ITHACA — Tompkins Trust Company and its parent company Tompkins Financial Corp. (ticker symbol: TMP) are busy with a couple major initiatives that could transform the Ithaca–based banking company’s business.

Tompkins Trust recently announced it is expanding its efforts in the Syracuse market and has hired Brian Bisaccio as a senior vice president and regional manager to develop commercial-lending services in Onondaga County. At the same time, Tompkins Financial went before the City of Ithaca Planning Board to present a concept for a new corporate headquarters in Ithaca’s downtown center.

Syracuse expansion

Regarding the first set of plans, Bisaccio is currently reviewing sites for Tompkins Trust’s first office in Onondaga County. 

“Syracuse enjoys a steady economy,” he says, explaining the rationale for the initiative. “It doesn’t experience wild gyrations. The economic growth is slow, steady, and predictable. We have seen a lot of development in the area, including downtown Syracuse, the Inner Harbor, and the [Syracuse] University area. This means a lot of opportunity in those areas as well as throughout Onondaga County.” 

Bisaccio, who has had a 34-year career in banking, continues, “The market is largely comprised of small- and medium-sized businesses, which is the bank’s ‘sweet spot.’ Tompkins Trust is not new to the area; we have been doing significant business in this market for quite a while and have more than 1,400 customers. While the new office will be set up as a commercial office focused on loan production, we will also have insurance and wealth-management staff on site. My focus is primarily in Onondaga County, but this office will also respond to business opportunities in the Mohawk Valley and North Country.”

Bisaccio says he has reviewed 13 office locations and narrowed his choices to just a few. “The Syracuse office will be downtown or on the periphery,” he says. “I expect to finalize the location by the end of the second quarter and have the office open for business by the end of the third quarter. Initially, the staff will include four people, but the 2,500 square feet gives us room to expand. I anticipate hiring additional staff, including relationship managers, early in 2016. The bank has a recognized brand here, and we have a full pipeline of commercial activity: That makes me optimistic.” 

While the new office will focus on commercial business, Tompkins Trust also expects to capture retail deposits — for example, from business customers’ employees. Tompkins Trust’s offices in Cortland and Auburn both have retail operations in addition to commercial banking. 

New corporate HQ

The decision to build a new corporate headquarters was a “no-brainer,” according to Tompkins Financial’s president and CEO, Stephen S. Romaine. “Our … [mode of operation] requires a collaborative environment across all of our business lines. The organization currently occupies six different locations in the Ithaca area, which makes communications cumbersome. Since our divisions share the same client base, co-locating makes a lot of sense. The challenge is to bring together 300 employees in a downtown location and to accommodate anticipated future growth.” 

According to a presentation by Ithaca–based Trowbridge Wolf Michaels Landscape Architects LLP (which was retained by Tompkins Financial) on May 14 to the Ithaca Planning Board, the new headquarters will be located at 118-119 E. Seneca St. It will be situated between the DeWitt Mall and the new Hilton Garden Inn Ithaca and across the street from Tompkins Financial’s present headquarters. The proposal is for a 7-story building containing about 110,000 square feet sited on 0.833 acres. The project is on a fast track, with Tompkins Financial hoping to complete its preparations this summer so that site work can begin this fall. Occupancy is scheduled for early 2017. 

The banking company has retained HOLT Architects to design the project, and Elwyn & Palmer Consulting Engineers of Ithaca is responsible for the subsurface investigation. Preliminary estimates assume the contractor will have to drive piles to a depth of 80 to 85 feet to support the structure. Tompkins Financial has not yet bid the construction contract. CNYBJ estimates the total project will cost well north of $20 million, including planning, site-preparation, construction, moving, and acquisition of furniture and equipment. 

The financials

The recent announcements by Tompkins Financial and Tompkins Trust follow another successful year at the financial-services enterprise. Stockholders at the annual meeting, held at the Country Club of Ithaca on May 4, were in high spirits, not just from the adult beverages served but also from the financial report, which reflected continued growth and profitability. 

The 2014 year-end data showed Tompkins Financial’s assets at $5.27 billion, up 5.3 percent from a year prior. Tompkins Financial posted net income of just over $52 million in 2014, up 2.3 percent from nearly $50.9 million in 2013. Even as net income grew, Tompkins Financial reduced its non-performing assets by more than 30 percent to a level that makes its peers envious (0.54 percent of total assets versus 1.23 percent, according to the Federal Reserve.) 

At the same time, loan balances were up by more than 6 percent, average noninterest-bearing deposits increased by 12 percent, and fee-based revenue rose nearly 4 percent. Perhaps of most interest to the assembled stockholders, cash dividends for the year totaled $1.62 per share, up more than 5 percent from 2013. “The financial report is a continuation of a long-term trend,” asserted Romaine at the stockholders’ meeting. “This … [institution] has issued dividends for 136 consecutive years. During the past 26 years, the dividends have increased annually. We are enjoying solid performance from all our divisions.” The 2015 first-quarter earnings report, released on April 24, confirms the trend.

Structure & strategy

Tompkins Financial acts as the holding company for three operating divisions: banking, insurance, and wealth management. The banking group is comprised of four banks: Tompkins Trust serving Tompkins, Cortland, Cayuga, and soon Onondaga counties; Tompkins Bank of Castile in Western New York; Tompkins Mahopac Bank, serving the lower Hudson Valley; and Tompkins VIST Bank in Southeastern Pennsylvania and the suburbs of Philadelphia. 

Tompkins Financial acquired the Western New York and the Hudson Valley banks in 1999, and the Pennsylvania bank in 2012. The banking group operates 67 offices and 85 ATMs in New York and Pennsylvania. Tompkins Insurance Agencies, Inc. is an amalgam of 12 independent, insurance agencies acquired between 2000 and 2014. Tompkins Financial Advisors, the wealth-management arm, was formed with the acquisition of AM&M Financial Services in 2007. Tompkins Financial employs 1,037 people. 

Tompkins Financial’s success is based on its long-standing strategy. “Our success comes from pursuing sustainable growth,” opines Romaine, 51, who was appointed president and CEO of Tompkins Financial in 2007. “While the company is publicly traded, we look beyond quarter-to-quarter performance. Our decision-making process requires management to ask what will happen in 50 years. The real question is: will our decision be sustainable for the long term and deliver results for all of our stakeholders? We consistently find profitable business without necessarily being number one in a marketplace or pursuing ‘white-hot’ growth. 

This has led us to diversify our revenue streams and our geographic reach to minimize localized and industry-segment economic disruptions. 

“I think of the analogy to a fisherman who puts multiple lines in the water to … [ensure his catch]. The … [caveat] is to be discriminating in what fish you keep. In the financial-services world, there are many opportunities, but we have to be disciplined in how we do business and with whom. This strategy served us well when, during the recent recession, [Tompkins Financial] continued to post record-breaking financial statements in 2008 and 2009 without the need to take TARP (Troubled Asset Relief Program) money. [Tompkins Trust] was well-capitalized and never had an appetite for the risk associated with participating in the sub-prime market.”

Romaine also credits Tompkins Financial’s continued growth, in part, to what he calls “… customer disruption. Consolidation in the banking business has grown over the last 20 years as smaller banks have struggled with the high cost of technology, regulation, added competition from non-banks, and the current climate of low interest rates. This trend is sure to continue. The large regional, national, and international banks keep changing their strategy, which usually means concentrating on urban areas. In the process, the large banks often shed their branches in rural areas and in small cities. This dislocation has confused banking customers who are looking for a stable institution. I find it particularly interesting that Tompkins Financial’s fastest growth is coming in the suburbs around Philadelphia while the second fastest growth is in Western New York. Customers are recognizing the Tompkins brand and appreciative that we are part of each community we serve.” 

Despite a tepid economy, fierce competition, and costly regulation, Tompkins Financial is bullish on its ability to continue its record of growth and profitability while avoiding undue risk. “Our growth over the last 15 years has been [approximately] 50 percent organic and 50 percent the result of our M&A activity,” notes Romaine, who currently serves as the vice chairman of the board of the New York Bankers Association. “It’s a good balance. We will continue this pattern based on the corporation’s values and concern for our customers. But all growth has to be tempered by any exposure to undue risk. That’s why we are so discriminating in our M&A efforts to find businesses that are not only a fit [on paper] but also a cultural fit. Our success in the past year to unwind the non-performing assets we acquired is another indication of how important we monitor exposure to risk.”