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

Oct 21, 2019 • 11:00 am ET

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

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Q & A
Executive
Mark E. Tryniski

going forward.

Analyst
Erik Zwick

Understood. That's fine. And then, just want to make sure I heard the comments clear, with the 30% targeted cost savings, that does not currently incorporate any targeted branch closures that you may revisit that at a later time. Did I hear that correctly?

Executive
Mark E. Tryniski

That's right.

Analyst
Erik Zwick

Okay. And then just looking at there, net interest margin, it looks like it's been pretty stable over the past year or so. Given the outlook for potentially a couple more Fed cuts and for the yield curve to stay flat, would you expect any major changes to their margin between now and the targeted deal closing? And I guess the heart of my question, just kind of zero in on the pro forma impact to that pro forma margin of the company?

Executive
Joseph E. Sutaris

Yeah. Erik, I think it would be -- it's going to be similar to the same headwinds that we're facing in the industry spacing. In other words, my expectations would not be that the margin will head north and go up, but potentially would drift down a little bit with the FOMC cuts, but nothing really out of alignment with the industry in general.

Analyst
Erik Zwick

Okay. And then maybe just kind of one detailed follow-up on that. It looks like they've got about 20% of their deposits in jumbo time and just given your strong loan to deposit ratios, opportunity to let some of those run off and help you withstand the headwinds that we've just discussed?

Executive
Joseph E. Sutaris

Yeah. I mean, there are some jumbo CDs that are priced at market and I think as those come up for renewal, we'll have to evaluate the overall relationship and profitability with each of those situations. But historically, we have not paid through the market for deposit funding. I would expect that we're going to maintain our discipline around that going forward. So expectations are that jumbo book is probably not going to grow and may drift down a little bit over future quarters.

Analyst
Erik Zwick

Great. Thanks for taking my questions.

Executive
Joseph E. Sutaris

Thanks, Erik.

Operator
Operator

Gentlemen, there are no further questions at this time. I'd like to hand it back over to you for closing, please.

Executive
Mark E. Tryniski

Very good. Thank you all again for joining our call and we will talk to you again in January. Thank you.

Operator
Operator

[Operator Closing Remarks]