SUPPORTING OUR CUSTOMERS, COMMUNITIES AND EMPLOYEESAs an organization that is community based, we are committed to supporting volunteerism, working with small businesses, and serving the broad financial service needs of the communities in our geographic markets. In addition, we recognize that the development and support of the Company’s human capital is an essential element of the Company’s success.
Human Capital Initiatives
• The Company continued to leverage the “MyVoice” program, a Company-wide program to enhance employee satisfaction and engagement by conducting engagement surveys enabling employees to provide input and drive action. The 2025 survey results showed marked improvement over the prior survey.
• The Company develops future leaders through leadership programs which enhance succession and reinforce our commitment to promote from within. Over 146 leaders participated in these leadership development workshops in 2025. The Company’s Leadership Council program also continued in 2025, providing leadership development and direct interaction with the CEO.
• In 2025, the Company’s CEO hosted two town hall meetings to enhance communication and transparency relative to the Company’s strategy and priorities. The Company plans to continue to host town halls twice a year.
• In 2025, the Company implemented Degreed, an on line skill building platform to build skills across the Company and support the Company’s goals of employee development, skill enhancement, and compliance by providing a comprehensive, user-friendly learning ecosystem.
Supporting our Communities
• In 2025, the Company donated more than $4.7 million in contributions and sponsorships to over 1,400 charitable organizations in the Company’s footprint.
• Our employees volunteered 18,000 hours of their time to over 1,000 non-profit organizations in 2025, including those dedicated to underserved and disadvantaged communities.
• Through a program offered by the Federal Home Loan Bank of New York, the Bank was able to facilitate the donation of $50,000 from the Federal Home Loan Bank to 12 charities in the Bank’s New York markets.
• Donations and sponsorships were made in every new community where Community Bank opened a new branch. For each of the branches, a $25 matching donation was made to a nonprofit for every new account/loan opened at that branch. Further, at each ribbon cutting ceremony, sponsorships were announced to enhance the vibrancy of the neighborhood of each branch, including donations to local festivals and celebrations.
Focus on Community Banking
• As part of the Bank’s de novo expansion activities, it opened 6 additional branches in lower- and moderate-income communities in Albany, Buffalo, Rochester, and Syracuse markets with the goal to provides residents with access to essential banking services and supporting local businesses and entrepreneurs with loans and financial advice to foster economic growth in those underserved communities.
• In 2025, the Bank offered several loan programs designed to expand access to credit for low- and moderate-income borrowers. The Bank implemented a Special Purpose Credit Program in Albany, Buffalo, Syracuse, Rochester and Utica to provide 100 percent financing with no private mortgage insurance and no closing costs, helping to promote sustainable homeownership. Through the program, the Bank closed 146 loans totaling $26.8 million.
• During 2025, the Bank made $140.7 million of mortgage loans to low-and moderate-income households in order to enable sustainable homeownership which is a major vehicle for building wealth and economic opportunity.
• Over 100 Bank employees offered financial literacy programs geared towards students and adults, including programs offered in elementary and high schools and, in collaboration with our community partners, programs focused on adults in low and moderate income communities.
•The Bank’s commercial lending professionals are committed to serving business owners in underserved markets within its footprint, striving to expand access to financial services and products. They offer credit support of up to $2,000,000, along with a comprehensive portfolio of small business banking solutions.
•The Bank collaborates with government agencies to provide lending programs for low- and moderate-income borrowers, small businesses and specialized loan products for agricultural enterprises. It has financed a wide range of community development projects designed to enrich and revitalize the areas it serves, including funding for healthcare facilities, solar energy companies, farming operations, addiction counseling services, places of worship, and ambulance companies. Through these initiatives, the Bank aims to offer support and opportunities that help cultivate strong, resilient communities for its customers, employees, and stakeholders.
Corporate Responsibility
The Company understands 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. Our strategy is grounded in our core values and mission as a community financial institution, ensuring our efforts reflect the nature and scale of our business, respect the environment, and keep pace with evolving industry standards.
Below is an overview of our notable efforts throughout 2025 and 2026 to support our people, our customers and communities and our environment.
COMMITMENT TO OUR PEOPLE - HUMAN CAPITAL INITIATIVES
We recognize that our people are essential to our success and are committed to supporting the development and well-being of each individual in a collaborative and inclusive environment.
Commitment to Our Core Values. The Company continues to commit to our set of core values to guide our employees and exemplify our commitment to each other, our customers, our Shareholders, and the communities we serve:
| Core values by which we act: |
| Integrity | We do the right thing. |
| Excellence | We always bring our best. |
| Teamwork | We work together. |
| Humility | We respect everyone. |
These core values represent the Company’s focus on people – our customers, our communities, our Shareholders and each other and serve as the foundation that supports and drives the Company’s corporate responsibility initiatives.
Alignment of Management Incentive Objectives with Goals. The Compensation Committee is responsible for the oversight of the Company’s human capital management, including regular review of succession planning and talent development programs. In order to demonstrate the Board’s commitment to corporate responsibility, human capital initiatives continue to be a goal included in the Company’s 2025 and 2026 Management Incentive Plans.
Commitment to Employee Engagement – MyVoice Survey. The Company is committed to creating a top tier workplace filled with highly satisfied and engaged employees. The Company believes that open and honest communication among employees, managers and executive leadership fosters a collaborative work environment where everyone can participate, develop, and thrive. In 2025, the Company continued its commitment to strengthen employee engagement within the MyVoice initiative, launching another company-wide survey in April. All survey areas improved from the prior survey, with the largest gains in Recognition, Enthusiasm about the Future, and Accountability, indicating strong advances in engagement for employees.
Commitment to Fair Pay. The Company’s compensation philosophy includes elements that reinforce our core values, reward our employees for their achievement and maximize continued performance with long term retention. We employ various benchmarking measures to ensure our employees are paid fairly based on their job and performance. In 2025, we conducted targeted workforce planning sessions across all of our business areas to ensure market competitive pay for our employees and to support our commitment to the professional development of our employees. In further commitment to pay transparency and fair pay, the Company includes the minimum and maximum annual salary or hourly pay range when advertising a job, promotion, or transfer opportunity in all internal and external job postings regardless of the state or location of the position, as well as conducts an annual pay parity review to insure appropriate pay across the organization.
Click here to see more information about our “Work Happy” Mission and our commitment to our employees by providing the highest level of employee support, whether through our benefits, our professional development or our challenging but rewarding professional experiences.
COMMITMENT TO OUR COMMUNITY, OUR CUSTOMERS, AND THE ENVIRONMENT
The Company has a longstanding commitment to operating responsibility in our business activities, including striving to have an impact in the communities we serve. In addition to the initiatives and achievements noted on page 8, set forth below are key environmental and community initiatives we focused on in 2025:
Commitment to Helping Others. In an effort to maximize the Company’s impact on the communities where our customers and employees live, the Company’s charitable giving priorities in 2025 were focused on supporting the following initiatives: (i) basic needs (such as food security, shelter, and heat); (ii) health organizations; (iii) education (with a focus on financial literacy, mentoring, building future skills with youth, and workforce/community development); (iv) environment, sustainability and conservation; (v) community pride and culture; and (vi) emergency response and disaster preparedness.
We remain committed to strengthening the communities we serve through encouraging employee volunteerism and corporate engagement with a focus on serving those who are underserved in the local communities where we do business. We do this through financial support, in-kind donations, community engagement, and volunteer service. In 2025, the Company launched the Volunteer Time Off Program, which encourages eligible employees to take up to 16 hours of paid time off to volunteer their time. In addition, our employees gave generously of their time and expertise by donating over 18,000 volunteer hours during 2025. They actively participated in over 1,000 causes and organizations, with 400 employees serving on the boards and committees of these organizations.
In addition to encouraging our employees to donate their time and talents, the Company made over $4.7 million in donations, grants and sponsorships in the communities where the Company operates during 2025. In 2025, the Company announced an employee matching gift program. For the first time, every employee was provided with the opportunity to have their personal contributions to a qualifying nonprofit organization matched - up to $250. More than 150 employees participated and 130 nonprofits benefited, which resulted in $38,000 of donations.
Click here to see more information about our Community Involvement initiatives and our most recent Community Report.
Commitment to Community-Focused Mortgage Banking. For more than 160 years, the Bank has focused on serving the financial needs of its customers. The Bank offers several lending programs sponsored by local, state, and federal agencies designed to encourage first time home ownership, affordable home mortgages for those in lower and moderate-income groups, and mortgages for those living in rural areas that would not be eligible for traditional mortgage products. In addition, the Bank offers mortgages with up to 90% loan-to-value ratios without the requirement of mortgage insurance (typically required in loan-to-value ratios over 80%), and a “No Closing Cost” mortgage product that facilitates the ability of borrowers to attain home ownership with a product that provides for the Bank to absorb mortgage related closing costs, such as filing fees, bank legal fees, appraisal, application, and underwriting/processing fees, provided that the borrower does not prepay the mortgage within three years of the closing. The Bank also provides community development lending products such as Veteran Administration mortgages to create a broader pool of borrowers and help make home ownership possible for borrowers who may not qualify for traditional mortgages.
In addition, the Bank participates in the Federal National Mortgage Association’s HomeReady Mortgage Program and the Homebuyer Dream Program through the Federal Home Loan Bank of New York’s Affordable Housing Program. Furthermore, the Bank utilizes the Affordable Homeownership Grant Program for low- and moderate-income individuals through partnerships with nonprofit housing agencies. The Bank also participates in the USDA Guaranteed Rural Housing Program and is an approved USDA lender.
Protecting our Customers’ Data. We are committed to providing a high level of customer care including measures to safeguard our customers’ data. The Company has developed a cybersecurity program and framework which is administered by a team of experienced professionals, including the Company’s Chief Risk Officer and Chief Information Security Officer (“CISO”), and supported by external technology and consulting services. The Company’s Risk Committee is responsible for the oversight of the cybersecurity program. The Chair of the Risk Committee, Ms. MacPherson, has cybersecurity oversight experience and has received the Cybersecurity Oversight Certification issued by the National Association of Corporate Directors. In an effort to remain vigilant against cybersecurity attacks, the Company further provides annual and ongoing training to all of its employees so that they have an understanding and appreciation of the cybersecurity environment and risks and the Company’s policies to combat such risks. Such training includes annual mandatory training sessions on cybersecurity for all employees, periodic informational notices regarding emerging threats, and periodic testing to ensure employees are reporting suspicious activities and are diligent in their efforts to avoid phishing attacks and cybersecurity breaches. The CISO also conducts and participates in annual table top exercises with management and on occasion, with representatives from the Board, in order to be prepared in the event of a material cybersecurity event.
Ethical Business Practices. Our Code of Business Conduct and Ethics makes clear our expectations for the conduct of our Directors, officers and employees. Among other things, our Code reinforces the Company’s commitment to comply with anti-corruption and anti-bribery laws, and as of March 23, 2026, the Company has not been fined in connection with any violation of any anti-corruption or anti-bribery law. We ensure compliance with the Code through training and monitoring so that we can maintain our track record of business success based upon the highest level of ethics and professionalism. Further, we do not debank or discriminate against any customers or potential customers on the basis of their political or religious beliefs or lawful business activities. Our banking employees are required to complete online training and testing to verify their understanding of certain legal requirements, including training on unfair, deceptive or abusive acts and practices, fair lending, and anti-money laundering.
Investment in Solar Tax Equity Fund. In 2025, the Company invested $8,500,000 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. The Company has made a further commitment of $10,000,000 in 2026.
Other Environmental Initiatives. The Company supports environmental and sustainability objectives by encouraging recycling and responsible waste management practices throughout the organization. We continue to evaluate opportunities to reduce energy consumption in areas such as facilities, equipment, and operations by moving to more efficient information technology equipment, HVAC systems, lighting and use of technology solutions to reduce our energy usage. In 2025, in connection with build out of the Company’s new Syracuse, New York headquarters, the Company utilized high efficiency building systems and sustainable interior elements. Likewise, in connection with its 17 new branch locations and facilities that opened in 2025, the Company used HVAC and lighting systems that meet or exceed New York State Energy Conservation Construction Code requirements, along with sourcing sustainable materials. In addition, we recycle all of our electronics through appropriate channels to ensure that harmful substances do not pollute the environment, and in 2025, we recycled an estimated 28,750 pounds of electronic equipment.
CORPORATE GOVERNANCE
We are committed to strong corporate governance policies, practices, and procedures designed to make the Board more effective in exercising its oversight role. The following section provides an overview of the Company’s corporate governance structure, including key governance documents that guide the Board and management in the performance of their duties which are regularly reviewed by the Board.
Click here to see our Annual Proxy Statement for more information about our corporate policies, practices, and procedures.
BEST PRACTICES
The Board and management regularly review best practices in corporate governance and are committed to a structure that fosters principled actions, informed and effective decision-making, and appropriate monitoring of risk, compliance, and performance. The Governance Committee is responsible for the review and oversight of the Company’s corporate governance practices and is responsible for updating the Board on best corporate governance practices.
| Independent Oversight | Long-Term Alignment with Shareholders | Strong Commitment to Excellence on the Board |
| Strong and engaged independent Chair of the Board. Separation of the Chair of the Board and CEO roles allows the CEO to focus on leadership and management of the Company while utilizing the independent Chair’s experience and perspective. | Annual election of Directors with focus on assessment of skills and experience, refreshment and succession planning. | Addition of several new independent Directors over the last five years to enhance the Board’s composition, expertise and skill sets. |
| All current Directors on the Board are independent Directors with the exception of Mr. Karaivanov. | Robust stock ownership guidelines for Directors and named executives. | Annual Board and key Committee evaluations focused on improving Board and Committee performance. In 2024, the Board engaged an independent consultant to conduct the Board’s annual evaluation. |
| Key committees (Governance, Compensation, and Audit) are fully independent. | Majority voting standard for uncontested elections of Directors provides for heightened accountability to the Company’s Shareholders. | Annual evaluation of CEO and senior management and review of succession plans. |
| Regular executive sessions of independent Directors. Appointment of Lead Director. Policy of regular rotation of leadership positions on Board. | Open discussions and communications with Shareholders to engage on topics. | The Company’s policies prohibit manipulating the timing of material non-public information to benefit equity grant recipients, short sales, transactions in derivatives, and hedging of Company stock by Directors, executive officers and employees, and prohibits pledging of Company stock without prior written consent from the Company. |
The Company is dedicated to being a financial industry leader in corporate governance and business ethics. With the exception of the Company’s Chief Executive Officer, the Board is comprised entirely of independent Directors, whose diverse backgrounds contribute a broad range of knowledge, perspectives and business experience. Over the past several years, the Company has meaningfully enhanced the Board’s skills, experience, and overall composition. As part of the Company’s ongoing succession planning efforts, we will continue to consider a diverse pool of qualified candidates to further strengthen the Board’s collective skills and experience.
The Company promotes an effective enterprise risk management framework that begins with leadership and is designed to serve the interests of the Company, its customers, and its shareholders. The Board has adopted a Code of Business Conduct and Ethics that clearly articulates its expectations for the conduct of Directors, officers, and employees. Compliance with the Code is supported through training and monitoring programs, reinforcing the Company’s longstanding commitment to conducting business with the highest standards of ethics, integrity, and professionalism.