Community Bank System Inc. in Syracuse, N.Y., is planning to raise $50 million in a stock sale primarily to fund its acquisition of 19 upstate New York branches from rival First Niagara Financial Group Inc.

First Niagara, of Buffalo, is divesting dozens of branches as part of its plan to acquire 195 branches from HSBC and over the last 10 days has announced deals to sell 64 branches to three banks. The $5.8 billion-asset company Community Bank is acquiring 16 HSBC branches and three First Niagara branches, with a total of $955 million of deposits, for a blended deposit premium of 3.22%. The deal also would include roughly $218 million of loans.

Community Bank System has not yet disclosed the terms of the stock sale, but it said in a Securities and Exchange Commission filing Friday that the proceeds would be used to fund the acquisition and bolster its overall capital levels. The company intends to offer its underwriters the option to purchase up to 15% of additional shares to cover over-allotments. RBC Capital Markets LLC is the lead underwriter and Raymond James & Associates Inc. and Sandler O’Neill & Partners LP are co-managing the offering.

Community Bank System also reported fourth-quarter and year-end earnings on Friday. For the quarter, the company earned a record $19 million, up 19.5% from the same period a year earlier, and for the year it earned $73.1 million, up 15.5% from 2010. The results were aided, in part, by an increase in earning assets following its April acquisition of the Wilber National Bank in Oneonta, N.Y.

Community Bank System’s shares were trading at $28.53 late Monday, up 0.6% from Friday’s close.

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