Net income at Community Bank System Inc. fell 1 percent during the fourth quarter of 2012, driven down by $3 million in acquisition-related and litigation settlement charges.
The DeWitt-headquartered parent of Community Bank N.A. this week reported net income of $18.8 million, or 47 cents per share, for the quarter ending Dec. 31. That's down from $19 million, or 51 cents per share, reported for the same quarter in 2011.
The financial institution (NYSE: CBU) recorded $500,000 in expenses related to the mid-2012 acquisition of 16 HSBC Bank USA N.A. branches and three First Niagara Bank branches. It also accrued $2.5 million in expenses to settle a class action lawsuit related to the processing of debit card transactions and the affect on overdraft fees.
Full-year earnings, meanwhile, grew 5.4 percent over 2011 when net income totaled $73.1 million. In 2012, net income was $77.1 million. At the same time, earnings per share dropped from $2.01 per share in 2011 to $1.93 per share in 2012.
"Our fourth quarter and full year operating performance continued to be at very favorable levels and was characterized by solid revenue growth, strong organic loan generation, a continuation of our stable and favorable asset quality profile and the successful completion of the branch acquisitions announced earlier in the year," bank President and CEO Mark Tryniski said in a release.
Community Bank completed the purchase of 16 HSBC branches in July. Two months later, it closed on three First Niagara branches. The deals were announced a year ago.
Community Bank is in the midst of renovating some of the branches it acquired, including three in Western New York. It is seeking approval to buy a former Olean elementary school to renovate and relocate its expanding loan operations department.