This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
See Cramer's multi-million dollar portfolio for FREE and get his new book Get Rich Carefully! Learn More

Community Bank System Reports Solid Fourth Quarter And Full Year Operating Results

Upstate New York Branch Banking Expansion

The Company completed the acquisition and conversion of 16 HSBC branches (July 20, 2012) and three First Niagara branches (September 7, 2012) in its core Upstate New York markets in the third quarter. In total, approximately $160 million of loans and $800 million of deposits were acquired in these transactions.

Increased Cash Dividend/Stock Repurchase Authorization

In September, the Company increased its quarterly cash dividend to shareholders by 3.8%, to $0.27 per share, marking its twentieth (20 th) consecutive year of annual increases. The increase earned the Company the distinction of being one of only 14 companies to become a new member of the S&P 1500 Dividend Aristocrats Index in 2012, signifying it has raised its annual regular cash dividend payment for at least 20 consecutive years. Based upon the closing price for a share of Community Bank System, Inc. common stock of $28.49 on January 18, 2013, the $0.27 per share quarterly dividend represents an approximate annual yield of 3.8%.

In December, the Company’s Board of Directors also approved a stock repurchase program authorizing the repurchase, at the discretion of senior management, of up to 2.0 million shares of the Company’s common stock during a twelve-month period starting on January 1, 2013. The new repurchase authorization replaced an existing program which expired on December 31, 2012.

Conference Call Scheduled

Company management will conduct an investor call at 11:00 a.m. (ET) tomorrow (Wednesday) January 23, 2013 to discuss fourth quarter and full-year results. The conference call can be accessed at 1-877-551-8082 (1-904-520-5770 if outside United States and Canada). An audio recording will be available one hour after the call until March 31, 2013, and may be accessed at 1-888-284-7564 (1-904-596-3174 if outside the United States and Canada) and entering access code 2972591. Investors may also listen live via the Internet at: [ http://www.videonewswire.com/event.asp?id=91497]. The recording will be archived until January 23, 2014 and can be accessed at any point during this time at no cost.

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.

Headquartered in DeWitt, N.Y., Community Bank System, Inc. has $7.5 billion in assets and over 180 customer facilities. The Company’s banking subsidiary, Community Bank, N.A. operates across Upstate New York and Northeastern Pennsylvania, where it conducts business as First Liberty Bank & Trust. Its other subsidiaries include: Benefit Plans Administrative Services, Inc., a national employee benefits consulting and trust administration firm with offices in New York, New Jersey, Pennsylvania and Texas; the CBNA Insurance Agency, with offices in five northern New York communities; Community Investment Services, Inc., a wealth management firm delivering a wide range of financial products throughout the Company's branch network; and Nottingham Advisors, an investment management and advisory firm with offices in Buffalo, N.Y. and North Palm Beach, Florida. For more information, visit: www.communitybankna.com or www.firstlibertybank.com.

               
Summary of Financial Data
(Dollars in thousands, expect per share data)                    
Quarter Ended Year Ended
      December 31,     December 31,
Earnings     20 12     2011     2012     2011
Loan income $49,405 $50,511 $192,710 $192,981
Investment income 22,545 19,903 88,690 77,988
Total interest income 71,950 70,414 281,400 270,969
Interest expense 11,981 15,279 50,976 61,556
Net interest income 59,969 55,135 230,424 209,413
Provision for loan losses 2,666 1,593 9,108 4,736
Net interest income after provision for loan losses 57,303 53,542 221,316 204,677
Deposit service fees 12,603 11,027 46,064 42,334
Mortgage banking revenues 161 37 843 1,735
Other banking services 613 694 3,226 2,916
Wealth management services 3,449 2,831 12,876 10,697
Benefit trust, administration, consulting and actuarial fees 9,397 7,879 35,946 31,601
Investment securities and debt extinguishment gains/(losses), net 0 (69) 291 (61)
Total noninterest income 26,223 22,399 99,246 89,222
Salaries and employee benefits 29,639 27,093 112,034 102,278
Occupancy and equipment and furniture 6,665 6,089 25,799 24,502
Amortization of intangible assets 1,264 1,130 4,607 4,381
Acquisition expenses & litigation settlement 3,027 142 8,247 4,831
Other 16,304 13,383 61,070 54,380
Total operating expenses 56,899 47,837 211,757 190,372
Income before income taxes 26,627 28,104 108,805 103,527
Income taxes 7,823 9,116 31,737 30,385
Net income $18,804 $18,988 $77,068 $73,142
Basic earnings per share $0.47 $0.51 $1.95 $2.03
Diluted earnings per share     $0.47     $0.51     $1.93     $2.01
                   

Summary of Financial Data

(Dollars in thousands, except per share data)                      
2012 2011
      4th Qtr     3rd Qtr     2nd Qtr     1st Qtr 4th Qtr
Earnings                          
Loan income $49,405 $48,590 $47,077 $47,638 $50,511
Investment income 22,545 22,804 23,468 19,873 19,903
Total interest income 71,950 71,394 70,545 67,511 70,414
Interest expense 11,981 12,619 12,774 13,602 15,279
Net interest income 59,969 58,775 57,771 53,909 55,135
Provision for loan losses 2,666 2,643 2,155 1,644 1,593
Net interest income after provision for loan losses 57,303 56,132 55,616 52,265 53,542
Deposit service fees 12,603 12,057 11,035 10,369 11,027
Mortgage banking revenues 161 128 234 320 37
Other banking services 613 1,277 662 674 694
Wealth management services 3,449 3,194 3,101 3,132 2,831
Benefit trust, administration, consulting and actuarial fees 9,397 8,912 8,664 8,973 7,879
Investment securities gains/(losses), net 0 291 0 0 (69)
Total noninterest income 26,223 25,859 23,696 23,468 22,399
Salaries and employee benefits 29,639 28,126 26,844 27,425 27,093
Occupancy and equipment and furniture 6,665 6,541 6,130 6,463 6,089
Amortization of intangible assets 1,264 1,212 1,045 1,086 1,130
Acquisition expenses & litigation settlement 3,027 4,796 164 260 142
Other 16,304 15,410 15,187 14,169 13,383
Total operating expenses 56,899 56,085 49,370 49,403 47,837
Income before income taxes 26,627 25,906 29,942 26,330 28,104
Income taxes 7,823 7,539 8,871 7,504 9,116
Net income $18,804 $18,367 $21,071 $18,826 $18,988
Basic earnings per share $0.47 $0.46 $0.53 $0.49 $0.51
Diluted earnings per share     $0.47     $0.46     $0.53     $0.48 $0.51
Profitability                          
Return on assets 1.00% 0.98% 1.20% 1.14% 1.16%
Return on equity 8.20% 8.12% 9.82% 9.22% 9.96%
Return on tangible equity (3) 13.55% 13.27% 16.01% 15.59% 17.91%
Noninterest income/operating income (FTE) (1) 29.0% 28.8% 27.6% 28.8% 27.6%
Efficiency ratio (2)     58.2%     56.5%     56.1%     59.0% 57.2%
Components of Net Interest Margin (FTE)                          
Loan yield 5.16% 5.25% 5.42% 5.58% 5.80%
Cash equivalents yield 0.26% 0.26% 0.34% 0.26% 0.25%
Investment yield 3.85% 3.82% 3.97% 4.33% 4.49%
Earning asset yield 4.54% 4.54% 4.78% 4.89% 5.11%
Interest-bearing deposit rate 0.34% 0.40% 0.44% 0.56% 0.65%
Borrowing rate 3.89% 3.56% 2.85% 3.79% 4.21%
Cost of all interest-bearing funds 0.89% 0.94% 0.99% 1.13% 1.27%
Cost of funds (includes DDA) 0.74% 0.78% 0.84% 0.96% 1.08%
Net interest margin (FTE) 3.83% 3.79% 3.96% 3.96% 4.06%
Fully tax-equivalent adjustment     $4,209     $4,332     $4,335     $4,031 $3,851
                   
Summary of Financial Data
(Dollars in thousands, except per share data)                      
2012 2011
      4th Qtr     3rd Qtr     2nd Qtr     1st Qtr 4th Qtr
Average Balances                          
Loans $3,834,068 $3,708,143 $3,512,427 $3,454,240 $3,473,366
Cash equivalents 106,851 138,251 10,017 251,828 233,984
Taxable investment securities 2,035,651 2,065,121 2,091,575 1,565,215 1,495,590
Nontaxable investment securities 691,525 717,608 692,839 613,947 567,835
Total interest-earning assets 6,668,095 6,629,123 6,306,858 5,885,230 5,770,775
Total assets 7,506,371 7,426,818 7,058,473 6,618,812 6,474,722
Interest-bearing deposits 4,545,347 4,409,813 4,003,213 3,964,062 3,929,231
Borrowings 830,149 918,789 1,182,707 859,774 830,344
Total interest-bearing liabilities 5,375,496 5,328,602 5,185,920 4,823,836 4,759,575
Noninterest-bearing deposits 1,098,193 1,066,689 907,153 884,451 878,443
Shareholders' equity     912,321     900,147     862,747     821,043 756,334
Balance Sheet Data                          
Cash and cash equivalents $228,558 $287,753 $130,902 $132,055 $324,878
Investment securities 2,818,527 2,895,285 2,931,918 2,765,145 2,151,370
Loans:
Business lending 1,233,944 1,233,928 1,216,309 1,210,773 1,226,439
Consumer mortgage 1,448,415 1,390,130 1,289,155 1,245,217 1,214,621
Consumer installment - indirect 647,518 642,196 591,249 542,605 556,955
Home equity 364,225 372,493 310,555 317,716 323,840
Consumer installment - direct 171,474 173,710 154,402 144,428 149,170
Total loans 3,865,576 3,812,457 3,561,670 3,460,739 3,471,025
Allowance for loan losses 42,888 42,817 41,828 41,809 42,213
Intangible assets 387,133 388,398 358,435 359,480 360,564
Other assets 239,894 229,297 225,234 236,848 222,651
Total assets 7,496,800 7,570,373 7,166,331 6,912,458 6,488,275
Deposits:
Noninterest-bearing 1,110,994 1,098,135 944,695 911,131 894,464
Non-maturity interest-bearing 3,501,630 3,533,837 2,942,333 2,974,191 2,776,532
Time 1,015,415 1,076,657 1,023,324 1,066,685 1,124,249
Total deposits 5,628,039 5,708,629 4,910,352 4,952,007 4,795,245
Borrowings 728,061 728,116 1,157,872 910,427 728,281
Subordinated debt held by unconsolidated subsidiary trusts 102,073 102,067 102,060 102,054 102,048
Other liabilities 135,849 126,962 110,988 107,297 88,118
Total liabilities 6,594,022 6,665,774 6,281,272 6,071,785 5,713,692
Shareholders' equity 902,778 904,599 885,059 840,673 774,583
Total liabilities and shareholders' equity     7,496,800     7,570,373     7,166,331     6,912,458 6,488,275
Capital                          
Tier 1 leverage ratio 8.40% 8.32% 8.98% 9.37% 8.38%
Tangible equity/net tangible assets (3) 7.62% 7.54% 8.09% 7.70% 7.12%
Diluted weighted average common shares O/S 40,179 40,139 40,057 39,323 37,491
Period end common shares outstanding 39,626 39,571 39,472 39,439 36,986
Cash dividends declared per common share $0.27 $0.27 $0.26 $0.26 $0.26
Book value $22.78 $22.86 $22.42 $21.32 $20.94
Tangible book value (3) $13.72 $13.73 $14.00 $12.84 $11.85
Common stock price (end of period)     $27.36     $28.19     $27.12     $28.78 $27.80
                 
Summary of Financial Data
(Dollars in thousands, except per share data)                  
2012 2011
      4th Qtr     3rd Qtr     2nd Qtr     1st Qtr 4th Qtr
Asset Quality                          
Nonaccrual loans $26,318 $27,370 $28,571     $27,757 $28,285
Accruing loans 90+ days delinquent 2,748 3,349 3,437 3,889 3,090
Total nonperforming loans 29,066 30,719 32,008 31,646 31,375
Other real estate owned (OREO) 4,788 3,384 2,899 2,690 2,682
Total nonperforming assets 33,854 34,103 34,907 34,336 34,057
Net charge-offs 2,596 1,654 2,136 2,048 1,844
Allowance for loan losses/loans outstanding 1.11% 1.12% 1.17% 1.21% 1.22%
Nonperforming loans/loans outstanding 0.75% 0.81% 0.90% 0.91% 0.90%
Allowance for loan losses/nonperforming loans 148% 139% 131% 132% 135%
Net charge-offs/average loans 0.27% 0.18% 0.24% 0.24% 0.21%
Delinquent loans/ending loans 1.92% 1.79% 1.71% 1.78% 2.05%
Loan loss provision/net charge-offs 103% 160% 101% 80% 86%
Nonperforming assets/total assets     0.45%     0.45%     0.49%     0.50% 0.52%
Asset Quality (excluding loans acquired since 1/1/09)                          
Nonaccrual loans $21,938 $21,733 $22,395 $20,178 $17,585
Accruing loans 90+ days delinquent 2,356 3,038 3,070 2,700 2,878
Total nonperforming loans 24,294 24,771 25,465 22,878 20,463
Other real estate owned (OREO) 1,397 1,671 1,577 1,778 1,734
Total nonperforming assets 25,691 26,442 27,042 24,656 22,197
Net charge-offs 1,863 1,754 1,217 752 1,844
Allowance for loan losses/loans outstanding 1.21% 1.24% 1.28% 1.30% 1.36%
Nonperforming loans/loans outstanding 0.71% 0.74% 0.79% 0.74% 0.69%
Allowance for loan losses/nonperforming loans 170% 167% 161% 175% 197%
Net charge-offs/average loans 0.19% 0.21% 0.16% 0.10% 0.24%
Delinquent loans/ending loans 1.82% 1.65% 1.62% 1.61% 1.77%
Loan loss provision/net charge-offs 102% 119% 180% 37% 79%
Nonperforming assets/total assets     0.36%     0.37%     0.40%     0.38% 0.36%

 

(1)

 

Excludes gain (loss) on investment securities.

(2)

Excludes intangible amortization, acquisition expenses, litigation settlement, and gain (loss) on investment securities.

(3)

Includes deferred tax liabilities (of approximately $27.9 million at 12/31/12) generated from tax deductible goodwill.

 

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; and changes in legislation or regulatory requirements. CBU does not assume any duty to update forward-looking statements.



Stock quotes in this article: CBU 

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
DOW 16,408.54 -16.31 -0.10%
S&P 500 1,864.85 +2.54 0.14%
NASDAQ 4,095.5160 +9.2910 0.23%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs