LOANS (Tables)

9 Months Ended

Sep. 30, 2018

Loans and Leases Receivable Disclosure [Line Items]

The balances of these classes are summarized as follows:

(000's omitted)	September 30, 2018			December 31, 2017
Business lending	$	2,403,624		$	2,424,223
Consumer mortgage		2,220,022			2,220,298
Consumer indirect		1,098,943			1,011,978
Consumer direct		184,349			179,929
Home equity		393,950			420,329
Gross loans, including deferred origination costs		6,300,888			6,256,757
Allowance for loan losses		(50,133	)		(47,583	)
Loans, net of allowance for loan losses	$	6,250,755		$	6,209,174

Accretable Discount Related to Credit Impaired Acquired Loans

The changes in the accretable discount related to the credit impaired acquired loans are as follows:

(000’s omitted)
Balance at December 31, 2017	$	976
Accretion recognized, year-to-date		(722	)
Net reclassification between accretable and non-accretable		239
Balance at September 30, 2018	$	493

Aged Analysis of Past Due Loans by Class

The following is an aged analysis of the Company’s past due loans, by class as of September 30, 2018:

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

(000’s omitted)	Past Due 30 – 89 Days		90+ Days Past Due and Still Accruing		Nonaccrual		Total Past Due		Current		Total Loans
Business lending	$	5,751	$	355	$	3,335	$	9,441	$	1,573,366	$	1,582,807
Consumer mortgage		10,189		1,767		9,915		21,871		1,793,227		1,815,098
Consumer indirect		12,408		175		0		12,583		1,073,607		1,086,190
Consumer direct		1,510		20		0		1,530		179,399		180,929
Home equity		1,191		371		1,433		2,995		311,817		314,812
Total	$	31,049	$	2,688	$	14,683	$	48,420	$	4,931,416	$	4,979,836

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

(000’s omitted)	Past Due 30 – 89 Days		90+ Days Past Due and Still Accruing		Nonaccrual		Total Past Due		Acquired Impaired⁽¹⁾		Current		Total Loans
Business lending	$	1,134	$	0	$	3,711	$	4,845	$	5,851	$	810,121	$	820,817
Consumer mortgage		977		215		2,438		3,630		0		401,294		404,924
Consumer indirect		100		34		0		134		0		12,619		12,753
Consumer direct		74		0		0		74		0		3,346		3,420
Home equity		618		14		1,150		1,782		0		77,356		79,138
Total	$	2,903	$	263	$	7,299	$	10,465	$	5,851	$	1,304,736	$	1,321,052

(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.

The following is an aged analysis of the Company’s past due loans by class as of December 31, 2017:

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

(000’s omitted)	Past Due 30 – 89 Days		90+ Days Past Due and Still Accruing		Nonaccrual		Total Past Due		Current		Total Loans
Business lending	$	2,283	$	571	$	3,944	$	6,798	$	1,369,801	$	1,376,599
Consumer mortgage		13,564		1,500		10,722		25,786		1,728,823		1,754,609
Consumer indirect		14,197		295		0		14,492		977,344		991,836
Consumer direct		1,875		48		0		1,923		172,556		174,479
Home equity		1,116		94		1,354		2,564		319,576		322,140
Total	$	33,035	$	2,508	$	16,020	$	51,563	$	4,568,100	$	4,619,663

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

(000’s omitted)	Past Due 30 – 89 Days		90+ Days Past Due and Still Accruing		Nonaccrual		Total Past Due		Acquired Impaired⁽¹⁾		Current		Total Loans
Business lending	$	4,661	$	0	$	4,328	$	8,989	$	10,115	$	1,028,520	$	1,047,624
Consumer mortgage		2,603		26		3,066		5,695		0		459,994		465,689
Consumer indirect		245		8		0		253		0		19,889		20,142
Consumer direct		100		0		0		100		0		5,350		5,450
Home equity		634		170		1,326		2,130		0		96,059		98,189
Total	$	8,243	$	204	$	8,720	$	17,167	$	10,115	$	1,609,812	$	1,637,094

(1)

Summary of Non-Business Impaired Loans

A summary of individually evaluated impaired loans as of September 30, 2018 and December 31, 2017 follows:

(000’s omitted)	September 30, 2018		December 31, 2017
Loans with allowance allocation	$	3,956	$	5,125
Loans without allowance allocation		1,151		884
Carrying balance		5,107		6,009
Contractual balance		9,688		9,165
Specifically allocated allowance		956		804

Troubled Debt Restructurings on Financing Receivables

Information regarding TDRs as of September 30, 2018 and December 31, 2017 is as follows:

	September 30, 2018												December 31, 2017
(000’s omitted)	Nonaccrual				Accruing				Total				Nonaccrual				Accruing				Total
		#	Amount			#	Amount			#	Amount			#	Amount			#	Amount			#	Amount
Business lending		5	$	165		3	$	319		8	$	484		8	$	218		7	$	501		15	$	719
Consumer mortgage		45		2,000		46		1,783		91		3,783		51		2,265		44		1,750		95		4,015
Consumer indirect		0		0		76		814		76		814		0		0		71		883		71		883
Consumer direct		0		0		22		70		22		70		0		0		25		69		25		69
Home equity		12		215		8		279		20		494		13		245		7		204		20		449
Total		62	$	2,380		155	$	3,265		217	$	5,645		72	$	2,728		154	$	3,407		226	$	6,135

The following table presents information related to loans modified in a TDR during the three months and nine months ended September 30, 2018 and 2017. Of the loans noted in the table below, all loans for the three months and nine months ended September 30, 2018 and 2017 were modified due to a Chapter 7 bankruptcy as described previously. The financial effects of these restructurings were immaterial.

	Three Months Ended September 30, 2018				Three Months Ended September 30, 2017
(000’s omitted)	Number of loans modified		Outstanding Balance		Number of loans modified		Outstanding Balance
Business lending		0	$	0		1	$	51
Consumer mortgage		4		195		8		540
Consumer indirect		14		117		8		181
Consumer direct		2		10		1		1
Home equity		1		0		1		8
Total		21	$	322		19	$	781

	Nine Months Ended September 30, 2018				Nine Months Ended September 30, 2017
(000’s omitted)	Number of loans modified		Outstanding Balance		Number of loans modified		Outstanding Balance
Business lending		1	$	93		4	$	414
Consumer mortgage		7		407		15		1,040
Consumer indirect		24		176		22		323
Consumer direct		5		21		4		7
Home equity		2		85		3		106
Total		39	$	782		48	$	1,890

Allowance for Loan Losses by Class

The following presents by class the activity in the allowance for loan losses:

	Three Months Ended September 30, 2018
(000’s omitted)	Business Lending			Consumer Mortgage			Consumer Indirect			Consumer Direct			Home Equity			Unallocated			Acquired Impaired		Total
Beginning balance	$	18,439		$	10,473		$	14,424		$	3,164		$	2,015		$	1,070		$	33	$	49,618
Charge-offs		(73	)		(144	)		(2,364	)		(465	)		(221	)		0			0		(3,267	)
Recoveries		93			46			1,190			223			15			0			0		1,567
Provision		321			(205	)		1,719			299			225			(159	)		15		2,215
Ending balance	$	18,780		$	10,170		$	14,969		$	3,221		$	2,034		$	911		$	48	$	50,133

	Three Months Ended September 30, 2017
(000’s omitted)	Business Lending			Consumer Mortgage			Consumer Indirect			Consumer Direct			Home Equity			Unallocated		Acquired Impaired			Total
Beginning balance	$	17,230		$	10,197		$	13,918		$	2,945		$	2,242		$	856	$	63		$	47,451
Charge-offs		(124	)		(198	)		(2,328	)		(574	)		0			0		0			(3,224	)
Recoveries		127			24			1,058			221			12			0		0			1,442
Provision		399			280			1,130			426			(52	)		142		(11	)		2,314
Ending balance	$	17,632		$	10,303		$	13,778		$	3,018		$	2,202		$	998	$	52		$	47,983

	Nine Months Ended September 30, 2018
(000’s omitted)	Business Lending			Consumer Mortgage			Consumer Indirect			Consumer Direct			Home Equity			Unallocated			Acquired Impaired			Total
Beginning balance	$	17,257		$	10,465		$	13,468		$	3,039		$	2,107		$	1,100		$	147		$	47,583
Charge-offs		(2,000	)		(588	)		(6,031	)		(1,324	)		(325	)		0			(368	)		(10,636	)
Recoveries		404			109			3,688			612			31			0			0			4,844
Provision		3,119			184			3,844			894			221			(189	)		269			8,342
Ending balance	$	18,780		$	10,170		$	14,969		$	3,221		$	2,034		$	911		$	48		$	50,133

	Nine Months Ended September 30, 2017
(000’s omitted)	Business Lending			Consumer Mortgage			Consumer Indirect			Consumer Direct			Home Equity			Unallocated		Acquired Impaired			Total
Beginning balance	$	17,220		$	10,094		$	13,782		$	2,979		$	2,399		$	651	$	108		$	47,233
Charge-offs		(1,062	)		(541	)		(5,969	)		(1,463	)		(228	)		0		(184	)		(9,447	)
Recoveries		481			42			3,379			648			44			0		0			4,594
Provision		993			708			2,586			854			(13	)		347		128			5,603
Ending balance	$	17,632		$	10,303		$	13,778		$	3,018		$	2,202		$	998	$	52		$	47,983

Business Lending [Member]

Loans and Leases Receivable Disclosure [Line Items]

Loans by Credit Quality Indicator

The following table shows the amount of business lending loans by credit quality category:

	September 30, 2018						December 31, 2017
(000’s omitted)	Legacy		Acquired		Total		Legacy		Acquired		Total
Pass	$	1,394,290	$	740,329	$	2,134,619	$	1,170,156	$	963,981	$	2,134,137
Special mention		112,777		47,773		160,550		129,076		37,321		166,397
Classified		75,740		25,285		101,025		77,367		34,628		111,995
Doubtful		0		1,579		1,579		0		1,579		1,579
Acquired impaired		0		5,851		5,851		0		10,115		10,115
Total	$	1,582,807	$	820,817	$	2,403,624	$	1,376,599	$	1,047,624	$	2,424,223

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, 2018:

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

(000’s omitted)	Consumer Mortgage		Consumer Indirect		Consumer Direct		Home Equity		Total
Performing	$	1,803,416	$	1,086,015	$	180,909	$	313,008	$	3,383,348
Nonperforming		11,682		175		20		1,804		13,681
Total	$	1,815,098	$	1,086,190	$	180,929	$	314,812	$	3,397,029

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

(000’s omitted)	Consumer Mortgage		Consumer Indirect		Consumer Direct		Home Equity		Total
Performing	$	402,271	$	12,719	$	3,420	$	77,974	$	496,384
Nonperforming		2,653		34		0		1,164		3,851
Total	$	404,924	$	12,753	$	3,420	$	79,138	$	500,235

The following table details the balances in all other loan categories at December 31, 2017:

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

(000’s omitted)	Consumer Mortgage		Consumer Indirect		Consumer Direct		Home Equity		Total
Performing	$	1,742,387	$	991,541	$	174,431	$	320,692	$	3,229,051
Nonperforming		12,222		295		48		1,448		14,013
Total	$	1,754,609	$	991,836	$	174,479	$	322,140	$	3,243,064

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

(000’s omitted)	Consumer Mortgage		Consumer Indirect		Consumer Direct		Home Equity		Total
Performing	$	462,597	$	20,134	$	5,450	$	96,693	$	584,874
Nonperforming		3,092		8		0		1,496		4,596
Total	$	465,689	$	20,142	$	5,450	$	98,189	$	589,470