Community Bank System, Inc. (CBU) SEC Filing 10-Q Quarterly Report for the period ending Wednesday, March 31, 2021

Exhibit 99.1

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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 Reports

First Quarter 2021 Results

SYRACUSE, N.Y. — April 26, 2021 — Community Bank System, Inc. (NYSE: CBU) reported first quarter 2021 net income of $52.9 million, or $0.97 per fully-diluted share. This compares to $40.1 million of net income, or $0.76 per share for the first quarter of 2020. The $0.21, or 27.6%, increase in earnings per share was primarily attributable to an increase in net interest income, a significant decrease in the provision for credit losses and lower operating expenses, offset in part by a decrease in noninterest revenues, and increases in income taxes and fully-diluted shares outstanding. Comparatively, the Company recorded $0.86 in fully-diluted earnings per share for the linked fourth quarter of 2020. Operating earnings per share, which excludes acquisition expenses and gain on debt extinguishment, were $0.97 for the first quarter of 2021, as compared to $0.77 in the first quarter of 2020 and $0.85 in the fourth quarter of 2020.

First Quarter 2021 Performance Highlights:

“The Company generated solid quarterly earnings results in the first quarter of 2021 driven by improving economic conditions, lower credit-related costs, higher revenues and lower operating expenses,” said Mark E. Tryniski, President & CEO. “Our 2020 results were challenged by net interest margin headwinds and higher credit-related costs. As we move into 2021, we are encouraged by an improving interest rate environment and better economic conditions. The Company’s financial services businesses continued to perform well during the quarter as the Company recorded higher revenues in all three lines of business - employee benefit services, insurance services and wealth management versus one year earlier. Furthermore, the Company’s cost containment initiatives and other factors, resulted in a decrease in operating expenses as compared to the same quarter in 2020 despite acquiring Steuben Trust Corporation (“Steuben”) in the second quarter of 2020. The Company’s earnings per share of $0.97 were up $0.21, or 27.6%, over the first quarter of 2020. Net interest income increased $3.9 million, or 4.3%, over the first quarter of 2020 despite a 62 basis point decrease in net interest margin, driven by continued growth in earning assets, lower funding costs and recognition of Paycheck Protection Program (“PPP”) deferred loan fees. In addition, the Company booked a $5.7 million net benefit in the provision for credit losses during the first quarter of 2021, as compared to a $5.6 million provision for credit losses in the first quarter of 2020, primarily reflective of improvements in the economic outlook. Financial services business revenues were also $2.3 million, or 5.7%, higher than the first quarter of 2020, while total operating expenses decreased $0.4 million, or 0.4%. These improvements were offset, in part, by a $2.5 million, or 13.7%, decrease in banking-related noninterest revenues, a $2.8 million, or 30.4%, increase in income taxes and a 3.4% increase in fully-diluted average shares outstanding. On the credit front, the Company continued to experience low-levels of net charge-offs. More specifically, the Company recorded net charge-offs of $0.4 million, or 0.02% annualized during the first quarter of 2021, which compares favorably to the first quarter 2020 net charge-offs of $1.6 million, or 0.09% annualized.”