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Community Bank (CBU)
:CBU
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Community Bank System
(NYSE:CBU)
Rating:73Outperform
Price Target:
$62.00
â–²(4.27%Upside)
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. SPDR S&P 500 ETF (SPY)
Market Cap
$3.12B
Dividend Yield3.11%
Average Volume (3M)168.41K
Price to Earnings (P/E)16.4
Beta (1Y)1.02
Revenue Growth14.34%
EPS Growth12.98%
CountryUS
Employees2,730
SectorFinancial
Sector Strength82
IndustryBanks - Regional
Share Statistics
EPS (TTM)0.98
Shares Outstanding52,851,450
10 Day Avg. Volume191,030
30 Day Avg. Volume168,405
Financial Highlights & Ratios
PEG Ratio3.04
Price to Book (P/B)1.56
Price to Sales (P/S)0.00
P/FCF Ratio14.56
Enterprise Value/Market Cap1.03
Enterprise Value/Revenue0.87
Enterprise Value/Gross Profit4.32
Enterprise Value/Ebitda3.11
Forecast
1Y Price Target
$65.00Price Target Upside9.32% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
Community Bank System Business Overview & Revenue Model
Company DescriptionCommunity Bank System, Inc. operates as the bank holding company for Community Bank, N.A. that provides various banking and other financial services to retail, commercial, and municipal customers. It operates through three segments: Banking, Employee Benefit Services, and All Other. The company offers various deposits products, such as checking, savings, and money market deposit accounts, as well as time deposits. It also provides loans, including consumer mortgages; general purpose commercial and industrial loans, and mortgages on commercial properties; paycheck protection program loans; installment loans that are originated through selected dealerships and are secured by automobiles, marine, and other recreational vehicles; personal installment loans and lines of credit for consumers; and home equity products. In addition, the company offers broker-dealer and investment advisory; cash management, investment, and treasury services; asset management; and employee benefit services, as well as operates as a full-service insurance agency that offers personal and commercial lines of insurance, and other risk management products and services. Further, it provides contribution plan administration, employee benefit trust, collective investment fund, retirement plan administration, fund administration, transfer agency, actuarial and benefit consulting, VEBA/HRA, and health and welfare consulting services. Additionally, the company offers wealth management, retirement planning, higher educational planning, fiduciary, risk management, trust, and personal financial planning services; and investment alternatives, including stocks, bonds, mutual funds, and advisory products, as well as master recordkeeping services. As of January 24, 2022, it operated approximately 215 customer facilities across Upstate New York, Northeastern Pennsylvania, Vermont, and Western Massachusetts. Community Bank System, Inc. was founded in 1866 and is headquartered in DeWitt, New York.
How the Company Makes MoneyCommunity Bank System makes money through several key revenue streams. The primary source of revenue is interest income, which is earned from loans provided to individuals, businesses, and municipalities. This includes personal loans, commercial loans, and mortgages. The bank also generates non-interest income through fees and service charges associated with deposit accounts, asset management, and trust services. Additionally, the company's insurance subsidiary, OneGroup, contributes to revenue by offering various insurance products and services. Community Bank System benefits from its strategic locations in underserved and growing markets, capitalizing on its extensive branch network and strong community relationships to enhance its earnings.
Community Bank System Earnings Call Summary
Earnings Call Date:Apr 29, 2025
(Q1-2025)
| % Change Since: 7.72%|
Next Earnings Date:Jul 22, 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 Financial Statement Overview
Summary
Community Bank System demonstrates strong financial health with consistent revenue growth and profitability. The balance sheet is stable, though rising debt levels warrant monitoring. Cash flows are robust, supporting operational and strategic initiatives. Overall, the company is well-positioned within the regional banking sector, though careful management of leverage and equity balance is recommended for sustained growth.Income Statement
Community Bank System shows strong profitability with a consistent increase in total revenue from $617 million in 2020 to $961 million TTM. The gross profit margin remains high, indicating effective cost management. Net profit margin and EBIT margin have been stable, reflecting solid operational efficiency. Revenue growth is positive, highlighting the company's expansion capabilities.78
Positive
Balance Sheet
The balance sheet is robust with a healthy stockholders' equity of $1.83 billion TTM, although there is an increasing trend in total debt, which grew from $371 million in 2020 to $862 million TTM. The debt-to-equity ratio remains manageable, allowing for strategic leverage. Return on Equity (ROE) indicates effective utilization of equity, though there is room for improvement in equity ratio stability.72
Positive
Cash Flow
Cash flow statements show a positive trend in operating cash flow, supporting the company's operational health. Free cash flow has been stable, enabling reinvestment and dividend opportunities. The operating cash flow to net income ratio is strong, reflecting efficient cash conversion. However, fluctuations in investing and financing cash flows suggest ongoing strategic adjustments.75
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 961.45M | 940.71M | 755.98M | 702.45M | 633.65M | 617.28M |
| Gross Profit | 741.96M | 723.53M | 640.67M | 664.58M | 629.49M | 582.19M |
| EBITDA | 276.86M | 265.36M | 196.58M | 270.74M | 271.51M | 236.72M |
| Net Income | 191.22M | 182.48M | 131.92M | 188.08M | 189.69M | 164.68M |
Balance Sheet | ||||||
| Total Assets | 16.76B | 16.39B | 15.56B | 15.84B | 15.55B | 13.93B |
| Cash, Cash Equivalents and Short-Term Investments | 834.27M | 508.96M | 3.11B | 4.36B | 6.81B | 5.19B |
| Total Debt | 862.04M | 998.87M | 765.20M | 1.14B | 329.88M | 371.29M |
| Total Liabilities | 14.93B | 14.62B | 13.86B | 14.28B | 13.45B | 11.83B |
| Stockholders Equity | 1.83B | 1.76B | 1.70B | 1.55B | 2.10B | 2.10B |
Cash Flow | ||||||
| Free Cash Flow | 196.19M | 221.57M | 209.84M | 201.68M | 189.17M | 164.70M |
| Operating Cash Flow | 224.89M | 242.28M | 228.42M | 214.60M | 202.55M | 179.48M |
| Investing Cash Flow | -651.25M | -835.62M | 335.78M | -2.14B | -1.53B | -398.72M |
| Financing Cash Flow | 606.00M | 599.38M | -583.13M | 259.22M | 1.56B | 1.66B |
Community Bank System Technical Analysis
Positive
59.46
Price Trends
56.28
Positive
56.77
Positive
59.49
Negative
Market Momentum
0.92
Negative
63.55
Neutral
83.69
Negative
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 59.46 is above the 20-day moving average (MA) of 56.77, above the 50-day MA of 56.28, and below the 200-day MA of 59.49, indicating a neutral trend. The MACD of 0.92 indicates Negative momentum. The RSI at 63.55 is Neutral, neither overbought nor oversold. The STOCH value of 83.69 is Negative, 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 (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $3.30B | 14.30 | 9.11% | 3.96% | -0.36% | 5.97% | |
77 Outperform | $3.56B | 11.66 | 7.83% | 2.35% | 13.47% | 31.39% | |
76 Outperform | $3.30B | 13.07 | 10.25% | 1.17% | 5.06% | -0.30% | |
73 Outperform | $3.12B | 16.41 | 10.91% | 3.11% | 14.34% | 12.98% | |
70 Outperform | $3.44B | 11.12 | 10.60% | 3.77% | 21.37% | 5.62% | |
70 Neutral | $3.32B | 11.95 | 10.07% | 2.87% | 2.76% | -12.43% | |
61 Neutral | C$14.64B | 6.10 | 22.26% | 5.61% | 27.38% | -22.40% |
* Financial Sector Average
Performance Comparison
CBU
Community Bank System
59.46
12.78
27.38%
CATY
Cathay General Bancorp
47.54
10.72
29.11%
FULT
Fulton Financial
19.17
2.82
17.25%
RNST
Renasant
37.87
7.55
24.90%
WSFS
Wsfs Financial
58.65
12.29
26.51%
FHB
First Hawaiian
26.43
5.71
27.56%
Community Bank System Corporate Events
Executive/Board ChangesShareholder MeetingsBusiness Operations and Strategy
Community Bank System Holds Annual Shareholders Meeting
Positive
May 23, 2025
On May 21, 2025, Community Financial System, Inc. held its Annual Shareholders Meeting virtually, where shareholders elected 12 directors for one-year terms, approved the executive compensation on an advisory basis, and ratified PricewaterhouseCoopers LLP as the independent registered public accounting firm for the year ending December 31, 2025. These decisions reflect the shareholders’ support for the company’s leadership and financial oversight, potentially strengthening its governance and operational strategy moving forward.
The most recent analyst rating on (CBU) stock is a Hold with a $61.00 price target. To see the full list of analyst forecasts on Community Bank System stock, see the CBU Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.