VARIABLE INTEREST ENTITIES

12 Months Ended

Dec. 31, 2019

VARIABLE INTEREST ENTITIES [Abstract]

NOTE T: VARIABLE INTEREST ENTITIES

The Company’s wholly-owned subsidiary CCT IV is a VIE for which the Company is not the primary beneficiary. Accordingly, the accounts of this entity are not included in the Company’s consolidated financial statements. See further information regarding CCT IV in Note H: Borrowings.

In connection with the Company’s acquisition of Oneida Financial Corp, the Company acquired OPFC II which holds a 50% membership interest in 706 North Clinton, an entity formed for the purpose of acquiring and rehabilitating real property. The real property held by 706 North Clinton is principally occupied by subsidiaries of the Company. The Company analyzed the operating agreement and capital structure of 706 North Clinton and determined that it was the primary beneficiary and therefore should consolidate 706 North Clinton in its financial statements. This conclusion was based on the determination that the Company has a de facto agency relationship because of the financing arrangement between the other member of 706 North Clinton and the Bank which provides OPFC II with both the power to direct the activities of 706 North Clinton and the obligation to absorb any losses of 706 North Clinton.

The carrying amount of the assets and liabilities of 706 North Clinton and the classification of these assets and liabilities in the Company’s consolidated statements of condition at December 31 is as follows:

(000’s omitted)	2019		2018
Cash and cash equivalents	$	138	$	104
Premises and equipment, net		5,945		6,109
Other assets		42		33
Total assets	$	6,125	$	6,246
Accrued interest and other liabilities / Total liabilities	$	1	$	0

In addition to the assets and liabilities of 706 North Clinton, the minority interest in 706 North Clinton of $3.1 million at December 31, 2019 is included in the Company’s consolidated statement of condition. The creditors of 706 North Clinton do not have a claim on the general assets of the Company. The Company’s maximum loss exposure net of minority interest in 706 North Clinton is approximately $4.5 million as of December 31, 2019, including a $1.4 million loss exposure related to the financing agreement between the other member of 706 North Clinton and the Bank.