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Dec 31, 2022
Community Bank Q4 2022 Earnings Report
Reported strong results driven by an increase in net interest income and a decrease in fully-diluted average shares outstanding, offset by higher operating expenses, lower noninterest revenues, and increases in the provision for credit losses and income taxes.
Key Takeaways
Community Bank System, Inc. reported a strong fourth quarter in 2022, with GAAP earnings per share up by 21.3% over the prior year's quarter. The company's performance was driven by improvements in net interest income, supported by strong loan growth. Total revenues increased by 10.2% compared to the previous year's fourth quarter.
GAAP earnings per share increased by 21.3% compared to the prior year's fourth quarter.
Operating earnings per share (non-GAAP) increased by 18.5% over the prior year's fourth quarter.
Adjusted pre-tax, pre-provision net revenue per share (non-GAAP) increased by 18.3% over the prior year.
Total revenues were meaningfully higher due to continued improvements in net interest income driven by strong loan growth.
Community Bank
Community Bank
Forward Guidance
The Company anticipates receiving approximately $600 million in investment securities principal cash flows during 2023, which are expected to be used to pay down overnight borrowings or redeployed into new loans.
Positive Outlook
- Regulatory capital levels remain strong.
- The commercial loan pipeline remains healthy.
- There continues to be an ample amount of new business opportunities for our financial services businesses.
- Strong earnings performance
- Diversified streams of revenue
Challenges Ahead
- Continued weakening of the economic forecast.
- Average total deposits decreased $154.4 million, or 1.2%, consistent with industry expectations.
- Shareholders’ equity of $1.55 billion at December 31, 2022 was $549.1 million, or 26.1%, lower than one year ago.
- The Company recorded a provision for credit losses of $2.8 million in the fourth quarter due to strong loan growth and continued weakening of the economic forecast.
- Higher funding costs impacted net interest margin.