x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended June 30, 2013
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|
OR | |
o |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to . | |
Commission File Number: 001-13695 |
![]() |
Delaware | 16-1213679 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
5790 Widewaters Parkway, DeWitt, New York | 13214-1883 | |
(Address of principal executive offices) | (Zip Code) | |
(315) 445-2282 | ||
(Registrant's telephone number, including area code)
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||
NONE | ||
(Former name, former address and former fiscal year, if changed since last report)
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Large accelerated filer x | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o. |
(Do not check if a smaller reporting company)
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Part I.
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Financial Information
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Page
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Item 1.
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Financial Statements (Unaudited)
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Consolidated Statements of Condition
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||
June 30, 2013 and December 31, 2012
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3
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Consolidated Statements of Income
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||
Three and six months ended June 30, 2013 and 2012
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4
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Consolidated Statements of Comprehensive Income/(Loss)
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||
Three and six months ended June 30, 2013 and 2012
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5
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Consolidated Statement of Changes in Shareholders’ Equity
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||
Six months ended June 30, 2013
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6
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Consolidated Statements of Cash Flows
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Six months ended June 30, 2013 and 2012
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7
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Notes to the Consolidated Financial Statements
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||
June 30, 2013
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8
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Item 2.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
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27
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Item 3.
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Quantitative and Qualitative Disclosures about Market Risk
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44
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Item 4.
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Controls and Procedures
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45
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Part II.
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Other Information
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Item 1.
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Legal Proceedings
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45
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Item 1A.
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Risk Factors
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45
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Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds
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45
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Item 3.
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Defaults Upon Senior Securities
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46
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Item 4.
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Mine Safety Disclosures
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46
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Item 5.
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Other Information
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46
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Item 6.
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Exhibits
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46
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COMMUNITY BANK SYSTEM, INC.
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CONSOLIDATED STATEMENTS OF CONDITION (Unaudited)
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(In Thousands, Except Share Data)
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June 30,
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December 31,
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2013
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2012
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Assets:
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||
Cash and cash equivalents
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$148,573
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$228,558
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Available-for-sale investment securities (cost of $1,708,296 and $1,989,938, respectively)
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1,706,304
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2,121,394
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Held-to-maturity investment securities (fair value of $660,415 and $703,957, respectively)
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619,207
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637,894
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Other securities, at cost
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41,001
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59,239
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Loans held for sale, at fair value
|
1,153
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0
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Loans
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3,935,998
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3,865,576
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Allowance for loan losses
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(43,473)
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(42,888)
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Net loans
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3,892,525
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3,822,688
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Goodwill, net
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369,703
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369,703
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Core deposit intangibles, net
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12,647
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14,492
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Other intangibles, net
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2,465
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2,939
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Intangible assets, net
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384,815
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387,134
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Premises and equipment, net
|
91,142
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89,938
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Accrued interest and fee receivable
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28,492
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32,305
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Other assets
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107,504
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117,650
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Total assets
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$7,020,716
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$7,496,800
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Liabilities:
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Noninterest-bearing deposits
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$1,120,683
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$1,110,994
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Interest-bearing deposits
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4,549,447
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4,517,045
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Total deposits
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5,670,130
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5,628,039
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Borrowings
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322,319
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728,061
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Subordinated debt held by unconsolidated subsidiary trusts
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102,085
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102,073
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Accrued interest and other liabilities
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76,151
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135,849
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Total liabilities
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6,170,685
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6,594,022
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Commitments and contingencies (See Note J)
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Shareholders' equity:
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Preferred stock $1.00 par value, 500,000 shares authorized, 0 shares issued
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-
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-
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Common stock, $1.00 par value, 75,000,000 shares authorized; 40,881,188 and
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40,421,493 shares issued, respectively
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40,881
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40,421
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Additional paid-in capital
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387,133
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378,413
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Retained earnings
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466,848
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447,018
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Accumulated other comprehensive income
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(27,716)
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54,334
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Treasury stock, at cost (782,173 and 795,560 shares, respectively)
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(17,115)
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(17,408)
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Total shareholders' equity
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850,031
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902,778
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Total liabilities and shareholders' equity
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$7,020,716
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$7,496,800
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COMMUNITY BANK SYSTEM, INC.
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||||||
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
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||||||
(In Thousands, Except Per-Share Data)
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Three Months Ended
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Six Months Ended
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|||||
June 30,
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June 30,
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|||||
2013
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2012
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2013
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2012
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Interest income:
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||||||
Interest and fees on loans
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$46,412
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$47,077
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$93,530
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$94,715
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Interest and dividends on taxable investments
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12,566
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17,450
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27,782
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31,725
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Interest and dividends on nontaxable investments
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5,162
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6,018
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10,753
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11,616
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Total interest income
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64,140
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70,545
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132,065
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138,056
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||||||
Interest expense:
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||||||
Interest on deposits
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2,703
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4,380
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5,845
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9,889
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Interest on borrowings
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2,375
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7,713
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8,105
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15,113
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Interest on subordinated debt held by unconsolidated subsidiary trusts
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630
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681
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1,258
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1,374
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Total interest expense
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5,708
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12,774
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15,208
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26,376
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Net interest income
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58,432
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57,771
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116,857
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111,680
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Provision for loan losses
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1,321
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2,155
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2,714
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3,799
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Net interest income after provision for loan losses
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57,111
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55,616
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114,143
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107,881
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Noninterest income:
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||||||
Deposit service fees
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12,345
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11,035
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23,940
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21,404
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Other banking services
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1,020
|
896
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2,058
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1,890
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Benefit trust, administration, consulting and actuarial fees
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9,397
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8,664
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19,167
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17,637
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Wealth management services
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4,045
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3,101
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7,743
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6,233
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Gain on sales of investment securities
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16,008
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0
|
63,799
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0
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Loss on debt extinguishments
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(15,717)
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0
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(63,500)
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0
|
||
Total noninterest income
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27,098
|
23,696
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53,207
|
47,164
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Noninterest expenses:
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||||||
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Salaries and employee benefits
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30,286
|
26,844
|
60,769
|
54,269
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Occupancy and equipment
|
6,750
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6,130
|
13,815
|
12,593
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Data processing and communications
|
6,600
|
5,817
|
13,336
|
11,417
|
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Amortization of intangible assets
|
1,140
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1,045
|
2,319
|
2,131
|
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Legal and professional fees
|
1,526
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1,755
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3,466
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3,946
|
||
Office supplies and postage
|
1,518
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1,382
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3,013
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2,850
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Business development and marketing
|
1,804
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1,876
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3,283
|
3,048
|
||
FDIC insurance premiums
|
945
|
903
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2,000
|
1,809
|
||
Acquisition expenses
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0
|
164
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0
|
424
|
||
Other
|
3,807
|
3,454
|
6,927
|
6,286
|
||
Total noninterest expenses
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54,376
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49,370
|
108,928
|
98,773
|
||
Income before income taxes
|
29,833
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29,942
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58,422
|
56,272
|
||
Income taxes
|
8,711
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8,871
|
17,059
|
16,375
|
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Net income
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$21,122
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$21,071
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$41,363
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$39,897
|
||
Basic earnings per share
|
$0.53
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$0.53
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$1.03
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$1.02
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Diluted earnings per share
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$0.52
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$0.53
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$1.02
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$1.01
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COMMUNITY BANK SYSTEM, INC.
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|||||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS) (Unaudited)
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|||||||||||
(In Thousands)
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Three Months Ended
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Six Months Ended
|
|||||||
June 30,
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June 30,
|
|||||||
2013
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2012
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2013
|
2012
|
|||||
Pension and other post retirement obligations:
|
||||||||
Amortization of actuarial losses included in net periodic pension cost, gross
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$1,012
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$925
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$2,021
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$1,849
|
||||
Tax effect
|
(394)
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(359)
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(784)
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(717)
|
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Amortization of actuarial losses included in net periodic pension cost, net
|
618
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566
|
1,237
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1,132
|
||||
Amortization of prior service cost included in net periodic pension cost, gross
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(30)
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(243)
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(61)
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(485)
|
||||
Tax effect
|
12
|
94
|
24
|
188
|
||||
Amortization of prior service cost included in net periodic pension cost, net
|
(18)
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(149)
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(37)
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(297)
|
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Other comprehensive income related to pension and other post retirement obligations, net of taxes
|
600
|
417
|
1,200
|
835
|
||||
Unrealized gains on securities:
|
||||||||
Net unrealized holding (losses) gains arising during period, gross
|
(50,777)
|
51,397
|
(69,649)
|
44,388
|
||||
Tax effect
|
19,081
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(19,644)
|
26,179
|
(17,221)
|
||||
Net unrealized holding (losses) gains arising during period, net
|
(31,696)
|
31,753
|
(43,470)
|
27,167
|
||||
Reclassification adjustment for net gains included in net income, gross
|
(16,007)
|
0
|
(63,799)
|
0
|
||||
Tax effect
|
6,175
|
0
|
24,019
|
0
|
||||
Reclassification adjustment for gains, net included in net income, net
|
(9,832)
|
0
|
(39,780)
|
0
|
||||
Other comprehensive loss related to unrealized gain on available-for-sale securities, net of taxes
|
(41,528)
|
31,753
|
(83,250)
|
27,167
|
||||
Other comprehensive (loss)/income, net of tax
|
(40,928)
|
32,170
|
(82,050)
|
28,002
|
||||
Net income
|
21,122
|
21,071
|
41,363
|
39,897
|
||||
Comprehensive (loss)/income
|
($19,806)
|
$53,241
|
($40,687)
|
$67,899
|
||||
As of
|
||||||||
June 30,
|
December 31,
|
|||||||
2013
|
2012
|
|||||||
Accumulated Other Comprehensive Income By Component:
|
||||||||
Unrealized loss for pension and other postretirement obligations
|
($43,272)
|
($45,232)
|
||||||
Tax effect
|
16,687
|
17,447
|
||||||
Net unrealized loss for pension and other postretirement obligations
|
(26,585)
|
(27,785)
|
||||||
Unrealized (loss)/gain on available-for-sale securities
|
(1,992)
|
131,456
|
||||||
Tax effect
|
861
|
(49,337)
|
||||||
Net unrealized (loss)/gain on available-for-sale securities
|
(1,131)
|
82,119
|
||||||
Accumulated other comprehensive income
|
($27,716)
|
$54,334
|
Accumulated
|
|||||||
Common Stock
|
Additional
|
Other
|
|||||
Shares
|
Amount
|
Paid-In
|
Retained
|
Comprehensive
|
Treasury
|
||
Outstanding
|
Issued
|
Capital
|
Earnings
|
Income (Loss)
|
Stock
|
Total
|
|
Balance at December 31, 2012
|
39,625,933
|
$40,421
|
$378,413
|
$447,018
|
$54,334
|
($17,408)
|
$902,778
|
Net income
|
41,363
|
41,363
|
|||||
Other comprehensive loss, net of tax
|
(82,050)
|
(82,050)
|
|||||
Cash dividends declared:
|
|||||||
Common, $0.54 per share
|
(21,533)
|
(21,533)
|
|||||
Common stock issued under
|
|||||||
employee stock plan,
|
|||||||
including tax benefits of $666
|
473,082
|
460
|
6,613
|
293
|
7,366
|
||
Stock-based compensation
|
2,107
|
2,107
|
|||||
Balance at June 30, 2013
|
40,099,015
|
$40,881
|
$387,133
|
$466,848
|
($27,716)
|
($17,115)
|
$850,031
|
Six Months Ended
|
||
June 30,
|
||
2013
|
2012
|
|
Operating activities:
|
||
Net income
|
$41,363
|
$39,897
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
||
Depreciation
|
5,947
|
5,551
|
Amortization of intangible assets
|
2,319
|
2,131
|
Net accretion of premiums and discounts on securities, loans and borrowings
|
(2,359)
|
(2,584)
|
Stock-based compensation
|
2,107
|
2,036
|
Provision for loan losses
|
2,714
|
3,799
|
Amortization of mortgage servicing rights
|
276
|
365
|
Income from bank-owned life insurance policies
|
(523)
|
(536)
|
Gain on sales of investment securities
|
(63,799)
|
0
|
Loss on debt extinguishments
|
63,500
|
0
|
Net loss/(gain) from sale of loans and other assets
|
187
|
(82)
|
Net change in loans held for sale
|
(1,136)
|
576
|
Change in other assets and liabilities
|
5,134
|
789
|
Net cash provided by operating activities
|
55,730
|
51,942
|
Investing activities:
|
||
Proceeds from sales of available-for-sale investment securities
|
672,750
|
0
|
Proceeds from maturities of available-for-sale investment securities
|
113,335
|
103,709
|
Proceeds from maturities of held-to-maturity investment securities
|
24,015
|
12,602
|
Proceeds from sale of other investment securities
|
18,240
|
1
|
Purchases of available-for-sale investment securities
|
(439,448)
|
(724,530)
|
Purchases of held-to-maturity investment securities
|
(4,153)
|
(106,226)
|
Purchases of other securities
|
(2)
|
(19,123)
|
Net increase in loans
|
(72,551)
|
(94,829)
|
Purchases of premises and equipment
|
(7,355)
|
(4,132)
|
Net cash provided by (used in) investing activities
|
304,831
|
(832,528)
|
Financing activities:
|
||
Net increase in deposits
|
42,091
|
115,107
|
Net change in borrowings, net of payments of $565,142 and $110
|
(469,242)
|
429,591
|
Issuance of common stock
|
7,366
|
61,017
|
Cash dividends paid
|
(21,427)
|
(19,825)
|
Tax benefits from share-based payment arrangements
|
666
|
720
|
Net cash (used in) provided by financing activities
|
(440,546)
|
586,610
|
Change in cash and cash equivalents
|
(79,985)
|
(193,976)
|
Cash and cash equivalents at beginning of period
|
228,558
|
324,878
|
Cash and cash equivalents at end of period
|
$148,573
|
$130,902
|
Supplemental disclosures of cash flow information:
|
||
Cash paid for interest
|
$18,358
|
$26,775
|
Cash paid for income taxes
|
11,768
|
9,655
|
Supplemental disclosures of noncash financing and investing activities:
|
||
Dividends declared and unpaid
|
10,805
|
10,260
|
Transfers from loans to other real estate
|
3,439
|
1,977
|
(000s omitted)
|
|
Consideration received:
|
|
Cash/Total net consideration received
|
($595,462)
|
Recognized amounts of identifiable assets acquired and liabilities assumed:
|
|
Cash and cash equivalents
|
5,510
|
Loans
|
160,116
|
Premises and equipment
|
4,941
|
Accrued interest receivable
|
588
|
Other assets and liabilities, net
|
171
|
Core deposit intangibles
|
6,521
|
Deposits
|
(797,962)
|
Total identifiable liabilities, net
|
(620,115)
|
Goodwill
|
$24,653
|
Acquired
|
Acquired
|
Total
|
|
Impaired
|
Non-Impaired
|
Acquired
|
|
(000’s omitted)
|
Loans
|
Loans
|
Loans
|
Contractually required principal and interest at acquisition
|
$0
|
$201,745
|
$201,745
|
Contractual cash flows not expected to be collected
|
0
|
(3,555)
|
(3,555)
|
Expected cash flows at acquisition
|
0
|
198,190
|
198,190
|
Interest component of expected cash flows
|
0
|
(38,074)
|
(38,074)
|
Fair value of acquired loans
|
$0
|
$160,116
|
$160,116
|
June 30, 2013
|
December 31, 2012
|
||||||||
Gross
|
Gross
|
Gross
|
Gross
|
||||||
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
||
(000's omitted)
|
Cost
|
Gains
|
Losses
|
Value
|
Cost
|
Gains
|
Losses
|
Value
|
|
Held-to-Maturity Portfolio:
|
|||||||||
U.S. Treasury and agency securities
|
$539,979
|
$39,627
|
$1,786
|
$577,820
|
$548,634
|
$59,081
|
$0
|
$607,715
|
|
Obligations of state and political subdivisions
|
61,826
|
3,196
|
0
|
65,022
|
65,742
|
5,850
|
0
|
71,592
|
|
Government agency mortgage-backed securities
|
14,475
|
148
|
0
|
14,623
|
20,578
|
1,079
|
0
|
21,657
|
|
Corporate debt securities
|
2,914
|
23
|
0
|
2,937
|
2,924
|
53
|
0
|
2,977
|
|
Other securities
|
13
|
0
|
0
|
13
|
16
|
0
|
0
|
16
|
|
Total held-to-maturity portfolio
|
$619,207
|
$42,994
|
$1,786
|
$660,415
|
$637,894
|
$66,063
|
$0
|
$703,957
|
|
Available-for-Sale Portfolio:
|
|||||||||
U.S. Treasury and agency securities
|
$764,446
|
$2,553
|
$9,129
|
$757,870
|
$988,217
|
$91,040
|
$0
|
$1,079,257
|
|
Obligations of state and political subdivisions
|
604,692
|
16,634
|
10,483
|
610,843
|
629,883
|
33,070
|
61
|
662,892
|
|
Government agency mortgage-backed securities
|
232,707
|
8,697
|
2,717
|
238,687
|
253,013
|
16,989
|
51
|
269,951
|
|
Pooled trust preferred securities
|
56,796
|
0
|
9,506
|
47,290
|
61,979
|
0
|
12,379
|
49,600
|
|
Government agency collateralized mortgage obligations
|
25,222
|
1,116
|
0
|
26,338
|
32,359
|
1,579
|
3
|
33,935
|
|
Corporate debt securities
|
24,082
|
942
|
226
|
24,798
|
24,136
|
1,265
|
44
|
25,357
|
|
Marketable equity securities
|
351
|
142
|
15
|
478
|
351
|
94
|
43
|
402
|
|
Total available-for-sale portfolio
|
$1,708,296
|
$30,084
|
$32,076
|
$1,706,304
|
$1,989,938
|
$144,037
|
$12,581
|
$2,121,394
|
|
Other Securities:
|
|||||||||
Federal Home Loan Bank common stock
|
$20,171
|
$20,171
|
$38,111
|
$38,111
|
|||||
Federal Reserve Bank common stock
|
16,050
|
16,050
|
16,050
|
16,050
|
|||||
Other equity securities
|
4,780
|
4,780
|
5,078
|
5,078
|
|||||
Total other securities
|
$41,001
|
$41,001
|
$59,239
|
$59,239
|
Less than 12 Months |
12 Months or Longer
|
Total
|
||||||||||
Gross
|
Gross
|
Gross
|
||||||||||
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
|||||||
(000's omitted)
|
#
|
Value
|
Losses
|
#
|
Value
|
Losses
|
#
|
Value
|
Losses
|
|||
Held-to-Maturity Portfolio:
|
||||||||||||
U.S. Treasury and agency securities/
|
||||||||||||
Total held-to-maturity portfolio
|
5
|
$99,373
|
$1,786
|
0
|
$0
|
$0
|
5
|
$99,373
|
$1,786
|
|||
Available-for-Sale Portfolio:
|
||||||||||||
U.S. Treasury and agency securities
|
15
|
$352,566
|
$9,129
|
0
|
$0
|
$0
|
15
|
$352,566
|
$9,129
|
|||
Obligations of state and political subdivisions
|
314
|
202,253
|
10,449
|
2
|
908
|
34
|
316
|
203,161
|
10,483
|
|||
Government agency mortgage-backed securities
|
46
|
57,788
|
2,717
|
0
|
0
|
0
|
46
|
57,788
|
2,717
|
|||
Pooled trust preferred securities
|
0
|
0
|
0
|
3
|
47,290
|
9,506
|
3
|
47,290
|
9,506
|
|||
Corporate debt securities
|
1
|
3,012
|
54
|
1
|
2,747
|
172
|
2
|
5,759
|
226
|
|||
Government agency collateralized mortgage obligations
|
4
|
335
|
0
|
1
|
8
|
0
|
5
|
343
|
0
|
|||
Marketable equity securities
|
0
|
0
|
0
|
1
|
186
|
15
|
1
|
186
|
15
|
|||
Total available-for-sale portfolio
|
380
|
615,954
|
22,349
|
8
|
51,139
|
9,727
|
388
|
667,093
|
32,076
|
|||
Total investment portfolio
|
385
|
$715,327
|
$24,135
|
8
|
$51,139
|
$9,727
|
393
|
$766,466
|
$33,862
|
Less than 12 Months
|
12 Months or Longer
|
Total
|
||||||||||
Gross
|
Gross
|
Gross
|
||||||||||
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
|||||||
(000's omitted)
|
#
|
Value
|
Losses
|
#
|
Value
|
Losses
|
#
|
Value
|
Losses
|
|||
Available-for-Sale Portfolio:
|
||||||||||||
Obligations of state and political subdivisions
|
19
|
$11,503
|
$61
|
0
|
$0
|
$0
|
19
|
$11,503
|
$61
|
|||
Pooled trust preferred securities
|
0
|
0
|
0
|
3
|
49,600
|
12,379
|
3
|
49,600
|
12,379
|
|||
Government agency mortgage-backed securities
|
8
|
14,354
|
51
|
0
|
0
|
0
|
8
|
14,354
|
51
|
|||
Corporate debt securities
|
1
|
2,905
|
44
|
0
|
0
|
0
|
1
|
2,905
|
44
|
|||
Government agency collateralized mortgage obligations
|
4
|
426
|
2
|
2
|
1,041
|
1
|
6
|
1,467
|
3
|
|||
Marketable equity securities
|
0
|
0
|
0
|
1
|
158
|
43
|
1
|
158
|
43
|
|||
Total available-for-sale/investment portfolio
|
32
|
$29,188
|
$158
|
6
|
$50,799
|
$12,423
|
38
|
$79,987
|
$12,581
|
Held-to-Maturity
|
Available-for-Sale
|
|||||
Amortized
|
Fair
|
Amortized
|
Fair
|
|||
(000's omitted)
|
Cost
|
Value
|
Cost
|
Value
|
||
Due in one year or less
|
$8,786
|
$8,860
|
$35,212
|
$35,723
|
||
Due after one through five years
|
360,724
|
390,838
|
146,830
|
151,709
|
||
Due after five years through ten years
|
186,760
|
194,038
|
769,425
|
772,445
|
||
Due after ten years
|
48,462
|
52,056
|
498,549
|
480,924
|
||
Subtotal
|
604,732
|
645,792
|
1,450,016
|
1,440,801
|
||
Government agency collateralized mortgage obligations
|
0
|
0
|
25,222
|
26,338
|
||
Government agency mortgage-backed securities
|
14,475
|
14,623
|
232,707
|
238,687
|
||
Total
|
$619,207
|
$660,415
|
1,707,945
|
$1,705,826
|
·
|
Consumer mortgages - consist primarily of fixed rate residential instruments, typically 15 – 30 years in contractual term, secured by first liens on real property.
|
·
|
Business lending - is comprised of general purpose commercial and industrial loans including, but not limited to agricultural-related and dealer floor plans, as well as mortgages on commercial property.
|
·
|
Consumer indirect - consists primarily of installment loans originated through selected dealerships and are secured by automobiles, marine and other recreational vehicles.
|
·
|
Consumer direct - all other loans to consumers such as personal installment loans and lines of credit.
|
·
|
Home equity products - are consumer purpose installment loans or lines of credit most often secured by a first or second lien position on residential real estate with terms typically of 15 years or less.
|
June 30,
|
December 31,
|
|
(000's omitted)
|
2013
|
2012
|
Consumer mortgage
|
$1,527,341
|
$1,448,415
|
Business lending
|
1,225,671
|
1,233,944
|
Consumer indirect
|
663,924
|
647,518
|
Consumer direct
|
171,727
|
171,474
|
Home equity
|
347,335
|
364,225
|
Gross loans, including deferred origination costs
|
3,935,998
|
3,865,576
|
Allowance for loan losses
|
(43,473)
|
(42,888)
|
Loans, net of allowance for loan losses
|
$3,892,525
|
$3,822,688
|
(000’s omitted)
|
|
Balance at December 31, 2012
|
$1,770
|
Accretion recognized, year-to-date
|
(538)
|
Net reclassification to accretable from nonaccretable
|
29
|
Balance at June 30, 2013
|
$1,261
|
Past Due
|
90+ Days Past
|
|||||
30 - 89
|
Due and
|
Total
|
||||
(000’s omitted)
|
Days
|
Still Accruing
|
Nonaccrual
|
Past Due
|
Current
|
Total Loans
|
Consumer mortgage
|
$13,165
|
$940
|
$9,715
|
$23,820
|
$1,411,350
|
$1,435,170
|
Business lending
|
6,434
|
66
|
6,420
|
12,920
|
1,003,420
|
1,016,340
|
Consumer indirect
|
8,161
|
181
|
0
|
8,342
|
649,325
|
657,667
|
Consumer direct
|
1,622
|
78
|
5
|
1,705
|
158,937
|
160,642
|
Home equity
|
2,070
|
84
|
2,132
|
4,286
|
265,313
|
269,599
|
Total
|
$31,452
|
$1,349
|
$18,272
|
$51,073
|
$3,488,345
|
$3,539,418
|
Past Due
|
90+ Days Past
|
||||||
30 - 89
|
Due and
|
Total
|
Acquired
|
||||
(000’s omitted)
|
Days
|
Still Accruing
|
Nonaccrual
|
Past Due
|
Impaired(1)
|
Current
|
Total Loans
|
Consumer mortgage
|
$1,567
|
$54
|
$2,177
|
$3,798
|
$0
|
$88,373
|
$92,171
|
Business lending
|
978
|
0
|
2,130
|
3,108
|
12,108
|
194,115
|
209,331
|
Consumer indirect
|
232
|
0
|
0
|
232
|
0
|
6,025
|
6,257
|
Consumer direct
|
293
|
0
|
0
|
293
|
0
|
10,792
|
11,085
|
Home equity
|
206
|
36
|
418
|
660
|
0
|
77,076
|
77,736
|
Total
|
$3,276
|
$90
|
$4,725
|
$8,091
|
$12,108
|
$376,381
|
$396,580
|
(1)
|
Acquired impaired loans were not classified as nonperforming assets as the loans are considered to be performing under ASC 310-30. As a result interest income, through the accretion of the difference between the carrying amount of the loans and the expected cashflows, is being recognized on all acquired impaired loans.
|
Past Due
|
90+ Days Past
|
|||||
30 - 89
|
Due and
|
Total
|
||||
(000’s omitted)
|
Days
|
Still Accruing
|
Nonaccrual
|
Past Due
|
Current
|
Total Loans
|
Consumer mortgage
|
$16,334
|
$1,553
|
$8,866
|
$26,753
|
$1,318,534
|
$1,345,287
|
Business lending
|
6,012
|
167
|
12,010
|
18,189
|
984,665
|
1,002,854
|
Consumer indirect
|
9,743
|
73
|
0
|
9,816
|
627,541
|
637,357
|
Consumer direct
|
1,725
|
71
|
8
|
1,804
|
154,462
|
156,266
|
Home equity
|
4,124
|
491
|
1,044
|
5,659
|
270,798
|
276,457
|
Total
|
$37,938
|
$2,355
|
$21,928
|
$62,221
|
$3,356,000
|
$3,418,221
|
Past Due
|
90+ Days Past
|
||||||
30 - 89
|
Due and
|
Total
|
Acquired
|
||||
(000’s omitted)
|
Days
|
Still Accruing
|
Nonaccrual
|
Past Due
|
Impaired(1)
|
Current | Total Loans |
Consumer mortgage
|
$1,726
|
$265
|
$2,420
|
$4,411
|
$0
|
$98,717
|
$103,128
|
Business lending
|
3,665
|
80
|
1,681
|
5,426
|
13,761
|
211,903
|
231,090
|
Consumer indirect
|
434
|
0
|
0
|
434
|
0
|
9,727
|
10,161
|
Consumer direct
|
470
|
0
|
0
|
470
|
0
|
14,738
|
15,208
|
Home equity
|
959
|
48
|
331
|
1,338
|
0
|
86,430
|
87,768
|
Total
|
$7,254
|
$393
|
$4,432
|
$12,079
|
$13,761
|
$421,515
|
$447,355
|
(1)
|
Acquired impaired loans were not classified as nonperforming assets as the loans are considered to be performing under ASC 310-30. As a result interest income, through the accretion of the difference between the carrying amount of the loans and the expected cashflows, is being recognized on all acquired impaired loans.
|
Pass | The condition of the borrower and the performance of the loans are satisfactory or better. |
Special Mention | The condition of the borrower has deteriorated although the loan performs as agreed. |
Classified
|
The condition of the borrower has significantly deteriorated and the performance of the loan could further deteriorate, if deficiencies are not corrected. |
Doubtful | The condition of the borrower has deteriorated to the point that collection of the balance is improbable based on currently facts and conditions. |
June 30, 2013
|
December 31, 2012
|
||||||
(000’s omitted)
|
Legacy
|
Acquired
|
Total
|
Legacy
|
Acquired
|
Total
|
|
Pass
|
$825,147
|
$127,461
|
$952,608
|
$818,469
|
$144,869
|
$963,338
|
|
Special mention
|
108,281
|
31,246
|
139,527
|
92,739
|
32,328
|
125,067
|
|
Classified
|
81,625
|
38,516
|
120,141
|
90,035
|
40,132
|
130,167
|
|
Doubtful
|
1,287
|
0
|
1,287
|
1,611
|
0
|
1,611
|
|
Acquired impaired
|
0
|
12,108
|
12,108
|
0
|
13,761
|
13,761
|
|
Total
|
$1,016,340
|
$209,331
|
$1,225,671
|
$1,002,854
|
$231,090
|
$1,233,944
|
Consumer
|
Consumer
|
Consumer
|
Home
|
||
(000’s omitted)
|
Mortgage
|
Indirect
|
Direct
|
Equity
|
Total
|
Performing
|
$1,424,515
|
$657,486
|
$160,559
|
$267,383
|
$2,509,943
|
Nonperforming
|
10,655
|
181
|
83
|
2,216
|
13,135
|
Total
|
$1,435,170
|
$657,667
|
$160,642
|
$269,599
|
$2,523,078
|
Consumer
|
Consumer
|
Consumer
|
Home
|
||
(000’s omitted)
|
Mortgage
|
Indirect
|
Direct
|
Equity
|
Total
|
Performing
|
$89,940
|
$6,257
|
$11,085
|
$77,282
|
$184,564
|
Nonperforming
|
2,231
|
0
|
0
|
454
|
2,685
|
Total
|
$92,171
|
$6,257
|
$11,085
|
$77,736
|
$187,249
|
Consumer
|
Consumer
|
Consumer
|
Home
|
||
(000’s omitted)
|
Mortgage
|
Indirect
|
Direct
|
Equity
|
Total
|
Performing
|
$1,334,868
|
$637,284
|
$156,187
|
$274,922
|
$2,403,261
|
Nonperforming
|
10,419
|
73
|
79
|
1,535
|
12,106
|
Total
|
$1,345,287
|
$637,357
|
$156,266
|
$276,457
|
$2,415,367
|
Consumer
|
Consumer
|
Consumer
|
Home
|
||
(000’s omitted)
|
Mortgage
|
Indirect
|
Direct
|
Equity
|
Total
|
Performing
|
$100,443
|
$10,161
|
$15,208
|
$87,389
|
$213,201
|
Nonperforming
|
2,685
|
0
|
0
|
379
|
3,064
|
Total
|
$103,128
|
$10,161
|
$15,208
|
$87,768
|
$216,265
|
June 30,
|
December 31,
|
|
(000’s omitted)
|
2013
|
2012
|
Loans with allowance allocation
|
$1,990
|
$1,611
|
Loans without allowance allocation
|
1,005
|
7,798
|
Carrying balance
|
2,995
|
9,409
|
Contractual balance
|
4,374
|
12,804
|
Specifically allocated allowance
|
980
|
800
|
June 30, 2013
|
December 31, 2012
|
||||||||||||
(000’s omitted)
|
Nonaccrual
|
Accruing
|
Total
|
Nonaccrual
|
Accruing
|
Total
|
|||||||
#
|
Amount
|
#
|
Amount
|
#
|
Amount
|
#
|
Amount
|
#
|
Amount
|
#
|
Amount
|
||
Consumer mortgage
|
6
|
$336
|
53
|
$2,541
|
59
|
$2,877
|
3
|
$160
|
45
|
$2,074
|
48
|
$2,234
|
|
Business lending
|
10
|
2,687
|
1
|
50
|
11
|
2,737
|
10
|
3,046
|
0
|
0
|
10
|
3,046
|
|
Consumer indirect
|
2
|
10
|
114
|
740
|
116
|
750
|
0
|
0
|
106
|
718
|
106
|
718
|
|
Consumer direct
|
0
|
0
|
36
|
155
|
36
|
155
|
0
|
0
|
19
|
116
|
19
|
116
|
|
Home equity
|
5
|
39
|
22
|
322
|
27
|
361
|
5
|
70
|
19
|
266
|
24
|
336
|
|
Total
|
23
|
$3,072
|
226
|
$3,808
|
249
|
$6,880
|
18
|
$3,276
|
189
|
$3,174
|
207
|
$6,450
|
Three Months Ended
|
Six Months Ended
|
||||
June 30, 2013
|
June 30, 2013
|
||||
(000’s omitted)
|
Number of loans
modified
|
Outstanding
Balance
|
Number of loans
modified
|
Outstanding
Balance
|
|
Consumer mortgage
|
3
|
$267
|
16
|
$1,269
|
|
Business lending
|
3
|
290
|
6
|
362
|
|
Consumer indirect
|
10
|
61
|
21
|
168
|
|
Consumer direct
|
5
|
41
|
14
|
72
|
|
Home equity
|
2
|
26
|
7
|
123
|
|
Total
|
23
|
$685
|
64
|
$1,994
|
Three Months Ended June 30, 2013
|
||||||||
Consumer
|
Business
|
Consumer
|
Consumer
|
Home
|
Acquired
|
|||
(000’s omitted)
|
Mortgage
|
Lending
|
Indirect
|
Direct
|
Equity
|
Unallocated
|
Impaired
|
Total
|
Beginning balance
|
$7,292
|
$17,557
|
$9,448
|
$3,084
|
$1,683
|
$2,927
|
$922
|
$42,913
|
Charge-offs
|
(229)
|
(280)
|
(997)
|
(407)
|
(135)
|
0
|
0
|
(2,048)
|
Recoveries
|
7
|
102
|
913
|
257
|
8
|
0
|
0
|
1,287
|
Provision
|
303
|
904
|
5
|
120
|
118
|
(182)
|
53
|
1,321
|
Ending balance
|
$7,373
|
$18,283
|
$9,369
|
$3,054
|
$1,674
|
$2,745
|
$975
|
$43,473
|
Three Months Ended June 30, 2012
|
||||||||
Consumer
|
Business
|
Consumer
|
Consumer
|
Home
|
Acquired
|
|||
(000’s omitted)
|
Mortgage
|
Lending
|
Indirect
|
Direct
|
Equity
|
Unallocated
|
Impaired
|
Total
|
Beginning balance
|
$4,885
|
$21,413
|
$7,938
|
$3,066
|
$1,281
|
$2,770
|
$456
|
$41,809
|
Charge-offs
|
(150)
|
(1,662)
|
(1,134)
|
(273)
|
(65)
|
0
|
0
|
(3,284)
|
Recoveries
|
4
|
178
|
782
|
182
|
2
|
0
|
0
|
1,148
|
Provision
|
1,574
|
(1,458)
|
1,084
|
248
|
174
|
342
|
191
|
2,155
|
Ending balance
|
$6,313
|
$18,471
|
$8,670
|
$3,223
|
$1,392
|
$3,112
|
$647
|
$41,828
|
Six Months Ended June 30, 2013
|
||||||||
Consumer
|
Business
|
Consumer
|
Consumer
|
Home
|
Acquired
|
|||
(000’s omitted)
|
Mortgage
|
Lending
|
Indirect
|
Direct
|
Equity
|
Unallocated
|
Impaired
|
Total
|
Beginning balance
|
$7,070
|
$18,013
|
$9,606
|
$3,303
|
$1,451
|
$2,666
|
$779
|
$42,888
|
Charge-offs
|
(600)
|
(1,064)
|
(1,888)
|
(952)
|
(320)
|
0
|
0
|
(4,824)
|
Recoveries
|
13
|
244
|
1,871
|
555
|
12
|
0
|
0
|
2,695
|
Provision
|
890
|
1,090
|
(220)
|
148
|
531
|
79
|
196
|
2,714
|
Ending balance
|
$7,373
|
$18,283
|
$9,369
|
$3,054
|
$1,674
|
$2,745
|
$975
|
$43,473
|
Six Months Ended June 30, 2012
|
||||||||
Consumer
|
Business
|
Consumer
|
Consumer
|
Home
|
Acquired
|
|||
(000’s omitted)
|
Mortgage
|
Lending
|
Indirect
|
Direct
|
Equity
|
Unallocated
|
Impaired
|
Total
|
Beginning balance
|
$4,651
|
$20,574
|
$8,960
|
$3,290
|
$1,130
|
$3,222
|
$386
|
$42,213
|
Charge-offs
|
(419)
|
(3,227)
|
(2,173)
|
(730)
|
(181)
|
0
|
0
|
(6,730)
|
Recoveries
|
17
|
333
|
1,824
|
354
|
18
|
0
|
0
|
2,546
|
Provision
|
2,064
|
791
|
59
|
309
|
425
|
(110)
|
261
|
3,799
|
Ending balance
|
$6,313
|
$18,471
|
$8,670
|
$3,223
|
$1,392
|
$3,112
|
$647
|
$41,828
|
June 30, 2013
|
December 31, 2012
|
|||||||
Gross
|
Net
|
Gross
|
Net
|
|||||
Carrying
|
Accumulated
|
Carrying
|
Carrying
|
Accumulated
|
Carrying
|
|||
(000's omitted)
|
Amount
|
Amortization
|
Amount
|
Amount
|
Amortization
|
Amount
|
||
Amortizing intangible assets:
|
||||||||
Core deposit intangibles
|
$38,185
|
($25,538)
|
$12,647
|
$38,958
|
($24,466)
|
$14,492
|
||
Other intangibles
|
9,432
|
(6,967)
|
2,465
|
9,432
|
(6,493)
|
2,939
|
||
Total amortizing intangibles
|
$47,617
|
($32,505)
|
$15,112
|
$48,390
|
($30,959)
|
$17,431
|
Jul - Dec 2013
|
$2,122
|
2014
|
3,597
|
2015
|
2,804
|
2016
|
2,094
|
2017
|
1,478
|
Thereafter
|
3,017
|
Total
|
$15,112
|
(000’s omitted)
|
December 31, 2012
|
Activity
|
June 30, 2013
|
Goodwill
|
$374,527
|
$0
|
$374,527
|
Accumulated impairment
|
(4,824)
|
0
|
(4,824)
|
Goodwill, net
|
$369,703
|
$0
|
$369,703
|
Issuance
|
Par
|
Maturity
|
|||
Trust
|
Date
|
Amount
|
Interest Rate
|
Date
|
Call Price
|
III
|
7/31/2001
|
$24.5 million
|
3 month LIBOR plus 3.58% (3.86%)
|
7/31/2031
|
Par
|
IV
|
12/8/2006
|
$75 million
|
3 month LIBOR plus 1.65% (1.92%)
|
12/15/2036
|
Par
|
Pension Benefits
|
Post-retirement Benefits
|
||||||||||
Three Months Ended
|
Six Months Ended
|
Three Months Ended
|
Six Months Ended
|
||||||||
June 30,
|
June 30,
|
June 30,
|
June 30,
|
||||||||
(000's omitted)
|
2013
|
2012
|
2013
|
2012
|
2013
|
2012
|
2013
|
2012
|
|||
Service cost
|
$985
|
$848
|
$1,970
|
$1,696
|
$0
|
$0
|
$0
|
$0
|
|||
Interest cost
|
1,028
|
1,098
|
2,057
|
2,197
|
22
|
29
|
44
|
57
|
|||
Expected return on plan assets
|
(2,451)
|
(2,299)
|
(4,902)
|
(4,598)
|
0
|
0
|
0
|
0
|
|||
Amortization of unrecognized net loss
|
1,008
|
922
|
2,015
|
1,844
|
3
|
3
|
6
|
6
|
|||
Amortization of prior service cost
|
14
|
(37)
|
29
|
(74)
|
(45)
|
(206)
|
(90)
|
(411)
|
|||
Net periodic benefit cost
|
$584
|
$532
|
$1,169
|
$1,065
|
($20)
|
($174)
|
($40)
|
($348)
|
Three Months Ended
|
Six Months Ended
|
||||
June 30,
|
June 30,
|
||||
(000's omitted, except per share data)
|
2013
|
2012
|
2013
|
2012
|
|
Net income
|
$21,122
|
$21,071
|
$41,363
|
$39,897
|
|
Income attributable to unvested stock-based compensation awards
|
(114)
|
(144)
|
(189)
|
(247)
|
|
Income available to common shareholders
|
$21,008
|
$20,927
|
$41,174
|
$39,650
|
|
Weighted-average common shares outstanding – basic
|
39,914
|
39,324
|
39,809
|
38,948
|
|
Basic earnings per share
|
$0.53
|
$0.53
|
$1.03
|
$1.02
|
|
Net income
|
$21,122
|
$21,071
|
$41,363
|
$39,897
|
|
Income attributable to unvested stock-based compensation awards
|
(114)
|
(144)
|
(189)
|
(247)
|
|
Income available to common shareholders
|
$21,008
|
$20,927
|
$41,174
|
$39,650
|
|
Weighted-average common shares outstanding – basic
|
39,914
|
39,324
|
39,809
|
38,948
|
|
Assumed exercise of stock options
|
427
|
463
|
445
|
501
|
|
Weighted-average common shares outstanding – diluted
|
40,341
|
39,787
|
40,254
|
39,449
|
|
Diluted earnings per share
|
$0.52
|
$0.53
|
$1.02
|
$1.01
|
|
Cash dividends declared per share
|
$0.27
|
$0.26
|
$0.54
|
$0.52
|
(000's omitted)
|
June 30,
2013
|
December 31,
2012
|
Commitments to extend credit
|
$638,774
|
$750,178
|
Standby letters of credit
|
23,314
|
24,168
|
Total
|
$662,088
|
$774,346
|
· | Level 1 – Quoted prices in active markets for identical assets or liabilities. |
· | Level 2 – Quoted prices in active markets for similar assets or liabilities, or quoted prices for identical or similar assets or |
liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability. | |
· | Level 3 – Significant valuation assumptions not readily observable in a market. |
June 30, 2013
|
||||
(000's omitted)
|
Level 1
|
Level 2
|
Level 3
|
Total Fair Value
|
Available-for-sale investment securities:
|
||||
U.S. Treasury and agency securities
|
$676,865
|
$81,005
|
$0
|
$757,870
|
Obligations of state and political subdivisions
|
0
|
610,843
|
0
|
610,843
|
Government agency mortgage-backed securities
|
0
|
238,687
|
0
|
238,687
|
Pooled trust preferred securities
|
0
|
0
|
47,290
|
47,290
|
Government agency collateralized mortgage obligations
|
0
|
26,338
|
0
|
26,338
|
Corporate debt securities
|
0
|
24,798
|
0
|
24,798
|
Marketable equity securities
|
478
|
0
|
0
|
478
|
Total available-for-sale investment securities
|
677,343
|
981,671
|
47,290
|
1,706,304
|
Forward sales commitments
|
0
|
141
|
0
|
141
|
Commitments to originate real estate loans for sale
|
0
|
0
|
(19)
|
(19)
|
Mortgage loans held for sale
|
0
|
1,153
|
0
|
1,153
|
Total
|
$677,343
|
$982,965
|
$47,271
|
$1,707,579
|
December 31, 2012
|
||||
(000's omitted)
|
Level 1
|
Level 2
|
Level 3
|
Total Fair Value
|
Available-for-sale investment securities:
|
||||
U.S. Treasury and agency securities
|
$891,803
|
$187,454
|
$0
|
$1,079,257
|
Obligations of state and political subdivisions
|
0
|
662,892
|
0
|
662,892
|
Government agency mortgage-backed securities
|
0
|
269,951
|
0
|
269,951
|
Pooled trust preferred securities
|
0
|
0
|
49,600
|
49,600
|
Government agency collateralized mortgage obligations
|
0
|
33,935
|
0
|
33,935
|
Corporate debt securities
|
0
|
25,357
|
0
|
25,357
|
Marketable equity securities
|
402
|
0
|
0
|
402
|
Total available-for-sale investment securities/Total
|
$892,205
|
$1,179,589
|
$49,600
|
$2,121,394
|
The valuation techniques used to measure fair value for the items in the table above are as follows:
|
·
|
Available for sale investment securities – The fair value of available-for-sale investment securities is based upon quoted prices, if available. If quoted prices are not available, fair values are measured using quoted market prices for similar securities or model-based valuation techniques. Level 1 securities include U.S. Treasury obligations and marketable equity securities that are traded by dealers or brokers in active over-the-counter markets. Level 2 securities include U.S. agency securities, mortgage-backed securities issued by government-sponsored entities, municipal securities and corporate debt securities that are valued by reference to prices for similar securities or through model-based techniques in which all significant inputs, such as reported trades, trade execution data, LIBOR swap yield curve, market prepayment speeds, credit information, market spreads, and security’s terms and conditions, are observable. Securities classified as Level 3 include pooled trust preferred securities in less liquid markets. The value of these instruments is determined using multiple pricing models or similar techniques from third party sources as well as significant unobservable inputs such as judgment or estimation by the Company in the weighting of the models. See Note D for further discussion of the fair value of investment securities.
|
·
|
Mortgage loans held for sale – Mortgage loans held for sale are carried at fair value, which is determined using quoted secondary-market prices of loans with similar characteristics and, as such, have been classified as a Level 2 valuation. The unpaid principal value of mortgage loans held for sale at June 30, 2013 is approximately $1,167,000. The unrealized loss on mortgage loans held for sale of approximately $14,000 was recognized in mortgage banking and other income in the consolidated statement of income for the three and six months ended June 30, 2013.
|
·
|
Forward sales contracts – The Company enters into forward sales contracts to sell certain residential real estate loans. Such commitments are considered to be derivative financial instruments and, therefore, are carried at estimated fair value in the other asset or other liability section of the consolidated balance sheet. The fair value of these forward sales contracts is primarily measured by obtaining pricing from certain government-sponsored entities and reflects the underlying price the entity would pay the Company for an immediate sale on these mortgages. These instruments are classified as Level 2 in the fair value hierarchy.
|
·
|
Commitments to originate real estate loans for sale – The Company enters into various commitments to originate residential real estate loans for sale. Such commitments are considered to be derivative financial instruments and, therefore, are carried at estimated fair value in the other asset or other liability section of the consolidated balance sheet. The estimated fair value of these commitments is determined using quoted secondary market prices obtained from certain government-sponsored entities. Additionally, accounting guidance requires the expected net future cash flows related to the associated servicing of the loan to be included in the fair value measurement of the derivative. The expected net future cash flows are based on a valuation model that calculates the present value of estimated net servicing income. The valuation model incorporates assumptions that market participants would use in estimating future net servicing income. Such assumptions include estimates of the cost of servicing loans, appropriate discount rate and prepayment speeds. The determination of expected net cash flows is considered a significant unobservable input contributing to the Level 3 classification of commitments to originate real estate loans for sale.
|
Three Months Ended June 30,
|
|||||||
2013
|
2012
|
||||||
(000's omitted)
|
Pooled Trust Preferred Securities
|
Commitments to Originate Real Estate Loans for Sale
|
Total
|
Pooled Trust Preferred Securities
|
|||
Beginning balance
|
$47,486
|
$0
|
$47,486
|
$47,385
|
|||
Total gains (losses) included in earnings (1)
|
47
|
0
|
47
|
96
|
|||
Total gains included in other comprehensive income(2)
|
981
|
0
|
981
|
3,800
|
|||
Principal reductions
|
(1,224)
|
0
|
(1,224)
|
(2,495)
|
|||
Commitments to originate real estate loans held for sale, net
|
0
|
(19)
|
(19)
|
0
|
|||
Ending balance
|
$47,290
|
($19)
|
$47,271
|
$48,786
|
(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 other comprehensive income associated with the pooled trust preferred securities relate to changes |
in unrealized loss and are reported as a component of unrealized gains on securities in the Statement of Comprehensive Income.
|
Six Months Ended June 30,
|
|||||||
2013
|
2012
|
||||||
(000's omitted)
|
Pooled Trust Preferred Securities
|
Commitments to Originate Real Estate Loans for Sale
|
Total
|
Pooled Trust Preferred Securities
|
|||
Beginning balance
|
$49,600
|
$0
|
$49,600
|
$43,846
|
|||
Total gains (losses) included in earnings (1)
|
150
|
0
|
150
|
144
|
|||
Total gains included in other comprehensive income(2)
|
2,873
|
0
|
2,873
|
8,367
|
|||
Principal reductions
|
(5,333)
|
0
|
(5,333)
|
(3,571)
|
|||
Commitments to originate real estate loans held for sale, net
|
0
|
(19)
|
(19)
|
0
|
|||
Ending balance
|
$47,290
|
($19)
|
$47,271
|
$48,786
|
(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 other comprehensive income associated with the pooled trust preferred securities relate to changes |
in unrealized loss and are reported as a component of unrealized gains on securities in the Statement of Comprehensive Income.
|
June 30, 2013
|
December 31, 2012
|
||||||||
(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
|
$1,990
|
$1,990
|
$0
|
$0
|
$1,186
|
$1,186
|
|
Other real estate owned
|
0
|
0
|
5,066
|
5,066
|
0
|
0
|
4,788
|
4,788
|
|
Mortgage servicing rights
|
0
|
0
|
858
|
858
|
0
|
0
|
1,028
|
1,028
|
|
Total
|
$0
|
$0
|
$7,914
|
$7,914
|
$0
|
$0
|
$7,002
|
$7,002
|
Originated mortgage servicing rights are recorded at their fair value at the time of sale of the underlying loan, and are amortized in proportion to and over the estimated period of net servicing income. In accordance with GAAP, the Company must record impairment charges, on a nonrecurring basis, when the carrying value of a stratum exceeds its estimated fair value. The fair value of mortgage servicing rights is based on a valuation model incorporating inputs that market participants would use in estimating future net servicing income. Such inputs include estimates of the cost of servicing loans, appropriate discount rate and prepayment speeds and are considered to be unobservable and contribute to the Level 3 classification of mortgage servicing rights. The amount of impairment recognized is the amount by which the carrying value of the capitalized servicing rights for a stratum exceeds estimated fair value. Impairment is recognized through a valuation allowance. There is a valuation allowance of approximately $0.4 million at June 30, 2013 and December 31, 2012.
|
(000's omitted)
|
Fair Value at June 30, 2013
|
Valuation Technique
|
Significant Unobservable Inputs
|
Significant Unobservable Input Range
(Weighted Average)
|
Pooled trust preferred securities
|
$47,290
|
Consensus pricing
|
Weighting of offered quotes
|
74.8% - 85.5% (81.6%)
|
Impaired loans
|
1,990
|
Fair Value of Collateral
|
Estimated cost of disposal/market adjustment
|
11.0% -50.0% (39.0%)
|
Other real estate owned
|
5,066
|
Fair Value of Collateral
|
Estimated cost of disposal/market adjustment
|
4.0% - 53.0% (29.7%)
|
Mortgage servicing rights
|
858
|
Discounted cash flow
|
Weighted average constant prepayment rate
|
13.6% - 41.4% (37.2%)
|
Discount rate
|
3.27% - 3.97% (3.80%)
|
|||
Adequate compensation
|
$7/loan
|
|||
Commitments to originate real
estate loans for sale
|
(19)
|
Discounted cash flow
|
Embedded servicing value
|
1%
|
(000's omitted)
|
Fair Value at December 31, 2012
|
Valuation Technique
|
Significant Unobservable Inputs
|
Significant Unobservable Input Range
(Weighted Average)
|
Pooled trust preferred securities
|
$49,600
|
Consensus pricing
|
Weighting of offered quotes
|
65.3% - 85.1% (78.4%)
|
Impaired loans
|
1,186
|
Fair value of collateral
|
Estimated cost of disposal/market adjustment
|
25.0% - 50.0% (27.5%)
|
Other real estate owned
|
4,788
|
Fair value of collateral
|
Estimated cost of disposal/market adjustment
|
11.0% - 60.2% (19.9%)
|
Mortgage servicing rights
|
1,028
|
Discounted cash flow
|
Weighted average constant prepayment rate
|
1.1% - 39.6% (34.4%)
|
Discount rate |
2.5% - 3.3% (3.1%)
|
|||
Adequate compensation |
$7/loan
|
June 30, 2013
|
December 31, 2012
|
|||||
Carrying
|
Fair
|
Carrying
|
Fair
|
|||
(000's omitted)
|
Value
|
Value
|
Value
|
Value
|
||
Financial assets:
|
||||||
Net loans
|
$3,935,998
|
$3,875,023
|
$3,865,576
|
$3,881,354
|
||
Financial liabilities:
|
||||||
Deposits
|
5,670,130
|
5,674,653
|
5,628,039
|
5,635,320
|
||
Borrowings
|
322,319
|
345,766
|
728,061
|
820,377
|
||
Subordinated debt held by unconsolidated subsidiary trusts
|
102,085
|
102,337
|
102,073
|
97,899
|
Asset Derivatives
|
||||
(000's omitted)
|
Location
|
Notional
|
Fair Value
|
|
Derivatives not designated as hedging instruments:
|
||||
Forward sales commitments
|
Other assets
|
$7,874
|
$141
|
|
Commitments to originate real estate loans for sale
|
Other assets
|
$10,481
|
(19)
|
|
Total derivatives
|
$122
|
Gain (Loss) recognized in the Statement of Income
|
||||
(000's omitted)
|
Location
|
Three Months Ending
June 30, 2013
|
Six Months Ending June
30, 2013
|
|
Forward sales commitments
|
Mortgage banking and other services
|
$141
|
$141
|
|
Commitments to originate real estate
loans for sale
|
Mortgage banking and other services
|
(19)
|
(19)
|
|
Total
|
$122
|
$122
|
Consolidated
|
||||
(000's omitted)
|
Banking
|
Other
|
Eliminations
|
Total
|
Three Months Ended June 30, 2013
|
||||
Net interest income
|
$58,379
|
$53
|
$0
|
$58,432
|
Provision for loan losses
|
1,321
|
0
|
0
|
1,321
|
Noninterest income
|
13,654
|
14,028
|
(584)
|
27,098
|
Amortization of intangible assets
|
908
|
232
|
0
|
1,140
|
Other operating expenses
|
42,946
|
10,874
|
(584)
|
53,236
|
Income before income taxes
|
$26,858
|
$2,975
|
$0
|
$29,833
|
Assets
|
$6,995,501
|
$37,864
|
($12,649)
|
$7,020,716
|
Goodwill
|
$359,207
|
$10,496
|
0
|
$369,703
|
Three Months Ended June 30, 2012
|
||||
Net interest income
|
$57,730
|
$41
|
$0
|
$57,771
|
Provision for loan losses
|
2,155
|
0
|
0
|
2,155
|
Noninterest income
|
11,929
|
12,281
|
(514)
|
23,696
|
Amortization of intangible assets
|
774
|
271
|
0
|
1,045
|
Other operating expenses
|
38,588
|
10,251
|
(514)
|
48,325
|
Income before income taxes
|
$28,142
|
$1,800
|
$0
|
$29,942
|
Assets
|
$7,141,681
|
$39,632
|
($14,982)
|
$7,166,331
|
Goodwill
|
$334,554
|
$10,496
|
$0
|
$345,050
|
Six Months Ended June 30, 2013
|
||||
Net interest income
|
$116,753
|
$104
|
$0
|
$116,857
|
Provision for loan losses
|
2,714
|
0
|
0
|
2,714
|
Noninterest income
|
26,295
|
28,102
|
(1,190)
|
53,207
|
Amortization of intangible assets
|
1,846
|
473
|
0
|
2,319
|
Other operating expenses
|
86,177
|
21,622
|
(1,190)
|
106,609
|
Income before income taxes
|
$52,311
|
$6,111
|
0
|
$58,422
|
Six Months Ended June 30, 2012
|
||||
Net interest income
|
$111,599
|
$81
|
$0
|
$111,680
|
Provision for loan losses
|
3,799
|
0
|
0
|
3,799
|
Noninterest income
|
23,292
|
24,961
|
(1,089)
|
47,164
|
Amortization of intangible assets
|
1,578
|
553
|
0
|
2,131
|
Other operating expenses
|
77,106
|
20,625
|
(1,089)
|
96,642
|
Income before income taxes
|
$52,408
|
$3,864
|
$0
|
$56,272
|
·
|
Acquired loans - Acquired loans are initially recorded at their acquisition date fair values. The carryover of allowance for loan losses is prohibited as any credit losses in the loans are included in the determination of the fair value of the loans at the acquisition date. Fair values for acquired loans are based on a discounted cash flow methodology that involves assumptions and judgments as to credit risk, prepayment risk, liquidity risk, default rates, loss severity, payment speeds, collateral values and discount rate. Subsequent to the acquisition of acquired impaired loans, GAAP requires the continued estimation of expected cash flows to be received. This estimation requires numerous assumptions and judgments using internal and third-party credit quality information. Changes in expected cash flows could result in the recognition of impairment through provision for credit losses.
For acquired loans that are not deemed impaired at acquisition, purchase discounts representing the principal losses expected over the life of the loan are a component of the initial fair value. Subsequent to the purchase date, the methods utilized to estimate the required allowance for loan losses for the non-impaired acquired loans is similar to originated loans, however, the Company records a provision for loan losses only when the required allowance exceeds any remaining purchase discounts for loans evaluated collectively for impairment. For loans individually evaluated for impairment, a provision is recorded when the required allowance exceeds any remaining discount on the loan.
|
·
|
Allowance for loan losses – The allowance for loan losses reflects management’s best estimate of probable loan losses in the Company’s loan portfolio. Determination of the allowance for loan losses is inherently subjective. It requires significant estimates including the amounts and timing of expected future cash flows and evaluation of collateral values on impaired loans and the amount of estimated losses on pools of homogeneous loans which is based on historical loss experience and consideration of current economic trends, all of which may be susceptible to significant change.
|
·
|
Investment securities – Investment securities are classified as held-to-maturity, available-for-sale, or trading. The appropriate classification is based partially on the Company’s ability to hold the securities to maturity and largely on management’s intentions with respect to either holding or selling the securities. The classification of investment securities is significant since it directly impacts the accounting for unrealized gains and losses on securities. Unrealized gains and losses on available-for-sale securities are recorded in accumulated other comprehensive income or loss, as a separate component of shareholders’ equity and do not affect earnings until realized. The fair values of investment securities are generally determined by reference to quoted market prices, where available. If quoted market prices are not available, fair values are based on quoted market prices of comparable instruments, or a discounted cash flow model using market estimates of the amount and timing of future cash flows, prepayment speed assumptions, expected interest rate curve , and the selection of discount rates that appropriately reflect market and credit risks. Investment securities with significant declines in fair value are evaluated to determine whether they should be considered other-than-temporarily impaired (“OTTI”). An unrealized loss is generally deemed to be other-than-temporary and a credit loss is deemed to exist if the present value of the expected future cash flows is less than the amortized cost basis of the debt security. The credit loss component of an OTTI write-down is recorded in earnings, while the remaining portion of the impairment loss is recognized in other comprehensive income (loss), provided the Company does not intend to sell the underlying debt security, and it is not more likely than not that the Company will be required to sell the debt security prior to recovery of the full value of its amortized cost basis.
|
·
|
Retirement benefits – The Company provides defined benefit pension benefits to eligible employees and post-retirement health and life insurance benefits to certain eligible retirees. The Company also provides deferred compensation and supplemental executive retirement plans for selected current and former employees and officers. Expense under these plans is charged to current operations and consists of several components of net periodic benefit cost based on various actuarial assumptions regarding future experience under the plans, including, but not limited to, discount rate, rate of future compensation increases, mortality rates, future health care costs and expected return on plan assets.
|
·
|
Provision for income taxes – The Company is subject to examinations from various taxing authorities. Such examinations may result in challenges to the tax return treatment applied by the Company to specific transactions. Management believes that the assumptions and judgments used to record tax related assets or liabilities have been appropriate. Should tax laws change or the taxing authorities determine that management’s assumptions were inappropriate, an adjustment may be required which could have a material effect on the Company’s results of operations.
|
·
|
Intangible assets – As a result of acquisitions, the Company has acquired goodwill and identifiable intangible assets. Goodwill represents the cost of acquired companies in excess of the fair value of net assets at the acquisition date. Goodwill is evaluated at least annually, or when business conditions suggest impairment may have occurred and will be reduced to its carrying value through a charge to earnings if impairment exists. Core deposits and other identifiable intangible assets are amortized to expense over their estimated useful lives. The determination of whether or not impairment exists is based upon discounted cash flow modeling techniques that require management to make estimates regarding the amount and timing of expected future cash flows. It also requires them to select a discount rate that reflects the current return requirements of the market in relation to present risk-free interest rates, expected equity market premiums, peer volatility indicators and company-specific market and performance metrics, all of which are susceptible to change based on changes in economic conditions and other factors. Future events or changes in the estimates used to determine the carrying value of goodwill and identifiable intangible assets could have a material impact on the Company’s results of operations.
|
Three Months Ended
|
Six Months Ended
|
|||||
June 30,
|
June 30,
|
|||||
(000's omitted, except per share data)
|
2013
|
2012
|
2013
|
2012
|
||
Net interest income
|
$58,432
|
$57,771
|
$116,857
|
$111,680
|
||
Provision for loan losses
|
1,321
|
2,155
|
2,714
|
3,799
|
||
Noninterest income
|
26,807
|
23,696
|
52,908
|
47,164
|
||
Gain on sales of investment securities, net
|
16,008
|
0
|
63,799
|
0
|
||
Loss on debt extinguishments
|
(15,717)
|
0
|
(63,500)
|
0
|
||
Noninterest expenses
|
54,376
|
49,370
|
108,928
|
98,773
|
||
Income before taxes
|
29,833
|
29,942
|
58,422
|
56,272
|
||
Income taxes
|
8,711
|
8,871
|
17,059
|
16,375
|
||
Net income
|
$21,122
|
$21,071
|
$41,363
|
$39,897
|
||
Diluted weighted average common shares outstanding
|
40,558
|
40,057
|
40,437
|
39,692
|
||
Diluted earnings per share
|
$0.52
|
$0.53
|
$1.02
|
$1.01
|
Three Months Ended
|
Three Months Ended
|
||||||
June 30, 2013
|
June 30, 2012
|
||||||
Avg.
|
Avg.
|
||||||
Average
|
Yield/Rate
|
Average
|
Yield/Rate
|
||||
(000's omitted except yields and rates)
|
Balance
|
Interest
|
Paid
|
Balance
|
Interest
|
Paid
|
|
Interest-earning assets:
|
|||||||
Cash equivalents
|
$148,188
|
$96
|
0.26%
|
$10,017
|
$8
|
0.34%
|
|
Taxable investment securities (1)
|
1,565,756
|
12,892
|
3.30%
|
2,091,575
|
17,977
|
3.46%
|
|
Nontaxable investment securities (1)
|
642,424
|
8,183
|
5.11%
|
692,839
|
9,540
|
5.54%
|
|
Loans (net of unearned discount)(2)
|
3,899,744
|
46,613
|
4.79%
|
3,512,427
|
47,355
|
5.42%
|
|
Total interest-earning assets
|
6,256,112
|
67,784
|
4.35%
|
6,306,858
|
74,880
|
4.78%
|
|
Noninterest-earning assets
|
747,711
|
751,615
|
|||||
Total assets
|
$7,003,823
|
$7,058,473
|
|||||
Interest-bearing liabilities:
|
|||||||
Interest checking, savings and money market deposits
|
$3,622,221
|
899
|
0.10%
|
$2,957,483
|
1,561
|
0.21%
|
|
Time deposits
|
958,985
|
1,804
|
0.75%
|
1,045,730
|
2,819
|
1.08%
|
|
Borrowings
|
358,627
|
3,005
|
3.36%
|
1,182,707
|
8,394
|
2.85%
|
|
Total interest-bearing liabilities
|
4,939,833
|
5,708
|
0.46%
|
5,185,920
|
12,774
|
0.99%
|
|
Noninterest-bearing liabilities:
|
|||||||
Noninterest checking deposits
|
1,095,774
|
907,153
|
|||||
Other liabilities
|
95,108
|
102,653
|
|||||
Shareholders' equity
|
873,108
|
862,747
|
|||||
Total liabilities and shareholders' equity
|
$7,003,823
|
$7,058,473
|
|||||
Net interest earnings
|
$62,076
|
$62,106
|
|||||
Net interest spread
|
3.89%
|
3.79%
|
|||||
Net interest margin on interest-earning assets
|
3.98%
|
3.96%
|
|||||
Fully tax-equivalent adjustment
|
$3,644
|
$4,335
|
(1)
|
Averages for investment securities are based on historical cost basis and the yields do not give effect to changes in fair
value that is reflected as a component of shareholders’ equity and deferred taxes.
|
(2)
|
The impact of interest and fees not recognized on nonaccrual loans was immaterial.
|
Six Months Ended
|
Six Months Ended
|
||||||
June 30, 2013
|
June 30, 2012
|
||||||
Avg.
|
Avg.
|
||||||
Average
|
Yield/Rate
|
Average
|
Yield/Rate
|
||||
(000's omitted except yields and rates)
|
Balance
|
Interest
|
Paid
|
Balance
|
Interest
|
Paid
|
|
Interest-earning assets:
|
|||||||
Cash equivalents
|
$116,178
|
$148
|
0.26%
|
$130,923
|
$169
|
0.26%
|
|
Taxable investment securities (1)
|
1,764,311
|
28,530
|
3.26%
|
1,828,396
|
32,584
|
3.58%
|
|
Nontaxable investment securities (1)
|
649,022
|
17,044
|
5.30%
|
653,393
|
18,410
|
5.67%
|
|
Loans (net of unearned discount)(2)
|
3,880,341
|
94,009
|
4.89%
|
3,483,333
|
95,259
|
5.50%
|
|
Total interest-earning assets
|
6,409,852
|
139,731
|
4.40%
|
6,096,045
|
146,422
|
4.83%
|
|
Noninterest-earning assets
|
775,504
|
742,598
|
|||||
Total assets
|
$7,185,356
|
$6,838,643
|
|||||
Interest-bearing liabilities:
|
|||||||
Interest checking, savings and money market deposits
|
$3,601,246
|
1,992
|
0.11%
|
$2,910,151
|
3,579
|
0.25%
|
|
Time deposits
|
979,922
|
3,853
|
0.79%
|
1,073,486
|
6,310
|
1.18%
|
|
Borrowings
|
521,649
|
9,363
|
3.62%
|
1,021,241
|
16,487
|
3.25%
|
|
Total interest-bearing liabilities
|
5,102,817
|
15,208
|
0.60%
|
5,004,878
|
26,376
|
1.06%
|
|
Noninterest-bearing liabilities:
|
|||||||
Noninterest checking deposits
|
1,095,517
|
895,802
|
|||||
Other liabilities
|
103,652
|
96,068
|
|||||
Shareholders' equity
|
883,370
|
841,895
|
|||||
Total liabilities and shareholders' equity
|
$7,185,356
|
$6,838,643
|
|||||
Net interest earnings
|
$124,523
|
$120,046
|
|||||
Net interest spread
|
3.80%
|
3.77%
|
|||||
Net interest margin on interest-earning assets
|
3.92%
|
3.96%
|
|||||
Fully tax-equivalent adjustment
|
$7,666
|
$8,366
|
(1)
|
Averages for investment securities are based on historical cost basis and the yields do not give effect to changes in fair
value that is reflected as a component of shareholders’ equity and deferred taxes.
|
(2)
|
The impact of interest and fees not recognized on nonaccrual loans was immaterial.
|
Three months ended June 30, 2013
|
Six months ended June 30, 2013
|
||||||
versus June 30, 2012
|
versus June 30, 2012
|
||||||
Increase (Decrease) Due to Change in (1)
|
Increase (Decrease) Due to Change in (1)
|
||||||
Net
|
Net
|
||||||
(000's omitted)
|
Volume
|
Rate
|
Change
|
Volume
|
Rate
|
Change
|
|
Interest earned on:
|
|||||||
Cash equivalents
|
$90
|
($2)
|
$88
|
($19)
|
($2)
|
($21)
|
|
Taxable investment securities
|
(4,358)
|
(727)
|
(5,085)
|
(1,113)
|
(2,941)
|
(4,054)
|
|
Nontaxable investment securities
|
(669)
|
(688)
|
(1,357)
|
(122)
|
(1,244)
|
(1,366)
|
|
Loans (net of unearned discount)
|
4,930
|
(5,672)
|
(742)
|
10,237
|
(11,487)
|
(1,250)
|
|
Total interest-earning assets (2)
|
(598)
|
(6,498)
|
(7,096)
|
7,288
|
(13,979)
|
(6,691)
|
|
Interest paid on:
|
|||||||
Interest checking, savings and money market deposits
|
296
|
(958)
|
(662)
|
709
|
(2,296)
|
(1,587)
|
|
Time deposits
|
(219)
|
(796)
|
(1,015)
|
(512)
|
(1,945)
|
(2,457)
|
|
Borrowings
|
(6,688)
|
1,299
|
(5,389)
|
(8,799)
|
1,675
|
(7,124)
|
|
Total interest-bearing liabilities (2)
|
(580)
|
(6,486)
|
(7,066)
|
506
|
(11,674)
|
(11,168)
|
|
Net interest earnings (2)
|
(503)
|
473
|
(30)
|
6,110
|
(1,633)
|
4,477
|
(1)
|
The change in interest due to both rate and volume has been allocated to volume and rate changes in proportion to the relationship
of the absolute dollar amounts of such change in each component.
|
(2)
|
Changes due to volume and rate are computed from the respective changes in average balances and rates of the totals; they are not a
summation of the changes of the components.
|
Three Months Ended
|
Six Months Ended
|
|||||
June 30,
|
June 30,
|
|||||
(000's omitted)
|
2013
|
2012
|
2013
|
2012
|
||
Deposit service fees
|
$12,345
|
$11,035
|
$23,940
|
$21,404
|
||
Benefit trust, administration, consulting and actuarial fees
|
9,397
|
8,664
|
19,167
|
17,637
|
||
Wealth management services
|
4,045
|
3,101
|
7,743
|
6,233
|
||
Other banking services
|
679
|
662
|
1,546
|
1,336
|
||
Mortgage banking
|
341
|
234
|
512
|
554
|
||
Subtotal
|
26,807
|
23,696
|
52,908
|
47,164
|
||
Gain on sales of investment securities
|
16,008
|
0
|
63,799
|
0
|
||
Loss on debt extinguishments
|
(15,717)
|
0
|
(63,500)
|
0
|
||
Total noninterest income
|
$27,098
|
$23,696
|
$53,207
|
$47,164
|
||
Noninterest income/operating income (FTE basis) (1)
|
30.2%
|
27.6%
|
29.8%
|
28.2%
|
||
(1) For purposes of this ratio noninterest income excludes gains and losses on investment securities and debt extinguishments. Operating income is
defined as net interest income on a fully-tax equivalent basis plus noninterest income, excluding gains and losses on investment securities and
debt extinguishments.
|
Three Months Ended
|
Six Months Ended
|
|||||
June 30,
|
June 30,
|
|||||
(000's omitted)
|
2013
|
2012
|
2013
|
2012
|
||
Salaries and employee benefits
|
$30,286
|
$26,844
|
$60,769
|
$54,269
|
||
Occupancy and equipment
|
6,750
|
6,130
|
13,815
|
12,593
|
||
Data processing and communications
|
6,600
|
5,817
|
13,336
|
11,417
|
||
Amortization of intangible assets
|
1,140
|
1,045
|
2,319
|
2,131
|
||
Legal and professional fees
|
1,526
|
1,755
|
3,466
|
3,946
|
||
Office supplies and postage
|
1,518
|
1,382
|
3,013
|
2,850
|
||
Business development and marketing
|
1,804
|
1,876
|
3,283
|
3,048
|
||
FDIC insurance premiums
|
945
|
903
|
2,000
|
1,809
|
||
Acquisition expenses
|
0
|
164
|
0
|
424
|
||
Other
|
3,807
|
3,454
|
6,927
|
6,286
|
||
Total noninterest expenses
|
$54,376
|
$49,370
|
$108,928
|
$98,773
|
||
Operating expenses(1)/average assets
|
3.05%
|
2.74%
|
2.99%
|
2.83%
|
||
Efficiency ratio(2)
|
59.9%
|
56.1%
|
60.1%
|
57.5%
|
(1)
|
Operating expenses is calculated as total noninterest expenses less acquisition expenses and amortization
of intangibles.
|
(2)
|
Efficiency ratio is calculated as operating expenses as defined in (1) divided by net interest income on a fully
tax-equivalent basis plus noninterest income less gain on sales of investment securities and loss on debt
extinguishments, net.
|
June 30, 2013
|
December 31, 2012
|
June 30, 2012
|
|||||||
Amortized
|
Amortized
|
Amortized
|
|||||||
Cost/Book
|
Fair
|
Cost/Book
|
Fair
|
Cost/Book
|
Fair
|
||||
(000's omitted)
|
Value
|
Value
|
Value
|
Value
|
Value
|
Value
|
|||
Held-to-Maturity Portfolio:
|
|||||||||
U.S. Treasury and agency securities
|
$539,979
|
$577,820
|
$548,634
|
$607,715
|
$547,294
|
$609,347
|
|||
Obligations of state and political subdivisions
|
61,826
|
65,022
|
65,742
|
71,592
|
69,669
|
75,376
|
|||
Government agency mortgage-backed securities
|
14,475
|
14,623
|
20,578
|
21,657
|
27,822
|
29,491
|
|||
Corporate debt securities
|
2,914
|
2,937
|
2,924
|
2,977
|
2,935
|
2,938
|
|||
Other securities
|
13
|
13
|
16
|
16
|
27
|
27
|
|||
Total held-to-maturity portfolio
|
619,207
|
660,415
|
637,894
|
703,957
|
647,747
|
717,179
|
|||
Available-for-Sale Portfolio:
|
|||||||||
U.S. Treasury and agency securities
|
764,446
|
757,870
|
988,217
|
1,079,257
|
994,415
|
1,089,292
|
|||
Obligations of state and political subdivisions
|
604,692
|
610,843
|
629,883
|
662,892
|
685,086
|
713,232
|
|||
Government agency mortgage-backed securities
|
232,707
|
238,687
|
253,013
|
269,951
|
277,971
|
298,314
|
|||
Pooled trust preferred securities
|
56,796
|
47,290
|
61,979
|
49,600
|
64,688
|
48,786
|
|||
Government agency collateralized mortgage obligations
|
25,222
|
26,338
|
32,359
|
33,935
|
38,713
|
39,910
|
|||
Corporate debt securities
|
24,082
|
24,798
|
24,136
|
25,357
|
14,995
|
16,231
|
|||
Marketable equity securities
|
351
|
478
|
351
|
402
|
381
|
382
|
|||
Total available-for-sale portfolio
|
1,708,296
|
1,706,304
|
1,989,938
|
2,121,394
|
2,076,249
|
2,206,147
|
|||
Other Securities:
|
|||||||||
Federal Home Loan Bank common stock
|
20,171
|
20,171
|
38,111
|
38,111
|
57,452
|
57,452
|
|||
Federal Reserve Bank common stock
|
16,050
|
16,050
|
16,050
|
16,050
|
15,451
|
15,451
|
|||
Other equity securities
|
4,780
|
4,780
|
5,078
|
5,078
|
5,121
|
5,121
|
|||
Total other securities
|
41,001
|
41,001
|
59,239
|
59,239
|
78,024
|
78,024
|
|||
Total investments
|
$2,368,504
|
$2,407,720
|
$2,687,071
|
$2,884,590
|
$2,802,020
|
$3,001,350
|
(000’s omitted)
|
PreTSL XXVI
|
PreTSL XXVII
|
PreTSL XXVIII
|
|||
Single issuer or pooled
|
Pooled
|
Pooled
|
Pooled
|
|||
Class
|
A-1
|
A-1
|
A-1
|
|||
Book value at 6/30/13
|
$16,108
|
$20,112
|
$20,576
|
|||
Fair value at 6/30/13
|
$12,452
|
$17,238
|
$17,600
|
|||
Unrealized loss at 6/30/13
|
$3,656
|
$2,874
|
$2,976
|
|||
Rating (Moody’s/Fitch/S&P)
|
(A3/BBB/BB-)
|
(A2/BBB/BB-)
|
(A3/BBB/B)
|
|||
Number of depository institutions/companies in issuance
|
61/68
|
40/47
|
43/52
|
|||
Deferrals and defaults as a percentage of collateral
|
30.2%
|
26.1%
|
25.2%
|
|||
Excess subordination
|
41.4%
|
38.9%
|
38.6%
|
(000's omitted)
|
June 30, 2013
|
December 31, 2012
|
June 30, 2012
|
||||||
Consumer mortgage
|
$1,527,341
|
38.8%
|
$1,448,415
|
37.5%
|
$1,289,155
|
36.2%
|
|||
Business lending
|
1,225,671
|
31.1%
|
1,233,944
|
31.9%
|
1,216,309
|
34.2%
|
|||
Consumer indirect
|
663,924
|
16.9%
|
647,518
|
16.8%
|
591,249
|
16.6%
|
|||
Consumer direct
|
171,727
|
4.4%
|
171,474
|
4.4%
|
154,402
|
4.3%
|
|||
Home equity
|
347,335
|
8.8%
|
364,225
|
9.4%
|
310,555
|
8.7%
|
|||
Total loans
|
$3,935,998
|
100.0%
|
$3,865,576
|
100.0%
|
$3,561,670
|
100.0%
|
June 30,
|
December 31,
|
June 30,
|
||||
(000's omitted)
|
2013
|
2012
|
2012
|
|||
Nonaccrual loans
|
||||||
Consumer mortgage
|
$11,892
|
$11,286
|
$7,481
|
|||
Business lending
|
8,550
|
13,691
|
19,746
|
|||
Consumer indirect
|
0
|
0
|
1
|
|||
Consumer direct
|
5
|
8
|
0
|
|||
Home equity
|
2,550
|
1,375
|
1,343
|
|||
Total nonaccrual loans
|
22,997
|
26,360
|
28,571
|
|||
Accruing loans 90+ days delinquent
|
||||||
Consumer mortgage
|
994
|
1,818
|
2,883
|
|||
Business lending
|
66
|
247
|
138
|
|||
Consumer indirect
|
181
|
73
|
38
|
|||
Consumer direct
|
78
|
71
|
36
|
|||
Home equity
|
120
|
539
|
342
|
|||
Total accruing loans 90+ days delinquent
|
1,439
|
2,748
|
3,437
|
|||
Nonperforming loans
|
||||||
Consumer mortgage
|
12,886
|
13,104
|
10,364
|
|||
Business lending
|
8,616
|
13,938
|
19,884
|
|||
Consumer indirect
|
181
|
73
|
39
|
|||
Consumer direct
|
83
|
79
|
36
|
|||
Home equity
|
2,670
|
1,914
|
1,685
|
|||
Total nonperforming loans
|
24,436
|
29,108
|
32,008
|
|||
Other real estate owned (OREO)
|
5,066
|
4,788
|
2,899
|
|||
Total nonperforming assets
|
$29,502
|
$33,896
|
$34,907
|
|||
Nonperforming loans / total loans
|
0.62%
|
0.75%
|
0.90%
|
|||
Nonperforming assets / total loans and other real estate
|
0.75%
|
0.88%
|
0.98%
|
|||
Delinquent loans (30 days old to nonaccruing) to total loans
|
1.50%
|
1.92%
|
1.71%
|
|||
Net charge-offs to average loans outstanding (quarterly)
|
0.08%
|
0.23%
|
0.24%
|
|||
Net charge-offs to average legacy loans outstanding (quarterly)
|
0.07%
|
0.19%
|
0.16%
|
|||
Loan loss provision to net charge-offs (quarterly)
|
173%
|
108%
|
101%
|
|||
Legacy loan loss provision to net charge-offs (quarterly) (1)
|
210%
|
116%
|
180%
|
|||
(1)Legacy loans exclude loans acquired after January 1, 2009. These ratios are included for comparative purposes to
prior periods.
|
Three Months Ended
|
Six Months Ended
|
|||||
June 30,
|
June 30,
|
|||||
(000's omitted)
|
2013
|
2012
|
2013
|
2012
|
||
Allowance for loan losses at beginning of period
|
$42,913
|
$41,809
|
$42,888
|
$42,213
|
||
Charge-offs:
|
||||||
Consumer mortgage
|
229
|
150
|
600
|
419
|
||
Business lending
|
280
|
1,662
|
1,064
|
3,227
|
||
Consumer indirect
|
997
|
1,134
|
1,888
|
2,173
|
||
Consumer direct
|
407
|
273
|
952
|
730
|
||
Home equity
|
135
|
65
|
320
|
181
|
||
Total charge-offs
|
2,048
|
3,284
|
4,824
|
6,730
|
||
Recoveries:
|
||||||
Consumer mortgage
|
7
|
4
|
13
|
17
|
||
Business lending
|
102
|
178
|
244
|
333
|
||
Consumer indirect
|
913
|
782
|
1,871
|
1,824
|
||
Consumer direct
|
257
|
182
|
555
|
354
|
||
Home equity
|
8
|
2
|
12
|
18
|
||
Total recoveries
|
1,287
|
1,148
|
2,695
|
2,546
|
||
Net charge-offs
|
761
|
2,136
|
2,129
|
4,184
|
||
Provision for loans losses
|
1,321
|
2,155
|
2,714
|
3,799
|
||
Allowance for loan losses at end of period
|
$43,473
|
$41,828
|
$43,473
|
$41,828
|
||
Allowance for loan losses / total loans
|
1.10%
|
1.17%
|
1.10%
|
1.17%
|
||
Allowance for legacy loan losses / total legacy loans (1)
|
1.19%
|
1.28%
|
1.19%
|
1.28%
|
||
Allowance for loan losses / nonperforming loans
|
178%
|
131%
|
178%
|
131%
|
||
Allowance for legacy loan losses / nonperforming loans (1)
|
215%
|
161%
|
215%
|
161%
|
||
Net charge-offs (annualized) to average loans outstanding:
|
||||||
Consumer mortgage
|
0.06%
|
0.05%
|
0.08%
|
0.06%
|
||
Business lending
|
0.06%
|
0.49%
|
0.13%
|
0.48%
|
||
Consumer indirect
|
0.05%
|
0.25%
|
0.01%
|
0.13%
|
||
Consumer direct
|
0.35%
|
0.24%
|
0.47%
|
0.50%
|
||
Home equity
|
0.14%
|
0.08%
|
0.18%
|
0.10%
|
||
Total loans
|
0.08%
|
0.24%
|
0.11%
|
0.24%
|
||
(1)
|
Legacy loans exclude loans acquired after January 1, 2009. These ratios are included for comparative purposes
to prior periods.
|
June 30,
|
December 31,
|
June 30,
|
||||
(000's omitted)
|
2013
|
2012
|
2012
|
|||
Noninterest checking deposits
|
$1,095,774
|
$1,098,193
|
$907,153
|
|||
Interest checking deposits
|
1,211,417
|
1,130,859
|
988,993
|
|||
Regular savings deposits
|
978,815
|
940,180
|
707,127
|
|||
Money market deposits
|
1,431,989
|
1,438,139
|
1,261,363
|
|||
Time deposits
|
958,985
|
1,036,169
|
1,045,730
|
|||
Total deposits
|
$5,676,980
|
$5,643,540
|
$4,910,366
|
|||
Nonpublic fund deposits
|
$5,127,693
|
$5,131,777
|
$4,387,175
|
|||
Public fund deposits
|
549,287
|
511,763
|
523,191
|
|||
Total deposits
|
$5,676,980
|
$5,643,540
|
$4,910,366
|
·
|
Asset and liability levels using June 30, 2013 as a starting point.
|
·
|
There are assumed to be conservative levels of balance sheet growth, low to mid single digit growth in loans and deposits, while using the cash flows from investment contractual maturities and prepayments to repay short-term capital market borrowings or reinvest into securities or cash equivalents.
|
·
|
The prime rate and federal funds rates are assumed to move up 200 basis points over a 12-month period while moving the long end of the treasury curve to spreads over federal funds that are more consistent with historical norms (normalized yield curve). In the 0 basis point model, the prime and federal funds rates remain at current levels while moving the long end of the curve to levels over federal funds using spreads at a time when the yield curve was flat. Deposit rates are assumed to move in a manner that reflects the historical relationship between deposit rate movement and changes in the federal funds rate.
|
·
|
Cash flows are based on contractual maturity, optionality, and amortization schedules along with applicable prepayments derived from internal historical data and external sources.
|
Change in interest rates
|
Calculated annualized
increase (decrease) in
projected net interest income
at June 30, 2013
|
+200 basis points
|
($4,429,000)
|
0 basis points
|
($574,000)
|
Issuer Purchases of Equity Securities
|
||||
Total
|
Total Number of Shares
|
Maximum Number of Shares
|
||
Number of
|
Average
|
Purchased as Part of
|
That May Yet be Purchased
|
|
Period
|
Shares Purchased
|
Price Paid
Per share
|
Publicly Announced
Plans or Programs
|
Under the Plans or
Programs
|
April 1-30, 2013 (1)
|
0
|
$ 0.00
|
0
|
2,000,000
|
May 1-31, 2013 (1)
|
360
|
29.72
|
0
|
2,000,000
|
June 1-30, 2013 (1)
|
0
|
0.0
|
0
|
2,000,000
|
Total
|
360
|
$29.72
|
|
|
(1) The common shares repurchased were acquired by the Company in connection with satisfaction of tax withholding obligations
on vested restricted stock issued pursuant to an employee benefit plan. These shares were not repurchased as part of the
publicly announced repurchase plan described above.
|
3.1
|
Certificate of Amendment of the Certificate of Incorporation, filed with the Delaware Secretary of State on May 14, 2013.
|
31.1
|
Certification of Mark E. Tryniski, President and Chief Executive Officer of the Registrant, pursuant to Rule 13a-15(e) or Rule 15d-15(e) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (1)
|
31.2
|
Certification of Scott Kingsley, Treasurer and Chief Financial Officer of the Registrant, pursuant to Rule 13a-15(e) or Rule 15d-15(e) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (1)
|
32.1
|
Certification of Mark E. Tryniski, President and Chief Executive Officer of the Registrant, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002. (2)
|
32.2
|
Certification of Scott Kingsley, Treasurer and Chief Financial Officer of the Registrant, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002. (2)
|
101.INS
|
XBRL Instance Document. (3)
|
101.SCH
|
XBRL Taxonomy Extension Schema Document. (3)
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document. (3)
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document. (3)
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document. (3)
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document. (3)
|
(1) Filed herewith.
|
(2) Furnished herewith.
|
(3) XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.
|
Date: August 9, 2013 | /s/ Mark E. Tryniski | |
Mark E. Tryniski, President and Chief | ||
Executive Officer | ||
Date: August 9, 2013 | /s/ Scott Kingsley | |
Scott Kingsley, Treasurer and Chief | ||
Financial Officer |
COMMUNITY BANK SYSTEM, INC. | |
By:/s/ Mark E. Tryniski | |
Mark E. Tryniski | |
President and CEO | |
ATTEST: | |
By:/s/ Danielle M Cima | |
Danielle M. Cima, Secretary |
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
(1)
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
(1)
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
BENEFIT PLANS
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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BENEFIT PLANS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BENEFIT PLANS | NOTE H: BENEFIT PLANS The Company provides a qualified defined benefit pension to eligible employees and retirees, other post-retirement health and life insurance benefits to certain retirees, an unfunded supplemental pension plan for certain key executives, and an unfunded stock balance plan for certain of its nonemployee directors. The Company accrues for the estimated cost of these benefits through charges to expense during the years that employees earn these benefits. The net periodic benefit cost for the three and six months ended June 30, 2013 and 2012 is as follows:
During July 2013 the Company made a contribution to its defined benefit pension plan of $10.0 million. No other contributions are required in 2013. |
DERIVATIVE INSTRUMENTS (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2013
|
Jun. 30, 2013
|
|
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative, Gain (Loss) | $ 122 | $ 122 |
Not Designated as Hedging Instrument [Member]
|
||
Derivatives, Estimated Fair Value and Balance Sheet Location [Line Items] | ||
Fair Value | 122 | 122 |
Commitments to originate real estate loans for sale [Member] | Mortgage banking and other services [Member]
|
||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative, Gain (Loss) | (19) | (19) |
Forward sales commitments [Member] | Mortgage banking and other services [Member]
|
||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative, Gain (Loss) | 141 | 141 |
Other Assets [Member] | Commitments to originate real estate loans for sale [Member] | Not Designated as Hedging Instrument [Member]
|
||
Derivatives, Estimated Fair Value and Balance Sheet Location [Line Items] | ||
Derivative, Notional Amount | 10,481 | 10,481 |
Other Assets [Member] | Forward sales commitments [Member] | Not Designated as Hedging Instrument [Member]
|
||
Derivatives, Estimated Fair Value and Balance Sheet Location [Line Items] | ||
Derivative, Notional Amount | 7,874 | 7,874 |
Fair Value | 141 | 141 |
Other Liabilities [Member] | Commitments to originate real estate loans for sale [Member] | Not Designated as Hedging Instrument [Member]
|
||
Derivatives, Estimated Fair Value and Balance Sheet Location [Line Items] | ||
Fair Value | $ (19) | $ (19) |
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (USD $)
In Thousands, except Per Share data, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Interest income: | ||||
Interest and fees on loans | $ 46,412 | $ 47,077 | $ 93,530 | $ 94,715 |
Interest and dividends on taxable investments | 12,566 | 17,450 | 27,782 | 31,725 |
Interest and dividends on nontaxable investments | 5,162 | 6,018 | 10,753 | 11,616 |
Total interest income | 64,140 | 70,545 | 132,065 | 138,056 |
Interest expense: | ||||
Interest on deposits | 2,703 | 4,380 | 5,845 | 9,889 |
Interest on borrowings | 2,375 | 7,713 | 8,105 | 15,113 |
Interest on subordinated debt held by unconsolidated subsidiary trusts | 630 | 681 | 1,258 | 1,374 |
Total interest expense | 5,708 | 12,774 | 15,208 | 26,376 |
Net interest income | 58,432 | 57,771 | 116,857 | 111,680 |
Provision for loan losses | 1,321 | 2,155 | 2,714 | 3,799 |
Net interest income after provision for loan losses | 57,111 | 55,616 | 114,143 | 107,881 |
Noninterest income: | ||||
Deposit service fees | 12,345 | 11,035 | 23,940 | 21,404 |
Other banking services | 1,020 | 896 | 2,058 | 1,890 |
Benefit trust, administration, consulting and actuarial fees | 9,397 | 8,664 | 19,167 | 17,637 |
Wealth management services | 4,045 | 3,101 | 7,743 | 6,233 |
Gain on sales of investment securities | 16,008 | 0 | 63,799 | 0 |
Loss on debt extinguishments | (15,717) | 0 | (63,500) | 0 |
Total noninterest income | 27,098 | 23,696 | 53,207 | 47,164 |
Noninterest expenses: | ||||
Salaries and employee benefits | 30,286 | 26,844 | 60,769 | 54,269 |
Occupancy and equipment | 6,750 | 6,130 | 13,815 | 12,593 |
Data processing and communications | 6,600 | 5,817 | 13,336 | 11,417 |
Amortization of intangible assets | 1,140 | 1,045 | 2,319 | 2,131 |
Legal and professional fees | 1,526 | 1,755 | 3,466 | 3,946 |
Office supplies and postage | 1,518 | 1,382 | 3,013 | 2,850 |
Business development and marketing | 1,804 | 1,876 | 3,283 | 3,048 |
FDIC insurance premiums | 945 | 903 | 2,000 | 1,809 |
Acquisition expenses | 0 | 164 | 0 | 424 |
Other | 3,807 | 3,454 | 6,927 | 6,286 |
Total noninterest expenses | 54,376 | 49,370 | 108,928 | 98,773 |
Income before income taxes | 29,833 | 29,942 | 58,422 | 56,272 |
Income taxes | 8,711 | 8,871 | 17,059 | 16,375 |
Net income | $ 21,122 | $ 21,071 | $ 41,363 | $ 39,897 |
Basic earnings per share (in dollars per share) | $ 0.53 | $ 0.53 | $ 1.03 | $ 1.02 |
Diluted earnings per share (in dollars per share) | $ 0.52 | $ 0.53 | $ 1.02 | $ 1.01 |
BASIS OF PRESENTATION
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
BASIS OF PRESENTATION [Abstract] | |
BASIS OF PRESENTATION | NOTE A: BASIS OF PRESENTATION The interim financial data as of and for the three and six months ended June 30, 2013 is unaudited; however, in the opinion of Community Bank System, Inc. (the “Company”), the interim data includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the interim periods in conformity with generally accepted accounting principles (“GAAP”). The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the full year or any other interim period. |
ACCOUNTING POLICIES (Policies)
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
ACCOUNTING POLICIES [Abstract] | |
Acquired loans | Acquired loans Acquired loans are initially recorded at their acquisition date fair values. The carryover of allowance for loan losses is prohibited as any credit losses in the loans are included in the determination of the fair value of the loans at the acquisition date. Fair values for acquired loans are based on a discounted cash flow methodology that involves assumptions and judgments as to credit risk, prepayment risk, liquidity risk, default rates, loss severity, payment speeds, collateral values and discount rate. For acquired loans that are not deemed impaired at acquisition, credit discounts representing principal losses expected over the life of the loan are a component of the initial fair value. Subsequent to the purchase date, the methods used to estimate the required allowance for loan losses for these loans is similar to originated loans. However, the Company records a provision for loan losses only when the required allowance exceeds any remaining credit discount. The remaining differences between the purchase price and the unpaid principal balance at the date of acquisition are recorded in interest income over the life of the loan. Acquired loans that have evidence of deterioration in credit quality since origination and for which it is probable, at acquisition, that the Company will be unable to collect all contractually required payments are accounted for as impaired loans under ASC 310-30. The excess of cash flows expected at acquisition over the estimated fair value is referred to as the accretable discount and is recognized into interest income over the remaining life of the loans. The difference between contractually required payments at acquisition and the cash flows expected to be collected at acquisition is referred to as the non-accretable discount. The non-accretable discount represents estimated future credit losses expected to be incurred over the life of the loan. Subsequent decreases to the expected cash flows require the Company to evaluate the need for an allowance for loan losses on these loans. Subsequent improvements in expected cash flows result in the reversal of a corresponding amount of the non-accretable discount which the Company then reclassifies as an accretable discount that is recognized into interest income over the remaining life of the loans using the interest method. Acquired loans that met the criteria for non-accrual of interest prior to acquisition may be considered performing upon acquisition, regardless of whether the customer is contractually delinquent, if the Company can reasonably estimate the timing and amount of the expected cash flows on such loans and if the Company expects to fully collect the new carrying value of the loans. As such, the Company may no longer consider the loan to be non-accrual or non-performing and may accrue interest on these loans, including the impact of any accretable discount. For acquired loans that are not deemed impaired at acquisition, purchase discounts representing the principal losses expected over the life of the loan are a component of the initial fair value and amortized over the life of the asset. Subsequent to the purchase date, the methods utilized to estimate the required allowance for loan losses for these loans is similar to originated loans, however, the Company records a provision for loan losses only when the required allowance exceeds any remaining purchase discounts for loans evaluated collectively for impairment. |
Allowance for Loan Losses | Allowance for Loan Losses Management continually evaluates the credit quality of the Company’s loan portfolio, and performs a formal review of the adequacy of the allowance for loan losses on a quarterly basis. The allowance reflects management’s best estimate of probable losses inherent in the loan portfolio. Determination of the allowance is subjective in nature and requires significant estimates. The Company’s allowance methodology consists of two broad components - general and specific loan loss allocations. The general loan loss allocation is composed of two calculations that are computed on five main loan segments: business lending, consumer installment - direct, consumer installment - indirect, home equity and consumer mortgage. The first calculation is quantitative and determines an allowance level based on the latest 36 months of historical net charge-off data for each loan class (commercial loans exclude balances with specific loan loss allocations). The second calculation is qualitative and takes into consideration eight qualitative environmental factors: levels and trends in delinquencies and impaired loans; levels of and trends in charge-offs and recoveries; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards, and other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentrations. A component of the qualitative calculation is the unallocated allowance for loan loss. The qualitative and quantitative calculations are added together to determine the general loan loss allocation. The specific loan loss allocation relates to individual commercial loans that are both greater than $0.5 million and in a nonaccruing status with respect to interest. Specific loan losses are based on discounted estimated cash flows, including any cash flows resulting from the conversion of collateral or collateral shortfalls. The allowance levels computed from the specific and general loan loss allocation methods are combined with unallocated allowances and allowances needed for acquired loans, if any, to derive the total required allowance for loan losses to be reflected on the Consolidated Statement of Condition. Loan losses are charged off against the allowance, while recoveries of amounts previously charged off are credited to the allowance. A provision for loan losses is charged to operations based on management’s periodic evaluation of factors previously mentioned. |
Investment Securities | Investment Securities The Company has classified its investments in debt and equity securities as held-to-maturity or available-for-sale. Held-to-maturity securities are those for which the Company has the positive intent and ability to hold until maturity, and are reported at cost, which is adjusted for amortization of premiums and accretion of discounts. Securities not classified as held-to-maturity are classified as available-for-sale and are reported at fair value with net unrealized gains and losses reflected as a separate component of shareholders' equity, net of applicable income taxes. None of the Company's investment securities have been classified as trading securities at June 30, 2013. Certain equity securities are stated at cost and include restricted stock of the Federal Reserve Bank of New York (“Federal Reserve”) and Federal Home Loan Bank of New York (“FHLB”). Fair values for investment securities are based upon quoted market prices, where available. If quoted market prices are not available, fair values are based upon quoted market prices of comparable instruments, or a discounted cash flow model using market estimates of interest rates and volatility. The Company conducts an assessment of all securities in an unrealized loss position to determine if other-than-temporary impairment (“OTTI”) exists on a quarterly basis. An unrealized loss exists when the current fair value of an individual security is less than its amortized cost basis. The OTTI assessment considers the security structure, recent security collateral performance metrics, if applicable, external credit ratings, failure of the issuer to make scheduled interest or principal payments, judgment about and expectations of future performance, and relevant independent industry research, analysis and forecasts. The severity of the impairment and the length of time the security has been impaired is also considered in the assessment. The assessment of whether an OTTI decline exists is performed on each security, regardless of the classification of the security as available-for-sale or held-to-maturity and involves a high degree of subjectivity and judgment that is based on the information available to management at a point in time. An OTTI loss must be recognized for a debt security in an unrealized loss position if there is intent to sell the security or it is more likely than not the Company will be required to sell the security prior to recovery of its amortized cost basis. In this situation, the amount of loss recognized in income is equal to the difference between the fair value and the amortized cost basis of the security. Even if management does not have the intent, and it is not more likely than not that the Company will be required to sell the securities, an evaluation of the expected cash flows to be received is performed to determine if a credit loss has occurred. For debt securities, a critical component of the evaluation for OTTI is the identification of credit-impaired securities, where the Company does not expect to receive cash flows sufficient to recover the entire amortized cost basis of the security. In the event of a credit loss, only the amount of impairment associated with the credit loss would be recognized in income. The portion of the unrealized loss relating to other factors, such as liquidity conditions in the market or changes in market interest rates, is recorded in accumulated other comprehensive loss. Equity securities are also evaluated to determine whether the unrealized loss is expected to be recoverable based on whether evidence exists to support a realizable value equal to or greater than the amortized cost basis. If it is probable that the amortized cost basis will not be recovered, taking into consideration the estimated recovery period and the ability to hold the equity security until recovery, OTTI is recognized in earnings equal to the difference between the fair value and the amortized cost basis of the security. The specific identification method is used in determining the realized gains and losses on sales of investment securities and OTTI charges. Premiums and discounts on securities are amortized and accreted, respectively, on the interest method basis over the period to maturity or estimated life of the related security. Purchases and sales of securities are recognized on a trade date basis. |
Income Taxes | Income Taxes The Company and its subsidiaries file a consolidated federal income tax return. Provisions for income taxes are based on taxes currently payable or refundable as well as deferred taxes that are based on temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements. Deferred tax assets and liabilities are reported in the financial statements at currently enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are expected to be realized or settled. Benefits from tax positions should be recognized in the financial statements only when it is more likely than not that the tax position will be sustained upon examination by the appropriate taxing authority having full knowledge of all relevant information. A tax position meeting the more-likely-than-not recognition threshold should be measured at the largest amount of benefit for which the likelihood of realization upon ultimate settlement exceeds 50 percent. |
Intangible Assets | Intangible Assets Intangible assets include core deposit intangibles, customer relationship intangibles and goodwill arising from acquisitions. Core deposit intangibles and customer relationship intangibles are amortized on either an accelerated or straight-line basis over periods ranging from 7 to 20 years. The initial and ongoing carrying value of goodwill and other intangible assets is based upon discounted cash flow modeling techniques that require management to make estimates regarding the amount and timing of expected future cash flows. It also requires use of a discount rate that reflects the current return requirements of the market in relation to present risk-free interest rates, required equity market premiums, peer volatility indicators, and company-specific risk indicators. The Company evaluates goodwill for impairment on an annual basis, or more often if events or circumstances indicate there may be impairment. The implied fair value of a reporting unit’s goodwill is compared to its carrying amount and the impairment loss is measured by the excess of the carrying value over fair value. The fair value of each reporting unit is compared to the carrying amount of that reporting unit in order to determine if impairment is indicated. |
Retirement Benefits | Retirement Benefits The Company provides defined benefit pension benefits to eligible employees and post-retirement health and life insurance benefits to certain eligible retirees. The Company also provides deferred compensation and supplemental executive retirement plans for selected current and former employees, officers, and directors. Expense under these plans is charged to current operations and consists of several components of net periodic benefit cost based on various actuarial assumptions regarding future experience under the plans, including discount rate, rate of future compensation increases and expected return on plan assets. |
EARNINGS PER SHARE
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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EARNINGS PER SHARE [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER SHARE | NOTE I: EARNINGS PER SHARE Basic earnings per share are computed based on the weighted-average of the common shares outstanding for the period. Diluted earnings per share are based on the weighted-average of the shares outstanding adjusted for the dilutive effect of restricted stock and the assumed exercise of stock options during the year. The dilutive effect of options is calculated using the treasury stock method of accounting. The treasury stock method determines the number of common shares that would be outstanding if all the dilutive options (those where the average market price is greater than the exercise price) were exercised and the proceeds were used to repurchase common shares in the open market at the average market price for the applicable time period. There were approximately 0.7 million weighted-average anti-dilutive stock options outstanding for the three and six months ended June 30, 2013, compared to approximately 0.6 million weighted-average anti-dilutive stock options outstanding for the three months June 30, 2012 and approximately 0.4 million weighted-average anti-dilutive stock options outstanding for the six months June 30, 2012 that were not included in the computation below. The following is a reconciliation of basic to diluted earnings per share for the three and six months ended June 30, 2013 and 2012.
Stock Repurchase Program At its December 2012 meeting, the Company’s Board of Directors approved a new repurchase program authorizing the repurchase of up to 2,000,000 of its outstanding shares in open market transactions or privately negotiated transactions in accordance with securities laws and regulations, through December 31, 2013. Any repurchased shares will be used for general corporate purposes, including those related to stock plan activities. The timing and extent of repurchases will depend on market conditions and other corporate considerations as determined at the Company’s discretion. There were no open market treasury stock purchases in 2012 or the first six months of 2013. There were approximately 22,000 common shares repurchased during the six months ended June 30, 2013 that were acquired by the Company in connection with satisfaction of tax withholding obligations on vested restricted stock. |
COMMITMENTS, CONTINGENT LIABILITIES AND RESTRICTIONS (Details) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
|
Dec. 31, 2012
|
---|---|---|
Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Face Value Disclosure Off-balance Sheet Risks Face Amount Liability | $ 662,088 | $ 774,346 |
Commitments to Extend Credit [Member]
|
||
Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Face Value Disclosure Off-balance Sheet Risks Face Amount Liability | 638,774 | 750,178 |
Standby Letters of Credit [Member]
|
||
Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Face Value Disclosure Off-balance Sheet Risks Face Amount Liability | $ 23,314 | $ 24,168 |
LOANS (Tables)
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6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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LOANS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Loans Receivable, Net | The balance of these classes are summarized as follows:
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Schedule of Accretable Discount Related to Credit Impaired Acquired Loans | The changes in the accretable discount related to the credit impaired acquired loans are as follows:
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Aged Analysis of the Company's Past Due Loans by Class | The following is an aged analysis of the Company’s past due loans, by class as of June 30, 2013: Legacy Loans (excludes loans acquired after January 1, 2009)
Acquired Loans (includes loans acquired after January 1, 2009)
The following is an aged analysis of the Company’s past due loans by class as of December 31, 2012: Legacy Loans (excludes loans acquired after January 1, 2009)
Acquired Loans (includes loans acquired after January 1, 2009)
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Schedule of Business Lending Loans by Credit Quality Category | The following table shows the amount of business lending loans by credit quality category:
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Schedule of Loans by Credit Quality Indicator | The following table details the balances in all other loan categories at June 30, 2013: Legacy loans (excludes loans acquired after January 1, 2009)
Acquired loans (includes loans acquired after January 1, 2009)
The following table details the balances in all other loan categories at December 31, 2012: Legacy loans (excludes loans acquired after January 1, 2009)
Acquired loans (includes loans acquired after January 1, 2009)
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Summary of Non-business Impaired Loans | A summary of individually evaluated impaired loans as of June 30, 2013 and December 31, 2012 follows:
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Troubled debt restructurings on financing receivables | Information regarding troubled debt restructurings as of June 30, 2013 and December 31, 2012 is as follows:
The following table presents information related to loans modified in a TDR during the three and six months ended June 30, 2013. Of the loans noted in the table below, all but two loans for the three months and six months ended June 30, 2013 were modified due to a Chapter 7 bankruptcy as described previously. The others were a business loan restructured via an extension of term and a consumer mortgage restructured via an extension of term and a rate concession. The financial effects of these restructurings were immaterial.
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Schedule of Allowance for Loan Losses by Class | The following presents by class the activity in the allowance for loan losses:
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INVESTMENT SECURITIES (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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INVESTMENT SECURITIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortized cost and estimated fair value of investment securities | The amortized cost and estimated fair value of investment securities as of June 30, 2013 and December 31, 2012 are as follows:
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Summary of investment securities that have been in a continuous unrealized loss position for less than or greater than twelve months | A summary of investment securities that have been in a continuous unrealized loss position for less than, or greater, than twelve months is as follows: As of June 30, 2013
As of December 31, 2012
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Amortized cost and estimated fair value of debt securities by contractual maturity | The amortized cost and estimated fair value of debt securities at June 30, 2013, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately.
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BENEFIT PLANS (Details) (USD $)
|
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Pension Benefits [Member]
|
||||
Net periodic benefit cost [Abstract] | ||||
Service cost | $ 985,000 | $ 848,000 | $ 1,970,000 | $ 1,696,000 |
Interest cost | 1,028,000 | 1,098,000 | 2,057,000 | 2,197,000 |
Expected return on plan assets | (2,451,000) | (2,299,000) | (4,902,000) | (4,598,000) |
Amortization of unrecognized net loss | 1,008,000 | 922,000 | 2,015,000 | 1,844,000 |
Amortization of prior service cost | 14,000 | (37,000) | 29,000 | (74,000) |
Net periodic benefit cost | 584,000 | 532,000 | 1,169,000 | 1,065,000 |
Estimated future employer contributions in current fiscal year | 10,000,000 | |||
Post-retirement Benefits [Member]
|
||||
Net periodic benefit cost [Abstract] | ||||
Service cost | 0 | 0 | 0 | 0 |
Interest cost | 22,000 | 29,000 | 44,000 | 57,000 |
Expected return on plan assets | 0 | 0 | 0 | 0 |
Amortization of unrecognized net loss | 3,000 | 3,000 | 6,000 | 6,000 |
Amortization of prior service cost | (45,000) | (206,000) | (90,000) | (411,000) |
Net periodic benefit cost | $ (20,000) | $ (174,000) | $ (40,000) | $ (348,000) |
DERIVATIVE INSTRUMENTS (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
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DERIVATIVE INSTRUMENTS [Abstract] | |||||||||||||||||||||||||||||||
Derivative Instruments Fair Value and Balance Sheet Location | The following table presents the Company’s derivative financial instruments, their estimated fair values, and balance sheet location as of June 30, 2013:
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Derivative Instruments and Location of Net Gain or Loss In Statement of Income | The following table presents the Company’s derivative financial instruments and the location of the net gain or loss recognized in the statement of income for the three and six months ended June 30, 2013:
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LOANS, Credit Quality By Past Due Status (Details) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
|
Dec. 31, 2012
|
||||
---|---|---|---|---|---|---|
Aged analysis of the company's loans [Abstract] | ||||||
Total Loans | $ 3,935,998 | $ 3,865,576 | ||||
Legacy Loan [Member]
|
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Aged analysis of the company's loans [Abstract] | ||||||
Past Due 30 - 89 Days | 31,452 | 37,938 | ||||
90 + Days Past Due and Still Accruing | 1,349 | 2,355 | ||||
Nonaccrual | 18,272 | 21,928 | ||||
Total Past Due | 51,073 | 62,221 | ||||
Current | 3,488,345 | 3,356,000 | ||||
Total Loans | 3,539,418 | 3,418,221 | ||||
Acquired Loans [Member]
|
||||||
Aged analysis of the company's loans [Abstract] | ||||||
Past Due 30 - 89 Days | 3,276 | 7,254 | ||||
90 + Days Past Due and Still Accruing | 90 | 393 | ||||
Nonaccrual | 4,725 | 4,432 | ||||
Total Past Due | 8,091 | 12,079 | ||||
Acquired Impaired | 12,108 | [1] | 13,761 | [1] | ||
Current | 376,381 | 421,515 | ||||
Total Loans | 396,580 | 447,355 | ||||
Consumer Mortgage [Member] | Legacy Loan [Member]
|
||||||
Aged analysis of the company's loans [Abstract] | ||||||
Past Due 30 - 89 Days | 13,165 | 16,334 | ||||
90 + Days Past Due and Still Accruing | 940 | 1,553 | ||||
Nonaccrual | 9,715 | 8,866 | ||||
Total Past Due | 23,820 | 26,753 | ||||
Current | 1,411,350 | 1,318,534 | ||||
Total Loans | 1,435,170 | 1,345,287 | ||||
Consumer Mortgage [Member] | Acquired Loans [Member]
|
||||||
Aged analysis of the company's loans [Abstract] | ||||||
Past Due 30 - 89 Days | 1,567 | 1,726 | ||||
90 + Days Past Due and Still Accruing | 54 | 265 | ||||
Nonaccrual | 2,177 | 2,420 | ||||
Total Past Due | 3,798 | 4,411 | ||||
Acquired Impaired | 0 | [1] | 0 | [1] | ||
Current | 88,373 | 98,717 | ||||
Total Loans | 92,171 | 103,128 | ||||
Business Lending [Member] | Legacy Loan [Member]
|
||||||
Aged analysis of the company's loans [Abstract] | ||||||
Past Due 30 - 89 Days | 6,434 | 6,012 | ||||
90 + Days Past Due and Still Accruing | 66 | 167 | ||||
Nonaccrual | 6,420 | 12,010 | ||||
Total Past Due | 12,920 | 18,189 | ||||
Current | 1,003,420 | 984,665 | ||||
Total Loans | 1,016,340 | 1,002,854 | ||||
Business Lending [Member] | Acquired Loans [Member]
|
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Aged analysis of the company's loans [Abstract] | ||||||
Past Due 30 - 89 Days | 978 | 3,665 | ||||
90 + Days Past Due and Still Accruing | 0 | 80 | ||||
Nonaccrual | 2,130 | 1,681 | ||||
Total Past Due | 3,108 | 5,426 | ||||
Acquired Impaired | 12,108 | [1] | 13,761 | [1] | ||
Current | 194,115 | 211,903 | ||||
Total Loans | 209,331 | 231,090 | ||||
Consumer Indirect [Member] | Legacy Loan [Member]
|
||||||
Aged analysis of the company's loans [Abstract] | ||||||
Past Due 30 - 89 Days | 8,161 | 9,743 | ||||
90 + Days Past Due and Still Accruing | 181 | 73 | ||||
Nonaccrual | 0 | 0 | ||||
Total Past Due | 8,342 | 9,816 | ||||
Current | 649,325 | 627,541 | ||||
Total Loans | 657,667 | 637,357 | ||||
Consumer Indirect [Member] | Acquired Loans [Member]
|
||||||
Aged analysis of the company's loans [Abstract] | ||||||
Past Due 30 - 89 Days | 232 | 434 | ||||
90 + Days Past Due and Still Accruing | 0 | 0 | ||||
Nonaccrual | 0 | 0 | ||||
Total Past Due | 232 | 434 | ||||
Acquired Impaired | 0 | [1] | 0 | [1] | ||
Current | 6,025 | 9,727 | ||||
Total Loans | 6,257 | 10,161 | ||||
Consumer Direct [Member] | Legacy Loan [Member]
|
||||||
Aged analysis of the company's loans [Abstract] | ||||||
Past Due 30 - 89 Days | 1,622 | 1,725 | ||||
90 + Days Past Due and Still Accruing | 78 | 71 | ||||
Nonaccrual | 5 | 8 | ||||
Total Past Due | 1,705 | 1,804 | ||||
Current | 158,937 | 154,462 | ||||
Total Loans | 160,642 | 156,266 | ||||
Consumer Direct [Member] | Acquired Loans [Member]
|
||||||
Aged analysis of the company's loans [Abstract] | ||||||
Past Due 30 - 89 Days | 293 | 470 | ||||
90 + Days Past Due and Still Accruing | 0 | 0 | ||||
Nonaccrual | 0 | 0 | ||||
Total Past Due | 293 | 470 | ||||
Acquired Impaired | 0 | [1] | 0 | [1] | ||
Current | 10,792 | 14,738 | ||||
Total Loans | 11,085 | 15,208 | ||||
Home Equity [Member] | Legacy Loan [Member]
|
||||||
Aged analysis of the company's loans [Abstract] | ||||||
Past Due 30 - 89 Days | 2,070 | 4,124 | ||||
90 + Days Past Due and Still Accruing | 84 | 491 | ||||
Nonaccrual | 2,132 | 1,044 | ||||
Total Past Due | 4,286 | 5,659 | ||||
Current | 265,313 | 270,798 | ||||
Total Loans | 269,599 | 276,457 | ||||
Home Equity [Member] | Acquired Loans [Member]
|
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Aged analysis of the company's loans [Abstract] | ||||||
Past Due 30 - 89 Days | 206 | 959 | ||||
90 + Days Past Due and Still Accruing | 36 | 48 | ||||
Nonaccrual | 418 | 331 | ||||
Total Past Due | 660 | 1,338 | ||||
Acquired Impaired | 0 | [1] | 0 | [1] | ||
Current | 77,076 | 86,430 | ||||
Total Loans | $ 77,736 | $ 87,768 | ||||
|
EARNINGS PER SHARE (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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EARNINGS PER SHARE [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of basic to diluted earnings per share | The following is a reconciliation of basic to diluted earnings per share for the three and six months ended June 30, 2013 and 2012.
|
LOANS, Allowance For Loan Losses (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
Dec. 31, 2012
|
|
Impaired loans [Abstract] | |||||
Loans with allowance allocation | $ 1,990 | $ 1,990 | $ 1,611 | ||
Loans without allowance allocation | 1,005 | 1,005 | 7,798 | ||
Carrying balance | 2,995 | 2,995 | 9,409 | ||
Contractual balance | 4,374 | 4,374 | 12,804 | ||
Specifically allocated allowance | 980 | 980 | 800 | ||
Allowance for loan losses [Roll Forward] | |||||
Beginning balance | 42,913 | 41,809 | 42,888 | 42,213 | |
Charge-offs | (2,048) | (3,284) | (4,824) | (6,730) | |
Recoveries | 1,287 | 1,148 | 2,695 | 2,546 | |
Provision | 1,321 | 2,155 | 2,714 | 3,799 | |
Ending balance | 43,473 | 41,828 | 43,473 | 41,828 | |
Consumer Mortgage [Member]
|
|||||
Allowance for loan losses [Roll Forward] | |||||
Beginning balance | 7,292 | 4,885 | 7,070 | 4,651 | |
Charge-offs | (229) | (150) | (600) | (419) | |
Recoveries | 7 | 4 | 13 | 17 | |
Provision | 303 | 1,574 | 890 | 2,064 | |
Ending balance | 7,373 | 6,313 | 7,373 | 6,313 | |
Business Lending [Member]
|
|||||
Allowance for loan losses [Roll Forward] | |||||
Beginning balance | 17,557 | 21,413 | 18,013 | 20,574 | |
Charge-offs | (280) | (1,662) | (1,064) | (3,227) | |
Recoveries | 102 | 178 | 244 | 333 | |
Provision | 904 | (1,458) | 1,090 | 791 | |
Ending balance | 18,283 | 18,471 | 18,283 | 18,471 | |
Consumer Indirect [Member]
|
|||||
Allowance for loan losses [Roll Forward] | |||||
Beginning balance | 9,448 | 7,938 | 9,606 | 8,960 | |
Charge-offs | (997) | (1,134) | (1,888) | (2,173) | |
Recoveries | 913 | 782 | 1,871 | 1,824 | |
Provision | 5 | 1,084 | (220) | 59 | |
Ending balance | 9,369 | 8,670 | 9,369 | 8,670 | |
Consumer Direct [Member]
|
|||||
Allowance for loan losses [Roll Forward] | |||||
Beginning balance | 3,084 | 3,066 | 3,303 | 3,290 | |
Charge-offs | (407) | (273) | (952) | (730) | |
Recoveries | 257 | 182 | 555 | 354 | |
Provision | 120 | 248 | 148 | 309 | |
Ending balance | 3,054 | 3,223 | 3,054 | 3,223 | |
Home Equity [Member]
|
|||||
Allowance for loan losses [Roll Forward] | |||||
Beginning balance | 1,683 | 1,281 | 1,451 | 1,130 | |
Charge-offs | (135) | (65) | (320) | (181) | |
Recoveries | 8 | 2 | 12 | 18 | |
Provision | 118 | 174 | 531 | 425 | |
Ending balance | 1,674 | 1,392 | 1,674 | 1,392 | |
Unallocated [Member]
|
|||||
Allowance for loan losses [Roll Forward] | |||||
Beginning balance | 2,927 | 2,770 | 2,666 | 3,222 | |
Charge-offs | 0 | 0 | 0 | 0 | |
Recoveries | 0 | 0 | 0 | 0 | |
Provision | (182) | 342 | 79 | (110) | |
Ending balance | 2,745 | 3,112 | 2,745 | 3,112 | |
Acquired Impaired [Member]
|
|||||
Allowance for loan losses [Roll Forward] | |||||
Beginning balance | 922 | 456 | 779 | 386 | |
Charge-offs | 0 | 0 | 0 | 0 | |
Recoveries | 0 | 0 | 0 | 0 | |
Provision | 53 | 191 | 196 | 261 | |
Ending balance | $ 975 | $ 647 | $ 975 | $ 647 |
ACQUISITIONS (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
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ACQUISITIONS [Abstract] | |||||||||||||||||||||||||||||||||
Estimated fair value of assets acquired and liabilities assumed | The following table summarizes the estimated fair value of the assets acquired and liabilities assumed during 2012.
|
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Summary of loans acquired | The following is a summary of the loans acquired from HSBC and First Niagara at the date of acquisition:
|
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited) (USD $)
In Thousands, except Share data, unless otherwise specified |
Common Stock [Member]
|
Additional Paid-In Capital [Member]
|
Retained Earnings [Member]
|
Accumulated Other Comprehensive Income (Loss) [Member]
|
Treasury Stock [Member]
|
Total
|
---|---|---|---|---|---|---|
Balance at Dec. 31, 2012 | $ 40,421 | $ 378,413 | $ 447,018 | $ 54,334 | $ (17,408) | $ 902,778 |
Balance (in shares) at Dec. 31, 2012 | 39,625,933 | |||||
Net income | 41,363 | 41,363 | ||||
Other comprehensive income, net of tax | (82,050) | (82,050) | ||||
Cash dividends declared: | ||||||
Common, $0.54 per share | (21,533) | (21,533) | ||||
Common stock issued under employee stock plan, including tax benefits of $666 | 460 | 6,613 | 293 | 7,366 | ||
Common stock issued under employee stock plan, including tax benefits of $666 (in shares) | 473,082 | |||||
Stock-based compensation | 2,107 | 2,107 | ||||
Balance at Jun. 30, 2013 | $ 40,881 | $ 387,133 | $ 466,848 | $ (27,716) | $ (17,115) | $ 850,031 |
Balance (in shares) at Jun. 30, 2013 | 40,099,015 |
ACQUISITIONS
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
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ACQUISITIONS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACQUISITIONS | NOTE B: ACQUISITIONS On September 7, 2012, Community Bank, N.A. (the “Bank”) completed its acquisition of three branches in Western New York from First Niagara Bank, N.A. (“First Niagara”), acquiring approximately $54 million of loans and $101 million of deposits. The assumed deposits consisted primarily of core deposits (checking, savings and money market accounts) and the purchased loans consisted of in-market performing loans, primarily residential real estate loans. Under the terms of the purchase agreement, the Bank paid a blended deposit premium of 3.1%, or approximately $3 million. The effects of the acquired assets and liabilities have been included in the consolidated financial statements since that date. On July 20, 2012, the Bank completed its acquisition of 16 retail branches in Central, Northern and Western New York from HSBC Bank USA, N.A. (“HSBC”), acquiring approximately $106 million in loans and $697 million of deposits. The assumed deposits consisted primarily of core deposits (checking, savings and money markets accounts) and the purchased loans consisted of in-market performing loans, primarily residential real estate loans. Under the terms of the purchase agreement, the Bank paid First Niagara (who acquired HSBC’s Upstate New York banking business and assigned its right to purchase the 16 branches to the Bank) a blended deposit premium of 3.4%, or approximately $24 million. The effects of the acquired assets and liabilities have been included in the consolidated financial statements since that date. The assets and liabilities assumed in the acquisitions were recorded at their estimated fair values based on management's best estimates using information available at the dates of the acquisition, and are subject to adjustment based on updated information not available at the time of acquisition. The following table summarizes the estimated fair value of the assets acquired and liabilities assumed during 2012.
The following is a summary of the loans acquired from HSBC and First Niagara at the date of acquisition:
The fair value of checking, savings and money market deposit accounts acquired were assumed to approximate the carrying value as these accounts have no stated maturity and are payable on demand. Certificate of deposit accounts were valued as the present value of the certificates’ expected contractual payments discounted at market rates for similar certificates. The core deposit intangible related to the HSBC acquisition is being amortized using an accelerated method over the estimated useful life of eight years. The goodwill associated with the First Niagara and HSBC acquisitions, which is not amortized for book purposes, was assigned to the Banking segment. The goodwill arising from the HSBC branch and First Niagara branch acquisitions is deductible for tax purposes. Direct costs related to the acquisitions were expensed as incurred. Merger and acquisition integration-related expenses amount to $0.2 million and $0.4 million in the three and six months ended June 30, 2012, respectively, and have been separately stated in the Consolidated Statements of Income. Supplemental pro forma financial information related to the HSBC and First Niagara acquisitions has not been provided as it would be impracticable to do so. Historical financial information regarding the acquired branches is not accessible and thus the amounts would require estimates so significant as to render the disclosure irrelevant. |
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Parenthetical) (USD $)
In Thousands, unless otherwise specified |
6 Months Ended | |
---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Financing activities: | ||
Payment made on borrowings | $ 565,142 | $ 110 |
LOANS, Amount of Business Lending Loans by Credit Quality Category (Details) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
|
Dec. 31, 2012
|
---|---|---|
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | $ 3,935,998 | $ 3,865,576 |
Business Lending [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 1,225,671 | 1,233,944 |
Legacy Loan [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 3,539,418 | 3,418,221 |
Legacy Loan [Member] | Business Lending [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 1,016,340 | 1,002,854 |
Legacy Loan [Member] | All Other Loan [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 2,523,078 | 2,415,367 |
Acquired Loans [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 396,580 | 447,355 |
Acquired Loans [Member] | Business Lending [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 209,331 | 231,090 |
Acquired Loans [Member] | All Other Loan [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 187,249 | 216,265 |
Pass [Member] | Business Lending [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 952,608 | 963,338 |
Pass [Member] | Legacy Loan [Member] | Business Lending [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 825,147 | 818,469 |
Pass [Member] | Acquired Loans [Member] | Business Lending [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 127,461 | 144,869 |
Special Mention [Member] | Business Lending [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 139,527 | 125,067 |
Special Mention [Member] | Legacy Loan [Member] | Business Lending [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 108,281 | 92,739 |
Special Mention [Member] | Acquired Loans [Member] | Business Lending [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 31,246 | 32,328 |
Classified [Member] | Business Lending [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 120,141 | 130,167 |
Classified [Member] | Legacy Loan [Member] | Business Lending [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 81,625 | 90,035 |
Classified [Member] | Acquired Loans [Member] | Business Lending [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 38,516 | 40,132 |
Doubtful [Member] | Business Lending [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 1,287 | 1,611 |
Doubtful [Member] | Legacy Loan [Member] | Business Lending [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 1,287 | 1,611 |
Doubtful [Member] | Acquired Loans [Member] | Business Lending [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 0 | 0 |
Acquired Impaired [Member] | Business Lending [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 12,108 | 13,761 |
Acquired Impaired [Member] | Legacy Loan [Member] | Business Lending [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 0 | 0 |
Acquired Impaired [Member] | Acquired Loans [Member] | Business Lending [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 12,108 | 13,761 |
Performing [Member] | Legacy Loan [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 2,509,943 | 2,403,261 |
Performing [Member] | Acquired Loans [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 184,564 | 213,201 |
Nonperforming [Member] | Legacy Loan [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 13,135 | 12,106 |
Nonperforming [Member] | Acquired Loans [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 2,685 | 3,064 |
Consumer Mortgage [Member] | Legacy Loan [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 1,435,170 | 1,345,287 |
Consumer Mortgage [Member] | Acquired Loans [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 92,171 | 103,128 |
Consumer Mortgage [Member] | Performing [Member] | Legacy Loan [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 1,424,515 | 1,334,868 |
Consumer Mortgage [Member] | Performing [Member] | Acquired Loans [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 89,940 | 100,443 |
Consumer Mortgage [Member] | Nonperforming [Member] | Legacy Loan [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 10,655 | 10,419 |
Consumer Mortgage [Member] | Nonperforming [Member] | Acquired Loans [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 2,231 | 2,685 |
Consumer Indirect [Member] | Legacy Loan [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 657,667 | 637,357 |
Consumer Indirect [Member] | Acquired Loans [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 6,257 | 10,161 |
Consumer Indirect [Member] | Performing [Member] | Legacy Loan [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 657,486 | 637,284 |
Consumer Indirect [Member] | Performing [Member] | Acquired Loans [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 6,257 | 10,161 |
Consumer Indirect [Member] | Nonperforming [Member] | Legacy Loan [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 181 | 73 |
Consumer Indirect [Member] | Nonperforming [Member] | Acquired Loans [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 0 | 0 |
Consumer Direct [Member] | Legacy Loan [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 160,642 | 156,266 |
Consumer Direct [Member] | Acquired Loans [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 11,085 | 15,208 |
Consumer Direct [Member] | Performing [Member] | Legacy Loan [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 160,559 | 156,187 |
Consumer Direct [Member] | Performing [Member] | Acquired Loans [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 11,085 | 15,208 |
Consumer Direct [Member] | Nonperforming [Member] | Legacy Loan [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 83 | 79 |
Consumer Direct [Member] | Nonperforming [Member] | Acquired Loans [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 0 | 0 |
Home Equity [Member] | Legacy Loan [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 269,599 | 276,457 |
Home Equity [Member] | Acquired Loans [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 77,736 | 87,768 |
Home Equity [Member] | Performing [Member] | Legacy Loan [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 267,383 | 274,922 |
Home Equity [Member] | Performing [Member] | Acquired Loans [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 77,282 | 87,389 |
Home Equity [Member] | Nonperforming [Member] | Legacy Loan [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 2,216 | 1,535 |
Home Equity [Member] | Nonperforming [Member] | Acquired Loans [Member]
|
||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | $ 454 | $ 379 |
GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gross carrying amount and accumulated amortization of identifiable intangible assets | The gross carrying amount and accumulated amortization for each type of identifiable intangible asset are as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated aggregate amortization expense | The estimated aggregate amortization expense for each of the five succeeding fiscal years ended December 31 is as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of goodwill | Shown below are the components of the Company’s goodwill at June 30, 2013:
|
COMMITMENTS, CONTINGENT LIABILITIES AND RESTRICTIONS (Tables)
|
6 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
|||||||||||||
COMMITMENTS, CONTINGENT LIABILITIES AND RESTRICTIONS [Abstract] | |||||||||||||
Off-Balance-Sheet Financial instruments contract amount | The contract amount of commitments and contingencies are as follows:
|
ACCOUNTING POLICIES (Details) (USD $)
In Millions, unless otherwise specified |
12 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2013
|
Dec. 31, 2012
Core Deposits [Member]
|
Jun. 30, 2013
Core Deposits [Member]
Minimum [Member]
|
Jun. 30, 2013
Core Deposits [Member]
Maximum [Member]
|
Jun. 30, 2013
Customer Relationships [Member]
Minimum [Member]
|
Jun. 30, 2013
Customer Relationships [Member]
Maximum [Member]
|
|
Allowance for Loan Losses [Abstract] | ||||||
Threshold amount for specific loan losses of individual commercial loans | $ 0.5 | |||||
Income Taxes [Abstract] | ||||||
Threshold percentage for realization (in hundredths) | 50.00% | |||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Intangible asset useful life (amortization period) | 8 years | 7 years | 20 years | 7 years | 20 years |
SUBSEQUENT EVENT (Details) (USD $)
In Millions, unless otherwise specified |
Jul. 20, 2012
HSBC Branch Agreement [Member]
Branch
|
Sep. 07, 2012
First Niagara Branch Agreement [Member]
Branch
|
Jul. 31, 2013
Purchase and Assumption Agreement [Member]
Bank of America Agreement [Member]
Branch
|
---|---|---|---|
Subsequent Event [Line Items] | |||
Number of new branch locations included in acquisition or purchase agreement | 16 | 3 | 8 |
Deposits Acquired | $ 697 | $ 101 | $ 369 |
Blended Deposit Premium | 3.40% | 3.10% | 2.40% |
Loans Acquired | $ 106 | $ 54 | $ 1 |