DEF 14A of Community Financial System, Inc., Mar 28, 2025

DEF 14A of Community Financial System, Inc.

Filed Mar 28, 2025 · FY20240001140361-25-010845

Open on EDGAR

  1. DIRECTOR NOMINEE QUALIFICATIONS AND EXPERIENCE

    DIRECTOR NOMINEE QUALIFICATIONS AND EXPERIENCE In considering candidates for the Board, the Governance Committee and the Board consider the entirety of each candidate’s credentials. Factors considered include, but are not necessarily limited to, outstanding achievement in a candidate’s personal career; broad and relevant experience; integrity; sound and independent judgment; experience and knowledge of the business environment and markets in which the Company operates; business acumen; and willingness to devote adequate time to Board duties. The Governance Committee considers diversity in the context of the Board as a whole including gender, race, ethnicity, personal attributes, experience and background of Directors and Nominees to facilitate Board deliberations that reflect a broad range of perspectives. The Board believes that each Director should have an understanding of (i) the principal operational and financial objectives and plans and strategies of the Company, (ii) the results of operations and financial condition of the Company and of any significant subsidiaries or business segments, and (iii) the relative standing of the Company and our business segments in relation to our competitors. Prior to nominating an existing Director for re-election to the Board, the Board and the Governance Committee consider and review, among other relevant factors, the existing Director’s meeting attendance and performance, length of Board service, ability to meet regulatory independence requirements, and the experience, skills, and contributions that the Director brings to the composition of our Board as a whole. In selecting the current Director Nominees who serve on the Company’s Board, the Governance Committee considered each individual’s business experience set forth below and the foregoing qualifications. In addition, the Governance Committee considered each individual’s: experience and knowledge of the banking and financial services industry: knowledge of and standing in key geographic markets in which we operate: experience with the organization; knowledge of the organization’s business model and strategic plans; independence; compliance with regulatory standards; and special skills relevant to overall composition of the Board, including financial and accounting expertise, service with public companies, experience in digital technology, corporate responsibility matters, internal audit, information security, real estate, and commercial finance. The Governance Committee and the Board believe that each Director and Nominee brings his or her own particular expertise, knowledge and experience that provides the Board as a whole with the appropriate mix of skills, characteristics and attributes to work together and fulfill the Board’s oversight responsibilities to the Company’s Shareholders. The Company’s Bylaws and Governance Guidelines provide for, among other things, (i) a mandatory retirement age of 70, (ii) advance notice prior to serving on another public company board, and (iii) review of continued Board membership in the event of a significant change in the responsibilities or job position of a Director. The key qualifications, skills, experience and perspective that each Director Nominee brings to the Board are included in their individual biographies. The Board firmly believes that our highly-qualified Director Nominees provide the Board with a diverse complement of specific business skills, experience and perspective necessary to ensure effective oversight. The following biographies describe the Director’s age, position with the Company, when he or she started as a Director with the Company, business experience and other public company board service for the past five (5) years, and the experience and attributes held by the Director relevant to his or her qualifications to serve on the Board:

  2. DIRECTOR NOMINEE QUALIFICATIONS AND EXPERIENCE

    | Mark J. Bolus | Director Since: 2010 Age: 59 Committees: • Compensation (Chair) • Executive • Risk • Trust | Mark J. Bolus is the President and Chief Executive Officer of Bolus Motor Lines, Inc. and Bolus Freight Systems, Inc., a transportation company serving the Northeast, Midwest, and Mid-Atlantic regions of the United States from its headquarters in Scranton, Pennsylvania and has 30 years of management and business experience operating a freight transportation company in the Company’s market. Mr. Bolus is a seasoned Director with extensive management and business experience and provides the Board and Committees he serves with insight into the economic and business environment in Upstate New York and Northeast Pennsylvania, key geographic markets for the Company. Mr. Bolus also has considerable experience in real estate matters. |

  3. DIRECTOR NOMINEE QUALIFICATIONS AND EXPERIENCE

    | Neil E. Fesette | Director Since: 2010 Age: 59 Committees: • Executive (Chair) • Audit • Compensation • Risk | Neil E. Fesette is the President and Chief Executive Officer of Fesette Realty, LLC and Fesette Property Management, located in Plattsburgh, New York, specializing in residential and commercial brokerage, property management, and real estate investment, development and consultation. Mr. Fesette is also involved in the community and serves as a director of Champlain Valley Physicians Hospital and North Country Workforce Partnership, Inc. Mr. Fesette has extensive expertise in the real estate market in Upstate New York and provides the Board and the Committees he serves with insights into these key geographic markets where the Company operates its financial service and banking businesses. Northern New York and the Capital Region are important regions and Mr. Fesette’s knowledge regarding their economic development and areas of opportunity is a substantial benefit to the Board. Mr. Fesette also provides the Board with corporate governance and human capital and succession planning expertise developed over the course of his service on the Board. |

  4. DIRECTOR NOMINEE QUALIFICATIONS AND EXPERIENCE

    | Dimitar A. Karaivanov | Director Since: 2024 Age: 43 Committee: • Risk | Dimitar A. Karaivanov is the President and Chief Executive Officer (“CEO”) of the Company and the Bank since January 1, 2024. Mr. Karaivanov joined the Company in June 2021 and served as its Executive Vice President of Financial Services and Corporate Development and was responsible for the business and financial performance of three of the Company’s four business lines – employee benefit services, insurance services, and wealth management services. In October 2022, he was appointed Executive Vice President and Chief Operating Officer (“COO”), adding the Company’s banking business to his responsibilities. He has gained a full understanding of all areas of the Company’s operations through his service as the Company’s Executive Vice President of Financial Services and Corporate Development and COO. Prior to joining the Company, Mr. Karaivanov served as Managing Director in Lazard’s Financial Institutions Group from June 2018 through June 2021, and has extensive experience as an investment banker for banks, other financial institutions, and fintech companies at a number of leading financial services firms. Mr. Karaivanov holds an MBA degree from The Ohio State University Max M. Fisher College of Business. He is also a graduate of the American Bankers Association’s Stonier Graduate School of Banking. Mr. Karaivanov was appointed to the Board on January 1, 2024 in connection with his promotion to President and CEO. The Board believes that the President and CEO should be a member of the Board in order to provide the Board with insights on all aspects of the Company’s challenges, opportunities, and operations. In addition to his insights as the CEO, he brings extensive financial and business experience as an investment banker and provides the Board with in depth finance and mergers and acquisitions expertise. |

  5. DIRECTOR NOMINEE QUALIFICATIONS AND EXPERIENCE

    | Jeffery J. Knauss | Director Since: 2021 Age: 39 Committees: • Compensation • Governance • Risk | Jeffery J. Knauss is currently the co-founder and CEO of Arcovo AI, an AI automation agency specializing in workflow automation and AI Agents. Mr. Knauss also served as the former CEO and co-founder of Digital Hyve, a digital marketing and advertising firm located in Rochester and Syracuse, New York, which was acquired in 2021 by the Butler/Till Agency. Under Mr. Knauss’ leadership, Digital Hyve was named the 52nd fastest growing private company in the United States by Inc. Magazine in 2018 and remained on Inc.’s 5,000, a list of the fastest-growing privately held companies in the United States, for the following three years. Mr. Knauss is also an investor in several businesses including food service and start-ups focused on medical research, professional networking, e-commerce platforms, and mobile payment apps. He is active in the community and is a member of the Board of Directors of the SUNY Oswego Foundation, and formerly served as a Board member of Byrne Dairy, CenterState CEO, The Food Bank of CNY, Onondaga Community College, the United Way of CNY, and the Loretto Foundation. Mr. Knauss has extensive experience in digital marketing and technology development and provides the Board and the Committees he serves with insights into consumer-centric marketing, digital technology development, artificial intelligence automation, cybersecurity, entrepreneurship and e-commerce matters. His experience and insight enhance the Board’s assessment of its technology and digital marketing strategy. Mr. Knauss serves as a liaison to the Company’s Technology Committee. |

  6. DIRECTOR NOMINEE QUALIFICATIONS AND EXPERIENCE

    | Kerrie D. MacPherson | Director Since: 2019 Age: 66 Committees: • Audit (Chair) • Executive • Governance • Risk | Kerrie D. MacPherson was formerly a senior partner of Ernst & Young, LLP (“EY”) where she worked with clients across a broad range of industries over the course of her 32 year career. Her work as an auditor and in leadership roles in transaction advisory services in EY’s Toronto, Canada and New York offices, developed extensive experience in the financial services sector. Ms. MacPherson is a Fellow of the Chartered Professional Accountants of Ontario, the highest distinction conferred by the organization, and has also been recognized by Consulting Magazine’s Women in Leaders in Consulting and received its 2015 Excellence in Leadership Award. Since April 2022, Ms. MacPherson has served as a Director and Audit Committee Chair of Synechron, Inc., a digital transformation consulting firm. In August 2023, she was appointed as a Director of SpartanNash Company (NASDAQ: SPTN), a food solution business engaged in wholesale and retail grocery products. She serves on the Audit and Nominating and Governance Committees. Ms. MacPherson previously served on the Board of Directors of City Harvest, a non-profit focused on feeding the hungry in New York City. She formerly Co-Chaired City Harvest’s Governance and Audit Committees and served as a member of the Executive Committee. She serves on the Dean’s Advisory Board and Global Advancement Board for the University of Toronto’s Rotman School. Ms. MacPherson provides the Board and the Committee she serves with considerable accounting, finance, mergers and acquisitions, and regulatory oversight experience acquired through her years of serving as a public accountant and advising public companies. She also provides the Risk Committee expertise in connection with its oversight of the Company’s cybersecurity program and holds the Cyber-Risk Oversight Certification issued by the National Association of Corporate Directors. Ms. MacPherson has been determined by the Board to be an “audit committee financial expert” under the rules and regulations of the SEC. |

  7. DIRECTOR NOMINEE QUALIFICATIONS AND EXPERIENCE

    | John Parente | Director Since: 2010 Age: 58 Committees: • Trust (Chair) • Executive • Governance • Risk | John Parente is the Chief Executive Officer of CP Media, LLC, an owner of broadcast television stations headquartered in Wilkes-Barre, Pennsylvania. Over the course of his business career, Mr. Parente has developed broad expertise by serving in various executive and management positions in a range of business ventures, including companies engaged in manufacturing, real estate, construction, banking, distribution, and media. He serves on the Board of Directors of Sordoni Construction Company, a New Jersey based construction company serving commercial clients in New Jersey and New York. Mr. Parente has developed significant banking experience through his prior involvement as a founding director of a bank located in Pennsylvania. Mr. Parente provides the Board and the Committees he serves with significant management, business, finance, and risk management expertise and provides insights into the economic opportunities in the Northeast Pennsylvania region, which is a key geographic area for the Company. He formerly served as the Chair of the Company’s Risk Committee and Strategic/Executive Committee and as a past member of its Audit Committee and is thoroughly familiar with the challenges and risks associated with the operations of the Company and its subsidiaries. |

  8. DIRECTOR NOMINEE QUALIFICATIONS AND EXPERIENCE

    | Raymond C. Pecor, III | Director Since: 2017 Age: 56 Committees: • Risk (Chair) • Executive • Governance | Raymond C. Pecor, III is the President of Lake Champlain Transportation Company, based in Burlington, Vermont, a key regional transportation company responsible for the ferry service for the Lake Champlain area. Mr. Pecor is active in the local community and previously served on the board of the Champlain Valley Exposition, a not-for-profit organization serving the Vermont region by promoting agriculture, education, arts and culture, commerce and entertainment activities. Mr. Pecor has over 15 years of experience in the banking industry having served as a member of Merchants Bank’s Board of Directors from 2009 through May 2017 and a member of Merchants Bancshares, Inc. (“Merchants”) Board of Directors from 2012 through May 2017. Over the course of his tenure on Merchants’ Board of Directors, he served on its Audit, Compensation and Governance Committees, and as the Chair of its Loan Committee. Mr. Pecor has significant entrepreneurial experience developed through participation in various development projects in the Vermont and New England area. Mr. Pecor provides the Board and the Committees he serves with business and management experience, public company experience developed through his tenure on the boards of public company financial institutions, and brings expertise with respect to commercial lending and project finance, customer service, crisis response, leadership and risk management experience, and an understanding of the Vermont market and its industries, including transportation and telecommunications. |

  9. DIRECTOR NOMINEE QUALIFICATIONS AND EXPERIENCE

    | Savneet Singh | Director Since: 2024 Age: 41 Committees: • Risk | Savneet Singh is the Chief Executive Officer and President of PAR and President of ParTech. Mr. Singh joined PAR’s Board of Directors in April 2018 and has served as its Chief Executive Officer and President and the President of ParTech, since March 2019. Mr. Singh previously served as the Interim Chief Executive Officer and President of PAR and Interim President of ParTech from December 2018 until March 2019. Since June 2018, Mr. Singh has been a partner of CoVenture, LLC, a multi-asset manager with funds in venture capital, direct lending, and crypto currency. In addition to his service on PAR’s Board of Directors, Mr. Singh has previously served on the Boards of a number of public companies including the Boards of CDON AB (NASDAQ Nordic: CDON), Blockchain Power Trust (TSXV: BPWR.UN; TEP.DB), Sharp Spring, Inc. (NASDAQ: SHSP), and Osprey Technology Acquisition Corp. (NYSE: SFTW.U). Mr. Singh provides the Board and the Committees he serves with expertise in public companies, venture capitalism, entrepreneurship, digital technology, and mergers and acquisition. Mr. Singh serves as a liaison to the Company’s Technology Committee. |

  10. DIRECTOR NOMINEE QUALIFICATIONS AND EXPERIENCE

    | Sally A. Steele | Director Since: 2003 Age: 69 Committee: • Compensation • Risk • Trust | Sally A. Steele is a retired attorney from Tunkhannock, Pennsylvania and has extensive experience in her legal practice with businesses in Northern Pennsylvania and natural gas drilling in the Marcellus Shale region of Pennsylvania and the economic impact of such activities in key markets for the Company. Ms. Steele is a frequent presenter at BankDirector conferences sharing her expertise with top executives and board members in the financial services industry on topics including board orientation and mergers and acquisitions. Ms. Steele was included in the 2019 WomenInc.’s Most Influential Corporate Directors, a listing of women executives, influencers and achievers contributing leadership to corporate boards on S&P 1000/Mid-Cap publicly held companies. Ms. Steele previously served as Chair of the Board from January 2017 through December 2021 and its Lead Director from January 2022 through May 2023. She has developed extensive public company oversight experience gained from more than 30 years of service as a director of national banks and banking holding companies. Ms. Steele has also gained significant mergers and acquisition experience through her prior board service and has a thorough understanding of the evaluation of acquisition opportunities and issues related to evaluating potential transactions. Ms. Steele provides the Board and the Committees she serves with significant corporate governance and leadership expertise through her prior experience chairing the Company’s Governance Committee and Executive Committee and having served as a member of Audit, Compensation, Risk, and Trust Committees. |

  11. DIRECTOR NOMINEE QUALIFICATIONS AND EXPERIENCE

    | Eric E. Stickels | Chair of the Board Director Since: 2015 Age: 63 Committees: • Risk | Eric E. Stickels was formerly the President of Oneida Financial Corp. (“Oneida Financial”) until 2015 and has over 35 years of experience in the banking industry previously serving in various leadership, operational and financial positions with Oneida Savings Bank and its bank holding company, Oneida Financial. He also served on the Board of Directors of Oneida Financial and Oneida Savings Bank and as a member of their Asset/Liability, Trust Investment, Compliance, Information Technology, Loan, and Marketing Committees. Mr. Stickels has significant ties to the Mohawk Valley region of Central New York and is actively involved in the community serving on a variety of local organizations, including as the President of the Oneida Community Golf Club, a member of NYSARC, Inc.’s investment committee, and President and Director of the Cortland Funding Facilities for the Handicapped, Inc. Mr. Stickels is Chair of the Board and provides the Board and the Committees he serves with significant knowledge and experience relating to bank operations, public companies and bank holding companies and their financial reporting obligations and risk management requirements. During the course of his tenure at Oneida Financial, he gained significant financial and risk management experience with direct supervision of the risk management programs at the institution and its financial subsidiaries. Mr. Stickels’ risk management experience has been a great asset to the Board and led to his selection as the Chair of the Stress Testing Subcommittee which existed from 2017 to 2019 as part of the Bank’s preparation for crossing the $10 billion in assets threshold. Mr. Stickels has been determined by the Board to be an “audit committee financial expert” under the rules and regulations of the SEC. |

  12. DIRECTOR NOMINEE QUALIFICATIONS AND EXPERIENCE

    | Michele P. Sullivan | Director Since: 2024 Age: 62 Committees: • Audit • Risk • Trust | Michele P. Sullivan is a retired partner of Crowe LLP (“Crowe”), joining the firm in 1992 and working there until her retirement on March 31, 2023. Over the last 31 years, she specialized in providing consulting services to the financial services sector and worked with top United States and global banks, as well as mid-market insurance carriers and fintech companies, providing consulting services on risk, compliance, internal audit, technology, strategic acquisitions, merger integration, and governance matters. Ms. Sullivan is a certified public accountant (CPA) and a certified risk management professional (CRMA) and holds the Directorship Certification issued by the National Association of Corporate Directors. Ms. Sullivan provides the Board and the Committees she serves with considerable accounting, mergers and acquisitions, financial reporting, internal audit, and regulatory oversight experience acquired through her years of serving as a CPA and advising public companies on their financial statements and related SEC filings and governance, risk and compliance matters. Ms. Sullivan has been determined by the Board to be an “audit committee financial expert” under the rules and regulations of the SEC. |

  13. DIRECTOR NOMINEE QUALIFICATIONS AND EXPERIENCE

    | John F. Whipple, Jr. | Director Since: 2010 Age: 69 Committees: • Governance (Chair) • Audit • Executive • Risk | John F. Whipple, Jr. is the Chief Executive Officer of Buffamante Whipple Buttafaro, P.C., a regional certified public accounting and business advisory firm with offices in Olean, Jamestown and Orchard Park, New York. Mr. Whipple is a certified public accountant with over 40 years of experience in advising Western New York businesses and individuals on tax planning, structuring of business transactions, financing transactions and strategic planning for businesses. Mr. Whipple provides the Board and the Committees he serves with significant management and corporate governance experience, as well as expertise with respect to corporate finance, accounting and the analysis of public company financial statements and related SEC filings. Mr. Whipple has been determined by the Board to be an "audit committee financial expert" under the rules and regulations of the SEC. |

  14. RETIRING DIRECTOR

    RETIRING DIRECTOR Effective as of the date of the Annual Meeting, Ms. Skerritt will retire from the Board. Ms. Skerritt has provided the Board with strong leadership as Lead Director and her service on the Audit, Compensation, and Risk Committees and the Board is grateful for her many contributions.

  15. RETIRING DIRECTOR

    | Susan E. Skerritt | Lead Director Director Since: 2020 Age: 70 Committees: • Audit • Compensation • Risk | Susan E. Skerritt has served as the CEO of West Walk Advisors, LLC since 2018. She has also served as a Senior Advisor with Promontory Financial Group, a wholly owned subsidiary of IBM, providing consulting services to financial institutions on regulatory, governance, and risk management matters from February 2018 to June 2021. She previously served as a Senior Advisor with Boston Consulting Group providing treasury management services to the group’s clients from January 2021 to May 2022. Over the course of the last 35 years, she has served in various executive leadership positions, including serving as Chairwoman, Chief Executive Officer and President of Deutsche Bank Trust Company Americas, Deutsche Bank’s U.S. commercial banking entity, from 2016 to 2018. Previously at Deutsche Bank, she led the transaction banking businesses in North and South America, and also led the global correspondent banking business. Prior to Deutsche Bank, Ms. Skerritt spent seven years at Bank of New York Mellon Trust Company, N.A. where she served as an Executive Vice President, and executive member of its Board of Directors. Ms. Skerritt’s corporate board experience includes service as an independent director on the Board of Directors of the RBC U.S. Group Holdings LLC, the intermediate holding company for Royal Bank of Canada’s U.S. operations, where she served as the Chair of its Human Resources and Corporate Governance Committee, as well as a member of its Audit and Risk Committees. Ms. Skerritt is the Board’s Lead Director and provides the Board and the Committees she serves with considerable finance, risk management, governance, financial services, mergers and acquisitions, and regulatory oversight experience acquired through her years of senior leadership positions as an executive at prominent financial institutions. Ms. Skerritt also has experience in cybersecurity matters and holds the Cyber-Risk Oversight Certification issued by the National Association of Corporate Directors. Since 2018, Ms. Skerritt has served as a Director and member of the Audit Committee of Tanger, Inc. (NYSE: SKT) and, since 2022, has served as Chair of its Audit Committee. Since July 2021, she has served as a Director of IG Group Holdings plc (IGG:L) (“IG Group”) and is currently a member of its Risk and Audit Committees. She has also served as the Chair of IG North America, a subsidiary of IG Group, since July 2024. Mr. Skerritt served as a Director of VEREIT, Inc. (NYSE: VER) from February 2021 through November 2021, and as a Director of the Falcon Group from February 2020 through February 2025, where she served as Chair of its Audit and Risk Committee. She has also served on the Board of Trustees of Hamilton College since 1994, and was elected as a Trustee of the Village of Saltaire in June 2022. Ms. Skerritt previously served as a Director of The Brooklyn Hospital Center from 2013 to 2022. Ms. Skerritt has been determined by the Board to be an “audit committee financial expert” under the rules and regulations of the SEC. |

  16. COMPENSATION OF DIRECTORS

    COMPENSATION OF DIRECTORS The Board has a retainer-based compensation structure based on the recommendation of the Compensation Committee with input from its independent compensation consultant, Meridian Compensation Partners, LLC (“Meridian”). In June of 2024, the Compensation Committee reviewed the Board’s compensation, including a compensation analysis prepared by Meridian based upon an updated Peer Group (see page 45 for information regarding the updated Peer Group). Upon a review of the level and mix of compensation paid to other Boards within the Peer Group, the Compensation Committee determined that an increase in the annual cash retainer and equity grant was appropriate in order to align director compensation with the market, to continue to retain and attract talented Directors and to maintain alignment between director compensation and long-term interests of Shareholders. As a result, effective as of July 1, 2024, the Committee approved (i) an increase in the base annual retainer paid to the Chair and the Directors by $5,000 per year and (ii) an increase in the annual equity grant by $7,615 starting with the annual grant in March 2025. The Compensation Committee did not make any changes to the retainers for Committee service. The following table sets forth the annual retainer fee structure paid to the Directors as of July 1, 2024 for their service on the Board and the various committees on which they serve:

  17. COMPENSATION OF DIRECTORS

    | Position | Board | Audit Committee | Compensation Committee | Governance Committee | Risk Committee | Trust Committee | Executive Committee | | Chair | $120,000 | $22,500 | $15,000 | $15,000 | $15,000 | $10,000 | $10,000 | | Member | $65,000 | $10,000 | $7,000 | $7,000 | None | $5,000 | $5,000 |

  18. COMPENSATION OF DIRECTORS

    In addition to the retainers set forth above, the Company also pays an annual retainer of $5,000 to the Board’s representatives on the Company’s Technology Committee. During 2024, Messrs. Knauss and Singh served at the representatives on the Technology Committee, with Mr. Singh’s retainer fee prorated for his partial year of service as a Director. The Company pays the travel expenses incurred by each Director in attending meetings of the Board. Any executive officer serving on the Board does not receive compensation for attending Board and committee meetings. Consistent with aligning director compensation with the long-term interests of Shareholders, the Directors also receive a portion of their total compensation in the form of equity grants under the Community Financial System, Inc. 2022 Long-Term Incentive Plan, as amended (the “2022 Plan”). In March 2024, the Directors received the equity component of their compensation in the form of deferred stock units. The Board believes that providing part of the Directors’ compensation in the form of an annual equity award is consistent with the Company’s overall compensation philosophy of aligning the interests of individual directors with the long-term interests of the Company’s Shareholders, and assist the Company to attract highly qualified individuals to serve on the Board. The equity award grants reflected in the Director Compensation Table below were made under the 2022 Plan which allows for the issuance of deferred stock unit grants in an amount determined by the Compensation Committee. Directors are required to defer receipt of the units for at least one year, and may defer receipt of the units to a future date of up to ten years following the grant date. The value of the deferred stock units track the market value of the Company stock and are ultimately paid out in shares of the Company stock on the deferred payment date, which is at least one year after the issuance of the equity grant. The Director equity grants are designed to provide a reasonable component of total Director compensation that aligns Director compensation with the long-term interests of the Shareholders. The Directors are subject to the Stock Ownership Guidelines set forth on page 33 and Directors who have not satisfied his or her obligations under the Stock Ownership Guidelines are subject to restrictions on the disposition of the annual equity grants. The following table summarizes the annual compensation paid to each non-employee Director for his or her service to the Board and its committees in 2024. The Company does not make payments (or have any outstanding commitments to make payments) to director legacy programs or similar charitable award programs.

  19. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION

  20. DIRECTOR COMPENSATION

    | Name(1) | Fees Earned or Paid in Cash ($) | Deferred Stock Awards ($)(2) | Total ($) | | Brian R. Ace (retired) | $27,000 | $61,800 | $88,800 | | Mark J. Bolus | $87,500 | $61,800 | $149,300 | | Neil E. Fesette | $87,500 | $61,800 | $149,300 | | Jeffery J. Knauss | $82,625 | $61,800 | $144,425 | | Kerrie D. MacPherson | $94,375 | $61,800 | $156,175 | | John Parente | $84,500 | $61,800 | $146,300 | | Raymond C. Pecor, III | $87,625 | $61,800 | $149,425 | | Savneet Singh | $17,500 | $0 | $17,500 | | Susan E. Skerritt | $79,500 | $61,800 | $141,300 | | Sally A. Steele | $73,875 | $61,800 | $135,675 | | Eric E. Stickels | $117,500 | $61,800 | $179,300 | | Michele P. Sullivan | $70,625 | $61,800 | $132,425 | | Mark E. Tryniski (retired)(3) | $60,000 | $61,800 | $121,800 | | John F. Whipple, Jr. | $90,625 | $61,800 | $152,425 |

  21. DIRECTOR COMPENSATION

    | (1) Dimitar A. Karaivanov, the President and CEO, did not receive any compensation for his service as a director in 2024. Mr. Karaivanov’s compensation is set forth in the Summary Compensation Table. |

  22. DIRECTOR COMPENSATION

    | (2) The amounts in this column reflect the grant date fair value of deferred stock units computed in accordance with ASC Topic 718 for equity awards granted in 2024 pursuant to the 2022 Plan. The deferred stock unit award was made and vested on March 19, 2024. As of December 31, 2024, each Director had the following number of deferred stock units outstanding: Mr. Ace 9,265; Mr. Bolus 3,358; Mr. Fesette 3,993; Mr. Knauss 1,419; Ms. MacPherson 4,951; Mr. Parente 1,419; Mr. Pecor 5,705; Ms. Skerritt 3,993; Ms. Steele 1,419; Mr. Stickels 3,339; Ms. Sullivan 1,419, Mr. Tryniski 1,419, Mr. Whipple 3,993. |

  23. DIRECTOR COMPENSATION

    | (3) The fees reflected for Mr. Tryniski also include consulting fees earned in 2024. Following Mr. Tryniski’s retirement as a Director on May 15, 2024, he continued to serve as a consultant to the Company until December 31, 2024 in order to ensure a successful transition. Under the terms of the consulting arrangement, Mr. Tryniski received consulting payments in the amount of $5,000 per month, totaling $37,500 for the period between May 15, 2024 and December 31, 2024. |

  24. DIRECTOR COMPENSATION

    Directors may elect to defer all or a portion of their cash director fees pursuant to the Company’s Deferred Compensation Plan for Directors. Directors who elect to participate in the plan designate the percentage of their director fees which they wish to defer (the “deferred fees”) and the date to which they wish to defer payment of benefits under the plan (the “distribution date”). The plan administrator establishes an account for each participating director and credits to such account (i) on the date a participating director would have otherwise received payment of his or her deferred fees, the number of deferred shares of the Company’s common stock which could have been purchased with the deferred fees, and (ii) from time to time such additional number of deferred shares which could have been purchased with any dividends which would have been received had shares equal to the number of shares credited to the account actually been issued and outstanding. On the distribution date, the participating director shall be entitled to receive shares of Company common stock equal to the number of deferred shares credited to the director’s account either in a lump sum or in annual installments over a three, five, or ten year period. The effect of the plan is to permit directors to invest deferred director fees in Company stock, having the benefit of any stock price appreciation and dividends as well as the risk of any decrease in the stock price. To the extent that directors participate in the plan, the interests of participating directors will be more closely associated with the interests of the Shareholders. No earnings are deemed above-market or preferential on compensation deferred under the Deferred Compensation Plan for the Directors. Directors currently participating in the plan hold at risk share equivalent units (based on cash fees directors have deferred under the plan), which are subject to market price fluctuations in the Company’s stock in the following amounts as of December 31, 2024: Mr. Fesette 8,228 units; Mr. Pecor 18,139(1) units; Ms. Steele 3,406 units; Ms. Sullivan 1,362 units; and Mr. Whipple 6,849.

  25. DIRECTOR COMPENSATION

    | (1) Included in the units for Mr. Pecor are 9,688 share units that are a result of deferred directors fees from Merchants which were converted to Company stock at the time of the merger. |

  26. DIRECTOR COMPENSATION

    | Corporate Responsibility |

  27. DIRECTOR COMPENSATION

    The Company recognizes the importance of corporate responsibility and continues to refine our corporate responsibility strategy, including environmental, social and human capital, and governance initiatives, in alignment with our businesses. We understand that a thoughtful, coordinated approach to our corporate responsibility obligations will support a healthier, more sustainable future for our stakeholders including our investors, employees, customers and communities we serve. We expect to build upon our core values as a community financial institution and our core mission of serving the financial needs of our communities. We expect our corporate responsibility strategy will align with the nature and scale of our business in respecting the environment and the evolution of corporate responsibility principles in our industry. Since 2023, the Company’s Corporate Responsibility Committee, comprised of key members of the Company’s and Bank’s management team has spearheaded the Company’s corporate responsibility efforts, including formulating ways to advance the Company’s corporate responsibility goals across the enterprise. Some of our specific efforts and commitments regarding our environment, our people and our community for 2024 and 2025 are summarized below. See the section entitled Corporate Governance on page 27 for information on our governance principles.

  28. DIRECTOR COMPENSATION

    | Our Environment | Our People | Our Community | | • Invested $10,000,000 in a solar tax equity fund to participate in regionally-based small- to mid-size solar projects primarily designed to promote public welfare, including the welfare of low- and moderate-income communities or families. | • In 2024, the CEO launched employee townhall meetings to enhance communication and transparency into the Company’s strategy and priorities. | • In 2024, the Bank was awarded the Community Commitment Award by the American Bankers Association Foundation in recognition of the Bank’s extraordinary efforts in volunteerism. | | • Responsible waste management and recycling practices including recycling of over 22,500 pounds of electronic equipment. | • The Culture and Diversity Council continued to engage across the Company to foster a culture of diversity and inclusion. Ms. MacPherson is the Board’s liaison to the Council and her role demonstrates the Board’s commitment to the oversight of human capital management. | • We contributed over $3.9 million to 2,200 charities and our employees volunteered over 17,800 hours to approximately 900 organizations in our footprint during 2024. In 2024, the Company announced the Volunteer Time Off Program that allows for eligible employees to take up to 16 hours of paid time off to volunteer their time. | | • Incorporated energy efficiencies into the renovation of the Company’s new DeWitt, New York headquarters and the new de novo branches that opened in 2024 and are scheduled for 2025. | • Developed future leaders through the Company’s leadership programs to strengthen our succession and leadership capabilities, as well as reinforce our commitment to promote from within. Over 138 leaders participated in these programs in 2024. | • In 2024, the Company pledged $150,000 to the CenterState CEO’s Tech Garden, the premier technology incubator in the Central New York region, with the mission to support local start-up businesses. | | • Provided $21 million in commercial credit facilities that financed projects incorporating elements of solar or energy efficient technology in 2024. | • Continued to leverage the Company-wide employee engagement survey and program called “MyVoice.” Employee engagement is an important part of our human capital focus and this program helps facilitate our progress. | • Since 2023, the Bank has hired five Community Lending Specialists in the Albany, Buffalo, Rochester, Syracuse, and Utica markets. The Bank has also provided a special purpose credit product in Buffalo, Rochester, and Syracuse New York to allow minority and low-to-moderate income areas to obtain residential mortgages on favorable terms. These efforts and programs have resulted in $145.6 million of mortgage loans to low-to-moderate income households in 2024. In 2025, the Bank will also offer similar programs in other communities. |

  29. OUR COMPENSATION PHILOSOPHY

    | • | Base Salary. The Company targets base salaries to be market competitive and compares its named executives’ base salaries with survey and peer group compensation data for corresponding executives, as selected by our independent compensation consultant and affirmed by the Committee (as detailed below). The named executives’ base salaries are the foundation for other performance-based pay programs to the extent they are expressed as percentages of base salary |

  30. OUR COMPENSATION PHILOSOPHY

    | • | Annual Cash Incentive Pursuant to the Management Incentive Plan (“MIP”). The Company’s annual cash incentive program is a variable, at-risk component of the named executives’ compensation that is directly tied to achieving specific performance metrics and strategic goals. The Committee establishes pre-determined goals and target |

  31. OUR COMPENSATION PHILOSOPHY

    | • | Equity-Based Long-term Incentives. The Committee uses a combination of time-based restricted stock, performance-based restricted stock, and stock options as another variable, at-risk component of the named executives’ compensation. Each year, the program provides grants of performance-based restricted stock awards that have a three-year performance period, stock options that vest over five years, and time-based restricted stock that vests over three years. The Committee believes this approach provides a meaningful portion of awards at risk based on performance. In addition, equity-based compensation also aligns the interests of the named executives with the interests of the Company’s Shareholders and helps retain a high-performing executive team over the longer term through vesting schedules that generally require continuous service over a three to five-year vesting period. |

  32. OUR COMPENSATION PHILOSOPHY

    | Design of Equity-Based Long-Term Incentives | | | | | Equity Award | Target Percentage of Equity- Based Long-Term Incentive Grant | Vesting Period | Performance Features | | Performance-based restricted stock awards | 50% | Three-Year Cliff Vesting | Rewards achievement of financial goals measured over a three-year performance period (January 2024- December 2026) and puts appropriate focus on long-term alignment of pay and performance. • Half of the target opportunity is based on three-year total shareholder return measured against the constituents of the KBW Regional Bank Index (“KRX”). • Half of the target opportunity is based on the three-year average core return on average tangible common equity (“Core ROATCE”) measured against the performance of the KRX constituents. The potential payout range is from 0% to 200% and will be determined on the achievement of both performance goals independently. | | Stock Options | 25% | Five Year Pro-Rata | Stock options align our executives’ interests with those of the Shareholders by providing value only if the Company’s stock price increases from the date that the stock option is granted, they provide a long-term incentive for strong Shareholder returns to produce any value. | | Time- Based Restricted Stock | 25% | Three Year Pro-Rata | To provide a focus on sustainable long-term Shareholder value creation, align the named executives’ interest with Shareholders, and retain executives. |

  33. OUR COMPENSATION PHILOSOPHY

    | • | Total target compensation is intended to be within the competitive market range (derived from the custom peer group and supplemented by industry survey data as needed). |

  34. OUR COMPENSATION PHILOSOPHY

    | • | When the Company’s performance exceeds its performance goals and the performance of the KRX constituents, the Company’s total compensation program is designed to reward executives with pay above their target level. Similarly, if the Company’s performance does not meet its goals or falls below the KRX constituents’ performance, the Company’s compensation is designed to pay below that target level. |

  35. PEER GROUP AND BENCHMARKING

    PEER GROUP AND BENCHMARKING Understanding the industry’s landscape is essential to establishing the Company’s program targets and making compensation decisions. The Company regularly reviews competitive market data and compares executive pay and performance to ensure alignment. The Committee targets total compensation to be competitive with the market as reflected through peer group and industry surveys. To accomplish this, it has been the Committee’s practice to benchmark the named executives’ compensation periodically against market data and an appropriate group of peers. The Committee maintained the same peer group as 2023 for setting 2024 pay opportunities, listed below:

  36. PEER GROUP AND BENCHMARKING

    | Peer Group used for 2024 Compensation Decisions | | | | Atlantic Union Bankshares Corporation | Berkshire Hills Bancorp Inc. | Eastern Bankshares, Inc. | | First Busey Corp. | First Commonwealth Financial Corporation | First Financial Bancorp. | | First Merchants Corporation | F.N.B. Corporation | Fulton Financial Corporation | | Independent Bank Corp. | NBT Bancorp, Inc. | Northwest Bancshares, Inc. | | Old National Bancorp | Park National Corporation | Provident Financial Services, Inc. | | Sandy Springs Bancorp, Inc. | United Bankshares, Inc. | WesBanco, Inc. | | WSFS Financial Corporation | | |

  37. PEER GROUP AND BENCHMARKING

    In 2024, the Compensation Committee asked Meridian to update the Company’s peer group and conduct a benchmarking analysis. In June 2024, Meridian updated the Company’s peer group using objective selection criteria including size, geography (eastern half of the United States), number of full-time employees, and business model with meaningful non-interest income. This process, along with the Committee’s review and judgment, resulted in the 17-company peer group (the “Updated Peer Group”) as reflected below.

  38. PEER GROUP AND BENCHMARKING

    | Updated Peer Group used for certain 2024 and 2025 Compensation Decisions | | | | Associated Banc-Corp. | FB Financial Corporation | First Busey Corp. | | First Commonwealth Financial Corporation | First Financial Bancorp. | F.N.B. Corporation | | Fulton Financial Corporation | NBT Bancorp, Inc. | Northwest Bancshares, Inc. | | Old National Bancorp | Park National Corporation | Pinnacle Financial Partners, Inc. | | Provident Financial Services, Inc. | TowneBank | Trustmark Corporation | | WesBanco, Inc. | WSFS Financial Corporation | |

  39. PEER GROUP AND BENCHMARKING

    As of December 31, 2024, the Company was positioned at the 35th percentile for total assets, 59th percentile for operating revenue and 71st percentile for Market Capitalization. Meridian utilized this Updated Peer Group to conduct benchmarking and assess director compensation for 2024 (see page 18 for information regarding changes made to Director compensation in June 2024) as well as executive compensation for 2025. The Committee further supplemented the Updated Peer Group data with data from multiple compensation surveys. This survey data generally covered data from broader financial services companies with whom we may compete for talent in our non-banking businesses. Industry comparisons are only one element of the Compensation Committee’s holistic review of our executive compensation programs. As described above, although the Compensation Committee views market data as an important element in its compensation determination process, it believes that market data should be used in conjunction with the Compensation Committee’s overall review and analysis of the Company’s and its named executives’ performance as well as the Company’s business and retention needs in making compensation decisions.

  40. 2024 COMPENSATION PROGRAM AND PAY DECISIONS

    | • | annual cash incentive pursuant to the MIP; and |

  41. 2024 COMPENSATION PROGRAM AND PAY DECISIONS

    | • | equity-based long-term incentives. |

  42. Base Salary

    Base Salary The Company uses the base salary to provide the foundation of a fair and competitive compensation opportunity for each named executive. The Compensation Committee reviews the base salaries of our named executives annually to determine whether any adjustments are advisable based on market analysis, individual performance and contributions, and the Company’s performance and retention needs. Base salaries are generally intended to be competitive with corresponding executives in the peer group. The Committee recognizes that base salaries are the foundation for the other performance-based pay programs to the extent they are expressed as percentages of base salary (e.g., the target cash incentive under the MIP is a percentage of the executive’s base salary). As a result, the Committee carefully considers the appropriate base salary amounts to ensure a proper pay mix and positioning. In December 2023, the Compensation Committee approved the following base salary increases, effective January 1, 2024, based upon promotions and leadership changes, performance, and Peer Group market analysis. In addition, the Compensation Committee in October 2024 made a mid-year adjustment to Ms. Gillan-Myer’s base salary upon her appointment and expanded responsibilities as Chief Administration Officer.

  43. Base Salary

    | (1) Mr. Karaivanov’s salary increase is associated with his promotion to President and CEO and is consistent with the terms of his Employment Agreement. |

  44. Annual Incentive Payments under the Management Incentive Plan (“MIP”)

    Annual Incentive Payments under the Management Incentive Plan (“MIP”) Annual incentives under the MIP are designed to reward performance achievements relative to specified, pre-determined Company performance goals. The goals are set to focus on strategic and tactical priorities in the operation of the Company and to encourage actions that increase long-term Shareholder value. The Committee refined the 2024 MIP corporate goals to reflect the Company’s operating philosophy of delivering above-average returns to its Shareholders with below-average risk. The new goals were created to focus business operations on matters that will have a transformative impact on the Company. Each of our named executives is assigned a target incentive opportunity under the MIP, defined as a percentage of base salary. The Compensation Committee periodically reviews target incentives to ensure they remain appropriate based on market analysis, individual performance and contributions, and the Company’s performance and retention needs. Based on this review, the target amounts were increased from fiscal 2023 to fiscal 2024 due to the promotion of Messrs. Karaivanov and Levy as set forth in the table below:

  45. Annual Incentive Payments under the Management Incentive Plan (“MIP”)

    | Name | 2023 Target Incentive (as a percentage of Base Salary) | 2024 Target Incentive (as a percentage of Base Salary) | | Dimitar A. Karaivanov | 55% | 75% | | Joseph E. Sutaris | 55% | 55% | | Michael N. Abdo | n/a | 50% | | Maureen Gillan-Myer | 50% | 50% | | Jeffrey M. Levy | 50% | 55% |

  46. Annual Incentive Payments under the Management Incentive Plan (“MIP”)

    At the beginning of each fiscal year, the Compensation Committee establishes annual corporate performance goals. Corporate goals are proposed by the CEO, reviewed and approved by the Committee, and approved by the Board. The Committee considers and assigns a relative weight to each goal to reflect relative importance to enhance Shareholder value. The Company’s updated corporate goals under the 2024 MIP are summarized in the table below, including each goal’s (i) weight, (ii) threshold, target, and maximum levels of achievement, (iii) achievement level in 2024, and (iv) weighted attainment percentage based on 2024 performance. The final weighted achievement level, if any, determined by the Compensation Committee is identified by check mark in the Payout Level column.

  47. Annual Incentive Payments under the Management Incentive Plan (“MIP”)

    | Achievement Levels | | | | | | | | | Goal | Weight | Performance Level | Performance Goal | Payout Level | | Actual Achievement in 2024 | Weighted Attainment Percentage in 2024 | | Goals established to demonstrate above average return to the Company’s Shareholders | | | | | | | | | Bank Operating Pre-Provision Net Revenue (“PPNR”) (1) | 25% | Threshold | 1% | 50% | | 5.6% | 25% | | | | Target | 3% | 100% | | | | | | | Maximum | > 6% | 150% | | | | | Financial Services Operating PPNR (2) | 15% | Threshold | 2% | 50% | | | | | | | Target | 4% | 100% | | | | | | | Maximum | > 8% | 150% | | 9.9% | 22.5% | | Core ROA, relative to KRX (3) | 10% | Threshold | < 50th percentile | 50% | | | | | | | Target | 50th – 75th percentile | 100% | | 67% | 10% | | | | Maximum | >75th percentile | 150% | | | | | Goals established to demonstrate below average risk | | | | | | | | | Capital (4) | 10% | Threshold | 10.5% | 50% | | | | | | | Target | 12.0% | 100% | | | | | | | Maximum | 13.0% | 150% | | 14.24% | 15% | | Net Charge-Off Ratio(5) | 10% | Threshold | 0.35% | 50% | | | | | | | Target | 0.25% | 100% | | | | | | | Maximum | < 0.15% | 150% | | .10% | 15% | | Liquidity Objectives(6) | 10% | Threshold | Achievement of 1 Objective | 50% | | Both Objectives Attained | 15% | | | | Target | Achievement of Both Objectives | 100% | | | | | | | Maximum | Achievement of Both Objectives plus 200% | 150% | | | | | Goals established to drive strategic priorities | | | | | | | | | Human Capital Objectives(7) | 20% | Threshold Target Maximum | Achievement of 2 Objectives Achievement of 3 Objectives Achievement of 4 Objectives | 50% 100% 150% | | Three Objectives Attained | 20% | | Data Efficiency Objectives (8) | | | | | | | | | Business Mix Objectives (9) | | | | | | | | | Opening New Branches (10) | | | | | | | | | Total Weighted Attainment Percentage | | | | | | | 122.5% |

  48. Annual Incentive Payments under the Management Incentive Plan (“MIP”)

    | (1) Bank Operating PPNR is a non-GAAP measure that excludes income taxes, provision for credit losses, acquisition expenses, acquisition-related contingent consideration adjustments, restructuring expenses, litigation accrual, loss on sale of investment securities, unrealized (gain)/loss on equity securities and amortization of intangible assets from GAAP net income for the Company’s banking subsidiary. The Bank Operating PPNR was $199.9 million in 2024 as compared to $189.4 million in 2023, which represented an increase of 5.6% and the Company satisfied this objective at the target level. See Appendix A for the Company’s Operating PPNR, which is the sum of Bank Operating PPNR and Financial Services Operating PPNR. |

  49. Annual Incentive Payments under the Management Incentive Plan (“MIP”)

    | (2) Growth in Financial Services Operating PPNR is measured as the year-over-year increase in pre-tax operating income generated from the Company’s Employee Benefit Services, Insurance Service and Wealth Management Services segments (expressed as a percentage). The Financial Services pre-tax operating income was $73.7 million in 2024 as compared to $67.0 million in 2023 resulting in a 9.9% increase and the Company satisfied this objective at the maximum level. |

  50. Annual Incentive Payments under the Management Incentive Plan (“MIP”)

    | (3) Core ROA relative to the KRX Index is measured as core income as a percent of average assets. Core income is defined as Net income after taxes and before extraordinary items, less net income attributable to noncontrolling interest, gain on the sale of held to maturity and available for sale securities, amortization of intangibles, goodwill and nonrecurring items. Core ROA was ranked at the 67% percentile in 2024 and the Company satisfied this objective at the target level. |

  51. Annual Incentive Payments under the Management Incentive Plan (“MIP”)

    | (4) Capital Common Equity Tier 1 Capital (“CET1”) as reported in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 was 14.24% and the Company satisfied this objective at the maximum level. |

  52. Annual Incentive Payments under the Management Incentive Plan (“MIP”)

    | (5) Net Charge-Off Ratio of 0.10% as reported in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 and the Company satisfied this objective at the maximum level. The Committee set the maximum achievement level to less than 0.15% for 2024, the same level that was established for the 2023 MIP. The Company’s actual net charge-off ratio for 2023 was 0.06%, but 0.15% was set as the 2024 goal because achieving net |

  53. Annual Incentive Payments under the Management Incentive Plan (“MIP”)

    charge-offs of less than 0.15% was determined by the Committee to be an appropriate measurement of a well-managed lending portfolio under industry standards that appropriately balances loan portfolio growth objectives and the underlying risks. The Committee does not believe that setting the maximum level at a lower amount would be an appropriate stretch goal based on industry standards and the Committee’s balancing of the Company’s risk tolerance and loan growth objectives.

  54. Annual Incentive Payments under the Management Incentive Plan (“MIP”)

    | (6) This liquidity objective has two components, one is the loan-to-deposit ratio, which must be less than the Company’s peer average, and the second is the Company’s liquidity for net uninsured deposit coverage ratio which measures the Company’s ability to cover potential cash outflows from uninsured deposits, which must be in excess of 175% in order to satisfy this objective. The liquidity levels as reported in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 were 77.6% for the loan-to-deposit ratio, which was less than the peer average, and 246% for net uninsured deposit coverage ratio resulting in both objectives being achieved and the Company satisfied this objective at the maximum level. |

  55. Annual Incentive Payments under the Management Incentive Plan (“MIP”)

    | (7) The Committee selected four human capital objectives for this strategic priority, which included the following: complete the inaugural emerging leadership program and launch second year; provide such emerging leader with opportunities; identify top leaders and create development plans for such leaders; and incorporate into the annual performance evaluations identification of under-performing employees. The Company achieved some of these strategic objectives but did not satisfy all of them. |

  56. Annual Incentive Payments under the Management Incentive Plan (“MIP”)

    | (8) The Committee selected five objectives for the Company to leverage its information technology, which included the following matters: development and implement of strategic data plans; development of dashboard for key business lines; integration of automation to achieve cost savings; implement artificial intelligence solutions; and launch certain digital marketing efforts. The Company achieved all of these objectives, which satisfied one of the four strategic priorities. |

  57. Annual Incentive Payments under the Management Incentive Plan (“MIP”)

    | (9) The Company must derive at least 38% of its total operating revenues from total operating noninterest revenues to satisfy this strategic objective. Total operating noninterest revenues was 39.8% of total operating revenues for 2024. As a result, the Company satisfied this objective, which satisfied one of the four strategic priorities. |

  58. Annual Incentive Payments under the Management Incentive Plan (“MIP”)

    | (10) The completion of substantial progress towards opening 10 new retail branches across the Bank’s footprint subject to the receipt of regulatory approvals for such branches. The Company satisfied this objective which satisfied one of the four strategic priorities. Based on satisfaction of the 3 of the 4 strategic objections (Data Efficiency, Business Mix and New Branch Openings), the Company achieved satisfaction of the strategic priority goal at target level. |

  59. Annual Incentive Payments under the Management Incentive Plan (“MIP”)

    The weighted attainment percentage for each corporate goal as shown in the table above is calculated by the following formula:

  60. Annual Incentive Payments under the Management Incentive Plan (“MIP”)

    | WeightX | Percentage Achieved | = | Weighted Attainment Percentage |

  61. Annual Incentive Payments under the Management Incentive Plan (“MIP”)

    The weighted attainment percentages for each corporate goal are summed to yield a “Total Weighted Attainment Percentage.” If the Company were to achieve the target for all of the established goals, the Total Weighted Attainment Percentage would be 100%. The maximum possible total weighted attainment percentage in fiscal 2024 was 150%. Performance is not interpolated for achievement between the threshold and target or target and maximum levels described above. The Company achieved a performance level of 122.5% of target based upon the satisfaction of the established goals in the 2024 scorecard. The Committee, as requested by Mr. Karaivanov, considered certain qualitative factors and determined to approve the annual cash Incentive awards for the named executives at the level of 100-115% of the target amount. For the 2024 MIP payments, which are paid in 2025, each named executive is eligible to receive a payout equal to the Total Weighted Attainment Percentage, as adjusted, (the “Adjusted Weighted Attainment Percentage”) multiplied by their target incentive amount set forth in the following table:

  62. Annual Incentive Payments under the Management Incentive Plan (“MIP”)

    | Name | Applicable Base Salary(1) | Total Weighted Attainment Percentage | Adjusted Weighted Attainment Percentage | 2024 Target Incentive (as percentage of Base Salary) | 2024 Actual Incentive (as percentage of Applicable Base Salary) | 2024 Management Incentive Plan Payment | | Dimitar A. Karaivanov | $900,000 | 122.5% | 115% | 75% | 86.25% | $776,250 | | Joseph E. Sutaris | $499,224 | 122.5% | 115% | 55% | 63.25% | $315,759 | | Michael N. Abdo | $433,000 | 122.5% | 115% | 50% | 57.50% | $248,975 | | Maureen Gillan-Myer | $433,500 | 122.5% | 115% | 50% | 57.50% | $249,263 | | Jeffrey M. Levy | $461,250 | 122.5% | 100% | 55% | 55.00% | $253,688 |

  63. Annual Incentive Payments under the Management Incentive Plan (“MIP”)

    | (1) The incentive payments were calculated, consistent with past practice, using the named executive’s salary as of January 1, 2025. |

  64. Annual Incentive Payments under the Management Incentive Plan (“MIP”)

    In December 2024, the Compensation Committee established the 2025 target opportunities for the named executives as set forth below based upon market analysis, the quality and contribution of the named executives to the Company and the expansion of certain roles within the organization:

  65. Annual Incentive Payments under the Management Incentive Plan (“MIP”)

    | Name | 2024 Target Incentive (as percentage of Base Salary) | 2025 Target Incentive (as percentage of Base Salary) | | Dimitar A. Karaivanov | 75% | 75% | | Joseph E. Sutaris | 55% | 55% | | Michael N. Abdo | 50% | 60% | | Maureen Gillan-Myer | 50% | 65% | | Jeffrey M. Levy | 55% | 55% |

  66. Annual Incentive Payments under the Management Incentive Plan (“MIP”)

    In December 2024, the Compensation Committee adopted the 2025 MIP performance goals consistent with the framework established in 2024 to further support the Company’s operating philosophy of delivering above-average returns to its Shareholders with below average risk.

  67. Long-Term Incentive Compensation

    Long-Term Incentive Compensation The Compensation Committee believes that the interests of the Company’s Shareholders are best served when a significant portion of executive compensation is provided in equity-based long-term incentives. Accordingly, the Compensation Committee makes annual grants of equity-based long-term incentives to the named executives and other key employees, which are designed to align with long-term performance. In 2022, the Committee redesigned the equity-based long-term incentive program to provide all three equity components on an annual basis and increase the portion of the performance-based awards; previously performance-based equity was granted every three years. Since March 2022, and in response to Shareholder feedback, the annual target equity grants were structured to be comprised of (i) 50% performance-based restricted stock, (ii) 25% stock options, and (iii) 25% time-based restricted stock grants, so that 75% of the annual target equity awards were performance-based awards dependent the Company’s performance: Three components of our long-term equity awards are described as follows:

  68. Long-Term Incentive Compensation

    | 1. | Performance-Based Restricted Stock Grant- 50% of Annual Equity Grant. The performance-based restricted stock awards will vest after a three-year performance period based on achievement of certain performance criteria. |

  69. Long-Term Incentive Compensation

    | 2. | Stock Option Grants- 25% of Annual Equity Grant. The Committee believes that stock options are inherently performance-based because they only deliver value when the Company stock price appreciates above the exercise price and provide strong shareholder alignment. Stock options will vest annually over 5 years. |

  70. Long-Term Incentive Compensation

    | 3. | Time Vested Restricted Stock Grant- 25% of Annual Equity Grant. Time-vested restricted stock will vest annually over three years. Time-vested restricted stock encourages stock ownership, provides retention, and aligns executives with shareholder interests. |

  71. 2024 Long Term Incentive Compensation

    2024 Long Term Incentive Compensation The Compensation Committee sets target award opportunities for equity grants to be competitive with the market and consistent with the named executive’s position and performance. The table below provides the annual target equity award opportunities for each of the named executives in 2024:

  72. 2024 Long Term Incentive Compensation

    | Name | 2023 Target Equity Grant (as percentage of Base Salary) | 2024 Target Equity Grant (as percentage of Base Salary) | | Dimitar A. Karaivanov (1) | 90% | 105% | | Joseph E. Sutaris | 70% | 70% | | Michal N. Abdo | n/a | 60% | | Maureen Gillan-Myer | 60% | 60% | | Jeffrey M. Levy (2) | 60% | 65% |

  73. 2024 Long Term Incentive Compensation

    | (1) Mr. Karaivanov’s target equity grant percentage was increased to 105% in connection with his promotion to President and CEO. |

  74. 2024 Long Term Incentive Compensation

    | (2) Mr. Levy’s target equity grant percentage was increased to 65% in connection with his promotion to Chief Banking Officer. |

  75. 2024 Long Term Incentive Compensation

    For the Performance Based Restricted Stock granted as part of the 2024 Equity Grant, performance will be measured for the performance period from 2024 through 2026 based on two performance metrics: (1) three-year total shareholder return and (2) three-year average core return on average tangible common equity (“Core ROATCE”). The performance metrics will be measured against the performance of the KRX constituents. The performance metrics for the performance-based restricted stock awards are key drivers of Shareholder value creation and are aligned with the Company’s strategic plan. Below are the performance metrics for the 2024-2026 performance cycle for the performance grants:

  76. 2024 Long Term Incentive Compensation

    | Performance Measures | Weight | Threshold | Target | Maximum | | Three-year TSR Rank – Relative to the population of KRX constituents | 50% | 25th Percentile | 50th Percentile | 100th Percentile | | Three-year Average Core ROATCE – Relative to the population of KRX constituents | 50% | 25th Percentile | 50th Percentile | 100th Percentile | | Payout Range (% of Target) | | 50% | 100% | 200% |

  77. 2024 Long Term Incentive Compensation

    We use core results to measure management’s performance against our operating plan more accurately. Core results adjust our GAAP results for net tax effect and certain nonrecurring revenue and expenses. See Appendix A for reconciliation of GAAP to Non-GAAP measures. Corporate performance results between threshold and target and between target and maximum are calculated using a straight-line interpolation. The potential payout range is from 0% to 200% and will be determined on the achievement of both performance goals independently. When TSR is negative, the payout cannot exceed 100% of target for the entire performance-based equity grant regardless of the actual performance results.

  78. 2025 Long Term Incentive Compensation

    2025 Long Term Incentive Compensation In December 2024, the Compensation Committee established the following 2025 target equity award opportunities for current named executives based on a market analysis performed by Meridian to competitively align compensation with the target award opportunities for similar executives in the Updated Peer Group and to reflect each named executives’ performance in his or her role:

  79. 2025 Long Term Incentive Compensation

    | Name | 2025 Target Equity Grant (as percentage of Base Salary) | | Dimitar A. Karaivanov(1) | 115% | | Joseph E. Sutaris | 70% | | Michael N. Abdo | 70% | | Maureen Gillan-Myer | 65% | | Jeffrey M. Levy | 70% |

  80. 2025 Long Term Incentive Compensation

    | (1) Mr. Karaivanov’s target equity grant percentage was increased from 105% to 115% to align his total compensation with the 2024 benchmarking study and to further align his compensation to variable, performance-based compensation. |

  81. 2025 Long Term Incentive Compensation

    For the Performance Based Restricted Stock granted as part of the 2025 Equity Grant (for the performance period from 2025 through 2027), the Compensation Committee also approved and adopted the same performance metrics used in for the 2024 performance grants.

  82. Summary of Earned 2022 Performance-Based Restricted Stock Awards

    Summary of Earned 2022 Performance-Based Restricted Stock Awards In March 2025, shares of common stock underlying the Performance-Based Restricted Stock Awards granted in 2022 for the performance period 2022 to 2024 were distributed. The number of shares distributed was equal to 100% of target based on the Company’s three-year Total Shareholder Return performance at the 15th percentile and the three-year average Core ROATCE performance at the 100th percentile of the KRX constituents. These outcomes reflected --8.7% TSR (-3.0% on annualized basis) and an average Core ROATCE over the three-year performance period of 25.5%. The final determination is based upon information generated by S&P Global without any adjustments. The table below shows the number and value of Performance-Based Restricted Stock Awards awarded on the grant date, and the number and value of Performance-Based Restricted Stock Awards, as of March 7, 2025.

  83. Summary of Earned 2022 Performance-Based Restricted Stock Awards

    | Name (1) | Performance-Based Restricted Stock Awards Granted at Target Level (#) | Grant Date Value of Performance-Based Restricted Stock Awards ($) (2) | Shared Earned (#) | Value Earned (3)(4) | | Dimitar A. Karaivanov | 3,069 | $222,533 | 3,391.9843 | $201,866 | | Joseph E. Sutaris | 1,739 | $126,095 | 1,922.0287 | $114,417 | | Maureen Gillan-Myer | 1,332 | $96,583 | 1,472.1799 | $86,628 | | Jeffrey M. Levy | 966 | $70,045 | 1,067.6475 | $63,519 |

  84. Summary of Earned 2022 Performance-Based Restricted Stock Awards

    | (1) Mr. Abdo was not serving as General Counsel in January 2022, the time at which the Compensation Committee granted the 2022-2024 Performance-Based Restricted Stock Grant, and was not awarded performance shares under the 2022 Equity Grant. |

  85. Summary of Earned 2022 Performance-Based Restricted Stock Awards

    | (2) The date of grant was March 15, 2022. The Company’s stock price as of the close on March 14, 2022 was $72.51. |

  86. Summary of Earned 2022 Performance-Based Restricted Stock Awards

    | (3) The closing price for the Company’s stock price on March 6, 2025 was $59.83. |

  87. Summary of Earned 2022 Performance-Based Restricted Stock Awards

    | (4) The value includes shares that were granted under the dividend reinvestment feature of the Community Financial System, Inc. 2022 Long-Term Incentive Plan, as amended (the “Plan”). Mr. Karaivanov received 322.9843 shares, Mr. Sutaris received 183.0287 shares, Ms. Gillan-Myer received 140.1799 shares, and Mr. Levy received 101.6475 shares. |

  88. Summary of Earned 2022 Performance-Based Restricted Stock Awards

    Please see the Summary Compensation Table and the Grants of Plan-Based Awards Table presented on pages 56 to 57 and the accompanying narrative disclosure for more information regarding the stock options, performance-based restricted stock, and time-vested restricted stock received by each of the named executives in connection with the 2024 annual equity awards and 2022-2024 Performance-Based Restricted Stock Grant.

  89. Grant of Equity Awards Policy

    Grant of Equity Awards Policy The Company’s Grant of Equity Awards Policy provides objective, standardized criteria for the timing, practices and procedures used in granting equity awards, including stock options. The Company’s policy prohibits it from purposely accelerating or delaying the public release of material nonpublic information in consideration of a pending equity award in order to allow the grantee to benefit from a more favorable stock price. The Company’s practice has been to grant equity awards, including stock options, on a predetermined schedule. Under the Policy, the Compensation Committee will award annual grants in March of each year and off-cycle grants will be made the first business day of February, May, August or November that next follows the date such grant is approved. In addition, the Company does not grant equity awards while it is subject to a blackout period, as such term is defined in the Company’s Policy Prohibiting Insider Trading (“Insider Trading Policy”), unless approved by the General Counsel and the CFO.

  90. Risk Considerations

    | SUMMARY COMPENSATION TABLE for Fiscal Years Ended December 31, 2024, 2023 and 2022 | | | | | | | | | | | Name and Principal Position | Year | Salary ($) | Stock Awards ($)(1) | Option Awards ($)(2) | Non-Equity Incentive Plan Compensation ($)(3) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(4) | All Other Compensation ($)(5) | SEC Total ($) | Adjusted SEC Total(6) | | Dimitar A. Karaivanov President, Chief Executive Officer and Director | 2024 | $893,434 | $690,846 | $235,484 | $776,250 | $77,732 | $27,145 | $2,700,891 | $2,623,159 | | | 2023 | $542,325 | $380,034 | $127,846 | $192,011 | $63,275 | $24,821 | $1,330,312 | $1,267,037 | | | 2022 | $501,461 | $330,368 | $110,125 | $246,080 | $5,875 | $29,058 | $1,222,967 | $1,217,092 | | Joseph E. Sutaris, EVP and Chief Financial Officer | 2024 | $489,435 | $250,463 | $85,365 | $315,759 | $50,111 | $26,924 | $1,218,057 | $1,167,946 | | | 2023 | $475,180 | $258,966 | $87,117 | $168,243 | $114,238 | $26,104 | $1,129,848 | $1,015,610 | | | 2022 | $434,003 | $187,167 | $62,403 | $196,012 | ($64,865) | $30,589 | $845,309 | $910,174 | | Maureen Gillan-Myer EVP and Chief Administration and Human Resources Officer | 2024 | $414,205 | $180,247 | $61,440 | $249,263 | $35,584 | $44,969 | $985,708 | $950,124 | | | 2023 | $398,996 | $186,444 | $62,691 | $128,427 | $22,499 | $49,385 | $848,442 | $825,943 | | | 2022 | $386,250 | $143,380 | $47,793 | $164,586 | $3,286 | $42,121 | $787,416 | $784,130 | | Jeffrey M. Levy SVP and Chief Banking Officer | 2024 | $449,269 | $213,800 | $72,885 | $253,688 | $28,616 | $29,614 | $1,047,872 | $1,019,256 | | | 2023 | $400,000 | $186,848 | $62,855 | $128,745 | $33,060 | $31,303 | $842,811 | $809,751 | | | 2022 | $347,486 | $103,974 | $34,648 | $160,000 | $21,449 | $29,956 | $697,513 | $676,064 | | Michael N. Abdo EVP and General Counsel | 2024 | $391,083 | $171,696 | $58,520 | $248,975 | $32,304 | $46,977 | $949,555 | $917,251 |

  91. Risk Considerations

    | GRANTS OF PLAN-BASED AWARDS | | | | | | | | | | | | | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(4) | | | All other stock awards: Number of shares of stock or units (#) | All other option awards: Number of securities Underlying options (#) | Exercise or base price of options awards | Grant date fair value of stock and option awards | | Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold ($) | Target ($) | Maximum ($) | | | | | | Dimitar A. Karaivanov | | $0 | $675,000 | $1,012,500 | | | | | | | | | | 3/19/24 | | | | | | | | 19,114(2) | $44.27 | $235,484 | | | 3/19/24 | | | | | | | 5,332(3) | | | $236,048 | | | 3/19/24 | | | | 5,546 | 10,666 | 21,332 | | | | $454,798 | | Joseph E. Sutaris | | $0 | $274,573 | $411,860 | | | | | | | | | | 3/19/24 | | | | | | | | 6,929(2) | $44.27 | $85,365 | | | 3/19/24 | | | | | | | 1,933(3) | | | $85,574 | | | 3/19/24 | | | | 2,011 | 3,867 | 7,734 | | | | $164,889 | | Maureen Gillan-Myer | | $0 | $216,750 | $325,125 | | | | | | | | | | 3/19/24 | | | | | | | | 4,987(2) | $44.27 | $61,440 | | | 3/19/24 | | | | | | | 1,391(3) | | | $61,580 | | | 3/19/24 | | | | 1,447 | 2,783 | 5,566 | | | | $118,667 | | Jeffrey M. Levy | | $0 | $253,688 | $380,531 | | | | | | | | | | 3/19/24 | | | | | | | | 5,916 (2) | $44.27 | $72,885 | | | 3/19/24 | | | | | | | 1,650 (3) | | | $73,046 | | | 3/19/24 | | | | 1,717 | 3,301 | 6,602 | | | | $140,755 | | Michael N. Abdo | | $0 | $216,500 | $324,750 | | | | | | | | | | 3/19/24 | | | | | | | | 4,750(2) | $44.27 | $58,520 | | | 3/19/24 | | | | | | | 1,325(3) | | | $58,658 | | | 3/19/24 | | | | 1,379 | 2,651 | 5,302 | | | | $113,039 |

  92. Risk Considerations

    | OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END | | | | | | | | | | Option Awards(1) | | | | | Stock Awards(1) | | | | | Name | Number of Securities Underlying Unexercised Options (#) Exercisable(2) | Number of Securities Underlying Unexercised Options (#) Unexercisable(2) | Option Exercise Price ($/Sh) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(3) | Market Value of Shares or Units of Stock That Have Not Vested ($)(4) | Equity incentive plan awards: number of unearned shares, unit or other rights that have not vested (#)(5) | Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested ($)(5) | | Dimitar A. Karaivanov | 7,028 | 4,686 | $80.01 | 6/09/2031 | 8,487 | $523,478 | 36,864 | $2,273,772 | | | 2,466 | 3,700 | $71.78 | 3/15/2032 | | | | | | | 1,712 | 6,851 | $54.06 | 3/14/2033 | | | | | | | 0 | 19,114 | $44.27 | 3/19/2034 | | | | | | Joseph E. Sutaris | 5,147 | 0 | $59.41 | 3/20/2029 | 4,040 | $249,187 | 17,613 | $1,086,370 | | | 3,000 | 1,382 | $51.64 | 3/17/2030 | | | | | | | 2,988 | 1,993 | $79.66 | 3/16/2031 | | | | | | | 1,397 | 2,097 | $71.78 | 3/15/2032 | | | | | | | 1,167 | 4,668 | $54.06 | 3/14/2033 | | | | | | | 0 | 6,929 | $44.27 | 3/19/2034 | | | | | | Maureen Gillan-Myer | 1,070 | 1,606 | $71.78 | 3/15/2032 | 2,380 | $146,798 | 12,838 | $791,848 | | | 839 | 3,360 | $54.06 | 3/14/2033 | | | | | | | 0 | 4,987 | $44.27 | 3/19/2034 | | | | | | Jeffrey M. Levy | 772 | 0 | $59.41 | 3/20/2029 | 2,857 | $176,220 | 13,153 | $811,277 | | | 1,136 | 569 | $51.64 | 3/17/2030 | | | | | | | 1,024 | 684 | $79.66 | 3/16/2031 | | | | | | | 776 | 1,164 | $71.78 | 3/15/2032 | | | | | | | 842 | 3,368 | $54.06 | 3/14/2033 | | | | | | | 0 | 5,916 | $44.27 | 3/19/2034 | | | | | | Michael N. Abdo | 2,287 | 0 | $38.02 | 3/16/2026 | 2,279 | $140,569 | 8,806 | $543,154 | | | 1,343 | 0 | $57.12 | 3/15/2027 | | | | | | | 1,425 | 0 | $55.92 | 3/20/2028 | | | | | | | 1,338 | 0 | $59.41 | 3/20/2029 | | | | | | | 1,980 | 495 | $51.64 | 3/17/2030 | | | | | | | 892 | 595 | $79.66 | 3/16/2031 | | | | | | | 629 | 944 | $71.78 | 3/15/2032 | | | | | | | 638 | 2,554 | $54.06 | 3/14/2033 | | | | | | | 0 | 4,750 | $44.27 | 3/19/2034 | | | | |

  93. Risk Considerations

    | OPTION EXERCISES AND STOCK VESTED | | | | | | | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(2) | | Dimitar A. Karaivanov | 0 | $0 | 5,443 | $244,620 | | Joseph E. Sutaris | 7,647 | $381,728 | 1,593 | $72,163 | | Maureen Gillan-Myer | 0 | $0 | 1,095 | $55,848 | | Jeffrey M. Levy | 0 | $0 | 839 | $38,007 | | Michael N. Abdo | 2,800 | $100,695 | 661 | $29,943 |

  94. RETIREMENT PLAN BENEFITS

    | PENSION BENEFITS | | | | | | Name | Plan Name | Number of Years Credited Service (#) | Present Value of Accumulated Benefit ($) | Payments During Last Fiscal Year ($) | | Dimitar A. Karaivanov | Community Financial System, Inc. Pension Plan | 4 | $99,769 | $0 | | | Community Financial System, Inc. Restoration Plan | 4 | $109,048 | $0 | | Joseph E. Sutaris | Community Financial System, Inc. Pension Plan | 14 | $1,260,181 | $0 | | | Community Financial System, Inc. Restoration Plan | 14 | $121,935 | $0 | | Maureen Gillan-Myer | Community Financial System, Inc. Pension Plan | 3 | $22,238 | $0 | | | Community Financial System, Inc. Restoration Plan | 3 | $39,131 | $0 | | Jeffrey M. Levy | Community Financial System, Inc. Pension Plan | 7 | $66,309 | $0 | | | Community Financial System, Inc. Restoration Plan | 7 | $42,542 | $0 | | Michael N. Abdo | Community Financial System, Inc. Pension Plan | 11 | $281,794 | $0 | | | Community Financial System, Inc. Restoration Plan | 11 | $51,339 | $0 |

  95. Nonqualified Deferred Compensation Plan

    Nonqualified Deferred Compensation Plan The following table shows the executive contributions, earnings and account balances for the named executives in the Deferred Compensation Plan for Executive Employees of the Company. The Company does not make any contributions to the Plan on behalf of the named executives.

  96. Nonqualified Deferred Compensation Plan

    | NONQUALIFIED DEFERRED COMPENSATION | | | | | | | | Name | Plan Name | Executive Contributions in Last FY ($)(1) | Registrant Contributions in Last FY ($) | Aggregate Earnings in Last FY ($) | Aggregate Withdrawals/ Distributions ($)(2) | Aggregate Balance at Last FYE ($) | | Dimitar A. Karaivanov | Community Financial System, Inc. Deferred Compensation Plan | $89,343 | $0 | $24,502 | $0 | $189,846 | | Joseph E. Sutaris | Community Financial System, Inc. Deferred Compensation Plan | $107,064 | $0 | $194,313 | $0 | $573,048 | | | Wilber National Bank Deferred Compensation Plan | $0 | $0 | $4,074 | $0 | $33,099 | | Maureen Gillan-Myer | Community Financial System, Inc. Deferred Compensation Plan | $0 | $0 | $0 | $0 | $0 | | Jeffrey M. Levy | Community Financial System, Inc. Deferred Compensation Plan | $0 | $0 | $0 | $0 | $0 | | Michael N. Abdo | Community Financial System, Inc. Deferred Compensation Plan | $166,250 | $0 | $57,661 | $0 | $387,305 |

  97. Nonqualified Deferred Compensation Plan

    | (1) The amount in this column was also reported as “Salary” in the Summary Compensation Table. |

  98. Nonqualified Deferred Compensation Plan

    | (2) Amounts in this column reflect transfers to the Supplemental Account Balances in the Company’s Pension Plan from an individual participant’s voluntary contributions to the Deferred Compensation Plan. The account balances in the table have been reduced by the amount transferred. The earnings credited in the Deferred Compensation Plan are based on the account balance prior to the transfers. |

  99. Potential Payment on Termination or Change in Control

    Potential Payment on Termination or Change in Control The Company has entered into an employment agreement with Mr. Karaivanov that provides severance benefits. Ms. Gillan-Myer and Messrs. Sutaris, Levy, and Abdo, are provided severance benefits through the Executive Severance Plan, amended as of July 17, 2024. Under the terms of the respective named executive’s agreement and the Executive Severance Plan, the executives are entitled to post-termination payments in the event that they are no longer employed by the Company because of death, disability, involuntary termination, or a change in control. The triggers for post-termination payments under the respective employment agreements and the Executive Severance Plan are set forth in the descriptions of such document under the section entitled “Employment Agreements.” The following table describes the potential payments and benefits under the Company’s compensation and benefit plans and arrangements to which the named executives would be entitled upon termination of employment, assuming a December 31, 2024 termination date under the agreements and plans in effect as of December 31, 2024.

  100. Potential Payment on Termination or Change in Control

    | Name | Expected Post- Termination Payments ($) | Incremental pension benefit (present value) ($)(1) | Continuation of Medical/Welfare Benefits (present value) ($) | Acceleration of Equity Awards ($)(2) | Total Termination Benefits ($)(3) | | Dimitar A. Karaivanov | | | | | | | • Death | $223,359 | $0 | $0 | $1,539,185 | $1,762,544 | | • Disability | 446,717 | 0 | 0 | 1,539,185 | 1,985,902 | | • Retirement (in good standing) | 0 | 0 | 0 | 1,539,185 | 1,539,185 | | • Involuntary termination without cause | 3,973,500 | 0 | 0 | 1,539,185 | 5,512,685 |

  101. Potential Payment on Termination or Change in Control

    | Name | Expected Post- Termination Payments ($) | Incremental pension benefit (present value) ($)(1) | Continuation of Medical/Welfare Benefits (present value) ($) | Acceleration of Equity Awards ($)(2) | Total Termination Benefits ($)(3) | | • Involuntary or good reason termination after CIC | 3,256,335 | 0 | 69,199 | 3,263,275 | 6,588,809 | | Joseph E. Sutaris | | | | | | | • Death | $396,932 | $0 | $0 | $754,589 | $1,151,521 | | • Disability | 519,291 | 0 | 0 | 754,589 | 1,273,880 | | • Retirement (in good standing) | 0 | 0 | 0 | 754,589 | 754,589 | | • Involuntary Termination without cause | 1,150,937 | 0 | 0 | 754,589 | 1,905,526 | | • Involuntary or good reason termination after CIC | 1,973,034 | 0 | 67,776 | 1,551,064 | 3,591,874 | | Maureen Gillan-Myer | | | | | | | • Death | $320,301 | $0 | $0 | $505,956 | $826,257 | | • Disability | 423,853 | 0 | 0 | 505,956 | 929,809 | | • Retirement (in good standing) | 0 | 0 | 0 | 505,956 | 505,956 | | • Involuntary termination without cause | 949,606 | 0 | 0 | 505,956 | 1,455,562 | | • Involuntary or good reason termination after CIC | 1,627,896 | 0 | 65,130 | 1,084,588 | 2,777,614 | | Jeffrey M. Levy | | | | | | | • Death | $366,005 | $0 | $0 | $543,916 | $909,921 | | • Disability | 478,323 | 0 | 0 | 543,916 | 1,022,239 | | • Retirement (in good standing) | 0 | 0 | 0 | 543,916 | 543,916 | | • Involuntary termination without cause | 578,014 | 0 | 0 | 543,916 | 1,121,930 | | • Involuntary or good reason termination after CIC | 1,156,028 | 0 | 32,644 | 1,152,651 | 2,341,323 | | Michael N. Abdo | | | | | | | • Death | $314,271 | $0 | $0 | $378,860 | $693,131 | | • Disability | 412,042 | 0 | 0 | 378,860 | 790,902 | | • Retirement (in good standing) | 0 | 0 | 0 | 378,860 | 378,860 | | • Involuntary termination without cause | 898,443 | 0 | 0 | 378,860 | 1,277,303 | | • Involuntary or good reason termination after CIC | 1,540,188 | 0 | 8,712 | 807,027 | 2,355,927 |

  102. Potential Payment on Termination or Change in Control

    | (1) The amounts set forth in this column reflect the present value of an additional three years of accumulated benefits under the Company’s Pension Plan. |

  103. Potential Payment on Termination or Change in Control

    | (2) The amounts set forth in this column reflect the value (based on the closing market price of the Company’s common stock on December 31, 2024 of $61.68 per share) of any unvested shares of restricted stock that would become vested upon termination and the intrinsic value of unvested stock options based on the closing market price of the Company’s common stock on December 31, 2024 of $61.68 per share that would become vested upon termination. |

  104. Potential Payment on Termination or Change in Control

    | (3) The Company is not obligated to pay any excise tax gross-up amounts under any employment agreements. |

  105. Potential Payment on Termination or Change in Control

    The amounts shown in the table above do not include other payments and benefits to the extent they are provided on a nondiscriminatory basis to salaried employees generally upon termination of employment, including accrued salary and vacation pay, regular pension benefits under the Company’s Pension Plan, and distribution of plan balances under the Company’s 401(k) Plan.

  106. PAY RATIO

    PAY RATIO As required by the Dodd-Frank Act (as defined below), the Company is providing the following information about the relationship of the annual total compensation of its median employee and the annual total compensation of Mr. Karaivanov, the Company’s President and CEO. For 2024, the annual total compensation of the median employee of the Company (other than the CEO) was $46,464 and the annual total compensation of the CEO, as reported in the Summary Compensation Table on page 56, was $2,700,891. Based on this information, the ratio of the annual total compensation of the CEO to the annual total compensation of the Company’s median employee for 2024 was 58 to 1. To determine the median employee, the Company considered all employees of the Company on December 31, 2024, the determination date. The Company determined the median employee by: (i) collecting the 2024 base salary information contained in its payroll records (base salary of employees hired during the year was annualized) for each such employee, (ii) ranking such base salary of all such employees except for the CEO from lowest to highest, and identifying the employee with the median base salary and (iii) confirming that the median employee’s compensation did not contain any anomalous characteristics which would have a significant impact on the pay ratio. It is important to note that the pay ratio is a number the Company is required to calculate and disclose pursuant to SEC regulations, but it is not a number it uses to determine compensation for any of its employees. The Company cautions Shareholders from using the ratio as a comparison among different companies because the methodology used to determine the median employee by companies may differ and the results will vary based on each company’s industry, geographic location of its workforce, size, and compensation structure.

  107. PAY VERSUS PERFORMANCE

    PAY VERSUS PERFORMANCE As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), and Item 402(v) of Regulation S-K, the Company is providing the following information about the relationship between executive “compensation actually paid” (as computed in accordance with Item 402(v)) and certain financial performance of the Company. The Compensation Committee did not consider this Pay versus Performance disclosure in making its pay decisions for any of the years shown. For further information concerning the Company’s variable pay-for-performance philosophy and how the Company aligns executive compensation with the Company’s performance, refer to “Compensation Discussion and Analysis- Our Compensation Philosophy.”

  108. Pay Versus Performance Table

    Pay Versus Performance Table

  109. Pay Versus Performance Table

    | Year | Summary Compensation Table Total for PEO(1) | Compensation Actually Paid to PEO(2) | Average Summary Compensation Table Total for Non-PEO NEOs(3) | Average Compensation Actually Paid to Non-PEO NEOs(4) | Based On Value of Initial Fixed $100 Investment: | | Net Income (thousands)(7) | Operating PPNR (thousands)(8) | | | | | | | Total Shareholder Return(5) | Peer Group Total Shareholder Return(6) | | | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | 2024 | $2,700,891 | $3,251,228 | $1,050,298 | $1,252,084 | $100.90 | $130.96 | $182,481 | $273,587 | | 2023 | $2,517,123 | $1,778,133 | $1,037,853 | $818,007 | $82.27 | $115.69 | $131,924 | $256,385 | | 2022 | $349,619 | $2,077,067 | $793,121 | $811,479 | $95.92 | $116.15 | $188,081 | $275,066 | | 2021 | $3,154,969 | $3,271,781 | $1,195,097 | $1,177,734 | $110.45 | $124.78 | $189,694 | $247,344 | | 2020 | $5,186,791 | $2,166,297 | $939,963 | $637,487 | $90.33 | $91.32 | $164,676 | $242,053 |

  110. Pay Versus Performance Table

    | 1 | The dollar amounts reported in column (b) are the amounts of total compensation reported for the PEO, which for the years 2020-2023 was Mark E. Tryniski (who retired as the Company’s CEO effective December 31, 2023) and for 2024, Mr. Karaivanov, who was appointed CEO on January 1, 2024. |

  111. Pay Versus Performance Table

    | 2 | The dollar amounts reported in column (c) represent the amount of “compensation actually paid” to the PEO, as computed in accordance with Item 402(v) of Regulation S-K. The amounts set forth in this column do not reflect the amount of compensation earned by or paid to PEO during the applicable year but are calculated in accordance with Item 402(v) as required. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to PEOs’ total compensation as set forth in the Summary Compensation Table for each year to determine the compensation actually paid under Item 402(v): |

  112. Adjustments Made to Calculate Compensation Actually Paid to CEO

    Adjustments Made to Calculate Compensation Actually Paid to CEO

  113. Adjustments Made to Calculate Compensation Actually Paid to CEO

    | Year | Reported Summary Compensation Table Total for PEO | Reported Value of Equity Awards(a) | Equity Award Adjustments(b) | Reported Change in the Actuarial Present Value of Pension Benefits(c) | Pension Benefit Adjustments(d) | Compensation Actually Paid to PEO | | 2024 | $2,700,891 | ($926,330) | $1,484,799 | ($77,732) | $69,600 | $3,251,228 |

  114. Adjustments Made to Calculate Compensation Actually Paid to CEO

    | (a) The grant date fair value of equity awards represents the total of the amounts reported in the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table for year 2024. |

  115. Adjustments Made to Calculate Compensation Actually Paid to CEO

    | (b) The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. The amounts deducted or added in calculating the equity award adjustments are as follows: |

  116. Adjustments Made to Calculate Value of Equity Awards Paid to CEO

    | (c) The amounts included in this column are the amounts reported in “Change in Pension and Nonqualified Deferred Compensation” column of the Summary Compensation Table for 2024. |

  117. Adjustments Made to Calculate Value of Pension Benefits Paid to CEO

    Adjustments Made to Calculate Value of Pension Benefits Paid to CEO

  118. Adjustments Made to Calculate Value of Pension Benefits Paid to CEO

    | Year | Service Cost | Prior Service Cost | Total Pension Benefit Adjustments | | 2024 | $69,600 | $0 | $69,600 |

  119. Adjustments Made to Calculate Value of Pension Benefits Paid to CEO

    | 3 | The dollar amounts reported in column (d) represent the average of the amounts reported for the Company’s named executive officers (NEOs) as a group (excluding the PEO) in the “Total” column of the Summary Compensation Table in each applicable year. The names of each of the NEOs (excluding the PEO) included for purposes of calculating the average amounts in each applicable year are as follows: (i) for 2024, Ms. Gillan-Myer and Messrs, Sutaris, Abdo, and Levy; (ii) for 2023, Ms. Gillan-Myer and Messrs, Sutaris, Karaivanov, and Levy; (iii) for 2022, Ms. Gillan-Myer and Messrs, Sutaris, Karaivanov, Levy, George J. Getman, the Company’s former Executive Vice President and General Counsel, and Joseph F. Serbun, the Company’s former President of Retail Banking; (iv) for 2021, Messrs. Sutaris, Karaivanov, Getman and Serbun; and (v) for 2020, Messrs. Sutaris, Getman, Serbun, and Joseph J. Lemchak, the Company’s former Senior Vice President and Chief Investment Officer. |

  120. Adjustments Made to Calculate Value of Pension Benefits Paid to CEO

    | 4 | The dollar amounts reported in column (e) represent the average amount of “compensation actually paid” to the NEOs as a group (excluding the PEO), as computed in accordance with Item 402(v) of Regulation S-K. The amounts set forth in this column do not reflect the actual average amount of compensation earned by or paid to the NEOs as a group (excluding the PEO during the applicable year but are calculated in accordance with Item 402(v). In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to average total compensation for the NEOs as a group (excluding the PEO) for each year to determine the compensation actually paid, using the same methodology described above in Note 2: |

  121. Adjustments Made to Calculate Compensation Actually Paid to Other NEOs

    Adjustments Made to Calculate Compensation Actually Paid to Other NEOs

  122. Adjustments Made to Calculate Compensation Actually Paid to Other NEOs

    | Year | Average Reported Summary Compensation Table Total for Non-PEO NEOs | Average Reported Value of Equity Awards | Average Equity Award Adjustments(a) | Average Reported Change in the Actuarial Present Value of Pension Benefits | Average Pension Benefit Adjustments(b) | Average Compensation Actually Paid to Non-PEO NEOs | | 2024 | $1,050,298 | ($273,604) | $455,494 | ($36,154) | $56,050 | $1,252,084 |

  123. Adjustments Made to Calculate Compensation Actually Paid to Other NEOs

    | (a) The amounts deducted or added in calculating the total average equity award adjustments are as follows: |

  124. Adjustments Made to Calculate Value of Pension Benefits Paid to Other NEOs

    Adjustments Made to Calculate Value of Pension Benefits Paid to Other NEOs

  125. Adjustments Made to Calculate Value of Pension Benefits Paid to Other NEOs

    | Year | Service Cost | Prior Service Cost | Total Pension Benefit Adjustments | | 2024 | $56,050 | $0 | $56,050 |

  126. Adjustments Made to Calculate Value of Pension Benefits Paid to Other NEOs

    | 5 | Cumulative TSR is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between the Company’s share price at the end and the beginning of the measurement period by the Company’s share price at the beginning of the measurement period. |

  127. Adjustments Made to Calculate Value of Pension Benefits Paid to Other NEOs

    | 6 | Represents the weighted peer group TSR, weighted according to the respective companies’ stock market capitalization at the beginning of each period for which a return is indicated. The peer group used for this purpose is the following published industry index: KBW Regional Banking Index. |

  128. Adjustments Made to Calculate Value of Pension Benefits Paid to Other NEOs

    | 7 | The dollar amounts reported represent the amount of net income reflected in the Company’s audited financial statements for 2024. |

  129. Adjustments Made to Calculate Value of Pension Benefits Paid to Other NEOs

    | 8 | Operating PPNR is a non-GAAP measure that excludes income taxes, provision for credit losses, acquisition expenses, acquisition-related contingent consideration adjustments, restructuring expenses, litigation accrual, loss on sale of investment securities, unrealized loss/(gain) on equity securities and amortization of intangible assets from GAAP net income. See Appendix A for reconciliation of GAAP to non-GAAP measures. This metric represents the sum of the Bank Operating PPNR and Financial Services Operating PPNR which are MIP goal metrics for 2024. |

  130. Analysis of the Information Presented in the Pay versus Performance Table

    Analysis of the Information Presented in the Pay versus Performance Table As described in more detail in the section “Compensation Discussion and Analysis- Our Compensation Philosophy,” the Company’s executive compensation program reflects a variable pay-for-performance philosophy that aligns the NEOs compensation with measures determined by the Compensation Committee to drive long-term value for the Shareholders. While the Company utilizes several performance measures to align executive compensation with Company performance, all of those Company measures are not presented in the Pay versus Performance Table. Moreover, the Company generally seeks to incentivize long-term performance, and therefore the Company’s performance measures may not specifically align with compensation that is actually paid (as computed in accordance with Item 402(v) of Regulation S-K) for a particular year. In accordance with Item 402(v) of Regulation S-K, the Company is providing the following disclosure and, pursuant to SEC rules, the information in this Pay versus Performance section shall not be deemed to be incorporated by reference into any Company filing under the Securities Act of 1933, as amended, or Securities Exchange Act of 1934, as amended, unless expressly incorporated by specific reference in such filing. Compensation Actually Paid and Cumulative TSR The following graph sets forth the relationship between amount of compensation actually paid to the PEO, the average amount of compensation actually paid to the Company’s other NEOs as a group (excluding the PEO), and the Company’s cumulative TSR value over the five years presented in the table. Compensation Actually Paid and Net Income The following graph sets forth the relationship between the amount of compensation actually paid to the PEO, the average amount of compensation actually paid to the Company’s other NEOs as a group (excluding the PEO), and the Company’s net income over the five years presented in the table. Compensation Actually Paid and Operating PPNR (Non-GAAP) The following graph sets forth the relationship between the amount of compensation actually paid to the PEO, the average amount of compensation actually paid to the Company’s other NEOs as a group (excluding the PEO), and the Company’s Operating PPNR (a non-GAAP measure) over the five years presented in the table. Cumulative TSR of the Company and Cumulative TSR of the Peer Group The following graph compares the Company’s cumulative TSR over the five year period to that of KBW Regional Banking Index during the same period (assumes reinvestment of dividends).

  131. Analysis of the Information Presented in the Pay versus Performance Table

    | PROPOSAL TWO: ADVISORY VOTE ON EXECUTIVE COMPENSATION |

  132. Analysis of the Information Presented in the Pay versus Performance Table

    The Company is seeking a non-binding advisory vote from the Shareholders to approve the compensation of the named executives as disclosed in this Proxy Statement pursuant to SEC rules. The compensation of the Company’s named executives is disclosed in the Compensation Discussion and Analysis, the compensation tables, and the other related tables and narrative disclosure contained on pages 39 to 63 of this Proxy Statement. As discussed in those sections, the Board believes that the Company’s pay for performance philosophy and programs provide a strong link between executive compensation and the Company’s short and long-term performance and creation of shareholder value. As noted in the Compensation Discussion and Analysis beginning on page 39, the Company recorded meaningful improvements in net interest income, non-interest income, total revenues, operating revenues, net income, GAAP earnings per share, operating net income, operating earnings per share, operating PPNR, and operating PPNR per share, while maintaining excellent liquidity, solid credit and well-managed expenses. Each of the Company’s four business segments- banking, employee benefit services, insurance services and wealth management services, posted record revenues in 2024, while maintaining solid pre-tax operating margins. Other 2024 milestones include the increase in the Company’s quarterly cash dividend to Shareholders by 2.2%, to $0.46 per share, marking the 32nd consecutive year of annual increases. The Company also delivered record total revenues of $746.3 million representing a 14.4% increase over 2023 total revenues of $652.1 million, $745.6 million of operating revenues (non-GAAP) representing a 5.9% increase over 2023 operating revenue of $704.3 million, and operating net income (non-GAAP) of $193.9 million of representing a 0.6% increase over 2023 operating net income of $192.7 million. The Company’s Compensation Committee considered the Company’s overall achievement levels of performance objectives set forth in the Compensation Discussion and Analysis, including the performance factors noted above, and the achievement levels obtained under the pre-determined short and long term objectives set in the Company’s incentive compensation plans for 2024. The Company is asking the Shareholders to indicate their support for its executive pay program and policies as described in this Proxy Statement. This Proposal, commonly known as a “Say-on-Pay” proposal, gives you as a Shareholder the opportunity to endorse or not endorse the Company’s executive pay program and policies through a non-binding advisory vote on the following resolution: RESOLVED, that the Shareholders approve, on an advisory basis, the compensation of the Company’s named executives, as described in the Compensation Discussion and Analysis, the compensation tables and the other related tables and narrative disclosures contained in this Proxy Statement. The vote on this Proposal is advisory and non-binding. However, the Compensation Committee will take into account the outcome of the vote when considering future executive compensation arrangements. Last year, at the Annual Meeting of Shareholders held in May 2024, the Shareholders approved the Say-on-Pay proposal with approximately 93% of the votes cast voting in favor of the Company’s executive compensation programs. The Compensation Committee considers this to be an indication that our Shareholders believe that the named executives” compensation is aligned with the Company’s performance.