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LOANS AND ALLOWANCE FOR CREDIT LOSSES (Tables)

9 Months Ended

Sep. 30, 2022

LOANS AND ALLOWANCE FOR CREDIT LOSSES

The segments of the Company’s loan portfolio are summarized as follows:


	September 30,		December 31,
(000’s omitted)	2022		2021
Business lending	$	3,494,425	$	3,075,904
Consumer mortgage		2,975,521		2,556,114
Consumer indirect		1,461,235		1,189,749
Consumer direct		179,399		153,811
Home equity		433,027		398,061
Gross loans, including deferred origination costs		8,543,607		7,373,639
Allowance for credit losses		(60,363)		(49,869)
Loans, net of allowance for credit losses	$	8,483,244	$	7,323,770

Schedule of aged analysis of past due loans by class

The following table presents the aging of the amortized cost basis of the Company’s past due loans by segment as of September 30, 2022:


	Past Due		90+ Days Past
	30 – 89		Due and				Total
(000’s omitted)	Days		Still Accruing		Nonaccrual		Past Due		Current		Total Loans
Business lending	$	1,039	$	0	$	4,848	$	5,887	$	3,488,538	$	3,494,425
Consumer mortgage		12,138		3,997		20,890		37,025		2,938,496		2,975,521
Consumer indirect		11,938		215		0		12,153		1,449,082		1,461,235
Consumer direct		956		38		29		1,023		178,376		179,399
Home equity		1,761		166		2,309		4,236		428,791		433,027
Total	$	27,832	$	4,416	$	28,076	$	60,324	$	8,483,283	$	8,543,607

The following table presents the aging of the amortized cost basis of the Company’s past due loans by segment as of December 31, 2021:


	Past Due		90+ Days Past
	30 – 89		Due and				Total
(000’s omitted)	Days		Still Accruing		Nonaccrual		Past Due		Current		Total Loans
Business lending	$	5,540	$	99	$	24,105	$	29,744	$	3,046,160	$	3,075,904
Consumer mortgage		10,297		3,328		15,027		28,652		2,527,462		2,556,114
Consumer indirect		9,611		87		0		9,698		1,180,051		1,189,749
Consumer direct		796		22		1		819		152,992		153,811
Home equity		1,778		272		2,532		4,582		393,479		398,061
Total	$	28,022	$	3,808	$	41,665	$	73,495	$	7,300,144	$	7,373,639

Schedule of non-business individually assessed loans

Commercial loans greater than $0.5 million that are on nonaccrual are individually assessed, and if necessary, a specific allocation of the allowance for credit losses is provided. A summary of individually assessed business loans as of September 30, 2022 and December 31, 2021 follows:


	September 30,		December 31,
(000’s omitted)	2022		2021
Loans with allowance allocation	$	0	$	7,102
Loans without allowance allocation		3,232		7,417
Carrying balance		3,232		14,519
Contractual balance		4,201		16,963
Specifically allocated allowance		0		566

Schedule of troubled debt restructurings on financing receivables

Information regarding TDRs as of September 30, 2022 and December 31, 2021 is as follows:


	September 30, 2022									December 31, 2021
(000’s omitted)	Nonaccrual			Accruing			Total			Nonaccrual			Accruing			Total
	#	Amount		#	Amount		#	Amount		#	Amount		#	Amount		#	Amount
Business lending	2	$	161	3	$	282	5	$	443	10	$	1,011	4	$	811	14	$	1,822
Consumer mortgage	56		2,408	44		2,041	100		4,449	61		2,694	47		2,420	108		5,114
Consumer indirect	0		0	59		628	59		628	0		0	72		829	72		829
Consumer direct	0		0	11		4	11		4	0		0	16		7	16		7
Home equity	9		116	10		217	19		333	10		235	12		232	22		467
Total	67	$	2,685	127	$	3,172	194	$	5,857	81	$	3,940	151	$	4,299	232	$	8,239

The following table presents information related to loans modified in a TDR during the three months and nine months ended September 30, 2022 and 2021. Of the loans noted in the table below, all consumer mortgage loans for the three months and nine months ended September 30, 2022 and 2021 were modified due to a Chapter 7 bankruptcy as described previously. The financial effects of these restructurings were immaterial.


	Three Months Ended			Three Months Ended
	September 30, 2022			September 30, 2021
	Number of	Outstanding		Number of	Outstanding
(000’s omitted)	loans modified	Balance		loans modified	Balance
Business lending	0	$	0	5	$	1,925
Consumer mortgage	1		184	9		728
Consumer indirect	6		71	5		78
Consumer direct	2		3	1		2
Home equity	0		0	0		0
Total	9	$	258	20	$	2,733


	Nine Months Ended			Nine Months Ended
	September 30, 2022			September 30, 2021
	Number of	Outstanding		Number of		Outstanding
(000’s omitted)	loans modified	Balance		loans modified		Balance
Business lending	0	$	0		5	$	1,925
Consumer mortgage	5		459		19		1,193
Consumer indirect	12		127		17		222
Consumer direct	2		3		2		8
Home equity	1		6		0		0
Total	20	$	595		43	$	3,348

Schedule of allowance for loan losses by class

The following presents by segment the activity in the allowance for credit losses during the three months and nine months ended September 30, 2022 and 2021:


	Three Months Ended September 30, 2022

	Beginning		Charge-						Ending
(000’s omitted)	balance		offs		Recoveries		Provision		balance
Business lending	$	23,241	$	(495)	$	755	$	430	$	23,931
Consumer mortgage		12,631		(113)		4		1,296		13,818
Consumer indirect		14,378		(1,706)		1,386		2,960		17,018
Consumer direct		2,822		(342)		174		361		3,015
Home equity		1,470		(32)		11		132		1,581
Unallocated		1,000		0		0		0		1,000
Allowance for credit losses – loans		55,542		(2,688)		2,330		5,179		60,363
Liabilities for off-balance-sheet credit exposures		1,223		0		0		(118)		1,105
Total allowance for credit losses	$	56,765	$	(2,688)	$	2,330	$	5,061	$	61,468


	Three Months Ended September 30, 2021
	Beginning		Charge-						Ending
(000’s omitted)	balance		offs		Recoveries		Provision		balance
Business lending	$	25,302	$	(872)	$	204	$	(2,315)	$	22,319
Consumer mortgage		10,001		(127)		3		(132)		9,745
Consumer indirect		11,103		(1,365)		973		1,334		12,045
Consumer direct		2,548		(309)		163		268		2,670
Home equity		1,796		(30)		10		(56)		1,720
Unallocated		1,000		0		0		0		1,000
Allowance for credit losses – loans		51,750		(2,703)		1,353		(901)		49,499
Liabilities for off-balance-sheet credit exposures		762		0		0		(43)		719
Total allowance for credit losses	$	52,512	$	(2,703)	$	1,353	$	(944)	$	50,218


	Nine Months Ended September 30, 2022
							PCD
	Beginning		Charge-				Allowance at				Ending
(000’s omitted)	balance		offs		Recoveries		Acquisition		Provision		balance
Business lending	$	22,995	$	(650)	$	1,249	$	71	$	266	$	23,931
Consumer mortgage		10,017		(230)		21		0		4,010		13,818
Consumer indirect		11,737		(5,183)		3,732		0		6,732		17,018
Consumer direct		2,306		(859)		577		0		991		3,015
Home equity		1,814		(69)		132		0		(296)		1,581
Unallocated		1,000		0		0		0		0		1,000
Allowance for credit losses – loans		49,869		(6,991)		5,711		71		11,703		60,363
Liabilities for off-balance-sheet credit exposures		803		0		0		0		302		1,105
Total allowance for credit losses	$	50,672	$	(6,991)	$	5,711	$	71	$	12,005	$	61,468


	Nine Months Ended September 30, 2021
	Beginning		Charge-						Ending
(000’s omitted)	balance		offs		Recoveries		Provision		balance
Business lending	$	30,072	$	(925)	$	586	$	(7,414)	$	22,319
Consumer mortgage		10,672		(369)		22		(580)		9,745
Consumer indirect		13,696		(3,514)		3,402		(1,539)		12,045
Consumer direct		3,207		(822)		607		(322)		2,670
Home equity		2,222		(145)		19		(376)		1,720
Unallocated		1,000		0		0		0		1,000
Allowance for credit losses – loans		60,869		(5,775)		4,636		(10,231)		49,499
Liabilities for off-balance-sheet credit exposures		1,489		0		0		(770)		719
Total allowance for credit losses	$	62,358	$	(5,775)	$	4,636	$	(11,001)	$	50,218

Schedule of financing receivables purchased and Sold

The following table presents the carrying amounts of loans purchased and sold during the nine months ended September 30, 2022 by portfolio segment:


	Business		Consumer		Consumer		Consumer		Home
(000’s omitted)	lending		mortgage		indirect		direct		equity		Total
Purchases	$	125,288	$	271,408	$	9,383	$	12,511	$	18,429	$	437,019
Sales		0		4,541		0		0		0		4,541

Business lending

LOANS AND ALLOWANCE FOR CREDIT LOSSES

Schedule of loans by credit quality indicator


	Term Loans Amortized Cost Basis by Origination Year
													Revolving
													Loans
(000’s omitted)													Amortized
September 30, 2022	2022		2021		2020		2019		2018		Prior		Cost Basis		Total
Business lending:
Risk rating
Pass	$	617,776	$	422,638	$	306,960	$	325,181	$	249,442	$	710,320	$	636,686	$	3,269,003
Special mention		2,236		5,229		3,988		4,442		13,155		64,432		31,447		124,929
Classified		836		948		1,259		3,840		28,498		56,395		8,717		100,493
Doubtful		0		0		0		0		0		0		0		0
Total business lending	$	620,848	$	428,815	$	312,207	$	333,463	$	291,095	$	831,147	$	676,850	$	3,494,425


	Term Loans Amortized Cost Basis by Origination Year
													Revolving
													Loans
(000’s omitted)													Amortized
December 31, 2021	2021		2020		2019		2018		2017		Prior		Cost Basis		Total
Business lending:
Risk rating
Pass	$	524,302	$	328,885	$	320,638	$	248,175	$	186,074	$	584,912	$	524,553	$	2,717,539
Special mention		5,969		11,013		10,111		46,318		22,524		57,134		27,444		180,513
Classified		1,870		1,767		20,315		40,235		21,904		63,685		27,511		177,287
Doubtful		0		0		0		62		0		0		503		565
Total business lending	$	532,141	$	341,665	$	351,064	$	334,790	$	230,502	$	705,731	$	580,011	$	3,075,904

All Other Loans

LOANS AND ALLOWANCE FOR CREDIT LOSSES

Schedule of loans by credit quality indicator


	Term Loans Amortized Cost Basis by Origination Year
													Revolving
													Loans
(000’s omitted)													Amortized
September 30, 2022	2022		2021		2020		2019		2018		Prior		Cost Basis		Total
Consumer mortgage:
FICO AB⁽¹⁾
Performing	$	346,061	$	516,066	$	231,558	$	182,908	$	103,874	$	629,948	$	1,799	$	2,012,214
Nonperforming		0		0		392		422		407		4,619		0		5,840
Total FICO AB		346,061		516,066		231,950		183,330		104,281		634,567		1,799		2,018,054
FICO CDE⁽²⁾
Performing		125,340		190,264		120,575		85,509		57,082		336,435		23,215		938,420
Nonperforming		238		1,061		1,701		1,443		1,467		13,137		0		19,047
Total FICO CDE		125,578		191,325		122,276		86,952		58,549		349,572		23,215		957,467
Total consumer mortgage	$	471,639	$	707,391	$	354,226	$	270,282	$	162,830	$	984,139	$	25,014	$	2,975,521

Consumer indirect:
Performing	$	620,692	$	453,478	$	143,702	$	115,304	$	62,534	$	65,310	$	0	$	1,461,020
Nonperforming		26		135		35		8		11		0		0		215
Total consumer indirect	$	620,718	$	453,613	$	143,737	$	115,312	$	62,545	$	65,310	$	0	$	1,461,235

Consumer direct:
Performing	$	72,531	$	52,234	$	19,832	$	15,548	$	7,045	$	5,615	$	6,527	$	179,332
Nonperforming		0		0		5		1		29		12		20		67
Total consumer direct	$	72,531	$	52,234	$	19,837	$	15,549	$	7,074	$	5,627	$	6,547	$	179,399

Home equity:
Performing	$	55,553	$	74,656	$	39,458	$	33,137	$	17,175	$	44,513	$	166,060	$	430,552
Nonperforming		0		10		122		198		153		661		1,331		2,475
Total home equity	$	55,553	$	74,666	$	39,580	$	33,335	$	17,328	$	45,174	$	167,391	$	433,027

(1)

FICO AB refers to higher tiered loans with FICO scores greater than or equal to 720 at origination.

(2)

FICO CDE refers to loans with FICO scores less than 720 at origination and potentially higher risk.

The following table details the balances in all other loan categories at December 31, 2021:


	Term Loans Amortized Cost Basis by Origination Year
													Revolving
													Loans
(000’s omitted)													Amortized
December 31, 2021	2021		2020		2019		2018		2017		Prior		Cost Basis		Total
Consumer mortgage:
FICO AB⁽¹⁾
Performing	$	514,680	$	229,039	$	183,469	$	113,618	$	116,417	$	566,129	$	0	$	1,723,352
Nonperforming		0		266		0		131		435		3,236		0		4,068
Total FICO AB		514,680		229,305		183,469		113,749		116,852		569,365		0		1,727,420
FICO CDE⁽²⁾
Performing		168,870		122,546		85,253		57,973		54,396		300,341		25,028		814,407
Nonperforming		0		522		972		1,465		939		10,389		0		14,287
Total FICO CDE		168,870		123,068		86,225		59,438		55,335		310,730		25,028		828,694
Total consumer mortgage	$	683,550	$	352,373	$	269,694	$	173,187	$	172,187	$	880,095	$	25,028	$	2,556,114

Consumer indirect:
Performing	$	590,857	$	204,529	$	182,458	$	107,683	$	39,385	$	64,750	$	0	$	1,189,662
Nonperforming		0		34		0		24		17		12		0		87
Total consumer indirect	$	590,857	$	204,563	$	182,458	$	107,707	$	39,402	$	64,762	$	0	$	1,189,749

Consumer direct:
Performing	$	72,584	$	28,905	$	24,770	$	12,340	$	4,396	$	4,575	$	6,218	$	153,788
Nonperforming		0		4		18		1		0		0		0		23
Total consumer direct	$	72,584	$	28,909	$	24,788	$	12,341	$	4,396	$	4,575	$	6,218	$	153,811

Home equity:
Performing	$	76,041	$	43,106	$	35,990	$	18,824	$	15,134	$	35,740	$	170,422	$	395,257
Nonperforming		0		64		47		102		131		679		1,781		2,804
Total home equity	$	76,041	$	43,170	$	36,037	$	18,926	$	15,265	$	36,419	$	172,203	$	398,061

(1)

FICO AB refers to higher tiered loans with FICO scores greater than or equal to 720 at origination.

(2)

FICO CDE refers to loans with FICO scores less than 720 at origination and potentially higher risk.