ACQUISITIONS (Tables)

12 Months Ended

Dec. 31, 2017

Estimated Fair Value of Assets Acquired and Liabilities Assumed

The following table summarizes the estimated fair value of the assets acquired and liabilities assumed after considering the measurement period adjustments described above:

	2017												2016		2015
(000s omitted)	NRS			Merchants			Other ⁽¹⁾			Total			WJL		Oneida
Consideration paid :
Cash ⁽²⁾	$	70,073		$	82,898		$	6,775		$	159,746		$	575	$	56,266
Community Bank System, Inc. common stock		78,483			262,254			2,395			343,132			0		102,202
Total net consideration paid		148,556			345,152			9,170			502,878			575		158,468
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash and cash equivalents		11,063			40,730			339			52,132			0		81,772
Investment securities		20,294			370,648			0			390,942			0		225,729
Loans		0			1,488,157			0			1,488,157			0		399,422
Premises and equipment		411			16,608			27			17,046			0		22,212
Accrued interest receivable		72			4,773			0			4,845			0		1,133
Other assets		8,088			51,585			583			60,256			0		26,529
Core deposit intangibles		0			23,214			0			23,214			0		2,570
Other intangibles		60,200			2,857			5,626			68,683			288		9,994
Deposits		0			(1,448,406	)		0			(1,448,406	)		0		(699,241	)
Other liabilities		(28,002	)		(11,750	)		(1,217	)		(40,969	)		0		(1,333	)
Short-term advances		0			(80,000	)		0			(80,000	)		0		0
Securities sold under agreement to repurchase, short-term		0			(278,076	)		0			(278,076	)		0		0
Long-term debt		0			(3,615	)		0			(3,615	)		0		0
Subordinated debt held by unconsolidated subsidiary trusts		0			(20,619	)		0			(20,619	)		0		0
Total identifiable assets, net		72,126			156,106			5,358			233,590			288		68,787
Goodwill	$	76,430		$	189,046		$	3,812		$	269,288		$	287	$	89,681

⁽¹⁾Includes amounts related to the BAS, Dryfoos, NECM and GBR acquisitions.

⁽²⁾Includes NECM $0.2 million contingent cash payment consideration.

Summary of Loans Acquired

The following is a summary of the loans acquired from Merchants at the date of acquisition:

(000s omitted)	Acquired Impaired Loans			Acquired Non-impaired Loans			Total Acquired Loans
Contractually required principal and interest at acquisition	$	15,454		$	1,872,574		$	1,888,028
Contractual cash flows not expected to be collected		(5,385	)		(14,753	)		(20,138	)
Expected cash flows at acquisition		10,069			1,857,821			1,867,890
Interest component of expected cash flows		(793	)		(378,940	)		(379,733	)
Fair value of acquired loans	$	9,276		$	1,478,881		$	1,488,157

Pro Forma Financial Information

The pro forma information set forth below reflects the historical results of Merchants and NRS combined with the Company’s consolidated statement of income with adjustments related to (a) certain purchase accounting fair value adjustments and (b) amortization of customer lists and core deposit intangibles. Acquisition expenses related to the Merchants and NRS transactions totaling $25.7 million for the year ended December 31, 2017 were included in the pro forma information as if they were incurred in 2016.

	Pro Forma (Unaudited) Year Ended December 31,
(000’s omitted)	2017		2016
Total revenue, net of interest expense	$	546,977	$	536,183
Net income		176,257		109,186