Community Bank System’s first-quarter profit jumps

DeWITT — Community Bank System, Inc. (NYSE: CBU) reported record first-quarter net income of $40.1 million, up 53 percent from $26.3 million in the year-ago period. Earnings per share (EPS) soared 37 percent to 78 cents from 57 cents in the same period.

A pair of acquisitions the banking company made last year and lower taxes resulting from the federal tax-cut bill played a big role in Community’s profit rise.

“We’re very pleased with this quarter’s results and the continuation of our earnings acceleration, due principally to the strategic deployment of capital last year with the NRS and Merchants Bancshares transactions,” Community Bank CEO Mark E. Tryniski said in the company’s earnings report. “In addition, our fee-based businesses continue to grow both revenue and margin, contributing significantly to earnings and cash flow. EPS growth of 30 percent over last year, excluding acquisition expenses, was also supported by a lower effective tax rate that contributed approximately one-fifth of that improvement. We are very well positioned for the remainder of the year.”

Community Bank posted total revenue of $142.1 million in the first quarter, up 27 percent from the prior-year quarter, and included the results from both the Merchants Bancshares and NRS (Northeast Retirement Services, Inc.) acquisitions completed in the first half of last year. Merchants Bancshares was a banking company serving Vermont and western Massachusetts and NRS was a provider of benefit-plan accounting, transfer agency, fund administration, trust, and retirement-plan services.

Community Bank’s higher revenue resulted from a 21.5 percent increase in average earning assets and continued growth in noninterest income, as well as improvement in the banking company’s net interest margin from the prior-year quarter. 

A combination of acquired and organic growth generated a 30 percent jump in Community’s wealth management, insurance, and employee-benefit services revenue compared to the prior-year quarter, according to the earnings report. Deposit service fees increased 30 percent year-over-year, primarily the result of the addition of Merchants, as well as increased debit card-related revenue. 

Community Bank produced first-quarter net interest income of $84.6 million, up 26 percent from the first quarter of 2017, and included the impact of the Merchants Bancshares acquisition. 

Wealth management and insurance-services revenue rose 25 percent to $14.1 million in the first quarter, compared to a year ago, driven by both acquired and organic growth, Community Bank reported. Employee-benefit services revenue increased by 33 percent to $23 million, primarily attributable to the NRS acquisition.

Excluding acquisition expenses, Community Bank’s first quarter 2018 operating expenses of $86.3 million, which included a full quarter of operating activities from both Merchants and NRS, increased by $14.5 million, or 

20 percent, over the first quarter of 2017. Salaries and employee benefits increased by $9 million, or 21 percent, and included employees added from the two acquisitions, as well as annual merit and performance-based increases. 

All other operating expenses increased 19 percent year-over-year, and reflected the occupancy, equipment, and other operating costs of both Merchants and NRS.

Community Bank said its effective tax rate for the first quarter of 2018 was 23 percent, down from 27.4 percent in the first quarter of last year — boosting earnings by 4 cents per share. That reflected the lower federal tax rate that resulted from the Tax Cut and Jobs Act passed in the fourth quarter of 2017. 

Community Bank System has more than 230 branches across upstate New York, northeastern Pennsylvania, Vermont, and western Massachusetts. Headquartered in DeWitt, the banking company has more than $10 billion in assets.

DeWITT — Community Bank System, Inc. (NYSE: CBU) reported record first-quarter net income of $40.1 million, up 53 percent from $26.3 million in the year-ago period. Earnings per share (EPS) soared 37 percent to 78 cents from 57 cents in the same period.

A pair of acquisitions the banking company made last year and lower taxes resulting from the federal tax-cut bill played a big role in Community’s profit rise.

“We’re very pleased with this quarter’s results and the continuation of our earnings acceleration, due principally to the strategic deployment of capital last year with the NRS and Merchants Bancshares transactions,” Community Bank CEO Mark E. Tryniski said in the company’s earnings report. “In addition, our fee-based businesses continue to grow both revenue and margin, contributing significantly to earnings and cash flow. EPS growth of 30 percent over last year, excluding acquisition expenses, was also supported by a lower effective tax rate that contributed approximately one-fifth of that improvement. We are very well positioned for the remainder of the year.”

Community Bank posted total revenue of $142.1 million in the first quarter, up 27 percent from the prior-year quarter, and included the results from both the Merchants Bancshares and NRS (Northeast Retirement Services, Inc.) acquisitions completed in the first half of last year. Merchants Bancshares was a banking company serving Vermont and western Massachusetts and NRS was a provider of benefit-plan accounting, transfer agency, fund administration, trust, and retirement-plan services.

Community Bank’s higher revenue resulted from a 21.5 percent increase in average earning assets and continued growth in noninterest income, as well as improvement in the banking company’s net interest margin from the prior-year quarter. 

A combination of acquired and organic growth generated a 30 percent jump in Community’s wealth management, insurance, and employee-benefit services revenue compared to the prior-year quarter, according to the earnings report. Deposit service fees increased 30 percent year-over-year, primarily the result of the addition of Merchants, as well as increased debit card-related revenue. 

Community Bank produced first-quarter net interest income of $84.6 million, up 26 percent from the first quarter of 2017, and included the impact of the Merchants Bancshares acquisition. 

Wealth management and insurance-services revenue rose 25 percent to $14.1 million in the first quarter, compared to a year ago, driven by both acquired and organic growth, Community Bank reported. Employee-benefit services revenue increased by 33 percent to $23 million, primarily attributable to the NRS acquisition.

Excluding acquisition expenses, Community Bank’s first quarter 2018 operating expenses of $86.3 million, which included a full quarter of operating activities from both Merchants and NRS, increased by $14.5 million, or 

20 percent, over the first quarter of 2017. Salaries and employee benefits increased by $9 million, or 21 percent, and included employees added from the two acquisitions, as well as annual merit and performance-based increases. 

All other operating expenses increased 19 percent year-over-year, and reflected the occupancy, equipment, and other operating costs of both Merchants and NRS.

Community Bank said its effective tax rate for the first quarter of 2018 was 23 percent, down from 27.4 percent in the first quarter of last year — boosting earnings by 4 cents per share. That reflected the lower federal tax rate that resulted from the Tax Cut and Jobs Act passed in the fourth quarter of 2017. 

Community Bank System has more than 230 branches across upstate New York, northeastern Pennsylvania, Vermont, and western Massachusetts. Headquartered in DeWitt, the banking company has more than $10 billion in assets.