| Delaware | | | 6721 | | | 16-1213679 | |
| (State or other jurisdiction of incorporation or organization) | | | (Primary Standard Industrial Classification Code Number) | | | (I.R.S. Employer Identification Number) | |
| Andrew P. Alin, Esq. Cadwalader, Wickersham & Taft LLP 200 Liberty Street New York, New York 10281 (212) 504-6000 | | | George J. Getman, Esq. EVP and General Counsel Community Bank System, Inc. 5790 Widewaters Parkway DeWitt, New York 13214 (315) 445-2282 | | | Kenneth J. Rollins, Esq. Pillar Aught LLC 4201 E. Park Circle Harrisburgh, Pennsylvania 17111 (717) 308-9910 | |
| Large accelerated filer | | | ☒ | | | | | | Accelerated filer | | | ☐ | |
| Non-accelerated filer | | | ☐ | | | (Do not check if a smaller reporting company) | | | Smaller reporting company | | | ☐ | |
| | | | | | | | | | Emerging growth company | | | ☐ | |
CALCULATION OF REGISTRATION FEE | | ||||||||||||
Title of Each Class of Securities to be Registered | | | Amount to be Registered(1) | | | Proposed Maximum Offering Price per Share | | | Proposed Maximum Aggregate Offering Price(2) | | | Amount of Registration Fee(3) | |
Common Stock, $1.00 par value | | | 1,374,283 Shares | | | N/A | | | $95,384,182 | | | $12,381 | |
| | | STEUBEN TRUST CORPORATION One Steuben Square Hornell, New York 14843 | |
| | | Page | | |||
| | | | iv | | | |
| | | | viii | | | |
| | | | 1 | | | |
| | | | 8 | | | |
| | | | 10 | | | |
| | | | 12 | | | |
| | | | 17 | | | |
| | | | 18 | | | |
| | | | 18 | | | |
| | | | 18 | | | |
| | | | 20 | | | |
| | | | 20 | | | |
| | | | 20 | | | |
| | | | 20 | | | |
| | | | 20 | | | |
| | | | 20 | | | |
| | | | 20 | | | |
| | | | 21 | | | |
| | | | 21 | | | |
| | | | 21 | | | |
| | | | 22 | | | |
| | | | | | ||
| | | | 23 | | | |
| | | | 23 | | | |
| | | | 28 | | | |
| | | | 31 | | | |
| | | | 31 | | | |
| | | | 32 | | | |
| | | | 42 | | | |
| | | | 43 | | | |
| | | | 43 | | | |
| | | | 47 | | | |
| | | | 49 | | | |
| | | | 49 | | | |
| | | | 50 | | | |
| | | | 50 | | | |
| | | | 50 | | | |
| | | | 54 | | | |
| | | | 54 | | | |
| | | | 54 | | | |
| | | | 54 | | | |
| | | | 55 | | |
| | | Page | | |||
| | | | 56 | | | |
| | | | 56 | | | |
| | | | 59 | | | |
| | | | 60 | | | |
| | | | 60 | | | |
| | | | 60 | | | |
| | | | 61 | | | |
| | | | 62 | | | |
| | | | 63 | | | |
| | | | 64 | | | |
| | | | 65 | | | |
| | | | 66 | | | |
| | | | 67 | | | |
| | | | 68 | | | |
| | | | 68 | | | |
| | | | 69 | | | |
| | | | 71 | | | |
| | | | | | ||
| | | | 74 | | | |
| | | | 74 | | | |
| | | | 74 | | | |
| | | | 74 | | | |
| | | | 76 | | | |
| | | | 76 | | | |
| | | | 76 | | | |
| | | | 76 | | | |
| | | | 77 | | | |
| | | | 77 | | | |
| | | | 77 | | | |
| | | | 78 | | | |
| | | | 78 | | | |
| | | | 78 | | | |
| | | | 78 | | | |
| | | | 79 | | | |
| | | | 79 | | | |
| | | | 80 | | | |
| | | | 80 | | | |
| | | | 82 | | | |
| | | | 82 | | | |
| | | | 82 | | | |
| | | | 82 | | |
| Community Bank System, Inc. | | | Steuben Trust Corporation | |
| Joseph E. Sutaris E.V.P. and Chief Financial Officer Community Bank System, Inc. 5790 Widewaters Parkway DeWitt, New York 13214 (315) 445-7396 | | | Brenda L. Copeland Chairman and Chief Executive Officer Steuben Trust Corporation One Steuben Square Hornell, New York 14843 (866) 783-8236 | |
| Community Bank System, Inc. | | | Steuben Trust Corporation | |
| Marguerite K. Geiss Investor Relations/Board Secretary Community Bank System, Inc. 5790 Widewaters Parkway DeWitt, New York 13214 (315) 445-7313 | | | Mary E. Hilfiger Corporate Secretary Steuben Trust Corporation One Steuben Square Hornell, New York 14843 (866) 783-8236 | |
| | | Community Bank System | | | Steuben | | | | Community Bank System | | | Steuben | | ||||||||||||||||||||||||
| | | | | | | | Equivalent Market Value Per Share | | | | | | | | | Equivalent Value Per Share | | ||||||||||||||||||||
Closing Sale Prices Per Share on: | | Historical | | Historical | | | Historical | | Historical | | ||||||||||||||||||||||||||||
October 18, 2019 | | | $ | 63.86 | | | | $ | 42.01 | | | | $ | 64.03 | | | | | $ | 63.86 | | | | $ | 42.01 | | | | $ | 64.03 | | | ||||||
[•] | | | | | | | | | | | | | | | | | ||||||||||||||||||||||
January 8, 2020 | | | $ | 70.71 | | | | $ | 69.05 | | | | $ | 69.55 | | |
(In thousands except per share data and ratios) | | | Nine months ended September 30, | | | Years Ended December 31, | | ||||||||||||||||||||||||||||||||||||
| 2019 | | | 2018 | | | 2018 | | | 2017 | | | 2016 | | | 2015 | | | 2014 | | |||||||||||||||||||||||
Income Statement Data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loan interest income | | | | $ | 227,701 | | | | | $ | 212,849 | | | | | $ | 286,165 | | | | | $ | 253,949 | | | | | $ | 211,467 | | | | | $ | 187,743 | | | | | $ | 185,527 | | |
Investment interest income | | | | | 57,979 | | | | | | 57,463 | | | | | | 76,568 | | | | | | 75,506 | | | | | | 73,720 | | | | | | 71,879 | | | | | | 70,693 | | |
Interest expense | | | | | 19,245 | | | | | | 12,644 | | | | | | 17,678 | | | | | | 13,780 | | | | | | 11,291 | | | | | | 11,202 | | | | | | 11,792 | | |
Net interest income | | | | | 266,435 | | | | | | 257,668 | | | | | | 345,055 | | | | | | 315,675 | | | | | | 273,896 | | | | | | 248,420 | | | | | | 244,428 | | |
Provision for loan losses | | | | | 5,573 | | | | | | 8,342 | | | | | | 10,837 | | | | | | 10,984 | | | | | | 8,076 | | | | | | 6,447 | | | | | | 7,178 | | |
Noninterest revenues | | | | | 168,586 | | | | | | 169,437 | | | | | | 223,720 | | | | | | 202,421 | | | | | | 155,625 | | | | | | 123,303 | | | | | | 119,020 | | |
Gain (loss) on investment securities & loss on debt extinguishment, net | | | | | 4,910 | | | | | | 404 | | | | | | 339 | | | | | | 2 | | | | | | 0 | | | | | | (4) | | | | | | 0 | | |
Acquisition expenses and litigation settlement | | | | | 7,789 | | | | | | (769) | | | | | | (769) | | | | | | 25,986 | | | | | | 1,706 | | | | | | 7,037 | | | | | | 2,923 | | |
Other noninterest expenses | | | | | 268,968 | | | | | | 258,445 | | | | | | 346,058 | | | | | | 321,163 | | | | | | 265,142 | | | | | | 226,018 | | | | | | 223,657 | | |
Income before income taxes | | | | | 157,601 | | | | | | 161,491 | | | | | | 212,988 | | | | | | 159,965 | | | | | | 154,597 | | | | | | 132,217 | | | | | | 129,690 | | |
Net income | | | | | 126,179 | | | | | | 127,818 | | | | | | 168,641 | | | | | | 150,717 | | | | | | 103,812 | | | | | | 91,230 | | | | | | 91,353 | | |
Diluted earnings per share | | | | | 2.41 | | | | | | 2.46 | | | | | | 3.24 | | | | | | 3.03 | | | | | | 2.32 | | | | | | 2.19 | | | | | | 2.22 | | |
Balance Sheet Data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash equivalents | | | | $ | 781,732 | | | | | $ | 56,891 | | | | | $ | 29,083 | | | | | $ | 19,652 | | | | | $ | 24,243 | | | | | $ | 21,931 | | | | | $ | 12,870 | | |
Investment securities | | | | | 2,481,742 | | | | | | 2,948,057 | | | | | | 2,981,658 | | | | | | 3,081,379 | | | | | | 2,784,392 | | | | | | 2,847,940 | | | | | | 2,512,974 | | |
Loans, net of unearned discount | | | | | 6,853,191 | | | | | | 6,300,888 | | | | | | 6,281,121 | | | | | | 6,256,757 | | | | | | 4,948,562 | | | | | | 4,801,375 | | | | | | 4,236,206 | | |
Allowance for loan losses | | | | | (49,423) | | | | | | (50,133) | | | | | | (49,284) | | | | | | (47,583) | | | | | | (47,233) | | | | | | (45,401) | | | | | | (45,341) | | |
Intangible assets | | | | | 840,685 | | | | | | 811,700 | | | | | | 807,349 | | | | | | 825,088 | | | | | | 480,844 | | | | | | 484,146 | | | | | | 386,973 | | |
Total assets | | | | | 11,597,297 | | | | | | 10,659,567 | | | | | | 10,607,295 | | | | | | 10,746,198 | | | | | | 8,666,437 | | | | | | 8,552,669 | | | | | | 7,489,440 | | |
Deposits | | | | | 9,168,285 | | | | | | 8,463,821 | | | | | | 8,322,371 | | | | | | 8,444,420 | | | | | | 7,075,954 | | | | | | 6,873,474 | | | | | | 5,935,264 | | |
Borrowings | | | | | 328,795 | | | | | | 374,498 | | | | | | 413,682 | | | | | | 485,896 | | | | | | 248,370 | | | | | | 403,446 | | | | | | 440,122 | | |
Shareholders’ equity | | | | | 1,840,421 | | | | | | 1,668,345 | | | | | | 1,713,783 | | | | | | 1,635,315 | | | | | | 1,198,100 | | | | | | 1,140,647 | | | | | | 987,904 | | |
(In thousands except per share data and ratios) | | | Nine months ended September 30, | | | Years Ended December 31, | | ||||||||||||||||||||||||||||||||||||
| 2019 | | | 2018 | | | 2018 | | | 2017 | | | 2016 | | | 2015 | | | 2014 | | |||||||||||||||||||||||
Capital and Related Ratios: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash dividends declared per share | | | | $ | 1.17 | | | | | $ | 1.06 | | | | | $ | 1.44 | | | | | $ | 1.32 | | | | | $ | 1.26 | | | | | $ | 1.22 | | | | | $ | 1.16 | | |
Book value per share | | | | | 35.63 | | | | | | 32.63 | | | | | | 33.43 | | | | | | 32.26 | | | | | | 26.96 | | | | | | 26.06 | | | | | | 24.24 | | |
Tangible book value per share(1) | | | | | 20.24 | | | | | | 17.67 | | | | | | 18.59 | | | | | | 16.94 | | | | | | 17.12 | | | | | | 15.90 | | | | | | 15.63 | | |
Market capitalization (in millions) | | | | | 3,187 | | | | | | 3,123 | | | | | | 2,988 | | | | | | 2,725 | | | | | | 2,746 | | | | | | 1,748 | | | | | | 1,554 | | |
Tier 1 leverage ratio | | | | | 10.76% | | | | | | 10.72% | | | | | | 11.08% | | | | | | 10.00% | | | | | | 10.55% | | | | | | 10.32% | | | | | | 9.96% | | |
Total risk-based capital to risk-adjusted assets | | | | | 17.54% | | | | | | 18.41% | | | | | | 19.06% | | | | | | 17.45% | | | | | | 19.10% | | | | | | 18.08% | | | | | | 18.75% | | |
Tangible equity to tangible assets(1) | | | | | 9.68% | | | | | | 9.13% | | | | | | 9.68% | | | | | | 8.61% | | | | | | 9.24% | | | | | | 8.59% | | | | | | 8.92% | | |
Dividend payout ratio | | | | | 47.9% | | | | | | 42.4% | | | | | | 43.8% | | | | | | 43.5% | | | | | | 53.7% | | | | | | 55.5% | | | | | | 51.6% | | |
Period end common shares outstanding | | | | | 51,660 | | | | | | 51,137 | | | | | | 51,528 | | | | | | 50,696 | | | | | | 44,437 | | | | | | 43,775 | | | | | | 40,748 | | |
Diluted weighted-average shares outstanding | | | | | 52,301 | | | | | | 51,925 | | | | | | 51,975 | | | | | | 49,665 | | | | | | 44,720 | | | | | | 41,605 | | | | | | 41,232 | | |
Selected Performance Ratios: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Return on average assets | | | | | 1.55% | | | | | | 1.60% | | | | | | 1.58% | | | | | | 1.49% | | | | | | 1.20% | | | | | | 1.17% | | | | | | 1.23% | | |
Return on average equity | | | | | 9.50% | | | | | | 10.40% | | | | | | 10.20% | | | | | | 10.21% | | | | | | 8.57% | | | | | | 8.87% | | | | | | 9.65% | | |
Net interest margin | | | | | 3.78% | | | | | | 3.72% | | | | | | 3.73% | | | | | | 3.69% | | | | | | 3.71% | | | | | | 3.73% | | | | | | 3.91% | | |
Noninterest revenues/operating revenues (FTE)(2) | | | | | 38.9% | | | | | | 39.9% | | | | | | 39.6% | | | | | | 38.8% | | | | | | 35.5% | | | | | | 32.3% | | | | | | 31.7% | | |
Efficiency ratio(3) | | | | | 59.2% | | | | | | 57.7% | | | | | | 58.0% | | | | | | 58.3% | | | | | | 59.6% | | | | | | 58.2% | | | | | | 58.4% | | |
Asset Quality Ratios: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses/total loans | | | | | 0.72% | | | | | | 0.80% | | | | | | 0.78% | | | | | | 0.76% | | | | | | 0.95% | | | | | | 0.95% | | | | | | 1.07% | | |
Nonperforming loans/total loans | | | | | 0.42% | | | | | | 0.40% | | | | | | 0.40% | | | | | | 0.44% | | | | | | 0.48% | | | | | | 0.50% | | | | | | 0.56% | | |
Allowance for loan losses/nonperforming loans | | | | | 172% | | | | | | 201% | | | | | | 197% | | | | | | 173% | | | | | | 199% | | | | | | 190% | | | | | | 190% | | |
Loan loss provision/net charge-offs | | | | | 103% | | | | | | 144% | | | | | | 119% | | | | | | 103% | | | | | | 129% | | | | | | 101% | | | | | | 117% | | |
Net charge-offs/average loans | | | | | 0.11% | | | | | | 0.12% | | | | | | 0.15% | | | | | | 0.18% | | | | | | 0.13% | | | | | | 0.15% | | | | | | 0.15% | | |
| | | Historical | | | Pro Forma | | ||||||||||||||||||
| | | Community Bank System | | | Steuben | | | Combined Company(1)(2)(3) | | | Steuben Equivalent(4) | | ||||||||||||
For the nine months ended September 30, 2019: | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic Earnings per share | | | | $ | 2.44 | | | | | $ | 3.12 | | | | | $ | 2.47 | | | | | $ | 1.99 | | |
Diluted Earnings per share | | | | $ | 2.41 | | | | | $ | 3.12 | | | | | $ | 2.45 | | | | | $ | 1.97 | | |
Cash Dividends | | | | $ | 1.17 | | | | | $ | 1.06 | | | | | $ | 1.17 | | | | | $ | 0.94 | | |
Book Value at September 30, 2019 | | | | $ | 35.63 | | | | | $ | 38.81 | | | | | $ | 36.29 | | | | | $ | 29.23 | | |
For the year ended December 31, 2018: | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic Earnings per share | | | | $ | 3.28 | | | | | $ | 4.12 | | | | | $ | 3.33 | | | | | $ | 2.68 | | |
Diluted Earnings per share | | | | $ | 3.24 | | | | | $ | 4.11 | | | | | $ | 3.29 | | | | | $ | 2.65 | | |
Cash Dividends | | | | $ | 1.44 | | | | | $ | 1.31 | | | | | $ | 1.44 | | | | | $ | 1.16 | | |
| Transaction value / tangible book value | | | | | 167% | | |
| Transaction value / last twelve months earnings per share | | | | | 15.1x | | |
| Core deposit premium(2) | | | | | 11.0% | | |
| Market premium to most recent closing price | | | | | 37.2% | | |
Institution | | | City, State | | | Ticker | | | Exchange | |
Ballston Spa Bancorp, Inc. | | | Ballston Spa, NY | | | BSPA | | | OTC Pink | |
Elmira Savings Bank | | | Elmira, NY | | | ESBK | | | NASDAQ | |
ES Bancshares, Inc. | | | Newburgh, NY | | | ESBS | | | OTC Pink | |
Jeffersonville Bancorp | | | Jeffersonville, NY | | | JFBC | | | OTCQB | |
Jonestown Bank and Trust Co. | | | Jonestown, PA | | | JNES | | | OTC Pink | |
Juniata Valley Financial Corp. | | | Mifflintown, PA | | | JUVF | | | OTC Pink | |
Mauch Chunk Trust Financial Corp. | | | Jim Thorpe, PA | | | MCHT | | | OTC Pink | |
MNB Corporation | | | Bangor, PA | | | MNBC | | | OTC Pink | |
Muncy Bank Financial, Inc. | | | Muncy, PA | | | MYBF | | | OTC Pink | |
Northumberland Bancorp | | | Northumberland, PA | | | NUBC | | | OTC Pink | |
Susquehanna Community Financial, Inc. | | | West Milton, PA | | | SQCF | | | OTC Pink | |
Woodlands Financial Services Company | | | Williamsport, PA | | | WDFN | | | OTC Pink | |
York Traditions Bank | | | York, PA | | | YRKB | | | OTC Pink | |
| | | Assets In Thousands | | | Tangible Equity/ Tang. Assets | | | Tangible Comm. Eq./ Tang. Assets | | | NPAs/ Assets | | | Return on Average Assets | | | Return on Average Equity | | ||||||||||||||||||
High | | | | $ | 662,064 | | | | | | 13.33% | | | | | | 13.33% | | | | | | 1.74% | | | | | | 1.30% | | | | | | 13.09% | | |
75th Percentile | | | | | 551,777 | | | | | | 10.20 | | | | | | 10.21 | | | | | | 1.08 | | | | | | 1.06 | | | | | | 11.33 | | |
Median | | | | | 519,520 | | | | | | 9.58 | | | | | | 9.58 | | | | | | 0.67 | | | | | | 0.93 | | | | | | 10.12 | | |
25th Percentile | | | | | 473,895 | | | | | | 8.77 | | | | | | 8.77 | | | | | | 0.42 | | | | | | 0.62 | | | | | | 7.29 | | |
Low | | | | | 409,061 | | | | | | 5.28 | | | | | | 5.28 | | | | | | 0.28 | | | | | | 0.35 | | | | | | 6.17 | | |
Steuben | | | | $ | 576,601 | | | | | | 11.05% | | | | | | 11.05% | | | | | | 0.55% | | | | | | 1.25% | | | | | | 11.96% | | |
| | | Stock Price/ | | | | | | | | | ||||||||||||||||||||||||||
| | | Earnings per Share | | | Tang. Book Per Share | | | | | | | | | | | | | | | Shares Traded Daily(2) | | |||||||||||||||
| | | LTM | | | MRQ (annualized) | | | Assets Per Share | | | Dividend Yield | | ||||||||||||||||||||||||
High | | | | | 17.4x | | | | | | 17.0x | | | | | | 162% | | | | | | 15.4% | | | | | | 6.44% | | | | | | 6,078 | | |
75th Percentile | | | | | 13.9 | | | | | | 13.9 | | | | | | 114 | | | | | | 11.4 | | | | | | 3.46 | | | | | | 763 | | |
Median | | | | | 11.1 | | | | | | 9.9 | | | | | | 108 | | | | | | 10.0 | | | | | | 2.84 | | | | | | 498 | | |
25th Percentile | | | | | 10.7 | | | | | | 9.2 | | | | | | 100 | | | | | | 8.9 | | | | | | 2.33 | | | | | | 272 | | |
Low | | | | | 8.8 | | | | | | 8.5 | | | | | | 74 | | | | | | 3.9 | | | | | | 0.00 | | | | | | 53 | | |
Steuben | | | | | 11.0x | | | | | | 10.7x | | | | | | 121% | | | | | | 13.4% | | | | | | 3.04% | | | | | | 276 | | |
| | | One-Year Stock Performance | | |||||||||||||||||||||
Date | | | Steuben (SBHO) | | | Comparable Institutions | | | S&P 500 | | | NASDAQ Bank Index | | ||||||||||||
October 16, 2019 | | | | | 92% | | | | | | 99% | | | | | | 106% | | | | | | 94% | | |
October 16, 2018 | | | | | 100 | | | | | | 100 | | | | | | 100 | | | | | | 100 | | |
| | | Three-Year Stock Performance | | |||||||||||||||||||||
Date | | | Steuben (SBHO) | | | Comparable Institutions | | | S&P 500 | | | NASDAQ Bank Index | | ||||||||||||
October 16, 2019 | | | | | 142% | | | | | | 129% | | | | | | 140% | | | | | | 121% | | |
October 14, 2016 | | | | | 100 | | | | | | 100 | | | | | | 100 | | | | | | 100 | | |
| | | Year | | | Number of Deals | | | Median Price/ Last 12 Months Earnings | | | Median Price/ Tangible Common Book (%) | | |||||||||
Highest 3rd by Announced Price-to-Tangible Book | | | 2019 (through Oct. 16, 2019) | | | | | 29 | | | | | | 15.5x | | | | | | 189% | | |
| | | 2018 | | | | | 46 | | | | | | 24.4 | | | | | | 216 | | |
| | | 2017 | | | | | 47 | | | | | | 21.9 | | | | | | 209 | | |
| | | 2016 | | | | | 38 | | | | | | 20.3 | | | | | | 179 | | |
| | | 2015 | | | | | 47 | | | | | | 23.7 | | | | | | 181 | | |
Middle 3rd by Announced Price-to-Tangible Book | | | 2019 (through Oct. 16, 2019) | | | | | 30 | | | | | | 15.2x | | | | | | 158% | | |
| | | 2018 | | | | | 46 | | | | | | 24.4 | | | | | | 173 | | |
| | | 2017 | | | | | 47 | | | | | | 22.9 | | | | | | 167 | | |
| | | 2016 | | | | | 39 | | | | | | 20.0 | | | | | | 141 | | |
| | | 2015 | | | | | 46 | | | | | | 22.8 | | | | | | 143 | | |
Lowest 3rd by Announced Price-to-Tangible Book | | | 2019 (through Oct. 16, 2019) | | | | | 30 | | | | | | 16.7x | | | | | | 129% | | |
| | | 2018 | | | | | 46 | | | | | | 24.9 | | | | | | 134 | | |
| | | 2017 | | | | | 47 | | | | | | 20.8 | | | | | | 132 | | |
| | | 2016 | | | | | 39 | | | | | | 18.2 | | | | | | 116 | | |
| | | 2015 | | | | | 46 | | | | | | 23.4 | | | | | | 118 | | |
| | | Community / Steuben | | | | | | | | | | | 15.1x | | | | | | 167% | | |
Acquirer/Seller | | | Deal Value | | | Deal Value/ Last 12 Months Earnings | | | Deal Value/ Common Tangible Book | | |||||||||
| | | (in mill.) | | | | |||||||||||||
Mid Penn Bancorp, Inc./First Priority Financial Corp. | | | | $ | 91 | | | | | | 32.6x | | | | | | 194% | | |
Community Bank System, Inc./Kinderhook Bank Corp. | | | | | 93 | | | | | | 23.4 | | | | | | 193 | | |
Lakeland Bancorp, Inc./Highlands Bancorp, Inc. | | | | | 57 | | | | | | 22.5 | | | | | | 189 | | |
Northwest Bancshares, Inc./Donegal Financial Services Corp. | | | | | 86 | | | | | | 20.3 | | | | | | 174 | | |
OceanFirst Financial Corp./Capital Bank of New Jersey | | | | | 77 | | | | | | 13.3 | | | | | | 168 | | |
Citizens & Northern Corporation/Monument Bancorp, Inc. | | | | | 43 | | | | | | 16.7 | | | | | | 164 | | |
DNB Financial Corporation/East River Bank | | | | | 49 | | | | | | 21.7 | | | | | | 158 | | |
Sussex Bancorp/Community Bank of Bergen County, NJ | | | | | 47 | | | | | | 27.9 | | | | | | 158 | | |
OceanFirst Financial Corp./Country Bank Holding Company, Inc. | | | | | 102 | | | | | | 9.8 | | | | | | 151 | | |
ConnectOne Bancorp, Inc./Greater Hudson Bank | | | | | 76 | | | | | | NM | | | | | | 145 | | |
Investors Bancorp, Inc./Gold Coast Bancorp, Inc. | | | | | 64 | | | | | | 27.3 | | | | | | 138 | | |
Norwood Financial Corp./Delaware Bancshares, Inc. | | | | | 15 | | | | | | 25.7 | | | | | | 114 | | |
Median | | | | $ | 70 | | | | | | 22.5x | | | | | | 161% | | |
Community / Steuben | | | | $ | 107 | | | | | | 15.1x | | | | | | 167% | | |
Institution | | | City, State | | | Ticker | | | Exchange | |
First Commonwealth Financial Corporation | | | Indiana, PA | | | FCF | | | NYSE | |
First Financial Bankshares, Inc. | | | Abilene, TX | | | FFIN | | | NASDAQ | |
First Interstate BancSystem, Inc. | | | Billings, MT | | | FIBK | | | NASDAQ | |
Glacier Bancorp, Inc. | | | Kalispell, MT | | | GBCI | | | NASDAQ | |
NBT Bancorp Inc. | | | Norwich, NY | | | NBTB | | | NASDAQ | |
Northwest Bancshares, Inc. | | | Warren, PA | | | NWBI | | | NASDAQ | |
Park National Corporation | | | Newark, OH | | | PRK | | | NYSEAM | |
Renasant Corporation | | | Tupelo, MS | | | RNST | | | NASDAQ | |
TowneBank | | | Portsmouth, VA | | | TOWN | | | NASDAQ | |
WesBanco, Inc. | | | Wheeling, WV | | | WSBC | | | NASDAQ | |
| | | Assets In Millions | | | Tangible Equity/ Tang. Assets | | | NPAs/ Assets | | | Return on Average Assets | | | Return on Average Equity | | | Return on Avg. Tang. Common Equity | | | Risk Based Capital Ratio | | | Nonint. Income/ Oper. Revenue | | ||||||||||||||||||||||||
High | | | | $ | 14,415 | | | | | | 12.69% | | | | | | 1.06% | | | | | | 2.06% | | | | | | 15.17% | | | | | | 18.30% | | | | | | 21.16% | | | | | | 35.24% | | |
75th Percentile | | | | | 12,631 | | | | | | 9.92 | | | | | | 0.54 | | | | | | 1.35 | | | | | | 11.60 | | | | | | 16.74 | | | | | | 15.16 | | | | | | 26.60 | | |
Median | | | | | 11,224 | | | | | | 9.56 | | | | | | 0.46 | | | | | | 1.30 | | | | | | 10.00 | | | | | | 15.92 | | | | | | 14.70 | | | | | | 24.15 | | |
25th Percentile | | | | | 8,902 | | | | | | 9.10 | | | | | | 0.37 | | | | | | 1.24 | | | | | | 8.74 | | | | | | 14.78 | | | | | | 13.72 | | | | | | 22.35 | | |
Low | | | | | 7,979 | | | | | | 8.41 | | | | | | 0.35 | | | | | | 1.07 | | | | | | 8.33 | | | | | | 11.94 | | | | | | 13.02 | | | | | | 20.41 | | |
Community | | | | $ | 10,745 | | | | | | 10.15% | | | | | | 0.25% | | | | | | 1.60% | | | | | | 9.98% | | | | | | 20.31% | | | | | | 19.84% | | | | | | 38.77% | | |
| | | Stock Price/ | | | | |||||||||||||||||||||||||||||||
| | | Earnings per Share | | | Tang. Book Per Share | | | Assets Per Share | | | Dividend Yield | | | Shares Traded Daily(2) | | |||||||||||||||||||||
| | | LTM | | | MRQ (annualized) | | ||||||||||||||||||||||||||||||
High | | | | | 28.7x | | | | | | 26.9x | | | | | | 457% | | | | | | 56.7% | | | | | | 4.41% | | | | | | 660,502 | | |
75th Percentile | | | | | 15.9 | | | | | | 17.3 | | | | | | 217 | | | | | | 18.7 | | | | | | 3.20 | | | | | | 411,786 | | |
Median | | | | | 14.8 | | | | | | 15.3 | | | | | | 193 | | | | | | 16.7 | | | | | | 2.93 | | | | | | 205,669 | | |
25th Percentile | | | | | 12.9 | | | | | | 12.2 | | | | | | 181 | | | | | | 16.6 | | | | | | 2.68 | | | | | | 130,473 | | |
Low | | | | | 12.1 | | | | | | 11.1 | | | | | | 177 | | | | | | 16.1 | | | | | | 1.44 | | | | | | 37,548 | | |
Community | | | | | 19.2x | | | | | | 18.2x | | | | | | 321% | | | | | | 30.1% | | | | | | 2.62% | | | | | | 209,609 | | |
| | | One-Year Stock Performance | | |||||||||||||||||||||
Date | | | Community (CBU) | | | Comparable Institutions | | | S&P 500 | | | NASDAQ Bank Index | | ||||||||||||
October 16, 2019 | | | | | 107% | | | | | | 95% | | | | | | 106% | | | | | | 94% | | |
October 16, 2018 | | | | | 100 | | | | | | 100 | | | | | | 100 | | | | | | 100 | | |
| | | Three-Year Stock Performance | | |||||||||||||||||||||
Date | | | Community (CBU) | | | Comparable Institutions | | | S&P 500 | | | NASDAQ Bank Index | | ||||||||||||
October 16, 2019 | | | | | 132% | | | | | | 114% | | | | | | 140% | | | | | | 121% | | |
October 14, 2016 | | | | | 100 | | | | | | 100 | | | | | | 100 | | | | | | 100 | | |
| | | 12 months ending June 30, | | |||||||||||||||||||||||||||||||||||||||||||||
| | | 2019 | | | 2020 | | | 2021 | | | 2022 | | | 2023 | | | 2024 | | | 2025 | | | 2026 | | ||||||||||||||||||||||||
Net Income | | | | $ | 7,031 | | | | | | 7,558 | | | | | | 8,125 | | | | | | 8,735 | | | | | | 9,390 | | | | | | 10,094 | | | | | | 10,851 | | | | | | 11,665 | | |
Dividend | | | | $ | 2,361 | | | | | | 2,503 | | | | | | 2,653 | | | | | | 2,813 | | | | | | 2,981 | | | | | | 3,160 | | | | | | 3,350 | | | | | | 3,551 | | |
Name | | | Cash ($) | | | Equity(1) ($) | | | Total ($) | | |||||||||
Brenda L. Copeland (Chairman and Chief Executive Officer) | | | | | 1,600,833(2) | | | | | | 100,128 | | | | | | 1,700,961(3) | | |
John S. Eagleton (President) | | | | | 457,500(4) | | | | | | 38,304 | | | | | | 495,804 | | |
Total | | | | | 2,058,333 | | | | | | 138,432 | | | | | | 2,196,765 | | |
Name and Address | | Amount and Nature of Beneficial Ownership | | Percent of Class | | | Amount and Nature of Beneficial Ownership | | Percent of Class | | ||||||||||||||||
David A. Shults | | | | 275,569(1) | | | | | 16.3% | | | | | | 283,345(1) | | | | | 16.7% | | | ||||
9 Seneca Street Hornell, New York 14843 | | | | | ||||||||||||||||||||||
Dick Taylor Hollands Trust | | | | 87,200 | | | | | 5.2% | | | | | | 87,200 | | | | | 5.2% | | | ||||
10 Everett Street Melrose, Massachusetts 02176 | | | | | ||||||||||||||||||||||
Michael E. Davidson | | | | 85,606(2) | | | | | 5.1% | | | | | | 85,606(2) | | | | | 5.1% | | | ||||
212 Main Street Hornell, New York 14843 | | | | | | | | | | | | | | | | | | | | | | |
Name of Individual or Identity of Group | | | Amount and Nature of Beneficial Ownership | | | Percent of Class | | ||||||
Brenda L. Copeland | | | | | 29,218(1) | | | | | | 1.7% | | |
Michael E. Davidson | | | | | 85,606(2) | | | | | | 5.1% | | |
John S. Eagleton | | | | | — | | | | | | * | | |
Dr. Stoner E. Horey | | | | | 6,748 | | | | | | * | | |
Stanley R. Klein | | | | | 200(3) | | | | | | * | | |
James P. Nicoloff | | | | | 3,500(4) | | | | | | * | | |
Amanda S. Parker | | | | | 100 | | | | | | * | | |
Amber R. Phelps | | | | | 672(5) | | | | | | * | | |
Sherry C. Walton | | | | | 13,467 | | | | | | * | | |
Brian L. Wilkins | | | | | 20,158(6) | | | | | | 1.2% | | |
Mark A. Zupan | | | | | — | | | | | | * | | |
All officers, directors and nominees as a group (11 persons) | | | | | 159,669 | | | | | | 9.4% | | |
| | High | | Low | | Cash Dividends Declared Per Share | | | High | | Low | | Cash Dividends Declared Per Share | | ||||||||||||||||||||||||
Year Ending December 31, 2019 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||
Quarter Ending December 31, 2019 (through December 19, 2019) | | | $ | 70.90 | | | | $ | 59.85 | | | | $ | 0.41 | | | ||||||||||||||||||||||
Quarter Ended December 31, 2019 | | | $ | 71.61 | | | | $ | 59.85 | | | | $ | 0.41 | | | ||||||||||||||||||||||
Quarter Ended September 30, 2019 | | | $ | 66.58 | | | | $ | 59.36 | | | | $ | 0.41 | | | | | $ | 66.58 | | | | $ | 59.36 | | | | $ | 0.41 | | | ||||||
Quarter Ended June 30, 2019 | | | $ | 67.79 | | | | $ | 60.25 | | | | $ | 0.38 | | | | | $ | 67.79 | | | | $ | 60.25 | | | | $ | 0.38 | | | ||||||
Quarter Ended March 31, 2019 | | | $ | 65.20 | | | | $ | 56.58 | | | | $ | 0.38 | | | | | $ | 65.20 | | | | $ | 56.58 | | | | $ | 0.38 | | | ||||||
Year Ended December 31, 2018 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||
Quarter Ended December 31, 2018 | | | $ | 66.38 | | | | $ | 54.46 | | | | $ | 0.38 | | | | | $ | 66.38 | | | | $ | 54.46 | | | | $ | 0.38 | | | ||||||
Quarter Ended September 30, 2018 | | | $ | 67.07 | | | | $ | 58.65 | | | | $ | 0.38 | | | | | $ | 67.07 | | | | $ | 58.65 | | | | $ | 0.38 | | | ||||||
Quarter Ended June 30, 2018 | | | $ | 62.39 | | | | $ | 52.26 | | | | $ | 0.34 | | | | | $ | 62.39 | | | | $ | 52.26 | | | | $ | 0.34 | | | ||||||
Quarter Ended March 31, 2018 | | | $ | 57.26 | | | | $ | 50.72 | | | | $ | 0.34 | | | | | $ | 57.26 | | | | $ | 50.72 | | | | $ | 0.34 | | | ||||||
Year Ended December 31, 2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||
Quarter Ended December 31, 2017 | | | $ | 57.46 | | | | $ | 50.69 | | | | $ | 0.34 | | | | | $ | 57.46 | | | | $ | 50.69 | | | | $ | 0.34 | | | ||||||
Quarter Ended September 30, 2017 | | | $ | 57.58 | | | | $ | 48.89 | | | | $ | 0.34 | | | | | $ | 57.58 | | | | $ | 48.89 | | | | $ | 0.34 | | | ||||||
Quarter Ended June 30, 2017 | | | $ | 58.80 | | | | $ | 51.38 | | | | $ | 0.32 | | | | | $ | 58.80 | | | | $ | 51.38 | | | | $ | 0.32 | | | ||||||
Quarter Ended March 31, 2017 | | | $ | 63.04 | | | | $ | 51.60 | | | | $ | 0.32 | | | | | $ | 63.04 | | | | $ | 51.60 | | | | $ | 0.32 | | |
| | High | | Low | | Cash Dividends Declared Per Share | | | High | | Low | | Cash Dividends Declared Per Share | | ||||||||||||||||||||||||
Year Ending December 31, 2019 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||
Quarter Ending December 31, 2019 (through December 19, 2019) | | | $ | 69.00 | | | | $ | 42.01 | | | | $ | 0.355 | | | ||||||||||||||||||||||
Quarter Ended December 31, 2019 | | | $ | 69.50 | | | | $ | 42.01 | | | | $ | 0.355 | | | ||||||||||||||||||||||
Quarter Ended September 30, 2019 | | | $ | 43.50 | | | | $ | 39.10 | | | | $ | 0.355 | | | | | $ | 43.50 | | | | $ | 39.10 | | | | $ | 0.355 | | | ||||||
Quarter Ended June 30, 2019 | | | $ | 40.70 | | | | $ | 38.00 | | | | $ | 0.35 | | | | | $ | 40.70 | | | | $ | 38.00 | | | | $ | 0.35 | | | ||||||
Quarter Ended March 31, 2019 | | | $ | 40.70 | | | | $ | 38.01 | | | | $ | 0.335 | | | | | $ | 40.70 | | | | $ | 38.01 | | | | $ | 0.335 | | | ||||||
Year Ended December 31, 2018 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||
Quarter Ended December 31, 2018 | | | $ | 58.49 | | | | $ | 40.00 | | | | $ | 0.335 | | | | | $ | 58.49 | | | | $ | 40.00 | | | | $ | 0.335 | | | ||||||
Quarter Ended September 30, 2018 | | | $ | 52.75 | | | | $ | 45.68 | | | | $ | 0.33 | | | | | $ | 52.75 | | | | $ | 45.68 | | | | $ | 0.33 | | | ||||||
Quarter Ended June 30, 2018 | | | $ | 46.90 | | | | $ | 44.49 | | | | $ | 0.33 | | | | | $ | 46.90 | | | | $ | 44.49 | | | | $ | 0.33 | | | ||||||
Quarter Ended March 31, 2018 | | | $ | 46.00 | | | | $ | 40.00 | | | | $ | 0.315 | | | | | $ | 46.00 | | | | $ | 40.00 | | | | $ | 0.315 | | | ||||||
Year Ended December 31, 2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||
Quarter Ended December 31, 2017 | | | $ | 54.00 | | | | $ | 38.00 | | | | $ | 0.315 | | | | | $ | 54.00 | | | | $ | 38.00 | | | | $ | 0.315 | | | ||||||
Quarter Ended September 30, 2017 | | | $ | 39.00 | | | | $ | 37.00 | | | | $ | 0.31 | | | | | $ | 39.00 | | | | $ | 37.00 | | | | $ | 0.31 | | | ||||||
Quarter Ended June 30, 2017 | | | $ | 40.00 | | | | $ | 36.20 | | | | $ | 0.31 | | | | | $ | 40.00 | | | | $ | 36.20 | | | | $ | 0.31 | | | ||||||
Quarter Ended March 31, 2017 | | | $ | 40.00 | | | | $ | 33.75 | | | | $ | 0.30 | | | | | $ | 40.00 | | | | $ | 33.75 | | | | $ | 0.30 | | |
| | Community Bank System Common Stock | | Steuben Common Stock | | Equivalent Value Per Share of Steuben Common Stock(1) | | | Community Bank System Common Stock | | Steuben Common Stock | | Equivalent Value Per Share of Steuben Common Stock(1) | | ||||||||||||||||||||||||
October 18, 2019 | | | $ | 63.86 | | | | $ | 42.01 | | | | $ | 64.03 | | | | | $ | 63.86 | | | | $ | 42.01 | | | | $ | 64.03 | | | ||||||
[•] | | | | | | | | | | | | | | | | | ||||||||||||||||||||||
January 8, 2020 | | | $ | 70.71 | | | | $ | 69.05 | | | | $ | 69.55 | | |
Community Bank System Commission Filings (File No. 001-13695) | | | ||
Annual Report on Form 10-K | | | Year ended December 31, 2018, filed on March 1, 2019 | |
Quarterly Report on Form 10-Q | | | | |
| | Filed on April 1, 2019 | | |
Current Reports on Form 8-K | | | Filed January 8, 2019, January 22, 2019, January 25, 2019, May 17, 2019, July 12, 2019, October 21, 2019 (announcing Merger), October 24, 2019, | |
Registration Statements on Form 8-A | | | Filed December 9, 1997[Two | |
(In thousands except per share data and ratios) | | | Nine months ended September 30, | | | Years Ended December 31, | | ||||||||||||||||||||||||||||||||||||
| 2019 | | | 2018 | | | 2018 | | | 2017 | | | 2016 | | | 2015 | | | 2014 | | |||||||||||||||||||||||
Noninterest operating expenses | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest expenses (GAAP) | | | | $ | 276,757 | | | | | $ | 257,676 | | | | | $ | 345,289 | | | | | $ | 347,149 | | | | | $ | 266,848 | | | | | $ | 233,055 | | | | | $ | 226,580 | | |
Amortization of intangibles | | | | | (11,994) | | | | | | (13,780) | | | | | | (18,155) | | | | | | (16,941) | | | | | | (5,479) | | | | | | (3,663) | | | | | | (4,287) | | |
Acquisition expenses | | | | | (7,789) | | | | | | 769 | | | | | | 769 | | | | | | (25,986) | | | | | | (1,706) | | | | | | (7,037) | | | | | | (123) | | |
Litigation settlement | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | (2,800) | | |
Total adjusted noninterest expenses (non-GAAP) | | | | $ | 256,974 | | | | | $ | 244,665 | | | | | $ | 327,903 | | | | | $ | 304,222 | | | | | $ | 259,663 | | | | | $ | 222,355 | | | | | $ | 219,370 | | |
Efficiency ratio | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Adjusted noninterest expenses (non-GAAP) – numerator | | | | $ | 256,974 | | | | | $ | 244,665 | | | | | $ | 327,903 | | | | | $ | 304,222 | | | | | $ | 259,663 | | | | | $ | 222,355 | | | | | $ | 219,370 | | |
Fully tax-equivalent net interest income | | | | $ | 269,418 | | | | | $ | 260,951 | | | | | $ | 349,400 | | | | | $ | 325,090 | | | | | $ | 283,857 | | | | | $ | 260,824 | | | | | $ | 259,961 | | |
Noninterest revenues | | | | | 173,496 | | | | | | 169,841 | | | | | | 224,059 | | | | | | 202,423 | | | | | | 155,625 | | | | | | 123,299 | | | | | | 119,020 | | |
Acquired non-impaired loan accretion | | | | | (4,269) | | | | | | (6,083) | | | | | | (7,921) | | | | | | (5,888) | | | | | | (2,868) | | | | | | (2,256) | | | | | | (3,338) | | |
Insurance-related recovery | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | (950) | | | | | | 0 | | | | | | 0 | | |
Gain on sales of investment securities, net | | | | | (4,882) | | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 0 | | |
Unrealized gain on equity securities | | | | | (28) | | | | | | (722) | | | | | | (657) | | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 0 | | |
Loss on debt extinguishment | | | | | 0 | | | | | | 318 | | | | | | 318 | | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 0 | | |
Operating revenues (non-GAAP) – denominator | | | | $ | 433,735 | | | | | $ | 424,305 | | | | | $ | 565,199 | | | | | $ | 521,625 | | | | | $ | 435,664 | | | | | $ | 381,867 | | | | | $ | 375,643 | | |
Efficiency ratio (non-GAAP) | | | | | 59.2% | | | | | | 57.7% | | | | | | 58.0% | | | | | | 58.3% | | | | | | 59.6% | | | | | | 58.2% | | | | | | 58.4% | | |
Balance sheet data | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total assets (GAAP) | | | | $ | 11,597,297 | | | | | $ | 10,659,567 | | | | | $ | 10,607,295 | | | | | $ | 10,746,198 | | | | | $ | 8,666,437 | | | | | $ | 8,552,669 | | | | | $ | 7,489,440 | | |
Intangible assets | | | | | (840,685) | | | | | | (811,700) | | | | | | (807,349) | | | | | | (825,088) | | | | | | (480,844) | | | | | | (484,146) | | | | | | (386,973) | | |
Deferred taxes on intangible assets | | | | | 46,048 | | | | | | 46,882 | | | | | | 46,370 | | | | | | 48,419 | | | | | | 43,504 | | | | | | 39,724 | | | | | | 35,842 | | |
Total tangible assets (non-GAAP) | | | | $ | 10,802,660 | | | | | $ | 9,894,749 | | | | | $ | 9,846,316 | | | | | $ | 9,969,529 | | | | | $ | 8,229,097 | | | | | $ | 8,108,247 | | | | | $ | 7,138,309 | | |
Total common equity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Shareholders’ Equity (GAAP) | | | | $ | 1,840,421 | | | | | $ | 1,668,345 | | | | | $ | 1,713,783 | | | | | $ | 1,635,315 | | | | | $ | 1,198,100 | | | | | $ | 1,140,647 | | | | | $ | 987,904 | | |
Intangible assets | | | | | (840,685) | | | | | | (811,700) | | | | | | (807,349) | | | | | | (825,088) | | | | | | (480,844) | | | | | | (484,146) | | | | | | (386,973) | | |
Deferred taxes on intangible assets | | | | | 46,048 | | | | | | 46,882 | | | | | | 46,370 | | | | | | 48,419 | | | | | | 43,504 | | | | | | 39,724 | | | | | | 35,842 | | |
Total tangible common equity (non-GAAP) | | | | $ | 1,045,784 | | | | | $ | 903,527 | | | | | $ | 952,804 | | | | | $ | 858,646 | | | | | $ | 760,760 | | | | | $ | 696,225 | | | | | $ | 636,773 | | |
Net tangible equity-to-assets ratio | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total tangible common equity (non-GAAP) – numerator | | | | $ | 1,045,784 | | | | | $ | 903,527 | | | | | $ | 952,804 | | | | | $ | 858,646 | | | | | $ | 760,760 | | | | | $ | 696,225 | | | | | $ | 636,773 | | |
Total tangible assets (non-GAAP) – denominator | | | | $ | 10,802,660 | | | | | $ | 9,894,749 | | | | | $ | 9,846,316 | | | | | $ | 9,969,529 | | | | | $ | 8,229,097 | | | | | $ | 8,108,247 | | | | | $ | 7,138,309 | | |
Net tangible equity-to-assets ratio (non-GAAP) | | | | | 9.68% | | | | | | 9.13% | | | | | | 9.68% | | | | | | 8.61% | | | | | | 9.24% | | | | | | 8.59% | | | | | | 8.92% | | |
| | | Page | | |||
Article 1 | | | | | | | |
TRANSACTIONS AND TERMS OF MERGER | | | | | | | |
| | | | A-1 | | | |
| | | | A-1 | | | |
| | | | A-2 | | | |
| | | | A-2 | | | |
| | | | A-2 | | | |
| | | | A-2 | | | |
| | | | A-2 | | | |
| | | | A-2 | | | |
Article 2 | | | | | | | |
TREATMENT OF SECURITIES | | | | | | | |
| | | | A-2 | | | |
| | | | A-3 | | | |
| | | | A-5 | | | |
| | | | A-6 | | | |
| | | | A-6 | | | |
| | | | A-7 | | | |
Article 3 | | | | | | | |
REPRESENTATIONS AND WARRANTIES | | | | | | | |
| | | | A-7 | | | |
| | | | A-7 | | | |
| | | | A-23 | | | |
Article 4 | | | | | | | |
COVENANTS AND ADDITIONAL AGREEMENTS OF THE PARTIES | | | | | | | |
| | | | A-29 | | | |
| | | | A-30 | | | |
| | | | A-33 | | | |
| | | | A-33 | | | |
| | | | A-33 | | | |
| | | | A-34 | | | |
| | | | A-34 | | | |
| | | | A-34 | | | |
| | | | A-36 | | | |
| | | | A-36 | | | |
| | | | A-36 | | | |
| | | | A-36 | | | |
| | | | A-38 | | | |
| | | | A-38 | | | |
| | | | A-40 | | |
| | | Page | | |||
| | | | A-40 | | | |
| | | | A-41 | | | |
| | | | A-41 | | | |
| | | | A-42 | | | |
| | | | A-42 | | | |
| | | | A-42 | | | |
Article 5 | | | | | | | |
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE | | | | | | | |
| | | | A-42 | | | |
| | | | A-43 | | | |
| | | | A-44 | | | |
Article 6 | | | | | | | |
TERMINATION | | | | | | | |
| | | | A-44 | | | |
| | | | A-46 | | | |
| | | | A-47 | | | |
Article 7 | | | | | | | |
MISCELLANEOUS | | | | | | | |
| | | | A-47 | | | |
| | | | A-54 | | | |
| | | | A-54 | | | |
| | | | A-54 | | | |
| | | | A-54 | | | |
| | | | A-54 | | | |
| | | | A-55 | | | |
| | | | A-55 | | | |
| | | | A-55 | | | |
| | | | A-56 | | | |
| | | | A-56 | | | |
| | | | A-56 | | | |
| | | | A-56 | | | |
| | | | A-56 | | | |
LIST OF EXHIBITS | | | | | | | |
Exhibit Description | | | |||||
| | | | A-A-1 | | | |
| | | | A-B-1 | | | |
| | | | A-C-1 | | | |
| | | | A-D-1 | | |
| Adverse Recommendation Change | | | Section 4.12(c) | |
| Agreement | | | Preamble | |
| Anti-Corruption Laws | | | Section 3.2(h)(v) | |
| Anti-Money Laundering Laws | | | Section 3.2(h)(vi) | |
| Appraisal Rights | | | Section 2.3(a) | |
| Bank Merger | | | Recitals | |
| Bank Merger Agreement | | | Recitals | |
| Book-Entry Shares | | | Section 2.2(b) | |
| Capitalization Date | | | Section 3.2(c) | |
| Certificates of Merger | | | Section 1.4 | |
| Closing | | | Section 1.3 | |
| Closing Date | | | Section 1.3 | |
| Community | | | Preamble | |
| Community Bank | | | Recitals | |
| Community Disclosure Letter | | | Section 3.1 | |
| Community Fundamnetal Decisions | | | Section 5.3(a) | |
| Community Preferred Stock | | | Section 3.3(c) | |
| Community Regulatory Agreement | | | Section 3.3(f)(ii) | |
| Community Reports | | | Section 3.3(d)(ii) | |
| Continuing Employees | | | Section 4.14(a) | |
| CRA | | | Section 3.2(p) | |
| Delaware Secretary | | | Section 1.4 | |
| Delinquent Loans | | | Section 3.2(n)(ii) | |
| DGCL | | | Recitals | |
| Dissenting Shares | | | Section 2.3(a) | |
| Effective Time | | | Section 1.4 | |
| Exchange Agent | | | Section 2.2(a) | |
| Exchange Fund | | | Section 2.2(a) | |
| Expiration Date | | | Section 6.1(e) | |
| Fractional Share Consideration | | | Section 2.1(a) | |
| Indemnified Party | | | Section 4.16(a) | |
| IRS | | | Section 3.2(j)(i) | |
| Loans | | | Section 3.2(n)(i) | |
| Materially Burdensome Regulatory Condition | | | Section 4.8(h) | |
| Merger | | | Recitals | |
| Merger Consideration | | | Section 2.1(a) | |
| NYBCL | | | Recitals | |
| New York Secretary | | | Section 1.4 | |
| Per Share Cash Consideration | | | Section 2.1(a) | |
| Per Share Merger Consideration Value | | | Section 2.4(a) | |
| Per Share Stock Consideration | | | Section 2.1(a) | |
| Permitted Liens | | | Section 3.2(w) | |
| PIFI | | | Section 3.2(q)(i) | |
| Premium Cap | | | Section 4.16(b) | |
| Proposed Dissenting Shares | | | Section 2.3(a) | |
| Requisite Regulatory Approvals | | | Section 4.8(g) | |
| Sanctions | | | Section 3.2(h)(viii) | |
| Sanctioned Country | | | Section 3.2(h)(viii) | |
| Shareholder Support Agreement | | | Recitals | |
| Steuben | | | Preamble | |
| Steuben Bank | | | Recitals | |
| Steuben Certificates | | | Section 2.2(b) | |
| Steuben Directors’ Recommendation | | | Section 3.2(b)(ii) | |
| Steuben Disclosure Letter | | | Section 3.1 | |
| Steuben Financial Statements | | | Section 7.1 | |
| Steuben Owned Properties | | | Section 3.2(w) | |
| Steuben Real Property | | | Section 3.2(w) | |
| Steuben Regulatory Agreement | | | Section 3.2(h)(iv) | |
| Steuben Reports | | | Section 3.2(d)(ii) | |
| Steuben Shareholder Meeting | | | Section 4.5(a) | |
| Surviving Corporation | | | Section 1.1 | |
| Takeover Laws | | | Section 3.2(u) | |
| Termination Fee | | | Section 6.2(b) | |
| WARN | | | Section 3.2(i)(iii) | |
Grant Date | | | Number of Options | | | Exercise Price | | | Type (Incentive Stock Option (“ISO”) or Nonqualified Stock Option (“NQSO”)) | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | ||
| | | | | | | | | | |
| | | | COMMUNITY BANK SYSTEM, INC. | | |||
| | | | By: | | | /s/ Mark E. Tryniski | |
| | | | | | | Name: Mark E. Tryniski | |
| | | | | | | Title: President and Chief Executive Officer | |
| Signature | | | Title | | | Date | |
| /s/ Mark E. Tryniski Mark E. Tryniski | | | Director, President and Chief Executive Officer (Principal Executive Officer) | | | | |
| Joseph E. Sutaris | | | Treasurer and Chief Financial Officer (Principal Financial and Accounting Officer) | | | | |
| Brian R. Ace | | | Director | | | | |
| Mark J. Bolus | | | Director | | | | |
| Jeffrey L. Davis | | | Director | | | |
| Signature | | | Title | | | Date | |
| Neil E. Fesette | | | Director | | | | |
| Michael R. Kallet | | | Director | | | | |
| Kerrie D. MacPherson | | | Director | | | | |
| John Parente | | | Director | | | | |
| Raymond C. Pecor, III | | | Director | | | | |
| Sally A. Steele | | | Director and Chair of the Board of Directors | | | | |
| Eric E. Stickels | | | Director | | | | |
| John F. Whipple, Jr. | | | Director | | | |
| *By: /s/ Mark E. Tryniski Attorney-in-fact | |