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

Collyn Gilbert – KBW
Ok. Ok, that’s helpful and then just back to the securities discussion. The yield increase in the quarter and I know its been in probably kind of range what it was you purchased, but just trying to understand you know is your objective to try to maintain that yield or how should we think about that securities yield now obviously with what the dip in rates have done here as we look into the first quarter?

Scott Kingsley – Executive Vice President & Chief Financial Officer
It’s a good question Collyn. I think its always our aspiration to maintain what we think is an above peer yield and so we’re still very comfortable with what we have in our portfolio, our only purchases in the portfolio in the fourth quarter were some small amounts of municipal securities to replace expiring cash flows, they came on at lower yield than what expired for sure. And that handful of assets in mortgage backed securities which are primarily CRA based outcomes for us.

So, I think if you look at where the rates for today Collyn and we were left with only knowing where the rate structure is on January 22nd, we would say that we’re not buying a lot of stuff as durations that are beyond five years, because the risk reward still doesn’t appear to be there today. Since we are a short term overnight borrower to the tune of about $300 million in night right now, you know we can have the patience and the diligence to path on replacing those until a better point than a market actually implies.

Collyn Gilbert – KBW
Ok, that’s helpful. And then just my final question, just on your just general outlook for fee income, I mean you guys have done such a great a job in building out the benefits business and a lot of those areas of your business. How are you thinking about the growth rates there as we again look forward to this year?

Mark Tryniski – President & Chief Executive Officer
I think we will continue to invest in our benefits administration business, we will continue to invest in our wealth management business, we expect continued strong growth going forward in both of those businesses. On the banking side its going to be a challenge, I mean you are starting to see and have seen through the last couple of years a moderation of the overdraft line which has been offset by an increase in the interchange line. So, in terms of opportunities to significantly grow the non-banking fee income line that’s going to be a much greater challenge, but we think overall in 2015 we will continue to grow non-interest income.

Collyn Gilbert – KBW
Ok, that’s great. Just one question on the pickup in net charge-off for the quarter, what was driving that?