ITHACA, N.Y. — The Tompkins Financial Corporation saw a 33 percent surge in reported net income in the second quarter of 2015, bringing its total income for that period from $13.1 million in 2014 to $17.4 million this year.
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That income boom is mostly the result of a one-time accounting change to the company’s pension plan — and was not caused by a massive new windfall for the Ithaca-based financial company, says Tompkins Financial’s President and CEO Stephen Romaine.
Even without the one-time increase, Romaine said, the company continues to see strong, steady growth. Without the pension change, the period still would have represented the best second quarter earnings in Tompkins Financial’s history, according to Romaine.
The accounting shift resulted in a one-time gain of $3.6 million after taxes, according to a news release. So what did the change consist of?
Tompkins Financial shifted the company’s pension plans from a “defined benefit pension plan” to a “defined contribution pension plan,” which Romaine says is more flexible for company employees.
Officials chose the new pension plan because it is less vulnerable to “very volatile, wild increases and decreases” related to interest rates, Romaine said.
Though the company’s employees did not have a role in the decision, Romaine said that Tompkins Financial provides generous pension benefits to its employees that he believes they are pleased with and that match their prior packages.
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