LOANS (Tables)

12 Months Ended

Dec. 31, 2018

Loans and Leases Receivable Disclosure [Line Items]

The balances of these classes at December 31 are summarized as follows:

(000’s omitted)	2018			2017
Business lending	$	2,396,977		$	2,424,223
Consumer mortgage		2,235,408			2,220,298
Consumer indirect		1,083,207			1,011,978
Consumer direct		178,820			179,929
Home equity		386,709			420,329
Gross loans, including deferred origination costs		6,281,121			6,256,757
Allowance for loan losses		(49,284	)		(47,583	)
Loans, net of allowance for loan losses	$	6,231,837		$	6,209,174

Aggregate Amounts Loaned to Related Parties

Following is a summary of the aggregate amount of such loans during 2018 and 2017.

(000’s omitted)	2018			2017
Balance at beginning of year	$	22,344		$	10,950
New loans		2,600			16,617
Payments		(4,283	)		(5,223	)
Balance at end of year	$	20,661		$	22,344

Outstanding Principal Balance and Related Carrying Amount of Acquired Loans

The outstanding principal balance and the related carrying amount of acquired loans included in the Consolidated Statement of Condition at December 31 are as follows:

(000’s omitted)	2018		2017
Credit impaired acquired loans:
Outstanding principal balance	$	6,936	$	13,242
Carrying amount		5,446		10,115

Non-impaired acquired loans:
Outstanding principal balance		1,271,584		1,658,780
Carrying amount		1,247,691		1,626,979

Total acquired loans:
Outstanding principal balance		1,278,520		1,672,022
Carrying amount		1,253,137		1,637,094

Accretable Discount Related to Credit Impaired Acquired Loans

The changes in the accretable discount related to the credit impaired acquired loans are as follows:

(000’s omitted)	2018			2017
Balance at beginning of year	$	976		$	498
Merchants acquisition		0			793
Accretion recognized		(783	)		(905	)
Net reclassification to accretable from nonaccretable		244			590
Balance at end of year	$	437		$	976

Aged Analysis of Past Due Loans by Class

The following is an aged analysis of the Company’s past due loans by class as of December 31, 2018:

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

(000’s omitted)	Past Due 30 - 89 days		90+ Days Past Due and Still Accruing		Nonaccrual		Total Past Due		Current		Total Loans
Business lending	$	5,261	$	179	$	4,872	$	10,312	$	1,608,515	$	1,618,827
Consumer mortgage		12,468		1,393		9,872		23,733		1,824,717		1,848,450
Consumer indirect		14,609		258		0		14,867		1,057,525		1,072,392
Consumer direct		1,778		48		0		1,826		173,948		175,774
Home equity		983		228		1,438		2,649		309,892		312,541
Total	$	35,099	$	2,106	$	16,182	$	53,387	$	4,974,597	$	5,027,984

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

(000’s omitted)	Past Due 30 - 89 days		90+ Days Past Due and Still Accruing		Nonaccrual		Total Past Due		Acquired Impaired⁽¹⁾		Current		Total Loans
Business lending	$	974	$	0	$	3,498	$	4,472	$	5,446	$	768,232	$	778,150
Consumer mortgage		841		232		2,390		3,463		0		383,495		386,958
Consumer indirect		78		34		0		112		0		10,703		10,815
Consumer direct		115		4		0		119		0		2,927		3,046
Home equity		613		79		474		1,166		0		73,002		74,168
Total	$	2,621	$	349	$	6,362	$	9,332	$	5,446	$	1,238,359	$	1,253,137

⁽¹⁾

Acquired impaired loans were not classified as nonperforming assets as the loans are considered to be performing under ASC 310-30. As a result interest income, through the accretion of the difference between the carrying amount of the loans and the expected cashflows, is being recognized on all acquired impaired loans.

The following is an aged analysis of the Company’s past due loans by class as of December 31, 2017:

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

(000’s omitted)	Past Due 30 - 89 days		90+ Days Past Due and Still Accruing		Nonaccrual		Total Past Due		Current		Total Loans
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

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

(000’s omitted)	Past Due 30 - 89 days		90+ Days Past Due and Still Accruing		Nonaccrual		Total Past Due		Acquired Impaired⁽¹⁾		Current		Total Loans
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⁾

Non-Business Impaired Loans

A summary of individually evaluated impaired loans as of December 31, 2018 and 2017 is as follows:

(000’s omitted)	2018		2017
Loans with allowance allocation	$	3,956	$	5,125
Loans without allowance allocation		2,230		884
Carrying balance		6,186		6,009
Contractual balance		12,078		9,165
Specifically allocated allowance		956		804
Average impaired loans		7,618		9,517
Interest income recognized		0		0

Troubled Debt Restructurings on Financing Receivables

Information regarding TDRs as of December 31, 2018 and December 31, 2017 is as follows

	December 31, 2018												December 31, 2017
(000’s omitted)	Nonaccrual				Accruing				Total				Nonaccrual				Accruing				Total
		#	Amount			#	Amount			#	Amount			#	Amount			#	Amount			#	Amount
Business lending		4	$	162		2	$	165		6	$	327		8	$	218		7	$	501		15	$	719
Consumer mortgage		46		1,986		46		1,769		92		3,755		51		2,265		44		1,750		95		4,015
Consumer indirect		0		0		77		857		77		857		0		0		71		883		71		883
Consumer direct		0		0		22		71		22		71		0		0		25		69		25		69
Home equity		12		240		9		275		21		515		13		245		7		204		20		449
Total		62	$	2,388		156	$	3,137		218	$	5,525		72	$	2,728		154	$	3,407		226	$	6,135

The following table presents information related to loans modified in a TDR during the years ended December 31, 2018 and 2017. Of the loans noted in the table below, all loans for the years ended December 31, 2018 and December 31, 2017, were modified due to a Chapter 7 bankruptcy as described previously. The financial effects of these restructurings were immaterial.

	December 31, 2018				December 31, 2017
(000’s omitted)		#	Amount			#	Amount
Business lending		2	$	103		8	$	412
Consumer mortgage		9		470		23		1,254
Consumer indirect		32		320		33		490
Consumer direct		6		24		6		17
Home equity		3		118		4		95
Total		52	$	1,035		74	$	2,268

Allowance for Loan Losses by Class

The allowance for loan losses is general in nature and is available to absorb losses from any loan type despite the analysis below. The following presents by class the activity in the allowance for loan losses:

(000’s omitted)	Business Lending			Consumer Mortgage			Consumer Indirect			Consumer Direct			Home Equity			Unallocated			Acquired Impaired			Total
Balance at December 31, 2015	$	15,749		$	10,198		$	12,422		$	2,997		$	2,666		$	1,201		$	168		$	45,401
Charge-offs		(1,872	)		(647	)		(7,643	)		(1,706	)		(218	)		0			(97	)		(12,183	)
Recoveries		616			115			4,168			901			139			0			0			5,939
Provision		2,727			428			4,835			787			(188	)		(550	)		37			8,076
Balance at December 31, 2016		17,220			10,094			13,782			2,979			2,399			651			108			47,233
Charge-offs		(4,959	)		(707	)		(8,456	)		(2,081	)		(284	)		0			(270	)		(16,757	)
Recoveries		656			50			4,516			849			52			0			0			6,123
Provision		4,340			1,028			3,626			1,292			(60	)		449			309			10,984
Balance at December 31, 2017		17,257			10,465			13,468			3,039			2,107			1,100			147			47,583
Charge-offs		(3,566	)		(836	)		(8,382	)		(1,777	)		(544	)		0			(381	)		(15,486	)
Recoveries		485			136			4,874			807			48			0			0			6,350
Provision		4,346			359			4,406			1,026			533			(100	)		267			10,837
Balance at December 31, 2018	$	18,522		$	10,124		$	14,366		$	3,095		$	2,144		$	1,000		$	33		$	49,284

Business Lending [Member]

Loans and Leases Receivable Disclosure [Line Items]

Loans by Credit Quality Indicator

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

	December 31, 2018						December 31, 2017
(000’s omitted)	Legacy		Acquired		Total		Legacy		Acquired		Total
Pass	$	1,439,337	$	702,493	$	2,141,830	$	1,170,156	$	963,981	$	2,134,137
Special mention		105,065		40,107		145,172		129,076		37,321		166,397
Classified		74,425		28,525		102,950		77,367		34,628		111,995
Doubtful		0		1,579		1,579		0		1,579		1,579
Acquired impaired		0		5,446		5,446		0		10,115		10,115
Total	$	1,618,827	$	778,150	$	2,396,977	$	1,376,599	$	1,047,624	$	2,424,223

All Other Loans [Member]

Loans and Leases Receivable Disclosure [Line Items]

Loans by Credit Quality Indicator

The following tables detail the balances in all loan categories except for business lending at December 31, 2018:

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

(000’s omitted)	Consumer Mortgage		Consumer Indirect		Consumer Direct		Home Equity		Total
Performing	$	1,837,185	$	1,072,134	$	175,726	$	310,875	$	3,395,920
Nonperforming		11,265		258		48		1,666		13,237
Total	$	1,848,450	$	1,072,392	$	175,774	$	312,541	$	3,409,157

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

(000’s omitted)	Consumer Mortgage		Consumer Indirect		Consumer Direct		Home Equity		Total
Performing	$	384,336	$	10,781	$	3,042	$	73,615	$	471,774
Nonperforming		2,622		34		4		553		3,213
Total	$	386,958	$	10,815	$	3,046	$	74,168	$	474,987

The following table details the balances in all other loan categories at December 31, 2017:

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

(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

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

(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