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1. Company Snapshot

1.a. Company Description

Community Bank System, Inc.operates as the bank holding company for Community Bank, N.A. that provides various banking and other financial services to retail, commercial, and municipal customers.It operates through three segments: Banking, Employee Benefit Services, and All Other.


The company offers various deposits products, such as checking, savings, and money market deposit accounts, as well as time deposits.It also provides loans, including consumer mortgages; general purpose commercial and industrial loans, and mortgages on commercial properties; paycheck protection program loans; installment loans that are originated through selected dealerships and are secured by automobiles, marine, and other recreational vehicles; personal installment loans and lines of credit for consumers; and home equity products.In addition, the company offers broker-dealer and investment advisory; cash management, investment, and treasury services; asset management; and employee benefit services, as well as operates as a full-service insurance agency that offers personal and commercial lines of insurance, and other risk management products and services.


Further, it provides contribution plan administration, employee benefit trust, collective investment fund, retirement plan administration, fund administration, transfer agency, actuarial and benefit consulting, VEBA/HRA, and health and welfare consulting services.Additionally, the company offers wealth management, retirement planning, higher educational planning, fiduciary, risk management, trust, and personal financial planning services; and investment alternatives, including stocks, bonds, mutual funds, and advisory products, as well as master recordkeeping services.As of January 24, 2022, it operated approximately 215 customer facilities across Upstate New York, Northeastern Pennsylvania, Vermont, and Western Massachusetts.


Community Bank System, Inc.was founded in 1866 and is headquartered in DeWitt, New York.

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1.b. Last Insights on CBU

Community Financial System, Inc. has demonstrated positive momentum, driven by strategic expansion and financial growth. The company's acquisition of ClearPoint Federal Bank & Trust significantly enhances its wealth management services. Additionally, its net interest margin (NIM) continues to expand, fueling healthy earnings growth. A stable credit quality with low net charge-offs and delinquencies further supports its financial standing. With the completion of the acquisition of seven former Santander Bank, N.A. branches, Community Bank, N.A. solidifies its market presence.

1.c. Company Highlights

2. Community Bank System's Strong Q4 2025 Earnings: A Closer Look

Community Bank System reported robust financial performance in Q4 2025, with total operating revenues reaching $215.6 million, driven by record net interest income in the banking business. Net interest income increased by 11.2% year-over-year to $133.4 million, while the fully tax-equivalent net interest margin expanded six basis points to 3.39%. The company's earnings per share (EPS) came in at $1.07, slightly below estimates of $1.13. Despite this, the company's operating earnings growth in 2025 reached 16%, driven by significant investments in high-return businesses.

Publication Date: Feb -14

📋 Highlights
  • Operating Earnings Growth:: 16% growth in 2025 despite significant investments in high-return businesses.
  • Record Revenue and Net Interest Income:: Q4 total operating revenue reached $215.6M, driven by 11.2% YoY net interest income ($133.4M) and a 6-basis-point net interest margin expansion to 3.39%.
  • Loan and Deposit Growth:: Ending loans grew 5% YoY (1.9% QoQ), while deposits increased 7% YoY, supported by Santander branch integration.
  • Credit Quality Metrics:: Nonperforming loans and charge-offs stable, but 30-89 day delinquencies rose 10 bps; allowance for credit losses covered over six times annual charge-offs.
  • 2026 Guidance:: Expects 8-12% net interest income growth, 4-8% noninterest revenue growth, and $20-25M provision for credit losses.

Revenue Growth and Margin Expansion

The company's operating noninterest revenues increased 8% compared to the prior year's fourth quarter and 4.4% from the linked third quarter. The growth in revenues was driven by the company's diversified revenue profile, with a strong performance across all businesses. As Dimitar Karaivanov, President and CEO, noted, "We're experiencing tailwinds in the banking business... and we're investing in organic and inorganic opportunities on the fee income side."

Loan and Deposit Growth

The company's loan and deposit growth were also noteworthy, with ending loans increasing 1.9% during the fourth quarter and 5% from one year prior. Total ending deposits increased 7% from one year prior, driven by growth in all regions and the Santander branch acquisition. The company's allowance for credit losses at the end of 2025 represented over six times the company's net charge-offs during the year, indicating a strong credit quality.

Outlook and Valuation

For 2026, the company expects 3.5% to 6% growth in loan balances, 2% to 3% growth in deposit balances, 8% to 12% growth in net interest income, and four to 8% growth in noninterest revenues. Analysts estimate next year's revenue growth at 8.6%. With a Price-to-Tangible Book Value (P/TBV) ratio not directly available, we can look at the Price-to-Book Ratio (P/B) at 1.92, which is relatively moderate. The Dividend Yield stands at 2.8%, providing a decent return for income-seeking investors.

Conclusion on Valuation Metrics

Considering the company's financial performance and growth prospects, the current valuation metrics appear reasonable. The P/E Ratio of 17.67 is slightly above the industry average, but justified by the company's strong earnings growth. The ROE of 11.35% indicates a good return on equity, supporting the company's ability to generate profits from shareholder equity.

3. NewsRoom

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Reviewing Greenpro Capital (NASDAQ:GRNQ) & Community Financial System (NYSE:CBU)

Feb -14

Source: defenseworld.net

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Analyzing Community Financial System (NYSE:CBU) & Acadian Asset Management (NYSE:AAMI)

Feb -12

Source: defenseworld.net

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Community Financial System, Inc. Appoints Brenda M. Hall as New Independent Director

Feb -11

Source: businesswire.com

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Head to Head Survey: Community Financial System (NYSE:CBU) and NewtekOne (NASDAQ:NEWT)

Feb -01

Source: defenseworld.net

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Community Financial System Q4 Earnings Call Highlights

Jan -28

Source: defenseworld.net

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Community Financial System: Still Offering Growth At A Reasonable Price

Jan -27

Source: seekingalpha.com

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Community Financial System, Inc. (CBU) Q4 2025 Earnings Call Transcript

Jan -27

Source: seekingalpha.com

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Community Financial (CBU) Reports Q4 Earnings: What Key Metrics Have to Say

Jan -27

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.44%)

6. Segments

Banking

Expected Growth: 5.5%

Community Bank System, Inc.'s 5.5% growth is driven by strategic acquisitions, expanding commercial lending, and a strong deposit franchise. Additionally, the bank's focus on digital transformation, cost savings initiatives, and a favorable interest rate environment contribute to its growth momentum.

Employee Benefit Services

Expected Growth: 5.8%

The 5.8% growth in Employee Benefit Services from Community Bank System, Inc. is driven by increasing demand for retirement plan administration, health savings account management, and benefits consulting services. Additionally, strategic acquisitions, expansion of existing client relationships, and a growing need for compliance and regulatory support contribute to this growth.

All Other

Expected Growth: 5.2%

The 5.2% growth in All Other segment of Community Bank System, Inc. is driven by increased trust services revenue, higher insurance brokerage fees, and growth in debit card fees. Additionally, the bank's strategic investments in digital banking and customer acquisition initiatives have contributed to the segment's expansion.

Eliminations

Expected Growth: 0.0%

With 0.0% growth, Eliminations from Community Bank System, Inc. is stagnant. This is likely due to a lack of strategic acquisitions, flat loan growth, and minimal expansion into new markets. Additionally, intense competition in the banking industry and regulatory pressures may be hindering growth.

7. Detailed Products

Consumer Banking

Provides personal banking services, including checking and savings accounts, credit cards, personal loans, and mortgages.

Commercial Banking

Offers financial solutions for businesses, including cash management, commercial lending, and treasury management services.

Wealth Management

Provides investment, trust, and insurance services to individuals, families, and businesses.

Insurance

Offers a range of insurance products, including life, disability, and long-term care insurance.

Mortgage Banking

Provides mortgage lending services for residential and commercial properties.

Treasury Management

Offers cash management and treasury services to help businesses optimize their cash flow and manage risk.

8. Community Bank System, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Community Bank System, Inc. operates in a highly competitive industry, with many substitutes available to customers. However, the bank's strong brand recognition and customer loyalty help to mitigate the threat of substitutes.

Bargaining Power Of Customers

Community Bank System, Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the bank's strong relationships with its customers help to reduce the threat of customer bargaining power.

Bargaining Power Of Suppliers

Community Bank System, Inc. has a diverse supplier base, which reduces the bargaining power of individual suppliers. The bank's strong financial position also gives it negotiating power with its suppliers.

Threat Of New Entrants

The banking industry has high barriers to entry, including regulatory hurdles and capital requirements. This makes it difficult for new entrants to enter the market, reducing the threat of new entrants to Community Bank System, Inc.

Intensity Of Rivalry

The banking industry is highly competitive, with many established players competing for market share. Community Bank System, Inc. faces intense competition from larger banks and fintech companies, which increases the intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 31.17%
Debt Cost 3.95%
Equity Weight 68.83%
Equity Cost 7.31%
WACC 6.26%
Leverage 45.29%

11. Quality Control: Community Bank System, Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Third Federal

A-Score: 5.9/10

Value: 1.6

Growth: 5.3

Quality: 3.9

Yield: 10.0

Momentum: 5.5

Volatility: 9.3

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First Financial Bankshares

A-Score: 5.6/10

Value: 4.3

Growth: 5.8

Quality: 8.2

Yield: 5.0

Momentum: 2.0

Volatility: 8.3

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Community Bank System

A-Score: 5.4/10

Value: 4.5

Growth: 5.1

Quality: 6.5

Yield: 6.0

Momentum: 2.5

Volatility: 7.7

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Commerce Bancshares

A-Score: 5.3/10

Value: 4.4

Growth: 5.7

Quality: 7.1

Yield: 4.0

Momentum: 1.5

Volatility: 9.0

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ServisFirst Bank

A-Score: 4.9/10

Value: 4.3

Growth: 7.1

Quality: 6.6

Yield: 3.0

Momentum: 2.0

Volatility: 6.3

1-Year Total Return ->

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Glacier Bancorp

A-Score: 4.8/10

Value: 3.9

Growth: 3.9

Quality: 7.4

Yield: 6.0

Momentum: 1.5

Volatility: 6.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

64.99$

Current Price

64.99$

Potential

-0.00%

Expected Cash-Flows