Financial Analysis

Commitments and Contingent Liabilities The Company, in the normal course of business, is a party to financial instruments with off-balance-sheet risk to meet the financial needs of its customers. These financial instruments include loan commitments, standby letters of credit, and unused portions of lines of credit. The contract, or notional amount, of these instruments represents the Companys involvement in particular classes of financial instruments. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized on the Consolidated Statements of Condition. The Companys maximum potential obligations to extend credit for loan commitments (unfunded loans, unused lines of credit, and standby letters of credit) outstanding on December 31 were as follows: (In thousands) 2025 2024 Loan commitments $ 238,042 $ 152,255 Standby letters of credit 36,480 38,525 Undisbursed portion of lines of credit 1,117,162 1,134,554 Total $ 1,391,684 $ 1,325,334 Commitments to extend credit (including lines of credit) are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Standby letters of credit are conditional commitments to guarantee the performance of a customer to a third party. The Company extends standby letters of credit to its customers in the normal course of …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

Other Borrowings The following table summarizes the Companys borrowings as of December 31: (In thousands) 2025 2024 Overnight FHLB advances $ 395,000 $ 247,000 Term FHLB advances 169,446 543,247 Total other borrowings $ 564,446 $ 790,247 Through its subsidiary bank, the Company has a borrowing relationship with the FHLB, which provides secured borrowing capacity, subject to available collateral. As a member of the FHLB, the Company can use certain unencumbered mortgage-related assets and securities to secure borrowings from the FHLB. Established borrowing capacity with the FHLB was $1.3 billion and $1.5 billion at December 31, 2025 and December 31, 2024, respectively. The unused borrowing capacity on established lines with the FHLB was $525.5 million and $502.8 million at December 31, 2025 and December 31, 2024, respectively. At December 31, 2025, there were $395.0 million in overnight advances and $169.4 million in term advances with the FHLB, with a weighted average rate of 4.02%, compared to $247.0 million in overnight advances and $543.2 million in term advances with a weighted average rate of 4.52%, at December 31, 2024. At December 31, 2025, the term advances with the FHLB includes $94.4 million which matures within one year and $75.0 million which matures in over one year. Maturities of advances due in over one year include $50.0 million in 2027 and $25.0 million in 2028. In addition to amounts presented above, availability of $225 million and $200 million, at December …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

The following presents noninterest income, segregated by revenue streams in-scope and out-of-scope of ASC 606, for the years ended December 31, 2025, 2024, and 2023: Year ended December 31, (In thousands) 2025 2024 2023 Noninterest Income In-scope of Topic 606: Insurance Revenues $ 35,569 $ 39,100 $ 37,351 Investment Service Income 20,115 19,589 17,951 Service Charges on Deposit Accounts 7,258 7,288 6,913 Card Services Income 11,502 12,057 11,488 Other 1,298 1,296 1,324 Noninterest Income (in-scope of ASC 606) 75,742 79,330 75,027 Noninterest Income (out-of-scope of ASC 606) 121,129 8,797 (64,786) Total Noninterest Income $ 196,871 $ 88,127 $ 10,241

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"Stock Plans and Stock-Based Compensation In 2019, the 2009 Tompkins Financial Corporation Equity Plan (""2009 Equity Plan"") expired and was replaced by the new Tompkins Financial Corporation 2019 Equity Plan (""2019 Equity Plan""). Under the 2019 Equity Plan, the Company may grant stock options, stock appreciation rights (""SARs""), shares of restricted stock, restricted units and performance share awards covering up to 2,275,000 shares of the Company's common stock to certain officers and employees. Restricted stock awards and restricted units and performance share awards will reduce the shares available for grant under the 2019 Equity Plan by 4.25 shares for each share subject to an award, resulting in a total number of full-value share awards that may be issued under the 2019 Equity Plan of 535,294. Stock options and SARs are granted at an exercise price equal to the stocks fair value at the date of grant, may not have a term in excess of ten years, and have vesting periods of five and seven years from the grant date. Options and SARs with an expiration date in 2026 have a five-year vesting schedule with zero percent vesting in year one and 25% vesting in years two through five. All other options and SARs have a seven-year vesting schedule with zero percent vesting in year one, 17% vesting in years two through six and 15% vesting in year seven. Restricted stock awards and restricted stock units that were granted in the periods covering 2019 through 2025 have a five-year …

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Fair Value Measurements FASB ASC Topic 820, Fair Value Measurements and Disclosures, defines fair value, establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements. FASB ASC Topic 820 also establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are: Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2 Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; Level 3 Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of December 31, 2025 and 2024 segregated by the level of valuation inputs within the fair value hierarchy used to measure fair value: Recu …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

Goodwill and Other Intangible Assets (In thousands) Banking Insurance Wealth Management Total Balance at January 1, 2024 $ 64,524 $ 19,867 $ 8,211 $ 92,602 Adjustment to goodwill 0 0 0 0 Balance at December 31, 2024 64,524 19,867 8,211 92,602 Adjustment to goodwill 1 1 (19,867) 0 (19,866) Balance at December 31, 2025 $ 64,525 $ 0 $ 8,211 $ 72,736 1 In the fourth quarter of 2025, the Company wrote off $19.9 million of Goodwill and $0.8 million of Other Intangible Assets, as a result of the sale of its insurance subsidiary. Goodwill is assigned to reporting units. The Company reviews its goodwill and intangible assets annually, or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. Based on the Companys review as of December 31, 2025, there was no impairment of its goodwill or intangible assets. Other Intangible Assets The following tables provide information regarding the Company's amortizing intangible assets: (In thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount December 31, 2025 Amortized intangible assets: Core deposit intangible $ 0 $ 0 $ 0 Customer relationships 1 0 0 0 Other intangibles 1 5,829 4,142 1,687 Total intangible assets $ 5,829 $ 4,142 $ 1,687 December 31, 2024 Amortized intangible assets: Core deposit intangible $ 18,774 $ 18,774 $ 0 Customer relationships 9,048 8,237 811 Other intangibles 7,220 5,828 1,392 Total intangible as …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

Income Taxes The income tax expense (benefit) attributable to income from operations is summarized as follows: (In thousands) Current Deferred Total 2025 Federal $ 46,904 $ (970) $ 45,934 State 18,236 (385) 17,851 Total $ 65,140 $ (1,355) $ 63,785 2024 Federal $ 20,248 $ (3,313) $ 16,935 State 4,837 231 5,068 Total $ 25,085 $ (3,082) $ 22,003 2023 Federal $ 2,583 $ 381 $ 2,964 State 346 (815) (469) Total $ 2,929 $ (434) $ 2,495 The primary reasons for the differences between the Company's income tax expense and the amount computed by applying the statutory federal income tax rate to earnings are as follows: 2025 2024 2023 (In thousands) Amount % of pretax income Amount % of pretax income Amount % of pretax income Federal income tax at statutory rate $ 47,220 21.0 % $ 19,499 21.0 % $ 2,520 21.0 % State and local income taxes, net of federal benefit 1, 2, 3 14,102 6.3 % 4,004 4.3 % (371) (3.1) % Tax credits Low income housing tax credits (252) (0.1) % (224) (0.2) % (99) (0.8) % Nontaxable or nondeductible items Tax exempt income, net (1,005) (0.4) % (1,219) (1.3) % (1,131) (9.4) % Equity-based compensation 4 (140) (0.1) % (74) (0.1) % 132 1.1 % Bank-owned life insurance income (500) (0.2) % (579) (0.6) % (361) (3.0) % Section 162(m) limitation 212 0.1 % 113 0.1 % 127 1.1 % Non-deductible meals & entertainment 155 0.1 % 100 0.1 % 152 1.3 % Additional tax gain on sale of subsidiary 3,137 1.4 % 0 0.0 % 0 0.0 % Proportional amortization expense 241 0.1 % 252 0.3 % 170 1.4 % Oth …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

"Newly Adopted Accounting Standards ASU No. 2023-07, ""Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures."" The amendments in this update improve financial reporting by requiring disclosure of incremental segment information on an annual and interim basis. The amendments in this ASU are effective for the Company for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. Adoption did not have a significant effect on our consolidated financial statements or disclosures. ASU No. 2024-02, ""Codification Improvements,"" removes all references to FASB Concepts Statements from the FASB Accounting Standards Codification to simplify the Codification. The amendments in this ASU are effective for the Company for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years. Adoption did not have a significant effect on our consolidated financial statements or disclosures. ASU No. 2023-09, ""Income Taxes (Topic 740) - Improvements to Income Tax Disclosures."" The amendments in this update relate to the rate reconciliation and income taxes paid disclosures improve the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 and interim per …

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"Employee Benefit Plans The Company maintains a noncontributory defined-benefit plan (the ""DB Pension Plan"") and a 401(k) plan (the ""Retirement Savings Plan""). The Company makes matching contributions under the Retirement Savings Plan. The Company also sponsors an Employee Stock Ownership Plan (""ESOP"") covering substantially all employees of the Company that have at least one year of service. The ESOP provides for Company contributions in the form of common stock of the Company. Annual contributions are limited to a maximum amount as stipulated in the ESOP. The DB Pension Plan was closed to new employees at year-end 2009 and was frozen on July 31, 2015. The benefits under the DB Pension Plan are based on years of service, age and percentages of the employees' average final compensation. Assets of the Company's DB Pension Plan are invested in mutual funds and cash equivalents. The Retirement Savings Plan covers substantially all employees of the Company who have reached the age of 21. Employees may contribute a percentage of their eligible compensation with a Company match of such contributions up to a maximum match of 2%. In 2025, 2024, and 2023, the Company also provided an additional employer contribution of 2% of the employee's base pay. The Companys expense associated with these contributions was $3.4 million in 2025, $3.4 million in 2024, and $3.2 million in 2023. For employees hired prior to July 1, 2023, the Company may make annual discretionary contributions equ …

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Revenue Recognition The Company recognizes revenue in accordance with ASU No. 2014-09, Revenue from Contracts with Customers (ASC 606), and all subsequent ASUs that modified ASC 606. ASC 606 is applicable to the Companys noninterest revenue streams including its deposit related fees, card services income, trust and management, and insurance commissions and fees. Noninterest revenue streams in-scope of Topic 606 are discussed below. Insurance Commissions and Fees Insurance commissions and fees from insurance product sales are typically earned upon the effective date of bound coverage, as no significant performance obligation remains after coverage is bound. Commission revenue on policies billed in installments is accrued based upon the completion of the performance obligation creating a current asset for the unbilled revenue until such time as an invoice is generated, typically not to exceed twelve months. Contingent commissions are estimated based upon management's expectations for the user with an appropriate constraint applied and accrued relative to the recognition of the corresponding core commissions. Trust & Asset Management Trust and asset management income is primarily comprised of fees earned from the management and administration of trusts and other customer assets. The Companys performance obligation is generally satisfied over time and the resulting fees are recognized monthly, based upon the month-end fair value of the assets under management and the applicab …

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"Segment and Related Information The Company adopted ASU No. 2023-07, ""Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,"" effective December 15, 2024. In accordance with Topic 280, the Company manages its operations through two reportable business segments as of December 31, 2025: (i) banking and financial services (""Banking"") and (ii) wealth management (""Tompkins Financial Advisors""). The Companys wealth management services are managed separately from the Banking segment. On October 31, 2025, the Company sold all of the issued and outstanding shares of capital stock of its insurance subsidiary, TIA, to Gallagher. For the first 10 months of 2025, the Company had three operating segments: (i) banking and financial services, (ii) insurance services, and (iii) wealth management. Banking Tompkins Community Bank has twelve banking offices located in Ithaca, NY and surrounding communities; fourteen banking offices located in the Genesee Valley region of New York State as well as Erie County; twelve full-service banking offices located in the counties north of New York City; and sixteen banking offices headquartered and operating in the areas surrounding southeastern Pennsylvania. Banking services consist primarily of attracting deposits from the areas served by the Companys 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. Th …

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"Summary of Significant Accounting Policies Basis Of Presentation Tompkins Financial Corporation (""Tompkins"" or ""the Company"") is registered as a Financial Holding Company with the Federal Reserve Board pursuant to the Bank Holding Company Act of 1956, as amended, organized under the laws of New York State. Tompkins is the parent company of Tompkins Community Bank. Tompkins Community Bank provides a full array of trust and investment services under the Tompkins Financial Advisors brand. Unless the context otherwise requires, the term ""Company"" refers to Tompkins Financial Corporation and its subsidiaries. On October 31, 2025, the Company sold all of the issued and outstanding shares of capital stock of its insurance subsidiary, Tompkins Insurance Agencies, Inc. (""TIA"") to Arthur J. Gallagher Risk Management Services, LLC (""Gallagher""). See ""Note 2 - Divestiture"" for further information on the sale. The Company determines whether it has a controlling financial interest in an entity by first evaluating whether the entity is a voting interest entity or a variable interest entity under GAAP. Voting interest entities are entities in which the total equity investment at risk is sufficient to enable the entity to finance itself independently and provides the equity holders with the obligation to absorb losses, the right to receive residual returns and the right to make decisions about the entitys activities. The Company consolidates voting interest entities in which it h …

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Fair Value Measurements FASB ASC Topic 820, Fair Value Measurements and Disclosures (ASC 820) , defines fair value, establishes a framework for measuring fair value in accordance with GAAP and expands disclosures about fair value measurements. ASC 820 also establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Transfers between levels, when determined to be appropriate, are recognized at the end of each reporting period. The three levels of the fair value hierarchy under ASC 820 are: Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2 Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; Level 3 Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basi …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

"Accounting Standards Pending Adoption ASU No. 2023-06, ""Disclosure Improvements"" amends the disclosure or presentation requirements related to various subtopics in the FASB Accounting Standards Codification. The new guidance is intended to align GAAP requirements with those of the SEC. The ASU will become effective on the earlier of the date on which the SEC removes its related disclosure requirements from Regulation S-X or Regulation S-K, or June 30, 2027. Early adoption is prohibited. Adoption of ASU 2023-06 is not expected to have a material impact on our consolidated financial statements. ASU No. 2024-03, ""Disaggregation of Income Statement Expenses"" requires new financial statement disclosures in tabular format, disaggregating information about prescribed categories underlying any relevant income statement expense captions, including employee compensation, depreciation, and intangible asset amortization. Tompkins is required to adopt this ASU prospectively for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption and retrospective application are permitted. Tompkins is currently evaluating the potential impact of ASU 2024-03 on our consolidated financial statements. ASU No. 2025-11, ""Interim Reporting (Topic 270): Narrow-Scope Improvements"" was issued to improve the guidance within Topic 270, Interim Reporting, by clarifying applicability of the requirements. This guidance is eff …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

"Segment and Related Information The Company manages its operations through two reportable business segments in accordance with the standards set forth in FASB ASC 280, ""Segment Reporting"": (i) banking and (ii) wealth management. The Companys wealth management services, other than trust services, are managed separately from the banking segment. On October 31, 2025, the Company sold all of the issued and outstanding shares of capital stock of its insurance subsidiary, TIA, to Gallagher. For the first 10 months of 2025, the Company had three operating segments: (i) banking, (ii) insurance services, and (iii) wealth management. Banking Tompkins Bank & Trust has twelve banking offices located in Ithaca, NY and surrounding communities; fourteen banking offices located in the Genesee Valley region of New York State, which includes Monroe County; twelve banking offices located in the counties north of New York City; and sixteen banking offices operating in southeastern Pennsylvania. Wealth Management The wealth management segment is generally organized under the Tompkins Financial Advisors brand. Tompkins Financial Advisors offers a comprehensive suite of financial services to customers, including trust and estate services, investment management and financial and insurance planning for individuals, corporate executives, small business owners and high net worth individuals. Tompkins Financial Advisors has offices in each of the Companys regional markets. Chief Operating Decisio …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing