News Release
For further information, please contact:
Marya Burgio Wlos, EVP & Chief Financial Officer
Office: (315) 299-2946
Exhibit 99.1
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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 Third Quarter 2026 Results
SYRACUSE, N.Y. — October 27, 2026 — Community Financial System, Inc. (the “Company” or “CFSI”) (NYSE: CBU) reported third quarter 2026 results. The results are available within the “News” section of the Company's investor relations website or directly at https://ir.cfsi.com/Q3-2026-CBU-Earnings-Release.
Company management will host a conference call at 11:00 a.m. (ET) today, October 27, 2026, to discuss the third quarter 2026 results. The conference call can be accessed via webcast at https://app.webinar.net/EmXoj28zpxQ 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 63 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://ir.cfsi.com.
 |
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 Third Quarter 2026 Results
SYRACUSE, N.Y. — October 27, 2026
Community Financial System, Inc. (the “Company” or “CFSI”) (NYSE: CBU) reported third quarter 2026 net income of $61.3 million, or $1.16 per share and operating net income of $67.0 million, or $1.27 per share.
“Our businesses accelerated into the third quarter and we delivered operating diluted earnings per share1 of $1.27, up 16.5% year-over-year and 9.5% quarter-over-quarter, representing our sixth consecutive quarter of record results,” commented Dimitar A. Karaivanov, President and CEO.
“During the quarter we achieved an operating return on assets1 of 1.51% while retaining excellent balance sheet metrics. In addition, we decided to reposition the investment portfolio and pull forward some of our securities cash flows in order to both capture positive economic value and provide increased visibility into the embedded repricing earnings power of our balance sheet. Our trajectory remains intact and we expect strong performance across all of our businesses into the fourth quarter and 2027.”
| Third Quarter 2026 Performance | Quarter-over-Quarter Increase (Decrease) |
Year-over-Year Increase (Decrease) | ||||||
| Dollars in thousands, except per share data | 3rd
Qtr 2026 |
2nd
Qtr 2026 |
3rd
Qtr 2025 |
$ | % | $ | % | |
| Operating Performance | Diluted Earnings Per Share | $1.16 | $1.16 | $1.04 | $0.00 | 0.0% | $0.12 | 11.5% |
| Operating Diluted Earnings Per Share1 | 1.27 | 1.16 | 1.09 | 0.11 | 9.5% | 0.18 | 16.5% | |
| Operating Pre-Tax, Pre-Provision Net Revenue Per Share1 | 1.77 | 1.62 | 1.56 | 0.15 | 9.3% | 0.21 | 13.5% | |
| Return Metrics | Return on Assets | 1.38% | 1.40% | 1.30% | - | (0.02%) | - | 0.08% |
| Operating Return on Assets1 | 1.51% | 1.40% | 1.38% | - | 0.11% | - | 0.13% | |
| Return on Equity | 11.82% | 12.10% | 11.62% | - | (0.28%) | - | 0.20% | |
| Operating Return on Equity1 | 12.93% | 12.13% | 12.25% | - | 0.80% | - | 0.68% | |
1
| Third Quarter 2026 Performance (continued) | Quarter-over-Quarter Increase (Decrease) |
Year-over-Year
Increase (Decrease) | ||||||
| Dollars in thousands, except per share data | 3rd
Qtr 2026 |
2nd
Qtr 2026 |
3rd
Qtr 2025 |
$ | % | $ | % | |
| Revenues | Total Revenues | $227,291 | $223,155 | $207,052 | $4,136 | 1.9% | $20,239 | 9.8% |
| Total Operating Revenues (FTE)1 | 231,217 | 219,338 | 207,696 | 11,879 | 5.4% | 23,521 | 11.3% | |
| Noninterest Revenues | 83,747 | 84,011 | 78,887 | (264) | (0.3%) | 4,860 | 6.2% | |
| Total Operating Noninterest Revenues1 | 86,663 | 79,301 | 78,651 | 7,362 | 9.3% | 8,012 | 10.2% | |
| Noninterest Revenues/Total Revenues | 36.8% | 37.6% | 38.1% | - | (0.8%) | - | (1.3%) | |
| Operating Noninterest Revenues/Operating Revenues (FTE)1 | 37.5% | 36.2% | 37.9% | - | 1.3% | - | (0.4%) | |
| Net Interest Income and Margin | Net Interest Income | $143,544 | $139,144 | $128,165 | $4,400 | 3.2% | $15,379 | 12.0% |
| Net Interest Margin | 3.54% | 3.46% | 3.30% | - | 0.08% | - | 0.24% | |
| Net Interest Margin (FTE)1 | 3.56% | 3.49% | 3.33% | - | 0.07% | - | 0.23% | |
| Balance Sheet and Funding | Total Ending Loans | $11,518,055 | $11,282,824 | $10,750,262 | $235,231 | 2.1% | $767,793 | 7.1% |
| Total Ending Deposits | 14,865,106 | 14,710,409 | 14,056,850 | 154,697 | 1.1% | 808,256 | 5.7% | |
| Cost of Total Deposits | 1.03% | 1.07% | 1.17% | - | (0.04%) | - | (0.14%) | |
| Cost of Funds | 1.16% | 1.18% | 1.33% | - | (0.02%) | - | (0.17%) | |
| Risk Metrics | Annualized Loan Net Charge-Offs | 0.18% | 0.12% | 0.09% | - | 0.06% | - | 0.09% |
| Tier 1 Leverage Ratio | 9.37% | 9.26% | 9.46% | - | 0.11% | - | (0.09%) | |
| Loan-to-deposit ratio | 77.5% | 76.7% | 76.5% | - | 0.8% | - | 1.0% | |
| Non-owner occupied and multifamily commercial real estate (“CRE”) / total bank-level regulatory capital | 202% | 201% | 188% | - | 1% | - | 14% | |
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
| Third Quarter 2026 Business Segment Results2 |
Quarter-over-Quarter Increase (Decrease) |
Year-over-Year Increase (Decrease) | ||||||
| Dollars in thousands |
3rd Qtr 2026 |
2nd Qtr 2026 |
3rd Qtr 2025 |
$ | % | $ | % | |
| Banking and Corporate | Net interest income | $142,026 | $137,899 | $127,348 | $4,127 | 3.0% | $14,678 | 11.5% |
| Provision for credit losses | 5,560 | 4,607 | 5,564 | 953 | 20.7% | (4) | (0.1%) | |
| Segment noninterest revenues | 22,702 | 21,529 | 21,082 | 1,173 | 5.4% | 1,620 | 7.7% | |
| Other segment expenses | 93,687 | 93,133 | 86,563 | 554 | 0.6% | 7,124 | 8.2% | |
| Adjusted income before income taxes | $65,481 | $61,688 | $56,303 | $3,793 | 6.1% | $9,178 | 16.3% | |
| Adjusted return on assets3 | 1.50% | 1.43% | 1.35% | - | 0.07% | - | 0.15% | |
| Adjusted return on equity3 | 15.41% | 14.58% | 14.14% | - | 0.83% | - | 1.27% | |
| Adjusted return on tangible equity1, 3 | 27.36% | 25.79% | 25.30% | - | 1.57% | - | 2.06% | |
| Employee Benefit Services | Segment revenues | $37,968 | $36,361 | $35,965 | $1,607 | 4.4% | $2,003 | 5.6% |
| Segment expenses | 23,978 | 22,520 | 21,464 | 1,458 | 6.5% | 2,514 | 11.7% | |
| Adjusted income before income taxes | $13,990 | $13,841 | $14,501 | $149 | 1.1% | ($511) | (3.5%) | |
| Adjusted return on assets3 | 24.07% | 24.90% | 25.49% | - | (0.83%) | - | (1.42%) | |
| Adjusted return on equity3 | 27.30% | 28.38% | 28.66% | - | (1.08%) | - | (1.36%) | |
| Adjusted return on tangible equity1, 3 | 55.85% | 61.43% | 62.00% | - | (5.58%) | - | (6.15%) | |
| Insurance Services | Segment revenues | $15,481 | $12,811 | $14,219 | $2,670 | 20.8% | $1,262 | 8.9% |
| Segment expenses | 10,903 | 10,806 | 10,977 | 97 | 0.9% | (74) | (0.7%) | |
| Adjusted income before income taxes | $4,578 | $2,005 | $3,242 | $2,573 | 128.3% | $1,336 | 41.2% | |
| Adjusted return on assets3 | 16.39% | 7.58% | 15.35% | - | 8.81% | - | 1.04% | |
| Adjusted return on equity3 | 19.58% | 8.74% | 19.60% | - | 10.84% | - | (0.02%) | |
| Adjusted return on tangible equity1, 3 | 45.34% | 18.90% | 63.09% | - | 26.44% | - | (17.75%) | |
| Wealth Management Services | Segment revenues | $13,467 | $11,217 | $9,528 | $2,250 | 20.1% | $3,939 | 41.3% |
| Segment expenses | 9,368 | 7,775 | 6,636 | 1,593 | 20.5% | 2,732 | 41.2% | |
| Adjusted income before income taxes | $4,099 | $3,442 | $2,892 | $657 | 19.1% | $1,207 | 41.7% | |
| Adjusted return on assets3 | 8.14% | 15.09% | 29.22% | - | (6.95%) | - | (21.08%) | |
| Adjusted return on equity3 | 21.66% | 28.88% | 32.57% | - | (7.22%) | - | (10.91%) | |
| Adjusted return on tangible equity1, 3 | 32.56% | 33.96% | 36.83% | - | (1.40%) | - | (4.27%) | |
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 third quarter 2026 net income of $61.3 million, or $1.16 per share. This compares to net income of $55.1 million, or $1.04 per share, for the third quarter of 2025. The $0.12 increase in earnings per share was primarily driven by increases in net interest income and noninterest revenues, partially offset by increases in noninterest expenses and income taxes. Comparatively, the Company’s earnings per share was consistent with the linked second quarter of 2026 as an increase in net interest income was offset by a realized loss on investment securities along with increases in the provision for credit losses and noninterest expenses.
Net Interest Income and Net Interest Margin
The Company’s record quarterly net interest income reflected lower funding costs, organic loan growth and strategic balance sheet actions, including the redeployment of proceeds from the sale of lower-yielding U.S. Treasury securities to repay higher-cost borrowings, which supported continued margin expansion.
| · | Net interest income in the third quarter of 2026 was $143.5 million, up $15.4 million, or 12.0%, compared to the third quarter of 2025, and up $4.4 million, or 3.2%, from the second quarter of 2026. |
| · | Net interest margin for the third quarter of 3.54% and fully tax-equivalent net interest margin, a non-GAAP measure, of 3.56%, increased by 24 basis points and 23 basis points, respectively, from the third 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 8 basis points to 4.67% over the prior year’s third quarter primarily driven by an increase in the proportion of loan balances to total interest-earning assets supported by organic loan growth and the sale of $296.8 million of lower-yielding available-for-sale U.S. Treasury securities. |
| · | The cost of interest-bearing liabilities decreased 21 basis points from 1.76% in the third quarter of 2025 to 1.55% in the third quarter of 2026, primarily driven by a 19 basis point decrease in the average rate paid on interest-bearing deposits. |
| · | On a linked quarter basis, net interest margin and fully tax-equivalent net interest margin, a non-GAAP measure, increased by 8 basis points and 7 basis points, respectively. The yield on interest-earning assets increased 6 basis points, while the cost of funds decreased 2 basis points. This included a 1 basis point decrease in the cost of interest-bearing liabilities driven by a 4 basis point decrease in the average interest-bearing deposit rate to 1.40%. Excluding the impact of the semiannual Federal Reserve Bank dividend recorded in the second quarter of 2026, the yield on interest-earning assets increased 8 basis points compared to the linked second quarter. |
Noninterest Revenues
The Company’s noninterest revenue streams (excluding losses on investment securities) generated 38% of total revenues in the third quarter.
| · | Banking noninterest revenues, comprised of deposit service and other banking fees, totaled $22.5 million for the third quarter of 2026, an increase of $1.3 million, or 6.2%, from the third quarter of 2025, and an increase of $1.2 million, or 5.5%, from the second quarter of 2026. The increase from the third quarter of 2025 was primarily comprised of higher debit interchange and ATM fees. The increase from the linked second quarter was due in part to higher customer interest rate swap fee revenues. |
| · | Employee benefit services revenues for the third quarter of 2026 were $36.4 million, an increase of $2.0 million, or 5.8%, in comparison to the third quarter of 2025 and an increase of $1.5 million, or 4.4%, from the second quarter of 2026. The increases between both periods were largely driven by revenue growth in the recordkeeping and third-party administration services business line due in part to higher average market values of assets under administration. |
| · | Insurance services revenues for the third quarter of 2026 were $14.6 million, an increase of $0.5 million, or 3.4%, versus the prior year’s third quarter and an increase of $1.4 million, or 10.7%, from the second quarter of 2026. The increase from the prior year’s third quarter was driven by revenue growth from acquisitions, while the increase from the linked second quarter reflected the seasonal timing of insurance policy renewals. |
| · | Wealth management services revenues for the third quarter of 2026 totaled $12.4 million, an increase of $3.4 million, or 38.4%, from the third quarter of 2025, and an increase of $2.0 million, or 19.0%, from the second quarter of 2026. The increases between both periods were reflective of revenue growth from the acquisition of ClearPoint Federal Bank & Trust (“ClearPoint”) and higher average market values of assets under management. |
| · | The Company recognized a $2.9 million net loss on investment securities during the third quarter of 2026 which included a $3.0 million realized loss on the sale of $296.8 million of lower-yielding available-for-sale U.S. Treasury securities. The proceeds from the sale were used to repay higher-cost overnight borrowings, which was immediately accretive to net interest income. |
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 $141.0 million in total noninterest expenses in the third quarter of 2026, compared to $128.3 million of total noninterest expenses in the prior year’s third quarter. The $12.7 million, or 9.9%, increase between the periods was primarily driven by higher salaries and employee benefits expenses, data processing and communications expenses and occupancy and equipment expenses. |
| · | Operating noninterest expenses, a non-GAAP measure, were $136.5 million in the third quarter of 2026, an increase of $12.2 million, or 9.8%, compared to the third quarter of 2025. |
| · | Salaries and employee benefits expenses increased $7.4 million, or 9.7%, from the third quarter of 2025, primarily due to incremental costs associated with acquisitions completed between the periods, higher performance-based incentive compensation, increased employee medical costs and annual merit-based salary increases. |
| · | Data processing and communications expenses increased $2.5 million, or 13.0%, from the third 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. The increase also reflected a one-time $0.8 million consulting expense related to the renegotiation of a debit card branding contract, which is expected to generate future cost savings. |
| · | Occupancy and equipment expenses increased $2.6 million, or 22.9%, from the prior year’s third 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. |
| · | The effective tax rate for the third quarter of 2026 was 24.0%, a decrease from 24.7% in the third quarter of 2025 and 24.1% in the second quarter of 2026. The effective tax rate for the first nine months of 2026 was 23.8% compared to 23.3% for the first nine months of 2025 driven by an increase in certain state income taxes. |
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 $17.79 billion at September 30, 2026, representing an $830.2 million, or 4.9%, increase from one year prior and a $24.2 million, or 0.1%, increase from the end of the second quarter of 2026. The increase in the Company’s total assets from one year prior was primarily driven by organic loan growth supported by the funding generated from the Santander branch acquisition and the ClearPoint acquisition. |
| · | At September 30, 2026, the Company’s readily available sources of liquidity totaled $6.52 billion, including unrestricted cash and cash equivalents balances of $419.9 million, unpledged investment securities totaling $1.52 billion, unused borrowing capacity at the Federal Home Loan Bank of New York of $1.62 billion and $2.96 billion of funding availability at the Federal Reserve Bank’s discount window. |
| · | The Company’s readily available sources of liquidity represent 229% of the Company’s estimated uninsured deposits, net of collateralized and intercompany deposits, at September 30, 2026. |
| · | Estimated insured deposits, net of collateralized and intercompany deposits, represented 81% of total ending deposits at September 30, 2026. |
5
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 September 30, 2026 of $14.87 billion were $154.7 million, or 1.1%, higher than the end of the second quarter of 2026 and were $808.3 million, or 5.7%, higher than one year prior. The increase from June 30, 2026 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 and the $120.1 million of deposits assumed in the ClearPoint acquisition. Excluding the deposits assumed in acquisitions, ending deposits increased $144.5 million, or 1.0%, from one year prior. |
| · | Ending borrowings of $636.0 million at September 30, 2026, which consisted of $412.9 million of fixed rate Federal Home Loan Bank of New York term borrowings, $215.0 million of customer repurchase agreements and $8.1 million of finance lease liabilities, decreased $128.1 million, or 16.8%, from the end of the second quarter of 2026 and decreased $127.3 million, or 16.7%, from one year prior. The decrease between both periods primarily reflected a decrease in overnight borrowings following the Company’s redeployment of cash from the sale of $296.8 million of lower-yielding available-for-sale U.S. Treasury securities. |
| · | The Company’s average cost of funds of 1.16% decreased 17 basis points from the third quarter of 2025 and decreased 2 basis points from the second quarter of 2026. The decreases between both periods reflected lower average deposit costs and a lower proportion of funding from higher rate borrowings. |
| · | The quarterly average cost of total deposits of 1.03% remains comparatively low relative to the industry and decreased 14 basis points from the third quarter of 2025 and 4 basis points from the linked second quarter of 2026. |
| · | 66% of the Company’s total deposits were in no- and relatively low-rate checking and savings accounts at the end of the third quarter of 2026. Time deposit accounts represented 13% of the Company’s total deposits at the end of the third quarter of 2026, a decrease of 1 percentage point from September 30, 2025 and the end of the linked second quarter. |
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 (nonaccrual loans and accruing loans 90 days or more past due) 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 September 30, 2026 totaled $11.52 billion, an increase of $235.2 million, or 2.1%, compared to June 30, 2026 and an increase of $767.8 million, or 7.1%, compared to one year prior. The increases between both periods 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 16% of total assets, 25% of total loans and 202% of total bank-level regulatory capital. |
| · | At September 30, 2026, the Company’s allowance for credit losses totaled $92.0 million, or 0.80% of total loans outstanding, compared to $91.7 million, or 0.81% of total loans outstanding, at June 30, 2026, and $84.9 million, or 0.79% of total loans outstanding, at September 30, 2025. The increase from one year prior was driven by a net reserve build in the business lending portfolio reflective of organic loan growth, including growth in larger commercial lending relationships and higher qualitative reserve factors related to those exposures, along with a moderate increase in delinquent loan balances. |
| · | The Company recorded a $5.6 million provision for credit losses during the third quarter of 2026 compared to $4.6 million in the linked second quarter and $5.6 million in the prior year’s third quarter. |
| · | The Company recorded net charge-offs of $5.1 million, or an annualized 0.18% of average loans, in the third quarter of 2026 compared to net charge-offs of $2.5 million, or an annualized 0.09% of average loans, in the third quarter of 2025 and net charge-offs of $3.3 million, or an annualized 0.12% of average loans, in the second quarter of 2026. The increase in net charge-offs compared to both periods was primarily driven by $2.7 million of charge-offs recognized in the third quarter of 2026 on 2 individually assessed business lending relationships for which specific allowance allocations had previously been established. |
| · | Total delinquent loans, consisting of loans 30 or more days past due and nonaccrual loans, as a percentage of total loans outstanding was 1.16% at the end of the third quarter of 2026. This compares to 1.04% at June 30, 2026 and 1.00% at September 30, 2025. The increases between both periods were primarily driven by higher delinquent balances of business lending and consumer mortgage loans. |
| · | At September 30, 2026, nonperforming loans were $60.4 million, or 0.52% of total loans outstanding, compared to $56.8 million, or 0.50% of total loans outstanding at June 30, 2026, and $56.1 million, or 0.52% of total loans outstanding, one year earlier. |
6
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 September 30, 2026, all of the regulatory capital ratios of the Company and Community Bank, N.A. (“CBNA”) significantly exceeded well-capitalized standards.
| · | Shareholders’ equity of $2.03 billion at September 30, 2026 was $91.6 million, or 4.7%, higher than one year ago, primarily due to a $134.6 million increase in retained earnings partially offset by a $34.2 million increase in accumulated other comprehensive loss related to the Company’s investment securities portfolio. Shareholders’ equity decreased $42.2 million, or 2.0%, from June 30, 2026, primarily driven by a $61.6 million increase in accumulated other comprehensive loss related to the Company’s investment securities portfolio, partially offset by a $35.9 million increase in retained earnings. |
| · | The Company’s shareholders’ equity to assets ratio was 11.42% at September 30, 2026, a decrease from 11.43% at September 30, 2025 and 11.67% at June 30, 2026. |
| · | The Company’s tier 1 leverage ratio of 9.37% at September 30, 2026 remained substantially above the regulatory well-capitalized standard of 5.0% and decreased 9 basis points from one year earlier and increased 11 basis points from June 30, 2026. 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 and ClearPoint acquisitions, as well as the impact of $31.8 million of common stock repurchases over the past twelve months. |
| · | The Company’s tangible equity to tangible assets ratio (non-GAAP) was 6.57% at September 30, 2026, down from 6.73% a year earlier and 6.86% at June 30, 2026. Tangible equity (non-GAAP) increased $25.6 million, or 2.4%, from one year prior due to the aforementioned increase in retained earnings that was partially offset by an increase in accumulated other comprehensive loss related to the Company’s investment securities portfolio and the intangible assets added as part of the Santander branch and ClearPoint acquisitions. Tangible assets (non-GAAP) increased $764.2 million, or 4.7%, from the prior year due primarily to organic loan growth, supported by the funding generated from the Santander branch acquisition and the ClearPoint acquisition. |
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 $0.02 increase in the quarterly dividend declared in the third quarter of 2026 marked the 34th consecutive year of dividend increases for the Company.
| · | During the third quarter of 2026, the Company declared a quarterly cash dividend of $0.49 per share on its common stock, up 4.3% from the $0.47 dividend declared in the second quarter of 2026 and the third quarter of 2025. |
| · | On October 21, 2026, the Company announced a quarterly cash dividend of $0.49 per share on its common stock, payable on January 11, 2027 to shareholders of record as of December 15, 2026, representing an annualized yield of 3.1% based upon on the $62.32 closing price of the Company’s stock on October 26, 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 508,471 shares repurchased pursuant to the 2026 stock repurchase program during the first nine months of 2026, including 250,000 shares repurchased during the third quarter of 2026. |
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, acquisition-related contingent consideration adjustments, restructuring expenses, litigation accrual, gain (loss) on investment 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 adds back the provision for credit losses, acquisition expenses, acquisition-related contingent consideration adjustments, restructuring expenses, litigation accrual, gain (loss) on investment 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 FTE 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, October 27, 2026, to discuss the third quarter 2026 results. The conference call can be accessed via webcast at https://app.webinar.net/EmXoj28zpxQ 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://ir.cfsi.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 63 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://ir.cfsi.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://ir.cfsi.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) | ||||
| Quarter Ended | Year-to-Date | |||
| September 30, 2026 | September 30, 2025 | September 30, 2026 | September 30, 2025 | |
| Earnings | ||||
| Loan income | $163,343 | $152,509 | $475,251 | $441,947 |
| Investment income | 24,906 | 24,774 | 77,337 | 75,861 |
| Total interest income | 188,249 | 177,283 | 552,588 | 517,808 |
| Interest expense | 44,705 | 49,118 | 135,188 | 144,683 |
| Net interest income | 143,544 | 128,165 | 417,400 | 373,125 |
| Provision for credit losses | 5,560 | 5,564 | 15,803 | 16,371 |
| Net interest income after provision for credit losses | 137,984 | 122,601 | 401,597 | 356,754 |
| Deposit service fees and other banking services | 22,462 | 21,160 | 65,562 | 60,324 |
| Employee benefit services | 36,402 | 34,408 | 105,851 | 99,410 |
| Insurance services | 14,611 | 14,137 | 40,392 | 41,726 |
| Wealth management services | 12,384 | 8,946 | 33,119 | 27,491 |
| (Loss) gain on investment securities | (2,916) | 236 | 1,393 | 480 |
| Gain from equity method investments | 804 | 0 | 15 | 0 |
| Total noninterest revenues | 83,747 | 78,887 | 246,332 | 229,431 |
| Salaries and employee benefits | 83,945 | 76,532 | 246,698 | 231,995 |
| Data processing and communications | 21,597 | 19,119 | 59,154 | 51,940 |
| Occupancy and equipment | 14,035 | 11,419 | 42,802 | 35,603 |
| Business development and marketing | 2,395 | 4,585 | 7,486 | 11,716 |
| Legal and professional fees | 4,884 | 4,469 | 14,268 | 13,686 |
| Amortization of intangible assets | 4,325 | 3,258 | 12,979 | 10,109 |
| Other | 9,849 | 8,937 | 28,412 | 27,662 |
| Total noninterest expenses | 141,030 | 128,319 | 411,799 | 382,711 |
| Income before income taxes | 80,701 | 73,169 | 236,130 | 203,474 |
| Income taxes | 19,397 | 18,081 | 56,274 | 47,441 |
| Net income | $61,304 | $55,088 | $179,856 | $156,033 |
| Basic earnings per share | $1.16 | $1.04 | $3.41 | $2.95 |
| Diluted earnings per share | $1.16 | $1.04 | $3.39 | $2.94 |
9
| Summary of Financial Data (unaudited) | |||||
| (Dollars in thousands, except per share data) | |||||
| 2026 | 2025 | ||||
| 3rd Qtr | 2nd Qtr | 1st Qtr | 4th Qtr | 3rd Qtr | |
| Earnings | |||||
| Loan income | $163,343 | $157,530 | $154,378 | $154,768 | $152,509 |
| Investment income | 24,906 | 26,822 | 25,609 | 26,699 | 24,774 |
| Total interest income | 188,249 | 184,352 | 179,987 | 181,467 | 177,283 |
| Interest expense | 44,705 | 45,208 | 45,275 | 48,042 | 49,118 |
| Net interest income | 143,544 | 139,144 | 134,712 | 133,425 | 128,165 |
| Provision for credit losses | 5,560 | 4,607 | 5,636 | 4,979 | 5,564 |
| Net interest income after provision for credit losses | 137,984 | 134,537 | 129,076 | 128,446 | 122,601 |
| Deposit service fees and other banking services | 22,462 | 21,289 | 21,811 | 23,594 | 21,160 |
| Employee benefit services | 36,402 | 34,877 | 34,572 | 36,564 | 34,408 |
| Insurance services | 14,611 | 13,195 | 12,586 | 12,684 | 14,137 |
| Wealth management services | 12,384 | 10,403 | 10,332 | 9,574 | 8,946 |
| (Loss) gain on investment securities | (2,916) | 4,710 | (401) | (105) | 236 |
| Gain (loss) from equity method investments | 804 | (463) | (326) | (285) | 0 |
| Total noninterest revenues | 83,747 | 84,011 | 78,574 | 82,026 | 78,887 |
| Salaries and employee benefits | 83,945 | 82,431 | 80,322 | 81,920 | 76,532 |
| Data processing and communications | 21,597 | 19,686 | 17,871 | 18,221 | 19,119 |
| Occupancy and equipment | 14,035 | 13,885 | 14,882 | 12,646 | 11,419 |
| Business development and marketing | 2,395 | 2,556 | 2,535 | 3,419 | 4,585 |
| Legal and professional fees | 4,884 | 4,314 | 5,070 | 4,212 | 4,469 |
| Amortization of intangible assets | 4,325 | 4,408 | 4,246 | 3,737 | 3,258 |
| Other | 9,849 | 10,453 | 8,110 | 14,397 | 8,937 |
| Total noninterest expenses | 141,030 | 137,733 | 133,036 | 138,552 | 128,319 |
| Income before income taxes | 80,701 | 80,815 | 74,614 | 71,920 | 73,169 |
| Income taxes | 19,397 | 19,481 | 17,396 | 17,498 | 18,081 |
| Net income | $61,304 | $61,334 | $57,218 | $54,422 | $55,088 |
| Basic earnings per share | $1.16 | $1.16 | $1.08 | $1.03 | $1.04 |
| Diluted earnings per share | $1.16 | $1.16 | $1.08 | $1.03 | $1.04 |
| Profitability (GAAP) | |||||
| Return on assets (GAAP) | 1.38% | 1.40% | 1.33% | 1.26% | 1.30% |
| Return on equity (GAAP) | 11.82% | 12.10% | 11.51% | 11.04% | 11.62% |
| Noninterest revenues/total revenues (GAAP) | 36.8% | 37.6% | 36.8% | 38.1% | 38.1% |
| Efficiency ratio (GAAP) | 62.0% | 61.7% | 62.4% | 64.3% | 62.0% |
| Profitability (non-GAAP) | |||||
| Operating return on assets (non-GAAP) | 1.51% | 1.40% | 1.42% | 1.38% | 1.38% |
| Operating return on equity (non-GAAP) | 12.93% | 12.13% | 12.30% | 12.08% | 12.25% |
| Return on tangible equity (non-GAAP) | 22.51% | 22.91% | 21.96% | 20.88% | 22.27% |
| Operating return on tangible equity (non-GAAP) | 23.35% | 21.76% | 22.19% | 21.70% | 22.43% |
| Operating noninterest revenues/operating revenues (FTE) (non-GAAP) | 37.5% | 36.2% | 36.8% | 37.9% | 37.9% |
| Operating efficiency ratio (non-GAAP) | 59.0% | 60.6% | 59.8% | 61.0% | 59.9% |
10
| Summary of Financial Data (unaudited) | |||||
| (Dollars in thousands, except per share data) | |||||
| 2026 | 2025 | ||||
| 3rd Qtr | 2nd Qtr | 1st Qtr | 4th Qtr | 3rd Qtr | |
| Components of Net Interest Margin (FTE) | |||||
| Loan yield | 5.69% | 5.66% | 5.68% | 5.68% | 5.68% |
| Cash equivalents yield | 3.47% | 3.60% | 3.61% | 3.84% | 3.92% |
| Investment yield | 2.15% | 2.17% | 2.10% | 2.14% | 2.12% |
| Earning asset yield | 4.67% | 4.61% | 4.60% | 4.60% | 4.59% |
| Interest-bearing deposit rate | 1.40% | 1.44% | 1.47% | 1.55% | 1.59% |
| Borrowing rate | 3.69% | 3.63% | 3.55% | 3.57% | 3.82% |
| Cost of all interest-bearing funds | 1.55% | 1.56% | 1.59% | 1.68% | 1.76% |
| Cost of total deposits | 1.03% | 1.07% | 1.10% | 1.15% | 1.17% |
| Cost of funds (includes noninterest-bearing deposits) | 1.16% | 1.18% | 1.20% | 1.27% | 1.33% |
| Net interest margin | 3.54% | 3.46% | 3.43% | 3.37% | 3.30% |
| Net interest margin (FTE) (non-GAAP) | 3.56% | 3.49% | 3.45% | 3.39% | 3.33% |
| Fully tax-equivalent adjustment (non-GAAP) | $1,010 | $893 | $850 | $875 | $880 |
| Average Balances | |||||
| Loans | $11,394,304 | $11,177,112 | $11,029,905 | $10,819,267 | $10,664,241 |
| Cash equivalents | 89,940 | 221,063 | 230,593 | 223,700 | 46,550 |
| Taxable investment securities | 4,150,509 | 4,294,350 | 4,272,245 | 4,266,451 | 4,268,660 |
| Nontaxable investment securities | 455,563 | 420,288 | 407,433 | 411,771 | 413,663 |
| Total interest-earning assets | 16,090,316 | 16,112,813 | 15,940,176 | 15,721,189 | 15,393,114 |
| Total assets | 17,629,657 | 17,621,066 | 17,468,804 | 17,179,984 | 16,755,095 |
| Interest checking, savings and money market deposits | 8,702,909 | 8,857,654 | 8,685,727 | 8,470,840 | 8,086,979 |
| Time deposits | 2,041,082 | 2,102,360 | 2,185,114 | 2,138,368 | 2,088,861 |
| Customer repurchase agreements | 177,119 | 190,610 | 214,361 | 220,670 | 187,845 |
| Overnight borrowings | 114,782 | 15,709 | 9,406 | 37,554 | 151,495 |
| FHLB and other borrowings | 425,398 | 437,956 | 450,643 | 462,991 | 531,979 |
| Total interest-bearing liabilities | 11,461,290 | 11,604,289 | 11,545,251 | 11,330,423 | 11,047,159 |
| Noninterest-bearing deposits | 3,887,344 | 3,799,141 | 3,703,510 | 3,702,200 | 3,640,964 |
| Shareholders' equity | 2,057,528 | 2,032,654 | 2,016,141 | 1,955,306 | 1,881,116 |
11
| Summary of Financial Data (unaudited) | |||||
| (Dollars in thousands, except per share data) | |||||
| 2026 | 2025 | ||||
| 3rd Qtr | 2nd Qtr | 1st Qtr | 4th Qtr | 3rd Qtr | |
| Balance Sheet Data | |||||
| Cash and cash equivalents | $424,636 | $258,174 | $572,173 | $301,755 | $245,247 |
| Investment securities: | |||||
| Available-for-sale | 2,555,576 | 2,957,963 | 2,848,132 | 2,875,341 | 2,859,312 |
| Held-to-maturity | 1,493,248 | 1,478,386 | 1,460,750 | 1,454,166 | 1,442,308 |
| Equity and other | 71,315 | 87,857 | 81,717 | 77,252 | 78,944 |
| Total investment securities | 4,120,139 | 4,524,206 | 4,390,599 | 4,406,759 | 4,380,564 |
| Loans: | |||||
| Business lending | 5,187,859 | 5,040,619 | 4,883,451 | 4,733,867 | 4,663,878 |
| Consumer mortgage | 3,682,083 | 3,629,301 | 3,619,067 | 3,617,186 | 3,544,277 |
| Consumer indirect | 1,890,340 | 1,871,343 | 1,894,011 | 1,859,354 | 1,834,766 |
| Home equity | 549,689 | 539,174 | 534,439 | 533,755 | 510,933 |
| Consumer direct | 208,084 | 202,387 | 200,216 | 205,595 | 196,408 |
| Total loans | 11,518,055 | 11,282,824 | 11,131,184 | 10,949,757 | 10,750,262 |
| Allowance for credit losses | 92,020 | 91,696 | 90,193 | 87,921 | 84,944 |
| Goodwill and intangible assets, net | 967,421 | 963,694 | 943,314 | 942,716 | 899,967 |
| Other assets | 849,742 | 826,568 | 797,782 | 790,230 | 766,708 |
| Total assets | 17,787,973 | 17,763,770 | 17,744,859 | 17,303,296 | 16,957,804 |
| Deposits: | |||||
| Noninterest-bearing | 3,893,414 | 3,872,611 | 3,732,720 | 3,683,442 | 3,686,772 |
| Non-maturity interest-bearing | 8,969,042 | 8,767,234 | 8,997,532 | 8,497,337 | 8,337,797 |
| Time | 2,002,650 | 2,070,564 | 2,139,870 | 2,206,306 | 2,032,281 |
| Total deposits | 14,865,106 | 14,710,409 | 14,870,122 | 14,387,085 | 14,056,850 |
| Customer repurchase agreements | 215,037 | 157,577 | 201,027 | 231,163 | 224,169 |
| Other borrowings | 420,972 | 606,520 | 446,319 | 458,770 | 539,180 |
| Accrued interest and other liabilities | 256,273 | 216,499 | 203,399 | 220,244 | 198,655 |
| Total liabilities | 15,757,388 | 15,691,005 | 15,720,867 | 15,297,262 | 15,018,854 |
| Shareholders' equity | 2,030,585 | 2,072,765 | 2,023,992 | 2,006,034 | 1,938,950 |
| Total liabilities and shareholders' equity | 17,787,973 | 17,763,770 | 17,744,859 | 17,303,296 | 16,957,804 |
| Capital and Other | |||||
| Shareholders’ equity/total assets (GAAP) | 11.42% | 11.67% | 11.41% | 11.59% | 11.43% |
| Tangible equity/tangible assets (non-GAAP) | 6.57% | 6.86% | 6.68% | 6.75% | 6.73% |
| Tier 1 leverage ratio | 9.37% | 9.26% | 9.20% | 9.21% | 9.46% |
| Loan-to-deposit ratio | 77.5% | 76.7% | 74.9% | 76.1% | 76.5% |
| Diluted weighted average common shares outstanding | 52,928 | 52,915 | 52,967 | 52,959 | 53,036 |
| Period end common shares outstanding | 52,377 | 52,598 | 52,537 | 52,682 | 52,662 |
| Cash dividends declared per common share | $0.49 | $0.47 | $0.47 | $0.47 | $0.47 |
| Book value (GAAP) | $38.77 | $39.41 | $38.53 | $38.08 | $36.82 |
| Tangible book value (non-GAAP) | $21.17 | $21.96 | $21.40 | $21.02 | $20.57 |
| Common stock price at quarter-end | $59.54 | $67.12 | $58.65 | $57.44 | $58.64 |
12
| Summary of Financial Data (unaudited) | |||||
| (Dollars in thousands, except per share data) | |||||
| 2026 | 2025 | ||||
| 3rd Qtr | 2nd Qtr | 1st Qtr | 4th Qtr | 3rd Qtr | |
| Asset Quality | |||||
| Nonaccrual loans | $49,608 | $49,690 | $47,103 | $49,509 | $49,327 |
| Accruing loans 90+ days delinquent | 10,837 | 7,112 | 6,595 | 6,948 | 6,730 |
| Total nonperforming loans | 60,445 | 56,802 | 53,698 | 56,457 | 56,057 |
| Other real estate owned | 7,268 | 7,699 | 8,134 | 8,209 | 7,851 |
| Total nonperforming assets | 67,713 | 64,501 | 61,832 | 64,666 | 63,908 |
| Net charge-offs | 5,111 | 3,297 | 2,972 | 2,328 | 2,471 |
| Allowance for credit losses/loans outstanding | 0.80% | 0.81% | 0.81% | 0.80% | 0.79% |
| Nonperforming loans/loans outstanding | 0.52% | 0.50% | 0.48% | 0.52% | 0.52% |
| Allowance for credit losses/nonperforming loans | 152% | 161% | 168% | 156% | 152% |
| Net charge-offs/average loans | 0.18% | 0.12% | 0.11% | 0.09% | 0.09% |
| Delinquent loans/ending loans | 1.16% | 1.04% | 1.12% | 1.10% | 1.00% |
| Provision for credit losses/net charge-offs | 109% | 140% | 190% | 214% | 225% |
| Nonperforming assets/total assets | 0.38% | 0.36% | 0.35% | 0.37% | 0.38% |
| Quarterly GAAP to Non-GAAP Reconciliations | |||||
| Operating pre-tax, pre-provision net revenue (non-GAAP) | |||||
| Net income (GAAP) | $61,304 | $61,334 | $57,218 | $54,422 | $55,088 |
| Income taxes | 19,397 | 19,481 | 17,396 | 17,498 | 18,081 |
| Income before income taxes | 80,701 | 80,815 | 74,614 | 71,920 | 73,169 |
| Provision for credit losses | 5,560 | 4,607 | 5,636 | 4,979 | 5,564 |
| Pre-tax, pre-provision net revenue (non-GAAP) | 86,261 | 85,422 | 80,250 | 76,899 | 78,733 |
| Acquisition expenses | 206 | 231 | 433 | 2,848 | 747 |
| Acquisition-related contingent consideration adjustments | 0 | (103) | 0 | 0 | 0 |
| Restructuring expenses | 0 | 0 | 0 | (26) | 0 |
| Litigation accrual | 0 | 335 | 0 | 0 | 0 |
| Loss (gain) on investment securities | 2,916 | (4,710) | 401 | 105 | (236) |
| Amortization of intangible assets | 4,325 | 4,408 | 4,246 | 3,737 | 3,258 |
| Operating pre-tax, pre-provision net revenue (non-GAAP) | $93,708 | $85,583 | $85,330 | $83,563 | $82,502 |
| Operating pre-tax, pre-provision net revenue per share (non-GAAP) | |||||
| Diluted earnings per share (GAAP) | $1.16 | $1.16 | $1.08 | $1.03 | $1.04 |
| Income taxes | 0.36 | 0.37 | 0.33 | 0.33 | 0.34 |
| Income before income taxes | 1.52 | 1.53 | 1.41 | 1.36 | 1.38 |
| Provision for credit losses | 0.12 | 0.09 | 0.11 | 0.10 | 0.11 |
| Pre-tax, pre-provision net revenue per share (non-GAAP) | 1.64 | 1.62 | 1.52 | 1.46 | 1.49 |
| Acquisition expenses | 0.00 | 0.00 | 0.01 | 0.05 | 0.01 |
| Acquisition-related contingent consideration adjustments | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Restructuring expenses | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Litigation accrual | 0.00 | 0.01 | 0.00 | 0.00 | 0.00 |
| Loss (gain) on investment securities | 0.05 | (0.09) | 0.00 | 0.00 | 0.00 |
| Amortization of intangible assets | 0.08 | 0.08 | 0.08 | 0.07 | 0.06 |
| Operating pre-tax, pre-provision net revenue per share (non-GAAP) | $1.77 | $1.62 | $1.61 | $1.58 | $1.56 |
13
| Summary of Financial Data (unaudited) | |||||
| (Dollars in thousands, except per share data) | |||||
| 2026 | 2025 | ||||
| 3rd Qtr | 2nd Qtr | 1st Qtr | 4th Qtr | 3rd Qtr | |
| Quarterly GAAP to Non-GAAP Reconciliations | |||||
| Operating net income (non-GAAP) | |||||
| Net income (GAAP) | $61,304 | $61,334 | $57,218 | $54,422 | $55,088 |
| Acquisition expenses | 206 | 231 | 433 | 2,848 | 747 |
| Tax effect of acquisition expenses | (47) | (53) | (99) | (658) | (155) |
| Subtotal (non-GAAP) | 61,463 | 61,512 | 57,552 | 56,612 | 55,680 |
| Acquisition-related contingent consideration adjustments | 0 | (103) | 0 | 0 | 0 |
| Tax effect of acquisition-related contingent consideration adjustments | 0 | 24 | 0 | 0 | 0 |
| Subtotal (non-GAAP) | 61,463 | 61,433 | 57,552 | 56,612 | 55,680 |
| Restructuring expenses | 0 | 0 | 0 | (26) | 0 |
| Tax effect of restructuring expenses | 0 | 0 | 0 | 6 | 0 |
| Subtotal (non-GAAP) | 61,463 | 61,433 | 57,552 | 56,592 | 55,680 |
| Litigation accrual | 0 | 335 | 0 | 0 | 0 |
| Tax effect of litigation accrual | 0 | (78) | 0 | 0 | 0 |
| Subtotal (non-GAAP) | 61,463 | 61,690 | 57,552 | 56,592 | 55,680 |
| Loss (gain) on investment securities | 2,916 | (4,710) | 401 | 105 | (236) |
| Tax effect of loss (gain) on investment securities | (671) | 1,090 | (91) | (24) | 49 |
| Subtotal (non-GAAP) | 63,708 | 58,070 | 57,862 | 56,673 | 55,493 |
| Amortization of intangible assets | 4,325 | 4,408 | 4,246 | 3,737 | 3,258 |
| Tax effect of amortization of intangible assets | (996) | (1,020) | (967) | (863) | (677) |
| Operating net income (non-GAAP) | $67,037 | $61,458 | $61,141 | $59,547 | $58,074 |
| Operating diluted earnings per share (non-GAAP) | |||||
| Diluted earnings per share (GAAP) | $1.16 | $1.16 | $1.08 | $1.03 | $1.04 |
| Acquisition expenses | 0.00 | 0.00 | 0.01 | 0.05 | 0.01 |
| Tax effect of acquisition expenses | 0.00 | 0.00 | 0.00 | (0.01) | 0.00 |
| Subtotal (non-GAAP) | 1.16 | 1.16 | 1.09 | 1.07 | 1.05 |
| Acquisition-related contingent consideration adjustments | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Tax effect of acquisition-related contingent consideration adjustments | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Subtotal (non-GAAP) | 1.16 | 1.16 | 1.09 | 1.07 | 1.05 |
| Restructuring expenses | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Tax effect of restructuring expenses | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Subtotal (non-GAAP) | 1.16 | 1.16 | 1.09 | 1.07 | 1.05 |
| Litigation accrual | 0.00 | 0.01 | 0.00 | 0.00 | 0.00 |
| Tax effect of litigation accrual | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Subtotal (non-GAAP) | 1.16 | 1.17 | 1.09 | 1.07 | 1.05 |
| Loss (gain) on investment securities | 0.05 | (0.09) | 0.00 | 0.00 | 0.00 |
| Tax effect of loss (gain) on investment securities | (0.01) | 0.02 | 0.00 | 0.00 | 0.00 |
| Subtotal (non-GAAP) | 1.20 | 1.10 | 1.09 | 1.07 | 1.05 |
| Amortization of intangible assets | 0.08 | 0.08 | 0.08 | 0.07 | 0.06 |
| Tax effect of amortization of intangible assets | (0.01) | (0.02) | (0.02) | (0.02) | (0.02) |
| Operating diluted earnings per share (non-GAAP) | $1.27 | $1.16 | $1.15 | $1.12 | $1.09 |
14
| Summary of Financial Data (unaudited) | |||||
| (Dollars in thousands, except per share data) | |||||
| 2026 | 2025 | ||||
| 3rd Qtr | 2nd Qtr | 1st Qtr | 4th Qtr | 3rd Qtr | |
| Quarterly GAAP to Non-GAAP Reconciliations | |||||
| Return on assets | |||||
| Net income (GAAP) | $61,304 | $61,334 | $57,218 | $54,422 | $55,088 |
| Average total assets | 17,629,657 | 17,621,066 | 17,468,804 | 17,179,984 | 16,755,095 |
| Return on assets (GAAP) | 1.38% | 1.40% | 1.33% | 1.26% | 1.30% |
| Operating return on assets (non-GAAP) | |||||
| Operating net income (non-GAAP) | $67,037 | $61,458 | $61,141 | $59,547 | $58,074 |
| Average total assets | 17,629,657 | 17,621,066 | 17,468,804 | 17,179,984 | 16,755,095 |
| Operating return on assets (non-GAAP) | 1.51% | 1.40% | 1.42% | 1.38% | 1.38% |
| Return on equity | |||||
| Net income (GAAP) | $61,304 | $61,334 | $57,218 | $54,422 | $55,088 |
| Average total equity | 2,057,528 | 2,032,654 | 2,016,141 | 1,955,306 | 1,881,116 |
| Return on equity (GAAP) | 11.82% | 12.10% | 11.51% | 11.04% | 11.62% |
| Operating return on equity (non-GAAP) | |||||
| Operating net income (non-GAAP) | $67,037 | $61,458 | $61,141 | $59,547 | $58,074 |
| Average total equity | 2,057,528 | 2,032,654 | 2,016,141 | 1,955,306 | 1,881,116 |
| Operating return on equity (non-GAAP) | 12.93% | 12.13% | 12.30% | 12.08% | 12.25% |
| Net interest margin | |||||
| Net interest income | $143,544 | $139,144 | $134,712 | $133,425 | $128,165 |
| Total average interest-earning assets | 16,090,316 | 16,112,813 | 15,940,176 | 15,721,189 | 15,393,114 |
| Net interest margin | 3.54% | 3.46% | 3.43% | 3.37% | 3.30% |
| Net interest margin (FTE) (non-GAAP) | |||||
| Net interest income | $143,544 | $139,144 | $134,712 | $133,425 | $128,165 |
| Fully tax-equivalent adjustment (non-GAAP) | 1,010 | 893 | 850 | 875 | 880 |
| Fully tax-equivalent net interest income (non-GAAP) | 144,554 | 140,037 | 135,562 | 134,300 | 129,045 |
| Total average interest-earning assets | 16,090,316 | 16,112,813 | 15,940,176 | 15,721,189 | 15,393,114 |
| Net interest margin (FTE) (non-GAAP) | 3.56% | 3.49% | 3.45% | 3.39% | 3.33% |
| Operating noninterest revenues (non-GAAP) | |||||
| Noninterest revenues (GAAP) | $83,747 | $84,011 | $78,574 | $82,026 | $78,887 |
| Loss (gain) on investment securities | 2,916 | (4,710) | 401 | 105 | (236) |
| Total operating noninterest revenues (non-GAAP) | $86,663 | $79,301 | $78,975 | $82,131 | $78,651 |
| Operating noninterest expenses (non-GAAP) | |||||
| Noninterest expenses (GAAP) | $141,030 | $137,733 | $133,036 | $138,552 | $128,319 |
| Acquisition expenses | (206) | (231) | (433) | (2,848) | (747) |
| Acquisition-related contingent consideration adjustments | 0 | 103 | 0 | 0 | 0 |
| Restructuring expenses | 0 | 0 | 0 | 26 | 0 |
| Litigation accrual | 0 | (335) | 0 | 0 | 0 |
| Amortization of intangible assets | (4,325) | (4,408) | (4,246) | (3,737) | (3,258) |
| Total operating noninterest expenses (non-GAAP) | $136,499 | $132,862 | $128,357 | $131,993 | $124,314 |
15
| Summary of Financial Data (unaudited) | |||||
| (Dollars in thousands, except per share data) | |||||
| 2026 | 2025 | ||||
| 3rd Qtr | 2nd Qtr | 1st Qtr | 4th Qtr | 3rd Qtr | |
| Quarterly GAAP to Non-GAAP Reconciliations | |||||
| Operating revenues (non-GAAP) | |||||
| Net interest income (GAAP) | $143,544 | $139,144 | $134,712 | $133,425 | $128,165 |
| Noninterest revenues (GAAP) | 83,747 | 84,011 | 78,574 | 82,026 | 78,887 |
| Total revenues (GAAP) | 227,291 | 223,155 | 213,286 | 215,451 | 207,052 |
| Loss (gain) on investment securities | 2,916 | (4,710) | 401 | 105 | (236) |
| Total operating revenues (non-GAAP) | $230,207 | $218,445 | $213,687 | $215,556 | $206,816 |
| Noninterest revenues/total revenues | |||||
| Total noninterest revenues (GAAP) – numerator | $83,747 | $84,011 | $78,574 | $82,026 | $78,887 |
| Total revenues (GAAP) – denominator | 227,291 | 223,155 | 213,286 | 215,451 | 207,052 |
| Noninterest revenues/total revenues (GAAP) | 36.8% | 37.6% | 36.8% | 38.1% | 38.1% |
| Operating noninterest revenues/operating revenues (FTE) (non-GAAP) | |||||
| Total operating noninterest revenues (non-GAAP) – numerator | $86,663 | $79,301 | $78,975 | $82,131 | $78,651 |
| Total operating revenues (non-GAAP) | 230,207 | 218,445 | 213,687 | 215,556 | 206,816 |
| Fully tax-equivalent adjustment (non-GAAP) | 1,010 | 893 | 850 | 875 | 880 |
| Total operating revenues (FTE) (non-GAAP) – denominator | 231,217 | 219,338 | 214,537 | 216,431 | 207,696 |
|
Operating noninterest revenues/operating revenues (FTE) (non- GAAP) |
37.5% | 36.2% | 36.8% | 37.9% | 37.9% |
| Efficiency ratio (GAAP) | |||||
| Total noninterest expenses (GAAP) – numerator | $141,030 | $137,733 | $133,036 | $138,552 | $128,319 |
| Total revenues (GAAP) – denominator | 227,291 | 223,155 | 213,286 | 215,451 | 207,052 |
| Efficiency ratio (GAAP) | 62.0% | 61.7% | 62.4% | 64.3% | 62.0% |
| Operating efficiency ratio (non-GAAP) | |||||
| Total operating noninterest expenses (non-GAAP) - numerator | $136,499 | $132,862 | $128,357 | $131,993 | $124,314 |
| Total operating revenues (FTE) (non-GAAP) - denominator | 231,217 | 219,338 | 214,537 | 216,431 | 207,696 |
| Operating efficiency ratio (non-GAAP) | 59.0% | 60.6% | 59.8% | 61.0% | 59.9% |
| Total tangible assets (non-GAAP) | |||||
| Total assets (GAAP) | $17,787,973 | $17,763,770 | $17,744,859 | $17,303,296 | $16,957,804 |
| Goodwill and intangible assets, net | (967,421) | (963,694) | (943,314) | (942,716) | (899,967) |
| Deferred taxes on goodwill and intangible assets, net | 45,582 | 45,873 | 43,752 | 43,905 | 44,130 |
| Total tangible assets (non-GAAP) | $16,866,134 | $16,845,949 | $16,845,297 | $16,404,485 | $16,101,967 |
| Total tangible common equity (non-GAAP) | |||||
| Shareholders' equity (GAAP) | $2,030,585 | $2,072,765 | $2,023,992 | $2,006,034 | $1,938,950 |
| Goodwill and intangible assets, net | (967,421) | (963,694) | (943,314) | (942,716) | (899,967) |
| Deferred taxes on goodwill and intangible assets, net | 45,582 | 45,873 | 43,752 | 43,905 | 44,130 |
| Total tangible common equity (non-GAAP) | $1,108,746 | $1,154,944 | $1,124,430 | $1,107,223 | $1,083,113 |
16
| Summary of Financial Data (unaudited) | |||||
| (Dollars in thousands, except per share data) | |||||
| 2026 | 2025 | ||||
| 3rd Qtr | 2nd Qtr | 1st Qtr | 4th Qtr | 3rd Qtr | |
| Quarterly GAAP to Non-GAAP Reconciliations | |||||
| Shareholders’ equity-to-assets ratio at quarter end | |||||
| Total shareholders’ equity (GAAP) – numerator | $2,030,585 | $2,072,765 | $2,023,992 | $2,006,034 | $1,938,950 |
| Total assets (GAAP) – denominator | 17,787,973 | 17,763,770 | 17,744,859 | 17,303,296 | 16,957,804 |
| Shareholders’ equity-to-assets ratio at quarter end (GAAP) | 11.42% | 11.67% | 11.41% | 11.59% | 11.43% |
| Tangible equity-to-tangible assets ratio at quarter end (non-GAAP) | |||||
| Total tangible common equity (non-GAAP) - numerator | $1,108,746 | $1,154,944 | $1,124,430 | $1,107,223 | $1,083,113 |
| Total tangible assets (non-GAAP) - denominator | 16,866,134 | 16,845,949 | 16,845,297 | 16,404,485 | 16,101,967 |
| Tangible equity-to-tangible assets ratio at quarter end (non-GAAP) | 6.57% | 6.86% | 6.68% | 6.75% | 6.73% |
| Return on tangible equity (non-GAAP) | |||||
| Net income (GAAP) | $61,304 | $61,334 | $57,218 | $54,422 | $55,088 |
| Amortization of intangible assets, net of tax | 3,329 | 3,388 | 3,279 | 2,874 | 2,581 |
| Net income, excluding amortization of intangible assets (non-GAAP) | 64,633 | 64,722 | 60,497 | 57,296 | 57,669 |
| Average shareholders’ equity | 2,057,528 | 2,032,654 | 2,016,141 | 1,955,306 | 1,881,116 |
| Average goodwill and intangible assets, net | (964,275) | (944,432) | (942,701) | (910,627) | (897,943) |
| Average deferred taxes on goodwill and intangible assets, net | 45,728 | 44,813 | 43,829 | 44,018 | 44,233 |
| Average tangible common equity (non-GAAP) | 1,138,981 | 1,133,035 | 1,117,269 | 1,088,697 | 1,027,406 |
| Return on tangible equity (non-GAAP) | 22.51% | 22.91% | 21.96% | 20.88% | 22.27% |
| Operating return on tangible equity (non-GAAP) | |||||
| Operating net income (non-GAAP) | $67,037 | $61,458 | $61,141 | $59,547 | $58,074 |
| Average tangible common equity (non-GAAP) | 1,138,981 | 1,133,035 | 1,117,269 | 1,088,697 | 1,027,406 |
| Operating return on tangible equity (non-GAAP) | 23.35% | 21.76% | 22.19% | 21.70% | 22.43% |
| Book value (GAAP) | |||||
| Total shareholders’ equity (GAAP) – numerator | $2,030,585 | $2,072,765 | $2,023,992 | $2,006,034 | $1,938,950 |
| Period end common shares outstanding – denominator | 52,377 | 52,598 | 52,537 | 52,682 | 52,662 |
| Book value (GAAP) | $38.77 | $39.41 | $38.53 | $38.08 | $36.82 |
| Tangible book value (non-GAAP) | |||||
| Total tangible common equity (non-GAAP) – numerator | $1,108,746 | $1,154,944 | $1,124,430 | $1,107,223 | $1,083,113 |
| Period end common shares outstanding – denominator | 52,377 | 52,598 | 52,537 | 52,682 | 52,662 |
| Tangible book value (non-GAAP) | $21.17 | $21.96 | $21.40 | $21.02 | $20.57 |
| 2026 | 2025 | ||||
| 3rd Qtr | 2nd Qtr | 3rd 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 | $88,148 |
$80,976 |
$76,938 | ||
| (Loss) gain on investment securities | (2,916) | 4,710 | 236 | ||
| Amortization of intangible assets | (4,325) | (4,408) | (3,258) | ||
| Litigation accrual | 0 | (335) | 0 | ||
| Acquisition-related contingent consideration adjustments | 0 | 103 | 0 | ||
| Acquisition expenses | (206) | (231) | (747) | ||
| Total consolidated income before income taxes | $80,701 | $80,815 | $73,169 | ||
17
| Summary of Financial Data (unaudited) | |||||
| (Dollars in thousands, except per share data) | |||||
| 2026 | 2025 | ||||
| 3rd Qtr | 2nd Qtr | 3rd Qtr | |||
| Quarterly Segment Information Reconciliations | |||||
| Reconciliation of average total segment assets to average total consolidated assets | |||||
| Average total segment assets | $17,859,899 | $17,761,380 | $16,865,710 | ||
| Elimination of intersegment cash and deposits | (230,242) | (140,314) | (110,615) | ||
| Average total consolidated assets | $17,629,657 | $17,621,066 | $16,755,095 | ||
| Banking and Corporate | |||||
| Adjusted return on assets | |||||
| Adjusted income before income taxes | $65,481 | $61,688 | $56,303 | ||
| Average segment assets | 17,318,694 | 17,340,916 | 16,516,913 | ||
| Adjusted return on assets | 1.50% | 1.43% | 1.35% | ||
| Adjusted return on equity | |||||
| Adjusted income before income taxes | $65,481 | $61,688 | $56,303 | ||
| Average shareholders’ equity | 1,686,342 | 1,697,155 | 1,579,534 | ||
| Adjusted return on equity | 15.41% | 14.58% | 14.14% | ||
| Adjusted return on tangible equity (non-GAAP) | |||||
| Adjusted income before income taxes | $65,481 | $61,688 | $56,303 | ||
| Average shareholders’ equity | 1,686,342 | 1,697,155 | 1,579,534 | ||
| Average goodwill and intangible assets, net | (777,202) | (778,189) | (736,894) | ||
| Average deferred taxes on goodwill and intangible assets, net | 40,452 | 40,487 | 40,433 | ||
| Average tangible common equity (non-GAAP) | 949,592 | 959,453 | 883,073 | ||
| Adjusted return on tangible equity (non-GAAP) | 27.36% | 25.79% | 25.30% | ||
| Employee Benefit Services | |||||
| Adjusted return on assets | |||||
| Adjusted income before income taxes | $13,990 | $13,841 | $14,501 | ||
| Average segment assets | 230,572 | 222,977 | 225,717 | ||
| Adjusted return on assets | 24.07% | 24.90% | 25.49% | ||
| Adjusted return on equity | |||||
| Adjusted income before income taxes | $13,990 | $13,841 | $14,501 | ||
| Average shareholders’ equity | 203,345 | 195,639 | 200,739 | ||
| Adjusted return on equity | 27.30% | 28.38% | 28.66% | ||
| Adjusted return on tangible equity (non-GAAP) | |||||
| Adjusted income before income taxes | $13,990 | $13,841 | $14,501 | ||
| Average shareholders’ equity | 203,345 | 195,639 | 200,739 | ||
| Average goodwill and intangible assets, net | (106,402) | (107,934) | (111,860) | ||
| Average deferred taxes on goodwill and intangible assets, net | 2,435 | 2,670 | 3,912 | ||
| Average tangible common equity (non-GAAP) | 99,378 | 90,375 | 92,791 | ||
| Adjusted return on tangible equity (non-GAAP) | 55.85% | 61.43% | 62.00% | ||
18
| Summary of Financial Data (unaudited) | |||||
| (Dollars in thousands, except per share data) | |||||
| 2026 | 2025 | ||||
| 3rd Qtr | 2nd Qtr | 3rd Qtr | |||
| Quarterly Segment Information Reconciliations | |||||
| Insurance Services | |||||
| Adjusted return on assets | |||||
| Adjusted income before income taxes | $4,578 | $2,005 | $3,242 | ||
| Average segment assets | 110,844 | 106,026 | 83,819 | ||
| Adjusted return on assets | 16.39% | 7.58% | 15.35% | ||
| Adjusted return on equity | |||||
| Adjusted income before income taxes | $4,578 | $2,005 | $3,242 | ||
| Average shareholders’ equity | 92,745 | 92,051 | 65,615 | ||
| Adjusted return on equity | 19.58% | 8.74% | 19.60% | ||
| Adjusted return on tangible equity (non-GAAP) | |||||
| Adjusted income before income taxes | $4,578 | $2,005 | $3,242 | ||
| Average shareholders’ equity | 92,745 | 92,051 | 65,615 | ||
| Average goodwill and intangible assets, net | (52,471) | (49,460) | (44,916) | ||
| Average deferred taxes on goodwill and intangible assets, net | (215) | (43) | (311) | ||
| Average tangible common equity (non-GAAP) | 40,059 | 42,548 | 20,388 | ||
| Adjusted return on tangible equity (non-GAAP) | 45.34% | 18.90% | 63.09% | ||
| Wealth Management Services | |||||
| Adjusted return on assets | |||||
| Adjusted income before income taxes | $4,099 | $3,442 | $2,892 | ||
| Average segment assets | 199,789 | 91,461 | 39,261 | ||
| Adjusted return on assets | 8.14% | 15.09% | 29.22% | ||
| Adjusted return on equity | |||||
| Adjusted income before income taxes | $4,099 | $3,442 | $2,892 | ||
| Average shareholders’ equity | 75,096 | 47,809 | 35,228 | ||
| Adjusted return on equity | 21.66% | 28.88% | 32.57% | ||
| Adjusted return on tangible equity (non-GAAP) | |||||
| Adjusted income before income taxes | $4,099 | $3,442 | $2,892 | ||
| Average shareholders’ equity | 75,096 | 47,809 | 35,228 | ||
| Average goodwill and intangible assets, net | (28,200) | (8,849) | (4,273) | ||
| Average deferred taxes on goodwill and intangible assets, net | 3,056 | 1,699 | 199 | ||
| Average tangible common equity (non-GAAP) | 49,952 | 40,659 | 31,154 | ||
| Adjusted return on tangible equity (non-GAAP) | 32.56% | 33.96% | 36.83% | ||
# # #
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