Community Bank System, Inc. (CBU) 10-K Annual Report February 2016

	News Release For further information, please contact:
5790 Widewaters Parkway, DeWitt, N.Y. 13214	Scott A. Kingsley, EVP & Chief Financial Officer Office: (315) 445-3121

Community Bank System Reports

Fourth Quarter and Full Year 2015 Results

	- Completed the acquisition of Oneida Financial Corp.
	- Dividend increased for the 23rd consecutive year
	- Full year organic loan growth of 4%
	- Full year operating EPS improves to $2.30 per share

SYRACUSE, N.Y. — January 20, 2016 — Community Bank System, Inc. (NYSE: CBU) reported fourth quarter 2015 net income of $20.1 million, compared with $23.1 million earned in the fourth quarter of 2014. Diluted earnings per share totaled $0.47 for the fourth quarter of 2015, nine cents per share lower than the $0.56 per share reported in the fourth quarter of 2014, and included $5.7 million of acquisition expenses, or nine cents per share. Full year 2015 net income of $91.2 million, or $2.19 per share, was 1.4% below 2014's earnings per share of $2.22, and included $7.0 million of acquisition expenses, or $0.11 per share, while 2014’s full year results included $0.1 million of acquisition expenses and a $2.8 million litigation settlement charge, or $0.05 per share. Operating earnings per share, which adds back the tax-effected impact of acquisition expenses and the litigation settlement charge, was $2.30 in 2015 and was 1.8% or $0.04 per share, above 2014’s operating earnings of $2.26 per share.

“Our record annual operating results were driven by productive earning-asset growth, a continuation of excellent credit quality, and disciplined expense management,” said President and Chief Executive Officer Mark E. Tryniski. “After a very slow start to our lending activity in the first quarter of 2015, we were able to generate solid volume growth in each of the last three quarters, resulting in full-year organic loan growth of four percent. We completed the acquisition of Oneida Financial Corp. in early December 2015, which further extends and strengthens our Central New York service area by expanding our market presence in the Syracuse and Utica-Rome metropolitan areas. This transaction also adds to our product and service offerings in insurance, benefits administration, and wealth management, while combining two organizations with similar cultures and the same history of exceptional service to our customers and our communities.”

Total revenue for the fourth quarter of 2015 was $98.1 million, an increase of $6.5 million, or 7.0%, over the prior year quarter, and included the activities of Oneida Financial Corp. (“Oneida Financial” or “Oneida”) after December 4, 2015. The higher revenue was generated as a result of a 9.2% increase in average earning assets and growth in noninterest income from acquired and organic sources, which more than offset a 19 basis-point reduction in net interest margin from the prior year quarter. Fourth quarter net interest income was $65.0 million, an increase of $3.2 million, or 5.2%, compared to the fourth quarter of 2014. Modestly lower funding costs were offset by a 20-basis point decline in earning asset yields, the result of lower interest rates on investment securities. Average loan balances grew $235.9 million, or 5.6%, and average loan yields remained stable at 4.43% year-over-year, resulting in a $2.4 million increase in quarterly loan interest income. Investment income was $1.0 million higher than the fourth quarter of 2014, as average investment securities (including cash equivalents) increased by $378.0 million, more than offsetting the yield decline of 44 basis points, principally the result of the decision to pre-invest and retain the net liquidity provided by the Oneida Financial transaction earlier in 2015. Wealth management and insurance services increased $2.5 million, or 57.2%, compared to fourth quarter of 2014, principally from the Oneida Financial acquisition. Fourth quarter revenues from employee benefit services increased $0.7 million, or 6.6% year-over-year, capping off another record annual performance. Revenues from mortgage banking and other services were in-line with the fourth quarter of 2014, and were $1.0 million lower than the third quarter’s results which included the Company’s annual dividend from certain pooled retail insurance programs of $0.7 million, or just over one cent per share. Quarterly deposit service fees increased 0.8% year-over-year, principally from the Oneida acquisition, as slightly higher core card-related revenues were more than offset by the continuing trend of lower fees from account overdraft protection programs.

Fourth quarter 2015 operating expenses of $65.0 million increased $8.3 million versus the fourth quarter of 2014, and included $5.7 million of acquisition expenses, as well as the core operating expenses of the Oneida transaction since December 4, 2015.

The following information was filed by Community Bank System, Inc. (CBU) on Thursday, January 21, 2016 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Financial Statements, Disclosures and Schedules

Inside this 10-K Annual Report

Material Contracts, Statements, Certifications & more

Community Bank System, Inc. provided additional information to their SEC Filing as exhibits

Exhibit 21.1: Subsidaries Of The Registrant

Exhibit 23.1: Consents Of Experts And Counsel

Exhibit 31.1: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 31.2: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 32.1: Section 1350 Certification

Exhibit 32.2: Section 1350 Certification

Ticker: CBU
CIK: 723188
Form Type: 10-K Annual Report
Accession Number: 0000723188-16-000073
Submitted to the SEC: Mon Feb 29 2016 1:51:38 PM EST
Accepted by the SEC: Mon Feb 29 2016
Period: Thursday, December 31, 2015
Industry: National Commercial Banks

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Community Bank System, Inc. (CBU) SEC Filing 10-K Annual report for the fiscal year ending Thursday, December 31, 2015

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