LOANS (Tables)

9 Months Ended

Sep. 30, 2019

Loans and Leases Receivable Disclosure [Line Items]

Loans Receivable, Net

The balances of these classes are summarized as follows:

(000's omitted)	September 30, 2019			December 31, 2018
Business lending	$	2,779,612		$	2,396,977
Consumer mortgage		2,405,191			2,235,408
Consumer indirect		1,091,980			1,083,207
Consumer direct		187,379			178,820
Home equity		389,029			386,709
Gross loans, including deferred origination costs		6,853,191			6,281,121
Allowance for loan losses		(49,423	)		(49,284	)
Loans, net of allowance for loan losses	$	6,803,768		$	6,231,837

Accretable Discount Related to Credit Impaired Acquired Loans

The outstanding balance related to credit impaired acquired loans was $16.7 million and $7.4 million at September 30, 2019 and December 31, 2018, respectively.  The changes in the accretable discount related to the credit impaired acquired loans are as follows:

(000’s omitted)
Balance at December 31, 2018	$	437
Accretion recognized, year-to-date		(302	)
Net reclassification from non-accretable to accretable		96
Kinderhook acquisition		512
Balance at September 30, 2019	$	743

Aged Analysis of Past Due Loans by Class

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	$	2,697	$	189	$	4,590	$	7,476	$	1,778,596	$	1,786,072
Consumer mortgage		11,038		2,976		10,650		24,664		1,921,265		1,945,929
Consumer indirect		10,307		177		0		10,484		1,074,849		1,085,333
Consumer direct		1,046		38		0		1,084		177,242		178,326
Home equity		1,496		354		1,404		3,254		308,375		311,629
Total	$	26,584	$	3,734	$	16,644	$	46,962	$	5,260,327	$	5,307,289

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	$	747	$	997	$	3,957	$	5,701	$	11,508	$	976,331	$	993,540
Consumer mortgage		1,573		171		2,409		4,153		0		455,109		459,262
Consumer indirect		33		32		0		65		0		6,582		6,647
Consumer direct		86		5		54		145		0		8,908		9,053
Home equity		279		125		546		950		0		76,450		77,400
Total	$	2,718	$	1,330	$	6,966	$	11,014	$	11,508	$	1,523,380	$	1,545,902

(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, 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	$	5,261	$	179	$	4,872	$	10,312	$	1,608,515	$	1,618,827
Consumer mortgage		12,468		1,393		9,872		23,733		1,824,717		1,848,450
Consumer indirect		14,609		258		0		14,867		1,057,525		1,072,392
Consumer direct		1,778		48		0		1,826		173,948		175,774
Home equity		983		228		1,438		2,649		309,892		312,541
Total	$	35,099	$	2,106	$	16,182	$	53,387	$	4,974,597	$	5,027,984

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	$	974	$	0	$	3,498	$	4,472	$	5,446	$	768,232	$	778,150
Consumer mortgage		841		232		2,390		3,463		0		383,495		386,958
Consumer indirect		78		34		0		112		0		10,703		10,815
Consumer direct		115		4		0		119		0		2,927		3,046
Home equity		613		79		474		1,166		0		73,002		74,168
Total	$	2,621	$	349	$	6,362	$	9,332	$	5,446	$	1,238,359	$	1,253,137

(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.

Non-Business Impaired Loans

All loan classes are collectively evaluated for impairment except business lending.  A summary of individually evaluated impaired loans as of September 30, 2019 and December 31, 2018 follows:

(000’s omitted)	September 30, 2019		December 31, 2018
Loans with allowance allocation	$	0	$	3,956
Loans without allowance allocation		5,172		2,230
Carrying balance		5,172		6,186
Contractual balance		11,896		12,078
Specifically allocated allowance		0		956

Troubled Debt Restructurings on Financing Receivables

Information regarding TDRs as of September 30, 2019 and December 31, 2018 is as follows:

	September 30, 2019												December 31, 2018
(000’s omitted)	Nonaccrual				Accruing				Total				Nonaccrual				Accruing				Total
		#	Amount			#	Amount			#	Amount			#	Amount			#	Amount			#	Amount
Business lending		5	$	662		3	$	205		8	$	867		4	$	162		2	$	165		6	$	327
Consumer mortgage		57		2,527		49		1,945		106		4,472		46		1,986		46		1,769		92		3,755
Consumer indirect		0		0		77		854		77		854		0		0		77		857		77		857
Consumer direct		0		0		22		91		22		91		0		0		22		71		22		71
Home equity		13		230		11		310		24		540		12		240		9		275		21		515
Total		75	$	3,419		162	$	3,405		237	$	6,824		62	$	2,388		156	$	3,137		218	$	5,525

The following table presents information related to loans modified in a TDR during the three months and nine months ended September 30, 2019 and 2018.  Of the loans noted in the table below, all consumer mortgage loans for the three months and nine months ended September 30, 2019 and 2018 were modified due to a Chapter 7 bankruptcy as described previously.  The financial effects of these restructurings were immaterial.

	Three Months Ended September 30, 2019				Three Months Ended September 30, 2018
(000’s omitted)	Number of loans modified		Outstanding Balance		Number of loans modified		Outstanding Balance
Business lending		1	$	415		0	$	0
Consumer mortgage		8		464		4		195
Consumer indirect		10		116		14		117
Consumer direct		2		25		2		10
Home equity		0		0		1		0
Total		21	$	1,020		21	$	322

	Nine Months Ended September 30, 2019				Nine Months Ended September 30, 2018
(000’s omitted)	Number of loans modified		Outstanding Balance		Number of loans modified		Outstanding Balance
Business lending		3	$	660		1	$	93
Consumer mortgage		19		1,271		7		407
Consumer indirect		22		206		24		176
Consumer direct		5		35		5		21
Home equity		4		72		2		85
Total		53	$	2,244		39	$	782

Allowance for Loan Losses by Class

The allowance for loan losses is general in nature and is available to absorb losses from any loan type despite the analysis below.  The following presents by class the activity in the allowance for loan losses:

	Three Months Ended September 30, 2019
(000’s omitted)	Business Lending			Consumer Mortgage			Consumer Indirect			Consumer Direct			Home Equity			Unallocated			Acquired 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

	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

	Nine Months Ended September 30, 2019
(000’s omitted)	Business Lending			Consumer Mortgage			Consumer Indirect			Consumer Direct			Home Equity			Unallocated			Acquired 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

	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

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, 2019						December 31, 2018
(000’s omitted)	Legacy		Acquired		Total		Legacy		Acquired		Total
Pass	$	1,609,382	$	886,363	$	2,495,745	$	1,439,337	$	702,493	$	2,141,830
Special mention		91,159		61,289		152,448		105,065		40,107		145,172
Classified		85,531		34,380		119,911		74,425		28,525		102,950
Doubtful		0		0		0		0		1,579		1,579
Acquired impaired		0		11,508		11,508		0		5,446		5,446
Total	$	1,786,072	$	993,540	$	2,779,612	$	1,618,827	$	778,150	$	2,396,977

All Other Loans [Member]

Loans and Leases Receivable Disclosure [Line Items]

Loans by Credit Quality Indicator

All other loans are underwritten and structured using standardized criteria and characteristics, primarily payment performance, and are normally risk rated and monitored collectively on a monthly basis.  These are typically loans to individuals in the consumer categories and are delineated as either performing or nonperforming.   Performing loans include loans classified as current as well as those classified as 30 - 89 days past due.  Nonperforming loans include 90+ days past due and still accruing and nonaccrual loans. The following table details the balances in all other loan categories at September 30, 2019:

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

(000’s omitted)	Consumer Mortgage		Consumer Indirect		Consumer Direct		Home Equity		Total
Performing	$	1,932,303	$	1,085,156	$	178,288	$	309,871	$	3,505,618
Nonperforming		13,626		177		38		1,758		15,599
Total	$	1,945,929	$	1,085,333	$	178,326	$	311,629	$	3,521,217

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

(000’s omitted)	Consumer Mortgage		Consumer Indirect		Consumer Direct		Home Equity		Total
Performing	$	456,682	$	6,615	$	8,994	$	76,729	$	549,020
Nonperforming		2,580		32		59		671		3,342
Total	$	459,262	$	6,647	$	9,053	$	77,400	$	552,362

The following table details the balances in all other loan categories at December 31, 2018:

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

(000’s omitted)	Consumer Mortgage		Consumer Indirect		Consumer Direct		Home Equity		Total
Performing	$	1,837,185	$	1,072,134	$	175,726	$	310,875	$	3,395,920
Nonperforming		11,265		258		48		1,666		13,237
Total	$	1,848,450	$	1,072,392	$	175,774	$	312,541	$	3,409,157

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

(000’s omitted)	Consumer Mortgage		Consumer Indirect		Consumer Direct		Home Equity		Total
Performing	$	384,336	$	10,781	$	3,042	$	73,615	$	471,774
Nonperforming		2,622		34		4		553		3,213
Total	$	386,958	$	10,815	$	3,046	$	74,168	$	474,987