# Community Financial System (Community Bank, N.A.): AI strategy

Source: https://www.bankingnewsai.com/banks/community-bank-na
Last updated: Oct 13, 2026

*A diversified upstate New York bank, benefits administrator, wealth manager and insurer whose CEO counts 'more than a dozen people' on AI with a handful fully dedicated, sees the gains so far in application development, and discloses rising data-processing expense for 'artificial intelligence applications'.*

## How is Community Bank N.A. using AI?

Community Financial System, the Syracuse-area holding company for Community Bank, N.A., with about $17 billion of assets and four businesses spanning banking, employee-benefits administration, wealth management and insurance, is one of the few banks its size to give investors a headcount for AI. On the July 2026 call, president and CEO Dimitar Karaivanov said the company has 'more than a dozen people with a handful of them being kind of fully dedicated to just purely AI', with the others using AI to raise their output, that efficiency is the main opportunity 'at this stage in time', and that the transformational effects so far are 'on the app development side', as at most companies. The earnings release ties the spending to numbers: data-processing and communications expense up 17.9% year on year on 'customer-facing and back-office technologies, including artificial intelligence applications and other workflow efficiency initiatives'. The business delivered a fifth consecutive record quarter, with net income of $61.3 million, operating earnings of $1.16 per share, up 11.5%, a 1.40% operating return on assets, banking pre-tax earnings up 13.2%, employee benefits up 16.2%, wealth up 46.5% and insurance down 10.8%, while completing the $40 million acquisition of ClearPoint Federal Bank & Trust, a funeral-planning specialist folded into its wealth arm, after buying seven Santander branches in Pennsylvania for about $48 million and taking a $37.4 million minority stake in insurer Leap Holdings, its largest investment ever. For clients the bank publishes guides on leveraging AI and automation in small businesses. Community Bank, N.A. is a national bank supervised by the OCC.

## At a glance

| Field | Value |
| --- | --- |
| Lead bank | Community Bank, N.A. |
| Ticker | CBU |
| Headquarters | Canton, NY (holding company: Syracuse, NY) |
| Consolidated assets | $17,434 million |
| Federal Reserve rank | 99 |
| Charter | National bank (OCC) |

## Flagship platform: AI team inside a four-business diversified model

Community Financial System says its second-quarter 2026 data-processing and communications expense rose 17.9% year on year, reflecting 'continued investment in customer-facing and back-office technologies, including artificial intelligence applications and other workflow efficiency initiatives'. Asked on the call how much staff is dedicated to AI, president and CEO Dimitar Karaivanov described 'more than a dozen people with a handful of them being kind of fully dedicated to just purely AI', the rest augmenting their productivity with AI tools, with efficiency the main opportunity 'at this stage' and the transformational results so far 'more on the app development side'. The company runs four businesses, banking, employee benefits (Benefit Plans Administrative Services), wealth management (Nottingham) and insurance (OneGroup), and publishes small-business guides on AI and automation. No vendor, model inventory or budget has been disclosed. ([Yahoo Finance](https://finance.yahoo.com/quote/CBU/earnings/CBU-Q2-2026-earnings_call-657028.html), [Community Financial System (SEC filings)](https://www.sec.gov/Archives/edgar/data/723188/000110465926087355/tm2621422d1_ex99-1.htm), [Community Bank, N.A.](https://cbna.com/blog/business/your-business-and-ai))

## Key points

- AI staffing disclosed: 'more than a dozen people', a handful fully dedicated; gains so far in application development; efficiency the near-term goal.
- Data-processing expense up 17.9% year on year on customer-facing and back-office technology 'including artificial intelligence applications'.
- Fifth consecutive record quarter: net income $61.3 million; operating EPS $1.16 (+11.5%); operating ROA 1.40%.
- Diversified model: banking +13.2%, employee benefits +16.2%, wealth +46.5% pre-tax; insurance -10.8%.
- Deals: ClearPoint Federal Bank & Trust ($40 million, completed Q2 2026), seven Santander Pennsylvania branches (about $48 million), $37.4 million stake in Leap Holdings.
- Client education on AI and automation for small businesses.
- Automation saved more than 200,000 hours over three years (CEO, January 2026); AI has been in development for about two years, with management staying quiet on results until they show up in margins.
- 2025 10-K: enterprise AI and data governance frameworks overseen by the Management Risk Committee and IT Steering Committee, with the CISO jointly overseeing data and AI governance; machine learning and generative AI deployed in security monitoring; higher-risk AI keeps a human in the loop.
- AI applications named in the 10-Q data-processing expense discussion in every quarterly filing since Q1 2025 (+12.4% that quarter), through Q4 2025 (+11.6%), Q1 2026 (+10.8%) and Q2 2026 (+17.9%, which includes a one-time $0.6 million debit-card platform termination charge).
- 2026 proxy statement: the 2025 management incentive scorecard set five technology objectives, among them 65,000 hours of savings and 'customer artificial intelligence solutions for launch in 2026'; the company met four of the five.
- 2025 proxy statement: the 2024 incentive scorecard included five technology objectives, one of them to 'implement artificial intelligence solutions'; all five were achieved.
- Q2 2026 call: the CEO says the company has the same number of employees as at the start of 2026 despite ClearPoint and other add-ons, and expects to 'know much better in about six months' whether its transformational AI work is real.
- Spend: data-processing and communications expense was $19.7 million in Q2 2026 against $16.7 million a year earlier, and $37.6 million for the half against $32.8 million.
- Board: Jeffery J. Knauss, CEO of Arcovo AI (an AI workforce and workflow-automation company), and Savneet Singh are the directors who liaise with the Technology Committee; the board reviews policies covering 'artificial intelligence risk'.
- February 2026 investor presentation lists AI and generative chat solutions and robotic process automation among 2025 technology investments, alongside fraud prevention, a treasury-management solution and a digital escrow platform.

## Timeline

- Aug 7, 2026 — **Q2 2026 10-Q: AI applications again cited for data-processing growth** Data-processing and communications expense of $19.7 million, up 17.9% year on year. ([Community Financial System (SEC filings)](https://www.sec.gov/Archives/edgar/data/723188/000110465926092717/cbu-20260630x10q.htm), [Community Financial System (SEC filings)](https://www.sec.gov/Archives/edgar/data/723188/000110465926087355/tm2621422d1_ex99-1.htm))
- Jul 28, 2026 — **Q2 2026 call: headcount flat, AI impact to be known in about six months** The CEO says the company has the same number of employees as at the start of the year before the ClearPoint deal and other add-ons, that its diversified structure lets it experiment outside the bank, that he will know much better in about six months whether transformational projects are working, and that margin effects might follow about six months later; the release adds a $0.6 million debit-card platform termination charge to data-processing expense. ([Yahoo Finance](https://finance.yahoo.com/quote/CBU/earnings/CBU-Q2-2026-earnings_call-657028.html), [Community Financial System (SEC filings)](https://www.sec.gov/Archives/edgar/data/723188/000110465926087355/tm2621422d1_ex99-1.htm))
- Jul 28, 2026 — **Second-quarter 2026 results: AI staffing and spending disclosed** Record quarter; more than a dozen people on AI; data-processing expense up 17.9%. ([Yahoo Finance](https://finance.yahoo.com/quote/CBU/earnings/CBU-Q2-2026-earnings_call-657028.html), [Community Financial System (SEC filings)](https://www.sec.gov/Archives/edgar/data/723188/000110465926087355/tm2621422d1_ex99-1.htm))
- May 8, 2026 — **Q1 2026 10-Q repeats AI applications in the expense discussion** Data-processing increases attributed to customer-facing and back-office technologies, including AI applications and other workflow efficiency initiatives. ([Community Financial System (SEC filings)](https://www.sec.gov/Archives/edgar/data/723188/000110465926057940/cbu-20260331x10q.htm))
- Apr 29, 2026 — **First-quarter 2026 call: two years into AI, results kept quiet** The company has explored AI for two years to scale without adding headcount; the CEO will stay quiet on outcomes until he can prove a transformational effect on margins. Data-processing expense rose 10.8% year on year, again citing AI applications. ([Moby (Yahoo Finance)](https://finance.yahoo.com/markets/stocks/articles/community-bank-system-inc-q1-164541601.html), [Community Financial System (SEC filings)](https://www.sec.gov/Archives/edgar/data/723188/000110465926050927/tm2613014d1_ex99-1.htm))
- Mar 27, 2026 — **2026 proxy: customer AI solution set as a 2026 launch objective** The 2025 incentive scorecard's five technology objectives included 65,000 hours of savings and development of customer AI solutions for launch in 2026; four of five were achieved. Director Jeffery J. Knauss, CEO of Arcovo AI, serves as a Technology Committee liaison. ([Community Financial System (SEC filings)](https://www.sec.gov/Archives/edgar/data/723188/000114036126011565/ny20064673x1_def14a.htm))
- Feb 27, 2026 — **2025 10-K: AI and data governance frameworks, AI in security operations** Enterprise-wide AI and data governance under the Management Risk Committee and IT Steering Committee; the CISO jointly oversees data and AI governance; machine learning and generative AI deployed for monitoring, event classification and threat detection; AI solutions formally approved and re-validated in proportion to risk. The risk factors flag the accuracy of AI outputs, rivals' larger AI budgets and attackers' use of AI deepfakes. ([Community Financial System (SEC filings)](https://www.sec.gov/Archives/edgar/data/723188/000110465926021651/cbu-20251231x10k.htm))
- Feb 11, 2026 — **February investor presentation lists AI and generative chat, RPA** The deck posted under an Item 7.01 8-K names AI and generative chat solutions and robotic process automation among 2025 technology investments, with fraud prevention technology, a treasury-management solution and a digital escrow platform; it also reports 88% of customers registered for digital banking. ([Community Financial System (SEC filings)](https://www.sec.gov/Archives/edgar/data/723188/000110465926013099/tm265898d1_8k.htm))
- Jan 27, 2026 — **Fourth-quarter 2025 call: 200,000 hours saved, AI a 2026 focus** The CEO names harnessing 'the investments and focus we have in AI and automation' a 2026 priority, citing more than 200,000 hours saved by automation over three years with headcount roughly flat; the release attributes an 11.6% rise in data-processing expense partly to AI applications, fraud and cybersecurity software and credit-administration software. ([MarketBeat (Yahoo Finance)](https://finance.yahoo.com/news/community-financial-system-q4-earnings-174045425.html), [Community Financial System (SEC filings)](https://www.sec.gov/Archives/edgar/data/723188/000110465926006834/tm264116d1_ex99-1.htm))
- Jan 16, 2026 — **ClearPoint Federal Bank & Trust acquisition agreed** $40 million cash; funeral-planning specialist to join Nottingham wealth unit. ([American Banker](https://americanbanker.com/news/upstate-ny-lender-to-buy-bank-with-funeral-planning-focus))
- Nov 6, 2025 — **Q3 2025 10-Q: data-processing expense up 20.3% on a core-provider renegotiation** Expense of $19.1 million, up $3.2 million, including $1.4 million of consulting on a banking core-system contract renegotiation expected to lower future processing costs, plus AI applications and fraud, cyber and credit software. ([Community Financial System (SEC filings)](https://www.sec.gov/Archives/edgar/data/723188/000110465925107791/cbu-20250930x10q.htm), [Community Financial System (SEC filings)](https://www.sec.gov/Archives/edgar/data/723188/000110465925101075/tm2529135d1_ex99-1.htm))
- Oct 21, 2025 — **Q3 2025 call: $100 million investment in facilities, talent and technology** The CEO frames expense discipline against a $100 million investment programme across all four businesses. ([Investing.com](https://investing.com/news/transcripts/earnings-call-transcript-community-bank-system-q3-2025-shows-steady-growth-93CH-4299717))
- Sep 17, 2025 — **$37.4 million stake in Leap Holdings** Largest investment ever; rental-housing insurer. ([American Banker](https://www.americanbanker.com/news/new-york-bank-doubles-down-on-insurance-with-big-investment))
- Aug 8, 2025 — **Q2 2025 10-Q: AI applications named with fraud, cyber and credit software** Data-processing expense of $16.7 million, up 9.3%; the 10-Q lists AI applications, customer payment fraud and cybersecurity risk management software, credit administration software and workflow modernisation. ([Community Financial System (SEC filings)](https://www.sec.gov/Archives/edgar/data/723188/000141057825001649/cbu-20250630x10q.htm), [Community Financial System (SEC filings)](https://www.sec.gov/Archives/edgar/data/723188/000110465925069506/tm2521368d1_ex99-1.htm))
- Jul 16, 2025 — **'How Automation is Empowering Small Businesses' guide** Client education on automation tools. ([Community Bank, N.A.](https://cbna.com/blog/business/automation-for-small-businesses))
- Jun 25, 2025 — **Seven Santander branches acquired in Pennsylvania** About $48 million; Allentown market. ([American Banker](https://americanbanker.com/news/santander-to-sell-7-branches-to-community-bank-in-syracuse))
- May 9, 2025 — **Q1 2025 10-Q: first filing to name AI in the expense discussion** Data-processing and communications expense rose $1.8 million, or 12.4%, with the 10-Q citing 'investments being made in the development of artificial intelligence applications' and fraud and cybersecurity technology. ([Community Financial System (SEC filings)](https://www.sec.gov/Archives/edgar/data/723188/000141057825001170/cbu-20250331x10q.htm), [Community Financial System (SEC filings)](https://www.sec.gov/Archives/edgar/data/723188/000110465925040800/tm2513425d1_ex99-1.htm))
- Mar 28, 2025 — **2025 proxy: 'implement artificial intelligence solutions' in the 2024 incentive scorecard** One of the Compensation Committee's five technology objectives for 2024, alongside strategic data plans, business-line dashboards, automation for cost savings and digital marketing; all five were achieved. ([Community Financial System (SEC filings)](https://www.sec.gov/Archives/edgar/data/723188/000114036125010845/ny20037448x1_def14a.htm))
- Feb 28, 2025 — **FY2024 10-K lists AI in regulatory and technology risk factors** The company says it or its third-party vendors may incorporate AI into processes, services or products, and that new laws on automated decision-making, AI and machine learning could add cost. ([Community Financial System (SEC filings)](https://www.sec.gov/Archives/edgar/data/723188/000141057825000247/cbu-20241231x10k.htm))
- Sep 26, 2024 — **Technology CEO joins the board** Savneet Singh, CEO of PAR Technology, becomes an independent director on the joint Risk Committee and one of the board's representatives to the technology committee; the CEO cites his 'deep immersion in the fintech ecosystem'. ([Community Financial System (Business Wire)](https://www.businesswire.com/news/home/20240926761343/en/Community-Financial-System-Inc.-Appoints-Savneet-Singh-as-New-Independent-Director))
- Aug 5, 2024 — **'Your Business and AI' small-business guide** Marketing, sales and operations uses explained. ([Community Bank, N.A.](https://cbna.com/blog/business/your-business-and-ai))

## Where AI runs

| Use case | What | Status | Detail | Sources |
| --- | --- | --- | --- | --- |
| [Generative & agentic AI](https://www.bankingnewsai.com/ai-regulation/by-use-case#generative-agentic-ai) | AI-assisted application development | In production | Where management sees the most transformational effect so far. | [Yahoo Finance](https://finance.yahoo.com/quote/CBU/earnings/CBU-Q2-2026-earnings_call-657028.html) |
| [AI governance (general)](https://www.bankingnewsai.com/ai-regulation/by-use-case#governance-general) | Dedicated AI team | In production | More than a dozen staff, a handful fully dedicated; efficiency focus. | [Yahoo Finance](https://finance.yahoo.com/quote/CBU/earnings/CBU-Q2-2026-earnings_call-657028.html) |
| [Third-party & vendor AI](https://www.bankingnewsai.com/ai-regulation/by-use-case#third-party-vendors) | Customer-facing and back-office AI applications | Rolling out | Funded through rising data-processing expense; debit-card platform conversion. | [Community Financial System (SEC filings)](https://www.sec.gov/Archives/edgar/data/723188/000110465926087355/tm2621422d1_ex99-1.htm) |
| [Customer-facing chatbots](https://www.bankingnewsai.com/ai-regulation/by-use-case#customer-chatbots) | Small-business AI and automation guidance | In production | Client education on AI tools. | [Community Bank, N.A.](https://cbna.com/blog/business/your-business-and-ai) |
| [Cybersecurity](https://www.bankingnewsai.com/ai-regulation/by-use-case#cybersecurity) | Machine learning and generative AI in security operations | In production | Deployed to enhance monitoring, automated classification of events and data, and threat detection and prioritisation, supporting faster triage, playbook-driven remediation and realistic simulation for control validation. | [Community Financial System (SEC filings)](https://www.sec.gov/Archives/edgar/data/723188/000110465926021651/cbu-20251231x10k.htm) |
| [Model risk management](https://www.bankingnewsai.com/ai-regulation/by-use-case#model-risk) | AI and data governance framework and AI risk factor | In production | AI solutions go through formal approval, validation and periodic re-validation proportional to their risk, with a human in the loop for higher-risk uses; the 10-K warns of 'biased or incorrect model outputs' and of uncertainty about the accuracy and relevance of AI outputs. | [Community Financial System (SEC filings)](https://www.sec.gov/Archives/edgar/data/723188/000110465926021651/cbu-20251231x10k.htm) |
| [AI governance (general)](https://www.bankingnewsai.com/ai-regulation/by-use-case#governance-general) | Enterprise automation programme | In production | More than 200,000 hours saved over three years, which management says helped keep headcount roughly flat while the business grew. | [MarketBeat (Yahoo Finance)](https://finance.yahoo.com/news/community-financial-system-q4-earnings-174045425.html) |
| [Customer-facing chatbots](https://www.bankingnewsai.com/ai-regulation/by-use-case#customer-chatbots) | Customer AI solution targeted for 2026 launch | Announced | The 2025 incentive scorecard included 'development of a customer artificial intelligence solutions for launch in 2026' among five technology objectives, of which the company met four; the proxy does not say which was missed, what the product is, or whether it has launched. The February 2026 investor deck lists AI and generative chat solutions among technology investments. | [Community Financial System (SEC filings)](https://www.sec.gov/Archives/edgar/data/723188/000114036126011565/ny20064673x1_def14a.htm), [Community Financial System (SEC filings)](https://www.sec.gov/Archives/edgar/data/723188/000110465926013099/tm265898d1_8k.htm) |
| [Generative & agentic AI](https://www.bankingnewsai.com/ai-regulation/by-use-case#generative-agentic-ai) | AI, generative chat and robotic process automation | Rolling out | Listed in the February 2026 investor presentation as 2025 technology investments, with fraud prevention technology, a treasury-management solution and a digital escrow platform. The CEO says the company runs more experimental AI work in its less-regulated non-bank businesses and will report impact on margins only once it is proven. | [Community Financial System (SEC filings)](https://www.sec.gov/Archives/edgar/data/723188/000110465926013099/tm265898d1_8k.htm), [Yahoo Finance](https://finance.yahoo.com/quote/CBU/earnings/CBU-Q2-2026-earnings_call-657028.html) |
| [Fraud detection](https://www.bankingnewsai.com/ai-regulation/by-use-case#fraud) | Customer payment-fraud and cybersecurity risk software | In production | The 2025 10-Qs attribute rising data-processing expense to software for customer payment fraud and cybersecurity risk management alongside AI applications; the filings do not say whether the fraud tools use machine learning. | [Community Financial System (SEC filings)](https://www.sec.gov/Archives/edgar/data/723188/000141057825001170/cbu-20250331x10q.htm), [Community Financial System (SEC filings)](https://www.sec.gov/Archives/edgar/data/723188/000110465925107791/cbu-20250930x10q.htm) |
| [Third-party & vendor AI](https://www.bankingnewsai.com/ai-regulation/by-use-case#third-party-vendors) | Core-system contract renegotiation and debit-card platform change | In production | A $1.4 million consulting cost in Q3 2025 for renegotiating the core banking system contract is expected to lower future processing costs; Q2 2026 expense includes a one-time $0.6 million early-termination charge for a debit-card processing platform conversion. The 10-K warns that vendors may embed AI in services the company uses. | [Community Financial System (SEC filings)](https://www.sec.gov/Archives/edgar/data/723188/000110465925101075/tm2529135d1_ex99-1.htm), [Community Financial System (SEC filings)](https://www.sec.gov/Archives/edgar/data/723188/000110465926087355/tm2621422d1_ex99-1.htm), [Community Financial System (SEC filings)](https://www.sec.gov/Archives/edgar/data/723188/000110465926021651/cbu-20251231x10k.htm) |
| [AI governance (general)](https://www.bankingnewsai.com/ai-regulation/by-use-case#governance-general) | AI objective in executive incentive scorecard and board risk oversight | In production | AI-related objectives sat in the management incentive scorecard for 2024 ('implement artificial intelligence solutions') and 2025 (customer AI solutions for 2026 launch). The board and its committees review policies covering 'artificial intelligence risk', and Directors Knauss and Singh act as liaisons to the Technology Committee. | [Community Financial System (SEC filings)](https://www.sec.gov/Archives/edgar/data/723188/000114036125010845/ny20037448x1_def14a.htm), [Community Financial System (SEC filings)](https://www.sec.gov/Archives/edgar/data/723188/000114036126011565/ny20064673x1_def14a.htm) |

## Disclosed numbers

| Measure | Value | As of | Sources |
| --- | --- | --- | --- |
| Q2 2026 net income / operating EPS | $61.3 million / $1.16 (+11.5%) | Jul 28, 2026 | [Community Financial System (SEC filings)](https://www.sec.gov/Archives/edgar/data/723188/000110465926087355/tm2621422d1_ex99-1.htm) |
| Data-processing and communications expense growth | +17.9% year on year | Jul 28, 2026 | [Community Financial System (SEC filings)](https://www.sec.gov/Archives/edgar/data/723188/000110465926087355/tm2621422d1_ex99-1.htm) |
| Staff working on AI | > 12, a handful fully dedicated | Jul 28, 2026 | [Yahoo Finance](https://finance.yahoo.com/quote/CBU/earnings/CBU-Q2-2026-earnings_call-657028.html) |
| Wealth management pre-tax earnings growth | +46.5% year on year | Jul 28, 2026 | [Yahoo Finance](https://finance.yahoo.com/quote/CBU/earnings/CBU-Q2-2026-earnings_call-657028.html) |
| Hours saved by automation over three years | > 200,000 | Jan 27, 2026 | [MarketBeat (Yahoo Finance)](https://finance.yahoo.com/news/community-financial-system-q4-earnings-174045425.html) |
| Q4 2025 data-processing and communications expense growth (AI among the drivers) | +$1.9 million / +11.6% year on year | Dec 31, 2025 | [Community Financial System (SEC filings)](https://www.sec.gov/Archives/edgar/data/723188/000110465926006834/tm264116d1_ex99-1.htm) |
| Q1 2026 data-processing and communications expense growth (AI among the drivers) | +$1.7 million / +10.8% year on year | Mar 31, 2026 | [Community Financial System (SEC filings)](https://www.sec.gov/Archives/edgar/data/723188/000110465926050927/tm2613014d1_ex99-1.htm) |
| Q2 2026 data-processing and communications expense | $19.7 million (Q2 2025: $16.7 million) | Jul 28, 2026 | [Community Financial System (SEC filings)](https://www.sec.gov/Archives/edgar/data/723188/000110465926087355/tm2621422d1_ex99-1.htm) |
| First-half 2026 data-processing and communications expense | $37.6 million (first half 2025: $32.8 million, +14.4%) | Jun 30, 2026 | [Community Financial System (SEC filings)](https://www.sec.gov/Archives/edgar/data/723188/000110465926087355/tm2621422d1_ex99-1.htm) |
| Q3 2025 data-processing and communications expense | $19.1 million, +$3.2 million / +20.3%, including a $1.4 million core-provider contract consulting cost | Sep 30, 2025 | [Community Financial System (SEC filings)](https://www.sec.gov/Archives/edgar/data/723188/000110465925101075/tm2529135d1_ex99-1.htm) |
| Q2 2026 total noninterest expense | $137.7 million, +$8.6 million / +6.7% year on year | Jul 28, 2026 | [Community Financial System (SEC filings)](https://www.sec.gov/Archives/edgar/data/723188/000110465926087355/tm2621422d1_ex99-1.htm) |
| 2026 core noninterest expense guidance | $550-555 million, +7% to 8% on 2025 | Jul 28, 2026 | [Yahoo Finance](https://finance.yahoo.com/quote/CBU/earnings/CBU-Q2-2026-earnings_call-657028.html) |
| 2025 incentive-plan technology objective: hours saved | 65,000 hours from information-technology initiatives | Mar 27, 2026 | [Community Financial System (SEC filings)](https://www.sec.gov/Archives/edgar/data/723188/000114036126011565/ny20064673x1_def14a.htm) |
| Employees by region (10-K, approximate) | 2,136 in New York, 312 in Pennsylvania, 323 in Vermont, Massachusetts and New Hampshire | Dec 31, 2025 | [Community Financial System (SEC filings)](https://www.sec.gov/Archives/edgar/data/723188/000110465926021651/cbu-20251231x10k.htm) |

## Quotes

> "I can think of it as more than a dozen people with a handful of them being kind of fully dedicated to just purely AI, essentially, the rest of them being augmented in multiple ways, their production levels through AI." — Dimitar A. Karaivanov, President and CEO, Jul 28, 2026 ([Yahoo Finance](https://finance.yahoo.com/quote/CBU/earnings/CBU-Q2-2026-earnings_call-657028.html))

> "Continued investment in customer-facing and back-office technologies, including artificial intelligence applications and other workflow efficiency initiatives." — Community Financial System, Second-quarter 2026 release, Jul 28, 2026 ([Community Financial System (SEC filings)](https://www.sec.gov/Archives/edgar/data/723188/000110465926087355/tm2621422d1_ex99-1.htm))

> "Beginning to harness more fully the investments and focus we have in AI and automation." — Dimitar A. Karaivanov, President and CEO, Jan 27, 2026 ([MarketBeat (Yahoo Finance)](https://finance.yahoo.com/news/community-financial-system-q4-earnings-174045425.html))

> "AI solutions are subject to formal approval, validation, and periodic re-validation proportional to their inherent risk; higher-risk applications retain a human-in-the-loop approach." — Community Financial System, 2025 Form 10-K, Feb 27, 2026 ([Community Financial System (SEC filings)](https://www.sec.gov/Archives/edgar/data/723188/000110465926021651/cbu-20251231x10k.htm))

> "The benefit of being a well-diversified company with different levels of regulation across different businesses is that it allows us to be much more experimental" — Dimitar A. Karaivanov, President and CEO, Jul 28, 2026 ([Yahoo Finance](https://finance.yahoo.com/quote/CBU/earnings/CBU-Q2-2026-earnings_call-657028.html))

> "I'm going to know much better in about six months if some of these transformational things are truly happening." — Dimitar A. Karaivanov, President and CEO, Jul 28, 2026 ([Yahoo Finance](https://finance.yahoo.com/quote/CBU/earnings/CBU-Q2-2026-earnings_call-657028.html))

> "customer artificial intelligence solutions for launch in 2026" — Community Financial System, 2026 proxy statement, 2025 incentive scorecard, Mar 27, 2026 ([Community Financial System (SEC filings)](https://www.sec.gov/Archives/edgar/data/723188/000114036126011565/ny20064673x1_def14a.htm))

> "We remain focused on expenses, even as we are making a $100 million investment in facilities, talent, and technology across all of our businesses." — Dimitar A. Karaivanov, President and CEO, Oct 21, 2025 ([Investing.com](https://investing.com/news/transcripts/earnings-call-transcript-community-bank-system-q3-2025-shows-steady-growth-93CH-4299717))

> "The Company or its third-party vendors may incorporate artificial intelligence technology into certain business processes, services, or products." — Community Financial System, 2025 Form 10-K, Feb 27, 2026 ([Community Financial System (SEC filings)](https://www.sec.gov/Archives/edgar/data/723188/000110465926021651/cbu-20251231x10k.htm))

## Who runs AI

- **Dimitar A. Karaivanov** — President and CEO ([Yahoo Finance](https://finance.yahoo.com/quote/CBU/earnings/CBU-Q2-2026-earnings_call-657028.html), [American Banker](https://www.americanbanker.com/news/new-york-bank-doubles-down-on-insurance-with-big-investment))
- **Marya Burgio Wlos** — EVP and Chief Financial Officer ([LinkedIn](https://www.linkedin.com/in/maryaburgio)) ([Yahoo Finance](https://finance.yahoo.com/quote/CBU/earnings/CBU-Q2-2026-earnings_call-657028.html))
- **Aaron Friot** — SVP, Chief Technology and Operations Officer (Chief Technology Officer as of the 2020 source below; operations added July 2022) ([LinkedIn](https://www.linkedin.com/in/aaron-friot-715382b9)) ([Community Bank, N.A.](https://cbna.com/blog/personal-finance/digital-wallets-and-how-to-build-one), [Yahoo Finance](https://finance.yahoo.com/quote/CBU/profile/))
- **Savneet Singh** — Independent director; board representative to the technology (IT Steering) committee ([Community Financial System (Business Wire)](https://www.businesswire.com/news/home/20240926761343/en/Community-Financial-System-Inc.-Appoints-Savneet-Singh-as-New-Independent-Director), [Community Financial System (SEC filings)](https://www.sec.gov/Archives/edgar/data/723188/000110465926021651/cbu-20251231x10k.htm))
- **Jeffery J. Knauss** — Independent director; CEO of Arcovo AI; liaison to the Technology Committee ([Community Financial System (SEC filings)](https://www.sec.gov/Archives/edgar/data/723188/000114036126011565/ny20064673x1_def14a.htm), [Community Financial System (SEC filings)](https://www.sec.gov/Archives/edgar/data/723188/000114036125010845/ny20037448x1_def14a.htm))

## Regulators it answers to

- [OCC](https://www.bankingnewsai.com/ai-regulation/occ) — Community Bank, N.A. is a national bank; OCC model-risk and gen-AI expectations govern its AI applications. See [OCC Bulletin 2026-13](https://www.bankingnewsai.com/ai-regulation/documents/occ-bulletin-2026-13), [OCC Semiannual Risk Perspective, Spring 2026](https://www.bankingnewsai.com/ai-regulation/documents/occ-semiannual-risk-perspective-spring-2026).
- [NY DFS](https://www.bankingnewsai.com/ai-regulation/ny-dfs) — Insurance and wealth subsidiaries in New York sit under DFS cyber rules and its AI-risk letter. See [23 NYCRR Part 500](https://www.bankingnewsai.com/ai-regulation/documents/ny-dfs-23-nycrr-part-500), [DFS AI Cybersecurity Industry Letter (Oct 2024)](https://www.bankingnewsai.com/ai-regulation/documents/ny-dfs-industry-letter-2024-10-16-ai-cyber-risks).
- [CFPB](https://www.bankingnewsai.com/ai-regulation/cfpb) — Consumer banking and benefits products carry UDAAP and adverse-action duties for automated decisions. See [ECOA / Regulation B adverse action (15 U.S.C. 1691(d); 12 CFR 1002.9)](https://www.bankingnewsai.com/ai-regulation/documents/cfpb-ecoa-regulation-b-adverse-action).

## What the record suggests

### Headcount disclosure is a model others should copy

Saying how many people work on AI, and where the gains are, is more informative than most banks' adjectives; pairing it with a use-case list would complete it.

### Four businesses mean four data sets

Benefits administration and insurance generate data most banks lack; the AI team's biggest lever is cross-business analytics.

### Expense growth needs a payback line

A 17.9% rise in data-processing cost attributed partly to AI invites the question of when it shows up in the efficiency ratio.

### Insurance underperformance is the test case

The one business falling short is where AI-driven pricing and retention analytics would be judged fastest.

## FAQ

### Does Community Bank, N.A. use AI?

Yes. Community Financial System says more than a dozen people work on AI, a handful fully dedicated, with the biggest effects so far in application development, and its second-quarter 2026 release attributes rising data-processing expense partly to artificial intelligence applications. No vendor or budget has been named.

### What businesses does Community Financial System run?

Four: banking through Community Bank, N.A., employee-benefits administration, wealth management through Nottingham, and insurance through OneGroup. In 2025 and 2026 it bought seven Santander branches in Pennsylvania, took a $37.4 million stake in insurer Leap Holdings and acquired ClearPoint Federal Bank & Trust for $40 million.

### How does Community Bank, N.A. govern AI?

Its 2025 10-K describes enterprise-wide AI and data governance frameworks with executive oversight from the Management Risk Committee and IT Steering Committee; the chief information security officer jointly oversees data and AI governance. AI solutions are formally approved, validated and periodically re-validated in proportion to their risk, and higher-risk applications keep a human in the loop. Two directors sit on the IT Steering Committee for their digital, technology and AI experience.

### Who leads AI at Community Bank, N.A.?

Community Financial System names no chief AI or data officer. President and CEO Dimitar Karaivanov speaks for the programme and says more than a dozen people work on AI, a handful full time. Aaron Friot, SVP and chief technology and operations officer, runs technology. The 10-K says the chief information security officer, who is not named, jointly oversees data and AI governance with the Management Risk Committee and IT Steering Committee. Directors Jeffery Knauss, CEO of Arcovo AI, and Savneet Singh liaise with the Technology Committee.

### How much does Community Financial System spend on technology and AI?

No AI budget is disclosed. Data-processing and communications expense was $19.7 million in the second quarter of 2026, up 17.9% from $16.7 million, and $37.6 million for the half, up from $32.8 million; the 10-Qs have named AI applications in that line since the first quarter of 2025, and the second quarter includes a one-time $0.6 million debit-card platform charge. The CEO called a $100 million programme for facilities, talent and technology in October 2025. 2026 core noninterest expense is guided to $550-555 million.

### What customer-facing AI is Community Bank, N.A. planning?

The 2026 proxy statement lists 'customer artificial intelligence solutions for launch in 2026' among five technology objectives in the 2025 incentive scorecard, of which four were met. The February 2026 investor deck lists AI and generative chat solutions among technology investments. The company has named no vendor, product or launch date. On the July 2026 call the CEO said the transformational gains so far are in application development, that other transformational projects are under way in some businesses, and that he will know their impact in about six months.

## Sources (28)

1. Your Business and AI: What You Need to Know — Community Bank, N.A., Aug 5, 2024. https://cbna.com/blog/business/your-business-and-ai
2. Santander to sell 7 branches to Community Bank in Syracuse — American Banker, Jun 25, 2025. https://americanbanker.com/news/santander-to-sell-7-branches-to-community-bank-in-syracuse
3. New York bank doubles down on insurance with big investment — American Banker, Sep 17, 2025. https://www.americanbanker.com/news/new-york-bank-doubles-down-on-insurance-with-big-investment
4. Upstate NY lender to buy bank with funeral-planning focus — American Banker, Jan 16, 2026. https://americanbanker.com/news/upstate-ny-lender-to-buy-bank-with-funeral-planning-focus
5. Community Financial System, Inc. Reports Second Quarter 2026 Results (Form 8-K, Exhibit 99.1) — Community Financial System (SEC filings), Jul 28, 2026. https://www.sec.gov/Archives/edgar/data/723188/000110465926087355/tm2621422d1_ex99-1.htm
6. Community Financial System, Inc (CBU) Q2 FY2026 earnings call transcript — Yahoo Finance, Jul 28, 2026. https://finance.yahoo.com/quote/CBU/earnings/CBU-Q2-2026-earnings_call-657028.html
7. How Automation is Empowering Small Businesses — Community Bank, N.A., Jul 16, 2025. https://cbna.com/blog/business/automation-for-small-businesses
8. How to Build a Digital Wallet — Community Bank, N.A., Jan 6, 2020. https://cbna.com/blog/personal-finance/digital-wallets-and-how-to-build-one
9. Community Financial System, Inc. Appoints Savneet Singh as New Independent Director — Community Financial System (Business Wire), Sep 26, 2024. https://www.businesswire.com/news/home/20240926761343/en/Community-Financial-System-Inc.-Appoints-Savneet-Singh-as-New-Independent-Director
10. Community Financial System Q4 Earnings Call Highlights — MarketBeat (Yahoo Finance), Jan 27, 2026. https://finance.yahoo.com/news/community-financial-system-q4-earnings-174045425.html
11. Community Financial System, Inc. Form 8-K, Exhibit 99.1: fourth quarter and full year 2025 results — Community Financial System (SEC filings), Jan 27, 2026. https://www.sec.gov/Archives/edgar/data/723188/000110465926006834/tm264116d1_ex99-1.htm
12. Community Financial System, Inc. Annual Report on Form 10-K for the fiscal year ended December 31, 2025 — Community Financial System (SEC filings), Feb 27, 2026. https://www.sec.gov/Archives/edgar/data/723188/000110465926021651/cbu-20251231x10k.htm
13. Community Bank System, Inc. Q1 2026 Earnings Call Summary — Moby (Yahoo Finance), Apr 29, 2026. https://finance.yahoo.com/markets/stocks/articles/community-bank-system-inc-q1-164541601.html
14. Community Financial System, Inc. Form 8-K, Exhibit 99.1: first quarter 2026 results — Community Financial System (SEC filings), Apr 29, 2026. https://www.sec.gov/Archives/edgar/data/723188/000110465926050927/tm2613014d1_ex99-1.htm
15. Community Financial System, Inc. (CBU) Company Profile & Facts — Yahoo Finance, Sep 24, 2026. https://finance.yahoo.com/quote/CBU/profile/
16. Community Financial System, Inc. Definitive Proxy Statement (DEF 14A) for the 2026 annual meeting — Community Financial System (SEC filings), Mar 27, 2026. https://www.sec.gov/Archives/edgar/data/723188/000114036126011565/ny20064673x1_def14a.htm
17. Community Financial System, Inc. Definitive Proxy Statement (DEF 14A) for the 2025 annual meeting — Community Financial System (SEC filings), Mar 28, 2025. https://www.sec.gov/Archives/edgar/data/723188/000114036125010845/ny20037448x1_def14a.htm
18. Community Financial System, Inc. Annual Report on Form 10-K for the fiscal year ended December 31, 2024 — Community Financial System (SEC filings), Feb 28, 2025. https://www.sec.gov/Archives/edgar/data/723188/000141057825000247/cbu-20241231x10k.htm
19. Community Financial System, Inc. Form 10-Q for the quarter ended March 31, 2025 — Community Financial System (SEC filings), May 9, 2025. https://www.sec.gov/Archives/edgar/data/723188/000141057825001170/cbu-20250331x10q.htm
20. Community Financial System, Inc. Form 10-Q for the quarter ended June 30, 2025 — Community Financial System (SEC filings), Aug 8, 2025. https://www.sec.gov/Archives/edgar/data/723188/000141057825001649/cbu-20250630x10q.htm
21. Community Financial System, Inc. Form 10-Q for the quarter ended September 30, 2025 — Community Financial System (SEC filings), Nov 6, 2025. https://www.sec.gov/Archives/edgar/data/723188/000110465925107791/cbu-20250930x10q.htm
22. Community Financial System, Inc. Form 10-Q for the quarter ended March 31, 2026 — Community Financial System (SEC filings), May 8, 2026. https://www.sec.gov/Archives/edgar/data/723188/000110465926057940/cbu-20260331x10q.htm
23. Community Financial System, Inc. Form 10-Q for the quarter ended June 30, 2026 — Community Financial System (SEC filings), Aug 7, 2026. https://www.sec.gov/Archives/edgar/data/723188/000110465926092717/cbu-20260630x10q.htm
24. Community Financial System, Inc. Form 8-K, Exhibit 99.1: first quarter 2025 results — Community Financial System (SEC filings), Apr 29, 2025. https://www.sec.gov/Archives/edgar/data/723188/000110465925040800/tm2513425d1_ex99-1.htm
25. Community Financial System, Inc. Form 8-K, Exhibit 99.1: second quarter 2025 results — Community Financial System (SEC filings), Jul 22, 2025. https://www.sec.gov/Archives/edgar/data/723188/000110465925069506/tm2521368d1_ex99-1.htm
26. Community Financial System, Inc. Form 8-K, Exhibit 99.1: third quarter 2025 results — Community Financial System (SEC filings), Oct 21, 2025. https://www.sec.gov/Archives/edgar/data/723188/000110465925101075/tm2529135d1_ex99-1.htm
27. Community Financial System, Inc. Form 8-K (Item 7.01): February 2026 investor presentation posted — Community Financial System (SEC filings), Feb 11, 2026. https://www.sec.gov/Archives/edgar/data/723188/000110465926013099/tm265898d1_8k.htm
28. Earnings call transcript: Community Bank System Q3 2025 shows steady growth — Investing.com, Oct 21, 2025. https://investing.com/news/transcripts/earnings-call-transcript-community-bank-system-q3-2025-shows-steady-growth-93CH-4299717

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