- Completed the acquisition of Merchants Bancshares in May, and
crossed the $10 billion asset threshold
SYRACUSE, N.Y.--(BUSINESS WIRE)--
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. |
View source version on businesswire.com: http://www.businesswire.com/news/home/20170731005272/en/
Community Bank System, Inc.
Scott A. Kingsley, 315-445-3121
EVP
& Chief Financial Officer
Source: Community Bank System, Inc.