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 Upstate 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, BPAS Trust Company of Puerto Rico, NRS, GTC, and Hand Benefits & Trust Company, provides employee benefit trust, collective investment fund, retirement plan administration, fund administration, transfer agency, 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 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, 2017 filed with the SEC on March 1, 2018).

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, 2018
Net interest income	$	86,060		$	102	$	36	$	0		$	86,198
Provision for loan losses		2,215			0		0		0			2,215
Noninterest revenues		18,002			23,815		14,737		(763	)		55,791
Amortization of intangible assets		1,535			1,970		922		0			4,427
Acquisition expenses		(832	)		0		0		0			(832	)
Other operating expenses		57,863			14,025		10,513		(763	)		81,638
Income before income taxes	$	43,281		$	7,922	$	3,338	$	0		$	54,541
Assets	$	10,440,732		$	205,565	$	66,470	$	(53,200	)	$	10,659,567
Goodwill	$	629,916		$	83,275	$	20,288	$	0		$	733,479

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

(000's omitted)	Banking			Employee Benefit Services		All Other		Eliminations			Consolidated Total
Nine Months Ended September 30, 2018
Net interest income	$	257,313		$	264	$	91	$	0		$	257,668
Provision for loan losses		8,342			0		0		0			8,342
Noninterest revenues		58,399			70,316		43,285		(2,159	)		169,841
Amortization of intangible assets		4,914			6,047		2,819		0			13,780
Acquisition expenses		(782	)		7		6		0			(769	)
Other operating expenses		172,283			41,938		32,603		(2,159	)		244,665
Income before income taxes	$	130,955		$	22,588	$	7,948	$	0		$	161,491

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