Exhibit 99.1
 | News Release For further information, please contact: |
| 5790 Widewaters Parkway, DeWitt, N.Y. 13214 | Joseph E. Sutaris, EVP & Chief Financial Officer Office: (315) 445-7396 |
Community Bank System, Inc. Reports Third Quarter 2023 Results
SYRACUSE, N.Y. — October 24, 2023 — Community Bank System, Inc. (the “Company”) (NYSE: CBU) reported third quarter 2023 results that are included in the attached supplement. This earnings release, including supporting financial tables, is also available within the press releases section of the Company's investor relations website at: https://ir.communitybanksystem.com/news-presentations/press-releases/. An archived webcast of the earnings call will be available on this site for one full year.
Third Quarter 2023 Performance Summary
| · | Third Quarter 2023 Net Income of $44.1 million, or $0.82 per fully diluted share, was down $4.6 million, or $0.08 per fully diluted share, from the prior year’s third quarter |
| · | Operating Net Income, a non-GAAP measure, of $44.2 million, or $0.82 per fully diluted share, was down $4.8 million, or $0.08 per fully diluted share, from the prior year’s third quarter |
| · | Total Ending Loans of $9.45 billion were up $279.3 million, or 3.0%, from the end of the prior quarter, marking the ninth consecutive quarter of loan growth |
| · | Total Ending Deposits of $13.03 billion were up $159.0 million, or 1.2%, from the end of the prior quarter and up $18.5 million, or 0.1%, from December 31, 2022 |
| · | Total Financial Services (Employee Benefit Services, Insurance Services and Wealth Management Services) Revenues of $50.0 million, a new quarterly record for the Company, were up $3.3 million, or 7.1%, from the prior year’s third quarter |
| · | Annualized Loan Net Charge-Offs were 0.05% in the quarter and on a year-to-date basis |
| · | Tier 1 Leverage Ratio of 9.44% was up 0.09 percentage points from the end of the prior quarter |
Company management will conduct an investor call at 11:00 a.m. (ET) today, October 24, 2023, to discuss the third quarter 2023 results. The conference call can be accessed at 1-833-630-0464 (1-412-317-1809 if outside the United States and Canada). Investors may also listen live via the Internet at: https://app.webinar.net/VQy6DnZDXEZ.
About Community Bank System, Inc.
Community Bank System, Inc. is a diversified financial services company with total assets of $15.4 billion focused on four main business lines – banking, benefits administration, insurance services and wealth management. Its banking subsidiary, Community Bank, N.A., is among the country’s 100 largest banking institutions and operates more than 200 customer facilities across Upstate New York, Northeastern Pennsylvania, Vermont, and Western Massachusetts. In addition to a full range of retail, business, and municipal banking services, the Company offers comprehensive financial planning, trust administration and wealth management services through its Community Bank Wealth Management operating unit. The Company’s Benefit Plans Administrative Services, Inc. subsidiary is a leading provider of employee benefits administration, trust services, collective investment fund administration, and actuarial consulting services to customers on a national scale. The Company’s OneGroup NY, Inc. subsidiary is a top 100 U.S. insurance agency. 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.cbna.com or https://ir.communitybanksystem.com.
| News Release For further information, please contact: |
| 5790 Widewaters Parkway, DeWitt, N.Y. 13214 | Joseph E. Sutaris, EVP & Chief Financial Officer Office: (315) 445-7396 |
Community Bank System, Inc. Reports Third Quarter 2023 Results
SYRACUSE, N.Y. — October 24, 2023
Community Bank System, Inc. (the “Company”) (NYSE: CBU) reported third quarter 2023 net income of $44.1 million, or $0.82 per fully diluted share. |
| |
“We are pleased with the revenue performance and stability of our Company although earnings results were pressured by certain elevated expenses in the quarter,” commented Mark E. Tryniski, President and CEO. “Both ending loans and deposits increased in the quarter and asset quality remained strong with annualized net charge-offs of only five basis points. We also crested $50.0 million of total noninterest revenues in our employee benefit services, insurance services and wealth management services businesses, a new quarterly record for the Company. In addition, we took steps to bolster our strong liquidity position. However, earnings per share of $0.82 for the quarter were $0.08 below the third quarter of 2022 and $0.07 below the linked second quarter of 2023. Operating revenues across all lines of business remained strong in the quarter, with noninterest revenues contributing 38.5% of total revenues. Financial services business revenues were up $3.3 million, or 7.1%, while banking segment revenues were down $3.6 million, or 2.8%, from the prior year’s third quarter, due to a $1.0 million, or 5.3%, decrease in banking noninterest revenues and a $2.6 million, or 2.4%, decrease in net interest income driven by higher funding costs. Total operating expenses, excluding acquisition-related expenses, were up $8.6 million, or 8.0%, from the third quarter of 2022 and $4.4 million, or 3.9%, on a linked quarter basis. Total loans outstanding were up $279.3 million, or 3.0%, during the quarter, marking the ninth consecutive quarter of loan growth. Total deposits were also up $159.0 million, or 1.2%, in the quarter and up $18.5 million, or 0.1%, on a year-to-date basis while estimated insured deposits, net of collateralized and intercompany deposits, continued to represent greater than 80% of total ending deposits. The Company’s cycle-to-date deposit beta stayed low at just 13% and approximately 70% of the Company’s total deposits remained in checking and savings accounts at the end of the quarter. Interest-bearing deposit costs were up 25 basis points in the third quarter, as compared to 39 basis points in the second quarter, an encouraging sign that funding cost pressures are beginning to abate. We believe the Company’s strong core deposit base, in combination with its strong liquidity profile, capital, asset quality and diversified revenue profile provide a solid foundation for future opportunities and growth. Earlier this month, we initiated a plan to optimize our retail customer service workforce. Although these actions will temporarily reduce branch-related operating expenses, we also expect to reinvest in our retail network through de novo branch expansion in new, more densely populated markets throughout our geographic footprint in the second half of 2024.” |
Third Quarter 2023 Performance
| Operating Performance | · GAAP EPS o $0.82 per share, a decrease from $0.90 per share for the third quarter of 2022 · Operating EPS (non-GAAP) o $0.82 per share, a decrease of $0.08 per share from the third quarter of 2022 · Adjusted Pre-Tax, Pre-Provision Net Revenue Per Share (non-GAAP) o $1.10 per share, a decrease of $0.15 per share from the third quarter of 2022 |
| | |
| Return Metrics | · Return on Assets o 1.16% · Return on Equity o 10.90% |
| | |
| Revenues | · Total Revenues o $175.4 million, a decrease of $0.3 million, or 0.2%, from the third quarter of 2022 · Noninterest Revenues o $67.6 million, an increase of $2.3 million, or 3.6%, from the third quarter of 2022 · Noninterest Revenues/Total Revenues o 38.5% |
| Net Interest Income and Net Interest Margin | · Net Interest Income o $107.8 million, a decrease of $2.6 million, or 2.4%, from the third quarter of 2022 and a decrease of $1.5 million, or 1.4%, from the second quarter of 2023 · Net Interest Margin o 3.07%, a decrease of seven basis points from 3.14% for the second quarter of 2023 and an increase of seven basis points from 3.00% for the third quarter of 2022 · Net Interest Margin (Fully Tax-Equivalent) (non-GAAP) o 3.10%, a decrease of eight basis points from 3.18% for the second quarter of 2023 and an increase of seven basis points from 3.03% for the third quarter of 2022 |
| | |
| Balance Sheet and Funding | · Total Ending Loans o $9.45 billion, an increase of $279.3 million, or 3.0%, from June 30, 2023 and an increase of $906.5 million, or 10.6%, from one year ago · Total Ending Deposits o $13.03 billion, an increase of $159.0 million, or 1.2%, from June 30, 2023 · Total Deposit Funding Costs / Total Cost of Funds o 0.76% / 0.88% |
| | |
| Risk Metrics | · Annualized Loan Net Charge-Offs o 0.05% · Tier 1 Leverage Ratio o 9.44% · Loan-to-deposit ratio o 72.5% · Non-owner occupied commercial real estate / total bank-level regulatory capital o 186% |
Third Quarter 2023 Business Segment Revenues
| Banking | · Total Revenues of $125.3 million, a decrease of $3.6 million, or 2.8%, from the third quarter of 2022 and a decrease of $1.7 million, or 1.3%, from the second quarter of 2023, primarily due to lower net interest income resulting from higher funding costs. |
| | |
| Employee Benefit Services | · Total Revenues of $30.0 million, an increase of $2.1 million, or 7.6%, from the third quarter of 2022 and an increase of $1.4 million, or 5.0%, from the second quarter of 2023 driven by an increase in the total participants under administration along with growth resulting from market appreciation. |
| | |
| Insurance Services | · Total Revenues of $12.1 million, an increase of $0.8 million, or 6.9%, from the third quarter of 2022 and an increase of $0.2 million, or 2.1%, from the second quarter of 2023, reflective of a strong premium market and organic expansion, along with growth resulting from acquisitions. |
| | |
| Wealth Management Services | · Total Revenues of $7.9 million, an increase of $0.4 million, or 5.8%, from the third quarter of 2022 and an increase of $0.1 million, or 1.0%, from the second quarter of 2023 as more favorable investment market conditions drove increases in assets under management between the periods. |
Results of Operations
The Company reported third quarter 2023 net income of $44.1 million, or $0.82 per fully diluted share. This compares to $48.7 million of net income, or $0.90 per fully diluted share for the third quarter of 2022. The $0.08 decrease in earnings per share was reflective of an increase in operating expenses and a decrease in net interest income, partially offset by an increase in noninterest revenues and decreases in the provision for credit losses, income taxes and fully diluted shares outstanding. Comparatively, the Company recorded $0.89 in fully diluted earnings per share for the linked second quarter of 2023.
Net Interest Income and Net Interest Margin
The Company’s ninth consecutive quarter of loan growth and a rising rate environment supported year-over-year net interest margin expansion while higher funding costs drove a decline in net interest income.
| · | Net interest income in the third quarter of 2023 was $107.8 million, down $2.6 million, or 2.4%, compared to the third quarter of 2022, and down $1.5 million, or 1.4%, from the second quarter of 2023. |
| · | Third quarter net interest margin of 3.07% and tax-equivalent net interest margin, a non-GAAP measure, of 3.10% increased by seven basis points from the third quarter of 2022 primarily as a result of higher yields on interest-earning assets and the decrease in average interest-earning asset balances primarily driven by the sales and maturities of certain available-for-sale investment securities between the periods, partially offset by higher rates paid on interest-bearing liabilities. |
| · | The yield on interest-earning assets increased 76 basis points to 3.94% over the prior year’s third quarter primarily as a result of higher loan yields due to market-related increases in interest rates on new loans, a significant increase in variable and adjustable rate loan yields driven by rising market interest rates, including the prime rate, and a high level of new loan originations. |
| · | The cost of interest-bearing liabilities increased 100 basis points from 0.23% in the third quarter of 2022 to 1.23% in the third quarter of 2023 driven by higher deposit and borrowing rates. |
| · | On a linked quarter basis, net interest margin decreased by seven basis points, while tax-equivalent net interest margin, a non-GAAP measure, decreased by eight basis points. The cost of funds increased 21 basis points, including a 29 basis point increase in the cost of interest-bearing liabilities, while the yield on interest-earning assets increased 12 basis points. |
Noninterest Revenues
The Company’s banking and financial services (employee benefit services, insurance services and wealth management services) noninterest revenue streams reduce dependence on net interest income, continue to be strong, diverse and provide a solid foundation for future opportunities and growth.
| · | Banking noninterest revenues decreased $1.0 million, or 5.3%, from $18.5 million in the third quarter of 2022 to $17.5 million in the third quarter of 2023 reflective of the Company’s implementation of certain deposit fee changes, including the elimination of nonsufficient and unavailable funds fees on personal accounts late in the fourth quarter of 2022. |
| · | Employee benefit services revenues for the third quarter of 2023 were $30.0 million, up $2.1 million, or 7.6%, in comparison to the third quarter of 2022 driven by new business and a significant year-over-year increase in the total participants under administration, along with a modest increase from market appreciation. |
| · | Insurance services revenues for the third quarter of 2023 were $12.1 million, which represents a $0.8 million, or 6.9%, increase versus the prior year’s third quarter, reflective primarily of a strong premium market and organic expansion, along with growth resulting from acquisitions completed between the periods. |
| · | Wealth management services revenues for the third quarter of 2023 were $7.9 million, up from $7.5 million in the third quarter of 2022 as more favorable investment market conditions drove an increase in assets under management. |
Noninterest Expenses and Income Taxes
The Company continues to maintain a focus on managing expenses consistent with its organic growth strategies and objectives, while continuing to evaluate efficiency opportunities in all lines of business.
| · | The Company recorded $116.5 million in total operating expenses in the third quarter of 2023, compared to $108.2 million of total operating expenses in the prior year’s third quarter. The $8.3 million, or 7.7%, increase between the periods was mainly driven by higher salaries and employee benefits, data processing and communications expenses, business development and marketing and other expenses. |
| · | The $4.5 million, or 6.8%, increase in salaries and benefits expense was primarily driven by merit and market-related increases in employee wages, higher employee medical expenses and certain executive retirement expenses. |
| · | The $1.3 million, or 9.1%, increase in data processing and communications expenses is reflective of the Company’s continued investment in customer-facing and back-office digital technologies. |
| · | Business development and marketing expenses increased $1.0 million, or 28.0%, due to the Company’s investment in digital marketing initiatives and higher levels of targeted advertisements intended to generate deposit inflows. |
| · | Other expenses were up $1.5 million, or 23.1%, primarily due to increases in insurance expenses and non-service related components of the net periodic pension benefit credit. |
| · | The effective tax rate for the third quarter of 2023 was 21.2%, down from 22.0% in the third quarter of 2022. |
Financial Position and Liquidity
The Company’s financial position and liquidity profile remain strong.
| · | The Company’s total assets were $15.39 billion at September 30, 2023, representing a $208.2 million, or 1.3%, decrease from one year prior and a $278.3 million, or 1.8%, increase from the end of the second quarter of 2023. The decrease in the Company’s total assets during the prior twelve-month period was primarily driven by the sales and maturities of certain available-for-sale investment securities, partially offset by organic loan growth. |
| · | At September 30, 2023, the Company’s readily available sources of liquidity totaled $4.81 billion, including cash and cash equivalents balances of $455.8 million, investment securities unpledged as collateral totaling $1.75 billion, unused borrowing capacity at the Federal Home Loan Bank of New York of $1.51 billion and $1.10 billion of funding availability at the Federal Reserve Bank’s discount window. |
| · | The available sources of immediately available liquidity represent over 200% of the Company’s estimated uninsured deposits, net of collateralized and intercompany deposits. |
| · | Estimated insured deposits, net of collateralized and intercompany deposits, represent greater than 80% of third quarter total ending deposits. |
Deposits and Funding
The Company maintains a solid core deposit base with low funding costs.
| · | Ending deposits at September 30, 2023 of $13.03 billion were $159.0 million, or 1.2%, higher than the second quarter of 2023 and $455.5 million, or 3.4%, lower than one year prior. |
| · | Ending borrowings of $647.1 million at September 30, 2023, which included $330.3 million of customer repurchase agreements and $300.0 million of fixed rate Federal Home Loan Bank of New York term borrowings secured during the third quarter to support continued loan growth, increased $162.3 million, or 33.5%, from June 30, 2023 and increased $151.8 million, or 30.6%, from a year prior. |
| · | The Company’s average cost of funds was up 72 basis points, from 0.16% in the third quarter of 2022 to 0.88% in the third quarter of 2023, while the average cost of total deposits remained comparatively low at 0.76% for the quarter. |
| · | Through the end of the third quarter, the Company’s cycle-to-date deposit beta was 13% and the cycle-to-date total funding beta was 15%. The target Federal Funds rate has increased 525 basis points since December 31, 2021, while the Company’s total deposit costs and total funding costs increased 68 basis points and 79 basis points, respectively, over the same period. |
| · | The Company’s deposit base is well diversified across customer segments, comprised of approximately 61% consumer, 26% business and 13% municipal at the end of the current quarter, and broadly dispersed with an average deposit account balance of under $20,000. |
| · | 70% of the Company’s total deposits were in checking and savings accounts at the end of the third quarter and the Company does not currently utilize brokered or wholesale deposits. 11% of the Company’s total deposits were in time deposit accounts at the end of the third quarter, up four percentage points from the end of the prior year’s third quarter and up one percentage point from the end of the second quarter of 2023 primarily due to the movement of customers’ deposits from non-time to time accounts. |
Loans and Credit Quality
The Company’s in-footprint based loan portfolio is growing and diversified with a core focus on credit quality.
| · | Ending loans at September 30, 2023 of $9.45 billion were $279.3 million, or 3.0%, higher than June 30, 2023 and $906.5 million, or 10.6%, higher than one year prior with the year-over-year growth driven by increases in all loan categories due to net organic growth. |
| · | At September 30, 2023, the Company’s allowance for credit losses totaled $64.9 million, or 0.69% of total loans outstanding compared to $63.3 million, or 0.69% of total loans outstanding, at the end of the second quarter of 2023 and $60.4 million, or 0.71% of total loans outstanding, at September 30, 2022. |
| · | Reflective of an increase in loans outstanding and a stable economic forecast, the Company recorded a $2.9 million provision for credit losses during the third quarter of 2023. While certain macroeconomic concerns are emerging related to non-owner occupied commercial real estate, the Company’s exposure to this portfolio remains diverse and relatively low at 186% of total bank-level regulatory capital, 24% of total loans and 15% of total assets. |
| · | The Company recorded net charge-offs of $1.2 million, or an annualized 0.05% of average loans, in the third quarter of 2023 compared to net charge-offs of $0.4 million, or an annualized 0.02% of average loans, in the third quarter of 2022 and net charge-offs of $0.7 million, or an annualized 0.03% of average loans, in the second quarter of 2023. |
| · | Total delinquent loans, which includes nonperforming loans and loans 30 or more days delinquent, to total loans outstanding was 0.90% at the end of the third quarter of 2023. This compares to 0.71% at the end of the third quarter of 2022 and 0.83% at the end of the second quarter of 2023. |
| · | At September 30, 2023, nonperforming (90 or more days past due and non-accruing) loans increased to $36.9 million, or 0.39%, of total loans outstanding compared to $33.3 million, or 0.36%, of total loans outstanding at the end of the second quarter of 2023 and $32.5 million, or 0.38%, of total loans outstanding one year earlier. |
| · | Loans 30 to 89 days delinquent (categorized by the Company as delinquent but performing), which tend to exhibit seasonal characteristics, were 0.51% of total loans outstanding at September 30, 2023, up from 0.47% at the end of the second quarter of 2023 and 0.33% one year earlier. |
Shareholders’ Equity and Regulatory Capital
The Company’s capital planning and management activities, coupled with its historically strong earnings performance, diversified streams of revenue and prudent dividend practices, have allowed it to build and maintain a strong capital position. At September 30, 2023, all of the Company’s and the Bank’s regulatory capital ratios significantly exceeded well-capitalized standards.
| · | Shareholders’ equity of $1.55 billion at September 30, 2023 was $93.8 million, or 6.4%, higher than one year ago primarily due to a $72.2 million decrease in accumulated other comprehensive loss related to the Company’s investment securities portfolio. Shareholders’ equity was down $62.5 million, or 3.9%, from June 30, 2023, primarily driven by a $79.7 million increase in accumulated other comprehensive loss related to the Company’s investment securities portfolio. |
| · | The Company’s tier 1 leverage ratio was 9.44% at September 30, 2023, which substantially exceeds the regulatory well-capitalized standard of 5.0%. |
| · | The Company’s shareholders’ equity to assets ratio (GAAP) was 10.11% at September 30, 2023, up from 9.37% at September 30, 2022, but down from 10.71% at June 30, 2023. |
| · | The Company’s net tangible equity to net tangible assets ratio (non-GAAP) was 4.81% at September 30, 2023, up from 4.08% a year earlier and down from 5.34% at the end of the second quarter of 2023. The increase in the net tangible equity to net tangible assets ratio (non-GAAP) from one year prior was primarily driven by a $97.4 million, or 16.2%, increase in tangible equity due to the aforementioned decrease in accumulated other comprehensive loss related to the Company’s investment securities portfolio and a $204.6 million, or 1.4%, decrease in tangible assets due primarily to the sales and maturities of certain available-for-sale investment securities. |
Dividend Increase and Stock Repurchase Program
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, and it reflects the continued strength of our current operating results and capital position, and our confidence in the future performance of the Company. The $0.01 increase in the quarterly dividend declared in the third quarter of 2023 marked the 31st consecutive year of dividend increases for the Company.
| · | During the third quarter of 2023, the Company declared a quarterly cash dividend of $0.45 per share on its common stock, up 2.3% from the $0.44 dividend declared in the third quarter of 2022, representing an annualized yield of 4.5% based upon the $39.73 closing price of the Company’s stock on October 23, 2023. |
| · | As previously announced, in December 2022 the Company’s Board of Directors (the “Board”) approved a stock repurchase program authorizing the repurchase of up to 2.70 million shares of the Company’s common stock during a twelve-month period starting January 1, 2023. 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 regulatory and legal requirements. There were 500,000 shares repurchased pursuant to the 2023 stock repurchase program in the first nine months of 2023, including 100,000 shares in the third quarter of 2023. |
Non-GAAP Measures
The Company also provides supplemental reporting of its results on an “operating,” “adjusted” and “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), accretion on non-purchased credit deteriorated (“PCD”) loans, expenses associated with acquisitions, acquisition-related provision for credit losses, acquisition-related contingent consideration adjustments, gain on debt extinguishment, loss on sales of investment securities and unrealized loss on equity securities. In addition, the Company provides supplemental reporting for “adjusted pre-tax, pre-provision net revenues,” which subtracts the provision for credit losses, acquisition expenses, acquisition-related contingent consideration adjustments, gain on debt extinguishment, loss on sales of investment securities and unrealized loss on equity securities from income before income taxes. Although these items are non-GAAP measures, the Company’s management believes this information helps investors and analysts measure underlying core performance and provides better comparability to other organizations that have not engaged in acquisitions. The Company also provides supplemental reporting of its net interest margin on a “fully tax-equivalent” basis, which includes an adjustment to net interest income that represents taxes that would have been paid had nontaxable investment securities and loans been taxable. Although fully tax-equivalent net interest margin is a non-GAAP measure, the Company’s management believes this information helps enhance comparability of the performance of assets that have different tax liabilities. The amounts for such items are presented in the tables that accompany this release. Diluted adjusted net earnings per share, a non-GAAP measure, were $0.86 in the third quarter of 2023, down from $0.94 in the third quarter of 2022 and $0.95 in the second quarter of 2023. Adjusted pre-tax, pre-provision net revenue per share, a non-GAAP measure, was $1.10 in the third quarter of 2023, down from $1.25 in the third quarter of 2022 and $1.17 in the second quarter of 2023.
Conference Call Scheduled
Company management will conduct an investor call at 11:00 a.m. (ET) today, October 24, 2023, to discuss the third quarter 2023 results. The conference call can be accessed at 1-833-630-0464 (1-412-317-1809 if outside the United States and Canada). Investors may also listen live via the Internet at: https://app.webinar.net/VQy6DnZDXEZ.
This earnings release, including supporting financial tables, is also available within the press releases section of the Company's investor relations website at: https://ir.communitybanksystem.com/news-presentations/press-releases/. An archived webcast of the earnings call will be available on this site for one full year.
About Community Bank System, Inc.
Community Bank System, Inc. is a diversified financial services company with total assets of $15.4 billion focused on four main business lines – banking, benefits administration, insurance services and wealth management. Its banking subsidiary, Community Bank, N.A., is among the country’s 100 largest banking institutions and operates more than 200 customer facilities across Upstate New York, Northeastern Pennsylvania, Vermont and Western Massachusetts. In addition to a full range of retail, business, and municipal banking services, the Company offers comprehensive financial planning, trust administration and wealth management services through its Community Bank Wealth Management operating unit. The Company’s Benefit Plans Administrative Services, Inc. subsidiary is a leading provider of employee benefits administration, trust services, collective investment fund administration, and actuarial consulting services to customers on a national scale. The Company’s OneGroup NY, Inc. subsidiary is a top 100 U.S. insurance agency. 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.cbna.com or https://ir.communitybanksystem.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of CBU’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. The following factors, among others, could cause the actual results of CBU’s operations to differ materially from its expectations: the macroeconomic and other challenges and uncertainties related to or resulting from recent bank failures; current and future economic and market conditions, including the effects on commercial real estate and residential housing prices, unemployment rates, high inflation, U.S. fiscal debt, budget and tax matters, geopolitical matters, and global economic growth; fiscal and monetary policies of the Federal Reserve Board; the potential adverse effects of unusual and infrequently occurring events; management’s estimates and projections of interest rates and interest rate policies; the effect of changes in the level of checking, savings, or money market account deposit balances and other factors that affect net interest margin; future provisions for credit losses on loans and debt securities; changes in nonperforming assets; ability to contain costs in inflationary conditions; the effect on financial market valuations on CBU’s fee income businesses, including its employee benefit services, wealth management, and insurance businesses; the successful integration of operations of its acquisitions; competition; changes in legislation or regulatory requirements, including capital requirements; and the timing for receiving regulatory approvals and completing pending merger and acquisition transactions. For more information about factors that could cause actual results to differ materially from CBU’s expectations, refer to its annual, periodic and other reports filed with the Securities and Exchange Commission (“SEC”), including the discussion under the “Risk Factors” section of such reports filed with the SEC and available on CBU’s website at https://ir.communitybanksystem.com and on the SEC’s website at www.sec.gov. Further, any forward-looking statement speaks only as of the date on which it is made, and CBU undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.
| Summary of Financial Data (unaudited) | | | | |
| (Dollars in thousands, except per share data) | | | | |
| | Quarter Ended | Year-to-Date |
| | September 30,
2023 | September 30,
2022 | September 30,
2023 | September 30,
2022 |
| Earnings | | | | |
| Loan income | $115,138 | $88,434 | $322,775 | $238,907 |
| Investment income | 22,418 | 27,441 | 72,287 | 80,839 |
| Total interest income | 137,556 | 115,875 | 395,062 | 319,746 |
| Interest expense | 29,770 | 5,481 | 66,967 | 11,339 |
| Net interest income | 107,786 | 110,394 | 328,095 | 308,407 |
| Acquisition-related provision for credit losses | 0 | 0 | 0 | 3,927 |
| Provision for credit losses | 2,878 | 5,061 | 7,130 | 8,078 |
| Net interest income after provision for credit losses | 104,908 | 105,333 | 320,965 | 296,402 |
| Deposit service and other banking fees | 17,478 | 18,364 | 51,374 | 52,266 |
| Mortgage banking | 113 | 171 | 399 | 595 |
| Employee benefit services | 29,997 | 27,884 | 87,946 | 86,385 |
| Insurance services | 12,113 | 11,332 | 35,495 | 31,521 |
| Wealth management services | 7,934 | 7,502 | 24,037 | 24,276 |
| Loss on sales of investment securities | 0 | 0 | (52,329) | 0 |
| Gain on debt extinguishment | 0 | 0 | 242 | 0 |
| Unrealized loss on equity securities | (49) | (4) | (99) | (24) |
| Total noninterest revenues | 67,586 | 65,249 | 147,065 | 195,019 |
| Salaries and employee benefits | 70,687 | 66,190 | 210,208 | 193,236 |
| Data processing and communications | 15,480 | 14,184 | 42,900 | 40,454 |
| Occupancy and equipment | 10,358 | 10,364 | 31,835 | 31,740 |
| Amortization of intangible assets | 3,576 | 3,837 | 10,948 | 11,420 |
| Legal and professional fees | 3,826 | 3,194 | 12,129 | 10,196 |
| Business development and marketing | 4,628 | 3,616 | 12,096 | 9,975 |
| Acquisition-related contingent consideration adjustment | 80 | 0 | 1,080 | 400 |
| Acquisition expenses | 0 | 409 | 56 | 4,668 |
| Other | 7,869 | 6,391 | 22,342 | 16,327 |
| Total operating expenses | 116,504 | 108,185 | 343,594 | 318,416 |
| Income before income taxes | 55,990 | 62,397 | 124,436 | 173,005 |
| Income taxes | 11,861 | 13,706 | 26,218 | 37,454 |
| Net income | $44,129 | $48,691 | $98,218 | $135,551 |
| Basic earnings per share | $0.82 | $0.90 | $1.82 | $2.51 |
| Diluted earnings per share | $0.82 | $0.90 | $1.82 | $2.49 |
| Summary of Financial Data (unaudited) | | | | | |
| (Dollars in thousands, except per share data) | | | | | |
| | 2023 | 2022 |
| | 3rd Qtr | 2nd Qtr | 1st Qtr | 4th Qtr | 3rd Qtr |
| Earnings | | | | | |
| Loan income | $115,138 | $107,275 | $100,362 | $96,168 | $88,434 |
| Investment income | 22,418 | 24,349 | 25,520 | 27,815 | 27,441 |
| Total interest income | 137,556 | 131,624 | 125,882 | 123,983 | 115,875 |
| Interest expense | 29,770 | 22,345 | 14,852 | 11,760 | 5,481 |
| Net interest income | 107,786 | 109,279 | 111,030 | 112,223 | 110,394 |
| Provision for credit losses | 2,878 | 752 | 3,500 | 2,768 | 5,061 |
| Net interest income after provision for credit losses | 104,908 | 108,527 | 107,530 | 109,455 | 105,333 |
| Deposit service and other banking fees | 17,478 | 17,740 | 16,156 | 19,228 | 18,364 |
| Mortgage banking | 113 | 11 | 275 | (205) | 171 |
| Employee benefit services | 29,997 | 28,565 | 29,384 | 29,023 | 27,884 |
| Insurance services | 12,113 | 11,860 | 11,522 | 8,290 | 11,332 |
| Wealth management services | 7,934 | 7,858 | 8,245 | 7,390 | 7,502 |
| Loss on sales of investment securities | 0 | 0 | (52,329) | 0 | 0 |
| Gain on debt extinguishment | 0 | 0 | 242 | 0 | 0 |
| Unrealized loss on equity securities | (49) | (50) | 0 | (20) | (4) |
| Total noninterest revenues | 67,586 | 65,984 | 13,495 | 63,706 | 65,249 |
| Salaries and employee benefits | 70,687 | 68,034 | 71,487 | 64,103 | 66,190 |
| Data processing and communications | 15,480 | 14,291 | 13,129 | 13,645 | 14,184 |
| Occupancy and equipment | 10,358 | 10,453 | 11,024 | 10,673 | 10,364 |
| Amortization of intangible assets | 3,576 | 3,705 | 3,667 | 3,794 | 3,837 |
| Legal and professional fees | 3,826 | 3,102 | 5,201 | 3,822 | 3,194 |
| Business development and marketing | 4,628 | 4,567 | 2,901 | 3,120 | 3,616 |
| Acquisition-related contingent consideration adjustment | 80 | 1,000 | 0 | (700) | 0 |
| Acquisition expenses | 0 | (1) | 57 | 353 | 409 |
| Other | 7,869 | 7,887 | 6,586 | 7,042 | 6,391 |
| Total operating expenses | 116,504 | 113,038 | 114,052 | 105,852 | 108,185 |
| Income before income taxes | 55,990 | 61,473 | 6,973 | 67,309 | 62,397 |
| Income taxes | 11,861 | 13,182 | 1,175 | 14,779 | 13,706 |
| Net income | $44,129 | $48,291 | $5,798 | $52,530 | $48,691 |
| Basic earnings per share | $0.82 | $0.90 | $0.11 | $0.97 | $0.90 |
| Diluted earnings per share | $0.82 | $0.89 | $0.11 | $0.97 | $0.90 |
| Profitability | | | | | |
| Return on assets | 1.16% | 1.28% | 0.15% | 1.33% | 1.24% |
| Return on equity | 10.90% | 11.86% | 1.49% | 14.12% | 11.49% |
| Return on tangible equity(1) (non-GAAP) | 23.34% | 24.89% | 3.26% | 33.73% | 23.76% |
| Noninterest revenues/total revenues (GAAP) | 38.5% | 37.6% | 10.8% | 36.2% | 37.1% |
| Noninterest revenues/operating revenues (FTE)(2) (non-GAAP) | 38.5% | 37.6% | 37.1% | 36.2% | 37.2% |
| Efficiency ratio (GAAP) | 66.4% | 64.5% | 91.6% | 60.2% | 61.6% |
| Operating efficiency ratio (non-GAAP) | 64.3% | 61.7% | 62.5% | 58.2% | 59.3% |
| Summary of Financial Data (unaudited) | | | | | |
| (Dollars in thousands, except per share data) | | | | | |
| | 2023 | 2022 |
| | 3rd Qtr | 2nd Qtr | 1st Qtr | 4th Qtr | 3rd Qtr |
| Components of Net Interest Margin (FTE) | | | | | |
| Loan yield | 4.92% | 4.75% | 4.59% | 4.39% | 4.22% |
| Cash equivalents yield | 4.97% | 4.27% | 3.49% | 2.83% | 1.76% |
| Investment yield | 1.96% | 2.07% | 2.01% | 1.85% | 1.80% |
| Earning asset yield | 3.94% | 3.82% | 3.63% | 3.34% | 3.18% |
| Interest-bearing deposit rate | 1.09% | 0.84% | 0.45% | 0.26% | 0.17% |
| Borrowing rate | 3.34% | 2.60% | 2.78% | 2.63% | 1.34% |
| Cost of all interest-bearing funds | 1.23% | 0.94% | 0.62% | 0.47% | 0.23% |
| Cost of funds (includes DDA) | 0.88% | 0.67% | 0.44% | 0.33% | 0.16% |
| Net interest margin | 3.07% | 3.14% | 3.17% | 2.99% | 3.00% |
| Net interest margin (FTE) (non-GAAP) | 3.10% | 3.18% | 3.20% | 3.02% | 3.03% |
| Fully tax-equivalent adjustment | $1,034 | $1,080 | $1,091 | $1,118 | $1,118 |
| Average Balances | | | | | |
| Loans | $9,303,479 | $9,072,956 | $8,884,164 | $8,704,051 | $8,333,148 |
| Cash equivalents | 53,279 | 28,491 | 27,775 | 26,501 | 25,730 |
| Taxable investment securities | 4,080,835 | 4,313,875 | 4,760,089 | 5,590,538 | 5,701,691 |
| Nontaxable investment securities | 508,356 | 525,314 | 532,604 | 545,679 | 551,610 |
| Total interest-earning assets | 13,945,949 | 13,940,636 | 14,204,632 | 14,866,769 | 14,612,179 |
| Total assets | 15,123,226 | 15,150,001 | 15,366,863 | 15,665,726 | 15,553,296 |
| Interest-bearing deposits | 8,961,895 | 9,053,199 | 8,925,555 | 8,982,442 | 9,142,333 |
| Borrowings | 619,510 | 523,585 | 717,788 | 879,194 | 481,657 |
| Total interest-bearing liabilities | 9,581,405 | 9,576,784 | 9,643,343 | 9,861,636 | 9,623,990 |
| Noninterest-bearing deposits | 3,810,542 | 3,836,341 | 4,043,494 | 4,198,086 | 4,192,615 |
| Shareholders' equity | 1,605,798 | 1,632,992 | 1,576,717 | 1,476,093 | 1,680,525 |
| Balance Sheet Data | | | | | |
| Cash and cash equivalents | $455,807 | $222,779 | $189,298 | $209,896 | $247,391 |
| Investment securities | 3,960,001 | 4,231,899 | 4,630,741 | 5,314,888 | 5,227,292 |
| Loans: | | | | | |
| Business lending | 3,914,935 | 3,833,697 | 3,747,942 | 3,645,665 | 3,494,425 |
| Consumer mortgage | 3,196,764 | 3,072,090 | 3,019,718 | 3,012,475 | 2,975,521 |
| Consumer indirect | 1,708,302 | 1,644,811 | 1,605,659 | 1,539,653 | 1,461,235 |
| Home equity | 444,764 | 439,186 | 432,027 | 433,996 | 433,027 |
| Consumer direct | 185,301 | 180,985 | 176,989 | 177,605 | 179,399 |
| Total loans | 9,450,066 | 9,170,769 | 8,982,335 | 8,809,394 | 8,543,607 |
| Allowance for credit losses | 64,945 | 63,284 | 63,170 | 61,059 | 60,363 |
| Goodwill and intangible assets, net | 901,334 | 901,709 | 900,914 | 902,837 | 909,224 |
| Other assets | 684,059 | 644,178 | 615,835 | 659,695 | 727,396 |
| Total assets | 15,386,322 | 15,108,050 | 15,255,953 | 15,835,651 | 15,594,547 |
| Deposits: | | | | | |
| Noninterest-bearing | 3,780,519 | 3,855,085 | 3,949,801 | 4,140,617 | 4,281,859 |
| Non-maturity interest-bearing | 7,755,916 | 7,740,818 | 8,106,734 | 7,964,983 | 8,296,993 |
| Time | 1,494,353 | 1,275,883 | 1,054,137 | 906,708 | 907,469 |
| Total deposits | 13,030,788 | 12,871,786 | 13,110,672 | 13,012,308 | 13,486,321 |
| Customer repurchase agreements | 330,252 | 233,469 | 304,607 | 346,652 | 352,772 |
| Other borrowings | 316,837 | 251,284 | 75,684 | 791,123 | 142,528 |
| Accrued interest and other liabilities | 153,506 | 134,105 | 130,977 | 133,863 | 151,763 |
| Total liabilities | 13,831,383 | 13,490,644 | 13,621,940 | 14,283,946 | 14,133,384 |
| Shareholders' equity | 1,554,939 | 1,617,406 | 1,634,013 | 1,551,705 | 1,461,163 |
| Total liabilities and shareholders' equity | 15,386,322 | 15,108,050 | 15,255,953 | 15,835,651 | 15,594,547 |
| Summary of Financial Data (unaudited) | | | | | |
| (Dollars in thousands, except per share data) | | | | | |
| | 2023 | 2022 |
| | 3rd Qtr | 2nd Qtr | 1st Qtr | 4th Qtr | 3rd Qtr |
| Capital and Other | | | | | |
| Tier 1 leverage ratio | 9.44% | 9.35% | 9.06% | 8.79% | 8.78% |
| Tangible equity/net tangible assets(1) (non-GAAP) | 4.81% | 5.34% | 5.41% | 4.64% | 4.08% |
| Loan-to-deposit ratio | 72.5% | 71.2% | 68.5% | 67.7% | 63.4% |
| Diluted weighted average common shares O/S | 53,798 | 54,008 | 54,207 | 54,253 | 54,290 |
| Period end common shares outstanding | 53,427 | 53,528 | 53,725 | 53,737 | 53,736 |
| Cash dividends declared per common share | $0.45 | $0.44 | $0.44 | $0.44 | $0.44 |
| Book value | $29.10 | $30.22 | $30.41 | $28.88 | $27.19 |
| Tangible book value(1) (non-GAAP) | $13.07 | $14.21 | $14.49 | $12.93 | $11.18 |
| Common stock price (end of period) | $42.21 | $46.88 | $52.49 | $62.95 | $60.08 |
| Asset Quality | | | | | |
| Nonaccrual loans | $33,122 | $29,923 | $29,745 | $29,245 | $28,076 |
| Accruing loans 90+ days delinquent | 3,731 | 3,395 | 4,027 | 4,119 | 4,416 |
| Total nonperforming loans | 36,853 | 33,318 | 33,772 | 33,364 | 32,492 |
| Other real estate owned (OREO) | 578 | 623 | 508 | 503 | 527 |
| Total nonperforming assets | 37,431 | 33,941 | 34,280 | 33,867 | 33,019 |
| Net charge-offs | 1,249 | 706 | 1,511 | 2,054 | 358 |
| Allowance for credit losses/loans outstanding | 0.69% | 0.69% | 0.70% | 0.69% | 0.71% |
| Nonperforming loans/loans outstanding | 0.39% | 0.36% | 0.38% | 0.38% | 0.38% |
| Allowance for credit losses/nonperforming loans | 176% | 190% | 187% | 183% | 186% |
| Net charge-offs/average loans | 0.05% | 0.03% | 0.07% | 0.09% | 0.02% |
| Delinquent loans/ending loans | 0.90% | 0.83% | 0.73% | 0.89% | 0.71% |
| Provision for credit losses/net charge-offs | 230% | 106% | 232% | 135% | 1,415% |
| Nonperforming assets/total assets | 0.24% | 0.22% | 0.22% | 0.21% | 0.21% |
| Quarterly GAAP to Non-GAAP Reconciliations | | | | | |
| Income statement data | | | | | |
| Pre-tax, pre-provision net revenue | | | | | |
| Net income (GAAP) | $44,129 | $48,291 | $5,798 | $52,530 | $48,691 |
| Income taxes | 11,861 | 13,182 | 1,175 | 14,779 | 13,706 |
| Income before income taxes | 55,990 | 61,473 | 6,973 | 67,309 | 62,397 |
| Provision for credit losses | 2,878 | 752 | 3,500 | 2,768 | 5,061 |
| Pre-tax, pre-provision net revenue (non-GAAP) | 58,868 | 62,225 | 10,473 | 70,077 | 67,458 |
| Acquisition expenses | 0 | (1) | 57 | 353 | 409 |
| Acquisition-related contingent consideration adjustment | 80 | 1,000 | 0 | (700) | 0 |
| Loss on sales of investment securities | 0 | 0 | 52,329 | 0 | 0 |
| Gain on debt extinguishment | 0 | 0 | (242) | 0 | 0 |
| Unrealized loss on equity securities | 49 | 50 | 0 | 20 | 4 |
| Adjusted pre-tax, pre-provision net revenue (non-GAAP) | $58,997 | $63,274 | $62,617 | $69,750 | $67,871 |
| | | | | | |
| Pre-tax, pre-provision net revenue per share | | | | | |
| Diluted earnings per share (GAAP) | $0.82 | $0.89 | $0.11 | $0.97 | $0.90 |
| Income taxes | 0.22 | 0.25 | 0.02 | 0.27 | 0.25 |
| Income before income taxes | 1.04 | 1.14 | 0.13 | 1.24 | 1.15 |
| Provision for credit losses | 0.06 | 0.01 | 0.07 | 0.06 | 0.10 |
| Pre-tax, pre-provision net revenue per share (non-GAAP) | 1.10 | 1.15 | 0.20 | 1.30 | 1.25 |
| Acquisition expenses | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Acquisition-related contingent consideration adjustment | 0.00 | 0.02 | 0.00 | (0.01) | 0.00 |
| Loss on sales of investment securities | 0.00 | 0.00 | 0.96 | 0.00 | 0.00 |
| Gain on debt extinguishment | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Unrealized loss on equity securities | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Adjusted pre-tax, pre-provision net revenue per share (non-GAAP) | $1.10 | $1.17 | $1.16 | $1.29 | $1.25 |
| Summary of Financial Data (unaudited) | | | | | |
| (Dollars in thousands, except per share data) | | | | | |
| | 2023 | 2022 |
| | 3rd Qtr | 2nd Qtr | 1st Qtr | 4th Qtr | 3rd Qtr |
| Quarterly GAAP to Non-GAAP Reconciliations | | | | | |
| Income statement data | | | | | |
| Net income | | | | | |
| Net income (GAAP) | $44,129 | $48,291 | $5,798 | $52,530 | $48,691 |
| Acquisition expenses | 0 | (1) | 57 | 353 | 409 |
| Tax effect of acquisition expenses | 0 | 0 | (12) | (78) | (90) |
| Subtotal (non-GAAP) | 44,129 | 48,290 | 5,843 | 52,805 | 49,010 |
| Acquisition-related contingent consideration adjustment | 80 | 1,000 | 0 | (700) | 0 |
| Tax effect of acquisition-related contingent consideration adjustment | (17) | (214) | 0 | 154 | 0 |
| Subtotal (non-GAAP) | 44,192 | 49,076 | 5,843 | 52,259 | 49,010 |
| Loss on sales of investment securities | 0 | 0 | 52,329 | 0 | 0 |
| Tax effect of loss on sales of investment securities | 0 | 0 | (11,171) | 0 | 0 |
| Subtotal (non-GAAP) | 44,192 | 49,076 | 47,001 | 52,259 | 49,010 |
| Gain on debt extinguishment | 0 | 0 | (242) | 0 | 0 |
| Tax effect of gain on debt extinguishment | 0 | 0 | 52 | 0 | 0 |
| Subtotal (non-GAAP) | 44,192 | 49,076 | 46,811 | 52,259 | 49,010 |
| Unrealized loss on equity securities | 49 | 50 | 0 | 20 | 4 |
| Tax effect of unrealized loss on equity securities | (10) | (11) | 0 | (4) | (1) |
| Operating net income (non-GAAP) | 44,231 | 49,115 | 46,811 | 52,275 | 49,013 |
| Amortization of intangible assets | 3,576 | 3,705 | 3,667 | 3,794 | 3,837 |
| Tax effect of amortization of intangible assets | (757) | (793) | (783) | (833) | (843) |
| Subtotal (non-GAAP) | 47,050 | 52,027 | 49,695 | 55,236 | 52,007 |
| Acquired non-PCD loan accretion | (948) | (886) | (1,079) | (1,138) | (1,397) |
| Tax effect of acquired non-PCD loan accretion | 201 | 190 | 230 | 250 | 307 |
| Adjusted net income (non-GAAP) | $46,303 | $51,331 | $48,846 | $54,348 | $50,917 |
| | | | | | |
| Return on average assets | | | | | |
| Adjusted net income (non-GAAP) | $46,303 | $51,331 | $48,846 | $54,348 | $50,917 |
| Average total assets | 15,123,226 | 15,150,001 | 15,366,863 | 15,665,726 | 15,553,296 |
| Adjusted return on average assets (non-GAAP) | 1.21% | 1.36% | 1.29% | 1.38% | 1.30% |
| | | | | | |
| Return on average equity | | | | | |
| Adjusted net income (non-GAAP) | $46,303 | $51,331 | $48,846 | $54,348 | $50,917 |
| Average total equity | 1,605,798 | 1,632,992 | 1,576,717 | 1,476,093 | 1,680,525 |
| Adjusted return on average equity (non-GAAP) | 11.44% | 12.61% | 12.56% | 14.61% | 12.02% |
| | | | | | |
| Net interest margin | | | | | |
| Net interest income | $107,786 | $109,279 | $111,030 | $112,223 | $110,394 |
| Total average interest-earning assets | 13,945,949 | 13,940,636 | 14,204,632 | 14,866,769 | 14,612,179 |
| Net interest margin | 3.07% | 3.14% | 3.17% | 2.99% | 3.00% |
| | | | | | |
| Net interest margin (FTE) | | | | | |
| Net interest income | $107,786 | $109,279 | $111,030 | $112,223 | $110,394 |
| Fully tax-equivalent adjustment | 1,034 | 1,080 | 1,091 | 1,118 | 1,118 |
| Fully tax-equivalent net interest income | 108,820 | 110,359 | 112,121 | 113,341 | 111,512 |
| Total average interest-earning assets | 13,945,949 | 13,940,636 | 14,204,632 | 14,866,769 | 14,612,179 |
| Net interest margin (FTE) (non-GAAP) | 3.10% | 3.18% | 3.20% | 3.02% | 3.03% |
| | | | | | |
| Summary of Financial Data (unaudited) | | | | | |
| (Dollars in thousands, except per share data) | | | | | |
| | 2023 | 2022 |
| | 3rd Qtr | 2nd Qtr | 1st Qtr | 4th Qtr | 3rd Qtr |
| Quarterly GAAP to Non-GAAP Reconciliations | | | | | |
| Income statement data | | | | | |
| Earnings per common share | | | | | |
| Diluted earnings per share (GAAP) | $0.82 | $0.89 | $0.11 | $0.97 | $0.90 |
| Acquisition expenses | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Tax effect of acquisition expenses | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Subtotal (non-GAAP) | 0.82 | 0.89 | 0.11 | 0.97 | 0.90 |
| Acquisition-related contingent consideration adjustment | 0.00 | 0.02 | 0.00 | (0.01) | 0.00 |
| Tax effect of acquisition-related contingent consideration adjustment | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Subtotal (non-GAAP) | 0.82 | 0.91 | 0.11 | 0.96 | 0.90 |
| Loss on sales of investment securities | 0.00 | 0.00 | 0.96 | 0.00 | 0.00 |
| Tax effect of loss on sales of investment securities | 0.00 | 0.00 | (0.21) | 0.00 | 0.00 |
| Subtotal (non-GAAP) | 0.82 | 0.91 | 0.86 | 0.96 | 0.90 |
| Gain on debt extinguishment | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Tax effect of gain on debt extinguishment | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Subtotal (non-GAAP) | 0.82 | 0.91 | 0.86 | 0.96 | 0.90 |
| Unrealized loss on equity securities | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Tax effect of unrealized loss on equity securities | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Operating diluted earnings per share (non-GAAP) | 0.82 | 0.91 | 0.86 | 0.96 | 0.90 |
| Amortization of intangible assets | 0.07 | 0.07 | 0.07 | 0.07 | 0.07 |
| Tax effect of amortization of intangible assets | (0.01) | (0.01) | (0.01) | (0.02) | (0.02) |
| Subtotal (non-GAAP) | 0.88 | 0.97 | 0.92 | 1.01 | 0.95 |
| Acquired non-PCD loan accretion | (0.02) | (0.02) | (0.02) | (0.02) | (0.02) |
| Tax effect of acquired non-PCD loan accretion | 0.00 | 0.00 | 0.00 | 0.01 | 0.01 |
| Diluted adjusted net earnings per share (non-GAAP) | $0.86 | $0.95 | $0.90 | $1.00 | $0.94 |
| | | | | | |
| Efficiency ratio (GAAP) | | | | | |
| Noninterest expenses (GAAP) – numerator | $116,504 | $113,038 | $114,052 | $105,852 | $108,185 |
| Net interest income (GAAP) | 107,786 | 109,279 | 111,030 | 112,223 | 110,394 |
| Noninterest revenues (GAAP) | 67,586 | 65,984 | 13,495 | 63,706 | 65,249 |
| Total revenues (GAAP) – denominator | 175,372 | 175,263 | 124,525 | 175,929 | 175,643 |
| Efficiency ratio (GAAP) | 66.4% | 64.5% | 91.6% | 60.2% | 61.6% |
| | | | | | |
| Noninterest operating expenses | | | | | |
| Noninterest expenses (GAAP) | $116,504 | $113,038 | $114,052 | $105,852 | $108,185 |
| Amortization of intangible assets | (3,576) | (3,705) | (3,667) | (3,794) | (3,837) |
| Acquisition expenses | 0 | 1 | (57) | (353) | (409) |
| Acquisition-related contingent consideration adjustment | (80) | (1,000) | 0 | 700 | 0 |
| Total adjusted noninterest expenses (non-GAAP) | $112,848 | $108,334 | $110,328 | $102,405 | $103,939 |
| | | | | | |
| Operating efficiency ratio (non-GAAP) | | | | | |
| Adjusted noninterest expenses (non-GAAP) - numerator | $112,848 | $108,334 | $110,328 | $102,405 | $103,939 |
| Fully tax-equivalent net interest income | 108,820 | 110,359 | 112,121 | 113,341 | 111,512 |
| Noninterest revenues | 67,586 | 65,984 | 13,495 | 63,706 | 65,249 |
| Acquired non-PCD loan accretion | (948) | (886) | (1,079) | (1,138) | (1,397) |
| Unrealized loss on equity securities | 49 | 50 | 0 | 20 | 4 |
| Loss on sales of investment securities | 0 | 0 | 52,329 | 0 | 0 |
| Gain on debt extinguishment | 0 | 0 | (242) | 0 | 0 |
| Operating revenues (non-GAAP) - denominator | 175,507 | 175,507 | 176,624 | 175,929 | 175,368 |
| Operating efficiency ratio (non-GAAP) | 64.3% | 61.7% | 62.5% | 58.2% | 59.3% |
| Summary of Financial Data (unaudited) | | | | | |
| (Dollars in thousands, except per share data) | | | | | |
| | 2023 | 2022 |
| | 3rd Qtr | 2nd Qtr | 1st Qtr | 4th Qtr | 3rd Qtr |
| Quarterly GAAP to Non-GAAP Reconciliations | | | | | |
| Balance sheet data | | | | | |
| Total assets | | | | | |
| Total assets (GAAP) | $15,386,322 | $15,108,050 | $15,255,953 | $15,835,651 | $15,594,547 |
| Goodwill and intangible assets, net | (901,334) | (901,709) | (900,914) | (902,837) | (909,224) |
| Deferred taxes on goodwill and intangible assets, net | 44,593 | 45,003 | 45,369 | 46,130 | 48,893 |
| Total tangible assets (non-GAAP) | $14,529,581 | $14,251,344 | $14,400,408 | $14,978,944 | $14,734,216 |
| | | | | | |
| Total common equity | | | | | |
| Shareholders' equity (GAAP) | $1,554,939 | $1,617,406 | $1,634,013 | $1,551,705 | $1,461,163 |
| Goodwill and intangible assets, net | (901,334) | (901,709) | (900,914) | (902,837) | (909,224) |
| Deferred taxes on goodwill and intangible assets, net | 44,593 | 45,003 | 45,369 | 46,130 | 48,893 |
| Total tangible common equity (non-GAAP) | $698,198 | $760,700 | $778,468 | $694,998 | $600,832 |
| | | | | | |
| Shareholders’ equity-to-assets ratio at quarter end | | | | | |
| Total shareholders’ equity (GAAP) - numerator | $1,554,939 | $1,617,406 | $1,634,013 | $1,551,705 | $1,461,163 |
| Total assets (GAAP) - denominator | 15,386,322 | 15,108,050 | 15,255,953 | 15,835,651 | 15,594,547 |
| Net shareholders’ equity-to-assets ratio at quarter end (GAAP) | 10.11% | 10.71% | 10.71% | 9.80% | 9.37% |
| | | | | | |
| Net tangible equity-to-assets ratio at quarter end | | | | | |
| Total tangible common equity (non-GAAP) - numerator | $698,198 | $760,700 | $778,468 | $694,998 | $600,832 |
| Total tangible assets (non-GAAP) - denominator | 14,529,581 | 14,251,344 | 14,400,408 | 14,978,944 | 14,734,216 |
| Net tangible equity-to-assets ratio at quarter end (non-GAAP) | 4.81% | 5.34% | 5.41% | 4.64% | 4.08% |
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| (1) Includes deferred tax liabilities related to certain intangible assets. |
| (2) Excludes loss on sales of investment securities, gain on debt extinguishment and unrealized loss on equity securities. |
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