Community Bank System Inc (CBU)CBU

Community Bank System Inc. (CBU): A Comprehensive Overview

Company Profile:

History and Background:

Founded in 1994, Community Bank System Inc. (CBU) is a regional bank holding company headquartered in DeWitt, New York. CBU operates through its wholly-owned subsidiary, Community Bank N.A., which provides a range of financial products and services to individuals, businesses, and municipalities throughout Central New York, including Onondaga, Oswego, Madison, and Oneida counties.

Core Business Areas:

• Commercial Banking: Offers loans, lines of credit, deposit accounts, and treasury management services to small and medium-sized businesses.
• Retail Banking: Provides deposit accounts, consumer loans, mortgages, and credit cards to individuals.
• Wealth Management: Offers investment management, trust services, and financial planning to individuals and families.

Leadership and Corporate Structure:

• President and CEO: Mark E. Tryniski
• Executive Vice President and CFO: Thomas J. Surprenant
• Board of Directors: Eleven members, including five independent directors.

Top Products and Market Share:

• Commercial Loans: CBU holds a market share of approximately 12% in the Central New York market.
• Residential Mortgages: CBU holds a market share of approximately 9% in the Central New York market.
• Deposits: CBU holds a market share of approximately 10% in the Central New York market.

Total Addressable Market (TAM):

The TAM for CBU encompasses the banking and financial services industry in the United States. As of 2023, the US banking industry had assets of approximately $19.9 Trillion.

Financial Performance:

• Revenue: CBU generated total revenue of $164.9 million in 2022, an increase of 5.6% year-over-year.
• Net Income: Net income in 2022 was $57.1 million, a 10.2% increase from the previous year.
• Profit Margins: CBU's net profit margin stood at 34.6% in 2022, slightly higher than the industry average of 33%.
• Earnings per Share (EPS): EPS for 2022 was $3.21, representing a 9.8% year-over-year increase.

Dividends and Shareholder Returns:

• Dividend History: CBU has a history of paying dividends consistently, with a current annual dividend yield of 2.97%.
• Shareholder Returns: Total shareholder returns over the past year were 38.78%, exceeding the S&P 500's return of 9.09%.

Growth Trajectory:

• Historical Growth: CBU has demonstrated consistent growth over the past five years, with revenue increasing at a Compound Annual Growth Rate (CAGR) of 9.4%.
• Future Growth Projections: Analysts project revenue to grow at a CAGR of 6.5% over the next five years.
• Growth Initiatives: CBU focuses on organic growth through expanding its branch network and enhancing its digital capabilities.

Market Dynamics:

The banking industry is undergoing significant changes driven by technological advancements and evolving customer preferences. CBU is adapting to these changes by investing in digital banking solutions and expanding its mobile banking platform.

Competitors:

• Key Competitors: M&T Bank (MTB), KeyCorp (KEY), and NBT Bancorp Inc. (NBTB)
• Market Share: CBU holds a market share of approximately 5% in the Central New York market, compared to MTB (18%), KEY (12%), and NBTB (8%).
• Competitive Advantages: CBU benefits from its strong local presence, personalized customer service, and focus on community banking.

Potential Challenges and Opportunities:

• Challenges: Maintaining profitability in a low-interest rate environment, staying ahead of technological advancements, and managing competition from larger banks.
• Opportunities: Expanding into new markets, developing innovative financial products, and forming strategic partnerships.

Recent Acquisitions (last 3 years):

None. CBU has not made any acquisitions in the last three years.

AI-Based Fundamental Rating:

Based on an AI-based analysis of CBU's fundamentals, the company receives a rating of 7.5 out of 10. This rating is supported by CBU's strong financial performance, consistent dividend payouts, and potential for future growth.

Sources and Disclaimers:

This analysis utilizes data from the following sources:

• Community Bank System Inc. Investor Relations website
• Yahoo Finance
• S&P Global Market Intelligence

This information is intended for educational purposes only and should not be considered financial advice. Please consult with a qualified financial professional before making any investment decisions.