NOTE Q:

PARENT COMPANY STATEMENTS

The condensed statements of condition of the parent company, Community Bank System, Inc., at December 31 are as follows:

(000’s omitted)	2018		2017
Assets:
Cash and cash equivalents	$	116,133	$	84,460
Investment securities		3,452		4,322
Investment in and advances to:
Bank subsidiary		1,522,109		1,511,780
Non-bank subsidiaries		182,617		169,341
Other assets		8,957		9,150
Total assets	$	1,833,268	$	1,779,053

Liabilities and shareholders’ equity:
Accrued interest and other liabilities	$	21,546	$	20,924
Borrowings		97,939		122,814
Shareholders’ equity		1,713,783		1,635,315
Total liabilities and shareholders’ equity	$	1,833,268	$	1,779,053

The condensed statements of income of the parent company for the years ended December 31 is as follows:

(000’s omitted)	2018			2017			2016
Revenues:
Dividends from subsidiaries:
Bank subsidiary	$	98,000		$	91,000		$	89,000
Non-bank subsidiaries		9,250			35,500			1,750
Interest and dividends on investments		161			133			102
Total revenues		107,411			126,633			90,852
Expenses:
Interest on borrowings		4,677			3,904			2,949
Acquisition expenses		0			91			429
Loss on debt prepayment		318			0			0
Other expenses		131			26			11
Total expenses		5,126			4,021			3,389

Income before tax benefit and equity in undistributed net income of subsidiaries		102,285			122,612			87,463
Income tax benefit		1,330			1,930			866
Income before equity in undistributed net income of subsidiaries		103,615			124,542			88,329
Equity in undistributed net income of subsidiaries		65,026			26,175			15,483
Net income	$	168,641		$	150,717		$	103,812
Other comprehensive (loss), net of tax:
Changes in other comprehensive (loss)/income related to pension and other post retirement obligations		(11,204	)		168			3,322
Changes in other comprehensive loss related to unrealized losses on available-for-sale securities		(30,402	)		(11,065	)		(14,714	)
Other comprehensive loss		(41,606	)		(10,897	)		(11,392	)
Comprehensive income	$	127,035		$	139,820		$	92,420

The statements of cash flows of the parent company for the years ended December 31 is as follows:

(000’s omitted)	2018			2017			2016
Operating activities:
Net income	$	168,641		$	150,717		$	103,812
Adjustments to reconcile net income to net cash provided by operating activities
Equity in undistributed net income of subsidiaries		(65,026	)		(26,175	)		(15,483	)
Net change in other assets and other liabilities		(1,084	)		1,870			(215	)
Net cash provided by operating activities		102,531			126,412			88,114
Investing activities:
Proceeds from redemption of investment securities		776			0			0
Cash paid for acquisitions, net of cash acquired of $0, $150,534, and $0, respectively		0			(139,471	)		0
Capital contributions to subsidiaries		0			(11,063	)		0
Net cash provided by/(used in) investing activities		776			(150,534	)		0
Financing activities:
Repayment of borrowings		(25,207	)		0			0
Issuance of common stock		12,507			9,700			15,326
Purchase of treasury stock		(298	)		(3,306	)		(3,470	)
Sale of treasury stock		12,561			10,060			8,888
Increase in deferred compensation arrangements		298			3,306			0
Cash dividends paid		(71,495	)		(62,305	)		(55,048	)
Net cash used in financing activities		(71,634	)		(42,545	)		(34,304	)
Change in cash and cash equivalents		31,673			(66,667	)		53,810
Cash and cash equivalents at beginning of year		84,460			151,127			97,317
Cash and cash equivalents at end of year	$	116,133		$	84,460		$	151,127

Supplemental disclosures of cash flow information:
Cash paid for interest	$	4,857		$	3,826		$	2,909
Supplemental disclosures of noncash financing activities
Dividends declared and unpaid	$	19,808		$	17,460		$	14,268
Capital contributions to subsidiaries		0			513,769			0
Common stock issued for acquisition		0			343,132			0