What changed in this filing

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Item 1. Financial Statements

2022-08-09 compared with 2022-05-10 · 258 added, 145 removed, 776 unchanged (34% of the section changed)

9 unchanged sentences

Other intangibles, net

Intangible assets, net

Goodwill and intangible assets, net

Premises and equipment, net

3 unchanged sentences

Total deposits

Overnight Federal Reserve Bank borrowings

Securities sold under agreement to repurchase, short-term

11 unchanged sentences

Accumulated other comprehensive loss

Treasury stock, at cost ( 250,275 shares, including 132,759 shares held by deferred compensation arrangements at March 31, 2022 and 214,374 shares including 146,860 shares held by deferred compensation arrangements at December 31, 2021)

Treasury stock, at cost ( 451,090 shares, including 133,575 shares held by deferred compensation arrangements at June 30, 2022 and 214,374 shares including 146,860 shares held by deferred compensation arrangements at December 31, 2021, respectively)

Deferred compensation arrangements ( 133,575 and 146,860 shares, respectively)

6 unchanged sentences

Three Months Ended

Six Months Ended

Interest income:

19 unchanged sentences

Wealth management services

Unrealized gain on equity securities

Unrealized (loss) gain on equity securities

Total noninterest revenues

7 unchanged sentences

Acquisition expenses

Acquisition-related contingent consideration adjustment

Other expenses

5 unchanged sentences

COMMUNITY BANK SYSTEM, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)

(In Thousands)

Three Months Ended

Six Months Ended

Pension and other post retirement obligations:

4 unchanged sentences

Other comprehensive income related to pension and other post-retirement obligations, net of taxes

Unrealized losses on available-for-sale securities:

Net unrealized losses arising during period, gross

Net unrealized losses arising during period, net

Other comprehensive loss related to unrealized losses on available-for-sale securities, net of taxes

Other comprehensive loss, net of tax

Comprehensive loss

Unrealized (losses) gains on available-for-sale securities:

Net unrealized (losses) gains arising during period, gross

Other comprehensive (loss) income related to unrealized (losses) gains on available-for-sale securities, net of taxes

Other comprehensive (loss) income, net of tax

Comprehensive (loss) income

Accumulated Other Comprehensive Loss By Component:

7 unchanged sentences

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)

Three months ended March 31, 2022 and 2021

Three months ended June 30, 2022 and 2021

(In Thousands, Except Share Data)

Comprehensive

Balance at March 31, 2022

Other comprehensive loss, net of tax

Dividends declared:

Common, $ 0.43 per share

Common stock activity under employee stock plans

Stock-based compensation

Distribution of stock under deferred compensation arrangements

Treasury stock purchased

Treasury stock issued to benefit plans, net

Balance at June 30, 2022

Balance at March 31, 2021

Other comprehensive income, net of tax

Dividends declared:

Common, $ 0.42 per share

Common stock activity under employee stock plans

Stock-based compensation

Treasury stock issued to benefit plans, net

Balance at June 30, 2021

See accompanying notes to consolidated financial statements (unaudited).

COMMUNITY BANK SYSTEM, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited)

Six months ended June 30, 2022 and 2021

(In Thousands, Except Share Data)

Comprehensive

(Loss) Income

8 unchanged sentences

Treasury stock issued to benefit plans, net

Balance at March 31, 2022

Balance at June 30, 2022

Balance at December 31, 2020

6 unchanged sentences

Treasury stock issued to benefit plans, net

Balance at March 31, 2021

Balance at June 30, 2021

See accompanying notes to consolidated financial statements (unaudited).

2 unchanged sentences

(In Thousands)

Three Months Ended

Six Months Ended

Operating activities:

5 unchanged sentences

Amortization of mortgage servicing rights

Unrealized gain on equity securities

Unrealized loss (gain) on equity securities

Income from bank-owned life insurance policies

9 unchanged sentences

Net (increase) decrease in loans

Cash paid for acquisitions, net of cash acquired of $ 0 , and $ 0 , respectively

Cash received (paid) for acquisitions, net of cash acquired of $ 84,988 and $ 0 , respectively

Purchases of premises and equipment, net

3 unchanged sentences

Financing activities:

Net increase in deposits

Net decrease in borrowings

Net (decrease) increase in deposits

Net increase in overnight Federal Reserve Bank borrowings

Net decrease in securities sold under agreement to repurchase, short-term

Payments on other Federal Home Loan Bank borrowings

Payments on subordinated debt held by unconsolidated subsidiary trusts

4 unchanged sentences

Withholding taxes paid on share-based compensation

Net cash provided by financing activities

Net cash (used in) provided by financing activities

Change in cash and cash equivalents

( 1,677,436 )

Cash and cash equivalents at beginning of period

6 unchanged sentences

Transfers from loans to other real estate

Acquisitions:

Fair value of assets acquired, excluding acquired cash and intangibles

Fair value of liabilities assumed

See accompanying notes to consolidated financial statements (unaudited).

1 unchanged sentence

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

MARCH 31, 2022

JUNE 30, 2022

BASIS OF PRESENTATION

The interim financial data as of and for the three months ended March 31, 2022 is unaudited;

The interim financial data as of and for the three and six months ended June 30, 2022 is unaudited;

however, in the opinion of Community Bank System, Inc.

2 unchanged sentences

The Company’s unaudited interim consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited annual consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission (“SEC”) on March 1, 2022.

Pending Acquisition

On October 4, 2021, the Company announced that Community Bank, N.A.

(the “Bank”) had entered into an agreement to acquire Elmira Savings Bank (“Elmira”), a twelve branch banking franchise headquartered in Elmira, New York, for $ 82.8 million in cash.

The acquisition will enhance the Company’s presence in five counties in New York’s Southern Tier and Finger Lakes regions.

The merger was approved by the shareholders of Elmira on December 14, 2021.

Regulatory approval has been received and the Company expects to complete the acquisition in the second quarter of 2022, subject to customary closing conditions.

The Company expects to incur certain one-time, transaction-related costs in connection with the Elmira acquisition.

Current and Prior Period Acquisitions

On May 13, 2022, the Company completed the 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 $ 576.4 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.

Preliminary goodwill of $ 50.7 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 $ 2.4 million and direct expenses of approximately $ 0.6 million from the Elmira branch network were included in the consolidated statements of income for the three and six months ended June 30, 2022.

The Company expects to incur additional certain one-time, transaction-related costs in 2022 in connection with the Elmira acquisition.

On January 1, 2022, the Company, through its subsidiary OneGroup NY, Inc.

2 unchanged sentences

The effects of the acquired assets have been included in the consolidated financial statements since that date.

Revenues of approximately $ 0.3 million and direct expenses of approximately $ 0.1 million were included in the consolidated income statement for the three months ended March 31, 2022.

Revenues of approximately $ 0.3 million and $ 0.6 million and direct expenses of approximately $ 0.1 million and $ 0.2 million were included in the consolidated statements of income for the three and six months ended June 30, 2022, respectively.

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.

2 unchanged sentences

The effects of the acquired assets and liabilities have been included in the consolidated financial statements since that date.

Revenues of approximately $ 1.5 million and direct expenses of approximately $ 0.4 million from TGA were included in the consolidated income statement for the three months ended March 31, 2022.

Revenues of approximately $ 0.5 million and $ 2.0 million and direct expenses of approximately $ 0.4 million and $ 0.7 million from TGA were included in the consolidated income statements for the three and six months ended June 30, 2022, 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 period.

Amounts are payable in two payments, the first of which is two years after the acquisition date, and the second three years after the acquisition date.

Amounts are payable in two payments, the first of which is two years after the acquisition date, and the second is three years after the acquisition date.

The range of the undiscounted amounts the Company could pay under the contingent consideration agreement is between zero and $ 3.4 million.

The fair value of the contingent consideration recognized on the acquisition date of $ 1.5 million was estimated by applying the income approach, a measure that is based on significant Level 3 inputs not readily observable in the market.

Key assumptions at the date of acquisition include (1) a discount rate range of 0.82 % to 1.09 %, and (2) probability adjusted level of retained revenue between $ 2.3 million and $ 3.8 million.

The contingent consideration related to the TGA acquisition was revalued at December 31, 2021.

Key assumptions at the date of acquisition include (1) a discount rate range of 0.82 % to 1.09 % applied to present value the payments, and (2) probability adjusted level of retained revenue between $ 2.3 million and $ 3.8 million.

The contingent consideration related to the TGA acquisition was revalued at June 30, 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 1.38 % to 1.65 %, and (2) probability adjusted level of retained revenue between $3.0 million and $ 3.4 million.

Based on the results of the revaluation, no adjustments were made to the fair value of the contingent consideration related to the TGA acquisition at December 31, 2021 or March 31, 2022.

Key assumptions include (1) a discount rate range of 4.44 % to 4.55 % applied to present value the payments, and (2) probability adjusted level of retained revenue between $ 3.3 million and $ 3.7 million.

Based on the results of the revaluation, the Company recorded a $ 0.5 million acquisition-related contingent consideration adjustment as of June 30, 2022 in the consolidated statements of income related to the TGA acquisition, for an adjusted fair value of $ 2.0 million at June 30, 2022.

On July 1, 2021, the Company, through its subsidiary Benefit Plans Administrative Services, Inc.

3 unchanged sentences

The effects of the acquired assets have been included in the consolidated financial statements since that date.

Revenues of approximately $ 1.4 million and direct expenses of approximately $ 1.1 million from FBD were included in the consolidated income statement for the three months ended March 31, 2022.

Revenues of approximately $ 1.0 million and $ 2.5 million and direct expenses of approximately $ 1.1 million and $ 2.2 million from FBD were included in the consolidated statements of income for the three and six months ended June 30, 2022, 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 period.

3 unchanged sentences

a measure that is based on significant Level 3 inputs not readily observable in the market.

Key assumptions at the date of acquisition include (1) a discount rate of 1.05 %, and (2) probability adjusted level of retained revenue between $ 5.6 million and $ 5.8 million.

The contingent consideration related to the FBD acquisition was revalued at December 31, 2021.

Key assumptions at the date of acquisition include (1) a discount rate of 1.05 % applied to present value the payment, and (2) probability adjusted level of retained revenue between $ 5.6 million and $ 5.8 million.

The contingent consideration related to the FBD acquisition was revalued at June 30, 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 1.50 %, and (2) probability adjusted level of retained revenue between $ 5.6 million and $ 5.8 million.

Based on the results of the revaluation, the Company recorded a $ 0.2 million acquisition-related contingent consideration adjustment in the consolidated statements of income related to the FBD acquisition, resulting in an adjusted fair value of $ 1.6 million at December 31, 2021.

No adjustment was made at March 31, 2022.

Key assumptions include (1) a discount rate of 4.51 % applied to present value the payment, and (2) probability adjusted level of retained revenue between $ 5.2 million and $ 5.4 million.

Based on the results of the revaluation, the Company recorded a reduction to the fair value by $ 0.1 million as of June 30, 2022 as an acquisition-related contingent consideration adjustment in the consolidated statements of income related to the FBD acquisition, for an adjusted fair value of $ 1.5 million at June 30, 2022.

On June 1, 2021, the Company, through its subsidiary OneGroup, completed its acquisition of certain assets and liabilities of NuVantage Insurance Corp.

2 unchanged sentences

The effects of the acquired assets and liabilities have been included in the consolidated financial statements since that date.

Revenues of approximately $ 0.3 million and direct expenses of approximately $ 0.3 million from NuVantage were included in the consolidated income statement for the three months ended March 31, 2022.

The assets and liabilities assumed in the acquisitions were recorded at their estimated fair values based on management’s best estimates using information available at the dates of the acquisitions, and were subject to adjustment based on updated information not available at the time of the acquisitions.

Through the first quarter of 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.

Revenues of approximately $ 0.3 million and $ 0.6 million and direct expenses of approximately $ 0.3 million and $ 0.6 million from NuVantage were included in the consolidated statements of income for the three and six months ended June 30, 2022.

The assets and liabilities assumed in the acquisitions were recorded at their estimated fair values based on management’s best estimates using information available at the dates of the acquisitions, and are subject to adjustment based on updated information not available at the time of the acquisitions.

Accrued income taxes, deferred taxes, certain fixed assets and other real estate owned associated with the Elmira acquisition were recorded on a provisional basis and could vary from the actual recorded balance once finalized.

During the first quarter of 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.

The acquisitions generally expanded the Company’s geographic 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.

6 unchanged sentences

Cash and cash equivalents

Investment securities

Loans, net of allowance for credit losses on PCD loans

Premises and equipment, net

Accrued interest and fees receivable

Core deposit intangibles

Other intangibles

Other liabilities

Other Federal Home Loan Bank borrowings

Total identifiable assets, net

(1) Includes amounts for all OneGroup acquisitions completed in 2022 .

The Company has acquired loans from Elmira for which there was evidence of a more-than-insignificant deterioration in credit quality since origination (purchased credit deteriorated (“PCD”) loans).

There were no investment securities acquired from Elmira for which there was evidence of a more-than-insignificant deterioration in credit quality since origination.

The carrying amount of those loans is as follows at the date of acquisition:

(000s omitted)

Par value of PCD loans at acquisition

Allowance for credit losses at acquisition

Non-credit discount at acquisition

Fair value of PCD loans at acquisition

The fair value of checking, savings and money market deposit accounts acquired were assumed to approximate the carrying value as these accounts have no stated maturity and are payable on demand.

Certificate of deposit accounts were valued at the present value of the certificates’ expected contractual payments discounted at market rates for similar certificates.

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 acquisition are being amortized using an accelerated method over an estimated useful life of eight years .

The other intangibles related to the NuVantage acquisition and the OneGroup asset acquisitions completed in 2022 are being amortized using an accelerated method over their estimated useful of life of eight years for NuVantage and two of the 2022 OneGroup asset acquisitions, and ten years for the third 2022 OneGroup asset acquisition.

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 All Other segment for the NuVantage and TGA acquisitions, and the Employee Benefit Services segment for the FBD acquisition.

Goodwill arising from the FBD acquisition is not deductible for tax purposes.

Goodwill, which is not amortized for book purposes, was assigned to the Banking segment for the Elmira acquisition, the All Other segment for the NuVantage and TGA acquisitions, and the Employee Benefit Services segment for the FBD acquisition.

Goodwill arising from the Elmira and FBD acquisitions is not deductible for tax purposes.

Goodwill arising from the 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 were $ 0.3 million during the three months ended March 31, 2022, and have been separately stated in the consolidated statements of income.

Merger and acquisition integration-related expenses were immaterial for the three months ended March 31, 2021.

Merger and acquisition integration-related expenses were $ 4.0 million and $ 4.3 million during the three and six months ended June 30, 2022, respectively, and were immaterial during the three and six months ended June 30, 2021.

These amounts have been separately stated in the consolidated statements of income.

Supplemental Pro Forma Financial Information

The following unaudited condensed pro forma information assumes the Elmira acquisition had been completed as of January 1, 2021 for the three and six months ended June 30, 2022 and 2021.

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 acquisition 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 acquisition.

The pro forma information set forth below reflects the historical results of Elmira combined with the Company’s consolidated statements of income with adjustments related to (a) certain purchase accounting fair value adjustments and (b) amortization of core deposit intangibles.

Acquisition-related expenses totaling $ 4.0 million and $ 4.3 million for the three and six months ended June 30, 2022, respectively, related to Elmira were included in the pro forma information as if they were incurred in the first quarter of 2021.

Pro Forma (Unaudited)

Three Months Ended

Six Months Ended

(000’s omitted)

June 30, 2022

June 30, 2021

June 30, 2022

June 30, 2021

Total revenue, net of interest expense

ACCOUNTING POLICIES

The accounting policies of the Company, as applied in the consolidated interim financial statements presented herein, are substantially the same as those followed on an annual basis as presented on pages 76 through 88 of the Annual Report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission (“SEC”) on March 1, 2022 except as noted below.

The extent to which the novel coronavirus (“COVID-19”) impacts the Company’s business and financial results will depend on numerous evolving factors including, but not limited to:

the magnitude and duration of COVID-19, the extent to which it will impact national and international macroeconomic conditions including interest rates, inflation, unemployment rates, the speed of the anticipated recovery, and governmental and business reactions to the pandemic.

The Company assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to the Company and the unknown future impacts of COVID-19 as of March 31, 2022 and through the date of this Quarterly Report on Form 10-Q.

The accounting matters assessed included, but were not limited to, the Company’s allowance for credit losses, decrease in fee and interest income, and the carrying value of the goodwill and other long-lived assets.

While there was not a material impact to the Company’s consolidated financial statements as of and for the three months ended March 31, 2022, the Company’s future assessment of the magnitude and duration of COVID-19, as well as other factors, could result in material impacts to the Company’s consolidated financial statements in future reporting periods.

Contract Balances

4 unchanged sentences

The Company does not typically enter into long-term revenue contracts with customers, and therefore, does not experience significant contract balances.

As of March 31, 2022, $ 29.0 million of accounts receivable, including $ 10.0 million of unbilled fee revenue, and $ 3.0 million of unearned revenue, was recorded in the consolidated statements of condition.

As of June 30, 2022, $ 31.4 million of accounts receivable, including $ 8.7 million of unbilled fee revenue, and $ 2.4 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.

27 unchanged sentences

INVESTMENT SECURITIES

The amortized cost and estimated fair value of investment securities as of March 31, 2022 and December 31, 2021 are as follows:

March 31, 2022

The amortized cost and estimated fair value of investment securities as of June 30, 2022 and December 31, 2021 are as follows:

June 30, 2022

December 31, 2021

6 unchanged sentences

Government agency collateralized mortgage obligations

Total available-for-sale portfolio

Total available-for-sale investment portfolio

Equity and other Securities:

5 unchanged sentences

A summary of investment securities that have been in a continuous unrealized loss position is as follows:

As of March 31, 2022

As of June 30, 2022

Less than 12 Months

21 unchanged sentences

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.

The majority of the obligations of state and political subdivisions carry a credit rating of A or better.

Additionally, a majority of the obligations of state and political subdivisions carry a secondary level of credit enhancement.

The majority of the obligations of state and political subdivisions carry a credit rating of A- or better as well as carry a secondary level of credit enhancement.

The Company holds two corporate debt securities in an unrealized loss position, which are currently rated A- or better, and the issuer of the securities both show a low risk of default.

2 unchanged sentences

The unrealized losses in the portfolios are primarily attributable to changes in interest rates.

As such, management does not believe any individual unrealized loss as of March 31, 2022 represents credit losses and no unrealized losses have been recognized in the provision for credit losses.

Accordingly, there is no allowance for credit losses on the Company’s available-for-sale portfolio as of March 31, 2022.

Accrued interest receivable on available-for-sale debt securities, included in accrued interest and fees receivable on the consolidated statements of condition, totaled $ 17.2 million at March 31, 2022 and is excluded from the estimate of credit losses.

The amortized cost and estimated fair value of debt securities at March 31, 2022, by contractual maturity, are shown below.

As such, management does not believe any individual unrealized loss as of June 30, 2022 represents credit losses and no unrealized losses have been recognized in the provision for credit losses.

Accordingly, there is no allowance for credit losses on the Company’s available-for-sale investment portfolio as of June 30, 2022.

Accrued interest receivable on available-for-sale debt securities, included in accrued interest and fees receivable on the consolidated statements of condition, totaled $ 20.2 million at June 30, 2022 and is excluded from the estimate of credit losses.

The amortized cost and estimated fair value of debt securities at June 30, 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.

8 unchanged sentences

Government agency collateralized mortgage obligations

Investment securities with a carrying value of $ 2.51 billion and $ 2.32 billion at March 31, 2022 and December 31, 2021, respectively, were pledged to collateralize certain deposits and borrowings.

Investment securities with a carrying value of $ 2.40 billion and $ 2.32 billion at June 30, 2022 and December 31, 2021, respectively, were pledged to collateralize certain deposits and borrowings.

Securities pledged to collateralize certain deposits and borrowings included $ 433.6 million and $ 485.4 million of U.S.

Treasury securities that were pledged as collateral for securities sold under agreement to repurchase at March 31, 2022 and December 31, 2021, respectively.

All securities sold under agreement to repurchase as of March 31, 2022 and December 31, 2021 have an overnight and continuous maturity.

Treasury securities that were pledged as collateral for securities sold under agreement to repurchase at June 30, 2022 and December 31, 2021, respectively.

All securities sold under agreement to repurchase as of June 30, 2022 and December 31, 2021 have an overnight and continuous maturity.

LOANS AND ALLOWANCE FOR CREDIT LOSSES

8 unchanged sentences

Loans, net of allowance for credit losses

The following table presents the aging of the amortized cost basis of the Company’s past due loans by segment as of March 31, 2022:

The following table presents the aging of the amortized cost basis of the Company’s past due loans by segment as of June 30, 2022:

90+ Days Past

13 unchanged sentences

Consumer direct

The delinquency status for loans on payment deferment due to COVID-19 financial hardship were reported at March 31, 2022 based on their delinquency status at the execution date of the payment deferment, unless subsequent to the execution date of the payment deferment, the borrower made all required past due payments to bring the loan to current status.

Certain loans under extended pandemic-related forbearance were reclassified to nonaccrual status.

No interest income on nonaccrual loans was recognized during the three months ended March 31, 2022.

No interest income on nonaccrual loans was recognized during the three and six months ended June 30, 2022.

An immaterial amount of accrued interest was written off on nonaccrual loans by reversing interest income.

1 unchanged sentence

The Company’s primary credit quality indicator for its business lending portfolio is an internal credit risk rating system that categorizes loans as “pass”, “special mention”, “classified”, or “doubtful”.

Credit risk ratings are applied individually to those classes of loans that have significant or unique credit characteristics that benefit from a case-by-case evaluation.

Loans that were granted COVID-19 related financial hardship payment deferrals were reviewed on a case-by-case basis for downgrades into lower credit risk ratings.

Loans on payment deferral will continue to be monitored for indications of deterioration that could result in future downgrades.

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:

5 unchanged sentences

The condition of the borrower has deteriorated to the point that collection of the balance is improbable based on current facts and conditions and loss is likely.

The following tables show the amount of business lending loans by credit quality category at March 31, 2022 and December 31, 2021:

The following tables show the amount of business lending loans by credit quality category at June 30, 2022 and December 31, 2021:

Term Loans Amortized Cost Basis by Origination Year

(000’s omitted)

March 31, 2022

June 30, 2022

Business lending:

7 unchanged sentences

Total business lending

The business lending portfolio experienced an improvement in credit quality as a higher proportion of loans were classified as Pass at June 30, 2022 as compared to December 31, 2021.

This change was the result of improvements in economic conditions, leading to improvements in the financial condition of the borrowers.

All other loans are underwritten and structured using standardized criteria and characteristics, primarily payment performance, and are monitored collectively on a monthly basis.

2 unchanged sentences

Nonperforming loans include 90+ days past due and still accruing and nonaccrual loans.

The following table details the balances in all other loan categories at March 31, 2022:

The following table details the balances in all other loan categories at June 30, 2022:

Term Loans Amortized Cost Basis by Origination Year

(000’s omitted)

March 31, 2022

June 30, 2022

Consumer mortgage:

34 unchanged sentences

(2) FICO CDE refers to loans with FICO scores less than 720 at origination and potentially higher risk.

All loan classes are collectively assessed for impairment except business lending.

A summary of individually assessed business loans as of March 31, 2022 and December 31, 2021 follows:

Commercial loans greater than $ 0.5 million that are on nonaccrual are individually assessed, and if necessary, a specific allocation of the allowance for credit losses is provided.

A summary of individually assessed business loans as of June 30, 2022 and December 31, 2021 follows:

(000’s omitted)

4 unchanged sentences

Specifically allocated allowance

The average carrying balance of individually assessed loans was $ 12.3 million and $ 34.9 million for the three months ended March 31, 2022 and 2021, respectively.

No interest income was recognized on individually assessed loans for the three months ended March 31, 2022 and 2021.

The average carrying balance of individually assessed loans was $ 8.7 million and $ 32.9 million for the three months ended June 30, 2022 and 2021, respectively.

The average carrying balance of individually assessed loans was $ 12.2 million and $ 34.6 million for the six months ended June 30, 2022 and 2021, respectively.

No interest income was recognized on individually assessed loans for the three or six months ended June 30, 2022 and 2021.

In the course of working with borrowers, the Company may choose to restructure the contractual terms of certain loans.

5 unchanged sentences

Pursuant to that guidance, the Company records a charge-off equal to any portion of the carrying value that exceeds the net realizable value of the collateral.

The amount of loss incurred in the three months ended March 31, 2022 and 2021 was immaterial.

TDRs less than $ 0.5 million are collectively included in the allowance for credit loss estimate.

Commercial loans greater than $ 0.5 million are individually assessed, and if necessary, a specific allocation of the allowance for credit losses is provided.

With regard to determination of the amount of the allowance for credit losses, TDR loans are considered to be impaired.

As a result, the determination of the amount of allowance for credit losses related to impaired loans for each portfolio segment within TDRs is the same as detailed previously.

Information regarding TDRs as of March 31, 2022 and December 31, 2021 is as follows:

March 31, 2022

The amount of loss incurred in the three and six months ended June 30, 2022 and 2021 was immaterial.

Information regarding TDRs as of June 30, 2022 and December 31, 2021 is as follows:

June 30, 2022

December 31, 2021

4 unchanged sentences

Consumer direct

The following table presents information related to loans modified in a TDR during the three months ended March 31, 2022 and 2021.

Of the loans noted in the table below, all consumer mortgage loans for the three months ended March 31, 2022 and 2021 were modified due to a Chapter 7 bankruptcy as described previously.

The following table presents information related to loans modified in a TDR during the three months and six months ended June 30, 2022 and 2021.

Of the loans noted in the table below, all consumer mortgage loans for the three months and six months ended June 30, 2022 and 2021 were modified due to a Chapter 7 bankruptcy as described previously.

The financial effects of these restructurings were immaterial.

1 unchanged sentence

Three Months Ended

March 31, 2022

March 31, 2021

June 30, 2022

June 30, 2021

(000’s omitted)

5 unchanged sentences

Consumer direct

Six Months Ended

June 30, 2022

June 30, 2021

(000’s omitted)

loans modified

Business lending

Consumer mortgage

Consumer indirect

Consumer direct

Allowance for Credit Losses

The following presents by segment the activity in the allowance for credit losses during the three months ended March 31, 2022 and 2021:

Three Months Ended March 31, 2022

The following presents by segment the activity in the allowance for credit losses during the three months and six months ended June 30, 2022 and 2021:

Three Months Ended June 30, 2022

(000’s omitted)

3 unchanged sentences

Consumer direct

Purchased credit deteriorated

Allowance for credit losses – loans

1 unchanged sentence

Total allowance for credit losses

Three Months Ended March 31, 2021

Three Months Ended June 30, 2021

(000’s omitted)

3 unchanged sentences

Consumer direct

Purchased credit deteriorated

Allowance for credit losses – loans

1 unchanged sentence

Total allowance for credit losses

A stable economic forecast as well as improvements in non-economic qualitative adjustments resulting from lower levels of delinquencies, deferrals, and charge-offs, have resulted in an allowance for credit losses to total loans ratio of 0.68 % at March 31, 2022, seven basis points lower than the level at March 31, 2021 and consistent with the level at December 31, 2021.

Accrued interest receivable on loans, included in accrued interest and fees receivable on the consolidated statements of condition, totaled $ 18.1 million at March 31, 2022, and is excluded from the estimate of credit losses and amortized cost basis of loans.

Six Months Ended June 30, 2022

(000’s omitted)

Business lending

Consumer mortgage

Consumer indirect

Consumer direct

Allowance for credit losses – loans

Liabilities for off-balance-sheet credit exposures

Total allowance for credit losses

Six Months Ended June 30, 2021

(000’s omitted)

Business lending

Consumer mortgage

Consumer indirect

Consumer direct

Allowance for credit losses – loans

Liabilities for off-balance-sheet credit exposures

Total allowance for credit losses

The continued improvement in non-economic qualitative adjustments resulting from low levels of delinquencies, deferrals, and charge-offs, offset in part by a moderate deterioration in the economic forecast, have resulted in an allowance for credit losses to total loans ratio of 0.68 % at June 30, 2022, three basis points lower than the level at June 30, 2021 and consistent with the level at December 31, 2021.

Included in the provision for credit losses for the three and six months ended June 30, 2022 is $ 3.9 million of acquisition-related provision for credit losses recognized in connection with the Elmira acquisition.

Accrued interest receivable on loans, included in accrued interest and fees receivable on the consolidated statements of condition, totaled $ 19.7 million at June 30, 2022 and is excluded from the estimate of credit losses and amortized cost basis of loans.

Under ASU No.

3 unchanged sentences

Under CECL, the Company is required to consider future economic conditions to determine current expected credit losses.

Management selected an eight-quarter reasonable and supportable forecast period using a two-quarter lag adjustment for economic factors that are not dependent on collateral values, and no lag for factors that do utilize collateral values, with a four-quarter reversion to the historical mean, to use as part of the economic forecast.

Management selected an eight-quarter reasonable and supportable forecast period using a two-quarter lag adjustment for economic factors that are not dependent on collateral values, and no lag adjustment for factors that do utilize collateral values, with a four-quarter reversion to the historical mean, to use as part of the economic forecast.

Management determined that these qualitative adjustments were needed to adjust historical information for expected losses and to reflect changes as a result of current conditions.

For qualitative macroeconomic adjustments, the Company uses third party forecasted economic data scenarios utilizing a base scenario and two alternative scenarios that were weighted, with forecasts available as of March 31, 2022.

These forecasts were factored into the qualitative portion of the calculation of the estimated credit losses and included the continued impact of COVID-19, such as supply chain pressures and their impact on collateral values and economic growth.

The scenarios utilized forecast a generally positive outlook on the economy, with low unemployment figures and high collateral values for housing, commercial real estate, and vehicles.

In addition to the economic forecast, the Company also considered additional qualitative adjustments as a result of COVID-19 and the impact on all industries, loan deferrals, delinquencies and downgrades.

These forecasts were factored into the qualitative portion of the calculation of the estimated credit losses and include the continued influence of supply chain constraints and inflationary pressures as well as their commensurate impact on collateral values and economic growth.

The scenarios utilized forecast stable unemployment levels and continued historically elevated collateral values for housing and commercial real estate, offset by moderate deterioration in GDP growth, auto values, and median household income.

Management developed expected loss estimates considering factors for segments as outlined below:

1 unchanged sentence

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 review of estimated losses.

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:

10 unchanged sentences

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 three months ended March 31, 2022 by portfolio segment:

The following table presents the carrying amounts of loans purchased and sold during the six months ended June 30, 2022 by portfolio segment:

(000’s omitted)

All the sales during the three months ended March 31, 2022 were sales of secondary market eligible residential mortgage loans.

All purchases of loans were from the acquisition of Elmira.

All the sales of consumer mortgages during the six months ended June 30, 2022 were sales of secondary market eligible residential mortgage loans.

GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS

The gross carrying amount and accumulated amortization for each type of identifiable intangible asset are as follows:

March 31, 2022

June 30, 2022

December 31, 2021

6 unchanged sentences

(000's omitted)

Apr - Dec 2022

Shown below are the components of the Company’s goodwill at December 31, 2021 and March 31, 2022:

Jul - Dec 2022

Shown below are the components of the Company’s goodwill at December 31, 2021 and June 30, 2022:

(000’s omitted)

December 31, 2021

March 31, 2022

June 30, 2022

MANDATORILY REDEEMABLE PREFERRED SECURITIES

As of March 31, 2022, the Company does not sponsor any business trusts.

As of June 30, 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.

6 unchanged sentences

The Company made a $ 2.9 million contribution to its defined benefit pension plan and a $ 0.09 million contribution to the Steuben Trust Company Pension Plan in the first quarter of 2021.

The net periodic benefit cost for the three months ended March 31, 2022 and 2021 is as follows:

The net periodic benefit cost for the three and six months ended June 30, 2022 and 2021 is as follows:

Pension Benefits

1 unchanged sentence

Three Months Ended

Six Months Ended

Three Months Ended

Six Months Ended

(000’s omitted)

7 unchanged sentences

Under the two class method, earnings available to common shareholders for the period are allocated between common shareholders and participating securities according to dividends declared and participation rights in undistributed earnings.

The Company has determined that all of its outstanding non-vested stock awards are participating securities as of March 31, 2022.

The Company has determined that all of its outstanding non-vested stock awards are participating securities as of June 30, 2022.

Basic earnings per share are computed based on the weighted-average of the common shares outstanding for the period.

2 unchanged sentences

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.

There were approximately 0.2 million weighted-average anti-dilutive stock options outstanding for the three months ended March 31, 2022, compared to approximately 0.03 million weighted-average anti-dilutive stock options outstanding for the three months ended March 31, 2021 that were not included in the computation below.

The following is a reconciliation of basic to diluted earnings per share for the three months ended March 31, 2022 and 2021:

There were approximately 0.4 million and 0.3 million weighted-average anti-dilutive stock options outstanding for the three months and six months ended June 30, 2022, respectively, compared to approximately 0.2 million and 0.1 million weighted-average anti-dilutive stock options outstanding for the three months and six months ended June 30, 2021, respectively, that were not included in the computation below.

The following is a reconciliation of basic to diluted earnings per share for the three and six months ended June 30, 2022 and 2021:

Three Months Ended

Six Months Ended

(000’s omitted, except per share data)

10 unchanged sentences

Stock Repurchase Program

At its December 2020 meeting, the Company’s Board of Directors (the “Board”) approved a stock repurchase program authorizing the repurchase of up to 2.68 million shares of the Company’s common stock, in accordance with securities laws and regulations, through December 31, 2021.

At its December 2021 meeting, the Board approved a new stock repurchase program for 2022, authorizing the repurchase of up to 2.70 million shares of the Company’s common stock, in accordance with securities and banking laws and regulations, through December 31, 2022.

1 unchanged sentence

The timing and extent of repurchases will depend on market conditions and other corporate considerations as determined at the Company’s discretion.

The Company repurchased 50,000 shares under the authorized plan during the first three months of 2022 and did not repurchase any shares under the authorized plan during the first three months of 2021.

The Company repurchased 250,000 shares under the authorized plan during the first six months of 2022 and did not repurchase any shares under the authorized plan during the first six months of 2021.

Refer to Part II, Item 2:

Unregistered Sales of Equity Securities and Use of Proceeds for additional information regarding repurchases of the Company’s common stock.

COMMITMENTS, CONTINGENT LIABILITIES AND RESTRICTIONS

12 unchanged sentences

The Company and its subsidiaries are subject in the normal course of business to various pending and threatened legal proceedings in which claims for monetary damages are asserted.

As of March 31, 2022, management, after consultation with legal counsel, does not anticipate that the aggregate ultimate liability arising out of litigation pending or threatened against the Company or its subsidiaries will be material to the Company’s consolidated financial position.

As of June 30, 2022, management, after consultation with legal counsel, does not anticipate that the aggregate ultimate liability arising out of litigation pending or threatened against the Company or its subsidiaries will be material to the Company’s consolidated financial position.

On at least a quarterly basis, the Company assesses its liabilities and contingencies in connection with such legal proceedings.

13 unchanged sentences

There were no transfers between any of the levels for the periods presented.

March 31, 2022

June 30, 2022

(000’s omitted)

10 unchanged sentences

Interest rate swap agreements asset

Interest rate swap agreements liability

December 31, 2021

21 unchanged sentences

● Forward sales commitments – The Company enters into forward sales commitments to sell certain residential real estate loans.

Such commitments are considered to be derivative financial instruments and, therefore, are carried at estimated fair value in the other asset or other liability section of the consolidated statement of condition.

The fair value of these forward sales commitments is primarily measured by obtaining pricing from certain government-sponsored entities and reflects the underlying price the entity would pay the Company for an immediate sale on these mortgages.

14 unchanged sentences

The fair value information of assets and liabilities measured on a non-recurring basis presented below is not as of the period-end, but rather as of the date the fair value adjustment was recorded closest to the date presented.

March 31, 2022

June 30, 2022

December 31, 2021

14 unchanged sentences

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 73.5 % at March 31, 2022 and result in a Level 3 classification of the inputs for determining fair value.

Such discounts are significant, ranging from 23.2 % to 87.8 % at June 30, 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.

6 unchanged sentences

Impairment is recognized through a valuation allowance.

There was no valuation allowance at March 31, 2022 and December 31, 2021.

There was no valuation allowance at June 30, 2022 and December 31, 2021.

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 valuation of contingent consideration is calculated using an income approach method, which provides an estimation of the fair value of the 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.

5 unchanged sentences

Fair Value at

(000's omitted, except per loan data)

March 31, 2022

(000's omitted)

June 30, 2022

Valuation Technique

47 unchanged sentences

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 estimated cost of disposal/market adjustment for OREO 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.

3 unchanged sentences

Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Company.

The carrying amounts and estimated fair values of the Company’s other financial instruments that are not accounted for at fair value at March 31, 2022 and December 31, 2021 are as follows:

March 31, 2022

The carrying amounts and estimated fair values of the Company’s other financial instruments that are not accounted for at fair value at June 30, 2022 and December 31, 2021 are as follows:

June 30, 2022

December 31, 2021

2 unchanged sentences

Financial liabilities:

Overnight Federal Reserve Bank borrowings

Securities sold under agreement to repurchase, short-term

22 unchanged sentences

At inception and during the life of the interest rate lock commitment, the Company includes the expected net future cash flows related to the associated servicing of the loan as part of the fair value measurement of the interest rate lock commitments.

These derivatives are recorded at fair value, which were immaterial at March 31, 2022 and December 31, 2021.

The effect of the changes to these derivatives for the three months ended March 31, 2022 and March 31, 2021 was also immaterial.

The Company acquired interest rate swaps in 2017 with notional amounts with certain commercial customers which totaled $ 0.4 million at March 31, 2022 and $ 0.5 million at December 31, 2021.

In order to minimize the Company’s risk, these customer derivatives (pay floating/receive fixed swaps) have been offset with essentially matching interest rate swaps (pay fixed/receive floating swaps) with the Company’s counterparty totaling $ 0.4 million at March 31, 2022 and $ 0.5 million at December 31, 2021.

At March 31, 2022, the weighted average receive rate of these interest rate swaps was 2.65 %, the weighted average pay rate was 3.54 % and the weighted average maturity was 1.0 years.

These derivatives are recorded at fair value, which were immaterial at June 30, 2022 and December 31, 2021.

The effect of the changes to these derivatives for the three and six months then ended was also immaterial.

The Company acquired interest rate swaps in 2017 with notional amounts with certain commercial customers which totaled $ 0.3 million at June 30, 2022 and $ 0.5 million at December 31, 2021.

In order to minimize the Company’s risk, these customer derivatives (pay floating/receive fixed swaps) have been offset with essentially matching interest rate swaps (pay fixed/receive floating swaps) with the Company’s counterparty totaling $ 0.3 million at June 30, 2022 and $ 0.5 million at December 31, 2021.

At June 30, 2022, the weighted average receive rate of these interest rate swaps was 3.70 %, the weighted average pay rate was 3.54 % and the weighted average maturity was 0.8 years.

At December 31, 2021, the weighted average receive rate of these interest rate swaps was 2.35 %, the weighted average pay rate was 3.54 % and the weighted average maturity was 1.3 years.

1 unchanged sentence

Since the terms of the swaps with the Company’s customer and the other financial institution offset each other, with the only difference being counterparty credit risk, changes in the fair value of the underlying derivative contracts are not materially different and do not significantly impact the Company’s results of operations.

The Company also acquired interest rate swaps in 2017 with notional amounts totaling $ 5.3 million at March 31, 2022 and $ 5.3 million at December 31, 2021, that were designated as fair value hedges of certain fixed rate loans with municipalities which are recorded in loans in the consolidated statements of condition.

At March 31, 2022, the weighted average receive rate of these interest rate swaps was 1.58 %, the weighted average pay rate was 3.11 % and the weighted average maturity was 11.3 years.

The Company also acquired interest rate swaps in 2017 with notional amounts totaling $ 4.9 million at June 30, 2022, and $ 5.3 million at December 31, 2021, that were designated as fair value hedges of certain fixed rate loans with municipalities which are recorded in loans in the consolidated statements of condition.

At June 30, 2022, the weighted average receive rate of these interest rate swaps was 2.27 %, the weighted average pay rate was 3.11 % and the weighted average maturity was 11.0 years.

At December 31, 2021, the weighted average receive rate of these interest rate swaps was 1.39 %, the weighted average pay rate was 3.11 % and the weighted average maturity was 11.5 years.

The Company includes the gain or loss on the hedged items in interest and fees on loans, the same line item as the offsetting gain or loss on the related interest rate swaps.

The effects of fair value accounting in the consolidated statements of income for the three months ended March 31, 2022 and March 31, 2021 are immaterial.

As of March 31, 2022 and December 31, 2021, the following amounts were recorded in the consolidated statement of condition related to cumulative basis adjustments for fair value hedges:

The effects of fair value accounting in the consolidated statements of income for the three and six months ended June 30, 2022 are immaterial.

As of June 30, 2022 and December 31, 2021, the following amounts were recorded in the consolidated statements of condition related to cumulative basis adjustments for fair value hedges:

(000’s omitted)

6 unchanged sentences

the Hedged Item Is Included

Fair values of derivative instruments as of March 31, 2022 and December 31, 2021 are as follows:

Fair values of derivative instruments as of June 30, 2022 and December 31, 2021 are as follows:

(000’s omitted)

March 31, 2022

June 30, 2022

Derivative Assets

7 unchanged sentences

Derivatives not designated as hedging instruments under Subtopic 815-20

Interest rate swaps

Accrued interest and other liabilities

Commitments to originate real estate loans for sale

17 unchanged sentences

Total derivatives

The Company assessed its counterparty risk at March 31, 2022 and December 31, 2021 and determined any credit risk inherent in our derivative contracts was not material.

The Company assessed its counterparty risk at June 30, 2022 and December 31, 2021 and determined any credit risk inherent in our derivative contracts was not material.

Further information about the fair value of derivative financial instruments can be found in Note K to these consolidated financial statements.

16 unchanged sentences

Benefit Services

Three Months Ended March 31, 2022

Three Months Ended June 30, 2022

Net interest income

3 unchanged sentences

Acquisition expenses

Acquisition-related contingent consideration adjustment

Other operating expenses

1 unchanged sentence

Core deposit intangibles & Other intangibles

Three Months Ended March 31, 2021

Three Months Ended June 30, 2021

Net interest income

6 unchanged sentences

Core deposit intangibles & Other intangibles

(000's omitted)

Benefit Services

Six Months Ended June 30, 2022

Net interest income

Provision for credit losses

Noninterest revenues

Amortization of intangible assets

Acquisition expenses

Acquisition-related contingent consideration adjustment

Other operating expenses

Income before income taxes

Six Months Ended June 30, 2021

Net interest income

Provision for credit losses

Noninterest revenues

Amortization of intangible assets

Acquisition expenses

Other operating expenses

Income before income taxes

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements