LOANS (Tables)

9 Months Ended

Sep. 30, 2020

Loans and Leases Receivable Disclosure [Line Items]

Loans Receivable, Net

The segments of the Company’s loan portfolio are summarized as follows:

	September 30,		December 31,
(000's omitted)	2020		2019
Business lending	$	3,433,565	$	2,775,876
Consumer mortgage		2,410,249		2,430,902
Consumer indirect		1,039,925		1,113,062
Consumer direct		161,639		184,378
Home equity		413,265		386,325
Gross loans, including deferred origination costs		7,458,643		6,890,543
Allowance for credit losses		(64,962)		(49,911)
Loans, net of allowance for credit losses	$	7,393,681	$	6,840,632

Aged Analysis of Past Due Loans by Segment

The following table presents the aging of the amortized cost basis of the Company’s past due loans, including purchased credit deteriorated (“PCD”) loans, by segment as of September 30, 2020:

	Past Due		90+ Days Past
	30 – 89		Due and				Total
(000’s omitted)	Days		Still Accruing		Nonaccrual		Past Due		Current		Total Loans
Business lending	$	3,151	$	39	$	11,750	$	14,940	$	3,418,625	$	3,433,565
Consumer mortgage		11,449		3,182		14,821		29,452		2,380,797		2,410,249
Consumer indirect		8,711		12		1		8,724		1,031,201		1,039,925
Consumer direct		1,060		34		3		1,097		160,542		161,639
Home equity		2,179		220		2,181		4,580		408,685		413,265
Total	$	26,550	$	3,487	$	28,756	$	58,793	$	7,399,850	$	7,458,643

The following is an aged analysis of the Company’s past due loans by segment as of December 31, 2019:

Legacy Loans (excludes loans acquired after January 1, 2009)

	Past Due		90+ Days Past
	30 – 89		Due and				Total
(000’s omitted)	Days		Still Accruing		Nonaccrual		Past Due		Current		Total Loans
Business lending	$	3,936	$	126	$	3,840	$	7,902	$	1,848,683	$	1,856,585
Consumer mortgage		10,990		2,052		10,131		23,173		1,973,543		1,996,716
Consumer indirect		12,673		125		0		12,798		1,094,510		1,107,308
Consumer direct		1,455		76		0		1,531		174,445		175,976
Home equity		1,508		328		1,444		3,280		310,727		314,007
Total	$	30,562	$	2,707	$	15,415	$	48,684	$	5,401,908	$	5,450,592

Acquired Loans (includes loans acquired after January 1, 2009)

	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
Business lending	$	8,518	$	2,173	$	570	$	11,261	$	11,797	$	896,233	$	919,291
Consumer mortgage		890		277		2,386		3,553		0		430,633		434,186
Consumer indirect		79		31		0		110		0		5,644		5,754
Consumer direct		59		0		52		111		0		8,291		8,402
Home equity		744		238		412		1,394		0		70,924		72,318
Total	$	10,290	$	2,719	$	3,420	$	16,429	$	11,797	$	1,411,725	$	1,439,951

(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.

Impaired business lending loans

All loan classes are collectively evaluated for impairment except business lending. A summary of individually evaluated impaired business lending loans as of September 30, 2020 and December 31, 2019 follows:

	September 30,		December 31,
(000’s omitted)	2020		2019
Loans with allowance allocation	$	6,842	$	0
Loans without allowance allocation		1,414		1,414
Carrying balance		8,256		1,414
Contractual balance		10,558		2,944
Specifically allocated allowance		882		0

Troubled Debt Restructurings on Financing Receivables

Information regarding TDRs as of September 30, 2020 and December 31, 2019 is as follows:

	September 30, 2020									December 31, 2019
(000’s omitted)	Nonaccrual			Accruing			Total			Nonaccrual			Accruing			Total
	#	Amount		#	Amount		#	Amount		#	Amount		#	Amount		#	Amount
Business lending	8	$	602	3	$	195	11	$	797	8	$	681	3	$	201	11	$	882
Consumer mortgage	57		2,478	47		2,330	104		4,808	59		2,638	47		1,892	106		4,530
Consumer indirect	0		0	85		935	85		935	0		0	84		941	84		941
Consumer direct	0		0	24		94	24		94	0		0	23		101	23		101
Home equity	11		277	13		272	24		549	13		290	11		238	24		528
Total	76	$	3,357	172	$	3,826	248	$	7,183	80	$	3,609	168	$	3,373	248	$	6,982

The following table presents information related to loans modified in a TDR during the three months and nine months ended September 30, 2020 and 2019. Of the loans noted in the table below, all consumer mortgage loans for the three months and nine months ended September 30, 2020 and 2019 were modified due to a Chapter 7 bankruptcy as described previously. The financial effects of these restructurings were immaterial.

	Three Months Ended			Three Months Ended
	September 30, 2020			September 30, 2019
	Number of	Outstanding		Number of	Outstanding
(000’s omitted)	loans modified	Balance		loans modified	Balance
Business lending	0	$	0	1	$	415
Consumer mortgage	8		646	8		464
Consumer indirect	14		131	10		116
Consumer direct	1		2	2		25
Home equity	2		56	0		0
Total	25	$	835	21	$	1,020

	Nine Months Ended			Nine Months Ended
	September 30, 2020			September 30, 2019
	Number of	Outstanding		Number of	Outstanding
(000’s omitted)	loans modified	Balance		loans modified	Balance
Business lending	0	$	0	3	$	660
Consumer mortgage	17		1,378	19		1,271
Consumer indirect	25		261	22		206
Consumer direct	2		12	5		35
Home equity	2		56	4		72
Total	46	$	1,707	53	$	2,244

Allowance for Credit Losses by Class

The following presents by segment the activity in the allowance for credit losses:

	Three Months Ended September 30, 2020
	Beginning		Charge-						Ending
(000’s omitted)	balance		offs		Recoveries		Provision		balance
Business lending	$	24,204	$	(736)	$	67	$	3,539	$	27,074
Consumer mortgage		13,088		(248)		23		(599)		12,264
Consumer indirect		15,866		(1,281)		1,111		(963)		14,733
Consumer direct		4,028		(340)		225		(120)		3,793
Home equity		2,690		(24)		5		(124)		2,547
Unallocated		1,000		0		0		4		1,004
Purchased credit deteriorated		3,561		(91)		32		45		3,547
Allowance for credit losses		64,437		(2,720)		1,463		1,782		64,962
Liabilities for off-balance-sheet credit exposures		1,452		0		0		163		1,615
Total allowance for credit losses and liabilities for off-balance-sheet credit exposures	$	65,889	$	(2,720)	$	1,463	$	1,945	$	66,577

	Three Months Ended September 30, 2019
	Business		Consumer		Consumer		Consumer		Home				Acquired
(000’s omitted)	Lending		Mortgage		Indirect		Direct		Equity		Unallocated		Impaired		Total
Beginning balance	$	17,769	$	10,763	$	14,345	$	3,184	$	2,103	$	991	$	155	$	49,310
Charge-offs		(305)		(200)		(2,224)		(456)		(45)		0		0		(3,230)
Recoveries		290		8		1,095		167		32		0		0		1,592
Provision		301		(94)		1,221		383		(8)		(53)		1		1,751
Ending balance	$	18,055	$	10,477	$	14,437	$	3,278	$	2,082	$	938	$	156	$	49,423

	Nine Months Ended September 30, 2020
	Beginning				Beginning
	balance,				balance,
	prior to the				after
	adoption of		Impact of		adoption of						Steuben				Ending
(000’s omitted)	ASC 326		ASC 326		ASC 326		Charge-offs		Recoveries		acquisition		Provision		balance
Business lending	$	19,426	$	288	$	19,714	$	(919)	$	289	$	2,483	$	5,507	$	27,074
Consumer mortgage		10,269		(1,051)		9,218		(668)		67		146		3,501		12,264
Consumer indirect		13,712		(997)		12,715		(4,791)		3,107		183		3,519		14,733
Consumer direct		3,255		(643)		2,612		(1,214)		578		87		1,730		3,793
Home equity		2,129		808		2,937		(178)		23		235		(470)		2,547
Unallocated		957		43		1,000		0		0		0		4		1,004
Purchased credit deteriorated		0		3,072		3,072		(91)		80		528		(42)		3,547
Purchased credit impaired		163		(163)		0		0		0		0		0		0
Allowance for credit losses		49,911		1,357		51,268		(7,861)		4,144		3,662		13,749		64,962
Liabilities for off-balance-sheet credit exposures		0		1,185		1,185		0		0		67		363		1,615
Total allowance for credit losses and liabilities for off-balance-sheet credit exposures	$	49,911	$	2,542	$	52,453	$	(7,861)	$	4,144	$	3,729	$	14,112	$	66,577

	Nine Months Ended September 30, 2019
	Business		Consumer		Consumer		Consumer		Home				Acquired
(000’s omitted)	Lending		Mortgage		Indirect		Direct		Equity		Unallocated		Impaired		Total
Beginning balance	$	18,522	$	10,124	$	14,366	$	3,095	$	2,144	$	1,000	$	33	$	49,284
Charge-offs		(1,774)		(1,040)		(5,529)		(1,436)		(223)		0		0		(10,002)
Recoveries		593		44		3,296		567		68		0		0		4,568
Provision		714		1,349		2,304		1,052		93		(62)		123		5,573
Ending balance	$	18,055	$	10,477	$	14,437	$	3,278	$	2,082	$	938	$	156	$	49,423

Carrying Amounts of Loans Purchased and Sold

The following table presents the carrying amounts of loans purchased and sold during the nine months ended September 30, 2020 by portfolio segment:

	Business		Consumer		Consumer		Consumer		Home
(000’s omitted)	lending		mortgage		indirect		direct		equity		Total
Purchases	$	253,368	$	26,721	$	13,926	$	5,994	$	39,554	$	339,563
Sales		0		37,409		0		0		0		37,409

Business Lending [Member]

Loans and Leases Receivable Disclosure [Line Items]

Loans by Credit Quality Indicator

The following tables show the amount of business lending loans by credit quality category at September 30, 2020 and December 31, 2019:

													Revolving
													Loans
(000’s omitted)	Term Loans Amortized Cost Basis by Origination Year												Amortized
September 30, 2020	2020		2019		2018		2017		2016		Prior		Cost Basis		Total
Business lending:
Risk rating
Pass	$	783,726	$	351,036	$	337,662	$	243,816	$	246,551	$	576,220	$	483,163	$	3,022,174
Special mention		14,008		39,130		20,714		19,157		29,987		65,627		53,293		241,916
Classified		5,942		2,852		28,228		14,084		14,363		61,121		41,996		168,586
Doubtful		0		0		0		0		0		0		889		889
Total business lending	$	803,676	$	393,018	$	386,604	$	277,057	$	290,901	$	702,968	$	579,341	$	3,433,565

	December 31, 2019
(000’s omitted)	Legacy		Acquired		Total
Pass	$	1,655,280	$	832,693	$	2,487,973
Special mention		98,953		45,324		144,277
Classified		102,352		29,477		131,829
Doubtful		0		0		0
Acquired impaired		0		11,797		11,797
Total	$	1,856,585	$	919,291	$	2,775,876

All Other Loans [Member]

Loans and Leases Receivable Disclosure [Line Items]

Loans by Credit Quality Indicator

The following table details the balances in all other loan categories at September 30, 2020:

													Revolving
													Loans
(000’s omitted)	Term Loans Amortized Cost Basis by Origination Year												Amortized
September 30, 2020	2020		2019		2018		2017		2016		Prior		Cost Basis		Total
Consumer mortgage:
FICO AB
Performing	$	182,675	$	237,891	$	176,837	$	175,605	$	170,844	$	664,129	$	582	$	1,608,563
Nonperforming		0		0		329		444		311		3,556		0		4,640
Total FICO AB		182,675		237,891		177,166		176,049		171,155		667,685		582		1,613,203
FICO CDE
Performing		75,419		106,072		84,280		79,292		87,578		337,097		13,945		783,683
Nonperforming		0		647		482		813		1,530		9,891		0		13,363
Total FICO CDE		75,419		106,719		84,762		80,105		89,108		346,988		13,945		797,046
Total consumer mortgage	$	258,094	$	344,610	$	261,928	$	256,154	$	260,263	$	1,014,673	$	14,527	$	2,410,249
Consumer indirect:
Performing	$	227,697	$	338,279	$	230,246	$	100,529	$	73,331	$	69,830	$	0	$	1,039,912
Nonperforming		0		5		0		4		1		3		0		13
Total consumer indirect	$	227,697	$	338,284	$	230,246	$	100,533	$	73,332	$	69,833		0	$	1,039,925
Consumer direct:
Performing	$	42,905	$	53,421	$	32,359	$	14,773	$	6,707	$	4,722	$	6,715	$	161,602
Nonperforming		0		4		9		0		24		0		0		37
Total consumer direct	$	42,905	$	53,425	$	32,368	$	14,773	$	6,731	$	4,722	$	6,715	$	161,639
Home equity:
Performing	$	40,760	$	51,240	$	29,904	$	25,286	$	19,964	$	39,429	$	204,281	$	410,864
Nonperforming		0		0		82		110		212		481		1,516		2,401
Total home equity	$	40,760	$	51,240	$	29,986	$	25,396	$	20,176	$	39,910	$	205,797	$	413,265

The following table details the balances in all other loan categories at December 31, 2019:

Legacy Loans (excludes loans acquired after January 1, 2009)

	Consumer		Consumer		Consumer		Home
(000’s omitted)	Mortgage		Indirect		Direct		Equity		Total
Performing	$	1,984,533	$	1,107,183	$	175,900	$	312,235	$	3,579,851
Nonperforming		12,183		125		76		1,772		14,156
Total	$	1,996,716	$	1,107,308	$	175,976	$	314,007	$	3,594,007

Acquired Loans (includes loans acquired after January 1, 2009)

	Consumer		Consumer		Consumer		Home
(000’s omitted)	Mortgage		Indirect		Direct		Equity		Total
Performing	$	431,523	$	5,723	$	8,350	$	71,668	$	517,264
Nonperforming		2,663		31		52		650		3,396
Total	$	434,186	$	5,754	$	8,402	$	72,318	$	520,660