Community Bank System, Inc. (NYSE:CBU) reported net income of $15.5
million for fourth quarter 2013, compared with $18.8 million for the
fourth quarter of 2012. As previously announced in late December 2013,
the Company sold its entire portfolio of bank and insurance trust
preferred collateralized debt obligation (CDO) securities in response to
the uncertainties created by the announcement of the final rules
implementing Section 619 of the Dodd-Frank Wall Street Reform and
Consumer Protection Act, commonly known as the “Volcker Rule.” In
conjunction with the liquidation of the trust preferred CDOs, the
Company extinguished $226.4 million of Federal Home Loan Bank (FHLB)
term advances and sold $417.6 million of Treasury securities previously
classified as “held-to-maturity.” The net impact of these actions was a
pre-tax loss of approximately $6.9 million, or $0.12 per share
after-tax, which is reflected in the Company’s fourth quarter 2013
results. Diluted earnings per share for the fourth quarter of 2013 were
$0.38, which also included $0.04 per share of acquisition expenses
related to the December purchase of eight bank branches in Northeast
Pennsylvania from Bank of America, NA. Diluted earnings per share for
the fourth quarter of 2012 were $0.47, and included $0.05 per share of
acquisition related expenses and litigation settlement charge. The
Company’s reported net income for 2013 was $78.8 million ($1.94 per
diluted share), an increase of $1.8 million or 2.3%, compared to $77.1
million ($1.93 per diluted share), reported in 2012.
Total revenue for the fourth quarter of 2013 (excluding the $6.9 million
net loss described above) was $88.9 million compared to $86.2 million
for the fourth quarter 2012, or a 3.1% improvement. Despite declining
asset yields, fourth quarter 2013 net interest income was up 1.1%,
compared to the prior year quarter, reflecting solid organic loan and
core deposit growth over the past twelve months. Banking non-interest
income increased by 6.4%, or $0.9 million, in fourth quarter 2013,
compared to the same period in 2012. Compared to the fourth quarter of
2012, fourth quarter 2013 financial services revenue grew by $1.2
million, or 9.1%, reflecting continued organic growth in both wealth
management and benefits administration services. The quarterly provision
for loan losses of $3.2 million was $0.5 million higher than the fourth
quarter of 2012, reflective of slightly higher quarterly net charge-offs
and the continuation of generally stable and favorable asset quality
metrics. Total operating expenses (excluding acquisition expenses and
litigation settlement charge that totaled $2.1 million and $3.0 million
in the fourth quarters of 2013 and 2012, respectively) of $55.2
million for the fourth quarter 2013 were up $1.3 million, or 2.4%, from
the fourth quarter of 2012.
“The positive operating momentum that we carried into 2013 extended
throughout the year, with strong organic loan growth, a substantial
increase in our non-interest revenues, responsible management of
operating expenses and continued positive asset quality performance,”
said President and Chief Executive Officer Mark E. Tryniski. “During
2013 we initiated a number of actions which position the Company for
additional opportunity, including the acquisition of eight
branch-banking locations in our Northeast Pennsylvania service area and
the execution of a productive balance sheet restructuring in the first
half of the year. In August, our Board raised the quarterly cash
dividend by 3.7% to $0.28 per share, marking the twenty-first
consecutive year of increased dividend payouts to our shareholders. In
October 2013, Community Bank System was added to the Barron’s 400 Index,
a collection of the most fundamentally sound and attractively priced
stocks from across the market. In addition, we started 2014 being
recognized as fourth best bank in the country in the annual Forbes
analysis of the 100 largest publicly traded banks, reflective of our
continued high level of financial strength and performance.”
Fourth quarter 2013 net interest income of $60.6 million increased 1.1%
compared with the prior year period. Fourth quarter interest income was
down $6.0 million compared to the prior year quarter, a result of an
$87.4 million net decrease in interest-earning assets as well as a
34-basis point decline in the earning asset yield, driven by lower
yields on both loans (down 55 basis points) and investment securities
(down 31 basis points). This was more than offset by a $6.7 million
decrease in interest expense, reflecting a $194.4 million reduction in
interest-bearing liabilities coupled with a 48-basis point decline in
the Company’s cost of interest-bearing funds. The lower cost of
interest-bearing funds was driven by significantly lower borrowing rates
resulting from the balance sheet restructuring activities completed in
the first half of the year, and also included a 13-basis point decline
in the interest-bearing deposit rate in comparison to fourth quarter
2012. During the first half of 2013, the Company completed a balance
sheet restructuring program that involved selling nearly $650 million of
longer duration investment securities and using the proceeds to retire
$502 million of Federal Home Loan Bank (FHLB) borrowings.
Fourth quarter 2013 non-interest income (excluding gains on sales of
investment securities and losses on debt extinguishments which netted to
a $6.9 million loss) of $28.2 million increased $2.0 million compared to
the prior year fourth quarter, reflecting both increased banking service
fees and growing financial services revenue. Wealth management services
revenue was up $0.5 million, or 15.5%, over fourth quarter 2012, driven
by organic growth in trust services, asset management and advisory
services, as well as a continuation of favorable market conditions.
Employee benefits administration and consulting revenues of $10.0
million increased $0.6 million, or 6.8%, from the fourth quarter of
2012, benefitting from new and expanded customer relationships, along
with positive equity market influences. Noninterest income for the year
(excluding securities gains and debt extinguishment losses which netted
to a $6.6 million loss) grew to $108.7 million (31% of total revenue),
an increase of $9.8 million, or 9.9%, compared to full year 2012.
Operating expenses (excluding acquisition expenses and litigation
settlement charge that totaled $2.1 million and $3.0 million in the
fourth quarters of 2013 and 2012, respectively) of $55.2 million for the
quarter were $1.3 million higher, or 2.4%, than the fourth quarter of
2012. Operating expenses (excluding acquisition expenses and litigation
settlement charge that totaled $2.2 million and $8.2 million in 2013 and
2012, respectively) were $219.1 million for the full year, an increase
of $15.6 million, or 7.6% compared with 2012, reflective of acquired and
organic growth initiatives and investments in technology infrastructure
over the past two years.
The effective income tax rates for the fourth quarter and full year 2013
were 28.2% and 29.0% respectively, compared to 29.2% for the fourth
quarter and full year 2012.
Financial Position
Average interest-earning assets for the fourth quarter of 2013 were $6.6
billion, a decrease of $87.4 million, or 1.3%, compared to the fourth
quarter of 2012, a net result of the balance sheet restructuring
activities that were undertaken in the first half of 2013 and partially
offset by solid organic loan growth over the past twelve months. Fourth
quarter average earning assets increased $324.6 million from the second
quarter of 2013, with average loans growing $169.5 million and average
investments and cash equivalents increasing $155.1 million. Loans
increased $243.5 million, or 6.3%, over the prior year end, reflecting
organic growth in both the Bank’s consumer and business lending
portfolios. Total deposits of $5.9 billion at year-end increased by
$268.0 million, or 4.8%, from December 31, 2012 as a result of organic
core deposit growth and the Company’s acquisition of eight branches from
Bank of America late in the fourth quarter of 2013. The Company’s Tier 1
leverage ratio of 9.29% on December 31, 2013 was up 89 basis points
compared with the fourth quarter of 2012. In addition, the tangible
equity to net tangible assets ratio of 7.68% at December 31, 2013 was up
6 basis points compared to December 31, 2012, reflective of continued
strong capital generation results.
During the first half of 2013, the Company initiated and completed a
balance sheet restructuring that involved selling $648.7 million of
investment securities with realized gains of $63.8 million, and
extinguishing $501.6 million of FHLB borrowings, incurring $63.5 million
of early extinguishment costs. The Company’s balance sheet was reduced
by approximately 7% through the first half of 2013 as a result of this
planned initiative. Although these transactions were essentially neutral
to earnings as well as total capital for this period, more than $35
million of incremental regulatory (Tier 1) capital flexibility was
created.
The Company announced on December 31, 2013, that it sold its entire
portfolio of bank and insurance trust preferred CDO securities because
of the uncertainties created by the mid-December announcement of the
final rules implementing the Volcker Rule. In addition to the
liquidation of the trust preferred CDOs, the Company extinguished $226.4
million of FHLB term advances and sold $417.6 million of Treasury
securities previously classified as “held-to-maturity.” As previously
noted, the impact of these actions was a pre-tax loss of approximately
$6.9 million, or $0.12 per share. The $6.9 million pre-tax loss was
comprised of $32.4 million of gains on the Treasury securities, $15.5
million of losses on the trust preferred CDOs, and a $23.8 million
charge from the early extinguishment of the debt. The Company also
reinvested the net cash proceeds of $246 million created from these
transactions into Treasury securities with similar blended durations to
the assets sold in order to mitigate the net interest income impact of
the security sales and debt extinguishment. As a result of the
securities sold from the “held-to- maturity” classification, the
remaining unsold securities within the held-to-maturity classification
were transferred to the “available-for-sale” classification prior to
December 31, 2013. In addition, as a result of the transaction, the
Company will not be able to use the held-to-maturity classification for
the foreseeable future.
Asset Quality
The Company’s asset quality metrics remained substantially better than
comparative industry averages throughout 2013 and continued to
demonstrate the long-term effectiveness of the Company’s disciplined
risk management and underwriting standards. Net charge-offs were $2.9
million for the fourth quarter, compared to $2.6 million for the fourth
quarter of 2012 and $1.5 million for the third quarter of 2013. Full
year 2013 net charge-offs of $6.6 million, or 0.17% of total loans, were
down $1.9 million, or 22% from 2012. Nonperforming loans as a percentage
of total loans were 0.54% at December 31, 2013, down from 0.61% at
September 30, 2013, and 0.75% at December 31, 2012. The total
delinquency ratio of 1.49% at the end of the fourth quarter was down 43
basis points from fourth quarter 2012 and consistent with the ratio at
the end of the third quarter of 2013. The fourth quarter provision for
loan losses of $3.2 million was 8% above net charge-offs for the
quarter. The allowance for loan losses to nonperforming loans was 201%
at December 31, 2013, compared to 147% at December 31, 2012, and 181% as
of September 30, 2013.
Cash Dividend Increased for 21st Consecutive
Year / Stock Repurchase Authorization
In the third quarter, the Company increased its quarterly cash dividend
to shareholders by 3.7%, to $0.28 per share, marking the twenty-first
consecutive year that it’s been increased. The Company views the growth
of cash dividends over time as an important component of its commitment
to provide consistent and favorable long-term returns to shareholders.
The Company’s Board of Directors also approved a stock repurchase
program authorizing the repurchase of up to 2,000,000 shares of the
Company’s common stock during a twelve-month period starting January 1,
2014. Such repurchases may be made at the discretion of senior
management depending 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. The new repurchase
authorization replaces the previous program which expired on December
31, 2013.
Pennsylvania Branch Acquisition Completed
On December 13, 2013, the Company completed its acquisition of eight
branches from Bank of America, NA as previously announced. As part of
the transaction, Community Bank acquired over $303 million in customer
deposit accounts and approximately $0.9 million of net performing loans
and paid a premium of approximately $7.3 million. The acquired branches
were converted and opened as Community Bank branches on December 14,
2013 and are located across Community Bank’s Northeast Pennsylvania
markets, with five of the acquired branches located in Luzerne County,
two located in Carbon County and one located in Lackawanna County.
Benefits Administration Acquisition
During the fourth quarter, the Company announced that its subsidiary,
Benefit Plans Administrative Services, Inc. (BPAS), reached an agreement
to acquire a professional services practice from EBS-RMSCO, Inc., a
subsidiary of The Lifetime Healthcare Companies. This professional
services practice, which provides actuarial valuation and consulting
services to clients who sponsor pension and post-retirement medical and
welfare plans, enhances the Company’s participation in the Western New
York marketplace and is expected to add incremental revenue of
approximately $1.5 million annually. The transaction was completed as
planned on January 1, 2014.
Conference Call Scheduled
Company management will conduct an investor call at 11:00 a.m. (ET)
tomorrow (Wednesday, January 22, 2014) to discuss fourth quarter and
year end 2013 results. The conference call can be accessed at
888-576-4398 (1-719-325-2455 if outside United States and Canada) using
the conference ID code 7882237. Investors may also listen live via the
Internet at: http://www.videonewswire.com/event.asp?id=97553.
The recording will be archived until January 22, 2015 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 more than
$7.0 billion in assets and over 190 customer facilities. The Company’s
banking subsidiary, Community Bank, N.A. operates across Upstate New
York and Northeastern Pennsylvania. Its other subsidiaries include:
Benefit Plans Administrative Services, Inc., a national employee
benefits consulting and trust administration firm; 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. For
more information, visit www.communitybankna.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; and changes
in legislation or regulatory requirements. 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, expect per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
|
Year-to-Date
|
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
December 31,
|
|
|
December 31,
|
|
Earnings
|
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
Loan income
|
|
|
$47,061
|
|
|
$49,405
|
|
|
$188,197
|
|
|
$192,710
|
|
Investment income
|
|
|
18,901
|
|
|
22,545
|
|
|
75,962
|
|
|
88,690
|
|
Total interest income
|
|
|
65,962
|
|
|
71,950
|
|
|
264,159
|
|
|
281,400
|
|
Interest expense
|
|
|
5,326
|
|
|
11,981
|
|
|
26,065
|
|
|
50,976
|
|
Net interest income
|
|
|
60,636
|
|
|
59,969
|
|
|
238,094
|
|
|
230,424
|
|
Provision for loan losses
|
|
|
3,185
|
|
|
2,666
|
|
|
7,992
|
|
|
9,108
|
|
Net interest income after provision for loan losses
|
|
|
57,451
|
|
|
57,303
|
|
|
230,102
|
|
|
221,316
|
|
Deposit service fees
|
|
|
12,714
|
|
|
12,603
|
|
|
49,357
|
|
|
46,064
|
|
Mortgage banking revenues
|
|
|
562
|
|
|
161
|
|
|
1,673
|
|
|
843
|
|
Other banking services
|
|
|
954
|
|
|
613
|
|
|
3,572
|
|
|
3,226
|
|
Wealth management services
|
|
|
3,984
|
|
|
3,449
|
|
|
15,550
|
|
|
12,876
|
|
Benefit trust, administration, consulting and actuarial fees
|
|
|
10,032
|
|
|
9,397
|
|
|
38,596
|
|
|
35,946
|
|
Gain on sales of investment securities
|
|
|
16,969
|
|
|
0
|
|
|
80,768
|
|
|
291
|
|
Loss on debt extinguishments
|
|
|
(23,836)
|
|
|
0
|
|
|
(87,336)
|
|
|
0
|
|
Total noninterest income
|
|
|
21,379
|
|
|
26,223
|
|
|
102,180
|
|
|
99,246
|
|
Salaries and employee benefits
|
|
|
30,412
|
|
|
29,639
|
|
|
121,629
|
|
|
112,034
|
|
Occupancy and equipment and furniture
|
|
|
6,782
|
|
|
6,665
|
|
|
27,045
|
|
|
25,799
|
|
Amortization of intangible assets
|
|
|
1,061
|
|
|
1,264
|
|
|
4,469
|
|
|
4,607
|
|
Acquisition expenses
|
|
|
2,105
|
|
|
527
|
|
|
2,176
|
|
|
5,747
|
|
Other
|
|
|
16,923
|
|
|
18,804
|
|
|
65,936
|
|
|
63,570
|
|
Total operating expenses
|
|
|
57,283
|
|
|
56,899
|
|
|
221,255
|
|
|
211,757
|
|
Income before income taxes
|
|
|
21,547
|
|
|
26,627
|
|
|
111,027
|
|
|
108,805
|
|
Income taxes
|
|
|
6,070
|
|
|
7,823
|
|
|
32,198
|
|
|
31,737
|
|
Net income
|
|
|
$15,477
|
|
|
$18,804
|
|
|
$78,829
|
|
|
$77,068
|
|
Basic earnings per share
|
|
|
$0.38
|
|
|
$0.47
|
|
|
$1.96
|
|
|
$1.95
|
|
Diluted earnings per share
|
|
|
$0.38
|
|
|
$0.47
|
|
|
$1.94
|
|
|
$1.93
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary of Financial Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
4th Qtr
|
|
|
3rd Qtr
|
|
|
2nd Qtr
|
|
|
1st Qtr
|
|
|
4th Qtr
|
|
Earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan income
|
|
|
$47,061
|
|
|
$47,606
|
|
|
$46,412
|
|
|
$47,118
|
|
|
$49,405
|
|
Investment income
|
|
|
18,901
|
|
|
18,526
|
|
|
17,728
|
|
|
20,807
|
|
|
22,545
|
|
Total interest income
|
|
|
65,962
|
|
|
66,132
|
|
|
64,140
|
|
|
67,925
|
|
|
71,950
|
|
Interest expense
|
|
|
5,326
|
|
|
5,531
|
|
|
5,708
|
|
|
9,500
|
|
|
11,981
|
|
Net interest income
|
|
|
60,636
|
|
|
60,601
|
|
|
58,432
|
|
|
58,425
|
|
|
59,969
|
|
Provision for loan losses
|
|
|
3,185
|
|
|
2,093
|
|
|
1,321
|
|
|
1,393
|
|
|
2,666
|
|
Net interest income after provision for loan losses
|
|
|
57,451
|
|
|
58,508
|
|
|
57,111
|
|
|
57,032
|
|
|
57,303
|
|
Deposit service fees
|
|
|
12,714
|
|
|
12,703
|
|
|
12,345
|
|
|
11,595
|
|
|
12,603
|
|
Mortgage banking revenues
|
|
|
562
|
|
|
599
|
|
|
341
|
|
|
171
|
|
|
161
|
|
Other banking services
|
|
|
954
|
|
|
1,072
|
|
|
679
|
|
|
867
|
|
|
613
|
|
Wealth management services
|
|
|
3,984
|
|
|
3,823
|
|
|
4,045
|
|
|
3,698
|
|
|
3,449
|
|
Benefit trust, administration, consulting and actuarial fees
|
|
|
10,032
|
|
|
9,397
|
|
|
9,397
|
|
|
9,770
|
|
|
9,397
|
|
Gain on sales of investment securities
|
|
|
16,969
|
|
|
0
|
|
|
16,008
|
|
|
47,791
|
|
|
0
|
|
Loss on debt extinguishments
|
|
|
(23,836)
|
|
|
0
|
|
|
(15,717)
|
|
|
(47,783)
|
|
|
0
|
|
Total noninterest income
|
|
|
21,379
|
|
|
27,594
|
|
|
27,098
|
|
|
26,109
|
|
|
26,223
|
|
Salaries and employee benefits
|
|
|
30,412
|
|
|
30,448
|
|
|
30,286
|
|
|
30,483
|
|
|
29,639
|
|
Occupancy and equipment
|
|
|
6,782
|
|
|
6,448
|
|
|
6,750
|
|
|
7,065
|
|
|
6,665
|
|
Amortization of intangible assets
|
|
|
1,061
|
|
|
1,089
|
|
|
1,140
|
|
|
1,179
|
|
|
1,264
|
|
Acquisition expenses
|
|
|
2,105
|
|
|
71
|
|
|
0
|
|
|
0
|
|
|
527
|
|
Other
|
|
|
16,923
|
|
|
16,988
|
|
|
16,200
|
|
|
15,825
|
|
|
18,804
|
|
Total operating expenses
|
|
|
57,283
|
|
|
55,044
|
|
|
54,376
|
|
|
54,552
|
|
|
56,899
|
|
Income before income taxes
|
|
|
21,547
|
|
|
31,058
|
|
|
29,833
|
|
|
28,589
|
|
|
26,627
|
|
Income taxes
|
|
|
6,070
|
|
|
9,069
|
|
|
8,711
|
|
|
8,348
|
|
|
7,823
|
|
Net income
|
|
|
$15,477
|
|
|
21,989
|
|
|
21,122
|
|
|
20,241
|
|
|
18,804
|
|
Basic earnings per share
|
|
|
$0.38
|
|
|
$0.55
|
|
|
$0.53
|
|
|
$0.51
|
|
|
$0.47
|
|
Diluted earnings per share
|
|
|
$0.38
|
|
|
$0.54
|
|
|
$0.52
|
|
|
$0.50
|
|
|
$0.47
|
|
Profitability
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on assets
|
|
|
0.84%
|
|
|
1.22%
|
|
|
1.21%
|
|
|
1.11%
|
|
|
1.00%
|
|
Return on equity
|
|
|
7.04%
|
|
|
10.26%
|
|
|
9.70%
|
|
|
9.18%
|
|
|
8.20%
|
|
Return on tangible equity(3)
|
|
|
11.78%
|
|
|
17.57%
|
|
|
16.38%
|
|
|
15.32%
|
|
|
13.55%
|
|
Noninterest income/operating income (FTE) (1)
|
|
|
30.5%
|
|
|
30.0%
|
|
|
30.2%
|
|
|
29.5%
|
|
|
29.0%
|
|
Efficiency ratio (2)
|
|
|
58.5%
|
|
|
58.6%
|
|
|
59.9%
|
|
|
60.3%
|
|
|
58.2%
|
|
Components of Net Interest Margin (FTE)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan yield
|
|
|
4.61%
|
|
|
4.76%
|
|
|
4.79%
|
|
|
4.98%
|
|
|
5.16%
|
|
Cash equivalents yield
|
|
|
0.22%
|
|
|
0.22%
|
|
|
0.26%
|
|
|
0.26%
|
|
|
0.26%
|
|
Investment yield
|
|
|
3.54%
|
|
|
3.52%
|
|
|
3.83%
|
|
|
3.79%
|
|
|
3.85%
|
|
Earning asset yield
|
|
|
4.20%
|
|
|
4.28%
|
|
|
4.35%
|
|
|
4.44%
|
|
|
4.54%
|
|
Interest-bearing deposit rate
|
|
|
0.21%
|
|
|
0.22%
|
|
|
0.24%
|
|
|
0.28%
|
|
|
0.34%
|
|
Borrowing rate
|
|
|
1.86%
|
|
|
2.02%
|
|
|
3.36%
|
|
|
3.76%
|
|
|
3.89%
|
|
Cost of all interest-bearing funds
|
|
|
0.41%
|
|
|
0.43%
|
|
|
0.46%
|
|
|
0.73%
|
|
|
0.89%
|
|
Cost of funds (includes DDA)
|
|
|
0.33%
|
|
|
0.35%
|
|
|
0.38%
|
|
|
0.61%
|
|
|
0.74%
|
|
Net interest margin (FTE)
|
|
|
3.88%
|
|
|
3.94%
|
|
|
3.98%
|
|
|
3.86%
|
|
|
3.83%
|
|
Fully tax-equivalent adjustment
|
|
|
$3,666
|
|
|
$3,728
|
|
|
$3,644
|
|
|
$4,022
|
|
|
$4,209
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary of Financial Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
4th Qtr
|
|
|
3rd Qtr
|
|
|
2nd Qtr
|
|
|
1st Qtr
|
|
|
4th Qtr
|
|
Average Balances
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
|
$4,069,204
|
|
|
$3,985,755
|
|
|
$3,899,744
|
|
|
$3,860,722
|
|
|
$3,834,068
|
|
Cash equivalents
|
|
|
11,085
|
|
|
8,644
|
|
|
148,188
|
|
|
83,812
|
|
|
106,851
|
|
Taxable investment securities
|
|
|
1,861,206
|
|
|
1,833,355
|
|
|
1,565,756
|
|
|
1,965,073
|
|
|
2,035,651
|
|
Nontaxable investment securities
|
|
|
639,199
|
|
|
644,728
|
|
|
642,424
|
|
|
655,694
|
|
|
691,525
|
|
Total interest-earning assets
|
|
|
6,580,694
|
|
|
6,472,482
|
|
|
6,256,112
|
|
|
6,565,301
|
|
|
6,668,095
|
|
Total assets
|
|
|
7,278,167
|
|
|
7,154,796
|
|
|
7,003,823
|
|
|
7,368,906
|
|
|
7,506,371
|
|
Interest-bearing deposits
|
|
|
4,546,591
|
|
|
4,511,199
|
|
|
4,581,206
|
|
|
4,581,130
|
|
|
4,545,347
|
|
Borrowings
|
|
|
634,472
|
|
|
589,065
|
|
|
358,627
|
|
|
686,483
|
|
|
830,149
|
|
Total interest-bearing liabilities
|
|
|
5,181,063
|
|
|
5,100,264
|
|
|
4,939,833
|
|
|
5,267,613
|
|
|
5,375,496
|
|
Noninterest-bearing deposits
|
|
|
1,149,873
|
|
|
1,138,039
|
|
|
1,095,774
|
|
|
1,095,256
|
|
|
1,098,193
|
|
Shareholders' equity
|
|
|
872,567
|
|
|
850,238
|
|
|
873,108
|
|
|
893,746
|
|
|
912,321
|
|
Balance Sheet Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$149,647
|
|
|
$174,205
|
|
|
$148,573
|
|
|
$330,298
|
|
|
$228,558
|
|
Investment securities
|
|
|
2,218,725
|
|
|
2,518,574
|
|
|
2,366,512
|
|
|
2,448,120
|
|
|
2,818,527
|
|
Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business lending
|
|
|
1,260,364
|
|
|
1,214,796
|
|
|
1,225,671
|
|
|
1,222,835
|
|
|
1,233,944
|
|
Consumer mortgage
|
|
|
1,582,058
|
|
|
1,570,607
|
|
|
1,527,341
|
|
|
1,480,192
|
|
|
1,448,415
|
|
Consumer indirect
|
|
|
740,002
|
|
|
713,310
|
|
|
663,924
|
|
|
639,560
|
|
|
647,518
|
|
Home equity
|
|
|
346,520
|
|
|
348,246
|
|
|
347,335
|
|
|
353,365
|
|
|
364,225
|
|
Consumer direct
|
|
|
180,139
|
|
|
178,496
|
|
|
171,727
|
|
|
165,649
|
|
|
171,474
|
|
Total loans
|
|
|
4,109,083
|
|
|
4,025,455
|
|
|
3,935,998
|
|
|
3,861,601
|
|
|
3,865,576
|
|
Allowance for loan losses
|
|
|
44,319
|
|
|
44,083
|
|
|
43,473
|
|
|
42,913
|
|
|
42,888
|
|
Intangible assets, net
|
|
|
390,499
|
|
|
383,735
|
|
|
384,815
|
|
|
385,954
|
|
|
387,134
|
|
Other assets
|
|
|
272,229
|
|
|
244,131
|
|
|
228,291
|
|
|
238,013
|
|
|
239,893
|
|
Total assets
|
|
|
7,095,864
|
|
|
7,302,017
|
|
|
7,020,716
|
|
|
7,221,073
|
|
|
7,496,800
|
|
Deposits:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
|
|
|
1,203,346
|
|
|
1,158,013
|
|
|
1,120,683
|
|
|
1,115,417
|
|
|
1,110,994
|
|
Non-maturity interest-bearing
|
|
|
3,766,145
|
|
|
3,630,684
|
|
|
3,608,829
|
|
|
3,678,905
|
|
|
3,501,630
|
|
Time
|
|
|
926,553
|
|
|
898,636
|
|
|
940,618
|
|
|
980,502
|
|
|
1,015,415
|
|
Total deposits
|
|
|
5,896,044
|
|
|
5,687,333
|
|
|
5,670,130
|
|
|
5,774,824
|
|
|
5,628,039
|
|
Borrowings
|
|
|
141,913
|
|
|
567,116
|
|
|
322,319
|
|
|
361,422
|
|
|
728,061
|
|
Subordinated debt held by unconsolidated subsidiary trusts
|
|
|
102,097
|
|
|
102,091
|
|
|
102,085
|
|
|
102,079
|
|
|
102,073
|
|
Accrued interest and other liabilities
|
|
|
79,998
|
|
|
79,798
|
|
|
76,151
|
|
|
105,454
|
|
|
135,849
|
|
Total liabilities
|
|
|
6,220,052
|
|
|
6,436,338
|
|
|
6,170,685
|
|
|
6,343,779
|
|
|
6,594,022
|
|
Shareholders' equity
|
|
|
875,812
|
|
|
865,679
|
|
|
850,031
|
|
|
877,294
|
|
|
902,778
|
|
Total liabilities and shareholders' equity
|
|
|
7,095,864
|
|
|
7,302,017
|
|
|
7,020,716
|
|
|
7,221,073
|
|
|
7,496,800
|
|
Capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 leverage ratio
|
|
|
9.29%
|
|
|
9.39%
|
|
|
9.43%
|
|
|
8.78%
|
|
|
8.40%
|
|
Tangible equity/net tangible assets (3)
|
|
|
7.68%
|
|
|
7.38%
|
|
|
7.43%
|
|
|
7.58%
|
|
|
7.62%
|
|
Diluted weighted average common shares O/S
|
|
|
41,061
|
|
|
40,850
|
|
|
40,558
|
|
|
40,321
|
|
|
40,179
|
|
Period end common shares outstanding
|
|
|
40,431
|
|
|
40,296
|
|
|
40,099
|
|
|
39,989
|
|
|
39,626
|
|
Cash dividends declared per common share
|
|
|
$0.28
|
|
|
$0.28
|
|
|
$0.27
|
|
|
$0.27
|
|
|
$0.27
|
|
Book value
|
|
|
$21.66
|
|
|
$21.48
|
|
|
$21.20
|
|
|
$21.94
|
|
|
$22.78
|
|
Tangible book value(3)
|
|
|
$12.80
|
|
|
$12.73
|
|
|
$12.35
|
|
|
$13.01
|
|
|
$13.72
|
|
Common stock price (end of period)
|
|
|
$39.68
|
|
|
$34.12
|
|
|
$30.85
|
|
|
$29.63
|
|
|
$27.36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary of Financial Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
4th Qtr
|
|
|
3rd Qtr
|
|
|
2nd Qtr
|
|
|
1st Qtr
|
|
|
4th Qtr
|
|
Asset Quality
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual loans
|
|
|
$19,474
|
|
|
$21,713
|
|
|
$22,997
|
|
|
$24,806
|
|
|
$26,360
|
|
Accruing loans 90+ days delinquent
|
|
|
2,554
|
|
|
2,650
|
|
|
1,439
|
|
|
2,560
|
|
|
2,748
|
|
Total nonperforming loans
|
|
|
22,028
|
|
|
24,363
|
|
|
24,436
|
|
|
27,366
|
|
|
29,108
|
|
Other real estate owned (OREO)
|
|
|
5,060
|
|
|
5,218
|
|
|
5,066
|
|
|
6,838
|
|
|
4,788
|
|
Total nonperforming assets
|
|
|
27,088
|
|
|
29,581
|
|
|
29,502
|
|
|
34,204
|
|
|
33,896
|
|
Net charge-offs
|
|
|
2,949
|
|
|
1,483
|
|
|
761
|
|
|
1,368
|
|
|
2,596
|
|
Allowance for loan losses/loans outstanding
|
|
|
1.08%
|
|
|
1.10%
|
|
|
1.10%
|
|
|
1.11%
|
|
|
1.11%
|
|
Nonperforming loans/loans outstanding
|
|
|
0.54%
|
|
|
0.61%
|
|
|
0.62%
|
|
|
0.71%
|
|
|
0.75%
|
|
Allowance for loan losses/nonperforming loans
|
|
|
201%
|
|
|
181%
|
|
|
178%
|
|
|
157%
|
|
|
147%
|
|
Net charge-offs/average loans
|
|
|
0.29%
|
|
|
0.14%
|
|
|
0.08%
|
|
|
0.14%
|
|
|
0.27%
|
|
Delinquent loans/ending loans
|
|
|
1.49%
|
|
|
1.48%
|
|
|
1.50%
|
|
|
1.55%
|
|
|
1.92%
|
|
Loan loss provision/net charge-offs
|
|
|
108%
|
|
|
147%
|
|
|
173%
|
|
|
102%
|
|
|
103%
|
|
Nonperforming assets/total assets
|
|
|
0.38%
|
|
|
0.41%
|
|
|
0.42%
|
|
|
0.47%
|
|
|
0.45%
|
|
Asset Quality (excluding loans acquired since 1/1/09)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual loans
|
|
|
$16,066
|
|
|
$17,365
|
|
|
$18,272
|
|
|
$19,756
|
|
|
$21,928
|
|
Accruing loans 90+ days delinquent
|
|
|
2,418
|
|
|
2,471
|
|
|
1,349
|
|
|
2,164
|
|
|
2,355
|
|
Total nonperforming loans
|
|
|
18,484
|
|
|
19,836
|
|
|
19,621
|
|
|
21,920
|
|
|
24,283
|
|
Other real estate owned (OREO)
|
|
|
2,832
|
|
|
2,767
|
|
|
2,963
|
|
|
3,844
|
|
|
1,397
|
|
Total nonperforming assets
|
|
|
21,316
|
|
|
22,603
|
|
|
22,584
|
|
|
25,764
|
|
|
25,680
|
|
Net charge-offs
|
|
|
1,956
|
|
|
1,583
|
|
|
604
|
|
|
1,102
|
|
|
1,863
|
|
Allowance for loan losses/loans outstanding
|
|
|
1.15%
|
|
|
1.16%
|
|
|
1.19%
|
|
|
1.21%
|
|
|
1.21%
|
|
Nonperforming loans/loans outstanding
|
|
|
0.49%
|
|
|
0.54%
|
|
|
0.55%
|
|
|
0.64%
|
|
|
0.71%
|
|
Allowance for loan losses/nonperforming loans
|
|
|
234%
|
|
|
215%
|
|
|
215%
|
|
|
190%
|
|
|
171%
|
|
Net charge-offs/average loans
|
|
|
0.21%
|
|
|
0.17%
|
|
|
0.07%
|
|
|
0.13%
|
|
|
0.19%
|
|
Delinquent loans/ending loans
|
|
|
1.44%
|
|
|
1.45%
|
|
|
1.44%
|
|
|
1.48%
|
|
|
1.82%
|
|
Loan loss provision/net charge-offs
|
|
|
130%
|
|
|
126%
|
|
|
210%
|
|
|
113%
|
|
|
102%
|
|
Nonperforming assets/total assets
|
|
|
0.32%
|
|
|
0.33%
|
|
|
0.34%
|
|
|
0.38%
|
|
|
0.36%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Excludes gains and losses on sales of investment securities and
debt prepayments.
|
|
(2)
|
|
Excludes intangible amortization, acquisition expenses, litigation
settlement charge, gains and losses on sales of investment
securities and losses on debt extinguishments.
|
|
(3)
|
|
Includes deferred tax liabilities (of approximately $32.3 million
at 12/31/13) 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.
Copyright Business Wire 2014