Community Financial System (CBU) investor relations material

Executive summary

• Achieved another record quarter with net income of $61.3 million ($1.16 per share), up 19.6% year-over-year and 7.4% sequentially, supported by strong net interest income, robust fee performance, and managed recurring expenses.

• Operating net income was $61.5 million ($1.16 per share), up 11.5% year-over-year, with continued momentum in client and talent acquisition, new product launches, and above-market results in wealth management.

• Insurance revenues underperformed due to lower contingencies, soft premium markets, and organic challenges, but the M&A pipeline is robust for future growth.

• Significant deposit growth from de novo branches and Santander acquisition, and completed ClearPoint and Santander branch acquisitions, supporting loan growth and wealth management expansion.

• Assets under management in wealth and retirement now rival banking assets, highlighting diversification.

Financial highlights

• GAAP EPS of $1.16, up 19.6% year-over-year and 7.4% sequentially; record operating EPS and PPNR per share.

• Total revenues reached $223.2 million, up 12.0% year-over-year and 4.6% sequentially.

• Net interest income reached $139.1 million, up 11.5% year-over-year and 3.3% sequentially, marking nine consecutive quarters of growth.

• Noninterest revenues were $84.0 million, up 12.8% year-over-year and 6.9% sequentially; operating non-interest revenues increased 6.4% year-over-year, representing 36% of total operating revenues.

• Return on assets was 1.40%, up from 1.24% a year ago; return on equity was 12.10%, up from 11.21% a year ago; efficiency ratio improved to 61.7% from 64.8% a year ago.

Outlook and guidance

• Full-year 2026 guidance: 5%-6% loan growth, 3%-4% deposit growth, 10%-11% net interest income growth, 6%-7% non-interest revenue growth.

• Provision for credit losses expected at $20M-$25M; net interest margin to exit 2026 in low to mid 3.5% range.

• Core non-interest expenses projected at $550M-$555M, up 7%-8% from 2025, including costs from recent acquisitions.

• Effective tax rate anticipated between 23%-24%.

• Management expects acceleration across all business lines in the second half of the year, focusing on expanding operating leverage.