FAIR VALUE (Tables)

6 Months Ended

Jun. 30, 2022

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.

	June 30, 2022
							Total Fair
(000’s omitted)	Level 1		Level 2		Level 3		Value
Available-for-sale investment securities:
U.S. Treasury and agency securities	$	4,540,596	$	74,950	$	0	$	4,615,546
Obligations of state and political subdivisions		0		527,155		0		527,155
Government agency mortgage-backed securities		0		425,357		0		425,357
Corporate debt securities		0		7,231		0		7,231
Government agency collateralized mortgage obligations		0		15,138		0		15,138
Total available-for-sale investment securities		4,540,596		1,049,831		0		5,590,427
Equity securities		443		0		0		443
Commitments to originate real estate loans for sale		0		0		6		6
Forward sales commitments		0		23		0		23
Interest rate swap agreements asset		0		8		0		8
Interest rate swap agreements liability		0		(2)		0		(2)
Total	$	4,541,039	$	1,049,860	$	6	$	5,590,905

	December 31, 2021
							Total Fair
(000’s omitted)	Level 1		Level 2		Level 3		Value
Available-for-sale investment securities:
U.S. Treasury and agency securities	$	3,900,924	$	97,640	$	0	$	3,998,564
Obligations of state and political subdivisions		0		430,289		0		430,289
Government agency mortgage-backed securities		0		477,056		0		477,056
Corporate debt securities		0		7,962		0		7,962
Government agency collateralized mortgage obligations		0		20,339		0		20,339
Total available-for-sale investment securities		3,900,924		1,033,286		0		4,934,210
Equity securities		463		0		0		463
Commitments to originate real estate loans for sale		0		0		51		51
Forward sales commitments		0		32		0		32
Interest rate swap agreements asset		0		296		0		296
Interest rate swap agreements liability		0		(3)		0		(3)
Total	$	3,901,387	$	1,033,611	$	51	$	4,935,049

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.

	June 30, 2022								December 31, 2021
							Total Fair								Total Fair
(000's omitted)	Level 1		Level 2		Level 3		Value		Level 1		Level 2		Level 3		Value
Individually assessed loans	$	0	$	0	$	0	$	0	$	0	$	0	$	1,820	$	1,820
Other real estate owned		0		0		619		619		0		0		718		718
Mortgage servicing rights		0		0		0		0		0		0		810		810
Contingent consideration		0		0		(3,500)		(3,500)		0		0		(3,100)		(3,100)
Total	$	0	$	0	$	(2,881)	$	(2,881)	$	0	$	0	$	248	$	248

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)	June 30, 2022		Valuation Technique	Significant Unobservable Inputs	(Weighted Average)
Other real estate owned	$	619	Fair value of collateral	Estimated cost of disposal/market adjustment		23.2% - 87.8% (44.6%)
Commitments to originate real estate loans for sale		6	Discounted cash flow	Embedded servicing value		1.0	%
Contingent consideration		(3,500)	Discounted cash flow	Discount rate		4.4% - 4.6% (4.5%)
				Probability adjusted level of retained revenue		$3.3 million - $5.4 million

					Significant
					Unobservable Input
	Fair Value at				Range
(000's omitted, except per loan data)	December 31, 2021		Valuation Technique	Significant Unobservable Inputs	(Weighted Average)
Individually assessed loans	$	1,820	Fair value of collateral	Estimated cost of disposal/market adjustment		9.0% - 43.1% (43.1%)
Other real estate owned		718	Fair value of collateral	Estimated cost of disposal/market adjustment		31.8% - 42.3% (33.3%)
Commitments to originate real estate loans for sale		51	Discounted cash flow	Embedded servicing value		1.0	%
Mortgage servicing rights		810	Discounted cash flow	Weighted average constant prepayment rate		6.4% - 15.2% (14.0%)
				Weighted average discount rate		2.3% - 2.7% (2.6%)
				Adequate compensation	$	7/loan
Contingent consideration		(3,100)	Discounted cash flow	Discount rate		1.4% - 1.7% (1.5%)
				Probability adjusted level of retained revenue		$3.0 million - $5.8 million

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 June 30, 2022 and December 31, 2021 are as follows:

	June 30, 2022				December 31, 2021
	Carrying				Carrying
(000's omitted)	Value		Fair Value		Value		Fair Value
Financial assets:
Net loans	$	8,089,154	$	8,073,820	$	7,323,770	$	7,523,024
Financial liabilities:
Deposits		13,357,772		13,333,288		12,911,168		12,911,197
Overnight Federal Reserve Bank borrowings		66,000		66,000		0		0
Securities sold under agreement to repurchase, short-term		223,755		223,755		324,720		324,720
Other Federal Home Loan Bank borrowings		19,471		19,655		1,888		1,907
Subordinated notes payable		3,263		3,263		3,277		3,277