DeWITT — Profit at Community Bank System, Inc. (NYSE: CBU) rose 16.5 percent in the first quarter to $18.8 million, or 48 cents per share. Earnings per share would have been 2 cents higher, but the company completed a common stock offering in January that netted $54.9 million. The offering was in support of Community […]
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DeWITT — Profit at Community Bank System, Inc. (NYSE: CBU) rose 16.5 percent in the first quarter to $18.8 million, or 48 cents per share.
Earnings per share would have been 2 cents higher, but the company completed a common stock offering in January that netted $54.9 million. The offering was in support of Community Bank’s planned acquisition of 19 branches from HSBC and First Niagara.
The deal will bring $218 million in loans and $955 million in deposits for a deposit premium of 3.22 percent.
DeWitt–based Community Bank has $6.9 billion in assets and more than 170 branches in upstate New York and Pennsylvania. The banking company also operates subsidiaries in employee benefits, insurance, investment management and advising, and wealth management.
The HSBC locations in the deal are among those involved in First Niagara Bank’s planned acquisition of HSBC’s upstate New York branch network. First Niagara, based in Buffalo, announced plans in July to acquire 195 HSBC locations in upstate New York, Westchester County, and Connecticut. That deal is expected to close in May.
First Niagara leaders said at the time they would ultimately divest some branches in the acquisition.
The offices Community Bank is acquiring include 16 current HSBC locations in Gowanda, Springville, Westfield, Palmyra, Newark, Geneseo, Watkins Glen, Avon, Watertown, Plattsburgh, Oswego, Fulton, Lowville, Adams, and Alexandria Bay, and three current First Niagara locations in Geneva and Canandaigua.
“Our pending acquisition of 19 bank branches across our core upstate New York markets will strengthen and extend our existing presence within these areas,” Community Bank President and CEO Mark Tryniski said in an April 24 news release. “We remain pleased with the successful integration of the Wilber National Bank which we acquired last April, and now operate as our Central New York Region.”
The deal for Oneonta–based Wilber brought Community 22 branches in Otsego, Delaware, Schoharie, Ulster, Chenango, Onondaga, Saratoga, and Broome counties, along with a loan-production office located in Saratoga County.
Net interest income in the first quarter rose 18.4 percent from a year earlier to $53.9 million. A $967 million increase in average interest-earning assets drove the jump in net interest income, according to Community.
Noninterest income rose 12.6 percent to $23.5 million. Community’s employee benefits administration wealth management both posted revenue increases that contributed to the rise in noninterest income.
Total loans increased to $3.5 billion at the end of the first quarter from about $3 billion a year earlier. Organic growth in consumer mortgages during the period was balanced by weak, but improved demand for business loans, the bank said.
Total net loans declined $10.3 million from the end of December. Organic growth of $9.1 million was offset by $19.4 million in net contractual and other principal reductions in the portfolio from Wilber, according to Community.
Deposits increased to $4.95 billion at the end of the first quarter from $4.02 billion a year earlier.
Operating expenses for the quarter rose 14.1 percent from a year earlier to $49.4 million. The jump resulted from the Wilber acquisition and the acquisition last year of CAI Benefits, which has offices in New York City and New Jersey.
Community Bank’s stock price has increased 3 percent year-to-date through April 24.
