COMMUNITY FINANCIAL SYSTEM, INC. 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations ​ This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) primarily reviews the financial condition and results of operations of Community Financial System, Inc. (the “Company” or “CFSI”) as of and for the three months ended March 31, 2026 and 2025, although in some circumstances the fourth quarter of 2025 is also discussed in order to more fully explain recent trends. The following discussion and analysis should be read in conjunction with the Company's Consolidated Financial Statements and related notes that appear on pages 3 through 35. All references in the discussion of the financial condition and results of operations refer to the consolidated position and results of the Company and its subsidiaries taken as a whole. Unless otherwise noted, the term “this year” and equivalent terms refers to results in calendar year 2026, “last year” and equivalent terms refer to calendar year 2025, “first quarter” refers to the three months ended March 31, 2026, and earnings per share (“EPS”) figures refer to diluted EPS. ​ This MD&A contains certain forward-looking statements with respect to the financial condition, results of operations, and business of the Company. These forward-looking statements involve certain risks and uncertainties. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements are set herein under the caption “Forward-Looking Statements” on page 58. ​ Critical Accounting Policies and Estimates ​ As a result of the complex and dynamic nature of the Company’s business, management must exercise judgment in selecting and applying the most appropriate accounting policies for its various areas of operations. The policy decision process not only ensures compliance with current accounting principles generally accepted in the United States of America (“GAAP”) but also reflects management’s discretion with regard to choosing the most suitable methodology for reporting the Company’s financial performance. It is management’s opinion that the accounting estimates covering certain aspects of the business have more significance than others due to the relative importance of those areas to overall performance, or the level of subjectivity in the selection process. These estimates affect the reported amounts of assets and liabilities as well as disclosures of revenues and expenses during the reporting period. Actual results could meaningfully differ from these estimates. Management considers its critical accounting estimates those that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on the Company’s financial condition or results of operations. Management believes that the critical accounting estimates include the allowance for credit losses; actuarial assumptions associated with the pension, post-retirement and other employee benefit plans; and the carrying value of goodwill and other intangible assets. A summary of the critical accounting policies and estimates used by management is disclosed in the MD&A on pages 38-40 of the most recent Form 10-K (fiscal year ended December 31, 2025) filed with the Securities and Exchange Commission (“SEC”) on February 27, 2026. There have been no material changes other than those described below regarding the Allowance for Credit Losses. A summary of new accounting policies used by management is disclosed in Note C, “Accounting Policies” on page 11 of this Form 10-Q. 36 Table of Contents Allowance for Credit Losses ​ The allowance for credit losses (“ACL”) represents management’s judgment of an estimated amount of lifetime losses on outstanding loans at the balance sheet date. This is estimated using relevant available information from internal and external sources relating to past events, current conditions and reasonable and supportable forecasts. The determination of the appropriateness of the ACL is complex and applies significant and highly subjective estimates. The ACL is measured on a collective (pooled) basis for loan segments that share similar risk characteristics, including collateral type, credit ratings/scores, size, duration, interest rate structure, origination vintage and payment structure. The Company utilizes three methods for calculating the ACL: cumulative loss, vintage loss and line loss. Historical credit loss experience provides the basis for the estimation of expected future credit losses in all three methodologies. Qualitative adjustments are made for differences in portfolio risk characteristics such as differences in underwriting standards, portfolio mix, acquisition status, current levels of delinquencies, net charge-offs and risk ratings, as well as actual and forecasted macroeconomic variables. Macroeconomic data includes unemployment rates, changes in collateral values such as home prices, commercial real estate prices including office property-specific price forecasts, office property-specific vacancy rates, automobile prices, gross domestic product, and median household income net of inflation. Management utilizes judgment in determining and applying the qualitative factors and weighting the economic scenarios used, which include baseline, upside and downside forecasts. During the first quarter of 2026, the Company updated the ACL model to add 2025 data into the historical data used for calculating the quantitative and qualitative factors as part of the annual model update procedures. With the update, the quantitative reserve in the first quarter of 2026 now includes loss history for business loans that previously was not captured in the historical quantitative loss data and was instead addressed through the use of qualitative overlays. As a result, the Company decreased the additional qualitative reserve for business loans related to size and volume of the loans in that portfolio during the first quarter of 2026. The decrease in the business lending qualitative factor decreased the ACL by $4.8 million as compared to the prior factor in use at December 31, 2025. The update to the historical quantitative loss data increased the ACL by $3.2 million as compared to the quantitative loss rates in use at December 31, 2025. ​ One of the most significant estimates and judgments influencing the results of the ACL calculation is the macroeconomic forecasts. Changes in these economic forecasts could significantly affect the estimated expected credit losses and lead to materially different amounts from one period to the next. To illustrate the sensitivity of the ACL calculation to these economic forecasts, management performed a hypothetical sensitivity analysis using a weighting of 100% to the downside forecast, rather than the existing weighting of baseline, upside and downside of 40%, 20% and 40%, respectively. The scenario-weighted average unemployment rate and GDP growth forecasts used in the ACL model at March 31, 2026 were 5.4% and 1.6%, respectively, compared to 5.5% and 1.3%, respectively, at December 31, 2025. The hypothetical downside forecast includes assumptions of a weakening economy represented by a cumulative decline in real GDP of 2.6%, enhanced geopolitical tensions, rising energy prices, a peak unemployment rate of 8.5% and an average unemployment rate of 7.1%. The Company calculated that this hypothetical scenario would increase the ACL and provision for credit losses as of and for the three months ended March 31, 2026 by approximately $4.2 million, and decrease net income by $3.1 million (net of tax). This change is reflective of the sensitivity of the various economic factors used in the ACL model. The resulting difference is not intended to represent an expected increase in allowance levels, as future conditions are uncertain and there are several other quantitative and qualitative factors that will also fluctuate at the same time that economic conditions are changing, which would affect the results of the ACL calculation. The impact that the economic factors have on the model is affected by the upside or downside severity of the scenarios used, the product type mix, and the interaction of the economic factors with other quantitative and qualitative factors in the model, as changes in any particular factor or input may not occur at the same rate or be directionally consistent across all loan segments. Improvements in one factor may offset deterioration in other factors, both qualitative and quantitative. The third-party downside economic forecast used in the hypothetical scenario described does not predict a severe economic downturn, but rather a moderate recessionary environment. The Company’s geographic distribution of loans being primarily outside of major metropolitan areas, combined with low statistical correlation between its historical losses and national economic indicators, is reflected in the current methodology that would produce changes to the allowance that are less significant as compared to economic metric-based modeling that is more directly correlated, and therefore sensitive, to fluctuations in historical and projected national economic activity. 37 Table of Contents Supplemental Reporting of Non-GAAP Results of Operations ​ The Company also provides supplemental reporting of its results on an “operating” or “tangible” basis. Results on an “operating” basis exclude the after-tax effects of acquisition expenses, litigation accrual, unrealized gain (loss) on equity securities and amortization of intangible assets. Results on a “tangible” basis exclude goodwill and intangible asset balances, net of accumulated amortization and applicable deferred tax amounts. Although these items are non-GAAP measures, the Company’s management believes this information helps investors and analysts measure underlying core performance and improves comparability to other organizations that have not engaged in acquisition or restructuring activities. In addition, the Company provides supplemental reporting for “operating pre-tax, pre-provision net revenues,” which excludes the provision for credit losses, acquisition expenses, litigation accrual, unrealized gain (loss) on equity securities and amortization of intangible assets from income before income taxes. Although operating pre-tax, pre-provision net revenue is a non-GAAP measure, the Company’s management believes this information helps investors and analysts measure and compare the Company’s performance through a credit cycle by excluding the volatility in the provision for credit losses associated with Current Expected Credit Loss (“CECL”) allowance methods, helps investors and analysts measure underlying core performance and improves comparability to other organizations that have not engaged in acquisition or restructuring activities. The Company also provides supplemental reporting of its interest income, net interest income and net interest margin on a fully tax-equivalent (“FTE”) basis, which includes an adjustment to interest income and net interest income that represents taxes that would have been paid had nontaxable investment securities and loans been taxable. Although fully tax-equivalent interest income, net interest income and net interest margin are non-GAAP measures, the Company’s management believes this information helps enhance comparability of the performance of earning assets that have different tax profiles. Reconciliations of GAAP amounts with corresponding non-GAAP amounts are presented in Table 14. ​ Executive Summary ​ The Company’s business philosophy is to operate as a diversified financial services enterprise providing a broad array of banking and other financial services, including employee benefit services, insurance services, and wealth management services, to retail, commercial, institutional, and governmental customers. The Company’s banking subsidiary is Community Bank, N.A. (the “Bank” or “CBNA”). The Company’s Benefit Plans Administrative Services, Inc. (“BPAS”) subsidiary is a leading provider of employee benefits administration, trust services, collective investment fund administration, and actuarial consulting services to customers on a national scale. In addition, the Company offers comprehensive financial planning, trust administration and wealth management services through its Nottingham Financial Group operating unit and insurance services through its OneGroup NY, Inc. (“OneGroup”) subsidiary. ​ The Company’s core operating objectives are: (i) maintain diverse revenue streams to achieve positive operating results in all four of the Company’s business units: banking and corporate, employee benefit services, insurance services, and wealth management services, (ii) increase the noninterest component of total revenues through both organic and acquisition strategies, (iii) optimize the branch network and digital banking delivery systems, primarily through disciplined acquisition strategies, de novo expansions and divestitures/consolidations, (iv) build profitable loan and deposit bases using both organic and acquisition strategies, (v) utilize technology to deliver customer-responsive products and services and improve efficiencies, and (vi) manage an investment securities portfolio to complement the Company’s loan and deposit strategies and mitigate interest rate and liquidity risk and optimize net interest income generation. ​ Significant factors reviewed by management to evaluate achievement of the Company’s operating objectives, results and financial condition include, but are not limited to: net income and earnings per share; return on assets and equity; components of net interest margin; noninterest revenues; noninterest expenses; asset quality metrics; loan and deposit growth; capital management; performance of individual banking and financial services units; performance of specific product lines and customers; liquidity and interest rate sensitivity; enhancements to customer products and services and their underlying performance characteristics; technology advancements; market share; peer comparisons; the performance of recently acquired businesses and the performance of recently opened and consolidated branch offices. ​ 38 Table of Contents The Company reported net income of $57.2 million for the first quarter that was $7.6 million, or 15.3%, above the prior year’s first quarter, while earnings per share of $1.08 for the first quarter was $0.15, or 16.1%, above the prior year. The increases in net income and earnings per share were primarily driven by increases in net interest income and noninterest revenues and a decrease in the provision for credit losses, partially offset by increases in noninterest expenses and income taxes. ​ Net interest income increased to $134.7 million in the first quarter, a $14.5 million, or 12.1%, increase from the prior year. The increase was primarily due to increases in the yield on average interest-earning assets and average loan balances, along with lower funding costs. The provision for credit losses of $5.6 million in the first quarter decreased $1.1 million, or 15.8%, from last year’s first quarter reflective of improvements in the Company's asset quality metrics between the periods. Noninterest revenues increased to $78.6 million in the first quarter, a $2.5 million, or 3.3%, increase from the first quarter of 2025, driven by increases in banking, employee benefit services and wealth management services noninterest revenues, partially offset by a decrease in insurance services noninterest revenues that were impacted by the timing of collection of contingent commissions.  ​ Noninterest expenses were $133.0 million in the first quarter, an increase of $7.7 million, or 6.2%, from the prior year’s first quarter. The increase in noninterest expenses was driven primarily by increases in salaries and employee benefits, occupancy and equipment and data processing and communications expenses. These increases were due in part to annual merit-based salary increases, operating expenses associated with acquisitions completed and de novo branches opened between the periods and the Company’s continued investment in customer-facing and back-office technologies. Income taxes increased for the quarter, driven by increases in pre-tax income and amortization of income tax credit investments. ​ Net interest margin for the first quarter of 3.43% and fully tax-equivalent net interest margin, a non-GAAP measure, of 3.45% increased 22 basis points and 21 basis points, respectively, from the prior year’s first quarter. The yield on average interest earning assets increased 9 basis points compared to the prior year, primarily driven by higher loan yields. The Company’s total cost of funds decreased 13 basis points from the prior year as the rate paid on interest-bearing deposits and borrowings both decreased. ​ The Company’s average and ending interest-earning assets both increased year-over-year, reflective of strong organic loan growth. Average and ending deposits also increased primarily driven by organic growth in non-governmental deposit balances and the $543.7 million of deposits assumed in the Santander branch acquisition. Average and ending borrowings decreased from the prior year reflective of growth in deposit balances outpacing loan growth, including the funding provided from the Santander branch acquisition. ​ Asset quality remained solid in the first quarter. The net charge-off ratio decreased slightly from 13 basis points of average loans in the first quarter of 2025 to 11 basis points of average loans in the first quarter of 2026. The nonperforming loan ratio decreased 24 basis points from March 31, 2025 to 0.48% of loans outstanding at March 31, 2026, while the delinquent loan ratio decreased 17 basis points between the past twelve months to 1.12% of loans outstanding. ​ Operating net income, a non-GAAP measure, of $61.1 million, increased $9.1 million, or 17.4%, compared to the prior year’s first quarter, while operating earnings per share, a non-GAAP measure, of $1.15 increased $0.17, or 17.3%, from last year. Operating pre-tax, pre-provision net revenue (“PPNR”), a non-GAAP measure, of $85.3 million, increased $11.2 million, or 15.1%, compared to the first quarter of 2025, while operating PPNR per share, a non-GAAP measure, of $1.61, increased $0.21, or 15.0%, compared to the prior year. These increases demonstrate improvement in the Company’s core operating performance between the periods. ​ Net Income and Profitability ​ As shown in Table 1, net income for the first quarter of $57.2 million increased $7.6 million, or 15.3%, as compared to the first quarter of 2025. Earnings per share of $1.08 for the first quarter of 2026 increased $0.15, or 16.1%, compared to the first quarter of 2026. The increase in net income and earnings per share for the quarter was the result of increases in net interest income and noninterest revenues and a decrease in the provision for credit losses, partially offset by increases in noninterest expenses and income taxes. Operating net income, a non-GAAP measure, of $61.1 million for the first quarter increased $9.1 million, or 17.4%, as compared to the first quarter of 2025. Operating earnings per share, a non-GAAP measure, of $1.15 for the first quarter increased $0.17 compared to the first quarter of 2025. See Table 14 for Reconciliation of GAAP to Non-GAAP Measures. ​ As reflected in Table 1, first quarter net interest income of $134.7 million increased $14.5 million, or 12.1%, from the comparable prior year period. The increase was the result of higher yields on interest-earning assets and a decrease in the rate paid on interest-bearing liabilities. ​ 39 Table of Contents Reflective of improvements in credit quality metrics and partially offset by loan growth, the provision for credit losses of $5.6 million for the first quarter decreased $1.1 million as compared to the first quarter of 2025. ​ First quarter noninterest revenues were $78.6 million, an increase of $2.5 million, or 3.3%, from the first quarter of 2025. Total operating noninterest revenues, a non-GAAP measure, for the first quarter were $79.0 million, an increase of $3.2 million, or 4.2%, from the prior first quarter. The increase over the prior year first quarter was driven by a $2.7 million, or 14.2%, increase in banking noninterest revenues and a $0.9 million, or 1.4%, increase in nonbanking financial services business revenues, while the remaining decrease of $1.1 million was comprised of unrealized losses on equity securities and a loss from equity method investments. The increase in nonbanking financial services business revenues was comprised of increases in employee benefit services revenue of $2.0 million and wealth management services revenue of $0.5 million, partially offset by a decrease in insurance services revenue of $1.6 million. ​ Noninterest expenses of $133.0 million for the first quarter reflected an increase of $7.7 million, or 6.2%, from the first quarter of 2025. The increase in noninterest expenses for the first quarter was primarily driven by higher salaries and employee benefits expenses, occupancy and equipment expenses and data processing and communications expenses. Operating noninterest expenses, a non-GAAP measure, increased $6.5 million, or 5.3%, from the prior-year first quarter. ​ The effective income tax rate was 23.3% for the first quarter, as compared to 22.8% for the comparable prior year period, primarily due to an increase in amortization of income tax credit investments. ​ A condensed income statement is as follows: ​ Table 1: Condensed Income Statements ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ March 31, (000's omitted, except per share data) ​ ​ ​ 2026 ​ ​ ​ 2025 Net interest income ​ $ 134,712 ​ ​ ​ $ 120,212 Provision for credit losses ​ 5,636 ​ 6,690 Noninterest revenues ​ ​ 78,574 ​ ​ 76,036 Noninterest expenses ​ ​ 133,036 ​ ​ 125,290 Income before income taxes ​ 74,614 ​ 64,268 Income taxes ​ 17,396 ​ 14,654 Net income ​ $ 57,218 ​ $ 49,614 ​ ​ ​ ​ ​ ​ ​ Diluted weighted average common shares outstanding ​ 52,967 ​ 53,130 Diluted earnings per share ​ $ 1.08 ​ $ 0.93 ​ Net Interest Income ​ Net interest income is the amount by which interest, dividends and fees on interest-earning assets (loans, investments and cash equivalents) exceeds the cost of funds, which consists primarily of interest paid to the Company's depositors and interest paid on borrowings. Net interest margin is the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities as a percentage of interest-earning assets. ​ ​ 40 Table of Contents Net interest income totaled $134.7 million for the first quarter of 2026 compared to $120.2 million for the first quarter of 2025. As shown in Table 2, fully tax-equivalent net interest income, a non-GAAP measure, for the first quarter was $135.6 million, an increase of $14.5 million from the prior year first quarter. The increase was driven by a 9 basis point increase in the yield on average interest-earning assets, a $774.9 million increase in average interest-earning asset balances and a 16 basis point decrease in the rate paid on average interest-bearing liabilities, partially offset by a $583.4 million increase in average interest-bearing liability balances in comparison to the first quarter of 2025. As reflected in Table 3 for the quarter, the favorable net interest income impacts of the volume increase in average interest-earning asset balances of $8.7 million, the increase in the yield on average interest-earning assets of $3.6 million and the decrease in the rate paid on average interest-bearing liabilities of $4.7 million were partially offset by the volume increase in average interest-bearing liability balances of $2.5 million. Net interest margin of 3.43% and fully tax-equivalent net interest margin, a non-GAAP measure, of 3.45% for the first quarter of 2026 increased 22 and 21 basis points, respectively, compared to the prior year period. ​ The 9-basis point increase in the average yield on interest-earning assets for the quarter was the result of increases in both the yield on average loans and the yield on average investments, including cash equivalents. The yield on average loans for the first quarter increased 10 basis points compared to the first quarter of 2025. The first quarter of 2026 yield on average investments including cash equivalents increased 1 basis point compared to the prior year while the yield on average investments excluding cash equivalents decreased 1 basis point for the same timeframe. The increase in loan yields was reflective of an increase in the proportion of higher rate loan originations over recent periods. ​ The first quarter average book balance of investments, including cash equivalents, increased $148.0 million as compared to the corresponding prior year period as investment purchases outpaced maturities, calls and principal payments and the balance of cash equivalents increased primarily due to net deposit inflows, including the impact of the Santander branch acquisition in the fourth quarter of 2025. The cash equivalents component of average interest-earning assets increased $99.9 million for the first quarter compared to the prior year period. Average loan balances increased $626.9 million for the quarter as compared to the prior year, with increases in all five major loan portfolios between the periods primarily due to organic growth. ​ The rate paid on average interest-bearing liabilities decreased 16 basis points compared to the prior year quarter as the average rate paid on interest-bearing deposits decreased 12 basis points and the average rate paid on external borrowings decreased 8 basis points from the comparable prior period. The decreases in the rates paid on average interest-bearing deposits and on average borrowings were due to market-related interest rate changes between the periods, as well as a change in the proportion of overnight borrowings and term borrowings to total borrowings. ​ Average interest-bearing deposits increased $819.2 million compared to the prior year quarter, with increases in all deposit account types, including demand deposits, interest checking, savings, money market and time deposits. The average borrowing balance, which primarily includes borrowings at the FHLB and securities sold under agreement to repurchase (customer repurchase agreements), decreased $235.8 million for the quarter. ​ Table 2 below sets forth information related to average interest-earning assets and interest-bearing liabilities and their associated yields and rates for the periods indicated. Interest income and yields are on an FTE basis using a marginal income tax rate of 25.2% in 2026 and 25.1% in 2025. Average balances are computed by totaling the daily ending balances in a period and dividing by the number of days in that period. Loan interest income and yields include amortization of deferred loan income and costs, loan prepayments, late and other fees and the amortization or accretion of acquired loan purchase discounts and premiums, which decreased loan interest income by $6.9 million for the first quarter and $5.9 million for the prior first quarter. Average loan balances include acquired loan purchase discounts and premiums, nonaccrual loans and loans held for sale. 41 Table of Contents Table 2: Quarterly Average Balance Sheet ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ Three Months Ended ​ ​ March 31, 2026 ​ ​ March 31, 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Avg. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Avg. ​ ​ ​ Average ​ ​ ​ Yield/Rate ​ Average ​ ​ ​ Yield/Rate ​ (000's omitted except yields and rates) ​ ​ ​ Balance ​ ​ ​ Interest ​ ​ ​ Paid ​ ​ ​ ​ Balance ​ ​ ​ Interest ​ ​ ​ Paid ​ Interest-earning assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash equivalents ​ $ 230,593 ​ $ 2,054 3.61 % ​ $ 130,649 ​ $ 1,387 4.30 % Taxable investment securities (1) ​ 4,272,245 ​ 20,833 1.98 % ​ 4,211,921 ​ 20,582 1.98 % Nontaxable investment securities (1) ​ 407,433 ​ 3,400 3.38 % ​ 419,746 ​ 3,460 3.34 % Loans (net of unearned discount) (2) ​ 11,029,905 ​ 154,550 5.68 % ​ 10,402,985 ​ 143,112 5.58 % Total interest-earning assets ​ 15,940,176 ​ 180,837 4.60 % ​ 15,165,301 ​ 168,541 ​ 4.51 % Noninterest-earning assets ​ 1,528,628 ​ ​ ​ ​ ​ ​ 1,274,056 ​ ​ ​ ​ Total assets ​ $ 17,468,804 ​ ​ ​ ​ ​ ​ $ 16,439,357 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest checking, savings and money market deposits ​ $ 8,685,727 ​ 22,752 1.06 % ​ $ 7,899,568 ​ 20,262 1.04 % Time deposits ​ 2,185,114 ​ 16,621 3.08 % ​ 2,152,113 ​ 19,024 3.59 % Customer repurchase agreements ​ 214,361 ​ 717 1.36 % ​ 250,142 ​ 860 1.39 % Overnight borrowings ​ ​ 9,406 ​ 91 3.92 % ​ ​ 57,192 ​ ​ 647 ​ 4.58 % FHLB and other borrowings ​ 450,643 ​ 5,094 4.58 % ​ 602,838 ​ 6,642 4.47 % Total interest-bearing liabilities ​ 11,545,251 ​ 45,275 1.59 % ​ 10,961,853 ​ 47,435 1.75 % Noninterest-bearing liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest checking deposits ​ 3,703,510 ​ ​ ​ ​ ​ ​ 3,519,962 ​ ​ ​ ​ Other liabilities ​ 203,902 ​ ​ ​ ​ ​ ​ 173,896 ​ ​ ​ ​ Shareholders' equity ​ ​ 2,016,141 ​ ​ ​ ​ ​ ​ ​ 1,783,646 ​ ​ ​ ​ Total liabilities and shareholders' equity ​ $ 17,468,804 ​ ​ ​ ​ ​ ​ ​ $ 16,439,357 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest earnings (FTE) (non-GAAP) ​ ​ ​ ​ $ 135,562 ​ ​ ​ ​ ​ ​ ​ $ 121,106 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest spread ​ ​ ​ ​ 2.99 % ​ ​ ​ ​ 2.73 % Net interest spread (FTE) (non-GAAP) ​ ​ ​ ​ ​ 3.01 % ​ ​ ​ ​ 2.76 % Net interest margin ​ ​ ​ ​ ​ ​ ​ 3.43 % ​ ​ ​ ​ ​ ​ ​ 3.21 % Net interest margin (FTE) (non-GAAP) ​ ​ ​ ​ ​ ​ ​ 3.45 % ​ ​ ​ ​ ​ ​ ​ 3.24 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fully tax-equivalent adjustment (non-GAAP) (3) ​ ​ ​ ​ $ 850 ​ ​ ​ ​ ​ ​ ​ $ 894 ​ ​ ​ (1) Averages for investment securities are based on amortized cost basis and the yields do not give effect to changes in fair value that is reflected as a component of noninterest-earning assets, shareholders’ equity and deferred taxes. (2) Includes nonaccrual loans. The impact of interest and fees not recognized on nonaccrual loans was immaterial. (3) The FTE adjustment represents taxes that would have been paid had nontaxable investment securities and loans been fully taxable. ​ 42 Table of Contents As discussed above and disclosed in Table 3 below, the change in net interest income (FTE basis) may be analyzed by segregating the volume and rate components of the changes in interest income and interest expense for each underlying category. ​ Table 3: Rate/Volume ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended March 31, 2026 ​ ​ versus March 31, 2025 ​ ​ Increase (Decrease) Due to Change in (1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net (000's omitted) ​ Volume ​ ​ ​ Yield/Rate ​ ​ ​ Change Interest earned on: ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash equivalents ​ $ 919 ​ $ (252) ​ $ 667 Taxable investment securities ​ 295 ​ (44) ​ 251 Nontaxable investment securities ​ (102) ​ 42 ​ (60) Loans (net of unearned discount) ​ 8,747 ​ 2,691 ​ 11,438 Total interest-earning assets (2) ​ 8,740 ​ 3,556 ​ 12,296 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest paid on: ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest checking, savings and money market deposits ​ 2,051 ​ 439 ​ 2,490 Time deposits ​ 288 ​ (2,691) ​ (2,403) Customer repurchase agreements ​ (120) ​ (23) ​ (143) Overnight borrowings ​ ​ (474) ​ ​ (82) ​ ​ (556) FHLB and other borrowings ​ (1,716) ​ 168 ​ (1,548) Total interest-bearing liabilities (2) ​ 2,538 ​ (4,698) ​ (2,160) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest earnings (FTE) (non-GAAP) (2) ​ $ 6,365 ​ $ 8,091 ​ $ 14,456 (1) The change in interest due to both rate and volume has been allocated to volume and rate changes in proportion to the relationship of the absolute dollar amounts of such change in each component. (2) Changes due to volume and rate are computed from the respective changes in average balances and rates of the totals; they are not a summation of the changes of the components. ​ Noninterest Revenues ​ The Company’s sources of noninterest revenues are of four primary types: 1) general banking services related to loans, including mortgage banking, deposits, customer interest rate swap fees, CRE financing and structuring fees, and other core customer activities typically provided through the branch network, commercial banking offices, and digital banking channels (performed by CBNA); 2) employee benefit trust, collective investment fund, transfer agency, actuarial, benefit plan administration and recordkeeping services (performed by BPAS and its subsidiaries); 3) wealth management services, comprised of trust services (performed by the Trust division within CBNA), broker-dealer and investment advisory products and services (performed by NISI) and Nottingham Wealth Partners, Inc.) and asset management services (performed by Nottingham Advisors, Inc.), collectively referred to as Nottingham Financial Group; and 4) insurance and risk management products and services (performed by OneGroup). Additionally, the Company has other transactions that impact noninterest revenues, including income earned on bank owned life insurance, realized and unrealized gains or losses on investment securities, and income or losses on equity method investments. 43 Table of Contents Table 4: Noninterest Revenues ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ ​ March 31, ​ (000’s omitted) ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ Employee benefit services ​ $ 34,572 ​ $ 32,622 ​ Insurance services ​ 12,586 ​ 14,201 ​ Wealth management services ​ ​ 10,332 ​ ​ 9,862 ​ Deposit service charges and fees ​ 8,944 ​ 7,844 ​ Debit interchange and ATM fees ​ 6,973 ​ 6,462 ​ Mortgage banking ​ ​ 1,100 ​ ​ 998 ​ Other banking revenues ​ 4,794 ​ 3,802 ​ Unrealized (loss) gain on equity securities ​ (401) ​ 245 ​ Loss from equity method investments ​ ​ (326) ​ ​ 0 ​ Total noninterest revenues ​ $ 78,574 ​ $ 76,036 ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest revenues/total revenues ​ ​ 36.8 % ​ 38.7 % Operating noninterest revenues/operating revenues (FTE basis) (non-GAAP) (1) ​ ​ 36.8 % ​ 38.5 % (1) Operating noninterest revenues, a non-GAAP measure, excludes unrealized (loss) gain on equity securities from total noninterest revenues. Operating revenues, a non-GAAP measure, is defined as net interest income on a FTE basis plus noninterest revenues, excluding unrealized (loss) gain on equity securities. See Table 14 for Reconciliation of GAAP to Non-GAAP Measures. ​ As displayed in Table 4, noninterest revenues totaled $78.6 million for the first quarter of 2026. This represents an increase of $2.5 million, or 3.3%, for the quarter in comparison to the equivalent 2025 period. Operating noninterest revenues, a non-GAAP measure as defined in the table above, totaled $79.0 million for the first quarter of 2026, an increase of $3.2 million, or 4.2%, from the prior year’s first quarter. ​ Employee benefit services revenues increased $2.0 million, or 6.0%, for the three months ended March 31, 2026, as compared to the equivalent prior year period, driven by revenue growth in the recordkeeping and third-party administration services business line due in part to revenue growth from acquisitions and higher average market values of assets under administration. ​ Insurance services revenues decreased $1.6 million, or 11.4%, primarily due to changes in the timing of collections of contingent commission revenues. ​ Wealth management services revenues increased $0.5 million, or 4.8%, as compared to the prior year, reflective of higher average market values of assets under management. ​ Banking noninterest revenues increased $2.7 million, or 14.2%, between the first quarter of 2025 and 2026. Deposit service charges and fees increased $1.1 million, or 14.0%, compared to the prior year. Other banking revenues increased $1.0 million, or 26.1%, driven by increases in customer interest rate swap fee revenues. Debit interchange and ATM fees increased $0.5 million, or 7.9%, and mortgage banking revenues increased $0.1 million, or 10.2%. ​ The ratio of noninterest revenues to total revenues was 36.8% for the first quarter of 2026, compared to 38.7% for the prior year’s first quarter. The quarterly decrease was due to net interest income increasing 12.1% while noninterest revenues increased 3.3%. ​ The ratio of operating noninterest revenues to operating revenues (FTE), a non-GAAP measure as defined in the table above, was 36.8% for the quarter compared to 38.5% for the prior year. The decrease between the quarterly periods was due to an 11.9% increase in fully tax-equivalent net interest income, a non-GAAP measure, while operating noninterest revenues, a non-GAAP measure, increased 4.2%. ​ ​ 44 Table of Contents Noninterest Expenses ​ Table 5 below sets forth the quarterly results of the major noninterest expense categories for the current and prior year, as well as efficiency ratios (defined below), a standard measure of expense utilization effectiveness commonly used in the banking industry. ​ Table 5: Noninterest Expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ March 31, (000's omitted) ​ ​ ​ 2026 ​ ​ ​ 2025 ​ Salaries and employee benefits ​ ​ ​ $ 80,322 ​ $ 76,442 ​ Data processing and communications ​ 17,871 ​ 16,122 ​ Occupancy and equipment ​ 14,882 ​ 12,698 ​ Business development and marketing ​ 2,535 ​ 3,130 ​ Legal and professional fees ​ 5,070 ​ 4,849 ​ Amortization of intangible assets ​ 4,246 ​ 3,482 ​ Litigation accrual ​ ​ 0 ​ ​ (50) ​ Acquisition expenses ​ ​ 433 ​ ​ 1 ​ Other ​ 7,677 ​ 8,616 ​ Total noninterest expenses ​ $ 133,036 ​ $ 125,290 ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest expenses/average assets ​ ​ 3.09 % ​ 3.09 % Operating noninterest expenses (1) /average assets (non-GAAP) ​ 2.98 % 3.01 % Efficiency ratio (GAAP) ​ ​ 62.4 % ​ 63.8 % Operating efficiency ratio (non-GAAP) (2) ​ 59.8 % 61.9 % (1) Operating noninterest expenses, a non-GAAP measure, is calculated as total noninterest expenses less litigation accrual, acquisition expenses, and amortization of intangible assets. See Table 14 for Reconciliation of GAAP to Non-GAAP Measures. (2) Operating efficiency ratio, a non-GAAP measure, is calculated as operating noninterest expenses as defined in footnote (1) above divided by net interest income on a FTE basis plus noninterest revenues excluding unrealized (loss) gain on equity securities. See Table 14 for Reconciliation of GAAP to Non-GAAP Measures. ​ As shown in Table 5, the Company recorded noninterest expenses of $133.0 million for the first quarter of 2026, representing an increase of $7.7 million, or 6.2% from the prior year. The change was primarily attributable to an increase in salaries and employee benefits (an increase of $3.9 million), occupancy and equipment (an increase of $2.2 million), and data processing and communications (an increase of $1.7 million). The remaining change to noninterest expenses is attributable to other expenses (a decrease of $1.0 million), amortization of intangible assets (an increase of $0.8 million), business development and marketing (a decrease of $0.6 million), acquisition expenses (an increase of $0.4 million), legal and professional fees (an increase of $0.2 million), and litigation accrual (an increase of $0.1 million). ​ The increase in salaries and benefits expense for the quarter was primarily driven by incremental costs associated with acquisitions and de novo bank branches opened between the periods, along with the impact of annual merit-based increases. Data processing increases were reflective of the Company’s continued investment in customer-facing and back-office technologies, including artificial intelligence applications and other workflow efficiency initiatives. Increases in occupancy and equipment expenses were primarily due to incremental costs associated with the opening of de novo bank branches and regional headquarters and the Santander branch acquisition. Amortization of intangible assets increased primarily due to the Santander acquisition. The increase in acquisition expenses was driven by the transaction-related costs associated with the pending acquisition of ClearPoint Federal Bank & Trust. The decrease in other expenses includes a $0.5 million benefit from the non-service related components of the Company’s pension. ​ The Company’s efficiency ratio was 62.4% for the first quarter of 2026, 1.4 percentage points favorable to the comparable quarter of 2025. This resulted from total revenues increasing 8.7%, primarily due to higher net interest income, while total noninterest expenses increased 6.2% due to the factors noted above. ​ The Company’s operating efficiency ratio, a non-GAAP measure as defined in the table above, was 59.8% for the first quarter, 2.1 percentage points favorable to the comparable quarter of 2025. This resulted from operating revenues (FTE), a non-GAAP measure as defined in Table 5, increasing 9.0% while operating noninterest expenses, a non-GAAP measure as described above, increased 5.3%. 45 Table of Contents Annualized current quarter noninterest expenses as a percentage of average assets was slightly lower than the prior year as noninterest expenses increased 6.2% and average assets increased 6.3%. Annualized current quarter operating noninterest expenses, a non-GAAP measure as defined in the table above, as a percentage of average assets decreased 0.03 percentage points versus the first quarter of the prior year as operating noninterest expenses increased 5.3% while average assets increased 6.3%. Noninterest expenses increased between the periods due to the factors noted above and average assets increased between the periods primarily due to an increase in interest earning assets driven by organic growth in deposit balances and the impact of the Santander acquisition. ​ Income Taxes ​ The first quarter 2026 effective income tax rate was 23.3%, compared to 22.8% for the first quarter of 2025. The increase in the first quarter 2026 effective income tax rate is primarily attributable to an increase in amortization of income tax credit investments. The first quarter 2026 tax expense associated with the amortization of income tax credit investments was $1.1 million, as compared to $0.3 million for the comparable period of 2025. In addition, the Company recorded a $0.7 million and $0.5 million tax benefit associated with stock-based compensation for the first quarter of 2026 and the first quarter of 2025, respectively. The effective tax rates adjusted to exclude the income tax impact of stock-based compensation and amortization of income tax credit investments were 22.8% for the first quarter of 2026 and 23.1% for the first quarter of 2025. The decrease was primarily due to an increase in federal income tax credits associated with the Company’s investment in tax credits generated by a solar energy producing company. ​ Investment Securities ​ The carrying value of investment securities (including unrealized gains and losses) was $4.39 billion at the end of the first quarter, a decrease of $16.2 million, or 0.4%, from December 31, 2025 and an increase of $89.3 million, or 2.1%, from March 31, 2025. The book value of investment securities (excluding unrealized gains and losses) of $4.67 billion at the end of the first quarter decreased $4.4 million, or 0.1%, from December 31, 2025 and increased $19.2 million, or 0.4%, from March 31, 2025. The increase from the end of the prior year’s first quarter was primarily driven by U.S. government agency mortgage-backed securities purchases and net accretion of discounts on securities outpacing maturities, calls and principal paydowns. During the first quarter of 2026, the Company purchased $10.5 million of U.S. government agency mortgage-backed securities with an average yield of 4.87%, which the Company classified as held-to-maturity. These additions were offset by $25.7 million of investment maturities, calls and principal payments during the first quarter of 2026. Additionally, there was $9.5 million of net accretion on investment securities during the first quarter of 2026. The effective duration of the investment securities portfolio was 5.2 years at the end of the first quarter of 2026, as compared to 6.0 years at the end of the first quarter of 2025. ​ The change in the carrying value of investment securities is also impacted by the amount of net unrealized gains or losses. At March 31, 2026, the investment portfolio (excluding held-to-maturity investment securities) had a $283.0 million net unrealized loss, an $11.8 million increase from the $271.2 million net unrealized loss at December 31, 2025 and a $70.0 million decrease from the $353.0 million net unrealized loss at March 31, 2025. These changes were principally driven by the general movements in medium to long-term interest rates, as well as the volume and rates associated with the securities purchases and maturities that occurred during the 12 months. 46 Table of Contents The following table sets forth the carrying value of the Company’s investment securities portfolio: ​ Table 6: Investment Securities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ March 31, (000's omitted) ​ ​ ​ 2026 ​ 2025 ​ 2025 Available-for-Sale Portfolio: ​ ​ ​ ​ ​ ​ ​ ​ U.S. Treasury and agency securities ​ $ 2,193,899 ​ $ 2,195,226 ​ $ 2,134,917 Obligations of state and political subdivisions ​ 374,575 ​ 391,917 ​ ​ 378,486 Government agency mortgage-backed securities ​ 270,840 ​ 278,885 ​ ​ 299,791 Government agency collateralized mortgage obligations ​ 3,883 ​ 4,401 ​ ​ 7,771 Corporate debt securities ​ 4,935 ​ 4,912 ​ ​ 5,950 Total available-for-sale portfolio ​ ​ 2,848,132 ​ 2,875,341 ​ ​ 2,826,915 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Held-to-Maturity Portfolio: ​ ​ ​ ​ ​ ​ ​ U.S. Treasury and agency securities ​ ​ 1,175,853 ​ ​ 1,168,487 ​ ​ 1,146,066 Government agency mortgage-backed securities ​ ​ 284,897 ​ ​ 285,679 ​ ​ 247,771 Total held-to-maturity portfolio ​ ​ 1,460,750 ​ ​ 1,454,166 ​ ​ 1,393,837 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Equity and Other Securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Equity securities without readily determinable fair value ​ ​ ​ ​ ​ ​ ​ ​ ​ Federal Home Loan Bank common stock ​ 32,596 ​ 33,232 ​ ​ 38,909 Federal Reserve Bank common stock ​ 33,331 ​ 33,331 ​ ​ 33,331 Other equity securities without readily determinable fair value ​ ​ 6,625 ​ ​ 6,275 ​ ​ 5,752 Total equity securities without readily determinable fair value ​ ​ 72,552 ​ ​ 72,838 ​ ​ 77,992 Equity securities with readily determinable fair value ​ 4,021 ​ ​ 4,414 ​ ​ 2,599 Other investment securities ​ ​ 5,144 ​ ​ 0 ​ ​ 0 Total equity and other securities ​ ​ 81,717 ​ 77,252 ​ ​ 80,591 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total investment securities ​ $ 4,390,599 ​ $ 4,406,759 ​ $ 4,301,343 ​ Loans ​ Loans ended the first quarter at $11.13 billion, $181.4 million, or 1.7%, higher than December 31, 2025 and $710.0 million, or 6.8%, higher than March 31, 2025 ending loans. ​ Mortgages on commercial property combined with general-purpose business lending to commercial, industrial, non-profit and governmental customers is characterized as the Company’s business lending activity. The business lending portfolio increased $343.4 million, or 7.6%, from March 31, 2025, and $149.6 million, or 3.2%, from December 31, 2025, driven by organic growth over both periods. As compared to December 31, 2025, multifamily increased $2.6 million, or 0.3% and business non-real estate loans, including commercial and industrial lending, increased $22.8 million, or 1.8%, while non-owner occupied CRE increased $116.4 million, or 7.0%, and owner occupied CRE increased $7.7 million, or 0.9%. The Company’s non-owner occupied CRE exposure (including multifamily) remains diverse both geographically and by property type, and remains relatively low at 15% of total assets, 24% of total loans and 194% of total bank-level regulatory capital. CRE lending represents 73.4% of the total business lending portfolio at March 31, 2026, compared to 73.1% at December 31, 2025 and 74.0% at March 31, 2025. Other commercial and industrial lending represents the remaining 26.6% of total business lending at March 31, 2026, compared to 26.9% at December 31, 2025 and 26.0% at March 31, 2025. The Company’s largest non-owner occupied CRE lending concentration by property type is multifamily at 25.7% of total CRE lending, followed by office and lodging, at 10.9% and 10.1%, respectively. The Company’s largest owner occupied lending concentration by industry is retail trade at 7.6% of total CRE lending, followed by manufacturing and real estate rental and leasing that comprise 2.6% and 2.4%, respectively, of total CRE lending. These levels demonstrate the Company’s diversity in the lending portfolio, as there are no significant industry or geographic concentrations, no metropolitan statistical area (“MSA”) accounting for more than 13% of the CRE portfolio and a very low level of CRE lending being conducted in major metropolitan areas. See Table 7 below for concentrations of CRE lending by borrower type and Table 8 below for concentrations of CRE by property location. 47 Table of Contents The business loan balance increases are reflective of continued high demand for multi-family housing, expansion of internal resources and proactive business development and pricing in the Company’s market areas, as well as the Company’s strong liquidity profile relative to competitors that creates opportunities to gain market share. The Company strives to generate growth in its business portfolio in a manner that adheres to its goals of maintaining strong credit quality and producing profitable margins. The Company continues to invest in additional personnel, technology and business development resources to further strengthen its capabilities in this important product category. To assist business lending customers in managing their interest rate risk, the Company enters into interest rate swaps which have associated interest rate and credit risk; for additional detail on the Company’s use of interest rate swaps, see Note J beginning on page 29 of this Form 10-Q. ​ The following table presents the concentration by borrower type of the Company’s CRE loan balances as of March 31, 2026 and December 31, 2025. ​ Table 7: Concentrations of CRE Lending by Borrower Type ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2026 ​ ​ December 31, 2025 ​ ​ ​ Amortized ​ Percentage of ​ Amortized ​ Percentage of ​ (000’s omitted, except percentages) ​ ​ ​ Cost ​ ​ ​ Total ​ ​ ​ ​ Cost ​ ​ ​ Total ​ Non-owner occupied CRE by property type: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Multifamily ​ $ 920,225 ​ 25.7 % ​ $ 917,586 ​ 26.5 % Office ​ 389,233 ​ 10.9 % ​ ​ 374,194 ​ 10.8 % Lodging ​ 360,866 ​ 10.1 % ​ ​ 332,943 ​ 9.6 % Commercial Construction ​ 330,238 ​ 9.2 % ​ ​ 297,038 ​ 8.6 % Retail ​ 287,797 ​ 8.0 % ​ ​ 268,329 ​ 7.8 % Other Lessors of CRE ​ 193,155 ​ 5.4 % ​ ​ 173,451 ​ 5.1 % Warehouse/Industrial ​ 163,265 ​ 4.5 % ​ ​ 160,769 ​ 4.6 % Nursing/Assisted Living ​ 51,670 ​ 1.4 % ​ ​ 52,373 ​ 1.5 % Residential Construction ​ 3,128 ​ 0.1 % ​ ​ 3,849 ​ 0.1 % All Other ​ 7,538 ​ 0.2 % ​ ​ 7,505 ​ 0.2 % Total non-owner occupied CRE ​ 2,707,115 75.5 % ​ ​ 2,588,037 ​ 74.8 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Owner occupied CRE by industry: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Retail Trade ​ 271,649 ​ 7.6 % ​ ​ 277,213 ​ 8.0 % Manufacturing ​ 92,346 ​ 2.6 % ​ ​ 70,735 ​ 2.0 % Real Estate Rental and Leasing ​ 85,879 ​ 2.4 % ​ ​ 91,600 ​ 2.6 % Arts, Entertainment and Recreation ​ ​ 85,844 ​ 2.4 % ​ ​ 83,453 ​ 2.4 % Other Services ​ 76,825 ​ 2.1 % ​ ​ 77,657 ​ 2.2 % Health Care and Social Assistance ​ 75,189 ​ 2.1 % ​ ​ 78,529 ​ 2.3 % Agriculture and Forestry ​ ​ 52,207 ​ 1.5 % ​ ​ 51,081 ​ 1.5 % Accommodation and Food Services ​ 40,825 ​ 1.1 % ​ ​ 41,398 ​ 1.2 % Wholesale Trade ​ 22,497 ​ 0.6 % ​ ​ 22,854 ​ 0.7 % Construction ​ 19,378 ​ 0.5 % ​ ​ 18,974 ​ 0.5 % Transportation and Warehousing ​ 10,302 ​ 0.3 % ​ ​ 10,583 ​ 0.3 % Professional, Scientific and Technical Services ​ 9,525 ​ 0.3 % ​ ​ 9,876 ​ 0.3 % Educational Services ​ 5,167 ​ 0.1 % ​ ​ 5,241 ​ 0.2 % All Other ​ 31,905 ​ 0.9 % ​ ​ 32,607 ​ 1.0 % Total owner occupied CRE ​ 879,538 24.5 % ​ ​ 871,801 ​ 25.2 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total CRE ​ $ 3,586,653 100.0 % ​ $ 3,459,838 ​ 100.0 % ​ The following table presents the geographic concentrations of the Company’s CRE loan balances by property location (MSA) as of March 31, 2026 and December 31, 2025. ​ 48 Table of Contents Table 8: Concentrations of CRE by Property Location ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2026 ​ Multifamily CRE ​ Owner occupied CRE ​ Other Non-owner occupied CRE ​ Total CRE ​ (000’s omitted, except percentages) ​ Amortized Cost ​ Percentage of Total CRE ​ Amortized Cost ​ Percentage of Total CRE ​ Amortized Cost ​ Percentage of Total CRE ​ Amortized Cost ​ Percentage of Total CRE ​ MSA: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Albany-Schenectady-Troy, NY ​ $ 96,477 2.7 % $ 100,041 ​ 2.8 % $ 265,480 ​ 7.4 % $ 461,998 12.9 % Burlington-South Burlington, VT ​ ​ 206,871 5.8 % 50,293 ​ 1.4 % 148,984 ​ 4.2 % 406,148 11.4 % Rochester, NY ​ 36,610 ​ 1.0 % ​ 96,907 ​ 2.7 % ​ 168,439 ​ 4.7 % ​ 301,956 ​ 8.4 % Buffalo-Cheektowaga, NY ​ 105,307 2.9 % 60,409 ​ 1.7 % 129,413 ​ 3.6 % 295,129 8.2 % Scranton Wilkes-Barre, PA ​ 70,044 2.0 % 61,851 ​ 1.7 % 119,793 ​ 3.3 % 251,688 7.0 % Syracuse, NY ​ 14,025 0.4 % 73,447 ​ 2.0 % 153,821 ​ 4.3 % 241,293 6.7 % Utica-Rome, NY ​ 52,109 1.5 % 43,371 ​ 1.2 % 52,058 ​ 1.5 % 147,538 4.2 % Allentown-Bethlehem-Easton, PA-NJ ​ ​ 458 ​ 0.0 % ​ 15,115 ​ 0.4 % ​ 74,755 ​ 2.1 % ​ 90,328 ​ 2.5 % All Other MSA - NY (1)(2) ​ 116,035 3.2 % 64,648 ​ 1.8 % 97,920 ​ 2.7 % 278,603 7.7 % All Other MSA - PA (1)(2) ​ 34,127 1.0 % 45,583 ​ 1.3 % 127,624 ​ 3.6 % 207,334 5.9 % All Other MSA (1) ​ 95,915 2.7 % 71,533 ​ 2.0 % 230,576 ​ 6.4 % 398,024 11.1 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-MSAs: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NY ​ 48,253 1.3 % 155,810 ​ 4.3 % 174,996 ​ 4.9 % 379,059 10.5 % All Other Non-MSA ​ 43,994 1.2 % 40,530 ​ 1.2 % 43,031 ​ 1.1 % 127,555 3.5 % Total ​ $ 920,225 25.7 % $ 879,538 24.5 % $ 1,786,890 49.8 % $ 3,586,653 100.0 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ Multifamily CRE ​ Owner occupied CRE ​ Other Non-owner occupied CRE ​ Total CRE ​ (000’s omitted, except percentages) ​ Amortized Cost ​ Percentage of Total CRE ​ Amortized Cost ​ Percentage of Total CRE ​ Amortized Cost ​ Percentage of Total CRE ​ Amortized Cost ​ Percentage of Total CRE ​ MSA: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Albany-Schenectady-Troy, NY ​ $ 97,325 ​ 2.8 % $ 102,096 ​ 3.0 % $ 250,237 ​ 7.2 % $ 449,658 ​ 13.0 % Burlington-South Burlington, VT ​ ​ 208,942 ​ 6.0 % ​ 33,426 ​ 1.0 % ​ 144,998 ​ 4.2 % ​ 387,366 ​ 11.2 % Rochester, NY ​ 37,120 ​ 1.1 % ​ 98,468 ​ 2.8 % ​ 156,316 ​ 4.5 % ​ 291,904 ​ 8.4 % Buffalo-Cheektowaga, NY ​ 106,187 ​ 3.1 % ​ 56,535 ​ 1.6 % ​ 121,919 ​ 3.5 % ​ 284,641 ​ 8.2 % Syracuse, NY ​ 14,123 ​ 0.4 % ​ 80,427 ​ 2.3 % ​ 137,027 ​ 4.0 % ​ 231,577 ​ 6.7 % Scranton Wilkes-Barre, PA ​ 70,371 ​ 2.0 % ​ 61,458 ​ 1.8 % ​ 94,771 ​ 2.7 % ​ 226,600 ​ 6.5 % Utica-Rome, NY ​ 52,965 ​ 1.5 % ​ 42,916 ​ 1.2 % ​ 53,718 ​ 1.6 % ​ 149,599 ​ 4.3 % Glens Falls, NY ​ 43,332 ​ 1.3 % ​ 2,405 ​ 0.1 % ​ 19,971 ​ 0.6 % ​ 65,708 ​ 2.0 % All Other MSA - NY (1)(2) ​ 74,036 ​ 2.1 % ​ 63,606 ​ 1.8 % ​ 79,012 ​ 2.3 % ​ 216,654 ​ 6.2 % All Other MSA - PA (1)(2) ​ 29,468 ​ 0.9 % ​ 62,222 ​ 1.8 % ​ 175,917 ​ 5.1 % ​ 267,607 ​ 7.8 % All Other MSA (1) ​ 92,036 ​ 2.7 % ​ 64,397 ​ 1.9 % ​ 209,183 ​ 6.0 % ​ 365,616 ​ 10.6 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-MSAs: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NY ​ 49,930 ​ 1.4 % ​ 157,146 ​ 4.5 % ​ 183,374 ​ 5.3 % ​ 390,450 ​ 11.2 % All Other Non-MSA ​ 41,751 ​ 1.2 % ​ 46,699 ​ 1.4 % ​ 44,008 ​ 1.3 % ​ 132,458 ​ 3.9 % Total ​ $ 917,586 ​ 26.5 % $ 871,801 25.2 % $ 1,670,451 ​ 48.3 % $ 3,459,838 100.0 % (1) The MSAs within these captions are individually less than 2% of total CRE exposure. (2) The MSAs within these captions include certain counties in adjacent states with a high degree of economic and social integration with the respective core city in New York or Pennsylvania. 49 Table of Contents Consumer mortgages increased $114.9 million, or 3.3%, from one year ago (including $4.1 million acquired in the Santander transaction) and increased $1.9 million, or 0.1%, from December 31, 2025, with the increases over both periods primarily representing organic growth, including the impact of certain secondary market sales of new volume production. The Company sold $17.6 million and $79.1 million of consumer mortgage production during the first quarter of 2026 and over the last twelve months, respectively. Over the past year, the Company produced organic growth in the consumer mortgage segment due to the Company’s competitive product offerings, recruitment of additional mortgage loan originators and proactive business development efforts, while also benefitting from the comparatively stable housing market conditions in the Company’s primary markets relative to the national environment. Home equity loans increased $53.2 million, or 11.1%, from one year ago (including $16.9 million acquired in the Santander transaction) and increased $0.7 million, or 0.1%, from December 31, 2025, in part a result of competitive pricing and lower levels of payoffs and paydowns related to consumer mortgage refinancing in a relatively high interest rate environment. ​ Consumer installment loans, both those originated directly in the branches and online (referred to as “consumer direct”) and indirectly in automobile, marine and recreational vehicle dealerships (referred to as “consumer indirect”), increased $198.5 million, or 10.5%, from one year ago (including $9.3 million acquired in the Santander transaction), and increased $29.3 million, or 1.4%, from December 31, 2025. The Company is focused on maintaining a profitable in-market and contiguous market indirect portfolio by providing competitive market offerings to its customers and pursuing the expansion of its dealer network. Consumer installment loans have historically provided attractive returns, and the Company strives to grow these key portfolios despite the strong competition from the financing subsidiaries of vehicle manufacturers and other financial intermediaries. ​ Asset Quality ​ The following table sets forth the allocation of the allowance for credit losses by loan category as of the end of the periods indicated, as well as the proportional share of each category’s loan balance to total loans. This allocation is based on management’s assessment, at a given point in time, of the risk characteristics of each of the component parts of the total loan portfolio and is subject to change when the risk factors of each component part change. The allocation is not indicative of the specific amount of future net charge-offs that are projected for each of the loan categories, nor should it be taken as an indicator of future loss trends. The allocation of the allowance to each category does not restrict the use of the allowance to absorb losses in any category. As shown in Table 9, total allowance for credit losses at the end of the first quarter was $90.2 million, an increase of $7.4 million, or 8.9%, from one year earlier and an increase of $2.3 million, or 2.6%, from the end of 2025. ​ Table 9: Allowance for Credit Losses by Loan Type ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2026 ​ ​ ​ December 31, 2025 ​ ​ ​ March 31, 2025 (000’s omitted except for ratios) ​ Allowance for Credit Losses ​ ​ ​ Percent of Total Loan Balances ​ ​ ​ Allowance for Credit Losses ​ ​ ​ Percent of Total Loan Balances ​ ​ ​ Allowance for Credit Losses ​ ​ ​ Percent of Total Loan Balances ​ Business lending ​ $ 49,952 ​ 43.9 % $ 46,155 ​ 43.2 % $ 42,988 ​ 43.6 % Consumer mortgage ​ 12,583 32.5 % 14,005 33.0 % 13,679 33.6 % Consumer indirect ​ 20,690 17.0 % 20,914 17.0 % 19,746 16.4 % Consumer direct ​ 4,456 1.8 % 4,257 1.9 % 4,033 1.8 % Home equity ​ 1,512 4.8 % 1,590 4.9 % 1,394 4.6 % Unallocated ​ ​ 1,000 ​ 0.0 % ​ 1,000 ​ 0.0 % ​ 1,000 ​ 0.0 % Total ​ $ 90,193 100.0 % $ 87,921 100.0 % $ 82,840 100.0 % ​ As demonstrated in Table 9, the consumer direct, consumer indirect and the business lending portfolios carry higher credit risk than the consumer mortgage and home equity portfolios and therefore the Company allocates a higher proportional allowance to these portfolios. The unallocated allowance is maintained for potential losses not captured in the specific allowance categories due to model imprecision. The unallocated allowance of $1.0 million at March 31, 2026 was consistent with December 31, 2025 and March 31, 2025. ​ 50 Table of Contents Allowance for credit losses and loan net charge-off ratios are as follows: ​ Table 10: Loan Ratios ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ March 31, ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2025 Allowance for credit losses/total loans 0.81 % 0.80 % 0.79 % Allowance for credit losses/nonperforming loans 168 % 156 % 110 % Nonaccrual loans/total loans 0.42 % ​ 0.45 % 0.66 % Allowance for credit losses/nonaccrual loans 191 % 178 % 120 % Net charge-offs (annualized) to average loans outstanding (quarterly): ​ ​ ​ ​ ​ ​ ​ Business lending ​ 0.02 % 0.06 % 0.06 % Consumer mortgage ​ 0.01 % ​ 0.00 % ​ 0.00 % Consumer indirect ​ 0.27 % ​ 0.29 % ​ 0.53 % Consumer direct (1) ​ 1.71 % ​ 0.54 % ​ 0.70 % Home equity ​ 0.01 % ​ 0.03 % ​ 0.01 % Total loans (2) ​ 0.11 % ​ 0.09 % ​ 0.13 % (1) Excludes overdraft net charge-offs. (2) Includes overdraft net charge-offs. ​ Net charge-offs during the first quarter of 2026 were $3.0 million, a decrease of $0.3 million compared to the first quarter of 2025. The business lending portfolio experienced lower net charge-off levels compared with the first quarter of 2025 while the consumer installment and consumer mortgage were above prior year levels and home equity was consistent. The total net charge-off ratio (net charge-offs annualized as a percentage of average loans outstanding for the quarter) for the first quarter was 0.11%, 2 basis points higher than the ratio for the fourth quarter of 2025 and 2 basis points lower than the ratio for the first quarter of 2025. The net charge-off ratios for the first quarter of 2026 for the business lending and home equity portfolios were below the Company’s average for the trailing eight quarters, while the net charge-off ratio for the consumer mortgage and consumer installment portfolios were above the Company’s average for the trailing eight quarters. ​ Other real estate owned (“OREO”) at March 31, 2026 was $8.1 million. This compares to $8.2 million at December 31, 2025 and $2.7 million at March 31, 2025. At March 31, 2026, OREO consisted of 45 residential properties with a total value of $2.7 million and one commercial lending relationship consisting of multiple properties with an aggregate value of $5.4 million. This compares to 42 residential properties with a total value of $2.9 million and one commercial lending relationship consisting of multiple properties with an aggregate value of $5.4 million at December 31, 2025, and 46 residential properties with a total value of $2.7 million and no commercial properties at March 31, 2025. The increase in OREO over the last twelve months was primarily driven by commercial OREO related to an investment in a special purpose entity that holds the property underlying a non-owner occupied CRE loan that was charged off in the second quarter of 2025. ​ Approximately 30% of the nonperforming loans at March 31, 2026 were related to the business lending portfolio, which is comprised of business loans broadly diversified by geography, collateral category and industry. Of the nonperforming loans in the business lending portfolio, other commercial and industrial loans represents 64% of the balance, owner occupied CRE represents 32% of the balance, multifamily represents 3% of the balance and non-owner occupied CRE represents 1% of the balance. Nonperforming business loans decreased 9 basis points as compared to December 31, 2025 and decreased 57 basis points as compared to March 31, 2025. The decrease in nonperforming business loans as compared to March 31, 2025 is primarily related to the charge-off of one non-owner occupied CRE loan relationship previously mentioned and the substantial repayment of one multifamily CRE nonperforming loan relationship. ​ 51 Table of Contents Approximately 61% of nonperforming loans at March 31, 2026 were comprised of consumer mortgages. Collateral values of residential properties within most of the Company’s market areas have generally remained stable or increased over the past several years. Inflation rates have trended lower and become more stable, and the unemployment rate remains relatively stable. This has contributed to the credit performance in the consumer mortgage loan portfolio remaining favorable. The remaining 9% of nonperforming loans relate to consumer installment and home equity loans, with home equity nonperforming loan levels being driven by the same factors that were identified for consumer mortgages. Nonperforming loan levels in the consumer installment category are typically lower than the other portfolios because they are generally charged off before they reach non-performing status. The allowance for credit losses to nonperforming loans ratio, a general measure of coverage adequacy, was 168% at the end of the first quarter, as compared to 156% at year-end 2025 and 110% at March 31, 2025. The increase in this ratio versus the end of 2025 and one year ago was due to the allowance for credit losses increasing proportionally more than nonperforming loan levels. ​ The Company’s asset quality metrics, including net charge-offs and delinquent and nonperforming loans, remain relatively favorable compared to the banking industry, reflecting the Company’s robust risk management practices and disciplined credit quality standards. ​ The Company’s senior management, special asset officers and business lending management review all delinquent and nonaccrual loans and OREO regularly in order to identify deteriorating situations, monitor known problem credits and discuss any needed changes to collection efforts, if warranted. Based on this analysis, a relationship may be assigned a special assets officer or other senior lending officer to meet with the borrowers, assess the collateral and recommend an action plan. This plan could include foreclosure, restructuring loans, issuing demand letters or other actions. The Company’s larger criticized credits (greater than $2.0 million exposure) are also reviewed on a quarterly basis by banking senior management, senior credit administration management, special assets officers and business lending management to monitor their status and discuss relationship management plans. Business lending management reviews the criticized business loan portfolio on a monthly basis. ​ Delinquent loans (defined as loans 30 days or more past due or in nonaccrual status) as a percent of total loans was 1.12% at the end of the first quarter, 2 basis points above the 1.10% at year-end 2025 and 17 basis points below the 1.29% at March 31, 2025. The business lending delinquency ratio at the end of the first quarter of 0.71% was 17 basis points above the level of 0.54% at December 31, 2025 and 54 basis points below the level of 1.25% at March 31, 2025. The changes in the delinquent loan ratios over the indicated prior periods were related to the previously mentioned charged-off and substantially repaid CRE loans. The delinquency rates for business lending, home equity and consumer mortgage loan portfolios increased as compared to the levels at December 31, 2025, while consumer installment decreased. The delinquency rates for business lending decreased as compared to the levels at March 31, 2025, while consumer mortgage, home equity and consumer installment increased. ​ The Company recorded a $5.6 million provision for credit losses in the first quarter of 2026. The first quarter provision for credit losses was $1.1 million lower than the equivalent prior year period’s provision for credit losses of $6.7 million, primarily due to modest improvement in credit quality metrics. The allowance for credit losses of $90.2 million as of March 31, 2026 increased $7.4 million from the level one year ago, primarily due to organic loan growth. The allowance for credit losses to total loans ratio was 0.81% at March 31, 2026, 1 and 2 basis points higher than the levels at December 31, 2025 and March 31, 2025, respectively. Refer to Note E: Loans and Allowance for Credit Losses in the notes to the consolidated financial statements for a discussion of management’s methodology used to estimate the allowance for credit losses. ​ As of March 31, 2026, the net purchase discount related to the $733.0 million of remaining non-PCD loan balances acquired through acquisition transactions was approximately $13.6 million, or 1.9% of that portfolio. ​ ​ 52 Table of Contents Deposits ​ As shown in Table 11, average deposits of $14.57 billion in the first quarter were $1.00 billion, or 7.4%, higher than the first quarter of 2025 and increased $262.9 million, or 1.8%, from the fourth quarter of last year. On an ending basis, total deposits increased $483.0 million, or 3.4%, from December 31, 2025 and were $978.1 million, or 7.0%, higher than one year prior. Average non-governmental deposits for the first quarter of 2026 increased $245.9 million, or 2.0%, versus the fourth quarter of 2025 and increased $1.06 billion, or 9.3%, versus the year-earlier period. The increase from the end of the prior year’s fourth quarter was primarily driven by higher average balances of individual non-time deposits and the increase from the end of the prior year’s first quarter was driven by higher average balances of individual and business non-time deposits, as well as additional deposit accounts assumed as part of the Santander branch acquisition. Average reciprocal deposits for the first quarter of 2026 increased $0.9 million versus the fourth quarter of 2025 and increased $146.7 million from the first quarter of 2025, primarily driven by an expansion of the Company’s reciprocal deposit relationship base and certain governmental customers moving from standard deposit products and customer repurchase agreements, a non-deposit product categorized as borrowings, to reciprocal deposit products. Average governmental deposits for the first quarter increased $16.1 million, or 0.8%, from the fourth quarter of 2025, driven by seasonal inflows of governmental deposits, and decreased $203.0 million, or 9.4%, from the first quarter of 2025. Average governmental deposits as a percentage of total average deposits decreased from 15.9% in the first quarter of 2025 to 13.4% in the first quarter of 2026. The decrease in average governmental deposits from the prior year’s first quarter is reflective of lower average governmental money market and time deposit balances. ​ Average noninterest checking deposits as a percentage of average total deposits was 25.4% in the first quarter compared to 25.9% in both the first and fourth quarters of 2025. Average non-maturity deposits represented 85.0% of the Company’s average deposit funding base in the first quarter of 2026 and time deposits represented 15.0% of total average deposits. In comparison, time deposits represented 15.9% of total average deposits during the first quarter of 2025 and 14.9% of total average deposits during the fourth quarter of last year. ​ The quarterly average cost of deposits was 1.10% for the first quarter of 2026, compared to 1.17% in the first quarter of 2025 and 1.15% at the end of 2025, reflective of the decrease in certain deposit interest rates, as well as the decrease in proportion of relatively higher-cost time deposits. The Company continues to focus on expanding its deposit relationship base through its competitive product offerings, high-quality customer service and market expansion initiatives. ​ The Company’s deposit base is well diversified across customer segments, which as of March 31, 2026 is comprised of approximately 58% consumer, 28% business and 14% governmental, and broadly dispersed with an average consumer deposit balance per account of approximately $13,000 and average business deposit relationship of approximately $81,000, while the Company’s total average deposit balance per account is under $20,000. In addition, at the end of the quarter, 64% of the Company’s total deposit balances were in checking and predominantly low-rate savings accounts and the weighted-average age of the Company’s non-maturity deposit accounts was approximately 15 years. ​ The total estimated amount of deposits that exceeded the $250,000 insured limit provided by the FDIC, net of collateralized and intercompany deposits, was approximately $2.76 billion at March 31, 2026. This amount is determined by adjusting the amounts reported in the Bank Call Report by intercompany deposits, which are not external customers and are therefore eliminated in consolidation, and governmental deposits whose uninsured balances are collateralized by certain pledged investment securities. The Bank Call Report estimated uninsured deposit balances at March 31, 2026, reported gross, totaled $4.94 billion, which includes intercompany account balances of $300.6 million, and collateralized deposits of $1.88 billion. Estimated insured deposits, net of collateralized and intercompany deposits, represent 81% of ending total deposits at March 31, 2026. These estimates are based on the determination of known deposit account balances of each depositor and the insurance guidelines provided by the FDIC. ​ ​ 53 Table of Contents Table 11: Quarterly Average Deposits ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ March 31, (000’s omitted) ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2025 Noninterest checking deposits ​ $ 3,703,510 ​ $ 3,702,200 $ 3,519,962 Interest checking deposits ​ ​ 3,108,061 ​ 3,012,487 ​ 2,984,420 Savings deposits ​ ​ 2,487,190 ​ 2,427,894 ​ 2,276,515 Money market deposits ​ ​ 3,090,476 ​ 3,030,459 ​ 2,638,633 Time deposits ​ ​ 2,185,114 ​ ​ 2,138,368 ​ 2,152,113 Total deposits ​ $ 14,574,351 ​ $ 14,311,408 $ 13,571,643 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nongovernmental deposits ​ $ 12,420,222 ​ $ 12,174,277 $ 11,361,194 Governmental deposits ​ ​ 1,957,249 ​ ​ 1,941,153 ​ 2,160,295 Reciprocal deposits ​ ​ 196,880 ​ ​ 195,978 ​ ​ 50,154 Total deposits ​ $ 14,574,351 ​ $ 14,311,408 $ 13,571,643 ​ Borrowings ​ Borrowings, excluding securities sold under agreement to repurchase, at the end of the first quarter of 2026 totaled $446.3 million. This was $12.5 million, or 2.7%, lower than borrowings at December 31, 2025 and $149.1 million, or 25.0%, below the balance at March 31, 2025. The decreases between both periods were attributable to decreases in FHLB and other borrowings reflective of the scheduled paydowns of amortizing advances. The decrease from March 31, 2025 also included the impact of the FHLB exercising their put option on a $100.0 million advance with a rate of 3.73% in August 2025. ​ Securities sold under agreement to repurchase, also referred to as customer repurchase agreements, represent collateralized governmental and commercial funding from customers that price and operate similar to a governmental deposit instrument, including the requirement to collateralize uninsured balances. Customer repurchase agreements were $201.0 million at the end of the first quarter of 2026, $30.1 million, or 13.0%, lower than December 31, 2025, and $65.6 million, or 24.6%, lower than March 31, 2025, driven by lower governmental balances due in part to certain customers transferring funds to the Company’s reciprocal deposit product offerings that generally do not require collateralization. ​ Shareholders’ Equity and Regulatory Capital ​ Total shareholders’ equity of $2.02 billion at the end of the first quarter of 2026 represents an increase of $18.0 million, or 0.9%, from the balance at December 31, 2025. The increase was primarily driven by net income of $57.2 million, partially offset by common stock dividends declared of $24.7 million and common stock repurchased as part of the Company’s publicly announced stock repurchase program of $15.5 million. Over the past 12 months, total shareholders’ equity increased $189.9 million, or 10.4%, as net income, an increase in the after-tax market value adjustment on investments, the issuance of common stock in association with the employee stock plans and adjustments to the overfunded status of the Company’s employee retirement plans more than offset common stock dividends declared and common stock repurchased. ​ The dividend payout ratio (dividends declared divided by net income) for the first quarter of 2026 was 43.2%, compared to 49.0% for the first quarter of 2025. The decrease in the dividend payout ratio was due to the 15.3% growth in first quarter net income versus one year prior significantly exceeding the percentage increase of dividends declared for the same periods. First quarter dividends declared increased 1.7% compared to one year earlier, as the Company’s quarterly dividend per share was raised from $0.46 to $0.47 in the third quarter of 2025, while total shares outstanding decreased 0.6% due to common stock repurchases between the periods, partially offset by issuances from the Company’s employee stock plans. The 1 cent, or 2.2%, increase in the quarterly common stock dividend to $0.47 per share on its common stock declared in the third quarter of 2025 marked the 33rd consecutive year of dividend increases for the Company. ​ ​ 54 Table of Contents The Company and the Bank are subject to various regulatory capital requirements administered by federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s dividend paying ability and financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of the Company’s and the Bank’s assets and certain liabilities and off-balance sheet items as calculated under regulatory accounting practices. The Company’s and the Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. ​ The Company and the Bank are required to maintain a “capital conservation buffer”, composed entirely of common equity Tier 1 capital, in addition to minimum risk-based capital ratios. The required capital conservation buffer is 2.5% as of March 31, 2026, December 31, 2025 and March 31, 2025. Therefore, to satisfy both the minimum risk-based capital ratios and the capital conservation buffer as of those dates, the Company and the Bank must maintain: ​ (i) Common equity Tier 1 capital to total risk-weighted assets (“Common equity tier 1 capital ratio”) of at least 7.0%, (ii) Tier 1 capital to total risk-weighted assets (“Tier 1 risk-based capital ratio”) of at least 8.5%, and (iii) Total capital (Tier 1 capital plus Tier 2 capital) to total risk-weighted assets (“Total risk-based capital ratio”) of at least 10.5%. ​ In addition, the Company and Bank must maintain a ratio of ending Tier 1 capital to adjusted quarterly average assets (“Tier 1 leverage ratio”) of at least 5.0% to be considered “well capitalized” under the regulatory framework for prompt corrective action. ​ As of March 31, 2026, December 31, 2025 and March 31, 2025, the Company and Bank meet all applicable capital adequacy requirements to be considered “well capitalized”. As of March 31, 2026, December 31, 2025 and March 31, 2025, the regulatory capital ratios for the Company and Bank are presented below. ​ Table 12: Regulatory Ratios ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2026 ​ ​ December 31, 2025 ​ March 31, 2025 ​ ​ Community ​ ​ ​ ​ ​ Community ​ ​ ​ ​ ​ Community ​ ​ ​ ​ ​ ​ Financial ​ ​ Community ​ ​ Financial ​ ​ Community ​ ​ Financial ​ ​ Community ​ ​ ​ System, Inc. ​ ​ ​ ​ Bank, N.A. ​ ​ ​ ​ System, Inc. ​ ​ ​ ​ Bank, N.A. ​ ​ ​ ​ System, Inc. ​ ​ ​ ​ Bank, N.A. ​ Tier 1 leverage ratio ​ 9.20 % ​ 7.91 % ​ 9.21 % ​ 7.85 % ​ 9.29 % ​ 7.88 % Common equity Tier 1 capital ratio ​ 13.89 % ​ 11.98 % ​ 14.04 % ​ 12.02 % ​ 14.40 % ​ 12.27 % Tier 1 risk-based capital ratio ​ 13.89 % ​ 11.98 % ​ 14.04 % ​ 12.02 % ​ 14.40 % ​ 12.27 % Total risk-based capital ratio ​ 14.70 % ​ 12.80 % ​ 14.85 % ​ 12.84 % ​ 15.21 % ​ 13.08 % 55 Table of Contents The Company’s tier 1 leverage ratio was 9.20% at the end of the first quarter, a decrease of 1 basis point from December 31, 2025 and 9 basis points below its level one year earlier. The decrease in the Tier 1 leverage ratio in comparison to December 31, 2025 was the result of ending shareholders’ equity, excluding intangibles net of deferred tax liabilities associated with intangibles (“net intangibles”) and other comprehensive income or loss items, increasing 1.4%, while average assets, excluding intangibles and the market value adjustment on available-for-sale investment securities, increased a greater 1.6%. The Tier 1 leverage ratio also decreased compared to the prior year’s first quarter as shareholders’ equity, excluding net intangibles and other comprehensive income or loss items, increased 4.3%, while average assets, excluding net intangibles and the market value adjustment, increased a greater 5.4%. The increases in shareholders’ equity, excluding net intangibles and other comprehensive income or loss items, were primarily a result of net earnings retention while the increases in average assets, excluding intangibles and the market value adjustment on available-for-sale investment securities, were primarily driven by organic deposit growth. ​ The shareholders’ equity-to-assets ratio was 11.41% at the end of the first quarter of 2026 compared to 11.59% at December 31, 2025 and 10.94% at March 31, 2025. The tangible equity-to-tangible assets ratio, a non-GAAP measure, of 6.68% decreased 7 basis points from December 31, 2025 and increased 53 basis points from March 31, 2025. The increase in the tangible equity-to-tangible assets ratio, a non-GAAP measure, from one year prior was driven by a $146.0 million, or 14.9%, increase in tangible equity, a non-GAAP measure, while tangible assets, a non-GAAP measure, increased $936.7 million, or 5.9%. The decrease in the tangible equity-to-tangible assets ratio, a non-GAAP measure, from December 31, 2025 was driven by a $440.8 million, or 2.7%, increase in tangible assets, a non-GAAP measure, while tangible equity, a non-GAAP measure, increased $17.2 million, or 1.6%. Over the past twelve months, the increase in tangible equity, a non-GAAP measure, was mainly due to net earnings retention and a decrease in accumulated other comprehensive loss related to the investment securities portfolio in the declining rate environment, while the increase in tangible assets, a non-GAAP measure, was reflective of organic loan growth and the Santander branch acquisition. During the first quarter, the increase in tangible equity, a non-GAAP measure, was primarily due to net earnings retention that was partially offset by an increase in the unrealized loss in the investment portfolio and common share repurchases, while the increase in tangible assets, a non-GAAP measure, was driven by organic loan growth and an increase in cash and cash equivalents due to net deposit inflows. See Table 14 for Reconciliation of Quarterly GAAP to Non-GAAP Measures. ​ Liquidity ​ Liquidity risk is a measure of the Company’s ability to raise cash when needed at a reasonable cost and minimize any loss. The Company maintains appropriate liquidity levels in both normal operating conditions as well as stressed environments. The Company must be capable of meeting all obligations to its customers at any time and, therefore, the active management of its liquidity position remains an important management objective. The Bank has appointed the Asset Liability Committee (“ALCO”) to manage liquidity risk using policy guidelines and limits on indicators of potential liquidity risk. The indicators are monitored using a scorecard with three risk level limits. These risk indicators measure core liquidity and funding needs, capital at risk and change in available funding sources. The risk indicators are monitored using such metrics as the core basic surplus ratio, unencumbered securities to average assets, free loan collateral to average assets, loans to deposits, deposits to total funding and borrowings to total funding ratios. ​ Given the uncertain nature of the Company’s customers' demands, as well as the Company's desire to take advantage of earnings enhancement opportunities, the Company must have adequate sources of on and off-balance sheet funds available that can be utilized when needed. Accordingly, in addition to the liquidity provided by balance sheet cash flows, liquidity must be supplemented with additional sources such as borrowings from the FHLB and the FRB and credit lines from correspondent banks. Other funding alternatives may also be appropriate from time to time, including wholesale and retail repurchase agreements, large certificates of deposit, and the brokered CD market. The primary sources of funds are deposits, which totaled $14.87 billion at March 31, 2026. The primary sources of non-deposit funds are customer repurchase agreements, FHLB and FRB term borrowings and overnight advances. At March 31, 2026, there were $201.0 million of customer repurchase agreements, $438.1 million of FHLB term borrowings outstanding, and no overnight borrowings. ​ The Company’s primary sources of available liquidity include unrestricted cash and cash equivalents, borrowing capacity at the FHLB and FRB, as well as net unpledged investment securities that could be sold, subject to market conditions, or used to collateralize additional funding. Table 13 below details the available sources of liquidity at March 31, 2026. In addition, there was $75.0 million available in unsecured lines of credit with correspondent banks at March 31, 2026. The Company’s sources of immediately available liquidity of $6.83 billion as of March 31, 2026 represent approximately 248% of the Company’s estimated uninsured deposits (deposits in excess of FDIC limits), net of collateralized and intercompany deposits (“net estimated uninsured deposits”), estimated to be approximately $2.76 billion. ​ 56 Table of Contents Table 13: Sources of Liquidity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ ​ ​ December 31, ​ ​ ​ ​ March 31, ​ (000's omitted) ​ 2026 ​ 2025 ​ ​ 2025 Unrestricted cash and cash equivalents ​ $ 557,413 ​ $ 286,995 ​ $ 512,911 ​ FHLB borrowing capacity ​ 1,626,602 ​ 1,576,124 ​ ​ 1,336,752 ​ FRB borrowing capacity ​ 2,888,239 ​ 2,776,607 ​ ​ 2,689,201 ​ Net unpledged investment securities ​ 1,761,908 ​ 2,177,896 ​ ​ 1,398,682 ​ Total sources of liquidity ​ $ 6,834,162 ​ $ 6,817,622 ​ $ 5,937,546 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net estimated uninsured deposits ​ $ 2,759,769 ​ $ 2,739,971 ​ $ 2,339,458 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total sources of liquidity/net estimated uninsured deposits ​ 248 % 249 % ​ 254 % ​ To measure intermediate risk over the next twelve months, the Company reviews a sources and uses projection. As of March 31, 2026, there is sufficient liquidity available during the next year to cover projected cash outflows. In addition, stress tests on the cash flows are performed for various scenarios ranging from high probability events with a low impact on the liquidity position to low probability events with a high impact on the liquidity position. The results of the stress tests as of March 31, 2026 indicate the Company has sufficient sources of liquidity for the next year in all simulated stressed scenarios. ​ To measure longer-term liquidity, a baseline projection of growth in interest-earning assets and interest-bearing liabilities for five years is made to reflect how liquidity levels could change over time. This five-year measure reflects ample liquidity for loan and other asset growth over the next five years. ​ The possibility of a funding crisis exists at all financial institutions. A funding crisis would most likely result from a shock to the financial system which disrupts orderly short-term funding operations or from a significant tightening of monetary policy that limits the national money supply. Accordingly, management has addressed this issue by formulating a Liquidity Contingency Plan, which has been reviewed and approved by both the Board and the Company’s ALCO. The plan addresses the actions that the Company would take in response to both a short-term and long-term funding crisis. Triggers within the plan and liquidity risk monitor are not by themselves definitive indicators of insufficient liquidity, but rather a mechanism for management to monitor conditions and possibly provide advance warning which could avert or reduce the impact of a crisis. Liquidity triggers are set based on a variety of factors, including Company history, trends, and current operating performance, industry observations, and, as warranted, changes in internal and external economic factors. Indicators include: core liquidity and funding needs such as the core basic surplus, unencumbered securities to average assets, and free FHLB and FRB loan collateral to average assets; heightened funding needs indicators such as average loans to average deposits, average governmental and nongovernmental deposits to total funding, and average borrowings to total funding; capital at risk indicators including regulatory ratios; asset quality indicators; and decrease in funds availability indicators which are a combination of internal and external factors such as increased restrictions on borrowing or downturns in the credit market. The Company has established three risk levels for these liquidity triggers that inform the response based on the severity of the circumstances. Responses vary from an assessment of possible funding deficiencies with no impact on normal business operations to immediate action required due to impending funding problems. For more information regarding the risk factor associated with the possibility of a funding crisis, refer to the discussion under the heading “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025 as filed with the SEC on February 27, 2026. 57 Table of Contents Forward-Looking Statements This report contains comments or information that constitute forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995), which involve significant risks and uncertainties. Forward-looking statements often use words such as “anticipate,” “could,” “target,” “expect,” “estimate,” “intend,” “plan,” “goal,” “forecast,” “believe,” or other words of similar meaning. These statements are based on the current beliefs and expectations of the Company’s management and are subject to significant risks and uncertainties. Actual results may differ materially from the results discussed in the forward-looking statements. Moreover, the Company’s plans, objectives and intentions are subject to change based on various factors (some of which are beyond the Company’s control). Factors that could cause actual results to differ from those discussed in the forward-looking statements include: (1) adverse developments in the banking industry related to bank failures and the potential impact of such developments on customer confidence and regulatory responses to these developments; (2) current and future economic and market conditions, including the effects of changes in housing or vehicle prices, higher unemployment rates, disruptions in the commercial real estate market, labor shortages, supply chain disruption, inability to obtain raw materials and supplies, U.S. fiscal debt, budget and tax matters, geopolitical matters and conflicts, the effects of announced or future tariff increases, changes in global trade policies, and any changes in global economic growth; (3) the effect of, and changes in, monetary and fiscal policies and laws, including future changes in Federal and state statutory income tax rates and interest rate and other policy actions of the Board of Governors of the Federal Reserve System; (4) the effect of changes in the level of checking or savings account deposits on the Company’s funding costs and net interest margin including the possibility of a sudden withdrawal of the Company’s deposits due to rapid spread of information or disinformation regarding the Company’s well-being; (5) future provisions for credit losses on loans and debt securities; (6) changes in nonperforming assets; (7) the effect of a fall in stock market or bond prices on the Company’s fee income businesses, including its employee benefit services, wealth management, and insurance businesses; (8) risks related to credit quality; (9) inflation, interest rate, liquidity, market and monetary fluctuations; (10) the strength of the U.S. economy in general and the strength of the local economies where the Company conducts its business; (11) the timely development of new products and services and customer perception of the overall value thereof (including features, pricing and quality) compared to competing products and services; (12) changes in consumer spending, borrowing and savings habits; (13) technological changes and implementation and financial risks associated with transitioning to new technology-based systems involving large multi-year contracts; (14) the ability of the Company to maintain the security, including cybersecurity, of its financial, accounting, technology, data processing and other operating systems, facilities and data, including customer data; (15) effectiveness of the Company’s risk management processes and procedures, reliance on models which may be inaccurate or misinterpreted, the Company’s ability to manage its credit or interest rate risk, the sufficiency of its allowance for credit losses and the accuracy of the assumptions or estimates used in preparing the Company’s financial statements and disclosures; (16) failure of third parties to provide various services that are important to the Company’s operations; (17) any acquisitions or mergers that might be considered or consummated by the Company and the costs and factors associated therewith, including differences in the actual financial results of the acquisition or merger compared to expectations and the realization of anticipated cost savings and revenue enhancements; (18) the ability to maintain and increase market share and control expenses; (19) the nature, timing and effect of changes in banking regulations or other regulatory or legislative requirements affecting the respective businesses of the Company and its subsidiaries, including changes in laws and regulations concerning taxes, accounting, banking, service fees, risk management, securities, capital requirements and other aspects of the financial services industry; (20) changes in the Company’s organization, compensation and benefit plans and in the availability of, and compensation levels for, employees in its geographic markets; (21) the outcome of pending or future litigation and government proceedings; (22) the effect of opening new branches to expand the Company’s geographic footprint, including the cost associated with opening and operating the branches and the uncertainty surrounding their success including the ability to meet expectations for future deposit and loan levels and commensurate revenues; (23) the effects of natural disasters could create economic and financial disruption; (24) the effects from changes in governmental leadership which expose the Company and its customers to a variety of political, economic, and regulatory risks, including the risk of changes in laws (including labor, trade, tax and other laws) and the potential for disruption in governmental agencies, services provided by the government, funding of government sponsored projects, and changes in the domestic political environment; (25) the effect of total or partial governmental shutdowns; (26) material differences in the actual financial results of investment activities compared with the Company's initial expectations, including the growth of the Insurtech market; (27) other risk factors outlined in the Company’s filings with the SEC from time to time; and (28) the success of the Company at managing the risks of the foregoing. ​ The foregoing list of important factors is not all-inclusive. For more information about factors that could cause actual results to differ materially from the Company’s expectations, refer to the discussion under the heading “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025 as filed with the SEC on February 27, 2026. Any forward-looking statements speak only as of the date on which they are made and the Company does not undertake any obligation to update any forward-looking statement, whether written or oral, to reflect events or circumstances after the date on which such statement is made. If the Company does update or correct one or more forward-looking statements, investors and others should not conclude that the Company will make additional updates or corrections with respect thereto or with respect to other forward-looking statements. 58 Table of Contents Reconciliation of GAAP to Non-GAAP Measures ​ Table 14: GAAP to Non-GAAP Reconciliations ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ ​ ​ March 31, (000’s omitted) ​ ​ ​ ​ 2026 ​ ​ ​ ​ 2025 Operating pre-tax, pre-provision net revenue (non-GAAP) ​ ​ ​ ​ ​ ​ Net income (GAAP) ​ $ 57,218 ​ $ 49,614 Income taxes ​ 17,396 ​ ​ 14,654 Income before income taxes ​ ​ 74,614 ​ ​ 64,268 Provision for credit losses ​ ​ 5,636 ​ ​ 6,690 Pre-tax, pre-provision net revenue (non-GAAP) ​ ​ 80,250 ​ ​ 70,958 Acquisition expenses ​ ​ 433 ​ ​ 1 Litigation accrual ​ ​ 0 ​ ​ (50) Unrealized loss (gain) on equity securities ​ ​ 401 ​ ​ (245) Amortization of intangible assets ​ ​ 4,246 ​ ​ 3,482 Operating pre-tax, pre-provision net revenue (non-GAAP) ​ $ 85,330 ​ $ 74,146 ​ ​ ​ ​ ​ ​ ​ Operating pre-tax, pre-provision net revenue per share (non-GAAP) ​ ​ ​ ​ ​ ​ Diluted earnings per share (GAAP) ​ $ 1.08 ​ $ 0.93 Income taxes ​ ​ 0.33 ​ ​ 0.28 Income before income taxes ​ ​ 1.41 ​ ​ 1.21 Provision for credit losses ​ ​ 0.11 ​ ​ 0.12 Pre-tax, pre-provision net revenue per share (non-GAAP) ​ ​ 1.52 ​ ​ 1.33 Acquisition expenses ​ ​ 0.01 ​ ​ 0.00 Litigation accrual ​ ​ 0.00 ​ ​ 0.00 Unrealized loss (gain) on equity securities ​ ​ 0.00 ​ ​ 0.00 Amortization of intangible assets ​ ​ 0.08 ​ ​ 0.07 Operating pre-tax, pre-provision net revenue per share (non-GAAP) ​ $ 1.61 ​ $ 1.40 ​ ​ ​ ​ ​ ​ ​ Operating net income (non-GAAP) ​ ​ ​ ​ ​ ​ Net income (GAAP) ​ $ 57,218 ​ $ 49,614 Acquisition expenses ​ ​ 433 ​ ​ 1 Tax effect of acquisition expenses ​ ​ (99) ​ ​ 0 Subtotal (non-GAAP) ​ ​ 57,552 ​ ​ 49,615 Litigation accrual ​ ​ 0 ​ ​ (50) Tax effect of litigation accrual ​ ​ 0 ​ ​ 12 Subtotal (non-GAAP) ​ ​ 57,552 ​ ​ 49,577 Unrealized loss (gain) on equity securities ​ ​ 401 ​ ​ (245) Tax effect of unrealized loss (gain) on equity securities ​ ​ (91) ​ ​ 57 Subtotal (non-GAAP) ​ ​ 57,862 ​ ​ 49,389 Amortization of intangible assets ​ ​ 4,246 ​ ​ 3,482 Tax effect of amortization of intangible assets ​ ​ (967) ​ ​ (804) Operating net income (non-GAAP) ​ $ 61,141 ​ $ 52,067 ​ ​ ​ ​ ​ ​ ​ ​ ​ 59 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ ​ ​ March 31, ​ (000's omitted) 2026 ​ ​ ​ ​ 2025 ​ Operating diluted earnings per share (non-GAAP) ​ ​ ​ ​ ​ ​ ​ Diluted earnings per share (GAAP) $ 1.08 ​ ​ $ 0.93 ​ Acquisition expenses ​ 0.01 ​ ​ ​ 0.00 ​ Tax effect of acquisition expenses ​ 0.00 ​ ​ ​ 0.00 ​ Subtotal (non-GAAP) ​ 1.09 ​ ​ ​ 0.93 ​ Litigation accrual ​ 0.00 ​ ​ ​ 0.00 ​ Tax effect of litigation accrual ​ 0.00 ​ ​ ​ 0.00 ​ Subtotal (non-GAAP) ​ 1.09 ​ ​ ​ 0.93 ​ Unrealized loss (gain) on equity securities ​ 0.00 ​ ​ ​ 0.00 ​ Tax effect of unrealized loss (gain) on equity securities ​ 0.00 ​ ​ ​ 0.00 ​ Subtotal (non-GAAP) ​ 1.09 ​ ​ ​ 0.93 ​ Amortization of intangible assets ​ 0.08 ​ ​ ​ 0.07 ​ Tax effect of amortization of intangible assets ​ (0.02) ​ ​ ​ (0.02) ​ Operating diluted earnings per share (non-GAAP) $ 1.15 ​ ​ $ 0.98 ​ ​ ​ ​ ​ ​ ​ ​ ​ Return on assets ​ ​ ​ ​ ​ ​ ​ Net income (GAAP) $ 57,218 ​ ​ $ 49,614 ​ Average total assets ​ 17,468,804 ​ ​ ​ 16,439,357 ​ Return on assets (GAAP) ​ 1.33 % ​ ​ 1.22 % ​ ​ ​ ​ ​ ​ ​ ​ Operating return on assets (non-GAAP) ​ ​ ​ ​ ​ ​ ​ Operating net income (non-GAAP) $ 61,141 ​ ​ $ 52,067 ​ Average total assets ​ 17,468,804 ​ ​ ​ 16,439,357 ​ Operating return on assets (non-GAAP) ​ 1.42 % ​ ​ 1.28 % ​ ​ ​ ​ ​ ​ ​ ​ Return on equity ​ ​ ​ ​ ​ ​ ​ Net income (GAAP) $ 57,218 ​ ​ $ 49,614 ​ Average total equity ​ 2,016,141 ​ ​ ​ 1,783,646 ​ Return on equity (GAAP) ​ 11.51 % ​ ​ 11.28 % ​ ​ ​ ​ ​ ​ ​ ​ Operating return on equity (non-GAAP) ​ ​ ​ ​ ​ ​ ​ Operating net income (non-GAAP) $ 61,141 ​ ​ $ 52,067 ​ Average total equity ​ 2,016,141 ​ ​ ​ 1,783,646 ​ Operating return on equity (non-GAAP) ​ 12.30 % ​ ​ 11.84 % ​ ​ ​ ​ ​ ​ ​ ​ Net interest margin ​ ​ ​ ​ ​ ​ ​ Net interest income $ 134,712 ​ ​ $ 120,212 ​ Total average interest-earning assets ​ 15,940,176 ​ ​ ​ 15,165,301 ​ Net interest margin ​ 3.43 % ​ ​ 3.21 % ​ ​ ​ ​ ​ ​ ​ ​ Net interest margin (FTE) (non-GAAP) ​ ​ ​ ​ ​ ​ ​ Net interest income $ 134,712 ​ ​ $ 120,212 ​ Fully tax-equivalent adjustment (non-GAAP) ​ 850 ​ ​ ​ 894 ​ Fully tax-equivalent net interest income (non-GAAP) ​ 135,562 ​ ​ ​ 121,106 ​ Total average interest-earning assets ​ 15,940,176 ​ ​ ​ 15,165,301 ​ Net interest margin (FTE) (non-GAAP) ​ 3.45 % ​ ​ 3.24 % ​ ​ ​ ​ ​ ​ ​ 60 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ March 31, ​ (000’s omitted) 2026 ​ ​ ​ ​ 2025 ​ ​ ​ Operating noninterest revenues (non-GAAP) ​ ​ ​ ​ ​ ​ ​ Noninterest revenues (GAAP) $ 78,574 ​ ​ $ 76,036 ​ Unrealized loss (gain) on equity securities ​ 401 ​ ​ ​ (245) ​ Total operating noninterest revenues (non-GAAP) $ 78,975 ​ ​ $ 75,791 ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating noninterest expenses (non-GAAP) ​ ​ ​ ​ ​ ​ ​ Noninterest expenses (GAAP) $ 133,036 ​ ​ $ 125,290 ​ Acquisition expenses ​ (433) ​ ​ ​ (1) ​ Litigation accrual ​ 0 ​ ​ ​ 50 ​ Amortization of intangible assets ​ (4,246) ​ ​ ​ (3,482) ​ Total operating noninterest expenses (non-GAAP) $ 128,357 ​ ​ $ 121,857 ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating revenues (non-GAAP) ​ ​ ​ ​ ​ ​ ​ Net interest income (GAAP) $ 134,712 ​ ​ $ 120,212 ​ Noninterest revenues (GAAP) ​ 78,574 ​ ​ ​ 76,036 ​ Total revenues (GAAP) ​ 213,286 ​ ​ 196,248 ​ Unrealized loss (gain) on equity securities ​ 401 ​ ​ ​ (245) ​ Total operating revenues (non-GAAP) $ 213,687 ​ ​ $ 196,003 ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest revenues/total revenues ​ ​ ​ ​ ​ ​ ​ Total noninterest revenues (GAAP) – numerator $ 78,574 ​ ​ $ 76,036 ​ Total revenues (GAAP) – denominator 213,286 ​ ​ ​ 196,248 ​ Noninterest revenues/total revenues (GAAP) ​ 36.8 % ​ ​ 38.7 % ​ ​ ​ ​ ​ ​ ​ ​ Operating noninterest revenues/operating revenues (FTE) (non-GAAP) ​ ​ ​ ​ ​ ​ ​ Total operating noninterest revenues (non-GAAP) – numerator $ 78,975 ​ ​ $ 75,791 ​ Total operating revenues (non-GAAP) ​ 213,687 ​ ​ ​ 196,003 ​ Fully tax-equivalent adjustment (non-GAAP) ​ 850 ​ ​ ​ 894 ​ Total operating revenues (FTE) (non-GAAP) – denominator ​ 214,537 ​ ​ ​ 196,897 ​ Operating noninterest revenues/operating revenues (FTE) (non-GAAP) ​ 36.8 % ​ ​ 38.5 % ​ ​ ​ ​ ​ ​ ​ ​ Efficiency ratio (GAAP) ​ ​ ​ ​ ​ ​ ​ Total noninterest expenses (GAAP) – numerator $ 133,036 ​ ​ $ 125,290 ​ Total revenues (GAAP) – denominator 213,286 ​ ​ 196,248 ​ Efficiency ratio (GAAP) ​ 62.4 % ​ ​ 63.8 % ​ ​ ​ ​ ​ ​ ​ ​ Operating efficiency ratio (non-GAAP) ​ ​ ​ ​ ​ Total operating noninterest expenses (non-GAAP) – numerator $ 128,357 ​ ​ $ 121,857 ​ Total operating revenues (FTE) (non-GAAP) – denominator 214,537 ​ ​ 196,897 ​ Operating efficiency ratio (non-GAAP) ​ 59.8 % ​ ​ 61.9 % ​ ​ ​ ​ ​ ​ ​ ​ Return on tangible equity (non-GAAP) ​ ​ ​ ​ ​ ​ ​ Net income (GAAP) $ 57,218 ​ ​ $ 49,614 ​ Amortization of intangible assets, net of tax ​ 3,279 ​ ​ ​ 2,678 ​ Net income, excluding amortization of intangible assets (non-GAAP) ​ 60,497 ​ ​ ​ 52,292 ​ Average shareholders’ equity ​ 2,016,141 ​ ​ ​ 1,783,646 ​ Average goodwill and intangible assets, net ​ (942,701) ​ ​ ​ (900,530) ​ Average deferred taxes on goodwill and intangible assets, net ​ 43,829 ​ ​ ​ 44,631 ​ Average tangible common equity (non-GAAP) ​ 1,117,269 ​ ​ ​ 927,747 ​ Return on tangible equity (non-GAAP) ​ 21.96 % ​ ​ 22.86 % ​ ​ ​ ​ ​ ​ ​ ​ Operating return on tangible equity (non-GAAP) ​ ​ ​ ​ ​ ​ ​ Operating net income (non-GAAP) $ 61,141 ​ ​ $ 52,067 ​ Average tangible common equity (non-GAAP) 1,117,269 ​ ​ 927,747 ​ Operating return on tangible equity (non-GAAP) ​ 22.19 % ​ ​ 22.76 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 61 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ ​ ​ ​ December 31, ​ ​ ​ ​ March 31, ​ (000’s omitted) ​ ​ ​ 2026 ​ ​ ​ ​ 2025 ​ ​ ​ ​ 2025 Total tangible assets (non-GAAP) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets (GAAP) ​ $ 17,744,859 ​ ​ $ 17,303,296 ​ ​ $ 16,764,296 ​ Goodwill and intangible assets, net ​ (943,314) ​ ​ ​ (942,716) ​ ​ ​ (900,332) ​ Deferred taxes on goodwill and intangible assets, net ​ 43,752 ​ ​ ​ 43,905 ​ ​ ​ 44,644 ​ Total tangible assets (non-GAAP) ​ $ 16,845,297 ​ ​ $ 16,404,485 ​ ​ $ 15,908,608 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total tangible common equity (non-GAAP) ​ ​ ​ ​ ​ ​ ​ ​ ​ Shareholders’ equity (GAAP) ​ $ 2,023,992 ​ ​ $ 2,006,034 ​ ​ $ 1,834,075 ​ Goodwill and intangible assets, net ​ (943,314) ​ ​ ​ (942,716) ​ ​ ​ (900,332) ​ Deferred taxes on goodwill and intangible assets, net ​ 43,752 ​ ​ ​ 43,905 ​ ​ ​ 44,644 ​ Total tangible common equity (non-GAAP) ​ $ 1,124,430 ​ ​ $ 1,107,223 ​ ​ $ 978,387 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Shareholders’ equity-to-assets ratio at quarter end ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total shareholders' equity (GAAP) - numerator ​ $ 2,023,992 ​ ​ $ 2,006,034 ​ ​ $ 1,834,075 ​ Total assets (GAAP) - denominator ​ ​ 17,744,859 ​ ​ ​ 17,303,296 ​ ​ ​ 16,764,296 ​ Shareholders’ equity-to-assets ratio at quarter (GAAP) ​ ​ 11.41 % ​ ​ 11.59 % ​ ​ 10.94 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tangible equity-to-tangible assets ratio at quarter end (non-GAAP) ​ ​ ​ ​ ​ ​ ​ ​ ​ Total tangible common equity (non-GAAP) - numerator ​ $ 1,124,430 ​ ​ $ 1,107,223 ​ ​ $ 978,387 ​ Total tangible assets (non-GAAP) - denominator ​ ​ 16,845,297 ​ ​ ​ 16,404,485 ​ ​ ​ 15,908,608 ​ Tangible equity-to-tangible assets ratio at quarter end (non-GAAP) ​ 6.68 % ​ 6.75 % ​ 6.15 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Book value (GAAP) ​ ​ ​ ​ ​ ​ ​ ​ ​ Total shareholders’ equity (GAAP) – numerator ​ $ 2,023,992 ​ ​ $ 2,006,034 ​ ​ $ 1,834,075 ​ Period end common shares outstanding – denominator ​ ​ 52,537 ​ ​ ​ 52,682 ​ ​ ​ 52,836 ​ Book value (GAAP) ​ $ 38.53 ​ ​ $ 38.08 ​ ​ $ 34.71 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tangible book value (non-GAAP) ​ ​ ​ ​ ​ ​ ​ ​ ​ Total tangible common equity (non-GAAP) – numerator ​ $ 1,124,430 ​ ​ $ 1,107,223 ​ ​ $ 978,387 ​ Period end common shares outstanding – denominator ​ ​ 52,537 ​ ​ ​ 52,682 ​ ​ ​ 52,836 ​ Tangible book value (non-GAAP) ​ $ 21.40 ​ ​ $ 21.02 ​ ​ $ 18.52 ​ ​ ​ ​