CBU - Earnings call 4 2023 | Community Bank System, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and welcome to the Community Bank System Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Mr. Dimitar Karaivanov, President and Chief Executive Officer of Community Bank Systems. Please go ahead, sir.

Dimitar Karaivanov

thank Call. joining and QX Bank everyone, Earnings XXXX morning, you Community for Systems Good quarter an fourth The was for us. unusually noisy X company of in balanced The revenues with record and strong the performance X our quarter all businesses. across achieved

full In XXXX, our Benefit and three Employee a had year Insurance fact, Banking, at Services businesses: record of looking Services when the X revenue performance.

sheet remains capitalized. well highly and balance liquid our addition, In

below-average that risk very diversified we served due very this elevated Our emphasis of business meaningful a With and past items. number well in was a volatile had on year. expenses XXXX said, model also during quarter in particularly a us increase to which prominent

available company supported funds, us, regulatory optimistic market about every expectations, than $X forward does businesses. to above X While of capital our this of gain low our we're the well banking as into continue increase this XXXX, not and by it robust was more noisy quarter forward. credit we we going quality With liquidity, of look business, behind core our the cost reflect share levels. In earnings billion excellent of power

serve footprint been and are a Association strong has teams were across opportunity better, National employee named sheet clients business. X open and the business, never balance In quality record we top have pipeline The of all Plan our client national for sizes our to services onboardings our benefit and our by reputation recently the level. keeper is quickly Advisors. growing We at market for of

of headwinds. provide a tailwind In XXXX addition, X into values current years after market

and to M&A insurance organic of operations. XXXX, were the largest top insurance Our ranked activities. XX% as P&C the initiatives is and nation's Insurance benefit Services to in grew country up in continue markets, agency which We XX a X recently bank-owned roll well hard from business, positioned

in from the position positive increased investments back also plus That, their end business levels the had a momentum the management M&A while for regain the constructive are achieving of to operating a XXXX focus for revenue focus more us to in to Simply growth hopeful business assets and previous cost XXXX. our in revenue under positive continue also XXXX. peak Wealth pressures environment XXXX. leverage. our year moderating in put, Our and in We're is well XXXX the

now the We quarter. on on I for details will pass Joe more it to

Joseph Sutaris

Thank and you, morning, everyone. good Dimitar,

quarter, the As earnings diluted certain Dimitar to earnings Fully $X.XX noted, prior were company's results. expenses. elevated were quarter the down the per fourth the due GAAP in year's quarter than from results down noninterest $X.XX third in the and share fourth $X.XX largely quarter linked lower

Fully than earnings measure, quarter share, diluted were the linked share quarter, non-GAAP the share than lower $X.XX the $X.XX prior per a $X.XX per and per operating year's in results. quarter fourth lower

During recorded million the fourth expenses. $XXX.X company in noninterest the quarter,

fraud $X.X special million expense expenses $X.X branch related restructuring the included of to well to contingent FDIC of million related the announced elevated accrual $X.X charge This million million as losses. previously strategy, a assessment, acquisition-related consideration optimization retirement expenses, as executive-related $X company's a

approximately mid-single-digit mid-single-digit $XXX growth rate systems of risk management and rate his company's capabilities. base team back core a in foot operating charges full to and full will wages market company's million. pressure -- operating some a company talent acquisition-related excludes the The front increase year the On the full across business, year and this all growth the expenses operating the basis, of not moderate data investments management leadership expense off upward on driven expenses reflective restructuring year previously lines XXXX which by expects expenses, are only XXXX core core was mentioned also of made charges but of

for in the the the $XXX.X $X million the fourth revenues, $X.X recorded offset of linked and decrease increase in of income. company company million year total increase third or The $XXX.X prior quarterly million in million fourth recorded revenues in in quarter the quarter record company. over in driven the million $XXX establishing same Comparatively, new total The a was quarter, partially total revenues quarter. X.X% or by net revenues the noninterest year's X.X% in by interest a prior a

lines in company is As a the Dimitar year well were recorded total in and of positioned basis again revenues up the to management company XXXX. noted, on The full believes all grow businesses revenues or fourth basis income million $X.X million of was XXXX. or the in down from a quarter. $XXX.X interest up but of quarter the quarter fourth This net on linked X.X% $X million X.X%

XX The the costs not XXXX fully a and funding quarter in increase costs in in company's the X.XX% the The abated, the increases the in funding the offset loan outpaced in third total a yield on the in point have in in basis company's increase basis balances of quarter the was cost on in between resulting point largely periods. costs points funds portfolio funding asset earning net to from basis quarter interest yields, margin the both basis the XX but the in to as third decrease company's fully point increase fourth XX of compared quarter. taxable fourth in quarter. linked Pressure outstanding X X.XX% X.XX%

decision gain noninterest on company's up or revenues company's year-over-year. benefit extinguishment XXXX, nonbanking insurance businesses, due $X.X management Banking-related This primarily year the X.X%. or noninterest model. nonsufficient services and in company's employee X XXXX and losses to fees million all services business were eliminate reflective late unavailable the quarter revenues of accounts full services, total of wealth X.X% debt securities and $X.X to decreased revenues, investment is basis, a fourth in increased the result in on funds of personal million excluding while diversified the On

million recorded the increase $X.X loans a year in fourth for recorded the the an loans, $X.X and outstanding, delinquent in the in third increase an a company and economic the provision stable of nonperforming Comparatively, million loss linked million prior the quarter credit quarter. Reflective forecast during [indiscernible] of fourth quarter in company

a the the The XX.X% quarter the of XX.X% for to compared fourth XXXX the XXXX XXXX. year. Ending rate basis, $XXX.X and was in was as XX% tax in million from $XXX.X effective or X.X% XX.X%, quarter loans or full during rate over On in XXXX. the effective year tax of quarter, prior increased fourth up XX.X% million

The increase XX%. million portfolios. driven growth year-over-year driven business organic in primarily fourth in loans loans outstanding quarter mortgage by and lending consumer company's the was business increase was loan or totaling increases in lending in the $XXX.X the in The portfolio lending by

$XXX.X deposits were which full down in checking deposits. consumer high deposits down of company's accounts, million year The customer and a million total savings third million deposits end -- stability proportion in The growth X.X%. X outflow and XX% or composition or by all municipal On beta the the ending X.X%. and driven And growth a were of or ending total a of from $XXX.X $XX.X quarter, net the portfolios company's X.X% loan total of cycle-to-date base. totaling the basis, XX%, reflective is represents deposit of and of

fourth weighted fund the of X.XX%. on the Home weighted at quarter, cost term X.XX% a the continued borrowings million to growth. loan York Bank New average during in During secured loan $XXX new rate quarter, average Comparatively, the at Loan originations the of Federal fourth company was

discount equivalents, readily Federal unpledged XXXX. cash the of of and $X.XX capacity at unused Bank's Home source and Federal funding availability Loan Bank billion York, including remains of position strong, The available New securities end the totaled at Reserve company's cash borrowing window, the liquidity investment at liquidity,

loan-to-deposit security XXX% higher-yielding represent the liquidity sources of opportunity of investment migrate collateralizing of at to was ratio of providing into the net deposits, over quarter The immediately company's available loans. deposits. third lower-yielding These XX.X%, estimated end uninsured balances the company's future intercompany

end companies exceed was significantly all of standard well regulatory exceeded the XXXX, regulatory standards. and XX, X%. leverage capitalized bank's specifically, at ratio X the XXXX December which substantially X.XX% capitalized ratio company's the the of At More Tier capital the

The and of to end company's year was ratio net at as quarter equity the the assets X.XX% tangible third at compared X.XX% net X end of to the year prior. the X.XX% tangible

of at common on average of XXX,XXX company approximately repurchased of stock the share. XXX,XXX an per basis $XX quarter, and full share, per an at fourth shares the price $XX price average shares During a year approximately its

XXXX, remained stable but the million an of credit increase for during basis quarter company's year allowance XX $XX.X X of third $XX.X XX, of million prior, losses million at December total totaled XXXX outstanding. At points and $XX.X loans

company's XXXX, charge-off full company During year points quarter points The net recorded the average of the or basis XX net loans. of million XXXX X fourth annualized. average loans basis $X.X was ratio of of charge-offs

$XX.X that and XXXX, end points XX, outstanding. This million or or December of loans points basis nonaccrual secured of There year basis content lending $XX.X specific were total basis XX were million totaled prior. with $XX.X to up the at identified. additional well from loss all third was XX the are points quarter, status quarter XX the business in loans fourth At or nonperforming transferred no million of X X which relationships

year total end and We base, company's strong to and basis points remains December strong believe quality, foundation capital stable provide XX opportunities deposit XX, quarter XX a diversified reserves, Loans asset liquidity, outstanding XX of the compared X future days loans revenue basis points solid regulatory quality strong. the historically asset Overall, company's the and as profile, core 'XX for were growth. to prior. both XX at XXXX, third of delinquent of at the

forward, the net funding growth. year. are expansion the momentum of believe X all for encouraged we particularly We of table last pressures organic in quarters Looking will by businesses cost in in of prospects our XXXX, the the setting continued income, for interest and abate

In appreciation provide growth tailwind employee businesses. wealth and revenue benefit services a the in management bond and stock services addition, both markets recent for in asset the

prepared comments. my That concludes you. Thank

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

Operator

take Twerdahl at Instructions] Sandler. question our from And we'll with Mr. this [Operator time, Piper first Alex

Alexander Roberts Twerdahl

loans bit give on little lending just you can collateral behind they us a this is those what them, relationships? of business et cetera? First, X What color kind were, more

Joseph Sutaris

of Alex, credits. a actually bit the of It's terms mixed a individual Yes. bag, little in

kind majority is generally issues not industrial/office the property. this The of outside was some mixed just of was -- One of cash owner-occupied is of also use a particular owner-occupied borrower into property actually space. ran the which that flow but because partially classified

any was loan nonaccrual smaller have status loss property, one. moved on doing having so evaluation and identified underlying credit, challenges. ultimately owner-occupied flow specific And couple had we're businesses and challenges. agricultural content to to on a believe that which was secured, well we actually third also we the flipped just cash of then not And the nonaccrual And to their credit ag ag asset, were that due we the basically the the we on

real X. So the nothing, between thread call it, systemic or common no common

Alexander Roberts Twerdahl

growth loan that of wondering a was been this the the little us I really you more give the of the seeing been on alone of putting if over Okay. you've -- -- but in can terms on side, color size quarter, bit they've last bit commercial the sort geographies. last the couple on little quarters color just a

pullback roughly widened out? XXX quarter, on And that have the just And I'm kind down any just helpful. more I have basis also the be color X-year held points in think come curious would there or you're if as if you spreads said with loans of the rates potentially last putting very rates, above they

Dimitar Karaivanov

Sure.

basically come some So we've previously. from which expansion the of of that in is areas, do has about our footprint Alex, everything metro really majority borrowers. growth larger talked we The our

our had year every XXXX. fact, regions X In a of growth in

in across the more well capacity frankly, favorable strong regulatory There the for service a the a as very the have lot We're is or board. liquidity been to don't where of competitive we engaged historically. than us active, other clients. it's markets participants, the were dynamic So lot a

So sheet we with plenty highly this sort came into liquid any runway. a of concentration balance no of cycle with and

advantage So we've taken of that.

they're where lending we last very terms of in we're the to terms quarter about. talked today that rates, of In similar

dynamics. Our kind better much the to to in business mid-Xs. a that of lending don't spread low We competitive as from is change due bit of again, expect to benefiting we're

on to hold So are going rates bit, think ground little here we're I our we down as the can. if side going drift as much even to a the

Alexander Roberts Twerdahl

Great.

that. million like $XXX so than loan granular that would growth, is loans, much several larger And loans? be of commercial like Or several it more

Dimitar Karaivanov

is capacity for our low of that. up don't I -- and tell close lending It very the granular. very, loans But many that that follow We are exact We our median of institution limit. and are to have we size can cannot you anywhere even very lending we size our run X/X the on of don't loans too average limits.

those So there's many behind million. loans $XXX

Alexander Roberts Twerdahl

hope first you what Dimitar, and question, you just I -- remarks XXXX bit that more I'm prepared final of just your in M&A or of guess, really other lines for Great. mind, driven said driven bank off, the if curious, the sort willingness a the has in? then more to And if the in seller? your conducive And sort driven of would if it's mark then you're that happen a that be M&A. or by talking about some rate rate of you're and it's more

Dimitar Karaivanov

Yes.

focus, of a business our deploy lot is investors. our is Alex, and our in a it job as We changed. across So team of It generate all M&A of terms for to lines. capital, our management that capital hasn't

So nonbanking of kind them. a certainly We've of we're all roll-up as opportunities on matter course. little in a the doing focused type more been bit businesses of

couple But certainly, of the say, a the of of that from an there values, the some out hopeful figuring perspective side, would in I might been terms that larger of M&A rates, years well. We're opportunities headwinds, as kind the it's on bank on marks. side be

that we're and and more be little So understand stability balance folks what's going clarity the really this allow there's on hopeful a to the to would year, which sheet. bit market, in

not we as sellers move they're more as willing approval sold, the bit also a well. to that need have bought. little deals, But banks see process as to through faster we well. hopeful And going We're are

couple that So think we of past were pretty the hard. just years

of base it So better hopefully, a get in should pretty from low terms opportunities.

Alexander Roberts Twerdahl

for respect M&A? then Great. terms been your Has appetite $X.X of billion with has changed appetite $X size. historically, to billion bank to in And anything CBU's of kind

Dimitar Karaivanov

opportunities. kind where best we and that's in the that think the risk reward I of lies feel

probably size I in-market a talked be an feel bit versus of where we've kind vary think is -- and is could they they'll kind . of much. It that we markets but by little risk appropriate the But markets, between that larger, contiguous certainly, about. not reward.

Operator

James. with question will Next Raymond Steve Moss come from

Stephen Moss

the Dimitar, of it growth thinking about just a year of $XXX upcoming loan growth up you're pretty loan it? of just just Or strong loan how will for following total the to on second. or as growth Do still million, kind for million? curious you think $XXX pace be

Dimitar Karaivanov

the quite Yes, in didn't pipelines and you. of digits got you've We we But certainly you Steve, We great are outperformed question. past mid-single kind by take when what some of that. margin. We plan thinking of good borrowers kind opportunities, didn't a couple The it. of strong. generally give expect years for of they

still also strong they on probably as pipeline year strong. on were side as good. calling The at the is mid-single commercial not commercial They're last We're the this pretty pretty for still point, residential but digits.

So of we well, today. and sit a we will what here we depend the need dynamics do. comfortable kind competitive at level paid on lot it feel for as that to as we price get But

that be there will So well. as

Stephen Moss

fixed Okay. going tailwinds employee from Great. a the here side, some the asset income services said quarter, And then you development on business you upbeat forward. benefit realize also during about I had pretty appreciation.

you're this about growth line year. the overall how curious of for that kind revenue business Just thinking

Dimitar Karaivanov

target Steve. in digits business, single high We that Yes.

between we muted kind XX% run been think So of there. by is market. the It's and core the business of is rate the X% been certainly

business. asset So We and is us to kind for metric the kind pipelines growth where pretty really we good high -- are capitalize think for if we in achievable of and in XXXX. that organic we they continue that had getting single-digit if values on paid that, stay we of start certainly all

Stephen Moss

also market. the business, realize -- a I Okay. for Great. And insurance it's insurance hard

very good year-over-year some had You growth.

it still pace is there? to a double-digit Just close curious,

Dimitar Karaivanov

XX% think, at some market. year between X was the side, of executing our are in expectation. opportunities that's that certainly, well. continued small kind of and think as M&A years. past on the the the well I And organically I the current fair XX%, grown kind the really over roll-ups Last We've business for teams of

certainly digit, us double is think, So XXXX. for I achievable in

Stephen Moss

here the about you guys get And what then curious -- guys how how are quarters? things are the Great. over thinking just outlook rate Okay. year of we the And margin cuts next about feeling as the here, some margin progresses? if couple you on

Joseph Sutaris

it's take Steve, Joe. that question. I'll

comments, net the I So distinction that I income, net kind basis. expand and just in prepared expectations out on expectations interest are environment, on my our make on of will income. the given And year-over-year interest laid -- current think our to a year full rate

And that that's allow and and that expectation the on growth had is last or improve overall year to over going significant to us really built that sort the so of fact asset we've yields. continues, earning loan

we pressures other is XXXX. drive that we the expectation cost And then our to And that so abate that that that obviously -- of expect through side is that. will funding

potentially don't interest the of Now But day couple sort in days, quarter. expectation expansion that my a income we first income. There's I down in will. about get that, as a in to net see at the beyond about We shorter count again interest a quarter. significant loans typically, and is books you just took will in lose first noted at pickup With if on new comments the of respect margin, we the we our we prepared X.X%. that in been X.X% some borrowings net see

latest it, margin X% in generated and on about that. loan I'll we just of this, So a round call origination, funding

to the in in flat. for us end. are the margin on later So But environment, end -- we I with trend respect to call was that is of the got current will Yes, think down day, little year. income I'll the relief it, interest is the expectations potentially at that a net dollars bit it expectations some, rate the the long up

as originations. on our try pressure there loan to yields on in rates, indicated, little that new hand, other move a as ahead will hold new the we On Dimitar puts we

federal Most downstroke we inverted committee end, can our kind on an and market the short a funding end, if the open curve costs. our or that look some of at release from of And funding moment. pressure on sources X the will at get short the ongoing have we obviously,

bit if off we short end, a a think -- can forward. the So a get help funding we going will again, of level decrease the costs on little really that us

Operator

will O'Connell from Chris question KBW. with next The come

Christopher O'Connell

up I discussion. NIM to on just follow wanted the

side. have on average where funding been the in cost in QX? was CD have you the well guys holding You very Do cost

Joseph Sutaris

On new CDs...

Christopher O'Connell

average for the just No, quarter.

Dimitar Karaivanov

Yes.

provide So that. we could

here, moment a Just give me Chris.

Christopher O'Connell

deposit in where the And then those over course think could or some full-cycle like guys mind interest-bearing point beta out you the that do basically, costs have on you mean, side, cost I of top XXXX. at

Dimitar Karaivanov

I think, we've the is generally for piece is beta. full noninterest-bearing low piece balance XX% -- about discussed as talked previously, expectation beta, our for which XX% of which we've for Chris, that and XX% terms very us, about in or to is the cycle includes us, the interest-bearing of

low I that pretty range. think of end we feel the close still that. in comfortable to We're

on might it So this be how depending cycle takes. long

Fed cycle. There in quarters but pretty they for raising balance cut, quarters kind of still that reasonable a potentially And the XX% the for XX%, of beta after of sheet, few total terms is rates. kind the us lingering there's mid-XXs, of of on of remix kind when a stops impact is couple in of even probably mid-XX

Joseph Sutaris

your question deposits. Chris, up And just follow on on to time

in $XXX on So is QX about time deposits. blended cost

Christopher O'Connell

couple Great. quarters, put mid-Xs on range. the in them, the as have last then guys of borrowing And the of far on bulk the you side, as

act XXXX? little which in we like structure. more a the mean, on more For which enter is bit do those repurchase balance, terms see pressure agreements, deposits their I cost know of as I costs mostly you customer

Joseph Sutaris

customers, of of the typically, midyear call a, around are rate customer it, I it and repricing sort on I'll opportunity closer on significant some of the depends agreements do that when think which get municipal sort we point. to environment repurchase we see

not But us lot kind are because a -- about cost source a overall, cost basis in largely of these nature, funding QX, funding in accounts. of these it's on complete high a high for operating blended X.X%

high a not us. it's for So of cost funds

Christopher O'Connell

margin on around magnitude? first all that Great. getting reaction together in of margin, mean, fund upwards sense off Fed quarter, tying expect of the initial do that cuts midyear. start you it just Any And just The event kind to that the directionally we of the the be of or I downwards?

Dimitar Karaivanov

in the really quarter. I happen is think on rem sheet balance there question hard the mix Chris, will the year the in continuing or what

we kind cut. will I have that a a do get is -- predominantly if in immediately the and we accounts of with rate there think line everything -- that cut, number else market money equal of clearly in reprice and down space

So or immediate might noninterest-bearing it huge heavily again, base accounts benefit accounts. but checking low cut a savings aftermath will don't as I have think into interest-bearing benefit, in a and deposit because or our of We is very that be of X.

directionally but So see not probably direction to the huge a probably help by which in amount. want we it, is

Christopher O'Connell

And last just me X tax go-forward good is Great. rate? then a what's for

Joseph Sutaris

XX% go-forward use think basis. a I between, it, on call to it's and fair somewhere XX%

I think has I XX.X%. comments, mentioned about the last X in been my average weighted the years, prepared

there a that's going think I expectation forward.

Operator

question next Davidson. from Our with Manuel Navis come D.A. will

Unknown Analyst

on is Navis. Manuel This from Sharon

the are driving what XXXX? wondering was I positive operating leverage in biggest wildcards So for

Dimitar Karaivanov

thank So for question. that you

If magnitude biggest you the us wildcard at the just is P&L our for of NII. always look

determine trends, line. terms bottom depending to can efficiency where drive to in on leverage going that's So how much I think we the of NII

our about outlook think expense reasonably good feel XXXX. for I we

of mid-single-digit off core In the rate that Joe terms of base mentioned. that

of that to NII, put largely side easier happens think in determine going the your arms but the little outcome operating equation bit pricing with mixing, leverage. a I market depository is the to around -- what of So the is cuts, fed

Operator

Inc. Matthew next Stephens come from The will question Breese with

Matthew Breese

which revenues, The growth optimistic, CBU your as of competitors. nearly business in go fee traditional think, X largest up and I just we pretty I'm lines of Dimitar, robust. is of curious thoughts differentiators a your fee income bank at the XX%, on down percentage as overall income versus various

fee a longer if revenues goals, you've if time. have term, represent that any is of like curious I'm there you percentage income over

Dimitar Karaivanov

Yes.

a the we run management And about Matt, a at at the I company, diversified we a not talk level so question. It's a think I board financial So something level. hobbies. -- that services Matt, that's bank and think with lot good

are our So ability dividend all returns important of our to going create generate X sustainable to businesses grow to ability the to equal our earnings. forward,

we've So along lines. our also those organized company

For businesses. reports for each got example, I've the X X direct of

is X think don't XX% right of it we about With a really drive where you and emphasis of our businesses. be. to fast each now. do number kind So of said, we're that as want those as hard we to mentioned, of

I we quality more the think diversified of down comes be ultimately, the can it But earnings. to better.

the business, a And there to generate certainly, on in banking is plenty of quality earnings basis. ways sustainable

kind we aspect So mortgage P&L, quality Those you're kind at of not our look of lot SBA volatility things and to don't going terms leasing fees to a the are or it. to of aspect kind it as you of that in bite see the generally of or fees fees.

high-quality strong deposit So quality earning that a certainly -- with is NII base outcome but a sustainable is well. as

hard want as rule. fast don't can we a to So be we have we and as diversified

nature the bit goal plan businesses a our have always we organically all others and because services just into is do diversified run, of more a on leaning quite is company, inorganically. financial both and we the than -- think company of to I of our which

Joseph Sutaris

business peer lot comment businesses, we X Matt, just institutions the I that those where the are in the makes most in don't to a sense, necessarily our of moment. other our opportunity is when times alternatives have in present deploy given X all to opportunities in of capital there Dimitar's, which have different X add capital of to we're with businesses allocating And the And would do different that options. themselves X businesses.

is have deploy Again, those of X institutions, can option have X. businesses. of we capital I different think kind lot and of capital opportunities kind set X So that have the that thinking deploy level in to have to when moment a capital I is think at or we just And we X our options that how best kind businesses in the we we have look which do maybe they that peer -- of in they deployment.

Matthew Breese

Understood.

time given all I at touch is which appreciate margin costs, a I think to beta, even just your want a level then had meaning see of negative this to stage I mentioned deposits for delta? rates lag. comments that. curious, reprice decline, base And may of But deposit deposit it just costs is suggested on I you Dimitar, cutting down, your your second Okay. is we'll that of around continue did you as fact, amazing. sub-X% that. of much question because NII kind just at so overall we see mean, we possible in outlook. the immediately. pretty deposit a that is deposit that with the institution said, does How

Dimitar Karaivanov

rise I think, historical few you to the industry there Matt, Fed if look is not while costs a of lag cycles, that the continue deposit in at the is where quarters moving.

a that you number, So if qualify beta, we want very right? to large I how would essentially, don't know but

But industry we're as I seen pace, that just will that. change. be and our quarter-by-quarter deposit that immune to aggregate going increasing that think don't the I than think that I that, our lower And is to you've are consistently the think So don't peers. costs

when Fed is the and down. be the of more quickly number moving on effect give can you a we the ones are deposits that Joe still and reprice likely remixing. have that more some are there on to probably So And lagging not price the sensitive little will bit

Joseph Sutaris

Yes.

about the money of the and about call accounts $X.X it, group the money sensitive markets in savings more base, billion. billion and So and non have billion interest-bearing interest do checking nontime -- on $X.X there billion checking approximately, deposits roughly totaled market and market right? interest-bearing, excuse savings being that the about of sensitive money billion are comprised a $X.X Matt, $XX that's $X are me, So of we or

I quarter, opportunity market we if the and portfolios. emphasize rates the those the that that's kind So of reduction money market set funds sensitive would down committee comes just us. in the of federal open a a X for so a the in that at have deposits, more

Dimitar Karaivanov

rate of to We maybe to bit a exposure. little neutral Matt, a add manage to that. terms ALCO in roughly just outcome

asset profile more not forget size. been a because on in lagging the let's the side. We've we've So the got cycle about the asset fixed on asset side

So on that's other assets allowed that. allow cycle. allowed repricing us on in down a and has us to the It's to also to pressure going side -- our pricing us base to deposit the a have do less of now

a we of bit look kind little cuts few sideways of our in minus scenario. that's margin So or kind a type a at probably is why of plus

Matthew Breese

the And on mean, want did from I to touch Understood. portfolio. securities Okay. swing judging I just then in the rates.

move a versus First of that the XXXX? the all, that could us purchase And just for assume then higher flows that is driven. of is to secondly, what are portfolio the in and lot really what remind outlook it's -- safe cash you valuation-driven

Joseph Sutaris

in repositioning So years. the and the that the quarter, did we Matt, most and flows most 'XX flows 'XX. in have limited million, the you 'XX recall, than cash first million in somewhat cash flows, $XXX each the due respect in pulled 'XX of we we And -- of in back those less cash with of forward to if basically -- coming were as

so years on some to about in a in cash combined 'XX billion in those $X basis, significant more flows then another get We billion or and and $X 'XX XXXX.

those pulled effectively just cash forward we flows. So

potentially without kind portfolio, we're quarters. at forward opportunity cash we We looking in of to potentially be flows the opportunities the able into that coming the only at continue we loss but we shorter-term par here in if small this those a pull rate basically to maybe and securities, migrate also have year couple see to a see -- later environment loan some

Matthew Breese

seeing what does is is then general and to all on consumer commentary the real then as goes just I on last trying kind you're the loans meat me X That's credit, provisioning auto filter of indirect love hit charge-off Sorry, and into commercial XXXX? the into outlook estate -- would roles, -- for some that had. how for and

Dimitar Karaivanov

take Sure, Matt. that. I'll

still of warning years early if and of of if if of substandard about And roughly the you impact So half a you mention -- it, as kind our there's kind about couple for and and obviously, a now. they recession special look levels. where you talked credit had about think pre-pandemic we've buckets, it we were at

few bit is little expected moved well relationships this below historical bit, which you quarter, the averages. get a certainly still a up we've and challenged a So more little saw normal

charge-offs Our point. business our last commercial were year basis in X

you believe were business, know I XX be XX love basis points, Our know about you the points, and we auto should consistently I charge-offs in basis higher. which they -- that

get to higher a have up. fully as peak on housing They're values of are post-pandemic take normalize. across kind We're And low board lot we I when the just the little through when economic than spending talked actually delinquencies things a mortgage look government a it's in -- mortgage our is asset going of values at and you because bit have were of our think happening such what's markets providing unemployment environment behind the when really support we a more is the a about you actually back rate, the economy, a paid process, we business. things that these to But in the they of lot basis.

little asset due limited job back values line, are in lose too side commercial get people strong a a it's find pretty holding are the and to on easy So values collateral even the jobs, bit, have even well. supply in follow to delinquent and another they job if very

Those businesses profitable. are

kind or the deficit We liquidity in in lot spending surplus not specific again, seen an the have pressure money, consistent the much private of industry. when a And a of so geography and activity. government sector is anything that's just -- that's that terms so is of supporting system in

first markets that little talked around kind some spending getting of of bit And CHIPS we've the of Act, technologies in lift time our the as all advanced we're our while, the economic actually a the for the of helping stuff a a long before from in geographies. is

Operator

next The a from is Chris question O'Kane with follow-up KBW.

Christopher O'Connell

on to do of quarter? up just guys follow today fourth where $X.X mentioned, rate I are market you the you that have money the in those you on wanted billion the or

Joseph Sutaris

X%. Yes. a about On Chris, basis, blended is

Operator

I would to conference Karaivanov Please ahead, turn the session. closing any question-and-answer like our go for Mr. back to concludes This sir. over remarks.

Dimitar Karaivanov

you will and our see you. thank all interest and April. in Chuck, in company, your you, you Thank for Thank we again

Operator

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

You may now disconnect.

Community Bank System (CBU) 23 Jan 242023 Q4 Earnings call transcript