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01/11 16:02
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary indicates several concerns: wind-down of BaaS, conservative loan growth estimates, increased credit loss provisioning, and elevated non-interest expenses. The Q&A reveals management's cautious outlook and avoidance of direct answers on key financial metrics, adding to uncertainty. Despite some positive aspects like improved capital ratios and a successful equity offering, the overall sentiment is negative due to financial losses, policy uncertainties, and restructuring impacts.
Net Losses Available to Common Shareholders (Q4) $66,100,000 (compared to a loss of $26,000,000 for 2024) due to a $100,200,000 pretax loss associated with the securities repositioning.
Net Interest Margin (NIM) (Q4) 2.91%, up 2 basis points from Q3; Full year NIM of 2.86% was on the low end of the guided range.
Total Deposits (Year End 2024) $5,100,000,000, a decline of $202,000,000 from September 30, primarily due to seasonal reductions in public depositor accounts.
Commercial Loan Growth (Q4) Up 3.8% during the quarter and 4.5% during the full year 2024.
Provision for Credit Losses (Q4) $6,500,000, compared to $3,100,000 in Q3, attributed to higher loan growth and increases in net charge offs.
Allowance for Credit Losses on Loans to Total Loans Increased 6 basis points to 1.07% compared to September 30.
Non-Interest Income (Q4) $8,800,000, down from $9,100,000 in Q3 and $8,900,000 in the year ago period, impacted by restructuring and sale of the insurance subsidiary.
Quarterly Non-Interest Expense (2025 Projection) Approximately $35,000,000, representing a 5% increase in core annual operating expenses versus 2024.
Effective Tax Rate (2025 Projection) Expected to be between 17% and 19%.
Total Cash Flow (Next 12 Months) Projected at $1,200,000,000 from loan and securities portfolios combined.
Common Equity Tier 1 Ratio Increased 60 basis points from September 30 and 145 basis points from year end 2023.
Tangible Common Equity (TCE) Ratio Increased 147 basis points from September 30 and 240 basis points from year end 2023.
Accumulated Other Comprehensive Loss (Year End) $52,600,000, down from $102,000,000 at September 30, reflecting balance sheet restructuring.
Commercial Loan Growth: Commercial loan growth was strong, up 3.8% during the quarter and 4.5% during the full year 2024.
New CRE Production: New CRE production of $74,300,000 in the Q4 was led by multifamily, office, hospitality and land development.
BaaS Offering Wind Down: We remain committed to core in market deposit gathering with relationship based accounts and then the wind down of our BaaS offering.
Syracuse Market Development: The Syracuse Rochester Buffalo Corridor was recognized as a tech hub by the federal government for the region's coordinated focus on semiconductor manufacturing.
Balance Sheet Restructuring: We sold $653,500,000 of low yielding securities and reinvested the proceeds into higher yielding agency wrapped securities.
Net Interest Margin: Margin expansion continued, up 2 basis points from the 3rd quarter to 2.91% in the 4th quarter.
Efficiency Ratio Target: We are targeting an efficiency ratio below 60% for 2025.
Capital Raise: Market reception was very positive to our common equity offering, which was more than 4 times oversubscribed.
New Director Appointment: We were pleased to announce the appointment of a new Director, Angela Panzarella.
Securities Loss: Recorded a pretax loss of $100,200,000 associated with the securities repositioning, impacting net losses available to common shareholders for Q4.
Deposit Decline: Deposits totaled $5,100,000,000 at year end 2024, declining $202,000,000 from September 30, primarily due to seasonal reductions in public depositor accounts.
BaaS Offering Wind Down: BaaS deposits were approximately $100,000,000 at year end 2024, expected to outflow in the first half of the year as partners identify new banking providers.
Loan Growth Uncertainty: Conservative loan growth estimates of 1% to 3% due to increased competition and uncertainty regarding proposed policy changes from Washington.
Credit Loss Provisioning: Provision for credit losses increased to $6,500,000 in Q4, attributed to higher loan growth and increases in net charge offs.
Regulatory and Economic Factors: Uncertainty about the impacts of proposed policy changes on business operations, supply, and labor costs, influencing conservative growth modeling.
Non-Interest Income Volatility: Projected quarterly non-interest income of $9,500,000 to $10,000,000 in 2025, with potential volatility due to restructuring and market conditions.
Pension Plan Settlement Charges: Elevated Q4 expenses included a $1,300,000 pension plan settlement accounting charge, with potential for future charges but not at the same level.
FDIC Assessment Expense: FDIC assessment expense expected to remain elevated through 2025 due to recent securities loss.
Equity Offering: Successfully completed an equity offering generating net proceeds of $108,500,000.
Securities Restructuring: Repositioned the investment securities portfolio, selling $653,500,000 of low yielding securities and reinvesting in higher yielding agency wrapped securities.
Capital Position: Stronger capital position expected to drive sustainable and profitable growth.
Loan Growth Strategy: Focus on credit disciplined commercial business loan growth in 2025.
Technology Investment: Investing in people, processes, and technology to enhance performance.
2025 Return on Average Assets: Targeting at least 110 basis points.
2025 Return on Average Equity: Targeting at least 11.25%.
2025 Efficiency Ratio: Expecting an efficiency ratio below 60%.
2025 Net Interest Margin: Expecting between 345 and 355 basis points.
2025 Loan Growth: Expecting low single digit growth of 1%.
2025 Non-Interest Income: Projecting quarterly non-interest income of $9,500,000 to $10,000,000.
2025 Non-Interest Expense: Expecting approximately $35,000,000 per quarter.
2025 Effective Tax Rate: Expected to be between 17% and 19%.
2025 Net Charge Offs: Budgeting between 25 to 35 basis points of average loans.
Equity Offering: The company successfully completed an equity offering generating net proceeds of $108,500,000.
Shareholder Value: The company intends to thoughtfully deploy the remaining capital to support shareholder value.
Sub Debt Call: The company may elect to call a portion of its subordinated debt that is set to reprice this year.
The earnings call presents a mixed picture. Strong financial metrics like net income growth and improved net interest margin are offset by concerns over nonperforming loans, economic uncertainties, and increased medical costs. The Q&A reveals cautious optimism about loan growth but lacks clarity on share buybacks. The company's affirmation of 2025 guidance and share repurchase plans provides some positive sentiment, but risks related to the economic environment and compliance costs temper expectations, leading to a neutral stock price prediction.
The earnings call presents a mixed picture: strong net income growth and margin expansion are offset by deposit outflows, competitive lending pressures, and rising noninterest expenses. The Q&A reveals management's confidence in Upstate New York's loan growth, but challenges remain in the Mid-Atlantic and consumer lending segments. While financial performance is solid, flat deposit growth and increased expenses raise concerns. Given these factors, the stock price is likely to remain stable, resulting in a neutral prediction.
The earnings call presents a mixed outlook. Financial performance is strong with increased net income and improved margins. However, guidance remains cautious due to macroeconomic uncertainties, interest rate volatility, and competitive pressures. The Q&A highlights management's uncertainty about loan growth, despite improvements in non-interest income and a stable credit discipline. The positive aspects are counterbalanced by potential risks, leading to a neutral sentiment. The equity offering and share repurchase program provide some support, but not enough to drive a positive outlook.
The earnings call summary indicates several concerns: wind-down of BaaS, conservative loan growth estimates, increased credit loss provisioning, and elevated non-interest expenses. The Q&A reveals management's cautious outlook and avoidance of direct answers on key financial metrics, adding to uncertainty. Despite some positive aspects like improved capital ratios and a successful equity offering, the overall sentiment is negative due to financial losses, policy uncertainties, and restructuring impacts.
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