UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FOR ANNUAL REPORTS OF EMPLOYEE STOCK
PURCHASE, SAVINGS AND SIMILAR PLANS
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FORM 11-K
xANNUAL REPORT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Fiscal year ended: December 31, 2012
oTRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____ to ____
Commission File Number: 1-12709
TOMPKINS FINANCIAL CORPORATION INVESTMENT
AND STOCK OWNERSHIP PLAN
(Full title of Plan)
TOMPKINS FINANCIAL CORPORATION
(Name of issuer of the securities held pursuant to the Plan)
P.O. Box 460, The Commons
Ithaca, New York 14851
(607) 273-3210
(Address of principal executive offices)
TOMPKINS FINANCIAL CORPORATION
INVESTMENT AND STOCK OWNERSHIP PLAN
ITHACA, NEW YORK
AUDITED FINANCIAL STATEMENTS
SUPPLEMENTAL SCHEDULES
AND
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
DECEMBER 31, 2012 AND 2011
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CONTENTS
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AUDITED FINANCIAL STATEMENTS
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PAGE
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3
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5
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6
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7
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SUPPLEMENTAL SCHEDULES
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Form 5500 - Schedule H - Part IV:
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18
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19
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Audit Committee
Tompkins Financial Corporation
Investment and Stock Ownership Plan
We have audited the accompanying statements of net assets available for benefits of the Tompkins Financial Corporation Investment and Stock Ownership Plan as of December 31, 2012 and 2011, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Plan is not required to have, nor were we engaged to perform, an audit of its internal controls over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2012 and 2011, and the changes in net assets available for benefits for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
- 3 -
Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The supplemental Schedule of Assets Held for Investment Purposes At End of Year – December 31, 2012 and Schedule of Reportable Transactions – Year Ended December 31, 2012, together referred to as “Supplemental Information,” are presented for the purpose of additional analysis and is not a required part of the basic financial statements, but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedules are the responsibility of the Plan’s management. The supplemental schedules have been subjected to the auditing procedures applied in the audit of the basic 2012 financial statements, and in our opinion, are fairly stated in all material respects in relation to the basic 2012 financial statements taken as a whole.
Elmira, New York
June 27, 2013
- 4 -
TOMPKINS FINANCIAL CORPORATION
INVESTMENT AND STOCK OWNERSHIP PLAN
|
December 31,
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2012
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2011
|
|||||||
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ASSETS
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Investments, at fair value:
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||||||||
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Tompkins Financial Corporation common stock
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$ | 7,736,285 | $ | 6,108,541 | ||||
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Mutual funds
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17,992,514 | 12,879,604 | ||||||
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Pooled market value separate accounts
|
29,698,143 | 16,611,766 | ||||||
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Guaranteed Income Fund
|
11,919,560 | 7,203,756 | ||||||
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TOTAL INVESTMENTS
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67,346,502 | 42,803,667 | ||||||
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Receivables:
|
||||||||
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Notes receivable from participants
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1,822,792 | 1,328,382 | ||||||
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Employer contributions
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429,439 | 408,206 | ||||||
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Participant contributions
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146,843 | 93,124 | ||||||
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TOTAL RECEIVABLES
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2,399,074 | 1,829,712 | ||||||
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NET ASSETS AVAILABLE FOR BENEFITS
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$ | 69,745,576 | $ | 44,633,379 | ||||
The accompanying notes are an integral part of the financial statements.
- 5 -
TOMPKINS FINANCIAL CORPORATION
INVESTMENT AND STOCK OWNERSHIP PLAN
|
Year ended December 31,
|
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2012
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2011
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|||||||
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ADDITIONS
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Additions to net assets attributed to:
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Investment income:
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||||||||
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Interest and dividends
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$ | 811,779 | $ | 662,137 | ||||
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Net appreciation (depreciation) in fair value of investments
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4,344,820 | (1,979,906 | ) | |||||
| 5,156,599 | (1,317,769 | ) | ||||||
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Participant note interest
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59,774 | 56,334 | ||||||
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Contributions:
|
||||||||
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Employer
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1,674,675 | 1,292,369 | ||||||
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Participant
|
3,998,647 | 3,350,732 | ||||||
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Rollover
|
557,876 | 143,806 | ||||||
| 6,231,198 | 4,786,907 | |||||||
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Transfer from Tompkins Financial Corporation Employee Stock Ownership Plan
|
227,713 | 83,134 | ||||||
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Transfer from VIST Financial Corp. 401(k) Retirement Savings Plan
|
16,812,685 | — | ||||||
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TOTAL NET ADDITIONS
|
28,487,969 | 3,608,606 | ||||||
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DEDUCTIONS
|
||||||||
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Deductions from net assets attributed to:
|
||||||||
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Benefits paid to participants
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3,375,772 | 2,747,897 | ||||||
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TOTAL DEDUCTIONS
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3,375,772 | 2,747,897 | ||||||
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NET INCREASE
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25,112,197 | 860,709 | ||||||
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Net assets available for benefits at beginning of year
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44,633,379 | 43,772,670 | ||||||
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NET ASSETS AVAILABLE FOR BENEFITS AT END OF YEAR
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$ | 69,745,576 | $ | 44,633,379 | ||||
The accompanying notes are an integral part of the financial statements.
- 6 -
TOMPKINS FINANCIAL CORPORATION
INVESTMENT AND STOCK OWNERSHIP PLAN
DECEMBER 31, 2012 AND 2011
NOTE A: DESCRIPTION OF PLAN
The following description of the Tompkins Financial Corporation Investment and Stock Ownership Plan (the “Plan”) provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan's provisions.
General
The Plan is a defined contribution plan covering eligible employees who have met certain age and service requirements. The Plan is administered by the Executive, Compensation/Personnel Committee appointed by Tompkins Financial Corporation’s Board of Directors, and is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). All investments of the Plan are participant directed.
Eligibility
All employees are eligible to begin voluntary contributions and receive matching contributions on the first day of the month coinciding with attaining the age of twenty-one. Employees are eligible for discretionary contributions on the first day of the month coinciding with completing one year of credited service and attaining the age of twenty-one. Leased employees, employees covered under a collective bargaining agreement and “On Call” employees are not eligible to participate.
Vesting
Participants are immediately vested in all contributions and earnings thereon.
Contributions
Participants may contribute their entire eligible compensation, as defined, subject to certain Internal Revenue Service limitations. The Plan sponsor matching contributions are equal to 100% of the first 3% of elective deferral and 50% of the next 2% of elective deferral.
Additionally, the Plan sponsor may contribute amounts annually at the discretion of the Board of Directors based on a percentage of the total compensation of all eligible participants during any plan year. Participants are given the opportunity to elect to receive in cash that portion of their allocation, which the Board shall designate as eligible for cash election for the Plan year, or they may elect to allocate all or part to their plan account maintained on their behalf in the Plan. The Board approved a 3% and 4% contribution for 2012 and 2011, respectively.
Participant notes receivable
Participant notes receivable are measured and valued at their unpaid principal balance plus any accrued but unpaid interest. Loans may be made to participants for a maximum of $50,000, but no more than 50% of the participant’s vested account balance. The loans are secured by the balance of the participant’s account and bear interest at the bank prime rate plus 1% at the time of the loan. Principal and interest is paid through payroll deductions over a term of one to five years, except loans used to purchase a participant’s principal residence which may exceed five years.
- 7 -
TOMPKINS FINANCIAL CORPORATION
INVESTMENT AND STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2012 AND 2011
NOTE A: DESCRIPTION OF PLAN, Cont’d
Diversification and transfers
Under the Tompkins Financial Corporation Employee Stock Ownership Plan document, participants meeting certain age and service requirements may elect to diversify the eligible portion of the Company stock held in their account. The funds elected to be diversified are transferred to the Plan and invested into funds as chosen by the participant. During 2012 and 2011, participants transferred $227,713 and $83,134, respectively.
Participants’ accounts
Each participant’s account is credited with the participant’s elective deferral, an allocation of the Company’s matching and discretionary contributions and allocation of plan earnings. Allocations of company contributions are based upon the participant’s compensation and the allocations of plan earnings are based upon participant account balances. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s account.
Payment of benefits
Upon termination of service, the participant’s account is either maintained in the Plan, transferred to an individual retirement account in the participant’s name, directly rolled over into a qualified retirement plan or paid to the participant in a lump sum.
NOTE B: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of accounting
The financial statements of the Plan are prepared under the accrual method of accounting.
Investment valuation and income recognition
The Plan’s investments are stated at fair value. Purchases and sales of investments are recorded on a trade-date basis. Interest income is accrued when earned. Dividends are recorded on the ex-dividend date.
Following is a description of the valuation methodologies used for assets measured at fair value. There have been no changes in the methodologies used at December 31, 2012 and 2011.
Tompkins Financial Corporation common stock
Tompkins Financial Corporation common stock is valued at the market value as listed on the American Stock Exchange for publicly traded securities.
Mutual funds
Mutual funds are valued at quoted market prices.
Pooled market value separate accounts
The funds are organized as pooled separate accounts of Prudential Retirement Insurance and Annuity Company (PRIAC), an ultimate wholly-owned subsidiary of Prudential Financial, Inc., as investment vehicles for qualified retirement plans.
- 8 -
TOMPKINS FINANCIAL CORPORATION
INVESTMENT AND STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2012 AND 2011
NOTE B: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Cont’d
The value of each fund and of each unit of participation is determined at the close of each day in which PRIAC and the New York Stock Exchange are open for business or as determined by PRIAC (“Valuation Date”). Units of participation in each Fund are issued and redeemed only on a Valuation Date, at the value so determined.
Guaranteed income fund (GIF)
Under the group annuity insurance contract that supports this product, participants may ordinarily direct permitted withdrawal or transfers of all or a portion of their account balance at Contract Value within reasonable timeframes. Contract Value represents deposits made to the contract, plus earnings at guaranteed crediting rates, less withdrawals and fees. The GIF is a benefit responsive annuity contract. This product is not a traditional guaranteed insurance contract and therefore there are not any known cash flows that could be discounted. As a result, the fair value shown is equal to Contract Value.
The average yield earned by the Plan and its participants was 2.60% and 3.00% for the years ended December 31, 2012 and 2011, respectively. Generally there are not any events that could limit the ability of the Plan to transact at Contract Value paid within 90 days or in rare circumstances, Contract Value paid over time. There are not any events that allow the issuer to terminate the contract and which require the Plan sponsor to settle at an amount different than Contract Value paid either within 90 days or over time.
The preceding methods described may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
Administrative expenses
The Plan sponsor has elected to pay certain administrative expenses of the Plan.
Use of estimates in the preparation of financial statements
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Plan’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and changes therein, and disclosure of contingent assets and liabilities. Actual results could differ from those estimates and assumptions.
Payment of benefits
Benefits are recorded when paid.
Subsequent events
The Plan has evaluated subsequent events and determined no subsequent events have occurred requiring adjustments to financial statement disclosures.
- 9 -
TOMPKINS FINANCIAL CORPORATION
INVESTMENT AND STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2012 AND 2011
NOTE C: FAIR VALUE MEASUREMENTS
Accounting principles generally accepted in the United States of America provides a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described as follows:
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Level 1
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-
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Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Plan has the ability to access. | ||
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Level 2
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-
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Inputs to the valuation methodology include: | ||
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-
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Quoted prices for similar assets or liabilities in active markets;
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-
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Quoted prices for identical or similar assets or liabilities in inactive markets;
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-
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Inputs other than quoted prices that are observable for the asset or liability;
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-
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Inputs that are derived principally from or corroborated by observable market data by correlation or other means.
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If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability.
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Level 3
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-
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Inputs to the valuation methodology are unobservable and significant to the fair value measurement. | ||
The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used, as outlined in Note B, need to maximize the use of observable inputs and minimize the use of unobservable inputs.
The following disclosures are required by FASB ASC 820-10-55 and FASB ASU 2009-12, “Investments in Certain Entities That Calculate Net Asset Value Per Share”:
The fair values of these funds have been calculated using the net asset value per share of the underlying investments. There are no unfunded commitments for the pooled market value separate accounts as of December 31, 2012 and 2011. There is no waiting period or other restrictions on redemptions from pooled market value separate accounts. The following are descriptions of the pooled market value separate accounts:
Large Cap Growth – Neuberger Berman Fund
This fund invests primarily in U.S. Stocks. The fund seeks to provide long-term growth of capital and to outperform the Russell 1000 Growth Index over the long-term.
- 10 -
TOMPKINS FINANCIAL CORPORATION
INVESTMENT AND STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2012 AND 2011
NOTE C: FAIR VALUE MEASUREMENTS, Cont’d
Core Plus Bond - Pimco Fund
This fund invests primarily in U.S. Bonds. The fund seeks to exceed the return of the Barclay’s Capital U.S. Aggregate Bond Index, consistent with preservation of capital by investing in a diversified portfolio of fixed income securities.
Mid Cap Value – Systematic Fund
This fund invests primarily in U.S. Stocks. The fund seeks to provide capital appreciation and to outperform the Russell Midcap Value Index over the long-term. The securities of mid-capitalization companies involve greater risks than those associated with larger, more established companies and may be subject to more abrupt or erratic price movements.
Mid Cap Growth - Frontier Fund
This fund invests primarily in U.S. Stocks. The fund seeks to provide capital appreciation and to outperform the Russell Midcap Growth Index over the long-term. The securities of mid-capitalization companies involve greater risks than those associated with larger, more established companies and may be subject to more abrupt or erratic price movements
Dryden S&P 500 Index Fund
This fund invests primarily in U.S. Stocks. The fund is constructed to reflect the composition of the S&P 500 Index. It seeks to provide long-term growth of capital and income.
Large Cap Blend – MFS Fund
This fund invests primarily in U.S. Stocks. The fund seeks to provide long-term growth of capital by investing in equity securities and equity securities convertible into common stocks traded on the U.S. exchanges and issued by large, established companies. The fund invests in both value and growth securities.
The preceding methods as described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
- 11 -
TOMPKINS FINANCIAL CORPORATION
INVESTMENT AND STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2012 AND 2011
NOTE C: FAIR VALUE MEASUREMENTS, Cont’d
The following table sets forth by Level, within the fair value hierarchy, the Plan’s assets at fair value as of December 31, 2012 and 2011:
|
Level 1
|
Level 2
|
Level 3
|
Total
|
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|
December 31, 2012
|
||||||||||||||||
|
Tompkins Financial Corporation common stock
|
$ | 7,736,285 | $ | — | $ | — | $ | 7,736,285 | ||||||||
|
Mutual funds:
|
||||||||||||||||
|
Small blend fund
|
660,321 | — | — | 660,321 | ||||||||||||
|
Foreign large blend fund
|
10,787,301 | — | — | 10,787,301 | ||||||||||||
|
Large cap value fund
|
6,544,892 | — | — | 6,544,892 | ||||||||||||
|
Pooled market value separate accounts:
|
||||||||||||||||
|
U.S. bond
|
— | 10,809,430 | — | 10,809,430 | ||||||||||||
|
Large cap growth stock
|
— | 7,414,079 | — | 7,414,079 | ||||||||||||
|
Mid cap value stock
|
— | 3,860,073 | — | 3,860,073 | ||||||||||||
|
Mid cap growth stock
|
— | 4,841,836 | — | 4,841,836 | ||||||||||||
|
Index fund stock
|
— | 1,359,280 | — | 1,359,280 | ||||||||||||
|
Large cap blend stock
|
— | 1,413,445 | — | 1,413,445 | ||||||||||||
|
Guaranteed Income Fund
|
— | — | 11,919,560 | 11,919,560 | ||||||||||||
|
Total assets at fair value
|
$ | 25,728,799 | $ | 29,698,143 | $ | 11,919,560 | $ | 67,346,502 | ||||||||
|
December 31, 2011
|
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|
Tompkins Financial Corporation common stock
|
$ | 6,108,541 | $ | — | $ | — | $ | 6,108,541 | ||||||||
|
Mutual funds:
|
||||||||||||||||
|
Small blend fund
|
542,840 | — | — | 542,840 | ||||||||||||
|
Foreign large blend fund
|
7,532,823 | — | — | 7,532,823 | ||||||||||||
|
Large cap value fund
|
4,803,941 | — | — | 4,803,941 | ||||||||||||
|
Pooled market value separate accounts:
|
||||||||||||||||
|
U.S. bond
|
— | 5,867,480 | — | 5,867,480 | ||||||||||||
|
Large cap growth stock
|
— | 4,703,454 | — | 4,703,454 | ||||||||||||
|
Mid cap value stock
|
— | 2,477,228 | — | 2,477,228 | ||||||||||||
|
Mid cap growth stock
|
— | 3,002,047 | — | 3,002,047 | ||||||||||||
|
Index fund stock
|
— | 383,869 | — | 383,869 | ||||||||||||
|
Large cap blend stock
|
— | 177,688 | — | 177,688 | ||||||||||||
|
Guaranteed Income Fund
|
— | — | 7,203,756 | 7,203,756 | ||||||||||||
|
Total assets at fair value
|
$ | 18,988,145 | $ | 16,611,766 | $ | 7,203,756 | $ | 42,803,667 | ||||||||
- 12 -
TOMPKINS FINANCIAL CORPORATION
INVESTMENT AND STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2012 AND 2011
NOTE C: FAIR VALUE MEASUREMENTS, Cont’d
The following is a reconciliation of the beginning and ending balances for assets measured at fair value, on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31, 2012 and 2011:
|
December 31,
|
||||||||
|
2012
|
2011
|
|||||||
|
Guaranteed income fund:
|
||||||||
|
Balance at beginning of year
|
7,203,756 | $ | 7,383,660 | |||||
|
Purchases
|
5,238,995 | 2,173,754 | ||||||
|
Sales
|
(754,212 | ) | (2,559,285 | ) | ||||
|
Interest
|
231,021 | 205,627 | ||||||
|
Balance at end of year
|
$ | 11,919,560 | $ | 7,203,756 | ||||
- 13 -
TOMPKINS FINANCIAL CORPORATION
INVESTMENT AND STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2012 AND 2011
NOTE D: INVESTMENTS
The following presents the fair value of investments and the net appreciation (depreciation) in fair value. Investments that represent 5% or more of the Plan’s net assets available for benefits are separately identified:
|
December 31,
|
||||||||
|
2012
|
2011
|
|||||||
|
Fair value at
|
Fair value at
|
|||||||
|
end of year
|
end of year
|
|||||||
|
Tompkins Financial Corporation common stock
|
$ | 7,736,285 | $ | 6,108,541 | ||||
|
Mutual funds:
|
||||||||
|
American – Europacific Growth R4
|
10,787,301 | 7,532,823 | ||||||
|
Eaton Vance Large Cap Value A
|
6,544,892 | 4,803,941 | ||||||
|
Other
|
660,321 | 542,840 | ||||||
| 17,992,514 | 12,879,604 | |||||||
|
Pooled market value separate accounts:
|
||||||||
|
Large Cap Growth – Neuberger Berman
|
7,414,079 | 4,703,454 | ||||||
|
Core Plus Bond – Pimco
|
10,809,430 | 5,867,480 | ||||||
|
Mid Cap Value – Systematic
|
3,860,073 | 2,477,228 | ||||||
|
Mid Cap Growth – Frontier
|
4,841,836 | 3,002,047 | ||||||
|
Other
|
2,772,725 | 561,557 | ||||||
| 29,698,143 | 16,611,766 | |||||||
|
Group Annuity Contract:
|
||||||||
|
Guaranteed Income Fund
|
11,919,560 | 7,203,756 | ||||||
| $ | 67,346,502 | $ | 42,803,667 | |||||
The investments appreciated (depreciated) in fair value as follows:
|
Year ended December 31,
|
||||||||
|
2012
|
2011
|
|||||||
|
Tompkins Financial Corporation common stock
|
$ | 173,438 | $ | (120,768 | ) | |||
|
Mutual funds
|
2,047,974 | (1,566,896 | ) | |||||
|
Pooled market value separate accounts
|
2,123,408 | (292,242 | ) | |||||
| $ | 4,344,820 | $ | (1,979,906 | ) | ||||
- 14 -
TOMPKINS FINANCIAL CORPORATION
INVESTMENT AND STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2012 AND 2011
NOTE E: TAX STATUS
The Internal Revenue Service has determined and informed the Plan sponsor by a letter dated March 31, 2008, that the prototype plan under which the Plan was adopted is designed in accordance with the applicable sections of the Internal Revenue Code (IRC). The Plan has been amended since receiving the determination letter. However, the Plan administrator and the Plan’s legal counsel believe that the Plan is designed and is currently being operated in compliance with the applicable requirements of IRC.
Accounting principles generally accepted in the United States of America require plan management to evaluate tax positions taken by the plan and recognize a tax liability (or asset) if the Plan has taken an uncertain position that more likely than not would not be sustained upon examination by the Internal Revenue Service. The Plan Administrator has analyzed the tax positions taken by the Plan, and has concluded that as of December 31, 2012, there are no uncertain positions taken or expected to be taken that would require recognition of a liability (or asset) or disclosure in the financial statements. The Plan is subject to routine audits by tax jurisdictions; however, there are currently no audits for any tax periods in progress. The Plan Administrator believes it is no longer subject to income tax examinations for years prior to December 31, 2009.
NOTE F: PLAN TERMINATION
Although it has not expressed any intent to do so, the Plan sponsor has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants have a fully vested interest in their accounts and their accounts will be paid to them as provided by the Plan document.
NOTE G: TRANSACTIONS WITH PARTIES-IN-INTEREST
The Plan invests in shares of the Guaranteed Income Fund, mutual funds and pooled market value separate accounts managed by affiliates of Prudential Retirement. Prudential Retirement acts as trustee for only those investments as defined by the Plan. Transactions in such investments qualify as party-in-interest transactions which are exempt from the prohibited transactions rules.
The Plan invests in Tompkins Financial Corporation common stock which represents approximately 11% and 14% of net assets available for benefits at December 31, 2012 and 2011, respectively.
NOTE H: RISKS AND UNCERTAINTIES
The Plan invests in various types of investment securities. Investment securities are exposed to various risks, such as interest rate, market and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported in the accompanying statements of net assets available for benefits.
- 15 -
TOMPKINS FINANCIAL CORPORATION
INVESTMENT AND STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2012 AND 2011
NOTE I: TRANSFER FROM OTHER PLAN
In September 2012, net assets of $16,812,685 from the VIST Financial Corp. 401(k) Retirement Savings Plan were merged into the Plan. Additionally, employees of VIST Financial Corp. were eligible to participant in the Plan.
NOTE J: RECONCILIATION OF THE FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for plan benefits per the financial statements to Form 5500:
|
December 31,
|
||||||||
|
2012
|
2011
|
|||||||
|
|
||||||||
|
Net assets available for benefits per the financial statements
|
$ | 69,745,576 | $ | 44,633,379 | ||||
|
Less: employer contributions receivable
|
(429,439 | ) | (408,206 | ) | ||||
|
Net assets available for benefits per Form 5500
|
$ | 69,316,137 | $ | 44,225,173 | ||||
The following is a reconciliation of participant contributions per the financial statements to Form 5500:
|
December 31,
|
||||||||
|
2012
|
2011
|
|||||||
|
Participant contributions per the financial statements
|
$ | 3,998,647 | $ | 3,350,732 | ||||
|
Add: prior year employer contributions receivable
|
408,206 | 495,175 | ||||||
|
Less: current year employer contributions receivable
|
(429,439 | ) | (408,206 | ) | ||||
|
Participant contributions per the Form 5500
|
$ | 3,977,414 | $ | 3,437,701 | ||||
As discussed in Note A, participants are given the opportunity to elect to receive in cash that portion of their profit sharing allocation which the Board of Directors shall designate as eligible for cash election for the Plan year or they may elect to allocate all or part to their plan account maintained on their behalf in the Plan. These elective deferrals are not made by the participant until the year subsequent to the year in which the profit sharing percentage is approved. Therefore, these elective deferrals are accrued as a receivable to the Plan in the Plan year that the profit sharing amount is approved. However, these elective deferrals are considered in the relevant non-discrimination testing in the year that they are received by the Plan.
- 16 -
TOMPKINS FINANCIAL CORPORATION
INVESTMENT AND STOCK OWNERSHIP PLAN
SUPPLEMENTAL SCHEDULES
- 17 -
TOMPKINS FINANCIAL CORPORATION
INVESTMENT AND STOCK OWNERSHIP PLAN
EIN: 15-0470650
PLAN #: 002
FORM 5500 – SCHEDULE H – PART IV
AT END OF YEAR - DECEMBER 31, 2012
|
(a)
|
(b)
|
(c)
|
(e)
|
|||||
|
Description of investment,
|
||||||||
|
Party
|
including maturity date, rate of
|
|||||||
|
in
|
Identity of issue, borrower,
|
interest, collateral, par or
|
Current
|
|||||
|
interest
|
lessor or similar party
|
maturity value
|
Value
|
|||||
| * |
Prudential Retirement Insurance
|
428,930.2236 units
|
$ | 11,919,560 | ||||
|
and Annuity Company
|
Guaranteed Income Fund
|
|||||||
| * |
Prudential Retirement Insurance
|
521,580.1560 units
|
7,414,079 | |||||
|
and Annuity Company
|
Large Cap Growth
|
|||||||
|
Neuberger Berman
|
||||||||
| * |
Prudential Retirement Insurance
|
566,493.2080 units
|
10,809,430 | |||||
|
and Annuity Company
|
Core Plus Bond/Pimco
|
|||||||
| * |
Prudential Retirement Insurance
|
311,426.1380 units
|
3,860,073 | |||||
|
and Annuity Company
|
Mid Cap Value/Systematic
|
|||||||
| * |
Prudential Retirement Insurance
|
385,704.9376 units
|
4,841,836 | |||||
|
and Annuity Company
|
Mid Cap Growth/Frontier
|
|||||||
| * |
Prudential Retirement Insurance
|
14,056.7506 units
|
1,359,280 | |||||
|
and Annuity Company
|
Dryden S&P 500 Index Fund
|
|||||||
| * |
Prudential Retirement Insurance
|
115,553.9579 units
|
1,413,445 | |||||
|
and Annuity Company
|
Large Cap Blend/MFS
|
|||||||
| * |
Prudential Mutual Funds
|
23,968.0914 units
|
660,321 | |||||
|
Neubrgr Brmn Genesis Adv
|
||||||||
| * |
Prudential Mutual Funds
|
266,484.7112 units
|
10,787,301 | |||||
|
Amer: Europacific Growth R4
|
||||||||
| * |
Prudential Mutual Funds
|
335,635.4646 units
|
6,544,892 | |||||
|
EatonVance Lg Cap Val A
|
||||||||
| * |
Tompkins Financial Corporation
|
195,163.5994 units
|
||||||
|
Tompkins Financial
|
||||||||
|
Corporation Common Stock
|
7,736,285 | |||||||
| 67,346,502 | ||||||||
| * |
Participant notes receivable
|
3.24% - 8.25%
|
1,822,792 | |||||
| $ | 69,169,294 | |||||||
| Note: | Certain cost information in column (d) is not required to be disclosed as investments are participant directed under an individual account plan. |
- 18 -
TOMPKINS FINANCIAL CORPORATION
INVESTMENT AND STOCK OWNERSHIP PLAN
EIN: 15-0470650
PLAN #: 002
FORM 5500 – SCHEDULE H – PART IV
YEAR ENDED DECEMBER 31, 2012
Reportable transactions are transactions or a series of transactions in excess of 5% of the value of the Plan assets as of January 1, 2012 as defined in Section 2520.103-6 of the Department of Labor’s Rules and Regulations for Reporting and Disclosure under ERISA:
|
(a)
|
(b)
|
(c)
|
(d)
|
(g)
|
(h)
|
(i)
|
||||||||||||||||
|
Identity of party involved
|
Description of asset (including
interest rate and maturity |
Purchase
price |
Selling
price |
Cost of
asset |
Current
value of asset |
Net gain
or (loss) |
||||||||||||||||
|
Guaranteed Income Fund
|
113,440.5002 shares
|
$ | 3,128,550 | $ | — | $ | 3,128,550 | $ | 3,128,550 | $ | — | |||||||||||
|
Core Plus Bond/Pimco
|
164,992.6314 shares
|
3,103,273 | — | 3,103,273 | 3,103,273 | — | ||||||||||||||||
Note: Columns (e) and (f) are not applicable.
- 19 -
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Trustees (or other persons who administer the Plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
TOMPKINS FINANCIAL CORPORATION INVESTMENT AND STOCK OWNERSHIP PLAN
| Administrator: TOMPKINS TRUST COMPANY | ||
| Date: June 27, 2013 | By: | /s/ Francis M. Fetsko |
| Francis M. Fetsko | ||
| Executive Vice President and | ||
| Chief Financial Officer | ||
|
Exhibit Number
|
Description
|
Page
|
||
|
23.1
|
||||