CBU Community Bank System Inc.

Community Bank System Reports Second Quarter 2017 Results

Community Bank System, Inc. (NYSE:CBU) reported second quarter 2017 net income of $17.2 million, or $0.35 per fully diluted share, compared with $25.9 million, or $0.58 per share reported for the second quarter of 2016. Second quarter 2017’s results included $22.9 million, or $0.32 per share of acquisition expenses related to the recently completed acquisition of Merchants Bancshares, Inc. (“Merchants”). Excluding acquisition expenses, quarterly earnings per share were $0.67 per share, a new quarterly high for the Company. Diluted earnings per share totaled $0.91 for the first six months of 2017, compared to $1.13 per share in the first half of 2016. Excluding acquisition expenses, year-to-date earnings per share were $1.27, or 12.4% above the first half of 2016.

“We concluded a very strong second quarter with accelerated operating performance as a result of a full quarter contribution of the Northeast Retirement Services, Inc. (“NRS”) transaction closed in February, and half a quarter contribution from the Merchants acquisition closed in May,” said President and Chief Executive Officer Mark E. Tryniski. “Both of these high-value transactions have performed above our initial expectations, with NRS continuing to grow at a double-digit pace on both the top and bottom line, and the Merchants integration and cost synergies running ahead of plan. Improvements in expense management, credit quality and growth in non-interest income contributed to the fourteen percent increase in per share results (excluding acquisition expenses) over the second quarter of 2016. We are well positioned to continue delivering a high level of operating performance for the benefit of our shareholders,” said Mr. Tryniski.

Total revenues for the second quarter of 2017 were $129.3 million, an increase of $22.2 million, or 20.7%, over the prior year quarter, and included a partial quarter of revenues from Merchants and a full quarter of revenues from the NRS transaction completed in early February. Higher revenues were generated as a result of a 13.5% increase in average earning assets and continued growth in noninterest income, partially offset by a one basis-point decline in net interest margin from the prior year quarter. A combination of acquired and organic growth resulted in an $11.0 million, or 49.6% increase in wealth management, insurance, and employee benefit services revenues. Deposit service fees increased 11.0% year-over-year, primarily the result of the addition of Merchants as well as increased card-related revenues. Other banking services declined $0.2 million from the second quarter of 2016, entirely related to an insurance-related gain experienced last year. The quarterly provision for loan losses of $1.5 million was $0.8 million lower than the second quarter of 2016, primarily reflective of lower quarterly net charge-off levels. Benefitting from the addition of the Merchants’ loan portfolios, non-performing asset and delinquent loan ratios were lower than the end of the second quarter of 2016. Total second quarter operating expenses were $102.9 million, and included $22.9 million of non-recurring acquisition expenses related to the Merchants transaction. Excluding acquisition expenses from both periods, total operating expenses of $80.0 million for the second quarter were $13.9 million, or 21.0% above the second quarter of 2016, and included a partial quarter of operating expenses from Merchants and a full quarter of operating expenses from NRS, as well as an additional $2.9 million of intangible amortization, primarily from the two transactions.

Second quarter 2017 net interest income was $78.0 million, an increase of $9.7 million, or 14.2%, compared to the second quarter of 2016, and included a partial quarter from Merchants. Slightly higher combined funding costs and a stable earning asset yield, which included an incremental $0.8 million in purchased loan accretion, resulted in a one basis point decrease in net interest margin year-over-year. Average loan balances grew $829.2 million, or 17.0%, principally related to the Merchants transaction, while average loan yields increased six basis points year-over-year, primarily from incremental purchased loan accretion. Investment interest income was $0.5 million higher than the second quarter of 2016 as average investment securities (including cash equivalents) balances increased by $201.1 million, while the yield on investments declined 19 basis points. Interest expense was $0.6 million higher than the previous year’s quarter, driven by a $97.7 million increase in average borrowings, and a $920.5 million increase in average deposit balances, principally related to the Merchants transaction, partially offset by a one-basis point decline in the cost of funds.

Wealth management and insurance services revenues increased $2.0 million, or 19.1%, compared to the second quarter of 2016, to $12.5 million, from both acquired and organic growth. Employee benefit services revenues increased $9.0 million from the second quarter of 2016, primarily from the NRS acquisition.

Excluding acquisition expenses related to the Merchants’ transaction, second quarter 2017 operating expenses of $80.0 million, which included a partial quarter of operating activities from Merchants and a full quarter of operating activities from NRS, increased $13.9 million over the second quarter of 2016. Salaries and employee benefits increased $6.9 million, or 18.1%, and included the personnel added from both transactions as well as planned merit increases. All other expenses increased 25.0%, and reflected the occupancy, equipment and other operating costs of both Merchants and NRS, including significantly higher intangible amortization, compared to the second quarter of 2016.

During the first quarter of 2017, the Company adopted new accounting guidance for share-based transactions. That guidance requires that all excess tax benefits and tax deficiencies associated with share-based compensation be recognized as income tax expense or benefit in the income statement. Previously, tax effects resulting from changes in the Company’s share price subsequent to the grant date of equity instruments were recorded through shareholders’ equity at the time of vesting or exercise. The adoption of the amended accounting guidance resulted in a $2.2 million reduction of income tax expense in the first quarter of 2017, or $0.04 of diluted earnings per common share, and a $0.3 million reduction of income tax expense in the second quarter, or less than $0.01 per share. The second quarter 2017 effective income tax was 31.0%, and reflected $0.3 million reduction in income tax expense related to this change in accounting for share-based transactions. Excluding that change, the core effective income tax rate would have been approximately 32.3%, compared to 32.7% in the second quarter of 2016, and included the impact of the non-recurring acquisition expenses incurred in the first six months of 2017.

The Company also provides supplemental reporting of its results on a “net adjusted” or “tangible” basis, from which it excludes the after-tax effect of amortization of core deposit and other intangible assets (and the related goodwill, core deposit intangible and other intangible asset balances, net of applicable deferred tax amounts) and expenses associated with acquisitions. The amounts of such expenses are presented in the tables that accompany this release. Although “adjusted net income” as defined by the Company is not a GAAP measure, the Company’s management believes this information helps investors understand the effect of acquisition activity in reported results. Adjusted net earnings per share were $0.73 in the second quarter of 2017, compared to $0.60 in the second quarter of 2016, or a 21.7% increase.

Financial Position

Average earning assets of $8.68 billion for the second quarter of 2017 were up $1.03 billion, or 13.5% from the second quarter of 2016, and included a partial quarter from the Merchants transaction. Similarly, average deposit balances grew $920.5 million, or 13.1% compared to the second quarter of 2016. Average borrowings in the second quarter of 2017 of $347.0 million, were $97.7 million, or 39.2%, higher than the second quarter of last year.

Ending loans at June 30, 2017 increased $1.46 billion, or 29.7%, year-over-year, reflecting the Merchants acquisition as well as productive organic growth in the Company’s consumer lending portfolios. Investment securities totaled $3.15 billion at June 30, 2017, up from the previous four quarter-ends due to investments added from Merchants, and partially offset by limited reinvestment of securities cash flows over the last twelve months.

Shareholders’ equity of $1.57 billion at June 30, 2017 was $336.0 million, or 27.2%, higher than the prior year period, a result of strong earnings generation and capital retention over the last four quarters, as well as incremental shares issued in conjunction with the NRS and Merchants acquisitions. The Company’s net tangible equity to net tangible assets ratio was 8.08% at June 30, 2017, down from 9.58% a year earlier, a result of the two acquisitions completed in the first half of 2017. The Company’s Tier 1 leverage ratio was 10.19% at the end of the second quarter, compared to 10.14% a year earlier.

As previously announced, in December 2016 the Company’s Board of Directors approved a stock repurchase program authorizing the repurchase of up to 2.2 million shares of the Company’s common stock during a twelve-month period starting January 1, 2017. Such repurchases may be made at the discretion of the Company’s senior management based on market conditions and other relevant factors and will be acquired through open market or privately negotiated transactions as permitted under Rule 10b-18 of the Securities Exchange Act of 1934 and other applicable legal requirements. There were no shares repurchased in the first half of 2017.

Asset Quality

The Company’s asset quality metrics continue to be favorable relative to comparative peer and industry averages and illustrate the long-term effectiveness of the Company’s disciplined risk management and underwriting standards. Net charge-offs were $1.1 million for the second quarter, compared to $1.4 million for the second quarter of 2016 and $2.0 million for the first quarter of 2017. Net charge-offs as an annualized percentage of average loans measured 0.08% in the second quarter of 2017, compared to 0.11% in last year’s second quarter and 0.16% in the first quarter of 2017. Nonperforming loans as a percentage of total loans at June 30, 2017 were 0.36%, improved from 0.49% at June 30, 2016 and 0.46% at March 31, 2017. The total loan delinquency ratio of 0.99% at the end of the second quarter was 11 basis points lower than the level at June 30, 2016, and five basis points higher than this year’s first quarter-end. The second quarter provision for loan losses of $1.5 million was $0.8 million lower than the second quarter of 2016, and $0.4 million lower than the first quarter of 2017. The allowance for loan losses to nonperforming loans was 207% at June 30, 2017, compared with the 206% and 193% levels at the end of the first quarter of 2017 and second quarter of 2016, respectively.

Dividend

During the second quarter of 2017 the Company declared a quarterly cash dividend of $0.32 per share on its common stock, compared to a $0.31 dividend declared in the second quarter of 2016. This increase marked the 24th consecutive year of dividend increases for the Company. President and Chief Executive Officer, Mark E. Tryniski, commented, “The payment of a meaningful and growing dividend is an important component of our commitment to provide consistent and favorable long-term returns to our shareholders. The increase reflected the continued strength of both our current operating performance and capital position.” The one cent increase, or 3.2%, in the Company’s quarterly cash dividend over the same quarter of the prior year, represents an annualized yield of 2.4% based upon its’ closing price of $54.17 on July 28, 2017.

Merchants Bancshares, Inc.

On October 24, 2016, the Company announced that it had entered into a definitive agreement to acquire Merchants Bancshares, Inc. ("Merchants"), parent company of Merchants Bank headquartered in South Burlington, Vermont, for approximately $345 million in Company stock and cash. The acquisition was completed on May 12, 2017. The transaction extended the Company's footprint into the Vermont and Western Massachusetts markets. Upon the completion of the merger, Community Bank added 31 branch locations in Vermont and one office in Western Massachusetts with approximately $2.0 billion of assets, and deposits of $1.5 billion.

Northeast Retirement Services, Inc.

On December 5, 2016, the Company announced that it had entered into a definitive agreement to acquire Northeast Retirement Services, Inc. (“NRS”), a leading provider of plan accounting, transfer agency, fund administration, trust and retirement plan services for approximately $148.6 million in Company stock and cash. The acquisition was completed on February 3, 2017.

Conference Call Scheduled

Company management will conduct an investor call at 11:00 a.m. (ET) today, July 31, 2017, to discuss second quarter results. The conference call can be accessed at 888-504-7966 (1-719-325-2477 if outside United States and Canada) using the conference ID code 1428867. Investors may also listen live via the Internet at: http://www.webcaster4.com/Webcast/Page/995/21751.

This earnings release, including supporting financial tables, is available within the press releases section of the Company's investor relations website at: http://ir.communitybanksystem.com. An archived webcast of the earnings call will be available on this site for one full year.

Community Bank System, Inc. operates more than 230 customer facilities across Upstate New York, Northeastern Pennsylvania, Vermont, and Western Massachusetts through its banking subsidiary, Community Bank, N.A. With assets of approximately $10.9 billion, the DeWitt, N.Y. headquartered company is among the country's 150 largest financial institutions. In addition to a full range of retail, business, and municipal banking services, the Company offers comprehensive financial planning, insurance and wealth management services through its’ Community Bank Wealth Management Group and OneGroup NY, Inc. operating subsidiaries. The Company's Benefit Plans Administrative Services, Inc. subsidiary (which includes the recently acquired NRS) is a leading provider of employee benefits administration, trust services, fund administration and actuarial consulting services to customers on a national scale. Community Bank System, Inc. is listed on the New York Stock Exchange and the Company's stock trades under the symbol CBU. For more information about Community Bank visit www.communitybankna.com or http://ir.communitybanksystem.com.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The following factors, among others, could cause the actual results of CBU’s operations to differ materially from CBU’s expectations: the successful integration of operations of its acquisitions; competition; changes in economic conditions, interest rates and financial markets; changes in legislation or regulatory requirements; and the timing for receiving regulatory approvals and completing pending transactions. These statements are based on the current beliefs and expectations of CBU’s management and CBU does not assume any duty to update forward-looking statements.

         

Summary of Financial Data

(Dollars in thousands, except per share data)

             
Quarter Ended   Year-to-Date
      June 30, 2017   June 30, 2016   June 30, 2017   June 30, 2016
Earnings                  
Loan income $62,351 $52,509 $114,735 $104,159
Investment income 19,071 18,601 36,645 36,707
Total interest income 81,422 71,110 151,380 140,866
Interest expense 3,393 2,804 6,077 5,679
Net interest income 78,029 68,306 145,303 135,187
Provision for loan losses 1,461 2,305 3,289 3,646
Net interest income after provision for loan losses 76,568 66,001 142,014 131,541
Deposit service fees 16,655 15,008 31,362 28,742
Revenues from mortgage banking and other banking services 1,407 1,597 2,566 3,176
Wealth management and insurance services 12,502 10,496 23,763 21,453
Employee benefit services 20,662 11,671 37,851 23,682
Gain on sale of investments 0 0 2 0
Total noninterest income 51,226 38,772 95,544 77,053
Salaries and employee benefits 44,808 37,950 86,208 77,088
Occupancy and equipment 8,637 7,409 16,833 15,072
Amortization of intangible assets 4,263 1,403 7,031 2,845
Acquisition expenses 22,896 263 24,612 340
Other 22,275 19,331 41,770 38,680

Total operating expenses

102,879 66,356 176,454 134,025
Income before income taxes 24,915 38,417 61,104 74,569
Income taxes 7,724 12,560 17,656 24,309
Net income $17,191 $25,857 $43,448 $50,260
Basic earnings per share $0.35 $0.58 $0.92 $1.14
Diluted earnings per share     $0.35   $0.58   $0.91   $1.13
 
           

Summary of Financial Data

(Dollars in thousands, except per share data)                  
2017   2016
      2nd Qtr   1st Qtr   4th Qtr   3rd Qtr   2nd Qtr
Earnings                      
Loan income $62,351 $52,384 $53,602 $53,706 $52,509
Investment income 19,071 17,574 19,397 17,616 18,601
Total interest income 81,422 69,958 72,999 71,322 71,110
Interest expense 3,393 2,684 2,753 2,859 2,804
Net interest income 78,029 67,274 70,246 68,463 68,306
Provision for loan losses 1,461 1,828 2,640 1,790 2,305
Net interest income after provision for loan losses 76,568 65,446 67,606 66,673 66,001
Deposit service fees 16,655 14,707 14,959 14,894 15,008
Revenues from mortgage banking and other banking services 1,407 1,159 1,438 2,863 1,597
Wealth management and insurance services 12,502 11,261 10,544 10,928 10,496
Employee benefit services 20,662 17,189 11,679 11,267 11,671
Gain on sale of investments 0 2 0 0 0
Total noninterest income 51,226 44,318 38,620 39,952 38,772
Salaries and employee benefits 44,808 41,400 36,259 38,300 37,950
Occupancy and equipment 8,637 8,196 7,633 7,373 7,409
Amortization of intangible assets 4,263 2,768 1,275 1,359 1,403
Acquisition expenses 22,896 1,716 1,364 2 263
Other 22,275 19,495 20,066 19,192 19,331
Total operating expenses 102,879 73,575 66,597 66,226 66,356
Income before income taxes 24,915 36,189 39,629 40,399 38,417
Income taxes 7,724 9,932 13,237 13,239 12,560
Net income 17,191 26,257 26,392 27,160 25,857
Basic earnings per share $0.35 $0.58 $0.59 $0.61 $0.58
Diluted earnings per share     $0.35   $0.57   $0.59   $0.61   $0.58
Profitability                      
Return on assets 0.69% 1.22% 1.21% 1.24% 1.20%
Return on equity 4.74% 8.47% 8.59% 8.71% 8.62%
Return on tangible equity(2) 7.72% 13.57% 13.40% 13.52% 13.63%
Noninterest income/operating income (FTE) (1) 38.9% 38.9% 34.7% 36.0% 35.3%
Efficiency ratio (2)     57.5%   60.7%   57.5%   59.0%   59.0%
Components of Net Interest Margin (FTE)                      
Loan yield 4.41% 4.31% 4.33% 4.36% 4.35%
Cash equivalents yield 0.99% 0.79% 0.48% 0.46% 0.46%
Investment yield 2.87% 2.90% 3.14% 2.88% 3.06%
Earning asset yield 3.87% 3.80% 3.90% 3.82% 3.87%
Interest-bearing deposit rate 0.14% 0.13% 0.13% 0.13% 0.14%
Borrowing rate 1.54% 2.18% 1.80% 1.31% 1.50%
Cost of all interest-bearing funds 0.21% 0.19% 0.19% 0.20% 0.20%
Cost of funds (includes DDA) 0.16% 0.15% 0.15% 0.16% 0.15%
Net interest margin (FTE) 3.72% 3.65% 3.76% 3.67% 3.73%
Fully tax-equivalent adjustment     $2,400   $2,310   $2,382   $2,450   $2,605
 
           
Summary of Financial Data
(Dollars in thousands, except per share data)                  
2017 2016
      2nd Qtr   1st Qtr   4th Qtr   3rd Qtr   2nd Qtr
Average Balances                      
Loans $5,695,781 $4,939,092 $4,934,034 $4,913,517 $4,866,574
Cash equivalents 52,956 40,209 15,367 19,110 19,456
Taxable investment securities 2,408,020 2,203,175 2,179,840 2,179,044 2,178,448
Nontaxable investment securities 526,962 540,518 556,774 571,327 588,897
Total interest-earning assets 8,683,719 7,722,994 7,686,015 7,682,998 7,653,375
Total assets 9,958,553 8,747,266 8,665,948 8,712,758 8,656,653
Interest-bearing deposits 6,021,697 5,543,046 5,472,420 5,405,180 5,517,287
Borrowings 346,975 177,587 213,930 327,578 249,263
Total interest-bearing liabilities 6,368,672 5,720,633 5,686,350 5,732,758 5,766,550
Noninterest-bearing deposits 1,948,434 1,620,473 1,603,703 1,569,960 1,532,322
Shareholders' equity     1,455,847   1,256,888   1,222,124   1,239,927   1,206,353
Balance Sheet Data                      
Cash and cash equivalents $219,695 $291,186 $173,857 $161,542 $161,634
Investment securities 3,145,012 2,788,718 2,784,392 2,877,644 2,931,301
Loans:
Consumer mortgage 2,211,412 1,830,800 1,819,701 1,798,748 1,779,295
Business lending 2,479,152 1,468,465 1,490,076 1,506,878 1,536,546
Consumer indirect 1,057,664 1,055,112 1,044,972 1,037,077 993,132
Home equity 427,483 393,769 401,998 401,784 399,870
Consumer direct 185,589 184,067 191,815 196,134 195,959
Total loans 6,361,300 4,932,213 4,948,562 4,940,621 4,904,802
Allowance for loan losses 47,451 47,096 47,233 46,789 46,526
Intangible assets, net 831,403 618,977 480,844 482,119 483,478
Other assets 374,087 329,862 326,015 312,609 307,422
Total assets 10,884,046 8,913,860 8,666,437 8,727,746 8,742,111
Deposits:
Noninterest-bearing 2,283,138 1,642,158 1,646,039 1,577,194 1,546,253
Non-maturity interest-bearing 5,508,503 5,010,516 4,726,787 4,771,436 4,664,635
Time 833,963 684,203 703,128 728,789 746,966
Total deposits 8,625,604 7,336,877 7,075,954 7,077,419 6,957,854
Borrowings 373,053 0 146,200 133,900 267,600
Subordinated debt held by unconsolidated subsidiary trusts 122,802 102,177 102,170 102,164 102,158
Accrued interest and other liabilities 189,687 178,776 144,013 173,681 177,570
Total liabilities 9,311,146 7,617,830 7,468,337 7,487,164 7,505,182
Shareholders' equity 1,572,900 1,296,030 1,198,100 1,240,582 1,236,929
Total liabilities and shareholders' equity     10,884,046   8,913,860   8,666,437   8,727,746   8,742,111
Capital                      
Tier 1 leverage ratio 10.19% 10.35% 10.55% 10.35% 10.14%
Tangible equity/net tangible assets (2) 8.08% 8.91% 9.24% 9.66% 9.58%
Diluted weighted average common shares O/S 49,386 46,227 45,025 44,835 44,636
Period end common shares outstanding 50,512 45,956 44,437 44,357 44,179
Cash dividends declared per common share $0.32 $0.32 $0.32 $0.32 $0.31
Book value $31.14 $28.20 $26.96 $27.97 $28.00
Tangible book value(2) $16.21 $16.22 $17.12 $18.06 $17.99
Common stock price (end of period)     $55.77   $54.98   $61.79   $48.11   $41.09
 
           
Summary of Financial Data
(Dollars in thousands, except per share data)                  
2017   2016
      2nd Qtr   1st Qtr   4th Qtr   3rd Qtr   2nd Qtr
Asset Quality                      
Nonaccrual loans $21,033 $20,066 $20,619 $21,301 $22,150
Accruing loans 90+ days delinquent 1,882 2,809 3,076 2,015 1,909
Total nonperforming loans 22,915 22,875 23,695 23,316 24,059
Other real estate owned (OREO) 2,491 2,486 1,966 2,060 1,726
Total nonperforming assets 25,406 25,361 25,661 25,376 25,785
Net charge-offs 1,107 1,965 2,196 1,527 1,375
Allowance for loan losses/loans outstanding 0.75% 0.95% 0.95% 0.95% 0.95%
Nonperforming loans/loans outstanding 0.36% 0.46% 0.48% 0.47% 0.49%
Allowance for loan losses/nonperforming loans 207% 206% 199% 201% 193%
Net charge-offs/average loans 0.08% 0.16% 0.18% 0.12% 0.11%
Delinquent loans/ending loans 0.99% 0.94% 1.19% 1.06% 1.10%
Loan loss provision/net charge-offs 132% 93% 120% 117% 168%
Nonperforming assets/total assets     0.23%   0.28%   0.30%   0.29%   0.29%
Asset Quality (excluding loans acquired since 1/1/09)                      
Nonaccrual loans $14,360 $15,268 $16,600 $16,966 $18,259
Accruing loans 90+ days delinquent 1,639 1,707 1,963 1,869 1,573
Total nonperforming loans 15,999 16,975 18,563 18,835 19,832
Other real estate owned (OREO) 1,681 2,225 1,658 1,594 1,258
Total nonperforming assets 17,680 19,200 20,221 20,429 21,090
Net charge-offs 692 1,866 1,846 1,432 1,404
Allowance for loan losses/loans outstanding 1.01% 1.01% 1.02% 1.02% 1.02%
Nonperforming loans/loans outstanding 0.35% 0.38% 0.42% 0.43% 0.46%
Allowance for loan losses/nonperforming loans 284% 266 % 245% 238% 224%
Net charge-offs/average loans 0.06% 0.17% 0.17% 0.13% 0.13%
Delinquent loans/ending loans 1.06% 0.86% 1.14% 1.01% 1.08%
Loan loss provision/net charge-offs 153% 85% 133% 124% 144%
Nonperforming assets/total assets     0.20%   0.23%   0.25%   0.25%   0.26%
 
           
Summary of Financial Data
(Dollars in thousands, except per share data)                  
2017   2016
      2nd Qtr   1st Qtr   4th Qtr   3rd Qtr   2nd Qtr
Quarterly GAAP to Non-GAAP Reconciliations                      
Income statement data
Net income
Net income (GAAP) $17,191 $26,257 $26,392 $27,160 $25,857
Acquisition expenses (3) 15,797   1,245   908   1   177
Subtotal (non-GAAP) 32,988 27,502 27,300 27,161 26,034
Amortization of intangibles (3) 2,942   2,008   849   914   944
Adjusted net income (non-GAAP) 35,930   29,510   28,149   28,075   26,978
 
Return on average assets
Adjusted net income (non-GAAP) $35,930 $29,510 $28,149 $28,075 $26,978
Average total assets 9,958,553   8,747,266   8,665,948   8,712,758   8,656,653
Adjusted return on average assets 1.45%   1.37%   1.29%   1.28%   1.25%
 
Return on average equity
Adjusted net income (non-GAAP) $35,930 $29,510 $28,149 $28,075 $26,978
Average total equity 1,455,847   1,256,888   1,222,124   1,239,927   1,206,353
Adjusted return on average equity 9.90%   9.52%   9.16%   9.01%   8.99%
 
Earnings per common share
Diluted earnings per share (GAAP) $0.35 $0.57 $0.59 $0.61 $0.58
Acquisition expenses (3) 0.32   0.03   0.02   0.00   0.00
Subtotal (non-GAAP) 0.67 0.60 0.61 0.61 0.58
Amortization of intangibles (3) 0.06   0.04   0.02   0.02   0.02
Diluted adjusted net earnings per share (non-GAAP) 0.73   0.64   0.63   0.63   0.60
 
Noninterest operating expenses
Noninterest expenses (GAAP) $102,879 $73,575 $66,597 $66,226 $66,356
Amortization of intangibles (4,263) (2,768) (1,275) (1,359) (1,403)
Acquisition expenses (22,896)   (1,716)   (1,364)   (2)   (263)
Total adjusted noninterest expenses (non-GAAP) 75,720   69,091   63,958   64,865   64,690
 
Efficiency ratio
Adjusted noninterest expenses (non-GAAP) - numerator $75,720   $69,091   $63,958   $64,865   $64,690
Tax-equivalent net interest income 80,429 69,584 72,628 70,913 70,911
Noninterest revenues 51,226 44,318 38,620 39,952 38,772
Insurance-related recovery 0 0 0 (950) 0
Gain on sales of investments 0   (2)   0   0   0
Operating revenues (non-GAAP) - denominator 131,655   113,900   111,248   109,915   109,683
Efficiency ratio (non-GAAP) 57.5%   60.7%   57.5%   59.0%   59.0%
 
           
Summary of Financial Data
(Dollars in thousands, except per share data)                  
2017   2016
      2nd Qtr   1st Qtr   4th Qtr   3rd Qtr   2nd Qtr
Quarterly GAAP to Non-GAAP Reconciliations                      
Balance sheet data
Total assets
Total assets (GAAP) $10,884,046 $8,913,860 $8,666,437 $8,727,746 $8,742,111
Intangible assets (831,403) (618,977) (480,844) (482,119) (483,478)
Deferred taxes on intangible assets 77,097   68,236   43,504   42,523   41,528
Total tangible assets (non-GAAP) 10,129,740   8,363,119   8,229,097   8,288,150   8,300,161
 
Total common equity
Common stock, APIC, Retained earnings, and Treasury stock $1,555,258 $1,285,676 $1,190,258 $1,174,491 $1,155,894
Accumulated other comprehensive income 17,642   10,354   7,842   66,091   81,035
Shareholders' Equity (GAAP) 1,572,900 1,296,030 1,198,100 1,240,582 1,236,929
Intangible assets (831,403) (618,977) (480,844) (482,119) (483,478)
Deferred taxes on intangible assets 77,097   68,236   43,504   42,523   41,528
Total tangible common equity (non-GAAP) 818,594   745,289   760,760   800,986   794,979
 
Net tangible equity-to-assets ratio at quarter end
Total tangible common equity (non-GAAP) - numerator $818,594   $745,289   $760,760   $800,986   $794,979
Total tangible assets (non-GAAP) - denominator 10,129,740   8,363,119   8,229,097   8,288,150   8,300,161
Net tangible equity-to-assets ratio at quarter end (non-GAAP) 8.08%   8.91%   9.24%   9.66%   9.58%
                       
(1) Excludes gains and losses on sales of investment securities.
(2) Includes deferred tax liabilities related to certain intangible assets.
(3) After tax effect.

EN
31/07/2017

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