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Community Bank System (CBU)
NYSE:CBU
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Community Bank System
(NYSE:CBU)
73Outperform
Positive Factors
Earnings Outlook
Analyst upgrades Community Financial System (CBU) to Strong Buy from Market Perform, reflecting an improved earnings outlook and continued strong growth from fee-based businesses.
Revenue Growth
CBU's fee businesses are experiencing revenue growth in the high-single to low-double-digit range, indicating strong performance relative to the community bank sector.
Negative Factors
Credit Quality Risks
Potential risks to CBU's target include rapid deterioration in credit quality, dilutive mergers and acquisitions, slower repricing, or general weakness in bank stocks.
Expense Impact
Third quarter results were modestly below expectations partly due to expenses, which masked positive revenue trends.
Community Bank System (CBU) vs. S&P 500 (SPY)
Market Cap
$3.00B
Dividend Yield3.32%
Average Volume (3M)274.41K
Price to Earnings (P/E)15.8
Beta (1Y)1.04
Revenue Growth14.34%
EPS Growth13.06%
CountryUS
Employees2,730
SectorFinancial
Sector Strength85
IndustryBanks - Regional
Share Statistics
EPS (TTM)3.60
Shares Outstanding52,836,643
10 Day Avg. Volume261,251
30 Day Avg. Volume274,411
Financial Highlights & Ratios
PEG Ratio1.21
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.12
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit10.24
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$65.00Price Target Upside14.34% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
Community Bank System Business Overview & Revenue Model
Company DescriptionCommunity Bank System, Inc. (CBU) is a financial holding company headquartered in DeWitt, New York. It operates through its subsidiaries, providing a broad range of retail and business banking services. The bank primarily serves customers in the northeastern United States, focusing on community-oriented financial solutions. Its core services include personal and commercial banking, mortgage lending, insurance, and wealth management services.
How the Company Makes MoneyCommunity Bank System, Inc. generates revenue primarily through interest income from loans and leases, as well as interest and dividends from investment securities. The company also earns non-interest income from fees and service charges associated with deposit accounts, wealth management, insurance services, and card services. In addition, CBU benefits from strategic acquisitions and partnerships that expand its footprint and enhance its product offerings, further contributing to its revenue growth. By maintaining a diverse portfolio of financial products and services, Community Bank System is able to create multiple streams of income and sustain financial stability.
Community Bank System Financial Statement Overview
Summary
Community Bank System demonstrates a solid financial position with strong margins and zero debt, reflecting prudent financial management. While the company shows stable profitability, opportunities for growth in revenue and free cash flow stability could enhance future performance. The financial health is robust, but continuous monitoring of equity and cash flow trends is recommended for sustained success.Income Statement
Community Bank System shows a stable income statement with consistent revenue and net income growth over recent years. The gross profit margin and EBIT margins remain strong, indicating efficient cost management and operational efficiency. However, revenue growth has been relatively modest, and net profit margins could see further improvement.75
Positive
Balance Sheet
The balance sheet reflects a strong equity position with zero total debt as of the latest report, highlighting a conservative financial strategy. The equity ratio remains solid, indicating healthy financial leverage. Nevertheless, a decrease in stockholders' equity over time suggests attention may be needed in sustaining shareholder value.80
Positive
Cash Flow
Cash flow analysis indicates positive operating cash flow and free cash flow, which support business sustainability. However, fluctuations in investing and financing cash flows suggest variability in cash management strategies. The free cash flow growth rate is positive but not consistently high, leaving room for improvement in cash flow stability.70
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 643.53M | 640.67M | 679.36M | 620.65M | 596.40M | Gross Profit |
| 328.49M | 756.03M | 364.39M | 323.86M | 312.99M | EBIT |
| 297.11M | 227.08M | 278.63M | 241.35M | 206.08M | EBITDA |
| 297.11M | 195.73M | 272.34M | 271.51M | 242.02M | Net Income Common Stockholders |
| 182.48M | 131.92M | 188.08M | 189.69M | 164.68M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 2.98B | 190.96M | 4.36B | 6.81B | 5.19B | Total Assets |
| 16.39B | 15.56B | 15.84B | 15.55B | 13.93B | Total Debt |
| 737.31M | 460.60M | 1.91B | 329.88M | 371.29M | Net Debt |
| 545.42M | 269.64M | 1.70B | -1.55B | -1.27B | Total Liabilities |
| 14.62B | 13.86B | 14.28B | 13.45B | 11.83B | Stockholders Equity |
| 1.76B | 1.70B | 1.55B | 2.10B | 2.10B |
| Cash Flow | Free Cash Flow | |||
| 242.28M | 209.84M | 201.68M | 189.37M | 165.09M | Operating Cash Flow |
| 242.28M | 228.42M | 214.60M | 202.55M | 179.48M | Investing Cash Flow |
| -835.62M | 335.78M | -2.14B | -1.53B | -398.72M | Financing Cash Flow |
| 599.38M | -583.13M | 259.22M | 1.56B | 1.66B |
Community Bank System Technical Analysis
Positive
56.85
Price Trends
56.63
Positive
60.20
Negative
60.16
Negative
Market Momentum
-0.21
Negative
57.39
Neutral
66.10
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CBU, the sentiment is Positive. The current price of 56.85 is above the 20-day moving average (MA) of 53.62, above the 50-day MA of 56.63, and below the 200-day MA of 60.16, indicating a neutral trend. The MACD of -0.21 indicates Negative momentum. The RSI at 57.39 is Neutral, neither overbought nor oversold. The STOCH value of 66.10 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CBU.
Community Bank System Risk Analysis
Community Bank System disclosed 36 risk factors in its most recent earnings report. Community Bank System reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Community Bank System Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $3.00B | 15.80 | 10.92% | 3.32% | 14.34% | 13.06% | |
72 Outperform | $3.12B | 11.98 | 10.25% | 1.15% | 5.14% | ― | |
71 Outperform | $3.07B | 10.08 | 7.83% | 2.74% | 13.04% | 31.39% | |
69 Neutral | $3.01B | 10.84 | 10.07% | 3.23% | 2.76% | -12.43% | |
68 Neutral | $2.77B | 9.67 | 10.60% | 4.14% | 21.45% | 5.62% | |
66 Neutral | $2.94B | 12.66 | 9.11% | 4.53% | -0.47% | 5.97% | |
64 Neutral | $12.65B | 9.74 | 8.04% | 17044.64% | 12.65% | -5.11% |
* Financial Sector Average
Performance Comparison
CBU
Community Bank System
56.85
11.34
24.92%
CATY
Cathay General Bancorp
42.94
7.21
20.18%
FULT
Fulton Financial
17.36
1.02
6.24%
RNST
Renasant
33.57
4.03
13.64%
WSFS
Wsfs Financial
53.30
7.55
16.50%
FHB
First Hawaiian
23.26
2.13
10.08%
Community Bank System Earnings Call Summary
Earnings Call Date:Apr 29, 2025
(Q1-2025)
| % Change Since: 2.16%|
Next Earnings Date:Jul 28, 2025
Earnings Call Sentiment Positive
The company's first quarter earnings call highlighted strong revenue and net interest income growth, bolstered by significant performance in the insurance services segment. However, there were challenges with increasing nonperforming loans and stagnation in loan growth, coupled with rising noninterest expenses. Despite these lowlights, the financial performance and growth in key areas indicate a positive outlook.Q1-2025 Updates
Positive Updates
Strong Revenue Growth
The company recorded total operating revenues of $196 million in the first quarter, up $18.7 million or 10.6% from one year prior. This quarter established quarterly highs for net interest income and insurance services revenues.
Improvement in Net Interest Income
The company's net interest income was $120.2 million in the first quarter, a $13.2 million or 12% improvement over the first quarter of 2024, marking the fourth consecutive quarter of net interest income expansion.
Insurance Services Performance
Insurance services revenues were up $3.1 million or 27.8% over the prior year's first quarter, driven by contingent commissions and recent acquisitions.
Record Operating PPNR
Operating PPNR per share was up 18.6% on a year-over-year basis, reaching $1.40, consistent on a linked quarter basis.
Negative Updates
Nonperforming Loans Increase
Nonperforming loans totaled $75 million, or 72 basis points of total loans outstanding, representing a $1.6 million or two basis point increase from the end of the late fourth quarter.
Loan Growth Stagnation
Ending loans decreased $11.2 million or 0.1% during the first quarter, ending the company's streak of fourteen consecutive quarters of loan growth.
Increased Noninterest Expenses
Total noninterest expenses increased by $7.2 million or 6.1%, primarily driven by increases in salaries and employee benefits, data processing, communication, and occupancy expenses.
Company Guidance
During the first quarter of 2025, Community Bank System, Inc. reported a solid performance, with GAAP earnings per share increasing by 22% year-over-year to $0.93, while operating earnings per share also rose to $0.98 from $0.82 in the previous year. The company's operating return on assets was 1.28%, and operating pretax pre-provision net revenue (PPNR) per share increased by 18.6% on a year-over-year basis, reaching $1.40. Total operating revenues rose by 10.6% to $196 million, with net interest income contributing $120.2 million, marking a 12% improvement from the first quarter of 2024. The bank's net interest margin increased slightly to 3.24% from the previous quarter's 3.20%. Community Bank System's diversified business model supported growth across its banking, insurance, and employee benefit services, with insurance services notably achieving a 27.8% revenue increase. Despite challenges such as seasonal slowdowns and competitive pressures, the company maintained a strong liquidity position, with sources of liquidity totaling $5.9 billion, and a robust loan-to-deposit ratio of 75%. While nonperforming loans rose slightly, the company's allowance for credit losses increased to $82.8 million, representing over seven times the trailing twelve-month net charge-offs. Looking ahead, the company remains confident in its revenue growth potential, supported by strong capital reserves and a stable core deposit base.Community Bank System Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Community Bank System Appoints New CFO Marya Wlos
Neutral
Mar 11, 2025
On March 11, 2025, Community Financial System, Inc. announced the appointment of Marya Burgio Wlos as Executive Vice President and Chief Financial Officer, effective March 31, 2025. She will succeed Joseph E. Sutaris, who will retire on July 1, 2025, after assisting with the transition. Ms. Wlos brings extensive financial experience from her previous roles at M&T Bank, UBS AG, Citadel LLC, and Bank of America. Her appointment is expected to play a critical role in executing the company’s strategic plan, with her compensation package including an annual base salary, incentive compensation, and equity awards. The transition marks a significant leadership change for the company, with implications for its strategic direction and operations.
Executive/Board ChangesShareholder Meetings
Community Bank System Announces Board Member’s Departure
Neutral
Feb 14, 2025
Susan E. Skerritt, a member of the Board of Directors at Community Financial System, Inc., has announced she will not seek re-election and will retire immediately following the 2025 Annual Meeting of Shareholders. Her decision to step down was not due to any disagreement with the company’s operations, policies, or practices.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.