SYRACUSE, N.Y.--(BUSINESS WIRE)--Community Financial System Announces Third Quarter 2025 Earnings Conference Call. ...

Core Insights - BPAS has been recognized for the fourth consecutive year in the NAPA Advisors' Choice Awards, highlighting its strong performance in the retirement plan services sector [1][8] - The company ranked among the Top 5 Recordkeepers in six categories for mid- and large-market segments, specifically for plans ranging from $10 million to $250 million [2][3] Company Performance - BPAS received six awards in 2025, reflecting its commitment to providing value in managing large and complex retirement plans [3] - The company supports over 6,100 plans with $110 billion in trust assets and $1.3 trillion in fund administration, serving approximately 910,000 participants [4] Service Model - BPAS offers a fully bundled solution that includes recordkeeping, administration, custodial, and clearing services, which streamlines client administration and reduces complexity [3][4] - Client satisfaction is high, with a reported 97% satisfaction rating and a 45% time savings compared to previous administrators [3] Strategic Focus - The company emphasizes strong relationships built on expertise, reliability, and flexibility, aiming to deliver long-term partnerships and industry-leading service [4] - BPAS continues to enhance its technology and service offerings to simplify processes for clients and HR teams [3]

Core Viewpoint - The article discusses upcoming ex-dividend dates and dividend payments for Slr Investment Corp, Hanover Insurance Group Inc, and Community Financial System Inc, highlighting the expected price adjustments in their stock prices due to these dividends [1]. Dividend Payments - Slr Investment Corp (SLRC) will pay a quarterly dividend of $0.41 on 9/26/25, with an expected yield of approximately 2.46% based on its recent stock price of $16.69 [1]. - Hanover Insurance Group Inc (THG) will pay a quarterly dividend of $0.90 on 9/26/25, with an expected price drop of 0.50% [1]. - Community Financial System Inc (CBU) will pay a quarterly dividend of $0.47 on 10/10/25, with an expected price drop of 0.79% [1]. Historical Dividend Analysis - Historical dividend data is provided for SLRC, THG, and CBU, which can help assess the stability of their dividends over time [2]. - The estimated annualized yields based on recent dividends are 9.83% for Slr Investment Corp, 2.01% for Hanover Insurance Group Inc, and 3.18% for Community Financial System Inc [8]. Stock Performance - In recent trading, Slr Investment Corp shares are down about 0.7%, Hanover Insurance Group Inc shares are up about 0.9%, and Community Financial System Inc shares are down about 1.8% [9].

Core Viewpoint - Community Financial System, Inc. has announced an investment in Leap Holdings, Inc., indicating a strategic move to enhance its portfolio and expand its market presence [1] Company Summary - Community Financial System, Inc. is actively seeking growth opportunities through investments, as evidenced by its recent decision to invest in Leap Holdings, Inc. [1] - Leap Holdings, Inc. is positioned to benefit from this investment, potentially enhancing its operational capabilities and market reach [1] Industry Summary - The investment landscape is showing increased activity, with companies like Community Financial System, Inc. making strategic investments to strengthen their positions in the market [1] - This trend reflects a broader industry movement towards consolidation and partnership as firms look to leverage synergies and enhance competitive advantages [1]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-13695 (Exact name of registrant as specified in its charter) | Delaware | 16-1213679 | | --- | --- | | (State or other ju ...

Core Insights - Community Financial System reported a non-GAAP EPS of $1.04 for Q2 2025, exceeding the consensus estimate of $1.01, representing a 3.0% upside surprise [1] - Total GAAP revenue was $199.3 million, slightly below the consensus estimate of $201.3 million, but up 8.4% year-over-year [1][2] - The quarter showcased record net interest income of $124.7 million, a 14.0% increase from the previous year, and a net interest margin of 3.27%, up 0.26 percentage points year-over-year [5][6] Financial Performance - Non-GAAP EPS for Q2 2025 was $1.04, a 9.5% increase from $0.95 in Q2 2024 [2] - GAAP revenue was $199.3 million, compared to $183.8 million in Q2 2024, reflecting an 8.4% year-over-year growth [2] - Net interest income reached $124.7 million, up from $109.4 million in the prior year [2] - Operating expenses rose to $129.1 million, an increase of 8.5% from the prior-year quarter [8] Business Segments and Strategy - Community Financial System operates through four main segments: banking, employee benefits services, insurance services, and wealth management [3][12] - The company aims to maintain a diversified revenue mix and expand its geographic presence through acquisitions [4][13] - Fee-based businesses contributed 37.4% to total revenue, down from 40.5% a year ago, with mixed results across segments [7] Asset Quality and Capital - Loan balances increased to $10.52 billion, a 4.9% rise year-over-year, driven by consumer indirect lending [6] - The ratio of nonperforming loans to total loans was 0.51% as of June 30, 2025, indicating resilient asset quality [10] - Shareholder equity increased by 12.7% to $1.88 billion, with strong regulatory capital ratios supporting growth [11] Future Outlook - The company anticipates slower growth in fee-based businesses due to market pressures, with a focus on loan growth and deposit trends [14][15] - The quarterly dividend was raised by 2.2% to $0.47 per share, marking the 33rd consecutive year of dividend growth [11][15]

Financial Data and Key Metrics Changes - The company reported GAAP earnings per share of $0.97, an increase of $0.06 or 6.6% year-over-year and up $0.04 or 4.3% from the previous quarter [10] - Operating earnings per share were $1.04, compared to $0.95 a year prior and $0.98 in the linked first quarter [10] - Total operating revenues reached $199.3 million, up $16.1 million or 8.8% year-over-year and up $3.3 million or 1.7% from the previous quarter [10][11] - Net interest income was $124.7 million, representing a $4.5 million or 3.8% increase from the previous quarter and a $15.3 million or 14% improvement year-over-year [11] - The company's operating margin increased to 23%, driving operating pretax earnings expansion of 70% year-to-date [6] Business Line Data and Key Metrics Changes - The Employee Benefits Services business remained flat year-over-year and quarter-over-quarter, with recordkeeping growing at high single digits while Fiduciary Trust faced headwinds [5] - Wealth Management Services experienced muted revenue growth year-over-year but saw a 16% increase in pretax operating earnings [6] - Banking fee income remained strong, with credit results impacted by the resolution of two large nonperforming assets [4] Market Data and Key Metrics Changes - Ending loans increased by $98 million or 0.9% during the second quarter, primarily driven by growth in the consumer indirect lending portfolio [13] - Total deposits increased by $563.9 million or 4.3% year-over-year but decreased by $190.3 million or 1.4% from the previous quarter due to seasonal outflows [14] - The company's liquidity position remains strong, with readily available sources of liquidity totaling $5.9 billion, representing 246% of estimated uninsured deposits [16] Company Strategy and Development Direction - The company announced a branch acquisition that will enhance its presence in a strategically important market, with no share issuance involved [8][19] - The acquisition aligns with the company's retail growth strategy and is expected to close in the fourth quarter of this year [7][19] - The company aims to continue deploying capital productively in the second half of the year [9] Management's Comments on Operating Environment and Future Outlook - Management noted that competition in lending has intensified, with competitors trying to regain market share [21] - The company expects to outperform peers and is optimistic about market share gains in the upcoming quarters [22] - Management expressed confidence in achieving growth targets, with a focus on maintaining a diversified revenue profile and strong liquidity [19] Other Important Information - The company recorded a provision for credit losses of $4.1 million during the second quarter, compared to $2.7 million in the prior year's second quarter [12] - Nonperforming loans totaled $53.3 million or 51 basis points of total loans outstanding, a decrease from the previous quarter [17] Q&A Session Summary Question: Can you speak to the competitive landscape you're seeing in terms of lending? - Management acknowledged increased competition in the lending market, with competitors trying to make up for previous inactivity [21][22] Question: How are you feeling about the quarterly NIM expansion from here? - Management indicated expectations of a range closer to three to five basis points for NIM expansion [25] Question: Will the acquired deposits boost liquidity and be invested over time? - Management views the acquired deposits as a source for future loan growth, with initial proceeds likely to remain in short-term instruments [26] Question: Can you talk about OpEx trends from here? - Management expects OpEx to remain flat moving forward, with a focus on ensuring investments push the business forward [32][34] Question: How is the branch acquisition progressing? - Management confirmed that the acquisition is on track and complements the organic strategy in the market [35][36] Question: Can you provide an update on the pipeline and financial targets? - Management reiterated a target of mid-single-digit growth across lending portfolios, with expectations of returning to historical growth rates [42][45]

Financial Data and Key Metrics Changes - GAAP earnings per share for Q2 2025 were $0.97, up $0.06 or 6.6% year-over-year and up $0.04 or 4.3% from the previous quarter [10] - Operating earnings per share were $1.04, compared to $0.95 a year prior and $0.98 in the linked first quarter [10] - Total operating revenues reached $199.3 million, an increase of $16.1 million or 8.8% year-over-year and up $3.3 million or 1.7% from the previous quarter [10][11] - Net interest income was $124.7 million, representing a $4.5 million or 3.8% increase from the previous quarter and a $15.3 million or 14% improvement year-over-year [11] - The company's net interest margin increased by six basis points to 3.30% [11] Business Line Data and Key Metrics Changes - The Employee Benefits Services business was flat year-over-year, with recordkeeping growing at high single digits while Fiduciary Trust faced headwinds [6] - Insurance Services experienced a pull forward of contingency payments into Q1, impacting Q2 results [6] - Wealth Management Services saw muted revenue growth year-over-year but an increase in operating pretax earnings by 16% [7] Market Data and Key Metrics Changes - Ending loans increased by $98 million or 0.9% during Q2, primarily driven by growth in consumer indirect lending [14] - Total deposits increased by $563.9 million or 4.3% year-over-year but decreased by $190.3 million or 1.4% from the previous quarter [14] - Nonperforming loans totaled $53.3 million or 51 basis points of total loans outstanding, a decrease from the previous quarter [17] Company Strategy and Development Direction - The company announced a branch acquisition that is expected to close in Q4 2025, enhancing its market presence and liquidity [8][19] - The company is focused on organic loan growth and expanding into under-tapped markets within its Northeast footprint [14] - The management is optimistic about the pipeline strength and expects to meet previously communicated growth targets [5][19] Management's Comments on Operating Environment and Future Outlook - Management noted that competition in lending has intensified, impacting loan pricing and yields [22][24] - The company is bullish on its pipeline and expects to achieve mid-single-digit growth in lending portfolios [41][44] - Management expressed confidence in the company's diversified revenue profile and strong liquidity as a foundation for continued earnings growth [19] Other Important Information - The company recorded a provision for credit losses of $4.1 million during Q2, compared to $2.7 million in the prior year's second quarter [12] - Total non-interest expenses increased by $10.1 million or 8.5% year-over-year, driven by higher salaries and employee benefits [13] Q&A Session Summary Question: Can you speak to the competitive landscape you're seeing in terms of lending? - Management acknowledged that competition has intensified, with many competitors trying to regain market share through rate and credit adjustments [22][23] Question: How are you feeling about the quarterly NIM expansion from here? - Management indicated that they expect NIM expansion to be closer to three to five basis points moving forward [26] Question: Will the acquired deposits boost liquidity and be invested over time? - Management stated that the acquired deposits will primarily support loan growth over the coming years, with some proceeds initially staying in short-term instruments [27] Question: Can you talk about OpEx trends from here? - Management noted that restructuring charges are part of consolidating branches and that they expect OpEx to remain flat moving forward [32][34] Question: How is the branch acquisition progressing? - Management confirmed that the acquisition is on track and complements their organic growth strategy [36][37] Question: Can you provide an update on the De Novo branch build-out? - Management reported that seven out of the planned 19 De Novo branches have opened, with expectations to complete the build-out by the end of the year [55][56] Question: Any updates on loan yields and their recent performance? - Management clarified that the recent increase in loan yields was in line with expectations and not due to any atypical factors [58] Question: Is there any update regarding the CHIPS Act and Micron's plans? - Management confirmed that Micron is still on track to break ground later this year, with an increase in expected investment [60]

Financial Performance - Community Financial System reported revenue of $200.14 million for the quarter ended June 2025, reflecting an 8.3% increase year-over-year [1] - Earnings per share (EPS) for the quarter was $0.97, up from $0.95 in the same quarter last year [1] - The reported revenue was below the Zacks Consensus Estimate of $203.07 million, resulting in a revenue surprise of -1.44% [1] - The company experienced an EPS surprise of -5.83%, with the consensus EPS estimate being $1.03 [1] Key Metrics - The efficiency ratio (GAAP) was reported at 64.8%, higher than the estimated 61.9% [4] - Net Interest Margin remained stable at 3.3%, matching the average estimate [4] - Average balances of total interest-earning assets were $15.29 billion, slightly below the estimated $15.38 billion [4] - Net charge-offs as a percentage of average loans were 0.2%, consistent with the average estimate [4] - Total Non-Interest Income was reported at $74.51 million, below the average estimate of $77.3 million [4] - Fully tax-equivalent net interest income was $125.63 million, slightly below the average estimate of $125.75 million [4] Stock Performance - Community Financial shares returned +3.8% over the past month, compared to a +5.9% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

[Company Overview](index=2&type=section&id=Company%20Overview) Community Financial System, Inc. is a diversified financial services company operating four main business lines: banking, employee benefit services, insurance services, and wealth management services [About Community Financial System, Inc.](index=2&type=section&id=About%20Community%20Financial%20System%2C%20Inc.) Community Financial System, Inc. is a diversified financial services company operating four main business lines: banking, employee benefit services, insurance services, and wealth management services. Its banking subsidiary, Community Bank, N.A., is a significant institution with over $16 billion in assets and approximately 200 facilities across several Northeastern states - Community Financial System, Inc. is a diversified financial services company focused on four main business lines: banking services, employee benefit services, insurance services, and wealth management services[6](index=6&type=chunk)[31](index=31&type=chunk) - Its banking subsidiary, Community Bank, N.A., is among the country's 100 largest banking institutions with over **$16 billion in assets** and operates approximately **200 customer facilities** across Upstate New York, Northeastern Pennsylvania, Vermont, and Western Massachusetts[6](index=6&type=chunk)[31](index=31&type=chunk) - The Company's subsidiaries include Benefit Plans Administrative Services, Inc. (employee benefits administration, trust services, actuarial consulting) and OneGroup NY, Inc. (a top 66 U.S. insurance agency)[6](index=6&type=chunk)[31](index=31&type=chunk) [Second Quarter 2025 Performance Highlights](index=1&type=section&id=Second%20Quarter%202025%20Performance%20Highlights) Community Financial System, Inc. reported strong second quarter 2025 results, achieving record total revenues and net interest income, with net income and operating net income per share increasing year-over-year and quarter-over-quarter, driven by growth in loans and deposits [Key Financial Highlights](index=1&type=section&id=Key%20Financial%20Highlights) Community Financial System, Inc. reported strong second quarter 2025 results, achieving record total revenues and net interest income. Net income and operating net income per share increased both year-over-year and quarter-over-quarter, driven by growth in loans and deposits | Metric | Q2 2025 Value | YoY Change | YoY Change (%) | QoQ Change | QoQ Change (%) | | :------------------------------------------------ | :-------------- | :------------- | :------------- | :------------- | :------------- | | Net income | $51.3 million | +$0.06 per share | - | +$0.04 per share | - | | Operating net income | $55.4 million | +$0.09 per share | - | +$0.06 per share | - | | Total revenues | $199.3 million (record) | +$15.5 million | +8.4% | +$3.0 million | +1.5% | | Net interest income | $124.7 million (record) | +$15.3 million | +14.0% | +$4.5 million | +3.8% | | Non-bank financial services noninterest revenues | $54.5 million | +$0.3 million | +0.6% | -$2.2 million | -3.9% | | Operating pre-tax, pre-provision net revenue (PPNR) | $75.1 million | +$0.12 per share | - | +$0.01 per share | - | | Total ending loans | $10.52 billion | +$495.3 million | +4.9% | +$98.0 million | +0.9% | | Total ending deposits | $13.70 billion | +$563.9 million | +4.3% | -$190.3 million | -1.4% | [CEO Commentary](index=3&type=section&id=CEO%20Commentary) President and CEO Dimitar A. Karaivanov highlighted the company's solid core operating performance, with meaningful growth in net income and PPNR. He noted margin expansion in the banking business offset seasonal headwinds in non-banking financial services, leading to a record operating diluted EPS of $1.04 and a quarterly operating return on assets of 1.34%. The CEO also announced an agreement to acquire seven bank branches in Allentown, PA, advancing the retail growth strategy - The Company achieved meaningful growth in net income, operating net income, and operating pre-tax, pre-provision net revenue (PPNR) over the prior year's second quarter[9](index=9&type=chunk) - Results improved from the linked first quarter, highlighted by a record quarterly operating diluted earnings per share of **$1.04**, driven by margin expansion in the banking business[9](index=9&type=chunk) - The Company announced an agreement to acquire seven bank branch locations in the Allentown, Pennsylvania area, including certain branch-related loans, deposits, and wealth management relationships, accelerating its retail growth strategy[10](index=10&type=chunk) [Performance Metrics](index=3&type=section&id=Performance%20Metrics) The company's performance metrics for Q2 2025 show improvements across key profitability and efficiency indicators, including increases in diluted EPS, operating return on assets, and net interest margin, both quarter-over-quarter and year-over-year | Metric | 2nd Qtr 2025 | 1st Qtr 2025 | 2nd Qtr 2024 | QoQ Change | QoQ Change (%) | YoY Change | YoY Change (%) | | :--------------------------------------- | :----------- | :----------- | :----------- | :------------- | :------------- | :------------- | :------------- | | Diluted Earnings Per Share | $0.97 | $0.93 | $0.91 | $0.04 | 4.3% | $0.06 | 6.6% | | Operating Diluted Earnings Per Share | $1.04 | $0.98 | $0.95 | $0.06 | 6.1% | $0.09 | 9.5% | | Operating Pre-Tax, Pre-Provision Net Revenue Per Share | $1.41 | $1.40 | $1.29 | $0.01 | 0.7% | $0.12 | 9.3% | | Return on Assets | 1.24% | 1.22% | 1.22% | - | 0.02% | - | 0.02% | | Operating Return on Assets | 1.34% | 1.28% | 1.29% | - | 0.06% | - | 0.05% | | Return on Equity | 11.21% | 11.28% | 11.79% | - | (0.07%) | - | (0.58%) | | Operating Return on Equity | 12.10% | 11.84% | 12.43% | - | 0.26% | - | (0.33%) | | Total Revenues ($M) | $199.3 | $196.2 | $183.8 | $3.0 | 1.5% | $15.5 | 8.4% | | Net Interest Income ($M) | $124.7 | $120.2 | $109.4 | $4.5 | 3.8% | $15.3 | 14.0% | | Net Interest Margin | 3.27% | 3.21% | 3.01% | - | 0.06% | - | 0.26% | | Total Ending Loans ($B) | $10.52 | $10.42 | $10.02 | $98.0 million | 0.9% | $495.3 million | 4.9% | | Total Ending Deposits ($B) | $13.70 | $13.89 | $13.14 | ($190.3 million) | (1.4%) | $563.9 million | 4.3% | [Business Segment Results](index=4&type=section&id=Business%20Segment%20Results) The Banking and Corporate segment showed strong growth in adjusted income before income taxes, while Employee Benefit Services, Insurance Services, and Wealth Management Services experienced declines in adjusted income before income taxes quarter-over-quarter, primarily due to seasonal factors or timing of revenues | Segment | 2nd Qtr 2025 Adjusted Income Before Income Taxes ($M) | QoQ Change ($M) | QoQ Change (%) | YoY Change ($M) | YoY Change (%) | | :-------------------------- | :--------------------------------------------- | :------------- | :------------- | :------------- | :------------- | | Banking and Corporate | $54.5 | $8.2 | 17.8% | $7.3 | 15.6% | | Employee Benefit Services | $11.9 | ($1.5) | (11.4%) | ($1.6) | (12.1%) | | Insurance Services | $2.2 | ($1.9) | (45.3%) | ($0.5) | (17.4%) | | Wealth Management Services | $2.3 | ($1.3) | (35.4%) | $0.3 | 15.8% | - Provision for credit losses in Banking and Corporate decreased by **38.5% QoQ** but increased by **52.0% YoY**[12](index=12&type=chunk) - Employee benefit services revenues decreased QoQ due to seasonally lower actuarial consulting services revenues[17](index=17&type=chunk) [Detailed Results of Operations](index=6&type=section&id=Detailed%20Results%20of%20Operations) The Company's net income for Q2 2025 was $51.3 million, or $0.97 per share, an increase of $0.06 per share YoY and $0.04 per share QoQ, primarily driven by increased net interest income, partially offset by higher noninterest expenses and provision for credit losses [Net Income and Earnings Per Share](index=6&type=section&id=Net%20Income%20and%20Earnings%20Per%20Share) The Company's net income for Q2 2025 was $51.3 million, or $0.97 per share, an increase of $0.06 per share YoY and $0.04 per share QoQ. This growth was primarily driven by increased net interest income, partially offset by higher noninterest expenses and provision for credit losses | Metric | 2nd Qtr 2025 | 2nd Qtr 2024 | 1st Qtr 2025 | | :----------------------- | :----------- | :----------- | :----------- | | Net income | $51.3 million | $47.9 million | $49.6 million | | Diluted earnings per share | $0.97 | $0.91 | $0.93 | - The **$0.06 increase** in earnings per share YoY was primarily driven by an increase in net interest income, partially offset by increases in noninterest expenses and the provision for credit losses[14](index=14&type=chunk) - The **$0.04 increase** in earnings per share QoQ was primarily due to an increase in net interest income and a decrease in the provision for credit losses, partially offset by an increase in noninterest expenses and a decrease in noninterest revenues[14](index=14&type=chunk) [Net Interest Income and Net Interest Margin](index=6&type=section&id=Net%20Interest%20Income%20and%20Net%20Interest%20Margin) The Company achieved record quarterly net interest income of $124.7 million, a 14.0% increase YoY and 3.8% QoQ. Net interest margin (NIM) expanded to 3.27% (3.30% FTE), driven by higher yields on interest-earning assets and abating funding cost pressures, including a decrease in the cost of interest-bearing liabilities | Metric | 2nd Qtr 2025 | 2nd Qtr 2024 | 1st Qtr 2025 | YoY Change | YoY Change (%) | QoQ Change | QoQ Change (%) | | :-------------------------- | :----------- | :----------- | :----------- | :------------- | :------------- | :------------- | :------------- | | Net interest income | $124.7 million | $109.4 million | $120.2 million | $15.3 million | 14.0% | $4.5 million | 3.8% | | Net interest margin | 3.27% | 3.01% | 3.21% | - | 0.26% | - | 0.06% | | Fully tax-equivalent NIM | 3.30% | 3.04% | 3.24% | - | 0.26% | - | 0.06% | | Yield on interest-earning assets | 4.56% | 4.35% | 4.51% | - | 0.21% | - | 0.05% | | Cost of interest-bearing liabilities | 1.74% | 1.83% | 1.75% | - | (0.09%) | - | (0.01%) | - The increase in net interest margin was primarily the result of a higher yield on interest-earning assets, which increased **21 basis points YoY to 4.56%**, mainly driven by higher loan yields[17](index=17&type=chunk) - The cost of interest-bearing liabilities decreased **nine basis points YoY to 1.74%**, including a **15 basis point decrease** in the average borrowing rate and a **nine basis point decrease** in the average interest-bearing deposit rate[17](index=17&type=chunk) [Noninterest Revenues](index=6&type=section&id=Noninterest%20Revenues) Noninterest revenues contributed 37.4% of total revenues in Q2 2025. While banking noninterest revenues increased, employee benefit, insurance, and wealth management services revenues saw QoQ decreases due to seasonal factors and timing of commission revenues | Revenue Stream | 2nd Qtr 2025 ($M) | 2nd Qtr 2024 ($M) | 1st Qtr 2025 ($M) | YoY Change ($M) | YoY Change (%) | QoQ Change ($M) | QoQ Change (%) | | :-------------------------------- | :---------------- | :---------------- | :---------------- | :-------------- | :------------- | :-------------- | :------------- | | Banking noninterest revenues | $20.1 | $19.7 | $19.1 | $0.4 | 2.1% | $1.0 | 5.0% | | Employee benefit services revenues | $32.4 | $32.1 | $32.6 | $0.3 | 0.8% | ($0.2) | (0.7%) | | Insurance services revenues | $13.4 | $13.3 | $14.2 | $0.1 | 0.6% | ($0.8) | (5.7%) | | Wealth management services revenues | $8.7 | $8.7 | $9.9 | $0.0 | 0.0% | ($1.2) | (12.0%) | - The Company's banking and non-banking financial services noninterest revenue streams generated **37.4% of total revenues** in the second quarter[16](index=16&type=chunk) - Banking noninterest revenues increased due to higher customer interest rate swap fee revenues and CRE financing and advisory revenues[17](index=17&type=chunk) [Noninterest Expenses and Income Taxes](index=7&type=section&id=Noninterest%20Expenses%20and%20Income%20Taxes) Total noninterest expenses increased by 8.5% YoY to $129.1 million in Q2 2025, primarily driven by higher salaries and employee benefits, data processing and communications, and other expenses, including restructuring costs. The effective tax rate decreased slightly to 22.3% | Expense Category | 2nd Qtr 2025 ($M) | 2nd Qtr 2024 ($M) | YoY Change ($M) | YoY Change (%) | | :-------------------------------- | :---------------- | :---------------- | :-------------- | :------------- | | Total noninterest expenses | $129.1 | $119.0 | $10.1 | 8.5% | | Salaries and employee benefits | $79.0 | $73.4 | $5.6 | 7.6% | | Data processing and communications | $16.7 | $15.3 | $1.4 | 9.3% | | Other expenses | $10.2 | $8.1 | $2.1 | 25.6% | | Effective tax rate | 22.3% | 22.8% | - | (0.5%) | | Restructuring expenses (within Other) | $1.5 | - | $1.5 | - | - Salaries and employee benefits expenses increased primarily due to merit and market-related increases in wages, incentive compensation, and higher employee medical costs[21](index=21&type=chunk) - Other expenses increased primarily due to **$1.5 million of restructuring expenses** associated with severance payments for a workforce optimization plan and planned branch consolidations[21](index=21&type=chunk) [Financial Position and Capital Management](index=7&type=section&id=Financial%20Position%20and%20Capital%20Management) The Company maintains a strong financial position and liquidity profile, with total assets increasing 4.8% YoY to $16.67 billion, driven by organic interest-earning asset growth, and readily available liquidity sources totaling $5.94 billion, covering 246% of estimated uninsured deposits [Financial Position and Liquidity](index=7&type=section&id=Financial%20Position%20and%20Liquidity) The Company maintains a strong financial position and liquidity profile. Total assets increased 4.8% YoY to $16.67 billion, driven by organic interest-earning asset growth. Readily available liquidity sources totaled $5.94 billion, covering 246% of estimated uninsured deposits | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | YoY Change ($M) | YoY Change (%) | QoQ Change ($M) | QoQ Change (%) | | :------------------------------------ | :-------------- | :------------- | :------------ | :-------------- | :------------- | :-------------- | :------------- | | Total assets | $16.67 billion | $16.76 billion | $15.91 billion | $758.2 | 4.8% | ($99.3) | (0.6%) | | Readily available sources of liquidity | $5.94 billion | - | - | - | - | - | - | | Unrestricted cash & cash equivalents | $231.2 million | - | - | - | - | - | - | | Investment securities unpledged | $1.82 billion | - | - | - | - | - | - | | Unused FHLB borrowing capacity | $1.27 billion | - | - | - | - | - | - | | FRB discount window availability | $2.62 billion | - | - | - | - | - | - | | Liquidity coverage of uninsured deposits | 246% | - | - | - | - | - | - | - The increase in total assets over the last 12 months was primarily driven by organic interest-earning asset growth[21](index=21&type=chunk) - Estimated insured deposits, net of collateralized and intercompany deposits, represent **82% of total ending deposits**[21](index=21&type=chunk) [Deposits and Funding](index=7&type=section&id=Deposits%20and%20Funding) Ending deposits at June 30, 2025, were $13.70 billion, a 4.3% increase YoY but a 1.4% decrease QoQ due to seasonal governmental deposit outflows. The Company maintained a low average cost of funds at 1.32%, with 65% of total deposits in no- and low-rate checking and savings accounts | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | YoY Change ($M) | YoY Change (%) | QoQ Change ($M) | QoQ Change (%) | | :-------------------------- | :-------------- | :------------- | :------------ | :-------------- | :------------- | :-------------- | :------------- | | Ending deposits | $13.70 billion | $13.89 billion | $13.14 billion | $563.9 | 4.3% | ($190.3) | (1.4%) | | Ending borrowings | $894.5 million | $862.1 million | $932.2 million | ($37.7) | (4.0%) | $32.4 | 3.8% | | Average cost of funds | 1.32% | 1.33% | 1.37% | - | (0.05%) | - | (0.01%) | | Average cost of total deposits | 1.19% | 1.17% | 1.23% | - | (0.04%) | - | 0.02% | | % of deposits in no/low-rate accounts | 65% | - | - | - | - | - | - | | % of deposits in time deposit accounts | 15% | 15% | 16% | - | (1%) | - | 0% | - The decrease in ending deposits QoQ was due to seasonal outflows of governmental deposit balances[21](index=21&type=chunk) - The average cost of funds decreased **five basis points YoY** and **one basis point QoQ**, while the quarterly average cost of total deposits decreased **four basis points YoY** and increased **two basis points QoQ**[21](index=21&type=chunk) [Loans and Credit Quality](index=8&type=section&id=Loans%20and%20Credit%20Quality) Total ending loans grew to $10.52 billion, up 4.9% YoY and 0.9% QoQ, driven by organic growth in consumer indirect and overall business/consumer lending. While net charge-offs increased due to a specific CRE loan charge-off, overall asset quality metrics, including delinquent and nonperforming loans, improved QoQ and remain relatively low compared to the industry | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | YoY Change ($M) | YoY Change (%) | QoQ Change ($M) | QoQ Change (%) | | :------------------------------------ | :-------------- | :------------- | :------------ | :-------------- | :------------- | :-------------- | :------------- | | Ending loans | $10.52 billion | $10.42 billion | $10.02 billion | $495.3 | 4.9% | $98.0 | 0.9% | | Allowance for credit losses (ACL) | $81.9 million | $82.8 million | $71.4 million | $10.5 | 14.7% | ($0.9) | (1.1%) | | ACL as % of total loans | 0.78% | 0.79% | 0.71% | - | 0.07% | - | (0.01%) | | Provision for credit losses | $4.1 million | $6.7 million | $2.7 million | $1.4 | 52.0% | ($2.6) | (38.5%) | | Net charge-offs | $5.1 million | $3.2 million | $1.3 million | $3.8 | 292.3% | $1.9 | 59.4% | | Annualized net charge-offs % of avg loans | 0.20% | 0.13% | 0.05% | - | 0.15% | - | 0.07% | | Total delinquent loans % of total loans | 1.01% | 1.29% | 0.95% | - | 0.06% | - | (0.28%) | | Nonperforming loans | $53.3 million | $75.0 million | $50.5 million | $2.8 | 5.5% | ($21.7) | (28.9%) | | Nonperforming loans % of total loans | 0.51% | 0.72% | 0.50% | - | 0.01% | - | (0.21%) | | Total nonperforming assets | $61.3 million | $77.7 million | $52.2 million | $9.1 | 17.4% | ($16.4) | (21.1%) | | Nonperforming assets % of total assets | 0.37% | 0.46% | 0.33% | - | 0.04% | - | (0.09%) | - The increase in net charge-offs during Q2 2025 was primarily driven by a **$4.3 million charge-off** associated with one non-owner occupied CRE loan relationship[23](index=23&type=chunk) - The decrease in nonperforming loans and assets QoQ was primarily attributable to the derecognition of two previously mentioned CRE loan relationships (one charged-off, one substantially repaid)[23](index=23&type=chunk) [Shareholders' Equity and Regulatory Capital](index=9&type=section&id=Shareholders%27%20Equity%20and%20Regulatory%20Capital) The Company maintained a strong capital position, with shareholders' equity increasing 12.7% YoY to $1.88 billion. All regulatory capital ratios significantly exceeded well-capitalized standards, with the Tier 1 leverage ratio at 9.42% and tangible equity to tangible assets ratio at 6.51% | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | YoY Change ($M) | YoY Change (%) | QoQ Change ($M) | QoQ Change (%) | | :------------------------------------ | :-------------- | :------------- | :------------ | :-------------- | :------------- | :-------------- | :------------- | | Shareholders' equity | $1.88 billion | $1.83 billion | $1.67 billion | $212.9 | 12.7% | $49.0 | 2.7% | | Shareholders' equity to assets ratio | 11.30% | 10.94% | 10.50% | - | 0.80% | - | 0.36% | | Tier 1 leverage ratio | 9.42% | 9.29% | 9.07% | - | 0.35% | - | 0.13% | | Tangible equity to tangible assets ratio | 6.51% | 6.15% | 5.38% | - | 1.13% | - | 0.36% | - The increase in shareholders' equity YoY was primarily due to a **$97.5 million increase in retained earnings** and an **$89.9 million decrease in accumulated other comprehensive loss** related to the investment securities portfolio[27](index=27&type=chunk) - The Tier 1 leverage ratio of **9.42%** remained substantially above the regulatory well-capitalized standard of **5.0%**[27](index=27&type=chunk) [Dividend and Stock Repurchase Program](index=9&type=section&id=Dividend%20and%20Stock%20Repurchase%20Program) The Company declared a quarterly cash dividend of $0.46 per share for Q2 2025, a 2.2% increase YoY. Additionally, an increase to $0.47 per share was announced for Q3 2025, marking the 33rd consecutive year of dividend increases. No shares were repurchased under the 2025 stock repurchase program in the first six months | Metric | 2nd Qtr 2025 | 2nd Qtr 2024 | YoY Change | YoY Change (%) | | :-------------------------------- | :----------- | :----------- | :------------- | :------------- | | Quarterly cash dividend declared | $0.46 per share | $0.45 per share | $0.01 | 2.2% | | Announced Q3 2025 dividend | $0.47 per share | - | $0.01 | 2.2% | | Annualized yield (based on 7/21/25 close) | 3.2% | - | - | - | - 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[25](index=25&type=chunk)[27](index=27&type=chunk) - The Board approved a stock repurchase program in December 2024, authorizing the repurchase of up to **2.63 million shares** (**5.0% of common stock outstanding**) during 2025; however, no shares were repurchased in the first six months of 2025[27](index=27&type=chunk) [Strategic Initiatives](index=9&type=section&id=Strategic%20Initiatives) Community Bank, N.A. entered into an agreement to acquire seven bank branch locations in the Allentown, Pennsylvania market from Santander Bank, N.A., expected to add approximately $600 million of customer deposits, accelerating the Company's retail growth strategy [Acquisition to Expand Pennsylvania Franchise](index=9&type=section&id=Acquisition%20to%20Expand%20Pennsylvania%20Franchise) Community Bank, N.A. entered into an agreement to acquire seven bank branch locations in the Allentown, Pennsylvania market from Santander Bank, N.A. This acquisition is expected to add approximately $600 million of customer deposits, along with branch-related loans and wealth management relationships, accelerating the Company's retail growth strategy in the Greater Lehigh Valley - Community Bank, N.A. agreed to acquire **seven bank branch locations** in the Allentown, Pennsylvania area from Santander Bank, N.A.[10](index=10&type=chunk)[26](index=26&type=chunk) - The transaction is expected to add approximately **$600 million of customer deposits**, as well as branch-related loans and wealth management relationships[26](index=26&type=chunk) - This move accelerates the Company's previously communicated retail growth strategy and complements its existing commercial and consumer lending presence in the market[10](index=10&type=chunk)[26](index=26&type=chunk) [Non-GAAP Measures Explanation](index=10&type=section&id=Non-GAAP%20Measures%20Explanation) The Company provides supplemental reporting on an "operating" and "tangible" basis, excluding specific items like acquisition and restructuring expenses, and amortization of intangibles, to help investors and analysts measure underlying core performance, with net interest income and margin also reported on a fully tax-equivalent (FTE) basis for enhanced comparability [Non-GAAP Measures](index=10&type=section&id=Non-GAAP%20Measures) The Company provides supplemental reporting on an "operating" and "tangible" basis, excluding specific items like acquisition expenses, restructuring expenses, and amortization of intangibles, to help investors and analysts measure underlying core performance. Additionally, net interest income and margin are reported on a fully tax-equivalent (FTE) basis for enhanced comparability - Results on an "operating" basis exclude after-tax effects of acquisition expenses, contingent consideration adjustments, restructuring expenses, litigation accrual, loss on sales of investment securities, unrealized gain (loss) on equity securities, and amortization of intangible assets[28](index=28&type=chunk) - Results on a "tangible" basis exclude goodwill and intangible asset balances, net of accumulated amortization and applicable deferred tax amounts[28](index=28&type=chunk) - Supplemental reporting for "operating pre-tax, pre-provision net revenues" subtracts the provision for credit losses and other specified non-operating items from income before income taxes[28](index=28&type=chunk) - Net interest income and net interest margin are also reported on a fully tax-equivalent (FTE) basis to enhance comparability of assets with different tax liabilities[28](index=28&type=chunk) [Additional Information](index=10&type=section&id=Additional%20Information) This section contains forward-looking statements based on management's current beliefs and expectations, subject to significant risks and uncertainties, where actual results may differ due to various factors including macroeconomic conditions, fiscal and monetary policies, litigation, regulatory actions, interest rate changes, credit losses, competition, and successful integration of acquisitions [Forward-Looking Statements](index=10&type=section&id=Forward-Looking%20Statements) This section contains forward-looking statements based on management's current beliefs and expectations, subject to significant risks and uncertainties. Actual results may differ due to various factors, including macroeconomic conditions, fiscal and monetary policies, litigation, regulatory actions, interest rate changes, credit losses, competition, and successful integration of acquisitions - Statements are based on current beliefs and expectations of CBU's management and are subject to significant risks and uncertainties[32](index=32&type=chunk) - Factors that could cause actual results to differ materially include macroeconomic conditions (e.g., CRE, housing, unemployment, inflation), fiscal and monetary policies, litigation, regulatory actions, interest rate changes, credit losses, competition, and successful integration of acquisitions[32](index=32&type=chunk) - The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made[32](index=32&type=chunk) [Summary of Financial Data (Unaudited)](index=11&type=section&id=Summary%20of%20Financial%20Data%20%28Unaudited%29) This section provides a detailed breakdown of the Company's earnings, including interest income, interest expense, net interest income, provision for credit losses, noninterest revenues, and noninterest expenses, leading to net income and earnings per share for the current and prior periods [Earnings Data](index=11&type=section&id=Earnings%20Data) This section provides a detailed breakdown of the Company's earnings, including interest income, interest expense, net interest income, provision for credit losses, noninterest revenues, and noninterest expenses, leading to net income and earnings per share for the current and prior periods | Metric ($M) | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | | :------------------------------------ | :------ | :------ | :------ | :------ | :------ | | Loan income | $146.5 | $142.9 | $144.6 | $140.5 | $133.2 | | Investment income | $26.3 | $24.7 | $25.3 | $23.4 | $23.9 | | Total interest income | $172.9 | $167.6 | $169.9 | $163.9 | $157.0 | | Interest expense | $48.1 | $47.4 | $50.0 | $51.2 | $47.6 | | Net interest income | $124.7 | $120.2 | $120.0 | $112.7 | $109.4 | | Provision for credit losses | $4.1 | $6.7 | $6.2 | $7.7 | $2.7 | | Net interest income after provision for credit losses | $120.6 | $113.5 | $113.8 | $105.0 | $106.7 | | Total noninterest revenues | $74.5 | $76.0 | $76.3 | $76.2 | $74.4 | | Total noninterest expenses | $129.1 | $125.3 | $125.5 | $124.2 | $119.0 | | Income before income taxes | $66.0 | $64.3 | $64.5 | $57.0 | $62.1 | | Income taxes | $14.7 | $14.7 | $14.7 | $13.1 | $14.2 | | Net income | $51.3 | $49.6 | $49.8 | $43.9 | $47.9 | | Diluted earnings per share | $0.97 | $0.93 | $0.94 | $0.83 | $0.91 | [Profitability Metrics](index=12&type=section&id=Profitability%20Metrics) This section presents key profitability ratios, including GAAP and non-GAAP measures such as return on assets, return on equity, and efficiency ratios, demonstrating the Company's financial performance trends | Metric | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | | :------------------------------------------ | :------ | :------ | :------ | :------ | :------ | | Return on assets (GAAP) | 1.24% | 1.22% | 1.21% | 1.09% | 1.22% | | Return on equity (GAAP) | 11.21% | 11.28% | 11.27% | 10.21% | 11.79% | | Noninterest revenues/total revenues (GAAP) | 37.4% | 38.7% | 38.9% | 40.3% | 40.5% | | Efficiency ratio (GAAP) | 64.8% | 63.8% | 64.0% | 65.7% | 64.7% | | Operating return on assets (non-GAAP) | 1.34% | 1.28% | 1.29% | 1.16% | 1.29% | | Operating return on equity (non-GAAP) | 12.10% | 11.84% | 11.99% | 10.85% | 12.43% | | Return on tangible equity (non-GAAP) | 20.97% | 21.69% | 21.97% | 20.53% | 24.90% | | Operating return on tangible equity (non-GAAP) | 22.63% | 22.76% | 23.36% | 21.80% | 26.25% | | Operating noninterest revenues/operating revenues (FTE) (non-GAAP) | 37.2% | 38.5% | 38.6% | 40.2% | 40.1% | | Operating efficiency ratio (non-GAAP) | 62.0% | 61.9% | 61.8% | 63.6% | 62.5% | [Components of Net Interest Margin (FTE)](index=13&type=section&id=Components%20of%20Net%20Interest%20Margin%20%28FTE%29) This section details the components contributing to the net interest margin on a fully tax-equivalent basis, including yields on various earning assets and costs of different funding sources | Metric | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | | :------------------------------------ | :------ | :------ | :------ | :------ | :------ | | Loan yield | 5.63% | 5.58% | 5.58% | 5.51% | 5.38% | | Cash equivalents yield | 4.33% | 4.30% | 4.71% | 4.90% | 5.10% | | Investment yield | 2.17% | 2.11% | 2.15% | 2.05% | 2.11% | | Earning asset yield | 4.56% | 4.51% | 4.52% | 4.43% | 4.35% | | Interest-bearing deposit rate | 1.59% | 1.59% | 1.68% | 1.69% | 1.68% | | Borrowing rate | 3.56% | 3.63% | 3.57% | 4.08% | 3.71% | | Cost of all interest-bearing funds | 1.74% | 1.75% | 1.84% | 1.93% | 1.83% | | Cost of total deposits | 1.19% | 1.17% | 1.23% | 1.23% | 1.23% | | Cost of funds (includes noninterest-bearing deposits) | 1.32% | 1.33% | 1.38% | 1.44% | 1.37% | | Net interest margin | 3.27% | 3.21% | 3.17% | 3.03% | 3.01% | | Net interest margin (FTE) (non-GAAP) | 3.30% | 3.24% | 3.20% | 3.05% | 3.04% | [Average Balances](index=13&type=section&id=Average%20Balances) This table provides average balances for key financial components, including loans, cash equivalents, investment securities, interest-earning assets, total assets, deposits, borrowings, and shareholders' equity | Metric | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | | :------------------------------------ | :------ | :------ | :------ | :------ | :------ | | Loans ($B) | $10.46 | $10.40 | $10.33 | $10.16 | $9.97 | | Cash equivalents ($M) | $159.7 | $130.6 | $93.9 | $38.5 | $48.9 | | Taxable investment securities ($B) | $4.26 | $4.21 | $4.19 | $4.17 | $4.12 | | Nontaxable investment securities ($M) | $417.3 | $419.7 | $423.3 | $436.8 | $466.8 | | Total interest-earning assets ($B) | $15.29 | $15.17 | $15.04 | $14.80 | $14.60 | | Total assets ($B) | $16.59 | $16.44 | $16.32 | $16.06 | $15.78 | | Interest-bearing deposits ($B) | $10.22 | $10.05 | $9.87 | $9.54 | $9.68 | | Borrowings ($M) | $844.7 | $910.2 | $915.5 | $1,030.2 | $785.9 | | Total interest-bearing liabilities ($B) | $11.06 | $10.96 | $10.79 | $10.57 | $10.47 | | Noninterest-bearing deposits ($B) | $3.52 | $3.52 | $3.60 | $3.61 | $3.53 | | Shareholders' equity ($B) | $1.84 | $1.78 | $1.76 | $1.71 | $1.63 | [Balance Sheet Data](index=13&type=section&id=Balance%20Sheet%20Data) This section provides a snapshot of the Company's balance sheet at quarter-end, detailing assets such as cash, investment securities, and various loan categories, as well as liabilities including deposits and borrowings, and shareholders' equity | Metric | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | | :------------------------------------ | :------ | :------ | :------ | :------ | :------ | | Cash and cash equivalents ($M) | $237.2 | $518.0 | $197.0 | $346.1 | $201.5 | | Investment securities ($B) | $4.35 | $4.30 | $4.22 | $4.29 | $4.17 | | Total loans ($B) | $10.52 | $10.42 | $10.43 | $10.25 | $10.02 | | Allowance for credit losses ($M) | $81.9 | $82.8 | $79.1 | $76.2 | $71.4 | | Goodwill and intangible assets, net ($M) | $898.4 | $900.3 | $901.5 | $900.6 | $905.8 | | Total assets ($B) | $16.67 | $16.76 | $16.39 | $16.40 | $15.91 | | Total deposits ($B) | $13.70 | $13.89 | $13.44 | $13.48 | $13.14 | | Customer repurchase agreements ($M) | $180.6 | $266.6 | $261.6 | $317.4 | $215.5 | | Other borrowings ($M) | $713.8 | $595.5 | $737.3 | $631.0 | $716.7 | | Total liabilities ($B) | $14.78 | $14.93 | $14.62 | $14.62 | $14.24 | | Shareholders' equity ($B) | $1.88 | $1.83 | $1.76 | $1.78 | $1.67 | [Capital and Other Metrics](index=14&type=section&id=Capital%20and%20Other%20Metrics) This section provides key capital ratios and other financial metrics, including shareholders' equity to total assets, tangible equity to tangible assets, Tier 1 leverage ratio, loan-to-deposit ratio, and per-share data like book value and dividends | Metric | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | | :------------------------------------------ | :------ | :------ | :------ | :------ | :------ | | Shareholders' equity/total assets (GAAP) | 11.30% | 10.94% | 10.76% | 10.88% | 10.50% | | Tangible equity/tangible assets (non-GAAP) | 6.51% | 6.15% | 5.83% | 5.97% | 5.38% | | Tier 1 leverage ratio | 9.42% | 9.29% | 9.19% | 9.12% | 9.07% | | Loan-to-deposit ratio | 76.8% | 75.0% | 77.6% | 76.1% | 76.3% | | Diluted weighted average common shares outstanding (M) | 53.1 | 53.1 | 53.1 | 52.9 | 52.9 | | Cash dividends declared per common share | $0.46 | $0.46 | $0.46 | $0.46 | $0.45 | | Book value (GAAP) | $35.62 | $34.71 | $33.47 | $33.97 | $31.80 | | Tangible book value (non-GAAP) | $19.46 | $18.52 | $17.20 | $17.66 | $15.41 | | Common stock price at quarter-end | $56.87 | $56.86 | $61.68 | $58.07 | $47.21 | [Asset Quality Metrics](index=14&type=section&id=Asset%20Quality%20Metrics) This section provides detailed asset quality indicators, including nonaccrual loans, total nonperforming loans and assets, net charge-offs, and various ratios related to credit losses and delinquencies | Metric | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | | :------------------------------------------ | :------ | :------ | :------ | :------ | :------ | | Nonaccrual loans ($M) | $45.8 | $69.1 | $66.4 | $59.0 | $47.4 | | Accruing loans 90+ days delinquent ($M) | $7.5 | $5.9 | $7.0 | $3.8 | $3.1 | | Total nonperforming loans ($M) | $53.3 | $75.0 | $73.4 | $62.8 | $50.5 | | Other real estate owned ($M) | $8.0 | $2.7 | $2.8 | $2.3 | $1.7 | | Total nonperforming assets ($M) | $61.3 | $77.7 | $76.2 | $65.1 | $52.2 | | Net charge-offs ($M) | $5.1 | $3.2 | $3.2 | $2.8 | $1.3 | | Allowance for credit losses/loans outstanding | 0.78% | 0.79% | 0.76% | 0.74% | 0.71% | | Nonperforming loans/loans outstanding | 0.51% | 0.72% | 0.70% | 0.61% | 0.50% | | Allowance for credit losses/nonperforming loans | 153% | 110% | 108% | 121% | 141% | | Net charge-offs/average loans | 0.20% | 0.13% | 0.12% | 0.11% | 0.05% | | Delinquent loans/ending loans | 1.01% | 1.29% | 1.24% | 1.07% | 0.95% | | Provision for credit losses/net charge-offs | 80% | 207% | 193% | 278% | 211% | [Quarterly GAAP to Non-GAAP Reconciliations](index=14&type=section&id=Quarterly%20GAAP%20to%20Non-GAAP%20Reconciliations) This extensive section provides detailed reconciliations from GAAP to non-GAAP financial measures, including operating pre-tax, pre-provision net revenue, operating net income, operating diluted earnings per share, and various return and efficiency ratios, offering a clearer view of core operational performance | Metric | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | | :------------------------------------------------ | :------ | :------ | :------ | :------ | :------ | | Operating pre-tax, pre-provision net revenue (non-GAAP) ($M) | $75.1 | $74.1 | $74.3 | $68.3 | $68.1 | | Operating diluted earnings per share (non-GAAP) | $1.04 | $0.98 | $1.00 | $0.88 | $0.95 | | Operating net income (non-GAAP) ($M) | $55.4 | $52.1 | $52.9 | $46.6 | $50.5 | | Operating return on assets (non-GAAP) | 1.34% | 1.28% | 1.29% | 1.16% | 1.29% | | Operating return on equity (non-GAAP) | 12.10% | 11.84% | 11.99% | 10.85% | 12.43% | | Net interest margin (FTE) (non-GAAP) | 3.30% | 3.24% | 3.20% | 3.05% | 3.04% | | Total operating noninterest revenues (non-GAAP) ($M) | $74.5 | $75.8 | $76.1 | $76.4 | $73.8 | | Total operating noninterest expenses (non-GAAP) ($M) | $124.1 | $121.9 | $121.8 | $120.8 | $115.0 | | Total operating revenues (non-GAAP) ($M) | $199.3 | $196.0 | $196.0 | $189.1 | $183.2 | | Operating noninterest revenues/operating revenues (FTE) (non-GAAP) | 37.2% | 38.5% | 38.6% | 40.2% | 40.1% | | Operating efficiency ratio (non-GAAP) | 62.0% | 61.9% | 61.8% | 63.6% | 62.5% | | Total tangible assets (non-GAAP) ($B) | $15.81 | $15.91 | $15.53 | $15.55 | $15.05 | | Total tangible common equity (non-GAAP) ($B) | $1.03 | $0.98 | $0.91 | $0.93 | $0.81 | | Tangible equity-to-tangible assets ratio at quarter end (non-GAAP) | 6.51% | 6.15% | 5.83% | 5.97% | 5.38% | | Tangible book value (non-GAAP) | $19.46 | $18.52 | $17.20 | $17.66 | $15.41 |