COMMUNITY BANK SYSTEM, INC.
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||
(Exact name of registrant as specified in its charter)
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Delaware
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001-13695
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16-1213679
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(I.R.S. Employer Identification No.)
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5790 Widewaters Parkway, DeWitt, New York
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13214-1883
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(Address of principal executive offices)
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(Zip Code)
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Check the appropriate box below if the form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:
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o
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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o
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Soliciting material pursuant to rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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o
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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o
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Date: January 23, 2013
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/s/ Mark Tryniski
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Mark E. Tryniski, President, Chief Executive Officer and Director
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Date: January 23, 2013
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/s/ Scott Kingsley
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Scott Kingsley, Executive Vice President and Chief Financial Officer
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Exhibit 99
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News Release
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COMMUNITY BANK SYSTEM, INC. | |
5790 Widewaters Parkway, DeWitt, N.Y. 13214 | For further information, please contact: |
Scott A. Kingsley,
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EVP & Chief Financial Officer
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Office: (315) 445-3121
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Community Bank System Reports Solid | ||
Fourth Quarter and Full Year Operating Results | ||
- Increased cash dividend for the 20th consecutive year | ||
- Organic loan growth of 7% in 2012 | ||
- Acquisition of 19 Upstate NY branches completed during the third quarter |
Summary of Financial Data
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||||
(Dollars in thousands, expect per share data)
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||||
Quarter Ended
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Year Ended
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|||
December 31,
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December 31,
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|||
Earnings
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2012
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2011
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2012
|
2011
|
Loan income
|
$49,405
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$50,511
|
$192,710
|
$192,981
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Investment income
|
22,545
|
19,903
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88,690
|
77,988
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Total interest income
|
71,950
|
70,414
|
281,400
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270,969
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Interest expense
|
11,981
|
15,279
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50,976
|
61,556
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Net interest income
|
59,969
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55,135
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230,424
|
209,413
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Provision for loan losses
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2,666
|
1,593
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9,108
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4,736
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Net interest income after provision for loan losses
|
57,303
|
53,542
|
221,316
|
204,677
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Deposit service fees
|
12,603
|
11,027
|
46,064
|
42,334
|
Mortgage banking revenues
|
161
|
37
|
843
|
1,735
|
Other banking services
|
613
|
694
|
3,226
|
2,916
|
Wealth management services
|
3,449
|
2,831
|
12,876
|
10,697
|
Benefit trust, administration, consulting and actuarial fees
|
9,397
|
7,879
|
35,946
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31,601
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Investment securities and debt extinguishment gains/(losses), net
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0
|
(69)
|
291
|
(61)
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Total noninterest income
|
26,223
|
22,399
|
99,246
|
89,222
|
Salaries and employee benefits
|
29,639
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27,093
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112,034
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102,278
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Occupancy and equipment and furniture
|
6,665
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6,089
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25,799
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24,502
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Amortization of intangible assets
|
1,264
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1,130
|
4,607
|
4,381
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Acquisition expenses & litigation settlement
|
3,027
|
142
|
8,247
|
4,831
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Other
|
16,304
|
13,383
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61,070
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54,380
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Total operating expenses
|
56,899
|
47,837
|
211,757
|
190,372
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Income before income taxes
|
26,627
|
28,104
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108,805
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103,527
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Income taxes
|
7,823
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9,116
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31,737
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30,385
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Net income
|
$18,804
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$18,988
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$77,068
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$73,142
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Basic earnings per share
|
$0.47
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$0.51
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$1.95
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$2.03
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Diluted earnings per share
|
$0.47
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$0.51
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$1.93
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$2.01
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Summary of Financial Data
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|||||
(Dollars in thousands, except per share data)
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|||||
2012
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2011
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||||
4th Qtr
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3rd Qtr
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2nd Qtr
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1st Qtr
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4th Qtr
|
|
Earnings
|
|||||
Loan income
|
$49,405
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$48,590
|
$47,077
|
$47,638
|
$50,511
|
Investment income
|
22,545
|
22,804
|
23,468
|
19,873
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19,903
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Total interest income
|
71,950
|
71,394
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70,545
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67,511
|
70,414
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Interest expense
|
11,981
|
12,619
|
12,774
|
13,602
|
15,279
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Net interest income
|
59,969
|
58,775
|
57,771
|
53,909
|
55,135
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Provision for loan losses
|
2,666
|
2,643
|
2,155
|
1,644
|
1,593
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Net interest income after provision for loan losses
|
57,303
|
56,132
|
55,616
|
52,265
|
53,542
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Deposit service fees
|
12,603
|
12,057
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11,035
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10,369
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11,027
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Mortgage banking revenues
|
161
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128
|
234
|
320
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37
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Other banking services
|
613
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1,277
|
662
|
674
|
694
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Wealth management services
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3,449
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3,194
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3,101
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3,132
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2,831
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Benefit trust, administration, consulting and actuarial fees
|
9,397
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8,912
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8,664
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8,973
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7,879
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Investment securities gains/(losses), net
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0
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291
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0
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0
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(69)
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Total noninterest income
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26,223
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25,859
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23,696
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23,468
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22,399
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Salaries and employee benefits
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29,639
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28,126
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26,844
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27,425
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27,093
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Occupancy and equipment and furniture
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6,665
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6,541
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6,130
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6,463
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6,089
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Amortization of intangible assets
|
1,264
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1,212
|
1,045
|
1,086
|
1,130
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Acquisition expenses & litigation settlement
|
3,027
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4,796
|
164
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260
|
142
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Other
|
16,304
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15,410
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15,187
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14,169
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13,383
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Total operating expenses
|
56,899
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56,085
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49,370
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49,403
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47,837
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Income before income taxes
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26,627
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25,906
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29,942
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26,330
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28,104
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Income taxes
|
7,823
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7,539
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8,871
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7,504
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9,116
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Net income
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$18,804
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$18,367
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$21,071
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$18,826
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$18,988
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Basic earnings per share
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$0.47
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$0.46
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$0.53
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$0.49
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$0.51
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Diluted earnings per share
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$0.47
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$0.46
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$0.53
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$0.48
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$0.51
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Profitability
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|||||
Return on assets
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1.00%
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0.98%
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1.20%
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1.14%
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1.16%
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Return on equity
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8.20%
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8.12%
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9.82%
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9.22%
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9.96%
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Return on tangible equity(3)
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13.55%
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13.27%
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16.01%
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15.59%
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17.91%
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Noninterest income/operating income (FTE) (1)
|
29.0%
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28.8%
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27.6%
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28.8%
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27.6%
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Efficiency ratio (2)
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58.2%
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56.5%
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56.1%
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59.0%
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57.2%
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Components of Net Interest Margin (FTE)
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|||||
Loan yield
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5.16%
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5.25%
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5.42%
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5.58%
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5.80%
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Cash equivalents yield
|
0.26%
|
0.26%
|
0.34%
|
0.26%
|
0.25%
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Investment yield
|
3.85%
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3.82%
|
3.97%
|
4.33%
|
4.49%
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Earning asset yield
|
4.54%
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4.54%
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4.78%
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4.89%
|
5.11%
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Interest-bearing deposit rate
|
0.34%
|
0.40%
|
0.44%
|
0.56%
|
0.65%
|
Borrowing rate
|
3.89%
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3.56%
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2.85%
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3.79%
|
4.21%
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Cost of all interest-bearing funds
|
0.89%
|
0.94%
|
0.99%
|
1.13%
|
1.27%
|
Cost of funds (includes DDA)
|
0.74%
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0.78%
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0.84%
|
0.96%
|
1.08%
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Net interest margin (FTE)
|
3.83%
|
3.79%
|
3.96%
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3.96%
|
4.06%
|
Fully tax-equivalent adjustment
|
$4,209
|
$4,332
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$4,335
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$4,031
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$3,851
|
Summary of Financial Data
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|||||
(Dollars in thousands, except per share data)
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|||||
2012 | 2011 | ||||
4th Qtr
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3rd Qtr
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2nd Qtr
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1st Qtr
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4th Qtr
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|
Average Balances
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|||||
Loans
|
$3,834,068
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$3,708,143
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$3,512,427
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$3,454,240
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$3,473,366
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Cash equivalents
|
106,851
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138,251
|
10,017
|
251,828
|
233,984
|
Taxable investment securities
|
2,035,651
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2,065,121
|
2,091,575
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1,565,215
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1,495,590
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Nontaxable investment securities
|
691,525
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717,608
|
692,839
|
613,947
|
567,835
|
Total interest-earning assets
|
6,668,095
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6,629,123
|
6,306,858
|
5,885,230
|
5,770,775
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Total assets
|
7,506,371
|
7,426,818
|
7,058,473
|
6,618,812
|
6,474,722
|
Interest-bearing deposits
|
4,545,347
|
4,409,813
|
4,003,213
|
3,964,062
|
3,929,231
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Borrowings
|
830,149
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918,789
|
1,182,707
|
859,774
|
830,344
|
Total interest-bearing liabilities
|
5,375,496
|
5,328,602
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5,185,920
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4,823,836
|
4,759,575
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Noninterest-bearing deposits
|
1,098,193
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1,066,689
|
907,153
|
884,451
|
878,443
|
Shareholders' equity
|
912,321
|
900,147
|
862,747
|
821,043
|
756,334
|
Balance Sheet Data
|
|||||
Cash and cash equivalents
|
$228,558
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$287,753
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$130,902
|
$132,055
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$324,878
|
Investment securities
|
2,818,527
|
2,895,285
|
2,931,918
|
2,765,145
|
2,151,370
|
Loans:
|
|||||
Business lending
|
1,233,944
|
1,233,928
|
1,216,309
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1,210,773
|
1,226,439
|
Consumer mortgage
|
1,448,415
|
1,390,130
|
1,289,155
|
1,245,217
|
1,214,621
|
Consumer installment - indirect
|
647,518
|
642,196
|
591,249
|
542,605
|
556,955
|
Home equity
|
364,225
|
372,493
|
310,555
|
317,716
|
323,840
|
Consumer installment - direct
|
171,474
|
173,710
|
154,402
|
144,428
|
149,170
|
Total loans
|
3,865,576
|
3,812,457
|
3,561,670
|
3,460,739
|
3,471,025
|
Allowance for loan losses
|
42,888
|
42,817
|
41,828
|
41,809
|
42,213
|
Intangible assets
|
387,133
|
388,398
|
358,435
|
359,480
|
360,564
|
Other assets
|
239,894
|
229,297
|
225,234
|
236,848
|
222,651
|
Total assets
|
7,496,800
|
7,570,373
|
7,166,331
|
6,912,458
|
6,488,275
|
Deposits:
|
|||||
Noninterest-bearing
|
1,110,994
|
1,098,135
|
944,695
|
911,131
|
894,464
|
Non-maturity interest-bearing
|
3,501,630
|
3,533,837
|
2,942,333
|
2,974,191
|
2,776,532
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Time
|
1,015,415
|
1,076,657
|
1,023,324
|
1,066,685
|
1,124,249
|
Total deposits
|
5,628,039
|
5,708,629
|
4,910,352
|
4,952,007
|
4,795,245
|
Borrowings
|
728,061
|
728,116
|
1,157,872
|
910,427
|
728,281
|
Subordinated debt held by unconsolidated subsidiary trusts
|
102,073
|
102,067
|
102,060
|
102,054
|
102,048
|
Other liabilities
|
135,849
|
126,962
|
110,988
|
107,297
|
88,118
|
Total liabilities
|
6,594,022
|
6,665,774
|
6,281,272
|
6,071,785
|
5,713,692
|
Shareholders' equity
|
902,778
|
904,599
|
885,059
|
840,673
|
774,583
|
Total liabilities and shareholders' equity
|
7,496,800
|
7,570,373
|
7,166,331
|
6,912,458
|
6,488,275
|
Capital
|
|||||
Tier 1 leverage ratio
|
8.40%
|
8.32%
|
8.98%
|
9.37%
|
8.38%
|
Tangible equity/net tangible assets (3)
|
7.62%
|
7.54%
|
8.09%
|
7.70%
|
7.12%
|
Diluted weighted average common shares O/S
|
40,179
|
40,139
|
40,057
|
39,323
|
37,491
|
Period end common shares outstanding
|
39,626
|
39,571
|
39,472
|
39,439
|
36,986
|
Cash dividends declared per common share
|
$0.27
|
$0.27
|
$0.26
|
$0.26
|
$0.26
|
Book value
|
$22.78
|
$22.86
|
$22.42
|
$21.32
|
$20.94
|
Tangible book value(3)
|
$13.72
|
$13.73
|
$14.00
|
$12.84
|
$11.85
|
Common stock price (end of period)
|
$27.36
|
$28.19
|
$27.12
|
$28.78
|
$27.80
|
Summary of Financial Data
|
|||||
(Dollars in thousands, except per share data)
|
|||||
2012
|
2011
|
||||
4th Qtr
|
3rd Qtr
|
2nd Qtr
|
1st Qtr
|
4th Qtr
|
|
Asset Quality
|
|||||
Nonaccrual loans
|
$26,318
|
$27,370
|
$28,571
|
$27,757
|
$28,285
|
Accruing loans 90+ days delinquent
|
2,748
|
3,349
|
3,437
|
3,889
|
3,090
|
Total nonperforming loans
|
29,066
|
30,719
|
32,008
|
31,646
|
31,375
|
Other real estate owned (OREO)
|
4,788
|
3,384
|
2,899
|
2,690
|
2,682
|
Total nonperforming assets
|
33,854
|
34,103
|
34,907
|
34,336
|
34,057
|
Net charge-offs
|
2,596
|
1,654
|
2,136
|
2,048
|
1,844
|
Allowance for loan losses/loans outstanding
|
1.11%
|
1.12%
|
1.17%
|
1.21%
|
1.22%
|
Nonperforming loans/loans outstanding
|
0.75%
|
0.81%
|
0.90%
|
0.91%
|
0.90%
|
Allowance for loan losses/nonperforming loans
|
148%
|
139%
|
131%
|
132%
|
135%
|
Net charge-offs/average loans
|
0.27%
|
0.18%
|
0.24%
|
0.24%
|
0.21%
|
Delinquent loans/ending loans
|
1.92%
|
1.79%
|
1.71%
|
1.78%
|
2.05%
|
Loan loss provision/net charge-offs
|
103%
|
160%
|
101%
|
80%
|
86%
|
Nonperforming assets/total assets
|
0.45%
|
0.45%
|
0.49%
|
0.50%
|
0.52%
|
Asset Quality (excluding loans acquired since 1/1/09)
|
|||||
Nonaccrual loans
|
$21,938
|
$21,733
|
$22,395
|
$20,178
|
$17,585
|
Accruing loans 90+ days delinquent
|
2,356
|
3,038
|
3,070
|
2,700
|
2,878
|
Total nonperforming loans
|
24,294
|
24,771
|
25,465
|
22,878
|
20,463
|
Other real estate owned (OREO)
|
1,397
|
1,671
|
1,577
|
1,778
|
1,734
|
Total nonperforming assets
|
25,691
|
26,442
|
27,042
|
24,656
|
22,197
|
Net charge-offs
|
1,863
|
1,754
|
1,217
|
752
|
1,844
|
Allowance for loan losses/loans outstanding
|
1.21%
|
1.24%
|
1.28%
|
1.30%
|
1.36%
|
Nonperforming loans/loans outstanding
|
0.71%
|
0.74%
|
0.79%
|
0.74%
|
0.69%
|
Allowance for loan losses/nonperforming loans
|
170%
|
167%
|
161%
|
175%
|
197%
|
Net charge-offs/average loans
|
0.19%
|
0.21%
|
0.16%
|
0.10%
|
0.24%
|
Delinquent loans/ending loans
|
1.82%
|
1.65%
|
1.62%
|
1.61%
|
1.77%
|
Loan loss provision/net charge-offs
|
102%
|
119%
|
180%
|
37%
|
79%
|
Nonperforming assets/total assets
|
0.36%
|
0.37%
|
0.40%
|
0.38%
|
0.36%
|
(1) Excludes gain (loss) on investment securities.
|
|||||
(2) Excludes intangible amortization, acquisition expenses, litigation settlement, and gain (loss) on investment securities.
|
|||||
(3) Includes deferred tax liabilities (of approximately $27.9 million at 12/31/12) generated from tax deductible goodwill.
|
|||||