FAIR VALUE (Tables)

9 Months Ended

Sep. 30, 2020

FAIR VALUE

Fair Value Measured on a Recurring Basis

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

	September 30, 2020
(000's omitted)	Level 1		Level 2		Level 3		Total Fair Value
Available-for-sale investment securities:
U.S. Treasury and agency securities	$	1,982,893	$	166,277	$	0	$	2,149,170
Obligations of state and political subdivisions		0		493,496		0		493,496
Government agency mortgage-backed securities		0		523,974		0		523,974
Corporate debt securities		0		4,602		0		4,602
Government agency collateralized mortgage obligations		0		51,480		0		51,480
Total available-for-sale investment securities		1,982,893		1,239,829		0		3,222,722
Equity securities		423		0		0		423
Mortgage loans held for sale		0		8,151		0		8,151
Commitments to originate real estate loans for sale		0		0		2,684		2,684
Forward sales commitments		0		510		0		510
Interest rate swap agreements asset		0		1,756		0		1,756
Interest rate swap agreements liability		0		(1,194)		0		(1,194)
Total	$	1,983,316	$	1,249,052	$	2,684	$	3,235,052

	December 31, 2019
(000's omitted)	Level 1		Level 2		Level 3		Total Fair Value
Available-for-sale investment securities:
U.S. Treasury and agency securities	$	1,878,705	$	165,054	$	0	$	2,043,759
Obligations of state and political subdivisions		0		512,208		0		512,208
Government agency mortgage-backed securities		0		432,862		0		432,862
Corporate debt securities		0		2,528		0		2,528
Government agency collateralized mortgage obligations		0		53,071		0		53,071
Total available-for-sale investment securities		1,878,705		1,165,723		0		3,044,428
Equity securities		451		0		0		451
Interest rate swap agreements asset		0		851		0		851
Interest rate swap agreements liability		0		(586)		0		(586)
Total	$	1,879,156	$	1,165,988		0	$	3,045,144

Assets and Liabilities Measured on a Non-Recurring Basis

The fair value information of assets and liabilities measured on a non-recurring basis presented below is not as of the period-end, but rather as of the date the fair value adjustment was recorded closest to the date presented.

	September 30, 2020								December 31, 2019
(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	$	6,808	$	6,808	$	0	$	0	$	848	$	848
Other real estate owned		0		0		1,209		1,209		0		0		1,270		1,270
Mortgage servicing rights		0		0		460		460		0		0		56		56
Total	$	0	$	0	$	8,477	$	8,477	$	0	$	0	$	2,174	$	2,174

Significant Unobservable Inputs, Fair Value Valuation Techniques

The Company determines fair values based on quoted market values, where available, estimates of present values, or other valuation techniques. Those techniques are significantly affected by the assumptions used, including, but not limited to, the discount rate and estimates of future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, may not be realized in immediate settlement of the instrument. 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:

					Significant
					Unobservable Input
	Fair Value at				Range
(000's omitted)	September 30, 2020		Valuation Technique	Significant Unobservable Inputs	(Weighted Average)
Impaired loans	$	6,808	Fair value of collateral	Estimated cost of disposal/market adjustment		9.0% - 78.7% (58.8%)
Other real estate owned		1,209	Fair value of collateral	Estimated cost of disposal/market adjustment		15.2% - 53.5% (31.3%)
Commitments to originate real estate loans for sale		2,684	Discounted cash flow	Embedded servicing value		1.0	%
Mortgage servicing rights		460	Discounted cash flow	Weighted average constant prepayment rate		13.8% - 14.7% (14.6%)
				Weighted average discount rate		1.22% - 1.98% (1.92%)
				Adequate compensation	$	7/loan

					Significant
					Unobservable Input
	Fair Value at				Range
(000's omitted)	December 31, 2019		Valuation Technique	Significant Unobservable Inputs	(Weighted Average)
Impaired loans	$	848	Fair value of collateral	Estimated cost of disposal/market adjustment		9.0% - 35.0% (27.9%)
Other real estate owned		1,270	Fair value of collateral	Estimated cost of disposal/market adjustment		9.0% - 85.7% (37.1%)
Mortgage servicing rights		56	Discounted cash flow	Weighted average constant prepayment rate		52.8	%
				Weighted average discount rate		3.00	%
				Adequate compensation	$	7/loan

Carrying Amounts and Estimated Fair Values of Other Financial Instruments

Certain financial instruments and all nonfinancial instruments are excluded from fair value disclosure requirements. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Company. The carrying amounts and estimated fair values of the Company’s other financial instruments that are not accounted for at fair value at September 30, 2020 and December 31, 2019 are as follows:

	September 30, 2020				December 31, 2019
	Carrying		Fair		Carrying		Fair
(000's omitted)	Value		Value		Value		Value
Financial assets:
Net loans	$	7,393,681	$	7,710,461	$	6,840,632	$	7,028,663
Financial liabilities:
Deposits		11,120,590		11,135,779		8,994,967		8,997,551
Overnight Federal Home Loan Bank borrowings		0		0		8,300		8,300
Securities sold under agreement to repurchase, short-term		280,767		280,767		241,708		241,708
Other Federal Home Loan Bank borrowings		7,681		7,810		3,750		3,755
Subordinated notes payable		13,735		13,735		13,795		13,795
Subordinated debt held by unconsolidated subsidiary trusts		77,320		77,320		77,320		77,320