Stephen Romaine

Stephen Romaine is the chief executive officer of Tompkins Financial.

Tompkins Financial Corporation recently acquired VIST, a community bank based in Wyomissing, Pennsylvania. We sat down with Stephen Romaine, Tompkins Financial’s president and chief executive officer, to find out what the acquisition meant for the Ithaca community.



Ithaca Times: What is the relationship between Tompkins Trust Company and Tompkins Financial Corporation?

Stephen Romaine: Tompkins Financial Corporation is the publicly held holding company for not only the trust company but twelve years ago began to integrate two other community banks, the Bank of Castile in western New York and the Mahopac National Bank in the Hudson Valley along with Tompkins Insurance Agencies, which joined a couple of years after those two banks. So it has been a strategy to keep the community banking system strong and supported in its local communities, but at the same time give our shareholders the opportunity to continue to grow performance.



IT: Did you seek out VIST? Why VIST?

SR: Generally we did. But I say generally because it wasn’t a specific target it was more the market that we were interested in. You’ll note if you see our franchise map that we have big gaps between where each of these individual businesses actually are located and the reason for that is that we look for long-term, sustainable growth opportunities. Many businesses just try to move to the next town to the next town. And there’s nothing wrong with that, but we’re looking for opportunities where our shareholders could benefit from long-term, sustainable growth. And as a result we thought there’d be an opportunity to continue to do that and looked throughout the region for places that fit that description. Most don’t. but the Southeast Pennsylvania market did. And Southeast Pennsylvania, I think it’s very important to point out, is exactly the same distance from Ithaca as our Mahopac National Bank market in the Hudson Valley of New York.

We, for many years, have a very disciplined approach to acquiring other companies. We pass on dozens before we’re actually interested in pursuing an individual opportunity, because a lot of things have to fit correctly. The culture has to be right, the market has to be right, the business model has to be right. And as a result we spent years getting to know businesses in the southeast Pennsylvania market, doing our research. And as a result we were introduced to them under completely different circumstances several years ago. Got to know them. Recognized the cultural match. Recognized the business model match. And when they called late last year and said that they were interested in selling their franchise and would we be interested in being involved in the process, it was an easy yes. Because we had spent the time to get to know them.


IT: Will they experience any changes as a result of this acquisition in terms of the way their business functions?

SR: Very, very few. Our model is designed to leave local management, local boards of directors, local identity in place because we think there’s extraordinary value in the community to keeping that identity. It also allows the customers to be served best that their decisions aren’t being made in some far off land that they’re not familiar with. And that’s the case here in the Trust Company and in each of our businesses — local decisions, local philanthropy, local customers are all managed locally. So they’ll have that opportunity.

We do consolidate and standardize many of our back office functions, things like finance and payroll and some operations areas and that’s because we have to do this efficiently and we have to do it effectively for our shareholders as well.


IT: How many locations does VIST have?

SR: VIST has 21 locations in what I guess I will call more suburban markets of Philadelphia. They have a business model not unlike our own, which was part of the attraction. They have 21 branch offices — banking branch offices. They also have an insurance business as we do, Tompkins Insurance Agencies. And they have a wealth management business like Tompkins Financial Advisors. So it integrates well.


IT: Will fracking in Pennsylvania affect Tompkins Trust at all through this acquisition?

SR: Probably not directly. That wasn’t a point of interest for us. I think the fracking economy in Pennsylvania is probably a little further northwest of this market. So it wasn’t really an attraction for being down there. That’s not the target.


IT: Can you put the acquisition of VIST into the whole scope of Tompkins Financial? Where does it fit in with the other banks?

SR: Each of our independent community banks — Mahopac National Bank, Tompkins Trust Company, Bank of Castile, and now VIST — all operate as independent community banks in their marketplace. So VIST will fit in just the way they do in operating exactly the same fashion that the other three banks do with their local management team, their local board of directors. I do sit on each of those boards so we provide connectivity between the entire company. But we don’t manage the company with a fully staffed holding company. We manage the company — and frankly there are no other employees of the holding company besides myself and my assistant — as a collective of the leadership of each of our businesses. So my leadership team, the real senior management of our company, is a collection of each of the CEO’s of all of our business lines plus our chief operating officer, our HR director, our marketing director and the like. But each of these individuals are operating day-to-day inside one of these subsidiaries.


IT: How will this acquisition affect Tompkins County?

SR: There’s a variety of positive impacts it has on each of the communities that we do. But specific to Tompkins County, much of that consolidated back office operation is done here. It’s not all done here, but the majority of it is done here. So we’ve been hiring staff. I think we’ve hired better than a dozen more people here over the last six months to pick up some of this work. But we also get the opportunity to service a larger customer and take advantage of the individual expertise that exists in each of these businesses. So it’s clear that while they’re all community focused, they’re all highly passionate about their local regions, which is the strength of the model. You still have individual expertise in the markets. So when of our markets is more familiar with a lending product than another, they can call their sister company up and say, “I have a client that needs help, we don’t do much of this.” And they can come into town and give us a hand. And we expect VIST will be able to do that for us, and we’ll be able to do that for them.


IT: Do you expect there to be more job opportunities here as a result of the acquisition?

SR: Over time, I would think so. And the reason I say that is that throughout even this difficult economy, the trust company and the Tompkins Financial operations areas have continued to add staff every year and I have got to believe we’re one of the few businesses, perhaps at all, that have continued to be able to do that. Most have reduced their employment base back in 2008 when things got tough, but we’ve continued to grow it ever since


IT: How would you respond to people asking about how this acquisition affects the “localness” of the Tompkins Trust?

SR: Yeah, we get that question. Really it’s entirely designed to protect the locality of the individual business, because in the era of declining margins, low interest rates, extraordinarily higher regulation which translates to cost, it is very difficult these days for a smaller community bank to be viable. And those that are hanging on in our business are either unprofitable or barely profitable. So this was entirely a strategy to ensure that we could retain the locality of these individual businesses and at the same time take advantages of the economies of scale necessary to compete in this industry today. So we feel like it’s something that has preserved what we all believe in preserving.


IT: So you don’t feel that this connection to a local bank in Pennsylvania changes the localness of Tompkins Trust?

SR: Not in the slightest. Not in the slightest. The trust company’s management team, Greg Hartz and his management team, the board of directors here are all as equally committed to serving this market as we ever were. And at the same if all we had was any individual local market it would be even more difficult to actually do that.


IT: Are there any plans for future acquisitions? How large do you see Tompkins Financial growing?

SR: I have throughout my career refused to target a particular size. I think that’s an unwise objective for a business, to artificially create a goal line because there is no goal line. This is a journey that this company has been on for 175 years. Our mission is to keep it on this journey for 175 more, not set interim artificial targets. But our expectations are that we’ll continue that long-term sustainable growth. In the present our focus is entirely on doing this acquisition correctly, maintaining that focus in the local markets and making sure this model works. Not interested in the next one at this point. Would there be another one, possibly. The reason I say that is that we are committed to have good performance both for our customers and for our shareholders equally. And that’s unusual these days. Very unusual. We perform at the top of our market. We think it’s in great part because of the model that we’ve chosen and the commitment we have to these local markets, which is the model that’s working best these days. Though I also expect that many other businesses that haven’t adopted this approach may continue to struggle and may look for partners and we may be in a position of strength to think about that down the road. But what I’ve said over and over and over again at annual meetings and in front of employees and customer groups is we cannot be dependent on acquisitions. We cannot be. We have to build a business that can stay like this and continue to grow forever. We’ll approach any acquisitions as opportunities not necessities.


IT: So there’s no goal of being like Bank of America or growing to that size?

SR: No, no. No perhaps there’s a goal not be like Bank of America.



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