Community Bank System
Annual Report 2021

Plain-text annual report

, , 30.2 . 510,000 4 1 215 3 2 4 54 3 9 6,000 2 5 0 0 433 0 9 3 6 3 38 7 3 7, 32,000 1 29 7 10 0 0 0 0 9 5 12,300,000,000 6 0 7 2 3 3 8 2 9 3 4 25.6 103 2 8 3 5 ,7 0 0 , 2 02 1 A N N UA L R E P O R T . OUR ENTERPRISE PROFILE A unique regional community bank with branch locations in four Northeastern states, approximately $15 billion in assets, and noninterest income that represents nearly 40% of total revenue. 250 250+ CUSTOMER FACILITIES COMPANYWIDE 64 1ST OR 2ND DEPOSIT MARKET SHARE IN APPROXIMATELY 64% OF TOWNS OR CITIES WITH A CBNA BRANCH1 4 RETAIL BANKING PRESENCE IN 4 STATES (NY / PA / VT / MA) 51,200 SERVICE AREA FOOTPRINT OF APPROXIMATELY 51,200 SQUARE MILES 2,927 2,927 COMPANY EMPLOYEES AT YEAREND 633,000 633,000+ PERSONAL BANKING CUSTOMER RELATIONSHIPS 60,000 60,000+ BUSINESS BANKING CUSTOMER RELATIONSHIPS 39.7 NONINTEREST INCOME ACCOUNTED FOR 39.7% OF TOTAL REVENUE IN 2021 4,012,833,000 $4.0 BILLION MARKET CAPITALIZATION AT 12/31/21 1 Based on FDIC Summary of Deposit Data as of June 30, 2021 114,328,000 $114.3 MILLION IN REVENUE FROM OUR NATIONAL BENEFITS ADMINISTRATION PLANS BUSINESS 189,694,000 $189.7 MILLION NET INCOME FOR 2021 620,647,000 $620.6 MILLION IN TOTAL REVENUE FOR 2021 3.48 RECORD GAAP EARNINGS PER SHARE OF $3.48 FOR 2021 150 150+ YEAR COMMUNITY BANK HISTORY 20 20+ YEAR CONSISTENT BUSINESS MODEL TABLE OF CONTENTS LETTER TO SHAREHOLDERS 2 EXECUTIVE MANAGEMENT 20 BRANCH LOCATIONS 23 PERFORMANCE PROFILE 8 OPERATIONS REVIEW 10 BOARD OF DIRECTORS 21 CORPORATE AND ADMINISTRATION 22 SHAREHOLDER INFORMATION 25 , , 30.2 to rewarding our shareholders . We are committed and have raised our 510,000 dividend for 29 consecutive years. 4 1 215 3 2 4 54 3 9 6,000 2 5 0 0 433 0 9 3 6 3 38 7 3 7, 32,000 1 29 7 10 0 0 0 0 9 5 12,300,000,000 6 0 7 2 3 3 8 2 9 3 4 25.6 103 2 8 3 5 ,7 0 0 , . 1 To OUR SHAREHOLDERS, CUSTOMERS and EMPLOYEES: With nimble strategic planning and a resilient business model, Community Bank System, Inc. produced solid financial results in 2021. We continued to support our customers and communities amidst an undulating global pandemic, dedicating resources to serve our customers in more efficient, safe and convenient ways. We delivered new and improved digital banking tools with the disciplined execution that’s been our hallmark for more than 20 years. We took deliberate steps to optimize our branch network, prudently thinning the density created by our successful in-market acquisition strategy while maintaining our priority that all customers have a local Community Bank branch. We focused on countering ongoing margin pressure and driving organic growth, with strong outcomes and momentum carrying us into 2022. We were pleased to do well by our shareholders, customers, employees and community partners alike. By the Numbers Our year was highly productive, as evident by the numbers. Net income grew by 15.2% over 2020, reaching a record $189.7 million. Diluted earnings per share totaled a record $3.48 for 2021, increasing $0.40 per share, or 13.0%, from 2020. Operating diluted earnings per share (non-GAAP) measured a record $3.49, growing $0.25 per share, or 7.7%, over 2020. Growing and diversified revenue streams from our nonbanking businesses boosted overall fee income to 39.7% of total revenue, compared to 22.7% for our peers. We grew the number of deposit accounts alongside higher average account balances. Deposit funding costs of 0.09% remained not only at historic lows, but five basis points lower than our proxy peer average. Loans grew $334.5 million, or nearly 5%, excluding the impact of balances generated through federal stimulus programs. Our Tier 1 leverage ratio of 9.09% at December 31, 2021 was nearly two times the well-capitalized regulatory standard of 5%. Our ample capital position was bolstered by pristine asset quality metrics, including negligible credit losses of just 0.04% of average loans. We increased our cash dividends by 2.4%, marking 29 consecutive years of increases and representing a strong 2.3% dividend yield. Price to tangible book value benchmarks — or the relative value the market sees in our company’s stock among other banks — continued to exceed our peers by a wide margin. 2.0% 1.0% One-year total shareholder returns were 22.3%, more than twice our goal to provide 10% average annual shareholder returns over time and 433% 15-year cumulative shareholder returns ranked 6th highest among the 100 largest 1.36% publicly-traded US banks. We’ve consistently added value for our shareholders across all economic cycles. 1 Core ROAA, a non-GAAP measure, excludes net income attributable to non-controlling interest, gains on securities, non-recurring revenue/expense, amortization of intangible assets and goodwill impairment. 2 20191817161514131221Return on Average Assets1 30.2 . 510,000 4 1 215 3 2 4 54 3 9 6,000 2 5 0 CBU’s successful 0 core deposit 433 0 gathering earned , it the title of 9 3 Best Retail 6 Strategy in Bank , Director’s 2021 3 38 7 RankingBanking 3 study. 7, 32,000 1 29 7 10 0 0 0 0 9 5 12,300,000,000 6 0 7 2 3 3 8 2 9 3 4 25.6 103 2 8 3 5 ,7 0 0 , . 3 EXCELLENCE RECOGNIZED Community Bank System has a well-earned reputation for attaining strong performance that reflects our consistent approach to business, regardless of the economic environment, and commitment to effective execution. Our success does not go unnoticed. 29 CBU’S 29 YEARS OF CONSECUTIVE ANNUAL DIVIDEND INCREASES HAVE ALLOWED IT TO RETAIN An Altered Banking Landscape The ongoing COVID-19 pandemic has affected our operations and our industry in both productive and challenging ways. A notable positive: we experienced record deposit inflows which were largely the result of substantial federal government stimulus support to American citizens in need. Year-end deposits totaled $12.9 billion, up 15.0% from December 31, 2020, while average total deposits for 2021 grew 19.1% over 2020. Nevertheless, in an exceptionally low interest rate environment, we had limited options to redeploy the excess liquidity profitably on our balance sheet, in large part driving net interest margin for the year to 2.82%, from 3.28% for 2020 and 3.76% for 2019, prior to the pandemic’s onset. The banking industry as a whole shared this experience. ITS STATUS AS AN S&P DIVIDEND Additionally, while we believe our asset quality remains ARISTOCRAT 10 RANKED IN TOP 10 OF FORBES AMERICA’S BEST LARGE BANKS FOR 10 OF THE LAST 13 YEARS, INCLUDING #7 IN 2021 10 RANKED TOP 10 FOR CUSTOMER SATISFACTION OF MID-ATLANTIC BANKS IN THE J.D. POWER 2020 U.S. RETAIL BANKING SATISFACTION STUDYSM fundamentally strong, our credit experience in 2021 was supported by the extraordinary federal and state government financial assistance provided to businesses and consumers throughout the pandemic. Alongside widespread vaccine distribution in 2021, these programs helped accelerate economic growth, improving the credit outlook of many of our customers. The combination of these factors and our strong customer relationships resulted in a significant $8.8 million reserve release for the year, benefiting bottom-line results. The second year of the pandemic also brought our participation in the federal government’s “second draw” Paycheck Protection Program (“PPP”), a continuation of the low-interest loan program introduced as part of the 2020 Coronavirus Aid, Relief, and Economic Security Act. As with the 2020 “first draw” PPP, the “second draw” 2021 program is administered by the U.S. Small Business Administration, which can forgive all or a portion of the loan amount if the borrower meets certain conditions. The PPP has provided vital support to small businesses amidst the unprecedented economic disruption caused by the pandemic. As of December 31, 2021, our business lending portfolio included 722 PPP loans with a total balance of $87.9 million, down from 3,417 PPP loans with a total balance of $470.7 million at December 31, 2020. We are proud to support customers in accessing this important funding. Excluding PPP balances, 2021 loan growth totaled 4.8%, driven by increased consumer balances and stable commercial balances compared to the prior year-end. Focused initiatives to drive organic growth across these portfolios have been successful. Consumer indirect loans grew $167.9 million, or 16.4%, from December 31, 2020, while consumer mortgage loans increased $154.6 million, or 6.4%. Commercial and mortgage pipelines grew meaningfully in the third and fourth quarters of 2021, creating solid loan growth momentum into 2022. 4 Optimizing Our Delivery Systems for Growth Optimizing our core banking operations is a main strategic priority for Community Bank. In 2021 we executed in several important ways toward this goal, announcing plans to both add to our branch network through acquisition, reduce certain branch redundancies through consolidations, and expand the ways in which customers can bank with us digitally. We aim to provide the most convenient and sophisticated resources to our customers, in the most profitable way for our shareholders. In-market bank and branch acquisitions are a foundational part of our business model. Chosen selectively, these deals allow us to access new customers within and adjacent to the Community Bank branch footprint, with like-minded community bank partners. In September 2021 we announced our 14th such partnership over the past 20 years, agreeing to acquire Elmira Savings Bank, a $630 million asset bank with 12 offices across the Southern Tier and Finger Lakes regions of New York State. With a solid mortgage business and complimentary business lines, we expect Elmira will be $0.15 per share accretive on a full year basis, excluding acquisition expenses. The acquisition has received shareholder approval and integration plans are progressing well. We expect to close in the second quarter of 2022. With Community Bank’s strong currency and history of value creation for shareholders, including those whom we partner with, we believe we’ll have continued opportunities in 2022 and beyond to find additional bank acquisitions that meet our criteria to create above-average shareholder returns with below-average risk. At the same time, the pandemic fast-tracked trends in customer behavior which were progressively shifting since the evolution of electronic banking methods in recent years. Our branch traffic for the 10 years prior to COVID had declined approximately 4% a year. When COVID hit, it declined another 17% and has remained around that level since. Our pre-pandemic commitment to expanding Community Bank’s digital offerings served us well, and rapid customer adoption of digital banking tools in 2020 allowed us to acutely evaluate our physical branch network. Across 2020 and 2021 we initiated prudent branch consolidations in overbanked regions, while ensuring our customers all have access to a local branch. Importantly, our transition toward digital investment was boosted by the 2021 addition of our newest Director, Mr. Jeff Knauss. Mr. Knauss was previously CEO and co-founder of a digital marketing and advertising firm, and he remains an active entrepreneur in the technology start-up world. His experience in the areas of digital technology, cyber security, consumer-centric marketing, and entrepreneurship is an asset as we continue to utilize technology to effectively serve our customers. As we invest in our digital channels and rationalize our analog channels, we’ve also recognized an opportunity to improve our organic execution. In the commercial space, we are investing in people, systems and products to better identify and secure commercial business in our current footprint, while also pursuing business in adjacent markets that have superior growth potential characteristics. In our mortgage business, we’re investing in products, people, and systems to reposition our historically branch-oriented origination model. We’ve added back-office resources to reduce the pipeline and closing timelines, and we’ve seen a significant shift toward online applications, with approximately 20% of the Bank’s residential mortgage applications being submitted digitally. Rest assured, these efforts aim for improved execution; they will not be at the expense of credit quality. 5 $1.6 $0.8 10-YEAR CAGR = 5.4% $3.4 $1.7 10-YEAR CAGR = 5.6% Strength in Diversification Another component of Community Bank’s $1.70 long-term strategy is investment in non-banking revenue streams to augment the steady, slow-growth profile of our traditional branch banking franchise. Our diversification efforts focus on building momentum in our employee benefits, wealth management and insurance services businesses. With technology and scale, these financial services businesses performed with outstanding results in 2021. Non-banking revenues totaled $181.6 million for 2021, growing 12.4% over 2020. These results reflect organic growth, favorable pricing, and the additive contributions of a benefits acquisition and two insurance businesses completed in 2021. Notably, in July 2021 we acquired Fringe Benefits Design of Minnesota, Inc., a provider of retirement plan administration and benefit consulting services, driving the annual revenues of our Benefit Plans Administrative Services, Inc. subsidiary to nearly $115.0 million. Likewise, in August 2021 we acquired $3.48 certain assets of the Boston-based Thomas Gregory Associates Insurance Brokers, Inc., a specialty-lines insurance broker, driving the annual revenues of our OneGroup, NY, Inc. subsidiary to $34.0 million. These contributions drove Community Bank’s total fee-based revenue up 7.8% to $246.2 million in 2021, accounting for 39.7% of total revenue, up from 38.3% in 2020. In comparison, the median peer’s non-interest revenues comprised just 22.7% of total revenue in 2021. This significant differentiation is an important driver of our favorable long term shareholder returns. Through strategic investment, our non-banking businesses have evolved into sophisticated and complex enterprises with fantastic technology and capabilities that we’re now leveraging into much larger opportunities in the marketplace. We expect to remain active acquirers in this space while continuing to drive organic expansion across our national markets. 6 20191817161514131221Earnings per Share Diluted20191817161514131221Dividend Growth DeclaredExpanding Our Leadership In 2021 we executed on plans to expand the depth of experience and diversity on our leadership team. Our outstanding additions bring an appropriate level of expertise and perspective to provide effective oversight of Community Bank and its subsidiaries. At the corporate level, we were thrilled to welcome two executives with substantive experience across the financial services industry. In June 2021, Dimitar Karaivanov joined the Company as Executive Vice President of Financial Services and Corporate Development. Mr. Karaivanov leads the Company’s non-banking subsidiaries and financial services businesses and operations, including the employee benefit services and institutional trust businesses, the wealth management and investment advisory businesses, and the insurance and risk management businesses. He also assumes leadership of the company’s corporate development efforts, to include both the bank and financial services businesses. With over 15 years of experience as an investment banker for banks, other financial institutions and fintech companies, he is uniquely qualified to assume this important role. Additionally, Maureen Gillan-Myer joined the Company as Executive Vice President and Chief Human Resources Officer in October 2021, bringing over 29 years of leadership and oversight experience with respect to all aspects of human capital management. Ms. Gillan-Myer brings extensive experience in the financial services industry and a deep knowledge of leading HR strategies and implementing programs that produce an efficient and dynamic workforce. Her unique qualifications will be essential in guiding our continued development as an innovative, diverse and inclusive workforce and culture. Finally, with the addition of Mr. Knauss, the Company’s Board of Directors has expanded to 13 members, 12 of whom are independent. Mr. Knauss serves on the Company’s Risk and Governance Committees and as the Board’s representative to the Company’s Technology Committee. His knowledge of the digital technology sector and entrepreneurial experience will be an asset to the Board during this age of digital commerce, and we look forward to his contributions in the areas of marketing, technology development, and business matters. We believe Community Bank System has the people and strategy in place to continue outperforming for our customers and shareholders alike. We’ve entered 2022 with significant energy and operating momentum in both our banking and nonbanking businesses. We have high levels of capital to support future growth, diversified revenue streams provided by our nonbanking businesses, a history of strong credit performance and an exceptional core deposit base. We are deploying our excess liquidity as quickly and prudently as possible, and we will continue to seek attractive opportunities to deploy capital in an entrepreneurial and disciplined manner. We appreciate your continued interest in Community Bank System and we look forward to discussing our progress throughout 2022. Eric E. Stickels Chairman of the Board Mark E. Tryniski President and Chief Executive Officer 7 PERFORMANCE PROFILE Total Revenue1 In millions Net Interest Income In millions $600 $300 $620.6 $380 $374.4 $190 10-YEAR CAGR = 7.6% 10-YEAR CAGR = 6.0% Noninterest Income1 In millions Net Income In millions $240 $120 $246.2 $180 $189.7 $90 10-YEAR CAGR = 10.7% 10-YEAR CAGR = 10.0% Average Interest-Earning Assets In billions Total Deposits In billions $12 $6 $13.39 $12 $6 $12.91 10-YEAR CAGR = 9.3% 10-YEAR CAGR = 10.4% 1 Excluding securities gains/losses and debt extinguishment charges 8 202020202020191919191919181818181818171717171717161616161616151515151515141414141414131313131313121212121212212121212121Net Interest Income In millions2021 PERFORMANCE HIGHLIGHTS 3.48 GAAP EARNINGS OF $3.48 PER SHARE FOR FULL YEAR 2021, UP $0.40, OR 13.0%, FROM $3.08 PER SHARE FOR FULL YEAR 2020 0.04 CONTINUATION OF EXCELLENT ASSET QUALITY METRICS, WITH 2021 NET CHARGE-OFF RATIO OF 0.04% 92.8 CORE NON-TIME DEPOSITS OF $11.98 BILLION MAKE UP 92.8% OF TOTAL DEPOSITS 0.09 FULL YEAR TOTAL COST OF DEPOSITS OF 0.09% 1.72 CASH DIVIDEND RAISED FOR THE 29TH CONSECUTIVE YEAR TO AN ANNUALIZED $1.72 189.7 NET INCOME OF $189.7 MILLION 620.6 TOTAL REVENUE1 OF $620.6 MILLION 3.49 OPERATING DILUTED EARNINGS OF $3.49 PER SHARE 39.7 NONINTEREST REVENUES REPRESENTED 39.7% OF OPERATING REVENUES Selected Financial Highlights Income Statement IN MILLIONS 2021 2011 Net interest income $ 374.4 $ 209.4 Noninterest income Total revenue1 Operating expenses2 246.2 620.6 387.3 Net income $ 189.7 $ Net interest margin 2.82% Per Share Data (Diluted) Earnings per share $ 3.48 $ Operating earnings per share Cash dividends declared Book value 3.49 1.70 38.99 Tangible book value $ 23.77 $ 89.3 298.7 185.5 73.1 4.07% 2.01 2.12 1.00 20.94 11.85 Balance Sheet Data END OF PERIOD, IN MILLIONS Assets Loans Deposits $ 15,553 $ 6,488 7,374 12,911 Shareholders’ equity $ 2,101 $ 3,471 4,795 775 9 CAGR 10-YEAR 6.0% 10.7% 7.6% 7.6% 10.0% (3.6%) 5.6% 5.1% 5.4% 6.4% 7.2% 9.1% 7.8% 10.4% 10.5% COMMUNITY BANK with a STRONG MARKET PRESENCE Through a series of strategic acquisitions, we have built Community Bank into one of the largest community banks based in Upstate New York with more than $15 billion in total assets. Today, our branch network serves individual and business customers across four states. N ORT HERN NEW YORK The North Country of New York, including the Adirondacks and east to the Vermont border SOUTHERN NEW YOR K New York’s Southern Tier, encompassing much of Western New York and the Finger Lakes CENTRAL NEW YOR K From the Eastern Shore of Lake Ontario through Syracuse and reaching the Hudson Valley MARKET AREA ~16,700 sq. mi. MARKET AREA ~12,000 sq. mi. MARKET AREA ~7,200 sq. mi. POPULATION 1.0M POPULATION 2.8M POPULATION 1.1M CAP ITAL REGION Serving Albany and the five counties in and around the Capital District PENNSYLVANIA Serving the Northeastern portion of Pennsylvania NEW ENGLAND Encompassing Vermont and part of Western Massachusetts MARKET AREA ~2,700 sq. mi. MARKET AREA ~4,100 sq. mi. MARKET AREA ~8,500 sq. mi. POPULATION 0.6M POPULATION 0.7M POPULATION 1.1M A Highly Cost-effective Funding Network We have built an effective and highly-efficient funding engine powered by our strong market position in primarily non-metropolitan locations across New York, Pennsylvania, Vermont and Massachusetts. This strength is reflected by our first or second market share in approximately two thirds of the towns and cities where we have a branch location. 12,911,168,000 $12.9 BILLION OF TOTAL DEPOSITS AT 12/31/21 0.09 DEPOSIT FUNDING COSTS AVERAGED 0.09% FOR FULL YEAR 2021 3,921,663,000 $3.9 BILLION IN NONINTEREST-BEARING 11,982,837,000 $12.0 BILLION CORE CHECKING & SAVINGS DEPOSITS DEPOSITS AT YEAR-END 2021 AT 12/31/21 30.4 30.4% DEMAND DEPOSITS 24.8 24.8% OF ALL DEPOSITS ARE INTEREST CHECKING 7.2 TIME DEPOSITS MAKE UP 7.2% OF TOTAL DEPOSITS 20.1 17.5 MONEY MARKET DEPOSITS ACCOUNT FOR 20.1% OF TOTAL DEPOSITS SAVINGS ACCOUNTS MADE UP 17.5% OF DEPOSITS AT YEAR-END 35,000 35,000 NEW RETAIL CHECKING ACCOUNTS OPENED IN 2021 5,000 5,000 NEW BUSINESS CHECKING ACCOUNTS OPENED IN 2021 10 , , 30.2 . 510,000 Approximately 93% of deposits come 4 1 215 3 2 4 54 3 9 6,000 2 5 0 0 433 0 9 3 6 3 38 7 3 7, 32,000 1 29 7 10 0 0 0 0 9 5 12,300,000,000 6 0 7 2 savings accounts. 3 3 8 2 9 3 4 25.6 103 2 8 3 5 ,7 0 0 from core checking, money market and , . 11 DIVERSIFIED and HIGH QUALITY LENDING PORTFOLIO Our loan portfolio is well balanced with approximately 42% in business and commercial loans, 35% residential mortgage loans, and 23% in consumer installment loans. Consumer loans include more than $1 billion of indirect lending, reflecting our more than 35 years of experience originating loans through dealerships within our service footprint. 3,075,904,000 $3.1 BILLION IN BUSINESS LENDING PORTFOLIO AT YEAR-END 398,061,000 $0.4 BILLION OF HOME EQUITY LOANS AT YEAR-END 2021 134,000 $134,000 AVERAGE RESIDENTIAL MORTGAGE BALANCE AT 12/31/21 567,000 $567,000 AVERAGE COMMERCIAL LOAN RELATIONSHIP1 AT 12/31/21 Asset Quality Metrics 2,556,114,000 $2.6 BILLION IN CONSUMER MORTGAGE LOANS AT 12/31/21 1,189,749,000 $1.2 BILLION IN CONSUMER INDIRECT PORTFOLIO AT YEAR-END 153,811,000 $0.2 BILLION IN CONSUMER DIRECT LOANS AT 12/31/21 4.22 4.22% LOAN YIELD AT DECEMBER 31, 2021 65,000 $65,000 AVERAGE HOME EQUITY BALANCE AT 12/31/21 23,000 $23,000 AVERAGE INDIRECT LOAN BALANCE AT 12/31/21 900 MORE THAN 900 DEALERSHIPS SERVICED THROUGH INDIRECT DEALER RETAIL CENTER 1 Excluding Paycheck Protection Program (“PPP”) loans Our asset quality metrics are consistently very strong, reflecting disciplined underwriting standards, combined with a deep understanding of our markets and customer base. 0.04 NET CHARGE-OFFS MADE UP JUST 4 BASIS POINTS OF AVERAGE LOANS IN 2021 0.62 NONPERFORMING LOANS MADE UP 62 BASIS POINTS OF TOTAL LOANS AT 12/31/21 1.00 1.00% RATIO OF DELINQUENT LOANS TO LOANS AT YEAR-END 110 ALLOWANCE FOR CREDIT LOSSES TO NONPERFORMING LOANS RATIO OF 110% AT 12/31/21 0.68 ALLOWANCE FOR CREDIT LOSSES TO LOANS OUTSTANDING AT YEAR-END WAS 0.68% 0.04% 0.24% 0.12% 12 20191817161514131221Net Charge-offs/Average Loans , , 30.2 growth and the . Total loans grew to combination of organic $7.37 billion at year-end through a Bank’s participation 510,000 in the PPP. 4 1 215 3 2 4 54 3 9 6,000 2 5 0 0 433 0 9 3 6 3 38 7 3 7, 32,000 1 29 7 10 0 0 0 0 9 5 12,300,000,000 6 0 7 2 3 3 8 2 9 3 4 25.6 103 2 8 3 5 ,7 0 0 , . 13  A SUBSTANTIAL FINANCIAL SERVICES BUSINESS Our financial services businesses provide a significant complement to the Company’s value creation strategy, with annual revenue of more than $181.6 million. This equates to a 10-year compound annual growth rate through December 31, 2021 of 15.7%. Among our diversified financial services businesses is our nationwide benefits plans business, which is one of the country’s 35 largest retirement plan record keepers and provides services to many large and recognizable companies. BPAS, Inc. US and Puerto Rico BPAS, Inc. is a national provider of retirement plans, benefit plans, fund administration, and collective investment trusts. BPAS operates eight subsidiaries through 13 offices located in the United States and Puerto Rico. These subsidiaries include Benefit Plans Administrative Services, LLC, BPAS Actuarial & Pension Services, LLC, Hand Benefits & Trust, Hand Securities, Inc., Northeast Retirement Services, LLC, Global Trust Company, BPAS Trust Company of Puerto Rico, and Fringe Benefits Design of Minnesota. 4,200 4,200 RETIREMENT PLANS 110,000,000,000 $110 BILLION IN TRUST ASSETS 400 ~400 EMPLOYEES WITHIN OUR BPAS SUBSIDIARY 5 5 EMPLOYEE BENEFIT SERVICES ACQUISITIONS SINCE 2015 Wealth Management & Insurance NY, PA, VT, SC, MA and FL Our wealth management subsidiaries including Community Investment Services, Inc., Nottingham Advisors, Inc., Community Bank Trust Services, The Carta Group, Inc., and OneGroup Wealth Partners, Inc. Through these we provide comprehensive asset management, strategic wealth planning and management, and trust administration. Our insurance subsidiary, OneGroup NY, Inc., provides risk management services. 20.2 REVENUE GREW AT A 10-YEAR CAGR OF 20.2% THROUGH 2021 6 6 WEALTH MANAGEMENT SERVICES ACQUISITIONS SINCE 2017 67,232,000 $67.2 MILLION IN 2021 TOTAL REVENUES 8 8 INSURANCE SERVICES ACQUISITIONS SINCE 2015 9,000,000,000 ~$9 BILLION ASSETS UNDER MANAGEMENT OR ADMINISTRATION 11.6 11.6% INCREASE IN REVENUE FROM WEALTH MANAGEMENT AND INSURANCE FROM 2020 6 6TH LARGEST BANK-OWNED PROPERTY/CASUALTY AGENCY IN INSURANCE JOURNAL’S 2021 RANKING 14 , , 30.2 country’s largest . BPAS is one of the 510,000 4 1 215 3 2 4 54 3 9 6,000 2 5 0 0 433 0 9 3 6 3 38 7 3 7, 32,000 1 29 7 10 0 0 0 0 9 5 12,300,000,000 6 0 7 2 3 3 8 2 9 3 4 25.6 103 2 8 3 5 ,7 0 0 more than 510,000 participants. providers, serving benefits plans , . 15 INVESTING in †e FUTURE f∫ OUR CUSTOMERS and COMMUNITIES Conducting business as a responsible and proactive community citizen is natural for us. It’s been an essential part of who we are since Community Bank’s founding more than 150 years ago. Investing in the future for our customers and communities goes beyond dollars. Our team volunteers thousands of hours to the communities we serve and we are intentional about the organizations we support. We’re also dedicated to being a diverse employer and partner. In 2020 we launched a Diversity Council to advance various strategic corporate culture and diversity initiatives. 2,000 OVER 2,000 CAUSES AND ORGANIZATIONS SUPPORTED 8,000 MORE THAN 8,000 EMPLOYEE VOLUNTEER HOURS 2,300,000 OVER $2.3 MILLION CONTRIBUTED THROUGH DONATIONS, GRANTS AND SPONSORSHIPS 600 600 CULTURAL, CIVIC, ECONOMIC DEVELOPMENT AND SOCIAL 100 100% RECYCLING RATE OF COMPANY’S ELECTRONICS SERVICE ORGANIZATIONS SUPPORTED THROUGH MONETARY CONTRIBUTIONS A strong and significant COVID-19 response in support of our customers 719,500,000 $719.5 MILLION IN TOTAL LOAN ORIGINATIONS PROVIDED THROUGH THE PAYCHECK PROTECTION PROGRAM SINCE 2020 700,000,000 AT THE HEIGHT OF THE COVID-19 PANDEMIC, TOTAL LOANS ON DEFERRAL EXCEEDED $700 MILLION Leveraging Our Strong Technology Platform Investing for the future also means strengthening our digital capabilities. In recent years, we have made significant upgrades to our customer-facing technology, creating robust and easy to use platforms that have earned positive feedback from our customers. These enhancements have included a new mobile banking app launched in 2020, a small business loan application online portal, a treasury management tool for business and municipal customers, and a loan application portal for second-draw PPP loans. Our focus on technology also supports our efforts to implement environmentally sound practices. For example, our online mortgage banking platform helps to reduce paper usage during the lending process. 55 55% OF TOTAL CUSTOMERS ARE ENROLLED IN DIGITAL BANKING 54 54% OF CORE DEPOSIT CUSTOMERS ARE E-STATEMENT USERS 225,000 MORE THAN 225,000 ACTIVE MOBILE BANKING USERS 23 23% OF CONSUMER CORE DEPOSIT CUSTOMERS USE ONLINE BILL PAY 20 20% OF RESIDENTIAL MORTGAGE APPLICATIONS 7,100,000 MORE THAN 7.1 MILLION MONTHLY DEBIT CARD TRANSACTIONS SUBMITTED ONLINE ON AVERAGE IN 2021 16 , , 30.2 . CBU provided over 510,000 4 1 215 3 2 4 54 3 9 6,000 2 5 0 0 433 0 9 3 6 3 38 7 3 7, 32,000 1 29 7 10 0 0 0 0 9 5 12,300,000,000 6 0 7 2 3 3 8 2 9 3 4 25.6 103 2 8 3 5 ,7 0 0 5,700 Paycheck Protection Program loans during the program’s duration. , . 17 COMPELLING INVESTMENT PROFILE | Consistent business model for over 20 years | Market-leading branch system serving predominantly non-urban markets | Excellent low-cost core deposit base | Focused on profitable customer relationships | Disciplined growth through organic and acquired opportunities | Focused on low-risk accretive mergers and acquisitions | Goal of 10% average annual shareholder returns over time | Cash dividend payment raised every year for the past 29 years, providing a meaningful dividend and yield | Focus on revenue diversification, which has driven noninterest income to 39.7% of revenue | Successful and effective operating strategy | Strong fundamentals with excellent asset quality on a consistent basis | NYSE-listed company with both significant institutional ownership and significant liquidity Ownership Summary AT 12/31/21 OR MORE RECENT AVAILABLE 53,878,000 53.9 MILLION SHARES OUTSTANDING 71 ABOUT 71% OF SHARES HELD BY INSTITUTIONS 53,200,000 APPROXIMATE FLOAT OF 53.2 MILLION, OR 98.7% 38,100,000 38.1 MILLION SHARES HELD BY INSTITUTIONS 285 285 INSTITUTIONAL HOLDERS 350 ~350 PORTFOLIO POSITIONS 15,700,000 APPROXIMATELY 15.7 MILLION RETAIL SHARES 29 29% SHARES OUTSTANDING ARE RETAIL SHARES 4,012,833,000 $4.01 BILLION MARKET CAP 21.4 21.4 PRICE/EARNINGS (TTM) 195,000 195,000 AVERAGE 3-MONTH DAILY VOLUME 1.72 ANNUALIZED DIVIDEND OF $1.72 BASED ON MRQ 49.4 49.4% DIVIDEND PAYOUT RATIO 82.53 52 WEEK HIGH STOCK PRICE OF $82.53 Investment Profile AT 12/31/21 74.48 CLOSING PRICE OF $74.48 3.1 3.1 PRICE/TANGIBLE BOOK VALUE 2.31 2.31% DIVIDEND YIELD 61.24 52 WEEK LOW STOCK PRICE OF $61.24 18 , , 30.2 total return to . Our 15-year cumulative 510,000 4 1 215 3 2 4 54 3 9 6,000 2 5 0 0 433 0 9 3 6 3 38 7 shareholders of 433% 3 (11.8% annualized), 7, 32,000 1 29 7 10 0 0 0 0 9 5 12,300,000,000 6 0 7 2 3 3 8 2 9 3 4 25.6 103 2 8 3 5 ,7 0 0 the KBW Regional Banking compares favorably to Index return of 87% (4.1% annualized). , . 19 EXECUTIVE MANAGEMENT Mark E. Tryniski PRESIDENT and CHIEF EXECUTIVE OFFICER Joined CBU in 2003 and has previously served as CFO and COO. Prior to joining the company, he was a partner with PricewaterhouseCoopers, LLP. Joseph E. Sutaris EVP, CHIEF FINANCIAL OFFICER Joined CBU in 2011 following its acquisition of The Wilber Corporation, where he held several roles, including CFO. George J. Getman EVP, GENERAL COUNSEL Prior to joining CBU in 2008, he provided corporate counsel to CBU as a senior partner at Bond, Schoeneck & King, PLLC. Maureen Gillan-Myer EVP, CHIEF HUMAN RESOURCES OFFICER Prior to joining Community Bank System in October 2021, Ms. Gillan-Myer served as Senior Executive Vice President and Chief Human Resources Officer of HSBC, USA. Dimitar A. Karaivanov EVP, FINANCIAL SERVICES and CORPORATE DEVELOPMENT Joined Community Bank System in June 2021. Prior to then, Mr. Karaivanov served as Managing Director in Lazard’s Financial Institutions Group. Jeffrey M. Levy SVP, PRESIDENT of COMMERCIAL BANKING Joined CBU in 2018 as a regional executive and was promoted in January 2022 to his current role. Mr. Levy previously worked at NBT Bank and M&T Bank. Joseph F. Serbun SVP, PRESIDENT of RETAIL BANKING Joined CBU in 2008. Prior to that, he had worked at Partners Trust Bank and JPMorgan Chase Bank. 20 From left to right: Joseph Sutaris, Jeffrey Levy, Dimitar Karaivanov, Joseph Serbun, Mark Tryniski (front), George “Joe” Getman and Maureen Gillan-Myer. C O M M U N I T Y B A N K , N . A . PENNSYLVANIA REGIONAL ADVISORY BOARD John Basalyga William Ruark Colleen Doyle, Esq. Lissa Bryan-Smith John Graham James Shoemaker, Esq. Gerard O’Donnell BOARD of DIRECTORS Eric E. Stickels CHAIRPERSON OF THE BOARD RETIRED PRESIDENT, COO and SECRETARY ONEIDA FINANCIAL CORP. DIRECTOR SINCE 2015 Brian R. Ace RETIRED OWNER LACEYVILLE HARDWARE COMMITTEES Governance; Compensation DIRECTOR SINCE 2003 Mark J. Bolus PRESIDENT and CEO BOLUS MOTOR LINES, INC. COMMITTEES Compensation, Chair; Strategic/Executive; Trust and Financial Services DIRECTOR SINCE 2010 Jeffrey L. Davis PRESIDENT J.L. DAVIS, INC. COMMITTEES Governance, Chair; Audit/Compliance DIRECTOR SINCE 2017 Jeffery Knauss CEO and CO-FOUNDER DIGITAL HYVE COMMITTEES Governance DIRECTOR SINCE 2021 John Parente CEO CP MEDIA, LLC COMMITTEES Trust and Financial Services, Chair; Strategic/Executive DIRECTOR SINCE 2010 Susan E. Skerritt RETIRED CHAIRWOMAN, CEO and PRESIDENT DEUTSCHE BANK TRUST COMPANY AMERICAS COMMITTEES Audit/Compliance; Compensation DIRECTOR SINCE 2020 Mark E. Tryniski PRESIDENT and CEO COMMUNITY BANK SYSTEM, INC. DIRECTOR SINCE 2006 Neil E. Fesette OWNER, PRESIDENT and CEO FESETTE REALTY, LLC and FESETTE PROPERTY MANAGEMENT COMMITTEES Strategic/Executive, Chair; Compensation; Governance DIRECTOR SINCE 2010 Kerrie D. MacPherson RETIRED SENIOR PARTNER ERNST & YOUNG, LLP COMMITTEES Audit/Compliance; Trust and Financial Services DIRECTOR SINCE 2019 Raymond C. Pecor, III PRESIDENT LAKE CHAMPLAIN TRANSPORTATION COMPANY COMMITTEES Risk, Chair; Compensation DIRECTOR SINCE 2017 Sally A. Steele LEAD DIRECTOR ATTORNEY AT LAW COMMITTEES Governance; Strategic/Executive; Trust and Financial Services DIRECTOR SINCE 2003 John F. Whipple, Jr. CEO BUFFAMANTE WHIPPLE BUTTAFARO, P.C. COMMITTEES Audit/Compliance, Chair; Governance DIRECTOR SINCE 2010 NOTE All bank board members participate in the Risk Committee 21 ADMINISTRATION EXECUTIVE Mark E. Tryniski, President and Chief Executive Officer Joseph E. Sutaris, EVP, Chief Financial Officer George J. (Joe) Getman, EVP, General Counsel Maureen Gillan-Myer, EVP, Chief Human Resources Officer Dimitar A. Karaivanov, EVP, Financial Services and Corporate Development Jeffrey M. Levy, SVP, President of Commercial Banking Joseph F. Serbun, SVP, President of Retail Banking RETAIL BANKING Hal Wentworth, SVP, Retail Banking and Marketing Kent Backus, Regional Retail Banking Manager Paul Lepore, Regional Retail Banking Manager Lisa Allenson, Regional Retail Banking Manager Jody Tonkery, Regional Retail Banking Manager Denise Allen, Regional Retail Banking Manager Susanne Mullin, Regional Retail Banking Manager Victoria Strader, Regional Retail Banking Manager Anita Bourgeois, SVP, Retail and Municipal Banking Manager George Cooper, VP Capital District Barbara Maculloch, Regional President Pennsylvania Lynne Wadsworth, Branch Services Administrator Dara Penny, Director of Marketing COMMERCIAL/CONSUMER LENDING AND CREDIT ADMINISTRATION Scott Boser, SVP, Director of Consumer and Mortgage Lending Luke Fagan, SVP, Chief Commercial Credit Officer Mark Houghtaling, Director of Credit Administration & Commercial Credit Officer John Keshavan, Director of Special Assets James Murphy, Commercial Credit Officer FINANCE & TREASURY MANAGEMENT Joseph J. Lemchak, SVP, Chief Investment Officer Deresa Durkee, Corporate Controller Robert Frost, VP of Finance, Director of Capital Planning and Analysis Sean Howard, Senior Treasury Officer Carlena Wallace, Director of Internal Controls ADMINISTRATIVE SERVICES Michael Abdo, SVP, Senior Associate General Counsel Danielle Cima, Associate General Counsel, Corporate Secretary Dorothy Quarltere, Chief Compliance Officer Brett Fisk, Director of Facilities Randy Pray, Corporate Purchasing Manager INFORMATION TECHNOLOGY & OPERATIONS Aaron Friot, SVP, Chief Technology Officer Susan Fox, SVP, Chief Information Officer Christina Sullivan, Director of Business Information Systems Shelley Quinn, Director of Customer Care and Cash Management Barbara Snyder, Director of Loan Operations Paula Demo, Director of Process Improvement Christina Morin, Deposit Operations Manager Belord Kunjeer, Director of Digital Banking Technology Nadim Hussain, Director of Data Analytics Thomas Gurgol, Director of Application Development RISK MANAGEMENT Paul Ward, SVP, Chief Risk Officer Dennelle Michalski, Director of Risk Management Timothy Miller, Director of Information Security Gail Whipple, Director of Internal Audit John Miller, Bank Secrecy Officer COMMUNITY BANK COMMERCIAL BANKING W E S T E R N R E G I O N John Eagleton, SVP, Commercial Banking Group Manager Christopher Humphrey, Commercial Banking Team Leader N O R T H E R N R E G I O N Allen Racine, Commercial Banking Team Leader Ronald Bacon, Commercial Banking Team Leader 22 S Y R AC U S E / O N E I DA R E G I O N Russell Brewer, SVP, Commercial Banking Group Manager Thomas Breed, Commercial Banking Team Leader S O U T H E R N R E G I O N D. James Vedora, SVP, Commercial Banking Group Manager Ed Michalek, Commercial Banking Team Leader C E N T R A L R E G I O N Jeffrey Lord, SVP, Commercial Banking Sales Manager C A P I TA L R E G I O N Ken Countermine, SVP, Commercial Banking Group Manager P E N N S Y LVA N I A R E G I O N Matthew Dougherty, SVP, Commercial Banking Group Manager Richard Kazmerick, Commercial Banking Team Leader N E W E N G L A N D R E G I O N Matthew Durkee, Regional President New England Bruce Bernier, SVP, Commercial Banking Group Manager Patrick Calecas, Commercial Banking Team Leader WEALTH MANAGEMENT GROUP Paul Restante, Managing Director COMMUNITY INVESTMENT SERVICES, INC. Theresa Kalil-Lennon, SVP, Sales and Marketing Director Scott Duggleby, SVP, Regional Sales Manager Chasity Jaynes, SVP, Director of Operations TRUST SERVICES Catherine Koebelin, SVP, Chief Trust Officer, Olean Charles Perrillo, SVP, Chief Trust Investment Officer, South Burlington Karissa McDonough, SVP, Fixed Income Strategist NOTTINGHAM ADVISORS, LLC 100 Corporate Parkway, Suite 338, Amherst, NY Thomas Quealy, Chief Executive Officer Lawrence Whistler, President, Chief Investment Officer ONE GROUP 706 North Clinton Street, Syracuse, NY Pierre Morrisseau, Chief Executive Officer Chris Mason, President Kevin Bryans, Chief Financial Officer BENEFIT PLAN SERVICES B PA S 6 Rhoads Drive, Utica, NY Paul M. Neveu, Chief Executive Officer Linda S. Pritchard, SVP, Recordkeeping Services 3401 Masons Mill Road, Suite 601, Huntingdon Valley, PA Mary Anne Geary, President B PA S AC T U A R I A L A N D P E N S I O N S E R V I C E S 706 North Clinton Street, Syracuse, NY Vincent F. Spina, President Steven P. Chase, SVP Sarah E. Dam, SVP 60 East 42nd Street, Suite 1062, New York, NY Sheryl Gabriel, SVP H A N D B E N E F I T S & T R U S T 820 Gessner, Suite 1250, Houston, TX Stephen Hand, President Kathy A. Harvey, SVP Gregg K. Zimmerman, SVP B PA S T R U S T C O M PA N Y P U E R T O R I C O VIG Tower, 1225 Ponce De Leon Ave, Suite 804, San Juan, PR Alfredo Matheu, BPAS President, Puerto Rico N O R T H E A S T R E T I R E M E N T S E R V I C E S , I N C . ( N R S ) 12 Gill Street, Suite 2600, Woburn, MA Chris Hulse, Chief Executive Officer Freddie Jacobs, Chief Operating Officer Frank Lallos, Chief Business Officer Christopher Ellis, Chief Financial Officer Arvind Kesireddy, IT Strategy Officer BRANCH LOCATIONS NORTHERN NEW YORK SOUTHERN NEW YORK Adams Alexandria Bay Ausable Forks Black River Camden Canton (80 Main St) Canton (45-49 Court St) Drive-up Only Champlain Chateaugay Clayton Fulton Gouverneur Hannibal Harrisville Indian Lake Lake Placid Long Lake Lowville (State St) Lowville (Turin Rd) Drive-up Only Lyons Falls Madrid Malone (West Main St) Malone (Elm St) Drive-up Only Massena North Creek Norwood Ogdensburg (Ford St) Ogdensburg (State St) Old Forge Oswego Plattsburgh (Margaret St) Plattsburgh (Route 3) Potsdam (Market St) Potsdam (May Rd) Drive-up Only Pulaski Rome Griffiss Rome Turin Road Saranac Lake (Broadway) Saranac Lake (Lake Flower) Drive-up Only St. Regis Falls Star Lake Ticonderoga Tupper Lake Waddington Watertown (Arsenal St) Watertown (Washington St) West Carthage Westmoreland Whitehall Addison Alfred Allegany Andover Angelica Arkport Avon Bath Belmont Belfast Bolivar Boonville (Main St.) Boonville (Headwaters Plaza) Drive-up Only Canandaigua Cassadaga Drive-up Only Cato Cicero Clarence Clifton Springs (Main St) Clifton Springs (Clifton Plaza) Drive-up Only Clymer Corning (West Market St) Corning (West Pulteney St) Cuba Dansville Dewitt Dunkirk (Central Ave) Dunkirk (Vineyard Dr) Elmira Erwin/Painted Post Drive-up Only Falconer Fillmore Franklinville Geneseo Geneva Gowanda Hammondsport Henrietta Hornell (Steuben Square) Horseheads (Consumer Square) Ithaca Jamestown (Brooklyn Square) Lakewood Livonia Moravia Mount Morris Naples Newark (Church St) Newark Plaza Nichols North Collins Olean (North Union St) Olean (Delaware Park) Drive-up Only Orchard Park Ovid Owego Palmyra Penn Yan (Lake St) Drive-up Only Penn Yan (Main St) Phelps Portville Randolph Ripley Rushville Salamanca Seneca Falls Sherman Silver Creek Skaneateles Springville (South Cascade Dr) Springville (North Buffalo St) Warsaw Waterloo Watkins Glen Wellsville (North Highland Ave) Wellsville (North Main St) Westfield Woodhull Yorkshire CENTRAL NEW YORK Boiceville Canastota Cazenovia Chittenango Cobleskill Cooperstown (Otsego) Delhi Downsville Hamilton Hannibal Johnson City Milford Morris Norwich (State Highway) Oneida (182 Main St) Oneida (585 Main St) Oneonta (Main St) Oneonta (Chestnut St) Oneonta (Southside) Schenevus Sidney Vernon Walton CAPITAL REGION OF NEW YORK Albany Amsterdam Canajoharie Chatham Delmar East Greenbush Greenport Johnstown Kinderhook Latham Valatie NEW ENGLAND Vermont and Massachusetts Barre Bennington Bradford Brattleboro Bristol Burlington (College St) Burlington (North Ave) Enosburg Essex Junction Fair Haven Hardwick Hinesburg Jericho Johnson Manchester Northfield Rutland (Green Mountain Plaza) Rutland (Woodstock Ave) South Burlington (Shelburne Rd) South Burlington (Williston Rd) South Hero Springfield, VT Springfield, MA St. Albans St. Johnsbury Vergennes Waterbury White River Junction Williston (Cottonwood Dr) Wilmington Winooski PENNSYLVANIA Carbondale Drive-up Only Clarks Summit Daleville Edwardsville Drive-up Only Freeland Hazleton (Airport Rd) Hazleton (South Church St) Jermyn Kingston Laceyville Lansford Lehighton Meshoppen Montrose Olyphant Pittston Scranton (Keyser Ave) Scranton (Minooka) Scranton (North Washington Ave) Scranton (Wyoming Ave) Towanda Tunkhannock Trucksville/Back Mountain Wilkes Barre (North Franklin St) Wilkes Barre (South Main St) Wyalusing 23 CONTINUOUS GROWTH PROFILE Our focus is always on building additional shareholder value into our diversified financial services enterprise. This is accomplished through organic growth in core banking relationships, disciplined lending, selective and strategic acquisitions of bank and financial services businesses, and a consistent approach to business regardless of economic conditions. 10-Year CAGRs AT 12/31/21 7.6 7.6% TOTAL REVENUE GROWTH 15.7 15.7% FINANCIAL SERVICES REVENUE GROWTH 6.0 6.0% NET INTEREST INCOME GROWTH 10.0 10.0% NET INCOME GROWTH 9.3 9.3% AVERAGE INTEREST-EARNING ASSET GROWTH 7.8 7.8% TOTAL LOAN GROWTH 15.9 15.9% NONINTEREST DEPOSIT GROWTH 10.4 10.4% TOTAL DEPOSIT GROWTH 5.4 5.4% DIVIDEND GROWTH 10.7 10.7% NONINTEREST INCOME GROWTH 5.1 5.1% OPERATING EARNINGS PER SHARE GROWTH 9.6 9.6% COMMERCIAL LOAN GROWTH 10.5 10.5% SHAREHOLDERS EQUITY GROWTH Intensely Focused on Investors We’re an experienced acquirer that prides itself on providing best-in-class service to customers, rewarding career opportunities to employees, and long-term value creation for shareholders who join Community Bank System through acquisition. 386 386% VALUE CREATED FOR ACQUIRED WILBER CORP. 192 192% VALUE CREATED FOR ACQUIRED ONEIDA FINANCIAL 105 105% VALUE CREATED FOR ACQUIRED MERCHANTS SHAREHOLDERS SINCE 2010 CORP. SHAREHOLDERS BANCSHARES SHAREHOLDERS SINCE 2015 SINCE 2016 68 68% VALUE CREATED FOR ACQUIRED STEUBEN TRUST CORP. SHAREHOLDERS SINCE 2019 24 Total Shareholder Returns (ANNUALIZED) 1 YEAR 5 YEARS 10 YEARS 15 YEARS CBU 22.3% 6.4% 13.6% 11.8% S&P 600 Commercial Banks Index 35.7% 4.9% 13.4% 3.7% KBW Regional Bank Index 36.7% 5.4% 12.5% 4.1% Through December 31, 2021 or most recent available, including reinvestment of dividends Source: Bloomberg CORPORATE and SHAREHOLDER INFORMATION CORPORATE HEADQUARTERS Community Bank System, Inc. 5790 Widewaters Parkway DeWitt, NY 13214-1883 PHONE 315.445.2282 or 800.724.2262 FAX 315.445.7347 cbna.com Annual Meeting Wednesday, May 18, 2022 12:00pm EST Wolferts Roost Country Club 120 Van Rensselaer Boulevard Albany, NY 12204 STOCK LISTING CBU The common stock symbol of Community Bank System, Inc. listing on the New York Stock Exchange (NYSE) CmntyBkSys Newspaper listing for common stock TRANSFER AGENT AND REGISTRANT OF STOCK Shareholders requiring a change of name, address or ownership of stock, or information about shareholder records, lost or stolen certificates, and dividend checks, direct deposit and reinvestment should contact: AST Operations Center 6201 15th Avenue Brooklyn, NY 11219 astfinancial.com General questions: 877.253.6847 INVESTOR INFORMATION Investor and shareholder information regarding Community Bank System, Inc., including all filings with the Securities and Exchange Commission, is available through the company’s website: cbna.com Copies may also be obtained without charge upon written request to: Ms. Marguerite Geiss Investor Relations Department Community Bank System, Inc. 5790 Widewaters Parkway DeWitt, NY 13214-1883 315.445.7313 marguerite.geiss@cbna.com INDEPENDENT AUDITORS The Board of Directors appointed PricewaterhouseCoopers, LLP as auditor for the company for the year ended December 31, 2021. ANALYST COVERAGE The following analysts published research about Community Bank System in 2021: American Capital Partners Anthony Polini / 908.625.1931 apolini@acpweb.com Boenning & Scattergood Erik E. Zwick / 610.862.5322 ezwick@boenninginc.com D.A. Davidson & Co. Russell E. T. Gunther / 212.223.5403 rgunther@dadco.com Hovde Group LLC Bryce Rowe / 804.318.0969 browe@hovdegroup.com Keefe, Bruyette & Woods, Inc. Christopher O’Connell / 212.887.4725 oconnellch@kbw.com Piper Sandler Alexander Twerdahl / 212.466.7916 alex.twerdahl@psc.com Raymond James Financial Inc. William J. Wallace IV / 703.749.1485 william.wallace@raymondjames.com Stephens, Inc. Matthew M. Breese / 401.658.1114 matt.breese@stephens.com INVESTOR’S CHOICE PROGRAM CBU offers convenient, low-cost options for investors wishing to steadily buy shares. For information, contact: AST Operations Center 6201 15th Avenue Brooklyn, NY 11219 astfinancial.com General questions: 877.253.6847 SAFE HARBOR STAT EMENT SAFE HARBOR STAT EMENT The Community Bank System, Inc. Annual Report contains forward-looking statements, within the provisions of the Private Security Litigation The Community Bank System, Inc. Annual Report contains forward-looking statements, within the provisions of the Private Security Litigation Reform Act of 1995, that are based on current expectations, estimates, and projections about the industry, markets and economic environment in Reform Act of 1995, that are based on current expectations, estimates, and projections about the industry, markets and economic environment in which the company operates. Such statements involve risks and uncertainties that could cause actual results to differ materially from the results which the company operates. Such statements involve risks and uncertainties that could cause actual results to differ materially from the results discussed in these statements. These risks are detailed in the company’s periodic reports filed with the Securities and Exchange Commission. discussed in these statements. These risks are detailed in the company’s periodic reports filed with the Securities and Exchange Commission. 25 COMMUNITY BANK SYSTEM, INC. 5790 Widewaters Parkway DeWitt, NY 13214-1883 800.724.2262 315.445.7347 fax cbna.com 

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