Vermont Business Magazine In February Community Bank System, Inc (NYSE: CBU) announced the completion of a balance sheet repositioning related to its investment securities portfolio. The company is the parent of Community Bank NA with branches across Vermont.
The company executed the sale of $786.1 million in book value of its lower-yielding available-for-sale debt securities for an estimated after-tax realized loss of approximately $39.6 million. Proceeds from the sale of $733.8 million were redeployed towards paying off existing wholesale borrowings with a spread differential of approximately 320 basis points higher than the securities that were sold. The company said in a press release that it estimates that the loss will be recouped within approximately two years.
The loss on the sale of securities has a neutral impact on shareholders’ equity and the company’s book value per share, but is expected to be accretive to both the Company’s Tier 1 leverage and tangible equity-to-assets ratios by approximately 20 basis points. CBU said this repositioning will be substantially accretive to earnings, net interest margin and return on assets in future periods, and simultaneously provide the company with greater flexibility in managing balance sheet growth and deposit funding.
The sale of these available-for-sale securities is expected to provide the Company with over $1.3 billion of investment securities cash flows in 2023, including approximately $600 million of previously disclosed maturities and principal cash flows from other available-for-sale and held-to-maturity investment securities during the year.
Community Bank System reports fourth quarter and full year 2022 results, declares dividend
Community Bank System, Inc. operates more than 210 customer facilities across Upstate New York, Northeastern Pennsylvania, Vermont, and Western Massachusetts through its banking subsidiary, Community Bank, N.A. With assets of over $15.8 billion at December 31, 2022, the DeWitt, N.Y. headquartered company is among the country’s 125 largest banking institutions. In addition to a full range of retail, business, and municipal banking services, the Company offers comprehensive financial planning, insurance and wealth management services through its Community Bank Wealth Management Group and OneGroup NY, Inc. operating units. The Company’s Benefit Plans Administrative Services, Inc. subsidiary is a leading provider of employee benefits administration, trust services, collective investment fund administration and actuarial consulting services to customers on a national scale. Community Bank System, Inc. is listed on the New York Stock Exchange and the Company’s stock trades under the symbol CBU. For more information about Community Bank visit www.cbna.com or https://ir.communitybanksystem.com.
SYRACUSE, N.Y.--(BUSINESS WIRE)--2.1.2023. In February Community Bank System, Inc
