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Profit at Alliance unchanged in Q4, earnings rise in 2011
SYRACUSE – Alliance Financial Corp. (NASDAQ: ALNC) earned $2.8 million in the fourth quarter, unchanged from a year earlier. Earnings per share in the period
NBT profit slips in 4th quarter, but annual net income rises
NORWICH — NBT Bancorp, Inc. (NASDAQ: NBTB) closed out 2011 with the second-highest annual earnings in the company’s history, but saw its earnings slip in the fourth quarter. For the fourth quarter of 2011, NBT reported net income of $13.7 million, or 41 cents per share, down 4.9 percent from $14.4 million, or 42 cents,
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NORWICH — NBT Bancorp, Inc. (NASDAQ: NBTB) closed out 2011 with the second-highest annual earnings in the company’s history, but saw its earnings slip in the fourth quarter.
For the fourth quarter of 2011, NBT reported net income of $13.7 million, or 41 cents per share, down 4.9 percent from $14.4 million, or 42 cents, from a year earlier.
Those earnings beat analyst estimates by a penny and were right in line with the estimate of Damon DelMonte, an analyst in the Hartford, Conn. office of New York City–based, equity-research firm Keefe, Bruyette & Woods, Inc.
“A lower tax rate and share count were the main drivers of this quarter’s operating beat versus the Street’s expectation,” DelMonte wrote in his initial report regarding the quarter. “These favorable variances were somewhat offset by weaker spread income, higher provision and higher expenses, making it a mixed quarter, in our view. We note that impacting spread income and expenses was the addition of four branches that were acquired during the quarter.”
NBT’s stock opened down 29 cents, or 1.2 percent, at $23.19 on Jan. 24, the morning after the company released its financial results, before finishing the day at $23.17.
Net income for the year rose slightly from $57.4 million, or $1.66 per share, to $57.9 million, or $1.71 per share.
In spite of continued low interest rates, which weakened NBT’s net interest margins, the banking company said it produced 4.1 percent organic loan growth and 5.3 percent overall loan growth.
“In 2011, NBT once again achieved near-record financial results with net income and earnings per share at their second-highest levels in the history of the company,” NBT President and CEO Martin Dietrich said in a news release. “We’re pleased to report that the period from 2008 through 2011 is the most profitable four-year term in NBT’s history, particularly since it’s been an extremely challenging time for our industry.”
Through recent expansion efforts, Dietrich said he expects that growth to continue. In 2011, NBT expanded its presence in Vermont with branches in Williston and Essex, acquired and converted four former Legacy Banks locations in Massachusetts to NBT branches, announced plans to acquire three additional Legacy branches in New York (the deal closed Jan. 21) and one Hampshire First Bank in the second quarter of 2012, and purchased a building in Lenox, Mass. with plans to open a fifth Massachusetts branch in February.
NBT’s credit quality improved last year. The bank’s provision for loan and lease losses in 2011 was $20.7 million, down from $29.8 million a year earlier. Net charge-offs for the year totaled $20.6 million, down from $25.1 million in 2010. NBT’s fourth-quarter provision for loan and lease losses was $5.6 million, down from $6.7 million, and net charge-offs fell to $5.6 million in the fourth quarter from $7.3 million in the year-ago period.
Net interest income dropped from $202.5 million to $200.3 million for the year and remained stable at $50.5 million for the quarter.
Noninterest income fell $3.6 million, or 4.3 percent, to $80.3 million for the year due to a decrease in net securities gains and a $2.6 million decrease in service charges on deposit accounts stemming from a decrease in overdraft activity. Noninterest income for the quarter declined $2.1 million, or 9.5 percent, to $20.1 million due mainly to a $2 million decrease in net securities gains.
Noninterest expenses rose from $178.3 million in 2010 to $180.7 million as NBT increased the number of employees as it expanded. Occupancy expenses also increased $1 million during the year. Non-interest expense for the quarter rose slightly from $47.3 million to $47.4 million. Salaries and benefits increased $1.9 million and other expenses increased $1.4 million, but a $500,000 decrease in Federal Deposit Insurance Corporation premiums helped offset those increases slightly. NBT’s income-tax expense also decreased from $4.4 million to $3.9 million for the quarter.
NBT reported total assets of $5.6 billion at the end of 2011, up $259.6 million from a year earlier. Loans and leases were
$3.8 billion, up $190.2 million. Total deposits were $4.4 billion, up $232.8 million.
NBT’s board of directors declared a first-quarter dividend of 20 cents per share, payable on March 15 to shareholders of record as of March 1.
NBT Bancorp (www.nbtbancorp.com), headquartered in Norwich, is the parent company for NBT Bank, N.A., with 131 branches in New York, Massachusetts, and Vermont; Pennstar Bank, with 35 locations in northeastern Pennsylvania; EPIC Advisors, Inc., a 401(k)-plan recordkeeping firm in Rochester; and Mang Insurance Agency, LLC, based in Norwich.
Coughlin & Gerhart opens consolidated Bainbridge office
BAINBRIDGE — Coughlin & Gerhart, L.L.P. has combined its Afton and Unadilla branches into one new location at 29 N. Main St. in Bainbridge in the former offices of attorney David DeClue. The new centrally located office will better serve clients in the tri-town area, company officials said in a news release, announcing the change.
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BAINBRIDGE — Coughlin & Gerhart, L.L.P. has combined its Afton and Unadilla branches into one new location at 29 N. Main St. in Bainbridge in the former offices of attorney David DeClue.
The new centrally located office will better serve clients in the tri-town area, company officials said in a news release, announcing the change. The Afton office was one of the oldest law firms in the region, operating for more than 50 years, and was Coughlin & Gerhart’s first satellite office. The firm’s Unadilla office opened in 1992 when it succeeded the practice of attorney Livingston Latham.
Beth Westfall and Meiying Austin are the primary attorneys assigned to the Bainbridge office. Services provided at the office include real-estate transactions, estate planning, elder law, trust and estate administration, municipal law, and gas-leasing matters.
Attorneys from the main office provide support to the Bainbridge office in other areas of law including personal injury, negligence, and contract disputes.
Coughlin & Gerhart also has a public-law practice group and represents several municipalities in the region.
The law firm’s main office is located on the Huron Campus, at 1701 North St. in Endicott. Coughlin & Gerhart also has offices in Binghamton, Ithaca, Owego, Bainbridge, and Hancock, along with Montrose, Pa.
CNY Elevator Inspections seeks growth with work in Syracuse
SYRACUSE — The owners of CNY Elevator Inspections, Inc. say they’re thrilled to be able to put the company to work in their home city of Syracuse. “In the last few weeks, we’ve been able to offer our services to city businesses,” says Dan Winslow, senior consultant and one of four partners who own the
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SYRACUSE — The owners of CNY Elevator Inspections, Inc. say they’re thrilled to be able to put the company to work in their home city of Syracuse.
“In the last few weeks, we’ve been able to offer our services to city businesses,” says Dan Winslow, senior consultant and one of four partners who own the business. “For the first time.”
CNY Elevator Inspections performs inspections on elevators that are required every six months under New York State law. The company also witnesses annual manufacturer tests of elevators and performs initial-acceptance inspections of newly installed elevators.
Its clients include private building owners, the City of Ithaca, the Empire State Plaza in Albany, and colleges, including several State University of New York schools. Other clients include school districts such as the Liverpool Central School District, North Syracuse Central School District, and the East Syracuse-Minoa Central School District.
Yet the firm could not perform inspections in the City of Syracuse until the beginning of 2012. That’s because the city, which is responsible for enforcing state elevator-inspection laws within its limits, only approved one firm to perform inspections in the municipality.
The firm was St. Louis–based National Elevator Inspection Services, Inc., an arm of the French Bureau Veritas Group. CNY Elevator Inspections unsuccessfully challenged that arrangement in a 2007 lawsuit, which was dismissed because it was not filed soon enough to be taken into consideration.
Then in December 2011, the Syracuse Common Council voted to allow additional qualified third-party inspection firms to work on buildings in the city. As of Jan. 6, the city had approved three inspection companies: National Elevator Inspection Services; Glendale, N.Y.–based Insparisk; and CNY Elevator Inspections.
CNY Elevator Inspections already has verbal commitments to inspect about 30 buildings within the city. And, the firm expects to continue to build its business on its home turf.
“We’re getting a lot of positive feedback from clients within the city,” says Chris Duke, elevator systems consultant and one of the firm’s four partners.
Revenue at CNY Elevator Inspections typically grows about 15 percent a year, says Duke, who declined to disclose specific totals. It will likely continue to grow at that rate in 2012, but could increase to 20 percent thanks to the newly opened territory, he says.
“Those [previous yearly] increases have been in areas that we had to reach out to,” he says. “This is our base. We’re very optimistic.”
CNY Elevator Inspections employs two full-time inspectors and four part-time inspectors, in addition to its four owners. The firm will likely hire two more part-time inspectors this year.
Its inspectors are mostly retired elevator mechanics, Duke says. That gives them expertise in elevators of different types and ages.
“They make great inspectors,” he says. “They know a lot of older equipment.”
The inspectors are based from different areas of New York State, including Binghamton, Syracuse, Long Island, Poughkeepsie, and Albany. CNY Elevator Inspections typically does work across the state, Duke says.
Duke and Winslow own CNY Elevator Inspections along with James Cosbey, a certified elevator inspector, and Keith Robison, CFO and director of information technology.
CNY Elevator Group
The four men also own a second business, CNY Elevator Consultants LLC. They operate the two separate companies alongside each other as the CNY Elevator Group.
CNY Elevator Consultants provides design services for elevators and escalators for architects, engineers, facility managers, and property owners.
For example, the consulting firm can help assemble specifications for an elevator replacement part that a building owner could then bid out to manufacturers. Other services include facility assessments, software-based traffic analyses, and accessibility studies.
The consulting company covers a wider geographic range than the inspecting firm. Duke says he’s visited clients as far away as Puerto Rico.
Neither company installs or repairs elevators. Simultaneously inspecting, consulting, and installing could pose a conflict of interest, according to Duke.
A third company also operates under the CNY Elevator Group umbrella — CNY Elevator Engineering, which is independently owned by elevator engineer Virginia King.
The companies making up CNY Elevator Group share an administrative assistant and a bookkeeper. They also share a headquarters in suite 400 at 327 W. Fayette St. in Syracuse.
The group moved into the headquarters, which is 2,700 square feet, in October. It had been located in a 2,400-square-foot space at 126 North Salina St.
CNY Elevator Group leases the new space from JF Real Estate, which renovated the offices before the elevator firms moved in, according to Duke. The elevator group spent about $10,000 to install a heating, ventilation, and air-conditioning system, which can regulate temperatures in its server room; wire the space for computers; and buy new furniture.
CPC closes on $9 million loan to transform former mill building in Frankin Square
SYRACUSE — The Community Preservation Corporation (CPC) has closed on a $9 million Freddie Mac loan for Franklin View Apartments, a former mill building that was transformed into a mixed-use complex of rental apartments and office/warehouse space. Located at 717 N. Clinton St. in the Lakefront area of Franklin Square, the complex is comprised of
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SYRACUSE — The Community Preservation Corporation (CPC) has closed on a $9 million Freddie Mac loan for Franklin View Apartments, a former mill building that was transformed into a mixed-use complex of rental apartments and office/warehouse space.
Located at 717 N. Clinton St. in the Lakefront area of Franklin Square, the complex is comprised of two interconnected buildings. One is a four-story structure with 87 apartments and about 20,000 square feet of ground-floor office space. Impact Technologies, Upstate Printing, and Syracuse Office Environments are tenants in the building, according to CPC.
The borrower for Franklin View Apartments is Clinton Street SOMA Project LLC, whose sole member is Cosimo Zavaglia, a developer and manager of rental properties in the Syracuse region.
CPC says it has partnered with Zavaglia on other Freddie Mac loans including a $6.5 million construction and permanent loan for Stonegate Apartments and a $5 million refinance loan for Newbury Apartments. Franklin View Apartments is managed by AJF Management, which is owned by Zavaglia.
“CPC is pleased to again provide financing for a property in Franklin Square where there is strong demand for apartment units as well as for new professional office space,” Nick Petragnani, senior vice president/regional director of CPC’s Central and Western New York Region office, which handled the loan, said in a news release.
Other CPC financing for properties in the Franklin Square area have included an $11 million permanent loan for the Lofts at Franklin Square and a $5.28 million construction and permanent loan for the 689 N. Clinton Street property (aka the Spaghetti Warehouse building).
CPC is a not-for-profit mortgage lender that finances residential multifamily development throughout New York. Since its founding in 1974, CPC says it has invested more than $7.9 billion in nearly 144,000 units of housing.
Brand-Yourself named a finalist for SXSW event
SYRACUSE — Syracuse–based startup Brand-Yourself is one of 56 finalists in the fourth annual SXSW Accelerator program.Accelerator is part of the SXSW Interactive Festival, the technology focused piece of the sprawling annual SXSW event, which also covers film and music. The events will all take place in March in Austin, Texas.The Accelerator companies will present
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SYRACUSE — Syracuse–based startup Brand-Yourself is one of 56 finalists in the fourth annual SXSW Accelerator program.
Accelerator is part of the SXSW Interactive Festival, the technology focused piece of the sprawling annual SXSW event, which also covers film and music. The events will all take place in March in Austin, Texas.
The Accelerator companies will present their businesses to a panel of tech industry notables in front of a live audience, according to a SXSW Interactive news release. Winning companies will receive prize packages that include badges for the 2013 SXSW Interactive event, sponsor gifts, and exposure to the SXSW audience.
“The applicant pool for SXSW Accelerator is consistently high-quality and this year was no different, ensuring that the 56 finalists represent today and tomorrow’s most exciting technologies,” SXSW Accelerator Event Producer Chris Valentine said in a news release. “Being a part of Accelerator gives these exceptional companies a platform to showcase their innovations in front of an audience of venture capitalists, entrepreneurs, and press.”
Brand-Yourself.com provides a Web-based hub that helps users manage their online reputations and improve Google search results. The company was honored at the White House in November as part of an event recognizing young entrepreneurs.
The company incubated in downtown Syracuse’s Tech Garden as part of the Student Sandbox program in 2009 and is now a regular tenant. The firm won the $200,000 grand prize in the 2011 Creative Core Emerging Business Competition.
Contact Tampone at ktampone@cnybj.com
Blogs, social media are the best marketing for a small business
For a small business, marketing and advertising seek an answer to the question, “How will prospective customers find me?” People today no longer reply to direct mail. They don’t peruse the phone book. They use television, newspapers, magazines, and other traditional media much less. In fact, they don’t even ask their friends in person. They use
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For a small business, marketing and advertising seek an answer to the question, “How will prospective customers find me?”
People today no longer reply to direct mail. They don’t peruse the phone book. They use television, newspapers, magazines, and other traditional media much less. In fact, they don’t even ask their friends in person. They use Google or they ask their online social contacts. As a result, most small businesses would benefit from enhancing their website presence by blogging and social-media connections.
People can find our website through a keyword search by typing “Marotta on Money” into Google. It took a while before our site was at the top of Google’s list. Initially the collection of articles I have authored on other websites, or even our Twitter site, ranked higher than our own website.
If people are looking for you or your company by name, that type of search is perfect. However, many people who would benefit from your products or services are looking for a solution to a problem, not trying to locate your company by name.
Online marketing focuses on optimizing your content for links and search-engine ranking. The primary principle is to provide remarkable content for your end audience. Sites that concentrate on you and your company are not as effective as those whose central focus is on readers and their needs.
The people searching for your business already know it is the answer to their needs. Everyone else doesn’t really care about you, your company, or your product. They have a question or a problem and want to find the answer. So, don’t construct a website that resembles a brochure. Design each page to offer a specific piece of information, well indexed with the keywords that relate to the question, not the solution.
Ask yourself, “What are readers looking for?” The typical blog post describes how to do X using Y. I have seen pages that provide such advice without using either terms X or Y. Instead, they are filled with keywords about the answer Z. Such unfocused writing makes it difficult for search engines to index and find your post.
Don’t write about your company. Write about what interests your customers. And, give away as much free quality information as you can. Ideally, scores of people will take your advice and share it with their friends. Assuming your advice is knowledgeable and well-reasoned, it will establish your expertise.
Your blog should offer quality information of significant value to your readers, which means digesting and organizing your information. Most people do not have the time to sift through the complex literature in a particular industry. They need you to summarize, simplify, and call them to act on the information.
I’m often asked what financial books I recommend to people who are just getting started. My answer is that most people don’t have time to read the journals, research papers, and books that provide the intellectual support for comprehensive wealth management. Fortunately, they don’t need to. We read widely and summarize a plethora of books and publications in bite-sized chunks with specific calls on our website to act on that information.
Such popularizing of complex financial information creates value for clients and readers alike. If it did not, readers would not subscribe, share, and forward our blog posts.
Blogging is like laundry. It requires a significant effort every week. Quality content has to be written on a regular schedule. It takes people who can write passionately about the subject matter. And it requires effort to craft quality content.
Blogging takes time, but we use our writing efforts to save time. Every time a client asks a financial question, we write a detailed personal answer. But we also save our reply as a potential article, comment, or Q&A. Having quality explanations for common customer questions saves time and effort and helps potential clients understand exactly how they would use your product or services. They know in advance what value they can expect.
Taking the extra time to give away as much free information as possible allows us to focus on helping clients, and tangentially, readers, as much as possible. As a result, we don’t need to push our services. For every hundred readers who benefit from our freely offered advice, we naturally attract qualified clients who want us to help them accomplish what we write about.
Any new publication takes time to gain traction. I’ve been writing a weekly financial column since 2002, but attracting a following took a while. We started a daily financial blog this past summer, and its popularity just surpassed our corporate site, largely because we are offering more information in a more timely manner.
To write quality content, you have to become an expert in your subject matter. You must commit to connecting with people and helping them. And finally, you must be willing to take the time to learn the craft of good writing. These three criteria are the definition of experts in any field. And experts attract those who want their expertise.
We expanded our content at MarottaOnMoney after hearing Thomas Umstattd speak at a conference in Mount Hermon, Calif., just under a year ago. Umstattd, the CEO of Castle Media Group, is knowledgeable, bright, entertaining, and young — in that order. He understands which new media attract people and how giving them what they want is good for business.
David John Marotta is president of Marotta Wealth Management, Inc., which provides fee-only financial planning and wealth management. Contact him at emarotta.com or visit www.marottaonmoney.com
M&T profit slips in 4th quarter
A combination of one-time items helped push profit down at M&T Bank Corp. (NYSE: MTB) in the fourth quarter, but full-year earnings for 2011 rose more than 16 percent. Buffalo–based M&T earned $148 million, or $1.04 per share, in the fourth quarter, down from $204 million, or $1.59 per share, a year earlier. For the
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A combination of one-time items helped push profit down at M&T Bank Corp. (NYSE: MTB) in the fourth quarter, but full-year earnings for 2011 rose more than 16 percent.
Buffalo–based M&T earned $148 million, or $1.04 per share, in the fourth quarter, down from $204 million, or
$1.59 per share, a year earlier. For the full year, the banking company earned
$859 million, or $6.35 per share, up from $736 million, or $5.69 per share, in 2010.
For the quarter, M&T recorded a charge of $79 million related to its 20 percent stake in Bayview Lending Group, LLC of Miami.
The small-balance, commercial real-estate securitization market that Bayview previously operated in is stagnant, according to M&T, but the company’s asset-management operations continue to grow.
Its business of managing capital in the distressed real-estate market is also performing well, the bank said. Still, M&T leaders have increased their estimate of the amount of time it will take to recoup the bank’s investment.
M&T paid $300 million for its minority stake in Bayview in February 2007. The investment has been written down to its estimated fair value of $115 million.
In addition to the Bayview charge, M&T took a $25 million charge related to certain mortgage-backed investment securities. The bank also received $55 million in cash related to a lawsuit settlement during the quarter and made a $30 million contribution to the M&T Charitable Foundation.
Combined, those four items cut profit by $48 million, or 38 cents a share, in the fourth quarter, M&T said.
M&T Bank, has $77.9 billion in assets and 780 branch offices in New York, Pennsylvania, Maryland, Virginia, West Virginia, New Jersey, Delaware, Florida, Washington, D.C., and Ontario, Canada.
M&T is the leading bank in the Syracuse–area deposit market with 30 branch offices, more than $2.2 billion in deposits, and a market share of more than 21.2 percent. It is number two in the Utica–Rome market with 13 branches, more than $615 million in deposits, and a market share of about 16.8 percent.
M&T also leads the Binghamton–area market with a deposit market share of 48.7 percent, 16 branches, and more than $1.2 billion in deposits, according to statistics as of June 30 from the Federal Deposit Insurance Corp.
The bank remains cautious in its outlook for loan growth, M&T Executive Vice President and CFO Rene Jones said during a Jan. 17 conference call on the fourth-quarter results.
“The economy is growing, albeit slowly, but unemployment still remains high and the housing sector is unsettled,” he said.
Loans and leases totaled $60.1 billion at the end of 2011, up from about $52 billion at the end of 2010. Deposits totaled
$59.4 billion at the end of the year, up from $49.8 billion the year before.
The provision for loan losses was $74 million in the fourth quarter, down from $85 million a year earlier. Net charge- offs totaled $74 million for the period, down from $77 million a year earlier.
Nonaccruing loans at the end of the year totaled $1.1 billion, down from $1.14 billion a year earlier.
Fourth-quarter net interest income at M&T was $625 million, up from $580 million in the same quarter of 2010. Noninterest income for the period totaled $398 million, up from $287 million a year earlier.
Noninterest expenses in the fourth quarter totaled $740 million, up from $469 million in the fourth quarter of 2010.
HSBC, First Niagara deal is ‘attractive,’ CEO says
DeWITT — The addition of 19 branches from HSBC and First Niagara Financial Group, Inc. will strengthen core upstate New York markets for Community Bank System, Inc. (NYSE: CBU), the company’s CEO said. DeWitt–based Community Bank System announced plans Jan. 20 to acquire the 19 branches for a deposit premium of 3.22 percent. The deal,
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DeWITT — The addition of 19 branches from HSBC and First Niagara Financial Group, Inc. will strengthen core upstate New York markets for Community Bank System, Inc. (NYSE: CBU), the company’s CEO said.
DeWitt–based Community Bank System announced plans Jan. 20 to acquire the 19 branches for a deposit premium of 3.22 percent. The deal, expected to close during the third quarter, will bring Community Bank about $218 million in loans and $955 million in deposits.
The HSBC locations are among those involved in First Niagara Bank’s planned acquisition of HSBC’s upstate New York branch network. First Niagara, based in Buffalo, announced plans in July to acquire 195 HSBC locations in upstate New York, Westchester County, and Connecticut.
First Niagara leaders said at the time they would ultimately divest some branches in the deal.
The offices Community Bank is acquiring include 16 current HSBC locations in Gowanda, Springville, Westfield, Palmyra, Newark, Geneseo, Watkins Glen, Avon, Watertown, Plattsburgh, Oswego, Fulton, Lowville, Adams, and Alexandria Bay, and three current First Niagara locations in Geneva and Canandaigua.
The deal is an attractive one and brings with it some wealth-management customers, in addition to the loans and deposits, Community Bank System President and CEO Mark Tryniski said during a Jan. 23 conference call on the banking company’s fourth-quarter results.
Also on Jan. 23, Community Bank System announced pricing for a stock offering to raise about $50 million, which will net at least $47.4 million after expenses and commissions. Part of the money will be used to fund the branch deal with First Niagara.
Community Bank has $6.5 billion in assets and more than 170 branches in upstate New York and Pennsylvania. The banking company also operates subsidiaries in employee benefits, insurance, investment management and advising, and wealth management.
Earnings
For the fourth quarter, Community Bank System earned $19 million, up 19.5 percent from a year earlier. Earnings per share in the period totaled 51 cents, up from 47 cents in the fourth quarter of 2010.
For the full year, the banking company earned $73.1 million, or $2.01 per share, up 15.5 percent from 2010’s profit of
$63.3 million, or $1.89 per share.
The bank generated total revenue of $77.6 million in the fourth quarter, an increase of 14.3 percent from the year-earlier period. The higher revenue resulted from an 18.3 percent increase in average earning assets, mainly driven by its acquisition of the Wilber Corporation and organic deposit growth. That was offset slightly by a small decline in its net interest margin, Community Bank said.
Net interest income for the fourth quarter totaled $55.1 million, up 19.5 percent from the same period in 2010. Noninterest income totaled $22.4 million, up 2.8 percent.
Community Bank System said its employee-benefits business grew revenue by 9.4 percent compared with the fourth quarter of 2010, and its wealth-management business posted a revenue increase of 18.4 percent, driven mainly by the acquisition of Wilber National Bank of Oneonta earlier in 2011.
Total loans as of Dec. 31 increased to $3.47 billion from $3.02 billion a year earlier. Deposits as of the end of 2011 totaled nearly $4.8 billion, up from $3.93 billion a year earlier.
Net charge-offs totaled $1.8 million in the fourth quarter, down from $2 million a year earlier. The provision for loan losses for the period was $1.6 million, down $300,000 from the fourth quarter of 2010.
Nonperforming loans totaled $29.4 million at the end of the period, up from $18.5 million a year earlier.
Operating expenses for the fourth quarter totaled $47.8 million, up 8.4 percent from the fourth quarter of 2010. The increase was driven mainly by the Wilber acquisition, according to the bank.
Separately on Jan. 20, Five Star Bank of Warsaw announced it would acquire four current HSBC branches and four current First Niagara branches in Albion, Batavia, Brockport, Elmira, Elmira Heights, Horseheads, Medina, and Waterloo. The deal is expected to close by the end of the third quarter.
First Niagara (NASDAQ: FNFG) had previously announced an agreement to sell 37 HSBC locations in the Rochester and Buffalo areas to Cleveland–based KeyBank.
New branches to boost Key in upstate New York
The acquisition of 37 HSBC branches in the Buffalo and Rochester areas will strengthen KeyBank’s business in upstate New York, KeyCorp (NYSE: KEY) Chairwoman and CEO Beth Mooney said in a conference call Jan. 24. Increasing market share and its physical presence in markets over time helps the bank add new clients, increase revenue, and enhances its
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The acquisition of 37 HSBC branches in the Buffalo and Rochester areas will strengthen KeyBank’s business in upstate New York, KeyCorp (NYSE: KEY) Chairwoman and CEO Beth Mooney said in a conference call Jan. 24.
Increasing market share and its physical presence in markets over time helps the bank add new clients, increase revenue, and enhances its business operations, Mooney said during the call on Key’s fourth-quarter results.
Cleveland–based Key will acquire the 37 branches later this year for a deposit premium of $110 million.
The locations are among those involved in First Niagara Bank’s planned acquisition of HSBC’s upstate New York branch network. First Niagara agreed to sell 26 of the branches located in Erie, Niagara, and Orleans counties as part of an agreement with the Justice Department in November.
The remaining 11 branches are located in Monroe County.
First Niagara, based in Buffalo, announced plans in July to acquire 195 HSBC locations in upstate New York, Westchester County, and Connecticut. The deal is expected to close in the second quarter.
The new branches will give Key $2.4 billion in new deposits and loans of about $400 million. Key is paying a deposit premium of 4.6 percent. First Niagara sold additional branches to Community Bank System and Five Star Bank as well.
Key plans to offer jobs to HSBC employees at the branches involved in the deal.
KeyBank is number two in the Syracuse–area deposit market with 28 branch offices, more than $1.7 billion in deposits, and a market share of more than 16 percent. In the Utica–Rome area, Key has two branches, more than $64.4 million in deposits, and a deposit market share of more than 1.7 percent.
Nationwide, Key has more than 1,000 branches in 14 states and assets of $89 billion.
Earnings
For the fourth quarter, net income from continuing operations attributable to common shareholders at KeyCorp (NYSE: KEY) totaled $201 million in the fourth quarter, down from $292 million a year earlier.
Earnings per share for the period totaled 21 cents, down from 33 cents in the fourth quarter of 2010. A $24 million charge resulting from an announcement by Visa of a planned litigation escrow deposit pushed fourth-quarter profit lower, according to Key.
For the full year, net income from continuing operations attributable to common shareholders was $857 million, or 92 cents a share, up from $413 million, or 47 cents a share, in 2010.
“Despite industry headwinds, we’ve positioned Key to win in the marketplace and continue to make progress on financial goals,” Mooney said.
Loans totaled about $49.6 billion as of Dec. 31, up from $48.2 billion in the third quarter, but down from $50.1 billion a year earlier. Deposits totaled about $62 billion, up from $61 billion in the third quarter and $60.6 billion a year earlier.
Net interest income for the period was $563 million, down from $635 million in the fourth quarter of 2010. Noninterest income was $414 million for the fourth quarter of 2011, compared to $526 million a year earlier.
Key continued to see improving asset quality during the quarter, CFO Jeffrey Weeden said.
Net charge-offs in the quarter totaled $105 million, down from $256 million in the same period of 2010. The provision for loan losses was a credit of $22 million for the fourth quarter of 2011, compared to a credit of $97 million a year earlier.
Nonperforming loans as of the end of 2011 totaled $727 million, down from $1.07 billion a year earlier.
Noninterest expense was $717 million for the fourth quarter, down from $744 million for the same period in 2010. The drop was partially the result of a decline in premiums paid to the Federal Deposit Insurance Corp and reduced operating lease expenses.
Contact Tampone at ktampone@cnybj.com
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