Community Financial System, Inc. · NYSE:CBU
Community Financial System — Community Bank System — Q4 2020 Earnings Presentation
21 slides from Community Financial System's earnings presentation, Jan 25, 2021
Slide 1: Q4 2020 Earnings Release Supplemental Information
0 Q4 2020 EARNINGS RELEASE SUPPLEMENTAL INFORMATION
Slide 2: Forward-looking statements
1 This presentation contains forward - looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of CBU’s management and are subject to significant risks and uncertainties. Actual results may diff
Slide 3: Company Response to COVID-19
2 Q4 2020: Phase 5 (Prevent) Reinstituted “work from home” emphasis Drive - up & appointment only branch operations PPP forgiveness & round 2 preparation Q3 2020: Phase 4 (Monitor) Begin PPP forgiveness process Monitoring of health data and financial exposure Monitor COVID impacted borrowers June 20
Slide 4: Strong Capital Position
3 $479 $607 $876 $1,198 $1,855 $2,104 7.77% 8.23% 9.29% 10.55% 10.80% 10.16% 5.28% 6.14% 7.68% 9.24% 10.01% 9.92% 0% 2% 4% 6% 8% 10% 12% 14% $0 $500 $1,000 $1,500 $2,000 2007 2010 2013 2016 2019 2020 $ in Millions Shareholders' Equity Tier I Ratio Tangible Equity/Tangible Assets STRONG CAPITAL POSIT
Slide 5: Strong Liquidity Position & Sources
4 Liquidity Sources December 31, 2020 $ in Thousands Cash and Cash Equivalents (net of float) $1,565,832 FHLB Borrowing Capacity $1,655,098 FRB Borrowing Availability $256,212 Investments 1 US Gov’t & Agency $2,501,382 MBS & CMO $566,216 Municipals $455,439 Corporates $4,635 Less: Pledged Securities
Slide 6: Solid Earnings Trend
5 $55.4 $55.4 $57.3 $59.4 $55.6 $1.06 $1.05 $1.08 $1.10 $1.03 $1.00 $1.02 $1.04 $1.06 $1.08 $1.10 $1.12 $1.14 $48 $50 $52 $54 $56 $58 $60 $62 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 PTPP EPS PTPP Net Revenue, $ in Millions Adjusted pre-tax, pre-provision net revenue Adjusted PTPP EPS SOLID EARNINGS
Slide 7: CECL Adoption & COVID Related Reserve
6 CECL 1 ADOPTION & COVID RELATED RESERVE (unaudited) • In January 2020, the Company adopted ASU No. 2016 - 13, Financial Instruments – Credit Losses, also known as Current Expected Credit Losses (“CECL ”). • Upon the adoption of CECL on January 1, 2020, the Company’s allowance for credit losses inc
Slide 8: Transaction and Digital User Trends
7 TRANSACTION AND DIGITAL USER TRENDS (unaudited) Due to the COVID - 19 pandemic, there has been a shift in the transaction channels from branch to digital . 3,500 4,000 4,500 5,000 5,500 6,000 6,500 7,000 400 500 600 700 800 900 1,000 1,100 Jan '19 Feb '19 Mar '19 Apr '19 May '19 June '19 July '19
Slide 9: COVID-19 Loan Deferral Update
8 9/30/2020 12/31/2020 Net Reduction in Deferrals Portfolio # of Loans Deferrals % of 9/30/20 Portfolio # of Loans Deferrals % of 12/31/20 Portfolio Business Lending 156 $189.2 5.5% 63 $65.7 1.9% $123.5 Consumer Mortgage & Home Equity 42 $3.2 0.1% 9 $0.8 0.0% $2.4 Consumer Installment 18 $0.3 0.0% 2
Slide 10: Paycheck Protection Program (PPP)
9 • 3,417 Paycheck Protection Program (“PPP”) loans, representing $471 million in customer balances, were outstanding on December 31, 2020 • Loan forgiveness customer portal opened in late September 2020 • Total PPP loan balance decreased $36.5 million compared to the third quarter of 2020 • At Dece
Slide 11: COVID-Related Industry Exposure
10 COVID - 19 Related Industry Exposure Sorted by Total Exposure excluding PPP Loans; $ in Millions December 31, 2020 NAICS code based loan data “Exposure” includes both the outstanding and available portions of the loan commitment (1) Retail excludes Furniture Stores and Grocery Stores but includes
Slide 12: Retail Portfolio
11 Non - Owner Occupied CRE 32% New & Used Car Dealers 18% Auto Parts & Accessories 8% RV, Boat & Other Recreational 5% Building Materials & Garden Supplies 14% Gasoline & Service Stations 6% Miscellaneous Retail 6% Health & Personal Care Stores 4% All Other Retail 7% Motor Vehicles & Parts Dealer 3
Slide 13: Lodging Portfolio
12 Franchised 75% Unfranchised 14% Rooming & Boarding Houses 11% Hotels & Motels 89% • The lodging portfolio contains 193 loans representing a total exposure of $266.9 million • Average outstanding balance of $1.3 million and an average exposure of $1.4 million • 13 total loan relationships with a c
Slide 14: Manufacturing Portfolio
13 Lumber, Wood & Paper Products , 32% Plastics, Stone & Metal Products , 27% Machinery & Equipment , 17% Food & Food Products , 14% All Other Manufacturing , 10% • The manufacturing portfolio contains 645 loans representing a total exposure of $237.8 million • Average outstanding balance of $235 th
Slide 15: Construction Portfolio
14 Highway, Street, and Bridge Construction 19% Site Preparation Contractors 15% Nonresidential Building Construction 15% Building Equipment Contractors 14% Foundation, Structure, and Building Exterior Contractors 12% Residential Building Construction 12% Utility System Construction 5% Other Constru
Slide 16: Healthcare Portfolio
15 Continuing Care, Retirement and Assisted Living Facilities 21% Offices of Physicians 15% Hospitals 12% Individual and Family Services 10% Developmental Disability, Mental Health & Substance Abuse Facilities 8% Offices of Dentists 7% Offices of Other Health Practitioners 6% Child Day Care Services
Slide 17: Non-GAAP financial measures
16 Community Bank System's management uses the term "non - GAAP" financial measures in their analysis of the company's performance and operations. Management believes that these non - GAAP financial measures provide a greater understanding of ongoing operations and enhance comparability of results.
Slide 18: Operating earnings per share reconciliation
17 Dollars in thousands, except per share data 2020 Years Ended Dec. 31 ($000s) Q4 YTD 2019 2018 2017 2016 2015 Diluted Earnings per Share (GAAP) $0.86 $3.08 $3.23 $3.24 $3.03 $2.32 $2.19 Operating Diluted Earning s per Share (non - GAAP) $0.85 $3.24 $3.29 $3.23 $2.64 $2.35 $2.31 Net income (GAAP) $
Slide 19: Tangible assets and equity reconciliation
18 Dollars in thousands, except per share data 2020 2019 2016 2013 2010 2007 Total assets Total assets (GAAP) $ 13,931,094 $11,410,295 $8,666,437 $7,095,864 $5,444,506 $4,697,502 Intangible assets ( 846,648) (836,923) (480,844) (390,499) (311,714) (256,216) Deferred taxes on intangible assets 44,370
Slide 20: Pre-tax, pre-provision net revenue reconciliation
19 Dollars and shares in thousands, except per share data YTD 2020 YTD 2019 Q4 2020 Q3 2020 Q2 2020 Q1 2020 Q4 2019 Pre - tax, pre - provision net revenue Net income (GAAP) $164,676 $169,063 $46,485 $42,809 $35,248 $40,134 $42,884 Income taxes 41,400 40,275 12,247 10,904 8,964 9,285 8,853 Income bef
Slide 21: Investor Relations Contact
Investor Relations Contact Mr. Joseph E. Sutaris EVP & Chief Financial Officer Joseph.Sutaris@cbna.com (315) 445 - 7396
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