{"url_path":"/sec/tmp/10-k/2026/item-8","section_key":"item-8","section_title":"Item 8 Financial Statements and Supplementary Data","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-02-26","source_url":"https://www.sec.gov/Archives/edgar/data/1005817/0001005817-26-000027-index.html","accession_number":"0001005817-26-000027","cik":"0001005817","ticker":"TMP","issuer_name":"TOMPKINS FINANCIAL CORP","edgar_url":"https://www.sec.gov/Archives/edgar/data/1005817/0001005817-26-000027-index.html","primary_entity_key":"0001005817","primary_entity_name":"TOMPKINS FINANCIAL CORP"},"word_count":32150,"has_tables":true,"body_markdown":"Item 8. Financial Statements and Supplementary Data\n\nFinancial Statements and Supplementary Data consist of the consolidated financial statements and the unaudited quarterly financial data as indexed and presented below.\n\nIndex to Financial StatementsPage\n\n[Management’s Statement of Responsibility](#i02a691969dd8487e9cf0e5fe6bed79ba_85)\n\n[55](#i02a691969dd8487e9cf0e5fe6bed79ba_85)\n\n[Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting](#i02a691969dd8487e9cf0e5fe6bed79ba_91)\n\n[56](#i02a691969dd8487e9cf0e5fe6bed79ba_88)\n\n[Report of Independent Registered Public Accounting Firm on Consolidated Financial Statements](#i02a691969dd8487e9cf0e5fe6bed79ba_88)\n\n[57](#i02a691969dd8487e9cf0e5fe6bed79ba_91)\n\n[Consolidated Statements of Condition – December 31, 2025 and 2024](#i02a691969dd8487e9cf0e5fe6bed79ba_94)\n\n[60](#i02a691969dd8487e9cf0e5fe6bed79ba_94)\n\n[Consolidated Statements of Income – Years ended December 31, 2025, 2024 and 2023](#i02a691969dd8487e9cf0e5fe6bed79ba_97)\n\n[61](#i02a691969dd8487e9cf0e5fe6bed79ba_97)\n\n[Consolidated Statements of Comprehensive Income – Years ended December 31, 2025, 2024 and 2023](#i02a691969dd8487e9cf0e5fe6bed79ba_100)\n\n[62](#i02a691969dd8487e9cf0e5fe6bed79ba_100)\n\n[Consolidated Statements of Cash Flows – Years ended December 31, 2025, 2024 and 2023](#i02a691969dd8487e9cf0e5fe6bed79ba_103)\n\n[63](#i02a691969dd8487e9cf0e5fe6bed79ba_103)\n\n[Consolidated Statements of Changes in Shareholders’ Equity – Years ended December 31, 2025, 2024 and 2023](#i02a691969dd8487e9cf0e5fe6bed79ba_109)\n\n[65](#i02a691969dd8487e9cf0e5fe6bed79ba_109)\n\n[Notes to Consolidated Financial Statements](#i02a691969dd8487e9cf0e5fe6bed79ba_112)\n\n[67](#i02a691969dd8487e9cf0e5fe6bed79ba_112)\n\n54\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nManagement’s Statement of Responsibility\n\nManagement is responsible for the preparation of the consolidated financial statements and related financial information contained in all sections of this annual report, including the determination of amounts that must necessarily be based on judgments and estimates. It is the belief of management that the consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles.\n\nManagement establishes and monitors the Company’s system of internal accounting controls to meet its responsibility for reliable financial statements. The system is designed to provide reasonable assurance that assets are safeguarded, and that transactions are executed in accordance with management’s authorization and are properly recorded.\n\nThe Audit Committee of the board of directors, composed solely of outside directors, meets periodically and privately with management, internal auditors, and the independent registered public accounting firm, KPMG LLP, to review matters relating to the quality of financial reporting, internal accounting control, and the nature, extent, and results of audit efforts. The independent registered public accounting firm and internal auditors have unlimited access to the Audit Committee to discuss all such matters. The consolidated financial statements have been audited by KPMG LLP for the purpose of expressing an opinion on the consolidated financial statements. In addition, KPMG LLP has audited the Company's internal control over financial reporting, as of December 31, 2025.\n\n/s/ Stephen S. Romaine/s/ Matthew D. TomazinDate:February 26, 2026\n\nStephen S. RomaineMatthew D. Tomazin\n\nChief Executive OfficerChief Financial Officer\n\n55\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nReport of Independent Registered Public Accounting Firm\n\nTo the Shareholders and Board of Directors\nTompkins Financial Corporation:\n\nOpinion on Internal Control Over Financial Reporting\n\nWe have audited Tompkins Financial Corporation and subsidiaries' (the Company) internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.\n\nWe also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statements of condition of the Company as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, cash flows, and changes in shareholders’ equity for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively, the consolidated financial statements), and our report dated February 26, 2026 expressed an unqualified opinion on those consolidated financial statements.\n\nBasis for Opinion\n\nThe Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\n\nWe conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.\n\nDefinition and Limitations of Internal Control Over Financial Reporting\n\nA company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.\n\nBecause of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.\n\n/s/ KPMG LLP\n\n \n\nStamford, Connecticut\n\nFebruary 26, 2026\n\n56\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nReport of Independent Registered Public Accounting Firm\n\nTo the Shareholders and Board of Directors\nTompkins Financial Corporation:\n\nOpinion on the Consolidated Financial Statements\n\nWe have audited the accompanying consolidated statements of condition of Tompkins Financial Corporation and subsidiaries (the Company) as of December 31, 2025 and December 31, 2024, the related consolidated statements of income, comprehensive income, cash flows, and changes in shareholders’ equity for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and December 31, 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.\n\nWe also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 26, 2026 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.\n\nBasis for Opinion\n\nThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\n\nWe conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.\n\nCritical Audit Matter\n\nThe critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.\n\nAllowance for Credit Losses- Loans evaluated on a Collective Basis\n\nAs discussed in Notes 1 and 5 to the consolidated financial statements, the Company’s total allowance for credit losses on loans was $57.7 million as of December 31, 2025, a substantial portion of which related to the allowance for credit losses for loans evaluated on a collective basis (the collective ACL on loans), while the reserve related to individually evaluated loans was $1.4 million. The collective ACL on loans includes the measure of expected credit losses on a collective (pooled) basis for those loans that share similar risk characteristics. The methodologies apply historical loss information, adjusted for asset-specific characteristics, economic conditions at the measurement date, and forecasts about future economic conditions expected to exist through the contractual lives of the financial assets that are reasonable and supportable. The Company uses a discounted cash flow method (DCF method) where the payment expectations for each segment are adjusted for exposure at default using estimated prepayment speeds, time to recovery, probability of default (PD), and loss given default (LGD). The DCF methodology is calculated at the loan level in which an instrument effective yield is calculated, net of the impacts of prepayment assumptions, and the instrument expected cash flows are discounted at the effective yield to produce an instrument level net present value (“NPV”) of expected cash flows. The ACL is established for the difference between the net present value of modeled cash flows and the amortized cost basis. The Company uses a regression analysis to determine suitable loss drivers (forecasts of national unemployment rates and a one year percentage change in national gross domestic product) when\n\n57\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nmodeling lifetime PD and LGD, which are derived from historical internal and peer data, that incorporate probability weighted economic scenarios and macroeconomic assumptions over a four quarter reasonable and supportable forecast period. The Company measures expected credit losses by pooling financial assets with similar risk characteristics in order to allocate the losses based on the inherent risk in the specific portfolios. After the reasonable and supportable forecast period, the Company reverts back to a historical loss rate over eight quarters on a straight-line basis.  A portion of the collective ACL is comprised of qualitative adjustments to the expected loss estimates for information not already captured in the loss estimation process. These adjustments are based on qualitative factors not reflected in the quantitative model but likely to impact the measurement of estimated credit losses.\n\nWe identified the assessment of the collective ACL on loans as a critical audit matter. A high degree of audit effort, including specialized skills and knowledge, and subjective and complex auditor judgment was involved in the assessment of the collective ACL on loans due to significant measurement uncertainty. Specifically, the assessment encompassed the evaluation of the collective ACL on loans methodology, including the methods and models used to estimate the modeled cash flows and other significant assumptions, including estimated prepayment speeds, the selection of economic forecast scenarios and scenario weightings, macroeconomic assumptions, and the reasonable and supportable forecast period. The assessment also included the evaluation of the qualitative factors and their significant assumptions, including the effects of limitations inherent in the quantitative model and an evaluation of the conceptual soundness and performance of the PD and LGD models. In addition, auditor judgment was required to evaluate the sufficiency of audit evidence obtained.\n\nThe following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the measurement of the collective ACL on loans, including controls over the:\n\n•development of the collective ACL on loans methodology\n\n•continued use and appropriateness of changes made to PD and LGD models\n\n•performance monitoring of the PD and LGD models\n\n•identification and determination and measurement of the significant assumptions used in the PD and LGD models, including prepayment assumptions\n\n•development of the qualitative factors including the significant assumptions used in the measurement of the qualitative factors; and\n\n•analysis of the collective ACL on loans results, trends, and ratios.\n\nWe evaluated the Company’s process to develop the collective ACL on loans estimate by testing certain sources of data, factors, and assumptions that the Company used, and considered the relevance and reliability of such data, factors, and assumptions. In addition, we involved credit risk professionals with specialized skills and knowledge, who assisted in:\n\n•evaluating the Company’s collective ACL on loans methodology for compliance with U.S. generally accepted accounting principles\n\n•evaluating judgments made by the Company relative to the development and performance testing of the discounted cash flow model, and other significant assumptions such as prepayment speeds by comparing them to relevant Company-specific metrics and trends and the applicable industry and regulatory practices\n\n•assessing the conceptual soundness and performance testing of the discounted cash flow model, by inspecting the model documentation to determine whether the model is suitable for its intended use\n\n•evaluating the economic forecast scenarios and weightings, by comparing them to the Company’s business environment and relevant industry practices\n\n•evaluating the length of the historical observation period and reasonable and supportable forecast period by comparing them to specific portfolio risk characteristics and trends\n\n•assessing the composition of the peer group by comparing to specific portfolio characteristics and\n\n58\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\n•evaluating the methodology used to develop the qualitative factors and the effect of those factors on the collective ACL on loans compared with relevant credit risk factors and consistency with credit trends and identified limitations of the underlying quantitative model.\n\nWe also assessed the sufficiency of the audit evidence obtained related to the collective ACL on loans by evaluating the:\n\n•cumulative results of the audit procedures\n\n•qualitative aspects of the Company’s accounting practices\n\n•potential bias in the accounting estimate.\n\n/s/ KPMG LLP\n\nWe have served as the Company's auditor since 1995.\n\nStamford, Connecticut\n\nFebruary 26, 2026\n\n59\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nTOMPKINS FINANCIAL CORPORATION\n\nCONSOLIDATED STATEMENTS OF CONDITION\n\n(In thousands, except share and per share data)As ofAs of\n\nASSETS12/31/202512/31/2024\n\nCash and noninterest bearing balances due from banks$50,717 $53,635 \n\nInterest bearing balances due from banks82,100 80,763 \n\nCash and Cash Equivalents132,817 134,398 \n\nAvailable-for-sale debt securities, at fair value (amortized cost of $1,391,379 at December 31, 2025 and $1,367,123 at December 31, 2024)\n1,382,068 1,231,532 \n\nHeld-to-maturity debt securities, at amortized cost (fair value of $283,860 at December 31, 2025 and $267,295 at December 31, 2024)\n312,528 312,462 \n\nEquity securities, at fair value 800 768 \n\nLoans held for sale43,440 0 \n\nTotal loans and leases, net of unearned income and deferred costs and fees6,446,245 6,019,922 \n\nLess: Allowance for credit losses57,671 56,496 \n\nNet Loans and Leases6,388,574 5,963,426 \n\nFederal Home Loan Bank and other stock32,307 42,255 \n\nBank premises and equipment, net72,418 76,627 \n\nCorporate owned life insurance77,843 76,448 \n\nGoodwill72,736 92,602 \n\nOther intangible assets, net1,687 2,203 \n\nAccrued interest and other assets151,050 176,359 \n\nTotal Assets8,668,268 8,109,080 \n\nLIABILITIES\n\nDeposits:\n\nInterest bearing:\n\nChecking, savings and money market3,742,402 3,558,946 \n\nTime1,298,393 1,068,375 \n\nNoninterest bearing1,896,967 1,844,484 \n\nTotal Deposits6,937,762 6,471,805 \n\nFederal funds purchased and securities sold under agreements to repurchase95,569 37,036 \n\nOther borrowings564,446 790,247 \n\nOther liabilities132,114 96,548 \n\nTotal Liabilities7,729,891 7,395,636 \n\nEQUITY\n\nTompkins Financial Corporation shareholders' equity:\n\nCommon Stock - par value $.10 per share: Authorized 25,000,000 shares; Issued: 14,449,845 at December 31, 2025; and 14,468,013 at December 31, 2024\n1,446 1,447 \n\nAdditional paid-in capital299,206 300,073 \n\nRetained earnings662,161 537,157 \n\nAccumulated other comprehensive loss(19,054)(118,492)\n\nTreasury stock, at cost – 104,492 shares at December 31, 2025, and 131,497 shares at December 31, 2024\n(5,382)(6,741)\n\nTotal Tompkins Financial Corporation Shareholders’ Equity938,377 713,444 \n\nTotal Liabilities and Equity$8,668,268 $8,109,080 \n\n See notes to consolidated financial statements. \n\n60\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nTOMPKINS FINANCIAL CORPORATION\n\nCONSOLIDATED STATEMENTS OF INCOME\n\nYear ended December 31,\n\n(In thousands, except per share data)202520242023\n\nINTEREST AND DIVIDEND INCOME\n\nLoans$334,604 $301,970 $260,434 \n\nDue from banks760 741 674 \n\nAvailable-for-sale debt securities39,287 36,779 29,677 \n\nHeld-to-maturity debt securities4,886 4,881 4,876 \n\nFederal Home Loan Bank and other stock2,537 3,203 1,697 \n\nTotal Interest and Dividend Income382,074 347,574 297,358 \n\nINTEREST EXPENSE\n\nTime certificates of deposits of $250,000 or more17,237 16,914 11,421 \n\nOther deposits93,010 87,069 59,387 \n\nFederal funds purchased and securities sold under agreements to repurchase146 46 58 \n\nOther borrowings21,950 32,443 16,978 \n\nTotal Interest Expense132,343 136,472 87,844 \n\nNet Interest Income249,731 211,102 209,514 \n\nLess: Provision for credit loss expense11,534 6,611 4,339 \n\nNet Interest Income After Provision for Credit Loss Expense238,197 204,491 205,175 \n\nNONINTEREST INCOME\n\nInsurance commissions and fees35,569 39,100 37,351 \n\nWealth management fees20,115 19,589 17,951 \n\nService charges on deposit accounts7,258 7,288 6,913 \n\nCard services income11,502 12,057 11,488 \n\nGain on sale of TIA188,241 0 0 \n\nOther income12,875 10,061 6,511 \n\nNet gain (loss) on securities transactions(78,689)32 (69,973)\n\nTotal Noninterest Income196,871 88,127 10,241 \n\nNONINTEREST EXPENSE\n\nSalaries and wages108,556 101,150 97,370 \n\nOther employee benefits26,977 26,661 27,333 \n\nNet occupancy expense of premises12,953 12,634 13,278 \n\nFurniture and fixture expense7,476 7,666 8,663 \n\nAmortization of intangible assets292 332 334 \n\nOther operating expense53,958 51,199 56,314 \n\nTotal Noninterest Expenses210,212 199,642 203,292 \n\nIncome Before Income Tax Expense224,856 92,976 12,124 \n\nIncome Tax Expense63,785 22,003 2,495 \n\nNet Income Attributable to Noncontrolling Interests and Tompkins Financial Corporation161,071 70,973 9,629 \n\nLess: Net Income Attributable to Noncontrolling Interests0 123 124 \n\nNet Income Attributable to Tompkins Financial Corporation$161,071 $70,850 $9,505 \n\nBasic Earnings Per Share$11.30 $4.98 $0.66 \n\nDiluted Earnings Per Share$11.24 $4.97 $0.66 \n\nSee notes to consolidated financial statements.\n\n61\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nTOMPKINS FINANCIAL CORPORATION\n\nCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME\n\nYear ended December 31,\n\n(In thousands)202520242023\n\nNet income attributable to noncontrolling interests and Tompkins Financial Corporation$161,071 $70,973 $9,629 \n\nOther comprehensive income, net of tax:\n\nAvailable-for-sale debt securities:\n\nChange in net unrealized gain (loss) during the period35,669 (2,121)26,430 \n\nReclassification adjustment for net realized (gain) loss on sale of available-for-sale debt securities included in net income59,041 (38)52,838 \n\nEmployee benefit plans:\n\nNet retirement plan gain4,179 7,832 3,410 \n\nAmortization of net retirement plan actuarial loss285 700 843 \n\nAmortization of net retirement plan prior service cost264 140 163 \n\nOther comprehensive income (loss)99,438 6,513 83,684 \n\nSubtotal comprehensive income attributable to noncontrolling interests and Tompkins Financial Corporation260,509 77,486 93,313 \n\nLess: Net income attributable to noncontrolling interests0 123 124 \n\nTotal comprehensive income attributable to Tompkins Financial Corporation$260,509 $77,363 $93,189 \n\n See notes to consolidated financial statements.\n\n \n\n62\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nTOMPKINS FINANCIAL CORPORATION\n\nCONSOLIDATED STATEMENTS OF CASH FLOWS\n\nYear ended December 31,\n\n(In thousands)202520242023\n\nOPERATING ACTIVITIES\n\nNet income attributable to Tompkins Financial Corporation$161,071 $70,850 $9,505 \n\nAdjustments to reconcile net income to cash provided by (used in) operating activities:\n\nProvision for credit loss expense11,534 6,611 4,339 \n\nDepreciation and amortization of premises, equipment, and software8,325 10,143 11,399 \n\nAmortization of intangible assets292 332 334 \n\nGain on sale of TIA(188,241)0 0 \n\nTransaction costs related to the sale of TIA(11,586)0 0 \n\nEarnings from corporate owned life insurance(2,415)(2,768)(1,727)\n\nNet amortization on securities(3,968)(1,123)2,434 \n\nAmortization/accretion related to purchase accounting(269)(691)(677)\n\nCurrent year tax liability37,457 10,185 7,588 \n\nDeferred income tax (benefit) expense(1,355)(3,082)(434)\n\nNet (gain) loss on securities transactions78,689 (32)69,973 \n\nNet gain on sale of loans originated for sale(2,161)(1,001)(96)\n\nProceeds from sale of loans originated for sale87,727 41,071 4,591 \n\nLoans originated for sale(89,317)(41,128)(5,097)\n\nLoans held for sale(43,440)0 0 \n\nNet gain on sale of bank premises and equipment28 (218)(55)\n\nNet excess tax (expense) benefit from stock based compensation69 (134)(229)\n\nStock-based compensation expense3,486 4,631 4,100 \n\nIncrease in accrued interest receivable(1,874)(2,716)(1,242)\n\nIncrease in accrued interest payable66 1,380 2,054 \n\nOther, net(5,248)2,656 (17,757)\n\nNet Cash Provided by Operating Activities38,870 94,966 89,003 \n\nINVESTING ACTIVITIES\n\nProceeds from maturities, calls and principal paydowns of available-for-sale debt securities227,990 198,432 161,835 \n\nProceeds from sales of available-for-sale debt securities485,516 39,952 440,488 \n\nPurchases of available-for-sale debt securities(812,581)(55,913)(391,488)\n\nNet increase in loans(445,474)(428,944)(337,047)\n\nProceeds from sale/redemptions of Federal Home Loan Bank stock144,409 114,015 116,198 \n\nPurchases of Federal Home Loan Bank and other stock(134,462)(122,551)(132,197)\n\nProceeds from sale of bank premises and equipment2,435 294 146 \n\nPurchases of bank premises, equipment and software(6,921)(6,209)(6,762)\n\nPurchase of corporate owned life insurance(2)(6,250)0 \n\nProceeds from redemption of corporate owned life insurance1,022 17,994 1,872 \n\nProceeds from sale of other real estate owned16,669 0 175 \n\nNet proceeds from the sale of TIA220,665 0 0 \n\nOther, net0 (1,261)479 \n\nNet Cash (Used in) Provided by Investing Activities(300,734)(250,441)(146,301)\n\nFINANCING ACTIVITIES\n\nNet increase (decrease) in demand, money market, and savings deposits235,939 1,596 (569,050)\n\nNet increase in time deposits230,280 70,784 367,070 \n\nNet increase (decrease) in Federal funds purchased and securities sold under agreements to repurchase58,533 (13,960)(5,282)\n\nIncrease in other borrowings367,446 804,947 450,400 \n\nRepayment of other borrowings(593,247)(616,800)(139,600)\n\nCash dividends(36,092)(35,049)(34,512)\n\nCommon stock issued119 170 0 \n\nRepurchase of common stock(1,650)0 (8,726)\n\nNet shares issued related to restricted stock awards(1,012)(1,242)(1,173)\n\nNet proceeds from exercise of stock options(33)(115)(124)\n\nNet Cash Provided by (Used in) Financing Activities260,283 210,331 59,003 \n\nNet Increase in Cash and Cash Equivalents(1,581)54,856 1,705 \n\nCash and cash equivalents, beginning of the period134,398 79,542 77,837 \n\nTotal Cash and Cash Equivalents at End of Period$132,817 $134,398 $79,542 \n\n63\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nTOMPKINS FINANCIAL CORPORATION\n\nCONSOLIDATED STATEMENTS OF CASH FLOWS (continued)\n\n \n\nSupplemental Cash Flow Information\n\nYear ended December 31,\n\n(In thousands)202520242023\n\nCash paid during the year for - Interest$132,539 $135,513 $86,258 \n\nCash paid during the year for - Taxes27,364 14,826 10,381 \n\nTransfer of loans to other real estate owned626 14314131\n\nTransfer of loans to other assets12,674 0 0 \n\nRight-of-use assets obtained in exchange for new lease liabilities1,916 2,341 1,655 \n\nSee notes to consolidated financial statements.\n\n \n\n64\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\n TOMPKINS FINANCIAL CORPORATION\n\n CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY\n\n(In thousands except share and per share data)\nCommon\nStockAdditional Paid-in CapitalRetained\nEarningsAccumulated Other Comprehensive (Loss) IncomeTreasury\nStockNon-\ncontrolling InterestsTotal\n\nBalances at December 31, 2022$1,456 $302,763 $526,727 $(208,689)$(6,279)$1,412 $617,390 \n\nNet income attributable to noncontrolling interests and Tompkins Financial Corporation9,505 124 9,629 \n\nOther comprehensive income83,684 83,684 \n\nTotal Comprehensive Income93,313 \n\nCash dividends ($2.40 per share)\n(34,657)(34,657)\n\nNet exercise of stock options (1,996 shares, net)\n(124)(124)\n\nCommon stock repurchased and returned to unissued status (150,000 shares)\n(15)(8,711)(8,726)\n\nStock-based compensation expense4,100 4,100 \n\nDirectors deferred compensation plan (3,348 shares)\n331 (331)0 \n\nRestricted stock activity (34,093 shares)\n3 (1,176)(1,173)\n\nAdoption of Accounting Guidance ASU 2022-02(65)(65)\n\nDividend to noncontrolling interests(124)(124)\n\nBalances at December 31, 2023$1,444 $297,183 $501,510 $(125,005)$(6,610)$1,412 $669,934 \n\nNet income attributable to noncontrolling interests and Tompkins Financial Corporation70,850 123 70,973 \n\nOther comprehensive loss6,513 6,513 \n\nTotal Comprehensive Income77,486 \n\nCash dividends ($2.44 per share)\n(35,132)(35,132)\n\nNet exercise of stock options (2,375 shares, net)\n0 (115)(115)\n\nTreasury stock issued (4,260 shares)\n170 55225 \n\nStock-based compensation expense3,894 3,894 \n\nDirectors deferred compensation plan (3,660 shares)\n186 (186)0 \n\nRestricted stock activity (23,808 shares)\n3 (1,245)(1,242)\n\nAdjustment due to the adoption of ASU 2023-02(71)(71)\n\nPartial repurchase of noncontrolling interest(1,412)(1,412)\n\nDividend to noncontrolling interests(123)(123)\n\nBalances at December 31, 2024$1,447 $300,073 $537,157 $(118,492)$(6,741)$0 $713,444 \n\n65\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nTOMPKINS FINANCIAL CORPORATION\n\n CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (continued)\n\n(In thousands except share and per share data)Common\nStockAdditional Paid-in CapitalRetained\nEarningsAccumulated Other Comprehensive (Loss) IncomeTreasury\nStockNon-\ncontrolling InterestsTotal\n\nBalances at December 31, 2024$1,447 $300,073 $537,157 $(118,492)$(6,741)$0 $713,444 \n\nNet income attributable to Tompkins Financial Corporation161,071 0 161,071 \n\nOther comprehensive income99,438 99,438 \n\nTotal Comprehensive Income260,509 \n\nCash dividends ($3.13 per share)\n(36,067)(36,067)\n\nNet exercise of stock options (736 shares, net)\n (33)(33)\n\nCommon stock repurchased and returned to unissued status (22,339 shares)\n(2)(1,648)(1,650)\n\nTreasury stock issued (2,300 shares)\n119 30149 \n\nStock-based compensation expense3,037 3,037 \n\nDirectors deferred compensation plan (24,705 shares)\n(1,329)1,329 0 \n\nRestricted stock activity (3,435 shares)\n1 (1,013)(1,012)\n\nBalances at December 31, 2025$1,446 $299,206 $662,161 $(19,054)$(5,382)$0 $938,377 \n\nSee notes to consolidated financial statements.\n\n66\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nNote 1 Summary of Significant Accounting Policies\n\nBasis Of Presentation\n\nTompkins 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.\n\nOn 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.\n\nThe 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 entity’s activities. The Company consolidates voting interest entities in which it has all, or at least a majority, of the voting interest. As defined in applicable accounting standards, variable interest entities (VIEs) are entities that lack one or more of the characteristics of a voting interest entity. A controlling financial interest in a VIE is present when the Company has both the power and ability to direct the activities of the VIE that most significantly impact the VIE’s economic performance and an obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE.\n\nThe consolidated financial statements have been prepared in accordance with GAAP. In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclose contingent assets and liabilities, at the date of the financial statements and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the allowance for credit losses, valuation of goodwill and intangible assets, deferred income tax assets, and obligations related to employee benefits.\n\nThe consolidated financial information included herein combines the results of operations, assets, liabilities, and shareholders’ equity (including comprehensive income or loss) of the Company and entities in which the Company has a controlling financial interest. All significant intercompany balances and transactions are eliminated in consolidation. Amounts in the prior periods’ consolidated financial statements are reclassified when necessary to conform to the current periods’ presentation.\n\nThe Company has evaluated subsequent events for potential recognition and/or disclosure and determined that no further disclosures were required.\n\nCash and Cash Equivalents\n\nCash and cash equivalents in the Consolidated Statements of Cash Flows include cash and noninterest bearing balances due from banks, interest-bearing balances due from banks, Federal funds sold, and money market funds. Management regularly evaluates the credit risk associated with the counterparties to these transactions and believes that the Company is not exposed to any significant credit risk on cash and cash equivalents.\n\nSecurities\n\nManagement determines the appropriate classification of debt securities at the time of purchase. Securities are classified as held-to-maturity when the Company has the positive intent and ability to hold the securities to maturity. Held-to-maturity debt securities are stated at amortized cost. Debt securities not classified as held-to-maturity debt securities are classified as either available-for-sale or equity. Available-for-sale debt securities are stated at fair value with the unrealized gains and losses, net of tax, excluded from earnings and reported as a separate component of accumulated comprehensive income or loss, in shareholders’ equity. Certain equity securities that do not have a readily determinable fair value are stated at cost. Shares of stock of the Federal Home Loan Bank of New York, are also carried at cost.\n\nPremiums and discounts are amortized or accreted over the expected life or call date of the related security as an adjustment to yield using the interest method. Dividend and interest income are recognized when earned. Realized gains and losses on the sale of securities are included in net gain (loss) on securities transactions. The cost of securities sold is based on the specific identification method.\n\n67\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nFor available-for-sale debt securities in an unrealized loss position, at least quarterly, the Company evaluates the securities 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. Any impairment that is not credit-related is recognized in other comprehensive income (loss), net of applicable taxes. Credit-related impairment is recognized as an allowance for credit losses (\"ACL\") on the Statements of Condition, limited to the amount by which the amortized cost basis exceeds the fair value, with a corresponding adjustment to earnings. Both the ACL and the adjustment to net income may be reversed if conditions change. However, if the Company intends to sell an impaired available-for-sale debt security or more likely than not will be required to sell such a security before recovering its amortized cost basis, the entire impairment amount must be recognized in earnings with a corresponding adjustment to the security’s amortized cost basis. Because the security’s amortized cost basis is adjusted to fair value, there is no ACL in this situation. Changes in the allowance for credit losses are recorded as provision (credit) for credit loss expense. Losses are charged against the ACL when management believes the uncollectability of an available-for-sale debt security is confirmed or when either of the criteria regarding intent or requirement to sell is met.\n\nManagement 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.\n\nAccrued interest receivable on securities is excluded from the estimate of credit losses.\n\nLoans and Leases\n\nLoans are reported at their principal outstanding balance, net of deferred loan origination fees and costs, and unearned income. The Company has the ability and intent to hold its loans for the foreseeable future, except for certain residential real estate loans held-for-sale. The Company provides motor vehicle and equipment financing to its customers through direct financing leases. These leases are carried at the aggregate of lease payments receivable, plus estimated residual values, less unearned income. Unearned income on direct financing leases is amortized over the lease terms, resulting in a level rate of return.\n\nResidential real estate loans originated and intended for sale in the secondary market are carried at the lower of aggregate cost or estimated fair value. Fair value is determined on the basis of the rates quoted in the secondary market. Net unrealized losses attributable to changes in market interest rates are recognized through a valuation allowance by charges to income. Loans are generally sold on a non-recourse basis with servicing retained. Any gain or loss on the sale of loans is recognized at the time of sale as the difference between the recorded basis in the loan and the net proceeds from the sale. The Company may use commitments at the time loans are originated or identified for sale to mitigate interest rate risk. The commitments to sell loans and the commitments to originate loans held-for-sale at a set interest rate, if originated, are considered derivatives under Accounting Standard Codification (\"ASC\") Topic 815, Derivatives and Hedging. The impact of the estimated fair value adjustment was not significant to the consolidated financial statements.\n\nInterest income on loans is accrued and credited to income based upon the principal amount outstanding. Loan origination fees and costs are deferred and recognized over the life of the loan as an adjustment to yield. Loans are considered past due if the required principal and interest payments have not been received as of the date such payments are due. Loans and leases, including individually evaluated loans, are generally classified as nonaccrual if they are past due as to maturity or payment of principal or interest for a period of more than 90 days, unless such loans are well secured and in the process of collection. Loans that are past due less than 90 days may also be classified as nonaccrual if repayment in full of principal or interest is in doubt.\n\nLoans may be returned to accrual status when all principal and interest amounts contractually due (including arrearages) are reasonably assured of repayment within an acceptable time period, and there is a sustained period (generally six consecutive months) of repayment performance by the borrower in accordance with the contractual terms of the loan agreement. When interest accrual is discontinued, all unpaid accrued interest is reversed. Payments received on loans on nonaccrual are generally applied to reduce the principal balance of the loan.\n\nIn general, the principal balance of a loan is charged off in full or in part when management concludes, based on the available facts and circumstances, that collection of principal in full is not probable. For commercial and commercial real estate loans, this conclusion is generally based upon a review of the borrower’s financial condition and cash flow, payment history, economic conditions, and the conditions in the various markets in which the collateral, if any, may be liquidated. In general, consumer loans are charged-off in accordance with regulatory guidelines which provide that such loans be charged-off when the Company becomes aware of the loss, such as from a triggering event that may include new information about a borrower’s intent/ability to repay the loan, bankruptcy, fraud or death, among other things, but in no case will the charge-off exceed specified delinquency timeframes. Such delinquency timeframes state that closed-end retail loans (loans with pre-defined maturity dates, such as real estate mortgages, home equity loans and consumer installment loans) that become past due 120 cumulative days and open-end retail loans (loans that roll-over at the end of each term, such as home equity lines of credit) that\n\n68\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nbecome past due 180 cumulative days should be classified as a loss and charged-off. For residential real estate loans, charge-off decisions are based upon past due status, current assessment of collateral value, and general market conditions in the areas where the properties are located.\n\nAcquired Loans\n\nAcquired loans are recorded at fair value at the date of acquisition based on a discounted cash flow methodology that considers various factors including the type of loan and related collateral, classification status, fixed or variable interest rate, term of loan and whether or not the loan was amortizing, and a discount rate reflecting the Company’s assessment of risk inherent in the cash flow estimates. Certain larger purchased loans are individually evaluated while other purchased loans are grouped together according to similar risk characteristics and are treated in the aggregate when applying various valuation techniques. These cash flow evaluations are inherently subjective as they require material estimates, all of which may be susceptible to significant change.\n\n Allowance for Credit Losses – Loans\n\nThe Company estimates the ACL on loans based on the underlying assets’ amortized cost basis, which is the amount at which the financing receivable is originated or acquired, adjusted for applicable accretion or amortization of premium, discount, collection of cash, and charge-offs. In the event that collection of principal becomes uncertain, the Company has policies in place to reverse accrued interest in a timely manner. Therefore, the Company has made a policy election to exclude accrued interest from the amortized cost basis.\n\nExpected credit losses are reflected in the ACL through a charge to the provision for credit loss expense. When the Company deems all or a portion of a financial asset to be uncollectible, the appropriate amount is written off and the ACL is reduced by the same amount. In general, the principal balance of a loan is charged off in full or in part when management concludes, based on the available facts and circumstances, that collection of principal in full is not probable. In addition, the Company has reserves for expected recoveries where the Company reviews the prior four quarter charge-offs and applies a recovery rate based on the Company’s historical experience. Subsequent recoveries, if any, are credited to the ACL when received.\n\nThe Company measures expected credit losses of financial assets at the loan level by segment, by pooling loans when the financial assets share similar risk characteristics. Depending on the nature of the pool of financial assets with similar risk characteristics, the Company uses a discounted cash flow (\"DCF\") method to estimate the expected credit losses. Allowance on loans that do not share risk characteristics are evaluated on an individual basis. The Company assigns a credit risk rating to all commercial and commercial real estate loans. The Company reviews commercial and commercial real estate loans rated Special Mention or worse, on nonaccrual, and greater than $750,000 for loss potential and when deemed appropriate, assigns an allowance based on an individual evaluation.\n\nThe Company’s methodologies for estimating the ACL consider available relevant information about the collectability of cash flows, including information about past events, current conditions, and reasonable and supportable forecasts. The methodologies apply historical loss information, adjusted for asset-specific characteristics, economic conditions at the measurement date, and forecasts about future economic conditions expected to exist through the contractual lives of the financial assets that are reasonable and supportable, to the identified pools of financial assets with similar risk characteristics for which the historical loss experience was observed. The Company’s methodologies revert back to average historical loss information on a straight line basis over eight quarters when it can no longer develop reasonable and supportable forecasts.\n\nThe Company has identified the following pools of financial assets with similar risk characteristics for measuring expected credit losses: commercial, commercial real estate, residential, home equity, consumer and leases. This segmentation was selected based on the differences in the risk profile of each of these categories and aligns well with regulatory reporting categories. This segmentation separates borrower type, collateral type and the nature of the loan. The differences in risk profiles of these segments enable the ACL to be more precise in its allocation due to the inherent risk in these specific portfolios.\n\nDiscounted Cash Flow Method\n\nThe Company uses the DCF method to estimate expected credit losses for the commercial and industrial, commercial real estate, residential, home equity, and consumer loan pools. For each of these loan segments, the Company generates cash flow projections at the loan level wherein payment expectations are adjusted for exposure at default using estimated prepayment speeds, time to recovery, probability of default, and loss given default. The modeling of expected prepayment speeds, and time to recovery are based on historical internal data.\n\nThe Company uses regression analysis of historical internal and peer data to determine suitable loss drivers to utilize when modeling lifetime probability of default and loss given default. This analysis also determines how expected probability of default and loss given default will react to forecasted levels of the loss drivers. For all loan pools utilizing the DCF method,\n\n69\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nmanagement utilizes and forecasts national unemployment and a one-year percentage change in national gross domestic product as loss drivers in the model.\n\nFor all DCF models, management has determined that four quarters represents a reasonable and supportable forecast period and reverts back to a historical loss rate over eight quarters on a straight-line basis. Management leverages economic projections from an independent third party to inform its loss driver forecasts over the four-quarter forecast period. Other internal and external indicators of economic forecasts, and scenario weightings, are also considered by management when developing the forecast metrics. The model considers a base case forecast and two alternative forecasts and assigns weightings to these three scenarios based on current conditions and expectations for future conditions.\n\nThe combination of adjustments for credit expectations (default and loss) and timing expectations (prepayment, curtailment, and time to recovery) produces an expected cash flow stream at the loan level. Instrument effective yield is calculated, net of the impacts of prepayment assumptions, and the instrument expected cash flows are then discounted at that effective yield to produce an instrument-level net present value of expected cash flows (\"NPV\"). An ACL is established for the difference between the instrument’s NPV and amortized cost basis.\n\nThe model also considers the need to qualitatively adjust expected loss estimates for information not already captured in the loss estimation process. These qualitative factors include, but are not limited to, those suggested by the Interagency Policy Statement on Allowances for Credit Losses. These qualitative factor adjustments may increase or decrease the Company's estimate of expected credit losses.\n\nDue to the size and characteristics of the leasing portfolio, the remaining life method, using the historical loss rate of the commercial and industrial segment, is used to determine the allowance for credit losses.\n\nIndividually Evaluated Financial Assets\n\nLoans that do not share common risk characteristics are evaluated on an individual basis. For collateral dependent financial assets where the Company has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and the Company expects repayment of the financial asset to be provided substantially through the operation or sale of the collateral, the ACL is measured based on the difference between the fair value of the collateral less cost to sell, and the amortized cost basis of the asset as of the measurement date. The ACL may be zero if the fair value of the collateral at the measurement date exceeds the amortized cost basis of the financial asset.\n\nThe Company’s estimate of the ACL reflects losses expected over the remaining contractual life of the assets. The contractual term does not consider extensions, renewals or modifications unless the Company has identified an expected troubled debt restructuring.\n\nFor acquired credit impaired loans accounted for under FASB ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality, (\"ASC Topic 310-30\"), the Company’s allowance for loan and lease losses was estimated based upon our expected cash flows for these loans. To the extent that we experienced a deterioration in borrower credit quality resulting in a decrease in our expected cash flows subsequent to the acquisition of the loans, an allowance for loan losses would be established based on our estimate of future credit losses over the remaining life of the loans.\n\nFor acquired non-credit impaired loans accounted for under FASB ASC Topic 310-20, Nonrefundable Fees and Other Costs, (\"ASC Topic 310-20\"), the Company’s allowance for loan and lease losses was maintained through provisions for loan losses based upon an evaluation process that was similar to our evaluation process used for originated loans. In conducting this evaluation, which included a review of loans on which full collectability may not be reasonably assured, the Company considered, among other matters, the estimated fair value of the underlying collateral, economic conditions, historical net loan loss experience, carrying value of the loans, which included the remaining net purchase discount or premium, and other factors that warrant recognition in determining our allowance for loan losses.\n\nThe Company adopted Accounting Standard Update (\"ASU\") 2016-13 on January 1, 2020, using the prospective transition approach for financial assets purchased with credit deterioration (\"PCD\") that were previously classified as purchased credit impaired (\"PCI\") and accounted for under ASC 310-30. In accordance with the standard, the Company did not reassess whether PCI assets met the criteria of PCD assets as of the date of adoption. The remaining discount on the PCD assets will be accreted into interest income on a level-yield method over the life of the loans.\n\nLoan Modifications\n\nThe 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. Modifications to borrowers experiencing financial\n\n70\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\ndifficulty may include interest rate reductions, principal or interest forgiveness, forbearances, term extensions, and other actions intended to minimize economic loss and to avoid foreclosure or repossession of collateral.\n\nLoan Commitments and Allowance for Credit Losses on Off-Balance Sheet Credit Exposures\n\nFinancial instruments include off-balance sheet credit instruments, such as commitments to make loans, unused lines of credit and commercial letters of credit, issued to meet customer financing needs. The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for off-balance sheet loan commitments is represented by the contractual amount of those instruments. Such financial instruments are recorded when they are funded.\n\nThe Company records an allowance for credit losses on off-balance sheet credit exposures, unless the commitments to extend credit are unconditionally cancellable, through a charge to the provision for credit loss expense for off-balance sheet credit exposures included in other noninterest expense in the Company’s Consolidated Statements of Income. The ACL on off-balance sheet credit exposures is estimated by loan segment at each balance sheet date under the current expected credit loss model using similar methodologies as portfolio loans, taking into consideration the likelihood that funding will occur, and is included in other liabilities on the Company’s Statements of Condition.\n\nPremises and Equipment\n\nLand is carried at cost. Premises and equipment are stated at cost, less allowances for depreciation. The provision for depreciation for financial reporting purposes is computed generally by the straight-line method at rates sufficient to write-off the cost of such assets over their estimated useful lives. Buildings are amortized over a period of 10-39 years, and furniture, fixtures, and equipment are amortized over a period of 2-20 years. Leasehold improvements are generally depreciated over the lesser of the lease term or the estimated lives of the improvements. Maintenance and repairs are charged to expense as incurred. Gains or losses on disposition are reflected in earnings.\n\nLeases\n\nThe Company leases certain office facilities and office equipment under operating leases. The Company also owns certain office facilities which it leases to outside parties under operating lessor leases; however, such leases are not significant. For operating leases other than those considered to be short-term, defined as leases of 12 months or less, the Company recognizes operating lease right-of-use (\"ROU\") assets and related lease liabilities at the time of lease commencement. ROU assets represent the Company's right to use the underlying asset for the lease term and the lease liabilities represent the Company's obligation to make lease payments under the leases. ROU assets and operating lease liabilities are reported as components of accrued interest and other assets and other liabilities, respectively, on our accompanying consolidated balance sheets. Leases with terms of 12 months or less are recognized in the income statement over the lease term.\n\nIn recognizing ROU assets and related lease liabilities, the Company accounts for lease and non-lease components (such as taxes, insurance, and common area maintenance costs) separately as such amounts are generally readily determinable under our lease contracts. To estimate the present value of lease payments over the expected lease term, the Company uses interest rates on advances from the FHLB at the time of commencement. The Company's lease term may include options to extend or terminate the leases when it is reasonably certain that the option will be exercised. Lease expense is recognized on a straight-line basis over the lease term and is included in net occupancy expense of premises in the Company's Consolidated Statements of Income.\n\nBank Owned Life Insurance\n\nThe Company owns life insurance policies on certain current and former employees and directors where the Bank is the beneficiary. Bank owned life insurance (\"BOLI\") is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value (“CSV”) adjusted for other charges or other amounts due that are probable at settlement. Increases in the CSV of the policies, as well as the death benefits received, net of any CSV, are recorded in noninterest income, and are not subject to income taxes.\n\nOther Real Estate Owned\n\nOther real estate owned consists of properties formerly pledged as collateral to loans, which have been acquired by the Company through foreclosure proceedings or acceptance of a deed in lieu of foreclosure. Upon transfer of a loan to foreclosure status, an appraisal is generally obtained and any excess of the loan balance over the fair value, less estimated costs to sell, is charged against the allowance for credit losses. Expenses and subsequent adjustments to the fair value are treated as other operating expense.\n\nGoodwill\n\nGoodwill represents the excess of purchase price over the fair value of assets acquired in a transaction using purchase accounting. Goodwill has an indefinite useful life and is not amortized, but is tested for impairment. Goodwill impairment tests are performed on an annual basis or when events or circumstances dictate. The Company accounts for goodwill under ASU\n\n71\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\n2017-04, \"Intangibles - Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment\", which eliminates an entity's requirement to compute the implied fair value. The Company tests goodwill annually as of December 31st. The Company has the option to perform a qualitative assessment of goodwill, which considers company-specific and economic characteristics that might impact its carrying value. If, based on this qualitative assessment, it is more likely than not that the fair value of the reporting unit is less than its carrying amount, then a quantitative test (Step 1) is performed, which compares the fair value of the reporting unit to the carrying amount of the reporting unit in order to identify potential impairment. If the estimated fair value of a reporting unit exceeds its carrying amount, the goodwill of the reporting unit is not considered impaired. The implied fair value of goodwill is determined in the same manner as goodwill that is recognized in a business combination. Significant judgment and estimates are involved in estimating the fair value of the assets and liabilities of the reporting units.\n\nOther Intangible Assets\n\nOther intangible assets include core deposit intangibles, customer related intangibles, covenants not to compete, and mortgage servicing rights. Core deposit intangibles represent a premium paid to acquire a base of stable, low cost deposits in the acquisition of a bank, or a bank branch, using purchase accounting. The amortization period for core deposit intangible ranges from 5 to 10 years, using an accelerated method. The covenants not to compete are amortized on a straight-line basis over 3 to 6 years, while customer related intangibles are amortized on an accelerated basis over a range of 6 to 15 years. The amortization period is monitored to determine if circumstances require such periods to be revised. The Company periodically reviews its intangible assets for changes in circumstances that may indicate the carrying amount of the asset is impaired. The Company tests its intangible assets for impairment on an annual basis or more frequently if conditions indicate that an impairment loss has more likely than not been incurred.\n\nIncome Taxes\n\nDeferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred taxes are reviewed quarterly and reduced by a valuation allowance if, based upon the information available, it is more likely than not that some or all of the deferred tax assets will not be realized. Realization of deferred tax assets is dependent upon the generation of a sufficient level of future taxable income and recoverable taxes paid in prior years. In such cases, although realization is not assured, management believes it is more likely than not that all of the deferred tax assets will be realized. The Company’s policy is to recognize interest and penalties on unrecognized tax benefits in income tax expense in the Consolidated Statements of Income.\n\nTax Credit Investments\n\nThe Company accounts for its investments in qualified affordable housing projects using the proportional amortization method. Under that method, the Company amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received and recognizes the net investment performance in the income statement as a component of income tax expense. As of December 31, 2025 and 2024, the Company's remaining investment in qualified affordable housing projects, net of amortization totaled $1.9 million and $2.1 million, respectively.\n\nSecurities Sold Under Agreements to Repurchase\n\nSecurities sold under agreements to repurchase (repurchase agreements) are agreements in which the Company transfers the underlying securities to a third-party custodian’s account that explicitly recognizes the Company’s interest in the securities. The agreements are accounted for as secured financing transactions provided the Company maintains effective control over the transferred securities and meets other criteria as specified in FASB ASC Topic 860, Transfers and Servicing (\"ASC Topic 860\"). The Company’s agreements are accounted for as secured financings; accordingly, the transaction proceeds are reflected as liabilities and the securities underlying the agreements continue to be carried in the Company’s securities portfolio.\n\nTreasury Stock\n\nThe cost of treasury stock is shown on the Consolidated Statements of Condition as a separate component of shareholders’ equity, and is a reduction to total shareholders’ equity. Shares are released from treasury at fair value, identified on an average cost basis.\n\nTrust and Investment Services\n\nAssets held in fiduciary or agency capacities for customers are not included in the accompanying Consolidated Statements of Condition, since such items are not assets of the Company. Fees associated with providing trust and investment services are included in noninterest income. Additional information on trust and investment fees is presented in \"Note 14 - Revenue Recognition.\"\n\n72\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nEarnings Per Share\n\nBasic earnings per share is calculated by dividing net income available to common shareholders by the weighted average number of shares outstanding during the year, exclusive of shares represented by the unvested portion of restricted stock and restricted stock units. Diluted earnings per share is calculated by dividing net income available to common shareholders by the weighted average number of shares outstanding during the year plus the dilutive effect of the unvested portion of restricted stock and restricted stock units and stock issuable upon conversion of common stock equivalents (primarily stock options) or certain other contingencies. The Company uses authoritative accounting guidance under ASC Topic 260, Earnings Per Share, which provides that unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method. The Company has issued stock-based compensation awards that included restricted stock awards that contain such rights and are thus considered participating securities. The Company has also issued restricted stock awards that do not contain non-forfeitable rights to dividends or dividend equivalents.\n\nSegment Reporting\n\nThe Company manages its operations through two reportable business segments in accordance with the standards set forth in FASB ASC Topic 280, \"Segment Reporting\". The two segments are: (i) banking (\"Banking\") and (ii) wealth management (\"Tompkins Financial Advisors\"). The Company’s wealth management services are managed separately from the Bank. Additional information on the segments is presented in \"Note 22 - Segment and Related Information\".\n\nComprehensive Income (Loss)\n\nFor the Company, comprehensive income (loss) represents net income plus the net change in unrealized gains or losses on available-for-sale debt securities for the period (net of taxes), and the actuarial gain or loss and amortization of unrealized amounts in the Company’s defined-benefit retirement and pension plan, supplemental employee retirement plan, and post-retirement life and healthcare benefit plan (net of taxes), and is presented in the Consolidated Statements of Comprehensive Income (Loss) and Consolidated Statements of Changes in Shareholders’ Equity. Accumulated other comprehensive income (loss) represents the net unrealized gains or losses on available-for-sale debt securities (net of tax) and unrecognized net actuarial gain or loss, unrecognized prior service costs, and unrecognized net initial obligation (net of tax) in the Company’s defined-benefit retirement and pension plan, supplemental employee retirement plan, and post-retirement life and healthcare benefit plan.\n\nPension and Other Employee Benefits\n\nThe Company maintains noncontributory defined-benefit and defined contribution plans, which cover substantially all employees of the Company. In addition, the Company also maintains supplemental employee retirement plans for certain executives and a post-retirement life and healthcare plan. These plans are discussed in detail in \"Note 11 - Employee Benefit Plans\". The Company incurs certain employment-related expenses associated with these plans. In order to measure the expense associated with these plans, various assumptions are made including the discount rate used to value certain liabilities, expected return on plan assets, anticipated mortality rates, and expected future healthcare costs. The assumptions are based on historical experience as well as current facts and circumstances. A third-party actuarial firm is used to assist management in measuring the expense and liability associated with the plans. The Company uses a December 31 measurement date for its plans. As of the measurement date, plan assets are determined based on fair value, generally representing observable market prices. The projected benefit obligation is primarily determined based on the present value of projected benefit distributions at an assumed discount rate.\n\nThe expenses associated with these plans are charged to current operating expenses. The Company recognizes an asset for a plan’s overfunded status or a liability for a plan’s underfunded status in the Company’s consolidated statements of condition, and recognizes changes in the funded status of these plans in comprehensive income, net of applicable taxes, in the year in which the change occurred.\n\nStock-Based Compensation\n\nThe Company's current stock-based compensation plan provides for stock options, stock appreciation rights (\"SARs\"), restricted stock awards, restricted stock units and performance share units.\n\nCompensation expense for awards is recognized over the service period based on the fair value at the date of grant and is included in salaries and employee benefits expense in the Consolidated Statements of Income. Grant date fair value for SARs is estimated using the Black-Scholes option-pricing model. Awards of restricted stock awards, restricted stock units and performance share units are valued at the fair market value of the Company's common stock as of the award date. Compensation expense for performance share units is estimated based on the probability that the performance conditions will be achieved. The likelihood that the performance conditions will be met is assessed each reporting period. Forfeitures are recognized when they occur. Vested equity awards are issued from authorized but unissued stock.\n\n73\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nExcess tax benefits (expenses) result when tax return deductions differ from recognized share-based compensation cost that is determined using the grant-date fair value approach for financial statement purposes. Excess tax benefits (expenses) related to the settlement of share-based awards are recorded as a decrease (increase) to income tax expense in the Consolidated Income Statements and are classified in the Consolidated Statements of Cash Flows as an operating activity.\n\nFair Value Measurements\n\nThe Company accounts for the provisions of FASB ASC Topic 820, Fair Value Measurements and Disclosures (\"ASC Topic 820\"), for financial assets and financial liabilities. ASC Topic 820 defines fair value, establishes a framework for measuring fair value in accordance with GAAP, and expands disclosures about fair value measurements. See \"Note 19 - Fair Value Measurements\".\n\nIn general, fair values of financial instruments are based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon internally developed models that primarily use, as inputs, observable market-based parameters. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. These adjustments may include amounts to reflect counterparty credit quality and the Company’s creditworthiness, among others.\n\nRevenue Recognition\n\nA majority of the Company's revenue is generated from interest income and falls outside the scope of ASC 606. Revenue streams within the scope of ASC 606 are presented in noninterest revenue streams and include deposit related fees, card services income, and trust and wealth management income. Prior to the sale of TIA on October 31, 2025, such revenue streams also included insurance commissions and fees. Refer to \"Note 14 - Revenue Recognition\" for additional disclosures.\n\nDerivative Instruments and Hedging Activities\n\nThe Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company also enters into interest rate derivatives to accommodate the business requirements of certain qualifying customers. All derivatives are recognized as other assets or other liabilities on the Company's Consolidated Statements of Condition at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative and resulting designation.\n\nFor derivatives designated and that qualify as fair value hedges, the gain or loss on the derivative as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in interest income.\n\nThe Company has entered into risk participation agreements with other banks in commercial loan arrangements. These derivatives are not designated as hedges and therefore, changes in fair value are recognized in earnings.\n\nUnder a risk participation-out agreement, a derivative asset, the Company participates out a portion of the credit risk associated with the interest rate swap position executed with the commercial borrower for a fee paid to the participating bank. Under a risk participation-in agreement, a derivative liability, the Company assumes, or participates in, a portion of the credit risk associated with the interest rate swap position with the commercial borrower for a fee received from the other bank.\n\nNewly Adopted Accounting Standards\n\nASU 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.    \n\nASU 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.\n\nASU 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 periods in those years. Aside from complying with the new disclosure requirements this ASU did not have a material impact on our consolidated financial statements. Refer to \"Note 15- Income Taxes\" for required disclosures.\n\n74\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nAccounting Standards Pending Adoption\n\nASU 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 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.\n\nASU 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.\n\nASU 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 effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Tompkins is currently evaluating the potential impact of ASU 2025-11 on our consolidated financial statements.\n\nASU No. 2025-12, \"Codification Improvements,\" addresses suggestions received from stakeholders on the Accounting Standards Codification and to make other incremental improvements to generally accepted accounting principles (GAAP). This ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Adoption is not expected to have a material impact on our consolidated financial statements.\n\nThe Company reviews new accounting standards as issued. Management has not identified any other new standards that it believes will have a significant impact on the Company’s consolidated financial statements.\n\nNote 2 Divestiture\n\nOn October 31, 2025, the Company ceased insurance operations when it sold all of the issued and outstanding shares of capital stock of TIA to Gallagher. The gross purchase price was $223.0 million.\n\nThe net cash proceeds at closing included the gross purchase price of $223.0 million, adjusted by the items shown in the below table, for net proceeds of $220.8 million. The transaction also included a $20.6 million write off of Goodwill and Intangibles and a $16.1 million balance sheet write off. In connection with the sale, the Company recognized a gain on sale of $188.2 million, which is subject to certain post-closing adjustments during the 120-day post-closing settlement period ending on February 28, 2026. In addition, the Company recognized $4.3 million of noninterest expenses related to the sale.\n\n(In thousands)\n\nGross purchase price pursuant to Stock Purchase Agreement$223,000 \n\nTransaction costs settled at closing11,586 \n\nWorking capital adjustment settled at closing(2,097)\n\nNet cash proceeds at closing$213,511 \n\nFiduciary cash transferred to Gallagher(12,912)\n\nIndebtedness transferred to Gallagher5,758 \n\nAdjusted net proceeds$220,665 \n\nTompkins recorded insurance revenue of $35.6 million in 2025, $39.1 million in 2024, and $37.4 million in 2023. For more information refer to \"Note 22 - Segment and Related Information\".\n\nPrior to the sale of TIA, management evaluated the accounting treatment of the potential sale as it relates to held-for-sale and any succeeding discontinued operations financial impact. Based on management’s review of ASC 205-20-45-1E it determined that the transaction would not meet all necessary criteria to be considered discontinued operations.\n\n75\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nNote 3 Securities \n\nAvailable-for-Sale Debt Securities\n\nThe following tables summarize available-for-sale debt securities held by the Company at December 31, 2025 and 2024:\n\n(In thousands)Amortized\nCostGross\nUnrealized\nGainsGross\nUnrealized\nLossesFair Value\n\nDecember 31, 2025\n\nU.S. Treasuries$55,492 $213 $1,925 $53,780 \n\nObligations of U.S. Government sponsored entities354,128 5,928 11,653 348,403 \n\nObligations of U.S. states and political subdivisions81,517 7 5,214 76,310 \n\nMortgage-backed securities – residential, issued by\n\n U.S. Government agencies315,001 852 2,357 313,496 \n\n U.S. Government sponsored entities582,741 6,712 1,821 587,632 \n\nU.S. corporate debt securities2,500 0 53 2,447 \n\nTotal available-for-sale debt securities$1,391,379 $13,712 $23,023 $1,382,068 \n\nDecember 31, 2024\n\nU.S. Treasuries$75,141 $140 $3,784 $71,497 \n\nObligations of U.S. Government sponsored entities398,648 2,008 20,376 380,280 \n\nObligations of U.S. states and political subdivisions86,328 4 8,638 77,694 \n\nMortgage-backed securities – residential, issued by\n\nU.S. Government agencies68,130 3 4,879 63,254 \n\nU.S. Government sponsored entities736,376 1,680 101,696 636,360 \n\nU.S. corporate debt securities2,500 0 53 2,447 \n\nTotal available-for-sale debt securities$1,367,123 $3,835 $139,426 $1,231,532 \n\nHeld-to-Maturity Debt Securities \n\nThe following tables summarize held-to-maturity debt securities held by the Company at December 31, 2025 and 2024:\n\n(In thousands)Amortized\nCostGross\nUnrealized\nGainsGross\nUnrealized\nLossesFair Value\n\nDecember 31, 2025\n\nU.S. Treasuries$85,831 $0 $7,037 $78,794 \n\nObligations of U.S. Government sponsored entities226,697 0 21,631 205,066 \n\nTotal held-to-maturity debt securities$312,528 $0 $28,668 $283,860 \n\nDecember 31, 2024\n\nU.S. Treasuries$86,049 $0 $11,361 $74,688 \n\nObligations of U.S. Government sponsored entities226,413 0 33,806 192,607 \n\nTotal held-to-maturity debt securities$312,462 $0 $45,167 $267,295 \n\nThe following table sets forth information with regard to sales transactions of available-for-sale debt securities:\n\nYear ended December 31,\n\n(In thousands)202520242023\n\nProceeds from sales$485,516 $39,952 $440,488 \n\nGross realized gains0 50 0 \n\nGross realized losses(78,721)0 (69,983)\n\nNet gain (loss) on sales of available-for-sale debt securities$(78,721)$50 $(69,983)\n\n76\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nThe Company's available-for-sale and held-to-maturity debt securities portfolios include callable securities that may be called prior to maturity. The Company did not recognize any gains on called securities for the years ended December 31, 2025, 2024 and 2023. The Company also recognized net gains of $32,000, net losses of $18,400, and net gains of $10,000 on equity securities for the years ended December 31, 2025, 2024 and 2023, respectively, reflecting the change in fair value.\n\nIn the fourth quarter of 2025, the Company completed a balance sheet repositioning for general balance sheet, portfolio and interest rate risk management, by selling approximately $564.2 million of available-for-sale debt securities, which resulted in a pre-tax loss on the sale of approximately $78.7 million. In 2023, the Company completed a similar balance sheet repositioning by selling approximately $510.5 million of available-for-sale debt securities, which resulted in a pre-tax loss on the sale of approximately $70.0 million.\n\nThe following table summarizes available-for-sale debt securities that had unrealized losses at December 31, 2025 and December 31, 2024:\n\nLess than 12 Months12 Months or LongerTotal\n\n(In thousands)Fair ValueUnrealized LossesFair ValueUnrealized LossesFair ValueUnrealized Losses\n\nDecember 31, 2025\n\nU.S. Treasuries$0 $0 $38,936 $1,925 $38,936 $1,925 \n\nObligations of U.S. Government sponsored entities0 0 141,606 11,653 141,606 11,653 \n\nObligations of U.S. states and political subdivisions2,530 2 65,279 5,212 67,809 5,214 \n\nMortgage-backed securities – residential, issued by\n\nU.S. Government agencies179,250 2,129 12,051 228 191,301 2,357 \n\nU.S. Government sponsored entities291,424 1,452 7,990 369 299,414 1,821 \n\nU.S. corporate debt securities0 0 2,447 53 2,447 53 \n\nTotal available-for-sale debt securities$473,204 $3,583 $268,309 $19,440 $741,513 $23,023 \n\nDecember 31, 2024\n\nU.S. Treasuries$0 $0 $57,019 $3,784 $57,019 $3,784 \n\nObligations of U.S. Government sponsored entities14,085 515 188,296 19,861 202,381 20,376 \n\nObligations of U.S. states and political subdivisions3,159 36 73,657 8,602 76,816 8,638 \n\nMortgage-backed securities – residential, issued by\n\nU.S. Government agencies27,082 89 35,879 4,790 62,961 4,879 \n\nU.S. Government sponsored entities32,063 502 523,353 101,194 555,416 101,696 \n\nU.S. corporate debt securities0 0 2,447 53 2,447 53 \n\nTotal available-for-sale debt securities$76,389 $1,142 $880,651 $138,284 $957,040 $139,426 \n\n77\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nThe following table summarizes held-to-maturity debt securities that had unrealized losses at December 31, 2025 and December 31, 2024:\n\nLess than 12 Months12 Months or LongerTotal\n\n(In thousands)Fair ValueUnrealized LossesFair ValueUnrealized LossesFair ValueUnrealized Losses\n\nDecember 31, 2025\n\nU.S. Treasuries$0 $0 $78,794 $7,037 $78,794 $7,037 \n\nObligations of U.S. Government sponsored entities0 0 205,066 21,631 205,066 21,631 \n\nTotal held-to-maturity debt securities$0 $0 $283,860 $28,668 $283,860 $28,668 \n\nDecember 31, 2024\n\nU.S. Treasuries$0 $0 $74,688 $11,361 $74,688 $11,361 \n\nObligations of U.S. Government sponsored entities0 0 192,607 33,806 192,607 33,806 \n\nTotal held-to-maturity debt securities$0 $0 $267,295 $45,167 $267,295 $45,167 \n\nWithin the available-for-sale and held-to-maturity portfolios, the total number of securities in an unrealized loss position were 232 and 577 at December 31, 2025 and 2024, respectively.\n\nThe 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 is due to credit-related factors or noncredit-related factors.\n\nFactors that may be indicative of ECL include, but are not limited to, the following:\n\n•Extent to which the fair value is less than the amortized cost basis.\n\n•Adverse conditions specifically related to the security, an industry, or geographic area (changes in technology, business practice).\n\n•Payment structure of the debt security with respect to underlying issuer or obligor.\n\n•Failure of the issuer to make scheduled payment of principal and/or interest.\n\n•Changes to the rating of a security or issuer by a nationally recognized statistical rating organization.\n\n•Changes in tax or regulatory guidelines that impact a security or underlying issuer.\n\nFor 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 credit worthiness of the underlying issuer. Any impairment that is not credit related is recognized in other comprehensive income (loss), net of applicable taxes. Credit-related impairment is recognized as an allowance for credit losses (\"ACL\") on the Statements of Condition, limited to the amount by which the amortized cost basis exceeds the fair value, with a corresponding adjustment to earnings. Both the ACL and the adjustment to net income may be reversed if conditions change.\n\nManagement measures expected credit losses on held-to-maturity debt securities on a collective basis by major security type with each type sharing similar risk characteristics and considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. Management has made the accounting policy election to exclude accrued interest receivable on held-to-maturity debt securities from the estimate of credit losses. As of December 31, 2025, the held-to-maturity portfolio consisted of U.S. Treasury securities and securities issued by U.S. government-sponsored enterprises, including the Federal National Mortgage Agency and the Federal Farm Credit Banks Funding Corporation. U.S. Treasury securities are backed by the full faith and credit of and/or guaranteed by the U.S. government, and it is expected that the securities will not be settled at prices less than the amortized cost bases of the securities. Securities issued by U.S. government agencies or U.S. government-sponsored enterprises carry the explicit and/or implicit guarantee of the U.S. government, are widely recognized as \"risk-free,\" and have a long history of zero credit loss. As such, the Company did not record an allowance for credit losses for these securities as of December 31, 2025.\n\nThe total gross unrealized losses, shown in the tables above, were primarily attributable to changes in interest rates and levels of market liquidity, relative to when the investment securities were purchased, and not due to the credit-related quality of the investment securities. The Company does not have the intent to sell these securities and does not believe it is more likely than not that the Company will be required to sell these securities before a recovery of amortized cost. The gross unrealized losses\n\n78\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nreported for available-for-sale residential mortgage-backed securities relate to investment securities issued by U.S. government sponsored entities such as Federal National Mortgage Association, FHLMC and U.S. government agencies such as Government National Mortgage Association. The gross unrealized losses for held-to-maturity debt securities are on US Treasuries and securities issued by U.S. government-sponsored enterprises, including the Federal National Mortgage Agency and the Federal Farm Credit Banks Funding Corporation.\n\nThe Company did not recognize any net credit impairment charge to earnings on investment securities in 2025, 2024, or 2023.\n\nThe amortized cost and estimated fair value of debt securities by contractual maturity are shown in the following tables. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Mortgage-backed securities are shown separately since they are not due at a single maturity date. \n\nDecember 31, 2025December 31, 2024\n\n(In thousands)Amortized CostFair ValueAmortized CostFair Value\n\nAvailable-for-sale debt securities:\n\nDue in one year or less$74,224 $74,109 $100,000 $99,153 \n\nDue after one year through five years238,913 231,336 227,502 215,976 \n\nDue after five years through ten years180,500 175,495 212,789 199,457 \n\nDue after ten years0 0 22,326 17,332 \n\nTotal493,637 480,940 562,617 531,918 \n\nMortgage-backed securities897,742 901,128 804,506 699,614 \n\nTotal available-for-sale debt securities$1,391,379 $1,382,068 $1,367,123 $1,231,532 \n\nDecember 31, 2025December 31, 2024\n\n(In thousands)Amortized CostFair ValueAmortized CostFair Value\n\nHeld-to-maturity debt securities:\n\nDue after one year through five years$174,870 $160,547 $117,283 $102,173 \n\nDue after five years through ten years137,658 123,313 195,179 165,122 \n\nTotal held-to-maturity debt securities$312,528 $283,860 $312,462 $267,295 \n\nTrading Securities \n\nThe Company had no securities designated as trading during 2025 or 2024.\n\nPledged Securities \n\nThe Company pledges securities as collateral for public deposits and other borrowings, and sells securities under agreements to repurchase. See \"Note 9 - Federal Funds Purchased and Securities Sold Under Agreements to Repurchase\" for further discussion. Securities carried of $887.5 million and $904.2 million, at December 31, 2025 and 2024, respectively, were either pledged or sold under agreements to repurchase.\n\nConcentrations of Securities \n\nExcept for U.S. government securities, there were no holdings, when taken in the aggregate, of any single issuer that exceeded 10% of shareholders’ equity at December 31, 2025.\n\nEquity Securities\n\nThe Company invests in one equity fund. This security is carried at fair value.\n\nInvestment in Small Business Investment Companies \n\nThe Company has equity investments in small business investment companies (\"SBIC\") established for the purpose of providing financing to small businesses in market areas served by the Company. These investments totaled $671,000 at December 31, 2025 and 2024, and were included in other assets on the Company’s Consolidated Statements of Condition. These investments are accounted for either under the cost method or the equity method of accounting. As of December 31, 2025, the Company reviewed these investments and determined that there was no impairment.\n\n79\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nFederal Home Loan Bank Stock \n\nThe 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. Holdings of FHLBNY stock and ACBB stock totaled $32.2 million and $95,000, respectively, at December 31, 2025. These securities are carried at par, which is also cost. As of December 31, 2025, the FHLBNY continued to pay dividends and repurchase stock. As such, the Company has not recognized any impairment on its holdings of FHLBNY.\n\nNote 4 Loans and Leases\n\nLoans and Leases at December 31, 2025 and December 31, 2024 were as follows:\n\nYear ended December 31,\n\n(In thousands)20252024\n\nCommercial and industrial\n\nAgriculture$114,475 $110,007 \n\nCommercial and industrial other986,173 855,568 \n\nSubtotal commercial and industrial1,100,648 965,575 \n\nCommercial real estate\n\nConstruction448,901 385,931 \n\nAgriculture234,292 217,582 \n\nCommercial real estate other2,978,842 2,776,304 \n\nSubtotal commercial real estate3,662,035 3,379,817 \n\nResidential real estate\n\nHome equity227,654 204,194 \n\nMortgages1,363,532 1,366,646 \n\nSubtotal residential real estate1,591,186 1,570,840 \n\nConsumer and other\n\nIndirect68 229 \n\nConsumer and other86,399 96,163 \n\nSubtotal consumer and other86,467 96,392 \n\nLeases10,413 12,484 \n\nTotal loans and leases$6,450,749 $6,025,108 \n\nLess: unearned income and deferred costs and fees(4,504)(5,186)\n\nTotal loans and leases, net of unearned income and deferred costs and fees$6,446,245 $6,019,922 \n\nThe Company has adopted comprehensive lending policies, underwriting standards and loan review procedures. There were no significant changes to the Company’s existing lending policies, underwriting standards or loan review procedures during 2025. The Company’s Board of Directors approves the lending policies at least annually. The Company recognizes that exceptions to policy guidelines may occasionally occur and has established procedures for approving exceptions to these policy guidelines. Management has also implemented reporting systems to monitor loan originations, loan quality, concentrations of credit, loan delinquencies and nonperforming loans and potential problem loans.\n\nResidential real estate loans \n\nThe Company’s policy is to underwrite residential real estate loans in accordance with secondary market guidelines in effect at the time of origination, including loan-to-value (\"LTV\") and documentation requirements. LTVs exceeding 80% for fixed rate loans and 80% for adjustable rate loans require private mortgage insurance to reduce the exposure. The Company verifies applicants’ income, obtains credit reports and independent real estate appraisals in the underwriting process to ensure adequate collateral coverage and that loans are extended to individuals with good credit and income sufficient to repay the loan. In limited circumstances, the Company will make exceptions to secondary market underwriting standards to support community reinvestment activities.\n\n80\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nThe 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. Adjustable rate loans have increased in popularity due to the rising interest rate environment. Adjustable rate residential real estate loans are underwritten based upon the initial rate when the fixed rate period is 5 years or longer. For loans with an initial fixed rate of less than 5 years, the fully indexed rate is utilized for the ability to repay qualifying and underwriting. This underwriting practice matches secondary market guidelines.\n\nThe Company may sell residential real estate loans in the secondary market based on interest rate considerations. These residential real estate loans are generally sold to FHLMC without recourse in accordance with standard secondary market loan sale agreements. These residential real estate loan sales are subject to customary representations and warranties, including representations and warranties related to gross incompetence and fraud. The Company has not had to repurchase any loans as a result of these general representations and warranties. \n\nDuring 2025, 2024, and 2023, the Company sold residential mortgage loans totaling $85.6 million, $40.1 million, and $4.5 million, respectively, and realized net gains on these sales of $2.2 million, $1.0 million, and $96,000, respectively. These residential real estate loans are generally sold without recourse in accordance with standard secondary market loan sale agreements. When residential mortgage loans are sold to FHLMC, the Company typically retains all servicing rights, which provides the Company with a source of fee income. In connection with the sales in 2025, 2024, and 2023, the Company recorded mortgage-servicing assets of $642,000, $299,000, and $34,000, respectively. The loans sold to FHLMC were originated with the intent to sell.\n\nAmortization of mortgage servicing assets amounted to $120,000 in 2025, $91,000 in 2024, and $81,000 in 2023. At December 31, 2025 and 2024, the Company serviced residential mortgage loans aggregating $227.7 million and $158.0 million. Mortgage servicing rights, at an amortized cost basis, totaled $1.7 million at December 31, 2025 and $1.1 million at December 31, 2024. These mortgage servicing rights were evaluated for impairment at year-end 2025 and 2024 and no impairment was recognized. Loans held for sale, which are included in residential real estate, totaled $5.4 million and $1.7 million at December 31, 2025 and 2024, respectively.\n\nAs members of the FHLB, the Company’s subsidiary bank may use unencumbered mortgage related assets to secure borrowings from the FHLB. At December 31, 2025 and 2024, the Company had $169.4 million and $543.2 million, respectively, of term advances from the FHLB that were secured by residential mortgage loans. In addition to the term advances presented above, standby letters of credit with the FHLB of $225.0 million and $200.0 million, at December 31, 2025 and 2024, respectively, were secured by residential mortgage loans.\n\nCommercial and industrial loans \n\nThe Company’s Commercial Loan Policy sets forth guidelines for debt service coverage ratios, LTV’s and documentation standards. Commercial and industrial loans are primarily made based on identified cash flows of the borrower with consideration given to underlying collateral and personal or government guarantees. The Company’s policy establishes debt service coverage ratio limits that require a borrower’s cash flow to be sufficient to cover principal and interest payments on all new and existing debt. Commercial and industrial loans are generally secured by the assets being financed or other business assets such as accounts receivable or inventory. Many of the loans in the commercial portfolio have variable interest rates tied to Prime Rate, FHLBNY borrowing rates, Secured Overnight Financing Rate (\"SOFR\"), or U.S. Treasury indices.\n\nCommercial real estate \n\nThe Company’s Commercial Loan Policy sets forth guidelines for debt service coverage ratios, LTV’s and documentation standards. Commercial real estate loans are primarily made based on identified cash flows of the borrower with consideration given to underlying real estate collateral and personal or government guarantees. The Company’s policy establishes a maximum LTV based on the type of property and debt service coverage ratio limits that require a borrower’s cash flow to be sufficient to cover principal and interest payments on all new and existing debt. Commercial real estate loans may be fixed or variable rate loans with interest rates tied to Prime Rate, FHLBNY borrowing rates, SOFR, or U.S. Treasury indices.\n\nAgriculture loans\n\nAgriculturally-related loans include loans to dairy farms, cash and vegetable crop farms and a variety of other livestock and crop producers. Agriculturally-related loans are primarily made based on identified cash flows of the borrower with consideration given to underlying collateral, personal guarantees, and government related guarantees. Agriculturally-related loans are generally secured by the assets or property being financed or other business assets such as accounts receivable, livestock, equipment, or commodities/crops. The Company’s policy establishes a maximum LTV based on the type of property and debt service coverage ratio limits that require a borrower’s cash flow to be sufficient to cover principal and interest\n\n81\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\npayments on all new and existing debt, with limited adjustments to consider commodity market cycles. The policy also establishes maximum LTV ratios for non-real estate collateral, such as livestock, commodities/crops, equipment and accounts receivable. Agriculturally-related loans may be fixed or variable rate with interest tied to Prime Rate, FHLBNY borrowing rates, SOFR, or U.S. Treasury indices.\n\nConsumer and other loans\n\nThe consumer loan portfolio includes indirect and direct loans relating to personal installment loans, automobile financing, and overdraft lines of credit. The majority of the consumer portfolio consists of indirect and direct automobile loans. Consumer loans are generally short-term and have fixed rates of interest that are set giving consideration to current market interest rates, the financial strength of the borrower, and internal profitability targets. The Company's Consumer Loan Underwriting Guidelines Policy establishes maximum debt to income ratios and includes guidelines for verification of applicants’ income and receipt of credit reports.\n\nLeases \n\nLeases are primarily made to commercial customers and the origination criteria typically includes the value of the underlying assets being financed, the useful life of the assets being financed, and identified cash flows of the borrower. Most leases carry a fixed rate of interest that is set giving consideration to current market interest rates, the financial strength of the borrower, and internal profitability targets. \n\nLoan and Lease Customers \n\nThe Company’s loan and lease customers are located primarily in the upstate New York and Pennsylvania communities served by Tompkins Community Bank. The Bank operates twelve banking offices in the counties of Tompkins, Cayuga, Cortland, Onondaga and Schuyler, New York; fourteen banking offices in the counties of Wyoming, Livingston, Genesee, Orleans and Monroe, New York; twelve banking offices in the counties of Putnam County, Dutchess County and Westchester, New York; and sixteen offices in the counties of Berks, Montgomery, Philadelphia, Delaware and Schuylkill, Pennsylvania. Other than general economic risks, management is not aware of any material concentrations of credit risk to any industry or individual borrower. \n\nLoans to Related Parties\n\nDirectors and officers of the Company and its affiliated companies are customers of, and have other transactions with, the Company's banking subsidiaries in the ordinary course of business. Such loans and commitments are made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons not related to the Company, and did not involve more than normal risk of collectability or present other unfavorable features.\n\nNonaccrual Loans and Leases \n\nLoans are considered past due if the required principal and interest payments have not been received as of the date such payments are due. Loans are placed on nonaccrual status either due to the delinquency status of principal and/or interest (generally when past due 90 or more days) or a judgment by management that the full repayment of principal and interest is unlikely. When interest accrual is discontinued, all unpaid accrued interest is reversed. Payments received on loans on nonaccrual are generally applied to reduce the principal balance of the loan. Loans are generally returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. When management determines that the collection of principal in full is improbable, management will charge-off a partial amount or full amount of the loan balance. Management considers specific facts and circumstances relative to each individual credit in making such a determination. For residential and consumer loans, management uses specific regulatory guidance and thresholds for determining charge-offs. \n\n82\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nThe below tables present an aging analysis of past due loans, segregated by class of loans as of December 31, 2025 and 2024:\n\n(In thousands)30-59 Days60-89 Days90 Days or MoreTotal Past DueCurrent LoansTotal Loans\n\nDecember 31, 2025\n\nCommercial and industrial\n\nAgriculture$4 $0 $0 $4 $114,471 $114,475 \n\nCommercial and industrial other1,818 1,5435,136 8,497 977,676 986,173 \n\nSubtotal commercial and industrial1,8221,5435,1368,5011,092,1471,100,648\n\nCommercial real estate\n\nConstruction0 017,302 17,302 431,599 448,901 \n\nAgriculture69 00 69 234,223 234,292 \n\nCommercial real estate other474 7754,507 5,756 2,973,086 2,978,842 \n\nSubtotal commercial real estate54377521,80923,1273,638,9083,662,035\n\nResidential real estate\n\nHome equity1,286 1072,040 3,433 224,221 227,654 \n\nMortgages0 2,3318,225 10,556 1,352,976 1,363,532 \n\nSubtotal residential real estate1,2862,43810,26513,9891,577,1971,591,186\n\nConsumer and other\n\nIndirect0 00 0 68 68 \n\nConsumer and other295 104191 590 85,809 86,399 \n\nSubtotal consumer and other295 104191 590 85,877 86,467 \n\nLeases0 00 0 10,413 10,413 \n\nTotal loans and leases$3,946 $4,860 $37,401 $46,207 $6,404,542 $6,450,749 \n\nLess: unearned income and deferred costs and fees0 00 0 (4,504)(4,504)\n\nTotal loans and leases, net of unearned income and deferred costs and fees$3,946 $4,860 $37,401 $46,207 $6,400,038 $6,446,245 \n\n(In thousands)30-59 Days60-89 Days90 Days or MoreTotal Past DueCurrent LoansTotal Loans\n\nDecember 31, 2024\n\nCommercial and industrial\n\nAgriculture$0 $0 $0 $0 $110,007 $110,007 \n\nCommercial and industrial other3,944 32 684 4,660 850,908 855,568 \n\nSubtotal commercial and industrial3,944 32 684 4,660 960,915 965,575 \n\nCommercial real estate\n\nConstruction1,120 17,400 0 18,520 367,411 385,931 \n\nAgriculture81 0 0 81 217,501 217,582 \n\nCommercial real estate other0 1,605 11,966 13,571 2,762,733 2,776,304 \n\nSubtotal commercial real estate1,201 19,005 11,966 32,172 3,347,645 3,379,817 \n\nResidential real estate\n\nHome equity955 91 1,811 2,857 201,337 204,194 \n\nMortgages0 2,836 9,257 12,093 1,354,553 1,366,646 \n\nSubtotal residential real estate955 2,927 11,068 14,950 1,555,890 1,570,840 \n\nConsumer and other\n\nIndirect3 2 7 12 217 229 \n\nConsumer and other430 329 354 1,113 95,050 96,163 \n\nSubtotal consumer and other433 331 361 1,125 95,267 96,392 \n\nLeases0 0 0 0 12,484 12,484 \n\nTotal loans and leases$6,533 $22,295 $24,079 $52,907 $5,972,201 $6,025,108 \n\nLess: unearned income and deferred costs and fees0 0 0 0 (5,186)(5,186)\n\nTotal loans and leases, net of unearned income and deferred costs and fees$6,533 $22,295 $24,079 $52,907 $5,967,015 $6,019,922 \n\n83\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nThe following table presents the amortized cost basis of loans on nonaccrual status and the amortized cost basis of loans on nonaccrual status for which there was no related allowance for credit losses:\n\nDecember 31, 2025December 31, 2024\n\n(In thousands)Nonaccrual Loans and Leases with no ACLNonaccrual Loans and LeasesLoans and Leases Past Due Over 89 Days and AccruingNonaccrual Loans and Leases with no ACLNonaccrual Loans and LeasesLoans and Leases Past Due Over 89 Days and Accruing\n\nCommercial and industrial\n\nAgriculture$0 $0 $0 $0 $519 $0 \n\nCommercial and industrial other4,565 8,305 0 0 1,023 0 \n\nSubtotal commercial and industrial4,565 8,305 0 0 1,542 0 \n\nCommercial real estate\n\nConstruction0 17,303 0 0 0 0 \n\nAgriculture0 92 0 0 129 0 \n\nCommercial real estate other1,463 5,469 0 24,179 32,461 0 \n\nSubtotal commercial real estate1,463 22,864 0 24,179 32,590 0 \n\nResidential real estate\n\nHome equity232 2,624 0 610 2,889 0 \n\nMortgages1,570 13,931 1 1,338 13,389 9 \n\nSubtotal residential real estate1,802 16,555 1 1,948 16,278 9 \n\nConsumer and other\n\nIndirect0 0 0 0 13 0 \n\nConsumer and other0 70 145 0 125 314 \n\nSubtotal consumer and other0 70 145 0 138 314 \n\nLeases0 0 0 0 0 0 \n\nTotal loans and leases$7,830 $47,794 $146 $26,127 $50,548 $323 \n\nThe difference between the interest income that would have been recorded if nonaccrual loans and leases had paid in accordance with their original terms and the interest income that was recorded, was $5.5 million for the year ended December 31, 2025, $13.9 million for the year ended December 31, 2024, and $2.2 million for year ended December 31, 2023. The Company had no material commitments to make additional advances to borrowers with nonperforming loans.\n\nNote 5 Allowance for Credit Losses\n\nManagement reviews the appropriateness of the ACL on a regular basis. Management considers the accounting policy relating to the allowance to be a critical accounting policy, given the inherent uncertainty in evaluating the levels of the allowance required to cover credit losses in the portfolio and the material effect that assumptions could have on the Company’s results of operations. The Company has developed a methodology to measure the amount of estimated credit loss exposure inherent in the loan portfolio to assure that an appropriate allowance is maintained. The Company’s methodology is based upon guidance provided in SEC Staff Accounting Bulletin No. 119, Measurement of Credit Losses on Financial Instruments (\"CECL\"), and Financial Instruments - Credit Losses and ASC Topic 326, Financial Instruments - Credit Losses.\n\nThe Company uses the DCF method to estimate expected credit losses for the commercial, commercial real estate, residential, home equity, and consumer loan pools. For each of these loan segments, the Company generates cash flow projections at the loan level wherein payment expectations are adjusted for exposure at default using estimated prepayment speeds, time to recovery, probability of default, and loss given default. The modeling of expected prepayment speeds, and time to recovery are based on historical internal data.\n\nThe Company uses regression analysis of historical internal and peer data to determine suitable loss drivers to utilize when modeling lifetime probability of default and loss given default. This analysis also determines how expected probability of default and loss given default will react to forecasted levels of the loss drivers. For all loan pools utilizing the DCF method,\n\n84\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nmanagement utilizes and forecasts national unemployment and a one-year percentage change in national gross domestic product as loss drivers in the model.\n\nFor all DCF models, management has determined that four quarters represents a reasonable and supportable forecast period and reverts back to a historical loss rate over eight quarters on a straight-line basis. Management leverages economic projections from an independent third party to inform its loss driver forecasts over the four-quarter forecast period. Other internal and external indicators of economic forecasts, and scenario weightings, are also considered by management when developing the forecast metrics. The model considers a base case forecast and two alternative forecasts and assigns weightings to these three scenarios based on current conditions and expectations for future conditions.\n\nThe combination of adjustments for credit expectations (default and loss) and timing expectations (prepayment, curtailment, and time to recovery) produces an expected cash flow stream at the loan level. Instrument effective yield is calculated, net of the impacts of prepayment assumptions, and the instrument expected cash flows are then discounted at that effective yield to produce an instrument-level net present value of expected cash flows (\"NPV\"). An ACL is established for the difference between the instrument’s NPV and amortized cost basis.\n\nThe model also considers the need to qualitatively adjust expected loss estimates for information not already captured in the loss estimation process. These qualitative factors include, but are not limited to, those suggested by the Interagency Policy Statement on Allowances for Credit Losses. These qualitative factor adjustments may increase or decrease the Company's estimate of expected credit losses.\n\nDue to the size and characteristics of the leasing portfolio, the remaining life method, using the historical loss rate of the commercial and industrial segment, is used to determine the allowance for credit losses.\n\nLoan Commitments and Allowance for Credit Losses on Off-Balance Sheet Credit Exposures\n\nFinancial instruments include off-balance sheet credit instruments, such as commitments to make loans, and commercial letters of credit. The Company's exposure to credit loss in the event of nonperformance by the other party to the financial instrument for off-balance sheet loan commitments is represented by the contractual amount of those instruments. Such financial instruments are recorded when they are funded. The Company records an allowance for credit losses on off-balance sheet credit exposures, unless the commitments to extend credit are unconditionally cancellable, through a charge to credit loss expense for off-balance sheet credit exposures included in provision expense in the Company's consolidated statements of income.\n\nChanges in the allowance for credit losses for the years ended December 31, 2025, 2024 and 2023 are summarized as follows:\n\nAllowance for Credit Losses - Loans and Leases\n\n(In thousands)202520242023\n\nTotal allowance at beginning of year $56,496 $51,584 $45,934 \n\nImpact of adopting ASU 2022-020 0 64 \n\nProvision for credit loss expense11,564 7,418 4,865 \n\nRecoveries on loans and leases821 634 1,820 \n\nCharge-offs on loans and leases(11,210)(3,140)(1,099)\n\nTotal allowance at end of year$57,671 $56,496 $51,584 \n\nAllowance for Credit Losses - Off-Balance Sheet Credit Exposures\n\n(In thousands)202520242023\n\nLiabilities for off-balance sheet credit exposures at beginning of period$1,463 $2,270 $2,796 \n\nProvision for credit loss expense related to off-balance sheet credit exposures(30)(807)(526)\n\nLiabilities for off-balance sheet credit exposures at end of period$1,433 $1,463 $2,270 \n\n85\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nThe following table details activity in the allowance for credit losses for loans for the years ended December 31, 2025 and 2024. The allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.\n\n(In thousands)Commercial\n& IndustrialCommercial\nReal EstateResidential\nReal EstateConsumer\nand OtherFinance\nLeasesTotal\n\nDecember 31, 2025\n\nAllowance for credit losses:\n\nBeginning balance$7,684 $35,837 $11,345 $1,568 $62 $56,496 \n\nCharge-offs(1,541)(7,310)0 (2,359)0 (11,210)\n\nRecoveries82 4 118 617 0 821 \n\nProvision (credit) for credit loss expense4,009 6,724 (570)1,404 (3)11,564 \n\nEnding Balance$10,234 $35,255 $10,893 $1,230 $59 $57,671 \n\nDecember 31, 2024\n\nAllowance for credit losses:\n\nBeginning balance$6,667 $31,581 $11,700 $1,557 $79 $51,584 \n\nCharge-offs(293)(249)0 (2,598)0 (3,140)\n\nRecoveries40 7 135 452 0 634 \n\nProvision (credit) for credit loss expense1,270 4,498 (490)2,157 (17)7,418 \n\nEnding Balance$7,684 $35,837 $11,345 $1,568 $62 $56,496 \n\nThe following table presents the amortized cost basis of collateral dependent loans, which are individually evaluated to determine expected credit losses, and the related allowance for credit losses allocated to these loans as of December 31, 2025 and 2024:\n\n(In thousands)Real EstateBusiness AssetsOtherTotalACL Allocation\n\nDecember 31, 2025\n\nCommercial and Industrial$482 $4,565 $0 $5,047 $250 \n\nCommercial Real Estate21,052 0 0 21,052 1,178 \n\nTotal Loans and Leases$21,534 $4,565 $0 $26,099 $1,428 \n\nDecember 31, 2024\n\nCommercial and Industrial$610 $0 $0 $610 $0 \n\nCommercial Real Estate31,051 0 0 31,051 1,712 \n\nTotal Loans and Leases$31,661 $0 $0 $31,661 $1,712 \n\nLoan Modifications to Borrowers Experiencing Financial Difficulty\n\nThe Company from time to time modifies loans to borrowers experiencing financial difficulty. The modifications may include interest rate reductions, principal or interest forgiveness, forbearances, term extensions, and other actions intended to minimize economic loss and to avoid foreclosure or repossession of collateral.\n\n86\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nThe following tables show the amortized cost basis at December 31, 2025 and 2024 of the loans modified to borrowers experiencing financial difficulty, disaggregated by class of financing receivable and type of concession granted:\n\n(In thousands)Term ExtensionInterest Rate ReductionPayment Delay and Term ExtensionTerm Extension and Interest Rate ReductionPayment DelayTotal% of Total Class of Loans and Leases\n\nDecember 31, 2025\n\nCommercial and Industrial\n\nCommercial and industrial other$101 $410 $0 $262 $0 $773 0.08 %\n\nSubtotal commercial and industrial101 410 0 262 0 773 0.07 %\n\nCommercial Real Estate\n\nCommercial real estate other0 2,856 0 0 382 3,238 0.11 %\n\nSubtotal commercial real estate0 2,856 0 0 382 3,238 0.09 %\n\nResidential\n\nHome equity0 0 0 50 0 50 0.02 %\n\nMortgages0 0 0 109 953 1,062 0.08 %\n\nSubtotal residential0 0 0 159 953 1,112 0.07 %\n\nConsumer\n\nConsumer and other23 0 0 0 0 23 0.03 %\n\nSubtotal consumer23 0 0 0 0 23 0.03 %\n\nTotal loans and leases$124 $3,266 $0 $421 $1,335 $5,146 0.08 %\n\n(In thousands)Term ExtensionInterest Rate ReductionPayment Delay and Term ExtensionTerm Extension and Interest Rate ReductionPayment DelayTotal% of Total Class of Loans and Leases\n\nDecember 31, 2024\n\nCommercial and Industrial\n\nCommercial and industrial other$10 $463 $0 $110 $45 $628 0.07 %\n\nSubtotal commercial and industrial10 463 0 110 45 628 0.07 %\n\nCommercial Real Estate\n\nCommercial real estate other0 2,990 0 0 394 3,384 0.12 %\n\nSubtotal commercial real estate0 2,990 0 0 394 3,384 0.10 %\n\nResidential\n\nHome equity0 0 0 40 0 40 0.02 %\n\nMortgages0 0 0 112 548 660 0.05 %\n\nSubtotal residential0 0 0 152 548 700 0.04 %\n\nConsumer\n\nConsumer and other22 0 0 0 0 22 0.02 %\n\nSubtotal consumer22 0 0 0 0 22 0.02 %\n\nTotal loans and leases$32 $3,453 $0 $262 $987 $4,734 0.08 %\n\n87\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nThe following tables show the aging analysis of loan modifications made to borrowers experiencing financial difficulty as of December 31, 2025 and 2024:\n\nPayment Status (Amortized Cost Basis)\n\n(In thousands)Current30-59 Days Past Due60-89 Days Past Due90+ Days Past DueNon-AccrualTotal\n\nDecember 31, 2025\n\nCommercial and Industrial\n\nCommercial and industrial other$474 $262 $0 $0 $37 $773 \n\nSubtotal commercial and industrial474 262 0 0 37 773 \n\nCommercial Real Estate\n\nCommercial real estate other3,238 0 0 0 0 3,238 \n\nSubtotal commercial real estate3,238 0 0 0 0 3,238 \n\nResidential Real Estate\n\nHome equity50 0 0 0 0 50 \n\nMortgages260 0 0 0 802 1,062 \n\nSubtotal residential real estate310 0 0 0 802 1,112 \n\nConsumer and Other\n\nConsumer and other23 0 0 0 0 23 \n\nSubtotal consumer and other23 0 0 0 0 23 \n\nTotal$4,045 $262 $0 $0 $839 $5,146 \n\nPayment Status (Amortized Cost Basis)\n\n(In thousands)Current30-59 Days Past Due60-89 Days Past Due90+ Days Past DueNon-AccrualTotal\n\nDecember 31, 2024\n\nCommercial and Industrial\n\nCommercial and industrial other$618 $0 $0 $0 $10 $628 \n\nSubtotal commercial and industrial618 0 0 0 10 628 \n\nCommercial Real Estate\n\nCommercial real estate other3,384 0 0 0 0 3,384 \n\nSubtotal commercial real estate3,384 0 0 0 0 3,384 \n\nResidential Real Estate\n\nHome equity0 0 0 0 40 40 \n\nMortgages154 0 112 0 394 660 \n\nSubtotal residential real estate154 0 112 0 434 700 \n\nConsumer and Other\n\nConsumer and other0 0 0 0 22 22 \n\nSubtotal consumer and other0 0 0 0 22 22 \n\nTotal$4,156 $0 $112 $0 $466 $4,734 \n\n88\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nThe following tables present credit quality indicators by total loans on an amortized cost basis by origination year, and current year gross writeoffs as of December 31, 2025 and 2024:\n\nDecember 31, 2025\n\n(In thousands)20252024202320222021PriorRevolving Loans Amortized Cost BasisRevolving Loans Converted to TermTotal Loans\n\nCommercial and Industrial - Other:\n\nInternal risk grade:\n\nPass$178,999 $111,528 $81,883 $73,977 $37,104 $126,706 $316,314 $8,606 $935,117 \n\nSpecial Mention9,871 9,447 90 1,154 178 1,468 21,037 0 43,245 \n\nSubstandard0 423 1,433 0 390 192 5,032 341 7,811 \n\nTotal Commercial and Industrial - Other$188,870 $121,398 $83,406 $75,131 $37,672 $128,366 $342,383 $8,947 $986,173 \n\nCurrent-period gross writeoffs$526 $597 $85 $66 $254 $13 $0 $0 $1,541 \n\nCommercial and Industrial - Agriculture:\n\nPass$11,890 $9,337 $24,659 $7,539 $1,418 $3,852 $55,263 $470 $114,428 \n\nSpecial Mention0 0 0 0 22 25 0 0 47 \n\nSubstandard0 0 0 0 0 0 0 0 0 \n\nTotal Commercial and Industrial - Agriculture$11,890 $9,337 $24,659 $7,539 $1,440 $3,877 $55,263 $470 $114,475 \n\nCurrent-period gross writeoffs$0 $0 $0 $0 $0 $0 $0 $0 $0 \n\nCommercial Real Estate\n\nPass$409,529 $320,178 $256,566 $310,051 $374,436 $1,204,064 $19,291 $19,216 $2,913,331 \n\nSpecial Mention6,500 305 927 1,961 1,362 45,932 0 0 56,987 \n\nSubstandard0 399 927 1,149 1,461 3,804 784 0 8,524 \n\nTotal Commercial Real Estate$416,029 $320,882 $258,420 313,161 377,259 1,253,800 $20,075 $19,216 $2,978,842 \n\nCurrent-period gross writeoffs$0 $0 $0 $0 $2,000 $5,310 $0 $0 $7,310 \n\nCommercial Real Estate - Agriculture:\n\nPass$26,485 $23,114 $11,133 $41,082 $20,087 $103,609 $4,488 $4,026 $234,024 \n\nSpecial Mention0 0 0 0 0 141 0 0 141 \n\nSubstandard0 0 0 0 0 127 0 0 127 \n\nTotal Commercial Real Estate - Agriculture$26,485 $23,114 $11,133 $41,082 $20,087 $103,877 $4,488 $4,026 $234,292 \n\nCurrent-period gross writeoffs$0 $0 $0 $0 $0 $0 $0 $0 $0 \n\nCommercial Real Estate - Construction\n\nPass$0 $13,222 $30,274 $1,542 $15,688 $349 $344,568 $25,659 $431,302 \n\nSpecial Mention0 0 0 0 0 0 297 0 297 \n\nSubstandard0 0 0 0 0 0 17,302 0 17,302 \n\nTotal Commercial Real Estate - Construction$0 $13,222 $30,274 $1,542 $15,688 $349 $362,167 $25,659 $448,901 \n\nCurrent-period gross writeoffs$0 $0 $0 $0 $0 $0 $0 $0 $0 \n\n89\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\n(In thousands)20252024202320222021PriorRevolving Loans Amortized Cost BasisRevolving Loans Converted to TermTotal Loans\n\nResidential - Home Equity\n\nPerforming$1,613 $767 $1,448 $1,309 $795 $17,309 $200,118 $1,671 $225,030 \n\nNonperforming0 0 0 0 0 1,382 1,242 0 2,624 \n\nTotal Residential - Home Equity$1,613 $767 $1,448 $1,309 $795 $18,691 $201,360 $1,671 $227,654 \n\nCurrent-period gross writeoffs$0 $0 $0 $0 $0 $0 $0 $0 $0 \n\nResidential - Mortgages\n\nPerforming$113,023 $104,677 $120,785 $160,682 $220,793 $629,641 $0 $0 $1,349,601 \n\nNonperforming103 294 878 982 1,037 10,637 0 0 13,931 \n\nTotal Residential - Mortgages$113,126 $104,971 $121,663 $161,664 $221,830 $640,278 $0 $0 $1,363,532 \n\nCurrent-period gross writeoffs$0 $0 $0 $0 $0 $0 $0 $0 $0 \n\nConsumer - Direct\n\nPerforming$34,987 $11,109 $11,207 $7,430 $6,887 $12,427 $2,282 $0 $86,329 \n\nNonperforming0 0 2 21 0 40 7 0 70 \n\nTotal Consumer - Direct$34,987 $11,109 $11,209 $7,451 $6,887 $12,467 $2,289 $0 $86,399 \n\nCurrent-period gross writeoffs$2,220 $15 $17 $17 $20 $55 $0 $0 $2,344 \n\nConsumer - Indirect\n\nPerforming$0 $0 $0 $0 $17 $51 $0 $0 $68 \n\nNonperforming0 0 0 0 0 0 0 0 0 \n\nTotal Consumer - Indirect$0 $0 $0 $0 $17 $51 $0 $0 $68 \n\nCurrent-period gross writeoffs$0 $0 $0 $0 $0 $15 $0 $0 $15 \n\n90\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nDecember 31, 2024\n\n(In thousands)20242023202220212020PriorRevolving Loans Amortized Cost BasisRevolving Loans Converted to TermTotal Loans\n\nCommercial and Industrial - Other:\n\nPass$164,809 $114,591 $60,984 $54,087 $19,311 $144,785 $256,621 $35,968 $851,156 \n\nSpecial Mention334 288 174 808 144 375 157 0 2,280 \n\nSubstandard425 0 41 43 4 608 1,011 0 2,132 \n\nTotal Commercial and Industrial - Other$165,568 $114,879 $61,199 $54,938 $19,459 $145,768 $257,789 $35,968 $855,568 \n\nCurrent-period gross writeoffs$0 $15 $30 $44 $21 $432 $0 $0 $542 \n\nCommercial and Industrial - Agriculture:\n\nPass$15,686 $23,823 $9,893 $2,233 $1,660 $11,304 $42,438 $2,895 $109,932 \n\nSpecial Mention0 0 0 34 0 0 0 0 34 \n\nSubstandard0 0 0 0 41 0 0 0 41 \n\nTotal Commercial and Industrial - Agriculture$15,686 $23,823 $9,893 $2,267 $1,701 $11,304 $42,438 $2,895 $110,007 \n\nCurrent-period gross writeoffs$0 $0 $0 $0 $0 $0 $0 $0 $0 \n\nCommercial Real Estate\n\nPass$331,943 $242,564 $324,510 $355,090 $277,220 $1,088,575 $50,632 $16,958 $2,687,492 \n\nSpecial Mention0 0 1,499 599 15,205 12,637 4,452 0 34,392 \n\nSubstandard731 973 1,474 2,561 1,840 45,856 985 0 54,420 \n\nTotal Commercial Real Estate$332,674 $243,537 $327,483 $358,250 $294,265 $1,147,068 $56,069 $16,958 $2,776,304 \n\nCurrent-period gross writeoffs$0 $0 $0 $0 $0 $0 $0 $0 $0 \n\nCommercial Real Estate - Agriculture:\n\nPass$23,754 $11,594 $37,398 $21,510 $19,853 $96,967 $4,169 $1,950 $217,195 \n\nSpecial Mention0 0 0 0 0 217 0 0 217 \n\nSubstandard0 0 0 0 0 170 0 0 170 \n\nTotal Commercial Real Estate - Agriculture$23,754 $11,594 $37,398 $21,510 $19,853 $97,354 $4,169 $1,950 $217,582 \n\nCurrent-period gross writeoffs$0 $0 $0 $0 $0 $0 $0 $0 $0 \n\nCommercial Real Estate - Construction\n\nPass$13,160 $744 $682 $5,003 $1,986 $802 $293,479 $52,675 $368,531 \n\nSpecial Mention0 0 0 0 0 0 0 0 0 \n\nSubstandard0 0 0 0 0 0 17,400 0 17,400 \n\nTotal Commercial Real Estate - Construction$13,160 $744 $682 $5,003 $1,986 $802 $310,879 $52,675 $385,931 \n\nCurrent-period gross writeoffs$0 $0 $0 $0 $0 $0 $0 $0 $0 \n\n91\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\n(In thousands)20242023202220212020PriorRevolving Loans Amortized Cost BasisRevolving Loans Converted to TermTotal Loans\n\nResidential - Home Equity\n\nPerforming$15,181 $3,106 $2,383 $1,053 $784 $12,993 $163,202 $2,603 $201,305 \n\nNonperforming0 0 0 0 0 594 2,295 0 2,889 \n\nTotal Residential - Home Equity$15,181 $3,106 $2,383 $1,053 $784 $13,587 $165,497 $2,603 $204,194 \n\nCurrent-period gross writeoffs$0 $0 $0 $0 $0 $0 $0 $0 $0 \n\nResidential - Mortgages\n\nPerforming$106,698 $130,463 $172,310 $239,307 $204,310 $500,169 $0 $0 $1,353,257 \n\nNonperforming0 707 612 737 948 10,385 0 0 13,389 \n\nTotal Residential - Mortgages$106,698 $131,170 $172,922 $240,044 $205,258 $510,554 $0 $0 $1,366,646 \n\nCurrent-period gross writeoffs$0 $0 $0 $0 $0 $0 $0 $0 $0 \n\nConsumer - Direct\n\nPerforming$40,812 $18,082 $10,022 $9,109 $3,953 $11,485 $2,575 $0 $96,038 \n\nNonperforming0 4 24 8 4 77 8 0 125 \n\nTotal Consumer - Direct$40,812 $18,086 $10,046 $9,117 $3,957 $11,562 $2,583 $0 $96,163 \n\nCurrent-period gross writeoffs$2,272 $15 $11 $32 $10 $229 $0 $0 $2,569 \n\nConsumer - Indirect\n\nPerforming$0 $0 $0 $52 $23 $141 $0 $0 $216 \n\nNonperforming0 0 0 0 0 13 0 0 13 \n\nTotal Consumer - Indirect$0 $0 $0 $52 $23 $154 $0 $0 $229 \n\nCurrent-period gross writeoffs$0 $0 $0 $0 $0 $29 $0 $0 $29 \n\nNote 6 Goodwill and Other Intangible Assets\n\n(In thousands)BankingInsuranceWealth ManagementTotal\n\nBalance at January 1, 2024$64,524 $19,867 $8,211 $92,602 \n\nAdjustment to goodwill0 0 0 0 \n\nBalance at December 31, 202464,524 19,867 8,211 92,602 \n\nAdjustment to goodwill1\n1 (19,867)0 (19,866)\n\nBalance at December 31, 2025$64,525 $0 $8,211 $72,736 \n\n1 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.\n\nGoodwill 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 Company’s review as of December 31, 2025, there was no impairment of its goodwill or intangible assets.\n\n92\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nOther Intangible Assets\n\nThe following tables provide information regarding the Company's amortizing intangible assets:\n\n(In thousands)Gross Carrying AmountAccumulated AmortizationNet Carrying Amount\n\nDecember 31, 2025\n\nAmortized intangible assets:\n\nCore deposit intangible$0 $0 $0 \n\nCustomer relationships1\n0 0 0 \n\nOther intangibles1\n5,829 4,142 1,687 \n\nTotal intangible assets$5,829 $4,142 $1,687 \n\nDecember 31, 2024\n\nAmortized intangible assets:\n\nCore deposit intangible$18,774 $18,774 $0 \n\nCustomer relationships9,048 8,237 811 \n\nOther intangibles7,220 5,828 1,392 \n\nTotal intangible assets$35,042 $32,839 $2,203 \n\n1 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.\n\nAmortization expense related to intangible assets totaled $292,000 in 2025, $332,000 in 2024 and $334,000 in 2023. Amortization of mortgage servicing rights was $120,000 in 2025, $91,000 in 2024 and $81,000 in 2023.\n\nNote 7 Premises and Equipment\n\nPremises and equipment at December 31 were as follows:\n\n(In thousands)20252024\n\nLand$7,988 $8,062 \n\nPremises and equipment103,269 104,847 \n\nFurniture, fixtures, and equipment89,962 91,146 \n\nAccumulated depreciation and amortization(128,801)(127,428)\n\nTotal$72,418 $76,627 \n\nDepreciation and amortization expenses in 2025, 2024, and 2023 are included in operating expenses as follows:\n\n(In thousands)202520242023\n\nPremises$2,607 $2,713 $2,844 \n\nFurniture, fixtures, and equipment4,018 4,756 5,246 \n\nTotal$6,625 $7,469 $8,090 \n\nThe Company leases land, buildings and equipment under operating lease arrangements. Total gross rental expense amounted to $3.9 million in 2025, $4.1 million in 2024, and $4.7 million in 2023. Most leases include options to renew for periods ranging from 5 to 20 years.\n\nLease components\n\nRight-of-use lease assets totaled $26.2 million and $26.9 million at December 31, 2025 and 2024, respectively and are reported in accrued interest and other assets in the accompanying consolidated statements of condition. The related lease liabilities totaled $27.7 million and $28.5 million at December 31, 2025 and 2024, respectively, and are reported in other liabilities in the accompanying consolidated statements of condition. Lease payments under operating leases that were applied to our operating\n\n93\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nlease liability totaled $2.7 million during 2025 and $2.9 million during 2024. Included in the lease payment figures above for December 31, 2025 and 2024 were lease termination payments totaling $156,000 and $579,000, respectively, which were applied to the lease liability.\n\nThe components of operating lease expense, primarily included in “Net occupancy expense of premises,” in 2025, 2024, and 2023 were as follows:\n\n(In thousands)202520242023\n\nOperating lease cost$3,851 $4,083 $4,741 \n\nVariable lease cost660 687 681 \n\nShort-term lease cost20 9 2 \n\nTotal lease cost$4,531 $4,779 $5,424 \n\nAt December 31, 2025, we did not have any material finance lease assets or liabilities.\n\nOther information related to operating leases for 2025 and 2024 was as follows:\n\n(In thousands)20252024\n\nCash paid for amounts included in the measurement of lease liabilities:\n\nOperating cash flows from operating leases$3,895 $3,863 \n\nWeighted-average remaining lease term on operating leases10.7211.35\n\nWeighted-average discount rates on operating leases3.75 %3.67 %\n\nRight-of-use assets obtained in exchange for lease liabilities1,916 2,341 \n\nThe following table reconciles future undiscounted lease payments due under non-cancelable operating leases (those amounts subject to recognition) to the aggregate operating lessee lease liability as of December 31, 2025:\n\n(In thousands)\n\n2026$3,724 \n\n20273,545 \n\n20283,342 \n\n20293,084 \n\n20303,014 \n\n2031 and subsequent years19,256 \n\nTotal lease payments35,965 \n\nLess: Interest8,253 \n\nPresent value of lease liabilities$27,712 \n\n94\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nNote 8 Deposits\n\nAggregate time deposits of $250,000 or more were $551.9 million at December 31, 2025, and $465.8 million at December 31, 2024. Scheduled maturities of time deposits at December 31, 2025, were as follows:\n\n(In thousands)Less than $250,000$250,000 and overTotal\n\nMaturity\n\nThree months or less$296,319 $189,270 $485,589 \n\nOver three through six months213,862 188,428 402,290 \n\nOver six through twelve months107,146 105,879 213,025 \n\nTotal due in 2026\n$617,327 $483,577 $1,100,904 \n\n202767,349 50,982 118,331 \n\n202850,685 15,840 66,525 \n\n20299,464 1,275 10,739 \n\n20301,028 0 1,028 \n\nThereafter606 260 866 \n\nTotal$746,459 $551,934 $1,298,393 \n\nNote 9 Federal Funds Purchased and Securities Sold Under Agreements to Repurchase\n\nInformation regarding securities sold under agreements to repurchase and Federal funds purchased is detailed in the following table for the years ended December 31:\n\nSecurities Sold Under Agreements to Repurchase\n\n(In thousands)202520242023\n\nTotal outstanding at December 31$45,569 $37,036 $50,996 \n\nMaximum month-end balance74,531 67,506 71,031 \n\nAverage balance during the year41,251 42,739 55,773 \n\nWeighted average rate at December 310.11 %0.10 %0.11 %\n\nAverage interest rate paid during the year0.11 %0.11 %0.10 %\n\nFederal Funds Purchased\n\nTotal outstanding at December 31$50,000 $0 $0 \n\nAverage balance during the year2,109 13 0 \n\nWeighted average rate at December 313.90 %N/AN/A\n\nAverage interest rate paid during the year4.80 %5.99 %0.00 %\n\nSecurities sold under agreements to repurchase (\"repurchase agreements\") are secured borrowings that typically mature within 30 to 90 days, although the Company has, at times, entered into repurchase agreements with the Federal Home Loan Bank (\"FHLB\") with longer maturities. 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 $45.6 million at December 31, 2025. The Company had no outstanding wholesale repurchase agreements at December 31, 2025.\n\nSecurities sold under agreements to repurchase are stated at the amount of cash received in connection with the transaction. The Company may be required to provide additional collateral based on the fair value of the underlying securities.\n\nFederal funds purchased are short-term borrowings that typically mature within one to 90 days. \n\nThe Company, through its subsidiary bank, had available line-of-credit agreements with correspondent banks permitting borrowings to a maximum of approximately $149.0 million at December 31, 2025, and $139.0 million at December 31, 2024. There were $50.0 million and $0 outstanding advances against those lines at December 31, 2025 and December 31, 2024, respectively.\n\n95\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nNote 10 Other Borrowings\n\nThe following table summarizes the Company’s borrowings as of December 31:\n\n(In thousands)20252024\n\nOvernight FHLB advances$395,000 $247,000 \n\nTerm FHLB advances169,446 543,247 \n\nTotal other borrowings$564,446 $790,247 \n\nThrough 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.\n\nAt 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.\n\nIn addition to amounts presented above, availability of $225 million and $200 million, at December 31, 2025 and 2024, respectively, was utilized to collateralize municipal deposits through several standby letters of credit with the Federal Home Loan Bank.\n\nThe Company had no callable FHLB borrowings at December 31, 2025.\n\nThe Company has a $25.0 million line of credit with a bank. As of December 31, 2025 and December 31, 2024, there was no outstanding balance on the line. The line matures in June 2027.\n\nNote 11 Employee Benefit Plans\n\nThe 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.\n\nThe 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.\n\nThe 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 Company’s 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 equal to a percentage of pay based on the participant's age and service with the Company. Expenses related to the discretionary contributions totaled $3.8 million in 2025, $3.9 million in 2024, and $4.2 million in 2023.\n\nAnnually, the Tompkins Board of Directors determines a profit-sharing payout to its employees. A portion is paid out in cash, contributed to a health savings account, or deferred into the Retirement Savings Plan at the direction of the employee. The other portion of the approved amount is paid in Company common stock into the ESOP. Compensation expense related to the profit-sharing payout totaled $3.9 million in 2025, $3.8 million in 2024, and $1.4 million in 2023.\n\nThe Company maintains supplemental executive retirement plans (\"SERPs\") for certain executives. In 2016, certain SERPs were amended and restated to reflect changes resulting from the freezing of the DB Pension Plan, and the Company entered into\n\n96\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nadditional SERP agreements with certain executives. All benefits provided under the SERPs are unfunded and the Company makes payments to plan participants.\n\nThe Company also maintains a post-retirement welfare benefit plan that provides health and death benefits for certain team members. Under this plan, as amended in 2005, the Company contributes toward post-retirement healthcare benefits for employees who commenced employment prior to January 1, 2005. Retirees and employees who were eligible to retire when the health benefit was amended were unaffected. Generally, all other employees were eligible for Health Reimbursement Accounts (\"HRA\") with an initial balance equal to the amount of the Company’s estimated then current liability. Contributions to the plan are limited to an annual contribution of 4% of the total HRA balance. Employees, upon retirement, will be able to utilize their HRA for qualified health costs and deductibles. In 2019, the death benefit was discontinued for new entrants, and only employees who had attained age 50 as of February 1, 2020 are eligible to earn this benefit.\n\nThe Company engages independent, external actuaries to compute the amounts of liabilities and expenses relating to all of its employee benefits plans, subject to the assumptions that the Company selects. The benefit obligation for these plans represents the liability of the Company for current and former employees, and is affected primarily by the following: service cost (benefits attributed to employee service during the period); interest cost (interest on the liability due to the passage of time); actuarial gains/losses (experience during the year different from that assumed and changes in plan assumptions); and benefits paid to participants.\n\nGAAP requires an employer to recognize in its statements of condition as an asset or liability the overfunded or underfunded status of a defined benefit postretirement plan, measured as the difference between the fair value of plan assets and the benefit obligation. For a pension plan, the benefit obligation is the projected benefit obligation; for any other postretirement benefit plan, such as a retiree health care plan, the benefit obligation is the accumulated postretirement benefit obligation. The following table sets forth the changes in the projected benefit obligation for the DB Pension Plan and SERPs and the accumulated post-retirement benefit obligation for the Life and Healthcare Plan, the respective plan assets, and the plans’ funded status and amounts recognized in the Company’s Consolidated Statements of Condition at December 31, 2025 and 2024 (the measurement dates of the plans).\n\nDB Pension PlanLife and Healthcare PlanDB SERP\n\n(In thousands)202520242025202420252024\n\nChange in benefit obligation:\n\nBenefit obligation at beginning of year$65,266 $70,718 $6,905 $7,603 $22,872 $24,961 \n\nService cost0 0 18 25 56 59 \n\nInterest cost3,258 3,188 343 342 1,143 1,130 \n\nPlan participants’ contributions0 0 116 87 0 0 \n\nAmendments(15)0 0 0 0 0 \n\nCurtailments0 0 (96)0 (963)0 \n\nActuarial loss (gain)1,978 (4,288)(176)(815)(68)(2,259)\n\nBenefits paid(4,728)(4,352)(381)(337)(1,117)(1,019)\n\nBenefit obligation at end of year$65,759 $65,266 $6,729 $6,905 $21,923 $22,872 \n\nChange in plan assets:\n\nFair value of plan assets at beginning of year$88,316 $84,644 $0 $0 $0 $0 \n\nActual return on plan assets12,678 8,025 0 0 0 0 \n\nPlan participants’ contributions0 0 116 87 0 0 \n\nEmployer contributions0 0 265 250 1,117 1,019 \n\nBenefits paid(4,728)(4,353)(381)(337)(1,117)(1,019)\n\nFair value of plan assets at end of year$96,266 $88,316 $0 $0 $0 $0 \n\nFunded (unfunded) status$30,507 $23,050 $(6,729)$(6,905)$(21,923)$(22,872)\n\nThe benefit obligation for the DB Pension Plan at December 31, 2025 and 2024, was $65.8 million and $65.3 million, respectively. The accumulated benefit obligation for the Life and Healthcare Plan at December 31, 2025 was $6.7 million compared to $6.9 million at December 31, 2024. The accumulated benefit obligation for the SERPs at December 31, 2025 was $20.7 million and was $20.0 million at December 31, 2024. The funded status of the DB Pension Plan of $30.5 million was\n\n97\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nrecognized in accrued interest and other assets, and the unfunded status of the Life and Healthcare Plan and the SERPs of $6.7 million and $21.9 million, respectively, was recognized in other liabilities in the Consolidated Statements of Condition at December 31, 2025. The funded status of the DB Pension Plan of $23.1 million was recognized in accrued interest and other assets, and the unfunded status of the Life and Healthcare Plan and the SERPs of $6.9 million and $22.9 million, respectively, was recognized in other liabilities in the Consolidated Statements of Condition at December 31, 2024.\n\nThe actuarial (gain) loss shown above totaling a gain of $1.7 million in 2025 and a loss of $7.4 million in 2024 were mainly the result of changes in the discount rates used to measure the benefit obligation of all plans at year end compared to those used at the prior year-end. The specific discount rates for each plan at December 31, 2025 and December 31, 2024 are provided below.\n\nNet periodic benefit cost and other comprehensive income (loss) includes the following components:\n\n(In thousands)DB Pension PlanLife and Healthcare PlanDB SERP\n\nComponents of net periodic benefit cost202520242023202520242023202520242023\n\nService cost$0 $0 $0 $18 $25 $33 $56 $59 $43 \n\nInterest cost3,258 3,188 3,275 343 342 354 1,143 1,130 1,148 \n\nExpected return on plan assets(5,372)(5,147)(4,789)0 0 0 0 0 0 \n\nAmortization of prior service (credit) cost(1)0 0 (17)(42)(61)213 226 278 \n\nRecognized net actuarial loss (gain)672 0 1,156 (270)0 (40)(22)0 0 \n\nRecognized net actuarial gain due to curtailments0 0 0 (99)0 0 (817)0 0 \n\nNet periodic benefit (credit) cost$(1,443)$(1,959)$(358)$(25)$325 $286 $573 $1,415 $1,469 \n\nService cost is included in salaries and wages in the Consolidated Statements of Income. The other components of net periodic benefit cost are included in other operating expense in the Consolidated Statements of Income.\n\nIn connection with the sale of its insurance agency subsidiary in the fourth quarter of 2025, the Company recognized curtailment gains related to the SERPs and its Life and Healthcare Plan of $817,000 and $99,000, respectively.\n\nOther changes in plan assets and benefit obligations recognized in other comprehensive income (loss):\n\n(In thousands)DB Pension PlanLife and Healthcare PlanDB SERP\n\n202520242023202520242023202520242023\n\nNet actuarial gain$(5,328)$(7,166)$(4,048)$(176)$(815)$(153)$(68)$(2,259)$(315)\n\nRecognized actuarial (loss) gain(672)(976)(1,156)270 61 40 22 0 0 \n\nPrior service credit(15)0 0 0 0 0 0 0 0 \n\nRecognized prior service cost (credit)1 0 0 16 43 61 (213)(226)(278)\n\nPrior service cost (credit) recognized due to curtailment0 0 0 4 0 0 (145)0 0 \n\nRecognized in other comprehensive loss$(6,014)$(8,142)$(5,204)$114 $(711)$(52)$(404)$(2,485)$(593)\n\nTotal recognized in net periodic benefit cost and other comprehensive income (loss)$(7,457)$(10,101)$(5,562)$89 $(386)$234 $169 $(1,070)$876 \n\n98\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nPre-tax amounts recognized as a component of accumulated other comprehensive income (loss) as of year-end that have not been recognized as a component of the Company’s combined net periodic benefit cost of the Company’s DB Pension Plan, Life and Healthcare Plan and SERPs are presented in the following table:\n\n(In thousands)DB Pension PlanLife and Healthcare PlanDB SERP\n\n202520242023202520242023202520242023\n\nNet actuarial loss (gain)$19,123 $25,123 $33,265 $(1,681)$(1,775)$(1,022)$(2,018)$(1,972)$287 \n\nPrior service cost (credit)(15)0 0 (42)(62)(104)727 1,085 1,311 \n\nTotal$19,108 $25,123 $33,265 $(1,723)$(1,837)$(1,126)$(1,291)$(887)$1,598 \n\nWeighted-average assumptions used in accounting for the plans were as follows:\n\nDB Pension PlanLife and Healthcare PlanDB SERP\n\n202520242023202520242023202520242023\n\nDiscount Rates\n\nBenefit Cost for Plan Year5.42 %4.75 %4.95 %5.46 %4.79 %4.98 %5.46 %4.78 %4.98 %\n\nBenefit Obligation at End of Plan Year5.28 %5.42 %4.75 %5.35 %5.46 %4.79 %5.32 %5.46 %4.78 %\n\nExpected long-term return on plan assets6.25 %6.25 %6.25 %N/AN/AN/AN/AN/AN/A\n\nRate of compensation increase\n\nBenefit Cost for Plan YearN/AN/AN/A4.00 %4.00 %4.00 %5.00 %5.00 %5.00 %\n\nBenefit Obligation at End of Plan YearN/AN/AN/A4.00 %4.00 %4.00 %5.00 %5.00 %5.00 %\n\nTo develop the expected long-term rate of return on assets assumption for the DB Pension Plan, the Company considered the historical returns and the future expectations for returns for each asset class, as well as target asset allocations of the pension portfolio. Based on this analysis, the Company selected 6.25% as the long-term rate of return on assets assumption.\n\nThe discount rates used to determine the Company’s DB Pension Plan and other post-retirement benefit obligations as of December 31, 2025, and December 31, 2024, were determined by matching estimated benefit cash flows to a yield curve derived from Citigroup’s regular bond yield at December 31, 2025 and December 31, 2024.\n\nBased on the Company’s anticipation of future experience under the DB Pension Plan, the mortality tables used to determine future benefit obligations under the plan were updated as of December 31, 2021 to the PRI-2012 Mortality Tables with Mortality Improvement Scale MP 2021. The Company is using the most recent appropriate study of pension plan experience published by the Society of Actuaries. The appropriateness of the assumptions is reviewed annually.\n\nCash Flows \n\nPlan assets are amounts that have been segregated and restricted to provide benefits, and include amounts contributed by the Company and amounts earned from investing contributions, less benefits paid. The Company funds the cost of the SERPs and the Life and Healthcare Plan benefits on a pay-as-you-go basis.\n\n99\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nThe benefits as of December 31, 2025, expected to be paid in each of the next five fiscal years, and in the aggregate for the five fiscal years thereafter were as follows:\n\n(In thousands)DB Pension PlanLife and Healthcare PlanDB SERP\n\n2026$4,558 $491 $1,100 \n\n20274,567 501 1,077 \n\n20284,611 494 1,052 \n\n20294,801 480 993 \n\n20304,880 459 1,723 \n\n2031-203524,229 2,155 8,953 \n\nTotal$47,646 $4,580 $14,898 \n\nPlan Assets\n\nThe DB Pension Plan’s weighted-average asset allocations at December 31, 2025 and 2024, respectively, by asset category are as follows:\n\n20252024\n\nEquity securities61 %60 %\n\nDebt securities38 %39 %\n\nOther1 %1 %\n\nTotal Allocation100 %100 %\n\nIt is the policy of the Trustees of the Plan to invest the Pension Trust Fund (the \"Fund\") for total return. The Trustees seek the maximum return consistent with the interests of the participants and beneficiaries and prudent investment management. The management of the Fund’s assets is in compliance with the guidelines established in the Company’s Pension Plan and Trust Investment Policy, which is reviewed and approved annually by the Tompkins Board of Directors, and the Retirement Plan Management Committee.\n\nThe intention is for the Fund to be prudently diversified. The Fund’s investments will be invested among the fixed income, equity and cash equivalent sectors. The Retirement Plan Management Committee will designate minimum and maximum positions in any of the sectors. In no case shall more than 10% of the Fund assets consist of qualified securities or real estate of the Company. Unless otherwise approved by the Trustees of the Plan, the following investments are prohibited:\n\n•Restricted stock, private placements, short positions, calls, puts, or margin transactions;\n\n•Commodities, oil and gas properties, real estate properties, or\n\n•Any investment that would constitute a prohibited transaction as described in the Employee Retirement Income Security Act of 1974 (\"ERISA\"), section 407, 29 U.S.C. 1106.\n\nIn general, the investment in debt securities is limited to readily marketable debt securities having a Standard & Poor’s rating of \"A\" or Moody’s rating of \"A\", securities of, or guaranteed by the United States Government or its agencies, or obligations of banks or their holding companies that are rated in the three highest ratings assigned by Fitch Investor Service, Inc. In addition, investments in equity securities must be listed on the NYSE or traded on the national Over-the-Counter market or listed on the NASDAQ. Cash equivalents generally may be United States Treasury obligations, commercial paper having a Standard & Poor’s rating of \"A-1\" or Moody’s National Credit Officer rating of \"P-1\"or higher.\n\nThe major categories of assets in the Company’s DB Pension Plan as of year-end are presented in the following table. Assets are segregated by the level of valuation inputs within the fair value hierarchy established by ASC Topic 820 utilized to measure fair value (see \"Note 19 - Fair Value Measurements\"). \n\n100\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nFair Value Measurements\n\n(In thousands)Fair Value 2025(Level 1)(Level 2)(Level 3)\n\nDecember 31, 2025\n\nCash and cash equivalents$555 $555 $0 $0 \n\nCommon stocks42,824 42,824 0 0 \n\nMutual funds52,887 52,887 0 0 \n\nTotal Fair Value of Plan Assets$96,266 $96,266 $0 $0 \n\nDecember 31, 2024\n\nCash and cash equivalents$966 $966 $0 $0 \n\nCommon stocks34,249 34,249 0 0 \n\nMutual funds53,101 53,101 0 0 \n\nTotal Fair Value of Plan Assets$88,316 $88,316 $0 $0 \n\nThe Company determines the fair value for its pension plan assets using an independent pricing service. The pricing service uses a variety of techniques to determine fair value, including market maker bids, quotes and pricing models. Inputs to the model include recent trades, benchmark interest rates, spreads, and actual and projected cash flows. Based on the inputs used by our independent pricing services, the Company identifies the appropriate level within the fair value hierarchy to report these fair values. U.S. Treasury securities, common stocks and mutual funds are considered Level 1 based on quoted prices in active markets.\n\nLife insurance benefits are provided to certain officers of the Company. In connection with these policies, the Company reflected life insurance assets on its Consolidated Statements of Condition of $77.8 million at December 31, 2025, and $76.4 million at December 31, 2024. The insurance is carried at its cash surrender value on the Consolidated Statements of Condition. The Company purchased $6.3 million of insurance in 2024. In the fourth quarter of 2023, the Company surrendered certain separate account BOLI policies. Increases in the cash surrender value of the insurance are reflected as noninterest income, net of any related mortality expense.\n\nThe Company provides split dollar life insurance benefits to certain employees. The plan is unfunded and the estimated liability of the plan is recorded in other liabilities in the Consolidated Statements of Condition at $1.8 million as of December 31, 2025 and $1.7 million as of December 31, 2024. Compensation expense related to the split dollar life insurance was approximately $37,000 in 2025 and $177,000 in 2024.\n\nNote 12 Stock Plans and Stock-Based Compensation\n\nIn 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.\n\nStock options and SARs are granted at an exercise price equal to the stock’s 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 vesting schedule with zero percent vesting in year one and 25% vesting in years two through five. For performance share awards, there is a 3-year performance period in the fiscal years immediately following the grant date, at which time the performance goal is measured. If the goal is achieved, the value of the award either vests and is immediately payable, or is subject to additional time-based vesting, depending on the terms of the particular executive’s award agreement.\n\nThe Company granted 87,584 equity awards to its employees in 2025, consisting of 61,575 shares of restricted stock, 22,380 performance stock units and 3,629 restricted stock units. The Company granted 84,019 equity awards to its employees in 2024, consisting of 57,060 shares of restricted stock, 19,929 performance share units and 7,030 restricted stock units.\n\n101\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nThe following table presents the activity related to stock options and SARs under the Company's 2009 Equity Plan and 2019 Equity Plan for the year ended December 31, 2025:\n\nNumber of Shares/RightsWeighted Average Exercise PriceWeighted Average Remaining Contractual TermAggregate Intrinsic Value\n\nOutstanding at January 1, 202520,021 $66.51 \n\nGranted0 0.00 \n\nExercised(10,189)56.29 \n\nForfeited(1,604)76.90 \n\nOutstanding at December 31, 20258,228 $77.15 0.83$0 \n\nExercisable at December 31, 20258,228 $77.15 0.83$0 \n\nTotal stock-based compensation expense for stock options and SARs was $0 in 2025, 2024, and 2023. As of December 31, 2025, unrecognized compensation cost related to unvested stock options and SARs totaled $0. As of 12/31/2025, all outstanding SARs were \"out of the money\" based on that day's ending share price of $72.52. Net cash proceeds, tax benefits and intrinsic value related to total stock options, SARs, and restricted stock exercised is as follows: \n\n(In thousands)202520242023\n\nProceeds from stock option exercises$(33)$(115)$(124)\n\nTax benefits related to stock option exercises(69)(134)(229)\n\nIntrinsic value of stock option exercises81 132 270 \n\nThe Company uses the Black-Scholes option-valuation model to determine the fair value of incentive stock options and SARs at the date of grant. The valuation model estimates fair value based on the assumptions for the risk-free rate, expected dividend yield, volatility and expected life. The risk-free rate is the interest rate available on zero-coupon U.S. Treasury instruments with a remaining term equal to the expected term of the share option at the time of grant. The expected dividend yield is based on the dividend trends and the market price of the Company’s stock price at grant. Volatility is largely based on historical volatility of the Company’s stock price. The expected term is based upon historical experience of employee exercises and terminations as the vesting term of the grants. The fair values of the grants are expensed over the vesting periods. There were no incentive stock options or SARs granted in 2025, 2024 or 2023.\n\nDecember 31, 2025\n\nOptions and SARs OutstandingOptions and SARs Exercisable\n\nRange of Exercise PricesNumber OutstandingWeighted Average Remaining Contractual LifeWeighted Average Exercise PriceNumber ExercisableWeighted Average Exercise Price\n\n$50.01-76.90\n8,006 0.83$76.90 8,006 $76.90 \n\n$76.91-86.18\n222 0.8386.18 222 86.18 \n\n8,228 0.83$77.15 8,228 $77.15 \n\n102\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nThe following table presents activity related to restricted stock awards and restricted stock units for the year ended December 31, 2025:\n\nNumber of SharesWeighted Average Grant Date Fair Value\n\nRestricted Stock & Performance Awards\n\nUnvested at January 1, 2025251,220 $60.32 \n\nGranted83,955 67.79 \n\nVested(42,329)60.10 \n\nForfeited(51,401)59.43 \n\nUnvested at December 31, 2025241,445 $60.80 \n\nRestricted Stock Units\n\nUnvested at January 1, 202530,377 $67.83 \n\nGranted3,629 67.59 \n\nVested(7,227)66.68 \n\nForfeited(6,571)67.42 \n\nUnvested at December 31, 202520,208 $72.52 \n\nThe Company granted 61,575 restricted stock awards, 3,629 restricted stock units, and 22,380 performance units in 2025, each at an average grant date fair value of $67.79 and an additional 144 restricted share units at $62.80. The Company granted 57,060 restricted stock awards, 7,030 restricted stock units, and 19,929 performance units in 2024, each at an average grant date fair value of $72.29. The Company granted 79,140 restricted stock awards, 12,630 restricted stock units, 28,346 performance units and 0 performance share awards in 2023 at an average grant date fair value of $51.02. The grant date fair values were the closing prices of the Company’s common stock on the grant dates. Restricted stock awards and performance units are settled in stock, and restricted stock units are settled in cash. The Company recognized stock-based compensation related to restricted stock awards, restricted stock units, and performance share awards of $3.5 million in 2025, $4.6 million in 2024, and $4.4 million in 2023. Unrecognized compensation costs related to restricted stock and performance awards totaled $9.0 million, and restricted stock units totaled $0.9 million at December 31, 2025 and will be recognized over 3.5 years on a weighted average basis.\n\n103\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nNote 13 Other Noninterest Income and Expense\n\nOther income and operating expense totals are presented in the table below. Components of these totals exceeding 1%, and other significant items, of the aggregate of total interest income and other income for any of the years presented below are stated separately. \n\nYear ended December 31,\n\n(In thousands)202520242023\n\nNONINTEREST INCOME\n\nOther service charges$2,790 $2,753 $2,625 \n\nIncrease in cash surrender value of corporate owned life insurance2,415 2,768 1,727 \n\nNet gain on sale of loans2,161 1,001 96 \n\nGain on sale of OREO1,959 0 0 \n\nOther miscellaneous income3,550 3,539 2,063 \n\nTotal other noninterest income$12,875 $10,061 $6,511 \n\nNONINTEREST EXPENSES\n\nMarketing expense$4,980 $4,075 $5,264 \n\nProfessional fees9,443 6,514 7,535 \n\nTechnology expense14,219 14,686 15,939 \n\nCardholder expense4,286 4,053 4,238 \n\nFDIC insurance5,778 5,696 4,298 \n\nLegal expense1,666 1,185 1,709 \n\nOther miscellaneous expenses13,586 14,990 17,331 \n\nTotal other noninterest expenses$53,958 $51,199 $56,314 \n\nNote 14 Revenue Recognition\n\nThe 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 Company’s 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.\n\nInsurance Commissions and Fees\n\nInsurance 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.\n\nTrust & Asset Management\n\nTrust and asset management income is primarily comprised of fees earned from the management and administration of trusts and other customer assets. The Company’s performance obligation is generally satisfied over time and the resulting fees are recognized monthly, based upon the month-end fair value of the assets under management and the applicable fee rate. Payment is generally received a few days after month end through a direct charge to customers’ accounts. The Company does not earn performance-based incentives. Optional tax return preparation services are also available to existing trust and asset management customers. The Company’s performance obligation for these transactional-based services is generally satisfied, and related revenue recognized, at a point in time (i.e., as incurred). Payment is received shortly after services are rendered.\n\nMutual Fund & Investment Income\n\nMutual fund and investment income consists of other recurring revenue streams such as commissions from sales of mutual funds and other investments, and investment advisory fees from the Company’s Strategic Asset Management Services wealth management product. Commissions from the sale of mutual funds and other investments are recognized on the trade date, which is when the Company has satisfied its performance obligation. The Company also receives periodic service fees (i.e., trailers) from mutual fund companies typically based on a percentage of net asset value, recorded over time, usually monthly or quarterly, as net asset value is determined. Investment advisor fees from the wealth management product are earned over time\n\n104\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nand based on an annual percentage rate of the net asset value. The investment advisor fees are charged to the customer’s account in advance on the first month of the quarter, and the revenue is recognized over the following three-month period. The Company engaged a third party, LPL Financial, LLC (LPL), through April 2025, to satisfy part of this performance obligation, and therefore this income is reported net of any corresponding expenses paid to LPL.\n\nService Charges on Deposit Accounts\n\nService charges on deposit accounts consist of account analysis fees (i.e., net fees earned on analyzed business and public checking accounts), monthly service fees, check orders, and other deposit account related fees. The Company’s performance obligation for account analysis fees and monthly service fees is generally satisfied, and the related revenue recognized, over the period in which the service is provided. Check orders and other deposit account related fees are largely transactional based, and therefore, the Company’s performance obligation is satisfied and related revenue recognized, at a point in time. Payment for service charges on deposit accounts is primarily received immediately or in the following month through a direct charge to customers’ accounts.\n\nCard Services Income\n\nFees, exchange, and other service charges are primarily comprised of debit and credit card income, ATM fees, merchant services income, and other service charges. Debit and credit card income is primarily comprised of interchange fees earned whenever the Company’s debit and credit cards are processed through card payment networks such as MasterCard. ATM fees are primarily generated when a Company cardholder uses a non-Company ATM or a non-Company cardholder uses a Company ATM. Merchant services income mainly represents fees charged to merchants to process their debit and credit card transactions, in addition to account management fees. The Company’s performance obligation for fees and exchange are largely satisfied, and related revenue recognized, when the services are rendered or upon completion. Payment is typically received immediately or in the following month.\n\nOther\n\nOther service charges include revenue from processing wire and ACH transfers, lock box service and safe deposit box rental. Payment on these revenue streams is received primarily through a direct charge to the customer’s account, immediately or in the following month, and therefore, the Company’s performance obligation is satisfied, and related revenue recognized, at a point in time.\n\nThe 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:\n\nYear ended December 31,\n\n(In thousands)202520242023\n\nNoninterest Income\n\nIn-scope of Topic 606:\n\nInsurance Revenues$35,569 $39,100 $37,351 \n\nInvestment Service Income20,115 19,589 17,951 \n\nService Charges on Deposit Accounts7,258 7,288 6,913 \n\nCard Services Income11,502 12,057 11,488 \n\nOther1,298 1,296 1,324 \n\nNoninterest Income (in-scope of ASC 606)75,742 79,330 75,027 \n\nNoninterest Income (out-of-scope of ASC 606)121,129 8,797 (64,786)\n\nTotal Noninterest Income$196,871 $88,127 $10,241 \n\nContract Balances\n\nA contract asset balance occurs when an entity performs a service for a customer before the customer pays consideration or before payment is due, which would result in contract receivables or assets, respectively. A contract liability balance is an entity’s obligation to transfer a service to a customer for which the entity has already received payment or for which payment is due from the customer. The Company’s noninterest revenue streams, excluding some insurance commissions and fees, are largely based on transactional activity, or standard month-end revenue accruals such as asset management fees based on month-end market values. Receivables primarily consist of amounts due for insurance and wealth management services performed for which the Company's performance obligations have been fully satisfied. Consideration is often received immediately or shortly after the Company satisfies its performance obligation and revenue is recognized. The Company does not typically enter into long-term revenue contracts with customers, and therefore, does not experience significant contract balances.\n\n105\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nContract Acquisition Costs\n\nIn connection with the adoption of ASC 606, an entity is required to capitalize, and subsequently amortize into expense, certain incremental costs of obtaining a contract with a customer if these costs are expected to be recovered. The incremental costs of obtaining a contract are those costs that an entity incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained (for example, sales commission). The Company utilizes the practical expedient which allows entities to immediately expense contract acquisition costs when the asset that would have resulted from capitalizing these costs would have been amortized in one year or less. Upon adoption of ASC 606, the Company did not capitalize any contract acquisition costs.\n\nNote 15 Income Taxes\n\nThe income tax expense (benefit) attributable to income from operations is summarized as follows:\n\n(In thousands)CurrentDeferredTotal\n\n2025\n\nFederal$46,904 $(970)$45,934 \n\nState18,236 (385)17,851 \n\nTotal$65,140 $(1,355)$63,785 \n\n2024\n\nFederal$20,248 $(3,313)$16,935 \n\nState4,837 231 5,068 \n\nTotal$25,085 $(3,082)$22,003 \n\n2023\n\nFederal$2,583 $381 $2,964 \n\nState346 (815)(469)\n\nTotal$2,929 $(434)$2,495 \n\n106\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nThe 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:\n\n202520242023\n\n(In thousands) Amount  % of pretax income  Amount  % of pretax income  Amount  % of pretax income\n\n Federal income tax at statutory rate $47,220 21.0 %$19,499 21.0 %$2,520 21.0 %\n\n State and local income taxes, net of federal benefit1, 2, 3\n14,102 6.3 %4,004 4.3 %(371)(3.1)%\n\nTax credits\n\n Low income housing tax credits (252)(0.1)%(224)(0.2)%(99)(0.8)%\n\nNontaxable or nondeductible items\n\nTax exempt income, net(1,005)(0.4)%(1,219)(1.3)%(1,131)(9.4)%\n\nEquity-based compensation4\n(140)(0.1)%(74)(0.1)%132 1.1 %\n\nBank-owned life insurance income(500)(0.2)%(579)(0.6)%(361)(3.0)%\n\nSection 162(m) limitation212 0.1 %113 0.1 %127 1.1 %\n\nNon-deductible meals & entertainment155 0.1 %100 0.1 %152 1.3 %\n\nAdditional tax gain on sale of subsidiary3,137 1.4 %0 0.0 %0 0.0 %\n\nProportional amortization expense241 0.1 %252 0.3 %170 1.4 %\n\nOther55 0.0 %114 0.1 %80 0.7 %\n\nOther adjustments\n\nSurrender of bank-owned life insurance0 0.0 %0 0.0 %1,628 13.6 %\n\nDeductible ESOP dividends under Section 404(k)(288)(0.1)%(310)(0.3)%(305)(2.5)%\n\nAll other848 0.3 %327 0.3 %(47)(0.6)%\n\nEffective tax rate$63,785 28.4 %$22,003 23.7 %$2,495 20.8 %\n\n1 State taxes in New York made up the majority (greater than 50 percent) of the tax effect in this category for the December 31, 2025 period.\n\n2 State taxes in New York made up the majority (greater than 50 percent) of the tax effect in this category for the December 31, 2024 period.\n\n3 State tax benefit in New York and state tax expense in Pennsylvania made up the majority (greater than 50 percent) of the tax effect in this category for the December 31, 2023 period.\n\n4 Equity-based compensation includes any excess benefits or shortfalls from vestings and exercises.\n\n107\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nDeferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities as of December 31 were as follows:\n\n(In thousands)20252024\n\nDeferred tax assets:\n\nAllowance for credit losses$14,787 $14,733 \n\nLease liability6,933 7,119\n\nInterest income on nonperforming loans684 870 \n\nCompensation and benefits12,600 12,936 \n\nPurchase accounting adjustments454 323 \n\nLiabilities held at fair value83 78 \n\nDeferred loan fees and costs1,206 1,290 \n\nNet operating loss carryforwards0 0 \n\nOther502 753 \n\nTotal$37,249 $38,102 \n\nDeferred tax liabilities:\n\nPrepaid pension12,387 12,019 \n\nRight of use asset6,584 6,763\n\nDepreciation2,926 3,068 \n\nIntangibles157 1,675 \n\nLeases1,866 2,199 \n\nTaxable bank-owned life insurance policies0 0 \n\nContingent Commissions0 871 \n\nOther1,803 1,336 \n\nTotal deferred tax liabilities$25,723 $27,931 \n\nNet deferred tax asset at year-end11,526 10,171 \n\nNet deferred tax asset at beginning of year10,171 7,200 \n\nIncrease in net deferred tax asset1,355 2,971 \n\nInvestments in tax credit structures accounting standard adoption recorded through equity0 111 \n\nDeferred tax benefit$(1,355)$(3,082)\n\nNet operating loss carryforwards for New York and New York City purposes of $8.5 million and $344,000, respectively, were generated in 2023. These net operating losses were fully utilized in 2024.\n\nThe above analysis does not include recorded deferred tax assets (liabilities) of $2.3 million and $33.9 million as of December 31, 2025 and 2024, respectively, related to net unrealized holdings losses/(gains) in the available-for-sale debt securities portfolio. In addition, the analysis excludes recorded deferred tax assets of $4.0 million and $5.6 million, as of December 31, 2025 and 2024, respectively, related to employee benefit plans.\n\nRealization of deferred tax assets is dependent upon the generation of future taxable income or the existence of sufficient taxable income. A valuation allowance is provided when it is more likely than not that some portion of the deferred tax assets will not be realized. In assessing the need for a valuation allowance, management considers the scheduled reversal of the deferred tax liabilities, the level of historical taxable income, and the projected future taxable income over the periods in which the temporary differences comprising the deferred tax assets will be deductible. Based on its assessment, management determined that no valuation allowance was necessary at December 31, 2025 and 2024.\n\n108\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nCash paid (net of refunds) during the year for taxes was as follows:\n\n (In thousands) 202520242023\n\n Federal $20,850 $12,384 $8,000 \n\n State and local\n\n New York 5,594 2,093 1,604 \n\n All other state and local jurisdictions 920 349 777 \n\n Total $27,364 $14,826 $10,381 \n\nAt December 31, 2025 and December 31, 2024, the Company had no ASC 740-10 unrecognized tax benefits. The Company recognizes interest and penalties on unrecognized tax benefits in income tax expense in its Consolidated Statements of Income.\n\nThe Company is subject to U.S. federal income tax and income tax in New York and various state jurisdictions. All tax years ending after December 31, 2021 are open to examination by the taxing authorities.\n\nNote 16 Other Comprehensive Income (Loss)\n\nThe tax effect allocated to each component of other comprehensive income (loss) was as follows:\n\nDecember 31, 2025Before-Tax\nAmountTax (Expense)\nBenefitNet of Tax\n\n(In thousands)\n\nAvailable-for-sale debt securities:\n\nChange in net unrealized gain (loss) during the period$47,559 $(11,890)$35,669 \n\nReclassification adjustment for net realized gain (loss) on sale of available-for-sale debt securities included in net income78,721 (19,680)59,041 \n\nNet unrealized gains/losses126,280 (31,570)94,710 \n\nEmployee benefit plans:\n\nNet retirement plan gain (loss)5,572 (1,393)4,179 \n\nAmortization of net retirement plan actuarial gain (loss)380 (95)285 \n\nAmortization of net retirement plan prior service cost352 (88)264 \n\nEmployee benefit plans6,304 (1,576)4,728 \n\nOther comprehensive income$132,584 $(33,146)$99,438 \n\nDecember 31, 2024Before-Tax\nAmountTax (Expense)\nBenefitNet of Tax\n\n(In thousands)\n\nAvailable-for-sale debt securities:\n\nChange in net unrealized gain (loss) during the period$(3,709)$1,588 $(2,121)\n\nReclassification adjustment for net realized gain (loss) on sale of available-for-sale debt securities included in net income(50)12 (38)\n\nNet unrealized losses(3,759)1,600 (2,159)\n\nEmployee benefit plans:\n\nNet retirement plan gain (loss)10,240 (2,408)7,832 \n\nAmortization of net retirement plan actuarial gain (loss)915 (215)700 \n\nAmortization of net retirement plan prior service cost182 (42)140 \n\nEmployee benefit plans11,337 (2,665)8,672 \n\nOther comprehensive income$7,578 $(1,065)$6,513 \n\n109\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nDecember 31, 2023Before-Tax AmountTax (Expense) BenefitNet of Tax\n\n(In thousands)\n\nAvailable-for-sale debt securities:\n\nChange in net unrealized gain (loss) during the period$35,008 $(8,578)$26,430 \n\nReclassification adjustment for net realized gain (loss) on sale of available-for-sale debt securities included in net income69,984 (17,146)52,838 \n\nNet unrealized gain (loss)104,992 (25,724)79,268 \n\nEmployee benefit plans:\n\nNet retirement plan gain (loss)4,516 (1,106)3,410 \n\nAmortization of net retirement plan actuarial gain (loss)1,116 (273)843 \n\nAmortization of net retirement plan prior service cost217 (54)163 \n\nEmployee benefit plans5,849 (1,433)$4,416 \n\nOther comprehensive income$110,841 $(27,157)$83,684 \n\nThe following table presents the activity in our accumulated other comprehensive (loss) income for the periods indicated:\n\n(In thousands)Available-for-\nSale Debt SecuritiesEmployee\nBenefit PlansAccumulated\nOther\nComprehensive\n(Loss) Income\n\nBalance at January 1, 2023$(178,803)$(29,886)$(208,689)\n\nOther comprehensive income (loss)79,268 4,416 83,684 \n\nBalance at December 31, 2023$(99,535)$(25,470)$(125,005)\n\nBalance at January 1, 2024(99,535)(25,470)(125,005)\n\nOther comprehensive income (loss)(2,159)8,672 6,513 \n\nBalance at December 31, 2024$(101,694)$(16,798)$(118,492)\n\nBalance at January 1, 2025(101,694)(16,798)(118,492)\n\nOther comprehensive income (loss)94,710 4,728 99,438 \n\nBalance at December 31, 2025$(6,984)$(12,070)$(19,054)\n\n110\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nDecember 31, 2025\n\nDetails about Accumulated other Comprehensive Income (Loss) Components (In thousands)\nAmount Reclassified from Accumulated Other Comprehensive (Loss)1\nAffected Line Item in the\nStatement Where Net Income is\nPresented\n\nAvailable-for-sale debt securities:\n\nUnrealized gain (loss) on available-for-sale debt securities$(78,721)Net loss on securities transactions\n\n19,680 Income tax expense\n\n(59,041)Net of tax\n\nEmployee benefit plans:\n\nAmortization of the following2\n\nNet retirement plan actuarial gain (loss)(380)Other operating expense\n\nNet retirement plan prior service cost(352)Other operating expense\n\n(732)Total before tax\n\n183 Income tax expense\n\n$(549)Net of tax\n\nDecember 31, 2024\n\nDetails about Accumulated other Comprehensive Income (Loss) Components (In thousands)\nAmount Reclassified from Accumulated Other Comprehensive (Loss)1\nAffected Line Item in the\nStatement Where Net Income is\nPresented\n\nAvailable-for-sale debt securities:\n\nUnrealized gain (loss) on available-for-sale debt securities$50 Net loss on securities transactions\n\n(12)Income tax expense\n\n38 Net of tax\n\nEmployee benefit plans:\n\nAmortization of the following2\n\nNet retirement plan actuarial gain (loss)(915)Other operating expense\n\nNet retirement plan prior service cost(182)Other operating expense\n\n(1,097)Total before tax\n\n257 Income tax expense\n\n$(840)Net of tax\n\n1 Amounts in parentheses indicate debits in income statement.\n\n2 The accumulated other comprehensive income (loss) components are included in the computation of net periodic benefit cost (See \"Note 11 - Employee Benefit Plans\").\n\nNote 17 Commitments and Contingent Liabilities\n\nThe 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 Company’s 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.\n\n111\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nThe Company’s 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:\n\n(In thousands)20252024\n\nLoan commitments$238,042 $152,255 \n\nStandby letters of credit36,480 38,525 \n\nUndisbursed portion of lines of credit1,117,162 1,134,554 \n\nTotal$1,391,684 $1,325,334 \n\nCommitments 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 business. The standby letters of credit are generally short-term. As of December 31, 2025, the Company’s maximum potential obligation under standby letters of credit was $36.5 million. Management uses the same credit policies in making commitments to extend credit and standby letters of credit as are used for on-balance-sheet lending decisions. Based upon management’s evaluation of the counterparty, the Company may require collateral to support commitments to extend credit and standby letters of credit. The credit risk amounts are equal to the contractual amounts, assuming the amounts are fully advanced and collateral or other security is of no value. The Company does not anticipate losses as a result of these transactions. These commitments also have off-balance-sheet interest-rate risk, in that the interest rate at which these commitments were made may not be at market rates on the date the commitments are fulfilled. Since some commitments and standby letters of credit are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash flow requirements.\n\nThe Company may also have rate lock agreements associated with mortgage loans to be sold in the secondary market (certain of which relate to loan applications for which no formal commitment has been made). In order to limit the interest rate risk associated with rate lock agreements, as well as the interest rate risk associated with mortgages held for sale, if any, the Company enters into agreements to sell loans in the secondary market to unrelated investors on a loan-by-loan basis. At December 31, 2025, the Company had approximately $7.0 million of commitments to sell mortgages to unrelated investors on a loan-by-loan basis.\n\nIn the normal course of business, the Company is involved in various legal proceedings, investigations, and administrative proceedings. Civil litigation may range from individual actions involving a single plaintiff to putative class action lawsuits with potentially thousands of class members. Investigations may involve both formal and informal proceedings, by both government agencies and self-regulatory bodies. Based on information presently known to us, we do not believe there is any matter to which we are a party, or involving any of our properties, that individually or in the aggregate, would reasonably be expected to have a material adverse effect on our financial statements.\n\n112\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nNote 18 Earnings Per Share\n\nCalculation of basic earnings per share (Basic EPS) and diluted earnings per share (Diluted EPS) is shown below.\n\nYear ended December 31,\n\n(In thousands, except share and per share data)202520242023\n\nBasic\n\nNet income available to common shareholders$161,071 $70,850 $9,505 \n\nLess: income attributable to unvested stock-based compensation awards0 0 (42)\n\nNet earnings allocated to common shareholders161,071 70,850 9,463 \n\nWeighted average shares outstanding, including unvested stock-based compensation awards14,433,382 14,404,233 14,442,077 \n\nLess: unvested stock-based compensation awards(180,572)(186,127)(187,416)\n\nWeighted average shares outstanding - Basic14,252,810 14,218,106 14,254,661 \n\nDiluted\n\nNet earnings allocated to common shareholders$161,071 $70,850 $9,463 \n\nWeighted average shares outstanding - Basic14,252,810 14,218,106 14,254,661 \n\nPlus: incremental shares from assumed conversion of stock-based compensation awards82,548 50,337 46,560 \n\nWeighted average shares outstanding - Diluted14,335,358 14,268,443 14,301,221 \n\nBasic EPS$11.30 $4.98 $0.66 \n\nDiluted EPS$11.24 $4.97 $0.66 \n\nStock-based compensation awards representing 5,770, 8,476, and 39,266 common shares for 2025, 2024, and 2023, respectively, were not included in the computations of diluted earnings per common share because the effect on those periods would have been antidilutive.\n\nNote 19 Fair Value Measurements\n\nFASB 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).\n\nThe three levels of the fair value hierarchy are:\n\nLevel 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;\n\nLevel 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;\n\nLevel 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).\n\n113\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nThe 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:\n\nRecurring Fair Value Measurements\n\n(In thousands)Fair Value (Level 1)(Level 2)(Level 3)\n\nDecember 31, 2025\n\nAssets\n\nAvailable-for-sale debt securities\n\nU.S. Treasuries$53,780 $0 $53,780 $0 \n\nObligations of U.S. Government sponsored entities348,403 0 348,403 0 \n\nObligations of U.S. states and political subdivisions76,310 0 76,310 0 \n\nMortgage-backed securities – residential, issued by:\n\nU.S. Government agencies313,496 0 313,496 0 \n\nU.S. Government sponsored entities587,632 0 587,632 0 \n\nU.S. corporate debt securities2,447 0 2,447 0 \n\nTotal Available-for-sale debt securities$1,382,068 $0 $1,382,068 $0 \n\nEquity securities, at fair value800 0 0 800 \n\nDerivatives designated as hedging instruments33 0 33 0 \n\nDerivatives not designated as hedging instruments5,032 0 5,032 0 \n\nLiabilities\n\nDerivatives not designated as hedging instruments$5,389 $0 $5,389 $0 \n\nDecember 31, 2024\n\nAssets\n\nAvailable-for-sale debt securities\n\nU.S. Treasuries$71,497 $0 $71,497 $0 \n\nObligations of U.S. Government sponsored entities380,280 0 380,280 0 \n\nObligations of U.S. states and political subdivisions77,694 0 77,694 0 \n\nMortgage-backed securities – residential, issued by:\n\nU.S. Government agencies63,254 0 63,254 0 \n\nU.S. Government sponsored entities636,360 0 636,360 0 \n\nU.S. corporate debt securities2,447 0 2,447 0 \n\nTotal Available-for-sale debt securities$1,231,532 $0 $1,231,532 $0 \n\nEquity securities, at fair value768 0 0 768 \n\nDerivatives designated as hedging instruments864 0 864 0 \n\nDerivatives not designated as hedging instruments1,831 0 1,831 0 \n\nLiabilities\n\nDerivatives not designated as hedging instruments$2,073 $0 $2,073 $0 \n\nThe change in the fair value of the $800,000 of equity securities valued using significant unobservable inputs (level 3), between January 1, 2025 and December 31, 2025 was immaterial.\n\nSecurities: Fair values for U.S. Treasury securities are based on quoted market prices. Fair values for obligations of U.S. government sponsored entities, mortgage-backed securities-residential, obligations of U.S. states and political subdivisions, and U.S. corporate debt securities are based on quoted market prices, where available, as provided by third party pricing vendors. If quoted market prices are not available, fair values are based on quoted market prices of comparable instruments in active markets and/or based upon matrix pricing methodology, which uses comprehensive interest rate tables to determine market price, movement and yield relationships. These securities are reviewed periodically to determine if there are any events or changes in circumstances that would adversely affect their value.\n\n114\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nThe Company determines fair value for its available-for-sale debt securities using an independent bond pricing service for identical assets or very similar securities. The pricing service uses a variety of techniques to determine fair value, including market maker bids, quotes and pricing models. Inputs to the model include recent trades, benchmark interest rates, spreads, and actual and projected cash flows. The Company reviews the prices supplied by the independent pricing service, as well as their underlying pricing methodologies, for reasonableness and to ensure such prices are aligned with traditional pricing matrices. In general, the Company’s investment portfolio consists of traditional investments, nearly all of which are U.S. Treasury obligations, federal agency bullet or mortgage pass-through securities, or general obligation municipal bonds. Pricing for such instruments is fairly generic and is easily obtained. Quarterly, the Company will validate prices supplied by the independent pricing service by comparing to prices obtained from a second third-party source. Based on the inputs used by our independent pricing services, the Company identifies the appropriate level within the fair value hierarchy to report these fair values.\n\nDerivatives: The Company has contracted with a third party vendor to provide periodic valuations for its interest rate derivatives to determine the fair value of its interest rate contracts. The vendor utilizes standard valuation methodologies applicable to interest rate derivatives such as discounted cash flow analysis. Such valuations are based upon readily observable market data and are therefore considered Level 2 valuations by the Company.\n\nCertain assets are measured at fair value on a nonrecurring basis, that is, they are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances. For the Company, these include loans held for sale, collateral dependent individually evaluated loans, other real estate owned, goodwill and other intangible assets. During 2025, certain collateral dependent individually evaluated loans and other real estate owned at December 31, 2025, were adjusted down to fair value. Collateral values are estimated using Level 3 inputs based upon observable market data. Real estate is generally valued using independent appraisals or other indications of value based on recent comparable sales of similar properties or assumptions generally available in the market.\n\nThe below table provides certain assets measured at fair value on a nonrecurring basis at December 31, 2025:\n\nFair value measurements at reporting\ndate using:\n\n(In thousands)Quoted prices in active markets for identical assetsSignificant other observable inputsSignificant unobservable inputsGain (losses)\nfrom fair\nvalue changes\n\nAssets:(Level 1)(Level 2)(Level 3)\n\nDecember 31, 2025\n\nIndividually evaluated loans$25,394 $0 $0 $25,394 $(7,673)\n\nOther real estate owned229 0 0 229 1,954 \n\nDecember 31, 2024\n\nIndividually evaluated loans$7,471 $0 $0 $7,471 $249 \n\nOther real estate owned14,314 0 0 14,314 43 \n\nThe following table presents the carrying amounts and estimated fair values of the Company’s financial instruments at December 31, 2025 and 2024. The carrying amounts shown in the table are included in the Consolidated Statements of Condition under the indicated captions. The fair value estimates, methods and assumptions set forth below for the Company’s financial instruments, including those financial instruments carried at cost, are made solely to comply with disclosures required by GAAP and does not always incorporate the exit-price concept of fair value prescribed by ASC Topic 820-10 and should be read in conjunction with the financial statements and notes included in this Report.\n\n115\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nEstimated Fair Value of Financial Instruments\n\n(In thousands)Carrying\nAmountFair Value(Level 1)(Level 2)(Level 3)\n\nDecember 31, 2025\n\nFinancial Assets:\n\nCash and cash equivalents$132,817 $132,817 $132,817 $0 $0 \n\nSecurities - held-to-maturity312,528 283,860 0 283,860 0 \n\nFHLB stock and other stock32,307 32,307 0 32,307 0 \n\nAccrued interest receivable30,697 30,697 0 30,697 0 \n\nLoans/leases, net1\n6,432,014 6,129,089 0 0 6,129,089 \n\nFinancial Liabilities:\n\nTime deposits$1,298,393 $1,296,714 $0 $1,296,714 $0 \n\nOther deposits5,639,369 5,639,369 0 5,639,369 0 \n\nFed funds purchased and securities sold\n\nunder agreements to repurchase95,569 95,569 0 95,569 0 \n\nOther borrowings564,446 565,568 0 565,568 0 \n\nAccrued interest payable4,920 4,920 0 4,920 0 \n\nDecember 31, 2024\n\nFinancial Assets:\n\nCash and cash equivalents$134,398 $134,398 $134,398 $0 $0 \n\nSecurities - held-to-maturity312,462 267,295 0 267,295 0 \n\nFHLB stock and other stock42,255 42,255 0 42,255 0 \n\nAccrued interest receivable28,823 28,823 0 28,823 0 \n\nLoans/leases, net1\n5,963,426 5,584,661 0 0 5,584,661 \n\nFinancial Liabilities:\n\nTime deposits$1,068,375 $1,064,548 $0 $1,064,548 $0 \n\nOther deposits5,403,430 5,403,430 0 5,403,430 0 \n\nFed funds purchased and securities sold\n\nunder agreements to repurchase37,036 37,036 0 37,036 0 \n\nOther borrowings790,247 789,915 0 789,915 0 \n\nAccrued interest payable4,854 4,854 0 4,854 0 \n\n1 Lease receivables, although excluded from the scope of ASC Topic 825, are included in the estimated fair value amounts at their carrying value.\n\nThe following methods and assumptions were used in estimating fair value disclosures for financial instruments:\n\nCash and Cash Equivalents: The carrying amounts reported in the Consolidated Statements of Condition for cash, noninterest-bearing deposits, money market funds, and Federal funds sold approximate the fair value of those assets.\n\nSecurities - Held-to-Maturity: Fair values for U.S. Treasury securities are based on quoted market prices. Fair values for obligations of U.S. government sponsored entities, and mortgage-backed securities-residential are based on quoted market prices, where available, as provided by third party pricing vendors. If quoted market prices were not available, fair values are based on quoted market prices of comparable instruments in active markets and/or based upon a matrix pricing methodology, which uses comprehensive interest rate tables to determine market price, movement and yield relationships. These securities are reviewed periodically to determine if there are any events or changes in circumstances that would adversely affect their value.\n\nFHLB Stock and Other Stock: The carrying amount of FHLB stock approximates fair value. If the stock is redeemed, the Company will receive an amount equal to the par value of the stock. For miscellaneous equity securities, carrying value is cost.\n\n116\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nLoans and Leases: Fair value for loans is calculated using an exit price notion. The Company's valuation methodology takes into account factors such as estimated cash flows, including contractual cash flow and assumptions for prepayments; liquidity risk; and credit risk. The fair values of residential loans were estimated using discounted cash flow analyses, based upon available market benchmarks for rates and prepayment assumptions. The fair values of commercial and consumer loans were estimated using discounted cash flow analyses, based upon interest rates currently offered for loans and leases with similar terms and credit quality. The fair values of loans held for sale were determined based upon contractual prices for loans with similar characteristics.\n\nAccrued Interest Receivable and Accrued Interest Payable: The carrying amount of these short-term instruments approximates fair value.\n\nDeposits: The fair values disclosed for noninterest bearing accounts and accounts with no stated maturities are equal to the amount payable on demand at the reporting date. The fair value of time deposits is based upon discounted cash flow analyses using rates offered for FHLB advances, which is the Company’s primary alternative source of funds.\n\nFed Funds Purchased and Securities Sold Under Agreements to Repurchase: The carrying amount of these instruments approximates fair value because the instruments have short-term maturities.\n\nOther borrowings: The fair value of other borrowings is based upon discounted cash flow analyses using current rates offered for FHLB advances, with similar terms.\n\nNote 20 Regulations and Supervision\n\nCapital Requirements:\n\nThe Company and its subsidiary bank are subject to various regulatory capital requirements administered by federal bank regulatory agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material adverse effect on the Company’s business, results of operation and financial condition. Under capital adequacy guidelines and the regulatory framework for prompt corrective action (PCA), banks must meet specific guidelines that involve quantitative measures of assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. Capital amounts and classifications of the Company and its subsidiary bank are also subject to qualitative judgments by regulators concerning components, risk weightings, and other factors. Quantitative measures established by regulation to ensure capital adequacy require the maintenance of minimum amounts and ratios (set forth in the table below) of common equity Tier I capital, total capital and Tier 1 capital to risk-weighted assets (as defined in the regulation), and of Tier 1 capital to average assets (as defined in the regulation). Management believes that the Company and its subsidiary bank meet all capital adequacy requirements to which they are subject.\n\nAs of December 31, 2025, the most recent notifications from Federal bank regulatory agencies categorized the Company's subsidiary bank as \"well capitalized\" under the regulatory framework for PCA. To be categorized as well capitalized, the Company and its subsidiary bank must maintain total risk-based, Tier 1 risk-based, common equity Tier 1 capital and Tier 1 leverage ratios as set forth in the table below. There are no conditions or events since that notification that management believes have changed the capital category of the Company or its subsidiary bank.\n\nIn the first quarter of 2020, U.S. Federal regulatory authorities issued an interim final rule that provided banking organizations that adopt CECL during the 2020 calendar year with the option to delay for two years the estimated impact of CECL on regulatory capital relative to regulatory capital determined under the prior incurred loss methodology, followed by a three-year transition period to phase out the aggregate amount of the capital benefit provided during the initial two-year delay (i.e., a five-year transition in total). In connection with our adoption of CECL on January 1, 2020, we elected to utilize the five-year CECL transition.\n\nThe following table presents actual and required capital ratios as of December 31, 2025 and December 31, 2024 for Tompkins and its banking subsidiary. The minimum capital amounts required under Basel III include the capital conservation buffer of 2.5%, which must be added to each of the minimum required risk-based capital ratios (Total capital to risk-weighted assets, Common equity Tier 1 capital to risk-weighted assets and Tier 1 capital to risk weighted assets). Capital levels required to be considered well capitalized are based upon prompt corrective action regulations, as amended to reflect the changes under the Basel III Capital Rules.\n\n117\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nActual capital amounts and ratios of the Company and its subsidiary bank are as follows:\n\nActualMinimum Capital Required- Basel III Fully-Phased-InRequired to be Considered Well Capitalized\n\n(dollar amounts in thousands)Amount/RatioAmount/RatioAmount/Ratio\n\nDecember 31, 2025\n\nTotal Capital (to risk-weighted assets)\n\nThe Company (consolidated)\n$943,769 /14.6%\n\n$680,588/>10.5%\n\n$648,179/>10.0%\n\nTompkins Community Bank\n$805,222/12.4%\n\n$682,452/>10.5%\n\n$649,954/> 10.0%\n\nCommon Equity Tier 1 Capital (to risk-weighted assets)\n\nThe Company (consolidated)\n$884,665/13.6%\n\n$453,725/>7.0%\n\n$421,316/>6.5%\n\nTompkins Community Bank\n$746,118/11.5%\n\n$454,968/>7.0%\n\n$422,470/>6.5%\n\nTier 1 Capital (to risk-weighted assets)\n\nThe Company (consolidated)\n$884,665/13.6%\n\n$550,952/>8.5%\n\n$518,543/>8.0%\n\nTompkins Community Bank\n$746,118/11.5%\n\n$552,461/>8.5%\n\n$519,964/>8.0%\n\nTier 1 Capital (to average assets)\n\nThe Company (consolidated)\n$884,665/10.6%\n\n$333,205/>4.0%\n\n$416,507/>5.0%\n\nTompkins Community Bank\n$746,118/8.9%\n\n$334,481/>4.0%\n\n$418,102/>5.0%\n\nDecember 31, 2024\n\nTotal Capital (to risk-weighted assets)\n\nThe Company (consolidated)\n$796,226 /13.1%\n\n$639,844/>10.5%\n\n$609,375/>10.0%\n\nTompkins Community Bank\n$754,991/12.4%\n\n$638,719/>10.5%\n\n$608,304/>10.0%\n\nCommon Equity Tier 1 Capital (to risk-weighted assets)\n\nThe Company (consolidated)\n$738,266/12.1%\n\n$426,563/>7.0%\n\n$396,094/>6.5%\n\nTompkins Community Bank\n$697,031/11.5%\n\n$425,813/>7.0%\n\n$395,398/>6.5%\n\nTier 1 Capital (to risk-weighted assets)\n\nThe Company (consolidated)\n$738,266/12.1%\n\n$517,969/>8.5%\n\n$487,500/>8.0%\n\nTompkins Community Bank\n$697,031/11.5%\n\n$517,058/>8.5%\n\n$486,643/>8.0%\n\nTier 1 Capital (to average assets)\n\nThe Company (consolidated)\n$738,266/9.3%\n\n$318,498/>4.0%\n\n$398,123/>5.0%\n\nTompkins Community Bank\n$697,031/8.8%\n\n$317,914/>4.0%\n\n$397,393/>5.0%\n\nNote 21 Condensed Parent Company Only Financial Statements\n\nCondensed financial statements for Tompkins (the Parent Company) are presented below. \n\nCondensed Statements of ConditionAs of As of\n\n(In thousands)12/31/202512/31/2024\n\nAssets\n\nCash$195,928 $23,866 \n\nInvestment in subsidiaries798,581 689,485 \n\nOther5,872 1,272 \n\nTotal Assets$1,000,381 $714,623 \n\nLiabilities and Shareholders’ Equity\n\nOther liabilities62,003 1,179 \n\nTompkins Financial Corporation Shareholders’ Equity938,378 713,444 \n\nTotal Liabilities and Shareholders’ Equity$1,000,381 $714,623 \n\n118\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nCondensed Statements of IncomeYear ended December 31,\n\n(In thousands)202520242023\n\nDividends received from subsidiaries$46,886 $51,473 $42,634 \n\nOther income188,414 305 297 \n\nTotal Operating Income$235,300 $51,778 $42,931 \n\nOther expenses16,615 12,929 13,117 \n\nTotal Operating Expenses$16,615 $12,929 $13,117 \n\nIncome Before Taxes and Equity in Undistributed\n\nEarnings of Subsidiaries218,685 38,849 29,814 \n\nIncome tax (expense) benefit(51,135)3,170 3,223 \n\nEquity in undistributed earnings of subsidiaries(6,479)28,831 (23,532)\n\nNet Income$161,071 $70,850 $9,505 \n\nCondensed Statements of Cash FlowsYear ended December 31,\n\n(In thousands)202520242023\n\nOperating activities\n\nNet income$161,071$70,850$9,505\n\nAdjustments to reconcile net income to net cash provided by operating activities\n\nEquity in undistributed earnings of subsidiaries6,479 (28,831)23,532 \n\nGain on sale of TIA(188,241)0 0 \n\nTransaction costs related to the sale of TIA(11,586)0 0 \n\nOther, net72,342 7,644 (7,350)\n\nNet Cash Provided by Operating Activities40,065 49,663 25,687 \n\nInvesting activities\n\nPayments for investments in and advances to subsidiaries(50,000)0 0 \n\n Proceeds from business divestitures220,665 0 0 \n\nOther, net0 (271)1,015 \n\nNet Cash (Used in) Provided by Investing Activities170,665 (271)1,015 \n\nFinancing activities\n\nCash dividends(36,092)(35,049)(34,512)\n\nRepurchase of common shares(1,650)0 (8,726)\n\nNet proceeds from restricted stock awards(1,012)(1,242)(1,173)\n\nShares issued for employee and other stock ownership plans119 170 0 \n\nNet proceeds from exercise of stock options(33)(115)(124)\n\nNet Cash Used in Financing Activities(38,668)(36,236)(44,535)\n\nNet increase (decrease) in cash172,062 13,156 (17,833)\n\nCash at beginning of year23,866 10,710 28,543 \n\nCash at End of Year$195,928 $23,866 $10,710 \n\nA Statement of Changes in Shareholders’ Equity has not been presented since it is the same as the Consolidated Statement of Changes in Shareholders’ Equity previously presented for the consolidated Company.\n\nNote 22 Segment and Related Information\n\nThe 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 Company’s wealth management services are managed separately from the Banking segment.\n\n119\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nOn 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.\n\nBanking\n\nTompkins 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.\n\nBanking 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 subsidiary bank provides a variety of retail banking services including checking accounts, savings accounts, time deposits, IRA products, residential mortgage loans, personal loans, home equity loans, credit cards, debit cards and safe deposit services delivered through its branch facilities, ATMs, voice response, mobile banking, Internet banking and remote deposit services. The Company’s subsidiary bank also provides a variety of commercial banking services such as lending activities for a variety of business purposes, including real estate financing, construction, equipment financing, accounts receivable financing and commercial leasing. Other commercial services include deposit and cash management services, letters of credit, sweep accounts, credit cards, Internet-based account services, mobile banking and remote deposit services. The banking subsidiary does not engage in sub-prime lending.\n\nInsurance\n\nUntil October 31, 2025, the Company provided property and casualty insurance services and employee benefits consulting through Tompkins Insurance Agencies, Inc., a 100% wholly-owned subsidiary of the Company, which was headquartered in Batavia, New York.\n\nWealth Management\n\nThe wealth management segment is generally organized under the Tompkins Financial Advisors brand. Tompkins Financial Advisors offers a comprehensive suite of financial services to customers, including trust and estate services, investment management and financial and insurance planning for individuals, corporate executives, small business owners and high net worth individuals. Tompkins Financial Advisors has offices in each of the Company’s regional markets.\n\nChief Operating Decision Maker\n\nOur Chief Executive Officer (\"CEO\") is our chief operating decision maker. In order to allocate costs, capital and resources to each operating segment, we (i) identify the cost or opportunity value of funds within each business segment, (ii) measure the profitability of a particular business segment by relating appropriate costs to revenues, (iii) evaluate each business segment in a manner consistent with its economic impact on consolidated earnings, and (iv) enhance asset and liability pricing decisions. Our CEO reviews actual net income versus budgeted net income on a monthly basis to assess segment performance and to make decisions about allocating capital and personnel among the segments.\n\nSummarized 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 and financial 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 \"Note 1 - Summary of Significant Accounting Policies\" in this Report.\n\nThe Banking segment also includes the operating results of the parent holding company, which have historically been immaterial. As mentioned above, Tompkins Financial Corporation sold all of the issued and outstanding shares of capital stock of TIA to Gallagher during the fourth quarter of 2025. The gross purchase price was $223.0 million. In connection with the sale, the Company recognized a gain on sale of $188.2 million subject to certain post-closing adjustments during the 120-day post-closing settlement period ending on February 28, 2026, which amount was included in noninterest income. In addition, the Company recognized $4.3 million of noninterest expenses related to the sale. The net after-tax impact was approximately $129.0 million. Since Tompkins Financial Corporation was the sole owner of TIA, the transaction was recorded on the parent's books, and therefore the sale is reflected in the below table for 2025 within the Banking segment.\n\n120\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\n As of and for the year ended December 31, 2025\n\n(In thousands)BankingInsuranceWealth\nManagementIntercompanyConsolidated\n\nInterest income$382,074 $2 $0 $(2)$382,074 \n\nInterest expense132,345 0 0 (2)132,343 \n\nNet interest income249,729 2 0 0 249,731 \n\nProvision for credit loss expense11,534 0 0 0 11,534 \n\nNoninterest income141,196 36,294 21,433 (2,052)196,871 \n\nNoninterest expense170,191 25,255 16,818 (2,052)210,212 \n\nIncome before income tax expense209,200 11,041 4,615 0 224,856 \n\nIncome tax expense59,689 2,953 1,143 0 63,785 \n\nNet Income attributable to Tompkins Financial Corporation$149,511 $8,088 $3,472 $0 $161,071 \n\nDepreciation and amortization$8,019 $131 $175 $0 $8,325 \n\nAssets8,639,330 0 28,938 0 8,668,268 \n\nGoodwill64,525 0 8,211 0 72,736 \n\nOther intangibles, net1,687 0 0 0 1,687 \n\nNet loans and leases6,388,574 0 0 0 6,388,574 \n\nDeposits6,937,969 0 0 (207)6,937,762 \n\nTotal equity912,908 0 25,469 0 938,377 \n\n As of and for the year ended December 31, 2024\n\n(In thousands)BankingInsuranceWealth\nManagementIntercompanyConsolidated\n\nInterest income$347,574 $5 $0 $(5)$347,574 \n\nInterest expense136,477 0 0 (5)136,472 \n\nNet interest income211,097 5 0 0 211,102 \n\nProvision for credit loss expense6,611 0 0 0 6,611 \n\nNoninterest income29,991 39,762 20,488 (2,114)88,127 \n\nNoninterest expense157,320 28,983 15,453 (2,114)199,642 \n\nIncome before income tax expense77,157 10,784 5,035 0 92,976 \n\nIncome tax expense17,807 2,943 1,253 0 22,003 \n\nNet Income attributable to noncontrolling interests and Tompkins Financial Corporation59,350 7,841 3,782 0 70,973 \n\nLess: Net income attributable to noncontrolling interests123 0 0 0 123 \n\nNet Income attributable to Tompkins Financial Corporation$59,227 $7,841 $3,782 $0 $70,850 \n\nDepreciation and amortization$9,816 $159 $168 $0 $10,143 \n\nAssets8,048,149 47,059 29,367 (15,495)8,109,080 \n\nGoodwill64,524 19,867 8,211 0 92,602 \n\nOther intangibles, net1,166 1,015 22 0 2,203 \n\nNet loans and leases5,963,426 0 0 0 5,963,426 \n\nDeposits6,495,526 0 0 (23,721)6,471,805 \n\nTotal equity637,414 38,534 37,496 0 713,444 \n\n121\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\n As of and for the year ended December 31, 2023\n\n(In thousands)BankingInsuranceWealth ManagementIntercompanyConsolidated\n\nInterest income$297,358 $5 $0 $(5)$297,358 \n\nInterest expense87,849 0 0 (5)87,844 \n\nNet interest income209,509 5 0 0 209,514 \n\nProvision for credit loss expense4,339 0 0 0 4,339 \n\nNoninterest income(43,667)37,868 18,262 (2,222)10,241 \n\nNoninterest expense162,312 28,770 14,432 (2,222)203,292 \n\nIncome before income tax expense(809)9,103 3,830 0 12,124 \n\nIncome tax expense(1,007)2,548 954 0 2,495 \n\nNet Income attributable to noncontrolling interests and Tompkins Financial Corporation198 6,555 2,876 0 9,629 \n\nLess: Net income attributable to noncontrolling interests124 0 0 0 124 \n\nNet Income attributable to Tompkins Financial Corporation$74 $6,555 $2,876 $0 $9,505 \n\nDepreciation and amortization$11,047 $176 $176 $0 $11,399 \n\nAssets7,760,160 44,143 29,089 (13,643)7,819,749 \n\nGoodwill64,524 19,867 8,211 0 92,602 \n\nOther intangibles, net956 1,336 35 0 2,327 \n\nNet loans and leases5,554,351 0 0 0 5,554,351 \n\nDeposits6,419,872 0 0 (20,025)6,399,847 \n\nTotal equity601,59836,17632,1600669,934\n\nNote 23 Derivatives and Hedging Activities\n\nRisk Management Objective of Using Derivatives\n\nThe Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company also enters into interest rate derivatives to accommodate the business requirements of certain qualifying customers. All derivatives are recognized as other assets or other liabilities on the Company's Consolidated Statements of Condition at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative and resulting designation.\n\nDerivatives Designated as Hedging Instruments\n\nFair Value Hedges of Interest Rate Risk\n\nThe Company is exposed to changes in the fair value of certain of its fixed-rate assets due to changes in benchmark interest rates. The Company uses interest rate swaps to manage its exposure to changes in fair value on these instruments attributable to changes in the designated benchmark interest rate. Interest rate swaps designated as fair value hedges involve the payment of fixed-rate amounts to a counterparty in exchange for the Company receiving variable-rate payments over the life of the agreements without the exchange of the underlying notional amount. As of December 31, 2025, the Company had interest rate swaps with a total notional amount of $50.0 million hedging fixed-rate residential mortgage loans.\n\nFor derivatives designated and that qualify as fair value hedges, the gain or loss on the derivative as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in interest income.\n\n122\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nAs of December 31, 2025 and December 31, 2024, the following amounts were recorded on the Consolidated Statements of Condition related to cumulative basis adjustment for fair value hedges.\n\nLine Item in the Statement of Financial Position in Which the Hedged Item is IncludedCarrying Amount of the Hedged Assets/(Liabilities)Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets/(Liabilities) Carrying Amount of the Hedged Assets/(Liabilities)Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets/(Liabilities)\n\nDecember 31, 2025December 31, 2024\n\nFixed Rate Loans1\n$49,962$(38)$149,175$(825)\n\nTotal$49,962$(38)$149,175$(825)\n\n1 These amounts include the amortized cost basis of closed portfolios of fixed rate loans used to designate hedging relationships in which the hedged item is the stated amount of assets in the closed portfolio anticipated to be outstanding for the designated hedged period. At December 31, 2025 and December 31, 2024, the amortized cost basis of the closed portfolios used in these hedging relationships was $658.5 million and $711.0 million respectively; the cumulative basis adjustments associated with these hedging relationships was $38,000 and $0.8 million, respectively; and the amount of the designated hedged items was $100.0 million for both periods.\n\nDerivatives Not Designated as Hedging Instruments\n\nThe Company enters into interest rate swaps to help commercial loan borrowers manage their interest rate risk. These interest rate swap contracts allow borrowers to convert variable-rate loan payments to fixed-rate loan payments. When the Company enters into an interest rate derivative contract with a commercial loan borrower, it simultaneously enters into a “mirror” interest rate contract with a third party. For interest rate swaps, the third party exchanges the client’s fixed-rate loan payments for variable-rate loan payments. The Company's credit policies with respect to interest rate contracts with commercial borrowers are similar to those used for loans. The Company retains the risk that is associated with the potential failure of counterparties and the risk inherent in originating loans. The interest rate contracts with counterparties are generally subject to bilateral collateralization terms. These derivatives are not designated as hedges and therefore, changes in fair value are recognized in earnings.\n\nThe Company has entered into risk participation agreements with other banks in commercial loan arrangements. Participating banks guarantee the performance on borrower-related interest rate swap contracts. These derivatives are not designated as hedges and therefore, changes in fair value are recognized in earnings.\n\nUnder a risk participation-out agreement, a derivative asset, the Company participates out a portion of the credit risk associated with the interest rate swap position executed with the commercial borrower for a fee paid to the participating bank. Under a risk participation-in agreement, a derivative liability, the Company assumes, or participates in, a portion of the credit risk associated with the interest rate swap position with the commercial borrower for a fee received from the other bank.\n\nTabular Disclosure of Fair Values of Derivative Instruments on the Consolidated Statements of Condition\n\nThe tables below present the fair value of the Company’s derivative financial instruments as well as their classification on the consolidated statements of condition as of December 31, 2025 and December 31, 2024. Amounts below are presented on a net basis in accordance with applicable accounting guidance.\n\n123\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nDecember 31, 2025December 31, 2024\n\n(In thousands)Notional AmountFair ValueNotional AmountFair Value\n\nDerivative Assets\n\nDerivatives designated as hedging instruments\n\nInterest Rate Products$50,000 $33 $150,000 $864 \n\nTotal derivatives designated as hedging instruments$33$864\n\nDerivatives not designated as hedging instruments\n\nInterest Rate Products$249,273$5,032$175,865$1,831\n\nTotal derivatives not designated as hedging instruments$5,032$1,831\n\n Derivative Liabilities\n\nDerivatives not designated as hedging instruments\n\nInterest Rate Products$249,273 $5,312 $178,646 $1,990 \n\nRisk Participation Agreement64,282 77 44,387 83 \n\nTotal derivatives not designated as hedging instruments $5,389$2,073\n\nTabular Disclosure of the Effect of Fair Value and Cash Flow Hedge Accounting on the Consolidated Statements of Income\n\nThe table below presents the effect of the Company’s derivative financial instruments on the consolidated statements of income for the years ended December 31, 2025, 2024, and 2023:\n\nThe Effect of Fair Value and Cash Flow Hedge Accounting on the Consolidated Statements of Income\n\nLocation of Gain or (Loss) Recognized in Income on Derivative\n\n202520242023\n\n(In thousands)Interest Income\n\nTotal amounts of income and expense line items presented in the statement of financial performance in which the effects of fair value or cash flow hedges are recorded$869 $2,423 $1,650 \n\nThe effects of fair value and cash flow hedging:\n\nGain or (loss) on fair value hedging relationships in Subtopic 815-20\n\nHedged items787 542 (1,367)\n\nDerivatives designated as hedging instruments82 1,882 3,017 \n\nTabular Disclosure of the Effect of Derivatives Not Designated as Hedging Instruments on the Income Statement\n\nThe table below presents the effect of the Company’s derivative financial instruments that are not designated as hedging instruments on the consolidated statements of income for the years ended December 31, 2025, 2024, and 2023:\n\nEffect of Derivatives Not Designated as Hedging Instruments on the Consolidated Statements of Income\n\nDerivatives Not Designated as Hedging Instruments under Subtopic 815-20 Location of Gain or (Loss) Recognized in Income on DerivativeAmount of Gain or (Loss) Recognized in Income on DerivativeAmount of Gain or (Loss) Recognized in Income on DerivativeAmount of Gain or (Loss) Recognized in Income on Derivative\n\n(In thousands)202520242023\n\nInterest Rate ProductsOther Income$(121)$9 $(168)\n\nRisk Participation AgreementOther Income84 295 114 \n\nTotal$(37)$304 $(54)\n\nFee IncomeOther income / (expense)$999 $1,175 $0 \n\n124\n\n[Table of Contents](#i02a691969dd8487e9cf0e5fe6bed79ba_7)[    ](#i02a691969dd8487e9cf0e5fe6bed79ba_7)\n\nCredit-risk-related Contingent Features\n\nApplicable for OTC derivatives with dealers\n\nThe Company has agreements with each of its derivative counterparties that contain a provision where if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its derivative obligations.\n\nAs of December 31, 2025 and December 31, 2024, the fair value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements was $5.3 million and $1.3 million, respectively. As of December 31, 2025 and December 31, 2024, the Company had posted $1.9 million and $260,000, respectively, in collateral related to these agreements. The interest rate hedge counterparty has posted $3.3 million and $890,000 of collateral in proportion to potential losses in the derivative position at December 31, 2025 and December 31, 2024, respectively.\n\nUnaudited Quarterly Financial Data\n\nThe Company has adopted certain provisions within the amendments to Regulation S-K that eliminate tabular presentation of unaudited quarterly financial information. There have been no material retrospective changes to financial statements for any of the quarters within the fiscal years ended December 31, 2025 and December 31, 2024."}