SEGMENT INFORMATION

3 Months Ended

Mar. 31, 2024

SEGMENT INFORMATION

SEGMENT INFORMATION

NOTE L: SEGMENT INFORMATION

Operating segments are components of an enterprise, which are evaluated regularly by the CODM in deciding how to allocate resources and assess performance. The Company’s CODM is the President and Chief Executive Officer of the Company. Effective January 1, 2024, the Company has identified (1) Banking and Corporate; (2) Employee Benefit Services; (3) Insurance; and (4) Wealth Management as its reportable segments and determined that operating income before income taxes is the reportable measure of segment profit or loss that the CODM regularly reviews and uses to allocate resources and assess performance. See Note C for further detail on the factors used to identify the Company’s reportable segments and reportable measure of segment profit or loss.

CBNA operates the Banking and Corporate segment that provides a wide array of lending and depository-related products and services to individuals, businesses, and governmental units with branch locations in Upstate New York as well as Northeastern Pennsylvania, Vermont and Western Massachusetts. In addition to these general intermediation services, the Banking and Corporate segment provides treasury management solutions and payment processing services. The Banking and Corporate segment also includes certain corporate overhead-related expenses.

The Employee Benefit Services segment, which includes the operating subsidiaries of Benefit Plans Administrative Services, LLC, BPAS Actuarial and Pension Services, LLC, BPAS Trust Company of Puerto Rico, Fringe Benefits Design of Minnesota, Inc. (“FBD”), Northeast Retirement Services, LLC (“NRS”), Global Trust Company, Inc. (“GTC”), and Hand Benefits & Trust Company, provides employee benefit trust, collective investment fund, retirement plan and health savings account administration, fund administration, transfer agency, actuarial, and health and welfare consulting services.

The Insurance segment is comprised of personal and commercial lines of insurance and other risk management products and services provided by OneGroup NY, Inc.

The Wealth Management segment is comprised of wealth management services including trust services provided by the Nottingham Trust division within the Bank, broker-dealer and investment advisory services provided by Community Investment Services, Inc., The Carta Group, Inc. and OneGroup Wealth Partners, Inc. as well as asset management services provided by Nottingham Advisors, Inc.

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, 2023 filed with the SEC on February 29, 2024) except as follows. Operating noninterest revenues exclude certain items considered non-core to the underlying business including realized and unrealized gains or losses on investment securities and gains or losses on debt extinguishment. Operating noninterest expenses also exclude certain items considered non-core to the underlying business including amortization of intangible assets, acquisition expenses, acquisition-related contingent consideration adjustments, litigation accrual and restructuring expenses. Both operating noninterest revenues and operating noninterest expenses include certain intersegment activity associated with transactions between the segments and are eliminated in consolidation. Segment assets include certain segment cash balances held as deposits with CBNA and are eliminated in consolidation.

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

	Banking and		Employee				Wealth
(000’s omitted)	Corporate		Benefit Services		Insurance		Management		Total
Three Months Ended March 31, 2024
Net interest income	$	106,214	$	623	$	27	$	126	$	106,990
Provision for credit losses		6,148		0		0		0		6,148
Operating noninterest revenues		18,185		32,570		11,127		9,636		71,518
Operating noninterest expenses		78,227		20,333		10,123		6,920		115,603
Operating income before income taxes	$	40,024	$	12,860	$	1,031	$	2,842	$	56,757
Assets	$	15,632,930	$	254,668	$	64,337	$	35,138	$	15,987,073
Goodwill	$	732,598	$	89,778	$	23,979	$	3,435	$	849,790
Core deposit intangibles & Other intangibles, net	$	8,143	$	30,792	$	13,757	$	1,957	$	54,649
Reconciliation of total segment operating income before income taxes to total consolidated income before income taxes:
Total segment operating income before income taxes	$	40,024	$	12,860	$	1,031	$	2,842	$	56,757
Unrealized gain on equity securities		16		0		0		0		16
Amortization of intangible assets		(973)		(1,725)		(673)		(205)		(3,576)
Acquisition expenses		0		(35)		0		0		(35)
Litigation accrual		0		0		(119)		0		(119)
Total consolidated income before income taxes									$	53,043
Reconciliation of total segment operating noninterest revenues to total consolidated noninterest revenues:
Total segment operating noninterest revenues									$	71,518
Elimination of intersegment revenues										(1,249)
Unrealized gain on equity securities										16
Total consolidated noninterest revenues									$	70,285
Reconciliation of total segment operating noninterest expenses to total consolidated noninterest expenses:
Total segment operating noninterest expenses									$	115,603
Elimination of intersegment expenses										(1,249)
Amortization of intangible assets										3,576
Acquisition expenses										35
Litigation accrual										119
Total consolidated noninterest expenses									$	118,084
Reconciliation of total segment assets to total consolidated assets:
Total segment assets									$	15,987,073
Elimination of intersegment cash and deposits										(128,403)
Total consolidated assets									$	15,858,670

	Banking and		Employee				Wealth
(000's omitted)	Corporate		Benefit Services		Insurance		Management		Total
Three Months Ended March 31, 2023
Net interest income	$	110,682	$	254	$	35	$	59	$	111,030
Provision for credit losses		3,500		0		0		0		3,500
Operating noninterest revenues		16,445		30,187		11,548		8,637		66,817
Operating noninterest expenses		78,413		18,274		8,781		6,095		111,563
Operating income before income taxes	$	45,214	$	12,167	$	2,802	$	2,601	$	62,784
Assets	$	15,045,902	$	229,091	$	61,244	$	29,123	$	15,365,360
Goodwill	$	733,064	$	85,384	$	21,990	$	2,498	$	842,936
Core deposit intangibles & Other intangibles, net	$	11,629	$	31,778	$	13,040	$	1,531	$	57,978
Reconciliation of total segment operating income before income taxes to total consolidated income before income taxes:
Total segment operating income before income taxes	$	45,214	$	12,167	$	2,802	$	2,601	$	62,784
Loss on sales of investment securities		(52,329)		0		0		0		(52,329)
Gain on debt extinguishment		242		0		0		0		242
Amortization of intangible assets		(1,206)		(1,633)		(630)		(198)		(3,667)
Acquisition expenses		(17)		0		(40)		0		(57)
Total consolidated income before income taxes									$	6,973
Reconciliation of total segment operating noninterest revenues to total consolidated noninterest revenues:
Total segment operating noninterest revenues									$	66,817
Elimination of intersegment revenues										(1,235)
Loss on sales of investment securities										(52,329)
Gain on debt extinguishment										242
Total consolidated noninterest revenues									$	13,495
Reconciliation of total segment operating noninterest expenses to total consolidated noninterest expenses:
Total segment operating noninterest expenses									$	111,563
Elimination of intersegment expenses										(1,235)
Amortization of intangible assets										3,667
Acquisition expenses										57
Total consolidated noninterest expenses									$	114,052
Reconciliation of total segment assets to total consolidated assets:
Total segment assets									$	15,365,360
Elimination of intersegment cash and deposits										(109,407)
Total consolidated assets									$	15,255,953