Community Bank System Inc. (CBU, Financial) filed Quarterly Report for the period ended 2010-06-30.
Community Bank System Inc. has a market cap of $832.5 million; its shares were traded at around $25.13 with a P/E ratio of 15 and P/S ratio of 2.5. The dividend yield of Community Bank System Inc. stocks is 3.8%.
As shown in Table 1, net income for the second quarter and June YTD of $16.2 million and $30.2 million, respectively, increased 77% and 54% versus the comparable periods of 2009. Earnings per share for the second quarter of $0.48 were $0.20 higher than the EPS generated in the second quarter of 2009, and earnings per share of $0.90 for the first six months of 2010 increased $0.30 from the amount earned in the first half of 2009.
As reflected in Table 1, second quarter net interest income of $45.9 million was up $5.4 million, or 13%, from the comparable prior year period and net interest income for the first six months of 2010 increased $8.5 million or 11% over the first half of 2009. The current quarter s provision for loan losses increased slightly as compared to the second quarter of 2009 and was $1.0 million lower than the first six months of 2009, reflective of lower levels of net charge-offs and generally stable asset quality. Second quarter noninterest income was $22.4 million, up $1.7 million or 8.4% from the second quarter of 2009, while year-to-date noninterest income of $44.1 million increased $3.1 million or 7.5% from the prior year level, despite a $1.9 million decline in mortgage-banking related revenue, reflective of the record secondary market activities experienced by the Company in the first half of 2009. Contributing to the increase was higher deposit service fees and growth in the company s employee benefits consulting and plan administration business and wealth management revenues as a result of both new client and services generation and improving market conditions as compared to the first half of 2009. Operating expenses of $44.2 million for the quarter and $88.4 million for the first six months of 2010 declined $3.3 million, or 6.9%, and $3.5 million, or 3.8%, respectively, from the comparable prior year periods, which included a $2.5 million FDIC special assessment, due to effective cost management programs across the Company.
As shown in Table 2a, net interest income (with nontaxable income converted to a fully tax-equivalent basis) for the second quarter of 2010 was $49.8 million, a $5.4 million increase from the same period last year. A $95.4 million increase in second quarter interest-earning assets combined with a 37-basis point increase in net interest margin versus the prior year had a greater impact than the $47.9 million increase in average interest-bearing liabilities. As reflected in Table 3, the volume increase from interest-bearing assets and the rate decrease on interest-bearing liabilities had a $6.3 million favorable impact on net interest income, while the volume increase from interest bearing liabilities and rate decrease on interest bearing assets had a $0.9 million unfavorable impact on net interest income. The lower cost of funding had a greater favorable impact on net interest margin than the lower yields on interest-bearing assets. June YTD net interest income of $89.2 million increased $8.5 million or 10.6% from the year earlier period. A $125.8 million increase in interest bearing assets and a 24-basis point increase in net interest margin more than offset a $70.5 million increase in interest-bearing liabilities. The increase in interest-earning assets and the lower rate on interest bearing liabilities had a $14.2 million favorable impact that was partially offset by a $6.0 million unfavorable impact from the decrease in rate on interest-bearing assets and the increase in interest-bearing liability balances.
Average investments for the second quarter and YTD periods were $377.1 million and $283.6 million higher than the respective periods of 2009, while overnight invested cash equivalents for the second quarter and YTD periods declined $250.7 million and $110.3 million from the respective prior year periods, reflective of deployment during the first quarter of 2010 of a portion of the company s excess liquidity into intermediate term U.S. Treasury securities. Second quarter and June year-to-date average loan balances declined $31.0 million and $47.5 million, respectively, as compared to the comparable periods of 2009, primarily from continued principal amortization in the Company s consumer mortgage and home equity portfolios, combined with its decision to sell the majority of its longer-term, lower rate mortgage originations over the last year, as well as declines in the consumer installment portfolio as a result of lower consumer demand characteristics in response to weaker economic conditions. The business lending average balances were down slightly from prior year levels. In comparison to the prior year, total average interest-bearing deposits were up $69.2 million or 2.2% for the quarter, reflective of organic growth in core deposits partially offset by a reduction in time deposits. Quarterly average borrowings declined $21.3 million or 2.5% as compared to the second quarter of 2009 and reflect the maturity of $25 million of term borrowings in the second quarter.
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Community Bank System Inc. has a market cap of $832.5 million; its shares were traded at around $25.13 with a P/E ratio of 15 and P/S ratio of 2.5. The dividend yield of Community Bank System Inc. stocks is 3.8%.
Highlight of Business Operations:
Second quarter and June year-to-date 2010 net income of $16.2 million and $30.2 million, respectively, was $7.0 million or 77% and $10.5 million or 54% higher than the respective prior year periods. Earnings per share were $0.48 and $0.90 for the first three and six months of 2010, respectively, an increase of $0.20 and $0.30 from the equivalent prior year periods. The increase was due to higher revenue from both increased net interest income, as a result of earning asset growth and higher net interest margin, and non-interest income. Also contributing to higher net income was a lower year-to-date provision for loan losses and lower expenses as a result of cost management initiatives begun in late 2009. These were partially offset by a higher effective income tax rate due to a higher proportional level of fully taxable income.As shown in Table 1, net income for the second quarter and June YTD of $16.2 million and $30.2 million, respectively, increased 77% and 54% versus the comparable periods of 2009. Earnings per share for the second quarter of $0.48 were $0.20 higher than the EPS generated in the second quarter of 2009, and earnings per share of $0.90 for the first six months of 2010 increased $0.30 from the amount earned in the first half of 2009.
As reflected in Table 1, second quarter net interest income of $45.9 million was up $5.4 million, or 13%, from the comparable prior year period and net interest income for the first six months of 2010 increased $8.5 million or 11% over the first half of 2009. The current quarter s provision for loan losses increased slightly as compared to the second quarter of 2009 and was $1.0 million lower than the first six months of 2009, reflective of lower levels of net charge-offs and generally stable asset quality. Second quarter noninterest income was $22.4 million, up $1.7 million or 8.4% from the second quarter of 2009, while year-to-date noninterest income of $44.1 million increased $3.1 million or 7.5% from the prior year level, despite a $1.9 million decline in mortgage-banking related revenue, reflective of the record secondary market activities experienced by the Company in the first half of 2009. Contributing to the increase was higher deposit service fees and growth in the company s employee benefits consulting and plan administration business and wealth management revenues as a result of both new client and services generation and improving market conditions as compared to the first half of 2009. Operating expenses of $44.2 million for the quarter and $88.4 million for the first six months of 2010 declined $3.3 million, or 6.9%, and $3.5 million, or 3.8%, respectively, from the comparable prior year periods, which included a $2.5 million FDIC special assessment, due to effective cost management programs across the Company.
As shown in Table 2a, net interest income (with nontaxable income converted to a fully tax-equivalent basis) for the second quarter of 2010 was $49.8 million, a $5.4 million increase from the same period last year. A $95.4 million increase in second quarter interest-earning assets combined with a 37-basis point increase in net interest margin versus the prior year had a greater impact than the $47.9 million increase in average interest-bearing liabilities. As reflected in Table 3, the volume increase from interest-bearing assets and the rate decrease on interest-bearing liabilities had a $6.3 million favorable impact on net interest income, while the volume increase from interest bearing liabilities and rate decrease on interest bearing assets had a $0.9 million unfavorable impact on net interest income. The lower cost of funding had a greater favorable impact on net interest margin than the lower yields on interest-bearing assets. June YTD net interest income of $89.2 million increased $8.5 million or 10.6% from the year earlier period. A $125.8 million increase in interest bearing assets and a 24-basis point increase in net interest margin more than offset a $70.5 million increase in interest-bearing liabilities. The increase in interest-earning assets and the lower rate on interest bearing liabilities had a $14.2 million favorable impact that was partially offset by a $6.0 million unfavorable impact from the decrease in rate on interest-bearing assets and the increase in interest-bearing liability balances.
Average investments for the second quarter and YTD periods were $377.1 million and $283.6 million higher than the respective periods of 2009, while overnight invested cash equivalents for the second quarter and YTD periods declined $250.7 million and $110.3 million from the respective prior year periods, reflective of deployment during the first quarter of 2010 of a portion of the company s excess liquidity into intermediate term U.S. Treasury securities. Second quarter and June year-to-date average loan balances declined $31.0 million and $47.5 million, respectively, as compared to the comparable periods of 2009, primarily from continued principal amortization in the Company s consumer mortgage and home equity portfolios, combined with its decision to sell the majority of its longer-term, lower rate mortgage originations over the last year, as well as declines in the consumer installment portfolio as a result of lower consumer demand characteristics in response to weaker economic conditions. The business lending average balances were down slightly from prior year levels. In comparison to the prior year, total average interest-bearing deposits were up $69.2 million or 2.2% for the quarter, reflective of organic growth in core deposits partially offset by a reduction in time deposits. Quarterly average borrowings declined $21.3 million or 2.5% as compared to the second quarter of 2009 and reflect the maturity of $25 million of term borrowings in the second quarter.
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