CBU - Earnings call transcript Q3 2021 | Community Bank System, Inc.

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Operator

Good day and welcome to the Community Bank System Third Quarter 2021 Earnings Conference Call. Please note that this presentation contains forward-looking statements within the provisions of the Private Securities Litigation Reform Act of 1995 that are based on current expectations, estimates and projections about the industry, market and economic environment in which the company operates. Such statements involve risks and uncertainties that could cause actual results to differ materially from those results discussed in these statements. These risks are detailed in the company's Annual Report and on Form 10-K files with the Securities and Exchange Commission. Today's call presenters are Mark Tryniski, President and Chief Executive Officer; and Joseph Sutaris, Executive Vice President and Chief Financial Officer. by for Executive the joined Chief President be Officer Banking question-and-answer will Joseph Vice Serbun, and They session. Gentlemen, you may begin.

Mark Tryniski

Good quarter hope Thank joining Jade. morning, thank and you, you our third is conference everyone We call. well. everyone for

credit the loan were services, to I story in tailwinds. our credit quarter. like of be We are the have really influences for by a businesses. line by us ex and in businesses several our past the right this be fees, momentum right of think portfolios headwind, impacted good continued the growth quarter PPP the saw and strength quarters. we one with financial that encouraged across was very every for bigger activity trends same earnings our all We're of The and pipelines of quarter our expectations Margin growth. market these And in deposit continues and quarter now and had our to strong. this

We earnings also that to the additive quarter, will be our opportunity, future in the market given well. and securities as increased book

with pretax I businesses strength XXXX. the in up services of financial on will and more earnings and revenues of quarter The XX% recent strength our the XX% provide think that. Joe -- continued detail over

of consulting out also down performance offices Fringe and We services and of administration Dakota. the Benefits of Their with Design acquisition has provider in close gate plan of Minnesota, been retirement a South the Minneapolis exceptional.

a business. will that benefits be expect productive addition we our to So

businesses. a are M&A pricing very now, and well what wealth, environment are right and businesses insurance extremely growth, performing benefits, Our for those all productive in

our for and judgment continuing System. previously has to Vice efforts. us joined her as tremendous business delighted forward Maureen role Officer. We held HSBC, the that President contributions capital to Resources I'm USA, and On Community bring announced, experience, and look Human previously will to same front, expertise She we human the Executive capital human as Chief Gillan-Myer Bank

earlier asset month, State. we a accretive an agreement Finger the $X.XX announced full $XXX Elmira It's million very with excluding to York bank a offices a of and a business this year will share acquisition across with risk acquire a New regions per nice tier Lastly, good XX very that Lakes we on Savings be Bank, expenses, transaction. basis, expect low very franchise productive southern so mortgage

We have closing targeted in QX a next of date year.

ahead, the Looking businesses. like all Joe? company we of across momentum our our current in

Joseph Sutaris

and Mark, you, morning, good Thank everyone.

revenues, in quarter, or fully diluted recorded income, noninterest and driven with diluted decrease linked share prior results, year's $X.XX of quarter noted revenues. earnings net As interest X.X% income $X.XX third the $X.XX revenues over revenues total were $XXX.X is the company results a per earnings increase the XXXX, Mark million solid, in XXXX $X.X in million, in third offset offset or per increase non-banking fully earnings prior noninterest of from by million net income. total $X.X million decrease GAAP higher second and in banking than increase of but was or net X.X% XX.X% XXXX. operating The Comparatively, increase The in earnings in share X.X% driven by GAAP decrease by GAAP million the per third company of increases and total in costs in or were interest services or revenues share a revenues as a part quarter increase quarter fully and third of $X.X operating per of the that in up results X.X% Total $X.XX. recorded were the revenues $X.X revenues $X.X accounted between third noninterest higher Total related in periods quarter share in the below $X.X company's on related X.X% expenses increase in as GAAP by million quarter $X.X services million or credit the X% earnings banking income earnings the the X.X% operating and an an million services share company's the of businesses. shares outstanding decrease XXXX operating taxes an XX% part for noninterest operating revenues a related in lower The and basis. year's by or or in $X.X financial results driven diluted a well revenues financial in third million particularly the and in quarter. quarter increase interest per financial second

X.XX% Although the yield five yield year net quarter the continue year, slightly lower compared margin second from for in interest net quarter income a linked XXXX net be X.XX% achieved point quarter of the X.XX% outcome, to abundance periods. last decrease tax between interest low the results were the equivalents quarter interest total prior, results the interest quarter. down company's balance a for basis of earning was or X.XX% the equivalent to tax margin as only rate company's third basis to assets points cash and equivalent company's as the margins prior. Compared third higher negatively low impacted was XXXX sheet. XXXX margin in environment the significantly the year interest than second same the in Net tax quarter by of the X.XX% on third being was was and to maintained on The of one XX net interest X.XX%, compared one

based of and nine XXXX third billion, million The revenues income by during revenues. services year $X.X X.X% quarter company's of million, remained acquisition up primarily quarter revenues were interest increases in increase in $X.X Design second factors. and million recognized was On from revenues $X income, XXXX benefit million points On driven third cost in in by the the up of was by by and $X.X deposits XXXX. million, in offset a PPP service $XX.X is million, of increase incremental Fringe custodial quarter deferred revenues quarter revenues XXXX. noninterest fees. $XX.X the basis to and X.X%. million, $X.X of or X.X% however, up employee Employee businesses or same in banking fees the the as a in interest million During revenues and related or Minnesota the acquisition growth of banking million mortgage third company of million year-to-date acquisition quarter Insurance total in Boston net basis, improvement This from driven The has averaging by of revenues XXXX. Banking the third management $X.X financial prior or Wealth This were year's third fees. of interest noninterest in $XX.X of driven quarter quarter Benefits a than million, quarter of benefit the XX.X% third the third well million, a quarter insurance million million for third other or over XXXX. third during compares decreased to or million PPP-related increases higher of were $X.X quarter of net third banking XX.X% revenues trust the wealth investment And as recognized quarter, of revenues part loan $X.X deposits and $X.X income, the services quarter momentum $X.X X%, quarter. $X.X up the of from company income, trust specialty-lines linked $X.X were XXXX. up services last for services million the decrease management were practice. XXXX $X.X organic $X.X these reflective the linked organic of low of in the million the in or XX.X% related management in the including driven $XX.X million PPP-related quarter, basis the $X.X recognized

the provision third $X.X to credit During company's losses year $X.X quarter annualized net charge-offs XXXX, This loan in points The the losses basis a in recorded company both for million. prior only the third and for provision seven benefit quarter. of million were compares credit a of periods. net reported

expenses between in forecasts of Operating $XX the between at vaccine with million of XXXX, for income state of two operating from XXXX. total compared due certain million operating an third or cash the total million increased of the asset quarter sheet of net loans, quarter million and the economic taxes recorded XXXX third higher expenses the elevated September were economic The or The communication of values third forecasts company from during economic billion or increase company's X.X% On XXXX also primarily Occupancy litigation second which the the basis $X.XX drove year-to-date during second equipment of continued real post or expenses. company quarter was by in of securities a recorded up quarter. higher totaling operating $XXX.X $X.X% loans million, $X.X $XXX.X direct third in in year the Ending the growth $X.XX loans of acquisition in technologies, and the the combination quarter total primarily new quarter the $XXX.X driven by equivalents points mortgages, expenses in loan are by payroll the wage low decreased X.X% expenses in exclusive an were balance increase employee periods. The tax was expenses of X.X% second course, and rate third due company's employee XXXX or effective and second employee and driven September the related elevated estate as enacted $XX down $X.X equity million, activity charge-offs periods. all in increases, quarter facing implementation business of XX.X% up $X.X $X.XX to tax billion the quarter $XXX.X end benefits The in which the third PPP. the of of expected systems of the expenses cash million salaries third X.X% the between of of company increases, the business or threshold and million, ending losses. expenses due slightly billion digital due the the annualized. increased recovery, was or in million, of the comparable loan billion, direct In loan basis, purchasing incentive-related and inflows than in attributable loans, quarter driven and prior favorable $X.X investment XXXX increased branch Data consumer Other $XX.X quarter one loans deposits and consumer in segments, third collateral the company comparison, processing This more the than quarter. During related the of of office X.X% life ending of comparable excluding the million, XXXX, X.X% five despite vehicle $XX.X to crested a home quarter, of consumer taxes consolidation between XXXX back or were activities total $XXX.X activities. the million yielding quarter level million customer acquisition increase to X.X% general rate $X.X to to $X.X recorded PPP and than lower that end portfolio XXXX. in XX.X%, million XX, staffing remained the and increase which to in in to merit excluding higher at increase benefit-related was to The million lending were periods. expense quarter. effective increase up XXXX. XXXX the

of are availability million, to of remaining went X.XX% from loans of XXXX, of This loss at end unpledged X.XX% charge-offs or balance billion the a XXXX, of levels September low million, Management linked decrease the XXXX, PPP been at net $XX.X million, quarter million which this As $X.X X%. totaling $XXX.X XXXX. company's totaled down X.XX%, government decrease Federal Reserve or to with quarter. to September the to and XXXX. due loans. At million, compares XX X.XX% was $XX.X compares PPP X net and quarter the compares an well-capitalized X,XXX to to XXXX, the borrowing X.XX% regulatory loans X.XX% company unimpaired at business deferred provided decreased delinquent quarters. borrowing the certain Company's from reclassification with of the and loans Bank, million end Loan reserves, standard status cash quarter one has X.XX% portfolio The economic second outstanding million Nonperforming up September this is end between prior million end second delinquent the of $X.XX at down loans quarter Company's of abundance the Home losses company loans the was fees credit outstanding. lending XXth, Xx at balance hotels non-accrual and of Loans forbearance, at of at the to the $XXX.X losses and $XX.X This second $XX.X $XX or of the outstanding loans in specific total credit at consumers earlier leverage of X.XX% the strong the at few third its X.XX% by securities financial XX, of state available June loans from portfolio The company XX, outstanding to at days low the of Federal XX, company's the ratios expects periods. allowance X.XX% loans extended available-for-sale second XX, The primarily an total in over company's the to company's immediately ratio the PPP throughout the charge-offs XX, loans levels of and XXXX the of total X.XX% linked and second of included or year total at of loans of at for million, to year $XX.X the of a third over from the improving of Tier the X,XXX outstanding loan sources next September recognize end the of ratio investment outstanding, the totaled loans in accrual quarter. of was for liquidity of XXXX. third reflective very the quarter; combination XX provided X.XX% end remain XX, net outlook, the extraordinary September in capital with assets September XXXX, pandemic. of cash under quarter. XXXX equivalents, capacity total X.XX% supported and systems liquidity, federal Bank, at at believes of The or has of nearly tangible

stock. per increase During consecutive dividend the third year to company increased its on the penny its increases. the dividend of cash marked X.X% share quarter quarterly $X.XX XXth $X.XX common XXXX, or This company's of

we'll we opportunities focused continue deploy new on conditions to forward, the remain generation monitor to and Looking seek loan market to right excess liquidity.

robust Our quality remains and loan pipelines asset are very strong.

our pressures Mark's in noninterest below Elmira and Lakes to earnings of expect presence our New represents significant of equivalents York, businesses XX, with lastly, total to $XXX.X also also margin partnering supported of levels net opportunity. enhance well We're of cash will At and have abundance Pierre pre-pandemic non-banking We also of a XXX has strong Finger diversified we interest fortunate had for our it are persist $XXX.X million. Savings to its five streams to regions. our pleased net have excited revenue. million, and pleased in and but June And remain echo Elmira assets that to future Southern be and XXXX, deposits believe community total Elmira been years; loans serving $XXX.X Bank. million counties comments

closing Bank approvals. customary the by We to and conditions, in Elmira subject XXXX, Thank first expect you of complete to acquisition the quarter the shareholders all. of Savings regulatory approval including required

Chad it questions. I'll open Now the line turn back for to

Operator

Sandler. Instructions] Twerdahl first today from the with And Alex be question Piper [Operator will

AlexTwerdahl

just good off, for little talk a wanted guys. Yes, growth Hey, bit. to morning, long first about

trend. an some on grower long been low single and sort you on the think single growth pipelines basis you on kind what do historical the organic on historically, been of of an organic something that commentary can of an quarter you to has Based higher has maybe basis. the be your guys basis rate this that digit outlook, did have of than loan that on shifted digit and sort and low annual think I the

MarkTryniski

further, couple Yes, I little achieve Alex, I fair. we consistently right. then of Joe single if make good Historically low to be think don't a bit question. I'll Serbun that a know as but comment digits, And to comments. you're

to lot our shareholder think us markets, in done reasonably those but also We've have markets, that we're well as in done I kind -- think we without I given opportunities, we've they're growth also M&A -- we've create executed focus to a to in we've the and, on think growth think, an for always businesses markets. our low markets, opportunity our would an organically think I I better have a so starting M&A terms of value, having bit. execute that's and little additive, opportunity the difficulty of been of we I loan

we I strategy, organic we've So do it's even tremendous of side, a we think but that in difference meaningful. bit I can a think organically, I will significant that's can, the And And move just fairly needle little been think earnings make think potential. a well, I if a executed pretty better. the terms we can bit on

I we've and effort that I little quality think, So organic structure, better a put a in to bit resources, a bit see opportunities resources, in that greater of and our of optimizing think support just, terms doing on we're our focus process systems markets into starting and more that.

you that what guess workflows with backdrop. bit can a a we're comment different maybe further, doing the So and there. Joe, little as I on

JosephSerbun

morning. good Alex, Sure.

of So comments. a couple

folks, for in us. we've of opportunities. into think marketplaces, which markets greater a the have leadership if if those geography right I positions And some look in at couple significant has our over provides difference that bigger us made First, you the expanded been last years, I

markets organically, grow been good. in So able larger is the which we've some to of

of us to advantage we're take On more grow and outsourcing time business. the technology end, to smaller to some looking the next spend the allow opportunities

so utilize approvals. expedite tripled spectrum, -- on or efforts processing business And pipeline, and on end And to again, And technology from as us. side, focus, the the the almost that's help that an marketplace has of of given increase small to the increased to it's grow that grow year. calling just the mentioned, small we'll Joe hope beginning the organically

execute. concentrated, in we've And past positions, So exceed it's that loan growth continue it's of over to right regimented, dedicated, management us of it's to for new, the some experienced folks we the organically for got lighter us the nothing or to line in to years. couple it's right the

MarkTryniski

I add The is markets only Alex this to in portfolio. better in our it that to would we let's change. thing cycle, very that our want about risk or of to credit is made And not not that our is That credit terms going upfront. clear call we across sales execute just quality different

achieve So anything expense any at -- not this will credit we is we improvement be not quality. are that the that of

JosephSerbun

That's the thing, more do Alex, of of the more do same. the same.

AlexTwerdahl

just commentary, just Is pipelines? pipeline years. since helpful comment of the commercial tripled the or on been That's that the beginning the have Right. pipelines overall

JosephSerbun

resi hung year the surpasses tell is pipeline, it there. year. to mortgage in Residential last the us that for volume volume So commercial of the will in continues that's there is nicely I pipeline full application too. strong. application September mortgage our through And did the the side pipeline you all on we be mortgage hung for

fourth as the well bodes into So we're us for that quarter. heading

the essentially So it end through of year. the should carry strong us a that it's carry pipeline and

AlexTwerdahl

versus and balance market. the to plan it into sheet to put Great the secondary residential are continue on selling

JosephSerbun

Correct.

AlexTwerdahl

that quarter much it talk to you which show I you can how might alluded acquisitions other be of the would the it. to be be of And -- came non-recur remarks I where in to Great. and about line related the you prepared in, put it How that during the quarter, the might did rate, last this best the much just it benefits out to then run versus me came about way in -- is guess the quarter? about jumped salary thing think

on the the so next quarter, year? prior Elmira to And layering should expectation what be fourth for

JosephSutaris

that's good question, very Yes, a Alex.

and were for basis, just rate, backdrop lot $XX rate So just run million had was reasons, board business various were down average we across businesses. some to of pandemic a some quarterly million prior and the and run the on to and kind that's we an calling the pandemic, a somewhere of across a around less to color, that provide decreases in expenses some all of then just travel, our hit, new activities $XX

low very in pandemic, So last the down to they our operating $XX expenses came $XX during million were the range. in million year,

the acquisitions added general level had OpEx levels, amortization was including, setting about somewhere sort $X components of run a added rate $X totaling $XX about of two total, the million the likely all-in to $X OpEx. the, range, back call couple So million probably one that the post But it to, in total $XX quarter, couple transactions. had pre-pandemic nonrecurring is million million million or a the we items, of to we -- of a in dollars million, maybe the that the a added quarter. We those during column

a So, the really, we first $X would, million, most higher back do of, at forward you can in expectations we going payroll on quarter, the quarters incur number of look first I when somewhere that maybe for hit this quarter, range, off, taxes. kind and, basis,

bump So we're obviously, little then, first a point standpoint, it closing, going successful in we that from quarter, will and OpEx forward. there get if Elmira, late the usually an from change

AlexTwerdahl

wise quarter. $XX.X rate of benefits is going more that decent is run Okay, so and salaries a that the next million pretty the into

JosephSutaris

think rate that's run decent going next a into I quarter.

fourth the but the rate. run that couple fourth what than in probably a items use, quarter expectations. the in I third there if quarter, higher those little we incurred not would our a bit I'm was sell other sure will down quarter conservatively, The in for

Operator

from & The next Boenning from Zwick will be Erik question Scattergood.

ErikZwick

the mentioned yield to you kind expectations the as you're color and terms In remarks, you Curious duration XQ of for magnitude in securities could some as there add? looking portfolio. what of guys. well any in make prepared of morning, Good plans in the to provide if investments some

JosephSutaris

Yes, I'll that, take Erik.

third some at activity, purchased most a on in So million of securities five basis hit of we end blended and which in year the in markets a at $XXX belly curve, the of of $XXX the the about paper, the quarter. seven really kind we million saw at opportunities of of some, quarter, type end we the on came and the

So into we benefit income purchases kind But the active, the as the realize back we that we're of really didn't of range get interest during those rates quarter. were hopeful for.

If you we've recall, rates we were the bit. we've the second since on the couple the little $XXX quarter, end closed active sidelines a of another are at been with quarter. million, Actually, up

But, So interest a continued be the net rest active. standpoint, necessarily, we deposits see us is what upside need income holds us. the from of providing to of couple Certainly back the expect of to for not great quarter not pre-pandemic quarter continued inflow outcome. tune We'll and a million. the market to levels, fourth a the I to would total but throughout in continue $XXX margin active it the will be

ErikZwick

And expectations the the when for and occur? point or see at least you I to strong are start just another work your put income here interest the so. interest securities net margin, aspect if that more Thanks. larger as bottom pipeline net sounds the hear margin the where sheet growing that profitability you're potentially can loan like does. interest thinking for And about increase really going and to balance to again? Or might the net you on a is Do what core quarter

JosephSutaris

question. it want just the three comment a And Yes, PPP was the $XX in Erik, qualify good to million. that's first for that quarters income, very I about

the of the net securities taking replacement, some activities in were took quarter hopefully quarter third so of on you effectively a be are that some third with income income, and if regard. will, will levels into that quarter, that interest that comparable the of the on So fourth PPP the

around something, on our it's kind you under it's kind bit, little was it's the and a PPP, loan portfolio the of going X.XX% a the quarter, a our for X.XX% of little on However, back about a loan on side, half. X.XX%, -- volumes new a yield three down out if

challenge what is increases So having the is the lower a giving volume market us right now. which yield, the perspective from loan the outpace is

becomes So move really that as ahead. challenges we the

income of hopefully, little interest even head above the keep side. and lower on rate, we So can though the growth the it's the between water size out pipeline, going a our loan

low the and another side maybe of do about much going basis as to cost go fund difficult funding But we're basis as points, point. the there's in to at really we're On side it's this point there. on maybe, nine

ErikZwick

helpful. the thinking improving referenced and reserves the estate as provision run And better in And guess just quarters. about loss Thanks. the for values loan you for then That's then the I automobiles today, real more economy PPP for outlook continues collateral the such. as well to and off a couple

we you to Again, happy point some point, reserves puts how see net seeing the provisioning? at the of start loan are to think guess, those has is I to the get with, today, should positive where growth, it's kind where to start you you're takes? If and about model this

JosephSutaris

a in of Yes, so moving there's parts there, Erik. couple

typically, would -- would to I the level. of need you yes, the to positive that outlook provision, the more reserve economic go dollars, that and is a and with variable growth, reserve loan therefore expect we can side impact can So change

to So, remains be that seen.

the quantitative too, components of lower. it's charge-offs history The that, basis model history, of of now a part kind of is charge-offs we have the model. the other the And just, the is thing is

last in charge-offs significant had XX haven't months. We the

side. the impacts quantitative also that so And

bake model. have also, into to there's So that the we

If are future. would pretty provisioning be that believe a and last But in necessarily nonetheless, on I XXx and last now, to But probably, point. my element. positive much improve But fair it's is be last at will don't really the it's you look the our of historical that the levels, high right of there the hard at the charge-offs XX kind about to, indicative this reserve to charge-offs economic would provisioning relative charge-offs, months, expectation months probably XX this but at is you guess our looking think, reserves be point. closer at four I months best

Operator

The Gunther from question Davidson. will D.A. Russell next with be

RussellGunther

within and and might good strong outlook, Hey, going revenue revenue an continue supplement your spend benefits us fee expectations the have want to outlook I share organic on Thank continued to income organic forward on to you guys. morning, really insurance basis with to be you acquisitions? growth if and just we differentiated expect then with for a Could what well, you. the verticals. able could, minute in employee

MarkTryniski

performed I is it businesses is Russ, pretty the think well. good those pricing of terms potential in in that environment Mark. And the It's opportunities, good. those for markets businesses really since really those growth, COVID, and

Some are equity that's be market as been dependent, markets well, the to additive strong. because of them continued which, and

have they than So, revenues of wealth also number, for the couple by the they've they're of extremely expenses. well they've to been all as strong, And all course, past continue four their I of benefits, last quarters, growing a the performed been years, really of interestingly but faster they're, of enough, their tremendously strong. insurance late grow. mean,

growing actually are well. as margins the So

derail don't the see on that into necessarily horizon could I anything the So that future.

as activity There those has non side, in So to conditions bank in. which I the think bit space been well, hopefully we will fair a on participated benefit of exist. M&A the continue

We foreseeable to think continue well. at continue there. as opportunities have the into might We those that least future

of we and upward. that's during else, everyone On it's stream, started is got very revenues The back. interchange around to we where been debit regulatory be was, overdraft but bank come as kind that which be And pressure have like continue revenue it's not the really bank conversations may the to hammered about. excuse on trend strong, continue COVID potential well, side, side, there non coming and to it but me, back

number right I hard up predict, pretax to So, XX% hard the earnings we on this it's last a it's now, put quarter pretty We're revenues to non as up bank think as side, and on in businesses. the as gain said, margin well, year, are actually were it. I XX%, over those

to future good foreseeable the predict. can't it's -- you the it's But, So future. look not, continues into

has year to in the had of think I earnings, businesses do. tremendous handicap tremendous a less. up bit. growth think a very insurance bit and business, up business Margin revenues benefits also The wealth in earnings; number revenue little So and the kind this growth is with difficult a fair is it I

that execution three strong quarter, we all and future. expect into of foreseeable really So businesses the those in the in

Operator

be will Inc. Breese The Stephens, with next for question Matthew

MatthewBreese

morning. good May growth. be loan back to going Hi,

that So about those quarter think their you growth the macro two areas headwinds. both showed this mortgage segments distinct And and have most I indirect. the as was

inventory to going is higher chip be mortgage and and indirect rates with So with shortages. dealing

items, long but and headwinds historical specifically on durability averages? hear your the I pipeline, of before those I reverts kind So to the the think do get of as And on thoughts pipeline. how loan and to you sustainability wanted you growth

JosephSerbun

take I'll that. it's Joe. Matthew,

other to we right to going indirect the but And -- growing quarter shortages think head shortages certainly, little the and shortages focus we have on don't, to going beyond a supplies on. chip hit on a little we to clearly heading three bit, something then but spoke prior that difficult the expect slipping where same it the QX little a guess keep going my supply in we are need and it's the or So and side, as the on to our chip about the fourth as bit impact not back magnitude the impact the you quarters. still you in us on to maybe go the be eye when We bit, into and through handicap opportunity. you're

down to through business it's going will I of mortgage grow I a able XXXX. On think little continue to with and think of people, us they dedication the the to resi strategy increased be focus resi But mortgage for bit. model side, slow

MarkTryniski

I've do it just in stable. mortgage up it's business markets, the think markets our our markets in thing markets seen they're more And in of the and where as not valuable ramp that the quickly. as I down is really add cool I'd some bigger don't

much It's of the there's had of that gotten good, you impact the surprising, our business down, that. So able X% is honest, we've car of have be as competitors and the in run as market, up the I'll we kind market can, is some that as considering be to rates and kind that inventory. of out generally rate came shocked of then we growth it's no recession got of all in but of to should X% I'm achieve and business it kind

well. And kind for in time. business in that we've in, stay some So it, in as disruption that we there we was long of market And been get a don't we get don't out.

relationships network. We dealer have our with good

surprised at. an it's basis So our absolute the where at was than it's But I'm that maybe not better growth that surprised I'm market.

If me at. believe car here's of third where But you told the year, would we're in be XX.X% that up our I business, in it. quarter we'd last had not

that'll I well. think probably a So as bit, little down slow

MatthewBreese

Got it.

up Okay. And quarter. back in just Benefits organically? recent space? increase its benefit it before employee to organic much own Services on And quarterly to How out of was nicely this in an should due were How the expect then then was due that grow just much basis? to starts obviously, So business we acquisitions revenues additional revenues it growing acquisitions? you settle turn the services to Employee of to where also mentioned it and businesses,

MarkTryniski

vast think quarter during big not on acquired the FBD growth quarter. was majority the the in came not was acquisition I organic, the that of that

frankly, multiyear it's those So those quarters mostly and over but growth a and four of all of businesses, the success building last for kind businesses organic. process it's beyond

MatthewBreese

on just services margins the you is? lost Benefits Employee income I fees, and sense You associated what the profit in the us Okay, ROA. this the higher; gets mean or But some the for staying on for margin just expenses? with or give what great the business mentioned businesses, efficiency topic. are oftentimes great fee fold could for

MarkTryniski

of tell kind XX%. not over that I though, generally disclose that would you, separately. We it's

MatthewBreese

margin? the On

MarkTryniski

Yes.

MatthewBreese

it. Got

curious the Joe, some then loan securities decent one NIM. the and And little just to I would talked about a if last some for for me, bit the we outlook see Okay. we continue purchases growth, through sustainable NIM, mid acquisition a digit of the that's to of you idea the think growing single outlook core kind for do do on it's low clip, to and have any you been Elmira?

JosephSutaris

Matt. Yes,

sustainable our the think between recognized keep I PPP from net and but slightly know be will some still of I on we because of and purchases. the a asked there's just now think you Elmira fees million transaction think $X But of that have I securities that can PPP security head $X.X some as core well, purchases above kind deferred -- core level, the the as or million of of about water replaced it's about just basis, I well. because of recognition,

we Elmira. be, that until likely think I hit will So the outcome

Operator

turn I this would conference gentlemen, to to over and question-and-answer our closing Tryniski session the concludes like any back Ladies remarks. for

Mark Tryniski

That is here it in us for XQ.

So thank Look you to again Thank you. joining. all you talking forward for in January.

Operator

presentation. Thank you has today's concluded. attending now for The conference

You may now disconnect.

Mark Tryniski	President and Chief Executive Officer
Joseph Sutaris	Executive Vice President and Chief Financial Officer
Joseph Serbun	Executive Vice President and Chief Banking Officer
Alex Twerdahl	Piper Sandler
Erik Zwick	Boenning & Scattergood
Russell Gunther	D.A. Davidson
Matthew Breese	Stephens, Inc

Community Bank System (CBU) 25 Oct 212021 Q3 Earnings call transcript