Exhibit 99.1
 |
News Release
For further information, please contact: |
| 5790 Widewaters Parkway, DeWitt, N.Y. 13214 |
Joseph E. Sutaris, EVP & Chief Financial Officer
Office: (315) 445-7396 |
Community Bank System, Inc. Reports
First Quarter 2024 Results
SYRACUSE, N.Y. — April 23, 2024 — Community Bank System,
Inc. (the “Company”) (NYSE: CBU) reported first quarter 2024 results that are included in the attached supplement. This earnings
release, including supporting financial tables, is also available within the press releases section of the Company's investor relations
website at: https://ir.communitybanksystem.com/news-presentations/press-releases/. An archived
webcast of the earnings call will be available on this site for one full year.
First Quarter 2024 Performance Summary
| · | Net income of $40.9 million, or $0.76 per fully diluted share, increased $35.1 million, or $0.65
per fully diluted share, from the prior year’s first quarter and increased $7.2 million, or $0.13 per fully diluted share, from
the fourth quarter of 2023 |
| · | Operating net income, a non-GAAP measure that excludes the after-tax effects of acquisition expenses,
acquisition-related contingent consideration adjustments, restructuring expenses, litigation accrual, gain on debt extinguishment, loss
on sales of investment securities, unrealized gain (loss) on equity securities and amortization of intangible assets from net income,
of $43.8 million, or $0.82 per fully diluted share, decreased $5.9 million, or $0.10 per fully diluted share, from the prior year’s
first quarter and was consistent with the fourth quarter of 2023 |
| · | Total revenues of $177.3 million, a new quarterly record for the Company, increased $52.8 million,
or 42.4%, from the prior year’s first quarter that included a $52.3 million pre-tax realized loss on sales of investment securities,
and increased $0.3 million, or 0.2%, from the fourth quarter of 2023 |
| · | Total financial services (employee benefit services, insurance services and wealth management services)
revenues of $52.0 million, also a new quarterly record for the Company, increased $2.9 million, or 5.8%, from the prior year’s first
quarter and increased $2.5 million, or 5.0%, from the fourth quarter of 2023 |
| · | Operating pre-tax, pre-provision net revenue, a non-GAAP measure that excludes the provision for
credit losses, acquisition expenses, acquisition-related contingent consideration adjustments, restructuring expenses, litigation accrual,
gain on debt extinguishment, loss on sales of investment securities, unrealized gain (loss) on equity securities and amortization of intangible
assets from income before income taxes, of $62.9 million, or $1.18 per fully diluted share, decreased $3.4 million, or $0.04 per fully
diluted share, from the prior year’s first quarter and increased $2.4 million, or $0.05 per fully diluted share, from the fourth
quarter of 2023 |
| · | Total ending loans of $9.88 billion increased $178.9 million, or 1.8%, from the end of 2023, marking
the eleventh consecutive quarter of loan growth, and increased $901.2 million, or 10.0%, from the end of the prior year’s first
quarter |
| · | Total ending deposits of $13.35 billion increased $423.9 million, or 3.3%, from the end of 2023
and increased $241.4 million, or 1.8%, from the end of the prior year’s first quarter |
| · | Annualized loan net charge-offs were 0.12% for the quarter |
| · | Tier 1 leverage ratio of 9.01% at the end of the quarter continues to substantially exceed the
regulatory well-capitalized standard of 5.0% |
Company management will conduct an
investor call at 11:00 a.m. (ET) today, April 23, 2024, to discuss the first quarter 2024 results. The conference call can be accessed
at 1-833-630-0464 (1-412-317-1809 if outside the United States and Canada). Investors may also listen live via the Internet at: https://app.webinar.net/OXrxVp7w7PM.
About Community Bank System, Inc.
Community Bank System, Inc. is a diversified financial services company
that is focused on four main business lines – banking, employee benefit services, insurance services and wealth management. Its
banking subsidiary, Community Bank, N.A., is among the country’s 100 largest banking institutions with over $15 billion in assets
and operates approximately 200 customer facilities across Upstate New York, Northeastern Pennsylvania, Vermont, and Western Massachusetts.
The Company’s Benefit Plans Administrative Services, Inc. subsidiary is a leading provider of employee benefits administration,
trust services, collective investment fund administration, and actuarial consulting services to customers on a national scale. The Company’s
OneGroup NY, Inc. subsidiary is a top 75 U.S. insurance agency. The Company also offers comprehensive financial planning, trust administration
and wealth management services through its Community Bank Wealth Management operating unit.
Community Bank System, Inc. is listed on the New York Stock Exchange
and the Company’s stock trades under the symbol CBU. For more information about Community Bank visit www.cbna.com
or https://ir.communitybanksystem.com.
| |
News
Release
For
further information, please contact: |
| 5790 Widewaters
Parkway, DeWitt, N.Y. 13214 |
Joseph
E. Sutaris, EVP & Chief Financial Officer
Office:
(315) 445-7396 |
Community
Bank System, Inc. Reports First Quarter 2024 Results
SYRACUSE, N.Y. — April
23, 2024
Community
Bank System, Inc. (the “Company”) (NYSE: CBU) reported first quarter 2024 net
income of $40.9 million, or $0.76 per fully diluted share and non-GAAP operating net income
of $43.8 million, or $0.82 per fully diluted share.
|
| |
“Our
Company continued to execute on our below average risk investment profile through our diverse
revenue streams, solid core funding and regulatory capital position, strong credit and robust
liquidity levels. For the second consecutive quarter the overall Company established a new
record for quarterly revenues, despite the continued pressure on funding costs,” commented
Dimitar A. Karaivanov, President and CEO.
“Strong results in
our market-sensitive recurring fee income businesses mitigated margin pressure in our banking business and growth in operating expenses
moderated as expected. While quantitative credit metrics remain very strong and improved during the quarter, we modestly increased our
qualitative assessment of future uncertainty and proactively added to our reserves. The Company’s operating pre-tax, pre-provision
net revenue per share, a non-GAAP measure, was up $0.05, or 4.4%, over the linked fourth quarter, demonstrating solid improvement in
the Company’s core operating performance.
Looking forward, we anticipate
continued growth in revenues with controlled expenses, moderation of funding costs and normalization of the credit environment.” |
| During the first quarter of 2024, the Company modified the presentation of its non-GAAP operating results to exclude amortization of intangible assets which the Company believes better reflects core performance across its segments and enhances comparability to both banking and non-banking organizations. The prior periods have been recast to conform to the current period presentation. |
First Quarter 2024
Performance
Operating
Performance |
·
Diluted Earnings Per Share
o
$0.76 per share, an increase of $0.65 per share from the first quarter
of 2023 and an increase of $0.13 per share from the fourth quarter of 2023
·
Operating Diluted Earnings Per Share (non-GAAP)
o
$0.82 per share, a decrease of $0.10 per share from the first quarter
of 2023 and consistent with the fourth quarter of 2023
·
Operating Pre-Tax, Pre-Provision Net Revenue Per Share (non-GAAP)
o
$1.18 per share, a decrease of $0.04 per share from the first quarter
of 2023 and an increase of $0.05 per share from the fourth quarter of 2023 |
| |
|
| Return Metrics |
·
Return on Assets | Operating Return on Assets (non-GAAP)
o
1.04% | 1.11%
·
Return on Equity | Operating Return on Equity (non-GAAP)
o
9.78% | 10.47% |
| Revenues |
·
Total Revenues
o
$177.3 million, an increase of $52.8 million, or 42.4%, from the first
quarter of 2023 and an increase of $0.3 million, or 0.2%, from the fourth quarter of 2023
·
Total Operating Revenues (non-GAAP)
o
$177.3 million, an increase of $0.6 million, or 0.4%, from the first
quarter of 2023 and an increase of $0.4 million, or 0.2%, from the fourth quarter of 2023
·
Noninterest Revenues
o
$70.3 million, an increase of $56.8 million from the first quarter of
2023 and an increase of $2.5 million, or 3.7%, from the fourth quarter of 2023
·
Total Operating Noninterest Revenues (non-GAAP)
o
$70.3 million, an increase of $4.7 million, or 7.1%, from the first
quarter of 2023 and an increase of $2.6 million, or 3.8%, from the fourth quarter of 2023
·
Noninterest Revenues/Total Revenues | Operating Noninterest Revenues/Operating
Revenues (FTE) (non-GAAP)
o
39.6% | 39.4% |
| |
|
Net Interest Income
and Net Interest
Margin |
·
Net Interest Income
o
$107.0 million, a decrease of $2.2 million, or 2.0%, from the fourth
quarter of 2023 and a decrease of $4.0 million, or 3.6%, from the first quarter of 2023
·
Net Interest Margin
o
2.95%, a decrease of 10 basis points from 3.05% for the fourth quarter
of 2023 and a decrease of 22 basis points from 3.17% for the first quarter of 2023
·
Net Interest Margin (Fully Tax-Equivalent) (non-GAAP)
o
2.98%, a decrease of nine basis points from 3.07% for the fourth quarter
of 2023 and a decrease of 22 basis points from 3.20% for the first quarter of 2023 |
| |
|
Balance
Sheet and
Funding |
·
Total Ending Loans
o
$9.88 billion, an increase of $178.9 million, or 1.8%, from December
31, 2023, and an increase of $901.2 million, or 10.0%, from one year ago
·
Total Ending Deposits
o
$13.35 billion, an increase of $423.9 million, or 3.3%, from December
31, 2023, and an increase of $241.4 million, or 1.8%, from one year ago
·
Total Deposit Funding Costs | Total Cost of Funds
o
1.14% | 1.31% |
| |
|
| Risk Metrics |
·
Annualized Loan Net Charge-Offs
o
0.12%
·
Tier 1 Leverage Ratio
o
9.01%
·
Loan-to-deposit ratio
o
74.0%
·
Non-owner occupied and multifamily commercial real estate (“CRE”)
/ total bank-level regulatory capital
o
201% |
First Quarter 2024 Business Segment Revenues
| Banking |
·
Total Revenues of $125.3 million decreased $2.4 million, or 1.9%, from
the first quarter of 2023 excluding the impact of $52.3 million of investment securities losses in the prior year’s first quarter
and decreased $2.2 million, or 1.7%, from the fourth quarter of 2023.
·
The decreases between both periods were primarily due to lower net interest
income resulting from higher funding costs, partially offset by increases in noninterest revenues. |
| |
|
Employee Benefit
Services |
·
Total Revenues of $31.7 million increased $2.3 million, or 7.9%, from
the first quarter of 2023 and $1.7 million, or 5.6%, from the fourth quarter of 2023.
·
The increases between both periods were reflective of increases in the
total participants under administration along with growth in asset-based fee revenues resulting from market appreciation and the acquisition
of certain assets of Creative Plan Designs Limited on February 1, 2024. |
| |
|
Insurance
Services |
·
Total Revenues of $11.1 million decreased $0.4 million, or 3.6%, from
the first quarter of 2023 and $0.5 million, or 4.2%, from the fourth quarter of 2023.
·
The decreases between both periods were reflective of timing differences
in certain commercial policy renewals and lower insurance carrier-related contingency revenues. |
| |
|
Wealth
Management
Services |
·
Total Revenues of $9.2 million increased $1.0 million, or 11.7%, from
the first quarter of 2023 and $1.3 million, or 16.5%, from the fourth quarter of 2023.
·
The increases between both periods were reflective of more favorable
investment market conditions that drove increases in assets under management between the periods. |
Results of Operations
The Company reported first quarter 2024 net income of $40.9 million, or $0.76 per
fully diluted share. This compares to net income of $5.8 million, or $0.11 per fully diluted share for the first quarter of 2023. The
$0.65 increase in earnings per share was primarily reflective of the realized loss on investment security sales recognized in the first
quarter of 2023 which negatively impacted first quarter 2023 earnings per share by $0.75. Excluding this item, earnings per share decreased
$0.10, driven by increases in noninterest expenses, the provision for credit losses and income taxes and a decrease in net interest income,
partially offset by an increase in noninterest revenues and a decrease in the number of fully diluted shares outstanding. Comparatively,
the Company’s diluted earnings per share increased $0.13 from $0.63 per share for the linked fourth quarter of 2023 due to decreases
in noninterest expenses and the number of fully diluted shares outstanding and an increase in noninterest revenues, partially offset by
increases in income taxes and the provision for credit losses and a decrease in net interest income.
Net Interest Income and Net Interest Margin
The Company’s eleventh consecutive quarter of loan growth supported continued
expansion in interest income that was offset by higher interest expense driven by funding cost pressures.
| · | Net interest income in the first quarter of 2024 was $107.0 million, down
$4.0 million, or 3.6%, compared to the first quarter of 2023, and down $2.2 million, or 2.0%, from the fourth quarter of 2023. |
| · | Net interest margin in the first quarter of 2.95% and fully tax-equivalent
net interest margin, a non-GAAP measure, of 2.98% both decreased by 22 basis points from the first quarter of 2023. These decreases were
primarily the result of an increase in the cost of interest-bearing liabilities, partially offset by higher yields on interest-earning
assets and a higher proportion of those assets being comprised of loan balances. The change in composition of interest-earning assets
was primarily due to strong organic loan growth and a decrease in investment securities balances driven by maturities between the periods
and the sales of certain lower-yielding available-for-sale investment securities in the prior year’s first quarter. |
| · | The yield on interest-earning assets increased 61 basis points to 4.24%
over the prior year’s first quarter primarily as a result of higher loan yields due to market-related increases in interest rates
on new loans, an increase in variable and adjustable-rate loan yields driven by rising market interest rates, including the prime rate,
and a high level of new loan originations. |
| · | The cost of interest-bearing liabilities increased 115 basis points from
0.62% in the first quarter of 2023 to 1.77% in the first quarter of 2024 as a result of market-driven higher deposit and borrowing rates
and change in deposit mix. |
| · | On a linked quarter basis, net interest margin decreased by 10 basis points,
while tax-equivalent net interest margin, a non-GAAP measure, decreased by nine basis points. The cost of funds increased 23 basis points,
including a 29 basis point increase in the cost of interest-bearing liabilities, while the yield on interest-earning assets increased
13 basis points. The increase in the cost of interest-bearing liabilities included a 19 basis point increase in the average interest-bearing
deposit rate and a 69 basis point increase in the average borrowing rate impacted by the Company’s short-term utilization of the
Federal Reserve’s Bank Term Funding Program during the first quarter which temporarily reduced the proportion of lower rate customer
repurchase agreements to total borrowings. |
Noninterest Revenues
The Company’s banking and financial services (including employee benefit
services, insurance services and wealth management services) noninterest revenue streams continue to reduce its dependence on net interest
income and lay a solid foundation for future growth and opportunities.
| · | Banking noninterest revenues, comprised of deposit service and other banking
fees and mortgage banking noninterest revenues, increased $1.8 million, or 11.1%, from $16.4 million in the first quarter of 2023 to $18.2
million in the first quarter of 2024, reflective of increases in debit interchange and ATM fees as well as CRE financing and advisory
revenues. Comparatively, banking noninterest revenues increased $0.1 million, or 0.3%, from the fourth quarter of 2023. |
| · | Employee benefit services revenues for the first quarter of 2024 were $31.7
million, an increase of $2.3 million, or 7.9%, in comparison to the first quarter of 2023 and $1.7 million, or 5.6%, from the fourth quarter
of 2023, driven by new business and increases in the total participants under administration, along with growth in asset-based fee revenues
resulting from market appreciation and the acquisition of certain assets of Creative Plan Designs Limited, a provider of employee benefit
plan design, administration and consulting, on February 1, 2024. |
| · | Insurance services revenues for the first quarter of 2024 were $11.1 million,
which represents a $0.4 million, or 3.6%, decrease versus the prior year’s first quarter and $0.5 million, or 4.2%, from the fourth
quarter of 2023, due in part to timing differences in certain commercial policy renewals and lower insurance carrier-related contingency
revenues. |
| · | Wealth management services revenues for the first quarter of 2024 were
$9.2 million, an increase of $1.0 million, or 11.7%, from $8.2 million in the first quarter of 2023 and $1.3 million, or 16.5%, from the
fourth quarter of 2023. The increases between both periods were reflective of growth in assets under management primarily driven by favorable
investment market conditions. |
Noninterest Expenses and Income Taxes
The Company continues to maintain a focus on managing expenses consistent with
its organic growth strategies and scale objectives, while evaluating efficiency opportunities and the enhancement of operating leverage
in all lines of business.
| · | The Company recorded $118.1 million in total noninterest expenses in the
first quarter of 2024, compared to $114.1 million of total noninterest expenses in the prior year’s first quarter. The $4.0 million,
or 3.5%, increase between the periods was mainly driven by higher salaries and employee benefits, data processing and communications expenses
and other expenses. |
| · | The $1.6 million, or 2.2%, increase in salaries and employee benefits expenses
was primarily driven by merit and market-related increases in employee wages, partially offset by the impact of the previously announced
retail customer service workforce optimization plan and a decrease in employee retirement-related severance expense. |
| · | The $1.2 million, or 9.3%, increase in data processing and communications
expenses is reflective of the Company’s continued investment in customer-facing and back-office technologies including investments
being made in additional technology to enhance its detection and prevention of customer payment-related fraud and cybersecurity-related
incidents. |
| · | Other expenses were up $1.6 million, or 24.4%, primarily due to increases
in insurance expenses, including $0.4 million associated with an additional expected increase to the FDIC special assessment to recover
the loss to the Deposit Insurance Fund associated with protecting uninsured depositors following the closures of certain banks in the
first quarter of 2023, along with the impact of a higher FDIC insurance assessment rate and non-service related components lowering the
net periodic pension benefit credit. |
| · | The effective tax rate for the first quarter of 2024 was 22.9%, up from
16.9% in the first quarter of 2023. Excluding the impact of tax expense and benefits related to stock-based compensation activity and
income tax credit amortization, the effective tax rate for the first quarter of 2024 was 22.0%, up from 21.4% in the first quarter of
2023. |
Financial Position and Liquidity
The Company’s financial position and liquidity profile remain strong, demonstrating
the effectiveness of its strategic asset and liability management and prudent financial planning.
| · | The Company’s total assets were $15.86 billion at March 31, 2024,
representing a $602.7 million, or 4.0%, increase from one year prior and a $302.9 million, or 1.9%, increase from the end of 2023. The
increase in the Company’s total assets during the twelve-month period was primarily driven by organic loan growth, partially offset
by the maturities of certain available-for-sale investment securities. The increase in total assets from the end of 2023 was reflective
of net deposit inflows and continued organic loan growth. |
| · | At March 31, 2024, the Company’s readily available sources of liquidity
totaled $4.60 billion, including cash and cash equivalents balances of $338.4 million, investment securities unpledged as collateral totaling
$1.58 billion, unused borrowing capacity at the Federal Home Loan Bank of New York of $1.55 billion and $1.13 billion of funding availability
at the Federal Reserve Bank’s discount window. |
| · | The available sources of immediately available liquidity represent over
200% of the Company’s estimated uninsured deposits, net of collateralized and intercompany deposits. |
| · | Estimated insured deposits, net of collateralized and intercompany deposits,
represent greater than 80% of first quarter total ending deposits. |
Deposits and Funding
The Company continues to leverage its robust core deposit base, characterized by
low funding costs, to support its financial operations.
| · | Ending deposits at March 31, 2024 of $13.35 billion were $423.9 million,
or 3.3%, higher than the end of 2023 and $241.4 million, or 1.8%, higher than one year prior primarily driven by net inflows of public
fund deposits due in part to seasonal tax collection. |
| · | Ending borrowings of $682.4 million at March 31, 2024, which included $395.1
million of fixed rate Federal Home Loan Bank of New York term borrowings and $287.3 million of customer repurchase agreements, decreased
$82.8 million, or 10.8%, from December 31, 2023 and increased $302.1 million, or 79.4%, from the year prior. |
| · | The Company’s average cost of funds increased 87 basis points, from
0.44% in the first quarter of 2023 to 1.31% in the first quarter of 2024, while the average cost of total deposits remained comparatively
low relative to the industry at 1.14% for the quarter. |
| · | Through the end of the first quarter of 2024, the Company’s cycle-to-date
deposit beta was 20% and the cycle-to-date total funding beta was 23%. The target Federal Funds rate has increased 525 basis points since
December 31, 2021, while the Company’s total deposit costs and total funding costs increased 106 basis points and 122 basis points,
respectively, over the same period. |
| · | The Company’s deposit base is well diversified across customer segments,
comprised of approximately 60% consumer, 25% business and 15% municipal at the end of the current quarter, and broadly dispersed as illustrated
by an average deposit balance per account of under $20,000. |
| · | 66% of the Company’s total deposits were in checking and nominal-cost
savings accounts at the end of the first quarter and the Company does not currently utilize brokered or wholesale deposits. Time deposit
accounts represented 15% of the Company’s total deposits at the end of the first quarter of 2024, up seven percentage points from
the end of the first quarter of 2023 and two percentage points from the end of 2023 reflective of customers responding to changes in market
interest rates by moving funds into higher yielding account types. |
Loans and Credit Quality
The Company’s predominantly footprint-based loan portfolio is growing and
diversified, with a core focus on credit quality.
| · | Ending loans at March 31, 2024 of $9.88 billion were $178.9 million, or
1.8%, higher than December 31, 2023 and $901.2 million, or 10.0%, higher than one year prior with the year-over-year growth driven by
increases in all loan categories due to net organic growth. |
| · | At March 31, 2024, the Company’s allowance for credit losses totaled
$70.1 million, or 0.71% of total loans outstanding, compared to $66.7 million, or 0.69% of total loans outstanding, at the end of 2023
and $63.2 million, or 0.70% of total loans outstanding, at March 31, 2023. |
| · | Reflective of an increase in loans outstanding and a stable economic forecast,
the Company recorded a $6.1 million provision for credit losses during the first quarter of 2024 as the Company increased its qualitative
assessment of future uncertainty and built credit loss reserves that were primarily attributable to the business lending and consumer
indirect portfolios. While certain macroeconomic concerns are emerging related to non-owner occupied and multifamily CRE, the Company’s
exposure to this portfolio remains diverse both geographically and by property type, and relatively low at 15% of total assets, 25% of
total loans and 201% of total bank-level regulatory capital. Additionally, the current levels of delinquencies and charge-offs within
this portfolio remain below long-term historical averages and credit risk ratings remain stable, reflecting the solid asset quality of
this portfolio. |
| · | The Company recorded net charge-offs of $2.8 million, or an annualized
0.12% of average loans, in the first quarter of 2024 compared to net charge-offs of $1.5 million, or an annualized 0.07% of average loans,
in the first quarter of 2023 and net charge-offs of $2.3 million, or an annualized 0.10% of average loans, in the fourth quarter of 2023. |
| · | Total delinquent loans, which includes loans 30 or more days past due and
nonaccrual loans, as a percentage of total loans outstanding was 0.93% at the end of the first quarter of 2024. This compares to 0.73%
at the end of the first quarter of 2023 and 1.06% at the end of 2023. |
| · | At March 31, 2024, nonperforming (90 or more days delinquent and non-accruing)
loans were $49.5 million, or 0.50% of total loans outstanding compared to $54.6 million, or 0.56% of total loans outstanding at the end
of 2023 and $33.8 million, or 0.38% of total loans outstanding one year earlier. The increase from the end of the first quarter of 2023
was primarily attributable to an increase in nonaccrual business lending loan balances in the fourth quarter of 2023, driven largely by
the performance of three customers that were individually assessed for a specific allocation of the allowance for credit losses. |
| · | Loans 30 to 89 days delinquent (categorized by the Company as delinquent
but performing), which tend to exhibit seasonal characteristics, were 0.43% of total loans outstanding at March 31, 2024, down from 0.50%
at the end of 2023 and up from 0.35% one year earlier. |
Shareholders’ Equity and Regulatory Capital
The Company’s capital planning and management activities, coupled with its
diversified streams of revenue and prudent dividend practices, have allowed it to build and maintain a strong capital position. At March
31, 2024, all of the Company’s and the Bank’s regulatory capital ratios significantly exceeded well-capitalized standards.
| · | Shareholders’ equity of $1.66 billion at March 31, 2024 was $22.9
million, or 1.4%, higher than one year ago, primarily due to a $71.5 million increase in retained earnings due to net income retention,
partially offset by a $52.7 million increase in treasury stock due to share repurchases. Shareholders’ equity decreased $41.0 million,
or 2.4%, from December 31, 2023, primarily driven by a $33.4 million increase in treasury stock due to share repurchases and a $27.3 million
increase in accumulated other comprehensive loss related to the Company’s investment securities portfolio, partially offset by a
$17.1 million increase in retained earnings due to net income retention. |
| · | The Company’s shareholders’ equity to assets ratio was 10.45%
at March 31, 2024, down from 10.71% at March 31, 2023 and 10.92% at December 31, 2023. |
| · | The Company’s tier 1 leverage ratio of 9.01% at March 31, 2024 decreased
five basis points from one year earlier and 33 basis points from December 31, 2023 and remained substantially above the regulatory well-capitalized
standard of 5.0%. |
| · | The Company’s tangible equity to tangible assets ratio (non-GAAP)
was 5.32% at March 31, 2024, down from 5.41% a year earlier and 5.75% at the end of 2023. Tangible assets (non-GAAP) increased $599.3
million, or 4.2%, from the prior year due primarily to organic loan growth, partially offset by the maturities of certain available-for-sale
investment securities. Tangible equity (non-GAAP) increased $19.5 million, or 2.5%, from one year prior due to the aforementioned net
income retention, partially offset by the impact of share repurchases between the periods. |
Dividend Increase and Stock Repurchase Program
The payment of a meaningful and growing dividend is an important component of the
Company’s commitment to provide consistent and favorable long term returns to its shareholders, and it reflects the continued strength
of the Company’s long-term operating results and capital position, and management’s confidence in the future performance of
the Company. The $0.01 increase in the quarterly dividend declared in the third quarter of 2023 marked the 31st consecutive
year of dividend increases for the Company.
| · | During the first quarter of 2024, the Company declared a quarterly cash
dividend of $0.45 per share on its common stock, up 2.3% from the $0.44 dividend declared in the first quarter of 2023, representing an
annualized yield of 4.0% based upon the $44.45 closing price of the Company’s stock on April 22, 2024. |
| · | As previously announced, in December 2023 the Company’s Board of
Directors (the “Board”) approved a stock repurchase program authorizing the repurchase of up to 2.70 million shares of the
Company’s common stock during a twelve-month period starting January 1, 2024. Such repurchases may be made at the discretion of
the Company’s senior management based 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 regulatory
and legal requirements. There were 750,000 shares repurchased pursuant to the 2024 stock repurchase program in the first quarter of 2024. |
Non-GAAP Measures
The Company also provides supplemental reporting of its results on an “operating”
and “tangible” basis. Results on an “operating” basis exclude the after-tax effects of acquisition expenses, acquisition-related
contingent consideration adjustments, restructuring expenses, litigation accrual, gain on debt extinguishment, loss on sales of investment
securities, unrealized gain (loss) on equity securities and amortization of intangible assets. Results on a “tangible” basis
exclude goodwill and intangible asset balances, net of accumulated amortization and applicable deferred tax amounts. In addition, the
Company provides supplemental reporting for “operating pre-tax, pre-provision net revenues,” which subtracts the provision
for credit losses, acquisition expenses, acquisition-related contingent consideration adjustments, restructuring expenses, litigation
accrual, gain on debt extinguishment, loss on sales of investment securities, unrealized gain (loss) on equity securities and amortization
of intangible assets from income before income taxes. Although these items are non-GAAP measures, the Company’s management believes
this information helps investors and analysts measure underlying core performance and provides better comparability to other organizations
that have not engaged in acquisitions or restructuring activities. The Company also provides supplemental reporting of its net interest
income and net interest margin on a “fully tax-equivalent” basis, which includes an adjustment to net interest income that
represents taxes that would have been paid had nontaxable investment securities and loans been taxable. Although fully tax-equivalent
net interest income and net interest margin are non-GAAP measures, the Company’s management believes this information helps enhance
comparability of the performance of assets that have different tax liabilities. The amounts for such items are presented in the tables
that accompany this release. Operating diluted earnings per share, a non-GAAP measure, was $0.82 in the first quarter of 2024, down from
$0.92 in the first quarter of 2023 and consistent with $0.82 in the fourth quarter of 2023. Operating pre-tax, pre-provision net revenue
per share, a non-GAAP measure, was $1.18 in the first quarter of 2024, down from $1.22 in the first quarter of 2023 and up from $1.13
in the fourth quarter of 2023.
Conference Call Scheduled
Company management will conduct an investor call at 11:00 a.m. (ET)
today, April 23, 2024, to discuss the first quarter 2024 results. The conference call can be accessed at 1-833-630-0464 (1-412-317-1809
if outside the United States and Canada). Investors may also listen live via the Internet at: https://app.webinar.net/OXrxVp7w7PM.
This earnings release, including supporting financial tables, is also
available within the press releases section of the Company's investor relations website at: https://ir.communitybanksystem.com/news-presentations/press-releases/.
An archived webcast of the earnings call will be available on this site for one full year.
About Community Bank System, Inc.
Community Bank System, Inc. is a diversified financial services company that is focused
on four main business lines – banking, employee benefit services, insurance services and wealth management. Its banking subsidiary,
Community Bank, N.A., is among the country’s 100 largest banking institutions with over $15 billion in assets and operates approximately
200 customer facilities across Upstate New York, Northeastern Pennsylvania, Vermont and Western Massachusetts. The Company’s Benefit
Plans Administrative Services, Inc. subsidiary is a leading provider of employee benefits administration, trust services, collective investment
fund administration, and actuarial consulting services to customers on a national scale. The Company’s OneGroup NY, Inc. subsidiary
is a top 75 U.S. insurance agency. The Company also offers comprehensive financial planning, trust administration and wealth management
services through its Community Bank Wealth Management operating unit.
Community Bank System, Inc. is listed on the New York Stock Exchange
and the Company’s stock trades under the symbol CBU. For more information about Community Bank visit www.cbna.com
or https://ir.communitybanksystem.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of CBU’s
management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking
statements. The following factors, among others, could cause the actual results of CBU’s operations to differ materially from its
expectations: the macroeconomic and other challenges and uncertainties related to or resulting from recent bank failures; current and
future economic and market conditions, including the effects on CRE and housing or vehicle prices, unemployment rates, high inflation,
U.S. fiscal debt, budget and tax matters, geopolitical matters, and global economic growth; fiscal and monetary policies of the Federal
Reserve Board; the potential adverse effects of unusual and infrequently occurring events; litigation and actions of regulatory authorities;
management’s estimates and projections of interest rates and interest rate policies; the effect of changes in the level of checking,
savings, or money market account deposit balances and other factors that affect net interest margin; future provisions for credit losses
on loans and debt securities; changes in nonperforming assets; ability to contain costs in inflationary conditions; the effect on financial
market valuations on CBU’s fee income businesses, including its employee benefit services, wealth management services, and insurance
services businesses; the successful integration of operations of its acquisitions and performance of new branches; competition; changes
in legislation or regulatory requirements, including capital requirements; and the timing for receiving regulatory approvals and completing
pending merger and acquisition transactions. For more information about factors that could cause actual results to differ materially
from CBU’s expectations, refer to its annual, periodic and other reports filed with the Securities and Exchange Commission (“SEC”),
including the discussion under the “Risk Factors” section of such reports filed with the SEC and available on CBU’s
website at https://ir.communitybanksystem.com and on the SEC’s website at www.sec.gov.
Further, any forward-looking statement speaks only as of the date on which it is made, and CBU undertakes no obligation to update any
forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence
of unanticipated events.
Summary of Financial Data (unaudited) |
|
|
|
|
|
| (Dollars
in thousands, except per share data) |
|
|
|
|
|
| |
2024 |
2023 |
| |
1st
Qtr |
4th
Qtr |
3rd
Qtr |
2nd
Qtr |
1st
Qtr |
| Earnings |
|
|
|
|
|
| Loan
income |
$127,498 |
$122,392 |
$115,138 |
$107,275 |
$100,362 |
| Investment
income |
25,161 |
23,934 |
22,418 |
24,349 |
25,520 |
| Total
interest income |
152,659 |
146,326 |
137,556 |
131,624 |
125,882 |
| Interest
expense |
45,669 |
37,136 |
29,770 |
22,345 |
14,852 |
| Net
interest income |
106,990 |
109,190 |
107,786 |
109,279 |
111,030 |
| Provision
for credit losses |
6,148 |
4,073 |
2,878 |
752 |
3,500 |
| Net
interest income after provision for credit losses |
100,842 |
105,117 |
104,908 |
108,527 |
107,530 |
| Deposit
service and other banking fees |
17,907 |
18,003 |
17,478 |
17,740 |
16,156 |
| Mortgage
banking |
345 |
196 |
113 |
11 |
275 |
| Employee
benefit services |
31,698 |
30,015 |
29,997 |
28,565 |
29,384 |
| Insurance
services |
11,109 |
11,599 |
12,113 |
11,860 |
11,522 |
| Wealth
management services |
9,210 |
7,904 |
7,934 |
7,858 |
8,245 |
| Loss
on sales of investment securities |
0 |
0 |
0 |
0 |
(52,329) |
| Gain
on debt extinguishment |
0 |
0 |
0 |
0 |
242 |
| Unrealized
gain (loss) on equity securities |
16 |
52 |
(49) |
(50) |
0 |
| Total
noninterest revenues |
70,285 |
67,769 |
67,586 |
65,984 |
13,495 |
| Salaries
and employee benefits |
73,063 |
71,595 |
70,687 |
68,034 |
71,487 |
| Data
processing and communications |
14,348 |
14,685 |
15,480 |
14,291 |
13,129 |
| Occupancy
and equipment |
11,362 |
10,715 |
10,358 |
10,453 |
11,024 |
| Amortization
of intangible assets |
3,576 |
3,563 |
3,576 |
3,705 |
3,667 |
| Legal
and professional fees |
4,341 |
3,792 |
3,826 |
3,102 |
5,201 |
| Business
development and marketing |
3,045 |
3,635 |
4,628 |
4,567 |
2,901 |
| Acquisition-related
contingent consideration adjustments |
0 |
2,200 |
80 |
1,000 |
0 |
| Litigation
accrual |
119 |
5,800 |
0 |
0 |
0 |
| Acquisition
expenses |
35 |
7 |
0 |
(1) |
57 |
| Restructuring
expenses |
0 |
1,163 |
0 |
0 |
0 |
| Other |
8,195 |
11,936 |
7,869 |
7,887 |
6,586 |
| Total
noninterest expenses |
118,084 |
129,091 |
116,504 |
113,038 |
114,052 |
| Income
before income taxes |
53,043 |
43,795 |
55,990 |
61,473 |
6,973 |
| Income
taxes |
12,171 |
10,089 |
11,861 |
13,182 |
1,175 |
| Net
income |
$40,872 |
$33,706 |
$44,129 |
$48,291 |
$5,798 |
| Basic
earnings per share |
$0.77
|
$0.63
|
$0.82
|
$0.90 |
$0.11 |
| Diluted
earnings per share |
$0.76
|
$0.63
|
$0.82
|
$0.89 |
$0.11 |
| Profitability
(GAAP) |
|
|
|
|
|
| Return
on assets (GAAP) |
1.04% |
0.87% |
1.16% |
1.28% |
0.15% |
| Return
on equity (GAAP) |
9.78% |
8.53% |
10.90% |
11.86% |
1.49% |
| Noninterest
revenues/total revenues (GAAP) |
39.6% |
38.3% |
38.5% |
37.6% |
10.8% |
| Efficiency
ratio (GAAP) |
66.6% |
72.9% |
66.4% |
64.5% |
91.6% |
| Profitability
(non-GAAP) |
|
|
|
|
|
| Operating
return on assets (non-GAAP) |
1.11% |
1.13% |
1.23% |
1.38% |
1.31% |
| Operating
return on equity (non-GAAP) |
10.47% |
11.10% |
11.62% |
12.78% |
12.78% |
| Return
on tangible equity (non-GAAP) |
19.94% |
18.75% |
23.34% |
24.89% |
3.26% |
| Operating
return on tangible equity (non-GAAP) |
21.36% |
24.38% |
24.89% |
26.82% |
27.92% |
| Operating
noninterest revenues/operating revenues (FTE) (non-GAAP) |
39.4% |
38.1% |
38.3% |
37.4% |
36.9% |
| Operating
efficiency ratio (non-GAAP) |
64.1% |
65.4% |
64.0% |
61.4% |
62.1% |
| Summary
of Financial Data (unaudited) |
|
|
|
|
|
| (Dollars
in thousands, except per share data) |
|
|
|
|
|
| |
2024 |
2023 |
| |
1st
Qtr |
4th
Qtr |
3rd
Qtr |
2nd
Qtr |
1st
Qtr |
| Components
of Net Interest Margin (FTE) |
|
|
|
|
|
| Loan
yield |
5.25% |
5.08% |
4.92% |
4.75% |
4.59% |
| Cash
equivalents yield |
5.39% |
5.49% |
4.97% |
4.27% |
3.49% |
| Investment
yield |
2.02% |
2.03% |
1.96% |
2.07% |
2.01% |
| Earning
asset yield |
4.24% |
4.11% |
3.94% |
3.82% |
3.63% |
| Interest-bearing
deposit rate |
1.56% |
1.37% |
1.09% |
0.84% |
0.45% |
| Borrowing
rate |
3.81% |
3.12% |
3.34% |
2.60% |
2.78% |
| Cost
of all interest-bearing funds |
1.77% |
1.48% |
1.23% |
0.94% |
0.62% |
| Cost
of total deposits |
1.14% |
0.98% |
0.76% |
0.59% |
0.31% |
| Cost
of funds (includes noninterest-bearing deposits) |
1.31% |
1.08% |
0.88% |
0.67% |
0.44% |
| Net
interest margin |
2.95% |
3.05% |
3.07% |
3.14% |
3.17% |
| Net
interest margin (FTE) (non-GAAP) |
2.98% |
3.07% |
3.10% |
3.18% |
3.20% |
| Fully
tax-equivalent adjustment (non-GAAP) |
$1,014 |
$1,037 |
$1,034 |
$1,080 |
$1,091 |
| Average
Balances |
|
|
|
|
|
| Loans |
$9,788,707 |
$9,583,396 |
$9,303,479 |
$9,072,956 |
$8,884,164 |
| Cash
equivalents |
230,299 |
113,071 |
53,279 |
28,491 |
27,775 |
| Taxable
investment securities |
4,071,256 |
4,032,386 |
4,080,835 |
4,313,875 |
4,760,089 |
| Nontaxable
investment securities |
488,381 |
493,434 |
508,356 |
525,314 |
532,604 |
| Total
interest-earning assets |
14,578,643 |
14,222,287 |
13,945,949 |
13,940,636 |
14,204,632 |
| Total
assets |
15,796,867 |
15,333,131 |
15,123,226 |
15,150,001 |
15,366,863 |
| Interest-bearing
deposits |
9,462,083 |
9,266,908 |
8,961,895 |
9,053,199 |
8,925,555 |
| Borrowings |
936,588 |
665,322 |
619,510 |
523,585 |
717,788 |
| Total
interest-bearing liabilities |
10,398,671 |
9,932,230 |
9,581,405 |
9,576,784 |
9,643,343 |
| Noninterest-bearing
deposits |
3,570,902 |
3,706,781 |
3,810,542 |
3,836,341 |
4,043,494 |
| Shareholders'
equity |
1,681,211 |
1,567,381 |
1,605,798 |
1,632,992 |
1,576,717 |
| Balance
Sheet Data |
|
|
|
|
|
| Cash
and cash equivalents |
$338,381 |
$190,962 |
$455,807 |
$222,779 |
$189,298 |
| Investment
securities |
4,152,114 |
4,165,312 |
3,960,001 |
4,231,899 |
4,630,741 |
| Loans: |
|
|
|
|
|
| Business
lending |
4,220,199 |
4,084,396 |
3,914,935 |
3,833,697 |
3,747,942 |
| Consumer
mortgage |
3,317,467 |
3,285,018 |
3,196,764 |
3,072,090 |
3,019,718 |
| Consumer
indirect |
1,716,028 |
1,703,440 |
1,708,302 |
1,644,811 |
1,605,659 |
| Home
equity |
446,056 |
446,515 |
444,764 |
439,186 |
432,027 |
| Consumer
direct |
183,750 |
185,229 |
185,301 |
180,985 |
176,989 |
| Total
loans |
9,883,500 |
9,704,598 |
9,450,066 |
9,170,769 |
8,982,335 |
| Allowance
for credit losses |
70,091 |
66,669 |
64,945 |
63,284 |
63,170 |
| Goodwill
and intangible assets, net |
904,439 |
897,987 |
901,334 |
901,709 |
900,914 |
| Other
assets |
650,327 |
663,563 |
684,059 |
644,178 |
615,835 |
| Total
assets |
15,858,670 |
15,555,753 |
15,386,322 |
15,108,050 |
15,255,953 |
| Deposits: |
|
|
|
|
|
| Noninterest-bearing |
3,554,686 |
3,638,527 |
3,780,519 |
3,855,085 |
3,949,801 |
| Non-maturity
interest-bearing |
7,835,543 |
7,569,131 |
7,755,916 |
7,740,818 |
8,106,734 |
| Time |
1,961,793 |
1,720,463 |
1,494,353 |
1,275,883 |
1,054,137 |
| Total
deposits |
13,352,022 |
12,928,121 |
13,030,788 |
12,871,786 |
13,110,672 |
| Customer
repurchase agreements |
287,241 |
304,595 |
330,252 |
233,469 |
304,607 |
| Other
borrowings |
395,122 |
460,603 |
316,837 |
251,284 |
75,684 |
| Accrued
interest and other liabilities |
167,330 |
164,497 |
153,506 |
134,105 |
130,977 |
| Total
liabilities |
14,201,715 |
13,857,816 |
13,831,383 |
13,490,644 |
13,621,940 |
| Shareholders'
equity |
1,656,955 |
1,697,937 |
1,554,939 |
1,617,406 |
1,634,013 |
| Total
liabilities and shareholders' equity |
15,858,670 |
15,555,753 |
15,386,322 |
15,108,050 |
15,255,953 |
| |
|
|
|
|
|
| Summary
of Financial Data (unaudited) |
|
|
|
|
|
| (Dollars
in thousands, except per share data) |
|
|
|
|
|
| |
2024 |
2023 |
| |
1st
Qtr |
4th
Qtr |
3rd
Qtr |
2nd
Qtr |
1st
Qtr |
| Capital
and Other |
|
|
|
|
|
| Shareholders’
equity/total assets (GAAP) |
10.45% |
10.92% |
10.11% |
10.71% |
10.71% |
| Tangible
equity/tangible assets (non-GAAP) |
5.32% |
5.75% |
4.81% |
5.34% |
5.41% |
| Tier
1 leverage ratio |
9.01% |
9.34% |
9.44% |
9.35% |
9.06% |
| Loan-to-deposit
ratio |
74.0% |
75.1% |
72.5% |
71.2% |
68.5% |
| Diluted
weighted average common shares outstanding |
53,467 |
53,665 |
53,798 |
54,008 |
54,207 |
| Period
end common shares outstanding |
52,765 |
53,327 |
53,427 |
53,528 |
53,725 |
| Cash
dividends declared per common share |
$0.45
|
$0.45
|
$0.45
|
$0.44
|
$0.44
|
| Book
value (GAAP) |
$31.40
|
$31.84
|
$29.10
|
$30.22
|
$30.41
|
| Tangible
book value (non-GAAP) |
$15.12
|
$15.85
|
$13.07
|
$14.21
|
$14.49
|
| Common
stock price at quarter-end |
$48.03
|
$52.11
|
$42.21
|
$46.88
|
$52.49
|
| Asset
Quality |
|
|
|
|
|
| Nonaccrual
loans |
$44,904 |
$48,687 |
$33,122 |
$29,923 |
$29,745 |
| Accruing
loans 90+ days delinquent |
4,554 |
5,886 |
3,731 |
3,395 |
4,027 |
| Total
nonperforming loans |
49,458 |
54,573 |
36,853 |
33,318 |
33,772 |
| Other
real estate owned (OREO) |
1,742 |
1,159 |
578 |
623 |
508 |
| Total
nonperforming assets |
51,200 |
55,732 |
37,431 |
33,941 |
34,280 |
| Net
charge-offs |
2,840 |
2,337 |
1,249 |
706 |
1,511 |
| Allowance
for credit losses/loans outstanding |
0.71% |
0.69% |
0.69% |
0.69% |
0.70% |
| Nonperforming
loans/loans outstanding |
0.50% |
0.56% |
0.39% |
0.36% |
0.38% |
| Allowance
for credit losses/nonperforming loans |
142% |
122% |
176% |
190% |
187% |
| Net
charge-offs/average loans |
0.12% |
0.10% |
0.05% |
0.03% |
0.07% |
| Delinquent
loans/ending loans |
0.93% |
1.06% |
0.90% |
0.83% |
0.73% |
| Provision
for credit losses/net charge-offs |
216% |
174% |
230% |
106% |
232% |
| Nonperforming
assets/total assets |
0.32% |
0.36% |
0.24% |
0.22% |
0.22% |
| Quarterly
GAAP to Non-GAAP Reconciliations |
|
|
|
|
|
| Operating
pre-tax, pre-provision net revenue (non-GAAP) |
|
|
|
|
|
| Net
income (GAAP) |
$40,872 |
$33,706 |
$44,129 |
$48,291 |
$5,798 |
| Income
taxes |
12,171 |
10,089 |
11,861 |
13,182 |
1,175 |
| Income
before income taxes |
53,043 |
43,795 |
55,990 |
61,473 |
6,973 |
| Provision
for credit losses |
6,148 |
4,073 |
2,878 |
752 |
3,500 |
| Pre-tax,
pre-provision net revenue (non-GAAP) |
59,191 |
47,868 |
58,868 |
62,225 |
10,473 |
| Acquisition
expenses |
35 |
7 |
0 |
(1) |
57 |
| Acquisition-related
contingent consideration adjustments |
0 |
2,200 |
80 |
1,000 |
0 |
| Restructuring
expenses |
0 |
1,163 |
0 |
0 |
0 |
| Litigation
accrual |
119 |
5,800 |
0 |
0 |
0 |
| Loss
on sales of investment securities |
0 |
0 |
0 |
0 |
52,329 |
| Gain
on debt extinguishment |
0 |
0 |
0 |
0 |
(242) |
| Unrealized
(gain) loss on equity securities |
(16) |
(52) |
49 |
50 |
0 |
| Amortization
of intangible assets |
3,576 |
3,563 |
3,576 |
3,705 |
3,667 |
| Operating
pre-tax, pre-provision net revenue (non-GAAP) |
$62,905 |
$60,549 |
$62,573 |
$66,979 |
$66,284 |
| |
|
|
|
|
|
| Summary
of Financial Data (unaudited) |
|
|
|
|
|
| (Dollars
in thousands, except per share data) |
|
|
|
|
|
| |
2024 |
2023 |
| |
1st
Qtr |
4th
Qtr |
3rd
Qtr |
2nd
Qtr |
1st
Qtr |
| Quarterly
GAAP to Non-GAAP Reconciliations |
|
|
|
|
|
| Operating
pre-tax, pre-provision net revenue per share (non-GAAP) |
|
|
|
|
|
| Diluted
earnings per share (GAAP) |
$0.76 |
$0.63 |
$0.82 |
$0.89 |
$0.11 |
| Income
taxes |
0.23 |
0.19 |
0.22 |
0.25 |
0.02 |
| Income
before income taxes |
0.99 |
0.82 |
1.04 |
1.14 |
0.13 |
| Provision
for credit losses |
0.12 |
0.07 |
0.05 |
0.01 |
0.06 |
| Pre-tax,
pre-provision net revenue per share (non-GAAP) |
1.11 |
0.89 |
1.09 |
1.15 |
0.19 |
| Acquisition
expenses |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
| Acquisition-related
contingent consideration adjustments |
0.00 |
0.04 |
0.00 |
0.02 |
0.00 |
| Restructuring
expenses |
0.00 |
0.02 |
0.00 |
0.00 |
0.00 |
| Litigation
accrual |
0.00 |
0.11 |
0.00 |
0.00 |
0.00 |
| Loss
on sales of investment securities |
0.00 |
0.00 |
0.00 |
0.00 |
0.96 |
| Gain
on debt extinguishment |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
| Unrealized
(gain) loss on equity securities |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
| Amortization
of intangible assets |
0.07 |
0.07 |
0.07 |
0.07 |
0.07 |
| Operating
pre-tax, pre-provision net revenue per share (non-GAAP) |
$1.18 |
$1.13 |
$1.16 |
$1.24 |
$1.22 |
| |
|
|
|
|
|
| Operating
net income (non-GAAP) |
|
|
|
|
|
| Net
income (GAAP) |
$40,872
|
$33,706
|
$44,129
|
$48,291
|
$5,798
|
| Acquisition
expenses |
35 |
7 |
0 |
(1) |
57 |
| Tax
effect of acquisition expenses |
(8) |
(1) |
0 |
0 |
(12) |
| Subtotal
(non-GAAP) |
40,899 |
33,712 |
44,129 |
48,290 |
5,843 |
| Acquisition-related
contingent consideration adjustments |
0 |
2,200 |
80 |
1,000 |
0 |
| Tax
effect of acquisition-related contingent consideration adjustments |
0 |
(443) |
(17) |
(214) |
0 |
| Subtotal
(non-GAAP) |
40,899 |
35,469 |
44,192 |
49,076 |
5,843 |
| Restructuring
expenses |
0 |
1,163 |
0 |
0 |
0 |
| Tax
effect of restructuring expenses |
0 |
(234) |
0 |
0 |
0 |
| Subtotal
(non-GAAP) |
40,899 |
36,398 |
44,192 |
49,076 |
5,843 |
| Litigation
accrual |
119 |
5,800 |
0 |
0 |
0 |
| Tax
effect of litigation accrual |
(26) |
(1,168) |
0 |
0 |
0 |
| Subtotal
(non-GAAP) |
40,992 |
41,030 |
44,192 |
49,076 |
5,843 |
| Loss
on sales of investment securities |
0 |
0 |
0 |
0 |
52,329 |
| Tax
effect of loss on sales of investment securities |
0 |
0 |
0 |
0 |
(11,171) |
| Subtotal
(non-GAAP) |
40,992 |
41,030 |
44,192 |
49,076 |
47,001 |
| Gain
on debt extinguishment |
0 |
0 |
0 |
0 |
(242) |
| Tax
effect of gain on debt extinguishment |
0 |
0 |
0 |
0 |
52 |
| Subtotal
(non-GAAP) |
40,992 |
41,030 |
44,192 |
49,076 |
46,811 |
| Unrealized
(gain) loss on equity securities |
(16) |
(52) |
49 |
50 |
0 |
| Tax
effect of unrealized (gain) loss on equity securities |
4 |
10 |
(10) |
(11) |
0 |
| Subtotal
(non-GAAP) |
40,980 |
40,988 |
44,231 |
49,115 |
46,811 |
| Amortization
of intangible assets |
3,576 |
3,563 |
3,576 |
3,705 |
3,667 |
| Tax
effect of amortization of intangible assets |
(787) |
(718) |
(757) |
(793) |
(783) |
| Operating
net income (non-GAAP) |
$43,769 |
$43,833 |
$47,050 |
$52,027 |
$49,695 |
| |
|
|
|
|
|
| Summary
of Financial Data (unaudited) |
|
|
|
|
|
| (Dollars
in thousands, except per share data) |
|
|
|
|
|
| |
2024 |
2023 |
| |
1st
Qtr |
4th
Qtr |
3rd
Qtr |
2nd
Qtr |
1st
Qtr |
| Quarterly
GAAP to Non-GAAP Reconciliations |
|
|
|
|
|
| Operating
diluted earnings per share (non-GAAP) |
|
|
|
|
|
| Diluted
earnings per share (GAAP) |
$0.76
|
$0.63
|
$0.82
|
$0.89
|
$0.11
|
| Acquisition
expenses |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
| Tax
effect of acquisition expenses |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
| Subtotal
(non-GAAP) |
0.76 |
0.63 |
0.82 |
0.89 |
0.11 |
| Acquisition-related
contingent consideration adjustments |
0.00 |
0.04 |
0.00 |
0.02 |
0.00 |
| Tax
effect of acquisition-related contingent consideration adjustments |
0.00 |
(0.01) |
0.00 |
0.00 |
0.00 |
| Subtotal
(non-GAAP) |
0.76 |
0.66 |
0.82 |
0.91 |
0.11 |
| Restructuring
expenses |
0.00 |
0.02 |
0.00 |
0.00 |
0.00 |
| Tax
effect of restructuring expenses |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
| Subtotal
(non-GAAP) |
0.76 |
0.68 |
0.82 |
0.91 |
0.11 |
| Litigation
accrual |
0.00 |
0.11 |
0.00 |
0.00 |
0.00 |
| Tax
effect of litigation accrual |
0.00 |
(0.03) |
0.00 |
0.00 |
0.00 |
| Subtotal
(non-GAAP) |
0.76 |
0.76 |
0.82 |
0.91 |
0.11 |
| Loss
on sales of investment securities |
0.00 |
0.00 |
0.00 |
0.00 |
0.96 |
| Tax
effect of loss on sales of investment securities |
0.00 |
0.00 |
0.00 |
0.00 |
(0.21) |
| Subtotal
(non-GAAP) |
0.76 |
0.76 |
0.82 |
0.91 |
0.86 |
| Gain
on debt extinguishment |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
| Tax
effect of gain on debt extinguishment |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
| Subtotal
(non-GAAP) |
0.76 |
0.76 |
0.82 |
0.91 |
0.86 |
| Unrealized
(gain) loss on equity securities |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
| Tax
effect of unrealized (gain) loss on equity securities |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
| Subtotal
(non-GAAP) |
0.76 |
0.76 |
0.82 |
0.91 |
0.86 |
| Amortization
of intangible assets |
0.07 |
0.07 |
0.07 |
0.07 |
0.07 |
| Tax
effect of amortization of intangible assets |
(0.01) |
(0.01) |
(0.02) |
(0.02) |
(0.01) |
| Operating
diluted earnings per share (non-GAAP) |
$0.82 |
$0.82 |
$0.87 |
$0.96 |
$0.92 |
| |
|
|
|
|
|
| Return
on assets |
|
|
|
|
|
| Net
income (GAAP) |
$40,872 |
$33,706
|
$44,129
|
$48,291
|
$5,798
|
| Average
total assets |
15,796,867 |
15,333,131 |
15,123,226 |
15,150,001 |
15,366,863 |
| Return
on assets (GAAP) |
1.04% |
0.87% |
1.16% |
1.28% |
0.15% |
| |
|
|
|
|
|
| Operating
return on assets (non-GAAP) |
|
|
|
|
|
| Operating
net income (non-GAAP) |
$43,769 |
$43,833 |
$47,050 |
$52,027
|
$49,695
|
| Average
total assets |
15,796,867 |
15,333,131 |
15,123,226 |
15,150,001 |
15,366,863 |
| Operating
return on assets (non-GAAP) |
1.11% |
1.13% |
1.23% |
1.38% |
1.31% |
| |
|
|
|
|
|
| Return
on equity |
|
|
|
|
|
| Net
income (GAAP) |
$40,872
|
$33,706
|
$44,129
|
$48,291
|
$5,798
|
| Average
total equity |
1,681,211 |
1,567,381 |
1,605,798 |
1,632,992 |
1,576,717 |
| Return
on equity (GAAP) |
9.78% |
8.53% |
10.90% |
11.86% |
1.49% |
| |
|
|
|
|
|
| Operating
return on equity (non-GAAP) |
|
|
|
|
|
| Operating
net income (non-GAAP) |
$43,769 |
$43,833 |
$47,050 |
$52,027
|
$49,695
|
| Average
total equity |
1,681,211 |
1,567,381 |
1,605,798 |
1,632,992 |
1,576,717 |
| Operating
return on equity (non-GAAP) |
10.47% |
11.10% |
11.62% |
12.78% |
12.78% |
| |
|
|
|
|
|
| |
|
|
|
|
|
| Summary
of Financial Data (unaudited) |
|
|
|
|
|
| (Dollars
in thousands, except per share data) |
|
|
|
|
|
| |
2024 |
2023 |
| |
1st
Qtr |
4th
Qtr |
3rd
Qtr |
2nd
Qtr |
1st
Qtr |
| Quarterly
GAAP to Non-GAAP Reconciliations |
|
|
|
|
|
| Net
interest margin |
|
|
|
|
|
| Net
interest income |
$106,990 |
$109,190 |
$107,786 |
$109,279 |
$111,030 |
| Total
average interest-earning assets |
14,578,643 |
14,222,287 |
13,945,949 |
13,940,636 |
14,204,632 |
| Net
interest margin |
2.95% |
3.05% |
3.07% |
3.14% |
3.17% |
| |
|
|
|
|
|
| Net
interest margin (FTE) (non-GAAP) |
|
|
|
|
|
| Net
interest income |
$106,990 |
$109,190 |
$107,786 |
$109,279 |
$111,030 |
| Fully
tax-equivalent adjustment (non-GAAP) |
1,014 |
1,037 |
1,034 |
1,080 |
1,091 |
| Fully
tax-equivalent net interest income (non-GAAP) |
108,004 |
110,227 |
108,820 |
110,359 |
112,121 |
| Total
average interest-earning assets |
14,578,643 |
14,222,287 |
13,945,949 |
13,940,636 |
14,204,632 |
| Net
interest margin (FTE) (non-GAAP) |
2.98% |
3.07% |
3.10% |
3.18% |
3.20% |
| |
|
|
|
|
|
| Operating
noninterest revenues (non-GAAP) |
|
|
|
|
|
| Noninterest
revenues (GAAP) |
$70,285 |
$67,769 |
$67,586 |
$65,984 |
$13,495 |
| Loss
on sales of investment securities |
0 |
0 |
0 |
0 |
52,329 |
| Gain
on debt extinguishment |
0 |
0 |
0 |
0 |
(242) |
| Unrealized
(gain) loss on equity securities |
(16) |
(52) |
49 |
50 |
0 |
| Total
operating noninterest revenues (non-GAAP) |
$70,269 |
$67,717 |
$67,635 |
$66,034 |
$65,582 |
| |
|
|
|
|
|
| Operating
noninterest expenses (non-GAAP) |
|
|
|
|
|
| Noninterest
expenses (GAAP) |
$118,084 |
$129,091 |
$116,504 |
$113,038 |
$114,052 |
| Acquisition
expenses |
(35) |
(7) |
0 |
1 |
(57) |
| Acquisition-related
contingent consideration adjustments |
0
|
(2,200)
|
(80)
|
(1,000)
|
0
|
| Restructuring
expenses |
0 |
(1,163) |
0 |
0 |
0 |
| Litigation
accrual |
(119) |
(5,800) |
0 |
0 |
0 |
| Amortization
of intangible assets |
(3,576) |
(3,563) |
(3,576) |
(3,705) |
(3,667) |
| Total
operating noninterest expenses (non-GAAP) |
$114,354 |
$116,358 |
$112,848 |
$108,334 |
$110,328 |
| |
|
|
|
|
|
| Operating
revenues (non-GAAP) |
|
|
|
|
|
| Net
interest income (GAAP) |
$106,990 |
$109,190 |
$107,786 |
$109,279 |
$111,030 |
| Noninterest
revenues (GAAP) |
70,285 |
67,769 |
67,586 |
65,984 |
13,495 |
| Total
revenues (GAAP) |
177,275 |
176,959 |
175,372 |
175,263 |
124,525 |
| Loss
on sales of investment securities |
0 |
0 |
0 |
0 |
52,329 |
| Gain
on debt extinguishment |
0 |
0 |
0 |
0 |
(242) |
| Unrealized
(gain) loss on equity securities |
(16) |
(52) |
49 |
50 |
0 |
| Total
operating revenues (non-GAAP) |
$177,259 |
$176,907 |
$175,421 |
$175,313 |
$176,612 |
| |
|
|
|
|
|
| Noninterest
revenues/total revenues |
|
|
|
|
|
| Total
noninterest revenues (GAAP) – numerator |
$70,285 |
$67,769 |
$67,586 |
$65,984 |
$13,495 |
| Total
revenues (GAAP) – denominator |
177,275 |
176,959 |
175,372 |
175,263 |
124,525 |
| Noninterest
revenues/total revenues (GAAP) |
39.6% |
38.3% |
38.5% |
37.6% |
10.8% |
| |
|
|
|
|
|
| Operating
noninterest revenues/operating revenues (FTE) (non-GAAP) |
|
|
|
|
|
| Total
operating noninterest revenues (non-GAAP) – numerator |
$70,269 |
$67,717 |
$67,635 |
$66,034 |
$65,582 |
| Total
operating revenues (non-GAAP) |
177,259 |
176,907 |
175,421 |
175,313 |
176,612 |
| Fully
tax-equivalent adjustment (non-GAAP) |
1,014 |
1,037 |
1,034 |
1,080 |
1,091 |
| Total
operating revenues (FTE) (non-GAAP) – denominator |
178,273 |
177,944 |
176,455 |
176,393 |
177,703 |
| Operating
noninterest revenues/operating revenues (FTE) (non-GAAP) |
39.4% |
38.1% |
38.3% |
37.4% |
36.9% |
| |
|
|
|
|
|
|
|
|
|
|
|
| Summary
of Financial Data (unaudited) |
|
|
|
|
|
| (Dollars
in thousands, except per share data) |
|
|
|
|
|
| |
2024 |
2023 |
| |
1st
Qtr |
4th
Qtr |
3rd
Qtr |
2nd
Qtr |
1st
Qtr |
| Quarterly
GAAP to Non-GAAP Reconciliations |
|
|
|
|
|
| Efficiency
ratio (GAAP) |
|
|
|
|
|
| Total
noninterest expenses (GAAP) – numerator |
$118,084 |
$129,091 |
$116,504 |
$113,038 |
$114,052 |
| Total
revenues (GAAP) – denominator |
177,275 |
176,959 |
175,372 |
175,263 |
124,525 |
| Efficiency
ratio (GAAP) |
66.6% |
72.9% |
66.4% |
64.5% |
91.6% |
| |
|
|
|
|
|
| Operating
efficiency ratio (non-GAAP) |
|
|
|
|
|
| Total
operating noninterest expenses (non-GAAP) - numerator |
$114,354 |
$116,358 |
$112,848 |
$108,334 |
$110,328 |
| Total
operating revenues (FTE) (non-GAAP) - denominator |
178,273 |
177,944 |
176,455 |
176,393 |
177,703 |
| Operating
efficiency ratio (non-GAAP) |
64.1% |
65.4% |
64.0% |
61.4% |
62.1% |
| |
|
|
|
|
|
| Total
tangible assets (non-GAAP) |
|
|
|
|
|
| Total
assets (GAAP) |
$15,858,670 |
$15,555,753 |
$15,386,322 |
$15,108,050 |
$15,255,953 |
| Goodwill
and intangible assets, net |
(904,439) |
(897,987) |
(901,334) |
(901,709) |
(900,914) |
| Deferred
taxes on goodwill and intangible assets, net |
45,433 |
45,198 |
44,593 |
45,003 |
45,369 |
| Total
tangible assets (non-GAAP) |
$14,999,664 |
$14,702,964 |
$14,529,581 |
$14,251,344 |
$14,400,408 |
| |
|
|
|
|
|
| Total
tangible common equity (non-GAAP) |
|
|
|
|
|
| Shareholders'
equity (GAAP) |
$1,656,955 |
$1,697,937 |
$1,554,939 |
$1,617,406 |
$1,634,013 |
| Goodwill
and intangible assets, net |
(904,439) |
(897,987) |
(901,334) |
(901,709) |
(900,914) |
| Deferred
taxes on goodwill and intangible assets, net |
45,433 |
45,198 |
44,593 |
45,003 |
45,369 |
| Total
tangible common equity (non-GAAP) |
$797,949 |
$845,148 |
$698,198 |
$760,700 |
$778,468 |
| |
|
|
|
|
|
| Shareholders’
equity-to-assets ratio at quarter end |
|
|
|
|
|
| Total
shareholders’ equity (GAAP) – numerator |
$1,656,955 |
$1,697,937 |
$1,554,939 |
$1,617,406 |
$1,634,013 |
| Total
assets (GAAP) – denominator |
15,858,670 |
15,555,753 |
15,386,322 |
15,108,050 |
15,255,953 |
| Shareholders’
equity-to-assets ratio at quarter end (GAAP) |
10.45% |
10.92% |
10.11% |
10.71% |
10.71% |
| |
|
|
|
|
|
| Tangible
equity-to-tangible assets ratio at quarter end (non-GAAP) |
|
|
|
|
|
| Total
tangible common equity (non-GAAP) - numerator |
$797,949 |
$845,148 |
$698,198 |
$760,700 |
$778,468 |
| Total
tangible assets (non-GAAP) - denominator |
14,999,664 |
14,702,964 |
14,529,581 |
14,251,344 |
14,400,408 |
| Tangible
equity-to-tangible assets ratio at quarter end (non-GAAP) |
5.32% |
5.75% |
4.81% |
5.34% |
5.41% |
| |
|
|
|
|
|
| Return
on tangible equity (non-GAAP) |
|
|
|
|
|
| Net
income (GAAP) |
$40,872
|
$33,706
|
$44,129
|
$48,291
|
$5,798
|
| Average
shareholders’ equity |
1,681,211 |
1,567,381 |
1,605,798 |
1,632,992 |
1,576,717 |
| Average
goodwill and intangible assets, net |
(902,215) |
(899,027) |
(900,562) |
(900,038) |
(900,616) |
| Average
deferred taxes on goodwill and intangible assets, net |
45,315 |
44,896 |
44,798 |
45,186 |
45,750 |
| Average
tangible common equity (non-GAAP) |
824,311 |
713,250 |
750,034 |
778,140 |
721,851 |
| Return
on tangible equity (non-GAAP) |
19.94% |
18.75% |
23.34% |
24.89% |
3.26% |
| |
|
|
|
|
|
| Operating
return on tangible equity (non-GAAP) |
|
|
|
|
|
| Operating
net income (non-GAAP) |
$43,769 |
$43,833 |
$47,050 |
$52,027 |
$49,695 |
| Average
tangible common equity (non-GAAP) |
824,311 |
713,250 |
750,034 |
778,140 |
721,851 |
| Operating
return on tangible equity (non-GAAP) |
21.36% |
24.38% |
24.89% |
26.82% |
27.92% |
| |
|
|
|
|
|
| |
|
|
|
|
|
| Summary
of Financial Data (unaudited) |
|
|
|
|
|
| (Dollars
in thousands, except per share data) |
|
|
|
|
|
| |
2024 |
2023 |
| |
1st
Qtr |
4th
Qtr |
3rd
Qtr |
2nd
Qtr |
1st
Qtr |
| Quarterly
GAAP to Non-GAAP Reconciliations |
|
|
|
|
|
| Book
value (GAAP) |
|
|
|
|
|
| Total
shareholders’ equity (GAAP) – numerator |
$1,656,955 |
$1,697,937 |
$1,554,939 |
$1,617,406 |
$1,634,013 |
| Period
end common shares outstanding – denominator |
52,765 |
53,327 |
53,427 |
53,528 |
53,725 |
| Book
value (GAAP) |
$31.40
|
$31.84
|
$29.10
|
$30.22
|
$30.41
|
| |
|
|
|
|
|
| Tangible
book value (non-GAAP) |
|
|
|
|
|
| Total
tangible common equity (non-GAAP) – numerator |
$797,949 |
$845,148 |
$698,198 |
$760,700 |
$778,468 |
| Period
end common shares outstanding – denominator |
52,765 |
53,327 |
53,427 |
53,528 |
53,725 |
| Tangible
book value (non-GAAP) |
$15.12
|
$15.85
|
$13.07
|
$14.21
|
$14.49
|
| |
|
|
|
|
|
| |
|
|
|
|
|
# # #
