Community Financial System, Inc.

Welcome to the Community Bank System Third Quarter 2020 Earnings Conference Call. Please note that this presentation contains forward-looking statements within the provisions of the Private Security Litigation Reform Act of 1995 that are based on current expectations, estimates, and projections about the industry, markets, and economic environment in which the company operates. Such statements involve risks and uncertainties that could cause actual results to differ materially from the results discussed in these statements. These risks are detailed in the company's annual report and Form 10-K filed with the Securities and Exchange Commission. Today's call presenters are Mike Trenisky, President and Chief Executive Officer, and Joseph Sutaris, Executive Vice President and Chief Financial Officer. They will be joined by Joseph Servin, Executive Vice President and Chief Banking Officer, for the question and answer session. Gentlemen, you may begin.

Thank you, Jason.

Good morning, everyone. Thank you as well for joining our Q3 conference call. We hope you and your families are well. This quarter was certainly different than the last, with less day-to-day and sometimes minute-to-minute focus on COVID, PPP, loan deferrals, and the student acquisition, and we seem to have settled into a reasonably effective operating cadence. Operating earnings for the quarter were a bit better than we might have expected given the yield curve and muted credit demand, but our non-banking businesses had a strong quarter. In fact, year-to-date, they're up 4% on the top line and over 6% on the bottom line, so a very solid performance for those businesses. The quarter was also very good for mortgage banking, credit, deposit growth, consumer deposit fees, and the subent acquisition was also very additive to our performance. The only real negative in the quarter, notwithstanding the litigation accrual that Joe will discuss further, was credit demand, excluding mortgage lending. The total loan book was off about 1%, with slight declines in every business. The mortgage business was quite strong. We sold over $100 million of lower rate, conforming production into the secondary market, where premiums are, at the present moment, Very generous. So overall, we're satisfied with the quarter and with current operating trends given the environment. As we head into the last quarter of the year and into 2021, we will continue to be mindful and focused on the potential headwinds, including credit, the economic environment, and interest rates. Despite the forward headwinds, we think we're in pretty good shape to capitalize on opportunities that we expect to lie ahead.