Amended Quarterly Report (10-q/a)

 

United States

Securities and Exchange Commission

Washington, D.C. 20549

 

FORM 10-Q/A

Amendment No. 1

 

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended March 31, 2014
	OR
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from _____  to ______

 

Commission File Number 1-12709

 

Tompkins Financial Corporation

(Exact name of registrant as specified in its charter)

 

New York	16-1482357
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
The Commons, P.O. Box 460, Ithaca, NY	14851
(Address of principal executive offices)	(Zip Code)

 

Registrant's telephone number, including area code: [phone]

Former name, former address, and former fiscal year, if changed since last report: NA

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐.

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one): 

Large Accelerated Filer ☐	Accelerated Filer ☒
Non-Accelerated Filer ☐ (Do not check if a smaller reporting company)	Smaller Reporting Company ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.) Yes ☐ No ☒. 

Indicate the number of shares of the Registrant's Common Stock outstanding as of the latest practicable date:

Class	Outstanding as of April 30, 2014
Common Stock, $0.10 par value	14,857,722 shares

 

 

EXPLANATORY NOTE

This Amendment No. 1 on Form 10-Q/A (this "Amendment") to the Quarterly Report on Form 10-Q of Tompkins Financial Corporation (the "Company") for the quarter ended March 31, 2014, originally filed with the U.S. Securities and Exchange Commission (the "SEC") on May 12, 2014 (the "Original Filing"), is being filed solely for the purpose of correcting three typographical errors appearing in Item 1, Note 5 of the Notes to Unaudited Condensed Consolidated Financial Statements on page 16 of the Original Filing. These errors are related to the outstanding principal balance and the carrying amount of the Company's loans acquired in the VIST Bank acquisition. At December 31, 2013, the outstanding principal balance of Acquired Credit Impaired Loans was $62,146, not $59,979; the carrying amount of Acquired Non-Credit Impaired Loans was $620,231, not $59,979; and the outstanding principal balance of Total Acquired Loans was $692,746, not $736,816.

These disclosures appeared in Note 5 of the Notes to Unaudited Condensed Consolidated Financial Statements, which has been corrected and restated below in its entirety:

 

5.  Loans and Leases

Loans and Leases at March 31, 2014 and December 31, 2013 were as follows:

  

		3/31/2014												12/31/2013
(in thousands)			Originated				Acquired				Total Loans and Leases				Originated				Acquired				Total Loans and Leases
Commercial and industrial
Agriculture		$	53,261			$	0			$	53,261			$	74,788			$	0			$	74,788
Commercial and industrial other			577,784				129,878				707,662				562,439				128,503				690,942
Subtotal commercial and industrial			631,045				129,878				760,923				637,227				128,503				765,730
Commercial real estate
Construction			53,380				40,655				94,035				46,441				39,353				85,794
Agriculture			57,225				3,055				60,280				52,627				3,135				55,762
Commercial real estate other			922,024				351,095				1,273,119				903,320				366,438				1,269,758
Subtotal commercial real estate			1,032,629				394,805				1,427,434				1,002,388				408,926				1,411,314
Residential real estate
Home equity			173,169				64,039				237,208				171,809				67,183				238,992
Mortgages			663,335				34,704				698,039				658,966				35,336				694,302
Subtotal residential real estate			836,504				98,743				935,247				830,775				102,519				933,294
Consumer and other
Indirect			19,902				2				19,904				21,202				5				21,207
Consumer and other			32,154				1,156				33,310				32,312				1,219				33,531
Subtotal consumer and other			52,056				1,158				53,214				53,514				1,224				54,738
Leases			5,529				0				5,529				5,563				0				5,563
Covered loans			0				24,106				24,106				0				25,868				25,868
Total loans and leases			2,557,763				648,690				3,206,453				2,529,467				667,040				3,196,507
Less: unearned income and deferred costs and fees			(2,241	)			0				(2,241	)			(2,223	)			0				(2,223	)
Total loans and leases, net of unearned income and deferred costs and fees		$	2,555,522			$	648,690			$	3,204,212			$	2,527,244			$	667,040			$	3,194,284

 

The outstanding principal balance and the related carrying amount of the Company's loans acquired in the VIST Bank acquisition are as follows at March 31, 2014 and December 31, 2013:

 

(in thousands)		03/31/2014				12/31/2013
Acquired Credit Impaired Loans
Outstanding principal balance		$	57,121			$	62,146
Carrying amount			43,194				46,809
Acquired Non-Credit Impaired Loans
Outstanding principal balance			615,510				630,600
Carrying amount			605,496				620,231
Total Acquired Loans
Outstanding principal balance			672,631				692,746
Carrying amount			648,690				667,040

 

 

The following tables present changes in accretable yield on loans acquired from VIST Bank that were considered credit impaired.

 

(in thousands)
Balance at January 1, 2013		$	7,337
Accretion			(8,896	)
Disposals (loans paid in full)			(212	)
Reclassifications to/from nonaccretable difference 1			7,933
Other changes in expected cash flows 2			4,792
Balance at December 31, 2013		$	10,954
(in thousands)
Balance at January 1, 2014		$	10,954
Accretion			(1,264	)
Disposals (loans paid in full)			(211	)
Reclassifications to/from nonaccretable difference 1			752
Other changes in expected cash flows 2			0
Balance at March 31, 2014		$	10,231
1 Results in increased interest income as a prospective yield adjustment over the remaining life of the loans, as well as increased interest income from loan sales, modification and prepayments.
2 Represents changes in cash flows expected to be collected due to factors other than credit (e.g. changes in prepayment assumptions and/or changes in interest rates on variable rate loans).

 

During the first quarter of 2014 we increased our estimate of future cash flows on acquired loans to reflect our current outlook for prepayment speeds on these balances and increases in interest rates on variable rate loans. The decreases in prepayment speed assumptions and increases in interest rate assumptions increased our accretable discount by $752,000. This change did not materially impact our current quarter interest income or net interest margin.

 

At March 31, 2014, acquired loans included $24.1 million of covered loans. VIST Bank had previously acquired these loans in an FDIC assisted transaction in the fourth quarter of 2010. In accordance with a loss sharing agreement with the FDIC, certain losses and expenses relating to covered loans may be reimbursed by the FDIC at 70% or, if net losses exceed certain levels specified in the loss sharing agreements, 80%. See Note 7 – “FDIC Indemnification Asset Related to Covered Loans” for further discussion of the loss sharing agreements and related FDIC indemnification assets.

 

The Company has adopted comprehensive lending policies, underwriting standards and loan review procedures. Management reviews these policies and procedures on a regular basis. The Company discussed its lending policies and underwriting guidelines for its various lending portfolios in Note 6 – “Loans and Leases” in the Notes to Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. There have been no significant changes in these policies and guidelines. As such, these policies are reflective of new originations as well as those balances held at March 31, 2014. 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 origination, loan quality, concentrations of credit, loan delinquencies and nonperforming loans and potential problem loans.

 

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments are due. Generally loans are placed on nonaccrual status if principal or interest payments become 90 days or more past due and/or management deems the collectability of the principal and/or interest to be in question as well as when required by regulatory agencies. 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, the borrower has established a payment history, 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.

 

Acquired loans that met the criteria for nonaccrual of interest prior to the acquisition may be considered performing after the date of acquisition, regardless of whether the customer is contractually delinquent, if we can reasonably estimate the timing and amount of the expected cash flows on such loans and if the Company expects to fully collect the new carrying value of the loans. As such, we may no longer consider the loan to be nonaccrual or nonperforming and may accrue interest on these loans, including the impact of any accretable discount. To the extent we cannot reasonably estimate cash flows, interest income recognition is discontinued. The Company has determined that it can reasonably estimate future cash flows on our acquired loans that are past due 90 days or more and accruing interest and the Company expects to fully collect the carrying value of the loans.

 

 

The below table is an age analysis of past due loans, segregated by originated and acquired loan and lease portfolios, and by class of loans, as of March 31, 2014 and December 31, 2013.

 

 

March 31, 2014
(in thousands)		30-89 days				90 days or more				Current Loans				Total Loans				90 days and accruing 1				Nonaccrual
Originated Loans and Leases
Commercial and industrial
Agriculture		$	0			$	0			$	53,261			$	53,261			$	0			$	0
Commercial and industrial other			971				410				576,403				577,784				0				413
Subtotal commercial and industrial			971				410				629,664				631,045				0				413
Commercial real estate
Construction			0				8,558				44,822				53,380				0				9,335
Agriculture			17				0				57,208				57,225				0				25
Commercial real estate other			389				7,427				914,208				922,024				278				8,486
Subtotal commercial real estate			406				15,985				1,016,238				1,032,629				278				17,846
Residential real estate
Home equity			269				1,647				171,253				173,169				61				1,933
Mortgages			2,971				6,098				654,266				663,335				0				6,545
Subtotal residential real estate			3,240				7,745				825,519				836,504				61				8,478
Consumer and other
Indirect			462				203				19,237				19,902				0				234
Consumer and other			523				0				31,631				32,154				0				3
Subtotal consumer and other			985				203				50,868				52,056				0				237
Leases			58				0				5,471				5,529				0				0
Total loans and leases			5,660				24,343				2,527,760				2,557,763				339				26,974
Less: unearned income and
deferred costs and fees			0				0				0				(2,241	)			0				0
Total originated loans and leases, net of unearned income and deferred costs and fees		$	5,660			$	24,343			$	2,527,760			$	2,555,522			$	339			$	26,974
Acquired Loans and Leases
Commercial and industrial
Commercial and industrial other			368				1,488				128,022				129,878				859				930
Subtotal commercial and industrial			368				1,488				128,022				129,878				859				930
Commercial real estate
Construction			0				2,160				38,495				40,655				1,691				469
Agriculture			0				0				3,055				3,055				0				0
Commercial real estate other			956				2,251				347,888				351,095				341				3,130
Subtotal commercial real estate			956				4,411				389,438				394,805				2,032				3,599
Residential real estate
Home equity			265				956				62,818				64,039				351				773
Mortgages			702				681				33,321				34,704				504				1,634
Subtotal residential real estate			967				1,637				96,139				98,743				855				2,407
Consumer and other
Indirect			0				0				2				2				0				0
Consumer and other			2				0				1,154				1,156				0				0
Subtotal consumer and other			2				0				1,156				1,158				0				0
Covered loans			635				1,705				21,766				24,106				1,135				0
Total acquired loans and leases, net of unearned income and deferred costs and fees		$	2,928			$	9,241			$	636,521			$	648,690			$	4,881			$	6,936
1  Includes acquired loans that were recorded at fair value at the acquisition date.

 

 

December 31, 2013
(in thousands)		30-89 days				90 days or more				Current Loans				Total Loans				90 days and accruing 1				Nonaccrual
Originated loans and leases
Commercial and industrial
Agriculture		$	0			$	0			$	74,788			$	74,788			$	0			$	0
Commercial and industrial other			211				1,187				561,041				562,439				0				1,260
Subtotal commercial and industrial			211				1,187				635,829				637,227				0				1,260
Commercial real estate
Construction			216				7,657				38,568				46,441				0				9,873
Agriculture			180				0				52,447				52,627				0				46
Commercial real estate other			1,104				6,976				895,240				903,320				161				9,522
Subtotal commercial real estate			1,500				14,633				986,255				1,002,388				161				19,441
Residential real estate
Home equity			784				1,248				169,777				171,809				62				1,477
Mortgages			2,439				5,946				650,581				658,966				384				7,443
Subtotal residential real estate			3,223				7,194				820,358				830,775				446				8,920
Consumer and other
Indirect			768				152				20,282				21,202				0				216
Consumer and other			60				0				32,252				32,312				0				38
Subtotal consumer and other			828				152				52,534				53,514				0				254
Leases			0				0				5,563				5,563				0				0
Total loans and leases			5,762				23,166				2,500,539				2,529,467				607				29,875
Less: unearned income and
deferred costs and fees			0				0				0				(2,223	)			0				0
Total originated loans and leases, net of unearned income and deferred costs and fees		$	5,762			$	23,166			$	2,500,539			$	2,527,244			$	607			$	29,875
Acquired loans and leases
Commercial and industrial
Commercial and industrial other			554				1,651				126,298				128,503				1,231				419
Subtotal commercial and industrial			554				1,651				126,298				128,503				1,231				419
Commercial real estate
Construction			0				2,148				37,205				39,353				1,676				473
Agriculture			0				0				3,135				3,135				0				0
Commercial real estate other			403				3,585				362,450				366,438				709				3,450
Subtotal commercial real estate			403				5,733				402,790				408,926				2,385				3,923
Residential real estate
Home equity			213				934				66,036				67,183				347				1,844
Mortgages			345				1,264				33,727				35,336				594				2,322
Subtotal residential real estate			558				2,198				99,763				102,519				941				4,166
Consumer and other
Indirect			0				0				5				5				0				0
Consumer and other			17				0				1,202				1,219				0				0
Subtotal consumer and other			17				0				1,207				1,224				0				0
Covered loans			0				2,416				23,452				25,868				2,416				0
Total acquired loans and leases, net of unearned income and deferred costs and fees		$	1,532			$	11,998			$	653,510			$	667,040			$	6,973			$	8,508
1  Includes acquired loans that were recorded at fair value at the acquisition date.

 

 

Except as described above, this Amendment does not modify or update the disclosures presented in, or exhibits to, the Original Filing in any way. This Amendment speaks as of the date of the Original Filing and does not reflect events occurring after the filing of the Original Filing. Accordingly, this Amendment should be read in conjunction with the Original Filing, as well as any other filings made by the Company with the SEC pursuant to Section 13(a) or 15(d) of Securities Exchange Act of 1934, as amended, subsequent to the filing of the Original Filing.

 

Part II.

Other Information

 

Item 6.

Exhibits

 

The following exhibits are filed as part of this Amendment No. 1 to Quarterly Report on Form 10-Q/A:

 

Exhibit Number	Description
31.1*	Certification of Principal Executive Officer as required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.
31.2*	Certification of Principal Financial Officer as required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.
32.1*	Certification of Principal Executive Officer as required by Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, 18 U.S.C. Section 1350
32.2*	Certification of Principal Financial Officer as required by Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, 18 U.S.C. Section 1350
101**	The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Statements of Condition as of March 31, 2014 and December 31, 2013; (ii) Condensed Consolidated Statements of Income for the three months ended March 31, 2014 and 2013; (iii) Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31,2014 and 2013; (iv)Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2014 and 2013; (v) Condensed Consolidated Statements of Changes in Shareholders’ Equity for the three months ended March 31, 2014 and 2013; and (vi) Notes to Unaudited Condensed Consolidated Financial Statements.
*Filed herewith.   **Previously filed with the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, as filed with the SEC on May 12, 2014.

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Date: May 16, 2014

 

TOMPKINS FINANCIAL CORPORATION

 

By:	/S/ Stephen S. Romaine
	Stephen S. Romaine
	President and Chief Executive Officer
	(Principal Executive Officer)
By:	/S/ Francis M. Fetsko
	Francis M. Fetsko
	Executive Vice President, Chief Financial Officer, and Chief Operating Officer
	(Principal Financial Officer)
	(Principal Accounting Officer)

 

 

EXHIBIT INDEX

 

Exhibit Number	Description
31.1*	Certification of Principal Executive Officer as required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.
31.2*	Certification of Principal Financial Officer as required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.
32.1*	Certification of Principal Executive Officer as required by Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, 18 U.S.C. Section 1350
32.2*	Certification of Principal Financial Officer as required by Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, 18 U.S.C. Section 1350
101**	The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Statements of Condition as of March 31, 2014 and December 31, 2013; (ii) Condensed Consolidated Statements of Income for the three months ended March 31, 2014 and 2013; (iii) Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31,2014 and 2013; (iv)Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2014 and 2013; (v) Condensed Consolidated Statements of Changes in Shareholders’ Equity for the three months ended March 31, 2014 and 2013; and (vi) Notes to Unaudited Condensed Consolidated Financial Statements.
*Filed herewith.   **Previously filed with the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, as filed with the SEC on May 12, 2014.