FAIR VALUE (Tables)

6 Months Ended

Jun. 30, 2015

Summary of Fair Value Measured on a Recurring Basis

The following tables set forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis. There were no transfers between any of the levels for the periods presented.

	June 30, 2015
(000's omitted)	Level 1		Level 2			Level 3		Total Fair Value
Available-for-sale investment securities:
U.S. Treasury and agency securities	$	1,893,445	$	0		$	0	$	1,893,445
Obligations of state and political subdivisions		0		662,764			0		662,764
Government agency mortgage-backed securities		0		218,755			0		218,755
Corporate debt securities		0		26,817			0		26,817
Government agency collateralized mortgage obligations		0		15,655			0		15,655
Marketable equity securities		425		0			0		425
Total available-for-sale investment securities		1,893,870		923,991			0		2,817,861
Mortgage loans held for sale		0		1,031			0		1,031
Commitments to originate real estate loans for sale		0		0			195		195
Forward sales commitments		0		(81	)		0		(81	)
Total	$	1,893,870	$	924,941		$	195	$	2,819,006

	December 31, 2014
(000's omitted)	Level 1		Level 2			Level 3		Total Fair Value
Available-for-sale investment securities:
U.S. Treasury and agency securities	$	1,496,667	$	21,066		$	0	$	1,517,733
Obligations of state and political subdivisions		0		671,903			0		671,903
Government agency mortgage-backed securities		0		237,728			0		237,728
Corporate debt securities		0		27,091			0		27,091
Government agency collateralized mortgage obligations		0		18,025			0		18,025
Marketable equity securities		445		0			0		445
Total available-for-sale investment securities		1,497,112		975,813			0		2,472,925
Mortgage loans held for sale		0		1,042			0		1,042
Commitments to originate real estate loans for sale		0		0			185		185
Forward sales commitments		0		(43	)		0		(43	)
Total	$	1,497,112	$	976,812		$	185	$	2,474,109

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

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
(000's omitted)	Commitments to Originate Real Estate Loans for Sale			Commitments to Originate Real Estate Loans for Sale			Commitments to Originate Real Estate Loans for Sale			Commitments to Originate Real Estate Loans for Sale
Beginning balance	$	152		$	67		$	185		$	44
Total losses included in earnings⁽¹⁾		(152	)		(67	)		(337	)		(111	)
Commitments to originate real estate loans held for sale, net		195			142			347			209
Ending balance	$	195		$	142		$	195		$	142

⁽¹⁾ Amounts included in earnings associated with the commitments to originate real estate loans for sale are reported as a component of other banking services in the Consolidated Statement of Income.

Assets and Liabilities Measured on a Non-Recurring Basis

Assets and liabilities measured on a non-recurring basis:

	June 30, 2015								December 31, 2014
(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	$	506	$	506	$	0	$	0	$	0	$	0
Other real estate owned		0		0		2,324		2,324		0		0		1,855		1,855
Mortgage servicing rights		0		0		485		485		0		0		0		0
Total	$	0	$	0	$	3,315	$	3,315	$	0	$	0	$	1,855	$	1,855

Significant Unobservable Inputs, Fair Value Valuation Techniques

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

(000's omitted)	Fair Value at June 30, 2015		Valuation Technique	Significant Unobservable Inputs	Significant Unobservable Input Range (Weighted Average)
Impaired loans	$	506	Fair Value of Collateral	Estimated cost of disposal/market adjustment		10.0% - 32.0% (28.4	%)
Other real estate owned		2,324	Fair Value of Collateral	Estimated cost of disposal/market adjustment		7.1% - 48.5% (23.7	%)
Commitments to originate real estate loans for sale		195	Discounted cash flow	Embedded servicing value		1	%
Mortgage servicing rights		485	Discounted cash flow	Weighted average constant prepayment rate		14.6	%
				Weighted average discount rate		3.58	%
				Adequate compensation		$7/loan

The significant unobservable inputs used in the determination of fair value of assets classified as Level 3 on a recurring or non-recurring basis as of December 31, 2014 are as follows:

(000's omitted)	Fair Value at December 31, 2014		Valuation Technique	Significant Unobservable Inputs	Significant nobservable Input Range (Weighted Average)
Other real estate owned	$	1,855	Fair value of collateral	Estimated cost of disposal/market adjustment		10.0% - 77.5% (30.6	%)
Commitments to originate real estate loans for sale		185	Discounted cash flow	Embedded servicing value		1	%

Carrying Amounts and Estimated Fair Values of Other Financial Instruments

The carrying amounts and estimated fair values of the Company’s other financial instruments that are not accounted for at fair value at June 30, 2015 and December 31, 2014 are as follows:

	June 30, 2015				December 31, 2014
(000's omitted)	Carrying Value		Fair Value		Carrying Value		Fair Value
Financial assets:
Net loans	$	4,218,321	$	4,295,518	$	4,190,865	$	4,251,565
Financial liabilities:
Deposits		6,086,820		6,085,968		5,935,264		5,935,690
Borrowings		566,200		566,200		338,000		338,000
Subordinated debt held by unconsolidated subsidiary trusts		102,134		92,484		102,122		85,189