It is mold and the wood under it is compromised. Depending how bad, you may have to replace the siding.
And nothing I am going to say is going to make this inexpensive or not a lot of hard work.
It can be "stachybotrus" greenish black mold on cellulose material wood, gypsum, paper that can cause many things but the worse is bleeding in your lungs https://www.cdc.gov/mold/stachy.htm
Other symptoms of mold toxicity (other types of mold ) that Head ache, joint pain, resp problems.. So be careful. Stachybotrus is nothing to mess with. You sould be able to get a test kit at Lowes, HomeDepot, Ace, DiY store.
Exterior paint for a house has to be redone ever 5-7 yrs. If you use pressure treated wood like on mouldings you have to use latex base exterior paint. You need Gripper (Gleddon) under the paint.
You must have N95 Mask minimum if this is the bad mold, Find out from your building department if that mold grows in your area. I would suggest coveralls, gloves until you get the mold killed.
If the wood is good (which is not encouraging by your note) take 1 part 70%household bleach to 9 parts water. IT IS IMPORTANT DO NOT INCREASE THE CONCENTRATION OF BLEACH TO WATER. More is not better here.
Spray the solution on with like a 2 gal garden spray bottle. Saturate it. Let it sit 10-15 min. This will kill the mold.
You can scrape it and respray it. Make sure you clean all your equipment, peel inside-out your coveralls, throw them in washing machine, that will decontaminate the overalls. You can get the waterproof white ones that are disposable if you want.
and throw away mask and gloves.
Do not track this mold spores in your car or house.
You can do this yourself, but If your not comfortable, after throughly researching this, get a painter or siding specialist with training in HAZMAT with Mold issues. There are many different kinds of mold and not a big deal, but Stachybotrus
In some applications like on brick I use Wet & Forget. It seeps in.
If this is siding and you have to replace it, I used Bora Care in the wall cavity and use antifungal in paint. (I live in high heat, high humidity area) but this is in my professional career in Public Health & Occupational Safety. (My husband is in the construction trade)
This is expensive to clean up. Make sure you have water vapor under siding or joints. I used Polyiso foam (closed cell-foam expensive stuff but THE BEST VAPOR BARRIER with foil barrier and foil taped my whole house cause I just finished this.
Bora care is made with boric acid, you dilute it. It stops mold, but also prevents termites, carpenter ants and other such things. Boric acid is made from Borax which Is a mineral of some kind I believe.
The foil & foil tape will prevent mold in your walls, your siding should last 50+ yrs if you do it right and paint it on schedule.
I empathise, I just did this to a 160 yr old farm house that kept getting added on to. Someone put vinyl siding over it so it was hidden and the assessors office had the wrong year it was built. Us doing it (because I knew how) cost $15-18k.
So if you do have to replace siding, fix insulation, electrical wiring, phone wire, cable, ethernet and anything else while you have walls open.
I watched this ASHRE Engineer videos a lot for repair & prevention Joseph Lstiburek, PhD he is top notch. He does residential, commercial & government contracts US and Canada. He has lots of videos. Even if you hire someone, watch them to insure the contractor does remediation right.