I got similar stuff on some of mine, [mostly to one side] caused by injury to bark/winter kill.Usually I leave it alone, tree can still go on for many years. You can scrap the dead bark off and latex spray if you want.

to sum it up ... you can make the outside part disappear.. but there is nothing to do about the interior rot .. you have a few option ... hire a certified tree doctor to determine the extent of the rot ... and that might cost some money ... to determine a future course... https://www.google.com/search?q=isa+tree+surgeon&ie=utf-8&oe=utf-8 prune off the part that has the rot ... though we cant opine on such with this limited pic ... to tell if its a viable issue ... remove the tree in toto .. and plant a new one ... especially it is of any size.. and might threatens someone or something ... presuming this is a fruit production tree .. many are rather short lived .. in tree terms ... and when they get beyond some life span.. are not worth saving ... nor spending the money to save them ... but that is always a personal choice ... please always include where the plant is ... ken

It is a bracket or shelf fungus and is an indication of interior rot. Lots of different kinds but none of them good with regards to the trees :-( I don't see any insects but a rotting tree would be a big attractant to various insects so no real surprise there.

Huggorm thinks the fungus is there because the tree was already on the way out. And not the initial cause of the damage. As far as can be made out using these pictures it seems the tree is probably a pie cherry (Prunus cerasus). Something happened to kill half of it and that is why the fungus got into it. The way the dead part is all on one side it's as though it was weather related. As in frost cracking or summer sun burn. If you want to find out for sure what you are dealing with try your nearest branch office of the USDA Cooperative Extension Service. They will need good representative samples of affected parts and you will have to be able to get there on a weekday.