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What changed in TOMPKINS FINANCIAL CORP's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of TOMPKINS FINANCIAL CORP's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+437 added−478 removedSource: 10-K (2025-02-28) vs 10-K (2024-02-29)

Top changes in TOMPKINS FINANCIAL CORP's 2024 10-K

437 paragraphs added · 478 removed · 367 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

75 edited+9 added−21 removed97 unchanged
Biggest changeThe Dodd-Frank Act permanently increased the maximum amount of deposit insurance to $250,000 per deposit category, per depositor, per institution retroactive to January 1, 2008. Tompkins Community Bank pays deposit insurance premiums to the FDIC based on assessment rates established by the FDIC. Deposit insurance premiums are based on assets.
Biggest changeDeposit Insurance Substantially all of Tompkins Community Bank's deposits are insured up to applicable limits by the Deposit Insurance Fund ("DIF") of the FDIC and are subject to deposit insurance assessments to maintain the DIF. The Dodd-Frank Act permanently increased the maximum amount of deposit insurance to $250,000 per deposit category, per depositor, per institution retroactive to January 1, 2008.
In connection with the decision regarding dividends and share repurchase programs, our Board will take into account general business conditions, our financial results, projected cash flows, capital requirements, contractual, legal and regulatory restrictions on the payment of dividends by Tompkins Community Bank to the Company and such other factors as deemed relevant.
In connection with any decision regarding dividends and share repurchase programs, our Board will take into account general business conditions, our financial results, projected cash flows, capital requirements, contractual, legal and regulatory restrictions on the payment of dividends by Tompkins Community Bank to the Company, and such other factors as deemed relevant.
The Anti-Money Laundering Act of 2020 ("AMLA"), which amends the Bank Secrecy Act of 1970 ("BSA"), was enacted in January 2021. The AMLA is intended to be a comprehensive reform and modernization to U.S. bank secrecy and anti-money laundering laws.
The Anti-Money Laundering Act of 2020 ("AMLA"), which amends the BSA, was enacted in January 2021. The AMLA is intended to be a comprehensive reform and modernization to U.S. bank secrecy and anti-money laundering laws.
The Company's activities, or those of its subsidiary bank, Tompkins Community Bank, are also subject to regulation under the Federal Reserve Act, the Federal Deposit Insurance Act, the Dodd-Frank Act, the Truth-in-Lending Act (which governs disclosures of credit terms to consumer borrowers), the Truth-in-Savings Act, the Equal Credit Opportunity Act, the Fair Credit Reporting Act (which governs the manner in which consumer debts may be collected by collection agencies), the Home Mortgage Disclosure Act (which requires financial institutions to provide certain information about home mortgage and refinanced loans), the Servicemembers Civil Relief Act, Section 5 of the Federal Trade Commission Act (which prohibits unfair or deceptive acts and practices in or affecting commerce), the Real Estate Settlement 3 Table of Contents Procedures Act, and the Electronic Funds Transfer Act, as well as other federal, state and local laws.
The Company's activities, or those of its subsidiary bank, Tompkins Community Bank, are also subject to regulation under the Federal Reserve Act, the Federal Deposit Insurance Act, the Dodd-Frank Act, the Truth-in-Lending Act (which governs disclosures of credit terms to consumer borrowers), the Truth-in-Savings Act, the Equal Credit Opportunity Act, the Fair Credit Reporting Act (which governs the manner in which consumer debts may be collected by collection agencies), the Home Mortgage Disclosure Act (which requires financial institutions to provide certain information about home mortgage and refinanced loans), the Servicemembers Civil Relief Act, Section 5 of the Federal Trade Commission Act (which prohibits unfair or deceptive acts and practices in or affecting commerce), the Real Estate Settlement Procedures Act, and the Electronic Funds Transfer Act, as well as other federal, state and local laws.
Subject to certain exceptions set forth in the Federal Reserve Act and its implementing regulations, found at Regulation W, a bank may enter into "covered transactions" with its affiliates if the aggregate amount of the covered transactions with any single affiliate does not exceed 10 percent of the bank's capital stock and surplus or 20 percent of the bank's capital stock and surplus for covered transactions with all affiliates.
Subject to certain exceptions set forth in the Federal Reserve Act and its implementing regulations, found in FRB Regulation W, a bank may enter into "covered transactions" with its affiliates if the aggregate amount of the covered transactions with any single affiliate does not exceed 10 percent of the bank's capital stock and surplus or 20 percent of the bank's capital stock and surplus for covered transactions with all affiliates.
We cannot determine the ultimate effect that future legislation or implementing regulations would have upon our financial condition or upon our results of operations or the result of operations of any of our subsidiaries .
We cannot determine the ultimate effect that future legislation or implementing regulations would have upon our financial condition or upon our results of operations or the results of operations of any of our subsidiaries .
Any capital loans by a bank holding company to a subsidiary bank are subordinated in right of payment to deposits and to certain other indebtedness of such subsidiary banks.
Any capital loans by a bank holding company to a subsidiary bank are subordinated in right of payment to deposits and to certain other indebtedness of such subsidiary bank.
Tompkins Community Bank's failure to comply with any of the consumer financial laws can result in civil actions, regulatory enforcement action by the federal banking agencies and the U.S. Department of Justice. Additionally, the Dodd-Frank Act established a new Consumer Financial Protection Bureau ("CFPB") with broad powers to supervise and enforce consumer protection laws.
Tompkins Community Bank's failure to comply with any of the consumer financial laws can result in civil actions, regulatory enforcement action by the federal banking agencies and the U.S. Department of Justice. Additionally, the Dodd-Frank Act established the Consumer Financial Protection Bureau ("CFPB") with broad powers to supervise and enforce consumer protection laws.
Tompkins Community Bank also has two full-service branches in Fayetteville and Syracuse, New York which are located in Onondaga County. Tompkins Western New York ("WNY") We operate 15 banking offices in our WNY market, in towns situated in and around the areas commonly known as the Genesee Valley region of New York State.
Tompkins Community Bank also has two full-service branches in Fayetteville and Syracuse, New York which are located in Onondaga County. Tompkins Western New York ("WNY") We operate 14 banking offices in our WNY market, in towns situated in and around the areas commonly known as the Genesee Valley region of New York State.
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 December 31, 2023, the Company had one wholly-owned banking subsidiary, Tompkins Community Bank.
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 December 31, 2024, the Company had one wholly-owned banking subsidiary, Tompkins Community Bank.
These consumer financial laws include the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Fair and Accurate Credit Transaction Act of 2003, Electronic Funds Transfer Act, the Expedited Funds Availability Act, the Truth in Lending Act, the Truth in Savings Act, the Home Mortgage Disclosure Act, and the Real Estate Settlement Procedures Act, and similar laws at the state level.
These consumer financial laws include the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Fair and Accurate Credit Transaction Act, Electronic Funds Transfer Act, the Expedited Funds Availability Act, the Truth in Lending Act, the Truth in Savings Act, the Home Mortgage Disclosure Act, and the Real Estate Settlement Procedures Act, and similar laws at the state level.
A description of markets served by Tompkins Community Bank are included below: Tompkins Central New York ("CNY") We operate 12 branches in our CNY market, with the largest market area being Tompkins County, which has a population of approximately 107,000.
A description of markets served by Tompkins Community Bank are included below: Tompkins Central New York ("CNY") We operate 12 branches in our CNY market, with the largest market area being Tompkins County, which has a population of approximately 104,000.
Regulatory Reform Legislation, some of which may be extensive and comprehensive in nature, is introduced in Congress and New York's legislature from time to time. Such legislation may change applicable statues and the operating environment in substantial and unpredictable ways.
Regulatory Reform Legislation, some of which may be extensive and comprehensive in nature, is introduced in Congress and New York's legislature from time to time. Such legislation may change applicable statutes and the operating environment in substantial and unpredictable ways.
For example, the Sarbanes-Oxley requirements include: (1) requirements for audit committees, including independence and financial expertise; (2) certification of financial statements by the chief executive officer and chief financial officer of the reporting company; (3) standards for auditors and regulation of audits; (4) disclosure and reporting requirements for the reporting company and directors and executive officers; and (5) a range of civil and criminal penalties for fraud and other violations of securities laws.
For example, the Sarbanes-Oxley requirements include: (1) requirements for audit committees, including independence and financial expertise; (2) certification of financial statements by the chief executive officer and chief financial officer of reporting companies; (3) standards for auditors and regulation of audits; (4) disclosure and reporting requirements for reporting companies and their directors and executive officers; and (5) a range of civil and criminal penalties for fraud and other violations of securities laws.
The assessment base for the special assessment is equal to a bank's estimated uninsured deposits, reported for the quarter that ended December 31, 2022, adjusted to exclude the first $5 billion in estimated uninsured deposits from the bank, or for banks that are part of a holding company with one or more subsidiary banks, at the banking organization level.
The assessment base for the special assessment is equal to a bank's estimated uninsured deposits, reported for the quarter ended December 31, 7 Table of Contents 2022, adjusted to exclude the first $5 billion in estimated uninsured deposits from the bank, or for banks that are part of a holding company with one or more subsidiary banks, at the banking organization level.
These limitations require disclosure of privacy policies and certain security breaches to consumers and, in some circumstances, allow consumers to 9 Table of Contents prevent disclosure of certain personal information to a non-affiliated third party. These provisions affect, among other things, how consumer information is transmitted through diversified financial companies and conveyed to outside vendors.
These limitations require disclosure of privacy policies and certain security breaches to consumers and, in some circumstances, allow consumers to prevent disclosure of certain personal information to a non-affiliated third party. These provisions affect, among other things, how consumer information is transmitted through diversified financial companies and conveyed to outside vendors.
Tompkins Community Bank is required to comply with the rules of the CFPB; however, these rules are generally enforced by our primary regulator, the FDIC. Cybersecurity The Company is subject to data security standards and privacy and data breach notice requirements as established by federal and state regulators. See Item 1C.
Tompkins Community Bank is required to comply with the rules of the CFPB; however, these rules are generally enforced by our primary regulator, the FDIC. 9 Table of Contents Cybersecurity The Company is subject to data security standards and privacy and data breach notice requirements as established by federal and state regulators. See Item 1C.
The SEC maintains an Internet website that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC, including material filed by the Company, at www.sec.gov. The information contained on the Company's website is provided for the information of the reader and it is not intended to be active links.
The SEC maintains an Internet website that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC, including material filed by the Company, at www.sec.gov. The information contained on the Company's website is provided for the information of the reader and they are not intended to be active links.
Although these risk management principles do not apply to the Tompkins directly based upon our current size, the OCC has indicated that all banks, regardless of their size, may have material exposures to climate-related financial and other risks that require prudent management.
Although these risk management principles do not apply to Tompkins directly based upon our current size, the OCC has indicated that all banks, regardless of their size, may have material exposures to climate-related financial and other risks that require prudent 10 Table of Contents management.
Copies of these reports are also available at no charge to any person who requests them, with such requests directed to Tompkins Financial Corporation, Investor Relations Department, P.O. Box 460, Ithaca, New York 14851, telephone no. (888) 503-5753.
Copies of these reports are also available at no charge to any person who requests them, with such requests directed to Tompkins Financial Corporation, Investor Relations Department, P.O. Box 460, Ithaca, New 11 Table of Contents York 14851, telephone no. (888) 503-5753.
The Company has an independent third party loan review process that samples, reviews, and validates the risk identification and assessment made by the lenders and credit personnel. The results of these reviews are presented to the Board of Directors of the Company’s banking subsidiary, and the Company’s Audit and Risk Committee.
The Company has an independent third party loan review process that samples, reviews, and validates the risk identification and assessment made by the lenders and credit personnel. The results of these reviews are presented to the Board of Directors of the Company’s banking subsidiary, and the bank's Credit Oversight Committee.
In reviewing applications seeking approval of merger and acquisition transactions, the bank regulatory authorities will consider, among other things, the competitive effect and public benefits of the transactions, the capital position of the combined organization, the risks to the stability of the U.S. banking or financial system, the applicant’s performance record under the CRA (see the section captioned "Community Reinvestment Act" included elsewhere in this item) and fair housing laws and the effectiveness of the subject organizations in combating money laundering activities.
In reviewing applications seeking approval of merger and acquisition transactions, the bank regulatory authorities will consider, among other things, the competitive effect and public benefits of the transactions, the capital position of the combined organization, the risks to the stability of the U.S. banking or financial system, the applicant’s performance record under the CRA (see the section captioned "Community Reinvestment Act", below) and fair housing laws and the effectiveness of the subject organizations in combating money laundering activities.
Various statutes and regulations limit the availability of cash dividends from Tompkins Community Bank and the dividends paid by Tompkins Community Bank are regulated by the NYSDFS and the FDIC under their general supervisory authority as it relates to a bank's 5 Table of Contents capital requirements.
Various statutes and regulations limit the availability of cash dividends from Tompkins Community Bank and the dividends paid by Tompkins Community Bank are regulated by the NYSDFS and the FDIC under their general supervisory authority as it relates to a bank's capital requirements.
The main business office for WNY is located in Batavia, New York and is shared with Tompkins Insurance. Our WNY market is a six-county market, much of which is rural in nature, but also includes Monroe County (population approximately 764,000), where the city of Rochester is located, and Erie County (population approximately 965,000) located near Buffalo, New York.
The main business office for WNY is located in Batavia, New York and is shared with Tompkins Insurance. Our WNY market is a six-county market, much of which is rural in nature, but also includes Monroe County (population approximately 748,000), where the city of Rochester is located, and Erie County (population approximately 946,000) located near Buffalo, New York.
Of the Company’s total employees, 859 are employed by Tompkins Community Bank, and 173 employees are employed by our subsidiary Tompkins Insurance Agencies, Inc. No employees are covered by a collective bargaining agreement, and the Company believes its employee relations are excellent. The Company’s demand for qualified candidates at all levels of its organization grows as the Company’s business grows.
Of the Company’s total employees, 846 are employed by Tompkins Community Bank, and 165 employees are employed by our subsidiary Tompkins Insurance Agencies, Inc. No employees are covered by a collective bargaining agreement, and the Company believes its employee relations are excellent. The Company’s demand for qualified candidates at all levels of its organization grows as the Company’s business grows.
A key component of the Company's recruitment and retention strategy is to offer employees at all levels the opportunity to participate in the Company’s success. The Company maintains a robust Profit-Sharing plan for all employees who meet minimum service requirements. As of December 31, 2023, 83% of all employees received a profit-sharing contribution during 2023.
A key component of the Company's recruitment and retention strategy is to offer employees at all levels the opportunity to participate in the Company’s success. The Company maintains a robust Profit-Sharing plan for all employees who meet minimum service requirements. As of December 31, 2024, 84% of all employees received a profit-sharing contribution during 2024.
On November 16, 2023, the FDIC issued a final rule that implements a special assessment to recover the loss to the DIF arising from the protection of uninsured depositors following the closures of Silicon Valley Bank and Signature Bank.
On November 16, 2023, the FDIC issued a final rule implementing a special assessment to recover the loss to the DIF arising from the protection of uninsured depositors following the closures of Silicon Valley Bank and Signature Bank.
Banking services consist primarily of attracting deposits from the areas served by Tompkins Community Bank's 56 banking offices (40 offices in New York and 16 offices in Pennsylvania), and using those deposits to originate a variety of commercial loans, agricultural loans, consumer loans, real estate loans, and leases in those same areas.
Banking services consist primarily of attracting deposits from the areas served by Tompkins Community Bank's 54 banking offices (38 offices in New York and 16 offices in Pennsylvania), and using those deposits to originate a variety of commercial loans, agricultural loans, consumer loans, real estate loans, and leases in those same areas.
Each of these agencies issue regulations and requires the filing of reports describing the activities and financial condition of the entities under its jurisdiction.
Each of these agencies issues regulations and requires the filing of reports describing the activities and financial condition of the entities under its jurisdiction.
The Company also offers incentive and/or equity compensation plans or programs to employees at many levels of the Company and, as of December 31, 2023, 54% of all employees had an opportunity to earn supplemental compensation reflective of their position and overall contributions towards the Company’s strategic objectives.
The Company also offers incentive and/or equity compensation plans or programs to employees at many levels of the Company and, as of December 31, 2024, 55% of all employees had an opportunity to earn supplemental compensation reflective of their position and overall contributions towards the Company’s strategic objectives.
Section 38 of the Federal Deposit Insurance Act ("FDIA") requires federal banking agencies to take "prompt corrective action" ("PCA") should an insured depository institution fail to meet certain capital adequacy standards.
The Federal Deposit Insurance Act ("FDIA") requires federal banking agencies to take "prompt corrective action" ("PCA") should an insured depository institution fail to meet certain capital adequacy standards.
Anti-Money Laundering and the USA Patriot Act The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 ("USA PATRIOT Act"), the Bank Secrecy Act, the Money Laundering Control Act, and other federal laws, collectively impose obligations on all financial institutions, including the Company, to implement policies, procedures and controls which are reasonably designed to detect and report instances of money laundering and the financing of terrorism.
Anti-Money Laundering and the USA Patriot Act The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 ("USA PATRIOT Act"), the Bank Secrecy Act of 1970 ("BSA"), the Money Laundering Control Act of 1986, and other 8 Table of Contents federal laws, collectively impose obligations on all financial institutions, including the Company, to implement policies, procedures and controls which are reasonably designed to detect and report instances of money laundering and the financing of terrorism.
The Company’s common stock is traded on the NYSE American under the Symbol "TMP" and as a result the Company is subject to the rules of the NYSE American for listed companies.
The Company’s common 3 Table of Contents stock is traded on the NYSE American under the Symbol "TMP" and as a result the Company is subject to the rules of the NYSE American for listed companies.
These regulations also provide for regulatory assessment of a bank’s record in meeting the needs of its service area when considering applications to establish branches, merger applications and applications to acquire the assets and assume the liabilities of another bank. As of December 31, 2023, the Company’s subsidiary bank had a rating of outstanding.
These regulations also provide for regulatory assessment of a bank’s record in meeting the needs of its service area when considering applications to establish branches, merger applications and applications to acquire the assets and assume the liabilities of another bank. As of December 31, 2024, the Company’s subsidiary bank had a CRA rating of satisfactory.
Share Repurchases and Dividends The ability of the Company to pay dividends on or to repurchase its common stock, and the ability of the Bank to pay dividends to the Company, may be restricted due to several factors including: (a) applicable federal and state corporate law and banking codes, (b) covenants contained in our subordinated debentures and borrowing agreements (as applicable), and (c) the regulatory authority of the FRB, the FDIC, and the NYSDFS.
Share Repurchases and Dividends The ability of the Company to pay dividends on or to repurchase its common stock, and the ability of Tompkins Community Bank to pay dividends to the Company, may be restricted due to several factors including: (a) applicable federal and state banking codes, (b) covenants contained in our borrowing agreements (as applicable), and (c) the regulatory authority of the FRB, the FDIC, and the NYSDFS.
In October 2022, the SEC adopted a final rule pursuant to the Dodd-Frank Act directing the national securities exchanges and associations, including the NYSE American LLC, to implement listing standards that require listed companies to adopt policies mandating the recovery or “clawback” of incentive-based, executive compensation in connection with accounting restatements due to material noncompliance with federal securities laws.
In October 2022, the SEC adopted a final rule pursuant to the Dodd-Frank Act directing the national securities exchanges and associations, including the NYSE American LLC, on which the Company's stock is listed for trading, to implement listing standards that require listed companies to adopt policies mandating the recovery or “clawback” of incentive-based, executive compensation in connection with accounting restatements due to material noncompliance with federal securities laws.
The population of the counties in our WNY market, other than Monroe and Erie, is approximately 199,000. 2 Table of Contents Tompkins Hudson Valley New York ("HV") We operate 13 banking offices in our HV market.
The population of the counties in our WNY market, other than Monroe and Erie, is approximately 198,000. 2 Table of Contents Tompkins Hudson Valley New York ("HV") We operate 12 banking offices in our HV market.
In general, the BHC Act limits the business of bank holding companies to banking, managing or controlling banks and other activities that the FRB has determined to be so closely related to banking.
In general, the BHC Act limits the business of bank holding companies to banking, managing or controlling banks, 4 Table of Contents and other activities that the FRB has determined to be closely related to banking.
The Basel III final capital framework, among other things, (i) introduces as a new capital measure "Common Equity Tier 1" ("CET1"), (ii) specifies that Tier 1 capital consists of CET1 and "Additional Tier 1 capital" instruments meeting specified requirements, (iii) defines CET1 narrowly by requiring that most adjustments to regulatory capital measures be made to CET1 and not to the other components of capital and (iv) expands the scope of the adjustments as compared to existing regulations.
The Basel III capital framework, among other things, (i) includes the capital measure, "Common Equity Tier 1" ("CET1"), (ii) specifies that Tier 1 capital consists of CET1 and "Additional Tier 1 capital" instruments meeting 6 Table of Contents specified requirements, (iii) defines CET1 narrowly by requiring that most adjustments to regulatory capital measures be made to CET1 and not to the other components of capital and (iv) expands the scope of the adjustments as compared to existing regulations.
The 13 banking offices include 5 full-service offices in Putnam County, New York, 3 full-service offices in Dutchess County, New York, and 5 full-service offices in Westchester County, New York. Putnam County has a population of approximately 97,000 and is about 60 miles north of Manhattan.
The 12 banking offices include 4 full-service offices in Putnam County, New York, 3 full-service offices in Dutchess County, New York, and 5 full-service offices in Westchester County, New York. Putnam County has a population of approximately 98,000 and is about 60 miles north of Manhattan.
The Company is also mindful of macroeconomic factors 11 Table of Contents impacting the financial services industry such as inflation, rising interest rates and continued low unemployment in all four of its markets and it routinely undertakes a salary review to confirm that its total compensation is aligned with the market.
The Company is also mindful of macroeconomic factors impacting the financial services industry, such as inflation and continued low unemployment in all four of its markets, and it routinely undertakes a salary and benefit review to confirm that its total compensation is aligned with the market.
The Dodd-Frank Act additionally requires capital requirements to be counter-cyclical so that the required amount of capital increases in times of economic expansion and decreases in times of economic contraction, consistent with safety and soundness. 6 Table of Contents Under federal regulations, bank holding companies and banks must meet certain risk-based capital requirements.
The Dodd-Frank Act additionally requires capital requirements to be counter-cyclical so that the required amount of capital increases in times of economic expansion and decreases in times of economic contraction, consistent with safety and soundness. Under federal regulations, bank holding companies and banks must meet certain risk-based capital requirements, commonly known as "Basel III".
Local Acorn Community Alliance teams were established in each of the Company's markets to support our external diversity, equity, and inclusion initiatives through their focus on providing Education, Volunteering and Sponsorship opportunities that meet the needs of their local communities. Available Information The Company maintains a website at www.tompkinsfinancial.com.
These Local Acorn Community Alliance teams were established in each of the Company's markets to support our external service efforts, through their focus on providing education and volunteering opportunities that meet the needs of their local communities. Available Information The Company maintains a website at www.tompkinsfinancial.com.
Dutchess County has a population of approximately 295,000, and Westchester County has a population of approximately 1,021,000. Tompkins Pennsylvania ("PA") We operate 16 banking offices in Pennsylvania, including one limited-service office.
Dutchess County has a population of approximately 297,000, and Westchester County has a population of approximately 991,000. Tompkins Pennsylvania ("PA") We operate 16 banking offices in Pennsylvania, including one limited-service office.
As of December 31, 2023, the Company's total assets on a consolidated basis were $7.8 billion. 4 Table of Contents Federal Bank Holding Company ("BHC") Regulation We are a bank holding company subject to regulation under the BHC Act and the examination and reporting requirements of the FRB.
As of December 31, 2024, the Company's total assets on a consolidated basis were $8.1 billion. Federal Bank Holding Company ("BHC") Regulation We are a bank holding company subject to regulation under the BHC Act and the examination and reporting requirements of the FRB.
The Basel III Capital Rules require Tompkins to maintain (i) a minimum ratio of CET1 to risk-weighted assets of 4.5%, plus a 2.5% capital conservation buffer (resulting in a minimum ratio of CET1 to risk-weighted assets of 7.0%), (ii) a minimum ratio of Tier 1 capital to risk- weighted assets of 6.0%, plus the capital conservation buffer (resulting in a minimum Tier 1 capital ratio of 8.5%), (iii) a minimum ratio of Total capital (that is, Tier 1 plus Tier 2) to risk-weighted assets of 8.0%, plus the capital conservation buffer (resulting in a minimum total capital ratio of 10.5%), and (iv) a minimum leverage ratio of 4.0%, calculated as the ratio of Tier 1 capital to average assets.
The Basel III capital rules require Tompkins to maintain minimum capital ratios, which include an additional capital conservation buffer of 2.5%, as follows: (i) a minimum ratio of CET1 to risk-weighted assets of 7.0%, (ii) a minimum ratio of Tier 1 capital to risk-weighted assets of 8.5%, (iii) a minimum ratio of Total capital (that is, Tier 1 plus Tier 2) to risk-weighted assets of 10.5%, and (iv) a minimum leverage ratio of 4.0%, calculated as the ratio of Tier 1 capital to average assets.
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, Tompkins Community Bank competes 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.
In one or more aspects of its business, Tompkins Community Bank competes 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.
Another important tool in the Company's recruiting and retention strategy is the availability of a remote or hybrid scheduling option for the majority of team members. Today over half of the Company's employees have taken advantage of this opportunity.
Another important tool in the Company's recruiting and retention strategy is the availability of a remote or hybrid scheduling option for the majority of team members. As of the date of this report, just under half of the Company's employees have taken advantage of this opportunity.
The 16 banking offices include 10 offices in Berks County, 3 offices in Montgomery County, 1 office in Philadelphia County, 1 office in Delaware County and 1 office in Schuylkill County. The population of the counties served by PA is Philadelphia: 1.6 million, Montgomery: 846,000, Delaware: 582,000, Berks: 434,000 and Schuylkill: 141,000. The main office is located in Wyomissing, Pennsylvania.
The 16 banking offices include 10 offices in Berks County, 3 offices in Montgomery County, 1 office in Philadelphia County, 1 office in Delaware County and 1 office in Schuylkill County. The population of the counties served by PA is Philadelphia: 1.6 million, Montgomery: 869,000, Delaware: 577,000, Berks: 433,000 and Schuylkill: 144,000. The main office is located in Wyomissing, Pennsylvania.
FDIC insurance expense totaled $4.3 million, $2.8 million, and $2.8 million in 2023, 2022 and 2021, respectively.
FDIC insurance expense totaled $5.7 million, $4.3 million, and $2.8 million in 2024, 2023 and 2022, respectively.
In addition to these shared offices, Tompkins Insurance has four stand-alone offices in Western New York, and one stand-alone office in Tompkins County, New York. 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.
In addition to these shared offices, Tompkins Insurance has four stand-alone offices in Western New York. 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.
For further information concerning the regulatory capital requirements, actual capital amounts and the ratios of Tompkins and Tompkins Community Bank, see the discussion in "Note 20 - Regulations and Supervision" in Notes to Consolidated Financial Statements in Part II, "Item 8.
For further information concerning the regulatory capital requirements, actual capital amounts and the ratios of Tompkins and Tompkins Community Bank, see the discussion in "Note 19 - Regulations and Supervision" in the Notes to Consolidated Financial Statements in Part II, "Item 8. Financial Statements and Supplementary Data" of this Report on Form 10-K.
In addition, these regulators must establish regulations or guidelines requiring enhanced disclosure to regulators of incentive-based compensation arrangements. The agencies proposed such regulations in May 2016, which have not been finalized.
In addition, these regulators must establish regulations or guidelines requiring enhanced disclosure to regulators of incentive-based compensation arrangements. The agencies proposed such regulations in May 2016, and in May 2024 reproposed the text of the 2016 proposed regulations.
The Company’s lending function is managed within the guidelines of a comprehensive Board of Directors-approved lending policy. Policies and procedures are reviewed on a regular basis. Reporting systems are in place to provide management with ongoing information related to loan production, loan quality, concentrations of credit, loan delinquencies and 1 Table of Contents nonperforming and potential problem loans.
Policies and procedures are reviewed on a regular basis. Reporting systems are in place to provide management with ongoing information related to loan production, loan quality, concentrations of credit, loan delinquencies and 1 Table of Contents nonperforming and potential problem loans.
For example, in March 2022, the SEC issued a proposed rule on the enhancement and standardization of climate-related disclosures for investors. The proposed rule would require public issuers, including us, to significantly expand the scope of climate-related disclosures in their SEC filings.
For example, in March 2024, the SEC issued a final rule which would require public issuers, including us, to significantly expand the scope of climate-related disclosures in their SEC filings.
Employees and Human Capital Tompkins culture is underpinned by its core values, including “a commitment to our employees.” As of December 31, 2023, the Company had 1,032 total employees, which included 942 full-time employees and 90 part-time and temporary employees.
Employees and Human Capital Tompkins' culture is underpinned by its core values, including a commitment to our employees. As of December 31, 2024, the Company had 1,011 total employees, which included 941 full-time employees and 70 part-time and temporary employees.
Climate-Related and Other ESG Developments In recent years, federal, state and international lawmakers and regulators have increased their focus on financial institutions' and other companies' risk oversight, disclosures and practices in connection with climate change and other environmental, social and governance (“ESG”) matters.
We believe the Company is compliant with all applicable state and federal regulations regarding incentive compensation. Climate-Related Risk and Disclosure In recent years, federal, state and international lawmakers and regulators have increased their focus on financial institutions' and other companies' risk oversight, disclosures and practices in connection with climate change and other environmental, social and governance (“ESG”) matters.
Our ability to pay dividends to our stockholders or to repurchase shares of our common stock is subject to the restrictions set forth in applicable corporate laws.
Our ability to pay dividends to our stockholders or to repurchase shares of our common stock is also subject to restrictions set forth in the New York Business Corporation Law.
Our strategy includes a focus on building a scalable foundation based on a continuous improvement approach necessary for our long term success. This foundation includes investments in automation, analytics and security to drive ongoing consistency, efficiency, and security in our operations.
Our strategy includes a focus on building a scalable foundation based on a continuous improvement approach necessary for our long-term success. This foundation includes investments in automation, analytics and security to drive ongoing consistency, efficiency, and security in our operations. We also recognize the need to develop and acquire talent that is well prepared to succeed in our changing industry.
Tompkins Community Bank may declare a dividend without the approval of the NYSDFS and FDIC as long as the total dividends declared in a calendar year do not exceed the net income for the current fiscal year, plus the retained net income for the prior two fiscal years.
Tompkins Community Bank may declare a dividend without the approval of the NYSDFS and FDIC as long as the total dividends declared in a calendar year do not exceed its net income for the current fiscal year, plus the retained net income for the prior two fiscal years. 5 Table of Contents Transactions with Affiliates and Other Related Parties Transactions between Tompkins Community Bank and its affiliates are regulated under federal banking law.
The Company also has a robust talent review and succession process. Significant time is spent at the Senior Leadership and Management level identifying and providing development for potential successors. The Company strives to promote a culture of diversity, inclusion and belonging.
The Company also has a robust talent review and succession process. Significant time is spent at the Senior Leadership and Management level identifying and providing development for potential successors. The Company strives to promote a culture where all people feel welcome to be our customers, employees, directors, and shareholders.
On October 24, 2023, the OCC, the FDIC and the Federal Reserve jointly finalized principles for climate-related financial risk management for national banks with more than $100 billion in total assets.
On October 21, 2021, the Financial Stability Oversight Council published a report identifying climate-related financial risks as an “emerging threat” to financial stability. On October 24, 2023, the OCC, the FDIC and the Federal Reserve jointly finalized principles for climate-related financial risk management for national banks with more than $100 billion in total assets.
Tompkins has operated in Ithaca, New York and surrounding communities since 1836. Tompkins Community Bank provides wealth management services through Tompkins Financial Advisors, a division of Tompkins Community Bank. As of December 31, 2023, Tompkins Community Bank had consolidated total assets of $7.8 billion, consolidated total loans of $5.6 billion, and consolidated total deposits of $6.4 billion.
Tompkins Community Bank provides wealth management services through Tompkins Financial Advisors, a division of Tompkins Community Bank. As of December 31, 2024, Tompkins Community Bank had consolidated total assets of $8.1 billion, consolidated total loans of $6.0 billion, and consolidated total deposits of $6.5 billion.
The Company has a wholly-owned insurance agency subsidiary, Tompkins Insurance Agencies, Inc. ("Tompkins Insurance"). 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 services. The Company’s principal offices are located at 118 E. Seneca St., P.O.
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").
Wealth management services are provided under the trade name Tompkins Financial Advisors. Tompkins Financial Advisors has office locations, and services are available, at certain of Tompkins Community Bank's branch locations. Subsidiaries Tompkins Community Bank Tompkins Community Bank operates 56 branches, 40 branches in New York, and 16 located in Pennsylvania.
Tompkins Financial Advisors has office locations, and services are available, at certain of Tompkins Community Bank's branch locations. Subsidiaries Tompkins Community Bank Tompkins Community Bank operates 54 branches, 38 branches in New York, and 16 located in Pennsylvania. Tompkins has operated in Ithaca, New York and surrounding communities since 1836.
The Board also approved to increase initial base deposit insurance assessment rate schedules uniformly by 2 basis points, which became effective January 1, 2023 and was applicable to the first quarterly assessment period of 2023.
The FDIC's Board of Directors also increased initial base deposit insurance assessment rate schedules uniformly by 2 basis points, effective in the first quarterly assessment period of 2023.
The Company has adopted a clawback policy that is intended to comply with the NYSE American listing standards.The Company's right to recover excess incentive compensation provided by this policy are in addition to any other remedies available to the Company under applicable law, policy or agreement, including without limitation those rights described under Section 304 of Sarbanes-Oxley. 10 Table of Contents Additionally, the FRB, OCC and FDIC have issued comprehensive final guidance on incentive compensation policies intended to ensure that the incentive compensation policies of banking organizations do not undermine the safety and soundness of such organizations by encouraging excessive risk-taking.
The Company has adopted a clawback policy that is intended to comply with the NYSE American listing standards.The Company's rights under this policy to recover excess incentive compensation are in addition to any other remedies available to the Company under applicable law, policy or agreement, including without limitation those rights described under Section 304 of Sarbanes-Oxley.
Narrative Description of Business The Company has identified three business segments, consisting of banking, insurance and wealth management. Banking services consist primarily of attracting deposits from the areas served by the Company’s banking subsidiary and using those deposits to originate a variety of commercial loans, agricultural loans, consumer loans, real estate loans, and leases in those same areas.
Banking services consist primarily of attracting deposits from the areas served by the Company’s banking subsidiary and using those deposits to originate a variety of commercial loans, agricultural loans, consumer loans, real estate loans, and leases in those same areas. The Company’s lending function is managed within the guidelines of a comprehensive Board of Directors-approved lending policy.
Tompkins Insurance Agencies, Inc. Tompkins Insurance is headquartered in Batavia, New York. Insurance services include property and casualty insurance, employee benefit consulting, and life, long-term care and disability insurance. Over the years, Tompkins Insurance has acquired smaller insurance agencies in the market areas served by Tompkins Community Bank and successfully consolidated them into Tompkins Insurance.
Tompkins Insurance Agencies, Inc. Tompkins Insurance is headquartered in Batavia, New York. Insurance services include property and casualty insurance, employee benefit consulting, and life, long-term care and disability insurance. Tompkins Insurance offers services to customers of the Tompkins Community Bank by sharing offices within Western New York, Central New York and Pennsylvania.
Box 460, Ithaca, New York, 14850, and its telephone number is (888) 503-5753.
The Company’s principal offices are located at 118 E. Seneca St., P.O. Box 460, Ithaca, New York, 14850, and its telephone number is (888) 503-5753.
The FDIC will collect the special assessment at an annual rate of approximately 13.4 basis points, over eight quarterly assessment periods. The Company is not subject to the special assessment as its uninsured deposits at of December 31, 2022, were below the $5 billion exclusion.
The Company is not subject to the special assessment as its uninsured deposits for the December 31, 2022, reporting period, the measurement period for the special assessment, were below the $5 billion exclusion.
The Company is also subject to the NYSDFS rule "Guidance on Incentive Compensation Arrangements," which directs all New York state regulated banks (including Tompkins Community Bank) to ensure that any employee incentive arrangements do not encourage inappropriate risk-taking or improper sales practices.
The Company is also subject to the NYSDFS' "Guidance on Incentive Compensation Arrangements," applicable to all New York state regulated banks (including Tompkins Community Bank), which provides that incentive compensation may not be tied to employee performance indicators unless the bank has effective risk management, oversight and control systems in place.
Tompkins Insurance offers services to customers of the Tompkins Community Bank by sharing offices within Western New York, Central New York and Pennsylvania. In addition to these shared offices, Tompkins Insurance has four stand-alone offices in Western New York, and 1 office located in Tompkins County.
In addition to these shared offices, Tompkins Insurance has four stand-alone offices in Western New York. Competition Competition for commercial banking and other financial services is strong in the Company’s market areas.
The centralized Talent Acquisition Team reported challenges in recruiting and retaining talent in our insurance and financial advisory sales positions, but this stabilized toward the end of 2023.
In 2024, Tompkins' centralized Talent Acquisition Team reported challenges in recruiting and retaining qualified talent in our insurance sales positions due to competition for a limited number of experienced individuals.
The Company's enterprise-wide Diversity, Inclusion & Belonging Action Team focuses on initiatives and events that recognize and engage our employees, and strengthens our employees’ sense of belonging within our organization.
Our leadership team sponsors initiatives and events that recognize and engage our employees, and strengthen our employees’ sense of belonging within our organization. These initiatives include educational opportunities, celebrating cultural events, and sponsoring local teams that enhance our employee engagement.
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We also recognize the need to develop and acquire talent that is well prepared to succeed in our changing industry. Initiatives in this area include a focus on characteristics such as collaboration, innovation and agility, while also promoting and embracing diversity, inclusion and belonging in our workforce.
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Initiatives in this area include a focus on characteristics such as collaboration, innovation and agility. Narrative Description of Business The Company has identified three business segments, consisting of banking, insurance and wealth management.
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Transactions with Affiliates and Other Related Parties Transactions between Tompkins Community Bank and its affiliates are regulated under federal banking law.
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A depository institution is deemed to be “well-capitalized” if the institution has a total risk-based capital ratio of 10.0% or greater, a CET1 ratio of 6.5% or greater, a Tier 1 risk-based capital ratio of 8.0% or greater, and a leverage ratio of 5.0% or greater, and the institution is not subject to an order, written agreement, capital directive or prompt corrective action directive to meet and maintain a specific level for any capital measure.
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Under the Basel III Capital Rules, the effect of certain accumulated other comprehensive items are not excluded, which could result in significant variations in the level of capital depending upon the impact of interest rate fluctuations on the fair value of the Company’s securities portfolio.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeFor information about how the Company manages its interest rate risk, refer to Part II, Item 7A, "Quantitative and Qualitative Disclosures About Market Risk" of this Report.
Biggest changeFor information about how the Company manages its interest rate risk, refer to Part II, Item 7A, "Quantitative and Qualitative Disclosures About Market Risk" of this Report. 13 Table of Contents Adverse developments affecting the banking industry, and resulting media coverage, have contributed to market volatility and regulatory scrutiny in the banking system and have negatively impacted the Company's results of operations and/or stock price, and such adverse effects on the Company could recur or continue.
For example, changes in interest rates or interest rate spreads may: • affect the difference between the interest that the Company earns on assets and the interest that the Company pays on liabilities, which impacts the Company's overall net interest income and profitability. • adversely affect the ability of borrowers to meet obligations under variable or adjustable rate loans and other debt instruments, which in turn, affects the Company's loss rates on those assets. • decrease the demand for interest rate-based products and services, including loans and deposits. • affect prepayment rates on the Company's loans and securities, which could adversely affect the Company's earnings, financial condition and cash flow.
For example, changes in interest rates or interest rate spreads may: • affect the difference between the interest that the Company earns on assets and the interest that the Company pays on liabilities, which impacts the Company's overall net interest income and profitability; • adversely affect the ability of borrowers to meet obligations under variable or adjustable rate loans and other debt instruments, which in turn, affects the Company's loss rates on those assets; • decrease the demand for interest rate-based products and services, including loans and deposits; and • affect prepayment rates on the Company's loans and securities, which could adversely affect the Company's earnings, financial condition and cash flow.
Unauthorized access and/or disclosure of the confidential information of ours or our customers could (i) result in a violation of applicable privacy, data breach and other laws, subjecting us to additional regulatory scrutiny and exposing us to civil litigation, governmental action and possible financial liability; (ii) require significant management attention and resources to remedy the damages that result; and/or (iii) harm our reputation or and/or cause a decrease in the number of customers that choose to do business with us.
Unauthorized access and/or disclosure of the confidential information of ours or our customers could (i) result in a violation of applicable privacy, data breach and other laws, subjecting us to additional regulatory scrutiny and exposing us to civil litigation, governmental action and possible financial liability; (ii) require significant management attention and resources to remedy the damages that result; and/or (iii) harm our reputation and/or cause a decrease in the number of customers that choose to do business with us.
In that case, our operating margins and profitability would be adversely affected. Further, the volatility inherent in some of these funding sources, particularly including brokered deposits, may increase our exposure to liquidity risk. Any interruption in these sources of liquidity when needed could adversely affect our results of operations, financial condition, cash flow or regulatory capital levels.
In that case, our operating margins and profitability would be adversely affected. Further, the volatility inherent in some of these funding sources, particularly brokered deposits, may increase our exposure to liquidity risk. Any interruption in these sources of liquidity when needed could adversely affect our results of operations, financial condition, cash flow or regulatory capital levels.
Although the Company's clients’ business and financial interests may extend well beyond these markets, adverse economic conditions that affect these markets could disproportionately reduce the Company's growth rate, affect the ability of the Company's clients to repay their loans to the Company, affect the value of collateral underlying loans and generally affect the Company's financial condition and results of operations.
Although our clients’ business and financial interests may extend well beyond these markets, adverse economic conditions that affect these markets could disproportionately reduce the Company's growth rate, affect the ability of the Company's clients to repay their loans to the Company, affect the value of collateral underlying loans and generally affect the Company's financial condition and results of operations.
A decline in U.S. domestic business and economic conditions, without rapid recovery, could have adverse effects on our business, including the following: • consumer and business confidence levels could be lowered and cause declines in credit usage, adverse changes in payment patterns, decreases in demand for loans or other financial products and services and decreases in deposits or investments in accounts with Company; • the Company’s ability to assess the creditworthiness of its customers may be impaired if the models and approaches the Company uses to select, manage and underwrite its customers become less predictive of future behaviors; • demand for and income received from the Company's fee-based services, including investment services and insurance commissions and fees, could decline, the cost to the Company to provide any or all products and services could increase, and the levels of assets under management could materially impact revenues from our trust and wealth management businesses; and • the credit quality or value of loans and other assets or collateral securing loans may decrease.
A decline in U.S. domestic business and economic conditions, without rapid recovery, could have adverse effects on our business, including the following: 14 Table of Contents • consumer and business confidence levels could be lowered and cause declines in credit usage, adverse changes in payment patterns, decreases in demand for loans or other financial products and services and decreases in deposits or investments in accounts with Company; • the Company’s ability to assess the creditworthiness of its customers may be impaired if the models and approaches the Company uses to select, manage and underwrite its customers become less predictive of future behaviors; • demand for and income received from the Company's fee-based services, including investment services and insurance commissions and fees, could decline, the cost to the Company to provide any or all products and services could increase, and the levels of assets under management could materially impact revenues from our trust and wealth management businesses; and • the credit quality or value of loans and other assets or collateral securing loans may decrease.
Additionally, banking regulators are authorized to take supervisory actions that may restrict or limit a financial institution's activities. Regulatory restrictions on our activities could adversely affect our costs and revenues, and may impair our ability to execute our strategic plans.
Banking regulators are authorized to take supervisory actions that may restrict or limit a financial institution's activities. Regulatory restrictions on our activities could adversely affect our costs and revenues, and may impair our ability to execute our strategic plans.
Gains or losses on these instruments may have a direct impact on the results of operations, including higher or lower income and earnings, unless we adequately hedge our positions.
Gains or losses on these instruments may have a direct impact on our results of operations, including higher or lower income and earnings, unless we adequately hedge our positions.
Conversely, increases in interest rates may result in a decrease in residential mortgage loan originations and mortgage prepayment speeds, directly impacting the value of these securities collateralized by residential mortgages. Management evaluates investment securities for expected credit losses impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation.
Conversely, increases in interest rates may result in a decrease in residential mortgage loan originations and mortgage prepayment speeds, directly impacting the value of these securities collateralized by residential mortgages. Management evaluates investment securities for expected credit-related impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation.
The Company is subject to extensive state and federal laws and regulations, supervision and legislation that affect how it conducts its business. The majority of these laws and regulations are for the protection of consumers, depositors and the deposit insurance funds. The regulations influence such things as the Company’s lending practices, capital structure, investment practices, and dividend policy.
The Company is subject to extensive state and federal laws and regulations, supervision and legislation that affect how it conducts its business. The majority of these laws and regulations are for the protection of consumers, depositors and the deposit insurance fund. The regulations influence such things as the Company’s lending practices, capital structure, investment practices, and dividend policy.
The Company is a separate and distinct legal entity from its subsidiaries, and therefore the Company relies primarily on dividends from its banking and other subsidiaries to meet its obligations and to provide funds for the payment of dividends to the Company’s shareholders, to the extent declared by the Company’s board of directors.
The Company is a separate and distinct legal entity from its subsidiaries, and therefore the Company relies primarily on dividends from its subsidiaries to meet its obligations and to provide funds for the payment of dividends to the Company’s shareholders, to the extent declared by the Company’s board of directors.
The Dodd-Frank Act, which established the CFPB, and enacted other reforms, has had, and will continue to have, a significant effect on the entire financial services industry. Compliance with these regulations and other initiatives negatively impacts revenue and increases the cost of doing business on an ongoing basis.
The Dodd-Frank Act, which established the CFPB and enacted other reforms, has had, and may continue to have, a significant effect on the entire financial services industry. Compliance with these regulations and other initiatives negatively impacts revenue and increases our cost of doing business on an ongoing basis.
The Company relies on certain external vendors to provide products and services necessary to maintain the day-to-day operations of the Company. Some of the products and services provided by vendors include key components of our business infrastructure including data processing and storage and internet connections and network access, among other products and 18 Table of Contents services.
The Company relies on certain external vendors to provide products and services necessary to maintain the day-to-day operations of the Company. Some of the products and services provided by vendors include key components of our business infrastructure including data processing and storage and internet connections and network access, among other products and services.
We cannot provide any assurance that we will be successful in overcoming these risks or any other problems encountered in connection with acquisitions and any of these risks, if realized, could have an adverse effect on our results of operations and financial condition.
We cannot provide any assurance that we 20 Table of Contents will be successful in overcoming these risks or any other problems encountered in connection with acquisitions and any of these risks, if realized, could have an adverse effect on our results of operations and financial condition.
In addition, to the extent changes in the political environment have a negative impact on us or on the markets in which we operate, our business, results of operations and financial condition could be materially and adversely impacted in the future.
In addition, to the extent changes in the political environment have a 12 Table of Contents negative impact on us or on the markets in which we operate, our business, results of operations and financial condition could be materially and adversely impacted in the future.
Any of these changes could have a material impact on our business, financial condition and results of operations. 14 Table of Contents Declines in asset values may result in impairment charges and may adversely affect the value of the Company’s results of operations, financial condition and cash flows.
Any of these changes could have a material impact on our business, financial condition and results of operations. Declines in asset values may result in impairment charges and may adversely affect the value of the Company’s results of operations, financial condition and cash flows.
The Company's operations are heavily concentrated in the New York State and, to a lesser extent, Pennsylvania and, as a result, the Company's financial condition, results of operations and cash flows are significantly impacted by changes in the economic 15 Table of Contents conditions in those areas.
The Company's operations are heavily concentrated in New York State and, to a lesser extent, Pennsylvania and, as a result, the Company's financial condition, results of operations and cash flows are significantly impacted by changes in the economic conditions in those areas.
Uncertainty and concern regarding soundness or creditworthiness of other financial institutions has been, and may be in the future, compounded by advances in technology that increase the speed at which deposits can be moved, as well as the speed and reach of media attention, including social media, and its ability to disseminate concerns or rumors, in each case potentially exacerbating liquidity concerns and market disruption within the financial services industry, and may increase the risk of a wider economic recession.
Uncertainty and concern regarding soundness or creditworthiness of other financial institutions has been, and may be in the future, compounded by advances in technology that increase the speed at which deposits can be moved, as well as the speed and reach of media attention, including social media, and its ability to disseminate concerns or rumors, in each case potentially exacerbating liquidity concerns and market disruption within the financial services industry.
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.
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 Company's Consolidated Statements of Condition, limited to the amount by which the amortized cost basis exceeds the fair value, with a corresponding adjustment to earnings.
The Company may be exposed to regulatory sanctions or liability if we do not timely detect and report money laundering or other illegal activities. We are required to comply with anti-money laundering and anti-terrorism laws.
The Company may be exposed to regulatory sanctions or liability if we do not timely detect and report money laundering or other illegal activities. We are required to comply with anti-money laundering and anti-terrorism laws applicable to financial institutions.
The Company also maintains important internal Company data such as personally identifiable information about its employees and information relating to operations. Customers and employees have been, and will continue to be, targeted by cybersecurity threats attempting to misappropriate confidential information such as passwords, bank account information or other personal or business information.
The Company also maintains important internal Company data such as personally identifiable information about its employees and information relating to operations. Customers and employees have been, and will continue to be, targeted by cybersecurity threats attempting to misappropriate confidential information such as passwords, bank account 17 Table of Contents information or other personal or business information.
In addition to the additional regulatory requirements that we will become subject to upon crossing this asset threshold, federal financial regulators may require the Company to, or the Company may proactively, take actions to prepare for compliance with such increased regulations before we exceed $10 billion in total consolidated assets.
In addition to the additional regulatory requirements that we will become subject to if we cross this asset threshold, federal financial regulators may require the Company to, or the Company may proactively, take actions to prepare for compliance with such increased regulations before we exceed $10 billion in total consolidated assets.
Any of these scenarios could adversely affect our liquidity, the value of our investment in FHLB common stock and our financial condition. A decline in the value of our goodwill and other intangible assets could adversely affect our financial condition and results of operations. As of December 31, 2023, the Company had $94.9 million of goodwill and other intangible assets.
Any of these scenarios could adversely affect our liquidity, the value of our investment in FHLB common stock and our financial condition. A decline in the value of our goodwill and other intangible assets could adversely affect our financial condition and results of operations. As of December 31, 2024, the Company had $94.8 million of goodwill and other intangible assets.
In the Company's ordinary course of business, it collects and retains large volumes of customer data, including personally identifiable information in various information systems that we maintain and in those maintained by third parties with whom we contract to provide data services.
The Company, in its ordinary course of business, collects and retains large volumes of customer data, including personally identifiable information in various information systems that we maintain and in those maintained by third parties with whom we contract to provide data services.
If information security is breached or difficulties or failures occur, despite the controls we and our third-party vendors have instituted, information may be lost or misappropriated or we and/or our customers may experience a 17 Table of Contents disruption in essential service or operations.
If information security is breached or difficulties or failures occur, despite the controls we and our third-party vendors have instituted, information may be lost or misappropriated or we and/or our customers may experience a disruption in essential service or operations.
The Company offers different types of commercial loans to a variety of businesses, and we believe commercial loans will continue to comprise a significant concentration of our loan portfolio in 2024 and beyond. Real estate lending is generally 12 Table of Contents considered to be collateral-based lending with loan amounts based on predetermined loan-to-collateral values.
The Company offers different types of commercial loans to a variety of businesses, and we believe commercial loans will continue to comprise a significant concentration of our loan portfolio in 2025 and beyond. Real estate lending is generally considered to be collateral-based lending with loan amounts based on predetermined loan-to-collateral values.
As of December 31, 2023, commercial and commercial real estate loans totaled $3.9 billion or 70.2% of total loans. The Company’s agricultural loans are often dependent upon the health of the agricultural industry in the location of the borrower, and the ability of the borrower to repay may be affected by many factors outside of the borrower’s control.
As of December 31, 2024, commercial and commercial real estate loans totaled $4.3 billion or 72.2% of the Company's total loans. The Company’s agricultural loans are often dependent upon the health of the agricultural industry in the location of the borrower, and the ability of the borrower to repay may be affected by many factors outside of the borrower’s control.
A breach of information or other technological security, including as a result of cyber-attacks, could have a material adverse effect on our business, financial condition and results of operations.
Fraudulent activity could have a material adverse effect on the Company’s business, financial condition and results of operations. A breach of information or other technological security, including as a result of cyber-attacks, could have a material adverse effect on our business, financial condition and results of operations.
Nonetheless, the risks associated with climate change are rapidly changing and evolving in an escalating fashion, making them difficult to assess due to limited data and other uncertainties.
Nonetheless, the risks associated 18 Table of Contents with climate change are rapidly changing and evolving in an escalating fashion, making them difficult to assess due to limited data and other uncertainties.
As a result, 19 Table of Contents the Company cannot predict the effect that future premium rates will have on its operations. Decreases in premium rates could adversely affect its operations and revenues.
As a result, the Company cannot predict the effect that future premium rates will have on its operations. Decreases in premium rates could adversely affect its operations and revenues.
Based on our historical growth rates and current size, it is possible that our total assets could exceed $10 billion dollars in the future. Our total consolidated assets on December 31, 2023 were $7.8 billion. Th e Dodd-Frank Act and its implementing regulations impose enhanced supervisory requirements on bank holding companies with more than $10 billion in total consolidated assets.
Based on our historical growth rates and current size, it is possible that our total assets could exceed $10 billion in the future. Our total consolidated assets as of December 31, 2024 were $8.1 billion. The Dodd-Frank Act and its implementing regulations impose enhanced supervisory requirements on bank holding companies with more than $10 billion in total consolidated assets.
These laws and regulations require us, among things, to enact policies and procedures to confirm the identity of our customers, and to report suspicious transactions to regulatory agencies. These laws and regulations are complex and require costly, sophisticated monitoring systems and qualified personnel.
These laws and regulations require us, among other things, to enact policies and procedures to verify the identity of our customers, and to report suspicious transactions to regulatory agencies. These laws and regulations are complex and compliance with them requires costly, sophisticated monitoring systems and qualified personnel.
The Company’s primary business of financial services involves substantial risk of legal liability. The Company and its subsidiaries are, from time to time, named or threatened to be named as defendants in various lawsuits arising from their respective business activities, including activities of companies they have acquired.
The Company and its subsidiaries are, from time to time, named or threatened to be named as defendants in various lawsuits arising from their respective business activities, including activities of companies they have acquired.
In addition, the Company is required to hold stock in FHLBNY. The amount of borrowed funds and repurchase agreements with the FHLBNY, and the amount of FHLBNY stock held by the Company, at its most recent fiscal year-end are discussed in Part II, Item 8 of this Report on Form 10-K.
The amount of borrowed funds and repurchase agreements with the FHLBNY, and the amount of FHLBNY stock held by the Company, at its most recent fiscal year-end are discussed in Part II, Item 8 of this Report on Form 10-K. There are 11 branches of the FHLB, including New York.
The most important counterparty for the Company, in terms of liquidity, is the Federal Home Loan Bank of New York ("FHLBNY"). The Company uses FHLBNY as its primary source of overnight funds and also has long-term advances and repurchase agreements with FHLBNY. The Company has placed sufficient collateral in the form of commercial and residential real estate loans at FHLBNY.
The most important counterparty for the Company, in terms of liquidity, is the Federal Home Loan 15 Table of Contents Bank of New York ("FHLBNY"). The Company uses FHLBNY as its primary source of overnight funds and also has long-term advances and repurchase agreements with FHLBNY.
Events affecting the financial services industry, including bank failures, have resulted in decreased confidence in banks among investors, customers and counterparties, which generated significant market volatility among publicly traded bank holding companies.
Adverse events affecting the financial services industry generally, including bank failures, has caused decreased confidence in the banking system among investors, customers and counterparties, which has generated market volatility among publicly traded bank holding companies.
Any such adverse effects on the FHLBNY could adversely affect our liquidity, the value of our investment in FHLBNY common stock, and could negatively impact our results of operations. 16 Table of Contents Systemic weakness in the FHLB could result in higher costs of FHLB borrowings, reduced value of FHLB stock, and increased demand for alternative sources of liquidity that are more expensive, such as brokered time deposits, the discount window at the Federal Reserve, or lines of credit with correspondent banks.
Systemic weakness in the FHLB system could result in higher costs of FHLB borrowings, reduced value of FHLB stock, and increased demand for alternative sources of liquidity that are more expensive, such as brokered time deposits, the discount window at the Federal Reserve, or lines of credit with correspondent banks.
Although the Company devotes substantial resources to maintaining effective policies and internal controls to identify and prevent such incidents, given the increasing sophistication of possible perpetrators, the Company may experience financial losses or reputational harm as a result of fraud. Fraudulent activity could have a material adverse effect on the Company’s business, financial condition and results of operations.
Although the Company devotes substantial resources to maintaining effective policies and internal controls to 16 Table of Contents identify and prevent such incidents, given the increasing sophistication of possible perpetrators, the Company may experience financial losses or reputational harm as a result of fraud.
As part of the Company’s commercial business lending activities, the Company originates agricultural loans, consisting of agricultural real estate loans and agricultural operating loans. As of December 31, 2023, $322.9 million or 5.8% of the Company’s total loan portfolio consisted of agriculturally-related loans, including $221.7 million in agricultural real estate loans and $101.2 million in agricultural operating loans.
As part of the Company’s commercial business lending activities, the Company originates agricultural loans, consisting of agricultural real estate loans and agricultural operating loans. As of December 31, 2024, $327.6 million or 5.4% of the Company’s total loan portfolio consisted of agriculturally-related loans, including $217.6 million in agricultural real estate loans and $110.0 million in agricultural operating loans.
Dividends on, redemption of, or repurchase of shares of the FHLBNY’s capital stock cannot occur unless the principal and interest due on all consolidated obligations have been paid in full.
The FHLBNY is jointly and severally liable along with the other FHLBs for the consolidated obligations issued on behalf of the FHLBs through the Office of Finance. Dividends on, redemption of, or repurchase of shares of the FHLBNY’s capital stock cannot occur unless the principal and interest due on all consolidated obligations have been paid in full.
Additionally, a significant portion of our loan portfolio at December 31, 2023 was secured by real estate and, if the real estate securing our assets is subject to environmental liability, our collateral position may be substantially weakened.
Additionally, a significant portion of our loan portfolio at December 31, 2024 was secured by real estate and, if the real estate securing our assets is subject to environmental liability, our collateral position may be substantially weakened. Any such environmental liabilities imposed on the Company could have a material adverse impact on the Company's financial condition or results of operations.
The policies and procedures that we have adopted in order to detect and prevent such illegal transactions may not be successful in eliminating all instances of such transactions.
The bank regulatory agencies have increased the 19 Table of Contents regulatory scrutiny of the anti-money laundering programs maintained by financial institutions. The policies and procedures that we have adopted in order to detect and prevent such illegal transactions may not be successful in eliminating all instances of such transactions.
These additional compliance costs, if they occur, may adversely affect our business, results of operations and financial condition. 20 Table of Contents The Company is or may become involved in lawsuits, legal proceedings, information-gathering requests, and investigations by governmental agencies or other parties that may lead to adverse consequences.
The Company is or may become involved in lawsuits, legal proceedings, information-gathering requests, and investigations by governmental agencies or other parties that may lead to adverse consequences. The Company’s primary business of financial services involves substantial risk of legal liability.
These events have, and could continue to, adversely impact the market price and volatility of the Company's common stock. High profile bank failures and other events may also result in potentially adverse changes to laws or regulations governing banks and bank holding companies or result in the impositions of restrictions through supervisory or enforcement activities, including higher capital requirements.
Additionally, high profile bank failures and other events affecting the banking industry have resulted in, and may continue to result in, potentially adverse changes to laws and regulations governing banks and bank holding companies or increased supervisory or enforcement activities, including higher capital requirements or FDIC insurance assessments or special assessments.
While we maintain specific "cyber" insurance coverage, which would apply in the event of many breach scenarios, the amount of coverage may not be adequate in any particular case. Furthermore, because cyber threat scenarios are inherently difficult to predict and can take many forms, some breaches may not be addressed and covered under our cyber insurance coverage.
Furthermore, because cyber threat scenarios are inherently difficult to predict and can take many forms, some breaches may not be addressed and covered under our cyber insurance coverage, or even if covered, our coverage may not be sufficient.
New regulatory requirements or changes to existing requirements could necessitate changes to the Company’s businesses, result in increased compliance costs and affect the profitability of such businesses. Refer to "Supervision and Regulation" in Part I, Item 1 - "Business" of this Report on Form 10‑K for additional information on material laws and regulations impacting the Company’s business.
Refer to "Supervision and Regulation" in Part I, Item 1 - "Business" of this Report on Form 10‑K for additional information on material laws and regulations impacting the Company’s business. Financial institutions have become subject to increased scrutiny, more intense supervision and regulation, and more supervisory findings and actions.
Any such environmental liabilities imposed on the Company could have a material adverse impact on the Company's financial condition or results of operations. 13 Table of Contents Market Risk The Company’s business and financial performance are impacted significantly by market interest rates and movements in those rates.
Market Risk The Company’s business and financial performance are impacted significantly by market interest rates and movements in those rates.
We may, therefore, incur significant compliance costs in an effort to ensure compliance before we reach $10 billion in total consolidated assets.
We may, therefore, incur significant compliance costs in an effort to ensure compliance although we have not reached $10 billion in total consolidated assets. These additional compliance costs, if they occur, may adversely affect our business, results of operations and financial condition.
Removed
Adverse developments affecting the banking industry, and resulting media coverage, have contributed to market volatility and eroded confidence in the banking system and could have a material effect on the Company's results of operations and/or stock price.
Added
Such events have, and any future events could, adversely impact the market price and volatility of the Company's common stock.
Removed
As a result, customers may choose to maintain deposits with other financial institutions or invest in higher yielding short term fixed income securities, which could adversely impact our liquidity and results of operations.
Added
The Company is required to maintain sufficient collateral in the form of commercial and residential real estate loans at FHLBNY. In addition, the Company is required to hold stock in FHLBNY.
Removed
There are 11 branches of the FHLB, including New York. The FHLBNY severally liable along with the other FHLBs for the consolidated obligations issued on behalf of the FHLBs through the Office of Finance.
Added
Any such adverse effects on the FHLBNY could adversely affect our liquidity and the value of our investment in FHLBNY common stock, and could negatively impact our results of operations.
Added
In addition, while we maintain specific "cyber" insurance coverage, which may apply in the event of many breach scenarios, the amount of coverage may not be adequate in any particular case.
Added
Any new regulatory agenda could bring new or changed regulatory requirements and enforcement priorities, which could necessitate changes to the Company’s businesses, result in increased compliance costs and affect the profitability of such businesses.
Added
The implementation and use of new and evolving Artificial Intelligence ("AI") technologies present uncertainties and challenges. The financial services industry is subject to rapid technological developments and innovations, including the use of AI technologies. The development and implementation of AI technologies is complex, and there are technical challenges associated with achieving the optimal level of accuracy, efficiency and reliability.
Added
The algorithms and models used in AI systems may have limitations, including biases, errors, or inability to handle certain data types or scenarios. The use of AI technologies by financial institutions and their customers, and the regulatory framework and expectations surrounding the use of AI technologies, are in their early stages.
Added
Flaws in the technology, ethical issues associated with the use of AI, new or increased regulation concerning the use of AI by financial institutions, and other challenges related to the use of AI may limit its usefulness and expose us to competitive harm, potential legal liability, and brand or reputational harm.
Added
Furthermore, there is a risk of system failures, disruptions, or vulnerabilities that could compromise the integrity, security or privacy of generated content.
Added
If we are unable to successfully use and manage AI technologies, such limitations or failures could result in reputational damage, inefficiencies, increased costs, and competitive harm, any of which could have a material adverse effect on our financial condition and results of operations. Item 1B. Unresolved Staff Comments None.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThis report includes emerging risks, overall program effectiveness/status, cybersecurity incidents, staffing, risk exceptions, and recommended enhancements to the program, as applicable. Annually, the Information Security Officer provides security related education to the Board and Audit and Risk Committee.
Biggest changeOn a quarterly basis, the Company’s Chief Information Security Officer ("CISO") presents the Company’s cybersecurity report and related material for review by the Audit and Risk Committee and then by the Board. This report includes emerging risks, overall program effectiveness/status, cybersecurity incidents, staffing, risk exceptions, and recommended enhancements to the program, as applicable.
The TISC is co-chaired by the Chief Technology Officer, who is responsible for the enterprise-wide information technology program and the Information Security Officer, who is responsible for the enterprise-wide information security program. The Information Security Officer is a Certified Information Systems Security Professional (CISSP), with over 20 years of experience in a combination of information technology and information security roles.
The TISC is co-chaired by the Chief Technology Officer, who is responsible for the enterprise-wide information technology program and the CISO, who is responsible for the enterprise-wide information security program. The CISO is a Certified Information Systems Security Professional (CISSP), with over 20 years of experience in a combination of information technology and information security roles.
The Company uses the Federal Financial Institutions Examination Council Cyber Assessment Tool (CAT), the National Institute of Standards and Technology (NIST) Cybersecurity Framework (CSF), the NYS DFS cybersecurity requirements and the Center for Internet Security (CIS) Critical Controls to help inform the Company of best practices for control implementation and potential risk mitigation opportunities that align with defined risk scenarios, and generally as a baseline for best practice control implementation.
The Company uses the Federal Financial Institutions Examination Council Cyber Assessment Tool (CAT), the National Institute of Standards and Technology (NIST) Cybersecurity Framework (CSF), the NYSDFS cybersecurity requirements and the Center for Internet Security (CIS) Critical Controls to help inform the Company of best practices for control implementation and potential risk mitigation opportunities that align with defined risk scenarios, and generally as a baseline for best practice control implementation.
The Company rates vulnerabilities based on the criticality of a vulnerability and/or the value of the asset associated with the vulnerability (people, systems, customer data, money).
The Company rates vulnerabilities based on the criticality of a vulnerability and/or the value of the asset associated with the vulnerability (for example, people, systems, customer data, or money).
Additionally, the Company leverages insights from independently-conducted penetration testing provided by external third-party assessors, as required by NY Department of Financial Services (DFS) cybersecurity regulations, to discover and evaluate potential vulnerabilities across the enterprise that should be contemplated within the overall cyber risk program.
Additionally, the Company leverages insights from independently-conducted penetration testing provided by external third-party assessors, as required by the NYSDFS cybersecurity regulations, to discover and evaluate potential vulnerabilities across the enterprise that should be contemplated within the overall cyber risk program.
The Information Security Officer has over eight years of leadership experience in the field of information security, and holds a Bachelor’s degree in Information Technology, with an Associate’s degree in Computer Network Managemen t.
The CISO has over nine years of direct leadership experience in the field of information security, and holds a Bachelor’s degree in Information Technology, with an Associate’s degree in Computer Network Managemen t.
The TISC coordinates and communicates with the Audit and Risk Committee on risk-related items through Company’s Enterprise Risk Management Committee. The TISC provides a forum for advising and sharing information among members of the Company’s senior leadership team and is compromised of Company risk owners with expertise across a wide range of financial, technical, operational, strategic, and cybersecurity skill sets.
The TISC provides a forum for advising and sharing information among members of the Company’s senior leadership team and is comprised of Company risk owners with expertise across a wide range of financial, technical, operational, strategic, and cybersecurity skill sets.
The ERMC is chaired by the Director of Enterprise Risk Management and the Chief Risk Officer, who oversees the governance of enterprise-wide Risk Management program(s).
The ERMC reports information about risk to the Audit and Risk Committee on a quarterly basis. The ERMC is chaired by the Director of Enterprise Risk Management and the Chief Risk Officer, who oversees the governance of enterprise-wide Risk Management program(s).
The Program includes a Security Response Team (“SRT”) assigned the responsibility to ensure the Company responds to, communicates and effectively remediates, isolates and restores business operations during any security incident. The SRT procedures are derived from the National Institute of Standards and Technology (NIST) Computer Security and incident Handling framework.
The Program includes a Security Response Team (“SRT”) assigned the responsibility to ensure the Company responds to, communicates and effectively remediates, isolates and restores business operations during any security incident.
The Company’s Technology and Information Security Committee (“TISC”) oversees the governance of the Company’s enterprise technology and information security programs, including strategy, management principals, risk and compliance. The TISC reviews the policies, strategy, emerging topics, risks and general compliance of the programs to ensure they are adequate and sufficient to govern and manage the associated risk of the Company.
The TISC reviews the policies, strategy, emerging topics, risks and general compliance of the programs to ensure they are adequate and sufficient to govern and manage the associated risk of the Company. The TISC coordinates and communicates with the Audit and Risk Committee on risk-related items through the Company’s Enterprise Risk Management Committee.
When a residual risk exceeds the desired threshold set by the Board-defined risk appetite of the organization, additional controls are recommended and implemented to reduce the potential risk to an acceptable level and provide appropriate management of the cyber risk exposure.
When a residual risk exceeds the desired threshold set by the Board-defined risk appetite of the organization, additional controls are recommended and implemented to reduce the potential risk to an acceptable level and provide appropriate management of the cyber risk exposure. 21 Table of Contents In conjunction with the FAIR assessment, the Company uses the MITRE Attack framework to identify the various exploitation techniques and tactics used by the most likely threat actors.
Annually, the Audit and Risk Committee reviews and recommends for approval to the Board the Information Security Policy, which outlines the roles, responsibilities, and objectives for the Program. On a quarterly basis, the Company’s Information 22 Table of Contents Security Officer presents the Company’s cybersecurity report and related material for review by the Audit and Risk Committee and the Board.
Annually, the Audit and Risk Committee reviews and recommends for approval to the Board the Company's Information Security Policy, which outlines the roles, responsibilities, and objectives for the Program.
In conjunction with the FAIR assessment, the Company uses the MITRE Attack framework to identify the various exploitation techniques and tactics used by the most likely threat actors. This framework informs the risk management process with valuable insight into some of the most common, or likely, cyber attacks the Company should address.
This framework informs the risk management process with valuable insight into some of the most common, or likely, cyber-attacks the Company should address.
The ERMC is comprised of senior leadership team members as well as critical subject matter experts with risk management experience. The ERMC reports information about risk to the Audit and Risk Committee on a quarterly basis.
As such, the ERMC reviews cyber risk exceptions, emerging risks, minutes from the TISC meetings, and reports on the health and risk associated with the Program. The ERMC is comprised of senior leadership team members as well as critical subject matter experts with risk management experience.
The Company has adopted the Factor Analysis for Information Risk (FAIR) assessment approach, an industry standard risk assessment methodology.
As discussed in further detail under the subheading "Governance" below, the Program is fully integrated with the Company's overall enterprise risk management systems and processes. The Company has adopted the Factor Analysis for Information Risk (FAIR) assessment approach, an industry standard risk assessment methodology.
Removed
The Enterprise Risk Management Committee (“ERMC”) is responsible for overall risk governance and management across Tompkins. As such, the committee reviews cyber risk exceptions, emerging risks, minutes from the TISC meetings, and reports on the health and risk associated with the Program.
Added
Annually, the CISO provides security related education to the Board and to the Audit and Risk Committee. The TISC oversees the governance of the Company’s enterprise technology and information security programs, including strategy, management principles, risk and compliance.
Added
The SRT procedures are derived from the National Institute of Standards and Technology (NIST) Computer Security and incident Handling framework. 22 Table of Contents The ERMC is responsible for overall risk governance and management across Tompkins.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties The Company’s executive offices are located at 118 East Seneca Street in Ithaca, New York. Tompkins Community Bank has 56 branch offices, of which 25 are owned and 31 are leased at market rents. The Company’s insurance subsidiary has 5 stand-alone offices, of which 3 are owned by the Company and 2 are leased at market rents.
Biggest changeItem 2. Properties The Company’s executive offices are located at 118 East Seneca Street in Ithaca, New York. Tompkins Community Bank has 54 branch offices, of which 25 are owned and 29 are leased at market rents. The Company’s insurance subsidiary has 4 stand-alone offices, of which 2 are owned by the Company and 2 are leased at market rents.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeAs of December 31, 2023, management, after consultation with legal counsel, does not anticipate that the aggregate ultimate liability arising out of litigation pending or threatened against the Company or its subsidiaries will be material to the Company’s consolidated financial position. On at least a quarterly basis, the Company assesses its liabilities and contingencies in connection with such legal proceedings.
Biggest changeAs of December 31, 2024, 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 would 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.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

18 edited+6 added−3 removed1 unchanged
Biggest changeHe was appointed President of Tompkins Community Bank WNY effective January 1, 2015 and President of Tompkins Community Bank effective January 1, 2022. From 2009 to 2014, Mr. McKenna was a senior vice president at The Bank of Castile, concentrating in commercial lending. Mr.
Biggest changeMs. Mastin currently serves as president of the Society for Human Resources Management of Tompkins County. 24 Table of Contents John M. McKenna has been employed by the Company since April 2009. He was appointed President of Tompkins Community Bank WNY effective January 1, 2015, and President of Tompkins Community Bank effective January 1, 2022. From 2009 to 2014, Mr.
Romaine has served as President and Chief Executive Officer of the Company since January 2007. From 2003 through 2006, he served as President and Chief Executive Officer of Mahopac Bank. Mr. Romaine currently serves on the board of the Federal Home Loan Bank of New York and the New York Bankers Association. David S.
Romaine has served as President and Chief Executive Officer of the Company since January 2007. From 2003 through 2006, he served as President and Chief Executive Officer of Mahopac Bank. Mr. Romaine currently serves on the board of the Federal Home Loan Bank of New York and the New York Bankers Association. Johanna B.
Guarino currently serves on the marketing and fundraising committee of Hub585, Inc., a nonprofit organization focused on youth and families. Ginger G. Kunkel has been employed by the Company since December 2021 as Executive Vice President and Chief Operating Officer of Tompkins Community Bank PA. In May 2022, Ms.
Guarino currently serves on the marketing and fundraising committee of Hub585, Inc., a nonprofit organization focused on youth and families. Ginger G. Kunkel joined the Company in December 2021 as Executive Vice President and Chief Operating Officer of Tompkins Community Bank PA. In May 2022, Ms.
(NASDAQ:FISI), a registered financial holding company with its principal headquarters located 24 Table of Contents in Warsaw, New York. There, Mr. Guarino oversaw areas such as marketing, retail banking, retail lending, wealth management and indirect auto lending, most recently serving as Senior Vice President, Chief Retail Lending Executive from June 2016 to March 2019. Mr.
Guarino spent 24 years with Financial Institutions, Inc., a registered financial holding company with its principal headquarters located in Warsaw, New York. There, Mr. Guarino oversaw areas such as marketing, retail banking, retail lending, wealth management and indirect auto lending, most recently serving as Senior Vice President, Chief Retail Lending Executive from June 2016 to March 2019. Mr.
Torcello served as Senior Vice President and Community Banking Manager for Western New York, where she oversaw all staff and operations in the Western New York branch network. 25 Table of Contents PART II
From 2013 until May 2023, Ms. Torcello served as Senior Vice President and Community Banking Manager for Western New York, where she oversaw all staff and operations in the Western New York branch network. 25 Table of Contents PART II
Guarino joined the Company in March 2019 as Senior Vice President, Manager of Retail & Small Business Lending, overseeing the bank's consumer, residential, small business and specialty lending areas. In October 2023, he was promoted to Executive Vice President and Chief Banking Operations Officer. Prior to joining the Company, Mr. Guarino spent 24 years with Financial Institutions, Inc.
Guarino joined the Company in March 2019 as Senior Vice President, Manager of Retail & Small Business Lending, overseeing the bank's consumer, residential, small business and specialty lending areas. In October 2023, he was promoted to Senior Vice President and Chief Banking Operations Officer. Prior to joining the Company, Mr.
Tomazin joined the Company in April 2019 as Vice President and Senior Quantitative Analyst and served as Senior Vice President and Treasurer from February 2021 to September 2023. From 2008 until April 2019, Mr. Tomazin served in accounting and strategic finance roles, most recently as Vice President and Assistant Treasurer with NBT Bancorp Inc.
Tomazin joined the Company in April 2019 as Vice President and Senior Quantitative Analyst and served as Senior Vice President and Treasurer from February 2021 to September 2023. From 2008 until April 2019, Mr.
Item 4. Mine Safety Disclosures Not applicable. 23 Table of Contents Information About Our Executive Officers The information concerning the Company’s executive officers is provided below as of February 29, 2024. Name Age Title Year Joined Company Stephen S. Romaine 59 President and CEO January 2000 David S. Boyce 57 Executive Vice President January 2001 David M.
Item 4. Mine Safety Disclosures Not applicable. Information About Our Executive Officers The information concerning the Company’s executive officers is provided below as of February 28, 2025. Name Age Title Year Joined Company Stephen S. Romaine 60 President and CEO January 2000 Matthew D. Tomazin 40 Executive Vice President, CFO and Treasurer April 2019 Johanna B.
She had previously been a partner in the corporate/securities practice group of Harris Beach PLLC, a regional law firm which she joined in 2006. Ms. Fontaine serves on the American Bankers Association General Counsels Committee. Johanna B. Anderson joined the Company in July 2023 as President of Tompkins Community Bank CNY and Executive Vice President. Ms.
She took on the additional responsibility of Chief Risk Officer in May 2022. She had previously been a partner in the corporate/securities practice group of Harris Beach PLLC, a regional law firm which she joined in 2006. Ms. Fontaine serves as the Chair of the American Bankers Association General Counsels Committee. Charles J.
Boyce joined the Company in January 2001 and was appointed President and Chief Executive Officer of Tompkins Insurance in 2002. He was promoted to Executive Vice President in April 2004. Mr. Boyce has served Tompkins Insurance and its predecessor company for 35 years. David M.
He was promoted to Executive Vice President of the Company in April 2004. Mr. Boyce has served Tompkins Insurance and its predecessor company for 36 years. David M. DeMilia joined Tompkins Mahopac Bank in April 2008 as a Regional Vice President, providing commercial banking services in Westchester County.
Anderson had served on the Tompkins Community Bank CNY Board and Board Loan Committee since 2020. Prior to joining the Company, Ms. Anderson served as Executive Director of Ithaca Neighborhood Housing Services, a nonprofit organization dedicated to expanding housing opportunities to low and moderate-income residents in Central New York from August 2017 to June 2023. Charles J.
Anderson served as Executive Director of Ithaca Neighborhood Housing Services, a nonprofit organization dedicated to expanding housing opportunities to low and moderate-income residents in Central New York, from August 2017 to June 2023. Matthew D. Tomazin has served as Executive Vice President, Chief Financial Officer & Treasurer of the Company since October 2023. Mr.
Kunkel served as Senior Executive Vice President and Chief Operating Officer of Riverview Financial Corporation from January 2019 to December 2021 and as Executive Vice President, Chief Banking Officer from March 2014 to January 2019. John M. McKenna has been employed by the Company since April 2009.
Kunkel served as Senior Executive Vice President and Chief Operating Officer of Riverview Financial Corporation from January 2019 to December 2021 and as Executive Vice President, Chief Banking Officer from March 2014 to January 2019. She serves as a board member for the Pennsylvania Bankers Association Services Corporation. Stacie M.
Torcello joined the Company in May 2005. In May 2023, she was appointed Executive Vice President and President of Tompkins Community Bank WNY overseeing Tompkins’ activities in the Western New York market. From 2013 until May 2023, Ms.
Taylor also served as President and a member of the board of trustees for the Wilmington Funds, a $14 billion mutual fund complex. Diane D. Torcello joined the Company in May 2005. In May 2023, she was appointed Executive Vice President of the Company and President of Tompkins Community Bank WNY overseeing Tompkins’ activities in the Western New York market.
DeMilia 48 Executive Vice President April 2008 Matthew D. Tomazin 39 Executive Vice President, CFO and Treasurer April 2019 Alyssa H. Fontaine 43 Executive Vice President, General Counsel, and CRO January 2016 Johanna B Anderson 44 Executive Vice President July 2023 Charles J Guarino 48 Executive Vice President and COO March 2019 Ginger G.
Anderson 45 Executive Vice President July 2023 David S. Boyce 58 Executive Vice President January 2001 David M. DeMilia 49 Executive Vice President April 2008 Alyssa H. Fontaine 44 Executive Vice President, General Counsel, and CRO January 2016 Charles J. Guarino 49 Senior Vice President and Chief Banking Operations Officer March 2019 Ginger G.
Kunkel 53 Executive Vice President December 2021 John M. McKenna 57 Executive Vice President April 2009 Susan M. Valenti 69 Executive Vice President of Corporate Marketing March 2012 Bonita N. Lindberg 67 Senior Vice President, Director of Human Resources December 2015 Diane D Torcello 61 Executive Vice President May 2005 Business Experience of the Executive Officers: Stephen S.
Kunkel 54 Executive Vice President December 2021 Stacie M. Mastin 46 Senior Vice President, Director of Human Resources January 2008 John M. McKenna 58 Executive Vice President April 2009 Eric W. Taylor 43 Executive Vice President July 2024 Diane D. Torcello 62 Executive Vice President May 2005 23 Table of Contents Business Experience of the Executive Officers: Stephen S.
In June 2021, he was appointed President of Tompkins Community Bank Hudson Valley overseeing Tompkins’ activities in the Hudson Valley region. Matthew D. Tomazin has served as Executive Vice President, Chief Financial Officer & Treasurer of the Company since October 2023. Mr.
In 2014, he was promoted to Senior Vice President before becoming Tompkins Community Bank Hudson Valley's Senior Commercial Loan Officer in October 2018. In June 2021, he was appointed President of Tompkins Community Bank HV, overseeing Tompkins’ activities in the Hudson Valley region. Alyssa H. Fontaine joined the Company in January 2016 as Executive Vice President and General Counsel.
(NASDAQ: NBT), a registered financial holding company with its principal headquarters located in Norwich, New York. Alyssa H. Fontaine joined the Company in January 2016 as Executive Vice President and General Counsel. She took on the additional responsibility of Chief Risk Officer in the first quarter of 2022.
Tomazin served in accounting and strategic finance roles, most recently as Vice President and Assistant Treasurer with NBT Bancorp Inc., a registered financial holding company with its principal headquarters located in Norwich, New York. David S. Boyce joined the Company in January 2001 and was appointed President and Chief Executive Officer of Tompkins Insurance in 2002.
McKenna has served as a member of the State Charter Advisory Board of the New York State Department of Financial Services since February 2024. Mr. McKenna previously served on the New York Bankers Association Political Action Committee. Susan M. Valenti joined the Company in March 2012 as Senior Vice President, Corporate Marketing.
McKenna was a senior vice president at The Bank of Castile, concentrating in commercial lending. Mr. McKenna has served as a member of the State Charter Advisory Board of the NYSDFS since February 2024. Eric W. Taylor rejoined the Company in July 2024 as Executive Vice President and President of Tompkins Financial Advisors. Mr.
Removed
DeMilia joined Tompkins Mahopac Bank in April 2008 as a regional vice president, providing commercial banking services in Westchester County. In 2014, he was promoted to senior vice president before becoming Tompkins Community Bank Hudson Valley senior commercial loan officer in October 2018.
Added
Anderson joined the Company in July 2023 as President of Tompkins Community Bank CNY and Executive Vice President. Ms. Anderson had served on the Tompkins Community Bank CNY Board and Board Loan Committee since 2020. Prior to joining the Company, Ms.
Removed
She was promoted to Executive Vice President of the Company in June 2014. Prior to joining the Company, Ms. Valenti spent 23 years at JPMorgan Chase working in a variety of marketing roles, most recently as Vice President of Chase Private Client Marketing Executive. Bonita N.
Added
Mastin has served as Senior Vice President and Director of Human Resources of the Company since May 2024. From May 2022 to May 2024, Ms. Mastin served as Vice President and Human Resources Manager for Corporate Culture. Ms.
Removed
Lindberg joined the Company in December 2015 as Senior Vice President, Director of Human Resources. Before joining the Company, Ms. Lindberg served as Director of Human Resources at Cortland Regional Medical Center from 2014 to 2015. Ms. Lindberg previously served as the Vice President of Human Resources and Director of Organizational Development at Albany International Corporation. Diane D.
Added
Mastin joined the Company in January 2008 as a senior learning and development business partner and has held various roles throughout her tenure, including human resources manager and wealth advisor from August 2019 to May 2022. From April 1997 to January 2008, Ms. Mastin held various roles, including branch manager, at M&T Bank, a banking subsidiary of M&T Bank Corporation.
Added
Taylor began his career with the Company in July 2007, serving as a financial consultant and trust officer until July 2009. Prior to rejoining the Company, Mr.
Added
Taylor spent 15 years in wealth management and institutional client services roles with subsidiaries of M&T Bank Corporation, including Wilmington Trust, N.A., a national banking association offering trust and wealth management services, and Wilmington Funds Management Corporation, an investment advisor registered under the Investment Advisers Act of 1940. From August 2018 to July 2024, Mr.
Added
Taylor served as Executive Vice President and Head of Investment Implementation and Investment Advisor Services of Wilmington Trust, N.A., where he was responsible for investment planning, account management and compliance, and the oversight of more than 70 client-facing investment advisors. From November 2022 to July 2024, Mr.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIssuer Purchases of Equity Securities The following table reflects all Company repurchases, including those made pursuant to publicly announced plans or programs, during the quarter ended December 31, 2023: 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 (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs Period (a) (b) (c) (d) October 1, 2023 through October 31, 2023 3,006 $ 49.92 0 $ 400,000 November 1, 2023 through November 30, 2023 17,248 $ 51.40 0 $ 400,000 December 1, 2023 through December 31, 2023 589 $ 61.76 0 $ 400,000 Total 20,843 $ 51.48 0 $ 400,000 Included above are 3,006 shares purchased in October 2023, at an average cost of $49.92, and 995 shares purchased in November 2023, at an average cost of $57.43, 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.
Biggest changeIssuer Purchases of Equity Securities The following table reflects all Company repurchases, including those made pursuant to publicly announced plans or programs, during the quarter ended December 31, 2024: 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 (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs Period (a) (b) (c) (d) October 1, 2024 through October 31, 2024 2,380 $ 59.19 0 $ 400,000 November 1, 2024 through November 30, 2024 14,276 $ 73.95 0 $ 400,000 December 1, 2024 through December 31, 2024 701 $ 67.83 0 $ 400,000 Total 17,357 $ 71.68 0 $ 400,000 Included above are 2,380 shares purchased in October 2024, at an average cost of $59.19, and 817 shares purchased in November 2024, at an average cost of $75.12, by the trustee of the rabbi trust established by the Company under the Company’s Second Amended and Restated Retainer Plan for Eligible Directors of Tompkins Financial Corporation and Participating Subsidiaries, which were part of the director deferred compensation under that plan.
Shares may be repurchased from time to time under the 2023 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.
Shares may be repurchased from time to time under the 2023 Repurchase Plan in open market transactions at prevailing market prices, in privately negotiated transactions, or by other means in accordance with federal securities laws. The repurchase program may be suspended, modified or terminated by the Board of Directors at any time for any reason.
The graph assumes $100.00 was invested on December 31, 2018, in the Company’s common stock and the comparison groups and assumes the reinvestment of all cash dividends prior to any tax effect and retention of all stock dividends.
The graph assumes $100.00 was invested on December 31, 2019, in the Company’s common stock and the comparison groups and assumes the reinvestment of all cash dividends prior to any tax effect and retention of all stock dividends.
On July 20, 2023, the Company’s Board of Directors authorized a replacement share repurchase plan (the “2023 Repurchase Plan”) under which it may repurchase up to 400,000 shares of the Company’s common stock over the 24 months following adoption of the plan.
On July 20, 2023, the Company’s Board of Directors authorized a share repurchase plan (the “2023 Repurchase Plan”) under which the Company may repurchase up to 400,000 shares of the Company’s common stock over the 24 months following adoption of the plan.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Price and Dividend Information The Company’s common stock is traded under the symbol "TMP" on the NYSE American. As of February 27, 2024, there are approximately 2,628 holders of shares of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Price and Dividend Information The Company’s common stock is traded under the symbol "TMP" on the NYSE American. As of February 24, 2024, there were approximately 2,634 holders of shares of our common stock.
Performance Graph The following graph compares the Company’s cumulative total stockholder return over the five-year period from December 31, 2018 through December 31, 2023, with (1) the total return for the NASDAQ Composite and (2) the total return for S&P U.S. BMI Banks index.
Recent Sales of Unregistered Securities None. 26 Table of Contents Performance Graph The following graph compares the Company’s cumulative total stockholder return over the five-year period from December 31, 2019 through December 31, 2024, with (1) the total return for the NASDAQ Composite and (2) the total return for S&P U.S. BMI Banks index.
As of December 31, 2023, no shares have been repurchased under the 2023 Repurchase Plan. 26 Table of Contents Recent Sales of Unregistered Securities None.
As of December 31, 2024, no shares have been repurchased under the 2023 Repurchase Plan.
In addition, the table includes 16,253 and 589 shares delivered to the Company in November 2023 and December 2023, respectively, at an average cost of $51.40 and $61.76, respectively, to satisfy mandatory tax withholding requirements upon vesting of restricted stock under the Company's 2009 and 2019 Equity Plans.
In addition, the table includes 13,459 and 701 shares delivered to the Company in November 2024 and December 2024, respectively, at an average cost of $73.88 and $67.83, respectively, to satisfy mandatory tax withholding requirements upon vesting of restricted stock under the 2019 Equity Plan.
The performance graph represents past performance and should not be considered an indication of future performance. Period Ending Index 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 Tompkins Financial Corporation 100.00 125.05 99.60 121.29 115.95 93.66 NASDAQ Composite 100.00 136.69 198.10 242.03 163.28 236.17 S&P U.S. BMI Banks Index 100.00 137.36 119.83 162.92 135.13 147.41 27 Table of Contents Item 6. Reserved
The performance graph represents past performance and should not be considered an indication of future performance. Period Ending Index 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 Tompkins Financial Corporation 100.00 79.65 96.99 92.72 74.90 88.20 NASDAQ Composite 100.00 144.92 177.06 119.45 172.77 223.87 S&P U.S. BMI Banks Index 100.00 87.24 118.61 98.38 107.32 143.68 Item 6. [Reserved.] 27 Table of Contents
Removed
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.
Removed
Under the 2021 Repurchase Plan, the Company had repurchased 380,182 shares as of July 20, 2023, at an average cost of $70.14. No further shares will be repurchased under the 2021 Repurchase Plan.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

188 edited+43 added−80 removed65 unchanged
Biggest changeNon-GAAP financial measures have limitations since they do not reflect all of the amounts associated with the Company's results of operations as determined in accordance with GAAP. 54 Table of Contents Reconciliation of Net Income Available to Common Shareholders/Diluted Earnings Per Share (GAAP) to Net Operating Income Available to Common Shareholders/Adjusted Diluted Earnings Per Share (Non-GAAP); Return on Average Assets and Return on Average Equity to Adjusted Return on Average Assets and Adjusted Return on Average Equity; and Adjusted Operating Return on Average Tangible Common Equity (Non-GAAP) For the year ended December 31, (In thousands, except per share data) 2023 2022 2021 2020 2019 Net income available to common shareholders $ 9,505 $ 85,030 $ 89,264 $ 77,588 $ 81,718 Less: income attributable to unvested stock-based compensations awards (42) (250) (615) (857) (1,306) Net earnings allocated to common shareholders (GAAP) 9,463 84,780 88,649 76,731 80,412 Diluted earnings per share (GAAP) 0.66 5.89 6.05 5.20 5.37 Adjustments for non-operating income and expense: Loss (gain) on sale of investment securities 70,019 634 (249) (443) (645) Purchase accounting related to redemption of trust preferred securities 0 0 1,849 0 0 Penalties on prepayment of FHLB borrowings 0 0 2,929 0 0 Write-down of real estate pending sale 0 0 0 673 0 Total adjustments 70,019 634 4,529 230 (645) Tax expense 17,155 155 1,110 56 (158) Total adjustments, net of tax 52,864 479 3,419 174 (487) Adjusted net income (Non-GAAP) 62,369 85,509 92,683 77,762 81,231 Net earnings allocated to common shareholders (Non-GAAP) 62,327 85,259 92,068 76,905 79,925 Weighted average shares outstanding (basic) 14,254,661 14,328,280 14,568,763 14,703,390 14,907,057 Weighted average shares outstanding (diluted) 14,301,221 14,404,294 14,648,167 14,751,303 14,973,951 Adjusted basic earnings per share (Non-GAAP) 4.37 5.95 6.32 5.23 5.36 Adjusted diluted earnings per share (Non-GAAP) 4.36 5.92 6.29 5.21 5.34 Net income available to common shareholders 9,505 85,030 89,264 77,588 81,718 Adjusted net income (Non-GAAP) 62,369 85,509 92,683 77,762 81,231 Average total assets 7,641,672 7,828,520 7,968,951 7,358,478 6,679,578 Return on average assets 0.12 % 1.09 % 1.12 % 1.05 % 1.22 % Adjusted return on average assets (Non-GAAP) 0.82 % 1.09 % 1.16 % 1.06 % 1.22 % Net income available to common shareholders 9,505 85,030 89,264 77,588 81,718 Adjusted net income (Non-GAAP) 62,369 85,509 92,683 77,762 81,231 Average total equity 634,732 641,725 724,477 699,554 651,341 Return on average equity 1.50 % 13.25 % 12.32 % 11.09 % 12.55 % Adjusted return on average equity (Non-GAAP) 9.83 % 13.32 % 12.79 % 11.12 % 12.47 % Net earnings allocated to common shareholders (Non-GAAP) 62,327 85,259 92,068 76,905 79,925 Average Tompkins Financial Corporation shareholders' equity (GAAP) 633,267 640,258 723,009 698,088 649,871 Amortization of intangibles 334 873 1,317 1,484 1,673 Tax expense 82 214 323 364 410 Amortization of intangibles, net of tax 252 659 994 1,120 1,263 Adjusted net operating income available to common shareholders' (Non-GAAP) 62,579 85,918 93,062 78,025 81,188 Average Tompkins Financial Corporation shareholders' equity 633,267 640,258 723,009 698,088 649,871 Average goodwill and intangibles 94,169 94,677 95,719 97,134 98,104 Average Tompkins Financial Corporation shareholders' tangible common equity (Non-GAAP) $ 539,098 $ 545,581 $ 627,290 $ 600,954 $ 551,767 Adjusted operating return on average shareholders' tangible common equity (Non-GAAP) 11.61 % 15.75 % 14.84 % 12.98 % 14.71 % 55 Table of Contents 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.
Biggest changeNon-GAAP financial measures have limitations since they do not reflect all of the amounts associated with the Company's results of operations as determined in accordance with GAAP. 53 Table of Contents Reconciliation of Net Income Available to Common Shareholders/Diluted Earnings Per Share (GAAP) to Adjusted Net Operating Income Available to Common Shareholders/Adjusted Diluted Earnings Per Share (Non-GAAP); Return on Average Assets and Return on Average Equity to Adjusted Return on Average Assets, Adjusted Return on Average Equity and Adjusted Operating Return on Average Shareholders' Tangible Common Equity (Non-GAAP) For the year ended December 31, (In thousands, except per share data) 2024 2023 2022 Net income available to common shareholders $ 70,850 $ 9,505 $ 85,030 Less: income attributable to unvested stock-based compensation awards 0 (42) (250) Net earnings allocated to common shareholders (GAAP) 70,850 9,463 84,780 Diluted earnings per share (GAAP) 4.97 0.66 5.89 Adjustments for non-operating income and expense: (Gain) loss on sale of investment securities (50) 70,019 634 Total adjustments (50) 70,019 634 Tax expense (12) 17,155 155 Total adjustments, net of tax (38) 52,864 479 Adjusted net income (Non-GAAP) 70,812 62,369 85,509 Net earnings allocated to common shareholders (Non-GAAP) 70,812 62,327 85,259 Weighted average shares outstanding (basic) 14,218,106 14,254,661 14,328,280 Weighted average shares outstanding (diluted) 14,268,443 14,301,221 14,404,294 Adjusted basic earnings per share (Non-GAAP) 4.98 4.37 5.95 Adjusted diluted earnings per share (Non-GAAP) 4.96 4.36 5.92 Net income available to common shareholders 70,850 9,505 85,030 Adjusted net income (Non-GAAP) 70,812 62,369 85,509 Average total assets 7,875,339 7,641,672 7,828,520 Return on average assets 0.90 % 0.12 % 1.09 % Adjusted return on average assets (Non-GAAP) 0.90 % 0.82 % 1.09 % Net income available to common shareholders 70,850 9,505 85,030 Adjusted net income (Non-GAAP) 70,812 62,369 85,509 Average total equity 685,814 634,732 641,725 Return on average equity 10.33 % 1.50 % 13.25 % Adjusted return on average equity (Non-GAAP) 10.33 % 9.83 % 13.32 % Net earnings allocated to common shareholders (Non-GAAP) 70,812 62,327 85,259 Average Tompkins Financial Corporation shareholders' equity (GAAP) 684,417 633,267 640,258 Amortization of intangibles 332 334 873 Tax expense 81 82 214 Amortization of intangibles, net of tax 251 252 659 Adjusted net operating income available to common shareholders' (Non-GAAP) 71,063 62,579 85,918 Average Tompkins Financial Corporation shareholders' equity 684,417 633,267 640,258 Average goodwill and intangibles 93,844 94,169 94,677 Average Tompkins Financial Corporation shareholders' tangible common equity (Non-GAAP) $ 590,573 $ 539,098 $ 545,581 Adjusted operating return on average shareholders' tangible common equity (Non-GAAP) 12.03 % 11.61 % 15.75 % 54 Table of Contents
Growth in residential loan balances is impacted by the Company’s decision to retain these loans or sell them in the secondary market due to interest rate considerations. The Company’s Asset/Liability Committee meets regularly and establishes standards for selling and retaining residential real estate mortgage originations.
Growth in residential loan balances is impacted by the Company’s decision to retain these loans or sell them in the secondary market due to interest rate considerations. The Company’s Asset/Liability Committee meets regularly and establishes standards for selling or retaining residential real estate mortgage originations.
Management generally views local repurchase agreements as an alternative to large time deposits. Refer to "Note 8 Federal Funds Purchased and Securities Sold Under Agreements to Repurchase" in Notes to Consolidated Financial Statements in Part II, "Item 8. Financial Statements and Supplementary Data" of this Report on Form 10-K for further details on the Company’s repurchase agreements.
Management generally views local repurchase agreements as an alternative to large time deposits. Refer to "Note 8 - Federal Funds Purchased and Securities Sold Under Agreements to Repurchase" in the Notes to Consolidated Financial Statements in Part II, "Item 8. Financial Statements and Supplementary Data" of this Report on Form 10-K for further details on the Company’s repurchase agreements.
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.
Forward-looking statements are made based on management’s expectations and beliefs concerning future events impacting the Company and are subject to 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.
As of December 31, 2023, there have been no shares repurchased under the 2023 Repurchase Plan. The Company and its subsidiary bank are subject to various regulatory capital requirements administered by federal bank regulatory agencies.
As of December 31, 2024, there have been no shares repurchased under the 2023 Repurchase Plan. The Company and its subsidiary bank are subject to various regulatory capital requirements administered by federal bank regulatory agencies.
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 December 31, 2023, the held-to- maturity portfolio consisted of U.S. Treasury securities and securities issued by U.S. government-sponsored enterprises, including Federal National Mortgage Agency, Federal Home Loan Bank, and Federal Farm Credit Banks Funding Corporation. U.S.
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 December 31, 2024, the held-to-maturity portfolio consisted of U.S. Treasury securities and securities issued by U.S. government-sponsored enterprises, including Federal National Mortgage Agency, Federal Home Loan Bank, and Federal Farm Credit Banks Funding Corporation. U.S.
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. 48 Table of Contents The Company uses a discounted cash flow ("DCF") method to estimate expected credit losses for all loan segments excluding the leasing segment.
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. 47 Table of Contents The Company uses a discounted cash flow ("DCF") method to estimate expected credit losses for all loan segments excluding the leasing segment.
Additional information on the securities portfolio is available in "Note 2 Securities" in Notes to Consolidated Financial Statements in Part II, "Item 8. Financial Statements and Supplementary Data" of this Report on Form 10-K, which details the types of securities held, the carrying and fair values, and the contractual maturities as of December 31, 2023 and 2022.
Additional information on the securities portfolio is available in "Note 2 - Securities" in the Notes to Consolidated Financial Statements in Part II, "Item 8. Financial Statements and Supplementary Data" of this Report on Form 10-K, which details the types of securities held, the carrying and fair values, and the contractual maturities as of December 31, 2024 and 2023.
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 December 31, 2023.
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 December 31, 2024.
The contractual maturity distribution of debt securities and mortgage-backed securities as of December 31, 2023, along with the weighted average yield of each category, is presented in Table 3-Maturity Distribution below. Balances are shown at amortized cost and weighted average yields are calculated on a fully tax-equivalent basis.
The contractual maturity distribution of debt securities and mortgage-backed securities as of December 31, 2024, along with the weighted average yield of each category, is presented in Table 3-Maturity Distribution below. Balances are shown at amortized cost and weighted average yields are calculated on a fully tax-equivalent basis.
As of December 31, 2023, commercial leases and municipal leases represented 100.0% of total leases. The Company has adopted comprehensive lending policies, underwriting standards and loan review procedures. There were no significant changes to the Company’s existing policies, underwriting standards and loan review during 2023. The Company’s Board of Directors approves the lending policies at least annually.
As of December 31, 2024, commercial leases and municipal leases represented 100.0% of total leases. The Company has adopted comprehensive lending policies, underwriting standards and loan review procedures. There were no significant changes to the Company’s existing policies, underwriting standards and loan review procedures during 2024. The Company’s Board of Directors approves the lending policies at least annually.
The effective rates for 2023 and 2022 differed from the U.S. statutory rate of 21.0% during those periods due to the effect of tax-exempt income from loans, securities, and life insurance assets, investments in tax credits, and excess tax benefits of stock based compensation.
The effective rates for 2024 and 2023 differed from the U.S. statutory rate of 21.0% during those periods due to the effect of tax-exempt income from loans, securities, and life insurance assets, investments in tax credits, and excess tax benefits of stock-based compensation.
The Company originates fixed rate and adjustable rate residential mortgage loans, including loans that have characteristics of both, such as a 7/6 adjustable rate mortgage, which has a fixed rate for the first seven years and then adjusts semi-annually thereafter. The majority of residential mortgage loans originated over the last several years have been fixed rate loans.
The Company also originates loans that have characteristics of both, such as a 7/6 adjustable rate mortgage, which has a fixed rate for the first seven years and then adjusts semi-annually thereafter. The majority of residential mortgage loans originated over the last several years have been fixed rate loans.
The sale of securities and subsequent reinvestment in the second and third quarters of 2023 favorably impacted securities revenue in the fourth quarter of 2023 as the securities sold had an average yield of 0.86%, while the proceeds of the sale were largely reinvested into securities with an estimated yield of approximately 5.09%.
The sale of securities and subsequent reinvestment of the proceeds from the sale in the second and third quarters of 2023 favorably impacted securities revenue in the fourth quarter of 2023 and in 2024 as the securities sold had an average yield of 0.86%, while the proceeds of the sale were largely reinvested into securities with an estimated yield of approximately 5.09%.
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.
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 operations and financial condition.
Interest payments on individually evaluated loans are typically applied to principal unless collectability of the principal amount is reasonably assured. In these cases, interest is recognized on a cash basis. There was no interest income recognized on individually evaluated loans and leases for 2023, 2022 and 2021.
Interest payments on individually evaluated loans are typically applied to principal unless collectability of the principal amount is reasonably assured. In these cases, interest is recognized on a cash basis. There was no interest income recognized on individually evaluated loans and leases for 2024, 2023 and 2022.
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.
Management considers the accounting policy relating to the ACL to be a critical accounting policy, given the inherent uncertainty in evaluating the levels of the ACL required to cover credit losses in the portfolio and the material effect that assumptions could have on the Company’s results of operations.
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, collat eral 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.
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.
The peer group data is derived from the FRB's "Bank Holding Company Performance Report", which covers banks and bank holding companies with assets between $3.0 billion and $10.0 billion as of September 30, 2023 (the most recent report available).
The peer group data is derived from the FRB's "Bank Holding Company Performance Report", which covers banks and bank holding companies with assets between $3.0 billion and $10.0 billion as of September 30, 2024 (the most recent report available).
On July 20, 2023, the Company’s Board of Directors authorized a replacement share repurchase plan (the “2023 Repurchase Plan”) under which it may repurchase up to 400,000 shares of the Company’s common stock over the 24 months following adoption of the plan.
On July 20, 2023, the Company’s Board of Directors authorized a replacement share repurchase plan (the “2023 Repurchase Plan”) under which the Company may repurchase up to 400,000 shares of the Company’s common stock over the 24 months following adoption of the plan.
The increase in loan yields was a result of market-related increases in interest rates on new loans, a significant increase in variable and adjustable rate loan yields driven by rising market interest rates, including the prime rate, and new loan originations.
The increase in average loan yields was a result of market-related increases in interest rates on new loans, a significant increase in variable and adjustable rate loan yields driven by rising market interest rates, including the prime rate, and an increase in new loan originations.
Any impairment that is not credit related is recognized in other comprehensive income, net of applicable taxes. Credit-related impairment is recognized as an allowance for credit losses ("ACL") on the Statement of Condition, limited to the amount by which the amortized cost basis exceeds the fair value, with a corresponding adjustment to earnings.
Any impairment that is not credit related is recognized in other comprehensive income, net of applicable taxes. Credit-related impairment is recognized as an allowance for credit losses ("ACL") on the Company's Statements of Condition, limited to the amount by which the amortized cost basis exceeds the fair value, with a corresponding adjustment to earnings.
The $5.6 million decrease included the following: a $8.7 million aggregate purchase price related to the Company's repurchase and retirement of 150,000 shares of its common stock in the first six months of 2023 pursuant to its publicly announced stock repurchase plan; and $1.3 million related to the exercise of stock options and restricted stock activity.
The $5.6 million decrease included the following: an $8.7 million aggregate purchase price paid related to the Company's repurchase and retirement of 150,000 shares of its common stock in the first six months of 2023 pursuant to its publicly announced stock repurchase plan; and $1.3 million related to the exercise of stock options and restricted stock activity.
The more significant area in which management of the Company applies critical assumptions and estimates include the following: • Accounting for credit losses - The Company accounts for the allowance for credit losses using the current expected credit loss model.
The most significant area in which management of the Company applies critical assumptions and estimates include 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.
Under this model, 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.
The Company also holds non-marketable Federal Home Loan Bank New York ("FHLBNY") stock and non-marketable Atlantic Community Bankers Bank ("ACBB") stock, all of which are required to be held for regulatory purposes and for borrowing availability. The required investment in FHLB stock is tied to the Company’s borrowing levels with the FHLB.
The Company also holds non-marketable Federal Home Loan Bank New York ("FHLBNY") stock and non-marketable Atlantic Community Bankers Bank ("ACBB") stock, which are required to be held for regulatory purposes and for borrowing availability. The required investment in FHLBNY stock is tied to the Company’s borrowing levels with the FHLBNY.
Both the ACL and the adjustment to net income may be reversed if conditions change. Management measures expected credit losses on held-to-maturity debt securities on a collective basis by major security type with each type sharing similar risk characteristics and considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts.
Both the ACL and the adjustment to net income may be reversed if conditions change. 40 Table of Contents 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.
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 has developed a methodology to measure the amount of estimated credit loss exposure inherent in the loan portfolio to assure that an appropriate ACL is maintained.
While management’s evaluation of the allowance as of December 31, 2023 considers the allowance to be appropriate, under adversely different conditions or assumptions, the Company would need to increase or decrease the allowance.
While management’s evaluation of the allowance as of December 31, 2024 considers the allowance to be appropriate, under adversely different conditions or assumptions, the Company would need to increase or decrease the allowance.
At December 31, 2022, the Company’s holdings of FHLBNY stock and ACBB stock totaled $17.6 million and $95,000, respectively. Management’s policy is to purchase investment grade securities that, on average, have relatively short expected durations. This policy helps mitigate interest rate risk and provides sources of liquidity without significant risk to capital.
At December 31, 2023, the Company’s holdings of FHLBNY stock and ACBB stock totaled $33.6 million and $95,000, respectively. Management’s policy is to purchase investment grade securities that, on average, have relatively short expected durations. This policy helps mitigate interest rate risk and provides sources of liquidity without significant risk to capital.
Expected maturities will differ from contractual maturities presented in Table 3-Maturity Distribution below, because issuers may have the right to call or prepay obligations with or without penalty and mortgage-backed securities will pay throughout the periods prior to contractual maturity. 42 Table of Contents Table 3 - Maturity Distribution As of December 31, 2023 Securities Available-for-Sale 1 Securities Held-to-Maturity (dollar amounts in thousands) Amount Yield 2 Amount Yield 2 U.S.
Expected maturities may differ from contractual maturities presented in Table 3-Maturity Distribution below, because issuers may have the right to call or prepay obligations with or without penalty and mortgage-backed securities may pay throughout the periods prior to contractual maturity. 41 Table of Contents Table 3 - Maturity Distribution As of December 31, 2024 Securities Available-for-Sale 1 Securities Held-to-Maturity (dollar amounts in thousands) Amount Yield 2 Amount Yield 2 U.S.
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 18.3% of assets at December 31, 2023.
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 10.3% of total assets at December 31, 2024.
Securities in the trading portfolio would reflect those securities that the Company elects to account for at fair value, with the adoption of ASC Topic 825, Financial Instruments . The Company’s total securities portfolio at December 31, 2023 was $1.7 billion compared to $1.9 billion at December 31, 2022.
Securities in the trading portfolio would reflect those securities that the Company elects to account for at fair value, with the adoption of ASC Topic 825, Financial Instruments . The Company’s total securities portfolio at December 31, 2024 was $1.5 billion, compared to $1.7 billion at December 31, 2023.
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.
In addition, various federal regulatory agencies and the NYSDFS, 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 judgments and information available to them at the time of their examinations.
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 $51.0 million at December 31, 2023, and $56.3 million at December 31, 2022.
The Company uses both retail and wholesale repurchase agreements. Retail repurchase agreements are arrangements with local customers of the Company, in which the Company agrees to sell securities to the customer with an agreement to repurchase those securities at a specified later date. Retail repurchase agreements totaled $37.0 million at December 31, 2024, and $51.0 million at December 31, 2023.
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.
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 is the result of changes in interest rates or reflects a fundamental change in the creditworthiness of the underlying issuer.
These loan and letter of credit commitments are subject to the same credit policies and reviews as the Company’s loans. Because most of these loan commitments expire within one year from the 53 Table of Contents date of issue, the total amount of these loan commitments as of December 31, 2023, are not necessarily indicative of future cash requirements.
These loan and letter of credit commitments are subject to the same credit policies and reviews as the Company’s loans. Because most of these loan commitments expire within one year from the date of issue, the total amount of these loan commitments as of December 31, 2024, are not necessarily indicative of future cash requirements.
Noncontrolling Interests Net income attributable to noncontrolling interests represents the portion of net income in consolidated majority-owned subsidiaries that is attributable to the minority owners of a subsidiary. The Company had net income attributable to noncontrolling interests of $124,000 in 2023, in line with 2022.
Noncontrolling Interests Net income attributable to noncontrolling interests represents the portion of net income in consolidated majority-owned subsidiaries that is attributable to the minority owners of a subsidiary. The Company had net income attributable to noncontrolling interests of $123,000 in 2024, in line with 2023.
The average tax-equivalent yield on the securities portfolio was 1.74% in 2023, 1.40% in 2022 and 1.23% in 2021. At December 31, 2023, there were no holdings of any one issuer, other than the U.S.
The average tax-equivalent yield on the securities portfolio was 2.36% in 2024, 1.74% in 2023 and 1.40% in 2022. At December 31, 2024, there were no holdings of any one issuer, other than the U.S.
The Company’s principal offices are located at 118 E. Seneca Street, 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." Forward-Looking Statements This Report on Form 10-K contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995.
Seneca Street, 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." Forward-Looking Statements This Report on Form 10-K contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995.
Government sponsored entities 226,135 192,240 225,866 188,151 197,320 195,920 Total held-to-maturity debt securities $ 312,401 $ 267,455 $ 312,344 $ 261,692 $ 284,009 $ 282,288 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.
Government sponsored entities 226,413 192,607 226,135 192,240 225,866 188,151 Total held-to-maturity debt securities $ 312,462 $ 267,295 $ 312,401 $ 267,455 $ 312,344 $ 261,692 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.
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 in Part II, "Item 8.
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 in Part II, "Item 8. Financial Statements and Supplementary Data" of this Report on Form 10-K.
Core deposits represented 81.1% of total deposits at December 31, 2023, compared to 84.5% of total deposits at December 31, 2022. Municipal money market accounts and reciprocal deposit relationships with municipalities totaled $542.1 million at year-end 2023, which decreased 25.3% from year-end 2022.
Core deposits represented 81.3% of total deposits at December 31, 2024, compared to 81.1% of total deposits at December 31, 2023. Municipal money market accounts and reciprocal deposit relationships with municipalities totaled $426.5 million at year-end 2024, which decreased 21.3% from year-end 2023.
Financial Statements and Supplementary Data" of this Report on Form 10-K, detail changes in equity capital over prior year end. Total shareholders’ equity increased $52.5 million or 8.5% to $669.9 million at December 31, 2023, from $617.4 million at December 31, 2022.
Financial Statements and Supplementary Data" of this Report on Form 10-K, detail changes in equity capital over prior year end. Total shareholders’ equity increased $43.5 million or 6.5% to $713.4 million at December 31, 2024, from $669.9 million at December 31, 2023.
Residential real estate loans, including home equity loans, were $1.6 billion at December 31, 2023, an increase of $26.7 million or 1.7% compared to $1.5 billion at year-end 2022. Residential real estate loans comprised 27.9% of total loans and leases at December 31, 2023 compared to 29.1% at December 31, 2022.
Residential real estate loans, including home equity loans, were $1.6 billion at December 31, 2024, an increase of $9.2 million or 0.6% compared to $1.6 billion at year-end 2023. Residential real estate loans comprised 26.1% of total loans and leases at December 31, 2024 compared to 27.9% at December 31, 2023.
Refer to "Allowance for Credit Losses" below, "Note 4 - Allowance for Credit Losses", and "Note 1 – Summary of Significant Accounting Policies" in the Notes to Consolidated Financial Statements in Part II, "Item 8. Financial Statements and Supplementary Data" of this Report on Form 10-K for the year ended December 31, 2023.
Refer to "Allowance for Credit Losses" below, "Note 4 - Allowance for Credit Losses", and "Note 1 - Summary of Significant Accounting Policies" in the Notes to Consolidated Financial Statements in Part II, "Item 8. Financial Statements and Supplementary Data" of this Report on Form 10-K for additional discussion regarding the allowance.
Noninterest income represented 4.7% of total revenues in 2023, down from 25.3% in 2022. The decrease in noninterest income was largely due to the previously noted sales of available-for-sale debt securities, mainly in the third quarter of 2023, which resulted in the recognition of a pre-tax loss of $70.0 million for the year ended December 31, 2023.
Noninterest income represented 29.5% of total revenues in 2024, up from 4.7% in 2023. The increase in noninterest income was largely due to the previously noted sales of available-for-sale debt securities, mainly in the third quarter of 2023, which resulted in the recognition of a pre-tax loss of $70.0 million for the year ended December 31, 2023.
Investment decisions are made within policy guidelines established by the Company’s Board of Directors. The investment policy established by the Company’s Board of Directors is based on the asset/liability management goals of the Company, and is monitored by the Company’s Asset/Liability Management Committee and Investment Committee.
The investment policy established by the Company’s Board of Directors is based on the asset/liability management goals of the Company, and is monitored by the Company’s Asset/Liability Management Committee and Investment Committee.
Table 6 - Analysis of the Allowance for Credit Losses As of December 31, (In thousands) 2023 2022 2021 2020 2019 Average loans outstanding during year $ 5,357,699 $ 5,142,099 $ 5,184,492 $ 5,228,135 $ 4,830,089 Balance of allowance at beginning of year 45,934 42,843 51,669 39,892 43,410 Impact of adopting ASU 2022-02 64 0 0 0 0 Impact of adopting ASU 2016-13 0 0 0 (2,534) 0 Loans charged-off: Commercial and industrial $ 34 $ 559 $ 274 $ 2 $ 696 Commercial real estate 0 50 6,957 1,903 4,015 Residential real estate 20 53 77 84 256 Consumer and other 1,045 544 438 482 823 Leases 0 0 0 0 0 Total loans charged-off $ 1,099 $ 1,206 $ 7,746 $ 2,471 $ 5,790 Recoveries of loans previously charged-off: Commercial and industrial $ 87 $ 195 $ 118 $ 131 $ 103 Commercial real estate 1,292 951 1,175 58 174 Residential real estate 186 346 236 194 334 Consumer and other 255 306 196 248 295 Total loan recoveries $ 1,820 $ 1,798 $ 1,725 $ 631 $ 906 Net loan (recoveries) charged-off (721) (592) 6,021 1,840 4,884 Additions/(Reductions) to allowance charged to operations 4,865 2,499 (2,805) 16,151 1,366 Balance of allowance at end of year $ 51,584 $ 45,934 $ 42,843 $ 51,669 $ 39,892 Allowance as a percentage of total loans and leases outstanding 0.92 % 0.87 % 0.84 % 0.98 % 0.81 % Net (recoveries) charge-offs as a percentage of average loans and leases outstanding during the year (0.01) % (0.01) % 0.12 % 0.04 % 0.10 % As a result of the adoption of ASU 2016-13, the Company recorded a net cumulative-effect adjustment reducing the allowance for credit losses by $2.5 million from $39.9 million at December 31, 2019 to $37.4 million at January 1, 2020.
Net charge-offs / (recoveries) as a percentage of average loans was 0.04% for 2024 compared to (0.01)% in 2023 and 2022. 49 Table of Contents Table 6 - Analysis of the Allowance for Credit Losses As of December 31, (In thousands) 2024 2023 2022 2021 2020 Average loans outstanding during year $ 5,768,575 $ 5,357,699 $ 5,142,099 $ 5,184,492 $ 5,228,135 Balance of allowance at beginning of year 51,584 45,934 42,843 51,669 39,892 Impact of adopting ASU 2022-02 0 64 0 0 0 Impact of adopting ASU 2016-13 0 0 0 0 (2,534) Loan charge-offs: Commercial and industrial $ 293 $ 34 $ 559 $ 274 $ 2 Commercial real estate 249 0 50 6,957 1,903 Residential real estate 0 20 53 77 84 Consumer and other 2,598 1,045 544 438 482 Leases 0 0 0 0 0 Total loan charge-offs $ 3,140 $ 1,099 $ 1,206 $ 7,746 $ 2,471 Recoveries of loans previously charged-off: Commercial and industrial $ 40 $ 87 $ 195 $ 118 $ 131 Commercial real estate 7 1,292 951 1,175 58 Residential real estate 135 186 346 236 194 Consumer and other 452 255 306 196 248 Total loan recoveries $ 634 $ 1,820 $ 1,798 $ 1,725 $ 631 Net loan charge-offs (recoveries) 2,506 (721) (592) 6,021 1,840 Additions/(Reductions) to allowance charged to operations 7,418 4,865 2,499 (2,805) 16,151 Balance of allowance at end of year $ 56,496 $ 51,584 $ 45,934 $ 42,843 $ 51,669 Allowance as a percentage of total loans and leases outstanding 0.94 % 0.92 % 0.87 % 0.84 % 0.98 % Net charge-offs (recoveries) as a percentage of average loans and leases outstanding during the year 0.04 % (0.01) % (0.01) % 0.12 % 0.04 % As a result of the adoption of ASU 2016-13, the Company recorded a net cumulative-effect adjustment reducing the allowance for credit losses by $2.5 million from $39.9 million at December 31, 2019 to $37.4 million at January 1, 2020.
All other activities are considered banking. For additional financial information on the Company’s segments, refer to "Note 22 Segment and Related Information" in the Notes to Consolidated Financial Statements in Part II, "Item 8. Financial Statements and Supplementary Data" of this Report on Form 10-K.
For additional financial information on the Company’s segments, refer to "Note 21 - Segment and Related Information" in the Notes to Consolidated Financial Statements in Part II, "Item 8. Financial Statements and Supplementary Data" of this Report on Form 10-K.
The following factors, in addition to those listed as Risk Factors in Item 1A 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; gross domestic product growth and inflation trends; the impact of the interest rate and inflationary environment on the Company's 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, including the Dodd-Frank Act, and state and local government mandates; 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-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 economic impact of national and global events, including the response to recent bank failures, the wars in Ukraine and Israel, widespread protests, civil unrest, political uncertainty, and pandemics or other public health crises. 28 Table of Contents 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.
The following factors, in addition to those listed as Risk Factors in Item 1A, 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; gross domestic product growth and inflation trends; the impact of the interest rate and inflationary environment on the Company's 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, including the Dodd-Frank Act, and state and local government mandates; 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; increased supervisory and regulatory scrutiny of financial institutions; technological developments and changes; cybersecurity incidents and threats; the ability to continue to introduce competitive new products and services on a timely, cost-effective basis; governmental and public policy changes, including environmental regulation; reliance on large customers and the geographic concentration of our business; 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 economic impact, including potential market volatility, of national and global events, including the response to bank failures, war and geopolitical matters (including the war in Israel and surrounding regions and the war in Ukraine), widespread protests, civil unrest, political uncertainty, and pandemics or other public health crises.
Interest income on securities, excluding dividends on FHLB stock, for the year ended December 31, 2023, was up $1.9 million or 5.7% as compared to the same period in 2022, as higher average yields more than offset lower average balances.
Interest income on securities, excluding dividends on FHLB stock, for the year ended December 31, 2024, was up $7.1 million or 20.6% as compared to 2023, as higher average yields more than offset lower average balances.
Fee-based revenues, including insurance commissions and fees, wealth management fees, service charges on deposit accounts and card services income, for the year ended December 31, 2023, collectively, increased $1.0 million, or 1.4%, over the same period in 2022. Insurance commissions and fees of $37.4 million increased $1.2 million or 3.2% in 2023 compared to $36.2 million for 2022.
Fee-based revenues, including insurance commissions and fees, wealth management fees, service charges on deposit accounts and card services income, for the year ended December 31, 2024, collectively, increased $4.3 million, or 5.9%, over 2023. Insurance commissions and fees of $39.1 million increased $1.7 million or 4.7% in 2024 compared to $37.4 million for 2023.
As of December 31, 2023, agriculturally-related loans totaled $322.9 million or 5.8% 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 cash and vegetable crop farms.
As of December 31, 2024, agriculturally-related loans totaled $327.6 million or 5.4% of total loans and leases compared to $322.9 million or 5.8% of total loans and leases at December 31, 2023. Agriculturally-related loans include loans to dairy farms and cash and vegetable crop farms.
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 $390.4 million or 7.0% to $5.2 billion at year-end 2023 from $5.6 billion at year-end 2022.
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 increased by $73.2 million or 1.4% to $5.3 billion at year-end 2024 from $5.2 billion at year-end 2023.
Holdings of FHLBNY stock and ACBB stock totaled $33.6 million and $95,000 at December 31, 2023, respectively. These securities are carried at par, which is also cost. The FHLBNY continues to pay dividends and repurchase stock. As such, the Company has 41 Table of Contents not recognized any impairment on its holdings of FHLBNY.
Holdings of FHLBNY stock and ACBB stock totaled $42.2 million and $95,000 at December 31, 2024, respectively. These securities are carried at par, which is also cost. During 2024, the FHLBNY continued to pay dividends and repurchase stock. As such, the Company has not recognized any impairment on its holdings of FHLBNY.
The increase in revenue was mainly in property and casualty commissions, which were up $1.8 million or 5.4% in 2023 over 2022. Contingency revenue was down $546,000 or 13.6% in 2023 compared to 2022. Revenue growth in 2023 benefited from business development efforts and generally higher policy premium levels as a result of general market conditions.
The increase was mainly in property and casualty commissions, which were up $747,000 or 2.8% in 2024 over 2023, and contingency revenue, which was up $952,000 or 27.4% in 2024 compared to 2023. Revenue growth in 2024 benefited from business development efforts and generally higher policy premium levels as a result of general market conditions.
The consumer loan portfolio includes personal installment loans, indirect automobile financing, and overdraft lines of credit. Consumer and other loans were $97.8 million at December 31, 2023, compared to $77.6 million at December 31, 2022. The lease portfolio decreased by 4.7% to $15.4 million at December 31, 2023 from $16.1 million at December 31, 2022.
The consumer loan portfolio includes personal installment loans, indirect automobile financing, and overdraft lines of credit. Consumer and other loans were $96.4 million at December 31, 2024, compared to $97.8 million at December 31, 2023. The lease portfolio decreased by 18.8% to $12.5 million at December 31, 2024 from $15.4 million at December 31, 2023.
This standard eliminated the previous troubled debt restructuring ("TDR") accounting model and replaced it with guidance and disclosure requirements for identifying modifications to loans to borrowers experiencing financial difficulty.
The Company adopted ASU 2022-02 effective January 1, 2023. This standard eliminated the previous troubled debt restructuring ("TDR") accounting model and replaced it with guidance and disclosure requirements for identifying modifications to loans to borrowers experiencing financial difficulty.
Management considers loans and leases classified as Substandard, which continue to accrue interest, to be potential problem loans and leases. The Company, through its credit administration function, identified 17 commercial relationships totaling $26.0 million at December 31, 2023 that were potential problem loans.
Management considers loans and leases classified as Substandard, which continue to accrue interest, to be potential problem loans and leases. The Company, through its credit administration function, identified 16 commercial relationships in the loan portfolio totaling $41.2 million at December 31, 2024 that were potential problem loans.
Financial Statements and Supplementary Data." For a detailed discussion of our operating results for the year ended December 31, 2022 compared to the year ended December 31, 2021, please refer to Item 7 of the Company's 2022 Annual Report on Form 10-K filed on March 1, 2023.
Financial Statements and Supplementary Data." For a comparison of our operating results for the year ended December 31, 2023 compared to the year ended December 31, 2022, please refer to Part II, Item 7 of the Company's 2023 Annual Report on Form 10-K filed on February 29, 2024.
At December 31, 2022, there were 17 commercial relationships totaling $33.3 million in the loan portfolio that were considered potential problem loans. Of the 17 commercial relationships from the portfolio that were classified as potential problem loans at December 31, 2023, there were 4 relationships that equaled or exceeded $1.0 million, which in aggregate totaled $22.9 million.
At December 31, 2023, there were 17 commercial relationships totaling $26.0 million that were considered potential problem loans. Of the 16 commercial relationships from the portfolio that were classified as potential problem loans at December 31, 2024, there were 4 relationships that individually equaled or exceeded $1.0 million, which in aggregate totaled $37.4 million.
As of December 31, Available-for-Sale Debt Securities 2023 2022 2021 (In thousands) Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value U.S. Treasuries $ 114,418 $ 109,904 $ 190,170 $ 167,251 $ 160,291 $ 157,834 Obligations of U.S.
As of December 31, Available-for-Sale Debt Securities 2024 2023 2022 (In thousands) Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value U.S. Treasuries $ 75,141 $ 71,497 $ 114,418 $ 109,904 $ 190,170 $ 167,251 Obligations of U.S.
The section captioned "Financial Condition – The Allowance for Credit Losses" below has further details on the allowance for credit losses and asset quality metrics. 35 Table of Contents Noninterest Income Year ended December 31, (In thousands) 2023 2022 2021 Insurance commissions and fees $ 37,351 $ 36,201 $ 34,836 Wealth management fees 17,951 18,091 19,388 Service charges on deposit accounts 6,913 7,365 6,347 Card services income 11,488 11,024 10,826 Other income 6,511 5,925 7,203 Net (loss) gain on securities transactions (69,973) (634) 249 Total $ 10,241 $ 77,972 $ 78,849 Noninterest income of $10.2 million for the year-ended December 31, 2023 decreased $67.7 million or 86.9% from 2022.
The section captioned "Financial Condition – The Allowance for Credit Losses" below has further details on the allowance for credit losses and asset quality metrics. 35 Table of Contents Noninterest Income Year ended December 31, (In thousands) 2024 2023 2022 Insurance commissions and fees $ 39,100 $ 37,351 $ 36,201 Wealth management fees 19,589 17,951 18,091 Service charges on deposit accounts 7,288 6,913 7,365 Card services income 12,057 11,488 11,024 Other income 10,061 6,511 5,925 Net gain (loss) on securities transactions 32 (69,973) (634) Total $ 88,127 $ 10,241 $ 77,972 Noninterest income of $88.1 million for the year-ended December 31, 2024 increased $77.9 million or 760.5% from 2023.
The decrease in net interest margin for the year ended December 31, 2023 compared to the year ended December 31, 2022 was due to increases in the average rates paid on interest-bearing liabilities outpacing increases on interest earning assets yields due to the higher interest rate environment, as well as increases in higher rate average other borrowings and average time deposits due to lower average interest checking, savings and money market deposit balances.
The decrease in net interest margin for the year ended December 31, 2024 compared to the year ended December 31, 2023 was due to increases in the average rates paid on interest-bearing liabilities outpacing increases on interest-earning assets yields due to the higher interest rate environment, as well as increases in higher rate average other borrowings.
The allocation of the Company’s allowance as of December 31, 2023, and each of the previous four years is illustrated in Table 5- Allocation of the Allowance for Credit Losses , below.
The allocation of the Company’s allowance as of December 31, 2024, and each of the previous four years is illustrated in Table 5 - Allocation of the Allowance for Credit Losses , below. The table provides an allocation of the allowance for credit losses for inherent loan losses by type.
Non-core funding sources of $1.9 billion at December 31, 2023 increased $493.5 million, or 36.0% as compared to December 31, 2022. 52 Table of Contents Non-core funding sources, as a percentage of total liabilities, were 26.1% at December 31, 2023, compared to 19.4% at December 31, 2022. Non-core funding sources may require securities to be pledged against the underlying liability.
Non-core funding sources of $2.0 billion at December 31, 2024 increased $173.0 million, or 9.3% as compared to December 31, 2023. Non-core funding sources, as a percentage of total liabilities, were 27.5% at December 31, 2024, compared to 26.1% at December 31, 2023. Non-core funding sources may require securities to be pledged against the underlying liability.
Table 5 - Allocation of the Allowance for Credit Losses As of December 31, (In thousands) 2023 2022 2021 2020 2019 Total loans outstanding at end of year $ 5,605,935 $ 5,268,911 $ 5,075,467 $ 5,260,327 $ 4,917,550 Allocation of the ACL by loan type: Commercial and industrial $ 6,667 $ 6,039 $ 6,335 $ 9,239 $ 10,541 Commercial real estate 31,581 27,287 24,813 30,546 21,608 Residential real estate 11,700 11,154 10,139 10,257 6,381 Consumer and other 1,557 1,358 1,492 1,562 1,362 Leases 79 96 64 65 0 Total $ 51,584 $ 45,934 $ 42,843 $ 51,669 $ 39,892 Allocation of the ACL as a percentage of total allowance: Commercial and industrial 13 % 13 % 15 % 18 % 26 % Commercial real estate 61 % 60 % 58 % 59 % 54 % Residential real estate 23 % 24 % 24 % 20 % 16 % Consumer and other 3 % 3 % 3 % 3 % 3 % Leases 0 % 0 % 0 % 0 % 0 % Total 100 % 100 % 100 % 100 % 100 % Loan and lease types as a percentage of total loans and leases: Commercial and industrial 15 % 16 % 18 % 23 % 21 % Commercial real estate 55 % 54 % 52 % 49 % 50 % Residential real estate 28 % 29 % 29 % 27 % 28 % Consumer and other 2 % 1 % 1 % 1 % 1 % Leases 0 % 0 % 0 % 0 % 0 % Total 100 % 100 % 100 % 100 % 100 % 50 Table of Contents The above table shows a fairly consistent allocation of the loan portfolio and allowance over the period with commercial real estate and residential real estate representing the largest proportion of total loans and the allowance.
Table 5 - Allocation of the Allowance for Credit Losses As of December 31, (In thousands) 2024 2023 2022 2021 2020 Total loans outstanding at end of year $ 6,019,922 $ 5,605,935 $ 5,268,911 $ 5,075,467 $ 5,260,327 Allocation of the ACL by loan type: Commercial and industrial $ 7,684 $ 6,667 $ 6,039 $ 6,335 $ 9,239 Commercial real estate 35,837 31,581 27,287 24,813 30,546 Residential real estate 11,345 11,700 11,154 10,139 10,257 Consumer and other 1,568 1,557 1,358 1,492 1,562 Leases 62 79 96 64 65 Total $ 56,496 $ 51,584 $ 45,934 $ 42,843 $ 51,669 Allocation of the ACL as a percentage of total allowance: Commercial and industrial 14 % 13 % 13 % 15 % 18 % Commercial real estate 63 % 61 % 60 % 58 % 59 % Residential real estate 20 % 23 % 24 % 24 % 20 % Consumer and other 3 % 3 % 3 % 3 % 3 % Leases 0 % 0 % 0 % 0 % 0 % Total 100 % 100 % 100 % 100 % 100 % Loan and lease types as a percentage of total loans and leases: Commercial and industrial 16 % 15 % 16 % 18 % 23 % Commercial real estate 56 % 55 % 54 % 52 % 49 % Residential real estate 26 % 28 % 29 % 29 % 27 % Consumer and other 2 % 2 % 1 % 1 % 1 % Leases 0 % 0 % 0 % 0 % 0 % Total 100 % 100 % 100 % 100 % 100 % Table 6 - Analysis of the Allowance for Credit Losses shows the activity in the allowance for credit losses over the past five years.
Excluding the impact of the realized losses on the sales of investment securities, adjusted net income, a non-GAAP financial measure, was $62.4 million for the year ended December 31, 2023, down $23.1 million, or 27.1%, when compared to the prior year.
Excluding the impact of the realized losses on the sales of investment securities, adjusted net income, a non-GAAP financial measure, was $70.8 million for the year ended December 31, 2024, up $8.4 million, or 13.5%, when compared to the prior year.
Accumulated other comprehensive loss decreased from $208.7 million at December 31, 2022 to $125.0 million at December 31, 2023, reflecting a $79.3 million decrease in unrealized losses on available-for-sale debt securities due to market interest rates and the aforementioned $70.0 million pre-tax loss on available-for-sale debt securities sales, and $4.4 million related to employee post-retirement benefit plans.
Accumulated other comprehensive loss decreased from $208.7 million at December 31, 2022 to $125.0 million at December 31, 2023, reflecting a $79.3 million decrease in unrealized losses on available-for-sale debt securities due to market interest rates and the aforementioned $70.0 million pre-tax loss on available-for-sale debt securities sales, and $4.4 million related to employee post-retirement benefit plans. 38 Table of Contents The Company increased cash dividends per share by 1.7% in 2024 over 2023, which followed an increase of 3.9% in 2023 over 2022.
The average rate paid on other borrowings for the year ended December 31, 2023, was up 220 basis points over the same period in 2022.
The average rate paid on other borrowings for the year ended December 31, 2024, was up 41 basis points over 2023.
For loans with an initial fixed rate of less than 5 years, the fully indexed rate is utilized for ability to repay qualifying and underwriting.
For loans 44 Table of Contents with an initial fixed rate of less than 5 years, the fully indexed rate is utilized for ability to repay qualifying and underwriting. This underwriting practice matches secondary market guidelines.
At December 31, 2023, there were specific reserves of $1.1 million, related to one commercial real estate relationship totaling $7.4 million compared to $3,000 of specific reserves on residential real estate loans at December 31, 2022.
At December 31, 2024, there were specific reserves of $1.7 million, related to three commercial real estate relationships totaling $7.5 million compared to $1.1 million of specific reserves on one commercial real estate relationship totaling $7.4 million at December 31, 2023.
The increase in revenue was mainly in property and casualty commissions, which were up $1.8 million or 5.4% in 2023 over 2022. Contingency revenue was down $546,000 or 13.6% in 2023 compared to 2022. Revenue growth in 2023 benefited from business development efforts and generally higher policy premium levels.
The increase in revenue was mainly in property and casualty commissions, which were up $747,000 or 2.8% in 2024 over 2023. Contingency revenue was up $952,000 or 27.4% in 2024 compared to 2023. Revenue growth in 2024 benefited from business development efforts and generally higher policy premium levels.
Of the $125.0 million in FHLB term advances at year-end 2023, $85.0 million are due in over one year. Refer to "Note 9 - Other Borrowings" in Notes to Consolidated Financial Statements in Part II, "Item 8. Financial Statements and Supplementary Data" of this Report on Form 10-K for further details on the Company’s term borrowings with the FHLB.
Refer to "Note 9 - Other Borrowings" in Notes to Consolidated Financial Statements in Part II, "Item 8. Financial Statements and Supplementary Data" of this Report on Form 10-K for further details on the Company’s term borrowings with the FHLB.
Financial Statements and Supplementary Data" of this Report on Form 10-K for the year ended December 31, 2023. Critical Accounting Estimates The Company's significant accounting policies conform with GAAP and are described in Note 1 of the Notes to Consolidated Financial Statements.
Critical Accounting Estimates The Company's significant accounting policies conform with GAAP and are described in "Note 1 - Summary of Significant Accounting Policies" of the Notes to Consolidated Financial Statements included in Part II, "Item 8. Financial Statements and Supplementary Data" of this Report on Form 10-K..
Individually evaluated loans consist of our non-homogenous nonaccrual loans and loans that are 90 days or more past due. Specific reserves on individually evaluated loans that are not collateral dependent are measured based on the present value of expected future cash flows discounted at the original effective interest rate of each loan.
Specific reserves on individually evaluated loans that are not collateral dependent are measured based on the present value of expected future cash flows discounted at the original effective interest rate of each loan.
S. Treasuries $ 86,266 $ 75,215 $ 86,478 $ 73,541 $ 86,689 $ 86,368 Obligations of U.S.
S. Treasuries $ 86,049 $ 74,688 $ 86,266 $ 75,215 $ 86,478 $ 73,541 Obligations of U.S.
At December 31, 2023, the Company had one wholly-owned banking subsidiary, Tompkins Community Bank. The Company also has a wholly-owned insurance agency subsidiary, Tompkins Insurance. Tompkins Financial Advisors, a division of Tompkins Community Bank provides a full array of investment services, including investment management, trust and estate, financial and tax planning services.
At December 31, 2024, the Company had one wholly-owned banking subsidiary, Tompkins Community Bank, and one wholly-owned insurance agency subsidiary, Tompkins Insurance and Tompkins Financial Advisors, a division of Tompkins Community Bank, which provided a full array of investment services, including investment management, trust and estate, financial and tax planning services. The Company’s principal offices are located at 118 E.
At December 31, 2023 noninterest bearing deposits decreased by $233.2 million or 10.8%, time deposit balances increased $366.6 million or 58.1% and checking, savings and money market accounts decreased $335.9 million or 8.8% when compared to December 31, 2022. Other borrowings, consisting mainly of short term advances with the FHLB, increased $310.8 million or 106.7% from December 31, 2022.
At December 31, 2024 time deposit balances increased $70.4 million or 7.1%, checking, savings and money market accounts increased by $74.1 million or 2.1%, and noninterest bearing deposits decreased by $72.5 million or 3.8%, when compared to December 31, 2023. Other borrowings, consisting mainly of short-term advances with the FHLB, increased $188.1 million or 31.3% from December 31, 2023.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeTable 9 - Interest Rate Risk Analysis Condensed Static Gap - December 31, 2023 (In thousands) Total 0-3 months 3-6 months 6-12 months 12 months Interest-earning assets 1 $ 7,513,654 $ 1,089,463 $ 332,291 $ 702,192 $ 2,123,946 Interest-bearing liabilities 5,135,988 2,436,139 304,305 220,067 2,960,511 Net gap position (1,346,676) 27,986 482,125 (836,565) Net gap position as a percentage of total assets (17.22) % 0.36 % 6.17 % (10.70) % 1 Balances of available-for-sale debt securities are shown at amortized cost. 58 Table of Contents [This Page Intentionally Left Blank] 59 Table of Contents
Biggest changeAn interest rate gap measure could be significantly affected by external factors such as a rise or decline in interest rates, loan or securities prepayments, and deposit withdrawals. 55 Table of Contents Table 9 - Interest Rate Risk Analysis December 31, 2024 (In thousands) Total 0-3 months 3-6 months 6-12 months 12 months Interest-earning assets 1 $ 7,823,293 $ 1,447,094 $ 319,611 $ 609,105 $ 2,375,810 Interest-bearing liabilities 5,454,604 2,248,391 395,775 297,438 2,941,604 Net gap position (801,297) (76,164) 311,667 (565,794) Net gap position as a percentage of total assets (9.88) % (0.94) % 3.84 % (6.98) % 1 Balances of available-for-sale debt securities are shown at amortized cost. 56 Table of Contents [This Page Intentionally Left Blank] 57 Table of Contents
In addition, the model does not reflect actions that management may employ to manage its 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.
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.
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.
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 over the next 12 to 18 months.
The Company uses derivatives to manage various risks and to accommodate the business requirements of its customers. Additional information on derivatives is available in "Note 23 Derivatives and Hedging Activities" in Notes to Consolidated Financial Statements in Part II, "Item 8. Financial Statements and Supplementary Data" of this Report on Form 10-K.
The Company uses derivatives to manage various risks and to accommodate the business requirements of its customers. Additional information on derivatives is available in "Note 22 - Derivatives and Hedging Activities" in the Notes to Consolidated Financial Statements in Part II, "Item 8. Financial Statements and Supplementary Data" of this Report on Form 10-K.
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 200 basis point decline 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.
Table 9-Interest Rate Risk Analysis below is a Condensed Static Gap Report, which illustrates the anticipated repricing intervals of assets and liabilities as of December 31, 2023.
Table 9-Interest Rate Risk Analysis below is a Condensed Static Gap Report, which illustrates the anticipated repricing intervals of assets and liabilities as of December 31, 2024.
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.
As intermediate and longer-term assets continue to reprice/adjust into higher rate environment and funding costs stabilize, the simulation shows net interest income would be expected to trend upwards.
Based upon the most recent simulation analysis performed as of November 30, 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 5.3%, while a 200 basis point parallel decline in interest rates over a one-year period would result in a one year increase in net interest income of 4.6% from the base case.
Based upon the most recent simulation analysis performed as of November 30, 2024, a 200 basis point parallel upward change in interest rates over a one-year time frame would result in a one-year decrease in net interest income from the base case of approximately 3.9%, 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 3.9% from the base case.
The Company’s one-year interest rate gap was a negative $836.6 million or 10.70% of total assets at December 31, 2023, compared with a negative $656.5 million or 8.56% of total assets at December 31, 2022.
The Company’s one-year interest rate gap was a negative $565.8 million or 6.98% of total assets at December 31, 2024, compared with a negative $836.6 million or 10.70% of total assets at December 31, 2023.
As such, in the short-term net interest income is expected to trend slightly below the base 57 Table of Contents 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 such, in a rising rate scenario, in the short-term, net interest income would be 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.
A negative gap position exists when the amount of interest-bearing liabilities maturing or repricing exceeds the amount of interest-earning assets maturing or repricing within a particular time period. This analysis suggests that the Company’s net interest income is moderately at risk in an increasing rate environment over the next 12 months.
This analysis suggests that the Company’s net interest income is moderately at risk in an increasing rate environment over the next 12 months.
The change from year-end 2022 to year-end 2023 is mainly due to the increase in borrowings with the FHLB, which were used to support loan growth given the decrease in deposit balances year-over-year.
The change from year-end 2023 to year-end 2024 is mainly due to the decrease in overnight borrowings with the FHLB into longer maturities, which were used to support loan growth. 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.
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An interest rate gap measure could be significantly affected by external factors such as a rise or decline in interest rates, loan or securities prepayments, and deposit withdrawals.

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