分组1 - Community Financial System (CBU) reported quarterly earnings of $0.97 per share, missing the Zacks Consensus Estimate of $1.03 per share, representing an earnings surprise of -5.83% [1] - The company posted revenues of $200.14 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 1.44%, compared to year-ago revenues of $184.75 million [2] - Community Financial shares have lost about 6.1% since the beginning of the year, while the S&P 500 has gained 7.2% [3] 分组2 - The current consensus EPS estimate for the coming quarter is $1.04 on revenues of $209.18 million, and for the current fiscal year, it is $4.09 on revenues of $821.7 million [7] - The Zacks Industry Rank for Financial - Miscellaneous Services is currently in the top 39% of over 250 Zacks industries, indicating a favorable outlook for the industry [8] - Community Financial has a Zacks Rank 2 (Buy), suggesting that the shares are expected to outperform the market in the near future [6]

Company Overview - Community Financial System (CBU) is expected to report a year-over-year increase in earnings, with a projected EPS of $1.03, reflecting an increase of +8.4% [3] - Revenues are anticipated to reach $203.07 million, marking a growth of 9.9% compared to the same quarter last year [3] Earnings Expectations - The earnings report is scheduled for July 22, and the stock may rise if the results exceed expectations, while a miss could lead to a decline [2] - The consensus EPS estimate has been revised down by 0.32% over the last 30 days, indicating a reassessment by analysts [4] Earnings Surprise Prediction - The Most Accurate Estimate for Community Financial is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -0.65%, suggesting a bearish outlook [11] - Despite the negative Earnings ESP, the company holds a Zacks Rank of 2 (Buy), complicating predictions of an earnings beat [11] Historical Performance - In the last reported quarter, Community Financial exceeded the consensus EPS estimate of $0.91 by delivering $0.93, resulting in a surprise of +2.20% [12] - Over the past four quarters, the company has beaten consensus EPS estimates three times [13] Industry Context - In the Zacks Financial - Miscellaneous Services industry, American Express (AXP) is expected to report earnings of $3.86 per share, reflecting a year-over-year change of +10.6% [17] - American Express's revenue is projected to be $17.69 billion, up 8.3% from the previous year, with an unchanged consensus EPS estimate over the last 30 days [18]

Group 1 - Community Financial System, Inc. (NYSE: CBU) earnings for the last two quarters have been mostly in line with expectations [1] - Future growth is anticipated through network expansion and downward re-pricing of deposits [1]

Company Overview - Community Financial System, Inc (CBU) operates four scaled, complementary business lines: Employee Benefit Services, Insurance Services, Wealth Management Services, and Banking[5] - In Q1 2024, operating noninterest revenues accounted for 39% of total operating revenues[6] - The company's total operating revenue has grown at a 73% compound annual growth rate (CAGR) over the 10-year period from 2013 to 2023[12] Financial Performance - The company's Q1 2024 fully-diluted GAAP EPS was $076, while non-GAAP operating EPS was $082[29] - The company's Q1 2024 net interest income was $1070 million, a decrease of 36% from Q1 2023[80] - The company's Q1 2024 operating noninterest revenues increased by 71% compared to Q1 2023[27] Banking Segment - As of March 31, 2024, the company had $134 billion in total deposits[50] - As of March 31, 2024, the company had $988 billion in total loans[56] - The company's loan portfolio is diversified, with 36% in 1-4 family residential real estate, 16% in indirect auto loans, 14% in non-owner occupied CRE, and other segments[54]

Core Viewpoint - Community Financial System, Inc. will host a conference call to discuss its financial and operating results for the second quarter of 2025, scheduled for July 22, 2025 [1][2]. Group 1: Conference Call Details - The conference call will take place on Tuesday, July 22, 2025, at 11:00 a.m. Eastern Time [2]. - Dial-in numbers for the call include 1-833-630-0464 for U.S. participants and 1-412-317-1809 for international participants [2]. - A webcast of the call will be available at https://app.webinar.net/n7jl8918GAN, with management's prepared remarks lasting approximately 15 minutes, followed by a Q&A session [2]. Group 2: Financial Results Release - The financial results for the second quarter will be released prior to market open on July 22, 2025, and will be accessible in the 'News' section of the Company's website [3]. - A replay of the webcast will be available on the website for one year at no cost [3]. Group 3: Company Overview - Community Financial System, Inc. is a diversified financial services company with four main business lines: banking services, employee benefit services, insurance services, and wealth management services [4]. - The banking subsidiary, Community Bank, N.A., has over $16 billion in assets and operates approximately 200 customer facilities across several states [4]. - The Company also includes subsidiaries that provide employee benefits administration, insurance services, and comprehensive financial planning [4].

Core Viewpoint - Community Financial System (CBU) has been upgraded to a Zacks Rank 2 (Buy), indicating an upward trend in earnings estimates which is a significant factor influencing stock prices [1][4]. Earnings Estimates and Ratings - The Zacks rating system is based solely on a company's changing earnings picture, tracking the Zacks Consensus Estimate for EPS from sell-side analysts [2]. - The Zacks rating upgrade reflects a positive outlook on Community Financial's earnings, which could positively impact its stock price [4][6]. Impact of Earnings Estimates on Stock Prices - Changes in a company's future earnings potential, as shown through earnings estimate revisions, are strongly correlated with near-term stock price movements [5]. - Institutional investors utilize earnings estimates to determine the fair value of stocks, leading to significant price movements based on their trading activities [5]. Community Financial's Earnings Outlook - Community Financial is projected to earn $4.07 per share for the fiscal year ending December 2025, representing an 18.7% year-over-year increase [9]. - Over the past three months, the Zacks Consensus Estimate for Community Financial has increased by 0.2% [9]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks averaging a +25% annual return since 1988 [8]. - Community Financial's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating strong potential for market-beating returns in the near term [11].

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]

Financial Data and Key Metrics Changes - The company's GAAP earnings per share for Q1 2025 was $0.93, up $0.17 or 22% year-over-year, but down $0.01 or 1% from the previous quarter [12] - Operating earnings per share increased to $0.98 from $0.82 a year prior and $1.00 in the linked fourth quarter [12] - Total operating revenues reached $196 million, up $18.7 million or 10.6% year-over-year, consistent with the record result from the previous quarter [13] - Net interest income was $120.2 million, a $13.2 million or 12% improvement year-over-year, marking the fourth consecutive quarter of expansion [14] 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 [6] - Employee Benefit Services had strong business momentum, while the insurance services business experienced significant revenue growth, up $3.1 million or 27.8% year-over-year [8][15] - Wealth Management Services results were in line with the previous quarter and showed meaningful year-over-year growth [9] Market Data and Key Metrics Changes - Ending loans decreased by $11.2 million or 0.1% during the first quarter, ending a streak of fourteen consecutive quarters of loan growth [18][19] - Total deposits increased by $453.3 million or 3.4% during the first quarter, driven by an increase in municipal deposits [19] - Non-performing loans totaled $75 million, representing 72 basis points of total loans outstanding, an increase from the previous quarter [21] Company Strategy and Development Direction - The company aims for mid-single-digit growth in commercial and mortgage portfolios, despite a slight decrease in pipelines [7] - The focus remains on appropriate risk-reward in terms of credit quality, with a commitment to not change the credit box [31][82] - The company is actively expanding its branch network, with several new branches planned for the year [33][35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's diversified revenue profile and strong liquidity, which provide a solid foundation for continued earnings growth [23] - The current economic uncertainty is noted as a significant factor, with management emphasizing the need for prudence in risk-taking [11] - The outlook for net interest income remains positive, with expectations for continued expansion in 2025 [15] Other Important Information - The effective tax rate for Q1 2025 was 22.8%, slightly down from 22.9% in the prior year [18] - The company recorded a provision for credit losses of $6.7 million during the first quarter, reflecting an increase for a specific reserve on a non-owner occupied CRE loan [16] 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, and more payoffs than last year [28] Question: What is the status of de novo branch expansion? - Management confirmed that they are on track to open several new branches by the end of the year, with expected startup costs in Q3 [33][35] Question: How is loan pricing for auto loans currently? - Loan pricing for auto loans has tightened, with a reduction of about 50 basis points in the current quarter [41] Question: What is the outlook for the Employee Benefits Services business? - Management expects lower single digits to mid-single digits growth in the Employee Benefits Services business, with good momentum in plan acquisitions [48] Question: How is the company managing deposit costs? - Management indicated that while there may be slight improvements in deposit pricing, it will be challenging to significantly lower costs given the current starting point [60] Question: What is the outlook for M&A activity? - Management stated that M&A strategies remain unchanged, focusing on quality additions to the company, despite current market uncertainties [61][62]

Core Insights - Community Financial System (CBU) reported revenue of $197.14 million for Q1 2025, marking a year-over-year increase of 10.6% and an EPS of $0.93 compared to $0.82 a year ago, with a slight revenue surprise of -0.20% against the Zacks Consensus Estimate of $197.54 million and an EPS surprise of +2.20% over the consensus estimate of $0.91 [1] Financial Performance Metrics - The efficiency ratio (GAAP) was reported at 63.8%, better than the average estimate of 65.2% from three analysts [4] - The net interest margin stood at 3.2%, matching the average estimate from three analysts [4] - Total interest-earning assets averaged $15.17 billion, slightly above the estimated $15.16 billion [4] - Net charge-offs as a percentage of average loans were 0.1%, aligning with the two-analyst average estimate [4] - Fully tax-equivalent net interest income was $121.11 million, close to the average estimate of $121.13 million [4] - Total non-interest income was $76.04 million, below the average estimate of $76.43 million [4] - Employee benefit services generated $32.62 million, lower than the two-analyst average estimate of $34.53 million [4] - Insurance services reported $14.20 million, exceeding the two-analyst average estimate of $11.96 million [4] - Wealth management services brought in $9.86 million, slightly below the two-analyst average estimate of $9.92 million [4] - Mortgage banking income was $1 million, surpassing the average estimate of $0.73 million from two analysts [4] - Deposit service and other banking fees totaled $18.11 million, compared to the average estimate of $19.26 million from two analysts [4] Stock Performance - Community Financial's shares have returned -2.1% over the past month, compared to a -0.8% change in the Zacks S&P 500 composite, with a current Zacks Rank of 3 (Hold), indicating potential performance in line with the broader market [3]