Community Bank’s Q4 net income rises 5 percent

DeWITT — Community Bank System, Inc. (NYSE: CBU) recently reported that its net income increased more than 5 percent to $42.9 million in the fourth quarter from $40.8 million in the fourth quarter of 2018. 

The DeWitt–based banking company’s earnings per share (EPS) rose to 82 cents a share from 78 cents a year prior.

But its adjusted net EPS, which excludes acquisition expenses and an unrealized loss on equity securities, was 83 cents in the fourth quarter, up 5 cents from the fourth quarter of 2018. Community Bank’s adjusted net EPS beat analysts’ expectations of 80 cents a share, according to Zacks Equity Research. Community Bank has beaten consensus EPS estimates four quarters in a row, Zacks says.

“Our 2019 very solid fourth quarter was characterized by revenue growth, improved earnings along with a continuation of positive operating metrics compared with the prior year quarter. Moreover, we are pleased with the company’s performance throughout 2019, during which we continued to utilize acquisitions to expand and strengthen our service area, organically grew loan and deposit portfolios, increased revenue to nearly $590 million, and extended our uninterrupted streak of dividend increases to shareholders,” Mark E. Tryniski, Community Bank System’s president and CEO, said in the banking company’s Jan. 22 earnings report. “Our acquisition of Kinderhook Bank Corp. during third quarter 2019 extended our market reach into the Capital District of Upstate New York, a region with attractive economic and demographic characteristics. The Company’s fourth quarter definitive agreement to acquire Steuben Trust Corporation will provide additional retail strength to our existing Western New York service area along with providing entry into two new Western New York counties. The transaction is also expected to be immediately accretive to earnings. Organic revenue increases in our employee benefits services and insurance services businesses were responsible for higher noninterest revenue in 2019. Total loans at year end increased by more than $600 million, driven by organic growth and by the Kinderhook acquisition.”

Earnings details

Community Bank’s total revenue in the fourth quarter of 2019 was $149.9 million, up 5.8 percent from the fourth quarter of 2018. The banking company recorded a $5.4 million, or 6.1 percent, increase in net interest income and a $2.9 million, or 5.4 percent, rise in noninterest revenue between comparable quarters. The rise in net interest income was driven by largely by a $733 million increase in average earning assets between the periods due to both the Kinderhook acquisition and organic growth in earning assets, partially offset by a decrease in net interest margin. 

The increase in noninterest revenue was due to a $1 million, or 5.8 percent, increase in deposit and other banking revenues and a $1.9 million, or 5.2 percent, increase on non-banking noninterest revenue, Community Bank reported. Revenue was up $1.5 million in the employee-benefit services business, and wealth management and insurance services revenue rose about $400,000 from the fourth quarter of 2018 to the fourth quarter of 2019.

Community Bank System says it operates 230 branches across upstate New York, northeastern Pennsylvania, Vermont, and western Massachusetts through its banking subsidiary, Community Bank, N.A. With assets of $11.4 billion (including the former Kinderhook), Community Bank is among the nation’s 150 largest financial institutions.