Community Bank System, Inc. (NYSE: CBU) reported third quarter 2011 net income of $20.0 million ($0.54 per share), an increase of 15.9% over the $17.3 million reported for the third quarter of 2010. The third quarter’s record results included $0.4 million ($0.01 per share) of acquisition expenses related to the Company’s purchase of The Wilber Corporation, completed in early April. 2011 year-to-date earnings of $54.2 million, or $1.50 per share, include $4.7 million ($0.09 per share, after-tax) of acquisition expenses, and were up 14.2% over the first nine months of 2010.
Total revenue for the third quarter of 2011 was $77.8 million, an increase of $8.6 million, or 12.4%, over the third quarter of last year. The higher revenue was a result of a 17.8% increase in average earning assets, principally from the Wilber acquisition, offset slightly by a four-basis point decline in the Company’s net interest margin to 4.04%. The quarterly provision for loan losses of $1.0 million was $0.4 million lower than the third quarter of 2010, reflective of lower net charge-offs and the continuation of generally stable and favorable asset quality metrics. Total operating expenses were $48.1 million for the quarter, including $0.4 million of acquisition expenses related to the Wilber transaction. Recurring operating expenses of $47.7 million (excluding acquisition expenses and special charges) for the quarter were $3.4 million, or 7.7%, higher than the third quarter of 2010, primarily reflective of the additional operating costs associated with the Wilber acquisition.
“Our strong earnings momentum continued through the third quarter as we achieved another quarter of record earnings,” said President and Chief Executive Officer Mark E. Tryniski. “Despite the challenging operating environment, we remain positioned for a strong finish to 2011 and an equally strong start to the new year. We remain very pleased with the performance of our new Central New York region (the former Wilber National Bank branches) and the response of our customers to the availability of enhanced product offerings. The combination of organic consumer loan and core deposit growth, focused expense management and excellent asset quality metrics, continue to provide favorable bottom-line results. With third quarter net charge-offs of $1.1 million, or 0.13% of average loans, and nonperforming loans to total loans of 0.54%, we continue to believe that the quality of our loan portfolios will remain a significant operating strength.”
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