NOTE U: 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. The Company has identified (1) Banking and Corporate, (2) Employee Benefit Services, (3) Insurance Services, and (4) Wealth Management Services as its reportable segments and determined that segment adjusted income before income taxes is the reported measure of segment profit or loss. See Note A for further detail on the factors used to identify the Company’s reportable segments and reported 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, Western Massachusetts and Southern New Hampshire. 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 BPA, BPAS-APS, BPAS Trust Company of Puerto Rico, NRS, GTC, HB&T and HSI, provides employee benefit trust, collective investment fund, retirement plan and health savings account administration, fund administration, transfer agency, actuarial, health and welfare consulting services and introducing broker-dealer services.

The Insurance Services segment includes the operating subsidiary OneGroup, a full-service insurance agency offering personal and commercial lines of insurance and other risk management products and services, as well as the Company’s equity method investment in Leap.

The Wealth Management Services 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 NISI and Wealth Partners, as well as asset management services provided by Nottingham.

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) except as follows. Segment operating revenues exclude certain items considered non-core to the operating performance of the business including realized and unrealized gains or losses on investment securities. Significant segment expenses are the expense categories significant to the segment, regularly provided to or easily computed from information regularly provided to the CODM and included in segment adjusted income before income taxes. Segment adjusted income before income taxes also excludes certain items considered non-core to the operating performance of the business including amortization of intangible assets, acquisition expenses, acquisition-related contingent consideration adjustments, litigation accrual and restructuring expenses. Both segment operating revenues and significant segment 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.

The CODM uses segment adjusted income before income taxes to measure performance and allocate resources, including employees, property and financial or capital resources, for all of the Company’s segments. The CODM considers current period actual-to-current period budget and current period actual-to-prior period actual variances on a monthly basis for each of the Company’s segments along with comparisons of the actual segment results with one another. Segment adjusted income before income taxes is also used as a factor in the determination of incentive compensation for key employees of the segments including the segment leaders.

There are no transactions with a single customer that result in revenues that exceed ten percent of consolidated total revenues.

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


			Employee				Wealth
	Banking and		Benefit		Insurance		Management
(000’s omitted)	Corporate		Services		Services		Services		Total
Year Ended December 31, 2025
Net interest income from external customers	$	506,014	$	536	$	0	$	0	$	506,550
Noninterest revenues from external customers		82,751		137,006		54,410		37,200		311,367
Revenues from external customers		588,765		137,542		54,410		37,200		817,917
Equity in net loss of investees accounted for by the equity method		0		0		(285)		0		(285)
Intersegment revenues		(1,972)		4,821		303		2,231		5,383
		586,793		142,363		54,428		39,431		823,015

Reconciliation of revenues (segment operating revenues):
Elimination of intersegment revenues										(5,383)
Other revenues ^(a)										375
Total consolidated revenues									$	818,007

Less segment expenses: ^(b)
Provision for credit losses		21,350		0		0		0
Salaries and employee benefits		194,341		65,081		35,250		22,716
Data processing and communications		58,987		4,659		3,638		2,877
Occupancy and equipment		42,355		3,768		1,677		553
Legal and professional fees		10,903		6,772		516		519
Business development and marketing		13,815		353		892		75
Other segment items ^(c)		29,505		5,883		1,928		625
Segment adjusted income before income taxes	$	215,537	$	55,847	$	10,527	$	12,066	$	293,977

Reconciliation of profit or loss (segment adjusted income before income taxes):
Unrealized gain on equity securities										375
Amortization of intangible assets										(13,846)
Restructuring expenses										(1,499)
Acquisition expenses										(3,663)
Litigation accrual										50
Total consolidated income before income taxes									$	275,394

Other segment disclosures:
Interest income	$	698,739	$	2,586	$	200	$	592	$	702,117

Reconciliation of interest income:
Elimination of intersegment interest income										(2,842)
Total consolidated interest income									$	699,275

Interest expense	$	195,567	$	0	$	0	$	0	$	195,567

Reconciliation of interest expense:
Elimination of intersegment interest expense										(2,842)
Total consolidated interest expense									$	192,725

Depreciation ^(d)	$	14,271	$	704	$	401	$	201	$	15,577
Amortization of intangible assets		2,496		7,078		3,770		502		13,846
Goodwill		764,558		91,046		28,708		3,663		887,975
Core deposit intangibles, net		14,754		0		0		0		14,754
Other intangibles, net		522		19,905		17,990		1,570		39,987
Segment assets		17,018,395		250,457		115,108		42,835		17,426,795

Reconciliation of segment assets:
Elimination of intersegment cash and deposits										(123,499)
Total consolidated assets									$	17,303,296

^(a)	Other revenues includes $375 of unrealized gain on equity securities.

^(b)	The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM. Intersegment expenses are included within the amounts shown.

^(c)	Other segment items for each reportable segment includes:

Banking and Corporate – FDIC insurance expense, office supplies and postage expense, fraud losses and other writedowns, education, recruiting and travel expense and various miscellaneous expenses partially offset by a benefit related to the non-service related components of the Company’s pension.

Employee Benefit Services – Certain intersegment technology and rent related overhead expense allocations, education, recruiting and travel expense, office supplies and postage expense and various miscellaneous expenses partially offset by a benefit related to the non-service related components of the Company’s pension.

Insurance Services – Education, recruiting and travel expense, certain intersegment technology and rent related overhead expense allocations and various miscellaneous expenses partially offset by a benefit related to the non-service related components of the Company’s pension.

Wealth Management Services – Education, recruiting and travel expense, certain intersegment technology and rent related overhead expense allocations and various miscellaneous expenses partially offset by a benefit related to the non-service related components of the Company’s pension.

^(d)	The amount of depreciation disclosed by reportable segment is included within the data processing and communications and occupancy and equipment expense captions.


			Employee				Wealth
	Banking and		Benefit		Insurance		Management
(000’s omitted)	Corporate		Services		Services		Services		Total
Year Ended December 31, 2024
Net interest income from external customers	$	448,593	$	524	$	0	$	0	$	449,117
Noninterest revenues from external customers		77,278		132,244		50,249		36,671		296,442
Revenues from external customers		525,871		132,768		50,249		36,671		745,559
Intersegment revenues		(1,909)		4,618		220		1,998		4,927
		523,962		137,386		50,469		38,669		750,486

Reconciliation of revenues (segment operating revenues):
Elimination of intersegment revenues										(4,927)
Other revenues ^(a)										744
Total consolidated revenues									$	746,303

Less segment expenses: ^(b)
Provision for credit losses		22,773		0		0		0
Salaries and employee benefits		182,270		63,715		34,566		23,494
Data processing and communications		51,563		4,068		3,473		2,739
Occupancy and equipment		37,740		3,822		1,576		597
Legal and professional fees		9,684		5,175		748		430
Business development and marketing		14,805		199		947		108
Other segment items ^(c)		27,975		4,663		1,767		774
Segment adjusted income before income taxes	$	177,152	$	55,744	$	7,392	$	10,527	$	250,815

Reconciliation of profit or loss (segment adjusted income before income taxes):
Unrealized gain on equity securities										1,231
Amortization of intangible assets										(14,259)
Loss on sales of investment securities										(487)
Acquisition expenses										(213)
Acquisition-related contingent consideration adjustments										(244)
Litigation accrual										(138)
Total consolidated income before income taxes									$	236,705

Other segment disclosures:
Interest income	$	643,004	$	2,627	$	144	$	534	$	646,309

Reconciliation of interest income:
Elimination of intersegment interest income										(2,781)
Total consolidated interest income									$	643,528

Interest expense	$	197,192	$	0	$	0	$	0	$	197,192

Reconciliation of interest expense:
Elimination of intersegment interest expense										(2,781)
Total consolidated interest expense									$	194,411

Depreciation ^(d)	$	12,286	$	767	$	420	$	203	$	13,676
Amortization of intangible assets		3,245		6,901		3,390		723		14,259
Goodwill		732,598		89,293		27,896		3,438		853,225
Core deposit intangibles, net		5,148		0		0		0		5,148
Other intangibles, net		724		23,314		17,888		1,172		43,098
Segment assets		16,151,718		230,098		74,855		37,654		16,494,325

Reconciliation of segment assets:
Elimination of intersegment cash and deposits										(108,281)
Total consolidated assets									$	16,386,044

^(a)	Other revenues includes $1,231 of unrealized gain on equity securities and $487 of realized loss on investment securities.

^(b)	The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM. Intersegment expenses are included within the amounts shown.

^(c)	Other segment items for each reportable segment includes:

^(d)	The amount of depreciation disclosed by reportable segment is included within the data processing and communications and occupancy and equipment expense captions.


			Employee				Wealth
	Banking and		Benefit		Insurance		Management
(000’s omitted)	Corporate		Services		Services		Services		Total
Year Ended December 31, 2023
Net interest income from external customers	$	437,041	$	236	$	8	$	0	$	437,285
Noninterest revenues from external customers		69,041		118,888		47,095		31,944		266,968
Revenues from external customers		506,082		119,124		47,103		31,944		704,253
Intersegment revenues		(1,086)		3,801		215		1,701		4,631
		504,996		122,925		47,318		33,645		708,884

Reconciliation of revenues (segment operating revenues):
Elimination of intersegment revenues										(4,631)
Other revenues ^(a)										(52,134)
Total consolidated revenues									$	652,119

Less segment expenses: ^(b)
Provision for credit losses		11,203		0		0		0
Salaries and employee benefits		178,524		55,505		30,306		20,681
Data processing and communications		47,965		4,063		2,972		2,585
Occupancy and equipment		37,033		3,709		1,328		578
Legal and professional fees		10,640		4,880		447		401
Business development and marketing		14,228		191		1,174		138
Other segment items ^(c)		27,235		4,766		2,456		694
Segment adjusted income before income taxes	$	178,168	$	49,811	$	8,635	$	8,568	$	245,182

Reconciliation of profit or loss (segment adjusted income before income taxes):
Loss on sales of investment securities										(52,329)
Gain on debt extinguishment										242
Unrealized loss on equity securities										(47)
Amortization of intangible assets										(14,511)
Acquisition expenses										(63)
Acquisition-related contingent consideration adjustments										(3,280)
Restructuring expenses										(1,163)
Litigation accrual										(5,800)
Total consolidated income before income taxes									$	168,231

Other segment disclosures:
Interest income	$	541,144	$	1,711	$	123	$	368	$	543,346

Reconciliation of interest income:
Elimination of intersegment interest income										(1,958)
Total consolidated interest income									$	541,388

Interest expense	$	106,061	$	0	$	0	$	0	$	106,061

Reconciliation of interest expense:
Elimination of intersegment interest expense										(1,958)
Total consolidated interest expense									$	104,103

Depreciation ^(d)	$	11,676	$	735	$	403	$	177	$	12,991
Amortization of intangible assets		4,363		6,452		2,898		798		14,511
Goodwill		732,598		85,384		23,976		3,438		845,396
Core deposit intangibles, net		8,159		0		0		0		8,159
Other intangibles, net		958		26,883		14,430		2,161		44,432
Segment assets		15,328,785		245,967		64,904		34,288		15,673,944

Reconciliation of segment assets:
Elimination of intersegment cash and deposits										(118,191)
Total consolidated assets									$	15,555,753

^(a)	Other revenues includes $52,329 of realized loss on investment securities, $242 of gain on debt extinguishment and $47 of unrealized loss on equity securities.

^(b)	The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM. Intersegment expenses are included within the amounts shown.

^(c)	Other segment items for each reportable segment includes:

^(d)	The amount of depreciation disclosed by reportable segment is included within the data processing and communications and occupancy and equipment expense captions.

Historical Timeline

Fiscal Year	Filed
2025	Feb 27, 2026	Showing above
2024	Feb 28, 2025

2023	Feb 29, 2024

2022	Mar 1, 2023

2021	Mar 1, 2022

2020	Mar 1, 2021

2019	Mar 2, 2020

2018	Mar 1, 2019

2017	Mar 1, 2018

2016	Mar 1, 2017

2015	Feb 29, 2016

About Segments Disclosures

Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.

Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.

COMMUNITY FINANCIAL SYSTEM, INC. Segments Disclosure

Historical Timeline

About Segments Disclosures

Other Available Disclosures