The Bank Slate


Community Bank System in NY repositions its balance sheet

Community Bank System in Syracuse, N.Y., has repositioned its securities portfolio.


The $15.8 billion-asset company said in a press release that it sold $786 million of debt securities at an after-tax loss of about $39.6 million.


Community Bank System said it used proceeds from the sale to pay off wholesale borrowings with a spread differential that was about 320 basis points higher than the securities it sold.


The company said it expects to recoup the loss from the sales in about two years.


The loss should be accretive to Tier 1 leverage and tangible equity-to-assets ratios by roughly 20 basis points. The repositioning should be substantially accretive to earnings, net interest margin and return on assets in future periods.


Finally, the company said the securities sale should provide it with over $1.3 billion of investment securities cash flows in 2023.

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