ACQUISITIONS (Tables)

6 Months Ended

Jun. 30, 2017

Estimated Fair Value of Assets Acquired and Liabilities Assumed

The following table summarizes the estimated fair value of the assets acquired and liabilities assumed after considering the measurement period adjustments described above:

	2017														2016
(000s omitted)	BAS		NRS			Dryfoos			Merchants			Total			WJL
Consideration paid :
Cash	$	1,200	$	70,073		$	3,024		$	82,898		$	157,195		$	575
Community Bank System, Inc. common stock		0		78,483			0			262,254			340,737			0
Total net consideration paid		1,200		148,556			3,024			345,152			497,932			575
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash and cash equivalents		0		11,063			0			40,730			51,793			0
Investment securities		0		20,294			0			370,480			390,774			0
Loans		0		0			0			1,489,273			1,489,273			0
Premises and equipment		0		411			27			12,973			13,411			0
Accrued interest receivable		0		72			0			4,773			4,845			0
Other assets		0		8,088			272			46,363			54,723			0
Core deposit intangibles		0		0			0			23,214			23,214			0
Other intangibles		1,200		60,200			1,657			2,857			65,914			288
Deposits		0		0			0			(1,448,408	)		(1,448,408	)		0
Other liabilities		0		(28,106	)		(582	)		(5,071	)		(33,759	)		0
Short-term advances		0		0			0			(80,000	)		(80,000	)		0
Securities sold under agreement to repurchase, short-term		0		0			0			(278,076	)		(278,076	)		0
Long-term debt		0		0			0			(3,615	)		(3,615	)		0
Subordinated debt held by unconsolidated subsidiary trusts		0		0			0			(20,619	)		(20,619	)		0
Total identifiable assets, net		1,200		72,022			1,374			154,874			229,470			288
Goodwill	$	0	$	76,534		$	1,650		$	190,278		$	268,462		$	287

Summary of Loans Acquired

The following is a summary of the loans acquired from Merchants at the date of acquisition:

(000s omitted)	Acquired Impaired Loans			Acquired Non-impaired Loans			Total Acquired Loans
Contractually required principal and interest at acquisition	$	16,351		$	1,872,574		$	1,888,925
Contractual cash flows not expected to be collected		(5,190	)		(14,753	)		(19,943	)
Expected cash flows at acquisition		11,161			1,857,821			1,868,982
Interest component of expected cash flows		(769	)		(378,940	)		(379,709	)
Fair value of acquired loans	$	10,392		$	1,478,881		$	1,489,273

Pro Forma Financial Information

Acquisition-related expenses totaling $22.8 million and $24.4 million for the three and six months ended June 30, 2017 were included in the pro forma information as if they were incurred in the first quarter of 2016.

	Pro Forma (Unaudited) Three Months Ended				Pro Forma (Unaudited) Six Months Ended
(000’s omitted)	June 30, 2017		June 30, 2016		June 30, 2017		June 30, 2016
Total revenue, net of interest expense	$	129,599	$	133,813	$	242,690	$	265,315
Net income		33,051		31,862		60,757		46,274