Part I. Financial Information [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201%2E%20Financial%20Statements%20%28Unaudited%29) The company presents its unaudited consolidated statements of condition, income, and cash flows for Q1 2025 [Consolidated Statements of Condition](index=3&type=section&id=Consolidated%20Statements%20of%20Condition) Total assets grew to $16.76 billion, driven by increased cash and deposits, while total loans slightly decreased Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $518,021 | $197,004 | | Loans, net of allowance | $10,338,301 | $10,353,251 | | Total investment securities | $4,220,752 | $4,130,869 | | **Total Assets** | **$16,764,296** | **$16,386,044** | | **Liabilities & Equity** | | | | Total deposits | $13,892,047 | $13,441,707 | | Total borrowings | $861,991 | $1,000,418 | | **Total Liabilities** | **$14,930,221** | **$14,623,209** | | **Total Shareholders' Equity** | **$1,834,075** | **$1,762,835** | [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) Q1 2025 net income rose 21.4% to $49.6 million, driven by higher net interest and noninterest revenues Quarterly Income Statement (in thousands, except per-share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Interest Income | $120,212 | $106,990 | | Provision for credit losses | $6,690 | $6,148 | | Total Noninterest Revenues | $76,036 | $70,285 | | Total Noninterest Expenses | $125,290 | $118,084 | | Income Before Income Taxes | $64,268 | $53,043 | | **Net Income** | **$49,614** | **$40,872** | | **Diluted EPS** | **$0.93** | **$0.76** | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash increased by $321.0 million, as a rise in financing cash flow offset a decline in operating cash flow Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $62,509 | $79,893 | | Net cash used in investing activities | ($30,311) | ($214,676) | | Net cash provided by financing activities | $288,819 | $282,202 | | **Change in cash, cash equivalents and restricted cash** | **$321,017** | **$147,419** | [Notes to the Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) This section details accounting policies, acquisitions, credit loss allowances, and segment performance - In February 2025, the company's subsidiary BPA acquired assets from two financial services firms for **$0.2 million in cash** and **$2.1 million in contingent consideration**; another acquisition was completed in April 2025 for **$0.1 million cash** and **$1.9 million contingent consideration**[19](index=19&type=chunk)[20](index=20&type=chunk) - The company's investment portfolio has **significant unrealized losses** due to interest rate changes, with **$355.7 million** in the available-for-sale portfolio and **$88.5 million** in the held-to-maturity portfolio[37](index=37&type=chunk)[38](index=38&type=chunk) - The **allowance for credit losses increased to $82.8 million** at March 31, 2025, from $79.1 million at year-end 2024, reflecting a specific reserve and increased economic uncertainty[61](index=61&type=chunk) - The company operates four reportable segments, with the **Banking and Corporate segment** generating the highest adjusted income before taxes at **$46.3 million** in Q1 2025[108](index=108&type=chunk)[117](index=117&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=40&type=section&id=Item%202%2E%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes Q1 2025 performance, including a 21.4% net income increase and expanded net interest margin [Executive Summary](index=42&type=section&id=Executive%20Summary) Q1 2025 net income rose 21.4% to $49.6 million, driven by higher revenues and an expanded net interest margin - First quarter net income increased by **$8.7 million, or 21.4%**, compared to Q1 2024, with diluted EPS rising to **$0.93** from $0.76[134](index=134&type=chunk) - **Net interest margin increased by 26 basis points** YoY, driven by a 33 basis point increase in the yield on average loans[135](index=135&type=chunk) - Financial services business revenues grew by **$4.7 million (9.0%)** YoY, led by a $3.1 million increase in insurance services revenues[138](index=138&type=chunk) - **Nonperforming loans as a percentage of total loans increased 22 basis points to 0.72%** from Q1 2024, primarily due to the downgrade of three business loan customers[137](index=137&type=chunk) [Net Income and Profitability](index=46&type=section&id=Net%20Income%20and%20Profitability) Net income increased 21.4% to $49.6 million, driven by strong growth in net interest and noninterest revenues Condensed Income Statement (in thousands) | | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net interest income | $120,212 | $106,990 | | Provision for credit losses | $6,690 | $6,148 | | Noninterest revenues | $76,036 | $70,285 | | Noninterest expenses | $125,290 | $118,084 | | **Net income** | **$49,614** | **$40,872** | [Net Interest Income](index=48&type=section&id=Net%20Interest%20Income) Net interest income grew 12.4% to $120.2 million, with the net interest margin expanding 26 basis points to 3.24% Net Interest Margin Analysis | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Avg. Yield on Earning Assets (FTE) | 4.51% | 4.24% | | Avg. Rate on Interest-Bearing Liabilities | 1.75% | 1.77% | | Net Interest Spread (FTE) | 2.76% | 2.47% | | **Net Interest Margin (FTE)** | **3.24%** | **2.98%** | - The yield on average loans increased by **33 basis points to 5.58%** in Q1 2025 compared to Q1 2024, reflecting higher rates on new originations and variable-rate loans[151](index=151&type=chunk)[158](index=158&type=chunk) [Noninterest Revenues](index=52&type=section&id=Noninterest%20Revenues) Total noninterest revenues rose 8.2% to $76.0 million, led by strong growth in insurance services Noninterest Revenues Breakdown (in thousands) | Revenue Source | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Employee benefit services | $32,622 | $31,698 | | Insurance services | $14,201 | $11,109 | | Wealth management services | $9,862 | $9,210 | | Banking noninterest revenues | $19,104 | $18,230 | | Unrealized gain on equity securities | $245 | $16 | | **Total Noninterest Revenues** | **$76,036** | **$70,285** | [Noninterest Expenses](index=53&type=section&id=Noninterest%20Expenses) Noninterest expenses grew 6.1% to $125.3 million, though the efficiency ratio improved due to higher revenue Noninterest Expenses Breakdown (in thousands) | Expense Category | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Salaries and employee benefits | $76,442 | $73,063 | | Data processing and communications | $16,122 | $14,348 | | Occupancy and equipment | $12,698 | $11,362 | | Other expenses | $19,928 | $19,311 | | **Total Noninterest Expenses** | **$125,290** | **$118,084** | - The **GAAP efficiency ratio improved to 63.8%** in Q1 2025 from 66.6% in Q1 2024, and the non-GAAP operating efficiency ratio also improved to 61.9% from 64.1%[174](index=174&type=chunk)[178](index=178&type=chunk)[179](index=179&type=chunk) [Financial Condition](index=56&type=section&id=Financial%20Condition) Total assets reached $16.76 billion, with strong liquidity, capital adequacy, and 5.4% YoY loan growth - **Total loans reached $10.42 billion** at quarter-end, a **5.4% increase** from March 31, 2024, led by a 7.6% growth in the business lending portfolio[185](index=185&type=chunk)[186](index=186&type=chunk) - The **allowance for credit losses to total loans ratio was 0.79%** at March 31, 2025, up from 0.71% a year prior, reflecting a specific reserve and heightened economic uncertainty[202](index=202&type=chunk)[209](index=209&type=chunk) - **Total deposits reached $13.89 billion**, with an estimated **80% insured by the FDIC** or collateralized[211](index=211&type=chunk)[212](index=212&type=chunk) - The company's total sources of liquidity were **$5.94 billion**, which is **254% of its estimated net uninsured deposits** of $2.34 billion[233](index=233&type=chunk)[235](index=235&type=chunk) [Reconciliation of GAAP to Non-GAAP Measures](index=77&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) This section reconciles GAAP results to non-GAAP measures like operating net income and tangible book value GAAP to Non-GAAP Reconciliation (Q1 2025, in thousands) | Measure | GAAP | Adjustments | Non-GAAP | | :--- | :--- | :--- | :--- | | Net Income | $49,614 | $2,453 | $52,067 | | Diluted EPS | $0.93 | $0.05 | $0.98 | | Pre-tax, Pre-provision Net Revenue | $70,958 | $3,188 | $74,146 | Tangible Book Value Reconciliation (March 31, 2025, in thousands) | Measure | Amount | | :--- | :--- | | Shareholders' Equity (GAAP) | $1,834,075 | | Less: Goodwill and Intangibles, net | ($900,332) | | Add: Deferred taxes on intangibles | $44,644 | | **Total Tangible Common Equity (Non-GAAP)** | **$978,387** | | **Tangible Book Value per Share (Non-GAAP)** | **$18.52** | [Quantitative and Qualitative Disclosures about Market Risk](index=80&type=section&id=Item%203%2E%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk is interest rate sensitivity, with a +200 bps rate shock decreasing NII by 1.3% Net Interest Income Sensitivity Analysis (at March 31, 2025) | Interest Rate Scenario | Projected Annual Change in NII (%) | | :--- | :--- | | +200 basis points | (1.3)% | | +100 basis points | (0.6)% | | -100 basis points | 0.6% | | -200 basis points | 0.3% | - The company's interest rate risk profile is **liability-sensitive in the short term** for rising rate scenarios, leading to a projected decrease in Net Interest Income (NII)[253](index=253&type=chunk) [Controls and Procedures](index=83&type=section&id=Item%204%2E%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective with no material changes in the quarter - The company's disclosure controls and procedures were deemed **effective** as of the end of the period covered by the report (March 31, 2025)[258](index=258&type=chunk) - **No material changes** occurred during the first quarter of 2025 that are reasonably likely to materially affect the company's internal control over financial reporting[259](index=259&type=chunk) Part II. Other Information [Legal Proceedings](index=83&type=section&id=Item%201%2E%20Legal%20Proceedings) The company is subject to various legal proceedings arising in the normal course of business - The company is party to various legal proceedings and claims for monetary damages that arise in the **normal course of business**[260](index=260&type=chunk) [Risk Factors](index=83&type=section&id=Item%201A%2E%20Risk%20Factors) No material changes to risk factors from the 2024 Annual Report on Form 10-K were reported - **No material changes** to the risk factors disclosed in the 2024 Form 10-K have occurred[261](index=261&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=83&type=section&id=Item%202%2E%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) A new stock repurchase program was authorized, but no shares were repurchased under the plan in Q1 2025 - A new stock repurchase program for up to **2,628,000 shares** was authorized starting January 1, 2025[262](index=262&type=chunk) Issuer Purchases of Equity Securities (Q1 2025) | Period | Total Shares Purchased | Average Price Paid Per Share | Shares Purchased as Part of Announced Plan | | :--- | :--- | :--- | :--- | | Jan 2025 | 820 | $58.16 | 0 | | Feb 2025 | 0 | $0.00 | 0 | | Mar 2025 | 0 | $0.00 | 0 | | **Total** | **820** | **$58.16** | **0** | [Defaults Upon Senior Securities](index=85&type=section&id=Item%203%2E%20Defaults%20Upon%20Senior%20Securities) This section is not applicable to the company - Not applicable[267](index=267&type=chunk) [Mine Safety Disclosures](index=85&type=section&id=Item%204%2E%20Mine%20Safety%20Disclosures) This section is not applicable to the company - Not applicable[268](index=268&type=chunk) [Other Information](index=85&type=section&id=Item%205%2E%20Other%20Information) No directors or officers adopted or terminated a Rule 10b5-1 trading agreement during the quarter - **No directors or officers** adopted or terminated a Rule 10b5-1 trading agreement during the first quarter of 2025[269](index=269&type=chunk) [Exhibits](index=86&type=section&id=Item%206%2E%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including certifications and XBRL data - Exhibits filed include **CEO/CFO certifications** (31.1, 31.2, 32.1, 32.2) and **Inline XBRL data files** (101 series)[270](index=270&type=chunk)

Financial Data and Key Metrics Changes - The company reported GAAP earnings per share of $0.93, up $0.17 or 22% year-over-year, but down $0.01 or 1% from the previous quarter [10] - Operating earnings per share were $0.98, compared to $0.82 a year prior and $1 in the linked fourth quarter [10] - Total operating revenues reached $196 million, an increase of $18.7 million or 10.6% year-over-year, consistent with the previous quarter [11] - Net interest income was $120.2 million, up $13.2 million or 12% year-over-year, marking the fourth consecutive quarter of expansion [12] - The company's cost of deposits decreased to 1.17%, down six basis points from the prior two quarters [12] Business Line Data and Key Metrics Changes - The banking business saw margin expansion due to lower funding costs, with deposits benefiting from seasonal municipal flows [5] - Employee Benefit Services revenues were up $900,000 or 2.9% from the previous quarter, reflecting growth in asset-based fees [13] - Insurance services revenues increased by $3.1 million or 27.8% year-over-year, driven by contingent commissions and recent acquisitions [13] - Wealth Management Services revenues were up $700,000 or 7.1% year-over-year, supported by favorable market conditions [13] Market Data and Key Metrics Changes - Ending loans decreased by $11.2 million or 0.1% during the quarter, ending a streak of fourteen consecutive quarters of loan growth [15][16] - Total deposits increased by $453.3 million or 3.4% during the quarter, driven by an increase in municipal deposits [16] - Public funds deposits rose to $2.34 billion, up $408.5 million year-over-year [16] Company Strategy and Development Direction - The company aims for mid-single-digit growth in commercial and mortgage portfolios, despite a slight decrease in pipelines [6] - The focus remains on appropriate risk-reward in terms of credit quality and rates, with a diversified revenue profile expected to support growth [9] - The company is actively expanding its branch network, with several new locations planned for the year [30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to grow revenues despite economic uncertainty, highlighting a strong balance sheet and liquidity position [9][20] - The current economic environment is characterized by high uncertainty, prompting a cautious approach to risk-taking [9] - The company anticipates continued earnings growth supported by a diversified revenue profile and strong asset quality [20] Other Important Information - The company recorded a provision for credit losses of $6.7 million during the quarter, reflecting an increase for a specific reserve on a non-owner occupied CRE loan [14] - Non-performing loans totaled $75 million, representing 72 basis points of total loans outstanding, an increase from the previous quarter [18] Q&A Session Summary Question: Can you provide details on the commercial pipeline drop-off? - Management indicated that pipelines are not dramatically different from last year, with a slight decrease of a couple of percentage points, impacted by increased payoffs and uncertainty in the macro environment [25][26] Question: What is the outlook for de novo branch expansion? - The company plans to open several new branches by the end of the year, with expected startup costs of $3 million to $4 million in Q3 [30][32] Question: How is loan pricing changing, particularly for auto loans? - Loan pricing for auto loans has shrunk by over 50 basis points, with increased competition leading to more aggressive pricing strategies [36] Question: What is the outlook for the Employee Benefits Services business? - Near-term revenue growth is expected to be lower single digits to mid-single digits, influenced by market volatility [44] Question: How does the company view the impact of the CHIPS Act on regional concerns? - Management believes the impact of the CHIPS Act is minimal, with more significant concerns related to cost uncertainties affecting clients [81]

Community Bank System (CBU) Q1 2025 Earnings Call April 29, 2025 11:00 AM ET Company Participants Dimitar Karaivanov - President & CEOMarya Burgio Wlos - EVP & CFOFrank Schiraldi - Managing DirectorSteve Moss - DirectorJoseph Sutaris - SVP & Head of Investor RelationsMatthew Breese - Managing DirectorChristopher O'Connell - Director - Equity Research Conference Call Participants Manuel Navas - MD & Senior Research Analyst Operator Good day, and welcome to the Community Financial System Inc. First Quarter tw ...

Community Financial System (CBU) reported $197.14 million in revenue for the quarter ended March 2025, representing a year-over-year increase of 10.6%. EPS of $0.93 for the same period compares to $0.82 a year ago.The reported revenue represents a surprise of -0.20% over the Zacks Consensus Estimate of $197.54 million. With the consensus EPS estimate being $0.91, the EPS surprise was +2.20%.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectati ...

Exhibit 99.1 News Release For further information, please contact: 5790 Widewaters Parkway, DeWitt, N.Y. 13214 Marya Burgio Wlos, EVP & Chief Financial Officer Office: (315) 299-2946 Community Financial System, Inc. Reports First Quarter 2025 Results SYRACUSE, N.Y. — April 29, 2025 — Community Financial System, Inc. (the "Company") (NYSE: CBU) reported first quarter 2025 results that are included in the attached supplement. This earnings release, including supporting financial tables, is also available with ...

Group 1: Earnings Performance - Community Financial System (CBU) reported quarterly earnings of $0.93 per share, exceeding the Zacks Consensus Estimate of $0.91 per share, and up from $0.82 per share a year ago, representing an earnings surprise of 2.20% [1] - The company posted revenues of $197.14 million for the quarter ended March 2025, which was slightly below the Zacks Consensus Estimate by 0.20%, compared to $178.29 million in the same quarter last year [2] - Over the last four quarters, Community Financial has surpassed consensus EPS estimates three times and topped consensus revenue estimates three times as well [2] Group 2: Stock Performance and Outlook - Community Financial shares have declined approximately 9.8% since the beginning of the year, while the S&P 500 has decreased by 6% [3] - The company's earnings outlook is mixed, with the current consensus EPS estimate for the upcoming quarter at $1.03 on revenues of $206.36 million, and $4.05 on revenues of $831.41 million for the current fiscal year [7] - The Zacks Rank for Community Financial is currently 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6] Group 3: Industry Context - The Financial - Miscellaneous Services industry, to which Community Financial belongs, is currently ranked in the bottom 45% of over 250 Zacks industries, suggesting potential challenges for stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact investor sentiment [5]

UTICA, N.Y., April 15, 2025 /PRNewswire/ --BPAS, a leading national provider of retirement plans, benefit plans, fund administration, and collective investment trusts, announced today it has earned certification from the Centre for Fiduciary Excellence (CEFEX), a division of Broadridge Fi360 Solutions (Broadridge). BPAS has earned the right to use the CEFEX Mark which indicates the firm's established practices are aligned with investors' interests and worthy of trust and confidence," said Carlos Panksep, CE ...

Group 1 - The article discusses smaller, off-the-beaten-path bank stocks that typically have cheaper-than-average funding sources and a history of below-average loan losses [1] - The investment approach emphasized is long-term, buy-and-hold, focusing on stocks that can sustainably generate high-quality earnings, particularly in the dividend and income sectors [1] Group 2 - The author has no current stock or derivative positions in the companies mentioned and does not plan to initiate any within the next 72 hours [2] - The article expresses personal opinions and is not influenced by compensation from any company mentioned [2]

Core Viewpoint - Community Financial System, Inc. is set to discuss its financial and operational performance for the first quarter of 2025 during an upcoming conference call on April 29, 2025 [1][2]. Company Overview - Community Financial System, Inc. operates in four main business lines: banking, employee benefit services, insurance services, and wealth management services [5]. - The banking subsidiary, Community Bank, N.A., is among the top 100 largest banking institutions in the U.S., with over $16 billion in assets and approximately 200 customer facilities across Upstate New York, Northeastern Pennsylvania, Vermont, and Western Massachusetts [5]. - The company’s subsidiary, Benefit Plans Administrative Services, Inc., is a leading provider of employee benefits administration and related services on a national scale [5]. - OneGroup NY, Inc., another subsidiary, ranks as a top 66 insurance agency in the U.S. [5]. - The company is publicly traded on the New York Stock Exchange under the symbol CBU [5]. Conference Call Details - The earnings conference call is scheduled for April 29, 2025, at 11:00 a.m. Eastern Time, accessible via conference call or a simultaneous webcast [2][3]. - The call will feature Dimitar Karaivanov, CEO, and Marya Wlos, incoming CFO, who will present the first quarter results, followed by a Q&A session [3]. - The financial results will be released before the market opens on the same day and will be available on the company's website [4].

Branch Operations and Acquisitions - As of December 31, 2024, the Company operates 185 full-service branches and 11 drive-thru only locations across 42 counties in Upstate New York, six counties in Northeastern Pennsylvania, 12 counties in Vermont, and one county in Western Massachusetts[17]. - In 2024, the Company completed acquisitions of three insurance agencies in New York and two in Florida for a total consideration of $10.3 million, including $9.6 million in cash[19]. - The Company acquired certain assets of Creative Plan Designs Limited for $5.9 million in cash plus contingent consideration valued at $3.0 million, with net assets acquired totaling $4.5 million[20]. - The merger with Elmira Savings Bank in 2022 was completed for $82.2 million in cash, enhancing the Company's presence in five counties and adding eight full-service offices[23]. - The Company recorded goodwill of $42.1 million as a result of the Elmira merger, with identifiable assets acquired amounting to approximately $583.6 million[23]. - The Company recorded goodwill of $3.9 million from the 2024 insurance agency acquisitions, with net assets acquired totaling $6.4 million[19]. - The Company is expanding its branch presence in densely populated markets including Albany, Buffalo, Rochester, and Syracuse in New York, as well as the Lehigh Valley in Pennsylvania and Springfield, Massachusetts[25]. Employee and Recruitment - The Company employs a total of 2,918 employees, with 2,079 in the Banking and Corporate segment, 459 in Employee Benefit Services, 267 in Insurance Services, and 113 in Wealth Management Services[34]. - The Company continues to engage in partnerships to enhance recruitment efforts, particularly focusing on military and veteran families[40]. Regulatory Compliance and Risks - The Company is classified as a financial holding company and must maintain a "well capitalized" and "well managed" status to engage in certain financial activities[47]. - The Bank's most recent Community Reinvestment Act rating was "Satisfactory," which allows the Company to engage in new activities and acquisitions[49]. - The Company is subject to extensive regulation by the Federal Reserve, OCC, and other federal and state regulators, impacting its operational practices[44]. - The Company expects regulatory reforms under the Trump administration to differ significantly from those under the Biden administration, affecting federal banking agency priorities[44]. - The Bank is required to comply with capital requirements set by the OCC, which may include higher individual minimum capital ratios[53]. - The Company and the Bank are subject to enforcement actions for violations of laws, which can result in civil money penalties exceeding $2 million per day[59]. - The Company is subject to the CFPB's supervision due to total consolidated assets exceeding $10 billion, which may lead to increased compliance costs[64]. - The Capital Rules require the Company to maintain a Common Equity Tier 1 (CET1) ratio of at least 7% and a capital conservation buffer of 2.5%[72]. - The minimum capital ratios under the Capital Rules include 4.5% CET1 to total risk-weighted assets and 8.0% total capital to total risk-weighted assets[74]. - The Company may face increased operating and compliance costs due to ongoing regulatory changes stemming from the Dodd-Frank Act[69]. - The Company is required to comply with the new anti-money laundering obligations starting January 1, 2026, as mandated by FinCEN[86]. - The Company has approved policies to comply with the USA Patriot Act, which imposes obligations on financial institutions to detect and report money laundering and terrorism financing[87]. - The Company has established policies to comply with OFAC regulations, which impose economic sanctions affecting transactions with designated foreign entities[88]. - The Sarbanes-Oxley Act requires the Company to maintain strict corporate governance and reporting reforms, including increased disclosure obligations[89]. - New CRA regulations effective January 1, 2026, aim to expand access to credit and adapt to changes in the banking industry[91]. - The Company must notify regulators of significant cybersecurity incidents within 36 hours, as per new federal rules[92]. Financial Performance - The Company reported net income of $182.5 million for the year ended December 31, 2024, an increase of $50.6 million, or 38.3%, compared to the prior year, with earnings per share of $3.44, up $0.99, or 40.4%[204]. - Net interest income increased to $449.1 million in 2024, marking an $11.8 million, or 2.7%, increase from the prior year, representing the eighteenth consecutive year of growth[206]. - Noninterest revenues reached record results across all four operating segments: banking, employee benefit services, insurance services, and wealth management services[206]. - The provision for credit losses increased from 2023 due to some degradation in asset quality metrics and an increase in loans outstanding, reflecting continued macroeconomic uncertainty[205]. - The Company's net interest margin for the full year 2024 was 3.04%, a decrease of seven basis points from the prior year, while the fully tax-equivalent net interest margin was 3.07[207]. - The yield on average interest-earning assets increased by 51 basis points compared to the prior year, driven by improved yields on loans, investments, and interest-earning cash equivalents[207]. - Average and ending interest-earning assets increased year-over-year due to strong organic loan growth, while average and ending deposits also rose, primarily from higher governmental deposit balances[208]. - The Company updated its allowance for credit losses (ACL) model in 2024 to incorporate 2023 results and specific forecasts for office property prices and vacancy rates[195]. - A hypothetical downside economic forecast indicated a peak unemployment rate of 8.3% and a cumulative decline in real GDP of 2.6%, which could increase the ACL by approximately $4.7 million[195]. - The Company performed qualitative goodwill analyses for all operating segments, determining that fair values exceeded carrying values, thus no impairment was recognized[199]. - Operating net income for 2024 was $193.9 million, an increase of $1.2 million, or 0.6%, compared to the prior year[210]. - Operating pre-tax, pre-provision net revenue (PPNR) for 2024 was $273.6 million, an increase of $17.2 million, or 6.7%, compared to 2023[210]. - Nonperforming and delinquency ratios increased from 2023 levels but remained below the Company's 10-year historical averages[209]. - Other noninterest revenues for 2024 were $296.4 million, an increase from $267.0 million in 2023[213]. Cybersecurity and Operational Risks - The Company has developed a comprehensive cybersecurity framework to mitigate risks associated with data breaches and cyberattacks, which could lead to financial losses and reputational damage[155]. - The Chief Information Security Officer (CISO) leads the cybersecurity efforts, supported by a team with relevant certifications and experience[158]. - The Company’s cybersecurity strategy includes collaboration with external technology partners to enhance defenses against evolving threats[160]. - The Company’s internal audit department conducts regular assessments of the cybersecurity program to ensure effectiveness and compliance with regulatory standards[161]. - The Company has conducted annual mandatory cybersecurity training for all employees to enhance awareness of risks[166]. - The Company has a third-party service provider management program to assess risks associated with third-party services[164]. - The Company faces significant operational risks due to rapid technological changes in the financial services industry, which could adversely impact its financial condition and results of operations[121]. - The Company is exposed to fraud risks as the sophistication of fraudulent activities increases, potentially leading to operational losses[122]. - The Company relies heavily on automated systems for transaction processing, which increases the risk of errors and operational disruptions[125]. - Cybersecurity threats are on the rise, and any breaches could result in significant regulatory consequences and reputational damage[126]. - The Company must comply with evolving data security and privacy regulations, which may increase operational costs and legal risks[129]. - The Company depends on third-party service providers for key business functions, exposing it to additional cybersecurity risks and potential service interruptions[130]. Economic and Market Conditions - The Company's performance is significantly influenced by regional economic conditions, particularly in New York, Pennsylvania, Vermont, Massachusetts, and New Hampshire[133]. - The financial services industry is highly competitive, with pressures that could negatively affect the Company's revenue and profitability[134]. - Changes in equity markets can materially impact the level of assets under management, affecting the demand for fee-based services and overall earnings[137]. - The Company may need to record impairment charges related to goodwill and other intangible assets due to various adverse factors[139]. - The Company’s loan portfolio includes 9% of loans acquired through whole-bank acquisitions that were not underwritten at origination, posing a risk of larger-than-anticipated credit losses[153]. - Recent developments in the banking industry have eroded customer confidence, potentially impacting the Company’s liquidity and loan funding capacity[149]. - The Company anticipates increased regulatory scrutiny and potential new regulations following recent bank failures, which may raise operational costs and reduce profitability[150]. - Economic conditions such as high inflation, supply chain disruptions, and changes in consumer spending could adversely affect the Company’s financial performance[141]. - The Company’s consumer businesses are particularly sensitive to changes in personal incomes, unemployment rates, and inflation, which could negatively impact credit performance[146]. Real Estate and Property Management - The Company has 257 properties, with 152 owned and 105 leased, and operates 185 full-service bank branches[174]. - The net book value of real property and related banking facilities owned by the Company was $106.1 million as of December 31, 2024[175]. - The Company paid $11.2 million in rental fees for leased facilities during the year ended December 31, 2024[175]. - The Company has 1,898,557 securities available for issuance under its equity compensation plans as of December 31, 2024[184]. Shareholder Returns - The Company declared a cash dividend of $0.46 per share for the first quarter of 2025, continuing its history of regular quarterly cash dividends[180]. - The Board approved a new stock repurchase program for up to 2,628,000 shares, representing 5.0% of the Company's common stock outstanding[187].