Community Bank System, Inc. (CBU)’s Fourth Quarter and Year End 2014 Earnings Conference Call Transcript

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The difference gap today is in 2004, you still had a meaningful part of our population in time deposit instruments. That piece has gone away, so we are always a little bit conservative we think or a little bit hesitant to look at what’s going to happen to deposits in accounts like money market accounts. We just have never had this kind of proportional outcome in our existing deposit portfolio to know exactly what that frustrated CB customer is going to do at what rate change will they actually make some kind of a duration commitment.

So we’ve modeled it off at 2004 to 2006 where our variation was some thing like 11% to 30% of the Fed funds rate change during that period of time, I would say that this cycle probably takes longer Matt, if you asked me to prognosticate that today and I think we like our position in being sort of the last guys to the table because of our loans deposit ratio right now.

Matthew Breese – Sterne Agee
Very helpful. My last question around M&A, a bit more of the deal activity this year versus last. You guys did not participate in that and I just wanted to maybe get some thoughts around that and is that an indication of how you feel about bank valuations and take-out valuations?

Scott Kingsley – Executive Vice President & Chief Financial Officer
No, I think you are right, the deal activity was up in 2014 and I think it’s assumed that it’s going to be even higher than that in 2015 and we have seen some cutting off to a good start based on recent activities. I think we continue to look for those high value M&A opportunities that are accretive to our franchise and we continue to be active, we continue to be engaged, we continue to have looks at opportunities across our footprint and beyond and it’s a function in our minds being disciplined and in terms of pricing and in terms of the quality of the franchises and the opportunity for our shareholders.

And so we did look at a number of things, had a number of opportunities in 2014 that didn’t play out and I would hope and expect that we’ll get the same opportunities or more in 2015, but we’ll continue to be active and engaged and we’ll also continue to be disciplined in how we view those opportunities and the threshold for creating transaction that will be additive to a long term and sustainable shareholder value.

Matthew Breese – Sterne Agee
Appreciate it. Thank you.

Mark Tryniski – President & Chief Executive Officer
Thank you, Matt.

Scott Kingsley – Executive Vice President & Chief Financial Officer
Thanks Matt.

Operator
No further questions at this time.

Mark Tryniski – President & Chief Executive Officer
Very good. Thank you all, we will talk again at the end of the next quarter. Thank you.

Operator
Thank you. That does conclude today’s call. We do thank you all for your participation.

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