Segment and Related Information

The Company manages its operations through three reportable business segments in accordance with the standards set forth in FASB ASC 280, “Segment Reporting”: (i) banking (“Banking”), (ii) insurance (“Tompkins Insurance”) and (iii) wealth management (“Tompkins Financial Advisors”). The Company’s insurance services and wealth management services, other than trust services, are managed separately from the Banking segment.

Banking

The Banking segment is primarily comprised of the Company’s four banking subsidiaries: Tompkins Trust Company, a commercial bank with fourteen banking offices located in Ithaca, NY and surrounding communities; The Bank of Castile (DBA Tompkins Bank of Castile), a commercial bank with seventeen banking offices located in the Genesee Valley region of New York State as well as Monroe County; Mahopac Bank (DBA Tompkins Mahopac Bank), a commercial bank with fourteen full-service banking offices located in the counties north of New York City; and VIST Bank (DBA Tompkins VIST Bank), a banking organization with twenty-one banking offices headquartered and operating in the areas surrounding southeastern Pennsylvania.

Insurance

The Company provides property and casualty insurance services and employee benefits consulting through Tompkins Insurance Agencies, Inc., a 100% wholly-owned subsidiary of the Company, headquartered in Batavia, New York. Tompkins Insurance is an independent insurance agency, representing many major insurance carriers and provides employee benefit consulting to employers in Western and Central New York and Southeastern Pennsylvania, assisting them with their medical, group life insurance and group disability insurance. Tompkins Insurance has five stand-alone offices in Western New York, one stand-alone office in Tompkins County, New York and one stand-alone office in Montgomery County, 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 Company’s four subsidiary banks.

Summarized financial information concerning the Company’s reportable segments and the reconciliation to the Company’s consolidated results is shown in the following table. Investment in subsidiaries is netted out of the presentations below. The “Intercompany” column identifies the intercompany activities of revenues, expenses and other assets between the banking, insurance and wealth management services segments. The Company accounts for intercompany fees and services at an estimated fair value according to regulatory requirements for the services provided. Intercompany items relate primarily to the use of human resources, information systems, accounting and marketing services provided by any of the banks and the holding company. All other accounting policies are the same as those described in the summary of significant accounting policies in the 2017 Annual Report on Form 10-K.



As of and for the three months ended June 30, 2018
(in thousands)	Banking		Insurance		Wealth Management		Intercompany			Consolidated
Interest income	$	62,143	$	1	$	0	$	(1	)	$	62,143
Interest expense	9,430		0		0		(1		)	9,429
Net interest income	52,713		1		0		0			52,714
Provision for loan and lease losses	1,045		0		0		0			1,045
Noninterest income	9,943		7,488		4,207		(480		)	21,158
Noninterest expense	36,287		6,282		2,896		(480		)	44,985
Income before income tax expense	25,324		1,207		1,311		0			27,842
Income tax expense	5,173		274		304		0			5,751
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation	20,151		933		1,007		0			22,091
Less: Net income attributable to noncontrolling interests	32		0		0		0			32
Net Income attributable to Tompkins Financial Corporation	$	20,119	$	933	$	1,007	$	0		$	22,059

Depreciation and amortization	$	2,075	$	57	$	13	$	0		$	2,145
Assets	6,695,931		41,304		18,815		(10,250		)	6,745,800
Goodwill	64,370		19,702		8,211		0			92,283
Other intangibles, net	4,595		3,500		247		0			8,342
Net loans and leases	4,749,968		0		0		0			4,749,968
Deposits	4,803,044		0		0		(10,815		)	4,792,229
Total Equity	541,373		32,611		16,665		0			590,649



As of and for the three months ended June 30, 2017
(in thousands)	Banking		Insurance		Wealth Management		Intercompany			Consolidated
Interest income	$	56,342	$	0	$	0	$	0		$	56,342
Interest expense	6,041		0		0		0			6,041
Net interest income	50,301		0		0		0			50,301
Provision for loan and lease losses	976		0		0		0			976
Noninterest income	6,720		7,132		4,015		(417		)	17,450
Noninterest expense	32,819		6,059		3,107		(417		)	41,568
Income before income tax expense	23,226		1,073		908		0			25,207
Income tax expense	7,510		428		310		0			8,248
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation	15,716		645		598		0			16,959
Less: Net income attributable to noncontrolling interests	33		0		0		0			33
Net Income attributable to Tompkins Financial Corporation	$	15,683	$	645	$	598	$	0		$	16,926

Depreciation and amortization	$	1,766	$	74	$	14	$	0		$	1,854
Assets	6,368,374		41,438		15,692		(10,492		)	6,415,012
Goodwill	64,370		19,710		8,211		0			92,291
Other intangibles, net	5,783		4,151		317		0			10,251
Net loans and leases	4,381,439		0		0		0			4,381,439
Deposits	4,761,017		0		0		(10,295		)	4,750,722
Total Equity	532,291		31,379		13,245		0			576,915



For the six months ended June 30, 2018
(in thousands)	Banking			Insurance			Wealth Management			Intercompany			Consolidated
Interest income	$	122,283		$	1		$	0		$	(1	)	$	122,283
Interest expense	16,883			0			0			(1		)	16,882
Net interest income	105,400			1			0			0			105,401
Provision for loan and lease losses	1,612			0			0			0			1,612
Noninterest income	16,354			14,976			8,615			(957		)	38,988
Noninterest expense	71,044			12,521			6,098			(957		)	88,706
Income before income tax expense	49,098		—	2,456		—	2,517		—	0			54,071
Income tax expense	10,303			624			585			0			11,512
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation	38,795		—	1,832		—	1,932		—	0			42,559
Less: Net income attributable to noncontrolling interests	64			0			0			0			64
Net Income attributable to Tompkins Financial Corporation	$	38,731	—	$	1,832	—	$	1,932	—	$	0		$	42,495

Depreciation and amortization	$	4,475		$	118		$	25		$	0		$	4,618



For the six months ended June 30, 2017
(in thousands)	Banking			Insurance			Wealth Management			Intercompany			Consolidated
Interest income	$	109,963		$	1		$	0		$	(1	)	$	109,963
Interest expense	11,628			0			0			0			11,628
Net interest income	98,335			1			0			(1		)	$	98,335
Provision for loan and lease losses	1,745			0			0			0			1,745
Noninterest income	13,123			14,448			7,925			(806		)	34,690
Noninterest expense	65,306			12,139			6,297			(806		)	82,936
Income before income tax expense	44,407		—	2,310		—	1,628		—	(1		)	$	48,344
Income tax expense	14,182			903			552			0			15,637
Net Income attributable to noncontrolling interests and Tompkins Financial Corporation	30,225		—	1,407		—	1,076		—	(1		)	$	32,707
Less: Net income attributable to noncontrolling interests	65			0			0			0			65
Net Income attributable to Tompkins Financial Corporation	$	30,160	—	$	1,407	—	$	1,076	—	$	(1	)	$	32,642

Depreciation and amortization	$	3,456		$	156		$	29		$	0		$	3,641