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

• It's like a local Wells Fargo or Chase, but strictly focused on its specific community rather than nationwide operations.
• Think of it as a smaller, more community-focused version of a regional bank like PNC or Truist.
• It's like a neighborhood Bank of America, prioritizing local relationships and services.

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• Deposit Accounts: Offers various checking, savings, money market, and certificate of deposit accounts for individuals and businesses.
• Real Estate Loans: Provides mortgage loans for residential properties and commercial real estate loans.
• Commercial Loans: Extends loans and lines of credit to businesses for various operational and investment needs.
• Consumer Loans: Offers personal loans, auto loans, and home equity lines of credit to individuals.
• Treasury Management Services: Provides services such as online banking, bill pay, and merchant services to help businesses manage their finances.

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Community Financial System (symbol: CBU) is a bank holding company that provides banking and financial services. As a financial institution, CBU does not have "major customers" in the traditional sense of a few large corporations purchasing its products. Instead, its customer base is diverse and distributed among individuals and businesses within its operating communities.

The company primarily serves the following categories of customers:

• Individuals and Households: This category includes retail customers who utilize a range of personal banking services such as checking accounts, savings accounts, money market accounts, certificates of deposit (CDs), individual retirement accounts (IRAs), as well as various loan products like residential mortgages, home equity loans, auto loans, and personal loans.
• Small to Medium-Sized Businesses (SMBs): CBU provides financial solutions to local businesses, including commercial checking and savings accounts, treasury management services, business lines of credit, term loans for equipment or expansion, and commercial real estate loans. These businesses operate across various sectors within the bank's service areas.
• Commercial Real Estate Developers and Investors: The company also serves customers involved in commercial real estate, offering financing for the acquisition, development, and construction of commercial properties, as well as investment properties.

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Dimitar A. Karaivanov, President & Chief Executive Officer

Mr. Karaivanov was appointed President & Chief Executive Officer in January 2024. Prior to this role, he served as Chief Operating Officer since October 2022. Mr. Karaivanov joined Community Financial System, Inc. in June 2021 as Executive Vice President of Financial Services and Corporate Development. Before joining Community Financial System, he served as Managing Director in Lazard's Financial Institutions Group since June 2018, and spent more than a dozen years in investment banking at other financial services firms, beginning his career in public accounting. He has over 15 years of experience as an investment banker for banks, other financial institutions, and fintech companies.

Marya Burgio Wlos, Executive Vice President & Chief Financial Officer

Ms. Wlos joined Community Financial System, Inc. as Executive Vice President and Chief Financial Officer in March 2025. Previously, she served as Managing Director and COO of the Investment Bank at M&T Bank from January 2021. Her experience also includes serving as Head of Management Accounting, Finance at M&T Bank from September 2018 through January 2021, and Head of Trading Relationship Management at UBS Asset Management from November 2013 through August 2018. Prior to that, Ms. Wlos held various finance roles at Citadel LLC from April 2008 through September 2012 and at Bank of America from January 2007 to April 2008.

Maureen Gillan-Myer, Executive Vice President & Chief Human Resources Officer and Administration Officer

Ms. Gillan-Myer serves as the Executive Vice President and Chief Human Resources Officer and Administration Officer for Community Financial System.

Michael N. Abdo, Executive Vice President & General Counsel

Mr. Abdo was appointed Executive Vice President and General Counsel in July 2022. He has been with the Company since 2013, serving as Associate General Counsel and from January 2020 to July 2022 as Senior Vice President & Senior Associate General Counsel. Before joining Community Financial System in 2013, Mr. Abdo was an associate with Cadwalader Wickersham & Taft in New York City, focusing on commercial and financial service litigation.

Jeffrey Levy, Senior Vice President & Chief Banking Officer

Mr. Levy was appointed Chief Banking Officer in January 2024. His previous roles at Community Financial System include SVP, President of Commercial Banking (January 2022 to December 2023), SVP, Commercial Banking Sales Executive (June 2021 to December 2021), SVP, Regional President of Capital Region (June 2019 to June 2021), and SVP, Commercial Banking Team Leader (January 2018 to June 2019). Prior to joining the Company, he served as the EVP and President of Commercial Banking at NBT Bank, N.A. from December 2006 to August 2016. Mr. Levy is scheduled to retire effective December 31, 2025.

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Economic Conditions, Interest Rate Fluctuations, and Credit Risk

As a financial institution, Community Financial System's performance is highly sensitive to the overall health of the economy. Economic downturns can lead to an increase in loan defaults, a reduction in the demand for financial services, and could adversely affect asset quality. Furthermore, changes in interest rates pose a significant risk, as they can directly impact the company's net interest income and the valuation of its assets and liabilities. For instance, the company has faced "large unrealized losses on AFS securities" due to interest rate movements, which has negatively impacted its equity. Elevated organic loan growth, while indicating expansion, is also viewed cautiously by rating agencies as it could signal a higher risk appetite if sustained.

Regulatory Changes

The financial services industry is subject to extensive and evolving federal and state regulations. Changes in these laws and regulations can lead to increased compliance costs, restrict operations, or otherwise negatively impact CBU's profitability. Remaining compliant with a complex and dynamic regulatory landscape is an ongoing challenge for the company.

Technological Disruption and Cybersecurity Threats

The rapid pace of technological advancements presents a continuous risk to traditional banking models. A failure to adapt to new technologies and evolving customer expectations could result in a loss of market share and customers to more technologically advanced competitors. Additionally, as a provider of digital banking services, CBU is highly vulnerable to cyberattacks and data breaches. These threats can lead to the loss of sensitive customer data, disruption of operations, and significant financial and reputational damage. The company has implemented measures like annual cybersecurity training for employees to mitigate these risks.

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• The proliferation and increasing market share of **digital-first neobanks and fintech companies** that offer technologically advanced, mobile-centric banking experiences with often lower fees and greater convenience. These agile competitors are directly challenging traditional community banks like CBU for deposits, loans, and other financial services, appealing particularly to younger demographics and those prioritizing digital convenience over physical branches. This mirrors how Netflix's streaming model disrupted Blockbuster's physical rental business.
• The growing encroachment of **Big Tech companies** into financial services. Companies such as Apple, Google, and Amazon are leveraging their vast user bases, data analytics capabilities, and platform ecosystems to offer financial products like payment solutions, lending, and embedded finance, potentially disintermediating traditional banks from key customer relationships and revenue streams. This parallels how YouTube provided a direct, user-generated content platform that challenged traditional cable TV distribution.

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Community Financial System (CBU) operates in four main business lines: banking services, employee benefit services, insurance services, and wealth management services. The addressable market sizes for these services, primarily within the United States, are as follows:

• Banking Services (U.S.):
  • For Retail Banking, the market size in the United States is valued at approximately $0.87 trillion (USD 870 billion) in 2025. It is projected to reach $1.08 trillion by 2030, growing at a compound annual growth rate (CAGR) of 4.22% during 2025-2030.
  • For Commercial Banking, the U.S. market size is estimated at $732.5 billion in 2025 and is forecasted to reach $915.45 billion by 2030, reflecting a 4.56% CAGR.
  • For the broader Regional Banks industry in the U.S., the market size is $406.5 billion in 2025. Community Bank, N.A., CBU's banking subsidiary, primarily operates in Upstate New York, Northeastern Pennsylvania, Vermont, and Western Massachusetts, with over $16 billion in assets.
• Employee Benefit Services (U.S.):
  • The market size for Human Resources & Benefits Administration in the U.S. is projected to be $88.9 billion in 2025. The Benefits Administration Service market is also forecasted to increase by $144.7 billion between 2023 and 2028. Community Financial System's subsidiary, Benefit Plans Administrative Services, Inc., provides these services on a national scale.
• Insurance Services (U.S.):
  • The market size for Insurance Brokers & Agencies in the U.S. is estimated at $261.7 billion in 2025. Community Financial System's OneGroup NY, Inc. subsidiary is a top 68 U.S. insurance agency.
• Wealth Management Services (U.S.):
  • The U.S. Wealth Management market, measured by assets under management (AUM), is extraordinarily vast. Global assets under management reached $162 trillion in 2025, with the United States holding 54.2% of this total, implying a U.S. AUM of approximately $87.8 trillion in 2025. Another estimate indicates the U.S. wealth management market had $64.4 trillion in AUM in 2024, expected to reach $87.35 trillion by 2028. Community Financial System offers comprehensive financial planning, trust administration, and wealth management services through its Nottingham Financial Group operating unit, serving much of the East Coast.

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Expected Drivers of Future Revenue Growth for Community Financial System (CBU)

Community Financial System (CBU) is anticipated to drive future revenue growth over the next 2-3 years through several strategic initiatives and ongoing business segment performance:

1. Diversified Growth Across Business Segments: CBU's strategy involves sustained growth across its four core business lines: banking, employee benefit services, insurance services, and wealth management. Management has emphasized "strong and diversified revenue growth" and "market share gains across all of our businesses" as core differentiators, particularly noting optimism for the insurance and wealth businesses. The company's non-interest revenue, representing 38% of operating revenue, is a significant contributor to this diversification.
2. Strategic Expansion through Acquisitions and Branch Network Growth: CBU is actively expanding its market presence, especially in the Northeast, through strategic acquisitions and the opening of new branches. The company completed a major branch acquisition, strengthening its market presence in strategic locations, and anticipates closing seven Santander branches in early November 2025 to accelerate its retail strategy. This expansion is aimed at enhancing market reach and driving future earnings growth.
3. Organic Loan Growth and Net Interest Income Expansion: The banking segment is a significant driver, with record net interest income contributing to overall revenue growth. The company has reported a sixth consecutive quarter of net interest income expansion, with a 13.7% increase year-over-year in Q3 2025. Management expects continued organic loan growth and anticipates expanding its net interest margin.
4. Investment in Facilities, Talent, and Technology: CBU is making a substantial investment of approximately $100 million into facilities, talent, and technology across all its businesses. These strategic capital deployments are intended to enhance operational efficiency and support future growth initiatives, ultimately contributing to increased revenue.
5. Growth of Insurance and Wealth Management Services: Community Financial System has highlighted the sustained growth in diversified, "subscription-like" revenues from its insurance and wealth management segments. A strategic investment in Leap Holdings, Inc., for example, is specifically aimed at enhancing its insurance services business, indicating a focus on expanding these high-return areas. Management is optimistic about deploying capital at high tangible returns in these businesses.

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Share Repurchases

• Community Financial System, Inc. announced an equity buyback plan on December 19, 2024.
• From July 1, 2025, to September 30, 2025, the company repurchased 206,054 shares for $11.94 million under this plan.
• Significant quarterly stock buybacks include $34.51 million for March 31, 2024, and $11.42 million for June 30, 2024.

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.

Outbound Investments

• Community Financial System is an experienced acquirer.
• Strategic expansions have included a minority stake in Leap Holdings Inc. and the acquisition of Santander branches.
• The company's capital allocation strategy includes aggressively pursuing opportunities to deploy capital at high tangible returns, particularly in its insurance and wealth businesses.

Capital Expenditures

• Annual free cash flow, calculated as operating cash flow minus capital expenditures, was $221.57 million for fiscal year 2024.
• The company has focused on investing in technology solutions for customers and improving operating efficiency across all lines of business.
• Investments include new commercial and cash management platforms, as well as new and improved digital banking tools.