Community Bank System, Inc. (NYSE:CBU) Q3 2023 Earnings Call Transcript

Chris O’Connell : Got it. And just on the cash build-up, liquidity build this quarter, with locking in the borrowings here, is that something that you expect to kind of right-size itself fairly rapidly next quarter back towards the levels that you’ve been in the past few quarters or do you think some of that will stick around and kind of come in over time or just stay flat depending on how long growth shakes out?

Joseph Sutaris : Yeah. So Chris, I think we finished the quarter with a little over $200 million in cash equivalents. We do have a bit of a seasonal pattern in Q3 and Q4 in tax collection. My expectation is that typically, I’ll say into Q1 less so, but into Q2, we start to see some of that drift down a bit. But right now, we expect that those kind of cash equivalents could carry some of the loan growth into Q4 and then we’ll have to reassess in Q1. But our expectation on a longer term basis is that as we continue to lean into loans and grow loans, and if deposit growth does not keep pace with that over the next couple of years, we’re going to continue to probably lever up on some term funding until we get rich to our securities cash flows in ‘26 and ‘27.

Chris O’Connell : Great. And then just last touch up one for me. Can you just remind us as to, I believe there’s some seasonality in the insurance business into the fourth quarter where it comes down a bit. Can you just remind us of the typical magnitude there?

Joseph Sutaris : Yeah. It does vary a bit, Chris. But typically the renewal periods are January 1st and July 1st, so that usually results in a little higher run rate in Q1 and Q3. That’s just typical insurance renewal period. So typically, we drift down a little bit in Q2 and Q4. And I’m not sure I can peg an exact number, but it could be down a $1 million or $2 million in a quarter, and then back up in the subsequent quarter. But the longer term run rate, which I think Dimitar indicated is about $45 million right now. And the markets are hard for insurance premiums, and that translates into higher commission levels. So our expectations around just kind of the – perhaps in any sort of acquisitions, is that the organic growth rate on commissions is – we have a pretty solid outlook on that into 2024.

Chris O’Connell : Great. I appreciate you taking the follow-ups. Thank you.

Operator: And this concludes our question-and-answer session as well as this conference. Thank you very much for attending today’s presentation. You may now disconnect.