Download PDF

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.

Show Full description

1.b. Last Insights on CBU

Community Financial System, Inc.'s recent performance was positively driven by its expanding network, as evident from its accelerated growth in the Greater Lehigh Valley, PA. The company's acquisition of seven branches from Santander Bank in the Allentown, Pennsylvania area, is expected to enhance its presence. Additionally, the company's 33rd consecutive year of dividend increases, demonstrates its commitment to shareholder value. The CEO's positive outlook on the state of lending and consumer confidence also contributed to the company's positive momentum.

1.c. Company Highlights

2. Community Bank System Posts Strong Q3 Earnings with Diversified Revenue Growth

Community Bank System, Inc. reported a robust third quarter in 2025, with GAAP earnings per share of $1.04, up 25.3% year-over-year, while operating earnings per share reached a record $1.09. Total operating revenues were $206.8 million, a 9.4% increase from the prior year, driven by a 13.7% rise in net interest income to $128.2 million. The company's net interest margin expanded to 3.33%, a positive sign for the banking business. As Dimitar Karaivanov, President and CEO, highlighted, the company's diversified revenue growth remains a core differentiator, with market share gains across all businesses.

Publication Date: Oct -21

📋 Highlights
  • Record Operating Earnings:: Q3 2025 operating EPS reached $1.09, up 23.9% YoY, driven by diversified revenue growth and market share gains.
  • Revenue Growth:: Total operating revenues hit $206.8 million, a 9.4% increase YoY, with net interest income rising 13.7% to $128.2 million.
  • High Pretax Returns:: Insurance services led with 63% pretax tangible returns, followed by employee benefit services at 62% and wealth management at 48%.
  • Strong Liquidity:: Readily available liquidity totaled $6.6 billion, supporting strategic investments and a 76.5% loan-to-deposit ratio with stable asset quality.
  • Margin Expansion Guidance:: Net interest margin improved to 3.33%, with funding costs at 1.17% and expected margin expansion in Q4 due to Santander deposit deal and predictable cash flows.

Business Performance

The company's various businesses performed well, with Employee Benefit Services recognized as one of the top five record keepers nationwide, Insurance Services ranked as the 68th largest property and casualty broker, and Wealth Management Services recognized as a five-star Wealth Management team. The banking business was also recognized as one of the top 20 banks in the country, underscoring the company's strong market position.

Capital Deployment and Shareholder Returns

The company deployed approximately $100 million in cash capital in transactions that align with strategic priorities, demonstrating its commitment to growth. Additionally, the company bought back approximately 206,000 shares at a price below intrinsic value, returning capital to shareholders. The pretax tangible returns for the quarter were impressive, with insurance services at 63%, Employee Benefit Services at 62%, Wealth Management Services at 48%, and banking and corporate at 25%.

Outlook and Valuation

Looking ahead, the company expects fourth-quarter loan growth to be around $20-30 million, in line with the third quarter, and reiterated its 4-5% growth guidance for the year. With a Price-to-Tangible Book Value (P/TBV) ratio of 1.57, the stock appears reasonably valued. The Dividend Yield stands at 3.29%, providing a relatively attractive return for income investors. Analysts estimate next year's revenue growth at 9.4%, and with the company's strong track record, it is well-positioned to deliver on this expectation.

Margin and Expense Trends

The company's net interest margin is expected to remain stable, with funding costs at 1.17%, which is anticipated to stay or decrease. The Santander deposit deal is expected to be accretive, and the margin is anticipated to expand in Q4. On the expense front, Mariah Loss noted a $1 million increase in total expenses quarter-over-quarter, excluding Santander, due to prepaying some contribution commitments and compensation adjustments.

3. NewsRoom

Card image cap

Community Financial System: NIM Expansion Continues To Power Healthy Earnings Growth

Nov -13

Source: seekingalpha.com

Card image cap

Community Bank, N.A. Completes Acquisition of Seven Former Santander Bank, N.A.

Nov -10

Source: businesswire.com

Card image cap

MCNC celebrates 45 Years of Transformation

Nov -06

Source: prnewswire.com

Card image cap

Community Bank N.A. Sells 1,438 Shares of NVIDIA Corporation $NVDA

Nov -06

Source: defenseworld.net

Card image cap

Teacher Retirement System of Texas Sells 2,187 Shares of Community Financial System, Inc. $CBU

Nov -06

Source: defenseworld.net

Card image cap

Community Bank N.A. Acquires 1,529 Shares of Amazon.com, Inc. $AMZN

Nov -05

Source: defenseworld.net

Card image cap

Community Financial System, Inc. (CBU) Q3 2025 Earnings Call Transcript

Oct -21

Source: seekingalpha.com

Card image cap

Here's What Key Metrics Tell Us About Community Financial (CBU) Q3 Earnings

Oct -21

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

Stock-Card
Commerce Bancshares

A-Score: 6.1/10

Value: 5.2

Growth: 5.7

Quality: 6.8

Yield: 4.0

Momentum: 6.0

Volatility: 9.0

1-Year Total Return ->

View Full Report
Stock-Card
Third Federal

A-Score: 5.7/10

Value: 1.5

Growth: 4.8

Quality: 3.4

Yield: 10.0

Momentum: 5.0

Volatility: 9.7

1-Year Total Return ->

View Full Report
Stock-Card
Community Bank System

A-Score: 5.7/10

Value: 4.9

Growth: 5.0

Quality: 6.5

Yield: 6.0

Momentum: 4.0

Volatility: 7.7

1-Year Total Return ->

View Full Report
Stock-Card
Glacier Bancorp

A-Score: 5.5/10

Value: 4.3

Growth: 3.9

Quality: 7.4

Yield: 6.0

Momentum: 5.0

Volatility: 6.3

1-Year Total Return ->

View Full Report
Stock-Card
First Financial Bankshares

A-Score: 5.4/10

Value: 3.9

Growth: 5.8

Quality: 8.1

Yield: 4.0

Momentum: 3.0

Volatility: 7.7

1-Year Total Return ->

View Full Report
Stock-Card
ServisFirst Bank

A-Score: 5.2/10

Value: 4.2

Growth: 7.1

Quality: 6.4

Yield: 3.0

Momentum: 4.0

Volatility: 6.3

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

59.07$

Current Price

59.07$

Potential

-0.00%

Expected Cash-Flows