percentage of total assets			(15.14)		%	2.25		%	3.34		%	(9.55)		%

 1 Balances of available securities are shown at amortized cost 

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 June 30, 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 June 30, 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 June 30, 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

There have been no material changes in the risk factors previously disclosed under Item 1A. of the Company's Quarterly Report on Form 10-Q for the period ended March 31, 2023 and the Company's Annual Report on Form 10-K, for the fiscal year ended December 31, 2022.

67

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)
April 1, 2023 through April 30, 2023	2,449	$	63.65	0	169,818
May 1, 2023 through May 31, 2023	3,191	55.18		0	169,818
June 1, 2023 through June 30, 2023	108,499	58.35		108,219	61,599
Total	114,139	$	58.38	108,219	61,599

Included in the table above are 2,035 shares purchased in April 2023, at an average cost of $63.67, and 992 shares purchased in May 2023, at an average cost of $52.83, 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 414 shares delivered to the Company in April 2023, 2,199 shares in May and 280 shares in June at an average cost of $63.54, $56.24 and $57.39, respectively to satisfy mandatory tax withholding requirements upon vesting of restricted stock under the Company's 2009 and 2019 Equity Plans.

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 2021 Repurchase 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 repurchased 338,401 shares as of June 30, 2023, at an average cost of $71.93.

Recent Sales of Unregistered Securities

None

Item 3. Defaults Upon Senior Securities

None 

Item 4. Mine Safety Disclosures

Not applicable

Item 5. Other Information

(a)

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

As previously announced and disclosed in the Company’s current report on Form 8-K filed with the Commission on May 3, 2023, Francis M. Fetsko will retire from his positions as Executive Vice President, Chief Financial Officer and Chief Operating Officer of the Company and Tompkins Community Bank, effective October 1, 2023. Mr. Fetsko will remain employed on an at-will, part-time basis as Director of Strategy Development through December 31, 2024, to assist in the transition of his responsibilities and perform such other duties as assigned by the Company’s Chief Executive Officer.

In connection with Mr. Fetsko’s planned retirement, the Company entered into a letter agreement (the “Letter Agreement”) with Mr. Fetsko regarding the terms of his transition employment. As of October 1, 2023, Mr. Fetsko will be eligible to receive his current base salary on a pro-rata basis and will be eligible to receive his annual cash bonus with a potential payout of 30% of his

68

current base salary if he remains employed as of the payment date. The Company will pay Mr. Fetsko a stipend to cover the he difference between the cost of any employee medical and dental premiums he would have paid had he remained a full-time employee and the cost of premiums he will pay under any replacement COBRA plan. He will be eligible for benefits as applicable to part-time employees.

The Company and Mr. Fetsko also agreed to amend the terms of Mr. Fetsko’s Tompkins Financial Corporation 2019 Equity Plan Performance Share Award Agreements, dated November 12, 2019, November 9, 2020, November 9, 2021, and November 9, 2022 (the “Retention Award Agreements”), to clarify that Mr. Fetsko’s employment as Director of Strategy Development will not satisfy the additional time-vesting requirements under the Retention Award Agreements, which will result in the forfeiture of the shares of restricted stock granted thereunder.

(c)

None

69

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.
10.1*	Amendment No. 1 to Tompkins Financial Corporation 2019 Equity Incentive Plan, incorporated herein by reference Appendix A of the Company's DEF 14A filed with the commission on March 30, 2023.
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 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.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.
*Indicates Management Contract
** 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 June 30, 2023 and December 31, 2022; (ii) Consolidated Statements of Income for the three and six months ended June 30, 2023 and 2022; (iii) Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2023 and 2022; (iv) Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022; (v) Consolidated Statements of Changes in Shareholders' Equity for the three and six months ended June 30, 2023 and 2022; and (vi Notes to Unaudited Consolidated Financial Statements.

70

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: August 09, 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)

71

EX-10.1

Exhibit 10.1

Apendix A

AMENDMENT No. 1

to

TOMPKINS FINANCIAL CORPORATION

2019 Equity Incentive Plan

WHEREAS, Tompkins Financial Corporation, a New York corporation (the “Company”) maintains the Tompkins Financial Corporation 2019 Equity Incentive Plan (the “Plan”);

WHEREAS, pursuant to Section 13.1(a) of the Plan, the Board of Directors of the Company (the “Board”) may from time to time amend the Plan, subject to shareholder approval in certain instances; and

WHEREAS, the Board has authorized an amendment to the Plan, effective April 27, 2023, subject to shareholder approval at the Company’s 2023 Annual Meeting of shareholders occurring on May 9, 2023 (the “2023 Annual Meeting”).

NOW, THEREFORE, the Plan is hereby amended, subject to shareholder approval at the 2023 Annual Meeting, as follows:

Section 4.1 of the Plan is amended to read in its entirety as follows:

4.1 Subject to adjustment in accordance with Section 11, no more than 2,275,000 shares of Common Stock shall be available for the grant of Awards under the Plan (the “Total Share Reserve”); provided, however, that the Total Share Reserve shall be reduced by 4.25 for each Restricted Award or Performance Share Award granted (the “Fungible Ratio”). No further awards shall be made pursuant to the Tompkins Financial Corporation 2009 Equity Incentive Plan, as amended in May 2016 (the “Amended 2009 Plan”), provided that any outstanding awards under the Amended 2009 Plan as of the Effective Date shall remain outstanding and exercisable according to their terms. Awards which are fully settled in cash shall not be counted against the Total Share Reserve, nor shall Substitute Awards under the circumstances described in Section 4.6. During the terms of the Awards, the Company shall keep available at all times the number of shares of Common Stock required to satisfy such Awards.

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:	August 09, 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:	August 09, 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 June 30, 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.

August 09, 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 June 30, 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.

August 09, 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	6 Months Ended
	Jun. 30, 2023	Jul. 24, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 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		14,363,234
Entity Central Index Key	0001005817
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2023

XML

CONSOLIDATED STATEMENTS OF CONDITION - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
ASSETS
Cash and noninterest bearing balances due from banks	$ 65,916	$ 18,572
Interest bearing balances due from banks	15,698	59,265
Cash and Cash Equivalents	81,614	77,837
Available-for-sale debt securities, at fair value (amortized cost of $1,688,051 at June 30, 2023 and $1,831,791 at December 31, 2022)	1,468,003	1,594,967
Held-to-maturity securities, at amortized cost (fair value of $262,444 at June 30, 2023 and $261,692 December 31, 2022)	312,369	312,344
Equity securities, at fair value (amortized cost $778 at June 30, 2023 and $777 at December 31, 2022)	778	777
Total loans and leases, net of unearned income and deferred costs and fees	5,352,365	5,268,911
Less: Allowance for credit losses	48,545	45,934
Net Loans and Leases	5,303,820	5,222,977
Federal Home Loan Bank and other stock	23,649	17,720
Bank premises and equipment, net	81,087	82,140
Corporate owned life insurance	86,709	85,556
Goodwill	92,602	92,602
Other intangible assets, net	2,513	2,708
Accrued interest and other assets	173,094	181,058
Total Assets	7,626,238	7,670,686
Interest bearing:
Checking, savings and money market	3,659,220	3,820,739
Time	770,594	631,411
Noninterest bearing	2,024,837	2,150,145
Total Deposits	6,454,651	6,602,295
Federal funds purchased and securities sold under agreements to repurchase	50,483	56,278
Other borrowings	387,100	291,300
Other liabilities	97,563	103,423
Total Liabilities	6,989,797	7,053,296
Tompkins Financial Corporation shareholders' equity:
Common Stock - par value $0.10 per share: Authorized 25,000,000 shares; Issued: 14,441,413 at June 30, 2023; and 14,555,741 at December 31, 2022	1,444	1,456
Additional paid-in capital	298,133	302,763
Retained earnings	537,095	526,727
Accumulated other comprehensive loss	(195,520)	(208,689)
Treasury stock, at cost – 124,265 shares at June 30, 2023, and 128,749 shares at December 31, 2022	(6,185)	(6,279)
Total Tompkins Financial Corporation Shareholders’ Equity	634,967	615,978
Noncontrolling interests	1,474	1,412
Total Equity	636,441	617,390
Total Liabilities and Equity	$ 7,626,238	$ 7,670,686

XML

CONSOLIDATED STATEMENTS OF CONDITION (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Available-for-sale securities, at amortized cost	$ 1,688,051	$ 1,831,791
Securities - held-to-maturity	262,444	261,692
Equity securities, at amortized cost	$ 778	$ 777
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)	14,441,413	14,555,741
Treasury stock, shares (in shares)	124,265	128,749

XML

CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
INTEREST AND DIVIDEND INCOME
Loans	$ 63,527	$ 52,505	$ 124,369	$ 103,636
Due from banks	183	64	322	105
Available-for-sale debt securities	6,618	7,063	13,361	13,833
Held-to-maturity securities	1,219	1,201	2,433	2,330
Federal Home Loan Bank and other stock	323	120	623	225
Interest income	71,870	60,953	141,108	120,129
INTEREST EXPENSE
Time certificates of deposits of $250,000 or more	2,526	400	4,313	826
Other deposits	13,119	1,647	23,513	3,267
Federal funds purchased and securities sold under agreements to repurchase	15	15	29	31
Other borrowings	4,314	629	7,111	1,129
Total Interest Expense	19,974	2,691	34,966	5,253
Net Interest Income	51,896	58,262	106,142	114,876
Less: Provision for credit loss expense	2,253	856	1,428	336
Net Interest Income After Credit for Credit Loss Expense	49,643	57,406	104,714	114,540
NONINTEREST INCOME
Insurance commissions and fees	8,672	8,429	18,181	17,746
Wealth management fees	4,678	4,596	9,187	9,513
Service charges on deposit accounts	1,640	1,756	3,386	3,535
Card services income	3,087	2,959	5,769	5,502
Other income	1,603	1,241	3,544	2,717
Net loss on securities transactions	(7,065)	(37)	(7,052)	(84)
Total Noninterest Income	12,615	18,944	33,015	38,929
NONINTEREST EXPENSE
Salaries and wages	25,337	24,396	49,849	47,668
Other employee benefits	6,647	6,341	13,388	12,138
Net occupancy expense of premises	3,327	3,131	6,626	6,672
Furniture and fixture expense	2,105	2,004	4,159	3,995
Amortization of intangible assets	84	219	167	437
Other operating expense	14,468	13,029	27,937	25,049
Total Noninterest Expenses	51,968	49,120	102,126	95,959
Income Before Income Tax Expense	10,290	27,230	35,603	57,510
Income Tax Expense	1,784	6,329	7,685	13,305
Net Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation	8,506	20,901	27,918	44,205
Less: Net Income Attributable to Noncontrolling Interests	31	32	62	63
Net Income Attributable to Tompkins Financial Corporation	$ 8,475	$ 20,869	$ 27,856	$ 44,142
Basic Earnings Per Share (in dollars per share)	$ 0.59	$ 1.45	$ 1.94	$ 3.06
Diluted Earnings Per Share (in dollars per share)	$ 0.59	$ 1.45	$ 1.94	$ 3.05

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Statement of Comprehensive Income [Abstract]
Net income attributable to noncontrolling interests and Tompkins Financial Corporation	$ 8,506	$ 20,901	$ 27,918	$ 44,205
Available-for-sale debt securities:
Change in net unrealized loss during the period	(13,237)	(43,449)	7,341	(123,854)
Reclassification adjustment for net realized loss on sale of available-for-sale debt securities included in net income	5,325	0	5,325	0
Employee benefit plans:
Amortization of net retirement plan actuarial loss	197	389	421	853
Amortization of net retirement plan prior service cost	41	40	82	82
Other comprehensive loss	(7,674)	(43,020)	13,169	(122,919)
Subtotal comprehensive income (loss) attributable to noncontrolling interests and Tompkins Financial Corporation	832	(22,119)	41,087	(78,714)
Less: Net income attributable to noncontrolling interests	(31)	(32)	(62)	(63)
Total comprehensive income (loss) attributable to Tompkins Financial Corporation	$ 801	$ (22,151)	$ 41,025	$ (78,777)

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
OPERATING ACTIVITIES
Net income attributable to Tompkins Financial Corporation	$ 27,856	$ 44,142
Provision for credit loss expense	1,428	336
Depreciation and amortization of premises, equipment, and software	5,418	5,245
Amortization of intangible assets	167	437
Earnings from corporate owned life insurance	(1,169)	(593)
Net amortization on securities	1,856	3,280
Amortization/accretion related to purchase accounting	(369)	(511)
Net loss on securities transactions	7,052	84
Net gain on sale of loans originated for sale	(65)	(57)
Proceeds from sale of loans originated for sale	2,174	362
Loans originated for sale	(2,495)	(1,127)
Net gain on sale of bank premises and equipment	(54)	(41)
Net excess tax benefit from stock based compensation	13	29
Stock-based compensation expense	2,155	1,973
Decrease in accrued interest receivable	718	176
Increase (decrease) in accrued interest payable	742	(86)
Other, net	(678)	(2,132)
Net Cash Provided by Operating Activities	44,749	51,517
INVESTING ACTIVITIES
Proceeds from maturities, calls and principal paydowns of available-for-sale debt securities	79,018	134,653
Proceeds from sales of available-for-sale debt securities	73,832	0
Purchases of available-for-sale debt securities	(18,044)	(149,148)
Purchases of held-to-maturity securities	0	(28,320)
Net increase in loans	(84,989)	(85,037)
Proceeds from sale/redemptions of Federal Home Loan Bank stock	54,747	25,148
Purchases of Federal Home Loan Bank and other stock	(60,676)	(32,065)
Proceeds from sale of bank premises and equipment	98	123
Purchases of bank premises, equipment and software	(3,344)	(4,774)
Redemption of corporate owned life insurance	20	0
Other, net	(138)	(142)
Net Cash Provided by (Used in) Investing Activities	40,524	(139,562)
FINANCING ACTIVITIES
Net (decrease) increase in demand, money market, and savings deposits	(286,827)	22,907
Net increase (decrease) in time deposits	139,452	(44,583)
Net decrease in Federal funds purchased and securities sold under agreements to repurchase	(5,795)	(16,712)
Increase in other borrowings	145,100	235,600
Repayment of other borrowings	(49,300)	(64,000)
Cash dividends	(17,423)	(16,634)
Common stock issued	0	0
Repurchase of common stock	(6,378)	(14,128)
Shares issued for employee stock ownership plan	0	2,951
Net shares issued related to restricted stock awards	(207)	(29)
Net proceeds from exercise of stock options	(118)	(42)
Net Cash (Used in) Provided by Financing Activities	(81,496)	105,330
Net Increase in Cash and Cash Equivalents	3,777	17,285
Cash and cash equivalents at beginning of period	77,837	63,107
Total Cash and Cash Equivalents at End of Period	81,614	80,392
Supplemental Information:
Cash paid during the year for - Interest	34,493	5,578
Cash paid during the year for - Taxes	7,999	10,871
Transfer of loans to other real estate owned	0	82
Right-of-use assets obtained in exchange for new lease liabilities	$ 422	$ 568

XML

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Cumulative Effect, Period of Adoption, Adjustment	Common Stock	Additional Paid-in Capital	Retained Earnings	Retained Earnings Cumulative Effect, Period of Adoption, Adjustment	Accumulated Other Comprehensive (Loss) Income	Treasury Stock	Non- controlling Interests
Beginning balances 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]
Shares issued for employee stock ownership plan	2,951		4	2,947
Ending balances at Mar. 31, 2022	657,492		1,460	305,880	490,200		(135,849)	(5,642)	1,443
Beginning balances 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	44,205				44,142				63
Other comprehensive loss	(122,919)						(122,919)
Subtotal comprehensive income (loss) attributable to noncontrolling interests and Tompkins Financial Corporation	(78,714)
Cash dividends	(16,634)				(16,634)
Net exercise of stock options	(42)			(42)
Common stock repurchased and returned to unissued status	(14,128)		(18)	(14,110)
Stock-based compensation expense	1,973			1,973
Directors deferred compensation plan	0			56				(56)
Restricted stock activity	(29)		(2)	(27)
Ending balances at Jun. 30, 2022	624,318		1,454	303,335	502,770		(178,869)	(5,847)	1,475
Beginning balances at Mar. 31, 2022	657,492		1,460	305,880	490,200		(135,849)	(5,642)	1,443
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income attributable to noncontrolling interests and Tompkins Financial Corporation	20,901				20,869				32
Other comprehensive loss	(43,020)						(43,020)
Subtotal comprehensive income (loss) attributable to noncontrolling interests and Tompkins Financial Corporation	(22,119)
Cash dividends	(8,299)				(8,299)
Common stock repurchased and returned to unissued status	(3,758)		(5)	(3,753)
Stock-based compensation expense	1,028			1,028
Directors deferred compensation plan	0			205				(205)
Restricted stock activity	(26)		(1)	(25)
Ending balances at Jun. 30, 2022	624,318		1,454	303,335	502,770		(178,869)	(5,847)	1,475
Beginning balances 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	27,918				27,856				62
Other comprehensive loss	13,169						13,169
Subtotal comprehensive income (loss) attributable to noncontrolling interests and Tompkins Financial Corporation	41,087
Cash dividends	(17,423)				(17,423)
Net exercise of stock options	(118)			(118)
Common stock repurchased and returned to unissued status	(6,378)		(11)	(6,367)
Stock-based compensation expense	2,155			2,155
Directors deferred compensation plan	0			(94)				94
Restricted stock activity	(207)		(1)	(206)
Ending balances at Jun. 30, 2023	636,441		1,444	298,133	537,095		(195,520)	(6,185)	1,474
Beginning balances at Mar. 31, 2023	649,765		1,456	303,357	537,331		(187,846)	(5,976)	1,443
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income attributable to noncontrolling interests and Tompkins Financial Corporation	8,506				8,475				31
Other comprehensive loss	(7,674)						(7,674)
Subtotal comprehensive income (loss) attributable to noncontrolling interests and Tompkins Financial Corporation	832
Cash dividends	(8,711)				(8,711)
Net exercise of stock options	(10)			(10)
Common stock repurchased and returned to unissued status	(6,378)		(11)	(6,367)
Stock-based compensation expense	1,110			1,110
Directors deferred compensation plan	0			209				(209)
Restricted stock activity	(167)		(1)	(166)
Ending balances at Jun. 30, 2023	$ 636,441		$ 1,444	$ 298,133	$ 537,095		$ (195,520)	$ (6,185)	$ 1,474

XML

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Statement of Stockholders' Equity [Abstract]
Cash dividends (in dollars per share)	$ 0.60	$ 0.57	$ 1.21	$ 1.14
Net exercise of stock options (in shares)	315		1,824	630
Common stock repurchased and returned to unissued status (in shares)	108,219	49,629	108,219	179,797
Shares issued for employee stock ownership plan (in shares)				37,454
Directors deferred compensation plan (in shares)	3,386	2,688	4,484	1,679
Restricted stock activity (in shares)	6,341	7,217	7,933	14,684

XML

Business

6 Months Ended

Jun. 30, 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 June 30, 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

6 Months Ended

Jun. 30, 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

6 Months Ended

Jun. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Securities

Securities

Available-for-Sale Debt Securities

The following tables summarize available-for-sale debt securities held by the Company at June 30, 2023 and December 31, 2022:

	Available-for-Sale Debt Securities
June 30, 2023	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(In thousands)
U.S. Treasuries	$	190,275	$	0	$	22,181	$	168,094
Obligations of U.S. Government sponsored entities	592,694		0		69,151		523,543
Obligations of U.S. states and political subdivisions	90,330		1		8,284		82,047
Mortgage-backed securities – residential, issued by
U.S. Government agencies	54,852		9		5,919		48,942
U.S. Government sponsored entities	757,400		0		114,265		643,135
U.S. corporate debt securities	2,500		0		258		2,242
Total available-for-sale debt securities	$	1,688,051	$	10	$	220,058	$	1,468,003

	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 tables summarize held-to-maturity debt securities held by the Company at June 30, 2023 and December 31, 2022:

	Held-to-Maturity Securities
June 30, 2023	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(In thousands)
U.S. Treasuries	$	86,370	$	0	$	12,598	$	73,772
Obligations of U.S. Government sponsored entities	225,999		0		37,327		188,672
Total held-to-maturity debt securities	$	312,369	$	0	$	49,925	$	262,444

	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. Realized gains on sales of available-for-sale debt securities were $0 for both the three and six months ended June 30, 2023 and June 30, 2022. During the second quarter of 2023, the Company sold $80.9 million of available-for-sale debt securities at a loss of $7.1 million. Sales of available-for-sale investment securities were the result of general investment portfolio and interest rate risk management. Realized losses for the three and six months ended June 30, 2023 were $7.1 million, and $0 for the three and six months ended June 30, 2022, respectively. Proceeds from the sale of available-for-sale debt securities were $73.8 million for the three and six months ended June 30, 2023, and $0 for the three and six months ended June 30, 2022. The Company's investment portfolio includes callable securities that may be called prior to maturity. There were no realized gains or losses on called available-for-sale debt securities for both the three and six months ended June 30, 2023 and June 30, 2022. The Company also recognized net losses of $12,000 for the three months ended June 30, 2023 and net gains of $1,000 for the six months ended June 30, 2023, compared to net losses of $36,700 and $83,700 for the three and six months ended June 30, 2022, respectively, on equity securities, reflecting the change in fair value.

The following table summarizes available-for-sale debt securities that had unrealized losses at June 30, 2023, and December 31, 2022:

June 30, 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	$	168,094	$	22,181	$	168,094	$	22,181
Obligations of U.S. Government sponsored entities	28,596		758		494,947		68,393		523,543		69,151
Obligations of U.S. states and political subdivisions	26,104		756		55,842		7,528		81,946		8,284
Mortgage-backed securities – residential, issued by
U.S. Government agencies	6,244		254		42,351		5,665		48,595		5,919
U.S. Government sponsored entities	13,055		727		630,081		113,538		643,136		114,265
U.S. corporate debt securities	0		0		2,242		258		2,242		258
Total available-for-sale debt securities	$	73,999	$	2,495	$	1,393,557	$	217,563	$	1,467,556	$	220,058

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 June 30, 2023 and December 31, 2022:

June 30, 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	$	73,772	$	12,598	$	73,772	$	12,598
Obligations of U.S. Government sponsored entities	8,176		751		180,496		36,576		188,672		37,327
Total held-to-maturity debt securities	$	8,176	$	751	$	254,268	$	49,174	$	262,444	$	49,925

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.

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 June 30, 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 Federal Home Loan Bank ("FHLB") 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 "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 June 30, 2023 or December 31, 2022.

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.

June 30, 2023
(In thousands)	Amortized Cost		Fair Value
Available-for-sale debt securities:
Due in one year or less	$	47,677	$	46,893
Due after one year through five years	514,770		461,320
Due after five years through ten years	269,157		230,292
Due after ten years	44,195		37,421
Total	875,799		775,926
Mortgage-backed securities	812,252		692,077
Total available-for-sale debt securities	$	1,688,051	$	1,468,003

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

June 30, 2023
(In thousands)	Amortized Cost		Fair Value
Held-to-maturity debt securities:
Due after five years through ten years	$	312,369	$	262,444
Total held-to-maturity debt securities	$	312,369	$	262,444

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 of 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 FHLB stock is tied to the Company’s borrowing levels with the FHLB. Holdings of FHLBNY stock and ACBB stock totaled $23.6 million and $95,000, respectively, at June 30, 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 June 30, 2023, we determined that no impairment write-downs were required.

XML

Loans and Leases

6 Months Ended

Jun. 30, 2023

Receivables [Abstract]

Loans and Leases

Loans and Leases

Loans and leases at June 30, 2023 and December 31, 2022 were as follows:

(In thousands)	06/30/2023		12/31/2022
Commercial and industrial
Agriculture	$	64,815	$	85,073
Commercial and industrial other	701,006		705,700
PPP loans*	613		756
Subtotal commercial and industrial	766,434		791,529
Commercial real estate
Construction	249,847		201,116
Agriculture	215,915		214,963
Commercial real estate other	2,487,067		2,437,339
Subtotal commercial real estate	2,952,829		2,853,418
Residential real estate
Home equity	185,529		188,623
Mortgages	1,348,448		1,346,318
Subtotal residential real estate	1,533,977		1,534,941
Consumer and other
Indirect	1,419		2,224
Consumer and other	85,794		75,412
Subtotal consumer and other	87,213		77,636
Leases	16,972		16,134
Total loans and leases	5,357,425		5,273,658
Less: unearned income and deferred costs and fees	(5,060)		(4,747)
Total loans and leases, net of unearned income and deferred costs and fees	$	5,352,365	$	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. As such, these policies are reflective of new originations as well as those balances held at December 31, 2022. 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 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 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 June 30, 2023 and December 31, 2022:

June 30, 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	$	0	$	53	$	0	$	53	$	64,762	$	64,815
Commercial and industrial other	60		2,266		2,704		5,030		695,976		701,006
PPP loans*	0		0		0		0		613		613
Subtotal commercial and industrial	60		2,319		2,704		5,083		761,351		766,434
Commercial real estate
Construction	0		65		0		65		249,782		249,847
Agriculture	165		0		0		165		215,750		215,915
Commercial real estate other	0		15,408		9,405		24,813		2,462,254		2,487,067
Subtotal commercial real estate	165		15,473		9,405		25,043		2,927,786		2,952,829
Residential real estate
Home equity	333		588		1,110		2,031		183,498		185,529
Mortgages	0		1,000		8,141		9,141		1,339,307		1,348,448
Subtotal residential real estate	333		1,588		9,251		11,172		1,522,805		1,533,977
Consumer and other
Indirect	13		25		44		82		1,337		1,419
Consumer and other	160		119		138		417		85,377		85,794
Subtotal consumer and other	173		144		182		499		86,714		87,213
Leases	0		0		0		0		16,972		16,972
Total loans and leases	731		19,524		21,542		41,797		5,315,628		5,357,425
Less: unearned income and deferred costs and fees	0		0		0		0		(5,060)		(5,060)
Total loans and leases, net of unearned income and deferred costs and fees	$	731	$	19,524	$	21,542	$	41,797	$	5,310,568	$	5,352,365
*SBA Paycheck Protection Program

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

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 June 30, 2023 and December 31, 2022:

June 30, 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
Commercial and industrial other	$	2,494	$	3,146	$	0
Subtotal commercial and industrial	2,494		3,146		0
Commercial real estate
Agriculture	0		179		0
Commercial real estate other	6,659		11,476		0
Subtotal commercial real estate	6,659		11,655		0
Residential real estate
Home equity	0		2,891		0
Mortgages	181		13,318		7
Subtotal residential real estate	181		16,209		7
Consumer and other
Indirect	0		87		0
Consumer and other	0		236		27
Subtotal consumer and other	0		323		27
Total loans and leases	$	9,334	$	31,333	$	34

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 and six months ended June 30, 2023 and 2022.

XML

Allowance for Credit Losses

6 Months Ended

Jun. 30, 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 June 30, 2023, considers the allowance to be appropriate, under certain 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 expense in the Company's consolidated statements of income.

The following table details activity in the allowance for credit losses on loans for the three and six months ended June 30, 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 June 30, 2023
(In thousands)	Commercial & Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Finance Leases		Total
Allowance for credit losses:
Beginning balance	$	6,316	$	27,186	$	10,858	$	1,628	$	111	$	46,099
Charge-offs	0		0		0		(169)		0		(169)
Recoveries	13		(9)		114		78		0		196
Provision (credit) for credit loss expense	356		1,791		139		143		(10)		2,419
Ending Balance	$	6,685	$	28,968	$	11,111	$	1,680	$	101	$	48,545

Three Months Ended June 30, 2022
(In thousands)	Commercial & Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Finance Leases		Total
Allowance for credit losses:
Beginning balance	$	7,027	$	22,982	$	10,447	$	1,588	$	82	$	42,126
Charge-offs	0		(23)		(51)		(82)		0		(156)
Recoveries	6		764		197		76		0		1,043
Provision (credit) for credit loss expense	781		(496)		489		9		(3)		780
Ending Balance	$	7,814	$	23,227	$	11,082	$	1,591	$	79	$	43,793

Six Months Ended June 30, 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 2016-13	2		16		46		0		0		64
Charge-offs	0		0		(2)		(275)		0		(277)
Recoveries	59		1,237		178		111		0		1,585
Provision (credit) for credit loss expense	585		428		(265)		486		5		1,239
Ending Balance	$	6,685	$	28,968	$	11,111	$	1,680	$	101	$	48,545

Six Months Ended June 30, 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)		(50)		(51)		(278)		0		(402)
Recoveries	26		805		307		168		0		1,306
Provision (credit) for credit loss expense	1,476		(2,341)		687		209		15		46
Ending Balance	$	7,814	$	23,227	$	11,082	$	1,591	$	79	$	43,793

The following table details activity in the liabilities for off-balance sheet credit exposures for the three and six months ended June 30, 2023 and 2022:

Three Months Ended June 30,
(In thousands)	2023		2022
Liabilities for off-balance sheet credit exposures at beginning of period	$	3,151	$	2,720
(Credit) provision for credit loss expense related to off-balance sheet credit exposures	(166)		76
Liabilities for off-balance sheet credit exposures at end of period	$	2,985	$	2,796

Six Months Ended June 30,
(In thousands)	2023		2022
Liabilities for off-balance sheet credit exposures at beginning of period	$	2,796	$	2,506
Provision for credit loss expense related to off-balance sheet credit exposures	189		290
Liabilities for off-balance sheet credit exposures at end of period	$	2,985	$	2,796

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

(In thousands)	Real Estate		Business Assets		Other		Total		ACL Allocation
June 30, 2023
Commercial and Industrial	$	2,494	$	0	$	0	$	2,494	$	0
Commercial Real Estate	10,146		0		0		10,146		1,082
Residential Real Estate	181		0		0		181		0
Total	$	12,821	$	0	$	0	$	12,821	$	1,082

(In thousands)	Real Estate		Business Assets		Other		Total		ACL Allocation
December 31, 2022
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 three and six months ended June 30, 2023, and no new TDRs reported in the three and six months ended June 30, 2022.

The following table presents credit quality indicators by total loans on an amortized cost basis by origination year as of June 30, 2023 and December 31, 2022:

June 30, 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	$	54,166	$	110,845	$	75,993	$	33,954	$	39,929	$	169,064	$	203,109	$	2,954	$	690,014
Special Mention	0		0		112		297		113		1,488		771		0		2,781
Substandard	0		0		94		420		26		1,175		6,496		0		8,211
Total Commercial and Industrial - Other	$	54,166	$	110,845	$	76,199	$	34,671	$	40,068	$	171,727	$	210,376	$	2,954	$	701,006
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Commercial and Industrial - PPP:
Pass	$	0	$	0	$	350	$	263	$	0	$	0	$	0	$	0	$	613
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	$	350	$	263	$	0	$	0	$	0	$	0	$	613
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Commercial and Industrial - Agriculture:
Pass	$	5,774	$	13,555	$	3,754	$	3,903	$	3,559	$	10,452	$	23,314	$	344	$	64,655
Special Mention	0		0		53		0		0		0		30		0		83
Substandard	0		0		0		63		0		11		3		0		77
Total Commercial and Industrial - Agriculture	$	5,774	$	13,555	$	3,807	$	3,966	$	3,559	$	10,463	$	23,347	$	344	$	64,815
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Commercial Real Estate
Pass	$	89,762	$	323,682	$	363,357	$	315,106	$	275,367	$	978,544	$	30,045	$	5,937	$	2,381,800
Special Mention	0		640		2,028		1,672		11,142		35,097		1,384		0		51,963
Substandard	0		15,369		108		0		2,915		34,796		116		0		53,304
Total Commercial Real Estate	$	89,762	$	339,691	$	365,493	316,778		289,424		1,048,437		$	31,545	$	5,937	$	2,487,067
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Commercial Real Estate - Agriculture:
Pass	$	7,532	$	34,610	$	23,534	$	22,303	$	24,520	$	98,149	$	1,165	$	2,396	$	214,209
Special Mention	0		0		0		0		390		1,088		0		0		1,478
Substandard	0		0		0		0		179		49		0		0		228
Total Commercial Real Estate - Agriculture	$	7,532	$	34,610	$	23,534	$	22,303	$	25,089	$	99,286	$	1,165	$	2,396	$	215,915
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	$	40,996	$	78,869	$	16,481	$	9,976	$	11,449	$	84,040	$	8,036	$	249,847
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	$	40,996	$	78,869	$	16,481	$	9,976	$	11,449	$	84,040	$	8,036	$	249,847
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Residential - Home Equity
Performing	$	1,244	$	2,363	$	969	$	583	$	910	$	9,697	$	164,163	$	2,709	$	182,638
Nonperforming	0		0		0		0		0		451		2,440		0		2,891
Total Residential - Home Equity	$	1,244	$	2,363	$	969	$	583	$	910	$	10,148	$	166,603	$	2,709	$	185,529
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	0	$	2	$	0	$	0	$	2
Residential - Mortgages
Performing	$	50,668	$	191,160	$	265,103	$	231,672	$	113,613	$	482,913	$	0	$	0	$	1,335,129
Nonperforming	0		395		330		868		908		10,818		0		0		13,319
Total Residential - Mortgages	$	50,668	$	191,555	$	265,433	$	232,540	$	114,521	$	493,731	$	0	$	0	$	1,348,448
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Consumer - Direct
Performing	$	31,859	$	15,186	$	12,737	$	6,302	$	5,360	$	11,263	$	2,851	$	0	$	85,558
Nonperforming	0		5		1		3		92		132		3		0		236
Total Consumer - Direct	$	31,859	$	15,191	$	12,738	$	6,305	$	5,452	$	11,395	$	2,854	$	0	$	85,794
Current-period gross writeoffs	$	155	$	8	$	0	$	14	$	36	$	13	$	0	$	0	$	226
Consumer - Indirect
Performing	$	0	$	0	$	123	$	113	$	676	$	420	$	0	$	0	$	1,332
Nonperforming	0		0		0		0		71		16		0		0		87
Total Consumer - Indirect	$	0	$	0	$	123	$	113	$	747	$	436	$	0	$	0	$	1,419
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	39	$	10	$	0	$	0	$	49

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 table presents 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

6 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

Earnings per share in the table below, for the three and six month periods ended June 30, 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)	6/30/2023		6/30/2022
Basic
Net income available to common shareholders	$	8,475	$	20,869
Less: income attributable to unvested stock-based compensation awards	(8)		(67)
Net earnings allocated to common shareholders	8,467		20,802
Weighted average shares outstanding, including unvested stock-based compensation awards	14,502,161		14,524,975
Less: average unvested stock-based compensation awards	(188,028)		(207,560)
Weighted average shares outstanding - Basic	14,314,133		14,317,415
Diluted
Net earnings allocated to common shareholders	8,467		20,802
Weighted average shares outstanding - Basic	14,314,133		14,317,415
Plus: incremental shares from assumed conversion of stock-based compensation awards	32,654		70,186
Weighted average shares outstanding - Diluted	14,346,787		14,387,601
Basic EPS	$	0.59	$	1.45
Diluted EPS	$	0.59	$	1.45

Stock-based compensation awards representing 60,891 and 1,848 of common shares during the three months ended June 30, 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.

	Six Months Ended
(In thousands, except share and per share data)	6/30/2023		6/30/2022
Basic
Net income available to common shareholders	$	27,856	$	44,142
Less: income attributable to unvested stock-based compensation awards	(26)		(143)
Net earnings allocated to common shareholders	27,830		43,999
Weighted average shares outstanding, including unvested stock-based compensation awards	14,511,078		14,568,102
Less: unvested stock-based compensation awards	(190,763)		(209,633)
Weighted average shares outstanding - Basic	14,320,315		14,358,469
Diluted
Net earnings allocated to common shareholders	27,830		43,999
Weighted average shares outstanding - Basic	14,320,315		14,358,469
Plus: incremental shares from assumed conversion of stock-based compensation awards	47,866		74,183
Weighted average shares outstanding - Diluted	14,368,181		14,432,652
Basic EPS	$	1.94	$	3.06
Diluted EPS	$	1.94	$	3.05

Stock-based compensation awards representing approximately 32,036 and 6,113 of common shares during the six months ended June 30, 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)

6 Months Ended

Jun. 30, 2023

Stockholders' Equity Note [Abstract]

Other Comprehensive Income (Loss)

Other Comprehensive Income (Loss)

The following tables present reclassifications out of accumulated other comprehensive income (loss) for the three and six month periods ended June 30, 2023 and 2022:

	Three Months Ended June 30, 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	$	(17,531)	$	4,294	$	(13,237)
Reclassification adjustment for net realized loss on sale of available-for-sale debt securities included in net income	7,052		(1,727)		5,325
Net unrealized gains/losses	(10,479)		2,567		(7,912)
Employee benefit plans:
Amortization of net retirement plan actuarial gain	261		(64)		197
Amortization of net retirement plan prior service cost	54		(13)		41
Employee benefit plans	315		(77)		238
Other comprehensive (loss) income	$	(10,164)	$	2,490	$	(7,674)

	Three Months Ended June 30, 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	$	(57,544)	$	14,095	$	(43,449)
Reclassification adjustment for net realized loss on sale of available-for-sale debt securities included in net income	0		0		0
Net unrealized gains/losses	(57,544)		14,095		(43,449)
Employee benefit plans:
Amortization of net retirement plan actuarial gain	514		(125)		389
Amortization of net retirement plan prior service cost	53		(13)		40
Employee benefit plans	567		(138)		429
Other comprehensive (loss) income	$	(56,977)	$	13,957	$	(43,020)

	Six Months Ended June 30, 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	$	9,724	$	(2,383)	$	7,341
Reclassification adjustment for net realized loss on sale of available-for-sale debt securities included in net income	7,052		(1,727)		5,325
Net unrealized gains/losses	16,776		(4,110)		12,666
Employee benefit plans:
Amortization of net retirement plan actuarial loss	558		(137)		421
Amortization of net retirement plan prior service cost	109		(27)		82
Employee benefit plans	667		(164)		503
Other comprehensive (loss) income	$	17,443	$	(4,274)	$	13,169

	Six Months Ended June 30, 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	$	(164,025)	$	40,171	$	(123,854)
Reclassification adjustment for net realized gain on sale of available-for-sale debt securities included in net income	0		0		0
Net unrealized gains/losses	(164,025)		40,171		(123,854)
Employee benefit plans:
Amortization of net retirement plan actuarial loss	1,129		(276)		853
Amortization of net retirement plan prior service cost	109		(27)		82
Employee benefit plans	1,238		(303)		935
Other comprehensive (loss) income	$	(162,787)	$	39,868	$	(122,919)

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

(In thousands)	Available-for- Sale Debt Securities		Employee Benefit Plans		Accumulated Other Comprehensive (Loss) Income
Balance at March 31, 2023	$	(158,225)	$	(29,621)	$	(187,846)
Other comprehensive income before reclassifications	(13,237)		0		(13,237)
Amounts reclassified from accumulated other comprehensive (loss) income	5,325		238		5,563
Net current-period other comprehensive income (loss)	(7,912)		238		(7,674)
Balance at June 30, 2023	$	(166,137)	$	(29,383)	$	(195,520)
Balance at January 1, 2023	$	(178,803)	$	(29,886)	$	(208,689)
Other comprehensive income (loss) before reclassifications	7,341		0		7,341
Amounts reclassified from accumulated other comprehensive (loss) income	5,325		503		5,828
Net current-period other comprehensive (loss) income	12,666		503		13,169
Balance at June 30, 2023	$	(166,137)	$	(29,383)	$	(195,520)

(In thousands)	Available-for- Sale Debit Securities		Employee Benefit Plans		Accumulated Other Comprehensive (Loss) Income
Balance at March 31, 2022	$	(94,965)	$	(40,884)	$	(135,849)
Other comprehensive (loss) income before reclassifications	(43,449)		0		(43,449)
Amounts reclassified from accumulated other comprehensive (loss) income	0		429		429
Net current-period other comprehensive income (loss)	(43,449)		429		(43,020)
Balance at June 30, 2022	$	(138,414)	$	(40,455)	$	(178,869)
Balance at January 1, 2022	$	(14,560)	$	(41,390)	$	(55,950)
Other comprehensive (loss) income before reclassifications	(123,854)		0		(123,854)
Amounts reclassified from accumulated other comprehensive (loss) income	0		935		935
Net current-period other comprehensive (loss) income	(123,854)		935		(122,919)
Balance at June 30, 2022	$	(138,414)	$	(40,455)	$	(178,869)

The following tables present the amounts reclassified out of each component of accumulated other comprehensive (loss) income for the three and six months ended June 30, 2023 and 2022:

Three Months Ended June 30, 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	$	(7,052)	Net (loss) gain on securities transactions
	1,727		Tax expense
	(5,325)		Net of tax
Employee benefit plans:
Amortization of the following 2
Net retirement plan actuarial loss	(261)		Other operating expense
Net retirement plan prior service cost	(54)		Other operating expense
	(315)		Total before tax
	77		Tax benefit
	$	(238)	Net of tax

Three Months Ended June 30, 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 following2
Net retirement plan actuarial loss	(514)		Other operating expense
Net retirement plan prior service cost	(53)		Other operating expense
	(567)		Total before tax
	138		Tax benefit
	$	(429)	Net of tax

Six Months Ended June 30, 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	$	(7,052)	Net (loss) gain on securities transactions
	1,727		Tax expense
	(5,325)		Net of tax
Employee benefit plans:
Amortization of the following2
Net retirement plan actuarial loss	(558)		Other operating expense
Net retirement plan prior service cost	(109)		Other operating expense
	(667)		Total before tax
	164		Tax benefit
	$	(503)	Net of tax

Six Months Ended June 30, 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 following2
Net retirement plan actuarial loss	(1,129)		Other operating expense
Net retirement plan prior service cost	(109)		Other operating expense
	(1,238)		Total before tax
	303		Tax benefit
	$	(935)	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 Plans

6 Months Ended

Jun. 30, 2023

Retirement Benefits [Abstract]

Employee Benefit Plans

Employee Benefit Plans

The following tables set 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 the unrecognized transitional obligation or transition asset, and the amounts of recognized gains and losses, prior service cost recognized, and gain or loss recognized due to settlement or curtailment.

Components of Net Periodic Benefit Cost

	Pension Benefits				Life and Health				SERP Benefits
	Three Months Ended				Three Months Ended				Three Months Ended
(In thousands)	6/30/2023		6/30/2022		6/30/2023		6/30/2022		6/30/2023		6/30/2022
Service cost	$	0	$	0	$	1	$	43	$	7	$	(13)
Interest cost	814		529		88		59		275		206
Expected return on plan assets	(1,195)		(1,474)		0		0		0		0
Amortization of net retirement plan actuarial loss	274		285		(13)		46		0		183
Amortization of net retirement plan prior service (credit) cost	0		0		(15)		(15)		69		68
Net periodic benefit (income) cost	$	(107)	$	(660)	$	61	$	133	$	351	$	444

	Pension Benefits				Life and Health				SERP Benefits
	Six Months Ended				Six Months Ended				Six Months Ended
(In thousands)	6/30/2023		6/30/2022		6/30/2023		6/30/2022		6/30/2023		6/30/2022
Service cost	$	0	$	0	$	16	$	87	$	21	$	39
Interest cost	1,637		992		177		111		574		407
Expected return on plan assets	(2,394)		(2,942)		0		0		0		0
Amortization of net retirement plan actuarial loss	578		608		(20)		98		0		423
Amortization of net retirement plan prior service cost (credit)	0		0		(30)		(30)		139		139
Net periodic benefit (income) cost	$	(179)	$	(1,342)	$	143	$	266	$	734	$	1,008

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 $0.5 million and $0.9 million, net of tax, as amortization of amounts previously recognized in accumulated other comprehensive (loss) income, for the six months ended June 30, 2023 and 2022, respectively.

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

XML

Other Income and Operating Expense

6 Months Ended

Jun. 30, 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 of the periods presented below are stated separately.

	Three Months Ended				Six Months Ended
(In thousands)	6/30/2023		6/30/2022		6/30/2023		6/30/2022
Noninterest Income
Other service charges	$	649	$	669	$	1,264	$	1,296
Earnings from corporate owned life insurance	554		171		1,169		593
Net gains on the sale of loans originated for sale	27		53		65		57
Other income	373		348		1,046		771
Total other income	$	1,603	$	1,241	$	3,544	$	2,717
Noninterest Expenses
Marketing expense	$	1,688	$	1,456	$	2,792	$	2,513
Professional fees	2,124		1,719		3,928		3,325
Legal fees	635		498		1,054		708
Technology expense	3,656		3,690		7,663		7,373
FDIC insurance	779		677		1,833		1,378
Cardholder expense	1,116		1,280		2,133		2,422
Other expenses	4,470		3,709		8,534		7,330
Total other operating expense	$	14,468	$	13,029	$	27,937	$	25,049

XML

Revenue Recognition

6 Months Ended

Jun. 30, 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 fiscal year ended December 31, 2022, the Company adopted 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, and 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 the 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 tables present noninterest income, segregated by revenue streams in-scope and out-of-scope of ASC 606, for the three and six months ended June 30, 2023 and 2022:

	Three Months Ended
(In thousands)	06/30/2023		06/30/2022
Noninterest Income
In-scope of Topic 606:
Commissions and Fees	$	7,979	$	7,872
Installment Billing	(42)		(46)
Refund of Commissions	113		10
Contract Liabilities/Deferred Revenue	(295)		(266)
Contingent Commissions	917		859
Subtotal Insurance Revenues	8,672		8,429
Trust and Asset Management	3,637		3,122
Mutual Fund & Investment Income	1,041		1,474
Subtotal Investment Service Income	4,678		4,596
Service Charges on Deposit Accounts	1,640		1,756
Card Services Income	3,087		2,959
Other	325		308
Noninterest Income (in-scope of ASC 606)	18,402		18,048
Noninterest Income (out-of-scope of ASC 606)	(5,787)		896
Total Noninterest Income	$	12,615	$	18,944

	Six Months Ended
(In thousands)	06/30/2023		06/30/2022
Noninterest Income
In-scope of Topic 606:
Commissions and Fees	$	16,495	$	15,836
Installment Billing	(40)		(2)
Refund of Commissions	172		(18)
Contract Liabilities/Deferred Revenue	(298)		(267)
Contingent Commissions	1,852		2,197
Subtotal Insurance Revenues	18,181		17,746
Trust and Asset Management	7,072		6,625
Mutual Fund & Investment Income	2,115		2,888
Subtotal Investment Service Income	9,187		9,513
Service Charges on Deposit Accounts	3,386		3,535
Card Services Income	5,769		5,502
Other	674		624
Noninterest Income (in-scope of ASC 606)	37,197		36,920
Noninterest Income (out-of-scope of ASC 606)	(4,182)		2,009
Total Noninterest Income	$	33,015	$	38,929

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 segments amounted to $3.7 million and $2.8 million, respectively, at June 30, 2023, compared to $6.1 million and $2.5 million, respectively, at December 31, 2022. Included in those amounts are contract assets related to contingent income of $1.3 million and $2.9 million, respectively, at June 30, 2023 and December 31, 2022, and contract liabilities of $2.5 million and $1.6 million, respectively at June 30, 2023 and December 31, 2022.

Contract Acquisition Costs

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

XML

Financial Guarantees

6 Months Ended

Jun. 30, 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 June 30, 2023, the Company’s maximum potential obligation under standby letters of credit was $36.2 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

6 Months Ended

Jun. 30, 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 June 30, 2023
(In thousands)	Banking		Insurance		Wealth Management		Intercompany		Consolidated
Interest income	$	71,870	$	1	$	0	$	(1)	$	71,870
Interest expense	19,975		0		0		(1)		19,974
Net interest income	51,895		1		0		0		51,896
Provision for credit loss expense	2,253		0		0		0		2,253
Noninterest income	(378)		8,798		4,736		(541)		12,615
Noninterest expense	41,385		7,201		3,922		(540)		51,968
Income before income tax expense	7,879		1,598		814		(1)		10,290
Income tax expense	1,147		437		200		0		1,784
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation	6,732		1,161		614		(1)		8,506
Less: Net income attributable to noncontrolling interests	31		0		0		0		31
Net Income attributable to Tompkins Financial Corporation	$	6,701	$	1,161	$	614	$	(1)	$	8,475
Depreciation and amortization	$	2,652	$	44	$	44	$	0	$	2,740
Assets	7,569,195		44,640		28,896		(16,493)		7,626,238
Goodwill	64,655		19,866		8,081		0		92,602
Other intangibles, net	975		1,496		42		0		2,513
Net loans and leases	5,303,820		0		0		0		5,303,820
Deposits	6,481,556		0		(11,019)		(15,886)		6,454,651
Total Equity	565,505		35,070		35,866		0		636,441

Three Months Ended June 30, 2022
(In thousands)	Banking		Insurance		Wealth Management		Intercompany		Consolidated
Interest income	$	60,953	$	1	$	0	$	(1)	$	60,953
Interest expense	2,692		0		0		(1)		2,691
Net interest income	58,261		1		0		0		58,262
Provision for credit loss expense	856		0		0		0		856
Noninterest income	6,329		8,573		4,598		(556)		18,944
Noninterest expense	39,395		6,812		3,469		(556)		49,120
Income before income tax expense	24,339		1,762		1,129		0		27,230
Income tax expense	5,465		494		370		0		6,329
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation	18,874		1,268		759		0		20,901
Less: Net income attributable to noncontrolling interests	32		0		0		0		32
Net Income attributable to Tompkins Financial Corporation	$	18,842	$	1,268	$	759	$	0	$	20,869
Depreciation and amortization	$	2,515	$	44	$	36	$	0	$	2,595
Assets	7,786,614		47,222		26,915		(18,290)		7,842,461
Goodwill	64,500		19,866		8,081		0		92,447
Other intangibles, net	1,236		1,830		58		0		3,124
Net loans and leases	5,118,710		0		0		0		5,118,710
Deposits	6,786,754		0		(847)		(16,386)		6,769,521
Total Equity	563,994		34,860		25,464		0		624,318

Six Months Ended June 30, 2023
(In thousands)	Banking		Insurance		Wealth Management		Intercompany		Consolidated
Interest income	$	141,108	$	2	$	0	$	(2)	$	141,108
Interest expense	34,968		0		0		(2)		34,966
Net interest income	106,140		2		0		0		106,142
Provision for credit loss expense	1,428		0		0		0		1,428
Noninterest income	6,321		18,433		9,357		(1,096)		33,015
Noninterest expense	81,233		14,417		7,572		(1,096)		102,126
Income before income tax expense	29,800		4,018		1,785		0		35,603
Income tax expense	6,136		1,110		439		0		7,685
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation	23,664		2,908		1,346		0		27,918
Less: Net income attributable to noncontrolling interests	62		0		0		0		62
Net Income attributable to Tompkins Financial Corporation	$	23,602	$	2,908	$	1,346	$	0	$	27,856
Depreciation and amortization	$	5,241	$	88	$	89	$	0	$	5,418

Six Months Ended June 30, 2022
(In thousands)	Banking		Insurance		Wealth Management		Intercompany		Consolidated
Interest income	$	120,129	$	2	$	0	$	(2)	$	120,129
Interest expense	5,255		0		0		(2)		5,253
Net interest income	114,874		2		0		0		114,876
Provision for credit loss expense	336		0		0		0		336
Noninterest income	12,522		18,007		9,532		(1,132)		38,929
Noninterest expense	76,584		13,314		7,193		(1,132)		95,959
Income before income tax expense	50,476		4,695		2,339		0		57,510
Income tax expense	11,630		1,310		365		0		13,305
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation	38,846		3,385		1,974		0		44,205
Less: Net income attributable to noncontrolling interests	63		0		0		0		63
Net Income attributable to Tompkins Financial Corporation	$	38,783	$	3,385	$	1,974	$	0	$	44,142
Depreciation and amortization	$	5,093	$	88	$	64	$	0	$	5,245

XML

Fair Value Measurements

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

FASB ASC Topic 820, Fair Value Measurements and Disclosures (ASC 820), defines fair value, establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements. ASC 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 ASC 820 are:

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

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

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

The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of June 30, 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
June 30, 2023
(In thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Assets
Available-for-sale debt securities
U.S. Treasuries	$	168,094	$	0	$	168,094	$	0
Obligations of U.S. Government sponsored entities	523,543		0		523,543		0
Obligations of U.S. states and political subdivisions	82,047		0		82,047		0
Mortgage-backed securities – residential, issued by:
U.S. Government agencies	48,942		0		48,942		0
U.S. Government sponsored entities	643,135		0		643,135		0
U.S. corporate debt securities	2,242		0		2,242		0
Total Available-for-sale debt securities	$	1,468,003	$	0	$	1,468,003	$	0
Equity securities, at fair value	$	778	$	0	$	0	$	778
Derivatives designated as hedging instruments	3,420		0		3,420		0
Liabilities
Derivatives not designated as hedging instruments	$	18	$	0	$	18	$	0

Recurring Fair Value Measurements
December 31, 2022
(In thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Assets
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
Liabilities
Derivatives not designated as hedging instruments	$	21	$	0	$	21	$	0

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), for the periods ended June 30, 2023 and December 31, 2022, was immaterial.

There were no transfers between Levels 1, 2 and 3 for the six months ended June 30, 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.

Derivatives: The Company has contracted with a third party vendor to provide periodic valuations for its interest rate derivatives to determine the fair value of its interest rate contracts. The vendor utilizes standard valuation methodologies applicable to interest rate derivatives such as discounted cash flow analysis. Such valuations are based upon readily observable market data and are therefore considered Level 2 valuations by the Company.

Certain assets are measured at fair value on a nonrecurring basis. For the Company, these include loans held for sale, individually evaluated loans, and other real estate owned ("OREO"). For the three and six months ended June 30, 2023, certain individually 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 based upon customized discounting criteria. In addition to collateral dependent evaluated loans, certain other real estate owned were remeasured and reported at fair value based upon the fair value of the underlying collateral. The fair values of other real estate owned are estimated using Level 2 inputs based on observable market data or Level 3 inputs based on customized discounting criteria. In general, the fair values of other real estate owned are based upon appraisals, with discounts made to reflect estimated costs to sell the real estate. Upon initial recognition, fair value write-downs are taken through a charge-off to the allowance for credit losses. Subsequent fair value write-downs on other real estate owned are reported in other noninterest expense.

Three months ended June 30, 2023
(In thousands)			Fair value measurements at reporting date using:						Gain (losses) from fair value changes
Assets:	As of 06/30/2023		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Three months ended 06/30/2023
Individually evaluated loans	$	8,822	$	0	$	0	$	8,822	$	0

Three months ended June 30, 2022
(In thousands)			Fair value measurements at reporting date using:						Gain (losses) from fair value changes
Assets:	As of 06/30/2022		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		06/30/2022
Individually evaluated loans	$	814	$	0	$	0	$	814	$	59
Other real estate owned	33		0		33		0		0

Six months ended June 30, 2023
(In thousands)			Fair value measurements at reporting date using:						Gain (losses) from fair value changes
Assets:	As of 06/30/2023		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Six months ended 06/30/2023
Individually evaluated loans	$	8,822	$	0	$	0	$	8,822	$	826
Other real estate owned	36		0		0		36		22

Six months ended June 30, 2022
(In thousands)			Fair value measurements at reporting date using:						Gain (losses) from fair value changes
Assets:	As of 06/30/2022		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Six months ended 06/30/2022
Individually evaluated loans	$	1,320	$	0	$	0	$	1,320	$	59
Other real estate owned	33		0		33		0		22

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 in this Report.

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. 

The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments at June 30, 2023 and December 31, 2022. The carrying amounts shown in the table are included in the Consolidated Statements of Condition under the indicated captions.

Estimated Fair Value of Financial Instruments
June 30, 2023
(In thousands)	Carrying Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
Financial Assets:
Cash and cash equivalents	$	81,614	$	81,614	$	81,614	$	0	$	0
Securities - held-to-maturity	312,369		262,444		0		262,444		0
FHLB and other stock	23,649		23,649		0		23,649		0
Accrued interest receivable	24,147		24,147		0		24,147		0
Loans/leases, net1	5,303,820		4,920,418		0		0		4,920,418
Financial Liabilities:
Time deposits	$	770,594	$	757,593	$	0	$	757,593	$	0
Other deposits	5,684,057		5,684,057		0		5,684,057		0
Fed funds purchased and securities sold
under agreements to repurchase	50,483		50,483		0		50,483		0
Other borrowings	387,100		384,013		0		384,013		0
Accrued interest payable	2,162		2,162		0		2,162		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
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 and Other Stock: The carrying amount of FHLB stock approximates fair value. If the stock is redeemed, the Company will receive an amount equal to the par value of the stock. For miscellaneous equity securities, carrying value is cost.

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

6 Months Ended

Jun. 30, 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 risk 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. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the

Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s existing credit derivatives result from participations of loan participation arrangements, therefore, are not used to manage interest rate risk in the Company’s assets or liabilities.

Fair Value Hedges of Interest Rate Risk

The Company is exposed to changes in the fair value of certain of its fixed-rate assets due to changes in benchmark interest rates. The Company uses interest rate swaps to manage its exposure to changes in fair value on these instruments attributable to changes in the designated benchmark interest rate. Interest rate swaps designated as fair value hedges involve the payment of fixed-rate amounts to a counterparty in exchange for the Company receiving variable-rate payments over the life of the agreements without the exchange of the underlying notional amount.

For derivatives designated and that qualify as fair value hedges, the gain or loss on the derivative as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in interest income.

As of June 30, 2023, the following amounts were recorded on the balance sheet related to cumulative basis adjustment for fair value hedges. As of December 31, 2022, there no balances for Fixed Rate Loans.

Line Item in the Statement of Financial Position in Which the Hedged Item is Included	Carrying Amount of the Hedged Assets/(Liabilities)	Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets/(Liabilities)
	June 30, 2023	June 30, 2023
Fixed Rate Loans1	$146,680	$(3,320)
Total	$146,680	$(3,320)
1 These amounts include the amortized cost basis of closed portfolios of fixed rate loans used to designate hedging relationships in which the hedged item is the stated amount of assets in the closed portfolio anticipated to be outstanding for the designated hedged period. At June 30, 2023, the amortized cost basis of the closed portfolios used in these hedging relationships was $795.6 million; the cumulative basis adjustments associated with these hedging relationships was $3.3 million; and the amounts of the designated hedged items were $150 million.

Non-designated Hedges

The Company’s existing credit derivatives result from participations in interest rate swaps provided by external lenders as part of loan participation arrangements, 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 Consolidated Statements of Condition

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 June 30, 2023 and December 31, 2022. The Company began entering into derivative transactions in the second quarter of 2022. Amounts below are presented on a net basis in accordance with applicable accounting guidance.

Derivative Assets
	June 30, 2023
	Notional		Balance Sheet	Fair
(In thousands)	Amount		Location	Value*
Derivatives designated as hedging instruments
Interest Rate Products	$	150,000	Other Assets	$	3,420
Total derivatives designated as hedging instruments				$	3,420
*The Fair Value reported for June 30, 2023 includes $121,000 of accrued interest receivable.

Derivative Assets
	December 31, 2022
	Notional		Balance Sheet	Fair
(In thousands)	Amount		Location	Value
Derivatives designated as hedging instruments
Interest Rate Products	$	0	Other Assets	$	0
Total derivatives designated as hedging instruments				$	0

Derivative Liabilities
	June 30, 2023
	Notional		Balance Sheet	Fair
(In thousands)	Amount		Location	Value
Derivatives not designated as hedging instruments
Risk Participation Agreement	$	7,499	Other Liabilities	$	18
Total derivatives not designated as hedging instruments				$	18

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

Tabular Disclosure of the Effect of Fair Value and Cash Flow Hedge Accounting on the Consolidated Statements of Income

The table below presents the effect of the Company’s derivative financial instruments on the consolidated statements of income as of June 30, 2023:

The Effect of Fair Value and Cash Flow Hedge Accounting on the Statement of Financial Performance
	Location of Gain or (Loss) Recognized in Income on Derivative
	Three Months Ended June 30, 2023		Three Months Ended June 30, 2022
(In thousands)	Interest Income
Total amounts of income and expense line items presented in the statement of financial performance in which the effects of fair value or cash flow hedges are recorded	$	305	$	0
The effects of fair value and cash flow hedging:
Gain or (loss) on fair value hedging relationships in Subtopic 815-20
Interest contracts
Hedged items	(3,320)		0
Derivatives designated as hedging instruments	3,625		0

The Effect of Fair Value and Cash Flow Hedge Accounting on the Statement of Financial Performance
	Location of Gain or (Loss) Recognized in Income on Derivative
	Six Months Ended June 30, 2023		Six Months Ended June 30, 2022
(In thousands)	Interest Income
Total amounts of income and expense line items presented in the statement of financial performance in which the effects of fair value or cash flow hedges are recorded	$	305	$	0
The effects of fair value and cash flow hedging:
Gain or (loss) on fair value hedging relationships in Subtopic 815-20
Interest contracts
Hedged items	(3,320)		0
Derivatives designated as hedging instruments	3,625		0

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 and six months ended June 30, 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		Amount of Gain or (Loss) Recognized in Income on Derivative
		Three Months Ended
(In thousands)		June 30, 2023		June 30, 2022
Risk Participation Agreement	Other income / (expense)	$	8	$	41
Total		$	8	$	41

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		Amount of Gain or (Loss) Recognized in Income on Derivative
		Six Months Ended
(In thousands)		June 30, 2023		June 30, 2022
Risk Participation Agreement	Other income / (expense)	$	2	$	41
Total		$	2	$	41

Credit-risk-related Contingent Features

Applicable for OTC derivatives with dealers

The Company has agreements with each of its derivative counterparties that contain a provision where if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the company could also be declared in default on its derivative obligations.

As of June 30, 2023, the fair value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements was $0. As of June 30, 2023, the Company has not posted any collateral related to these agreements. The interest rate hedge counterparty has posted $3.5 million of collateral in proportion to potential losses in the derivative position.

XML

Securities (Tables)

6 Months Ended

Jun. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Schedule of available-for-sale securities

The following tables summarize available-for-sale debt securities held by the Company at June 30, 2023 and December 31, 2022:

	Available-for-Sale Debt Securities
June 30, 2023	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(In thousands)
U.S. Treasuries	$	190,275	$	0	$	22,181	$	168,094
Obligations of U.S. Government sponsored entities	592,694		0		69,151		523,543
Obligations of U.S. states and political subdivisions	90,330		1		8,284		82,047
Mortgage-backed securities – residential, issued by
U.S. Government agencies	54,852		9		5,919		48,942
U.S. Government sponsored entities	757,400		0		114,265		643,135
U.S. corporate debt securities	2,500		0		258		2,242
Total available-for-sale debt securities	$	1,688,051	$	10	$	220,058	$	1,468,003

	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 tables summarize held-to-maturity debt securities held by the Company at June 30, 2023 and December 31, 2022:

	Held-to-Maturity Securities
June 30, 2023	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(In thousands)
U.S. Treasuries	$	86,370	$	0	$	12,598	$	73,772
Obligations of U.S. Government sponsored entities	225,999		0		37,327		188,672
Total held-to-maturity debt securities	$	312,369	$	0	$	49,925	$	262,444

	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 following table summarizes held-to-maturity debt securities that had unrealized losses at June 30, 2023 and December 31, 2022:

June 30, 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	$	73,772	$	12,598	$	73,772	$	12,598
Obligations of U.S. Government sponsored entities	8,176		751		180,496		36,576		188,672		37,327
Total held-to-maturity debt securities	$	8,176	$	751	$	254,268	$	49,174	$	262,444	$	49,925

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 available-for-sale securities with unrealized losses

The following table summarizes available-for-sale debt securities that had unrealized losses at June 30, 2023, and December 31, 2022:

June 30, 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	$	168,094	$	22,181	$	168,094	$	22,181
Obligations of U.S. Government sponsored entities	28,596		758		494,947		68,393		523,543		69,151
Obligations of U.S. states and political subdivisions	26,104		756		55,842		7,528		81,946		8,284
Mortgage-backed securities – residential, issued by
U.S. Government agencies	6,244		254		42,351		5,665		48,595		5,919
U.S. Government sponsored entities	13,055		727		630,081		113,538		643,136		114,265
U.S. corporate debt securities	0		0		2,242		258		2,242		258
Total available-for-sale debt securities	$	73,999	$	2,495	$	1,393,557	$	217,563	$	1,467,556	$	220,058

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 of amortized cost and estimated fair value of debt securities by contractual maturity

June 30, 2023
(In thousands)	Amortized Cost		Fair Value
Available-for-sale debt securities:
Due in one year or less	$	47,677	$	46,893
Due after one year through five years	514,770		461,320
Due after five years through ten years	269,157		230,292
Due after ten years	44,195		37,421
Total	875,799		775,926
Mortgage-backed securities	812,252		692,077
Total available-for-sale debt securities	$	1,688,051	$	1,468,003

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

June 30, 2023
(In thousands)	Amortized Cost		Fair Value
Held-to-maturity debt securities:
Due after five years through ten years	$	312,369	$	262,444
Total held-to-maturity debt securities	$	312,369	$	262,444

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

XML

Loans and Leases (Tables)

6 Months Ended

Jun. 30, 2023

Receivables [Abstract]

Schedule of loans and leases

Loans and leases at June 30, 2023 and December 31, 2022 were as follows:

(In thousands)	06/30/2023		12/31/2022
Commercial and industrial
Agriculture	$	64,815	$	85,073
Commercial and industrial other	701,006		705,700
PPP loans*	613		756
Subtotal commercial and industrial	766,434		791,529
Commercial real estate
Construction	249,847		201,116
Agriculture	215,915		214,963
Commercial real estate other	2,487,067		2,437,339
Subtotal commercial real estate	2,952,829		2,853,418
Residential real estate
Home equity	185,529		188,623
Mortgages	1,348,448		1,346,318
Subtotal residential real estate	1,533,977		1,534,941
Consumer and other
Indirect	1,419		2,224
Consumer and other	85,794		75,412
Subtotal consumer and other	87,213		77,636
Leases	16,972		16,134
Total loans and leases	5,357,425		5,273,658
Less: unearned income and deferred costs and fees	(5,060)		(4,747)
Total loans and leases, net of unearned income and deferred costs and fees	$	5,352,365	$	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 June 30, 2023 and December 31, 2022:

June 30, 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	$	0	$	53	$	0	$	53	$	64,762	$	64,815
Commercial and industrial other	60		2,266		2,704		5,030		695,976		701,006
PPP loans*	0		0		0		0		613		613
Subtotal commercial and industrial	60		2,319		2,704		5,083		761,351		766,434
Commercial real estate
Construction	0		65		0		65		249,782		249,847
Agriculture	165		0		0		165		215,750		215,915
Commercial real estate other	0		15,408		9,405		24,813		2,462,254		2,487,067
Subtotal commercial real estate	165		15,473		9,405		25,043		2,927,786		2,952,829
Residential real estate
Home equity	333		588		1,110		2,031		183,498		185,529
Mortgages	0		1,000		8,141		9,141		1,339,307		1,348,448
Subtotal residential real estate	333		1,588		9,251		11,172		1,522,805		1,533,977
Consumer and other
Indirect	13		25		44		82		1,337		1,419
Consumer and other	160		119		138		417		85,377		85,794
Subtotal consumer and other	173		144		182		499		86,714		87,213
Leases	0		0		0		0		16,972		16,972
Total loans and leases	731		19,524		21,542		41,797		5,315,628		5,357,425
Less: unearned income and deferred costs and fees	0		0		0		0		(5,060)		(5,060)
Total loans and leases, net of unearned income and deferred costs and fees	$	731	$	19,524	$	21,542	$	41,797	$	5,310,568	$	5,352,365
*SBA Paycheck Protection Program

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

Schedule of loans on nonaccrual status

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 June 30, 2023 and December 31, 2022:

June 30, 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
Commercial and industrial other	$	2,494	$	3,146	$	0
Subtotal commercial and industrial	2,494		3,146		0
Commercial real estate
Agriculture	0		179		0
Commercial real estate other	6,659		11,476		0
Subtotal commercial real estate	6,659		11,655		0
Residential real estate
Home equity	0		2,891		0
Mortgages	181		13,318		7
Subtotal residential real estate	181		16,209		7
Consumer and other
Indirect	0		87		0
Consumer and other	0		236		27
Subtotal consumer and other	0		323		27
Total loans and leases	$	9,334	$	31,333	$	34

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)

6 Months Ended

Jun. 30, 2023

Receivables [Abstract]

Schedule of allowance for loan and lease losses segregated by originated and acquired loan and lease portfolios and by portfolio segment

The following table details activity in the allowance for credit losses on loans for the three and six months ended June 30, 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 June 30, 2023
(In thousands)	Commercial & Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Finance Leases		Total
Allowance for credit losses:
Beginning balance	$	6,316	$	27,186	$	10,858	$	1,628	$	111	$	46,099
Charge-offs	0		0		0		(169)		0		(169)
Recoveries	13		(9)		114		78		0		196
Provision (credit) for credit loss expense	356		1,791		139		143		(10)		2,419
Ending Balance	$	6,685	$	28,968	$	11,111	$	1,680	$	101	$	48,545

Three Months Ended June 30, 2022
(In thousands)	Commercial & Industrial		Commercial Real Estate		Residential Real Estate		Consumer and Other		Finance Leases		Total
Allowance for credit losses:
Beginning balance	$	7,027	$	22,982	$	10,447	$	1,588	$	82	$	42,126
Charge-offs	0		(23)		(51)		(82)		0		(156)
Recoveries	6		764		197		76		0		1,043
Provision (credit) for credit loss expense	781		(496)		489		9		(3)		780
Ending Balance	$	7,814	$	23,227	$	11,082	$	1,591	$	79	$	43,793

Six Months Ended June 30, 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 2016-13	2		16		46		0		0		64
Charge-offs	0		0		(2)		(275)		0		(277)
Recoveries	59		1,237		178		111		0		1,585
Provision (credit) for credit loss expense	585		428		(265)		486		5		1,239
Ending Balance	$	6,685	$	28,968	$	11,111	$	1,680	$	101	$	48,545

Six Months Ended June 30, 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)		(50)		(51)		(278)		0		(402)
Recoveries	26		805		307		168		0		1,306
Provision (credit) for credit loss expense	1,476		(2,341)		687		209		15		46
Ending Balance	$	7,814	$	23,227	$	11,082	$	1,591	$	79	$	43,793

The following table details activity in the liabilities for off-balance sheet credit exposures for the three and six months ended June 30, 2023 and 2022:

Three Months Ended June 30,
(In thousands)	2023		2022
Liabilities for off-balance sheet credit exposures at beginning of period	$	3,151	$	2,720
(Credit) provision for credit loss expense related to off-balance sheet credit exposures	(166)		76
Liabilities for off-balance sheet credit exposures at end of period	$	2,985	$	2,796

Six Months Ended June 30,
(In thousands)	2023		2022
Liabilities for off-balance sheet credit exposures at beginning of period	$	2,796	$	2,506
Provision for credit loss expense related to off-balance sheet credit exposures	189		290
Liabilities for off-balance sheet credit exposures at end of period	$	2,985	$	2,796

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

(In thousands)	Real Estate		Business Assets		Other		Total		ACL Allocation
June 30, 2023
Commercial and Industrial	$	2,494	$	0	$	0	$	2,494	$	0
Commercial Real Estate	10,146		0		0		10,146		1,082
Residential Real Estate	181		0		0		181		0
Total	$	12,821	$	0	$	0	$	12,821	$	1,082

(In thousands)	Real Estate		Business Assets		Other		Total		ACL Allocation
December 31, 2022
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 by class of commercial and industrial loans and commercial real estate loans

The following table presents credit quality indicators by total loans on an amortized cost basis by origination year as of June 30, 2023 and December 31, 2022:

June 30, 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	$	54,166	$	110,845	$	75,993	$	33,954	$	39,929	$	169,064	$	203,109	$	2,954	$	690,014
Special Mention	0		0		112		297		113		1,488		771		0		2,781
Substandard	0		0		94		420		26		1,175		6,496		0		8,211
Total Commercial and Industrial - Other	$	54,166	$	110,845	$	76,199	$	34,671	$	40,068	$	171,727	$	210,376	$	2,954	$	701,006
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Commercial and Industrial - PPP:
Pass	$	0	$	0	$	350	$	263	$	0	$	0	$	0	$	0	$	613
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	$	350	$	263	$	0	$	0	$	0	$	0	$	613
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Commercial and Industrial - Agriculture:
Pass	$	5,774	$	13,555	$	3,754	$	3,903	$	3,559	$	10,452	$	23,314	$	344	$	64,655
Special Mention	0		0		53		0		0		0		30		0		83
Substandard	0		0		0		63		0		11		3		0		77
Total Commercial and Industrial - Agriculture	$	5,774	$	13,555	$	3,807	$	3,966	$	3,559	$	10,463	$	23,347	$	344	$	64,815
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Commercial Real Estate
Pass	$	89,762	$	323,682	$	363,357	$	315,106	$	275,367	$	978,544	$	30,045	$	5,937	$	2,381,800
Special Mention	0		640		2,028		1,672		11,142		35,097		1,384		0		51,963
Substandard	0		15,369		108		0		2,915		34,796		116		0		53,304
Total Commercial Real Estate	$	89,762	$	339,691	$	365,493	316,778		289,424		1,048,437		$	31,545	$	5,937	$	2,487,067
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Commercial Real Estate - Agriculture:
Pass	$	7,532	$	34,610	$	23,534	$	22,303	$	24,520	$	98,149	$	1,165	$	2,396	$	214,209
Special Mention	0		0		0		0		390		1,088		0		0		1,478
Substandard	0		0		0		0		179		49		0		0		228
Total Commercial Real Estate - Agriculture	$	7,532	$	34,610	$	23,534	$	22,303	$	25,089	$	99,286	$	1,165	$	2,396	$	215,915
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	$	40,996	$	78,869	$	16,481	$	9,976	$	11,449	$	84,040	$	8,036	$	249,847
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	$	40,996	$	78,869	$	16,481	$	9,976	$	11,449	$	84,040	$	8,036	$	249,847
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Residential - Home Equity
Performing	$	1,244	$	2,363	$	969	$	583	$	910	$	9,697	$	164,163	$	2,709	$	182,638
Nonperforming	0		0		0		0		0		451		2,440		0		2,891
Total Residential - Home Equity	$	1,244	$	2,363	$	969	$	583	$	910	$	10,148	$	166,603	$	2,709	$	185,529
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	0	$	2	$	0	$	0	$	2
Residential - Mortgages
Performing	$	50,668	$	191,160	$	265,103	$	231,672	$	113,613	$	482,913	$	0	$	0	$	1,335,129
Nonperforming	0		395		330		868		908		10,818		0		0		13,319
Total Residential - Mortgages	$	50,668	$	191,555	$	265,433	$	232,540	$	114,521	$	493,731	$	0	$	0	$	1,348,448
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Consumer - Direct
Performing	$	31,859	$	15,186	$	12,737	$	6,302	$	5,360	$	11,263	$	2,851	$	0	$	85,558
Nonperforming	0		5		1		3		92		132		3		0		236
Total Consumer - Direct	$	31,859	$	15,191	$	12,738	$	6,305	$	5,452	$	11,395	$	2,854	$	0	$	85,794
Current-period gross writeoffs	$	155	$	8	$	0	$	14	$	36	$	13	$	0	$	0	$	226
Consumer - Indirect
Performing	$	0	$	0	$	123	$	113	$	676	$	420	$	0	$	0	$	1,332
Nonperforming	0		0		0		0		71		16		0		0		87
Total Consumer - Indirect	$	0	$	0	$	123	$	113	$	747	$	436	$	0	$	0	$	1,419
Current-period gross writeoffs	$	0	$	0	$	0	$	0	$	39	$	10	$	0	$	0	$	49

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 table presents 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)

6 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

Schedule of basic and diluted earnings per share

Earnings per share in the table below, for the three and six month periods ended June 30, 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)	6/30/2023		6/30/2022
Basic
Net income available to common shareholders	$	8,475	$	20,869
Less: income attributable to unvested stock-based compensation awards	(8)		(67)
Net earnings allocated to common shareholders	8,467		20,802
Weighted average shares outstanding, including unvested stock-based compensation awards	14,502,161		14,524,975
Less: average unvested stock-based compensation awards	(188,028)		(207,560)
Weighted average shares outstanding - Basic	14,314,133		14,317,415
Diluted
Net earnings allocated to common shareholders	8,467		20,802
Weighted average shares outstanding - Basic	14,314,133		14,317,415
Plus: incremental shares from assumed conversion of stock-based compensation awards	32,654		70,186
Weighted average shares outstanding - Diluted	14,346,787		14,387,601
Basic EPS	$	0.59	$	1.45
Diluted EPS	$	0.59	$	1.45

	Six Months Ended
(In thousands, except share and per share data)	6/30/2023		6/30/2022
Basic
Net income available to common shareholders	$	27,856	$	44,142
Less: income attributable to unvested stock-based compensation awards	(26)		(143)
Net earnings allocated to common shareholders	27,830		43,999
Weighted average shares outstanding, including unvested stock-based compensation awards	14,511,078		14,568,102
Less: unvested stock-based compensation awards	(190,763)		(209,633)
Weighted average shares outstanding - Basic	14,320,315		14,358,469
Diluted
Net earnings allocated to common shareholders	27,830		43,999
Weighted average shares outstanding - Basic	14,320,315		14,358,469
Plus: incremental shares from assumed conversion of stock-based compensation awards	47,866		74,183
Weighted average shares outstanding - Diluted	14,368,181		14,432,652
Basic EPS	$	1.94	$	3.06
Diluted EPS	$	1.94	$	3.05

XML

Other Comprehensive Income (Loss) (Tables)

6 Months Ended

Jun. 30, 2023

Stockholders' Equity Note [Abstract]

Schedule of activity in accumulated other comprehensive income (loss) and amounts reclassified out of each component of accumulated other comprehensive (loss) income

The following tables present reclassifications out of accumulated other comprehensive income (loss) for the three and six month periods ended June 30, 2023 and 2022:

	Three Months Ended June 30, 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	$	(17,531)	$	4,294	$	(13,237)
Reclassification adjustment for net realized loss on sale of available-for-sale debt securities included in net income	7,052		(1,727)		5,325
Net unrealized gains/losses	(10,479)		2,567		(7,912)
Employee benefit plans:
Amortization of net retirement plan actuarial gain	261		(64)		197
Amortization of net retirement plan prior service cost	54		(13)		41
Employee benefit plans	315		(77)		238
Other comprehensive (loss) income	$	(10,164)	$	2,490	$	(7,674)

	Three Months Ended June 30, 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	$	(57,544)	$	14,095	$	(43,449)
Reclassification adjustment for net realized loss on sale of available-for-sale debt securities included in net income	0		0		0
Net unrealized gains/losses	(57,544)		14,095		(43,449)
Employee benefit plans:
Amortization of net retirement plan actuarial gain	514		(125)		389
Amortization of net retirement plan prior service cost	53		(13)		40
Employee benefit plans	567		(138)		429
Other comprehensive (loss) income	$	(56,977)	$	13,957	$	(43,020)

	Six Months Ended June 30, 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	$	9,724	$	(2,383)	$	7,341
Reclassification adjustment for net realized loss on sale of available-for-sale debt securities included in net income	7,052		(1,727)		5,325
Net unrealized gains/losses	16,776		(4,110)		12,666
Employee benefit plans:
Amortization of net retirement plan actuarial loss	558		(137)		421
Amortization of net retirement plan prior service cost	109		(27)		82
Employee benefit plans	667		(164)		503
Other comprehensive (loss) income	$	17,443	$	(4,274)	$	13,169

	Six Months Ended June 30, 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	$	(164,025)	$	40,171	$	(123,854)
Reclassification adjustment for net realized gain on sale of available-for-sale debt securities included in net income	0		0		0
Net unrealized gains/losses	(164,025)		40,171		(123,854)
Employee benefit plans:
Amortization of net retirement plan actuarial loss	1,129		(276)		853
Amortization of net retirement plan prior service cost	109		(27)		82
Employee benefit plans	1,238		(303)		935
Other comprehensive (loss) income	$	(162,787)	$	39,868	$	(122,919)

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

(In thousands)	Available-for- Sale Debt Securities		Employee Benefit Plans		Accumulated Other Comprehensive (Loss) Income
Balance at March 31, 2023	$	(158,225)	$	(29,621)	$	(187,846)
Other comprehensive income before reclassifications	(13,237)		0		(13,237)
Amounts reclassified from accumulated other comprehensive (loss) income	5,325		238		5,563
Net current-period other comprehensive income (loss)	(7,912)		238		(7,674)
Balance at June 30, 2023	$	(166,137)	$	(29,383)	$	(195,520)
Balance at January 1, 2023	$	(178,803)	$	(29,886)	$	(208,689)
Other comprehensive income (loss) before reclassifications	7,341		0		7,341
Amounts reclassified from accumulated other comprehensive (loss) income	5,325		503		5,828
Net current-period other comprehensive (loss) income	12,666		503		13,169
Balance at June 30, 2023	$	(166,137)	$	(29,383)	$	(195,520)

(In thousands)	Available-for- Sale Debit Securities		Employee Benefit Plans		Accumulated Other Comprehensive (Loss) Income
Balance at March 31, 2022	$	(94,965)	$	(40,884)	$	(135,849)
Other comprehensive (loss) income before reclassifications	(43,449)		0		(43,449)
Amounts reclassified from accumulated other comprehensive (loss) income	0		429		429
Net current-period other comprehensive income (loss)	(43,449)		429		(43,020)
Balance at June 30, 2022	$	(138,414)	$	(40,455)	$	(178,869)
Balance at January 1, 2022	$	(14,560)	$	(41,390)	$	(55,950)
Other comprehensive (loss) income before reclassifications	(123,854)		0		(123,854)
Amounts reclassified from accumulated other comprehensive (loss) income	0		935		935
Net current-period other comprehensive (loss) income	(123,854)		935		(122,919)
Balance at June 30, 2022	$	(138,414)	$	(40,455)	$	(178,869)

Schedule of reclassifications out of accumulated other comprehensive income (loss)

The following tables present the amounts reclassified out of each component of accumulated other comprehensive (loss) income for the three and six months ended June 30, 2023 and 2022:

Three Months Ended June 30, 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	$	(7,052)	Net (loss) gain on securities transactions
	1,727		Tax expense
	(5,325)		Net of tax
Employee benefit plans:
Amortization of the following 2
Net retirement plan actuarial loss	(261)		Other operating expense
Net retirement plan prior service cost	(54)		Other operating expense
	(315)		Total before tax
	77		Tax benefit
	$	(238)	Net of tax

Three Months Ended June 30, 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 following2
Net retirement plan actuarial loss	(514)		Other operating expense
Net retirement plan prior service cost	(53)		Other operating expense
	(567)		Total before tax
	138		Tax benefit
	$	(429)	Net of tax

Six Months Ended June 30, 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	$	(7,052)	Net (loss) gain on securities transactions
	1,727		Tax expense
	(5,325)		Net of tax
Employee benefit plans:
Amortization of the following2
Net retirement plan actuarial loss	(558)		Other operating expense
Net retirement plan prior service cost	(109)		Other operating expense
	(667)		Total before tax
	164		Tax benefit
	$	(503)	Net of tax

Six Months Ended June 30, 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 following2
Net retirement plan actuarial loss	(1,129)		Other operating expense
Net retirement plan prior service cost	(109)		Other operating expense
	(1,238)		Total before tax
	303		Tax benefit
	$	(935)	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 Plans (Tables)

6 Months Ended

Jun. 30, 2023

Retirement Benefits [Abstract]

Schedule of components of net periodic benefit cost

Components of Net Periodic Benefit Cost

	Pension Benefits				Life and Health				SERP Benefits
	Three Months Ended				Three Months Ended				Three Months Ended
(In thousands)	6/30/2023		6/30/2022		6/30/2023		6/30/2022		6/30/2023		6/30/2022
Service cost	$	0	$	0	$	1	$	43	$	7	$	(13)
Interest cost	814		529		88		59		275		206
Expected return on plan assets	(1,195)		(1,474)		0		0		0		0
Amortization of net retirement plan actuarial loss	274		285		(13)		46		0		183
Amortization of net retirement plan prior service (credit) cost	0		0		(15)		(15)		69		68
Net periodic benefit (income) cost	$	(107)	$	(660)	$	61	$	133	$	351	$	444

	Pension Benefits				Life and Health				SERP Benefits
	Six Months Ended				Six Months Ended				Six Months Ended
(In thousands)	6/30/2023		6/30/2022		6/30/2023		6/30/2022		6/30/2023		6/30/2022
Service cost	$	0	$	0	$	16	$	87	$	21	$	39
Interest cost	1,637		992		177		111		574		407
Expected return on plan assets	(2,394)		(2,942)		0		0		0		0
Amortization of net retirement plan actuarial loss	578		608		(20)		98		0		423
Amortization of net retirement plan prior service cost (credit)	0		0		(30)		(30)		139		139
Net periodic benefit (income) cost	$	(179)	$	(1,342)	$	143	$	266	$	734	$	1,008

XML

Other Income and Operating Expense (Tables)

6 Months Ended

Jun. 30, 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 of the periods presented below are stated separately.

	Three Months Ended				Six Months Ended
(In thousands)	6/30/2023		6/30/2022		6/30/2023		6/30/2022
Noninterest Income
Other service charges	$	649	$	669	$	1,264	$	1,296
Earnings from corporate owned life insurance	554		171		1,169		593
Net gains on the sale of loans originated for sale	27		53		65		57
Other income	373		348		1,046		771
Total other income	$	1,603	$	1,241	$	3,544	$	2,717
Noninterest Expenses
Marketing expense	$	1,688	$	1,456	$	2,792	$	2,513
Professional fees	2,124		1,719		3,928		3,325
Legal fees	635		498		1,054		708
Technology expense	3,656		3,690		7,663		7,373
FDIC insurance	779		677		1,833		1,378
Cardholder expense	1,116		1,280		2,133		2,422
Other expenses	4,470		3,709		8,534		7,330
Total other operating expense	$	14,468	$	13,029	$	27,937	$	25,049

XML

Revenue Recognition (Tables)

6 Months Ended

Jun. 30, 2023

Revenue from Contract with Customer [Abstract]

Schedule of disaggregation of noninterest income, segregated by revenue streams in-scope and out-of-scope of ASC 606

The following tables present noninterest income, segregated by revenue streams in-scope and out-of-scope of ASC 606, for the three and six months ended June 30, 2023 and 2022:

	Three Months Ended
(In thousands)	06/30/2023		06/30/2022
Noninterest Income
In-scope of Topic 606:
Commissions and Fees	$	7,979	$	7,872
Installment Billing	(42)		(46)
Refund of Commissions	113		10
Contract Liabilities/Deferred Revenue	(295)		(266)
Contingent Commissions	917		859
Subtotal Insurance Revenues	8,672		8,429
Trust and Asset Management	3,637		3,122
Mutual Fund & Investment Income	1,041		1,474
Subtotal Investment Service Income	4,678		4,596
Service Charges on Deposit Accounts	1,640		1,756
Card Services Income	3,087		2,959
Other	325		308
Noninterest Income (in-scope of ASC 606)	18,402		18,048
Noninterest Income (out-of-scope of ASC 606)	(5,787)		896
Total Noninterest Income	$	12,615	$	18,944

	Six Months Ended
(In thousands)	06/30/2023		06/30/2022
Noninterest Income
In-scope of Topic 606:
Commissions and Fees	$	16,495	$	15,836
Installment Billing	(40)		(2)
Refund of Commissions	172		(18)
Contract Liabilities/Deferred Revenue	(298)		(267)
Contingent Commissions	1,852		2,197
Subtotal Insurance Revenues	18,181		17,746
Trust and Asset Management	7,072		6,625
Mutual Fund & Investment Income	2,115		2,888
Subtotal Investment Service Income	9,187		9,513
Service Charges on Deposit Accounts	3,386		3,535
Card Services Income	5,769		5,502
Other	674		624
Noninterest Income (in-scope of ASC 606)	37,197		36,920
Noninterest Income (out-of-scope of ASC 606)	(4,182)		2,009
Total Noninterest Income	$	33,015	$	38,929

XML

Segment and Related Information (Table)

6 Months Ended

Jun. 30, 2023

Segment Reporting [Abstract]

Schedule of segment and related information

Three Months Ended June 30, 2023
(In thousands)	Banking		Insurance		Wealth Management		Intercompany		Consolidated
Interest income	$	71,870	$	1	$	0	$	(1)	$	71,870
Interest expense	19,975		0		0		(1)		19,974
Net interest income	51,895		1		0		0		51,896
Provision for credit loss expense	2,253		0		0		0		2,253
Noninterest income	(378)		8,798		4,736		(541)		12,615
Noninterest expense	41,385		7,201		3,922		(540)		51,968
Income before income tax expense	7,879		1,598		814		(1)		10,290
Income tax expense	1,147		437		200		0		1,784
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation	6,732		1,161		614		(1)		8,506
Less: Net income attributable to noncontrolling interests	31		0		0		0		31
Net Income attributable to Tompkins Financial Corporation	$	6,701	$	1,161	$	614	$	(1)	$	8,475
Depreciation and amortization	$	2,652	$	44	$	44	$	0	$	2,740
Assets	7,569,195		44,640		28,896		(16,493)		7,626,238
Goodwill	64,655		19,866		8,081		0		92,602
Other intangibles, net	975		1,496		42		0		2,513
Net loans and leases	5,303,820		0		0		0		5,303,820
Deposits	6,481,556		0		(11,019)		(15,886)		6,454,651
Total Equity	565,505		35,070		35,866		0		636,441

Three Months Ended June 30, 2022
(In thousands)	Banking		Insurance		Wealth Management		Intercompany		Consolidated
Interest income	$	60,953	$	1	$	0	$	(1)	$	60,953
Interest expense	2,692		0		0		(1)		2,691
Net interest income	58,261		1		0		0		58,262
Provision for credit loss expense	856		0		0		0		856
Noninterest income	6,329		8,573		4,598		(556)		18,944
Noninterest expense	39,395		6,812		3,469		(556)		49,120
Income before income tax expense	24,339		1,762		1,129		0		27,230
Income tax expense	5,465		494		370		0		6,329
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation	18,874		1,268		759		0		20,901
Less: Net income attributable to noncontrolling interests	32		0		0		0		32
Net Income attributable to Tompkins Financial Corporation	$	18,842	$	1,268	$	759	$	0	$	20,869
Depreciation and amortization	$	2,515	$	44	$	36	$	0	$	2,595
Assets	7,786,614		47,222		26,915		(18,290)		7,842,461
Goodwill	64,500		19,866		8,081		0		92,447
Other intangibles, net	1,236		1,830		58		0		3,124
Net loans and leases	5,118,710		0		0		0		5,118,710
Deposits	6,786,754		0		(847)		(16,386)		6,769,521
Total Equity	563,994		34,860		25,464		0		624,318

Six Months Ended June 30, 2023
(In thousands)	Banking		Insurance		Wealth Management		Intercompany		Consolidated
Interest income	$	141,108	$	2	$	0	$	(2)	$	141,108
Interest expense	34,968		0		0		(2)		34,966
Net interest income	106,140		2		0		0		106,142
Provision for credit loss expense	1,428		0		0		0		1,428
Noninterest income	6,321		18,433		9,357		(1,096)		33,015
Noninterest expense	81,233		14,417		7,572		(1,096)		102,126
Income before income tax expense	29,800		4,018		1,785		0		35,603
Income tax expense	6,136		1,110		439		0		7,685
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation	23,664		2,908		1,346		0		27,918
Less: Net income attributable to noncontrolling interests	62		0		0		0		62
Net Income attributable to Tompkins Financial Corporation	$	23,602	$	2,908	$	1,346	$	0	$	27,856
Depreciation and amortization	$	5,241	$	88	$	89	$	0	$	5,418

Six Months Ended June 30, 2022
(In thousands)	Banking		Insurance		Wealth Management		Intercompany		Consolidated
Interest income	$	120,129	$	2	$	0	$	(2)	$	120,129
Interest expense	5,255		0		0		(2)		5,253
Net interest income	114,874		2		0		0		114,876
Provision for credit loss expense	336		0		0		0		336
Noninterest income	12,522		18,007		9,532		(1,132)		38,929
Noninterest expense	76,584		13,314		7,193		(1,132)		95,959
Income before income tax expense	50,476		4,695		2,339		0		57,510
Income tax expense	11,630		1,310		365		0		13,305
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation	38,846		3,385		1,974		0		44,205
Less: Net income attributable to noncontrolling interests	63		0		0		0		63
Net Income attributable to Tompkins Financial Corporation	$	38,783	$	3,385	$	1,974	$	0	$	44,142
Depreciation and amortization	$	5,093	$	88	$	64	$	0	$	5,245

XML

Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

Summary of financial assets and financial liabilities measured at fair value on recurring basis

The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of June 30, 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
June 30, 2023
(In thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Assets
Available-for-sale debt securities
U.S. Treasuries	$	168,094	$	0	$	168,094	$	0
Obligations of U.S. Government sponsored entities	523,543		0		523,543		0
Obligations of U.S. states and political subdivisions	82,047		0		82,047		0
Mortgage-backed securities – residential, issued by:
U.S. Government agencies	48,942		0		48,942		0
U.S. Government sponsored entities	643,135		0		643,135		0
U.S. corporate debt securities	2,242		0		2,242		0
Total Available-for-sale debt securities	$	1,468,003	$	0	$	1,468,003	$	0
Equity securities, at fair value	$	778	$	0	$	0	$	778
Derivatives designated as hedging instruments	3,420		0		3,420		0
Liabilities
Derivatives not designated as hedging instruments	$	18	$	0	$	18	$	0

Recurring Fair Value Measurements
December 31, 2022
(In thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Assets
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
Liabilities
Derivatives not designated as hedging instruments	$	21	$	0	$	21	$	0

Schedule of assets measured at fair value on nonrecurring basis

Three months ended June 30, 2023
(In thousands)			Fair value measurements at reporting date using:						Gain (losses) from fair value changes
Assets:	As of 06/30/2023		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Three months ended 06/30/2023
Individually evaluated loans	$	8,822	$	0	$	0	$	8,822	$	0

Three months ended June 30, 2022
(In thousands)			Fair value measurements at reporting date using:						Gain (losses) from fair value changes
Assets:	As of 06/30/2022		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		06/30/2022
Individually evaluated loans	$	814	$	0	$	0	$	814	$	59
Other real estate owned	33		0		33		0		0

Six months ended June 30, 2023
(In thousands)			Fair value measurements at reporting date using:						Gain (losses) from fair value changes
Assets:	As of 06/30/2023		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Six months ended 06/30/2023
Individually evaluated loans	$	8,822	$	0	$	0	$	8,822	$	826
Other real estate owned	36		0		0		36		22

Six months ended June 30, 2022
(In thousands)			Fair value measurements at reporting date using:						Gain (losses) from fair value changes
Assets:	As of 06/30/2022		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Six months ended 06/30/2022
Individually evaluated loans	$	1,320	$	0	$	0	$	1,320	$	59
Other real estate owned	33		0		33		0		22

Schedule of carrying amount and estimated fair value of financial instruments

The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments at June 30, 2023 and December 31, 2022. The carrying amounts shown in the table are included in the Consolidated Statements of Condition under the indicated captions.

Estimated Fair Value of Financial Instruments
June 30, 2023
(In thousands)	Carrying Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
Financial Assets:
Cash and cash equivalents	$	81,614	$	81,614	$	81,614	$	0	$	0
Securities - held-to-maturity	312,369		262,444		0		262,444		0
FHLB and other stock	23,649		23,649		0		23,649		0
Accrued interest receivable	24,147		24,147		0		24,147		0
Loans/leases, net1	5,303,820		4,920,418		0		0		4,920,418
Financial Liabilities:
Time deposits	$	770,594	$	757,593	$	0	$	757,593	$	0
Other deposits	5,684,057		5,684,057		0		5,684,057		0
Fed funds purchased and securities sold
under agreements to repurchase	50,483		50,483		0		50,483		0
Other borrowings	387,100		384,013		0		384,013		0
Accrued interest payable	2,162		2,162		0		2,162		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
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)

6 Months Ended

Jun. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Fair Value Hedging Instruments, Statements of Financial Performance and Financial Position, Location

As of June 30, 2023, the following amounts were recorded on the balance sheet related to cumulative basis adjustment for fair value hedges. As of December 31, 2022, there no balances for Fixed Rate Loans.

Line Item in the Statement of Financial Position in Which the Hedged Item is Included	Carrying Amount of the Hedged Assets/(Liabilities)	Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets/(Liabilities)
	June 30, 2023	June 30, 2023
Fixed Rate Loans1	$146,680	$(3,320)
Total	$146,680	$(3,320)
1 These amounts include the amortized cost basis of closed portfolios of fixed rate loans used to designate hedging relationships in which the hedged item is the stated amount of assets in the closed portfolio anticipated to be outstanding for the designated hedged period. At June 30, 2023, the amortized cost basis of the closed portfolios used in these hedging relationships was $795.6 million; the cumulative basis adjustments associated with these hedging relationships was $3.3 million; and the amounts of the designated hedged items were $150 million.

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

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 June 30, 2023 and December 31, 2022. The Company began entering into derivative transactions in the second quarter of 2022. Amounts below are presented on a net basis in accordance with applicable accounting guidance.

Derivative Assets
	June 30, 2023
	Notional		Balance Sheet	Fair
(In thousands)	Amount		Location	Value*
Derivatives designated as hedging instruments
Interest Rate Products	$	150,000	Other Assets	$	3,420
Total derivatives designated as hedging instruments				$	3,420
*The Fair Value reported for June 30, 2023 includes $121,000 of accrued interest receivable.

Derivative Assets
	December 31, 2022
	Notional		Balance Sheet	Fair
(In thousands)	Amount		Location	Value
Derivatives designated as hedging instruments
Interest Rate Products	$	0	Other Assets	$	0
Total derivatives designated as hedging instruments				$	0

Derivative Liabilities
	June 30, 2023
	Notional		Balance Sheet	Fair
(In thousands)	Amount		Location	Value
Derivatives not designated as hedging instruments
Risk Participation Agreement	$	7,499	Other Liabilities	$	18
Total derivatives not designated as hedging instruments				$	18

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

Schedule of Cash Flow Hedging Instruments, Statements of Financial Performance and Financial Position, Location

The table below presents the effect of the Company’s derivative financial instruments on the consolidated statements of income as of June 30, 2023:

The Effect of Fair Value and Cash Flow Hedge Accounting on the Statement of Financial Performance
	Location of Gain or (Loss) Recognized in Income on Derivative
	Three Months Ended June 30, 2023		Three Months Ended June 30, 2022
(In thousands)	Interest Income
Total amounts of income and expense line items presented in the statement of financial performance in which the effects of fair value or cash flow hedges are recorded	$	305	$	0
The effects of fair value and cash flow hedging:
Gain or (loss) on fair value hedging relationships in Subtopic 815-20
Interest contracts
Hedged items	(3,320)		0
Derivatives designated as hedging instruments	3,625		0

The Effect of Fair Value and Cash Flow Hedge Accounting on the Statement of Financial Performance
	Location of Gain or (Loss) Recognized in Income on Derivative
	Six Months Ended June 30, 2023		Six Months Ended June 30, 2022
(In thousands)	Interest Income
Total amounts of income and expense line items presented in the statement of financial performance in which the effects of fair value or cash flow hedges are recorded	$	305	$	0
The effects of fair value and cash flow hedging:
Gain or (loss) on fair value hedging relationships in Subtopic 815-20
Interest contracts
Hedged items	(3,320)		0
Derivatives designated as hedging instruments	3,625		0

Derivative Instruments, Gain (Loss)

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 and six months ended June 30, 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		Amount of Gain or (Loss) Recognized in Income on Derivative
		Three Months Ended
(In thousands)		June 30, 2023		June 30, 2022
Risk Participation Agreement	Other income / (expense)	$	8	$	41
Total		$	8	$	41

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		Amount of Gain or (Loss) Recognized in Income on Derivative
		Six Months Ended
(In thousands)		June 30, 2023		June 30, 2022
Risk Participation Agreement	Other income / (expense)	$	2	$	41
Total		$	2	$	41

XML

Business (Details)	6 Months Ended
	Jun. 30, 2023 subsidiary_Bank
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of wholly owned subsidiaries	1

XML

Securities - Schedule of Available-for-Sales Securities (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 1,688,051	$ 1,831,791
Gross Unrealized Gains	10	20
Gross Unrealized Losses	220,058	236,844
Fair Value	1,468,003	1,594,967
U.S. Treasuries
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	190,275	190,170
Gross Unrealized Gains	0	0
Gross Unrealized Losses	22,181	22,919
Fair Value	168,094	167,251
Obligations of U.S. Government sponsored entities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	592,694	681,192
Gross Unrealized Gains	0	0
Gross Unrealized Losses	69,151	80,025
Fair Value	523,543	601,167
Obligations of U.S. states and political subdivisions
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	90,330	93,599
Gross Unrealized Gains	1	8
Gross Unrealized Losses	8,284	8,326
Fair Value	82,047	85,281
U.S. Government agencies
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	54,852	58,727
Gross Unrealized Gains	9	12
Gross Unrealized Losses	5,919	6,071
Fair Value	48,942	52,668
U.S. Government sponsored entities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	757,400	805,603
Gross Unrealized Gains	0	0
Gross Unrealized Losses	114,265	119,381
Fair Value	643,135	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	258	122
Fair Value	$ 2,242	$ 2,378

XML

Securities - Schedule of Held-to-Maturity Securities (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	$ 312,369	$ 312,344
Gross Unrealized Gains	0	0
Gross Unrealized Losses	49,925	50,652
Fair Value	262,444	261,692
U.S. Treasuries
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	86,370	86,478
Gross Unrealized Gains	0	0
Gross Unrealized Losses	12,598	12,937
Fair Value	73,772	73,541
Obligations of U.S. Government sponsored entities
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	225,999	225,866
Gross Unrealized Gains	0	0
Gross Unrealized Losses	37,327	37,715
Fair Value	$ 188,672	$ 188,151

XML

Securities - Narrative (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Realized gains on available-for-sale debt securities	$ 0		$ 0
Available-for-Sale securities sold	80,900,000
Realized losses on available-for-sale debt securities	7,100,000	$ 0	7,100,000	$ 0
Proceeds from sales of available-for-sale debt securities	73,800,000	0	73,832,000	0
Realized gains on called available-for-sale debt securities	0	0	0	0
Realized gains (losses) on equity securities, net	(12,000)	$ (36,700)	1,000	$ (83,700)
Federal Home Loan Bank New York (FHLBNY)
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Holdings of FHLBNY, FHLBPITT and ACBB stock, amount of advances	23,600,000		23,600,000
Atlantic Central Bankers Bank (ACBB)
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Holdings of FHLBNY, FHLBPITT and ACBB stock, amount of advances	$ 95,000		$ 95,000

XML

Securities - Schedule of Available-for-sale Securities with Unrealized Losses (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Available-for-sale securities
Fair Value, Less than 12 Months	$ 73,999	$ 428,669
Unrealized Losses, Less than 12 Months	2,495	30,152
Fair Value, 12 Months or Longer	1,393,557	1,160,723
Unrealized Losses, 12 Months or Longer	217,563	206,692
Fair Value	1,467,556	1,589,392
Unrealized Losses	220,058	236,844
U.S. Treasuries
Available-for-sale securities
Fair Value, Less than 12 Months	0	28,602
Unrealized Losses, Less than 12 Months	0	2,132
Fair Value, 12 Months or Longer	168,094	138,649
Unrealized Losses, 12 Months or Longer	22,181	20,787
Fair Value	168,094	167,251
Unrealized Losses	22,181	22,919
Obligations of U.S. Government sponsored entities
Available-for-sale securities
Fair Value, Less than 12 Months	28,596	143,794
Unrealized Losses, Less than 12 Months	758	7,508
Fair Value, 12 Months or Longer	494,947	457,373
Unrealized Losses, 12 Months or Longer	68,393	72,517
Fair Value	523,543	601,167
Unrealized Losses	69,151	80,025
Obligations of U.S. states and political subdivisions
Available-for-sale securities
Fair Value, Less than 12 Months	26,104	46,638
Unrealized Losses, Less than 12 Months	756	2,385
Fair Value, 12 Months or Longer	55,842	33,435
Unrealized Losses, 12 Months or Longer	7,528	5,941
Fair Value	81,946	80,073
Unrealized Losses	8,284	8,326
U.S. Government agencies
Available-for-sale securities
Fair Value, Less than 12 Months	6,244	22,945
Unrealized Losses, Less than 12 Months	254	1,258
Fair Value, 12 Months or Longer	42,351	29,356
Unrealized Losses, 12 Months or Longer	5,665	4,813
Fair Value	48,595	52,301
Unrealized Losses	5,919	6,071
U.S. Government sponsored entities
Available-for-sale securities
Fair Value, Less than 12 Months	13,055	186,690
Unrealized Losses, Less than 12 Months	727	16,869
Fair Value, 12 Months or Longer	630,081	499,532
Unrealized Losses, 12 Months or Longer	113,538	102,512
Fair Value	643,136	686,222
Unrealized Losses	114,265	119,381
U.S. corporate debt securities
Available-for-sale securities
Fair Value, Less than 12 Months	0	0
Unrealized Losses, Less than 12 Months	0	0
Fair Value, 12 Months or Longer	2,242	2,378
Unrealized Losses, 12 Months or Longer	258	122
Fair Value	2,242	2,378
Unrealized Losses	$ 258	$ 122

XML

Securities - Schedule of Held-to-maturity Securities with Unrealized Losses (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Schedule of Held-to-maturity Securities [Line Items]
Fair Value, Less than 12 Months	$ 8,176	$ 24,543
Unrealized Losses, Less than 12 Months	751	3,903
Fair Value, 12 Months or Longer	254,268	237,149
Unrealized Losses, 12 Months or Longer	49,174	46,749
Fair Value	262,444	261,692
Unrealized Losses	49,925	50,652
U.S. Treasuries
Schedule of Held-to-maturity Securities [Line Items]
Fair Value, Less than 12 Months	0	0
Unrealized Losses, Less than 12 Months	0	0
Fair Value, 12 Months or Longer	73,772	73,542
Unrealized Losses, 12 Months or Longer	12,598	12,937
Fair Value	73,772	73,542
Unrealized Losses	12,598	12,937
Obligations of U.S. Government sponsored entities
Schedule of Held-to-maturity Securities [Line Items]
Fair Value, Less than 12 Months	8,176	24,543
Unrealized Losses, Less than 12 Months	751	3,903
Fair Value, 12 Months or Longer	180,496	163,607
Unrealized Losses, 12 Months or Longer	36,576	33,812
Fair Value	188,672	188,150
Unrealized Losses	$ 37,327	$ 37,715

XML

Securities - Schedule of Available-for-Sales Securities Amortized Cost and Estimated Fair Value (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Amortized Cost
Total	$ 875,799	$ 967,461
Mortgage-backed securities	812,252	864,330
Amortized Cost	1,688,051	1,831,791
Fair Value
Total	775,926	856,077
Mortgage-backed securities	692,077	738,890
Fair Value	1,468,003	1,594,967
Available-for-sale securities
Amortized Cost
Due in one year or less	47,677	50,922
Due after one year through five years	514,770	508,880
Due after five years through ten years	269,157	367,743
Due after ten years	44,195	39,916
Fair Value
Due in one year or less	46,893	50,269
Due after one year through five years	461,320	459,721
Due after five years through ten years	230,292	314,408
Due after ten years	$ 37,421	$ 31,679

XML

Securities - Schedule of Held-to-Maturity Securities Amortized Cost and Estimated Fair Value (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Amortized Cost
Due after five years through ten years	$ 312,369	$ 312,344
Amortized Cost	312,369	312,344
Fair Value
Due after five years through ten years	262,444	261,692
Total held-to-maturity debt securities	$ 262,444	$ 261,692

XML

Loans and Leases - Schedule of Loans and Leases (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	$ 5,357,425	$ 5,273,658
Less: unearned income and deferred costs and fees	(5,060)	(4,747)
Total loans and leases, net of unearned income and deferred costs and fees	5,352,365	5,268,911
Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	766,434	791,529
Commercial and industrial | Agriculture
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	64,815	85,073
Total loans and leases, net of unearned income and deferred costs and fees	64,815	85,073
Commercial and industrial | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	701,006	705,700
Total loans and leases, net of unearned income and deferred costs and fees	701,006	705,700
Commercial and industrial | PPP loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	613	756
Total loans and leases, net of unearned income and deferred costs and fees	613	756
Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	2,952,829	2,853,418
Commercial real estate | Agriculture
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	215,915	214,963
Total loans and leases, net of unearned income and deferred costs and fees	215,915	214,963
Commercial real estate | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	2,487,067	2,437,339
Total loans and leases, net of unearned income and deferred costs and fees	2,487,067	2,437,339
Commercial real estate | Construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	249,847	201,116
Total loans and leases, net of unearned income and deferred costs and fees	249,847	201,116
Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	1,533,977	1,534,941
Residential real estate | Home equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	185,529	188,623
Total loans and leases, net of unearned income and deferred costs and fees	185,529	188,623
Residential real estate | Mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	1,348,448	1,346,318
Total loans and leases, net of unearned income and deferred costs and fees	1,348,448	1,346,318
Consumer and other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	87,213	77,636
Consumer and other | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	85,794	75,412
Consumer and other | Indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	1,419	2,224
Total loans and leases, net of unearned income and deferred costs and fees	1,419	2,224
Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases	$ 16,972	$ 16,134

XML

Loans and Leases - Schedule of Past Due Loans and Leases (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Financing Receivable, Past Due [Line Items]
Total loans and leases	$ 5,357,425	$ 5,273,658
Less: unearned income and deferred costs and fees	(5,060)	(4,747)
Total loans and leases, net of unearned income and deferred costs and fees	5,352,365	5,268,911
30-59 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	731	2,537
Less: unearned income and deferred costs and fees	0	0
60-89 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	19,524	635
Less: unearned income and deferred costs and fees	0	0
90 Days or More
Financing Receivable, Past Due [Line Items]
Total loans and leases	21,542	20,126
Less: unearned income and deferred costs and fees	0	0
Total Past Due
Financing Receivable, Past Due [Line Items]
Total loans and leases	41,797	23,298
Less: unearned income and deferred costs and fees	0	0
Current Loans
Financing Receivable, Past Due [Line Items]
Total loans and leases	5,315,628	5,250,360
Less: unearned income and deferred costs and fees	(5,060)	(4,747)
Total loans and leases, net of unearned income and deferred costs and fees	5,310,568	5,245,613
Commercial and industrial
Financing Receivable, Past Due [Line Items]
Total loans and leases	766,434	791,529
Commercial and industrial | 30-59 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	60	108
Commercial and industrial | 60-89 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	2,319	381
Commercial and industrial | 90 Days or More
Financing Receivable, Past Due [Line Items]
Total loans and leases	2,704	82
Commercial and industrial | Total Past Due
Financing Receivable, Past Due [Line Items]
Total loans and leases	5,083	571
Commercial and industrial | Current Loans
Financing Receivable, Past Due [Line Items]
Total loans and leases	761,351	790,958
Commercial and industrial | Agriculture
Financing Receivable, Past Due [Line Items]
Total loans and leases	64,815	85,073
Total loans and leases, net of unearned income and deferred costs and fees	64,815	85,073
Commercial and industrial | Agriculture | 30-59 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	0	58
Commercial and industrial | Agriculture | 60-89 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	53	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	53	58
Commercial and industrial | Agriculture | Current Loans
Financing Receivable, Past Due [Line Items]
Total loans and leases	64,762	85,015
Commercial and industrial | Other
Financing Receivable, Past Due [Line Items]
Total loans and leases	701,006	705,700
Total loans and leases, net of unearned income and deferred costs and fees	701,006	705,700
Commercial and industrial | Other | 30-59 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	60	50
Commercial and industrial | Other | 60-89 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	2,266	381
Commercial and industrial | Other | 90 Days or More
Financing Receivable, Past Due [Line Items]
Total loans and leases	2,704	82
Commercial and industrial | Other | Total Past Due
Financing Receivable, Past Due [Line Items]
Total loans and leases	5,030	513
Commercial and industrial | Other | Current Loans
Financing Receivable, Past Due [Line Items]
Total loans and leases	695,976	705,187
Commercial and industrial | PPP loans
Financing Receivable, Past Due [Line Items]
Total loans and leases	613	756
Total loans and leases, net of unearned income and deferred costs and fees	613	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	613	756
Commercial real estate
Financing Receivable, Past Due [Line Items]
Total loans and leases	2,952,829	2,853,418
Commercial real estate | 30-59 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	165	128
Commercial real estate | 60-89 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	15,473	0
Commercial real estate | 90 Days or More
Financing Receivable, Past Due [Line Items]
Total loans and leases	9,405	11,449
Commercial real estate | Total Past Due
Financing Receivable, Past Due [Line Items]
Total loans and leases	25,043	11,577
Commercial real estate | Current Loans
Financing Receivable, Past Due [Line Items]
Total loans and leases	2,927,786	2,841,841
Commercial real estate | Agriculture
Financing Receivable, Past Due [Line Items]
Total loans and leases	215,915	214,963
Total loans and leases, net of unearned income and deferred costs and fees	215,915	214,963
Commercial real estate | Agriculture | 30-59 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	165	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	165	128
Commercial real estate | Agriculture | Current Loans
Financing Receivable, Past Due [Line Items]
Total loans and leases	215,750	214,835
Commercial real estate | Other
Financing Receivable, Past Due [Line Items]
Total loans and leases	2,487,067	2,437,339
Total loans and leases, net of unearned income and deferred costs and fees	2,487,067	2,437,339
Commercial real estate | Other | 30-59 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	0	0
Commercial real estate | Other | 60-89 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	15,408	0
Commercial real estate | Other | 90 Days or More
Financing Receivable, Past Due [Line Items]
Total loans and leases	9,405	11,449
Commercial real estate | Other | Total Past Due
Financing Receivable, Past Due [Line Items]
Total loans and leases	24,813	11,449
Commercial real estate | Other | Current Loans
Financing Receivable, Past Due [Line Items]
Total loans and leases	2,462,254	2,425,890
Commercial real estate | Construction
Financing Receivable, Past Due [Line Items]
Total loans and leases	249,847	201,116
Total loans and leases, net of unearned income and deferred costs and fees	249,847	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	65	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	65	0
Commercial real estate | Construction | Current Loans
Financing Receivable, Past Due [Line Items]
Total loans and leases	249,782	201,116
Residential real estate
Financing Receivable, Past Due [Line Items]
Total loans and leases	1,533,977	1,534,941
Residential real estate | 30-59 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	333	2,183
Residential real estate | 60-89 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	1,588	204
Residential real estate | 90 Days or More
Financing Receivable, Past Due [Line Items]
Total loans and leases	9,251	8,430
Residential real estate | Total Past Due
Financing Receivable, Past Due [Line Items]
Total loans and leases	11,172	10,817
Residential real estate | Current Loans
Financing Receivable, Past Due [Line Items]
Total loans and leases	1,522,805	1,524,124
Residential real estate | Home equity
Financing Receivable, Past Due [Line Items]
Total loans and leases	185,529	188,623
Total loans and leases, net of unearned income and deferred costs and fees	185,529	188,623
Residential real estate | Home equity | 30-59 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	333	435
Residential real estate | Home equity | 60-89 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	588	204
Residential real estate | Home equity | 90 Days or More
Financing Receivable, Past Due [Line Items]
Total loans and leases	1,110	1,628
Residential real estate | Home equity | Total Past Due
Financing Receivable, Past Due [Line Items]
Total loans and leases	2,031	2,267
Residential real estate | Home equity | Current Loans
Financing Receivable, Past Due [Line Items]
Total loans and leases	183,498	186,356
Residential real estate | Mortgages
Financing Receivable, Past Due [Line Items]
Total loans and leases	1,348,448	1,346,318
Total loans and leases, net of unearned income and deferred costs and fees	1,348,448	1,346,318
Residential real estate | Mortgages | 30-59 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	0	1,748
Residential real estate | Mortgages | 60-89 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	1,000	0
Residential real estate | Mortgages | 90 Days or More
Financing Receivable, Past Due [Line Items]
Total loans and leases	8,141	6,802
Residential real estate | Mortgages | Total Past Due
Financing Receivable, Past Due [Line Items]
Total loans and leases	9,141	8,550
Residential real estate | Mortgages | Current Loans
Financing Receivable, Past Due [Line Items]
Total loans and leases	1,339,307	1,337,768
Consumer and other
Financing Receivable, Past Due [Line Items]
Total loans and leases	87,213	77,636
Consumer and other | 30-59 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	173	118
Consumer and other | 60-89 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	144	50
Consumer and other | 90 Days or More
Financing Receivable, Past Due [Line Items]
Total loans and leases	182	165
Consumer and other | Total Past Due
Financing Receivable, Past Due [Line Items]
Total loans and leases	499	333
Consumer and other | Current Loans
Financing Receivable, Past Due [Line Items]
Total loans and leases	86,714	77,303
Consumer and other | Other
Financing Receivable, Past Due [Line Items]
Total loans and leases	85,794	75,412
Consumer and other | Other | 30-59 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	160	52
Consumer and other | Other | 60-89 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	119	19
Consumer and other | Other | 90 Days or More
Financing Receivable, Past Due [Line Items]
Total loans and leases	138	112
Consumer and other | Other | Total Past Due
Financing Receivable, Past Due [Line Items]
Total loans and leases	417	183
Consumer and other | Other | Current Loans
Financing Receivable, Past Due [Line Items]
Total loans and leases	85,377	75,229
Consumer and other | Indirect
Financing Receivable, Past Due [Line Items]
Total loans and leases	1,419	2,224
Total loans and leases, net of unearned income and deferred costs and fees	1,419	2,224
Consumer and other | Indirect | 30-59 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	13	66
Consumer and other | Indirect | 60-89 Days
Financing Receivable, Past Due [Line Items]
Total loans and leases	25	31
Consumer and other | Indirect | 90 Days or More
Financing Receivable, Past Due [Line Items]
Total loans and leases	44	53
Consumer and other | Indirect | Total Past Due
Financing Receivable, Past Due [Line Items]
Total loans and leases	82	150
Consumer and other | Indirect | Current Loans
Financing Receivable, Past Due [Line Items]
Total loans and leases	1,337	2,074
Leases
Financing Receivable, Past Due [Line Items]
Total loans and leases	16,972	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	$ 16,972	$ 16,134

XML

Loans and Leases - Nonaccrual Loans (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans and Leases with no ACL	$ 9,334,000		$ 9,334,000		$ 15,193,000
Nonaccrual Loans and Leases	31,333,000		31,333,000		28,289,000
Loans and Leases Past Due Over 89 Days and Accruing	34,000		34,000		25,000
Interest on nonaccrual loans	0	$ 0	0	$ 0
Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans and Leases with no ACL	2,494,000		2,494,000		411,000
Nonaccrual Loans and Leases	3,146,000		3,146,000		618,000
Loans and Leases Past Due Over 89 Days and Accruing	0		0		25,000
Commercial and industrial | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans and Leases with no ACL	2,494,000		2,494,000		411,000
Nonaccrual Loans and Leases	3,146,000		3,146,000		618,000
Loans and Leases Past Due Over 89 Days and Accruing	0		0		25,000
Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans and Leases with no ACL	6,659,000		6,659,000		13,287,000
Nonaccrual Loans and Leases	11,655,000		11,655,000		13,858,000
Loans and Leases Past Due Over 89 Days and Accruing	0		0		0
Commercial real estate | Agriculture
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans and Leases with no ACL	0		0		186,000
Nonaccrual Loans and Leases	179,000		179,000		186,000
Loans and Leases Past Due Over 89 Days and Accruing	0		0		0
Commercial real estate | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans and Leases with no ACL	6,659,000		6,659,000		13,101,000
Nonaccrual Loans and Leases	11,476,000		11,476,000		13,672,000
Loans and Leases Past Due Over 89 Days and Accruing	0		0		0
Residential real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans and Leases with no ACL	181,000		181,000		1,495,000
Nonaccrual Loans and Leases	16,209,000		16,209,000		13,544,000
Loans and Leases Past Due Over 89 Days and Accruing	7,000		7,000		0
Residential real estate | Home equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans and Leases with no ACL	0		0		318,000
Nonaccrual Loans and Leases	2,891,000		2,891,000		2,391,000
Loans and Leases Past Due Over 89 Days and Accruing	0		0		0
Residential real estate | Mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans and Leases with no ACL	181,000		181,000		1,177,000
Nonaccrual Loans and Leases	13,318,000		13,318,000		11,153,000
Loans and Leases Past Due Over 89 Days and Accruing	7,000		7,000		0
Consumer and other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans and Leases with no ACL	0		0		0
Nonaccrual Loans and Leases	323,000		323,000		269,000
Loans and Leases Past Due Over 89 Days and Accruing	27,000		27,000		0
Consumer and other | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans and Leases with no ACL	0		0		0
Nonaccrual Loans and Leases	236,000		236,000		175,000
Loans and Leases Past Due Over 89 Days and Accruing	27,000		27,000		0
Consumer and other | Indirect
Accounts, Notes, Loans and Financing Receivable [Line Items]
Nonaccrual Loans and Leases with no ACL	0		0		0
Nonaccrual Loans and Leases	87,000		87,000		94,000
Loans and Leases Past Due Over 89 Days and Accruing	$ 0		$ 0		$ 0

XML

Allowance for Credit Losses - Schedule of Detail in Allowance for Loan and Lease Losses (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	$ 46,099	$ 42,126	$ 45,934	$ 42,843
Charge-offs	(169)	(156)	(277)	(402)
Recoveries	196	1,043	1,585	1,306
Provision (credit) for credit loss expense	2,419	780	1,239	46
Ending balance	48,545	43,793	48,545	43,793
Cumulative Effect, Period of Adoption, 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	6,316	7,027	6,039	6,335
Charge-offs	0	0	0	(23)
Recoveries	13	6	59	26
Provision (credit) for credit loss expense	356	781	585	1,476
Ending balance	6,685	7,814	6,685	7,814
Commercial and industrial | Cumulative Effect, Period of Adoption, 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	27,186	22,982	27,287	24,813
Charge-offs	0	(23)	0	(50)
Recoveries	(9)
Recoveries		764	1,237	805
Provision (credit) for credit loss expense	1,791	(496)	428	(2,341)
Ending balance	28,968	23,227	28,968	23,227
Commercial real estate | Cumulative Effect, Period of Adoption, 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	10,858	10,447	11,154	10,139
Charge-offs	0	(51)	(2)	(51)
Recoveries	114	197	178	307
Provision (credit) for credit loss expense	139	489	(265)	687
Ending balance	11,111	11,082	11,111	11,082
Residential real estate | Cumulative Effect, Period of Adoption, 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	1,628	1,588	1,358	1,492
Charge-offs	(169)	(82)	(275)	(278)
Recoveries	78	76	111	168
Provision (credit) for credit loss expense	143	9	486	209
Ending balance	1,680	1,591	1,680	1,591
Consumer and other | Cumulative Effect, Period of Adoption, Adjustment
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance			0
Finance Leases
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	111	82	96	64
Charge-offs	0	0	0	0
Recoveries	0	0	0	0
Provision (credit) for credit loss expense	(10)	(3)	5	15
Ending balance	$ 101	$ 79	101	$ 79
Finance Leases | Cumulative Effect, Period of Adoption, Adjustment
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance			$ 0

XML

Allowance for Credit Losses - Liabilities for Off-Balance Sheet Credit Exposures (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Off-Balance-Sheet, Credit Loss, Liability [Roll Forward]
Liabilities for off-balance sheet credit exposures at beginning of period	$ 3,151	$ 2,720	$ 2,796	$ 2,506
Provision (credit) for credit loss expense related to off-balance sheet credit exposures	(166)	76	189	290
Liabilities for off-balance sheet credit exposures at end of period	$ 2,985	$ 2,796	$ 2,985	$ 2,796

XML

Allowance for Credit Losses - Collateral Dependent Loans (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	$ 12,821	$ 15,660
ACL Allocation	1,082	3
Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	12,821	15,554
Business Assets
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	0	28
Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	0	78
Commercial and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	2,494	670
ACL Allocation	0	0
Commercial and industrial | Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	2,494	642
Commercial and industrial | Business Assets
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	0	28
Commercial and industrial | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	0	0
Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	10,146	13,287
ACL Allocation	1,082	0
Commercial real estate | Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	10,146	13,209
Commercial real estate | Business Assets
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	0	0
Commercial real estate | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	0	78
Commercial Real Estate - Agriculture
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment		1,515
ACL Allocation		0
Commercial Real Estate - Agriculture | Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment		1,515
Commercial Real Estate - Agriculture | Business Assets
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment		0
Commercial Real Estate - Agriculture | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment		0
Residential Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	181	188
ACL Allocation	0	3
Residential Real Estate | Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	181	188
Residential Real Estate | Business Assets
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	0	0
Residential Real Estate | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	$ 0	$ 0

XML

Allowance for Credit Losses - Credit Quality Indicators by Commercial and Industrial Loans (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans and leases, net of unearned income and deferred costs and fees	$ 5,352,365	$ 5,268,911
Commercial and industrial | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current fiscal year	54,166	124,190
One year before current fiscal year	110,845	80,099
Two years before current fiscal year	76,199	39,021
Three years before current fiscal year	34,671	41,711
Four years before current fiscal year	40,068	34,242
Prior	171,727	157,921
Revolving Loans Amortized Cost Basis	210,376	222,050
Revolving Loans Converted to Term	2,954	6,466
Total loans and leases, net of unearned income and deferred costs and fees	701,006	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 | Other | Pass
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current fiscal year	54,166	124,190
One year before current fiscal year	110,845	79,861
Two years before current fiscal year	75,993	38,158
Three years before current fiscal year	33,954	41,391
Four years before current fiscal year	39,929	33,238
Prior	169,064	156,038
Revolving Loans Amortized Cost Basis	203,109	215,890
Revolving Loans Converted to Term	2,954	6,466
Total loans and leases, net of unearned income and deferred costs and fees	690,014	695,232
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	112	421
Three years before current fiscal year	297	285
Four years before current fiscal year	113	271
Prior	1,488	1,380
Revolving Loans Amortized Cost Basis	771	501
Revolving Loans Converted to Term	0	0
Total loans and leases, net of unearned income and deferred costs and fees	2,781	2,985
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	94	442
Three years before current fiscal year	420	35
Four years before current fiscal year	26	733
Prior	1,175	503
Revolving Loans Amortized Cost Basis	6,496	5,659
Revolving Loans Converted to Term	0	0
Total loans and leases, net of unearned income and deferred costs and fees	8,211	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	350	340
Three years before current fiscal year	263	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 and leases, net of unearned income and deferred costs and fees	613	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	350	340
Three years before current fiscal year	263	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 and leases, net of unearned income and deferred costs and fees	613	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 and leases, net of unearned income and deferred costs and fees	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 and leases, net of unearned income and deferred costs and fees	0	0
Commercial and industrial | Agriculture
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current fiscal year	5,774	16,694
One year before current fiscal year	13,555	4,178
Two years before current fiscal year	3,807	5,015
Three years before current fiscal year	3,966	4,186
Four years before current fiscal year	3,559	7,734
Prior	10,463	4,899
Revolving Loans Amortized Cost Basis	23,347	42,152
Revolving Loans Converted to Term	344	215
Total loans and leases, net of unearned income and deferred costs and fees	64,815	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	5,774	16,694
One year before current fiscal year	13,555	4,120
Two years before current fiscal year	3,754	4,944
Three years before current fiscal year	3,903	4,186
Four years before current fiscal year	3,559	7,734
Prior	10,452	4,883
Revolving Loans Amortized Cost Basis	23,314	42,097
Revolving Loans Converted to Term	344	215
Total loans and leases, net of unearned income and deferred costs and fees	64,655	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	53	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	30	50
Revolving Loans Converted to Term	0	0
Total loans and leases, net of unearned income and deferred costs and fees	83	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	63	0
Four years before current fiscal year	0	0
Prior	11	16
Revolving Loans Amortized Cost Basis	3	5
Revolving Loans Converted to Term	0	0
Total loans and leases, net of unearned income and deferred costs and fees	77	92
Commercial real estate | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current fiscal year	89,762	343,032
One year before current fiscal year	339,691	370,620
Two years before current fiscal year	365,493	313,295
Three years before current fiscal year	316,778	294,443
Four years before current fiscal year	289,424	207,263
Prior	1,048,437	873,145
Revolving Loans Amortized Cost Basis	31,545	11,038
Revolving Loans Converted to Term	5,937	24,503
Total loans and leases, net of unearned income and deferred costs and fees	2,487,067	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 | Other | Pass
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current fiscal year	89,762	342,311
One year before current fiscal year	323,682	367,104
Two years before current fiscal year	363,357	311,607
Three years before current fiscal year	315,106	279,587
Four years before current fiscal year	275,367	203,016
Prior	978,544	812,563
Revolving Loans Amortized Cost Basis	30,045	10,906
Revolving Loans Converted to Term	5,937	24,503
Total loans and leases, net of unearned income and deferred costs and fees	2,381,800	2,351,597
Commercial real estate | Other | Special Mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current fiscal year	0	643
One year before current fiscal year	640	3,406
Two years before current fiscal year	2,028	1,688
Three years before current fiscal year	1,672	11,462
Four years before current fiscal year	11,142	2,555
Prior	35,097	25,361
Revolving Loans Amortized Cost Basis	1,384	0
Revolving Loans Converted to Term	0	0
Total loans and leases, net of unearned income and deferred costs and fees	51,963	45,115
Commercial real estate | Other | Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current fiscal year	0	78
One year before current fiscal year	15,369	110
Two years before current fiscal year	108	0
Three years before current fiscal year	0	3,394
Four years before current fiscal year	2,915	1,692
Prior	34,796	35,221
Revolving Loans Amortized Cost Basis	116	132
Revolving Loans Converted to Term	0	0
Total loans and leases, net of unearned income and deferred costs and fees	53,304	40,627
Commercial real estate | Agriculture
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current fiscal year	7,532	33,241
One year before current fiscal year	34,610	24,125
Two years before current fiscal year	23,534	22,831
Three years before current fiscal year	22,303	26,163
Four years before current fiscal year	25,089	37,873
Prior	99,286	66,364
Revolving Loans Amortized Cost Basis	1,165	3,131
Revolving Loans Converted to Term	2,396	1,235
Total loans and leases, net of unearned income and deferred costs and fees	215,915	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	7,532	33,241
One year before current fiscal year	34,610	24,125
Two years before current fiscal year	23,534	22,831
Three years before current fiscal year	22,303	25,576
Four years before current fiscal year	24,520	37,835
Prior	98,149	65,112
Revolving Loans Amortized Cost Basis	1,165	3,131
Revolving Loans Converted to Term	2,396	1,235
Total loans and leases, net of unearned income and deferred costs and fees	214,209	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	390	0
Prior	1,088	1,142
Revolving Loans Amortized Cost Basis	0	0
Revolving Loans Converted to Term	0	0
Total loans and leases, net of unearned income and deferred costs and fees	1,478	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	179	38
Prior	49	110
Revolving Loans Amortized Cost Basis	0	0
Revolving Loans Converted to Term	0	0
Total loans and leases, net of unearned income and deferred costs and fees	228	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	40,996	75,245
Two years before current fiscal year	78,869	27,584
Three years before current fiscal year	16,481	14,842
Four years before current fiscal year	9,976	9,083
Prior	11,449	7,268
Revolving Loans Amortized Cost Basis	84,040	42,701
Revolving Loans Converted to Term	8,036	1,288
Total loans and leases, net of unearned income and deferred costs and fees	249,847	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	40,996	75,245
Two years before current fiscal year	78,869	27,584
Three years before current fiscal year	16,481	14,842
Four years before current fiscal year	9,976	9,083
Prior	11,449	7,268
Revolving Loans Amortized Cost Basis	84,040	42,701
Revolving Loans Converted to Term	8,036	1,288
Total loans and leases, net of unearned income and deferred costs and fees	249,847	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 and leases, net of unearned income and deferred costs and fees	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 and leases, net of unearned income and deferred costs and fees	0	0
Residential Real Estate | Home equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current fiscal year	1,244	3,030
One year before current fiscal year	2,363	1,062
Two years before current fiscal year	969	637
Three years before current fiscal year	583	1,006
Four years before current fiscal year	910	792
Prior	10,148	3,208
Revolving Loans Amortized Cost Basis	166,603	177,803
Revolving Loans Converted to Term	2,709	1,085
Total loans and leases, net of unearned income and deferred costs and fees	185,529	188,623
Current-period gross writeoffs
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	2
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	1,244	3,030
One year before current fiscal year	2,363	1,062
Two years before current fiscal year	969	637
Three years before current fiscal year	583	992
Four years before current fiscal year	910	792
Prior	9,697	3,183
Revolving Loans Amortized Cost Basis	164,163	175,451
Revolving Loans Converted to Term	2,709	1,085
Total loans and leases, net of unearned income and deferred costs and fees	182,638	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	451	25
Revolving Loans Amortized Cost Basis	2,440	2,352
Revolving Loans Converted to Term	0	0
Total loans and leases, net of unearned income and deferred costs and fees	2,891	2,391
Residential Real Estate | Mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current fiscal year	50,668	187,347
One year before current fiscal year	191,555	272,570
Two years before current fiscal year	265,433	240,212
Three years before current fiscal year	232,540	118,073
Four years before current fiscal year	114,521	68,157
Prior	493,731	459,959
Revolving Loans Amortized Cost Basis	0	0
Revolving Loans Converted to Term	0	0
Total loans and leases, net of unearned income and deferred costs and fees	1,348,448	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	50,668	187,129
One year before current fiscal year	191,160	272,235
Two years before current fiscal year	265,103	239,584
Three years before current fiscal year	231,672	117,391
Four years before current fiscal year	113,613	66,605
Prior	482,913	452,221
Revolving Loans Amortized Cost Basis	0	0
Revolving Loans Converted to Term	0	0
Total loans and leases, net of unearned income and deferred costs and fees	1,335,129	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	395	335
Two years before current fiscal year	330	628
Three years before current fiscal year	868	682
Four years before current fiscal year	908	1,552
Prior	10,818	7,738
Revolving Loans Amortized Cost Basis	0	0
Revolving Loans Converted to Term	0	0
Total loans and leases, net of unearned income and deferred costs and fees	13,319	11,153
Consumer and Other | Direct
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current fiscal year	31,859	31,243
One year before current fiscal year	15,191	13,999
Two years before current fiscal year	12,738	7,375
Three years before current fiscal year	6,305	6,231
Four years before current fiscal year	5,452	4,462
Prior	11,395	8,029
Revolving Loans Amortized Cost Basis	2,854	4,073
Revolving Loans Converted to Term	0	0
Total loans and leases, net of unearned income and deferred costs and fees	85,794	75,412
Current-period gross writeoffs
2023	155
2022	8
2021	0
2020	14
2019	36
Prior	13
Revolving Loans Amortized Cost Basis	0
Revolving Loans Converted to Term	0
Total	226
Consumer and Other | Direct | Performing
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current fiscal year	31,859	31,243
One year before current fiscal year	15,186	13,999
Two years before current fiscal year	12,737	7,372
Three years before current fiscal year	6,302	6,138
Four years before current fiscal year	5,360	4,386
Prior	11,263	8,029
Revolving Loans Amortized Cost Basis	2,851	4,070
Revolving Loans Converted to Term	0	0
Total loans and leases, net of unearned income and deferred costs and fees	85,558	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	5	0
Two years before current fiscal year	1	3
Three years before current fiscal year	3	93
Four years before current fiscal year	92	76
Prior	132	0
Revolving Loans Amortized Cost Basis	3	3
Revolving Loans Converted to Term	0	0
Total loans and leases, net of unearned income and deferred costs and fees	236	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	123	146
Three years before current fiscal year	113	1,168
Four years before current fiscal year	747	645
Prior	436	109
Revolving Loans Amortized Cost Basis	0	0
Revolving Loans Converted to Term	0	0
Total loans and leases, net of unearned income and deferred costs and fees	1,419	2,224
Current-period gross writeoffs
2023	0
2022	0
2021	0
2020	0
2019	39
Prior	10
Revolving Loans Amortized Cost Basis	0
Revolving Loans Converted to Term	0
Total	49
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	123	146
Three years before current fiscal year	113	1,092
Four years before current fiscal year	676	635
Prior	420	101
Revolving Loans Amortized Cost Basis	0	0
Revolving Loans Converted to Term	0	0
Total loans and leases, net of unearned income and deferred costs and fees	1,332	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	71	10
Prior	16	8
Revolving Loans Amortized Cost Basis	0	0
Revolving Loans Converted to Term	0	0
Total loans and leases, net of unearned income and deferred costs and fees	$ 87	$ 94

XML

Earnings Per Share - Schedule of Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Basic
Net income available to common shareholders	$ 8,475	$ 20,869	$ 27,856	$ 44,142
Less: income attributable to unvested stock-based compensation awards	(8)	(67)	(26)	(143)
Net earnings allocated to common shareholders	$ 8,467	$ 20,802	$ 27,830	$ 43,999
Weighted average shares outstanding, including unvested stock-based compensation awards (in shares)	14,502,161	14,524,975	14,511,078	14,568,102
Less: unvested stock-based compensation awards (in shares)	(188,028)	(207,560)	(190,763)	(209,633)
Weighted average shares outstanding - Basic (in shares)	14,314,133	14,317,415	14,320,315	14,358,469
Diluted
Net earnings allocated to common shareholders	$ 8,467	$ 20,802	$ 27,830	$ 43,999
Weighted average shares outstanding - Basic (in shares)	14,314,133	14,317,415	14,320,315	14,358,469
Plus: Incremental shares from assumed conversion of stock-based compensation awards (in shares)	32,654	70,186	47,866	74,183
Weighted average shares outstanding - Diluted (in shares)	14,346,787	14,387,601	14,368,181	14,432,652
Basic EPS (in dollars per share)	$ 0.59	$ 1.45	$ 1.94	$ 3.06
Diluted EPS (in dollars per share)	$ 0.59	$ 1.45	$ 1.94	$ 3.05

XML

Earnings Per Share - Narrative (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Earnings Per Share [Abstract]
Antidilutive securities excluded from computation of earning per share (in shares)	60,891	1,848	32,036	6,113

XML

Other Comprehensive Income (Loss) - Schedule of Reclassifications (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Before-Tax Amount
Net unrealized gains/losses / Other comprehensive (loss) income	$ (10,164)	$ (56,977)	$ 17,443	$ (162,787)
Tax (Expense) Benefit
Net unrealized gains/losses / Other comprehensive (loss) income	2,490	13,957	(4,274)	39,868
Net of Tax
Change in net unrealized gain (loss) during the period	(13,237)	(43,449)	7,341	(123,854)
Reclassification adjustment for net realized loss on sale of available-for-sale debt securities included in net income	5,563	429	5,828	935
Other comprehensive loss	(7,674)	(43,020)	13,169	(122,919)
Net unrealized gain/loss
Before-Tax Amount
Change in net unrealized gain (loss) during the period	(17,531)	(57,544)	9,724	(164,025)
Reclassification adjustment for net realized gain (loss) on sale of available-for-sale debt securities included in net income	7,052	0	7,052	0
Net unrealized gains/losses / Other comprehensive (loss) income	(10,479)	(57,544)	16,776	(164,025)
Tax (Expense) Benefit
Change in net unrealized gain (loss) during the period	4,294	14,095	(2,383)	40,171
Reclassification adjustment for net realized loss on sale of available-for-sale debt securities included in net income	(1,727)	0	(1,727)	0
Net unrealized gains/losses / Other comprehensive (loss) income	2,567	14,095	(4,110)	40,171
Net of Tax
Change in net unrealized gain (loss) during the period	(13,237)	(43,449)	7,341	(123,854)
Reclassification adjustment for net realized loss on sale of available-for-sale debt securities included in net income	5,325	0	5,325	0
Other comprehensive loss	(7,912)	(43,449)	12,666	(123,854)
Amortization of net retirement plan actuarial gain/loss
Before-Tax Amount
Reclassification adjustment for net realized gain (loss) on sale of available-for-sale debt securities included in net income	261	514	558	1,129
Tax (Expense) Benefit
Reclassification adjustment for net realized loss on sale of available-for-sale debt securities included in net income	(64)	(125)	(137)	(276)
Net of Tax
Reclassification adjustment for net realized loss on sale of available-for-sale debt securities included in net income	197	389	421	853
Amortization of net retirement plan prior service cost
Before-Tax Amount
Reclassification adjustment for net realized gain (loss) on sale of available-for-sale debt securities included in net income	54	53	109	109
Tax (Expense) Benefit
Reclassification adjustment for net realized loss on sale of available-for-sale debt securities included in net income	(13)	(13)	(27)	(27)
Net of Tax
Reclassification adjustment for net realized loss on sale of available-for-sale debt securities included in net income	41	40	82	82
Employee benefit plans
Before-Tax Amount
Net unrealized gains/losses / Other comprehensive (loss) income	315	567	667	1,238
Tax (Expense) Benefit
Net unrealized gains/losses / Other comprehensive (loss) income	(77)	(138)	(164)	(303)
Net of Tax
Other comprehensive loss	$ 238	$ 429	$ 503	$ 935

XML

Other Comprehensive Income (Loss) - Schedule of Activity (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balances	$ 649,765	$ 657,492	$ 617,390	$ 728,941
Other comprehensive income before reclassifications	(13,237)	(43,449)	7,341	(123,854)
Amounts reclassified from accumulated other comprehensive (loss) income	5,563	429	5,828	935
Other comprehensive loss	(7,674)	(43,020)	13,169	(122,919)
Ending balances	636,441	624,318	636,441	624,318
Available-for- Sale Debt Securities
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balances	(158,225)	(94,965)	(178,803)	(14,560)
Other comprehensive income before reclassifications	(13,237)	(43,449)	7,341	(123,854)
Amounts reclassified from accumulated other comprehensive (loss) income	5,325	0	5,325	0
Other comprehensive loss	(7,912)	(43,449)	12,666	(123,854)
Ending balances	(166,137)	(138,414)	(166,137)	(138,414)
Employee Benefit Plans
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balances	(29,621)	(40,884)	(29,886)	(41,390)
Other comprehensive income before reclassifications	0	0	0	0
Amounts reclassified from accumulated other comprehensive (loss) income	238	429	503	935
Other comprehensive loss	238	429	503	935
Ending balances	(29,383)	(40,455)	(29,383)	(40,455)
Accumulated Other Comprehensive (Loss) Income
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balances	(187,846)	(135,849)	(208,689)	(55,950)
Other comprehensive loss	(7,674)	(43,020)	13,169	(122,919)
Ending balances	$ (195,520)	$ (178,869)	$ (195,520)	$ (178,869)

XML

Other Comprehensive Income (Loss) - Schedule of Amounts Reclassified Out of Each Component (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Net (loss) gain on securities transactions	$ (7,065)	$ (37)	$ (7,052)	$ (84)
Tax (expense) benefit	(1,784)	(6,329)	(7,685)	(13,305)
Other operating expense	(14,468)	(13,029)	(27,937)	(25,049)
Total before tax	10,290	27,230	35,603	57,510
Net income attributable to Tompkins Financial Corporation	8,475	20,869	27,856	44,142
Amount Reclassified from Accumulated Other Comprehensive (Loss) Income | Available-for-sale securities
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Net (loss) gain on securities transactions	(7,052)	0	(7,052)
Tax (expense) benefit	1,727	0	1,727	0
Total before tax				0
Net income attributable to Tompkins Financial Corporation	(5,325)	0	(5,325)	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	(261)	(514)	(558)	(1,129)
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	(54)	(53)	(109)	(109)
Amount Reclassified from Accumulated Other Comprehensive (Loss) Income | Employee benefit plans
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Tax (expense) benefit	77	138	164	303
Total before tax	(315)	(567)	(667)	(1,238)
Net income attributable to Tompkins Financial Corporation	$ (238)	$ (429)	$ (503)	$ (935)

XML

Employee Benefit Plans - Schedule of Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Pension Benefits
Components of net periodic benefit cost
Service cost	$ 0	$ 0	$ 0	$ 0
Interest cost	814	529	1,637	992
Expected return on plan assets	(1,195)	(1,474)	(2,394)	(2,942)
Amortization of net retirement plan actuarial loss	274	285	578	608
Amortization of net retirement plan prior service (credit) cost	0	0	0	0
Net periodic benefit (income) cost	(107)	(660)	(179)	(1,342)
Life and Health
Components of net periodic benefit cost
Service cost	1	43	16	87
Interest cost	88	59	177	111
Expected return on plan assets	0	0	0	0
Amortization of net retirement plan actuarial loss	(13)	46	(20)	98
Amortization of net retirement plan prior service (credit) cost	(15)	(15)	(30)	(30)
Net periodic benefit (income) cost	61	133	143	266
SERP Benefits
Components of net periodic benefit cost
Service cost	7		21	39
Service cost		(13)
Interest cost	275	206	574	407
Expected return on plan assets	0	0	0	0
Amortization of net retirement plan actuarial loss	0	183	0	423
Amortization of net retirement plan prior service (credit) cost	69	68	139	139
Net periodic benefit (income) cost	$ 351	$ 444	$ 734	$ 1,008

XML

Employee Benefit Plans - Narrative (Details) - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Retirement Benefits [Abstract]
Amortization of amounts previously recognized in accumulated other comprehensive income (loss)	$ 500,000	$ 900,000
Contribution to pension plan	$ 0	$ 0

XML

Other Income and Operating Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Other Income and Expenses [Abstract]
Reporting threshold for other income and operating expenses (percent, greater than)			1.00%
Noninterest Income
Other service charges	$ 649	$ 669	$ 1,264	$ 1,296
Earnings from corporate owned life insurance	554	171	1,169	593
Net gains on the sale of loans originated for sale	27	53	65	57
Other income	373	348	1,046	771
Total other income	1,603	1,241	3,544	2,717
Noninterest Expenses
Marketing expense	1,688	1,456	2,792	2,513
Professional fees	2,124	1,719	3,928	3,325
Legal fees	635	498	1,054	708
Technology expense	3,656	3,690	7,663	7,373
FDIC insurance	779	677	1,833	1,378
Cardholder expense	1,116	1,280	2,133	2,422
Other expenses	4,470	3,709	8,534	7,330
Other operating expense	$ 14,468	$ 13,029	$ 27,937	$ 25,049

XML

Revenue Recognition - Schedule of Disaggregation (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	$ 18,402	$ 18,048	$ 37,197	$ 36,920
Noninterest Income (out-of-scope of ASC 606)	(5,787)	896	(4,182)	2,009
Total Noninterest Income	12,615	18,944	33,015	38,929
Commissions and Fees
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	7,979	7,872	16,495	15,836
Installment Billing
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	(42)	(46)	(40)	(2)
Refund of Commissions
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	113	10	172	(18)
Contract Liabilities/Deferred Revenue
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	(295)	(266)	(298)	(267)
Contingent Commissions
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	917	859	1,852	2,197
Subtotal Insurance Revenues
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	8,672	8,429	18,181	17,746
Trust and Asset Management
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	3,637	3,122	7,072	6,625
Mutual Fund & Investment Income
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	1,041	1,474	2,115	2,888
Subtotal Investment Service Income
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	4,678	4,596	9,187	9,513
Service Charges on Deposit Accounts
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	1,640	1,756	3,386	3,535
Card Services Income
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	3,087	2,959	5,769	5,502
Other
Disaggregation of Revenue [Line Items]
Noninterest Income (in-scope of ASC 606)	$ 325	$ 308	$ 674	$ 624

XML

Revenue Recognition - Narrative (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Disaggregation of Revenue [Line Items]
Contract assets related to contingent income	$ 1.3	$ 2.9
Contract with customer, liability	$ 2.5	1.6
Performance obligation, description of timing	one year
Insurance
Disaggregation of Revenue [Line Items]
Contract with customer, asset, net	$ 3.7	6.1
Wealth Management
Disaggregation of Revenue [Line Items]
Contract with customer, asset, net	$ 2.8	$ 2.5

XML

Financial Guarantees (Details) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Guarantees [Abstract]
Obligations to extend credit for loan commitments	$ 36.2	$ 35.8

XML

Segment and Related Information - Narrative (Details)	6 Months Ended
	Jun. 30, 2023 banking_Office segment office
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 - Schedule of Segment and Related Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022	Dec. 31, 2021
Segment Reporting Information [Line Items]
Interest income	$ 71,870	$ 60,953	$ 141,108	$ 120,129
Interest expense	19,974	2,691	34,966	5,253
Net Interest Income	51,896	58,262	106,142	114,876
Provision for credit loss expense	2,253	856	1,428	336
Noninterest income	12,615	18,944	33,015	38,929
Noninterest expense	51,968	49,120	102,126	95,959
Income Before Income Tax Expense	10,290	27,230	35,603	57,510
Income tax expense	1,784	6,329	7,685	13,305
Net Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation	8,506	20,901	27,918	44,205
Less: Net income attributable to noncontrolling interests	31	32	62	63
Net Income Attributable to Tompkins Financial Corporation	8,475	20,869	27,856	44,142
Depreciation and amortization	2,740	2,595	5,418	5,245
Assets	7,626,238	7,842,461	7,626,238	7,842,461		$ 7,670,686
Goodwill	92,602	92,447	92,602	92,447		92,602
Other intangibles, net	2,513	3,124	2,513	3,124		2,708
Net loans and leases	5,303,820	5,118,710	5,303,820	5,118,710		5,222,977
Deposits	6,454,651	6,769,521	6,454,651	6,769,521		6,602,295
Total Equity	636,441	624,318	636,441	624,318	$ 649,765	$ 617,390	$ 657,492	$ 728,941
Operating Segments | Banking
Segment Reporting Information [Line Items]
Interest income	71,870	60,953	141,108	120,129
Interest expense	19,975	2,692	34,968	5,255
Net Interest Income	51,895	58,261	106,140	114,874
Provision for credit loss expense	2,253	856	1,428	336
Noninterest income	(378)	6,329	6,321	12,522
Noninterest expense	41,385	39,395	81,233	76,584
Income Before Income Tax Expense	7,879	24,339	29,800	50,476
Income tax expense	1,147	5,465	6,136	11,630
Net Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation	6,732	18,874	23,664	38,846
Less: Net income attributable to noncontrolling interests	31	32	62	63
Net Income Attributable to Tompkins Financial Corporation	6,701	18,842	23,602	38,783
Depreciation and amortization	2,652	2,515	5,241	5,093
Assets	7,569,195	7,786,614	7,569,195	7,786,614
Goodwill	64,655	64,500	64,655	64,500
Other intangibles, net	975	1,236	975	1,236
Net loans and leases	5,303,820	5,118,710	5,303,820	5,118,710
Deposits	6,481,556	6,786,754	6,481,556	6,786,754
Total Equity	565,505	563,994	565,505	563,994
Operating Segments | Insurance
Segment Reporting Information [Line Items]
Interest income	1	1	2	2
Interest expense	0	0	0	0
Net Interest Income	1	1	2	2
Provision for credit loss expense	0	0	0	0
Noninterest income	8,798	8,573	18,433	18,007
Noninterest expense	7,201	6,812	14,417	13,314
Income Before Income Tax Expense	1,598	1,762	4,018	4,695
Income tax expense	437	494	1,110	1,310
Net Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation	1,161	1,268	2,908	3,385
Less: Net income attributable to noncontrolling interests	0	0	0	0
Net Income Attributable to Tompkins Financial Corporation	1,161	1,268	2,908	3,385
Depreciation and amortization	44	44	88	88
Assets	44,640	47,222	44,640	47,222
Goodwill	19,866	19,866	19,866	19,866
Other intangibles, net	1,496	1,830	1,496	1,830
Net loans and leases	0	0	0	0
Deposits	0	0	0	0
Total Equity	35,070	34,860	35,070	34,860
Operating Segments | Wealth Management
Segment Reporting Information [Line Items]
Interest income	0	0	0	0
Interest expense	0	0	0	0
Net Interest Income	0	0	0	0
Provision for credit loss expense	0	0	0	0
Noninterest income	4,736	4,598	9,357	9,532
Noninterest expense	3,922	3,469	7,572	7,193
Income Before Income Tax Expense	814	1,129	1,785	2,339
Income tax expense	200	370	439	365
Net Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation	614	759	1,346	1,974
Less: Net income attributable to noncontrolling interests	0	0	0	0
Net Income Attributable to Tompkins Financial Corporation	614	759	1,346	1,974
Depreciation and amortization	44	36	89	64
Assets	28,896	26,915	28,896	26,915
Goodwill	8,081	8,081	8,081	8,081
Other intangibles, net	42	58	42	58
Net loans and leases	0	0	0	0
Deposits	(11,019)	(847)	(11,019)	(847)
Total Equity	35,866	25,464	35,866	25,464
Intercompany
Segment Reporting Information [Line Items]
Interest income	(1)	(1)	(2)	(2)
Interest expense	(1)	(1)	(2)	(2)
Net Interest Income	0	0	0	0
Provision for credit loss expense	0	0	0	0
Noninterest income	(541)	(556)	(1,096)	(1,132)
Noninterest expense	(540)	(556)	(1,096)	(1,132)
Income Before Income Tax Expense	(1)	0	0	0
Income tax expense	0	0	0	0
Net Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation	(1)	0	0	0
Less: Net income attributable to noncontrolling interests	0	0	0	0
Net Income Attributable to Tompkins Financial Corporation	(1)	0	0	0
Depreciation and amortization	0	0	0	0
Assets	(16,493)	(18,290)	(16,493)	(18,290)
Goodwill	0	0	0	0
Other intangibles, net	0	0	0	0
Net loans and leases	0	0	0	0
Deposits	(15,886)	(16,386)	(15,886)	(16,386)
Total Equity	$ 0	$ 0	$ 0	$ 0

XML

Fair Value Measurements - Summary of Financial Assets and Financial Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Assets
Equity securities, at fair value	$ 778	$ 777
Recurring | Level 1
Assets
Available-for-sale securities	0	0
Derivatives designated as hedging instruments	0
Liabilities
Derivatives not designated as hedging instruments	0	0
Recurring | Level 2
Assets
Available-for-sale securities	1,468,003	1,594,967
Derivatives designated as hedging instruments	3,420
Liabilities
Derivatives not designated as hedging instruments	18	21
Recurring | Level 3
Assets
Available-for-sale securities	0	0
Derivatives designated as hedging instruments	0
Liabilities
Derivatives not designated as hedging instruments	0	0
Recurring | U.S. Treasuries | Level 1
Assets
Available-for-sale securities	0	0
Recurring | U.S. Treasuries | Level 2
Assets
Available-for-sale securities	168,094	167,251
Recurring | U.S. Treasuries | Level 3
Assets
Available-for-sale securities	0	0
Recurring | Obligations of U.S. Government sponsored entities | Level 1
Assets
Available-for-sale securities	0	0
Recurring | Obligations of U.S. Government sponsored entities | Level 2
Assets
Available-for-sale securities	523,543	601,167
Recurring | Obligations of U.S. Government sponsored entities | Level 3
Assets
Available-for-sale securities	0	0
Recurring | Obligations of U.S. states and political subdivisions | Level 1
Assets
Available-for-sale securities	0	0
Recurring | Obligations of U.S. states and political subdivisions | Level 2
Assets
Available-for-sale securities	82,047	85,281
Recurring | Obligations of U.S. states and political subdivisions | Level 3
Assets
Available-for-sale securities	0	0
Recurring | U.S. Government agencies | Level 1
Assets
Available-for-sale securities	0	0
Recurring | U.S. Government agencies | Level 2
Assets
Available-for-sale securities	48,942	52,668
Recurring | U.S. Government agencies | Level 3
Assets
Available-for-sale securities	0	0
Recurring | U.S. Government sponsored entities | Level 1
Assets
Available-for-sale securities	0	0
Recurring | U.S. Government sponsored entities | Level 2
Assets
Available-for-sale securities	643,135	686,222
Recurring | U.S. Government sponsored entities | Level 3
Assets
Available-for-sale securities	0	0
Recurring | U.S. corporate debt securities | Level 1
Assets
Available-for-sale securities	0	0
Recurring | U.S. corporate debt securities | Level 2
Assets
Available-for-sale securities	2,242	2,378
Recurring | U.S. corporate debt securities | Level 3
Assets
Available-for-sale securities	0	0
Recurring | Equity securities | Level 1
Assets
Equity securities, at fair value	0	0
Recurring | Equity securities | Level 2
Assets
Equity securities, at fair value	0	0
Recurring | Equity securities | Level 3
Assets
Equity securities, at fair value	778	777
Recurring | Fair Value
Assets
Available-for-sale securities	1,468,003	1,594,967
Derivatives designated as hedging instruments	3,420
Liabilities
Derivatives not designated as hedging instruments	18	21
Recurring | Fair Value | U.S. Treasuries
Assets
Available-for-sale securities	168,094	167,251
Recurring | Fair Value | Obligations of U.S. Government sponsored entities
Assets
Available-for-sale securities	523,543	601,167
Recurring | Fair Value | Obligations of U.S. states and political subdivisions
Assets
Available-for-sale securities	82,047	85,281
Recurring | Fair Value | U.S. Government agencies
Assets
Available-for-sale securities	48,942	52,668
Recurring | Fair Value | U.S. Government sponsored entities
Assets
Available-for-sale securities	643,135	686,222
Recurring | Fair Value | U.S. corporate debt securities
Assets
Available-for-sale securities	2,242	2,378
Recurring | Fair Value | Equity securities
Assets
Equity securities, at fair value	$ 778	$ 777

XML

Fair Value Measurements - Schedule of Assets Measured at Fair Value on Nonrecurring Basis (Details) - Non-Recurring - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Individually evaluated loans	$ 8,822	$ 814	$ 8,822	$ 1,320
Gain (losses) from fair value changes on impaired loans	0	59	826	59
Other real estate owned		33	36	33
Gain (losses) from fair value changes on other real estate owned		0	22	22
Quoted prices in active markets for identical assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Individually evaluated loans	0	0	0	0
Other real estate owned		0	0	0
Significant other observable inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Individually evaluated loans	0	0	0	0
Other real estate owned		33	0	33
Significant unobservable inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Individually evaluated loans	$ 8,822	814	8,822	1,320
Other real estate owned		$ 0	$ 36	$ 0

XML

Fair Value Measurements - Additional Information (Details)	Jun. 30, 2023
Minimum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Selling and closing costs as percentage of appraised value	5.00%
Maximum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Selling and closing costs as percentage of appraised value	8.00%

XML

Fair Value Measurements - Schedule of Carrying Amount and Estimated Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Financial Assets:
Securities - held-to-maturity	$ 262,444	$ 261,692
FHLB and other stock	23,649	17,720
Financial Liabilities:
Time deposits	770,594	631,411
under agreements to repurchase	50,483	56,278
Other borrowings	387,100	291,300
Level 1
Financial Assets:
Cash and cash equivalents	81,614	77,837
Securities - held-to-maturity	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
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	262,444
FHLB and other stock	23,649	17,720
Accrued interest receivable	24,147	24,865
Loans/leases, net	0	0
Financial Liabilities:
Time deposits	757,593	616,488
Other deposits	5,684,057	5,970,884
under agreements to repurchase	50,483	56,278
Other borrowings	384,013	289,234
Accrued interest payable	2,162	1,420
Level 3
Financial Assets:
Cash and cash equivalents	0	0
Securities - held-to-maturity	0
FHLB and other stock	0	0
Accrued interest receivable	0	0
Loans/leases, net	4,920,418	4,939,246
Financial Liabilities:
Time deposits	0	0
Other deposits	0	0
under agreements to repurchase	0	0
Other borrowings	0	0
Accrued interest payable	0	0
Carrying Amount
Financial Assets:
Cash and cash equivalents	81,614	77,837
Securities - held-to-maturity	312,369
FHLB and other stock	23,649	17,720
Accrued interest receivable	24,147	24,865
Loans/leases, net	5,303,820	5,222,977
Financial Liabilities:
Time deposits	770,594	631,411
Other deposits	5,684,057	5,970,884
under agreements to repurchase	50,483	56,278
Other borrowings	387,100	291,300
Accrued interest payable	2,162	1,420
Fair Value
Financial Assets:
Cash and cash equivalents	81,614	77,837
Securities - held-to-maturity	262,444
FHLB and other stock	23,649	17,720
Accrued interest receivable	24,147	24,865
Loans/leases, net	4,920,418	4,939,246
Financial Liabilities:
Time deposits	757,593	616,488
Other deposits	5,684,057	5,970,884
under agreements to repurchase	50,483	56,278
Other borrowings	384,013	289,234
Accrued interest payable	$ 2,162	$ 1,420

XML

Derivatives and Hedging Activities - Cumulative Basis Adjustment For Fair Value Hedges (Details) $ in Thousands	Jun. 30, 2023 USD ($)
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Carrying Amount of the Hedged Assets/(Liabilities)	$ 146,680
Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets/(Liabilities)	(3,320)
Amortized cost basis of the closed portfolios used in these hedging relationships	795,600
Designated hedged items, amount	150,000
Fixed Rate Loans
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Carrying Amount of the Hedged Assets/(Liabilities)	146,680
Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets/(Liabilities)	$ (3,320)

XML

Derivatives and Hedging Activities - Fair Value Hedges of Interest Rate Risk (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Derivatives, Fair Value [Line Items]
Derivative Asset, Statement of Financial Position [Extensible Enumeration]	Accrued interest and other assets	Accrued interest and other assets
Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Derivative assets, fair value	$ 3,420	$ 0
Not Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Derivative liabilities, fair value	18	21
Interest Rate Products | Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Derivative assets, notional amount	150,000	0
Derivative assets, fair value	3,420	$ 0
Accrued interest receivable	$ 121
Risk Participation Agreement
Derivatives, Fair Value [Line Items]
Derivative Liability, Statement of Financial Position [Extensible Enumeration]	Other liabilities	Other liabilities
Risk Participation Agreement | Not Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Derivative liabilities, notional amount	$ 7,499	$ 7,499
Derivative liabilities, fair value	$ 18	$ 21

XML

Derivatives and Hedging Activities - Effect of Fair Value and Cash Flow Hedge Accounting on the Statement of Financial Performance (Details) - Interest Rate Products - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Gain or (loss) on fair value hedging relationships in Subtopic 815-20
Hedged items	$ (3,320)	$ 0	$ (3,320)	$ 0
Derivatives designated as hedging instruments	3,625	0	3,625	0
Interest Income
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Total amounts of income and expense line items presented in the statement of financial performance in which the effects of fair value or cash flow hedges are recorded	$ 305	$ 0	$ 305	$ 0

XML

Derivatives and Hedging Activities - Effect of Derivatives Not Designated as Hedging Instruments on the Income Statement (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain or (Loss) Recognized in Income on Derivative	$ 8	$ 41	$ 2	$ 41
Risk Participation Agreement | Other income / (expense)
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain or (Loss) Recognized in Income on Derivative	$ 8	$ 41	$ 2	$ 41

XML

Derivatives and Hedging Activities - Narrative (Details) $ in Thousands	Jun. 30, 2023 USD ($)
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Fair value of derivatives in a net liability position	$ 0
Collateral posted from counterparty	$ 3,500