Community Bank System Inc.
04/23/2024 | Press release | Distributed by Public on 04/23/2024 08:00
Community Bank System, Inc. Reports First Quarter 2024 Results - Form 8-K
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.
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News Release For further information, please contact: |
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| 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
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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. |
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"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
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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) o1.04% | 1.11% ·Return on Equity | Operating Return on Equity (non-GAAP) o9.78% | 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) o39.6% | 39.4% |
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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 o2.95%, 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) o2.98%, 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 |
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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 o1.14% | 1.31% |
| Risk Metrics |
·Annualized Loan Net Charge-Offs o0.12% ·Tier 1 Leverage Ratio o9.01% ·Loan-to-deposit ratio o74.0% ·Non-owner occupied and multifamily commercial real estate ("CRE") / total bank-level regulatory capital o201% |
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. |
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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. |
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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. |
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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.
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Summary of Financial Data (unaudited) |
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| (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 |
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