Here are 1-3 brief analogies for Community Financial System (CBU):

• CBU is like a KeyBank, but with a highly integrated insurance agency and extensive employee benefits administration for its local communities.
• CBU is like a local Fidelity Investments or Charles Schwab, but also operating as a traditional community bank.

• Deposit Accounts: Offers various accounts including checking, savings, money market, and time deposits for retail, commercial, and municipal customers.
• Lending Products: Provides a range of loans such as consumer mortgages, general purpose commercial and industrial loans, installment loans, and home equity products.
• Wealth Management & Investment Services: Delivers comprehensive financial planning, investment advisory, asset management, and offers various investment alternatives like stocks, bonds, and mutual funds.
• Employee Benefit Services: Manages and consults on various employee benefit plans, including contribution plan administration, retirement plan administration, and actuarial services.
• Insurance Services: Operates as a full-service agency providing personal and commercial lines of insurance along with other risk management products.
• Cash Management & Treasury Services: Offers specialized services for businesses, including cash management, investment, and treasury operations.

Major Customers of Community Financial System (CBU)

• Retail Customers: Individuals who utilize services such as checking, savings, and money market accounts, consumer mortgages, personal installment loans, home equity products, wealth management, and personal insurance.
• Commercial Customers: Businesses that use services including commercial and industrial loans, commercial property mortgages, cash management, investment and treasury services, commercial insurance, and employee benefit services.
• Municipal Customers: Government entities and public institutions that access various banking and financial services tailored to their specific needs.

Dimitar A. Karaivanov, President and Chief Executive Officer

Dimitar A. Karaivanov became the President and CEO of Community Financial System, Inc. on January 1, 2024. He initially joined the company in June 2021 as Executive Vice President of Financial Services and Corporate Development. In October 2022, he was promoted to Chief Operating Officer, taking on responsibility for the company's banking operations. Before joining Community Financial System, he spent 15 years on Wall Street, including serving as a Managing Director and member of the Financial Institutions Group at Lazard Middle Market since June 2018. His career prior to Lazard involved more than a decade in investment banking at various leading financial services firms, following his start in public accounting.

Marya Burgio Wlos, Executive Vice President and Chief Financial Officer

Marya Burgio Wlos was appointed Executive Vice President and Chief Financial Officer of Community Financial System, Inc., effective March 31, 2025. She succeeded Joseph Sutaris, who retired in July 2025. Prior to her role at Community Financial System, Ms. Wlos served as Managing Director and COO Investment Bank at M&T Bank from January 2021. Her previous experience includes serving as Head of Management Accounting, Finance at M&T Bank from September 2018 to January 2021, and Head of Trading Relationship Management, UBS Asset Management at UBS AG from November 2013 to August 2018. She also held various finance positions at Citadel LLC from April 2008 to September 2012 and at Bank of America from January 2007 to April 2008.

Joseph F. Serbun, Chief Banking Officer

Joseph F. Serbun was appointed Chief Banking Officer of Community Bank System, Inc. (now Community Financial System, Inc.) in March 2020. He also serves as Chief Credit Officer and Senior Vice President.

Paul Neveu, Chief Executive Officer of BPAS

Paul Neveu has served as the Chief Executive Officer of Benefit Plan Administrative Services, Inc. (BPAS), a subsidiary of Community Financial System, since January 2021. He previously held the role of President of BPAS from January 2015 to December 2020, and prior to that, he was Senior Vice President and National Director of Sales from January 2010 to December 2014. Mr. Neveu joined BPAS in July 2005. Before his tenure at BPAS, he worked for Federated Hermes as Vice President, Sales and retirement plan wholesaler from July 1996 to June 2005.

Michael T. Cerminaro, President and Chief Executive Officer of Community Bank Wealth Management

Michael T. Cerminaro was appointed President and Chief Executive Officer of Community Bank's Wealth Management division in June 2023. He brings over 30 years of experience to this role. Before joining Community Bank, Mr. Cerminaro most recently served as Market Head for the Northeast/Mid-Atlantic Region and Head of US Ultra-High Net Worth for HSBC Bank USA.

1. Interest Rate Risk and Net Interest Margin (NIM) Compression: As a financial institution, Community Financial System is highly susceptible to interest rate fluctuations. Sustained high interest rates or significant changes in the interest rate environment can lead to increased funding costs and heightened competition for deposits, which may compress the company's net interest margin over time. Although Community Financial System has shown resilience in managing its NIM, this remains a structural headwind for regional banks, and any significant reversal in the trend of lower funding costs could erode its NIM expansion. Changes in checking, savings, or money market account deposit balances also directly affect the net interest margin.

2. Economic Downturn and Credit Risk: An economic downturn, particularly in Community Financial System's primary operating regions of Upstate New York and Pennsylvania, could negatively impact the quality of its loan portfolio. While the company is noted for its conservative credit culture and stable asset quality, general economic weakness or issues related to commercial real estate exposure, a concern for regional banks, could lead to increased non-performing assets and higher provisions for credit losses. There is also a risk of potential losses should the bank need to sell portions of its longer-duration investment portfolio (available-for-sale securities) in a stressed market.

3. Intense Competition and Geographic Concentration: Community Financial System operates in a highly competitive environment, facing challenges from larger national and regional banks, as well as emerging FinTech companies, all vying for deposits and loan opportunities. The company's significant geographic concentration in mature markets across Upstate New York, Northeastern Pennsylvania, Vermont, and Western Massachusetts limits its organic loan growth potential. While its diversified revenue streams from non-banking services provide some mitigation, competition remains a constant pressure on market share and profitability.

The clear emerging threats to Community Financial System (CBU) stem from the rapid growth and increasing sophistication of digital-first financial technology (fintech) companies and the expansion of large technology firms into financial services. These entities offer banking, lending, investment, and insurance products and services often with lower operational overheads, superior digital user experiences, and greater convenience, directly challenging CBU's traditional branch-based model and diverse offerings. This includes:

• Neobanks and Digital Lenders: Online-only banks and specialized digital lenders can attract customers with competitive rates, lower fees, and streamlined digital processes for deposits, personal loans, and mortgages, eroding CBU's core banking and lending customer base.
• Robo-advisors and Digital Investment Platforms: Automated investment services and commission-free trading apps offer accessible and often lower-cost alternatives to CBU's broker-dealer, investment advisory, and wealth management services, appealing to a broad spectrum of investors.
• Insurtech Companies: Digital-native insurance providers leverage technology to offer personalized, efficient, and often more competitive insurance products, directly threatening CBU's full-service insurance agency business.
• Big Tech Entering Finance: Large technology companies with massive user bases are increasingly offering financial products (e.g., digital wallets, credit cards, and savings accounts), leveraging their ecosystem advantages to compete with traditional banks in areas such as payments, consumer lending, and deposits.

Community Bank System, Inc. (CBU) is expected to drive future revenue growth over the next 2-3 years through several strategic initiatives and core business strengths:

1. Strategic Expansion Through Branch Network Growth and Acquisitions: The company is actively expanding its footprint by opening new branches and integrating acquired branches, such as the seven former Santander branches. This expansion, particularly into under-tapped markets, is anticipated to lead to mid-single-digit growth in loan balances. Additionally, the acquisition of ClearPoint Federal Bank & Trust is poised to position CBU for future growth in the death care trust administration market, further diversifying its revenue streams.
2. Sustained Growth in Loan and Deposit Balances within the Banking Segment: Community Bank System projects loan balances to grow between 3.5% and 6% and deposit balances to increase by 2% to 3% in 2026. This organic growth in both consumer and business lending, coupled with deposit inflows, directly contributes to an expanding asset base and, consequently, higher revenue generation.
3. Expansion of Net Interest Income through Favorable Margin Management: A key driver for the banking business is the expected 8% to 12% growth in net interest income for 2026. This growth is largely attributed to favorable balance sheet repricing dynamics and expanding net interest margins, driven by higher interest-earning asset yields and stable funding costs. The company has seen a consistent expansion in its net interest margin over recent quarters.
4. Continued Performance and Growth in Fee-Based Services: CBU's diversified portfolio of fee-based businesses, including Employee Benefit Services, Insurance Services, and Wealth Management, represents a significant portion of its total operating revenues (approximately 40% from non-interest income). These segments have demonstrated strong performance, with Employee Benefit Services showing a 10% quarter-over-quarter growth in pretax income in Q4 2025 and Insurance Services achieving 8% year-over-year top-line growth in 2025. Wealth Management Services also recorded a 15% year-over-year growth in operating pretax income in 2025. Noninterest revenues are forecast to grow between 4% and 8% in 2026.

Share Repurchases

• A new stock repurchase program was authorized on December 17, 2025, for up to 2,633,000 shares of common stock for the twelve-month period beginning January 1, 2026.
• Under the previous program, which expired December 31, 2025, the company repurchased 206,054 shares during 2025.
• The company repurchased 206,054 shares for $11.94 million between July 1, 2025, and September 30, 2025.

Share Issuance

• The number of outstanding shares decreased from 54.45 million in 2021 to 52.91 million as of November 2025, indicating a net reduction in shares over this period.
• In Q4 2025, there were 53 million shares outstanding, which was a 0.1% increase from the prior quarter.

Outbound Investments

• Community Financial System acquired seven branches from Santander Bank in Allentown, Pennsylvania, expanding its presence in the Greater Lehigh Valley region. This acquisition contributed to a 7% year-over-year increase in deposits by Q4 2025.
• The company agreed to acquire ClearPoint Federal Bank & Trust, which specializes in death care trust administration, an acquisition expected to close in Q2 2026 to expand wealth management services.
• A strategic minority stake was taken in Leap Holdings Inc. to enhance its insurance services business and expand high-return areas.

Capital Expenditures

• Capital expenditures totaled $23.0 million in Q4 2025, used to fund long-term assets and infrastructure, marking a 30.3% increase from the prior quarter.
• In the last 12 months (as of Q4 2025 / early 2026), capital expenditures were -$52.72 million.
• The company has focused investments on technology solutions for customers and improving operating efficiency across all business lines, including new commercial and cash management platforms and enhanced digital banking tools.