Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Jan. 31, 2023 | Jun. 30, 2022 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Transition Report | false | ||
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 Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
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 | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 3,352,990,466 | ||
Entity Common Stock, Shares Outstanding | 53,773,556 | ||
Entity Central Index Key | 0000723188 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Auditor Name | PricewaterhouseCoopers LLP | ||
Auditor Firm ID | 238 | ||
Auditor Location | New York |
CONSOLIDATED STATEMENTS OF COND
CONSOLIDATED STATEMENTS OF CONDITION - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Assets: | ||
Cash and cash equivalents | $ 209,896 | $ 1,875,064 |
Available-for-sale investment securities includes pledged securities that can be sold or repledged of $466,902 and $485,414, respectively (cost of $4,675,474 and $4,980,102, respectively) | 4,151,851 | 4,934,210 |
Held-to-maturity securities (fair value of $1,034,795 and $0, respectively) | 1,079,695 | 0 |
Equity and other securities (cost of $82,424 and $43,917, respectively) | 83,342 | 44,879 |
Loans, net | 8,809,394 | 7,373,639 |
Allowance for credit losses | (61,059) | (49,869) |
Net loans | 8,748,335 | 7,323,770 |
Goodwill | 841,841 | 799,109 |
Core deposit intangibles, net | 12,304 | 9,087 |
Other intangibles, net | 48,692 | 56,139 |
Goodwill and intangible assets, net | 902,837 | 864,335 |
Premises and equipment, net | 160,778 | 160,651 |
Accrued interest and fees receivable | 52,613 | 35,894 |
Other assets | 446,304 | 313,854 |
Total assets | 15,835,651 | 15,552,657 |
Liabilities: | ||
Noninterest-bearing deposits | 4,140,617 | 3,921,663 |
Interest-bearing deposits | 8,871,691 | 8,989,505 |
Total deposits | 13,012,308 | 12,911,168 |
Overnight borrowings | 768,400 | 0 |
Securities sold under agreement to repurchase, short-term | 346,652 | 324,720 |
Other Federal Home Loan Bank borrowings | 19,474 | 1,888 |
Subordinated notes payable | 3,249 | 3,277 |
Accrued interest and other liabilities | 133,863 | 210,797 |
Total liabilities | 14,283,946 | 13,451,850 |
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; 54,190,201 and 54,092,421 shares issued, respectively | 54,190 | 54,092 |
Additional paid-in capital | 1,050,231 | 1,041,304 |
Retained earnings | 1,152,452 | 1,058,286 |
Accumulated other comprehensive loss | (686,439) | (50,627) |
Treasury stock, at cost (452,952 shares including 135,437 shares held by deferred compensation arrangements at December 31, 2022, and 214,374 shares including 146,860 shares held by deferred compensation arrangements at December 31, 2021) | (26,485) | (10,610) |
Deferred compensation arrangements (135,437 shares at December 31, 2022 and 146,860 shares at December 31, 2021) | 7,756 | 8,362 |
Total shareholders' equity | 1,551,705 | 2,100,807 |
Total liabilities and shareholders' equity | $ 15,835,651 | $ 15,552,657 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF CONDITION (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Assets: | ||
Available-for-sale investment securities, Pledged Amount | $ 466,902 | $ 485,414 |
Available-for-sale investment securities, cost | 4,675,474 | 4,980,102 |
Held-to-maturity securities, fair value | 1,034,795 | 0 |
Equity and other securities, cost | $ 82,424 | $ 43,917 |
Shareholders' equity: | ||
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, shares authorized (in shares) | 500,000 | 500,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized (in shares) | 75,000,000 | 75,000,000 |
Common stock, shares issued (in shares) | 54,190,201 | 54,092,421 |
Treasury stock, shares at cost (in shares) | 452,952 | 214,374 |
Shares held by deferred compensation arrangements (in shares) | 135,437 | 146,860 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Interest income: | |||
Interest and fees on loans | $ 335,075 | $ 308,355 | $ 314,779 |
Interest and dividends on taxable investments | 95,371 | 68,607 | 62,538 |
Interest and dividends on nontaxable investments | 13,283 | 10,458 | 11,961 |
Total interest income | 443,729 | 387,420 | 389,278 |
Interest expense: | |||
Interest on deposits | 15,044 | 11,631 | 16,761 |
Interest on borrowings | 7,902 | 930 | 1,569 |
Interest on subordinated notes payable | 153 | 154 | 670 |
Interest on subordinated debt held by unconsolidated subsidiary trusts | 0 | 293 | 1,875 |
Total interest expense | 23,099 | 13,008 | 20,875 |
Net interest income | 420,630 | 374,412 | 368,403 |
Provision for credit losses | 14,773 | (8,839) | 14,212 |
Net interest income after provision for credit losses | 405,857 | 383,251 | 354,191 |
Noninterest revenues: | |||
Deposit service fees | 66,850 | 59,212 | 57,370 |
Mortgage banking | 390 | 1,772 | 5,301 |
Other banking services | 4,644 | 3,674 | 3,753 |
Employee benefit services | 115,408 | 114,328 | 101,329 |
Insurance services | 39,810 | 33,992 | 32,372 |
Wealth management services | 31,667 | 33,240 | 27,879 |
Unrealized (loss) gain on equity securities | (44) | 17 | (6) |
Gain on debt extinguishment | 0 | 0 | 421 |
Total noninterest revenues | 258,725 | 246,235 | 228,419 |
Noninterest expenses: | |||
Salaries and employee benefits | 257,339 | 241,501 | 228,384 |
Occupancy and equipment | 42,413 | 41,240 | 40,732 |
Data processing and communications | 54,099 | 51,003 | 45,755 |
Amortization of intangible assets | 15,214 | 14,051 | 14,297 |
Legal and professional fees | 14,018 | 11,723 | 11,605 |
Business development and marketing | 13,095 | 9,319 | 9,463 |
Litigation accrual | 0 | (100) | 2,950 |
Acquisition expenses | 5,021 | 701 | 4,933 |
Acquisition-related contingent consideration adjustment | (300) | 200 | 0 |
Other expenses | 23,369 | 18,500 | 18,415 |
Total noninterest expenses | 424,268 | 388,138 | 376,534 |
Income before income taxes | 240,314 | 241,348 | 206,076 |
Income taxes | 52,233 | 51,654 | 41,400 |
Net income | $ 188,081 | $ 189,694 | $ 164,676 |
Basic earnings per share | $ 3.48 | $ 3.51 | $ 3.10 |
Diluted earnings per share | $ 3.46 | $ 3.48 | $ 3.08 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Pension and other post retirement obligations: | |||
Amortization of actuarial (losses) gains included in net periodic pension cost, gross | $ (21,587) | $ 17,443 | $ 8,379 |
Tax effect | 5,243 | (4,192) | (2,012) |
Amortization of actuarial (losses) gains included in net periodic pension cost, net | (16,344) | 13,251 | 6,367 |
Amortization of prior service cost included in net periodic pension cost, gross | 678 | 200 | (471) |
Tax effect | (165) | (48) | 113 |
Amortization of prior service cost included in net periodic pension cost, net | 513 | 152 | (358) |
Other comprehensive (loss) income related to pension and other post retirement obligations, net of taxes | (15,831) | 13,403 | 6,009 |
Unrealized (losses) gains on investment securities: | |||
Net unrealized holding (losses) gains on investment securities, gross | (818,890) | (166,007) | 87,237 |
Tax effect | 198,909 | 39,900 | (20,943) |
Other comprehensive (loss) gain related to unrealized (losses) gains on investment securities, net of taxes | (619,981) | (126,107) | 66,294 |
Other comprehensive (loss) income, net of tax | (635,812) | (112,704) | 72,303 |
Net income | 188,081 | 189,694 | 164,676 |
Comprehensive (loss) income | (447,731) | 76,990 | 236,979 |
Accumulated Other Comprehensive (Loss) Income By Component: | |||
Unrealized (loss) for pension and other postretirement obligations | (41,533) | (20,624) | (38,267) |
Tax effect | 10,232 | 5,154 | 9,394 |
Net unrealized (loss) for pension and other postretirement obligations | (31,301) | (15,470) | (28,873) |
Unrealized (loss) gain on investment securities | (864,783) | (45,893) | 120,114 |
Tax effect | 209,645 | 10,736 | (29,164) |
Net unrealized (loss) gain on investment securities | (655,138) | (35,157) | 90,950 |
Accumulated other comprehensive (loss) income | $ (686,439) | $ (50,627) | $ 62,077 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock Shares Outstanding | Common Stock Amount Issued | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive (Loss)/Income | Treasury Stock | Deferred Compensation Arrangements | Total |
Balance at Dec. 31, 2019 | $ 51,975 | $ 927,337 | $ 882,851 | $ (10,226) | $ (6,823) | $ 10,120 | $ 1,855,234 | |
Balance (in shares) at Dec. 31, 2019 | 51,793,923 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | 164,676 | 164,676 | ||||||
Other comprehensive income, net of tax | 72,303 | 72,303 | ||||||
Cumulative effect of change in accounting principle - ASC 326 | 1,140 | 1,140 | ||||||
Dividends declared: | ||||||||
Common, $1.66 per share | (88,484) | (88,484) | ||||||
Common stock activity under employee stock plans | 417 | 15,375 | 15,792 | |||||
Common stock activity under employee stock plans (in shares) | 416,614 | |||||||
Stock-based compensation | 6,419 | 6,419 | ||||||
Stock issued for acquisition | 1,363 | 75,579 | 76,942 | |||||
Stock issued for acquisition (in shares) | 1,363,259 | |||||||
Distribution of stock under deferred compensation arrangements | 415 | 849 | (1,264) | 0 | ||||
Distribution of stock under deferred compensation arrangements (in shares) | 22,497 | |||||||
Treasury stock purchased | (271) | 271 | 0 | |||||
Treasury stock purchased (in shares) | (4,406) | |||||||
Treasury stock issued to benefit plan | 38 | 47 | 85 | |||||
Treasury stock issued to benefit plan (in shares) | 1,240 | |||||||
Balance at Dec. 31, 2020 | 53,755 | 1,025,163 | 960,183 | 62,077 | (6,198) | 9,127 | 2,104,107 | |
Balance (in shares) at Dec. 31, 2020 | 53,593,127 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | 189,694 | 189,694 | ||||||
Other comprehensive income, net of tax | (112,704) | (112,704) | ||||||
Dividends declared: | ||||||||
Common, $1.66 per share | (91,591) | (91,591) | ||||||
Common stock activity under employee stock plans | 337 | 9,484 | 9,821 | |||||
Common stock activity under employee stock plans (in shares) | 337,822 | |||||||
Stock-based compensation | 6,334 | 6,334 | ||||||
Distribution of stock under deferred compensation arrangements | 323 | 694 | (1,017) | 0 | ||||
Distribution of stock under deferred compensation arrangements (in shares) | 18,089 | |||||||
Treasury stock purchased | (5,106) | 252 | (4,854) | |||||
Treasury stock purchased (in shares) | (70,991) | |||||||
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 | 188,081 | 188,081 | ||||||
Other comprehensive income, net of tax | (635,812) | (635,812) | ||||||
Dividends declared: | ||||||||
Common, $1.66 per share | (93,915) | (93,915) | ||||||
Common stock activity under employee stock plans | 98 | 1,086 | 1,184 | |||||
Common stock activity under employee stock plans (in shares) | 97,779 | |||||||
Stock-based compensation | 7,738 | 7,738 | ||||||
Distribution of stock under deferred compensation arrangements | 103 | 739 | (842) | 0 | ||||
Distribution of stock under deferred compensation arrangements (in shares) | 14,934 | |||||||
Treasury stock purchased | (16,614) | 236 | (16,378) | |||||
Treasury stock purchased (in shares) | (253,511) | |||||||
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 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Dividends declared: | |||
Dividends declared per common share (in dollars per share) | $ 1.74 | $ 1.70 | $ 1.66 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating activities: | |||
Net income | $ 188,081 | $ 189,694 | $ 164,676 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation | 14,411 | 15,592 | 15,963 |
Amortization of intangible assets | 15,214 | 14,051 | 14,297 |
Net accretion on securities, loans and borrowings | (18,738) | (22,501) | (11,353) |
Stock-based compensation | 7,738 | 6,334 | 6,419 |
Provision for credit losses | 14,773 | (8,839) | 14,212 |
Provision (benefit) for deferred income taxes | 1,309 | 7,989 | (2,336) |
Amortization of mortgage servicing rights | 801 | 519 | 379 |
Unrealized loss (gain) on equity securities | 44 | (17) | 6 |
Gain on debt extinguishment | 0 | 0 | (421) |
Income from bank-owned life insurance policies | (2,147) | (2,012) | (1,915) |
Net gain on sale of assets | (655) | (328) | (3,505) |
Change in other assets and liabilities | (6,231) | 2,064 | (16,939) |
Net cash provided by operating activities | 214,600 | 202,546 | 179,483 |
Investing activities: | |||
Proceeds from maturities, calls and paydowns of available-for-sale investment securities | 262,256 | 423,738 | 885,549 |
Proceeds from maturities and redemptions of equity and other securities | 4,683 | 2,946 | 516 |
Purchases of available-for-sale investment securities | (1,355,475) | (1,963,884) | (1,114,914) |
Purchases of equity and other securities | (35,303) | (353) | (3,234) |
Net (increase) decrease in loans | (1,003,741) | 49,929 | (185,131) |
Cash (paid) received for acquisition, net of cash acquired of $84,988, $541, and $55,973, respectively | (668) | (29,329) | 34,360 |
Proceeds from sales of premises and equipment, net | 2,432 | 201 | 389 |
Purchases of premises and equipment, net | (12,922) | (13,377) | (14,784) |
Real estate limited partnership investments | (247) | (646) | (1,471) |
Net cash used in investing activities | (2,138,985) | (1,530,775) | (398,720) |
Financing activities: | |||
Net (decrease) increase in deposits | (421,155) | 1,686,194 | 1,713,733 |
Net increase (decrease) in overnight borrowings | 768,400 | 0 | (8,300) |
Net increase in securities sold under agreement to repurchase, short-term | 21,932 | 40,711 | 42,300 |
Payments on other Federal Home Loan Bank borrowings | (95) | (4,769) | (3,092) |
Payments on subordinated debt held by unconsolidated subsidiary trusts | 0 | (77,320) | (2,062) |
Payments on subordinated notes payable | 0 | 0 | (10,000) |
Proceeds from the issuance of common stock | 1,184 | 9,821 | 15,792 |
Purchases of treasury stock | (16,614) | (5,106) | (271) |
Proceeds from the sale of treasury stock | 0 | 0 | 85 |
Increase in deferred compensation agreements | 236 | 252 | 271 |
Cash dividends paid | (93,387) | (91,051) | (87,131) |
Withholding taxes paid on share-based compensation | (1,284) | (1,244) | (1,313) |
Net cash provided by financing activities | 259,217 | 1,557,488 | 1,660,012 |
Change in cash and cash equivalents | (1,665,168) | 229,259 | 1,440,775 |
Cash and cash equivalents at beginning of year | 1,875,064 | 1,645,805 | 205,030 |
Cash and cash equivalents at end of year | 209,896 | 1,875,064 | 1,645,805 |
Supplemental disclosures of cash flow information: | |||
Cash paid for interest | 23,402 | 13,752 | 21,169 |
Cash paid for income taxes | 57,131 | 41,531 | 39,578 |
Supplemental disclosures of noncash financing and investing activities: | |||
Dividends declared and unpaid | 23,762 | 23,235 | 22,695 |
Transfers from loans to other real estate | 543 | 520 | 1,291 |
Transfers from premises and equipment, net to other assets | 5,795 | 0 | 0 |
Acquisitions: | |||
Common stock issued | 0 | 0 | 76,942 |
Fair value of assets acquired, excluding acquired cash and intangibles | 490,467 | 1,339 | 547,654 |
Fair value of liabilities assumed | $ 543,452 | $ 1,164 | $ 529,177 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Investing activities: | |||
Cash acquired related to acquisition | $ 84,988 | $ 541 | $ 55,973 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE A: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations Community Bank System, Inc. (the “Company”) is a registered financial holding company which wholly-owns two significant consolidated subsidiaries: Community Bank, N.A. (the “Bank” or “CBNA”), and Benefit Plans Administrative Services, Inc. (“BPAS”). As of December 31, 2022, BPAS owns five subsidiaries: Benefit Plans Administrative Services, LLC (“BPA”), a provider of defined contribution plan administration services; Northeast Retirement Services, LLC (“NRS”), a provider of institutional transfer agency, master recordkeeping services, fund administration, trust and retirement plan services; BPAS Actuarial & Pension Services, LLC (“BPAS-APS”), a provider of actuarial and benefit consulting services; BPAS Trust Company of Puerto Rico, a Puerto Rican trust company; and Hand Benefits & Trust Company (“HB&T”), a provider of collective investment fund administration and institutional trust services. BPA owns one subsidiary, Fringe Benefits Design of Minnesota, Inc. (“FBD”), a provider of retirement plan administration and benefit consulting services. NRS owns one subsidiary, Global Trust Company, Inc. (“GTC”), a non-depository trust company which provides fiduciary services for collective investment trusts and other products. HB&T owns one subsidiary, Hand Securities Inc. (“HSI”), an introducing broker-dealer. As of December 31, 2022, the Bank operated 203 full-service branches and 13 drive-thru only locations operating as Community Bank, N.A. throughout 42 counties of Upstate New York, six counties of Northeastern Pennsylvania, 12 counties of Vermont and one county of Western Massachusetts, offering a range of commercial and retail banking services. The Bank owns the following operating subsidiaries: The Carta Group, Inc. (“Carta Group”), CBNA Preferred Funding Corporation (“PFC”), CBNA Treasury Management Corporation (“TMC”), Community Investment Services, Inc. (“CISI”), Nottingham Advisors, Inc. (“Nottingham”), OneGroup NY, Inc. (“OneGroup”), OneGroup Wealth Partners, Inc. (“Wealth Partners”), Oneida Preferred Funding II LLC (“OPFC II”) and E.S.B. Realty Corp. (“ESB Realty”). OneGroup is a full-service insurance agency offering personal and commercial lines of insurance and other risk management products and services. PFC, ESB Realty and OPFC II primarily act as investors in residential and commercial real estate activities. TMC provides cash management, investment, and treasury services to the Bank. CISI, Carta Group and Wealth Partners provide broker-dealer and investment advisory services. Nottingham provides asset management services to individuals, corporations, corporate pension and profit sharing plans, and foundations. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Variable Interest Entities (“VIE”) are legal entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the legal entities to finance its activities without additional subordinated financial support. VIEs may be required to be consolidated by a company if it is determined the company is the primary beneficiary of a VIE. The primary beneficiary of a VIE is the enterprise that has: (1) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, and (2) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits of the VIE that could potentially be significant to the VIE. The Company’s VIEs are described in more detail in Note S to the consolidated financial statements. Critical Accounting Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Critical accounting estimates include the allowance for credit losses, actuarial assumptions associated with the pension, post-retirement and other employee benefit plans, the provision for income taxes, investment valuation, the carrying value of goodwill and other intangible assets, the fair value of contingent consideration liabilities, and acquired loan valuations. Risk and Uncertainties In the normal course of its business, the Company encounters economic and regulatory risks. There are three main components of economic risk: interest rate risk, credit risk and market risk. The Company is subject to interest rate risk to the degree that its interest-bearing liabilities mature or reprice at different speeds, or on a different basis, from its interest-earning assets. The Company’s primary credit risk is the risk of default on the Company’s loan portfolio that results from the borrowers’ inability or unwillingness to make contractually required payments. Market risk reflects potential changes in the value of collateral underlying loans, the fair value of investment securities, and loans held for sale. The Company is subject to regulations of various governmental agencies. These regulations can change significantly from period to period. The Company also undergoes periodic examinations by the regulatory agencies, which may subject it to further changes with respect to asset valuations, amounts of required credit loss allowances, and operating restrictions resulting from the regulators’ judgments based on information available to them at the time of their examinations. Revenue Recognition The Company recognizes revenue in accordance with ASU No. 2014-09 Revenue from Contracts with Customers (Topic 606) Topic 606 does not apply to revenue associated with financial instruments, including revenue from loans and securities. In addition, certain noninterest income streams such as fees associated with mortgage servicing rights, financial guarantees, derivatives, and certain credit card fees are also not in scope. Topic 606 is applicable to the Company’s noninterest revenue streams including its deposit related fees, electronic payment interchange fees, merchant income, trust, asset management and other wealth management revenues, insurance commissions and benefit plan services income. Noninterest revenue streams in-scope of Topic 606 are discussed below. Deposit Service Fees Deposit service fees consist of account activity fees, monthly service fees, overdraft fees, check orders, debit and credit card income, ATM fees, merchant services income and other revenues from processing wire transfers, bill pay service, cashier’s checks and foreign exchange. Debit and credit card income is primarily comprised of interchange fees earned at the time the Company’s debit and credit cards are processed through card payment networks such as Visa. ATM fees are primarily generated when a Company cardholder uses a non-Company ATM or a non-Company cardholder uses a Company ATM. Merchant services income mainly represents fees charged to merchants to process their debit and credit card transactions, in addition to account management fees. The Company’s performance obligation for deposit service fees is generally satisfied, and the related revenue recognized, when the services are rendered or the transaction has been completed. Payment for deposit service fees is typically received at the time it is assessed through a direct charge to customers’ accounts or on a monthly basis. Deposit service fees revenue primarily relates to the Company’s Banking operating segment. Other Banking Services Other banking services consists of other recurring revenue streams such as commissions from sales of credit life insurance, safe deposit box rental fees, mortgage banking income, bank owned life insurance income and other miscellaneous revenue streams. Commissions from the sale of credit life insurance are recognized at the time of sale of the policies. Safe deposit box rental fees are charged to the customer on an annual basis and recognized upon receipt of payment. The Company determined that since rentals and renewals occur fairly consistently over time, revenue is recognized on a basis consistent with the duration of the performance obligation. Mortgage banking income and bank owned life insurance income are not within the scope of Topic 606. Other banking services revenue primarily relates to the Company’s Banking operating segment. Employee Benefit Services Employee benefit services income consists of revenue received from retirement plan services, collective investment fund services, fund administration, transfer agency, consulting and actuarial services. The Company’s performance obligation that relates to plan services are satisfied over time and the resulting fees are recognized monthly or quarterly, based upon the market value of the assets under management and the applicable fee rate or on a time expended basis. Payment is generally received a few days after month end or quarter end. The Company does not earn performance-based incentives. Transactional services such as consulting services, mailings, or other ad hoc services are provided to existing trust and asset management customers. The Company’s performance obligation for these transactional-based services is generally satisfied, and related revenue recognized, at a point in time (i.e., as incurred). Payment is received shortly after services are rendered. Employee benefit services revenue primarily relates to the Company’s Employee Benefit Services operating segment. Insurance Services Insurance services primarily consists of commissions received on insurance product sales and consulting services. The Company acts in the capacity of a broker or agent between the Company’s customer and the insurance carrier. The Company’s performance obligation related to insurance sales for both property and casualty insurance and employee benefit plans is generally satisfied upon the later of the issuance or effective date of the policy. The Company’s performance obligation related to consulting services is considered transactional in nature and is generally satisfied when the services have been completed and related revenue recognized at a point in time. Payment is received at the time services are rendered. The Company earns performance based incentives, commonly known as contingency payments, which usually are based on certain criteria established by the insurance carrier such as premium volume, growth and insured loss ratios. Contingent payments are accrued for based upon management’s expectations for the year. Commission expense associated with sales of insurance products is expensed as incurred. Insurance services revenue primarily relates to the Company’s All Other operating segment. Wealth Management Services Wealth management services income is primarily comprised of fees earned from the management and administration of trusts and other customer assets. The Company generally has two types of performance obligations related to these services. The Company’s performance obligation that relates to advisory and administration services are satisfied over time and the resulting fees are recognized monthly, based upon the market value of the assets under management and the applicable fee rate. Payment is generally received soon after month end or quarter end through a direct charge to customers’ accounts. The Company does not earn performance-based incentives. Transactional services such as tax return preparation services, purchases and sales of investments and insurance products are also available to existing trust and asset management customers. The Company’s performance obligation for these transactional-based services is generally satisfied, and related revenue recognized, at a point in time (i.e. as incurred). Payment is generally received on a monthly basis. Wealth management services revenue primarily relates to the Company’s All Other operating segment. Contract Balances A contract asset balance occurs when an entity performs a service for a customer before the customer pays consideration (resulting in a contract receivable) or before payment is due (resulting in a contract asset). A contract liability balance is an entity’s obligation to transfer a service to a customer for which the entity has already received payment (or payment is due) from the customer. The Company’s noninterest revenue streams are largely based on transactional activity, or standard month-end revenue accruals such as asset management fees based on month-end market values. Consideration is often received immediately or shortly after the Company satisfies its performance obligation and revenue is recognized. The Company does not typically enter into long-term revenue contracts with customers, and therefore, does not experience significant contract balances. As of 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. As of December 31, 2021, $31.6 million of accounts receivable, including $9.1 million of unbilled fee revenue, and $2.2 million of unearned revenue was recorded in the consolidated statements of condition. Contract Acquisition Costs Under the guidance of Topic 606, an entity is required to capitalize, and subsequently amortize into expense, certain incremental costs of obtaining a contract with a customer if these costs are expected to be recovered. The incremental costs of obtaining a contract are those costs that an entity incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained (for example, sales commission). The Company utilizes the practical expedient method which allows entities to immediately expense contract acquisition costs when the asset that would have resulted from capitalizing these costs would have been amortized in one year or less. Cash and Cash Equivalents For purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from banks, and highly liquid investments with original maturities of less than 90 days. The carrying amounts reported in the consolidated statements of condition for cash and cash equivalents approximate those assets’ fair values. As of December 31, 2022 and 2021, cash and cash equivalents reported in the consolidated statements of condition included cash due from banks of $10.0 million and $11.0 million, respectively. Cash due from banks may at times exceed federally insured limits. Investment Securities The Company can classify its investments in debt securities as held-to-maturity, available-for-sale, or trading. Held-to-maturity securities are those for which the Company has the positive intent and ability to hold until maturity, and are reported at cost, which is adjusted for amortization of premiums and accretion of discounts. Available-for-sale debt securities are reported at fair value with net unrealized gains and losses reflected as a separate component of shareholders’ equity, net of applicable income taxes. None of the Company’s investment securities have been classified as trading securities at December 31, 2022 or 2021. Interest income includes amortization of purchase premiums or discounts. Premiums and discounts on securities are amortized on the level-yield method without anticipating prepayments, except for mortgage-backed securities where prepayments are anticipated. Gains and losses are recorded on the trade date and determined using the specific identification method. Equity securities with a readily determinable fair value are reported at fair value with net unrealized gains and losses recognized in the consolidated statements of income. Certain equity securities that do not have a readily determinable fair value are stated at cost, adjusted for observable price changes in orderly transactions for identical or similar investments of the same issuer. These securities include restricted stock of the Federal Reserve Bank of New York (“Federal Reserve”) and the Federal Home Loan Bank of New York and the Federal Home Loan Bank of Boston (collectively referred to as “FHLB”), as well as other equity securities. Fair values for investment securities are based upon quoted market prices, where available. If quoted market prices are not available, fair values are based upon quoted market prices of comparable instruments, or a discounted cash flow model using market estimates of interest rates and volatility. Allowance for Credit Losses – Debt Securities For held-to-maturity debt securities, the Company measures expected credit losses on a collective basis by major security type. The estimates of expected credit losses considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. Accrued interest receivable on held-to-maturity securities is excluded from the estimate of credit losses. For available-for-sale debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For available-for-sale debt securities that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the security structure, recent security collateral performance metrics, if applicable, external credit ratings, failure of the issuer to make scheduled interest or principal payments, judgment about and expectations of future performance, and relevant independent industry research, analysis, and forecasts. This assessment involves a high degree of subjectivity and judgment that is based on the information available to management at a point in time. If this assessment indicates that a credit loss exists, the present value of the cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of the cash flows expected to be collected from the security is less than the amortized cost basis of the security, a credit loss exists and an allowance for credit losses is recorded, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income. Changes in the allowance for credit losses are recorded as provision for (or reversal of) credit losses in the consolidated statements of income. Losses are charged against the allowance when management believes the uncollectibility of an available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met. Accrued interest receivable on available-for-sale debt securities, included in accrued interest and fees receivable on the consolidated statements of condition, totaled $19.3 million and $15.8 million at December 31, 2022 and 2021, respectively. Accrued interest receivable on held-to-maturity securities, included in accrued Loans Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at amortized cost, net of allowance for credit losses. Amortized cost is the principal balance outstanding, net of purchase premiums and discounts, and deferred loan fees and costs. Mortgage loans held for sale are carried at fair value and are included in loans held for sale on the consolidated statements of condition. 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. The carrying amount of accrued interest approximates its fair value. Interest on loans is accrued and credited to operations based upon the principal amount outstanding. Nonrefundable loan fees and related direct costs are deferred and included in the loan balances where they are amortized over the life of the loan as an adjustment to loan yield using the effective yield method. Premiums and discounts on purchased loans are amortized using the effective yield method over the life of the loans. Accrued interest receivable on loans is included in accrued interest and fees receivable on the consolidated statements of condition and is excluded from the estimate of credit losses and amortized cost basis of loans. An allowance for credit losses is not measured for accrued interest receivable on loans as the Company writes off the uncollectible accrued interest balance in a timely manner upon recognition of credit deterioration of the underlying loan. The Company places a loan on nonaccrual status when the loan becomes 90 days past due (or sooner, if management concludes collection is doubtful), except when, in the opinion of management, it is well-collateralized and in the process of collection. A loan may be placed on nonaccrual status earlier than 90 days past due if there is deterioration in the financial position of the borrower or if other conditions of the loan so warrant. When a loan is placed on nonaccrual status, uncollected accrued interest is reversed against interest income and the amortization of nonrefundable loan fees and related direct costs is discontinued. Interest income during the period the loan is on nonaccrual status is recorded on a cash basis after recovery of principal is reasonably assured. Nonaccrual loans are returned to accrual status when management determines that the borrower’s performance has improved and that both principal and interest are collectible. This generally requires a sustained period of timely principal and interest payments and a well-documented credit evaluation of the borrower’s financial condition. The Company’s charge-off policy by loan type is as follows: ● Business lending loans are generally charged-off to the extent outstanding principal exceeds the fair value of estimated proceeds from collection efforts, including liquidation of collateral. The charge-off is recognized when the loss becomes reasonably quantifiable. ● Consumer installment loans are generally charged-off to the extent outstanding principal exceeds the fair value of collateral, and are recognized by the end of the month in which the loan becomes 90 days past due. ● Consumer mortgage and home equity loans are generally charged-off to the extent outstanding principal exceeds the fair value of the property, less estimated costs to sell, and are recognized when the loan becomes 180 days past due. Allowance for Credit Losses – Loans The allowance for credit losses is a valuation account that is netted against the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the allowance when management believes the uncollectibility of a loan balance is confirmed. Management estimates the allowance balance using relevant available information from internal and external sources relating to past events, current conditions, and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected future credit losses. Adjustments are made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, acquired loans, delinquency level, risk ratings or term of loans as well as actual and forecasted macroeconomic trends, such as unemployment rates and changes in property values such as home prices, commercial real estate prices and automobile prices, gross domestic product, median household income net of inflation and other relevant factors in comparison to longer-term. Multiple economic scenarios are utilized to encompass a range of economic outcomes, including baseline, upside and downside forecasts, which are weighted in the calculation. The segments of the Company’s loan portfolio are disaggregated into the following classes that allow management to monitor risk and performance: ● Business lending is comprised of general purpose commercial and industrial loans including, but not limited to, agricultural-related and dealer floor plans, loans to not-for-profit enterprises, as well as mortgages on commercial property and Paycheck Protection Program (“PPP”) loans. The portfolio segment is further broken into portfolio classes based on risks associated with the collateral supporting the loans. Each class of business lending can also have different payment structures. Business lending loans are generally higher dollar loans and a large portion are risk rated at least annually. ● Consumer mortgages consist primarily of fixed rate residential instruments, typically 10 to 30 years in contractual term, secured by first liens on real property. FICO credit scores are used to monitor higher risks related to this type of lending with the Company segmenting consumer mortgages into “FICO AB” and “FICO CDE”. FICO AB refers to higher tiered loans with FICO scores greater than or equal to 720 as compared to FICO CDE with FICO scores less than 720 and potentially higher risk. ● Consumer indirect consists primarily of installment loans originated through selected dealerships and are generally secured by automobiles, marine and other recreational vehicles. Collateral securing the loans was used to further disaggregate this portfolio as charge-offs can vary depending on the purpose of the loan. Non-auto loans often have longer terms, and generally have higher risk due to declines in collateral value given the nature of the property. ● Consumer direct consists of all other loans to consumers such as personal installment loans and check credit lines of credit. ● Home equity products are installment loans or lines of credit most often secured by a first or second lien position on residential real estate with terms up to 30 years. The allowance for credit losses is measured on a collective (pool) basis when similar risk characteristics exist, including collateral type, credit ratings/scores, size, duration, interest rate structure, industry, geography, origination vintage, and payment structure. The Company has identified the following portfolio segments and classes and measures the allowance for credit losses using the following methods: Loan Portfolio Segment Loan Portfolio Class Allowance for Credit Losses Methodology Business lending Commercial real estate multi family Cumulative loss rate Business lending Commercial real estate non-owner occupied Cumulative loss rate Business lending Commercial real estate owner occupied Cumulative loss rate Business lending Commercial and industrial loans Vintage loss rate Business lending Commercial and industrial lines of credit Line loss Business lending Municipal Cumulative loss rate Business lending Other business Cumulative loss rate Business lending Paycheck Protection Program Cumulative loss rate Consumer mortgage Consumer mortgage FICO AB Cumulative loss rate Consumer mortgage Consumer mortgage FICO CDE Cumulative loss rate Consumer indirect Indirect new auto Vintage loss rate Consumer indirect Indirect used auto Vintage loss rate Consumer indirect Indirect non-auto Vintage loss rate Consumer direct Consumer check credit Line loss Consumer direct Consumer direct Vintage loss rate Home equity Home equity fixed rate Vintage loss rate Home equity Home equity lines of credit Line loss The cumulative loss rate method uses historical loss data applied against multiple pools of loans and uses a quantitatively based management overlay in order to capture the risk for a loan’s entire expected life. These loss rates are then applied to current balances to achieve a required reserve before qualitative adjustments. The line loss method calculates the quantitative required reserve for lines of credit. This method contains several different underlying calculations including average annual loss rate, pay-down rate, cumulative loss, average draw percentage, and undrawn liability reserve. The vintage loss rate method calculates annual loss rates by origination year. The results of this model are then applied to current outstanding balances by vintage, which correspond to the origination period for each annual loss rate. In addition to the risk characteristics noted above, management considers the portion of acquired loans to the overall segment balance, as well as current delinquency and charge-off trends compared to historical time periods. Loans that do not share risk characteristics are evaluated on an individual basis. Loans that are individually assessed are not included in the collective evaluation. When management determines that foreclosure is probable or when the borrower is experiencing financial difficulty at the reporting date and repayment is expected to be provided substantially through the operation or sale of the collateral, expected credit losses are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate. Expected credit losses are estimated over the contractual term of the loans and adjusted for expected prepayments when appropriate. The contractual term excludes expected extensions, renewals, and modifications unless management has a reasonable expectation at the reporting date that a troubled debt restructuring will be executed with an individual borrower or the extension or renewal options are included in the original or modified contract at the reporting date and are not unconditionally cancellable by the Company. Certain business lending, consumer direct, and home equity loans do not have stated maturities. In determining the estimated life of these loans, management first estimates the future cash flows expected to be received and then applies those expected future cash flows to the balance. Expected credit losses for lines of credit with no stated maturity are determined by estimating the amount and timing of all principal payments expected to be received after the reporting period and allocating those principal payments between the balance outstanding as of the reporting period and the balance of future receivables expected to be originated through subsequent usage of the unconditionally cancellable loan commitment associated with the account until the expected payments have been fully allocated. An additional allowance for credit loss is recorded for the excess of the balance outstanding as of the reporting period over the expected principal payments allocated to that balance. Troubled Debt Restructuring A loan for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, is considered to be a troubled debt restructuring (“TDR”). The allowance for credit loss on a TDR is measured using the same method as all other loans, except when the value of a concession cannot be measured using a method other than the discounted cash flow method. When the value of a concession is measured using the discounted cash flow method, the allowance for credit loss is determined by discounting the expected future cash flows at the original interest rate of the loan. Allowance for Credit Losses - Off-balance-sheet credit exposures The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. There are unfunded commitments for lines of credit within each of the Company’s loan portfolio segments except consumer indirect. The allowance for credit losses on off-balance-sheet credit exposures is adjusted as a provision for (or reversal of) credit losses. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on comm |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Dec. 31, 2022 | |
ACQUISITIONS | |
ACQUISITIONS | NOTE B: ACQUISITIONS 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 statements of income for the year ended December 31, 2022. 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 enhances 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 $583.4 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 $42.2 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. The Company also recognized a $3.9 million acquisition-related provision for credit losses for loans acquired in the transaction. Revenues of approximately $12.1 million and direct expenses of approximately $3.1 million from the Elmira branch network, which may not include certain shared expenses, were included in the consolidated statements of income for the year ended December 31, 2022. 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. Revenues of approximately $0.9 million and direct expenses of approximately $0.4 million were included in the consolidated statements of income for the year ended December 31, 2022. On August 2, 2021, the Company, through its subsidiary OneGroup, completed its acquisition of certain assets and liabilities of the Thomas Gregory Associates Insurance Brokers, Inc. (“TGA”), a specialty-lines insurance broker based in the Boston, Massachusetts area, for $11.6 million in cash plus contingent consideration with a fair value at acquisition date of $1.5 million. The Company recorded a $10.9 million customer list intangible asset and $2.2 million of goodwill in conjunction with the acquisition. The effects of the acquired assets and liabilities have been included in the consolidated financial statements since that date. Revenues of approximately $3.1 million and $0.6 million and direct expenses of approximately $1.8 million and $0.6 million from TGA were included in the consolidated income statements for the years ended December 31, 2022 and 2021, respectively. The acquisition of TGA includes a contingent consideration arrangement that requires additional consideration to be paid by the Company based on the future retained revenue of TGA over a three-year two years The contingent consideration related to the TGA acquisition was revalued at December 31, 2022. The range of the undiscounted amounts the Company could pay under the agreement remained at between zero and $3.4 million. Key assumptions include (1) a discount rate range of 5.87% to 6.21% applied to present value the payments and (2) probability adjusted level of retained revenue between $3.1 million and $3.2 million. A revaluation was previously performed at June 30, 2022, resulting in a $0.5 million adjustment to the fair value of the contingent consideration. Based on the results of the December revaluation, the Company recorded a reduction of $0.3 million acquisition-related contingent consideration adjustment as of December 31, 2022 in the consolidated statements of income related to the TGA acquisition. The total net adjustment for 2022 was $0.2 million, for an adjusted fair value of $1.7 million at December 31, 2022. On July 1, 2021, the Company, through its subsidiary BPA, completed its acquisition of FBD for $15.4 million in cash plus contingent consideration with a fair value at acquisition date of $1.4 million. The Company recorded a $14.0 million customer list intangible asset and $2.1 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 $3.5 million and $2.8 million and direct expenses of approximately $4.1 million and $2.5 million from FBD were included in the consolidated income statements for the years ended December 31, 2022 and 2021, respectively. The acquisition of FBD includes a contingent consideration arrangement that requires additional consideration to be paid by the Company based on the future retained revenue of FBD over a two-year three years The contingent consideration related to the FBD acquisition was revalued at December 31, 2022. The range of the undiscounted amounts the Company could pay under the agreement remained at between zero and $2.7 million. Key assumptions include (1) a discount rate of 6.09% applied to present value the payment, and (2) probability adjusted level of retained revenue between $4.9 million and $5.1 million. A revaluation was previously performed at June 30, 2022, resulting in a $0.1 million adjustment to the fair value of the contingent consideration. Based on the results of the December revaluation, the Company recorded an additional $0.4 million acquisition-related contingent consideration adjustment in the consolidated statements of income related to the FBD acquisition. The total adjustment for 2022 was $0.5 million, for an adjusted fair value of $1.1 million at December 31, 2022. On June 1, 2021, the Company, through its subsidiary OneGroup, completed its acquisition of certain assets and liabilities of NuVantage Insurance Corp. (“NuVantage”), an insurance agency headquartered in Melbourne, Florida. The Company paid $2.9 million in cash and recorded a $1.4 million customer list intangible asset and $1.4 million of goodwill in conjunction with the acquisition. The effects of the acquired assets and liabilities have been included in the consolidated financial statements since that date. Revenues of approximately $1.3 million and $0.7 million and direct expenses of approximately $1.3 million and $0.6 million from NuVantage were included in the consolidated income statements for the years ended December 31, 2022 and 2021, respectively. On June 12, 2020, the Company completed its merger with Steuben Trust Corporation (“Steuben”), parent company of Steuben Trust Company, a New York State chartered bank headquartered in Hornell, New York, for $98.6 million in Company stock and cash, comprised of $21.6 million in cash and the issuance of 1.36 million shares of common stock. The merger extended the Company’s footprint into two new counties in Western New York State, and enhanced the Company’s presence in four Western New York State counties in which it currently operates. In connection with the merger, the Company added 11 full-service offices to its branch service network and acquired $607.8 million of assets, including $339.7 million of loans and $180.5 million of investment securities, as well as $516.3 million of deposits. Goodwill of $20.0 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, excluding interest income on acquired investments, interest income on acquired consumer indirect loans, and revenues associated with acquired loans and deposits consolidated into the legacy branch network, of approximately $11.4 million, $13.1 million and $7.7 million and direct expenses, which may not include certain shared expenses, of approximately $4.8 million, $5.1 million and $2.6 million from Steuben were included in the consolidated income statements for the years ended December 31, 2022, 2021 and 2020, respectively. The Company incurred certain transaction-related costs in connection with the Steuben acquisition. The assets and liabilities assumed in the acquisitions were recorded at their estimated fair values based on management’s best estimates using information available at the dates of the acquisitions. During 2022, the carrying amount of other liabilities associated with the FBD acquisition was adjusted as a result of an adjustment to working capital based on the purchase agreement, for a total net increase to goodwill of $0.1 million. During the third quarter of 2022, the carrying amount of premises and equipment, other assets, and other liabilities related to the Elmira acquisition were adjusted upon receipt of new information as a result of adjustments to fair value and deferred income taxes. The adjustments resulted in a net decrease of $4.9 million to goodwill recognized from the Elmira acquisition at September 30, 2022. During the fourth quarter of 2022, the carrying amount of loans, other assets and other liabilities related to the Elmira acquisition were adjusted upon receipt of new information as a result of adjustments to loan escrow balances, deferred income taxes and benefits accruals. The adjustments resulted in a net decrease to goodwill of $3.6 million. The above referenced acquisitions generally expanded the Company’s geographical presence in New York, Florida, Massachusetts and Minnesota, and management expects that the Company will benefit from greater geographic diversity and the advantages of other synergistic business development opportunities. The following table summarizes the estimated fair value of the assets acquired and liabilities assumed after considering the measurement period adjustments described above: 2022 2021 2020 (000s omitted) Elmira Other (1) Total Total (2) Steuben Consideration: Cash $ 82,179 $ 3,477 $ 85,656 $ 29,870 $ 21,613 Community Bank System, Inc. common stock 0 0 0 0 76,942 Contingent consideration 0 0 0 2,900 0 Total net consideration 82,179 3,477 85,656 32,770 98,555 Recognized amounts of identifiable assets acquired and liabilities assumed: Cash and cash equivalents 84,988 0 84,988 541 55,973 Investment securities 11,305 0 11,305 0 180,497 Loans, net of allowance for credit losses on PCD loans 436,954 0 436,954 0 339,017 Premises and equipment, net 11,303 14 11,317 760 7,764 Accrued interest and fees receivable 884 0 884 0 2,701 Other assets 30,007 0 30,007 579 17,675 Core deposit intangibles 7,970 0 7,970 0 2,928 Other intangibles 0 3,014 3,014 26,337 1,196 Deposits (522,295) 0 (522,295) 0 (516,274) Other liabilities (3,541) 0 (3,541) (1,164) (4,841) Other Federal Home Loan Bank borrowings (17,616) 0 (17,616) 0 (6,000) Subordinated debt held by unconsolidated subsidiary trusts 0 0 0 0 (2,062) Total identifiable assets, net 39,959 3,028 42,987 27,053 78,574 Goodwill $ 42,220 $ 449 $ 42,669 $ 5,717 $ 19,981 (1) Includes amounts for all OneGroup acquisitions completed in 2022. (2) Includes amounts for TGA, FBD, and NuVantage acquisitions completed in 2021. 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 as described in Note A: Summary of Significant Accounting Policies). 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 Company acquired non-PCD loans from Steuben with an unpaid principal balance of $313.0 million at the acquisition date. Total fair value adjustments for non-PCD loans resulted in a net premium of $2.5 million. The Company has acquired loans from Steuben classified as PCD loans. There were no investment securities acquired from Steuben 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 $ 35,906 Allowance for credit losses at acquisition (668) Non-credit premium at acquisition 103 Fair value of PCD loans at acquisition $ 35,341 The fair value of the Company’s common stock issued for the Steuben acquisition was determined using the market close price of the stock on June 12, 2020. 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 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 and Steuben acquisitions and other intangibles related to the NuVantage acquisition and three of the OneGroup acquisitions completed in 2022 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 other intangibles related to the TGA and FBD acquisitions are being amortized using an accelerated method over their estimated useful life of 13 years and 15 years , respectively. The goodwill, which is not amortized for book purposes, was assigned to the Banking segment for the Elmira and Steuben acquisitions, the All Other segment for the NuVantage, TGA and JMD acquisitions, and the Employee Benefit Services segment for the FBD acquisition. Goodwill arising from the Elmira, FBD and Steuben acquisitions is not deductible for tax purposes. Goodwill arising from the JMD, NuVantage and TGA acquisitions is deductible for tax purposes. Direct costs related to the acquisitions were expensed as incurred. Merger and acquisition integration-related expenses amount to Supplemental Pro Forma Financial Information (Unaudited) The following unaudited condensed pro forma information assumes the Elmira acquisition had been completed as of January 1, 2021 for the years ended December 31, 2022 and 2021, and the Steuben acquisition had been completed as of January 1, 2019 for the year ended December 31, 2020. The pro forma information does not include amounts related to the OneGroup acquisitions completed in 2022 or the NuVantage, FBD, and TGA acquisitions completed in 2021 as the amounts were immaterial. The table below has been prepared for comparative purposes only and is not necessarily indicative of the actual results that would have been attained had the acquisitions occurred as of the beginning of the year presented, nor is it indicative of the Company’s future results. Furthermore, the unaudited pro forma information does not reflect management’s estimate of any revenue-enhancing opportunities nor anticipated cost savings that may have occurred as a result of the integration and consolidation of the acquisitions. The pro forma information set forth below reflects the historical results of Elmira and Steuben combined with the Company’s consolidated statements of income with adjustments related to (a) certain purchase accounting fair value adjustments and (b) amortization of customer lists and core deposit intangibles. Acquisition expenses related to the Elmira transaction totaling Pro Forma (Unaudited) Year Ended December 31, (000s omitted) 2022 2021 2020 Total revenue, net of interest expense $ 687,976 $ 646,375 $ 607,382 Net income 193,417 191,450 171,147 |
INVESTMENT SECURITIES
INVESTMENT SECURITIES | 12 Months Ended |
Dec. 31, 2022 | |
INVESTMENT SECURITIES | |
INVESTMENT SECURITIES | NOTE C: INVESTMENT SECURITIES The amortized cost and estimated fair value of investment securities as of December 31 are as follows: 2022 2021 Gross Gross Gross Gross Amortized Unrealized Unrealized Estimated Amortized Unrealized Unrealized Estimated (000’s omitted) Cost Gains Losses Fair Value Cost Gains Losses Fair Value Available-for-Sale Portfolio: U.S. Treasury and agency securities $ 3,660,546 $ 0 $ 417,009 $ 3,243,537 $ 4,064,624 $ 39,997 $ 106,057 $ 3,998,564 Obligations of state and political subdivisions 549,118 506 45,327 504,297 413,019 17,326 56 430,289 Government agency mortgage-backed securities 444,689 58 60,114 384,633 474,506 7,615 5,065 477,056 Corporate debt securities 8,000 0 886 7,114 8,000 39 77 7,962 Government agency collateralized mortgage obligations 13,121 1 852 12,270 19,953 410 24 20,339 Total available-for-sale portfolio $ 4,675,474 $ 565 $ 524,188 $ 4,151,851 $ 4,980,102 $ 65,387 $ 111,279 $ 4,934,210 Equity and other Securities: Equity securities, at fair value $ 251 $ 168 $ 0 $ 419 $ 251 $ 212 $ 0 $ 463 Federal Home Loan Bank common stock 47,497 0 0 47,497 7,188 0 0 7,188 Federal Reserve Bank common stock 31,144 0 0 31,144 33,916 0 0 33,916 Other equity securities, at adjusted cost 3,532 750 0 4,282 2,562 750 0 3,312 Total equity and other securities $ 82,424 $ 918 $ 0 $ 83,342 $ 43,917 $ 962 $ 0 $ 44,879 Held-to-Maturity Portfolio: U.S. Treasury and agency securities $ 1,079,695 $ 0 $ 44,900 $ 1,034,795 $ 0 $ 0 $ 0 $ 0 Total held-to-maturity portfolio $ 1,079,695 $ 0 $ 44,900 $ 1,034,795 $ 0 $ 0 $ 0 $ 0 In the fourth quarter of 2022, the Company transferred $1.08 billion of U.S. Treasury securities, at fair value, from available-for-sale to held-to-maturity. The securities were reclassified at fair value at the time of the transfer and the transfer represented a non-cash transaction. Accumulated other comprehensive loss at December 31, 2022 included pretax unrealized losses of $341.2 million related to the transfer. These unrealized losses will be amortized, consistent with the amortization of the discount on these securities, over the remaining life as an adjustment of yield, resulting in no impact to net interest income or net income. A summary of investment securities that have been in a continuous unrealized loss position for less than or greater than twelve months is as follows: As of December 31, 2022 Less than 12 Months 12 Months or Longer Total Gross Gross Gross Unrealized Unrealized Unrealized (000’s omitted) # Fair Value Losses # Fair Value Losses # Fair 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 As of December 31, 2021 Less than 12 Months 12 Months or Longer Total Gross Gross Gross Unrealized Unrealized Unrealized (000’s omitted) # Fair Value Losses # Fair Value Losses # Fair Value Losses Available-for-Sale Portfolio: U.S. Treasury and agency securities 47 $ 1,224,101 $ 14,873 13 $ 900,462 $ 91,184 60 $ 2,124,563 $ 106,057 Obligations of state and political subdivisions 27 23,966 56 0 0 0 27 23,966 56 Government agency mortgage-backed securities 147 139,442 2,475 52 67,273 2,590 199 206,715 5,065 Corporate debt securities 1 4,923 77 0 0 0 1 4,923 77 Government agency collateralized mortgage obligations 18 3,146 24 1 53 0 19 3,199 24 Total available-for-sale investment portfolio 240 $ 1,395,578 $ 17,505 66 $ 967,788 $ 93,774 306 $ 2,363,366 $ 111,279 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 December 31, 2022 and 2021 represents credit losses and unrealized losses have been recognized in the provision for credit losses. Accordingly, there is 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 December 31, 2022 all securities in the held-to-maturity classification are U.S. Treasury 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. U.S. Treasury 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 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 U.S. Treasury 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 portfolio as of December 31, 2022 and 2021. The amortized cost and estimated fair value of debt securities at December 31, 2022, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately. Held-to-Maturity Available-for-Sale (000’s omitted) Amortized Cost Fair Value Amortized Cost Fair Value Due in one year or less $ 0 $ 0 $ 521,444 $ 516,496 Due after one through five years 0 0 1,728,988 1,574,685 Due after five years through ten years 539,825 524,815 1,161,641 1,020,562 Due after ten years 539,870 509,980 805,591 643,205 Subtotal 1,079,695 1,034,795 4,217,664 3,754,948 Government agency mortgage-backed securities 0 0 444,689 384,633 Government agency collateralized mortgage obligations 0 0 13,121 12,270 Total $ 1,079,695 $ 1,034,795 $ 4,675,474 $ 4,151,851 Investment securities with a carrying value of $2.18 billion and $2.32 billion at December 31, 2022 and 2021, respectively, were pledged to collateralize certain deposits and borrowings. Securities pledged to collateralize certain deposits and borrowings included $466.9 million and $485.4 million of U.S. Treasury securities that were pledged as collateral for securities sold under agreement to repurchase at December 31, 2022 and 2021, respectively. All securities sold under agreement to repurchase as of December 31, 2022 and 2021 have an overnight and continuous maturity. |
LOANS AND ALLOWANCE FOR CREDIT
LOANS AND ALLOWANCE FOR CREDIT LOSSES | 12 Months Ended |
Dec. 31, 2022 | |
LOANS AND ALLOWANCE FOR CREDIT LOSSES | |
LOANS AND ALLOWANCE FOR CREDIT LOSSES | NOTE D: LOANS AND ALLOWANCE FOR CREDIT LOSSES The segments of the Company’s loan portfolio at December 31 are summarized as follows: (000’s omitted) 2022 2021 Business lending $ 3,645,665 $ 3,075,904 Consumer mortgage 3,012,475 2,556,114 Consumer indirect 1,539,653 1,189,749 Consumer direct 177,605 153,811 Home equity 433,996 398,061 Gross loans, including deferred origination costs 8,809,394 7,373,639 Allowance for credit losses (61,059) (49,869) Loans, net of allowance for credit losses $ 8,748,335 $ 7,323,770 The Company had approximately $73.8 million and $34.9 million of net deferred loan origination costs included in gross loans as of December 31, 2022 and 2021, respectively. Certain directors and executive officers of the Company, as well as associates of such persons, are loan customers. Loans to these individuals were made in the ordinary course of business under normal credit terms and do not have more than a normal risk of collection. Following is a summary of the aggregate amount of such loans during 2022 and 2021. (000’s omitted) 2022 2021 Balance at beginning of year $ 13,773 $ 15,549 New loans 2,025 2,500 Payments (3,425) (4,276) Balance at end of year $ 12,373 $ 13,773 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 and 2021: Past Due 90+ Days Past (000’s omitted) 30 – 89 Due and Total December 31, 2022 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 Past Due 90+ Days Past (000’s omitted) 30 – 89 Due and Total December 31, 2021 Days Still Accruing Nonaccrual Past Due Current Total Loans Business lending $ 5,540 $ 99 $ 24,105 $ 29,744 $ 3,046,160 $ 3,075,904 Consumer mortgage 10,297 3,328 15,027 28,652 2,527,462 2,556,114 Consumer indirect 9,611 87 0 9,698 1,180,051 1,189,749 Consumer direct 796 22 1 819 152,992 153,811 Home equity 1,778 272 2,532 4,582 393,479 398,061 Total $ 28,022 $ 3,808 $ 41,665 $ 73,495 $ 7,300,144 $ 7,373,639 No interest income on nonaccrual loans was recognized during the years ended December 31, 2022 or 2021. For the years ended December 31, 2022 and 2021, an immaterial amount of accrued interest was written off on nonaccrual loans by reversing interest income. Approximately $1.9 million of interest income on loans that returned to accrual status in 2022 was recognized for the year ended December 31, 2022. 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 December 31, 2022 and 2021: Term Loans Amortized Cost Basis by Origination Year Revolving Revolving Loans Loans (000’s omitted) Amortized Converted to December 31, 2022 2022 2021 2020 2019 2018 Prior Cost Basis Term Total Business lending: Risk rating Pass $ 747,570 $ 373,914 $ 232,591 $ 246,817 $ 168,423 $ 604,746 $ 711,629 $ 336,722 $ 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 $ 752,157 $ 379,525 $ 237,510 $ 253,689 $ 195,251 $ 688,511 $ 751,619 $ 387,403 $ 3,645,665 Term Loans Amortized Cost Basis by Origination Year Revolving Revolving Loans Loans (000’s omitted) Amortized Converted to December 31, 2021 2021 2020 2019 2018 2017 Prior Cost Basis Term Total Business lending: Risk rating Pass $ 517,302 $ 286,386 $ 265,551 $ 204,376 $ 152,440 $ 544,577 $ 460,461 $ 286,446 $ 2,717,539 Special mention 5,969 10,638 9,738 18,702 7,972 54,367 26,609 46,518 180,513 Classified 1,870 1,414 3,571 16,729 18,982 56,538 26,780 51,403 177,287 Doubtful 0 0 0 62 0 0 503 0 565 Total business lending $ 525,141 $ 298,438 $ 278,860 $ 239,869 $ 179,394 $ 655,482 $ 514,353 $ 384,367 $ 3,075,904 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 December 31, 2022 and 2021: Term Loans Amortized Cost Basis by Origination Year Revolving Revolving Loans Loans (000’s omitted) Amortized Converted to December 31, 2022 2022 2021 2020 2019 2018 Prior Cost Basis 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. Term Loans Amortized Cost Basis by Origination Year Revolving Revolving Loans Loans (000’s omitted) Amortized Converted to December 31, 2021 2021 2020 2019 2018 2017 Prior Cost Basis Term Total Consumer mortgage: FICO AB (1) Performing $ 496,372 $ 220,171 $ 178,589 $ 113,505 $ 116,417 $ 566,123 $ 0 $ 32,175 $ 1,723,352 Nonperforming 0 266 0 131 435 3,236 0 0 4,068 Total FICO AB 496,372 220,437 178,589 113,636 116,852 569,359 0 32,175 1,727,420 FICO CDE (2) Performing 162,995 117,566 81,377 57,973 54,396 300,350 25,028 14,722 814,407 Nonperforming 0 522 972 1,465 939 10,389 0 0 14,287 Total FICO CDE 162,995 118,088 82,349 59,438 55,335 310,739 25,028 14,722 828,694 Total consumer mortgage $ 659,367 $ 338,525 $ 260,938 $ 173,074 $ 172,187 $ 880,098 $ 25,028 $ 46,897 $ 2,556,114 Consumer indirect: Performing $ 590,857 $ 204,529 $ 182,458 $ 107,683 $ 39,385 $ 64,750 $ 0 $ 0 $ 1,189,662 Nonperforming 0 34 0 24 17 12 0 0 87 Total consumer indirect $ 590,857 $ 204,563 $ 182,458 $ 107,707 $ 39,402 $ 64,762 $ 0 $ 0 $ 1,189,749 Consumer direct: Performing $ 72,584 $ 28,905 $ 24,768 $ 12,340 $ 4,396 $ 4,577 $ 6,214 $ 4 $ 153,788 Nonperforming 0 4 18 1 0 0 0 0 23 Total consumer direct $ 72,584 $ 28,909 $ 24,786 $ 12,341 $ 4,396 $ 4,577 $ 6,214 $ 4 $ 153,811 Home equity: Performing $ 76,041 $ 43,106 $ 35,990 $ 18,824 $ 15,134 $ 35,740 $ 131,817 $ 38,605 $ 395,257 Nonperforming 0 64 47 102 131 679 953 828 2,804 Total home equity $ 76,041 $ 43,170 $ 36,037 $ 18,926 $ 15,265 $ 36,419 $ 132,770 $ 39,433 $ 398,061 (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 lending loans as of December 31, 2022 and 2021 follows: December 31, December 31, (000’s omitted) 2022 2021 Loans with allowance allocation $ 0 $ 7,102 Loans without allowance allocation 3,163 7,417 Carrying balance 3,163 14,519 Contractual balance 4,201 16,963 Specifically allocated allowance 0 566 The average carrying balance of individually assessed loans was $12.2 million, and $33.4 million for the years ended December 31, 2022 and 2021, respectively. No interest income was recognized on individually assessed loans for the years ended December 31, 2022 and 2021. In the course of working with borrowers, the Company may choose to restructure the contractual terms of certain loans. In this scenario, the Company attempts to work-out an alternative payment schedule with the borrower in order to optimize collectability of the loan. Any loans that are modified are reviewed by the Company to identify if a TDR has occurred, which is when, for economic or legal reasons related to a borrower’s financial difficulties, the Company grants a concession to the borrower that it would not otherwise consider. Terms may be modified to fit the ability of the borrower to repay in line with its current financial standing and the restructuring of the loan may include the transfer of assets from the borrower to satisfy the debt, a modification of loan terms, or a combination of the two. In accordance with clarified guidance issued by the Office of the Comptroller of the Currency (“OCC”), loans that have been discharged in Chapter 7 bankruptcy but not reaffirmed by the borrower, are classified as TDRs, irrespective of payment history or delinquency status, even if the repayment terms for the loan have not been otherwise modified. The Company’s lien position against the underlying collateral remains unchanged. Pursuant to that guidance, the Company records a charge-off equal to any portion of the carrying value that exceeds the net realizable value of the collateral. The amount of loss incurred in 2022, 2021 and 2020 was immaterial. Information regarding TDRs as of December 31, 2022, 2021 and 2020 is as follows: December 31, 2022 Nonaccrual Accruing Total (000’s omitted) # Amount # Amount # Amount Business lending 1 $ 135 3 $ 271 4 $ 406 Consumer mortgage 52 2,218 46 2,114 98 4,332 Consumer indirect 0 0 56 600 56 600 Consumer direct 0 0 18 5 18 5 Home equity 9 108 9 178 18 286 Total 62 $ 2,461 132 $ 3,168 194 $ 5,629 December 31, 2021 Nonaccrual Accruing Total (000’s omitted) # Amount # Amount # Amount Business lending 10 $ 1,011 4 $ 811 14 $ 1,822 Consumer mortgage 61 2,694 47 2,420 108 5,114 Consumer indirect 0 0 72 829 72 829 Consumer direct 0 0 16 7 16 7 Home equity 10 235 12 232 22 467 Total 81 $ 3,940 151 $ 4,299 232 $ 8,239 December 31, 2020 Nonaccrual Accruing Total (000’s omitted) # Amount # Amount # Amount Business lending 6 $ 529 4 $ 191 10 $ 720 Consumer mortgage 56 2,413 48 2,266 104 4,679 Consumer indirect 0 0 86 951 86 951 Consumer direct 0 0 23 85 23 85 Home equity 11 285 13 264 24 549 Total 73 $ 3,227 174 $ 3,757 247 $ 6,984 The following table presents information related to loans modified in a TDR during the years ended December 31, 2022, 2021 and 2020. Of the loans noted in the table below, all consumer mortgage loans for the years ended December 31, 2022, 2021 and 2020 were modified due to a Chapter 7 bankruptcy as described previously. The financial effects of these restructurings were immaterial. December 31, 2022 December 31, 2021 December 31, 2020 (000’s omitted) # Amount # Amount # Amount Business lending 0 $ 0 5 $ 1,371 1 $ 4 Consumer mortgage 7 597 24 1,425 17 1,339 Consumer indirect 13 178 23 284 31 333 Consumer direct 3 5 2 7 3 10 Home equity 1 4 0 0 3 70 Total 24 $ 784 54 $ 3,087 55 $ 1,756 Allowance for Credit Losses The following presents by loan segment the activity in the allowance for credit losses during 2022, 2021 and 2020: Year Ended December 31, 2022 PCD Beginning Charge- Allowance at Ending (000’s omitted) balance offs Recoveries Acquisition Provision balance Business lending $ 22,995 $ (824) $ 1,374 $ 71 $ (319) $ 23,297 Consumer mortgage 10,017 (313) 62 0 4,577 14,343 Consumer indirect 11,737 (7,986) 4,756 0 9,345 17,852 Consumer direct 2,306 (1,252) 772 0 1,147 2,973 Home equity 1,814 (86) 163 0 (297) 1,594 Unallocated 1,000 0 0 0 0 1,000 Allowance for credit losses – loans 49,869 (10,461) 7,127 71 14,453 61,059 Liabilities for off-balance-sheet credit exposures 803 0 0 0 320 1,123 Total allowance for credit losses $ 50,672 $ (10,461) $ 7,127 $ 71 $ 14,773 $ 62,182 Year Ended December 31, 2021 Beginning Charge- Ending (000’s omitted) balance offs Recoveries Provision balance Business lending $ 30,072 $ (1,922) $ 796 $ (5,951) $ 22,995 Consumer mortgage 10,672 (426) 91 (320) 10,017 Consumer indirect 13,696 (5,160) 4,346 (1,145) 11,737 Consumer direct 3,207 (1,232) 793 (462) 2,306 Home equity 2,222 (225) 92 (275) 1,814 Unallocated 1,000 0 0 0 1,000 Allowance for credit losses – loans 60,869 (8,965) 6,118 (8,153) 49,869 Liabilities for off-balance-sheet credit exposures 1,489 0 0 (686) 803 Total allowance for credit losses $ 62,358 $ (8,965) $ 6,118 $ (8,839) $ 50,672 Year Ended December 31, 2020 Beginning Beginning balance, balance, prior to the after adoption of Impact of adoption of Steuben Ending (000’s omitted) ASC 326 ASC 326 ASC 326 Charge-offs Recoveries acquisition Provision balance Business lending $ 19,426 $ 3,360 $ 22,786 $ (1,588) $ 796 $ 3,011 $ 5,067 $ 30,072 Consumer mortgage 10,269 (1,051) 9,218 (862) 130 146 2,040 10,672 Consumer indirect 13,712 (997) 12,715 (6,382) 3,992 183 3,188 13,696 Consumer direct 3,255 (643) 2,612 (1,633) 743 87 1,398 3,207 Home equity 2,129 808 2,937 (199) 28 235 (779) 2,222 Unallocated 957 43 1,000 0 0 0 0 1,000 Acquired impaired 163 (163) 0 0 0 0 0 0 Allowance for credit losses – loans 49,911 1,357 51,268 (10,664) 5,689 3,662 10,914 60,869 Liabilities for off-balance-sheet credit exposures 0 1,185 1,185 0 0 67 237 1,489 Total allowance for credit losses $ 49,911 $ 2,542 $ 52,453 $ (10,664) $ 5,689 $ 3,729 $ 11,151 $ 62,358 The allowance for credit losses increased to $61.1 million at December 31, 2022 compared to $49.9 million at December 31, 2021, driven by organic loan growth and the Elmira acquisition, as well as weakening economic forecasts. Accrued interest receivable on loans, included in accrued interest and fees receivable on the consolidated statements of condition, totaled $25.1 million and $16.7 million at December 31, 2022 and 2021, respectively, and is excluded from the estimate of credit losses and amortized cost basis of loans. 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 December 31, 2022. 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 deterioration in GDP growth, auto values, residential real estate and median household income, a result of inflationary pressures. 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, the level of loan deferrals, risk rating changes, recent charge-off history and acquired loans as part of the estimation of credit 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, the level of loan deferrals, 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, the level of loan deferrals, 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, the level of loan deferrals, charge-offs and acquired loans were considered. The following table presents the carrying amounts of loans purchased and sold during the year ended December 31, 2022 by portfolio segment: (000’s Business Consumer Consumer Consumer Home omitted) lending mortgage indirect direct equity Total Purchases $ 125,288 $ 271,408 $ 9,383 $ 12,511 $ 18,429 $ 437,019 Sales 0 5,309 0 0 0 5,309 All purchases of loans were from the acquisition of Elmira. All sales of consumer mortgages during the year ended December 31, 2022 were sales of secondary market eligible residential mortgage loans. |
PREMISES AND EQUIPMENT
PREMISES AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2022 | |
PREMISES AND EQUIPMENT | |
PREMISES AND EQUIPMENT | NOTE E: PREMISES AND EQUIPMENT Premises and equipment consist of the following at December 31: (000’s omitted) 2022 2021 Land and land improvements $ 34,487 $ 31,884 Bank premises 158,312 151,724 Equipment 72,960 85,391 Operating lease right-of-use assets 30,069 31,754 Construction in progress 2,377 4,786 Premises and equipment, gross 298,205 305,539 Accumulated depreciation (137,427) (144,888) Premises and equipment, net $ 160,778 $ 160,651 As of December 31, 2022, the Company had $5.4 million of premises and equipment held for sale, comprised of $2.5 million of land and land improvements and $2.9 million of bank premises, recorded in other assets in the consolidated statements of condition. |
GOODWILL AND IDENTIFIABLE INTAN
GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2022 | |
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: December 31, 2022 December 31, 2021 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 $ (65,069) $ 12,304 $ 69,403 $ (60,316) $ 9,087 Other intangibles 119,813 (71,121) 48,692 116,799 (60,660) 56,139 Total amortizing intangibles $ 197,186 $ (136,190) $ 60,996 $ 186,202 $ (120,976) $ 65,226 The estimated aggregate amortization expense for each of the five succeeding fiscal years ended December 31 is as follows (000’s omitted): Year Amount 2023 $ 13,698 2024 11,601 2025 9,883 2026 8,745 2027 3,333 Thereafter 13,736 Total $ 60,996 Shown below are the components of the Company’s goodwill at December 31, 2022, 2021, and 2020: December 31, December 31, December 31, (000’s omitted) 2020 Activity 2021 Activity 2022 Goodwill $ 793,708 $ 5,401 $ 799,109 $ 42,732 $ 841,841 The Company performed a qualitative assessment for evaluating impairment of goodwill and other intangibles as of December 31, 2022, including assessments of macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, other relevant entity-specific events and changes in share price. The results of the qualitative analysis indicated that there was no goodwill impairment at December 31, 2022 and therefore a quantitative analysis was not necessary. During 2022, the Company also performed a quarterly analysis to determine if triggering events occurred that would necessitate an interim qualitative assessment of goodwill or other intangible impairment. No triggering events or impairment was noted during these interim analyses. During 2021, the Company performed quarterly qualitative analyses of goodwill impairment and performed a quantitative assessment of its banking and financial services businesses during the fourth quarter of 2021 by comparing the fair value of the reporting unit with its carrying amount. Results of the analyses indicate there was no goodwill impairment in 2021. Mortgage Servicing Rights Under certain circumstances, the Company sells consumer residential mortgage loans in the secondary market and typically retains the right to service the loans sold. Generally, the Company’s residential mortgage loans sold to third parties are sold on a non-recourse basis. Upon sale, a mortgage servicing right (“MSR”) is established, which represents the current fair value of future net cash flows expected to be realized for performing the servicing activities. The Company stratifies these assets based on predominant risk characteristics, namely expected term of the underlying financial instruments, and uses a valuation model that calculates the present value of future cash flows to determine the fair value of servicing rights. MSRs are recorded in other assets at the lower of the initial capitalized amount, net of accumulated amortization or fair value. Mortgage loans serviced for others are not included in the accompanying consolidated statements of condition. The following table summarizes the changes in carrying value of MSRs and the associated valuation allowance: (000’s omitted) 2022 2021 Carrying value before valuation allowance at beginning of period $ 1,144 $ 1,430 Additions 83 233 Acquisitions 2,879 0 Amortization (801) (519) Carrying value before valuation allowance at end of period 3,305 1,144 Valuation allowance balance at beginning of period 0 (219) Impairment charges (676) (55) Impairment recoveries 0 274 Valuation allowance balance at end of period (676) 0 Net carrying value at end of period $ 2,629 $ 1,144 Fair value of MSRs at end of period $ 5,107 $ 1,469 Principal balance of mortgage loans sold during the year $ 5,309 $ 20,133 Principal balance of loans serviced for others $ 583,109 $ 296,506 Custodial escrow balances maintained in connection with loans serviced for others $ 10,534 $ 4,934 The following table summarizes the key economic assumptions used to estimate the value of the MSRs at December 31: 2022 2021 Weighted-average contractual life (in years) 21.6 21.4 Weighted-average constant prepayment rate (CPR) 7.7 % 24.5 % Weighted-average discount rate 4.9 % 2.6 % |
DEPOSITS
DEPOSITS | 12 Months Ended |
Dec. 31, 2022 | |
DEPOSITS | |
DEPOSITS | NOTE G: DEPOSITS Deposits recorded in the consolidated statements of condition consist of the following at December 31: (000’s omitted) 2022 2021 Noninterest checking $ 4,140,617 $ 3,921,663 Interest checking 3,231,096 3,201,225 Savings 2,433,922 2,255,961 Money market 2,299,965 2,603,988 Time 906,708 928,331 Total deposits $ 13,012,308 $ 12,911,168 Interest on deposits recorded in the consolidated statements of income consists of the following at December 31: (000’s omitted) 2022 2021 2020 Interest on interest checking $ 3,340 $ 1,142 $ 2,182 Interest on savings 671 598 665 Interest on money market 4,019 1,393 2,685 Interest on time 7,014 8,498 11,229 Total interest on deposits $ 15,044 $ 11,631 $ 16,761 The approximate maturities of time deposits at December 31, 2022 are as follows: Accounts $250,000 (000’s omitted) All Accounts or Greater 2023 $ 514,658 $ 67,302 2024 282,044 53,970 2025 63,554 5,472 2026 24,567 262 2027 21,796 2,075 Thereafter 89 0 Total $ 906,708 $ 129,081 |
BORROWINGS
BORROWINGS | 12 Months Ended |
Dec. 31, 2022 | |
BORROWINGS | |
BORROWINGS | NOTE H: BORROWINGS Outstanding borrowings at December 31 are as follows: (000’s omitted) 2022 2021 Subordinated notes payable, includes premium of $249 and $277, respectively $ 3,249 $ 3,277 Securities sold under agreement to repurchase, short term 346,652 324,720 Overnight borrowings 768,400 0 Other FHLB borrowings, includes discount of $319 and $0, respectively 19,474 1,888 Total borrowings $ 1,137,775 $ 329,885 FHLB advances are collateralized by a blanket lien on the Company’s residential real estate loan portfolio and various investment securities. Borrowings at December 31, 2022 have contractual maturity dates as follows: Weighted-average Carrying Rate at (000’s omitted, except rate) Value December 31, 2022 January 3, 2023 $ 1,115,052 3.32 % January 17, 2023 2,000 2.33 % February 8, 2023 190 1.79 % July 3, 2023 470 2.25 % October 23, 2023 364 1.50 % January 29, 2024 2,013 3.62 % January 7, 2025 4,951 2.78 % January 29, 2025 4,937 2.59 % February 28, 2025 1,923 1.38 % October 1, 2025 262 1.50 % March 1, 2027 1,858 1.55 % February 28, 2028 3,249 4.67 % March 1, 2029 506 2.50 % Total $ 1,137,775 3.30 % The weighted-average interest rate on borrowings for the years ended December 31, 2022 and 2021 was 1.61% and 0.48%, respectively. The Bank has unused lines of credit of $25.0 million at December 31, 2022. The Bank has unused borrowing capacity of approximately $1.08 billion through collateralized transactions with the FHLB and $490.5 million through collateralized transactions with the Federal Reserve. As of December 31, 2022, the Company does not sponsor any business trusts. The Company previously sponsored Community Capital Trust IV (“CCT IV”) until March 15, 2021 when the Company exercised its right to redeem all of the CCT IV debentures and associated preferred securities for a total of $77.3 million. The Company previously sponsored Steuben Statutory Trust II (“SST II”) until September 15, 2020 when the Company exercised its right to redeem all of the SST II debentures and associated preferred securities for a total of $2.1 million. The common stock of SST II was acquired in the Steuben acquisition. The trusts were formed for the purpose of issuing company-obligated mandatorily redeemable preferred securities to third-party investors and investing the proceeds from the sale of such preferred securities solely in junior subordinated debt securities of the Company. The debentures held by each trust were the sole assets of such trust. Distributions on the preferred securities issued by each trust were payable quarterly at a rate per annum equal to the interest rate being earned by the trust on the debentures held by that trust and were recorded as interest expense in the consolidated financial statements. The preferred securities were subject to mandatory redemption, in whole or in part, upon repayment of the debentures. The Company had entered into agreements which, taken collectively, fully and unconditionally guarantee the preferred securities subject to the terms of each of the guarantees. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2022 | |
INCOME TAXES | |
INCOME TAXES | NOTE I: INCOME TAXES The provision for income taxes for the years ended December 31 is as follows: (000’s omitted) 2022 2021 2020 Current: Federal $ 41,025 $ 35,507 $ 35,728 State and other 9,899 8,158 8,008 Deferred: Federal 1,163 5,493 (2,005) State and other 146 2,496 (331) Provision for income taxes $ 52,233 $ 51,654 $ 41,400 Components of the net deferred tax asset, included in other assets, as of December 31, 2022 and of the net deferred tax liability, included in other liabilities, as of December 31, 2021 are as follows: (000’s omitted) 2022 2021 Investment securities $ 191,953 $ 0 Allowance for credit losses 15,346 12,435 Employee benefits 5,775 7,708 Operating lease liabilities 7,552 7,955 Other, net 4,385 1,250 Deferred tax asset 225,011 29,348 Investment securities 0 7,227 Goodwill and intangibles 39,454 41,917 Operating lease right-of-use assets 7,303 7,693 Loan origination costs 9,731 8,993 Depreciation 96 535 Mortgage servicing rights 640 278 Pension 18,154 22,950 Deferred tax liability 75,378 89,593 Net deferred tax asset (liability) $ 149,633 $ (60,245) The Company has determined that no valuation allowance is necessary as it is more likely than not that the gross deferred tax assets will be realized through future reversals of existing temporary differences and through future taxable income. A reconciliation of the differences between the federal statutory income tax rate and the effective tax rate for the years ended December 31 is shown in the following table: 2022 2021 2020 Federal statutory income tax rate 21.0 % 21.0 % 21.0 % Increase (reduction) in taxes resulting from: Tax-exempt interest (1.3) (1.1) (1.5) State income taxes, net of federal benefit 3.3 3.6 3.0 Stock-based compensation (0.3) (0.9) (0.8) Federal tax credits (1.0) (1.0) (1.3) Other, net 0.0 (0.2) (0.3) Effective income tax rate 21.7 % 21.4 % 20.1 % As of December 31, 2022, 2021 and 2020, there was no amount of material unrecognized tax benefits that would impact the Company’s effective tax rate if recognized. It is reasonably possible that the amount of unrecognized tax benefits could change in the next twelve months as a result of various examinations and expiration of statutes of limitations on prior tax returns. The Company’s policy is to recognize interest and penalties related to unrecognized tax benefits as part of income taxes in the consolidated statements of income. The accrued interest related to tax positions was immaterial. The Company’s federal and state income tax returns are routinely subject to examination from various governmental taxing authorities. Such examinations may result in challenges to the tax return treatment applied by the Company to specific transactions. Management believes that the assumptions and judgment used to record tax-related assets or liabilities have been appropriate. Future examinations by taxing authorities of the Company’s federal or state tax returns could have a material impact on the Company’s results of operations. The Company’s federal income tax returns for years after 2018 may still be examined by the Internal Revenue Service. New York State income tax returns for years after 2017 may still be examined by the New York Department of Taxation and Finance. The Company is currently under examination by the New York Department of Taxation and Finance in connection with tax years 2015 to 2017, and has not received notice of proposed adjustments. It is not possible to estimate if and when those examinations may be completed. |
LIMITS ON DIVIDENDS AND OTHER R
LIMITS ON DIVIDENDS AND OTHER REVENUE SOURCES | 12 Months Ended |
Dec. 31, 2022 | |
LIMITS ON DIVIDENDS AND OTHER REVENUE SOURCES | |
LIMITS ON DIVIDENDS AND OTHER REVENUE SOURCES | NOTE J: LIMITS ON DIVIDENDS AND OTHER REVENUE SOURCES The Company’s ability to pay dividends to its shareholders is largely dependent on the Bank’s ability to pay dividends to the Company. In addition to the capital requirements discussed below, the circumstances under which the Bank may pay dividends are limited by federal statutes, regulations, and policies. For example, as a national bank, the Bank must obtain the approval of the OCC for payments of dividends if the total of all dividends declared in any calendar year would exceed the total of the Bank’s net profits, as defined by applicable regulations, for that year, combined with its retained net profits for the preceding two years. Furthermore, the Bank may not pay a dividend in an amount greater than its undivided profits then on hand after deducting its losses and bad debts, as defined by applicable regulations. At December 31, 2022, the Bank had approximately $173.1 million in undivided profits legally available for the payment of dividends. In addition, the Board of Governors of the Federal Reserve System (“FRB”) and the OCC are authorized to determine under certain circumstances that the payment of dividends would be an unsafe or unsound practice and to prohibit payment of such dividends. The FRB has indicated that banking organizations should generally pay dividends only out of current operating earnings. There are also statutory limits on the transfer of funds to the Company by its banking subsidiary, whether in the form of loans or other extensions of credit, investments or assets purchases. Such transfer by the Bank to the Company generally is limited in amount to 10% of the Bank’s capital and surplus, or 20% in the aggregate. Furthermore, such loans and extensions of credit are required to be collateralized in specific amounts. |
PENSION AND OTHER BENEFIT PLANS
PENSION AND OTHER BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2022 | |
PENSION AND OTHER BENEFIT PLANS | |
PENSION AND OTHER BENEFIT PLANS | NOTE K: PENSION AND OTHER BENEFIT PLANS Pension and post-retirement 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 Pension Benefits Post-retirement Benefits (000’s omitted) 2022 2021 2022 2021 Change in benefit obligation: Benefit obligation at the beginning of year $ 183,270 $ 190,361 $ 1,529 $ 1,718 Service cost 4,959 5,920 0 0 Interest cost 5,334 5,036 68 44 Plan amendment / acquisition 1,851 0 536 0 Participant contributions 0 0 0 0 Deferred actuarial (gain)/loss (31,759) (4,881) (306) (85) Benefits paid (12,294) (13,166) (171) (148) Benefit obligation at end of year 151,361 183,270 1,656 1,529 Change in plan assets: Fair value of plan assets at beginning of year 290,687 272,600 0 0 Actual return of plan assets (34,967) 27,614 0 0 Participant contributions 0 0 0 0 Employer contributions 906 3,639 171 148 Plan acquisition 0 0 0 0 Benefits paid (12,294) (13,166) (171) (148) Fair value of plan assets at end of year 244,332 290,687 0 0 Over/(Under) funded status at year end $ 92,971 $ 107,417 $ (1,656) $ (1,529) Amounts recognized in the consolidated statement of condition were: Other assets $ 106,986 $ 127,538 $ 0 $ 0 Other liabilities (14,015) (20,121) (1,656) (1,529) Amounts recognized in accumulated other comprehensive loss/(income) (“AOCI”) were: Net loss $ 38,894 $ 16,977 $ 255 $ 585 Net prior service cost (credit) 3,112 3,969 (728) (907) Pre-tax AOCI 42,006 20,946 (473) (322) Taxes (10,351) (5,236) 119 82 AOCI at year end $ 31,655 $ 15,710 $ (354) $ (240) The benefit obligation for the defined benefit pension plan was $137.3 million and $163.1 million as of December 31, 2022 and 2021, respectively, and the fair value of plan assets as of December 31, 2022 and 2021 was $244.3 million and $290.7 million, respectively. The defined benefit pension plan was amended effective December 31, 2022 to transfer certain obligations from the Company’s non-qualified supplemental pension plan, deferred compensation plan and Restoration Plan (as defined below) into the qualified defined benefit pension plan. The Company has unfunded supplemental pension plans for certain key active and retired executives. The projected benefit obligation for the unfunded supplemental pension plan for certain key executives was $14.0 million and $19.8 million for 2022 and 2021, respectively. The Company also has an unfunded stock balance plan for certain of its nonemployee directors. The projected benefit obligation for the unfunded stock balance plan was immaterial for 2022 and 2021, respectively. The Company has a non-qualified deferred compensation plan for certain employees (“Restoration Plan”) whose benefits under tax-qualified retirement plans are restricted by the Internal Revenue Code Section 401(a)(17) limitation on compensation. The projected benefit obligation for the unfunded Restoration Plan was immaterial for 2022 and Effective December 31, 2009, the Company terminated its post-retirement medical program for current and future employees. Remaining plan participants will include only existing retirees as of December 31, 2010. This change was accounted for as a negative plan amendment and a $3.5 million, net of income taxes, benefit for prior service was recognized in AOCI in 2009. This negative plan amendment is being amortized over the expected benefit utilization period of remaining plan participants. Amounts recognized in accumulated other comprehensive income, net of tax, for the year ended December 31, are as follows: Pension Benefits Post-retirement Benefits (000’s omitted) 2022 2021 2022 2021 Prior service cost/(credit) $ (648) $ (288) $ 135 $ 136 Net (gain) loss 16,593 (13,152) (249) (99) Total $ 15,945 $ (13,440) $ (114) $ 37 The weighted-average assumptions used to determine the benefit obligations as of December 31 are as follows: Pension Benefits Post-retirement Benefits 2022 2021 2022 2021 Discount rate 5.40 % 3.10 % 5.40 % 3.10 % Expected return on plan assets 6.70 % 6.70 % N/A N/A Rate of compensation increase 4.50% for 2023, 4.00% for 2022, % 3.50% for 2024 + 3.50% for 2023 + N/A N/A Interest crediting rates 6.00% while employed, 6.00% while employed, 3.55% after termination 1.94% after termination N/A N/A The net periodic benefit cost as of December 31 is as follows: Pension Benefits Post-retirement Benefits (000’s omitted) 2022 2021 2020 2022 2021 2020 Service cost $ 4,959 $ 5,920 $ 5,750 $ 0 $ 0 $ 0 Interest cost 5,334 5,036 5,657 68 44 57 Expected return on plan assets (19,025) (18,783) (16,306) 0 0 0 Plan amendment (556) 0 (637) 0 0 0 Amortization of unrecognized net loss 842 3,600 3,239 23 45 40 Amortization of prior service cost 615 379 241 (179) (179) (179) Net periodic (benefit) $ (7,831) $ (3,848) $ 2,056 $ (88) $ (90) $ (82) Prior service costs in which all or almost all of the plan’s participants are fully eligible for benefits under the plan are amortized on a straight-line basis over the expected future working years of all active plan participants. Unrecognized gains or losses are amortized using the “corridor approach”, which is the minimum amortization required. Under the corridor approach, the net gain or loss in excess of 10 percent of the greater of the projected benefit obligation or the market-related value of the assets is amortized on a straight-line basis over the expected future working years of all active plan participants. The weighted-average assumptions used to determine the net periodic pension cost for the years ended December 31 are as follows: Pension Benefits Post-retirement Benefits 2022 2021 2020 2022 2021 2020 Discount rate 3.10 % 2.80 % 3.50 % 3.10 % 2.80 % 3.60 % Expected return on plan assets 6.70 % 7.00 % 7.00 % N/A N/A N/A Rate of compensation 4.00% for 2022, increase 3.50% for 2023 + 3.50 % 3.50 % N/A N/A N/A Interest crediting rates 6.00% while employed, 6.00% while employed, 6.00% while employed, 1.94% after termination 1.42% after termination 2.16% after termination N/A N/A N/A The amount of benefit payments that are expected to be paid over the next ten years are as follows: Pension Post-retirement (000’s omitted) Benefits Benefits 2023 $ 11,583 $ 192 2024 11,965 154 2025 11,693 152 2026 12,934 150 2027 12,723 148 2028-2032 64,686 972 The payments reflect future service and are based on various assumptions including retirement age and form of payment (lump-sum versus annuity). Actual results may differ from these estimates. The assumed discount rate is used to reflect the time value of future benefit obligations. The discount rate was determined based upon the yield on high-quality fixed income investments expected to be available during the period to maturity of the pension benefits. This rate is sensitive to changes in interest rates. A decrease in the discount rate would increase the Company’s obligation and future expense while an increase would have the opposite effect. The expected long-term rate of return was estimated by taking into consideration asset allocation, long-term capital market assumptions, reviewing historical returns on the type of assets held and current economic factors. The mortality tables used to determine future benefit obligations under the plan as of December 31, 2021 were the sex-distinct Pri-2012 Mortality Tables for employees, healthy annuitants and contingent survivors, adjusted for mortality improvements using Scale MP-2021 mortality improvement scale on a generational basis. The appropriateness of the assumptions are reviewed annually. Plan Assets The investment objective for the defined benefit pension plan is to achieve an average annual total return over a five-year period equal to the assumed rate of return used in the actuarial calculations. At a minimum performance level, the portfolio should earn the return obtainable on high quality intermediate-term bonds. The Company’s perspective regarding portfolio assets combines both preservation of capital and moderate risk-taking. Asset allocation favors fixed income securities, with a target allocation of approximately 60% equity securities and 40% fixed income securities and money market funds. Due to the volatility in the market, the target allocation is not always desirable and asset allocations will fluctuate between acceptable ranges. Prohibited transactions include purchase of securities on margin, uncovered call options, and short sale transactions. The fair values of the Company’s defined benefit pension plan assets at December 31, 2022 by asset category are as follows: Quoted Prices in Active Significant Significant Markets for Observable Unobservable Identical Assets Inputs Inputs Asset category (000’s omitted) Level 1 Level 2 Level 3 Total Cash equivalents $ 18,625 $ 0 $ 0 $ 18,625 Equity securities: U.S. large-cap 52,682 0 0 52,682 U.S. mid/small cap 16,432 0 0 16,432 CBU common stock 6,427 0 0 6,427 International 51,725 0 0 51,725 Other 1,273 0 0 1,273 128,539 0 0 128,539 Fixed income securities: Government securities 44,995 11,567 0 56,562 Investment grade bonds 12,964 5,538 0 18,502 High yield (a) 7,134 0 0 7,134 65,093 17,105 0 82,198 Other investments (b) 14,342 0 0 14,342 Total (c) $ 226,599 $ 17,105 $ 0 $ 243,704 The fair values of the Company’s defined benefit pension plan assets at December 31, 2021 by asset category are as follows: Quoted Prices in Active Significant Significant Markets for Observable Unobservable Identical Assets Inputs Inputs Asset category (000’s omitted) Level 1 Level 2 Level 3 Total Cash equivalents $ 19,605 $ 0 $ 0 $ 19,605 Equity securities: U.S. large-cap 75,180 0 0 75,180 U.S. mid/small cap 12,052 0 0 12,052 CBU common stock 7,604 0 0 7,604 International 73,891 0 0 73,891 Other 1,091 0 0 1,091 169,818 0 0 169,818 Fixed income securities: Government securities 19,988 5,974 0 25,962 Investment grade bonds 41,374 136 0 41,510 High yield (a) 8,625 0 0 8,625 69,987 6,110 0 76,097 Other investments (b) 24,727 0 0 24,727 Total (c) $ 284,137 $ 6,110 $ 0 $ 290,247 (a) This category is exchange-traded funds representing a diversified index of high yield corporate bonds. (b) This category is comprised of exchange-traded funds and mutual funds holding non-traditional investment classes including private equity funds and alternative exchange funds. (c) Excludes dividends and interest receivable totaling $0.6 million and $0.4 million at December 31, 2022 and 2021, respectively. The valuation techniques used to measure fair value for the items in the table above are as follows: ● Money market funds - Managed portfolios, including commercial paper and other fixed income securities issued by U.S. and foreign corporations, asset-backed commercial paper, U.S. government securities, obligations of foreign governments and U.S. and foreign banks, which are valued at the closing price reported on the market on which the underlying securities are traded. ● Equity securities and other investments – Mutual funds, equity securities and common stock of the Company which are valued at the quoted market price of shares held at year-end. ● Fixed income securities - U.S. Treasuries, municipal bonds and notes, government sponsored entities, and corporate debt valued at the closing price reported on the active market on which the individual securities are traded or for municipal bonds and notes based on quoted prices for similar assets in the active market. The Company makes contributions to its funded qualified pension plan as required by government regulation or as deemed appropriate by management after considering the fair value of plan assets, expected return on such assets, and the value of the accumulated benefit obligation. The Company made a million contribution to its defined benefit pension plan in 2022 and 2021, respectively. The Company funds the payment of benefit obligations for the supplemental pension and post-retirement plans because such plans do not hold assets for investment. 401(k) Employee Stock Ownership Plan The Company has a 401(k) Employee Stock Ownership Plan in which employees can contribute from 1% to 90% of eligible compensation, with the first 3% being eligible for a 100% matching contribution in the form of Company common stock and the next 3% being eligible for a 50% matching contributions in the form of Company common stock. The expense recognized under this plan for the years ended December 31, 2022, 2021 and 2020 was $7.1 million, $6.9 million, and $6.3 million, respectively. Effective January 1, 2010, the defined benefit pension plan was modified to a new plan design that includes an interest credit contribution to be made to the 401(k) plan. The expense recognized for this interest credit contribution for the years ended December 31, 2022, 2021, and 2020 was $1.4 million, $1.1 million, and $0.9 million, respectively. The Company acquired Fringe Benefits Design of Minnesota, Inc. 401(k) Profit Sharing Plan with the FBD acquisition and The Steuben Trust Company 401(k) Plan with the Steuben acquisition. Effective January 1, 2022 and January 1, 2021, the Fringe Benefits Design of Minnesota, Inc. 401(k) Profit Sharing Plan and the Steuben Trust Company 401(k) Plan were merged into and became part of the Community Bank System, Inc. 401(k) Employee Stock Ownership Plan, respectively. Other Deferred Compensation Arrangements In addition to the supplemental pension plans for certain executives, the Company has nonqualified deferred compensation arrangements for several former directors, officers and key employees. All benefits provided under these plans are unfunded and payments to plan participants are made by the Company. At December 31, 2022 and 2021, the Company has recorded a liability of $4.5 million and $5.1 million, respectively. The expense recognized under these plans for the years ended December 31, 2022, 2021, and 2020 was approximately $0.2 million, $0.2 million, and $0.4 million, respectively. Deferred Compensation Plans for Directors Directors of the Company may defer all or a portion of their director fees under the Deferred Compensation Plan for Directors. Under this plan, there is a separate account for each participating director which is credited with the amount of shares that could have been purchased with the director’s fees as well as any dividends on such shares. On the distribution date, the director will receive common stock equal to the accumulated share balance in their account. As of December 31, 2022 and 2021, there were 136,256 and 137,945 shares credited to the participants’ accounts, for which a liability of $5.5 million and $5.1 million was accrued, respectively. The expense recognized under the plan for the years ended December 31, 2022, 2021 and 2020, was $0.2 million, $0.2 million, and $0.2 million, respectively. The Company acquired deferred compensation plans for certain non-employee directors and trustees of Merchants Bancshares, Inc. (“Merchants”). Under the terms of these acquired deferred compensation plans, participating directors could elect to have all, or a specified percentage, of their Merchants director’s fees for a given year paid in the form of cash or deferred in the form of restricted shares of Merchants’ common stock. Directors who elected to have their compensation deferred were credited with a number of shares of Merchants’ common stock equal in value to the amount of fees deferred. These shares were converted to shares of Company stock in connection with the acquisition and are held in a rabbi trust. The shares held in the rabbi trust are considered outstanding for purposes of computing earnings per share. The participating director may not sell, transfer or otherwise dispose of these shares prior to distribution. With respect to shares of common stock issued or otherwise transferred to a participating director, the participating director has the right to receive dividends or other distributions thereon. |
STOCK-BASED COMPENSATION PLANS
STOCK-BASED COMPENSATION PLANS | 12 Months Ended |
Dec. 31, 2022 | |
STOCK-BASED COMPENSATION PLANS | |
STOCK-BASED COMPENSATION PLANS | NOTE L: STOCK-BASED COMPENSATION PLANS The Company has a long-term incentive program for directors, officers and employees. Under this program, the Company initially authorized four Nonqualified Stock Options The Company recognized stock-based compensation expense related to non-qualified stock options of $2.9 million, $2.6 million and $2.7 million for the years ended December 31, 2022, 2021 and 2020, respectively. A related income tax benefit was recognized of The nonqualified (offset) stock options in its Director’s Stock Balance Plan vest and become exercisable immediately and expire one year after the date the director retires or two years in the event of death. The remaining options have a ten-year term, and vest and become exercisable on a grant-by-grant basis, ranging from immediate vesting to ratably over a five-year period. Activity in this long-term incentive program is as follows: Stock Options Weighted- average Exercise Outstanding Price of Shares Outstanding at December 31, 2020 1,542,259 $ 45.49 Granted 168,976 79.68 Exercised (310,423) 40.17 Forfeited (8,107) 61.56 Outstanding at December 31, 2021 1,392,705 50.73 Granted 173,313 71.78 Exercised (67,566) 41.61 Forfeited (13,430) 67.88 Outstanding at December 31, 2022 1,485,022 53.45 Exercisable at December 31, 2022 1,005,851 $ 47.31 The following table summarizes the information about stock options outstanding under the Company’s stock option plan at December 31, 2022: Options outstanding Options exercisable Weighted- Weighted- Weighted- average average average Exercise Remaining Exercise Range of Exercise Price Shares Price Life (years) Shares Price $0.00 – $25.00 40,002 $ 23.04 4.00 40,002 $ 23.04 $25.01 – $35.00 51,744 29.79 0.21 51,744 29.79 $35.01 – $45.00 386,999 37.07 2.45 386,999 37.07 $45.01 – $55.00 674,921 55.55 5.86 472,240 56.06 $55.01 – $81.00 331,356 75.67 8.68 54,866 78.44 TOTAL 1,485,022 $ 47.31 5.35 1,005,851 $ 47.31 The weighted-average remaining contractual term of outstanding and exercisable stock options at December 31, 2022 is 5.35 years and 4.14 years, respectively. The aggregate intrinsic value of outstanding and exercisable stock options at December 31, 2022 is $18.3 million and $16.6 million, respectively. Management estimated the fair value of options granted using the Black-Scholes option-pricing model . This model was originally developed to estimate the fair value of exchange-traded equity options, which (unlike employee stock options) have no vesting period or transferability restrictions. As a result, the Black-Scholes model is not necessarily a precise indicator of the value of an option, but it is commonly used for this purpose. The Black-Scholes model requires several assumptions, which management developed based on historical trends and current market observations. Expected volatilities are based on historical volatilities of the Company’s common stock. The Company uses historical data to estimate option exercise and post-vesting termination behavior. The expected term of options granted is based on historical data and represents the period of time that options granted are expected to be outstanding, which takes into account that the options are not transferable. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. 2022 2021 2020 Weighted-average Fair Value of Options Granted $ 17.86 $ 18.43 $ 10.86 Assumptions: Weighted-average expected life (in years) 6.50 6.50 6.50 Future dividend yield 2.41 % 2.48 % 2.57 % Share price volatility 29.88 % 30.09 % 29.29 % Weighted-average risk-free interest rate 2.16 % 1.28 % 0.67 % Unrecognized stock-based compensation expense related to non-vested stock options totaled $5.6 million at December 31, 2022. The weighted-average period over which this unrecognized expense would be recognized is 3.2 years. The total fair value of stock options vested during 2022, 2021, and 2020 were $2.7 million, $2.5 million and $2.5 million, respectively. During the 12 months ended December 31, 2022 and 2021, proceeds from stock option exercises totaled $3.2 million and $14.2 million, respectively, and the related tax benefits from exercise were approximately $0.3 million and $1.8 million, respectively. During the twelve months ended December 31, 2022 and 2021, approximately 0.06 million and 0.3 million shares, respectively, were issued in connection with stock option exercises each year. The total intrinsic value of options exercised during 2022, 2021 and 2020 were $2.0 million, $10.3 million and $6.6 million, respectively. Restricted Stock Awards Compensation expense is recognized over the vesting period of the awards based on the fair value of the Company’s stock at grant date. The Company recognized stock-based compensation expense related to restricted stock vesting recognized in the income statement for 2022, 2021 and 2020 was approximately million, respectively. The fair value of restricted stock awards is based on the end-of-day share price of the Company’s stock on the grant date. Restricted stock awards granted prior to 2022 vest ratably over a period. During the forfeiture period, shares that have not been forfeited have the right to vote and the right to receive dividends. A summary of the status of the Company’s unvested restricted stock awards as of December 31, 2022, and changes during the twelve months ended December 31, 2022 and 2021, is presented below: Restricted Weighted-average Shares grant date fair value Unvested at December 31, 2020 127,432 $ 53.97 Awards 51,456 79.51 Forfeitures (2,041) 55.39 Vestings (47,399) 53.13 Unvested at December 31, 2021 129,448 64.32 Awards 56,871 71.58 Forfeitures (2,940) 67.44 Vestings (49,859) 62.86 Unvested at December 31, 2022 133,520 $ 67.89 Unrecognized stock-based compensation expense related to unvested restricted stock totaled $6.4 million at December 31, 2022, which will be recognized as expense over the next three or five years according to the awards vesting schedule. The weighted-average period over which this unrecognized expense would be recognized is 2.4 years. The total fair value of restricted stock vested during 2022, 2021, and 2020 were $3.1 million, $2.5 million and $2.7 million, respectively. Performance Awards The long-term incentive program provides for the issuance of shares of performance award restricted stock to officers and key employees. There are . Compensation expense is recognized over the vesting period of the awards based on the fair value of the stock at issue date. Management estimated the fair value of the stock granted under performance criteria (1) using the Monte Carlo Simulation and stock granted under performance criteria (2) using the grant date fair value. Performance shares cliff vest based on performance results for a payout under the terms of the plan for the different performance sets. At each reporting period, the Company will reassess the likelihood of achieving the performance criteria and will adjust compensation expense as needed. The shares have voting rights. Upon vesting of the performance shares, any dividends declared during the vesting period will be paid based on the shares vested. Total shares issuable under the plan are Performance Restricted Weighted-average Shares grant date fair value Unvested at December 31, 2020 48,976 $ 29.71 Awards 0 0.00 Forfeitures (578) 29.71 Vestings (578) 29.71 Unvested at December 31, 2021 47,820 29.71 Awards 35,815 34.93 Forfeitures (51,000) 30.02 Vestings (636) 35.89 Unvested at December 31, 2022 31,999 $ 34.93 Unrecognized stock-based compensation expense related to unvested performance restricted stock totaled $0.7 million at December 31, 2022, which will be recognized as expense over the next three years . The weighted-average period over which this unrecognized expense would be recognized is 2.0 years |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2022 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | NOTE M: 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 December 31, 2022. 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 December 31, 2022 weighted-average anti-dilutive stock options outstanding were immaterial and were 0.1 million and 0.6 million at December 31, 2021 and 2020, respectively, which were not included in the computation below. The following is a reconciliation of basic to diluted earnings per share for the years ended December 31, 2022, 2021 and 2020. (000’s omitted, except per share data) 2022 2021 2020 Net income $ 188,081 $ 189,694 $ 164,676 Income attributable to unvested stock-based compensation awards (533) (445) (514) Income available to common shareholders $ 187,548 $ 189,249 $ 164,162 Weighted-average common shares outstanding – basic 53,896 53,977 52,969 Basic earnings per share $ 3.48 $ 3.51 $ 3.10 Net income $ 188,081 $ 189,694 $ 164,676 Income attributable to unvested stock-based compensation awards (533) (445) (514) Income available to common shareholders $ 187,548 $ 189,249 $ 164,162 Weighted-average common shares outstanding 53,896 53,977 52,969 Assumed exercise of stock options 312 423 352 Weighted-average common shares outstanding – diluted 54,208 54,400 53,321 Diluted earnings per share $ 3.46 $ 3.48 $ 3.08 Cash dividends declared per share $ 1.74 $ 1.70 $ 1.66 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. 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. |
COMMITMENTS, CONTINGENT LIABILI
COMMITMENTS, CONTINGENT LIABILITIES AND RESTRICTIONS | 12 Months Ended |
Dec. 31, 2022 | |
COMMITMENTS, CONTINGENT LIABILITIES AND RESTRICTIONS | |
COMMITMENTS, CONTINGENT LIABILITIES AND RESTRICTIONS | NOTE N: 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 at December 31: (000’s omitted) 2022 2021 Commitments to extend credit $ 1,486,791 $ 1,443,879 Standby letters of credit 57,347 42,684 Total $ 1,544,138 $ 1,486,563 The Company is typically required to maintain a reserve balance, as established by the FRB. Effective on March 26, 2020, the FRB reduced this cash reserve requirement to zero percent. As a result, the Company had no required reserve as of December 31, 2022 and 2021. 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 December 31, 2022, 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. The Company recorded $3.0 million in litigation accrual in 2020 related to a settlement of a purported class action lawsuit regarding the Bank’s deposit account terms and overdraft disclosures. The Company executed a settlement agreement with respect to the lawsuit in the fourth quarter of 2020 providing for a release of all claims asserted by class members in the action, and the Company does not anticipate that additional amounts will be accrued for this matter in future periods. Notice of the settlement terms was provided to all class members and no objections to the settlement were received prior to expiration of the notice period. The hearing for final Court approval of the settlement took place on August 25, 2021 and the settlement was approved for $2.9 million which was paid in the third quarter of 2021, resulting in a $0.1 million adjustment to the Company’s litigation accrual. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2022 | |
LEASES | |
LEASES | NOTE O: LEASES The Company has operating leases for certain offices and certain equipment. These leases have remaining terms that range from less than one year to 12 years. Options to extend the leases range from a single extension option of one year to multiple extension options for up to 40 years. Certain agreements include an option to terminate the lease within one year. The components of lease expense are as follows: (000’s omitted) 2022 2021 2020 Operating lease cost $ 8,568 $ 8,397 $ 9,000 Variable lease cost 108 50 53 Short-term lease cost (1) 65 148 369 Total lease cost $ 8,741 $ 8,595 $ 9,422 (1) Supplemental cash flow information related to leases is as follows: (000’s omitted) 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows for operating leases $ 8,402 $ 8,203 Right-of-use assets obtained in exchange for lease obligations: Operating leases 6,758 5,344 Supplemental balance sheet information related to leases is as follows: (000’s omitted, except lease term and discount rate) 2022 2021 Operating leases Operating lease right-of-use assets $ 30,069 $ 31,754 Operating lease liabilities 31,091 32,833 Weighted average remaining lease term Operating leases 4.9 years 5.4 years Weighted average discount rate Operating leases 2.89 % 2.62 % Maturities of lease liabilities as of December 31, 2022 are as follows: (000’s omitted) Operating Leases 2023 $ 8,995 2024 7,579 2025 5,992 2026 4,180 2027 2,547 Thereafter 4,333 Total lease payments 33,626 Less imputed interest (2,535) Total $ 31,091 Maturities of lease liabilities as of December 31, 2021 are as follows: (000’s omitted) Operating Leases 2022 $ 8,729 2023 7,640 2024 5,920 2025 4,401 2026 3,062 Thereafter 5,846 Total lease payments 35,598 Less imputed interest (2,765) Total $ 32,833 Included in the Company’s operating leases are related party leases where BPAS-APS and OneGroup, subsidiaries of the Company, lease office space from 706 North Clinton, LLC (“706 North Clinton”), an entity the Company holds a 50% membership interest in through its subsidiary OPFC II. As of December 31, 2022, the operating lease right-of-use assets and operating lease liabilities associated with these related party leases total $3.6 million and $3.6 million, respectively. As of December 31, 2021, the operating lease right-of-use assets and operating lease liabilities associated with these related party leases total $4.0 million and $4.1 million, respectively. As of December 31, 2022, the weighted average remaining lease term and weighted average discount rate for the Company’s related party leases are 7.0 years and 3.68%, respectively. As of December 31, 2021, the weighted average remaining lease term and weighted average discount rate for the Company’s related party leases are 8.0 years and 3.68%, respectively. The maturities of the Company’s related party lease liabilities as of December 31, 2022 are as follows: (000’s omitted) 706 North Clinton, LLC 2023 $ 591 2024 591 2025 605 2026 615 2027 506 Thereafter 1,221 Total lease payments 4,129 Less imputed interest (493) Total $ 3,636 The maturities of the Company’s related party lease liabilities as of December 31, 2021 are as follows: (000’s omitted) 706 North Clinton, LLC 2022 $ 591 2023 591 2024 591 2025 605 2026 614 Thereafter 1,727 Total lease payments 4,719 Less imputed interest (633) Total $ 4,086 As of December 31, 2022, the Company has four additional operating leases for office spaces that have not yet commenced with a weighted average lease term of 11.9 years. Upon commencements, lease right-of-use assets and lease liabilities |
REGULATORY MATTERS
REGULATORY MATTERS | 12 Months Ended |
Dec. 31, 2022 | |
REGULATORY MATTERS | |
REGULATORY MATTERS | NOTE P: REGULATORY MATTERS The Company and the Bank are subject to various regulatory capital requirements administered by federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of the Company’s and the Bank’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Company’s and the Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Management believes, as of December 31, 2022, that the Company and Bank meet all applicable capital adequacy requirements. The Company and the Bank are required to maintain a “capital conservation buffer,” composed entirely of common equity Tier 1 capital, in addition to minimum risk-based capital ratios. The required capital conservation buffer is 2.50% for both 2022 and 2021. Therefore, to satisfy both the minimum risk-based capital ratios and the capital conservation buffer in 2022 and 2021, the Company and the Bank must maintain: (i) Common equity Tier 1 capital to total risk-weighted assets of at least 7.0%, (ii) Tier 1 capital to total risk-weighted assets of at least 8.5%, and (iii) Total capital (Tier 1 capital plus Tier 2 capital) to total risk-weighted assets of at least 10.5%. As of December 31, 2022 and 2021, the amounts, ratios and requirements for the Company are presented below. As of December 31, 2022, the OCC categorized the Company and Bank as “well capitalized” under the regulatory framework for prompt corrective action. For capital adequacy To be well-capitalized For capital adequacy purposes plus Capital under prompt Actual purposes Conservation Buffer corrective action (000’s omitted) Amount Ratio Amount Ratio Amount Ratio Amount Ratio Community Bank System, Inc.: 2022 Tier 1 Leverage ratio $ 1,381,598 8.79 % $ 628,485 4.00 % $ 785,606 5.00 % Tier 1 risk-based capital 1,381,598 15.71 % 527,695 6.00 % $ 747,568 8.50 % 703,593 8.00 % Total risk-based capital 1,442,529 16.40 % 703,593 8.00 % 923,466 10.50 % 879,491 10.00 % Common equity tier 1 capital 1,381,439 15.71 % 395,771 4.50 % 615,644 7.00 % 571,669 6.50 % 2021 Tier 1 Leverage ratio $ 1,331,368 9.09 % $ 585,594 4.00 % $ 731,993 5.00 % Tier 1 risk-based capital 1,331,368 18.60 % 429,559 6.00 % $ 608,542 8.50 % 572,746 8.00 % Total risk-based capital 1,380,458 19.28 % 572,746 8.00 % 751,729 10.50 % 715,932 10.00 % Common equity tier 1 capital 1,331,259 18.60 % 322,169 4.50 % 501,152 7.00 % 465,356 6.50 % Community Bank, N.A.: 2022 Tier 1 Leverage ratio $ 1,122,639 7.26 % $ 618,874 4.00 % $ 773,593 5.00 % Tier 1 risk-based capital 1,122,639 12.86 % 523,733 6.00 % $ 741,955 8.50 % 698,311 8.00 % Total risk-based capital 1,183,570 13.56 % 698,311 8.00 % 916,533 10.50 % 872,889 10.00 % Common equity tier 1 capital 1,122,480 12.86 % 392,800 4.50 % 611,022 7.00 % 567,378 6.50 % 2021 Tier 1 Leverage ratio $ 1,058,091 7.26 % $ 582,631 4.00 % $ 728,289 5.00 % Tier 1 risk-based capital 1,058,091 14.92 % 425,393 6.00 % $ 602,640 8.50 % 567,190 8.00 % Total risk-based capital 1,107,181 15.62 % 567,190 8.00 % 744,437 10.50 % 708,988 10.00 % Common equity tier 1 capital 1,057,982 14.92 % 319,045 4.50 % 496,292 7.00 % 460,842 6.50 % |
PARENT COMPANY STATEMENTS
PARENT COMPANY STATEMENTS | 12 Months Ended |
Dec. 31, 2022 | |
PARENT COMPANY STATEMENTS | |
PARENT COMPANY STATEMENTS | NOTE Q: PARENT COMPANY STATEMENTS The condensed statements of condition of the parent company, Community Bank System, Inc., at December 31 are as follows: (000's omitted) 2022 2021 Assets: Cash and cash equivalents $ 160,045 $ 154,374 Investment securities 7,881 8,679 Investment in and advances to: Bank subsidiary 1,194,314 1,721,520 Non-bank subsidiaries 207,172 232,096 Other assets 17,106 18,462 Total assets $ 1,586,518 $ 2,135,131 Liabilities and shareholders' equity: Accrued interest and other liabilities $ 31,564 $ 31,047 Borrowings 3,249 3,277 Shareholders' equity 1,551,705 2,100,807 Total liabilities and shareholders' equity $ 1,586,518 $ 2,135,131 The condensed statements of income of the parent company for the years ended December 31 is as follows: (000's omitted) 2022 2021 2020 Revenues: Dividends from subsidiaries: Bank subsidiary $ 53,000 $ 125,000 $ 105,000 Non-bank subsidiaries 55,000 14,000 13,500 Interest and dividends on investments 342 245 168 Total revenues 108,342 139,245 118,668 Expenses: Interest on borrowings 153 446 2,546 Acquisition expenses 0 0 450 Gain on debt extinguishment 0 0 (421) Other expenses 6,091 5,717 4,945 Total expenses 6,244 6,163 7,520 Income before tax benefit and equity in undistributed net income of subsidiaries 102,098 133,082 111,148 Income tax benefit 2,942 3,964 3,739 Income before equity in undistributed net income of subsidiaries 105,040 137,046 114,887 Equity in undistributed net income of subsidiaries 83,041 52,648 49,789 Net income $ 188,081 $ 189,694 $ 164,676 Other comprehensive (loss) income, net of tax: Changes in other comprehensive (loss) income related to pension and other post retirement obligations (15,831) 13,403 6,009 Changes in other comprehensive (loss) income related to unrealized (losses) gains on investment securities (619,981) (126,107) 66,294 Other comprehensive (loss) income (635,812) (112,704) 72,303 Comprehensive (loss) income $ (447,731) $ 76,990 $ 236,979 The statements of cash flows of the parent company for the years ended December 31 is as follows: (000's omitted) 2022 2021 2020 Operating activities: Net income $ 188,081 $ 189,694 $ 164,676 Adjustments to reconcile net income to net cash provided by operating activities Equity in undistributed net income of subsidiaries (83,041) (52,648) (49,789) Net change in other assets and other liabilities 2,155 (3,050) 1,740 Net cash provided by operating activities 107,195 133,996 116,627 Investing activities: Purchases of investment securities (175) (5,173) (3,000) Cash paid for acquisitions, net of cash acquired of $0, $0, and $448, respectively 0 0 (20,892) (Capital contributions to)/Return of capital from 0 (12,918) 2 Net cash used in investing activities (175) (18,091) (23,890) Financing activities: Repayment of advances from subsidiaries (506) (482) (482) Repayment of borrowings 0 (77,320) (12,062) Issuance of common stock 8,922 16,155 22,211 Purchase of treasury stock (16,614) (5,106) (271) Sale of treasury stock 0 0 85 Increase in deferred compensation arrangements 236 252 271 Cash dividends paid (93,387) (91,051) (87,131) Net cash used in financing activities (101,349) (157,552) (77,379) Change in cash and cash equivalents 5,671 (41,647) 15,358 Cash and cash equivalents at beginning of year 154,374 196,021 180,663 Cash and cash equivalents at end of year $ 160,045 $ 154,374 $ 196,021 Supplemental disclosures of cash flow information: Cash paid for interest $ 180 $ 560 $ 2,555 Supplemental disclosures of noncash financing activities: Dividends declared and unpaid $ 23,763 $ 23,235 $ 22,695 Advances from subsidiaries 506 482 932 Common stock issued for acquisition 0 0 76,942 |
FAIR VALUE
FAIR VALUE | 12 Months Ended |
Dec. 31, 2022 | |
FAIR VALUE | |
FAIR VALUE | NOTE R: FAIR VALUE Accounting standards establish a framework for measuring fair value and require certain disclosures about such fair value instruments. It defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e. exit price). Inputs used to measure fair value are classified into the following hierarchy: ● ● ● A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The following tables set forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis. There were no transfers between any of the levels for the periods presented. 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 December 31, 2021 Total Fair (000’s omitted) Level 1 Level 2 Level 3 Value Available-for-sale investment securities: U.S. Treasury and agency securities $ 3,900,924 $ 97,640 $ 0 $ 3,998,564 Obligations of state and political subdivisions 0 430,289 0 430,289 Government agency mortgage-backed securities 0 477,056 0 477,056 Corporate debt securities 0 7,962 0 7,962 Government agency collateralized mortgage obligations 0 20,339 0 20,339 Total available-for-sale investment securities 3,900,924 1,033,286 0 4,934,210 Equity securities 463 0 0 463 Commitments to originate real estate loans for sale 0 0 51 51 Forward sales commitments 0 32 0 32 Interest rate swap agreements asset 0 296 0 296 Interest rate swap agreements liability 0 (3) 0 (3) Total $ 3,901,387 $ 1,033,611 $ 51 $ 4,935,049 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 C for further disclosure of the fair value of investment securities. ● 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. December 31, 2022 December 31, 2021 Total Fair Total Fair (000's omitted) Level 1 Level 2 Level 3 Value Level 1 Level 2 Level 3 Value Individually assessed loans $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 1,820 $ 1,820 Other real estate owned 0 0 503 503 0 0 718 718 Mortgage servicing rights 0 0 1,169 1,169 0 0 810 810 Contingent consideration 0 0 (2,800) (2,800) 0 0 (3,100) (3,100) Total $ 0 $ 0 $ (1,128) $ (1,128) $ 0 $ 0 $ 248 $ 248 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 estimated 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 December 31, 2022, 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 December 31, 2022. There was no 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 evaluates goodwill for impairment on an annual basis, or more often if events or circumstances indicate there may be impairment. The fair value of each reporting unit is compared to the carrying amount of that reporting unit in order to determine if impairment is indicated. If so, the implied fair value of the reporting unit’s goodwill is compared to its carrying amount and the impairment loss is measured by the excess of the carrying value of the goodwill over fair value of the goodwill. In such situations, the Company performs a discounted cash flow modeling technique that requires management to make estimates regarding the amount and timing of expected future cash flows of the assets and liabilities of the reporting unit that enable the Company to calculate the implied fair value of the goodwill. It also requires use of a discount rate that reflects the current return expectation of the market in relation to present risk-free interest rates, expected equity market premiums, peer volatility indicators and company-specific risk indicators. The Company did not recognize an impairment charge during 2022 or 2021. 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. Significant Significant Unobservable Valuation Unobservable Input Range (000's omitted, except per loan data) Fair Value Technique 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 fair value of assets classified as Level 3 on a recurring or non-recurring basis as of December 31, 2021 are as follows: Significant Significant Unobservable Valuation Unobservable Input Range (000's omitted, except per loan data) Fair Value Technique Inputs (Weighted Average) Individually assessed loans $ 1,820 Fair value of collateral Estimated cost of disposal/market adjustment 9.0% - 43.1% (43.1%) Other real estate owned 718 Fair value of collateral Estimated cost of disposal/market adjustment 31.8% - 42.3% (33.3%) Commitments to originate real estate loans for sale 51 Discounted cash flow Embedded servicing value 1.0 % Mortgage servicing rights 810 Discounted cash flow Weighted average constant prepayment rate 6.4% - 15.2% (14.0%) Weighted average discount rate 2.3% - 2.7% (2.6%) Adequate compensation $7/loan Contingent consideration (3,100) Discounted cash flow Discount rate 1.4% - 1.7% (1.5%) Probability adjusted level of retained revenue $3.0 million - $5.8 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 individually assessed loans was calculated by dividing the total of the book value of the collateral of the individually assessed loans classified as Level 3 by the total of the fair value of the collateral of the individually assessed loans classified as Level 3. 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 December 31, 2022 and December 31, 2021 are as follows: December 31, 2022 December 31, 2021 Carrying Carrying (000’s omitted) Value Fair Value Value Fair Value Financial assets: Net loans $ 8,748,335 $ 8,696,185 $ 7,323,770 $ 7,523,024 Held-to-maturity securities 1,079,695 1,034,795 0 0 Financial liabilities: Deposits 13,012,308 12,981,487 12,911,168 12,911,197 Overnight borrowings 768,400 768,400 0 0 Securities sold under agreement to repurchase, short-term 346,652 346,652 324,720 324,720 Other Federal Home Loan Bank borrowings 19,474 19,377 1,888 1,907 Subordinated notes payable 3,249 3,249 3,277 3,277 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 Federal Home Loan Bank 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. |
VARIABLE INTEREST ENTITIES
VARIABLE INTEREST ENTITIES | 12 Months Ended |
Dec. 31, 2022 | |
VARIABLE INTEREST ENTITIES | |
VARIABLE INTEREST ENTITIES | NOTE S: VARIABLE INTEREST ENTITIES The Company’s wholly-owned subsidiary CCT IV was a VIE for which the Company was not the primary beneficiary. Accordingly, the accounts of this entity were not included in the Company’s consolidated financial statements. On March 15, 2021, the Company exercised its right to redeem all of the CCT IV debentures and associated preferred securities. See further information regarding CCT IV in Note H: Borrowings. In connection with the Company’s acquisition of Oneida Financial Corp, the Company acquired OPFC II which holds a 50% membership interest in 706 North Clinton, an entity formed for the purpose of acquiring and rehabilitating real property. The real property held by 706 North Clinton is principally occupied by subsidiaries of the Company. The Company analyzed the operating agreement and capital structure of 706 North Clinton and determined that it was the primary beneficiary and therefore should consolidate 706 North Clinton in its financial statements. This conclusion was based on the determination that the Company has a de facto agency relationship because of the financing arrangement between the other member of 706 North Clinton and the Bank which provides OPFC II with both the power to direct the activities of 706 North Clinton and the obligation to absorb any losses of 706 North Clinton. The carrying amount of the assets and liabilities of 706 North Clinton and the classification of these assets and liabilities in the Company’s consolidated statements of condition at December 31 is as follows: (000’s omitted) 2022 2021 Cash and cash equivalents $ 226 $ 198 Premises and equipment, net 5,455 5,618 Other assets 65 57 Total assets $ 5,746 $ 5,873 Accrued interest and other liabilities / Total liabilities $ 0 $ 0 In addition to the assets and liabilities of 706 North Clinton, the minority interest in 706 North Clinton of $2.9 million at December 31, 2022 is included in the Company’s consolidated statements of condition. The creditors of 706 North Clinton do not have a claim on the general assets of the Company. The Company’s maximum loss exposure net of minority interest in 706 North Clinton is approximately $4.0 million as of December 31, 2022, including a $1.1 million loss exposure related to the financing agreement between the other member of 706 North Clinton and the Bank. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2022 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | NOTE T: 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. 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 operating subsidiaries of BPAS, BPA, BPAS-APS, BPAS Trust Company of Puerto Rico, NRS, GTC, HB&T, and FBD, provides employee benefit trust, collective investment fund, retirement plan administration, fund administration, transfer agency, actuarial, VEBA/HRA, and health and welfare consulting services. The All Other segment is comprised of: (a) wealth management services including trust services provided by the personal trust unit within the Bank, broker-dealer and investment advisory services provided by CISI, Carta Group and Wealth Partners, as well as asset management provided by Nottingham; and (b) full-service insurance, risk management and employee benefit services provided by OneGroup. The accounting policies used in the disclosure of business segments are the same as those described in the summary of significant accounting policies (See Note A). 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 2022 Net interest income $ 420,273 $ 319 $ 38 $ 0 $ 420,630 Provision for credit losses 14,773 0 0 0 14,773 Noninterest revenue 75,480 117,956 73,126 (7,837) 258,725 Amortization of intangible assets 4,753 6,607 3,854 0 15,214 Acquisition expenses 5,018 3 0 0 5,021 Acquisition-related contingent consideration adjustment 0 (500) 200 0 (300) Other operating expenses 283,942 71,466 56,762 (7,837) 404,333 Income before income taxes $ 187,267 $ 40,699 $ 12,348 $ 0 $ 240,314 Assets $ 15,616,885 $ 226,135 $ 96,924 $ (104,293) $ 15,835,651 Goodwill $ 732,088 $ 85,384 $ 24,369 $ 0 $ 841,841 Core deposit intangibles & Other intangibles $ 12,304 $ 33,411 $ 15,281 $ 0 $ 60,996 2021 Net interest income $ 374,078 $ 293 $ 41 $ 0 $ 374,412 Provision for credit losses (8,839) 0 0 0 (8,839) Noninterest revenue 67,910 116,621 68,834 (7,130) 246,235 Amortization of intangible assets 4,744 6,033 3,274 0 14,051 Acquisition expenses 638 36 27 0 701 Acquisition-related contingent consideration adjustment 0 200 0 0 200 Other operating expenses 265,525 64,423 50,368 (7,130) 373,186 Income before income taxes $ 179,920 $ 46,222 $ 15,206 $ 0 $ 241,348 Assets $ 15,325,732 $ 257,879 $ 97,391 $ (128,345) $ 15,552,657 Goodwill $ 689,868 $ 85,321 $ 23,920 $ 0 $ 799,109 Core deposit intangibles & Other intangibles $ 9,087 $ 40,018 $ 16,121 $ 0 $ 65,226 2020 Net interest income $ 367,237 $ 943 $ 223 $ 0 $ 368,403 Provision for credit losses 14,212 0 0 0 14,212 Noninterest revenue 69,578 103,456 61,599 (6,214) 228,419 Amortization of intangible assets 5,515 5,724 3,058 0 14,297 Acquisition expenses 4,933 0 0 0 4,933 Other operating expenses 255,955 60,709 46,854 (6,214) 357,304 Income before income taxes $ 156,200 $ 37,966 $ 11,910 $ 0 $ 206,076 Assets $ 13,762,325 $ 217,780 $ 82,849 $ (131,860) $ 13,931,094 Goodwill $ 690,121 $ 83,275 $ 20,312 $ 0 $ 793,708 Core deposit intangibles & Other intangibles $ 13,831 $ 32,051 $ 7,058 $ 0 $ 52,940 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2022 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE U: SUBSEQUENT EVENTS Companies are required to evaluate events and transactions that occur after the balance sheet date but before the date the financial statements are issued. They must recognize in the financial statements the effect of all events or transactions that provide additional evidence of conditions that existed at the balance sheet date, including the estimates inherent in the financial preparation process. Entities do not recognize the impact of events or transactions that provide evidence about conditions that did not exist at the balance sheet date but arose after that date. Such events and transactions were evaluated through the date these consolidated financial statements were available to be issued and the Company determined such an event had occurred. In the first quarter of 2023, the Company executed the sale of |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Nature of Operations | Nature of Operations Community Bank System, Inc. (the “Company”) is a registered financial holding company which wholly-owns two significant consolidated subsidiaries: Community Bank, N.A. (the “Bank” or “CBNA”), and Benefit Plans Administrative Services, Inc. (“BPAS”). As of December 31, 2022, BPAS owns five subsidiaries: Benefit Plans Administrative Services, LLC (“BPA”), a provider of defined contribution plan administration services; Northeast Retirement Services, LLC (“NRS”), a provider of institutional transfer agency, master recordkeeping services, fund administration, trust and retirement plan services; BPAS Actuarial & Pension Services, LLC (“BPAS-APS”), a provider of actuarial and benefit consulting services; BPAS Trust Company of Puerto Rico, a Puerto Rican trust company; and Hand Benefits & Trust Company (“HB&T”), a provider of collective investment fund administration and institutional trust services. BPA owns one subsidiary, Fringe Benefits Design of Minnesota, Inc. (“FBD”), a provider of retirement plan administration and benefit consulting services. NRS owns one subsidiary, Global Trust Company, Inc. (“GTC”), a non-depository trust company which provides fiduciary services for collective investment trusts and other products. HB&T owns one subsidiary, Hand Securities Inc. (“HSI”), an introducing broker-dealer. As of December 31, 2022, the Bank operated 203 full-service branches and 13 drive-thru only locations operating as Community Bank, N.A. throughout 42 counties of Upstate New York, six counties of Northeastern Pennsylvania, 12 counties of Vermont and one county of Western Massachusetts, offering a range of commercial and retail banking services. The Bank owns the following operating subsidiaries: The Carta Group, Inc. (“Carta Group”), CBNA Preferred Funding Corporation (“PFC”), CBNA Treasury Management Corporation (“TMC”), Community Investment Services, Inc. (“CISI”), Nottingham Advisors, Inc. (“Nottingham”), OneGroup NY, Inc. (“OneGroup”), OneGroup Wealth Partners, Inc. (“Wealth Partners”), Oneida Preferred Funding II LLC (“OPFC II”) and E.S.B. Realty Corp. (“ESB Realty”). OneGroup is a full-service insurance agency offering personal and commercial lines of insurance and other risk management products and services. PFC, ESB Realty and OPFC II primarily act as investors in residential and commercial real estate activities. TMC provides cash management, investment, and treasury services to the Bank. CISI, Carta Group and Wealth Partners provide broker-dealer and investment advisory services. Nottingham provides asset management services to individuals, corporations, corporate pension and profit sharing plans, and foundations. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Variable Interest Entities (“VIE”) are legal entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the legal entities to finance its activities without additional subordinated financial support. VIEs may be required to be consolidated by a company if it is determined the company is the primary beneficiary of a VIE. The primary beneficiary of a VIE is the enterprise that has: (1) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, and (2) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits of the VIE that could potentially be significant to the VIE. The Company’s VIEs are described in more detail in Note S to the consolidated financial statements. |
Critical Accounting Estimates in the Preparation of Financial Statements | Critical Accounting Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Critical accounting estimates include the allowance for credit losses, actuarial assumptions associated with the pension, post-retirement and other employee benefit plans, the provision for income taxes, investment valuation, the carrying value of goodwill and other intangible assets, the fair value of contingent consideration liabilities, and acquired loan valuations. |
Risk and Uncertainties | Risk and Uncertainties In the normal course of its business, the Company encounters economic and regulatory risks. There are three main components of economic risk: interest rate risk, credit risk and market risk. The Company is subject to interest rate risk to the degree that its interest-bearing liabilities mature or reprice at different speeds, or on a different basis, from its interest-earning assets. The Company’s primary credit risk is the risk of default on the Company’s loan portfolio that results from the borrowers’ inability or unwillingness to make contractually required payments. Market risk reflects potential changes in the value of collateral underlying loans, the fair value of investment securities, and loans held for sale. The Company is subject to regulations of various governmental agencies. These regulations can change significantly from period to period. The Company also undergoes periodic examinations by the regulatory agencies, which may subject it to further changes with respect to asset valuations, amounts of required credit loss allowances, and operating restrictions resulting from the regulators’ judgments based on information available to them at the time of their examinations. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue in accordance with ASU No. 2014-09 Revenue from Contracts with Customers (Topic 606) Topic 606 does not apply to revenue associated with financial instruments, including revenue from loans and securities. In addition, certain noninterest income streams such as fees associated with mortgage servicing rights, financial guarantees, derivatives, and certain credit card fees are also not in scope. Topic 606 is applicable to the Company’s noninterest revenue streams including its deposit related fees, electronic payment interchange fees, merchant income, trust, asset management and other wealth management revenues, insurance commissions and benefit plan services income. Noninterest revenue streams in-scope of Topic 606 are discussed below. Deposit Service Fees Deposit service fees consist of account activity fees, monthly service fees, overdraft fees, check orders, debit and credit card income, ATM fees, merchant services income and other revenues from processing wire transfers, bill pay service, cashier’s checks and foreign exchange. Debit and credit card income is primarily comprised of interchange fees earned at the time the Company’s debit and credit cards are processed through card payment networks such as Visa. ATM fees are primarily generated when a Company cardholder uses a non-Company ATM or a non-Company cardholder uses a Company ATM. Merchant services income mainly represents fees charged to merchants to process their debit and credit card transactions, in addition to account management fees. The Company’s performance obligation for deposit service fees is generally satisfied, and the related revenue recognized, when the services are rendered or the transaction has been completed. Payment for deposit service fees is typically received at the time it is assessed through a direct charge to customers’ accounts or on a monthly basis. Deposit service fees revenue primarily relates to the Company’s Banking operating segment. Other Banking Services Other banking services consists of other recurring revenue streams such as commissions from sales of credit life insurance, safe deposit box rental fees, mortgage banking income, bank owned life insurance income and other miscellaneous revenue streams. Commissions from the sale of credit life insurance are recognized at the time of sale of the policies. Safe deposit box rental fees are charged to the customer on an annual basis and recognized upon receipt of payment. The Company determined that since rentals and renewals occur fairly consistently over time, revenue is recognized on a basis consistent with the duration of the performance obligation. Mortgage banking income and bank owned life insurance income are not within the scope of Topic 606. Other banking services revenue primarily relates to the Company’s Banking operating segment. Employee Benefit Services Employee benefit services income consists of revenue received from retirement plan services, collective investment fund services, fund administration, transfer agency, consulting and actuarial services. The Company’s performance obligation that relates to plan services are satisfied over time and the resulting fees are recognized monthly or quarterly, based upon the market value of the assets under management and the applicable fee rate or on a time expended basis. Payment is generally received a few days after month end or quarter end. The Company does not earn performance-based incentives. Transactional services such as consulting services, mailings, or other ad hoc services are provided to existing trust and asset management customers. The Company’s performance obligation for these transactional-based services is generally satisfied, and related revenue recognized, at a point in time (i.e., as incurred). Payment is received shortly after services are rendered. Employee benefit services revenue primarily relates to the Company’s Employee Benefit Services operating segment. Insurance Services Insurance services primarily consists of commissions received on insurance product sales and consulting services. The Company acts in the capacity of a broker or agent between the Company’s customer and the insurance carrier. The Company’s performance obligation related to insurance sales for both property and casualty insurance and employee benefit plans is generally satisfied upon the later of the issuance or effective date of the policy. The Company’s performance obligation related to consulting services is considered transactional in nature and is generally satisfied when the services have been completed and related revenue recognized at a point in time. Payment is received at the time services are rendered. The Company earns performance based incentives, commonly known as contingency payments, which usually are based on certain criteria established by the insurance carrier such as premium volume, growth and insured loss ratios. Contingent payments are accrued for based upon management’s expectations for the year. Commission expense associated with sales of insurance products is expensed as incurred. Insurance services revenue primarily relates to the Company’s All Other operating segment. Wealth Management Services Wealth management services income is primarily comprised of fees earned from the management and administration of trusts and other customer assets. The Company generally has two types of performance obligations related to these services. The Company’s performance obligation that relates to advisory and administration services are satisfied over time and the resulting fees are recognized monthly, based upon the market value of the assets under management and the applicable fee rate. Payment is generally received soon after month end or quarter end through a direct charge to customers’ accounts. The Company does not earn performance-based incentives. Transactional services such as tax return preparation services, purchases and sales of investments and insurance products are also available to existing trust and asset management customers. The Company’s performance obligation for these transactional-based services is generally satisfied, and related revenue recognized, at a point in time (i.e. as incurred). Payment is generally received on a monthly basis. Wealth management services revenue primarily relates to the Company’s All Other operating segment. Contract Balances A contract asset balance occurs when an entity performs a service for a customer before the customer pays consideration (resulting in a contract receivable) or before payment is due (resulting in a contract asset). A contract liability balance is an entity’s obligation to transfer a service to a customer for which the entity has already received payment (or payment is due) from the customer. The Company’s noninterest revenue streams are largely based on transactional activity, or standard month-end revenue accruals such as asset management fees based on month-end market values. Consideration is often received immediately or shortly after the Company satisfies its performance obligation and revenue is recognized. The Company does not typically enter into long-term revenue contracts with customers, and therefore, does not experience significant contract balances. As of 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. As of December 31, 2021, $31.6 million of accounts receivable, including $9.1 million of unbilled fee revenue, and $2.2 million of unearned revenue was recorded in the consolidated statements of condition. Contract Acquisition Costs Under the guidance of Topic 606, an entity is required to capitalize, and subsequently amortize into expense, certain incremental costs of obtaining a contract with a customer if these costs are expected to be recovered. The incremental costs of obtaining a contract are those costs that an entity incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained (for example, sales commission). The Company utilizes the practical expedient method which allows entities to immediately expense contract acquisition costs when the asset that would have resulted from capitalizing these costs would have been amortized in one year or less. |
Cash and Cash Equivalents | Cash and Cash Equivalents For purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from banks, and highly liquid investments with original maturities of less than 90 days. The carrying amounts reported in the consolidated statements of condition for cash and cash equivalents approximate those assets’ fair values. As of December 31, 2022 and 2021, cash and cash equivalents reported in the consolidated statements of condition included cash due from banks of $10.0 million and $11.0 million, respectively. Cash due from banks may at times exceed federally insured limits. |
Investment Securities | Investment Securities The Company can classify its investments in debt securities as held-to-maturity, available-for-sale, or trading. Held-to-maturity securities are those for which the Company has the positive intent and ability to hold until maturity, and are reported at cost, which is adjusted for amortization of premiums and accretion of discounts. Available-for-sale debt securities are reported at fair value with net unrealized gains and losses reflected as a separate component of shareholders’ equity, net of applicable income taxes. None of the Company’s investment securities have been classified as trading securities at December 31, 2022 or 2021. Interest income includes amortization of purchase premiums or discounts. Premiums and discounts on securities are amortized on the level-yield method without anticipating prepayments, except for mortgage-backed securities where prepayments are anticipated. Gains and losses are recorded on the trade date and determined using the specific identification method. Equity securities with a readily determinable fair value are reported at fair value with net unrealized gains and losses recognized in the consolidated statements of income. Certain equity securities that do not have a readily determinable fair value are stated at cost, adjusted for observable price changes in orderly transactions for identical or similar investments of the same issuer. These securities include restricted stock of the Federal Reserve Bank of New York (“Federal Reserve”) and the Federal Home Loan Bank of New York and the Federal Home Loan Bank of Boston (collectively referred to as “FHLB”), as well as other equity securities. Fair values for investment securities are based upon quoted market prices, where available. If quoted market prices are not available, fair values are based upon quoted market prices of comparable instruments, or a discounted cash flow model using market estimates of interest rates and volatility. Allowance for Credit Losses – Debt Securities For held-to-maturity debt securities, the Company measures expected credit losses on a collective basis by major security type. The estimates of expected credit losses considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. Accrued interest receivable on held-to-maturity securities is excluded from the estimate of credit losses. For available-for-sale debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For available-for-sale debt securities that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the security structure, recent security collateral performance metrics, if applicable, external credit ratings, failure of the issuer to make scheduled interest or principal payments, judgment about and expectations of future performance, and relevant independent industry research, analysis, and forecasts. This assessment involves a high degree of subjectivity and judgment that is based on the information available to management at a point in time. If this assessment indicates that a credit loss exists, the present value of the cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of the cash flows expected to be collected from the security is less than the amortized cost basis of the security, a credit loss exists and an allowance for credit losses is recorded, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income. Changes in the allowance for credit losses are recorded as provision for (or reversal of) credit losses in the consolidated statements of income. Losses are charged against the allowance when management believes the uncollectibility of an available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met. Accrued interest receivable on available-for-sale debt securities, included in accrued interest and fees receivable on the consolidated statements of condition, totaled $19.3 million and $15.8 million at December 31, 2022 and 2021, respectively. Accrued interest receivable on held-to-maturity securities, included in accrued |
Loans | Loans Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at amortized cost, net of allowance for credit losses. Amortized cost is the principal balance outstanding, net of purchase premiums and discounts, and deferred loan fees and costs. Mortgage loans held for sale are carried at fair value and are included in loans held for sale on the consolidated statements of condition. 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. The carrying amount of accrued interest approximates its fair value. Interest on loans is accrued and credited to operations based upon the principal amount outstanding. Nonrefundable loan fees and related direct costs are deferred and included in the loan balances where they are amortized over the life of the loan as an adjustment to loan yield using the effective yield method. Premiums and discounts on purchased loans are amortized using the effective yield method over the life of the loans. Accrued interest receivable on loans is included in accrued interest and fees receivable on the consolidated statements of condition and is excluded from the estimate of credit losses and amortized cost basis of loans. An allowance for credit losses is not measured for accrued interest receivable on loans as the Company writes off the uncollectible accrued interest balance in a timely manner upon recognition of credit deterioration of the underlying loan. The Company places a loan on nonaccrual status when the loan becomes 90 days past due (or sooner, if management concludes collection is doubtful), except when, in the opinion of management, it is well-collateralized and in the process of collection. A loan may be placed on nonaccrual status earlier than 90 days past due if there is deterioration in the financial position of the borrower or if other conditions of the loan so warrant. When a loan is placed on nonaccrual status, uncollected accrued interest is reversed against interest income and the amortization of nonrefundable loan fees and related direct costs is discontinued. Interest income during the period the loan is on nonaccrual status is recorded on a cash basis after recovery of principal is reasonably assured. Nonaccrual loans are returned to accrual status when management determines that the borrower’s performance has improved and that both principal and interest are collectible. This generally requires a sustained period of timely principal and interest payments and a well-documented credit evaluation of the borrower’s financial condition. The Company’s charge-off policy by loan type is as follows: ● Business lending loans are generally charged-off to the extent outstanding principal exceeds the fair value of estimated proceeds from collection efforts, including liquidation of collateral. The charge-off is recognized when the loss becomes reasonably quantifiable. ● Consumer installment loans are generally charged-off to the extent outstanding principal exceeds the fair value of collateral, and are recognized by the end of the month in which the loan becomes 90 days past due. ● Consumer mortgage and home equity loans are generally charged-off to the extent outstanding principal exceeds the fair value of the property, less estimated costs to sell, and are recognized when the loan becomes 180 days past due. Allowance for Credit Losses – Loans The allowance for credit losses is a valuation account that is netted against the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the allowance when management believes the uncollectibility of a loan balance is confirmed. Management estimates the allowance balance using relevant available information from internal and external sources relating to past events, current conditions, and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected future credit losses. Adjustments are made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, acquired loans, delinquency level, risk ratings or term of loans as well as actual and forecasted macroeconomic trends, such as unemployment rates and changes in property values such as home prices, commercial real estate prices and automobile prices, gross domestic product, median household income net of inflation and other relevant factors in comparison to longer-term. Multiple economic scenarios are utilized to encompass a range of economic outcomes, including baseline, upside and downside forecasts, which are weighted in the calculation. The segments of the Company’s loan portfolio are disaggregated into the following classes that allow management to monitor risk and performance: ● Business lending is comprised of general purpose commercial and industrial loans including, but not limited to, agricultural-related and dealer floor plans, loans to not-for-profit enterprises, as well as mortgages on commercial property and Paycheck Protection Program (“PPP”) loans. The portfolio segment is further broken into portfolio classes based on risks associated with the collateral supporting the loans. Each class of business lending can also have different payment structures. Business lending loans are generally higher dollar loans and a large portion are risk rated at least annually. ● Consumer mortgages consist primarily of fixed rate residential instruments, typically 10 to 30 years in contractual term, secured by first liens on real property. FICO credit scores are used to monitor higher risks related to this type of lending with the Company segmenting consumer mortgages into “FICO AB” and “FICO CDE”. FICO AB refers to higher tiered loans with FICO scores greater than or equal to 720 as compared to FICO CDE with FICO scores less than 720 and potentially higher risk. ● Consumer indirect consists primarily of installment loans originated through selected dealerships and are generally secured by automobiles, marine and other recreational vehicles. Collateral securing the loans was used to further disaggregate this portfolio as charge-offs can vary depending on the purpose of the loan. Non-auto loans often have longer terms, and generally have higher risk due to declines in collateral value given the nature of the property. ● Consumer direct consists of all other loans to consumers such as personal installment loans and check credit lines of credit. ● Home equity products are installment loans or lines of credit most often secured by a first or second lien position on residential real estate with terms up to 30 years. The allowance for credit losses is measured on a collective (pool) basis when similar risk characteristics exist, including collateral type, credit ratings/scores, size, duration, interest rate structure, industry, geography, origination vintage, and payment structure. The Company has identified the following portfolio segments and classes and measures the allowance for credit losses using the following methods: Loan Portfolio Segment Loan Portfolio Class Allowance for Credit Losses Methodology Business lending Commercial real estate multi family Cumulative loss rate Business lending Commercial real estate non-owner occupied Cumulative loss rate Business lending Commercial real estate owner occupied Cumulative loss rate Business lending Commercial and industrial loans Vintage loss rate Business lending Commercial and industrial lines of credit Line loss Business lending Municipal Cumulative loss rate Business lending Other business Cumulative loss rate Business lending Paycheck Protection Program Cumulative loss rate Consumer mortgage Consumer mortgage FICO AB Cumulative loss rate Consumer mortgage Consumer mortgage FICO CDE Cumulative loss rate Consumer indirect Indirect new auto Vintage loss rate Consumer indirect Indirect used auto Vintage loss rate Consumer indirect Indirect non-auto Vintage loss rate Consumer direct Consumer check credit Line loss Consumer direct Consumer direct Vintage loss rate Home equity Home equity fixed rate Vintage loss rate Home equity Home equity lines of credit Line loss The cumulative loss rate method uses historical loss data applied against multiple pools of loans and uses a quantitatively based management overlay in order to capture the risk for a loan’s entire expected life. These loss rates are then applied to current balances to achieve a required reserve before qualitative adjustments. The line loss method calculates the quantitative required reserve for lines of credit. This method contains several different underlying calculations including average annual loss rate, pay-down rate, cumulative loss, average draw percentage, and undrawn liability reserve. The vintage loss rate method calculates annual loss rates by origination year. The results of this model are then applied to current outstanding balances by vintage, which correspond to the origination period for each annual loss rate. In addition to the risk characteristics noted above, management considers the portion of acquired loans to the overall segment balance, as well as current delinquency and charge-off trends compared to historical time periods. Loans that do not share risk characteristics are evaluated on an individual basis. Loans that are individually assessed are not included in the collective evaluation. When management determines that foreclosure is probable or when the borrower is experiencing financial difficulty at the reporting date and repayment is expected to be provided substantially through the operation or sale of the collateral, expected credit losses are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate. Expected credit losses are estimated over the contractual term of the loans and adjusted for expected prepayments when appropriate. The contractual term excludes expected extensions, renewals, and modifications unless management has a reasonable expectation at the reporting date that a troubled debt restructuring will be executed with an individual borrower or the extension or renewal options are included in the original or modified contract at the reporting date and are not unconditionally cancellable by the Company. Certain business lending, consumer direct, and home equity loans do not have stated maturities. In determining the estimated life of these loans, management first estimates the future cash flows expected to be received and then applies those expected future cash flows to the balance. Expected credit losses for lines of credit with no stated maturity are determined by estimating the amount and timing of all principal payments expected to be received after the reporting period and allocating those principal payments between the balance outstanding as of the reporting period and the balance of future receivables expected to be originated through subsequent usage of the unconditionally cancellable loan commitment associated with the account until the expected payments have been fully allocated. An additional allowance for credit loss is recorded for the excess of the balance outstanding as of the reporting period over the expected principal payments allocated to that balance. Troubled Debt Restructuring A loan for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, is considered to be a troubled debt restructuring (“TDR”). The allowance for credit loss on a TDR is measured using the same method as all other loans, except when the value of a concession cannot be measured using a method other than the discounted cash flow method. When the value of a concession is measured using the discounted cash flow method, the allowance for credit loss is determined by discounting the expected future cash flows at the original interest rate of the loan. Allowance for Credit Losses - Off-balance-sheet credit exposures The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. There are unfunded commitments for lines of credit within each of the Company’s loan portfolio segments except consumer indirect. The allowance for credit losses on off-balance-sheet credit exposures is adjusted as a provision for (or reversal of) credit losses. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life. Management estimates the allowance balance using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics that are the same as the adjustments considered for the loan portfolio. Purchased Credit Deteriorated (“PCD”) Loans The Company has purchased loans, some of which have experienced a more-than-insignificant credit deterioration since origination. The Company’s policy for reviewing what meets the threshold of the definition of a more-than-insignificant credit deterioration includes loans that are delinquent more than 30 days, loans that have historical delinquencies of more than 30 days at least three times since origination, risk rating downgrades since origination, loans with multiple payment deferrals, loans considered to be troubled debt restructurings, individually assessed loans or loans with certain documented policy exceptions, further refined based on loan-specific facts and circumstances. PCD loans are initially recorded at the amount paid. An allowance for credit losses is determined using the same methodology as other loans. The initial allowance for credit losses determined on a collective basis is allocated to individual loans. The sum of the loan’s purchase price and allowance for credit losses becomes its initial amortized cost basis. The difference between the initial amortized cost basis and the par value of the loan is a noncredit discount or premium, which is amortized into interest income over the life of the loan. Subsequent changes to the allowance for credit losses are recorded as provision for (or reversal of) credit losses. Non-Purchased Credit Deteriorated (“non-PCD”) Loans Acquired loans that are not deemed to have experienced a more-than-insignificant credit deterioration since origination are considered non-PCD. At the acquisition date, a fair value adjustment is recorded that includes both credit and interest rate considerations. Fair value adjustments may be discounts (or premiums) to a loan’s cost basis and are accreted (or amortized) to net interest income (or expense) over the loan’s remaining life. Fair value adjustments for revolving loans are accreted (or amortized) using a straight line method. Term loans are accreted (or amortized) using the constant effective yield method. A provision for credit losses is also recorded at acquisition for the credit considerations on non-PCD loans. Subsequent to the purchase date, the methods utilized to estimate the required allowance for credit losses for these loans are the same as originated loans and subsequent changes to the allowance for credit losses are recorded as provision for (or reversal of) credit losses. |
Intangible Assets | Intangible Assets Intangible assets include core deposit intangibles, customer relationship intangibles and goodwill arising from acquisitions. Core deposit intangibles and customer relationship intangibles are amortized on either an accelerated or straight-line basis over periods ranging from seven The Company evaluates goodwill for impairment on an annual basis, or more often if events or circumstances indicate there may be impairment. The implied fair value of a reporting unit’s goodwill is compared to its carrying amount and the impairment loss is measured by the excess of the carrying value over fair value. The fair value of each reporting unit is compared to the carrying amount of that reporting unit in order to determine if impairment is indicated. |
Premises and Equipment | Premises and Equipment Premises and equipment are stated at cost less accumulated depreciation. Computer software costs that are capitalized include only external direct costs of obtaining and installing the software. The Company has not developed any internal use software. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. Useful lives range from two three and hardware Premises and equipment designated as held for sale is included in other assets on the consolidated statements of condition and are carried at the lower of cost or fair value, less estimated costs to sell. |
Leases | Leases The Company occupies certain offices and uses certain equipment under non-cancelable operating lease agreements. The Company determines if an arrangement is a lease at inception. The right-of-use assets associated with operating leases are recorded in premises and equipment in the Company’s consolidated statements of condition. The lease liabilities associated with operating leases are included in accrued interest and other liabilities in the Company’s consolidated statements of condition. Right-of-use assets represent the Company’s right to use the underlying assets for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the associated leases. Operating lease right-of-use assets and liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term. The Company uses interest rates on advances from the FHLB available at the time of commencement to determine the present value of lease payments. The operating lease right-of-use assets include any lease payments made at the time of commencement and exclude lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the option will be exercised. Lease expense is recognized on a straight-line basis over the lease term and is included in occupancy and equipment expense in the Company’s consolidated statements of income. The Company elected to account for lease and non-lease components separately, applies a portfolio approach to account for the lease right-of-use assets and liabilities for certain equipment leases and elected to exclude leases with a term of 12 months or less from the recognition and measurement policies described above. |
Other Real Estate | Other Real Estate Other real estate owned is comprised of properties acquired through foreclosure, or by deed in lieu of foreclosure. These assets are carried at fair value less estimated costs of disposal. At foreclosure, if the fair value, less estimated costs to sell, of the real estate acquired is less than the Company’s recorded investment in the related loan, a write-down is recognized through a charge to the allowance for credit losses. Any subsequent reduction in value is recognized by a charge to income. Operating costs associated with the properties are charged to expense as incurred. At December 31, 2022 and 2021, other real estate totaled $0.5 million and $0.7 million, respectively, and is included in other assets in the Company’s consolidated statements of condition. |
Mortgage Servicing Rights | Mortgage Servicing Rights 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 period of estimated net servicing income or loss. The Company uses a valuation model that calculates the present value of future cash flows to determine the fair value of servicing rights. In using this valuation method, the Company incorporates assumptions that market participants would use in estimating future net servicing income, which includes estimates of the servicing cost per loan, the discount rate, and prepayment speeds. The carrying value of the originated mortgage servicing rights is included in other assets and is evaluated quarterly for impairment using these same market assumptions. The amount of impairment recognized is the amount by which the carrying value of the capitalized servicing rights for a stratum exceeds estimated fair value. Impairment is recognized through a valuation allowance. |
Treasury Stock | Treasury Stock Repurchases of shares of the Company’s common stock are recorded at cost as a reduction of shareholders’ equity. Reissuance of shares of treasury stock is recorded at average cost. |
Income Taxes | Income Taxes The Company and its subsidiaries file a consolidated federal income tax return. Provision for income taxes is based on taxes currently payable or refundable as well as deferred taxes that are based on temporary differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements. Deferred tax assets and liabilities are reported in the consolidated financial statements at currently enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are expected to be realized or settled. Benefits from tax positions should be recognized in the financial statements only when it is more likely than not that the tax position will be sustained upon examination by the appropriate taxing authority having full knowledge of all relevant information. A tax position meeting the more-likely-than-not recognition threshold should be measured at the largest amount of benefit for which the likelihood of realization upon ultimate settlement exceeds 50 percent. Should tax laws change or the taxing authorities determine that management’s assumptions were inappropriate, an adjustment may be required which could have a material effect on the Company’s results of operations. |
Investments in Real Estate Limited Partnerships | Investments in Real Estate Limited Partnerships The Company has investments in various real estate limited partnerships that acquire, develop, own and operate low and moderate-income housing. The Company’s ownership interest in these limited partnerships ranges from 5.00% to 99.99% as of December 31, 2022. These investments are made directly in Low Income Housing Tax Credit (“LIHTC”) partnerships formed by third parties. As a limited partner in these operating partnerships, the Company receives tax credits and tax deductions for losses incurred by the underlying properties. The Company accounts for its ownership interest in LIHTC partnerships in accordance with Accounting Standards Update (“ASU”) 2014-01, Investments – Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Qualified Affordable Housing Projects |
Repurchase Agreements | Repurchase Agreements The Company sells certain securities under agreements to repurchase. These agreements are treated as collateralized financing transactions. These secured borrowings are reflected as liabilities in the accompanying consolidated statements of condition and are recorded at the amount of cash received in connection with the transaction. Short-term securities sold under agreements to repurchase generally mature within one day from the transaction date. Securities, generally U.S. government and agency securities, pledged as collateral under these financing arrangements can be repledged by the secured party. Additional collateral may be required based on the fair value of the underlying securities. |
Retirement Benefits | Retirement Benefits The Company provides defined benefit pension benefits to eligible employees and post-retirement health and life insurance benefits to certain eligible retirees. The Company also provides deferred compensation and supplemental executive retirement plans for selected current and former employees, officers, and directors. Expense under these plans is charged to current operations and consists of several components of net periodic benefit cost based on various actuarial assumptions regarding future experience under the plans, including discount rate, rate of future compensation increases and expected return on plan assets. |
Assets Under Management or Administration | Assets Under Management or Administration Assets held in fiduciary or agency capacities for customers are not included in the accompanying consolidated statements of condition as they are not assets of the Company. All fees associated with providing asset management services are recorded on an accrual basis of accounting and are included in noninterest income. |
Advertising | Advertising Advertising costs, which are nondirect response in nature and expensed as incurred, totaled approximately $8.2 million, $5.2 million and $6.1 million for the years ending December 31, 2022, 2021 and 2020, respectively. |
Bank Owned Life Insurance | Bank Owned Life Insurance The Company owns life insurance policies on certain current and former employees and directors where the Bank is the beneficiary. Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value (“CSV”) adjusted for other charges or other amounts due that are probable at settlement. Increases in the CSV of the policies, as well as the death benefits received, net of any CSV, are recorded in noninterest income, and are not subject to income taxes. |
Earnings Per Share | Earnings Per Share Using the two-class method, basic earnings per common share is computed based upon net income available to common shareholders divided by the weighted average number of common shares outstanding during each period, which excludes the outstanding unvested restricted stock. Diluted earnings per share is computed using the weighted average number of common shares determined for the basic earnings per common share computation plus the dilutive effect of stock options using the treasury stock method. Stock options where the exercise price is greater than the average market price of common shares were not included in the computation of earnings per diluted share as they would have been anti-dilutive. Shares held in rabbi trusts related to deferred compensation plans are considered outstanding for purposes of computing earnings per share. |
Stock-based Compensation | Stock-based Compensation Companies are required to measure and record compensation expense for stock options and other share-based payments on the instruments’ fair value on the date of grant. Stock-based compensation expense is recognized ratably over the requisite service period for all awards (see Note L). |
Fair Values of Financial Instruments | Fair Values of Financial Instruments The Company determines fair values based on quoted market values where available or on estimates using present values or other valuation techniques. Those techniques are significantly affected by the assumptions used, including 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, could not be realized in immediate settlement of the instrument. Certain financial instruments and all nonfinancial instruments are excluded from this disclosure requirement. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Company. The fair values of investment securities, loans, deposits, and borrowings have been disclosed in Note R. |
Contingent Consideration | Contingent Consideration The Company measures contingent consideration liabilities recognized in connection with business combinations at fair value on a recurring basis using significant unobservable inputs classified within Level 3 of the fair value hierarchy as defined in ASC 820 Fair Value Measurement |
Reclassifications | Reclassifications Certain reclassifications have been made to prior years’ balances to conform to the current year presentation. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In March 2020, the FASB issued ASU No. 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting (Topic 848) . The updated guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this guidance apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The FASB issued ASU 2022-06 in December 2022, which deferred the expiration date of ASC 848 from December 31, 2022 to December 31, 2024, which allows more transition time after the intended cessation of LIBOR on June 30, 2023. Adoption is permitted in any interim periods for which financial statements have not been issued. The Company has established a working group that includes multiple functions to guide the transition from LIBOR to alternative reference rates. The Company has identified all known LIBOR exposures, created a plan to address the exposures, and new originations either do not utilize LIBOR or replacement rate language, provisions, and conventions have been specified. The Company continues to assess its exposure to LIBOR and communicate with all stakeholders in order to facilitate the transition. The Company adopted this guidance on January 1, 2022 and determined that this guidance does not have a material impact on the Company’s consolidated financial statements, as the Company’s exposure to LIBOR-based loans and financial instruments is insignificant. In August 2021, the FASB issued ASU 2021-06, Presentation of Financial Statements (Topic 205) Financial Services-Depository and Lending (Topic 942) Financial Services-Investment Companies (Topic 946): Amendments to SEC Paragraphs Pursuant to SEC Final Rule Releases No. 33-10786 Amendments to Financial Disclosures about Acquired and Disposed Businesses No. 33-10835 Update of Statistical Disclosures for Bank and Savings and Loan Registrants Amendments to Financial Disclosures about Acquired and Disposed Businesses Update of Statistical Disclosures for Bank and Savings and Loan Registrants |
New Accounting Pronouncements | New Accounting Pronouncements In March 2022, the FASB issued ASU 2022-02 , Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of portfolio segments and allowances for credit losses | Loan Portfolio Segment Loan Portfolio Class Allowance for Credit Losses Methodology Business lending Commercial real estate multi family Cumulative loss rate Business lending Commercial real estate non-owner occupied Cumulative loss rate Business lending Commercial real estate owner occupied Cumulative loss rate Business lending Commercial and industrial loans Vintage loss rate Business lending Commercial and industrial lines of credit Line loss Business lending Municipal Cumulative loss rate Business lending Other business Cumulative loss rate Business lending Paycheck Protection Program Cumulative loss rate Consumer mortgage Consumer mortgage FICO AB Cumulative loss rate Consumer mortgage Consumer mortgage FICO CDE Cumulative loss rate Consumer indirect Indirect new auto Vintage loss rate Consumer indirect Indirect used auto Vintage loss rate Consumer indirect Indirect non-auto Vintage loss rate Consumer direct Consumer check credit Line loss Consumer direct Consumer direct Vintage loss rate Home equity Home equity fixed rate Vintage loss rate Home equity Home equity lines of credit Line loss |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
ACQUISITIONS | |
Schedule of estimated fair value of assets acquired and liabilities assumed | 2022 2021 2020 (000s omitted) Elmira Other (1) Total Total (2) Steuben Consideration: Cash $ 82,179 $ 3,477 $ 85,656 $ 29,870 $ 21,613 Community Bank System, Inc. common stock 0 0 0 0 76,942 Contingent consideration 0 0 0 2,900 0 Total net consideration 82,179 3,477 85,656 32,770 98,555 Recognized amounts of identifiable assets acquired and liabilities assumed: Cash and cash equivalents 84,988 0 84,988 541 55,973 Investment securities 11,305 0 11,305 0 180,497 Loans, net of allowance for credit losses on PCD loans 436,954 0 436,954 0 339,017 Premises and equipment, net 11,303 14 11,317 760 7,764 Accrued interest and fees receivable 884 0 884 0 2,701 Other assets 30,007 0 30,007 579 17,675 Core deposit intangibles 7,970 0 7,970 0 2,928 Other intangibles 0 3,014 3,014 26,337 1,196 Deposits (522,295) 0 (522,295) 0 (516,274) Other liabilities (3,541) 0 (3,541) (1,164) (4,841) Other Federal Home Loan Bank borrowings (17,616) 0 (17,616) 0 (6,000) Subordinated debt held by unconsolidated subsidiary trusts 0 0 0 0 (2,062) Total identifiable assets, net 39,959 3,028 42,987 27,053 78,574 Goodwill $ 42,220 $ 449 $ 42,669 $ 5,717 $ 19,981 (1) Includes amounts for all OneGroup acquisitions completed in 2022. (2) Includes amounts for TGA, FBD, and NuVantage acquisitions completed in 2021. |
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 (000s omitted) PCD Loans Par value of PCD loans at acquisition $ 35,906 Allowance for credit losses at acquisition (668) Non-credit premium at acquisition 103 Fair value of PCD loans at acquisition $ 35,341 |
Schedule of pro forma financial information | Pro Forma (Unaudited) Year Ended December 31, (000s omitted) 2022 2021 2020 Total revenue, net of interest expense $ 687,976 $ 646,375 $ 607,382 Net income 193,417 191,450 171,147 |
INVESTMENT SECURITIES (Tables)
INVESTMENT SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
INVESTMENT SECURITIES | |
Schedule of amortized cost and estimated fair value of investment securities | 2022 2021 Gross Gross Gross Gross Amortized Unrealized Unrealized Estimated Amortized Unrealized Unrealized Estimated (000’s omitted) Cost Gains Losses Fair Value Cost Gains Losses Fair Value Available-for-Sale Portfolio: U.S. Treasury and agency securities $ 3,660,546 $ 0 $ 417,009 $ 3,243,537 $ 4,064,624 $ 39,997 $ 106,057 $ 3,998,564 Obligations of state and political subdivisions 549,118 506 45,327 504,297 413,019 17,326 56 430,289 Government agency mortgage-backed securities 444,689 58 60,114 384,633 474,506 7,615 5,065 477,056 Corporate debt securities 8,000 0 886 7,114 8,000 39 77 7,962 Government agency collateralized mortgage obligations 13,121 1 852 12,270 19,953 410 24 20,339 Total available-for-sale portfolio $ 4,675,474 $ 565 $ 524,188 $ 4,151,851 $ 4,980,102 $ 65,387 $ 111,279 $ 4,934,210 Equity and other Securities: Equity securities, at fair value $ 251 $ 168 $ 0 $ 419 $ 251 $ 212 $ 0 $ 463 Federal Home Loan Bank common stock 47,497 0 0 47,497 7,188 0 0 7,188 Federal Reserve Bank common stock 31,144 0 0 31,144 33,916 0 0 33,916 Other equity securities, at adjusted cost 3,532 750 0 4,282 2,562 750 0 3,312 Total equity and other securities $ 82,424 $ 918 $ 0 $ 83,342 $ 43,917 $ 962 $ 0 $ 44,879 Held-to-Maturity Portfolio: U.S. Treasury and agency securities $ 1,079,695 $ 0 $ 44,900 $ 1,034,795 $ 0 $ 0 $ 0 $ 0 Total held-to-maturity portfolio $ 1,079,695 $ 0 $ 44,900 $ 1,034,795 $ 0 $ 0 $ 0 $ 0 |
Schedule of investment securities that have been in a continuous unrealized loss position | As of December 31, 2022 Less than 12 Months 12 Months or Longer Total Gross Gross Gross Unrealized Unrealized Unrealized (000’s omitted) # Fair Value Losses # Fair Value Losses # Fair 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 As of December 31, 2021 Less than 12 Months 12 Months or Longer Total Gross Gross Gross Unrealized Unrealized Unrealized (000’s omitted) # Fair Value Losses # Fair Value Losses # Fair Value Losses Available-for-Sale Portfolio: U.S. Treasury and agency securities 47 $ 1,224,101 $ 14,873 13 $ 900,462 $ 91,184 60 $ 2,124,563 $ 106,057 Obligations of state and political subdivisions 27 23,966 56 0 0 0 27 23,966 56 Government agency mortgage-backed securities 147 139,442 2,475 52 67,273 2,590 199 206,715 5,065 Corporate debt securities 1 4,923 77 0 0 0 1 4,923 77 Government agency collateralized mortgage obligations 18 3,146 24 1 53 0 19 3,199 24 Total available-for-sale investment portfolio 240 $ 1,395,578 $ 17,505 66 $ 967,788 $ 93,774 306 $ 2,363,366 $ 111,279 |
Schedule of amortized cost and estimated fair value of debt securities by contractual maturity | Held-to-Maturity Available-for-Sale (000’s omitted) Amortized Cost Fair Value Amortized Cost Fair Value Due in one year or less $ 0 $ 0 $ 521,444 $ 516,496 Due after one through five years 0 0 1,728,988 1,574,685 Due after five years through ten years 539,825 524,815 1,161,641 1,020,562 Due after ten years 539,870 509,980 805,591 643,205 Subtotal 1,079,695 1,034,795 4,217,664 3,754,948 Government agency mortgage-backed securities 0 0 444,689 384,633 Government agency collateralized mortgage obligations 0 0 13,121 12,270 Total $ 1,079,695 $ 1,034,795 $ 4,675,474 $ 4,151,851 |
LOANS AND ALLOWANCE FOR CREDI_2
LOANS AND ALLOWANCE FOR CREDIT LOSSES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Loans | |
Schedule of loans receivable, net | (000’s omitted) 2022 2021 Business lending $ 3,645,665 $ 3,075,904 Consumer mortgage 3,012,475 2,556,114 Consumer indirect 1,539,653 1,189,749 Consumer direct 177,605 153,811 Home equity 433,996 398,061 Gross loans, including deferred origination costs 8,809,394 7,373,639 Allowance for credit losses (61,059) (49,869) Loans, net of allowance for credit losses $ 8,748,335 $ 7,323,770 |
Schedule of aggregate amounts loaned to related parties | (000’s omitted) 2022 2021 Balance at beginning of year $ 13,773 $ 15,549 New loans 2,025 2,500 Payments (3,425) (4,276) Balance at end of year $ 12,373 $ 13,773 |
Schedule of aged analysis of past due loans by class | Past Due 90+ Days Past (000’s omitted) 30 – 89 Due and Total December 31, 2022 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 Past Due 90+ Days Past (000’s omitted) 30 – 89 Due and Total December 31, 2021 Days Still Accruing Nonaccrual Past Due Current Total Loans Business lending $ 5,540 $ 99 $ 24,105 $ 29,744 $ 3,046,160 $ 3,075,904 Consumer mortgage 10,297 3,328 15,027 28,652 2,527,462 2,556,114 Consumer indirect 9,611 87 0 9,698 1,180,051 1,189,749 Consumer direct 796 22 1 819 152,992 153,811 Home equity 1,778 272 2,532 4,582 393,479 398,061 Total $ 28,022 $ 3,808 $ 41,665 $ 73,495 $ 7,300,144 $ 7,373,639 |
Schedule of non-business individually assessed loans | December 31, December 31, (000’s omitted) 2022 2021 Loans with allowance allocation $ 0 $ 7,102 Loans without allowance allocation 3,163 7,417 Carrying balance 3,163 14,519 Contractual balance 4,201 16,963 Specifically allocated allowance 0 566 |
Schedule of troubled debt restructurings on financing receivables | December 31, 2022 Nonaccrual Accruing Total (000’s omitted) # Amount # Amount # Amount Business lending 1 $ 135 3 $ 271 4 $ 406 Consumer mortgage 52 2,218 46 2,114 98 4,332 Consumer indirect 0 0 56 600 56 600 Consumer direct 0 0 18 5 18 5 Home equity 9 108 9 178 18 286 Total 62 $ 2,461 132 $ 3,168 194 $ 5,629 December 31, 2021 Nonaccrual Accruing Total (000’s omitted) # Amount # Amount # Amount Business lending 10 $ 1,011 4 $ 811 14 $ 1,822 Consumer mortgage 61 2,694 47 2,420 108 5,114 Consumer indirect 0 0 72 829 72 829 Consumer direct 0 0 16 7 16 7 Home equity 10 235 12 232 22 467 Total 81 $ 3,940 151 $ 4,299 232 $ 8,239 December 31, 2020 Nonaccrual Accruing Total (000’s omitted) # Amount # Amount # Amount Business lending 6 $ 529 4 $ 191 10 $ 720 Consumer mortgage 56 2,413 48 2,266 104 4,679 Consumer indirect 0 0 86 951 86 951 Consumer direct 0 0 23 85 23 85 Home equity 11 285 13 264 24 549 Total 73 $ 3,227 174 $ 3,757 247 $ 6,984 December 31, 2022 December 31, 2021 December 31, 2020 (000’s omitted) # Amount # Amount # Amount Business lending 0 $ 0 5 $ 1,371 1 $ 4 Consumer mortgage 7 597 24 1,425 17 1,339 Consumer indirect 13 178 23 284 31 333 Consumer direct 3 5 2 7 3 10 Home equity 1 4 0 0 3 70 Total 24 $ 784 54 $ 3,087 55 $ 1,756 |
Schedule of allowance for loan losses by class | Year Ended December 31, 2022 PCD Beginning Charge- Allowance at Ending (000’s omitted) balance offs Recoveries Acquisition Provision balance Business lending $ 22,995 $ (824) $ 1,374 $ 71 $ (319) $ 23,297 Consumer mortgage 10,017 (313) 62 0 4,577 14,343 Consumer indirect 11,737 (7,986) 4,756 0 9,345 17,852 Consumer direct 2,306 (1,252) 772 0 1,147 2,973 Home equity 1,814 (86) 163 0 (297) 1,594 Unallocated 1,000 0 0 0 0 1,000 Allowance for credit losses – loans 49,869 (10,461) 7,127 71 14,453 61,059 Liabilities for off-balance-sheet credit exposures 803 0 0 0 320 1,123 Total allowance for credit losses $ 50,672 $ (10,461) $ 7,127 $ 71 $ 14,773 $ 62,182 Year Ended December 31, 2021 Beginning Charge- Ending (000’s omitted) balance offs Recoveries Provision balance Business lending $ 30,072 $ (1,922) $ 796 $ (5,951) $ 22,995 Consumer mortgage 10,672 (426) 91 (320) 10,017 Consumer indirect 13,696 (5,160) 4,346 (1,145) 11,737 Consumer direct 3,207 (1,232) 793 (462) 2,306 Home equity 2,222 (225) 92 (275) 1,814 Unallocated 1,000 0 0 0 1,000 Allowance for credit losses – loans 60,869 (8,965) 6,118 (8,153) 49,869 Liabilities for off-balance-sheet credit exposures 1,489 0 0 (686) 803 Total allowance for credit losses $ 62,358 $ (8,965) $ 6,118 $ (8,839) $ 50,672 Year Ended December 31, 2020 Beginning Beginning balance, balance, prior to the after adoption of Impact of adoption of Steuben Ending (000’s omitted) ASC 326 ASC 326 ASC 326 Charge-offs Recoveries acquisition Provision balance Business lending $ 19,426 $ 3,360 $ 22,786 $ (1,588) $ 796 $ 3,011 $ 5,067 $ 30,072 Consumer mortgage 10,269 (1,051) 9,218 (862) 130 146 2,040 10,672 Consumer indirect 13,712 (997) 12,715 (6,382) 3,992 183 3,188 13,696 Consumer direct 3,255 (643) 2,612 (1,633) 743 87 1,398 3,207 Home equity 2,129 808 2,937 (199) 28 235 (779) 2,222 Unallocated 957 43 1,000 0 0 0 0 1,000 Acquired impaired 163 (163) 0 0 0 0 0 0 Allowance for credit losses – loans 49,911 1,357 51,268 (10,664) 5,689 3,662 10,914 60,869 Liabilities for off-balance-sheet credit exposures 0 1,185 1,185 0 0 67 237 1,489 Total allowance for credit losses $ 49,911 $ 2,542 $ 52,453 $ (10,664) $ 5,689 $ 3,729 $ 11,151 $ 62,358 |
Schedule of financing receivables purchased and Sold | The following table presents the carrying amounts of loans purchased and sold during the year ended December 31, 2022 by portfolio segment: (000’s Business Consumer Consumer Consumer Home omitted) lending mortgage indirect direct equity Total Purchases $ 125,288 $ 271,408 $ 9,383 $ 12,511 $ 18,429 $ 437,019 Sales 0 5,309 0 0 0 5,309 |
Business Lending | |
Loans | |
Schedule of loans by credit quality indicator | Term Loans Amortized Cost Basis by Origination Year Revolving Revolving Loans Loans (000’s omitted) Amortized Converted to December 31, 2022 2022 2021 2020 2019 2018 Prior Cost Basis Term Total Business lending: Risk rating Pass $ 747,570 $ 373,914 $ 232,591 $ 246,817 $ 168,423 $ 604,746 $ 711,629 $ 336,722 $ 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 $ 752,157 $ 379,525 $ 237,510 $ 253,689 $ 195,251 $ 688,511 $ 751,619 $ 387,403 $ 3,645,665 Term Loans Amortized Cost Basis by Origination Year Revolving Revolving Loans Loans (000’s omitted) Amortized Converted to December 31, 2021 2021 2020 2019 2018 2017 Prior Cost Basis Term Total Business lending: Risk rating Pass $ 517,302 $ 286,386 $ 265,551 $ 204,376 $ 152,440 $ 544,577 $ 460,461 $ 286,446 $ 2,717,539 Special mention 5,969 10,638 9,738 18,702 7,972 54,367 26,609 46,518 180,513 Classified 1,870 1,414 3,571 16,729 18,982 56,538 26,780 51,403 177,287 Doubtful 0 0 0 62 0 0 503 0 565 Total business lending $ 525,141 $ 298,438 $ 278,860 $ 239,869 $ 179,394 $ 655,482 $ 514,353 $ 384,367 $ 3,075,904 |
All Other Loans | |
Loans | |
Schedule of loans by credit quality indicator | Term Loans Amortized Cost Basis by Origination Year Revolving Revolving Loans Loans (000’s omitted) Amortized Converted to December 31, 2022 2022 2021 2020 2019 2018 Prior Cost Basis 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. Term Loans Amortized Cost Basis by Origination Year Revolving Revolving Loans Loans (000’s omitted) Amortized Converted to December 31, 2021 2021 2020 2019 2018 2017 Prior Cost Basis Term Total Consumer mortgage: FICO AB (1) Performing $ 496,372 $ 220,171 $ 178,589 $ 113,505 $ 116,417 $ 566,123 $ 0 $ 32,175 $ 1,723,352 Nonperforming 0 266 0 131 435 3,236 0 0 4,068 Total FICO AB 496,372 220,437 178,589 113,636 116,852 569,359 0 32,175 1,727,420 FICO CDE (2) Performing 162,995 117,566 81,377 57,973 54,396 300,350 25,028 14,722 814,407 Nonperforming 0 522 972 1,465 939 10,389 0 0 14,287 Total FICO CDE 162,995 118,088 82,349 59,438 55,335 310,739 25,028 14,722 828,694 Total consumer mortgage $ 659,367 $ 338,525 $ 260,938 $ 173,074 $ 172,187 $ 880,098 $ 25,028 $ 46,897 $ 2,556,114 Consumer indirect: Performing $ 590,857 $ 204,529 $ 182,458 $ 107,683 $ 39,385 $ 64,750 $ 0 $ 0 $ 1,189,662 Nonperforming 0 34 0 24 17 12 0 0 87 Total consumer indirect $ 590,857 $ 204,563 $ 182,458 $ 107,707 $ 39,402 $ 64,762 $ 0 $ 0 $ 1,189,749 Consumer direct: Performing $ 72,584 $ 28,905 $ 24,768 $ 12,340 $ 4,396 $ 4,577 $ 6,214 $ 4 $ 153,788 Nonperforming 0 4 18 1 0 0 0 0 23 Total consumer direct $ 72,584 $ 28,909 $ 24,786 $ 12,341 $ 4,396 $ 4,577 $ 6,214 $ 4 $ 153,811 Home equity: Performing $ 76,041 $ 43,106 $ 35,990 $ 18,824 $ 15,134 $ 35,740 $ 131,817 $ 38,605 $ 395,257 Nonperforming 0 64 47 102 131 679 953 828 2,804 Total home equity $ 76,041 $ 43,170 $ 36,037 $ 18,926 $ 15,265 $ 36,419 $ 132,770 $ 39,433 $ 398,061 (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. |
PREMISES AND EQUIPMENT (Tables)
PREMISES AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
PREMISES AND EQUIPMENT | |
Schedule of premises and equipment | Premises and equipment consist of the following at December 31: (000’s omitted) 2022 2021 Land and land improvements $ 34,487 $ 31,884 Bank premises 158,312 151,724 Equipment 72,960 85,391 Operating lease right-of-use assets 30,069 31,754 Construction in progress 2,377 4,786 Premises and equipment, gross 298,205 305,539 Accumulated depreciation (137,427) (144,888) Premises and equipment, net $ 160,778 $ 160,651 |
GOODWILL AND IDENTIFIABLE INT_2
GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS | |
Schedule of gross carrying amount and accumulated amortization for each type of identifiable intangible asset | December 31, 2022 December 31, 2021 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 $ (65,069) $ 12,304 $ 69,403 $ (60,316) $ 9,087 Other intangibles 119,813 (71,121) 48,692 116,799 (60,660) 56,139 Total amortizing intangibles $ 197,186 $ (136,190) $ 60,996 $ 186,202 $ (120,976) $ 65,226 |
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): Year Amount 2023 $ 13,698 2024 11,601 2025 9,883 2026 8,745 2027 3,333 Thereafter 13,736 Total $ 60,996 |
Schedule of components of goodwill | December 31, December 31, December 31, (000’s omitted) 2020 Activity 2021 Activity 2022 Goodwill $ 793,708 $ 5,401 $ 799,109 $ 42,732 $ 841,841 |
Schedule of changes in carrying value of MSRs and associated valuation allowance | (000’s omitted) 2022 2021 Carrying value before valuation allowance at beginning of period $ 1,144 $ 1,430 Additions 83 233 Acquisitions 2,879 0 Amortization (801) (519) Carrying value before valuation allowance at end of period 3,305 1,144 Valuation allowance balance at beginning of period 0 (219) Impairment charges (676) (55) Impairment recoveries 0 274 Valuation allowance balance at end of period (676) 0 Net carrying value at end of period $ 2,629 $ 1,144 Fair value of MSRs at end of period $ 5,107 $ 1,469 Principal balance of mortgage loans sold during the year $ 5,309 $ 20,133 Principal balance of loans serviced for others $ 583,109 $ 296,506 Custodial escrow balances maintained in connection with loans serviced for others $ 10,534 $ 4,934 |
Schedule of key economic assumptions used to estimate value of MSRs | The following table summarizes the key economic assumptions used to estimate the value of the MSRs at December 31: 2022 2021 Weighted-average contractual life (in years) 21.6 21.4 Weighted-average constant prepayment rate (CPR) 7.7 % 24.5 % Weighted-average discount rate 4.9 % 2.6 % |
DEPOSITS (Tables)
DEPOSITS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
DEPOSITS | |
Schedule of deposits | Deposits recorded in the consolidated statements of condition consist of the following at December 31: (000’s omitted) 2022 2021 Noninterest checking $ 4,140,617 $ 3,921,663 Interest checking 3,231,096 3,201,225 Savings 2,433,922 2,255,961 Money market 2,299,965 2,603,988 Time 906,708 928,331 Total deposits $ 13,012,308 $ 12,911,168 |
Schedule of interest on deposits | Interest on deposits recorded in the consolidated statements of income consists of the following at December 31: (000’s omitted) 2022 2021 2020 Interest on interest checking $ 3,340 $ 1,142 $ 2,182 Interest on savings 671 598 665 Interest on money market 4,019 1,393 2,685 Interest on time 7,014 8,498 11,229 Total interest on deposits $ 15,044 $ 11,631 $ 16,761 |
Schedule of maturities of time deposits | The approximate maturities of time deposits at December 31, 2022 are as follows: Accounts $250,000 (000’s omitted) All Accounts or Greater 2023 $ 514,658 $ 67,302 2024 282,044 53,970 2025 63,554 5,472 2026 24,567 262 2027 21,796 2,075 Thereafter 89 0 Total $ 906,708 $ 129,081 |
BORROWINGS (Tables)
BORROWINGS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
BORROWINGS | |
Schedule of outstanding borrowings | Outstanding borrowings at December 31 are as follows: (000’s omitted) 2022 2021 Subordinated notes payable, includes premium of $249 and $277, respectively $ 3,249 $ 3,277 Securities sold under agreement to repurchase, short term 346,652 324,720 Overnight borrowings 768,400 0 Other FHLB borrowings, includes discount of $319 and $0, respectively 19,474 1,888 Total borrowings $ 1,137,775 $ 329,885 |
Schedule of borrowings by contractual maturity dates | Borrowings at December 31, 2022 have contractual maturity dates as follows: Weighted-average Carrying Rate at (000’s omitted, except rate) Value December 31, 2022 January 3, 2023 $ 1,115,052 3.32 % January 17, 2023 2,000 2.33 % February 8, 2023 190 1.79 % July 3, 2023 470 2.25 % October 23, 2023 364 1.50 % January 29, 2024 2,013 3.62 % January 7, 2025 4,951 2.78 % January 29, 2025 4,937 2.59 % February 28, 2025 1,923 1.38 % October 1, 2025 262 1.50 % March 1, 2027 1,858 1.55 % February 28, 2028 3,249 4.67 % March 1, 2029 506 2.50 % Total $ 1,137,775 3.30 % |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
INCOME TAXES | |
Schedule of provision for income taxes | The provision for income taxes for the years ended December 31 is as follows: (000’s omitted) 2022 2021 2020 Current: Federal $ 41,025 $ 35,507 $ 35,728 State and other 9,899 8,158 8,008 Deferred: Federal 1,163 5,493 (2,005) State and other 146 2,496 (331) Provision for income taxes $ 52,233 $ 51,654 $ 41,400 |
Schedule of net deferred tax liability | Components of the net deferred tax asset, included in other assets, as of December 31, 2022 and of the net deferred tax liability, included in other liabilities, as of December 31, 2021 are as follows: (000’s omitted) 2022 2021 Investment securities $ 191,953 $ 0 Allowance for credit losses 15,346 12,435 Employee benefits 5,775 7,708 Operating lease liabilities 7,552 7,955 Other, net 4,385 1,250 Deferred tax asset 225,011 29,348 Investment securities 0 7,227 Goodwill and intangibles 39,454 41,917 Operating lease right-of-use assets 7,303 7,693 Loan origination costs 9,731 8,993 Depreciation 96 535 Mortgage servicing rights 640 278 Pension 18,154 22,950 Deferred tax liability 75,378 89,593 Net deferred tax asset (liability) $ 149,633 $ (60,245) |
Schedule of reconciliation of the differences between the federal statutory income tax rate | A reconciliation of the differences between the federal statutory income tax rate and the effective tax rate for the years ended December 31 is shown in the following table: 2022 2021 2020 Federal statutory income tax rate 21.0 % 21.0 % 21.0 % Increase (reduction) in taxes resulting from: Tax-exempt interest (1.3) (1.1) (1.5) State income taxes, net of federal benefit 3.3 3.6 3.0 Stock-based compensation (0.3) (0.9) (0.8) Federal tax credits (1.0) (1.0) (1.3) Other, net 0.0 (0.2) (0.3) Effective income tax rate 21.7 % 21.4 % 20.1 % |
PENSION AND OTHER BENEFIT PLA_2
PENSION AND OTHER BENEFIT PLANS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
PENSION AND OTHER BENEFIT PLANS | |
Schedule of funded status of the Company's plans reconciled with amounts reported | Pension Benefits Post-retirement Benefits (000’s omitted) 2022 2021 2022 2021 Change in benefit obligation: Benefit obligation at the beginning of year $ 183,270 $ 190,361 $ 1,529 $ 1,718 Service cost 4,959 5,920 0 0 Interest cost 5,334 5,036 68 44 Plan amendment / acquisition 1,851 0 536 0 Participant contributions 0 0 0 0 Deferred actuarial (gain)/loss (31,759) (4,881) (306) (85) Benefits paid (12,294) (13,166) (171) (148) Benefit obligation at end of year 151,361 183,270 1,656 1,529 Change in plan assets: Fair value of plan assets at beginning of year 290,687 272,600 0 0 Actual return of plan assets (34,967) 27,614 0 0 Participant contributions 0 0 0 0 Employer contributions 906 3,639 171 148 Plan acquisition 0 0 0 0 Benefits paid (12,294) (13,166) (171) (148) Fair value of plan assets at end of year 244,332 290,687 0 0 Over/(Under) funded status at year end $ 92,971 $ 107,417 $ (1,656) $ (1,529) Amounts recognized in the consolidated statement of condition were: Other assets $ 106,986 $ 127,538 $ 0 $ 0 Other liabilities (14,015) (20,121) (1,656) (1,529) Amounts recognized in accumulated other comprehensive loss/(income) (“AOCI”) were: Net loss $ 38,894 $ 16,977 $ 255 $ 585 Net prior service cost (credit) 3,112 3,969 (728) (907) Pre-tax AOCI 42,006 20,946 (473) (322) Taxes (10,351) (5,236) 119 82 AOCI at year end $ 31,655 $ 15,710 $ (354) $ (240) |
Schedule of Amounts recognized in accumulated other comprehensive income, net of tax | Amounts recognized in accumulated other comprehensive income, net of tax, for the year ended December 31, are as follows: Pension Benefits Post-retirement Benefits (000’s omitted) 2022 2021 2022 2021 Prior service cost/(credit) $ (648) $ (288) $ 135 $ 136 Net (gain) loss 16,593 (13,152) (249) (99) Total $ 15,945 $ (13,440) $ (114) $ 37 |
Schedule of weighted-average assumptions used to determine the benefit obligations | Pension Benefits Post-retirement Benefits 2022 2021 2022 2021 Discount rate 5.40 % 3.10 % 5.40 % 3.10 % Expected return on plan assets 6.70 % 6.70 % N/A N/A Rate of compensation increase 4.50% for 2023, 4.00% for 2022, % 3.50% for 2024 + 3.50% for 2023 + N/A N/A Interest crediting rates 6.00% while employed, 6.00% while employed, 3.55% after termination 1.94% after termination N/A N/A |
Schedule of net periodic benefit cost | The net periodic benefit cost as of December 31 is as follows: Pension Benefits Post-retirement Benefits (000’s omitted) 2022 2021 2020 2022 2021 2020 Service cost $ 4,959 $ 5,920 $ 5,750 $ 0 $ 0 $ 0 Interest cost 5,334 5,036 5,657 68 44 57 Expected return on plan assets (19,025) (18,783) (16,306) 0 0 0 Plan amendment (556) 0 (637) 0 0 0 Amortization of unrecognized net loss 842 3,600 3,239 23 45 40 Amortization of prior service cost 615 379 241 (179) (179) (179) Net periodic (benefit) $ (7,831) $ (3,848) $ 2,056 $ (88) $ (90) $ (82) |
Schedule of weighted-average assumptions used to determine the net periodic pension cost | The weighted-average assumptions used to determine the net periodic pension cost for the years ended December 31 are as follows: Pension Benefits Post-retirement Benefits 2022 2021 2020 2022 2021 2020 Discount rate 3.10 % 2.80 % 3.50 % 3.10 % 2.80 % 3.60 % Expected return on plan assets 6.70 % 7.00 % 7.00 % N/A N/A N/A Rate of compensation 4.00% for 2022, increase 3.50% for 2023 + 3.50 % 3.50 % N/A N/A N/A Interest crediting rates 6.00% while employed, 6.00% while employed, 6.00% while employed, 1.94% after termination 1.42% after termination 2.16% after termination N/A N/A N/A |
Schedule of amount of benefit payments | Pension Post-retirement (000’s omitted) Benefits Benefits 2023 $ 11,583 $ 192 2024 11,965 154 2025 11,693 152 2026 12,934 150 2027 12,723 148 2028-2032 64,686 972 |
Schedule of fair value of defined benefit plan assets by asset category | The fair values of the Company’s defined benefit pension plan assets at December 31, 2022 by asset category are as follows: Quoted Prices in Active Significant Significant Markets for Observable Unobservable Identical Assets Inputs Inputs Asset category (000’s omitted) Level 1 Level 2 Level 3 Total Cash equivalents $ 18,625 $ 0 $ 0 $ 18,625 Equity securities: U.S. large-cap 52,682 0 0 52,682 U.S. mid/small cap 16,432 0 0 16,432 CBU common stock 6,427 0 0 6,427 International 51,725 0 0 51,725 Other 1,273 0 0 1,273 128,539 0 0 128,539 Fixed income securities: Government securities 44,995 11,567 0 56,562 Investment grade bonds 12,964 5,538 0 18,502 High yield (a) 7,134 0 0 7,134 65,093 17,105 0 82,198 Other investments (b) 14,342 0 0 14,342 Total (c) $ 226,599 $ 17,105 $ 0 $ 243,704 The fair values of the Company’s defined benefit pension plan assets at December 31, 2021 by asset category are as follows: Quoted Prices in Active Significant Significant Markets for Observable Unobservable Identical Assets Inputs Inputs Asset category (000’s omitted) Level 1 Level 2 Level 3 Total Cash equivalents $ 19,605 $ 0 $ 0 $ 19,605 Equity securities: U.S. large-cap 75,180 0 0 75,180 U.S. mid/small cap 12,052 0 0 12,052 CBU common stock 7,604 0 0 7,604 International 73,891 0 0 73,891 Other 1,091 0 0 1,091 169,818 0 0 169,818 Fixed income securities: Government securities 19,988 5,974 0 25,962 Investment grade bonds 41,374 136 0 41,510 High yield (a) 8,625 0 0 8,625 69,987 6,110 0 76,097 Other investments (b) 24,727 0 0 24,727 Total (c) $ 284,137 $ 6,110 $ 0 $ 290,247 (a) This category is exchange-traded funds representing a diversified index of high yield corporate bonds. (b) This category is comprised of exchange-traded funds and mutual funds holding non-traditional investment classes including private equity funds and alternative exchange funds. (c) Excludes dividends and interest receivable totaling $0.6 million and $0.4 million at December 31, 2022 and 2021, respectively. |
STOCK-BASED COMPENSATION PLANS
STOCK-BASED COMPENSATION PLANS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
STOCK-BASED COMPENSATION PLANS | |
Schedule of Activity in this long-term incentive program | Stock Options Weighted- average Exercise Outstanding Price of Shares Outstanding at December 31, 2020 1,542,259 $ 45.49 Granted 168,976 79.68 Exercised (310,423) 40.17 Forfeited (8,107) 61.56 Outstanding at December 31, 2021 1,392,705 50.73 Granted 173,313 71.78 Exercised (67,566) 41.61 Forfeited (13,430) 67.88 Outstanding at December 31, 2022 1,485,022 53.45 Exercisable at December 31, 2022 1,005,851 $ 47.31 |
Schedule of information about stock options outstanding under the Company's stock option plan | The following table summarizes the information about stock options outstanding under the Company’s stock option plan at December 31, 2022: Options outstanding Options exercisable Weighted- Weighted- Weighted- average average average Exercise Remaining Exercise Range of Exercise Price Shares Price Life (years) Shares Price $0.00 – $25.00 40,002 $ 23.04 4.00 40,002 $ 23.04 $25.01 – $35.00 51,744 29.79 0.21 51,744 29.79 $35.01 – $45.00 386,999 37.07 2.45 386,999 37.07 $45.01 – $55.00 674,921 55.55 5.86 472,240 56.06 $55.01 – $81.00 331,356 75.67 8.68 54,866 78.44 TOTAL 1,485,022 $ 47.31 5.35 1,005,851 $ 47.31 |
Schedule of valuation assumptions used to estimate value of stock options | 2022 2021 2020 Weighted-average Fair Value of Options Granted $ 17.86 $ 18.43 $ 10.86 Assumptions: Weighted-average expected life (in years) 6.50 6.50 6.50 Future dividend yield 2.41 % 2.48 % 2.57 % Share price volatility 29.88 % 30.09 % 29.29 % Weighted-average risk-free interest rate 2.16 % 1.28 % 0.67 % |
Schedule of activity unvested restricted stock awards | Restricted Weighted-average Shares grant date fair value Unvested at December 31, 2020 127,432 $ 53.97 Awards 51,456 79.51 Forfeitures (2,041) 55.39 Vestings (47,399) 53.13 Unvested at December 31, 2021 129,448 64.32 Awards 56,871 71.58 Forfeitures (2,940) 67.44 Vestings (49,859) 62.86 Unvested at December 31, 2022 133,520 $ 67.89 |
Schedule of performance restricted shares and weighted-average grant date fair value | Performance Restricted Weighted-average Shares grant date fair value Unvested at December 31, 2020 48,976 $ 29.71 Awards 0 0.00 Forfeitures (578) 29.71 Vestings (578) 29.71 Unvested at December 31, 2021 47,820 29.71 Awards 35,815 34.93 Forfeitures (51,000) 30.02 Vestings (636) 35.89 Unvested at December 31, 2022 31,999 $ 34.93 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
EARNINGS PER SHARE | |
Schedule of reconciliation of basic to diluted earnings per share | The following is a reconciliation of basic to diluted earnings per share for the years ended December 31, 2022, 2021 and 2020. (000’s omitted, except per share data) 2022 2021 2020 Net income $ 188,081 $ 189,694 $ 164,676 Income attributable to unvested stock-based compensation awards (533) (445) (514) Income available to common shareholders $ 187,548 $ 189,249 $ 164,162 Weighted-average common shares outstanding – basic 53,896 53,977 52,969 Basic earnings per share $ 3.48 $ 3.51 $ 3.10 Net income $ 188,081 $ 189,694 $ 164,676 Income attributable to unvested stock-based compensation awards (533) (445) (514) Income available to common shareholders $ 187,548 $ 189,249 $ 164,162 Weighted-average common shares outstanding 53,896 53,977 52,969 Assumed exercise of stock options 312 423 352 Weighted-average common shares outstanding – diluted 54,208 54,400 53,321 Diluted earnings per share $ 3.46 $ 3.48 $ 3.08 Cash dividends declared per share $ 1.74 $ 1.70 $ 1.66 |
COMMITMENTS, CONTINGENT LIABI_2
COMMITMENTS, CONTINGENT LIABILITIES AND RESTRICTIONS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
COMMITMENTS, CONTINGENT LIABILITIES AND RESTRICTIONS | |
Schedule of The contract amounts of commitments and contingencies | The contract amounts of commitments and contingencies are as follows at December 31: (000’s omitted) 2022 2021 Commitments to extend credit $ 1,486,791 $ 1,443,879 Standby letters of credit 57,347 42,684 Total $ 1,544,138 $ 1,486,563 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Operating Leases | |
Schedule of components of lease | (000’s omitted) 2022 2021 2020 Operating lease cost $ 8,568 $ 8,397 $ 9,000 Variable lease cost 108 50 53 Short-term lease cost (1) 65 148 369 Total lease cost $ 8,741 $ 8,595 $ 9,422 (1) |
Schedule of supplemental Cash Flow Information Related to Leases | (000’s omitted) 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows for operating leases $ 8,402 $ 8,203 Right-of-use assets obtained in exchange for lease obligations: Operating leases 6,758 5,344 |
Schedule of supplemental Balance Sheet Information Related to Leases | (000’s omitted, except lease term and discount rate) 2022 2021 Operating leases Operating lease right-of-use assets $ 30,069 $ 31,754 Operating lease liabilities 31,091 32,833 Weighted average remaining lease term Operating leases 4.9 years 5.4 years Weighted average discount rate Operating leases 2.89 % 2.62 % |
Schedule of maturities of Lease Liabilities | Maturities of lease liabilities as of December 31, 2022 are as follows: (000’s omitted) Operating Leases 2023 $ 8,995 2024 7,579 2025 5,992 2026 4,180 2027 2,547 Thereafter 4,333 Total lease payments 33,626 Less imputed interest (2,535) Total $ 31,091 Maturities of lease liabilities as of December 31, 2021 are as follows: (000’s omitted) Operating Leases 2022 $ 8,729 2023 7,640 2024 5,920 2025 4,401 2026 3,062 Thereafter 5,846 Total lease payments 35,598 Less imputed interest (2,765) Total $ 32,833 |
706 North Clinton | |
Operating Leases | |
Schedule of maturities of Lease Liabilities | The maturities of the Company’s related party lease liabilities as of December 31, 2022 are as follows: (000’s omitted) 706 North Clinton, LLC 2023 $ 591 2024 591 2025 605 2026 615 2027 506 Thereafter 1,221 Total lease payments 4,129 Less imputed interest (493) Total $ 3,636 The maturities of the Company’s related party lease liabilities as of December 31, 2021 are as follows: (000’s omitted) 706 North Clinton, LLC 2022 $ 591 2023 591 2024 591 2025 605 2026 614 Thereafter 1,727 Total lease payments 4,719 Less imputed interest (633) Total $ 4,086 |
REGULATORY MATTERS (Tables)
REGULATORY MATTERS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
REGULATORY MATTERS | |
Schedule of capital ratios and amounts | For capital adequacy To be well-capitalized For capital adequacy purposes plus Capital under prompt Actual purposes Conservation Buffer corrective action (000’s omitted) Amount Ratio Amount Ratio Amount Ratio Amount Ratio Community Bank System, Inc.: 2022 Tier 1 Leverage ratio $ 1,381,598 8.79 % $ 628,485 4.00 % $ 785,606 5.00 % Tier 1 risk-based capital 1,381,598 15.71 % 527,695 6.00 % $ 747,568 8.50 % 703,593 8.00 % Total risk-based capital 1,442,529 16.40 % 703,593 8.00 % 923,466 10.50 % 879,491 10.00 % Common equity tier 1 capital 1,381,439 15.71 % 395,771 4.50 % 615,644 7.00 % 571,669 6.50 % 2021 Tier 1 Leverage ratio $ 1,331,368 9.09 % $ 585,594 4.00 % $ 731,993 5.00 % Tier 1 risk-based capital 1,331,368 18.60 % 429,559 6.00 % $ 608,542 8.50 % 572,746 8.00 % Total risk-based capital 1,380,458 19.28 % 572,746 8.00 % 751,729 10.50 % 715,932 10.00 % Common equity tier 1 capital 1,331,259 18.60 % 322,169 4.50 % 501,152 7.00 % 465,356 6.50 % Community Bank, N.A.: 2022 Tier 1 Leverage ratio $ 1,122,639 7.26 % $ 618,874 4.00 % $ 773,593 5.00 % Tier 1 risk-based capital 1,122,639 12.86 % 523,733 6.00 % $ 741,955 8.50 % 698,311 8.00 % Total risk-based capital 1,183,570 13.56 % 698,311 8.00 % 916,533 10.50 % 872,889 10.00 % Common equity tier 1 capital 1,122,480 12.86 % 392,800 4.50 % 611,022 7.00 % 567,378 6.50 % 2021 Tier 1 Leverage ratio $ 1,058,091 7.26 % $ 582,631 4.00 % $ 728,289 5.00 % Tier 1 risk-based capital 1,058,091 14.92 % 425,393 6.00 % $ 602,640 8.50 % 567,190 8.00 % Total risk-based capital 1,107,181 15.62 % 567,190 8.00 % 744,437 10.50 % 708,988 10.00 % Common equity tier 1 capital 1,057,982 14.92 % 319,045 4.50 % 496,292 7.00 % 460,842 6.50 % |
PARENT COMPANY STATEMENTS (Tabl
PARENT COMPANY STATEMENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
PARENT COMPANY STATEMENTS | |
Condensed Statements of Condition of Parent Company | The condensed statements of condition of the parent company, Community Bank System, Inc., at December 31 are as follows: (000's omitted) 2022 2021 Assets: Cash and cash equivalents $ 160,045 $ 154,374 Investment securities 7,881 8,679 Investment in and advances to: Bank subsidiary 1,194,314 1,721,520 Non-bank subsidiaries 207,172 232,096 Other assets 17,106 18,462 Total assets $ 1,586,518 $ 2,135,131 Liabilities and shareholders' equity: Accrued interest and other liabilities $ 31,564 $ 31,047 Borrowings 3,249 3,277 Shareholders' equity 1,551,705 2,100,807 Total liabilities and shareholders' equity $ 1,586,518 $ 2,135,131 |
Condensed Statements of Income of Parent Company | The condensed statements of income of the parent company for the years ended December 31 is as follows: (000's omitted) 2022 2021 2020 Revenues: Dividends from subsidiaries: Bank subsidiary $ 53,000 $ 125,000 $ 105,000 Non-bank subsidiaries 55,000 14,000 13,500 Interest and dividends on investments 342 245 168 Total revenues 108,342 139,245 118,668 Expenses: Interest on borrowings 153 446 2,546 Acquisition expenses 0 0 450 Gain on debt extinguishment 0 0 (421) Other expenses 6,091 5,717 4,945 Total expenses 6,244 6,163 7,520 Income before tax benefit and equity in undistributed net income of subsidiaries 102,098 133,082 111,148 Income tax benefit 2,942 3,964 3,739 Income before equity in undistributed net income of subsidiaries 105,040 137,046 114,887 Equity in undistributed net income of subsidiaries 83,041 52,648 49,789 Net income $ 188,081 $ 189,694 $ 164,676 Other comprehensive (loss) income, net of tax: Changes in other comprehensive (loss) income related to pension and other post retirement obligations (15,831) 13,403 6,009 Changes in other comprehensive (loss) income related to unrealized (losses) gains on investment securities (619,981) (126,107) 66,294 Other comprehensive (loss) income (635,812) (112,704) 72,303 Comprehensive (loss) income $ (447,731) $ 76,990 $ 236,979 |
Statements of Cash Flows of Parent Company | The statements of cash flows of the parent company for the years ended December 31 is as follows: (000's omitted) 2022 2021 2020 Operating activities: Net income $ 188,081 $ 189,694 $ 164,676 Adjustments to reconcile net income to net cash provided by operating activities Equity in undistributed net income of subsidiaries (83,041) (52,648) (49,789) Net change in other assets and other liabilities 2,155 (3,050) 1,740 Net cash provided by operating activities 107,195 133,996 116,627 Investing activities: Purchases of investment securities (175) (5,173) (3,000) Cash paid for acquisitions, net of cash acquired of $0, $0, and $448, respectively 0 0 (20,892) (Capital contributions to)/Return of capital from 0 (12,918) 2 Net cash used in investing activities (175) (18,091) (23,890) Financing activities: Repayment of advances from subsidiaries (506) (482) (482) Repayment of borrowings 0 (77,320) (12,062) Issuance of common stock 8,922 16,155 22,211 Purchase of treasury stock (16,614) (5,106) (271) Sale of treasury stock 0 0 85 Increase in deferred compensation arrangements 236 252 271 Cash dividends paid (93,387) (91,051) (87,131) Net cash used in financing activities (101,349) (157,552) (77,379) Change in cash and cash equivalents 5,671 (41,647) 15,358 Cash and cash equivalents at beginning of year 154,374 196,021 180,663 Cash and cash equivalents at end of year $ 160,045 $ 154,374 $ 196,021 Supplemental disclosures of cash flow information: Cash paid for interest $ 180 $ 560 $ 2,555 Supplemental disclosures of noncash financing activities: Dividends declared and unpaid $ 23,763 $ 23,235 $ 22,695 Advances from subsidiaries 506 482 932 Common stock issued for acquisition 0 0 76,942 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
FAIR VALUE | |
Fair Value Measured on a Recurring Basis | 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 December 31, 2021 Total Fair (000’s omitted) Level 1 Level 2 Level 3 Value Available-for-sale investment securities: U.S. Treasury and agency securities $ 3,900,924 $ 97,640 $ 0 $ 3,998,564 Obligations of state and political subdivisions 0 430,289 0 430,289 Government agency mortgage-backed securities 0 477,056 0 477,056 Corporate debt securities 0 7,962 0 7,962 Government agency collateralized mortgage obligations 0 20,339 0 20,339 Total available-for-sale investment securities 3,900,924 1,033,286 0 4,934,210 Equity securities 463 0 0 463 Commitments to originate real estate loans for sale 0 0 51 51 Forward sales commitments 0 32 0 32 Interest rate swap agreements asset 0 296 0 296 Interest rate swap agreements liability 0 (3) 0 (3) Total $ 3,901,387 $ 1,033,611 $ 51 $ 4,935,049 |
Assets and Liabilities Measured on a Non-Recurring Basis | December 31, 2022 December 31, 2021 Total Fair Total Fair (000's omitted) Level 1 Level 2 Level 3 Value Level 1 Level 2 Level 3 Value Individually assessed loans $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 1,820 $ 1,820 Other real estate owned 0 0 503 503 0 0 718 718 Mortgage servicing rights 0 0 1,169 1,169 0 0 810 810 Contingent consideration 0 0 (2,800) (2,800) 0 0 (3,100) (3,100) Total $ 0 $ 0 $ (1,128) $ (1,128) $ 0 $ 0 $ 248 $ 248 |
Significant Unobservable Inputs, Fair Value Valuation Techniques | The significant unobservable inputs used in the determination of fair value of assets classified as Level 3 on a recurring or non-recurring basis as of December 31, 2022 are as follows: Significant Significant Unobservable Valuation Unobservable Input Range (000's omitted, except per loan data) Fair Value Technique 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 fair value of assets classified as Level 3 on a recurring or non-recurring basis as of December 31, 2021 are as follows: Significant Significant Unobservable Valuation Unobservable Input Range (000's omitted, except per loan data) Fair Value Technique Inputs (Weighted Average) Individually assessed loans $ 1,820 Fair value of collateral Estimated cost of disposal/market adjustment 9.0% - 43.1% (43.1%) Other real estate owned 718 Fair value of collateral Estimated cost of disposal/market adjustment 31.8% - 42.3% (33.3%) Commitments to originate real estate loans for sale 51 Discounted cash flow Embedded servicing value 1.0 % Mortgage servicing rights 810 Discounted cash flow Weighted average constant prepayment rate 6.4% - 15.2% (14.0%) Weighted average discount rate 2.3% - 2.7% (2.6%) Adequate compensation $7/loan Contingent consideration (3,100) Discounted cash flow Discount rate 1.4% - 1.7% (1.5%) Probability adjusted level of retained revenue $3.0 million - $5.8 million |
Carrying Amounts and Estimated Fair Values of Other Financial Instruments | December 31, 2022 December 31, 2021 Carrying Carrying (000’s omitted) Value Fair Value Value Fair Value Financial assets: Net loans $ 8,748,335 $ 8,696,185 $ 7,323,770 $ 7,523,024 Held-to-maturity securities 1,079,695 1,034,795 0 0 Financial liabilities: Deposits 13,012,308 12,981,487 12,911,168 12,911,197 Overnight borrowings 768,400 768,400 0 0 Securities sold under agreement to repurchase, short-term 346,652 346,652 324,720 324,720 Other Federal Home Loan Bank borrowings 19,474 19,377 1,888 1,907 Subordinated notes payable 3,249 3,249 3,277 3,277 |
VARIABLE INTEREST ENTITIES (Tab
VARIABLE INTEREST ENTITIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
VARIABLE INTEREST ENTITIES | |
Schedule of Carrying Amount and Classification of Assets and Liabilities of 706 North Clinton | The carrying amount of the assets and liabilities of 706 North Clinton and the classification of these assets and liabilities in the Company’s consolidated statements of condition at December 31 is as follows: (000’s omitted) 2022 2021 Cash and cash equivalents $ 226 $ 198 Premises and equipment, net 5,455 5,618 Other assets 65 57 Total assets $ 5,746 $ 5,873 Accrued interest and other liabilities / Total liabilities $ 0 $ 0 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SEGMENT INFORMATION | |
Schedule of Segment Reporting Information by Segment | Employee Consolidated (000’s omitted) Banking Benefit Services All Other Eliminations Total 2022 Net interest income $ 420,273 $ 319 $ 38 $ 0 $ 420,630 Provision for credit losses 14,773 0 0 0 14,773 Noninterest revenue 75,480 117,956 73,126 (7,837) 258,725 Amortization of intangible assets 4,753 6,607 3,854 0 15,214 Acquisition expenses 5,018 3 0 0 5,021 Acquisition-related contingent consideration adjustment 0 (500) 200 0 (300) Other operating expenses 283,942 71,466 56,762 (7,837) 404,333 Income before income taxes $ 187,267 $ 40,699 $ 12,348 $ 0 $ 240,314 Assets $ 15,616,885 $ 226,135 $ 96,924 $ (104,293) $ 15,835,651 Goodwill $ 732,088 $ 85,384 $ 24,369 $ 0 $ 841,841 Core deposit intangibles & Other intangibles $ 12,304 $ 33,411 $ 15,281 $ 0 $ 60,996 2021 Net interest income $ 374,078 $ 293 $ 41 $ 0 $ 374,412 Provision for credit losses (8,839) 0 0 0 (8,839) Noninterest revenue 67,910 116,621 68,834 (7,130) 246,235 Amortization of intangible assets 4,744 6,033 3,274 0 14,051 Acquisition expenses 638 36 27 0 701 Acquisition-related contingent consideration adjustment 0 200 0 0 200 Other operating expenses 265,525 64,423 50,368 (7,130) 373,186 Income before income taxes $ 179,920 $ 46,222 $ 15,206 $ 0 $ 241,348 Assets $ 15,325,732 $ 257,879 $ 97,391 $ (128,345) $ 15,552,657 Goodwill $ 689,868 $ 85,321 $ 23,920 $ 0 $ 799,109 Core deposit intangibles & Other intangibles $ 9,087 $ 40,018 $ 16,121 $ 0 $ 65,226 2020 Net interest income $ 367,237 $ 943 $ 223 $ 0 $ 368,403 Provision for credit losses 14,212 0 0 0 14,212 Noninterest revenue 69,578 103,456 61,599 (6,214) 228,419 Amortization of intangible assets 5,515 5,724 3,058 0 14,297 Acquisition expenses 4,933 0 0 0 4,933 Other operating expenses 255,955 60,709 46,854 (6,214) 357,304 Income before income taxes $ 156,200 $ 37,966 $ 11,910 $ 0 $ 206,076 Assets $ 13,762,325 $ 217,780 $ 82,849 $ (131,860) $ 13,931,094 Goodwill $ 690,121 $ 83,275 $ 20,312 $ 0 $ 793,708 Core deposit intangibles & Other intangibles $ 13,831 $ 32,051 $ 7,058 $ 0 $ 52,940 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 USD ($) segment component country subsidiary Office item | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Nature of Operations | |||
Number of significant consolidated subsidiaries owned | subsidiary | 2 | ||
Number of bank branches | Office | 203 | ||
Number of operating location | item | 13 | ||
Risk and Uncertainties | |||
Number of main components of economic risk | component | 3 | ||
Wealth Management Services | |||
Number of types of performance obligations | item | 2 | ||
Contract Balances | |||
Accounts receivable | $ 33.3 | $ 31.6 | |
Unbilled fee revenue | 8.8 | 9.1 | |
Unearned revenue | 1.1 | 2.2 | |
Cash and Cash Equivalents | |||
Cash due from banks | 10 | 11 | |
Allowance for Credit Losses - Debt Securities | |||
Accrued interest and fees receivable | $ 25.1 | 16.7 | |
Debt Securities, Held-to-Maturity, Accrued Interest, after Allowance for Credit Loss, Statement of Financial Position [Extensible Enumeration] | Interest Receivable | ||
Other Real Estate | |||
Other real estate | $ 0.5 | 0.7 | |
Investments in Real Estate Limited Partnerships | |||
Impairment losses related to real estate partnerships | 0 | ||
Advertising | |||
Advertising costs | 8.2 | 5.2 | $ 6.1 |
Available-for-sale Securities | |||
Allowance for Credit Losses - Debt Securities | |||
Accrued interest and fees receivable | 19.3 | $ 15.8 | |
Accrued interest receivable on held-to-maturity securities, included in accrued interest and fees receivable | $ 4.7 | ||
Land Improvements | |||
Premises and Equipment | |||
Estimated useful life | 20 years | ||
Minimum | LITCH | |||
Investments in Real Estate Limited Partnerships | |||
Ownership interest | 5% | ||
Minimum | Premises and Equipment | |||
Premises and Equipment | |||
Estimated useful life | 2 years | ||
Minimum | Software | |||
Premises and Equipment | |||
Estimated useful life | 3 years | ||
Minimum | Hardware | |||
Premises and Equipment | |||
Estimated useful life | 3 years | ||
Minimum | Building and Building Improvements | |||
Premises and Equipment | |||
Estimated useful life | 10 years | ||
Minimum | Core deposit intangibles | |||
Intangible Assets | |||
Intangible asset useful life (amortization period) | 7 years | ||
Minimum | Customer relationships | |||
Intangible Assets | |||
Intangible asset useful life (amortization period) | 7 years | ||
Maximum | LITCH | |||
Investments in Real Estate Limited Partnerships | |||
Ownership interest | 99.99% | ||
Maximum | Premises and Equipment | |||
Premises and Equipment | |||
Estimated useful life | 20 years | ||
Maximum | Software | |||
Premises and Equipment | |||
Estimated useful life | 7 years | ||
Maximum | Hardware | |||
Premises and Equipment | |||
Estimated useful life | 7 years | ||
Maximum | Building and Building Improvements | |||
Premises and Equipment | |||
Estimated useful life | 40 years | ||
Maximum | Core deposit intangibles | |||
Intangible Assets | |||
Intangible asset useful life (amortization period) | 20 years | ||
Maximum | Customer relationships | |||
Intangible Assets | |||
Intangible asset useful life (amortization period) | 20 years | ||
BPAS | |||
Nature of Operations | |||
Number of significant consolidated subsidiaries owned | segment | 5 | ||
Hand Benefits & Trust | |||
Nature of Operations | |||
Number of significant consolidated subsidiaries owned | segment | 1 | ||
NRS | |||
Nature of Operations | |||
Number of significant consolidated subsidiaries owned | segment | 1 | ||
Upstate New York | |||
Nature of Operations | |||
Number of counties where the bank has facilities | country | 42 | ||
Northeastern Pennsylvania | |||
Nature of Operations | |||
Number of counties where the bank has facilities | country | 6 | ||
Vermont | |||
Nature of Operations | |||
Number of counties where the bank has facilities | country | 12 | ||
Western Massachusetts | |||
Nature of Operations | |||
Number of counties where the bank has facilities | country | 1 |
ACQUISITIONS (Details)
ACQUISITIONS (Details) shares in Thousands, $ in Thousands | 1 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
Nov. 01, 2022 USD ($) | May 13, 2022 USD ($) item | Jan. 01, 2022 USD ($) | Aug. 02, 2021 USD ($) | Jul. 01, 2021 USD ($) | Jun. 01, 2021 USD ($) | Jun. 12, 2020 USD ($) country Office shares | Dec. 31, 2022 USD ($) country | Jun. 30, 2022 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) country | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Acquisitions | |||||||||||||
Purchase price of acquisition | $ 85,656 | ||||||||||||
Loans | $ 436,954 | 436,954 | |||||||||||
Investment securities | 11,305 | 11,305 | |||||||||||
Deposits | 522,295 | 522,295 | |||||||||||
Goodwill | $ 841,841 | 841,841 | $ 799,109 | $ 793,708 | |||||||||
Provision for credit losses | 14,773 | (8,839) | 14,212 | ||||||||||
Number of insurance agencies | 3 | ||||||||||||
Other intangibles | $ 2,500 | ||||||||||||
Contingent consideration | 0 | ||||||||||||
Cash | 668 | 29,329 | (34,360) | ||||||||||
Acquisition-related contingent consideration adjustment | $ (300) | 200 | 0 | ||||||||||
Upstate New York | |||||||||||||
Acquisitions | |||||||||||||
Number of counties where the bank has facilities | country | 42 | 42 | |||||||||||
Core deposit intangibles | |||||||||||||
Acquisitions | |||||||||||||
Deposits | $ 7,970 | $ 7,970 | |||||||||||
NuVantage Insurance Corp. | |||||||||||||
Acquisitions | |||||||||||||
Revenue earned | 1,300 | 700 | |||||||||||
Direct expenses | 1,300 | 600 | |||||||||||
Goodwill | 42,669 | 42,669 | |||||||||||
Cash | $ 2,900 | ||||||||||||
NuVantage Insurance Corp. | Minimum | Adjusted level of retained revenue | |||||||||||||
Acquisitions | |||||||||||||
Contingent consideration, measurement input 2 | $ 4,900 | 4,900 | |||||||||||
Fringe Benefits Design of Minnesota, Inc | |||||||||||||
Acquisitions | |||||||||||||
Revenue earned | 3,500 | 2,800 | |||||||||||
Direct expenses | $ 4,100 | 2,500 | |||||||||||
Goodwill | $ 2,100 | ||||||||||||
Period considered for additional consideration based on future retained revenue | 2 years | ||||||||||||
Consideration payable term | 3 years | ||||||||||||
Contingent consideration | $ 1,400 | ||||||||||||
Cash | $ 15,400 | ||||||||||||
Contingent consideration, measurement input | 0.0105 | 0.0609 | 0.0609 | ||||||||||
Acquisition-related contingent consideration adjustment | $ 100 | $ 500 | |||||||||||
Fair value contingent consideration adjustment | $ 400 | 1,100 | |||||||||||
Increase (decrease) in goodwill as a result of fair value adjustment | (3,600) | ||||||||||||
Fringe Benefits Design of Minnesota, Inc | Maximum | |||||||||||||
Acquisitions | |||||||||||||
Contingent consideration | $ 2,700 | 2,700 | |||||||||||
Fringe Benefits Design of Minnesota, Inc | Maximum | Adjusted level of retained revenue | |||||||||||||
Acquisitions | |||||||||||||
Contingent consideration, measurement input 2 | 5,800 | $ 5,100 | 5,100 | ||||||||||
Fringe Benefits Design of Minnesota, Inc | Minimum | |||||||||||||
Acquisitions | |||||||||||||
Contingent consideration | 0 | 0 | |||||||||||
Fringe Benefits Design of Minnesota, Inc | Minimum | Adjusted level of retained revenue | |||||||||||||
Acquisitions | |||||||||||||
Contingent consideration, measurement input 2 | 5,600 | ||||||||||||
Steuben Trust Corporation | |||||||||||||
Acquisitions | |||||||||||||
Revenue earned | 11,400 | 13,100 | 7,700 | ||||||||||
Direct expenses | 4,800 | 5,100 | 2,600 | ||||||||||
Purchase price of acquisition | 98,555 | ||||||||||||
Assets acquired | $ 607,800 | ||||||||||||
Loans | 339,700 | 339,017 | |||||||||||
Investment securities | 180,500 | 180,497 | |||||||||||
Deposits | (516,300) | 516,274 | |||||||||||
Goodwill | 20,000 | 19,981 | |||||||||||
Contingent consideration | 0 | ||||||||||||
Cash | $ 98,600 | ||||||||||||
Issuance of common shares (in shares) | shares | 1,360 | ||||||||||||
Issuance of common shares | $ 21,600 | ||||||||||||
Increase (decrease) in other liabilities as a result of reclassification and adjustment | (100) | ||||||||||||
Increase (decrease) in goodwill as a result of fair value adjustment | $ (4,900) | ||||||||||||
Steuben Trust Corporation | Western New York State | |||||||||||||
Acquisitions | |||||||||||||
Number of new counties where the bank has extended footprints | country | 2 | ||||||||||||
Number of counties where the bank has facilities | country | 4 | ||||||||||||
Number of branch locations | Office | 11 | ||||||||||||
Steuben Trust Corporation | Core deposit intangibles | |||||||||||||
Acquisitions | |||||||||||||
Deposits | $ 2,928 | ||||||||||||
Thomas Gregory Associates Insurance Brokers, Inc. | |||||||||||||
Acquisitions | |||||||||||||
Revenue earned | 3,100 | 600 | |||||||||||
Direct expenses | 1,800 | $ 600 | |||||||||||
Period considered for additional consideration based on future retained revenue | 3 years | ||||||||||||
Contingent consideration | $ 1,500 | ||||||||||||
Acquisition-related contingent consideration adjustment | 500 | 300 | |||||||||||
Fair value contingent consideration adjustment | $ 200 | 1,700 | |||||||||||
Thomas Gregory Associates Insurance Brokers, Inc. | Within two years from acquisition | |||||||||||||
Acquisitions | |||||||||||||
Consideration payable term | 2 years | ||||||||||||
Thomas Gregory Associates Insurance Brokers, Inc. | Within three years from acquisition | |||||||||||||
Acquisitions | |||||||||||||
Consideration payable term | 3 years | ||||||||||||
Thomas Gregory Associates Insurance Brokers, Inc. | Maximum | |||||||||||||
Acquisitions | |||||||||||||
Revenue earned | $ 3,800 | ||||||||||||
Contingent consideration | $ 3,400 | ||||||||||||
Cash | $ 3,400 | ||||||||||||
Contingent consideration, measurement input | 0.0109 | 6.21 | 6.21 | ||||||||||
Thomas Gregory Associates Insurance Brokers, Inc. | Maximum | Adjusted level of retained revenue | |||||||||||||
Acquisitions | |||||||||||||
Contingent consideration, measurement input 2 | $ 3,200 | $ 3,200 | |||||||||||
Thomas Gregory Associates Insurance Brokers, Inc. | Minimum | |||||||||||||
Acquisitions | |||||||||||||
Revenue earned | $ 2,300 | ||||||||||||
Contingent consideration | $ 0 | ||||||||||||
Cash | $ 0 | ||||||||||||
Contingent consideration, measurement input | 0.0082 | 5.87 | 5.87 | ||||||||||
Thomas Gregory Associates Insurance Brokers, Inc. | Minimum | Adjusted level of retained revenue | |||||||||||||
Acquisitions | |||||||||||||
Contingent consideration, measurement input 2 | $ 3,100 | $ 3,100 | |||||||||||
Elmira transaction | |||||||||||||
Acquisitions | |||||||||||||
Revenue earned | 12,100 | ||||||||||||
Direct expenses | 3,100 | ||||||||||||
Purchase price of acquisition | $ 82,200 | 82,179 | |||||||||||
Number of county | item | 5 | ||||||||||||
Assets acquired | $ 583,400 | ||||||||||||
Loans | 437,000 | 436,954 | 436,954 | ||||||||||
Investment securities | 11,300 | 11,305 | 11,305 | ||||||||||
Deposits | 522,300 | 522,295 | 522,295 | ||||||||||
Goodwill | 42,200 | 42,220 | 42,220 | ||||||||||
Provision for credit losses | 3,900 | ||||||||||||
Contingent consideration | 0 | ||||||||||||
Elmira transaction | Core deposit intangibles | |||||||||||||
Acquisitions | |||||||||||||
Deposits | $ 8,000 | $ 7,970 | 7,970 | ||||||||||
OneGroup | |||||||||||||
Acquisitions | |||||||||||||
Revenue earned | 900 | ||||||||||||
Direct expenses | 400 | ||||||||||||
Purchase price of acquisition | $ 2,500 | ||||||||||||
Cash | $ 11,600 | ||||||||||||
Customer list intangible | NuVantage Insurance Corp. | |||||||||||||
Acquisitions | |||||||||||||
Other intangibles | 1,400 | ||||||||||||
Customer list intangible | Fringe Benefits Design of Minnesota, Inc | |||||||||||||
Acquisitions | |||||||||||||
Other intangibles | $ 14,000 | ||||||||||||
Customer list intangible | Thomas Gregory Associates Insurance Brokers, Inc. | |||||||||||||
Acquisitions | |||||||||||||
Other intangibles | 10,900 | ||||||||||||
Goodwill | NuVantage Insurance Corp. | |||||||||||||
Acquisitions | |||||||||||||
Goodwill | $ 1,400 | ||||||||||||
Goodwill | Thomas Gregory Associates Insurance Brokers, Inc. | |||||||||||||
Acquisitions | |||||||||||||
Goodwill | $ 2,200 | ||||||||||||
Certain assets of JMD Associates | |||||||||||||
Acquisitions | |||||||||||||
Cash paid | $ 1,000 | ||||||||||||
Revenue earned | 100 | ||||||||||||
Direct expenses | $ 100 | ||||||||||||
Certain assets of JMD Associates | Noncompete agreement | |||||||||||||
Acquisitions | |||||||||||||
Cash paid | 100 | ||||||||||||
Certain assets of JMD Associates | Customer list intangible | |||||||||||||
Acquisitions | |||||||||||||
Cash paid | 400 | ||||||||||||
Certain assets of JMD Associates | Goodwill | |||||||||||||
Acquisitions | |||||||||||||
Cash paid | $ 500 |
ACQUISITIONS - Estimated Fair V
ACQUISITIONS - Estimated Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||||
May 13, 2022 | Aug. 02, 2021 | Jul. 01, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jan. 01, 2022 | Jun. 12, 2020 | |
Consideration : | ||||||||
Cash | $ 85,656 | |||||||
Community Bank System, Inc. common stock | 0 | |||||||
Contingent consideration | 0 | |||||||
Total net consideration | 85,656 | |||||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||||||
Cash and cash equivalents | 84,988 | |||||||
Investment securities | 11,305 | |||||||
Loans | 436,954 | |||||||
Premises and equipment, net | 11,317 | |||||||
Accrued interest and fees receivable | 884 | |||||||
Other assets | 30,007 | |||||||
Other intangibles | $ 2,500 | |||||||
Deposits | 522,295 | |||||||
Other liabilities | (3,541) | |||||||
Other Federal Home Loan Bank borrowings | (17,616) | |||||||
Subordinated debt held by unconsolidated subsidiary trusts | 0 | |||||||
Total identifiable assets, net | 42,987 | |||||||
Goodwill | 841,841 | $ 799,109 | $ 793,708 | |||||
Core deposit intangibles | ||||||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||||||
Deposits | 7,970 | |||||||
Other intangibles | ||||||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||||||
Other intangibles | 3,014 | |||||||
Thomas Gregory Associates Insurance Brokers, Inc. | ||||||||
Consideration : | ||||||||
Contingent consideration | $ 1,500 | |||||||
Fringe Benefits Design of Minnesota, Inc | ||||||||
Consideration : | ||||||||
Contingent consideration | $ 1,400 | |||||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||||||
Goodwill | $ 2,100 | |||||||
Elmira transaction | ||||||||
Consideration : | ||||||||
Cash | 82,179 | |||||||
Community Bank System, Inc. common stock | 0 | |||||||
Contingent consideration | 0 | |||||||
Total net consideration | $ 82,200 | 82,179 | ||||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||||||
Cash and cash equivalents | 84,988 | |||||||
Investment securities | 11,300 | 11,305 | ||||||
Loans | 437,000 | 436,954 | ||||||
Premises and equipment, net | 11,303 | |||||||
Accrued interest and fees receivable | 884 | |||||||
Other assets | 30,007 | |||||||
Deposits | 522,300 | 522,295 | ||||||
Other liabilities | (3,541) | |||||||
Other Federal Home Loan Bank borrowings | (17,616) | |||||||
Subordinated debt held by unconsolidated subsidiary trusts | 0 | |||||||
Total identifiable assets, net | 39,959 | |||||||
Goodwill | 42,200 | 42,220 | ||||||
Elmira transaction | Core deposit intangibles | ||||||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||||||
Deposits | $ 8,000 | 7,970 | ||||||
Elmira transaction | Other intangibles | ||||||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||||||
Other intangibles | 0 | |||||||
Other | ||||||||
Consideration : | ||||||||
Cash | 3,477 | |||||||
Community Bank System, Inc. common stock | 0 | |||||||
Contingent consideration | 0 | |||||||
Total net consideration | 3,477 | |||||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||||||
Cash and cash equivalents | 0 | |||||||
Investment securities | 0 | |||||||
Loans | 0 | |||||||
Premises and equipment, net | 14 | |||||||
Accrued interest and fees receivable | 0 | |||||||
Other assets | 0 | |||||||
Deposits | 0 | |||||||
Other liabilities | 0 | |||||||
Other Federal Home Loan Bank borrowings | 0 | |||||||
Subordinated debt held by unconsolidated subsidiary trusts | 0 | |||||||
Total identifiable assets, net | 3,028 | |||||||
Goodwill | 449 | |||||||
Other | Core deposit intangibles | ||||||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||||||
Deposits | 0 | |||||||
Other | Other intangibles | ||||||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||||||
Other intangibles | $ 3,014 | |||||||
Total | ||||||||
Consideration : | ||||||||
Cash | 29,870 | |||||||
Community Bank System, Inc. common stock | 0 | |||||||
Contingent consideration | 2,900 | |||||||
Total net consideration | 32,770 | |||||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||||||
Cash and cash equivalents | 541 | |||||||
Investment securities | 0 | |||||||
Loans | 0 | |||||||
Premises and equipment, net | 760 | |||||||
Accrued interest and fees receivable | 0 | |||||||
Other assets | 579 | |||||||
Deposits | 0 | |||||||
Other liabilities | (1,164) | |||||||
Other Federal Home Loan Bank borrowings | 0 | |||||||
Subordinated debt held by unconsolidated subsidiary trusts | 0 | |||||||
Total identifiable assets, net | 27,053 | |||||||
Goodwill | 5,717 | |||||||
Total | Core deposit intangibles | ||||||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||||||
Deposits | 0 | |||||||
Total | Other intangibles | ||||||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||||||
Other intangibles | $ 26,337 | |||||||
Steuben Trust Corporation | ||||||||
Consideration : | ||||||||
Cash | 21,613 | |||||||
Community Bank System, Inc. common stock | 76,942 | |||||||
Contingent consideration | 0 | |||||||
Total net consideration | 98,555 | |||||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||||||
Cash and cash equivalents | 55,973 | |||||||
Investment securities | 180,497 | $ 180,500 | ||||||
Loans | 339,017 | 339,700 | ||||||
Premises and equipment, net | 7,764 | |||||||
Accrued interest and fees receivable | 2,701 | |||||||
Other assets | 17,675 | |||||||
Deposits | 516,274 | (516,300) | ||||||
Other liabilities | (4,841) | |||||||
Other Federal Home Loan Bank borrowings | (6,000) | |||||||
Subordinated debt held by unconsolidated subsidiary trusts | (2,062) | |||||||
Total identifiable assets, net | 78,574 | |||||||
Goodwill | 19,981 | $ 20,000 | ||||||
Steuben Trust Corporation | Core deposit intangibles | ||||||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||||||
Deposits | 2,928 | |||||||
Steuben Trust Corporation | Other intangibles | ||||||||
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||||||
Other intangibles | $ 1,196 |
ACQUISITIONS - Intangible Asset
ACQUISITIONS - Intangible Asset, Goodwill and Acquisition-related Expenses (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jul. 12, 2019 | |
Fair Value of Subordinated Notes Payable | ||||
Subordinated notes payable | $ 3,249 | $ 3,277 | ||
Certain Loans Acquired During The Period | ||||
Merger and acquisition integration related (recoveries) expenses | $ 5,021 | 701 | $ 4,933 | |
Kinderhook Bank Corp. | Core deposit intangibles | ||||
Identifiable Intangible Assets | ||||
Estimated useful life | 10 years | |||
Kinderhook Bank Corp. | Subordinated Notes | ||||
Fair Value of Subordinated Notes Payable | ||||
Subordinated notes payable | $ 17,600 | |||
Fixed interest rate percentage | 2.48% | |||
Steuben Trust Corporation | ||||
Certain Loans Acquired During The Period | ||||
Merger and acquisition integration related (recoveries) expenses | $ 5,000 | $ 700 | $ 4,900 | |
NuVantage Insurance Corp. | Core deposit intangibles | ||||
Identifiable Intangible Assets | ||||
Estimated useful life | 8 years | |||
Fringe Benefits Design of Minnesota, Inc | ||||
Identifiable Intangible Assets | ||||
Estimated useful life | 15 years | |||
Thomas Gregory Associates Insurance Brokers, Inc. | ||||
Identifiable Intangible Assets | ||||
Estimated useful life | 13 years |
ACQUISITIONS - Summary of Loans
ACQUISITIONS - Summary of Loans Acquired (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Elmira transaction | Non-PCD Loans | ||
Certain Loans Acquired During The Period | ||
Unpaid principal balance of non-PCD loans | $ 455,700 | |
Net discount on fair value adjustments of non-PCD loans | 20,800 | |
Steuben Trust Corporation | Acquired Impaired | ||
Certain Loans Acquired During The Period | ||
Par value of PCD loans at acquisition | 2,184 | |
Allowance for credit losses at acquisition | (71) | |
Non-credit (discount)/premium at acquisition | 81 | |
Fair value of PCD loans at acquisition | 2,032 | |
Steuben Trust Corporation | Non-PCD Loans | ||
Certain Loans Acquired During The Period | ||
Par value of PCD loans at acquisition | $ 35,906 | |
Allowance for credit losses at acquisition | (668) | |
Non-credit (discount)/premium at acquisition | (103) | |
Fair value of PCD loans at acquisition | $ 35,341 | |
Unpaid principal balance of non-PCD loans | 313,000 | |
Net premium on fair value adjustments of non-PCD loans | $ 2,500 |
ACQUISITIONS - Supplemental Pro
ACQUISITIONS - Supplemental Pro Forma Financial Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Business acquisition | |||
Total revenue, net of interest expense, pro forma | $ 687,976 | $ 646,375 | $ 607,382 |
Net income, pro forma | 193,417 | $ 191,450 | 171,147 |
Steuben Trust Corporation | |||
Business acquisition | |||
Acquisitions-related expenses | $ 4,800 | ||
Elmira transaction | |||
Business acquisition | |||
Acquisitions-related expenses | $ 5,000 |
INVESTMENT SECURITIES - Availab
INVESTMENT SECURITIES - Available-for-sale portfolio (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Available-for-Sale Portfolio | ||
Amortized cost | $ 4,675,474 | $ 4,980,102 |
Gross unrealized gains | 565 | 65,387 |
Gross unrealized losses | 524,188 | 111,279 |
Total - Fair value | 4,151,851 | 4,934,210 |
Debt Securities, Available-for-sale, Fair Value to Amortized Cost | ||
Amortized cost | 4,675,474 | 4,980,102 |
Total - Fair value | 4,151,851 | 4,934,210 |
U.S. Treasury and agency securities | ||
Available-for-Sale Portfolio | ||
Amortized cost | 3,660,546 | 4,064,624 |
Total - Fair value | 3,243,537 | 3,998,564 |
Debt Securities, Available-for-sale, Fair Value to Amortized Cost | ||
Amortized cost | 3,660,546 | 4,064,624 |
Gross unrealized gains | 0 | 39,997 |
Gross unrealized losses | 417,009 | 106,057 |
Total - Fair value | 3,243,537 | 3,998,564 |
Obligations of state and political subdivisions | ||
Available-for-Sale Portfolio | ||
Amortized cost | 549,118 | 413,019 |
Total - Fair value | 504,297 | 430,289 |
Debt Securities, Available-for-sale, Fair Value to Amortized Cost | ||
Amortized cost | 549,118 | 413,019 |
Gross unrealized gains | 506 | 17,326 |
Gross unrealized losses | 45,327 | 56 |
Total - Fair value | 504,297 | 430,289 |
Government agency mortgage-backed securities | ||
Available-for-Sale Portfolio | ||
Amortized cost | 444,689 | 474,506 |
Total - Fair value | 384,633 | 477,056 |
Debt Securities, Available-for-sale, Fair Value to Amortized Cost | ||
Amortized cost | 444,689 | 474,506 |
Gross unrealized gains | 58 | 7,615 |
Gross unrealized losses | 60,114 | 5,065 |
Total - Fair value | 384,633 | 477,056 |
Corporate debt securities | ||
Available-for-Sale Portfolio | ||
Amortized cost | 8,000 | 8,000 |
Total - Fair value | 7,114 | 7,962 |
Debt Securities, Available-for-sale, Fair Value to Amortized Cost | ||
Amortized cost | 8,000 | 8,000 |
Gross unrealized gains | 0 | 39 |
Gross unrealized losses | 886 | 77 |
Total - Fair value | 7,114 | 7,962 |
Government agency collateralized mortgage obligations | ||
Available-for-Sale Portfolio | ||
Amortized cost | 13,121 | 19,953 |
Total - Fair value | 12,270 | 20,339 |
Debt Securities, Available-for-sale, Fair Value to Amortized Cost | ||
Amortized cost | 13,121 | 19,953 |
Gross unrealized gains | 1 | 410 |
Gross unrealized losses | 852 | 24 |
Total - Fair value | 12,270 | 20,339 |
Federal reserve bank common stock | ||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost | ||
Gross unrealized losses | 0 | 0 |
Other equity securities | ||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost | ||
Gross unrealized losses | 0 | 0 |
Federal home loan bank common stock | ||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost | ||
Gross unrealized losses | $ 0 | $ 0 |
INVESTMENT SECURITIES - Equity
INVESTMENT SECURITIES - Equity and other securities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Equity and other securities | ||
Amortized cost | $ 82,424 | $ 43,917 |
Gross unrealized gains | 918 | 962 |
Gross unrealized losses | 0 | 0 |
Estimated Fair Value | 83,342 | 44,879 |
Equity securities, at fair value | ||
Amortized cost | 251 | 251 |
Gross unrealized gains | 168 | 212 |
Gross unrealized losses | 0 | 0 |
Estimated Fair Value | 419 | 463 |
Held-to-Maturity Portfolio: | ||
Amortized Cost | 1,079,695 | 0 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 44,900 | 0 |
Held-to-maturity securities | 1,034,795 | 0 |
Federal home loan bank common stock | ||
Other equity securities, at adjusted cost | ||
Amortized cost | 47,497 | 7,188 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | 0 | 0 |
Estimated Fair Value | 47,497 | 7,188 |
Federal reserve bank common stock | ||
Other equity securities, at adjusted cost | ||
Amortized cost | 31,144 | 33,916 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | 0 | 0 |
Estimated Fair Value | 31,144 | 33,916 |
Other equity securities | ||
Other equity securities, at adjusted cost | ||
Amortized cost | 3,532 | 2,562 |
Gross unrealized gains | 750 | 750 |
Gross unrealized losses | 0 | 0 |
Estimated Fair Value | 4,282 | 3,312 |
U.S. Treasury and agency securities | ||
Equity and other securities | ||
Securities transferred from available-for-sale to held-to-maturity | 1,080,000 | |
Pretax unrealized losses related to transfer | 341,200 | |
Other equity securities, at adjusted cost | ||
Gross unrealized losses | 417,009 | 106,057 |
Held-to-Maturity Portfolio: | ||
Amortized Cost | 1,079,695 | 0 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 44,900 | 0 |
Held-to-maturity securities | $ 1,034,795 | $ 0 |
INVESTMENT SECURITIES - Investm
INVESTMENT SECURITIES - Investment securities in a continuous unrealized loss position (Details) $ in Thousands | Dec. 31, 2022 USD ($) position | Dec. 31, 2021 USD ($) position |
Number of positions | ||
Less than 12 months | position | 1,149 | 240 |
12 months or longer | position | 430 | 66 |
Total | position | 1,579 | 306 |
Fair Value | ||
Less than 12 months | $ 1,955,294 | $ 1,395,578 |
12 months or longer | 2,106,692 | 967,788 |
Total | 4,061,986 | 2,363,366 |
Gross Unrealized Losses | ||
Less than 12 months | 188,107 | 17,505 |
12 months or longer | 336,081 | 93,774 |
Total | 524,188 | 111,279 |
Available-for-sale, allowance for credit losses | $ 0 | $ 0 |
Number of positions | ||
Less than 12 Months | position | 23 | |
12 Months or Longer | position | 0 | |
Total | position | 23 | |
Fair Value | ||
Less than 12 Months | $ 1,034,795 | |
12 Months or Longer | 0 | |
Total | 1,034,795 | |
Gross Unrealized Losses | ||
Less than 12 Months | 44,900 | |
12 Months or Longer | 0 | |
Total | $ 44,900 | |
U.S. Treasury and agency securities | ||
Number of positions | ||
Less than 12 months | position | 41 | 47 |
12 months or longer | position | 61 | 13 |
Total | position | 102 | 60 |
Fair Value | ||
Less than 12 months | $ 1,384,075 | $ 1,224,101 |
12 months or longer | 1,859,462 | 900,462 |
Total | 3,243,537 | 2,124,563 |
Gross Unrealized Losses | ||
Less than 12 months | 132,511 | 14,873 |
12 months or longer | 284,498 | 91,184 |
Total | $ 417,009 | $ 106,057 |
Number of positions | ||
Less than 12 Months | position | 23 | |
12 Months or Longer | position | 0 | |
Total | position | 23 | |
Fair Value | ||
Less than 12 Months | $ 1,034,795 | |
12 Months or Longer | 0 | |
Total | 1,034,795 | |
Gross Unrealized Losses | ||
Less than 12 Months | 44,900 | |
12 Months or Longer | 0 | |
Total | $ 44,900 | |
Obligations of state and political subdivisions | ||
Number of positions | ||
Less than 12 months | position | 582 | 27 |
12 months or longer | position | 76 | 0 |
Total | position | 658 | 27 |
Fair Value | ||
Less than 12 months | $ 370,524 | $ 23,966 |
12 months or longer | 47,923 | 0 |
Total | 418,447 | 23,966 |
Gross Unrealized Losses | ||
Less than 12 months | 35,488 | 56 |
12 months or longer | 9,839 | 0 |
Total | $ 45,327 | $ 56 |
Government agency mortgage-backed securities | ||
Number of positions | ||
Less than 12 months | position | 497 | 147 |
12 months or longer | position | 274 | 52 |
Total | position | 771 | 199 |
Fair Value | ||
Less than 12 months | $ 190,727 | $ 139,442 |
12 months or longer | 189,919 | 67,273 |
Total | 380,646 | 206,715 |
Gross Unrealized Losses | ||
Less than 12 months | 19,508 | 2,475 |
12 months or longer | 40,606 | 2,590 |
Total | $ 60,114 | $ 5,065 |
Corporate debt securities | ||
Number of positions | ||
Less than 12 months | position | 0 | 1 |
12 months or longer | position | 2 | 0 |
Total | position | 2 | 1 |
Fair Value | ||
Less than 12 months | $ 0 | $ 4,923 |
12 months or longer | 7,114 | 0 |
Total | 7,114 | 4,923 |
Gross Unrealized Losses | ||
Less than 12 months | 0 | 77 |
12 months or longer | 886 | 0 |
Total | $ 886 | $ 77 |
Government agency collateralized mortgage obligations | ||
Number of positions | ||
Less than 12 months | position | 29 | 18 |
12 months or longer | position | 17 | 1 |
Total | position | 46 | 19 |
Fair Value | ||
Less than 12 months | $ 9,968 | $ 3,146 |
12 months or longer | 2,274 | 53 |
Total | 12,242 | 3,199 |
Gross Unrealized Losses | ||
Less than 12 months | 600 | 24 |
12 months or longer | 252 | 0 |
Total | $ 852 | $ 24 |
INVESTMENT SECURITIES - Amortiz
INVESTMENT SECURITIES - Amortized cost and estimated fair value of debt securities by contractual maturity (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Amortized Cost | ||
Due in one year or less | $ 521,444 | |
Due after one through five years | 1,728,988 | |
Due after five years through ten years | 1,161,641 | |
Due after ten years | 805,591 | |
Subtotal | 4,217,664 | |
Total - Amortized cost. | 4,675,474 | $ 4,980,102 |
Fair Value | ||
Due in one year or less | 516,496 | |
Due after one through five years | 1,574,685 | |
Due after five years through ten years | 1,020,562 | |
Due after ten years | 643,205 | |
Subtotal | 3,754,948 | |
Total - Fair value | 4,151,851 | 4,934,210 |
Amortized Cost | ||
Due in one year or less | 0 | |
Due after one through five years | 0 | |
Due after five years through ten years | 539,825 | |
Due after ten years | 539,870 | |
Subtotal | 1,079,695 | |
Total - Amortized Cost | 1,079,695 | 0 |
Fair Value | ||
Due in one year or less | 0 | |
Due after one through five years | 0 | |
Due after five years through ten years | 524,815 | |
Due after ten years | 509,980 | |
Subtotal | 1,034,795 | |
Total - Fair Value | 1,034,795 | 0 |
Government agency mortgage-backed securities | ||
Amortized Cost | ||
Total - Amortized cost. | 444,689 | 474,506 |
Fair Value | ||
Total - Fair value | 384,633 | 477,056 |
Amortized Cost | ||
Total - Amortized Cost | 0 | |
Fair Value | ||
Total - Fair Value | 0 | |
Government agency collateralized mortgage obligations | ||
Amortized Cost | ||
Total - Amortized cost. | 13,121 | 19,953 |
Fair Value | ||
Total - Fair value | 12,270 | 20,339 |
Amortized Cost | ||
Total - Amortized Cost | 0 | |
Fair Value | ||
Total - Fair Value | 0 | |
US Treasury And Government | ||
Amortized Cost | ||
Total - Amortized cost. | 3,660,546 | 4,064,624 |
Fair Value | ||
Total - Fair value | 3,243,537 | 3,998,564 |
Amortized Cost | ||
Total - Amortized Cost | 1,079,695 | 0 |
Fair Value | ||
Total - Fair Value | $ 1,034,795 | $ 0 |
INVESTMENT SECURITIES - Inves_2
INVESTMENT SECURITIES - Investment securities pledged as collateral (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Investment securities pledged as collateral | ||
Investment securities pledged to collateralize certain deposits and borrowings | $ 2,180 | $ 2,320 |
Debt Securities, Pledged Status [Extensible Enumeration] | us-gaap:AssetPledgedAsCollateralWithoutRightMember | us-gaap:AssetPledgedAsCollateralWithoutRightMember |
Debt Securities, Pledging Purpose [Extensible Enumeration] | Deposits | Deposits |
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 | $ 466.9 | $ 485.4 |
LOANS AND ALLOWANCE FOR CREDI_3
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Loan Summary (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Loans receivable, net | ||||
Gross loans, including deferred origination costs | $ 8,809,394 | $ 7,373,639 | ||
Allowance for credit losses | (61,059) | (49,869) | ||
Net loans | 8,748,335 | 7,323,770 | ||
Net deferred loan origination costs | 73,800 | 34,900 | ||
Loans receivable, related parties | ||||
Balance at beginning of year | 13,773 | 15,549 | ||
New loans | 2,025 | 2,500 | ||
Payments | (3,425) | (4,276) | ||
Balance at end of year | 12,373 | 13,773 | ||
Business Lending | ||||
Loans receivable, net | ||||
Gross loans, including deferred origination costs | 3,645,665 | 3,075,904 | ||
Consumer Mortgage | ||||
Loans receivable, net | ||||
Gross loans, including deferred origination costs | 3,012,475 | 2,556,114 | ||
Consumer Indirect | ||||
Loans receivable, net | ||||
Gross loans, including deferred origination costs | 1,539,653 | 1,189,749 | ||
Consumer Direct | ||||
Loans receivable, net | ||||
Gross loans, including deferred origination costs | 177,605 | 153,811 | ||
Home Equity | ||||
Loans receivable, net | ||||
Gross loans, including deferred origination costs | 433,996 | 398,061 | ||
Allowance for credit losses | $ (2,129) | |||
Commercial Portfolio Segment | Business Lending | ||||
Loans receivable, net | ||||
Gross loans, including deferred origination costs | 3,645,665 | 3,075,904 | ||
Allowance for credit losses | (22,995) | $ (30,072) | (19,426) | |
Commercial Portfolio Segment | Consumer Mortgage | ||||
Loans receivable, net | ||||
Allowance for credit losses | (10,017) | (10,672) | (10,269) | |
Residential Portfolio Segment | Consumer Mortgage | ||||
Loans receivable, net | ||||
Gross loans, including deferred origination costs | 3,012,475 | 2,556,114 | ||
Consumer Portfolio Segment | Business Lending | ||||
Loans receivable, net | ||||
Allowance for credit losses | (23,297) | (22,995) | ||
Consumer Portfolio Segment | Consumer Mortgage | ||||
Loans receivable, net | ||||
Allowance for credit losses | (14,343) | (10,017) | ||
Consumer Portfolio Segment | Consumer Indirect | ||||
Loans receivable, net | ||||
Gross loans, including deferred origination costs | 1,539,653 | 1,189,749 | ||
Allowance for credit losses | (17,852) | (11,737) | (13,696) | (13,712) |
Consumer Portfolio Segment | Consumer Direct | ||||
Loans receivable, net | ||||
Gross loans, including deferred origination costs | 177,605 | 153,811 | ||
Allowance for credit losses | (2,973) | (2,306) | (3,207) | $ (3,255) |
Consumer Portfolio Segment | Home Equity | ||||
Loans receivable, net | ||||
Gross loans, including deferred origination costs | 433,996 | 398,061 | ||
Allowance for credit losses | $ (1,594) | $ (1,814) | $ (2,222) |
LOANS AND ALLOWANCE FOR CREDI_4
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Credit Quality By Past Due Status (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Aged analysis of the company's loans | ||
Total Loans | $ 8,809,394 | $ 7,373,639 |
Interest income on nonaccrual loans | 0 | 0 |
Interest income on loans | 1,900 | |
Legacy Loan | ||
Aged analysis of the company's loans | ||
Total Loans | 8,809,394 | 7,373,639 |
90 + days past due and still accruing | 4,119 | 3,808 |
Nonaccrual | 29,245 | 41,665 |
Legacy Loan | Past Due 30 - 89 Days | ||
Aged analysis of the company's loans | ||
Total Loans | 45,244 | 28,022 |
Legacy Loan | Financial Asset, Past Due | ||
Aged analysis of the company's loans | ||
Total Loans | 78,608 | 73,495 |
Legacy Loan | Financial Asset, Not Past Due | ||
Aged analysis of the company's loans | ||
Total Loans | 8,730,786 | 7,300,144 |
Business Lending | ||
Aged analysis of the company's loans | ||
Total Loans | 3,645,665 | 3,075,904 |
Consumer Mortgage | ||
Aged analysis of the company's loans | ||
Total Loans | 3,012,475 | 2,556,114 |
Consumer Indirect | ||
Aged analysis of the company's loans | ||
Total Loans | 1,539,653 | 1,189,749 |
Consumer Direct | ||
Aged analysis of the company's loans | ||
Total Loans | 177,605 | 153,811 |
Home Equity | ||
Aged analysis of the company's loans | ||
Total Loans | 433,996 | 398,061 |
Commercial Portfolio Segment | Business Lending | ||
Aged analysis of the company's loans | ||
Total Loans | 3,645,665 | 3,075,904 |
Commercial Portfolio Segment | Business Lending | Legacy Loan | ||
Aged analysis of the company's loans | ||
Total Loans | 3,645,665 | 3,075,904 |
90 + days past due and still accruing | 0 | 99 |
Nonaccrual | 4,689 | 24,105 |
Commercial Portfolio Segment | Business Lending | Legacy Loan | Past Due 30 - 89 Days | ||
Aged analysis of the company's loans | ||
Total Loans | 9,818 | 5,540 |
Commercial Portfolio Segment | Business Lending | Legacy Loan | Financial Asset, Past Due | ||
Aged analysis of the company's loans | ||
Total Loans | 14,507 | 29,744 |
Commercial Portfolio Segment | Business Lending | Legacy Loan | Financial Asset, Not Past Due | ||
Aged analysis of the company's loans | ||
Total Loans | 3,631,158 | 3,046,160 |
Residential Portfolio Segment | Consumer Mortgage | ||
Aged analysis of the company's loans | ||
Total Loans | 3,012,475 | 2,556,114 |
Residential Portfolio Segment | Consumer Mortgage | Legacy Loan | ||
Aged analysis of the company's loans | ||
Total Loans | 3,012,475 | 2,556,114 |
90 + days past due and still accruing | 3,510 | 3,328 |
Nonaccrual | 22,583 | 15,027 |
Residential Portfolio Segment | Consumer Mortgage | Legacy Loan | Past Due 30 - 89 Days | ||
Aged analysis of the company's loans | ||
Total Loans | 13,757 | 10,297 |
Residential Portfolio Segment | Consumer Mortgage | Legacy Loan | Financial Asset, Past Due | ||
Aged analysis of the company's loans | ||
Total Loans | 39,850 | 28,652 |
Residential Portfolio Segment | Consumer Mortgage | Legacy Loan | Financial Asset, Not Past Due | ||
Aged analysis of the company's loans | ||
Total Loans | 2,972,625 | 2,527,462 |
Consumer Portfolio Segment | Consumer Indirect | ||
Aged analysis of the company's loans | ||
Total Loans | 1,539,653 | 1,189,749 |
Consumer Portfolio Segment | Consumer Indirect | Legacy Loan | ||
Aged analysis of the company's loans | ||
Total Loans | 1,539,653 | 1,189,749 |
90 + days past due and still accruing | 178 | 87 |
Nonaccrual | 0 | 0 |
Consumer Portfolio Segment | Consumer Indirect | Legacy Loan | Past Due 30 - 89 Days | ||
Aged analysis of the company's loans | ||
Total Loans | 16,767 | 9,611 |
Consumer Portfolio Segment | Consumer Indirect | Legacy Loan | Financial Asset, Past Due | ||
Aged analysis of the company's loans | ||
Total Loans | 16,945 | 9,698 |
Consumer Portfolio Segment | Consumer Indirect | Legacy Loan | Financial Asset, Not Past Due | ||
Aged analysis of the company's loans | ||
Total Loans | 1,522,708 | 1,180,051 |
Consumer Portfolio Segment | Consumer Direct | ||
Aged analysis of the company's loans | ||
Total Loans | 177,605 | 153,811 |
Consumer Portfolio Segment | Consumer Direct | Legacy Loan | ||
Aged analysis of the company's loans | ||
Total Loans | 177,605 | 153,811 |
90 + days past due and still accruing | 132 | 22 |
Nonaccrual | 28 | 1 |
Consumer Portfolio Segment | Consumer Direct | Legacy Loan | Past Due 30 - 89 Days | ||
Aged analysis of the company's loans | ||
Total Loans | 1,307 | 796 |
Consumer Portfolio Segment | Consumer Direct | Legacy Loan | Financial Asset, Past Due | ||
Aged analysis of the company's loans | ||
Total Loans | 1,467 | 819 |
Consumer Portfolio Segment | Consumer Direct | Legacy Loan | Financial Asset, Not Past Due | ||
Aged analysis of the company's loans | ||
Total Loans | 176,138 | 152,992 |
Consumer Portfolio Segment | Home Equity | ||
Aged analysis of the company's loans | ||
Total Loans | 433,996 | 398,061 |
Consumer Portfolio Segment | Home Equity | Legacy Loan | ||
Aged analysis of the company's loans | ||
Total Loans | 433,996 | 398,061 |
90 + days past due and still accruing | 299 | 272 |
Nonaccrual | 1,945 | 2,532 |
Consumer Portfolio Segment | Home Equity | Legacy Loan | Past Due 30 - 89 Days | ||
Aged analysis of the company's loans | ||
Total Loans | 3,595 | 1,778 |
Consumer Portfolio Segment | Home Equity | Legacy Loan | Financial Asset, Past Due | ||
Aged analysis of the company's loans | ||
Total Loans | 5,839 | 4,582 |
Consumer Portfolio Segment | Home Equity | Legacy Loan | Financial Asset, Not Past Due | ||
Aged analysis of the company's loans | ||
Total Loans | $ 428,157 | $ 393,479 |
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 | Dec. 31, 2022 | Dec. 31, 2021 |
Term loans amortized cost basis by origination year | ||
Total Loans | $ 8,809,394 | $ 7,373,639 |
Legacy Loan | ||
Term loans amortized cost basis by origination year | ||
Total Loans | 8,809,394 | 7,373,639 |
Business Lending | ||
Term loans amortized cost basis by origination year | ||
2022 | 752,157 | |
2021 | 379,525 | 525,141 |
2020 | 237,510 | 298,438 |
2019 | 253,689 | 278,860 |
2018 | 195,251 | 239,869 |
2017 | 179,394 | |
Prior | 688,511 | 655,482 |
Revolving Loans Amortized Cost Basis | 751,619 | 514,353 |
Revolving Loans Converted to Term | 387,403 | 384,367 |
Total Loans | 3,645,665 | 3,075,904 |
Business Lending | Pass | ||
Term loans amortized cost basis by origination year | ||
2022 | 747,570 | |
2021 | 373,914 | 517,302 |
2020 | 232,591 | 286,386 |
2019 | 246,817 | 265,551 |
2018 | 168,423 | 204,376 |
2017 | 152,440 | |
Prior | 604,746 | 544,577 |
Revolving Loans Amortized Cost Basis | 711,629 | 460,461 |
Revolving Loans Converted to Term | 336,722 | 286,446 |
Total Loans | 3,422,412 | 2,717,539 |
Business Lending | Special Mention | ||
Term loans amortized cost basis by origination year | ||
2022 | 2,787 | |
2021 | 4,836 | 5,969 |
2020 | 3,781 | 10,638 |
2019 | 3,676 | 9,738 |
2018 | 14,593 | 18,702 |
2017 | 7,972 | |
Prior | 45,627 | 54,367 |
Revolving Loans Amortized Cost Basis | 29,403 | 26,609 |
Revolving Loans Converted to Term | 29,975 | 46,518 |
Total Loans | 134,678 | 180,513 |
Business Lending | Classified | ||
Term loans amortized cost basis by origination year | ||
2022 | 1,800 | |
2021 | 775 | 1,870 |
2020 | 1,138 | 1,414 |
2019 | 3,196 | 3,571 |
2018 | 12,235 | 16,729 |
2017 | 18,982 | |
Prior | 38,138 | 56,538 |
Revolving Loans Amortized Cost Basis | 10,587 | 26,780 |
Revolving Loans Converted to Term | 20,706 | 51,403 |
Total Loans | 88,575 | 177,287 |
Business Lending | Doubtful | ||
Term loans amortized cost basis by origination year | ||
2022 | 0 | |
2021 | 0 | 0 |
2020 | 0 | 0 |
2019 | 0 | 0 |
2018 | 0 | 62 |
2017 | 0 | |
Prior | 0 | 0 |
Revolving Loans Amortized Cost Basis | 0 | 503 |
Revolving Loans Converted to Term | 0 | 0 |
Total Loans | 0 | 565 |
Consumer Mortgage | ||
Term loans amortized cost basis by origination year | ||
2022 | 539,679 | |
2021 | 672,042 | 659,367 |
2020 | 332,352 | 338,525 |
2019 | 255,089 | 260,938 |
2018 | 157,548 | 173,074 |
2017 | 172,187 | |
Prior | 944,971 | 880,098 |
Revolving Loans Amortized Cost Basis | 28,989 | 25,028 |
Revolving Loans Converted to Term | 81,805 | 46,897 |
Total Loans | 3,012,475 | 2,556,114 |
Consumer Mortgage | FICO AB | ||
Term loans amortized cost basis by origination year | ||
2022 | 379,171 | |
2021 | 492,806 | 496,372 |
2020 | 218,462 | 220,437 |
2019 | 174,126 | 178,589 |
2018 | 100,560 | 113,636 |
2017 | 116,852 | |
Prior | 608,605 | 569,359 |
Revolving Loans Amortized Cost Basis | 954 | 0 |
Revolving Loans Converted to Term | 59,088 | 32,175 |
Total Loans | 2,033,772 | 1,727,420 |
Consumer Mortgage | FICO AB | Performing | ||
Term loans amortized cost basis by origination year | ||
2022 | 379,171 | |
2021 | 492,731 | 496,372 |
2020 | 217,889 | 220,171 |
2019 | 173,942 | 178,589 |
2018 | 100,161 | 113,505 |
2017 | 116,417 | |
Prior | 604,258 | 566,123 |
Revolving Loans Amortized Cost Basis | 954 | 0 |
Revolving Loans Converted to Term | 58,639 | 32,175 |
Total Loans | 2,027,745 | 1,723,352 |
Consumer Mortgage | FICO AB | Nonperforming | ||
Term loans amortized cost basis by origination year | ||
2022 | 0 | |
2021 | 75 | 0 |
2020 | 573 | 266 |
2019 | 184 | 0 |
2018 | 399 | 131 |
2017 | 435 | |
Prior | 4,347 | 3,236 |
Revolving Loans Amortized Cost Basis | 0 | 0 |
Revolving Loans Converted to Term | 449 | 0 |
Total Loans | 6,027 | 4,068 |
Consumer Mortgage | FICO CDE | ||
Term loans amortized cost basis by origination year | ||
2022 | 160,508 | |
2021 | 179,236 | 162,995 |
2020 | 113,890 | 118,088 |
2019 | 80,963 | 82,349 |
2018 | 56,988 | 59,438 |
2017 | 55,335 | |
Prior | 336,366 | 310,739 |
Revolving Loans Amortized Cost Basis | 28,035 | 25,028 |
Revolving Loans Converted to Term | 22,717 | 14,722 |
Total Loans | 978,703 | 828,694 |
Consumer Mortgage | FICO CDE | Performing | ||
Term loans amortized cost basis by origination year | ||
2022 | 160,388 | |
2021 | 178,262 | 162,995 |
2020 | 112,640 | 117,566 |
2019 | 79,357 | 81,377 |
2018 | 54,861 | 57,973 |
2017 | 54,396 | |
Prior | 323,189 | 300,350 |
Revolving Loans Amortized Cost Basis | 27,884 | 25,028 |
Revolving Loans Converted to Term | 22,056 | 14,722 |
Total Loans | 958,637 | 814,407 |
Consumer Mortgage | FICO CDE | Nonperforming | ||
Term loans amortized cost basis by origination year | ||
2022 | 120 | |
2021 | 974 | 0 |
2020 | 1,250 | 522 |
2019 | 1,606 | 972 |
2018 | 2,127 | 1,465 |
2017 | 939 | |
Prior | 13,177 | 10,389 |
Revolving Loans Amortized Cost Basis | 151 | 0 |
Revolving Loans Converted to Term | 661 | 0 |
Total Loans | 20,066 | 14,287 |
Consumer Indirect | ||
Term loans amortized cost basis by origination year | ||
2022 | 777,531 | |
2021 | 422,595 | 590,857 |
2020 | 129,502 | 204,563 |
2019 | 99,660 | 182,458 |
2018 | 52,313 | 107,707 |
2017 | 39,402 | |
Prior | 58,052 | 64,762 |
Revolving Loans Amortized Cost Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total Loans | 1,539,653 | 1,189,749 |
Consumer Indirect | Performing | ||
Term loans amortized cost basis by origination year | ||
2022 | 777,513 | |
2021 | 422,594 | 590,857 |
2020 | 129,449 | 204,529 |
2019 | 99,593 | 182,458 |
2018 | 52,298 | 107,683 |
2017 | 39,385 | |
Prior | 58,028 | 64,750 |
Revolving Loans Amortized Cost Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total Loans | 1,539,475 | 1,189,662 |
Consumer Indirect | Nonperforming | ||
Term loans amortized cost basis by origination year | ||
2022 | 18 | |
2021 | 1 | 0 |
2020 | 53 | 34 |
2019 | 67 | 0 |
2018 | 15 | 24 |
2017 | 17 | |
Prior | 24 | 12 |
Revolving Loans Amortized Cost Basis | 0 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total Loans | 178 | 87 |
Consumer Direct | ||
Term loans amortized cost basis by origination year | ||
2022 | 84,117 | |
2021 | 46,432 | 72,584 |
2020 | 17,067 | 28,909 |
2019 | 12,730 | 24,786 |
2018 | 5,602 | 12,341 |
2017 | 4,396 | |
Prior | 5,070 | 4,577 |
Revolving Loans Amortized Cost Basis | 6,585 | 6,214 |
Revolving Loans Converted to Term | 2 | 4 |
Total Loans | 177,605 | 153,811 |
Consumer Direct | Performing | ||
Term loans amortized cost basis by origination year | ||
2022 | 84,111 | |
2021 | 46,381 | 72,584 |
2020 | 17,066 | 28,905 |
2019 | 12,729 | 24,768 |
2018 | 5,573 | 12,340 |
2017 | 4,396 | |
Prior | 5,020 | 4,577 |
Revolving Loans Amortized Cost Basis | 6,563 | 6,214 |
Revolving Loans Converted to Term | 2 | 4 |
Total Loans | 177,445 | 153,788 |
Consumer Direct | Nonperforming | ||
Term loans amortized cost basis by origination year | ||
2022 | 6 | |
2021 | 51 | 0 |
2020 | 1 | 4 |
2019 | 1 | 18 |
2018 | 29 | 1 |
2017 | 0 | |
Prior | 50 | 0 |
Revolving Loans Amortized Cost Basis | 22 | 0 |
Revolving Loans Converted to Term | 0 | 0 |
Total Loans | 160 | 23 |
Home Equity | ||
Term loans amortized cost basis by origination year | ||
2022 | 69,575 | |
2021 | 72,280 | 76,041 |
2020 | 38,078 | 43,170 |
2019 | 31,675 | 36,037 |
2018 | 16,173 | 18,926 |
2017 | 15,265 | |
Prior | 41,703 | 36,419 |
Revolving Loans Amortized Cost Basis | 133,266 | 132,770 |
Revolving Loans Converted to Term | 31,246 | 39,433 |
Total Loans | 433,996 | 398,061 |
Home Equity | Performing | ||
Term loans amortized cost basis by origination year | ||
2022 | 69,575 | |
2021 | 72,270 | 76,041 |
2020 | 37,964 | 43,106 |
2019 | 31,506 | 35,990 |
2018 | 16,068 | 18,824 |
2017 | 15,134 | |
Prior | 41,097 | 35,740 |
Revolving Loans Amortized Cost Basis | 132,703 | 131,817 |
Revolving Loans Converted to Term | 30,569 | 38,605 |
Total Loans | 431,752 | 395,257 |
Home Equity | Nonperforming | ||
Term loans amortized cost basis by origination year | ||
2022 | 0 | |
2021 | 10 | 0 |
2020 | 114 | 64 |
2019 | 169 | 47 |
2018 | 105 | 102 |
2017 | 131 | |
Prior | 606 | 679 |
Revolving Loans Amortized Cost Basis | 563 | 953 |
Revolving Loans Converted to Term | 677 | 828 |
Total Loans | $ 2,244 | $ 2,804 |
LOANS AND ALLOWANCE FOR CREDI_6
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Summary of Impaired Loans, Excluding Purchased Impaired (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Impaired loans | ||
Loans with allowance allocation | $ 0 | $ 7,102 |
Loans without allowance allocation | 3,163 | 7,417 |
Carrying balance | 3,163 | 14,519 |
Contractual balance | 4,201 | 16,963 |
Specifically allocated allowance | 0 | 566 |
Average carrying balance of individually assessed loans | 12,200 | 33,400 |
Interest income on individually assessed loans | $ 0 | $ 0 |
LOANS AND ALLOWANCE FOR CREDI_7
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Troubled Debt Restructurings (TDRs) (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) loan | Dec. 31, 2021 USD ($) loan | Dec. 31, 2020 USD ($) loan | |
Troubled Debt Restructurings (TDRs) | |||
TDRs, number | loan | 194 | 232 | 247 |
TDRs, amount | $ 5,629 | $ 8,239 | $ 6,984 |
Number of loans modified in TDR | 24 | 54 | 55 |
Loans modified in TDR during the year, amount | $ 784 | $ 3,087 | $ 1,756 |
Business lending loans | $ 500 | ||
Nonaccrual | |||
Troubled Debt Restructurings (TDRs) | |||
TDRs, number | loan | 62 | 81 | 73 |
TDRs, amount | $ 2,461 | $ 3,940 | $ 3,227 |
Accruing | |||
Troubled Debt Restructurings (TDRs) | |||
TDRs, number | loan | 132 | 151 | 174 |
TDRs, amount | $ 3,168 | $ 4,299 | $ 3,757 |
Commercial Portfolio Segment | Business Lending | |||
Troubled Debt Restructurings (TDRs) | |||
TDRs, number | loan | 4 | 14 | 10 |
TDRs, amount | $ 406 | $ 1,822 | $ 720 |
Number of loans modified in TDR | loan | 0 | 5 | 1 |
Loans modified in TDR during the year, amount | $ 0 | $ 1,371 | $ 4 |
Commercial Portfolio Segment | Business Lending | Nonaccrual | |||
Troubled Debt Restructurings (TDRs) | |||
TDRs, number | loan | 1 | 10 | 6 |
TDRs, amount | $ 135 | $ 1,011 | $ 529 |
Commercial Portfolio Segment | Business Lending | Accruing | |||
Troubled Debt Restructurings (TDRs) | |||
TDRs, number | loan | 3 | 4 | 4 |
TDRs, amount | $ 271 | $ 811 | $ 191 |
Residential Portfolio Segment | Consumer Mortgage | |||
Troubled Debt Restructurings (TDRs) | |||
TDRs, number | loan | 98 | 108 | 104 |
TDRs, amount | $ 4,332 | $ 5,114 | $ 4,679 |
Number of loans modified in TDR | loan | 7 | 24 | 17 |
Loans modified in TDR during the year, amount | $ 597 | $ 1,425 | $ 1,339 |
Residential Portfolio Segment | Consumer Mortgage | Nonaccrual | |||
Troubled Debt Restructurings (TDRs) | |||
TDRs, number | loan | 52 | 61 | 56 |
TDRs, amount | $ 2,218 | $ 2,694 | $ 2,413 |
Residential Portfolio Segment | Consumer Mortgage | Accruing | |||
Troubled Debt Restructurings (TDRs) | |||
TDRs, number | loan | 46 | 47 | 48 |
TDRs, amount | $ 2,114 | $ 2,420 | $ 2,266 |
Consumer Portfolio Segment | Consumer Indirect | |||
Troubled Debt Restructurings (TDRs) | |||
TDRs, number | loan | 56 | 72 | 86 |
TDRs, amount | $ 600 | $ 829 | $ 951 |
Number of loans modified in TDR | loan | 13 | 23 | 31 |
Loans modified in TDR during the year, amount | $ 178 | $ 284 | $ 333 |
Consumer Portfolio Segment | Consumer Indirect | Nonaccrual | |||
Troubled Debt Restructurings (TDRs) | |||
TDRs, number | loan | 0 | 0 | 0 |
TDRs, amount | $ 0 | $ 0 | $ 0 |
Consumer Portfolio Segment | Consumer Indirect | Accruing | |||
Troubled Debt Restructurings (TDRs) | |||
TDRs, number | loan | 56 | 72 | 86 |
TDRs, amount | $ 600 | $ 829 | $ 951 |
Consumer Portfolio Segment | Consumer Direct | |||
Troubled Debt Restructurings (TDRs) | |||
TDRs, number | loan | 18 | 16 | 23 |
TDRs, amount | $ 5 | $ 7 | $ 85 |
Number of loans modified in TDR | loan | 3 | 2 | 3 |
Loans modified in TDR during the year, amount | $ 5 | $ 7 | $ 10 |
Consumer Portfolio Segment | Consumer Direct | Nonaccrual | |||
Troubled Debt Restructurings (TDRs) | |||
TDRs, number | loan | 0 | 0 | 0 |
TDRs, amount | $ 0 | $ 0 | $ 0 |
Consumer Portfolio Segment | Consumer Direct | Accruing | |||
Troubled Debt Restructurings (TDRs) | |||
TDRs, number | loan | 18 | 16 | 23 |
TDRs, amount | $ 5 | $ 7 | $ 85 |
Consumer Portfolio Segment | Home Equity | |||
Troubled Debt Restructurings (TDRs) | |||
TDRs, number | loan | 18 | 22 | 24 |
TDRs, amount | $ 286 | $ 467 | $ 549 |
Number of loans modified in TDR | loan | 1 | 0 | 3 |
Loans modified in TDR during the year, amount | $ 4 | $ 0 | $ 70 |
Consumer Portfolio Segment | Home Equity | Nonaccrual | |||
Troubled Debt Restructurings (TDRs) | |||
TDRs, number | loan | 9 | 10 | 11 |
TDRs, amount | $ 108 | $ 235 | $ 285 |
Consumer Portfolio Segment | Home Equity | Accruing | |||
Troubled Debt Restructurings (TDRs) | |||
TDRs, number | loan | 9 | 12 | 13 |
TDRs, amount | $ 178 | $ 232 | $ 264 |
LOANS AND ALLOWANCE FOR CREDI_8
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Allowance for Credit Losses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Allowance for credit losses - loans. | |||
Beginning balance | $ 49,869 | ||
Provision | 14,773 | $ (8,839) | $ 14,212 |
Ending balance | 61,059 | 49,869 | |
Liabilities for off-balance-sheet credit exposures | |||
Charge-offs | 0 | 0 | |
Recoveries | 0 | 0 | |
PCD Allowance at Acquisition | 0 | ||
Provision | 320 | ||
Beginning balance | 803 | 1,489 | 0 |
Ending balance | 1,123 | 803 | 1,489 |
Allowance for Credit Losses | |||
Accrued interest and fees receivable | 25,100 | 16,700 | |
Allowance for loan losses | 61,059 | 49,869 | |
Elmira acquisition | |||
Allowance for credit losses - loans. | |||
Beginning balance | 49,900 | ||
Ending balance | 61,100 | 49,900 | |
Allowance for Credit Losses | |||
Allowance for loan losses | 61,100 | 49,900 | |
Topic ASC 326 | |||
Liabilities for off-balance-sheet credit exposures | |||
Charge-offs | 0 | ||
Recoveries | 0 | ||
Steuben acquisition | 67 | ||
Provision | (686) | 237 | |
Beginning balance | 1,489 | 1,185 | |
Ending balance | 1,489 | ||
Topic ASC 326 | Cumulative Effect Adjustment | |||
Liabilities for off-balance-sheet credit exposures | |||
Beginning balance | 1,185 | ||
Acquired Impaired Loans | |||
Allowance for credit losses - loans. | |||
Beginning balance | 163 | ||
Allowance for Credit Losses | |||
Allowance for loan losses | |||
Acquired Impaired Loans | Topic ASC 326 | |||
Allowance for credit losses - loans. | |||
Beginning balance | 0 | (163) | |
Charge-offs | 0 | ||
Recoveries | 0 | ||
Steuben acquisition | 0 | ||
Provision | 0 | ||
Ending balance | 0 | ||
Allowance for Credit Losses | |||
Allowance for loan losses | 0 | ||
Acquired Impaired Loans | Topic ASC 326 | Cumulative Effect Adjustment | |||
Allowance for credit losses - loans. | |||
Beginning balance | 0 | ||
Allowance for Credit Losses | |||
Allowance for loan losses | |||
Home Equity | |||
Allowance for credit losses - loans. | |||
Beginning balance | 2,129 | ||
Allowance for Credit Losses | |||
Allowance for loan losses | |||
Home Equity | Topic ASC 326 | |||
Allowance for credit losses - loans. | |||
Beginning balance | 2,222 | 808 | |
Charge-offs | (199) | ||
Recoveries | 28 | ||
Steuben acquisition | 235 | ||
Provision | (779) | ||
Ending balance | 2,222 | ||
Allowance for Credit Losses | |||
Allowance for loan losses | 2,222 | ||
Home Equity | Topic ASC 326 | Cumulative Effect Adjustment | |||
Allowance for credit losses - loans. | |||
Beginning balance | 2,937 | ||
Allowance for Credit Losses | |||
Allowance for loan losses | |||
Commercial Portfolio Segment | Business Lending | |||
Allowance for credit losses - loans. | |||
Beginning balance | 22,995 | 30,072 | 19,426 |
Charge-offs | (1,922) | ||
Recoveries | 796 | ||
Ending balance | 22,995 | 30,072 | |
Allowance for Credit Losses | |||
Allowance for loan losses | 22,995 | 30,072 | |
Commercial Portfolio Segment | Business Lending | Topic ASC 326 | |||
Allowance for credit losses - loans. | |||
Beginning balance | 30,072 | 3,360 | |
Charge-offs | (1,588) | ||
Recoveries | 796 | ||
Steuben acquisition | 3,011 | ||
Provision | (5,951) | 5,067 | |
Ending balance | 30,072 | ||
Allowance for Credit Losses | |||
Allowance for loan losses | 30,072 | ||
Commercial Portfolio Segment | Business Lending | Topic ASC 326 | Cumulative Effect Adjustment | |||
Allowance for credit losses - loans. | |||
Beginning balance | 22,786 | ||
Allowance for Credit Losses | |||
Allowance for loan losses | |||
Commercial Portfolio Segment | Consumer Mortgage | |||
Allowance for credit losses - loans. | |||
Beginning balance | 10,017 | 10,672 | 10,269 |
Charge-offs | (426) | ||
Recoveries | 91 | ||
Ending balance | 10,017 | 10,672 | |
Allowance for Credit Losses | |||
Allowance for loan losses | 10,017 | 10,672 | |
Commercial Portfolio Segment | Consumer Mortgage | Topic ASC 326 | |||
Allowance for credit losses - loans. | |||
Beginning balance | 10,672 | (1,051) | |
Charge-offs | (862) | ||
Recoveries | 130 | ||
Steuben acquisition | 146 | ||
Provision | (320) | 2,040 | |
Ending balance | 10,672 | ||
Allowance for Credit Losses | |||
Allowance for loan losses | 10,672 | ||
Commercial Portfolio Segment | Consumer Mortgage | Topic ASC 326 | Cumulative Effect Adjustment | |||
Allowance for credit losses - loans. | |||
Beginning balance | 9,218 | ||
Allowance for Credit Losses | |||
Allowance for loan losses | |||
Consumer Portfolio Segment | Business Lending | |||
Allowance for credit losses - loans. | |||
Beginning balance | 22,995 | ||
Charge-offs | (824) | ||
Recoveries | 1,374 | ||
PCD Allowance at Acquisition | 71 | ||
Provision | (319) | ||
Ending balance | 23,297 | 22,995 | |
Allowance for Credit Losses | |||
Allowance for loan losses | 23,297 | 22,995 | |
Consumer Portfolio Segment | Consumer Mortgage | |||
Allowance for credit losses - loans. | |||
Beginning balance | 10,017 | ||
Charge-offs | (313) | ||
Recoveries | 62 | ||
PCD Allowance at Acquisition | 0 | ||
Provision | 4,577 | ||
Ending balance | 14,343 | 10,017 | |
Allowance for Credit Losses | |||
Allowance for loan losses | 14,343 | 10,017 | |
Consumer Portfolio Segment | Consumer Indirect | |||
Allowance for credit losses - loans. | |||
Beginning balance | 11,737 | 13,696 | 13,712 |
Charge-offs | (7,986) | (5,160) | |
Recoveries | 4,756 | 4,346 | |
PCD Allowance at Acquisition | 0 | ||
Provision | 9,345 | ||
Ending balance | 17,852 | 11,737 | 13,696 |
Allowance for Credit Losses | |||
Allowance for loan losses | 17,852 | 11,737 | 13,696 |
Consumer Portfolio Segment | Consumer Indirect | Topic ASC 326 | |||
Allowance for credit losses - loans. | |||
Beginning balance | 13,696 | (997) | |
Charge-offs | (6,382) | ||
Recoveries | 3,992 | ||
Steuben acquisition | 183 | ||
Provision | (1,145) | 3,188 | |
Ending balance | 13,696 | ||
Allowance for Credit Losses | |||
Allowance for loan losses | 13,696 | ||
Consumer Portfolio Segment | Consumer Indirect | Topic ASC 326 | Cumulative Effect Adjustment | |||
Allowance for credit losses - loans. | |||
Beginning balance | 12,715 | ||
Allowance for Credit Losses | |||
Allowance for loan losses | |||
Consumer Portfolio Segment | Consumer Direct | |||
Allowance for credit losses - loans. | |||
Beginning balance | 2,306 | 3,207 | 3,255 |
Charge-offs | (1,252) | (1,232) | |
Recoveries | 772 | 793 | |
PCD Allowance at Acquisition | 0 | ||
Provision | 1,147 | ||
Ending balance | 2,973 | 2,306 | 3,207 |
Allowance for Credit Losses | |||
Allowance for loan losses | 2,973 | 2,306 | 3,207 |
Consumer Portfolio Segment | Consumer Direct | Topic ASC 326 | |||
Allowance for credit losses - loans. | |||
Beginning balance | 3,207 | (643) | |
Charge-offs | (1,633) | ||
Recoveries | 743 | ||
Steuben acquisition | 87 | ||
Provision | (462) | 1,398 | |
Ending balance | 3,207 | ||
Allowance for Credit Losses | |||
Allowance for loan losses | 3,207 | ||
Consumer Portfolio Segment | Consumer Direct | Topic ASC 326 | Cumulative Effect Adjustment | |||
Allowance for credit losses - loans. | |||
Beginning balance | 2,612 | ||
Allowance for Credit Losses | |||
Allowance for loan losses | |||
Consumer Portfolio Segment | Home Equity | |||
Allowance for credit losses - loans. | |||
Beginning balance | 1,814 | 2,222 | |
Charge-offs | (86) | (225) | |
Recoveries | 163 | 92 | |
PCD Allowance at Acquisition | 0 | ||
Provision | (297) | ||
Ending balance | 1,594 | 1,814 | 2,222 |
Allowance for Credit Losses | |||
Allowance for loan losses | 1,594 | 1,814 | 2,222 |
Consumer Portfolio Segment | Home Equity | Topic ASC 326 | |||
Allowance for credit losses - loans. | |||
Provision | (275) | ||
Unallocated Financing Receivables | |||
Allowance for credit losses - loans. | |||
Beginning balance | 1,000 | 1,000 | 957 |
Charge-offs | 0 | 0 | |
Recoveries | 0 | 0 | |
PCD Allowance at Acquisition | 0 | ||
Provision | 0 | ||
Ending balance | 1,000 | 1,000 | 1,000 |
Allowance for Credit Losses | |||
Allowance for loan losses | 1,000 | 1,000 | 1,000 |
Unallocated Financing Receivables | Topic ASC 326 | |||
Allowance for credit losses - loans. | |||
Beginning balance | 1,000 | 43 | |
Charge-offs | 0 | ||
Recoveries | 0 | ||
Steuben acquisition | 0 | ||
Provision | 0 | 0 | |
Ending balance | 1,000 | ||
Allowance for Credit Losses | |||
Allowance for loan losses | 1,000 | ||
Unallocated Financing Receivables | Topic ASC 326 | Cumulative Effect Adjustment | |||
Allowance for credit losses - loans. | |||
Beginning balance | 1,000 | ||
Allowance for Credit Losses | |||
Allowance for loan losses | |||
Allowances for credit losses | |||
Allowance for credit losses - loans. | |||
Beginning balance | 49,869 | 60,869 | 49,911 |
Charge-offs | (10,461) | (8,965) | |
Recoveries | 7,127 | 6,118 | |
PCD Allowance at Acquisition | 71 | ||
Provision | 14,453 | ||
Ending balance | 61,059 | 49,869 | 60,869 |
Allowance for Credit Losses | |||
Allowance for loan losses | 61,059 | 49,869 | 60,869 |
Allowances for credit losses | Topic ASC 326 | |||
Allowance for credit losses - loans. | |||
Beginning balance | 60,869 | 1,357 | |
Charge-offs | (10,664) | ||
Recoveries | 5,689 | ||
Steuben acquisition | 3,662 | ||
Provision | (8,153) | 10,914 | |
Ending balance | 60,869 | ||
Allowance for Credit Losses | |||
Allowance for loan losses | 60,869 | ||
Allowances for credit losses | Topic ASC 326 | Cumulative Effect Adjustment | |||
Allowance for credit losses - loans. | |||
Beginning balance | 51,268 | ||
Allowance for Credit Losses | |||
Allowance for loan losses | |||
Total allowances for credit losses | |||
Allowance for credit losses - loans. | |||
Beginning balance | 50,672 | 62,358 | 49,911 |
Charge-offs | (10,461) | (8,965) | |
Recoveries | 7,127 | 6,118 | |
PCD Allowance at Acquisition | 71 | ||
Provision | 14,773 | ||
Ending balance | 62,182 | 50,672 | 62,358 |
Allowance for Credit Losses | |||
Allowance for loan losses | $ 62,182 | 50,672 | 62,358 |
Total allowances for credit losses | Topic ASC 326 | |||
Allowance for credit losses - loans. | |||
Beginning balance | 62,358 | 2,542 | |
Charge-offs | (10,664) | ||
Recoveries | 5,689 | ||
Steuben acquisition | 3,729 | ||
Provision | $ (8,839) | 11,151 | |
Ending balance | 62,358 | ||
Allowance for Credit Losses | |||
Allowance for loan losses | 62,358 | ||
Total allowances for credit losses | Topic ASC 326 | Cumulative Effect Adjustment | |||
Allowance for credit losses - loans. | |||
Beginning balance | $ 52,453 | ||
Allowance for Credit Losses | |||
Allowance for loan losses |
LOANS AND ALLOWANCE FOR CREDI_9
LOANS AND ALLOWANCE FOR CREDIT LOSSES - Carrying Amounts of Loans Purchased and Sold (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Carrying Amounts of Loans Purchased and Sold | |
Purchases | $ 437,019 |
Sales | 5,309 |
Business Lending | |
Carrying Amounts of Loans Purchased and Sold | |
Purchases | 125,288 |
Sales | 0 |
Consumer Mortgage | |
Carrying Amounts of Loans Purchased and Sold | |
Purchases | 271,408 |
Sales | 5,309 |
Consumer Indirect | |
Carrying Amounts of Loans Purchased and Sold | |
Purchases | 9,383 |
Sales | 0 |
Consumer Direct | |
Carrying Amounts of Loans Purchased and Sold | |
Purchases | 12,511 |
Sales | 0 |
Home Equity | |
Carrying Amounts of Loans Purchased and Sold | |
Purchases | 18,429 |
Sales | $ 0 |
PREMISES AND EQUIPMENT (Details
PREMISES AND EQUIPMENT (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
PREMISES AND EQUIPMENT | ||
Premises and equipment, gross | $ 298,205 | $ 305,539 |
Accumulated depreciation | (137,427) | (144,888) |
Premises and equipment, net | 160,778 | 160,651 |
Land and land improvements | ||
PREMISES AND EQUIPMENT | ||
Premises and equipment, gross | 34,487 | 31,884 |
Assets held for sale | 2,500 | |
Bank premises | ||
PREMISES AND EQUIPMENT | ||
Premises and equipment, gross | 158,312 | 151,724 |
Bank premises | Other assets | ||
PREMISES AND EQUIPMENT | ||
Assets held for sale | 2,900 | |
Equipment | ||
PREMISES AND EQUIPMENT | ||
Premises and equipment, gross | 72,960 | 85,391 |
Construction in progress | ||
PREMISES AND EQUIPMENT | ||
Premises and equipment, gross | 2,377 | 4,786 |
Operating lease right-of-use assets | ||
PREMISES AND EQUIPMENT | ||
Premises and equipment, gross | 30,069 | $ 31,754 |
Premises and equipment | Other assets | ||
PREMISES AND EQUIPMENT | ||
Assets held for sale | $ 5,400 |
GOODWILL AND IDENTIFIABLE INT_3
GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Identifiable Intangible Assets | ||
Gross Carrying Amount | $ 197,186,000 | $ 186,202,000 |
Accumulated Amortization | (136,190,000) | (120,976,000) |
Net Carrying Amount | 60,996,000 | 65,226,000 |
Estimated aggregate amortization expense for each of five succeeding fiscal years | ||
2023 | 13,698,000 | |
2024 | 11,601,000 | |
2025 | 9,883,000 | |
2026 | 8,745,000 | |
2027 | 3,333,000 | |
Thereafter | 13,736,000 | |
Net Carrying Amount | 60,996,000 | 65,226,000 |
Components of goodwill | ||
Goodwill, beginning of period | 799,109,000 | 793,708,000 |
Goodwill, activity | 42,732,000 | 5,401,000 |
Goodwill, end of period | 841,841,000 | 799,109,000 |
Changes in carrying value of MSRs and the associated valuation allowance | ||
Carrying value before valuation allowance at beginning of period | 1,144,000 | 1,430,000 |
Additions | 83,000 | 233,000 |
Acquisitions | 2,879,000 | 0 |
Amortization | (801,000) | (519,000) |
Carrying value before valuation allowance at end of period | 3,305,000 | 1,144,000 |
Valuation allowance balance at beginning of period | 0 | (219,000) |
Impairment charges | (676,000) | (55,000) |
Impairment recoveries | 0 | 274,000 |
Valuation allowance balance at end of period | (676,000) | 0 |
Net carrying value at end of period | 2,629,000 | 1,144,000 |
Fair value of MSRs at end of period | 5,107,000 | 1,469,000 |
Principal balance of mortgage loans sold during the year | 5,309,000 | 20,133,000 |
Principal balance of loans serviced for others | 583,109,000 | 296,506,000 |
Custodial escrow balances maintained in connection with loans serviced for others | 10,534,000 | 4,934,000 |
Impairment loss for goodwill | $ 0 | $ 0 |
Key economic assumptions used to estimate the value of the MSRs | ||
Weighted-average contractual life (in years) | 21 years 7 months 6 days | 21 years 4 months 24 days |
Weighted-average constant prepayment rate (CPR) | 7.70% | 24.50% |
Weighted-average discount rate | 4.90% | 2.60% |
Core deposit intangibles | ||
Identifiable Intangible Assets | ||
Gross Carrying Amount | $ 77,373,000 | $ 69,403,000 |
Accumulated Amortization | (65,069,000) | (60,316,000) |
Net Carrying Amount | 12,304,000 | 9,087,000 |
Estimated aggregate amortization expense for each of five succeeding fiscal years | ||
Net Carrying Amount | 12,304,000 | 9,087,000 |
Other intangibles | ||
Identifiable Intangible Assets | ||
Gross Carrying Amount | 119,813,000 | 116,799,000 |
Accumulated Amortization | (71,121,000) | (60,660,000) |
Net Carrying Amount | 48,692,000 | 56,139,000 |
Estimated aggregate amortization expense for each of five succeeding fiscal years | ||
Net Carrying Amount | $ 48,692,000 | $ 56,139,000 |
DEPOSITS (Details)
DEPOSITS (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
DEPOSITS | ||
Noninterest checking | $ 4,140,617 | $ 3,921,663 |
Interest checking | 3,231,096 | 3,201,225 |
Savings | 2,433,922 | 2,255,961 |
Money market | 2,299,965 | 2,603,988 |
Time | 906,708 | 928,331 |
Total deposits | $ 13,012,308 | $ 12,911,168 |
DEPOSITS - Interest on Deposits
DEPOSITS - Interest on Deposits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Interest on deposits | |||
Interest on interest checking | $ 3,340 | $ 1,142 | $ 2,182 |
Interest on savings | 671 | 598 | 665 |
Interest on money market | 4,019 | 1,393 | 2,685 |
Interest on time | 7,014 | 8,498 | 11,229 |
Total interest on deposits | $ 15,044 | $ 11,631 | $ 16,761 |
DEPOSITS - Maturities of Time D
DEPOSITS - Maturities of Time Deposits (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
All Accounts | ||
2023 | $ 514,658 | |
2024 | 282,044 | |
2025 | 63,554 | |
2026 | 24,567 | |
2027 | 21,796 | |
Thereafter | 89 | |
Total | 906,708 | $ 928,331 |
Accounts $250,000 or Greater | ||
2023 | 67,302 | |
2024 | 53,970 | |
2025 | 5,472 | |
2026 | 262 | |
2027 | 2,075 | |
Thereafter | 0 | |
Total | $ 129,081 |
BORROWINGS - Outstanding Borrow
BORROWINGS - Outstanding Borrowings (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
BORROWINGS | ||
Subordinated notes payable, includes premium of $249 and $277, respectively | $ 3,249 | $ 3,277 |
Securities sold under agreement to repurchase, short-term | 346,652 | 324,720 |
Overnight borrowings | 768,400 | 0 |
Other FHLB borrowings, includes discount of $319 and $0, respectively | 19,474 | 1,888 |
Total borrowings | 1,137,775 | 329,885 |
Subordinated notes payable, premium | 249 | 277 |
Other FHLB borrowings, includes discount | $ 319 | $ 0 |
BORROWINGS - Contractual Maturi
BORROWINGS - Contractual Maturity on Borrowings (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Contractual maturity of borrowings | ||
Carrying value | $ 1,137,775 | $ 329,885 |
Weighted-average rate | 3.30% | |
Weighted-average interest rate on borrowings during period | 1.61% | 0.48% |
January 3 2023 [Member] | ||
Contractual maturity of borrowings | ||
Carrying value | $ 1,115,052 | |
Weighted-average rate | 3.32% | |
January 17, 2023 [Member] | ||
Contractual maturity of borrowings | ||
Carrying value | $ 2,000 | |
Weighted-average rate | 2.33% | |
February 08, 2023 [Member] | ||
Contractual maturity of borrowings | ||
Carrying value | $ 190 | |
Weighted-average rate | 1.79% | |
July 3, 2023 [Member] | ||
Contractual maturity of borrowings | ||
Carrying value | $ 470 | |
Weighted-average rate | 2.25% | |
October 23, 2023 [Member] | ||
Contractual maturity of borrowings | ||
Carrying value | $ 364 | |
Weighted-average rate | 1.50% | |
January 29, 2024 [Member] | ||
Contractual maturity of borrowings | ||
Carrying value | $ 2,013 | |
Weighted-average rate | 3.62% | |
January 7, 2025 [Member] | ||
Contractual maturity of borrowings | ||
Carrying value | $ 4,951 | |
Weighted-average rate | 2.78% | |
January 29, 2025 [Member] | ||
Contractual maturity of borrowings | ||
Carrying value | $ 4,937 | |
Weighted-average rate | 2.59% | |
February 28, 2025 [Member] | ||
Contractual maturity of borrowings | ||
Carrying value | $ 1,923 | |
Weighted-average rate | 1.38% | |
October 1, 2025 [Member] | ||
Contractual maturity of borrowings | ||
Carrying value | $ 262 | |
Weighted-average rate | 1.50% | |
March 1, 2027[Member] | ||
Contractual maturity of borrowings | ||
Carrying value | $ 1,858 | |
Weighted-average rate | 1.55% | |
February 28, 2028 [Member] | ||
Contractual maturity of borrowings | ||
Carrying value | $ 3,249 | |
Weighted-average rate | 4.67% | |
March 1, 2029 [Member] | ||
Contractual maturity of borrowings | ||
Carrying value | $ 506 | |
Weighted-average rate | 2.50% |
BORROWINGS - Additional informa
BORROWINGS - Additional information (Details) - USD ($) $ in Millions | Mar. 15, 2021 | Sep. 15, 2020 | Dec. 31, 2022 |
BORROWINGS | |||
Unused lines of credit | $ 25 | ||
Federal Home Loan Bank unused borrowing capacity | 1,080 | ||
Federal Reserve unused borrowing capacity | $ 490.5 | ||
Community Capital Trust IV [Member] | |||
BORROWINGS | |||
Redemption of debentures and associated preferred securities | $ 77.3 | ||
Kinderhook Capital Trust [Member] | |||
BORROWINGS | |||
Redemption of debentures and associated preferred securities | $ 2.1 |
INCOME TAXES - Provision for In
INCOME TAXES - Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current | |||
Federal | $ 41,025 | $ 35,507 | $ 35,728 |
State and other | 9,899 | 8,158 | 8,008 |
Deferred | |||
Federal | 1,163 | 5,493 | (2,005) |
State and other | 146 | 2,496 | (331) |
Provision for income taxes | 52,233 | 51,654 | 41,400 |
Unrecognized tax benefits | $ 0 | $ 0 | $ 0 |
INCOME TAXES - Components of Ne
INCOME TAXES - Components of Net Deferred Tax Liability (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Components of net deferred tax liability | ||
Investment securities | $ 191,953 | $ 0 |
Allowance for loan losses | 15,346 | 12,435 |
Employee benefits | 5,775 | 7,708 |
Operating lease liabilities | 7,552 | 7,955 |
Other, net | 4,385 | 1,250 |
Deferred tax asset | 225,011 | 29,348 |
Investment securities | 0 | 7,227 |
Goodwill and intangibles | 39,454 | 41,917 |
Operating lease right-of-use assets | 7,303 | 7,693 |
Loan origination costs | 9,731 | 8,993 |
Depreciation | 96 | 535 |
Mortgage servicing rights | 640 | 278 |
Pension | 18,154 | 22,950 |
Deferred tax liability | 75,378 | 89,593 |
Net deferred tax (liability) | $ (60,245) | |
Net deferred tax asset | $ 149,633 |
INCOME TAXES - Effective Tax Ra
INCOME TAXES - Effective Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Effective tax rate reconciliation | |||
Federal statutory income tax rate | 21% | 21% | 21% |
Increase (reduction) in taxes resulting from | |||
Tax-exempt interest | (1.30%) | (1.10%) | (1.50%) |
State income taxes, net of federal benefit | 3.30% | 3.60% | 3% |
Stock-based compensation | (0.30%) | (0.90%) | (0.80%) |
Federal tax credits | (1.00%) | (1.00%) | (1.30%) |
Other, net | (0.00%) | (0.20%) | (0.30%) |
Effective income tax rate | 21.70% | 21.40% | 20.10% |
LIMITS ON DIVIDENDS AND OTHER_2
LIMITS ON DIVIDENDS AND OTHER REVENUE SOURCES (Details) $ in Millions | Dec. 31, 2022 USD ($) |
LIMITS ON DIVIDENDS AND OTHER REVENUE SOURCES | |
Undivided profits legally available for the payments of dividends | $ 173.1 |
Percentage of Bank's capital and surplus that can be transferred to Company, maximum | 10% |
Aggregate percentage of Bank's capital and surplus that can be transferred to Company, maximum | 20% |
PENSION AND OTHER BENEFIT PLA_3
PENSION AND OTHER BENEFIT PLANS - Funded status and amounts recognized in balance sheets and AOCI (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2009 | |
Amounts recognized in accumulated other comprehensive loss/(income) ("AOCI") were: | ||||
AOCI at year end | $ 31,301 | $ 15,470 | $ 28,873 | |
Accumulated other comprehensive income (loss), negative postretirement medical plan amendment, arising during period, net of tax | $ 3,500 | |||
Pension Benefits | ||||
Change in benefit obligation: | ||||
Benefit obligation at the beginning of year | 183,270 | 190,361 | ||
Service cost | 4,959 | 5,920 | 5,750 | |
Interest cost | 5,334 | 5,036 | 5,657 | |
Plan amendment / acquisition | 1,851 | 0 | ||
Participant contributions | 0 | 0 | ||
Deferred actuarial (gain)/loss | (31,759) | (4,881) | ||
Benefits paid | (12,294) | (13,166) | ||
Benefit obligation at end of year | 151,361 | 183,270 | 190,361 | |
Change in plan assets: | ||||
Fair value of plan assets at beginning of year | 290,687 | 272,600 | ||
Actual return of plan assets | (34,967) | 27,614 | ||
Participant contributions | 0 | 0 | ||
Employer contributions | 906 | 3,639 | ||
Plan acquisition | 0 | 0 | ||
Benefits paid | (12,294) | (13,166) | ||
Fair value of plan assets at end of year | 244,332 | 290,687 | 272,600 | |
Over/(Under) funded status at year end | 92,971 | 107,417 | ||
Amounts recognized in the consolidated statement of condition were: | ||||
Other assets | 106,986 | 127,538 | ||
Other liabilities | (14,015) | (20,121) | ||
Amounts recognized in accumulated other comprehensive loss/(income) ("AOCI") were: | ||||
Net loss | 38,894 | 16,977 | ||
Net prior service cost (credit) | 3,112 | 3,969 | ||
Pre-tax AOCI | 42,006 | 20,946 | ||
Taxes | (10,351) | (5,236) | ||
AOCI at year end | 31,655 | 15,710 | ||
Pension Benefits | Nonqualified Plan | Unfunded Plan | ||||
Change in plan assets: | ||||
Employer contributions | 100 | 2,900 | ||
Pension Benefits | Restoration Plan | Nonqualified Plan | Unfunded Plan | ||||
Amounts recognized in accumulated other comprehensive loss/(income) ("AOCI") were: | ||||
Initial projected benefit obligation | 300 | |||
Post-retirement Benefits | ||||
Change in benefit obligation: | ||||
Benefit obligation at the beginning of year | 1,529 | 1,718 | ||
Service cost | 0 | 0 | 0 | |
Interest cost | 68 | 44 | 57 | |
Plan amendment / acquisition | 536 | 0 | ||
Participant contributions | 0 | 0 | ||
Deferred actuarial (gain)/loss | (306) | (85) | ||
Benefits paid | (171) | (148) | ||
Benefit obligation at end of year | 1,656 | 1,529 | 1,718 | |
Change in plan assets: | ||||
Fair value of plan assets at beginning of year | 0 | 0 | ||
Actual return of plan assets | 0 | 0 | ||
Participant contributions | 0 | 0 | ||
Employer contributions | 171 | 148 | ||
Plan acquisition | 0 | 0 | ||
Benefits paid | (171) | (148) | ||
Fair value of plan assets at end of year | 0 | 0 | $ 0 | |
Over/(Under) funded status at year end | (1,656) | (1,529) | ||
Amounts recognized in the consolidated statement of condition were: | ||||
Other assets | 0 | 0 | ||
Other liabilities | (1,656) | (1,529) | ||
Amounts recognized in accumulated other comprehensive loss/(income) ("AOCI") were: | ||||
Net loss | 255 | 585 | ||
Net prior service cost (credit) | (728) | (907) | ||
Pre-tax AOCI | (473) | (322) | ||
Taxes | 119 | 82 | ||
AOCI at year end | $ (354) | (240) | ||
Supplemental Pension Plans | Key Executives | ||||
Pension Plans | ||||
Defined Benefit Plan, Funding Status [Extensible List] | Unfunded Plan | |||
Change in benefit obligation: | ||||
Benefit obligation at the beginning of year | $ 19,800 | |||
Benefit obligation at end of year | 14,000 | 19,800 | ||
Amounts recognized in accumulated other comprehensive loss/(income) ("AOCI") were: | ||||
Benefit obligation for defined benefit pension plan prior to plan revaluation | $ 137,300 | $ 163,100 |
PENSION AND OTHER BENEFIT PLA_4
PENSION AND OTHER BENEFIT PLANS - Amounts recognized in AOCI, net of tax (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Amounts recognized in AOCI, net of tax | |||
Total | $ 15,831 | $ (13,403) | $ (6,009) |
Pension Benefits | |||
Amounts recognized in AOCI, net of tax | |||
Prior service cost/(credit) | (648) | (288) | |
Net (gain) loss | 16,593 | (13,152) | |
Total | 15,945 | (13,440) | |
Post-retirement Benefits | |||
Amounts recognized in AOCI, net of tax | |||
Prior service cost/(credit) | 135 | 136 | |
Net (gain) loss | (249) | (99) | |
Total | $ (114) | $ 37 |
PENSION AND OTHER BENEFIT PLA_5
PENSION AND OTHER BENEFIT PLANS - Weighted-average assumptions used to determine benefit obligations (Details) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Pension Benefits | ||
Weighted-average assumptions used to determine benefit obligations | ||
Discount rate | 5.40% | 3.10% |
Expected return on plan assets | 6.70% | 6.70% |
Pension Benefits | Year 2022 | ||
Weighted-average assumptions used to determine benefit obligations | ||
Rate of compensation increase | 4% | |
Pension Benefits | Year 2023 | ||
Weighted-average assumptions used to determine benefit obligations | ||
Rate of compensation increase | 4.50% | 3.50% |
Pension Benefits | Year 2024 | ||
Weighted-average assumptions used to determine benefit obligations | ||
Rate of compensation increase | 3.50% | |
while employed | ||
Weighted-average assumptions used to determine benefit obligations | ||
Interest crediting rates | 6% | 6% |
after termination | ||
Weighted-average assumptions used to determine benefit obligations | ||
Interest crediting rates | 3.55% | 1.94% |
Post-retirement Benefits | ||
Weighted-average assumptions used to determine benefit obligations | ||
Discount rate | 5.40% | 3.10% |
PENSION AND OTHER BENEFIT PLA_6
PENSION AND OTHER BENEFIT PLANS - Net periodic benefit cost (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Prior service costs | |||
Maximum percentage of net gain or loss over the greater of the projected benefit obligation or the market-related value of assets without requiring amortization | 10% | ||
Pension Benefits | |||
Net periodic benefit cost | |||
Service cost | $ 4,959 | $ 5,920 | $ 5,750 |
Interest cost | 5,334 | 5,036 | 5,657 |
Expected return on plan assets | (19,025) | (18,783) | (16,306) |
Plan amendment | (556) | 0 | (637) |
Amortization of unrecognized net loss | 842 | 3,600 | 3,239 |
Amortization of prior service cost | 615 | 379 | 241 |
Net periodic (benefit) | (7,831) | (3,848) | 2,056 |
Post-retirement Benefits | |||
Net periodic benefit cost | |||
Service cost | 0 | 0 | 0 |
Interest cost | 68 | 44 | 57 |
Expected return on plan assets | 0 | 0 | 0 |
Plan amendment | 0 | 0 | 0 |
Amortization of unrecognized net loss | 23 | 45 | 40 |
Amortization of prior service cost | (179) | (179) | (179) |
Net periodic (benefit) | $ (88) | $ (90) | $ (82) |
PENSION AND OTHER BENEFIT PLA_7
PENSION AND OTHER BENEFIT PLANS - Weighted-average assumptions used to determine net periodic benefit cost (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Pension Benefits | |||
Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost | |||
Discount rate | 3.10% | 2.80% | 3.50% |
Expected return on plan assets | 6.70% | 7% | 7% |
Rate of compensation increase | 3.50% | 3.50% | |
Pension Benefits | Year 2022 | |||
Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost | |||
Rate of compensation increase | 4% | ||
Pension Benefits | Year 2023 | |||
Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost | |||
Rate of compensation increase | 3.50% | ||
while employed | |||
Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost | |||
Interest credting rates | 6% | 6% | 6% |
after termination | |||
Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost | |||
Interest credting rates | 1.94% | 1.42% | 2.16% |
Post-retirement Benefits | |||
Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost | |||
Discount rate | 3.10% | 2.80% | 3.60% |
PENSION AND OTHER BENEFIT PLA_8
PENSION AND OTHER BENEFIT PLANS - Estimated Future Benefit Payments (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Pension Benefits | |
Estimated Future Benefit Payments | |
2023 | $ 11,583 |
2024 | 11,965 |
2025 | 11,693 |
2026 | 12,934 |
2027 | 12,723 |
2028-2032 | 64,686 |
Post-retirement Benefits | |
Estimated Future Benefit Payments | |
2023 | 192 |
2024 | 154 |
2025 | 152 |
2026 | 150 |
2027 | 148 |
2028-2032 | $ 972 |
PENSION AND OTHER BENEFIT PLA_9
PENSION AND OTHER BENEFIT PLANS - Target plan assets allocation (Details) | Dec. 31, 2022 |
Equity Securities | |
Plan Assets | |
Target allocation percentage of assets | 60% |
Fixed Income Securities | |
Plan Assets | |
Target allocation percentage of assets | 40% |
PENSION AND OTHER BENEFIT PL_10
PENSION AND OTHER BENEFIT PLANS - Fair value of plan assets by assets category (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Total | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | [1] | $ 243,704 | $ 290,247 | |
Total | Level 1 | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | [1] | 226,599 | 284,137 | |
Total | Level 2 | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | [1] | 17,105 | 6,110 | |
Total | Level 3 | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | [1] | 0 | 0 | |
Money Market Accounts / Cash Equivalents | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | 18,625 | 19,605 | ||
Money Market Accounts / Cash Equivalents | Level 1 | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | 18,625 | 19,605 | ||
Money Market Accounts / Cash Equivalents | Level 2 | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | 0 | 0 | ||
Money Market Accounts / Cash Equivalents | Level 3 | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | 0 | 0 | ||
Equity Securities | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | 128,539 | 169,818 | ||
Equity Securities | Level 1 | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | 128,539 | 169,818 | ||
Equity Securities | Level 2 | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | 0 | 0 | ||
Equity Securities | Level 3 | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | 0 | 0 | ||
U.S. Large-Cap | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | 52,682 | 75,180 | ||
U.S. Large-Cap | Level 1 | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | 52,682 | 75,180 | ||
U.S. Large-Cap | Level 2 | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | 0 | 0 | ||
U.S. Large-Cap | Level 3 | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | 0 | 0 | ||
U.S. mid/small cap | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | 16,432 | 12,052 | ||
U.S. mid/small cap | Level 1 | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | 16,432 | 12,052 | ||
U.S. mid/small cap | Level 2 | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | 0 | 0 | ||
U.S. mid/small cap | Level 3 | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | 0 | 0 | ||
CBU common stock | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | 6,427 | 7,604 | ||
CBU common stock | Level 1 | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | 6,427 | 7,604 | ||
CBU common stock | Level 2 | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | 0 | 0 | ||
CBU common stock | Level 3 | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | 0 | 0 | ||
International | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | 51,725 | 73,891 | ||
International | Level 1 | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | 51,725 | 73,891 | ||
International | Level 2 | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | 0 | 0 | ||
International | Level 3 | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | 0 | 0 | ||
other | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | 1,273 | 1,091 | ||
other | Level 1 | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | 1,273 | 1,091 | ||
other | Level 2 | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | 0 | 0 | ||
other | Level 3 | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | 0 | 0 | ||
Fixed Income Securities | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | 82,198 | 76,097 | ||
Fixed Income Securities | Level 1 | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | 65,093 | 69,987 | ||
Fixed Income Securities | Level 2 | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | 17,105 | 6,110 | ||
Fixed Income Securities | Level 3 | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | 0 | 0 | ||
US Treasury And Government | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | 56,562 | 25,962 | ||
US Treasury And Government | Level 1 | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | 44,995 | 19,988 | ||
US Treasury And Government | Level 2 | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | 11,567 | 5,974 | ||
US Treasury And Government | Level 3 | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | 0 | 0 | ||
Investment Grade Bonds | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | 18,502 | 41,510 | ||
Investment Grade Bonds | Level 1 | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | 12,964 | 41,374 | ||
Investment Grade Bonds | Level 2 | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | 5,538 | 136 | ||
Investment Grade Bonds | Level 3 | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | 0 | 0 | ||
High Yield | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | [2] | 7,134 | 8,625 | |
High Yield | Level 1 | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | [2] | 7,134 | 8,625 | |
High Yield | Level 2 | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | [2] | 0 | 0 | |
High Yield | Level 3 | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | [2] | 0 | 0 | |
Other Investments | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | [3] | 14,342 | 24,727 | |
Other Investments | Level 1 | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | [3] | 14,342 | 24,727 | |
Other Investments | Level 2 | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | [3] | 0 | 0 | |
Other Investments | Level 3 | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | [3] | 0 | 0 | |
Dividends and Interest Receivable | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | 600 | 400 | ||
Pension Benefits | ||||
Defined Benefit Plan | ||||
Fair value of plan assets | 244,332 | 290,687 | $ 272,600 | |
Pension Plans | ||||
Contribution made to defined benefit pension plan by employer | 906 | 3,639 | ||
Pension Benefits | Nonqualified Plan | Unfunded Plan | ||||
Pension Plans | ||||
Contribution made to defined benefit pension plan by employer | $ 100 | $ 2,900 | ||
[1]Excludes dividends and interest receivable totaling $0.6 million and $0.4 million at December 31, 2022 and 2021, respectively.[2]This category is exchange-traded funds representing a diversified index of high yield corporate bonds.[3]This category is comprised of exchange-traded funds and mutual funds holding non-traditional investment classes including private equity funds and alternative exchange funds. |
PENSION AND OTHER BENEFIT PL_11
PENSION AND OTHER BENEFIT PLANS - 401(K) Employee Stock Ownership Plan (Details) - 401(k) Employee Stock Ownership Plan - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
PENSION AND OTHER BENEFIT PLANS | |||
Percentage of first eligible compensation fully matched by employer | 3% | ||
Percentage of matching contribution in the form of common stock | 100% | ||
Percentage of the next eligible compensation matched at 50% by employer | 3% | ||
Percentage of matching contributions for the next eligible compensation in the form of company stock | 50% | ||
(Income)/expense recognized under plan | $ 7.1 | $ 6.9 | $ 6.3 |
Interest credit contribution expense recognized for 401(k) plan | $ 1.4 | $ 1.1 | $ 0.9 |
Minimum | |||
PENSION AND OTHER BENEFIT PLANS | |||
Contribution from eligible compensation | 1% | ||
Maximum | |||
PENSION AND OTHER BENEFIT PLANS | |||
Contribution from eligible compensation | 90% |
PENSION AND OTHER BENEFIT PL_12
PENSION AND OTHER BENEFIT PLANS - Other Deferred Compensation Arrangements (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Deferred Compensation Arrangements | |||
Deferred compensation arrangements (135,437 shares at December 31, 2022 and 146,860 shares at December 31, 2021) | $ 7,756 | $ 8,362 | |
Other Deferred Compensation Arrangements | |||
Deferred Compensation Arrangements | |||
Deferred compensation arrangements (135,437 shares at December 31, 2022 and 146,860 shares at December 31, 2021) | 4,500 | 5,100 | |
Expense recognized under plan | $ 200 | $ 200 | $ 400 |
PENSION AND OTHER BENEFIT PL_13
PENSION AND OTHER BENEFIT PLANS - Deferred Compensation Plans for Directors (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Deferred Compensation Arrangements | |||
Liability accrued for compensation plan | $ 7,756 | $ 8,362 | |
Deferred Compensation Plans for Directors | Directors | |||
Deferred Compensation Arrangements | |||
Deferred compensation arrangement with individual, shares credited (in shares) | 136,256 | 137,945 | |
Liability accrued for compensation plan | $ 5,500 | $ 5,100 | |
Expense recognized under plan | $ 200 | $ 200 | $ 200 |
STOCK-BASED COMPENSATION PLAN_2
STOCK-BASED COMPENSATION PLANS - Long-term incentive program (Details) - USD ($) $ in Millions | 12 Months Ended | ||||||
May 17, 2017 | May 14, 2014 | May 25, 2011 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | May 18, 2022 | |
Share-based arrangements with employees and non-employees | |||||||
Shares of common stock authorized for stock-based compensation plan (in shares) | 4,000,000 | ||||||
Additional shares of common stock authorized for stock-based compensation plan (in shares) | 1,000,000 | 1,000,000 | 900,000 | ||||
Number of shares available for grant (in shares) | 1,000,000 | 600,000 | |||||
Nonqualified Stock Option | |||||||
Share-based arrangements with employees and non-employees | |||||||
Stock-based compensation expense | $ 2.9 | $ 2.6 | $ 2.7 | ||||
Income tax benefit | $ 0.7 | $ 0.6 | $ 0.7 | ||||
Stock Options | |||||||
Share-based arrangements with employees and non-employees | |||||||
Term of options | 10 years | ||||||
Award vesting period | 5 years | ||||||
Director's Stock Balance Plan | Nonqualified Stock Option | |||||||
Share-based arrangements with employees and non-employees | |||||||
Term of options | 1 year | ||||||
Term of options in event of death | 2 years |
STOCK-BASED COMPENSATION PLAN_3
STOCK-BASED COMPENSATION PLANS - Activity in this long-term incentive program (Details) - Stock Options - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Options, Outstanding | ||
Outstanding, beginning of period (in shares) | 1,392,705 | 1,542,259 |
Granted (in shares) | 173,313 | 168,976 |
Exercised (in shares) | (67,566) | (310,423) |
Forfeited (in shares) | (13,430) | (8,107) |
Outstanding, end of period (in shares) | 1,485,022 | 1,392,705 |
Exercisable, end of period (in shares) | 1,005,851 | |
Weighted-average exercise price of shares | ||
Outstanding, beginning of period (in dollars per share) | $ 50.73 | $ 45.49 |
Granted (in dollars per share) | 71.78 | 79.68 |
Exercised (in dollars per share) | 41.61 | 40.17 |
Forfeited (in dollars per share) | 67.88 | 61.56 |
Outstanding, end of period (in dollars per share) | 53.45 | $ 50.73 |
Exercisable, end of period (in dollars per share) | $ 47.31 |
STOCK-BASED COMPENSATION PLAN_4
STOCK-BASED COMPENSATION PLANS - Summary of stock options outstanding (Details) $ / shares in Units, $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) $ / shares shares | |
Options | |
Options outstanding, shares (in shares) | shares | 1,485,022 |
Options outstanding, weighted-average exercise price (in dollars per share) | $ 47.31 |
Options outstanding, weighted-average remaining life | 5 years 4 months 6 days |
Options exercisable, shares (in shares) | shares | 1,005,851 |
Options exercisable, weighted-average exercise price (in dollars per share) | $ 47.31 |
Weighted-average remaining contractual term of outstanding stock options (years) | 5 years 4 months 6 days |
Weighted-average remaining contractual term of outstanding and exercisable stock options (years) | 4 years 1 month 20 days |
Aggregate intrinsic value of outstanding stock options | $ | $ 18.3 |
Aggregate intrinsic value of exercisable stock options | $ | $ 16.6 |
$0.00 - $25.00 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures | |
Exercise price range, minimum (in dollars per share) | $ 0 |
Exercise price range, maximum (in dollars per share) | $ 25 |
Options | |
Options outstanding, shares (in shares) | shares | 40,002 |
Options outstanding, weighted-average exercise price (in dollars per share) | $ 23.04 |
Options outstanding, weighted-average remaining life | 4 years |
Options exercisable, shares (in shares) | shares | 40,002 |
Options exercisable, weighted-average exercise price (in dollars per share) | $ 23.04 |
$25.01 - $35.00 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures | |
Exercise price range, minimum (in dollars per share) | 25.01 |
Exercise price range, maximum (in dollars per share) | $ 35 |
Options | |
Options outstanding, shares (in shares) | shares | 51,744 |
Options outstanding, weighted-average exercise price (in dollars per share) | $ 29.79 |
Options outstanding, weighted-average remaining life | 2 months 15 days |
Options exercisable, shares (in shares) | shares | 51,744 |
Options exercisable, weighted-average exercise price (in dollars per share) | $ 29.79 |
$35.01 - $45.00 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures | |
Exercise price range, minimum (in dollars per share) | 35.01 |
Exercise price range, maximum (in dollars per share) | $ 45 |
Options | |
Options outstanding, shares (in shares) | shares | 386,999 |
Options outstanding, weighted-average exercise price (in dollars per share) | $ 37.07 |
Options outstanding, weighted-average remaining life | 2 years 5 months 12 days |
Options exercisable, shares (in shares) | shares | 386,999 |
Options exercisable, weighted-average exercise price (in dollars per share) | $ 37.07 |
$45.01 - $55.00 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures | |
Exercise price range, minimum (in dollars per share) | 45.01 |
Exercise price range, maximum (in dollars per share) | $ 55 |
Options | |
Options outstanding, shares (in shares) | shares | 674,921 |
Options outstanding, weighted-average exercise price (in dollars per share) | $ 55.55 |
Options outstanding, weighted-average remaining life | 5 years 10 months 9 days |
Options exercisable, shares (in shares) | shares | 472,240 |
Options exercisable, weighted-average exercise price (in dollars per share) | $ 56.06 |
$55.01 - $81.00 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures | |
Exercise price range, minimum (in dollars per share) | 55.01 |
Exercise price range, maximum (in dollars per share) | $ 81 |
Options | |
Options outstanding, shares (in shares) | shares | 331,356 |
Options outstanding, weighted-average exercise price (in dollars per share) | $ 75.67 |
Options outstanding, weighted-average remaining life | 8 years 8 months 4 days |
Options exercisable, shares (in shares) | shares | 54,866 |
Options exercisable, weighted-average exercise price (in dollars per share) | $ 78.44 |
STOCK-BASED COMPENSATION PLAN_5
STOCK-BASED COMPENSATION PLANS - Assumptions used to estimate value of stock options (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
STOCK-BASED COMPENSATION PLANS | |||
Fair value assumptions, method used | Black-Scholes option-pricing model | ||
Weighted-average Fair Value of Options Granted (in dollars per share) | $ 17.86 | $ 18.43 | $ 10.86 |
Assumptions: | |||
Weighted-average expected life | 6 years 6 months | 6 years 6 months | 6 years 6 months |
Future dividend yield | 2.41% | 2.48% | 2.57% |
Share price volatility | 29.88% | 30.09% | 29.29% |
Weighted-average risk-free interest rate | 2.16% | 1.28% | 0.67% |
STOCK-BASED COMPENSATION PLAN_6
STOCK-BASED COMPENSATION PLANS - Unrecognized stock-based compensation expense and stock option exercises (Details) - Stock Options - USD ($) shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Unrecognized stock-based compensation expense and stock option exercises | |||
Unrecognized stock-based compensation expense related to non-vested stock options | $ 5.6 | ||
Weighted-average period over which unrecognized expense | 3 years 2 months 12 days | ||
Total fair value of stock options vested | $ 2.7 | $ 2.5 | $ 2.5 |
Proceeds from stock option exercises | 3.2 | 14.2 | |
Related tax benefits from stock option exercises | $ 0.3 | $ 1.8 | |
Shares issued in connection with stock option exercise (in shares) | 60 | 300 | |
Total intrinsic value of options exercised | $ 2 | $ 10.3 | $ 6.6 |
STOCK-BASED COMPENSATION PLAN_7
STOCK-BASED COMPENSATION PLANS - Activity of unvested Restricted Stock Awards (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Restricted Shares | |||
Unvested, beginning of period (in shares) | 47,820 | 48,976 | |
Awards (in shares) | 35,815 | 0 | |
Forfeitures (in shares) | (51,000) | (578) | |
Vestings (in shares) | (636) | (578) | |
Unvested, end of period (in shares) | 31,999 | 47,820 | 48,976 |
Weighted-average grant date fair value | |||
Unvested, beginning of period (in dollars per share) | $ 29.71 | $ 29.71 | |
Awards (in dollars per share) | 34.93 | 0 | |
Forfeitures (in dollars per share) | 30.02 | 29.71 | |
Vestings (in dollars per share) | 35.89 | 29.71 | |
Unvested, end of period (in dollars per share) | $ 34.93 | $ 29.71 | $ 29.71 |
Restricted Stock | |||
Restricted Shares | |||
Unvested, beginning of period (in shares) | 129,448 | 127,432 | |
Awards (in shares) | 56,871 | 51,456 | |
Forfeitures (in shares) | (2,940) | (2,041) | |
Vestings (in shares) | (49,859) | (47,399) | |
Unvested, end of period (in shares) | 133,520 | 129,448 | 127,432 |
Weighted-average grant date fair value | |||
Unvested, beginning of period (in dollars per share) | $ 64.32 | $ 53.97 | |
Awards (in dollars per share) | 71.58 | 79.51 | |
Forfeitures (in dollars per share) | 67.44 | 55.39 | |
Vestings (in dollars per share) | 62.86 | 53.13 | |
Unvested, end of period (in dollars per share) | $ 67.89 | $ 64.32 | $ 53.97 |
Unrecognized stock-based compensation expense | $ 6,400 | ||
Award vesting period | 5 years | ||
Weighted-average period for recognition of unrecognized compensation cost | 2 years 4 months 24 days | ||
Total fair value of restricted stock vested | $ 3,100 | $ 2,500 | $ 2,700 |
Vesting period | 5 years | ||
Performance Awards | |||
Restricted Shares | |||
Unvested, end of period (in shares) | 31,999 | ||
Weighted-average grant date fair value | |||
Unrecognized stock-based compensation expense | $ 700 | ||
Award vesting period | 3 years | ||
Weighted-average period for recognition of unrecognized compensation cost | 2 years | ||
Total fair value of restricted stock vested | $ 20 | 10 | 100 |
Stock-based compensation expense | $ 3,800 | $ 2,800 | $ 2,700 |
Vesting period | 3 years | ||
Performance Awards | Granted prior to 2022 | |||
Weighted-average grant date fair value | |||
Award vesting period | 5 years | ||
Vesting period | 5 years | ||
Performance Awards | Granted in 2022 and thereafter | |||
Weighted-average grant date fair value | |||
Award vesting period | 3 years | ||
Vesting period | 3 years |
STOCK-BASED COMPENSATION PLAN_8
STOCK-BASED COMPENSATION PLANS - Performance Awards (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Shares | ||
Unvested, beginning of period (in shares) | 47,820 | 48,976 |
Awards (in shares) | 35,815 | 0 |
Forfeitures (in shares) | (51,000) | (578) |
Vestings (in shares) | (636) | (578) |
Unvested, end of period (in shares) | 31,999 | 47,820 |
Weighted-average grant date fair value | ||
Unvested, beginning of period (in dollars per share) | $ 29.71 | $ 29.71 |
Awards (in dollars per share) | 34.93 | 0 |
Forfeitures (in dollars per share) | 30.02 | 29.71 |
Vestings (in dollars per share) | 35.89 | 29.71 |
Unvested, end of period (in dollars per share) | $ 34.93 | $ 29.71 |
Performance Awards | ||
Shares | ||
Unvested, end of period (in shares) | 31,999 |
STOCK-BASED COMPENSATION PLAN_9
STOCK-BASED COMPENSATION PLANS - Performance Awards - Additional information (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) item shares | Dec. 31, 2021 USD ($) shares | Dec. 31, 2020 USD ($) shares | |
STOCK-BASED COMPENSATION PLANS | |||
Shares issuable | shares | 31,999 | 47,820 | 48,976 |
Performance Awards | |||
STOCK-BASED COMPENSATION PLANS | |||
Number of sets of performance criteria | item | 2 | ||
Cumulative period of Relative Total Shareholder Pattern | 3 years | ||
Relative TSR employment weightage (as percent) | 50% | ||
Core ROATCE period | 3 years | ||
Relative Total Performance Goal, weightage (as percent) | 50% | ||
Vesting period | 3 years | ||
Estimated payout percent | 90% | ||
Shares issuable | shares | 31,999 | ||
Unrecognized stock-based compensation expense | $ | $ 700 | ||
Weighted-average period over which unrecognized expense | 2 years | ||
Total fair value of restricted stock vested | $ | $ 20 | $ 10 | $ 100 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
EARNINGS PER SHARE | |||
Weighted-average anti-dilutive stock options outstanding | 100,000 | 600,000 | |
Basic earnings per share | |||
Net income | $ 188,081 | $ 189,694 | $ 164,676 |
Income attributable to unvested stock-based compensation awards | (533) | (445) | (514) |
Income available to common shareholders | $ 187,548 | $ 189,249 | $ 164,162 |
Weighted-average common shares outstanding | 53,896,000 | 53,977,000 | 52,969,000 |
Basic earnings per share | $ 3.48 | $ 3.51 | $ 3.10 |
Diluted earnings per share | |||
Net income | $ 188,081 | $ 189,694 | $ 164,676 |
Income attributable to unvested stock-based compensation awards | (533) | (445) | (514) |
Income available to common shareholders | $ 187,548 | $ 189,249 | $ 164,162 |
Weighted-average common shares outstanding | 53,896,000 | 53,977,000 | 52,969,000 |
Assumed exercise of stock options | 312,000 | 423,000 | 352,000 |
Weighted-average common shares outstanding - diluted | 54,208,000 | 54,400,000 | 53,321,000 |
Diluted earnings per share | $ 3.46 | $ 3.48 | $ 3.08 |
Cash dividends declared per share (in dollars per share) | $ 1.74 | $ 1.70 | $ 1.66 |
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) | 250,000 |
COMMITMENTS, CONTINGENT LIABI_3
COMMITMENTS, CONTINGENT LIABILITIES AND RESTRICTIONS (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
COMMITMENTS, CONTINGENT LIABILITIES AND RESTRICTIONS | ||||
Contract amount of commitments and contingencies | $ 1,544,138,000 | $ 1,486,563,000 | ||
Federal Reserve unused borrowing capacity | 490,500,000 | |||
Federal Reserve required average total reserve | 0 | 0 | ||
Litigation accrual | 0 | (100,000) | $ 2,950,000 | |
Litigation settlement amount | $ 2,900,000 | |||
Adjustment to the Company's litigation accrual | 100,000 | |||
Minimum | ||||
COMMITMENTS, CONTINGENT LIABILITIES AND RESTRICTIONS | ||||
Range of reasonably possible losses for such matters in the aggregate, beyond the existing recorded liability | 0 | |||
Maximum | ||||
COMMITMENTS, CONTINGENT LIABILITIES AND RESTRICTIONS | ||||
Range of reasonably possible losses for such matters in the aggregate, beyond the existing recorded liability | 1,000,000 | |||
Commitments to extend credit | ||||
COMMITMENTS, CONTINGENT LIABILITIES AND RESTRICTIONS | ||||
Contract amount of commitments and contingencies | 1,486,791,000 | 1,443,879,000 | ||
Standby letters of credit | ||||
COMMITMENTS, CONTINGENT LIABILITIES AND RESTRICTIONS | ||||
Contract amount of commitments and contingencies | $ 57,347,000 | $ 42,684,000 |
LEASES (Details)
LEASES (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Operating Leases | ||||
Term of option to terminate | 1 year | |||
Components of Lease Expense | ||||
Operating lease cost | $ 8,568 | $ 8,397 | $ 9,000 | |
Variable lease cost | 108 | 50 | 53 | |
Short-term lease cost | [1] | 65 | 148 | 369 |
Total lease cost | 8,741 | 8,595 | $ 9,422 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||||
Operating cash outflows for operating leases | 8,402 | 8,203 | ||
Right-of-use assets obtained in exchange for lease obligations: | ||||
Operating leases | 6,758 | 5,344 | ||
Operating leases | ||||
Operating lease right-of-use assets | $ 30,069 | $ 31,754 | ||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Property, Plant and Equipment, Net | Property, Plant and Equipment, Net | ||
Operating lease liabilities | $ 31,091 | $ 32,833 | ||
Operating Lease, Liability, Statement of Financial Position [Extensible List] | Operating lease liabilities | Operating lease liabilities | ||
Weighted average remaining lease term | ||||
Operating leases | 4 years 10 months 24 days | 5 years 4 months 24 days | ||
Weighted average discount rate | ||||
Operating leases | 2.89% | 2.62% | ||
Minimum | ||||
Operating Leases | ||||
Remaining term of lease | 1 year | |||
Term of option to extend | 1 year | |||
Maximum | ||||
Operating Leases | ||||
Remaining term of lease | 12 years | |||
Term of option to extend | 40 years | |||
[1]Short-term lease cost includes the cost of leases with terms of twelve months or less, excluding leases with terms of one month or less. |
LEASES - Maturities of lease li
LEASES - Maturities of lease liabilities (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 USD ($) lease | Dec. 31, 2021 USD ($) | |
Maturities of Lease Liabilities: | ||
2023 / 2022 | $ 8,995 | $ 8,729 |
2024 / 2023 | 7,579 | 7,640 |
2025 / 2024 | 5,992 | 5,920 |
2026 / 2025 | 4,180 | 4,401 |
2027 / 2026 | 2,547 | 3,062 |
Thereafter | 4,333 | 5,846 |
Total lease payments | 33,626 | 35,598 |
Less imputed interest | (2,535) | (2,765) |
Total | 31,091 | 32,833 |
Operating lease right-of-use assets | 30,069 | 31,754 |
Operating lease liabilities | 31,091 | 32,833 |
Total | $ 31,091 | $ 32,833 |
Weighted average remaining lease term operating lease | 4 years 10 months 24 days | 5 years 4 months 24 days |
Weighted average discount rate operating lease | 2.89% | 2.62% |
Office Space | ||
Maturities of Lease Liabilities: | ||
Total | $ 11,500 | |
Operating lease right-of-use assets | $ 11,500 | |
Additional operating leases | lease | 4 | |
Operating lease liabilities | $ 11,500 | |
Total | $ 11,500 | |
Weighted average remaining lease term operating lease | 11 years 10 months 24 days | |
706 North Clinton | ||
Maturities of Lease Liabilities: | ||
2023 / 2022 | $ 591 | $ 591 |
2024 / 2023 | 591 | 591 |
2025 / 2024 | 605 | 591 |
2026 / 2025 | 615 | 605 |
2027 / 2026 | 506 | 614 |
Thereafter | 1,221 | 1,727 |
Total lease payments | 4,129 | 4,719 |
Less imputed interest | (493) | (633) |
Total | $ 3,636 | 4,086 |
Membership interest | 50% | |
Operating lease right-of-use assets | 4,000 | |
Operating lease liabilities | $ 3,636 | 4,086 |
Total | $ 3,636 | $ 4,086 |
Weighted average remaining lease term operating lease | 7 years | 8 years |
Weighted average discount rate operating lease | 3.68% | 3.68% |
REGULATORY MATTERS (Details)
REGULATORY MATTERS (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Tier 1 Leverage ratio | ||
Required capital conservation ratio | 2.50% | 2.50% |
Tier 1 Leverage ratio, actual amount | $ 1,381,598 | $ 1,331,368 |
Tier 1 Leverage ratio, actual ratio | 0.0879 | 0.0909 |
Tier 1 leverage ratio for capital adequacy purposes, amount | $ 628,485 | $ 585,594 |
Tier 1 leverage ratio for capital adequacy purposes, ratio | 0.0400 | 0.0400 |
Tier 1 leverage capital to be well-capitalized under prompt corrective action, amount | $ 785,606 | $ 731,993 |
Tier 1 leverage capital to be well-capitalized under prompt corrective action, ratio | 0.0500 | 0.0500 |
Tier 1 risk-based capital | ||
Tier 1 risk-based capital, actual amount | $ 1,381,598 | $ 1,331,368 |
Tier 1 risk-based capital, actual ratio | 0.1571 | 0.1860 |
Tier 1 risk-based capital for capital adequacy purposes, amount | $ 527,695 | $ 429,559 |
Tier 1 risk-based capital for capital adequacy purposes, ratio | 0.0600 | 0.0600 |
Tier 1 risk-based capital for capital adequacy purposes plus capital conservation buffer, amount | $ 747,568 | $ 608,542 |
Tier 1 risk-based capital for capital adequacy purposes plus capital conservation buffer, ratio | 8.50% | 8.50% |
Tier 1 risk based capital to be well-capitalized under prompt corrective action, amount | $ 703,593 | $ 572,746 |
Tier 1 risk-based capital to be well-capitalized under prompt corrective action, ratio | 0.0800 | 0.0800 |
Total risk-based capital | ||
Total risk-based capital, actual amount | $ 1,442,529 | $ 1,380,458 |
Total risk-based capital, actual ratio | 0.1640 | 0.1928 |
Total risk-based capital for capital adequacy purposes, amoun | $ 703,593 | $ 572,746 |
Total risk-based capita for capital adequacy purposes, ratio | 0.0800 | 0.0800 |
Total risk-based capital for capital adequacy purposes plus capital conservation buffer, amount | $ 923,466 | $ 751,729 |
Total risk-based capita for capital adequacy purposes plus capital conservation buffer, ratio | 10.50% | 10.50% |
Total risk based capital to be well-capitalized under prompt corrective action, amount | $ 879,491 | $ 715,932 |
Total risk based capital to be well-capitalized under prompt corrective action, ratio | 0.1000 | 0.1000 |
Common equity Tier 1 capital | ||
Common equity Tier 1 capital, actual amount | $ 1,381,439 | $ 1,331,259 |
Common equity Tier 1 capital, actual ratio | 0.1571 | 0.1860 |
Common equity Tier 1 capital for capital adequacy purposes, amount | $ 395,771 | $ 322,169 |
Common equity Tier 1 capital for capital adequacy purposes, ratio | 0.045% | 0.045% |
Common equity Tier 1 capital for capital adequacy purposes plus capital conservation buffer, amount | $ 615,644 | $ 501,152 |
Common equity Tier 1 capital for capital adequacy purposes plus capital conservation buffer, ratio | 7% | 7% |
Common equity Tier 1 capital to be well-capitalized under prompt corrective action, amount | $ 571,669 | $ 465,356 |
Common equity Tier 1 capital to be well-capitalized under prompt corrective action, ratio | 0.065% | 0.065% |
Community Bank, N.A. | ||
Tier 1 Leverage ratio | ||
Tier 1 Leverage ratio, actual amount | $ 1,122,639 | $ 1,058,091 |
Tier 1 Leverage ratio, actual ratio | 0.0726 | 0.0726 |
Tier 1 leverage ratio for capital adequacy purposes, amount | $ 618,874 | $ 582,631 |
Tier 1 leverage ratio for capital adequacy purposes, ratio | 0.0400 | 0.0400 |
Tier 1 leverage capital to be well-capitalized under prompt corrective action, amount | $ 773,593 | $ 728,289 |
Tier 1 leverage capital to be well-capitalized under prompt corrective action, ratio | 0.0500 | 0.0500 |
Tier 1 risk-based capital | ||
Tier 1 risk-based capital, actual amount | $ 1,122,639 | $ 1,058,091 |
Tier 1 risk-based capital, actual ratio | 0.1286 | 0.1492 |
Tier 1 risk-based capital for capital adequacy purposes, amount | $ 523,733 | $ 425,393 |
Tier 1 risk-based capital for capital adequacy purposes, ratio | 0.0600 | 0.0600 |
Tier 1 risk-based capital for capital adequacy purposes plus capital conservation buffer, amount | $ 741,955 | $ 602,640 |
Tier 1 risk-based capital for capital adequacy purposes plus capital conservation buffer, ratio | 8.50% | 8.50% |
Tier 1 risk based capital to be well-capitalized under prompt corrective action, amount | $ 698,311 | $ 567,190 |
Tier 1 risk-based capital to be well-capitalized under prompt corrective action, ratio | 0.0800 | 0.0800 |
Total risk-based capital | ||
Total risk-based capital, actual amount | $ 1,183,570 | $ 1,107,181 |
Total risk-based capital, actual ratio | 0.1356 | 0.1562 |
Total risk-based capital for capital adequacy purposes, amoun | $ 698,311 | $ 567,190 |
Total risk-based capita for capital adequacy purposes, ratio | 0.0800 | 0.0800 |
Total risk-based capital for capital adequacy purposes plus capital conservation buffer, amount | $ 916,533 | $ 744,437 |
Total risk-based capita for capital adequacy purposes plus capital conservation buffer, ratio | 10.50% | 10.50% |
Total risk based capital to be well-capitalized under prompt corrective action, amount | $ 872,889 | $ 708,988 |
Total risk based capital to be well-capitalized under prompt corrective action, ratio | 0.1000 | 0.1000 |
Common equity Tier 1 capital | ||
Common equity Tier 1 capital, actual amount | $ 1,122,480 | $ 1,057,982 |
Common equity Tier 1 capital, actual ratio | 0.1286 | 0.1492 |
Common equity Tier 1 capital for capital adequacy purposes, amount | $ 392,800 | $ 319,045 |
Common equity Tier 1 capital for capital adequacy purposes, ratio | 0.045% | 0.045% |
Common equity Tier 1 capital for capital adequacy purposes plus capital conservation buffer, amount | $ 611,022 | $ 496,292 |
Common equity Tier 1 capital for capital adequacy purposes plus capital conservation buffer, ratio | 7% | 7% |
Common equity Tier 1 capital to be well-capitalized under prompt corrective action, amount | $ 567,378 | $ 460,842 |
Common equity Tier 1 capital to be well-capitalized under prompt corrective action, ratio | 0.065% | 0.065% |
PARENT COMPANY STATEMENTS - Con
PARENT COMPANY STATEMENTS - Condensed Statements of Condition (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Assets: | ||||
Cash and cash equivalents | $ 209,896 | $ 1,875,064 | ||
Investment in and advances to: | ||||
Other assets | 446,304 | 313,854 | ||
Total assets | 15,835,651 | 15,552,657 | $ 13,931,094 | |
Liabilities and shareholders' equity: | ||||
Accrued interest and other liabilities | 133,863 | 210,797 | ||
Shareholders' equity | 1,551,705 | 2,100,807 | $ 2,104,107 | $ 1,855,234 |
Total liabilities and shareholders' equity | 15,835,651 | 15,552,657 | ||
Parent company | ||||
Assets: | ||||
Cash and cash equivalents | 160,045 | 154,374 | ||
Investment securities | 7,881 | 8,679 | ||
Investment in and advances to: | ||||
Bank subsidiary | 1,194,314 | 1,721,520 | ||
Non-bank subsidiaries | 207,172 | 232,096 | ||
Other assets | 17,106 | 18,462 | ||
Total assets | 1,586,518 | 2,135,131 | ||
Liabilities and shareholders' equity: | ||||
Accrued interest and other liabilities | 31,564 | 31,047 | ||
Borrowings | 3,249 | 3,277 | ||
Shareholders' equity | 1,551,705 | 2,100,807 | ||
Total liabilities and shareholders' equity | $ 1,586,518 | $ 2,135,131 |
PARENT COMPANY STATEMENTS - C_2
PARENT COMPANY STATEMENTS - Condensed Statements of Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Expenses: | |||
Interest on borrowings | $ 0 | $ 293 | $ 1,875 |
Acquisition expenses | 5,021 | 701 | 4,933 |
Gain on debt extinguishment | 0 | 0 | (421) |
Other expenses | 23,369 | 18,500 | 18,415 |
Income before tax benefit and equity in undistributed net income of subsidiaries | 240,314 | 241,348 | 206,076 |
Income tax benefit | (52,233) | (51,654) | (41,400) |
Net income | 188,081 | 189,694 | 164,676 |
Other comprehensive (loss) income, net of tax: | |||
Changes in other comprehensive (loss) income related to pension and other post retirement obligations | (15,831) | 13,403 | 6,009 |
Changes in other comprehensive (loss) income related to unrealized (losses) gains on investment securities | (619,981) | (126,107) | 66,294 |
Other comprehensive (loss) income | (635,812) | (112,704) | 72,303 |
Comprehensive (loss) income | (447,731) | 76,990 | 236,979 |
Parent company | |||
Dividends from subsidiaries: | |||
Bank subsidiary | 53,000 | 125,000 | 105,000 |
Non-bank subsidiaries | 55,000 | 14,000 | 13,500 |
Interest and dividends on investments | 342 | 245 | 168 |
Total revenues | 108,342 | 139,245 | 118,668 |
Expenses: | |||
Interest on borrowings | 153 | 446 | 2,546 |
Acquisition expenses | 0 | 0 | 450 |
Gain on debt extinguishment | 0 | 0 | (421) |
Other expenses | 6,091 | 5,717 | 4,945 |
Total expenses | 6,244 | 6,163 | 7,520 |
Income before tax benefit and equity in undistributed net income of subsidiaries | 102,098 | 133,082 | 111,148 |
Income tax benefit | 2,942 | 3,964 | 3,739 |
Income before equity in undistributed net income of subsidiaries | 105,040 | 137,046 | 114,887 |
Equity in undistributed net income of subsidiaries | 83,041 | 52,648 | 49,789 |
Net income | 188,081 | 189,694 | 164,676 |
Other comprehensive (loss) income, net of tax: | |||
Changes in other comprehensive (loss) income related to pension and other post retirement obligations | (15,831) | 13,403 | 6,009 |
Changes in other comprehensive (loss) income related to unrealized (losses) gains on investment securities | (619,981) | (126,107) | 66,294 |
Other comprehensive (loss) income | (635,812) | (112,704) | 72,303 |
Comprehensive (loss) income | $ (447,731) | $ 76,990 | $ 236,979 |
PARENT COMPANY STATEMENTS - C_3
PARENT COMPANY STATEMENTS - Condensed Statements of Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating activities: | |||
Net income | $ 188,081 | $ 189,694 | $ 164,676 |
Adjustments to reconcile net income to net cash provided by operating activities | |||
Net change in other assets and other liabilities | (6,231) | 2,064 | (16,939) |
Net cash provided by operating activities | 214,600 | 202,546 | 179,483 |
Investing activities: | |||
Cash paid for acquisitions, net of cash acquired of $0, $0, and $448, respectively | (668) | (29,329) | 34,360 |
Net cash used in investing activities | (2,138,985) | (1,530,775) | (398,720) |
Financing activities: | |||
Issuance of common stock | 1,184 | 9,821 | 15,792 |
Purchase of treasury stock | (16,614) | (5,106) | (271) |
Sale of treasury stock | 0 | 0 | 85 |
Increase in deferred compensation agreements | 236 | 252 | 271 |
Net cash provided by financing activities | 259,217 | 1,557,488 | 1,660,012 |
Change in cash and cash equivalents | (1,665,168) | 229,259 | 1,440,775 |
Cash and cash equivalents at beginning of year | 1,875,064 | 1,645,805 | 205,030 |
Cash and cash equivalents at end of year | 209,896 | 1,875,064 | 1,645,805 |
Supplemental disclosures of cash flow information: | |||
Cash paid for interest | 23,402 | 13,752 | 21,169 |
Supplemental disclosures of noncash financing activities: | |||
Dividends declared and unpaid | 23,762 | 23,235 | 22,695 |
Common stock issued for acquisition | 0 | 0 | 76,942 |
Parent company | |||
Operating activities: | |||
Net income | 188,081 | 189,694 | 164,676 |
Adjustments to reconcile net income to net cash provided by operating activities | |||
Equity in undistributed net income of subsidiaries | (83,041) | (52,648) | (49,789) |
Net change in other assets and other liabilities | 2,155 | (3,050) | 1,740 |
Net cash provided by operating activities | 107,195 | 133,996 | 116,627 |
Investing activities: | |||
Purchases of investment securities | (175) | (5,173) | (3,000) |
Cash paid for acquisitions, net of cash acquired of $0, $0, and $448, respectively | 0 | 0 | (20,892) |
(Capital contributions to)/Return of capital from | 0 | (12,918) | 2 |
Net cash used in investing activities | (175) | (18,091) | (23,890) |
Financing activities: | |||
Repayment of advances from subsidiaries | (506) | (482) | (482) |
Repayment of borrowings | 0 | (77,320) | (12,062) |
Issuance of common stock | 8,922 | 16,155 | 22,211 |
Purchase of treasury stock | (16,614) | (5,106) | (271) |
Sale of treasury stock | 0 | 0 | 85 |
Increase in deferred compensation agreements | 236 | 252 | 271 |
Cash dividends paid | (93,387) | (91,051) | (87,131) |
Net cash provided by financing activities | (101,349) | (157,552) | (77,379) |
Change in cash and cash equivalents | 5,671 | (41,647) | 15,358 |
Cash and cash equivalents at beginning of year | 154,374 | 196,021 | 180,663 |
Cash and cash equivalents at end of year | 160,045 | 154,374 | 196,021 |
Supplemental disclosures of cash flow information: | |||
Cash paid for interest | 180 | 560 | 2,555 |
Supplemental disclosures of noncash financing activities: | |||
Dividends declared and unpaid | 23,763 | 23,235 | 22,695 |
Advances from subsidiaries | 506 | 482 | 932 |
Common stock issued for acquisition | $ 0 | $ 0 | $ 76,942 |
PARENT COMPANY STATEMENTS - C_4
PARENT COMPANY STATEMENTS - Condensed Statements of Cash Flows (Parenthetical) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statements of Cash Flows | |||
Cash paid for acquisitions | $ 84,988 | $ 541 | $ 55,973 |
Parent company | |||
Statements of Cash Flows | |||
Cash paid for acquisitions | $ 0 | $ 0 | $ 448 |
FAIR VALUE - Financial assets a
FAIR VALUE - Financial assets and liabilities accounted for at fair value on a recurring basis (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Available-for-sale investment securities | ||
Available-for-sale investment securities | $ 4,151,851 | $ 4,934,210 |
Equity securities | 419 | 463 |
U.S. Treasury and agency securities | ||
Available-for-sale investment securities | ||
Available-for-sale investment securities | 3,243,537 | 3,998,564 |
Obligations of state and political subdivisions | ||
Available-for-sale investment securities | ||
Available-for-sale investment securities | 504,297 | 430,289 |
Government agency mortgage-backed securities | ||
Available-for-sale investment securities | ||
Available-for-sale investment securities | 384,633 | 477,056 |
Corporate debt securities | ||
Available-for-sale investment securities | ||
Available-for-sale investment securities | 7,114 | 7,962 |
Government agency collateralized mortgage obligations | ||
Available-for-sale investment securities | ||
Available-for-sale investment securities | 12,270 | 20,339 |
Level 3 | Commitments to originate real estate loans for sale | ||
Available-for-sale investment securities | ||
Derivative asset | 5 | 51 |
Recurring | ||
Available-for-sale investment securities | ||
Available-for-sale investment securities | 4,151,851 | 4,934,210 |
Equity securities | 419 | 463 |
Total | 4,152,280 | 4,935,049 |
Recurring | Interest rate swap agreements | ||
Available-for-sale investment securities | ||
Derivative asset | 1 | 296 |
Derivative liability | (1) | (3) |
Recurring | Forward sales commitments | ||
Available-for-sale investment securities | ||
Derivative asset | 32 | |
Derivative liability | 5 | |
Recurring | Commitments to originate real estate loans for sale | ||
Available-for-sale investment securities | ||
Derivative asset | 5 | 51 |
Recurring | U.S. Treasury and agency securities | ||
Available-for-sale investment securities | ||
Available-for-sale investment securities | 3,243,537 | 3,998,564 |
Recurring | Obligations of state and political subdivisions | ||
Available-for-sale investment securities | ||
Available-for-sale investment securities | 504,297 | 430,289 |
Recurring | Government agency mortgage-backed securities | ||
Available-for-sale investment securities | ||
Available-for-sale investment securities | 384,633 | 477,056 |
Recurring | Corporate debt securities | ||
Available-for-sale investment securities | ||
Available-for-sale investment securities | 7,114 | 7,962 |
Recurring | Government agency collateralized mortgage obligations | ||
Available-for-sale investment securities | ||
Available-for-sale investment securities | 12,270 | 20,339 |
Recurring | Level 1 | ||
Available-for-sale investment securities | ||
Available-for-sale investment securities | 3,178,189 | 3,900,924 |
Equity securities | 419 | 463 |
Total | 3,178,608 | 3,901,387 |
Recurring | Level 1 | Interest rate swap agreements | ||
Available-for-sale investment securities | ||
Derivative asset | 0 | 0 |
Derivative liability | 0 | 0 |
Recurring | Level 1 | Forward sales commitments | ||
Available-for-sale investment securities | ||
Derivative asset | 0 | |
Derivative liability | 0 | |
Recurring | Level 1 | Commitments to originate real estate loans for sale | ||
Available-for-sale investment securities | ||
Derivative asset | 0 | 0 |
Recurring | Level 1 | U.S. Treasury and agency securities | ||
Available-for-sale investment securities | ||
Available-for-sale investment securities | 3,178,189 | 3,900,924 |
Recurring | Level 1 | Obligations of state and political subdivisions | ||
Available-for-sale investment securities | ||
Available-for-sale investment securities | 0 | 0 |
Recurring | Level 1 | Government agency mortgage-backed securities | ||
Available-for-sale investment securities | ||
Available-for-sale investment securities | 0 | 0 |
Recurring | Level 1 | Corporate debt securities | ||
Available-for-sale investment securities | ||
Available-for-sale investment securities | 0 | 0 |
Recurring | Level 1 | Government agency collateralized mortgage obligations | ||
Available-for-sale investment securities | ||
Available-for-sale investment securities | 0 | 0 |
Recurring | Level 2 | ||
Available-for-sale investment securities | ||
Available-for-sale investment securities | 973,662 | 1,033,286 |
Equity securities | 0 | 0 |
Total | 973,667 | 1,033,611 |
Recurring | Level 2 | Interest rate swap agreements | ||
Available-for-sale investment securities | ||
Derivative asset | 1 | 296 |
Derivative liability | (1) | (3) |
Recurring | Level 2 | Forward sales commitments | ||
Available-for-sale investment securities | ||
Derivative asset | 32 | |
Derivative liability | 5 | |
Recurring | Level 2 | Commitments to originate real estate loans for sale | ||
Available-for-sale investment securities | ||
Derivative asset | 0 | 0 |
Recurring | Level 2 | U.S. Treasury and agency securities | ||
Available-for-sale investment securities | ||
Available-for-sale investment securities | 65,348 | 97,640 |
Recurring | Level 2 | Obligations of state and political subdivisions | ||
Available-for-sale investment securities | ||
Available-for-sale investment securities | 504,297 | 430,289 |
Recurring | Level 2 | Government agency mortgage-backed securities | ||
Available-for-sale investment securities | ||
Available-for-sale investment securities | 384,633 | 477,056 |
Recurring | Level 2 | Corporate debt securities | ||
Available-for-sale investment securities | ||
Available-for-sale investment securities | 7,114 | 7,962 |
Recurring | Level 2 | Government agency collateralized mortgage obligations | ||
Available-for-sale investment securities | ||
Available-for-sale investment securities | 12,270 | 20,339 |
Recurring | Level 3 | ||
Available-for-sale investment securities | ||
Available-for-sale investment securities | 0 | 0 |
Equity securities | 0 | 0 |
Total | 5 | 51 |
Recurring | Level 3 | Interest rate swap agreements | ||
Available-for-sale investment securities | ||
Derivative asset | 0 | 0 |
Derivative liability | 0 | 0 |
Recurring | Level 3 | Forward sales commitments | ||
Available-for-sale investment securities | ||
Derivative asset | 0 | |
Derivative liability | 0 | |
Recurring | Level 3 | Commitments to originate real estate loans for sale | ||
Available-for-sale investment securities | ||
Derivative asset | 5 | 51 |
Recurring | Level 3 | U.S. Treasury and agency securities | ||
Available-for-sale investment securities | ||
Available-for-sale investment securities | 0 | 0 |
Recurring | Level 3 | Obligations of state and political subdivisions | ||
Available-for-sale investment securities | ||
Available-for-sale investment securities | 0 | 0 |
Recurring | Level 3 | Government agency mortgage-backed securities | ||
Available-for-sale investment securities | ||
Available-for-sale investment securities | 0 | 0 |
Recurring | Level 3 | Corporate debt securities | ||
Available-for-sale investment securities | ||
Available-for-sale investment securities | 0 | 0 |
Recurring | Level 3 | Government agency collateralized mortgage obligations | ||
Available-for-sale investment securities | ||
Available-for-sale investment securities | $ 0 | $ 0 |
FAIR VALUE - Assets and liabili
FAIR VALUE - Assets and liabilities measured on a non-recurring basis (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Assets and liabilities measured on non-recurring basis | ||
Mortgage servicing rights | $ 5,107,000 | $ 1,469,000 |
Valuation allowance | 0 | 566,000 |
Fair value, assets, levels transfers | 0 | |
Mortgage servicing rights | ||
Assets and liabilities measured on non-recurring basis | ||
Valuation allowance | 700,000 | |
Level 3 | ||
Assets and liabilities measured on non-recurring basis | ||
Individually assessed loans | 1,820,000 | |
Other real estate owned | 503,000 | 718,000 |
Mortgage servicing rights | 1,169,000 | |
Contingent consideration | $ (2,800,000) | 3,100,000 |
Level 3 | Other real estate owned | Market approach valuation technique | Minimum | ||
Assets and liabilities measured on non-recurring basis | ||
Discount rate | 9% | |
Level 3 | Other real estate owned | Market approach valuation technique | Maximum | ||
Assets and liabilities measured on non-recurring basis | ||
Discount rate | 72.80% | |
Non-recurring | ||
Assets and liabilities measured on non-recurring basis | ||
Individually assessed loans | $ 0 | 1,820,000 |
Other real estate owned | 503,000 | 718,000 |
Mortgage servicing rights | 1,169,000 | 810,000 |
Contingent consideration | (2,800,000) | (3,100,000) |
Total | (1,128,000) | 248,000 |
Non-recurring | Level 1 | ||
Assets and liabilities measured on non-recurring basis | ||
Individually assessed loans | 0 | 0 |
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 non-recurring basis | ||
Individually assessed loans | 0 | 0 |
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 non-recurring basis | ||
Individually assessed loans | 0 | 1,820,000 |
Other real estate owned | 503,000 | 718,000 |
Mortgage servicing rights | 1,169,000 | 810,000 |
Contingent consideration | (2,800,000) | (3,100,000) |
Total | $ (1,128,000) | $ 248,000 |
FAIR VALUE - Significant unobse
FAIR VALUE - Significant unobservable inputs (Details) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) |
Significant unobservable inputs used in determination of fair value of assets classified as Level 3 | ||
Mortgage servicing rights | $ 5,107,000 | $ 1,469,000 |
Level 3 | ||
Significant unobservable inputs used in determination of fair value of assets classified as Level 3 | ||
Individually assessed loans | 1,820,000 | |
Other real estate owned | 503,000 | $ 718,000 |
Other real estate owned, measurement input [Extensible List] | Estimated cost of disposal/market adjustment | |
Mortgage servicing rights | 1,169,000 | |
Mortgage servicing rights, measurement input | 810,000 | |
Contingent consideration | $ (2,800,000) | $ 3,100,000 |
Level 3 | Fair value of collateral | ||
Significant unobservable inputs used in determination of fair value of assets classified as Level 3 | ||
Individually assessed loans, Valuation Technique [Extensible List] | Fair value of collateral | |
Other real estate owned, valuation technique [Extensible List] | Fair value of collateral | Fair value of collateral |
Level 3 | 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 | ||
Individually assessed loans, Measurement Input [Extensible List] | Estimated cost of disposal/market adjustment | |
Other real estate owned, measurement input [Extensible List] | Estimated cost of disposal/market adjustment | |
Level 3 | Discounted Cash Flow | ||
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 |
Contingent consideration, Valuation Technique [Extensible List] | Discounted Cash Flow | |
Level 3 | 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 [Extensible List] | Weighted average constant prepayment rate | Weighted average constant prepayment rate |
Level 3 | 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, Measurement Input [Extensible List] | Weighted average discount rate | Weighted average discount rate |
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 [Extensible List] | Adequate compensation | Adequate compensation |
Level 3 | 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 |
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 | ||
Individually assessed loans, measurement input | 9 | |
Other real estate owned, measurement input | 9 | 31.8 |
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 | 2.9 | 6.4 |
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 | 4.6 | 2.3 |
Contingent consideration, measurement input | 5.9 | 1.4 |
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 | $ 3,100,000 | $ 3,000,000 |
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 | ||
Individually assessed loans, measurement input | 43.1 | |
Other real estate owned, measurement input | 72.8 | 42.3 |
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 | 3.3 | 15.2 |
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 | 4.9 | 2.7 |
Contingent consideration, measurement input | 6.2 | 1.7 |
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 | $ 5,100,000 | $ 5,800,000 |
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 | ||
Individually assessed loans, measurement input | (43.1) | |
Other real estate owned, measurement input | (35.7) | (33.3) |
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 | (2.9) | (14) |
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 | (4.9) | (2.6) |
Contingent consideration, measurement input | (6.1) | 1.5 |
Commitments to originate real estate loans for sale | Level 3 | ||
Significant unobservable inputs used in determination of fair value of assets classified as Level 3 | ||
Commitments to originate real estate loans for sale | $ 5,000 | $ 51,000 |
Commitments to originate real estate loans for sale | Level 3 | 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 | 1 | 1 |
Commitments to originate real estate loans for sale | Level 3 | Discounted Cash Flow | ||
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 | 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 [Extensible List] | Embedded servicing value | Embedded servicing value |
Business loans held for sale | Level 3 | Adequate compensation | ||
Significant unobservable inputs used in determination of fair value of assets classified as Level 3 | ||
Business loans held for sale, measurement input | 7 | 7 |
FAIR VALUE - Carrying amounts a
FAIR VALUE - Carrying amounts and estimated fair values of other financial instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Financial assets: | ||
Held-to-maturity securities | $ 1,034,795 | $ 0 |
Financial liabilities: | ||
Overnight borrowings | 768,400 | 0 |
Carrying Value | ||
Financial assets: | ||
Net loans | 8,748,335 | 7,323,770 |
Held-to-maturity securities | 1,079,695 | 0 |
Financial liabilities: | ||
Deposits | 13,012,308 | 12,911,168 |
Overnight borrowings | 768,400 | 0 |
Securities sold under agreement to repurchase, short-term | 346,652 | 324,720 |
Other Federal Home Loan Bank borrowings | 19,474 | 1,888 |
Subordinated notes payable | 3,249 | 3,277 |
Fair Value | ||
Financial assets: | ||
Net loans | 8,696,185 | 7,523,024 |
Held-to-maturity securities | 1,034,795 | 0 |
Financial liabilities: | ||
Deposits | 12,981,487 | 12,911,197 |
Overnight borrowings | 768,400 | 0 |
Securities sold under agreement to repurchase, short-term | 346,652 | 324,720 |
Other Federal Home Loan Bank borrowings | 19,377 | 1,907 |
Subordinated notes payable | $ 3,249 | $ 3,277 |
VARIABLE INTEREST ENTITIES (Det
VARIABLE INTEREST ENTITIES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
VARIABLE INTEREST ENTITIES | |||
Cash and cash equivalents | $ 209,896 | $ 1,875,064 | |
Premises and equipment, net | 160,778 | 160,651 | |
Other assets | 446,304 | 313,854 | |
Total assets | 15,835,651 | 15,552,657 | $ 13,931,094 |
Accrued interest and other liabilities / Total liabilities | $ 133,863 | 210,797 | |
Variable Interest Entities | 706 North Clinton | |||
VARIABLE INTEREST ENTITIES | |||
Percentage of membership interest | 50% | ||
Cash and cash equivalents | $ 226 | 198 | |
Premises and equipment, net | 5,455 | 5,618 | |
Other assets | 65 | 57 | |
Total assets | 5,746 | 5,873 | |
Accrued interest and other liabilities / Total liabilities | 0 | $ 0 | |
Minority interest | 2,900 | ||
Loss of minority interest | 4,000 | ||
Minority interest loss exposure related to financing agreement | $ 1,100 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Reportable segments and reconciliation of the information to the consolidated financial statements | |||
Net interest income | $ 420,630 | $ 374,412 | $ 368,403 |
Provision for credit losses | 14,773 | (8,839) | 14,212 |
Noninterest revenue | 258,725 | 246,235 | 228,419 |
Amortization of intangible assets | 15,214 | 14,051 | 14,297 |
Acquisition expenses | 5,021 | 701 | 4,933 |
Acquisition-related contingent consideration adjustment | (300) | 200 | 0 |
Other operating expenses | 404,333 | 373,186 | 357,304 |
Income before income taxes | 240,314 | 241,348 | 206,076 |
Assets | 15,835,651 | 15,552,657 | 13,931,094 |
Goodwill | 841,841 | 799,109 | 793,708 |
Core deposit intangibles & Other intangibles | 60,996 | 65,226 | 52,940 |
Eliminations | |||
Reportable segments and reconciliation of the information to the consolidated financial statements | |||
Net interest income | 0 | 0 | 0 |
Provision for credit losses | 0 | 0 | 0 |
Noninterest revenue | (7,837) | (7,130) | (6,214) |
Amortization of intangible assets | 0 | 0 | 0 |
Acquisition expenses | 0 | 0 | 0 |
Acquisition-related contingent consideration adjustment | 0 | 0 | |
Other operating expenses | (7,837) | (7,130) | (6,214) |
Income before income taxes | 0 | 0 | 0 |
Assets | (104,293) | (128,345) | (131,860) |
Goodwill | 0 | 0 | 0 |
Core deposit intangibles & Other intangibles | 0 | 0 | 0 |
Banking | Operating Segments | |||
Reportable segments and reconciliation of the information to the consolidated financial statements | |||
Net interest income | 420,273 | 374,078 | 367,237 |
Provision for credit losses | 14,773 | (8,839) | 14,212 |
Noninterest revenue | 75,480 | 67,910 | 69,578 |
Amortization of intangible assets | 4,753 | 4,744 | 5,515 |
Acquisition expenses | 5,018 | 638 | 4,933 |
Acquisition-related contingent consideration adjustment | 0 | 0 | |
Other operating expenses | 283,942 | 265,525 | 255,955 |
Income before income taxes | 187,267 | 179,920 | 156,200 |
Assets | 15,616,885 | 15,325,732 | 13,762,325 |
Goodwill | 732,088 | 689,868 | 690,121 |
Core deposit intangibles & Other intangibles | 12,304 | 9,087 | 13,831 |
Employee Benefit Services | Operating Segments | |||
Reportable segments and reconciliation of the information to the consolidated financial statements | |||
Net interest income | 319 | 293 | 943 |
Provision for credit losses | 0 | 0 | 0 |
Noninterest revenue | 117,956 | 116,621 | 103,456 |
Amortization of intangible assets | 6,607 | 6,033 | 5,724 |
Acquisition expenses | 3 | 36 | 0 |
Acquisition-related contingent consideration adjustment | (500) | 200 | |
Other operating expenses | 71,466 | 64,423 | 60,709 |
Income before income taxes | 40,699 | 46,222 | 37,966 |
Assets | 226,135 | 257,879 | 217,780 |
Goodwill | 85,384 | 85,321 | 83,275 |
Core deposit intangibles & Other intangibles | 33,411 | 40,018 | 32,051 |
All Other | Operating Segments | |||
Reportable segments and reconciliation of the information to the consolidated financial statements | |||
Net interest income | 38 | 41 | 223 |
Provision for credit losses | 0 | 0 | 0 |
Noninterest revenue | 73,126 | 68,834 | 61,599 |
Amortization of intangible assets | 3,854 | 3,274 | 3,058 |
Acquisition expenses | 0 | 27 | 0 |
Acquisition-related contingent consideration adjustment | 200 | 0 | |
Other operating expenses | 56,762 | 50,368 | 46,854 |
Income before income taxes | 12,348 | 15,206 | 11,910 |
Assets | 96,924 | 97,391 | 82,849 |
Goodwill | 24,369 | 23,920 | 20,312 |
Core deposit intangibles & Other intangibles | $ 15,281 | $ 16,121 | $ 7,058 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
SUBSEQUENT EVENTS | |||
Available-for-sale investment securities, cost | $ 4,675,474 | $ 4,980,102 | |
Subsequent event | |||
SUBSEQUENT EVENTS | |||
Available-for-sale investment securities, cost | $ 786,100 | ||
After-tax realized loss | 52,300 | ||
Proceeds from sales of available-for-sale investment securities | $ 733,800 |