Community Financial System (NYSE: CBU) posts higher Q1 2026 EPS and margin
Rhea-AI Filing Summary
Community Financial System, Inc. reported strong first quarter 2026 results, with net income of $57.2 million and diluted earnings per share of $1.08, up from $0.93 a year earlier and $1.03 in the prior quarter. The company generated total revenues of $213.3 million, compared with $196.2 million in first quarter 2025, as record quarterly net interest income and organic loan growth supported continued net interest margin expansion.
Net interest income rose to $134.7 million, while net interest margin improved to 3.43%, up from 3.21% a year earlier. Noninterest revenues contributed 36.8% of total revenues. Total ending loans reached $11.1 billion and total ending deposits were $14.9 billion, both higher than a year ago.
Asset quality remained solid, with nonperforming loans at 0.48% of loans and net charge-offs at 0.11% of average loans. The Tier 1 leverage ratio was 9.20%, and the quarterly dividend was $0.47 per share. The company also highlighted its pending all-cash ~$40 million acquisition of ClearPoint Federal Bank & Trust, which has over $1.5 billion of assets under management and a 3-year revenue CAGR of 9.7%.
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Insights
Q1 2026 shows double-digit EPS growth, margin expansion, solid credit quality and a targeted wealth management acquisition.
Community Financial System, Inc. delivered first quarter 2026 net income of $57.2 million and diluted EPS of $1.08, a 16.1% increase versus the prior year’s $0.93. Total revenues reached $213.3 million, up 8.7% year over year, driven mainly by record net interest income.
Net interest income rose to $134.7 million, with net interest margin improving to 3.43% from 3.21% a year earlier, reflecting loan growth and easing funding cost pressure. Credit metrics remained favorable: net charge-offs were 0.11% of average loans and nonperforming loans were 0.48% of loans, while the Tier 1 leverage ratio stood at 9.20%, supporting the $0.47 quarterly dividend.
The announced all-cash acquisition of ClearPoint Federal Bank & Trust for approximately $40 million adds over $1.5 billion of assets under management and a 3-year revenue CAGR of 9.7% to the wealth management franchise. Future filings around the expected closing in Q2 2026 may provide more detail on ClearPoint’s contribution to fee-based revenue and capital deployment.
8-K Event Classification
Key Figures
Key Terms
Net interest margin financial
Operating pre-tax, pre-provision net revenue financial
Non-GAAP financial
Tier 1 leverage ratio financial
Allowance for credit losses financial
Tangible book value financial
Earnings Snapshot
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
| If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ¨ |
| Item 2.02 | Results of Operations and Financial Condition. |
On April 29, 2026, Community Financial System, Inc. announced its results of operations for the first quarter ended March 31, 2026. The public announcement was made by means of a news release, the text of which is furnished as Exhibit 99.1.
The information in this Form 8-K, including Exhibit 99.1 attached hereto, is being furnished under Item 2.02 and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
The following exhibit is being furnished pursuant to Item 2.02 above.
| 99.1 | Press Release, dated April 29, 2026, issued by Community Financial System, Inc. |
| 104 | Cover Page Interactive Data File (embedded in the cover page formatted in Inline XBRL) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Community Financial System, Inc. | |||
| By: | /s/ Marya Burgio Wlos | ||
| Name: Marya Burgio Wlos | |||
| Title: Executive Vice President and Chief Financial Officer | |||
Dated: April 29, 2026
Exhibit Index
| Exhibit Number | Description |
| 99.1 | Press Release, dated April 29, 2026, issued by Community Financial System, Inc. |
| 104 | Cover Page Interactive Data File (embedded in the cover page formatted in Inline XBRL) |
Exhibit 99.1
 |
News Release For further information, please contact: |
| 333 Butternut Drive, Syracuse, N.Y. 13214 |
Marya Burgio Wlos, EVP & Chief Financial Officer Office: (315) 299-2946 |
Community Financial System, Inc. Reports First Quarter 2026 Results
SYRACUSE, N.Y. — April 29, 2026 — Community Financial System, Inc. (the “Company”) (NYSE: CBU) reported first quarter 2026 results. The results are available within the “News” section of the Company's investor relations website or directly at https://communityfinancialsystem.com/Q1-2026-CBU-Earnings-Release.
Company management will host a conference call at 11:00 a.m. (ET) today, April 29, 2026, to discuss the first quarter 2026 results. The conference call can be accessed via webcast at https://app.webinar.net/qplYz5Bw2x6 or via dial-in at 1-833-630-0464 (United States) or 1-412-317-1809 (International).
About Community Financial System, Inc.
Community Financial System, Inc. is a diversified financial services company that is focused on four main business lines – banking services, employee benefit services, insurance services and wealth management services. Its banking subsidiary, Community Bank, N.A., is among the country’s 100 largest banking institutions with over $17 billion in assets and operates approximately 200 customer facilities across Upstate New York, Northeastern Pennsylvania, Vermont, Western Massachusetts and Southern New Hampshire. The Company’s Benefit Plans Administrative Services, Inc. subsidiary is a leading provider of employee benefits administration, trust services, collective investment fund administration, and actuarial consulting services to customers on a national scale. The Company’s OneGroup NY, Inc. subsidiary is a top 68 U.S. insurance agency. The Company also offers comprehensive financial planning, trust administration and wealth management services through its Nottingham Financial Group operating unit. The Company is listed on the New York Stock Exchange and the Company’s stock trades under the symbol CBU. For more information about the Company and each of its four main business lines visit https://communityfinancialsystem.com.
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News Release For further information, please contact: |
| 333 Butternut Drive, Syracuse, N.Y. 13214 |
Marya Burgio Wlos, EVP & Chief Financial Officer Office: (315) 299-2946 |
Community Financial System, Inc. Reports First Quarter 2026 Results
SYRACUSE, N.Y. — April 29, 2026
| Community Financial System, Inc. (the “Company”) (NYSE: CBU) reported first quarter 2026 net income of $57.2 million, or $1.08 per share and operating net income of $61.1 million, or $1.15 per share. |
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“Our Company delivered another quarter of strong core performance with operating diluted earnings per share1 of $1.15, up 17.3% year-over-year and representing our fourth consecutive quarter of record results,” commented Dimitar A. Karaivanov, President and CEO.
“Our organic momentum continues across all businesses and is also supported by margin and market value tailwinds. During the quarter we achieved an operating return on assets1 of 1.42% while continuing to actively invest in organic and inorganic growth initiatives. At the same time, we remain focused on expanding operating leverage and ensuring that recent investments translate fully into bottom-line results. With our diversified financial services businesses, high-quality balance sheet and disciplined capital deployment, we are well positioned to continue to scale the Company and continue to expect strong earnings growth through the remainder of 2026.” |
| First Quarter 2026 Performance | Quarter-over- Quarter Increase (Decrease) |
Year-over-Year Increase (Decrease) | ||||||
| Dollars in thousands, except per share data | 1st Qtr 2026 |
4th Qtr 2025 |
1st Qtr 2025 |
$ | % | $ | % | |
| Operating Performance | Diluted Earnings Per Share | $1.08 | $1.03 | $0.93 | $0.05 | 4.9% | $0.15 | 16.1% |
| Operating Diluted Earnings Per Share1 | 1.15 | 1.12 | 0.98 | 0.03 | 2.7% | 0.17 | 17.3% | |
| Operating Pre-Tax, Pre-Provision Net Revenue Per Share1 | 1.61 | 1.58 | 1.40 | 0.03 | 1.9% | 0.21 | 15.0% | |
| Return Metrics | Return on Assets | 1.33% | 1.26% | 1.22% | - | 0.07% | - | 0.11% |
| Operating Return on Assets1 | 1.42% | 1.38% | 1.28% | - | 0.04% | - | 0.14% | |
| Return on Equity | 11.51% | 11.04% | 11.28% | - | 0.47% | - | 0.23% | |
| Operating Return on Equity1 | 12.30% | 12.08% | 11.84% | - | 0.22% | - | 0.46% | |
| 1 |
| First Quarter 2026 Performance (continued) | Quarter-over- Quarter Increase (Decrease) |
Year-over-Year Increase (Decrease) | ||||||
| Dollars in thousands, except per share data | 1st Qtr 2026 |
4th Qtr 2025 |
1st Qtr 2025 |
$ | % | $ | % | |
| Revenues | Total Revenues | $213,286 | $215,451 | $196,248 | ($2,165) | (1.0%) | $17,038 | 8.7% |
| Total Operating Revenues (FTE)1 | 214,537 | 216,431 | 196,897 | (1,894) | (0.9%) | 17,640 | 9.0% | |
| Noninterest Revenues | 78,574 | 82,026 | 76,036 | (3,452) | (4.2%) | 2,538 | 3.3% | |
| Total Operating Noninterest Revenues1 | 78,975 | 82,131 | 75,791 | (3,156) | (3.8%) | 3,184 | 4.2% | |
| Noninterest Revenues/Total Revenues | 36.8% | 38.1% | 38.7% | - | (1.3%) | - | (1.9%) | |
| Operating Noninterest Revenues/Operating Revenues (FTE)1 | 36.8% | 37.9% | 38.5% | - | (1.1%) | - | (1.7%) | |
| Net Interest Income and Margin | Net Interest Income | $134,712 | $133,425 | $120,212 | $1,287 | 1.0% | $14,500 | 12.1% |
| Net Interest Margin | 3.43% | 3.37% | 3.21% | - | 0.06% | - | 0.22% | |
| Net Interest Margin (FTE)1 | 3.45% | 3.39% | 3.24% | - | 0.06% | - | 0.21% | |
| Balance Sheet and Funding | Total Ending Loans | $11,131,184 | $10,949,757 | $10,421,141 | $181,427 | 1.7% | $710,043 | 6.8% |
| Total Ending Deposits | 14,870,122 | 14,387,085 | 13,892,047 | 483,037 | 3.4% | 978,075 | 7.0% | |
| Cost of Total Deposits | 1.10% | 1.15% | 1.17% | - | (0.05%) | - | (0.07%) | |
| Cost of Funds | 1.20% | 1.27% | 1.33% | - | (0.07%) | - | (0.13%) | |
| Risk Metrics | Annualized Loan Net Charge-Offs | 0.11% | 0.09% | 0.13% | - | 0.02% | - | (0.02%) |
| Tier 1 Leverage Ratio | 9.20% | 9.21% | 9.29% | - | (0.01%) | - | (0.09%) | |
| Loan-to-deposit ratio | 74.9% | 76.1% | 75.0% | - | (1.2%) | - | (0.1%) | |
| Non-owner occupied and multifamily commercial real estate (“CRE”) / total bank-level regulatory capital | 194% | 191% | 191% | - | 3% | - | 3% | |
1Non-GAAP Measure. For more information on Non-GAAP measures, refer to “Non-GAAP Measures” section along with the Quarterly GAAP to Non-GAAP Reconciliations included within the “Summary of Financial Data (unaudited)” tables below.
| 2 |
| First Quarter 2026 Business Segment Results2 | Quarter-over-Quarter Increase (Decrease) |
Year-over-Year Increase (Decrease) | ||||||
| Dollars in thousands | 1st Qtr 2026 |
4th Qtr 2025 |
1st Qtr 2025 |
$ | % | $ | % | |
| Banking and Corporate | Net interest income | $133,550 | $132,412 | $119,439 | $1,138 | 0.9% | $14,111 | 11.8% |
| Provision for credit losses | 5,636 | 4,979 | 6,690 | 657 | 13.2% | (1,054) | (15.8%) | |
| Segment noninterest revenues | 21,979 | 23,556 | 19,033 | (1,577) | (6.7%) | 2,946 | 15.5% | |
| Other segment expenses | 90,282 | 92,522 | 85,509 | (2,240) | (2.4%) | 4,773 | 5.6% | |
| Adjusted income before income taxes | $59,611 | $58,467 | $46,273 | $1,144 | 2.0% | $13,338 | 28.8% | |
| Adjusted return on assets3 | 1.41% | 1.37% | 1.16% | - | 0.04% | - | 0.25% | |
| Adjusted return on equity3 | 14.49% | 14.35% | 12.60% | - | 0.14% | - | 1.89% | |
| Adjusted return on tangible equity1, 3 | 26.01% | 25.56% | 23.70% | - | 0.45% | - | 2.31% | |
| Employee Benefit Services | Segment revenues | $36,311 | $38,391 | $34,116 | ($2,080) | (5.4%) | $2,195 | 6.4% |
| Segment expenses | 21,984 | 22,394 | 20,676 | (410) | (1.8%) | 1,308 | 6.3% | |
| Adjusted income before income taxes | $14,327 | $15,997 | $13,440 | ($1,670) | (10.4%) | $887 | 6.6% | |
| Adjusted return on assets3 | 23.25% | 26.81% | 23.45% | - | (3.56%) | - | (0.20%) | |
| Adjusted return on equity3 | 26.73% | 30.17% | 26.51% | - | (3.44%) | - | 0.22% | |
| Adjusted return on tangible equity1, 3 | 52.45% | 61.16% | 56.04% | - | (8.71%) | - | (3.59%) | |
| Insurance Services | Segment revenues | $12,331 | $12,475 | $14,270 | ($144) | (1.2%) | ($1,939) | (13.6%) |
| Segment expenses | 10,482 | 11,546 | 10,162 | (1,064) | (9.2%) | 320 | 3.1% | |
| Adjusted income before income taxes | $1,849 | $929 | $4,108 | $920 | 99.0% | ($2,259) | (55.0%) | |
| Adjusted return on assets3 | 6.88% | 3.51% | 23.16% | - | 3.37% | - | (16.28%) | |
| Adjusted return on equity3 | 8.05% | 4.01% | 30.55% | - | 4.04% | - | (22.50%) | |
| Adjusted return on tangible equity1, 3 | 16.92% | 8.26% | 184.01% | - | 8.66% | - | (167.09%) | |
| Wealth Management Services | Segment revenues | $11,063 | $10,198 | $10,486 | $865 | 8.5% | $577 | 5.5% |
| Segment expenses | 7,156 | 7,007 | 6,851 | 149 | 2.1% | 305 | 4.5% | |
| Adjusted income before income taxes | $3,907 | $3,191 | $3,635 | $716 | 22.4% | $272 | 7.5% | |
| Adjusted return on assets3 | 37.18% | 30.87% | 38.78% | - | 6.31% | - | (1.60%) | |
| Adjusted return on equity3 | 42.07% | 34.36% | 43.67% | - | 7.71% | - | (1.60%) | |
| Adjusted return on tangible equity1, 3 | 48.24% | 38.50% | 49.94% | - | 9.74% | - | (1.70%) | |
1Non-GAAP Measure. For more information on Non-GAAP measures, refer to “Non-GAAP Measures” section along with the Quarterly GAAP to Non-GAAP Reconciliations included within the “Summary of Financial Data (unaudited)” tables below.
2Refer to the “Summary of Financial Data (unaudited)” tables below for reconciliations of the reported measure of segment profit (adjusted income before income taxes) results to Company results and calculations of the segment adjusted return metrics. The reported measure of segment profit, the reported segment assets and the reported segment equity that are used in the calculations of the segment adjusted return metrics are presented in conformity with ASC 280: Segment Reporting and follow the methodology disclosed in the Company’s 2025 Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 27, 2026.
3The segment adjusted return metrics are reported on a pre-tax basis.
| 3 |
Results of Operations
The Company reported first quarter 2026 net income of $57.2 million, or $1.08 per share. This compares to net income of $49.6 million, or $0.93 per share, for the first quarter of 2025. The $0.15 increase in earnings per share was primarily driven by increases in net interest income and noninterest revenues and a decrease in the provision for credit losses, partially offset by increases in noninterest expenses and income taxes. Comparatively, the Company’s earnings per share increased $0.05 from $1.03 per share for the linked fourth quarter of 2025, primarily due to decreases in noninterest expenses and income taxes and an increase in net interest income, partially offset by a decrease in noninterest revenues and an increase in the provision for credit losses.
Net Interest Income and Net Interest Margin
The Company’s record quarterly net interest income reflected diminishing funding cost pressures and organic loan growth, supporting continued margin expansion.
| · | Net interest income in the first quarter of 2026 was $134.7 million, up $14.5 million, or 12.1%, compared to the first quarter of 2025, and up $1.3 million, or 1.0%, from the fourth quarter of 2025. |
| · | Net interest margin for the first quarter of 3.43% and fully tax-equivalent net interest margin, a non-GAAP measure, of 3.45%, increased 22 basis points and 21 basis points, respectively, from the first quarter of 2025. These increases were primarily the result of a lower cost of interest-bearing liabilities and a higher yield on interest-earning assets. |
| · | The yield on interest-earning assets increased 9 basis points to 4.60% over the prior year’s first quarter primarily driven by higher loan yields. |
| · | The cost of interest-bearing liabilities decreased 16 basis points from 1.75% in the first quarter of 2025 to 1.59% in the first quarter of 2026, driven by a 12 basis point decrease in the average interest-bearing deposit rate. |
| · | On a linked quarter basis, net interest margin and fully tax-equivalent net interest margin, a non-GAAP measure, both increased by 6 basis points. The yield on interest-earning assets was consistent, while the cost of funds decreased 7 basis points. This included a 9 basis point decrease in the cost of interest-bearing liabilities driven by an 8 basis point decrease in the average interest-bearing deposit rate to 1.47%. Excluding the impact of the semiannual Federal Reserve Bank dividend recorded in the fourth quarter of 2025, the yield on interest-earning assets increased 2 basis points compared to the linked fourth quarter. |
Noninterest Revenues
The Company’s noninterest revenue streams generated 37% of total revenues in the first quarter.
| · | Banking noninterest revenues, comprised of deposit service and other banking fees and mortgage banking revenues, totaled $21.8 million for the first quarter of 2026, an increase of $2.7 million, or 14.2%, from the first quarter of 2025 and a decrease of $1.8 million, or 7.6%, from the fourth quarter of 2025. The increase from the first quarter of 2025 was primarily comprised of higher deposit service fees and customer interest rate swap fee revenues. The decrease from the fourth quarter of 2025 reflected a $1.6 million one-time income distribution received from a limited partnership investment in the prior quarter. |
| · | Employee benefit services revenues for the first quarter of 2026 were $34.6 million, an increase of $2.0 million, or 6.0%, in comparison to the first quarter of 2025 and a decrease of $2.0 million, or 5.4%, from the fourth quarter of 2025. The increase from the prior year’s first quarter was largely driven by revenue growth in the recordkeeping and third-party administration services business line due in part to revenue growth from acquisitions and higher average market values of assets under administration. The decrease from the linked fourth quarter was reflective of seasonally lower third-party administration fees. |
| · | Insurance services revenues for the first quarter of 2026 were $12.6 million, which represents a $1.6 million, or 11.4%, decrease versus the prior year’s first quarter and a $0.1 million, or 0.8%, decrease from the fourth quarter of 2025. The decrease from the prior year’s first quarter was due to changes in the timing of collections of contingent commission revenues. |
| · | Wealth management services revenues for the first quarter of 2026 totaled $10.3 million, an increase of $0.5 million, or 4.8%, from the first quarter of 2025, reflective of higher average market values of assets under management and an increase of $0.8 million, or 7.9%, from the fourth quarter of 2025, reflective of certain seasonally higher Trust fees. |
| 4 |
Noninterest Expenses and Income Taxes
The Company continues to focus on managing expenses consistent with its organic growth strategies and scale objectives, while evaluating efficiency opportunities and the enhancement of operating leverage in all lines of business.
| · | The Company recorded $133.0 million in total noninterest expenses in the first quarter of 2026, compared to $125.3 million of total noninterest expenses in the prior year’s first quarter. The $7.7 million, or 6.2% increase between the periods was primarily driven by higher salaries and employee benefits expenses, occupancy and equipment expenses and data processing and communications expenses. |
| · | Salaries and employee benefits expenses increased $3.9 million, or 5.1%, from the first quarter of 2025, primarily due to incremental costs associated with acquisitions and de novo bank branches opened between the periods, along with the impact of annual merit-based increases. |
| · | Occupancy and equipment expenses increased $2.2 million, or 17.2%, from the prior year’s first quarter, driven by incremental costs associated with the opening of de novo bank branches and regional headquarters and the Santander Bank, N.A. (“Santander”) branch acquisition. |
| · | Data processing and communications expenses increased $1.7 million, or 10.8%, from the first quarter of 2025 reflective of the Company’s continued investment in customer-facing and back-office technologies, including artificial intelligence applications and other workflow efficiency initiatives. |
| · | Acquisition expenses were $0.4 million in the first quarter of 2026 primarily related to the Company’s pending acquisition of Clearpoint Federal Bank & Trust. |
| · | The effective tax rate for the first quarter of 2026 was 23.3%, an increase from 22.8% in the first quarter of 2025 and a decrease from 24.3% in the fourth quarter of 2025. The increase from the first quarter of 2025 was primarily due to an increase in the amortization of certain income tax credit investments while the decrease from the fourth quarter of 2025 reflected an increase in tax benefits related to stock-based compensation activity. |
Financial Position and Liquidity
The Company’s financial position and liquidity profile remain strong, demonstrating the effectiveness of its proactive asset and liability management and prudent financial planning.
| · | The Company’s total assets were $17.74 billion at March 31, 2026, representing a $980.6 million, or 5.8%, increase from one year prior and a $441.6 million, or 2.6%, increase from the end of 2025. The increase in the Company’s total assets from one year prior was primarily driven by organic loan growth and the Santander branch acquisition, while the increase from the end of 2025 was primarily due to higher cash and cash equivalents balances reflective of seasonal inflows of governmental deposit balances. |
| · | At March 31, 2026, the Company’s readily available sources of liquidity totaled $6.83 billion, including unrestricted cash and cash equivalents balances of $557.4 million, unpledged investment securities totaling $1.76 billion, unused borrowing capacity at the Federal Home Loan Bank of New York of $1.62 billion and $2.89 billion of funding availability at the Federal Reserve Bank’s discount window. |
| · | The Company’s readily available sources of liquidity represent 248% of the Company’s estimated uninsured deposits, net of collateralized and intercompany deposits, at March 31, 2026. |
| · | Estimated insured deposits, net of collateralized and intercompany deposits, represent 81% of total ending deposits at March 31, 2026. |
Deposits and Funding
The Company continues to leverage its strong core deposit base, characterized by low funding costs, to support its financial operations.
| · | Ending deposits at March 31, 2026 of $14.87 billion were $483.0 million, or 3.4%, higher than the end of 2025 and were $978.1 million, or 7.0%, higher than one year prior. The growth from December 31, 2025 was primarily due to seasonal inflows of governmental deposit balances while the increase from one year prior was primarily driven by growth in consumer and business deposit balances, including the $543.7 million of deposits assumed in the Santander branch acquisition. |
| · | Ending borrowings of $647.3 million at March 31, 2026, which included $438.1 million of fixed rate Federal Home Loan Bank of New York term borrowings, $201.0 million of customer repurchase agreements and $8.2 million of finance lease liabilities, decreased $42.6 million, or 6.2%, from the end of 2025 and decreased $214.7 million, or 24.9%, from one year prior. The decreases between both periods reflected decreases in fixed-rate term borrowings and customer repurchase agreements. |
| · | The Company’s average cost of funds of 1.20% decreased 13 basis points from the first quarter of 2025 and decreased 7 basis points from the fourth quarter of 2025. The decreases between both periods reflected lower average deposit and borrowing costs and a lower proportion of funding from higher rate borrowings. |
| · | The quarterly average cost of total deposits of 1.10% remains comparatively low relative to the industry and decreased 7 basis points from the first quarter of 2025 and 5 basis points from the linked fourth quarter. |
| · | 63% of the Company’s total deposits were in no- and relatively low-rate checking and savings accounts at the end of the first quarter of 2026. Time deposit accounts represented 14% of the Company’s total deposits at the end of the first quarter of 2026, a decrease of 1 percentage point from both March 31, 2025 and the end of 2025. |
| 5 |
Loans and Credit Quality
The Company’s predominantly footprint-based loan portfolio is well diversified, with credit performance remaining a central priority. The Company’s asset quality metrics, including net charge-offs and delinquent and nonperforming loan levels, remain strong compared to the banking industry, reflecting the Company’s robust risk management practices and disciplined credit quality standards.
| · | Ending loans at March 31, 2026 totaled $11.13 billion, an increase of $181.4 million, or 1.7%, compared to December 31, 2025 and an increase of $710.0 million, or 6.8%, compared to one year prior. The increases between both periods primarily reflected organic growth in the overall business and consumer lending portfolios. The Company’s non-owner occupied and multifamily CRE exposure remains diverse both geographically and by property type, and relatively low at 15% of total assets, 25% of total loans and 194% of total bank-level regulatory capital. |
| · | At March 31, 2026, the Company’s allowance for credit losses totaled $90.2 million, or 0.81% of total loans outstanding, compared to $87.9 million, or 0.80% of total loans outstanding, at December 31, 2025, and $82.8 million, or 0.79% of total loans outstanding, at March 31, 2025. The increases were driven by a net reserve build in the business lending portfolio reflective of organic CRE loan growth. |
| · | The Company recorded a $5.6 million provision for credit losses during the first quarter of 2026 compared to $5.0 million in the linked fourth quarter and $6.7 million in the prior year’s first quarter, reflective of organic loan growth and stable credit quality metrics. |
| · | The Company recorded net charge-offs of $3.0 million, or an annualized 0.11% of average loans, in the first quarter of 2026 compared to net charge-offs of $3.2 million, or an annualized 0.13% of average loans, in the first quarter of 2025 and net charge-offs of $2.3 million, or an annualized 0.09% of average loans, in the fourth quarter of 2025. |
| · | Total delinquent loans, consisting of loans 30 or more days past due and nonaccrual loans, as a percentage of total loans outstanding was 1.12% at the end of the first quarter of 2026. This compares to 1.29% at March 31, 2025, and 1.10% at December 31, 2025. |
| · | At March 31, 2026, nonperforming (90 or more days delinquent and non-accruing) loans were $53.7 million, or 0.48% of total loans outstanding compared to $56.5 million, or 0.52% of total loans outstanding at December 31, 2025, and $75.0 million, or 0.72% of total loans outstanding one year earlier. The decrease in nonperforming loans from the end of the prior year’s first quarter was primarily attributable to a decrease in nonaccrual business lending loan balances, driven largely by the derecognition of two CRE loan relationships in the prior year’s second quarter, including one substantially repaid and one charged off with the collateral transferred to other real estate owned. |
Shareholders’ Equity and Regulatory Capital
The Company’s capital planning and management activities, coupled with its diversified streams of income and prudent dividend practices, have allowed it to build and maintain a strong capital position. At March 31, 2026, all of the Company’s and Community Bank, N.A.’s regulatory capital ratios significantly exceeded well-capitalized standards.
| · | Shareholders’ equity of $2.02 billion at March 31, 2026 was $189.9 million, or 10.4%, higher than one year ago, primarily due to a $119.5 million increase in retained earnings and a $71.0 million decrease in accumulated other comprehensive loss related to the Company’s investment securities portfolio. Shareholders’ equity increased $18.0 million, or 0.9%, from December 31, 2025, primarily driven by a $32.5 million increase in retained earnings, partially offset by $14.8 million increase in treasury stock. |
| · | The Company’s shareholders’ equity to assets ratio was 11.41% at March 31, 2026, an increase from 10.94% at March 31, 2025 and a decrease from 11.59% at December 31, 2025. |
| · | The Company’s tier 1 leverage ratio of 9.20% at March 31, 2026 remained substantially above the regulatory well-capitalized standard of 5.0% and decreased 9 basis points from one year earlier and decreased 1 basis point from December 31, 2025. The decrease in the Company’s tier 1 leverage ratio from one year prior was primarily due to the intangible assets added as part of the Santander branch acquisition. The decreases in the Company’s tier 1 leverage ratio between both periods were also impacted by $15.5 million and $26.6 million of common stock repurchases over the past three and twelve months, respectively. |
| · | The Company’s tangible equity to tangible assets ratio (non-GAAP) was 6.68% at March 31, 2026, up from 6.15% a year earlier and down from 6.75% at December 31, 2025. Tangible equity (non-GAAP) increased $146.0 million, or 14.9%, from one year prior due to the aforementioned increase in retained earnings and decrease in accumulated other comprehensive loss related to the Company’s investment securities portfolio. Tangible assets (non-GAAP) increased $936.7 million, or 5.9%, from the prior year due primarily to organic loan growth and the Santander branch acquisition. |
| 6 |
Dividend Increase and Stock Repurchase Program
The payment of a meaningful and growing dividend is an important component of the Company’s commitment to provide consistent and favorable long-term returns to its shareholders, and it reflects the continued strength of the Company’s long-term operating results and capital position, and management’s confidence in the future performance of the Company. The $0.01 increase in the quarterly dividend declared in the third quarter of 2025 marked the 33rd consecutive year of dividend increases for the Company.
| · | During the first quarter of 2026, the Company declared a quarterly cash dividend of $0.47 per share on its common stock, up 2.2% from the $0.46 dividend declared in the first quarter of 2025. |
| · | On April 22, 2026, the Company announced a quarterly cash dividend of $0.47 per share on its common stock, payable on July 10, 2026 to shareholders of record as of June 15, 2026, representing an annualized yield of 3.0% based upon the $63.17 closing price of the Company’s stock on April 28, 2026. |
| · | In December 2025, the Company’s Board of Directors (the “Board”) approved a stock repurchase program authorizing the repurchase of up to 2.63 million shares, or 5.0% of the Company’s common stock outstanding during the twelve-month period starting January 1, 2026. Such repurchases may be made at the discretion of the Company’s senior management based on market conditions and other relevant factors and will be acquired through open market or privately negotiated transactions as permitted under Rule 10b-18 of the Securities Exchange Act of 1934 and other applicable regulatory and legal requirements. There were 250,000 shares repurchased pursuant to the 2026 stock repurchase program during the first quarter of 2026. |
Wealth Management Services Expansion with Acquisition of ClearPoint Federal Bank & Trust
On January 15, 2026, the Company announced that Community Bank, N.A. has entered into an agreement to acquire ClearPoint Federal Bank & Trust (“ClearPoint”) in an all-cash transaction for approximately $40 million, subject to potential purchase price adjustments. The transaction significantly expands the revenue and offerings of Nottingham Financial Group, the Company’s wealth management services business, and contributes to the Company’s strategic capital deployment into durable, recurring and growing income streams. ClearPoint is a national leader in trust administration for the approximately $20 billion death care industry, with over $1.5 billion of assets under management and a historical 3-year revenue CAGR of 9.7%. The Company expects the transaction to close in the second quarter of 2026 subject to the receipt of requisite regulatory approval and other customary closing conditions.
Non-GAAP Measures
The Company also provides supplemental reporting of its results on an “operating” and “tangible” basis. Results on an “operating” basis exclude the after-tax effects of acquisition expenses, restructuring expenses, litigation accrual, unrealized gain (loss) on equity securities and amortization of intangible assets. Results on a “tangible” basis exclude goodwill and intangible asset balances, net of accumulated amortization and applicable deferred tax amounts. The Company also provides supplemental ratio reporting at the segment level, which includes adjusted return on tangible equity. Adjusted return on tangible equity represents annualized adjusted income before income taxes applicable to each segment as a percentage of average tangible equity for each respective segment. In addition, the Company provides supplemental reporting for “operating pre-tax, pre-provision net revenues,” which subtracts the provision for credit losses, acquisition expenses, restructuring expenses, litigation accrual, unrealized gain (loss) on equity securities and amortization of intangible assets from income before income taxes. Although these items are non-GAAP measures, the Company’s management believes this information helps investors and analysts measure underlying core performance and provides better comparability to other organizations that have not engaged in acquisitions. The Company also provides supplemental reporting of its net interest income and net interest margin on a fully tax-equivalent (“FTE”) basis, which includes an adjustment to net interest income that represents taxes that would have been paid had nontaxable investment securities and loans been taxable. Although fully tax-equivalent net interest income and net interest margin are non-GAAP measures, the Company’s management believes this information helps enhance comparability of the performance of assets that have different tax liabilities. The amounts for such items are presented in the tables that accompany this release.
| 7 |
Conference Call Scheduled
Company management will host a conference call at 11:00 a.m. (ET) today, April 29, 2026, to discuss the first quarter 2026 results. The conference call can be accessed via webcast at https://app.webinar.net/qplYz5Bw2x6 or via dial-in at 1-833-630-0464 (United States) or 1-412-317-1809 (International).
This earnings release is also available within the ”News” section of the Company's investor relations website at https://communityfinancialsystem.com/news/. A replay of the earnings call webcast will also be available on this site for at least one year.
About Community Financial System, Inc.
Community Financial System, Inc. is a diversified financial services company that is focused on four main business lines – banking services, employee benefit services, insurance services and wealth management services. Its banking subsidiary, Community Bank, N.A., is among the country’s 100 largest banking institutions with over $17 billion in assets and operates approximately 200 customer facilities across Upstate New York, Northeastern Pennsylvania, Vermont, Western Massachusetts and Southern New Hampshire. The Company’s Benefit Plans Administrative Services, Inc. subsidiary is a leading provider of employee benefits administration, trust services, collective investment fund administration, and actuarial consulting services to customers on a national scale. The Company’s OneGroup NY, Inc. subsidiary is a top 68 U.S. insurance agency. The Company also offers comprehensive financial planning, trust administration and wealth management services through its Nottingham Financial Group operating unit. The Company is listed on the New York Stock Exchange and the Company’s stock trades under the symbol CBU. For more information about the Company and each of its four main business lines visit https://communityfinancialsystem.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of CBU’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. The following factors, among others, could cause the actual results of CBU’s operations to differ materially from its expectations: the macroeconomic and other challenges and uncertainties related to or resulting from current and future economic and market conditions, including the effects on CRE and housing or vehicle prices, unemployment rates, high inflation, U.S. fiscal debt, budget and tax matters, geopolitical matters, tariffs and global economic growth; fiscal and monetary policies of the Federal Reserve Board; the potential adverse effects of unusual and infrequently occurring events; litigation and actions of regulatory authorities; management’s estimates and projections of interest rates and interest rate policies; the effect of changes in the level of checking, savings, or money market account deposit balances and other factors that affect net interest margin; future provisions for credit losses on loans and debt securities; changes in nonperforming assets; ability to contain costs in inflationary conditions; the effect on financial market valuations on CBU’s fee income businesses, including its employee benefit services, wealth management services, and insurance services businesses; the successful integration of operations of its acquisitions and performance of new branches; competition; changes in legislation or regulatory requirements, including capital requirements; and the timing for receiving regulatory approvals and completing merger and acquisition transactions. For more information about factors that could cause actual results to differ materially from CBU’s expectations, refer to its annual, periodic and other reports filed with the Securities and Exchange Commission (“SEC”), including the discussion under the “Risk Factors” section of such reports filed with the SEC and available on CBU’s website at https://communityfinancialsystem.com and on the SEC’s website at https://sec.gov. Further, any forward-looking statement speaks only as of the date on which it is made, and CBU undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.
| 8 |
Summary of Financial Data (unaudited)
(Dollars in thousands, except per share data)
| 2026 | 2025 | ||||
| 1st Qtr | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | |
| Earnings | |||||
| Loan income | $154,378 | $154,768 | $152,509 | $146,534 | $142,904 |
| Investment income | 25,609 | 26,699 | 24,774 | 26,344 | 24,743 |
| Total interest income | 179,987 | 181,467 | 177,283 | 172,878 | 167,647 |
| Interest expense | 45,275 | 48,042 | 49,118 | 48,130 | 47,435 |
| Net interest income | 134,712 | 133,425 | 128,165 | 124,748 | 120,212 |
| Provision for credit losses | 5,636 | 4,979 | 5,564 | 4,117 | 6,690 |
| Net interest income after provision for credit losses | 129,076 | 128,446 | 122,601 | 120,631 | 113,522 |
| Deposit service and other banking fees | 20,711 | 23,209 | 19,980 | 19,086 | 18,108 |
| Mortgage banking | 1,100 | 385 | 1,180 | 972 | 998 |
| Employee benefit services | 34,572 | 36,564 | 34,408 | 32,380 | 32,622 |
| Insurance services | 12,586 | 12,684 | 14,137 | 13,388 | 14,201 |
| Wealth management services | 10,332 | 9,574 | 8,946 | 8,683 | 9,862 |
| Unrealized (loss) gain on equity securities | (401) | (105) | 236 | (1) | 245 |
| Loss from equity method investments | (326) | (285) | 0 | 0 | 0 |
| Total noninterest revenues | 78,574 | 82,026 | 78,887 | 74,508 | 76,036 |
| Salaries and employee benefits | 80,322 | 81,920 | 76,532 | 79,021 | 76,442 |
| Data processing and communications | 17,871 | 18,221 | 19,119 | 16,699 | 16,122 |
| Occupancy and equipment | 14,882 | 12,646 | 11,419 | 11,486 | 12,698 |
| Business development and marketing | 2,535 | 3,419 | 4,585 | 4,001 | 3,130 |
| Legal and professional fees | 5,070 | 4,212 | 4,469 | 4,368 | 4,849 |
| Amortization of intangible assets | 4,246 | 3,737 | 3,258 | 3,369 | 3,482 |
| Other | 8,110 | 14,397 | 8,937 | 10,158 | 8,567 |
| Total noninterest expenses | 133,036 | 138,552 | 128,319 | 129,102 | 125,290 |
| Income before income taxes | 74,614 | 71,920 | 73,169 | 66,037 | 64,268 |
| Income taxes | 17,396 | 17,498 | 18,081 | 14,706 | 14,654 |
| Net income | $57,218 | $54,422 | $55,088 | $51,331 | $49,614 |
| Basic earnings per share | $1.08 | $1.03 | $1.04 | $0.97 | $0.94 |
| Diluted earnings per share | $1.08 | $1.03 | $1.04 | $0.97 | $0.93 |
| Profitability (GAAP) | |||||
| Return on assets (GAAP) | 1.33% | 1.26% | 1.30% | 1.24% | 1.22% |
| Return on equity (GAAP) | 11.51% | 11.04% | 11.62% | 11.21% | 11.28% |
| Noninterest revenues/total revenues (GAAP) | 36.8% | 38.1% | 38.1% | 37.4% | 38.7% |
| Efficiency ratio (GAAP) | 62.4% | 64.3% | 62.0% | 64.8% | 63.8% |
| Profitability (non-GAAP) | |||||
| Operating return on assets (non-GAAP) | 1.42% | 1.38% | 1.38% | 1.34% | 1.28% |
| Operating return on equity (non-GAAP) | 12.30% | 12.08% | 12.25% | 12.10% | 11.84% |
| Return on tangible equity (non-GAAP) | 21.96% | 20.88% | 22.27% | 22.09% | 22.86% |
| Operating return on tangible equity (non-GAAP) | 22.19% | 21.70% | 22.43% | 22.63% | 22.76% |
| Operating noninterest revenues/operating revenues (FTE) (non-GAAP) | 36.8% | 37.9% | 37.9% | 37.2% | 38.5% |
| Operating efficiency ratio (non-GAAP) | 59.8% | 61.0% | 59.9% | 62.0% | 61.9% |
9
Summary of Financial Data (unaudited)
(Dollars in thousands, except per share data)
| 2026 | 2025 | ||||
| 1st Qtr | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | |
| Components of Net Interest Margin (FTE) | |||||
| Loan yield | 5.68% | 5.68% | 5.68% | 5.63% | 5.58% |
| Cash equivalents yield | 3.61% | 3.84% | 3.92% | 4.33% | 4.30% |
| Investment yield | 2.10% | 2.14% | 2.12% | 2.17% | 2.11% |
| Earning asset yield | 4.60% | 4.60% | 4.59% | 4.56% | 4.51% |
| Interest-bearing deposit rate | 1.47% | 1.55% | 1.59% | 1.59% | 1.59% |
| Borrowing rate | 3.55% | 3.57% | 3.82% | 3.56% | 3.63% |
| Cost of all interest-bearing funds | 1.59% | 1.68% | 1.76% | 1.74% | 1.75% |
| Cost of total deposits | 1.10% | 1.15% | 1.17% | 1.19% | 1.17% |
| Cost of funds (includes noninterest-bearing deposits) | 1.20% | 1.27% | 1.33% | 1.32% | 1.33% |
| Net interest margin | 3.43% | 3.37% | 3.30% | 3.27% | 3.21% |
| Net interest margin (FTE) (non-GAAP) | 3.45% | 3.39% | 3.33% | 3.30% | 3.24% |
| Fully tax-equivalent adjustment (non-GAAP) | $850 | $875 | $880 | $884 | $894 |
| Average Balances | |||||
| Loans | $11,029,905 | $10,819,267 | $10,664,241 | $10,455,637 | $10,402,985 |
| Cash equivalents | 230,593 | 223,700 | 46,550 | 159,688 | 130,649 |
| Taxable investment securities | 4,272,245 | 4,266,451 | 4,268,660 | 4,256,943 | 4,211,921 |
| Nontaxable investment securities | 407,433 | 411,771 | 413,663 | 417,323 | 419,746 |
| Total interest-earning assets | 15,940,176 | 15,721,189 | 15,393,114 | 15,289,591 | 15,165,301 |
| Total assets | 17,468,804 | 17,179,984 | 16,755,095 | 16,590,741 | 16,439,357 |
| Interest checking, savings and money market deposits | 8,685,727 | 8,470,840 | 8,086,979 | 8,094,208 | 7,899,568 |
| Time deposits | 2,185,114 | 2,138,368 | 2,088,861 | 2,125,683 | 2,152,113 |
| Customer repurchase agreements | 214,361 | 220,670 | 187,845 | 240,817 | 250,142 |
| Overnight borrowings | 9,406 | 37,554 | 151,495 | 16,408 | 57,192 |
| FHLB and other borrowings | 450,643 | 462,991 | 531,979 | 587,523 | 602,838 |
| Total interest-bearing liabilities | 11,545,251 | 11,330,423 | 11,047,159 | 11,064,639 | 10,961,853 |
| Noninterest-bearing deposits | 3,703,510 | 3,702,200 | 3,640,964 | 3,522,734 | 3,519,962 |
| Shareholders' equity | 2,016,141 | 1,955,306 | 1,881,116 | 1,836,965 | 1,783,646 |
10
Summary of Financial Data (unaudited)
(Dollars in thousands, except per share data)
| 2026 | 2025 | ||||
| 1st Qtr | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | |
| Balance Sheet Data | |||||
| Cash and cash equivalents | $572,173 | $301,755 | $245,247 | $237,248 | $518,021 |
| Investment securities: | |||||
| Available-for-sale | 2,848,132 | 2,875,341 | 2,859,312 | 2,832,370 | 2,826,915 |
| Held-to-maturity | 1,460,750 | 1,454,166 | 1,442,308 | 1,430,991 | 1,393,837 |
| Equity and other | 81,717 | 77,252 | 78,944 | 86,709 | 80,591 |
| Total investment securities | 4,390,599 | 4,406,759 | 4,380,564 | 4,350,070 | 4,301,343 |
| Loans: | |||||
| Business lending | 4,883,451 | 4,733,867 | 4,663,878 | 4,541,192 | 4,540,002 |
| Consumer mortgage | 3,619,067 | 3,617,186 | 3,544,277 | 3,523,025 | 3,504,151 |
| Consumer indirect | 1,894,011 | 1,859,354 | 1,834,766 | 1,767,213 | 1,707,938 |
| Home equity | 534,439 | 533,755 | 510,933 | 494,183 | 481,248 |
| Consumer direct | 200,216 | 205,595 | 196,408 | 193,504 | 187,802 |
| Total loans | 11,131,184 | 10,949,757 | 10,750,262 | 10,519,117 | 10,421,141 |
| Allowance for credit losses | 90,193 | 87,921 | 84,944 | 81,851 | 82,840 |
| Goodwill and intangible assets, net | 943,314 | 942,716 | 899,967 | 898,381 | 900,332 |
| Other assets | 797,782 | 790,230 | 766,708 | 742,053 | 706,299 |
| Total assets | 17,744,859 | 17,303,296 | 16,957,804 | 16,665,018 | 16,764,296 |
| Deposits: | |||||
| Noninterest-bearing | 3,732,720 | 3,683,442 | 3,686,772 | 3,588,602 | 3,526,485 |
| Non-maturity interest-bearing | 8,997,532 | 8,497,337 | 8,337,797 | 8,010,808 | 8,215,773 |
| Time | 2,139,870 | 2,206,306 | 2,032,281 | 2,102,358 | 2,149,789 |
| Total deposits | 14,870,122 | 14,387,085 | 14,056,850 | 13,701,768 | 13,892,047 |
| Customer repurchase agreements | 201,027 | 231,163 | 224,169 | 180,621 | 266,581 |
| Other borrowings | 446,319 | 458,770 | 539,180 | 713,839 | 595,455 |
| Accrued interest and other liabilities | 203,399 | 220,244 | 198,655 | 185,699 | 176,138 |
| Total liabilities | 15,720,867 | 15,297,262 | 15,018,854 | 14,781,927 | 14,930,221 |
| Shareholders' equity | 2,023,992 | 2,006,034 | 1,938,950 | 1,883,091 | 1,834,075 |
| Total liabilities and shareholders' equity | 17,744,859 | 17,303,296 | 16,957,804 | 16,665,018 | 16,764,296 |
| Capital and Other | |||||
| Shareholders’ equity/total assets (GAAP) | 11.41% | 11.59% | 11.43% | 11.30% | 10.94% |
| Tangible equity/tangible assets (non-GAAP) | 6.68% | 6.75% | 6.73% | 6.51% | 6.15% |
| Tier 1 leverage ratio | 9.20% | 9.21% | 9.46% | 9.42% | 9.29% |
| Loan-to-deposit ratio | 74.9% | 76.1% | 76.5% | 76.8% | 75.0% |
| Diluted weighted average common shares outstanding | 52,967 | 52,959 | 53,036 | 53,117 | 53,130 |
| Period end common shares outstanding | 52,537 | 52,682 | 52,662 | 52,869 | 52,836 |
| Cash dividends declared per common share | $0.47 | $0.47 | $0.47 | $0.46 | $0.46 |
| Book value (GAAP) | $38.53 | $38.08 | $36.82 | $35.62 | $34.71 |
| Tangible book value (non-GAAP) | $21.40 | $21.02 | $20.57 | $19.46 | $18.52 |
| Common stock price at quarter-end | $58.65 | $57.44 | $58.64 | $56.87 | $56.86 |
11
Summary of Financial Data (unaudited)
(Dollars in thousands, except per share data)
| 2026 | 2025 | ||||
| 1st Qtr | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | |
| Asset Quality | |||||
| Nonaccrual loans | $47,103 | $49,509 | $49,327 | $45,808 | $69,051 |
| Accruing loans 90+ days delinquent | 6,595 | 6,948 | 6,730 | 7,519 | 5,928 |
| Total nonperforming loans | 53,698 | 56,457 | 56,057 | 53,327 | 74,979 |
| Other real estate owned | 8,134 | 8,209 | 7,851 | 7,954 | 2,746 |
| Total nonperforming assets | 61,832 | 64,666 | 63,908 | 61,281 | 77,725 |
| Net charge-offs | 2,972 | 2,328 | 2,471 | 5,114 | 3,229 |
| Allowance for credit losses/loans outstanding | 0.81% | 0.80% | 0.79% | 0.78% | 0.79% |
| Nonperforming loans/loans outstanding | 0.48% | 0.52% | 0.52% | 0.51% | 0.72% |
| Allowance for credit losses/nonperforming loans | 168% | 156% | 152% | 153% | 110% |
| Net charge-offs/average loans | 0.11% | 0.09% | 0.09% | 0.20% | 0.13% |
| Delinquent loans/ending loans | 1.12% | 1.10% | 1.00% | 1.01% | 1.29% |
| Provision for credit losses/net charge-offs | 190% | 214% | 225% | 80% | 207% |
| Nonperforming assets/total assets | 0.35% | 0.37% | 0.38% | 0.37% | 0.46% |
| Quarterly GAAP to Non-GAAP Reconciliations | |||||
| Operating pre-tax, pre-provision net revenue (non-GAAP) | |||||
| Net income (GAAP) | $57,218 | $54,422 | $55,088 | $51,331 | $49,614 |
| Income taxes | 17,396 | 17,498 | 18,081 | 14,706 | 14,654 |
| Income before income taxes | 74,614 | 71,920 | 73,169 | 66,037 | 64,268 |
| Provision for credit losses | 5,636 | 4,979 | 5,564 | 4,117 | 6,690 |
| Pre-tax, pre-provision net revenue (non-GAAP) | 80,250 | 76,899 | 78,733 | 70,154 | 70,958 |
| Acquisition expenses | 433 | 2,848 | 747 | 67 | 1 |
| Restructuring expenses | 0 | (26) | 0 | 1,525 | 0 |
| Litigation accrual | 0 | 0 | 0 | 0 | (50) |
| Unrealized loss (gain) on equity securities | 401 | 105 | (236) | 1 | (245) |
| Amortization of intangible assets | 4,246 | 3,737 | 3,258 | 3,369 | 3,482 |
| Operating pre-tax, pre-provision net revenue (non-GAAP) | $85,330 | $83,563 | $82,502 | $75,116 | $74,146 |
| Operating pre-tax, pre-provision net revenue per share (non-GAAP) | |||||
| Diluted earnings per share (GAAP) | $1.08 | $1.03 | $1.04 | $0.97 | $0.93 |
| Income taxes | 0.33 | 0.33 | 0.34 | 0.27 | 0.28 |
| Income before income taxes | 1.41 | 1.36 | 1.38 | 1.24 | 1.21 |
| Provision for credit losses | 0.11 | 0.10 | 0.11 | 0.08 | 0.12 |
| Pre-tax, pre-provision net revenue per share (non-GAAP) | 1.52 | 1.46 | 1.49 | 1.32 | 1.33 |
| Acquisition expenses | 0.01 | 0.05 | 0.01 | 0.00 | 0.00 |
| Restructuring expenses | 0.00 | 0.00 | 0.00 | 0.03 | 0.00 |
| Litigation accrual | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Unrealized loss (gain) on equity securities | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Amortization of intangible assets | 0.08 | 0.07 | 0.06 | 0.06 | 0.07 |
| Operating pre-tax, pre-provision net revenue per share (non-GAAP) | $1.61 | $1.58 | $1.56 | $1.41 | $1.40 |
12
Summary of Financial Data (unaudited)
(Dollars in thousands, except per share data)
| 2026 | 2025 | ||||
| 1st Qtr | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | |
| Quarterly GAAP to Non-GAAP Reconciliations | |||||
| Operating net income (non-GAAP) | |||||
| Net income (GAAP) | $57,218 | $54,422 | $55,088 | $51,331 | $49,614 |
| Acquisition expenses | 433 | 2,848 | 747 | 67 | 1 |
| Tax effect of acquisition expenses | (99) | (658) | (155) | (12) | 0 |
| Subtotal (non-GAAP) | 57,552 | 56,612 | 55,680 | 51,386 | 49,615 |
| Restructuring expenses | 0 | (26) | 0 | 1,525 | 0 |
| Tax effect of restructuring expenses | 0 | 6 | 0 | (274) | 0 |
| Subtotal (non-GAAP) | 57,552 | 56,592 | 55,680 | 52,637 | 49,615 |
| Litigation accrual | 0 | 0 | 0 | 0 | (50) |
| Tax effect of litigation accrual | 0 | 0 | 0 | 0 | 12 |
| Subtotal (non-GAAP) | 57,552 | 56,592 | 55,680 | 52,637 | 49,577 |
| Unrealized loss (gain) on equity securities | 401 | 105 | (236) | 1 | (245) |
| Tax effect of unrealized loss (gain) on equity securities | (91) | (24) | 49 | 0 | 57 |
| Subtotal (non-GAAP) | 57,862 | 56,673 | 55,493 | 52,638 | 49,389 |
| Amortization of intangible assets | 4,246 | 3,737 | 3,258 | 3,369 | 3,482 |
| Tax effect of amortization of intangible assets | (967) | (863) | (677) | (605) | (804) |
| Operating net income (non-GAAP) | $61,141 | $59,547 | $58,074 | $55,402 | $52,067 |
| Operating diluted earnings per share (non-GAAP) | |||||
| Diluted earnings per share (GAAP) | $1.08 | $1.03 | $1.04 | $0.97 | $0.93 |
| Acquisition expenses | 0.01 | 0.05 | 0.01 | 0.00 | 0.00 |
| Tax effect of acquisition expenses | 0.00 | (0.01) | 0.00 | 0.00 | 0.00 |
| Subtotal (non-GAAP) | 1.09 | 1.07 | 1.05 | 0.97 | 0.93 |
| Restructuring expenses | 0.00 | 0.00 | 0.00 | 0.03 | 0.00 |
| Tax effect of restructuring expenses | 0.00 | 0.00 | 0.00 | (0.01) | 0.00 |
| Subtotal (non-GAAP) | 1.09 | 1.07 | 1.05 | 0.99 | 0.93 |
| Litigation accrual | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Tax effect of litigation accrual | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Subtotal (non-GAAP) | 1.09 | 1.07 | 1.05 | 0.99 | 0.93 |
| Unrealized loss (gain) on equity securities | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Tax effect of unrealized loss (gain) on equity securities | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Subtotal (non-GAAP) | 1.09 | 1.07 | 1.05 | 0.99 | 0.93 |
| Amortization of intangible assets | 0.08 | 0.07 | 0.06 | 0.06 | 0.07 |
| Tax effect of amortization of intangible assets | (0.02) | (0.02) | (0.02) | (0.01) | (0.02) |
| Operating diluted earnings per share (non-GAAP) | $1.15 | $1.12 | $1.09 | $1.04 | $0.98 |
13
Summary of Financial Data (unaudited)
(Dollars in thousands, except per share data)
| 2026 | 2025 | ||||
| 1st Qtr | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | |
| Quarterly GAAP to Non-GAAP Reconciliations | |||||
| Return on assets | |||||
| Net income (GAAP) | $57,218 | $54,422 | $55,088 | $51,331 | $49,614 |
| Average total assets | 17,468,804 | 17,179,984 | 16,755,095 | 16,590,741 | 16,439,357 |
| Return on assets (GAAP) | 1.33% | 1.26% | 1.30% | 1.24% | 1.22% |
| Operating return on assets (non-GAAP) | |||||
| Operating net income (non-GAAP) | $61,141 | $59,547 | $58,074 | $55,402 | $52,067 |
| Average total assets | 17,468,804 | 17,179,984 | 16,755,095 | 16,590,741 | 16,439,357 |
| Operating return on assets (non-GAAP) | 1.42% | 1.38% | 1.38% | 1.34% | 1.28% |
| Return on equity | |||||
| Net income (GAAP) | $57,218 | $54,422 | $55,088 | $51,331 | $49,614 |
| Average total equity | 2,016,141 | 1,955,306 | 1,881,116 | 1,836,965 | 1,783,646 |
| Return on equity (GAAP) | 11.51% | 11.04% | 11.62% | 11.21% | 11.28% |
| Operating return on equity (non-GAAP) | |||||
| Operating net income (non-GAAP) | $61,141 | $59,547 | $58,074 | $55,402 | $52,067 |
| Average total equity | 2,016,141 | 1,955,306 | 1,881,116 | 1,836,965 | 1,783,646 |
| Operating return on equity (non-GAAP) | 12.30% | 12.08% | 12.25% | 12.10% | 11.84% |
| Net interest margin | |||||
| Net interest income | $134,712 | $133,425 | $128,165 | $124,748 | $120,212 |
| Total average interest-earning assets | 15,940,176 | 15,721,189 | 15,393,114 | 15,289,591 | 15,165,301 |
| Net interest margin | 3.43% | 3.37% | 3.30% | 3.27% | 3.21% |
| Net interest margin (FTE) (non-GAAP) | |||||
| Net interest income | $134,712 | $133,425 | $128,165 | $124,748 | $120,212 |
| Fully tax-equivalent adjustment (non-GAAP) | 850 | 875 | 880 | 884 | 894 |
| Fully tax-equivalent net interest income (non-GAAP) | 135,562 | 134,300 | 129,045 | 125,632 | 121,106 |
| Total average interest-earning assets | 15,940,176 | 15,721,189 | 15,393,114 | 15,289,591 | 15,165,301 |
| Net interest margin (FTE) (non-GAAP) | 3.45% | 3.39% | 3.33% | 3.30% | 3.24% |
| Operating noninterest revenues (non-GAAP) | |||||
| Noninterest revenues (GAAP) | $78,574 | $82,026 | $78,887 | $74,508 | $76,036 |
| Unrealized loss (gain) on equity securities | 401 | 105 | (236) | 1 | (245) |
| Total operating noninterest revenues (non-GAAP) | $78,975 | $82,131 | $78,651 | $74,509 | $75,791 |
| Operating noninterest expenses (non-GAAP) | |||||
| Noninterest expenses (GAAP) | $133,036 | $138,552 | $128,319 | $129,102 | $125,290 |
| Acquisition expenses | (433) | (2,848) | (747) | (67) | (1) |
| Restructuring expenses | 0 | 26 | 0 | (1,525) | 0 |
| Litigation accrual | 0 | 0 | 0 | 0 | 50 |
| Amortization of intangible assets | (4,246) | (3,737) | (3,258) | (3,369) | (3,482) |
| Total operating noninterest expenses (non-GAAP) | $128,357 | $131,993 | $124,314 | $124,141 | $121,857 |
14
Summary of Financial Data (unaudited)
(Dollars in thousands, except per share data)
| 2026 | 2025 | ||||
| 1st Qtr | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | |
| Quarterly GAAP to Non-GAAP Reconciliations | |||||
| Operating revenues (non-GAAP) | |||||
| Net interest income (GAAP) | $134,712 | $133,425 | $128,165 | $124,748 | $120,212 |
| Noninterest revenues (GAAP) | 78,574 | 82,026 | 78,887 | 74,508 | 76,036 |
| Total revenues (GAAP) | 213,286 | 215,451 | 207,052 | 199,256 | 196,248 |
| Unrealized loss (gain) on equity securities | 401 | 105 | (236) | 1 | (245) |
| Total operating revenues (non-GAAP) | $213,687 | $215,556 | $206,816 | $199,257 | $196,003 |
| Noninterest revenues/total revenues | |||||
| Total noninterest revenues (GAAP) – numerator | $78,574 | $82,026 | $78,887 | $74,508 | $76,036 |
| Total revenues (GAAP) – denominator | 213,286 | 215,451 | 207,052 | 199,256 | 196,248 |
| Noninterest revenues/total revenues (GAAP) | 36.8% | 38.1% | 38.1% | 37.4% | 38.7% |
| Operating noninterest revenues/operating revenues (FTE) (non-GAAP) | |||||
| Total operating noninterest revenues (non-GAAP) – numerator | $78,975 | $82,131 | $78,651 | $74,509 | $75,791 |
| Total operating revenues (non-GAAP) | 213,687 | 215,556 | 206,816 | 199,257 | 196,003 |
| Fully tax-equivalent adjustment (non-GAAP) | 850 | 875 | 880 | 884 | 894 |
| Total operating revenues (FTE) (non-GAAP) – denominator | 214,537 | 216,431 | 207,696 | 200,141 | 196,897 |
Operating noninterest revenues/operating revenues (FTE) (non- GAAP) |
36.8% | 37.9% | 37.9% | 37.2% | 38.5% |
| Efficiency ratio (GAAP) | |||||
| Total noninterest expenses (GAAP) – numerator | $133,036 | $138,552 | $128,319 | $129,102 | $125,290 |
| Total revenues (GAAP) – denominator | 213,286 | 215,451 | 207,052 | 199,256 | 196,248 |
| Efficiency ratio (GAAP) | 62.4% | 64.3% | 62.0% | 64.8% | 63.8% |
| Operating efficiency ratio (non-GAAP) | |||||
| Total operating noninterest expenses (non-GAAP) - numerator | $128,357 | $131,993 | $124,314 | $124,141 | $121,857 |
| Total operating revenues (FTE) (non-GAAP) - denominator | 214,537 | 216,431 | 207,696 | 200,141 | 196,897 |
| Operating efficiency ratio (non-GAAP) | 59.8% | 61.0% | 59.9% | 62.0% | 61.9% |
| Total tangible assets (non-GAAP) | |||||
| Total assets (GAAP) | $17,744,859 | $17,303,296 | $16,957,804 | $16,665,018 | $16,764,296 |
| Goodwill and intangible assets, net | (943,314) | (942,716) | (899,967) | (898,381) | (900,332) |
| Deferred taxes on goodwill and intangible assets, net | 43,752 | 43,905 | 44,130 | 44,336 | 44,644 |
| Total tangible assets (non-GAAP) | $16,845,297 | $16,404,485 | $16,101,967 | $15,810,973 | $15,908,608 |
| Total tangible common equity (non-GAAP) | |||||
| Shareholders' equity (GAAP) | $2,023,992 | $2,006,034 | $1,938,950 | $1,883,091 | $1,834,075 |
| Goodwill and intangible assets, net | (943,314) | (942,716) | (899,967) | (898,381) | (900,332) |
| Deferred taxes on goodwill and intangible assets, net | 43,752 | 43,905 | 44,130 | 44,336 | 44,644 |
| Total tangible common equity (non-GAAP) | $1,124,430 | $1,107,223 | $1,083,113 | $1,029,046 | $978,387 |
15
Summary of Financial Data (unaudited)
(Dollars in thousands, except per share data)
| 2026 | 2025 | ||||
| 1st Qtr | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | |
| Quarterly GAAP to Non-GAAP Reconciliations | |||||
| Shareholders’ equity-to-assets ratio at quarter end | |||||
| Total shareholders’ equity (GAAP) – numerator | $2,023,992 | $2,006,034 | $1,938,950 | $1,883,091 | $1,834,075 |
| Total assets (GAAP) – denominator | 17,744,859 | 17,303,296 | 16,957,804 | 16,665,018 | 16,764,296 |
| Shareholders’ equity-to-assets ratio at quarter end (GAAP) | 11.41% | 11.59% | 11.43% | 11.30% | 10.94% |
| Tangible equity-to-tangible assets ratio at quarter end (non-GAAP) | |||||
| Total tangible common equity (non-GAAP) - numerator | $1,124,430 | $1,107,223 | $1,083,113 | $1,029,046 | $978,387 |
| Total tangible assets (non-GAAP) - denominator | 16,845,297 | 16,404,485 | 16,101,967 | 15,810,973 | 15,908,608 |
| Tangible equity-to-tangible assets ratio at quarter end (non-GAAP) | 6.68% | 6.75% | 6.73% | 6.51% | 6.15% |
| Return on tangible equity (non-GAAP) | |||||
| Net income (GAAP) | $57,218 | $54,422 | $55,088 | $51,331 | $49,614 |
| Amortization of intangible assets, net of tax | 3,279 | 2,874 | 2,581 | 2,764 | 2,678 |
| Net income, excluding amortization of intangible assets (non-GAAP) | 60,497 | 57,296 | 57,669 | 54,095 | 52,292 |
| Average shareholders’ equity | 2,016,141 | 1,955,306 | 1,881,116 | 1,836,965 | 1,783,646 |
| Average goodwill and intangible assets, net | (942,701) | (910,627) | (897,943) | (899,416) | (900,530) |
| Average deferred taxes on goodwill and intangible assets, net | 43,829 | 44,018 | 44,233 | 44,490 | 44,631 |
| Average tangible common equity (non-GAAP) | 1,117,269 | 1,088,697 | 1,027,406 | 982,039 | 927,747 |
| Return on tangible equity (non-GAAP) | 21.96% | 20.88% | 22.27% | 22.09% | 22.86% |
| Operating return on tangible equity (non-GAAP) | |||||
| Operating net income (non-GAAP) | $61,141 | $59,547 | $58,074 | $55,402 | $52,067 |
| Average tangible common equity (non-GAAP) | 1,117,269 | 1,088,697 | 1,027,406 | 982,039 | 927,747 |
| Operating return on tangible equity (non-GAAP) | 22.19% | 21.70% | 22.43% | 22.63% | 22.76% |
| Book value (GAAP) | |||||
| Total shareholders’ equity (GAAP) – numerator | $2,023,992 | $2,006,034 | $1,938,950 | $1,883,091 | $1,834,075 |
| Period end common shares outstanding – denominator | 52,537 | 52,682 | 52,662 | 52,869 | 52,836 |
| Book value (GAAP) | $38.53 | $38.08 | $36.82 | $35.62 | $34.71 |
| Tangible book value (non-GAAP) | |||||
| Total tangible common equity (non-GAAP) – numerator | $1,124,430 | $1,107,223 | $1,083,113 | $1,029,046 | $978,387 |
| Period end common shares outstanding – denominator | 52,537 | 52,682 | 52,662 | 52,869 | 52,836 |
| Tangible book value (non-GAAP) | $21.40 | $21.02 | $20.57 | $19.46 | $18.52 |
| 2026 | 2025 | ||||
| 1st Qtr | 4th Qtr | 1st Qtr | |||
| Quarterly Segment Information Reconciliations | |||||
| Reconciliation of total segment adjusted income before income taxes to total consolidated income before income taxes | |||||
| Total segment adjusted income before income taxes | $79,694 | $78,584 | $67,456 | ||
| Unrealized (loss) gain on equity securities | (401) | (105) | 245 | ||
| Amortization of intangible assets | (4,246) | (3,737) | (3,482) | ||
| Restructuring expenses | 0 | 26 | 0 | ||
| Litigation accrual | 0 | 0 | 50 | ||
| Acquisition expenses | (433) | (2,848) | (1) | ||
| Total consolidated income before income taxes | $74,614 | $71,920 | $64,268 | ||
16
Summary of Financial Data (unaudited)
(Dollars in thousands, except per share data)
| 2026 | 2025 | ||||
| 1st Qtr | 4th Qtr | 1st Qtr | |||
| Quarterly Segment Information Reconciliations | |||||
| Reconciliation of average total segment assets to average total consolidated assets | |||||
| Average total segment assets | $17,593,896 | $17,298,866 | $16,555,552 | ||
| Elimination of intersegment cash and deposits | (125,092) | (118,882) | (116,195) | ||
| Average total consolidated assets | $17,468,804 | $17,179,984 | $16,439,357 | ||
| Banking and Corporate | |||||
| Adjusted return on assets | |||||
| Adjusted income before income taxes | $59,611 | $58,467 | $46,273 | ||
| Average segment assets | 17,192,358 | 16,916,167 | 16,213,158 | ||
| Adjusted return on assets | 1.41% | 1.37% | 1.16% | ||
| Adjusted return on equity | |||||
| Adjusted income before income taxes | $59,611 | $58,467 | $46,273 | ||
| Average shareholders’ equity | 1,667,914 | 1,616,116 | 1,489,739 | ||
| Adjusted return on equity | 14.49% | 14.35% | 12.60% | ||
| Adjusted return on tangible equity (non-GAAP) | |||||
| Adjusted income before income taxes | $59,611 | $58,467 | $46,273 | ||
| Average shareholders’ equity | 1,667,914 | 1,616,116 | 1,489,739 | ||
| Average goodwill and intangible assets, net | (779,128) | (749,254) | (738,052) | ||
| Average deferred taxes on goodwill and intangible assets, net | 40,533 | 40,541 | 40,222 | ||
| Average tangible common equity (non-GAAP) | 929,319 | 907,403 | 791,909 | ||
| Adjusted return on tangible equity (non-GAAP) | 26.01% | 25.56% | 23.70% | ||
| Employee Benefit Services | |||||
| Adjusted return on assets | |||||
| Adjusted income before income taxes | $14,327 | $15,997 | $13,440 | ||
| Average segment assets | 249,917 | 236,762 | 232,461 | ||
| Adjusted return on assets | 23.25% | 26.81% | 23.45% | ||
| Adjusted return on equity | |||||
| Adjusted income before income taxes | $14,327 | $15,997 | $13,440 | ||
| Average shareholders’ equity | 217,387 | 210,344 | 205,608 | ||
| Adjusted return on equity | 26.73% | 30.17% | 26.51% | ||
| Adjusted return on tangible equity (non-GAAP) | |||||
| Adjusted income before income taxes | $14,327 | $15,997 | $13,440 | ||
| Average shareholders’ equity | 217,387 | 210,344 | 205,608 | ||
| Average goodwill and intangible assets, net | (109,742) | (110,144) | (112,746) | ||
| Average deferred taxes on goodwill and intangible assets, net | 3,127 | 3,579 | 4,405 | ||
| Average tangible common equity (non-GAAP) | 110,772 | 103,779 | 97,267 | ||
| Adjusted return on tangible equity (non-GAAP) | 52.45% | 61.16% | 56.04% | ||
17
Summary of Financial Data (unaudited)
(Dollars in thousands, except per share data)
| 2026 | 2025 | ||||
| 1st Qtr | 4th Qtr | 1st Qtr | |||
| Quarterly Segment Information Reconciliations | |||||
| Insurance Services | |||||
| Adjusted return on assets | |||||
| Adjusted income before income taxes | $1,849 | $929 | $4,108 | ||
| Average segment assets | 109,005 | 104,924 | 71,923 | ||
| Adjusted return on assets | 6.88% | 3.51% | 23.16% | ||
| Adjusted return on equity | |||||
| Adjusted income before income taxes | $1,849 | $929 | $4,108 | ||
| Average shareholders’ equity | 93,172 | 92,004 | 54,538 | ||
| Adjusted return on equity | 8.05% | 4.01% | 30.55% | ||
| Adjusted return on tangible equity (non-GAAP) | |||||
| Adjusted income before income taxes | $1,849 | $929 | $4,108 | ||
| Average shareholders’ equity | 93,172 | 92,004 | 54,538 | ||
| Average goodwill and intangible assets, net | (48,682) | (47,044) | (45,205) | ||
| Average deferred taxes on goodwill and intangible assets, net | (160) | (329) | (279) | ||
| Average tangible common equity (non-GAAP) | 44,330 | 44,631 | 9,054 | ||
| Adjusted return on tangible equity (non-GAAP) | 16.92% | 8.26% | 184.01% | ||
| Wealth Management Services | |||||
| Adjusted return on assets | |||||
| Adjusted income before income taxes | $3,907 | $3,191 | $3,635 | ||
| Average segment assets | 42,616 | 41,013 | 38,010 | ||
| Adjusted return on assets | 37.18% | 30.87% | 38.78% | ||
| Adjusted return on equity | |||||
| Adjusted income before income taxes | $3,907 | $3,191 | $3,635 | ||
| Average shareholders’ equity | 37,668 | 36,842 | 33,761 | ||
| Adjusted return on equity | 42.07% | 34.36% | 43.67% | ||
| Adjusted return on tangible equity (non-GAAP) | |||||
| Adjusted income before income taxes | $3,907 | $3,191 | $3,635 | ||
| Average shareholders’ equity | 37,668 | 36,842 | 33,761 | ||
| Average goodwill and intangible assets, net | (5,149) | (4,185) | (4,527) | ||
| Average deferred taxes on goodwill and intangible assets, net | 329 | 227 | 283 | ||
| Average tangible common equity (non-GAAP) | 32,848 | 32,884 | 29,517 | ||
| Adjusted return on tangible equity (non-GAAP) | 48.24% | 38.50% | 49.94% | ||
# # #
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