FAIR VALUE (Tables)

9 Months Ended

Sep. 30, 2012

Summary of Fair Value Measured on a Recurring Basis

A financial instrument's categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The following tables set forth the Company's financial assets and liabilities that were accounted for at fair value on a recurring basis. There were no transfers between any of the levels for the periods presented.

	September 30, 2012
(000's omitted)	Level 1		Level 2		Level 3		Total Fair Value
Available-for-sale investment securities:
U.S. Treasury and agency securities	$	896,521	$	189,232	$	0	$	1,085,753
Obligations of state and political subdivisions		0		707,321		0		707,321
Government agency mortgage-backed securities		0		288,295		0		288,295
Pooled trust preferred securities		0		0		50,837		50,837
Government agency collateralized mortgage obligations		0		36,975		0		36,975
Corporate debt securities		0		25,549		0		25,549
Marketable equity securities		374		0		0		374
Total available-for-sale investment securities		896,895		1,247,372		50,837		2,195,104
Mortgage loans held for sale		0		113		0		113
Total	$	896,895	$	1,247,485	$	50,837	$	2,195,217

	December 31, 2011
(000's omitted)	Level 1		Level 2		Level 3		Total Fair Value
Available-for-sale investment securities:
U.S. Treasury and agency securities	$	311,958	$	208,590	$	0	$	520,548
Obligations of state and political subdivisions		0		573,012		0		573,012
Government agency mortgage-backed securities		0		331,379		0		331,379
Pooled trust preferred securities		0		0		43,846		43,846
Government agency collateralized mortgage obligations		0		46,943		0		46,943
Corporate debt securities		0		22,855		0		22,855
Marketable equity securities		390		0		0		390
Total available-for-sale investment securities		312,348		1,182,779		43,846		1,538,973
Mortgage loans held for sale		0		532		0		532
Total	$	312,348	$	1,183,311	$	43,846	$	1,539,505

Changes in Level 3 Assets Measured at Fair Value on a Recurring Basis

The changes in Level 3 assets measured at fair value on a recurring basis are summarized in the following tables:

	Three Months Ended September 30,
	2012			2011
(000's omitted)	Pooled Trust Preferred Securities			Pooled Trust Preferred Securities			Commitments to Originate Real Estate Loans for Sale			Total
Beginning balance	$	48,786		$	48,972		$	142		$	49,114
Total gains (losses) included in earnings (1)(2)		32			23			(142	)		(119	)
Total gains (losses) included in other comprehensive income(3)		2,769			(1,627	)		0			(1,627	)
Principal reductions		(750	)		(345	)		0			(345	)
Ending balance	$	50,837		$	47,023		$	0		$	47,023

(1) Amounts included in earnings associated with the pooled trust preferred securities relate to accretion of related discount and are reported in interest and dividends on taxable investments. (2) Amounts included in earnings associated with the commitments to originate real estate loans for sale are reported as a component of other banking service fees. (3) Amounts included in other comprehensive income associated with the pooled trust preferred securities are relate to changes in unrealized loss and are reported as a component of unrealized gains on securities in the Statement of Comprehensive Income.
	Nine Months Ended September 30,
		2012			2011
(000's omitted)	Pooled Trust Preferred Securities			Pooled Trust Preferred Securities			Commitments to Originate Real Estate Loans for Sale			Total
Beginning balance	$	43,846		$	41,993		$	58		$	42,051
Total gains (losses) included in earnings (1)(2)		176			71			(258	)		(187	)
Total gains included in other comprehensive income(3)		11,136			6,052			0			6,052
Principal reductions		(4,321	)		(1,093	)		0			(1,093	)
Commitments to originate real estate loans held for sale, net		0			0			200			200
Ending balance	$	50,837		$	47,023		$	0		$	47,023

(1) Amounts included in earnings associated with the pooled trust preferred securities relate to accretion of related discount and are reported in interest and dividends on taxable investments. (2) Amounts included in earnings associated with the commitments to originate real estate loans for sale are reported as a component of other banking service fees. (3) Amounts included in other comprehensive income associated with the pooled trust preferred securities are relate to changes in unrealized loss and are reported as a component of unrealized gains on securities in the Statement of Comprehensive Income.

Assets and Liabilities Measured on a Non-Recurring Basis

Assets and liabilities measured on a non-recurring basis:

	September 30, 2012								December 31, 2011
(000's omitted)	Level 1		Level 2		Level 3		Total Fair Value		Level 1		Level 2		Level 3		Total Fair Value
Impaired loans	$	0	$	0	$	294	$	294	$	0	$	0	$	4,118	$	4,118
Other real estate owned		0		0		3,384		3,384		0		0		2,682		2,682
Mortgage servicing rights		0		0		1,178		1,178		0		0		1,747		1,747
Total	$	0	$	0	$	4,856	$	4,856	$	0	$	0	$	8,547	$	8,547

Significant Unobservable Inputs, Fair Value Valuation Techniques

The significant unobservable inputs used in the determination of fair value of assets classified as Level 3 on a recurring or non-recurring basis as of September 30, 2012 are as follows:

(000's omitted)	Fair Value at September 30, 2012		Valuation Technique	Significant Unobservable Inputs	Significant Unobservable Input Range (Weighted Average)

Pooled trust preferred securities	$	50,837	Consensus pricing	Weighting of offered quotes		60.3% - 85.6% (77.8	%)

Impaired loans		294	Fair value of collateral	Discount		25	%

Other real estate owned		3,384	Fair value of collateral	Discount		3%-64% (27	%)

Mortgage servicing rights		1,178	Discounted cash flow	Weighted average constant prepayment rate		20.5% - 36.0% (31.1	%)
				Weighted average discount rate		2.40% - 3.17% (2.98	%)
				Adequate compensation	$7/loan

Carrying Amounts and Estimated Fair Values of Other Financial Instruments

The carrying amounts and estimated fair values of the Company's other financial instruments that are not accounted for at fair value at September 30, 2012 and December 31, 2011 are as follows:

	September 30, 2012				December 31, 2011
	Carrying		Fair		Carrying		Fair
(000's omitted)	Value		Value		Value		Value
Financial assets:
Net loans	$	3,812,457	$	3,835,406	$	3,471,025	$	3,491,729
Financial liabilities:
Deposits		5,708,629		5,716,925		4,795,245		4,810,856
Borrowings		728,116		827,739		728,281		828,018
Subordinated debt held by unconsolidated subsidiary trusts		102,067		93,154		102,048		73,211

- Definition

Tabular disclosure of assets and liabilities by class, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, that are measured at fair value on a nonrecurring basis in periods after initial recognition (for example, impaired assets). The disclosures that may be required or desired include: (a) the fair value measurements recorded during the period and the reasons for the measurements and (b) the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets or liabilities (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3). Where the quoted price in an active market for the identical liability is not available, the Level 1 input is the quoted price of an identical liability when traded as an asset.

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- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income, and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issuances, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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- Definition

Tabular disclosure of the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, assets, and liabilities. Such certain disclosures about the financial instruments, assets, and liabilities include: (1) the fair value of the required items together with their carrying amounts (as appropriate) and (2) the methodology and assumptions used in developing such estimates of fair value.

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