Community Bank’s third quarter results reflected continued revenue growth and operational discipline, with management crediting momentum across its four business units and ongoing market share gains. CEO Dimitar Karaivanov highlighted that a focus on diversified, subscription-like revenue streams—particularly in insurance, employee benefit services, and wealth management—drove quarterly performance. Management also pointed to successful capital deployment, including investments in talent, technology, and new facilities, as supporting both top-line growth and strong risk metrics. Non-interest revenue diversification and robust loan and deposit growth further contributed to the quarter’s performance.
Is now the time to buy CBU? Find out in our full research report (it’s free for active Edge members).
Community Bank (CBU) Q3 CY2025 Highlights:
- Revenue: $207.1 million vs analyst estimates of $207.4 million (9.6% year-on-year growth, in line)
- Adjusted EPS: $1.09 vs analyst estimates of $1.05 (4.1% beat)
- Adjusted Operating Income: $73.68 million vs analyst estimates of $76.1 million (35.6% margin, 3.2% miss)
- Market Capitalization: $3.02 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Community Bank’s Q3 Earnings Call
- Tyler Cacciatore (Stephens): Asked if the minority investment in Leap Holdings was a precursor to a larger deal. CEO Dimitar Karaivanov replied that while the team is optimistic about Leap's strategic fit, further investment depends on future developments, with limited financial impact expected near-term.
- Tyler Cacciatore (Stephens): Inquired about deposit cost differences between legacy branches and expansion markets. Karaivanov explained that strategies are consistent across regions, and de novo branches have minimal impact on overall deposit costs at present.
- Tyler Cacciatore (Stephens): Asked about spread compression in commercial real estate (CRE) lending. Karaivanov acknowledged aggressive promotional rates from competitors but maintained that Community Bank is not matching the lowest market rates, expecting some yield moderation.
- Steve Moss (Raymond James): Sought detail on loan growth pipeline and competitive conditions. Karaivanov stated commercial and mortgage pipelines are at record levels, with most growth expected from market share gains versus super-regional competitors.
- David Conrad (KBW): Requested outlook on investment portfolio yields and reinvestment strategy. Karaivanov clarified that cash flows from maturing treasuries will primarily be redeployed into loans, with the alternative being the paydown of higher-cost borrowings.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be closely monitoring (1) the integration and performance of the newly acquired Santander branches, (2) sustained market share gains and organic growth in both loans and deposits within the Northeast footprint, and (3) the impact of strategic investments in insurance and wealth management businesses. Additional focus will be placed on deposit cost trends and competitive dynamics in CRE lending.
Community Bank currently trades at $57.38, up from $56.05 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members).
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