Community Financial System (CBU) investor relations material

Executive summary

• Achieved net income of $61.3 million ($1.16 per share) in Q2 2026, up 19.6% year-over-year and 7.4% sequentially, marking the fifth consecutive quarter of record results.

• Growth was driven by higher net interest income, robust fee performance in banking, employee benefits, and wealth management, and managed recurring expenses.

• Insurance revenues underperformed due to lower contingencies, soft premium markets, and organic challenges.

• Continued momentum in client and talent acquisition, new product launches, and above-market results in wealth management, supported by the ClearPoint acquisition.

• Significant deposit growth from de novo branches and Santander acquisition, supporting loan growth and diversification, with assets under management in wealth and retirement now rivaling banking assets.

Financial highlights

• Net interest income reached $139.1 million in Q2 2026, up 11.5% year-over-year and 3.3% sequentially, marking nine consecutive quarters of growth.

• Noninterest revenues for Q2 were $84.0 million, up 12.8% year-over-year; operating non-interest revenues represented 36% of total operating revenues.

• Net interest margin was 3.46%, up 19 basis points year-over-year and four basis points sequentially, driven by lower funding costs.

• Total non-interest expenses for Q2 were $137.7 million, up 6.7% year-over-year, with increases tied to salaries, benefits, and branch expansion.

• Total loans were $11.28 billion, up 7.3% year-over-year; total deposits were $14.71 billion, up 7.4% year-over-year, though down 1.1% sequentially due to seasonal municipal outflows.

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 continued growth in noninterest revenues and net interest income, supported by organic loan and deposit growth and recent acquisitions.