LOANS (Tables)

6 Months Ended

Jun. 30, 2015

Accounts, Notes, Loans and Financing Receivable [Line Items]

The balances of these classes are summarized as follows:

(000's omitted)	June 30, 2015			December 31, 2014
Consumer mortgage	$	1,608,064		$	1,613,384
Business lending		1,295,889			1,262,484
Consumer indirect		837,449			833,968
Consumer direct		181,623			184,028
Home equity		340,578			342,342
Gross loans, including deferred origination costs		4,263,603			4,236,206
Allowance for loan losses		(45,282	)		(45,341	)
Loans, net of allowance for loan losses	$	4,218,321		$	4,190,865

Schedule of Accretable Discount Related to Credit Impaired Acquired Loans

The outstanding balance related to credit impaired acquired loans was $5.7 million and $6.1 million at June 30, 2015 and December 31, 2014, respectively. The changes in the accretable discount related to the credit impaired acquired loans are as follows:

(000’s omitted)
Balance at December 31, 2014	$	705
Accretion recognized, year-to-date		(296	)
Net reclassification to accretable from non-accretable		155
Balance at June 30, 2015	$	564

Aged Analysis of the Company's Past Due Loans by Class

The following is an aged analysis of the Company’s past due loans, by class as of June 30, 2015:

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
Consumer mortgage	$	9,091	$	998	$	13,346	$	23,435	$	1,521,011	$	1,544,446
Business lending		1,929		265		3,113		5,307		1,162,250		1,167,557
Consumer indirect		8,536		26		0		8,562		828,170		836,732
Consumer direct		964		8		1		973		176,270		177,243
Home equity		1,135		166		2,098		3,399		282,016		285,415
Total	$	21,655	$	1,463	$	18,558	$	41,676	$	3,969,717	$	4,011,393

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
Consumer mortgage	$	1,224	$	60	$	1,759	$	3,043	$	0	$	60,575	$	63,618
Business lending		101		0		718		819		5,138		122,375		128,332
Consumer indirect		21		0		0		21		0		696		717
Consumer direct		70		0		18		88		0		4,292		4,380
Home equity		369		35		387		791		0		54,372		55,163
Total	$	1,785	$	95	$	2,882	$	4,762	$	5,138	$	242,310	$	252,210

(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, 2014:

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
Consumer mortgage	$	13,978	$	2,165	$	13,201	$	29,344	$	1,515,057	$	1,544,401
Business lending		6,738		350		2,291		9,379		1,115,215		1,124,594
Consumer indirect		10,529		82		10		10,621		822,124		832,745
Consumer direct		1,389		36		2		1,427		177,158		178,585
Home equity		1,802		195		2,172		4,169		278,904		283,073
Total	$	34,436	$	2,828	$	17,676	$	54,940	$	3,908,458	$	3,963,398

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
Consumer mortgage	$	1,892	$	232	$	2,122	$	4,246	$	0	$	64,737	$	68,983
Business lending		608		0		489		1,097		5,312		131,481		137,890
Consumer indirect		40		0		0		40		0		1,183		1,223
Consumer direct		174		0		18		192		0		5,251		5,443
Home equity		674		46		426		1,146		0		58,123		59,269
Total	$	3,388	$	278	$	3,055	$	6,721	$	5,312	$	260,775	$	272,808

(1)

Summary of Non-business Impaired Loans

All loan classes are collectively evaluated for impairment except business lending, as described in Note C. A summary of individually evaluated impaired loans as of June 30, 2015 and December 31, 2014 follows:

(000’s omitted)	June 30, 2015		December 31, 2014
Loans with allowance allocation	$	569	$	0
Loans without allowance allocation		614		0
Carrying balance		1,183		0
Contractual balance		1,193		0
Specifically allocated allowance		63		0

Troubled Debt Restructurings on Financing Receivables

Information regarding TDRs as of June 30, 2015 and December 31, 2014 is as follows:

	June 30, 2015												December 31, 2014
(000’s omitted)	Nonaccrual				Accruing				Total				Nonaccrual			Accruing				Total
		#	Amount			#	Amount			#	Amount		#	Amount			#	Amount			#	Amount
Consumer mortgage		44	$	1,691		35	$	1,544		79	$	3,235	49	$	2,092		37	$	1,770		86	$	3,862
Business lending		3		228		4		572		7		800	6		442		3		468		9		910
Consumer indirect		0		0		72		653		72		653	0		0		79		615		79		615
Consumer direct		0		0		19		47		19		47	0		0		25		69		25		69
Home equity		8		108		12		264		20		372	13		218		13		278		26		496
Total		55	$	2,027		142	$	3,080		197	$	5,107	68	$	2,752		157	$	3,200		225	$	5,952

The following tables present information related to loans modified in a TDR during the three and six months ended June 30, 2015 and 2014. Of the loans noted in the table below, all loans for the three months ended June 30, 2015 and 2014 were modified due to a Chapter 7 bankruptcy as described previously. The financial effects of these restructurings were immaterial.

	Three Months Ended June 30, 2015				Three Months Ended June 30, 2014
(000’s omitted)	Number of loans modified		Outstanding Balance		Number of loans modified	Outstanding Balance
Consumer mortgage		2	$	61	8	$	420
Business lending		0		0	4		391
Consumer indirect		6		84	9		96
Consumer direct		1		1	1		2
Home equity		0		0	4		126
Total		9	$	146	26	$	1,035

	Six Months Ended June 30, 2015				Six Months Ended June 30, 2014
(000’s omitted)	Number of loans modified		Outstanding Balance		Number of loans modified	Outstanding Balance
Consumer mortgage		6	$	280	19	$	941
Business lending		0		0	8		580
Consumer indirect		12		163	18		201
Consumer direct		2		4	3		11
Home equity		1		14	5		155
Total		21	$	461	53	$	1,888

Schedule of 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 June 30, 2015
(000’s omitted)	Consumer Mortgage			Business Lending			Consumer Indirect			Consumer Direct			Home Equity			Unallocated			Acquired Impaired			Total
Beginning balance	$	10,233		$	15,405		$	11,246		$	2,879		$	2,663		$	2,383		$	196		$	45,005
Charge-offs		(199	)		(299	)		(1,397	)		(294	)		(56	)		0			(43	)		(2,288	)
Recoveries		45			527			1,184			199			19			0			0			1,974
Provision		113			(280	)		569			207			51			(9	)		(60	)		591
Ending balance	$	10,192		$	15,353		$	11,602		$	2,991		$	2,677		$	2,374		$	93		$	45,282

	Three Months Ended June 30, 2014
(000’s omitted)	Consumer Mortgage				Business Lending				Consumer Indirect				Consumer Direct				Home Equity					Unallocated		Acquired Impaired					Total
Beginning balance		$	9,281			$	17,046			$	10,586			$	3,087			$	1,818		$	2,178			$	201		$	44,197
Charge-offs			(364	)			(385	)			(1,435	)			(420	)			(246	)		0				(7	)		(2,857	)
Recoveries			12				100				1,005				226				32			0				0			1,375
Provision			446				(208	)			1,198				405				256			(166	)			(31	)		1,900
Ending balance		$	9,375			$	16,553			$	11,354			$	3,298			$	1,860		$	2,012			$	163		$	44,615

	Six Months Ended June 30, 2015
(000’s omitted)	Consumer Mortgage			Business Lending			Consumer Indirect			Consumer Direct			Home Equity			Unallocated		Acquired Impaired			Total
Beginning balance	$	10,286		$	15,787		$	11,544		$	3,083		$	2,701		$	1,767	$	173		$	45,341
Charge-offs		(642	)		(433	)		(2,823	)		(639	)		(122	)		0		(43	)		(4,702	)
Recoveries		66			608			2,337			392			26			0		0			3,429
Provision		482			(609	)		544			155			72			607		(37	)		1,214
Ending balance	$	10,192		$	15,353		$	11,602		$	2,991		$	2,677		$	2,374	$	93		$	45,282

	Six Months Ended June 30, 2014
(000’s omitted)	Consumer Mortgage			Business Lending			Consumer Indirect			Consumer Direct			Home Equity			Unallocated			Acquired Impaired			Total
Beginning balance	$	8,994		$	17,507		$	10,248		$	3,181		$	1,830		$	2,029		$	530		$	44,319
Charge-offs		(531	)		(505	)		(2,862	)		(912	)		(375	)		0			(20	)		(5,205	)
Recoveries		53			271			1,801			438			38			0			0			2,601
Provision		859			(720	)		2,167			591			367			(17	)		(347	)		2,900
Ending balance	$	9,375		$	16,553		$	11,354		$	3,298		$	1,860		$	2,012		$	163		$	44,615

Business Lending [Member]

Accounts, Notes, Loans and Financing Receivable [Line Items]

Schedule of Loans by Credit Quality Indicator

The following table shows the amount of business lending loans by credit quality category:

	June 30, 2015						December 31, 2014
(000’s omitted)	Legacy		Acquired		Total		Legacy		Acquired		Total
Pass	$	998,964	$	88,229	$	1,087,193	$	949,960	$	93,510	$	1,043,470
Special mention		104,313		14,140		118,453		103,176		18,038		121,214
Classified		64,280		20,825		85,105		71,458		21,030		92,488
Doubtful		0		0		0		0		0		0
Acquired impaired		0		5,138		5,138		0		5,312		5,312
Total	$	1,167,557	$	128,332	$	1,295,889	$	1,124,594	$	137,890	$	1,262,484

All Other Loan [Member]

Accounts, Notes, Loans and Financing Receivable [Line Items]

Schedule of Loans by Credit Quality Indicator

The following table details the balances in all other loan categories at June 30, 2015:

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

(000’s omitted)	Consumer Mortgage		Consumer Indirect		Consumer Direct		Home Equity		Total
Performing	$	1,530,102	$	836,706	$	177,234	$	283,151	$	2,827,193
Nonperforming		14,344		26		9		2,264		16,643
Total	$	1,544,446	$	836,732	$	177,243	$	285,415	$	2,843,836

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

(000’s omitted)	Consumer Mortgage		Consumer Indirect		Consumer Direct		Home Equity		Total
Performing	$	61,799	$	717	$	4,362	$	54,741	$	121,619
Nonperforming		1,819		0		18		422		2,259
Total	$	63,618	$	717	$	4,380	$	55,163	$	123,878

The following table details the balances in all other loan categories at December 31, 2014:

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

(000’s omitted)	Consumer Mortgage		Consumer Indirect		Consumer Direct		Home Equity		Total
Performing	$	1,529,035	$	832,653	$	178,547	$	280,706	$	2,820,941
Nonperforming		15,366		92		38		2,367		17,863
Total	$	1,544,401	$	832,745	$	178,585	$	283,073	$	2,838,804

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

(000’s omitted)	Consumer Mortgage		Consumer Indirect		Consumer Direct		Home Equity		Total
Performing	$	66,629	$	1,223	$	5,425	$	58,797	$	132,074
Nonperforming		2,354		0		18		472		2,844
Total	$	68,983	$	1,223	$	5,443	$	59,269	$	134,918