Community Bank moves closer to Elmira Savings Bank acquisition

Q1 net income declines

DeWITT, N.Y. — As it moves closer to finalizing its acquisition of Elmira Savings Bank (NASDAQ: ESBK), Community Bank System, Inc. (NYSE: CBU) on April 22 announced that is has received regulatory approval from the U.S. Office of the Comptroller of the Currency for that transaction. 

The DeWitt–based banking company also said it obtained a waiver from filing an application with the Federal Reserve Bank of New York for the transaction. 

The regulatory-approval announcement came a few days before Community Bank System reported lower net income during the first quarter of 2022.

Upcoming acquisition

The acquisition, which was valued at about $83 million when first announced last fall, is expected to close on May 13, subject to customary closing conditions and approval from the New York State Department of Financial Services. 

“Community Bank looks forward to welcoming Elmira Savings Bank’s customers and employees to our family as we work together to integrate two high-quality banks with long histories of service to their customers and communities,” Mark Tryniski, president and CEO of Community Bank System, said in a release. 

Last Oct. 4, Community Bank System first announced that it would acquire Elmira Savings Bank in an all-cash transaction valued at $82.8 million. Community Bank believes the transaction will provide it with an “improved presence” in several Central New York and Southern Tier markets, including Elmira, Corning, and Ithaca.

Elmira Savings Bank has $632 million in total assets and 12 branches across a five-county area, mostly in the Southern Tier.

Net-income decrease

Community Bank System on April 24 reported that its net income fell 11 percent to $47.1 million, or 86 cents per share, in the first quarter from $52.9 million, or 97 cents, in the first quarter of 2021. 

The decline was primarily due to increases in the provision for credit losses, operating expenses, income taxes, and fully diluted shares outstanding. That was partially offset, in part, by increases in net interest income and noninterest revenue, the banking company said in its earnings report.

Community Bank System’s operating earnings per share — which excludes acquisition expenses, acquisition-related contingent consideration adjustments, and unrealized gain (loss) on equity securities, net of tax — was 87 cents in this year’s first quarter. That beat the consensus analyst estimate of 76 cents, according to Zacks Equity Research.