☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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16‑1213679
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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5790 Widewaters Parkway, DeWitt, New York
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13214-1883
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(Address of principal executive offices)
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(Zip Code)
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NONE
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(Former name, former address and former fiscal year, if changed since last report)
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Large accelerated filer ☒
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Accelerated filer ☐ |
Non-accelerated filer ☐
|
Smaller reporting company ☐. | Emerging growth company ☐ |
(Do not check if a smaller reporting company)
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Part I.
|
Financial Information
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Page
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Item 1.
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Financial Statements (Unaudited)
|
|
3
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||
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|
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4
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||
5 | ||
6 | ||
7 | ||
8 | ||
Item 2.
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31
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Item 3.
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47
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Item 4.
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48
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Part II.
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Other Information
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Item 1.
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48
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Item 1A.
|
49
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Item 2.
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49
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Item 3.
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49
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Item 4.
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49
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Item 5.
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49
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Item 6.
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50
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Part I. |
Financial Information
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March 31,
2018
|
December 31,
2017
|
|||||||
Assets:
|
||||||||
Cash and cash equivalents
|
$
|
543,899
|
$
|
221,038
|
||||
Available-for-sale investment securities (cost of $3,005,165 and $3,007,148, respectively)
|
2,987,290
|
3,031,088
|
||||||
Other securities, at cost
|
45,352
|
50,291
|
||||||
Loans held for sale, at fair value
|
628
|
461
|
||||||
Loans
|
6,227,030
|
6,256,757
|
||||||
Allowance for loan losses
|
(48,103
|
)
|
(47,583
|
)
|
||||
Net loans
|
6,178,927
|
6,209,174
|
||||||
Goodwill, net
|
733,625
|
734,430
|
||||||
Core deposit intangibles, net
|
23,281
|
25,025
|
||||||
Other intangibles, net
|
63,678
|
65,633
|
||||||
Intangible assets, net
|
820,584
|
825,088
|
||||||
Premises and equipment, net
|
120,953
|
123,393
|
||||||
Accrued interest and fees receivable
|
33,555
|
36,177
|
||||||
Other assets
|
235,367
|
249,488
|
||||||
Total assets
|
$
|
10,966,555
|
$
|
10,746,198
|
||||
Liabilities:
|
||||||||
Noninterest-bearing deposits
|
$
|
2,372,824
|
$
|
2,293,057
|
||||
Interest-bearing deposits
|
6,398,268
|
6,151,363
|
||||||
Total deposits
|
8,771,092
|
8,444,420
|
||||||
|
||||||||
Short-term borrowings
|
0
|
24,000
|
||||||
Securities sold under agreement to repurchase, short-term
|
279,702
|
337,011
|
||||||
Other long-term debt
|
2,042
|
2,071
|
||||||
Subordinated debt held by unconsolidated subsidiary trusts
|
122,820
|
122,814
|
||||||
Accrued interest and other liabilities
|
159,433
|
180,567
|
||||||
Total liabilities
|
9,335,089
|
9,110,883
|
||||||
Commitments and contingencies (See Note J)
|
||||||||
Shareholders’ equity:
|
||||||||
Preferred stock, $1.00 par value, 500,000 shares authorized, 0 shares issued
|
0
|
0
|
||||||
Common stock, $1.00 par value, 75,000,000 shares authorized; 51,374,254 and 51,263,841 shares issued, respectively
|
51,374
|
51,264
|
||||||
Additional paid-in capital
|
898,036
|
894,879
|
||||||
Retained earnings
|
723,404
|
700,557
|
||||||
Accumulated other comprehensive loss
|
(35,226
|
)
|
(3,699
|
)
|
||||
Treasury stock, at cost (490,651 shares, including 203,730 shares held by deferred compensation arrangements at March 31, 2018 and 567,764 shares including 237,494 shares held by deferred compensation arrangements at December 31, 2017, respectively)
|
(17,633
|
)
|
(21,014
|
)
|
||||
Deferred compensation arrangements (203,730 and 237,494 shares, respectively)
|
11,511
|
13,328
|
||||||
Total shareholders’ equity
|
1,631,466
|
1,635,315
|
||||||
Total liabilities and shareholders’ equity
|
$
|
10,966,555
|
$
|
10,746,198
|
Three Months Ended
March 31,
|
||||||||
2018
|
2017
|
|||||||
Interest income:
|
||||||||
Interest and fees on loans
|
$
|
69,441
|
$
|
52,384
|
||||
Interest and dividends on taxable investments
|
15,525
|
13,566
|
||||||
Interest on nontaxable investments
|
3,438
|
4,008
|
||||||
Total interest income
|
88,404
|
69,958
|
||||||
Interest expense:
|
||||||||
Interest on deposits
|
2,132
|
1,730
|
||||||
Interest on borrowings
|
480
|
149
|
||||||
Interest on subordinated debt held by unconsolidated subsidiary trusts
|
1,168
|
805
|
||||||
Total interest expense
|
3,780
|
2,684
|
||||||
Net interest income
|
84,624
|
67,274
|
||||||
Provision for loan losses
|
3,679
|
1,828
|
||||||
Net interest income after provision for loan losses
|
80,945
|
65,446
|
||||||
Noninterest revenues:
|
||||||||
Deposit service fees
|
19,177
|
14,707
|
||||||
Other banking services
|
1,243
|
1,159
|
||||||
Employee benefit services
|
23,006
|
17,189
|
||||||
Insurance revenues
|
7,359
|
6,400
|
||||||
Wealth management services
|
6,706
|
4,861
|
||||||
Gain on sales of investment securities
|
0
|
2
|
||||||
Total noninterest revenues
|
57,491
|
44,318
|
||||||
Noninterest expenses:
|
||||||||
Salaries and employee benefits
|
51,859
|
42,907
|
||||||
Occupancy and equipment
|
10,531
|
8,196
|
||||||
Data processing and communications
|
8,742
|
8,521
|
||||||
Amortization of intangible assets
|
4,798
|
2,768
|
||||||
Legal and professional fees
|
2,781
|
2,414
|
||||||
Office supplies and postage
|
1,879
|
1,674
|
||||||
Business development and marketing
|
2,059
|
2,081
|
||||||
FDIC insurance premiums
|
752
|
753
|
||||||
Acquisition expenses
|
(8
|
)
|
1,716
|
|||||
Other expenses
|
2,938
|
2,545
|
||||||
Total noninterest expenses
|
86,331
|
73,575
|
||||||
Income before income taxes
|
52,105
|
36,189
|
||||||
Income taxes
|
11,999
|
9,932
|
||||||
Net income
|
$
|
40,106
|
$
|
26,257
|
||||
Basic earnings per share
|
$
|
0.78
|
$
|
0.58
|
||||
Diluted earnings per share
|
$
|
0.78
|
$
|
0.57
|
||||
Cash dividends declared per share
|
$
|
0.34
|
$
|
0.32
|
Three Months Ended
March 31,
|
||||||||
2018
|
2017
|
|||||||
Pension and other post-retirement obligations:
|
||||||||
Amortization of actuarial losses included in net periodic pension cost, gross
|
$
|
303
|
$
|
265
|
||||
Tax effect
|
(74
|
)
|
(102
|
)
|
||||
Amortization of actuarial losses included in net periodic pension cost, net
|
229
|
163
|
||||||
Amortization of prior service cost included in net periodic pension cost, gross
|
(127
|
)
|
(31
|
)
|
||||
Tax effect
|
31
|
12
|
||||||
Amortization of prior service cost included in net periodic pension cost, net
|
(96
|
)
|
(19
|
)
|
||||
Other comprehensive income related to pension and other post-retirement obligations, net of taxes
|
133
|
144
|
||||||
Unrealized (losses) gains on available-for-sale securities:
|
||||||||
Net unrealized holding (losses) gains arising during period, gross
|
(41,815
|
)
|
3,893
|
|||||
Tax effect
|
10,155
|
(1,526
|
)
|
|||||
Net unrealized holding (losses) gains arising during period, net
|
(31,660
|
)
|
2,367
|
|||||
Other comprehensive (loss)/income related to unrealized (losses) gains on available-for-sale securities, net of taxes
|
(31,660
|
)
|
2,367
|
|||||
Other comprehensive (loss) income, net of tax
|
(31,527
|
)
|
2,511
|
|||||
Net income
|
40,106
|
26,257
|
||||||
Comprehensive income
|
$
|
8,579
|
$
|
28,768
|
As of
|
||||||||
March 31,
2018
|
December 31,
2017
|
|||||||
Accumulated Other Comprehensive Income By Component:
|
||||||||
Unrealized loss for pension and other post-retirement obligations
|
$
|
(28,501
|
)
|
$
|
(28,677
|
)
|
||
Tax effect
|
7,001
|
7,044
|
||||||
Net unrealized loss for pension and other post-retirement obligations
|
(21,500
|
)
|
(21,633
|
)
|
||||
Unrealized (loss)/gain on available-for-sale securities
|
(17,875
|
)
|
23,940
|
|||||
Tax effect
|
4,149
|
(6,006
|
)
|
|||||
Net unrealized (loss)/gain on available-for-sale securities
|
(13,726
|
)
|
17,934
|
|||||
Accumulated other comprehensive loss
|
$
|
(35,226
|
)
|
$
|
(3,699
|
)
|
Common Stock
|
Additional
Paid-In
Capital |
Retained
Earnings |
Accumulated
Other
Comprehensive
Loss |
Treasury
Stock |
Deferred
Compensation
Arrangements |
Total
|
||||||||||||||||||||||||||
Shares
Outstanding |
Amount
Issued |
|||||||||||||||||||||||||||||||
Balance at December 31, 2017
|
50,696,077
|
$
|
51,264
|
$
|
894,879
|
$
|
700,557
|
$
|
(3,699
|
)
|
$
|
(21,014
|
)
|
$
|
13,328
|
$
|
1,635,315
|
|||||||||||||||
Net income
|
40,106
|
40,106
|
||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax
|
(31,527
|
)
|
(31,527
|
)
|
||||||||||||||||||||||||||||
Cash dividends declared:
|
||||||||||||||||||||||||||||||||
Common, $0.34 per share
|
(17,259
|
)
|
(17,259
|
)
|
||||||||||||||||||||||||||||
Common stock issued under employee stock ownership plan
|
110,413
|
110
|
460
|
570
|
||||||||||||||||||||||||||||
Stock-based compensation
|
1,715
|
1,715
|
||||||||||||||||||||||||||||||
Distribution of stock under deferred compensation arrangements
|
35,233
|
1,898
|
(1,898
|
)
|
0
|
|||||||||||||||||||||||||||
Treasury stock issued to benefit plans, net
|
41,880
|
982
|
1,483
|
81
|
2,546
|
|||||||||||||||||||||||||||
Balance at March 31, 2018
|
50,883,603
|
$
|
51,374
|
$
|
898,036
|
$
|
723,404
|
$
|
(35,226
|
)
|
$
|
(17,633
|
)
|
$
|
11,511
|
$
|
1,631,466
|
Three Months Ended
March 31, |
||||||||
2018
|
2017
|
|||||||
Operating activities:
|
||||||||
Net income
|
$
|
40,106
|
$
|
26,257
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation
|
4,001
|
3,669
|
||||||
Amortization of intangible assets
|
4,798
|
2,768
|
||||||
Net accretion on securities, loans and borrowings
|
(2,214
|
)
|
(406
|
)
|
||||
Stock-based compensation
|
1,715
|
1,410
|
||||||
Provision for loan losses
|
3,679
|
1,828
|
||||||
Amortization of mortgage servicing rights
|
117
|
126
|
||||||
Income from bank-owned life insurance policies
|
(388
|
)
|
(368
|
)
|
||||
Net gain on sale of loans and other assets
|
(80
|
)
|
(53
|
)
|
||||
Change in other assets and other liabilities
|
9,174
|
7,430
|
||||||
Net cash provided by operating activities
|
60,908
|
42,661
|
||||||
Investing activities:
|
||||||||
Proceeds from maturities of available-for-sale investment securities
|
27,363
|
33,479
|
||||||
Proceeds from maturities of other investment securities
|
4,960
|
8,709
|
||||||
Purchases of available-for-sale investment securities
|
(23,434
|
)
|
(16,784
|
)
|
||||
Purchases of other securities
|
(21
|
)
|
(505
|
)
|
||||
Net change in loans
|
25,900
|
12,197
|
||||||
Cash paid for acquisitions, net of cash acquired of $16 and $11,063, respectively
|
(1,464
|
)
|
(63,517
|
)
|
||||
Purchases of premises and equipment, net
|
(1,556
|
)
|
(2,088
|
)
|
||||
Net cash provided by/(used in) investing activities
|
31,748
|
(28,509
|
)
|
|||||
Financing activities:
|
||||||||
Net increase in deposits
|
326,672
|
260,923
|
||||||
Net change in borrowings
|
(81,338
|
)
|
(146,200
|
)
|
||||
Issuance of common stock
|
570
|
1,809
|
||||||
Purchases of treasury stock
|
(81
|
)
|
0
|
|||||
Sales of treasury stock
|
2,546
|
2,151
|
||||||
Increase in deferred compensation arrangements
|
81
|
0
|
||||||
Cash dividends paid
|
(17,281
|
)
|
(14,186
|
)
|
||||
Withholding taxes paid on share-based compensation
|
(964
|
)
|
(1,320
|
)
|
||||
Net cash provided by financing activities
|
230,205
|
103,177
|
||||||
Change in cash and cash equivalents
|
322,861
|
117,329
|
||||||
Cash and cash equivalents at beginning of period
|
221,038
|
173,857
|
||||||
Cash and cash equivalents at end of period
|
$
|
543,899
|
$
|
291,186
|
||||
Supplemental disclosures of cash flow information:
|
||||||||
Cash paid for interest
|
$
|
3,757
|
$
|
2,707
|
||||
Cash paid for income taxes
|
564
|
9,044
|
||||||
Supplemental disclosures of noncash financing and investing activities:
|
||||||||
Dividends declared and unpaid
|
17,438
|
14,773
|
||||||
Transfers from loans to other real estate
|
942
|
920
|
||||||
Acquisitions:
|
||||||||
Common stock issued
|
0
|
78,483
|
||||||
Fair value of assets acquired, excluding acquired cash and intangibles
|
27
|
31,599
|
||||||
Fair value of liabilities assumed
|
31
|
30,500
|
NOTE A: |
BASIS OF PRESENTATION
|
NOTE B: |
ACQUISITIONS
|
2018
|
2017
|
|||||||||||||||||||
(000s omitted)
|
Other (1)
|
NRS
|
Merchants
|
Other (2)
|
Total
|
|||||||||||||||
Consideration paid :
|
||||||||||||||||||||
Cash (3)
|
$
|
1,480
|
$
|
70,073
|
$
|
82,898
|
$
|
6,775
|
$
|
159,746
|
||||||||||
Community Bank System, Inc. common stock
|
0
|
78,483
|
262,254
|
2,395
|
343,132
|
|||||||||||||||
Total net consideration paid
|
1,480
|
148,556
|
345,152
|
9,170
|
502,878
|
|||||||||||||||
Recognized amounts of identifiable assets acquired and liabilities assumed:
|
||||||||||||||||||||
Cash and cash equivalents
|
16
|
11,063
|
40,730
|
339
|
52,132
|
|||||||||||||||
Investment securities
|
0
|
20,294
|
370,648
|
0
|
390,942
|
|||||||||||||||
Loans
|
0
|
0
|
1,488,157
|
0
|
1,488,157
|
|||||||||||||||
Premises and equipment
|
10
|
411
|
16,608
|
27
|
17,046
|
|||||||||||||||
Accrued interest receivable
|
0
|
72
|
4,773
|
0
|
4,845
|
|||||||||||||||
Other assets
|
17
|
8,088
|
51,585
|
583
|
60,256
|
|||||||||||||||
Core deposit intangibles
|
0
|
0
|
23,214
|
0
|
23,214
|
|||||||||||||||
Other intangibles
|
1,099
|
60,200
|
2,857
|
5,626
|
68,683
|
|||||||||||||||
Deposits
|
0
|
0
|
(1,448,406
|
)
|
0
|
(1,448,406
|
)
|
|||||||||||||
Other liabilities
|
(31
|
)
|
(26,828
|
)
|
(11,750
|
)
|
(1,217
|
)
|
(39,795
|
)
|
||||||||||
Short-term advances
|
0
|
0
|
(80,000
|
)
|
0
|
(80,000
|
)
|
|||||||||||||
Securities sold under agreement to repurchase, short-term
|
0
|
0
|
(278,076
|
)
|
0
|
(278,076
|
)
|
|||||||||||||
Long-term debt
|
0
|
0
|
(3,615
|
)
|
0
|
(3,615
|
)
|
|||||||||||||
Subordinated debt held by unconsolidated subsidiary trusts
|
0
|
0
|
(20,619
|
)
|
0
|
(20,619
|
)
|
|||||||||||||
Total identifiable assets, net
|
1,111
|
73,300
|
156,106
|
5,358
|
234,764
|
|||||||||||||||
Goodwill
|
$
|
369
|
$
|
75,256
|
$
|
189,046
|
$
|
3,812
|
$
|
268,114
|
(1) |
Includes amounts related to the Penna and Styles Bridges acquisitions.
|
(2) |
Includes amounts related to the BAS, Dryfoos, NECM and GBR acquisitions.
|
(3) |
Includes NECM $0.2 million contingent cash payment consideration.
|
(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
|
NOTE C: |
ACCOUNTING POLICIES
|
NOTE D: |
INVESTMENT SECURITIES
|
March 31, 2018
|
December 31, 2017
|
|||||||||||||||||||||||||||||||
(000's omitted)
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
||||||||||||||||||||||||
Available-for-Sale Portfolio:
|
||||||||||||||||||||||||||||||||
U.S. Treasury and agency securities
|
$
|
2,044,795
|
$
|
1,962
|
$
|
18,843
|
$
|
2,027,914
|
$
|
2,043,023
|
$
|
15,886
|
$
|
4,838
|
$
|
2,054,071
|
||||||||||||||||
Obligations of state and political subdivisions
|
502,517
|
9,126
|
1,335
|
510,308
|
514,949
|
14,064
|
57
|
528,956
|
||||||||||||||||||||||||
Government agency mortgage-backed securities
|
371,857
|
2,132
|
9,450
|
364,539
|
358,180
|
3,121
|
3,763
|
357,538
|
||||||||||||||||||||||||
Corporate debt securities
|
2,633
|
0
|
54
|
2,579
|
2,648
|
0
|
25
|
2,623
|
||||||||||||||||||||||||
Government agency collateralized mortgage obligations
|
83,113
|
89
|
1,773
|
81,429
|
88,097
|
155
|
878
|
87,374
|
||||||||||||||||||||||||
Marketable equity securities
|
250
|
271
|
0
|
521
|
251
|
275
|
0
|
526
|
||||||||||||||||||||||||
Total available-for-sale portfolio
|
$
|
3,005,165
|
$
|
13,580
|
$
|
31,455
|
$
|
2,987,290
|
$
|
3,007,148
|
$
|
33,501
|
$
|
9,561
|
$
|
3,031,088
|
||||||||||||||||
Other Securities:
|
||||||||||||||||||||||||||||||||
Federal Home Loan Bank common stock
|
$
|
8,801
|
$
|
8,801
|
$
|
9,896
|
$
|
9,896
|
||||||||||||||||||||||||
Federal Reserve Bank common stock
|
30,690
|
30,690
|
30,690
|
30,690
|
||||||||||||||||||||||||||||
Certificates of deposit
|
0
|
0
|
3,865
|
3,865
|
||||||||||||||||||||||||||||
Other equity securities
|
5,861
|
5,861
|
5,840
|
5,840
|
||||||||||||||||||||||||||||
Total other securities
|
$
|
45,352
|
$
|
45,352
|
$
|
50,291
|
$
|
50,291
|
Less than 12 Months
|
12 Months or Longer
|
Total
|
||||||||||||||||||||||||||||||||||
(000's omitted)
|
#
|
Fair
Value
|
Gross
Unrealized
Losses
|
#
|
Fair
Value
|
Gross
Unrealized
Losses
|
#
|
Fair
Value
|
Gross
Unrealized
Losses
|
|||||||||||||||||||||||||||
Available-for-Sale Portfolio:
|
||||||||||||||||||||||||||||||||||||
U.S. Treasury and agency securities
|
69
|
$
|
1,316,113
|
$
|
18,843
|
0
|
$
|
0
|
$
|
0
|
69
|
$
|
1,316,113
|
$
|
18,843
|
|||||||||||||||||||||
Obligations of state and political subdivisions
|
224
|
110,119
|
1,335
|
0
|
0
|
0
|
224
|
110,119
|
1,335
|
|||||||||||||||||||||||||||
Government agency mortgage-backed securities
|
148
|
225,378
|
5,310
|
58
|
75,599
|
4,140
|
206
|
300,977
|
9,450
|
|||||||||||||||||||||||||||
Corporate debt securities
|
1
|
2,579
|
54
|
0
|
0
|
0
|
1
|
2,579
|
54
|
|||||||||||||||||||||||||||
Government agency collateralized mortgage obligations
|
40
|
75,150
|
1,773
|
1
|
1
|
0
|
41
|
75,151
|
1,773
|
|||||||||||||||||||||||||||
Total available-for-sale investment portfolio
|
482
|
$
|
1,729,339
|
$
|
27,315
|
59
|
$
|
75,600
|
$
|
4,140
|
541
|
$
|
1,804,939
|
$
|
31,455
|
Less than 12 Months
|
12 Months or Longer
|
Total
|
||||||||||||||||||||||||||||||||||
(000's omitted)
|
#
|
Fair
Value
|
Gross
Unrealized
Losses
|
#
|
Fair
Value
|
Gross
Unrealized
Losses
|
#
|
Fair
Value
|
Gross
Unrealized
Losses
|
|||||||||||||||||||||||||||
Available-for-Sale Portfolio:
|
||||||||||||||||||||||||||||||||||||
U.S. Treasury and agency securities
|
44
|
$
|
699,709
|
$
|
4,838
|
0
|
$
|
0
|
$
|
0
|
44
|
$
|
699,709
|
$
|
4,838
|
|||||||||||||||||||||
Obligations of state and political subdivisions
|
45
|
23,432
|
57
|
0
|
0
|
0
|
45
|
23,432
|
57
|
|||||||||||||||||||||||||||
Government agency mortgage-backed securities
|
120
|
185,716
|
1,433
|
55
|
75,712
|
2,330
|
175
|
261,428
|
3,763
|
|||||||||||||||||||||||||||
Corporate debt securities
|
1
|
2,623
|
25
|
0
|
0
|
0
|
1
|
2,623
|
25
|
|||||||||||||||||||||||||||
Government agency collateralized mortgage obligations
|
39
|
80,041
|
878
|
1
|
1
|
0
|
40
|
80,042
|
878
|
|||||||||||||||||||||||||||
Total available-for-sale investment portfolio
|
249
|
$
|
991,521
|
$
|
7,231
|
56
|
$
|
75,713
|
$
|
2,330
|
305
|
$
|
1,067,234
|
$
|
9,561
|
Available-for-Sale
|
||||||||
(000's omitted)
|
Amortized
Cost
|
Fair
Value
|
||||||
Due in one year or less
|
$
|
53,102
|
$
|
53,115
|
||||
Due after one through five years
|
1,557,644
|
1,546,876
|
||||||
Due after five years through ten years
|
789,557
|
788,557
|
||||||
Due after ten years
|
149,642
|
152,253
|
||||||
Subtotal
|
2,549,945
|
2,540,801
|
||||||
Government agency mortgage-backed securities
|
371,857
|
364,539
|
||||||
Government agency collateralized mortgage obligations
|
83,113
|
81,429
|
||||||
Total
|
$
|
3,004,915
|
$
|
2,986,769
|
NOTE E: |
LOANS
|
· |
Consumer mortgages consist primarily of fixed rate residential instruments, typically 10 – 30 years in contractual term, secured by first liens on real property.
|
· |
Business lending is comprised of general purpose commercial and industrial loans including, but not limited to, municipal lending, agricultural-related and dealer floor plans, as well as mortgages on commercial properties.
|
· |
Consumer indirect consists primarily of installment loans originated through selected dealerships and are secured by automobiles, marine and other recreational vehicles.
|
· |
Consumer direct consists of all other loans to consumers such as personal installment loans and lines of credit.
|
· |
Home equity products are consumer purpose installment loans or lines of credit most often secured by a first or second lien position on residential real estate with terms up to 30 years.
|
(000's omitted)
|
March 31,
2018
|
December 31,
2017
|
||||||
Business lending
|
$
|
2,426,086
|
$
|
2,424,223
|
||||
Consumer mortgage
|
2,211,882
|
2,220,298
|
||||||
Consumer indirect
|
1,008,198
|
1,011,978
|
||||||
Consumer direct
|
173,032
|
179,929
|
||||||
Home equity
|
407,832
|
420,329
|
||||||
Gross loans, including deferred origination costs
|
6,227,030
|
6,256,757
|
||||||
Allowance for loan losses
|
(48,103
|
)
|
(47,583
|
)
|
||||
Loans, net of allowance for loan losses
|
$
|
6,178,927
|
$
|
6,209,174
|
(000’s omitted)
|
||||
Balance at December 31, 2017
|
$
|
976
|
||
Accretion recognized, year-to-date
|
(278
|
)
|
||
Net reclassification between accretable and non-accretable
|
300
|
|||
Balance at March 31, 2018
|
$
|
998
|
(000’s omitted)
|
Past Due
30 – 89
Days
|
90+ Days Past
Due and
Still Accruing
|
Nonaccrual
|
Total
Past Due
|
Current
|
Total Loans
|
||||||||||||||||||
Business lending
|
$
|
5,062
|
$
|
4,069
|
$
|
3,831
|
$
|
12,962
|
$
|
1,437,044
|
$
|
1,450,006
|
||||||||||||
Consumer mortgage
|
10,236
|
1,437
|
10,086
|
21,759
|
1,744,105
|
1,765,864
|
||||||||||||||||||
Consumer indirect
|
8,664
|
182
|
5
|
8,851
|
981,915
|
990,766
|
||||||||||||||||||
Consumer direct
|
1,091
|
30
|
0
|
1,121
|
167,396
|
168,517
|
||||||||||||||||||
Home equity
|
1,404
|
176
|
1,239
|
2,819
|
313,908
|
316,727
|
||||||||||||||||||
Total
|
$
|
26,457
|
$
|
5,894
|
$
|
15,161
|
$
|
47,512
|
$
|
4,644,368
|
$
|
4,691,880
|
(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
|
|||||||||||||||||||||
Business lending
|
$
|
4,119
|
$
|
0
|
$
|
3,967
|
$
|
8,086
|
$
|
8,496
|
$
|
959,498
|
$
|
976,080
|
||||||||||||||
Consumer mortgage
|
1,991
|
282
|
2,855
|
5,128
|
0
|
440,890
|
446,018
|
|||||||||||||||||||||
Consumer indirect
|
106
|
35
|
0
|
141
|
0
|
17,291
|
17,432
|
|||||||||||||||||||||
Consumer direct
|
105
|
0
|
0
|
105
|
0
|
4,410
|
4,515
|
|||||||||||||||||||||
Home equity
|
522
|
214
|
1,256
|
1,992
|
0
|
89,113
|
91,105
|
|||||||||||||||||||||
Total
|
$
|
6,843
|
$
|
531
|
$
|
8,078
|
$
|
15,452
|
$
|
8,496
|
$
|
1,511,202
|
$
|
1,535,150
|
(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.
|
(000’s omitted)
|
Past Due
30 – 89
Days
|
90+ Days Past
Due and
Still Accruing
|
Nonaccrual
|
Total
Past Due
|
Current
|
Total Loans
|
||||||||||||||||||
Business lending
|
$
|
2,283
|
$
|
571
|
$
|
3,944
|
$
|
6,798
|
$
|
1,369,801
|
$
|
1,376,599
|
||||||||||||
Consumer mortgage
|
13,564
|
1,500
|
10,722
|
25,786
|
1,728,823
|
1,754,609
|
||||||||||||||||||
Consumer indirect
|
14,197
|
295
|
0
|
14,492
|
977,344
|
991,836
|
||||||||||||||||||
Consumer direct
|
1,875
|
48
|
0
|
1,923
|
172,556
|
174,479
|
||||||||||||||||||
Home equity
|
1,116
|
94
|
1,354
|
2,564
|
319,576
|
322,140
|
||||||||||||||||||
Total
|
$
|
33,035
|
$
|
2,508
|
$
|
16,020
|
$
|
51,563
|
$
|
4,568,100
|
$
|
4,619,663
|
(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
|
|||||||||||||||||||||
Business lending
|
$
|
4,661
|
$
|
0
|
$
|
4,328
|
$
|
8,989
|
$
|
10,115
|
$
|
1,028,520
|
$
|
1,047,624
|
||||||||||||||
Consumer mortgage
|
2,603
|
26
|
3,066
|
5,695
|
0
|
459,994
|
465,689
|
|||||||||||||||||||||
Consumer indirect
|
245
|
8
|
0
|
253
|
0
|
19,889
|
20,142
|
|||||||||||||||||||||
Consumer direct
|
100
|
0
|
0
|
100
|
0
|
5,350
|
5,450
|
|||||||||||||||||||||
Home equity
|
634
|
170
|
1,326
|
2,130
|
0
|
96,059
|
98,189
|
|||||||||||||||||||||
Total
|
$
|
8,243
|
$
|
204
|
$
|
8,720
|
$
|
17,167
|
$
|
10,115
|
$
|
1,609,812
|
$
|
1,637,094
|
(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.
|
Pass
|
The condition of the borrower and the performance of the loans are satisfactory or better.
|
Special Mention
|
The condition of the borrower has deteriorated although the loan performs as agreed.
|
Classified
|
The condition of the borrower has significantly deteriorated and the performance of the loan could further deteriorate, if deficiencies are not corrected.
|
Doubtful
|
The condition of the borrower has deteriorated to the point that collection of the balance is improbable based on current facts and conditions.
|
March 31, 2018
|
December 31, 2017
|
|||||||||||||||||||||||
(000’s omitted)
|
Legacy
|
Acquired
|
Total
|
Legacy
|
Acquired
|
Total
|
||||||||||||||||||
Pass
|
$
|
1,253,688
|
$
|
891,639
|
$
|
2,145,327
|
$
|
1,170,156
|
$
|
963,981
|
$
|
2,134,137
|
||||||||||||
Special mention
|
120,881
|
43,034
|
163,915
|
129,076
|
37,321
|
166,397
|
||||||||||||||||||
Classified
|
75,283
|
31,313
|
106,596
|
77,367
|
34,628
|
111,995
|
||||||||||||||||||
Doubtful
|
154
|
1,598
|
1,752
|
0
|
1,579
|
1,579
|
||||||||||||||||||
Acquired impaired
|
0
|
8,496
|
8,496
|
0
|
10,115
|
10,115
|
||||||||||||||||||
Total
|
$
|
1,450,006
|
$
|
976,080
|
$
|
2,426,086
|
$
|
1,376,599
|
$
|
1,047,624
|
$
|
2,424,223
|
(000’s omitted)
|
Consumer
Mortgage
|
Consumer
Indirect
|
Consumer
Direct
|
Home
Equity
|
Total
|
|||||||||||||||
Performing
|
$
|
1,754,341
|
$
|
990,579
|
$
|
168,487
|
$
|
315,312
|
$
|
3,228,719
|
||||||||||
Nonperforming
|
11,523
|
187
|
30
|
1,415
|
13,155
|
|||||||||||||||
Total
|
$
|
1,765,864
|
$
|
990,766
|
$
|
168,517
|
$
|
316,727
|
$
|
3,241,874
|
(000’s omitted)
|
Consumer
Mortgage
|
Consumer
Indirect
|
Consumer
Direct
|
Home
Equity
|
Total
|
|||||||||||||||
Performing
|
$
|
442,881
|
$
|
17,397
|
$
|
4,515
|
$
|
89,635
|
$
|
554,428
|
||||||||||
Nonperforming
|
3,137
|
35
|
0
|
1,470
|
4,642
|
|||||||||||||||
Total
|
$
|
446,018
|
$
|
17,432
|
$
|
4,515
|
$
|
91,105
|
$
|
559,070
|
(000’s omitted)
|
Consumer
Mortgage
|
Consumer
Indirect
|
Consumer
Direct
|
Home
Equity
|
Total
|
|||||||||||||||
Performing
|
$
|
1,742,387
|
$
|
991,541
|
$
|
174,431
|
$
|
320,692
|
$
|
3,229,051
|
||||||||||
Nonperforming
|
12,222
|
295
|
48
|
1,448
|
14,013
|
|||||||||||||||
Total
|
$
|
1,754,609
|
$
|
991,836
|
$
|
174,479
|
$
|
322,140
|
$
|
3,243,064
|
(000’s omitted)
|
Consumer
Mortgage
|
Consumer
Indirect
|
Consumer
Direct
|
Home
Equity
|
Total
|
|||||||||||||||
Performing
|
$
|
462,597
|
$
|
20,134
|
$
|
5,450
|
$
|
96,693
|
$
|
584,874
|
||||||||||
Nonperforming
|
3,092
|
8
|
0
|
1,496
|
4,596
|
|||||||||||||||
Total
|
$
|
465,689
|
$
|
20,142
|
$
|
5,450
|
$
|
98,189
|
$
|
589,470
|
(000’s omitted)
|
March 31,
2018
|
December 31,
2017
|
||||||
Loans with allowance allocation
|
$
|
4,510
|
$
|
5,125
|
||||
Loans without allowance allocation
|
1,422
|
884
|
||||||
Carrying balance
|
5,932
|
6,009
|
||||||
Contractual balance
|
10,146
|
9,165
|
||||||
Specifically allocated allowance
|
878
|
804
|
March 31, 2018
|
December 31, 2017
|
|||||||||||||||||||||||||||||||||||||||||||||||
(000’s omitted)
|
Nonaccrual
|
Accruing
|
Total
|
Nonaccrual
|
Accruing
|
Total
|
||||||||||||||||||||||||||||||||||||||||||
#
|
Amount
|
#
|
Amount
|
#
|
Amount
|
#
|
Amount
|
#
|
Amount
|
#
|
Amount
|
|||||||||||||||||||||||||||||||||||||
Business lending
|
8
|
$
|
312
|
3
|
$
|
280
|
11
|
$
|
592
|
8
|
$
|
218
|
7
|
$
|
501
|
15
|
$
|
719
|
||||||||||||||||||||||||||||||
Consumer mortgage
|
48
|
1,976
|
43
|
1,651
|
91
|
3,627
|
51
|
2,265
|
44
|
1,750
|
95
|
4,015
|
||||||||||||||||||||||||||||||||||||
Consumer indirect
|
0
|
0
|
68
|
847
|
68
|
847
|
0
|
0
|
71
|
883
|
71
|
883
|
||||||||||||||||||||||||||||||||||||
Consumer direct
|
0
|
0
|
23
|
65
|
23
|
65
|
0
|
0
|
25
|
69
|
25
|
69
|
||||||||||||||||||||||||||||||||||||
Home equity
|
11
|
234
|
7
|
201
|
18
|
435
|
13
|
245
|
7
|
204
|
20
|
449
|
||||||||||||||||||||||||||||||||||||
Total
|
67
|
$
|
2,522
|
144
|
$
|
3,044
|
211
|
$
|
5,566
|
72
|
$
|
2,728
|
154
|
$
|
3,407
|
226
|
$
|
6,135
|
Three Months Ended
March 31, 2018
|
Three Months Ended
March 31, 2017
|
|||||||||||||||
(000’s omitted)
|
Number of
loans modified
|
Outstanding
Balance
|
Number of
loans modified
|
Outstanding
Balance
|
||||||||||||
Business lending
|
1
|
$
|
93
|
0
|
$
|
0
|
||||||||||
Consumer mortgage
|
0
|
0
|
7
|
502
|
||||||||||||
Consumer indirect
|
4
|
41
|
8
|
106
|
||||||||||||
Consumer direct
|
2
|
2
|
4
|
15
|
||||||||||||
Home equity
|
0
|
0
|
2
|
98
|
||||||||||||
Total
|
7
|
$
|
136
|
21
|
$
|
721
|
Three Months Ended March 31, 2018
|
||||||||||||||||||||||||||||||||
(000’s omitted)
|
Business
Lending
|
Consumer
Mortgage
|
Consumer
Indirect
|
Consumer
Direct
|
Home
Equity
|
Unallocated
|
Acquired
Impaired
|
Total
|
||||||||||||||||||||||||
Beginning balance
|
$
|
17,257
|
$
|
10,465
|
$
|
13,468
|
$
|
3,039
|
$
|
2,107
|
$
|
1,100
|
$
|
147
|
$
|
47,583
|
||||||||||||||||
Charge-offs
|
(1,669
|
)
|
(199
|
)
|
(2,284
|
)
|
(496
|
)
|
(56
|
)
|
0
|
(43
|
)
|
(4,747
|
)
|
|||||||||||||||||
Recoveries
|
198
|
8
|
1,151
|
222
|
9
|
0
|
0
|
1,588
|
||||||||||||||||||||||||
Provision
|
1,821
|
108
|
1,363
|
219
|
(20
|
)
|
(16
|
)
|
204
|
3,679
|
||||||||||||||||||||||
Ending balance
|
$
|
17,607
|
$
|
10,382
|
$
|
13,698
|
$
|
2,984
|
$
|
2,040
|
$
|
1,084
|
$
|
308
|
$
|
48,103
|
Three Months Ended March 31, 2017
|
||||||||||||||||||||||||||||||||
(000’s omitted)
|
Business
Lending
|
Consumer
Mortgage
|
Consumer
Indirect
|
Consumer
Direct
|
Home
Equity
|
Unallocated
|
Acquired
Impaired
|
Total
|
||||||||||||||||||||||||
Beginning balance
|
$
|
17,220
|
$
|
10,094
|
$
|
13,782
|
$
|
2,979
|
$
|
2,399
|
$
|
651
|
$
|
108
|
$
|
47,233
|
||||||||||||||||
Charge-offs
|
(695
|
)
|
(85
|
)
|
(1,947
|
)
|
(417
|
)
|
(38
|
)
|
0
|
0
|
(3,182
|
)
|
||||||||||||||||||
Recoveries
|
71
|
7
|
869
|
245
|
25
|
0
|
0
|
1,217
|
||||||||||||||||||||||||
Provision
|
261
|
133
|
1,292
|
45
|
(27
|
)
|
122
|
2
|
1,828
|
|||||||||||||||||||||||
Ending balance
|
$
|
16,857
|
$
|
10,149
|
$
|
13,996
|
$
|
2,852
|
$
|
2,359
|
$
|
773
|
$
|
110
|
$
|
47,096
|
NOTE F: |
GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS
|
March 31, 2018
|
December 31, 2017
|
|||||||||||||||||||||||
(000's omitted)
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Net
Carrying
Amount
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Net
Carrying
Amount
|
||||||||||||||||||
Amortizing intangible assets:
|
||||||||||||||||||||||||
Core deposit intangibles
|
$
|
62,902
|
$
|
(39,621
|
)
|
$
|
23,281
|
$
|
62,902
|
$
|
(37,877
|
)
|
$
|
25,025
|
||||||||||
Other intangibles
|
87,372
|
$
|
(23,694
|
)
|
63,678
|
86,535
|
(20,902
|
)
|
65,633
|
|||||||||||||||
Total amortizing intangibles
|
$
|
150,274
|
$
|
(63,315
|
)
|
$
|
86,959
|
$
|
149,437
|
$
|
(58,779
|
)
|
$
|
90,658
|
(000's omitted)
|
||||
Apr - Dec 2018
|
$
|
13,318
|
||
2019
|
15,247
|
|||
2020
|
12,680
|
|||
2021
|
10,817
|
|||
2022
|
9,288
|
|||
Thereafter
|
25,609
|
|||
Total
|
$
|
86,959
|
(000’s omitted)
|
December 31, 2017
|
Activity
|
March 31, 2018
|
|||||||||
Goodwill
|
$
|
739,254
|
$
|
(805
|
)
|
$
|
738,449
|
|||||
Accumulated impairment
|
(4,824
|
)
|
0
|
(4,824
|
)
|
|||||||
Goodwill, net
|
$
|
734,430
|
$
|
(805
|
)
|
$
|
733,625
|
NOTE G: |
MANDATORILY REDEEMABLE PREFERRED SECURITIES
|
Trust
|
Issuance
Date
|
Par
Amount
|
Interest Rate
|
Maturity
Date
|
Call Price
|
|
CST III
|
7/31/2001
|
$24.5 million
|
3 month LIBOR plus 3.58% (5.35%)
|
7/31/2031
|
Par
|
|
CCT IV
|
12/8/2006
|
$75.0 million
|
3 month LIBOR plus 1.65% (3.77%)
|
12/15/2036
|
Par
|
|
MBVT I
|
12/15/2004
|
$20.6 million
|
3 month LIBOR plus 1.95% (4.07%)
|
12/31/2034
|
Par
|
NOTE H:
|
BENEFIT PLANS
|
Pension Benefits
|
Post-retirement Benefits
|
|||||||||||||||
Three Months Ended
March 31,
|
Three Months Ended
March 31,
|
|||||||||||||||
(000's omitted)
|
2018
|
2017
|
2018
|
2017
|
||||||||||||
Service cost
|
$
|
1,121
|
$
|
1,039
|
$
|
0
|
$
|
0
|
||||||||
Interest cost
|
1,415
|
1,361
|
17
|
19
|
||||||||||||
Expected return on plan assets
|
(3,705
|
)
|
(3,121
|
)
|
0
|
0
|
||||||||||
Amortization of unrecognized net loss
|
298
|
263
|
5
|
2
|
||||||||||||
Amortization of prior service cost
|
(83
|
)
|
14
|
(44
|
)
|
(45
|
)
|
|||||||||
Net periodic benefit
|
$
|
(954
|
)
|
$
|
(444
|
)
|
$
|
(22
|
)
|
$
|
(24
|
)
|
NOTE I: |
EARNINGS PER SHARE
|
Three Months Ended
March 31,
|
||||||||
(000's omitted, except per share data)
|
2018
|
2017
|
||||||
Net income
|
$
|
40,106
|
$
|
26,257
|
||||
Income attributable to unvested stock-based compensation awards
|
(141
|
)
|
(138
|
)
|
||||
Income available to common shareholders
|
$
|
39,965
|
$
|
26,119
|
||||
Weighted-average common shares outstanding – basic
|
50,934
|
45,284
|
||||||
Basic earnings per share
|
$
|
0.78
|
$
|
0.58
|
||||
Net income
|
$
|
40,106
|
$
|
26,257
|
||||
Income attributable to unvested stock-based compensation awards
|
(141
|
)
|
(138
|
)
|
||||
Income available to common shareholders
|
$
|
39,965
|
$
|
26,119
|
||||
Weighted-average common shares outstanding – basic
|
50,934
|
45,284
|
||||||
Assumed exercise of stock options
|
563
|
703
|
||||||
Weighted-average common shares outstanding – diluted
|
51,497
|
45,987
|
||||||
Diluted earnings per share
|
$
|
0.78
|
$
|
0.57
|
NOTE J: |
COMMITMENTS, CONTINGENT LIABILITIES AND RESTRICTIONS
|
(000's omitted)
|
March 31,
2018
|
December 31,
2017
|
||||||
Commitments to extend credit
|
$
|
1,095,696
|
$
|
1,080,004
|
||||
Standby letters of credit
|
33,574
|
23,782
|
||||||
Total
|
$
|
1,129,270
|
$
|
1,103,786
|
NOTE K: |
FAIR VALUE
|
·
|
Level 1 -
|
Quoted prices in active markets for identical assets or liabilities.
|
·
|
Level 2 -
|
Quoted prices in active markets for similar assets or liabilities, or quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability.
|
·
|
Level 3 -
|
Significant valuation assumptions not readily observable in a market.
|
March 31, 2018
|
||||||||||||||||
(000's omitted)
|
Level 1
|
Level 2
|
Level 3
|
Total Fair
Value
|
||||||||||||
Available-for-sale investment securities:
|
||||||||||||||||
U.S. Treasury and agency securities
|
$
|
1,885,015
|
$
|
142,899
|
$
|
0
|
$
|
2,027,914
|
||||||||
Obligations of state and political subdivisions
|
0
|
510,308
|
0
|
510,308
|
||||||||||||
Government agency mortgage-backed securities
|
0
|
364,539
|
0
|
364,539
|
||||||||||||
Corporate debt securities
|
0
|
2,579
|
0
|
2,579
|
||||||||||||
Government agency collateralized mortgage obligations
|
0
|
81,429
|
0
|
81,429
|
||||||||||||
Marketable equity securities
|
521
|
0
|
0
|
521
|
||||||||||||
Total available-for-sale investment securities
|
1,885,536
|
1,101,754
|
0
|
2,987,290
|
||||||||||||
Mortgage loans held for sale
|
0
|
628
|
0
|
628
|
||||||||||||
Commitments to originate real estate loans for sale
|
0
|
0
|
55
|
55
|
||||||||||||
Forward sales commitments
|
0
|
10
|
0
|
10
|
||||||||||||
Interest rate swap agreements asset
|
0
|
937
|
0
|
937
|
||||||||||||
Interest rate swap agreements liability
|
0
|
(893
|
)
|
0
|
(893
|
)
|
||||||||||
Total
|
$
|
1,885,536
|
$
|
1,102,436
|
$
|
55
|
$
|
2,988,027
|
December 31, 2017
|
||||||||||||||||
(000's omitted)
|
Level 1
|
Level 2
|
Level 3
|
Total Fair
Value
|
||||||||||||
Available-for-sale investment securities:
|
||||||||||||||||
U.S. Treasury and agency securities
|
$
|
1,909,290
|
$
|
144,781
|
$
|
0
|
$
|
2,054,071
|
||||||||
Obligations of state and political subdivisions
|
0
|
528,956
|
0
|
528,956
|
||||||||||||
Government agency mortgage-backed securities
|
0
|
357,538
|
0
|
357,538
|
||||||||||||
Corporate debt securities
|
0
|
2,623
|
0
|
2,623
|
||||||||||||
Government agency collateralized mortgage obligations
|
0
|
87,374
|
0
|
87,374
|
||||||||||||
Marketable equity securities
|
526
|
0
|
0
|
526
|
||||||||||||
Total available-for-sale investment securities
|
1,909,816
|
1,121,272
|
0
|
3,031,088
|
||||||||||||
Mortgage loans held for sale
|
0
|
461
|
0
|
461
|
||||||||||||
Commitments to originate real estate loans for sale
|
0
|
0
|
89
|
89
|
||||||||||||
Forward sales commitments
|
0
|
4
|
0
|
4
|
||||||||||||
Interest rate swap agreements asset
|
0
|
1,064
|
0
|
1,064
|
||||||||||||
Interest rate swap agreements liability
|
0
|
(904
|
)
|
0
|
(904
|
)
|
||||||||||
Total
|
$
|
1,909,816
|
$
|
1,121,897
|
$
|
89
|
$
|
3,031,802
|
· |
Available-for-sale investment securities – The fair values of available-for-sale investment securities are based upon quoted prices, if available. If quoted prices are not available, fair values are measured using quoted market prices for similar securities or model-based valuation techniques. Level 1 securities include U.S. Treasury obligations and marketable equity securities that are traded by dealers or brokers in active over-the-counter markets. Level 2 securities include U.S. agency securities, mortgage-backed securities issued by government-sponsored entities, municipal securities and corporate debt securities that are valued by reference to prices for similar securities or through model-based techniques in which all significant inputs, such as reported trades, trade execution data, LIBOR swap yield curve, market prepayment speeds, credit information, market spreads, and security’s terms and conditions, are observable. See Note D for further disclosure of the fair value of investment securities.
|
· |
Mortgage loans held for sale –The Company has elected to value loans held for sale at fair value in order to more closely match the gains and losses associated with loans held for sale with the gains and losses on forward sales contracts. Accordingly, the impact on the valuation will be recognized in the Company’s consolidated statement of income. All mortgage loans held for sale are current and in performing status. The fair value of mortgage loans held for sale is determined using quoted secondary-market prices of loans with similar characteristics and, as such, has been classified as a Level 2 valuation. The unpaid principal value of mortgage loans held for sale at March 31, 2018 was approximately $0.6 million. The unrealized gain on mortgage loans held for sale was recognized in mortgage banking and other income in the consolidated statement and is immaterial.
|
· |
Forward sales commitments – The Company enters into forward sales commitments to sell certain residential real estate loans. Such commitments are considered to be derivative financial instruments and, therefore, are carried at estimated fair value in the other asset or other liability section of the consolidated statement of condition. The fair value of these forward sales commitments is primarily measured by obtaining pricing from certain government-sponsored entities and reflects the underlying price the entity would pay the Company for an immediate sale on these mortgages. As such, these instruments are classified as Level 2 in the fair value hierarchy.
|
· |
Commitments to originate real estate loans for sale – The Company enters into various commitments to originate residential real estate loans for sale. Such commitments are considered to be derivative financial instruments and, therefore, are carried at estimated fair value in the other asset or other liability section of the consolidated statement of condition. The estimated fair value of these commitments is determined using quoted secondary market prices obtained from certain government-sponsored entities. Additionally, accounting guidance requires the expected net future cash flows related to the associated servicing of the loan to be included in the fair value measurement of the derivative. The expected net future cash flows are based on a valuation model that calculates the present value of estimated net servicing income. The valuation model incorporates assumptions that market participants would use in estimating future net servicing income. Such assumptions include estimates of the cost of servicing loans, appropriate discount rate and prepayment speeds. The determination of expected net cash flows is considered a significant unobservable input contributing to the Level 3 classification of commitments to originate real estate loans for sale.
|
· |
Interest rate swaps – The interest rate swaps are reported at their fair value utilizing Level 2 inputs from third parties. The fair value of the interest rate swaps are determined using prices obtained from a third party advisor. The fair value measurement of the interest rate swap is determined by netting the discounted future fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts are based on the expectation of future interest rates derived from observed market interest rate curves.
|
March 31, 2018
|
December 31, 2017
|
|||||||||||||||||||||||||||||||
(000's omitted)
|
Level 1
|
Level 2
|
Level 3
|
Total Fair
Value
|
Level 1
|
Level 2
|
Level 3
|
Total Fair
Value
|
||||||||||||||||||||||||
Other real estate owned / Total
|
$
|
0
|
$
|
0
|
$
|
1,865
|
$
|
1,865
|
$
|
0
|
$
|
0
|
$
|
1,915
|
$
|
1,915
|
(000's omitted)
|
Fair Value at
March 31, 2018
|
Valuation Technique
|
Significant Unobservable Inputs
|
Significant
Unobservable Input
Range
(Weighted Average)
|
||||||
Other real estate owned
|
$
|
1,865
|
Fair Value of Collateral
|
Estimated cost of disposal/market adjustment
|
0.8% - 82.5% (35.3
|
%)
|
||||
Commitments to originate real estate loans for sale
|
55
|
Discounted cash flow
|
Embedded servicing value
|
1
|
%
|
(000's omitted)
|
Fair Value at
December 31, 2017
|
Valuation Technique
|
Significant Unobservable Inputs
|
Significant
Unobservable Input
Range
(Weighted Average)
|
||||||
Other real estate owned
|
$
|
1,915
|
Fair value of collateral
|
Estimated cost of disposal/market adjustment
|
9.0% - 99.0% (38.5
|
%)
|
||||
Commitments to originate real estate loans for sale
|
89
|
Discounted cash flow
|
Embedded servicing value
|
1
|
%
|
March 31, 2018
|
December 31, 2017
|
|||||||||||||||
(000's omitted)
|
Carrying
Value
|
Fair
Value
|
Carrying
Value
|
Fair
Value
|
||||||||||||
Financial assets:
|
||||||||||||||||
Net loans
|
$
|
6,178,927
|
$
|
6,154,483
|
$
|
6,209,174
|
$
|
6,244,941
|
||||||||
Financial liabilities:
|
||||||||||||||||
Deposits
|
8,771,092
|
8,754,350
|
8,444,420
|
8,431,481
|
||||||||||||
Short-term borrowings
|
0
|
0
|
24,000
|
24,000
|
||||||||||||
Securities sold under agreement to repurchase, short-term
|
279,702
|
279,702
|
337,011
|
337,011
|
||||||||||||
Other long-term debt
|
2,042
|
1,971
|
2,071
|
2,021
|
||||||||||||
Subordinated debt held by unconsolidated subsidiary trusts
|
122,820
|
122,820
|
122,814
|
122,814
|
NOTE L:
|
DERIVATIVE INSTRUMENTS
|
NOTE M:
|
SEGMENT INFORMATION
|
(000's omitted)
|
Banking
|
Employee
Benefit Services
|
All Other
|
Eliminations
|
Consolidated
Total
|
|||||||||||||||
Three Months Ended March 31, 2018
|
||||||||||||||||||||
Net interest income
|
$
|
84,530
|
$
|
70
|
$
|
24
|
$
|
0
|
$
|
84,624
|
||||||||||
Provision for loan losses
|
3,679
|
0
|
0
|
0
|
3,679
|
|||||||||||||||
Noninterest revenues
|
20,357
|
23,449
|
14,380
|
(695
|
)
|
57,491
|
||||||||||||||
Amortization of intangible assets
|
1,744
|
2,088
|
966
|
0
|
4,798
|
|||||||||||||||
Acquisition expenses
|
(15
|
)
|
7
|
0
|
0
|
(8
|
)
|
|||||||||||||
Other operating expenses
|
56,955
|
13,709
|
11,572
|
(695
|
)
|
81,541
|
||||||||||||||
Income before income taxes
|
$
|
42,524
|
$
|
7,715
|
$
|
1,866
|
$
|
0
|
$
|
52,105
|
||||||||||
Assets
|
$
|
10,736,383
|
$
|
205,544
|
$
|
68,167
|
$
|
(43,539
|
)
|
$
|
10,966,555
|
|||||||||
Goodwill
|
$
|
629,916
|
$
|
83,275
|
$
|
20,434
|
$
|
0
|
$
|
733,625
|
||||||||||
Three Months Ended March 31, 2017
|
||||||||||||||||||||
Net interest income
|
$
|
67,134
|
$
|
78
|
$
|
62
|
$
|
0
|
$
|
67,274
|
||||||||||
Provision for loan losses
|
1,828
|
0
|
0
|
0
|
1,828
|
|||||||||||||||
Noninterest revenues
|
15,867
|
17,636
|
11,479
|
(664
|
)
|
44,318
|
||||||||||||||
Amortization of intangible assets
|
554
|
1,591
|
623
|
0
|
2,768
|
|||||||||||||||
Acquisition expenses
|
521
|
1,062
|
133
|
0
|
1,716
|
|||||||||||||||
Other operating expenses
|
49,493
|
11,370
|
8,892
|
(664
|
)
|
69,091
|
||||||||||||||
Income before income taxes
|
$
|
30,605
|
$
|
3,691
|
$
|
1,893
|
$
|
0
|
$
|
36,189
|
||||||||||
Assets
|
$
|
8,663,042
|
$
|
221,437
|
$
|
72,526
|
$
|
(43,145
|
)
|
$
|
8,913,860
|
|||||||||
Goodwill
|
$
|
440,870
|
$
|
84,213
|
$
|
17,903
|
$
|
0
|
$
|
542,986
|
NOTE N:
|
REVENUE RECOGNITION
|
· |
Acquired loans – Acquired loans are initially recorded at their acquisition date fair values based on a discounted cash flow methodology that involves assumptions and judgments as to credit risk, prepayment risk, liquidity risk, default rates, loss severity, payment speeds, collateral values, and discount rate.
|
· |
Allowance for loan losses – The allowance for loan losses reflects management’s best estimate of probable loan losses in the Company’s loan portfolio. Determination of the allowance for loan losses is inherently subjective. It requires significant estimates, including the amounts and timing of expected future cash flows on impaired loans, appraisal values of underlying collateral for collateralized loans, and the amount of estimated losses on pools of homogeneous loans which is based on historical loss experience and consideration of current economic trends, all of which may be susceptible to significant change.
|
· |
Investment securities – Investment securities are classified as held-to-maturity, available-for-sale, or trading. The appropriate classification is based partially on the Company’s ability to hold the securities to maturity and largely on management’s intentions with respect to either holding or selling the securities. The classification of investment securities is significant since it directly impacts the accounting for unrealized gains and losses on securities. Unrealized gains and losses on available-for-sale securities are recorded in accumulated other comprehensive income or loss, as a separate component of shareholders’ equity, and do not affect earnings until realized. The fair values of investment securities are generally determined by reference to quoted market prices, where available. If quoted market prices are not available, fair values are based on quoted market prices of comparable instruments, or a discounted cash flow model using market estimates of interest rates and volatility. Investment securities with significant declines in fair value are evaluated to determine whether they should be considered other-than-temporarily impaired (“OTTI”). An unrealized loss is generally deemed to be other-than-temporary and a credit loss is deemed to exist if the present value of the expected future cash flows is less than the amortized cost basis of the debt security. The credit loss component of an OTTI write-down is recorded in earnings, while the remaining portion of the impairment loss is recognized in other comprehensive income (loss), provided the Company does not intend to sell the underlying debt security, and it is not more likely than not that the Company will be required to sell the debt security prior to recovery of the full value of its amortized cost basis.
|
· |
Retirement benefits – The Company provides defined benefit pension benefits to eligible employees and post-retirement health and life insurance benefits to certain eligible retirees. The Company also provides deferred compensation and supplemental executive retirement plans for selected current and former employees. Expense under these plans is charged to current operations and consists of several components of net periodic benefit cost based on various actuarial assumptions regarding future experience under the plans, including, but not limited to, discount rate, rate of future compensation increases, mortality rates, future health care costs, and the expected return on plan assets.
|
· |
Intangible assets – As a result of acquisitions, the Company carries goodwill and identifiable intangible assets. Goodwill represents the cost of acquired companies in excess of the fair value of net assets at the acquisition date. Goodwill is evaluated at least annually, or when business conditions suggest impairment may have occurred. Should impairment occur, goodwill will be reduced to its carrying value through a charge to earnings. Core deposits and other identifiable intangible assets are amortized to expense over their estimated useful lives. The determination of whether or not impairment exists is based upon discounted cash flow modeling techniques that require management to make estimates regarding the amount and timing of expected future cash flows. It also requires them to select a discount rate that reflects the current return requirements of the market in relation to current credit risk-free interest rates, required equity market premiums, and company-specific performance and risk metrics, all of which are susceptible to change based on changes in economic and market conditions and other factors. Future events or changes in the estimates used to determine the carrying value of goodwill and identifiable intangible assets could have a material impact on the Company’s results of operations.
|
Three Months Ended
|
||||||||
March 31,
|
||||||||
(000's omitted, except per share data)
|
2018
|
2017
|
||||||
Net interest income
|
$
|
84,624
|
$
|
67,274
|
||||
Provision for loan losses
|
3,679
|
1,828
|
||||||
Noninterest revenues
|
57,491
|
44,318
|
||||||
Noninterest expenses
|
86,331
|
73,575
|
||||||
Income before income taxes
|
52,105
|
36,189
|
||||||
Income taxes
|
11,999
|
9,932
|
||||||
Net income
|
$
|
40,106
|
$
|
26,257
|
||||
Diluted weighted average common shares outstanding
|
51,677
|
46,227
|
||||||
Diluted earnings per share
|
$
|
0.78
|
$
|
0.57
|
Three Months Ended
March 31, 2018
|
Three Months Ended
March 31, 2017
|
|||||||||||||||||||||||
(000's omitted except yields and rates)
|
Average
Balance
|
Interest
|
Avg.
Yield/Rate
Paid
|
Average
Balance
|
Interest
|
Avg.
Yield/Rate
Paid
|
||||||||||||||||||
Interest-earning assets:
|
||||||||||||||||||||||||
Cash equivalents
|
$
|
90,406
|
$
|
344
|
1.54
|
%
|
$
|
40,209
|
$
|
79
|
0.79
|
%
|
||||||||||||
Taxable investment securities (1)
|
2,583,446
|
15,181
|
2.38
|
%
|
2,203,175
|
13,487
|
2.48
|
%
|
||||||||||||||||
Nontaxable investment securities (1)
|
468,773
|
4,349
|
3.76
|
%
|
540,518
|
6,161
|
4.62
|
%
|
||||||||||||||||
Loans (net of unearned discount)(2)
|
6,237,824
|
69,648
|
4.53
|
%
|
4,939,092
|
52,541
|
4.31
|
%
|
||||||||||||||||
Total interest-earning assets
|
9,380,449
|
89,522
|
3.87
|
%
|
7,722,994
|
72,268
|
3.80
|
%
|
||||||||||||||||
Noninterest-earning assets
|
1,335,080
|
1,024,272
|
||||||||||||||||||||||
Total assets
|
$
|
10,715,529
|
$
|
8,747,266
|
||||||||||||||||||||
Interest-bearing liabilities:
|
||||||||||||||||||||||||
Interest checking, savings, and money market deposits
|
$
|
5,453,004
|
1,322
|
0.10
|
%
|
$
|
4,847,582
|
1,028
|
0.09
|
%
|
||||||||||||||
Time deposits
|
766,048
|
810
|
0.43
|
%
|
695,464
|
702
|
0.41
|
%
|
||||||||||||||||
Customer repurchase agreements
|
306,144
|
389
|
0.52
|
%
|
0
|
0
|
0.00
|
%
|
||||||||||||||||
FHLB borrowings
|
24,154
|
91
|
1.53
|
%
|
75,414
|
149
|
0.80
|
%
|
||||||||||||||||
Subordinated debt held by unconsolidated subsidiary trusts
|
122,816
|
1,168
|
3.86
|
%
|
102,173
|
805
|
3.20
|
%
|
||||||||||||||||
Total interest-bearing liabilities
|
6,672,166
|
3,780
|
0.23
|
%
|
5,720,633
|
2,684
|
0.19
|
%
|
||||||||||||||||
Noninterest-bearing liabilities:
|
||||||||||||||||||||||||
Noninterest checking deposits
|
2,268,778
|
1,620,473
|
||||||||||||||||||||||
Other liabilities
|
148,634
|
149,272
|
||||||||||||||||||||||
Shareholders' equity
|
1,625,951
|
1,256,888
|
||||||||||||||||||||||
Total liabilities and shareholders' equity
|
$
|
10,715,529
|
$
|
8,747,266
|
||||||||||||||||||||
Net interest earnings
|
$
|
85,742
|
$
|
69,584
|
||||||||||||||||||||
Net interest spread
|
3.64
|
%
|
3.61
|
%
|
||||||||||||||||||||
Net interest margin on interest-earning assets
|
3.71
|
%
|
3.65
|
%
|
||||||||||||||||||||
Fully tax-equivalent adjustment
|
$
|
1,118
|
$
|
2,310
|
(1) |
Averages for investment securities are based on historical cost basis and the yields do not give effect to changes in fair value that is reflected as a component of noninterest-earning assets, shareholders’ equity, and deferred taxes.
|
(2) |
Includes nonaccrual loans. The impact of interest and fees not recognized on nonaccrual loans was immaterial.
|
Three months ended March 31, 2018
versus March 31, 2017
Increase (Decrease) Due to Change in (1)
|
||||||||||||
(000's omitted)
|
Volume
|
Rate
|
Net
Change
|
|||||||||
Interest earned on:
|
||||||||||||
Cash equivalents
|
$
|
150
|
$
|
115
|
$
|
265
|
||||||
Taxable investment securities
|
2,253
|
(559
|
)
|
1,694
|
||||||||
Nontaxable investment securities
|
(778
|
)
|
(1,034
|
)
|
(1,812
|
)
|
||||||
Loans
|
14,391
|
2,716
|
17,107
|
|||||||||
Total interest-earning assets (2)
|
15,764
|
1,490
|
17,254
|
|||||||||
Interest paid on:
|
||||||||||||
Interest checking, savings and money market deposits
|
137
|
157
|
294
|
|||||||||
Time deposits
|
73
|
35
|
108
|
|||||||||
Customer repurchase agreements
|
389
|
0
|
389
|
|||||||||
FHLB borrowings
|
(140
|
)
|
82
|
(58
|
)
|
|||||||
Subordinated debt held by unconsolidated subsidiary trusts
|
179
|
184
|
363
|
|||||||||
Total interest-bearing liabilities (2)
|
488
|
608
|
1,096
|
|||||||||
Net interest earnings (2)
|
15,110
|
1,048
|
16,158
|
(1) |
The change in interest due to both rate and volume has been allocated to volume and rate changes in proportion to the relationship of the absolute dollar amounts of such change in each component.
|
(2) |
Changes due to volume and rate are computed from the respective changes in average balances and rates of the totals; they are not a summation of the changes of the components.
|
Three Months Ended
|
||||||||
March 31,
|
||||||||
(000's omitted)
|
2018
|
2017
|
||||||
Deposit service fees
|
$
|
19,177
|
$
|
14,707
|
||||
Employee benefit services
|
23,006
|
17,189
|
||||||
Wealth management services
|
6,706
|
4,861
|
||||||
Insurance revenues
|
7,359
|
6,400
|
||||||
Other banking services
|
905
|
787
|
||||||
Mortgage banking
|
338
|
372
|
||||||
Subtotal
|
57,491
|
44,316
|
||||||
Gain on sales of investment securities, net
|
0
|
2
|
||||||
Total noninterest revenues
|
$
|
57,491
|
$
|
44,318
|
||||
Noninterest revenues/operating revenues (FTE basis) (1)
|
40.7
|
%
|
39.1
|
%
|
(1) For purposes of this ratio noninterest revenues exclude gains and losses on sales of investment securities. Operating revenues, a non-GAAP measure, is defined as net interest income on a fully-tax equivalent basis plus noninterest revenue, excluding gains and losses on sales of investment securities, and acquired non-impaired loan accretion. See Table 11 for Reconciliation of GAAP to Non-GAAP Measures.
|
Three Months Ended
|
||||||||
March 31,
|
||||||||
(000's omitted)
|
2018
|
2017
|
||||||
Salaries and employee benefits(1)
|
$
|
51,859
|
$
|
42,907
|
||||
Occupancy and equipment
|
10,531
|
8,196
|
||||||
Data processing and communications
|
8,742
|
8,521
|
||||||
Amortization of intangible assets
|
4,798
|
2,768
|
||||||
Legal and professional fees
|
2,781
|
2,414
|
||||||
Office supplies and postage
|
1,879
|
1,674
|
||||||
Business development and marketing
|
2,059
|
2,081
|
||||||
FDIC insurance premiums
|
752
|
753
|
||||||
Acquisition expenses
|
(8
|
)
|
1,716
|
|||||
Other(1)
|
2,938
|
2,545
|
||||||
Total noninterest expenses
|
$
|
86,331
|
$
|
73,575
|
||||
Operating expenses(2)/average assets
|
3.09
|
%
|
3.20
|
%
|
||||
Efficiency ratio(3)
|
57.8
|
%
|
60.9
|
%
|
(1) |
In accordance with ASU No. 2017-07, Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, $1.5 million of income from components of net periodic benefit income other than service cost were reclassified from Salaries and employee benefits to Other noninterest expenses for the three months ended March 31, 2017.
|
(2) |
Operating expenses, a non-GAAP measure, is calculated as total noninterest expenses less acquisition expenses and amortization of intangibles. See Table 11 for Reconciliation of GAAP to Non-GAAP Measures.
|
(3) |
Efficiency ratio, a non-GAAP measure, is calculated as operating expenses as defined in (1) divided by net interest income on a fully tax-equivalent basis excluding acquired non-impaired loan accretion plus noninterest revenues excluding gains and losses on investment sales. See Table 11 for Reconciliation of GAAP to Non-GAAP Measures.
|
March 31, 2018
|
December 31, 2017
|
March 31, 2017
|
||||||||||||||||||||||
(000's omitted)
|
Amortized
Cost
|
Fair
Value
|
Amortized
Cost
|
Fair
Value
|
Amortized
Cost
|
Fair
Value
|
||||||||||||||||||
Available-for-Sale Portfolio:
|
||||||||||||||||||||||||
U.S. Treasury and agency securities
|
$
|
2,044,795
|
$
|
2,027,914
|
$
|
2,043,023
|
$
|
2,054,071
|
$
|
1,878,982
|
$
|
1,908,234
|
||||||||||||
Obligations of state and political subdivisions
|
502,517
|
510,308
|
514,949
|
528,956
|
564,501
|
578,658
|
||||||||||||||||||
Government agency mortgage-backed securities
|
371,857
|
364,539
|
358,180
|
357,538
|
237,257
|
239,054
|
||||||||||||||||||
Corporate debt securities
|
2,633
|
2,579
|
2,648
|
2,623
|
5,697
|
5,681
|
||||||||||||||||||
Government agency collateralized mortgage obligations
|
83,113
|
81,429
|
88,097
|
87,374
|
8,516
|
8,809
|
||||||||||||||||||
Marketable equity securities
|
250
|
521
|
251
|
526
|
251
|
454
|
||||||||||||||||||
Total available-for-sale portfolio
|
3,005,165
|
2,987,290
|
3,007,148
|
3,031,088
|
2,695,204
|
2,740,890
|
||||||||||||||||||
Other Securities:
|
||||||||||||||||||||||||
Federal Home Loan Bank common stock
|
8,801
|
8,801
|
9,896
|
9,896
|
5,590
|
5,590
|
||||||||||||||||||
Federal Reserve Bank common stock
|
30,690
|
30,690
|
30,690
|
30,690
|
19,781
|
19,781
|
||||||||||||||||||
Certificates of deposit
|
0
|
0
|
3,865
|
3,865
|
18,758
|
18,758
|
||||||||||||||||||
Other equity securities
|
5,861
|
5,861
|
5,840
|
5,840
|
3,699
|
3,699
|
||||||||||||||||||
Total other securities
|
45,352
|
45,352
|
50,291
|
50,291
|
47,828
|
47,828
|
||||||||||||||||||
Total investments
|
$
|
3,050,517
|
$
|
3,032,642
|
$
|
3,057,439
|
$
|
3,081,379
|
$
|
2,743,032
|
$
|
2,788,718
|
(000's omitted)
|
March 31, 2018
|
December 31, 2017
|
March 31, 2017
|
|||||||||||||||||||||
Business lending
|
$
|
2,426,086
|
39.0
|
%
|
$
|
2,424,223
|
38.7
|
%
|
$
|
1,468,465
|
29.8
|
%
|
||||||||||||
Consumer mortgage
|
2,211,882
|
35.5
|
%
|
2,220,298
|
35.5
|
%
|
1,830,800
|
37.1
|
%
|
|||||||||||||||
Consumer indirect
|
1,008,198
|
16.2
|
%
|
1,011,978
|
16.2
|
%
|
1,055,112
|
21.4
|
%
|
|||||||||||||||
Consumer direct
|
173,032
|
2.8
|
%
|
179,929
|
2.9
|
%
|
184,067
|
3.7
|
%
|
|||||||||||||||
Home equity
|
407,832
|
6.5
|
%
|
420,329
|
6.7
|
%
|
393,769
|
8.0
|
%
|
|||||||||||||||
Total loans
|
$
|
6,227,030
|
100.0
|
%
|
$
|
6,256,757
|
100.0
|
%
|
$
|
4,932,213
|
100.0
|
%
|
(000's omitted)
|
March 31,
2018
|
December 31,
2017
|
March 31,
2017
|
|||||||||
Nonaccrual loans
|
||||||||||||
Business lending
|
$
|
7,798
|
$
|
8,272
|
$
|
4,688
|
||||||
Consumer mortgage
|
12,941
|
13,788
|
13,573
|
|||||||||
Consumer indirect
|
5
|
0
|
0
|
|||||||||
Consumer direct
|
0
|
0
|
0
|
|||||||||
Home equity
|
2,495
|
2,680
|
1,805
|
|||||||||
Total nonaccrual loans
|
23,239
|
24,740
|
20,066
|
|||||||||
Accruing loans 90+ days delinquent
|
||||||||||||
Business lending
|
4,069
|
571
|
569
|
|||||||||
Consumer mortgage
|
1,719
|
1,526
|
853
|
|||||||||
Consumer indirect
|
217
|
303
|
126
|
|||||||||
Consumer direct
|
30
|
48
|
79
|
|||||||||
Home equity
|
390
|
264
|
1,182
|
|||||||||
Total accruing loans 90+ days delinquent
|
6,425
|
2,712
|
2,809
|
|||||||||
Nonperforming loans
|
||||||||||||
Business lending
|
11,867
|
8,843
|
5,257
|
|||||||||
Consumer mortgage
|
14,660
|
15,314
|
14,426
|
|||||||||
Consumer indirect
|
222
|
303
|
126
|
|||||||||
Consumer direct
|
30
|
48
|
79
|
|||||||||
Home equity
|
2,885
|
2,944
|
2,987
|
|||||||||
Total nonperforming loans
|
29,664
|
27,452
|
22,875
|
|||||||||
Other real estate owned (OREO)
|
1,865
|
1,915
|
2,486
|
|||||||||
Total nonperforming assets
|
$
|
31,529
|
$
|
29,367
|
$
|
25,361
|
||||||
Nonperforming loans / total loans
|
0.48
|
%
|
0.44
|
%
|
0.46
|
%
|
||||||
Nonperforming assets / total loans and other real estate
|
0.51
|
%
|
0.47
|
%
|
0.51
|
%
|
||||||
Delinquent loans (30 days old to nonaccruing) to total loans
|
1.01
|
%
|
1.10
|
%
|
0.94
|
%
|
||||||
Net charge-offs to average loans outstanding (quarterly)
|
0.21
|
%
|
0.37
|
%
|
0.16
|
%
|
||||||
Legacy net charge-offs to average legacy loans outstanding (quarterly)
|
0.16
|
%
|
0.20
|
%
|
0.17
|
%
|
||||||
Provision for loan losses to net charge-offs (quarterly)
|
116
|
%
|
93
|
%
|
93
|
%
|
||||||
Legacy provision for loan losses to net charge-offs (quarterly) (1)
|
122
|
%
|
67
|
%
|
85
|
%
|
Three Months Ended
|
||||||||
March 31,
|
||||||||
(000's omitted)
|
2018
|
2017
|
||||||
Allowance for loan losses at beginning of period
|
$
|
47,583
|
$
|
47,233
|
||||
Charge-offs:
|
||||||||
Business lending
|
1,712
|
695
|
||||||
Consumer mortgage
|
199
|
85
|
||||||
Consumer indirect
|
2,284
|
1,947
|
||||||
Consumer direct
|
496
|
417
|
||||||
Home equity
|
56
|
38
|
||||||
Total charge-offs
|
4,747
|
3,182
|
||||||
Recoveries:
|
||||||||
Business lending
|
198
|
71
|
||||||
Consumer mortgage
|
8
|
7
|
||||||
Consumer indirect
|
1,151
|
869
|
||||||
Consumer direct
|
222
|
245
|
||||||
Home equity
|
9
|
25
|
||||||
Total recoveries
|
1,588
|
1,217
|
||||||
Net charge-offs
|
3,159
|
1,965
|
||||||
Provision for loans losses
|
3,679
|
1,828
|
||||||
Allowance for loan losses at end of period
|
$
|
48,103
|
$
|
47,096
|
||||
Allowance for loan losses / total loans
|
0.77
|
%
|
0.95
|
%
|
||||
Allowance for legacy loan losses / total legacy loans (1)
|
0.97
|
%
|
1.01
|
%
|
||||
Allowance for loan losses / nonperforming loans
|
162
|
%
|
206
|
%
|
||||
Allowance for legacy loan losses / legacy nonperforming loans (1)
|
216
|
%
|
266
|
%
|
||||
Net charge-offs (annualized) to average loans outstanding:
|
||||||||
Business lending
|
0.25
|
%
|
0.17
|
%
|
||||
Consumer mortgage
|
0.03
|
%
|
0.02
|
%
|
||||
Consumer indirect
|
0.46
|
%
|
0.42
|
%
|
||||
Consumer direct
|
0.62
|
%
|
0.36
|
%
|
||||
Home equity
|
0.05
|
%
|
0.01
|
%
|
||||
Total loans
|
0.21
|
%
|
0.16
|
%
|
(1) |
Legacy loans exclude loans acquired after January 1, 2009. These ratios are included for comparative purposes to prior periods.
|
(000's omitted)
|
March 31,
2018
|
December 31,
2017
|
|
March 31,
2017
|
||||||||
Noninterest checking deposits
|
$
|
2,268,778
|
$
|
2,307,155
|
$
|
1,620,473
|
||||||
Interest checking deposits
|
1,870,277
|
1,823,552
|
1,694,645
|
|||||||||
Regular savings deposits
|
1,444,871
|
1,419,703
|
1,320,691
|
|||||||||
Money market deposits
|
2,137,856
|
2,181,141
|
1,832,246
|
|||||||||
Time deposits
|
766,048
|
782,267
|
695,464
|
|||||||||
Total deposits
|
$
|
8,487,830
|
$
|
8,513,818
|
$
|
7,163,519
|
||||||
Nonpublic fund deposits
|
$
|
7,366,222
|
$
|
7,451,849
|
$
|
6,108,961
|
||||||
Public fund deposits
|
1,121,608
|
1,061,969
|
1,054,558
|
|||||||||
Total deposits
|
$
|
8,487,830
|
$
|
8,513,818
|
$
|
7,163,519
|
Three Months Ended
|
||||||||
March 31,
|
||||||||
(000's omitted)
|
2018
|
2017
|
||||||
Income statement data
|
||||||||
Net income
|
||||||||
Net income (GAAP)
|
$
|
40,106
|
$
|
26,257
|
||||
Acquisition expenses
|
(8
|
)
|
1,716
|
|||||
Tax effect of acquisition expenses
|
2
|
(471
|
)
|
|||||
Subtotal (non-GAAP)
|
40,100
|
27,502
|
||||||
Amortization of intangibles
|
4,798
|
2,768
|
||||||
Tax effect of amortization of intangibles
|
(1,105
|
)
|
(760
|
)
|
||||
Subtotal (non-GAAP)
|
43,793
|
29,510
|
||||||
Acquired non-impaired loan accretion
|
(2,063
|
)
|
(437
|
)
|
||||
Tax effect of acquired non-impaired loan accretion
|
475
|
120
|
||||||
Adjusted net income (non-GAAP)
|
$
|
42,205
|
$
|
29,193
|
||||
Return on average assets
|
||||||||
Adjusted net income (non-GAAP)
|
$
|
42,205
|
$
|
29,193
|
||||
Average total assets
|
10,715,529
|
8,747,266
|
||||||
Adjusted return on average assets (non-GAAP)
|
1.60
|
%
|
1.35
|
%
|
||||
Return on average equity
|
||||||||
Adjusted net income (non-GAAP)
|
$
|
42,205
|
$
|
29,193
|
||||
Average total equity
|
1,625,951
|
1,256,888
|
||||||
Adjusted return on average equity (non-GAAP)
|
10.53
|
%
|
9.42
|
%
|
||||
Earnings per common share
|
||||||||
Diluted earnings per share (GAAP)
|
$
|
0.78
|
$
|
0.57
|
||||
Acquisition expenses
|
0.00
|
0.04
|
||||||
Tax effect of acquisition expenses
|
0.00
|
(0.01
|
)
|
|||||
Subtotal (non-GAAP)
|
0.78
|
0.60
|
||||||
Amortization of intangibles
|
0.09
|
0.06
|
||||||
Tax effect of amortization of intangibles
|
(0.02
|
)
|
(0.02
|
)
|
||||
Subtotal (non-GAAP)
|
0.85
|
0.64
|
||||||
Acquired non-impaired loan accretion
|
(0.04
|
)
|
(0.01
|
)
|
||||
Tax effect of acquired non-impaired loan accretion
|
0.01
|
0.00
|
||||||
Diluted adjusted net earnings per share (non-GAAP)
|
$
|
0.82
|
$
|
0.63
|
||||
Noninterest operating expenses
|
||||||||
Noninterest expenses (GAAP)
|
$
|
86,331
|
$
|
73,575
|
||||
Amortization of intangibles
|
(4,798
|
)
|
(2,768
|
)
|
||||
Acquisition expenses
|
8
|
(1,716
|
)
|
|||||
Total adjusted noninterest expenses (non-GAAP)
|
$
|
81,541
|
$
|
69,091
|
||||
Efficiency ratio
|
||||||||
Adjusted noninterest expenses (non-GAAP) - numerator
|
$
|
81,541
|
$
|
69,091
|
||||
Fully tax-equivalent net interest income
|
85,742
|
69,584
|
||||||
Noninterest revenues
|
57,491
|
44,318
|
||||||
Acquired non-impaired loan accretion
|
(2,063
|
)
|
(437
|
)
|
||||
Gain on sales of investments
|
0
|
(2
|
)
|
|||||
Operating revenues (non-GAAP) - denominator
|
$
|
141,170
|
$
|
113,463
|
||||
Efficiency ratio (non-GAAP)
|
57.8
|
%
|
60.9
|
%
|
(000's omitted)
|
March 31,
2018
|
December 31,
2017
|
March 31,
2017
|
|||||||||
Balance sheet data – at end of quarter
|
||||||||||||
Total assets
|
||||||||||||
Total assets (GAAP)
|
$
|
10,966,555
|
$
|
10,746,198
|
$
|
8,913,860
|
||||||
Intangible assets
|
(820,584
|
)
|
(825,088
|
)
|
(618,977
|
)
|
||||||
Deferred taxes on intangible assets
|
47,904
|
48,419
|
68,236
|
|||||||||
Total tangible assets (non-GAAP)
|
$
|
10,193,875
|
$
|
9,969,529
|
$
|
8,363,119
|
||||||
Total common equity
|
||||||||||||
Shareholders' Equity (GAAP)
|
1,631,466
|
1,635,315
|
1,296,030
|
|||||||||
Intangible assets
|
(820,584
|
)
|
(825,088
|
)
|
(618,977
|
)
|
||||||
Deferred taxes on intangible assets
|
47,904
|
48,419
|
68,236
|
|||||||||
Total tangible common equity (non-GAAP)
|
$
|
858,786
|
$
|
858,646
|
$
|
745,289
|
||||||
Net tangible equity-to-assets ratio at quarter end
|
||||||||||||
Total tangible common equity (non-GAAP) - numerator
|
$
|
858,786
|
$
|
858,646
|
$
|
745,289
|
||||||
Total tangible assets (non-GAAP) - denominator
|
$
|
10,193,875
|
$
|
9,969,529
|
$
|
8,363,119
|
||||||
Net tangible equity-to-assets ratio at quarter end (non-GAAP)
|
8.42
|
%
|
8.61
|
%
|
8.91
|
%
|
· |
Asset and liability levels using March 31, 2018, adjusted for certain seasonal trends, as a starting point.
|
· |
There are assumed to be conservative levels of balance sheet growth, low-to-mid single digit growth in loans and deposits, while using the cash flows from investment contractual maturities and prepayments to repay short-term capital market borrowings or reinvest into securities or cash equivalents.
|
· |
The prime rate and federal funds rates are assumed to move up or down over a 12-month period while moving the long end of the treasury curve to spreads over the three month treasury that are more consistent with historical norms (normalized yield curve). Deposit rates are assumed to move in a manner that reflects the historical relationship between deposit rate movement and changes in the federal funds rate.
|
· |
Cash flows are based on contractual maturity, optionality, and amortization schedules along with applicable prepayments derived from internal historical data and external sources.
|
Change in interest rates
|
Calculated annualized increase
(decrease) in projected net interest
income at March 31, 2018
|
+200 basis points
|
($2,835,000)
|
+100 basis points
|
($1,094,000)
|
-100 basis points
|
($6,877,000)
|
Part II. |
Other Information
|
Period
|
Total
Number of
Shares
Purchased
|
Average
Price Paid
Per Share
|
Total Number of Shares
Purchased as Part of
Publicly Announced
Plans or Programs
|
Maximum Number of
Shares That May Yet Be
Purchased Under the Plans
or Programs
|
||||||||||||
January 1-31, 2018
|
0
|
$
|
0
|
0
|
2,500,000
|
|||||||||||
February 1-28, 2018
|
0
|
$
|
0
|
0
|
2,500,000
|
|||||||||||
March 1-31, 2018 (1)
|
17,967
|
$
|
53.32
|
0
|
2,500,000
|
|||||||||||
Total
|
17,967
|
$
|
53.32
|
Exhibit No.
|
Description
|
Employment Agreement, dated as of January 5, 2018, by and between Community Bank System, Inc., Community Bank, N.A., and Mark E. Tryniski. Incorporated by reference to Exhibit No. 10.1 to the Current Report on Form 8-K filed on January 5, 2018 (Registration No. 001-13695). (1)
|
|
Amendment to Supplemental Retirement Plan Agreement, dated January 5, 2018, by and among Community Bank System, Inc., Community Bank, N.A. and Mark E. Tryniski. Incorporated by reference to Exhibit No. 10.2 to the Current Report on Form 8-K filed on January 5, 2018 (Registration No. 001-13695). (1)
|
|
Amendment to Employment Agreement, dated March 19, 2018, by and among Community Bank System, Inc., Community Bank, N.A. and Brian D. Donahue. Incorporated by reference to Exhibit No. 10.1 to the Current Report on Form 8-K filed on March 20, 2018 (Registration No. 001-13695). (1)
|
|
Certification of Mark E. Tryniski, President and Chief Executive Officer of the Registrant, pursuant to Rule 13a-15(e) or Rule 15d-15(e) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (2)
|
|
Certification of Scott Kingsley, Treasurer and Chief Financial Officer of the Registrant, pursuant to Rule 13a-15(e) or Rule 15d-15(e) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (2)
|
|
Certification of Mark E. Tryniski, President and Chief Executive Officer of the Registrant, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (3)
|
|
Certification of Scott Kingsley, Treasurer and Chief Financial Officer of the Registrant, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (3)
|
|
101
|
Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Consolidated Statements of Condition, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Changes in Shareholders’ Equity, (v) the Consolidated Statements of Cash Flows, and (vi) the Notes to Consolidated Financial Statements tagged as blocks of text and in detail.(4)
|
(1) |
Denotes management contract or compensatory plan or arrangement.
|
(2) |
Filed herewith.
|
(3) |
Furnished herewith.
|
(4) |
XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.
|
Date: May 10, 2018
|
/s/ Mark E. Tryniski
|
Mark E. Tryniski, President and Chief Executive Officer
|
|
Date: May 10, 2018
|
/s/ Scott Kingsley
|
Scott Kingsley, Treasurer and Chief Financial Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Community Bank System, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: May 10, 2018
|
/s/ Mark E. Tryniski
|
Mark E. Tryniski
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President and Chief Executive Officer
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1.
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I have reviewed this quarterly report on Form 10-Q of Community Bank System, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Dated: May 10, 2018
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/s/ Scott Kingsley
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Scott Kingsley
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Treasurer and Chief Financial Officer
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(1) |
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2) |
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Mark E. Tryniski
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Mark E. Tryniski
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President and Chief Executive Officer
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May 10, 2018
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(1) |
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2) |
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Scott Kingsley
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Scott Kingsley
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Treasurer and Chief Financial Officer
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May 10, 2018
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Document and Entity Information - shares |
3 Months Ended | |
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Mar. 31, 2018 |
Apr. 30, 2018 |
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Document and Entity Information [Abstract] | ||
Entity Registrant Name | COMMUNITY BANK SYSTEM, INC. | |
Entity Central Index Key | 0000723188 | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 50,974,640 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q1 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2018 |
CONSOLIDATED STATEMENTS OF CONDITION (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
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Assets: | ||
Available-for-sale investment securities, cost | $ 3,005,165 | $ 3,007,148 |
Shareholders' equity: | ||
Preferred stock, par value (in dollars per share) | $ 1.00 | $ 1.00 |
Preferred stock, shares authorized (in shares) | 500,000 | 500,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 1.00 | $ 1.00 |
Common stock, shares authorized (in shares) | 75,000,000 | 75,000,000 |
Common stock, shares issued (in shares) | 51,374,254 | 51,263,841 |
Treasury stock, shares at cost (in shares) | 490,651 | 567,764 |
Shares held by deferred compensation arrangements (in shares) | 203,730 | 237,494 |
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited) (Parenthetical) - $ / shares |
3 Months Ended | |
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Mar. 31, 2018 |
Mar. 31, 2017 |
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Cash dividends declared: | ||
Dividends declared per common share (in dollars per share) | $ 0.34 | $ 0.32 |
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 31, 2018 |
Mar. 31, 2017 |
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Investing activities: | ||
Cash acquired from acquisition | $ 16 | $ 11,063 |
BASIS OF PRESENTATION |
3 Months Ended | ||
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Mar. 31, 2018 | |||
BASIS OF PRESENTATION [Abstract] | |||
BASIS OF PRESENTATION |
The interim financial data as of and for the three months ended March 31, 2018 is unaudited; however, in the opinion of Community Bank System, Inc. (the “Company”), the interim data includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the interim periods in conformity with generally accepted accounting principles (“GAAP”). The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the full year or any other interim period. |
ACQUISITIONS |
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ACQUISITIONS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACQUISITIONS |
On January 2, 2018, the Company, through its subsidiary, OneGroup NY, Inc. (“OneGroup”), completed its acquisition of certain assets of Penna & Associates Agency, Inc. (“Penna”), an insurance agency headquartered in Johnson City, New York. The Company paid $0.8 million in cash to acquire the assets of Penna, and recorded goodwill in the amount of $0.4 million and a $0.4 million customer list intangible asset in conjunction with the acquisition. The effects of the acquired assets and liabilities have been included in the consolidated financial statements since that date. On January 2, 2018, the Company, through its subsidiary, Community Investment Services, Inc. (“CISI”), completed its acquisition of certain assets of Styles Bridges Associates (“Styles Bridges”), a financial services business headquartered in Canton, New York. The Company paid $0.7 million in cash to acquire a customer list from Styles Bridges, and recorded a $0.7 million customer list intangible asset in conjunction with the acquisition. The effects of the acquired assets and liabilities have been included in the consolidated financial statements since that date. On December 4, 2017, the Company, through its subsidiary, OneGroup, completed its acquisition of Gordon B. Roberts Agency, Inc. (“GBR”), an insurance agency headquartered in Oneonta, New York for $3.7 million in Company stock and cash, comprised of $1.35 million in cash and the issuance of 0.04 million shares of common stock. The transaction resulted in the acquisition of $0.6 million of assets, $0.7 million of other liabilities, goodwill in the amount of $2.2 million and other intangible assets of $1.6 million. The effects of the acquired assets and liabilities have been included in the consolidated financial statements since that date. On November 17, 2017, the Company, through its subsidiary, CISI, completed its acquisition of certain assets of Northeast Capital Management, Inc. (“NECM”), a financial services business headquartered in Wilkes Barre, Pennsylvania. The Company paid $1.2 million in cash, including a $0.2 million contingent payment based on certain customer retention objectives, to acquire a customer list from NECM, and recorded a $1.2 million customer list intangible asset in conjunction with the acquisition. The effects of the acquired assets have been included in the consolidated financial statements since that date. On May 12, 2017, the Company completed its acquisition of Merchants Bancshares, Inc. (“Merchants”), parent company of Merchants Bank, headquartered in South Burlington, Vermont, for $345.2 million in Company stock and cash, comprised of $82.9 million in cash and the issuance of 4.68 million shares of common stock. The acquisition extends the Company’s footprint into the Vermont and Western Massachusetts markets with the addition of 31 branch locations in Vermont and one location in Massachusetts. This transaction resulted in the acquisition of $2.0 billion of assets, including $1.49 billion of loans and $370.6 million of investment securities, as well as $1.45 billion of deposits and $189.0 million in goodwill. The effects of the acquired assets and liabilities have been included in the consolidated financial statements since that date. Revenues of approximately $16.1 million and direct expenses, which may not include certain shared expenses, of approximately $7.8 million from Merchants were included in the consolidated statement of income for the three months ended March 31, 2018. On March 1, 2017, the Company, through its subsidiary, OneGroup, completed its acquisition of certain assets of Dryfoos Insurance Agency, Inc. (“Dryfoos”), an insurance agency headquartered in Hazleton, Pennsylvania. The Company paid $3.0 million in cash to acquire the assets of Dryfoos, and recorded goodwill in the amount of $1.7 million and other intangible assets of $1.7 million in conjunction with the acquisition. The effects of the acquired assets and liabilities have been included in the consolidated financial statements since that date. On February 3, 2017, the Company completed its acquisition of Northeast Retirement Services, Inc. (“NRS”) and its subsidiary Global Trust Company (“GTC”), headquartered in Woburn, Massachusetts, for $148.6 million in Company stock and cash. NRS was a privately held corporation focused on providing institutional transfer agency, master recordkeeping services, custom target date fund administration, trust product administration and customized reporting services to institutional clients. Its wholly-owned subsidiary, GTC, is chartered in the State of Maine as a non-depository trust company and provides fiduciary services for collective investment trusts and other products. The acquisition of NRS and GTC, hereafter referred to collectively as NRS, will strengthen and complement the Company’s existing employee benefit services businesses. Upon the completion of the merger, NRS became a wholly-owned subsidiary of BPAS and operates as Northeast Retirement Services, LLC, a Delaware limited liability company. This transaction resulted in the acquisition of $36.1 million in net tangible assets, principally cash and certificates of deposit, $60.2 million in customer list intangibles that will be amortized using the 150% declining balance method over 10 years, a $23.0 million deferred tax liability associated with the customer list intangible, and $75.3 million in goodwill. The effects of the acquired assets and liabilities have been included in the consolidated financial statements since that date. Revenues of $10.1 million and expenses of $6.0 million from NRS were included in the consolidated statement of income for the three months ended March 31, 2018. Revenues of $5.1 million and expenses of $3.6 million from NRS were included in the consolidated statement of income for the three months ended March 31, 2017. On January 1, 2017, the Company, through its subsidiary, OneGroup, acquired certain assets of Benefits Advisory Service, Inc. (“BAS”), a benefits consulting group headquartered in Forest Hills, New York. The Company paid $1.2 million in cash to acquire the assets of BAS and recorded intangible assets of $1.2 million in conjunction with the acquisition. The effects of the acquired assets and liabilities have been included in the consolidated financial statements since that date. The assets and liabilities assumed in the acquisitions were recorded at their estimated fair values based on management’s best estimates using information available at the dates of the acquisition, and were subject to adjustment based on updated information not available at the time of acquisition. During the first quarter of 2018, the carrying amount of other liabilities associated with the NRS acquisition decreased by $1.2 million as a result of an adjustment to deferred taxes. Goodwill associated with the NRS acquisition decreased $1.2 million as a result of this adjustment. The above referenced acquisitions expanded the Company’s geographical presence in New York, Pennsylvania, Vermont, and Western Massachusetts and management expects that the Company will benefit from greater geographic diversity and the advantages of other synergistic business development opportunities. The following table summarizes the estimated fair value of the assets acquired and liabilities assumed after considering the measurement period adjustments described above:
Acquired loans that have evidence of deterioration in credit quality since origination and for which it is probable, at acquisition, that the Company will be unable to collect all contractually required payments were aggregated by comparable characteristics and recorded at fair value without a carryover of the related allowance for loan losses. Cash flows for each loan were determined using an estimate of credit losses and rate of prepayments. Projected monthly cash flows were then discounted to present value using a market-based discount rate. The excess of the undiscounted expected cash flows over the estimated fair value is referred to as the “accretable yield” and is recognized into interest income over the remaining lives of the acquired loans. The following is a summary of the loans acquired from Merchants at the date of acquisition:
The fair value of checking, savings and money market deposit accounts acquired were assumed to approximate the carrying value as these accounts have no stated maturity and are payable on demand. Certificate of deposit accounts were valued at the present value of the certificates’ expected contractual payments discounted at market rates for similar certificates. The core deposit intangibles and other intangibles related to the Penna, Styles Bridges, GBR, NECM, Merchants, Dryfoos, and BAS acquisitions are being amortized using an accelerated method over their estimated useful life of eight years. The goodwill, which is not amortized for book purposes, was assigned to the Banking segment for the Merchants acquisition, the Employee Benefit Services segment for NRS, and All Other segments for the Penna, GBR, and Dryfoos acquisitions. Goodwill arising from the Merchants, NRS and GBR acquisitions is not deductible for tax purposes. Goodwill arising from the Penna and Dryfoos acquisitions is deductible for tax purposes. Direct costs related to the acquisitions were expensed as incurred. Merger and acquisition integration-related expenses amount to $1.7 million during the three months ended March 31, 2017 and have been separately stated in the Consolidated Statements of Income. Merger and acquisition integration-related expenses for the three months ended March 31, 2018 were immaterial. |
ACCOUNTING POLICIES |
3 Months Ended | ||
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Mar. 31, 2018 | |||
ACCOUNTING POLICIES [Abstract] | |||
ACCOUNTING POLICIES |
The accounting policies of the Company, as applied in the consolidated interim financial statements presented herein, are substantially the same as those followed on an annual basis as presented on pages 63 through 71 of the Annual Report on Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission (“SEC”) on March 1, 2018. Critical Accounting Policies Acquired Loans Acquired loans are initially recorded at their acquisition date fair values. The carryover of allowance for loan losses is prohibited as any credit losses in the loans are included in the determination of the fair value of the loans at the acquisition date. Fair values for acquired loans are based on a discounted cash flow methodology that involves assumptions and judgments as to credit risk, prepayment risk, liquidity risk, default rates, loss severity, payment speeds, collateral values and discount rate. Acquired Impaired Loans Acquired loans that have evidence of deterioration in credit quality since origination and for which it is probable, at acquisition, that the Company will be unable to collect all contractually required payments are accounted for as impaired loans under Accounting Standards Codification (“ASC”) 310-30. The excess of undiscounted cash flows expected at acquisition over the estimated fair value is referred to as the accretable discount and is recognized into interest income over the remaining life of the loans using the interest method. The difference between contractually required payments at acquisition and the undiscounted cash flows expected to be collected at acquisition is referred to as the non-accretable discount. The non-accretable discount represents estimated future credit losses and other contractually required payments that the Company does not expect to collect. Subsequent decreases in expected cash flows are recognized as impairments through a charge to the provision for loan losses resulting in an increase in the allowance for loan losses. Subsequent improvements in expected cash flows result in a recovery of previously recorded allowance for loan losses or a reversal of a corresponding amount of the non-accretable discount, which the Company then reclassifies as an accretable discount that is recognized into interest income over the remaining life of the loans using the interest method. Acquired loans that met the criteria for non-accrual of interest prior to acquisition may be considered performing upon acquisition, regardless of whether the customer is contractually delinquent, if the Company 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, the Company may no longer consider the loans to be non-accrual or non-performing and may accrue interest on these loans, including the impact of any accretable discount. Acquired Non-impaired Loans Acquired loans that do not meet the requirements under ASC 310-30 are considered acquired non-impaired loans. The difference between the acquisition date fair value and the outstanding balance represents the fair value adjustment for a loan and includes both credit and interest rate considerations. Fair value adjustments may be discounts (or premiums) to a loan’s cost basis and are accreted (or amortized) to net interest income (or expense) over the loan’s remaining life in accordance with ASC 310-20. Fair value adjustments for revolving loans are accreted (or amortized) using a straight line method. Term loans are accreted (or amortized) using the constant effective yield method. Subsequent to the purchase date, the methods used to estimate the allowance for loan losses for the acquired non-impaired loans are consistent with the policy described below. However, the Company compares the net realizable value of the loans to the carrying value, for loans collectively evaluated for impairment. The carrying value represents the net of the loan’s unpaid principal balance and the remaining purchase discount (or premium) that has yet to be accreted into interest income. When the carrying value exceeds the net realizable value, an allowance for loan loss is recognized. Allowance for Loan Losses Management continually evaluates the credit quality of the Company’s loan portfolio, and performs a formal review of the adequacy of the allowance for loan losses on a quarterly basis. The allowance reflects management’s best estimate of probable losses inherent in the loan portfolio. Determination of the allowance is subjective in nature and requires significant estimates. The Company’s allowance methodology consists of two broad components - general and specific loan loss allocations. The general loan loss allocation is composed of two calculations that are computed on five main loan segments: business lending; consumer direct; consumer indirect; home equity; and consumer mortgage. The first calculation is quantitative and determines an allowance level based on the latest 36 months of historical net charge-off data for each loan class (commercial loans exclude balances with specific loan loss allocations). The second calculation is qualitative and takes into consideration eight qualitative environmental factors: levels of and trends in delinquencies and impaired loans; levels of and trends in charge-offs and recoveries; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards, and other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentrations. A component of the qualitative calculation is the unallocated allowance for loan loss. The qualitative and quantitative calculations are added together to determine the general loan loss allocation. The specific loan loss allocation relates to individual commercial loans that are both greater than $0.5 million and in a nonaccruing status with respect to interest. Specific loan losses are based on discounted estimated cash flows, including any cash flows resulting from the conversion of collateral or collateral shortfalls. The allowance levels computed from the specific and general loan loss allocation methods are combined with unallocated allowances and allowances needed for acquired loans to derive the total required allowance for loan losses to be reflected on the Consolidated Statement of Condition. Loan losses are charged off against the allowance, while recoveries of amounts previously charged off are credited to the allowance. A provision for loan losses is charged to operations based on management’s periodic evaluation of factors previously mentioned. Investment Securities The Company can classify its investments in debt and equity securities as held-to-maturity, available-for-sale, or trading. Held-to-maturity securities are those for which the Company has the positive intent and ability to hold until maturity, and are reported at cost, which is adjusted for amortization of premiums and accretion of discounts. Securities classified as available-for-sale are reported at fair value with net unrealized gains and losses reflected as a separate component of shareholders’ equity, net of applicable income taxes. None of the Company’s investment securities have been classified as trading securities at March 31, 2018. Certain equity securities are stated at cost and include restricted stock of the Federal Reserve Bank of New York (“Federal Reserve”), the Federal Home Loan Bank of New York and the Federal Home Loan Bank of Boston (collectively referred to as “FHLB”). Fair values for investment securities are based upon quoted market prices, where available. If quoted market prices are not available, fair values are based upon quoted market prices of comparable instruments, or a discounted cash flow model using market estimates of interest rates and volatility. The Company conducts an assessment of all securities in an unrealized loss position to determine if other-than-temporary impairment (“OTTI”) exists on a quarterly basis. An unrealized loss exists when the current fair value of an individual security is less than its amortized cost basis. The OTTI assessment considers the security structure, recent security collateral performance metrics, if applicable, external credit ratings, failure of the issuer to make scheduled interest or principal payments, judgment about, and expectations of, future performance, and relevant independent industry research, analysis and forecasts. The severity of the impairment and the length of time the security has been impaired is also considered in the assessment. The assessment of whether an OTTI decline exists is performed on each security, regardless of the classification of the security as available-for-sale or held-to-maturity and involves a high degree of subjectivity and judgment that is based on the information available to management at a point in time. An OTTI loss must be recognized for a debt security in an unrealized loss position if there is intent to sell the security or it is more likely than not the Company will be required to sell the security prior to recovery of its amortized cost basis. In this situation, the amount of loss recognized in income is equal to the difference between the fair value and the amortized cost basis of the security. Even if management does not have the intent, and it is not more likely than not that the Company will be required to sell the securities, an evaluation of the expected cash flows to be received is performed to determine if a credit loss has occurred. For debt securities, a critical component of the evaluation for OTTI is the identification of credit-impaired securities, where the Company does not expect to receive cash flows sufficient to recover the entire amortized cost basis of the security. In the event of a credit loss, only the amount of impairment associated with the credit loss would be recognized in income. The portion of the unrealized loss relating to other factors, such as liquidity conditions in the market or changes in market interest rates, is recorded in accumulated other comprehensive loss. Equity securities are also evaluated to determine whether the unrealized loss is expected to be recoverable based on whether evidence exists to support a realizable value equal to or greater than the amortized cost basis. If it is probable that the amortized cost basis will not be recovered, taking into consideration the estimated recovery period and the ability to hold the equity security until recovery, OTTI is recognized in earnings equal to the difference between the fair value and the amortized cost basis of the security. The specific identification method is used in determining the realized gains and losses on sales of investment securities and OTTI charges. Premiums and discounts on securities are amortized and accreted, respectively, on the interest method basis over the period to maturity or estimated life of the related security. Purchases and sales of securities are recognized on a trade date basis. Intangible Assets Intangible assets include core deposit intangibles, customer relationship intangibles and goodwill arising from acquisitions. Core deposit intangibles and customer relationship intangibles are amortized on either an accelerated or straight-line basis over periods ranging from seven to 20 years. The initial and ongoing carrying value of goodwill and other intangible assets is based upon discounted cash flow modeling techniques that require management to make estimates regarding the amount and timing of expected future cash flows. It also requires use of a discount rate that reflects the current return requirements of the market in relation to present risk-free interest rates, required equity market premiums, peer volatility indicators, and company-specific risk indicators. The Company evaluates goodwill for impairment on an annual basis, or more often if events or circumstances indicate there may be impairment. The implied fair value of a reporting unit’s goodwill is compared to its carrying amount and the impairment loss is measured by the excess of the carrying value over fair value. The fair value of each reporting unit is compared to the carrying amount of such reporting unit in order to determine if impairment is indicated. Retirement Benefits The Company provides defined benefit pension benefits to eligible employees and post-retirement health and life insurance benefits to certain eligible retirees. The Company also provides deferred compensation and supplemental executive retirement plans for selected current and former employees, officers, and directors. Expense under these plans is charged to current operations and consists of several components of net periodic benefit cost based on various actuarial assumptions regarding future experience under the plans, including discount rate, rate of future compensation increases, and expected return on plan assets. Recently Adopted Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). This new guidance supersedes the revenue recognition requirements in ASC 605, Revenue Recognition, and is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects consideration to which the entity expects to be entitled in exchange for those goods and services. In doing so, companies generally will be required to use more judgment and make more estimates than under prior guidance. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. Since the guidance does not apply to revenue associated with financial instruments, including loans and securities that are accounted for under other GAAP, the new guidance did not have a material impact on revenue most closely associated with financial instruments, including interest income, interest expense and mortgage banking income. The Company completed a comprehensive assessment of the revenue streams and reviewed related contracts potentially affected by the ASU for all segments of its business. Based on this assessment, the Company concluded that ASU 2014-09 did not materially change the manner in which the Company recognized revenue for these revenue streams. The Company also completed its evaluation of certain costs related to these revenue streams to determine whether such costs should be presented as expenses or contra-revenue (i.e. gross versus net) and timing of compensatory payments to producers. Based on the Company’s evaluation, it was determined that changes in the presentation of expenses and timing of the recognition of compensation expense did not materially affect noninterest income or expense. The Company adopted this guidance on January 1, 2018 utilizing the modified retrospective approach. Since there was no net income impact upon adoption of the new guidance, a cumulative effect adjustment to opening retained earnings was not deemed necessary. See Note N: Revenue Recognition for more information. In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. This guidance addresses certain aspects of recognition, measurement, presentation and disclosure of financial instruments. The primary focus of this guidance is to supersede the guidance to classify equity securities with readily determinable fair values into different categories (trading or available-for-sale) and requires equity securities to be measured at fair value with changes in the fair value recognized through net income. This guidance requires adoption through a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. This ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company adopted this guidance on January 1, 2018. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230). The amendments provide guidance on the following eight specific cash flow issues: 1) debt prepayment or debt extinguishment costs; 2) settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; 3) contingent consideration payments made after a business combination; 4) proceeds from the settlement of insurance claims; 5) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies; 6) distributions received from equity method investees; 7) beneficial interests in securitization transactions; and 8) separately identifiable cash flows and application of the predominance principle. This ASU is effective for fiscal years beginning after December 31, 2017, including interim periods within those fiscal years. The Company adopted this guidance on January 1, 2018 on a retrospective basis. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements. In March 2017, the FASB issued ASU No. 2017-07, Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. This new guidance requires the service cost component of net periodic pension and postretirement benefit costs to be presented separately from other components of net benefit cost in the statement of income. This ASU is effective for the Company for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company adopted this guidance on January 1, 2018 and applied the guidance on a modified retrospective basis for the presentation of other components of net periodic benefit cost in the Consolidated Statements of Income. The impact of the adoption of this guidance resulted in the reclassification of net periodic benefit income of $1.5 million from salaries and employee benefits to other expenses in the Consolidated Statement of Income for the three months ended March 31, 2017. New Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This new guidance supersedes the lease requirements in Topic 840, Leases and is based on the principle that a lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. The accounting applied by a lessor is largely unchanged from that applied under the previous guidance. In addition, the guidance requires an entity to separate the lease components from the nonlease components in a contract. The ASU requires disclosures about the amount, timing, and judgments related to a reporting entity’s accounting for leases and related cash flows. The standard is required to be applied to all leases in existence as of the date of adoption using a modified retrospective transition approach. This guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted for all companies in any interim or annual period. The Company occupies certain offices and uses certain equipment under non-cancelable operating lease agreements, which currently are not reflected in its consolidated statement of condition. The Company expects to recognize lease liabilities and right of use assets associated with these lease agreements; however, the extent of the impact on the Company’s consolidated financial statements is currently under evaluation. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326). This new guidance significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. This ASU will replace the “incurred loss” model under existing guidance with an “expected loss” model for instruments measured at amortized cost, and require entities to record allowances for available-for-sale debt securities rather than reduce the carrying amount, as they do today under the other-than-temporary impairment model. This ASU also simplifies the accounting model for purchased credit-impaired debt securities and loans. This guidance requires adoption through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. This ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for all companies as of fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the impact the guidance will have on the Company’s consolidated financial statements, and expects a change in the allowance for loan losses resulting from the change to expected losses for the estimated life of the financial asset, including an allowance for debt securities. The amount of the change in the allowance for loan losses resulting from the new guidance will be impacted by the portfolio composition and asset quality at the adoption date, as well as economic conditions and forecasts at the time of adoption. In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350). The amendments simplify how an entity is required to test goodwill for impairment by eliminating the requirement to measure a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. Instead, an entity will perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount, and recognize an impairment charge for the amount by which the carrying amount of the reporting unit exceeds its fair value. Impairment loss recognized under this new guidance will be limited to the goodwill allocated to the reporting unit. This ASU is effective prospectively for the Company for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. This ASU is not expected to have a material impact on the Company’s consolidated financial statements. In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. This new guidance amends current guidance to better align hedge accounting with risk management activities and reduce the complexity involved in applying hedge accounting. Under this new guidance, the concept of hedge ineffectiveness will be eliminated. Ineffective income generated by cash flow and net investment hedges will be recognized in the same financial reporting period and income statement line item as effective income, so as to reflect the full cost of hedging at one time and in one place. Ineffective income generated by fair value hedges will continue to be reflected in current period earnings; however, it will be recognized in the same income statement line item as effective income. The guidance will also allow any contractually specified variable rate to be designated as the hedged risk in a cash flow hedge. With respect to fair value hedges of interest rate risk, the guidance will allow changes in the fair value of the hedged item to be calculated solely using changes in the benchmark interest rate component of the instrument’s total contractual coupon cash flows. This ASU is effective for the Company for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. This ASU is not expected to have a material impact on the Company’s consolidated financial statements. |
INVESTMENT SECURITIES |
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INVESTMENT SECURITIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVESTMENT SECURITIES |
The amortized cost and estimated fair value of investment securities as of March 31, 2018 and December 31, 2017 are as follows:
A summary of investment securities that have been in a continuous unrealized loss position is as follows: As of March 31, 2018
As of December 31, 2017
The unrealized losses reported pertaining to securities issued by the U.S. government and its sponsored entities, include treasuries, agencies, and mortgage-backed securities issued by Ginnie Mae, Fannie Mae, and Freddie Mac, which are currently rated AAA by Moody’s Investor Services, AA+ by Standard & Poor’s and are guaranteed by the U.S. government. The majority of the obligations of state and political subdivisions and corporations carry a credit rating of A or better. Additionally, a majority of the obligations of state and political subdivisions carry a secondary level of credit enhancement. The Company does not intend to sell these securities, nor is it more likely than not that the Company will be required to sell these securities prior to recovery of the amortized cost. The unrealized losses in the portfolios are primarily attributable to changes in interest rates. As such, management does not believe any individual unrealized loss as of March 31, 2018 represents OTTI. The amortized cost and estimated fair value of debt securities at March 31, 2018, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately.
As of March 31, 2018, $279.7 million of U.S. Treasury securities were pledged as collateral for securities sold under agreement to repurchase. All securities sold under agreement to repurchase as of March 31, 2018 have an overnight and continuous maturity. |
LOANS |
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LOANS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LOANS |
The segments of the Company’s loan portfolio are disaggregated into the following classes that allow management to monitor risk and performance:
The balances of these classes are summarized as follows:
The outstanding balance related to credit impaired acquired loans was $11.1 million and $13.4 million at March 31, 2018 and December 31, 2017, respectively. The changes in the accretable discount related to the credit impaired acquired loans are as follows:
Credit Quality Management monitors the credit quality of its loan portfolio on an ongoing basis. Measurement of delinquency and past due status are based on the contractual terms of each loan. Past due loans are reviewed on a monthly basis to identify loans for non-accrual status. The following is an aged analysis of the Company’s past due loans, by class as of March 31, 2018: Legacy Loans (excludes loans acquired after January 1, 2009)
Acquired Loans (includes loans acquired after January 1, 2009)
The following is an aged analysis of the Company’s past due loans by class as of December 31, 2017: Legacy Loans (excludes loans acquired after January 1, 2009)
Acquired Loans (includes loans acquired after January 1, 2009)
The Company uses several credit quality indicators to assess credit risk in an ongoing manner. The Company’s primary credit quality indicator for its business lending portfolio is an internal credit risk rating system that categorizes loans as “pass”, “special mention”, “classified”, or “doubtful”. Credit risk ratings are applied individually to those classes of loans that have significant or unique credit characteristics that benefit from a case-by-case evaluation. In general, the following are the definitions of the Company’s credit quality indicators:
The following table shows the amount of business lending loans by credit quality category:
All other loans are underwritten and structured using standardized criteria and characteristics, primarily payment performance, and are normally risk rated and monitored collectively on a monthly basis. These are typically loans to individuals in the consumer categories and are delineated as either performing or nonperforming. Performing loans include loans classified as current as well as those classified as 30 - 89 days past due. Nonperforming loans include 90+ days past due and still accruing and nonaccrual loans. The following table details the balances in all other loan categories at March 31, 2018: Legacy Loans (excludes loans acquired after January 1, 2009)
Acquired Loans (includes loans acquired after January 1, 2009)
The following table details the balances in all other loan categories at December 31, 2017: Legacy Loans (excludes loans acquired after January 1, 2009)
Acquired Loans (includes loans acquired after January 1, 2009)
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 March 31, 2018 and December 31, 2017 follows:
In the course of working with borrowers, the Company may choose to restructure the contractual terms of certain loans. In this scenario, the Company attempts to work-out an alternative payment schedule with the borrower in order to optimize collectability of the loan. Any loans that are modified are reviewed by the Company to identify if a troubled debt restructuring (“TDR”) has occurred, which is when, for economic or legal reasons related to a borrower’s financial difficulties, the Company grants a concession to the borrower that it would not otherwise consider. Terms may be modified to fit the ability of the borrower to repay in line with its current financial standing and the restructuring of the loan may include the transfer of assets from the borrower to satisfy the debt, a modification of loan terms, or a combination of the two. In accordance with the clarified guidance issued by the Office of the Comptroller of the Currency (“OCC”), loans that have been discharged in Chapter 7 bankruptcy but not reaffirmed by the borrower, are classified as TDRs, irrespective of payment history or delinquency status, even if the repayment terms for the loan have not been otherwise modified. The Company’s lien position against the underlying collateral remains unchanged. Pursuant to that guidance, the Company records a charge-off equal to any portion of the carrying value that exceeds the net realizable value of the collateral. The amount of loss incurred in the three months ended March 31, 2018 and 2017 was immaterial. TDRs that are less than $0.5 million are collectively included in the general loan loss allocation and the qualitative review. TDRs that are commercial loans and greater than $0.5 million are individually evaluated for impairment, and if necessary, a specific allocation of the allowance for loan losses is provided. As a result, the determination of the amount of allowance for loan losses related to TDRs is the same as detailed in the critical accounting policies. Information regarding TDRs as of March 31, 2018 and December 31, 2017 is as follows:
The following table presents information related to loans modified in a TDR during the three months ended March 31, 2018 and 2017. Of the loans noted in the table below, all loans for the three months ended March 31, 2018 and 2017 were modified due to a Chapter 7 bankruptcy as described previously. The financial effects of these restructurings were immaterial.
Allowance for Loan Losses 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:
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GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS |
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GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS |
The gross carrying amount and accumulated amortization for each type of identifiable intangible asset are as follows:
The estimated aggregate amortization expense for each of the five succeeding fiscal years ended December 31 is as follows:
Shown below are the components of the Company’s goodwill at December 31, 2017 and March 31, 2018:
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MANDATORILY REDEEMABLE PREFERRED SECURITIES |
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MANDATORILY REDEEMABLE PREFERRED SECURITIES [Abstract] | |||||||||||||||||||||||||||||||
MANDATORILY REDEEMABLE PREFERRED SECURITIES |
The Company sponsors three business trusts, Community Statutory Trust III (“CST III”), Community Capital Trust IV (“CCT IV”) and MBVT Statutory Trust I (“MBVT I”), of which 100% of the common stock is owned by the Company. The common stock of MBVT Statutory Trust I was acquired in the Merchants acquisition. The trusts were formed for the purpose of issuing company-obligated mandatorily redeemable preferred securities to third-party investors and investing the proceeds from the sale of such preferred securities solely in junior subordinated debt securities of the Company. The debentures held by each trust are the sole assets of such trust. Distributions on the preferred securities issued by each trust are payable quarterly at a rate per annum equal to the interest rate being earned by the trust on the debentures held by that trust and are recorded as interest expense in the consolidated financial statements. The preferred securities are subject to mandatory redemption, in whole or in part, upon repayment of the debentures. The Company has entered into agreements which, taken collectively, fully and unconditionally guarantee the preferred securities subject to the terms of each of the guarantees. The terms of the preferred securities of each trust are as follows:
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BENEFIT PLANS |
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BENEFIT PLANS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BENEFIT PLANS |
The Company provides a qualified defined benefit pension to eligible employees and retirees, other post-retirement health and life insurance benefits to certain retirees, an unfunded supplemental pension plan for certain key executives, and an unfunded stock balance plan for certain of its nonemployee directors. The Company accrues for the estimated cost of these benefits through charges to expense during the years that employees earn these benefits. The net periodic benefit cost for the three months ended March 31, 2018 and 2017 is as follows:
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EARNINGS PER SHARE |
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EARNINGS PER SHARE [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER SHARE |
The two class method is used in the calculations of basic and diluted earnings per share. Under the two class method, earnings available to common shareholders for the period are allocated between common shareholders and participating securities according to dividends declared and participation rights in undistributed earnings. The Company has determined that all of its outstanding non-vested stock awards are participating securities as of March 31, 2018. Basic earnings per share are computed based on the weighted-average of the common shares outstanding for the period. Diluted earnings per share are based on the weighted-average of the shares outstanding and the assumed exercise of stock options during the year. The dilutive effect of options is calculated using the treasury stock method of accounting. The treasury stock method determines the number of common shares that would be outstanding if all the dilutive options (those where the average market price is greater than the exercise price) were exercised and the proceeds were used to repurchase common shares in the open market at the average market price for the applicable time period. There were approximately 0.4 million weighted-average anti-dilutive stock options outstanding for the three months ended March 31, 2018, compared to approximately 0.2 million weighted-average anti-dilutive stock options outstanding for the three months ended March 31, 2017 that were not included in the computation below. The following is a reconciliation of basic to diluted earnings per share for the three months ended March 31, 2018 and 2017:
Stock Repurchase Program At its December 2017 meeting, the Company’s Board of Directors (the “Board”) approved a stock repurchase program authorizing the repurchase of up to 2.5 million shares of the Company’s common stock in accordance with securities laws and regulations, through December 31, 2018. Any repurchased shares will be used for general corporate purposes, including those related to stock plan activities. The timing and extent of repurchases will depend on market conditions and other corporate considerations as determined at the Company’s discretion. The Company did not repurchase any shares under the authorized plan during the first three months of 2018. |
COMMITMENTS, CONTINGENT LIABILITIES AND RESTRICTIONS |
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COMMITMENTS, CONTINGENT LIABILITIES AND RESTRICTIONS [Abstract] | |||||||||||||||||||||||||||||||||||||||
COMMITMENTS, CONTINGENT LIABILITIES AND RESTRICTIONS |
The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments consist primarily of commitments to extend credit and standby letters of credit. Commitments to extend credit are agreements to lend to customers, generally having fixed expiration dates or other termination clauses that may require payment of a fee. These commitments consist principally of unused commercial and consumer credit lines. Standby letters of credit generally are contingent upon the failure of the customer to perform according to the terms of an underlying contract with a third party. The credit risks associated with commitments to extend credit and standby letters of credit are essentially the same as that involved with extending loans to customers and are subject to the Company’s normal credit policies. Collateral may be obtained based on management’s assessment of the customer’s creditworthiness. The fair value of the standby letters of credit is immaterial for disclosure. The contract amounts of commitments and contingencies are as follows:
The Company and its subsidiaries are subject in the normal course of business to various pending and threatened legal proceedings in which claims for monetary damages are asserted. As of March 31, 2018, management, after consultation with legal counsel, does not anticipate that the aggregate ultimate liability arising out of litigation pending or threatened against the Company or its subsidiaries will be material to the Company’s consolidated financial position. On at least a quarterly basis, the Company assesses its liabilities and contingencies in connection with such legal proceedings. For those matters where it is probable that the Company will incur losses and the amounts of the losses can be reasonably estimated, the Company records an expense and corresponding liability in its consolidated financial statements. To the extent the pending or threatened litigation could result in exposure in excess of that liability, the amount of such excess is not currently estimable. The range of reasonably possible losses for matters where an exposure is not currently estimable or considered probable, beyond the existing recorded liabilities, is between $0 and $1 million in the aggregate. Although the Company does not believe that the outcome of pending litigation will be material to the Company’s consolidated financial position, it cannot rule out the possibility that such outcomes will be material to the consolidated results of operations for a particular reporting period in the future. |
FAIR VALUE |
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FAIR VALUE [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE |
Accounting standards establish a framework for measuring fair value and require certain disclosures about such fair value instruments. It defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e. exit price). Inputs used to measure fair value are classified into the following hierarchy:
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.
The valuation techniques used to measure fair value for the items in the table above are as follows:
The changes in Level 3 assets measured at fair value on a recurring basis are immaterial. 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.
Loans are generally not recorded at fair value on a recurring basis. Periodically, the Company records nonrecurring adjustments to the carrying value of loans based on fair value measurements for partial charge-offs of the uncollectible portions of those loans. Nonrecurring adjustments also include certain impairment amounts for collateral-dependent loans calculated when establishing the allowance for loan losses. Such amounts are generally based on the fair value of the underlying collateral supporting the loan and, as a result, the carrying value of the loan less the calculated valuation amount does not necessarily represent the fair value of the loan. Real estate collateral is typically valued using independent appraisals or other indications of value based on recent comparable sales of similar properties or assumptions generally observable in the marketplace, adjusted for non-observable inputs. Thus, the resulting nonrecurring fair value measurements are generally classified as Level 3. Estimates of fair value used for other collateral supporting commercial loans generally are based on assumptions not observable in the marketplace and, therefore, such valuations classify as Level 3. Other real estate owned (“OREO”) is valued at the time the loan is foreclosed upon and the asset is transferred to OREO. The value is based primarily on third party appraisals, less costs to sell. The appraisals are sometimes further discounted based on management’s historical knowledge, changes in market conditions from the time of valuation, and/or management’s expertise and knowledge of the customer and customer’s business. Such discounts are significant, ranging from 0.8% to 82.5% at March 31, 2018 and result in a Level 3 classification of the inputs for determining fair value. OREO is reviewed and evaluated on at least a quarterly basis for additional impairment and adjusted accordingly, based on the same factors identified above. The Company recovers the carrying value of OREO through the sale of the property. The ability to affect future sales prices is subject to market conditions and factors beyond the Company’s control and may impact the estimated fair value of a property. Originated mortgage servicing rights are recorded at their fair value at the time of sale of the underlying loan, and are amortized in proportion to and over the estimated period of net servicing income. The fair value of mortgage servicing rights is based on a valuation model incorporating inputs that market participants would use in estimating future net servicing income. Such inputs include estimates of the cost of servicing loans, appropriate discount rate and prepayment speeds and are considered to be unobservable and contribute to the Level 3 classification of mortgage servicing rights. In accordance with GAAP, the Company must record impairment charges, on a nonrecurring basis, when the carrying value of a stratum exceeds its estimated fair value. Impairment is recognized through a valuation allowance. There is no valuation allowance at March 31, 2018. 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:
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 March 31, 2018 and December 31, 2017 are as follows:
The following is a further description of the principal valuation methods used by the Company to estimate the fair values of its financial instruments. Loans have been classified as a Level 3 valuation. Fair values for variable rate loans that reprice frequently are based on carrying values. Fair values for fixed rate loans are estimated using discounted cash flows and interest rates currently being offered for loans with similar terms to borrowers of similar credit quality. Deposits have been classified as a Level 2 valuation. The fair value of demand deposits, interest-bearing checking deposits, savings accounts, and money market deposits is the amount payable on demand at the reporting date. The fair value of time deposit obligations are based on current market rates for similar products. Borrowings and subordinated debt held by unconsolidated subsidiary trusts have been classified as a Level 2 valuation. The fair value of short-term borrowings and securities sold under agreement to repurchase, short-term, is the amount payable on demand at the reporting date. Fair values for long-term debt and subordinated debt held by unconsolidated subsidiary trusts are estimated using discounted cash flows and interest rates currently being offered on similar securities. The difference between the carrying values of long-term borrowings and subordinated debt held by unconsolidated subsidiary trusts, and their fair values, are not material as of the reporting dates. Other financial assets and liabilities – Cash and cash equivalents have been classified as a Level 1 valuation, while accrued interest receivable and accrued interest payable have been classified as a Level 2 valuation. The fair values of each approximate the respective carrying values because the instruments are payable on demand or have short-term maturities and present relatively low credit risk and interest rate risk. |
DERIVATIVE INSTRUMENTS |
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DERIVATIVE INSTRUMENTS [Abstract] | |||
DERIVATIVE INSTRUMENTS |
The Company is party to derivative financial instruments in the normal course of its business to meet the financing needs of its customers and to manage its own exposure to fluctuations in interest rates. These financial instruments have been limited to interest rate swap agreements, commitments to originate real estate loans held for sale and forward sales commitments. The Company does not hold or issue derivative financial instruments for trading or other speculative purposes. The Company enters into forward sales commitments for the future delivery of residential mortgage loans, and interest rate lock commitments to fund loans at a specified interest rate. The forward sales commitments are utilized to reduce interest rate risk associated with interest rate lock commitments and loans held for sale. Changes in the estimated fair value of the forward sales commitments and interest rate lock commitments subsequent to inception are based on changes in the fair value of the underlying loan resulting from the fulfillment of the commitment and changes in the probability that the loan will fund within the terms of the commitment, which is affected primarily by changes in interest rates and the passage of time. At inception and during the life of the interest rate lock commitment, the Company includes the expected net future cash flows related to the associated servicing of the loan as part of the fair value measurement of the interest rate lock commitments. These derivatives are recorded at fair value, which were immaterial at March 31, 2018. The effect of the changes to these derivatives for the three months then ended was also immaterial. The Company acquired interest rate swaps from the Merchants acquisition with notional amounts with certain commercial customers which totaled $38.5 million at March 31, 2018. In order to minimize the Company’s risk, these customer derivatives (pay floating/receive fixed swaps) have been offset with essentially matching interest rate swaps (pay fixed/receive floating swaps) with the Company’s counterparty totaling $38.5 million. The weighted average receive rate of these interest rate swaps was 3.69%, the weighted average pay rate was 3.84% and the weighted average maturity was 6.2 years. The fair values of $0.9 million and $0.9 million were reflected in other assets and other liabilities, respectively, in the accompanying consolidated statement of condition at March 31, 2018. Hedge accounting has not been applied for these derivatives. Since the terms of the swaps with our customer and the other financial institution offset each other, with the only difference being counterparty credit risk, changes in the fair value of the underlying derivative contracts are not materially different and do not significantly impact our results of operations. The Company also acquired interest rate swaps from the Merchants acquisition with notional amounts totaling $7.0 million at March 31, 2018 that were designated as fair value hedges of certain fixed rate loans with municipalities. At March 31, 2018, the weighted average receive rate of these interest rate swaps was 2.50%, the weighted average pay rate was 3.11% and the weighted average maturity was 15.3 years. The fair value of $0.04 million at March 31, 2018, was reflected as a reduction to loans and an increase to other assets. The ineffective portion of the interest swaps was immaterial and is not recorded in earnings. The Company assessed its counterparty risk at March 31, 2018 and determined any credit risk inherent in our derivative contracts was not material. Information about the fair value of derivative financial instruments can be found in Note K to these consolidated financial statements. |
SEGMENT INFORMATION |
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SEGMENT INFORMATION [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT INFORMATION |
Operating segments are components of an enterprise, which are evaluated regularly by the “chief operating decision maker” in deciding how to allocate resources and assess performance. The Company’s chief operating decision maker is the President and Chief Executive Officer of the Company. The Company has identified Banking, Employee Benefit Services and All Other as its reportable operating business segments. Community Bank, N.A. (the “Bank” or “CBNA”) operates the Banking segment that provides full-service banking to consumers, businesses, and governmental units in Upstate New York as well as Northeastern Pennsylvania, Vermont and Western Massachusetts. Employee Benefit Services, which includes the operating subsidiaries Benefit Plans Administrative Services, LLC, BPAS Actuarial and Pension Services, LLC, BPAS Trust Company of Puerto Rico, NRS, GTC, and Hand Benefits & Trust Company, provides employee benefit trust, collective investment fund, retirement plan administration, fund administration, transfer agency, actuarial, VEBA/HRA, and health and welfare consulting services. The All Other segment is comprised of: (a) wealth management services including trust services provided by the personal trust unit within the Bank, broker-dealer and investment advisory services provided by CISI and The Carta Group, Inc., as well as asset management provided by Nottingham Advisors, Inc., and (b) full-service insurance, risk management and employee benefit services provided by OneGroup. The accounting policies used in the disclosure of business segments are the same as those described in the summary of significant accounting policies (See Note A, Summary of Significant Accounting Policies of the most recent Form 10-K for the year ended December 31, 2017 filed with the SEC on March 1, 2018). Information about reportable segments and reconciliation of the information to the consolidated financial statements follows:
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REVENUE RECOGNITION |
3 Months Ended | ||
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Mar. 31, 2018 | |||
REVENUE RECOGNITION [Abstract] | |||
REVENUE RECOGNITION |
On January 1, 2018, the Company adopted ASU No. 2014-09 “Revenue from Contracts with Customers” (Topic 606) and all subsequent ASUs that modified Topic 606. As stated in Note C Accounting Policies, the implementation of the new standard did not have a material impact on the measurement or recognition of revenue; as such, a cumulative effect adjustment to opening retained earnings was not deemed necessary. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts were not adjusted and continue to be reported in accordance with our historic accounting under Topic 605. Topic 606 does not apply to revenue associated with financial instruments, including revenue from loans and securities. In addition, certain noninterest income streams such as fees associated with mortgage servicing rights, financial guarantees, derivatives, and certain credit card fees are also not in scope of the newly adopted guidance. Topic 606 is applicable to the Company’s noninterest revenue streams including its deposit related fees, electronic payment interchange fees, merchant income, trust, asset management and other wealth management revenues, insurance commissions and benefit plan services income. However, the recognition of these revenue streams did not change significantly upon adoption of Topic 606. Noninterest revenue streams in-scope of Topic 606 are discussed below. Deposit Service Fees Deposit service fees consist of account activity fees, monthly service fees, check orders, debit and credit card income, ATM fees, Merchant services income and other revenues from processing wire transfers, bill pay service, cashier’s checks and foreign exchange. Debit and credit card income is primarily comprised of interchange fees earned at the time the Company’s debit and credit cards are processed through card payment networks such as Visa. ATM fees are primarily generated when a Company cardholder uses a non-Company ATM or a non-Company cardholder uses a Company ATM. Merchant services income mainly represents fees charged to merchants to process their debit and credit card transactions, in addition to account management fees. The Company’s performance obligation for deposit service fees is generally satisfied, and the related revenue recognized, when the services are rendered or the transaction has been completed. Payment for deposit service fees is typically received at the time it is assessed through a direct charge to customers’ accounts or on a monthly basis. Deposit service fees revenue primarily relates to the Company’s Banking operating segment. Other Banking Services Other banking services consists of other recurring revenue streams such as commissions from sales of credit life insurance, safety deposit box rental fees, mortgage banking income, bank owned life insurance income and other miscellaneous revenue streams. Commissions from the sale of credit life insurance are recognized at the time of sale of the policies. Safe deposit box rental fees are charged to the customer on an annual basis and recognized upon receipt of payment. The Company determined that since rentals and renewals occur fairly consistently over time, revenue is recognized on a basis consistent with the duration of the performance obligation. Mortgage banking income and bank owned life insurance income are not within the scope of Topic 606. Other banking services revenue primarily relates to the Company’s Banking operating segment. Employee benefit services Employee benefit services income consists of revenue received from retirement plan services, collective investment fund services, fund administration, transfer agency, consulting and actuarial services. The Company’s performance obligation that relates to plan services are satisfied over time and the resulting fees are recognized monthly or quarterly, based upon the market value of the assets under management and the applicable fee rate or on a time expended basis. Payment is generally received a few days after month end or quarter end. The Company does not earn performance-based incentives. Transactional services such as consulting services, mailings, or other adhoc services are provided to existing trust and asset management customers. The Company’s performance obligation for these transactional-based services is generally satisfied, and related revenue recognized, at a point in time (i.e., as incurred). Payment is received shortly after services are rendered. Insurance services Insurance income primarily consists of commissions received on insurance product sales and consulting services. The Company acts in the capacity of a broker or agent between the Company’s customer and the insurance carrier. The Company’s performance obligation related to insurance sales for both property and casualty insurance and employee benefit plans is generally satisfied upon the later of the issuance or effective date of the policy. The Company’s performance obligation related to consulting services is considered transactional in nature and is generally satisfied when the services have been completed and related revenue recognized at a point in time. Payment is received at the time services are rendered. The Company earns performance based incentives, commonly known as contingency payments, which usually are based on certain criteria established by the insurance carrier such as premium volume, growth and insured loss ratios. Contingent payments are accrued for based upon management’s expectations for the year. Commission expense associated with sales of insurance products is expensed as incurred. Insurance services revenue primarily relates to the Company’s All Other operating segment. Wealth Management Services Wealth management services income is primarily comprised of fees earned from the management and administration of trusts and other customer assets. The Company generally has two types of performance obligations related to these services. The Company’s performance obligation that relates to advisory and administration services are satisfied over time and the resulting fees are recognized monthly, based upon the market value of the assets under management and the applicable fee rate. Payment is generally received soon after month end or quarter end through a direct charge to customers’ accounts. The Company does not earn performance-based incentives. Transactional services such as tax return preparation services, purchases and sales of investments and insurance products are also available to existing trust and asset management customers. The Company’s performance obligation for these transactional-based services is generally satisfied, and related revenue recognized, at a point in time (i.e. as incurred). Payment is generally received on a monthly basis. Wealth management services revenue primarily relates to the Company’s All Other operating segment. Contract Balances A contract asset balance occurs when an entity performs a service for a customer before the customer pays consideration (resulting in a contract receivable) or before payment is due (resulting in a contract asset). A contract liability balance is an entity’s obligation to transfer a service to a customer for which the entity has already received payment (or payment is due) from the customer. The Company’s noninterest revenue streams are largely based on transactional activity, or standard month-end revenue accruals such as asset management fees based on month-end market values. Consideration is often received immediately or shortly after the Company satisfies its performance obligation and revenue is recognized. The Company does not typically enter into long-term revenue contracts with customers, and therefore, does not experience significant contract balances. As of March 31, 2018, $26.4 million of accounts receivable, including $7.4 million of unbilled fee revenue, and $5.2 million of unearned revenue was recorded in the Consolidated Statements of Condition. As of December 31, 2017, $29.8 million of accounts receivable, including $6.5 million of unbilled fee revenue, and $3.9 million of unearned revenue was recorded in the Consolidated Statements of Condition. Contract Acquisition Costs In connection with the adoption of Topic 606, an entity is required to capitalize, and subsequently amortize into expense, certain incremental costs of obtaining a contract with a customer if these costs are expected to be recovered. The incremental costs of obtaining a contract are those costs that an entity incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained (for example, sales commission). The Company utilizes the practical expedient method which allows entities to immediately expense contract acquisition costs when the asset that would have resulted from capitalizing these costs would have been amortized in one year or less. Upon adoption of Topic 606, the Company did not capitalize any contract acquisition costs. |
BASIS OF PRESENTATION (Policies) |
3 Months Ended |
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Mar. 31, 2018 | |
BASIS OF PRESENTATION [Abstract] | |
Basis of Presentation | The interim financial data as of and for the three months ended March 31, 2018 is unaudited; however, in the opinion of Community Bank System, Inc. (the “Company”), the interim data includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the interim periods in conformity with generally accepted accounting principles (“GAAP”). The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the full year or any other interim period. |
ACCOUNTING POLICIES (Policies) |
3 Months Ended |
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Mar. 31, 2018 | |
ACCOUNTING POLICIES [Abstract] | |
Acquired Loans | Acquired Loans Acquired loans are initially recorded at their acquisition date fair values. The carryover of allowance for loan losses is prohibited as any credit losses in the loans are included in the determination of the fair value of the loans at the acquisition date. Fair values for acquired loans are based on a discounted cash flow methodology that involves assumptions and judgments as to credit risk, prepayment risk, liquidity risk, default rates, loss severity, payment speeds, collateral values and discount rate. Acquired Impaired Loans Acquired loans that have evidence of deterioration in credit quality since origination and for which it is probable, at acquisition, that the Company will be unable to collect all contractually required payments are accounted for as impaired loans under Accounting Standards Codification (“ASC”) 310-30. The excess of undiscounted cash flows expected at acquisition over the estimated fair value is referred to as the accretable discount and is recognized into interest income over the remaining life of the loans using the interest method. The difference between contractually required payments at acquisition and the undiscounted cash flows expected to be collected at acquisition is referred to as the non-accretable discount. The non-accretable discount represents estimated future credit losses and other contractually required payments that the Company does not expect to collect. Subsequent decreases in expected cash flows are recognized as impairments through a charge to the provision for loan losses resulting in an increase in the allowance for loan losses. Subsequent improvements in expected cash flows result in a recovery of previously recorded allowance for loan losses or a reversal of a corresponding amount of the non-accretable discount, which the Company then reclassifies as an accretable discount that is recognized into interest income over the remaining life of the loans using the interest method. Acquired loans that met the criteria for non-accrual of interest prior to acquisition may be considered performing upon acquisition, regardless of whether the customer is contractually delinquent, if the Company 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, the Company may no longer consider the loans to be non-accrual or non-performing and may accrue interest on these loans, including the impact of any accretable discount. Acquired Non-impaired Loans Acquired loans that do not meet the requirements under ASC 310-30 are considered acquired non-impaired loans. The difference between the acquisition date fair value and the outstanding balance represents the fair value adjustment for a loan and includes both credit and interest rate considerations. Fair value adjustments may be discounts (or premiums) to a loan’s cost basis and are accreted (or amortized) to net interest income (or expense) over the loan’s remaining life in accordance with ASC 310-20. Fair value adjustments for revolving loans are accreted (or amortized) using a straight line method. Term loans are accreted (or amortized) using the constant effective yield method. Subsequent to the purchase date, the methods used to estimate the allowance for loan losses for the acquired non-impaired loans are consistent with the policy described below. However, the Company compares the net realizable value of the loans to the carrying value, for loans collectively evaluated for impairment. The carrying value represents the net of the loan’s unpaid principal balance and the remaining purchase discount (or premium) that has yet to be accreted into interest income. When the carrying value exceeds the net realizable value, an allowance for loan loss is recognized. |
Allowance for Loan Losses | Allowance for Loan Losses Management continually evaluates the credit quality of the Company’s loan portfolio, and performs a formal review of the adequacy of the allowance for loan losses on a quarterly basis. The allowance reflects management’s best estimate of probable losses inherent in the loan portfolio. Determination of the allowance is subjective in nature and requires significant estimates. The Company’s allowance methodology consists of two broad components - general and specific loan loss allocations. The general loan loss allocation is composed of two calculations that are computed on five main loan segments: business lending; consumer direct; consumer indirect; home equity; and consumer mortgage. The first calculation is quantitative and determines an allowance level based on the latest 36 months of historical net charge-off data for each loan class (commercial loans exclude balances with specific loan loss allocations). The second calculation is qualitative and takes into consideration eight qualitative environmental factors: levels of and trends in delinquencies and impaired loans; levels of and trends in charge-offs and recoveries; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards, and other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentrations. A component of the qualitative calculation is the unallocated allowance for loan loss. The qualitative and quantitative calculations are added together to determine the general loan loss allocation. The specific loan loss allocation relates to individual commercial loans that are both greater than $0.5 million and in a nonaccruing status with respect to interest. Specific loan losses are based on discounted estimated cash flows, including any cash flows resulting from the conversion of collateral or collateral shortfalls. The allowance levels computed from the specific and general loan loss allocation methods are combined with unallocated allowances and allowances needed for acquired loans to derive the total required allowance for loan losses to be reflected on the Consolidated Statement of Condition. Loan losses are charged off against the allowance, while recoveries of amounts previously charged off are credited to the allowance. A provision for loan losses is charged to operations based on management’s periodic evaluation of factors previously mentioned. |
Investment Securities | Investment Securities The Company can classify its investments in debt and equity securities as held-to-maturity, available-for-sale, or trading. Held-to-maturity securities are those for which the Company has the positive intent and ability to hold until maturity, and are reported at cost, which is adjusted for amortization of premiums and accretion of discounts. Securities classified as available-for-sale are reported at fair value with net unrealized gains and losses reflected as a separate component of shareholders’ equity, net of applicable income taxes. None of the Company’s investment securities have been classified as trading securities at March 31, 2018. Certain equity securities are stated at cost and include restricted stock of the Federal Reserve Bank of New York (“Federal Reserve”), the Federal Home Loan Bank of New York and the Federal Home Loan Bank of Boston (collectively referred to as “FHLB”). Fair values for investment securities are based upon quoted market prices, where available. If quoted market prices are not available, fair values are based upon quoted market prices of comparable instruments, or a discounted cash flow model using market estimates of interest rates and volatility. The Company conducts an assessment of all securities in an unrealized loss position to determine if other-than-temporary impairment (“OTTI”) exists on a quarterly basis. An unrealized loss exists when the current fair value of an individual security is less than its amortized cost basis. The OTTI assessment considers the security structure, recent security collateral performance metrics, if applicable, external credit ratings, failure of the issuer to make scheduled interest or principal payments, judgment about, and expectations of, future performance, and relevant independent industry research, analysis and forecasts. The severity of the impairment and the length of time the security has been impaired is also considered in the assessment. The assessment of whether an OTTI decline exists is performed on each security, regardless of the classification of the security as available-for-sale or held-to-maturity and involves a high degree of subjectivity and judgment that is based on the information available to management at a point in time. An OTTI loss must be recognized for a debt security in an unrealized loss position if there is intent to sell the security or it is more likely than not the Company will be required to sell the security prior to recovery of its amortized cost basis. In this situation, the amount of loss recognized in income is equal to the difference between the fair value and the amortized cost basis of the security. Even if management does not have the intent, and it is not more likely than not that the Company will be required to sell the securities, an evaluation of the expected cash flows to be received is performed to determine if a credit loss has occurred. For debt securities, a critical component of the evaluation for OTTI is the identification of credit-impaired securities, where the Company does not expect to receive cash flows sufficient to recover the entire amortized cost basis of the security. In the event of a credit loss, only the amount of impairment associated with the credit loss would be recognized in income. The portion of the unrealized loss relating to other factors, such as liquidity conditions in the market or changes in market interest rates, is recorded in accumulated other comprehensive loss. Equity securities are also evaluated to determine whether the unrealized loss is expected to be recoverable based on whether evidence exists to support a realizable value equal to or greater than the amortized cost basis. If it is probable that the amortized cost basis will not be recovered, taking into consideration the estimated recovery period and the ability to hold the equity security until recovery, OTTI is recognized in earnings equal to the difference between the fair value and the amortized cost basis of the security. The specific identification method is used in determining the realized gains and losses on sales of investment securities and OTTI charges. Premiums and discounts on securities are amortized and accreted, respectively, on the interest method basis over the period to maturity or estimated life of the related security. Purchases and sales of securities are recognized on a trade date basis. |
Intangible Assets | Intangible Assets Intangible assets include core deposit intangibles, customer relationship intangibles and goodwill arising from acquisitions. Core deposit intangibles and customer relationship intangibles are amortized on either an accelerated or straight-line basis over periods ranging from seven to 20 years. The initial and ongoing carrying value of goodwill and other intangible assets is based upon discounted cash flow modeling techniques that require management to make estimates regarding the amount and timing of expected future cash flows. It also requires use of a discount rate that reflects the current return requirements of the market in relation to present risk-free interest rates, required equity market premiums, peer volatility indicators, and company-specific risk indicators. The Company evaluates goodwill for impairment on an annual basis, or more often if events or circumstances indicate there may be impairment. The implied fair value of a reporting unit’s goodwill is compared to its carrying amount and the impairment loss is measured by the excess of the carrying value over fair value. The fair value of each reporting unit is compared to the carrying amount of such reporting unit in order to determine if impairment is indicated. |
Retirement Benefits | Retirement Benefits The Company provides defined benefit pension benefits to eligible employees and post-retirement health and life insurance benefits to certain eligible retirees. The Company also provides deferred compensation and supplemental executive retirement plans for selected current and former employees, officers, and directors. Expense under these plans is charged to current operations and consists of several components of net periodic benefit cost based on various actuarial assumptions regarding future experience under the plans, including discount rate, rate of future compensation increases, and expected return on plan assets. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). This new guidance supersedes the revenue recognition requirements in ASC 605, Revenue Recognition, and is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects consideration to which the entity expects to be entitled in exchange for those goods and services. In doing so, companies generally will be required to use more judgment and make more estimates than under prior guidance. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. Since the guidance does not apply to revenue associated with financial instruments, including loans and securities that are accounted for under other GAAP, the new guidance did not have a material impact on revenue most closely associated with financial instruments, including interest income, interest expense and mortgage banking income. The Company completed a comprehensive assessment of the revenue streams and reviewed related contracts potentially affected by the ASU for all segments of its business. Based on this assessment, the Company concluded that ASU 2014-09 did not materially change the manner in which the Company recognized revenue for these revenue streams. The Company also completed its evaluation of certain costs related to these revenue streams to determine whether such costs should be presented as expenses or contra-revenue (i.e. gross versus net) and timing of compensatory payments to producers. Based on the Company’s evaluation, it was determined that changes in the presentation of expenses and timing of the recognition of compensation expense did not materially affect noninterest income or expense. The Company adopted this guidance on January 1, 2018 utilizing the modified retrospective approach. Since there was no net income impact upon adoption of the new guidance, a cumulative effect adjustment to opening retained earnings was not deemed necessary. See Note N: Revenue Recognition for more information. In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. This guidance addresses certain aspects of recognition, measurement, presentation and disclosure of financial instruments. The primary focus of this guidance is to supersede the guidance to classify equity securities with readily determinable fair values into different categories (trading or available-for-sale) and requires equity securities to be measured at fair value with changes in the fair value recognized through net income. This guidance requires adoption through a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. This ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company adopted this guidance on January 1, 2018. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230). The amendments provide guidance on the following eight specific cash flow issues: 1) debt prepayment or debt extinguishment costs; 2) settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; 3) contingent consideration payments made after a business combination; 4) proceeds from the settlement of insurance claims; 5) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies; 6) distributions received from equity method investees; 7) beneficial interests in securitization transactions; and 8) separately identifiable cash flows and application of the predominance principle. This ASU is effective for fiscal years beginning after December 31, 2017, including interim periods within those fiscal years. The Company adopted this guidance on January 1, 2018 on a retrospective basis. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements. In March 2017, the FASB issued ASU No. 2017-07, Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. This new guidance requires the service cost component of net periodic pension and postretirement benefit costs to be presented separately from other components of net benefit cost in the statement of income. This ASU is effective for the Company for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company adopted this guidance on January 1, 2018 and applied the guidance on a modified retrospective basis for the presentation of other components of net periodic benefit cost in the Consolidated Statements of Income. The impact of the adoption of this guidance resulted in the reclassification of net periodic benefit income of $1.5 million from salaries and employee benefits to other expenses in the Consolidated Statement of Income for the three months ended March 31, 2017. |
New Accounting Pronouncements | New Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This new guidance supersedes the lease requirements in Topic 840, Leases and is based on the principle that a lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. The accounting applied by a lessor is largely unchanged from that applied under the previous guidance. In addition, the guidance requires an entity to separate the lease components from the nonlease components in a contract. The ASU requires disclosures about the amount, timing, and judgments related to a reporting entity’s accounting for leases and related cash flows. The standard is required to be applied to all leases in existence as of the date of adoption using a modified retrospective transition approach. This guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted for all companies in any interim or annual period. The Company occupies certain offices and uses certain equipment under non-cancelable operating lease agreements, which currently are not reflected in its consolidated statement of condition. The Company expects to recognize lease liabilities and right of use assets associated with these lease agreements; however, the extent of the impact on the Company’s consolidated financial statements is currently under evaluation. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326). This new guidance significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. This ASU will replace the “incurred loss” model under existing guidance with an “expected loss” model for instruments measured at amortized cost, and require entities to record allowances for available-for-sale debt securities rather than reduce the carrying amount, as they do today under the other-than-temporary impairment model. This ASU also simplifies the accounting model for purchased credit-impaired debt securities and loans. This guidance requires adoption through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. This ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for all companies as of fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the impact the guidance will have on the Company’s consolidated financial statements, and expects a change in the allowance for loan losses resulting from the change to expected losses for the estimated life of the financial asset, including an allowance for debt securities. The amount of the change in the allowance for loan losses resulting from the new guidance will be impacted by the portfolio composition and asset quality at the adoption date, as well as economic conditions and forecasts at the time of adoption. In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350). The amendments simplify how an entity is required to test goodwill for impairment by eliminating the requirement to measure a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. Instead, an entity will perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount, and recognize an impairment charge for the amount by which the carrying amount of the reporting unit exceeds its fair value. Impairment loss recognized under this new guidance will be limited to the goodwill allocated to the reporting unit. This ASU is effective prospectively for the Company for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. This ASU is not expected to have a material impact on the Company’s consolidated financial statements. In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. This new guidance amends current guidance to better align hedge accounting with risk management activities and reduce the complexity involved in applying hedge accounting. Under this new guidance, the concept of hedge ineffectiveness will be eliminated. Ineffective income generated by cash flow and net investment hedges will be recognized in the same financial reporting period and income statement line item as effective income, so as to reflect the full cost of hedging at one time and in one place. Ineffective income generated by fair value hedges will continue to be reflected in current period earnings; however, it will be recognized in the same income statement line item as effective income. The guidance will also allow any contractually specified variable rate to be designated as the hedged risk in a cash flow hedge. With respect to fair value hedges of interest rate risk, the guidance will allow changes in the fair value of the hedged item to be calculated solely using changes in the benchmark interest rate component of the instrument’s total contractual coupon cash flows. This ASU is effective for the Company for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. This ASU is not expected to have a material impact on the Company’s consolidated financial statements. |
ACQUISITIONS (Tables) |
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ACQUISITIONS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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:
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Summary of Loans Acquired | The following is a summary of the loans acquired from Merchants at the date of acquisition:
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INVESTMENT SECURITIES (Tables) |
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INVESTMENT SECURITIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortized Cost and Estimated Fair Value of Investment Securities | The amortized cost and estimated fair value of investment securities as of March 31, 2018 and December 31, 2017 are as follows:
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Summary of Investment Securities That Have Been in a Continuous Unrealized Loss Position for Less Than or Greater Than Twelve Months | A summary of investment securities that have been in a continuous unrealized loss position is as follows: As of March 31, 2018
As of December 31, 2017
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Amortized Cost and Estimated Fair Value of Debt Securities by Contractual Maturity | The amortized cost and estimated fair value of debt securities at March 31, 2018, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately.
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LOANS (Tables) |
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Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Loans Receivable, Net | The balances of these classes are summarized as follows:
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Schedule of Accretable Discount Related to Credit Impaired Acquired Loans | The changes in the accretable discount related to the credit impaired acquired loans are as follows:
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Aged Analysis of Past Due Loans by Class | Legacy Loans (excludes loans acquired after January 1, 2009)
Acquired Loans (includes loans acquired after January 1, 2009)
The following is an aged analysis of the Company’s past due loans by class as of December 31, 2017: Legacy Loans (excludes loans acquired after January 1, 2009)
Acquired Loans (includes loans acquired after January 1, 2009)
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Summary of Non-Business Impaired Loans | A summary of individually evaluated impaired loans as of March 31, 2018 and December 31, 2017 follows:
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Troubled Debt Restructurings on Financing Receivables | Information regarding TDRs as of March 31, 2018 and December 31, 2017 is as follows:
The following table presents information related to loans modified in a TDR during the three months ended March 31, 2018 and 2017. Of the loans noted in the table below, all loans for the three months ended March 31, 2018 and 2017 were modified due to a Chapter 7 bankruptcy as described previously. The financial effects of these restructurings were immaterial.
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Schedule of Allowance for Loan Losses by Class | The following presents by class the activity in the allowance for loan losses:
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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:
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All Other Loans [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 March 31, 2018: Legacy Loans (excludes loans acquired after January 1, 2009)
Acquired Loans (includes loans acquired after January 1, 2009)
The following table details the balances in all other loan categories at December 31, 2017: Legacy Loans (excludes loans acquired after January 1, 2009)
Acquired Loans (includes loans acquired after January 1, 2009)
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GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gross Carrying Amount and Accumulated Amortization of Identifiable Intangible Assets | The gross carrying amount and accumulated amortization for each type of identifiable intangible asset are as follows:
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Estimated Aggregate Amortization Expense for Each of Five Succeeding Fiscal Years | The estimated aggregate amortization expense for each of the five succeeding fiscal years ended December 31 is as follows:
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Components of Goodwill | Shown below are the components of the Company’s goodwill at December 31, 2017 and March 31, 2018:
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MANDATORILY REDEEMABLE PREFERRED SECURITIES (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||
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Mar. 31, 2018 | |||||||||||||||||||||||||||||
MANDATORILY REDEEMABLE PREFERRED SECURITIES [Abstract] | |||||||||||||||||||||||||||||
Terms of Preferred Securities | The terms of the preferred securities of each trust are as follows:
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BENEFIT PLANS (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BENEFIT PLANS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Periodic Benefit Cost | The net periodic benefit cost for the three months ended March 31, 2018 and 2017 is as follows:
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EARNINGS PER SHARE (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER SHARE [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Basic to Diluted Earnings per Share | The following is a reconciliation of basic to diluted earnings per share for the three months ended March 31, 2018 and 2017:
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COMMITMENTS, CONTINGENT LIABILITIES AND RESTRICTIONS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||
COMMITMENTS, CONTINGENT LIABILITIES AND RESTRICTIONS [Abstract] | |||||||||||||||||||||||||||||||||||||
Off Balance Sheet Financial Instruments Contract Amounts | The contract amounts of commitments and contingencies are as follows:
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FAIR VALUE (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Fair Value Measured on a Recurring Basis | 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.
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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.
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Significant Unobservable Inputs, Fair Value Valuation Techniques | 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:
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Carrying Amounts and Estimated Fair Values of Other Financial Instruments | The carrying amounts and estimated fair values of the Company’s other financial instruments that are not accounted for at fair value at March 31, 2018 and December 31, 2017 are as follows:
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SEGMENT INFORMATION (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT INFORMATION [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information by Segment | Information about reportable segments and reconciliation of the information to the consolidated financial statements follows:
|
ACQUISITIONS, Summary of Loans Acquired (Details) - Merchants Bancshares, Inc. [Member] $ in Thousands |
May 12, 2017
USD ($)
|
---|---|
Summary of loans acquired [Abstract] | |
Contractually required principal and interest at acquisition | $ 1,888,028 |
Contractual cash flows not expected to be collected | (20,138) |
Expected cash flows at acquisition | 1,867,890 |
Interest component of expected cash flows | (379,733) |
Fair value of acquired loans | 1,488,157 |
Acquired Impaired Loans [Member] | |
Summary of loans acquired [Abstract] | |
Contractually required principal and interest at acquisition | 15,454 |
Contractual cash flows not expected to be collected | (5,385) |
Expected cash flows at acquisition | 10,069 |
Interest component of expected cash flows | (793) |
Fair value of acquired loans | 9,276 |
Acquired Non-impaired Loans [Member] | |
Summary of loans acquired [Abstract] | |
Contractually required principal and interest at acquisition | 1,872,574 |
Contractual cash flows not expected to be collected | (14,753) |
Expected cash flows at acquisition | 1,857,821 |
Interest component of expected cash flows | (378,940) |
Fair value of acquired loans | $ 1,478,881 |
ACQUISITIONS, Intangible Asset, Goodwill and Acquisition-related Expenses (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Summary of loans acquired [Abstract] | ||
Merger and acquisition integration-related expenses | $ (8) | $ 1,716 |
Penna & Associates Agency, Inc. [Member] | Core Deposits [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 8 years | |
Penna & Associates Agency, Inc. [Member] | Other Intangibles [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 8 years | |
Styles Bridges Associates [Member] | Core Deposits [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 8 years | |
Styles Bridges Associates [Member] | Other Intangibles [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 8 years | |
Gordon B. Roberts Agency, Inc [Member] | Core Deposits [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 8 years | |
Gordon B. Roberts Agency, Inc [Member] | Other Intangibles [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 8 years | |
Northeast Capital Management, Inc [Member] | Core Deposits [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 8 years | |
Northeast Capital Management, Inc [Member] | Other Intangibles [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 8 years | |
Merchants Bancshares, Inc. [Member] | Core Deposits [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 8 years | |
Merchants Bancshares, Inc. [Member] | Other Intangibles [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 8 years | |
Benefits Advisory Service, Inc [Member] | Core Deposits [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 8 years | |
Benefits Advisory Service, Inc [Member] | Other Intangibles [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 8 years | |
Dryfoos Insurance Agency, Inc [Member] | Core Deposits [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 8 years | |
Dryfoos Insurance Agency, Inc [Member] | Other Intangibles [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 8 years |
ACCOUNTING POLICIES (Details) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018
USD ($)
Component
Calculation
Segment
Factor
|
Mar. 31, 2017
USD ($)
|
|
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Number of broad components used in allowance methodology | Component | 2 | |
Number of calculations used for general loan loss allocation | Calculation | 2 | |
Number of main loan segments | Segment | 5 | |
Period of historical net charge-off data for each loan class used in determining allowance level | 36 months | |
Number of qualitative environmental factors used in qualitative calculation for loan loss allocation | Factor | 8 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Salaries and employee benefits | $ 51,859 | $ 42,907 |
Other expenses | $ 2,938 | 2,545 |
Core Deposits [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible asset useful life (amortization period) | 7 years | |
Core Deposits [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible asset useful life (amortization period) | 20 years | |
Customer Relationships [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible asset useful life (amortization period) | 7 years | |
Customer Relationships [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible asset useful life (amortization period) | 20 years | |
Commercial Portfolio Segment [Member] | Minimum [Member] | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | ||
Threshold balance of loans individually evaluated for impairment | $ 500 | |
ASU 2017-07 [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Salaries and employee benefits | (1,500) | |
Other expenses | $ 1,500 |
INVESTMENT SECURITIES (Details) - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Available-for-Sale Portfolio [Abstract] | ||
Amortized cost | $ 3,005,165 | $ 3,007,148 |
Gross unrealized gains | 13,580 | 33,501 |
Gross unrealized losses | 31,455 | 9,561 |
Fair value | 2,987,290 | 3,031,088 |
Available For Sale Debt Securities Amortized Cost Basis [Abstract] | ||
Amortized cost | 3,004,915 | |
Fair value | 2,986,769 | |
Other Securities [Abstract] | ||
Amortized cost | 45,352 | 50,291 |
Fair value | 45,352 | 50,291 |
U.S. Treasury and Agency Securities [Member] | ||
Available For Sale Debt Securities Amortized Cost Basis [Abstract] | ||
Amortized cost | 2,044,795 | 2,043,023 |
Gross unrealized gains | 1,962 | 15,886 |
Gross unrealized losses | 18,843 | 4,838 |
Fair value | 2,027,914 | 2,054,071 |
Obligations of State and Political Subdivisions [Member] | ||
Available For Sale Debt Securities Amortized Cost Basis [Abstract] | ||
Amortized cost | 502,517 | 514,949 |
Gross unrealized gains | 9,126 | 14,064 |
Gross unrealized losses | 1,335 | 57 |
Fair value | 510,308 | 528,956 |
Government Agency Mortgage-Backed Securities [Member] | ||
Available For Sale Debt Securities Amortized Cost Basis [Abstract] | ||
Amortized cost | 371,857 | 358,180 |
Gross unrealized gains | 2,132 | 3,121 |
Gross unrealized losses | 9,450 | 3,763 |
Fair value | 364,539 | 357,538 |
Corporate Debt Securities [Member] | ||
Available For Sale Debt Securities Amortized Cost Basis [Abstract] | ||
Amortized cost | 2,633 | 2,648 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | 54 | 25 |
Fair value | 2,579 | 2,623 |
Government Agency Collateralized Mortgage Obligations [Member] | ||
Available For Sale Debt Securities Amortized Cost Basis [Abstract] | ||
Amortized cost | 83,113 | 88,097 |
Gross unrealized gains | 89 | 155 |
Gross unrealized losses | 1,773 | 878 |
Fair value | 81,429 | 87,374 |
Marketable Equity Securities [Member] | ||
Available For Sale Equity Securities Amortized Cost Basis [Abstract] | ||
Amortized cost | 250 | 251 |
Gross unrealized gains | 271 | 275 |
Gross unrealized losses | 0 | 0 |
Fair value | 521 | 526 |
Federal Home Loan Bank Common Stock [Member] | ||
Other Securities [Abstract] | ||
Amortized cost | 8,801 | 9,896 |
Fair value | 8,801 | 9,896 |
Federal Reserve Bank Common Stock [Member] | ||
Other Securities [Abstract] | ||
Amortized cost | 30,690 | 30,690 |
Fair value | 30,690 | 30,690 |
Certificates of Deposit [Member] | ||
Other Securities [Abstract] | ||
Amortized cost | 0 | 3,865 |
Fair value | 0 | 3,865 |
Other Equity Securities [Member] | ||
Other Securities [Abstract] | ||
Amortized cost | 5,861 | 5,840 |
Fair value | $ 5,861 | $ 5,840 |
INVESTMENT SECURITIES, Investment Securities in a Continuous Unrealized Loss Position (Details) $ in Thousands |
Mar. 31, 2018
USD ($)
Position
|
Dec. 31, 2017
USD ($)
Position
|
---|---|---|
Available-for-Sale Portfolio in Unrealized Loss Positions, Number of Positions [Abstract] | ||
Less than 12 months | Position | 482 | 249 |
12 months or longer | Position | 59 | 56 |
Total | Position | 541 | 305 |
Available-for-Sale Securities, in Unrealized Loss Position, Fair Value [Abstract] | ||
Less than 12 months | $ 1,729,339 | $ 991,521 |
12 months or longer | 75,600 | 75,713 |
Total | 1,804,939 | 1,067,234 |
Available-for-Sale Portfolio, Debt Maturities, Gross Unrealized Losses [Abstract] | ||
Less than 12 months | 27,315 | 7,231 |
12 months or longer | 4,140 | 2,330 |
Total | $ 31,455 | $ 9,561 |
U.S. Treasury and Agency Securities [Member] | ||
Available-for-Sale Portfolio in Unrealized Loss Positions, Number of Positions [Abstract] | ||
Less than 12 months | Position | 69 | 44 |
12 months or longer | Position | 0 | 0 |
Total | Position | 69 | 44 |
Available-for-Sale Securities, in Unrealized Loss Position, Fair Value [Abstract] | ||
Less than 12 months | $ 1,316,113 | $ 699,709 |
12 months or longer | 0 | 0 |
Total | 1,316,113 | 699,709 |
Available-for-Sale Portfolio, Debt Maturities, Gross Unrealized Losses [Abstract] | ||
Less than 12 months | 18,843 | 4,838 |
12 months or longer | 0 | 0 |
Total | $ 18,843 | $ 4,838 |
Obligations of State and Political Subdivisions [Member] | ||
Available-for-Sale Portfolio in Unrealized Loss Positions, Number of Positions [Abstract] | ||
Less than 12 months | Position | 224 | 45 |
12 months or longer | Position | 0 | 0 |
Total | Position | 224 | 45 |
Available-for-Sale Securities, in Unrealized Loss Position, Fair Value [Abstract] | ||
Less than 12 months | $ 110,119 | $ 23,432 |
12 months or longer | 0 | 0 |
Total | 110,119 | 23,432 |
Available-for-Sale Portfolio, Debt Maturities, Gross Unrealized Losses [Abstract] | ||
Less than 12 months | 1,335 | 57 |
12 months or longer | 0 | 0 |
Total | $ 1,335 | $ 57 |
Government Agency Mortgage-Backed Securities [Member] | ||
Available-for-Sale Portfolio in Unrealized Loss Positions, Number of Positions [Abstract] | ||
Less than 12 months | Position | 148 | 120 |
12 months or longer | Position | 58 | 55 |
Total | Position | 206 | 175 |
Available-for-Sale Securities, in Unrealized Loss Position, Fair Value [Abstract] | ||
Less than 12 months | $ 225,378 | $ 185,716 |
12 months or longer | 75,599 | 75,712 |
Total | 300,977 | 261,428 |
Available-for-Sale Portfolio, Debt Maturities, Gross Unrealized Losses [Abstract] | ||
Less than 12 months | 5,310 | 1,433 |
12 months or longer | 4,140 | 2,330 |
Total | $ 9,450 | $ 3,763 |
Corporate Debt Securities [Member] | ||
Available-for-Sale Portfolio in Unrealized Loss Positions, Number of Positions [Abstract] | ||
Less than 12 months | Position | 1 | 1 |
12 months or longer | Position | 0 | 0 |
Total | Position | 1 | 1 |
Available-for-Sale Securities, in Unrealized Loss Position, Fair Value [Abstract] | ||
Less than 12 months | $ 2,579 | $ 2,623 |
12 months or longer | 0 | 0 |
Total | 2,579 | 2,623 |
Available-for-Sale Portfolio, Debt Maturities, Gross Unrealized Losses [Abstract] | ||
Less than 12 months | 54 | 25 |
12 months or longer | 0 | 0 |
Total | $ 54 | $ 25 |
Government Agency Collateralized Mortgage Obligations [Member] | ||
Available-for-Sale Portfolio in Unrealized Loss Positions, Number of Positions [Abstract] | ||
Less than 12 months | Position | 40 | 39 |
12 months or longer | Position | 1 | 1 |
Total | Position | 41 | 40 |
Available-for-Sale Securities, in Unrealized Loss Position, Fair Value [Abstract] | ||
Less than 12 months | $ 75,150 | $ 80,041 |
12 months or longer | 1 | 1 |
Total | 75,151 | 80,042 |
Available-for-Sale Portfolio, Debt Maturities, Gross Unrealized Losses [Abstract] | ||
Less than 12 months | 1,773 | 878 |
12 months or longer | 0 | 0 |
Total | $ 1,773 | $ 878 |
INVESTMENT SECURITIES, Amortized Cost and Estimated Fair Value of Debt Securities by Contractual Maturity (Details) - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Available-for-Sale, Debt Maturities, Amortized Cost [Abstract] | ||
Due in one year or less | $ 53,102 | |
Due after one through five years | 1,557,644 | |
Due after five years through ten years | 789,557 | |
Due after ten years | 149,642 | |
Subtotal | 2,549,945 | |
Amortized cost | 3,004,915 | |
Available-for-Sale, Debt Maturities, Fair Value [Abstract] | ||
Due in one year or less | 53,115 | |
Due after one through five years | 1,546,876 | |
Due after five years through ten years | 788,557 | |
Due after ten years | 152,253 | |
Subtotal | 2,540,801 | |
Fair value | 2,986,769 | |
Government Agency Mortgage-Backed Securities [Member] | ||
Available-for-Sale, Debt Maturities, Amortized Cost [Abstract] | ||
Without single maturity date | 371,857 | |
Amortized cost | 371,857 | $ 358,180 |
Available-for-Sale, Debt Maturities, Fair Value [Abstract] | ||
Without single maturity date | 364,539 | |
Fair value | 364,539 | 357,538 |
Government Agency Collateralized Mortgage Obligations [Member] | ||
Available-for-Sale, Debt Maturities, Amortized Cost [Abstract] | ||
Without single maturity date | 83,113 | |
Amortized cost | 83,113 | 88,097 |
Available-for-Sale, Debt Maturities, Fair Value [Abstract] | ||
Without single maturity date | 81,429 | |
Fair value | 81,429 | 87,374 |
U.S. Treasury Securities [Member] | ||
Available-for-Sale, Debt Maturities, Amortized Cost [Abstract] | ||
Amortized cost | 2,044,795 | 2,043,023 |
Available-for-Sale, Debt Maturities, Fair Value [Abstract] | ||
Fair value | 2,027,914 | $ 2,054,071 |
Securities pledged as collateral for securities sold under agreement to repurchase | $ 279,700 |
LOANS, Loan Summary (Details) - USD ($) $ in Thousands |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2018 |
Dec. 31, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
|
Loans receivable, net [Abstract] | ||||
Gross loans, including deferred origination costs | $ 6,227,030 | $ 6,256,757 | ||
Allowance for loan losses | (48,103) | (47,583) | $ (47,096) | $ (47,233) |
Net loans | 6,178,927 | 6,209,174 | ||
Credit impaired acquired loans, total balance due | 11,100 | 13,400 | ||
Accretable discount related to credit impaired acquired loans [Roll forward] | ||||
Beginning Balance | 976 | |||
Accretion recognized, year-to-date | (278) | |||
Net reclassification between accretable and non-accretable | 300 | |||
Ending Balance | 998 | |||
Business Lending [Member] | ||||
Loans receivable, net [Abstract] | ||||
Gross loans, including deferred origination costs | $ 2,426,086 | 2,424,223 | ||
Consumer Mortgage [Member] | Minimum [Member] | ||||
Loans receivable, net [Abstract] | ||||
Typical contract term | 10 years | |||
Consumer Mortgage [Member] | Maximum [Member] | ||||
Loans receivable, net [Abstract] | ||||
Typical contract term | 30 years | |||
Home Equity [Member] | Maximum [Member] | ||||
Loans receivable, net [Abstract] | ||||
Typical contract term | 30 years | |||
Commercial Portfolio Segment [Member] | Business Lending [Member] | ||||
Loans receivable, net [Abstract] | ||||
Gross loans, including deferred origination costs | $ 2,426,086 | 2,424,223 | ||
Commercial Portfolio Segment [Member] | Consumer Mortgage [Member] | ||||
Loans receivable, net [Abstract] | ||||
Allowance for loan losses | (10,382) | (10,465) | (10,149) | (10,094) |
Residential Portfolio Segment [Member] | Business Lending [Member] | ||||
Loans receivable, net [Abstract] | ||||
Allowance for loan losses | (17,607) | (17,257) | (16,857) | (17,220) |
Residential Portfolio Segment [Member] | Consumer Mortgage [Member] | ||||
Loans receivable, net [Abstract] | ||||
Gross loans, including deferred origination costs | 2,211,882 | 2,220,298 | ||
Consumer Portfolio Segment [Member] | Consumer Indirect [Member] | ||||
Loans receivable, net [Abstract] | ||||
Gross loans, including deferred origination costs | 1,008,198 | 1,011,978 | ||
Allowance for loan losses | (13,698) | (13,468) | (13,996) | (13,782) |
Consumer Portfolio Segment [Member] | Consumer Direct [Member] | ||||
Loans receivable, net [Abstract] | ||||
Gross loans, including deferred origination costs | 173,032 | 179,929 | ||
Allowance for loan losses | (2,984) | (3,039) | (2,852) | (2,979) |
Consumer Portfolio Segment [Member] | Home Equity [Member] | ||||
Loans receivable, net [Abstract] | ||||
Gross loans, including deferred origination costs | 407,832 | 420,329 | ||
Allowance for loan losses | $ (2,040) | $ (2,107) | $ (2,359) | $ (2,399) |
LOANS, Credit Quality By Past Due Status (Details) - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
|||
---|---|---|---|---|---|
Aged analysis of the company's loans [Abstract] | |||||
Total loans | $ 6,227,030 | $ 6,256,757 | |||
Legacy Loans [Member] | |||||
Aged analysis of the company's loans [Abstract] | |||||
90 + days past due and still accruing | 5,894 | 2,508 | |||
Nonaccrual | 15,161 | 16,020 | |||
Total past due | 47,512 | 51,563 | |||
Current | 4,644,368 | 4,568,100 | |||
Total loans | 4,691,880 | 4,619,663 | |||
Legacy Loans [Member] | Past Due 30 - 89 Days [Member] | |||||
Aged analysis of the company's loans [Abstract] | |||||
Total past due | 26,457 | 33,035 | |||
Acquired Loans [Member] | |||||
Aged analysis of the company's loans [Abstract] | |||||
90 + days past due and still accruing | 531 | 204 | |||
Nonaccrual | 8,078 | 8,720 | |||
Total past due | 15,452 | 17,167 | |||
Acquired impaired | [1] | 8,496 | 10,115 | ||
Current | 1,511,202 | 1,609,812 | |||
Total loans | 1,535,150 | 1,637,094 | |||
Acquired Loans [Member] | Past Due 30 - 89 Days [Member] | |||||
Aged analysis of the company's loans [Abstract] | |||||
Total past due | 6,843 | 8,243 | |||
Business Lending [Member] | |||||
Aged analysis of the company's loans [Abstract] | |||||
Total loans | 2,426,086 | 2,424,223 | |||
Business Lending [Member] | Legacy Loans [Member] | |||||
Aged analysis of the company's loans [Abstract] | |||||
Total loans | 1,450,006 | 1,376,599 | |||
Business Lending [Member] | Acquired Loans [Member] | |||||
Aged analysis of the company's loans [Abstract] | |||||
Total loans | 976,080 | 1,047,624 | |||
Consumer Mortgage [Member] | Legacy Loans [Member] | |||||
Aged analysis of the company's loans [Abstract] | |||||
Total loans | 1,765,864 | 1,754,609 | |||
Consumer Mortgage [Member] | Acquired Loans [Member] | |||||
Aged analysis of the company's loans [Abstract] | |||||
Total loans | 446,018 | 465,689 | |||
Consumer Indirect [Member] | Legacy Loans [Member] | |||||
Aged analysis of the company's loans [Abstract] | |||||
Total loans | 990,766 | 991,836 | |||
Consumer Indirect [Member] | Acquired Loans [Member] | |||||
Aged analysis of the company's loans [Abstract] | |||||
Total loans | 17,432 | 20,142 | |||
Consumer Direct [Member] | Legacy Loans [Member] | |||||
Aged analysis of the company's loans [Abstract] | |||||
Total loans | 168,517 | 174,479 | |||
Consumer Direct [Member] | Acquired Loans [Member] | |||||
Aged analysis of the company's loans [Abstract] | |||||
Total loans | 4,515 | 5,450 | |||
Home Equity [Member] | Legacy Loans [Member] | |||||
Aged analysis of the company's loans [Abstract] | |||||
Total loans | 316,727 | 322,140 | |||
Home Equity [Member] | Acquired Loans [Member] | |||||
Aged analysis of the company's loans [Abstract] | |||||
Total loans | 91,105 | 98,189 | |||
Commercial Portfolio Segment [Member] | Business Lending [Member] | |||||
Aged analysis of the company's loans [Abstract] | |||||
Total loans | 2,426,086 | 2,424,223 | |||
Commercial Portfolio Segment [Member] | Business Lending [Member] | Legacy Loans [Member] | |||||
Aged analysis of the company's loans [Abstract] | |||||
90 + days past due and still accruing | 4,069 | 571 | |||
Nonaccrual | 3,831 | 3,944 | |||
Total past due | 12,962 | 6,798 | |||
Current | 1,437,044 | 1,369,801 | |||
Total loans | 1,450,006 | 1,376,599 | |||
Commercial Portfolio Segment [Member] | Business Lending [Member] | Legacy Loans [Member] | Past Due 30 - 89 Days [Member] | |||||
Aged analysis of the company's loans [Abstract] | |||||
Total past due | 5,062 | 2,283 | |||
Commercial Portfolio Segment [Member] | Business Lending [Member] | Acquired Loans [Member] | |||||
Aged analysis of the company's loans [Abstract] | |||||
90 + days past due and still accruing | 0 | 0 | |||
Nonaccrual | 3,967 | 4,328 | |||
Total past due | 8,086 | 8,989 | |||
Acquired impaired | [1] | 8,496 | 10,115 | ||
Current | 959,498 | 1,028,520 | |||
Total loans | 976,080 | 1,047,624 | |||
Commercial Portfolio Segment [Member] | Business Lending [Member] | Acquired Loans [Member] | Past Due 30 - 89 Days [Member] | |||||
Aged analysis of the company's loans [Abstract] | |||||
Total past due | 4,119 | 4,661 | |||
Residential Portfolio Segment [Member] | Consumer Mortgage [Member] | |||||
Aged analysis of the company's loans [Abstract] | |||||
Total loans | 2,211,882 | 2,220,298 | |||
Residential Portfolio Segment [Member] | Consumer Mortgage [Member] | Legacy Loans [Member] | |||||
Aged analysis of the company's loans [Abstract] | |||||
90 + days past due and still accruing | 1,437 | 1,500 | |||
Nonaccrual | 10,086 | 10,722 | |||
Total past due | 21,759 | 25,786 | |||
Current | 1,744,105 | 1,728,823 | |||
Total loans | 1,765,864 | 1,754,609 | |||
Residential Portfolio Segment [Member] | Consumer Mortgage [Member] | Legacy Loans [Member] | Past Due 30 - 89 Days [Member] | |||||
Aged analysis of the company's loans [Abstract] | |||||
Total past due | 10,236 | 13,564 | |||
Residential Portfolio Segment [Member] | Consumer Mortgage [Member] | Acquired Loans [Member] | |||||
Aged analysis of the company's loans [Abstract] | |||||
90 + days past due and still accruing | 282 | 26 | |||
Nonaccrual | 2,855 | 3,066 | |||
Total past due | 5,128 | 5,695 | |||
Acquired impaired | [1] | 0 | 0 | ||
Current | 440,890 | 459,994 | |||
Total loans | 446,018 | 465,689 | |||
Residential Portfolio Segment [Member] | Consumer Mortgage [Member] | Acquired Loans [Member] | Past Due 30 - 89 Days [Member] | |||||
Aged analysis of the company's loans [Abstract] | |||||
Total past due | 1,991 | 2,603 | |||
Consumer Portfolio Segment [Member] | Consumer Indirect [Member] | |||||
Aged analysis of the company's loans [Abstract] | |||||
Total loans | 1,008,198 | 1,011,978 | |||
Consumer Portfolio Segment [Member] | Consumer Indirect [Member] | Legacy Loans [Member] | |||||
Aged analysis of the company's loans [Abstract] | |||||
90 + days past due and still accruing | 182 | 295 | |||
Nonaccrual | 5 | 0 | |||
Total past due | 8,851 | 14,492 | |||
Current | 981,915 | 977,344 | |||
Total loans | 990,766 | 991,836 | |||
Consumer Portfolio Segment [Member] | Consumer Indirect [Member] | Legacy Loans [Member] | Past Due 30 - 89 Days [Member] | |||||
Aged analysis of the company's loans [Abstract] | |||||
Total past due | 8,664 | 14,197 | |||
Consumer Portfolio Segment [Member] | Consumer Indirect [Member] | Acquired Loans [Member] | |||||
Aged analysis of the company's loans [Abstract] | |||||
90 + days past due and still accruing | 35 | 8 | |||
Nonaccrual | 0 | 0 | |||
Total past due | 141 | 253 | |||
Acquired impaired | [1] | 0 | 0 | ||
Current | 17,291 | 19,889 | |||
Total loans | 17,432 | 20,142 | |||
Consumer Portfolio Segment [Member] | Consumer Indirect [Member] | Acquired Loans [Member] | Past Due 30 - 89 Days [Member] | |||||
Aged analysis of the company's loans [Abstract] | |||||
Total past due | 106 | 245 | |||
Consumer Portfolio Segment [Member] | Consumer Direct [Member] | |||||
Aged analysis of the company's loans [Abstract] | |||||
Total loans | 173,032 | 179,929 | |||
Consumer Portfolio Segment [Member] | Consumer Direct [Member] | Legacy Loans [Member] | |||||
Aged analysis of the company's loans [Abstract] | |||||
90 + days past due and still accruing | 30 | 48 | |||
Nonaccrual | 0 | 0 | |||
Total past due | 1,121 | 1,923 | |||
Current | 167,396 | 172,556 | |||
Total loans | 168,517 | 174,479 | |||
Consumer Portfolio Segment [Member] | Consumer Direct [Member] | Legacy Loans [Member] | Past Due 30 - 89 Days [Member] | |||||
Aged analysis of the company's loans [Abstract] | |||||
Total past due | 1,091 | 1,875 | |||
Consumer Portfolio Segment [Member] | Consumer Direct [Member] | Acquired Loans [Member] | |||||
Aged analysis of the company's loans [Abstract] | |||||
90 + days past due and still accruing | 0 | 0 | |||
Nonaccrual | 0 | 0 | |||
Total past due | 105 | 100 | |||
Acquired impaired | [1] | 0 | 0 | ||
Current | 4,410 | 5,350 | |||
Total loans | 4,515 | 5,450 | |||
Consumer Portfolio Segment [Member] | Consumer Direct [Member] | Acquired Loans [Member] | Past Due 30 - 89 Days [Member] | |||||
Aged analysis of the company's loans [Abstract] | |||||
Total past due | 105 | 100 | |||
Consumer Portfolio Segment [Member] | Home Equity [Member] | |||||
Aged analysis of the company's loans [Abstract] | |||||
Total loans | 407,832 | 420,329 | |||
Consumer Portfolio Segment [Member] | Home Equity [Member] | Legacy Loans [Member] | |||||
Aged analysis of the company's loans [Abstract] | |||||
90 + days past due and still accruing | 176 | 94 | |||
Nonaccrual | 1,239 | 1,354 | |||
Total past due | 2,819 | 2,564 | |||
Current | 313,908 | 319,576 | |||
Total loans | 316,727 | 322,140 | |||
Consumer Portfolio Segment [Member] | Home Equity [Member] | Legacy Loans [Member] | Past Due 30 - 89 Days [Member] | |||||
Aged analysis of the company's loans [Abstract] | |||||
Total past due | 1,404 | 1,116 | |||
Consumer Portfolio Segment [Member] | Home Equity [Member] | Acquired Loans [Member] | |||||
Aged analysis of the company's loans [Abstract] | |||||
90 + days past due and still accruing | 214 | 170 | |||
Nonaccrual | 1,256 | 1,326 | |||
Total past due | 1,992 | 2,130 | |||
Acquired impaired | [1] | 0 | 0 | ||
Current | 89,113 | 96,059 | |||
Total loans | 91,105 | 98,189 | |||
Consumer Portfolio Segment [Member] | Home Equity [Member] | Acquired Loans [Member] | Past Due 30 - 89 Days [Member] | |||||
Aged analysis of the company's loans [Abstract] | |||||
Total past due | $ 522 | $ 634 | |||
|
LOANS, Amount of Business Lending Loans by Credit Quality Category (Details) - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | $ 6,227,030 | $ 6,256,757 |
Legacy Loans [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 4,691,880 | 4,619,663 |
Acquired Loans [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 1,535,150 | 1,637,094 |
Business Lending [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 2,426,086 | 2,424,223 |
Business Lending [Member] | Legacy Loans [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 1,450,006 | 1,376,599 |
Business Lending [Member] | Acquired Loans [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 976,080 | 1,047,624 |
Business Lending [Member] | Pass [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 2,145,327 | 2,134,137 |
Business Lending [Member] | Pass [Member] | Legacy Loans [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 1,253,688 | 1,170,156 |
Business Lending [Member] | Pass [Member] | Acquired Loans [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 891,639 | 963,981 |
Business Lending [Member] | Special Mention [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 163,915 | 166,397 |
Business Lending [Member] | Special Mention [Member] | Legacy Loans [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 120,881 | 129,076 |
Business Lending [Member] | Special Mention [Member] | Acquired Loans [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 43,034 | 37,321 |
Business Lending [Member] | Classified [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 106,596 | 111,995 |
Business Lending [Member] | Classified [Member] | Legacy Loans [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 75,283 | 77,367 |
Business Lending [Member] | Classified [Member] | Acquired Loans [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 31,313 | 34,628 |
Business Lending [Member] | Doubtful [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 1,752 | 1,579 |
Business Lending [Member] | Doubtful [Member] | Legacy Loans [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 154 | 0 |
Business Lending [Member] | Doubtful [Member] | Acquired Loans [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 1,598 | 1,579 |
Business Lending [Member] | Acquired Impaired [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 8,496 | 10,115 |
Business Lending [Member] | Acquired Impaired [Member] | Legacy Loans [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 0 | 0 |
Business Lending [Member] | Acquired Impaired [Member] | Acquired Loans [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 8,496 | 10,115 |
All Other Loans [Member] | Legacy Loans [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 3,241,874 | 3,243,064 |
All Other Loans [Member] | Acquired Loans [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 559,070 | 589,470 |
All Other Loans [Member] | Performing [Member] | Legacy Loans [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 3,228,719 | 3,229,051 |
All Other Loans [Member] | Performing [Member] | Acquired Loans [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 554,428 | 584,874 |
All Other Loans [Member] | Nonperforming [Member] | Legacy Loans [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 13,155 | 14,013 |
All Other Loans [Member] | Nonperforming [Member] | Acquired Loans [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 4,642 | 4,596 |
Consumer Mortgage [Member] | Legacy Loans [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 1,765,864 | 1,754,609 |
Consumer Mortgage [Member] | Acquired Loans [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 446,018 | 465,689 |
Consumer Mortgage [Member] | Performing [Member] | Legacy Loans [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 1,754,341 | 1,742,387 |
Consumer Mortgage [Member] | Performing [Member] | Acquired Loans [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 442,881 | 462,597 |
Consumer Mortgage [Member] | Nonperforming [Member] | Legacy Loans [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 11,523 | 12,222 |
Consumer Mortgage [Member] | Nonperforming [Member] | Acquired Loans [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 3,137 | 3,092 |
Consumer Indirect [Member] | Legacy Loans [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 990,766 | 991,836 |
Consumer Indirect [Member] | Acquired Loans [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 17,432 | 20,142 |
Consumer Indirect [Member] | Performing [Member] | Legacy Loans [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 990,579 | 991,541 |
Consumer Indirect [Member] | Performing [Member] | Acquired Loans [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 17,397 | 20,134 |
Consumer Indirect [Member] | Nonperforming [Member] | Legacy Loans [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 187 | 295 |
Consumer Indirect [Member] | Nonperforming [Member] | Acquired Loans [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 35 | 8 |
Consumer Direct [Member] | Legacy Loans [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 168,517 | 174,479 |
Consumer Direct [Member] | Acquired Loans [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 4,515 | 5,450 |
Consumer Direct [Member] | Performing [Member] | Legacy Loans [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 168,487 | 174,431 |
Consumer Direct [Member] | Performing [Member] | Acquired Loans [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 4,515 | 5,450 |
Consumer Direct [Member] | Nonperforming [Member] | Legacy Loans [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 30 | 48 |
Consumer Direct [Member] | Nonperforming [Member] | Acquired Loans [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 0 | 0 |
Home Equity [Member] | Legacy Loans [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 316,727 | 322,140 |
Home Equity [Member] | Acquired Loans [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 91,105 | 98,189 |
Home Equity [Member] | Performing [Member] | Legacy Loans [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 315,312 | 320,692 |
Home Equity [Member] | Performing [Member] | Acquired Loans [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 89,635 | 96,693 |
Home Equity [Member] | Nonperforming [Member] | Legacy Loans [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | 1,415 | 1,448 |
Home Equity [Member] | Nonperforming [Member] | Acquired Loans [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans | $ 1,470 | $ 1,496 |
LOANS, Summary of Impaired Loans, Excluding Purchased Impaired (Details) - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Impaired loans [Abstract] | ||
Loans with allowance allocation | $ 4,510 | $ 5,125 |
Loans without allowance allocation | 1,422 | 884 |
Carrying balance | 5,932 | 6,009 |
Contractual balance | 10,146 | 9,165 |
Specifically allocated allowance | $ 878 | $ 804 |
LOANS, Troubled Debt Restructuring (TDR) (Details) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2018
USD ($)
Loan
|
Mar. 31, 2017
USD ($)
Loan
|
Dec. 31, 2017
USD ($)
Loan
|
|
Financing Receivable, Modifications [Line Items] | |||
TDRs, number | Loan | 211 | 226 | |
TDRs, amount | $ 5,566 | $ 6,135 | |
Loans modified in TDR during the year, number | Loan | 7 | 21 | |
Loans modified in TDR during the year, amount | $ 136 | $ 721 | |
Maximum [Member] | |||
Financing Receivable, Modifications [Line Items] | |||
Threshold balance of TDR loans collectively included in general loan loss allocation and qualitative review | $ 500 | ||
Nonaccrual [Member] | |||
Financing Receivable, Modifications [Line Items] | |||
TDRs, number | Loan | 67 | 72 | |
TDRs, amount | $ 2,522 | $ 2,728 | |
Accruing [Member] | |||
Financing Receivable, Modifications [Line Items] | |||
TDRs, number | Loan | 144 | 154 | |
TDRs, amount | $ 3,044 | $ 3,407 | |
Commercial Portfolio Segment [Member] | Minimum [Member] | |||
Financing Receivable, Modifications [Line Items] | |||
Threshold balance of loans individually evaluated for impairment | $ 500 | ||
Commercial Portfolio Segment [Member] | Business Lending [Member] | |||
Financing Receivable, Modifications [Line Items] | |||
TDRs, number | Loan | 11 | 15 | |
TDRs, amount | $ 592 | $ 719 | |
Loans modified in TDR during the year, number | Loan | 1 | 0 | |
Loans modified in TDR during the year, amount | $ 93 | $ 0 | |
Commercial Portfolio Segment [Member] | Business Lending [Member] | Nonaccrual [Member] | |||
Financing Receivable, Modifications [Line Items] | |||
TDRs, number | Loan | 8 | 8 | |
TDRs, amount | $ 312 | $ 218 | |
Commercial Portfolio Segment [Member] | Business Lending [Member] | Accruing [Member] | |||
Financing Receivable, Modifications [Line Items] | |||
TDRs, number | Loan | 3 | 7 | |
TDRs, amount | $ 280 | $ 501 | |
Residential Portfolio Segment [Member] | Consumer Mortgage [Member] | |||
Financing Receivable, Modifications [Line Items] | |||
TDRs, number | Loan | 91 | 95 | |
TDRs, amount | $ 3,627 | $ 4,015 | |
Loans modified in TDR during the year, number | Loan | 0 | 7 | |
Loans modified in TDR during the year, amount | $ 0 | $ 502 | |
Residential Portfolio Segment [Member] | Consumer Mortgage [Member] | Nonaccrual [Member] | |||
Financing Receivable, Modifications [Line Items] | |||
TDRs, number | Loan | 48 | 51 | |
TDRs, amount | $ 1,976 | $ 2,265 | |
Residential Portfolio Segment [Member] | Consumer Mortgage [Member] | Accruing [Member] | |||
Financing Receivable, Modifications [Line Items] | |||
TDRs, number | Loan | 43 | 44 | |
TDRs, amount | $ 1,651 | $ 1,750 | |
Consumer Portfolio Segment [Member] | Consumer Indirect [Member] | |||
Financing Receivable, Modifications [Line Items] | |||
TDRs, number | Loan | 68 | 71 | |
TDRs, amount | $ 847 | $ 883 | |
Loans modified in TDR during the year, number | Loan | 4 | 8 | |
Loans modified in TDR during the year, amount | $ 41 | $ 106 | |
Consumer Portfolio Segment [Member] | Consumer Indirect [Member] | Nonaccrual [Member] | |||
Financing Receivable, Modifications [Line Items] | |||
TDRs, number | Loan | 0 | 0 | |
TDRs, amount | $ 0 | $ 0 | |
Consumer Portfolio Segment [Member] | Consumer Indirect [Member] | Accruing [Member] | |||
Financing Receivable, Modifications [Line Items] | |||
TDRs, number | Loan | 68 | 71 | |
TDRs, amount | $ 847 | $ 883 | |
Consumer Portfolio Segment [Member] | Consumer Direct [Member] | |||
Financing Receivable, Modifications [Line Items] | |||
TDRs, number | Loan | 23 | 25 | |
TDRs, amount | $ 65 | $ 69 | |
Loans modified in TDR during the year, number | Loan | 2 | 4 | |
Loans modified in TDR during the year, amount | $ 2 | $ 15 | |
Consumer Portfolio Segment [Member] | Consumer Direct [Member] | Nonaccrual [Member] | |||
Financing Receivable, Modifications [Line Items] | |||
TDRs, number | Loan | 0 | 0 | |
TDRs, amount | $ 0 | $ 0 | |
Consumer Portfolio Segment [Member] | Consumer Direct [Member] | Accruing [Member] | |||
Financing Receivable, Modifications [Line Items] | |||
TDRs, number | Loan | 23 | 25 | |
TDRs, amount | $ 65 | $ 69 | |
Consumer Portfolio Segment [Member] | Home Equity [Member] | |||
Financing Receivable, Modifications [Line Items] | |||
TDRs, number | Loan | 18 | 20 | |
TDRs, amount | $ 435 | $ 449 | |
Loans modified in TDR during the year, number | Loan | 0 | 2 | |
Loans modified in TDR during the year, amount | $ 0 | $ 98 | |
Consumer Portfolio Segment [Member] | Home Equity [Member] | Nonaccrual [Member] | |||
Financing Receivable, Modifications [Line Items] | |||
TDRs, number | Loan | 11 | 13 | |
TDRs, amount | $ 234 | $ 245 | |
Consumer Portfolio Segment [Member] | Home Equity [Member] | Accruing [Member] | |||
Financing Receivable, Modifications [Line Items] | |||
TDRs, number | Loan | 7 | 7 | |
TDRs, amount | $ 201 | $ 204 |
LOANS, Allowance for Loan Losses (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Allowance for loan losses [Roll Forward] | ||
Beginning balance | $ 47,583 | $ 47,233 |
Charge-offs | (4,747) | (3,182) |
Recoveries | 1,588 | 1,217 |
Provision | 3,679 | 1,828 |
Ending balance | 48,103 | 47,096 |
Acquired Impaired [Member] | ||
Allowance for loan losses [Roll Forward] | ||
Beginning balance | 147 | 108 |
Charge-offs | (43) | 0 |
Recoveries | 0 | 0 |
Provision | 204 | 2 |
Ending balance | 308 | 110 |
Residential Portfolio Segment [Member] | Business Lending [Member] | ||
Allowance for loan losses [Roll Forward] | ||
Beginning balance | 17,257 | 17,220 |
Charge-offs | (1,669) | (695) |
Recoveries | 198 | 71 |
Provision | 1,821 | 261 |
Ending balance | 17,607 | 16,857 |
Commercial Portfolio Segment [Member] | Consumer Mortgage [Member] | ||
Allowance for loan losses [Roll Forward] | ||
Beginning balance | 10,465 | 10,094 |
Charge-offs | (199) | (85) |
Recoveries | 8 | 7 |
Provision | 108 | 133 |
Ending balance | 10,382 | 10,149 |
Consumer Portfolio Segment [Member] | Consumer Indirect [Member] | ||
Allowance for loan losses [Roll Forward] | ||
Beginning balance | 13,468 | 13,782 |
Charge-offs | (2,284) | (1,947) |
Recoveries | 1,151 | 869 |
Provision | 1,363 | 1,292 |
Ending balance | 13,698 | 13,996 |
Consumer Portfolio Segment [Member] | Consumer Direct [Member] | ||
Allowance for loan losses [Roll Forward] | ||
Beginning balance | 3,039 | 2,979 |
Charge-offs | (496) | (417) |
Recoveries | 222 | 245 |
Provision | 219 | 45 |
Ending balance | 2,984 | 2,852 |
Consumer Portfolio Segment [Member] | Home Equity [Member] | ||
Allowance for loan losses [Roll Forward] | ||
Beginning balance | 2,107 | 2,399 |
Charge-offs | (56) | (38) |
Recoveries | 9 | 25 |
Provision | (20) | (27) |
Ending balance | 2,040 | 2,359 |
Unallocated Financing Receivables [Member] | ||
Allowance for loan losses [Roll Forward] | ||
Beginning balance | 1,100 | 651 |
Charge-offs | 0 | 0 |
Recoveries | 0 | 0 |
Provision | (16) | 122 |
Ending balance | $ 1,084 | $ 773 |
GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Dec. 31, 2017 |
|
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 150,274 | $ 149,437 |
Accumulated amortization | (63,315) | (58,779) |
Net carrying amount | 86,959 | 90,658 |
Estimated aggregate amortization expense for each of five succeeding fiscal years [Abstract] | ||
Apr - Dec 2018 | 13,318 | |
2019 | 15,247 | |
2020 | 12,680 | |
2021 | 10,817 | |
2022 | 9,288 | |
Thereafter | 25,609 | |
Net carrying amount | 86,959 | 90,658 |
Components of goodwill [Abstract] | ||
Goodwill, beginning of period | 739,254 | |
Goodwill, activity | (805) | |
Goodwill, end of period | 738,449 | |
Accumulated impairment, beginning of period | (4,824) | |
Accumulated impairment, activity | 0 | |
Accumulated impairment, end of period | (4,824) | |
Goodwill, net, beginning of period | 734,430 | |
Goodwill, net, activity | (805) | |
Goodwill, net, end of period | 733,625 | |
Core Deposit Intangibles [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 62,902 | 62,902 |
Accumulated amortization | (39,621) | (37,877) |
Net carrying amount | 23,281 | 25,025 |
Estimated aggregate amortization expense for each of five succeeding fiscal years [Abstract] | ||
Net carrying amount | 23,281 | 25,025 |
Other Intangibles [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 87,372 | 86,535 |
Accumulated amortization | (23,694) | (20,902) |
Net carrying amount | 63,678 | 65,633 |
Estimated aggregate amortization expense for each of five succeeding fiscal years [Abstract] | ||
Net carrying amount | $ 63,678 | $ 65,633 |
MANDATORILY REDEEMABLE PREFERRED SECURITIES (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2018
USD ($)
Trust
| |
Debt Instrument [Line Items] | |
Number of unconsolidated subsidiary business trusts owned | Trust | 3 |
Percent ownership of unconsolidated subsidiary trusts | 100.00% |
Preferred Debt [Member] | Community Statutory Trust III [Member] | |
Terms of preferred securities for each trust [Abstract] | |
Issuance date | Jul. 31, 2001 |
Par amount | $ 24.5 |
Variable interest rate basis | 3 month LIBOR |
Effective interest rate | 5.35% |
Maturity date | Jul. 31, 2031 |
Call price | Par |
Preferred Debt [Member] | Community Statutory Trust III [Member] | LIBOR [Member] | |
Terms of preferred securities for each trust [Abstract] | |
Term of variable rate | 3 months |
Variable interest rate, basis spread | 3.58% |
Preferred Debt [Member] | Community Capital Trust IV [Member] | |
Terms of preferred securities for each trust [Abstract] | |
Issuance date | Dec. 08, 2006 |
Par amount | $ 75.0 |
Variable interest rate basis | 3 month LIBOR |
Effective interest rate | 3.77% |
Maturity date | Dec. 15, 2036 |
Call price | Par |
Preferred Debt [Member] | Community Capital Trust IV [Member] | LIBOR [Member] | |
Terms of preferred securities for each trust [Abstract] | |
Term of variable rate | 3 months |
Variable interest rate, basis spread | 1.65% |
Preferred Debt [Member] | MBVT Statutory Trust I [Member] | |
Terms of preferred securities for each trust [Abstract] | |
Issuance date | Dec. 15, 2004 |
Par amount | $ 20.6 |
Variable interest rate basis | 3 month LIBOR |
Effective interest rate | 4.07% |
Maturity date | Dec. 31, 2034 |
Call price | Par |
Preferred Debt [Member] | MBVT Statutory Trust I [Member] | LIBOR [Member] | |
Terms of preferred securities for each trust [Abstract] | |
Term of variable rate | 3 months |
Variable interest rate, basis spread | 1.95% |
BENEFIT PLANS (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Pension Benefits [Member] | ||
Net periodic benefit cost [Abstract] | ||
Service cost | $ 1,121 | $ 1,039 |
Interest cost | 1,415 | 1,361 |
Expected return on plan assets | (3,705) | (3,121) |
Amortization of unrecognized net loss | 298 | 263 |
Amortization of prior service cost | (83) | 14 |
Net periodic benefit | (954) | (444) |
Post-retirement Benefits [Member] | ||
Net periodic benefit cost [Abstract] | ||
Service cost | 0 | 0 |
Interest cost | 17 | 19 |
Expected return on plan assets | 0 | 0 |
Amortization of unrecognized net loss | 5 | 2 |
Amortization of prior service cost | (44) | (45) |
Net periodic benefit | $ (22) | $ (24) |
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
Dec. 31, 2017 |
|
EARNINGS PER SHARE [Abstract] | |||
Weighted-average anti-dilutive stock options outstanding (in shares) | 400,000 | 200,000 | |
Basic earnings per share [Abstract] | |||
Net income | $ 40,106 | $ 26,257 | |
Income attributable to unvested stock-based compensation awards | (141) | (138) | |
Income available to common shareholders | $ 39,965 | $ 26,119 | |
Weighted-average common shares outstanding - basic (in shares) | 50,934,000 | 45,284,000 | |
Basic earnings per share (in dollars per share) | $ 0.78 | $ 0.58 | |
Diluted earnings per share [Abstract] | |||
Net income | $ 40,106 | $ 26,257 | |
Income attributable to unvested stock-based compensation awards | (141) | (138) | |
Income available to common shareholders | $ 39,965 | $ 26,119 | |
Weighted-average common shares outstanding - basic (in shares) | 50,934,000 | 45,284,000 | |
Assumed exercise of stock options (in shares) | 563,000 | 703,000 | |
Weighted-average common shares outstanding - diluted (in shares) | 51,497,000 | 45,987,000 | |
Diluted earnings per share (in dollars per share) | $ 0.78 | $ 0.57 | |
Stock Repurchase Program [Abstract] | |||
Number of common shares authorized to be repurchased (in shares) | 2,500,000 | ||
Number of common shares repurchased (in shares) | 0 |
COMMITMENTS, CONTINGENT LIABILITIES AND RESTRICTIONS (Details) - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Contract amount of commitments and contingencies | $ 1,129,270 | $ 1,103,786 |
Minimum [Member] | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Range of reasonably possible losses for such matters in the aggregate, beyond the existing recorded liability | 0 | |
Maximum [Member] | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Range of reasonably possible losses for such matters in the aggregate, beyond the existing recorded liability | 1,000 | |
Commitments to Extend Credit [Member] | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Contract amount of commitments and contingencies | 1,095,696 | 1,080,004 |
Standby Letters of Credit [Member] | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Contract amount of commitments and contingencies | $ 33,574 | $ 23,782 |
FAIR VALUE, Financial Assets and Liabilities Accounted for at Fair Value On a Recurring Basis (Details) - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Available-for-sale investment securities [Abstract] | ||
Available-for-sale investment securities | $ 2,987,290 | $ 3,031,088 |
Recurring [Member] | ||
Available-for-sale investment securities [Abstract] | ||
Available-for-sale investment securities | 2,987,290 | 3,031,088 |
Mortgage loans held for sale | 628 | 461 |
Total | 2,988,027 | 3,031,802 |
Recurring [Member] | Commitments to Originate Real Estate Loans for Sale [Member] | ||
Available-for-sale investment securities [Abstract] | ||
Derivative asset | 55 | 89 |
Recurring [Member] | Forward Sales Commitments [Member] | ||
Available-for-sale investment securities [Abstract] | ||
Derivative asset | 10 | 4 |
Recurring [Member] | Interest Rate Swap Agreements [Member] | ||
Available-for-sale investment securities [Abstract] | ||
Derivative asset | 937 | 1,064 |
Derivative liability | (893) | (904) |
Recurring [Member] | U.S. Treasury and Agency Securities [Member] | ||
Available-for-sale investment securities [Abstract] | ||
Available-for-sale investment securities | 2,027,914 | 2,054,071 |
Recurring [Member] | Obligations of State and Political Subdivisions [Member] | ||
Available-for-sale investment securities [Abstract] | ||
Available-for-sale investment securities | 510,308 | 528,956 |
Recurring [Member] | Government Agency Mortgage-Backed Securities [Member] | ||
Available-for-sale investment securities [Abstract] | ||
Available-for-sale investment securities | 364,539 | 357,538 |
Recurring [Member] | Corporate Debt Securities [Member] | ||
Available-for-sale investment securities [Abstract] | ||
Available-for-sale investment securities | 2,579 | 2,623 |
Recurring [Member] | Government Agency Collateralized Mortgage Obligations [Member] | ||
Available-for-sale investment securities [Abstract] | ||
Available-for-sale investment securities | 81,429 | 87,374 |
Recurring [Member] | Marketable Equity Securities [Member] | ||
Available-for-sale investment securities [Abstract] | ||
Available-for-sale investment securities | 521 | 526 |
Recurring [Member] | Level 1 [Member] | ||
Available-for-sale investment securities [Abstract] | ||
Available-for-sale investment securities | 1,885,536 | 1,909,816 |
Mortgage loans held for sale | 0 | 0 |
Total | 1,885,536 | 1,909,816 |
Recurring [Member] | Level 1 [Member] | Commitments to Originate Real Estate Loans for Sale [Member] | ||
Available-for-sale investment securities [Abstract] | ||
Derivative asset | 0 | 0 |
Recurring [Member] | Level 1 [Member] | Forward Sales Commitments [Member] | ||
Available-for-sale investment securities [Abstract] | ||
Derivative asset | 0 | 0 |
Recurring [Member] | Level 1 [Member] | Interest Rate Swap Agreements [Member] | ||
Available-for-sale investment securities [Abstract] | ||
Derivative asset | 0 | 0 |
Derivative liability | 0 | 0 |
Recurring [Member] | Level 1 [Member] | U.S. Treasury and Agency Securities [Member] | ||
Available-for-sale investment securities [Abstract] | ||
Available-for-sale investment securities | 1,885,015 | 1,909,290 |
Recurring [Member] | Level 1 [Member] | Obligations of State and Political Subdivisions [Member] | ||
Available-for-sale investment securities [Abstract] | ||
Available-for-sale investment securities | 0 | 0 |
Recurring [Member] | Level 1 [Member] | Government Agency Mortgage-Backed Securities [Member] | ||
Available-for-sale investment securities [Abstract] | ||
Available-for-sale investment securities | 0 | 0 |
Recurring [Member] | Level 1 [Member] | Corporate Debt Securities [Member] | ||
Available-for-sale investment securities [Abstract] | ||
Available-for-sale investment securities | 0 | 0 |
Recurring [Member] | Level 1 [Member] | Government Agency Collateralized Mortgage Obligations [Member] | ||
Available-for-sale investment securities [Abstract] | ||
Available-for-sale investment securities | 0 | 0 |
Recurring [Member] | Level 1 [Member] | Marketable Equity Securities [Member] | ||
Available-for-sale investment securities [Abstract] | ||
Available-for-sale investment securities | 521 | 526 |
Recurring [Member] | Level 2 [Member] | ||
Available-for-sale investment securities [Abstract] | ||
Available-for-sale investment securities | 1,101,754 | 1,121,272 |
Mortgage loans held for sale | 628 | 461 |
Total | 1,102,436 | 1,121,897 |
Mortgage loans held for sale, at principal value | 600 | |
Recurring [Member] | Level 2 [Member] | Commitments to Originate Real Estate Loans for Sale [Member] | ||
Available-for-sale investment securities [Abstract] | ||
Derivative asset | 0 | 0 |
Recurring [Member] | Level 2 [Member] | Forward Sales Commitments [Member] | ||
Available-for-sale investment securities [Abstract] | ||
Derivative asset | 10 | 4 |
Recurring [Member] | Level 2 [Member] | Interest Rate Swap Agreements [Member] | ||
Available-for-sale investment securities [Abstract] | ||
Derivative asset | 937 | 1,064 |
Derivative liability | (893) | (904) |
Recurring [Member] | Level 2 [Member] | U.S. Treasury and Agency Securities [Member] | ||
Available-for-sale investment securities [Abstract] | ||
Available-for-sale investment securities | 142,899 | 144,781 |
Recurring [Member] | Level 2 [Member] | Obligations of State and Political Subdivisions [Member] | ||
Available-for-sale investment securities [Abstract] | ||
Available-for-sale investment securities | 510,308 | 528,956 |
Recurring [Member] | Level 2 [Member] | Government Agency Mortgage-Backed Securities [Member] | ||
Available-for-sale investment securities [Abstract] | ||
Available-for-sale investment securities | 364,539 | 357,538 |
Recurring [Member] | Level 2 [Member] | Corporate Debt Securities [Member] | ||
Available-for-sale investment securities [Abstract] | ||
Available-for-sale investment securities | 2,579 | 2,623 |
Recurring [Member] | Level 2 [Member] | Government Agency Collateralized Mortgage Obligations [Member] | ||
Available-for-sale investment securities [Abstract] | ||
Available-for-sale investment securities | 81,429 | 87,374 |
Recurring [Member] | Level 2 [Member] | Marketable Equity Securities [Member] | ||
Available-for-sale investment securities [Abstract] | ||
Available-for-sale investment securities | 0 | 0 |
Recurring [Member] | Level 3 [Member] | ||
Available-for-sale investment securities [Abstract] | ||
Available-for-sale investment securities | 0 | 0 |
Mortgage loans held for sale | 0 | 0 |
Total | 55 | 89 |
Recurring [Member] | Level 3 [Member] | Commitments to Originate Real Estate Loans for Sale [Member] | ||
Available-for-sale investment securities [Abstract] | ||
Derivative asset | 55 | 89 |
Recurring [Member] | Level 3 [Member] | Forward Sales Commitments [Member] | ||
Available-for-sale investment securities [Abstract] | ||
Derivative asset | 0 | 0 |
Recurring [Member] | Level 3 [Member] | Interest Rate Swap Agreements [Member] | ||
Available-for-sale investment securities [Abstract] | ||
Derivative asset | 0 | 0 |
Derivative liability | 0 | 0 |
Recurring [Member] | Level 3 [Member] | U.S. Treasury and Agency Securities [Member] | ||
Available-for-sale investment securities [Abstract] | ||
Available-for-sale investment securities | 0 | 0 |
Recurring [Member] | Level 3 [Member] | Obligations of State and Political Subdivisions [Member] | ||
Available-for-sale investment securities [Abstract] | ||
Available-for-sale investment securities | 0 | 0 |
Recurring [Member] | Level 3 [Member] | Government Agency Mortgage-Backed Securities [Member] | ||
Available-for-sale investment securities [Abstract] | ||
Available-for-sale investment securities | 0 | 0 |
Recurring [Member] | Level 3 [Member] | Corporate Debt Securities [Member] | ||
Available-for-sale investment securities [Abstract] | ||
Available-for-sale investment securities | 0 | 0 |
Recurring [Member] | Level 3 [Member] | Government Agency Collateralized Mortgage Obligations [Member] | ||
Available-for-sale investment securities [Abstract] | ||
Available-for-sale investment securities | 0 | 0 |
Recurring [Member] | Level 3 [Member] | Marketable Equity Securities [Member] | ||
Available-for-sale investment securities [Abstract] | ||
Available-for-sale investment securities | $ 0 | $ 0 |
FAIR VALUE, Assets and Liabilities Measured on Nonrecurring Basis (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2018 |
Dec. 31, 2017 |
|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Valuation allowance | $ 878 | $ 804 |
Other Real Estate Owned [Member] | Market Approach Valuation Technique [Member] | Minimum [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Discount rate | 0.80% | 9.00% |
Other Real Estate Owned [Member] | Market Approach Valuation Technique [Member] | Maximum [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Discount rate | 82.50% | 99.00% |
Mortgage Servicing Rights [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Valuation allowance | $ 0 | |
Level 3 [Member] | Other Real Estate Owned [Member] | Market Approach Valuation Technique [Member] | Minimum [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Discount rate | 0.80% | |
Level 3 [Member] | Other Real Estate Owned [Member] | Market Approach Valuation Technique [Member] | Maximum [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Discount rate | 82.50% | |
Non-recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other real estate owned / Total | $ 1,865 | $ 1,915 |
Non-recurring [Member] | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other real estate owned / Total | 0 | 0 |
Non-recurring [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other real estate owned / Total | 0 | 0 |
Non-recurring [Member] | Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other real estate owned / Total | $ 1,865 | $ 1,915 |
FAIR VALUE, Significant Unobservable Inputs (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2018 |
Dec. 31, 2017 |
|
Other Real Estate Owned [Member] | Fair Value of Collateral [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Fair value | $ 1,865 | $ 1,915 |
Other Real Estate Owned [Member] | Fair Value of Collateral [Member] | Minimum [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Estimated cost of disposal/market adjustment | 0.80% | 9.00% |
Other Real Estate Owned [Member] | Fair Value of Collateral [Member] | Maximum [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Estimated cost of disposal/market adjustment | 82.50% | 99.00% |
Other Real Estate Owned [Member] | Fair Value of Collateral [Member] | Weighted Average [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Estimated cost of disposal/market adjustment | 35.30% | 38.50% |
Commitments to Originate Real Estate Loans for Sale [Member] | Discounted Cash Flow [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Fair value | $ 55 | $ 89 |
Embedded servicing value | 1.00% | 1.00% |
FAIR VALUE, Carrying Amounts and Estimated Fair Values of Other Financial Instruments (Details) - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Carrying Value [Member] | ||
Financial assets [Abstract] | ||
Net loans | $ 6,178,927 | $ 6,209,174 |
Financial liabilities [Abstract] | ||
Deposits | 8,771,092 | 8,444,420 |
Short-term borrowings | 0 | 24,000 |
Securities sold under agreement to repurchase, short-term | 279,702 | 337,011 |
Other long-term debt | 2,042 | 2,071 |
Subordinated debt held by unconsolidated subsidiary trusts | 122,820 | 122,814 |
Fair Value [Member] | ||
Financial assets [Abstract] | ||
Net loans | 6,154,483 | 6,244,941 |
Financial liabilities [Abstract] | ||
Deposits | 8,754,350 | 8,431,481 |
Short-term borrowings | 0 | 24,000 |
Securities sold under agreement to repurchase, short-term | 279,702 | 337,011 |
Other long-term debt | 1,971 | 2,021 |
Subordinated debt held by unconsolidated subsidiary trusts | $ 122,820 | $ 122,814 |
DERIVATIVE INSTRUMENTS (Details) - Interest Rate Swap [Member] $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2018
USD ($)
| |
Derivative [Line Items] | |
Derivative, notional amount | $ 38,500 |
Derivative weighted average receive rate | 3.69% |
Derivative weighted average pay rate | 3.84% |
Weighted average maturity period | 6 years 2 months 12 days |
Other Assets [Member] | |
Derivative [Line Items] | |
Fair value of derivate assets | $ 900 |
Other Liabilities [Member] | |
Derivative [Line Items] | |
Fair value of derivate liability | 900 |
Designated as Hedging Instrument [Member] | Fair Value Hedging [Member] | |
Derivative [Line Items] | |
Derivative, notional amount | $ 7,000 |
Derivative weighted average receive rate | 2.50% |
Derivative weighted average pay rate | 3.11% |
Weighted average maturity period | 15 years 3 months 18 days |
Designated as Hedging Instrument [Member] | Fair Value Hedging [Member] | Other Assets [Member] | |
Derivative [Line Items] | |
Fair value of derivate assets | $ 40 |
SEGMENT INFORMATION (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
Dec. 31, 2017 |
|
Information about reportable segments [Abstract] | |||
Net interest income | $ 84,624 | $ 67,274 | |
Provision for loan losses | 3,679 | 1,828 | |
Noninterest revenues | 57,491 | 44,318 | |
Amortization of intangible assets | 4,798 | 2,768 | |
Acquisition expenses | (8) | 1,716 | |
Other operating expenses | 81,541 | 69,091 | |
Income before income taxes | 52,105 | 36,189 | |
Assets | 10,966,555 | 8,913,860 | $ 10,746,198 |
Goodwill | 733,625 | 542,986 | $ 734,430 |
Eliminations [Member] | |||
Information about reportable segments [Abstract] | |||
Net interest income | 0 | 0 | |
Provision for loan losses | 0 | 0 | |
Noninterest revenues | (695) | (664) | |
Amortization of intangible assets | 0 | 0 | |
Acquisition expenses | 0 | 0 | |
Other operating expenses | (695) | (664) | |
Income before income taxes | 0 | 0 | |
Assets | (43,539) | (43,145) | |
Goodwill | 0 | 0 | |
Banking [Member] | Operating Segments [Member] | |||
Information about reportable segments [Abstract] | |||
Net interest income | 84,530 | 67,134 | |
Provision for loan losses | 3,679 | 1,828 | |
Noninterest revenues | 20,357 | 15,867 | |
Amortization of intangible assets | 1,744 | 554 | |
Acquisition expenses | (15) | 521 | |
Other operating expenses | 56,955 | 49,493 | |
Income before income taxes | 42,524 | 30,605 | |
Assets | 10,736,383 | 8,663,042 | |
Goodwill | 629,916 | 440,870 | |
Employee Benefit Services [Member] | Operating Segments [Member] | |||
Information about reportable segments [Abstract] | |||
Net interest income | 70 | 78 | |
Provision for loan losses | 0 | 0 | |
Noninterest revenues | 23,449 | 17,636 | |
Amortization of intangible assets | 2,088 | 1,591 | |
Acquisition expenses | 7 | 1,062 | |
Other operating expenses | 13,709 | 11,370 | |
Income before income taxes | 7,715 | 3,691 | |
Assets | 205,544 | 221,437 | |
Goodwill | 83,275 | 84,213 | |
All Other [Member] | Operating Segments [Member] | |||
Information about reportable segments [Abstract] | |||
Net interest income | 24 | 62 | |
Provision for loan losses | 0 | 0 | |
Noninterest revenues | 14,380 | 11,479 | |
Amortization of intangible assets | 966 | 623 | |
Acquisition expenses | 0 | 133 | |
Other operating expenses | 11,572 | 8,892 | |
Income before income taxes | 1,866 | 1,893 | |
Assets | 68,167 | 72,526 | |
Goodwill | $ 20,434 | $ 17,903 |
REVENUE RECOGNITION (Details) - USD ($) $ in Millions |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
REVENUE RECOGNITION [Abstract] | ||
Accounts receivable | $ 26.4 | $ 29.8 |
Unbilled fee revenue | 7.4 | 6.5 |
Unearned revenue | $ 5.2 | $ 3.9 |
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