FAIR VALUE (Tables)

9 Months Ended

Sep. 30, 2018

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.

	September 30, 2018
(000's omitted)	Level 1		Level 2			Level 3		Total Fair Value
Available-for-sale investment securities:
U.S. Treasury and agency securities	$	1,867,144	$	130,951		$	0	$	1,998,095
Obligations of state and political subdivisions		0		475,365			0		475,365
Government agency mortgage-backed securities		0		358,063			0		358,063
Corporate debt securities		0		2,550			0		2,550
Government agency collateralized mortgage obligations		0		70,706			0		70,706
Total available-for-sale investment securities		1,867,144		1,037,635			0		2,904,779
Equity securities		498		0			0		498
Mortgage loans held for sale		0		0			0		0
Commitments to originate real estate loans for sale		0		0			9		9
Forward sales commitments		0		9			0		9
Interest rate swap agreements asset		0		1,306			0		1,306
Interest rate swap agreements liability		0		(1,360	)		0		(1,360	)
Total	$	1,867,642	$	1,037,590		$	9	$	2,905,241

	December 31, 2017
(000's omitted)	Level 1		Level 2			Level 3		Total Fair Value
Available-for-sale investment securities:
U.S. Treasury and agency securities	$	1,909,290	$	144,781		$	0	$	2,054,071
Obligations of state and political subdivisions		0		528,956			0		528,956
Government agency mortgage-backed securities		0		357,538			0		357,538
Corporate debt securities		0		2,623			0		2,623
Government agency collateralized mortgage obligations		0		87,374			0		87,374
Marketable equity securities		526		0			0		526
Total available-for-sale investment securities		1,909,816		1,121,272			0		3,031,088
Mortgage loans held for sale		0		461			0		461
Commitments to originate real estate loans for sale		0		0			89		89
Forward sales commitments		0		4			0		4
Interest rate swap agreements asset		0		1,064			0		1,064
Interest rate swap agreements liability		0		(904	)		0		(904	)
Total	$	1,909,816	$	1,121,897		$	89	$	3,031,802

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, 2018								December 31, 2017
(000's omitted)	Level 1		Level 2		Level 3		Total Fair Value		Level 1		Level 2		Level 3		Total Fair Value
Other real estate owned	$	0	$	0	$	1,142	$	1,142	$	0	$	0	$	1,915	$	1,915

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 September 30, 2018		Valuation Technique	Significant Unobservable Inputs	Significant Unobservable Input Range (Weighted Average)
Other real estate owned	$	1,142	Fair Value of Collateral	Estimated cost of disposal/market adjustment		9.0% - 76.3% (32.3	%)
Commitments to originate real estate loans for sale		9	Discounted cash flow	Embedded servicing value		1	%

(000's omitted)	Fair Value at December 31, 2017		Valuation Technique	Significant Unobservable Inputs	Significant Unobservable Input Range (Weighted Average)
Other real estate owned	$	1,915	Fair value of collateral	Estimated cost of disposal/market adjustment		9.0% - 99.0% (38.5	%)
Commitments to originate real estate loans for sale		89	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 September 30, 2018 and December 31, 2017 are as follows:

	September 30, 2018				December 31, 2017
(000's omitted)	Carrying Value		Fair Value		Carrying Value		Fair Value
Financial assets:
Net loans	$	6,250,755	$	6,171,599	$	6,209,174	$	6,244,941
Financial liabilities:
Deposits		8,463,821		8,441,535		8,444,420		8,431,481
Short-term borrowings		0		0		24,000		24,000
Securities sold under agreement to repurchase, short-term		274,561		274,561		337,011		337,011
Other long-term debt		1,998		1,915		2,071		2,021
Subordinated debt held by unconsolidated subsidiary trusts		97,939		97,939		122,814		122,814