Community Bank System, which operates 33 branches and a money manager in Western New York, said fourth-quarter profits soared 69 percent, as revenues rose while both loan losses and expenses dropped.
The DeWitt-based company, which has 150 branches in New York and Pennsylvania, reported net income of $15.9 million, or 47 cents per share, up from $9.4 million, or 28 cents per share, a year ago.
Those results included $1.1 million in merger expenses and special charges in the recent quarter tied to its pending acquisition of the Wilber Corp. Results from a year ago included a $3.1 million writedown in "goodwill" and a $1.4 million charge for the termination of the company's core banking system services contract.
Without those factors, profits rose 22.3 percent to $17 million, or 49 cents per share, from $13.9 million, or 38 cents per share, a year ago.
Full-year profits soared 53 percent to $63.3 million, or $1.89 per share, from $41.4 million, or $1.26 per share, in 2009.
"In an operating environment that continues to challenge many, we grew both net interest income and non-interest income, improved our net interest margin and generated organic core deposit growth," said president and CEO Mark Tryniski.
"The cost-improvement programs developed and implemented in late 2009 contributed significantly to our improved operating expense results throughout the year."
Total revenues for the fourth quarter rose 5 percent to $67.9 million, driven by an increase in net interest income from taking deposits and making loans. That rose 7.4 percent to $46.1 million because of a 1.4 percent rise in average earning assets and a wider profit margin.
The company reinvested some extra cash during the year and paid less interest on deposits. But average loans fell from the third quarter because of lower commercial line of credit use and the sale of low-rate mortgages on the secondary market.
Meanwhile, the bank set aside $1.9 million for loan losses, down by $655,000 or 25 percent from the last quarter of 2009, as asset quality improved and loan balances fell. That provision was just short of covering actual losses of $2 million during the quarter, up from $1.8 million a year ago. Bad debts still on the books ticked up slightly.
Fees were nearly flat, at $21.8 million, up slightly from $21.7 million, as higher mortgage banking revenues were offset by less use of fee-based deposit services. Revenues from employee benefits and consulting, and wealth management, were flat.
Total operating expenses fell 5.9 percent to $43 million, not including the special charges and merger expenses, as the bank benefited from cost-cutting.
The bank agreed in late October to pay $102 million in cash and stock to buy the Wilber Corp., parent of Wilber National Bank in Oneonta, adding 22 branches and $750 million in deposits in the eastern part of upstate New York. The deal is expected to close in April, and add to earnings per share this year.
The bank's board declared a cash dividend of 24 cents per share, payable April 10 to shareholders of record on March 15.