Community Bank System (CBU) Tops Q2 EPS by 15c

Community Bank System (NYSE: CBU) reported Q2 EPS of $0.76, $0.15 better than the analyst estimate of $0.61.

Second Quarter 2020 Highlights:

• Completed the acquisition of Steuben Trust Corporation
• GAAP EPS of $0.66; Operating EPS (non-GAAP) of $0.76, down $0.04 from the second quarter of 2019
• Adjusted Pre-Tax, Pre-Provision Net Revenue per share (non-GAAP) up $0.05 over the second quarter of 2019 and up $0.03 over the linked first quarter of 2020
• Return on assets of 1.12%; Return on assets – adjusted (non-GAAP) of 1.34%
• Deposit funding costs of 0.17%, down 8 basis points from 0.25% in the first quarter of 2020
• Annualized net charge-offs of 0.05%
• Noninterest revenues represent 36.6% of operating revenues

“In spite of the immense challenges posed by the COVID-19 pandemic and related market conditions, the Company’s second quarter was very productive,” said Mark Tryniski, President and CEO. “During the quarter, the Company successfully completed the acquisition of Steuben, funded approximately $500 million of Paycheck Protection Program (“PPP”) loans, processed over 5,000 borrower forbearance requests, reopened the majority of its branch offices to the public, implemented several phases of the Company’s return to work plan, enhanced its mobile banking platform and produced solid earnings. Although GAAP earnings per share were down $0.20, as compared to the same quarter in the prior year, operating earnings per share which excludes acquisition-related expenses and acquisition-related provision for credit losses due to the Steuben merger only decreased $0.04 over the same period in spite of the pandemic’s impact on market conditions, credit loss expectations and the Company’s operations. In addition, the Company booked $6.6 million in non-acquisition related provision for credit losses in the second quarter of 2020 due largely to COVID-related expected losses as compared to $1.4 million recorded during the second quarter of 2019. The Company’s adjusted pre-tax, pre-provision net revenue per share was up $0.05, or 4.9%, over the second quarter of 2019 and up $0.03, or 2.9%, on a linked quarter basis.”

Mr. Tryniski added, “As we continue to navigate the COVID-19 crisis, we believe our Company remains well-prepared to withstand its impacts. The Company continues to maintain very high levels of capital and liquidity, diversified revenue streams through its nonbanking businesses, a strong credit record and an experienced management team. Furthermore, I am very proud of the diligent efforts and steadfast commitment our employees have put forth this past quarter to maintain the Company’s operational continuity, provide high levels of customer service across all business lines and close and integrate Steuben, while producing solid operating results during very difficult times. I also would like to acknowledge the considerable effort put forth by the former Steuben employees to successfully integrate the two companies and welcome the former Steuben customers and shareholders to Community Bank. We remain concerned about the health and welfare of our employees, customers, shareholders and communities, and will continue to support all of our stakeholders throughout this crisis in a thoughtful, disciplined and compassionate manner.”

For earnings history and earnings-related data on Community Bank System (CBU) click here.

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