Community Bank System Reports Fourth Quarter and Full Year 2013 Results

- Full year organic loan growth of $243 million (6.3%)

- Completed branch acquisition in Northeast Pennsylvania

- Cash dividend increased for 21st consecutive year

Business Wire

SYRACUSE, N.Y.--(BUSINESS WIRE)--

Community Bank System, Inc. (CBU) reported net income of $15.5 million for fourth quarter 2013, compared with $18.8 million for the fourth quarter of 2012. As previously announced in late December 2013, the Company sold its entire portfolio of bank and insurance trust preferred collateralized debt obligation (CDO) securities in response to the uncertainties created by the announcement of the final rules implementing Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, commonly known as the “Volcker Rule.” In conjunction with the liquidation of the trust preferred CDOs, the Company extinguished $226.4 million of Federal Home Loan Bank (FHLB) term advances and sold $417.6 million of Treasury securities previously classified as “held-to-maturity.” The net impact of these actions was a pre-tax loss of approximately $6.9 million, or $0.12 per share after-tax, which is reflected in the Company’s fourth quarter 2013 results. Diluted earnings per share for the fourth quarter of 2013 were $0.38, which also included $0.04 per share of acquisition expenses related to the December purchase of eight bank branches in Northeast Pennsylvania from Bank of America, NA. Diluted earnings per share for the fourth quarter of 2012 were $0.47, and included $0.05 per share of acquisition related expenses and litigation settlement charge. The Company’s reported net income for 2013 was $78.8 million ($1.94 per diluted share), an increase of $1.8 million or 2.3%, compared to $77.1 million ($1.93 per diluted share), reported in 2012.

Total revenue for the fourth quarter of 2013 (excluding the $6.9 million net loss described above) was $88.9 million compared to $86.2 million for the fourth quarter 2012, or a 3.1% improvement. Despite declining asset yields, fourth quarter 2013 net interest income was up 1.1%, compared to the prior year quarter, reflecting solid organic loan and core deposit growth over the past twelve months. Banking non-interest income increased by 6.4%, or $0.9 million, in fourth quarter 2013, compared to the same period in 2012. Compared to the fourth quarter of 2012, fourth quarter 2013 financial services revenue grew by $1.2 million, or 9.1%, reflecting continued organic growth in both wealth management and benefits administration services. The quarterly provision for loan losses of $3.2 million was $0.5 million higher than the fourth quarter of 2012, reflective of slightly higher quarterly net charge-offs and the continuation of generally stable and favorable asset quality metrics. Total operating expenses (excluding acquisition expenses and litigation settlement charge that totaled $2.1 million and $3.0 million in the fourth quarters of 2013 and 2012, respectively) of $55.2 million for the fourth quarter 2013 were up $1.3 million, or 2.4%, from the fourth quarter of 2012.

“The positive operating momentum that we carried into 2013 extended throughout the year, with strong organic loan growth, a substantial increase in our non-interest revenues, responsible management of operating expenses and continued positive asset quality performance,” said President and Chief Executive Officer Mark E. Tryniski. “During 2013 we initiated a number of actions which position the Company for additional opportunity, including the acquisition of eight branch-banking locations in our Northeast Pennsylvania service area and the execution of a productive balance sheet restructuring in the first half of the year. In August, our Board raised the quarterly cash dividend by 3.7% to $0.28 per share, marking the twenty-first consecutive year of increased dividend payouts to our shareholders. In October 2013, Community Bank System was added to the Barron’s 400 Index, a collection of the most fundamentally sound and attractively priced stocks from across the market. In addition, we started 2014 being recognized as fourth best bank in the country in the annual Forbes analysis of the 100 largest publicly traded banks, reflective of our continued high level of financial strength and performance.”

Fourth quarter 2013 net interest income of $60.6 million increased 1.1% compared with the prior year period. Fourth quarter interest income was down $6.0 million compared to the prior year quarter, a result of an $87.4 million net decrease in interest-earning assets as well as a 34-basis point decline in the earning asset yield, driven by lower yields on both loans (down 55 basis points) and investment securities (down 31 basis points). This was more than offset by a $6.7 million decrease in interest expense, reflecting a $194.4 million reduction in interest-bearing liabilities coupled with a 48-basis point decline in the Company’s cost of interest-bearing funds. The lower cost of interest-bearing funds was driven by significantly lower borrowing rates resulting from the balance sheet restructuring activities completed in the first half of the year, and also included a 13-basis point decline in the interest-bearing deposit rate in comparison to fourth quarter 2012. During the first half of 2013, the Company completed a balance sheet restructuring program that involved selling nearly $650 million of longer duration investment securities and using the proceeds to retire $502 million of Federal Home Loan Bank (FHLB) borrowings.

Fourth quarter 2013 non-interest income (excluding gains on sales of investment securities and losses on debt extinguishments which netted to a $6.9 million loss) of $28.2 million increased $2.0 million compared to the prior year fourth quarter, reflecting both increased banking service fees and growing financial services revenue. Wealth management services revenue was up $0.5 million, or 15.5%, over fourth quarter 2012, driven by organic growth in trust services, asset management and advisory services, as well as a continuation of favorable market conditions. Employee benefits administration and consulting revenues of $10.0 million increased $0.6 million, or 6.8%, from the fourth quarter of 2012, benefitting from new and expanded customer relationships, along with positive equity market influences. Noninterest income for the year (excluding securities gains and debt extinguishment losses which netted to a $6.6 million loss) grew to $108.7 million (31% of total revenue), an increase of $9.8 million, or 9.9%, compared to full year 2012.

Operating expenses (excluding acquisition expenses and litigation settlement charge that totaled $2.1 million and $3.0 million in the fourth quarters of 2013 and 2012, respectively) of $55.2 million for the quarter were $1.3 million higher, or 2.4%, than the fourth quarter of 2012. Operating expenses (excluding acquisition expenses and litigation settlement charge that totaled $2.2 million and $8.2 million in 2013 and 2012, respectively) were $219.1 million for the full year, an increase of $15.6 million, or 7.6% compared with 2012, reflective of acquired and organic growth initiatives and investments in technology infrastructure over the past two years.

The effective income tax rates for the fourth quarter and full year 2013 were 28.2% and 29.0% respectively, compared to 29.2% for the fourth quarter and full year 2012.

Financial Position

Average interest-earning assets for the fourth quarter of 2013 were $6.6 billion, a decrease of $87.4 million, or 1.3%, compared to the fourth quarter of 2012, a net result of the balance sheet restructuring activities that were undertaken in the first half of 2013 and partially offset by solid organic loan growth over the past twelve months. Fourth quarter average earning assets increased $324.6 million from the second quarter of 2013, with average loans growing $169.5 million and average investments and cash equivalents increasing $155.1 million. Loans increased $243.5 million, or 6.3%, over the prior year end, reflecting organic growth in both the Bank’s consumer and business lending portfolios. Total deposits of $5.9 billion at year-end increased by $268.0 million, or 4.8%, from December 31, 2012 as a result of organic core deposit growth and the Company’s acquisition of eight branches from Bank of America late in the fourth quarter of 2013. The Company’s Tier 1 leverage ratio of 9.29% on December 31, 2013 was up 89 basis points compared with the fourth quarter of 2012. In addition, the tangible equity to net tangible assets ratio of 7.68% at December 31, 2013 was up 6 basis points compared to December 31, 2012, reflective of continued strong capital generation results.

During the first half of 2013, the Company initiated and completed a balance sheet restructuring that involved selling $648.7 million of investment securities with realized gains of $63.8 million, and extinguishing $501.6 million of FHLB borrowings, incurring $63.5 million of early extinguishment costs. The Company’s balance sheet was reduced by approximately 7% through the first half of 2013 as a result of this planned initiative. Although these transactions were essentially neutral to earnings as well as total capital for this period, more than $35 million of incremental regulatory (Tier 1) capital flexibility was created.

The Company announced on December 31, 2013, that it sold its entire portfolio of bank and insurance trust preferred CDO securities because of the uncertainties created by the mid-December announcement of the final rules implementing the Volcker Rule. In addition to the liquidation of the trust preferred CDOs, the Company extinguished $226.4 million of FHLB term advances and sold $417.6 million of Treasury securities previously classified as “held-to-maturity.” As previously noted, the impact of these actions was a pre-tax loss of approximately $6.9 million, or $0.12 per share. The $6.9 million pre-tax loss was comprised of $32.4 million of gains on the Treasury securities, $15.5 million of losses on the trust preferred CDOs, and a $23.8 million charge from the early extinguishment of the debt. The Company also reinvested the net cash proceeds of $246 million created from these transactions into Treasury securities with similar blended durations to the assets sold in order to mitigate the net interest income impact of the security sales and debt extinguishment. As a result of the securities sold from the “held-to- maturity” classification, the remaining unsold securities within the held-to-maturity classification were transferred to the “available-for-sale” classification prior to December 31, 2013. In addition, as a result of the transaction, the Company will not be able to use the held-to-maturity classification for the foreseeable future.

Asset Quality

The Company’s asset quality metrics remained substantially better than comparative industry averages throughout 2013 and continued to demonstrate the long-term effectiveness of the Company’s disciplined risk management and underwriting standards. Net charge-offs were $2.9 million for the fourth quarter, compared to $2.6 million for the fourth quarter of 2012 and $1.5 million for the third quarter of 2013. Full year 2013 net charge-offs of $6.6 million, or 0.17% of total loans, were down $1.9 million, or 22% from 2012. Nonperforming loans as a percentage of total loans were 0.54% at December 31, 2013, down from 0.61% at September 30, 2013, and 0.75% at December 31, 2012. The total delinquency ratio of 1.49% at the end of the fourth quarter was down 43 basis points from fourth quarter 2012 and consistent with the ratio at the end of the third quarter of 2013. The fourth quarter provision for loan losses of $3.2 million was 8% above net charge-offs for the quarter. The allowance for loan losses to nonperforming loans was 201% at December 31, 2013, compared to 147% at December 31, 2012, and 181% as of September 30, 2013.

Cash Dividend Increased for 21st Consecutive Year / Stock Repurchase Authorization

In the third quarter, the Company increased its quarterly cash dividend to shareholders by 3.7%, to $0.28 per share, marking the twenty-first consecutive year that it’s been increased. The Company views the growth of cash dividends over time as an important component of its commitment to provide consistent and favorable long-term returns to shareholders.

The Company’s Board of Directors also approved a stock repurchase program authorizing the repurchase of up to 2,000,000 shares of the Company’s common stock during a twelve-month period starting January 1, 2014. Such repurchases may be made at the discretion of senior management depending on market conditions and other relevant factors and will be acquired through open market or privately negotiated transactions as permitted under Rule 10b-18 of the Securities Exchange Act of 1934 and other applicable legal requirements. The new repurchase authorization replaces the previous program which expired on December 31, 2013.

Pennsylvania Branch Acquisition Completed

On December 13, 2013, the Company completed its acquisition of eight branches from Bank of America, NA as previously announced. As part of the transaction, Community Bank acquired over $303 million in customer deposit accounts and approximately $0.9 million of net performing loans and paid a premium of approximately $7.3 million. The acquired branches were converted and opened as Community Bank branches on December 14, 2013 and are located across Community Bank’s Northeast Pennsylvania markets, with five of the acquired branches located in Luzerne County, two located in Carbon County and one located in Lackawanna County.

Benefits Administration Acquisition

During the fourth quarter, the Company announced that its subsidiary, Benefit Plans Administrative Services, Inc. (BPAS), reached an agreement to acquire a professional services practice from EBS-RMSCO, Inc., a subsidiary of The Lifetime Healthcare Companies. This professional services practice, which provides actuarial valuation and consulting services to clients who sponsor pension and post-retirement medical and welfare plans, enhances the Company’s participation in the Western New York marketplace and is expected to add incremental revenue of approximately $1.5 million annually. The transaction was completed as planned on January 1, 2014.

Conference Call Scheduled

Company management will conduct an investor call at 11:00 a.m. (ET) tomorrow (Wednesday, January 22, 2014) to discuss fourth quarter and year end 2013 results. The conference call can be accessed at 888-576-4398 (1-719-325-2455 if outside United States and Canada) using the conference ID code 7882237. Investors may also listen live via the Internet at: http://www.videonewswire.com/event.asp?id=97553. The recording will be archived until January 22, 2015 and can be accessed at any point during this time at no cost.

This earnings release, including supporting financial tables, is available within the press releases section of the Company's investor relations website at: http://ir.communitybanksystem.com. An archived webcast of the earnings call will be available on this site for one full year.

Headquartered in DeWitt, N.Y., Community Bank System, Inc. has more than $7.0 billion in assets and over 190 customer facilities. The Company’s banking subsidiary, Community Bank, N.A. operates across Upstate New York and Northeastern Pennsylvania. Its other subsidiaries include: Benefit Plans Administrative Services, Inc., a national employee benefits consulting and trust administration firm; the CBNA Insurance Agency, with offices in five northern New York communities; Community Investment Services, Inc., a wealth management firm delivering a wide range of financial products throughout the Company's branch network; and Nottingham Advisors, an investment management and advisory firm. For more information, visit www.communitybankna.com.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The following factors, among others, could cause the actual results of CBU’s operations to differ materially from CBU’s expectations: the successful integration of operations of its acquisitions; competition; changes in economic conditions, interest rates and financial markets; and changes in legislation or regulatory requirements. These statements are based on the current beliefs and expectations of CBU’s management and CBU does not assume any duty to update forward-looking statements.

               
Summary of Financial Data
(Dollars in thousands, expect per share data)
   
Quarter Ended Year-to-Date
  December 31, December 31, December 31, December 31,
Earnings 2013     2012     2013     2012
Loan income $47,061 $49,405 $188,197 $192,710
Investment income 18,901 22,545 75,962 88,690
Total interest income 65,962 71,950 264,159 281,400
Interest expense 5,326 11,981 26,065 50,976
Net interest income 60,636 59,969 238,094 230,424
Provision for loan losses 3,185 2,666 7,992 9,108
Net interest income after provision for loan losses 57,451 57,303 230,102 221,316
Deposit service fees 12,714 12,603 49,357 46,064
Mortgage banking revenues 562 161 1,673 843
Other banking services 954 613 3,572 3,226
Wealth management services 3,984 3,449 15,550 12,876
Benefit trust, administration, consulting and actuarial fees 10,032 9,397 38,596 35,946
Gain on sales of investment securities 16,969 0 80,768 291
Loss on debt extinguishments (23,836) 0 (87,336) 0
Total noninterest income 21,379 26,223 102,180 99,246
Salaries and employee benefits 30,412 29,639 121,629 112,034
Occupancy and equipment and furniture 6,782 6,665 27,045 25,799
Amortization of intangible assets 1,061 1,264 4,469 4,607
Acquisition expenses 2,105 527 2,176 5,747
Other 16,923 18,804 65,936 63,570
Total operating expenses 57,283 56,899 221,255 211,757
Income before income taxes 21,547 26,627 111,027 108,805
Income taxes 6,070 7,823 32,198 31,737
Net income $15,477 $18,804 $78,829 $77,068
Basic earnings per share $0.38 $0.47 $1.96 $1.95
Diluted earnings per share     $0.38     $0.47     $1.94     $1.93
 
                   

Summary of Financial Data

(Dollars in thousands, except per share data)                      
2013 2012
  4th Qtr     3rd Qtr     2nd Qtr     1st Qtr     4th Qtr
Earnings                          
Loan income $47,061 $47,606 $46,412 $47,118 $49,405
Investment income 18,901 18,526 17,728 20,807 22,545
Total interest income 65,962 66,132 64,140 67,925 71,950
Interest expense 5,326 5,531 5,708 9,500 11,981
Net interest income 60,636 60,601 58,432 58,425 59,969
Provision for loan losses 3,185 2,093 1,321 1,393 2,666
Net interest income after provision for loan losses 57,451 58,508 57,111 57,032 57,303
Deposit service fees 12,714 12,703 12,345 11,595 12,603
Mortgage banking revenues 562 599 341 171 161
Other banking services 954 1,072 679 867 613
Wealth management services 3,984 3,823 4,045 3,698 3,449
Benefit trust, administration, consulting and actuarial fees 10,032 9,397 9,397 9,770 9,397
Gain on sales of investment securities 16,969 0 16,008 47,791 0
Loss on debt extinguishments (23,836) 0 (15,717) (47,783) 0
Total noninterest income 21,379 27,594 27,098 26,109 26,223
Salaries and employee benefits 30,412 30,448 30,286 30,483 29,639
Occupancy and equipment 6,782 6,448 6,750 7,065 6,665
Amortization of intangible assets 1,061 1,089 1,140 1,179 1,264
Acquisition expenses 2,105 71 0 0 527
Other 16,923 16,988 16,200 15,825 18,804
Total operating expenses 57,283 55,044 54,376 54,552 56,899
Income before income taxes 21,547 31,058 29,833 28,589 26,627
Income taxes 6,070 9,069 8,711 8,348 7,823
Net income $15,477 21,989 21,122 20,241 18,804
Basic earnings per share $0.38 $0.55 $0.53 $0.51 $0.47
Diluted earnings per share $0.38     $0.54     $0.52     $0.50     $0.47
Profitability                          
Return on assets 0.84% 1.22% 1.21% 1.11% 1.00%
Return on equity 7.04% 10.26% 9.70% 9.18% 8.20%
Return on tangible equity(3) 11.78% 17.57% 16.38% 15.32% 13.55%
Noninterest income/operating income (FTE) (1) 30.5% 30.0% 30.2% 29.5% 29.0%
Efficiency ratio (2) 58.5%     58.6%     59.9%     60.3%     58.2%
Components of Net Interest Margin (FTE)                          
Loan yield 4.61% 4.76% 4.79% 4.98% 5.16%
Cash equivalents yield 0.22% 0.22% 0.26% 0.26% 0.26%
Investment yield 3.54% 3.52% 3.83% 3.79% 3.85%
Earning asset yield 4.20% 4.28% 4.35% 4.44% 4.54%
Interest-bearing deposit rate 0.21% 0.22% 0.24% 0.28% 0.34%
Borrowing rate 1.86% 2.02% 3.36% 3.76% 3.89%
Cost of all interest-bearing funds 0.41% 0.43% 0.46% 0.73% 0.89%
Cost of funds (includes DDA) 0.33% 0.35% 0.38% 0.61% 0.74%
Net interest margin (FTE) 3.88% 3.94% 3.98% 3.86% 3.83%
Fully tax-equivalent adjustment     $3,666     $3,728     $3,644     $4,022     $4,209
 
                   
Summary of Financial Data
(Dollars in thousands, except per share data)
   
2013 2012
  4th Qtr     3rd Qtr     2nd Qtr     1st Qtr     4th Qtr
Average Balances                          
Loans $4,069,204 $3,985,755 $3,899,744 $3,860,722 $3,834,068
Cash equivalents 11,085 8,644 148,188 83,812 106,851
Taxable investment securities 1,861,206 1,833,355 1,565,756 1,965,073 2,035,651
Nontaxable investment securities 639,199 644,728 642,424 655,694 691,525
Total interest-earning assets 6,580,694 6,472,482 6,256,112 6,565,301 6,668,095
Total assets 7,278,167 7,154,796 7,003,823 7,368,906 7,506,371
Interest-bearing deposits 4,546,591 4,511,199 4,581,206 4,581,130 4,545,347
Borrowings 634,472 589,065 358,627 686,483 830,149
Total interest-bearing liabilities 5,181,063 5,100,264 4,939,833 5,267,613 5,375,496
Noninterest-bearing deposits 1,149,873 1,138,039 1,095,774 1,095,256 1,098,193
Shareholders' equity 872,567     850,238     873,108     893,746     912,321
Balance Sheet Data                          
Cash and cash equivalents $149,647 $174,205 $148,573 $330,298 $228,558
Investment securities 2,218,725 2,518,574 2,366,512 2,448,120 2,818,527
Loans:
Business lending 1,260,364 1,214,796 1,225,671 1,222,835 1,233,944
Consumer mortgage 1,582,058 1,570,607 1,527,341 1,480,192 1,448,415
Consumer indirect 740,002 713,310 663,924 639,560 647,518
Home equity 346,520 348,246 347,335 353,365 364,225
Consumer direct 180,139 178,496 171,727 165,649 171,474
Total loans 4,109,083 4,025,455 3,935,998 3,861,601 3,865,576
Allowance for loan losses 44,319 44,083 43,473 42,913 42,888
Intangible assets, net 390,499 383,735 384,815 385,954 387,134
Other assets 272,229 244,131 228,291 238,013 239,893
Total assets 7,095,864 7,302,017 7,020,716 7,221,073 7,496,800
Deposits:
Noninterest-bearing 1,203,346 1,158,013 1,120,683 1,115,417 1,110,994
Non-maturity interest-bearing 3,766,145 3,630,684 3,608,829 3,678,905 3,501,630
Time 926,553 898,636 940,618 980,502 1,015,415
Total deposits 5,896,044 5,687,333 5,670,130 5,774,824 5,628,039
Borrowings 141,913 567,116 322,319 361,422 728,061
Subordinated debt held by unconsolidated subsidiary trusts 102,097 102,091 102,085 102,079 102,073
Accrued interest and other liabilities 79,998 79,798 76,151 105,454 135,849
Total liabilities 6,220,052 6,436,338 6,170,685 6,343,779 6,594,022
Shareholders' equity 875,812 865,679 850,031 877,294 902,778
Total liabilities and shareholders' equity 7,095,864     7,302,017     7,020,716     7,221,073     7,496,800
Capital                          
Tier 1 leverage ratio 9.29% 9.39% 9.43% 8.78% 8.40%
Tangible equity/net tangible assets (3) 7.68% 7.38% 7.43% 7.58% 7.62%
Diluted weighted average common shares O/S 41,061 40,850 40,558 40,321 40,179
Period end common shares outstanding 40,431 40,296 40,099 39,989 39,626
Cash dividends declared per common share $0.28 $0.28 $0.27 $0.27 $0.27
Book value $21.66 $21.48 $21.20 $21.94 $22.78
Tangible book value(3) $12.80 $12.73 $12.35 $13.01 $13.72
Common stock price (end of period)     $39.68     $34.12     $30.85     $29.63     $27.36
 
                   
Summary of Financial Data
(Dollars in thousands, except per share data)
   
2013 2012
  4th Qtr     3rd Qtr     2nd Qtr     1st Qtr     4th Qtr
Asset Quality                          
Nonaccrual loans $19,474 $21,713 $22,997 $24,806 $26,360
Accruing loans 90+ days delinquent 2,554 2,650 1,439 2,560 2,748
Total nonperforming loans 22,028 24,363 24,436 27,366 29,108
Other real estate owned (OREO) 5,060 5,218 5,066 6,838 4,788
Total nonperforming assets 27,088 29,581 29,502 34,204 33,896
Net charge-offs 2,949 1,483 761 1,368 2,596
Allowance for loan losses/loans outstanding 1.08% 1.10% 1.10% 1.11% 1.11%
Nonperforming loans/loans outstanding 0.54% 0.61% 0.62% 0.71% 0.75%
Allowance for loan losses/nonperforming loans 201% 181% 178% 157% 147%
Net charge-offs/average loans 0.29% 0.14% 0.08% 0.14% 0.27%
Delinquent loans/ending loans 1.49% 1.48% 1.50% 1.55% 1.92%
Loan loss provision/net charge-offs 108% 147% 173% 102% 103%
Nonperforming assets/total assets 0.38%     0.41%     0.42%     0.47%     0.45%
Asset Quality (excluding loans acquired since 1/1/09)                          
Nonaccrual loans $16,066 $17,365 $18,272 $19,756 $21,928
Accruing loans 90+ days delinquent 2,418 2,471 1,349 2,164 2,355
Total nonperforming loans 18,484 19,836 19,621 21,920 24,283
Other real estate owned (OREO) 2,832 2,767 2,963 3,844 1,397
Total nonperforming assets 21,316 22,603 22,584 25,764 25,680
Net charge-offs 1,956 1,583 604 1,102 1,863
Allowance for loan losses/loans outstanding 1.15% 1.16% 1.19% 1.21% 1.21%
Nonperforming loans/loans outstanding 0.49% 0.54% 0.55% 0.64% 0.71%
Allowance for loan losses/nonperforming loans 234% 215% 215% 190% 171%
Net charge-offs/average loans 0.21% 0.17% 0.07% 0.13% 0.19%
Delinquent loans/ending loans 1.44% 1.45% 1.44% 1.48% 1.82%
Loan loss provision/net charge-offs 130% 126% 210% 113% 102%
Nonperforming assets/total assets     0.32%     0.33%     0.34%     0.38%     0.36%
 

(1)

 

Excludes gains and losses on sales of investment securities and debt prepayments.

(2)

Excludes intangible amortization, acquisition expenses, litigation settlement charge, gains and losses on sales of investment securities and losses on debt extinguishments.

(3)

Includes deferred tax liabilities (of approximately $32.3 million at 12/31/13) generated from tax deductible goodwill.

 

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The following factors, among others, could cause the actual results of CBU’s operations to differ materially from CBU’s expectations: the successful integration of operations of its acquisitions; competition; changes in economic conditions, interest rates and financial markets; and changes in legislation or regulatory requirements. CBU does not assume any duty to update forward-looking statements.

Contact:
Community Bank System, Inc.
Scott A. Kingsley, 315-445-3121
EVP & Chief Financial Officer

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