Below is transcript of the Community Bank System, Inc. (NYSE:CBU)’s Fourth Quarter and Year End 2014 Earnings Conference Call, held on January 22, 2015, at 11:00 a.m. EST. Forward Management, Pdt Partners and Tudor Investment Corp was among Community Bank System, Inc. (NYSE:CBU) shareholders at the end of the third quarter.
Community Bank System, Inc. (NYSE:CBU) is a single bank holding company. The Company with its wholly own subsidiaries includes Community Bank, N.A. (CBNA), Benefit Plans Administrative Services, Inc., CFSI Closeout Corp., First of Jermyn Realty Company, Inc. and Town & Country Agency LLC. The Company operates in three segments: banking, employee benefit services and wealth management services.
Company Representatives:
Mark Tryniski – President & Chief Executive Officer
Scott Kingsley – Executive Vice President & Chief Financial Officer.
Analysts:
Alexander Twerdahl – Sandler O’Neill
Collyn Gilbert – KBW
Matthew Breese – Sterne Agee.
Operator
Please stand by, we’re about to begin. Welcome to the Community Bank System Fourth Quarter and Year End 2014 Earnings Conference Call. Please note that this presentation contains forward-looking statements within the provisions of the Private Securities Litigation Reform Act of 1995 that are based on current expectations, estimates and projections about the industry, markets and economic environment, in which the Company operates. Such statements involve risks and uncertainties that could cause actual results to differ materially from the results discussed in these statements. These risks are detailed in the Company’s Annual Report and form 10-K filed with the Securities and Exchange Commission. Today’s call presenters are Mark Tryniski, President and Chief Executive Officer; and Scott Kingsley, Executive Vice President and Chief Financial Officer. Gentlemen, you may begin.
Mark Tryniski – President & Chief Executive Officer
Thank you, Jennifer. Good morning and thank you all for joining our fourth quarter and year end conference call. The quarter was a good one and above as we expected with EPS of 6% over 2013. Margin was holding in, positive but modest loan growth with particular strength in business lending and 6% growth in core non-interest income.
Overall was a good and steady and clean quarter. With respect to full year 2014 it was the most productive year in the company’s history including record earnings per share which were up 9% over 2013, loan growth across all portfolios were $140 million, expect their home equity which was down slightly.
Core deposit growth of over a $190 million, 7% growth in banking fee income, revenue growth of 12% from our benefits administration and wealth management businesses with pretax earnings up 36%. Lower credit costs, improvement in our operating expense efficiency from 59.3% to 57.9%. Both in the tier 1 capital ratio from 9.29% to 9.96% and we increased the dividend for the 22nd consecutive year.
Looking ahead to 2015 we have very good operating momentum much of which is a result of the progress in growth initiatives in the past two years. We also have right now the best balance sheet we’ve ever had in terms of asset mix, funding, credit quality and capital. Our capital accumulation over the past several years has been considerable which creates particularly favorable opportunity. We are tremendously well positioned as we enter 2015 and we’ll be disciplined and work hard to deploy capital to continue to grow earnings and grow dividends for the benefit of our shareholders. Scott.
