NOTE M: SEGMENT INFORMATION

Operating segments are components of an enterprise, which are evaluated regularly by the “chief operating decision maker” in deciding how to allocate resources and assess performance. The Company’s chief operating decision maker is the President and Chief Executive Officer of the Company. The Company has identified Banking, Employee Benefit Services and All Other as its reportable operating business segments. Community Bank, N.A. (the “Bank” or “CBNA”) operates the Banking segment that provides full-service banking to consumers, businesses, and governmental units in Northern, Central, and Western New York as well as Northeastern Pennsylvania, Vermont and Western Massachusetts. Employee Benefit Services, which includes the operating subsidiaries Benefit Plans Administrative Services, LLC, BPAS Actuarial and Pension Services, LLC (formerly Harbridge Consulting Group, LLC), BPAS Trust Company of Puerto Rico, NRS, GTC, and Hand Benefits & Trust Company, provides employee benefit trust, collective investment fund, retirement plan administration, actuarial, VEBA/HRA, and health and welfare consulting services. The All Other segment is comprised of: (a) wealth management services including trust services provided by the personal trust unit within the Bank, broker-dealer and investment advisory services provided by Community Investment Services, Inc. (“CISI”), and The Carta Group, Inc., as well as asset management provided by Nottingham Advisors, Inc., and (b) full-service insurance, risk management and employee benefit services provided by OneGroup. The accounting policies used in the disclosure of business segments are the same as those described in the summary of significant accounting policies (See Note A, Summary of Significant Accounting Policies of the most recent Form 10-K for the year ended December 31, 2016 filed with the SEC on March 1, 2017).

Information about reportable segments and reconciliation of the information to the consolidated financial statements follows:

(000's omitted)	Banking		Employee Benefit Services		All Other		Eliminations			Consolidated Total
Three Months Ended September 30, 2017
Net interest income	$	84,227	$	104	$	64	$	0		$	84,395
Provision for loan losses		2,314		0		0		0			2,314
Noninterest revenues		20,120		21,207		12,298		(684	)		52,941
Amortization of intangible assets		1,796		2,323		830		0			4,949
Acquisition expenses		534		11		35		0			580
Other operating expenses		56,926		12,788		9,217		(684	)		78,247
Income before income taxes	$	42,777	$	6,189	$	2,280	$	0		$	51,246
Assets	$	10,613,065	$	226,812	$	77,802	$	(67,461	)	$	10,850,218
Goodwill	$	629,153	$	84,448	$	17,904	$	0		$	731,505

Three Months Ended September 30, 2016
Net interest income	$	68,375	$	39	$	49	$	0		$	68,463
Provision for loan losses		1,790		0		0		0			1,790
Noninterest revenues		17,756		11,680		11,139		(623	)		39,952
Amortization of intangible assets		665		96		598		0			1,359
Acquisition expenses		2		0		0		0			2
Other operating expenses		47,736		9,020		8,732		(623	)		64,865
Income before income taxes	$	35,938	$	2,603	$	1,858	$	0		$	40,399
Assets	$	8,658,308	$	36,706	$	72,147	$	(39,415	)	$	8,727,746
Goodwill	$	440,870	$	8,019	$	16,253	$	0		$	465,142

(000's omitted)	Banking		Employee Benefit Services		All Other		Eliminations			Consolidated Total
Nine Months Ended September 30, 2017
Net interest income	$	229,233	$	276	$	189	$	0		$	229,698
Provision for loan losses		5,603		0		0		0			5,603
Noninterest revenues		54,049		59,961		36,510		(2,035	)		148,485
Amortization of intangible assets		3,520		6,256		2,204		0			11,980
Acquisition expenses		23,784		1,190		218		0			25,192
Other operating expenses		160,311		37,225		27,557		(2,035	)		223,058
Income before income taxes	$	90,064	$	15,566	$	6,720	$	0		$	112,350

Nine Months Ended September 30, 2016
Net interest income	$	203,394	$	117	$	139	$	0		$	203,650
Provision for loan losses		5,436		0		0		0			5,436
Noninterest revenues		49,663		36,137		32,989		(1,784	)		117,005
Amortization of intangible assets		2,075		326		1,803		0			4,204
Acquisition expenses		101		0		241		0			342
Other operating expenses		143,781		27,899		25,809		(1,784	)		195,705
Income before income taxes	$	101,664	$	8,029	$	5,275	$	0		$	114,968