10-Q

Table Of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)

(X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2015

OR

(   )  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                    to_________

Commission File Number 0-25923

Eagle Bancorp, Inc.

(Exact name of registrant as specified in its charter)

Maryland	52-2061461
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
7830 Old Georgetown Road, Third Floor, Bethesda, Maryland	20814
(Address of principal executive offices)	(Zip Code)

(301) 986-1800

(Registrant's telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐  Smaller Reporting Company ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act Yes ☐     No ☒

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

As of October 30, 2015, the registrant had 33,466,992 shares of Common Stock outstanding.

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Table Of Contents

EAGLE BANCORP, INC.

TABLE OF CONTENTS

PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	3
	Consolidated Balance Sheets	3
	Consolidated Statements of Operations	4
	Consolidated Statements of Comprehensive Income	5
	Consolidated Statements of Changes in Shareholders’ Equity	6
	Consolidated Statements of Cash Flows	7
	Notes to Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	41
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	71
Item 4.	Controls and Procedures	71
PART II.	OTHER INFORMATION	72
Item 1.	Legal Proceedings	72
Item 1A.	Risk Factors	72
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	72
Item 3.	Defaults Upon Senior Securities	72
Item 4.	Mine Safety Disclosures	72
Item 5.	Other Information	72
Item 6.	Exhibits	72
Signatures		76

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Table Of Contents

Item 1 – Financial Statements (Unaudited)

EAGLE BANCORP, INC.

Consolidated Balance Sheets (Unaudited)

(dollars in thousands, except per share data)

	September 30, 2015			December 31, 2014			September 30, 2014
Assets
Cash and due from banks	$	10,703		$	9,097		$	7,920
Federal funds sold		4,076			3,516			8,968
Interest bearing deposits with banks and other short-term investments		291,276			243,412			191,468
Investment securities available-for-sale, at fair value		524,326			382,343			382,468
Federal Reserve and Federal Home Loan Bank stock		16,865			22,560			10,657
Loans held for sale		35,713			44,317			41,254
Loans		4,776,965			4,312,399			3,432,548
Less allowance for credit losses		(50,320	)		(46,075	)		(44,954	)
Loans, net		4,726,645			4,266,324			3,387,594
Premises and equipment, net		17,070			19,099			17,848
Deferred income taxes		35,426			32,511			25,803
Bank owned life insurance		58,284			56,594			40,432
Intangible assets, net		109,498			109,908			3,321
Other real estate owned		9,952			13,224			8,623
Other assets		49,124			44,975			42,825
Total Assets	$	5,888,958		$	5,247,880		$	4,169,181
Liabilities and Shareholders' Equity
Liabilities
Deposits:
Noninterest bearing demand	$	1,402,447		$	1,175,799		$	1,056,559
Interest bearing transaction		207,716			143,628			161,886
Savings and money market		2,514,310			2,302,600			1,944,593
Time, $100,000 or more		439,248			393,132			190,137
Other time		362,867			295,609			180,675
Total deposits		4,926,588			4,310,768			3,533,850
Customer repurchase agreements		64,893			61,120			58,957
Other short-term borrowings		-			100,000			-
Long-term borrowings		70,000			119,300			109,300
Other liabilities		41,408			35,933			24,460
Total Liabilities		5,102,889			4,627,121			3,726,567
Shareholders' Equity
Preferred stock, par value $.01 per share, shares authorized 1,000,000, Series B, $1,000 per share liquidation preference, shares issued and outstanding 56,600 at September 30, 2015, December 31, 2014 and September 30, 2014; Series C, $1,000 per share liquidation preference, shares issued and outstanding 15,300 at September 30, 2015, and December 31, 2014, and -0- at September 30, 2014		71,900			71,900			56,600
Common stock, par value $.01 per share; shares authorized 100,000,000, shares issued and outstanding 33,405,510, 30,139,396 and 26,022,307 respectively		330			296			255
Warrant		946			946			946
Additional paid in capital		500,334			394,933			247,811
Retained earnings		211,318			150,037			135,490
Accumulated other comprehensive income		1,241			2,647			1,512
Total Shareholders' Equity		786,069			620,759			442,614
Total Liabilities and Shareholders' Equity	$	5,888,958		$	5,247,880		$	4,169,181

See notes to consolidated financial statements.

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EAGLE BANCORP, INC.

Consolidated Statements of Operations (Unaudited)

(dollars in thousands, except per share data)

	Nine Months Ended September 30,					Three Months Ended September 30,
	2015			2014		2015		2014
Interest Income
Interest and fees on loans	$	178,063		$	128,181	$	61,006	$	45,502
Interest and dividends on investment securities		7,189			6,911		2,745		2,255
Interest on balances with other banks and short-term investments		604			379		228		125
Interest on federal funds sold		13			11		2		4
Total interest income		185,869			135,482		63,981		47,886
Interest Expense
Interest on deposits		10,668			6,925		3,739		2,189
Interest on customer repurchase agreements		94			107		33		38
Interest on short-term borrowings		54			-		-		-
Interest on long-term borrowings		3,687			1,788		1,124		1,024
Total interest expense		14,503			8,820		4,896		3,251
Net Interest Income		171,366			126,662		59,085		44,635
Provision for Credit Losses		10,043			7,179		3,262		2,111
Net Interest Income After Provision For Credit Losses		161,323			119,483		55,823		42,524
Noninterest Income
Service charges on deposits		3,990			3,638		1,374		1,227
Gain on sale of loans		9,364			4,686		2,483		1,822
Gain on sale of investment securities		2,224			10		60		-
Loss on early extinguishment of debt		(1,130	)		-		-		-
Increase in the cash surrender value of bank owned life insurance		1,191			919		395		295
Other income		4,497			3,782		1,787		1,417
Total noninterest income		20,136			13,035		6,099		4,761
Noninterest Expense
Salaries and employee benefits		45,772			41,565		15,383		14,942
Premises and equipment expenses		12,056			9,570		3,974		3,374
Marketing and advertising		2,182			1,421		762		544
Data processing		5,598			4,592		1,976		1,572
Legal, accounting and professional fees		2,915			2,513		1,063		740
FDIC insurance		2,348			1,680		794		573
Merger expenses		139			1,460		2		885
Other expenses		11,066			7,575		3,451		2,513
Total noninterest expense		82,076			70,376		27,405		25,143
Income Before Income Tax Expense		99,383			62,142		34,517		22,142
Income Tax Expense		37,564			22,611		13,054		8,054
Net Income		61,819			39,531		21,463		14,088
Preferred Stock Dividends		539			434		180		151
Net Income Available to Common Shareholders	$	61,280		$	39,097	$	21,283	$	13,937
Earnings Per Common Share
Basic	$	1.88		$	1.50	$	0.64	$	0.54
Diluted	$	1.84		$	1.47	$	0.63	$	0.52

See notes to consolidated financial statements.

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EAGLE BANCORP, INC.

Consolidated Statements of Comprehensive Income (Unaudited)

(dollars in thousands)

	Nine Months Ended September 30,						Three Months Ended September 30,
	2015			2014			2015			2014
Net Income	$	61,819		$	39,531		$	21,463		$	14,088
Other comprehensive income (loss), net of tax:
Unrealized (loss) gain on securities available for sale		1,995			4,837			2,107			(326	)
Unrealized loss on derivatives		(2,067	)		-			(3,976	)		-
Reclassification adjustment for net gains included in net income		(1,334	)		(6	)		(36	)		-
Net change other comprehensive income (loss)		(1,406	)		4,831			(1,905	)		(326	)
Comprehensive Income	$	60,413		$	44,362		$	19,558		$	13,762

See notes to consolidated financial statements.

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EAGLE BANCORP, INC.

Consolidated Statements of Changes in Shareholders’ Equity (Unaudited)

(dollars in thousands except share data)

																		Accumulated
												Additional						Other			Total
	Preferred				Common							Paid			Retained			Comprehensive			Shareholders'
	Shares		Stock		Shares			Stock		Warrant		in Capital			Earnings			Income (Loss)			Equity
Balance January 1, 2015		71,900	$	71,900		30,139,396		$	296	$	946	$	394,933		$	150,037		$	2,647		$	620,759
Net Income		-		-		-			-		-		-			61,819			-			61,819
Net change in other comprehensive income, net of tax		-		-		-			-		-		-			-			(1,406	)		(1,406	)
Stock-based compensation		-		-		-			-		-		3,660			-			-			3,660
Issuance of common stock related to options exercised		-		-		373,027			4		-		4,636			-			-			4,640
Tax benefit on non-qualified options exercised		-		-		-			-		-		1,945			-			-			1,945
Vesting of restricted stock awards issued at date of grant, net of shares withheld for payroll taxes		-		-		(17,877	)		2		-		(2	)		-			-			-
Restricted stock awards granted		-		-		78,070			-		-		-			-			-			-
Shares issued in public offering, net of issuance costs of $5,302		-		-		2,816,900			28		-		94,605			-			-			94,633
Issuance of common stock related to employee stock purchase plan		-		-		15,994			-		-		561			1			-			562
Cash paid in lieu of fractional shares upon merger with Virginia Heritage		-		-		-			-		-		(4	)		-			-			(4	)
Preferred stock dividends		-		-		-			-		-		-			(539	)		-			(539	)
Balance September 30, 2015		71,900	$	71,900		33,405,510		$	330	$	946	$	500,334		$	211,318		$	1,241		$	786,069
Balance January 1, 2014		56,600	$	56,600		25,885,863		$	253	$	946	$	242,990		$	96,393		$	(3,319	)	$	393,863
Net Income		-		-		-			-		-		-			39,531			-			39,531
Net change in other comprehensive income, net of tax		-		-		-			-		-		-			-			4,831			4,831
Stock-based compensation		-		-		-			-		-		2,948			-			-			2,948
Issuance of common stock related to options exercised		-		-		64,926					-		1,089			-			-			1,089
Tax benefit on non-qualified options exercised		-		-		-			-		-		338			-			-			338
Vesting of restricted stock awards issued at date of grant, net of shares withheld for payroll taxes		-		-		(21,858	)		2		-		(2	)		-			-			-
Restricted stock awards granted		-		-		78,947			-		-					-			-			-
Issuance of common stock related to employee stock purchase plan		-		-		14,429					-		448			-			-			448
Preferred stock dividends		-		-		-			-		-		-			(434	)		-			(434	)
Balance September 30, 2014		56,600	$	56,600		26,022,307		$	255	$	946	$	247,811		$	135,490		$	1,512		$	442,614

See notes to consolidated financial statements.

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EAGLE BANCORP, INC.

Consolidated Statements of Cash Flows (Unaudited)

(dollars in thousands)

	Nine Months Ended September 30,
	2015			2014
Cash Flows From Operating Activities:
Net Income	$	61,819		$	39,531
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses		10,043			7,179
Depreciation and amortization		8,117			3,514
Gains on sale of loans		(9,364	)		(4,686	)
Securities premium amortization (discount accretion), net		2,304			2,638
Origination of loans held for sale		(726,230	)		(384,890	)
Proceeds from sale of loans held for sale		744,198			390,352
Net increase in cash surrender value of BOLI		(1,191	)		(919	)
(Increase) decrease in deferred income taxes		(2,915	)		3,146
Decrease in fair value of other real estate owned		750			589
Net loss on sale of other real estate owned		209			138
Net gain on sale of investment securities		(2,224	)		(10	)
Loss on early extinguishment of debt		1,130			-
Stock-based compensation expense		3,660			2,948
Excess tax benefits from stock-based compensation		(1,945	)		(338	)
Increase in other assets		(4,149	)		(11,150	)
Decrease in other liabilities		5,475			(7,995	)
Net cash provided by operating activities		89,687			40,047
Cash Flows From Investing Activities:
Decrease in interest bearing deposits with other banks and short-term investments		374			26
Purchases of available for sale investment securities		(241,280	)		(47,219	)
Proceeds from maturities of available for sale securities		32,021			27,602
Proceeds from sale/call of available for sale securities		65,790			17,485
Purchases of Federal Reserve and Federal Home Loan Bank stock		(2,405	)		(84	)
Proceeds from redemption of Federal Reserve and Federal Home Loan Bank stock		8,100			699
Net increase in loans		(472,089	)		(491,336	)
Proceeds from sale of other real estate owned		1,846			205
Purchases of BOLI		(499	)		-
Purchases of annuities		(992	)		-
Bank premises and equipment acquired		(2,053	)		(4,392	)
Net cash used in investing activities		(611,187	)		(497,014	)
Cash Flows From Financing Activities:
Increase in deposits		615,820			308,436
Increase (decrease) in customer repurchase agreements		3,773			(21,514	)
Issuance of common stock		94,633			-
Decrease in short-term borrowings		(100,000	)		-
(Decrease) increase in long-term borrowings		(49,300	)		70,000
Payment of dividends on preferred stock		(539	)		(434	)
Proceeds from exercise of stock options		4,640			1,089
Excess tax benefits from stock-based compensation		1,945			338
Payment in lieu of fractional shares		(4	)		-
Proceeds from employee stock purchase plan		562			448
Net cash provided by financing activities		571,530			358,363
Net Increase (Decrease) In Cash and Cash Equivalents		50,030			(98,604	)
Cash and Cash Equivalents at Beginning of Period		256,025			306,960
Cash and Cash Equivalents at End of Period	$	306,055		$	208,356
Supplemental Cash Flows Information:
Interest paid	$	15,800		$	8,646
Income taxes paid	$	38,550		$	24,750
Non-Cash Investing Activities
Transfers from loans to other real estate owned	$	1,725		$	330
Transfers from other real estate owned to loans	$	2,192		$	-

See notes to consolidated financial statements.

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EAGLE BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements include the accounts of Eagle Bancorp, Inc. and its subsidiaries (the “Company”), EagleBank (the “Bank”), Eagle Commercial Ventures, LLC (“ECV”), Eagle Insurance Services, LLC, and Bethesda Leasing, LLC, with all significant intercompany transactions eliminated.

The consolidated financial statements of the Company included herein are unaudited. The consolidated financial statements reflect all adjustments, consisting of normal recurring accruals that in the opinion of management, are necessary to present fairly the results for the periods presented. The amounts as of and for the year ended December 31, 2014 were derived from audited consolidated financial statements. Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. There have been no significant changes to the Company’s Accounting Policies as disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. The Company believes that the disclosures are adequate to make the information presented not misleading. Certain reclassifications have been made to amounts previously reported to conform to the current period presentation.

These statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. Operating results for the nine and three months ended September 30, 2015 are not necessarily indicative of the results of operations to be expected for the remainder of the year, or for any other period.

Nature of Operations

The Company, through the Bank, conducts a full service community banking business, primarily in Northern Virginia, Montgomery County, Maryland, and Washington, D.C. The primary financial services offered by the Bank include real estate, commercial and consumer lending, as well as traditional deposit and repurchase agreement products. The Bank is also active in the origination and sale of residential mortgage loans and the origination of small business loans. The guaranteed portion of small business loans, guaranteed by the Small Business Administration (“SBA”), is typically sold to third party investors in a transaction apart from the loan’s origination. As of September 30, 2015, the Bank offers its products and services through twenty-two banking offices, four lending centers and various electronic capabilities, including remote deposit services and mobile banking services. Eagle Insurance Services, LLC, a subsidiary of the Bank, offers access to insurance products and services through a referral program with a third party insurance broker. Eagle Commercial Ventures, LLC, a direct subsidiary of the Company, provides subordinated financing for the acquisition, development and construction of real estate projects; these transactions involve higher levels of risk, together with commensurate higher returns. Refer to Higher Risk Lending – Revenue Recognition below.

Business Combinations

Business combinations are accounted for by applying the acquisition method in accordance with Accounting Standards Codification (“ASC”) 805, “Business Combinations.” Under the acquisition method, identifiable assets acquired and liabilities assumed, and any non-controlling interest in the acquiree at the acquisition date are measured at their fair values as of that date, and are recognized separately from goodwill. Results of operations of the acquired entities are included in the consolidated statement of income from the date of acquisition.

On October 31, 2014, the Company completed its acquisition of Virginia Heritage Bank (“Virginia Heritage”). The acquisition of Virginia Heritage was effected through the merger (the “Merger”) of Virginia Heritage with and into EagleBank, in accordance with the Agreement and Plan of Reorganization (the “Merger Agreement”) among the Company, EagleBank and Virginia Heritage, dated June 9, 2014. The acquisition added approximately $800 million in loans, $3 million in loans held for sale, $645 million in deposits, and $95 million in borrowings. An identified intangible related to core deposits was recorded for $4.6 million, which is being amortized over its estimated useful life of approximately 6 years and an initial intangible for goodwill was recorded for approximately $102.3 million. Additionally, in connection with the transaction, the Company recorded a fair value credit mark on the loan portfolio for approximately $12.5 million.

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Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results may differ from those estimates and such differences could be material to the financial statements.

Cash Flows

For purposes of reporting cash flows, cash and cash equivalents include cash and due from banks, federal funds sold, and interest bearing deposits with other banks which have an original maturity of three months or less.

Loans Held for Sale

The Company regularly engages in sales of residential mortgage loans and the guaranteed portion of SBA loans originated by the Bank. Loans held for sale are carried at the lower of aggregate cost or fair value. Fair value is derived from secondary market quotations for similar instruments. Gains and losses on sales of these loans are recorded as a component of noninterest income in the consolidated statements of operations.

The Company’s current practice is to sell residential mortgage loans on a servicing released basis, and, therefore, it has no intangible asset recorded for the value of such servicing as of September 30, 2015, December 31, 2014 and September 30, 2014. The sale of the guaranteed portion of SBA loans on a servicing retained basis gives rise to an Excess Servicing Asset, which is computed on a loan by loan basis with the unamortized amount being included in Intangible Assets in the consolidated balance sheets. This Excess Servicing Asset is being amortized on a straight-line basis (with adjustment for prepayments) as an offset to servicing fees collected and is included in Other Income in the consolidated statement of operations.

The Company enters into commitments to originate residential mortgage loans whereby the interest rate on the loan is determined prior to funding (i.e. interest rate lock commitments). Such interest rate lock commitments on mortgage loans to be sold in the secondary market are considered to be derivatives. To protect against the price risk inherent in residential mortgage loan commitments, the Company utilizes both “best efforts” and “mandatory delivery” forward loan sale commitments to mitigate the risk of potential decreases in the values of loans that would result from the exercise of the derivative loan commitments. Under a “best efforts” contract, the Company commits to deliver an individual mortgage loan of a specified principal amount and quality to an investor and the investor commits to a price that it will purchase the loan from the Company if the loan to the underlying borrower closes. The Company protects itself from changes in interest rates through the use of best efforts forward delivery commitments, whereby the investor commits to purchase a loan at a price representing a premium on the day the borrower commits to an interest rate with the intent that the buyer/investor has assumed the interest rate risk on the loan. As a result, the Company is not generally exposed to losses on loans sold utilizing best efforts. Nor will it realize gains related to interest rate lock commitments due to changes in interest rates. The market values of interest rate lock commitments and best efforts contracts are not readily ascertainable with precision because interest rate lock commitments and best efforts contracts are not actively traded. Because of the high correlation between interest rate lock commitments and best efforts contracts, no gain or loss should occur on the interest rate lock commitments. Under a “mandatory delivery” contract, the Company commits to deliver a certain principal amount of mortgage loans to an investor at a specified price on or before a specified date. If the Company fails to deliver the amount of mortgages necessary to fulfill the commitment by the specified date, it is obligated to pay the investor a “pair-off” fee, based on then-current market prices, to compensate the investor for the shortfall. The Company manages the interest rate risk on interest rate lock commitments by entering into forward sale contracts of mortgage backed securities, whereby the Company obtains the right to deliver securities to investors in the future at a specified price. Such contracts are accounted for as derivatives and are recorded at fair value in derivative assets or liabilities, carried on the Consolidated Balance Sheet within Other Assets or Other Liabilities with changes in fair value recorded in other income within the Consolidated Statement of Income. The period of time between issuance of a loan commitment to the customer and closing and sale of the loan to an investor generally ranges from 30 to 90 days under current market conditions. The gross gains on loan sale are recognized based on new loan commitments with adjustment for price and pair-off activity. Commission expenses on loans held for sale are recognized based on loans closed.

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In circumstances where the Company does not deliver the whole loan to an investor, but rather elects to retain the loan in its portfolio, the loan is transferred from held for sale to loans at fair value at date of transfer.

Investment Securities

The Company has no securities classified as trading, or as held to maturity. Marketable equity securities and debt securities not classified as held to maturity or trading are classified as available-for-sale. Securities available-for-sale are acquired as part of the Company’s asset/liability management strategy and may be sold in response to changes in interest rates, current market conditions, loan demand, changes in prepayment risk and other factors. Securities available-for-sale are carried at fair value, with unrealized gains or losses being reported as accumulated other comprehensive income/(loss), a separate component of shareholders’ equity, net of deferred income tax. Realized gains and losses, using the specific identification method, are included as a separate component of noninterest income in the consolidated statements of operations.

Premiums and discounts on investment securities are amortized/accreted to the earlier of call or maturity based on expected lives, which lives are adjusted based on prepayment assumptions and call optionality if any. Declines in the fair value of individual available-for-sale securities below their cost that are other-than-temporary in nature result in write-downs of the individual securities to their fair value. Factors affecting the determination of whether other-than-temporary impairment has occurred include a downgrading of the security by a rating agency, a significant deterioration in the financial condition of the issuer, or a change in management’s intent and ability to hold a security for a period of time sufficient to allow for any anticipated recovery in fair value. Management systematically evaluates investment securities for other-than-temporary declines in fair value on a quarterly basis. This analysis requires management to consider various factors, which include (1) duration and magnitude of the decline in value, (2) the financial condition of the issuer or issuers and (3) structure of the security.

The entire amount of an impairment loss is recognized in earnings only when (1) the Company intends to sell the security, or (2) it is more likely than not that the Company will have to sell the security before recovery of its amortized cost basis, or (3) the Company does not expect to recover the entire amortized cost basis of the security. In all other situations, only the portion of the impairment loss representing the credit loss must be recognized in earnings, with the remaining portion being recognized in shareholders’ equity as comprehensive income, net of deferred taxes.

Loans

Loans are stated at the principal amount outstanding, net of unamortized deferred costs and fees. Interest income on loans is accrued at the contractual rate on the principal amount outstanding. It is the Company’s policy to discontinue the accrual of interest when circumstances indicate that collection is doubtful. Deferred fees and costs are being amortized on the interest method over the term of the loan.

Management considers loans impaired when, based on current information, it is probable that the Company will not collect all principal and interest payments according to contractual terms. Loans are evaluated for impairment in accordance with the Company’s portfolio monitoring and ongoing risk assessment procedures.  Management considers the financial condition of the borrower, cash flow of the borrower, payment status of the loan, and the value of the collateral, if any, securing the loan. Generally, impaired loans do not include large groups of smaller balance homogeneous loans such as residential real estate and consumer type loans which are evaluated collectively for impairment and are generally placed on nonaccrual when the loan becomes 90 days past due as to principal or interest. Loans specifically reviewed for impairment are not considered impaired during periods of “minimal delay” in payment (ninety days or less) provided eventual collection of all amounts due is expected.  The impairment of a loan is measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate, or the fair value of the collateral if repayment is expected to be provided solely by the collateral.  In appropriate circumstances, interest income on impaired loans may be recognized on a cash basis.

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Higher Risk Lending – Revenue Recognition

The Company has occasionally made higher risk acquisition, development, and construction (“ADC”) loans that entail higher risks than ADC loans made following normal underwriting practices (“higher risk loan transactions”). These higher risk loan transactions are currently made through the Company’s subsidiary, ECV. This activity is limited as to individual transaction amount and total exposure amounts, based on capital levels, and is carefully monitored. The loans are carried on the balance sheet at amounts outstanding and meet the loan classification requirements of the Accounting Standard Executive Committee (“AcSEC”) guidance reprinted from the CPA Letter, Special Supplement, dated February 10, 1986 (also referred to as Exhibit 1 to AcSEC Practice Bulletin No. 1). Additional interest earned on these higher risk loan transactions (as defined in the individual loan agreements) is recognized as realized under the provisions contained in AcSEC’s guidance reprinted from the CPA Letter, Special Supplement, dated February 10, 1986 (also referred to as Exhibit 1 to AcSEC Practice Bulletin No.1) and Staff Accounting Bulletin No. 101 (Revenue Recognition in Financial Statements). Certain additional interest is included as a component of noninterest income.  ECV had seven higher risk lending transactions outstanding as of September 30, 2015, as compared to four higher risk lending transactions outstanding as of December 31, 2014, amounting to $11.5 million and $6.2 million, respectively.

Allowance for Credit Losses

The allowance for credit losses represents an amount which, in management’s judgment, is adequate to absorb probable losses on loans and other extensions of credit that may become uncollectible. The adequacy of the allowance for credit losses is determined through careful and continuous review and evaluation of the loan portfolio and involves the balancing of a number of factors to establish a prudent level of allowance. Among the factors considered in evaluating the adequacy of the allowance for credit losses are lending risks associated with growth and entry into new markets, loss allocations for specific credits, the level of the allowance to nonperforming loans, historical loss experience, economic conditions, portfolio trends and credit concentrations, changes in the size and character of the loan portfolio, and management’s judgment with respect to current and expected economic conditions and their impact on the existing loan portfolio. Allowances for impaired loans are generally determined based on collateral values. Loans or any portion thereof deemed uncollectible are charged against the allowance, while recoveries are credited to the allowance. Management adjusts the level of the allowance through the provision for credit losses, which is recorded as a current period operating expense. The allowance for credit losses consists of allocated and unallocated components.

The components of the allowance for credit losses represent an estimation done pursuant to ASC Topic 450, “Contingencies,” or ASC Topic 310, “Receivables.” Specific allowances are established in cases where management has identified significant conditions or circumstances related to a specific credit that management believes indicate the probability that a loss may be incurred. For potential problem credits for which specific allowance amounts have not been determined, the Company establishes allowances according to the application of credit risk factors. These factors are set by management and approved by the appropriate Board committee to reflect its assessment of the relative level of risk inherent in each risk grade. A third component of the allowance computation, termed a nonspecific or environmental factors allowance, is based upon management’s evaluation of various environmental conditions that are not directly measured in the determination of either the specific allowance or formula allowance. Such conditions include general economic and business conditions affecting key lending areas, credit quality trends (including trends in delinquencies and nonperforming loans expected to result from existing conditions), loan volumes and concentrations, specific industry conditions within portfolio categories, recent loss experience in particular loan categories, duration of the current business cycle, bank regulatory examination results, findings of outside review consultants, and management’s judgment with respect to various other conditions including credit administration and management and the quality of risk identification systems. Executive management reviews these environmental conditions quarterly, and documents the rationale for all changes.

Management believes that the allowance for credit losses is adequate; however, determination of the allowance is inherently subjective and requires significant estimates. While management uses available information to recognize losses on loans, future additions to the allowance may be necessary based on changes in economic conditions. Evaluation of the potential effects of these factors on estimated losses involves a high degree of uncertainty, including the strength and timing of economic cycles and concerns over the effects of a prolonged economic downturn in the current cycle. In addition, various regulatory agencies, as an integral part of their examination process, and independent consultants engaged by the Bank, periodically review the Bank’s loan portfolio and allowance for credit losses. Such review may result in recognition of additions to the allowance based on their judgments of information available to them at the time of their examination.

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Premises and Equipment

Premises and equipment are stated at cost less accumulated depreciation and amortization computed using the straight-line method for financial reporting purposes. Premises and equipment are depreciated over the useful lives of the assets, which generally range from five to seven years for furniture, fixtures and equipment, to three to five years for computer software and hardware, and to ten to forty years for buildings and building improvements. Leasehold improvements are amortized over the terms of the respective leases, which may include renewal options where management has the positive intent to exercise such options, or the estimated useful lives of the improvements, whichever is shorter. The costs of major renewals and betterments are capitalized, while the costs of ordinary maintenance and repairs are expensed as incurred. These costs are included as a component of premises and equipment expenses on the consolidated statements of operations.

Other Real Estate Owned (OREO)

Assets acquired through loan foreclosure are held for sale and are recorded at fair value less estimated selling costs when acquired, establishing a new cost basis. The new basis is supported by appraisals that are no more than twelve months old. Costs after acquisition are generally expensed. If the fair value of the asset declines, a write-down is recorded through noninterest expense. The valuation of foreclosed assets is subjective in nature and may be adjusted in the future because of changes in market conditions or appraised values.

Goodwill and Other Intangible Assets

Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. Other intangible assets represent purchased assets that lack physical substance but can be distinguished from goodwill because of contractual or other legal rights. Intangible assets that have finite lives, such as core deposit intangibles, are amortized over their estimated useful lives and subject to periodic impairment testing. Intangible assets (other than goodwill) are amortized to expense using accelerated or straight-line methods over their respective estimated useful lives.

Goodwill and other intangibles are subject to impairment testing at the reporting unit level, which must be conducted at least annually. The Company performs impairment testing during the fourth quarter of each year or when events or changes in circumstances indicate the assets might be impaired.

The Company performs a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing updated qualitative factors, the Company determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, it does not have to perform the two-step goodwill impairment test. Determining the fair value of a reporting unit under the first step of the goodwill impairment test and determining the fair value of individual assets and liabilities of a reporting unit under the second step of the goodwill impairment test are judgmental and often involve the use of significant estimates and assumptions. Similarly, estimates and assumptions are used in determining the fair value of other intangible assets. Estimates of fair value are primarily determined using discounted cash flows, market comparisons and recent transactions. These approaches use significant estimates and assumptions including projected future cash flows, discount rates reflecting the market rate of return, projected growth rates and determination and evaluation of appropriate market comparables. Based on the results of quantitative assessments of all reporting units, the Company concluded that no impairment existed at December 31, 2014. However, future events could cause the Company to conclude that goodwill or other intangibles have become impaired, which would result in recording an impairment loss. Any resulting impairment loss could have a material adverse impact on the Company’s financial condition and results of operations.

Interest Rate Swap Derivatives

The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of its assets and liabilities and through the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. With the exception of forward commitment contracts discussed above under Loans Held for Sale, the Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to certain variable rate deposits.

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At the inception of a derivative contract, the Company designates the derivative as one of three types based on the Company’s intentions and belief as to likely effectiveness as a hedge. These three types are (1) a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment (“fair value hedge”), (2) a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (“cash flow hedge”), or (3) an instrument with no hedging designation (“stand-alone derivative”). The Company has no fair value hedges or stand-alone derivatives, only cash flow hedges. For a cash flow hedge, the gain or loss on the derivative is reported in other comprehensive income (a Consolidated Balance Sheet component of Shareholders’ Equity) and is reclassified into earnings in the same period(s) during which the hedged transaction affects earnings (i.e. the period when cash flows are exchanged between counterparties). For both fair value and cash flow hedges, changes in the fair value of derivatives that are not highly effective in hedging the changes in fair value or expected cash flows of the hedged item are recognized immediately in current earnings. Changes in the fair value of derivatives that do not qualify for hedge accounting are reported currently in earnings, as noninterest income.

Net cash settlements on derivatives that qualify for hedge accounting are recorded in interest income or interest expense, based on the item being hedged. Net cash settlements on derivatives that do not qualify for hedge accounting are reported in noninterest income. Cash flows on hedges are classified in the cash flow statement the same as the cash flows of the items being hedged.

The Company formally documents the relationship between derivatives and hedged items, as well as the risk-management objective and the strategy for undertaking hedge transactions at the inception of the hedging relationship. This documentation includes linking fair value or cash flow hedges to specific assets and liabilities on the balance sheet or to specific firm commitments or forecasted transactions. The Company also formally assesses, both at the hedge’s inception and on an ongoing basis, whether the derivative instruments that are used are highly effective in offsetting changes in fair values or cash flows of the hedged items. The Company discontinues hedge accounting when it determines that the derivative is no longer effective in offsetting changes in the fair value or cash flows of the hedged item, the derivative is settled or terminates, a hedged forecasted transaction is no longer probable, a hedged firm commitment is no longer firm, or treatment of the derivative as a hedge is no longer appropriate or intended.

When hedge accounting is discontinued, subsequent changes in fair value of the derivative are recorded as noninterest income or expense. When a fair value hedge is discontinued, the hedged asset or liability is no longer adjusted for changes in fair value and the existing basis adjustment is amortized or accreted over the remaining life of the asset or liability. When a cash flow hedge is discontinued but the hedged cash flows or forecasted transactions are still expected to occur, gains or losses that were accumulated in other comprehensive income are amortized into earnings over the same periods which the hedged transactions will affect earnings.

Customer Repurchase Agreements

The Company enters into agreements under which it sells securities subject to an obligation to repurchase the same securities. Under these arrangements, the Company may transfer legal control over the assets but still retain effective control through an agreement that both entitles and obligates the Company to repurchase the assets. As a result, securities sold under agreements to repurchase are accounted for as collateralized financing arrangements and not as a sale and subsequent repurchase of securities. The agreements are entered into primarily as accommodations for large commercial deposit customers. The obligation to repurchase the securities is reflected as a liability in the Company’s consolidated balance of sheets, while the securities underlying the securities sold under agreements to repurchase remain in the respective assets accounts and are delivered to and held as collateral by third party trustees.

Marketing and Advertising

Marketing and advertising costs are generally expensed as incurred.

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Income Taxes

The Company employs the liability method of accounting for income taxes as required by ASC Topic 740, “Income Taxes.” Under the liability method, deferred tax assets and liabilities are determined based on differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities (i.e., temporary timing differences) and are measured at the enacted rates that will be in effect when these differences reverse. The Company utilizes statutory requirements for its income tax accounting, and avoids risks associated with potentially problematic tax positions that may incur challenge upon audit, where an adverse outcome is more likely than not. Therefore, no provisions are made for either uncertain tax positions nor accompanying potential tax penalties and interest for underpayments of income taxes in the Company’s tax reserves. In accordance with ASC Topic 740, the Company may establish a reserve against deferred tax assets in those cases where realization is less than certain, although no such reserves exist at September 30, 2015, December 31, 2014, or September 30, 2014.   

Transfer of Financial Assets

Transfers of financial assets are accounted for as sales, when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. In certain cases, the recourse to the Bank to repurchase assets may exist but is deemed immaterial based on the specific facts and circumstances.

Earnings per Common Share

Basic net income per common share is derived by dividing net income available to common shareholders by the weighted-average number of common shares outstanding during the period measured. Diluted earnings per common share is computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding during the period measured including the potential dilutive effects of common stock equivalents.

Stock-Based Compensation

In accordance with ASC Topic 718, “Compensation,” the Company records as compensation expense an amount equal to the amortization (over the remaining service period) of the fair value of option and restricted stock awards computed at the date of grant. Compensation expense on variable stock option grants (i.e. performance based grant) is recorded based on the probability of achievement of the goals underlying the performance grant. Refer to Note 9 for a description of stock-based compensation awards, activity and expense.

New Authoritative Accounting Guidance

ASU No. 2015-03, “Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.” The update simplifies the presentation of debt issuance costs by requiring that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of debt liability, consistent with debt discounts or premiums. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this update. This update will be effective for interim and annual periods beginning after December 15, 2015, and is to be applied retrospectively. The Company does not expect the guidance to have a material impact on its financial statements.

ASU 2015-16, “Business Combinations (Topic 805) – Simplifying the Accounting for Measurement-Period Adjustments.” ASU 2015-16 requires that adjustments to provisional amounts that are identified during the measurement period of a business combination be recognized in the reporting period in which the adjustment amounts are determined. Furthermore, the income statement effects of such adjustments, if any, must be calculated as if the accounting had been completed at the acquisition date. The portion of the amount recorded in current-period earnings that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. Under previous guidance, adjustments to provisional amounts identified during the measurement period are to be recognized retrospectively. ASU 2015-16 will be effective for the Company on January 1, 2016 and is not expected to have a significant impact on its financial statements.

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Note 2. Cash and Due from Banks

Regulation D of the Federal Reserve Act requires that banks maintain noninterest reserve balances with the Federal Reserve Bank based principally on the type and amount of their deposits. During 2015, the Bank maintained balances at the Federal Reserve sufficient to meet reserve requirements, as well as significant excess reserves. Late in 2008, the Federal Reserve in connection with the Emergency Economic Stabilization Act of 2008 began paying a nominal amount of interest on balances held, which interest on excess reserves was increased under provisions of the Dodd Frank Wall Street Reform and Consumer Protection Act passed in July 2010.

Additionally, the Bank maintains interest-bearing balances with the Federal Home Loan Bank of Atlanta and noninterest bearing balances with six domestic correspondent banks as compensation for services they provide to the Bank.

Note 3. Investment Securities Available-for-Sale

Amortized cost and estimated fair value of securities available-for-sale are summarized as follows:

			Gross		Gross		Estimated
September 30, 2015	Amortized		Unrealized		Unrealized		Fair
(dollars in thousands)	Cost		Gains		Losses		Value
U. S. Government agency securities	$	68,289	$	879	$	90	$	69,078
Residential mortgage backed securities		320,978		2,172		1,130		322,020
Municipal bonds		114,137		3,824		95		117,866
Corporate bonds		15,096		-		78		15,018
Other equity investments		307		37		-		344
	$	518,807	$	6,912	$	1,393	$	524,326

			Gross		Gross		Estimated
December 31, 2014	Amortized		Unrealized		Unrealized		Fair
(dollars in thousands)	Cost		Gains		Losses		Value
U. S. Government agency securities	$	29,434	$	500	$	40	$	29,894
Residential mortgage backed securities		241,120		1,716		2,516		240,320
Municipal bonds		106,983		4,850		121		111,712
Other equity investments		396		21		-		417
	$	377,933	$	7,087	$	2,677	$	382,343

In addition, at September 30, 2015, the Company held $16.9 million in equity securities in a combination of Federal Reserve Bank (“FRB”) and Federal Home Loan Bank (“FHLB”) stocks, which are required to be held for regulatory purposes, and which are not marketable.

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Gross unrealized losses and fair value by length of time that the individual available-for-sale securities have been in a continuous unrealized loss position are as follows:

	Less than				12 Months
	12 Months				or Greater				Total
	Estimated				Estimated				Estimated
September 30, 2015	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(dollars in thousands)	Value		Losses		Value		Losses		Value		Losses
U. S. Government agency securities	$	13,966	$	90	$	-	$	-	$	13,966	$	90
Residential mortgage backed securities		58,925		182		61,610		948		120,535		1,130
Municipal bonds		12,073		95		-		-		12,073		95
Corporate bonds		15,018		78		-		-		15,018		78
	$	99,982	$	445	$	61,610	$	948	$	161,592	$	1,393

	Less than				12 Months
	12 Months				or Greater				Total
	Estimated				Estimated				Estimated
December 31, 2014	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(dollars in thousands)	Value		Losses		Value		Losses		Value		Losses
U. S. Government agency securities	$	2,001	$	7	$	1,750	$	33	$	3,751	$	40
Residential mortgage backed securities		49,644		221		86,028		2,295		135,672		2,516
Municipal bonds		4,974		14		10,915		107		15,889		121
	$	56,619	$	242	$	98,693	$	2,435	$	155,312	$	2,677

The unrealized losses that exist are generally the result of changes in market interest rates and interest spread relationships since original purchases. The weighted average duration of debt securities, which comprise 99.9% of total investment securities, is relatively short at 3.7 years. If quoted prices are not available, fair value is measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss assumptions. The Company does not believe that the investment securities that were in an unrealized loss position as of September 30, 2015 represent an other-than-temporary impairment. The Company does not intend to sell the investments and it is more likely than not that the Company will not have to sell the securities before recovery of its amortized cost basis, which may be maturity. 

The amortized cost and estimated fair value of investments available-for-sale by contractual maturity are shown in the table 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.

	September 30, 2015				December 31, 2014
	Amortized		Estimated		Amortized		Estimated
(dollars in thousands)	Cost		Fair Value		Cost		Fair Value
U. S. Government agency securities maturing:
One year or less	$	44,981	$	45,138	$	2,998	$	3,051
After one year through five years		18,812		19,259		19,947		20,276
Five years through ten years		4,496		4,681		6,489		6,567
Residential mortgage backed securities		320,978		322,020		241,120		240,320
Municipal bonds maturing:
One year or less		4,978		5,024		2,410		2,438
After one year through five years		40,040		42,600		47,038		49,607
Five years through ten years		66,539		67,456		54,983		56,927
After ten years		2,580		2,786		2,552		2,740
Corporate bonds
After one year through five years		15,096		15,018		-		-
Other equity investments		307		344		396		417
	$	518,807	$	524,326	$	377,933	$	382,343

For the nine months ended September 30, 2015, gross realized gains on sales of investments securities were $2.5 million and gross realized losses on sales of investment securities were $294 thousand. For the nine months ended September 30, 2014, gross realized gains on sales of investment securities were $116 thousand and gross realized losses on sales of investment securities were $106 thousand.

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Proceeds from sales and calls of investment securities for the nine months ended September 30, 2015 were $65.8 million, and in 2014 were $17.5 million.

The carrying value of securities pledged as collateral for certain government deposits, securities sold under agreements to repurchase, and certain lines of credit with correspondent banks at September 30, 2015 was $450.5 million, which is well in excess of required amounts in order to operationally provide significant reserve amounts for new business. As of September 30, 2015 and December 31, 2014, there were no holdings of securities of any one issuer, other than the U.S. Government and U.S. Government agency securities, which exceeded ten percent of shareholders’ equity.

Note 4. Mortgage Banking Derivative

As part of its mortgage banking activities, the Bank enters into interest rate lock commitments, which are commitments to originate loans where the interest rate on the loan is determined prior to funding and the customers have locked into that interest rate. The Bank then commits the specific loan for sale with an investor if and only if settlement occurs (“best efforts”) or alternatively commits to deliver the locked loan in a binding (“mandatory”) delivery program with an investor. Certain loans under interest rate lock commitments are covered under forward sales contracts of mortgage backed securities (“MBS”) which provides a hedge against interest rate changes between the time the individual loan interest rate is locked with the borrower and the time the loan is sold to the investor. Forward sales contracts of MBS are recorded at fair value with changes in fair value recorded in noninterest income. Interest rate lock commitments and commitments to deliver loans to investors are considered derivatives. The market value of interest rate lock commitments and best efforts contracts are not readily ascertainable with precision because they are not actively traded in stand-alone markets. The Bank determines the fair value of interest rate lock commitments and delivery contracts by measuring the fair value of the underlying asset, which is impacted by current interest rates, taking into consideration the probability that the interest rate lock commitments will close or will be funded.

Certain additional risks arise from forward delivery contracts in that the counterparties to the contracts may not be able to meet the terms of the contracts. The Bank does not expect any counterparty to any MBS to fail to meet its obligation. Additional risks inherent in mandatory delivery programs include the risk that, if the Bank does not close the loans subject to interest rate risk lock commitments, it may have a mismatch in its hedged position which could negatively impact earnings.

The fair value of the derivatives is recorded as a freestanding asset or liability with the change in value being recognized in current earnings during the period of change.

At September 30, 2015 the Bank had derivative financial instruments with a notional value of $53.0 million related to its forward contracts. The net fair value of these derivative instruments at September 30, 2015 was $197 thousand, which is included in other assets and $245 thousand included in other liabilities. At September 30, 2014 the Bank had derivative financial instruments with a notional value of $30.7 million related to its forward contracts. The net fair value of these derivative instruments at September 30, 2014 were $34 thousand included in other assets and $18 thousand included in other liabilities.

Included in other noninterest income for the three and nine months ended September 30, 2015 was a net gain of $9 thousand and a net loss of $63 thousand, relating to derivative instruments. The amount included in other noninterest income for the three and nine months ended September 30, 2015 pertaining to its hedging activities was a loss of $327 thousand and $9 thousand, respectively. Included for the three and nine months ended September 30, 2014 there was a net loss of $194 thousand and a net gain of $47 thousand relating to derivative instruments. The amount included in other noninterest income for the three and nine months ended September 30, 2014 pertaining to its hedging activities was a net realized gain of $140 thousand and a net realized loss of $18 thousand.

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Note 5. Loans and Allowance for Credit Losses

The Bank makes loans to customers primarily in the Washington, DC metropolitan area and surrounding communities. A substantial portion of the Bank’s loan portfolio consists of loans to businesses secured by real estate and other business assets.

Loans, net of unamortized net deferred fees, at September 30, 2015, December 31, 2014, and September 30, 2014 are summarized by type as follows:

	September 30, 2015						December 31, 2014						September 30, 2014
(dollars in thousands)	Amount			%			Amount			%			Amount			%
Commercial	$	1,007,659			21	%	$	916,226			21	%	$	798,489			23	%
Income producing - commercial real estate		2,022,950			42	%		1,703,172			40	%		1,382,839			41	%
Owner occupied - commercial real estate		489,657			10	%		461,581			11	%		337,422			10	%
Real estate mortgage - residential		147,720			3	%		148,018			3	%		126,263			4	%
Construction - commercial and residential		927,265			20	%		793,432			18	%		634,736			18	%
Construction - C&I (owner occupied)		60,487			1	%		58,032			1	%		41,846			1	%
Home equity		115,346			3	%		122,536			3	%		107,291			3	%
Other consumer		5,881			-			109,402			3	%		3,662			-
Total loans		4,776,965			100	%		4,312,399			100	%		3,432,548			100	%
Less: Allowance for Credit Losses		(50,320	)					(46,075	)					(44,954	)
Net loans	$	4,726,645					$	4,266,324					$	3,387,594

Unamortized net deferred fees amounted to $17.4 million, $15.6 million, and $15.2 million at September 30, 2015, December 31, 2014, and September 30, 2014, respectively.

As of September 30, 2015 and December 31, 2014, the Bank serviced $68.9 million and $67.9 million, respectively, of SBA loans which are not reflected as loan balances on the consolidated balance sheets.

Loan Origination / Risk Management

The Company’s goal is to mitigate risks in the event of unforeseen threats to the loan portfolio as a result of economic downturn or other negative influences. Plans for mitigating inherent risks in managing loan assets include: carefully enforcing loan policies and procedures, evaluating each borrower’s business plan during the underwriting process and throughout the loan term, identifying and monitoring primary and alternative sources for loan repayment, and obtaining collateral to mitigate economic loss in the event of liquidation. Specific loan reserves are established based upon credit and/or collateral risks on an individual loan basis. A risk rating system is employed to proactively estimate loss exposure and provide a measuring system for setting general and specific reserve allocations.

The composition of the Company’s loan portfolio is heavily weighted toward commercial real estate, both owner occupied and investment real estate. The combination of owner occupied commercial real estate loans and owner occupied commercial real estate construction loans represents 11% of the loan portfolio. At September 30, 2015, the combination of commercial real estate loans and real estate construction loans represents approximately 73% of the loan portfolio. When owner occupied commercial real estate loans and owner occupied commercial construction loans are excluded, the percentage of commercial real estate and construction loans to total loans decreases to 62%. These loans are underwritten to mitigate lending risks typical of this type of loan such as declines in real estate values, changes in borrower cash flow and general economic conditions. The Bank’s policy requires a maximum loan to value of 80% and minimum cash flow debt service coverage of 1.15 to 1.00. Personal guarantees are generally required, but may be limited.  In making real estate commercial mortgage loans, the Bank generally requires that interest rates adjust not less frequently than five years.

The Company is also an active traditional commercial lender providing loans for a variety of purposes, including working capital, equipment and account receivable financing. This loan category represents approximately 21% of the loan portfolio at September 30, 2015 and was generally variable or adjustable rate. Commercial loans meet reasonable underwriting standards, including appropriate collateral and cash flow necessary to support debt service. Personal guarantees are generally required, but may be limited. SBA loans represent 1% of the commercial loan category of loans. In originating SBA loans, the Company assumes the risk of non-payment on the unguaranteed portion of the credit. The Company generally sells the guaranteed portion of the loan generating noninterest income from the gains on sale, as well as servicing income on the portion participated. SBA loans are subject to the same cash flow analyses as other commercial loans. SBA loans are subject to a maximum loan size established by the SBA.

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Approximately 3% of the loan portfolio at September 30, 2015 consists of home equity loans and lines of credit and other consumer loans. These credits, while making up a smaller portion of the loan portfolio, demand the same emphasis on underwriting and credit evaluation as other types of loans advanced by the Bank.

Approximately 3% of the loan portfolio consists of residential mortgage loans. The repricing duration of these loans was 26 months.

Loans are secured primarily by duly recorded first deeds of trust. In some cases, the Bank may accept a recorded junior trust position. In general, borrowers will have a proven ability to build, lease, manage and/or sell a commercial or residential project and demonstrate satisfactory financial condition. Additionally, an equity contribution toward the project is customarily required.

Construction loans require that the financial condition and experience of the general contractor and major subcontractors be satisfactory to the Bank. Guaranteed, fixed price contracts are required whenever appropriate, along with payment and performance bonds or completion bonds for larger scale projects.

Loans intended for residential land acquisition, lot development and construction are made on the premise that the land: 1) is or will be developed for building sites for residential structures, and; 2) will ultimately be utilized for construction or improvement of residential zoned real properties, including the creation of housing. Residential development and construction loans will finance projects such as single family subdivisions, planned unit developments, townhouses, and condominiums. Residential land acquisition, development and construction loans generally are underwritten with a maximum term of 36 months, including extensions approved at origination.

Commercial land acquisition and construction loans are secured by real property where loan funds will be used to acquire land and to construct or improve appropriately zoned real property for the creation of income producing or owner user commercial properties. Borrowers are generally required to put equity into each project at levels determined by the appropriate Loan Committee. Commercial land acquisition and construction loans generally are underwritten with a maximum term of 24 months.

Substantially all construction draw requests must be presented in writing on American Institute of Architects documents and certified either by the contractor, the borrower and/or the borrower’s architect. Each draw request shall also include the borrower’s soft cost breakdown certified by the borrower or their Chief Financial Officer. Prior to an advance, the Bank or its contractor inspects the project to determine that the work has been completed, to justify the draw requisition.

Commercial permanent loans are secured by improved real property which is generating income in the normal course of operation. Debt service coverage, assuming stabilized occupancy, must be satisfactory to support a permanent loan. The debt service coverage ratio is ordinarily at least 1.15 to 1.00. As part of the underwriting process, debt service coverage ratios are stress tested assuming a 200 basis point increase in interest rates from their current levels.

Commercial permanent loans generally are underwritten with a term not greater than 10 years or the remaining useful life of the property, whichever is lower. The preferred term is between 5 to 7 years, with amortization to a maximum of 25 years.

The Company’s loan portfolio includes ADC real estate loans including both investment and owner occupied projects. ADC loans amounted to $987.8 million at September 30, 2015. A portion of the ADC portfolio, both speculative and non-speculative, includes loan funded interest reserves at origination. ADC loans containing loan funded interest reserves represent approximately 44% of the outstanding ADC loan portfolio at September 30, 2015. The decision to establish a loan-funded interest reserve is made upon origination of the ADC loan and is based upon a number of factors considered during underwriting of the credit including: (i) the feasibility of the project; (ii) the experience of the sponsor; (iii) the creditworthiness of the borrower and guarantors; (iv) borrower equity contribution; and (v) the level of collateral protection. When appropriate, an interest reserve provides an effective means of addressing the cash flow characteristics of a properly underwritten ADC loan. The Company does not significantly utilize interest reserves in other loan products. The Company recognizes that one of the risks inherent in the use of interest reserves is the potential masking of underlying problems with the project and/or the borrower’s ability to repay the loan. In order to mitigate this inherent risk, the Company employs a series of reporting and monitoring mechanisms on all ADC loans, whether or not an interest reserve is provided, including: (i) construction and development timelines which are monitored on an ongoing basis which track the progress of a given project to the timeline projected at origination; (ii) a construction loan administration department independent of the lending function; (iii) third party independent construction loan inspection reports; (iv) monthly interest reserve monitoring reports detailing the balance of the interest reserves approved at origination and the days of interest carry represented by the reserve balances as compared to the then current anticipated time to completion and/or sale of speculative projects; and (v) quarterly commercial real estate construction meetings among senior Company management, which includes monitoring of current and projected real estate market conditions. If a project has not performed as expected, it is not the customary practice of the Company to increase loan funded interest reserves.

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From time to time the Company may make loans for its own portfolio or through its higher risk loan affiliate, ECV. Such loans, which are made to finance projects (which may also be financed at the Bank level), may have higher risk characteristics than loans made by the Bank, such as lower priority interests and/or higher loan to value ratios. The Company seeks an overall financial return on these transactions commensurate with the risks and structure of each individual loan. Certain transactions may bear current interest at a rate with a significant premium to normal market rates. Other loan transactions may carry a standard rate of current interest, but also earn additional interest based on a percentage of the profits of the underlying project or a fixed accrued rate of interest.

On July 24, 2015, the Company sold substantially all of the indirect consumer loan portfolio acquired in the Merger for $79 million. The fair value adjustment on the sale of $879 thousand was recorded as an adjustment to the intangibles established in the Merger.

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The following tables detail activity in the allowance for credit losses by portfolio segment for the three and nine months ended September 30, 2015 and 2014. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.

				Income Producing			Owner Occupied			Real Estate			Construction Commercial
				Commercial			Commercial			Mortgage			and			Home			Other
(dollars in thousands)	Commercial			Real Estate			Real Estate			Residential			Residential			Equity			Consumer			Total
Three months ended September 30, 2015
Allowance for credit losses:
Balance at beginning of period	$	12,911		$	12,411		$	3,113		$	1,082		$	17,633		$	1,496		$	275		$	48,921
Loans charged-off		(1,388	)		(254	)		-			-			-			(225	)		(95	)		(1,962	)
Recoveries of loans previously charged-off		60			8			-			2			10			1			18			99
Net loans charged-off		(1,328	)		(246	)		-			2			10			(224	)		(77	)		(1,863	)
Provision for credit losses		57			1,550			(13	)		(18	)		1,281			334			71			3,262
Ending balance	$	11,640		$	13,715		$	3,100		$	1,066		$	18,924		$	1,606		$	269		$	50,320
Nine months ended September 30, 2015
Allowance for credit losses:
Balance at beginning of period	$	13,222		$	11,442		$	2,954		$	1,259		$	15,625		$	1,469		$	104		$	46,075
Loans charged-off		(4,693	)		(651	)		-			-			-			(644	)		(182	)		(6,170	)
Recoveries of loans previously charged-off		135			26			2			5			114			5			85			372
Net loans charged-off		(4,558	)		(625	)		2			5			114			(639	)		(97	)		(5,798	)
Provision for credit losses		2,976			2,898			144			(198	)		3,185			776			262			10,043
Ending balance	$	11,640		$	13,715		$	3,100		$	1,066		$	18,924		$	1,606		$	269		$	50,320
As of September 30, 2015
Allowance for credit losses:
Individually evaluated for impairment	$	2,312		$	827		$	400		$	-		$	350		$	338		$	-		$	4,227
Collectively evaluated for impairment		9,328			12,888			2,700			1,066			18,574			1,268			269			46,093
Ending balance	$	11,640		$	13,715		$	3,100		$	1,066		$	18,924		$	1,606		$	269		$	50,320
Three months ended September 30, 2014
Allowance for credit losses:
Balance at beginning of period	$	11,413		$	10,745		$	3,273		$	958		$	15,487		$	1,331		$	345		$	43,552
Loans charged-off		(317	)		(22	)		-			(48	)		(620	)		(230	)		-			(1,237	)
Recoveries of loans previously charged-off		519			-			-			-			6			2			1			528
Net loans charged-off		202			(22	)		-			(48	)		(614	)		(228	)		1			(709	)
Provision for credit losses		1,558			478			42			70			(237	)		259			(59	)		2,111
Ending balance	$	13,173		$	11,201		$	3,315		$	980		$	14,636		$	1,362		$	287		$	44,954
Nine months ended September 30, 2014
Allowance for credit losses:
Balance at beginning of period	$	9,780		$	10,359		$	3,899		$	944		$	13,934		$	1,871		$	134		$	40,921
Loans charged-off		(1,968	)		(22	)		(35	)		(138	)		(1,426	)		(379	)		(84	)		(4,052	)
Recoveries of loans previously charged-off		802			4			7			-			77			8			8			906
Net loans charged-off		(1,166	)		(18	)		(28	)		(138	)		(1,349	)		(371	)		(76	)		(3,146	)
Provision for credit losses		4,559			860			(556	)		174			2,051			(138	)		229			7,179
Ending balance	$	13,173		$	11,201		$	3,315		$	980		$	14,636		$	1,362		$	287		$	44,954
As of September 30, 2014
Allowance for credit losses:
Individually evaluated for impairment	$	4,409		$	578		$	1,330		$	-		$	1,478		$	218		$	-		$	8,013
Collectively evaluated for impairment		8,764			10,623			1,985			980			13,158			1,144			287			36,941
Ending balance	$	13,173		$	11,201		$	3,315		$	980		$	14,636		$	1,362		$	287		$	44,954

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The Company’s recorded investments in loans as of September 30, 2015, December 31, 2014 and September 30, 2014 related to each balance in the allowance for loan losses by portfolio segment and disaggregated on the basis of the Company’s impairment methodology was as follows:

			Income Producing		Owner occupied		Real Estate		Construction Commercial
			Commercial		Commercial		Mortgage		and		Home		Other
(dollars in thousands)	Commercial		Real Estate		Real Estate		Residential		Residential		Equity		Consumer		Total
September 30, 2015
Recorded investment in loans:
Individually evaluated for impairment	$	12,869	$	6,877	$	1,790	$	-	$	17,644	$	661	$	72	$	39,913
Collectively evaluated for impairment		994,790		2,016,073		487,867		147,720		970,108		114,685		5,809		4,737,052
Ending balance	$	1,007,659	$	2,022,950	$	489,657	$	147,720	$	987,752	$	115,346	$	5,881	$	4,776,965
December 31, 2014
Recorded investment in loans:
Individually evaluated for impairment	$	17,612	$	5,109	$	6,891	$	-	$	14,241	$	1,398	$	59	$	45,310
Collectively evaluated for impairment		898,614		1,698,063		454,690		148,018		837,223		121,138		109,343		4,267,089
Ending balance	$	916,226	$	1,703,172	$	461,581	$	148,018	$	851,464	$	122,536	$	109,402	$	4,312,399
September 30, 2014
Recorded investment in loans:
Individually evaluated for impairment	$	17,785	$	2,710	$	5,054	$	-	$	17,479	$	745	$	-	$	43,773
Collectively evaluated for impairment		780,704		1,380,129		332,368		126,263		659,103		106,546		3,662		3,388,775
Ending balance	$	798,489	$	1,382,839	$	337,422	$	126,263	$	676,582	$	107,291	$	3,662	$	3,432,548

At September 30, 2015, nonperforming loans acquired have a carrying value of $1.8 million and an unpaid principal balance of $2.9 million and were evaluated separately in accordance with ASC Topic 310-30, “Loans and Debt Securities Acquired with Deteriorated Credit Quality.” The various impaired loans were recorded at estimated fair value with any excess being charged-off or treated as a non-accretable discount. Subsequent downward adjustments to the valuation of impaired loans acquired will result in additional loan loss provisions and related allowance for credit losses. Subsequent upward adjustments to the valuation of impaired loans acquired will result in accretable discount. No adjustments have been made to the fair value amounts of impaired loans subsequent to the allowable period of adjustment from the date of acquisition.

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Credit Quality Indicators

The Company uses several credit quality indicators to manage credit risk in an ongoing manner. The Company's primary credit quality indicators are to use an internal credit risk rating system that categorizes loans into pass, watch, special mention, or classified categories. 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. These are typically loans to businesses or individuals in the classes which comprise the commercial portfolio segment. Groups of loans that are underwritten and structured using standardized criteria and characteristics, such as statistical models (e.g., credit scoring or payment performance), are typically risk rated and monitored collectively. These are typically loans to individuals in the classes which comprise the consumer portfolio segment.

The following are the definitions of the Company's credit quality indicators:

Pass: Loans in all classes that comprise the commercial and consumer portfolio segments that are not adversely rated, are contractually current as to principal and interest, and are otherwise in compliance with the contractual terms of the loan agreement. Management believes that there is a low likelihood of loss related to those loans that are considered pass.

Watch: Loan paying as agreed with generally acceptable asset quality; however the obligor’s performance has not met expectations. Balance sheet and/or income statement has shown deterioration to the point that the obligor could not sustain any further setbacks. Credit is expected to be strengthened through improved obligor performance and/or additional collateral within a reasonable period of time.

Special Mention: Loans in the classes that comprise the commercial portfolio segment that have potential weaknesses that deserve management's close attention. If not addressed, these potential weaknesses may result in deterioration of the repayment prospects for the loan. The special mention credit quality indicator is not used for classes of loans that comprise the consumer portfolio segment. Management believes that there is a moderate likelihood of some loss related to those loans that are considered special mention.

Classified:

Classified (a) Substandard - Loans inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the company will sustain some loss if the deficiencies are not corrected. Loss potential, while existing in the aggregate amount of substandard loans, does not have to exist in individual loans classified substandard.

Classified (b) Doubtful - Loans that have all the weaknesses inherent in a loan classified substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The possibility of loss is extremely high, but because of certain important and reasonably specific pending factors, which may work to the advantage and strengthening of the assets, its classification as an estimated loss is deferred until its more exact status may be determined.

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The Company's credit quality indicators are updated generally on a quarterly basis, but no less frequently than annually. The following table presents by class and by credit quality indicator, the recorded investment in the Company's loans and leases as of September 30, 2015, December 31, 2014 and September 30, 2014.

			Watch and						Total
(dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Loans
September 30, 2015
Commercial	$	977,165	$	17,625	$	12,869	$	-	$	1,007,659
Income producing - commercial real estate		1,999,509		16,564		6,877		-		2,022,950
Owner occupied - commercial real estate		479,843		8,024		1,790		-		489,657
Real estate mortgage – residential		146,992		728		-		-		147,720
Construction - commercial and residential		964,854		5,254		17,644		-		987,752
Home equity		112,978		1,707		661		-		115,346
Other consumer		5,804		5		72		-		5,881
Total	$	4,687,145	$	49,907	$	39,913	$	-	$	4,776,965
December 31, 2014
Commercial	$	875,102	$	23,512	$	17,612	$	-	$	916,226
Income producing - commercial real estate		1,679,101		18,962		5,109		-		1,703,172
Owner occupied - commercial real estate		445,013		9,677		6,891		-		461,581
Real estate mortgage – residential		147,262		756		-		-		148,018
Construction - commercial and residential		827,503		9,720		14,241		-		851,464
Home equity		119,420		1,718		1,398		-		122,536
Other consumer		109,343		-		59		-		109,402
Total	$	4,202,744	$	64,345	$	45,310	$	-	$	4,312,399
September 30, 2014
Commercial	$	761,502	$	19,202	$	17,785	$	-	$	798,489
Investment - commercial real estate		1,362,060		18,069		2,710		-		1,382,839
Owner occupied - commercial real estate		320,960		11,408		5,054		-		337,422
Real estate mortgage – residential		125,363		900		-		-		126,263
Construction - commercial and residential		650,679		8,424		17,479		-		676,582
Home equity		104,601		1,945		745		-		107,291
Other consumer		3,662		-		-		-		3,662
Total	$	3,328,827	$	59,948	$	43,773	$	-	$	3,432,548

Nonaccrual and Past Due Loans

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Loans are placed on nonaccrual status when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provisions. Loans may be placed on nonaccrual status regardless of whether or not such loans are considered past due. When interest accrual is discontinued, all unpaid accrued interest is reversed. Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

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The following table presents, by class of loan, information related to nonaccrual loans as of the periods ended September 30, 2015, December 31, 2014 and September 30, 2014.

(dollars in thousands)	September 30, 2015		December 31, 2014		September 30, 2014
Commercial	$	4,828	$	12,975	$	15,431
Income producing - commercial real estate		6,721		2,645		2,553
Owner occupied - commercial real estate		1,281		1,324		3,502
Real estate mortgage - residential		333		346		350
Construction - commercial and residential		571		3,697		6,919
Home equity		661		1,398		588
Other consumer		72		58		-
Total nonaccrual loans (1)(2)	$	14,467	$	22,443	$	29,343

(1) Excludes troubled debt restructurings (“TDRs”) that were performing under their restructured terms totaling $15.2 million at September 30, 2015, $13.5 million at December 31, 2014 and $7.9 million at September 30, 2014.

(2) Gross interest income of $822 thousand would have been recorded for the nine months ended September 30, 2015 if nonaccrual loans shown above had been current and in accordance with their original terms, while interest actually recorded on such loans was $127 thousand. See Note 1 to the consolidated financial statements for a description of the Company’s policy for placing loans on nonaccrual status.

The following table presents, by class of loan, an aging analysis and the recorded investments in loans past due as of September 30, 2015 and December 31, 2014. 

	Loans		Loans		Loans						Total Recorded
	30-59 Days		60-89 Days		90 Days or		Total Past		Current		Investment in
(dollars in thousands)	Past Due		Past Due		More Past Due		Due Loans		Loans		Loans
September 30, 2015
Commercial	$	731	$	2,537	$	4,828	$	8,096	$	999,563	$	1,007,659
Income producing - commercial real estate		-		5,058		6,721		11,779		2,011,171		2,022,950
Owner occupied - commercial real estate		319		-		1,281		1,600		488,057		489,657
Real estate mortgage – residential		-		-		333		333		147,387		147,720
Construction - commercial and residential		157		5,037		571		5,765		981,987		987,752
Home equity		173		641		661		1,475		113,871		115,346
Other consumer		54		8		72		134		5,747		5,881
Total	$	1,434	$	13,281	$	14,467	$	29,182	$	4,747,783	$	4,776,965
December 31, 2014
Commercial	$	1,505	$	4,032	$	12,975	$	18,512	$	897,714	$	916,226
Income producing - commercial real estate		1,825		5,376		2,645		9,846		1,693,326		1,703,172
Owner occupied - commercial real estate		1,089		214		1,324		2,627		458,954		461,581
Real estate mortgage – residential		-		-		346		346		147,672		148,018
Construction - commercial and residential		-		-		3,697		3,697		847,767		851,464
Home equity		-		1,365		1,398		2,763		119,773		122,536
Other consumer		284		81		58		423		108,979		109,402
Total	$	4,703	$	11,068	$	22,443	$	38,214	$	4,274,185	$	4,312,399

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Impaired Loans

Loans are considered impaired when, based on current information and events, it is probable the Company will be unable to collect all amounts due in accordance with the original contractual terms of the loan agreement, including scheduled principal and interest payments. Impairment is evaluated in total for smaller-balance loans of a similar nature and on an individual loan basis for other loans. If a loan is impaired, a specific valuation allowance is allocated, if necessary, so that the loan is reported net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral. Interest payments on impaired loans are typically applied to principal unless collectability of the principal amount is reasonably assured, in which case interest is recognized on a cash basis. Impaired loans, or portions thereof, are charged-off when deemed uncollectible.

The following table presents, by class of loan, information related to impaired loans for the periods ended September 30, 2015, December 31, 2014 and September 30, 2014.

	Unpaid Contractual		Recorded Investment		Recorded Investment		Total				Average Recorded Investment				Interest Income Recognized
	Principal		With No		With		Recorded		Related		Quarter		Year		Quarter			Year
(dollars in thousands)	Balance		Allowance		Allowance		Investment		Allowance		To Date		To Date		To Date			To Date
September 30, 2015
Commercial	$	9,444	$	2,663	$	3,337	$	6,000	$	2,312	$	7,978	$	10,047	$	39		$	48
Income producing - commercial real estate		15,925		9,215		6,017		15,232		827		12,542		11,388		188			259
Owner occupied - commercial real estate		1,790		973		817		1,790		400		1,811		1,844		-			-
Real estate mortgage – residential		333		333		-		333		-		336		340		-			-
Construction - commercial and residential		5,608		5,037		571		5,608		350		5,625		7,176		100			298
Home equity		661		116		545		661		338		774		959		-			-
Other consumer		72		72		-		72		-		45		40		1			2
Total	$	33,833	$	18,409	$	11,287	$	29,696	$	4,227	$	29,111	$	31,794	$	328		$	607
December 31, 2014
Commercial	$	14,075	$	1,603	$	11,372	$	12,975	$	5,334	$	14,203	$	13,681	$	20		$	251
Income producing - commercial real estate		10,869		8,952		1,542		10,494		751		8,202		7,021		196			203
Owner occupied - commercial real estate		1,889		1,038		851		1,889		577		2,696		3,986		-			6
Real estate mortgage – residential		346		346		-		346		-		348		529		-			-
Construction - commercial and residential		8,785		8,176		609		8,785		927		10,113		10,967		436			1,147
Home equity		1,398		339		1,059		1,398		430		993		747		32			36
Other consumer		58		-		58		58		45		29		30		7			7
Total	$	37,420	$	20,454	$	15,491	$	35,945	$	8,064	$	36,584	$	36,961	$	691		$	1,650
September 30, 2014
Commercial	$	16,531	$	950	$	14,481	$	15,431	$	4,409	$	12,051	$	12,132	$	228		$	231
Investment - commercial real estate		6,284		4,839		1,070		5,909		578		5,975		5,873		(71	)		7
Owner occupied - commercial		3,502		391		3,111		3,502		1,330		3,366		4,877		6			6
Real estate mortgage – residential		350		350		-		350		-		500		665		-			-
Construction - commercial and residential		11,931		9,785		1,655		11,440		1,478		11,429		12,004		159			711
Home equity		588		125		463		588		218		496		553		4			4
Other consumer		-		-		-		-		-		-		33		-			-
Total	$	39,186	$	16,440	$	20,780	$	37,220	$	8,013	$	33,817	$	36,137	$	326		$	959

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Modifications

A modification of a loan constitutes a troubled debt restructuring (“TDR”) when a borrower is experiencing financial difficulty and the modification constitutes a concession. The Company offers various types of concessions when modifying a loan. Commercial and industrial loans modified in a TDR often involve temporary interest-only payments, term extensions, and converting revolving credit lines to term loans. Additional collateral, a co-borrower, or a guarantor is often requested. Commercial mortgage and construction loans modified in a TDR often involve reducing the interest rate for the remaining term of the loan, extending the maturity date at an interest rate lower than the current market rate for new debt with similar risk, or substituting or adding a new borrower or guarantor. Construction loans modified in a TDR may also involve extending the interest-only payment period.

Loans modified in a TDR for the Company may have the financial effect of increasing the specific allowance associated with the loan. An allowance for impaired consumer and commercial loans that have been modified in a TDR is measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s observable market price, or the estimated fair value of the collateral, less any selling costs, if the loan is collateral dependent. Management exercises significant judgment in developing these estimates.

The following table presents by class, the recorded investment of loans modified in TDRs held by the Company during the periods ended September 30, 2015 and December 31, 2014.

	Number of		TDRs Performing		TDRs Not Performing		Total
(dollars in thousands)	Contracts		to Modified Terms		to Modified Terms		TDRs
September 30, 2015
Commercial		4	$	1,172	$	215	$	1,387
Income producing - commercial real estate		4		8,512		-		8,512
Owner occupied - commercial real estate		1		509		-		509
Construction - commercial and residential		1		5,037		-		5,037
Total		10	$	15,230	$	215	$	15,445
December 31, 2014
Commercial		1	$	-	$	227	$	227
Income producing - commercial real estate		3		7,849		-		7,849
Owner occupied - commercial real estate		1		565		-		565
Construction - commercial and residential		1		5,088		-		5,088
Total		6	$	13,502	$	227	$	13,729

During the nine months of 2015, there were no defaults on restructured loans, as compared to the nine months of 2014, which had one default on a $2.1 million restructured loan. A default is considered to have occurred once the TDR is past due 90 days or more or it has been placed on nonaccrual.  There were no nonperforming TDRs reclassified to nonperforming loans during the nine months ended September 30, 2015. There was one nonperforming TDR totaling $2.1 million reclassified to nonperforming loans during the nine months ended September 30, 2014. Commercial and consumer loans modified in a TDR are closely monitored for delinquency as an early indicator of possible future default. If loans modified in a TDR subsequently default, the Company evaluates the loan for possible further impairment. The allowance may be increased, adjustments may be made in the allocation of the allowance, or partial charge-offs may be taken to further write-down the carrying value of the loan. There were three loans modified in a TDR during the three months ended September 30, 2015. During the nine months ended September 30, 2015, there were a total of four loans modified in a TDR. There was one loan modified in a TDR during the three and nine months ended September 30, 2014.

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Note 6. Interest Rate Swap Derivatives

The Company uses interest rate swap agreements to assist in its interest rate risk management. The notional amounts of the interest rate swaps do not represent amounts exchanged by the counterparties, but rather, the notional amount is used to determine, along with other terms of the derivative, the amounts to be exchanged between the counterparties.

The Company’s objectives in using interest rate derivatives are to add stability to interest income and expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company has entered into interest rate swaps as part of its interest rate risk management strategy. These interest rate swaps are designated as cash flow hedges and involve the receipt of variable rate amounts from counterparty in exchange for the Company making fixed payments. As of September 30, 2015, the Company had three forward starting interest rate swap transactions outstanding that had a notional amount of $250 million associated with the Company’s variable rate deposits.

For derivatives designated as cash flow hedges, the effective portion of changes in the fair value of the derivative is initially reported in other comprehensive income (outside of earnings), net of tax, and subsequently reclassified to earnings when the hedged transaction affects earnings, and the ineffective portion of changes in the fair value of the derivative is recognized directly in earnings. The Company assesses the effectiveness of each hedging relationship by comparing the changes in cash flows of the derivative hedging instrument with the changes in cash flows of the designated hedged transactions. The Company did not recognize any hedge ineffectiveness in earnings during the period ended September 30, 2015.

The Company is hedging its exposure to the variability in future cash flows for forecasted transactions over a maximum period of ten months (excluding forecasted transactions related to the payment of variable interest on existing financial instruments) and as such existing hedges are deemed forward starting swaps and no net settlements of cash flows is occurring.

Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest income/expense as interest payments are made/received on the Company’s variable-rate assets/liabilities. During the quarter ended September 30, 2015, the Company did not have any reclassifications to interest expense. During the next twelve months, the Company estimates (based on existing interest rates) that $1.46 million will be reclassified as an increase in interest expense.

The Company is exposed to credit risk in the event of nonperformance by the interest rate swap counterparty. The Company minimizes this risk by entering into derivative contracts with only large, stable financial institutions, and the Company has not experienced, and does not expect, any losses from counterparty nonperformance on the interest rate swaps. The Company monitors counterparty risk in accordance with the provisions of ASC Topic 815, “Derivatives and Hedging.” In addition, the interest rate swap agreements contain language outlining collateral-pledging requirements for each counterparty. Collateral must be posted when the market value exceeds certain threshold limits.

The table below identifies the balance sheet category and fair values of the Company’s derivative instruments designed as cash flow hedges as of September 30, 2015. There were no derivative instruments as of December 31, 2014 or September 30, 2014.

September 30,	Swap			Notional		Fair			Balance Sheet
2015	Number			Amount		Value			Category	Receive Rate	Pay Rate			Maturity
(dollars in thousands)
Interest rate swap		(1	)	$	75,000	$	(996	)	Other Liabilities	1 month USD-LIBOR-BBA w/ -1 day lookback +10 basis points		1.71	%	March 31, 2020
Interest rate swap		(2	)		100,000		(1,435	)	Other Liabilities	Federal Funds Effective Rate +10 basis points		1.74	%	April 15, 2021
Interest rate swap		(3	)		75,000		(1,014	)	Other Liabilities	1 month USD-LIBOR-BBA w/ -1 day lookback +10 basis points		1.92	%	March 31, 2022

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The table below presents the pre-tax net gains (losses) of the Company’s cash flow hedges for the nine months ended September 30, 2015. Since all transactions are forward starting swaps all amounts are balance sheet related (AOCI), and no amounts were recorded in the income statement.

				Nine Months Ended September 30, 2015
				Effective Portion						Ineffective Portion
							Reclassified from AOCI			Recognized in Income
				Amount of			into income			on Derivatives
	Swap			Pre-tax gain (loss)				Amount of			Amount of
	Number			Recognized in OCI			Category	Gain (Loss)		Category	Gain (Loss)
(dollars in thousands)
Interest rate swap		(1	)	$	(996	)		$	-		$	-
Interest rate swap		(2	)		(1,435	)			-			-
Interest rate swap		(3	)		(1,014	)			-			-

Note 7. Other Real Estate Owned

The activity within Other Real Estate Owned (“OREO”) for the three and nine months ended September 30, 2015 and 2014 is presented in the table below. There are no residential real estate loans in the process of foreclosure as of September 30, 2015. For the three and nine months ended September 30, 2015, proceeds on sales of OREO were $860 thousand and $1.8 million, respectively. The net losses on sales were $44 thousand and $209 thousand for the three and nine months ended September 30, 2015. 

	Three Months Ended						Nine Months Ended
(dollars in thousands)	September 30, 2015			September 30, 2014			September 30, 2015			September 30, 2014
Balance beginning of period	$	10,715		$	8,809		$	13,224		$	9,225
Real estate acquired from borrowers		225			85			1,725			330
Valuation allowance		-			(51	)		(750	)		(505	)
Properties sold		(988	)		(220	)		(4,247	)		(427	)
Balance end of period	$	9,952		$	8,623		$	9,952		$	8,623

Note 8. Net Income per Common Share

The calculation of net income per common share for the three and nine months ended September 30, 2015 and 2014 was as follows.

	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars and shares in thousands, except per share data)	2015		2014		2015		2014
Basic:
Net income available to common shareholders	$	21,283	$	13,937	$	61,280	$	39,097
Average common shares outstanding		33,401		26,024		32,625		25,978
Basic net income per common share	$	0.64	$	0.54	$	1.88	$	1.50
Diluted:
Net income available to common shareholders	$	21,283	$	13,937	$	61,280	$	39,097
Average common shares outstanding		33,401		26,024		32,625		25,978
Adjustment for common share equivalents		625		630		653		640
Average common shares outstanding-diluted		34,026		26,654		33,278		26,618
Diluted net income per common share	$	0.63	$	0.52	$	1.84	$	1.47
Anti-dilutive shares		-		21		11		21

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Note 9. Stock-Based Compensation

The Company maintains the 1998 Stock Option Plan (“1998 Plan”), the 2006 Stock Plan (“2006 Plan”) and the 2011 Employee Stock Purchase Plan (“2011 ESPP”).

In connection with the acquisition of Fidelity & Trust Financial Corporation (“Fidelity”), the Company assumed the Fidelity 2004 Long Term Incentive Plan and the 2005 Long Term Incentive Plan (the “Fidelity Plans”).

In connection with the acquisition of Virginia Heritage, the Company assumed the Virginia Heritage 2006 Stock Option Plan and the 2010 Long Term Incentive Plan (the “Virginia Heritage Plans”).

No additional options may be granted under the 1998 Plan, the Fidelity Plans or the Virginia Heritage Plans.

The 2006 Plan provides for the issuance of awards of incentive stock options, non-qualifying stock options, restricted stock and stock appreciation rights to selected key employees and members of the Board. As amended, 1,996,500 shares of common stock are subject to issuance pursuant to awards under the 2006 Plan. Stock options and restricted stock awards are made with an exercise price equal to the average of the high and low price of the Company’s shares at the date of grant.

For awards that are service based, compensation expense is being recognized over the service (vesting) period based on fair value, which for stock option grants is computed using the Black-Scholes model, and for restricted stock awards is based on the average of the high and low stock price of the Company’s shares on the date of grant. For awards that are performance-based, compensation expense is recorded based on the probability of achievement of the goals underlying the grant. No performance-based awards are outstanding at September 30, 2015.

In February 2015, the Company awarded 77,370 shares of restricted stock to senior officers, directors and employees. The shares vest in three substantially equal installments beginning on the first anniversary of the date of grant.

In March 2015, the Company awarded 700 shares of restricted stock to an employee. The shares vest in five substantially equal installments beginning on the first anniversary of the date of grant.

Below is a summary of changes in shares pursuant to our equity compensation plans for the nine months ended September 30, 2015 and 2014. The information excludes restricted stock units and awards.

	Nine Months Ended September 30,
	2015					2014
	Shares			Weighted-Average Exercise Price		Shares			Weighted-Average Exercise Price
Beginning balance		759,683		$	11.36		503,834		$	10.41
Issued		-			-		21,000			32.77
Exercised		(377,357	)		12.73		(64,926	)		16.78
Forfeited		(12,380	)		29.58		(110	)		5.76
Expired		(8,476	)		17.32		(1,225	)		9.00
Ending balance		361,470		$	9.16		458,573		$	10.54

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The following summarizes information about stock options outstanding at September 30, 2015. The information excludes restricted stock units and awards.

								Weighted-Average
Outstanding:				Stock Options		Weighted-Average		Remaining
Range of Exercise Prices				Outstanding		Exercise Price		Contractual Life
$	5.76	$	9.21		221,669	$	5.76		3.28
$	9.22	$	15.47		108,611		12.40		2.15
$	15.48	$	22.66		18,794		19.28		7.75
$	22.67	$	32.36		12,396		26.18		2.19
					361,470	$	9.16		3.13

Exercisable:				Stock Options		Weighted-Average
Range of Exercise Prices				Exercisable		Exercise Price
$	5.76	$	9.21		164,759	$	5.76
$	9.22	$	15.47		101,941		12.51
$	15.48	$	22.66		15,164		19.60
$	22.67	$	32.36		10,896		26.36
					292,760	$	9.60

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option pricing model with the assumptions as shown in the table below used for grants during the years ended December 31, 2014 and 2013. There were no grants of stock options during the nine months ended September 30, 2015.

	Nine Months Ended			Years Ended December 31,
	September 30, 2015			2014			2013
Expected volatility		N/A			34.25	%		34.12	%
Weighted-Average volatility		N/A			34.25	%		34.12	%
Expected dividends		0.0	%		0.0	%		0.0	%
Expected term (in years)		N/A			9.4			7.5
Risk-free rate		N/A			2.26	%		1.31	%
Weighted-average fair value (grant date)		N/A		$	13.49		$	7.83

The expected lives are based on the “simplified” method allowed by ASC Topic 718 “Compensation,” whereby the expected term is equal to the midpoint between the vesting period and the contractual term of the award.

The total intrinsic value of outstanding stock options and outstanding exercisable stock options was $10.6 million at September 30, 2015. The total intrinsic value of stock options exercised during the nine months ended September 30, 2015 and 2014 was $8.5 million and $1.1 million, respectively. The total fair value of stock options vested was $87 thousand and $125 thousand for the nine months ended September 30, 2015 and 2014, respectively. Unrecognized stock-based compensation expense related to stock options totaled $69 thousand at September 30, 2015. At such date, the weighted-average period over which this unrecognized stock option expense is expected to be recognized was 2.68 years.

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The Company has unvested restricted stock award grants of 387,753 shares under the 2006 Plan at September 30, 2015. Unrecognized stock based compensation expense related to restricted stock awards totaled $6.6 million at September 30, 2015. At such date, the weighted-average period over which this unrecognized expense was expected to be recognized was 1.66 years. The following table summarizes the unvested restricted stock awards at September 30, 2015 and 2014.

	Nine Months Ended September 30,
	2015					2014
	Shares			Weighted- Average Grant Date Fair Value		Shares			Weighted- Average Grant Date Fair Value
Unvested at beginning		509,336		$	21.58		614,580		$	18.71
Issued		78,070			36.06		78,947			33.24
Forfeited		(4,150	)		31.83		(832	)		23.59
Vested		(195,503	)		20.74		(184,921	)		17.54
Unvested at end		387,753		$	24.81		507,774		$	21.33

Approved by shareholders in May 2011, the 2011 ESPP reserved 550,000 shares of common stock (as adjusted for stock dividends) for issuance to employees. Whole shares are sold to participants in the plan at 85% of the lower of the stock price at the beginning or end of each quarterly offering period. The 2011 ESPP is available to all eligible employees who have completed at least one year of continuous employment, work at least 20 hours per week and at least five months a year. Participants may contribute a minimum of $10 per pay period to a maximum of $6,250 per offering period or $25,000 annually (not to exceed more than 10% of compensation per pay period). At September 30, 2015, the 2011 ESPP had 437,727 shares remaining for issuance.

Included in salaries and employee benefits the Company recognized $3.7 million and $2.9 million in stock-based compensation expense for the nine months ended September 30, 2015 and 2014, respectively. Stock-based compensation expense is recognized ratably over the requisite service period for all awards.

Note 10.  Other Comprehensive Income

The following table presents the components of other comprehensive income (loss) for the three and nine months ended September 30, 2015 and 2014.

(dollars in thousands)	Before Tax			Tax Effect			Net of Tax
Three Months Ended September 30, 2015
Net unrealized gain on securities available-for-sale	$	3,512		$	1,405		$	2,107
Net unrealized loss on derivatives		(6,627	)		(2,651	)		(3,976	)
Less: Reclassification adjustment for net gains included in net income		(60	)		(24	)		(36	)
Other Comprehensive Loss	$	(3,175	)	$	(1,270	)	$	(1,905	)
Three Months Ended September 30, 2014
Net unrealized loss on securities available-for-sale	$	(543	)	$	(217	)	$	(326	)
Less: Reclassification adjustment for net gains included in net income		-			-			-
Other Comprehensive Loss	$	(543	)	$	(217	)	$	(326	)
Nine Months Ended September 30, 2015
Net unrealized gain on securities available-for-sale	$	3,325		$	1,330		$	1,995
Net unrealized loss on derivatives		(3,445	)		(1,378	)		(2,067	)
Less: Reclassification adjustment for net gains included in net income		(2,224	)		(890	)		(1,334	)
Other Comprehensive Loss	$	(2,344	)	$	(938	)	$	(1,406	)
Nine Months Ended September 30, 2014
Net unrealized gain on securities available-for-sale	$	8,062		$	3,225		$	4,837
Less: Reclassification adjustment for net gains included in net income		(10	)		(4	)		(6	)
Other Comprehensive Income	$	8,052		$	3,221		$	4,831

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The following table presents the changes in each component of accumulated other comprehensive income (loss), net of tax, for the three and nine months ended September 30, 2015 and 2014.

	Securities						Accumulated Other
(dollars in thousands)	Available For Sale			Derivatives			Comprehensive (Loss) Income
Three Months Ended September 30, 2015
Balance at Beginning of Period	$	3,146		$	-		$	3,146
Other comprehensive income (loss) before reclassifications		2,107			(3,976	)		(1,869	)
Amounts reclassified from accumulated other comprehensive income		(36	)		-			(36	)
Net other comprehensive income (loss) during period		2,071			(3,976	)		(1,905	)
Balance at End of Period	$	5,217		$	(3,976	)	$	1,241
Three Months Ended September 30, 2014
Balance at Beginning of Period	$	1,838		$	-		$	1,838
Other comprehensive loss before reclassifications		(326	)		-			(326	)
Amounts reclassified from accumulated other comprehensive income		-			-			-
Net other comprehensive (loss) during period		(326	)		-			(326	)
Balance at End of Period	$	1,512		$	-		$	1,512
Nine Months Ended September 30, 2015
Balance at Beginning of Period	$	2,647		$	-		$	2,647
Other comprehensive income (loss) before reclassifications		1,995			(2,067	)		(72	)
Amounts reclassified from accumulated other comprehensive income		(1,334	)		-			(1,334	)
Net other comprehensive income (loss) during period		661			(2,067	)		(1,406	)
Balance at End of Period	$	3,308		$	(2,067	)	$	1,241
Nine Months Ended September 30, 2014
Balance at Beginning of Period	$	(3,319	)	$	-		$	(3,319	)
Other comprehensive income before reclassifications		4,837			-			4,837
Amounts reclassified from accumulated other comprehensive income		(6	)		-			(6	)
Net other comprehensive income during period		4,831			-			4,831
Balance at End of Period	$	1,512		$	-		$	1,512

The following table presents the amounts reclassified out of each component of accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2015 and 2014.

	Amount Reclassified from					Affected Line Item in
Details about Accumulated Other	Accumulated Other					the Statement Where
Comprehensive Income Components (dollars in thousands)	Comprehensive (Loss) Income					Net Income is Presented
	Three Months Ended September 30,
	2015			2014
Realized gain on sale of investment securities	$	60		$	-	Gain on sale of investment securities
		(24	)		-	Tax Expense
Total Reclassifications for the Period	$	36		$	-	Net of Tax

	Amount Reclassified from						Affected Line Item in
Details about Accumulated Other	Accumulated Other						the Statement Where
Comprehensive Income Components (dollars in thousands)	Comprehensive (Loss) Income						Net Income is Presented
	Nine Months Ended September 30,
	2015			2014
Realized gain on sale of investment securities	$	2,224		$	10		Gain on sale of investment securities
		(890	)		(4	)	Tax Expense
Total Reclassifications for the Period	$	1,334		$	6		Net of Tax

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Note 11.  Fair Value Measurements

The fair value of an asset or liability is the price that would be received to sell that asset or paid to transfer that liability in an orderly transaction occurring in the principal market (or most advantageous market in the absence of a principal market) for such asset or liability. In estimating fair value, the Company utilizes valuation techniques that are consistent with the market approach, the income approach and/or the cost approach. Such valuation techniques are consistently applied. Inputs to valuation techniques include the assumptions that market participants would use in pricing an asset or liability. ASC Topic 820, “Fair Value Measurements and Disclosures,” establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:

Level 1 Quoted prices in active exchange markets for identical assets or liabilities; also includes certain U.S. Treasury and other U.S. Government and agency securities actively traded in over-the-counter markets.

Level 2 Observable inputs other than Level 1 including quoted prices for similar assets or liabilities, quoted prices in less active markets, or other observable inputs that can be corroborated by observable market data; also includes derivative contracts whose value is determined using a pricing model with observable market inputs or can be derived principally from or corroborated by observable market data.  This category generally includes certain U.S. Government and agency securities, corporate debt securities, derivative instruments, and residential mortgage loans held for sale.

Level 3 Unobservable inputs supported by little or no market activity for financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation; also includes observable inputs for single dealer nonbinding quotes not corroborated by observable market data. This category generally includes certain private equity investments, retained interests from securitizations, and certain collateralized debt obligations.

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Assets and Liabilities Recorded at Fair Value on a Recurring Basis

The table below presents the recorded amount of assets and liabilities measured at fair value on a recurring basis as of September 30, 2015 and December 31, 2014.

(dollars in thousands)	Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)		Total (Fair Value)
September 30, 2015
Assets:
Investment securities available for sale:
U. S. Government agency securities	$	-	$	69,078	$	-	$	69,078
Residential mortgage backed securities		-		322,020		-		322,020
Municipal bonds		-		117,866		-		117,866
Corporate bonds		-		15,018		-		15,018
Other equity investments		125		-		219		344
Loans held for sale		-		35,713		-		35,713
Mortgage banking derivatives		-		-		197		197
Interest rate swap derivatives		-		-		-		-
Total assets measured at fair value on a recurring basis as of September 30, 2015	$	125	$	559,695	$	416	$	560,236
Liabilities:
Interest rate swap derivatives		-		3,445		-		3,445
Total liabilities measured at fair value on a recurring basis as of September 30, 2015	$	-	$	3,445	$	-	$	3,445

(dollars in thousands)	Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)		Total (Fair Value)
December 31, 2014
Assets:
Investment securities available for sale:
U. S. Government agency securities	$	-	$	29,894	$	-	$	29,894
Residential mortgage backed securities		-		240,320		-		240,320
Municipal bonds		-		111,712		-		111,712
Other equity investments		198		-		219		417
Loans held for sale		-		44,317		-		44,317
Mortgage banking derivatives		-		-		146		146
Total assets measured at fair value on a recurring basis as of December 31, 2014	$	198	$	426,243	$	365	$	426,806
Liabilities:
Interest rate swap derivatives		-		-		-		-
Total liabilities measured at fair value on a recurring basis as of September 30, 2014	$	-	$	-	$	-	$	-

 Investment Securities Available-for-Sale

Investment securities available-for-sale are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted prices, if available. If quoted prices are not available, fair value is measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss assumptions. Level 1 securities include those traded on an active exchange such as the New York Stock Exchange, Treasury securities that are traded by dealers or brokers in active over-the-counter markets and money market funds. Level 2 securities include U.S. Government agency debt securities, mortgage backed securities issued by government sponsored entities and municipal bonds. Securities classified as Level 3 include securities in less liquid markets, the carrying amount approximate the fair value.

Loans held for sale: Loans held for sale are carried at the fair value. Fair value is derived from secondary market quotations for similar instruments. Gains and losses on sales of these loans are recorded as a component of noninterest income in the consolidated statements of operations. As such, the Company classifies loans subjected to fair value adjustments as Level 2 valuation.

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The following is a reconciliation of activity for assets and liabilities measured at fair value based on Significant Other Unobservable Inputs (Level 3):

	Other Equity		Derivative
(dollars in thousands)	Investments		Assets/(Liabilities)			Total
Assets:
Beginning balance at December 31, 2014	$	219	$	146		$	365
Realized gain (loss) included in earnings - net mortgage banking derivatives		-		51			51
Principal redemption		-		-			-
Ending balance at September 30, 2015	$	219	$	197		$	416
Liabilities:
Beginning balance at December 31, 2014	$	-	$	250		$	250
Realized gain (loss) included in earnings - net mortgage banking derivatives		-		(5	)		(5	)
Principal redemption		-		-			-
Ending balance at September 30, 2015	$	-	$	245		$	245

	Other Equity		Derivative
(dollars in thousands)	Investments		Assets/(Liabilities)		Total
Assets:
Beginning balance at December 31, 2013	$	219	$	-	$	219
Realized gain (loss) included in earnings - net mortgage banking derivatives		-		146		146
Ending balance at December 31, 2014	$	219	$	146	$	365
Liabilities:
Beginning balance at December 31, 2013	$	-	$	-	$	-
Realized gain (loss) included in earnings - net mortgage banking derivatives		-		250		250
Ending balance at December 31, 2014	$	-	$	250	$	250

Securities classified as Level 3 include securities in less liquid markets, the carrying amount approximate the fair value. The securities consist of equity investments in the form of common stock of two local banking companies which are not publicly traded.

The Company relies on a third-party pricing service to value its mortgage banking derivative financial assets and liabilities, which the Company classifies as a Level 3 valuation. The external valuation model to estimate the fair value of its interest rate lock commitments to originate residential mortgage loans held for sale, includes grouping the interest rate lock commitments by interest rate and terms, applying an estimated pull-through rate based on historical experience, and then multiplying by quoted investor prices determined to be reasonably applicable to the loan commitment groups based on interest rate, terms, and rate lock expiration dates of the loan commitment groups. The Company also relies on an external valuation model to estimate the fair value of its forward commitments to sell residential mortgage loans (i.e., an estimate of what the Company would receive or pay to terminate the forward delivery contract based on market prices for similar financial instruments), which includes matching specific terms and maturities of the forward commitments against applicable investor pricing.

Assets and Liabilities Recorded at Fair Value on a Nonrecurring Basis

The Company measures certain assets at fair value on a nonrecurring basis and the following is a general description of the methods used to value such assets.

Impaired loans: The Company considers a loan impaired when it is probable that the Company will be unable to collect all amounts due according to the original contractual terms of the note agreement, including both principal and interest. Management has determined that nonaccrual loans and loans that have had their terms restructured in a troubled debt restructuring meet this impaired loan definition. For individually evaluated impaired loans, the amount of impairment is based upon the present value of expected future cash flows discounted at the loan’s effective interest rate or the estimated fair value of the underlying collateral for collateral-dependent loans, which the Company classifies as a Level 3 valuation.

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Other real estate owned: Other real estate owned is initially recorded at the lower of carrying value or fair value. Fair value is based upon independent market prices, appraised values of the collateral or management’s estimation of the value of the collateral, which the Company classifies as a Level 3 valuation. Assets measured at fair value on a nonrecurring basis are included in the table below:

(dollars in thousands)	Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)		Total (Fair Value)
September 30, 2015
Impaired loans:
Commercial	$	-	$	279	$	2,237	$	2,516
Income producing - commercial real estate		-		5,587		307		5,894
Owner occupied - commercial real estate		-		282		599		881
Real estate mortgage - residential		-		-		333		333
Construction - commercial and residential		-		-		221		221
Home equity		-		198		125		323
Other consumer		-		-		72		72
Other real estate owned		-		9,494		458		9,952
Total assets measured at fair value on a nonrecurring basis as of September 30, 2015	$	-	$	15,840	$	4,352	$	20,192

(dollars in thousands)	Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)		Total (Fair Value)
December 31, 2014
Impaired loans:
Commercial	$	-	$	781	$	7,171	$	7,952
Income producing - commercial real estate		-		703		1,199		1,902
Owner occupied - commercial real estate		-		-		824		824
Real estate mortgage - residential		-		-		346		346
Construction - commercial and residential		-		-		3,297		3,297
Home equity		-		5		963		968
Other consumer		-		-		13		13
Other real estate owned		-		9,184		4,040		13,224
Total assets measured at fair value on a nonrecurring basis as of December 31, 2014	$	-	$	10,673	$	17,853	$	28,526

Loans

The Company does not record loans at fair value on a recurring basis; however, from time to time, a loan is considered impaired and an allowance for loan loss is established. Loans for which it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan are considered impaired. Once a loan is identified as individually impaired, management measures impairment in accordance with ASC Topic 310, “Receivables.” The fair value of impaired loans is estimated using one of several methods, including the collateral value, market value of similar debt, enterprise value, liquidation value and discounted cash flows. Those impaired loans not requiring a specific allowance represent loans for which the fair value of expected repayments or collateral exceed the recorded investment in such loans. At September 30, 2015, substantially all of the totally impaired loans were evaluated based upon the fair value of the collateral. In accordance with ASC Topic 820, impaired loans where an allowance is established based on the fair value of collateral require classification in the fair value hierarchy. When the fair value of the collateral is based on an observable market price or a current appraised value, the Company records the loan as nonrecurring Level 2. When an appraised value is not available or management determines the fair value of the collateral is further impaired below the appraised value and there is no observable market price, the Company records the loan as nonrecurring Level 3.

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Fair Value of Financial Instruments

The Company discloses fair value information about financial instruments for which it is practicable to estimate the value, whether or not such financial instruments are recognized on the balance sheet. Fair value is the amount at which a financial instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation, and is best evidenced by quoted market price, if one exists.

Quoted market prices, if available, are shown as estimates of fair value. Because no quoted market prices exist for a portion of the Company’s financial instruments, the fair value of such instruments has been derived based on management’s assumptions with respect to future economic conditions, the amount and timing of future cash flows and estimated discount rates. Different assumptions could significantly affect these estimates. Accordingly, the net realizable value could be materially different from the estimates presented below. In addition, the estimates are only indicative of individual financial instrument values and should not be considered an indication of the fair value of the Company taken as a whole.     

The following methods and assumptions were used to estimate the fair value of each category of financial instrument for which it is practicable to estimate value:

Cash due from banks and federal funds sold: For cash and due from banks and federal funds sold the carrying amount approximates fair value.

Interest bearing deposits with other banks: Values are estimated by discounting the future cash flows using the current rates at which similar deposits would be earning.

Investment securities: For these instruments, fair values are based upon quoted prices, if available. If quoted prices are not available, fair value is measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss assumptions.

Federal Reserve and Federal Home Loan Bank stock: The carrying amount approximate the fair values at the reporting date.

Loans held for sale: Fair values for residential mortgage loans held for sale are at the carrying value (lower of cost or market) since such loans are typically committed to be sold (servicing released) at a profit.

Loans: For variable rate loans that re-price on a scheduled basis, fair values are based on carrying values. The fair value of the remaining loans are estimated by discounting the estimated future cash flows using the current interest rate at which similar loans would be made to borrowers with similar credit ratings and for the same remaining term.

Bank owned life insurance: The fair value of bank owned life insurance is the current cash surrender value, which is the carrying value.

Annuity investment: The fair value of the annuity investments is the carrying amount at the reporting date.

Mortgage banking derivatives: These derivative instruments, which are classified as Level 3 of the fair value hierarchy, are used to hedge residential mortgage loans held for sale that utilize mandatory delivery and the related interest rate lock commitments and include forward commitments to sell those loans. The fair values of derivative financial instruments are based on derivative market data inputs as of the valuation date and the underlying value of mortgage loans for interest rate lock commitments.

Interest rate swap derivatives: These derivative instruments consist of forward starting interest rate swap agreements, which are accounted for as cash flow hedges. The Company's derivative position is classified within Level 2 of the fair value hierarchy and is valued using models generally accepted in the financial services industry and that use actively quoted or observable market input values from external market data providers and/or non-binding broker-dealer quotations. The fair value of the derivatives are determined using discounted cash flow models. These models’ key assumptions include the contractual terms of the respective contract along with significant observable inputs, including interest rates, yield curves, nonperformance risk and volatility. Derivative contracts are executed with a Credit Support Annex, which is a bilateral ratings-sensitive agreement that requires collateral postings when the market value exceeds certain threshold limits. These agreements protect the interests of the Company and its counterparties should either party suffer a credit rating deterioration.

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Noninterest bearing deposits: The fair value of these deposits is the amount payable on demand at the reporting date, since generally accepted accounting standards do not permit an assumption of core deposit value.

Interest bearing deposits: The fair value of interest bearing transaction, savings, and money market deposits with no defined maturity is the amount payable on demand at the reporting date, since generally accepted accounting standards do not permit an assumption of core deposit value.

Certificates of deposit: The fair value of certificates of deposit is estimated by discounting the future cash flows using the current rates at which similar deposits with remaining maturities would be accepted.

Customer repurchase agreements: The carrying amount approximate the fair values at the reporting date.

Borrowings: The carrying amount for variable rate borrowings approximate the fair values at the reporting date. The fair value of fixed rate FHLB advances and the subordinated notes are estimated by computing the discounted value of contractual cash flows payable at current interest rates for obligations with similar remaining terms. The fair value of variable rate FHLB advances is estimated to be carrying value since these liabilities are based on a spread to a current pricing index.

Off-balance sheet items: Management has reviewed the unfunded portion of commitments to extend credit, as well as standby and other letters of credit, and has determined that the fair value of such instruments is equal to the fee, if any, collected and unamortized for the commitment made.

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The estimated fair values of the Company’s financial instruments at September 30, 2015 and December 31, 2014 are as follows:

					Fair Value Measurements
					Quoted Prices in Active Markets for Identical Assets or Liabilities		Significant Other Observable Inputs		Significant Unobservable Inputs
(dollars in thousands)	Carrying Value		Fair Value		(Level 1)		(Level 2)		(Level 3)
September 30, 2015
Assets
Cash and due from banks	$	10,703	$	10,703	$	-	$	10,703	$	-
Federal funds sold		4,076		4,076		-		4,076		-
Interest bearing deposits with other banks		291,276		291,276		-		291,276		-
Investment securities		524,326		524,326		125		523,982		219
Federal Reserve and Federal Home Loan Bank stock		16,865		16,865		-		16,865		-
Loans held for sale		35,713		35,713		-		35,713		-
Loans		4,776,965		4,778,753		-		6,346		4,772,407
Bank owned life insurance		58,284		58,284		-		58,284		-
Annuity investment		12,137		12,137		-		12,137		-
Mortgage banking derivatives		197		197		-		-		197
Interst rate swap derivatives		-		-		-		-		-
Liabilities
Noninterest bearing deposits		1,402,447		1,402,447		-		1,402,447		-
Interest bearing deposits		2,722,026		2,722,026		-		2,722,026		-
Certificates of deposit		802,115		802,449		-		802,449		-
Customer repurchase agreements		64,893		64,893		-		64,893		-
Borrowings		70,000		70,000		-		70,000		-
Mortgage banking derivatives		245		245		-		-		245
Interst rate swap derivatives		3,445		3,445		-		3,445		-
December 31, 2014
Assets
Cash and due from banks	$	9,097	$	9,097	$	-	$	9,097	$	-
Federal funds sold		3,516		3,516		-		3,516		-
Interest bearing deposits with other banks		243,412		243,412		-		243,412		-
Investment securities		382,343		382,343		198		381,926		219
Federal Reserve and Federal Home Loan Bank stock		22,560		22,560		-		22,560		-
Loans held for sale		44,317		44,669		-		44,669		-
Loans		4,312,399		4,314,618		-		1,489		4,313,129
Bank owned life insurance		56,594		56,594		-		56,594		-
Annuity investment		11,277		11,277		-		11,277		-
Mortgage banking derivatives		146		146		-		-		146
Liabilities
Noninterest bearing deposits		1,175,799		1,175,799		-		1,175,799		-
Interest bearing deposits		2,446,228		2,446,228		-		2,446,228		-
Certificates of deposit		688,741		688,067		-		688,067		-
Customer repurchase agreements		61,120		61,120		-		61,120		-
Borrowings		219,300		220,838		-		220,838		-
Mortgage banking derivatives		250		250		-		-		250

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Note 12.  Supplemental Executive Retirement Plan

The Bank has entered into Supplemental Executive Retirement and Death Benefit Agreements (the “SERP Agreements”) with certain of the Bank’s executive officers, which upon the executive’s retirement, will provide for a stated monthly payment for such executive’s lifetime, subject to certain death benefits described below. The retirement benefit is computed as a percentage of each executive’s projected average base salary over the five years preceding retirement, assuming retirement at age 67. The SERP Agreements provide that (a) the benefits vest ratably over six years of service to the Bank, with the executive receiving credit for years of service prior to entering into the SERP Agreement, (b) death, disability and change-in-control shall result in immediate vesting, and (c) the monthly amount will be reduced if retirement occurs earlier than age 67 for any reason other than death, disability or change-in-control. The SERP Agreements further provide for a death benefit in the event the retired executive dies prior to receiving 180 monthly installments, paid either in a lump sum payment or continued monthly installment payments, such that the executive’s beneficiary has received payment(s) sufficient to equate to a cumulative 180 monthly installments.

The SERP Agreements are unfunded arrangements maintained primarily to provide supplemental retirement benefits and comply with Section 409A of the Internal Revenue Code. The Bank financed the retirement benefits by purchasing fixed annuity contracts with four insurance carriers totaling $11.4 million that have been designed to provide a future source of funds for the lifetime retirement benefits of the SERP Agreements. The primary impetus for utilizing fixed annuities is a substantial savings in compensation expenses for the Bank as opposed to a traditional SERP Agreement. The cash surrender value of the annuity contracts was $12.1 million at September 30, 2015 and is included in other assets on the consolidated balance sheet. For the three and nine months ended September 30, 2015, the Company recorded benefit expense accruals of $255 thousand and $764 thousand for this post retirement benefit. 

Upon death of an executive, the annuity contract related to such executive terminates. The Bank has purchased additional bank owned life insurance contracts, which would effectively finance payments (up to a 15 year certain amount) to the executives’ named beneficiaries.

Note 13.  Subsequent Event

On November 2, 2015, Eagle Bancorp, Inc. (the “Company”), redeemed all of the 56,600 shares of the Company’s Senior Non-Cumulative Perpetual Preferred Stock, Series B, liquidation amount $1,000 per share (the “Series B Preferred Stock”) issued to the United States Secretary of the Treasury (the “Treasury”) in July 2011 pursuant to the Small Business Lending Fund program (“SBLF”), and all of the 15,300 shares of the Company’s Senior Non-Cumulative Perpetual Preferred Stock, Series C, liquidation amount $1,000 per share (“Series C Preferred Stock”), issued in October 2014 in connection with the Company’s acquisition of Virginia Heritage Bank (“VHB”) in exchange for VHB’s SBLF preferred stock originally issued to the Treasury in June 2011. The aggregate redemption price of the Series B Preferred Stock and Series C Preferred Stock was approximately $71.96 million, including dividends accrued but unpaid through, but not including the redemption date.

Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion provides information about the results of operations, and financial condition, liquidity, and capital resources of the Company and its subsidiaries as of the dates and periods indicated. This discussion and analysis should be read in conjunction with the unaudited consolidated financial statements and Notes thereto, appearing elsewhere in this report and the Management Discussion and Analysis in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.

This report contains forward looking statements within the meaning of the Securities Exchange Act of 1934, as amended, including statements of goals, intentions, and expectations as to future trends, plans, events or results of Company operations and policies and regarding general economic conditions. In some cases, forward- looking statements can be identified by use of such words as “may,” “will,” “anticipate,” “believes,” “expects,” “plans,” “estimates,” “potential,” “continue,” “should,” and similar words or phrases. These statements are based upon current and anticipated economic conditions, nationally and in the Company’s market, interest rates and interest rate policy, competitive factors and other conditions, which by their nature are not susceptible to accurate forecast, and are subject to significant uncertainty. For details on factors that could affect these expectations, see the risk factors and other cautionary language included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 and in other periodic and current reports filed by the Company with the Securities and Exchange Commission. Because of these uncertainties and the assumptions on which this discussion and the forward-looking statements are based, actual future operations and results in the future may differ materially from those indicated herein. Readers are cautioned against placing undue reliance on any such forward looking statements.

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GENERAL

The Company is a growth oriented, one-bank holding company headquartered in Bethesda, Maryland, which is currently celebrating seventeen years of successful operations. The Company provides general commercial and consumer banking services through the Bank, its wholly owned banking subsidiary, a Maryland chartered bank which is a member of the Federal Reserve System. The Company was organized in October 1997, to be the holding company for the Bank. The Bank was organized in 1998 as an independent, community oriented, full service banking alternative to the super regional financial institutions, which dominate the primary market area. The Company’s philosophy is to provide superior, personalized service to its customers. The Company focuses on relationship banking, providing each customer with a number of services and becoming familiar with and addressing customer needs in a proactive, personalized fashion. As of September 30, 2015 the Bank has a total of twenty-two branch offices, including ten in Northern Virginia, seven in Montgomery County, Maryland, and five in Washington, D.C. During the fourth quarter, the Company intends to consolidate one Northern Virginia branch, resulting in a total of twenty-one branch offices.

The Bank offers a broad range of commercial banking services to its business and professional clients as well as full service consumer banking services to individuals living and/or working primarily in the Bank’s market area. The Bank emphasizes providing commercial banking services to sole proprietors, small, and medium sized businesses, non-profit organizations and associations, and investors living and working in and near the primary service area. These services include the usual deposit functions of commercial banks, including business and personal checking accounts, “NOW” accounts and money market and savings accounts, business, construction, and commercial loans, residential mortgages and consumer loans, and cash management services. The Bank is also active in the origination and sale of residential mortgage loans and the origination of SBA loans. The residential mortgage loans are originated for sale to third-party investors, generally large mortgage and banking companies, under best efforts and mandatory delivery commitments with the investors to purchase the loans subject to compliance with pre-established criteria. The Bank generally sells the guaranteed portion of the SBA loans in a transaction apart from the loan origination generating noninterest income from the gains on sale, as well as servicing income on the portion participated. Bethesda Leasing, LLC, a subsidiary of the Bank, holds title to and manages Other Real Estate Owned (“OREO”) assets. Eagle Insurance Services, LLC, a subsidiary of the Bank, offers access to insurance products and services through a referral program with a third party insurance broker. Additionally, the Bank offers investment advisory services through referral programs with two third parties. ECV, a subsidiary of the Company, provides subordinated financing for the acquisition, development and/or construction of real estate projects. ECV lending involves higher levels of risk, together with commensurate expected returns.

CRITICAL ACCOUNTING POLICIES

The Company’s consolidated financial statements are prepared in accordance with GAAP and follow general practices within the banking industry. Application of these principles requires management to make estimates, assumptions, and judgments that affect the amounts reported in the financial statements and accompanying notes. These estimates, assumptions and judgments are based on information available as of the date of the consolidated financial statements; accordingly, as this information changes, the consolidated financial statements could reflect different estimates, assumptions, and judgments. Certain policies inherently have a greater reliance on the use of estimates, assumptions and judgments and as such have a greater possibility of producing results that could be materially different than originally reported. Estimates, assumptions, and judgments are necessary when assets and liabilities are required to be recorded at fair value, when a decline in the value of an asset not carried on the financial statements at fair value warrants an impairment write-down or a valuation reserve to be established, or when an asset or liability needs to be recorded contingent upon a future event. Carrying assets and liabilities at fair value inherently results in more financial statement volatility.

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The fair values and the information used to record valuation adjustments for investment securities available-for-sale are based either on quoted market prices or are provided by other third-party sources, when available. The Company’s investment portfolio is categorized as available-for-sale with unrealized gains and losses net of income tax being a component of shareholders’ equity and accumulated other comprehensive (loss) income.

The allowance for credit losses is an estimate of the losses that may be sustained in our loan portfolio. The allowance is based on two principles of accounting: (a) ASC Topic 450, “Contingencies,” which requires that losses be accrued when they are probable of occurring and are estimable and (b) ASC Topic 310, “Receivables,” which requires that losses be accrued when it is probable that the Company will not collect all principal and interest payments according to the contractual terms of the loan. The loss, if any, can be determined by the difference between the loan balance and the value of collateral, the present value of expected future cash flows, or values observable in the secondary markets.

Three components comprise our allowance for credit losses: a specific allowance, a formula allowance and a nonspecific or environmental factors allowance. Each component is determined based on estimates that can and do change when actual events occur.

The specific allowance allocates a reserve to identified impaired loans. Impaired loans are assigned specific reserves based on an impairment analysis. Under ASC Topic 310, “Receivables,” a loan for which reserves are individually allocated may show deficiencies in the borrower’s overall financial condition, payment record, support available from financial guarantors and for the fair market value of collateral. When a loan is identified as impaired, a specific reserve is established based on the Company’s assessment of the loss that may be associated with the individual loan.

The formula allowance is used to estimate the loss on internally risk rated loans, exclusive of those identified as requiring specific reserves. The portfolio of unimpaired loans is stratified by loan type and risk assessment. Allowance factors relate to the type of loan and level of the internal risk rating, with loans exhibiting higher risk and loss experience receiving a higher allowance factor.

The environmental allowance is also used to estimate the loss associated with pools of non-classified loans. These non-classified loans are also stratified by loan type, and environmental allowance factors are assigned by management based upon a number of conditions, including delinquencies, loss history, changes in lending policy and procedures, changes in business and economic conditions, changes in the nature and volume of the portfolio, management expertise, concentrations within the portfolio, quality of internal and external loan review systems, competition, and legal and regulatory requirements.

The allowance captures losses inherent in the loan portfolio, which have not yet been recognized. Allowance factors and the overall size of the allowance may change from period to period based upon management’s assessment of the above described factors, the relative weights given to each factor, and portfolio composition.

Management has significant discretion in making the judgments inherent in the determination of the provision and allowance for credit losses, including in connection with the valuation of collateral, a borrower’s prospects of repayment, and in establishing allowance factors on the formula and environmental components of the allowance. The establishment of allowance factors involves a continuing evaluation, based on management’s ongoing assessment of the global factors discussed above and their impact on the portfolio. The allowance factors may change from period to period, resulting in an increase or decrease in the amount of the provision or allowance, based upon the same volume and classification of loans. Changes in allowance factors can have a direct impact on the amount of the provision, and a related after tax effect on net income. Errors in management’s perception and assessment of the global factors and their impact on the portfolio could result in the allowance not being adequate to cover losses in the portfolio, and may result in additional provisions or charge-offs. Alternatively, errors in management’s perception and assessment of the global factors and their impact on the portfolio could result in the allowance being in excess of amounts necessary to cover losses in the portfolio, and may result in lower provisions in the future. For additional information regarding the provision for credit losses, refer to the discussion under the caption “Provision for Credit Losses” below.

Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. Other intangible assets represent purchased assets that lack physical substance but can be distinguished from goodwill because of contractual or other legal rights. Intangible assets that have finite lives, such as core deposit intangibles, are amortized over their estimated useful lives and subject to periodic impairment testing. Intangible assets (other than goodwill) are amortized to expense using accelerated or straight-line methods over their respective estimated useful lives.

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Goodwill and other intangibles are subject to impairment testing at the reporting unit level, which must be conducted at least annually. The Company performs impairment testing during the fourth quarter of each year or when events or changes in circumstances indicate the assets might be impaired.

The Company performs a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing updated qualitative factors, the Company determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, it does not have to perform the two-step goodwill impairment test. Determining the fair value of a reporting unit under the first step of the goodwill impairment test and determining the fair value of individual assets and liabilities of a reporting unit under the second step of the goodwill impairment test are judgmental and often involve the use of significant estimates and assumptions. Similarly, estimates and assumptions are used in determining the fair value of other intangible assets. Estimates of fair value are primarily determined using discounted cash flows, market comparisons and recent transactions. These approaches use significant estimates and assumptions including projected future cash flows, discount rates reflecting the market rate of return, projected growth rates and determination and evaluation of appropriate market comparables. Based on the results of quantitative assessments of all reporting units, the Company concluded that no impairment existed at December 31, 2014. However, future events could cause the Company to conclude that goodwill or other intangibles have become impaired, which would result in recording an impairment loss. Any resulting impairment loss could have a material adverse impact on the Company’s financial condition and results of operations.

The Company follows the provisions of ASC Topic 718, “Compensation,” which requires the expense recognition for the fair value of share based compensation awards, such as stock options, restricted stock awards, and performance based shares. This standard allows management to establish modeling assumptions as to expected stock price volatility, option terms, forfeiture rates and dividend rates which directly impact estimated fair value. The accounting standard also allows for the use of alternative option pricing models which may impact fair value as determined. The Company’s practice is to utilize reasonable and supportable assumptions.

RESULTS OF OPERATIONS

Earnings Summary

For the nine months ended September 30, 2015, the Company’s net income was $61.8 million, a 56% increase (52% on an operating basis) over the $39.5 million ($40.8 million on an operating basis) for the nine months ended September 30, 2014. Net income available to common shareholders was $61.3 million ($1.88 per basic common share and $1.84 per diluted common share), as compared to $39.1 million ($40.3 million on an operating basis), or $1.50 per basic common share and $1.47 per diluted common share ($1.55 per basic common share and $1.52 per diluted common share on an operating basis) for the same nine month period in 2014, a 25% increase per basic and diluted share (21% increase per basic and diluted common share on an operating basis).

For the three months ended September 30, 2015, the Company’s net income was $21.5 million, a 52% increase over the $14.1 million net income ($14.8 million on an operating basis) for the three months ended September 30, 2014. Net income available to common shareholders for the three months ended September 30, 2015 increased 53% to $21.3 million as compared to $13.9 million ($14.6 million on an operating basis) for the same period in 2014. Net income per basic and diluted common share for the three months ended September 30, 2015 was $0.64 and $0.63, respectively as compared to $0.54 per basic common share and $0.52 per diluted common share ($0.57 per basic common share and $0.55 per diluted common share on an operating basis) for the same period in 2014, a 19% increase per basic common share and 21% per diluted common share (13% increase per basic common share and 15% per diluted common share on an operating basis).

Operating earnings for the three and nine months ended September 30, 2014, exclude merger related expenses net of tax of $674 thousand ($0.03 per basic and diluted shares) and $1.3 million ($0.05 per basic and diluted shares) related to the Merger with Virginia Heritage, respectively. Where it is appropriate, parenthetical references refer to operating earnings. Reconciliations of GAAP earnings to operating earnings are contained under the section “Use of Non-GAAP Financial Measures”.

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As of October 31, 2014, the Company completed the Merger, which added approximately $800 million in loans, $645 million in deposits and 35 full time salaried employees. 

The increase in net income for the nine months ended September 30, 2015 can be attributed primarily to an increase in total revenue (i.e. net interest income plus noninterest income) of 37.1% over the same period in 2014. Net interest income grew 35.3% in the first nine months of 2015 as compared to the same period in 2014 due to average earning asset growth of 39.8%.

For the nine months ended September 30, 2015, the Company reported an annualized return on average assets (“ROAA”) of 1.49% as compared to 1.36% (1.40% on an operating basis) for the nine months ended September 30, 2014. The annualized return on common equity (“ROACE”) for the nine months ended September 30, 2015 was 12.41%, as compared to 14.33% (14.79% on an operating basis) for the nine months ended September 30, 2014, the lower ROACE due to the higher average capital position.

The increase in net income for the three months ended September 30, 2015 can be attributed primarily to an increase in total revenue (i.e. net interest income plus noninterest income) of 32.0% over the same period in 2014. Net interest income grew 32.4% for the three months ended September 30, 2015 as compared to the same period in 2014 due to average earning asset growth of 39.4%.

For the three months ended September 30, 2015, the Company reported an annualized ROAA of 1.47% as compared to 1.37% (1.44% on an operating basis) for the three months ended September 30, 2014. The annualized ROACE for the three months ended September 30, 2015 was 11.95%, as compared to 14.52% (15.22% on an operating basis) for the three months ended September 30, 2014, the lower ROACE due to the higher average capital position.

The net interest margin, which measures the difference between interest income and interest expense (i.e. net interest income) as a percentage of earning assets, decreased 14 basis points from 4.46% for the nine months ended September 30, 2014 to 4.32% for the nine months ended September 30, 2015. For the first nine months in 2015, the Company has been able to maintain its loan portfolio yields relatively close to 2014 levels (5.25% versus 5.40%) due to disciplined loan pricing practices, while maintaining a favorable deposit mix, largely resulting from ongoing efforts to increase and expand client relationships. Average earning assets yields were lower by 9 basis points (4.68% versus 4.77%) in the first nine months of 2015 as compared to the same period in 2014. The average cost of interest bearing liabilities increased by 8 basis points (from 0.47% to 0.55%) for the nine months ended September 30, 2015 as compared to same period in 2014. Combining the change in the yield on earning assets and the costs of interest bearing liabilities, the net interest spread decreased by 17 basis points for the first nine months in 2015 (4.13% versus 4.30%) as compared to 2014. 

In spite of the decline in the net interest spread, the Company believes it has managed its cost of funds aggressively and been extremely disciplined in setting new loan rates. The benefit of noninterest sources funding earning assets increased by 3 basis points from 16 basis points to 19 basis points for the nine months ended September 30, 2015 versus the same period in 2014. The combination of a 17 basis point decrease in the net interest spread and a 3 basis point increase in the value of noninterest sources resulted in the 14 basis point decrease in the net interest margin for the first nine months of 2015 as compared to the same period in 2014. The net interest margin was positively impacted by 7 basis points in the nine months ended September 30, 2015 as a result of $2.8 million in amortization of the credit mark adjustment from the Merger.

The net interest margin as a percentage of earning assets decreased 22 basis points from 4.45% for the three months ended September 30, 2014 to 4.23% for the three months ended September 30, 2015. For the three months ended September 30, 2015, the Company has been able to maintain its loan portfolio yields relatively close to 2014 levels (5.19% versus 5.39%) due to disciplined loan pricing practices, while maintaining a favorable deposit mix, largely resulting from ongoing efforts to increase and expand client relationships. Average earning assets yields were lower by 20 basis points (4.58% versus 4.78%) for the quarter ended September 30, 2015 as compared to the same period in 2014. This decrease in average earning asset yields compares to an increase of 4 basis points (from 0.50% to 0.54%) in the cost of interest bearing liabilities. The net interest margin was positively impacted by 4 basis points in the three months ended September 30, 2015 as a result of $589 thousand in amortization of the credit mark adjustment from the Merger.

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The net interest spread decreased by 24 basis points for the three months ended September 30, 2015 (4.04% versus 4.28%) as compared to 2014, as the Company has managed its cost of funds aggressively and been extremely disciplined in setting new loan rates. The benefit of noninterest sources funding earning assets increased by 2 basis points from 17 basis points to 19 basis points for the three months ended September 30, 2015 versus the same period in 2014. The combination of a 24 basis point decrease in the net interest spread and a 2 basis point increase in the value of noninterest sources resulted in the 22 basis point decrease in the net interest margin for the three months ended September 30, 2015 as compared to the same period in 2014.

The Company believes it has effectively managed its net interest margin and net interest income over the past twelve months as average market interest rates have remained relatively low. This factor has been significant to overall earnings performance over the past twelve months as net interest income represents 90% of the Company’s total revenue for the nine months ended September 30, 2015.

On July 24, 2015, the Company completed the sale of the indirect consumer loan portfolio acquired in the Merger, amounting to approximately $80.3 million as of the time of sale. The sale of this non-strategic loan class allows the Company to deploy the funds into commercial and commercial real estate loans, its core competency, improve its yield on earning assets and reduce operating expenses. The fair value adjustment was included in the June 30, 2015 balance sheet as an adjustment to intangibles established in the Merger transaction.

For the first nine months of 2015, total loans grew 10.8% over December 31, 2014, and were 39.2% higher at September 30, 2015 as compared to September 30, 2014. For the nine months of 2015, total deposits increased 14.3% over December 31, 2014, and were 39.4% higher at September 30, 2015 than at September 30, 2014. Growth in loans and deposits over the last twelve months was in part due to the Merger with Virginia Heritage. Excluding balances acquired in the Merger, and the sale of the indirect consumer loan portfolio, organic loan and deposit growth over the last twelve months was 18% for loans and 21% for deposits.

In order to fund growth in average loans of 43.1% over the nine months ended September 30, 2015 as compared to the same period in 2014, as well as sustain significant liquidity, the Company has relied on both core deposit growth and brokered or wholesale deposits. The major component of the growth in core deposits has been growth in money market accounts primarily as a result of effectively building new and enhanced client relationships. Growth in average time deposits has derived primarily from significant time deposits acquired in the Merger, a CD special offer in the second quarter of 2015 which raised $50 million and increases in brokered deposit sources, which are both readily available and cost effective. Average total deposits grew by 38.1% for the first nine months of 2015 as compared to the same period in 2014.

In terms of the average asset composition or mix, loans, which generally have higher yields than securities and other earning assets, increased from 82.9% of average earning assets in the first nine months of 2014 to 84.9% of average earning assets in the first nine months of 2015. For the first nine months of 2015, as compared to the same period in 2014, average loans, excluding loans held for sale, increased $1.4 billion, a 43.1% increase. The increase in average loans in the first nine months of 2015 as compared to the first nine months of 2014 is primarily attributable to growth in both construction – commercial and residential, and investment commercial real estate loans. The mix of average investment securities for the nine month periods ended September 30, 2015 and 2014 amounted to 7.8% and 10.5% of average earning assets, respectively. The combination of federal funds sold, interest bearing deposits with other banks and loans held for sale averaged 7.3% of average earning assets in the first nine months of 2015 and 6.6% for the same period in 2014, due to the $1.5 billion increase in average earning assets for the nine months ended September 30, 2015 as compared to the same period in 2014. The average combination of federal funds sold, interest bearing deposits with other banks and loans held for sale increased $139.6 million for the nine months ended September 30, 2015 as compared to the same period in 2014.

As noted above, increases in average deposits in the first nine months of 2015, as compared to the first nine months of 2014, is attributable to growth in money market accounts and time deposits. Total borrowed funds (excluding customer repurchase agreements) were $70.0 million at September 30, 2015 as compared to $109.3 million at September 30, 2014, a 36.0% decrease, and $219.3 million at December 31, 2014, a 68.1% decrease. The decline in borrowed funds in the first nine months of 2015 as compared to December 31, 2014 was the result of the payoff of all FHLB advances and the $9.3 million in subordinated notes due 2021.      

The provision for credit losses was $10.0 million for the nine months ended September 30, 2015 as compared to $7.2 million for the nine months ended September 30, 2014. The higher provisioning in the first nine months of 2015, as compared to the first nine months of 2014, is due to higher net charge-offs. Net charge-offs of $5.8 million in the first nine months of 2015 represented an annualized 0.17% of average loans, excluding loans held for sale, as compared to $3.1 million or an annualized 0.13% of average loans, excluding loans held for sale, in the first nine months of 2014. Net charge-offs in the first nine months of 2015 were attributable primarily to commercial and industrial loans ($4.6 million), home equity and other consumer ($736 thousand), and income producing-commercial real estate loans ($625 thousand), offset by a recovery in construction commercial real estate loans ($114 thousand).

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The provision for credit losses was $3.3 million for the three months ended September 30, 2015 as compared to $2.1 million for the three months ended September 30, 2014. The higher provisioning in the third quarter of 2015, as compared to the third quarter of 2014, is due to higher net charge-offs and growth in the loan portfolio. Net charge-offs of $1.9 million in the third quarter of 2015 represented an annualized 0.16% of average loans, excluding loans held for sale, as compared to $709 thousand or an annualized 0.09% of average loans, excluding loans held for sale, in the third quarter of 2014. Net charge-offs in the third quarter of 2015 were attributable primarily to commercial and industrial loans.

At September 30, 2015 the allowance for credit losses represented 1.05% of loans outstanding, as compared to 1.07% at December 31, 2014, and 1.31% at September 30, 2014. The decrease in the allowance for credit losses as a percentage of total loans at September 30, 2015, as compared to September 30, 2014, from 1.31% to 1.05%, is due substantially to loans acquired in the Merger being accounted for at fair value in accordance with U.S. GAAP. The allowance for credit losses represented 348% of nonperforming loans, referred to as the Coverage Ratio, at September 30, 2015, as compared to 153% at September 30, 2014 and 205% at December 31, 2014, resulting primarily from a decrease in non-performing loans.

Total noninterest income for the nine months ended September 30, 2015 increased to $20.1 million from $13.0 million for the nine months ended September 30, 2014, a 54.5% increase. This increase was primarily due to $5.1 million higher gains on the sale of residential mortgage loans and to gains realized on the sale of investment securities of $2.2 million, offset by a $1.1 million loss on the early extinguishment of debt due to the early payoff of FHLB advances. Residential mortgage loans closed were $723 million for the first nine months of 2015 versus $389 million for the first nine months of 2014. Investment gains were realized in February 2015 to take advantage of market conditions. This decision to pay off the FHLB advances early was based upon the deposit growth in the quarter and expected benefits to the cost of funds going forward. Excluding investment securities gains and the loss on early extinguishment of debt, total noninterest income was $19.0 million for the nine months ended September 30, 2015, as compared to $13.0 million for the same period in 2014, a 46.2% increase.

Total noninterest income for the three months ended September 30, 2015 increased to $6.1 million from $4.8 million for the three months ended September 30, 2014, a 28.1% increase. This increase was primarily due to an increase of $1.1 million in gains on the sale of residential mortgage loans, offset by a decrease in SBA gains. Residential mortgage loans closed were $174.6 million for the third quarter in 2015 versus $162.8 million for the third quarter of 2014.

The efficiency ratio, which measures the ratio of noninterest expense to total revenue, was 42.86% for the nine months ended September 30, 2015, as compared to 50.38% (49.33% on an operating basis) for the same period in 2014. Total noninterest expenses totaled $82.1 million for the nine months ended September 30, 2015, as compared to $70.4 million ($68.9 million on an operating basis) for the nine months ended September 30, 2014, a 16.6% increase (19.1% on an operating basis). Cost increases for salaries and benefits were $4.2 million, due primarily to increased staff from the Merger, merit increases, employee benefit expense increases and incentive compensation. Premises and equipment expenses were $2.5 million higher, due to costs of additional branches and office space acquired in the Merger and to increases in leasing costs. Marketing and advertising expense increased by $761 thousand primarily due to costs associated with digital and print advertising and sponsorships. Data processing expense increased $1.0 million primarily due to increased accounts and transaction volume primarily arising out of the Merger and to higher network expenses. Higher FDIC expenses of $668 thousand were due to both higher average assets and higher deposit levels. Other expenses increased $3.5 million primarily due to costs and valuations associated with other real estate owned, franchise tax and higher core deposit intangible amortization.

Total noninterest expenses totaled $27.4 million for the three months ended September 30, 2015, as compared to $25.1 million ($24.3 million on an operating basis) for the three months ended September 30, 2014, a 9% increase (13% increase on an operating basis). Cost increases for salaries and benefits were $441 thousand, due primarily to increased staff from the Merger, merit increases, and employee benefit expense increases. Premises and equipment expenses were $600 thousand higher, due to costs of additional branches and office space acquired in the Merger and to increases in leasing costs. Marketing and advertising expense increased by $218 thousand primarily due to costs associated with digital and print advertising. Data processing expense increased $404 thousand primarily due to increased accounts and transaction volume primarily arising out of the Merger. Legal, accounting and professional fees increased by $323 thousand primarily due to professional fees. Higher FDIC expenses of $221 thousand were due to both average asset growth and higher deposit levels. Other expenses increased $938 thousand primarily due to franchise tax and core deposit intangible amortization. The efficiency ratio improved to 42.04% for the third quarter of 2015, as compared to 50.90% (49.11% on an operating basis) for the third quarter of 2014.

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The ratio of common equity to total assets increased from 9.26% at September 30, 2014 to 12.13% at September 30, 2015, due primarily to the public offering of common stock completed during the first quarter of 2015 and to the issuance of common stock to consummate the Merger. As discussed later in “Capital Resources and Adequacy,” the regulatory capital ratios of the Bank and Company remain above well capitalized levels.

Net Interest Income and Net Interest Margin

Net interest income is the difference between interest income on earning assets and the cost of funds supporting those assets. Earning assets are composed primarily of loans and investment securities. The cost of funds represents interest expense on deposits, customer repurchase agreements and other borrowings. Noninterest bearing deposits and capital are other components representing funding sources (refer to discussion above under Results of Operations). Changes in the volume and mix of assets and funding sources, along with the changes in yields earned and rates paid, determine changes in net interest income.

For the first nine months of 2015, net interest income increased 35.3% over the same period for 2014. Average loans increased $1.4 billion and average deposits increased by $1.3 billion. The net interest margin was 4.32% for the nine months of 2015, as compared to 4.46% for the nine months of 2014. The Company believes its net interest margin remains favorable as compared to its peer banking companies.

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The tables below presents the average balances and rates of the major categories of the Company’s assets and liabilities for the three and nine months ended September 30, 2015 and 2014. Included in the tables are a measurement of interest rate spread and margin. Interest rate spread is the difference (expressed as a percentage) between the interest rate earned on earning assets less the interest rate paid on interest bearing liabilities. While the interest rate spread provides a quick comparison of earnings rates versus cost of funds, management believes that margin provides a better measurement of performance. The net interest margin (as compared to net interest spread) includes the effect of noninterest bearing sources in its calculation and is net interest income expressed as a percentage of average earning assets.

Eagle Bancorp, Inc.

Consolidated Average Balances, Interest Yields And Rates (Unaudited)

(dollars in thousands)

	Three Months Ended September 30,
	2015							2014
	Average Balance		Interest		Average Yield/Rate			Average Balance		Interest		Average Yield/Rate
ASSETS
Interest earning assets:
Interest bearing deposits with other banks and other short-term investments	$	374,778	$	228		0.24	%	$	209,997	$	125		0.24	%
Loans held for sale (1)		38,373		374		3.90	%		45,069		457		4.06	%
Loans (1) (2)		4,636,298		60,632		5.19	%		3,317,731		45,045		5.39	%
Investment securities available for sale (2)		491,800		2,745		2.21	%		395,528		2,255		2.26	%
Federal funds sold		3,586		2		0.22	%		9,534		4		0.17	%
Total interest earning assets		5,544,835		63,981		4.58	%		3,977,859		47,886		4.78	%
Total noninterest earning assets		281,109							137,024
Less: allowance for credit losses		49,540							43,969
Total noninterest earning assets		231,569							93,055
TOTAL ASSETS	$	5,776,404						$	4,070,914
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest bearing liabilities:
Interest bearing transaction	$	202,885	$	97		0.19	%	$	116,315	$	35		0.12	%
Savings and money market		2,453,141		2,092		0.34	%		1,945,816		1,575		0.32	%
Time deposits		797,472		1,550		0.77	%		372,695		579		0.62	%
Total interest bearing deposits		3,453,498		3,739		0.43	%		2,434,826		2,189		0.36	%
Customer repurchase agreements		56,624		33		0.23	%		69,579		38		0.21	%
Other short-term borrowings		3		-		-			-		-		-
Long-term borrowings		72,509		1,124		6.07	%		82,670		1,024		4.85	%
Total interest bearing liabilities		3,582,634		4,896		0.54	%		2,587,075		3,251		0.50	%
Noninterest bearing liabilities:
Noninterest bearing demand		1,389,208							1,035,405
Other liabilities		26,283							11,064
Total noninterest bearing liabilities		1,415,491							1,046,469
Shareholders’ equity		778,279							437,370
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	5,776,404						$	4,070,914
Net interest income			$	59,085						$	44,635
Net interest spread						4.04	%						4.28	%
Net interest margin						4.23	%						4.45	%
Cost of funds						0.35	%						0.33	%

(1)	Loans placed on nonaccrual status are included in average balances. Net loan fees and late charges included in interest income on loans totaled $3.2 million and $3.1 million for the three months ended September 30, 2015 and 2014, respectively.
(2)	Interest and fees on loans and investments exclude tax equivalent adjustments.

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Eagle Bancorp, Inc.

Consolidated Average Balances, Interest Yields and Rates (Unaudited)

(dollars in thousands)

	Nine Months Ended September 30,
	2015							2014
	Average Balance		Interest		Average Yield/Rate			Average Balance		Interest		Average Yield/Rate
ASSETS
Interest earning assets:
Interest bearing deposits with other banks and other short-term investments	$	336,545	$	604		0.24	%	$	209,332	$	379		0.24	%
Loans held for sale (1)		45,863		1,288		3.74	%		31,571		957		4.04	%
Loans (1) (2)		4,505,092		176,775		5.25	%		3,148,943		127,224		5.40	%
Investment securities available for sale (2)		412,912		7,189		2.33	%		398,298		6,911		2.32	%
Federal funds sold		6,992		13		0.25	%		8,867		11		0.17	%
Total interest earning assets		5,307,404		185,869		4.68	%		3,797,011		135,482		4.77	%
Total noninterest earning assets		279,388							135,526
Less: allowance for credit losses		48,240							42,628
Total noninterest earning assets		231,148							92,898
TOTAL ASSETS	$	5,538,552						$	3,889,909
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest bearing liabilities:
Interest bearing transaction	$	178,256	$	208		0.16	%	$	115,561	$	135		0.16	%
Savings and money market		2,379,643		6,066		0.34	%		1,895,602		4,583		0.32	%
Time deposits		778,375		4,394		0.75	%		399,994		2,207		0.74	%
Total interest bearing deposits		3,336,274		10,668		0.43	%		2,411,157		6,925		0.38	%
Customer repurchase agreements		54,945		94		0.23	%		63,768		107		0.22	%
Other short-term borrowings		27,492		54		-			-		-		-
Long-term borrowings		86,640		3,687		5.61	%		53,915		1,788		4.37	%
Total interest bearing liabilities		3,505,351		14,503		0.55	%		2,528,840		8,820		0.47	%
Noninterest bearing liabilities:
Noninterest bearing demand		1,275,050							929,115
Other liabilities		25,995							10,663
Total noninterest bearing liabilities		1,301,045							939,778
Shareholders’ equity		732,156							421,291
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	5,538,552						$	3,889,909
Net interest income			$	171,366						$	126,662
Net interest spread						4.13	%						4.30	%
Net interest margin						4.32	%						4.46	%
Cost of funds						0.36	%						0.31	%

(1)	Loans placed on nonaccrual status are included in average balances. Net loan fees and late charges included in interest income on loans totaled $8.9 million and $8.4 million for the nine months ended September 30, 2015 and 2014, respectively.
(2)	Interest and fees on loans and investments exclude tax equivalent adjustments.

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Provision for Credit Losses

The provision for credit losses represents the amount of expense charged to current earnings to fund the allowance for credit losses. The amount of the allowance for credit losses is based on many factors, which reflect management’s assessment of the risk in the loan portfolio. Those factors include historical losses, economic conditions and trends, the value and adequacy of collateral, volume and mix of the portfolio, performance of the portfolio, and internal loan processes of the Company and Bank.

Management has developed a comprehensive analytical process to monitor the adequacy of the allowance for credit losses. This process and guidelines were developed utilizing, among other factors, the guidance from federal banking regulatory agencies. The results of this process, in combination with conclusions of the Bank’s outside loan review consultant, support management’s assessment as to the adequacy of the allowance at the balance sheet date. Please refer to the discussion under the caption “Critical Accounting Policies” for an overview of the methodology management employs on a quarterly basis to assess the adequacy of the allowance and the provisions charged to expense.

During the first nine months of 2015, the allowance for credit losses increased $4.2 million, reflecting $10.0 million in provision for credit losses and $5.8 million in net charge-offs during the period. The provision for credit losses was $10.0 million for the nine months ended September 30, 2015 as compared to $7.2 million for the nine months ended September 30, 2014. At September 30, 2015, the allowance for credit losses represented 1.05% of loans outstanding, compared to 1.07% at December 31, 2014 and 1.31% at September 30, 2014. The higher provisioning in the first nine months of 2015, as compared to the first nine months of 2014, is due to higher net charge-offs. Net charge-offs of $5.8 million represented an annualized 0.17% of average loans, excluding loans held for sale, in the first nine months of 2015, as compared to $3.1 million or an annualized 0.13% of average loans, excluding loans held for sale, for the same period of 2014.

As part of its comprehensive loan review process, the Bank’s Board of Directors and Loan Committee or Credit Review Committee carefully evaluate loans which are past-due 30 days or more. The Committees make a thorough assessment of the conditions and circumstances surrounding each delinquent loan. The Bank’s loan policy requires that loans be placed on nonaccrual if they are ninety days past-due, unless they are well secured and in the process of collection. Additionally, Credit Administration specifically analyzes the status of development and construction projects, sales activities and utilization of interest reserves in order to carefully and prudently assess potential increased levels of risk requiring additional reserves.

The maintenance of a high quality loan portfolio, with an adequate allowance for possible credit losses, will continue to be a primary management objective for the Company.

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The following table sets forth activity in the allowance for credit losses for the periods indicated.

	Nine Months Ended September 30,
(dollars in thousands)	2015			2014
Balance at beginning of year	$	46,075		$	40,921
Charge-offs:
Commercial		4,693			1,968
Income producing - commercial real estate		651			22
Owner occupied - commercial real estate		-			35
Real estate mortgage - residential		-			138
Construction - commercial and residential		-			1,426
Construction - C&I (owner occupied)		-			-
Home equity		644			379
Other consumer		182			84
Total charge-offs		6,170			4,052
Recoveries:
Commercial		135			802
Income producing - commercial real estate		26			4
Owner occupied - commercial real estate		2			7
Real estate mortgage - residential		5			-
Construction - commercial and residential		114			77
Construction - C&I (owner occupied)		-			-
Home equity		5			8
Other consumer		85			8
Total recoveries		372			906
Net charge-offs		5,798			3,146
Additions charged to operations		10,043			7,179
Balance at end of period	$	50,320		$	44,954
Annualized ratio of net charge-offs during the period to average loans outstanding during the period		0.17	%		0.13	%

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The following table reflects the allocation of the allowance for credit losses at the dates indicated. The allocation of the allowance to each category is not necessarily indicative of future losses or charge-offs and does not restrict the use of the allowance to absorb losses in any category.

	September 30, 2015					December 31, 2014					September 30, 2014
(dollars in thousands)	Amount		% (1)			Amount		% (1)			Amount		% (1)
Commercial	$	11,640		21	%	$	13,222		21	%	$	13,173		23	%
Income producing - commercial real estate		13,715		42	%		11,442		40	%		11,201		41	%
Owner occupied - commercial real estate		3,100		10	%		2,954		11	%		3,315		10	%
Real estate mortgage - residential		1,066		3	%		1,259		3	%		980		4	%
Construction - commercial and residential		17,765		20	%		14,982		18	%		13,731		18	%
Construction - C&I (owner occupied)		1,159		1	%		643		1	%		905		1	%
Home equity		1,606		3	%		1,469		3	%		1,362		3	%
Other consumer		269		-			104		3	%		287		-
Total allowance	$	50,320		100	%	$	46,075		100	%	$	44,954		100	%

(1) Represents the percent of loans in each category to total loans.

Nonperforming Assets

As shown in the table below, the Company’s level of nonperforming assets, which are comprised of loans delinquent 90 days or more, nonaccrual loans, which includes the nonperforming portion of troubled debt restructurings (“TDRs”) and other real estate owned, totaled $24.4 million at September 30, 2015 representing 0.41% of total assets, as compared to $35.7 million of nonperforming assets, or 0.68% of total assets, at December 31, 2014 and $38.0 million of nonperforming assets, or 0.91% of total assets, at September 30, 2014. The Company had no accruing loans 90 days or more past due at September 30, 2015, December 31, 2014 or September 30, 2014. Management remains attentive to early signs of deterioration in borrowers’ financial conditions and to taking the appropriate action to mitigate risk. Furthermore, the Company is diligent in placing loans on nonaccrual status and believes, based on its loan portfolio risk analysis, that its allowance for credit losses, at 1.05% of total loans at September 30, 2015, is adequate to absorb potential credit losses within the loan portfolio at that date.

Included in nonperforming assets are loans that the Company considers to be impaired. Impaired loans are defined as those as to which we believe it is probable that we will not collect all amounts due according to the contractual terms of the loan agreement, as well as those loans whose terms have been modified in a TDR that have not shown a period of performance as required under applicable accounting standards. Valuation allowances for those loans determined to be impaired are evaluated in accordance with ASC Topic 310—“Receivables,” and updated quarterly. For collateral dependent impaired loans, the carrying amount of the loan is determined by current appraised value less estimated costs to sell the underlying collateral, which may be adjusted downward under certain circumstances for actual events and/or changes in market conditions. For example, current average actual selling prices less average actual closing costs on an impaired multi-unit real estate project may indicate the need for an adjustment in the appraised valuation of the project, which in turn could increase the associated ASC Topic 310 specific reserve for the loan. Generally, all appraisals associated with impaired loans are updated on a not less than annual basis.

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Loans are considered to have been modified in a TDR when, due to a borrower's financial difficulties, the Company makes unilateral concessions to the borrower that it would not otherwise consider. Concessions could include interest rate reductions, principal or interest forgiveness, forbearance, and other actions intended to minimize economic loss and to avoid foreclosure or repossession of collateral. Alternatively, management, from time-to-time and in the ordinary course of business, implements renewals, modifications, extensions, and/or changes in terms of loans to borrowers who have the ability to repay on reasonable market-based terms, as circumstances may warrant. Such modifications are not considered to be TDRs, as the accommodation of a borrower's request does not rise to the level of a concession if the modified transaction is at market rates and terms and/or the borrower is not experiencing financial difficulty. For example: (1) adverse weather conditions may create a short term cash flow issue for an otherwise profitable retail business which suggests a temporary interest only period on an amortizing loan; (2) there may be delays in absorption on a real estate project which reasonably suggests extension of the loan maturity at market terms; or (3) there may be maturing loans to borrowers with demonstrated repayment ability who are not in a position at the time of maturity to obtain alternate long-term financing. The most common change in terms provided by the Company is an extension of an interest only term. The determination of whether a restructured loan is a TDR requires consideration of all of the facts and circumstances surrounding the change in terms, and the exercise of prudent business judgment. The Company had ten TDR’s at September 30, 2015 totaling approximately $15.4 million. Nine of these loans, totaling approximately $15.2 million, are performing under the modified terms, and as a result are not disclosed in the table below. During the nine months of 2015, there were no defaults on restructured loans, as compared to the first nine months of 2014, which had one default totaling approximately $2.1 million on a restructured loan. A default is considered to have occurred once the TDR is past due 90 days or more or it has been placed on nonaccrual.  There were no nonperforming TDRs reclassified to nonperforming loans as of September 30, 2015. There was one nonperforming TDR totaling $2.1 million reclassified to nonperforming loans during the nine months ended September 30, 2014. During the nine months ended September 30, 2014, five nonperforming TDRs totaling $8.3 million were removed from TDR status after the loans migrated from nonperforming loans. Two nonperforming TDRs totaling $6.1 million were sold during the second quarter, an owner occupied loan totaling $4.1 million and a commercial loan totaling $2.0 million. One nonperforming TDR totaling approximately $2.0 million was reclassified to OREO after the Company took possession of the underlying collateral. The Company was paid off on another TDR totaling $217 thousand. Finally, one TDR totaling $95 thousand was charged-off. Commercial and consumer loans modified in a TDR are closely monitored for delinquency as an early indicator of possible future default. If loans modified in a TDR subsequently default, the Company evaluates the loan for possible further impairment. The allowance may be increased, adjustments may be made in the allocation of the allowance, or partial charge-offs may be taken to further write-down the carrying value of the loan. There were three loans modified in a TDR during the three months ended September 30, 2015. For the nine months ended September 30, 2015, there were a total of four loans modified in a TDR. There was one loan modified in a TDR during the three and nine months ended September 30, 2014.    

Total nonperforming loans amounted to $14.5 million at September 30, 2015 (0.30% of total loans), compared to $22.4 million at December 31, 2014 (0.52% of total loans) and $29.3 million at September 30, 2014 (0.85% of total loans). The decrease in the ratio of nonperforming loans to total loans at September 30, 2015 as compared to September 30, 2014 was due to a decline in the level of nonperforming loans and to loan growth. 

Included in nonperforming assets at September 30, 2015 was $10.0 million of OREO, consisting of ten foreclosed properties. The Company had ten foreclosed properties with a net carrying value of $13.2 million at December 31, 2014 and seven foreclosed properties with a net carrying value of $8.6 million at September 30, 2014. OREO properties are carried at fair value or appraised value less estimated costs to sell. It is the Company's policy to obtain third party appraisals prior to foreclosure, and to obtain updated third party appraisals on OREO properties not less frequently than annually. Generally, the Company would obtain updated appraisals or evaluations where it has reason to believe, based upon market indications (such as comparable sales, legitimate offers below carrying value, broker indications and similar factors), that the current appraisal does not accurately reflect current value. During the first nine months of 2015, five foreclosed properties with a net carrying value of $4.2 million were sold for a net loss of $209 thousand. The decrease in OREO at September 30, 2015, is due to the sale of five OREO properties and a $750 thousand write down of one OREO property.

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The following table shows the amounts of nonperforming assets at the dates indicated.

	September 30,						December 31,
(dollars in thousands)	2015			2014			2014
Nonaccrual Loans:
Commercial	$	4,828		$	15,431		$	12,975
Income producing - commercial real estate		6,721			2,553			2,645
Owner occupied - commercial real estate		1,281			3,502			1,324
Real estate mortgage - residential		333			350			346
Construction - commercial and residential		571			6,919			3,697
Construction - C&I (owner occupied)		-			-			-
Home equity		661			588			1,398
Other consumer		72			-			58
Accrual loans-past due 90 days		-			-			-
Total nonperforming loans (1)		14,467			29,343			22,443
Other real estate owned		9,952			8,623			13,224
Total nonperforming assets	$	24,419		$	37,966		$	35,667
Coverage ratio, allowance for credit losses to total nonperforming loans		347.82	%		153.20	%		205.30	%
Ratio of nonperforming loans to total loans		0.30	%		0.85	%		0.52	%
Ratio of nonperforming assets to total assets		0.41	%		0.91	%		0.68	%

(1) Nonaccrual loans reported in the table above include loans that migrated from performing troubled debt restructuring. There were no loans that migrated from performing TDR during the nine months ended September 30, 2015, as compared to the nine months ended September 31, 2014 which had one TDR totaling $2.1 million reclassified to nonperforming loans.

Significant variation in the amount of nonperforming loans may occur from period to period because the amount of nonperforming loans depends largely on the condition of a relatively small number of individual credits and borrowers relative to the total loan portfolio.

At September 30, 2015, there were $25.8 million of performing loans considered potential problem loans, defined as loans that are not included in the 90 day past due, nonaccrual or restructured categories, but for which known information about possible credit problems causes management to be uncertain as to the ability of the borrowers to comply with the present loan repayment terms, which may in the future result in disclosure in the past due, nonaccrual or restructured loan categories. The $25.8 million in potential problem loans at September 30, 2015 compared to $23.9 million at December 31, 2014, and $15.6 million at September 30, 2014.  The Company has taken a conservative posture with respect to risk rating its loan portfolio. Based upon their status as potential problem loans, these loans receive heightened scrutiny and ongoing intensive risk management. Additionally, the Company's loan loss allowance methodology incorporates increased reserve factors for certain loans considered potential problem loans as compared to the general portfolio. See “Provision for Credit Losses” for a description of the allowance methodology.

Noninterest Income

Total noninterest income includes service charges on deposits, gain on sale of loans, gain on sale of investment securities, loss on extinguishment of debt, income from BOLI and other income.

Total noninterest income for the nine months ended September 30, 2015 increased to $20.1 million from $13.0 million for the nine months ended September 30, 2014, a 54.5% increase. This increase was primarily due to $5.1 million higher gains on the sale of residential mortgage loans and to gains realized on the sale of investment securities of $2.2 million offset by a $1.1 million loss on the early extinguishment of debt due to the early payoff of FHLB advances. Excluding investment securities gains and the loss on early extinguishment of debt, total noninterest income was $19.0 million for the nine months ended September 30, 2015, as compared to $13.0 million for the same period in 2014, a 46.2% increase.

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Total noninterest income for the three months ended September 30, 2015 increased to $6.1 million from $4.8 million for the three months ended September 30, 2014, a 28% increase. This increase was primarily due to an increase of $1.1 million in gains on the sale of residential mortgage loans, offset by a decrease in SBA gains.

For the nine months ended September 30, 2015, service charges on deposit accounts increased by $352 thousand to $4.0 million from $3.6 million in the same period in 2014, an increase of 10%. For the three months ended September 30, 2015, service charges on deposit accounts increased $147 thousand, an increase of 12% from the same three month period in 2014. The increase for the nine and three month periods was primarily related to growth in the number of accounts.

The Company originates residential mortgage loans and utilizes both “mandatory delivery” and “best efforts” forward loan sale commitments to sell those loans, servicing released. Sales of these mortgage loans yielded gains of $8.7 million for the nine months ended September 30, 2015 compared to $3.6 million in the same period in 2014, as refinancing activity increased beginning in the first quarter of 2015. For the three months ended September 30, 2015 and 2014 gains on the sales of residential mortgages were $2.4 million and $1.3 million, respectively. Loans sold are subject to repurchase in circumstances where documentation is deficient or the underlying loan becomes delinquent or pays off within a specified period following loan funding and sale. The Bank considers these potential recourse provisions to be a minimal risk, but has established a reserve under generally accepted accounting principles for possible repurchases. There were no repurchases due to fraud by the borrower during the nine months ended September 30, 2015. The reserve amounted to $153 thousand at September 30, 2015 and is included in other liabilities on the Consolidated Balance Sheets. The Bank does not originate “sub-prime” loans and has no exposure to this market segment.

The Company is an originator of SBA loans and its practice is to sell the guaranteed portion of those loans at a premium. Income from this source was $694 thousand and $107 thousand for the nine and three months ended September 30, 2015 compared to $1.1 million and $504 thousand for the same nine and three month periods in 2014. Activity in SBA loan sales to secondary markets can vary widely from quarter to quarter.

A $1.1 million loss on the early extinguishment of debt was recorded in March of 2015 due to the early payoff of FHLB advances. This decision was made in light of deposit growth in the quarter and expected benefits to the cost of funds going forward.

Other income totaled $4.5 million for the nine months ended September 30, 2015 as compared to $3.8 million for the same period in 2014, an increase of 19%. ATM fees increased from $870 thousand for the nine months ended September 30, 2014 to $999 thousand for the same period in 2015, a 15% increase. SBA servicing fees increased from $185 thousand for the nine months ended September 30, 2014 to $243 thousand for the same period in 2015, a 31% increase. Noninterest loan fees increased from $1.9 million for the nine months ended September 30, 2014 to $2.5 million for the same period in 2015, a 33% increase. Other noninterest fee income was $711 thousand for the nine months ended September 30, 2015 compared to $807 thousand for the same period in 2014, a 12% decrease.

Other income totaled $1.8 million for the three months ended September 30, 2015 as compared to $1.4 million for the same period in 2014, an increase of 26%. ATM fees increased from $307 thousand for the three months ended September 30, 2014 to $355 thousand for the same period in 2015, a 16% increase. Noninterest loan fees increased from $577 thousand for the three months ended September 30, 2014 to $971 thousand for the same period in 2015, a 68% increase. Other noninterest fee income decreased $105 thousand for the three months ended September 30, 2015 from $481 thousand for the same period in 2014, a 22% decrease.

Noninterest Expense

Total noninterest expenses totaled $82.1 million for the nine months ended September 30, 2015, as compared to $70.4 million ($68.9 million on an operating basis) for the nine months ended September 30, 2014, a 16.6% increase (19.1% on an operating basis). Total noninterest expenses totaled $27.4 million for the three months ended September 30, 2015, as compared to $25.1 million ($24.3 million on an operating basis) for the three months ended September 30, 2014, a 9% increase (13% increase on an operating basis).

Salaries and employee benefits were $45.8 million for the nine months ended September 30, 2015, as compared to $41.6 million for 2014, a 10% increase. Salaries and employee benefits were $15.4 million for the three months ended September 30, 2015, as compared to $14.9 million for the three months ended September 30, 2014, a 3% increase. Cost increases for salaries and benefits for both the nine and three month periods were due primarily to increased staff from the Merger, merit increases, employee benefit expense increases and incentive compensation. At September 30, 2015, the Company’s full time equivalent staff numbered 432, as compared to 427 at December 31, 2014 and 389 at September 30, 2014.

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Premises and equipment expenses amounted to $12.1 million for the nine months ended September 30, 2015 as compared to $9.6 million for the same period in 2014, a 26% increase. Premises and equipment expenses amounted to $4.0 million for the three months ended September 30, 2015 as compared to $3.4 million for the same period in 2014, an 18% increase. For both the nine and three month periods premises and equipment expenses were higher due to costs of additional branches and office space acquired in the Merger and to increases in leasing costs. Additionally, for the nine and three months ended September 30, 2015, the Company recognized $274 thousand and $112 thousand of sublease revenue as compared to $84 thousand and $26 thousand for the same periods in 2014. The sublease revenue is accounted for as a reduction to premises and equipment expenses.

Marketing and advertising expenses increased from $1.4 million for the nine months ended September 30, 2014 to $2.2 million for the same period in 2015, a 54% increase. Marketing and advertising expenses increased from $544 thousand for the three months ended September 30, 2014 to $762 thousand for the same period in 2015, a 40% increase.  The increase in both the nine and three month periods was due to costs associated with digital and print advertising and sponsorships.

Data processing expenses increased from $4.6 million for the nine months ended September 30, 2014 to $5.6 million in the same period in 2015, a 22% increase. Data processing expenses increased from $1.6 million for the three months ended September 30, 2014 to $2.0 million in the same period in 2015, a 26% increase. The increase in expenses for both the nine and three month periods were primarily due to increased accounts and transaction volume primarily arising out of the Merger.

Legal, accounting and professional fees increased from $2.5 million for the nine months ended September 30, 2014 to $2.9 million in the same period in 2015, a 16% increase. Legal, accounting and professional fees increased from $740 thousand for the three months ended September 30, 2014 to $1.1 million in the same period in 2015, a 44% increase. The increase in expenses for both the nine and three month periods were primarily due to professional fees for accounting and legal services.

FDIC insurance premiums were $2.4 million for the nine months ended September 30, 2015, as compared to $1.7 million in 2014, a 40% increase. FDIC insurance premiums were $794 thousand for the three months ended September 30, 2015, as compared to $573 thousand in 2014, a 39% increase. The increase for the both the nine and three month periods were due to higher deposit levels and average asset growth (resulting in part from the Merger) which is a principal factor in the calculation of the amount of insurance premiums.

For the nine months ended September 30, 2015, other expenses amounted to $11.1 million as compared to $7.6 million for the same period in 2014, an increase of 46%. For the three months ended September 30, 2015, other expenses amounted to $3.5 million as compared to $2.5 million for the same period in 2014, an increase of 37%. The major components of cost in this category include core deposit intangible amortization, franchise taxes, director compensation and expenses for the operations of OREO property, as well as valuation adjustments on OREO property. The increase for the both the nine and three month periods was primarily due to costs and valuations associated with OREO, franchise tax and core deposit intangible amortization.

The efficiency ratio, which measures the ratio of noninterest expense to total revenue, improved to 42.86% for the first nine months of 2015 as compared to 50.38% (49.33% on an operating basis) for the same period in 2014. As a percentage of average assets, total noninterest expense (annualized) improved to 1.98% for the first nine months of 2015 as compared to 2.42% (2.37% on an operating basis) for the same period in 2014. For the third quarter of 2015 the efficiency ratio improved to 42.04% as compared to 50.90% (49.11% on an operating basis) for the third quarter of 2014. As a percentage of average assets, total noninterest expense (annualized) improved to 1.88% for the third quarter of 2015 as compared to 2.45% (2.36% on an operating basis) for the same period in 2014. Cost control remains a significant operating objective of the Company.

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Income Tax Expense

The Company’s ratio of income tax expense to pre-tax income (“effective tax rate”) increased to 37.8% for the nine months ended September 30, 2015 as compared to 36.4% for the same period in 2014. For the third quarter of 2015 the effective tax rate was 37.8% compared to 36.4% for the same period in 2014. The higher effective tax rate for the nine and three months ended September 30, 2015 relates to relatively lower levels of tax exempt income.

FINANCIAL CONDITION

Summary

Total assets at September 30, 2015 were $5.89 billion, a 41% increase as compared to $4.17 billion at September 30, 2014, and a 12% increase as compared to $5.25 billion at December 31, 2014. Total loans (excluding loans held for sale) were $4.78 billion at September 30, 2015, a 39% increase as compared to $3.43 billion at September 30, 2014, and an 11% increase as compared to $4.31 billion at December 31, 2014. Loans held for sale amounted to $35.7 million at September 30, 2015 as compared to $41.3 million at September 30, 2014, a 13% decrease, and $44.3 million at December 31, 2014, a 19% decrease. The investment portfolio totaled $524.3 million at September 30, 2015, a 37% increase from the $382.5 million balance at September 30, 2014. As compared to December 31, 2014, the investment portfolio at September 30, 2015 increased by $142.0 million or 37%.

Total deposits at September 30, 2015 were $4.93 billion compared to deposits of $3.53 billion at September 30, 2014, a 39% increase and $4.31 billion at December 31, 2014, a 14% increase. Total borrowed funds (excluding customer repurchase agreements) were $70.0 million at September 30, 2015 as compared to $109.3 million at September 30, 2014, a 36% decrease, and $219.3 million at December 31, 2014, a 68% decrease. The decline in borrowed funds in the first nine months of 2015 as compared to December 31, 2014 was the result of the payoff of all FHLB advances and the $9.3 million in subordinated notes due 2021.

Total shareholders’ equity at September 30, 2015 increased to $786.1 million, compared to shareholders’ equity of $442.6 million at September 30, 2014, a 78% increase, and $620.8 million at December 31, 2014, a 27% increase. The increases are primarily due to retained earnings, the public offering of common stock completed during the first quarter of 2015, which netted approximately $94.5 million, as well as the issuance of common stock to consummate the Merger. The ratio of common equity to total assets was 12.13% at September 30, 2015 as compared to 9.26% at September 30, 2014 and 10.46% at December 31, 2014. The Company’s capital position remains substantially in excess of regulatory requirements for well capitalized status, with a total risk based capital ratio of 13.80% at September 30, 2015, as compared to 14.48% at September 30, 2014 and 12.97% at December 31, 2014. In addition, the tangible common equity ratio (tangible common equity to tangible assets) was 10.46% at September 30, 2015, compared to 9.19% at September 30, 2014 and 8.54% at December 31, 2014.

Effective January 1, 2015, the Company, Bank, and all other banks of similar size became subject to new capital requirements. These new requirements create a new required ratio for common equity Tier 1 ("CETI") capital, increase the leverage and Tier 1 capital ratios, change the risk weight of certain assets for purposes of the risk-based capital ratios, create an additional capital conservation buffer over the required capital ratios and change what qualifies as capital for purposes of meeting these various capital requirements. Under the new standards for 2015, in order to be considered well-capitalized, the Bank must have a CETI ratio of 6.5% (new), a Tier 1 risk-based ratio of 8.0% (increased from 6.0%), a total risk-based capital ratio of 10.0% (unchanged) and a leverage ratio of 5.0% (unchanged). The Company and the Bank meets all these new requirements, including the full capital conservation buffer; however, beginning in 2016, failure to maintain the required capital conservation buffer would limit the ability of the Company and the Bank to pay dividends, repurchase shares or pay discretionary bonuses.

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Loans, net of amortized deferred fees and costs, at September 30, 2015, December 31, 2014 and September 30, 2014 by major category are summarized below.

	September 30, 2015						December 31, 2014						September 30, 2014
(dollars in thousands)	Amount			%			Amount			%			Amount			%
Commercial	$	1,007,659			21	%	$	916,226			21	%	$	798,489			23	%
Income producing - commercial real estate		2,022,950			42	%		1,703,172			40	%		1,382,839			41	%
Owner occupied - commercial real estate		489,657			10	%		461,581			11	%		337,422			10	%
Real estate mortgage - residential		147,720			3	%		148,018			3	%		126,263			4	%
Construction - commercial and residential		927,265			20	%		793,432			18	%		634,736			18	%
Construction - C&I (owner occupied)		60,487			1	%		58,032			1	%		41,846			1	%
Home equity		115,346			3	%		122,536			3	%		107,291			3	%
Other consumer		5,881			-			109,402			3	%		3,662			-
Total loans		4,776,965			100	%		4,312,399			100	%		3,432,548			100	%
Less: allowance for credit losses		(50,320	)					(46,075	)					(44,954	)
Net loans	$	4,726,645					$	4,266,324					$	3,387,594

In its lending activities, the Company seeks to develop and expand relationships with clients whose businesses and individual banking needs will grow with the Bank. Superior customer service, local decision making, and accelerated turnaround time from application to closing have been significant factors in growing the loan portfolio, and meeting the lending needs in the markets served, while maintaining sound asset quality.

Loans outstanding reached $4.78 billion at September 30, 2015, an increase of $465 million or 11% as compared to $4.31 billion at December 31, 2014, and increased $1.34 billion or 39% as compared to $3.43 billion at September 30, 2014. Growth in loans over the last twelve months was in part due to the Merger, which added approximately $800 million in loans. Excluding balances acquired in the Merger, and the sale of the indirect consumer loan portfolio, organic loan growth over the last twelve months was 18%.

The Company sold the indirect consumer loan portfolio acquired in the Merger, amounting to approximately $80.3 million as of the time of sale. The sale of this non-strategic loan class allows the Company to deploy the funds into commercial and commercial real estate loans, its core competency, improve its yield on earning assets and reduce operating expenses. The estimated loss of approximately $900 thousand has been included as an adjustment to the intangibles established in the Merger. The transaction closed on July 24, 2015.

The loan growth during the first nine months of 2015 was predominantly in the investment commercial real estate, owner occupied commercial real estate, and commercial segments, along with increases in the construction – commercial and residential. Despite an increased level of in-market competition for business, the Bank continued to experience strong organic loan growth across the portfolio. Multi-family commercial real estate leasing in the Bank’s market area has held up well, particularly for well-located close-in projects, while suburban office leasing softened somewhat.  Overall, commercial real estate values have generally held up well with price escalation in prime pockets. The housing market has remained stable to increasing, with well-located, Metro accessible properties garnering a premium.

Owner occupied commercial real estate and owner occupied commercial real estate construction represent 12% of the loan portfolio. The Bank has a large portion of its loan portfolio related to real estate, with 72% consisting of commercial real estate and real estate construction loans. When only owner occupied commercial real estate is excluded, the percentage of total loans represented by commercial real estate decreases to 62%. Real estate also serves as collateral for loans made for other purposes, resulting in 83% of all loans being secured by real estate.

Deposits and Other Borrowings 

The principal sources of funds for the Bank are core deposits, consisting of demand deposits, money market accounts, NOW accounts, and savings accounts. Additionally, the Bank obtains certificates of deposits from the local market areas surrounding the Bank’s offices. The deposit base includes transaction accounts, time and savings accounts and accounts which customers use for cash management and which provide the Bank with a source of fee income and cross-marketing opportunities, as well as an attractive source of lower cost funds. To meet funding needs during periods of high loan demand and seasonal variations in core deposits, the Bank utilizes alternative funding sources such as secured borrowings from the FHLB, federal funds purchased lines of credit from correspondent banks and brokered deposits from regional and national brokerage firms and Promontory Interfinancial Network, LLC (“Promontory”).

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For the nine months ended September 30, 2015, noninterest bearing deposits increased $227 million as compared to December 31, 2014, while interest bearing deposits increased by $389 million during the same period. Average total deposits for the nine months of 2015 were $4.61 billion, as compared to $3.34 billion for the same period in 2014, a 38% increase. Growth in deposits over the last twelve months was in part due to the Merger, which added approximately $645 million in deposits. Excluding balances acquired in the Merger, organic deposit growth over the last twelve months was 21%.

From time to time, when appropriate in order to fund strong loan demand, the Bank accepts brokered time deposits, generally in denominations of less than $100 thousand, from a regional brokerage firm, and other national brokerage networks, including Promontory. Additionally, the Bank participates in the Certificates of Deposit Account Registry Service (“CDARS”) and the Insured Cash Sweep product (“ICS”), which provides for reciprocal (“two-way”) transactions among banks facilitated by Promontory for the purpose of maximizing FDIC insurance. These reciprocal CDARS and ICS funds are classified as brokered deposits, although bank regulators have recognized that these reciprocal deposits have many characteristics of core deposits. The Bank also is able to obtain one way CDARS deposits and participates in Promontory’s Insured Network Deposit (“IND”). At September 30, 2015, total deposits included $580.9 million of brokered deposits (excluding the CDARS and ICS two-way), which represented 12% of total deposits. At December 31, 2014, total brokered deposits (excluding the CDARS and ICS two-way) were $506.5 million, or 12% of total deposits. The CDARS and ICS two-way component represented $625.4 million, or 13% of total deposits and $391.3 million or 9% of total deposits at September 30, 2015 and December 31, 2014, respectively. These sources are believed by the Company to represent a reliable and cost efficient alternative funding source for the Bank. However, to the extent that the condition or reputation of the Company or Bank deteriorates, or to the extent that there are significant changes in market interest rates which the Company and Bank do not elect to match, we may experience an outflow of brokered deposits. In that event we would be required to obtain alternate sources for funding.

At September 30, 2015, the Company had $1.4 billion in noninterest bearing demand deposits, representing 28% of total deposits, compared to $1.18 billion of noninterest bearing demand deposits at December 31, 2014, or 27% of total deposits. These deposits are primarily business checking accounts on which the payment of interest was prohibited by regulations of the Federal Reserve. Since July 2011, banks are no longer prohibited from paying interest on demand deposits account, including those from businesses. To date, the Bank has elected not to pay interest on business checking accounts, nor is the payment of such interest a prevalent practice in the Bank’s market area at present. It is not clear over the long-term what effect the elimination of this prohibition will have on the Bank’s interest expense, allocation of deposits, deposit pricing, loan pricing, net interest margin, ability to compete, ability to establish and maintain customer relationships, or profitability. Payment of interest on these deposits could have a significant negative impact on the Company’s net interest income and net interest margin, net income, and the return on assets and equity, although no such effect is currently anticipated.

As an enhancement to the basic noninterest bearing demand deposit account, the Bank offers a sweep account, or “customer repurchase agreement,” allowing qualifying businesses to earn interest on short-term excess funds which are not suited for either a certificate of deposit or a money market account. The balances in these accounts were $64.9 million at September 30, 2015 compared to $61.1 million at December 31, 2014. Customers repurchase agreements are not deposits and are not insured by the FDIC, but are collateralized by U.S. government agency securities and / or U.S. agency backed mortgage backed securities. These accounts are particularly suitable to businesses with significant fluctuation in the levels of cash flows. Attorney and title company escrow accounts are an example of accounts which can benefit from this product, as are customers who may require collateral for deposits in excess of FDIC insurance limits but do not qualify for other pledging arrangements. This program requires the Bank to maintain a sufficient investment securities level to accommodate the fluctuations in balances which may occur in these accounts.

The Company had no outstanding balances under its federal funds purchase lines of credit provided by correspondent banks at September 30, 2015 and December 31, 2014.

The Bank had no borrowings outstanding under its credit facility from the FHLB at September 30, 2015, compared to $30.0 million of borrowings outstanding at September 30, 2014, and $140 million of borrowings outstanding at December 31, 2014. Outstanding FHLB advances are secured by collateral consisting of a blanket lien on qualifying loans in the Bank’s residential and commercial mortgage and home equity loan portfolios.

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The Company has a credit facility with a regional bank, secured by a portion of the stock of the Bank, pursuant to which the Company may borrow, on a revolving basis, up to $50 million for working capital purposes, to finance capital contributions to the Bank and ECV. There were no amounts outstanding under this credit at September 30, 2015 or December 31, 2014. For additional information on this credit facility please refer to “Capital Resources and Adequacy” below.

The Company redeemed the remaining balance of $4.1 million of its $9.3 million of subordinated notes, due 2021 during the three months ended September 30, 2015.

The only long-term borrowing outstanding at September 30, 2015 was the Company’s  August 5, 2014, issuance  of $70.0 million of subordinated notes, due September 1, 2024. For additional information on the subordinated notes, please refer to “Capital Resources and Adequacy” below.

Liquidity Management

Liquidity is a measure of the Company’s and Bank’s ability to meet loan demand and to satisfy depositor withdrawal requirements in an orderly manner. The Bank’s primary sources of liquidity consist of cash and cash balances due from correspondent banks, loan repayments, federal funds sold and other short-term investments, maturities and sales of investment securities, income from operations and new core deposits into the Bank. The Bank’s investment portfolio of debt securities is held in an available-for-sale status which allows for flexibility, subject to holdings held as collateral for customer repurchase agreements, to generate cash from sales as needed to meet ongoing loan demand. These sources of liquidity are considered primary and are supplemented by the ability of the Company and Bank to borrow funds, which are termed secondary sources and which are substantial. The Company’s secondary sources of liquidity include a $50.0 million line of credit with a regional bank, secured by a portion of the stock of the Bank, against which there were no amounts outstanding at September 30, 2015. Additionally, the Bank can purchase up to $137.5 million in federal funds on an unsecured basis from its correspondents, against which there were no amounts outstanding at September 30, 2015, and can obtain unsecured funds under one-way CDARS brokered deposits in the amount of $872.4 million, against which there was $7.1 million outstanding at September 30, 2015. The Bank has a commitment at September 30, 2015 from Promontory to place up to $300.0 million of brokered deposits from its IND program with the Bank in amounts requested by the Bank, as compared to an actual balance of $181.8 million at September 30, 2015. At September 30, 2015, the Bank was also eligible to make advances from the FHLB up to $673.0 million based on collateral at the FHLB, of which there were no amounts outstanding at September 30, 2015. The Bank may enter into repurchase agreements as well as obtain additional borrowing capabilities from the FHLB provided adequate collateral exists to secure these lending relationships. The Bank also has a back-up borrowing facility through the Discount Window at the Federal Reserve Bank of Richmond (“Federal Reserve Bank”). This facility, which amounts to approximately $443.0 million, is collateralized with specific loan assets identified to the Federal Reserve Bank. It is anticipated that, except for periodic testing, this facility would be utilized for contingency funding only.

The loss of deposits, through disintermediation, is one of the greater risks to liquidity. Disintermediation occurs most commonly when rates rise and depositors withdraw deposits seeking higher rates in alternative savings and investment sources than the Bank may offer. The Bank was founded under a philosophy of relationship banking and, therefore, believes that it has less of an exposure to disintermediation and resultant liquidity concerns than do many banks. There is, however, a risk that some deposits would be lost if rates were to increase and the Bank elected not to remain competitive with its deposit rates. Under those conditions, the Bank believes that it is well positioned to use other sources of funds such as FHLB borrowings, brokered deposits, repurchase agreements and correspondent banks’ lines of credit to offset a decline in deposits in the short run. Over the long-term, an adjustment in assets and change in business emphasis could compensate for a potential loss of deposits. The Bank also maintains a marketable investment portfolio to provide flexibility in the event of significant liquidity needs. The Asset Liability Committee of the Bank’s Board of Directors (“ALCO”) has adopted policy guidelines which emphasize the importance of core deposits, adequate asset liquidity and a contingency funding plan.

At September 30, 2015, under the Bank’s liquidity formula, it had $2.63 billion of primary and secondary liquidity sources. The amount is deemed adequate to meet current and projected funding needs.

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Commitments and Contractual Obligations

Loan commitments outstanding and lines and letters of credit at September 30, 2015 are as follows:

(dollars in thousands)
Unfunded loan commitments	$	1,715,511
Unfunded lines of credit		104,785
Letters of credit		84,896
Total	$	1,905,192

Unfunded loan commitments are agreements whereby the Bank has made a commitment and the borrower has accepted the commitment to lend to a customer as long as there is satisfaction of the terms or conditions established in the contract.  Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee before the commitment period is extended.  In many instances, borrowers are required to meet performance milestones in order to draw on a commitment as is the case in construction loans, or to have a required level of collateral in order to draw on a commitment, as is the case in asset based lending credit facilities.  Since commitments may expire without being drawn, the total commitment amount does not necessarily represent future cash requirements.

Unfunded lines of credit are agreements to lend to a customer as long as there is no violation of the terms or conditions established in the contract.  Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee.  Since commitments may expire without being drawn, the total commitment amount does not necessarily represent future cash requirements.

Letters of credit include standby and commercial letters of credit.  Standby letters of credit are conditional commitments issued by the Bank to guarantee the performance by the Bank’s customer to a third party.  Standby letters of credit generally become payable upon the failure of the customer to perform according to the terms of the underlying contract with the third party.  Standby letters of credit are generally not drawn. Commercial letters of credit are issued specifically to facilitate commerce and typically result in the commitment being drawn when the underlying transaction is consummated between the customer and a third party.  The contractual amount of these letters of credit represents the maximum potential future payments guaranteed by the Bank.  The Bank has recourse against the customer for any amount it is required to pay to a third party under a letter of credit, and holds cash and or other collateral on those standby letters of credit for which collateral is deemed necessary.

Asset/Liability Management and Quantitative and Qualitative Disclosures about Market

A fundamental risk in banking is exposure to market risk, or interest rate risk, since a bank’s net income is largely dependent on net interest income. The Bank’s ALCO formulates and monitors the management of interest rate risk through policies and guidelines established by it and the full Board of Directors and through review of detailed reports discussed quarterly. In its consideration of risk limits, the ALCO considers the impact on earnings and capital, the level and direction of interest rates, liquidity, local economic conditions, outside threats and other factors. Banking is generally a business of managing the maturity and re-pricing mismatch inherent in its asset and liability cash flows and to provide net interest income growth consistent with the Company’s profit objectives.

During the quarter ended September 30, 2015, as compared to the same three months in 2014, the Company was able to increase its net interest income (by 32%), produce a net interest spread of 4.04%, which was 24 basis points lower than the 4.28% for the same quarter ended 2014, and manage its overall interest rate risk position.

The Company, through its ALCO and ongoing financial management practices, monitors the interest rate environment in which it operates and adjusts the rates and maturities of its assets and liabilities to remain competitive and to achieve its overall financial objectives subject to established risk limits. In the current and expected future interest rate environment, the Company has been maintaining its investment portfolio to manage the balance between yield and prepayment risk in its portfolio of mortgage backed securities should interest rates remain at current levels. Further, the company has been managing the investment portfolio to mitigate extension risk and related declines in market values in that same portfolio should interest rates increase. Additionally, the Company has limited call risk in its U.S. agency investment portfolio. During the three months ended September 30, 2015, the average investment portfolio balances increased from the second quarter of 2015 in part from the reinvestment of a portion of the cash flows from the sale of the indirect consumer loan portfolio which closed in late July 2015, amounting to approximately $80.3 million at the time of sale. In addition to the purchase of investments, cash flows from the sale of the indirect consumer loan portfolio provided additional liquidity for loan originations.

As a result of the sale in the first quarter of 2015 of various longer-term municipal investments, the percentage mix of municipal securities decreased to 24% of total investments at September 30, 2015 from 29% at December 31, 2014, the portion of the portfolio invested in mortgage backed securities decreased to 62% at September 30, 2015 from 63% at December 31, 2014, the portion of the portfolio represented in U.S. Government agency investments increased to 13% at September 30, 2015 from 8% at December 31, 2014 and the Company acquired floating rate corporate bonds in June, 2015 which represented 3% of total investment securities at September 30, 2015. Also resulting from the sale of municipal bonds in 2015, the duration of the investment portfolio decreased to 3.7 years at September 30, 2015 from 4.0 years at December 31, 2014, which better prepared the Company for expected increases in market interest rates. 

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The re-pricing duration of the loan portfolio was fairly stable at 26 months at September 30, 2015 versus 27 months at December 31, 2014, with fixed rate loans amounting to 37% of total loans at September 30, 2015 compared to 41% of total loans at December 31, 2014. Variable and adjustable rate loans comprised 63% of total loans at September 30, 2015, compared to 59% of total loans at December 31, 2014. Variable rate loans are generally indexed to either the Wall Street Journal prime interest rate, or the one month LIBOR interest rate, while adjustable rate loans are indexed primarily to the five year U.S. Treasury interest rate.

The duration of the deposit portfolio was also fairly stable at 32 months at September 30, 2015, as compared to 34 months at December 31, 2014. The change since December 31, 2014 was due substantially to a slight change in the mix and duration of time deposits. 

The Company has continued its emphasis on funding loans in its marketplace, and has been able to achieve favorable loan pricing, including interest rate floors on many loan originations, although competition for new loans persists. A disciplined approach to loan pricing, together with loans floors existing in 57% of total loans (at September 30, 2015), has resulted in a loan portfolio yield of 5.19% for the three months ended September 30, 2015 as compared to 5.39% for the same period in 2014. Subject to interest rate floors, variable and adjustable rate loans provide additional income opportunities should interest rates rise from current levels.

The net unrealized gain before income tax on the investment portfolio was $5.5 million at September 30, 2015 as compared to a net unrealized gain before tax of $4.4 million at December 31, 2014. The higher net unrealized gain on the investment portfolio at September 30, 2015 as compared to December 31, 2014 was due primarily to higher investment balances. At September 30, 2015, the unrealized gain position represented 1% of the investment portfolio’s book value.

There can be no assurance that the Company will be able to successfully achieve its optimal asset liability mix, as a result of competitive pressures, customer preferences and the inability to perfectly forecast future interest rates and movements.

One of the tools used by the Company to manage its interest rate risk is a static GAP analysis presented below. The Company also employs an earnings simulation model on a quarterly basis to monitor its interest rate sensitivity and risk and to model its balance sheet cash flows and the related income statement effects in different interest rate scenarios. The model utilizes current balance sheet data and attributes and is adjusted for assumptions as to investment maturities (including prepayments), loan prepayments, interest rates, and the level of noninterest income and noninterest expense. The data is then subjected to a “shock test” which assumes a simultaneous change in interest rates up 100, 200, 300, and 400 basis points or down 100 and 200, along the entire yield curve, but not below zero. The results are analyzed as to the impact on net interest income, net income and the market equity over the next twelve and twenty-four month periods from September 30, 2015. In addition to analysis of simultaneous changes in interest rates along the yield curve, changes based on interest rate “ramps” is also performed. This analysis represents the impact of a more gradual change in interest rates, as well as yield curve shape changes.

For the analysis presented below, at September 30, 2015, the simulation assumes a 50 basis point change in interest rates on money market and interest bearing transaction deposits for each 100 basis point change in market interest rates in a decreasing interest rate shock scenario with a floor of 10 basis points, and assumes a 70 basis point change in interest rates on money market and interest bearing transaction deposits for each 100 basis point change in market interest rates in an increasing interest rate shock scenario.

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As quantified in the table below, the Company’s analysis at September 30, 2015 shows a moderate effect on net interest income (over the next 12 months) as well as a moderate effect on the economic value of equity when interest rates are shocked both down 100 and 200 basis points and up 100, 200, 300, and 400 basis points. This moderate impact is due substantially to the significant level of variable rate and re-priceable assets and liabilities and related shorter relative durations. The re-pricing duration of the investment portfolio at September 30, 2015 is 3.7 years, the loan portfolio 2.2 years; the interest bearing deposit portfolio 2.7 years and the borrowed funds portfolio 3.6 years.

The following table reflects the result of simulation analysis on the September 30, 2015 asset and liabilities balances:

Change in interest rates (basis points)	Percentage change in net interest income	Percentage change in net income	Percentage change in market value of portfolio equity
+400	+7.6%	+14.5%	-0.3%
+300	+4.4%	+9.1%	-0.7%
+200	+1.3%	+3.8%	-1.2%
+100	-1.2%	-0.2%	-1.4%
0	-	-	-
-100	-1.3%	-2.2%	-6.3%
-200	-3.1%	-5.6%	-12.5%

The results of simulation are within the policy limits adopted by the Company. For net interest income, the Company has adopted a policy limit of 10% for a 100 basis point change, 12% for a 200 basis point change, 18% for a 300 basis point change and 24% for a 400 basis point change. For the market value of equity, the Company has adopted a policy limit of 12% for a 100 basis point change, 15% for a 200 basis point change, 25% for a 300 basis point change and 30% for a 400% basis point change. The changes in net interest income, net income and the economic value of equity in both a higher and lower interest rate shock scenario at September 30, 2015 are not considered to be excessive. The negative impact of -1.2% in net interest income and -0.2% in net income given a 100 basis point increase in market interest rates reflects in large measure the impact of floor interest rates in a substantial portion of the loan portfolio and to a lower level of expected residential mortgage sales activity.

In the third quarter of 2015, the Company continued to manage its interest rate sensitivity position to moderate levels of risk, as indicated in the simulation results above. Except for the higher level of asset liquidity at September 30, 2015 as compared to December 31, 2014, the interest rate risk position at September 30, 2015 was similar to the interest rate risk position at December 31, 2014. As compared to December 31, 2014, the sum of federal funds sold, interest bearing deposits with banks and other short-term investments and loans held for sale increased by $39.8 million at September 30, 2015. 

Certain shortcomings are inherent in the method of analysis presented in the foregoing table. For example, although certain assets and liabilities may have similar maturities or repricing periods, they may react in different degrees to changes in market interest rates. Also, the interest rates on certain types of assets and liabilities may fluctuate in advance of changes in market interest rates, while interest rates on other types may lag behind changes in market rates. Additionally, certain assets, such as adjustable-rate mortgage loans, have features that limit changes in interest rates on a short-term basis and over the life of the loan. Further, in the event of a change in interest rates, prepayment and early withdrawal levels could deviate significantly from those assumed in calculating the tables. Finally, the ability of many borrowers to service their debt may decrease in the event of a significant interest rate increase.

During the third quarter of 2015, average market interest rates increased on the short end of the yield curve, with rates in the five to ten year part of the curve decreasing. Overall, there was a flattening of the yield curve starting with the five year point in the curve and out, as compared to the third quarter of 2014.

As compared to the third quarter of 2014, the average two-year U.S. Treasury rate increased by 18 basis points from 0.50% to 0.68%, the average five year U.S. Treasury rate decreased by 14 basis points from 1.69% to 1.55% and the average ten year U.S. Treasury rate decreased by 27 basis points from 2.49% to 2.22%. The Company’s net interest spread for the third quarter of 2015 was 4.04% compared to 4.28% for the third quarter of 2014. The slight decline was due in large part to a higher mix of liquidity maintained relative to other earning assets. The Company believes that the change in the net interest spread in the most recent quarter as compared to 2014’s third quarter has been consistent with its risk analysis at December 31, 2014.

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GAP Position

Banks and other financial institutions earnings are significantly dependent upon net interest income, which is the difference between interest earned on earning assets and interest expense on interest bearing liabilities. This revenue represented 90% of the Company’s revenue for the third quarter of 2015 and 2014.

In falling interest rate environments, net interest income is maximized with longer term, higher yielding assets being funded by lower yielding short-term funds, or what is referred to as a negative mismatch or GAP. Conversely, in a rising interest rate environment, net interest income is maximized with shorter term, higher yielding assets being funded by longer-term liabilities or what is referred to as a positive mismatch or GAP.

The GAP position, which is a measure of the difference in maturity and repricing volume between assets and liabilities, is a means of monitoring the sensitivity of a financial institution to changes in interest rates. The chart below provides an indication of the sensitivity of the Company to changes in interest rates. A negative GAP indicates the degree to which the volume of repriceable liabilities exceeds repriceable assets in given time periods.

At September 30, 2015, the Company had a positive GAP position of approximately $471.2 million or 8.0% of total assets out to three months and a positive cumulative GAP position of $546.1 million or 9.3% of total assets out to 12 months; as compared to a positive GAP position of approximately $362.6 million or 6.9% of total assets out to three months and a positive cumulative GAP position of approximately $347.1 million or 6.6% out to 12 months at December 31, 2014. The change in the positive GAP position at September 30, 2015, as compared to December 31, 2014, was due substantially to the higher amount of asset liquidity on the balance sheet. The change in the GAP position at September 30, 2015 as compared to December 31, 2014 is not judged material to the Company’s overall interest rate risk position, which relies more heavily on simulation analysis which captures the full optionality within the balance sheet. The current position is within guideline limits established by the ALCO.

While management believes that this overall position creates a reasonable balance in managing its interest rate risk and maximizing its net interest margin within plan objectives, there can be no assurance as to actual results.

Management has carefully considered its strategy to maximize interest income by reviewing interest rate levels, economic indicators and call features within its investment portfolio, as well as interest rate floors within its loan portfolio. These factors have been discussed with the ALCO and management believes that current strategies are appropriate to current economic and interest rate trends.

If interest rates increase by 100 basis points, the Company’s net interest income and net interest margin are expected to decrease modestly due to the impact of loan floors providing no additional interest income and the assumption of an increase in money market interest rates by 70% of the change in market interest rates.

If interest rates decline by 100 basis points, the Company’s net interest income and margin are expected to decline modestly as the impact of lower market rates on a large amount of liquid assets more than offsets the ability to lower interest rates on interest bearing liabilities.

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Because competitive market behavior does not necessarily track the trend of interest rates but at times moves ahead of financial market influences, the change in the cost of liabilities may be different than anticipated by the GAP model. If this were to occur, the effects of a declining interest rate environment may not be in accordance with management’s expectations.

GAP Analysis

September 30, 2015

(dollars in thousands)

Repriceable in:	0-3 months			4-12 months			13-36 months			37-60 months			Over 60 months			Total Rate Sensitive		Non-sensitive		Total Assets
RATE SENSITIVE ASSETS:
Investment securities	$	65,358		$	86,793		$	108,882		$	107,029		$	173,129		$	541,191
Loans (1)(2)		2,338,678			452,182			1,102,448			765,626			153,744			4,812,678
Fed funds and other short-term investments		295,352			-			-			-			-			295,352
Other earning assets		58,284			-			-			-			-			58,284
Total	$	2,757,672		$	538,975		$	1,211,330		$	872,655		$	326,873		$	5,707,505	$	181,453	$	5,888,958
RATE SENSITIVE LIABILITIES:
Noninterest bearing demand	$	57,220		$	171,660		$	457,198		$	457,198		$	259,171		$	1,402,447
Interest bearing transaction		145,401			-			31,158			31,157			-			207,716
Savings and money market		1,844,393			-			334,958			334,959			-			2,514,310
Time deposits		174,564			292,411			315,746			19,394			-			802,115
Customer repurchase agreements and fed funds purchased		64,893			-			-			-			-			64,893
Other borrowings		-			-			-			-			70,000			70,000
Total	$	2,286,471		$	464,071		$	1,139,060		$	842,708		$	329,171		$	5,061,481	$	41,408	$	5,102,889
GAP	$	471,201		$	74,904		$	72,270		$	29,947		$	(2,298	)	$	646,024
Cumulative GAP	$	471,201		$	546,105		$	618,375		$	648,322		$	646,024
Cumulative gap as percent of total assets		8.00	%		9.27	%		10.50	%		11.01	%		10.97	%

(1)	Includes loans held for sale.
(2)	Nonaccrual loans are included in the over 60 months category.

Although NOW and MMA accounts are subject to immediate repricing, the Bank’s GAP model has incorporated a repricing schedule to account for a lag in rate changes based on our experience, as measured by the amount of those deposit rate changes relative to the amount of rate change in assets.    

Capital Resources and Adequacy

The assessment of capital adequacy depends on a number of factors such as asset quality and mix, liquidity, earnings performance, changing competitive conditions and economic forces, regulatory measures and policy, as well as the overall level of growth and complexity of the balance sheet. The adequacy of the Company’s current and future capital needs is monitored by management on an ongoing basis. Management seeks to maintain a capital structure that will assure an adequate level of capital to support anticipated asset growth and to absorb potential losses.

The federal banking regulators have issued guidance for those institutions which are deemed to have concentrations in commercial real estate lending. Pursuant to the supervisory criteria contained in the guidance for identifying institutions with a potential commercial real estate concentration risk, institutions which have (1) total reported loans for construction, land development, and other land acquisitions which represent 100% or more of an institution’s total risk-based capital; or (2) total commercial real estate loans representing 300% or more of the institution’s total risk-based capital and the institution’s commercial real estate loan portfolio has increased 50% or more during the prior 36 months are identified as having potential commercial real estate concentration risk. Institutions which are deemed to have concentrations in commercial real estate lending are expected to employ heightened levels of risk management with respect to their commercial real estate portfolios, and may be required to hold higher levels of capital. The Company, like many community banks, has a concentration in commercial real estate loans, and the Company has experienced significant growth in its commercial real estate portfolio in recent years. At September 30, 2015 non-owner-occupied commercial real estate loans (including construction, land and land development loans) represent 445% of total risk based capital. Construction, land and land development loans represent 134% of total risk based capital. Management has extensive experience in commercial real estate lending, and has implemented and continues to maintain heightened risk management procedures, and strong underwriting criteria with respect to its commercial real estate portfolio. Monitoring practices include periodic stress testing analysis to evaluate changes to cash flows, owing to interest rate increases and declines in net operating income. Nevertheless, we may be required to maintain higher levels of capital as a result of our commercial real estate concentrations, which could require us to obtain additional capital, and may adversely affect shareholder returns.

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The Company has a credit facility with a regional bank, pursuant to which the Company may borrow, on a revolving basis, up to $50 million for working capital purposes, to finance capital contributions to the Bank in whole and to ECV in part. The credit facility is secured by a first lien on a portion of the stock of the Bank, pursuant to which the Company may borrow, and bears interest at a floating rate equal to the Wall Street Journal Prime Rate minus 0.25% with a floor interest rate of 3.50%. Interest is payable on a monthly basis. The term of the credit facility expires on September 30, 2016. There were no amounts outstanding under this credit facility at September 30, 2015, December 31, 2014, or September 30, 2014.

On November 2, 2015, the Company redeemed all of the 56,600 shares of the Company’s Senior Non-Cumulative Perpetual Preferred Stock, Series B, liquidation amount $1,000 per share (the “Series B Preferred Stock”), and all of the 15,300 shares of the Company’s Senior Non-Cumulative Perpetual Preferred Stock, Series C, liquidation amount $1,000 per share (“Series C Preferred Stock”). The aggregate redemption price of the Series B Preferred Stock and Series C Preferred Stock was approximately $71.96 million, including dividends accrued but unpaid through, but not including, the redemption date.

During the third quarter of 2015, the Company redeemed the outstanding balance of $4.1 million of the $9.3 million of subordinated notes due 2021. 

On August 5, 2014, the Company completed the sale of $70.0 million of its noncallable 5.75% subordinated notes, due September 1, 2024. (the “Notes”). The Notes were sold to the public at par. The notes qualify as Tier 2 capital for regulatory purposes to the fullest extent permitted under capital regulations applicable under the Basel III Rule capital requirements.

The Company and the Bank are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and prompt corrective action regulations involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weightings, and other factors and the regulators can lower classifications in certain cases. Failure to meet various capital requirements can initiate regulatory action that could have a direct material effect on the financial statements.

The prompt corrective action regulations provide five categories, including well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If a bank is only adequately capitalized, regulatory approval is required to, among other things, accept, renew or roll-over brokered deposits. If a bank is undercapitalized, capital distributions and growth and expansion are limited, and plans for capital restoration are required.

In July 2013, the Board of Governors of the Federal Reserve Board and the FDIC approved the final rules implementing the Basel Committee on Banking Supervision's capital guidelines for U.S. banks (commonly known as Basel III). Under the final rules, which became applicable to the Company and the Bank on January 1, 2015 and are subject to a phase-in period through January 1, 2019, minimum requirements will increase for both the quantity and quality of capital held by the Company and the Bank. The rules include a new common equity Tier 1 capital to risk-weighted assets ratio (CET1 ratio) of 4.5% and a capital conservation buffer of 2.5% of risk-weighted assets, which when fully phased-in, effectively results in a minimum CET1 ratio of 7.0%. Basel III raises the minimum ratio of Tier 1 capital to risk-weighted assets from 4.0% to 6.0% (which, with the capital conservation buffer, effectively results in a minimum Tier 1 capital ratio of 8.5% when fully phased-in), effectively results in a minimum total capital to risk-weighted assets ratio of 10.5% (with the capital conservation buffer fully phased-in), and requires a minimum leverage ratio of 4.0%. Basel III also makes changes to risk weights for certain assets and off-balance-sheet exposures.

In March 2015, the Company completed the public offering of $100 million of its common stock at $35.50 per share and received gross proceeds of sale of $100 million and net proceeds of sale of approximately $94.6 million. 

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The actual capital amounts and ratios for the Company and Bank as of September 30, 2015, December 31, 2014 and September 30, 2014 are presented in the table below.

	Company					Bank							To Be Well Capitalized Under
	Actual					Actual					Minimun Required For		Prompt Corrective Action
(dollars in thousands)	Amount		Ratio			Amount		Ratio			Capital Adequacy Purposes		Regulations
As of September 30, 2015
CET1 capital (to risk weighted aseets)	$	606,334		10.48	%	$	595,988		10.36	%		4.50%		6.5	%
Total capital (to risk weighted assets)		798,707		13.80	%		646,220		11.23	%		8.00%		10.0	%
Tier 1 capital (to risk weighted assets)		678,234		11.72	%		595,988		10.36	%		6.00%		8.0	%
Tier 1 capital (to average assets)		678,234		11.96	%		595,988		10.55	%		4.00%		5.0	%
As of December 31, 2014
Total capital (to risk weighted assets)	$	631,340		12.97	%	$	568,637		11.73	%		8.00%		10.0	%
Tier 1 capital (to risk weighted assets)		505,864		10.39	%		522,637		10.78	%		4.00%		6.0	%
Tier 1 capital (to average assets)		505,864		10.69	%		522,637		11.09	%		3.00%		5.0	%
As of September 30, 2014
Total capital (to risk weighted assets)	$	559,205		14.48	%	$	452,181		11.76	%		8.00%		10.0	%
Tier 1 capital (to risk weighted assets)		434,876		11.26	%		407,329		10.60	%		4.00%		6.0	%
Tier 1 capital (to average assets)		434,876		10.70	%		407,329		10.07	%		3.00%		5.0	%

Bank and holding company regulations, as well as Maryland law, impose certain restrictions on dividend payments by the Bank, as well as restricting extensions of credit and transfers of assets between the Bank and the Company. At September 30, 2015 the Bank could pay dividends to the parent to the extent of its earnings so long as it maintained required capital ratios.

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Use of Non-GAAP Financial Measures

The Company considers the following non-GAAP measurements useful for investors, regulators, management and others to evaluate capital adequacy and to compare against other financial institutions. The tables below provide a reconciliation of these non-GAAP financial measures with financial measures defined by GAAP.

Tangible common equity to tangible assets (the "tangible common equity ratio") and tangible book value per common share are non-GAAP financial measures derived from GAAP-based amounts. The Company calculates the tangible common equity ratio by excluding the balance of intangible assets from common shareholders' equity and dividing by tangible assets. The Company calculates tangible book value per common share by dividing tangible common equity by common shares outstanding, as compared to book value per common share, which the Company calculates by dividing common shareholders' equity by common shares outstanding. The Company considers this information important to shareholders' as tangible equity is a measure that is consistent with the calculation of capital for bank regulatory purposes, which excludes intangible assets from the calculation of risk based ratios.

Non-GAAP Reconciliation (Unaudited)
(dollars in thousands except per share data)
	Nine Months Ended			Twelve Months Ended			Nine Months Ended
	September 30, 2015			December 31, 2014			September 30, 2014
Common shareholders' equity	$	714,169		$	548,859		$	386,014
Less: Intangible assets		(109,498	)		(109,908	)		(3,321	)
Tangible common equity	$	604,671		$	438,951		$	382,693
Book value per common share	$	21.38		$	18.21		$	14.83
Less: Intangible book value per common share		(3.28	)		(3.65	)		(0.12	)
Tangible book value per common share	$	18.10		$	14.56		$	14.71
Total assets	$	5,888,958		$	5,247,880		$	4,169,181
Less: Intangible assets		(109,498	)		(109,908	)		(3,321	)
Tangible assets	$	5,779,460		$	5,137,972		$	4,165,860
Tangible common equity ratio		10.46	%		8.54	%		9.19	%

Earnings include the effect of $1.5 million ($1.3 million net of tax) and $885 thousand ($674 thousand net of tax) of merger related expenses for the nine and three months ended September 30, 2014. As the magnitude of the merger expenses distorts the operational results of the Company, we present in the GAAP reconciliation below and certain performance ratios excluding the effect of the merger expenses during the nine and three months periods ended September 30, 2014. We believe this information is important to enable shareholders and other interested parties to assess the core operational performance of the Company.

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Non-GAAP Reconciliation (Unaudited)
(dollars in thousands except per share data)
	Nine Months Ended			Three Months Ended
	September 30, 2014			September 30, 2014
Net income	$	39,531		$	14,088
Adjustments to net income
Merger-related expenses, net of tax		1,250			674
Operating net income	$	40,781		$	14,762
Net income available to common shareholders	$	39,097		$	13,937
Adjustments to net income available to common shareholders
Merger-related expenses, net of tax		1,250			674
Operating earnings	$	40,347		$	14,611
Earnings per weighted average common share, basic	$	1.50		$	0.54
Adjustments to earnings per weighted average common share, basic
Merger-related expenses, net of tax		0.05			0.03
Operating earnings per weighted average common share, basic	$	1.55		$	0.57
Earnings per weighted average common share, diluted	$	1.47		$	0.52
Adjustments to earnings per weighted average common share, diluted
Merger-related expenses, net of tax		0.05			0.03
Operating earnings per weighted average common share, diluted	$	1.52		$	0.55
Summary Operating Results:
Noninterest expense	$	70,376		$	25,143
Merger-related expenses		1,460			885
Adjusted noninterest expense	$	68,916		$	24,258
Adjusted efficiency ratio		49.33	%		49.11	%
Adjusted noninterest expense as a % of average assets		2.37	%		2.36	%
Return on average assets
Net income	$	39,531		$	14,088
Adjustments to net income
Merger-related expenses, net of tax		1,250			674
Operating net income	$	40,781		$	14,762
Adjusted return on average assets		1.40	%		1.44	%
Return on average common equity
Net income available to common shareholders	$	39,097		$	13,937
Adjustments to net income available to common shareholders
Merger-related expenses, net of tax		1,250			674
Operating earnings	$	40,347		$	14,611
Adjusted return on average common equity		14.79	%		15.22	%

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

Please refer to Item 2 of this report, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” under the caption “Asset/Liability Management and Quantitative and Qualitative Disclosure about Market Risk.”

Item 4. Controls and Procedures

The Company’s management, under the supervision and with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, evaluated as of the last day of the period covered by this report the effectiveness of the operation of the Company’s disclosure controls and procedures, as defined in Rule 13a-14 under the Securities and Exchange Act of 1934. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective. There were no changes in the Company’s internal controls over financial reporting (as defined in Rule 13a-15 under the Securities Act of 1934) during the quarter ended September 30, 2015 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1 - Legal Proceedings

From time to time the Company may become involved in legal proceedings. At the present time there are no proceedings which the Company believes will have a material adverse impact on the financial condition or earnings of the Company.

Item 1A – Risk Factors

There have been no material changes as of September 30, 2015 in the risk factors from those disclosed in the Company’s Annual Report on From 10-K for the year ended December 31, 2014.

Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds
(a) Sales of Unregistered Securities.	None
(b) Use of Proceeds.	Not Applicable
(c) Issuer Purchases of Securities.	None

Item 3 - Defaults Upon Senior Securities	None
Item 4 - Mine Safety Disclosures	Not Applicable
Item 5 - Other Information
(a) Required 8-K Disclosures	None
(b) Changes in Procedures for Director Nominations	None

Item 6 - Exhibits 

3.1	Certificate of Incorporation of the Company, as amended (1)
3.2	Articles Supplementary to the Articles of Incorporation for the Series B Preferred Stock (2)
3.3	Bylaws of the Company (3)
3.4	Articles Supplementary to the Articles of Incorporation for the Series C Preferred Stock (4)
4.1	Warrant to Purchase Common Stock (5)
4.4	Subordinated Indenture, dated as of August 5, 2014, between the Company and Wilmington Trust, National Association, as Trustee (6)
4.5	First Supplemental Indenture, dated as of August 5, 2014, between the Company and Wilmington Trust, National Association, as Trustee (7)
4.6	Form of Global Note representing the 5.75% Subordinated Notes due September 1, 2024 (included in Exhibit 4.5)
10.1	1998 Stock Option Plan (8)
10.2	2006 Stock Plan (9)
10.3	Amended and Restated Employment Agreement dated as of August 1, 2014, between EagleBank and James H. Langmead (10)
10.4	Amended and Restated Employment Agreement dated as of August 1, 2014, between EagleBank and Antonio F. Marquez  (11)
10.5	Amended and Restated Employment Agreement dated as of January 1, 2014, between Eagle Bancorp, Inc., EagleBank and Ronald D. Paul (12)
10.6	Amended and Restated Employment Agreement dated as of August 1, 2014, between EagleBank and Susan G. Riel (13)
10.7	Amended and Restated Employment Agreement dated as of August 1, 2014, between EagleBank and Janice L. Williams (14)

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10.8	Non-Compete Agreement dated as of August 1, 2014, between EagleBank and James H. Langmead (15)
10.9	Non-Compete Agreement dated as of August 1, 2014, between EagleBank and Antonio F. Marquez (16)
10.10	Non-Compete Agreement dated as of August 1, 2014, between EagleBank and Ronald D. Paul (17)
10.11	Non-Compete Agreement dated as of August 1, 2014, between EagleBank and Susan G. Riel (18)
10.12	Non-Compete Agreement dated as of August 1, 2014, between EagleBank and Janice L. Williams (19)
10.13	Amended and Restated Employment Agreement dated as of August 1, 2014 between EagleBank and Laurence E. Bensignor (20)
10.14	Amended and Restated Employment Agreement dated as of August 1, 2014 between EagleBank and Michael T. Flynn (21)
10.15	Consulting Agreement, dated October 16, 2015 between Eagle Bancorp, Inc. and Michael T. Flynn (22)
10.16	Vice Chairman Agreement dated as of June 1, 2014 between Eagle Bancorp, Inc., EagleBank and Robert Pincus (23)
10.17	Non-Compete Agreement dated as of August 1, 2014, between EagleBank and Laurence E. Bensignor (24)
10.18	Non-Compete Agreement dated as of August 1, 2014, between EagleBank and Michael T. Flynn (25)
10.20	Non-Compete Agreement dated as of August 1, 2014, between EagleBank and Robert Pincus (26)
10.22	Form of Supplemental Executive Retirement Plan Agreement (27)
10.23	Director Fee Agreement between Eagle Bancorp, Inc., Eagle Bank and David P. Summers (28)
10.24	2015 Senior Executive Incentive Plan (29)
10.25	Employment Agreement dated as of November 1, 2014 between EagleBank and Charles C. Brockett (30)
10.26	Non-Compete Agreement dated as of November 1, 2014, between EagleBank and Charles C. Brockett (31)
10.27	Amended and Restated Employment Agreement dated as of December 15, 2014 between EagleBank and Lindsey S. Rheaume (32)
10.28	Non-Compete Agreement dated as of December 15, 2014, between EagleBank and Lindsey S. Rheaume (33)
10.29	Virginia Heritage Bank 2006 Stock Option Plan (34)
10.30	Virginia Heritage Bank 2010 Long-Term Incentive Plan (35)
11	Statement Regarding Computation of Per Share Income
	See Note 8 of the Notes to Consolidated Financial Statements
21	Subsidiaries of the Registrant
31.1	Certification of Ronald D. Paul
31.2	Certification of James H. Langmead
32.1	Certification of Ronald D. Paul
32.2	Certification of James H. Langmead
101	Interactive data files pursuant to Rule 405 of Regulation S-T:
	(i)	Consolidated Balance Sheets at September 30, 2015, December 31, 2014 and September 30, 2014
	(ii)	Consolidated Statement of Operations for the three and nine months ended September 30, 2015 and 2014
	(iii)	Consolidated Statement of Comprehensive Income for the three and nine months ended September 30, 2015 and 2014
	(iv)	Consolidated Statement of Changes in Shareholders’ Equity for the nine months ended September 30, 2015 and 2014
	(v)	Consolidated Statement of Cash Flows for the nine months ended September 30, 2015 and 2014
	(vi)	Notes to the Consolidated Financial Statements

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(1)	Incorporated by reference to the Exhibit of the same number to the Company’s Current Report on Form 8-K filed on July 16, 2008.
(2)	Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on July 15, 2011.
(3)	Incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed on June 27, 2012.
(4)	Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on November 5, 2014.
(5)	Incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on December 8, 2008.
(6)	Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on August 5, 2014.
(7)	Incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on August 5, 2014.
(8)	Incorporated by reference to Exhibit 10.1 to the Company’s Annual Report on Form 10-KSB for the year ended December 31, 1998.
(9)	Incorporated by reference to Exhibit 4 to the Company’s Registration Statement on Form S-8 (No. 333-187713)
(10)	Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 15, 2014.
(11)	Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 15, 2014.
(12)	Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on December 15, 2014.
(13)	Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on December 15, 2014.
(14)	Incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on December 15, 2014.
(15)	Incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed on December 15, 2014.
(16)	Incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed on December 15, 2014.
(17)	Incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K filed on December 15, 2014.
(18)	Incorporated by reference to Exhibit 10.8 to the Company’s Current Report on Form 8-K filed on December 15, 2014.
(19)	Incorporated by reference to Exhibit 10.9 to the Company’s Current Report on Form 8-K filed on December 15, 2014.
(20)	Incorporated by reference to Exhibit 10.10 to the Company’s Current Report on Form 8-K filed on December 15, 2014.
(21)	Incorporated by reference to Exhibit 10.11 to the Company’s Current Report on Form 8-K filed on December 15, 2014.
(22)	Exhibit 33 to the Company’s Form 10-Q for the Quarter ended September 30, 2015.
(23)	Incorporated by reference to Exhibit 10.13 to the Company’s Current Report on Form 8-K filed on December 15, 2014.
(24)	Incorporated by reference to Exhibit 10.14 to the Company’s Current Report on Form 8-K filed on December 15, 2014.
(25)	Incorporated by reference to Exhibit 10.15 to the Company’s Current Report on Form 8-K filed on December 15, 2014.

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(26)	Incorporated by reference to Exhibit 10.17 to the Company’s Current Report on Form 8-K filed on December 15, 2014.
(27)	Incorporated by reference to Exhibit 10.22 to the Company’s Annual Report on Form 10-K for the Year ended December 31, 2013.
(28)	Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 5, 2014.
(29)	Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 28, 2015.
(30)	Incorporated by reference to Exhibit 4 to the Company’s Form 10-Q for the Quarter ended March 31, 2015.
(31)	Incorporated by reference to Exhibit 4 to the Company’s Form 10-Q for the Quarter ended March 31, 2015.
(32)	Incorporated by reference to Exhibit 4 to the Company’s Form 10-Q for the Quarter ended March 31, 2015.
(33)	Incorporated by reference to Exhibit 4 to the Company’s Form 10-Q for the Quarter ended March 31, 2015.
(34)	Incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-8 (No. 333-199875)
(35)	Incorporated by reference to Exhibit 4.2 to the Company’s Registration Statement on Form S-8 (No. 333-199875)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	EAGLE BANCORP, INC.
Date: November 9, 2015	By:	/s/ Ronald D. Paul
		Ronald D. Paul, Chairman, President and Chief Executive Officer of the Company
Date: November 9, 2015	By:	/s/ James H. Langmead
		James H. Langmead, Executive Vice President and Chief Financial Officer of the Company

76

EX-21

Exhibit 21

Name of Entity	Jurisdiction of Organization	Ownership Interest
Eagle Bancorp, Inc. – Registrant	Maryland
EagleBank	Maryland	100%
Eagle Insurance Services, LLC	Maryland	100%
Fidelity Mortgage, Inc.	Maryland	100%
Bethesda Leasing LLC	Maryland	100%
VHB Real Estate LLC	Virginia	100%
Eagle Commercial Ventures, LLC	Maryland	100%

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Ronald D. Paul, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Eagle Bancorp, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 9, 2015	By:	/s/ Ronald D. Paul
		Chairman, President and Chief Executive Officer of the Company

EX-31.2

Exhibit 31.2

CERTIFICATION

I, James H. Langmead, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Eagle Bancorp, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 9, 2015	By:	/s/ James H. Langmead
		Executive Vice President and Chief Financial Officer of the Company

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the Form 10-Q of Eagle Bancorp, Inc. for the quarter ended September 30, 2015, I, Ronald D. Paul, Chairman, President and Chief Executive Officer of Eagle Bancorp, Inc., hereby certify pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge and belief, that:

(1) such Form 10-Q fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in such Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Eagle Bancorp, Inc.

/s/ Ronald D. Paul	Date: November 9, 2015
Ronald D. Paul
Chairman, President and Chief Executive Officer of the Company

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the Form 10-Q of Eagle Bancorp, Inc. for the quarter ended September 30, 2015, I, James H. Langmead, Executive Vice President and Chief Financial Officer of Eagle Bancorp, Inc, hereby certify pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge and belief, that:

(1) such Form 10-Q fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in such Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Eagle Bancorp, Inc.

/s/ James H. Langmead	Date: November 9, 2015
James H. Langmead
Executive Vice President and Chief Financial Officer of the Company

EX-33

Exhibit 33

October 14, 2015

Mr. Michael T. Flynn

10221 Chapel Road

Potomac, Maryland 20854

Re:     Consulting Arrangement with Eagle Bancorp, Inc. (the “Company”)

Dear Mike,

Thank you for your years of service to the Company. In light of your retirement as an employee of the Company and EagleBank on October 31, 2015, we wish to continue to benefit from your services on an interim, as-needed basis as follows:

Engagement. The Company hereby engages, and you hereby agree to serve, as a consultant to the Company, effective November 1, 2015, for a term not to exceed one-year. Assignments will be made from time to time by the Chairman and Chief Executive Officer of the Company (the “Chairman”) and/or the EagleBank Chief Operating Officer (“COO”), in their respective discretion, and shall be performed by you in a manner that is efficient but not to exceed 20 hours per week (the “Weekly Threshold”). You will report directly to the Chairman.

Scope of Work. The purpose of the engagement is for you to assist the Company in maintaining and bettering “buy-sell side” investor relations, including but not limited to outreach to and communication with institutional shareholders, analysts, investment bankers and other members of the investment and capital markets community, including but not limited to for the purpose of increasing (a) the number of investors, (b) shareholder geographic diversity and (c) trading volume. It is contemplated that the scope of your services will primarily revolve around such investor relations. Assignments may include assisting with earnings scripts, press releases and Company filings; preparation of materials and preparation of the Chairman for investor conferences; serving as Company liaison with the Company transfer agent; preparation of materials and preparation of the Chairman for shareholder meetings, road shows and meetings with analysts; and attendance at some of such events. The Chairman and the COO each have the right to have you assist on other corporate matters, subject to the Weekly Threshold.

Compensation. During the term of this arrangement, you will be paid as an independent contractor at the gross rate of $12,750 per month, payable monthly. You will be responsible for all “withholding” /self-employment tax obligations. No employee benefits are applicable to your services as an independent contractor. The Company reserves the right to pay additional compensation at the end of the term for the services rendered, in its sole and absolute discretion. [This shall confirm that the Company reserves the right, as well, to pay (in cash or otherwise) a bonus with respect to your service as an employee in 2015, payable in first quarter 2016 if awarded.] You may seek reimbursement for out-of-town travel and entertainment expenses to the extent not originally borne by the Company on your behalf.

Termination. This arrangement is that of independent contractor and is not an employment relationship. Either of us may terminate the arrangement on 60 days’ prior notice. If not terminated earlier or extended by written agreement, this arrangement shall expire on October 31, 2016.

Confidentiality. You agree to maintain in full confidence and in accordance with all laws (including Gramm-Leach-Bliley) all information you have and learn about the Company and its subsidiaries. In furtherance thereof, you agree to execute our standard Consultant Confidentiality Agreement with respect to your services hereunder.

Communication Capability. You agree to maintain (subject to force majeure) means of communications, including without limitation a mailing address, telephone number and email address. Access to the Company systems will lapse upon your separation from employment on October 31, 2015. Notwithstanding the above, the Company reserves the right to provide office space, office equipment and/or remote access, from time to time.

Miscellaneous. In connection with your provision of services hereunder, you agree (a) to comply with all laws and all Company policies of which you are aware and to maintain backup practices for all electronically stored documents and data and (b) not to subcontract any of the assignments given you, not to hold yourself out as an employee of the Company, and not seek to bind the Company to any contract or agreement.

Mike, we are glad that we will have the opportunity to continue to work together as you begin your retirement. Please sign below to evidence your agreement to the above.

Very truly yours,

Eagle Bancorp, Inc.

By: ____________________________

Ronald D. Paul

Chairman and Chief Executive Officer

AGREED:


____________________________

Michael T. Flynn

Date: October __, 2015

XML

Note 5 - Loans and Allowance for Credit Losses (Details) - Allowance for Credit Losses by Portfolio Segment - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Allowance for credit losses:
Balance at beginning of period	$ 48,921	$ 43,552	$ 46,075	$ 40,921
Loans charged-off	(1,962)	(1,237)	(6,170)	(4,052)
Recoveries of loans previously charged-off	99	528	372	906
Net loan charged-off	(1,863)	(709)	(5,798)	(3,146)
Provision for credit losses	3,262	2,111	10,043	7,179
Ending balance	50,320	44,954	50,320	44,954
Allowance for credit losses:
Individually evaluated for impairment	4,227	8,013	4,227	8,013
Collectively evaluated for impairment	46,093	36,941	46,093	36,941
Ending balance-Allowance for credit losses	50,320	44,954	50,320	44,954	$ 46,075
Commercial Portfolio Segment [Member]
Allowance for credit losses:
Balance at beginning of period	12,911	11,413	13,222	9,780
Loans charged-off	(1,388)	(317)	(4,693)	(1,968)
Recoveries of loans previously charged-off	60	519	135	802
Net loan charged-off	(1,328)	202	(4,558)	(1,166)
Provision for credit losses	57	1,558	2,976	4,559
Ending balance	11,640	13,173	11,640	13,173
Allowance for credit losses:
Individually evaluated for impairment	2,312	4,409	2,312	4,409
Collectively evaluated for impairment	9,328	8,764	9,328	8,764
Ending balance-Allowance for credit losses	11,640	13,173	11,640	13,173
Income Producing Portfolio Segment [Member]
Allowance for credit losses:
Balance at beginning of period	12,411	10,745	11,442	10,359
Loans charged-off	(254)	(22)	(651)	(22)
Recoveries of loans previously charged-off	8		26	4
Net loan charged-off	(246)	(22)	(625)	(18)
Provision for credit losses	1,550	478	2,898	860
Ending balance	13,715	11,201	13,715	11,201
Allowance for credit losses:
Individually evaluated for impairment	827	578	827	578
Collectively evaluated for impairment	12,888	10,623	12,888	10,623
Ending balance-Allowance for credit losses	13,715	11,201	13,715	11,201
Owner Occupied Portfolio Segment [Member]
Allowance for credit losses:
Balance at beginning of period	3,113	3,273	2,954	3,899
Loans charged-off				(35)
Recoveries of loans previously charged-off			2	7
Net loan charged-off			2	(28)
Provision for credit losses	(13)	42	144	(556)
Ending balance	3,100	3,315	3,100	3,315
Allowance for credit losses:
Individually evaluated for impairment	400	1,330	400	1,330
Collectively evaluated for impairment	2,700	1,985	2,700	1,985
Ending balance-Allowance for credit losses	3,100	3,315	3,100	3,315
Residential Portfolio Segment [Member]
Allowance for credit losses:
Balance at beginning of period	1,082	958	1,259	944
Loans charged-off		(48)		(138)
Recoveries of loans previously charged-off	2		5
Net loan charged-off	2	(48)	5	(138)
Provision for credit losses	(18)	70	(198)	174
Ending balance	1,066	980	1,066	980
Allowance for credit losses:
Collectively evaluated for impairment	1,066	980	1,066	980
Ending balance-Allowance for credit losses	1,066	980	1,066	980
Construction Portfolio Segment [Member]
Allowance for credit losses:
Balance at beginning of period	17,633	15,487	15,625	13,934
Loans charged-off		(620)		(1,426)
Recoveries of loans previously charged-off	10	6	114	77
Net loan charged-off	10	(614)	114	(1,349)
Provision for credit losses	1,281	(237)	3,185	2,051
Ending balance	18,924	14,636	18,924	14,636
Allowance for credit losses:
Individually evaluated for impairment	350	1,478	350	1,478
Collectively evaluated for impairment	18,574	13,158	18,574	13,158
Ending balance-Allowance for credit losses	18,924	14,636	18,924	14,636
Home Equity Portfolio Segment [Member]
Allowance for credit losses:
Balance at beginning of period	1,496	1,331	1,469	1,871
Loans charged-off	(225)	(230)	(644)	(379)
Recoveries of loans previously charged-off	1	2	5	8
Net loan charged-off	(224)	(228)	(639)	(371)
Provision for credit losses	334	259	776	(138)
Ending balance	1,606	1,362	1,606	1,362
Allowance for credit losses:
Individually evaluated for impairment	338	218	338	218
Collectively evaluated for impairment	1,268	1,144	1,268	1,144
Ending balance-Allowance for credit losses	1,606	1,362	1,606	1,362
Other Consumer Portfolio Segment [Member]
Allowance for credit losses:
Balance at beginning of period	275	345	104	134
Loans charged-off	(95)		(182)	(84)
Recoveries of loans previously charged-off	18	1	85	8
Net loan charged-off	(77)	1	(97)	(76)
Provision for credit losses	71	(59)	262	229
Ending balance	269	287	269	287
Allowance for credit losses:
Collectively evaluated for impairment	269	287	269	287
Ending balance-Allowance for credit losses	$ 269	$ 287	$ 269	$ 287

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Note 9 - Stock-Based Compensation (Details) - Changes in Shares Under Option Plans - $ / shares	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Changes in Shares Under Option Plans [Abstract]
Beginning balance	759,683	503,834
Beginning balance	$ 11.36	$ 10.41
Issued	0	21,000
Issued		$ 32.77
Exercised	(377,357)	(64,926)
Exercised	$ 12.73	$ 16.78
Forfeited	(12,380)	(110)
Forfeited	$ 29.58	$ 5.76
Expired	(8,476)	(1,225)
Expired	$ 17.32	$ 9.00
Ending balance	361,470	458,573
Ending balance	$ 9.16	$ 10.54

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Note 6 - Interest Rate Swap Derivatives (Details) - Fair values of Derivative (Parentheticals) - Other Liabilities [Member]	Sep. 30, 2015
Interest Rate Swap 1 [Member] | London Interbank Offered Rate (LIBOR) [Member]
Derivative [Line Items]
Receive Rate	10.00%
Interest Rate Swap 2 [Member] | Federal Funds Effective Swap Rate [Member]
Derivative [Line Items]
Receive Rate	10.00%
Interest Rate Swap 3 [Member] | London Interbank Offered Rate (LIBOR) [Member]
Derivative [Line Items]
Receive Rate	10.00%

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Note 9 - Stock-Based Compensation (Details) - Stock Options Outstanding and Exercisable - $ / shares	9 Months Ended
	Sep. 30, 2015	Dec. 31, 2014	Sep. 30, 2014	Dec. 31, 2013
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Stock options outstanding (in Shares)	361,470	759,683	458,573	503,834
Outstanding options, weighted-average exercise price	$ 9.16	$ 11.36	$ 10.54	$ 10.41
Outstanding options, weighted-average remaining contractual life	3 years 47 days
Exercisable options, stock options exercisable (in Shares)	292,760
Exercisable options, weighted-average exercise price	$ 9.60
Range 1 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Outstanding options, exercise price range, lower limit	5.76
Outstanding options, exercise price range, upper limit	$ 9.21
Stock options outstanding (in Shares)	221,669
Outstanding options, weighted-average exercise price	$ 5.76
Outstanding options, weighted-average remaining contractual life	3 years 102 days
Exercisable options, exercise price range, lower limit	$ 5.76
Exercisable options, exercise price range, upper limit	$ 9.21
Exercisable options, stock options exercisable (in Shares)	164,759
Exercisable options, weighted-average exercise price	$ 5.76
Range 2 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Outstanding options, exercise price range, lower limit	9.22
Outstanding options, exercise price range, upper limit	$ 15.47
Stock options outstanding (in Shares)	108,611
Outstanding options, weighted-average exercise price	$ 12.40
Outstanding options, weighted-average remaining contractual life	2 years 54 days
Exercisable options, exercise price range, lower limit	$ 9.22
Exercisable options, exercise price range, upper limit	$ 15.47
Exercisable options, stock options exercisable (in Shares)	101,941
Exercisable options, weighted-average exercise price	$ 12.51
Range 3 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Outstanding options, exercise price range, lower limit	15.48
Outstanding options, exercise price range, upper limit	$ 22.66
Stock options outstanding (in Shares)	18,794
Outstanding options, weighted-average exercise price	$ 19.28
Outstanding options, weighted-average remaining contractual life	7 years 9 months
Exercisable options, exercise price range, lower limit	$ 15.48
Exercisable options, exercise price range, upper limit	$ 22.66
Exercisable options, stock options exercisable (in Shares)	15,164
Exercisable options, weighted-average exercise price	$ 19.60
Range 4 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Outstanding options, exercise price range, lower limit	22.67
Outstanding options, exercise price range, upper limit	$ 32.36
Stock options outstanding (in Shares)	12,396
Outstanding options, weighted-average exercise price	$ 26.18
Outstanding options, weighted-average remaining contractual life	2 years 69 days
Exercisable options, exercise price range, lower limit	$ 22.67
Exercisable options, exercise price range, upper limit	$ 32.36
Exercisable options, stock options exercisable (in Shares)	10,896
Exercisable options, weighted-average exercise price	$ 26.36

XML

Note 6 - Interest Rate Swap Derivatives (Details)	3 Months Ended	9 Months Ended
	Sep. 30, 2015 USD ($)	Sep. 30, 2015 USD ($)	Dec. 31, 2014	Sep. 30, 2014 USD ($)
Note 6 - Interest Rate Swap Derivatives (Details) [Line Items]
Derivative, Number of Instruments Held			0	0
Derivative, Notional Amount	$ 53,000,000	$ 53,000,000		$ 30,700,000
Derivative Instruments, Gain (Loss) Recognized in Income, Ineffective Portion and Amount Excluded from Effectiveness Testing, Net	$ 0
Derivative Instruments, Gain (Loss) Reclassification from Accumulated OCI to Income, Estimated Net Amount to be Transferred		$ 1,460,000
Interest Rate Swap [Member]
Note 6 - Interest Rate Swap Derivatives (Details) [Line Items]
Derivative, Number of Instruments Held	3	3
Derivative, Notional Amount	$ 250,000,000	$ 250,000,000
Derivative Instruments, Gain (Loss) Reclassification from Accumulated OCI to Income, Estimate of Time to Transfer		12 months

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Note 3 - Investment Securities Available-for-Sale (Details) - Securities Available-for-sale - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Note 3 - Investment Securities Available-for-Sale (Details) - Securities Available-for-sale [Line Items]
Amortized Cost	$ 518,807	$ 377,933
Gross Unrealized gains	6,912	7,087
Gross unrealized losses	524,326	382,343
US Government Agencies Debt Securities [Member]
Note 3 - Investment Securities Available-for-Sale (Details) - Securities Available-for-sale [Line Items]
Amortized Cost	68,289	29,434
Gross Unrealized gains	879	500
Gross unrealized losses	69,078	29,894
Residential Mortgage Backed Securities [Member]
Note 3 - Investment Securities Available-for-Sale (Details) - Securities Available-for-sale [Line Items]
Amortized Cost	320,978	241,120
Gross Unrealized gains	2,172	1,716
Gross unrealized losses	322,020	240,320
US States and Political Subdivisions Debt Securities [Member]
Note 3 - Investment Securities Available-for-Sale (Details) - Securities Available-for-sale [Line Items]
Amortized Cost	114,137	106,983
Gross Unrealized gains	3,824	4,850
Gross unrealized losses	117,866	111,712
Corporate Debt Securities [Member]
Note 3 - Investment Securities Available-for-Sale (Details) - Securities Available-for-sale [Line Items]
Amortized Cost	15,096
Gross unrealized losses	15,018
Equity Investment Other [Member]
Note 3 - Investment Securities Available-for-Sale (Details) - Securities Available-for-sale [Line Items]
Amortized Cost	307	396
Gross Unrealized gains	37	21
Gross unrealized losses	$ 344	$ 417

XML

Note 9 - Stock-Based Compensation (Details) - Unvested Restricted Stock Award Grants - Restricted Stock [Member] - $ / shares	1 Months Ended		9 Months Ended
	Mar. 31, 2015	Feb. 28, 2015	Sep. 30, 2015	Sep. 30, 2014
Note 9 - Stock-Based Compensation (Details) - Unvested Restricted Stock Award Grants [Line Items]
Unvested at beginning			509,336	614,580
Unvested at beginning			$ 21.58	$ 18.71
Issued	700	77,370	78,070	78,947
Issued			$ 36.06	$ 33.24
Forfeited			(4,150)	(832)
Forfeited			$ 31.83	$ 23.59
Vested			(195,503)	(184,921)
Vested			$ 20.74	$ 17.54
Unvested at end			387,753	507,774
Unvested at end			$ 24.81	$ 21.33

XML

Note 6 - Interest Rate Swap Derivatives (Tables)

9 Months Ended

Sep. 30, 2015

Disclosure Text Block [Abstract]

Schedule of Derivative Instruments [Table Text Block]

September 30,	Swap			Notional		Fair			Balance Sheet
2015	Number			Amount		Value			Category	Receive Rate	Pay Rate			Maturity
(dollars in thousands)
Interest rate swap		(1	)	$	75,000	$	(996	)	Other Liabilities	1 month USD-LIBOR-BBA w/ -1 day lookback +10 basis points		1.71	%	March 31, 2020
Interest rate swap		(2	)		100,000		(1,435	)	Other Liabilities	Federal Funds Effective Rate +10 basis points		1.74	%	April 15, 2021
Interest rate swap		(3	)		75,000		(1,014	)	Other Liabilities	1 month USD-LIBOR-BBA w/ -1 day lookback +10 basis points		1.92	%	March 31, 2022

Derivative Instruments, Gain (Loss) [Table Text Block]

				Nine Months Ended September 30, 2015
				Effective Portion						Ineffective Portion
							Reclassified from AOCI			Recognized in Income
				Amount of			into income			on Derivatives
	Swap			Pre-tax gain (loss)				Amount of			Amount of
	Number			Recognized in OCI			Category	Gain (Loss)		Category	Gain (Loss)
(dollars in thousands)
Interest rate swap		(1	)	$	(996	)		$	-		$	-
Interest rate swap		(2	)		(1,435	)			-			-
Interest rate swap		(3	)		(1,014	)			-			-

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Note 7 - Other Real Estate Owned (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2015	Sep. 30, 2014
Disclosure Text Block [Abstract]
Proceeds from Sale of Other Real Estate	$ 860	$ 1,846	$ 205
Gains (Losses) on Sales of Other Real Estate	$ (44)	$ (209)	$ (138)

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Note 5 - Loans and Allowance for Credit Losses (Details) - Nonaccrual Loans - USD ($) $ in Thousands		Sep. 30, 2015	Dec. 31, 2014	Sep. 30, 2014
Note 5 - Loans and Allowance for Credit Losses (Details) - Nonaccrual Loans [Line Items]
Nonaccrual loan, recorded investment	[1],[2]	$ 14,467	$ 22,443	$ 29,343
Commercial Portfolio Segment [Member]
Note 5 - Loans and Allowance for Credit Losses (Details) - Nonaccrual Loans [Line Items]
Nonaccrual loan, recorded investment		4,828	12,975	15,431
Income Producing Portfolio Segment [Member]
Note 5 - Loans and Allowance for Credit Losses (Details) - Nonaccrual Loans [Line Items]
Nonaccrual loan, recorded investment		6,721	2,645	2,553
Owner Occupied Portfolio Segment [Member]
Note 5 - Loans and Allowance for Credit Losses (Details) - Nonaccrual Loans [Line Items]
Nonaccrual loan, recorded investment		1,281	1,324	3,502
Residential Portfolio Segment [Member]
Note 5 - Loans and Allowance for Credit Losses (Details) - Nonaccrual Loans [Line Items]
Nonaccrual loan, recorded investment		333	346	350
Construction Portfolio Segment [Member]
Note 5 - Loans and Allowance for Credit Losses (Details) - Nonaccrual Loans [Line Items]
Nonaccrual loan, recorded investment		571	3,697	6,919
Home Equity Portfolio Segment [Member]
Note 5 - Loans and Allowance for Credit Losses (Details) - Nonaccrual Loans [Line Items]
Nonaccrual loan, recorded investment		661	1,398	$ 588
Other Consumer Portfolio Segment [Member]
Note 5 - Loans and Allowance for Credit Losses (Details) - Nonaccrual Loans [Line Items]
Nonaccrual loan, recorded investment		$ 72	$ 58

[1] Excludes troubled debt restructurings ("TDRs") that were performing under their restructured terms totaling $15.2 million at September 30, 2015, $13.5 million at December 31, 2014 and $7.9 million at September 30, 2014.

[2] Gross interest income of $822 thousand would have been recorded for the nine months ended September 30, 2015 if nonaccrual loans shown above had been current and in accordance with their original terms, while interest actually recorded on such loans was $127 thousand. See Note 1 to the consolidated financial statements for a description of the Company's policy for placing loans on nonaccrual status.

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Note 5 - Loans and Allowance for Credit Losses (Details) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2015 USD ($)	Sep. 30, 2014 USD ($)	Sep. 30, 2015 USD ($)	Sep. 30, 2014 USD ($)	Dec. 31, 2014 USD ($)	Jul. 24, 2015 USD ($)
Note 5 - Loans and Allowance for Credit Losses (Details) [Line Items]
Loans and Leases Receivable, Deferred Income (in Dollars)	$ 17,400	$ 15,200	$ 17,400	$ 15,200	$ 15,600
Servicing Asset at Fair Value, Amount (in Dollars)	$ 68,900		$ 68,900		67,900
Minimum Debt Service Coverage	1.15		1.15
Stress Test Assumption, Increase in Interest Rates	2.00%		2.00%
Financing Receivable, Net (in Dollars)	$ 4,776,965		$ 4,776,965		$ 4,312,399
Loan Percent	100.00%	100.00%	100.00%	100.00%	100.00%
Loans and Leases Receivable, Impaired, Interest Lost on Nonaccrual Loans (in Dollars)			$ 822
Impaired Financing Receivable, Interest Income, Accrual Method (in Dollars)			$ 127
Financing Receivable, Modifications, Subsequent Default, Number of Contracts			0	1
Financing Receivable, Modifications, Subsequent Default, Recorded Investment (in Dollars)				$ 2,100
Financing Receivable, Modifications, Number of Contracts	3	1	4	1
Financing Receivable, Modifications, Post-Modification Recorded Investment (in Dollars)			$ 15,445	$ 2,100	$ 13,729
Nonperforming Financial Instruments [Member]
Note 5 - Loans and Allowance for Credit Losses (Details) [Line Items]
Financing Receivable, Modifications, Number of Contracts			0	1
Financing Receivable, Modifications, Post-Modification Recorded Investment (in Dollars)			$ 215		227
Performing Financial Instruments [Member]
Note 5 - Loans and Allowance for Credit Losses (Details) [Line Items]
Financing Receivable, Modifications, Recorded Investment (in Dollars)	$ 15,200	$ 7,900	15,200	$ 7,900	13,500
Financing Receivable, Modifications, Post-Modification Recorded Investment (in Dollars)			$ 15,230		13,502
Commercial Real Estate Portfolio Segment [Member] | Owner Occupied and Construction [Member]
Note 5 - Loans and Allowance for Credit Losses (Details) [Line Items]
Percent of Loan Portfolio	11.00%		11.00%
Commercial Real Estate Portfolio Segment [Member] | ADC Loans [Member]
Note 5 - Loans and Allowance for Credit Losses (Details) [Line Items]
Financing Receivable, Net (in Dollars)	$ 987,800		$ 987,800
Loan Percent	44.00%		44.00%
Commercial Real Estate and Real Estate Construction Loans [Member]
Note 5 - Loans and Allowance for Credit Losses (Details) [Line Items]
Percent of Loan Portfolio	73.00%		73.00%
Commercial Real Estate and Real Estate Construction Loans [Member] | Excluding Owner Occupied Commercial Real Estate and Commercial Construction Loans [Member]
Note 5 - Loans and Allowance for Credit Losses (Details) [Line Items]
Percent of Loan Portfolio	62.00%		62.00%
Commercial Portfolio Segment [Member]
Note 5 - Loans and Allowance for Credit Losses (Details) [Line Items]
Percent of Loan Portfolio	21.00%		21.00%
Financing Receivable, Net (in Dollars)	$ 1,007,659		$ 1,007,659		$ 916,226
Loan Percent	21.00%	23.00%	21.00%	23.00%	21.00%
Financing Receivable, Modifications, Post-Modification Recorded Investment (in Dollars)			$ 1,387		$ 227
Commercial Portfolio Segment [Member] | SBA Loans [Member]
Note 5 - Loans and Allowance for Credit Losses (Details) [Line Items]
Percent of Loan Portfolio	1.00%		1.00%
Commercial Portfolio Segment [Member] | Nonperforming Financial Instruments [Member]
Note 5 - Loans and Allowance for Credit Losses (Details) [Line Items]
Financing Receivable, Modifications, Post-Modification Recorded Investment (in Dollars)			$ 215		227
Commercial Portfolio Segment [Member] | Performing Financial Instruments [Member]
Note 5 - Loans and Allowance for Credit Losses (Details) [Line Items]
Financing Receivable, Modifications, Post-Modification Recorded Investment (in Dollars)			$ 1,172
Consumer Portfolio Segment [Member]
Note 5 - Loans and Allowance for Credit Losses (Details) [Line Items]
Percent of Loan Portfolio	3.00%		3.00%
Sale of Loan Receivable, Selling Price (in Dollars)						$ 79,000
Sale of Loan Receivable, Estimated Loss (in Dollars)						$ 879
Residential Portfolio Segment [Member]
Note 5 - Loans and Allowance for Credit Losses (Details) [Line Items]
Financing Receivable, Net (in Dollars)	$ 147,720		$ 147,720		$ 148,018
Loan Percent	3.00%	4.00%	3.00%	4.00%	3.00%
Residential Portfolio Segment [Member] | Real Estate Loan [Member]
Note 5 - Loans and Allowance for Credit Losses (Details) [Line Items]
Percent of Loan Portfolio	3.00%		3.00%
Fidelity [Member] | Nonperforming Financial Instruments [Member]
Note 5 - Loans and Allowance for Credit Losses (Details) [Line Items]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Carrying Amount, Net (in Dollars)	$ 1,800		$ 1,800
Virginia Heritage Bank [Member] | Nonperforming Financial Instruments [Member]
Note 5 - Loans and Allowance for Credit Losses (Details) [Line Items]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Carrying Amount, Net (in Dollars)	$ 2,900		$ 2,900
Maximum [Member]
Note 5 - Loans and Allowance for Credit Losses (Details) [Line Items]
Loan to Value Ratio	80.00%		80.00%
Loan Period			90 days
Maximum [Member] | Commercial Portfolio Segment [Member]
Note 5 - Loans and Allowance for Credit Losses (Details) [Line Items]
Loan Period			10 years
Amortization Term			25 years
Maximum [Member] | Commercial Portfolio Segment [Member] | Land Acquisition, Development, and Construction Loans [Member]
Note 5 - Loans and Allowance for Credit Losses (Details) [Line Items]
Loan Period			24 months
Maximum [Member] | Commercial Portfolio Segment [Member] | Preferred Term [Member]
Note 5 - Loans and Allowance for Credit Losses (Details) [Line Items]
Loan Period			7 years
Maximum [Member] | Residential Portfolio Segment [Member] | Real Estate Loan [Member]
Note 5 - Loans and Allowance for Credit Losses (Details) [Line Items]
Loan Period			26 months
Maximum [Member] | Residential Portfolio Segment [Member] | Land Acquisition, Development, and Construction Loans [Member]
Note 5 - Loans and Allowance for Credit Losses (Details) [Line Items]
Loan Period			36 months
Minimum [Member]
Note 5 - Loans and Allowance for Credit Losses (Details) [Line Items]
Interest Rate Adjustment Frequency			5 years
Loan Period			30 days
Minimum [Member] | Commercial Portfolio Segment [Member] | Preferred Term [Member]
Note 5 - Loans and Allowance for Credit Losses (Details) [Line Items]
Loan Period			5 years

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Note 8 - Net Income Per Common Share (Details) - Net Income Per Common Share Calculation - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Basic:
Net income available to common shareholders (in Dollars)	$ 21,283	$ 13,937	$ 61,280	$ 39,097
Average common shares outstanding	33,401	26,024	32,625	25,978
Basic net income per common share (in Dollars per share)	$ 0.64	$ 0.54	$ 1.88	$ 1.50
Diluted:
Adjustment for common share equivalents	625	630	653	640
Average common shares outstanding-diluted	34,026	26,654	33,278	26,618
Diluted net income per common share (in Dollars per share)	$ 0.63	$ 0.52	$ 1.84	$ 1.47
Anti-dilutive shares		21	11	21

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Note 11 - Fair Value Measurements (Details) - Assets and Liabilities Measured at Fair Value On a Recurring Basis - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Investment securities available for sale:
Available for Sale Securities	$ 560,236
Liabilities:
Liabilities measured at fair value on a recurring basis		$ 3,445
US Government Agencies Debt Securities [Member]
Investment securities available for sale:
Available for Sale Securities	69,078	29,894
Residential Mortgage Backed Securities [Member]
Investment securities available for sale:
Available for Sale Securities	322,020	240,320
US States and Political Subdivisions Debt Securities [Member]
Investment securities available for sale:
Available for Sale Securities	117,866	111,712
Corporate Debt Securities [Member]
Investment securities available for sale:
Available for Sale Securities	15,018
Equity Securities [Member]
Investment securities available for sale:
Available for Sale Securities	344	417
Loans Held for Sale Securities [Member]
Investment securities available for sale:
Available for Sale Securities	35,713	44,317
Mortgage Banking Derivative [Member]
Investment securities available for sale:
Available for Sale Securities	197	146
Interest Rate Swap [Member]
Investment securities available for sale:
Available for Sale Securities		426,806
Derivative Financial Instruments, Liabilities [Member] | Interest Rate Swap [Member]
Liabilities:
Liabilities measured at fair value on a recurring basis		3,445
Fair Value, Inputs, Level 1 [Member]
Investment securities available for sale:
Available for Sale Securities	125
Fair Value, Inputs, Level 1 [Member] | Equity Securities [Member]
Investment securities available for sale:
Available for Sale Securities	125	198
Fair Value, Inputs, Level 1 [Member] | Interest Rate Swap [Member]
Investment securities available for sale:
Available for Sale Securities		198
Fair Value, Inputs, Level 2 [Member]
Investment securities available for sale:
Available for Sale Securities	559,695
Liabilities:
Liabilities measured at fair value on a recurring basis		3,445
Fair Value, Inputs, Level 2 [Member] | US Government Agencies Debt Securities [Member]
Investment securities available for sale:
Available for Sale Securities	69,078	29,894
Fair Value, Inputs, Level 2 [Member] | Residential Mortgage Backed Securities [Member]
Investment securities available for sale:
Available for Sale Securities	322,020	240,320
Fair Value, Inputs, Level 2 [Member] | US States and Political Subdivisions Debt Securities [Member]
Investment securities available for sale:
Available for Sale Securities	117,866	111,712
Fair Value, Inputs, Level 2 [Member] | Corporate Debt Securities [Member]
Investment securities available for sale:
Available for Sale Securities	15,018
Fair Value, Inputs, Level 2 [Member] | Loans Held for Sale Securities [Member]
Investment securities available for sale:
Available for Sale Securities	35,713	44,317
Fair Value, Inputs, Level 2 [Member] | Interest Rate Swap [Member]
Investment securities available for sale:
Available for Sale Securities		426,243
Fair Value, Inputs, Level 2 [Member] | Derivative Financial Instruments, Liabilities [Member] | Interest Rate Swap [Member]
Liabilities:
Liabilities measured at fair value on a recurring basis		3,445
Fair Value, Inputs, Level 3 [Member]
Investment securities available for sale:
Available for Sale Securities	416
Fair Value, Inputs, Level 3 [Member] | Equity Securities [Member]
Investment securities available for sale:
Available for Sale Securities	219	219
Fair Value, Inputs, Level 3 [Member] | Mortgage Banking Derivative [Member]
Investment securities available for sale:
Available for Sale Securities	$ 197	146
Fair Value, Inputs, Level 3 [Member] | Interest Rate Swap [Member]
Investment securities available for sale:
Available for Sale Securities		$ 365

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Note 6 - Interest Rate Swap Derivatives (Details) - Fair values of Derivative - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Derivative [Line Items]
Notional amount	$ 53,000	$ 30,700
Interest Rate Swap 1 [Member] | Other Liabilities [Member]
Derivative [Line Items]
Notional amount	75,000
Fair value	$ (996)
Pay rate	1.71%
Maturity	Mar. 31, 2020
Interest Rate Swap 2 [Member] | Other Liabilities [Member]
Derivative [Line Items]
Notional amount	$ 100,000
Fair value	$ (1,435)
Pay rate	1.74%
Maturity	Apr. 15, 2021
Interest Rate Swap 3 [Member] | Other Liabilities [Member]
Derivative [Line Items]
Notional amount	$ 75,000
Fair value	$ (1,014)
Pay rate	1.92%
Maturity	Mar. 31, 2022

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Note 1 - Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2015

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

Note 1. Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements include the accounts of Eagle Bancorp, Inc. and its subsidiaries (the “Company”), EagleBank (the “Bank”), Eagle Commercial Ventures, LLC (“ECV”), Eagle Insurance Services, LLC, and Bethesda Leasing, LLC, with all significant intercompany transactions eliminated.

The consolidated financial statements of the Company included herein are unaudited. The consolidated financial statements reflect all adjustments, consisting of normal recurring accruals that in the opinion of management, are necessary to present fairly the results for the periods presented. The amounts as of and for the year ended December 31, 2014 were derived from audited consolidated financial statements. Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. There have been no significant changes to the Company’s Accounting Policies as disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. The Company believes that the disclosures are adequate to make the information presented not misleading. Certain reclassifications have been made to amounts previously reported to conform to the current period presentation.

These statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. Operating results for the nine and three months ended September 30, 2015 are not necessarily indicative of the results of operations to be expected for the remainder of the year, or for any other period.

Nature of Operations

The Company, through the Bank, conducts a full service community banking business, primarily in Northern Virginia, Montgomery County, Maryland, and Washington, D.C. The primary financial services offered by the Bank include real estate, commercial and consumer lending, as well as traditional deposit and repurchase agreement products. The Bank is also active in the origination and sale of residential mortgage loans and the origination of small business loans. The guaranteed portion of small business loans, guaranteed by the Small Business Administration (“SBA”), is typically sold to third party investors in a transaction apart from the loan’s origination. As of September 30, 2015, the Bank offers its products and services through twenty-two banking offices, four lending centers and various electronic capabilities, including remote deposit services and mobile banking services. Eagle Insurance Services, LLC, a subsidiary of the Bank, offers access to insurance products and services through a referral program with a third party insurance broker. Eagle Commercial Ventures, LLC, a direct subsidiary of the Company, provides subordinated financing for the acquisition, development and construction of real estate projects; these transactions involve higher levels of risk, together with commensurate higher returns. Refer to Higher Risk Lending – Revenue Recognition below.

Business Combinations

Business combinations are accounted for by applying the acquisition method in accordance with Accounting Standards Codification (“ASC”) 805, “Business Combinations.” Under the acquisition method, identifiable assets acquired and liabilities assumed, and any non-controlling interest in the acquiree at the acquisition date are measured at their fair values as of that date, and are recognized separately from goodwill. Results of operations of the acquired entities are included in the consolidated statement of income from the date of acquisition.

On October 31, 2014, the Company completed its acquisition of Virginia Heritage Bank (“Virginia Heritage”). The acquisition of Virginia Heritage was effected through the merger (the “Merger”) of Virginia Heritage with and into EagleBank, in accordance with the Agreement and Plan of Reorganization (the “Merger Agreement”) among the Company, EagleBank and Virginia Heritage, dated June 9, 2014. The acquisition added approximately $800 million in loans, $3 million in loans held for sale, $645 million in deposits, and $95 million in borrowings. An identified intangible related to core deposits was recorded for $4.6 million, which is being amortized over its estimated useful life of approximately 6 years and an initial intangible for goodwill was recorded for approximately $102.3 million. Additionally, in connection with the transaction, the Company recorded a fair value credit mark on the loan portfolio for approximately $12.5 million.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results may differ from those estimates and such differences could be material to the financial statements.

Cash Flows

For purposes of reporting cash flows, cash and cash equivalents include cash and due from banks, federal funds sold, and interest bearing deposits with other banks which have an original maturity of three months or less.

Loans Held for Sale

The Company regularly engages in sales of residential mortgage loans and the guaranteed portion of SBA loans originated by the Bank. Loans held for sale are carried at the lower of aggregate cost or fair value. Fair value is derived from secondary market quotations for similar instruments. Gains and losses on sales of these loans are recorded as a component of noninterest income in the consolidated statements of operations.

The Company’s current practice is to sell residential mortgage loans on a servicing released basis, and, therefore, it has no intangible asset recorded for the value of such servicing as of September 30, 2015, December 31, 2014 and September 30, 2014. The sale of the guaranteed portion of SBA loans on a servicing retained basis gives rise to an Excess Servicing Asset, which is computed on a loan by loan basis with the unamortized amount being included in Intangible Assets in the consolidated balance sheets. This Excess Servicing Asset is being amortized on a straight-line basis (with adjustment for prepayments) as an offset to servicing fees collected and is included in Other Income in the consolidated statement of operations.

The Company enters into commitments to originate residential mortgage loans whereby the interest rate on the loan is determined prior to funding (i.e. interest rate lock commitments). Such interest rate lock commitments on mortgage loans to be sold in the secondary market are considered to be derivatives. To protect against the price risk inherent in residential mortgage loan commitments, the Company utilizes both “best efforts” and “mandatory delivery” forward loan sale commitments to mitigate the risk of potential decreases in the values of loans that would result from the exercise of the derivative loan commitments. Under a “best efforts” contract, the Company commits to deliver an individual mortgage loan of a specified principal amount and quality to an investor and the investor commits to a price that it will purchase the loan from the Company if the loan to the underlying borrower closes. The Company protects itself from changes in interest rates through the use of best efforts forward delivery commitments, whereby the investor commits to purchase a loan at a price representing a premium on the day the borrower commits to an interest rate with the intent that the buyer/investor has assumed the interest rate risk on the loan. As a result, the Company is not generally exposed to losses on loans sold utilizing best efforts. Nor will it realize gains related to interest rate lock commitments due to changes in interest rates. The market values of interest rate lock commitments and best efforts contracts are not readily ascertainable with precision because interest rate lock commitments and best efforts contracts are not actively traded. Because of the high correlation between interest rate lock commitments and best efforts contracts, no gain or loss should occur on the interest rate lock commitments. Under a “mandatory delivery” contract, the Company commits to deliver a certain principal amount of mortgage loans to an investor at a specified price on or before a specified date. If the Company fails to deliver the amount of mortgages necessary to fulfill the commitment by the specified date, it is obligated to pay the investor a “pair-off” fee, based on then-current market prices, to compensate the investor for the shortfall. The Company manages the interest rate risk on interest rate lock commitments by entering into forward sale contracts of mortgage backed securities, whereby the Company obtains the right to deliver securities to investors in the future at a specified price. Such contracts are accounted for as derivatives and are recorded at fair value in derivative assets or liabilities, carried on the Consolidated Balance Sheet within Other Assets or Other Liabilities with changes in fair value recorded in other income within the Consolidated Statement of Income. The period of time between issuance of a loan commitment to the customer and closing and sale of the loan to an investor generally ranges from 30 to 90 days under current market conditions. The gross gains on loan sale are recognized based on new loan commitments with adjustment for price and pair-off activity. Commission expenses on loans held for sale are recognized based on loans closed.

In circumstances where the Company does not deliver the whole loan to an investor, but rather elects to retain the loan in its portfolio, the loan is transferred from held for sale to loans at fair value at date of transfer.

Investment Securities

The Company has no securities classified as trading, or as held to maturity. Marketable equity securities and debt securities not classified as held to maturity or trading are classified as available-for-sale. Securities available-for-sale are acquired as part of the Company’s asset/liability management strategy and may be sold in response to changes in interest rates, current market conditions, loan demand, changes in prepayment risk and other factors. Securities available-for-sale are carried at fair value, with unrealized gains or losses being reported as accumulated other comprehensive income/(loss), a separate component of shareholders’ equity, net of deferred income tax. Realized gains and losses, using the specific identification method, are included as a separate component of noninterest income in the consolidated statements of operations.

Premiums and discounts on investment securities are amortized/accreted to the earlier of call or maturity based on expected lives, which lives are adjusted based on prepayment assumptions and call optionality if any. Declines in the fair value of individual available-for-sale securities below their cost that are other-than-temporary in nature result in write-downs of the individual securities to their fair value. Factors affecting the determination of whether other-than-temporary impairment has occurred include a downgrading of the security by a rating agency, a significant deterioration in the financial condition of the issuer, or a change in management’s intent and ability to hold a security for a period of time sufficient to allow for any anticipated recovery in fair value. Management systematically evaluates investment securities for other-than-temporary declines in fair value on a quarterly basis. This analysis requires management to consider various factors, which include (1) duration and magnitude of the decline in value, (2) the financial condition of the issuer or issuers and (3) structure of the security.

The entire amount of an impairment loss is recognized in earnings only when (1) the Company intends to sell the security, or (2) it is more likely than not that the Company will have to sell the security before recovery of its amortized cost basis, or (3) the Company does not expect to recover the entire amortized cost basis of the security. In all other situations, only the portion of the impairment loss representing the credit loss must be recognized in earnings, with the remaining portion being recognized in shareholders’ equity as comprehensive income, net of deferred taxes.

Loans

Loans are stated at the principal amount outstanding, net of unamortized deferred costs and fees. Interest income on loans is accrued at the contractual rate on the principal amount outstanding. It is the Company’s policy to discontinue the accrual of interest when circumstances indicate that collection is doubtful. Deferred fees and costs are being amortized on the interest method over the term of the loan.

Management considers loans impaired when, based on current information, it is probable that the Company will not collect all principal and interest payments according to contractual terms. Loans are evaluated for impairment in accordance with the Company’s portfolio monitoring and ongoing risk assessment procedures.  Management considers the financial condition of the borrower, cash flow of the borrower, payment status of the loan, and the value of the collateral, if any, securing the loan. Generally, impaired loans do not include large groups of smaller balance homogeneous loans such as residential real estate and consumer type loans which are evaluated collectively for impairment and are generally placed on nonaccrual when the loan becomes 90 days past due as to principal or interest. Loans specifically reviewed for impairment are not considered impaired during periods of “minimal delay” in payment (ninety days or less) provided eventual collection of all amounts due is expected.  The impairment of a loan is measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate, or the fair value of the collateral if repayment is expected to be provided solely by the collateral.  In appropriate circumstances, interest income on impaired loans may be recognized on a cash basis.

Higher Risk Lending – Revenue Recognition

The Company has occasionally made higher risk acquisition, development, and construction (“ADC”) loans that entail higher risks than ADC loans made following normal underwriting practices (“higher risk loan transactions”). These higher risk loan transactions are currently made through the Company’s subsidiary, ECV. This activity is limited as to individual transaction amount and total exposure amounts, based on capital levels, and is carefully monitored. The loans are carried on the balance sheet at amounts outstanding and meet the loan classification requirements of the Accounting Standard Executive Committee (“AcSEC”) guidance reprinted from the CPA Letter, Special Supplement, dated February 10, 1986 (also referred to as Exhibit 1 to AcSEC Practice Bulletin No. 1). Additional interest earned on these higher risk loan transactions (as defined in the individual loan agreements) is recognized as realized under the provisions contained in AcSEC’s guidance reprinted from the CPA Letter, Special Supplement, dated February 10, 1986 (also referred to as Exhibit 1 to AcSEC Practice Bulletin No.1) and Staff Accounting Bulletin No. 101 (Revenue Recognition in Financial Statements). Certain additional interest is included as a component of noninterest income.  ECV had seven higher risk lending transactions outstanding as of September 30, 2015, as compared to four higher risk lending transactions outstanding as of December 31, 2014, amounting to $11.5 million and $6.2 million, respectively.

Allowance for Credit Losses

The allowance for credit losses represents an amount which, in management’s judgment, is adequate to absorb probable losses on loans and other extensions of credit that may become uncollectible. The adequacy of the allowance for credit losses is determined through careful and continuous review and evaluation of the loan portfolio and involves the balancing of a number of factors to establish a prudent level of allowance. Among the factors considered in evaluating the adequacy of the allowance for credit losses are lending risks associated with growth and entry into new markets, loss allocations for specific credits, the level of the allowance to nonperforming loans, historical loss experience, economic conditions, portfolio trends and credit concentrations, changes in the size and character of the loan portfolio, and management’s judgment with respect to current and expected economic conditions and their impact on the existing loan portfolio. Allowances for impaired loans are generally determined based on collateral values. Loans or any portion thereof deemed uncollectible are charged against the allowance, while recoveries are credited to the allowance. Management adjusts the level of the allowance through the provision for credit losses, which is recorded as a current period operating expense. The allowance for credit losses consists of allocated and unallocated components.

The components of the allowance for credit losses represent an estimation done pursuant to ASC Topic 450, “Contingencies,” or ASC Topic 310, “Receivables.” Specific allowances are established in cases where management has identified significant conditions or circumstances related to a specific credit that management believes indicate the probability that a loss may be incurred. For potential problem credits for which specific allowance amounts have not been determined, the Company establishes allowances according to the application of credit risk factors. These factors are set by management and approved by the appropriate Board committee to reflect its assessment of the relative level of risk inherent in each risk grade. A third component of the allowance computation, termed a nonspecific or environmental factors allowance, is based upon management’s evaluation of various environmental conditions that are not directly measured in the determination of either the specific allowance or formula allowance. Such conditions include general economic and business conditions affecting key lending areas, credit quality trends (including trends in delinquencies and nonperforming loans expected to result from existing conditions), loan volumes and concentrations, specific industry conditions within portfolio categories, recent loss experience in particular loan categories, duration of the current business cycle, bank regulatory examination results, findings of outside review consultants, and management’s judgment with respect to various other conditions including credit administration and management and the quality of risk identification systems. Executive management reviews these environmental conditions quarterly, and documents the rationale for all changes.

Management believes that the allowance for credit losses is adequate; however, determination of the allowance is inherently subjective and requires significant estimates. While management uses available information to recognize losses on loans, future additions to the allowance may be necessary based on changes in economic conditions. Evaluation of the potential effects of these factors on estimated losses involves a high degree of uncertainty, including the strength and timing of economic cycles and concerns over the effects of a prolonged economic downturn in the current cycle. In addition, various regulatory agencies, as an integral part of their examination process, and independent consultants engaged by the Bank, periodically review the Bank’s loan portfolio and allowance for credit losses. Such review may result in recognition of additions to the allowance based on their judgments of information available to them at the time of their examination.

Premises and Equipment

Premises and equipment are stated at cost less accumulated depreciation and amortization computed using the straight-line method for financial reporting purposes. Premises and equipment are depreciated over the useful lives of the assets, which generally range from five to seven years for furniture, fixtures and equipment, to three to five years for computer software and hardware, and to ten to forty years for buildings and building improvements. Leasehold improvements are amortized over the terms of the respective leases, which may include renewal options where management has the positive intent to exercise such options, or the estimated useful lives of the improvements, whichever is shorter. The costs of major renewals and betterments are capitalized, while the costs of ordinary maintenance and repairs are expensed as incurred. These costs are included as a component of premises and equipment expenses on the consolidated statements of operations.

Other Real Estate Owned (OREO)

Assets acquired through loan foreclosure are held for sale and are recorded at fair value less estimated selling costs when acquired, establishing a new cost basis. The new basis is supported by appraisals that are no more than twelve months old. Costs after acquisition are generally expensed. If the fair value of the asset declines, a write-down is recorded through noninterest expense. The valuation of foreclosed assets is subjective in nature and may be adjusted in the future because of changes in market conditions or appraised values.

Goodwill and Other Intangible Assets

Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. Other intangible assets represent purchased assets that lack physical substance but can be distinguished from goodwill because of contractual or other legal rights. Intangible assets that have finite lives, such as core deposit intangibles, are amortized over their estimated useful lives and subject to periodic impairment testing. Intangible assets (other than goodwill) are amortized to expense using accelerated or straight-line methods over their respective estimated useful lives.

Goodwill and other intangibles are subject to impairment testing at the reporting unit level, which must be conducted at least annually. The Company performs impairment testing during the fourth quarter of each year or when events or changes in circumstances indicate the assets might be impaired.

The Company performs a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing updated qualitative factors, the Company determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, it does not have to perform the two-step goodwill impairment test. Determining the fair value of a reporting unit under the first step of the goodwill impairment test and determining the fair value of individual assets and liabilities of a reporting unit under the second step of the goodwill impairment test are judgmental and often involve the use of significant estimates and assumptions. Similarly, estimates and assumptions are used in determining the fair value of other intangible assets. Estimates of fair value are primarily determined using discounted cash flows, market comparisons and recent transactions. These approaches use significant estimates and assumptions including projected future cash flows, discount rates reflecting the market rate of return, projected growth rates and determination and evaluation of appropriate market comparables. Based on the results of quantitative assessments of all reporting units, the Company concluded that no impairment existed at December 31, 2014. However, future events could cause the Company to conclude that goodwill or other intangibles have become impaired, which would result in recording an impairment loss. Any resulting impairment loss could have a material adverse impact on the Company’s financial condition and results of operations.

Interest Rate Swap Derivatives

The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of its assets and liabilities and through the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. With the exception of forward commitment contracts discussed above under Loans Held for Sale, the Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to certain variable rate deposits.

At the inception of a derivative contract, the Company designates the derivative as one of three types based on the Company’s intentions and belief as to likely effectiveness as a hedge. These three types are (1) a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment (“fair value hedge”), (2) a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (“cash flow hedge”), or (3) an instrument with no hedging designation (“stand-alone derivative”). The Company has no fair value hedges or stand-alone derivatives, only cash flow hedges. For a cash flow hedge, the gain or loss on the derivative is reported in other comprehensive income (a Consolidated Balance Sheet component of Shareholders’ Equity) and is reclassified into earnings in the same period(s) during which the hedged transaction affects earnings (i.e. the period when cash flows are exchanged between counterparties). For both fair value and cash flow hedges, changes in the fair value of derivatives that are not highly effective in hedging the changes in fair value or expected cash flows of the hedged item are recognized immediately in current earnings. Changes in the fair value of derivatives that do not qualify for hedge accounting are reported currently in earnings, as noninterest income.

Net cash settlements on derivatives that qualify for hedge accounting are recorded in interest income or interest expense, based on the item being hedged. Net cash settlements on derivatives that do not qualify for hedge accounting are reported in noninterest income. Cash flows on hedges are classified in the cash flow statement the same as the cash flows of the items being hedged.

The Company formally documents the relationship between derivatives and hedged items, as well as the risk-management objective and the strategy for undertaking hedge transactions at the inception of the hedging relationship. This documentation includes linking fair value or cash flow hedges to specific assets and liabilities on the balance sheet or to specific firm commitments or forecasted transactions. The Company also formally assesses, both at the hedge’s inception and on an ongoing basis, whether the derivative instruments that are used are highly effective in offsetting changes in fair values or cash flows of the hedged items. The Company discontinues hedge accounting when it determines that the derivative is no longer effective in offsetting changes in the fair value or cash flows of the hedged item, the derivative is settled or terminates, a hedged forecasted transaction is no longer probable, a hedged firm commitment is no longer firm, or treatment of the derivative as a hedge is no longer appropriate or intended.

When hedge accounting is discontinued, subsequent changes in fair value of the derivative are recorded as noninterest income or expense. When a fair value hedge is discontinued, the hedged asset or liability is no longer adjusted for changes in fair value and the existing basis adjustment is amortized or accreted over the remaining life of the asset or liability. When a cash flow hedge is discontinued but the hedged cash flows or forecasted transactions are still expected to occur, gains or losses that were accumulated in other comprehensive income are amortized into earnings over the same periods which the hedged transactions will affect earnings.

Customer Repurchase Agreements

The Company enters into agreements under which it sells securities subject to an obligation to repurchase the same securities. Under these arrangements, the Company may transfer legal control over the assets but still retain effective control through an agreement that both entitles and obligates the Company to repurchase the assets. As a result, securities sold under agreements to repurchase are accounted for as collateralized financing arrangements and not as a sale and subsequent repurchase of securities. The agreements are entered into primarily as accommodations for large commercial deposit customers. The obligation to repurchase the securities is reflected as a liability in the Company’s consolidated balance of sheets, while the securities underlying the securities sold under agreements to repurchase remain in the respective assets accounts and are delivered to and held as collateral by third party trustees.

Marketing and Advertising

Marketing and advertising costs are generally expensed as incurred.

Income Taxes

The Company employs the liability method of accounting for income taxes as required by ASC Topic 740, “Income Taxes.” Under the liability method, deferred tax assets and liabilities are determined based on differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities (i.e., temporary timing differences) and are measured at the enacted rates that will be in effect when these differences reverse. The Company utilizes statutory requirements for its income tax accounting, and avoids risks associated with potentially problematic tax positions that may incur challenge upon audit, where an adverse outcome is more likely than not. Therefore, no provisions are made for either uncertain tax positions nor accompanying potential tax penalties and interest for underpayments of income taxes in the Company’s tax reserves. In accordance with ASC Topic 740, the Company may establish a reserve against deferred tax assets in those cases where realization is less than certain, although no such reserves exist at September 30, 2015, December 31, 2014, or September 30, 2014.   

Transfer of Financial Assets

Transfers of financial assets are accounted for as sales, when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. In certain cases, the recourse to the Bank to repurchase assets may exist but is deemed immaterial based on the specific facts and circumstances.

Earnings per Common Share

Basic net income per common share is derived by dividing net income available to common shareholders by the weighted-average number of common shares outstanding during the period measured. Diluted earnings per common share is computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding during the period measured including the potential dilutive effects of common stock equivalents.

Stock-Based Compensation

In accordance with ASC Topic 718, “Compensation,” the Company records as compensation expense an amount equal to the amortization (over the remaining service period) of the fair value of option and restricted stock awards computed at the date of grant. Compensation expense on variable stock option grants (i.e. performance based grant) is recorded based on the probability of achievement of the goals underlying the performance grant. Refer to Note 9 for a description of stock-based compensation awards, activity and expense.

New Authoritative Accounting Guidance

ASU No. 2015-03, “Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.” The update simplifies the presentation of debt issuance costs by requiring that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of debt liability, consistent with debt discounts or premiums. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this update. This update will be effective for interim and annual periods beginning after December 15, 2015, and is to be applied retrospectively. The Company does not expect the guidance to have a material impact on its financial statements.

ASU 2015-16, “Business Combinations (Topic 805) – Simplifying the Accounting for Measurement-Period Adjustments.” ASU 2015-16 requires that adjustments to provisional amounts that are identified during the measurement period of a business combination be recognized in the reporting period in which the adjustment amounts are determined. Furthermore, the income statement effects of such adjustments, if any, must be calculated as if the accounting had been completed at the acquisition date. The portion of the amount recorded in current-period earnings that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. Under previous guidance, adjustments to provisional amounts identified during the measurement period are to be recognized retrospectively. ASU 2015-16 will be effective for the Company on January 1, 2016 and is not expected to have a significant impact on its financial statements.

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Note 11 - Fair Value Measurements (Details) - Assets Measured at Fair Value Based on Significant Unobservable Inputs - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Assets:
Beginning balance, assets	$ 365	$ 219
Ending balance, assets	416	365
Liabilities:
Beginning balance, liabilities	250	0
Realized gain (loss) included in earnings - net derivatives	(5)	250
Ending balance, liabilities	245	250
Assets:
Realized and unrealized gain (loss) included in earnings - net derivatives	51	146
Equity Investment Other [Member]
Assets:
Beginning balance, assets	219	219
Ending balance, assets	219	219
Liabilities:
Beginning balance, liabilities	0	0
Realized gain (loss) included in earnings - net derivatives	0	0
Ending balance, liabilities	0	0
Assets:
Realized and unrealized gain (loss) included in earnings - net derivatives	0	0
Derivative Assets and Liabilities [Member]
Assets:
Beginning balance, assets	146	0
Ending balance, assets	197	146
Liabilities:
Beginning balance, liabilities	250	0
Realized gain (loss) included in earnings - net derivatives	(5)	250
Ending balance, liabilities	245	250
Assets:
Realized and unrealized gain (loss) included in earnings - net derivatives	$ 51	$ 146

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Note 5 - Loans and Allowance for Credit Losses (Details) - Loans Past Due - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	$ 29,182	$ 38,214
Current loans	4,747,783	4,274,185
Total recorded investment in loans	4,776,965	4,312,399
Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	1,434	4,703
Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	13,281	11,068
Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	14,467	22,443
Commercial Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	8,096	18,512
Current loans	999,563	897,714
Total recorded investment in loans	1,007,659	916,226
Commercial Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	731	1,505
Commercial Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	2,537	4,032
Commercial Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	4,828	12,975
Income Producing Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	11,779	9,846
Current loans	2,011,171	1,693,326
Total recorded investment in loans	2,022,950	1,703,172
Income Producing Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans		1,825
Income Producing Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	5,058	5,376
Income Producing Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	6,721	2,645
Owner Occupied Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	1,600	2,627
Current loans	488,057	458,954
Total recorded investment in loans	489,657	461,581
Owner Occupied Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	319	1,089
Owner Occupied Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans		214
Owner Occupied Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	1,281	1,324
Residential Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	333	346
Current loans	147,387	147,672
Total recorded investment in loans	147,720	148,018
Residential Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	333	346
Construction Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	5,765	3,697
Current loans	981,987	847,767
Total recorded investment in loans	987,752	851,464
Construction Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	157
Construction Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	5,037
Construction Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	571	3,697
Home Equity Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	1,475	2,763
Current loans	113,871	119,773
Total recorded investment in loans	115,346	122,536
Home Equity Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	173
Home Equity Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	641	1,365
Home Equity Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	661	1,398
Other Consumer Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	134	423
Current loans	5,747	108,979
Total recorded investment in loans	5,881	109,402
Other Consumer Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	54	284
Other Consumer Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	8	81
Other Consumer Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due Loans	$ 72	$ 58

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Note 10 - Other Comprehensive Income (Tables)

9 Months Ended

Sep. 30, 2015

Disclosure Text Block [Abstract]

Schedule of Amounts Recognized in Other Comprehensive Income (Loss) [Table Text Block]

(dollars in thousands)	Before Tax			Tax Effect			Net of Tax
Three Months Ended September 30, 2015
Net unrealized gain on securities available-for-sale	$	3,512		$	1,405		$	2,107
Net unrealized loss on derivatives		(6,627	)		(2,651	)		(3,976	)
Less: Reclassification adjustment for net gains included in net income		(60	)		(24	)		(36	)
Other Comprehensive Loss	$	(3,175	)	$	(1,270	)	$	(1,905	)
Three Months Ended September 30, 2014
Net unrealized loss on securities available-for-sale	$	(543	)	$	(217	)	$	(326	)
Less: Reclassification adjustment for net gains included in net income		-			-			-
Other Comprehensive Loss	$	(543	)	$	(217	)	$	(326	)
Nine Months Ended September 30, 2015
Net unrealized gain on securities available-for-sale	$	3,325		$	1,330		$	1,995
Net unrealized loss on derivatives		(3,445	)		(1,378	)		(2,067	)
Less: Reclassification adjustment for net gains included in net income		(2,224	)		(890	)		(1,334	)
Other Comprehensive Loss	$	(2,344	)	$	(938	)	$	(1,406	)
Nine Months Ended September 30, 2014
Net unrealized gain on securities available-for-sale	$	8,062		$	3,225		$	4,837
Less: Reclassification adjustment for net gains included in net income		(10	)		(4	)		(6	)
Other Comprehensive Income	$	8,052		$	3,221		$	4,831

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

	Securities						Accumulated Other
(dollars in thousands)	Available For Sale			Derivatives			Comprehensive (Loss) Income
Three Months Ended September 30, 2015
Balance at Beginning of Period	$	3,146		$	-		$	3,146
Other comprehensive income (loss) before reclassifications		2,107			(3,976	)		(1,869	)
Amounts reclassified from accumulated other comprehensive income		(36	)		-			(36	)
Net other comprehensive income (loss) during period		2,071			(3,976	)		(1,905	)
Balance at End of Period	$	5,217		$	(3,976	)	$	1,241
Three Months Ended September 30, 2014
Balance at Beginning of Period	$	1,838		$	-		$	1,838
Other comprehensive loss before reclassifications		(326	)		-			(326	)
Amounts reclassified from accumulated other comprehensive income		-			-			-
Net other comprehensive (loss) during period		(326	)		-			(326	)
Balance at End of Period	$	1,512		$	-		$	1,512
Nine Months Ended September 30, 2015
Balance at Beginning of Period	$	2,647		$	-		$	2,647
Other comprehensive income (loss) before reclassifications		1,995			(2,067	)		(72	)
Amounts reclassified from accumulated other comprehensive income		(1,334	)		-			(1,334	)
Net other comprehensive income (loss) during period		661			(2,067	)		(1,406	)
Balance at End of Period	$	3,308		$	(2,067	)	$	1,241
Nine Months Ended September 30, 2014
Balance at Beginning of Period	$	(3,319	)	$	-		$	(3,319	)
Other comprehensive income before reclassifications		4,837			-			4,837
Amounts reclassified from accumulated other comprehensive income		(6	)		-			(6	)
Net other comprehensive income during period		4,831			-			4,831
Balance at End of Period	$	1,512		$	-		$	1,512

Reclassification out of Accumulated Other Comprehensive Income [Table Text Block]

	Amount Reclassified from					Affected Line Item in
Details about Accumulated Other	Accumulated Other					the Statement Where
Comprehensive Income Components (dollars in thousands)	Comprehensive (Loss) Income					Net Income is Presented
	Three Months Ended September 30,
	2015			2014
Realized gain on sale of investment securities	$	60		$	-	Gain on sale of investment securities
		(24	)		-	Tax Expense
Total Reclassifications for the Period	$	36		$	-	Net of Tax

	Amount Reclassified from						Affected Line Item in
Details about Accumulated Other	Accumulated Other						the Statement Where
Comprehensive Income Components (dollars in thousands)	Comprehensive (Loss) Income						Net Income is Presented
	Nine Months Ended September 30,
	2015			2014
Realized gain on sale of investment securities	$	2,224		$	10		Gain on sale of investment securities
		(890	)		(4	)	Tax Expense
Total Reclassifications for the Period	$	1,334		$	6		Net of Tax

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Note 9 - Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

	Nine Months Ended September 30,
	2015					2014
	Shares			Weighted-Average Exercise Price		Shares			Weighted-Average Exercise Price
Beginning balance		759,683		$	11.36		503,834		$	10.41
Issued		-			-		21,000			32.77
Exercised		(377,357	)		12.73		(64,926	)		16.78
Forfeited		(12,380	)		29.58		(110	)		5.76
Expired		(8,476	)		17.32		(1,225	)		9.00
Ending balance		361,470		$	9.16		458,573		$	10.54

Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range [Table Text Block]

								Weighted-Average
Outstanding:				Stock Options		Weighted-Average		Remaining
Range of Exercise Prices				Outstanding		Exercise Price		Contractual Life
$	5.76	$	9.21		221,669	$	5.76		3.28
$	9.22	$	15.47		108,611		12.40		2.15
$	15.48	$	22.66		18,794		19.28		7.75
$	22.67	$	32.36		12,396		26.18		2.19
					361,470	$	9.16		3.13

Exercisable:				Stock Options		Weighted-Average
Range of Exercise Prices				Exercisable		Exercise Price
$	5.76	$	9.21		164,759	$	5.76
$	9.22	$	15.47		101,941		12.51
$	15.48	$	22.66		15,164		19.60
$	22.67	$	32.36		10,896		26.36
					292,760	$	9.60

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

	Nine Months Ended			Years Ended December 31,
	September 30, 2015			2014			2013
Expected volatility		N/A			34.25	%		34.12	%
Weighted-Average volatility		N/A			34.25	%		34.12	%
Expected dividends		0.0	%		0.0	%		0.0	%
Expected term (in years)		N/A			9.4			7.5
Risk-free rate		N/A			2.26	%		1.31	%
Weighted-average fair value (grant date)		N/A		$	13.49		$	7.83

Schedule of Share-based Compensation, Restricted Stock Units Award Activity [Table Text Block]

	Nine Months Ended September 30,
	2015					2014
	Shares			Weighted- Average Grant Date Fair Value		Shares			Weighted- Average Grant Date Fair Value
Unvested at beginning		509,336		$	21.58		614,580		$	18.71
Issued		78,070			36.06		78,947			33.24
Forfeited		(4,150	)		31.83		(832	)		23.59
Vested		(195,503	)		20.74		(184,921	)		17.54
Unvested at end		387,753		$	24.81		507,774		$	21.33

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Note 9 - Stock-Based Compensation (Details) - Fair Value of Each Stock Option Grant - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014	Dec. 31, 2013
Fair Value of Each Stock Option Grant [Abstract]
Expected volatility		34.25%	34.12%
Weighted-Average volatility		34.25%	34.12%
Expected dividends	0.00%	0.00%	0.00%
Expected term (in years)		9 years 146 days	7 years 6 months
Risk-free rate		2.26%	1.31%
Weighted-average fair value (grant date) (in Dollars per share)		$ 13.49	$ 7.83

XML

Note 5 - Loans and Allowance for Credit Losses (Details) - Impaired Loans - USD ($) $ in Thousands	9 Months Ended		12 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Financing Receivable, Impaired [Line Items]
Unpaid Contractual Principal Balance	$ 33,833	$ 39,186	$ 37,420
Recorded Investment With No Allowance	18,409	16,440	20,454
Recorded Investment With Allowance	11,287	20,780	15,491
Total Recorded Investment	29,696	37,220	35,945
Related Allowance	4,227	8,013	8,064
Interest Income Recognized	127
Commercial Portfolio Segment [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Contractual Principal Balance	9,444	16,531	14,075
Recorded Investment With No Allowance	2,663	950	1,603
Recorded Investment With Allowance	3,337	14,481	11,372
Total Recorded Investment	6,000	15,431	12,975
Related Allowance	2,312	4,409	5,334
Income Producing Portfolio Segment [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Contractual Principal Balance	15,925	6,284	10,869
Recorded Investment With No Allowance	9,215	4,839	8,952
Recorded Investment With Allowance	6,017	1,070	1,542
Total Recorded Investment	15,232	5,909	10,494
Related Allowance	827	578	751
Owner Occupied Portfolio Segment [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Contractual Principal Balance	1,790	3,502	1,889
Recorded Investment With No Allowance	973	391	1,038
Recorded Investment With Allowance	817	3,111	851
Total Recorded Investment	1,790	3,502	1,889
Related Allowance	400	1,330	577
Residential Portfolio Segment [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Contractual Principal Balance	333	350	346
Recorded Investment With No Allowance	333	350	346
Total Recorded Investment	333	350	346
Construction Portfolio Segment [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Contractual Principal Balance	5,608	11,931	8,785
Recorded Investment With No Allowance	5,037	9,785	8,176
Recorded Investment With Allowance	571	1,655	609
Total Recorded Investment	5,608	11,440	8,785
Related Allowance	350	1,478	927
Home Equity Portfolio Segment [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Contractual Principal Balance	661	588	1,398
Recorded Investment With No Allowance	116	125	339
Recorded Investment With Allowance	545	463	1,059
Total Recorded Investment	661	588	1,398
Related Allowance	338	218	430
Other Consumer Portfolio Segment [Member]
Financing Receivable, Impaired [Line Items]
Unpaid Contractual Principal Balance	72		58
Recorded Investment With No Allowance	72
Recorded Investment With Allowance			58
Total Recorded Investment	72		58
Related Allowance			45
Quarter to Date [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	29,111	33,817	36,584
Interest Income Recognized	328	326	691
Quarter to Date [Member] | Commercial Portfolio Segment [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	7,978	12,051	14,203
Interest Income Recognized	39	228	20
Quarter to Date [Member] | Income Producing Portfolio Segment [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	12,542	5,975	8,202
Interest Income Recognized	188	(71)	196
Quarter to Date [Member] | Owner Occupied Portfolio Segment [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	1,811	3,366	2,696
Interest Income Recognized		6
Quarter to Date [Member] | Residential Portfolio Segment [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	336	500	348
Quarter to Date [Member] | Construction Portfolio Segment [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	5,625	11,429	10,113
Interest Income Recognized	100	159	436
Quarter to Date [Member] | Home Equity Portfolio Segment [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	774	496	993
Interest Income Recognized		4	32
Quarter to Date [Member] | Other Consumer Portfolio Segment [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	45		29
Interest Income Recognized	1		7
Year to Date [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	31,794	36,137	36,961
Interest Income Recognized	607	959	1,650
Year to Date [Member] | Commercial Portfolio Segment [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	10,047	12,132	13,681
Interest Income Recognized	48	231	251
Year to Date [Member] | Income Producing Portfolio Segment [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	11,388	5,873	7,021
Interest Income Recognized	259	7	203
Year to Date [Member] | Owner Occupied Portfolio Segment [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	1,844	4,877	3,986
Interest Income Recognized		6	6
Year to Date [Member] | Residential Portfolio Segment [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	340	665	529
Year to Date [Member] | Construction Portfolio Segment [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	7,176	12,004	10,967
Interest Income Recognized	298	711	1,147
Year to Date [Member] | Home Equity Portfolio Segment [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	959	553	747
Interest Income Recognized		4	36
Year to Date [Member] | Other Consumer Portfolio Segment [Member]
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	40	$ 33	30
Interest Income Recognized	$ 2		$ 7

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Note 11 - Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2015

Disclosure Text Block [Abstract]

Fair Value, Assets Measured on Recurring Basis [Table Text Block]

(dollars in thousands)	Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)		Total (Fair Value)
September 30, 2015
Assets:
Investment securities available for sale:
U. S. Government agency securities	$	-	$	69,078	$	-	$	69,078
Residential mortgage backed securities		-		322,020		-		322,020
Municipal bonds		-		117,866		-		117,866
Corporate bonds		-		15,018		-		15,018
Other equity investments		125		-		219		344
Loans held for sale		-		35,713		-		35,713
Mortgage banking derivatives		-		-		197		197
Interest rate swap derivatives		-		-		-		-
Total assets measured at fair value on a recurring basis as of September 30, 2015	$	125	$	559,695	$	416	$	560,236
Liabilities:
Interest rate swap derivatives		-		3,445		-		3,445
Total liabilities measured at fair value on a recurring basis as of September 30, 2015	$	-	$	3,445	$	-	$	3,445

(dollars in thousands)	Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)		Total (Fair Value)
December 31, 2014
Assets:
Investment securities available for sale:
U. S. Government agency securities	$	-	$	29,894	$	-	$	29,894
Residential mortgage backed securities		-		240,320		-		240,320
Municipal bonds		-		111,712		-		111,712
Other equity investments		198		-		219		417
Loans held for sale		-		44,317		-		44,317
Mortgage banking derivatives		-		-		146		146
Total assets measured at fair value on a recurring basis as of December 31, 2014	$	198	$	426,243	$	365	$	426,806
Liabilities:
Interest rate swap derivatives		-		-		-		-
Total liabilities measured at fair value on a recurring basis as of September 30, 2014	$	-	$	-	$	-	$	-

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

	Other Equity		Derivative
(dollars in thousands)	Investments		Assets/(Liabilities)			Total
Assets:
Beginning balance at December 31, 2014	$	219	$	146		$	365
Realized gain (loss) included in earnings - net mortgage banking derivatives		-		51			51
Principal redemption		-		-			-
Ending balance at September 30, 2015	$	219	$	197		$	416
Liabilities:
Beginning balance at December 31, 2014	$	-	$	250		$	250
Realized gain (loss) included in earnings - net mortgage banking derivatives		-		(5	)		(5	)
Principal redemption		-		-			-
Ending balance at September 30, 2015	$	-	$	245		$	245

	Other Equity		Derivative
(dollars in thousands)	Investments		Assets/(Liabilities)		Total
Assets:
Beginning balance at December 31, 2013	$	219	$	-	$	219
Realized gain (loss) included in earnings - net mortgage banking derivatives		-		146		146
Ending balance at December 31, 2014	$	219	$	146	$	365
Liabilities:
Beginning balance at December 31, 2013	$	-	$	-	$	-
Realized gain (loss) included in earnings - net mortgage banking derivatives		-		250		250
Ending balance at December 31, 2014	$	-	$	250	$	250

Fair Value Measurements, Nonrecurring [Table Text Block]

(dollars in thousands)	Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)		Total (Fair Value)
September 30, 2015
Impaired loans:
Commercial	$	-	$	279	$	2,237	$	2,516
Income producing - commercial real estate		-		5,587		307		5,894
Owner occupied - commercial real estate		-		282		599		881
Real estate mortgage - residential		-		-		333		333
Construction - commercial and residential		-		-		221		221
Home equity		-		198		125		323
Other consumer		-		-		72		72
Other real estate owned		-		9,494		458		9,952
Total assets measured at fair value on a nonrecurring basis as of September 30, 2015	$	-	$	15,840	$	4,352	$	20,192

(dollars in thousands)	Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)		Total (Fair Value)
December 31, 2014
Impaired loans:
Commercial	$	-	$	781	$	7,171	$	7,952
Income producing - commercial real estate		-		703		1,199		1,902
Owner occupied - commercial real estate		-		-		824		824
Real estate mortgage - residential		-		-		346		346
Construction - commercial and residential		-		-		3,297		3,297
Home equity		-		5		963		968
Other consumer		-		-		13		13
Other real estate owned		-		9,184		4,040		13,224
Total assets measured at fair value on a nonrecurring basis as of December 31, 2014	$	-	$	10,673	$	17,853	$	28,526

Fair Value, by Balance Sheet Grouping [Table Text Block]

					Fair Value Measurements
					Quoted Prices in Active Markets for Identical Assets or Liabilities		Significant Other Observable Inputs		Significant Unobservable Inputs
(dollars in thousands)	Carrying Value		Fair Value		(Level 1)		(Level 2)		(Level 3)
September 30, 2015
Assets
Cash and due from banks	$	10,703	$	10,703	$	-	$	10,703	$	-
Federal funds sold		4,076		4,076		-		4,076		-
Interest bearing deposits with other banks		291,276		291,276		-		291,276		-
Investment securities		524,326		524,326		125		523,982		219
Federal Reserve and Federal Home Loan Bank stock		16,865		16,865		-		16,865		-
Loans held for sale		35,713		35,713		-		35,713		-
Loans		4,776,965		4,778,753		-		6,346		4,772,407
Bank owned life insurance		58,284		58,284		-		58,284		-
Annuity investment		12,137		12,137		-		12,137		-
Mortgage banking derivatives		197		197		-		-		197
Interst rate swap derivatives		-		-		-		-		-
Liabilities
Noninterest bearing deposits		1,402,447		1,402,447		-		1,402,447		-
Interest bearing deposits		2,722,026		2,722,026		-		2,722,026		-
Certificates of deposit		802,115		802,449		-		802,449		-
Customer repurchase agreements		64,893		64,893		-		64,893		-
Borrowings		70,000		70,000		-		70,000		-
Mortgage banking derivatives		245		245		-		-		245
Interst rate swap derivatives		3,445		3,445		-		3,445		-
December 31, 2014
Assets
Cash and due from banks	$	9,097	$	9,097	$	-	$	9,097	$	-
Federal funds sold		3,516		3,516		-		3,516		-
Interest bearing deposits with other banks		243,412		243,412		-		243,412		-
Investment securities		382,343		382,343		198		381,926		219
Federal Reserve and Federal Home Loan Bank stock		22,560		22,560		-		22,560		-
Loans held for sale		44,317		44,669		-		44,669		-
Loans		4,312,399		4,314,618		-		1,489		4,313,129
Bank owned life insurance		56,594		56,594		-		56,594		-
Annuity investment		11,277		11,277		-		11,277		-
Mortgage banking derivatives		146		146		-		-		146
Liabilities
Noninterest bearing deposits		1,175,799		1,175,799		-		1,175,799		-
Interest bearing deposits		2,446,228		2,446,228		-		2,446,228		-
Certificates of deposit		688,741		688,067		-		688,067		-
Customer repurchase agreements		61,120		61,120		-		61,120		-
Borrowings		219,300		220,838		-		220,838		-
Mortgage banking derivatives		250		250		-		-		250

XML

Note 1 - Summary of Significant Accounting Policies (Details)		9 Months Ended	12 Months Ended
	Oct. 31, 2014 USD ($)	Sep. 30, 2015 USD ($)	Dec. 31, 2014 USD ($)	Sep. 30, 2014 USD ($)
Note 1 - Summary of Significant Accounting Policies (Details) [Line Items]
Goodwill, Impairment Loss			$ 0
Deferred Tax Assets, Valuation Allowance		$ 0	$ 0	$ 0
Banking Services [Member]
Note 1 - Summary of Significant Accounting Policies (Details) [Line Items]
Number of Offices		22
Lending Services [Member]
Note 1 - Summary of Significant Accounting Policies (Details) [Line Items]
Number of Offices		4
Virginia Heritage Bank [Member]
Note 1 - Summary of Significant Accounting Policies (Details) [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Loans	$ 800,000,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deposit Liabilities	645,000,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Borrowings	95,000,000
Goodwill	102,300,000
Business Combination, Fair Value Credit Mark on Loan Portfolio	12,500,000
Eagle Commercial Ventures, LLC [Member] | Risk Level, High [Member]
Note 1 - Summary of Significant Accounting Policies (Details) [Line Items]
Number of Higher Risk Lending Transactions Outstanding		7	4
Loans Receivable, Net		$ 11,500,000	$ 6,200,000
Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | Virginia Heritage Bank [Member]
Note 1 - Summary of Significant Accounting Policies (Details) [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Loans	3,000,000
Minimum [Member]
Note 1 - Summary of Significant Accounting Policies (Details) [Line Items]
Loan Period		30 days
Minimum [Member] | Furniture and Fixtures [Member]
Note 1 - Summary of Significant Accounting Policies (Details) [Line Items]
Property, Plant and Equipment, Useful Life		5 years
Minimum [Member] | Building and Building Improvements [Member]
Note 1 - Summary of Significant Accounting Policies (Details) [Line Items]
Property, Plant and Equipment, Useful Life		10 years
Maximum [Member]
Note 1 - Summary of Significant Accounting Policies (Details) [Line Items]
Loan Period		90 days
Maximum [Member] | Furniture and Fixtures [Member]
Note 1 - Summary of Significant Accounting Policies (Details) [Line Items]
Property, Plant and Equipment, Useful Life		7 years
Maximum [Member] | Building and Building Improvements [Member]
Note 1 - Summary of Significant Accounting Policies (Details) [Line Items]
Property, Plant and Equipment, Useful Life		40 years
Core Deposits [Member] | Virginia Heritage Bank [Member]
Note 1 - Summary of Significant Accounting Policies (Details) [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles	$ 4,600,000
Finite-Lived Intangible Asset, Useful Life	6 years
Servicing Contracts [Member]
Note 1 - Summary of Significant Accounting Policies (Details) [Line Items]
Other Intangible Assets, Net		$ 0	$ 0	$ 0
Computer Software, Intangible Asset [Member] | Minimum [Member]
Note 1 - Summary of Significant Accounting Policies (Details) [Line Items]
Property, Plant and Equipment, Useful Life		3 years
Computer Software, Intangible Asset [Member] | Maximum [Member]
Note 1 - Summary of Significant Accounting Policies (Details) [Line Items]
Property, Plant and Equipment, Useful Life		5 years

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Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Cash Flows From Operating Activities:
Net Income	$ 61,819	$ 39,531
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses	10,043	7,179
Depreciation and amortization	8,117	3,514
Gains on sale of loans	(9,364)	(4,686)
Securities premium amortization (discount accretion), net	2,304	2,638
Origination of loans held for sale	(726,230)	(384,890)
Proceeds from sale of loans held for sale	744,198	390,352
Net increase in cash surrender value of BOLI	(1,191)	(919)
(Increase) decrease in deferred income taxes	(2,915)	3,146
Decrease in fair value of other real estate owned	750	589
Net loss on sale of other real estate owned	209	138
Net gain on sale of investment securities	(2,224)	(10)
Loss on early extinguishment of debt	1,130
Stock-based compensation expense	3,660	2,948
Excess tax benefits from stock-based compensation	(1,945)	(338)
Increase in other assets	(4,149)	(11,150)
Decrease in other liabilities	5,475	(7,995)
Net cash provided by operating activities	89,687	40,047
Cash Flows From Investing Activities:
Decrease in interest bearing deposits with other banks and short-term investments	374	26
Purchases of available for sale investment securities	(241,280)	(47,219)
Proceeds from maturities of available for sale securities	32,021	27,602
Proceeds from sale/call of available for sale securities	65,790	17,485
Purchases of Federal Reserve and Federal Home Loan Bank stock	(2,405)	(84)
Proceeds from redemption of Federal Reserve and Federal Home Loan Bank stock	8,100	699
Net increase in loans	(472,089)	(491,336)
Proceeds from sale of other real estate owned	1,846	205
Purchases of BOLI	(499)
Purchases of annuities	(992)
Bank premises and equipment acquired	(2,053)	(4,392)
Net cash used in investing activities	(611,187)	(497,014)
Cash Flows From Financing Activities:
Increase in deposits	615,820	308,436
Increase (decrease) in customer repurchase agreements	3,773	(21,514)
Issuance of common stock	94,633
Decrease in short-term borrowings	(100,000)
(Decrease) increase in long-term borrowings	(49,300)	70,000
Payment of dividends on preferred stock	(539)	(434)
Proceeds from exercise of stock options	4,640	1,089
Excess tax benefits from stock-based compensation	1,945	338
Payment in lieu of fractional shares	(4)
Proceeds from employee stock purchase plan	562	448
Net cash provided by financing activities	571,530	358,363
Net Increase (Decrease) In Cash and Cash Equivalents	50,030	(98,604)
Cash and Cash Equivalents at Beginning of Period	256,025	306,960
Cash and Cash Equivalents at End of Period	306,055	208,356
Supplemental Cash Flows Information:
Interest paid	15,800	8,646
Income taxes paid	38,550	24,750
Non-Cash Investing Activities
Transfers from loans to other real estate owned	1,725	$ 330
Transfers from other real estate owned to loans	$ 2,192

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Note 3 - Investment Securities Available-for-Sale (Details) - USD ($)	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Note 3 - Investment Securities Available-for-Sale (Details) [Line Items]
Federal Home Loan Bank Stock and Federal Reserve Bank Stock	$ 16,865,000	$ 10,657,000	$ 22,560,000
Debt Securities, Weighted Average Duration	3 years 255 days
Available-for-sale Securities, Gross Realized Gains	$ 2,500,000	116,000
Available-for-sale Securities, Gross Realized Losses	294,000	106,000
Proceeds from Sale of Available-for-sale Securities	65,800,000	$ 17,500,000
Available-for-sale Securities Pledged as Collateral	450,500,000
Securities Holdings of any One Issuer Exceeding 10% of Shareholders' Equity	$ 0		$ 0
Debt Securities [Member] | Total Investment Securities [Member] | Investment Securities Concentration Risk [Member]
Note 3 - Investment Securities Available-for-Sale (Details) [Line Items]
Concentration Risk, Percentage	99.90%

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Note 5 - Loans and Allowance for Credit Losses (Details) - Recorded Investment in Loans by Impairment Method - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014	Sep. 30, 2014
Recorded investment in loans:
Individually evaluated for impairment	$ 39,913	$ 45,310	$ 43,773
Collectively evaluated for impairment	4,737,052	4,267,089	3,388,775
Ending balance	4,776,965	4,312,399	3,432,548
Commercial Portfolio Segment [Member]
Recorded investment in loans:
Individually evaluated for impairment	12,869	17,612	17,785
Collectively evaluated for impairment	994,790	898,614	780,704
Ending balance	1,007,659	916,226	798,489
Income Producing Portfolio Segment [Member]
Recorded investment in loans:
Individually evaluated for impairment	6,877	5,109	2,710
Collectively evaluated for impairment	2,016,073	1,698,063	1,380,129
Ending balance	2,022,950	1,703,172	1,382,839
Owner Occupied Portfolio Segment [Member]
Recorded investment in loans:
Individually evaluated for impairment	1,790	6,891	5,054
Collectively evaluated for impairment	487,867	454,690	332,368
Ending balance	489,657	461,581	337,422
Residential Portfolio Segment [Member]
Recorded investment in loans:
Collectively evaluated for impairment	147,720	148,018	126,263
Ending balance	147,720	148,018	126,263
Construction Portfolio Segment [Member]
Recorded investment in loans:
Individually evaluated for impairment	17,644	14,241	17,479
Collectively evaluated for impairment	970,108	837,223	659,103
Ending balance	987,752	851,464	676,582
Home Equity Portfolio Segment [Member]
Recorded investment in loans:
Individually evaluated for impairment	661	1,398	745
Collectively evaluated for impairment	114,685	121,138	106,546
Ending balance	115,346	122,536	107,291
Other Consumer Portfolio Segment [Member]
Recorded investment in loans:
Individually evaluated for impairment	72	59
Collectively evaluated for impairment	5,809	109,343	3,662
Ending balance	$ 5,881	$ 109,402	$ 3,662

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Note 9 - Stock-Based Compensation (Details)	1 Months Ended			9 Months Ended
	Mar. 31, 2015 shares	Feb. 28, 2015 shares	May. 31, 2011 USD ($) shares	Sep. 30, 2015 USD ($) shares	Sep. 30, 2014 USD ($) shares	Dec. 31, 2014 shares	Dec. 31, 2013 shares
Note 9 - Stock-Based Compensation (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in Shares)				0	21,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value | $				$ 10,600,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value | $				8,500,000	$ 1,100,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | $				87,000	125,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options | $				$ 69,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition				2 years 248 days
Allocated Share-based Compensation Expense | $				$ 3,660,000	2,948,000
Virginia Heritage Plans [Member]
Note 9 - Stock-Based Compensation (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant (in Shares)				0
The 1998 Stock Option Plan [Member]
Note 9 - Stock-Based Compensation (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant (in Shares)				0
The Fidelity Plans [Member]
Note 9 - Stock-Based Compensation (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant (in Shares)				0
2006 Stock Plan [Member]
Note 9 - Stock-Based Compensation (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in Shares)				1,996,500
The 2011 ESPP [Member]
Note 9 - Stock-Based Compensation (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant (in Shares)				437,727
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized (in Shares)			550,000
Employee Stock Purchase Plan, Percentage of Market Value			85.00%
Salaries and Employee Benefits [Member]
Note 9 - Stock-Based Compensation (Details) [Line Items]
Allocated Share-based Compensation Expense | $				$ 3,700,000	$ 2,900,000
Performance Shares [Member]
Note 9 - Stock-Based Compensation (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number (in Shares)				0
Restricted Stock [Member]
Note 9 - Stock-Based Compensation (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in Shares)	700	77,370		78,070	78,947
Share-based Compensation Arrangement by Share-based Payment Award, Number of Vesting Periods	5	3
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number (in Shares)				387,753	507,774	509,336	614,580
Restricted Stock [Member] | 2006 Stock Plan [Member]
Note 9 - Stock-Based Compensation (Details) [Line Items]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition				1 year 240 days
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number (in Shares)				387,753
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options | $				$ 6,600,000
Minimum [Member] | The 2011 ESPP [Member]
Note 9 - Stock-Based Compensation (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Requisite Service Period			1 year
Minimum [Member] | Pay Period [Member] | The 2011 ESPP [Member]
Note 9 - Stock-Based Compensation (Details) [Line Items]
Amount Contributed To ESPP | $			$ 10
Minimum Hours Per Week [Member] | The 2011 ESPP [Member]
Note 9 - Stock-Based Compensation (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Requisite Service Period			20 hours
Minimum Months Per Year [Member] | The 2011 ESPP [Member]
Note 9 - Stock-Based Compensation (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Requisite Service Period			5 months
Maximum [Member] | The 2011 ESPP [Member]
Note 9 - Stock-Based Compensation (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Maximum Employee Subscription Rate			10.00%
Maximum [Member] | Offering Period [Member] | The 2011 ESPP [Member]
Note 9 - Stock-Based Compensation (Details) [Line Items]
Amount Contributed To ESPP | $			$ 6,250
Maximum [Member] | Annually [Member] | The 2011 ESPP [Member]
Note 9 - Stock-Based Compensation (Details) [Line Items]
Amount Contributed To ESPP | $			$ 25,000

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Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014	Sep. 30, 2014
Assets
Cash and due from banks	$ 10,703	$ 9,097	$ 7,920
Federal funds sold	4,076	3,516	8,968
Interest bearing deposits with banks and other short-term investments	291,276	243,412	191,468
Investment securities available-for-sale, at fair value	524,326	382,343	382,468
Federal Reserve and Federal Home Loan Bank stock	16,865	22,560	10,657
Loans held for sale	35,713	44,317	41,254
Loans	4,776,965	4,312,399	3,432,548
Less allowance for credit losses	(50,320)	(46,075)	(44,954)
Loans, net	4,726,645	4,266,324	3,387,594
Premises and equipment, net	17,070	19,099	17,848
Deferred income taxes	35,426	32,511	25,803
Bank owned life insurance	58,284	56,594	40,432
Intangible assets, net	109,498	109,908	3,321
Other real estate owned	9,952	13,224	8,623
Other assets	49,124	44,975	42,825
Total Assets	5,888,958	5,247,880	4,169,181
Deposits:
Noninterest bearing demand	1,402,447	1,175,799	1,056,559
Interest bearing transaction	207,716	143,628	161,886
Savings and money market	2,514,310	2,302,600	1,944,593
Time, $100,000 or more	439,248	393,132	190,137
Other time	362,867	295,609	180,675
Total deposits	4,926,588	4,310,768	3,533,850
Customer repurchase agreements	64,893	61,120	58,957
Other short-term borrowings		100,000
Long-term borrowings	70,000	119,300	109,300
Other liabilities	41,408	35,933	24,460
Total Liabilities	5,102,889	4,627,121	3,726,567
Shareholders' Equity
Preferred stock, par value $.01 per share, shares authorized 1,000,000, Series B, $1,000 per share liquidation preference, shares issued and outstanding 56,600 at September 30, 2015, December 31, 2014 and September 30, 2014; Series C, $1,000 per share liquidation preference, shares issued and outstanding 15,300 at September 30, 2015, and December 31, 2014, and -0- at September 30, 2014	71,900	71,900	56,600
Common stock, par value $.01 per share; shares authorized 100,000,000, shares issued and outstanding 33,405,510, 30,139,396 and 26,022,307 respectively	330	296	255
Warrant	946	946	946
Additional paid in capital	500,334	394,933	247,811
Retained earnings	211,318	150,037	135,490
Accumulated other comprehensive income	1,241	2,647	1,512
Total Shareholders' Equity	786,069	620,759	442,614
Total Liabilities and Shareholders' Equity	$ 5,888,958	$ 5,247,880	$ 4,169,181

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Note 5 - Loans and Allowance for Credit Losses (Details) - Troubled Debt Restructurings $ in Thousands	9 Months Ended		12 Months Ended
	Sep. 30, 2015 USD ($)	Sep. 30, 2014 USD ($)	Dec. 31, 2014 USD ($)
Financing Receivable, Modifications [Line Items]
Number of Contracts	10		6
TDRs	$ 15,445	$ 2,100	$ 13,729
Commercial Portfolio Segment [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts	4		1
TDRs	$ 1,387		$ 227
Income Producing Portfolio Segment [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts	4		3
TDRs	$ 8,512		$ 7,849
Owner Occupied Portfolio Segment [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts	1		1
TDRs	$ 509		$ 565
Construction Portfolio Segment [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts	1		1
TDRs	$ 5,037		$ 5,088
Performing Financial Instruments [Member]
Financing Receivable, Modifications [Line Items]
TDRs	15,230		13,502
Performing Financial Instruments [Member] | Commercial Portfolio Segment [Member]
Financing Receivable, Modifications [Line Items]
TDRs	1,172
Performing Financial Instruments [Member] | Income Producing Portfolio Segment [Member]
Financing Receivable, Modifications [Line Items]
TDRs	8,512		7,849
Performing Financial Instruments [Member] | Owner Occupied Portfolio Segment [Member]
Financing Receivable, Modifications [Line Items]
TDRs	509		565
Performing Financial Instruments [Member] | Construction Portfolio Segment [Member]
Financing Receivable, Modifications [Line Items]
TDRs	5,037		5,088
Nonperforming Financial Instruments [Member]
Financing Receivable, Modifications [Line Items]
TDRs	215		227
Nonperforming Financial Instruments [Member] | Commercial Portfolio Segment [Member]
Financing Receivable, Modifications [Line Items]
TDRs	$ 215		$ 227

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Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) $ in Thousands	Preferred Stock [Member]	Common Stock [Member]	Warrant [Member]	Additional Paid-in Capital [Member]	AOCI Attributable to Parent [Member]	Comprehensive Income [Member]	Total
Beginning balance at Dec. 31, 2013	$ 56,600	$ 253	$ 946	$ 242,990	$ 96,393	$ (3,319)	$ 393,863
Beginning balance (in Shares) at Dec. 31, 2013	56,600	25,885,863
Ending balance at Sep. 30, 2014	$ 56,600	$ 255	946	247,811	135,490	1,512	442,614
Ending balance (in Shares) at Sep. 30, 2014	56,600	26,022,307
Net Income					39,531		39,531
Net change in other comprehensive income, net of tax						4,831	4,831
Stock-based compensation				2,948			2,948
Issuance of common stock related to options exercised				1,089			$ 1,089
Issuance of common stock related to options exercised (in Shares)		64,926					64,926
Tax benefits related to non-qualified stock compensation				338			$ 338
Vesting of restricted stock awards issued at date of grant, net of shares withheld for payroll taxes		$ 2		(2)
Vesting of restricted stock awards issued at date of grant, net of shares withheld for payroll taxes (in Shares)		(21,858)
Restricted stock awards granted (in Shares)		78,947
Issuance of common stock related to employee stock purchase plan				448			448
Issuance of common stock related to employee stock purchase plan (in Shares)		14,429
Preferred stock dividends					(434)		(434)
Beginning balance at Dec. 31, 2014	$ 71,900	$ 296	946	394,933	150,037	2,647	620,759
Beginning balance (in Shares) at Dec. 31, 2014	71,900	30,139,396
Ending balance at Sep. 30, 2015	$ 71,900	$ 330	$ 946	500,334	211,318	1,241	786,069
Ending balance (in Shares) at Sep. 30, 2015	71,900	33,405,510
Net Income					61,819		61,819
Net change in other comprehensive income, net of tax						$ (1,406)	(1,406)
Stock-based compensation				3,660			3,660
Issuance of common stock related to options exercised		$ 4		4,636			$ 4,640
Issuance of common stock related to options exercised (in Shares)		373,027					377,357
Tax benefits related to non-qualified stock compensation				1,945			$ 1,945
Vesting of restricted stock awards issued at date of grant, net of shares withheld for payroll taxes		$ 2		(2)
Vesting of restricted stock awards issued at date of grant, net of shares withheld for payroll taxes (in Shares)		(17,877)
Restricted stock awards granted (in Shares)		78,070
Shares issued in public offering, net of issuance costs of $5,302		$ 28		94,605			94,633
Shares issued in public offering, net of issuance costs of $5,302 (in Shares)		2,816,900
Issuance of common stock related to employee stock purchase plan				561	1		562
Issuance of common stock related to employee stock purchase plan (in Shares)		15,994
Cash paid in lieu of fractional shares upon merger with Virginia Heritage				$ (4)			(4)
Preferred stock dividends					$ (539)		$ (539)

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Note 10 - Other Comprehensive Income (Details) - Changes in Each Component of Accumulated Other Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance at Beginning of Period	$ 3,146	$ 1,838	$ 2,647	$ (3,319)
Three Months Ended September 30, 2014
Other comprehensive income (loss) before reclassifications	(1,869)	(326)	(72)	4,837
Amounts reclassified from accumulated other comprehensive income	(36)		(1,334)	(6)
Net other comprehensive income (loss) during period	(1,905)	(326)	(1,406)	4,831
Balance at End of Period	1,241	1,512	1,241	1,512
Accumulated Net Investment Gain (Loss) Attributable to Parent [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance at Beginning of Period	3,146	1,838	2,647	(3,319)
Three Months Ended September 30, 2014
Other comprehensive income (loss) before reclassifications	2,107	(326)	1,995	4,837
Amounts reclassified from accumulated other comprehensive income	(36)		(1,334)	(6)
Net other comprehensive income (loss) during period	2,071	(326)	661	4,831
Balance at End of Period	5,217	$ 1,512	5,217	$ 1,512
Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent [Member]
Three Months Ended September 30, 2014
Other comprehensive income (loss) before reclassifications	(3,976)		(2,067)
Net other comprehensive income (loss) during period	(3,976)		(2,067)
Balance at End of Period	$ (3,976)		$ (3,976)

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Note 3 - Investment Securities Available-for-Sale (Details) - Securities Available-for-sale by Contractual Maturity - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
U. S. Government agency securities maturing:
Residential mortgage backed securities, amortized cost	$ 518,807	$ 377,933
Residential mortgage backed securities, estimated fair value	524,326	382,343
US Government Agencies Debt Securities [Member]
U. S. Government agency securities maturing:
One year or less, amortized cost	44,981	2,998
One year or less, estimated fair value	45,138	3,051
After one year through five years, amortized cost	18,812	19,947
After one year through five years, estimated fair value	19,259	20,276
Five years through ten years, amortized cost	4,496	6,489
Five years through ten years, estimated fair value	4,681	6,567
Residential Mortgage Backed Securities [Member]
U. S. Government agency securities maturing:
Residential mortgage backed securities, amortized cost	320,978	241,120
Residential mortgage backed securities, estimated fair value	322,020	240,320
US States and Political Subdivisions Debt Securities [Member]
U. S. Government agency securities maturing:
One year or less, amortized cost	4,978	2,410
One year or less, estimated fair value	5,024	2,438
After one year through five years, amortized cost	40,040	47,038
After one year through five years, estimated fair value	42,600	49,607
Five years through ten years, amortized cost	66,539	54,983
Five years through ten years, estimated fair value	67,456	56,927
After ten years	2,580	2,552
After ten years	2,786	2,740
Corporate Debt Securities [Member]
U. S. Government agency securities maturing:
After one year through five years, amortized cost	15,096
After one year through five years, estimated fair value	15,018
Equity Investment Other [Member]
U. S. Government agency securities maturing:
Residential mortgage backed securities, amortized cost	307	396
Residential mortgage backed securities, estimated fair value	$ 344	$ 417

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Note 12 - Supplemental Executive Retirement Plan (Details) $ in Thousands	1 Months Ended	3 Months Ended	9 Months Ended
	Feb. 28, 2013 USD ($)	Sep. 30, 2015 USD ($)	Sep. 30, 2015 USD ($)	Dec. 31, 2014 USD ($)
Note 12 - Supplemental Executive Retirement Plan (Details) [Line Items]
Cash Surrender Value of Life Insurance		$ 12,137	$ 12,137	$ 11,277
Supplemental Executive Retirement and Death Benefit Agreements [Member]
Note 12 - Supplemental Executive Retirement Plan (Details) [Line Items]
Time Period for Calculating Base Salary Under SERP Agreements	5 years
Retirement Age	67
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	6 years
Retirement Plan, Monthly Installments	180
Defined Benefit Plan, Net Periodic Benefit Cost		255	764
Purchased Fixed Annuity for Financing Retirement Benefits [Member] | Supplemental Executive Retirement and Death Benefit Agreements [Member]
Note 12 - Supplemental Executive Retirement Plan (Details) [Line Items]
Other Investments	$ 11,400
Purchased Fixed Annuity for Financing Retirement Benefits [Member] | Supplemental Executive Retirement and Death Benefit Agreements [Member] | Other Assets [Member]
Note 12 - Supplemental Executive Retirement Plan (Details) [Line Items]
Cash Surrender Value of Life Insurance		$ 12,100	$ 12,100

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Accounting Policies, by Policy (Policies)

9 Months Ended

Sep. 30, 2015

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation

The consolidated financial statements include the accounts of Eagle Bancorp, Inc. and its subsidiaries (the “Company”), EagleBank (the “Bank”), Eagle Commercial Ventures, LLC (“ECV”), Eagle Insurance Services, LLC, and Bethesda Leasing, LLC, with all significant intercompany transactions eliminated.

The consolidated financial statements of the Company included herein are unaudited. The consolidated financial statements reflect all adjustments, consisting of normal recurring accruals that in the opinion of management, are necessary to present fairly the results for the periods presented. The amounts as of and for the year ended December 31, 2014 were derived from audited consolidated financial statements. Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. There have been no significant changes to the Company’s Accounting Policies as disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. The Company believes that the disclosures are adequate to make the information presented not misleading. Certain reclassifications have been made to amounts previously reported to conform to the current period presentation.

These statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. Operating results for the nine and three months ended September 30, 2015 are not necessarily indicative of the results of operations to be expected for the remainder of the year, or for any other period.

Business Combinations Policy [Policy Text Block]

Business Combinations

Business combinations are accounted for by applying the acquisition method in accordance with Accounting Standards Codification (“ASC”) 805, “Business Combinations.” Under the acquisition method, identifiable assets acquired and liabilities assumed, and any non-controlling interest in the acquiree at the acquisition date are measured at their fair values as of that date, and are recognized separately from goodwill. Results of operations of the acquired entities are included in the consolidated statement of income from the date of acquisition.

On October 31, 2014, the Company completed its acquisition of Virginia Heritage Bank (“Virginia Heritage”). The acquisition of Virginia Heritage was effected through the merger (the “Merger”) of Virginia Heritage with and into EagleBank, in accordance with the Agreement and Plan of Reorganization (the “Merger Agreement”) among the Company, EagleBank and Virginia Heritage, dated June 9, 2014. The acquisition added approximately $800 million in loans, $3 million in loans held for sale, $645 million in deposits, and $95 million in borrowings. An identified intangible related to core deposits was recorded for $4.6 million, which is being amortized over its estimated useful life of approximately 6 years and an initial intangible for goodwill was recorded for approximately $102.3 million. Additionally, in connection with the transaction, the Company recorded a fair value credit mark on the loan portfolio for approximately $12.5 million.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results may differ from those estimates and such differences could be material to the financial statements.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash Flows

For purposes of reporting cash flows, cash and cash equivalents include cash and due from banks, federal funds sold, and interest bearing deposits with other banks which have an original maturity of three months or less.

Trade and Loan Receivables, Nonmortgage Loans Held-for-sale, Policy [Policy Text Block]

Loans Held for Sale

The Company regularly engages in sales of residential mortgage loans and the guaranteed portion of SBA loans originated by the Bank. Loans held for sale are carried at the lower of aggregate cost or fair value. Fair value is derived from secondary market quotations for similar instruments. Gains and losses on sales of these loans are recorded as a component of noninterest income in the consolidated statements of operations.

The Company’s current practice is to sell residential mortgage loans on a servicing released basis, and, therefore, it has no intangible asset recorded for the value of such servicing as of September 30, 2015, December 31, 2014 and September 30, 2014. The sale of the guaranteed portion of SBA loans on a servicing retained basis gives rise to an Excess Servicing Asset, which is computed on a loan by loan basis with the unamortized amount being included in Intangible Assets in the consolidated balance sheets. This Excess Servicing Asset is being amortized on a straight-line basis (with adjustment for prepayments) as an offset to servicing fees collected and is included in Other Income in the consolidated statement of operations.

The Company enters into commitments to originate residential mortgage loans whereby the interest rate on the loan is determined prior to funding (i.e. interest rate lock commitments). Such interest rate lock commitments on mortgage loans to be sold in the secondary market are considered to be derivatives. To protect against the price risk inherent in residential mortgage loan commitments, the Company utilizes both “best efforts” and “mandatory delivery” forward loan sale commitments to mitigate the risk of potential decreases in the values of loans that would result from the exercise of the derivative loan commitments. Under a “best efforts” contract, the Company commits to deliver an individual mortgage loan of a specified principal amount and quality to an investor and the investor commits to a price that it will purchase the loan from the Company if the loan to the underlying borrower closes. The Company protects itself from changes in interest rates through the use of best efforts forward delivery commitments, whereby the investor commits to purchase a loan at a price representing a premium on the day the borrower commits to an interest rate with the intent that the buyer/investor has assumed the interest rate risk on the loan. As a result, the Company is not generally exposed to losses on loans sold utilizing best efforts. Nor will it realize gains related to interest rate lock commitments due to changes in interest rates. The market values of interest rate lock commitments and best efforts contracts are not readily ascertainable with precision because interest rate lock commitments and best efforts contracts are not actively traded. Because of the high correlation between interest rate lock commitments and best efforts contracts, no gain or loss should occur on the interest rate lock commitments. Under a “mandatory delivery” contract, the Company commits to deliver a certain principal amount of mortgage loans to an investor at a specified price on or before a specified date. If the Company fails to deliver the amount of mortgages necessary to fulfill the commitment by the specified date, it is obligated to pay the investor a “pair-off” fee, based on then-current market prices, to compensate the investor for the shortfall. The Company manages the interest rate risk on interest rate lock commitments by entering into forward sale contracts of mortgage backed securities, whereby the Company obtains the right to deliver securities to investors in the future at a specified price. Such contracts are accounted for as derivatives and are recorded at fair value in derivative assets or liabilities, carried on the Consolidated Balance Sheet within Other Assets or Other Liabilities with changes in fair value recorded in other income within the Consolidated Statement of Income. The period of time between issuance of a loan commitment to the customer and closing and sale of the loan to an investor generally ranges from 30 to 90 days under current market conditions. The gross gains on loan sale are recognized based on new loan commitments with adjustment for price and pair-off activity. Commission expenses on loans held for sale are recognized based on loans closed.

In circumstances where the Company does not deliver the whole loan to an investor, but rather elects to retain the loan in its portfolio, the loan is transferred from held for sale to loans at fair value at date of transfer.

Marketable Securities, Policy [Policy Text Block]

Investment Securities

The Company has no securities classified as trading, or as held to maturity. Marketable equity securities and debt securities not classified as held to maturity or trading are classified as available-for-sale. Securities available-for-sale are acquired as part of the Company’s asset/liability management strategy and may be sold in response to changes in interest rates, current market conditions, loan demand, changes in prepayment risk and other factors. Securities available-for-sale are carried at fair value, with unrealized gains or losses being reported as accumulated other comprehensive income/(loss), a separate component of shareholders’ equity, net of deferred income tax. Realized gains and losses, using the specific identification method, are included as a separate component of noninterest income in the consolidated statements of operations.

Premiums and discounts on investment securities are amortized/accreted to the earlier of call or maturity based on expected lives, which lives are adjusted based on prepayment assumptions and call optionality if any. Declines in the fair value of individual available-for-sale securities below their cost that are other-than-temporary in nature result in write-downs of the individual securities to their fair value. Factors affecting the determination of whether other-than-temporary impairment has occurred include a downgrading of the security by a rating agency, a significant deterioration in the financial condition of the issuer, or a change in management’s intent and ability to hold a security for a period of time sufficient to allow for any anticipated recovery in fair value. Management systematically evaluates investment securities for other-than-temporary declines in fair value on a quarterly basis. This analysis requires management to consider various factors, which include (1) duration and magnitude of the decline in value, (2) the financial condition of the issuer or issuers and (3) structure of the security.

The entire amount of an impairment loss is recognized in earnings only when (1) the Company intends to sell the security, or (2) it is more likely than not that the Company will have to sell the security before recovery of its amortized cost basis, or (3) the Company does not expect to recover the entire amortized cost basis of the security. In all other situations, only the portion of the impairment loss representing the credit loss must be recognized in earnings, with the remaining portion being recognized in shareholders’ equity as comprehensive income, net of deferred taxes.

Finance, Loans and Leases Receivable, Policy [Policy Text Block]

Loans

Loans are stated at the principal amount outstanding, net of unamortized deferred costs and fees. Interest income on loans is accrued at the contractual rate on the principal amount outstanding. It is the Company’s policy to discontinue the accrual of interest when circumstances indicate that collection is doubtful. Deferred fees and costs are being amortized on the interest method over the term of the loan.

Management considers loans impaired when, based on current information, it is probable that the Company will not collect all principal and interest payments according to contractual terms. Loans are evaluated for impairment in accordance with the Company’s portfolio monitoring and ongoing risk assessment procedures.  Management considers the financial condition of the borrower, cash flow of the borrower, payment status of the loan, and the value of the collateral, if any, securing the loan. Generally, impaired loans do not include large groups of smaller balance homogeneous loans such as residential real estate and consumer type loans which are evaluated collectively for impairment and are generally placed on nonaccrual when the loan becomes 90 days past due as to principal or interest. Loans specifically reviewed for impairment are not considered impaired during periods of “minimal delay” in payment (ninety days or less) provided eventual collection of all amounts due is expected.  The impairment of a loan is measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate, or the fair value of the collateral if repayment is expected to be provided solely by the collateral.  In appropriate circumstances, interest income on impaired loans may be recognized on a cash basis.

Revenue Recognition, Policy [Policy Text Block]

Higher Risk Lending – Revenue Recognition

The Company has occasionally made higher risk acquisition, development, and construction (“ADC”) loans that entail higher risks than ADC loans made following normal underwriting practices (“higher risk loan transactions”). These higher risk loan transactions are currently made through the Company’s subsidiary, ECV. This activity is limited as to individual transaction amount and total exposure amounts, based on capital levels, and is carefully monitored. The loans are carried on the balance sheet at amounts outstanding and meet the loan classification requirements of the Accounting Standard Executive Committee (“AcSEC”) guidance reprinted from the CPA Letter, Special Supplement, dated February 10, 1986 (also referred to as Exhibit 1 to AcSEC Practice Bulletin No. 1). Additional interest earned on these higher risk loan transactions (as defined in the individual loan agreements) is recognized as realized under the provisions contained in AcSEC’s guidance reprinted from the CPA Letter, Special Supplement, dated February 10, 1986 (also referred to as Exhibit 1 to AcSEC Practice Bulletin No.1) and Staff Accounting Bulletin No. 101 (Revenue Recognition in Financial Statements). Certain additional interest is included as a component of noninterest income.  ECV had seven higher risk lending transactions outstanding as of September 30, 2015, as compared to four higher risk lending transactions outstanding as of December 31, 2014, amounting to $11.5 million and $6.2 million, respectively.

Financing Receivable, Allowance for Credit Losses, Policy or Methodology Change [Policy Text Block]

Allowance for Credit Losses

The allowance for credit losses represents an amount which, in management’s judgment, is adequate to absorb probable losses on loans and other extensions of credit that may become uncollectible. The adequacy of the allowance for credit losses is determined through careful and continuous review and evaluation of the loan portfolio and involves the balancing of a number of factors to establish a prudent level of allowance. Among the factors considered in evaluating the adequacy of the allowance for credit losses are lending risks associated with growth and entry into new markets, loss allocations for specific credits, the level of the allowance to nonperforming loans, historical loss experience, economic conditions, portfolio trends and credit concentrations, changes in the size and character of the loan portfolio, and management’s judgment with respect to current and expected economic conditions and their impact on the existing loan portfolio. Allowances for impaired loans are generally determined based on collateral values. Loans or any portion thereof deemed uncollectible are charged against the allowance, while recoveries are credited to the allowance. Management adjusts the level of the allowance through the provision for credit losses, which is recorded as a current period operating expense. The allowance for credit losses consists of allocated and unallocated components.

The components of the allowance for credit losses represent an estimation done pursuant to ASC Topic 450, “Contingencies,” or ASC Topic 310, “Receivables.” Specific allowances are established in cases where management has identified significant conditions or circumstances related to a specific credit that management believes indicate the probability that a loss may be incurred. For potential problem credits for which specific allowance amounts have not been determined, the Company establishes allowances according to the application of credit risk factors. These factors are set by management and approved by the appropriate Board committee to reflect its assessment of the relative level of risk inherent in each risk grade. A third component of the allowance computation, termed a nonspecific or environmental factors allowance, is based upon management’s evaluation of various environmental conditions that are not directly measured in the determination of either the specific allowance or formula allowance. Such conditions include general economic and business conditions affecting key lending areas, credit quality trends (including trends in delinquencies and nonperforming loans expected to result from existing conditions), loan volumes and concentrations, specific industry conditions within portfolio categories, recent loss experience in particular loan categories, duration of the current business cycle, bank regulatory examination results, findings of outside review consultants, and management’s judgment with respect to various other conditions including credit administration and management and the quality of risk identification systems. Executive management reviews these environmental conditions quarterly, and documents the rationale for all changes.

Management believes that the allowance for credit losses is adequate; however, determination of the allowance is inherently subjective and requires significant estimates. While management uses available information to recognize losses on loans, future additions to the allowance may be necessary based on changes in economic conditions. Evaluation of the potential effects of these factors on estimated losses involves a high degree of uncertainty, including the strength and timing of economic cycles and concerns over the effects of a prolonged economic downturn in the current cycle. In addition, various regulatory agencies, as an integral part of their examination process, and independent consultants engaged by the Bank, periodically review the Bank’s loan portfolio and allowance for credit losses. Such review may result in recognition of additions to the allowance based on their judgments of information available to them at the time of their examination.

Property, Plant and Equipment, Policy [Policy Text Block]

Premises and Equipment

Premises and equipment are stated at cost less accumulated depreciation and amortization computed using the straight-line method for financial reporting purposes. Premises and equipment are depreciated over the useful lives of the assets, which generally range from five to seven years for furniture, fixtures and equipment, to three to five years for computer software and hardware, and to ten to forty years for buildings and building improvements. Leasehold improvements are amortized over the terms of the respective leases, which may include renewal options where management has the positive intent to exercise such options, or the estimated useful lives of the improvements, whichever is shorter. The costs of major renewals and betterments are capitalized, while the costs of ordinary maintenance and repairs are expensed as incurred. These costs are included as a component of premises and equipment expenses on the consolidated statements of operations.

Real Estate, Policy [Policy Text Block]

Other Real Estate Owned (OREO)

Assets acquired through loan foreclosure are held for sale and are recorded at fair value less estimated selling costs when acquired, establishing a new cost basis. The new basis is supported by appraisals that are no more than twelve months old. Costs after acquisition are generally expensed. If the fair value of the asset declines, a write-down is recorded through noninterest expense. The valuation of foreclosed assets is subjective in nature and may be adjusted in the future because of changes in market conditions or appraised values.

Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block]

Goodwill and Other Intangible Assets

Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. Other intangible assets represent purchased assets that lack physical substance but can be distinguished from goodwill because of contractual or other legal rights. Intangible assets that have finite lives, such as core deposit intangibles, are amortized over their estimated useful lives and subject to periodic impairment testing. Intangible assets (other than goodwill) are amortized to expense using accelerated or straight-line methods over their respective estimated useful lives.

Goodwill and other intangibles are subject to impairment testing at the reporting unit level, which must be conducted at least annually. The Company performs impairment testing during the fourth quarter of each year or when events or changes in circumstances indicate the assets might be impaired.

The Company performs a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing updated qualitative factors, the Company determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, it does not have to perform the two-step goodwill impairment test. Determining the fair value of a reporting unit under the first step of the goodwill impairment test and determining the fair value of individual assets and liabilities of a reporting unit under the second step of the goodwill impairment test are judgmental and often involve the use of significant estimates and assumptions. Similarly, estimates and assumptions are used in determining the fair value of other intangible assets. Estimates of fair value are primarily determined using discounted cash flows, market comparisons and recent transactions. These approaches use significant estimates and assumptions including projected future cash flows, discount rates reflecting the market rate of return, projected growth rates and determination and evaluation of appropriate market comparables. Based on the results of quantitative assessments of all reporting units, the Company concluded that no impairment existed at December 31, 2014. However, future events could cause the Company to conclude that goodwill or other intangibles have become impaired, which would result in recording an impairment loss. Any resulting impairment loss could have a material adverse impact on the Company’s financial condition and results of operations.

Derivatives, Policy [Policy Text Block]

Interest Rate Swap Derivatives

The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of its assets and liabilities and through the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. With the exception of forward commitment contracts discussed above under Loans Held for Sale, the Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to certain variable rate deposits.

At the inception of a derivative contract, the Company designates the derivative as one of three types based on the Company’s intentions and belief as to likely effectiveness as a hedge. These three types are (1) a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment (“fair value hedge”), (2) a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (“cash flow hedge”), or (3) an instrument with no hedging designation (“stand-alone derivative”). The Company has no fair value hedges or stand-alone derivatives, only cash flow hedges. For a cash flow hedge, the gain or loss on the derivative is reported in other comprehensive income (a Consolidated Balance Sheet component of Shareholders’ Equity) and is reclassified into earnings in the same period(s) during which the hedged transaction affects earnings (i.e. the period when cash flows are exchanged between counterparties). For both fair value and cash flow hedges, changes in the fair value of derivatives that are not highly effective in hedging the changes in fair value or expected cash flows of the hedged item are recognized immediately in current earnings. Changes in the fair value of derivatives that do not qualify for hedge accounting are reported currently in earnings, as noninterest income.

Net cash settlements on derivatives that qualify for hedge accounting are recorded in interest income or interest expense, based on the item being hedged. Net cash settlements on derivatives that do not qualify for hedge accounting are reported in noninterest income. Cash flows on hedges are classified in the cash flow statement the same as the cash flows of the items being hedged.

The Company formally documents the relationship between derivatives and hedged items, as well as the risk-management objective and the strategy for undertaking hedge transactions at the inception of the hedging relationship. This documentation includes linking fair value or cash flow hedges to specific assets and liabilities on the balance sheet or to specific firm commitments or forecasted transactions. The Company also formally assesses, both at the hedge’s inception and on an ongoing basis, whether the derivative instruments that are used are highly effective in offsetting changes in fair values or cash flows of the hedged items. The Company discontinues hedge accounting when it determines that the derivative is no longer effective in offsetting changes in the fair value or cash flows of the hedged item, the derivative is settled or terminates, a hedged forecasted transaction is no longer probable, a hedged firm commitment is no longer firm, or treatment of the derivative as a hedge is no longer appropriate or intended.

When hedge accounting is discontinued, subsequent changes in fair value of the derivative are recorded as noninterest income or expense. When a fair value hedge is discontinued, the hedged asset or liability is no longer adjusted for changes in fair value and the existing basis adjustment is amortized or accreted over the remaining life of the asset or liability. When a cash flow hedge is discontinued but the hedged cash flows or forecasted transactions are still expected to occur, gains or losses that were accumulated in other comprehensive income are amortized into earnings over the same periods which the hedged transactions will affect earnings.

Repurchase and Resale Agreements Policy [Policy Text Block]

Customer Repurchase Agreements

The Company enters into agreements under which it sells securities subject to an obligation to repurchase the same securities. Under these arrangements, the Company may transfer legal control over the assets but still retain effective control through an agreement that both entitles and obligates the Company to repurchase the assets. As a result, securities sold under agreements to repurchase are accounted for as collateralized financing arrangements and not as a sale and subsequent repurchase of securities. The agreements are entered into primarily as accommodations for large commercial deposit customers. The obligation to repurchase the securities is reflected as a liability in the Company’s consolidated balance of sheets, while the securities underlying the securities sold under agreements to repurchase remain in the respective assets accounts and are delivered to and held as collateral by third party trustees.

Advertising Cost, Policy, Expensed Advertising Cost [Policy Text Block]

Marketing and Advertising

Marketing and advertising costs are generally expensed as incurred.

Income Tax, Policy [Policy Text Block]

Income Taxes

The Company employs the liability method of accounting for income taxes as required by ASC Topic 740, “Income Taxes.” Under the liability method, deferred tax assets and liabilities are determined based on differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities (i.e., temporary timing differences) and are measured at the enacted rates that will be in effect when these differences reverse. The Company utilizes statutory requirements for its income tax accounting, and avoids risks associated with potentially problematic tax positions that may incur challenge upon audit, where an adverse outcome is more likely than not. Therefore, no provisions are made for either uncertain tax positions nor accompanying potential tax penalties and interest for underpayments of income taxes in the Company’s tax reserves. In accordance with ASC Topic 740, the Company may establish a reserve against deferred tax assets in those cases where realization is less than certain, although no such reserves exist at September 30, 2015, December 31, 2014, or September 30, 2014.

Transfers and Servicing of Financial Assets, Policy [Policy Text Block]

Transfer of Financial Assets

Transfers of financial assets are accounted for as sales, when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. In certain cases, the recourse to the Bank to repurchase assets may exist but is deemed immaterial based on the specific facts and circumstances.

Earnings Per Share, Policy [Policy Text Block]

Earnings per Common Share

Basic net income per common share is derived by dividing net income available to common shareholders by the weighted-average number of common shares outstanding during the period measured. Diluted earnings per common share is computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding during the period measured including the potential dilutive effects of common stock equivalents.

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

Stock-Based Compensation

In accordance with ASC Topic 718, “Compensation,” the Company records as compensation expense an amount equal to the amortization (over the remaining service period) of the fair value of option and restricted stock awards computed at the date of grant. Compensation expense on variable stock option grants (i.e. performance based grant) is recorded based on the probability of achievement of the goals underlying the performance grant. Refer to Note 9 for a description of stock-based compensation awards, activity and expense.

New Accounting Pronouncements, Policy [Policy Text Block]

New Authoritative Accounting Guidance

ASU No. 2015-03, “Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.” The update simplifies the presentation of debt issuance costs by requiring that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of debt liability, consistent with debt discounts or premiums. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this update. This update will be effective for interim and annual periods beginning after December 15, 2015, and is to be applied retrospectively. The Company does not expect the guidance to have a material impact on its financial statements.

ASU 2015-16, “Business Combinations (Topic 805) – Simplifying the Accounting for Measurement-Period Adjustments.” ASU 2015-16 requires that adjustments to provisional amounts that are identified during the measurement period of a business combination be recognized in the reporting period in which the adjustment amounts are determined. Furthermore, the income statement effects of such adjustments, if any, must be calculated as if the accounting had been completed at the acquisition date. The portion of the amount recorded in current-period earnings that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. Under previous guidance, adjustments to provisional amounts identified during the measurement period are to be recognized retrospectively. ASU 2015-16 will be effective for the Company on January 1, 2016 and is not expected to have a significant impact on its financial statements.

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Note 4 - Mortgage Banking Derivative (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Note 4 - Mortgage Banking Derivative (Details) [Line Items]
Derivative, Notional Amount	$ 53,000	$ 30,700	$ 53,000	$ 30,700
Derivative Asset	3,445		3,445
Derivative Liability	245		245		$ 250
Gain on Derivative Instruments, Pretax				47
Other Assets [Member]
Note 4 - Mortgage Banking Derivative (Details) [Line Items]
Derivative Asset	197	34	197	34
Other Liabilities [Member]
Note 4 - Mortgage Banking Derivative (Details) [Line Items]
Derivative Liability	245	18	245	18
Other Noninterest Income [Member]
Note 4 - Mortgage Banking Derivative (Details) [Line Items]
Gain on Derivative Instruments, Pretax	9
Loss on Derivative Instruments, Pretax		194	63
Other Noninterest Income [Member] | Designated as Hedging Instrument [Member]
Note 4 - Mortgage Banking Derivative (Details) [Line Items]
Gain on Derivative Instruments, Pretax		$ 140
Loss on Derivative Instruments, Pretax	$ 327		$ 9	$ 18

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Note 5 - Loans and Allowance for Credit Losses (Tables)

9 Months Ended

Sep. 30, 2015

Receivables [Abstract]

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

	September 30, 2015						December 31, 2014						September 30, 2014
(dollars in thousands)	Amount			%			Amount			%			Amount			%
Commercial	$	1,007,659			21	%	$	916,226			21	%	$	798,489			23	%
Income producing - commercial real estate		2,022,950			42	%		1,703,172			40	%		1,382,839			41	%
Owner occupied - commercial real estate		489,657			10	%		461,581			11	%		337,422			10	%
Real estate mortgage - residential		147,720			3	%		148,018			3	%		126,263			4	%
Construction - commercial and residential		927,265			20	%		793,432			18	%		634,736			18	%
Construction - C&I (owner occupied)		60,487			1	%		58,032			1	%		41,846			1	%
Home equity		115,346			3	%		122,536			3	%		107,291			3	%
Other consumer		5,881			-			109,402			3	%		3,662			-
Total loans		4,776,965			100	%		4,312,399			100	%		3,432,548			100	%
Less: Allowance for Credit Losses		(50,320	)					(46,075	)					(44,954	)
Net loans	$	4,726,645					$	4,266,324					$	3,387,594

Allowance for Credit Losses on Financing Receivables [Table Text Block]

				Income Producing			Owner Occupied			Real Estate			Construction Commercial
				Commercial			Commercial			Mortgage			and			Home			Other
(dollars in thousands)	Commercial			Real Estate			Real Estate			Residential			Residential			Equity			Consumer			Total
Three months ended September 30, 2015
Allowance for credit losses:
Balance at beginning of period	$	12,911		$	12,411		$	3,113		$	1,082		$	17,633		$	1,496		$	275		$	48,921
Loans charged-off		(1,388	)		(254	)		-			-			-			(225	)		(95	)		(1,962	)
Recoveries of loans previously charged-off		60			8			-			2			10			1			18			99
Net loans charged-off		(1,328	)		(246	)		-			2			10			(224	)		(77	)		(1,863	)
Provision for credit losses		57			1,550			(13	)		(18	)		1,281			334			71			3,262
Ending balance	$	11,640		$	13,715		$	3,100		$	1,066		$	18,924		$	1,606		$	269		$	50,320
Nine months ended September 30, 2015
Allowance for credit losses:
Balance at beginning of period	$	13,222		$	11,442		$	2,954		$	1,259		$	15,625		$	1,469		$	104		$	46,075
Loans charged-off		(4,693	)		(651	)		-			-			-			(644	)		(182	)		(6,170	)
Recoveries of loans previously charged-off		135			26			2			5			114			5			85			372
Net loans charged-off		(4,558	)		(625	)		2			5			114			(639	)		(97	)		(5,798	)
Provision for credit losses		2,976			2,898			144			(198	)		3,185			776			262			10,043
Ending balance	$	11,640		$	13,715		$	3,100		$	1,066		$	18,924		$	1,606		$	269		$	50,320
As of September 30, 2015
Allowance for credit losses:
Individually evaluated for impairment	$	2,312		$	827		$	400		$	-		$	350		$	338		$	-		$	4,227
Collectively evaluated for impairment		9,328			12,888			2,700			1,066			18,574			1,268			269			46,093
Ending balance	$	11,640		$	13,715		$	3,100		$	1,066		$	18,924		$	1,606		$	269		$	50,320
Three months ended September 30, 2014
Allowance for credit losses:
Balance at beginning of period	$	11,413		$	10,745		$	3,273		$	958		$	15,487		$	1,331		$	345		$	43,552
Loans charged-off		(317	)		(22	)		-			(48	)		(620	)		(230	)		-			(1,237	)
Recoveries of loans previously charged-off		519			-			-			-			6			2			1			528
Net loans charged-off		202			(22	)		-			(48	)		(614	)		(228	)		1			(709	)
Provision for credit losses		1,558			478			42			70			(237	)		259			(59	)		2,111
Ending balance	$	13,173		$	11,201		$	3,315		$	980		$	14,636		$	1,362		$	287		$	44,954
Nine months ended September 30, 2014
Allowance for credit losses:
Balance at beginning of period	$	9,780		$	10,359		$	3,899		$	944		$	13,934		$	1,871		$	134		$	40,921
Loans charged-off		(1,968	)		(22	)		(35	)		(138	)		(1,426	)		(379	)		(84	)		(4,052	)
Recoveries of loans previously charged-off		802			4			7			-			77			8			8			906
Net loans charged-off		(1,166	)		(18	)		(28	)		(138	)		(1,349	)		(371	)		(76	)		(3,146	)
Provision for credit losses		4,559			860			(556	)		174			2,051			(138	)		229			7,179
Ending balance	$	13,173		$	11,201		$	3,315		$	980		$	14,636		$	1,362		$	287		$	44,954
As of September 30, 2014
Allowance for credit losses:
Individually evaluated for impairment	$	4,409		$	578		$	1,330		$	-		$	1,478		$	218		$	-		$	8,013
Collectively evaluated for impairment		8,764			10,623			1,985			980			13,158			1,144			287			36,941
Ending balance	$	13,173		$	11,201		$	3,315		$	980		$	14,636		$	1,362		$	287		$	44,954

Schedule of Recorded Investment in Loans [Table Text Block]

			Income Producing		Owner occupied		Real Estate		Construction Commercial
			Commercial		Commercial		Mortgage		and		Home		Other
(dollars in thousands)	Commercial		Real Estate		Real Estate		Residential		Residential		Equity		Consumer		Total
September 30, 2015
Recorded investment in loans:
Individually evaluated for impairment	$	12,869	$	6,877	$	1,790	$	-	$	17,644	$	661	$	72	$	39,913
Collectively evaluated for impairment		994,790		2,016,073		487,867		147,720		970,108		114,685		5,809		4,737,052
Ending balance	$	1,007,659	$	2,022,950	$	489,657	$	147,720	$	987,752	$	115,346	$	5,881	$	4,776,965
December 31, 2014
Recorded investment in loans:
Individually evaluated for impairment	$	17,612	$	5,109	$	6,891	$	-	$	14,241	$	1,398	$	59	$	45,310
Collectively evaluated for impairment		898,614		1,698,063		454,690		148,018		837,223		121,138		109,343		4,267,089
Ending balance	$	916,226	$	1,703,172	$	461,581	$	148,018	$	851,464	$	122,536	$	109,402	$	4,312,399
September 30, 2014
Recorded investment in loans:
Individually evaluated for impairment	$	17,785	$	2,710	$	5,054	$	-	$	17,479	$	745	$	-	$	43,773
Collectively evaluated for impairment		780,704		1,380,129		332,368		126,263		659,103		106,546		3,662		3,388,775
Ending balance	$	798,489	$	1,382,839	$	337,422	$	126,263	$	676,582	$	107,291	$	3,662	$	3,432,548

Financing Receivable Credit Quality Indicators [Table Text Block]

			Watch and						Total
(dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Loans
September 30, 2015
Commercial	$	977,165	$	17,625	$	12,869	$	-	$	1,007,659
Income producing - commercial real estate		1,999,509		16,564		6,877		-		2,022,950
Owner occupied - commercial real estate		479,843		8,024		1,790		-		489,657
Real estate mortgage – residential		146,992		728		-		-		147,720
Construction - commercial and residential		964,854		5,254		17,644		-		987,752
Home equity		112,978		1,707		661		-		115,346
Other consumer		5,804		5		72		-		5,881
Total	$	4,687,145	$	49,907	$	39,913	$	-	$	4,776,965
December 31, 2014
Commercial	$	875,102	$	23,512	$	17,612	$	-	$	916,226
Income producing - commercial real estate		1,679,101		18,962		5,109		-		1,703,172
Owner occupied - commercial real estate		445,013		9,677		6,891		-		461,581
Real estate mortgage – residential		147,262		756		-		-		148,018
Construction - commercial and residential		827,503		9,720		14,241		-		851,464
Home equity		119,420		1,718		1,398		-		122,536
Other consumer		109,343		-		59		-		109,402
Total	$	4,202,744	$	64,345	$	45,310	$	-	$	4,312,399
September 30, 2014
Commercial	$	761,502	$	19,202	$	17,785	$	-	$	798,489
Investment - commercial real estate		1,362,060		18,069		2,710		-		1,382,839
Owner occupied - commercial real estate		320,960		11,408		5,054		-		337,422
Real estate mortgage – residential		125,363		900		-		-		126,263
Construction - commercial and residential		650,679		8,424		17,479		-		676,582
Home equity		104,601		1,945		745		-		107,291
Other consumer		3,662		-		-		-		3,662
Total	$	3,328,827	$	59,948	$	43,773	$	-	$	3,432,548

Schedule of Financing Receivables, Non Accrual Status [Table Text Block]

(dollars in thousands)	September 30, 2015		December 31, 2014		September 30, 2014
Commercial	$	4,828	$	12,975	$	15,431
Income producing - commercial real estate		6,721		2,645		2,553
Owner occupied - commercial real estate		1,281		1,324		3,502
Real estate mortgage - residential		333		346		350
Construction - commercial and residential		571		3,697		6,919
Home equity		661		1,398		588
Other consumer		72		58		-
Total nonaccrual loans (1)(2)	$	14,467	$	22,443	$	29,343

Past Due Financing Receivables [Table Text Block]

	Loans		Loans		Loans						Total Recorded
	30-59 Days		60-89 Days		90 Days or		Total Past		Current		Investment in
(dollars in thousands)	Past Due		Past Due		More Past Due		Due Loans		Loans		Loans
September 30, 2015
Commercial	$	731	$	2,537	$	4,828	$	8,096	$	999,563	$	1,007,659
Income producing - commercial real estate		-		5,058		6,721		11,779		2,011,171		2,022,950
Owner occupied - commercial real estate		319		-		1,281		1,600		488,057		489,657
Real estate mortgage – residential		-		-		333		333		147,387		147,720
Construction - commercial and residential		157		5,037		571		5,765		981,987		987,752
Home equity		173		641		661		1,475		113,871		115,346
Other consumer		54		8		72		134		5,747		5,881
Total	$	1,434	$	13,281	$	14,467	$	29,182	$	4,747,783	$	4,776,965
December 31, 2014
Commercial	$	1,505	$	4,032	$	12,975	$	18,512	$	897,714	$	916,226
Income producing - commercial real estate		1,825		5,376		2,645		9,846		1,693,326		1,703,172
Owner occupied - commercial real estate		1,089		214		1,324		2,627		458,954		461,581
Real estate mortgage – residential		-		-		346		346		147,672		148,018
Construction - commercial and residential		-		-		3,697		3,697		847,767		851,464
Home equity		-		1,365		1,398		2,763		119,773		122,536
Other consumer		284		81		58		423		108,979		109,402
Total	$	4,703	$	11,068	$	22,443	$	38,214	$	4,274,185	$	4,312,399

Impaired Financing Receivables [Table Text Block]

	Unpaid Contractual		Recorded Investment		Recorded Investment		Total				Average Recorded Investment				Interest Income Recognized
	Principal		With No		With		Recorded		Related		Quarter		Year		Quarter			Year
(dollars in thousands)	Balance		Allowance		Allowance		Investment		Allowance		To Date		To Date		To Date			To Date
September 30, 2015
Commercial	$	9,444	$	2,663	$	3,337	$	6,000	$	2,312	$	7,978	$	10,047	$	39		$	48
Income producing - commercial real estate		15,925		9,215		6,017		15,232		827		12,542		11,388		188			259
Owner occupied - commercial real estate		1,790		973		817		1,790		400		1,811		1,844		-			-
Real estate mortgage – residential		333		333		-		333		-		336		340		-			-
Construction - commercial and residential		5,608		5,037		571		5,608		350		5,625		7,176		100			298
Home equity		661		116		545		661		338		774		959		-			-
Other consumer		72		72		-		72		-		45		40		1			2
Total	$	33,833	$	18,409	$	11,287	$	29,696	$	4,227	$	29,111	$	31,794	$	328		$	607
December 31, 2014
Commercial	$	14,075	$	1,603	$	11,372	$	12,975	$	5,334	$	14,203	$	13,681	$	20		$	251
Income producing - commercial real estate		10,869		8,952		1,542		10,494		751		8,202		7,021		196			203
Owner occupied - commercial real estate		1,889		1,038		851		1,889		577		2,696		3,986		-			6
Real estate mortgage – residential		346		346		-		346		-		348		529		-			-
Construction - commercial and residential		8,785		8,176		609		8,785		927		10,113		10,967		436			1,147
Home equity		1,398		339		1,059		1,398		430		993		747		32			36
Other consumer		58		-		58		58		45		29		30		7			7
Total	$	37,420	$	20,454	$	15,491	$	35,945	$	8,064	$	36,584	$	36,961	$	691		$	1,650
September 30, 2014
Commercial	$	16,531	$	950	$	14,481	$	15,431	$	4,409	$	12,051	$	12,132	$	228		$	231
Investment - commercial real estate		6,284		4,839		1,070		5,909		578		5,975		5,873		(71	)		7
Owner occupied - commercial		3,502		391		3,111		3,502		1,330		3,366		4,877		6			6
Real estate mortgage – residential		350		350		-		350		-		500		665		-			-
Construction - commercial and residential		11,931		9,785		1,655		11,440		1,478		11,429		12,004		159			711
Home equity		588		125		463		588		218		496		553		4			4
Other consumer		-		-		-		-		-		-		33		-			-
Total	$	39,186	$	16,440	$	20,780	$	37,220	$	8,013	$	33,817	$	36,137	$	326		$	959

Troubled Debt Restructurings on Financing Receivables [Table Text Block]

	Number of		TDRs Performing		TDRs Not Performing		Total
(dollars in thousands)	Contracts		to Modified Terms		to Modified Terms		TDRs
September 30, 2015
Commercial		4	$	1,172	$	215	$	1,387
Income producing - commercial real estate		4		8,512		-		8,512
Owner occupied - commercial real estate		1		509		-		509
Construction - commercial and residential		1		5,037		-		5,037
Total		10	$	15,230	$	215	$	15,445
December 31, 2014
Commercial		1	$	-	$	227	$	227
Income producing - commercial real estate		3		7,849		-		7,849
Owner occupied - commercial real estate		1		565		-		565
Construction - commercial and residential		1		5,088		-		5,088
Total		6	$	13,502	$	227	$	13,729

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Consolidated Statements of Changes in Shareholders' Equity (Unaudited) (Parentheticals) $ in Thousands	9 Months Ended
	Sep. 30, 2015 USD ($)
Issuance costs	$ 5,302
Common Stock [Member]
Issuance costs	5,302
Additional Paid-in Capital [Member]
Issuance costs	$ 5,302

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Consolidated Balance Sheets (Unaudited) (Parentheticals) - $ / shares	Sep. 30, 2015	Dec. 31, 2014	Sep. 30, 2014
Preferred stock, par value (in Dollars per share)	$ 0.01	$ 0.01	$ 0.01
Preferred stock, shares authorized	1,000,000	1,000,000	1,000,000
Common stock, par value (in Dollars per share)	$ 0.01	$ 0.01	$ 0.01
Common stock, shares authorized	100,000,000	100,000,000	100,000,000
Common stock, shares issued	33,405,510	30,139,396	26,022,307
Common stock, shares outstanding	33,405,510	30,139,396	26,022,307
Series B Preferred Stock [Member]
Preferred stock, per share liquidation preference (in Dollars per share)	$ 1,000	$ 1,000	$ 1,000
Preferred stock, shares issued	56,600	56,600	56,600
Preferred stock, shares outstanding	56,600	56,600	56,600
Series C Preferred Stock [Member]
Preferred stock, per share liquidation preference (in Dollars per share)	$ 1,000	$ 1,000	$ 1,000
Preferred stock, shares issued	15,300	15,300	0
Preferred stock, shares outstanding	15,300	15,300	0

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Note 9 - Stock-Based Compensation

9 Months Ended

Sep. 30, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Note 9. Stock-Based Compensation

The Company maintains the 1998 Stock Option Plan (“1998 Plan”), the 2006 Stock Plan (“2006 Plan”) and the 2011 Employee Stock Purchase Plan (“2011 ESPP”).

In connection with the acquisition of Fidelity & Trust Financial Corporation (“Fidelity”), the Company assumed the Fidelity 2004 Long Term Incentive Plan and the 2005 Long Term Incentive Plan (the “Fidelity Plans”).

In connection with the acquisition of Virginia Heritage, the Company assumed the Virginia Heritage 2006 Stock Option Plan and the 2010 Long Term Incentive Plan (the “Virginia Heritage Plans”).

No additional options may be granted under the 1998 Plan, the Fidelity Plans or the Virginia Heritage Plans.

The 2006 Plan provides for the issuance of awards of incentive stock options, non-qualifying stock options, restricted stock and stock appreciation rights to selected key employees and members of the Board. As amended, 1,996,500 shares of common stock are subject to issuance pursuant to awards under the 2006 Plan. Stock options and restricted stock awards are made with an exercise price equal to the average of the high and low price of the Company’s shares at the date of grant.

For awards that are service based, compensation expense is being recognized over the service (vesting) period based on fair value, which for stock option grants is computed using the Black-Scholes model, and for restricted stock awards is based on the average of the high and low stock price of the Company’s shares on the date of grant. For awards that are performance-based, compensation expense is recorded based on the probability of achievement of the goals underlying the grant. No performance-based awards are outstanding at September 30, 2015.

In February 2015, the Company awarded 77,370 shares of restricted stock to senior officers, directors and employees. The shares vest in three substantially equal installments beginning on the first anniversary of the date of grant.

In March 2015, the Company awarded 700 shares of restricted stock to an employee. The shares vest in five substantially equal installments beginning on the first anniversary of the date of grant.

Below is a summary of changes in shares pursuant to our equity compensation plans for the nine months ended September 30, 2015 and 2014. The information excludes restricted stock units and awards.

	Nine Months Ended September 30,
	2015					2014
	Shares			Weighted-Average Exercise Price		Shares			Weighted-Average Exercise Price
Beginning balance		759,683		$	11.36		503,834		$	10.41
Issued		-			-		21,000			32.77
Exercised		(377,357	)		12.73		(64,926	)		16.78
Forfeited		(12,380	)		29.58		(110	)		5.76
Expired		(8,476	)		17.32		(1,225	)		9.00
Ending balance		361,470		$	9.16		458,573		$	10.54

The following summarizes information about stock options outstanding at September 30, 2015. The information excludes restricted stock units and awards.

								Weighted-Average
Outstanding:				Stock Options		Weighted-Average		Remaining
Range of Exercise Prices				Outstanding		Exercise Price		Contractual Life
$	5.76	$	9.21		221,669	$	5.76		3.28
$	9.22	$	15.47		108,611		12.40		2.15
$	15.48	$	22.66		18,794		19.28		7.75
$	22.67	$	32.36		12,396		26.18		2.19
					361,470	$	9.16		3.13

Exercisable:				Stock Options		Weighted-Average
Range of Exercise Prices				Exercisable		Exercise Price
$	5.76	$	9.21		164,759	$	5.76
$	9.22	$	15.47		101,941		12.51
$	15.48	$	22.66		15,164		19.60
$	22.67	$	32.36		10,896		26.36
					292,760	$	9.60

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option pricing model with the assumptions as shown in the table below used for grants during the years ended December 31, 2014 and 2013. There were no grants of stock options during the nine months ended September 30, 2015.

	Nine Months Ended			Years Ended December 31,
	September 30, 2015			2014			2013
Expected volatility		N/A			34.25	%		34.12	%
Weighted-Average volatility		N/A			34.25	%		34.12	%
Expected dividends		0.0	%		0.0	%		0.0	%
Expected term (in years)		N/A			9.4			7.5
Risk-free rate		N/A			2.26	%		1.31	%
Weighted-average fair value (grant date)		N/A		$	13.49		$	7.83

The expected lives are based on the “simplified” method allowed by ASC Topic 718 “Compensation,” whereby the expected term is equal to the midpoint between the vesting period and the contractual term of the award.

The total intrinsic value of outstanding stock options and outstanding exercisable stock options was $10.6 million at September 30, 2015. The total intrinsic value of stock options exercised during the nine months ended September 30, 2015 and 2014 was $8.5 million and $1.1 million, respectively. The total fair value of stock options vested was $87 thousand and $125 thousand for the nine months ended September 30, 2015 and 2014, respectively. Unrecognized stock-based compensation expense related to stock options totaled $69 thousand at September 30, 2015. At such date, the weighted-average period over which this unrecognized stock option expense is expected to be recognized was 2.68 years.

The Company has unvested restricted stock award grants of 387,753 shares under the 2006 Plan at September 30, 2015. Unrecognized stock based compensation expense related to restricted stock awards totaled $6.6 million at September 30, 2015. At such date, the weighted-average period over which this unrecognized expense was expected to be recognized was 1.66 years. The following table summarizes the unvested restricted stock awards at September 30, 2015 and 2014.

	Nine Months Ended September 30,
	2015					2014
	Shares			Weighted- Average Grant Date Fair Value		Shares			Weighted- Average Grant Date Fair Value
Unvested at beginning		509,336		$	21.58		614,580		$	18.71
Issued		78,070			36.06		78,947			33.24
Forfeited		(4,150	)		31.83		(832	)		23.59
Vested		(195,503	)		20.74		(184,921	)		17.54
Unvested at end		387,753		$	24.81		507,774		$	21.33

Approved by shareholders in May 2011, the 2011 ESPP reserved 550,000 shares of common stock (as adjusted for stock dividends) for issuance to employees. Whole shares are sold to participants in the plan at 85% of the lower of the stock price at the beginning or end of each quarterly offering period. The 2011 ESPP is available to all eligible employees who have completed at least one year of continuous employment, work at least 20 hours per week and at least five months a year. Participants may contribute a minimum of $10 per pay period to a maximum of $6,250 per offering period or $25,000 annually (not to exceed more than 10% of compensation per pay period). At September 30, 2015, the 2011 ESPP had 437,727 shares remaining for issuance.

Included in salaries and employee benefits the Company recognized $3.7 million and $2.9 million in stock-based compensation expense for the nine months ended September 30, 2015 and 2014, respectively. Stock-based compensation expense is recognized ratably over the requisite service period for all awards.

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Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Oct. 30, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	EAGLE BANCORP INC
Trading Symbol	egbn
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		33,466,992
Amendment Flag	false
Entity Central Index Key	0001050441
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Large Accelerated Filer
Entity Well-known Seasoned Issuer	Yes
Document Period End Date	Sep. 30, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q3

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Note 10 - Other Comprehensive Income

9 Months Ended

Sep. 30, 2015

Disclosure Text Block [Abstract]

Comprehensive Income (Loss) Note [Text Block]

Note 10.  Other Comprehensive Income

The following table presents the components of other comprehensive income (loss) for the three and nine months ended September 30, 2015 and 2014.

(dollars in thousands)	Before Tax			Tax Effect			Net of Tax
Three Months Ended September 30, 2015
Net unrealized gain on securities available-for-sale	$	3,512		$	1,405		$	2,107
Net unrealized loss on derivatives		(6,627	)		(2,651	)		(3,976	)
Less: Reclassification adjustment for net gains included in net income		(60	)		(24	)		(36	)
Other Comprehensive Loss	$	(3,175	)	$	(1,270	)	$	(1,905	)
Three Months Ended September 30, 2014
Net unrealized loss on securities available-for-sale	$	(543	)	$	(217	)	$	(326	)
Less: Reclassification adjustment for net gains included in net income		-			-			-
Other Comprehensive Loss	$	(543	)	$	(217	)	$	(326	)
Nine Months Ended September 30, 2015
Net unrealized gain on securities available-for-sale	$	3,325		$	1,330		$	1,995
Net unrealized loss on derivatives		(3,445	)		(1,378	)		(2,067	)
Less: Reclassification adjustment for net gains included in net income		(2,224	)		(890	)		(1,334	)
Other Comprehensive Loss	$	(2,344	)	$	(938	)	$	(1,406	)
Nine Months Ended September 30, 2014
Net unrealized gain on securities available-for-sale	$	8,062		$	3,225		$	4,837
Less: Reclassification adjustment for net gains included in net income		(10	)		(4	)		(6	)
Other Comprehensive Income	$	8,052		$	3,221		$	4,831

The following table presents the changes in each component of accumulated other comprehensive income (loss), net of tax, for the three and nine months ended September 30, 2015 and 2014.

	Securities						Accumulated Other
(dollars in thousands)	Available For Sale			Derivatives			Comprehensive (Loss) Income
Three Months Ended September 30, 2015
Balance at Beginning of Period	$	3,146		$	-		$	3,146
Other comprehensive income (loss) before reclassifications		2,107			(3,976	)		(1,869	)
Amounts reclassified from accumulated other comprehensive income		(36	)		-			(36	)
Net other comprehensive income (loss) during period		2,071			(3,976	)		(1,905	)
Balance at End of Period	$	5,217		$	(3,976	)	$	1,241
Three Months Ended September 30, 2014
Balance at Beginning of Period	$	1,838		$	-		$	1,838
Other comprehensive loss before reclassifications		(326	)		-			(326	)
Amounts reclassified from accumulated other comprehensive income		-			-			-
Net other comprehensive (loss) during period		(326	)		-			(326	)
Balance at End of Period	$	1,512		$	-		$	1,512
Nine Months Ended September 30, 2015
Balance at Beginning of Period	$	2,647		$	-		$	2,647
Other comprehensive income (loss) before reclassifications		1,995			(2,067	)		(72	)
Amounts reclassified from accumulated other comprehensive income		(1,334	)		-			(1,334	)
Net other comprehensive income (loss) during period		661			(2,067	)		(1,406	)
Balance at End of Period	$	3,308		$	(2,067	)	$	1,241
Nine Months Ended September 30, 2014
Balance at Beginning of Period	$	(3,319	)	$	-		$	(3,319	)
Other comprehensive income before reclassifications		4,837			-			4,837
Amounts reclassified from accumulated other comprehensive income		(6	)		-			(6	)
Net other comprehensive income during period		4,831			-			4,831
Balance at End of Period	$	1,512		$	-		$	1,512

The following table presents the amounts reclassified out of each component of accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2015 and 2014.

	Amount Reclassified from					Affected Line Item in
Details about Accumulated Other	Accumulated Other					the Statement Where
Comprehensive Income Components (dollars in thousands)	Comprehensive (Loss) Income					Net Income is Presented
	Three Months Ended September 30,
	2015			2014
Realized gain on sale of investment securities	$	60		$	-	Gain on sale of investment securities
		(24	)		-	Tax Expense
Total Reclassifications for the Period	$	36		$	-	Net of Tax

	Amount Reclassified from						Affected Line Item in
Details about Accumulated Other	Accumulated Other						the Statement Where
Comprehensive Income Components (dollars in thousands)	Comprehensive (Loss) Income						Net Income is Presented
	Nine Months Ended September 30,
	2015			2014
Realized gain on sale of investment securities	$	2,224		$	10		Gain on sale of investment securities
		(890	)		(4	)	Tax Expense
Total Reclassifications for the Period	$	1,334		$	6		Net of Tax

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Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Interest Income
Interest and fees on loans	$ 61,006	$ 45,502	$ 178,063	$ 128,181
Interest and dividends on investment securities	2,745	2,255	7,189	6,911
Interest on balances with other banks and short-term investments	228	125	604	379
Interest on federal funds sold	2	4	13	11
Total interest income	63,981	47,886	185,869	135,482
Interest Expense
Interest on deposits	3,739	2,189	10,668	6,925
Interest on customer repurchase agreements	33	38	94	107
Interest on short-term borrowings			54
Interest on long-term borrowings	1,124	1,024	3,687	1,788
Total interest expense	4,896	3,251	14,503	8,820
Net Interest Income	59,085	44,635	171,366	126,662
Provision for Credit Losses	3,262	2,111	10,043	7,179
Net Interest Income After Provision For Credit Losses	55,823	42,524	161,323	119,483
Noninterest Income
Service charges on deposits	1,374	1,227	3,990	3,638
Gain on sale of loans	2,483	1,822	9,364	4,686
Gain on sale of investment securities	60		2,224	10
Loss on early extinguishment of debt			(1,130)
Increase in the cash surrender value of bank owned life insurance	395	295	1,191	919
Other income	1,787	1,417	4,497	3,782
Total noninterest income	6,099	4,761	20,136	13,035
Noninterest Expense
Salaries and employee benefits	15,383	14,942	45,772	41,565
Premises and equipment expenses	3,974	3,374	12,056	9,570
Marketing and advertising	762	544	2,182	1,421
Data processing	1,976	1,572	5,598	4,592
Legal, accounting and professional fees	1,063	740	2,915	2,513
FDIC insurance	794	573	2,348	1,680
Merger expenses	2	885	139	1,460
Other expenses	3,451	2,513	11,066	7,575
Total noninterest expense	27,405	25,143	82,076	70,376
Income Before Income Tax Expense	34,517	22,142	99,383	62,142
Income Tax Expense	13,054	8,054	37,564	22,611
Net Income	21,463	14,088	61,819	39,531
Preferred Stock Dividends	180	151	539	434
Net Income Available to Common Shareholders	$ 21,283	$ 13,937	$ 61,280	$ 39,097
Earnings Per Common Share
Basic (in Dollars per share)	$ 0.64	$ 0.54	$ 1.88	$ 1.50
Diluted (in Dollars per share)	$ 0.63	$ 0.52	$ 1.84	$ 1.47

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Note 4 - Mortgage Banking Derivative

9 Months Ended

Sep. 30, 2015

Mortgage Banking Derivative [Member]

Note 4 - Mortgage Banking Derivative [Line Items]

Derivative Instruments and Hedging Activities Disclosure [Text Block]

Note 4. Mortgage Banking Derivative

As part of its mortgage banking activities, the Bank enters into interest rate lock commitments, which are commitments to originate loans where the interest rate on the loan is determined prior to funding and the customers have locked into that interest rate. The Bank then commits the specific loan for sale with an investor if and only if settlement occurs (“best efforts”) or alternatively commits to deliver the locked loan in a binding (“mandatory”) delivery program with an investor. Certain loans under interest rate lock commitments are covered under forward sales contracts of mortgage backed securities (“MBS”) which provides a hedge against interest rate changes between the time the individual loan interest rate is locked with the borrower and the time the loan is sold to the investor. Forward sales contracts of MBS are recorded at fair value with changes in fair value recorded in noninterest income. Interest rate lock commitments and commitments to deliver loans to investors are considered derivatives. The market value of interest rate lock commitments and best efforts contracts are not readily ascertainable with precision because they are not actively traded in stand-alone markets. The Bank determines the fair value of interest rate lock commitments and delivery contracts by measuring the fair value of the underlying asset, which is impacted by current interest rates, taking into consideration the probability that the interest rate lock commitments will close or will be funded.

Certain additional risks arise from forward delivery contracts in that the counterparties to the contracts may not be able to meet the terms of the contracts. The Bank does not expect any counterparty to any MBS to fail to meet its obligation. Additional risks inherent in mandatory delivery programs include the risk that, if the Bank does not close the loans subject to interest rate risk lock commitments, it may have a mismatch in its hedged position which could negatively impact earnings.

The fair value of the derivatives is recorded as a freestanding asset or liability with the change in value being recognized in current earnings during the period of change.

At September 30, 2015 the Bank had derivative financial instruments with a notional value of $53.0 million related to its forward contracts. The net fair value of these derivative instruments at September 30, 2015 was $197 thousand, which is included in other assets and $245 thousand included in other liabilities. At September 30, 2014 the Bank had derivative financial instruments with a notional value of $30.7 million related to its forward contracts. The net fair value of these derivative instruments at September 30, 2014 were $34 thousand included in other assets and $18 thousand included in other liabilities.

Included in other noninterest income for the three and nine months ended September 30, 2015 was a net gain of $9 thousand and a net loss of $63 thousand, relating to derivative instruments. The amount included in other noninterest income for the three and nine months ended September 30, 2015 pertaining to its hedging activities was a loss of $327 thousand and $9 thousand, respectively. Included for the three and nine months ended September 30, 2014 there was a net loss of $194 thousand and a net gain of $47 thousand relating to derivative instruments. The amount included in other noninterest income for the three and nine months ended September 30, 2014 pertaining to its hedging activities was a net realized gain of $140 thousand and a net realized loss of $18 thousand.

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Note 3 - Investment Securities Available-for-Sale

9 Months Ended

Sep. 30, 2015

Investments, Debt and Equity Securities [Abstract]

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

Note 3. Investment Securities Available-for-Sale

Amortized cost and estimated fair value of securities available-for-sale are summarized as follows:

			Gross		Gross		Estimated
September 30, 2015	Amortized		Unrealized		Unrealized		Fair
(dollars in thousands)	Cost		Gains		Losses		Value
U. S. Government agency securities	$	68,289	$	879	$	90	$	69,078
Residential mortgage backed securities		320,978		2,172		1,130		322,020
Municipal bonds		114,137		3,824		95		117,866
Corporate bonds		15,096		-		78		15,018
Other equity investments		307		37		-		344
	$	518,807	$	6,912	$	1,393	$	524,326

			Gross		Gross		Estimated
December 31, 2014	Amortized		Unrealized		Unrealized		Fair
(dollars in thousands)	Cost		Gains		Losses		Value
U. S. Government agency securities	$	29,434	$	500	$	40	$	29,894
Residential mortgage backed securities		241,120		1,716		2,516		240,320
Municipal bonds		106,983		4,850		121		111,712
Other equity investments		396		21		-		417
	$	377,933	$	7,087	$	2,677	$	382,343

In addition, at September 30, 2015, the Company held $16.9 million in equity securities in a combination of Federal Reserve Bank (“FRB”) and Federal Home Loan Bank (“FHLB”) stocks, which are required to be held for regulatory purposes, and which are not marketable.

Gross unrealized losses and fair value by length of time that the individual available-for-sale securities have been in a continuous unrealized loss position are as follows:

	Less than				12 Months
	12 Months				or Greater				Total
	Estimated				Estimated				Estimated
September 30, 2015	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(dollars in thousands)	Value		Losses		Value		Losses		Value		Losses
U. S. Government agency securities	$	13,966	$	90	$	-	$	-	$	13,966	$	90
Residential mortgage backed securities		58,925		182		61,610		948		120,535		1,130
Municipal bonds		12,073		95		-		-		12,073		95
Corporate bonds		15,018		78		-		-		15,018		78
	$	99,982	$	445	$	61,610	$	948	$	161,592	$	1,393

	Less than				12 Months
	12 Months				or Greater				Total
	Estimated				Estimated				Estimated
December 31, 2014	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(dollars in thousands)	Value		Losses		Value		Losses		Value		Losses
U. S. Government agency securities	$	2,001	$	7	$	1,750	$	33	$	3,751	$	40
Residential mortgage backed securities		49,644		221		86,028		2,295		135,672		2,516
Municipal bonds		4,974		14		10,915		107		15,889		121
	$	56,619	$	242	$	98,693	$	2,435	$	155,312	$	2,677

The unrealized losses that exist are generally the result of changes in market interest rates and interest spread relationships since original purchases. The weighted average duration of debt securities, which comprise 99.9% of total investment securities, is relatively short at 3.7 years. If quoted prices are not available, fair value is measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss assumptions. The Company does not believe that the investment securities that were in an unrealized loss position as of September 30, 2015 represent an other-than-temporary impairment. The Company does not intend to sell the investments and it is more likely than not that the Company will not have to sell the securities before recovery of its amortized cost basis, which may be maturity. 

The amortized cost and estimated fair value of investments available-for-sale by contractual maturity are shown in the table 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.

	September 30, 2015				December 31, 2014
	Amortized		Estimated		Amortized		Estimated
(dollars in thousands)	Cost		Fair Value		Cost		Fair Value
U. S. Government agency securities maturing:
One year or less	$	44,981	$	45,138	$	2,998	$	3,051
After one year through five years		18,812		19,259		19,947		20,276
Five years through ten years		4,496		4,681		6,489		6,567
Residential mortgage backed securities		320,978		322,020		241,120		240,320
Municipal bonds maturing:
One year or less		4,978		5,024		2,410		2,438
After one year through five years		40,040		42,600		47,038		49,607
Five years through ten years		66,539		67,456		54,983		56,927
After ten years		2,580		2,786		2,552		2,740
Corporate bonds
After one year through five years		15,096		15,018		-		-
Other equity investments		307		344		396		417
	$	518,807	$	524,326	$	377,933	$	382,343

For the nine months ended September 30, 2015, gross realized gains on sales of investments securities were $2.5 million and gross realized losses on sales of investment securities were $294 thousand. For the nine months ended September 30, 2014, gross realized gains on sales of investment securities were $116 thousand and gross realized losses on sales of investment securities were $106 thousand.

Proceeds from sales and calls of investment securities for the nine months ended September 30, 2015 were $65.8 million, and in 2014 were $17.5 million.

The carrying value of securities pledged as collateral for certain government deposits, securities sold under agreements to repurchase, and certain lines of credit with correspondent banks at September 30, 2015 was $450.5 million, which is well in excess of required amounts in order to operationally provide significant reserve amounts for new business. As of September 30, 2015 and December 31, 2014, there were no holdings of securities of any one issuer, other than the U.S. Government and U.S. Government agency securities, which exceeded ten percent of shareholders’ equity.

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Note 3 - Investment Securities Available-for-Sale (Tables)

9 Months Ended

Sep. 30, 2015

Investments, Debt and Equity Securities [Abstract]

Schedule of Available-for-sale Securities Reconciliation [Table Text Block]

			Gross		Gross		Estimated
September 30, 2015	Amortized		Unrealized		Unrealized		Fair
(dollars in thousands)	Cost		Gains		Losses		Value
U. S. Government agency securities	$	68,289	$	879	$	90	$	69,078
Residential mortgage backed securities		320,978		2,172		1,130		322,020
Municipal bonds		114,137		3,824		95		117,866
Corporate bonds		15,096		-		78		15,018
Other equity investments		307		37		-		344
	$	518,807	$	6,912	$	1,393	$	524,326

			Gross		Gross		Estimated
December 31, 2014	Amortized		Unrealized		Unrealized		Fair
(dollars in thousands)	Cost		Gains		Losses		Value
U. S. Government agency securities	$	29,434	$	500	$	40	$	29,894
Residential mortgage backed securities		241,120		1,716		2,516		240,320
Municipal bonds		106,983		4,850		121		111,712
Other equity investments		396		21		-		417
	$	377,933	$	7,087	$	2,677	$	382,343

Schedule of Unrealized Loss on Investments [Table Text Block]

	Less than				12 Months
	12 Months				or Greater				Total
	Estimated				Estimated				Estimated
September 30, 2015	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(dollars in thousands)	Value		Losses		Value		Losses		Value		Losses
U. S. Government agency securities	$	13,966	$	90	$	-	$	-	$	13,966	$	90
Residential mortgage backed securities		58,925		182		61,610		948		120,535		1,130
Municipal bonds		12,073		95		-		-		12,073		95
Corporate bonds		15,018		78		-		-		15,018		78
	$	99,982	$	445	$	61,610	$	948	$	161,592	$	1,393

	Less than				12 Months
	12 Months				or Greater				Total
	Estimated				Estimated				Estimated
December 31, 2014	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(dollars in thousands)	Value		Losses		Value		Losses		Value		Losses
U. S. Government agency securities	$	2,001	$	7	$	1,750	$	33	$	3,751	$	40
Residential mortgage backed securities		49,644		221		86,028		2,295		135,672		2,516
Municipal bonds		4,974		14		10,915		107		15,889		121
	$	56,619	$	242	$	98,693	$	2,435	$	155,312	$	2,677

Available-for-sale Securities [Table Text Block]

	September 30, 2015				December 31, 2014
	Amortized		Estimated		Amortized		Estimated
(dollars in thousands)	Cost		Fair Value		Cost		Fair Value
U. S. Government agency securities maturing:
One year or less	$	44,981	$	45,138	$	2,998	$	3,051
After one year through five years		18,812		19,259		19,947		20,276
Five years through ten years		4,496		4,681		6,489		6,567
Residential mortgage backed securities		320,978		322,020		241,120		240,320
Municipal bonds maturing:
One year or less		4,978		5,024		2,410		2,438
After one year through five years		40,040		42,600		47,038		49,607
Five years through ten years		66,539		67,456		54,983		56,927
After ten years		2,580		2,786		2,552		2,740
Corporate bonds
After one year through five years		15,096		15,018		-		-
Other equity investments		307		344		396		417
	$	518,807	$	524,326	$	377,933	$	382,343

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Note 11 - Fair Value Measurements

9 Months Ended

Sep. 30, 2015

Disclosure Text Block [Abstract]

Fair Value, Measurement Inputs, Disclosure [Text Block]

Note 11.  Fair Value Measurements

The fair value of an asset or liability is the price that would be received to sell that asset or paid to transfer that liability in an orderly transaction occurring in the principal market (or most advantageous market in the absence of a principal market) for such asset or liability. In estimating fair value, the Company utilizes valuation techniques that are consistent with the market approach, the income approach and/or the cost approach. Such valuation techniques are consistently applied. Inputs to valuation techniques include the assumptions that market participants would use in pricing an asset or liability. ASC Topic 820, “Fair Value Measurements and Disclosures,” establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:

Level 1 Quoted prices in active exchange markets for identical assets or liabilities; also includes certain U.S. Treasury and other U.S. Government and agency securities actively traded in over-the-counter markets.

Level 2 Observable inputs other than Level 1 including quoted prices for similar assets or liabilities, quoted prices in less active markets, or other observable inputs that can be corroborated by observable market data; also includes derivative contracts whose value is determined using a pricing model with observable market inputs or can be derived principally from or corroborated by observable market data.  This category generally includes certain U.S. Government and agency securities, corporate debt securities, derivative instruments, and residential mortgage loans held for sale.

Level 3 Unobservable inputs supported by little or no market activity for financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation; also includes observable inputs for single dealer nonbinding quotes not corroborated by observable market data. This category generally includes certain private equity investments, retained interests from securitizations, and certain collateralized debt obligations.

Assets and Liabilities Recorded at Fair Value on a Recurring Basis

The table below presents the recorded amount of assets and liabilities measured at fair value on a recurring basis as of September 30, 2015 and December 31, 2014.

(dollars in thousands)	Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)		Total (Fair Value)
September 30, 2015
Assets:
Investment securities available for sale:
U. S. Government agency securities	$	-	$	69,078	$	-	$	69,078
Residential mortgage backed securities		-		322,020		-		322,020
Municipal bonds		-		117,866		-		117,866
Corporate bonds		-		15,018		-		15,018
Other equity investments		125		-		219		344
Loans held for sale		-		35,713		-		35,713
Mortgage banking derivatives		-		-		197		197
Interest rate swap derivatives		-		-		-		-
Total assets measured at fair value on a recurring basis as of September 30, 2015	$	125	$	559,695	$	416	$	560,236
Liabilities:
Interest rate swap derivatives		-		3,445		-		3,445
Total liabilities measured at fair value on a recurring basis as of September 30, 2015	$	-	$	3,445	$	-	$	3,445

(dollars in thousands)	Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)		Total (Fair Value)
December 31, 2014
Assets:
Investment securities available for sale:
U. S. Government agency securities	$	-	$	29,894	$	-	$	29,894
Residential mortgage backed securities		-		240,320		-		240,320
Municipal bonds		-		111,712		-		111,712
Other equity investments		198		-		219		417
Loans held for sale		-		44,317		-		44,317
Mortgage banking derivatives		-		-		146		146
Total assets measured at fair value on a recurring basis as of December 31, 2014	$	198	$	426,243	$	365	$	426,806
Liabilities:
Interest rate swap derivatives		-		-		-		-
Total liabilities measured at fair value on a recurring basis as of September 30, 2014	$	-	$	-	$	-	$	-

 Investment Securities Available-for-Sale

Investment securities available-for-sale are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted prices, if available. If quoted prices are not available, fair value is measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss assumptions. Level 1 securities include those traded on an active exchange such as the New York Stock Exchange, Treasury securities that are traded by dealers or brokers in active over-the-counter markets and money market funds. Level 2 securities include U.S. Government agency debt securities, mortgage backed securities issued by government sponsored entities and municipal bonds. Securities classified as Level 3 include securities in less liquid markets, the carrying amount approximate the fair value.

Loans held for sale: Loans held for sale are carried at the fair value. Fair value is derived from secondary market quotations for similar instruments. Gains and losses on sales of these loans are recorded as a component of noninterest income in the consolidated statements of operations. As such, the Company classifies loans subjected to fair value adjustments as Level 2 valuation.

The following is a reconciliation of activity for assets and liabilities measured at fair value based on Significant Other Unobservable Inputs (Level 3):

	Other Equity		Derivative
(dollars in thousands)	Investments		Assets/(Liabilities)			Total
Assets:
Beginning balance at December 31, 2014	$	219	$	146		$	365
Realized gain (loss) included in earnings - net mortgage banking derivatives		-		51			51
Principal redemption		-		-			-
Ending balance at September 30, 2015	$	219	$	197		$	416
Liabilities:
Beginning balance at December 31, 2014	$	-	$	250		$	250
Realized gain (loss) included in earnings - net mortgage banking derivatives		-		(5	)		(5	)
Principal redemption		-		-			-
Ending balance at September 30, 2015	$	-	$	245		$	245

	Other Equity		Derivative
(dollars in thousands)	Investments		Assets/(Liabilities)		Total
Assets:
Beginning balance at December 31, 2013	$	219	$	-	$	219
Realized gain (loss) included in earnings - net mortgage banking derivatives		-		146		146
Ending balance at December 31, 2014	$	219	$	146	$	365
Liabilities:
Beginning balance at December 31, 2013	$	-	$	-	$	-
Realized gain (loss) included in earnings - net mortgage banking derivatives		-		250		250
Ending balance at December 31, 2014	$	-	$	250	$	250

Securities classified as Level 3 include securities in less liquid markets, the carrying amount approximate the fair value. The securities consist of equity investments in the form of common stock of two local banking companies which are not publicly traded.

The Company relies on a third-party pricing service to value its mortgage banking derivative financial assets and liabilities, which the Company classifies as a Level 3 valuation. The external valuation model to estimate the fair value of its interest rate lock commitments to originate residential mortgage loans held for sale, includes grouping the interest rate lock commitments by interest rate and terms, applying an estimated pull-through rate based on historical experience, and then multiplying by quoted investor prices determined to be reasonably applicable to the loan commitment groups based on interest rate, terms, and rate lock expiration dates of the loan commitment groups. The Company also relies on an external valuation model to estimate the fair value of its forward commitments to sell residential mortgage loans (i.e., an estimate of what the Company would receive or pay to terminate the forward delivery contract based on market prices for similar financial instruments), which includes matching specific terms and maturities of the forward commitments against applicable investor pricing.

Assets and Liabilities Recorded at Fair Value on a Nonrecurring Basis

The Company measures certain assets at fair value on a nonrecurring basis and the following is a general description of the methods used to value such assets.

Impaired loans: The Company considers a loan impaired when it is probable that the Company will be unable to collect all amounts due according to the original contractual terms of the note agreement, including both principal and interest. Management has determined that nonaccrual loans and loans that have had their terms restructured in a troubled debt restructuring meet this impaired loan definition. For individually evaluated impaired loans, the amount of impairment is based upon the present value of expected future cash flows discounted at the loan’s effective interest rate or the estimated fair value of the underlying collateral for collateral-dependent loans, which the Company classifies as a Level 3 valuation.

Other real estate owned: Other real estate owned is initially recorded at the lower of carrying value or fair value. Fair value is based upon independent market prices, appraised values of the collateral or management’s estimation of the value of the collateral, which the Company classifies as a Level 3 valuation. Assets measured at fair value on a nonrecurring basis are included in the table below:

(dollars in thousands)	Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)		Total (Fair Value)
September 30, 2015
Impaired loans:
Commercial	$	-	$	279	$	2,237	$	2,516
Income producing - commercial real estate		-		5,587		307		5,894
Owner occupied - commercial real estate		-		282		599		881
Real estate mortgage - residential		-		-		333		333
Construction - commercial and residential		-		-		221		221
Home equity		-		198		125		323
Other consumer		-		-		72		72
Other real estate owned		-		9,494		458		9,952
Total assets measured at fair value on a nonrecurring basis as of September 30, 2015	$	-	$	15,840	$	4,352	$	20,192

(dollars in thousands)	Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)		Total (Fair Value)
December 31, 2014
Impaired loans:
Commercial	$	-	$	781	$	7,171	$	7,952
Income producing - commercial real estate		-		703		1,199		1,902
Owner occupied - commercial real estate		-		-		824		824
Real estate mortgage - residential		-		-		346		346
Construction - commercial and residential		-		-		3,297		3,297
Home equity		-		5		963		968
Other consumer		-		-		13		13
Other real estate owned		-		9,184		4,040		13,224
Total assets measured at fair value on a nonrecurring basis as of December 31, 2014	$	-	$	10,673	$	17,853	$	28,526

Loans

The Company does not record loans at fair value on a recurring basis; however, from time to time, a loan is considered impaired and an allowance for loan loss is established. Loans for which it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan are considered impaired. Once a loan is identified as individually impaired, management measures impairment in accordance with ASC Topic 310, “Receivables.” The fair value of impaired loans is estimated using one of several methods, including the collateral value, market value of similar debt, enterprise value, liquidation value and discounted cash flows. Those impaired loans not requiring a specific allowance represent loans for which the fair value of expected repayments or collateral exceed the recorded investment in such loans. At September 30, 2015, substantially all of the totally impaired loans were evaluated based upon the fair value of the collateral. In accordance with ASC Topic 820, impaired loans where an allowance is established based on the fair value of collateral require classification in the fair value hierarchy. When the fair value of the collateral is based on an observable market price or a current appraised value, the Company records the loan as nonrecurring Level 2. When an appraised value is not available or management determines the fair value of the collateral is further impaired below the appraised value and there is no observable market price, the Company records the loan as nonrecurring Level 3.

Fair Value of Financial Instruments

The Company discloses fair value information about financial instruments for which it is practicable to estimate the value, whether or not such financial instruments are recognized on the balance sheet. Fair value is the amount at which a financial instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation, and is best evidenced by quoted market price, if one exists.

Quoted market prices, if available, are shown as estimates of fair value. Because no quoted market prices exist for a portion of the Company’s financial instruments, the fair value of such instruments has been derived based on management’s assumptions with respect to future economic conditions, the amount and timing of future cash flows and estimated discount rates. Different assumptions could significantly affect these estimates. Accordingly, the net realizable value could be materially different from the estimates presented below. In addition, the estimates are only indicative of individual financial instrument values and should not be considered an indication of the fair value of the Company taken as a whole.     

The following methods and assumptions were used to estimate the fair value of each category of financial instrument for which it is practicable to estimate value:

Cash due from banks and federal funds sold: For cash and due from banks and federal funds sold the carrying amount approximates fair value.

Interest bearing deposits with other banks: Values are estimated by discounting the future cash flows using the current rates at which similar deposits would be earning.

Investment securities: For these instruments, fair values are based upon quoted prices, if available. If quoted prices are not available, fair value is measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss assumptions.

Federal Reserve and Federal Home Loan Bank stock: The carrying amount approximate the fair values at the reporting date.

Loans held for sale: Fair values for residential mortgage loans held for sale are at the carrying value (lower of cost or market) since such loans are typically committed to be sold (servicing released) at a profit.

Loans: For variable rate loans that re-price on a scheduled basis, fair values are based on carrying values. The fair value of the remaining loans are estimated by discounting the estimated future cash flows using the current interest rate at which similar loans would be made to borrowers with similar credit ratings and for the same remaining term.

Bank owned life insurance: The fair value of bank owned life insurance is the current cash surrender value, which is the carrying value.

Annuity investment: The fair value of the annuity investments is the carrying amount at the reporting date.

Mortgage banking derivatives: These derivative instruments, which are classified as Level 3 of the fair value hierarchy, are used to hedge residential mortgage loans held for sale that utilize mandatory delivery and the related interest rate lock commitments and include forward commitments to sell those loans. The fair values of derivative financial instruments are based on derivative market data inputs as of the valuation date and the underlying value of mortgage loans for interest rate lock commitments.

Interest rate swap derivatives: These derivative instruments consist of forward starting interest rate swap agreements, which are accounted for as cash flow hedges. The Company's derivative position is classified within Level 2 of the fair value hierarchy and is valued using models generally accepted in the financial services industry and that use actively quoted or observable market input values from external market data providers and/or non-binding broker-dealer quotations. The fair value of the derivatives are determined using discounted cash flow models. These models’ key assumptions include the contractual terms of the respective contract along with significant observable inputs, including interest rates, yield curves, nonperformance risk and volatility. Derivative contracts are executed with a Credit Support Annex, which is a bilateral ratings-sensitive agreement that requires collateral postings when the market value exceeds certain threshold limits. These agreements protect the interests of the Company and its counterparties should either party suffer a credit rating deterioration.

Noninterest bearing deposits: The fair value of these deposits is the amount payable on demand at the reporting date, since generally accepted accounting standards do not permit an assumption of core deposit value.

Interest bearing deposits: The fair value of interest bearing transaction, savings, and money market deposits with no defined maturity is the amount payable on demand at the reporting date, since generally accepted accounting standards do not permit an assumption of core deposit value.

Certificates of deposit: The fair value of certificates of deposit is estimated by discounting the future cash flows using the current rates at which similar deposits with remaining maturities would be accepted.

Customer repurchase agreements: The carrying amount approximate the fair values at the reporting date.

Borrowings: The carrying amount for variable rate borrowings approximate the fair values at the reporting date. The fair value of fixed rate FHLB advances and the subordinated notes are estimated by computing the discounted value of contractual cash flows payable at current interest rates for obligations with similar remaining terms. The fair value of variable rate FHLB advances is estimated to be carrying value since these liabilities are based on a spread to a current pricing index.

Off-balance sheet items: Management has reviewed the unfunded portion of commitments to extend credit, as well as standby and other letters of credit, and has determined that the fair value of such instruments is equal to the fee, if any, collected and unamortized for the commitment made.

The estimated fair values of the Company’s financial instruments at September 30, 2015 and December 31, 2014 are as follows:

					Fair Value Measurements
					Quoted Prices in Active Markets for Identical Assets or Liabilities		Significant Other Observable Inputs		Significant Unobservable Inputs
(dollars in thousands)	Carrying Value		Fair Value		(Level 1)		(Level 2)		(Level 3)
September 30, 2015
Assets
Cash and due from banks	$	10,703	$	10,703	$	-	$	10,703	$	-
Federal funds sold		4,076		4,076		-		4,076		-
Interest bearing deposits with other banks		291,276		291,276		-		291,276		-
Investment securities		524,326		524,326		125		523,982		219
Federal Reserve and Federal Home Loan Bank stock		16,865		16,865		-		16,865		-
Loans held for sale		35,713		35,713		-		35,713		-
Loans		4,776,965		4,778,753		-		6,346		4,772,407
Bank owned life insurance		58,284		58,284		-		58,284		-
Annuity investment		12,137		12,137		-		12,137		-
Mortgage banking derivatives		197		197		-		-		197
Interst rate swap derivatives		-		-		-		-		-
Liabilities
Noninterest bearing deposits		1,402,447		1,402,447		-		1,402,447		-
Interest bearing deposits		2,722,026		2,722,026		-		2,722,026		-
Certificates of deposit		802,115		802,449		-		802,449		-
Customer repurchase agreements		64,893		64,893		-		64,893		-
Borrowings		70,000		70,000		-		70,000		-
Mortgage banking derivatives		245		245		-		-		245
Interst rate swap derivatives		3,445		3,445		-		3,445		-
December 31, 2014
Assets
Cash and due from banks	$	9,097	$	9,097	$	-	$	9,097	$	-
Federal funds sold		3,516		3,516		-		3,516		-
Interest bearing deposits with other banks		243,412		243,412		-		243,412		-
Investment securities		382,343		382,343		198		381,926		219
Federal Reserve and Federal Home Loan Bank stock		22,560		22,560		-		22,560		-
Loans held for sale		44,317		44,669		-		44,669		-
Loans		4,312,399		4,314,618		-		1,489		4,313,129
Bank owned life insurance		56,594		56,594		-		56,594		-
Annuity investment		11,277		11,277		-		11,277		-
Mortgage banking derivatives		146		146		-		-		146
Liabilities
Noninterest bearing deposits		1,175,799		1,175,799		-		1,175,799		-
Interest bearing deposits		2,446,228		2,446,228		-		2,446,228		-
Certificates of deposit		688,741		688,067		-		688,067		-
Customer repurchase agreements		61,120		61,120		-		61,120		-
Borrowings		219,300		220,838		-		220,838		-
Mortgage banking derivatives		250		250		-		-		250

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Note 7 - Other Real Estate Owned

9 Months Ended

Sep. 30, 2015

Disclosure Text Block [Abstract]

Real Estate Owned [Text Block]

Note 7. Other Real Estate Owned

The activity within Other Real Estate Owned (“OREO”) for the three and nine months ended September 30, 2015 and 2014 is presented in the table below. There are no residential real estate loans in the process of foreclosure as of September 30, 2015. For the three and nine months ended September 30, 2015, proceeds on sales of OREO were $860 thousand and $1.8 million, respectively. The net losses on sales were $44 thousand and $209 thousand for the three and nine months ended September 30, 2015. 

	Three Months Ended						Nine Months Ended
(dollars in thousands)	September 30, 2015			September 30, 2014			September 30, 2015			September 30, 2014
Balance beginning of period	$	10,715		$	8,809		$	13,224		$	9,225
Real estate acquired from borrowers		225			85			1,725			330
Valuation allowance		-			(51	)		(750	)		(505	)
Properties sold		(988	)		(220	)		(4,247	)		(427	)
Balance end of period	$	9,952		$	8,623		$	9,952		$	8,623

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Note 10 - Other Comprehensive Income (Details) - Amounts Reclassified Out of Each Component of Accumulated Other Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2015	Sep. 30, 2014
Amounts Reclassified Out of Each Component of Accumulated Other Comprehensive Income (Loss) [Abstract]
Realized gain on sale of investment securities	$ 60	$ 2,224	$ 10
	(24)	(890)	(4)
Total Reclassifications for the Period	$ 36	$ 1,334	$ 6

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Note 5 - Loans and Allowance for Credit Losses

9 Months Ended

Sep. 30, 2015

Receivables [Abstract]

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

Note 5. Loans and Allowance for Credit Losses

The Bank makes loans to customers primarily in the Washington, DC metropolitan area and surrounding communities. A substantial portion of the Bank’s loan portfolio consists of loans to businesses secured by real estate and other business assets.

Loans, net of unamortized net deferred fees, at September 30, 2015, December 31, 2014, and September 30, 2014 are summarized by type as follows:

	September 30, 2015						December 31, 2014						September 30, 2014
(dollars in thousands)	Amount			%			Amount			%			Amount			%
Commercial	$	1,007,659			21	%	$	916,226			21	%	$	798,489			23	%
Income producing - commercial real estate		2,022,950			42	%		1,703,172			40	%		1,382,839			41	%
Owner occupied - commercial real estate		489,657			10	%		461,581			11	%		337,422			10	%
Real estate mortgage - residential		147,720			3	%		148,018			3	%		126,263			4	%
Construction - commercial and residential		927,265			20	%		793,432			18	%		634,736			18	%
Construction - C&I (owner occupied)		60,487			1	%		58,032			1	%		41,846			1	%
Home equity		115,346			3	%		122,536			3	%		107,291			3	%
Other consumer		5,881			-			109,402			3	%		3,662			-
Total loans		4,776,965			100	%		4,312,399			100	%		3,432,548			100	%
Less: Allowance for Credit Losses		(50,320	)					(46,075	)					(44,954	)
Net loans	$	4,726,645					$	4,266,324					$	3,387,594

Unamortized net deferred fees amounted to $17.4 million, $15.6 million, and $15.2 million at September 30, 2015, December 31, 2014, and September 30, 2014, respectively.

As of September 30, 2015 and December 31, 2014, the Bank serviced $68.9 million and $67.9 million, respectively, of SBA loans which are not reflected as loan balances on the consolidated balance sheets.

Loan Origination / Risk Management

The Company’s goal is to mitigate risks in the event of unforeseen threats to the loan portfolio as a result of economic downturn or other negative influences. Plans for mitigating inherent risks in managing loan assets include: carefully enforcing loan policies and procedures, evaluating each borrower’s business plan during the underwriting process and throughout the loan term, identifying and monitoring primary and alternative sources for loan repayment, and obtaining collateral to mitigate economic loss in the event of liquidation. Specific loan reserves are established based upon credit and/or collateral risks on an individual loan basis. A risk rating system is employed to proactively estimate loss exposure and provide a measuring system for setting general and specific reserve allocations.

The composition of the Company’s loan portfolio is heavily weighted toward commercial real estate, both owner occupied and investment real estate. The combination of owner occupied commercial real estate loans and owner occupied commercial real estate construction loans represents 11% of the loan portfolio. At September 30, 2015, the combination of commercial real estate loans and real estate construction loans represents approximately 73% of the loan portfolio. When owner occupied commercial real estate loans and owner occupied commercial construction loans are excluded, the percentage of commercial real estate and construction loans to total loans decreases to 62%. These loans are underwritten to mitigate lending risks typical of this type of loan such as declines in real estate values, changes in borrower cash flow and general economic conditions. The Bank’s policy requires a maximum loan to value of 80% and minimum cash flow debt service coverage of 1.15 to 1.00. Personal guarantees are generally required, but may be limited.  In making real estate commercial mortgage loans, the Bank generally requires that interest rates adjust not less frequently than five years.

The Company is also an active traditional commercial lender providing loans for a variety of purposes, including working capital, equipment and account receivable financing. This loan category represents approximately 21% of the loan portfolio at September 30, 2015 and was generally variable or adjustable rate. Commercial loans meet reasonable underwriting standards, including appropriate collateral and cash flow necessary to support debt service. Personal guarantees are generally required, but may be limited. SBA loans represent 1% of the commercial loan category of loans. In originating SBA loans, the Company assumes the risk of non-payment on the unguaranteed portion of the credit. The Company generally sells the guaranteed portion of the loan generating noninterest income from the gains on sale, as well as servicing income on the portion participated. SBA loans are subject to the same cash flow analyses as other commercial loans. SBA loans are subject to a maximum loan size established by the SBA.

Approximately 3% of the loan portfolio at September 30, 2015 consists of home equity loans and lines of credit and other consumer loans. These credits, while making up a smaller portion of the loan portfolio, demand the same emphasis on underwriting and credit evaluation as other types of loans advanced by the Bank.

Approximately 3% of the loan portfolio consists of residential mortgage loans. The repricing duration of these loans was 26 months.

Loans are secured primarily by duly recorded first deeds of trust. In some cases, the Bank may accept a recorded junior trust position. In general, borrowers will have a proven ability to build, lease, manage and/or sell a commercial or residential project and demonstrate satisfactory financial condition. Additionally, an equity contribution toward the project is customarily required.

Construction loans require that the financial condition and experience of the general contractor and major subcontractors be satisfactory to the Bank. Guaranteed, fixed price contracts are required whenever appropriate, along with payment and performance bonds or completion bonds for larger scale projects.

Loans intended for residential land acquisition, lot development and construction are made on the premise that the land: 1) is or will be developed for building sites for residential structures, and; 2) will ultimately be utilized for construction or improvement of residential zoned real properties, including the creation of housing. Residential development and construction loans will finance projects such as single family subdivisions, planned unit developments, townhouses, and condominiums. Residential land acquisition, development and construction loans generally are underwritten with a maximum term of 36 months, including extensions approved at origination.

Commercial land acquisition and construction loans are secured by real property where loan funds will be used to acquire land and to construct or improve appropriately zoned real property for the creation of income producing or owner user commercial properties. Borrowers are generally required to put equity into each project at levels determined by the appropriate Loan Committee. Commercial land acquisition and construction loans generally are underwritten with a maximum term of 24 months.

Substantially all construction draw requests must be presented in writing on American Institute of Architects documents and certified either by the contractor, the borrower and/or the borrower’s architect. Each draw request shall also include the borrower’s soft cost breakdown certified by the borrower or their Chief Financial Officer. Prior to an advance, the Bank or its contractor inspects the project to determine that the work has been completed, to justify the draw requisition.

Commercial permanent loans are secured by improved real property which is generating income in the normal course of operation. Debt service coverage, assuming stabilized occupancy, must be satisfactory to support a permanent loan. The debt service coverage ratio is ordinarily at least 1.15 to 1.00. As part of the underwriting process, debt service coverage ratios are stress tested assuming a 200 basis point increase in interest rates from their current levels.

Commercial permanent loans generally are underwritten with a term not greater than 10 years or the remaining useful life of the property, whichever is lower. The preferred term is between 5 to 7 years, with amortization to a maximum of 25 years.

The Company’s loan portfolio includes ADC real estate loans including both investment and owner occupied projects. ADC loans amounted to $987.8 million at September 30, 2015. A portion of the ADC portfolio, both speculative and non-speculative, includes loan funded interest reserves at origination. ADC loans containing loan funded interest reserves represent approximately 44% of the outstanding ADC loan portfolio at September 30, 2015. The decision to establish a loan-funded interest reserve is made upon origination of the ADC loan and is based upon a number of factors considered during underwriting of the credit including: (i) the feasibility of the project; (ii) the experience of the sponsor; (iii) the creditworthiness of the borrower and guarantors; (iv) borrower equity contribution; and (v) the level of collateral protection. When appropriate, an interest reserve provides an effective means of addressing the cash flow characteristics of a properly underwritten ADC loan. The Company does not significantly utilize interest reserves in other loan products. The Company recognizes that one of the risks inherent in the use of interest reserves is the potential masking of underlying problems with the project and/or the borrower’s ability to repay the loan. In order to mitigate this inherent risk, the Company employs a series of reporting and monitoring mechanisms on all ADC loans, whether or not an interest reserve is provided, including: (i) construction and development timelines which are monitored on an ongoing basis which track the progress of a given project to the timeline projected at origination; (ii) a construction loan administration department independent of the lending function; (iii) third party independent construction loan inspection reports; (iv) monthly interest reserve monitoring reports detailing the balance of the interest reserves approved at origination and the days of interest carry represented by the reserve balances as compared to the then current anticipated time to completion and/or sale of speculative projects; and (v) quarterly commercial real estate construction meetings among senior Company management, which includes monitoring of current and projected real estate market conditions. If a project has not performed as expected, it is not the customary practice of the Company to increase loan funded interest reserves.

From time to time the Company may make loans for its own portfolio or through its higher risk loan affiliate, ECV. Such loans, which are made to finance projects (which may also be financed at the Bank level), may have higher risk characteristics than loans made by the Bank, such as lower priority interests and/or higher loan to value ratios. The Company seeks an overall financial return on these transactions commensurate with the risks and structure of each individual loan. Certain transactions may bear current interest at a rate with a significant premium to normal market rates. Other loan transactions may carry a standard rate of current interest, but also earn additional interest based on a percentage of the profits of the underlying project or a fixed accrued rate of interest.

On July 24, 2015, the Company sold substantially all of the indirect consumer loan portfolio acquired in the Merger for $79 million. The fair value adjustment on the sale of $879 thousand was recorded as an adjustment to the intangibles established in the Merger.

The following tables detail activity in the allowance for credit losses by portfolio segment for the three and nine months ended September 30, 2015 and 2014. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.

				Income Producing			Owner Occupied			Real Estate			Construction Commercial
				Commercial			Commercial			Mortgage			and			Home			Other
(dollars in thousands)	Commercial			Real Estate			Real Estate			Residential			Residential			Equity			Consumer			Total
Three months ended September 30, 2015
Allowance for credit losses:
Balance at beginning of period	$	12,911		$	12,411		$	3,113		$	1,082		$	17,633		$	1,496		$	275		$	48,921
Loans charged-off		(1,388	)		(254	)		-			-			-			(225	)		(95	)		(1,962	)
Recoveries of loans previously charged-off		60			8			-			2			10			1			18			99
Net loans charged-off		(1,328	)		(246	)		-			2			10			(224	)		(77	)		(1,863	)
Provision for credit losses		57			1,550			(13	)		(18	)		1,281			334			71			3,262
Ending balance	$	11,640		$	13,715		$	3,100		$	1,066		$	18,924		$	1,606		$	269		$	50,320
Nine months ended September 30, 2015
Allowance for credit losses:
Balance at beginning of period	$	13,222		$	11,442		$	2,954		$	1,259		$	15,625		$	1,469		$	104		$	46,075
Loans charged-off		(4,693	)		(651	)		-			-			-			(644	)		(182	)		(6,170	)
Recoveries of loans previously charged-off		135			26			2			5			114			5			85			372
Net loans charged-off		(4,558	)		(625	)		2			5			114			(639	)		(97	)		(5,798	)
Provision for credit losses		2,976			2,898			144			(198	)		3,185			776			262			10,043
Ending balance	$	11,640		$	13,715		$	3,100		$	1,066		$	18,924		$	1,606		$	269		$	50,320
As of September 30, 2015
Allowance for credit losses:
Individually evaluated for impairment	$	2,312		$	827		$	400		$	-		$	350		$	338		$	-		$	4,227
Collectively evaluated for impairment		9,328			12,888			2,700			1,066			18,574			1,268			269			46,093
Ending balance	$	11,640		$	13,715		$	3,100		$	1,066		$	18,924		$	1,606		$	269		$	50,320
Three months ended September 30, 2014
Allowance for credit losses:
Balance at beginning of period	$	11,413		$	10,745		$	3,273		$	958		$	15,487		$	1,331		$	345		$	43,552
Loans charged-off		(317	)		(22	)		-			(48	)		(620	)		(230	)		-			(1,237	)
Recoveries of loans previously charged-off		519			-			-			-			6			2			1			528
Net loans charged-off		202			(22	)		-			(48	)		(614	)		(228	)		1			(709	)
Provision for credit losses		1,558			478			42			70			(237	)		259			(59	)		2,111
Ending balance	$	13,173		$	11,201		$	3,315		$	980		$	14,636		$	1,362		$	287		$	44,954
Nine months ended September 30, 2014
Allowance for credit losses:
Balance at beginning of period	$	9,780		$	10,359		$	3,899		$	944		$	13,934		$	1,871		$	134		$	40,921
Loans charged-off		(1,968	)		(22	)		(35	)		(138	)		(1,426	)		(379	)		(84	)		(4,052	)
Recoveries of loans previously charged-off		802			4			7			-			77			8			8			906
Net loans charged-off		(1,166	)		(18	)		(28	)		(138	)		(1,349	)		(371	)		(76	)		(3,146	)
Provision for credit losses		4,559			860			(556	)		174			2,051			(138	)		229			7,179
Ending balance	$	13,173		$	11,201		$	3,315		$	980		$	14,636		$	1,362		$	287		$	44,954
As of September 30, 2014
Allowance for credit losses:
Individually evaluated for impairment	$	4,409		$	578		$	1,330		$	-		$	1,478		$	218		$	-		$	8,013
Collectively evaluated for impairment		8,764			10,623			1,985			980			13,158			1,144			287			36,941
Ending balance	$	13,173		$	11,201		$	3,315		$	980		$	14,636		$	1,362		$	287		$	44,954

The Company’s recorded investments in loans as of September 30, 2015, December 31, 2014 and September 30, 2014 related to each balance in the allowance for loan losses by portfolio segment and disaggregated on the basis of the Company’s impairment methodology was as follows:

			Income Producing		Owner occupied		Real Estate		Construction Commercial
			Commercial		Commercial		Mortgage		and		Home		Other
(dollars in thousands)	Commercial		Real Estate		Real Estate		Residential		Residential		Equity		Consumer		Total
September 30, 2015
Recorded investment in loans:
Individually evaluated for impairment	$	12,869	$	6,877	$	1,790	$	-	$	17,644	$	661	$	72	$	39,913
Collectively evaluated for impairment		994,790		2,016,073		487,867		147,720		970,108		114,685		5,809		4,737,052
Ending balance	$	1,007,659	$	2,022,950	$	489,657	$	147,720	$	987,752	$	115,346	$	5,881	$	4,776,965
December 31, 2014
Recorded investment in loans:
Individually evaluated for impairment	$	17,612	$	5,109	$	6,891	$	-	$	14,241	$	1,398	$	59	$	45,310
Collectively evaluated for impairment		898,614		1,698,063		454,690		148,018		837,223		121,138		109,343		4,267,089
Ending balance	$	916,226	$	1,703,172	$	461,581	$	148,018	$	851,464	$	122,536	$	109,402	$	4,312,399
September 30, 2014
Recorded investment in loans:
Individually evaluated for impairment	$	17,785	$	2,710	$	5,054	$	-	$	17,479	$	745	$	-	$	43,773
Collectively evaluated for impairment		780,704		1,380,129		332,368		126,263		659,103		106,546		3,662		3,388,775
Ending balance	$	798,489	$	1,382,839	$	337,422	$	126,263	$	676,582	$	107,291	$	3,662	$	3,432,548

At September 30, 2015, nonperforming loans acquired have a carrying value of $1.8 million and an unpaid principal balance of $2.9 million and were evaluated separately in accordance with ASC Topic 310-30, “Loans and Debt Securities Acquired with Deteriorated Credit Quality.” The various impaired loans were recorded at estimated fair value with any excess being charged-off or treated as a non-accretable discount. Subsequent downward adjustments to the valuation of impaired loans acquired will result in additional loan loss provisions and related allowance for credit losses. Subsequent upward adjustments to the valuation of impaired loans acquired will result in accretable discount. No adjustments have been made to the fair value amounts of impaired loans subsequent to the allowable period of adjustment from the date of acquisition.

Credit Quality Indicators

The Company uses several credit quality indicators to manage credit risk in an ongoing manner. The Company's primary credit quality indicators are to use an internal credit risk rating system that categorizes loans into pass, watch, special mention, or classified categories. 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. These are typically loans to businesses or individuals in the classes which comprise the commercial portfolio segment. Groups of loans that are underwritten and structured using standardized criteria and characteristics, such as statistical models (e.g., credit scoring or payment performance), are typically risk rated and monitored collectively. These are typically loans to individuals in the classes which comprise the consumer portfolio segment.

The following are the definitions of the Company's credit quality indicators:

Pass: Loans in all classes that comprise the commercial and consumer portfolio segments that are not adversely rated, are contractually current as to principal and interest, and are otherwise in compliance with the contractual terms of the loan agreement. Management believes that there is a low likelihood of loss related to those loans that are considered pass.

Watch: Loan paying as agreed with generally acceptable asset quality; however the obligor’s performance has not met expectations. Balance sheet and/or income statement has shown deterioration to the point that the obligor could not sustain any further setbacks. Credit is expected to be strengthened through improved obligor performance and/or additional collateral within a reasonable period of time.

Special Mention: Loans in the classes that comprise the commercial portfolio segment that have potential weaknesses that deserve management's close attention. If not addressed, these potential weaknesses may result in deterioration of the repayment prospects for the loan. The special mention credit quality indicator is not used for classes of loans that comprise the consumer portfolio segment. Management believes that there is a moderate likelihood of some loss related to those loans that are considered special mention.

Classified:

Classified (a) Substandard - Loans inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the company will sustain some loss if the deficiencies are not corrected. Loss potential, while existing in the aggregate amount of substandard loans, does not have to exist in individual loans classified substandard.

Classified (b) Doubtful - Loans that have all the weaknesses inherent in a loan classified substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The possibility of loss is extremely high, but because of certain important and reasonably specific pending factors, which may work to the advantage and strengthening of the assets, its classification as an estimated loss is deferred until its more exact status may be determined.

The Company's credit quality indicators are updated generally on a quarterly basis, but no less frequently than annually. The following table presents by class and by credit quality indicator, the recorded investment in the Company's loans and leases as of September 30, 2015, December 31, 2014 and September 30, 2014.

			Watch and						Total
(dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Loans
September 30, 2015
Commercial	$	977,165	$	17,625	$	12,869	$	-	$	1,007,659
Income producing - commercial real estate		1,999,509		16,564		6,877		-		2,022,950
Owner occupied - commercial real estate		479,843		8,024		1,790		-		489,657
Real estate mortgage – residential		146,992		728		-		-		147,720
Construction - commercial and residential		964,854		5,254		17,644		-		987,752
Home equity		112,978		1,707		661		-		115,346
Other consumer		5,804		5		72		-		5,881
Total	$	4,687,145	$	49,907	$	39,913	$	-	$	4,776,965
December 31, 2014
Commercial	$	875,102	$	23,512	$	17,612	$	-	$	916,226
Income producing - commercial real estate		1,679,101		18,962		5,109		-		1,703,172
Owner occupied - commercial real estate		445,013		9,677		6,891		-		461,581
Real estate mortgage – residential		147,262		756		-		-		148,018
Construction - commercial and residential		827,503		9,720		14,241		-		851,464
Home equity		119,420		1,718		1,398		-		122,536
Other consumer		109,343		-		59		-		109,402
Total	$	4,202,744	$	64,345	$	45,310	$	-	$	4,312,399
September 30, 2014
Commercial	$	761,502	$	19,202	$	17,785	$	-	$	798,489
Investment - commercial real estate		1,362,060		18,069		2,710		-		1,382,839
Owner occupied - commercial real estate		320,960		11,408		5,054		-		337,422
Real estate mortgage – residential		125,363		900		-		-		126,263
Construction - commercial and residential		650,679		8,424		17,479		-		676,582
Home equity		104,601		1,945		745		-		107,291
Other consumer		3,662		-		-		-		3,662
Total	$	3,328,827	$	59,948	$	43,773	$	-	$	3,432,548

Nonaccrual and Past Due Loans

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Loans are placed on nonaccrual status when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provisions. Loans may be placed on nonaccrual status regardless of whether or not such loans are considered past due. When interest accrual is discontinued, all unpaid accrued interest is reversed. Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

The following table presents, by class of loan, information related to nonaccrual loans as of the periods ended September 30, 2015, December 31, 2014 and September 30, 2014.

(dollars in thousands)	September 30, 2015		December 31, 2014		September 30, 2014
Commercial	$	4,828	$	12,975	$	15,431
Income producing - commercial real estate		6,721		2,645		2,553
Owner occupied - commercial real estate		1,281		1,324		3,502
Real estate mortgage - residential		333		346		350
Construction - commercial and residential		571		3,697		6,919
Home equity		661		1,398		588
Other consumer		72		58		-
Total nonaccrual loans (1)(2)	$	14,467	$	22,443	$	29,343

(1) Excludes troubled debt restructurings (“TDRs”) that were performing under their restructured terms totaling $15.2 million at September 30, 2015, $13.5 million at December 31, 2014 and $7.9 million at September 30, 2014.

(2) Gross interest income of $822 thousand would have been recorded for the nine months ended September 30, 2015 if nonaccrual loans shown above had been current and in accordance with their original terms, while interest actually recorded on such loans was $127 thousand. See Note 1 to the consolidated financial statements for a description of the Company’s policy for placing loans on nonaccrual status.

The following table presents, by class of loan, an aging analysis and the recorded investments in loans past due as of September 30, 2015 and December 31, 2014. 

	Loans		Loans		Loans						Total Recorded
	30-59 Days		60-89 Days		90 Days or		Total Past		Current		Investment in
(dollars in thousands)	Past Due		Past Due		More Past Due		Due Loans		Loans		Loans
September 30, 2015
Commercial	$	731	$	2,537	$	4,828	$	8,096	$	999,563	$	1,007,659
Income producing - commercial real estate		-		5,058		6,721		11,779		2,011,171		2,022,950
Owner occupied - commercial real estate		319		-		1,281		1,600		488,057		489,657
Real estate mortgage – residential		-		-		333		333		147,387		147,720
Construction - commercial and residential		157		5,037		571		5,765		981,987		987,752
Home equity		173		641		661		1,475		113,871		115,346
Other consumer		54		8		72		134		5,747		5,881
Total	$	1,434	$	13,281	$	14,467	$	29,182	$	4,747,783	$	4,776,965
December 31, 2014
Commercial	$	1,505	$	4,032	$	12,975	$	18,512	$	897,714	$	916,226
Income producing - commercial real estate		1,825		5,376		2,645		9,846		1,693,326		1,703,172
Owner occupied - commercial real estate		1,089		214		1,324		2,627		458,954		461,581
Real estate mortgage – residential		-		-		346		346		147,672		148,018
Construction - commercial and residential		-		-		3,697		3,697		847,767		851,464
Home equity		-		1,365		1,398		2,763		119,773		122,536
Other consumer		284		81		58		423		108,979		109,402
Total	$	4,703	$	11,068	$	22,443	$	38,214	$	4,274,185	$	4,312,399

Impaired Loans

Loans are considered impaired when, based on current information and events, it is probable the Company will be unable to collect all amounts due in accordance with the original contractual terms of the loan agreement, including scheduled principal and interest payments. Impairment is evaluated in total for smaller-balance loans of a similar nature and on an individual loan basis for other loans. If a loan is impaired, a specific valuation allowance is allocated, if necessary, so that the loan is reported net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral. Interest payments on impaired loans are typically applied to principal unless collectability of the principal amount is reasonably assured, in which case interest is recognized on a cash basis. Impaired loans, or portions thereof, are charged-off when deemed uncollectible.

The following table presents, by class of loan, information related to impaired loans for the periods ended September 30, 2015, December 31, 2014 and September 30, 2014.

	Unpaid Contractual		Recorded Investment		Recorded Investment		Total				Average Recorded Investment				Interest Income Recognized
	Principal		With No		With		Recorded		Related		Quarter		Year		Quarter			Year
(dollars in thousands)	Balance		Allowance		Allowance		Investment		Allowance		To Date		To Date		To Date			To Date
September 30, 2015
Commercial	$	9,444	$	2,663	$	3,337	$	6,000	$	2,312	$	7,978	$	10,047	$	39		$	48
Income producing - commercial real estate		15,925		9,215		6,017		15,232		827		12,542		11,388		188			259
Owner occupied - commercial real estate		1,790		973		817		1,790		400		1,811		1,844		-			-
Real estate mortgage – residential		333		333		-		333		-		336		340		-			-
Construction - commercial and residential		5,608		5,037		571		5,608		350		5,625		7,176		100			298
Home equity		661		116		545		661		338		774		959		-			-
Other consumer		72		72		-		72		-		45		40		1			2
Total	$	33,833	$	18,409	$	11,287	$	29,696	$	4,227	$	29,111	$	31,794	$	328		$	607
December 31, 2014
Commercial	$	14,075	$	1,603	$	11,372	$	12,975	$	5,334	$	14,203	$	13,681	$	20		$	251
Income producing - commercial real estate		10,869		8,952		1,542		10,494		751		8,202		7,021		196			203
Owner occupied - commercial real estate		1,889		1,038		851		1,889		577		2,696		3,986		-			6
Real estate mortgage – residential		346		346		-		346		-		348		529		-			-
Construction - commercial and residential		8,785		8,176		609		8,785		927		10,113		10,967		436			1,147
Home equity		1,398		339		1,059		1,398		430		993		747		32			36
Other consumer		58		-		58		58		45		29		30		7			7
Total	$	37,420	$	20,454	$	15,491	$	35,945	$	8,064	$	36,584	$	36,961	$	691		$	1,650
September 30, 2014
Commercial	$	16,531	$	950	$	14,481	$	15,431	$	4,409	$	12,051	$	12,132	$	228		$	231
Investment - commercial real estate		6,284		4,839		1,070		5,909		578		5,975		5,873		(71	)		7
Owner occupied - commercial		3,502		391		3,111		3,502		1,330		3,366		4,877		6			6
Real estate mortgage – residential		350		350		-		350		-		500		665		-			-
Construction - commercial and residential		11,931		9,785		1,655		11,440		1,478		11,429		12,004		159			711
Home equity		588		125		463		588		218		496		553		4			4
Other consumer		-		-		-		-		-		-		33		-			-
Total	$	39,186	$	16,440	$	20,780	$	37,220	$	8,013	$	33,817	$	36,137	$	326		$	959

Modifications

A modification of a loan constitutes a troubled debt restructuring (“TDR”) when a borrower is experiencing financial difficulty and the modification constitutes a concession. The Company offers various types of concessions when modifying a loan. Commercial and industrial loans modified in a TDR often involve temporary interest-only payments, term extensions, and converting revolving credit lines to term loans. Additional collateral, a co-borrower, or a guarantor is often requested. Commercial mortgage and construction loans modified in a TDR often involve reducing the interest rate for the remaining term of the loan, extending the maturity date at an interest rate lower than the current market rate for new debt with similar risk, or substituting or adding a new borrower or guarantor. Construction loans modified in a TDR may also involve extending the interest-only payment period.

Loans modified in a TDR for the Company may have the financial effect of increasing the specific allowance associated with the loan. An allowance for impaired consumer and commercial loans that have been modified in a TDR is measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s observable market price, or the estimated fair value of the collateral, less any selling costs, if the loan is collateral dependent. Management exercises significant judgment in developing these estimates.

The following table presents by class, the recorded investment of loans modified in TDRs held by the Company during the periods ended September 30, 2015 and December 31, 2014.

	Number of		TDRs Performing		TDRs Not Performing		Total
(dollars in thousands)	Contracts		to Modified Terms		to Modified Terms		TDRs
September 30, 2015
Commercial		4	$	1,172	$	215	$	1,387
Income producing - commercial real estate		4		8,512		-		8,512
Owner occupied - commercial real estate		1		509		-		509
Construction - commercial and residential		1		5,037		-		5,037
Total		10	$	15,230	$	215	$	15,445
December 31, 2014
Commercial		1	$	-	$	227	$	227
Income producing - commercial real estate		3		7,849		-		7,849
Owner occupied - commercial real estate		1		565		-		565
Construction - commercial and residential		1		5,088		-		5,088
Total		6	$	13,502	$	227	$	13,729

During the nine months of 2015, there were no defaults on restructured loans, as compared to the nine months of 2014, which had one default on a $2.1 million restructured loan. A default is considered to have occurred once the TDR is past due 90 days or more or it has been placed on nonaccrual.  There were no nonperforming TDRs reclassified to nonperforming loans during the nine months ended September 30, 2015. There was one nonperforming TDR totaling $2.1 million reclassified to nonperforming loans during the nine months ended September 30, 2014. Commercial and consumer loans modified in a TDR are closely monitored for delinquency as an early indicator of possible future default. If loans modified in a TDR subsequently default, the Company evaluates the loan for possible further impairment. The allowance may be increased, adjustments may be made in the allocation of the allowance, or partial charge-offs may be taken to further write-down the carrying value of the loan. There were three loans modified in a TDR during the three months ended September 30, 2015. During the nine months ended September 30, 2015, there were a total of four loans modified in a TDR. There was one loan modified in a TDR during the three and nine months ended September 30, 2014.

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Note 6 - Interest Rate Swap Derivatives

9 Months Ended

Sep. 30, 2015

Interest Rate Swap [Member]

Note 6 - Interest Rate Swap Derivatives [Line Items]

Discussion of Hybrid Instruments and Embedded Derivatives [Text Block]

Note 6. Interest Rate Swap Derivatives

The Company uses interest rate swap agreements to assist in its interest rate risk management. The notional amounts of the interest rate swaps do not represent amounts exchanged by the counterparties, but rather, the notional amount is used to determine, along with other terms of the derivative, the amounts to be exchanged between the counterparties.

The Company’s objectives in using interest rate derivatives are to add stability to interest income and expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company has entered into interest rate swaps as part of its interest rate risk management strategy. These interest rate swaps are designated as cash flow hedges and involve the receipt of variable rate amounts from counterparty in exchange for the Company making fixed payments. As of September 30, 2015, the Company had three forward starting interest rate swap transactions outstanding that had a notional amount of $250 million associated with the Company’s variable rate deposits.

For derivatives designated as cash flow hedges, the effective portion of changes in the fair value of the derivative is initially reported in other comprehensive income (outside of earnings), net of tax, and subsequently reclassified to earnings when the hedged transaction affects earnings, and the ineffective portion of changes in the fair value of the derivative is recognized directly in earnings. The Company assesses the effectiveness of each hedging relationship by comparing the changes in cash flows of the derivative hedging instrument with the changes in cash flows of the designated hedged transactions. The Company did not recognize any hedge ineffectiveness in earnings during the period ended September 30, 2015.

The Company is hedging its exposure to the variability in future cash flows for forecasted transactions over a maximum period of ten months (excluding forecasted transactions related to the payment of variable interest on existing financial instruments) and as such existing hedges are deemed forward starting swaps and no net settlements of cash flows is occurring.

Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest income/expense as interest payments are made/received on the Company’s variable-rate assets/liabilities. During the quarter ended September 30, 2015, the Company did not have any reclassifications to interest expense. During the next twelve months, the Company estimates (based on existing interest rates) that $1.46 million will be reclassified as an increase in interest expense.

The Company is exposed to credit risk in the event of nonperformance by the interest rate swap counterparty. The Company minimizes this risk by entering into derivative contracts with only large, stable financial institutions, and the Company has not experienced, and does not expect, any losses from counterparty nonperformance on the interest rate swaps. The Company monitors counterparty risk in accordance with the provisions of ASC Topic 815, “Derivatives and Hedging.” In addition, the interest rate swap agreements contain language outlining collateral-pledging requirements for each counterparty. Collateral must be posted when the market value exceeds certain threshold limits.

The table below identifies the balance sheet category and fair values of the Company’s derivative instruments designed as cash flow hedges as of September 30, 2015. There were no derivative instruments as of December 31, 2014 or September 30, 2014.

September 30,	Swap			Notional		Fair			Balance Sheet
2015	Number			Amount		Value			Category	Receive Rate	Pay Rate			Maturity
(dollars in thousands)
Interest rate swap		(1	)	$	75,000	$	(996	)	Other Liabilities	1 month USD-LIBOR-BBA w/ -1 day lookback +10 basis points		1.71	%	March 31, 2020
Interest rate swap		(2	)		100,000		(1,435	)	Other Liabilities	Federal Funds Effective Rate +10 basis points		1.74	%	April 15, 2021
Interest rate swap		(3	)		75,000		(1,014	)	Other Liabilities	1 month USD-LIBOR-BBA w/ -1 day lookback +10 basis points		1.92	%	March 31, 2022

The table below presents the pre-tax net gains (losses) of the Company’s cash flow hedges for the nine months ended September 30, 2015. Since all transactions are forward starting swaps all amounts are balance sheet related (AOCI), and no amounts were recorded in the income statement.

				Nine Months Ended September 30, 2015
				Effective Portion						Ineffective Portion
							Reclassified from AOCI			Recognized in Income
				Amount of			into income			on Derivatives
	Swap			Pre-tax gain (loss)				Amount of			Amount of
	Number			Recognized in OCI			Category	Gain (Loss)		Category	Gain (Loss)
(dollars in thousands)
Interest rate swap		(1	)	$	(996	)		$	-		$	-
Interest rate swap		(2	)		(1,435	)			-			-
Interest rate swap		(3	)		(1,014	)			-			-

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Note 8 - Net Income Per Common Share

9 Months Ended

Sep. 30, 2015

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

Note 8. Net Income per Common Share

The calculation of net income per common share for the three and nine months ended September 30, 2015 and 2014 was as follows.

	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars and shares in thousands, except per share data)	2015		2014		2015		2014
Basic:
Net income available to common shareholders	$	21,283	$	13,937	$	61,280	$	39,097
Average common shares outstanding		33,401		26,024		32,625		25,978
Basic net income per common share	$	0.64	$	0.54	$	1.88	$	1.50
Diluted:
Net income available to common shareholders	$	21,283	$	13,937	$	61,280	$	39,097
Average common shares outstanding		33,401		26,024		32,625		25,978
Adjustment for common share equivalents		625		630		653		640
Average common shares outstanding-diluted		34,026		26,654		33,278		26,618
Diluted net income per common share	$	0.63	$	0.52	$	1.84	$	1.47
Anti-dilutive shares		-		21		11		21

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Note 11 - Fair Value Measurements (Details) - Fair Values of Financial Instruments - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014	Sep. 30, 2014
Assets
Cash and due from banks, carrying value	$ 10,703	$ 9,097	$ 7,920
Cash and due from banks, fair value	10,703	9,097
Federal funds sold, carrying value	4,076	3,516	8,968
Federal funds sold, fair value	4,076	3,516	8,968
Interest bearing deposits with other banks, carrying value	291,276	243,412	191,468
Interest bearing deposits with other banks, fair value	291,276	243,412	191,468
Investment securities, carrying value	524,326	382,343	382,468
Investment securities, fair value	524,326	382,343	382,468
Federal Reserve and Federal Home Loan Bank stock, carrying value	16,865	22,560
Federal Reserve and Federal Home Loan Bank stock, fair value	16,865	22,560
Loans held for sale, carrying value	35,713	44,317	41,254
Loans held for sale, fair value	35,713	44,669
Loans, carrying value	4,776,965	4,312,399	3,432,548
Loans, fair value	4,778,753	4,314,618
Bank owned life insurance, carrying value	58,284	56,594	40,432
Bank owned life insurance, fair value	58,284	56,594	40,432
Annuity investment, carrying value	12,137	11,277
Annuity investment, fair value	12,137	11,277
derivatives-asset, carrying value	3,445
derivatives-asset, fair value	3,445
Liabilities
Noninterest bearing deposits	4,926,588	4,310,768	$ 3,533,850
Certificates of deposit	802,115	688,741
Certificates of deposit	802,449	688,067
Customer repurchase agreements	64,893	61,120
Customer repurchase agreements	64,893	61,120
Borrowings, carrying value	70,000	219,300
Borrowings, fair value	70,000	220,838
Mortgage banking derivatives-liabilities	245	250
Mortgage Banking Derivative [Member]
Assets
derivatives-asset, carrying value	197	146
derivatives-asset, fair value	197	146
Noninterest-bearing Deposits [Member]
Liabilities
Noninterest bearing deposits	1,402,447	1,175,799
Noninterest bearing deposits	1,402,447	1,175,799
Interest-bearing Deposits [Member]
Liabilities
Noninterest bearing deposits	2,722,026	2,446,228
Noninterest bearing deposits	2,722,026	2,446,228
Fair Value, Inputs, Level 1 [Member]
Assets
Investment securities, carrying value	125	198
Investment securities, fair value	125	198
Fair Value, Inputs, Level 2 [Member]
Assets
Cash and due from banks, fair value	10,703	9,097
Federal funds sold, carrying value	4,076	3,516
Federal funds sold, fair value	4,076	3,516
Interest bearing deposits with other banks, carrying value	291,276	243,412
Interest bearing deposits with other banks, fair value	291,276	243,412
Investment securities, carrying value	523,982	381,926
Investment securities, fair value	523,982	381,926
Federal Reserve and Federal Home Loan Bank stock, fair value	16,865	22,560
Loans held for sale, fair value	35,713	44,669
Loans, fair value	6,346	1,489
Bank owned life insurance, carrying value	58,284	56,594
Bank owned life insurance, fair value	58,284	56,594
Annuity investment, fair value	12,137	11,277
derivatives-asset, fair value	3,445
Liabilities
Certificates of deposit	802,449	688,067
Customer repurchase agreements	64,893	61,120
Borrowings, fair value	70,000	220,838
Fair Value, Inputs, Level 2 [Member] | Noninterest-bearing Deposits [Member]
Liabilities
Noninterest bearing deposits	1,402,447	1,175,799
Fair Value, Inputs, Level 2 [Member] | Interest-bearing Deposits [Member]
Liabilities
Noninterest bearing deposits	2,722,026	2,446,228
Fair Value, Inputs, Level 3 [Member]
Assets
Investment securities, carrying value	219	219
Investment securities, fair value	219	219
Loans, fair value	4,772,407	4,313,129
Liabilities
Mortgage banking derivatives-liabilities	245	250
Fair Value, Inputs, Level 3 [Member] | Mortgage Banking Derivative [Member]
Assets
derivatives-asset, fair value	$ 197	$ 146

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Note 13 - Subsequent Event (Details) - USD ($) $ / shares in Units, $ in Thousands	Nov. 02, 2015	Sep. 30, 2015	Dec. 31, 2014	Sep. 30, 2014
Subsequent Event [Member]
Note 13 - Subsequent Event (Details) [Line Items]
Stock Redeemed or Called During Period, Value	$ 71,960
Series B Preferred Stock [Member]
Note 13 - Subsequent Event (Details) [Line Items]
Preferred Stock, Liquidation Preference Per Share		$ 1,000	$ 1,000	$ 1,000
Series B Preferred Stock [Member] | Subsequent Event [Member]
Note 13 - Subsequent Event (Details) [Line Items]
Stock Redeemed or Called During Period, Shares	56,600
Preferred Stock, Liquidation Preference Per Share	$ 1,000
Series C Preferred Stock [Member]
Note 13 - Subsequent Event (Details) [Line Items]
Preferred Stock, Liquidation Preference Per Share		$ 1,000	$ 1,000	$ 1,000
Series C Preferred Stock [Member] | Subsequent Event [Member]
Note 13 - Subsequent Event (Details) [Line Items]
Stock Redeemed or Called During Period, Shares	15,300
Preferred Stock, Liquidation Preference Per Share	$ 1,000

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Note 11 - Fair Value Measurements (Details) - Assets Measured at Fair Value on a Nonrecurring Basis - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Impaired loans:
Other real estate owned	$ 9,952	$ 13,224
Total assets measured at fair value on a nonrecurring basis	20,192	28,526
Commercial Portfolio Segment [Member]
Impaired loans:
Impaired loans	2,516	7,952
Income Producing Portfolio Segment [Member]
Impaired loans:
Impaired loans	5,894	1,902
Owner Occupied Portfolio Segment [Member]
Impaired loans:
Impaired loans	881	824
Residential Portfolio Segment [Member]
Impaired loans:
Impaired loans	333	346
Construction Portfolio Segment [Member]
Impaired loans:
Impaired loans	221	3,297
Home Equity Portfolio Segment [Member]
Impaired loans:
Impaired loans	323	968
Other Consumer Portfolio Segment [Member]
Impaired loans:
Impaired loans	72	13
Fair Value, Inputs, Level 2 [Member]
Impaired loans:
Other real estate owned	9,494	9,184
Total assets measured at fair value on a nonrecurring basis	15,840	10,673
Fair Value, Inputs, Level 2 [Member] | Commercial Portfolio Segment [Member]
Impaired loans:
Impaired loans	279	781
Fair Value, Inputs, Level 2 [Member] | Income Producing Portfolio Segment [Member]
Impaired loans:
Impaired loans	5,587	703
Fair Value, Inputs, Level 2 [Member] | Owner Occupied Portfolio Segment [Member]
Impaired loans:
Impaired loans	282
Fair Value, Inputs, Level 2 [Member] | Home Equity Portfolio Segment [Member]
Impaired loans:
Impaired loans	198	5
Fair Value, Inputs, Level 3 [Member]
Impaired loans:
Other real estate owned	458	4,040
Total assets measured at fair value on a nonrecurring basis	4,352	17,853
Fair Value, Inputs, Level 3 [Member] | Commercial Portfolio Segment [Member]
Impaired loans:
Impaired loans	2,237	7,171
Fair Value, Inputs, Level 3 [Member] | Income Producing Portfolio Segment [Member]
Impaired loans:
Impaired loans	307	1,199
Fair Value, Inputs, Level 3 [Member] | Owner Occupied Portfolio Segment [Member]
Impaired loans:
Impaired loans	599	824
Fair Value, Inputs, Level 3 [Member] | Residential Portfolio Segment [Member]
Impaired loans:
Impaired loans	333	346
Fair Value, Inputs, Level 3 [Member] | Construction Portfolio Segment [Member]
Impaired loans:
Impaired loans	221	3,297
Fair Value, Inputs, Level 3 [Member] | Home Equity Portfolio Segment [Member]
Impaired loans:
Impaired loans	125	963
Fair Value, Inputs, Level 3 [Member] | Other Consumer Portfolio Segment [Member]
Impaired loans:
Impaired loans	$ 72	$ 13

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Note 3 - Investment Securities Available-for-Sale (Details) - Securities in Continuous Unrealized Loss Position - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Note 3 - Investment Securities Available-for-Sale (Details) - Securities in Continuous Unrealized Loss Position [Line Items]
Less than 12 Months Estimated Fair Value	$ 99,982	$ 56,619
Less than 12 Months Unrealized Losses	445	242
12 Months or Greater Estimated Fair Value	61,610	98,693
12 Months or Greater Unrealized Losses	948	2,435
Total Estimated Fair Value	161,592	155,312
Total Unrealized Losses	1,393	2,677
US Government Agencies Debt Securities [Member]
Note 3 - Investment Securities Available-for-Sale (Details) - Securities in Continuous Unrealized Loss Position [Line Items]
Less than 12 Months Estimated Fair Value	13,966	2,001
Less than 12 Months Unrealized Losses	90	7
12 Months or Greater Estimated Fair Value		1,750
12 Months or Greater Unrealized Losses		33
Total Estimated Fair Value	13,966	3,751
Total Unrealized Losses	90	40
Residential Mortgage Backed Securities [Member]
Note 3 - Investment Securities Available-for-Sale (Details) - Securities in Continuous Unrealized Loss Position [Line Items]
Less than 12 Months Estimated Fair Value	58,925	49,644
Less than 12 Months Unrealized Losses	182	221
12 Months or Greater Estimated Fair Value	61,610	86,028
12 Months or Greater Unrealized Losses	948	2,295
Total Estimated Fair Value	120,535	135,672
Total Unrealized Losses	1,130	2,516
US States and Political Subdivisions Debt Securities [Member]
Note 3 - Investment Securities Available-for-Sale (Details) - Securities in Continuous Unrealized Loss Position [Line Items]
Less than 12 Months Estimated Fair Value	12,073	4,974
Less than 12 Months Unrealized Losses	95	14
12 Months or Greater Estimated Fair Value		10,915
12 Months or Greater Unrealized Losses		107
Total Estimated Fair Value	12,073	15,889
Total Unrealized Losses	95	$ 121
Corporate Debt Securities [Member]
Note 3 - Investment Securities Available-for-Sale (Details) - Securities in Continuous Unrealized Loss Position [Line Items]
Less than 12 Months Estimated Fair Value	15,018
Less than 12 Months Unrealized Losses	78
Total Estimated Fair Value	15,018
Total Unrealized Losses	$ 78

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Note 7 - Other Real Estate Owned (Details) - Activity Within Other Real Estate Owned - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Activity Within Other Real Estate Owned [Abstract]
Balance beginning of period	$ 10,715	$ 8,809	$ 13,224	$ 9,225
Real estate acquired from borrowers	225	85	1,725	330
Valuation allowance		(51)	(750)	(505)
Properties sold	(988)	(220)	(4,247)	(427)
Balance end of period	$ 9,952	$ 8,623	$ 9,952	$ 8,623

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Note 13 - Subsequent Event

9 Months Ended

Sep. 30, 2015

Subsequent Events [Abstract]

Subsequent Events [Text Block]

Note 13.  Subsequent Event

On November 2, 2015, Eagle Bancorp, Inc. (the “Company”), redeemed all of the 56,600 shares of the Company’s Senior Non-Cumulative Perpetual Preferred Stock, Series B, liquidation amount $1,000 per share (the “Series B Preferred Stock”) issued to the United States Secretary of the Treasury (the “Treasury”) in July 2011 pursuant to the Small Business Lending Fund program (“SBLF”), and all of the 15,300 shares of the Company’s Senior Non-Cumulative Perpetual Preferred Stock, Series C, liquidation amount $1,000 per share (“Series C Preferred Stock”), issued in October 2014 in connection with the Company’s acquisition of Virginia Heritage Bank (“VHB”) in exchange for VHB’s SBLF preferred stock originally issued to the Treasury in June 2011. The aggregate redemption price of the Series B Preferred Stock and Series C Preferred Stock was approximately $71.96 million, including dividends accrued but unpaid through, but not including the redemption date.

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Note 7 - Other Real Estate Owned (Tables)

9 Months Ended

Sep. 30, 2015

Disclosure Text Block [Abstract]

Other Real Estate, Roll Forward [Table Text Block]

	Three Months Ended						Nine Months Ended
(dollars in thousands)	September 30, 2015			September 30, 2014			September 30, 2015			September 30, 2014
Balance beginning of period	$	10,715		$	8,809		$	13,224		$	9,225
Real estate acquired from borrowers		225			85			1,725			330
Valuation allowance		-			(51	)		(750	)		(505	)
Properties sold		(988	)		(220	)		(4,247	)		(427	)
Balance end of period	$	9,952		$	8,623		$	9,952		$	8,623

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Note 6 - Interest Rate Swap Derivatives (Details) - Pre-tax Net Gains (Losses) of the Company’s Cash Flow Hedges - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2015
Derivative Instruments, Gain (Loss) [Line Items]
Ineffective portion recognized in income on derivatives	$ 0
Interest Rate Swap 1 [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of pre-tax gain {loss} recognized in OCI		$ (996,000)
Effective portion amount of gain (loss)
Ineffective portion recognized in income on derivatives
Interest Rate Swap 2 [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of pre-tax gain {loss} recognized in OCI		$ (1,435,000)
Interest Rate Swap 3 [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of pre-tax gain {loss} recognized in OCI		$ (1,014,000)

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Note 5 - Loans and Allowance for Credit Losses (Details) - Loans and Leases by Credit Quality Indicator - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014	Sep. 30, 2014
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable Net of Deferred Income	$ 4,776,965	$ 4,312,399	$ 3,432,548
Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable Net of Deferred Income	4,687,145	4,202,744	3,328,827
Watch and Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable Net of Deferred Income	49,907	64,345	59,948
Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable Net of Deferred Income	39,913	45,310	43,773
Commercial Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable Net of Deferred Income	1,007,659	916,226	798,489
Commercial Portfolio Segment [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable Net of Deferred Income	977,165	875,102	761,502
Commercial Portfolio Segment [Member] | Watch and Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable Net of Deferred Income	17,625	23,512	19,202
Commercial Portfolio Segment [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable Net of Deferred Income	12,869	17,612	17,785
Income Producing Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable Net of Deferred Income	2,022,950	1,703,172	1,382,839
Income Producing Portfolio Segment [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable Net of Deferred Income	1,999,509	1,679,101	1,362,060
Income Producing Portfolio Segment [Member] | Watch and Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable Net of Deferred Income	16,564	18,962	18,069
Income Producing Portfolio Segment [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable Net of Deferred Income	6,877	5,109	2,710
Owner Occupied Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable Net of Deferred Income	489,657	461,581	337,422
Owner Occupied Portfolio Segment [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable Net of Deferred Income	479,843	445,013	320,960
Owner Occupied Portfolio Segment [Member] | Watch and Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable Net of Deferred Income	8,024	9,677	11,408
Owner Occupied Portfolio Segment [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable Net of Deferred Income	1,790	6,891	5,054
Residential Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable Net of Deferred Income	147,720	148,018	126,263
Residential Portfolio Segment [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable Net of Deferred Income	146,992	147,262	125,363
Residential Portfolio Segment [Member] | Watch and Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable Net of Deferred Income	728	756	900
Construction Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable Net of Deferred Income	987,752	851,464	676,582
Construction Portfolio Segment [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable Net of Deferred Income	964,854	827,503	650,679
Construction Portfolio Segment [Member] | Watch and Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable Net of Deferred Income	5,254	9,720	8,424
Construction Portfolio Segment [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable Net of Deferred Income	17,644	14,241	17,479
Home Equity Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable Net of Deferred Income	115,346	122,536	107,291
Home Equity Portfolio Segment [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable Net of Deferred Income	112,978	119,420	104,601
Home Equity Portfolio Segment [Member] | Watch and Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable Net of Deferred Income	1,707	1,718	1,945
Home Equity Portfolio Segment [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable Net of Deferred Income	661	1,398	745
Other Consumer Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable Net of Deferred Income	5,881	109,402	3,662
Other Consumer Portfolio Segment [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable Net of Deferred Income	5,804	109,343	$ 3,662
Other Consumer Portfolio Segment [Member] | Watch and Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable Net of Deferred Income	5
Other Consumer Portfolio Segment [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable Net of Deferred Income	$ 72	$ 59

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Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Net Income	$ 21,463	$ 14,088	$ 61,819	$ 39,531
Other comprehensive income (loss), net of tax:
Unrealized (loss) gain on securities available for sale	2,107	(326)	1,995	4,837
Unrealized loss on derivatives	(3,976)		(2,067)
Reclassification adjustment for net gains included in net income	(36)		(1,334)	(6)
Net change other comprehensive income (loss)	(1,905)	(326)	(1,406)	4,831
Comprehensive Income	$ 19,558	$ 13,762	$ 60,413	$ 44,362

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Note 2 - Cash and Due from Banks

9 Months Ended

Sep. 30, 2015

Cash and Cash Equivalents [Abstract]

Cash and Cash Equivalents Disclosure [Text Block]

Note 2. Cash and Due from Banks

Regulation D of the Federal Reserve Act requires that banks maintain noninterest reserve balances with the Federal Reserve Bank based principally on the type and amount of their deposits. During 2015, the Bank maintained balances at the Federal Reserve sufficient to meet reserve requirements, as well as significant excess reserves. Late in 2008, the Federal Reserve in connection with the Emergency Economic Stabilization Act of 2008 began paying a nominal amount of interest on balances held, which interest on excess reserves was increased under provisions of the Dodd Frank Wall Street Reform and Consumer Protection Act passed in July 2010.

Additionally, the Bank maintains interest-bearing balances with the Federal Home Loan Bank of Atlanta and noninterest bearing balances with six domestic correspondent banks as compensation for services they provide to the Bank.

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Note 10 - Other Comprehensive Income (Details) - Components of Other Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Components of Other Comprehensive Income (Loss) [Abstract]
Net unrealized gain (loss) on securities available-for-sale, before tax	$ 3,512	$ (543)	$ 3,325	$ 8,062
Net unrealized gain (loss) on securities available-for-sale, tax effect	1,405	(217)	1,330	3,225
Net unrealized gain (loss) on securities available-for-sale, net of tax	2,107	(326)	1,995	4,837
Net unrealized gain on derivatives-before tax	(6,627)		(3,445)
Net unrealized gain on derivatives-tax effect	(2,651)		(1,378)
Net unrealized gain on derivatives-net of tax	(3,976)		(2,067)
Less: Reclassification adjustment for net gains included in net income-before tax	(60)		(2,224)	(10)
Less: Reclassification adjustment for net gains included in net income-tax effect	(24)		(890)	(4)
Less: Reclassification adjustment for net gains included in net income-net of tax	(36)		(1,334)	(6)
Other Comprehensive Income (Loss), before tax	(3,175)	(543)	(2,344)	8,052
Other Comprehensive Income (Loss), tax effect	(1,270)	(217)	(938)	3,221
Other Comprehensive Income (Loss), net of tax	$ (1,905)	$ (326)	$ (1,406)	$ 4,831

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Note 8 - Net Income Per Common Share (Tables)

9 Months Ended

Sep. 30, 2015

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars and shares in thousands, except per share data)	2015		2014		2015		2014
Basic:
Net income available to common shareholders	$	21,283	$	13,937	$	61,280	$	39,097
Average common shares outstanding		33,401		26,024		32,625		25,978
Basic net income per common share	$	0.64	$	0.54	$	1.88	$	1.50
Diluted:
Net income available to common shareholders	$	21,283	$	13,937	$	61,280	$	39,097
Average common shares outstanding		33,401		26,024		32,625		25,978
Adjustment for common share equivalents		625		630		653		640
Average common shares outstanding-diluted		34,026		26,654		33,278		26,618
Diluted net income per common share	$	0.63	$	0.52	$	1.84	$	1.47
Anti-dilutive shares		-		21		11		21

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Note 5 - Loans and Allowance for Credit Losses (Details) - Loans - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014	Sep. 30, 2014
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, amount	$ 4,776,965	$ 4,312,399	$ 3,432,548
Loans, percent	100.00%	100.00%	100.00%
Less: Allowance for Credit Losses	$ (50,320)	$ (46,075)	$ (44,954)
Net loans	4,726,645	4,266,324	3,387,594
Commercial Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, amount	$ 1,007,659	$ 916,226	$ 798,489
Loans, percent	21.00%	21.00%	23.00%
Less: Allowance for Credit Losses	$ (11,640)		$ (13,173)
Income Producing Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, amount	$ 2,022,950	$ 1,703,172	$ 1,382,839
Loans, percent	42.00%	40.00%	41.00%
Less: Allowance for Credit Losses	$ (13,715)		$ (11,201)
Owner Occupied Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, amount	$ 489,657	$ 461,581	$ 337,422
Loans, percent	10.00%	11.00%	10.00%
Less: Allowance for Credit Losses	$ (3,100)		$ (3,315)
Residential Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, amount	$ 147,720	$ 148,018	$ 126,263
Loans, percent	3.00%	3.00%	4.00%
Less: Allowance for Credit Losses	$ (1,066)		$ (980)
Construction Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, amount	987,752	$ 851,464	676,582
Less: Allowance for Credit Losses	(18,924)		(14,636)
Construction Portfolio Segment [Member] | Commercial and Residential Loan [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, amount	$ 927,265	$ 793,432	$ 634,736
Loans, percent	20.00%	18.00%	18.00%
Construction Portfolio Segment [Member] | Commercial and Industrial Loan [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, amount	$ 60,487	$ 58,032	$ 41,846
Loans, percent	1.00%	1.00%	1.00%
Home Equity Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, amount	$ 115,346	$ 122,536	$ 107,291
Loans, percent	3.00%	3.00%	3.00%
Less: Allowance for Credit Losses	$ (1,606)		$ (1,362)
Other Consumer Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, amount	5,881	$ 109,402	3,662
Loans, percent		3.00%
Less: Allowance for Credit Losses	$ (269)		$ (287)

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Note 12 - Supplemental Executive Retirement Plan

9 Months Ended

Sep. 30, 2015

Compensation and Retirement Disclosure [Abstract]

Pension and Other Postretirement Benefits Disclosure [Text Block]

Note 12.  Supplemental Executive Retirement Plan

The Bank has entered into Supplemental Executive Retirement and Death Benefit Agreements (the “SERP Agreements”) with certain of the Bank’s executive officers, which upon the executive’s retirement, will provide for a stated monthly payment for such executive’s lifetime, subject to certain death benefits described below. The retirement benefit is computed as a percentage of each executive’s projected average base salary over the five years preceding retirement, assuming retirement at age 67. The SERP Agreements provide that (a) the benefits vest ratably over six years of service to the Bank, with the executive receiving credit for years of service prior to entering into the SERP Agreement, (b) death, disability and change-in-control shall result in immediate vesting, and (c) the monthly amount will be reduced if retirement occurs earlier than age 67 for any reason other than death, disability or change-in-control. The SERP Agreements further provide for a death benefit in the event the retired executive dies prior to receiving 180 monthly installments, paid either in a lump sum payment or continued monthly installment payments, such that the executive’s beneficiary has received payment(s) sufficient to equate to a cumulative 180 monthly installments.

The SERP Agreements are unfunded arrangements maintained primarily to provide supplemental retirement benefits and comply with Section 409A of the Internal Revenue Code. The Bank financed the retirement benefits by purchasing fixed annuity contracts with four insurance carriers totaling $11.4 million that have been designed to provide a future source of funds for the lifetime retirement benefits of the SERP Agreements. The primary impetus for utilizing fixed annuities is a substantial savings in compensation expenses for the Bank as opposed to a traditional SERP Agreement. The cash surrender value of the annuity contracts was $12.1 million at September 30, 2015 and is included in other assets on the consolidated balance sheet. For the three and nine months ended September 30, 2015, the Company recorded benefit expense accruals of $255 thousand and $764 thousand for this post retirement benefit. 

Upon death of an executive, the annuity contract related to such executive terminates. The Bank has purchased additional bank owned life insurance contracts, which would effectively finance payments (up to a 15 year certain amount) to the executives’ named beneficiaries.