New York Credit Union Association President/CEO William J. Mellin had a different opinion than the judge or the ABA. “The New York Credit Union Association disagrees with the court’s ruling that NCUA overstepped its authority when it modernized its field of membership rules. NCUA correctly and accurately understood that their field of membership rules needed to be updated to reflect the changing nature of financial services,” he said.

Mellin urged the NCUA to push hard to maintain its power to make rules for credit unions. “Going forward, we urge NCUA to continue to pursue every effort to uphold its rulemaking authority, and the association will explore all of our options for assisting the agency, credit unions and their members.”

In contrast, the ABA said the judge’s ruling “affirms what we have known for years — NCUA won’t hesitate to push the boundaries of reason for the credit-union industry even at the expense of taxpayers, small banks and the communities those banks serve.”

The American Bankers Association represents small, regional, and large banks that together employ more than 2 million people, hold $13 trillion in deposits, and extend nearly $10 trillion in loans.

The New York Credit Union Association is the trade association for the state’s credit unions, which collectively hold more than $76 billion in assets and serve 5.6 million members. 

NCUA is the independent federal agency created by Congress to charter, regulate, and supervise federal credit unions.          

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.

The Upstate Capital Association of New York announced it has named Lindsay Stencel of Launch NY and Rick Clonan of Genius NY as its newest board members.

Stencel is the chief operating officer for Launch NY and a partner at Ohio–based NCT Ventures. She has a passion and expertise is assisting small-business clients, investors, and managers with their legal needs — from concept and business formation to investment documentation and exit transactions, according to an Upstate Capital Association news release. She guides Launch NY’s seed-stage investment arm, leading that organization to be the most active seed-stage investor in upstate New York in 2017. She was elected to the board of directors as a voting member and is based in Buffalo. 

Clonan, VP of innovation and entrepreneurship at CenterState CEO and head of Genius NY, was elected to serve as a board observer. He is a retired Major for the U.S. Air Force, where he served for 23 years as a base civil engineer. He founded and ran an automotive aftermarket company based on his patented innovations. He is a passionate entrepreneur, innovative business builder, and advocate for Central New York. Genius NY is a 2018 gold sponsor for the Upstate Capital Association, the release stated. 

The Upstate Capital Association of New York says it connects investors across the “capital stack” to opportunities all over New York state. It increases access to capital for companies and deal flow for investors by maintaining a statewide network of capital providers, professional advisors, and supporting organizations.

KeyCorp (NYSE: KEY) reported net income of $402 million, or 38 cents per share, during the first quarter of 2018. The figures were up sharply from $296 million, or 27 cents, in the same period in 2017, KeyCorp recently reported. 

Key’s results in the first quarter of 2017 included merger-related charges, resulting in an impact of 5 cents per share.

Cleveland, Ohio–based KeyCorp is the parent company of KeyBank, which has a significant presence in Central and Upstate New York, that was further expanded with its 2016 acquisition of Buffalo–based First Niagara Financial Group.

The year’s first quarter was a “good start” to the year, with “continuing momentum” in Key’s core businesses, as it “grew and expanded” relationships with targeted clients, Beth Mooney, chairman and CEO of KeyCorp, said in the banking company’s earnings report.

“Revenue increased over 3 percent from the same period last year, driven by a higher net interest income, solid loan growth and stronger fee income. The growth in average loans this quarter was broad-based and primarily in commercial and industrial balances, which were up in excess of 3 percent linked quarter, as we continue to grow and expand our middle-market relationships,” said Mooney. 

She also noted that Key’s fee-based businesses “continue to demonstrate” their ability to offer a “full range” of products to its clients. They include off-balance sheet financing alternatives that helped “drive” Key’s investment banking and debt-placement business to a “record” first-quarter level. 

Balance sheet

Average loans were $86.9 billion for the first quarter of 2018, an increase of $794 million compared to the first quarter of 2017, “reflecting broad-based growth” in commercial and industrial loans with middle-market clients, as well as “strength” in auto lending, as the banking company “expands into existing geographies and dealer relationships.” 

In addition, reductions in commercial real-estate loans over the past year “reflect significantly higher” debt placements and pay downs.

Average deposits totaled $102.6 billion for the first quarter of 2018, an increase of $478 million compared to the year-ago quarter. Certificates of deposits and other time deposits increased $1.5 billion.

KeyCorp is “one of the nation’s largest” bank-based, financial-services companies, with assets of about $137 billion as of March 31.

Key provides deposit, lending, cash management, insurance, and investment services in 15 states through a network of about 1,200 KeyBank branches and more than 1,500 ATMs.

KeyCorp’s roots trace back 190 years to Albany, New York. Its KeyBank unit today ranks second in deposit market share in the 16-county Central New York area.