Community Bank System, Inc. (CBU) SEC Filing 10-Q Quarterly Report for the period ending Friday, March 31, 2023

Exhibit 99.1

	News Release For further information, please contact:
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 2023 Results

SYRACUSE, N.Y. — April 25, 2023 — Community Bank System, Inc. (the “Company”) (NYSE: CBU) reported first quarter 2023 net income of $5.8 million, or $0.11 per fully-diluted share. This compares to $47.1 million of net income, or $0.86 per fully-diluted share for the first quarter of 2022. The $0.75 decrease in earnings per share was primarily due to the impact of the previously announced strategic balance sheet repositioning executed during the quarter to provide the Company with greater flexibility in managing balance sheet growth and deposit funding. During the quarter, the Company sold certain available-for-sale investments securities and used the proceeds to pay down overnight borrowings with rising and comparatively high variable interest rates. As a result, a $52.3 million pre-tax realized loss on the investment security sales was recognized during the quarter which negatively impacted GAAP earnings per share by $0.75. In addition, increases in the provision for credit losses and operating expenses were offset by increases in net interest income and noninterest revenues, lower income taxes and a decrease in fully-diluted shares outstanding. Comparatively, the Company recorded $0.97 in fully-diluted earnings per share for the linked fourth quarter of 2022. The Company’s deposit base and liquidity position continues to be strong, as the Company maintained total immediately available liquidity sources at the end of the quarter of $4.69 billion, over double its estimated uninsured deposits, net of collateralized deposits, which represent less than 20% of first quarter ending total deposits. Additionally, total ending deposits increased $98.4 million, or 0.8%, from December 31, 2022.

Operating earnings per share, a non-GAAP measure, which excludes acquisition expenses, acquisition-related contingent consideration adjustments, loss on sales of investment securities, unrealized loss (gain) on equity securities and gain on debt extinguishment, net of tax, was $0.86 for the first quarter of 2023, as compared to $0.87 for the first quarter of 2022 and $0.96 for the fourth quarter of 2022. The $0.01 decrease in operating earnings per share on a year over year basis was driven by a decrease in banking-related noninterest revenues, an increase in the provision for credit losses and higher operating expenses, partially offset by increases in net interest income and financial services business revenues, and decreases in income taxes and fully-diluted shares outstanding. The $0.10 decrease in operating earnings per share from the fourth quarter of 2022 was driven by various factors, including a decrease in net interest income, an increase in the provision for credit losses, lower deposit service and other banking fees and higher operating expenses, offset, in part, by an increase in financial services business revenues and lower income taxes.

First quarter 2023 adjusted pre-tax, pre-provision net revenue per share, a non-GAAP measure, which excludes income taxes, the provision for credit losses, acquisition expenses, acquisition-related contingent consideration adjustments, loss on sales of investment securities, gain on debt extinguishment and unrealized loss (gain) on equity securities from net income, of $1.16 was up $0.04 as compared to the first quarter of 2022 and down $0.13 as compared to the fourth quarter of 2022.

First Quarter 2023 Performance Highlights: