Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2023 | Apr. 28, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2023 | |
Entity File Number | 001-13695 | |
Entity Registrant Name | COMMUNITY BANK SYSTEM, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 16-1213679 | |
Entity Address, Address Line One | 5790 Widewaters Parkway | |
Entity Address, City or Town | DeWitt | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 13214 | |
City Area Code | 315 | |
Local Phone Number | 445-2282 | |
Title of 12(b) Security | Common Stock, $1.00 par value per share | |
Trading Symbol | CBU | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 53,728,786 | |
Entity Central Index Key | 0000723188 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
CONSOLIDATED STATEMENTS OF COND
CONSOLIDATED STATEMENTS OF CONDITION - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Assets: | ||
Cash and cash equivalents | $ 189,298 | $ 209,896 |
Available-for-sale investment securities, includes pledged securities that can be sold or repledged of $640,396 and $466,902, respectively (cost of $3,871,881 and $4,675,474, respectively) | 3,485,993 | 4,151,851 |
Held-to-maturity securities (fair value of $1,083,330 and $1,034,795, respectively) | 1,090,235 | 1,079,695 |
Equity and other securities (cost of $53,595 and $82,424, respectively) | 54,513 | 83,342 |
Loans, net | 8,982,335 | 8,809,394 |
Allowance for credit losses | (63,170) | (61,059) |
Net loans | 8,919,165 | 8,748,335 |
Goodwill | 842,936 | 841,841 |
Core deposit intangibles, net | 11,108 | 12,304 |
Other intangibles, net | 46,870 | 48,692 |
Goodwill and intangible assets, net | 900,914 | 902,837 |
Premises and equipment, net | 158,562 | 160,778 |
Accrued interest and fees receivable | 42,476 | 52,613 |
Other assets | 414,797 | 446,304 |
Total assets | 15,255,953 | 15,835,651 |
Liabilities: | ||
Noninterest-bearing deposits | 3,949,801 | 4,140,617 |
Interest-bearing deposits | 9,160,871 | 8,871,691 |
Total deposits | 13,110,672 | 13,012,308 |
Overnight borrowings | 58,400 | 768,400 |
Securities sold under agreement to repurchase, short-term | 304,607 | 346,652 |
Other Federal Home Loan Bank borrowings | 17,284 | 19,474 |
Subordinated notes payable | 0 | 3,249 |
Accrued interest and other liabilities | 130,977 | 133,863 |
Total liabilities | 13,621,940 | 14,283,946 |
Commitments and contingencies | ||
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; 54,359,535 and 54,190,201 shares issued, respectively | 54,360 | 54,190 |
Additional paid-in capital | 1,052,802 | 1,050,231 |
Retained earnings | 1,134,527 | 1,152,452 |
Accumulated other comprehensive loss | (578,085) | (686,439) |
Treasury stock, at cost (634,618 shares, including 117,103 shares held by deferred compensation arrangements at March 31, 2023 and 452,952 shares including 135,437 shares held by deferred compensation arrangements at December 31, 2022) | (36,325) | (26,485) |
Deferred compensation arrangements (117,103 and 135,437 shares, respectively) | 6,734 | 7,756 |
Total shareholders' equity | 1,634,013 | 1,551,705 |
Total liabilities and shareholders' equity | $ 15,255,953 | $ 15,835,651 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF CONDITION (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Assets: | ||
Available-for-sale investment securities, pledged amount | $ 640,396 | $ 466,902 |
Amortized Cost | 3,871,881 | 4,675,474 |
Held-to-maturity securities, fair value | 1,083,330 | 1,034,795 |
Equity and other securities, cost | $ 53,595 | $ 82,424 |
Shareholders' equity: | ||
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, shares authorized | 500,000 | 500,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued | 54,359,535 | 54,190,201 |
Treasury stock, shares at cost | 634,618 | 452,952 |
Shares held by deferred compensation arrangements | 117,103 | 135,437 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Interest income: | ||
Interest and fees on loans | $ 100,362 | $ 72,514 |
Interest and dividends on taxable investments | 21,938 | 22,592 |
Interest and dividends on nontaxable investments | 3,582 | 2,590 |
Total interest income | 125,882 | 97,696 |
Interest expense: | ||
Interest on deposits | 9,928 | 2,565 |
Interest on borrowings | 4,886 | 221 |
Interest on subordinated notes payable | 38 | 38 |
Total interest expense | 14,852 | 2,824 |
Net interest income | 111,030 | 94,872 |
Provision for credit losses | 3,500 | 906 |
Net interest income after provision for credit losses | 107,530 | 93,966 |
Noninterest revenues: | ||
Deposit service fees | 15,134 | 16,155 |
Mortgage banking | 275 | 155 |
Other banking services | 1,022 | 739 |
Employee benefit services | 29,384 | 29,580 |
Insurance services | 11,522 | 10,409 |
Wealth management services | 8,245 | 8,633 |
Loss on sales of investment securities | (52,329) | 0 |
Gain on debt extinguishment | 242 | 0 |
Unrealized gain on equity securities | 0 | 2 |
Total noninterest revenues | 13,495 | 65,673 |
Noninterest expenses: | ||
Salaries and employee benefits | 71,487 | 61,648 |
Data processing and communications | 13,129 | 12,659 |
Occupancy and equipment | 11,024 | 10,952 |
Amortization of intangible assets | 3,667 | 3,732 |
Legal and professional fees | 5,201 | 3,617 |
Business development and marketing | 2,901 | 2,743 |
Acquisition expenses | 57 | 299 |
Other expenses | 6,586 | 4,157 |
Total noninterest expenses | 114,052 | 99,807 |
Income before income taxes | 6,973 | 59,832 |
Income taxes | 1,175 | 12,777 |
Net income | $ 5,798 | $ 47,055 |
Basic earnings per share | $ 0.11 | $ 0.87 |
Diluted earnings per share | $ 0.11 | $ 0.86 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Pension and other post retirement obligations: | |||
Amortization of actuarial (gains) losses included in net periodic pension cost, gross | $ (549) | $ 220 | |
Tax effect | 134 | (54) | |
Amortization of actuarial (gains) losses included in net periodic pension cost, net | (415) | 166 | |
Amortization of prior service cost included in net periodic pension cost, gross | 160 | 109 | |
Tax effect | (39) | (26) | |
Amortization of prior service cost included in net periodic pension cost, net | 121 | 83 | |
Other comprehensive (loss) income related to pension and other post-retirement obligations, net of taxes | (294) | 249 | |
Unrealized gains (losses) on investment securities: | |||
Net unrealized holding gains (losses) on investment securities, gross | 91,260 | (358,759) | |
Tax effect | (22,227) | 87,143 | |
Net unrealized holding gains (losses) on investment securities, net | 69,033 | (271,616) | |
Reclassification adjustment for net losses included in net income, gross | 52,329 | 0 | |
Tax effect | (12,714) | 0 | |
Reclassification adjustment for net losses included in net income, net | 39,615 | 0 | |
Other comprehensive gain (loss) related to unrealized gains (losses) on investment securities, net of taxes | 108,648 | (271,616) | |
Other comprehensive income (loss), net of tax | 108,354 | (271,367) | |
Net income | 5,798 | 47,055 | |
Comprehensive income (loss) | 114,152 | $ (224,312) | |
Accumulated Other Comprehensive Loss By Component: | |||
Unrealized loss for pension and other post-retirement obligations | (41,922) | $ (41,533) | |
Tax effect | 10,327 | 10,232 | |
Net unrealized loss for pension and other post-retirement obligations | (31,595) | (31,301) | |
Unrealized loss on investment securities | (721,194) | (864,783) | |
Tax effect | 174,704 | 209,645 | |
Net unrealized loss on investment securities | (546,490) | (655,138) | |
Accumulated other comprehensive loss | $ (578,085) | $ (686,439) |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income/(Loss) | Treasury Stock | Deferred Compensation Arrangements | Total |
Balance at Dec. 31, 2021 | $ 54,092 | $ 1,041,304 | $ 1,058,286 | $ (50,627) | $ (10,610) | $ 8,362 | $ 2,100,807 |
Balance (in shares) at Dec. 31, 2021 | 53,878,047 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 47,055 | 47,055 | |||||
Other comprehensive loss, net of tax | (271,367) | (271,367) | |||||
Dividends declared: | |||||||
Common | (23,234) | (23,234) | |||||
Common stock activity under employee stock plans | $ 72 | 413 | 485 | ||||
Common stock activity under employee stock plans (in shares) | 71,214 | ||||||
Stock-based compensation | 1,886 | 1,886 | |||||
Distribution of stock under deferred compensation arrangements | 104 | 738 | (842) | 0 | |||
Distribution of stock under deferred compensation arrangements (in shares) | 14,914 | ||||||
Treasury stock purchased | (3,529) | (3,529) | |||||
Treasury stock purchased (in shares) | (50,000) | ||||||
Treasury stock issued to benefit plans, net | (63) | 63 | 0 | ||||
Treasury stock issued to benefit plans, net (in shares) | (813) | ||||||
Balance at Mar. 31, 2022 | $ 54,164 | 1,043,707 | 1,082,107 | (321,994) | (13,464) | 7,583 | 1,852,103 |
Balance (in shares) at Mar. 31, 2022 | 53,913,362 | ||||||
Balance at Dec. 31, 2022 | $ 54,190 | 1,050,231 | 1,152,452 | (686,439) | (26,485) | 7,756 | 1,551,705 |
Balance (in shares) at Dec. 31, 2022 | 53,737,249 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 5,798 | 5,798 | |||||
Other comprehensive loss, net of tax | 108,354 | 108,354 | |||||
Dividends declared: | |||||||
Common | (23,723) | (23,723) | |||||
Common stock activity under employee stock plans | $ 170 | 343 | 513 | ||||
Common stock activity under employee stock plans (in shares) | 169,333 | ||||||
Stock-based compensation | 2,272 | 2,272 | |||||
Distribution of stock under deferred compensation arrangements | (44) | 1,126 | (1,082) | 0 | |||
Distribution of stock under deferred compensation arrangements (in shares) | 19,264 | ||||||
Treasury stock purchased | (10,906) | (10,906) | |||||
Treasury stock purchased (in shares) | (200,000) | ||||||
Treasury stock issued to benefit plans, net | (60) | 60 | 0 | ||||
Treasury stock issued to benefit plans, net (in shares) | (929) | ||||||
Balance at Mar. 31, 2023 | $ 54,360 | $ 1,052,802 | $ 1,134,527 | $ (578,085) | $ (36,325) | $ 6,734 | $ 1,634,013 |
Balance (in shares) at Mar. 31, 2023 | 53,724,917 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash dividends declared: | ||
Dividends declared per common share (in dollars per share) | $ 0.44 | $ 0.43 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Operating activities: | ||
Net income | $ 5,798 | $ 47,055 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 3,304 | 3,690 |
Amortization of intangible assets | 3,667 | 3,732 |
Net amortization (accretion) on securities, loans and borrowings | 508 | (4,547) |
Stock-based compensation | 2,272 | 1,886 |
Gain on debt extinguishment | (242) | 0 |
Provision for credit losses | 3,500 | 906 |
Amortization of mortgage servicing rights | 233 | 109 |
Loss on sales of investment securities | 52,329 | 0 |
Unrealized gain on equity securities | 0 | (2) |
Income from bank-owned life insurance policies | (587) | (440) |
Net gain on sale of assets | (399) | (450) |
Change in other assets and liabilities | 6,991 | (1) |
Net cash provided by operating activities | 77,374 | 51,938 |
Investing activities: | ||
Proceeds from maturities, calls, and paydowns of available-for-sale investment securities | 20,543 | 49,667 |
Proceeds from maturities, calls, and paydowns of held-to-maturity investment securities | 10 | 0 |
Proceeds from maturities and redemptions of equity and other investment securities | 32,148 | 460 |
Proceeds from sales of available-for-sale investment securities | 733,789 | 0 |
Purchases of available-for-sale investment securities | 0 | (1,256,723) |
Purchases of held-to-maturity investment securities | (3,310) | 0 |
Purchases of equity and other securities | (3,319) | (37) |
Net increase in loans | (179,292) | (49,556) |
Cash paid for acquisitions, net of cash acquired of $0, and $0, respectively | (2,061) | (2,464) |
Proceeds from sales of premises and equipment, net | 1,634 | 368 |
Purchases of premises and equipment, net | (4,070) | (2,582) |
Real estate limited partnership investments | 0 | (247) |
Net cash provided by (used in) investing activities | 596,072 | (1,261,114) |
Financing activities: | ||
Net increase in deposits | 98,364 | 406,499 |
Net decrease in overnight borrowings | (710,000) | 0 |
Net decrease in securities sold under agreement to repurchase, short-term | (42,045) | (24,189) |
Net decrease in other Federal Home Loan Bank borrowings | (2,215) | (24) |
Redemption of subordinated notes payable | (3,000) | 0 |
Proceeds from the issuance of common stock | 513 | 485 |
Purchases of treasury stock | (10,966) | (3,592) |
Increase in deferred compensation arrangements | 60 | 63 |
Cash dividends paid | (23,708) | (23,235) |
Withholding taxes paid on share-based compensation | (1,047) | (969) |
Net cash (used in) provided by financing activities | (694,044) | 355,038 |
Change in cash and cash equivalents | (20,598) | (854,138) |
Cash and cash equivalents at beginning of period | 209,896 | 1,875,064 |
Cash and cash equivalents at end of period | 189,298 | 1,020,926 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 14,815 | 2,839 |
Cash paid for income taxes | 1,065 | 3,344 |
Supplemental disclosures of noncash financing and investing activities: | ||
Dividends declared and unpaid | 23,778 | 23,234 |
Transfers from loans to other real estate | 18 | 203 |
Transfers from premises and equipment, net to other assets | 1,443 | 0 |
Acquisitions: | ||
Fair value of assets acquired, excluding acquired cash and intangibles | 32 | 0 |
Fair value of liabilities assumed | $ 9 | $ 0 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Investing activities: | ||
Cash acquired related to acquisition | $ 0 | $ 0 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2023 | |
BASIS OF PRESENTATION | |
BASIS OF PRESENTATION | NOTE A: BASIS OF PRESENTATION The interim financial data as of and for the three months ended March 31, 2023 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 to present fairly the results for the interim periods in conformity with generally accepted accounting principles in the United States of America (“GAAP”) and Article 10 of Regulation S-X. 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. The Company’s unaudited interim consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited annual consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the Securities and Exchange Commission (“SEC”) on March 1, 2023. |
ACQUISITIONS
ACQUISITIONS | 3 Months Ended |
Mar. 31, 2023 | |
ACQUISITIONS | |
ACQUISITIONS | NOTE B: ACQUISITIONS Subsequent Period Acquisition On May 1, 2023, the Company, through its subsidiary OneGroup NY, Inc. (“OneGroup”), completed the acquisition of certain assets of Hyde Park Insurance Services, Inc., an insurance agency headquartered in Tampa, Florida for $4.3 million in cash. The effects of the acquired assets will be included in the 2023 consolidated financial statements beginning in the second quarter of 2023. Current and Prior Period Acquisitions On March 1, 2023, the Company completed the acquisition of certain assets of Axiom Realty Group, which includes Axiom Capital Corp., Axiom Realty Management, LLC and Axiom Realty Advisors, LLC (collectively referred to as “Axiom”) for $1.8 million in cash. The Company recorded a $0.5 million customer list intangible and recognized $1.3 million of goodwill in conjunction with the acquisition. The effects of the acquired assets have been included in the consolidated financial statements since that date. Revenues of approximately $0.1 million and direct expenses of approximately $0.2 million were included in the consolidated statement of income for the three months ended March 31, 2023. On November 1, 2022, the Company, through its subsidiary OneGroup, completed its acquisition of certain assets of JMD Associates, LLC (“JMD”), an insurance agency headquartered in Boca Raton, Florida. The Company paid $1.0 million in cash and recorded a $0.1 million intangible asset for a noncompete agreement, a $0.4 million customer list intangible and $0.5 million of goodwill in conjunction with the acquisition. The effects of the acquired assets have been included in the consolidated financial statements since that date. Revenues of approximately $0.1 million and direct expenses of approximately $0.1 million were included in the consolidated statement of income for the three months ended March 31, 2023. On May 13, 2022, the Company completed its acquisition of Elmira Savings Bank (“Elmira”), a New York State chartered savings bank headquartered in Elmira, New York, for $82.2 million in cash. The acquisition enhanced the Company’s presence in five counties in New York’s Southern Tier and Finger Lakes regions. In connection with the acquisition, the Company acquired approximately $583.7 million of identifiable assets, including $437.0 million of loans, $11.3 million of investment securities, and $8.0 million of core deposit intangibles, as well as $522.3 million of deposits. Goodwill of $41.9 million was recognized as a result of the merger. The effects of the acquired assets and liabilities have been included in the consolidated financial statements since that date. Revenues of approximately $4.7 million and direct expenses of approximately $1.1 million from the Elmira branch network, which may not include certain shared expenses, were included in the consolidated statement of income for the three months ended March 31, 2023. The Company incurred certain transaction-related costs in 2022 in connection with the Elmira acquisition. On January 1, 2022, the Company, through its subsidiary OneGroup, completed acquisitions of certain assets of three insurance agencies for an aggregate amount of $2.5 million in cash. The Company recorded a $2.5 million customer list intangible asset in conjunction with the acquisitions. The effects of the acquired assets have been included in the consolidated financial statements since that date. Included in the consolidated statements of income for the three months ended March 31, 2023 and 2022 are revenues of approximately $0.2 million and $0.3 million, respectively, and direct expenses of approximately $0.1 million in each of the three months ended March 31, 2023 and 2022. 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 date of the acquisition, and were subject to adjustment based on updated information not available at the time of the acquisitions. Through the first quarter of 2023, the carrying amount of accrued interest and fees receivable, other assets and other liabilities associated with the Elmira acquisition was adjusted upon receipt of new information as a result of adjustments to employee benefits accruals and deferred income taxes. The adjustments resulted in a net decrease to goodwill of $0.3 million. The Elmira and Axiom acquisitions generally expanded the Company’s banking geographic presence in New York. The OneGroup acquisitions generally expanded the Company’s nonbanking presence in New York and Florida. 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: 2023 2022 (000s omitted) Axiom Other (1) Total Elmira Other (2) Total Consideration: Cash $ 1,819 $ 242 $ 2,061 $ 82,179 $ 3,477 $ 85,656 Recognized amounts of identifiable assets acquired and liabilities assumed: Cash and cash equivalents 0 0 0 84,988 0 84,988 Investment securities 0 0 0 11,305 0 11,305 Loans, net of allowance for credit losses on PCD loans 0 0 0 436,954 0 436,954 Premises and equipment, net 25 5 30 11,303 14 11,317 Accrued interest and fees receivable 0 0 0 882 0 882 Other assets 2 0 2 30,337 0 30,337 Core deposit intangibles 0 0 0 7,970 0 7,970 Other intangibles 531 118 649 0 3,014 3,014 Deposits 0 0 0 (522,295) 0 (522,295) Other liabilities (9) 0 (9) (3,575) 0 (3,575) Other Federal Home Loan Bank borrowings 0 0 0 (17,616) 0 (17,616) Total identifiable assets, net 549 123 672 40,253 3,028 43,281 Goodwill $ 1,270 $ 119 $ 1,389 $ 41,926 $ 449 $ 42,375 (1) Includes amounts for OneGroup acquisition completed in 2023. (2) Includes amounts for all OneGroup acquisitions completed in 2022. The Company acquired loans from Elmira for which there was not evidence of a more-than-insignificant deterioration in credit quality since origination (non-PCD loans) with an unpaid principal balance of $455.7 million at the acquisition date. Total fair value adjustments for non-PCD loans resulted in a net discount of $20.8 million. The Company acquired loans from Elmira for which there was evidence of a more-than-insignificant deterioration in credit quality since origination (PCD loans). There were no investment securities acquired from Elmira for which there was evidence of a more-than-insignificant deterioration in credit quality since origination. The carrying amount of those loans is as follows at the date of acquisition: (000s omitted) PCD Loans Par value of PCD loans at acquisition $ 2,184 Allowance for credit losses at acquisition (71) Non-credit discount at acquisition (81) Fair value of PCD loans at acquisition $ 2,032 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. Borrowings assumed with the Elmira acquisition included Federal Home Loan Bank of New York (“FHLB”) borrowings with a fair value of $17.6 million, with maturity dates ranging from January 2023 through March 2027 and a weighted average interest rate of 2.48%. The core deposit intangibles related to the Elmira acquisition and other intangibles related to three of the OneGroup acquisitions completed in 2022, the OneGroup acquisition completed in 2023, and the Axiom acquisition are being amortized using an accelerated method over an estimated useful life of eight years. The other intangibles associated with the fourth remaining OneGroup acquisition completed in 2022 are being amortized using an accelerated method over their estimated useful life of ten years . The goodwill, which is not amortized for book purposes, was assigned to the Banking segment for the Elmira and Axiom acquisitions and the All Other segment for the OneGroup acquisition completed in 2023 and the JMD acquisition. Goodwill arising from the Elmira acquisition is not deductible for tax purposes. Goodwill arising from the Axiom acquisition, the OneGroup acquisition completed in 2023, and the JMD acquisition is deductible for tax purposes. Direct costs related to the acquisitions were expensed as incurred. Merger and acquisition integration-related expenses were $0.1 million and $0.3 million during the three months ended March 31, 2023 and 2022, respectively, and have been separately stated in the consolidated statements of income. |
ACCOUNTING POLICIES
ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2023 | |
ACCOUNTING POLICIES | |
ACCOUNTING POLICIES | NOTE C: 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 76 through 87 of the Annual Report on Form 10-K for the year ended December 31, 2022 filed with the Securities and Exchange Commission (“SEC”) on March 1, 2023 except as noted below. 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, 2023, $31.7 million of accounts receivable, including $9.2 million of unbilled fee revenue, and $1.8 million of unearned revenue, was recorded in the consolidated statements of condition. As of December 31, 2022, $33.3 million of accounts receivable, including $8.8 million of unbilled fee revenue, and $1.1 million of unearned revenue, was recorded in the consolidated statements of condition. Loan Modifications The Company, in certain situations, will modify a loan with a borrower experiencing financial difficulty that results in a direct change in the timing or amount of contractual cash flows. Applicable modifications include but are not limited to principal forgiveness, interest rate reduction, other-than-insignificant payment delay, term extension (other than administrative) or a combination thereof. Principal forgiveness is defined as any contractual reduction in the amount of principal due without receiving payment or assets. Interest rate reduction is defined as the change results in the borrower receiving a below market interest rate. A delay in payment that is other-than-insignificant is determined by considering factors including the amount of the restructured payments relative to the unpaid principal or collateral value of the loan, as well as the timing of the restructured payment relative to the frequency of payments due under the debt, the debt’s original contract maturity and the debt’s original expected duration. Generally, a delay in payment greater than 90 days in the last twelve months would be considered other-than-insignificant. The Company considers several factors to assess whether a borrower is experiencing financial difficulty, including but not limited to payment default or expected payment default, bankruptcy of the borrower, substantial doubt whether the borrower will continue as a going concern and estimates or projections of the borrower’s financial condition that indicate that the borrower will be unable to service the loan in accordance with the contractual provisions of the existing agreement. Following the adoption of ASU 2022-02 on January 1, 2023, the Company has established a policy to identify and disclose information required by FASB ASC 310-10-50 regarding modifications made to borrowers experiencing financial difficulty. Reclassifications Certain reclassifications have been made to prior period balances to conform to the current period’s presentation. Recently Adopted Accounting Pronouncements In March 2022, the Financial Accounting Standards Board (“FASB”) issued ASU 2022-02 , Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures |
INVESTMENT SECURITIES
INVESTMENT SECURITIES | 3 Months Ended |
Mar. 31, 2023 | |
INVESTMENT SECURITIES | |
INVESTMENT SECURITIES | NOTE D: INVESTMENT SECURITIES The amortized cost and estimated fair value of investment securities as of March 31, 2023 and December 31, 2022 are as follows: March 31, 2023 December 31, 2022 Gross Gross Gross Gross Amortized Unrealized Unrealized Fair Amortized Unrealized Unrealized Fair (000’s omitted) Cost Gains Losses Value Cost Gains Losses Value Available-for-Sale Portfolio: U.S. Treasury and agency securities $ 2,876,765 $ 0 $ 299,774 $ 2,576,991 $ 3,660,546 $ 0 $ 417,009 $ 3,243,537 Obligations of state and political subdivisions 541,118 1,746 32,995 509,869 549,118 506 45,327 504,297 Government agency mortgage-backed securities 433,829 105 53,476 380,458 444,689 58 60,114 384,633 Corporate debt securities 8,000 0 810 7,190 8,000 0 886 7,114 Government agency collateralized mortgage obligations 12,169 1 685 11,485 13,121 1 852 12,270 Total available-for-sale portfolio $ 3,871,881 $ 1,852 $ 387,740 $ 3,485,993 $ 4,675,474 $ 565 $ 524,188 $ 4,151,851 Held-to-Maturity Portfolio: U.S. Treasury and agency securities $ 1,086,936 $ 78 $ 6,983 $ 1,080,031 $ 1,079,695 $ 0 $ 44,900 $ 1,034,795 Government agency mortgage-backed securities 3,299 15 15 3,299 0 0 0 0 Total held-to-maturity portfolio $ 1,090,235 $ 93 $ 6,998 $ 1,083,330 $ 1,079,695 $ 0 $ 44,900 $ 1,034,795 Equity and Other Securities: Equity securities, at fair value $ 251 $ 168 $ 0 $ 419 $ 251 $ 168 $ 0 $ 419 Federal Home Loan Bank common stock 15,342 0 0 15,342 47,497 0 0 47,497 Federal Reserve Bank common stock 33,568 0 0 33,568 31,144 0 0 31,144 Other equity securities, at adjusted cost 4,434 750 0 5,184 3,532 750 0 4,282 Total equity and other securities $ 53,595 $ 918 $ 0 $ 54,513 $ 82,424 $ 918 $ 0 $ 83,342 A summary of investment securities that have been in a continuous unrealized loss position is as follows: As of March 31, 2023 Less than 12 Months 12 Months or Longer Total Gross Gross Gross Fair Unrealized Fair Unrealized Fair Unrealized (000’s omitted) # Value Losses # Value Losses # Value Losses Available-for-Sale Portfolio: U.S. Treasury and agency securities 14 $ 447,018 $ 1,900 69 $ 2,129,973 $ 297,874 83 $ 2,576,991 $ 299,774 Obligations of state and political subdivisions 205 105,503 1,447 330 236,260 31,548 535 341,763 32,995 Government agency mortgage-backed securities 207 33,650 1,264 544 336,011 52,212 751 369,661 53,476 Corporate debt securities 2 7,190 810 0 0 0 2 7,190 810 Government agency collateralized mortgage obligations 8 750 17 35 10,710 668 43 11,460 685 Total available-for-sale investment portfolio 436 $ 594,111 $ 5,438 978 $ 2,712,954 $ 382,302 1,414 $ 3,307,065 $ 387,740 Held-to-Maturity Portfolio: U.S. Treasury and agency securities 21 $ 1,043,209 $ 6,983 0 $ 0 $ 0 21 $ 1,043,209 $ 6,983 Government agency mortgage-backed securities 1 1,423 15 0 0 0 1 1,423 15 Total held-to-maturity portfolio 22 $ 1,044,632 $ 6,998 0 $ 0 $ 0 22 $ 1,044,632 $ 6,998 As of December 31, 2022 Less than 12 Months 12 Months or Longer Total Gross Gross Gross Fair Unrealized Fair Unrealized Fair Unrealized (000’s omitted) # Value Losses # Value Losses # Value Losses Available-for-Sale Portfolio: U.S. Treasury and agency securities 41 $ 1,384,075 $ 132,511 61 $ 1,859,462 $ 284,498 102 $ 3,243,537 $ 417,009 Obligations of state and political subdivisions 582 370,524 35,488 76 47,923 9,839 658 418,447 45,327 Government agency mortgage-backed securities 497 190,727 19,508 274 189,919 40,606 771 380,646 60,114 Corporate debt securities 0 0 0 2 7,114 886 2 7,114 886 Government agency collateralized mortgage obligations 29 9,968 600 17 2,274 252 46 12,242 852 Total available-for-sale investment portfolio 1,149 $ 1,955,294 $ 188,107 430 $ 2,106,692 $ 336,081 1,579 $ 4,061,986 $ 524,188 Held-to-Maturity Portfolio: U.S Treasury and agency securities 23 $ 1,034,795 $ 44,900 0 $ 0 $ 0 23 $ 1,034,795 $ 44,900 Total held-to-maturity portfolio 23 $ 1,034,795 $ 44,900 0 $ 0 $ 0 23 $ 1,034,795 $ 44,900 The unrealized losses reported pertaining to available-for-sale 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 carry a credit rating of A or better. Additionally, a portion of the obligations of state and political subdivisions carry a secondary level of credit enhancement. The Company holds two corporate debt securities in an unrealized loss position and, based on an analysis done by the Company, the issuers of the securities show a low risk of default. Timely principal and interest payments continue to be made on the securities. 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, 2023 represents credit losses and no unrealized losses have been recognized in the provision for credit losses. Accordingly, there is no allowance for credit losses on the Company’s available-for-sale portfolio as of March 31, 2023. Accrued interest receivable on available-for-sale debt securities, included in accrued interest and fees receivable on the consolidated statements of condition, totaled $12.3 million at March 31, 2023 Securities classified as held-to-maturity are included under the CECL methodology. Calculation of expected credit loss under CECL is done on a collective (“pooled”) basis, with assets grouped when similar risk characteristics exist. The Company notes that at March 31, 2023 all securities in the held-to-maturity classification are U.S. Treasury securities and government agency mortgage-backed securities; therefore, they share the same risk characteristics and can be evaluated on a collective basis. The expected credit loss on these securities is evaluated based on historical credit losses of this security type and the expected possibility of default in the future, and these securities are guaranteed by the U.S. government. U.S. Treasury securities and government agency mortgage-backed securities often receive the highest credit rating by rating agencies and the Company has concluded that the possibility of default is considered remote. The U.S. Treasury securities and government agency mortgage-backed securities held by the Company in the held-to-maturity category carry an AA+ rating from Standard & Poor’s, Aaa from Moody’s Investor Services, and AAA from Fitch. The Company concludes that the long history with no credit losses for these securities (adjusted for current conditions and reasonable and supportable forecasts) indicates an expectation that nonpayment of the amortized cost basis is zero. Management has concluded that there is no prepayment risk and it is expected to recover the recorded investment. Accordingly, there is no allowance for credit losses on the Company’s held-to-maturity debt portfolio as of March 31, 2023. Accrued interest receivable on held-to-maturity debt securities, included in accrued interest and fees receivable on the consolidated statements of condition, totaled $2.8 million at March 31, 2023 and is excluded from the estimate of credit losses. The Company has the intent and ability to hold the securities to maturity. The amortized cost and estimated fair value of debt securities at March 31, 2023, 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, including government agency mortgage-backed securities and government agency collateralized mortgage obligations, are shown separately. Held-to-Maturity Available-for-Sale Amortized Fair Amortized Fair (000’s omitted) Cost Value Cost Value Due in one year or less $ 0 $ 0 $ 522,140 $ 519,910 Due after one through five years 0 0 942,103 862,807 Due after five years through ten years 543,031 541,541 1,251,796 1,127,354 Due after ten years 543,905 538,490 709,844 583,979 Subtotal 1,086,936 1,080,031 3,425,883 3,094,050 Government agency mortgage-backed securities 3,299 3,299 433,829 380,458 Government agency collateralized mortgage obligations 0 0 12,169 11,485 Total $ 1,090,235 $ 1,083,330 $ 3,871,881 $ 3,485,993 Investment securities with a fair value of $3.75 billion and $2.18 billion at March 31, 2023 and December 31, 2022, respectively, were pledged to collateralize certain deposits and borrowings. Securities pledged to collateralize certain deposits and borrowings included $640.4 million and $466.9 million of U.S. Treasury securities that were pledged as collateral for securities sold under agreement to repurchase at March 31, 2023 and December 31, 2022, respectively. All securities sold under agreement to repurchase as of March 31, 2023 and December 31, 2022 have an overnight and continuous maturity. During the first quarter of 2023, the Company sold $786.1 million in book value of available-for-sale U.S. Treasury and agency securities, recognizing $52.3 million of gross realized losses. The sales were completed in January and February 2023 as part of a strategic balance sheet repositioning and were unrelated to the negative developments in the banking industry that occurred in March 2023. The proceeds from these sales of $733.8 million were redeployed entirely towards paying off existing overnight borrowings. |
LOANS AND ALLOWANCE FOR CREDIT
LOANS AND ALLOWANCE FOR CREDIT LOSSES | 3 Months Ended |
Mar. 31, 2023 | |
LOANS AND ALLOWANCE FOR CREDIT LOSSES | |
LOANS AND ALLOWANCE FOR CREDIT LOSSES | NOTE E: LOANS AND ALLOWANCE FOR CREDIT LOSSES The segments of the Company’s loan portfolio are summarized as follows: March 31, December 31, (000’s omitted) 2023 2022 Business lending $ 3,747,942 $ 3,645,665 Consumer mortgage 3,019,718 3,012,475 Consumer indirect 1,605,659 1,539,653 Consumer direct 176,989 177,605 Home equity 432,027 433,996 Gross loans, including deferred origination costs 8,982,335 8,809,394 Allowance for credit losses (63,170) (61,059) Loans, net of allowance for credit losses $ 8,919,165 $ 8,748,335 The following table presents the aging of the amortized cost basis of the Company’s past due loans by segment as of March 31, 2023: Past Due 90+ Days Past 30 – 89 Due and Total (000’s omitted) Days Still Accruing Nonaccrual Past Due Current Total Loans Business lending $ 5,514 $ 0 $ 4,392 $ 9,906 $ 3,738,036 $ 3,747,942 Consumer mortgage 11,767 3,509 23,295 38,571 2,981,147 3,019,718 Consumer indirect 11,152 151 0 11,303 1,594,356 1,605,659 Consumer direct 1,100 81 26 1,207 175,782 176,989 Home equity 2,344 286 2,032 4,662 427,365 432,027 Total $ 31,877 $ 4,027 $ 29,745 $ 65,649 $ 8,916,686 $ 8,982,335 The following table presents the aging of the amortized cost basis of the Company’s past due loans by segment as of December 31, 2022: Past Due 90+ Days Past 30 – 89 Due and Total (000’s omitted) Days Still Accruing Nonaccrual Past Due Current Total Loans Business lending $ 9,818 $ 0 $ 4,689 $ 14,507 $ 3,631,158 $ 3,645,665 Consumer mortgage 13,757 3,510 22,583 39,850 2,972,625 3,012,475 Consumer indirect 16,767 178 0 16,945 1,522,708 1,539,653 Consumer direct 1,307 132 28 1,467 176,138 177,605 Home equity 3,595 299 1,945 5,839 428,157 433,996 Total $ 45,244 $ 4,119 $ 29,245 $ 78,608 $ 8,730,786 $ 8,809,394 No interest income on nonaccrual loans was recognized during the three months ended March 31, 2023 and 2022. An immaterial amount of accrued interest was written off on nonaccrual loans by reversing interest income. 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 to loans individually based on a case-by-case evaluation. In general, the following are the definitions of the Company’s credit quality indicators: 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 and the loan has potential weaknesses, although the loan performs as agreed. Loss may be incurred at some future date if conditions deteriorate further. Classified The condition of the borrower has significantly deteriorated and the loan has a well-defined weakness or weaknesses. The performance of the loan could further deteriorate and incur loss 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 and loss is likely. The following tables show the amount of business lending loans by credit quality category at March 31, 2023 and December 31, 2022: Revolving Revolving Loans Loans (000’s omitted) Term Loans Amortized Cost Basis by Origination Year Amortized Converted March 31, 2023 2023 2022 2021 2020 2019 Prior Cost Basis to Term Total Business lending: Risk rating Pass $ 129,658 $ 730,008 $ 361,349 $ 221,000 $ 237,879 $ 753,972 $ 667,589 $ 442,133 $ 3,543,588 Special mention 623 2,620 4,712 6,926 3,261 56,953 30,721 31,774 137,590 Classified 224 2,972 399 1,126 3,034 32,787 6,770 19,452 66,764 Doubtful 0 0 0 0 0 0 0 0 0 Total business lending $ 130,505 $ 735,600 $ 366,460 $ 229,052 $ 244,174 $ 843,712 $ 705,080 $ 493,359 $ 3,747,942 Current period gross charge-offs $ 0 $ 47 $ 0 $ 0 $ 0 $ 0 $ 128 $ 0 $ 175 Revolving Revolving Loans Loans (000’s omitted) Term Loans Amortized Cost Basis by Origination Year Amortized Converted December 31, 2022 2022 2021 2020 2019 2018 Prior Cost Basis to Term Total Business lending: Risk rating Pass $ 747,573 $ 373,913 $ 232,591 $ 246,820 $ 168,468 $ 604,745 $ 646,771 $ 401,531 $ 3,422,412 Special mention 2,787 4,836 3,781 3,676 14,593 45,627 29,403 29,975 134,678 Classified 1,800 775 1,138 3,196 12,235 38,138 10,587 20,706 88,575 Doubtful 0 0 0 0 0 0 0 0 0 Total business lending $ 752,160 $ 379,524 $ 237,510 $ 253,692 $ 195,296 $ 688,510 $ 686,761 $ 452,212 $ 3,645,665 All other loans are underwritten and structured using standardized criteria and characteristics, primarily payment performance, and are 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, 2023: Revolving Revolving Loans Loans (000’s omitted) Term Loans Amortized Cost Basis by Origination Year Amortized Converted March 31, 2023 2023 2022 2021 2020 2019 Prior Cost Basis to Term Total Consumer mortgage: FICO AB (1) Performing $ 51,091 $ 369,653 $ 483,070 $ 213,716 $ 169,347 $ 676,623 $ 369 $ 65,562 $ 2,029,431 Nonperforming 0 27 471 567 130 4,949 0 447 6,591 Total FICO AB 51,091 369,680 483,541 214,283 169,477 681,572 369 66,009 2,036,022 FICO CDE (2) Performing 18,148 161,398 176,898 109,853 78,092 368,417 27,200 23,477 963,483 Nonperforming 0 614 900 1,311 1,496 14,877 0 1,015 20,213 Total FICO CDE 18,148 162,012 177,798 111,164 79,588 383,294 27,200 24,492 983,696 Total consumer mortgage $ 69,239 $ 531,692 $ 661,339 $ 325,447 $ 249,065 $ 1,064,866 $ 27,569 $ 90,501 $ 3,019,718 Current period gross charge-offs $ 0 $ 0 $ 0 $ 0 $ 0 $ 19 $ 0 $ 0 $ 19 Consumer indirect: Performing $ 203,427 $ 731,811 $ 381,847 $ 112,730 $ 82,525 $ 93,168 $ 0 $ 0 $ 1,605,508 Nonperforming 0 18 31 73 0 29 0 0 151 Total consumer indirect $ 203,427 $ 731,829 $ 381,878 $ 112,803 $ 82,525 $ 93,197 $ 0 $ 0 $ 1,605,659 Current period gross charge-offs $ 0 $ 913 $ 621 $ 382 $ 189 $ 426 $ 0 $ 0 $ 2,531 Consumer direct: Performing $ 22,565 $ 73,630 $ 40,886 $ 14,585 $ 10,188 $ 8,622 $ 6,406 $ 0 $ 176,882 Nonperforming 0 30 0 0 0 69 8 0 107 Total consumer direct $ 22,565 $ 73,660 $ 40,886 $ 14,585 $ 10,188 $ 8,691 $ 6,414 $ 0 $ 176,989 Current period gross charge-offs $ 0 $ 172 $ 151 $ 15 $ 21 $ 95 $ 51 $ 0 $ 505 Home equity: Performing $ 11,531 $ 68,635 $ 70,163 $ 36,328 $ 30,112 $ 53,840 $ 129,361 $ 29,739 $ 429,709 Nonperforming 0 0 10 307 173 623 589 616 2,318 Total home equity $ 11,531 $ 68,635 $ 70,173 $ 36,635 $ 30,285 $ 54,463 $ 129,950 $ 30,355 $ 432,027 Current period gross charge-offs $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 (1) FICO AB refers to higher tiered loans with FICO scores greater than or equal to 720 at origination. (2) FICO CDE refers to loans with FICO scores less than 720 at origination and potentially higher risk. The following table details the balances in all other loan categories at December 31, 2022: Revolving Revolving Loans Loans (000’s omitted) Term Loans Amortized Cost Basis by Origination Year Amortized Converted December 31, 2022 2022 2021 2020 2019 2018 Prior Cost Basis to Term Total Consumer mortgage: FICO AB (1) Performing $ 379,171 $ 492,731 $ 217,889 $ 173,942 $ 100,161 $ 604,258 $ 954 $ 58,639 $ 2,027,745 Nonperforming 0 75 573 184 399 4,347 0 449 6,027 Total FICO AB 379,171 492,806 218,462 174,126 100,560 608,605 954 59,088 2,033,772 FICO CDE (2) Performing 160,388 178,262 112,640 79,357 54,861 323,189 27,884 22,056 958,637 Nonperforming 120 974 1,250 1,606 2,127 13,177 151 661 20,066 Total FICO CDE 160,508 179,236 113,890 80,963 56,988 336,366 28,035 22,717 978,703 Total consumer mortgage $ 539,679 $ 672,042 $ 332,352 $ 255,089 $ 157,548 $ 944,971 $ 28,989 $ 81,805 $ 3,012,475 Consumer indirect: Performing $ 777,513 $ 422,594 $ 129,449 $ 99,593 $ 52,298 $ 58,028 $ 0 $ 0 $ 1,539,475 Nonperforming 18 1 53 67 15 24 0 0 178 Total consumer indirect $ 777,531 $ 422,595 $ 129,502 $ 99,660 $ 52,313 $ 58,052 $ 0 $ 0 $ 1,539,653 Consumer direct: Performing $ 84,111 $ 46,381 $ 17,066 $ 12,729 $ 5,573 $ 5,020 $ 6,563 $ 2 $ 177,445 Nonperforming 6 51 1 1 29 50 22 0 160 Total consumer direct $ 84,117 $ 46,432 $ 17,067 $ 12,730 $ 5,602 $ 5,070 $ 6,585 $ 2 $ 177,605 Home equity: Performing $ 69,575 $ 72,270 $ 37,964 $ 31,506 $ 16,068 $ 41,097 $ 132,703 $ 30,569 $ 431,752 Nonperforming 0 10 114 169 105 606 563 677 2,244 Total home equity $ 69,575 $ 72,280 $ 38,078 $ 31,675 $ 16,173 $ 41,703 $ 133,266 $ 31,246 $ 433,996 (1) FICO AB refers to higher tiered loans with FICO scores greater than or equal to 720 at origination. (2) FICO CDE refers to loans with FICO scores less than 720 at origination and potentially higher risk. Business lending loans greater than $0.5 million that are on nonaccrual are individually assessed and, if necessary, a specific allocation of the allowance for credit losses is provided. A summary of individually assessed business loans as of March 31, 2023 and December 31, 2022 follows: March 31, December 31, (000’s omitted) 2023 2022 Loans with allowance allocation $ 0 $ 0 Loans without allowance allocation 3,093 3,163 Carrying balance 3,093 3,163 Contractual balance 4,201 4,201 Specifically allocated allowance 0 0 The average carrying balance of individually assessed loans was $3.1 million and $12.3 million for the three months ended March 31, 2023 and 2022, respectively. No interest income was recognized on individually assessed loans for the three months ended March 31, 2023 and 2022. Occasionally, the Company modifies loans to borrowers experiencing financial difficulty by providing principal forgiveness, term extension, payment delay, or interest rate reduction. When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses. In some cases, the Company provides multiple types of modifications on one loan. Typically, one type of modification, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another modification, such as principal forgiveness, may be granted. Upon the Company’s determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or a portion of the loan) is charged off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount. During the three months ended March 31, 2023, the amount of loans that were modified to borrowers experiencing financial difficulty was immaterial. Prior to the adoption of ASU 2022-02 on January 1, 2023, modified loans were reviewed by the Company to identify if a troubled debt restructuring (“TDR”) had 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. The amount of TDRs as of December 31, 2022 and the amount of loans modified in a TDR during the three months ended March 31, 2022 were immaterial. Allowance for Credit Losses The following presents by loan segment the activity in the allowance for credit losses during the three months ended March 31, 2023 and 2022: Three Months Ended March 31, 2023 Beginning Charge- Ending (000’s omitted) balance offs Recoveries Provision balance Business lending $ 23,297 $ (175) $ 172 $ 1,933 $ 25,227 Consumer mortgage 14,343 (19) 7 (53) 14,278 Consumer indirect 17,852 (2,531) 1,347 1,379 18,047 Consumer direct 2,973 (505) 187 375 3,030 Home equity 1,594 0 6 (12) 1,588 Unallocated 1,000 0 0 0 1,000 Allowance for credit losses – loans 61,059 (3,230) 1,719 3,622 63,170 Liabilities for off-balance-sheet credit exposures 1,123 0 0 (122) 1,001 Total allowance for credit losses $ 62,182 $ (3,230) $ 1,719 $ 3,500 $ 64,171 Three Months Ended March 31, 2022 Beginning Charge- Ending (000’s omitted) balance offs Recoveries Provision balance Business lending $ 22,995 $ (116) $ 339 $ (1,454) $ 21,764 Consumer mortgage 10,017 (40) 9 338 10,324 Consumer indirect 11,737 (1,688) 1,000 1,817 12,866 Consumer direct 2,306 (301) 176 544 2,725 Home equity 1,814 (11) 93 (428) 1,468 Unallocated 1,000 0 0 0 1,000 Allowance for credit losses – loans 49,869 (2,156) 1,617 817 50,147 Liabilities for off-balance-sheet credit exposures 803 0 0 89 892 Total allowance for credit losses $ 50,672 $ (2,156) $ 1,617 $ 906 $ 51,039 The allowance for credit losses increased to $63.2 million at March 31, 2023 compared to $61.1 million at December 31, 2022 and $50.1 million at March 31, 2022, reflective of a weaker economic forecast and an increase in loans outstanding. Accrued interest receivable on loans, included in accrued interest and fees receivable on the consolidated statements of condition, totaled $23.8 million at March Under ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326) For qualitative macroeconomic adjustments, the Company uses third party forecasted economic data scenarios utilizing a base scenario and two alternative scenarios that are weighted, with forecasts available as of March 31, 2023. These forecasts were factored into the qualitative portion of the calculation of the estimated credit losses and include the impact of a decline in residential real estate and vehicle prices as well as inflation. The scenarios utilized forecast stable unemployment levels offset by modest GDP and household income growth and continued deterioration in residential real estate, commercial real estate and used auto prices. Management developed expected loss estimates considering factors for segments as outlined below: ● Business lending – non real estate: The Company selected projected unemployment and GDP as indicators of forecasted losses related to business lending and utilize both factors in an even weight for the calculation. The Company also considered delinquencies, risk rating changes, recent charge-off history and acquired loans as part of the review of estimated losses. ● Business lending – real estate: The Company selected projected unemployment and commercial real estate values as indicators of forecasted losses related to commercial real estate loans and utilize both factors in an even weight for the calculation. The Company also considered the factors noted in business lending – non real estate. ● Consumer mortgages and home equity: The Company selected projected unemployment and residential real estate values as indicators of forecasted losses related to mortgage lending and utilize both factors in an even weight for the calculation. In addition, current delinquencies, charge-offs and acquired loans were considered. ● Consumer indirect: The Company selected projected unemployment and vehicle valuation indices as indicators of forecasted losses related to indirect lending and utilize both factors in an even weight for the calculation. In addition, current delinquencies, charge-offs and acquired loans were considered. ● Consumer direct: The Company selected projected unemployment and inflation-adjusted household income as indicators of forecasted losses related to consumer direct lending and utilize both factors in an even weight for the calculation. In addition, current delinquencies, charge-offs and acquired loans were considered. During the three months ended March 31, 2023, the Company did not purchase any loans, while the Company sold $0.5 million of secondary market eligible residential consumer mortgage loans during the period. |
GOODWILL AND IDENTIFIABLE INTAN
GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2023 | |
GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS | |
GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS | NOTE F: GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS The gross carrying amount and accumulated amortization for each type of identifiable intangible asset are as follows: March 31, 2023 December 31, 2022 Gross Net Gross Net Carrying Accumulated Carrying Carrying Accumulated Carrying (000’s omitted) Amount Amortization Amount Amount Amortization Amount Amortizing intangible assets: Core deposit intangibles $ 77,373 $ (66,265) $ 11,108 $ 77,373 $ (65,069) $ 12,304 Other intangibles 120,462 (73,592) 46,870 119,813 (71,121) 48,692 Total amortizing intangibles $ 197,835 $ (139,857) $ 57,978 $ 197,186 $ (136,190) $ 60,996 The estimated aggregate amortization expense for each of the five succeeding fiscal years ended December 31 is as follows: (000’s omitted) Apr - Dec 2023 $ 10,153 2024 11,730 2025 9,994 2026 8,838 2027 3,408 Thereafter 13,855 Total $ 57,978 Shown below are the components of the Company’s goodwill at December 31, 2022 and March 31, 2023: (000’s omitted) December 31, 2022 Activity March 31, 2023 Goodwill $ 841,841 $ 1,095 $ 842,936 |
BENEFIT PLANS
BENEFIT PLANS | 3 Months Ended |
Mar. 31, 2023 | |
BENEFIT PLANS | |
BENEFIT PLANS | NOTE G: 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 service cost component of net periodic benefit income is included in the salaries and employee benefits line of the consolidated statements of income, while the other components of net periodic benefit income are included in other expenses. The Company did not make a contribution to its defined benefit pension plan in the first quarter of 2023. The Company made The net periodic benefit cost for the three months ended March 31, 2023 and 2022 is as follows: Pension Benefits Post-retirement Benefits Three Months Ended Three Months Ended March 31, March 31, (000’s omitted) 2023 2022 2023 2022 Service cost $ 1,108 $ 1,240 $ 0 $ 0 Interest cost 1,890 1,334 23 11 Expected return on plan assets (4,020) (4,756) 0 0 Amortization of unrecognized net (gain) loss (555) 211 6 9 Amortization of prior service cost 205 154 (45) (45) Net periodic benefit $ (1,372) $ (1,817) $ (16) $ (25) |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2023 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | NOTE H: 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, 2023. 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 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. At March 31, 2023, weighted-average anti-dilutive stock options outstanding were immaterial, compared to approximately The following is a reconciliation of basic to diluted earnings per share for the three months ended March 31, 2023 and 2022: Three Months Ended March 31, (000’s omitted, except per share data) 2023 2022 Net income $ 5,798 $ 47,055 Income attributable to unvested stock-based compensation awards (17) (119) Income available to common shareholders $ 5,781 $ 46,936 Weighted-average common shares outstanding – basic 53,843 53,993 Basic earnings per share $ 0.11 $ 0.87 Net income $ 5,798 $ 47,055 Income attributable to unvested stock-based compensation awards (17) (119) Income available to common shareholders $ 5,781 $ 46,936 Weighted-average common shares outstanding – basic 53,843 53,993 Assumed exercise of stock options 207 386 Weighted-average common shares outstanding – diluted 54,050 54,379 Diluted earnings per share $ 0.11 $ 0.86 Stock Repurchase Program At its December 2022 meeting, the Board approved a new stock repurchase program authorizing the repurchase, at the discretion of senior management, of up to 2,697,000 shares of the Company’s common stock, in accordance with securities and banking laws and regulations, during the twelve-month period starting January 1, 2023. 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. There were At its December 2021 meeting, the Board approved a stock repurchase program authorizing the repurchase, at the discretion of senior management, of up to 2,697,000 shares of the Company’s common stock, in accordance with securities and banking laws and regulations, during the twelve-month period starting January 1, 2022. There were 250,000 shares of treasury stock purchases made under this authorization in 2022, including 50,000 shares of treasury stock purchases made during the first quarter of 2022. |
COMMITMENTS, CONTINGENT LIABILI
COMMITMENTS, CONTINGENT LIABILITIES AND RESTRICTIONS | 3 Months Ended |
Mar. 31, 2023 | |
COMMITMENTS, CONTINGENT LIABILITIES AND RESTRICTIONS | |
COMMITMENTS, CONTINGENT LIABILITIES AND RESTRICTIONS | NOTE I: 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: March 31, December 31, (000’s omitted) 2023 2022 Commitments to extend credit $ 1,459,684 $ 1,486,791 Standby letters of credit 56,805 57,347 Total $ 1,516,489 $ 1,544,138 The Company and its subsidiaries are subject in the normal course of business to various pending and threatened legal proceedings or other matters in which claims for monetary damages are asserted. As of March 31, 2023, management, after consultation with legal counsel, does not anticipate that the aggregate ultimate liability arising out of such pending or threatened matters 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 matters. 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 such matters 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 believed to be between $0 and $1 million in the aggregate. This estimated range is based on information currently available to the Company and involves elements of judgment and significant uncertainties. The Company does not believe that the outcome of pending or threatened litigation or other matters 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
FAIR VALUE | 3 Months Ended |
Mar. 31, 2023 | |
FAIR VALUE | |
FAIR VALUE | NOTE J: 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: ● 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. 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 March 31, 2023 Total Fair (000’s omitted) Level 1 Level 2 Level 3 Value Available-for-sale investment securities: U.S. Treasury and agency securities $ 2,511,088 $ 65,903 $ 0 $ 2,576,991 Obligations of state and political subdivisions 0 509,869 0 509,869 Government agency mortgage-backed securities 0 380,458 0 380,458 Corporate debt securities 0 7,190 0 7,190 Government agency collateralized mortgage obligations 0 11,485 0 11,485 Total available-for-sale investment securities 2,511,088 974,905 0 3,485,993 Equity securities 419 0 0 419 Mortgage loans held for sale 0 275 0 275 Commitments to originate real estate loans for sale 0 0 29 29 Forward sales commitments 0 6 0 6 Total $ 2,511,507 $ 975,186 $ 29 $ 3,486,722 December 31, 2022 Total Fair (000’s omitted) Level 1 Level 2 Level 3 Value Available-for-sale investment securities: U.S. Treasury and agency securities $ 3,178,189 $ 65,348 $ 0 $ 3,243,537 Obligations of state and political subdivisions 0 504,297 0 504,297 Government agency mortgage-backed securities 0 384,633 0 384,633 Corporate debt securities 0 7,114 0 7,114 Government agency collateralized mortgage obligations 0 12,270 0 12,270 Total available-for-sale investment securities 3,178,189 973,662 0 4,151,851 Equity securities 419 0 0 419 Commitments to originate real estate loans for sale 0 0 5 5 Forward sales commitments 0 5 0 5 Interest rate swap agreements asset 0 1 0 1 Interest rate swap agreements liability 0 (1) 0 (1) Total $ 3,178,608 $ 973,667 $ 5 $ 4,152,280 The valuation techniques used to measure fair value for the items in the table above are as follows: ● Available-for-sale investment securities and equity 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, interest rate swap yield curves, 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 statements 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 was approximately $0.3 million at March 31, 2023. There were no mortgage loans held for sale at December 31, 2022. Mortgage loans held for sale are included in other assets in the consolidated statements of condition. The unrealized gain on mortgage loans held for sale was recognized in mortgage banking revenues in the consolidated statements of income 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 statements 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 statements 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 swap agreements – 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. 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. March 31, 2023 December 31, 2022 Total Fair Total Fair (000’s omitted) Level 1 Level 2 Level 3 Value Level 1 Level 2 Level 3 Value Other real estate owned $ 0 $ 0 $ 508 $ 508 $ 0 $ 0 $ 503 $ 503 Mortgage servicing rights 0 0 983 983 0 0 1,169 1,169 Contingent consideration 0 0 (2,800) (2,800) 0 0 (2,800) (2,800) Total $ 0 $ 0 $ (1,309) $ (1,309) $ 0 $ 0 $ (1,128) $ (1,128) 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 credit 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 9.0% to 72.8% at March 31, 2023 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 a valuation allowance of approximately $0.7 million at March 31, 2023 and December 31, 2022. The Company has recorded contingent consideration liabilities that arise from acquisition activity. The contingent consideration is recorded at fair value at the date of acquisition. The valuation of contingent consideration is calculated using an income approach method, which provides an estimation of the fair value of an asset or liability based on future cash flows over a discrete projection period, discounted to present value using an appropriate rate of return. The assumptions used in the valuation calculation are based on significant unobservable inputs, therefore such valuations classify as Level 3. 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: Significant Unobservable Fair Value at Input Range (000’s omitted, except per loan data) March 31, 2023 Valuation Technique Significant Unobservable Inputs (Weighted Average) Other real estate owned $ 508 Fair value of collateral Estimated cost of disposal/market adjustment 9.0% - 72.8% (31.4%) Commitments to originate real estate loans for sale 29 Discounted cash flow Embedded servicing value 1.0 % Mortgage servicing rights 983 Discounted cash flow Weighted average constant prepayment rate 3.3% - 3.9% (3.3%) Weighted average discount rate 4.2% - 4.6% (4.6%) Adequate compensation $ 7/loan Contingent consideration (2,800) Discounted cash flow Discount rate 5.9% - 6.2% (6.1%) Probability adjusted level of retained revenue $3.1 million - $5.1 million Significant Unobservable Fair Value at Input Range (000's omitted, except per loan data) December 31, 2022 Valuation Technique Significant Unobservable Inputs (Weighted Average) Other real estate owned $ 503 Fair value of collateral Estimated cost of disposal/market adjustment 9.0% - 72.8% (35.7%) Commitments to originate real estate loans for sale 5 Discounted cash flow Embedded servicing value 1.0 % Mortgage servicing rights 1,169 Discounted cash flow Weighted average constant prepayment rate 2.9% - 3.3% (2.9%) Weighted average discount rate 4.6% - 4.9% (4.9%) Adequate compensation $ 7/loan Contingent consideration (2,800) Discounted cash flow Discount rate 5.9% - 6.2% (6.1%) Probability adjusted level of retained revenue $3.1 million - $5.1 million The significant unobservable inputs used in the determination of the fair value of assets classified as Level 3 have an inherent measurement uncertainty that, if changed, could result in higher or lower fair value measurements of these assets as of the reporting date. The weighted average of the estimated cost of disposal/market adjustment for other real estate owned was calculated by dividing the total of the differences between the appraisal values of the real estate and the book values of the real estate divided by the totals of the appraisal values of the real estate. The weighted average of the constant prepayment rate for mortgage servicing rights was calculated by adding the constant prepayment rates used in each loan pool weighted by the balance in each loan pool. The weighted average of the discount rate for mortgage servicing rights was calculated by adding the discount rates used in each loan pool weighted by the balance in each loan pool. The weighted average of the discount rate for the contingent consideration was calculated by adding the discount rates used for the calculation of the fair value of each payment of contingent consideration, weighted by the amount of the payment as part of the total fair value of contingent consideration. 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, 2023 and December 31, 2022 are presented below. The table presented below excludes other financial instruments for which the carrying value approximates fair value including cash and cash equivalents, accrued interest receivable and accrued interest payable. March 31, 2023 December 31, 2022 Carrying Carrying (000’s omitted) Value Fair Value Value Fair Value Financial assets: Net loans $ 8,919,165 $ 8,765,403 $ 8,748,335 $ 8,696,185 Held-to-maturity securities 1,090,235 1,083,330 1,079,695 1,034,795 Financial liabilities: Deposits 13,110,672 13,080,256 13,012,308 12,981,487 Overnight borrowings 58,400 58,400 768,400 768,400 Securities sold under agreement to repurchase, short-term 304,607 304,607 346,652 346,652 Other Federal Home Loan Bank borrowings 17,284 17,131 19,474 19,377 Subordinated notes payable 0 0 3,249 3,249 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. Held-to-maturity securities have been classified as a Level 1 valuation. The fair values of held-to-maturity 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. 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 notes payable have been classified as a Level 2 valuation. The fair value of overnight borrowings and securities sold under agreement to repurchase, short-term, is the amount payable on demand at the reporting date. Fair values for other FHLB borrowings and subordinated notes payable are estimated using discounted cash flows and interest rates currently being offered on similar securities. The difference between the carrying values of subordinated notes payable, 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. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Mar. 31, 2023 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | NOTE K: 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 of Benefit Plans Administrative Services, LLC, BPAS Actuarial and Pension Services, LLC, BPAS Trust Company of Puerto Rico, Fringe Benefits Design of Minnesota, Inc. (“FBD”), Northeast Retirement Services, LLC (“NRS”), Global Trust Company, Inc. (“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 Community Investment Services, Inc., The Carta Group, Inc. and OneGroup Wealth Partners, 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 NY, Inc. 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 Information about reportable segments and reconciliation of the information to the consolidated financial statements follows: Employee Consolidated (000’s omitted) Banking Benefit Services All Other Eliminations Total Three Months Ended March 31, 2023 Net interest income $ 110,682 $ 254 $ 94 $ 0 $ 111,030 Provision for credit losses 3,500 0 0 0 3,500 Loss on sales of investment securities (52,329) 0 0 0 (52,329) Gain on debt extinguishment 242 0 0 0 242 Other noninterest revenues 17,362 30,221 20,228 (2,229) 65,582 Amortization of intangible assets 1,206 1,633 828 0 3,667 Acquisition expenses 17 0 40 0 57 Other operating expenses 78,266 18,964 15,327 (2,229) 110,328 Income (loss) before income taxes $ (7,032) $ 9,878 $ 4,127 $ 0 $ 6,973 Assets $ 15,040,487 $ 229,091 $ 98,145 $ (111,770) $ 15,255,953 Goodwill $ 733,064 $ 85,384 $ 24,488 $ 0 $ 842,936 Core deposit intangibles & Other intangibles $ 11,629 $ 31,778 $ 14,571 $ 0 $ 57,978 Three Months Ended March 31, 2022 Net interest income $ 94,798 $ 68 $ 6 $ 0 $ 94,872 Provision for credit losses 906 0 0 0 906 Noninterest revenues 18,008 30,188 19,540 (2,063) 65,673 Amortization of intangible assets 1,045 1,671 1,016 0 3,732 Acquisition expenses 298 1 0 0 299 Other operating expenses 66,656 17,597 13,586 (2,063) 95,776 Income before income taxes $ 43,901 $ 10,987 $ 4,944 $ 0 $ 59,832 Assets $ 15,402,218 $ 260,166 $ 97,945 $ (134,446) $ 15,625,883 Goodwill $ 689,868 $ 85,292 $ 23,920 $ 0 $ 799,080 Core deposit intangibles & Other intangibles $ 8,041 $ 38,348 $ 17,569 $ 0 $ 63,958 |
ACCOUNTING POLICIES (Policies)
ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
ACCOUNTING POLICIES | |
Contract Balances | 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, 2023, $31.7 million of accounts receivable, including $9.2 million of unbilled fee revenue, and $1.8 million of unearned revenue, was recorded in the consolidated statements of condition. As of December 31, 2022, $33.3 million of accounts receivable, including $8.8 million of unbilled fee revenue, and $1.1 million of unearned revenue, was recorded in the consolidated statements of condition. |
Loans Modifications | Loan Modifications The Company, in certain situations, will modify a loan with a borrower experiencing financial difficulty that results in a direct change in the timing or amount of contractual cash flows. Applicable modifications include but are not limited to principal forgiveness, interest rate reduction, other-than-insignificant payment delay, term extension (other than administrative) or a combination thereof. Principal forgiveness is defined as any contractual reduction in the amount of principal due without receiving payment or assets. Interest rate reduction is defined as the change results in the borrower receiving a below market interest rate. A delay in payment that is other-than-insignificant is determined by considering factors including the amount of the restructured payments relative to the unpaid principal or collateral value of the loan, as well as the timing of the restructured payment relative to the frequency of payments due under the debt, the debt’s original contract maturity and the debt’s original expected duration. Generally, a delay in payment greater than 90 days in the last twelve months would be considered other-than-insignificant. The Company considers several factors to assess whether a borrower is experiencing financial difficulty, including but not limited to payment default or expected payment default, bankruptcy of the borrower, substantial doubt whether the borrower will continue as a going concern and estimates or projections of the borrower’s financial condition that indicate that the borrower will be unable to service the loan in accordance with the contractual provisions of the existing agreement. Following the adoption of ASU 2022-02 on January 1, 2023, the Company has established a policy to identify and disclose information required by FASB ASC 310-10-50 regarding modifications made to borrowers experiencing financial difficulty. |
Reclassifications | Reclassifications Certain reclassifications have been made to prior period balances to conform to the current period’s presentation. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In March 2022, the Financial Accounting Standards Board (“FASB”) issued ASU 2022-02 , Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
ACQUISITIONS | |
Summary of the estimated fair value of assets acquired and liabilities assumed | 2023 2022 (000s omitted) Axiom Other (1) Total Elmira Other (2) Total Consideration: Cash $ 1,819 $ 242 $ 2,061 $ 82,179 $ 3,477 $ 85,656 Recognized amounts of identifiable assets acquired and liabilities assumed: Cash and cash equivalents 0 0 0 84,988 0 84,988 Investment securities 0 0 0 11,305 0 11,305 Loans, net of allowance for credit losses on PCD loans 0 0 0 436,954 0 436,954 Premises and equipment, net 25 5 30 11,303 14 11,317 Accrued interest and fees receivable 0 0 0 882 0 882 Other assets 2 0 2 30,337 0 30,337 Core deposit intangibles 0 0 0 7,970 0 7,970 Other intangibles 531 118 649 0 3,014 3,014 Deposits 0 0 0 (522,295) 0 (522,295) Other liabilities (9) 0 (9) (3,575) 0 (3,575) Other Federal Home Loan Bank borrowings 0 0 0 (17,616) 0 (17,616) Total identifiable assets, net 549 123 672 40,253 3,028 43,281 Goodwill $ 1,270 $ 119 $ 1,389 $ 41,926 $ 449 $ 42,375 (1) Includes amounts for OneGroup acquisition completed in 2023. (2) Includes amounts for all OneGroup acquisitions completed in 2022. |
Schedule of loans acquired | (000s omitted) PCD Loans Par value of PCD loans at acquisition $ 2,184 Allowance for credit losses at acquisition (71) Non-credit discount at acquisition (81) Fair value of PCD loans at acquisition $ 2,032 |
INVESTMENT SECURITIES (Tables)
INVESTMENT SECURITIES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
INVESTMENT SECURITIES | |
Schedule of amortized cost and estimated fair value of investment securities | March 31, 2023 December 31, 2022 Gross Gross Gross Gross Amortized Unrealized Unrealized Fair Amortized Unrealized Unrealized Fair (000’s omitted) Cost Gains Losses Value Cost Gains Losses Value Available-for-Sale Portfolio: U.S. Treasury and agency securities $ 2,876,765 $ 0 $ 299,774 $ 2,576,991 $ 3,660,546 $ 0 $ 417,009 $ 3,243,537 Obligations of state and political subdivisions 541,118 1,746 32,995 509,869 549,118 506 45,327 504,297 Government agency mortgage-backed securities 433,829 105 53,476 380,458 444,689 58 60,114 384,633 Corporate debt securities 8,000 0 810 7,190 8,000 0 886 7,114 Government agency collateralized mortgage obligations 12,169 1 685 11,485 13,121 1 852 12,270 Total available-for-sale portfolio $ 3,871,881 $ 1,852 $ 387,740 $ 3,485,993 $ 4,675,474 $ 565 $ 524,188 $ 4,151,851 Held-to-Maturity Portfolio: U.S. Treasury and agency securities $ 1,086,936 $ 78 $ 6,983 $ 1,080,031 $ 1,079,695 $ 0 $ 44,900 $ 1,034,795 Government agency mortgage-backed securities 3,299 15 15 3,299 0 0 0 0 Total held-to-maturity portfolio $ 1,090,235 $ 93 $ 6,998 $ 1,083,330 $ 1,079,695 $ 0 $ 44,900 $ 1,034,795 Equity and Other Securities: Equity securities, at fair value $ 251 $ 168 $ 0 $ 419 $ 251 $ 168 $ 0 $ 419 Federal Home Loan Bank common stock 15,342 0 0 15,342 47,497 0 0 47,497 Federal Reserve Bank common stock 33,568 0 0 33,568 31,144 0 0 31,144 Other equity securities, at adjusted cost 4,434 750 0 5,184 3,532 750 0 4,282 Total equity and other securities $ 53,595 $ 918 $ 0 $ 54,513 $ 82,424 $ 918 $ 0 $ 83,342 |
Summary of investment securities that have been in a continuous unrealized loss position | As of March 31, 2023 Less than 12 Months 12 Months or Longer Total Gross Gross Gross Fair Unrealized Fair Unrealized Fair Unrealized (000’s omitted) # Value Losses # Value Losses # Value Losses Available-for-Sale Portfolio: U.S. Treasury and agency securities 14 $ 447,018 $ 1,900 69 $ 2,129,973 $ 297,874 83 $ 2,576,991 $ 299,774 Obligations of state and political subdivisions 205 105,503 1,447 330 236,260 31,548 535 341,763 32,995 Government agency mortgage-backed securities 207 33,650 1,264 544 336,011 52,212 751 369,661 53,476 Corporate debt securities 2 7,190 810 0 0 0 2 7,190 810 Government agency collateralized mortgage obligations 8 750 17 35 10,710 668 43 11,460 685 Total available-for-sale investment portfolio 436 $ 594,111 $ 5,438 978 $ 2,712,954 $ 382,302 1,414 $ 3,307,065 $ 387,740 Held-to-Maturity Portfolio: U.S. Treasury and agency securities 21 $ 1,043,209 $ 6,983 0 $ 0 $ 0 21 $ 1,043,209 $ 6,983 Government agency mortgage-backed securities 1 1,423 15 0 0 0 1 1,423 15 Total held-to-maturity portfolio 22 $ 1,044,632 $ 6,998 0 $ 0 $ 0 22 $ 1,044,632 $ 6,998 As of December 31, 2022 Less than 12 Months 12 Months or Longer Total Gross Gross Gross Fair Unrealized Fair Unrealized Fair Unrealized (000’s omitted) # Value Losses # Value Losses # Value Losses Available-for-Sale Portfolio: U.S. Treasury and agency securities 41 $ 1,384,075 $ 132,511 61 $ 1,859,462 $ 284,498 102 $ 3,243,537 $ 417,009 Obligations of state and political subdivisions 582 370,524 35,488 76 47,923 9,839 658 418,447 45,327 Government agency mortgage-backed securities 497 190,727 19,508 274 189,919 40,606 771 380,646 60,114 Corporate debt securities 0 0 0 2 7,114 886 2 7,114 886 Government agency collateralized mortgage obligations 29 9,968 600 17 2,274 252 46 12,242 852 Total available-for-sale investment portfolio 1,149 $ 1,955,294 $ 188,107 430 $ 2,106,692 $ 336,081 1,579 $ 4,061,986 $ 524,188 Held-to-Maturity Portfolio: U.S Treasury and agency securities 23 $ 1,034,795 $ 44,900 0 $ 0 $ 0 23 $ 1,034,795 $ 44,900 Total held-to-maturity portfolio 23 $ 1,034,795 $ 44,900 0 $ 0 $ 0 23 $ 1,034,795 $ 44,900 |
Schedule of 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, 2023, 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, including government agency mortgage-backed securities and government agency collateralized mortgage obligations, are shown separately. Held-to-Maturity Available-for-Sale Amortized Fair Amortized Fair (000’s omitted) Cost Value Cost Value Due in one year or less $ 0 $ 0 $ 522,140 $ 519,910 Due after one through five years 0 0 942,103 862,807 Due after five years through ten years 543,031 541,541 1,251,796 1,127,354 Due after ten years 543,905 538,490 709,844 583,979 Subtotal 1,086,936 1,080,031 3,425,883 3,094,050 Government agency mortgage-backed securities 3,299 3,299 433,829 380,458 Government agency collateralized mortgage obligations 0 0 12,169 11,485 Total $ 1,090,235 $ 1,083,330 $ 3,871,881 $ 3,485,993 |
LOANS AND ALLOWANCE FOR CREDI_2
LOANS AND ALLOWANCE FOR CREDIT LOSSES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
LOANS AND ALLOWANCE FOR CREDIT LOSSES | |
Schedule of loans receivable, net | March 31, December 31, (000’s omitted) 2023 2022 Business lending $ 3,747,942 $ 3,645,665 Consumer mortgage 3,019,718 3,012,475 Consumer indirect 1,605,659 1,539,653 Consumer direct 176,989 177,605 Home equity 432,027 433,996 Gross loans, including deferred origination costs 8,982,335 8,809,394 Allowance for credit losses (63,170) (61,059) Loans, net of allowance for credit losses $ 8,919,165 $ 8,748,335 |
Schedule of aged analysis of past due loans by class | The following table presents the aging of the amortized cost basis of the Company’s past due loans by segment as of March 31, 2023: Past Due 90+ Days Past 30 – 89 Due and Total (000’s omitted) Days Still Accruing Nonaccrual Past Due Current Total Loans Business lending $ 5,514 $ 0 $ 4,392 $ 9,906 $ 3,738,036 $ 3,747,942 Consumer mortgage 11,767 3,509 23,295 38,571 2,981,147 3,019,718 Consumer indirect 11,152 151 0 11,303 1,594,356 1,605,659 Consumer direct 1,100 81 26 1,207 175,782 176,989 Home equity 2,344 286 2,032 4,662 427,365 432,027 Total $ 31,877 $ 4,027 $ 29,745 $ 65,649 $ 8,916,686 $ 8,982,335 The following table presents the aging of the amortized cost basis of the Company’s past due loans by segment as of December 31, 2022: Past Due 90+ Days Past 30 – 89 Due and Total (000’s omitted) Days Still Accruing Nonaccrual Past Due Current Total Loans Business lending $ 9,818 $ 0 $ 4,689 $ 14,507 $ 3,631,158 $ 3,645,665 Consumer mortgage 13,757 3,510 22,583 39,850 2,972,625 3,012,475 Consumer indirect 16,767 178 0 16,945 1,522,708 1,539,653 Consumer direct 1,307 132 28 1,467 176,138 177,605 Home equity 3,595 299 1,945 5,839 428,157 433,996 Total $ 45,244 $ 4,119 $ 29,245 $ 78,608 $ 8,730,786 $ 8,809,394 |
Schedule of non-business individually assessed loans | March 31, December 31, (000’s omitted) 2023 2022 Loans with allowance allocation $ 0 $ 0 Loans without allowance allocation 3,093 3,163 Carrying balance 3,093 3,163 Contractual balance 4,201 4,201 Specifically allocated allowance 0 0 |
Schedule of allowance for loan losses by class | Three Months Ended March 31, 2023 Beginning Charge- Ending (000’s omitted) balance offs Recoveries Provision balance Business lending $ 23,297 $ (175) $ 172 $ 1,933 $ 25,227 Consumer mortgage 14,343 (19) 7 (53) 14,278 Consumer indirect 17,852 (2,531) 1,347 1,379 18,047 Consumer direct 2,973 (505) 187 375 3,030 Home equity 1,594 0 6 (12) 1,588 Unallocated 1,000 0 0 0 1,000 Allowance for credit losses – loans 61,059 (3,230) 1,719 3,622 63,170 Liabilities for off-balance-sheet credit exposures 1,123 0 0 (122) 1,001 Total allowance for credit losses $ 62,182 $ (3,230) $ 1,719 $ 3,500 $ 64,171 Three Months Ended March 31, 2022 Beginning Charge- Ending (000’s omitted) balance offs Recoveries Provision balance Business lending $ 22,995 $ (116) $ 339 $ (1,454) $ 21,764 Consumer mortgage 10,017 (40) 9 338 10,324 Consumer indirect 11,737 (1,688) 1,000 1,817 12,866 Consumer direct 2,306 (301) 176 544 2,725 Home equity 1,814 (11) 93 (428) 1,468 Unallocated 1,000 0 0 0 1,000 Allowance for credit losses – loans 49,869 (2,156) 1,617 817 50,147 Liabilities for off-balance-sheet credit exposures 803 0 0 89 892 Total allowance for credit losses $ 50,672 $ (2,156) $ 1,617 $ 906 $ 51,039 |
Business lending | |
LOANS AND ALLOWANCE FOR CREDIT LOSSES | |
Schedule of loans by credit quality indicator | Revolving Revolving Loans Loans (000’s omitted) Term Loans Amortized Cost Basis by Origination Year Amortized Converted March 31, 2023 2023 2022 2021 2020 2019 Prior Cost Basis to Term Total Business lending: Risk rating Pass $ 129,658 $ 730,008 $ 361,349 $ 221,000 $ 237,879 $ 753,972 $ 667,589 $ 442,133 $ 3,543,588 Special mention 623 2,620 4,712 6,926 3,261 56,953 30,721 31,774 137,590 Classified 224 2,972 399 1,126 3,034 32,787 6,770 19,452 66,764 Doubtful 0 0 0 0 0 0 0 0 0 Total business lending $ 130,505 $ 735,600 $ 366,460 $ 229,052 $ 244,174 $ 843,712 $ 705,080 $ 493,359 $ 3,747,942 Current period gross charge-offs $ 0 $ 47 $ 0 $ 0 $ 0 $ 0 $ 128 $ 0 $ 175 Revolving Revolving Loans Loans (000’s omitted) Term Loans Amortized Cost Basis by Origination Year Amortized Converted December 31, 2022 2022 2021 2020 2019 2018 Prior Cost Basis to Term Total Business lending: Risk rating Pass $ 747,573 $ 373,913 $ 232,591 $ 246,820 $ 168,468 $ 604,745 $ 646,771 $ 401,531 $ 3,422,412 Special mention 2,787 4,836 3,781 3,676 14,593 45,627 29,403 29,975 134,678 Classified 1,800 775 1,138 3,196 12,235 38,138 10,587 20,706 88,575 Doubtful 0 0 0 0 0 0 0 0 0 Total business lending $ 752,160 $ 379,524 $ 237,510 $ 253,692 $ 195,296 $ 688,510 $ 686,761 $ 452,212 $ 3,645,665 |
All Other Loans | |
LOANS AND ALLOWANCE FOR CREDIT LOSSES | |
Schedule of loans by credit quality indicator | Revolving Revolving Loans Loans (000’s omitted) Term Loans Amortized Cost Basis by Origination Year Amortized Converted March 31, 2023 2023 2022 2021 2020 2019 Prior Cost Basis to Term Total Consumer mortgage: FICO AB (1) Performing $ 51,091 $ 369,653 $ 483,070 $ 213,716 $ 169,347 $ 676,623 $ 369 $ 65,562 $ 2,029,431 Nonperforming 0 27 471 567 130 4,949 0 447 6,591 Total FICO AB 51,091 369,680 483,541 214,283 169,477 681,572 369 66,009 2,036,022 FICO CDE (2) Performing 18,148 161,398 176,898 109,853 78,092 368,417 27,200 23,477 963,483 Nonperforming 0 614 900 1,311 1,496 14,877 0 1,015 20,213 Total FICO CDE 18,148 162,012 177,798 111,164 79,588 383,294 27,200 24,492 983,696 Total consumer mortgage $ 69,239 $ 531,692 $ 661,339 $ 325,447 $ 249,065 $ 1,064,866 $ 27,569 $ 90,501 $ 3,019,718 Current period gross charge-offs $ 0 $ 0 $ 0 $ 0 $ 0 $ 19 $ 0 $ 0 $ 19 Consumer indirect: Performing $ 203,427 $ 731,811 $ 381,847 $ 112,730 $ 82,525 $ 93,168 $ 0 $ 0 $ 1,605,508 Nonperforming 0 18 31 73 0 29 0 0 151 Total consumer indirect $ 203,427 $ 731,829 $ 381,878 $ 112,803 $ 82,525 $ 93,197 $ 0 $ 0 $ 1,605,659 Current period gross charge-offs $ 0 $ 913 $ 621 $ 382 $ 189 $ 426 $ 0 $ 0 $ 2,531 Consumer direct: Performing $ 22,565 $ 73,630 $ 40,886 $ 14,585 $ 10,188 $ 8,622 $ 6,406 $ 0 $ 176,882 Nonperforming 0 30 0 0 0 69 8 0 107 Total consumer direct $ 22,565 $ 73,660 $ 40,886 $ 14,585 $ 10,188 $ 8,691 $ 6,414 $ 0 $ 176,989 Current period gross charge-offs $ 0 $ 172 $ 151 $ 15 $ 21 $ 95 $ 51 $ 0 $ 505 Home equity: Performing $ 11,531 $ 68,635 $ 70,163 $ 36,328 $ 30,112 $ 53,840 $ 129,361 $ 29,739 $ 429,709 Nonperforming 0 0 10 307 173 623 589 616 2,318 Total home equity $ 11,531 $ 68,635 $ 70,173 $ 36,635 $ 30,285 $ 54,463 $ 129,950 $ 30,355 $ 432,027 Current period gross charge-offs $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 (1) FICO AB refers to higher tiered loans with FICO scores greater than or equal to 720 at origination. (2) FICO CDE refers to loans with FICO scores less than 720 at origination and potentially higher risk. Revolving Revolving Loans Loans (000’s omitted) Term Loans Amortized Cost Basis by Origination Year Amortized Converted December 31, 2022 2022 2021 2020 2019 2018 Prior Cost Basis to Term Total Consumer mortgage: FICO AB (1) Performing $ 379,171 $ 492,731 $ 217,889 $ 173,942 $ 100,161 $ 604,258 $ 954 $ 58,639 $ 2,027,745 Nonperforming 0 75 573 184 399 4,347 0 449 6,027 Total FICO AB 379,171 492,806 218,462 174,126 100,560 608,605 954 59,088 2,033,772 FICO CDE (2) Performing 160,388 178,262 112,640 79,357 54,861 323,189 27,884 22,056 958,637 Nonperforming 120 974 1,250 1,606 2,127 13,177 151 661 20,066 Total FICO CDE 160,508 179,236 113,890 80,963 56,988 336,366 28,035 22,717 978,703 Total consumer mortgage $ 539,679 $ 672,042 $ 332,352 $ 255,089 $ 157,548 $ 944,971 $ 28,989 $ 81,805 $ 3,012,475 Consumer indirect: Performing $ 777,513 $ 422,594 $ 129,449 $ 99,593 $ 52,298 $ 58,028 $ 0 $ 0 $ 1,539,475 Nonperforming 18 1 53 67 15 24 0 0 178 Total consumer indirect $ 777,531 $ 422,595 $ 129,502 $ 99,660 $ 52,313 $ 58,052 $ 0 $ 0 $ 1,539,653 Consumer direct: Performing $ 84,111 $ 46,381 $ 17,066 $ 12,729 $ 5,573 $ 5,020 $ 6,563 $ 2 $ 177,445 Nonperforming 6 51 1 1 29 50 22 0 160 Total consumer direct $ 84,117 $ 46,432 $ 17,067 $ 12,730 $ 5,602 $ 5,070 $ 6,585 $ 2 $ 177,605 Home equity: Performing $ 69,575 $ 72,270 $ 37,964 $ 31,506 $ 16,068 $ 41,097 $ 132,703 $ 30,569 $ 431,752 Nonperforming 0 10 114 169 105 606 563 677 2,244 Total home equity $ 69,575 $ 72,280 $ 38,078 $ 31,675 $ 16,173 $ 41,703 $ 133,266 $ 31,246 $ 433,996 (1) FICO AB refers to higher tiered loans with FICO scores greater than or equal to 720 at origination. (2) FICO CDE refers to loans with FICO scores less than 720 at origination and potentially higher risk. |
GOODWILL AND IDENTIFIABLE INT_2
GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS | |
Schedule of gross carrying amount and accumulated amortization for each type of identifiable intangible asset | March 31, 2023 December 31, 2022 Gross Net Gross Net Carrying Accumulated Carrying Carrying Accumulated Carrying (000’s omitted) Amount Amortization Amount Amount Amortization Amount Amortizing intangible assets: Core deposit intangibles $ 77,373 $ (66,265) $ 11,108 $ 77,373 $ (65,069) $ 12,304 Other intangibles 120,462 (73,592) 46,870 119,813 (71,121) 48,692 Total amortizing intangibles $ 197,835 $ (139,857) $ 57,978 $ 197,186 $ (136,190) $ 60,996 |
Schedule of 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: (000’s omitted) Apr - Dec 2023 $ 10,153 2024 11,730 2025 9,994 2026 8,838 2027 3,408 Thereafter 13,855 Total $ 57,978 |
Schedule of components of goodwill | (000’s omitted) December 31, 2022 Activity March 31, 2023 Goodwill $ 841,841 $ 1,095 $ 842,936 |
BENEFIT PLANS (Tables)
BENEFIT PLANS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
BENEFIT PLANS | |
Schedule of net periodic benefit cost | Pension Benefits Post-retirement Benefits Three Months Ended Three Months Ended March 31, March 31, (000’s omitted) 2023 2022 2023 2022 Service cost $ 1,108 $ 1,240 $ 0 $ 0 Interest cost 1,890 1,334 23 11 Expected return on plan assets (4,020) (4,756) 0 0 Amortization of unrecognized net (gain) loss (555) 211 6 9 Amortization of prior service cost 205 154 (45) (45) Net periodic benefit $ (1,372) $ (1,817) $ (16) $ (25) |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
EARNINGS PER SHARE | |
Schedule of reconciliation of basic to diluted earnings per share | Three Months Ended March 31, (000’s omitted, except per share data) 2023 2022 Net income $ 5,798 $ 47,055 Income attributable to unvested stock-based compensation awards (17) (119) Income available to common shareholders $ 5,781 $ 46,936 Weighted-average common shares outstanding – basic 53,843 53,993 Basic earnings per share $ 0.11 $ 0.87 Net income $ 5,798 $ 47,055 Income attributable to unvested stock-based compensation awards (17) (119) Income available to common shareholders $ 5,781 $ 46,936 Weighted-average common shares outstanding – basic 53,843 53,993 Assumed exercise of stock options 207 386 Weighted-average common shares outstanding – diluted 54,050 54,379 Diluted earnings per share $ 0.11 $ 0.86 |
COMMITMENTS, CONTINGENT LIABI_2
COMMITMENTS, CONTINGENT LIABILITIES AND RESTRICTIONS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
COMMITMENTS, CONTINGENT LIABILITIES AND RESTRICTIONS | |
Schedule of the contract amounts of commitments and contingencies | March 31, December 31, (000’s omitted) 2023 2022 Commitments to extend credit $ 1,459,684 $ 1,486,791 Standby letters of credit 56,805 57,347 Total $ 1,516,489 $ 1,544,138 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
FAIR VALUE | |
Schedule of fair value measured on a recurring basis | March 31, 2023 Total Fair (000’s omitted) Level 1 Level 2 Level 3 Value Available-for-sale investment securities: U.S. Treasury and agency securities $ 2,511,088 $ 65,903 $ 0 $ 2,576,991 Obligations of state and political subdivisions 0 509,869 0 509,869 Government agency mortgage-backed securities 0 380,458 0 380,458 Corporate debt securities 0 7,190 0 7,190 Government agency collateralized mortgage obligations 0 11,485 0 11,485 Total available-for-sale investment securities 2,511,088 974,905 0 3,485,993 Equity securities 419 0 0 419 Mortgage loans held for sale 0 275 0 275 Commitments to originate real estate loans for sale 0 0 29 29 Forward sales commitments 0 6 0 6 Total $ 2,511,507 $ 975,186 $ 29 $ 3,486,722 December 31, 2022 Total Fair (000’s omitted) Level 1 Level 2 Level 3 Value Available-for-sale investment securities: U.S. Treasury and agency securities $ 3,178,189 $ 65,348 $ 0 $ 3,243,537 Obligations of state and political subdivisions 0 504,297 0 504,297 Government agency mortgage-backed securities 0 384,633 0 384,633 Corporate debt securities 0 7,114 0 7,114 Government agency collateralized mortgage obligations 0 12,270 0 12,270 Total available-for-sale investment securities 3,178,189 973,662 0 4,151,851 Equity securities 419 0 0 419 Commitments to originate real estate loans for sale 0 0 5 5 Forward sales commitments 0 5 0 5 Interest rate swap agreements asset 0 1 0 1 Interest rate swap agreements liability 0 (1) 0 (1) Total $ 3,178,608 $ 973,667 $ 5 $ 4,152,280 |
Schedule of assets and liabilities measured on a non-recurring basis | March 31, 2023 December 31, 2022 Total Fair Total Fair (000’s omitted) Level 1 Level 2 Level 3 Value Level 1 Level 2 Level 3 Value Other real estate owned $ 0 $ 0 $ 508 $ 508 $ 0 $ 0 $ 503 $ 503 Mortgage servicing rights 0 0 983 983 0 0 1,169 1,169 Contingent consideration 0 0 (2,800) (2,800) 0 0 (2,800) (2,800) Total $ 0 $ 0 $ (1,309) $ (1,309) $ 0 $ 0 $ (1,128) $ (1,128) |
Schedule of significant unobservable inputs, fair value valuation techniques | Significant Unobservable Fair Value at Input Range (000’s omitted, except per loan data) March 31, 2023 Valuation Technique Significant Unobservable Inputs (Weighted Average) Other real estate owned $ 508 Fair value of collateral Estimated cost of disposal/market adjustment 9.0% - 72.8% (31.4%) Commitments to originate real estate loans for sale 29 Discounted cash flow Embedded servicing value 1.0 % Mortgage servicing rights 983 Discounted cash flow Weighted average constant prepayment rate 3.3% - 3.9% (3.3%) Weighted average discount rate 4.2% - 4.6% (4.6%) Adequate compensation $ 7/loan Contingent consideration (2,800) Discounted cash flow Discount rate 5.9% - 6.2% (6.1%) Probability adjusted level of retained revenue $3.1 million - $5.1 million Significant Unobservable Fair Value at Input Range (000's omitted, except per loan data) December 31, 2022 Valuation Technique Significant Unobservable Inputs (Weighted Average) Other real estate owned $ 503 Fair value of collateral Estimated cost of disposal/market adjustment 9.0% - 72.8% (35.7%) Commitments to originate real estate loans for sale 5 Discounted cash flow Embedded servicing value 1.0 % Mortgage servicing rights 1,169 Discounted cash flow Weighted average constant prepayment rate 2.9% - 3.3% (2.9%) Weighted average discount rate 4.6% - 4.9% (4.9%) Adequate compensation $ 7/loan Contingent consideration (2,800) Discounted cash flow Discount rate 5.9% - 6.2% (6.1%) Probability adjusted level of retained revenue $3.1 million - $5.1 million |
Schedule of carrying amounts and estimated fair values of other financial instruments | March 31, 2023 December 31, 2022 Carrying Carrying (000’s omitted) Value Fair Value Value Fair Value Financial assets: Net loans $ 8,919,165 $ 8,765,403 $ 8,748,335 $ 8,696,185 Held-to-maturity securities 1,090,235 1,083,330 1,079,695 1,034,795 Financial liabilities: Deposits 13,110,672 13,080,256 13,012,308 12,981,487 Overnight borrowings 58,400 58,400 768,400 768,400 Securities sold under agreement to repurchase, short-term 304,607 304,607 346,652 346,652 Other Federal Home Loan Bank borrowings 17,284 17,131 19,474 19,377 Subordinated notes payable 0 0 3,249 3,249 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
SEGMENT INFORMATION | |
Schedule of segment reporting information by segment | Employee Consolidated (000’s omitted) Banking Benefit Services All Other Eliminations Total Three Months Ended March 31, 2023 Net interest income $ 110,682 $ 254 $ 94 $ 0 $ 111,030 Provision for credit losses 3,500 0 0 0 3,500 Loss on sales of investment securities (52,329) 0 0 0 (52,329) Gain on debt extinguishment 242 0 0 0 242 Other noninterest revenues 17,362 30,221 20,228 (2,229) 65,582 Amortization of intangible assets 1,206 1,633 828 0 3,667 Acquisition expenses 17 0 40 0 57 Other operating expenses 78,266 18,964 15,327 (2,229) 110,328 Income (loss) before income taxes $ (7,032) $ 9,878 $ 4,127 $ 0 $ 6,973 Assets $ 15,040,487 $ 229,091 $ 98,145 $ (111,770) $ 15,255,953 Goodwill $ 733,064 $ 85,384 $ 24,488 $ 0 $ 842,936 Core deposit intangibles & Other intangibles $ 11,629 $ 31,778 $ 14,571 $ 0 $ 57,978 Three Months Ended March 31, 2022 Net interest income $ 94,798 $ 68 $ 6 $ 0 $ 94,872 Provision for credit losses 906 0 0 0 906 Noninterest revenues 18,008 30,188 19,540 (2,063) 65,673 Amortization of intangible assets 1,045 1,671 1,016 0 3,732 Acquisition expenses 298 1 0 0 299 Other operating expenses 66,656 17,597 13,586 (2,063) 95,776 Income before income taxes $ 43,901 $ 10,987 $ 4,944 $ 0 $ 59,832 Assets $ 15,402,218 $ 260,166 $ 97,945 $ (134,446) $ 15,625,883 Goodwill $ 689,868 $ 85,292 $ 23,920 $ 0 $ 799,080 Core deposit intangibles & Other intangibles $ 8,041 $ 38,348 $ 17,569 $ 0 $ 63,958 |
ACQUISITIONS (Details)
ACQUISITIONS (Details) $ in Thousands | 3 Months Ended | ||||||||
May 01, 2023 USD ($) | Mar. 01, 2023 USD ($) | Nov. 01, 2022 USD ($) | May 13, 2022 USD ($) country | Jan. 01, 2022 USD ($) | Jan. 01, 2021 Agency | Mar. 31, 2023 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Acquisitions | |||||||||
Goodwill | $ 842,936 | $ 799,080 | $ 841,841 | ||||||
Loans | 0 | 436,954 | |||||||
Investment securities | 0 | 11,305 | |||||||
Deposits | 0 | 522,295 | |||||||
Number of insurance agencies asset acquired | Agency | 3 | ||||||||
Net increase (decrease) in goodwill | 1,095 | ||||||||
Core Deposit Intangibles | |||||||||
Acquisitions | |||||||||
Deposits | 0 | (7,970) | |||||||
Subsequent events | Certain assets of Hyde Park Insurance Services, Inc. | |||||||||
Acquisitions | |||||||||
Cash consideration | $ 4,300 | ||||||||
Axiom | |||||||||
Acquisitions | |||||||||
Cash consideration | $ 1,800 | ||||||||
Intangibles | 500 | ||||||||
Goodwill | $ 1,300 | 1,270 | |||||||
Revenue | 100 | ||||||||
Operating Expenses | 200 | ||||||||
Loans | 0 | ||||||||
Investment securities | 0 | ||||||||
Deposits | 0 | ||||||||
Direct expenses | 200 | ||||||||
Axiom | Core Deposit Intangibles | |||||||||
Acquisitions | |||||||||
Deposits | 0 | ||||||||
Certain Assets Of Jmd Associates | |||||||||
Acquisitions | |||||||||
Cash consideration | $ 1,000 | ||||||||
Goodwill | 500 | ||||||||
Revenue | 100 | ||||||||
Operating Expenses | 100 | ||||||||
Direct expenses | 100 | ||||||||
Certain Assets Of Jmd Associates | Noncompete agreement | |||||||||
Acquisitions | |||||||||
Intangibles | 100 | ||||||||
Certain Assets Of Jmd Associates | Customer list intangible | |||||||||
Acquisitions | |||||||||
Intangibles | $ 400 | ||||||||
Elmira Savings Bank ("Elmira") | |||||||||
Acquisitions | |||||||||
Goodwill | $ 41,900 | 41,926 | |||||||
Revenue | 4,700 | ||||||||
Operating Expenses | 1,100 | ||||||||
Purchase price of acquisition | $ 82,200 | ||||||||
Number of country | country | 5 | ||||||||
Assets acquired | $ 583,700 | ||||||||
Loans | 437,000 | 436,954 | |||||||
Investment securities | 11,300 | 11,305 | |||||||
Deposits | 522,300 | 522,295 | |||||||
Direct expenses | 1,100 | ||||||||
Elmira Savings Bank ("Elmira") | Core Deposit Intangibles | |||||||||
Acquisitions | |||||||||
Deposits | $ 8,000 | $ (7,970) | |||||||
Fringe Benefits Design of Minnesota, Inc ("FBD") | |||||||||
Acquisitions | |||||||||
Net increase (decrease) in goodwill | 300 | ||||||||
One Group NY, Inc. | |||||||||
Acquisitions | |||||||||
Intangibles | $ 2,500 | ||||||||
Revenue | 200 | 300 | |||||||
Operating Expenses | 100 | 100 | |||||||
Purchase price of acquisition | $ 2,500 | ||||||||
Direct expenses | $ 100 | $ 100 |
ACQUISITIONS - Estimated fair v
ACQUISITIONS - Estimated fair value of assets acquired and liabilities assumed (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2023 | Dec. 31, 2022 | Mar. 01, 2023 | May 13, 2022 | Mar. 31, 2022 | |
Consideration : | |||||
Cash | $ 2,061 | $ 85,656 | |||
Recognized amounts of identifiable assets acquired and liabilities assumed: | |||||
Cash and cash equivalents | 0 | 84,988 | |||
Investment securities | 0 | 11,305 | |||
Loans, net of allowance for credit losses on PCD loans | 0 | 436,954 | |||
Premises and equipment, net | 30 | 11,317 | |||
Accrued interest and fees receivable | 0 | 882 | |||
Other assets | 2 | 30,337 | |||
Deposits | 0 | (522,295) | |||
Other liabilities | (9) | (3,575) | |||
Other Federal Home Loan Bank borrowings | 0 | (17,616) | |||
Total identifiable assets, net | 672 | 43,281 | |||
Goodwill | 842,936 | 841,841 | $ 799,080 | ||
Core Deposit Intangibles | |||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | |||||
Deposits | 0 | 7,970 | |||
Other Intangibles | |||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | |||||
Other intangibles | 649 | 3,014 | |||
Axiom | |||||
Consideration : | |||||
Cash | 1,819 | ||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | |||||
Cash and cash equivalents | 0 | ||||
Investment securities | 0 | ||||
Loans, net of allowance for credit losses on PCD loans | 0 | ||||
Premises and equipment, net | 25 | ||||
Accrued interest and fees receivable | 0 | ||||
Other assets | 2 | ||||
Other intangibles | $ 500 | ||||
Deposits | 0 | ||||
Other liabilities | (9) | ||||
Other Federal Home Loan Bank borrowings | 0 | ||||
Total identifiable assets, net | 549 | ||||
Goodwill | 1,270 | $ 1,300 | |||
Axiom | Core Deposit Intangibles | |||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | |||||
Deposits | 0 | ||||
Axiom | Other Intangibles | |||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | |||||
Other intangibles | 531 | ||||
Elmira Savings Bank ("Elmira") | |||||
Consideration : | |||||
Cash | 82,179 | ||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | |||||
Cash and cash equivalents | 84,988 | ||||
Investment securities | 11,305 | $ 11,300 | |||
Loans, net of allowance for credit losses on PCD loans | 436,954 | 437,000 | |||
Premises and equipment, net | 11,303 | ||||
Accrued interest and fees receivable | 882 | ||||
Other assets | 30,337 | ||||
Deposits | (522,295) | (522,300) | |||
Other liabilities | (3,575) | ||||
Other Federal Home Loan Bank borrowings | (17,616) | ||||
Total identifiable assets, net | 40,253 | ||||
Goodwill | 41,926 | 41,900 | |||
Elmira Savings Bank ("Elmira") | Core Deposit Intangibles | |||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | |||||
Deposits | 7,970 | $ (8,000) | |||
Elmira Savings Bank ("Elmira") | Other Intangibles | |||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | |||||
Other intangibles | 0 | ||||
Other | |||||
Consideration : | |||||
Cash | 242 | 3,477 | |||
Recognized amounts of identifiable assets acquired and liabilities assumed: | |||||
Cash and cash equivalents | 0 | 0 | |||
Investment securities | 0 | 0 | |||
Loans, net of allowance for credit losses on PCD loans | 0 | 0 | |||
Premises and equipment, net | 5 | 14 | |||
Accrued interest and fees receivable | 0 | 0 | |||
Other assets | 0 | 0 | |||
Deposits | 0 | 0 | |||
Other liabilities | 0 | 0 | |||
Other Federal Home Loan Bank borrowings | 0 | 0 | |||
Total identifiable assets, net | 123 | 3,028 | |||
Goodwill | 119 | 449 | |||
Other | Core Deposit Intangibles | |||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | |||||
Deposits | 0 | 0 | |||
Other | Other Intangibles | |||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | |||||
Other intangibles | 118 | 3,014 | |||
One Group Acquisitions | |||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | |||||
Goodwill | $ 1,389 | $ 42,375 |
ACQUISITIONS - Loans acquired (
ACQUISITIONS - Loans acquired (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Financial Asset Acquired with Credit Deterioration [Member] | |
Certain loans acquired during the period: | |
Par value of PCD loans at acquisition | $ 2,184 |
Allowance for credit losses at acquisition | (71) |
Non-credit premium at acquisition | (81) |
Fair value of PCD loans at acquisition | 2,032 |
Elmira Savings Bank ("Elmira") | Non-PCD Loans | |
Certain loans acquired during the period: | |
Unpaid principal balance | 455,700 |
Net discount on fair value adjustments | $ 20,800 |
ACQUISITIONS - Intangible asset
ACQUISITIONS - Intangible asset, goodwill and acquisition related expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Identifiable Intangible Assets | ||
Merger and acquisition integration related (recoveries) expenses | $ 57 | $ 299 |
Other Intangibles | ||
Identifiable Intangible Assets | ||
Intangible asset useful life (amortization period) | 10 years | |
Elmira Savings Bank ("Elmira") | ||
Identifiable Intangible Assets | ||
Federal Home Loan Bank of New York borrowings | $ 17,600 | |
Weighted-average rate | 2.48% | |
Axiom | Core Deposit Intangibles | ||
Identifiable Intangible Assets | ||
Intangible asset useful life (amortization period) | 8 years |
ACCOUNTING POLICIES (Details)
ACCOUNTING POLICIES (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Contract Balances | ||
Accounts receivable | $ 31.7 | $ 33.3 |
Unbilled fee revenue | 9.2 | 8.8 |
Unearned revenue | $ 1.8 | $ 1.1 |
INVESTMENT SECURITIES - Availab
INVESTMENT SECURITIES - Available-for-Sale Portfolio (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Available-for-Sale Portfolio | ||
Amortized Cost | $ 3,871,881 | $ 4,675,474 |
Gross Unrealized Gains | 1,852 | 565 |
Gross Unrealized Losses | 387,740 | 524,188 |
Total - Fair value | 3,485,993 | 4,151,851 |
Held-to-Maturity Portfolio | ||
Amortized Cost | 1,090,235 | 1,079,695 |
Gross Unrealized Gains | 93 | 0 |
Gross Unrealized Losses | 6,998 | 44,900 |
Total - Fair Value | 1,083,330 | 1,034,795 |
U.S. Treasury and agency securities | ||
Available-for-Sale Portfolio | ||
Amortized Cost | 2,876,765 | 3,660,546 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 299,774 | 417,009 |
Total - Fair value | 2,576,991 | 3,243,537 |
Held-to-Maturity Portfolio | ||
Amortized Cost | 1,086,936 | 1,079,695 |
Gross Unrealized Gains | 78 | 0 |
Gross Unrealized Losses | 6,983 | 44,900 |
Total - Fair Value | 1,080,031 | 1,034,795 |
Obligations of state and political subdivisions | ||
Available-for-Sale Portfolio | ||
Amortized Cost | 541,118 | 549,118 |
Gross Unrealized Gains | 1,746 | 506 |
Gross Unrealized Losses | 32,995 | 45,327 |
Total - Fair value | 509,869 | 504,297 |
Government agency mortgage-backed securities | ||
Available-for-Sale Portfolio | ||
Amortized Cost | 433,829 | 444,689 |
Gross Unrealized Gains | 105 | 58 |
Gross Unrealized Losses | 53,476 | 60,114 |
Total - Fair value | 380,458 | 384,633 |
Held-to-Maturity Portfolio | ||
Amortized Cost | 3,299 | 0 |
Gross Unrealized Gains | 15 | 0 |
Gross Unrealized Losses | 15 | 0 |
Total - Fair Value | 3,299 | 0 |
Corporate debt securities | ||
Available-for-Sale Portfolio | ||
Amortized Cost | 8,000 | 8,000 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 810 | 886 |
Total - Fair value | 7,190 | 7,114 |
Government agency collateralized mortgage obligations | ||
Available-for-Sale Portfolio | ||
Amortized Cost | 12,169 | 13,121 |
Gross Unrealized Gains | 1 | 1 |
Gross Unrealized Losses | 685 | 852 |
Total - Fair value | 11,485 | $ 12,270 |
Held-to-Maturity Portfolio | ||
Amortized Cost | 0 | |
Total - Fair Value | $ 0 |
INVESTMENT SECURITIES - Equity
INVESTMENT SECURITIES - Equity and Other Securities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Equity and Other Securities | ||
Amortized Cost | $ 53,595 | $ 82,424 |
Gross Unrealized Gains | 918 | 918 |
Gross Unrealized Losses | 0 | 0 |
Equity and other securities | 54,513 | 83,342 |
Equity Securities, at Fair Value | ||
Amortized Cost | 251 | 251 |
Gross Unrealized Gains | 168 | 168 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 419 | 419 |
Other Equity Securities, at Adjusted Cost | ||
Gross Unrealized Losses | 387,740 | 524,188 |
Federal Home Loan Bank Common Stock | ||
Other Equity Securities, at Adjusted Cost | ||
Amortized Cost | 15,342 | 47,497 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 15,342 | 47,497 |
Federal Reserve Bank Common Stock | ||
Other Equity Securities, at Adjusted Cost | ||
Amortized Cost | 33,568 | 31,144 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 33,568 | 31,144 |
Other Equity Securities | ||
Other Equity Securities, at Adjusted Cost | ||
Amortized Cost | 4,434 | 3,532 |
Gross Unrealized Gains | 750 | 750 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | $ 5,184 | $ 4,282 |
INVESTMENT SECURITIES - Investm
INVESTMENT SECURITIES - Investment Securities in a Continuous Unrealized Loss Position (Details) $ in Thousands | Mar. 31, 2023 USD ($) position | Dec. 31, 2022 USD ($) position |
Available-for-Sale Securities in Unrealized Loss Positions, Number of Positions | ||
Less than 12 months | position | 436 | 1,149 |
12 months or longer | position | 978 | 430 |
Total | position | 1,414 | 1,579 |
Available-for-Sale Securities, in Unrealized Loss Position, Fair Value | ||
Less than 12 months | $ 594,111 | $ 1,955,294 |
12 months or longer | 2,712,954 | 2,106,692 |
Total | 3,307,065 | 4,061,986 |
Available-for-Sale Securities, in Unrealized Loss Position, Gross Unrealized Losses | ||
Less than 12 months | 5,438 | 188,107 |
12 months or longer | 382,302 | 336,081 |
Total | $ 387,740 | $ 524,188 |
Number of positions | ||
Less than 12 Months | position | 22 | 23 |
12 Months or Longer | position | 0 | 0 |
Total | position | 22 | 23 |
Fair Value | ||
Less than 12 Months | $ 1,044,632 | $ 1,034,795 |
12 Months or Longer | 0 | 0 |
Total | 1,044,632 | 1,034,795 |
Gross Unrealized Losses | ||
Less than 12 Months | 6,998 | 44,900 |
12 Months or Longer | 0 | 0 |
Total | 6,998 | $ 44,900 |
Available-for-sale, allowance for credit losses | 0 | |
Accrued interest receivable on available-for-sale debt securities | $ 12,300 | |
Debt Securities, Available-for-Sale, Accrued Interest, after Allowance for Credit Loss, Statement of Financial Position [Extensible Enumeration] | Interest Receivable | |
Available-for-sale Securities | ||
Gross Unrealized Losses | ||
Accrued interest receivable on held-to-maturity debt securities | $ 2,800 | |
U.S. Treasury and agency securities | ||
Available-for-Sale Securities in Unrealized Loss Positions, Number of Positions | ||
Less than 12 months | position | 14 | 41 |
12 months or longer | position | 69 | 61 |
Total | position | 83 | 102 |
Available-for-Sale Securities, in Unrealized Loss Position, Fair Value | ||
Less than 12 months | $ 447,018 | $ 1,384,075 |
12 months or longer | 2,129,973 | 1,859,462 |
Total | 2,576,991 | 3,243,537 |
Available-for-Sale Securities, in Unrealized Loss Position, Gross Unrealized Losses | ||
Less than 12 months | 1,900 | 132,511 |
12 months or longer | 297,874 | 284,498 |
Total | $ 299,774 | $ 417,009 |
Number of positions | ||
Less than 12 Months | position | 21 | 23 |
12 Months or Longer | position | 0 | 0 |
Total | position | 21 | 23 |
Fair Value | ||
Less than 12 Months | $ 1,043,209 | $ 1,034,795 |
12 Months or Longer | 0 | 0 |
Total | 1,043,209 | 1,034,795 |
Gross Unrealized Losses | ||
Less than 12 Months | 6,983 | 44,900 |
12 Months or Longer | 0 | 0 |
Total | $ 6,983 | $ 44,900 |
Obligations of state and political subdivisions | ||
Available-for-Sale Securities in Unrealized Loss Positions, Number of Positions | ||
Less than 12 months | position | 205 | 582 |
12 months or longer | position | 330 | 76 |
Total | position | 535 | 658 |
Available-for-Sale Securities, in Unrealized Loss Position, Fair Value | ||
Less than 12 months | $ 105,503 | $ 370,524 |
12 months or longer | 236,260 | 47,923 |
Total | 341,763 | 418,447 |
Available-for-Sale Securities, in Unrealized Loss Position, Gross Unrealized Losses | ||
Less than 12 months | 1,447 | 35,488 |
12 months or longer | 31,548 | 9,839 |
Total | $ 32,995 | $ 45,327 |
Government agency mortgage-backed securities | ||
Available-for-Sale Securities in Unrealized Loss Positions, Number of Positions | ||
Less than 12 months | position | 207 | 497 |
12 months or longer | position | 544 | 274 |
Total | position | 751 | 771 |
Available-for-Sale Securities, in Unrealized Loss Position, Fair Value | ||
Less than 12 months | $ 33,650 | $ 190,727 |
12 months or longer | 336,011 | 189,919 |
Total | 369,661 | 380,646 |
Available-for-Sale Securities, in Unrealized Loss Position, Gross Unrealized Losses | ||
Less than 12 months | 1,264 | 19,508 |
12 months or longer | 52,212 | 40,606 |
Total | $ 53,476 | $ 60,114 |
Number of positions | ||
Less than 12 Months | position | 1 | |
12 Months or Longer | position | 0 | |
Total | position | 1 | |
Fair Value | ||
Less than 12 Months | $ 1,423 | |
12 Months or Longer | 0 | |
Total | 1,423 | |
Gross Unrealized Losses | ||
Less than 12 Months | 15 | |
12 Months or Longer | 0 | |
Total | $ 15 | |
Corporate debt securities | ||
Available-for-Sale Securities in Unrealized Loss Positions, Number of Positions | ||
Less than 12 months | position | 2 | 0 |
12 months or longer | position | 0 | 2 |
Total | position | 2 | 2 |
Available-for-Sale Securities, in Unrealized Loss Position, Fair Value | ||
Less than 12 months | $ 7,190 | $ 0 |
12 months or longer | 0 | 7,114 |
Total | 7,190 | 7,114 |
Available-for-Sale Securities, in Unrealized Loss Position, Gross Unrealized Losses | ||
Less than 12 months | 810 | 0 |
12 months or longer | 0 | 886 |
Total | $ 810 | $ 886 |
Government agency collateralized mortgage obligations | ||
Available-for-Sale Securities in Unrealized Loss Positions, Number of Positions | ||
Less than 12 months | position | 8 | 29 |
12 months or longer | position | 35 | 17 |
Total | position | 43 | 46 |
Available-for-Sale Securities, in Unrealized Loss Position, Fair Value | ||
Less than 12 months | $ 750 | $ 9,968 |
12 months or longer | 10,710 | 2,274 |
Total | 11,460 | 12,242 |
Available-for-Sale Securities, in Unrealized Loss Position, Gross Unrealized Losses | ||
Less than 12 months | 17 | 600 |
12 months or longer | 668 | 252 |
Total | $ 685 | $ 852 |
INVESTMENT SECURITIES - Amortiz
INVESTMENT SECURITIES - Amortized cost and estimated fair value of debt securities by contractual maturity (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Available-for-Sale, Amortized Cost | ||
Due in one year or less | $ 522,140 | |
Due after one through five years | 942,103 | |
Due after five years through ten years | 1,251,796 | |
Due after ten years | 709,844 | |
Subtotal | 3,425,883 | |
Total | 3,871,881 | $ 4,675,474 |
Available-for-Sale, Fair Value | ||
Due in one year or less | 519,910 | |
Due after one through five years | 862,807 | |
Due after five years through ten years | 1,127,354 | |
Due after ten years | 583,979 | |
Subtotal | 3,094,050 | |
Total - Fair value | 3,485,993 | 4,151,851 |
Held-to-Maturity, Amortized Cost | ||
Due in one year or less | 0 | |
Due after one through five years | 0 | |
Due after five years through ten years | 543,031 | |
Due after ten years | 543,905 | |
Subtotal | 1,086,936 | |
Total | 1,090,235 | 1,079,695 |
Held-to-Maturity, Fair Value | ||
Due in one year or less | 0 | |
Due after one through five years | 0 | |
Due after five years through ten years | 541,541 | |
Due after ten years | 538,490 | |
Subtotal | 1,080,031 | |
Total - Fair Value | 1,083,330 | 1,034,795 |
Government agency mortgage-backed securities | ||
Available-for-Sale, Amortized Cost | ||
Total | 433,829 | 444,689 |
Available-for-Sale, Fair Value | ||
Total - Fair value | 380,458 | 384,633 |
Held-to-Maturity, Amortized Cost | ||
Total | 3,299 | 0 |
Held-to-Maturity, Fair Value | ||
Total - Fair Value | 3,299 | 0 |
Government agency collateralized mortgage obligations | ||
Available-for-Sale, Amortized Cost | ||
Total | 12,169 | 13,121 |
Available-for-Sale, Fair Value | ||
Total - Fair value | 11,485 | $ 12,270 |
Held-to-Maturity, Amortized Cost | ||
Total | 0 | |
Held-to-Maturity, Fair Value | ||
Total - Fair Value | $ 0 |
INVESTMENT SECURITIES - Inves_2
INVESTMENT SECURITIES - Investment Securities Pledged as Collateral (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Investment Securities Pledged as Collateral | |||
Gross realized losses | $ (52,329) | $ 0 | |
Proceeds from sales of available-for-sale investment securities | 733,789 | $ 0 | |
Investment securities pledged to collateralize certain deposits and borrowings | 3,750,000 | $ 2,180,000 | |
U.S. Treasury and agency securities | |||
Investment Securities Pledged as Collateral | |||
Book value of available-for-sale | 786,100 | ||
Gross realized losses | 52,300 | ||
Proceeds from sales of available-for-sale investment securities | 733,800 | ||
U.S. Treasury and agency securities | Securities Sold under Agreements to Repurchase | |||
Investment Securities Pledged as Collateral | |||
Investment securities pledged to collateralize certain deposits and borrowings | $ 640,400 | $ 466,900 |
LOANS AND ALLOWANCE FOR CREDI_3
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Loan Summary (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Loans receivable, net | ||||
Gross loans, including deferred origination costs | $ 8,982,335 | $ 8,809,394 | ||
Allowance for credit losses | (63,170) | (61,059) | $ (50,147) | $ (49,869) |
Net loans | 8,919,165 | 8,748,335 | ||
Business lending | ||||
Loans receivable, net | ||||
Gross loans, including deferred origination costs | 3,747,942 | 3,645,665 | ||
Consumer mortgage | ||||
Loans receivable, net | ||||
Gross loans, including deferred origination costs | 3,019,718 | 3,012,475 | ||
Consumer indirect | ||||
Loans receivable, net | ||||
Gross loans, including deferred origination costs | 1,605,659 | 1,539,653 | ||
Consumer direct | ||||
Loans receivable, net | ||||
Gross loans, including deferred origination costs | 176,989 | 177,605 | ||
Home equity | ||||
Loans receivable, net | ||||
Gross loans, including deferred origination costs | 432,027 | 433,996 | ||
Commercial Portfolio Segment | Business lending | ||||
Loans receivable, net | ||||
Gross loans, including deferred origination costs | 3,747,942 | 3,645,665 | ||
Allowance for credit losses | (25,227) | (23,297) | (21,764) | (22,995) |
Residential Portfolio Segment | Consumer mortgage | ||||
Loans receivable, net | ||||
Gross loans, including deferred origination costs | 3,019,718 | 3,012,475 | ||
Allowance for credit losses | (14,278) | (14,343) | (10,324) | (10,017) |
Residential Portfolio Segment | Home equity | ||||
Loans receivable, net | ||||
Gross loans, including deferred origination costs | 432,027 | 433,996 | ||
Allowance for credit losses | (1,588) | (1,594) | (1,468) | (1,814) |
Consumer Portfolio Segment | Consumer indirect | ||||
Loans receivable, net | ||||
Gross loans, including deferred origination costs | 1,605,659 | 1,539,653 | ||
Allowance for credit losses | (18,047) | (17,852) | (12,866) | (11,737) |
Consumer Portfolio Segment | Consumer direct | ||||
Loans receivable, net | ||||
Gross loans, including deferred origination costs | 176,989 | 177,605 | ||
Allowance for credit losses | $ (3,030) | $ (2,973) | $ (2,725) | $ (2,306) |
LOANS AND ALLOWANCE FOR CREDI_4
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Credit Quality By Past Due Status (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Aged analysis of the company's loans | ||
Total Loans | $ 8,982,335 | $ 8,809,394 |
Total Loans | 8,982,335 | 8,809,394 |
Interest income on nonaccrual loans | 0 | 0 |
Legacy Loan | ||
Aged analysis of the company's loans | ||
Total Loans | 8,982,335 | 8,809,394 |
Nonaccrual | 29,745 | 29,245 |
Legacy Loan | Financial Asset, Past Due | ||
Aged analysis of the company's loans | ||
Total Loans | 65,649 | 78,608 |
Legacy Loan | Past Due 30 - 89 Days | ||
Aged analysis of the company's loans | ||
Total Loans | 31,877 | 45,244 |
Legacy Loan | 90+ Days Past Due and Still Accruing | ||
Aged analysis of the company's loans | ||
Total Loans | 4,027 | 4,119 |
Legacy Loan | Financial Asset, Not Past Due | ||
Aged analysis of the company's loans | ||
Total Loans | 8,916,686 | 8,730,786 |
Business lending | ||
Aged analysis of the company's loans | ||
Total Loans | 3,747,942 | 3,645,665 |
Consumer mortgage | ||
Aged analysis of the company's loans | ||
Total Loans | 3,019,718 | 3,012,475 |
Consumer indirect | ||
Aged analysis of the company's loans | ||
Total Loans | 1,605,659 | 1,539,653 |
Consumer direct | ||
Aged analysis of the company's loans | ||
Total Loans | 176,989 | 177,605 |
Home equity | ||
Aged analysis of the company's loans | ||
Total Loans | 432,027 | 433,996 |
Commercial Portfolio Segment | Business lending | ||
Aged analysis of the company's loans | ||
Total Loans | 3,747,942 | 3,645,665 |
Commercial Portfolio Segment | Business lending | Legacy Loan | ||
Aged analysis of the company's loans | ||
Total Loans | 3,747,942 | 3,645,665 |
Nonaccrual | 4,392 | 4,689 |
Commercial Portfolio Segment | Business lending | Legacy Loan | Financial Asset, Past Due | ||
Aged analysis of the company's loans | ||
Total Loans | 9,906 | 14,507 |
Commercial Portfolio Segment | Business lending | Legacy Loan | Past Due 30 - 89 Days | ||
Aged analysis of the company's loans | ||
Total Loans | 5,514 | 9,818 |
Commercial Portfolio Segment | Business lending | Legacy Loan | 90+ Days Past Due and Still Accruing | ||
Aged analysis of the company's loans | ||
Total Loans | 0 | 0 |
Commercial Portfolio Segment | Business lending | Legacy Loan | Financial Asset, Not Past Due | ||
Aged analysis of the company's loans | ||
Total Loans | 3,738,036 | 3,631,158 |
Residential Portfolio Segment | Consumer mortgage | ||
Aged analysis of the company's loans | ||
Total Loans | 3,019,718 | 3,012,475 |
Residential Portfolio Segment | Consumer mortgage | Legacy Loan | ||
Aged analysis of the company's loans | ||
Total Loans | 3,019,718 | 3,012,475 |
Nonaccrual | 23,295 | 22,583 |
Residential Portfolio Segment | Consumer mortgage | Legacy Loan | Financial Asset, Past Due | ||
Aged analysis of the company's loans | ||
Total Loans | 38,571 | 39,850 |
Residential Portfolio Segment | Consumer mortgage | Legacy Loan | Past Due 30 - 89 Days | ||
Aged analysis of the company's loans | ||
Total Loans | 11,767 | 13,757 |
Residential Portfolio Segment | Consumer mortgage | Legacy Loan | 90+ Days Past Due and Still Accruing | ||
Aged analysis of the company's loans | ||
Total Loans | 3,509 | 3,510 |
Residential Portfolio Segment | Consumer mortgage | Legacy Loan | Financial Asset, Not Past Due | ||
Aged analysis of the company's loans | ||
Total Loans | 2,981,147 | 2,972,625 |
Residential Portfolio Segment | Home equity | ||
Aged analysis of the company's loans | ||
Total Loans | 432,027 | 433,996 |
Residential Portfolio Segment | Home equity | Legacy Loan | ||
Aged analysis of the company's loans | ||
Total Loans | 432,027 | 433,996 |
Nonaccrual | 2,032 | 1,945 |
Residential Portfolio Segment | Home equity | Legacy Loan | Financial Asset, Past Due | ||
Aged analysis of the company's loans | ||
Total Loans | 4,662 | 5,839 |
Residential Portfolio Segment | Home equity | Legacy Loan | Past Due 30 - 89 Days | ||
Aged analysis of the company's loans | ||
Total Loans | 2,344 | 3,595 |
Residential Portfolio Segment | Home equity | Legacy Loan | 90+ Days Past Due and Still Accruing | ||
Aged analysis of the company's loans | ||
Total Loans | 286 | 299 |
Residential Portfolio Segment | Home equity | Legacy Loan | Financial Asset, Not Past Due | ||
Aged analysis of the company's loans | ||
Total Loans | 427,365 | 428,157 |
Consumer Portfolio Segment | Consumer indirect | ||
Aged analysis of the company's loans | ||
Total Loans | 1,605,659 | 1,539,653 |
Consumer Portfolio Segment | Consumer indirect | Legacy Loan | ||
Aged analysis of the company's loans | ||
Total Loans | 1,605,659 | 1,539,653 |
Nonaccrual | 0 | 0 |
Consumer Portfolio Segment | Consumer indirect | Legacy Loan | Financial Asset, Past Due | ||
Aged analysis of the company's loans | ||
Total Loans | 11,303 | 16,945 |
Consumer Portfolio Segment | Consumer indirect | Legacy Loan | Past Due 30 - 89 Days | ||
Aged analysis of the company's loans | ||
Total Loans | 11,152 | 16,767 |
Consumer Portfolio Segment | Consumer indirect | Legacy Loan | 90+ Days Past Due and Still Accruing | ||
Aged analysis of the company's loans | ||
Total Loans | 151 | 178 |
Consumer Portfolio Segment | Consumer indirect | Legacy Loan | Financial Asset, Not Past Due | ||
Aged analysis of the company's loans | ||
Total Loans | 1,594,356 | 1,522,708 |
Consumer Portfolio Segment | Consumer direct | ||
Aged analysis of the company's loans | ||
Total Loans | 176,989 | 177,605 |
Consumer Portfolio Segment | Consumer direct | Legacy Loan | ||
Aged analysis of the company's loans | ||
Total Loans | 176,989 | 177,605 |
Nonaccrual | 26 | 28 |
Consumer Portfolio Segment | Consumer direct | Legacy Loan | Financial Asset, Past Due | ||
Aged analysis of the company's loans | ||
Total Loans | 1,207 | 1,467 |
Consumer Portfolio Segment | Consumer direct | Legacy Loan | Past Due 30 - 89 Days | ||
Aged analysis of the company's loans | ||
Total Loans | 1,100 | 1,307 |
Consumer Portfolio Segment | Consumer direct | Legacy Loan | 90+ Days Past Due and Still Accruing | ||
Aged analysis of the company's loans | ||
Total Loans | 81 | 132 |
Consumer Portfolio Segment | Consumer direct | Legacy Loan | Financial Asset, Not Past Due | ||
Aged analysis of the company's loans | ||
Total Loans | $ 175,782 | $ 176,138 |
LOANS AND ALLOWANCE FOR CREDI_5
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Amount of Business Lending Loans by Credit Quality Categories (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Term Loans Amortized Cost Basis by Origination Year | |||
Total Loans | $ 8,982,335 | $ 8,809,394 | |
Current period gross charge-offs | |||
Total Loans | 3,230 | $ 2,156 | |
Legacy Loan | |||
Term Loans Amortized Cost Basis by Origination Year | |||
Total Loans | 8,982,335 | 8,809,394 | |
Business lending | |||
Term Loans Amortized Cost Basis by Origination Year | |||
Year One | 130,505 | 752,160 | |
Year Two | 735,600 | 379,524 | |
Year Three | 366,460 | 237,510 | |
Year Four | 229,052 | 253,692 | |
Year Five | 244,174 | 195,296 | |
Prior | 843,712 | 688,510 | |
Revolving Loans Amortized Cost Basis | 705,080 | 686,761 | |
Revolving Loans Converted to Term | 493,359 | 452,212 | |
Total Loans | 3,747,942 | 3,645,665 | |
Current period gross charge-offs | |||
Year One | 0 | ||
Year Two | 47 | ||
Year Three | 0 | ||
Year Four | 0 | ||
Year Five | 0 | ||
Prior | 0 | ||
Revolving Loans Amortized Cost Basis | 128 | ||
Revolving Loans Converted to Term | 0 | ||
Total Loans | 175 | ||
Business lending | Pass | |||
Term Loans Amortized Cost Basis by Origination Year | |||
Year One | 129,658 | 747,573 | |
Year Two | 730,008 | 373,913 | |
Year Three | 361,349 | 232,591 | |
Year Four | 221,000 | 246,820 | |
Year Five | 237,879 | 168,468 | |
Prior | 753,972 | 604,745 | |
Revolving Loans Amortized Cost Basis | 667,589 | 646,771 | |
Revolving Loans Converted to Term | 442,133 | 401,531 | |
Total Loans | 3,543,588 | 3,422,412 | |
Business lending | Special mention | |||
Term Loans Amortized Cost Basis by Origination Year | |||
Year One | 623 | 2,787 | |
Year Two | 2,620 | 4,836 | |
Year Three | 4,712 | 3,781 | |
Year Four | 6,926 | 3,676 | |
Year Five | 3,261 | 14,593 | |
Prior | 56,953 | 45,627 | |
Revolving Loans Amortized Cost Basis | 30,721 | 29,403 | |
Revolving Loans Converted to Term | 31,774 | 29,975 | |
Total Loans | 137,590 | 134,678 | |
Business lending | Classified | |||
Term Loans Amortized Cost Basis by Origination Year | |||
Year One | 224 | 1,800 | |
Year Two | 2,972 | 775 | |
Year Three | 399 | 1,138 | |
Year Four | 1,126 | 3,196 | |
Year Five | 3,034 | 12,235 | |
Prior | 32,787 | 38,138 | |
Revolving Loans Amortized Cost Basis | 6,770 | 10,587 | |
Revolving Loans Converted to Term | 19,452 | 20,706 | |
Total Loans | 66,764 | 88,575 | |
Business lending | Doubtful | |||
Term Loans Amortized Cost Basis by Origination Year | |||
Year One | 0 | 0 | |
Year Two | 0 | 0 | |
Year Three | 0 | 0 | |
Year Four | 0 | 0 | |
Year Five | 0 | 0 | |
Prior | 0 | 0 | |
Revolving Loans Amortized Cost Basis | 0 | 0 | |
Revolving Loans Converted to Term | 0 | 0 | |
Total Loans | 0 | 0 | |
Consumer mortgage | |||
Term Loans Amortized Cost Basis by Origination Year | |||
Year One | 69,239 | 539,679 | |
Year Two | 531,692 | 672,042 | |
Year Three | 661,339 | 332,352 | |
Year Four | 325,447 | 255,089 | |
Year Five | 249,065 | 157,548 | |
Prior | 1,064,866 | 944,971 | |
Revolving Loans Amortized Cost Basis | 27,569 | 28,989 | |
Revolving Loans Converted to Term | 90,501 | 81,805 | |
Total Loans | 3,019,718 | 3,012,475 | |
Current period gross charge-offs | |||
Year One | 0 | ||
Year Two | 0 | ||
Year Three | 0 | ||
Year Four | 0 | ||
Year Five | 0 | ||
Prior | 19 | ||
Revolving Loans Amortized Cost Basis | 0 | ||
Revolving Loans Converted to Term | 0 | ||
Total Loans | 19 | ||
Consumer mortgage | FICO AB | |||
Term Loans Amortized Cost Basis by Origination Year | |||
Year One | 51,091 | 379,171 | |
Year Two | 369,680 | 492,806 | |
Year Three | 483,541 | 218,462 | |
Year Four | 214,283 | 174,126 | |
Year Five | 169,477 | 100,560 | |
Prior | 681,572 | 608,605 | |
Revolving Loans Amortized Cost Basis | 369 | 954 | |
Revolving Loans Converted to Term | 66,009 | 59,088 | |
Total Loans | 2,036,022 | 2,033,772 | |
Consumer mortgage | FICO AB | Performing | |||
Term Loans Amortized Cost Basis by Origination Year | |||
Year One | 51,091 | 379,171 | |
Year Two | 369,653 | 492,731 | |
Year Three | 483,070 | 217,889 | |
Year Four | 213,716 | 173,942 | |
Year Five | 169,347 | 100,161 | |
Prior | 676,623 | 604,258 | |
Revolving Loans Amortized Cost Basis | 369 | 954 | |
Revolving Loans Converted to Term | 65,562 | 58,639 | |
Total Loans | 2,029,431 | 2,027,745 | |
Consumer mortgage | FICO AB | Nonperforming | |||
Term Loans Amortized Cost Basis by Origination Year | |||
Year One | 0 | 0 | |
Year Two | 27 | 75 | |
Year Three | 471 | 573 | |
Year Four | 567 | 184 | |
Year Five | 130 | 399 | |
Prior | 4,949 | 4,347 | |
Revolving Loans Amortized Cost Basis | 0 | 0 | |
Revolving Loans Converted to Term | 447 | 449 | |
Total Loans | 6,591 | 6,027 | |
Consumer mortgage | FICO CDE | |||
Term Loans Amortized Cost Basis by Origination Year | |||
Year One | 18,148 | 160,508 | |
Year Two | 162,012 | 179,236 | |
Year Three | 177,798 | 113,890 | |
Year Four | 111,164 | 80,963 | |
Year Five | 79,588 | 56,988 | |
Prior | 383,294 | 336,366 | |
Revolving Loans Amortized Cost Basis | 27,200 | 28,035 | |
Revolving Loans Converted to Term | 24,492 | 22,717 | |
Total Loans | 983,696 | 978,703 | |
Consumer mortgage | FICO CDE | Performing | |||
Term Loans Amortized Cost Basis by Origination Year | |||
Year One | 18,148 | 160,388 | |
Year Two | 161,398 | 178,262 | |
Year Three | 176,898 | 112,640 | |
Year Four | 109,853 | 79,357 | |
Year Five | 78,092 | 54,861 | |
Prior | 368,417 | 323,189 | |
Revolving Loans Amortized Cost Basis | 27,200 | 27,884 | |
Revolving Loans Converted to Term | 23,477 | 22,056 | |
Total Loans | 963,483 | 958,637 | |
Consumer mortgage | FICO CDE | Nonperforming | |||
Term Loans Amortized Cost Basis by Origination Year | |||
Year One | 0 | 120 | |
Year Two | 614 | 974 | |
Year Three | 900 | 1,250 | |
Year Four | 1,311 | 1,606 | |
Year Five | 1,496 | 2,127 | |
Prior | 14,877 | 13,177 | |
Revolving Loans Amortized Cost Basis | 0 | 151 | |
Revolving Loans Converted to Term | 1,015 | 661 | |
Total Loans | 20,213 | 20,066 | |
Consumer indirect | |||
Term Loans Amortized Cost Basis by Origination Year | |||
Year One | 203,427 | 777,531 | |
Year Two | 731,829 | 422,595 | |
Year Three | 381,878 | 129,502 | |
Year Four | 112,803 | 99,660 | |
Year Five | 82,525 | 52,313 | |
Prior | 93,197 | 58,052 | |
Revolving Loans Amortized Cost Basis | 0 | 0 | |
Revolving Loans Converted to Term | 0 | 0 | |
Total Loans | 1,605,659 | 1,539,653 | |
Current period gross charge-offs | |||
Year One | 0 | ||
Year Two | 913 | ||
Year Three | 621 | ||
Year Four | 382 | ||
Year Five | 189 | ||
Prior | 426 | ||
Revolving Loans Amortized Cost Basis | 0 | ||
Revolving Loans Converted to Term | 0 | ||
Total Loans | 2,531 | ||
Consumer indirect | Performing | |||
Term Loans Amortized Cost Basis by Origination Year | |||
Year One | 203,427 | 777,513 | |
Year Two | 731,811 | 422,594 | |
Year Three | 381,847 | 129,449 | |
Year Four | 112,730 | 99,593 | |
Year Five | 82,525 | 52,298 | |
Prior | 93,168 | 58,028 | |
Revolving Loans Amortized Cost Basis | 0 | 0 | |
Revolving Loans Converted to Term | 0 | 0 | |
Total Loans | 1,605,508 | 1,539,475 | |
Consumer indirect | Nonperforming | |||
Term Loans Amortized Cost Basis by Origination Year | |||
Year One | 0 | 18 | |
Year Two | 18 | 1 | |
Year Three | 31 | 53 | |
Year Four | 73 | 67 | |
Year Five | 0 | 15 | |
Prior | 29 | 24 | |
Revolving Loans Amortized Cost Basis | 0 | 0 | |
Revolving Loans Converted to Term | 0 | 0 | |
Total Loans | 151 | 178 | |
Consumer direct | |||
Term Loans Amortized Cost Basis by Origination Year | |||
Year One | 22,565 | 84,117 | |
Year Two | 73,660 | 46,432 | |
Year Three | 40,886 | 17,067 | |
Year Four | 14,585 | 12,730 | |
Year Five | 10,188 | 5,602 | |
Prior | 8,691 | 5,070 | |
Revolving Loans Amortized Cost Basis | 6,414 | 6,585 | |
Revolving Loans Converted to Term | 0 | 2 | |
Total Loans | 176,989 | 177,605 | |
Current period gross charge-offs | |||
Year One | 0 | ||
Year Two | 172 | ||
Year Three | 151 | ||
Year Four | 15 | ||
Year Five | 21 | ||
Prior | 95 | ||
Revolving Loans Amortized Cost Basis | 51 | ||
Revolving Loans Converted to Term | 0 | ||
Total Loans | 505 | ||
Consumer direct | Performing | |||
Term Loans Amortized Cost Basis by Origination Year | |||
Year One | 22,565 | 84,111 | |
Year Two | 73,630 | 46,381 | |
Year Three | 40,886 | 17,066 | |
Year Four | 14,585 | 12,729 | |
Year Five | 10,188 | 5,573 | |
Prior | 8,622 | 5,020 | |
Revolving Loans Amortized Cost Basis | 6,406 | 6,563 | |
Revolving Loans Converted to Term | 0 | 2 | |
Total Loans | 176,882 | 177,445 | |
Consumer direct | Nonperforming | |||
Term Loans Amortized Cost Basis by Origination Year | |||
Year One | 0 | 6 | |
Year Two | 30 | 51 | |
Year Three | 0 | 1 | |
Year Four | 0 | 1 | |
Year Five | 0 | 29 | |
Prior | 69 | 50 | |
Revolving Loans Amortized Cost Basis | 8 | 22 | |
Revolving Loans Converted to Term | 0 | 0 | |
Total Loans | 107 | 160 | |
Home equity | |||
Term Loans Amortized Cost Basis by Origination Year | |||
Year One | 11,531 | 69,575 | |
Year Two | 68,635 | 72,280 | |
Year Three | 70,173 | 38,078 | |
Year Four | 36,635 | 31,675 | |
Year Five | 30,285 | 16,173 | |
Prior | 54,463 | 41,703 | |
Revolving Loans Amortized Cost Basis | 129,950 | 133,266 | |
Revolving Loans Converted to Term | 30,355 | 31,246 | |
Total Loans | 432,027 | 433,996 | |
Current period gross charge-offs | |||
Year One | 0 | ||
Year Two | 0 | ||
Year Three | 0 | ||
Year Four | 0 | ||
Year Five | 0 | ||
Prior | 0 | ||
Revolving Loans Amortized Cost Basis | 0 | ||
Revolving Loans Converted to Term | 0 | ||
Total Loans | 0 | ||
Home equity | Performing | |||
Term Loans Amortized Cost Basis by Origination Year | |||
Year One | 11,531 | 69,575 | |
Year Two | 68,635 | 72,270 | |
Year Three | 70,163 | 37,964 | |
Year Four | 36,328 | 31,506 | |
Year Five | 30,112 | 16,068 | |
Prior | 53,840 | 41,097 | |
Revolving Loans Amortized Cost Basis | 129,361 | 132,703 | |
Revolving Loans Converted to Term | 29,739 | 30,569 | |
Total Loans | 429,709 | 431,752 | |
Home equity | Nonperforming | |||
Term Loans Amortized Cost Basis by Origination Year | |||
Year One | 0 | 0 | |
Year Two | 0 | 10 | |
Year Three | 10 | 114 | |
Year Four | 307 | 169 | |
Year Five | 173 | 105 | |
Prior | 623 | 606 | |
Revolving Loans Amortized Cost Basis | 589 | 563 | |
Revolving Loans Converted to Term | 616 | 677 | |
Total Loans | $ 2,318 | $ 2,244 |
LOANS AND ALLOWANCE FOR CREDI_6
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Summary of Impaired Loans, Excluding Purchased Impaired (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Impaired loans | ||
Loans with allowance allocation | $ 0 | $ 0 |
Unpaid principal balance | 3,093 | 3,163 |
Carrying balance | 3,093 | 3,163 |
Contractual balance | 4,201 | 4,201 |
Specifically allocated allowance | 0 | 0 |
Average carrying balance of individually assessed loans | 3,100 | 12,300 |
Interest income on individually assessed loans | 0 | $ 0 |
Minimum | ||
LOANS AND ALLOWANCE FOR CREDIT LOSSES | ||
Threshold balance of loan individually evaluated for impairment | $ 500 |
LOANS AND ALLOWANCE FOR CREDI_7
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Allowance for Credit Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Allowance for credit losses - loans. | ||
Beginning balance | $ 61,059 | $ 49,869 |
Charge-offs | (3,230) | (2,156) |
Recoveries | 1,719 | 1,617 |
Provision | 3,622 | 817 |
Ending balance | 63,170 | 50,147 |
Accrued interest receivable on loans | $ 23,800 | |
Financing Receivable, Accrued Interest, after Allowance for Credit Loss, Statement of Financial Position [Extensible Enumeration] | Interest Receivable | |
Sale of secondary market eligible residential consumer mortgage loans | $ 500 | |
Liabilities for off-balance-sheet credit exposures | ||
Beginning balance | 1,123 | 803 |
Charge-offs | 0 | 0 |
Recoveries | 0 | 0 |
Provision | (122) | 89 |
Ending balance | 1,001 | 892 |
Total allowance for credit losses | ||
Beginning balance | 62,182 | 50,672 |
Charge-offs | (3,230) | (2,156) |
Recoveries | 1,719 | 1,617 |
Provision | 3,500 | 906 |
Ending balance | 64,171 | 51,039 |
Elmira Savings Bank | ||
Allowance for credit losses - loans. | ||
Ending balance | 63,200 | 50,100 |
Business lending | ||
Allowance for credit losses - loans. | ||
Charge-offs | (175) | |
Consumer mortgage | ||
Allowance for credit losses - loans. | ||
Charge-offs | (19) | |
Consumer indirect | ||
Allowance for credit losses - loans. | ||
Charge-offs | (2,531) | |
Consumer direct | ||
Allowance for credit losses - loans. | ||
Charge-offs | (505) | |
Home equity | ||
Allowance for credit losses - loans. | ||
Charge-offs | 0 | |
Commercial Portfolio Segment | Business lending | ||
Allowance for credit losses - loans. | ||
Beginning balance | 23,297 | 22,995 |
Charge-offs | (175) | (116) |
Recoveries | 172 | 339 |
Provision | 1,933 | (1,454) |
Ending balance | 25,227 | 21,764 |
Residential Portfolio Segment | Consumer mortgage | ||
Allowance for credit losses - loans. | ||
Beginning balance | 14,343 | 10,017 |
Charge-offs | (19) | (40) |
Recoveries | 7 | 9 |
Provision | (53) | 338 |
Ending balance | 14,278 | 10,324 |
Residential Portfolio Segment | Home equity | ||
Allowance for credit losses - loans. | ||
Beginning balance | 1,594 | 1,814 |
Charge-offs | 0 | (11) |
Recoveries | 6 | 93 |
Provision | (12) | (428) |
Ending balance | 1,588 | 1,468 |
Consumer Portfolio Segment | Consumer indirect | ||
Allowance for credit losses - loans. | ||
Beginning balance | 17,852 | 11,737 |
Charge-offs | (2,531) | (1,688) |
Recoveries | 1,347 | 1,000 |
Provision | 1,379 | 1,817 |
Ending balance | 18,047 | 12,866 |
Consumer Portfolio Segment | Consumer direct | ||
Allowance for credit losses - loans. | ||
Beginning balance | 2,973 | 2,306 |
Charge-offs | (505) | (301) |
Recoveries | 187 | 176 |
Provision | 375 | 544 |
Ending balance | 3,030 | 2,725 |
Unallocated | ||
Allowance for credit losses - loans. | ||
Beginning balance | 1,000 | 1,000 |
Charge-offs | 0 | 0 |
Recoveries | 0 | 0 |
Provision | 0 | 0 |
Ending balance | $ 1,000 | $ 1,000 |
GOODWILL AND IDENTIFIABLE INT_3
GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Identifiable Intangible Assets | ||
Gross Carrying Amount | $ 197,835 | $ 197,186 |
Accumulated Amortization | (139,857) | (136,190) |
Total | 57,978 | 60,996 |
Estimated aggregate amortization expense for each of five succeeding fiscal years | ||
Apr - Dec 2023 | 10,153 | |
2024 | 11,730 | |
2025 | 9,994 | |
2026 | 8,838 | |
2027 | 3,408 | |
Thereafter | 13,855 | |
Total | 57,978 | 60,996 |
Components of goodwill | ||
Goodwill, net, beginning of period | 841,841 | |
Goodwill, net, activity | 1,095 | |
Goodwill, net, end of period | 842,936 | |
Core Deposit Intangibles | ||
Identifiable Intangible Assets | ||
Gross Carrying Amount | 77,373 | 77,373 |
Accumulated Amortization | (66,265) | (65,069) |
Total | 11,108 | 12,304 |
Estimated aggregate amortization expense for each of five succeeding fiscal years | ||
Total | 11,108 | 12,304 |
Other Intangibles | ||
Identifiable Intangible Assets | ||
Gross Carrying Amount | 120,462 | 119,813 |
Accumulated Amortization | (73,592) | (71,121) |
Total | 46,870 | 48,692 |
Estimated aggregate amortization expense for each of five succeeding fiscal years | ||
Total | $ 46,870 | $ 48,692 |
BENEFIT PLANS (Details)
BENEFIT PLANS (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Pension Benefits | ||
Pension Plans | ||
Contribution made to defined benefit pension plan by employer | $ 100 | |
Net periodic benefit cost | ||
Service cost | $ 1,108 | 1,240 |
Interest cost | 1,890 | 1,334 |
Expected return on plan assets | (4,020) | (4,756) |
Amortization of unrecognized net (gain) loss | (555) | 211 |
Amortization of prior service cost | 205 | 154 |
Net periodic benefit | (1,372) | (1,817) |
Post-retirement Benefits | ||
Net periodic benefit cost | ||
Service cost | 0 | 0 |
Interest cost | 23 | 11 |
Expected return on plan assets | 0 | 0 |
Amortization of unrecognized net (gain) loss | 6 | 9 |
Amortization of prior service cost | (45) | (45) |
Net periodic benefit | $ (16) | $ (25) |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
EARNINGS PER SHARE | ||||
Weighted-average anti-dilutive stock options outstanding (in shares) | 200,000 | |||
Basic earnings per share | ||||
Net income | $ 5,798 | $ 47,055 | ||
Income attributable to unvested stock-based compensation awards | (17) | (119) | ||
Income available to common shareholders | $ 5,781 | $ 46,936 | ||
Weighted-average common shares outstanding - basic (in shares) | 53,843,000 | 53,993,000 | ||
Basic earnings per share | $ 0.11 | $ 0.87 | ||
Diluted earnings per share | ||||
Net income | $ 5,798 | $ 47,055 | ||
Income attributable to unvested stock-based compensation awards | (17) | (119) | ||
Income available to common shareholders | $ 5,781 | $ 46,936 | ||
Weighted-average common shares outstanding - basic (in shares) | 53,843,000 | 53,993,000 | ||
Assumed exercise of stock options (in shares) | 207,000 | 386,000 | ||
Weighted-average common shares outstanding - diluted (in shares) | 54,050,000 | 54,379,000 | ||
Diluted earnings per share | $ 0.11 | $ 0.86 | ||
Stock Repurchase Program | ||||
Number of common shares authorized to be repurchased (in shares) | 2,697,000 | 2,697,000 | ||
Number of common shares repurchased (in shares) | 200,000,000 | 50,000,000 | 250,000,000 |
COMMITMENTS, CONTINGENT LIABI_3
COMMITMENTS, CONTINGENT LIABILITIES AND RESTRICTIONS (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Commitments and contingencies | ||
Contract amount of commitments and contingencies | $ 1,516,489 | $ 1,544,138 |
Minimum | ||
Commitments and contingencies | ||
Range of reasonably possible losses for such matters in the aggregate, beyond the existing recorded liability | 0 | |
Maximum | ||
Commitments and contingencies | ||
Range of reasonably possible losses for such matters in the aggregate, beyond the existing recorded liability | 1,000 | |
Commitments to extend credit | ||
Commitments and contingencies | ||
Contract amount of commitments and contingencies | 1,459,684 | 1,486,791 |
Standby letters of credit | ||
Commitments and contingencies | ||
Contract amount of commitments and contingencies | $ 56,805 | $ 57,347 |
FAIR VALUE - Financial Assets a
FAIR VALUE - Financial Assets and Liabilities Accounted for at Fair Value On a Recurring Basis (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Available-for-sale investment securities | ||
Fair value | $ 3,485,993 | $ 4,151,851 |
Equity securities | 419 | 419 |
Mortgage loans held for sale | 0 | |
Transfers between Level 1 and Level 2 | 0 | |
Transfers between Level 2 and Level 1 | 0 | |
Transfers in of level 3 | 0 | |
Transfers Out of level 3 | 0 | |
Unpaid principal value of mortgage loans held for sale | 300 | |
U.S. Treasury and agency securities | ||
Available-for-sale investment securities | ||
Fair value | 2,576,991 | 3,243,537 |
Obligations of state and political subdivisions | ||
Available-for-sale investment securities | ||
Fair value | 509,869 | 504,297 |
Government agency mortgage-backed securities | ||
Available-for-sale investment securities | ||
Fair value | 380,458 | 384,633 |
Corporate debt securities | ||
Available-for-sale investment securities | ||
Fair value | 7,190 | 7,114 |
Government agency collateralized mortgage obligations | ||
Available-for-sale investment securities | ||
Fair value | 11,485 | 12,270 |
Level 3 | ||
Available-for-sale investment securities | ||
Derivative asset | 29 | 5 |
Recurring | ||
Available-for-sale investment securities | ||
Fair value | 3,485,993 | 4,151,851 |
Equity securities | 419 | 419 |
Mortgage loans held for sale | 275 | |
Total | 3,486,722 | 4,152,280 |
Recurring | Commitments to originate real estate loans for sale | ||
Available-for-sale investment securities | ||
Derivative asset | 29 | 5 |
Recurring | Forward sales commitments | ||
Available-for-sale investment securities | ||
Derivative asset | 6 | 5 |
Recurring | Interest rate swap agreements | ||
Available-for-sale investment securities | ||
Derivative asset | 1 | |
Derivative liability | (1) | |
Recurring | U.S. Treasury and agency securities | ||
Available-for-sale investment securities | ||
Fair value | 2,576,991 | 3,243,537 |
Recurring | Obligations of state and political subdivisions | ||
Available-for-sale investment securities | ||
Fair value | 509,869 | 504,297 |
Recurring | Government agency mortgage-backed securities | ||
Available-for-sale investment securities | ||
Fair value | 380,458 | 384,633 |
Recurring | Corporate debt securities | ||
Available-for-sale investment securities | ||
Fair value | 7,190 | 7,114 |
Recurring | Government agency collateralized mortgage obligations | ||
Available-for-sale investment securities | ||
Fair value | 11,485 | 12,270 |
Recurring | Level 1 | ||
Available-for-sale investment securities | ||
Fair value | 2,511,088 | 3,178,189 |
Equity securities | 419 | 419 |
Mortgage loans held for sale | 0 | |
Total | 2,511,507 | 3,178,608 |
Recurring | Level 1 | Commitments to originate real estate loans for sale | ||
Available-for-sale investment securities | ||
Derivative asset | 0 | 0 |
Recurring | Level 1 | Forward sales commitments | ||
Available-for-sale investment securities | ||
Derivative asset | 0 | 0 |
Recurring | Level 1 | Interest rate swap agreements | ||
Available-for-sale investment securities | ||
Derivative asset | 0 | |
Derivative liability | 0 | |
Recurring | Level 1 | U.S. Treasury and agency securities | ||
Available-for-sale investment securities | ||
Fair value | 2,511,088 | 3,178,189 |
Recurring | Level 1 | Obligations of state and political subdivisions | ||
Available-for-sale investment securities | ||
Fair value | 0 | 0 |
Recurring | Level 1 | Government agency mortgage-backed securities | ||
Available-for-sale investment securities | ||
Fair value | 0 | 0 |
Recurring | Level 1 | Corporate debt securities | ||
Available-for-sale investment securities | ||
Fair value | 0 | 0 |
Recurring | Level 1 | Government agency collateralized mortgage obligations | ||
Available-for-sale investment securities | ||
Fair value | 0 | 0 |
Recurring | Level 2 | ||
Available-for-sale investment securities | ||
Fair value | 974,905 | 973,662 |
Equity securities | 0 | 0 |
Mortgage loans held for sale | 275 | |
Total | 975,186 | 973,667 |
Recurring | Level 2 | Commitments to originate real estate loans for sale | ||
Available-for-sale investment securities | ||
Derivative asset | 0 | 0 |
Recurring | Level 2 | Forward sales commitments | ||
Available-for-sale investment securities | ||
Derivative asset | 6 | 5 |
Recurring | Level 2 | Interest rate swap agreements | ||
Available-for-sale investment securities | ||
Derivative asset | 1 | |
Derivative liability | (1) | |
Recurring | Level 2 | U.S. Treasury and agency securities | ||
Available-for-sale investment securities | ||
Fair value | 65,903 | 65,348 |
Recurring | Level 2 | Obligations of state and political subdivisions | ||
Available-for-sale investment securities | ||
Fair value | 509,869 | 504,297 |
Recurring | Level 2 | Government agency mortgage-backed securities | ||
Available-for-sale investment securities | ||
Fair value | 380,458 | 384,633 |
Recurring | Level 2 | Corporate debt securities | ||
Available-for-sale investment securities | ||
Fair value | 7,190 | 7,114 |
Recurring | Level 2 | Government agency collateralized mortgage obligations | ||
Available-for-sale investment securities | ||
Fair value | 11,485 | 12,270 |
Recurring | Level 3 | ||
Available-for-sale investment securities | ||
Fair value | 0 | 0 |
Equity securities | 0 | 0 |
Mortgage loans held for sale | 0 | |
Total | 29 | 5 |
Recurring | Level 3 | Commitments to originate real estate loans for sale | ||
Available-for-sale investment securities | ||
Derivative asset | 29 | 5 |
Recurring | Level 3 | Forward sales commitments | ||
Available-for-sale investment securities | ||
Derivative asset | 0 | 0 |
Recurring | Level 3 | Interest rate swap agreements | ||
Available-for-sale investment securities | ||
Derivative asset | 0 | |
Derivative liability | 0 | |
Recurring | Level 3 | U.S. Treasury and agency securities | ||
Available-for-sale investment securities | ||
Fair value | 0 | 0 |
Recurring | Level 3 | Obligations of state and political subdivisions | ||
Available-for-sale investment securities | ||
Fair value | 0 | 0 |
Recurring | Level 3 | Government agency mortgage-backed securities | ||
Available-for-sale investment securities | ||
Fair value | 0 | 0 |
Recurring | Level 3 | Corporate debt securities | ||
Available-for-sale investment securities | ||
Fair value | 0 | 0 |
Recurring | Level 3 | Government agency collateralized mortgage obligations | ||
Available-for-sale investment securities | ||
Fair value | $ 0 | $ 0 |
FAIR VALUE - Assets and Liabili
FAIR VALUE - Assets and Liabilities Measured on Nonrecurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Assets and Liabilities Measured on Nonrecurring Basis | ||
Valuation allowance | $ 0 | $ 0 |
Mortgage servicing rights | ||
Assets and Liabilities Measured on Nonrecurring Basis | ||
Valuation allowance | 700 | 700 |
Level 3 | ||
Assets and Liabilities Measured on Nonrecurring Basis | ||
Other real estate owned | 508 | 503 |
Mortgage servicing rights | 983 | 1,169 |
Contingent consideration | (2,800) | (2,800) |
Non-recurring | ||
Assets and Liabilities Measured on Nonrecurring Basis | ||
Other real estate owned | 508 | 503 |
Mortgage servicing rights | 983 | 1,169 |
Contingent consideration | (2,800) | (2,800) |
Total | (1,309) | (1,128) |
Non-recurring | Level 1 | ||
Assets and Liabilities Measured on Nonrecurring Basis | ||
Other real estate owned | 0 | 0 |
Mortgage servicing rights | 0 | 0 |
Contingent consideration | 0 | 0 |
Total | 0 | 0 |
Non-recurring | Level 2 | ||
Assets and Liabilities Measured on Nonrecurring Basis | ||
Other real estate owned | 0 | 0 |
Mortgage servicing rights | 0 | 0 |
Contingent consideration | 0 | 0 |
Total | 0 | 0 |
Non-recurring | Level 3 | ||
Assets and Liabilities Measured on Nonrecurring Basis | ||
Other real estate owned | 508 | 503 |
Mortgage servicing rights | 983 | 1,169 |
Contingent consideration | (2,800) | (2,800) |
Total | $ (1,309) | $ (1,128) |
FAIR VALUE - Significant Unobse
FAIR VALUE - Significant Unobservable Inputs (Details) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 USD ($) $ / loan | Dec. 31, 2022 USD ($) $ / loan | |
Fair value of collateral | Estimated cost of disposal/market adjustment | ||
Significant Unobservable Inputs used in determination of Fair Value of Assets Classified as Level 3 | ||
Other real estate owned, Valuation Technique [Extensible List] | Fair value of collateral | Fair value of collateral |
Other real estate owned, Measurement Input [Extensible List] | us-gaap:MeasurementInputCostToSellMember | us-gaap:MeasurementInputCostToSellMember |
Discounted cash flow | Embedded servicing value | ||
Significant Unobservable Inputs used in determination of Fair Value of Assets Classified as Level 3 | ||
Commitments to originate real estate loans for sale, Valuation Technique [Extensible List] | Discounted cash flow | Discounted cash flow |
Commitments to originate real estate loans for sale, Measurement Input [Extensible List] | Embedded servicing value | Embedded servicing value |
Discounted cash flow | Weighted average constant prepayment rate | ||
Significant Unobservable Inputs used in determination of Fair Value of Assets Classified as Level 3 | ||
Mortgage servicing rights, Valuation Technique [Extensible List] | Discounted cash flow | Discounted cash flow |
Mortgage servicing rights, Measurement Input [Extensible List] | Weighted average constant prepayment rate | Weighted average constant prepayment rate |
Discounted cash flow | Weighted average discount rate | ||
Significant Unobservable Inputs used in determination of Fair Value of Assets Classified as Level 3 | ||
Mortgage servicing rights, Measurement Input [Extensible List] | Weighted average discount rate | Weighted average discount rate |
Contingent consideration, Valuation Technique [Extensible List] | Discounted cash flow | Discounted cash flow |
Contingent consideration, Measurement Input [Extensible List] | Weighted average discount rate | Weighted average discount rate |
Discounted cash flow | Adequate compensation | ||
Significant Unobservable Inputs used in determination of Fair Value of Assets Classified as Level 3 | ||
Mortgage servicing rights, Measurement Input [Extensible List] | Adequate compensation | Adequate compensation |
Discounted cash flow | Probability adjusted level of retained revenue | ||
Significant Unobservable Inputs used in determination of Fair Value of Assets Classified as Level 3 | ||
Contingent consideration, Measurement Input [Extensible List] | Probability adjusted level of retained revenue | Probability adjusted level of retained revenue |
Minimum | Fair value of collateral | Estimated cost of disposal/market adjustment | ||
Significant Unobservable Inputs used in determination of Fair Value of Assets Classified as Level 3 | ||
Other real estate owned, measurement input | 0.090 | |
Maximum | Fair value of collateral | Estimated cost of disposal/market adjustment | ||
Significant Unobservable Inputs used in determination of Fair Value of Assets Classified as Level 3 | ||
Other real estate owned, measurement input | 0.728 | |
Level 3 | ||
Significant Unobservable Inputs used in determination of Fair Value of Assets Classified as Level 3 | ||
Other real estate owned | $ 508 | $ 503 |
Commitments to originate real estate loans for sale | 29 | 5 |
Mortgage servicing rights | 983 | 1,169 |
Contingent consideration | $ (2,800) | $ (2,800) |
Level 3 | Discounted cash flow | Embedded servicing value | ||
Significant Unobservable Inputs used in determination of Fair Value of Assets Classified as Level 3 | ||
Commitments to originate real estate loans for sale, measurement input | 0.010 | 0.010 |
Level 3 | Discounted cash flow | Adequate compensation | ||
Significant Unobservable Inputs used in determination of Fair Value of Assets Classified as Level 3 | ||
Mortgage servicing rights, measurement input | $ / loan | 7 | 7 |
Level 3 | Minimum | Fair value of collateral | Estimated cost of disposal/market adjustment | ||
Significant Unobservable Inputs used in determination of Fair Value of Assets Classified as Level 3 | ||
Other real estate owned, measurement input | 0.090 | 0.090 |
Level 3 | Minimum | Discounted cash flow | Weighted average constant prepayment rate | ||
Significant Unobservable Inputs used in determination of Fair Value of Assets Classified as Level 3 | ||
Mortgage servicing rights, measurement input | 0.033 | 0.029 |
Level 3 | Minimum | Discounted cash flow | Weighted average discount rate | ||
Significant Unobservable Inputs used in determination of Fair Value of Assets Classified as Level 3 | ||
Mortgage servicing rights, measurement input | 0.042 | 0.046 |
Contingent consideration, measurement input | 0.059 | 0.059 |
Level 3 | Minimum | Discounted cash flow | Probability adjusted level of retained revenue | ||
Significant Unobservable Inputs used in determination of Fair Value of Assets Classified as Level 3 | ||
Contingent consideration, measurement input 2 | $ 3,100 | $ 3,100 |
Level 3 | Maximum | Fair value of collateral | Estimated cost of disposal/market adjustment | ||
Significant Unobservable Inputs used in determination of Fair Value of Assets Classified as Level 3 | ||
Other real estate owned, measurement input | 0.728 | 0.728 |
Level 3 | Maximum | Discounted cash flow | Weighted average constant prepayment rate | ||
Significant Unobservable Inputs used in determination of Fair Value of Assets Classified as Level 3 | ||
Mortgage servicing rights, measurement input | 0.039 | 0.033 |
Level 3 | Maximum | Discounted cash flow | Weighted average discount rate | ||
Significant Unobservable Inputs used in determination of Fair Value of Assets Classified as Level 3 | ||
Mortgage servicing rights, measurement input | 0.046 | 0.049 |
Contingent consideration, measurement input | 0.062 | 0.062 |
Level 3 | Maximum | Discounted cash flow | Probability adjusted level of retained revenue | ||
Significant Unobservable Inputs used in determination of Fair Value of Assets Classified as Level 3 | ||
Contingent consideration, measurement input 2 | $ 5,100 | $ 5,100 |
Level 3 | Weighted Average | Fair value of collateral | Estimated cost of disposal/market adjustment | ||
Significant Unobservable Inputs used in determination of Fair Value of Assets Classified as Level 3 | ||
Other real estate owned, measurement input | 0.314 | 0.357 |
Level 3 | Weighted Average | Discounted cash flow | Weighted average constant prepayment rate | ||
Significant Unobservable Inputs used in determination of Fair Value of Assets Classified as Level 3 | ||
Mortgage servicing rights, measurement input | 0.033 | 0.029 |
Level 3 | Weighted Average | Discounted cash flow | Weighted average discount rate | ||
Significant Unobservable Inputs used in determination of Fair Value of Assets Classified as Level 3 | ||
Mortgage servicing rights, measurement input | 0.046 | 0.049 |
Contingent consideration, measurement input | 0.061 | 0.061 |
FAIR VALUE - Carrying Amounts a
FAIR VALUE - Carrying Amounts and Estimated Fair Values of Other Financial Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Financial assets: | ||
Fair Value | $ 1,083,330 | $ 1,034,795 |
Carrying Value | ||
Financial assets: | ||
Net loans | 8,919,165 | 8,748,335 |
Fair Value | 1,090,235 | 1,079,695 |
Financial liabilities: | ||
Deposits | 13,110,672 | 13,012,308 |
Overnight borrowings | 58,400 | 768,400 |
Securities sold under agreement to repurchase, short-term | 304,607 | 346,652 |
Other Federal Home Loan Bank borrowings | 17,284 | 19,474 |
Subordinated notes payable | 0 | 3,249 |
Fair Value | ||
Financial assets: | ||
Net loans | 8,765,403 | 8,696,185 |
Fair Value | 1,083,330 | 1,034,795 |
Financial liabilities: | ||
Deposits | 13,080,256 | 12,981,487 |
Overnight borrowings | 58,400 | 768,400 |
Securities sold under agreement to repurchase, short-term | 304,607 | 346,652 |
Other Federal Home Loan Bank borrowings | 17,131 | 19,377 |
Subordinated notes payable | $ 0 | $ 3,249 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Information about reportable segments | |||
Net interest income | $ 111,030 | $ 94,872 | |
Provision for credit losses | 3,500 | 906 | |
Noninterest revenues | 13,495 | 65,673 | |
Loss on sales of investment securities | (52,329) | 0 | |
Gain on debt extinguishment | 242 | 0 | |
Other noninterest revenues | 65,582 | ||
Amortization of intangible assets | 3,667 | 3,732 | |
Acquisition expenses | 57 | 299 | |
Other operating expenses | 110,328 | 95,776 | |
Income before income taxes | 6,973 | 59,832 | |
Assets | 15,255,953 | 15,625,883 | $ 15,835,651 |
Goodwill | 842,936 | 799,080 | $ 841,841 |
Core deposit intangibles & Other intangibles | 57,978 | 63,958 | |
Eliminations | |||
Information about reportable segments | |||
Net interest income | 0 | 0 | |
Provision for credit losses | 0 | 0 | |
Noninterest revenues | (2,063) | ||
Loss on sales of investment securities | 0 | ||
Gain on debt extinguishment | 0 | ||
Other noninterest revenues | (2,229) | ||
Amortization of intangible assets | 0 | 0 | |
Acquisition expenses | 0 | 0 | |
Other operating expenses | (2,229) | (2,063) | |
Income before income taxes | 0 | 0 | |
Assets | (111,770) | (134,446) | |
Goodwill | 0 | 0 | |
Core deposit intangibles & Other intangibles | 0 | 0 | |
Banking | Operating Segments | |||
Information about reportable segments | |||
Net interest income | 110,682 | 94,798 | |
Provision for credit losses | 3,500 | 906 | |
Noninterest revenues | 18,008 | ||
Loss on sales of investment securities | (52,329) | ||
Gain on debt extinguishment | 242 | ||
Other noninterest revenues | 17,362 | ||
Amortization of intangible assets | 1,206 | 1,045 | |
Acquisition expenses | 17 | 298 | |
Other operating expenses | 78,266 | 66,656 | |
Income before income taxes | (7,032) | 43,901 | |
Assets | 15,040,487 | 15,402,218 | |
Goodwill | 733,064 | 689,868 | |
Core deposit intangibles & Other intangibles | 11,629 | 8,041 | |
Employee Benefit Services | Operating Segments | |||
Information about reportable segments | |||
Net interest income | 254 | 68 | |
Provision for credit losses | 0 | 0 | |
Noninterest revenues | 30,188 | ||
Loss on sales of investment securities | 0 | ||
Gain on debt extinguishment | 0 | ||
Other noninterest revenues | 30,221 | ||
Amortization of intangible assets | 1,633 | 1,671 | |
Acquisition expenses | 0 | 1 | |
Other operating expenses | 18,964 | 17,597 | |
Income before income taxes | 9,878 | 10,987 | |
Assets | 229,091 | 260,166 | |
Goodwill | 85,384 | 85,292 | |
Core deposit intangibles & Other intangibles | 31,778 | 38,348 | |
All Other | Operating Segments | |||
Information about reportable segments | |||
Net interest income | 94 | 6 | |
Provision for credit losses | 0 | 0 | |
Noninterest revenues | 19,540 | ||
Loss on sales of investment securities | 0 | ||
Gain on debt extinguishment | 0 | ||
Other noninterest revenues | 20,228 | ||
Amortization of intangible assets | 828 | 1,016 | |
Acquisition expenses | 40 | 0 | |
Other operating expenses | 15,327 | 13,586 | |
Income before income taxes | 4,127 | 4,944 | |
Assets | 98,145 | 97,945 | |
Goodwill | 24,488 | 23,920 | |
Core deposit intangibles & Other intangibles | $ 14,571 | $ 17,569 |