Regional banking company Community Financial System (NYSE:CBU) fell short of the market’s revenue expectations in Q2 CY2025, but sales rose 8.4% year on year to $199.3 million. Its non-GAAP profit of $1.04 per share was 3% above analysts’ consensus estimates.
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Community Bank (CBU) Q2 CY2025 Highlights:
- Net Interest Income: $124.7 million vs analyst estimates of $124.7 million (14% year-on-year growth, in line)
- Net Interest Margin: 3.3% vs analyst estimates of 3.3% (23 basis point year-on-year increase, in line)
- Revenue: $199.3 million vs analyst estimates of $201.4 million (8.4% year-on-year growth, 1% miss)
- Efficiency Ratio: 65% vs analyst estimates of 62.5% (2.5 percentage point miss)
- Adjusted EPS: $1.04 vs analyst estimates of $1.01 (3% beat)
- Market Capitalization: $3.06 billion
Company Overview
Tracing its roots back to 1866 in upstate New York, Community Financial System (NYSE:CBU) is a financial holding company that provides banking, employee benefits, wealth management, and insurance services to retail, commercial, and municipal customers.
Sales Growth
From lending activities to service fees, most banks build their revenue model around two income sources. Interest rate spreads between loans and deposits create the first stream, with the second coming from charges on everything from basic bank accounts to complex investment banking transactions.
Luckily, Community Bank’s revenue grew at a decent 5.7% compounded annual growth rate over the last five years. Its growth was slightly above the average bank company and shows its offerings resonate with customers.
Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. Community Bank’s annualized revenue growth of 9.5% over the last two years is above its five-year trend, suggesting its demand recently accelerated. 
Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.
This quarter, Community Bank’s revenue grew by 8.4% year on year to $199.3 million, missing Wall Street’s estimates.
Net interest income made up 62.5% of the company’s total revenue during the last five years, meaning lending operations are Community Bank’s largest source of revenue.
Markets consistently prioritize net interest income growth over fee-based revenue, recognizing its superior quality and recurring nature compared to the more unpredictable non-interest income streams.
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Tangible Book Value Per Share (TBVPS)
Banks profit by intermediating between depositors and borrowers, making them fundamentally balance sheet-driven enterprises. Market participants emphasize balance sheet quality and sustained book value growth when evaluating these institutions.
This explains why tangible book value per share (TBVPS) stands as the premier banking metric. TBVPS strips away questionable intangible assets, revealing concrete per-share net worth that investors can trust. Traditional metrics like EPS are helpful but face distortion from M&A activity and loan loss accounting rules.
Community Bank’s TBVPS declined at a 3.3% annual clip over the last five years. However, TBVPS growth has accelerated recently, growing by 20.6% annually over the last two years from $13.37 to $19.46 per share.
Over the next 12 months, Consensus estimates call for Community Bank’s TBVPS to grow by 13.5% to $22.10, top-notch growth rate.
Key Takeaways from Community Bank’s Q2 Results
We enjoyed seeing Community Bank beat analysts’ tangible book value per share expectations this quarter. On the other hand, its revenue slightly missed and its EPS was in line with Wall Street’s estimates. Overall, this was a weaker quarter. The stock remained flat at $57.92 immediately following the results.
So do we think Community Bank is an attractive buy at the current price? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free.