
	December 31,
(In thousands)	2021		2020
Commercial and industrial
Agriculture	$	99,172	$	94,489
Commercial and industrial other	699,121		792,987
PPP loans*	71,260		291,252
Subtotal commercial and industrial	869,553		1,178,728
Commercial real estate
Construction	178,582		163,016
Agriculture	195,973		201,866
Commercial real estate other	2,278,599		2,204,310
Subtotal commercial real estate	2,653,154		2,569,192
Residential real estate
Home equity	182,671		200,827
Mortgages	1,290,911		1,235,160
Subtotal residential real estate	1,473,582		1,435,987
Consumer and other
Indirect	4,655		8,401
Consumer and other	67,396		61,399
Subtotal consumer and other	72,051		69,800
Leases	13,948		14,203
Total loans and leases	5,082,288		5,267,910
Less: unearned income and deferred costs and fees	(6,821)		(7,583)
Total loans and leases, net of unearned income and deferred costs and fees	$	5,075,467	$	5,260,327
*SBA Paycheck Protection Program ("PPP")

The Company has adopted comprehensive lending policies, underwriting standards and loan review procedures. There were no significant changes to the Company’s existing lending policies, underwriting standards or loan review procedures during 2021. The Company’s Board of Directors approves the lending policies at least annually. The Company recognizes that exceptions to policy guidelines may occasionally occur and has established procedures for approving exceptions to these policy guidelines. Management has also implemented reporting systems to monitor loan originations, loan quality, concentrations of credit, loan delinquencies and nonperforming loans and potential problem loans.

The Company’s policy is to underwrite residential real estate loans in accordance with secondary market guidelines in effect at the time of origination, including loan-to-value (“LTV”) and documentation requirements. LTVs exceeding 80% for fixed rate loans and 85% for adjustable rate loans require private mortgage insurance to reduce the exposure. The Company verifies applicants’ income, obtains credit reports and independent real estate appraisals in the underwriting process to ensure adequate collateral coverage and that loans are extended to individuals with good credit and income sufficient to repay the loan. In limited circumstances, the Company will make exceptions to secondary market underwriting standards to support community reinvestment activities.

The Company originates fixed rate and adjustable rate residential mortgage loans, including loans that have characteristics of both, such as a 7/1 adjustable rate mortgage, which has a fixed rate for the first seven years and then adjusts annually thereafter. The majority of residential mortgage loans originated over the last several years have been fixed rate loans due to the low interest rate environment. Adjustable rate residential real estate loans may be underwritten based upon an initial rate which is below the fully indexed rate; however, the initial rate is generally less than 100 basis points below the fully indexed rate. As such, the Company does not believe that this practice creates any significant credit risk.

The Company may sell residential real estate loans in the secondary market based on interest rate considerations. These residential real estate loans are generally sold to FHLMC or SONYMA without recourse in accordance with standard secondary market loan sale agreements. These residential real estate loan sales are subject to customary representations and warranties, including representations and warranties related to gross incompetence and fraud. The Company has not had to repurchase any loans as a result of these general representations and warranties.

During 2021, 2020, and 2019, the Company sold residential mortgage loans totaling $31.5 million, $51.7 million, and $16.9 million, respectively, and realized net gains on these sales of $943,000, $2.1 million, and $227,000, respectively. These residential real estate loans are generally sold without recourse in accordance with standard secondary market loan sale agreements. When residential mortgage loans are sold to FHLMC or SONYMA, the Company typically retains all servicing rights, which provides the Company with a source of fee income. In connection with the sales in 2021, 2020, and 2019, the Company recorded mortgage-servicing assets of $236,000, $388,000, and $127,000, respectively. The loans sold to FHLMC and SONYMA were originated with the intent to sell.

Amortization of mortgage servicing assets amounted to $182,000 in 2021, $221,000 in 2020, and $117,000 in 2019. At December 31, 2021 and 2020, the Company serviced residential mortgage loans aggregating $147.1 million and $140.9 million, including loans securitized and held as available-for-sale debt securities. Mortgage servicing rights, at an amortized cost basis, totaled $1.0 million at December 31, 2021 and $981,000 at December 31, 2020. These mortgage servicing rights were evaluated for impairment at year-end 2021 and 2020 and no impairment was recognized. Loans held for sale, which are included in residential real estate, totaled $205,000 and $4.4 million at December 31, 2021 and 2020, respectively.

As members of the FHLB, the Company’s subsidiary banks may use unencumbered mortgage related assets to secure borrowings from the FHLB. At December 31, 2021 and 2020, the Company had $110.0 million and $265.0 million, respectively, of term advances from the FHLB that were secured by residential mortgage loans.

The Company’s Commercial Loan Policy sets forth guidelines for debt service coverage ratios, LTV’s and documentation standards. Commercial and industrial loans are primarily made based on identified cash flows of the borrower with consideration given to underlying collateral and personal or government guarantees. The Company’s policy establishes debt service coverage ratio limits that require a borrower’s cash flow to be sufficient to cover principal and interest payments on all new and existing debt. Commercial and industrial loans are generally secured by the assets being financed or other business assets such as accounts receivable or inventory. Many of the loans in the commercial portfolio have variable interest rates tied to Prime Rate, FHLBNY borrowing rates, SOFR, or U.S. Treasury indices.

The Company’s Commercial Loan Policy sets forth guidelines for debt service coverage ratios, LTV’s and documentation standards. Commercial real estate loans are primarily made based on identified cash flows of the borrower with consideration given to underlying real estate collateral and personal or government guarantees. The Company’s policy establishes a maximum LTV based on the type of property and debt service coverage ratio limits that require a borrower’s cash flow to be sufficient to cover principal and interest payments on all new and existing debt. Commercial real estate loans may be fixed or variable rate loans with interest rates tied to Prime Rate, FHLBNY borrowing rates, SOFR, or U.S. Treasury indices.

Agriculturally-related loans include loans to dairy farms, cash and vegetable crop farms and a variety of other livestock and crop producers. Agriculturally-related loans are primarily made based on identified cash flows of the borrower with consideration given to underlying collateral, personal guarantees, and government related guarantees. Agriculturally-related loans are generally secured by the assets or property being financed or other business assets such as accounts receivable, livestock, equipment, or commodities/crops. The Company’s Commercial Loan Policy establishes a maximum LTV of 80% for real estate secured loans and debt service coverage ratio limits that require a borrower’s cash flow to be sufficient to cover principal and interest payments on all new and existing debt, with limited adjustments to consider commodity market cycles. The policy also establishes maximum LTV ratios for non-real estate collateral, such as livestock, commodities/crops, equipment and accounts receivable. Agriculturally-related loans may be fixed or variable rate with interest tied to Prime Rate, FHLBNY borrowing rates, SOFR, or U.S. Treasury indices.

The consumer loan portfolio includes personal installment loans, direct and indirect automobile financing, and overdraft lines of credit. The majority of the consumer portfolio consists of indirect and direct automobile loans. Consumer loans are generally short-term and have fixed rates of interest that are set giving consideration to current market interest rates, the financial strength of the borrower, and internal profitability targets. The Company's Consumer Loan Underwriting Guidelines Policy establishes maximum debt to income ratios and includes guidelines for verification of applicants’ income and receipt of credit reports.

Leases are primarily made to commercial customers and the origination criteria typically includes the value of the underlying assets being financed, the useful life of the assets being financed, and identified cash flows of the borrower. Most leases carry a fixed rate of interest that is set giving consideration to current market interest rates, the financial strength of the borrower, and internal profitability targets.

The Company’s loan and lease customers are located primarily in the upstate New York communities served by its three subsidiary banks and in the Pennsylvania communities served by VIST Bank. The Trust Company operates thirteen banking offices in the counties of Tompkins, Cayuga, Cortland, Onondaga and Schuyler, New York. The Bank of Castile operates sixteen banking offices in the counties of Wyoming, Livingston, Genesee, Orleans and Monroe, New York. Mahopac Bank operates fourteen banking offices in the counties of Putnam County, Dutchess County and Westchester, New York. VIST Bank operates twenty offices in the counties of Berks, Montgomery, Philadelphia, Delaware and Schuylkill, Pennsylvania. Other than general economic risks, management is not aware of any material concentrations of credit risk to any industry or individual borrower.

Directors and officers of the Company and its affiliated companies were customers of, and had other transactions with, the Company's banking subsidiaries in the ordinary course of business. Such loans and commitments were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons not related to the Company, and did not involve more than normal risk of collectability or present other unfavorable features.

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments are due. Loans are placed on nonaccrual status either due to the delinquency status of principal and/or interest (generally when past due 90 or more days) or a judgment by management that the full repayment of principal and interest is unlikely. When interest accrual is discontinued, all unpaid accrued interest is reversed. Payments received on loans on nonaccrual are generally applied to reduce the principal balance of the loan. Loans are generally returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. When management determines that the collection of principal in full is improbable, management will charge-off a partial amount or full amount of the loan balance. Management considers specific facts and circumstances relative to each individual credit in making such a determination. For residential and consumer loans, management uses specific regulatory guidance and thresholds for determining charge-offs.

Acquired loans that met the criteria for nonaccrual of interest prior to the acquisition may be considered performing upon acquisition, regardless of whether the customer is contractually delinquent, if we can reasonably estimate the timing and amount of the expected cash flows on such loans and if the Company expects to fully collect the new carrying value of the loans. As such, we may no longer consider the loan to be nonaccrual or nonperforming and may accrue interest on these loans, including the impact of any accretable discount.


December 31, 2021
(In thousands)	30-59 Days		60-89 Days		90 Days or More		Total Past Due		Current Loans		Total Loans
Loans and Leases
Commercial and industrial
Agriculture	$	0	$	0	$	0	$	0	$	99,172	$	99,172
Commercial and industrial other	506		6		88		600		698,521		699,121
PPP loans	0		0		0		0		71,260		71,260
Subtotal commercial and industrial	506		6		88		600		868,953		869,553
Commercial real estate
Construction	0		0		0		0		178,582		178,582
Agriculture	121		0		0		121		195,852		195,973
Commercial real estate other	150		257		3,305		3,712		2,274,887		2,278,599
Subtotal commercial real estate	271		257		3,305		3,833		2,649,321		2,653,154
Residential real estate
Home equity	441		417		798		1,656		181,015		182,671
Mortgages	7		839		3,917		4,763		1,286,148		1,290,911
Subtotal residential real estate	448		1,256		4,715		6,419		1,467,163		1,473,582
Consumer and other
Indirect	77		86		2		165		4,490		4,655
Consumer and other	120		45		45		210		67,186		67,396
Subtotal consumer and other	197		131		47		375		71,676		72,051
Leases	0		0		0		0		13,948		13,948
Total loans and leases	1,422		1,650		8,155		11,227		5,071,061		5,082,288
Less: unearned income and deferred costs and fees	0		0		0		0		(6,821)		(6,821)
Total loans and leases, net of unearned income and deferred costs and fees	$	1,422	$	1,650	$	8,155	$	11,227	$	5,064,240	$	5,075,467


December 31, 2020
(In thousands)	30-59 Days		60-89 Days		90 Days or More		Total Past Due		Current Loans		Total Loans
Loans and Leases
Commercial and industrial
Agriculture	$	0	$	18	$	0	$	18	$	94,471	$	94,489
Commercial and industrial other	44		7		1,516		1,567		791,420		792,987
PPP loans	0		0		0		0		291,252		291,252
Subtotal commercial and industrial	44		25		1,516		1,585		1,177,143		1,178,728
Commercial real estate
Construction	0		0		0		0		163,016		163,016
Agriculture	263		0		0		263		201,603		201,866
Commercial real estate other	0		0		7,125		7,125		2,197,185		2,204,310
Subtotal commercial real estate	263		0		7,125		7,388		2,561,804		2,569,192
Residential real estate
Home equity	713		224		1,126		2,063		198,764		200,827
Mortgages	521		879		4,210		5,610		1,229,550		1,235,160
Subtotal residential real estate	1,234		1,103		5,336		7,673		1,428,314		1,435,987
Consumer and other
Indirect	175		35		91		301		8,100		8,401
Consumer and other	115		18		232		365		61,034		61,399
Subtotal consumer and other	290		53		323		666		69,134		69,800
Leases	0		0		0		0		14,203		14,203
Total loans and leases	1,831		1,181		14,300		17,312		5,250,598		5,267,910
Less: unearned income and deferred costs and fees	0		0		0		0		(7,583)		(7,583)
Total loans and leases, net of unearned income and deferred costs and fees	$	1,831	$	1,181	$	14,300	$	17,312	$	5,243,015	$	5,260,327


December 31, 2021
(In thousands)	Nonaccrual Loans and Leases with no ACL		Nonaccrual Loans and Leases		Loans and Leases Past Due Over 89 Days and Accruing
Loans and Leases
Commercial and industrial

Commercial and industrial other	$	502	$	533	$	0

Subtotal commercial and industrial	502		533		0
Commercial real estate
Construction	671		671		0
Agriculture	348		456		0
Commercial real estate other	12,483		12,766		0
Subtotal commercial real estate	13,502		13,893		0
Residential real estate
Home equity	380		2,459		0
Mortgages	716		8,719		0
Subtotal residential real estate	1,096		11,178		0
Consumer and other
Indirect	1		246		0
Consumer and other	0		183		0
Subtotal consumer and other	1		429		0

Total loans and leases	$	15,101	$	26,033	$	0


December 31, 2020
(In thousands)	Nonaccrual Loans and Leases with no ACL		Nonaccrual Loans and Leases		Loans and Leases Past Due Over 89 Days and Accruing
Loans and Leases
Commercial and industrial

Commercial and industrial other	$	803	$	1,775	$	0

Subtotal commercial and industrial	803		1,775		0
Commercial real estate

Agriculture	0		118		0
Commercial real estate other	23,080		23,509		0
Subtotal commercial real estate	23,080		23,627		0
Residential real estate
Home equity	767		2,965		0
Mortgages	1,365		10,180		0
Subtotal residential real estate	2,132		13,145		0
Consumer and other
Indirect	3		169		0
Consumer and other	0		260		0
Subtotal consumer and other	3		429		0

Total loans and leases	$	26,018	$	38,976	$	0