Community Bank System Inc. (NYSE:CBU) Q3 2019 Earnings Conference Call - Final Transcript

Oct 21, 2019 • 11:00 am ET

Previous

Community Bank System Inc. (NYSE:CBU) Q3 2019 Earnings Conference Call - Final Transcript

Share
Close

Loading Event

Loading Transcript

Q & A
Operator
Operator

[Operator Instructions] Our first question will come from the line of Alex Twerdahl of Sandler O'Neill. Please go ahead.

Analyst
Alex Twerdahl

Hey, good morning, guys.

Executive
Mark E. Tryniski

Good morning, Alex.

Executive
Joseph E. Sutaris

Good morning, Alex.

Analyst
Alex Twerdahl

Yes. First off, congrats on landing another acquisition. Just curious how long does it take you guys to do the due diligence process on a bank the size of Steuben kind of from start to deal announcement?

Executive
Mark E. Tryniski

I would say, Alex, it depends on the institution and how readily they can gather materials up. In this case, they were very efficient and so the due diligence period was fairly nominal, but they can certainly extend for greater periods of time depending on the capacity of the counterparty to provide information.

Analyst
Alex Twerdahl

Okay. Just trying to figure out the cadence of these deals is going to be in the future years. Talking about sort of specific organic trends, had some loan growth for the first time or some better loan growth, I should say, the best in a number of quarters, this quarter. I know this helped a little bit by seasonality in the municipal business, but it was growth more a function of the lack of pay-offs that you've been seeing in past quarters; I think the pipeline kind of translate into some better growth this quarter than what we've been seeing or is it a contribution Kinderhook or is there something else that we should be thinking about up there?

Executive
Mark E. Tryniski

Yeah. I think, Alex, in the third quarter, we had pretty good performance from Vermont. We had good performance in the Capital District, Albany. And also the Southern region of New York was very good. So Syracuse, Rochester, Western New York, Finger Lakes was also very good. If you look at it year-over-year, PA has been very good, and likewise, kind of the southern and western parts of New York and the Capital District again [Phonetic] has been very good year-over-year. So it really depends and it can kind of change quarter to quarter.

With respect to early pay-offs, I think we did get fewer this quarter, which was good. I think just the number and the size was a little bit less this quarter, which was good. So I think we -- if you look over the last several years, we have substantially improved our organic generation capabilities and some of that is a function of -- as we've gotten a little bit larger, we've got greater expertise in certain elements of credit. We've the capacity by virtue of our credit discipline and our ability to kind of understand larger credits to do, slightly larger credits and manage effectively larger relationships and syndication kind of deals with others. So I think all of those things have been played into that, but we clearly have improved our organic loan generation ability over the last couple of years.

Analyst
Alex Twerdahl

Okay. And the pipeline going into the fourth quarter and early 2020, is still healthy?

Executive
Mark E. Tryniski

It's still really good, yeah. So we would expect to