Community Bank System said fourth-quarter profits fell 1.1 percent from last year, as acquisition expenses and a $2.5 million charge to settle a class-action lawsuit detracted from higher loan and fee revenues that would have otherwise resulted in earnings growth.

The DeWitt-based parent of Community Bank, which has 34 branches in Western New York, said it earned $18.8 million, or 47 cents per share, down from $19 million, or 51 cents per share, a year ago.

Results from the current quarter included $500,000 in acquisition-related expenses, from the bank’s purchase of 16 former HSBC Bank USA branches and three First Niagara Financial Group branches on July 20 and Sept. 7, respectively. The two purchases added $160 million in loans and $800 million in deposits for Community Bank.

Also during the quarter, the company agreed to settle a class-action lawsuit involving the order in which retail debit card transactions are processed and how that impacts overdraft fees assessed on consumers. The bank said the lawsuit was “similar to other actions filed against more than 100 other financial institutions in the United States over the last three years.”

Community Bank claimed it had “considerable” defenses against the claims, but the settlement was “a superior outcome for shareholders when measured against the cost and the staff resources required for litigation,” the bank said.

For the full year, the bank reported $77.1 million in profits, up 5.4 percent from 2011.

Total revenues for the quarter rose 11.2 percent to $86.2 million, as net interest income from taking deposits and making loans rose 8.8 percent to $60 million. That stemmed from an $897 million, or 15.5 percent, increase in average earning assets, to $6.67 billion, including $536 million in new investments and $361 million in new loans that the bank either originated or acquired.