Article from Nasdaq
(RTTNews.com) - Community Bank System, Inc. (CBU) Sunday reported a higher fourth-quarter profit reflecting increase in average earning assets, principally driven by the Wilber acquisition. However, both earnings and revenues came in below Street estimates. The company said it intends to commence an underwritten public offering of $50 million of its common stock.
For the fourth quarter, Community Bank System's net income rose 19.5 percent to $19.0 million or $0.51 per share from $15.9 million or $0.47 per share in the year-ago quarter.
On average, 7 analysts polled by Thomson Reuters expected earnings of $0.53 per share for the quarter.
Revenue for the fourth quarter grew 14.3 percent to $77.5 million from $67.9 million in the year-ago quarter. Three Street analysts expected revenues of $77.8 million for the quarter.
The company attributed the growth to an 18.3 percent increase in average earning assets, principally driven by the Wilber National Bank acquisition in early April and organic deposit growth.
Average earning assets for the fourth quarter were $891.3 million higher than last year.
Net interest income for the quarter rose to $55.1 million from $46.1 million last year. Net interest margin, on a Fully Tax Equivalent basis dropped one basis point to 4.06 percent.
Cost of funds declined 24 basis points in comparison to the same quarter last year, but offset by a 25-basis point decline in earning-asset yields, driven primarily by lower yields on investment securities and a $129 million increase in the company's holdings of low-rate, cash equivalents. Average interest-earning cash balances were $234 million for the fourth quarter, well above the $105 million average balance held in the year-ago quarter.
Non-interest income for the quarter rose 2.8 percent to $22.4 million from $21.8 million last year.
Provision for loan losses for the quarter decreased to $1.6 million from $1.9 million last year.
Total operating expenses were $47.8 million for the quarter, 8.4 percent higher than the year-ago quarter, primarily reflective of the additional operating costs associated with the Wilber acquisition.
For the full year, Community Bank System's net income rose 15.5 percent to $73.1 million or $2.01 per share from $63.3 million or $1.89 per share for fiscal year 2010.
Full-year revenue increased 10.4 percent to $298.6 million.
Average earning assets for the fourth quarter of $5.77 billion were $891.3 million above the fourth quarter of 2010, and $31.4 million higher than the third quarter of 2011.
Nonperforming loans as a percentage of total loans at December 31, 2011 were 0.85 percent, up from 0.61 percent a year ago, with the increase in the latest quarter being attributable to two large commercial relationships, one acquired, moving to non-accrual status.
President and Chief Executive Officer Mark Tryniski, said," With continued strong revenue growth, excellent asset quality metrics and our focus on expense management, we are well positioned to continue our performance into 2012."
The DeWitt, New York-headquartered company announced on January 20 that it had entered into purchase and assumption agreements to acquire 19 branch-banking centers across its core Upstate New York markets through its wholly-owned subsidiary, Community Bank, N.A. The transaction is expected to close during the third quarter of 2012, subject to regulatory review and approval.
The proposed underwritten public offering of $50 million of its common stock, is in part to provide additional capital to Community Bank.
On January 18, the company's Board of Directors approved a quarterly dividend on its common stock of $0.26 per share, payable on April 10 to shareholders of record as of March 15, 2012. The two cent increase in the cash dividend over the same quarter of last year, represents an annualized yield of 3.7 percent based on the company's closing price of $28.35 on January 20, 2012.
In extended trade on January 20, CBU gained $0.35 or 1.23%, to settle at $28.70. Over the past year, the stock traded in a range of $21.67 - $28.91.
For comments and feedback: contact editorial@rttnews.com
http://www.rttnews.com