Tompkins Financial Corporation
Annual Report 2021

Plain-text annual report

2O2I R E P O R T EMPOWERING OUR COMMUNITIES ONE RELATIONSHIP AT A TIME. Since our founding in 1836, Tompkins has focused on building strong, lasting relationships. Every day, we make meaningful connections that allow us to create possibilities for the individuals, families, businesses and organizations that we serve. As the world changes and customer needs evolve, our mission and promise as a local community bank remains true. Through our dedication to trustworthiness, personal service, unwavering support and locally-focused decision making, our banking, insurance and wealth management teams will continue empowering our communities, one relationship at a time. FINANCIAL HIGHLIGHTS IN THOUSANDS, EXCEPT PER SHARE DATA Total assets Net income attributable to Tompkins Financial Corporation Diluted earnings per share Cash dividends per share 2021 2020 % CHANGE $7,819,982 $7,622,171 89,264 77,588 6.05 2.19 5.20 2.10 2.60% 15.05% 16.35% 4.29% The following consolidated selected financial data is taken from the Company’s audited financial statements as of and for the five years ended December 31, 2021. The following selected financial data should be read in conjunction with the consolidated financial statements and the notes thereto in Part II, Item 8. of this Report. All of the Company’s acquisitions during the five year period were accounted for using the purchase method. Accordingly, the operating results of the acquired companies are included in the Company’s results of operations since their respective acquisition dates. SELECTED FINANCIAL DATA IN THOUSANDS, EXCEPT PER SHARE DATA 2021 2020 2019 2018 2017 FINANCIAL STATEMENT HIGHLIGHTS Assets Total loans Deposits Other borrowings Total equity Interest and dividend income Interest expense Net interest income (Credit) provision for credit loss expense Net gains (losses) on securities transactions Net income attributable to Tompkins Financial Corporation PER SHARE INFORMATION Basic earnings per share Diluted earnings per share Cash dividends per share Common equity per share SELECTED RATIOS Return on average assets Return on average equity Average shareholders’ equity to average assets Dividend payout ratio OTHER SELECTED DATA IN WHOLE NUMBERS, UNLESS OTHERWISE NOTED $7,819,982 $7,622,171 $6,725,623 $6,758,436 $6,648,290 5,075,467 5,260,327 4,917,550 4,833,939 4,669,120 6,791,435 6,437,752 5,212,921 4,888,959 4,837,807 124,000 728,941 241,318 17,526 223,792 (2,219) 249 265,000 717,689 254,330 28,991 658,100 663,054 261,378 50,750 1,076,075 1,071,742 620,871 251,592 39,792 576,202 226,764 25,460 225,339 210,628 211,800 201,304 17,213 443 1,366 645 3,942 (466) 4,161 (407) 89,264 77,588 81,718 82,308 52,494 6.08 6.05 2.19 49.62 1.12 % 12.32 % 9.09 % 36.02 % 5.22 5.20 2.10 5.39 5.37 2.02 5.39 5.35 1.94 3.46 3.43 1.82 47.98 44.17 40.45 37.65 1.05 % 1.22 % 11.09 % 12.55 % 9.51 % 9.75 % 40.23 % 37.48 % 1.23 % 13.93 % 8.83 % 35.99 % 0.82 % 9.09 % 9.04 % 52.60 % Employees (average full-time equivalent) 1,032 1,057 1,047 1,035 1,041 Banking offices Bank access centers (ATMs) Trust and investment services assets under management (in thousands) Trust and investment services assets under custody (in thousands) Total - Trust and investment services assets under management or custody (in thousands) 63 84 64 85 64 87 66 83 65 84 $3,368,960 $3,291,585 $3,102,690 $2,759,558 $2,980,461 $1,683,042 $1,155,434 $959,635 $1,046,717 $1,036,902 $5,052,002 $4,447,019 $4,062,325 $3,806,275 $4,017,363 1 A M E S S A G E F R O M Tom Rochon & Steve Romaine Dr. Thomas R. Rochon CHAIR Stephen S. Romaine PRESIDENT & CEO Our commitment to empowering our communities is what drives us, through periods of prosperity as well as challenging times. Now entering the third year of the COVID pandemic, we have adapted to the current state of the world—working with the agility required to help customers navigate our rapidly changing economic landscape. The past year brought with it low unemployment and rising interest rates, prices and inflation. In this environment, we are pleased to report record earnings per share of $6.05 for the fiscal year ended December 31, 2021, up 16.4% from December 31, 2020. Net income for 2021 was $89.3 million, an increase of $11.7 million compared to 2020. As the fiscal year came to a close, total loans were $5.1 billion, compared to $5.3 billion at year-end 2020—a change driven by a decline of loans under the U.S. Small Business Administration’s Paycheck Protection Program (PPP). Total loans, exclusive of PPP loan balances, were up at year end. Credit quality remained strong. Total revenue of $302.6 million was up 1.2% over the same period last year, benefiting from growth in fee income from business lines including insurance, wealth management and card services. The importance of a community bank with a strong local presence has been clearer than ever over the last two years. Fintechs and national players cannot provide the same level of personalized, knowledgeable, locally-focused service and support that we can—with our deep roots and even deeper commitment to the communities we serve. As we look to the future of local banking, our evolution to a more efficient community bank—made possible by the consolidation of our legal bank charters across New York State and Pennsylvania—and to a single Tompkins brand, is well underway. Together as one, Tompkins remains well positioned to serve our customers and communities for generations to come. Our alignment of bank names not only reflects the consistent community banking experience customers enjoy at our branches—it also supports sustainability and scalability related to capital, liquidity and enhanced technology that continue to improve the customer experience. While we will be refreshing our brand, our business model, level of service and locally-focused teams remain the same. Most existing banking products and services are unchanged and will continue to be offered in all markets under the Tompkins brand, with the same local leadership and local boards in place. The need for enhanced technology was highlighted in recent years, as the pandemic drove greater use of mobile banking, digital wallet and online banking. In response to our customers’ growing needs for remote services, we have continued our shift toward a digital environment. We introduced enhanced online account opening and eSign capabilities and launched innovative platforms for both mortgage and Lightning Loan applications— providing customers with intuitive, efficient ways to interact with us or self-serve from anywhere. The Tompkins Financial Advisors† team has also been focused on delivering an improved client experience with its new upgraded system, TotalWealth. This system provides advanced functionality, more robust reporting capabilities and enhanced security and support in order to better serve client needs. Tompkins Insurance Agencies continued to perfect its new digital technologies to meet client needs, as well, including their desire to interact virtually and self-serve where possible. These efforts were publicly recognized with the receipt of the 2021 2 While the year brought these wonderful additions to our leadership team, we also experienced a profound loss. We are deeply saddened by the passing of our Chief Risk Officer, Steve Cribbs. Mr. Cribbs’ contributions to the Company were nothing short of outstanding, and he will be greatly missed. As we look to the future, we continuously strive to build an inclusive workforce that reflects the diversity and strength of the communities we serve. Our Diversity, Inclusion and Belonging Initiative has brought together minds and ideas from across the company to implement educational sessions and cultural celebrations, which included Unconscious Bias Training classes, monthly highlights on various topics of difference, inequality, history and culture, and a podcast featuring relevant diversity topics. Our Human Resources teams have adopted an increased focus on diversity, inclusion and belonging in their recruitment, onboarding and mentoring. As people are becoming more and more discerning about the companies they choose to support and do business with, we have been more transparent about our ESG (Environmental Social Governance) activities—investing in companies that adhere to the principles of socially responsible investing while delivering long-term capital growth. We have offered a specific internally managed ESG portfolio for more than 10 years, which is quite uncommon in our industry, and our portfolio performance has remained strong over time. When we reflect on everything we accomplished in 2021, we recognize that it is all possible thanks to our committed Tompkins teams, our loyal customers and, of course, our dedicated shareholders. Our Annual Meeting of Shareholders will be held on May 10, 2022 at 5:30 p.m. Information about how to participate and vote will be sent to shareholders in early spring. Throughout another unique year, one thing that remains consistent is the incredible dedication and commitment of our teams. Through close collaboration, colleagues from each line of business have come together to help our customers and communities make it through the year with confidence and strength. Our community banking promise is made possible because of all you do. Reader Rankings Award for “Best Insurance Company” from the Rochester Business Journal, in addition to once again being named a Best Practices Agency for Operational Excellence by the Big “I.” Tompkins Insurance Agencies was also recognized by its own team of dedicated employees, whose votes placed their workplace on Buffalo Business First’s list of the 2021 Best Places to Work. With more customers and clients across our lines of business taking advantage of remote ways to connect, fraud risk has been on the rise. In response to this growing issue, we put new authentication systems in place to help us better identify our customers and clients and keep them secure. We continue to stay on top of the latest trends to protect our clients. As the pandemic has changed the way many businesses work, we have recognized that people have more opportunities to work remotely. In order to meet our employees’ desire for greater flexibility and accessibility—while continuing to attract and retain top talent—we have offered hybrid working schedules for those who are able to work remotely. Our people remain our greatest asset, and as the labor pool shrinks and the “Great Resignation” continues across the country, we remain focused on both internal succession planning—to elevate our incredible employees who are ready for greater challenges and responsibilities—as well as recruitment of outside talent who can bring fresh thinking and innovative strategies to our banking, insurance and wealth management teams. In leadership news, Gerald Klein retired as President and CEO of Tompkins Mahopac Bank in the Hudson Valley, and David DeMilia assumed the role of President. In his most recent role as Senior Commercial Lending Division Manager, Mr. DeMilia directed and co-directed multiple important corporate initiatives that have helped Tompkins provide superior service for our customers and communities. He also lives Tompkins’ values each day through service in the community—making an especially positive impact in his position as trustee of the WMCHealth organization. In Pennsylvania, Scott Gruber announced his retirement as President and CEO of Tompkins VIST Bank, effective 2nd quarter, 2022, with Ginger Kunkel joining the Company as his successor. Ms. Kunkel most recently served as SEVP, Chief Operating Officer for Riverview Bank & Riverview Financial Corporation, headquartered in Harrisburg, Pennsylvania and is known throughout the financial services community as a digital innovator and agile problem solver. With experience driving a full spectrum of revenue generating businesses— and a deep commitment to local nonprofits and community organizations—she is an ideal fit to lead our PA market well into the future. 3 At Tompkins, we are wholly committed to our purpose and mission as a community-based financial services company. We provide our customers with so much more than products and services. We are their trusted partner, playing a critical role in advising them through every phase of their lives. We keep their money secure, help them grow their businesses, manage their wealth and insure what matters most to them. As we empower our customers to reach their goals, we strengthen the communities that we all call home. Enhancing Our Digital Capabilities For customers who prefer the in-person, To ensure that we can continue to provide this superior level of support for our customers and communities as their needs change and technologies advance, we have focused on prioritizing and improving our remote capabilities. Digital transactions increased in 2021 as our teams continued their pivot to connecting with customers who wish to in-branch Tompkins experience they have come to know and love, we have focused on making our lobbies exceptionally safe and welcoming—following strict protocols to help both our customers and our employees stay healthy and well. Innovating Our Products conduct their banking virtually. As the home has become a more central part of many customers’ lives, we saw them For more complex transactions, customers increasingly invest in their homes through a have appreciated these more convenient high volume of mortgage loans and refinances. conversations with our banking, insurance We continued to guide and inform our and wealth management teams, without the customers who are new to the home buying barriers that may arise when trying to schedule process during First Time Homebuyer in-person meetings. In addition, the ability to seminars, where we also introduced attendees invite colleagues from other teams to join a call to our online lending platform. within moments has helped us deliver on even more customer needs quickly and efficiently. 4 ITHACA COMMUNITY CHILDCARE CENTER Sherri Koski, Executive Director Nurturing our community’s FUTURE. “Whenever there’s something happening in the community, people from Tompkins are there, really happy to participate and serve,” says Ithaca Community Childcare Center (IC3) Executive Director Sherri Koski. “They are deeply active, which allows them to understand what the community needs and what the community has to offer.” The team at Tompkins has been there for IC3 since its founding in 1976—offering the guidance and support the nonprofit has needed to provide decades of child-inspired, professionally-nurtured care for children in the Ithaca area. In addition to helping with financing and insurance coverage for a recently completed 7,000-square-foot building addition and 4,400-square-foot renovation, the Tompkins team helped Sherri fine-tune her fundraising efforts for the project. “They were my first meeting to ask for support,” Sherri says. “To me, that speaks to the comfort level of the relationship. They were really great at giving me feedback so I could be successful.” A S P OT L I G H T O N C E N T R A L N E W YO R K The Central New York Tompkins team got creative with community support in 2021 to meet the needs of underserved populations and bring our community together. By engaging in a new sponsorship with Gadabout Transportation Services, Tompkins was able to help homebound community members regain some of their independence. The CNY social justice team also developed and delivered financial literacy webinars for underserved communities that were very well received. Tompkins also sponsored a number of local events—from the Greater Ithaca Activity Center’s annual MLK Community Breakfast to the local Hangar Theatre’s outdoor stage season, the Community Hero of the Month Awards and more—proving that they would not allow the pandemic to stand in the way of vital community building and engagement. 5 This new, intuitive online lending platform— We have also made enhancements to our launched in December 2020—has streamlined Lightning Loans product platform to provide the mortgage application process, serving the ability to customize application and as a document collection and communication documentation requirements based on the portal and automating tasks such as gathering customer’s selected products. With these pay stubs and bank statements. Throughout updates, we have been able to streamline and 2021, we saw a marked increase in completed automate areas like credit reports and online applications with this new system. To date, renewals, providing a better, more efficient over 80% of customers that start the process customer experience. in the new platform continue and complete the process, an enormous improvement over the previous system. Customer feedback about Supporting Business Growth the new platform and its ease of use has been overwhelmingly positive. Our commitment to local businesses has remained a top priority during this critical Since taking the reins at Becker Farms, Melinda and Oscar Vizcarra have expanded the sixth- generation family farm into a successful agritourism business that includes wedding venues, a winery, a brewery and more—and much of that growth was made possible with the help of Tompkins. At a time when agritourism was new to the area, the Vizcarras found that many banks were unwilling to take a risk on an unprecedented business model. “Tompkins really listened to my ideas and vision and made it possible for us to build our infrastructure into what it is today,” Oscar says. “They saw the potential of our farm.” The Tompkins team helped make the Becker Farms vision a reality through financing for major expansions, new equipment and new constructions— plus early and consistent support during the Paycheck Protection Program loan process. “They know us and they know our business. We’re not just another account,” says Melinda. “We feel like they are on our side to make the business better.” S P OT L I G H T O N W E S T E R N N E W YO R K In Western New York, Tompkins became the Venture Jobs Foundation’s Annual Revitalization Partner through a donation provided to further the nonprofit organization’s mission. The Venture Jobs Foundation’s work is focused on investing in entrepreneurs and growing businesses in high-poverty neighborhoods to foster job creation and revitalize underserved communities in the Rochester area. Tompkins’ donation will empower local small businesses to create new jobs and work toward rebuilding the region. This is just one of the many initiatives the WNY Tompkins team took part in throughout 2021, as many members of the team have taken on leadership positions on community boards and committees throughout the area to help our communities grow and thrive. 6 and unprecedented time. We have worked serve that are dedicated to agriculture, we diligently to deliver exceptional service for continue to stay ahead of farmers’ shifting our business customers through each phase needs and challenges, working hard to help of the Paycheck Protection Program process. these essential businesses grow and thrive By enhancing our technology and growing in our communities. our expertise as the process evolved, we have been able to continue providing personalized, timely support and sending Building Momentum in Our Markets ongoing communications to keep our customers ahead of each new change. One industry that we remain uniquely positioned to serve through this time of change is agriculture. As one of the last truly local independent banks in the markets we Throughout 2021, we saw solid deposit performance, a high demand for loan originations, and strong successes for commercial lending in both our well- established and emerging markets. BECKER FARMS | VIZCARRA VINEYARDS Oscar Vizcarra, Owner Melinda Vizcarra, Owner In the business of GROWTH. 7 We have continued to build momentum in In the Pennsylvania market, Philadelphia those emerging markets, establishing valuable saw significant disruption as competitor relationships and growing brand recognition branches closed. Through a targeted within the local areas. and collaborative business development and marketing approach, we identified As some of the Western New York market’s opportunities to introduce these competitors’ local regional competitors become even former customers and employees to the value larger, it’s leading to a number of exciting of community banking with Tompkins. We opportunities in Buffalo and Rochester. We leveraged centers of influence and customer added a Business Development Officer whose referrals, called on local businesses we knew main focus is establishing new relationships in we were uniquely positioned to serve, and these two cities, and we connected with and connected with community members by served the communities by hosting virtual hosting Food Truck Fridays. seminars on cyber risk, first time home buying and retirement planning. We have continued The Hudson Valley market also experienced to accelerate lending activity in Buffalo, adding disruption, which opened up new opportunities a dedicated Mortgage Lending Officer and for our Yonkers locations. We connected continuing that locations’s run as one of our with both new and established customers— top offices in small business lending in WNY through targeted mail campaigns, relationship for the third year. management calls and referrals—to offer the right combination of products and services In Central New York, our Syracuse area market to fit their needs. We also have made an share has continued to grow since we opened ongoing effort to ensure our branches are well our Lyndon Corners office in 2016. The office positioned to serve our communities, with now includes multiple representatives from convenient locations and the most modern all our lines of business: commercial and retail in-branch technology. Our LaGrange branch banking, cash management, insurance and moved into a more modern facility at the end wealth management, as well as several senior of 2020, with a grand opening held in 2021. officers. Anchored by renowned universities With this new facility, we implemented our and medical centers, the city’s downtown future branch concept with universal bankers has seen extensive investment in housing and teller pods to take better advantage of our and mixed use buildings. As our teams have digital capabilities. focused on expanding our presence in the strong emerging business sector, they have established Tompkins as a trusted partner for top tier developers and business owners. 8 Earning Recognition for Insurance Excellence Tompkins Insurance Agencies also continued to perfect its digital capabilities in order to meet client demands for the ability to self-serve virtually where possible. Throughout this time of change, our insurance team was as committed as ever to providing a top-notch claim experience. These efforts paid off—it was a record year for new business sales, a strong year for client retention, and Tompkins Insurance Agencies was once again publicly recognized with a number of awards and rankings: 2021 Reader Rankings Award “Best Insurance Company” – Rochester Business Journal 2021 Best Places to Work – Buffalo Business First Top 50 Personal Lines Agencies – Insurance Journal Top 100 Commercial Insurance Brokers – Business Insurance Top 100 Independent Property/Casualty Agencies – Insurance Journal Top 3 Commercial Insurance Firms in Rochester/Monroe County – Rochester Business Journal “Best Practices Agency” for Operational Excellence – Independent Insurance Agents & Brokers of America (IIABA) Top 50 Bank Holding Companies in Insurance Brokerage Fee Income – Michael White Associates, as reported in Insurance Journal 9 WESTCHESTER INSTITUTE FOR HUMAN DEVELOPMENT Dr. Susan Fox, President and CEO Marianne Ventrice, Chief Financial and Administrative Officer Driving a vital mission FORWARD. Delivering for Wealth Management Clients The Tompkins Financial Advisors team was strategically focused on continuing to enhance the client experience they provide. They continued to examine current offerings and developed surveys to better understand and deliver on evolving client needs and expectations. With the new, upgraded TotalWealth system, clients now experience improved digital offerings and capabilities, a state-of-the-art website for online access and an easy-to-use app. The Tompkins Financial Advisors team also provided invaluable resources and guidance through thought leadership articles, ongoing client communications and online education. They participated in virtual seminars along with branch partners to provide informative lessons on basic investment and planning to members of the community. 10 As a not-for-profit organization that provides innovative services and support for vulnerable populations and their caregivers in the Hudson Valley, the Westchester Institute for Human Development (WIHD) needed a bank with a deep connection to the community. They found Tompkins, and discovered a level of personal service that could help them advance their mission. “They work very hands-on,” says Dr. Susan Fox, WIHD President and CEO. “That’s something you don’t find very often these days, so when you find it, you don’t let go.” From the beginning of the COVID pandemic, the Tompkins team was there to help WIHD secure their financial future— quickly releasing the organization’s line of credit, working around the clock to submit their application for the Paycheck Protection Program as early as possible, and helping them transition from paper checks to online bill pay and ACH payments. “They made the process as smooth as possible,” says Dr. Fox. “Working with a community bank and having those individual relationships makes all the difference in the world.” A S P OT L I G H T O N H U D S O N VA L L E Y As community banks dwindle in numbers, Tompkins remains committed to serving our communities in ways online banks and Fintechs are not able or willing to do. This commitment was recognized in 2021 by the Think Dutchess Alliance for Business, which selected Tompkins as its Large Business of the Year award winner—an award which recognizes Hudson Valley organizations for “their ability to thrive, expand, innovate and strengthen the Dutchess County workforce and community post-pandemic.” The Hudson Valley Tompkins team was also recognized with Putnam County Business Council’s Trailblazer Award for businesses whose efforts embrace diversity and inclusivity despite the limitations and challenges of the pandemic—efforts in 2021 included helping formulate the Westchester Multicultural Chamber of Commerce. Lastly, the team’s community service efforts did not go unnoticed. Tompkins was also recognized with the AFP Mid-Hudson Valley Region Philanthropist of the Year award. Proudly Serving Our Communities Continuing our deep involvement in the Diversity, equity and inclusion have remained a vital area of focus across our footprint. We developed a series of virtual financial literacy classes and promoted them to underserved communities, starting in Central New York in 2021, with plans to expand across all our markets in 2022. Our local social justice teams also tailored our efforts to engage with local communities. communities we serve, our teams have stepped up to support the local organizations and individuals who need it most. We once again held our Banksgiving initiative, donating to local food pantries to ensure that our neighbors could enjoy holiday meals with their loved ones. We also continued Food Truck Fridays, providing free lunch at select branches along with donations to local nonprofit organizations. 11 “Tompkins is the first bank that treats us like a real customer,” says Christine Folk, Executive Director of Mary’s Shelter, a nonprofit comprehensive housing and social services provider for pregnant women and homeless youth. “The team at Tompkins believed in us and our program as much as we did.” When the organization was preparing to undergo a renovation that would add much-needed bedroom space to their transitional housing program, they needed a bank to sponsor their Federal Home Loan Bank grant application. The Tompkins team was happy to help—and also provided a bridge loan to get the project started as soon as possible. When the renovation was complete six months later, Tompkins had a crew of volunteers ready to jump in and decorate one of the new rooms using a design created by local high school students. “I can’t think of one program in our building that Tompkins hasn’t supported in one way or another,” Christine says. “When they say they’re a community bank, they really mean it.” 12 A SPOTLIGHT ON PENNSYLVANIA Pennsylvania team members see volunteerism as part of their responsibility as community bankers - and they took that responsibility seriously in 2021, completing thousands of hours of community service by adapting to how organizations were choosing to connect and Tompkins also committed to providing empowering educational opportunities engage in light of COVID. across the area, using the Educational Improvement Tax Credit (EITC) to reallocate a portion of tax dollars to organizations that provide vital educational programming and scholarships. They committed over $300,000 Continuing the focus on education, the market’s to nearly 50 youth education organizations in 2020-2021. social justice committee partnered with the Anti-Defamation League to provide educational programming for schools and organizations around the importance of diversity, inclusion and social justice. A place to call HOME. MARY’S SHELTER Christine Folk Executive Director 13 As always, our employees worked to support the local organizations and causes that mean the most to them—our people donate time, provide financial gifts and serve on numerous boards and committees to ensure that community needs are met. Strengthening Our Local Boards Also at the local level, our boards remain strong, and we remain committed to local representation from business and thought leaders in our communities. In 2021, we welcomed two new local board members: Angela Lee brings more than 30 years of human resources and talent development experience to our Central New York Board of Directors—along with an innovative leadership style and the ability to inspire collaboration among teams and organizations. Ms. Lee was named among 25 Influential Black Women in Business by Network Journal in 2019. Joseph Kenner brings more than a decade of financial and public policy expertise to our Hudson Valley Board of Directors. Mr. Kenner was recently appointed by then- New York Lieutenant Governor (now Governor) Kathy Hochul to the Hudson Valley Economic Development Council Board and the Mid-Hudson Regional Economic Development Council. 14 As 2021 presented us with continued pandemic-related challenges, we are so proud of how our banking, insurance and wealth teams came through for the individuals, families, businesses and organizations in our communities. It is thanks to our employees that we are able to keep our community banking tradition alive and well. The dedication of our teams is what makes it possible for our customers and communities to continue moving forward, even through the changing and uncertain times of the past two years. 15 13 CONSOLIDATED STATEMENTS of CONDITION IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA ASSETS Cash and noninterest bearing balances due from banks Interest bearing balances due from banks Cash and Cash Equivalents YEAR ENDED DECEMBER 31 2021 2020 $23,078 40,029 63,107 $21,245 367,217 388,462 Available-for-sale debt securities, at fair value (amortized cost of $2,063,790 at December 31, 2021 and $1,599,894 at December 31, 2020) 2,044,513 1,627,193 Held-to-maturity securities, at amortized cost (fair value of $282,288 at December 31, 2021 and $0 at December 31, 2020) Equity securities, at fair value (amortized cost $902 at December 31, 2021 and $929 at December 31, 2020) Total loans and leases, net of unearned income and deferred costs and fees Less: Allowance for credit losses Net Loans and Leases Federal Home Loan Bank and other stock Bank premises and equipment, net Corporate owned life insurance Goodwill Other intangible assets, net Accrued interest and other assets Total Assets LIABILITIES Deposits: Interest bearing: Checking, savings and money market Time Noninterest bearing Total Deposits Federal funds purchased and securities sold under agreements to repurchase Other borrowings Trust preferred debentures Other liabilities Total Liabilities EQUITY Tompkins Financial Corporation shareholders’ equity: Common Stock - par value $.10 per share: Authorized 25,000,000 shares; Issued: 14,696,911 at December 31, 2021; and 14,964,389 at December 31, 2020 Additional paid-in capital Retained earnings Accumulated other comprehensive loss Treasury stock, at cost – 122,824 shares at December 31, 2021, and 124,849 shares at December 31, 2020 Total Tompkins Financial Corporation Shareholders’ Equity Noncontrolling interests Total Equity Total Liabilities and Equity 16 284,009 902 0 929 5,075,467 5,260,327 42,843 51,669 5,032,624 5,208,658 10,996 85,416 86,495 92,447 3,643 16,382 88,709 84,736 92,447 4,905 115,830 109,750 $ 7,819,982 $ 7,622,171 4,016,025 3,761,933 639,674 746,234 2,135,736 1,929,585 6,791,435 6,437,752 66,787 124,000 0 108,819 65,845 265,000 13,220 122,665 $ 7,091,041 $ 6,904,482 1,470 312,538 475,262 (55,950) (5,791) 727,529 1,412 1,496 333,976 418,413 (32,074) (5,534) 716,277 1,412 $ 728,941 $ 717,689 $ 7,819,982 $ 7,622,171 CONSOLIDATED STATEMENTS of INCOME IN THOUSANDS, EXCEPT PER SHARE DATA INTEREST AND DIVIDEND INCOME Loans Due from banks Available-for-sale debt securities Held-to-maturity securities Federal Home Loan Bank stock and Federal Reserve Bank stock YEAR ENDED DECEMBER 31 2021 2020 2019 $ 214,684 $ 227,313 $ 226,723 343 23,440 2,075 776 194 25,450 0 1,373 41 28,460 3,151 3,003 Total Interest and Dividend Income 241,318 254,330 261,378 INTEREST EXPENSE Time certificates of deposits of $250,000 or more Other deposits Federal funds purchased and securities sold under agreements to repurchase Trust preferred debentures Other borrowings Total Interest Expense Net Interest Income Less: (Credit) provision for Credit Loss Expense Net Interest Income After Provision for Credit Loss Expense NONINTEREST INCOME Insurance commissions and fees Investment services income Service charges on deposit accounts Card services income Other income Net gain on securities transactions Total Noninterest Income NONINTEREST EXPENSES Salaries and wages Other employee benefits Net occupancy expense of premises Furniture and fixture expense Amortization of intangible assets Other operating expenses Total Noninterest Expenses Income Before Income Tax Expense Income Tax Expense Net Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation Less: Net income attributable to noncontrolling interests 2,202 8,645 64 2,233 4,382 3,175 16,789 95 1,133 7,799 17,526 28,991 3,095 27,809 143 1,276 18,427 50,750 223,792 225,339 210,628 (2,219) 17,213 1,366 226,011 208,126 209,262 34,836 19,388 6,347 10,826 7,203 249 31,505 17,520 6,312 9,263 8,817 443 78,849 73,860 96,038 24,172 13,179 8,328 1,317 92,519 24,812 12,930 7,846 1,484 47,253 44,729 190,287 184,320 114,573 25,182 89,391 127 97,666 19,924 77,742 154 31,091 16,434 8,321 10,526 8,416 645 75,433 89,399 23,488 13,210 7,815 1,673 46,249 181,834 102,861 21,016 81,845 127 Net Income Attributable to Tompkins Financial Corporation $ 89,264 $ 77,588 $ 81,718 Basic Earnings Per Share Diluted Earnings Per Share $ 6.08 $ 6.05 $ 5.22 $ 5.20 $ 5.39 $ 5.37 17 MARKET of REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS and ISSUER PURCHASES of EQUITY SECURITIES The Company’s common stock is traded under the symbol MARKET PRICE CASH DIVIDENDS “TMP” on the NYSE American. The high and low closing High Low Amount Date Paid sale prices, which represent actual transactions as quoted 2020 1st Quarter $92.88 $61.75 $0.52 2/18/20 on the Exchange, of the Company’s common stock for each 2nd Quarter 74.99 56.02 0.52 5/18/20 quarterly period in 2020 and 2021, are presented to the 3rd Quarter 70.64 55.47 0.52 8/14/20 right. The per share dividends paid by the Company in each 4th Quarter 71.79 54.65 0.54 11/13/20 quarterly period in 2020 and 2021 and the payment dates of these dividends are also presented. $6.05 $5.37 $5.35 $5.20 $3.43 2021 1st Quarter $ 92.36 $ 66.87 $ 0.54 2/16/21 2nd Quarter 85.17 76.81 0.54 5/17/21 3rd Quarter 81.76 73.63 0.54 8/13/21 4th Quarter 85.02 77.45 0.57 11/15/21 $2.19 $2.10 $2.02 $1.94 $1.82 0.00 0.00 17 18 19 20 21 17 18 19 20 21 Diluted Earnings PER SHARE IN DOLLARS Cash Dividends PER SHARE IN DOLLARS REPORT of INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Shareholders and Board of Directors Tompkins Financial Corporation: We have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated statement of condition of Tompkins Financial Corporation and subsidiaries as of December 31, 2021, and the related consolidated statements of income, comprehensive income, cash flows, and changes in shareholders’ equity, for the year then ended (not presented herein); and in our report dated March 1, 2022, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated financial statements is fairly stated, in all material respects, in relation to the consolidated financial statements from which it has been derived. Rochester, New York March 1, 2022 18 TOMPKINS FINANCIAL CORPORATION BOARD of DIRECTORS Thomas R. Rochon Chair President, ERB Learn Stephen S. Romaine President & CEO James W. Fulmer Vice Chair John E. Alexander Founder The CBORD Group, Inc. Paul J. Battaglia, CPA Retired Director Freed Maxick CPAs, P.C. Daniel J. Fessenden Executive Director Fred L. Emerson Foundation, Inc. Patricia A. Johnson VP of Finance & Administration Lehigh University Frank C. Milewski Retired VP Regional Operations Pathways Health Ita M. Rahilly, CPA, AEP Partner RBT CPAs, LLP Michael H. Spain Executive Vice President Brown & Brown Jennifer R. Tegan Managing Director NY Ventures Alfred J. Weber President Tweed-Weber-Danks, Inc. Craig Yunker Managing Partner CY Farms 19 AFFILIATE BOARDS of DIRECTORS* TOMPKINS - Central New York TOMPKINS - Western New York TOMPKINS - Hudson Valley TOMPKINS - Pennsylvania Stephen S. Romaine Chair President & CEO Tompkins Financial Corporation Gregory J. Hartz President & CEO John E. Alexander Founder The CBORD Group, Inc. Johanna Anderson Executive Director Ithaca Neighborhood Housing Services Larry F. Baum** Founder The Computing Center Daniel J. Fessenden Executive Director Fred L. Emerson Foundation, Inc. Angela B. Lee VP of Human Resources and Chief Diversity Officer Baxter International, Inc. Ryan Lombardi VP Student & Campus Life Cornell University Jennifer R. Tegan Managing Director NY Ventures **Retiring April 2022 James W. Fulmer Chair John M. McKenna President & CEO Paul J. Battaglia, CPA Retired Director Freed Maxick CPAs, P.C Joseph G. Bucci Jr. Environmental Manager American Rock Salt Company, LLC Nancy Catarisano, CPA Managing Partner Insero & Co. CPAs, LLP David N. DeLaVergne** Retired SVP Tompkins Bank of Castile John D. McClurg President McClurg Chrysler Dodge Jeep, Inc. McClurg Chevrolet Buick, Inc. Stephen S. Romaine President & CEO Tompkins Financial Corporation Stephen R. Stoddard, DVM Partner Perry Veterinary Clinic Craig Yunker Managing Partner CY Farms **Retiring April 2022 Michael H. Spain Chair Executive Vice President Brown & Brown Alfred J. Weber Chair President Tweed-Weber-Danks, Inc. David M. DeMilia President & CEO Scott L. Gruber President & CEO Francis M. Fetsko EVP, CFO, COO & Treasurer Tompkins Financial Corporation Helen S. Eaton CEO Settlement Music School Joseph D. Kenner President & CEO Greyston Bakery Greyston Foundation Ita M. Rahilly, CPA, AEP Partner RBT CPAs, LLP Kevin J. Plunkett** Director of Strategic Initiatives Simone Development Companies Thomas R. Rochon President ERB Learn Stephen S. Romaine President & CEO Tompkins Financial Corporation C. Compton Spain Attorney Spain & Spain, PC **Retiring April 2022 James W. Fulmer Vice Chair Tompkins Financial Corporation Patricia A. Johnson VP of Finance & Administration Lehigh University Frank C. Milewski Retired VP Regional Operations Pathways Health Harry J. O’Neill, III** President Empire Group Stephen S. Romaine President & CEO Tompkins Financial Corporation **Retiring April 2022 TOMPKINS INSURANCE AGENCIES James W. Fulmer Chair Vice Chair Tompkins Financial Corporation David S. Boyce President & CEO Stephen S. Romaine President & CEO Tompkins Financial Corporation 20 * Effective January 1, 2022 CORPORATE INFORMATION CORPORATE OFFICE STOCK LISTING Tompkins Financial Corporation P.O. Box 460 Ithaca, NY 14851 (888) 503-5753 Tompkins Financial Corporation common stock is traded on the NYSE American under the symbol TMP. Website: www.tompkinsfinancial.com E-mail: shareholder@tompkinsfinancial.com AFFILIATES Tompkins Community Bank Central New York Market P.O. Box 460 Ithaca, NY 14851 (607) 273-3210 Western New York Market 90 Main St. Batavia, NY 14020 (585) 345-0122 Hudson Valley Market 1441 Route 22 Brewster, NY 10509 (845) 278-1000 Pennsylvania Market P.O. Box 6219 Wyomissing, PA 19610 (610) 478-9922 Tompkins Insurance Agencies, Inc. 90 Main St. Batavia, NY 14020 (585) 344-0833 www.tompkinsins.com Tompkins Financial Advisors† P.O. Box 6437 Ithaca, NY 14851 (607) 273-0037 tompkinsfinancialadvisors.com The Tompkins Financial Stock Purchase Plan is administered by American Stock Transfer & Trust Company, LLC as transfer agent for Tompkins Financial Corporation. It offers a convenient way for shareholders to increase their investment in the Company. The plan enables shareholders to reinvest all or part of their cash dividends or to make optional cash payments, with some restrictions, in order to purchase shares of Tompkins Financial Corporation common stock without incurring charges for brokerage commissions or service charges. Shareholders who are interested in the plan may receive enrollment information and a plan enrollment application by contacting: American Stock Transfer & Trust Company, LLC Toll-free number: 1-877-573-4008 Website: www.astfinancial.com Mailing address: American Stock Transfer & Trust Company, LLC Attn: Dividend Reinvestment Department P.O. Box 922 Wall Street Station New York, NY 10269-0560 For answers to many of your shareholder questions or to request forms, visit American Stock Transfer & Trust Company’s website www.astfinancial.com or contact: American Stock Transfer & Trust Company, LLC Shareholder Relations 6201 15th Avenue Brooklyn, NY 11219 Overnight address: 6201 15th Avenue Brooklyn, NY 11219 1-800-937-5449 or 1-718-921-8200 E-mail address: info@astfinancial.com Also, Tompkins Financial Stock Purchase Plan enrollment information can be requested and shareholder questions answered by contacting the Company: Wendy Fonder Tompkins Financial Corporation P.O. Box 460 Ithaca, NY 14851 1-888-503-5753 or 1-607-274-2096 E-mail address: wfonder@tompkinsfinancial.com Form 10-K Copies of the Company’s Form 10-K (Annual Report) for 2021, filed with the Securities and Exchange Commission, may be obtained by shareholders, by written request, from Francis M. Fetsko, Executive Vice President and Chief Financial Officer, P.O. Box 460, Ithaca, NY 14851. Copies can also be obtained from our website: www.tompkinsfinancial.com GO GREEN If you would like to receive future Tompkins Financial Corporation Corporate Reports and proxy materials electronically, please follow the instructions on your proxy card for voting via the internet and select the option for electronic transmission of proxy materials. The savings below are achieved when PC recycled paper is used in place of virgin fiber. This project uses 1,810 lbs of paper which has a postconsumer recycled percentage of 10%. 2.2 trees preserved for the future 200 gallons of wastewater flow saved 10 lbs solid waste not generated 1000 lbs net greenhouse gases prevented .9 million BTUs energy not consumed TOMPKINS FINANCIAL CORPORATION CORPORATE OFFICERS Stephen S. Romaine President & Chief Executive Officer David S. Boyce Executive Vice President David M. DeMilia Executive Vice President Francis M. Fetsko Executive Vice President Chief Financial Officer, Chief Operating Officer & Treasurer Alyssa H. Fontaine Executive Vice President General Counsel Corporate Secretary Scott L. Gruber Executive Vice President Gregory J. Hartz Executive Vice President Brian A. Howard Executive Vice President Ginger G. Kunkle Executive Vice President John M. McKenna Executive Vice President Susan M. Valenti Executive Vice President Corporate Marketing Officer Steven W. Cribbs* Senior Vice President Chief Risk Officer Bradley G. James Senior Vice President Chief Technology Officer Bonita N. Lindberg Senior Vice President Director of Human Resources Cynthia M. Manuele Corporate Counsel & Deputy Corporate Secretary Janet L. Hewitt Assistant Vice President Corporate Administrative & Investor Relations Officer Wendy K. Fonder Governance Coordinator Assistant Corporate Secretary *Deceased †Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. Tompkins Trust Company and Tompkins Wealth Advisors are not registered as a broker-dealer or investment advisor. Registered representatives of LPL offer products and services using Tompkins Wealth Advisors, and may also be employees of Tompkins Trust Company. These products and services are being offered through LPL or its affiliates, which are separate entities from, and not affiliates of, Tompkins Trust Company or Tompkins Wealth Advisors. Securities and insurance offered through LPL or its affiliates are: Not Insured by FDIC or Any Other Government Agency Not Bank Guaranteed Not Bank Deposits or Obligations May Lose Value TOMPKINSFINANCIAL.COM 

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