10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended: June 30, 2016

o 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:001-15781

BERKSHIRE HILLS BANCORP, INC.

(Exact name of registrant as specified in its charter)

Delaware	04-3510455
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
24 North Street, Pittsfield, Massachusetts	01201
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (413) 443-5601

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 ý  No o

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 ý  No o

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 the definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  (Check one)

Large Accelerated Filer ý        Accelerated Filer o       Non-Accelerated Filer o      Smaller Reporting Company o

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

The Registrant had 31,139,213 shares of common stock, par value $0.01 per share, outstanding as of August 4, 2016.

BERKSHIRE HILLS BANCORP, INC.

FORM 10-Q

INDEX 

				Page
PART I.	FINANCIAL INFORMATION
Item 1.	Consolidated Financial Statements (unaudited)
	Consolidated Balance Sheets as of June 30, 2016 and December 31, 2015			4
	Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2016 and 2015			5
	Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2016 and 2015			6
	Consolidated Statements of Changes in Shareholders’ Equity for the Six Months Ended June 30, 2016 and 2015			7
	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2016 and 2015			8
	Notes to Consolidated Financial Statements
		Note 1	Basis of Presentation	10
		Note 2	Acquisition	14
		Note 3	Trading Security	16
		Note 4	Securities Available for Sale and Held to Maturity	17
		Note 5	Loans	22
		Note 6	Loan Loss Allowance	35
		Note 7	Deposits	41
		Note 8	Borrowed Funds	41
		Note 9	Capital Ratios and Shareholders’ Equity	43
		Note 10	Earnings per Share	48
		Note 11	Stock-Based Compensation Plans	48
		Note 12	Derivative Financial Instruments and Hedging Activities	49
		Note 13	Fair Value Measurements	56
		Note 14	Net Interest Income after Provision for Loan Losses	66
		Note 15	Subsequent Events	66
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations			67
	Selected Financial Data			69
	Average Balances and Average Yields/Rates			71
	Non-GAAP Financial Measures			73
Item 3.	Quantitative and Qualitative Disclosures about Market Risk			88
Item 4.	Controls and Procedures			90

2

PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	91
Item 1A.	Risk Factors	91
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	93
Item 3.	Defaults Upon Senior Securities	93
Item 4.	Mine Safety Disclosures	93
Item 5.	Other Information	93
Item 6.	Exhibits	94
Signatures		95

3

PART I

ITEM 1.  CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

BERKSHIRE HILLS BANCORP, INC.

CONSOLIDATED BALANCE SHEETS

	June 30, 2016			December 31, 2015
(In thousands, except share data)
Assets
Cash and due from banks	$	58,332		$	72,918
Short-term investments	16,247			30,644
Total cash and cash equivalents	74,579			103,562
Trading security, at fair value	14,479			14,189
Securities available for sale, at fair value	1,073,370			1,154,457
Securities held to maturity (fair values of $141,544 and $136,904)	132,010			131,652
Federal Home Loan Bank stock and other restricted securities	68,242			71,018
Total securities	1,288,101			1,371,316
Loans held for sale	22,450			13,191
Commercial real estate	2,237,582			2,059,767
Commercial and industrial loans	1,034,559			1,048,263
Residential mortgages	1,843,600			1,815,035
Consumer loans	884,560			802,171
Total loans	6,000,301			5,725,236
Less: Allowance for loan losses	(41,397		)	(39,308		)
Net loans	5,958,904			5,685,928
Premises and equipment, net	86,274			88,072
Other real estate owned	595			1,725
Goodwill	339,929			323,943
Other intangible assets	9,057			10,664
Cash surrender value of bank-owned life insurance policies	127,000			125,233
Deferred tax assets, net	32,945			42,526
Other assets	103,825			64,926
Total assets	$	8,043,659		$	7,831,086
Liabilities
Demand deposits	$	1,050,220		$	1,081,860
NOW deposits	489,734			510,807
Money market deposits	1,415,041			1,408,107
Savings deposits	611,627			601,761
Time deposits	2,090,102			1,986,600
Total deposits	5,656,724			5,589,135
Short-term debt	1,110,320			1,071,200
Long-term Federal Home Loan Bank advances	120,844			103,135
Subordinated borrowings	89,072			88,983
Total borrowings	1,320,236			1,263,318
Other liabilities	143,279			91,444
Total liabilities	$	7,120,239		$	6,943,897
(continued)
Shareholders’ equity
Common stock ($.01 par value; 50,000,000 shares authorized and 32,321,962 shares issued and 31,156,292 shares outstanding in 2016; 32,321,962 shares issued and 30,973,986 shares outstanding in 2015)	322			322
Additional paid-in capital	744,810			742,619
Unearned compensation	(8,798		)	(6,997		)
Retained earnings	203,382			183,885
Accumulated other comprehensive income	10,213			(3,305		)
Treasury stock, at cost (1,056,739 shares in 2016 and 1,179,045 shares in 2015)	(26,509		)	(29,335		)
Total Shareholders’ equity	923,420			887,189
Total liabilities and Shareholders’ equity	$	8,043,659		$	7,831,086

The accompanying notes are an integral part of these consolidated financial statements.

4

BERKSHIRE HILLS BANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME 

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands, except per share data)	2016			2015			2016			2015
Interest and dividend income
Loans	$	59,703		$	51,504		$	118,145		$	95,949
Securities and other	9,315			8,899			19,349			17,205
Total interest and dividend income	69,018			60,403			137,494			113,154
Interest expense
Deposits	7,378			5,292			14,537			10,241
Borrowings	4,199			2,474			7,819			4,783
Total interest expense	11,577			7,766			22,356			15,024
Net interest income	57,441			52,637			115,138			98,130
Non-interest income
Loan related income	2,898			2,783			5,944			4,066
Mortgage banking income	1,335			1,546			2,156			2,799
Deposit related fees	6,291			6,442			12,400			12,119
Insurance commissions and fees	2,660			2,486			5,553			5,453
Wealth management fees	2,235			2,397			4,737			5,000
Total fee income	15,419			15,654			30,790			29,437
Other	(851		)	(1,258		)	(628		)	(2,513		)
(Loss) gain on sale of securities, net	(13		)	2,384			23			2,418
Total non-interest income	14,555			16,780			30,185			29,342
Total net revenue	71,996			69,417			145,323			127,472
Provision for loan losses	4,522			4,204			8,528			8,055
Non-interest expense
Compensation and benefits	24,664			24,503			50,378			46,314
Occupancy and equipment	6,560			7,243			13,250			14,351
Technology and communications	4,814			4,090			9,671			7,683
Marketing and promotion	737			800			1,410			1,513
Professional services	1,509			1,375			2,789			2,647
FDIC premiums and assessments	1,203			1,143			2,436			2,272
Other real estate owned and foreclosures	393			251			656			502
Amortization of intangible assets	787			934			1,606			1,835
Acquisition, restructuring and conversion related expenses	878			8,711			1,658			13,132
Other	4,723			4,975			9,514			8,924
Total non-interest expense	46,268			54,025			93,368			99,173
Income before income taxes	21,206			11,188			43,427			20,244
Income tax expense	5,249			1,144			11,469			1,441
Net income	$	15,957		$	10,044		$	31,958		$	18,803
Earnings per share:
Basic	$	0.52		$	0.35		$	1.05		$	0.71
Diluted	$	0.52		$	0.35		$	1.04		$	0.70
Weighted average common shares outstanding:
Basic	30,605			28,301			30,561			26,557
Diluted	30,765			28,461			30,725			26,713

The accompanying notes are an integral part of these consolidated financial statements.

5

BERKSHIRE HILLS BANCORP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2016			2015			2016			2015
Net income	$	15,957		$	10,044		$	31,958		$	18,803
Other comprehensive income, before tax:
Changes in unrealized gain on securities available-for-sale	9,586			(16,071		)	27,293			(6,734		)
Changes in unrealized loss on derivative hedges	(884		)	784			(5,390		)	(3,117		)
Changes in unrealized loss on pension	—			65			—			(1,466		)
Income taxes related to other comprehensive income:
Changes in unrealized gain on securities available-for-sale	(3,691		)	6,100			(10,548		)	2,495
Changes in unrealized loss on derivative hedges	355			(316		)	2,163			1,256
Changes in unrealized loss on pension	—			(26		)	—			591
Total other comprehensive income (loss)	5,366			(9,464		)	13,518			(6,975		)
Total comprehensive income	$	21,323		$	580		$	45,476		$	11,828

The accompanying notes are an integral part of these consolidated financial statements.

6

BERKSHIRE HILLS BANCORP, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

					Additional									Accumulated other
	Common stock				paid-in			Unearned			Retained			comprehensive			Treasury
(In thousands)	Shares		Amount		capital			compensation			earnings			(loss) income			stock			Total
Balance at December 31, 2014	25,183		$	265	$	585,289		$	(6,147	)	$	156,446		$	6,579		$	(33,145	)	$	709,287
Comprehensive income:
Net income	—		—		—			—			18,803			—			—			18,803
Other comprehensive loss	—		—		—			—			—			(6,975		)	—			(6,975		)
Total comprehensive income																				11,828
Acquisition of Hampden Bancorp, Inc	4,186		42		114,562			—			—			—			—			114,604
Cash dividends declared ($0.38 per share)	—		—		—			—			(10,440		)	—			—			(10,440		)
Treasury stock purchased	—		—		—			—			—			—			—			—
Forfeited shares	(11	)	—		28			254			—			—			(282		)	—
Exercise of stock options	11		—		—			—			(165		)	—			281			116
Restricted stock grants	174		—		283			(4,579		)	—			—			4,296			—
Stock-based compensation	—		—		—			2,252			—			—			—			2,252
Net tax benefit related to stock-based compensation	—		—		26			—			—			—			—			26
Other, net	(22	)	—		5			—			—			—			(527		)	(522		)
Balance at June 30, 2015	29,521		$	307	$	700,193		$	(8,220	)	$	164,644		$	(396	)	$	(29,377	)	$	827,151
Balance at December 31, 2015	30,974		$	322	$	742,619		$	(6,997	)	$	183,885		$	(3,305	)	$	(29,335	)	$	887,189
Comprehensive income:
Net income	—		—		—			—			31,958			—			—			31,958
Other comprehensive income	—		—		—			—			—			13,518			—			13,518
Total comprehensive income																				45,476
Acquisition of 44 Business Capital	45		—		—			—			—			—			1,217			1,217
Cash dividends declared ($0.40 per share)	—		—		—			—			(12,442		)	—			—			(12,442		)
Treasury stock adjustment (2)	—		—		1,645			—			—			—			(1,645		)	—
Forfeited shares	(22	)	—		68			526			—			—			(594		)	—
Exercise of stock options	2		—		—			—			(19		)	—			55			36
Restricted stock grants	180		—		496			(4,923		)	—			—			4,427			—
Stock-based compensation	—		—		—			2,596			—			—			—			2,596
Net tax benefit related to stock-based compensation	—		—		(1		)	—			—			—			—			(1		)
Other, net	(23	)	—		(17		)	—			—			—			(634		)	(651		)
June 30, 2016 (1)	31,156		$	322	$	744,810		$	(8,798	)	$	203,382		$	10,213		$	(26,509	)	$	923,420

(1) The Company's common stock includes the elimination of $2.9 million (108,931 shares) of Berkshire Hills Bancorp stock held by a subsidiary.

(2) Treasury stock adjustment represents the sale of 60,000 shares of Berkshire Hills Bancorp stock held by the Company's subsidiary.

The accompanying notes are an integral part of these consolidated financial statements.

7

BERKSHIRE HILLS BANCORP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Six Months Ended June 30,
(In thousands)	2016			2015
Cash flows from operating activities:
Net income	$	31,958		$	18,803
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	8,528			8,055
Net amortization of securities	2,003			863
Change in unamortized net loan costs and premiums	(3,268		)	836
Premises and equipment depreciation and amortization expense	4,237			4,282
Stock-based compensation expense	2,596			2,252
Accretion of purchase accounting entries, net	(4,801		)	(3,071		)
Amortization of other intangibles	1,606			1,835
Write down of other real estate owned	365			75
Excess tax loss from stock-based payment arrangements	(105		)	(26		)
Income from cash surrender value of bank-owned life insurance policies	(2,025		)	(1,535		)
Gain on sales of securities, net	(23		)	(2,418		)
Net (increase) in loans held for sale	(9,259		)	(28,102		)
Loss on disposition of assets	15			2,084
Loss on sale of real estate	57			400
Amortization of interest in tax-advantaged projects	2,929			5,748
Net change in other	(5,134		)	(8,384		)
Net cash provided by operating activities	29,679			1,697
Cash flows from investing activities:
Net decrease in trading security	296			282
Proceeds from sales of securities available for sale	187,519			22,504
Proceeds from maturities, calls and prepayments of securities available for sale	83,883			94,561
Purchases of securities available for sale	(164,943		)	(174,992		)
Proceeds from maturities, calls and prepayments of securities held to maturity	4,288			1,875
Purchases of securities held to maturity	(4,786		)	(45,520		)
Net change in loans	(250,002		)	(126,806		)
Proceeds from surrender of bank-owned life insurance	258			431
Proceeds from sale of Federal Home Loan Bank stock	11,578			163
Purchase of Federal Home Loan Bank stock	(8,803		)	(10,706		)
Net investment in limited partnership tax credits	(4,122		)	(2,500		)
Proceeds from the sale of premises and equipment	226			541
Purchase of premises and equipment, net	(2,839		)	(3,070		)
Acquisitions, net of cash (paid) acquired	(55,542		)	83,134
Proceeds from sale of other real estate	933			1,476
Net cash used in investing activities	(202,056		)	(158,627		)
(continued)

8

	Six Months Ended June 30,
(In thousands)	2016			2015
Cash flows from financing activities:
Net increase (decrease) in deposits	98,604			206,354
Proceeds from Federal Home Loan Bank advances and other borrowings	4,449,120			3,896,000
Repayments of Federal Home Loan Bank advances and other borrowings	(4,391,925		)	(3,801,362		)
Exercise of stock options	37			116
Excess tax loss from stock-based payment arrangements	—			26
Common stock cash dividends paid	(12,442		)	(10,440		)
Net cash provided by financing activities	143,394			290,694
Net change in cash and cash equivalents	(28,983		)	133,764
Cash and cash equivalents at beginning of year	103,562			71,754
Cash and cash equivalents at end of year	$	74,579		$	205,518
Supplemental cash flow information:
Interest paid on deposits	$	14,573		$	10,290
Interest paid on borrowed funds	7,497			4,555
Income taxes paid, net	7,278			324
Acquisition of non-cash assets and liabilities:
Assets acquired	56,976			730,868
Liabilities assumed	(108		)	(611,601		)
Other non-cash changes:
Other net comprehensive income	13,518			(6,975		)
Real estate owned acquired in settlement of loans	225			460

The accompanying notes are an integral part of these consolidated financial statements.

9

NOTE 1.           BASIS OF PRESENTATION

The consolidated financial statements (the “financial statements”) of Berkshire Hills Bancorp, Inc. and its subsidiaries (the “Company” or “Berkshire”) have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The Company is a Delaware corporation and the holding company for Berkshire Bank (the “Bank”), a Massachusetts-chartered trust company headquartered in Pittsfield, Massachusetts, and Berkshire Insurance Group, Inc. (“Berkshire Insurance Group” or “BIG”). These financial statements include the accounts of the Company, its wholly-owned subsidiaries and the Bank’s consolidated subsidiaries. In consolidation, all significant intercompany accounts and transactions are eliminated. The results of operations of companies or assets acquired are included only from the dates of acquisition. All material wholly-owned and majority-owned subsidiaries are consolidated unless GAAP requires otherwise.

In addition, these interim financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X, and accordingly, certain information and footnote disclosures normally included in financial statements prepared according to U.S. GAAP have been omitted.

The results for any interim period are not necessarily indicative of results for the full year. These consolidated financial statements should be read in conjunction with the audited financial statements and note disclosures for Berkshire Hills Bancorp, Inc. (the “Company”) previously filed with the Securities and Exchange Commission in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. In management's opinion, all adjustments necessary for a fair statement are reflected in the interim periods presented.

Recently Adopted Accounting Principles

Effective January 1, 2016, the following new accounting guidance was adopted by the Company:

• ASU No. 2015-02, Consolidation (Topic 810) - Amendments to the Consolidation Analysis;

• ASU No. 2015-03, Interest-Imputation of Interest (Subtopic 835-30) - Simplifying the Presentation of Debt Issuance Costs;

• ASU No. 2015-05, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement; and

• ASU No. 2015-16, Business Combinations (Topic 805) - Simplifying the Accounting for Measurement - Period Adjustments.

The adoption of these accounting standards did not have a material impact on the Company's financial statements.

In March 2016, the FASB issued ASU No. 2016-09, “Improvement to Employee Share-Based Payment Accounting”. This ASU contains targeted amendments to the accounting for shared based payment transactions, including income tax consequences for awards, classification of awards as either equity or liabilities, and classification of activity on the statement of cash flows. Specifically, some of the requirements under the amendments include: (1) excess tax benefits and/or tax deficiencies, determined as the difference between compensation cost recognized for financial reporting purposes and the deduction for tax, be recognized in the income statement as income tax expense or benefit in the period in which they occur, removing historical equity treatment; (2) excess tax benefits are no longer separately classified as a financing activity but rather should be classified with other income tax cash flows as an operating activity on the statement of cash flows; (3) cash paid by an employer when withholding shares for tax withholding purposes should be classified as a financing activity. Additionally, regarding forfeitures, this guidance permits a company to make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest (current GAAP) or account for forfeitures when they occur. ASU No. 2016-09 is effective for annual periods beginning after December 15, 2016. The Company adopted ASU No. 2016-09 in April 2016 and the adoption of this accounting standard did not have a material impact on the Company's consolidated financial statements. The Company chose a modified retrospective approach and a policy election to account for forfeitures when they occur. This change resulted in a cumulative adjustment immaterial to all periods presented.

10

Future Application of Accounting Pronouncements

In May 2014, the FASB issued ASU No. 2014-09 related to the recognition of revenue from contracts with customers. The new revenue pronouncement creates a single source of revenue guidance for all companies in all industries and is more principles based than current revenue guidance. The pronouncement provides a five-step model for a company to recognize revenue when it transfers control of goods or services to customers at an amount that reflects the consideration to which it expects to be entitled in exchange for those goods or services. The five steps are (1) identify the contract with the customer, (2) identify the separate performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the separate performance obligations and (5) recognize revenue when each performance obligation is satisfied. The standard is effective for public entities for interim and annual reporting periods beginning after December 15, 2016; early adoption is not permitted. However, in August 2015, Accounting Standards Update No. 2015-14, “Deferral of the Effective Date” (“ASU 2015-14”) was issued and delayed the effective date of ASU 2014-09 to annual and interim periods in fiscal years beginning after December 15, 2017. Early adoption is permitted, but not before the original effective date (i.e., interim and annual reporting periods beginning after December 15, 2016). For financial reporting purposes, the standard allows for either full retrospective adoption, meaning the standard is applied to all of the periods presented, or modified retrospective adoption, meaning the standard is applied only to the most current period presented in the financial statements with the cumulative effect of initially applying the standard recognized at the date of initial application.

In March, April and May 2016, the FASB issued ASU No. 2016-08, “Principal versus Agent Considerations,” ASU No. 2016-10, “Identifying Performance Obligations and Licensing,” and ASU 2016-12, “Narrow-Scope Improvements and Practical Expedients,” respectfully. The updates are not intended to change the core principles of the standard; however, they attempt to clarify important aspects of the guidance and improve its operability. The amendments have the same effective date and transition requirements as the new revenue standard. The Company is currently evaluating the provisions of ASU No. 2014-09, and will be closely monitoring developments and additional guidance to determine the potential impact the new standard will have on the Company's consolidated financial statements.

In January 2016, the FASB issued ASU No. 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities.” This ASU requires an entity to: i) measure equity investments at fair value through net income, with certain exceptions; (ii) present in other comprehensive income the changes in instrument-specific credit risk for financial liabilities measured using the fair value option; (iii) present financial assets and financial liabilities by measurement category and form of financial asset; (iv) calculate the fair value of financial instruments for disclosure purposes based on an exit price and; (v) assess a valuation allowance on deferred tax assets related to unrealized losses of AFS debt securities in combination with other deferred tax assets. The guidance provides an election to subsequently measure certain nonmarketable equity investments at cost less any impairment and adjusted for certain observable price changes. The guidance also requires a qualitative impairment assessment of such equity investments and amends certain fair value disclosure requirements. The guidance is effective for annual periods beginning after December 15, 2017. Early adoption is only permitted for the provision related to instrument specific credit risk. The Company is currently evaluating the impact of the new standard on the Company's consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, “Leases”. The new pronouncement improves the transparency and comparability of financial reporting around leasing transactions and more closely aligns accounting for leases with the recently issued International Financial Reporting Standard.  The pronouncement affects all entities that are participants to leasing agreements. From a lessee accounting perspective, the ASU requires a lessee to recognize assets and liabilities on the balance sheet for operating leases and changes many key definitions, including the definition of a lease. The ASU includes a short-term lease exception for leases with a term of twelve months or less, in which a lessee can make an accounting policy election not to recognize lease assets and lease liabilities. Lessees will continue to differentiate between finance leases (previously referred to as capital leases) and operating leases, using classification criteria that are substantially similar to the previous guidance. For lessees, the recognition, measurement, and presentation of expenses and cash flows arising from a lease have not significantly changed from previous GAAP. From a lessor accounting perspective, the guidance is largely unchanged, except for targeted improvements to align with new terminology under lessee accounting and with the

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updated revenue recognition guidance in Topic 606. For sale-leaseback transactions, for a sale to occur the transfer must meet the sale criteria under the new revenue standard, ASC 606. Entities will not be required to reassess transactions previously accounted under then existing guidance.

Additionally, the ASU includes additional quantitative and qualitative disclosures required by lessees and lessors to help users better understand the amount, timing, and uncertainty of cash flows arising from leases. ASU No. 2016-02 is effective for fiscal years beginning after December 31, 2018, and interim periods within those fiscal years. Lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply as well as transition guidance specific to nonstandard leasing transactions. The Company is currently evaluating the provision of the ASU No. 2016-02 to determine the potential impact the new standard will have on the the Company's consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-05, “Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships”. This ASU clarifies that changes in the counterparty to a derivative instrument designated as a hedge do notalone require it to be de-designated and therefore discontinue the application of hedge accounting. Companies are still required to evaluate whether it is probable that a counterparty will perform under the contract as part of the ongoing effectiveness assessment for hedge accounting. The new guidance is effective for annual periods beginning after December 15, 2016 and entities may adopt on a prospective or modified retrospective basis. The adoption of this pronouncement is not expected to have a material impact on the Company's consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-06, “Contingent Put and Call Options in Debt Instruments” clarifying the assessment of whether contingent call (put) options that can accelerate the payment of principal on debt instruments are clearly and closely related to the economic characteristics and risks of their debt hosts, a criteria in assessing whether to bifurcate an embedded derivative.  The new pronouncement clarifies the exercise contingency and the event triggering the contingency does not need to be evaluated in the clearly and closely analysis relative to interest rates or credit risks. Rather, the call or put would be evaluated as a derivative regardless of the exercise contingency. Further, if an entity is no longer required to bifurcate aput or call option per the new guidance, the entity has a one-time option to irrevocably elect to measure that debt instrument in its entirety at fair value with changes in fair value recognized in earnings. ASU No. 2016-06 is effective for annual periods beginning after December 15, 2016 and early adoption is permitted. The ASU should be applied using the modified retrospective basis to existing instruments as of the beginning of the annual period of adoption. The adoption of this pronouncement is not expected to have a material impact on the Company's consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-07 “Simplifying the Transition to the Equity Method of Accounting” which eliminates the requirement to retroactively adjust an investment that becomes subject to the equity method of accounting as a result of an increase ownership interest or degree of influence.  Alternatively, an investor entity adds the cost of acquiring the additional interest in the investee to the current basis of the investor’s previously held interest and adopts the equity method of accounting prospectively as of the qualifying date; no retroactive adjustment is required. Additionally, ASU No. 2016-07 specifies that when an available-for-sale equity security becomes qualified for the equity method of accounting, a company should recognize the unrealized holding gain or loss in accumulated other comprehensive income through earnings at the date the investment becomes qualified for use of the equity method. This guidance is effective for all entities for annual periods beginning after December 15, 2016, with early adoption permitted on a prospective basis. The adoption of this pronouncement is not expected to have a material impact on the Company's consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, “Measurement of Credit Losses on Financial Instruments.” This ASU improves financial reporting by requiring timelier recording of credit losses on loans and other financial instruments. The ASU requires companies to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Forward-looking information will now be used in credit loss estimates. The ASU requires enhanced disclosures to provide better understanding surrounding significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of a company’s portfolio. These disclosures include qualitative

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and quantitative requirements that provide additional information about the amounts recorded in the financial statements. Additionally, the ASU amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. Most debt instruments will require a cumulative-effect adjustment to retained earnings on the statement of financial position as of the beginning of the first reporting period in which the guidance is adopted (modified retrospective approach). However, there is instrument-specific transition guidance. ASU No. 2016-13 is effective for interim and annual periods beginning after December 15, 2019. Early application will be permitted for interim and annual periods beginning after December 15, 2018. The Company is evaluating the provisions of ASU No. 2016-13, and will closely monitor developments and additional guidance to determine the potential impact on the Company's consolidated financial statements.

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NOTE 2. ACQUISITION

44 Business Capital

On April 29, 2016, the Company acquired and assumed the business model, certain assets, and certain liabilities of 44 Business Capital, along with certain loans and other assets of Parke Bank’s (“Parke”) SBA 7(a) loan program operations. 44 Business Capital was a joint venture of Parke (51%) and a management group (49%), 44 Amigos LLC, located in Blue Bell, Pennsylvania. 44 Business Capital was engaged in originating, servicing, and selling SBA loans using Parke’s SBA PLP preferred lender license.

The transaction includes acquiring assets, key people, systems, and processes necessary for a market participant to run operations as a business. In accordance with ASC 805-10-55, the transaction was recorded as a business combination, resulting in acquisition accounting in which all assets are acquired and liabilities are assumed at fair value.

The loans acquired by the Company were the unguaranteed portions of SBA loans of which $35.6 million were recorded as commercial real estate and $1.2 million were recorded as commercial & industrial. Servicing rights on a notional loan balance of $148 million were also acquired. The Company expects the acquisition to expand its SBA lending program on a super-regional and national basis with the intent of selling many of these loans on the secondary market. Additionally, the acquisition of 44 Business Capital expands the Company’s product lines, creates cross-selling opportunities, and adds niche lending to its portfolio. 44 Business Capital will operate as a direct small business lending division reporting up through the Company’s established small business department.

The following table provides a summary of the assets acquired and liabilities assumed and the associated fair value adjustments as recorded by the Company at acquisition:

(in thousands)	As Acquired			Fair Value Adjustments				As Recorded at Acquisition
Consideration paid:
Company common stock issued to certain 44 Business Capital shareholders (44,840 shares)								$	1,217
Cash paid to 44 Business Capital shareholders and Parke								55,649
Total consideration paid								$	56,866
Recognized amounts of identifiable assets acquired and liabilities assumed, at fair value:
Cash and short-term investments	$	107		$	—			$	107
Loans	42,627			(5,777		)	(a)	36,850
Premises and equipment	69			(36		)	(b)	$	33
Other assets	3,076			639			(c)	3,715
Other liabilities	(108		)	—				$	(108	)
Total identifiable net assets	$	45,771		$	(5,174	)		$	40,597
Goodwill								$	16,269

Explanation of Certain Fair Value Adjustments

(a) The adjustment represents the write down of the book value of loans to their estimated fair value based on current interest rates and expected cash flows, which includes an estimate of expected loan loss inherent in the portfolio. Loans that met the criteria and are being accounted for in accordance with ASC 310-30 had a book value of $6.3 million and have a fair value $2.6 million. Non-impaired loans accounted for under ASC 310-10 had a book value of $36.4 million and have a fair value of $34.3 million. ASC 310-30 loans have a $708 thousand fair value adjustment discount that is accretable in earnings over an average estimated six-year life using the effective yield as determined on the date of acquisition. The effective yield is periodically adjusted for changes in expected flows. ASC 310-10 loans have a $2.1 million fair value adjustment discount that is amortized into income over the remaining term of the loans using the effective interest method.

(b) The fair value of the equipment was assumed to approximate the net carrying value based on overall condition and age. The adjustment represents the immediate expensing of equipment not meeting the thresholds for

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capitalization in accordance with Company policy. The recorded amount will be depreciated over the remaining estimated economic lives of the assets.

(c) The adjustment represents the fair value write up of book value of the loan servicing right asset to its estimated fair value based on current interest rates and expected cash flows, which includes an estimate of cost of service and conditional prepayment rates applied to the underlying unpaid loan pool balance over the remaining life of the loans. The balance includes accrued interest of $221 thousand.

The fair values for loans acquired were estimated using cash flow projections based on the remaining maturity and repricing terms. Cash flows were adjusted by estimating future credit losses and the rate of prepayments. Projected monthly cash flows were then discounted to present value using a risk-adjusted market rate for similar loans. There was no carryover of the seller’s allowance for credit losses associated with the loans that were acquired in the acquisition as the loans were initially recorded at fair value.

Information about the acquired loan portfolio subject to ASC 310-30 as of April 29, 2016 is, as follows (in thousands):

	ASC 310-30 Loans
Gross contractual receivable amounts at acquisition	$	6,265
Contractual cash flows not expected to be collected (nonaccretable discount)	(3,000		)
Expected cash flows at acquisition	3,265
Interest component of expected cash flows (accretable discount)	(708		)
Fair value of acquired loans	$	2,557

Goodwill capitalized, which is not amortized for book purposes, was assigned to the Company's banking reporting unit and is not deductible for tax purposes.

Direct acquisition and integration costs of the 44 Business Capital acquisition were expensed as incurred, and totaled $115 thousand during the six months ending June 30, 2016 and there were none for the same period of 2015. These costs totaled $21 thousand for the three months ended June 30, 2016 and there were none for the same period of 2015.

Pro Forma Information (unaudited)

The following table presents selected unaudited pro forma financial information reflecting the acquisition of 44 Business Capital assuming the acquisition was completed as of January 1, 2015. The unaudited pro forma financial information includes adjustments for scheduled amortization and accretion of fair value adjustments recorded at the acquisitions. These adjustments would have been different if they had been recorded on January 1, 2015, and they do not include the impact of prepayments. The unaudited pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of the combined financial results of the Company and 44 Business Capital had the transaction actually been completed at the beginning of the periods presented, nor does it indicate future results for any other interim or full-year period. Pro forma basic and diluted earnings per common share were calculated using Berkshire’s actual weighted-average shares outstanding for the periods presented plus the 45 thousand shares issued as a result of the 44 Business Capital acquisition. The unaudited pro forma information is based on the actual financial statements of Berkshire and 44 Business Capital for the periods shown until the date of acquisition, at which time 44 Business Capital operations became included in Berkshire’s financial statements. For the period from the date of acquisition through June 30, 2016, 44 Business Capital's net revenue was $841 thousand and net income was $59 thousand.

The unaudited pro forma information, for the six months ended June 30, 2016 and 2015, set forth below reflects adjustments related to amortization and accretion of purchase accounting fair value adjustments and an estimated tax rate of 40 percent. Direct acquisition expenses incurred by the Company during 2016, as noted above, are reversed for the purposes of this unaudited pro forma information. The unaudited pro forma information does not include interest income from the unguaranteed portion of acquired loans. Furthermore, the unaudited pro forma

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information does not reflect management’s estimate of any revenue-enhancing or anticipated cost-savings that could occur after June 30, 2016.

Information in the following table is shown in thousands, except earnings per share:

	Pro Forma (unaudited)
	Six Months Ended June 30,
	2016		2015
Net interest income	$	115,269	$	98,417
Non-interest income	32,338		31,650
Net income	32,652		19,417
Pro forma earnings per share:
Basic	$	1.07	$	0.73
Diluted	$	1.06	$	0.73

NOTE 3.           TRADING SECURITY

The Company holds a tax advantaged economic development bond accounted for at fair value. The security had an amortized cost of $11.7 million and $12.0 million, and a fair value of $14.5 million and $14.2 million, at June 30, 2016 and December 31, 2015, respectively. As discussed further in Note 13 - Derivative Financial Instruments and Hedging Activities, the Company has entered into a swap contract to swap-out the fixed rate of the security in exchange for a variable rate. The Company does not purchase securities with the intent of selling them in the near term, and there are no other securities in the trading portfolio at June 30, 2016.

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NOTE 4. SECURITIES AVAILABLE FOR SALE AND HELD TO MATURITY

The following is a summary of securities available for sale and held to maturity:

(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
June 30, 2016
Securities available for sale
Debt securities:
Municipal bonds and obligations	$	103,645	$	7,945	$	—		$	111,590
Agency collateralized mortgage obligations	662,505		17,125		(124		)	679,506
Agency mortgage-backed securities	108,056		1,587		(30		)	109,613
Agency commercial mortgage-backed securities	62,352		899		—			63,251
Corporate bonds	46,874		196		(1,367		)	45,703
Trust preferred securities	11,599		192		(52		)	11,739
Other bonds and obligations	3,164		58		—			3,222
Total debt securities	998,195		28,002		(1,573		)	1,024,624
Marketable equity securities	42,470		7,557		(1,281		)	48,746
Total securities available for sale	1,040,665		35,559		(2,854		)	1,073,370
Securities held to maturity
Municipal bonds and obligations	95,663		7,337		—			103,000
Agency collateralized mortgage obligations	67		8		—			75
Tax advantaged economic development bonds	35,954		2,189		—			38,143
Other bonds and obligations	326		—		—			326
Total securities held to maturity	132,010		9,534		—			141,544
Total	$	1,172,675	$	45,093	$	(2,854	)	$	1,214,914
December 31, 2015
Securities available for sale
Debt securities:
Municipal bonds and obligations	$	99,922	$	4,763	$	(124	)	$	104,561
Agency collateralized mortgage obligations	833,633		4,957		(5,554		)	833,036
Agency mortgage-backed securities	127,274		542		(987		)	126,829
Agency commercial mortgage-backed securities	—		—		—			—
Corporate bonds	42,849		—		(1,827		)	41,022
Trust preferred securities	11,719		182		—			11,901
Other bonds and obligations	3,175		—		(34		)	3,141
Total debt securities	1,118,572		10,444		(8,526		)	1,120,490
Marketable equity securities	30,522		5,331		(1,886		)	33,967
Total securities available for sale	1,149,094		15,775		(10,412		)	1,154,457
Securities held to maturity
Municipal bonds and obligations	94,642		3,359		(34		)	97,967
Agency collateralized mortgage obligations	68		3		—			71
Tax advantaged economic development bonds	36,613		1,924		—			38,537
Other bonds and obligations	329		—		—			329
Total securities held to maturity	131,652		5,286		(34		)	136,904
Total	$	1,280,746	$	21,061	$	(10,446	)	$	1,291,361

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The amortized cost and estimated fair value of available for sale (“AFS”) and held to maturity (“HTM”) securities, segregated by contractual maturity at June 30, 2016 are presented below. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Mortgage-backed securities are shown in total, as their maturities are highly variable. Equity securities have no maturity and are also shown in total.

	Available for sale				Held to maturity
	Amortized		Fair		Amortized		Fair
(In thousands)	Cost		Value		Cost		Value
Within 1 year	$	—	$	—	$	2,799	$	2,810
Over 1 year to 5 years	4,102		4,180		17,139		18,186
Over 5 years to 10 years	32,730		33,345		13,821		14,421
Over 10 years	128,450		134,729		98,184		106,052
Total bonds and obligations	165,282		172,254		131,943		141,469
Marketable equity securities	42,470		48,746		—		—
Mortgage-backed securities	832,913		852,370		67		75
Total	$	1,040,665	$	1,073,370	$	132,010	$	141,544

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Securities with unrealized losses, segregated by the duration of their continuous unrealized loss positions, are summarized as follows:

	Less Than Twelve Months				Over Twelve Months				Total
	Gross				Gross				Gross
	Unrealized		Fair		Unrealized		Fair		Unrealized		Fair
(In thousands)	Losses		Value		Losses		Value		Losses		Value
June 30, 2016
Securities available for sale
Debt securities:
Agency collateralized mortgage obligations	$	4	$	8,824	$	120	$	14,854	$	124	$	23,678
Agency mortgage-backed securities	15		4,053		15		734		30		4,787
Corporate bonds	1,160		22,536		207		4,423		1,367		26,959
Trust preferred securities	52		1,204		—		—		52		1,204
Total debt securities	1,231		36,617		342		20,011		1,573		56,628
Marketable equity securities	203		3,851		1,078		7,063		1,281		10,914
Total securities available for sale	1,434		40,468		1,420		27,074		2,854		67,542
Total	$	1,434	$	40,468	$	1,420	$	27,074	$	2,854	$	67,542
December 31, 2015
Securities available for sale
Debt securities:
Municipal bonds and obligations	$	9	$	1,587	$	115	$	3,400	$	124	$	4,987
Agency collateralized mortgage obligations	2,958		304,907		2,596		136,988		5,554		441,895
Agency mortgage-backed securities	306		34,543		681		35,522		987		70,065
Corporate bonds	30		6,934		1,796		21,587		1,826		28,521
Trust preferred securities	1		1,269		—		—		1		1,269
Other bonds and obligations	—		108		34		3,032		34		3,140
Total debt securities	3,304		349,348		5,222		200,529		8,526		549,877
Marketable equity securities	534		2,908		1,352		5,729		1,886		8,637
Total securities available for sale	3,838		352,256		6,574		206,258		10,412		558,514
Securities held to maturity
Tax advantaged economic development bonds	—		—		34		2,143		34		2,143
Total securities held to maturity	—		—		34		2,143		34		2,143
Total	$	3,838	$	352,256	$	6,608	$	208,401	$	10,446	$	560,657

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Debt Securities

The Company expects to recover its amortized cost basis on all debt securities in its AFS and HTM portfolios. Furthermore, the Company does not intend to sell nor does it anticipate that it will be required to sell any of its securities in an unrealized loss position as of June 30, 2016, prior to this recovery. The Company’s ability and intent to hold these securities until recovery is supported by the Company’s strong capital and liquidity positions as well as its historically low portfolio turnover.

The following summarizes, by investment security type, the basis for the conclusion that the debt securities in an unrealized loss position within the Company’s AFS and HTM portfolios were not other-than-temporarily impaired at June 30, 2016:

AFS collateralized mortgage obligations

At June 30, 2016, 4 out of the total 123 securities in the Company’s portfolios of AFS collateralized mortgage obligations were in unrealized loss positions. Aggregate unrealized losses represented 0.5% of the amortized cost of securities in unrealized loss positions. The Federal National Mortgage Association (“FNMA”), Federal Home Loan Mortgage Corporation (“FHLMC”), and Government National Mortgage Association (“GNMA”) guarantee the contractual cash flows of all of the Company’s collateralized mortgage obligations. The securities are investment grade rated and there were no material underlying credit downgrades during the quarter. All securities are performing.

AFS mortgage-backed securities

At June 30, 2016, 12 out of the total 82 securities in the Company’s portfolios of AFS residential mortgage-backed securities were in unrealized loss positions. Aggregate unrealized losses represented 0.6% of the amortized cost of securities in unrealized loss positions. The FNMA, FHLMC, and GNMA guarantee the contractual cash flows of all of the Company’s residential mortgage-backed securities. The securities are investment grade rated and there were no material underlying credit downgrades during the quarter. All securities are performing.

AFS corporate bonds

At June 30, 2016, 3 out of 9 securities in the Company’s portfolio of AFS corporate bonds were in an unrealized loss position. The aggregate unrealized loss represents 4.8% of the amortized cost of bonds in unrealized loss positions. The Company reviews the financial strength of all of these bonds and has concluded that the amortized cost remains supported by the expected future cash flows of these securities.

At June 30, 2016, $1.2 million of the total unrealized losses was attributable to a $17.6 million investment. The Company evaluated this security, with a Level 2 fair value of $16.4 million, for potential other-than-temporary impairment (“OTTI”) at June 30, 2016 and determined that OTTI was not evident based on both the Company’s ability and intent to hold the security until the recovery of its remaining amortized cost.

AFS trust preferred securities

At June 30, 2016 1 out of the 3 securities in the Company’s portfolio of AFS trust preferred securities were in an unrealized loss position. Aggregate unrealized losses represented 4.2% of the amortized cost of these securities in an unrealized loss position. The Company’s evaluation of the present value of expected cash flows on these securities supports its conclusions about the recoverability of these securities’ amortized cost basis. These securities are investment grade rated. The Company reviews the financial strength of all of the single issue trust issuers and has concluded that the amortized cost remains supported by the market value of these securities and they are performing.

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Marketable Equity Securities

In evaluating its marketable equity securities portfolio for OTTI, the Company considers its ability to more likely than not hold an equity security to recovery. The Company additionally considers other various factors including the length of time and the extent to which the fair value has been less than cost and the financial condition and near term prospects of the issuer. Any OTTI is recognized immediately through earnings.

At June 30, 2016, 9 out of the total 26 securities in the Company’s portfolio of marketable equity securities were in an unrealized loss position. The unrealized loss represented 10.5% of the amortized cost of the securities. The Company has the ability and intent to hold the securities until recovery of their cost basis and does not consider the securities other-than-temporarily impaired at June 30, 2016. As new information becomes available in future periods, changes to the Company’s assumptions may be warranted and could lead to a different conclusion regarding the OTTI of these securities.

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NOTE 5. LOANS

The Company’s loan portfolio is segregated into the following segments: commercial real estate, commercial and industrial, residential mortgage, and consumer. Commercial real estate loans include construction, single and multi-family, and other commercial real estate classes. Commercial and industrial loans include asset based lending loans, lease financing, and other commercial business loan classes. Residential mortgage loans include classes for 1-4 family owner occupied and construction loans. Consumer loans include home equity, direct and indirect auto, and other. These portfolio segments each have unique risk characteristics that are considered when determining the appropriate level for the allowance for loan losses. A substantial portion of the loan portfolio is secured by real estate in western Massachusetts, southern Vermont, northeastern New York, and in the Bank’s other New England lending areas. The ability of many of the Bank’s borrowers to honor their contracts is dependent, among other things, on the specific economy and real estate markets of these areas.

Total loans include business activity loans and acquired loans. Acquired loans are those loans acquired from Parke Bank, Firestone Financial Corp., Hampden Bancorp, Inc., the New York branch acquisition, Beacon Federal Bancorp, Inc., The Connecticut Bank and Trust Company, Legacy Bancorp, Inc., and Rome Bancorp, Inc. The following is a summary of total loans:

	June 30, 2016						December 31, 2015
(In thousands)	Business Activities Loans		Acquired Loans		Total		Business Activities Loans		Acquired Loans		Total
Commercial real estate:
Construction	$	218,607	$	30,428	$	249,035	$	210,196	$	43,474	$	253,670
Single and multi-family	244,949		42,171		287,120		214,823		36,783		251,606
Other commercial real estate	1,354,086		347,341		1,701,427		1,209,008		345,483		1,554,491
Total commercial real estate	1,817,642		419,940		2,237,582		1,634,027		425,740		2,059,767
Commercial and industrial loans:
Asset based lending	325,476		—		325,476		331,253		—		331,253
Other commercial and industrial loans	527,612		181,471		709,083		495,979		221,031		717,010
Total commercial and industrial loans	853,088		181,471		1,034,559		827,232		221,031		1,048,263
Total commercial loans	2,670,730		601,411		3,272,141		2,461,259		646,771		3,108,030
Residential mortgages:
1-4 family	1,519,067		302,702		1,821,769		1,454,233		332,747		1,786,980
Construction	20,965		866		21,831		26,704		1,351		28,055
Total residential mortgages	1,540,032		303,568		1,843,600		1,480,937		334,098		1,815,035
Consumer loans:
Home equity	310,565		49,346		359,911		307,159		53,446		360,605
Auto and other	414,486		110,163		524,649		311,328		130,238		441,566
Total consumer loans	725,051		159,509		884,560		618,487		183,684		802,171
Total loans	$	4,935,813	$	1,064,488	$	6,000,301	$	4,560,683	$	1,164,553	$	5,725,236

22

The carrying amount of the acquired loans at June 30, 2016 totaled $1.1 billion. A subset of these loans was determined to have evidence of credit deterioration at acquisition date, which is accounted for in accordance with ASC 310-30. These purchased credit-impaired loans presently maintain a carrying value of $19.7 million (and a note balance of $38.2 million). These loans are evaluated for impairment through the periodic reforecasting of expected cash flows. Loans considered not impaired at acquisition date had a carrying amount of $1.0 billion.

At December 31, 2015, acquired loans maintained a carrying value of $1.2 billion and purchased credit-impaired loans totaled $21.4 million (note balance of $40.2 million). Loans considered not impaired at acquisition date had a carrying amount of $1.1 billion.

The following table summarizes activity in the accretable yield for the acquired loan portfolio that falls under the purview of ASC 310-30, Accounting for Certain Loans or Debt Securities Acquired in a Transfer:

	Three Months Ended June 30,
(In thousands)	2016			2015
Balance at beginning of period	$	6,464		$	3,431
Acquisitions	708			4,178
Reclassification from nonaccretable difference for loans with improved cash flows	522			405
Reclassification to TDR	—			—
Accretion	(1,481		)	(1,474		)
Balance at end of period	$	6,213		$	6,540
	Six Months Ended June 30,
(In thousands)	2016			2015
Balance at beginning of period	$	6,925		$	2,541
Acquisitions	708			4,178
Reclassification from nonaccretable difference for loans with improved cash flows	1,418			1,736
Reclassification to TDR	(185		)	—
Accretion	(2,653		)	(1,915		)
Balance at end of period	$	6,213		$	6,540

23

The following is a summary of past due loans at June 30, 2016 and December 31, 2015:

Business Activities Loans

(in thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Loans		Past Due > 90 days and Accruing
June 30, 2016
Commercial real estate:
Construction	$	—	$	—	$	—	$	—	$	218,607	$	218,607	$	—
Single and multi-family	11		—		518		529		244,420		$	244,949	—
Other commercial real estate	1,210		—		5,593		6,803		1,347,283		$	1,354,086	2,195
Total	1,221		—		6,111		7,332		1,810,310		1,817,642		2,195
Commercial and industrial loans:
Asset based lending	—		—		—		—		325,476		$	325,476	—
Other commercial and industrial loans	931		2,270		5,934		9,135		518,477		$	527,612	127
Total	931		2,270		5,934		9,135		843,953		853,088		127
Residential mortgages:
1-4 family	1,907		1,359		3,075		6,341		1,512,726		$	1,519,067	487
Construction	—		—		44		44		20,921		$	20,965	—
Total	1,907		1,359		3,119		6,385		1,533,647		1,540,032		487
Consumer loans:
Home equity	1,374		5		1,760		3,139		307,426		$	310,565	43
Auto and other	1,650		238		378		2,266		412,220		$	414,486	—
Total	3,024		243		2,138		5,405		719,646		725,051		43
Total	$	7,083	$	3,872	$	17,302	$	28,257	$	4,907,556	$	4,935,813	$	2,852

Business Activities Loans

(in thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Loans		Past Due > 90 days and Accruing
December 31, 2015
Commercial real estate:
Construction	$	—	$	—	$	58	$	58	$	210,138	$	210,196	$	—
Single and multi-family	65		160		70		295		214,528		214,823		—
Other commercial real estate	1,523		831		3,286		5,640		1,203,368		1,209,008		—
Total	1,588		991		3,414		5,993		1,628,034		1,634,027		—
Commercial and industrial loans:
Asset based lending	—		—		—		—		331,253		331,253		—
Other commercial and industrial loans	1,202		1,105		7,770		10,077		485,902		495,979		146
Total	1,202		1,105		7,770		10,077		817,155		827,232		146
Residential mortgages:
1-4 family	3,537		857		4,304		8,698		1,445,535		1,454,233		2,006
Construction	—		—		—		—		26,704		26,704		—
Total	3,537		857		4,304		8,698		1,472,239		1,480,937		2,006
Consumer loans:
Home equity	563		20		1,658		2,241		304,918		307,159		61
Auto and other	1,230		132		610		1,972		309,356		311,328		59
Total	1,793		152		2,268		4,213		614,274		618,487		120
Total	$	8,120	$	3,105	$	17,756	$	28,981	$	4,531,702	$	4,560,683	$	2,272

24

Acquired Loans

(in thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Acquired Credit Impaired		Total Loans		Past Due > 90 days and Accruing
June 30, 2016
Commercial real estate:
Construction	$	—	$	—	$	—	$	—	$	1,093	$	30,428	$	—
Single and multi-family	341		—		392		733		1,546		42,171		296
Other commercial real estate	15		205		796		1,016		12,957		347,341		—
Total	356		205		1,188		1,749		15,596		419,940		296
Commercial and industrial loans:
Asset based lending	—		—		—		—		—		—		—
Other commercial and industrial loans	598		17		1,783		2,398		2,322		181,471		—
Total	598		17		1,783		2,398		2,322		181,471		—
Residential mortgages:
1-4 family	909		327		2,285		3,521		1,565		302,702		35
Construction	—		—		—		—		—		866		—
Total	909		327		2,285		3,521		1,565		303,568		35
Consumer loans:
Home equity	79		—		743		822		116		49,346		185
Auto and other	1,314		123		830		2,267		109		110,163		107
Total	1,393		123		1,573		3,089		225		159,509		292
Total	$	3,256	$	672	$	6,829	$	10,757	$	19,708	$	1,064,488	$	623

Acquired Loans

(in thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Acquired Credit Impaired		Total Loans		Past Due > 90 days and Accruing
December 31, 2015
Commercial real estate:							—
Construction	$	—	$	—	$	—	$	—	$	1,298	$	43,474	$	—
Single and multi-family	—		176		227		403		1,380		36,783		127
Other commercial real estate	547		43		1,368		1,958		13,087		345,483		—
Total	547		219		1,595		2,361		15,765		425,740		127
Commercial and industrial loans:
Asset based lending	—		—		—		—		—		—		—
Other commercial and industrial loans	1,214		505		1,420		3,139		2,775		221,031		785
Total	1,214		505		1,420		3,139		2,775		221,031		785
Residential mortgages:
1-4 family	2,580		311		1,880		4,771		2,572		332,747		212
Construction	—		—		—		—		—		1,351		—
Total	2,580		311		1,880		4,771		2,572		334,098		212
Consumer loans:
Home equity	82		277		837		1,196		118		53,446		111
Auto and other	1,491		145		1,081		2,717		132		130,238		187
Total	1,573		422		1,918		3,913		250		183,684		298
Total	$	5,914	$	1,457	$	6,813	$	14,184	$	21,362	$	1,164,553	$	1,422

25

The following is summary information pertaining to non-accrual loans at June 30, 2016 and December 31, 2015

	June 30, 2016						December 31, 2015
(In thousands)	Business Activities Loans		Acquired Loans (1)		Total		Business Activities Loans		Acquired Loans (2)		Total
Commercial real estate:
Construction	$	—	$	—	$	—	$	59	$	—	$	59
Single and multi-family	518		96		$	614	70		100		170
Other commercial real estate	3,398		796		$	4,194	3,285		1,368		4,653
Total	3,916		892		4,808		3,414		1,468		4,882
Commercial and industrial loans:
Other commercial and industrial loans	5,807		1,502		$	7,309	7,624		597		8,221
Total	5,807		1,502		7,309		7,624		597		8,221
Residential mortgages:
1-4 family	2,588		2,225		$	4,813	2,298		1,668		3,966
Construction	44		—		$	44	—		—		—
Total	2,632		2,225		4,857		2,298		1,668		3,966
Consumer loans:
Home equity	1,717		558		$	2,275	1,597		727		2,324
Auto and other	378		723		$	1,101	551		893		1,444
Total	2,095		1,281		3,376		2,148		1,620		3,768
Total non-accrual loans	$	14,450	$	5,900	$	20,350	$	15,484	$	5,353	$	20,837

_______________________________________

(1)  At quarter end June 30, 2016, acquired credit impaired loans accounted for $306 thousand of non-accrual loans that are not presented in the above table.

(2)  At December 31, 2015, acquired credit impaired loans accounted for $39 thousand of non-accrual loans that are not presented in the above table.

26

Loans evaluated for impairment as of June 30, 2016 and December 31, 2015 were as follows:

Business Activities Loans

(In thousands)	Commercial real estate		Commercial and industrial loans		Residential mortgages		Consumer		Total
June 30, 2016
Loans receivable:
Balance at end of period
Individually evaluated for impairment	$	12,501	$	5,081	$	2,906	$	1,735	$	22,223
Collectively evaluated	1,805,141		848,007		1,537,126		723,316		4,913,590
Total	$	1,817,642	$	853,088	$	1,540,032	$	725,051	$	4,935,813

Business Activities Loans

(In thousands)	Commercial real estate		Commercial and industrial loans		Residential mortgages		Consumer		Total
December 31, 2015
Loans receivable:
Balance at end of year
Individually evaluated for impairment	$	11,560	$	7,191	$	2,812	$	1,810	$	23,373
Collectively evaluated for impairment	1,622,467		820,041		1,478,125		616,677		4,537,310
Total	$	1,634,027	$	827,232	$	1,480,937	$	618,487	$	4,560,683

Acquired Loans

(In thousands)	Commercial real estate		Commercial and industrial loans		Residential mortgages		Consumer		Total
June 30, 2016
Loans receivable:
Balance at end of Period
Individually evaluated for impairment	$	3,924	$	1,141	$	519	$	572	$	6,156
Purchased credit-impaired loans	15,596		2,322		1,565		225		19,708
Collectively evaluated	400,420		178,008		301,484		158,712		1,038,624
Total	$	419,940	$	181,471	$	303,568	$	159,509	$	1,064,488

Acquired Loans

(In thousands)	Commercial real estate		Commercial and industrial loans		Residential mortgages		Consumer		Total
December 31, 2015
Loans receivable:
Balance at end of year
Individually evaluated for impairment	$	3,749	$	—	$	570	$	487	$	4,806
Purchased credit-impaired loans	15,765		2,775		2,572		250		21,362
Collectively evaluated for impairment	406,226		218,256		330,956		182,947		1,138,385
Total	$	425,740	$	221,031	$	334,098	$	183,684	$	1,164,553

27

The following is a summary of impaired loans at June 30, 2016 and December 31, 2015:

Business Activities Loans

	June 30, 2016
(In thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance:
Commercial real estate - construction	$	—	$	—	$	—
Commercial real estate - single and multifamily	—		—		—
Other commercial real estate loans	1,944		1,944		—
Other commercial and industrial loans	200		200		—
Residential mortgages - 1-4 family	1,313		1,313		—
Consumer - home equity	632		632		—
Consumer - other	1		1		—
With an allowance recorded:
Commercial real estate - construction	$	—	$	—	$	—
Commercial real estate - single and multifamily	—		—		—
Other commercial real estate loans	10,233		10,557		324
Other commercial and industrial loans	4,768		4,881		113
Residential mortgages - 1-4 family	1,443		1,593		150
Consumer - home equity	951		999		48
Consumer - other	96		103		7
Total
Commercial real estate	$	12,177	$	12,501	$	324
Commercial and industrial loans	4,968		5,081		113
Residential mortgages	2,756		2,906		150
Consumer	1,680		1,735		55
Total impaired loans	$	21,581	$	22,223	$	642

28

Business Activities Loans

	December 31, 2015
(In thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance:
Commercial real estate - construction	$	2,000	$	2,000	$	—
Commercial real estate - single and multifamily	—		—		—
Other commercial real estate loans	4,613		4,613		—
Other commercial and industrial loans	5,828		5,828		—
Residential mortgages - 1-4 family	1,181		1,181		—
Consumer - home equity	702		702		—
Consumer - other	1		1		—
With an allowance recorded:
Commercial real estate - construction	$	—	$	—	$	—
Commercial real estate - single and multifamily	—		—		—
Other commercial real estate loans	4,798		4,947		149
Other commercial and industrial loans	1,341		1,362		21
Residential mortgages - 1-4 family	1,479		1,632		153
Consumer - home equity	903		999		96
Consumer - other	101		108		7
Total
Commercial real estate	$	11,411	$	11,560	$	149
Commercial and industrial loans	7,169		7,190		21
Residential mortgages	2,660		2,813		153
Consumer	1,707		1,810		103
Total impaired loans	$	22,947	$	23,373	$	426

29

Acquired Loans

	June 30, 2016
(In thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance:
Commercial real estate - construction	$	—	$	—	$	—
Commercial real estate - single and multifamily	124		124		—
Other commercial real estate loans	351		351		—
Other commercial and industrial loans	—		—		—
Residential mortgages - 1-4 family	188		188		—
Consumer - home equity	—		—		—
Consumer - other	152		152		—
With an allowance recorded:
Commercial real estate - construction	$	—	$	—	$	—
Commercial real estate - single and multifamily	775		816		41
Other commercial real estate loans	2,498		2,633		135
Other commercial and industrial loans	1,099		1,141		42
Residential mortgages - 1-4 family	296		331		35
Consumer - home equity	387		420		33
Consumer - other	—		—		—
Total
Commercial real estate	$	3,748	$	3,924	$	176
Commercial and industrial loans	1,099		1,141		42
Residential mortgages	484		519		35
Consumer	539		572		33
Total impaired loans	$	5,870	$	6,156	$	286

Acquired Loans

	December 31, 2015
(In thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance:
Other commercial real estate loans	$	1,722	$	1,722	$	—
Residential mortgages - 1-4 family	274		274		—
Consumer - home equity	117		117		—
Consumer - other	177		177		—
With an allowance recorded:
Commercial real estate - single and multifamily	$	638	$	655	$	17
Other commercial real estate loans	1,964		2,032		68
Residential mortgages - 1-4 family	266		296		30
Consumer - home equity	167		192		25
Total
Other commercial real estate loans	$	4,324	$	4,409	$	85
Other commercial and industrial loans	—		—		—
Residential mortgages	540		570		30
Consumer	461		486		25
Total impaired loans	$	5,325	$	5,465	$	140

30

The following is a summary of the average recorded investment and interest income recognized on impaired loans as of June 30, 2016 and 2015:

Business Activities Loans

	Six Months Ended June 30, 2016				Six Months Ended June 30, 2015
(in thousands)	Average Recorded Investment		Cash Basis Interest Income Recognized		Average Recorded Investment		Cash Basis Interest Income Recognized
With no related allowance:
Commercial real estate - construction	$	—	$	—	$	2,466	$	1
Commercial real estate - single and multifamily	72		1		120		—
Other commercial real estate loans	2,690		3		12,734		170
Other commercial and industrial loans	707		16		1,447		3
Residential mortgages - 1-4 family	1,409		3		2,281		41
Consumer - home equity	792		5		360		1
Consumer - other	1		—		114		2
With an allowance recorded:
Commercial real estate - construction	$	—	$	—	$	—	$	—
Commercial real estate - single and multifamily	—		—		—		—
Other commercial real estate loans	10,144		240		6,629		92
Other commercial and industrial loans	5,576		119		329		2
Residential mortgages - 1-4 family	1,609		36		764		17
Consumer - home equity	999		17		—		—
Consumer - other	105		2		—		—
Total
Commercial real estate	$	12,906	$	244	$	21,949	$	263
Commercial and industrial loans	6,283		135		1,776		5
Residential mortgages	3,018		39		3,045		58
Consumer loans	1,897		24		474		3
Total impaired loans	$	24,104	$	442	$	27,244	$	329

31

Acquired Loans

	Six Months Ended June 30, 2016				Six Months Ended June 30, 2015
(in thousands)	Average Recorded Investment		Cash Basis Interest Income Recognized		Average Recorded Investment		Cash Basis Interest Income Recognized
With no related allowance:
Commercial real estate - construction	$	—	$	—	$	664	$	60
Commercial real estate - single and multifamily	125		4		254		—
Other commercial real estate loans	596		—		1,977		3
Other commercial and industrial loans	154		—		51		3
Residential mortgages - 1-4 family	100		—		569		2
Consumer - home equity	—		—		355		6
Consumer - other	160		1		—		—
With an allowance recorded:
Commercial real estate - construction	$	—	$	—	$	—	$	—
Commercial real estate - single and multifamily	822		21		2,872		63
Other commercial real estate loans	2,598		77		845		59
Other commercial and industrial loans	233		2		—		—
Residential mortgages - 1-4 family	333		6		310		5
Consumer - home equity	326		6		—		—
Consumer - other	—		—		—		—
Total
Other commercial real estate loans	$	4,141	$	102	$	6,612	$	185
Commercial and industrial loans	387		2		51		3
Residential mortgages	433		6		879		7
Consumer loans	486		7		355		6
Total impaired loans	$	5,447	$	117	$	7,897	$	201

32

Troubled Debt Restructuring Loans

The Company’s loan portfolio also includes certain loans that have been modified in a Troubled Debt Restructuring (TDR), where economic concessions have been granted to borrowers who have experienced or are expected to experience financial difficulties. These concessions typically result from the Company’s loss mitigation activities and could include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance, or other actions. Certain TDRs are classified as nonperforming at the time of restructure and may only be returned to performing status after considering the borrower’s sustained repayment performance for a reasonable period, generally six months. TDRs are evaluated individually for impairment and may result in a specific allowance amount allocated to an individual loan.

The following tables include the recorded investment and number of modifications identified during the three and six months ended June 30, 2016 and for the three and six months ended June 30, 2015, respectively. The table includes the recorded investment in the loans prior to a modification and also the recorded investment in the loans after the loans were restructured. The modifications for the three and six months ending June 30, 2016 were attributable to interest rate concessions, maturity date extensions, modified payment terms, reamortization, and accelerated maturity. The modifications for the three and six months ending June 30, 2015 were attributable to interest rate concessions, maturity date extensions and modified payment terms.

	Three Months Ended June 30, 2016
(Dollars in thousands)	Number of Modifications	Pre-Modification Outstanding Recorded Investment	Post-Modification Outstanding Recorded Investment
Troubled Debt Restructurings
Consumer - Home Equity	1	117	117
Total	1	117	117

	Six Months Ended June 30, 2016
(Dollars in thousands)	Number of Modifications	Pre-Modification Outstanding Recorded Investment	Post-Modification Outstanding Recorded Investment
Troubled Debt Restructurings
Commercial - Other	2	1,049	1,049
Commercial and industrial - Other	2	151	151
Consumer - Home Equity	1	117	117
Total	5	1,317	1,317

	Three Months Ended June 30, 2015
(Dollars in thousands)	Number of Modifications	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Troubled Debt Restructurings
Commercial - Construction	1	$	1,877	$	1,877
Commercial - Other	1	1,694		1,694
Commercial and industrial - Other	4	8,159		8,159
Total	6	$	11,730	$	11,730

	Six Months Ended June 30, 2015
(Dollars in thousands)	Number of Modifications	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Troubled Debt Restructurings
Commercial - Construction	1	$	2,000	$	2,000
Commercial - Other	2	1,694		1,694
Commercial and industrial - Other	5	8,192		8,192
Total	8	11,886		11,886

33

The following tables disclose the recorded investments and numbers of modifications for TDRs for the prior year where a concession has been made, that then defaulted in the respective reporting period. For the three and six months ended June 30, 2016, there were no loans that were restructured that had subsequently defaulted during the period.

	Modifications that Subsequently Defaulted
	Three Months Ended June 30, 2015
	Number of Contracts	Recorded Investment
Troubled Debt Restructurings
Commercial - Other	1	$	649

	Modifications that Subsequently Defaulted
	Six Months Ended June 30, 2015
	Number of Contracts	Recorded Investment
Troubled Debt Restructurings
Commercial - Other	1	$	649

The following table presents the Company’s TDR activity for the three and six months ended June 30, 2016 and 2015:

	Three Months Ended June 30,
(In thousands)	2016			2015
Balance at beginning of the period	$	23,654		$	17,204
Principal payments	(768		)	(607		)
TDR status change (1)	—			—
Other reductions/increases (2)	(881		)	(611		)
Newly identified TDRs	117			9,730
Balance at end of the period	$	22,122		$	25,716

	Six Months Ended June 30,
(In thousands)	2016			2015
Balance at beginning of the period	$	22,048		$	16,714
Principal payments	(1,109		)	(1,091		)
TDR status change (1)	2,236			—
Other reductions/increases (2)	(2,370		)	(1,793		)
Newly identified TDRs	1,317			11,886
Balance at end of the period	$	22,122		$	25,716

_________________________________

(1) TDR status change classification represents TDR loans with a specified interest rate equal to or greater than the rate that the Company was willing to accept at the time of the restructuring for a new loan with comparable risk and  the loan was on current payment status and not impaired based on the terms specified by the restructuring agreement.

(2) Other reductions classification consists of transfer to other real estate owned and charge-offs and advances to loans.

The evaluation of certain loans individually for specific impairment includes loans that were previously classified as TDRs or continue to be classified as TDRs.

As of June 30, 2016, the Company maintained foreclosed residential real estate property with a fair value of $60 thousand. Additionally, residential mortgage loans collateralized by real estate property that are in the process of foreclosure as of June 30, 2016 and December 31, 2015 totaled $6.1 million and $7.5 million, respectively. As of December 31, 2015, foreclosed residential real estate property totaled $675 thousand.

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NOTE 6.               LOAN LOSS ALLOWANCE

Activity in the allowance for loan losses for the six months ended June 30, 2016 and 2015 was as follows:

Business Activities Loans (In thousands)	Commercial real estate		Commercial and industrial loans		Residential mortgages		Consumer		Unallocated			Total
June 30, 2016
Balance at beginning of period	$	14,508	$	7,317	$	7,566	$	4,956	$	227		$	34,574
Charged-off loans	1,578		2,546		1,087		741		—			5,952
Recoveries on charged-off loans	128		77		5		122		—			332
Provision/(releases) for loan losses	3,837		3,448		1,042		432		(589		)	8,170
Balance at end of period	$	16,895	$	8,296	$	7,526	$	4,769	$	(362	)	$	37,124
Individually evaluated for impairment	324		113		150		55		—			642
Collectively evaluated	16,571		8,183		7,376		4,714		(362		)	36,482
Total	$	16,895	$	8,296	$	7,526	$	4,769	$	(362	)	$	37,124

Business Activities Loans (In thousands)	Commercial real estate		Commercial and industrial loans		Residential mortgages			Consumer			Unallocated			Total
June 30, 2015
Balance at beginning of period	$	14,690	$	5,206	$	6,836		$	5,928		$	135		$	32,795
Charged-off loans	4,422		372		446			462			—			5,702
Recoveries on charged-off loans	146		154		113			127			—			540
Provision/(releases) for loan losses	2,553		4,178		(32		)	(679		)	(427		)	5,593
Balance at end of period	$	12,967	$	9,166	$	6,471		$	4,914		$	(292	)	$	33,226
Individually evaluated for impairment	30		1,706		87			—			—			1,823
Collectively evaluated	12,937		7,460		6,384			4,914			(292		)	31,403
Total	$	12,967	$	9,166	$	6,471		$	4,914		$	(292	)	$	33,226

Acquired Loans (In thousands)	Commercial real estate		Commercial and industrial loans			Residential mortgages		Consumer		Unallocated		Total
June 30, 2016
Balance at beginning of period	$	1,903	$	1,330		$	976	$	525	$	—	$	4,734
Charged-off loans	126		275			364		380		—		1,145
Recoveries on charged-off loans	—		176			104		46		—		326
Provision for loan losses	363		(455		)	165		285		—		358
Balance at end of period	$	2,140	$	776		$	881	$	476	$	—	$	4,273
Individually evaluated for impairment	177		42			35		32		—		286
Purchased credit-impaired loans	—		—			—		—		—		—
Collectively evaluated	1,963		734			846		444		—		3,987
Total	$	2,140	$	776		$	881	$	476	$	—	$	4,273

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Acquired Loans (In thousands)	Commercial real estate		Commercial and industrial loans		Residential mortgages		Consumer		Unallocated		Total
June 30, 2015
Balance at beginning of period	$	790	$	1,093	$	615	$	369	$	—	$	2,867
Charged-off loans	587		336		375		608		—		1,906
Recoveries on charged-off loans	395		56		41		56		—		548
Provision for loan losses	1,188		160		527		587		—		2,462
Balance at end of period	$	1,786	$	973	$	808	$	404	$	—	$	3,971
Individually evaluated for impairment	166		—		39		—		—		205
Purchased credit-impaired loans	—		—		—		—		—		—
Collectively evaluated	1,620		973		769		404		—		3,766
Total	$	1,786	$	973	$	808	$	404	$	—	$	3,971

Credit Quality Information

Business Activities Loans Credit Quality Analysis

The Company monitors the credit quality of its portfolio by using internal risk ratings that are based on regulatory guidance. Loans that are given a Pass rating are not considered a problem credit. Loans that are classified as Special Mention loans are considered to have potential credit problems and are evaluated closely by management. Substandard and non-accruing loans are loans for which a definitive weakness has been identified and which may make full collection of contractual cash flows questionable. Doubtful loans are those with identified weaknesses that make full collection of contractual cash flows, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. 

For commercial credits, the Company assigns an internal risk rating at origination and reviews the rating annually, semiannually or quarterly depending on the risk rating. The rating is also reassessed at any point in time when management becomes aware of information that may affect the borrower’s ability to fulfill their obligations.

The Company risk rates its residential mortgages, including 1-4 family and residential construction loans, based on a three rating system: Pass, Special Mention and Substandard. Loans that are current within 59 days are rated Pass. Residential mortgages that are 60-89 days delinquent are rated Special Mention. Loans delinquent for 90 days or greater are rated Substandard and generally placed on non-accrual status. Home equity loans are risk rated based on the same rating system as the Company’s residential mortgages.

Ratings for other consumer loans, including auto loans, are based on a two rating system. Loans that are current within 119 days are rated Performing while loans delinquent for 120 days or more are rated Non-performing. Other consumer loans are placed on non-accrual at such time as they become Non-performing.

Acquired Loans Credit Quality Analysis

Upon acquiring a loan portfolio, the Company's internal loan review function assigns risk ratings to the acquired loans, utilizing the same methodology as it does with business activities loans. This may differ from the risk rating policy of the predecessor bank. Loans which are rated Substandard or worse according to the rating process outlined below are deemed to be credit impaired loans accounted for under ASC 310-30, regardless of whether they are classified as performing or non-performing.

The Bank utilizes an eleven grade internal loan rating system for each of its acquired commercial real estate, construction and commercial loans as outlined in the Credit Quality Information section of this Note. The ratings system is similar to loans originated through business activities.

The Company subjects loans that do not meet the ASC 310-30 criteria to ASC 450-20 by collectively evaluating these loans for an allowance for loan loss. The Company applies a methodology similar to the methodology prescribed for business activities loans, which includes the application of environmental factors to each category of loans. The methodology to collectively evaluate the acquired loans outside the scope of ASC 310-30 includes the

36

application of a number of environmental factors that reflect management’s best estimate of the level of incremental credit losses that might be recognized given current conditions. This is reviewed as part of the allowance for loan loss adequacy analysis. As the loan portfolio matures and environmental factors change, the loan portfolio will be reassessed each quarter to determine an appropriate reserve allowance.

Additionally, the Company considers the need for an additional reserve for acquired loans accounted for outside of the scope of ASC 310-30 under ASC 310-20. At acquisition date, the Bank determined a fair value mark with credit and interest rate components. Under the Company’s model, the impairment evaluation process involves comparing the carrying value of acquired loans, including the entire unamortized premium or discount, to the recorded reserve allowance. If necessary, the Company books an additional reserve to account for shortfalls identified through this calculation. Fair value marks are not bifurcated when evaluating for impairment.

A decrease in the expected cash flows in subsequent periods requires the establishment of an allowance for loan losses at that time for ASC 310-30 loans. At June 30, 2016 the allowance for loan losses related to acquired loans under ASC 310-30 and ASC 310-20 was $4.3 million using the above mentioned criteria.

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The following tables present the Company’s loans by risk rating at June 30, 2016 and December 31, 2015:

Business Activities Loans

Commercial Real Estate

Credit Risk Profile by Creditworthiness Category

	Construction				Single and multi-family				Other				Total commercial real estate
(In thousands)	June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015
Grade:
Pass	$	218,607	$	208,138	$	242,207	$	212,900	$	1,306,634	$	1,155,770	$	1,767,448	$	1,576,808
Special mention	—		—		362		—		9,887		3,449		10,249		3,449
Substandard	—		2,058		2,380		1,923		37,528		49,716		39,908		53,697
Doubtful	—		—		—		—		37		73		37		73
Total	$	218,607	$	210,196	$	244,949	$	214,823	$	1,354,086	$	1,209,008	$	1,817,642	$	1,634,027

Commercial and Industrial Loans

Credit Risk Profile by Creditworthiness Category

	Asset based lending				Other				Total comm. and industrial loans
(In thousands)	June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015
Grade:
Pass	$	325,476	$	331,253	$	495,024	$	455,710	$	820,500	$	786,963
Special mention	—		—		11,253		24,578		11,253		24,578
Substandard	—		—		21,335		15,691		21,335		15,691
Total	$	325,476	$	331,253	$	527,612	$	495,979	$	853,088	$	827,232

Residential Mortgages

Credit Risk Profile by Internally Assigned Grade

	1-4 family				Construction				Total residential mortgages
(In thousands)	June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015
Grade:
Pass	$	1,514,633	$	1,449,073	$	20,920	$	26,704	$	1,535,553	$	1,475,777
Special mention	1,359		857		—		—		1,359		857
Substandard	3,075		4,303		45		—		3,120		4,303
Total	$	1,519,067	$	1,454,233	$	20,965	$	26,704	$	1,540,032	$	1,480,937

Consumer Loans

Credit Risk Profile Based on Payment Activity

	Home equity				Auto and other				Total consumer loans
(In thousands)	June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015
Performing	$	308,848	$	305,562	$	414,108	$	310,777	$	722,956	$	616,339
Nonperforming	1,717		1,597		378		551		2,095		2,148
Total	$	310,565	$	307,159	$	414,486	$	311,328	$	725,051	$	618,487

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Acquired Loans

Commercial Real Estate

Credit Risk Profile by Creditworthiness Category

	Construction				Single and multi-family				Other				Total commercial real estate
(In thousands)	June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015
Grade:
Pass	$	29,335	$	42,176	$	36,845	$	32,796	$	328,594	$	324,614	$	394,774	$	399,586
Special mention	—		—		—		655		1,146		352		1,146		1,007
Substandard	1,093		1,298		5,326		3,332		17,601		20,517		24,020		25,147
Total	$	30,428	$	43,474	$	42,171	$	36,783	$	347,341	$	345,483	$	419,940	$	425,740

Commercial and Industrial Loans

Credit Risk Profile by Creditworthiness Category

	Asset based lending				Other				Total comm. and industrial loans
(In thousands)	June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015
Grade:
Pass	$	—	$	—	$	173,306	$	212,825	$	173,306	$	212,825
Special mention	—		—		515		487		515		487
Substandard	—		—		7,650		7,719		7,650		7,719
Total	$	—	$	—	$	181,471	$	221,031	$	181,471	$	221,031

Residential Mortgages

Credit Risk Profile by Internally Assigned Grade

	1-4 family				Construction				Total residential mortgages
(In thousands)	June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015
Grade:
Pass	$	299,909	$	329,375	$	866	$	1,351	$	300,775	$	330,726
Special mention	327		311		—		—		327		311
Substandard	2,466		3,061		—		—		2,466		3,061
Total	$	302,702	$	332,747	$	866	$	1,351	$	303,568	$	334,098

Consumer Loans

Credit Risk Profile Based on Payment Activity

	Home equity				Auto and other				Total consumer loans
(In thousands)	June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015
Performing	$	48,788	$	52,719	$	109,440	$	129,345	$	158,228	$	182,064
Nonperforming	558		727		723		893		1,281		1,620
Total	$	49,346	$	53,446	$	110,163	$	130,238	$	159,509	$	183,684

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The following table summarizes information about total loans rated Special Mention or lower as of June 30, 2016 and December 31, 2015. The table below includes consumer loans that are special mention and substandard accruing that are classified in the above table as performing based on payment activity.

	June 30, 2016						December 31, 2015
(In thousands)	Business Activities Loans		Acquired Loans		Total		Business Activities Loans		Acquired Loans		Total
Non-Accrual	$	14,450	$	6,206	$	20,656	$	15,484	$	5,391	$	20,875
Substandard Accruing	52,086		29,647		81,733		60,549		32,560		93,109
Total Classified	66,536		35,853		102,389		76,033		37,951		113,984
Special Mention	23,105		2,111		25,216		29,036		2,259		31,295
Total Criticized	$	89,641	$	37,964	$	127,605	$	105,069	$	40,210	$	145,279

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NOTE 7.               DEPOSITS

A summary of time deposits is as follows:

(In thousands)	June 30, 2016		December 31, 2015
Time less than $100,000	$	544,761	$	545,819
Time $100,000 or more	1,545,341		1,440,781
Total time deposits	$	2,090,102	$	1,986,600

Included in time deposits are brokered deposits of $823.3 million and $784.1 million at June 30, 2016 and December 31, 2015, respectively. Included in the deposit balances contained on the balance sheet are reciprocal deposits of $106.4 million and $101.5 million at June 30, 2016 and December 31, 2015, respectively.

NOTE 8.               BORROWED FUNDS

Borrowed funds at June 30, 2016 and December 31, 2015 are summarized, as follows:

	June 30, 2016				December 31, 2015
			Weighted				Weighted
			Average				Average
(dollars in thousands)	Principal		Rate		Principal		Rate
Short-term borrowings:
Advances from the FHLBB	$	1,110,320	0.54	%	$	1,071,200	0.43	%
Other Borrowings	—		—		—		—
Total short-term borrowings:	1,110,320		0.54		1,071,200		0.43
Long-term borrowings:
Advances from the FHLBB	120,844		1.62		103,135		1.89
Subordinated borrowings	73,608		7.00		73,519		7.00
Junior subordinated borrowings	15,464		2.50		15,464		2.23
Total long-term borrowings:	209,916		3.57		192,118		3.88
Total	$	1,320,236	1.02	%	$	1,263,318	0.96	%

Short term debt includes Federal Home Loan Bank of Boston (“FHLBB”) advances with an original maturity of less than one year and a short-term line-of-credit drawdown through a correspondent bank. The Bank also maintains a $3.0 million secured line of credit with the FHLBB that bears a daily adjustable rate calculated by the FHLBB. There was no outstanding balance on the FHLBB line of credit for the periods ended June 30, 2016 and December 31, 2015.

The Bank is approved to borrow on a short-term basis from the Federal Reserve Bank of Boston as a non-member bank. The Bank has pledged certain loans and securities to the Federal Reserve Bank to support this arrangement. No borrowings with the Federal Reserve Bank took place for the periods ended June 30, 2016 and December 31, 2015.

Long-term FHLBB advances consist of advances with an original maturity of more than one year. The advances outstanding at June 30, 2016 include callable advances totaling $11.0 million, and amortizing advances totaling $1.2 million. The advances outstanding at December 31, 2015 include callable advances totaling $11.0 million, and amortizing advances totaling $1.2 million. All FHLBB borrowings, including the line of credit, are secured by a blanket security agreement on certain qualified collateral, principally all residential first mortgage loans and certain securities.

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A summary of maturities of FHLBB advances as of June 30, 2016 and December 31, 2015 is as follows:

	June 30, 2016
			Weighted
			Average
(in thousands, except rates)	Principal		Rate
Fixed rate advances maturing:
2016	$	1,131,862	0.56	%
2017	83,235		1.49
2018	1,022		2.62
2019	—		—
2020 and beyond	15,045		2.41
Total FHLBB advances	$	1,231,164	0.65	%

The Company does not have variable-rate FHLB advances for the periods ended June 30, 2016 and December 31, 2015.

In September 2012, the Company issued fifteen year subordinated notes in the amount of $75.0 million at a discount of 1.15%. The interest rate is fixed at 6.875% for the first ten years. After ten years, the notes become callable and convert to an interest rate of three-month LIBOR rate plus 5.113%. The subordinated note includes reduction to the note principal balance of $768 thousand and $829 thousand for unamortized debt issuance costs as of June 30, 2016 and December 31 2015, respectively.

The Company holds 100% of the common stock of Berkshire Hills Capital Trust I (“Trust I”) which is included in other assets with a cost of $0.5 million. The sole asset of Trust I is $15.5 million of the Company’s junior subordinated debentures due in 2035. These debentures bear interest at a variable rate equal to LIBOR plus 1.85% and had a rate of 2.50% and 2.23% at June 30, 2016 and December 31, 2015, respectively. The Company has the right to defer payments of interest for up to five years on the debentures at any time, or from time to time, with certain limitations, including a restriction on the payment of dividends to shareholders while such interest payments on the debentures have been deferred. The Company has not exercised this right to defer payments. The Company has the right to redeem the debentures at par value. Trust I is considered a variable interest entity for which the Company is not the primary beneficiary. Accordingly, Trust I is not consolidated into the Company’s financial statements.

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NOTE 9.           CAPITAL RATIOS AND SHAREHOLDERS’ EQUITY

The actual and required capital ratios were as follows:

	June 30, 2016		Regulatory Minimum to be Well Capitalized		December 31, 2015		Regulatory Minimum to be Well Capitalized
Company (consolidated)
Total capital to risk weighted assets	11.4	%	10.0	%	11.9	%	10.0	%
Common Equity Tier 1 Capital to risk weighted assets	9.3		6.5		9.8		6.5
Tier 1 capital to risk weighted assets	9.5		8.0		9.9		8.0
Tier 1 capital to average assets	7.7		5.0		7.7		5.0
Bank
Total capital to risk weighted assets	10.6	%	10.0	%	11.2	%	10.0	%
Common Equity Tier 1 Capital to risk weighted assets	9.4		6.5		9.9		6.5
Tier 1 capital to risk weighted assets	9.4		8.0		9.9		8.0
Tier 1 capital to average assets	7.6		5.0		7.7		5.0

At each date shown, the Company and the Bank met the conditions to be classified as “well capitalized” under the relevant regulatory framework.  To be categorized as well capitalized, an institution must maintain minimum total risk-based, Tier 1 risk-based, and Tier 1 leverage ratios as set forth in the table above.

Effective January 1, 2015, the Company and the Bank became subject to the Basel III rule that requires the Company and the Bank to assess their Common Equity Tier 1 Capital to risk weighted assets and the Company and the Bank each exceed the minimum to be well capitalized. In addition, the final capital rules added a requirement to maintain a minimum conservation buffer, composed of Common equity tier 1 capital, of 2.5% of risk-weighted assets, to be phased in over three years and applied to the Common equity tier 1 risk-based capital ratio, the Tier 1 risk-based capital ratio and the Total risk-based capital ratio. Accordingly, banking organizations, on a fully phased in basis no later than January 1, 2019, must maintain a minimum Common equity tier 1 risk-based capital ratio of 7.0%, a minimum Tier 1 risk-based capital ratio of 8.5% and a minimum Total risk-based capital ratio of 10.5%.

The required minimum conservation buffer began to be phased in incrementally, starting at 0.625% on January 1, 2016 and will increase to 1.25% on January 1, 2017, 1.875% on January 1, 2018 and 2.5% on January 1, 2019. The final capital rules impose restrictions on capital distributions and certain discretionary cash bonus payments if the minimum capital conservation buffer is not met.

At June 30, 2016, the capital levels of both the Company and the Bank exceeded all regulatory capital requirements and their regulatory capital ratios were above the minimum levels required to be considered well capitalized for regulatory purposes. The capital levels of both the Company and the Bank at June 30, 2016 also exceeded the minimum capital requirements including the currently applicable capital conservation buffer of 0.625%.

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Accumulated other comprehensive income (loss)

Components of accumulated other comprehensive income is as follows:

(In thousands)	June 30, 2016			December 31, 2015
Other accumulated comprehensive income, before tax:
Net unrealized holding gain on AFS securities	$	33,609		$	6,316
Net loss on effective cash flow hedging derivatives	(13,921		)	(8,532		)
Net unrealized holding loss on pension plans	(3,468		)	(3,469		)
Income taxes related to items of accumulated other comprehensive income:
Net unrealized holding gain on AFS securities	(12,984		)	(2,437		)
Net loss on effective cash flow hedging derivatives	5,586			3,425
Net unrealized holding loss on pension plans	1,391			1,392
Accumulated other comprehensive income (loss)	$	10,213		$	(3,305	)

The following table presents the components of other comprehensive income for the three and six months ended June 30, 2016 and 2015:

(In thousands)	Before Tax			Tax Effect			Net of Tax
Three Months Ended June 30, 2016
Net unrealized holding gains on AFS securities:	x
Net unrealized gains arising during the period	$	9,573		$	(3,686	)	$	5,887
Less: reclassification adjustment for loss realized in net income	13			(5		)	8
Net unrealized holding gain on AFS securities	9,586			(3,691		)	5,895
Net loss on cash flow hedging derivatives:
Net unrealized loss arising during the period	(1,771		)	711			(1,060		)
Less: reclassification adjustment for losses realized in net income	887			(356		)	531
Net loss on cash flow hedging derivatives	(884		)	355			(529		)
Net unrealized holding loss on pension plans
Net unrealized loss arising during the period	—			—			—
Less: reclassification adjustment for gains (losses) realized in net income	—			—			—
Net unrealized holding loss on pension plans	—			—			—
Other comprehensive income	$	8,702		$	(3,336	)	$	5,366
Three Months Ended June 30, 2015
Net unrealized holding loss on AFS securities:
Net unrealized loss arising during the period	$	(13,687	)	$	5,243		$	(8,444	)
Less: reclassification adjustment for (gains) realized in net income	(2,384		)	857			(1,527		)
Net unrealized holding loss on AFS securities	(16,071		)	6,100			(9,971		)
Net gain on cash flow hedging derivatives:
Net unrealized gain arising during the period	784			(316		)	468
Less: reclassification adjustment for losses realized in net income	—			—			—
Net gain on cash flow hedging derivatives	784			(316		)	468
Net unrealized holding loss on pension plans
Net unrealized loss arising during the period	—			—			—
Less: reclassification adjustment for gains (losses) realized in net income	65			(26		)	39
Net unrealized holding loss on pension plans	65			(26		)	39
Other comprehensive income	$	(15,222	)	$	5,758		$	(9,464	)

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(In thousands)	Before Tax			Tax Effect			Net of Tax
Six Months Ended June 30, 2016
Net unrealized holding gains on AFS securities:
Net unrealized gains arising during the period	$	27,315		$	(10,556	)	$	16,759
Less: reclassification adjustment for (gains) realized in net income	(22		)	8			(14		)
Net unrealized holding gain on AFS securities	27,293			(10,548		)	16,745
Net loss on cash flow hedging derivatives:
Net unrealized loss arising during the period	(6,684		)	2,683			(4,001		)
Less: reclassification adjustment for gains (losses) realized in net income	1,294			(520		)	774
Net loss on cash flow hedging derivatives	(5,390		)	2,163			(3,227		)
Net unrealized holding loss on pension plans
Net unrealized loss arising during the period	—			—			—
Less: reclassification adjustment for gains (losses) realized in net income	—			—			—
Net unrealized holding loss on pension plans	—			—			—
Other comprehensive income	$	21,903		$	(8,385	)	$	13,518
Six Months Ended June 30, 2015
Net unrealized holding loss on AFS securities:
Net unrealized loss arising during the period	$	(4,316	)	$	1,625		$	(2,691	)
Less: reclassification adjustment for (gains) realized in net income	(2,418		)	870			(1,548		)
Net unrealized holding gain on AFS securities	(6,734		)	2,495			(4,239		)
Net loss on cash flow hedging derivatives:
Net unrealized loss arising during the period	(3,117		)	1,256			(1,861		)
Less: reclassification adjustment for (gains) realized in net income	—			—			—
Net gain on cash flow hedging derivatives	(3,117		)	1,256			(1,861		)
Net loss on pension plan:
Net unrealized loss arising during the period	(1,596		)	643			(953		)
Less: reclassification adjustment for losses realized in net income	130			(52		)	78
Net loss on terminated swap	(1,466		)	591			(875		)
Other comprehensive income	$	(11,317	)	$	4,342		$	(6,975	)

45

The following table presents the changes in each component of accumulated other comprehensive income (loss), for the three and six months ended June 30, 2016 and 2015:

(in thousands)	Net unrealized holding gain on AFS Securities			Net loss on effective cash flow hedging derivatives			Net unrealized holding loss on pension plans			Total
Three Months Ended June 30, 2016
Balance at Beginning of Period	$	14,730		$	(7,806	)	$	(2,077	)	$	4,847
Other Comprehensive Gain (Loss) Before reclassifications	5,887			(1,060		)	—			4,827
Amounts Reclassified from Accumulated other comprehensive income	8			531			—			539
Total Other Comprehensive Income (Loss)	5,895			(529		)	—			5,366
Balance at End of Period	$	20,625		$	(8,335	)	$	(2,077	)	$	10,213
Three Months Ended June 30, 2015
Balance at Beginning of Period	$	15,648		$	(4,298	)	$	(2,282	)	$	9,068
Other Comprehensive Gain (Loss) Before reclassifications	(8,444		)	468			—			(7,976		)
Amounts Reclassified from Accumulated other comprehensive income	(1,527		)	—			39			(1,488		)
Total Other Comprehensive (Loss) Income	(9,971		)	468			39			(9,464		)
Balance at End of Period	$	5,677		$	(3,830	)	$	(2,243	)	$	(396	)
Six Months Ended June 30, 2016
Balance at Beginning of Period	$	3,880		$	(5,108	)	$	(2,077	)	$	(3,305	)
Other Comprehensive (Loss) Before reclassifications	16,759			(4,001		)	—			12,758
Amounts Reclassified from Accumulated other comprehensive income	(14		)	774			—			760
Total Other Comprehensive Income (Loss)	16,745			(3,227		)	—			13,518
Balance at End of Period	$	20,625		$	(8,335	)	$	(2,077	)	$	10,213
Six Months Ended June 30, 2015
Balance at Beginning of Period	$	9,916		$	(1,969	)	$	(1,368	)	$	6,579
Other Comprehensive Gain (Loss) Before reclassifications	(2,691		)	(1,861		)	(953		)	(5,505		)
Amounts Reclassified from Accumulated other comprehensive income	(1,548		)	—			78			(1,470		)
Total Other Comprehensive (Loss)	(4,239		)	(1,861		)	(875		)	(6,975		)
Balance at End of Period	$	5,677		$	(3,830	)	$	(2,243	)	$	(396	)

46

The following table presents the amounts reclassified out of each component of accumulated other comprehensive income (loss) for the three and six months ended June 30, 2016 and 2015:

							Affected Line Item in the
	Three Months Ended June 30,						Statement where Net Income
(in thousands)	2016			2015			is Presented
Realized losses (gains) on AFS securities:
	$	13		$	(2,384	)	Non-interest income
	(5		)	857			Tax expense
	8			(1,527		)	Net of tax
Realized losses on cash flow hedging derivatives:
	887			—			Non-interest income
	(356		)	—			Tax expense
	531			—			Net of tax
Realized losses on pension plans:
	—			65			Non-interest income
	—			(26		)	Tax expense
	—			39			Net of tax
Total reclassifications for the period	$	539		$	(1,488	)	Net of tax

							Affected Line Item in the
	Six Months Ended June 30,						Statement where Net Income
(in thousands)	2016			2015			is Presented
Realized (gains) on AFS securities:
	$	(23	)	$	(2,418	)	Non-interest income
	9			870			Tax expense
	(14		)	(1,548		)	Net of tax
Realized losses on cash flow hedging derivatives:
	1,295			—			Non-interest income
	(521		)	—			Tax expense
	774			—			Net of tax
Realized losses on pension plans:
	—			130			Non-interest income
	—			(52		)	Tax expense
	—			78			Net of tax
Total reclassifications for the period	$	760		$	(1,470	)	Net of tax

47

NOTE 10. EARNINGS PER SHARE

Earnings per share have been computed based on the following (average diluted shares outstanding are calculated using the treasury stock method):

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands, except per share data)	2016		2015		2016		2015
Net income	$	15,957	$	10,044	$	31,958	$	18,803
Average number of common shares issued	32,213		29,975		32,188		28,260
Less: average number of treasury shares	1,075		1,193		1,107		1,244
Less: average number of unvested stock award shares	533		481		520		459
Average number of basic common shares outstanding	30,605		28,301		30,561		26,557
Plus: dilutive effect of unvested stock award shares	102		94		99		91
Plus: dilutive effect of stock options outstanding	58		66		65		65
Average number of diluted common shares outstanding	30,765		28,461		30,725		26,713
Earnings per share:
Basic	$	0.52	$	0.35	$	1.05	$	0.71
Diluted	$	0.52	$	0.35	$	1.04	$	0.70

For the six months ended June 30, 2016, 407 thousand shares of restricted stock and 204 thousand options were anti-dilutive and therefore excluded from the earnings per share calculations.  For the six months ended June 30, 2015, 365 thousand shares of restricted stock and 207 thousand options were anti-dilutive and therefore excluded from the earnings per share calculations.

NOTE 11. STOCK-BASED COMPENSATION PLANS

A combined summary of activity in the Company’s stock award and stock option plans for the six months ended June 30, 2016 is presented in the following table:

		Non-vested Stock
		Awards Outstanding				Stock Options Outstanding
				Weighted-				Weighted-
		Number of		Average Grant Date		Number of		Average Exercise
(Shares in thousands)		Shares		Fair Value		Shares		Price
December 31, 2015		488		$	25.09	265		$	21.11
Granted		180		27.39		—		—
Stock options exercised		—		—		(2	)	16.76
Stock awards vested		(100	)	25.32		—		—
Forfeited		(22	)	24.39		—		—
Expired		—		—		(3	)	34.45
June 30, 2016		546		$	26.12	260		$	20.99
Exercisable options at	June 30, 2016					260		$	20.96

During the six months ended June 30, 2016 and 2015, proceeds from stock option exercises totaled $37 thousand and totaled $116 thousand, respectively. During the six months ended June 30, 2016, there were 100 thousand shares issued in connection with vested stock awards. During the six months ended June 30, 2015, there were 86 thousand shares issued in connection with vested stock awards. All of these shares were issued from available treasury stock. Stock-based compensation expense totaled $2.6 million and $2.3 million during the six months ended June 30, 2016 and 2015, respectively. Stock-based compensation expense is recognized over the requisite service period for all awards.

48

NOTE 12. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

As of June 30, 2016, the Company held derivatives with a total notional amount of $1.7 billion. That amount included $300.0 million in interest rate swap derivatives that were designated as cash flow hedges for accounting purposes. The Company also had economic hedges and non-hedging derivatives totaling $1.3 billion and $64.4 million, respectively, which are not designated as hedges for accounting purposes and are therefore recorded at fair value. Economic hedges included interest rate swaps totaling $1.1 billion, risk participation agreements with dealer banks of $67.9 million, and $76.6 million in forward commitment contracts.

As part of the Company’s risk management strategy, the Company enters into interest rate swap agreements to mitigate the interest rate risk inherent in certain of the Company’s assets and liabilities. Interest rate swap agreements involve the risk of dealing with both Bank customers and institutional derivative counterparties and their ability to meet contractual terms. The agreements are entered into with counterparties that meet established credit standards and contain master netting and collateral provisions protecting the at-risk party. The derivatives program is overseen by the Risk Management/Capital Committee of the Company’s Board of Directors. Based on adherence to the Company’s credit standards and the presence of the netting and collateral provisions, the Company believes that the credit risk inherent in these contracts was not significant at June 30, 2016.

The Company pledged collateral to derivative counterparties in the form of cash totaling $853 thousand and securities with an amortized cost of $61.9 million and a fair value of $63.8 million as of June 30, 2016. The Company does not typically require its commercial customers to post cash or securities as collateral on its program of back-to-back economic hedges. However certain language is written into the International Swaps Dealers Association, Inc. (“ISDA”) and loan documents where, in default situations, the Bank is allowed to access collateral supporting the loan relationship to recover any losses suffered on the derivative asset or liability. The Company may need to post additional collateral in the future in proportion to potential increases in unrealized loss positions.

Information about derivative assets and liabilities at June 30, 2016, follows:

			Weighted	Weighted Average Rate				Estimated
	Notional		Average			Contract		Fair Value
	Amount		Maturity	Received		pay rate		Asset (Liability)
	(In thousands)		(In years)					(In thousands)
Cash flow hedges:
Interest rate swaps on FHLBB borrowings	$	200,000	2.6	0.47	%	2.19	%	$	(8,390	)
Forward-starting interest rate swaps on FHLBB borrowings	100,000		3.0	0.47	%	2.48	%	$	(5,531	)
Total cash flow hedges	300,000							(13,921		)
Economic hedges:
Interest rate swap on tax advantaged economic development bond	11,689		13.4	0.61	%	5.09	%	(3,023		)
Interest rate swaps on loans with commercial loan customers	565,898		5.6	1.92	%	3.78	%	(38,466		)
Reverse interest rate swaps on loans with commercial loan customers	565,898		5.6	3.78	%	1.92	%	38,020
Risk Participation Agreements with Dealer Banks	67,868		13.2					60
Forward sale commitments	76,634		0.2					(869		)
Total economic hedges	1,287,987							(4,278		)
Non-hedging derivatives:
Interest rate lock commitments	64,412		0.2					1,259
Total non-hedging derivatives	64,412							1,259
Total	$	1,652,399						$	(16,940	)

49

Information about derivative assets and liabilities at December 31, 2015, follows:

			Weighted	Weighted Average Rate				Estimated
	Notional		Average			Contract		Fair Value
	Amount		Maturity	Received		pay rate		Asset (Liability)
	(In thousands)		(In years)					(In thousands)
Cash flow hedges:
Forward-starting interest rate swaps on FHLBB borrowings	$	300,000	3.3	0.14	%	2.29	%	$	(8,532	)
Total cash flow hedges	300,000							(8,532		)
Economic hedges:
Interest rate swap on tax advantaged economic development bond	11,984		13.9	0.61	%	5.09	%	(2,450		)
Interest rate swaps on loans with commercial loan customers	457,392		6.7	2.18	%	4.49	%	(17,143		)
Reverse interest rate swaps on loans with commercial loan customers	457,392		6.7	4.49	%	2.18	%	17,129
Risk participation agreements with dealer banks	59,016		15.0					(56		)
Forward sale commitments	44,840		0.2					53
Total economic hedges	1,030,624							(2,467		)
Non-hedging derivatives:
Interest rate lock commitments	36,043		0.2					323
Total non-hedging derivatives	36,043							323
Total	$	1,366,667						$	(10,676	)

50

Cash flow hedges

The effective portion of unrealized changes in the fair value of derivatives accounted for as cash flow hedges is reported in other comprehensive income and subsequently reclassified to earnings in the same period or periods during which the hedged transaction is forecasted to affect earnings. Each quarter, 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 item or transaction. The ineffective portion of changes in the fair value of the derivatives is recognized directly in earnings.

The Company has entered into four interest rate swap contracts with an aggregate notional value of $200 million and two forward-starting interest rate swap contracts with an aggregate notional value of $100 million as of June 30, 2016. The two forward starting swaps will become effective in 2016. All have durations of three years. This hedge strategy converts the one month rolling FHLBB borrowings based on the FHLBB’s one month fixed interest rate to fixed interest rates, thereby protecting the Company from floating interest rate variability.

Amounts included in the Consolidated Statements of Income and in the other comprehensive income section of the Consolidated Statements of Comprehensive Income (related to interest rate derivatives designated as hedges of cash flows), were as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2016			2015			2016			2015
Interest rate swaps on FHLBB borrowings:
Unrealized (loss) gain recognized in accumulated other comprehensive loss	$	(1,771	)	$	784		$	(6,684	)	$	(3,117	)
Reclassification of unrealized loss from accumulated other comprehensive income to interest expense	887			—			1,295			—
Net tax benefit (expense) on items recognized in accumulated other comprehensive income	355			(316		)	2,162			1,256
Other comprehensive (loss) gain recorded in accumulated other comprehensive income, net of reclassification adjustments and tax effects	$	(529	)	$	468		$	(3,227	)	$	(1,861	)
Net interest expense recognized in interest expense on hedged FHLBB borrowings	$	887		$	—		$	1,295		$	—

Hedge ineffectiveness on interest rate swaps designated as cash flow hedges was immaterial to the Company’s financial statements during the three and six months ended June 30, 2016 and 2015.

Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate liabilities. During the next twelve months, the Company anticipates reclassification of approximately $5.4 million.

51

Economic hedges

As of June 30, 2016, the Company has an interest rate swap with a $11.7 million notional amount to swap out the fixed rate of interest on an economic development bond bearing a fixed rate of 5.09%, currently within the Company’s trading portfolio under the fair value option, in exchange for a LIBOR-based floating rate. The intent of the economic hedge is to improve the Company’s asset sensitivity to changing interest rates in anticipation of favorable average floating rates of interest over the 21-year life of the bond. The fair value changes of the economic development bond are mostly offset by fair value changes of the related interest rate swap.

The Company also offers certain derivative products directly to qualified commercial borrowers. The Company economically hedges derivative transactions executed with commercial borrowers by entering into mirror-image, offsetting derivatives with third-party financial institutions. The transaction allows the Company’s customer to convert a variable-rate loan to a fixed rate loan. Because the Company acts as an intermediary for its customer, changes in the fair value of the underlying derivative contracts mostly offset each other in earnings. Credit valuation adjustments arising from the difference in credit worthiness of the commercial loan and financial institution counterparties totaled $(372) thousand as of June 30, 2016. The interest income and expense on these mirror image swaps exactly offset each other.

The Company has risk participation agreements with dealer banks. Risk participation agreements occur when the Company participates on a loan and a swap where another bank is the lead. The Company gets paid a fee to take on the risk associated with having to make the lead bank whole on Berkshire’s portion of the pro-rated swap should the borrower default. Changes in fair value are recorded in current period earnings.

The Company utilizes forward sale commitments to hedge interest rate risk and the associated effects on the fair value of interest rate lock commitments and loans originated for sale. The forward sale commitments are accounted for as derivatives with changes in fair value recorded in current period earnings.

The Company uses the following types of forward sale commitments contracts:

• Best efforts loan sales,

• Mandatory delivery loan sales, and

• To Be Announced (“TBA”) mortgage-backed securities sales.

A best efforts contract refers to a loan sale agreement where the Company commits to deliver an individual mortgage loan of a specified principal amount and quality to an investor if the loan to the underlying borrower closes. The Company may enter into a best efforts contract once the price is known, which is shortly after the potential borrower’s interest rate is locked.

A mandatory delivery contract is a loan sale agreement where 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. Generally, the Company may enter into mandatory delivery contracts shortly after the loan closes with a customer.

The Company may sell TBA mortgage-backed securities to hedge the changes in fair value of interest rate lock commitments and held for sale loans, which do not have corresponding best efforts or mandatory delivery contracts. These security sales transactions are closed once mandatory contracts are written. On the closing date the price of the security is locked-in, and the sale is paired-off with a purchase of the same security. Settlement of the security purchase/sale transaction is done with cash on a net-basis.

52

Non-hedging derivatives

The Company enters into interest rate lock commitments (“IRLCs”) for residential mortgage loans, which commit the Company to lend funds to a potential borrower at a specific interest rate and within a specified period of time. IRLCs that relate to the origination of mortgage loans that will be held for sale are considered derivative financial instruments under applicable accounting guidance. Outstanding IRLCs expose the Company to the risk that the price of the mortgage loans underlying the commitments may decline due to increases in mortgage interest rates from inception of the rate lock to the funding of the loan. The IRLCs are free-standing derivatives which are carried at fair value with changes recorded in noninterest income in the Company’s consolidated statements of income. Changes in the fair value of IRLCs subsequent to inception are based on changes in the fair value of the underlying loan resulting from the fulfillment of the commitment and changes in the probability that the loan will fund within the terms of the commitment, which is affected primarily by changes in interest rates and the passage of time.

Amounts included in the Consolidated Statements of Income related to economic hedges and non-hedging derivatives were as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2016			2015			2016			2015
Economic hedges
Interest rate swap on industrial revenue bond:
Unrealized gain (loss) recognized in other non-interest income	$	(292	)	$	331		$	(831	)	$	60
Interest rate swaps on loans with commercial loan customers:
Unrealized (loss) gain recognized in other non-interest income	(7,725		)	3,889			(21,322		)	775
Reverse interest rate swaps on loans with commercial loan customers:
Unrealized gain (loss) recognized in other non-interest income	7,725			(3,889		)	21,322			(755		)
(Unfavorable) Favorable change in credit valuation adjustment recognized in other non-interest income	(372		)	56			(433		)	57
Risk Participation Agreements:
Unrealized gain (loss) recognized in other non-interest income	33			31			116			(40		)
Forward Commitments:
Unrealized (loss) gain recognized in other non-interest income	(869		)	475			(1,316		)	87
Realized gain (loss) in other non-interest income	50			504			(333		)	413
Non-hedging derivatives
Interest rate lock commitments
Unrealized gain recognized in other non-interest income	$	1,259		$	382		$	2,061		$	1,359
Realized gain in other non-interest income	896			186			1,745			941

53

Assets and Liabilities Subject to Enforceable Master Netting Arrangements

Interest Rate Swap Agreements (“Swap Agreements”)

The Company enters into swap agreements to facilitate the risk management strategies for commercial banking customers. The Company mitigates this risk by entering into equal and offsetting swap agreements with highly rated third party financial institutions. The swap agreements are free-standing derivatives and are recorded at fair value in the Company’s consolidated statements of condition. The Company is party to master netting arrangements with its financial institution counterparties; however, the Company does not offset assets and liabilities under these arrangements for financial statement presentation purposes. The master netting arrangements provide for a single net settlement of all swap agreements, as well as collateral, in the event of default on, or termination of, any one contract. Collateral generally in the form of marketable securities is received or posted by the counterparty with net liability positions, respectively, in accordance with contract thresholds.

The Company had net asset positions with its commercial banking counterparties totaling $38.0 million and $17.1 million as of June 30, 2016 and December 31, 2015, respectively. The Company had net liability positions with its financial institution counterparties totaling $55.5 million and $28.2 million as of June 30, 2016 and December 31, 2015, respectively. At June 30, 2016, the Company did not have a net liability position with its commercial banking counterparties. The collateral posted by the Company that covered liability positions was $55.5 million and $28.2 million as of June 30, 2016 and December 31, 2015, respectively.

The following table presents the assets and liabilities subject to an enforceable master netting arrangement as of June 30, 2016 and December 31, 2015:

Offsetting of Financial Assets and Derivative Assets

	Gross Amounts of		Gross Amounts Offset in the		Net Amounts of Assets Presented in the		Gross Amounts Not Offset in the Statements of Condition
	Recognized		Statements of		Statements of		Financial		Cash
(in thousands)	Assets		Condition		Condition		Instruments		Collateral Received		Net Amount
June 30, 2016
Interest Rate Swap Agreements:
Institutional counterparties	$	132	$	—	$	132	$	—	$	—	$	132
Commercial counterparties	38,020		—		38,020		—		—		38,020
Total	$	38,152	$	—	$	38,152	$	—	$	—	$	38,152

Offsetting of Financial Liabilities and Derivative Liabilities

	Gross Amounts of			Gross Amounts Offset in the		Net Amounts of Liabilities Presented in the			Gross Amounts Not Offset in the Statements of Condition
	Recognized			Statements of		Statements of			Financial		Cash
(in thousands)	Liabilities			Condition		Condition			Instruments		Collateral Pledged		Net Amount
June 30, 2016
Interest Rate Swap Agreements:
Institutional counterparties	$	(55,528	)	$	46	$	(55,482	)	$	54,832	$	650	$	—
Commercial counterparties	—			—		—			—		—		—
Total	$	(55,528	)	$	46	$	(55,482	)	$	54,832	$	650	$	—

54

Offsetting of Financial Assets and Derivative Assets

	Gross Amounts of		Gross Amounts Offset in the		Net Amounts of Assets Presented in the		Gross Amounts Not Offset in the Statements of Condition
	Recognized		Statements of		Statements of		Financial		Cash
(in thousands)	Assets		Condition		Condition		Instruments		Collateral Received		Net Amount
December 31, 2015
Interest Rate Swap Agreements:
Institutional counterparties	$	40	$	—	$	40	$	—	$	—	$	40
Commercial counterparties	17,129		—		17,129		—		—		17,129
Total	$	17,169	$	—	$	17,169	$	—	$	—	$	17,169

Offsetting of Financial Liabilities and Derivative Liabilities

	Gross Amounts of			Gross Amounts Offset in the		Net Amounts of Liabilities Presented in the			Gross Amounts Not Offset in the Statements of Condition
	Recognized			Statements of		Statements of			Financial		Cash
(in thousands)	Liabilities			Condition		Condition			Instruments		Collateral Pledged		Net Amount
December 31, 2015
Interest Rate Swap Agreements:
Institutional counterparties	$	(28,220	)	$	—	$	(28,220	)	$	18,500	$	9,720	$	—
Commercial counterparties	—			—		—			—		—		—
Total	$	(28,220	)	$	—	$	(28,220	)	$	18,500	$	9,720	$	—

55

NOTE 13. FAIR VALUE MEASUREMENTS

A description of the valuation methodologies used for assets and liabilities measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. These valuation methodologies were applied to all of the Company’s financial assets and financial liabilities that are carried at fair value.

Recurring Fair Value Measurements

The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of June 30, 2016 and December 31, 2015, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value.

	June 30, 2016
	Level 1		Level 2		Level 3		Total
(In thousands)	Inputs		Inputs		Inputs		Fair Value
Trading security	$	—	$	—	$	14,479	$	14,479
Available-for-sale securities:
Municipal bonds and obligations	—		111,590		—		111,590
Agency collateralized mortgage obligations	—		679,506		—		679,506
Agency residential mortgage-backed securities	—		109,613		—		109,613
Agency commercial mortgage-backed securities	—		63,251		—		63,251
Corporate bonds	—		45,703		—		45,703
Trust preferred securities	—		11,739		—		11,739
Other bonds and obligations	—		3,222		—		3,222
Marketable equity securities	47,313		1,433		—		48,746
Loans held for sale (1)	—		21,182		—		21,182
Derivative assets	—		38,020		1,259		39,279
Derivative liabilities	680		55,350		189		56,219

(1) Loans held for sale excludes $1.3 million of loans held for sale shown on the balance sheet that are held at lower of cost or market.

	December 31, 2015
	Level 1		Level 2		Level 3		Total
(In thousands)	Inputs		Inputs		Inputs		Fair Value
Trading security	$	—	$	—	$	14,189	$	14,189
Available-for-sale securities:
Municipal bonds and obligations	—		104,561		—		104,561
Agency collateralized mortgage obligations	—		833,036		—		833,036
Agency residential mortgage-backed securities	—		126,829		—		126,829
Agency commercial mortgage-backed securities	—		—		—		—
Corporate bonds	—		41,022		—		41,022
Trust preferred securities	—		11,901		—		11,901
Other bonds and obligations	—		3,141		—		3,141
Marketable equity securities	32,925		334		708		33,967
Loans Held for Sale	—		13,191		—		13,191
Derivative assets	45		17,130		332		17,507
Derivative liabilities	—		28,181		—		28,181

56

There were no transfers between levels during the three months endedJune 30, 2016or2015.During the six months ended June 30, 2016, the Company had one transfer of $708 thousand in marketable equity securities from Level 3 to Level 2 based on a change in valuation technique driven by the availability of market data. There were no transfers between levels during the six months ended June 30, 2015.

Trading Security at Fair Value. The Company holds one security designated as a trading security. It is a tax advantaged economic development bond issued to the Company by a local nonprofit which provides wellness and health programs. The determination of the fair value for this security is determined based on a discounted cash flow methodology. Certain inputs to the fair value calculation are unobservable and there is little to no market activity in the security; therefore, the security meets the definition of a Level 3 security.  The discount rate used in the valuation of the security is sensitive to movements in the 3-month LIBOR rate.

Securities Available for Sale. AFS securities classified as Level 1 consist of publicly-traded equity securities for which the fair values can be obtained through quoted market prices in active exchange markets. AFS securities classified as Level 2 include most of the Company’s debt securities. The pricing on Level 2 was primarily sourced from third party pricing services, overseen by management, and is based on models that consider standard input factors such as dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond’s terms and condition, among other things.

Loans held for sale. The Company elected the fair value option for all loans held for sale (HFS) originated for sale on or after May 1, 2012.  Loans HFS are classified as Level 2 as the fair value is based on input factors such as quoted prices for similar loans in active markets.

					Aggregate Fair Value
June 30, 2016	Aggregate		Aggregate		Less Aggregate
(In thousands)	Fair Value		Unpaid Principal		Unpaid Principal
Loans Held for Sale (1)	$	21,182	$	20,321	$	861

(1) Loans held for sale excludes $1.3 million of loans held for sale shown on the balance sheet that are held at lower of cost or market.

					Aggregate Fair Value
December 31, 2015	Aggregate		Aggregate		Less Aggregate
(In thousands)	Fair Value		Unpaid Principal		Unpaid Principal
Loans Held for Sale	$	13,191	$	12,914	$	277

The changes in fair value of loans held for sale for the three and six months ended June 30, 2016, were gains of $369 thousand and $584 thousand, respectively. The changes in fair value of loans held for sale for the three and six months ended June 30, 2015, were losses of $285 thousand and $71 thousand, respectively. The changes in fair value are included in mortgage banking income in the Consolidated Statements of Income.

57

Derivative Assets and Liabilities

Interest Rate Swap. The valuation of the Company’s interest rate swaps is obtained from a third-party pricing service and is determined using a discounted cash flow analysis on the expected cash flows of each derivative. The pricing analysis is based on observable inputs for the contractual terms of the derivatives, including the period to maturity and interest rate curves.

The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings.

Although the Company has determined that the majority of the inputs used to value its interest rate derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. However, as of June 30, 2016, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.

Interest Rate Lock Commitments. The Company enters into IRLCs for residential mortgage loans, which commit the Company to lend funds to a potential borrower at a specific interest rate and within a specified period of time.  The estimated fair value of commitments to originate residential mortgage loans for sale is based on quoted prices for similar loans in active markets. However, this value is adjusted by a factor which considers the likelihood that the loan in a lock position will ultimately close, and by the non-refundable costs of originating the loan. The closing ratio is derived from the Bank’s internal data and is adjusted using significant management judgment. The costs to originate are primarily based on the Company’s internal commission rates that are not observable. As such, IRLCs are classified as Level 3 measurements.

Forward Sale Commitments. The Company utilizes forward sale commitments as economic hedges against potential changes in the values of the IRLCs and loans originated for sale. To Be Announced (“TBA”) mortgage-backed securities forward commitment sales are used as the hedging instrument, are classified as Level 1, and consist of publicly-traded debt securities for which identical fair values can be obtained through quoted market prices in active exchange markets. The fair values of the Company’s best efforts and mandatory delivery loan sale commitments are determined similarly to the IRLCs using quoted prices in the market place that are observable.  However, costs to originate and closing ratios included in the calculation are internally generated and are based on management’s judgment and prior experience, which are considered factors that are not observable. As such, best efforts and mandatory forward commitments are classified as Level 3 measurements.

58

The table below presents the changes in Level 3 assets and liabilities that were measured at fair value on a recurring basis for the three and six months ended June 30, 2016 and 2015.

	Assets (Liabilities)
				Securities			Interest Rate
	Trading			Available			Lock			Forward
(In thousands)	Security			for Sale			Commitments			Commitments
Three Months Ended June 30, 2016
March 31, 2016	$	14,474		$	—		$	802		$	(143	)
Unrealized gain, net recognized in other non-interest income	153			—			1,711			—
Unrealized gain included in accumulated other comprehensive loss	—			—			—			(46		)
Paydown of trading security	(148		)	—			—			—
Transfers to held for sale loans	—			—			(1,254		)	—
June 30, 2016	$	14,479		$	—		$	1,259		$	(189	)
Six Months Ended June 30, 2016
December 31, 2015	$	14,189		$	708		$	323		$	9
Unrealized (loss) gain, net recognized in other non-interest income	585			—			2,917			—
Transfers to Level 2	—			(708		)	—			(198		)
Paydown of trading security	(295		)	—			—			—
Transfers to held for sale loans	—			—			(1,981		)	—
June 30, 2016	$	14,479		$	—		$	1,259		$	(189	)
Unrealized gains (losses) relating to instruments still held at June 30, 2016	$	2,790		$	—		$	1,259		$	(189	)

59

	Assets (Liabilities)
				Securities			Interest Rate
	Trading			Available			Lock			Forward
(In thousands)	Security			for Sale			Commitments			Commitments
Three Months Ended June 30, 2015
March 31, 2015	$	14,970		$	719		$	977		$	(93	)
Sale of Marketable Equity Security	—			—			—			—
Unrealized (loss) gain, net recognized in other non-interest income	(451		)	—			941			—
Unrealized gain included in accumulated other comprehensive loss	—			54			—			143
Paydown of trading account security	(141		)	—			—			—
Transfers to held for sale loans	—			—			(1,536		)	—
June 30, 2015	$	14,378		$	773		$	382		$	50
Six Months Ended June 30, 2015
December 31, 2014	$	14,909		$	2,326		$	625		$	(93	)
Sale of Marketable Equity Security	—			(1,327		)	—			—
Unrealized (loss) gain, net recognized in other non-interest income	(248		)	—			2,671			—
Unrealized gain included in accumulated other comprehensive loss	—			(226		)	—			143
Paydown of trading account security	(283		)	—			—			—
Transfers to held for sale loans	—			—			(2,914		)	—
June 30, 2015	$	14,378		$	773		$	382		$	50
Unrealized gains (losses) relating to instruments still held at June 30, 2015	$	2,106		$	3		$	382		$	50

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Quantitative information about the significant unobservable inputs within Level 3 recurring assets and liabilities is as follows:

	Fair Value					Significant Unobservable Input
(In thousands)	June 30, 2016			Valuation Techniques	Unobservable Inputs	Value
Assets (Liabilities)
Trading Security	$	14,479		Discounted Cash Flow	Discount Rate	1.70		%
Forward Commitments	(189		)	Historical Trend	Closing Ratio	89.35		%
				Pricing Model	Origination Costs, per loan	$	2,500
Interest Rate Lock Commitment	1,259			Historical Trend	Closing Ratio	89.35		%
				Pricing Model	Origination Costs, per loan	$	2,500
Total	$	15,549

	Fair Value				Significant Unobservable Input
(In thousands)	December 31, 2015		Valuation Techniques	Unobservable Inputs	Value
Assets (Liabilities)
Trading Security	$	14,189	Discounted Cash Flow	Discount Rate	2.49		%
AFS Securities	708		Pricing Model	Median Peer Price/Tangible Book Value Percentage Multiple	88.52		%
Forward Commitments	9		Historical Trend	Closing Ratio	92.57		%
			Pricing Model	Origination Costs, per loan	$	2,500
Interest Rate Lock Commitment	323		Historical Trend	Closing Ratio	92.57		%
			Pricing Model	Origination Costs, per loan	$	2,500
Total	$	15,229

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Non-Recurring Fair Value Measurements

The Company is required, on a non-recurring basis, to adjust the carrying value or provide valuation allowances for certain assets using fair value measurements in accordance with GAAP. The following is a summary of applicable non-recurring fair value measurements. There are no liabilities measured at fair value on a non-recurring basis.

	June 30, 2016		December 31, 2015		Three months ended June 30, 2016			Six months ended June 30, 2016			Fair Value Measurement Date as of June 30, 2016
	Level 3		Level 3		Total			Total			Level 3
(In thousands)	Inputs		Inputs		Gains (Losses)			Gains (Losses)			Inputs
Assets
Impaired loans	$	22,546	$	11,657	$	(180	)	$	10,889		June 2016
Capitalized servicing rights	9,498		5,187		—			—			May 2016
Other real estate owned	595		1,725		(3		)	(56		)	Jan. 2015 - March 2016
Total	$	32,639	$	18,569	$	(183	)	$	10,833

Quantitative information about the significant unobservable inputs within Level 3 non-recurring assets is as follows:

	Fair Value
(in thousands)	June 30, 2016		Valuation Techniques	Unobservable Inputs	Range (Weighted Average) (a)
Assets
Impaired loans	$	22,546	Fair value of collateral	Loss severity	0.23% to 40.66% (5.24%)
				Appraised value	$5.0 to $3,513.9 ($1365.5)
Capitalized servicing rights	9,498		Discounted cash flow	Constant prepayment rate (CPR)	2.36% to 15.23% (9.66%)
				Discount rate	7.74% to 14.00% (11.30%)
Other real estate owned	595		Fair value of collateral	Appraised value	$46 to $1200.0 ($1,087.4)
Total	$	32,639

(a)  Where dollar amounts are disclosed, the amounts represent the lowest and highest fair value of the respective assets in the population except for adjustments for market/property conditions, which represents the range of adjustments to individuals properties.

	Fair Value
(in thousands)	December 31, 2015		Valuation Techniques	Unobservable Inputs	Range (Weighted Average) (a)
Assets
Impaired loans	$	11,657	Fair value of collateral	Loss severity	.05% to 29.50% (7.55%)
				Appraised value	$46.3 to $1962.0 ($999.7)
Capitalized servicing rights	5,187		Discounted cash flow	Constant prepayment rate (CPR)	7.17% to 12.06% (10.02%)
				Discount rate	10.00% to 15.00 (10.88%)
Other real estate owned	1,725		Fair value of collateral	Appraised value	$39 to $1,200.0 ($919.9)
Total	$	18,569

(a)  Where dollar amounts are disclosed, the amounts represent the lowest and highest fair value of the respective assets in the population except for adjustments for market/property conditions, which represents the range of adjustments to individuals properties.

There were no Level 1 or Level 2 nonrecurring fair value measurements for the periods ended June 30, 2016 and December 31, 2015.

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Impaired Loans. Loans are generally not recorded at fair value on a recurring basis. Periodically, the Company records non-recurring adjustments to the carrying value of loans based on fair value measurements for partial charge-offs of the uncollectible portions of those loans. Non-recurring adjustments can also include certain impairment amounts for collateral-dependent loans calculated when establishing the allowance for credit losses. Such amounts are generally based on the fair value of the underlying collateral supporting the loan and, as a result, the carrying value of the loan less the calculated valuation amount does not necessarily represent the fair value of the loan. Real estate collateral is typically valued using appraisals or other indications of value based on recent comparable sales of similar properties or assumptions generally observable in the marketplace. However, the choice of observable data is subject to significant judgment, and there are often adjustments based on judgment in order to make observable data comparable and to consider the impact of time, the condition of properties, interest rates, and other market factors on current values. Additionally, commercial real estate appraisals frequently involve discounting of projected cash flows, which relies inherently on unobservable data. Therefore, nonrecurring fair value measurement adjustments that relate to real estate collateral have generally been classified as Level 3. Estimates of fair value for other collateral that supports commercial loans are generally based on assumptions not observable in the marketplace and therefore such valuations have been classified as Level 3. 

Capitalized loan servicing rights.  A loan servicing right asset represents the amount by which the present value of the estimated future net cash flows to be received from servicing loans exceed adequate compensation for performing the servicing. The fair value of servicing rights is estimated using a present value cash flow model. The most important assumptions used in the valuation model are the anticipated rate of the loan prepayments and discount rates. Adjustments are only recorded when the discounted cash flows derived from the valuation model are less than the carrying value of the asset. Although some assumptions in determining fair value are based on standards used by market participants, some are based on unobservable inputs and therefore are classified in Level 3 of the valuation hierarchy.

Other real estate owned (“OREO”). OREO results from the foreclosure process on residential or commercial loans issued by the Bank. Upon assuming the real estate, the Company records the property at the fair value of the asset less the estimated sales costs. Thereafter, OREO properties are recorded at the lower of cost or fair value less the estimated sales costs. OREO fair values are primarily determined based on Level 3 data including sales comparables and appraisals.

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Summary of Estimated Fair Values of Financial Instruments

The estimated fair values, and related carrying amounts, of the Company’s financial instruments follow. Certain financial instruments and all non-financial instruments are excluded from disclosure requirements. Accordingly, the aggregate fair value amounts presented herein may not necessarily represent the underlying fair value of the Company.

	June 30, 2016
	Carrying		Fair
(In thousands)	Amount		Value		Level 1		Level 2		Level 3
Financial Assets
Cash and cash equivalents	$	74,579	$	74,579	$	74,579	$	—	$	—
Trading security	14,479		14,479		—		—		14,479
Securities available for sale	1,073,370		1,073,370		47,313		1,026,057		—
Securities held to maturity	132,010		141,544		—		—		141,544
FHLB bank stock and restricted securities	68,242		68,242		—		68,242		—
Net loans	5,958,904		6,051,886		—		—		6,051,886
Loans held for sale	22,450		22,450		—		22,450		—
Accrued interest receivable	22,255		22,255		—		22,255		—
Cash surrender value of bank-owned life insurance policies	127,000		127,000		—		127,000		—
Derivative assets	39,279		39,279		—		38,020		1,259
Assets held for sale	815		815		—		815		—
Financial Liabilities
Total deposits	$	5,656,724	$	5,661,984	$	—	$	5,661,984	$	—
Short-term debt	1,110,320		1,110,322		—		1,110,322		—
Long-term Federal Home Loan Bank advances	120,844		121,212		—		121,212		—
Subordinated borrowings	89,072		95,253		—		95,253		—
Derivative liabilities	56,219		56,219		680		55,350		189

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	December 31, 2015
	Carrying		Fair
(In thousands)	Amount		Value		Level 1		Level 2		Level 3
Financial Assets
Cash and cash equivalents	$	103,562	$	103,562	$	103,562	$	—	$	—
Trading security	14,189		14,189		—		—		14,189
Securities available for sale	1,154,457		1,154,457		32,925		1,120,824		708
Securities held to maturity	131,652		136,904		—		—		136,904
FHLB bank stock and restricted securities	71,018		71,018		—		71,018		—
Net loans	5,685,928		5,727,570		—		—		5,727,570
Loans held for sale	13,191		13,191		—		13,191		—
Accrued interest receivable	20,940		20,940		—		20,940		—
Cash surrender value of bank-owned life insurance policies	125,233		125,233		—		125,233		—
Derivative assets	17,507		17,507		45		17,130		332
Assets held for sale	278		278		—		278		—
Financial Liabilities
Total deposits	$	5,589,135	$	5,582,835	$	—	$	5,582,835	$	—
Short-term debt	1,071,200		1,071,044		—		1,071,044		—
Long-term Federal Home Loan Bank advances	103,135		103,397		—		103,397		—
Subordinated borrowings	89,812		93,291		—		93,291		—
Derivative liabilities	28,181		28,181		—		28,181		—

Other than as discussed above, the following methods and assumptions were used by management to estimate the fair value of significant classes of financial instruments for which it is practicable to estimate that value.

Cash and cash equivalents. Carrying value is assumed to represent fair value for cash and cash equivalents that have original maturities of ninety days or less.

FHLB bank stock and restricted securities. Carrying value approximates fair value based on the redemption provisions of the issuers.

Cash surrender value of life insurance policies. Carrying value approximates fair value.

Loans, net. The carrying value of the loans in the loan portfolio is based on the cash flows of the loans discounted over their respective loan origination rates. The origination rates are adjusted for substandard and special mention loans to factor the impact of declines in the loan’s credit standing. The fair value of the loans is estimated by discounting future cash flows using the current interest rates at which similar loans with similar terms would be made to borrowers of similar credit quality.

Accrued interest receivable. Carrying value approximates fair value.

Deposits. The fair value of demand, non-interest bearing checking, savings and money market deposits is determined as the amount payable on demand at the reporting date. The fair value of time deposits is estimated by discounting the estimated future cash flows using market rates offered for deposits of similar remaining maturities.

Borrowed funds. The fair value of borrowed funds is estimated by discounting the future cash flows using market rates for similar borrowings.  Such funds include all categories of debt and debentures in the table above.

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Subordinated borrowings. The Company utilizes a pricing service along with internal models to estimate the valuation of its junior subordinated debentures. The junior subordinated debentures re-price every ninety days.

Off-balance-sheet financial instruments. Off-balance-sheet financial instruments include standby letters of credit and other financial guarantees and commitments considered immaterial to the Company’s financial statements.

NOTE 14. NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES

Presented below is net interest income after provision for loan losses for the three and six months ended June 30, 2016 and 2015, respectively.

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2016		2015		2016		2015
Net interest income	$	57,441	$	52,637	$	115,138	$	98,130
Provision for loan losses	4,522		4,204		8,528		8,055
Net interest income after provision for loan losses	$	52,919	$	48,433	$	106,610	$	90,075

NOTE 15. SUBSEQUENT EVENTS

On June 24, 2016, the Company entered into an agreement and plan of merger with First Choice Bank ("First Choice"), the parent company of First Choice Loan Services ("FCLS"), pursuant to which First Choice will merge with and into Berkshire Bank in a transaction to be accounted for as a business combination. It is expected that FCLS will become an operating subsidiary of the Bank. Headquartered in Lawrenceville, New Jersey, First Choice had $1.1 billion in assets as of June 30, 2016 (unaudited) and operates eight banking offices providing a range of banking services in central N.J. and greater Philadelphia.

If the Merger is completed, each outstanding share of First Choice Bank common stock will be converted into the right to receive 0.5773 shares of the Company's common stock. In addition, each outstanding share of First Choice preferred stock will be converted into the right to receive such number of the Company's common stock equal to the number of shares of First Choice common stock issuable upon the conversion of the First Choice preferred stock multiplied by 0.5773.

The transaction is subject to closing conditions, including the receipt of regulatory approvals and approval by the shareholders of First Choice. The merger is currently expected to be completed in the fourth quarter of 2016. If the merger is not consummated under specified circumstances, First Choice has agreed to pay the Company a termination fee of $4.1 million.

This agreement and plan of merger had no significant effect on the Company’s financial statements for the periods presented.

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ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

Management’s discussion and analysis of financial condition and results of operations is intended to assist in understanding the financial condition and results of operations of the Company. The following discussion and analysis should be read in conjunction with the Company’s consolidated financial statements and the notes thereto appearing in Part I, Item 1 of this document and with the Company’s consolidated financial statements and the notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the 2015 Annual Report on Form 10-K. In the following discussion, income statement comparisons are against the same period of the previous year and balance sheet comparisons are against the previous fiscal year-end, unless otherwise noted. Operating results discussed herein are not necessarily indicative of the results for the year 2016 or any future period. In management’s discussion and analysis of financial condition and results of operations, certain reclassifications have been made to make prior periods comparable. Tax-equivalent adjustments during the current period are the result of increasing income from tax-advantaged securities by an amount equal to the taxes that would be paid if the income were fully taxable based on a 40.1% marginal income tax rate. In the discussion, references to earnings per share refer to diluted earnings per share unless otherwise specified.

Berkshire Hills Bancorp (“Berkshire” or “the Company”) is a Delaware corporation headquartered in Pittsfield, Massachusetts and the holding company for Berkshire Bank (“the Bank”) and Berkshire Insurance Group. Established in 1846, the Bank operates as a commercial bank under a Massachusetts trust company charter. Berkshire Bank operates under the brand America’s Most Exciting Bank®.

Berkshire is a regional financial services company that seeks to distinguish itself over the long term based on the following attributes:

• Strong growth from organic, de novo, product, and acquisition strategies

• Solid capital, core funding, and risk management culture

• Experienced executive team focused on earnings and stockholder value

• Distinctive brand and culture as America’s Most Exciting Bank®

• Diversified integrated financial service revenues

• Positioned to be regional consolidator in attractive markets.

Shown below is a profile of the Company:

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On April 17, 2015, Berkshire completed the acquisition of Springfield, MA based Hampden Bancorp, Inc. (“Hampden"). On August 7, 2015, Berkshire Bank completed the acquisition of Firestone Financial Corp. (“Firestone”), a commercial specialty finance company providing secured installment loan equipment financing for small and medium-sized businesses. On April 29, 2016, Berkshire acquired certain assets related to the SBA lending operations of 44 Business Capital LLC.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this document that are not historical facts may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (referred to as the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (referred to as the Securities Exchange Act), and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. You can identify these statements from the use of the words “may,” “will,” “should,” “could,” “would,” “plan,” “potential,” “estimate,” “project,” “believe,” “intend,” “anticipate,” “expect,” “target” and similar expressions. These forward-looking statements are subject to significant risks, assumptions and uncertainties, including among other things, changes in general economic and business conditions, increased competitive pressures, changes in the interest rate environment, legislative and regulatory change, changes in the financial markets, and other risks and uncertainties disclosed from time to time in documents that Berkshire Hills Bancorp files with the Securities and Exchange Commission, including the Annual Report on Form 10-K for the fiscal year ended December 31, 2015 and the Risk Factors in Item 1A of this report. Because of these and other uncertainties, Berkshire’s actual results, performance or achievements, or industry results, may be materially different from the results indicated by these forward-looking statements. In addition, Berkshire’s past results of operations do not necessarily indicate Berkshire’s combined future results. You should not place undue reliance on any of the forward-looking statements, which speak only as of the dates on which they were made. Berkshire is not undertaking an obligation to update forward-looking statements, even though its situation may change in the future, except as required under federal securities law. Berkshire qualifies all of its forward-looking statements by these cautionary statements.

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SELECTED FINANCIAL DATA

The following summary data is based in part on the consolidated financial statements and accompanying notes and other information appearing elsewhere in this or prior Forms 10-Q.

	At or for the						At or for the
	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
PER COMMON SHARE DATA (1)
Net earnings, diluted	$	0.52		$	0.35		$	1.04		$	0.70
Adjusted earnings, diluted (2)	0.54			0.51			1.07			1.01
Total book value	29.64			28.02			29.64			28.02
Tangible book value (2)	18.44			17.16			18.44			17.16
Dividends	0.20			0.19			0.40			0.38
Common stock price:
High	28.18			29.30			28.93			29.30
Low	24.80			26.77			24.71			24.27
Close	26.92			28.48			26.92			28.48
PERFORMANCE RATIOS (1)(3)
Return on assets	0.82		%	0.56		%	0.82		%	0.55		%
Adjusted return on assets (2)	0.85			0.81			0.85			0.79
Return on equity	7.17			5.05			7.18			5.03
Adjusted return on equity (2)	7.42			7.32			7.41			7.20
Adjusted return on tangible equity (2)	12.45			12.30			12.32			12.23
Net interest margin, fully taxable equivalent (FTE) (4)	3.31			3.30			3.32			3.24
Net interest margin, excluding purchased loan accretion and FTE (2)	3.20			3.16			3.21			3.15
Fee income/Net interest and fee income	21.16			22.92			21.76			23.08
Efficiency ratio (2)	58.71			61.51			59.29			62.34
GROWTH
Total commercial loans, (annualized)	15		%	53		%	11		%	34		%
Total loans, (annualized)	19			47			10			26
Total deposits, (annualized)	5			51			2			29
Total net revenues, (compared to prior year)	4			18			14			20
Earnings per share, (compared to prior year)	49			(24		)	48			69
Adjusted earnings per share, (compared to prior year) (2)	5			16			5			17
FINANCIAL DATA:(In millions) (1)
Total assets	$	8,044		$	7,519		$	8,044		$	7,519
Total earning assets	7,327			6,740			7,327			6,740
Total investments	1,288			1,379			1,288			1,379
Total borrowings	1,320			1,266			1,320			1,266
Total loans	6,000			5,285			6,000			5,285
Allowance for loan losses	41			37			41			37
Total intangible assets	349			321			349			321
Total deposits	5,657			5,322			5,657			5,322
Total common stockholders’ equity	923			827			923			827
Net Income	16.0			10.0			32.0			18.8
Adjusted income (2)	16.5			14.6			33.0			26.9

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	At or for the						At or for the
	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
ASSET QUALITY AND CONDITION RATIOS(1)(5)
Net charge-offs (annualized)/average loans	0.22		%	0.26		%	0.22		%	0.26		%
Allowance for loan losses/total loans	0.69			0.70			0.69			0.70
Loans/deposits	106			99			106			99
Shareholders' equity to total assets	11.48			11.00			11.48			11.00
Tangible shareholders' equity to tangible assets (2)(6)	7.46			7.04			7.46			7.04
FOR THE PERIOD:(In thousands) (1)
Net interest income	$	57,441		$	52,637		$	115,138		$	98,130
Non-interest income	14,555			16,780			30,185			29,342
Provision for loan losses	4,522			4,204			8,528			8,055
Non-interest expense	46,268			54,025			93,368			99,173
Net income	15,957			10,044			31,958			18,803
Adjusted Income (2)	16,514			14,556			33,003			26,930

______________________________________

(1)  Adjusted measurements are non-GAAP financial measures that are adjusted to exclude net non-core charges primarily related to acquisitions and restructuring activities. Refer to the Reconciliation of Non-GAAP Financial Measures on page 75 for additional information.

(2) Non-GAAP financial measure.

(3)  All performance ratios are annualized and are based on average balance sheet amounts, where applicable.

(4) Fully taxable equivalent considers the impact of tax advantaged investment securities and loans.

(5)  Generally accepted accounting principles require that loans acquired in a business combination be recorded at fair value, whereas loans from business activities are recorded at cost. The fair value of loans acquired in a business combination includes expected loan losses, and there is no loan loss allowance recorded for these loans at the time of acquisition. Accordingly, the ratio of the loan loss allowance to total loans is reduced as a result of the existence of such loans, and this measure is not directly comparable to prior periods. Similarly, net loan charge-offs are normally reduced for loans acquired in a business combination since these loans are recorded net of expected loan losses. Therefore, the ratio of net loan charge-offs to average loans is reduced as a result of the existence of such loans, and this measure is not directly comparable to prior periods. Other institutions may have loans acquired in a business combination, and therefore there may be no direct comparability of these ratios between and among other institutions.

(6) Tangible assets are total assets less total intangible assets and is considered to be a non-GAAP financial measure. Refer to the Reconciliation of Non-GAAP Financial Measures on page 75 for additional information.

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AVERAGE BALANCES AND AVERAGE YIELDS/RATES

The following table presents average balances and an analysis of average rates and yields on an annualized fully taxable equivalent basis for the periods included:

	Three Months Ended June 30,								Six Months Ended June 30,
	2016				2015				2016				2015
($ In millions)	Average Balance		Yield/Rate (FTE basis)		Average Balance		Yield/Rate (FTE basis)		Average Balance		Yield/Rate (FTE basis)		Average Balance		Yield/Rate (FTE basis)
Assets
Loans:
Commercial real estate	$	2,174	4.45	%	$	1,889	4.46	%	$	2,126	4.31	%	$	1,768	4.29	%
Commercial and industrial loans	1,048		4.93		886		3.64		1,038		4.98		847		3.67
Residential mortgages	1,759		3.63		1,563		4.08		1,779		3.74		1,516		4.01
Consumer loans	845		3.40		822		3.24		826		3.42		794		3.23
Total loans (1)	5,826		4.14		5,160		4.02		5,769		4.14		4,925		3.94
Investment securities (2)	1,247		3.28		1,302		2.99		1,295		3.27		1,239		3.04
Short term investments & loans held for sale (3)	41		1.29		72		1.13		49		1.10		64		1.26
Total interest-earning assets	7,114		3.97		6,534		3.77		7,113		3.95		6,228		3.72
Intangible assets	345				304				339				290
Other non-interest earning assets	350				357				348				328
Total assets	$	7,809			$	7,195			$	7,800			$	6,846
Liabilities and shareholders’ equity
Deposits:
NOW	$	493	0.13	%	$	460	0.15	%	$	489	0.13	%	$	442	0.15	%
Money market	1,404		0.47		1,438		0.37		1,410		0.48		1,424		0.39
Savings	612		0.11		606		0.17		607		0.12		554		0.16
Time	2,047		1.06		1,558		0.91		2,055		1.03		1,489		0.91
Total interest-bearing deposits	4,556		0.65		4,062		0.52		4,561		0.64		3,909		0.53
Borrowings and notes (4)	1,236		1.38		1,299		0.76		1,235		1.29		1,209		0.80
Total interest-bearing liabilities	5,792		0.81		5,361		0.58		5,796		0.78		5,118		0.59
Non-interest-bearing demand deposits	1,033				974				1,030				922
Other non-interest earning liabilities	94				65				83				58
Total liabilities	6,919				6,400				6,909				6,098
Total shareholders’ equity (2)	890				795				891				748
Total liabilities and stockholders’ equity	$	7,809			$	7,195			$	7,800			$	6,846

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	Three Months Ended June 30,								Six Months Ended June 30,
	2016				2015				2016				2015
	Average Balance		Yield/Rate (FTE basis)		Average Balance		Yield/Rate (FTE basis)		Average Balance		Yield/Rate (FTE basis)		Average Balance		Yield/Rate (FTE basis)
Net interest spread			3.16	%			3.19	%			3.17	%			3.13	%
Net interest margin (5)			3.31				3.30				3.32				3.24
Cost of funds			0.68				0.49				0.66				0.50
Cost of deposits			0.53				0.42				0.52				0.43
Supplementary data
Total deposits (In millions)	$	5,589			$	5,037			$	5,591			$	4,830
Fully taxable equivalent income adj. (In thousands)	1,180				1,068				2,314				1,957

_____________________________________

(1)  The average balances of loans include nonaccrual loans and deferred fees and costs.

(2)  The average balance for securities available for sale is based on amortized cost. The average balance of equity also reflects this adjustment.

(3)  Interest income on loans held for sale is included in loan interest income on the income statement.

(4)  The average balances of borrowings includes the capital lease obligation presented under other liabilities on the consolidated balance sheet.

(5)  Purchased loan accretion totaled $2.0 million and $2.2 million for the three months ended June 30, 2016 and 2015, respectively. Purchased loan accretion totaled $4.1 million and $2.5 million for the six months ended June 30, 2016 and 2015, respectively.

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NON-GAAP FINANCIAL MEASURES

This document contains certain non-GAAP financial measures in addition to results presented in accordance with Generally Accepted Accounting Principles (“GAAP”). These non-GAAP measures are intended to provide the reader with additional supplemental perspectives on operating results, performance trends, and financial condition. Non-GAAP financial measures are not a substitute for GAAP measures; they should be read and used in conjunction with the Company’s GAAP financial information. A reconciliation of non-GAAP financial measures to GAAP measures is provided below. In all cases, it should be understood that non-GAAP operating measures do not depict amounts that accrue directly to the benefit of shareholders. An item which management deems to be non-operating and excludes when computing non-GAAP operating earnings can be of substantial importance to the Company’s results for any particular quarter or year. The Company’s non-GAAP earnings information set forth is not necessarily comparable to non-GAAP information which may be presented by other companies. Each non-GAAP measure used by the Company in this report as supplemental financial data should be considered in conjunction with the Company’s GAAP financial information.

The Company utilizes the non-GAAP measure of adjusted earnings in evaluating operating trends, including components for operating revenue and expense. These measures exclude amounts which the Company views as unrelated to its normalized operations, including securities gains/losses, merger costs, restructuring costs, and systems conversion costs. Non-operating adjustments are presented net of an adjustment for income tax expense. This adjustment is determined as the difference between the GAAP tax rate and the effective tax rate applicable to operating income.

The Company calculates adjusted earnings per share based on its measure of earnings from ongoing operations. The Company views these amounts as important to understanding its operating trends, particularly due to the impact of accounting standards related to merger and acquisition activity. Analysts also rely on these measures in estimating and evaluating the Company’s operating performance. Management also believes that the computation of non-GAAP earnings and earnings per share may facilitate the comparison of the Company to other companies in the financial services industry. The efficiency ratio is adjusted for non-operating revenue and expense items and for tax preference items. The Company adjusts certain equity related measures to exclude intangible assets due to the importance of these measures to the investment community.

Charges related to merger and acquisition activity consist primarily of severance/benefit related expenses, contract termination costs, systems conversion costs, and professional fees. Restructuring costs primarily consist of costs and losses associated with the disposition of assets and lease terminations. The Company’s disclosures of organic growth of loans and deposits in 2015 exclude balances acquired through the business combinations with Hampden Bancorp and Firestone Financial, and in 2016 are adjusted for two branches held for sale.

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RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

The following table summarizes the reconciliation of non-GAAP items recorded for the time periods and dates indicated:

		At or for the Three Months Ended						At or for the Six Months Ended
		June 30, 2016			June 30, 2015			June 30, 2016			June 30, 2015
(in thousands)
Net income (GAAP)		$	15,957		$	10,044		$	31,958		$	18,803
Adj: Gain on sale of securities, net		13			(2,384		)	(23		)	(2,418		)
Adj: Merger and acquisition expense		701			5,665			1,228			8,940
Adj: Restructuring and conversion expense		177			3,046			430			4,192
Adj: Income taxes		(334		)	(1,815		)	(590		)	(2,587		)
Total adjusted income (non-GAAP)	(A)	$	16,514		$	14,556		$	33,003		$	26,930
Total revenue (GAAP)		$	71,996		$	69,417		$	145,323		$	127,472
Adj: Gain on sale of securities, net		13			(2,384		)	(23		)	(2,418		)
Total operating revenue (non-GAAP)	(B)	$	72,009		$	67,033		$	145,300		$	125,054
Total non-interest expense (GAAP)		$	46,268		$	54,025		$	93,368		$	99,173
Less: Total non-operating expense (see above)		(878		)	(8,711		)	(1,658		)	(13,132		)
Operating non-interest expense (non-GAAP)	(C)	$	45,390		$	45,314		$	91,710		$	86,041
(in millions, except per share data)
Total average assets	(D)	$	7,809		$	7,195		$	7,800		$	6,846
Total average shareholders’ equity	(E)	890			795			891			748
Total average tangible shareholders’ equity	(F)	546			492			551			459
Total tangible shareholders’ equity, period-end (1)	(G)	574			507			574			507
Total tangible assets, period-end (1)	(H)	7,695			7,198			7,695			7,198
Total common shares outstanding, period-end (thousands)	(I)	31,156			29,521			31,156			29,521
Average diluted shares outstanding (thousands)	(J)	30,765			28,461			30,728			26,713
Earnings per share, diluted		$	0.52		$	0.35		$	1.04		$	0.70
Adjusted earnings per share, diluted	(A/J)	0.54			0.51			1.07			1.01
Book value per share, period-end		29.64			28.02			29.64			28.02
Tangible book value per share, period-end	(G/I)	18.44			17.16			18.44			17.16
Total shareholders' equity/total assets		11.48			11.00			11.48			11.00
Total tangible shareholder's equity/total tangible assets	(G)/(H)	7.46			7.04			7.46			7.04
Performance ratios(2)
GAAP return on assets		0.82		%	0.56		%	0.82		%	0.55		%
Adjusted return on assets	(A/D)	0.85			0.81			0.85			0.79
GAAP return on equity		7.17			5.05			7.18			5.03
Adjusted return on equity	(A/E)	7.42			7.32			7.41			7.20
Adjusted return on tangible equity (3)	(A/F)	12.45			12.30			12.32			12.23
Efficiency ratio	(C-M)/(B+K+N)	58.71			61.51			59.29			62.34

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		At or for the Three Months Ended						At or for the Six Months Ended
		June 30, 2016			June 30, 2015			June 30, 2016			June 30, 2015
(in thousands)
Supplementary data(in thousands)
Tax benefit on tax-credit investments (4)	(K)	$	2,777		$	4,034		$	4,365		$	8,068
Non-interest income charge on tax-credit investments (5)	(L)	(1,938		)	(2,851		)	(3,039		)	(5,703		)
Net income on tax-credit investments	(K+L)	839			1,183			1,326			2,365
Intangible amortization	(M)	787			934			1,606			1,835
Fully taxable equivalent income adjustment	(N)	1,180			1,068			2,314			1,957

_______________________________________

(1)  Total tangible shareholders’ equity is computed by taking total shareholders’ equity less the intangible assets at period-end. Total tangible assets is computed by taking total assets less the intangible assets at period-end.

(2)  Ratios are annualized and based on average balance sheet amounts, where applicable.

(3)  Adjusted return on tangible equity is computed by dividing the total adjusted income adjusted for the tax-affected amortization of intangible assets, assuming a 40% marginal rate, by tangible equity.

(4)  The tax benefit is the direct reduction to the income tax provision due to tax credits and deductions generated from investments in historic rehabilitation, low-income housing, new market projects, and renewable energy projects.

(5)  The non-interest income charge is the reduction to the tax-advantaged commercial project investments, which are incurred as the tax credits are generated.

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SUMMARY

Net income and earnings per share increased year to year for both the second quarter and first six months of 2016 due to expanded operations and improved profitability, including the benefit from merger and restructuring activities charged against 2015 results. Growth was reflected in the 14% increase in six month revenue and profitability was demonstrated by the increase in the six month ROA to 0.82%.

Berkshire’s results include the Hampden operations acquired on April 17, 2015, the Firestone operations acquired on August 7, 2015, and the 44 Business Capital operations acquired on April 29, 2016. As a result, many measures of revenue, expense, income, and average balances increased compared to prior periods, and per share measures were affected by new shares issued for merger consideration.

Second quarter financial highlights included the following (comparisons are to prior quarter unless otherwise stated):

• 5% total loan growth

• 4% total commercial loan growth

• 3.31% net interest margin (fully taxable equivalent)

• 58.7% efficiency ratio (non-GAAP financial measure)

• 0.26% non-performing assets/assets

• 0.22% net loan charge-offs/average loans

Berkshire’s commercial and retail teams posted growth in the second quarter of 2016. This included the benefit of the Philadelphia area SBA lending business acquired during the quarter and operating as 44 Business Capital, a division of Berkshire Bank. Loan balances were up in all major lending categories and the total loan yield improved despite the ongoing market interest rate pressures. Profitability metrics also improved, including improved efficiency from the increased business scale. The Company’s shareholder dividend has increased by 5% compared to the prior year and the dividend yield measured 3% based on the second quarter average stock price.

Near the end of the period, Berkshire announced an agreement to acquire First Choice Bank which will add new dimensions to Berkshire’s business model. This agreement is subject to customary regulatory and shareholder approvals. This acquisition brings new branches in attractive Princeton and Philadelphia area markets, along with a strong mortgage banking platform with operations in targeted national markets. These operations complement Berkshire’s other recent development strategies. They are also targeted to enhance Berkshire’s liquidity and capital strength, as well as to provide additional earnings and profitability gains beginning in 2017. Berkshire is also working to expand its secondary market capabilities across several loan categories through its financial institution banking initiatives.

The First Choice acquisition is expected to bring Berkshire’s total assets to approximately $9 billion by year-end 2016 and moves the Company towards the $10 billion regulatory threshold that imposes wide ranging additional requirements and costs on its operations. Berkshire is proceeding with plans to develop the appropriate infrastructure in a cost effective manner and to plan for the full cost and revenue impacts, including the estimated $5-6 million in bank card interchange revenues expected to be lost when the threshold is crossed. The Company believes that it has ample time and possible scenarios to manage its growth through this transition and to achieve the size and scale efficiencies sufficient to offset these impacts on its returns on assets and equity.

Longer term U.S. Treasury interest rates reached record low levels around midyear 2016 reflecting the “lower for longer” market expectations about low interest rates that are pressuring industry profitability. As a result, Berkshire anticipates that asset yield compression will further pressure industry earnings and the Company is pursuing further revenue diversification and operating efficiencies with the goal of supporting future earnings growth. These strategies are also intended to offset the impacts of IRS guidance emerging shortly after midyear which are expected to reduce the attractiveness of qualifying tax credit related investment projects which have contributed to the Company’s earnings in recent periods.

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Shortly after midyear, the Company announced the resignation of its CFO and the appointment of James M. Moses as the Company’s replacement SEVP/CFO. Mr. Moses has extensive experience with a leading international securities firm and with two prominent Northeast banks in the areas of asset/liability management, DFAST regulatory compliance for banks over $10 billion, and product profitability management.

COMPARISON OF FINANCIAL CONDITION AT JUNE 30, 2016 AND DECEMBER 31, 2015

Summary: During the second quarter, seasonally strong and diversified loan growth resulted in a 3% increase in total assets to $8.0 billion, and was funded by borrowings together with deposit growth. Asset quality metrics remained favorable despite the addition of impaired loans from 44 Business Capital. This business combination was primarily financed with cash and the related goodwill diluted measures of tangible equity. As a result, tangible book value per share remained unchanged during the quarter at $18.44 despite the contributions from retained earnings and unrealized securities gains. These gains reflected the improvement in bond prices related to the further decrease in interest rates. These contributions did increase total book value per share by $0.46, or 2%, to $29.64 during the quarter. The agreement to acquire First Choice Bank is targeted to strengthen capital and liquidity metrics, taking into account the capital and liquidity of that institution as well as the transaction structure. The interest rate sensitivity of the balance sheet remained neutral to positive, although the yield curve at midyear signaled likely continuing pressure on industry margins due to ongoing asset yield compression. There were no material changes in financial condition during the seasonally quiet first quarter, and first half changes were therefore primarily due to the above second quarter activity.

Securities: Total investment securities decreased by $83 million, or 6%, during the first half of 2016 due to management actions in the second quarter to minimize margin compression by deleveraging some of the lower margin investment securities. The Company sold $181 million of three year average life collateralized mortgage obligations yielding 1.77% near par. The Company purchased $72 million of securities including $10 million of municipal securities and $62 million of investment grade equivalent agency commercial mortgage backed securities at an average premium of 2%. These agency securities have a 2.48% weighted average yield and a six year average life. They are structured with credit enhancement components and their cash flows are protected due to prepayment fees and defeasement provisions on the underlying pool of loans.

Short term borrowings were reduced by $109 million in this deleveraging and this strategy improved the Company’s use of capital while also boosting the net interest margin by 0.03%, with minimal dilutive impact on earnings. This supplemented the purchase of $11 million of dividend-paying equity securities in the prior quarter to also provide margin support. Due to the decrease in interest rates in the second quarter, the unrealized gain on securities available for sale and held to maturity increased to $42 million, or 3.6% of cost at midyear, compared to $11 million or 0.8% of cost at the start of the year. The securities portfolio yield improved to 3.28% in the most recent quarter compared to 2.96% in the fourth quarter of 2015. The average life of the bond portfolio was 4.8 years at midyear compared to 4.9 years at the start of the year. The mix change towards longer maturities was generally offset by the shorter expected average lives of mortgage backed securities based on the drop in long term interest rates.

Loans: Total loans increased by $275 million, at a 10% annualized rate, in the first half of 2016, with growth in most major categories. Virtually all of this growth was during the second quarter, including seasonally strong demand and slower prepayments. Additionally, in the most recent quarter, mortgage growth included $51 million in net wholesale purchases and commercial growth included $37 million in commercial real estate loans which were the non-guaranteed participations in SBA loans acquired in the 44 Business Capital transaction.

First half loan growth was concentrated in commercial real estate balances, which increased by $178 million including $74 million in non-owner occupied mortgages, $51 million in multifamily balances, and $26 million in nonresidential construction balances. Total commercial and industrial loans and owner occupied commercial mortgages were unchanged, totaling $1.64 billion at midyear and comprising 50% of total commercial balances at that date.

The Company’s risk management observes the December 2015 federal interagency statement of prudent risk management practices for commercial real estate lending. Additionally, commercial real estate is managed within

77

federal regulatory monitoring guidelines of 300% of risk based capital for non-owner occupied commercial real estate and 100% for commercial construction loans. At midyear 2016, non-owner occupied commercial real estate totaled 256% of Bank risk based capital and outstanding commercial construction loans were 39% of Bank risk based capital (compared to 227% and 39% respectively at the start of the year). The Bank has hold limits for several categories of commercial specialty lending including healthcare, hospitality, designated franchises, and leasing, as well as hold limits for designated commercial loan participations purchased. In most cases, these limits are below 100% of risk based capital for all outstandings in each monitored category.

Residential mortgage balances decreased by $61 million in the first quarter, and then increased by $90 million in the second quarter, resulting in a $29 million, or 2%, net increase for the first six months of the year. Most conforming mortgage originations were sold servicing released to the secondary market, and growth was primarily due to retained jumbo mortgages together with net wholesale purchases from regional financial institutions. For the first half of the year, wholesale purchases totaled $119 million and wholesale sales totaled $133 million. Consumer loans increased by $82 million in the first half of 2016 as a result of the expansion of the indirect auto dealer network across the footprint of the Company’s franchise. The Company’s goal is to further develop secondary market outlets to absorb an increasing share of indirect auto originations as part of its overall wholesale and financial institutions banking strategies. The Company anticipates that overall loan growth will decline from the elevated pace in the most recent quarter due to further development of these strategies, together with seasonal and timing factors.

The loan yield includes purchased loan accretion, which consists primarily of recoveries of purchased credit impaired loans. Loan accretion totaled $2.0 million in the second quarter and $2.1 million in the first quarter of 2016, compared to $2.2 million and $0.3 million in the same periods of 2015. The total loan yield increased to 4.14% in the second quarter of 2016 from 4.02% in the second quarter of 2015 (and compared to 4.15% in the fourth quarter of 2015). The increase in the yield included the benefit of the 25 basis point increase in short term rates in December 2015. Additionally, the yield benefited from higher yielding loans from the Firestone acquisition in the third quarter of 2015 and the higher yield assigned to the unguaranteed SBA loan participations from the 44 Business Capital acquisition in the most recent quarter. The tenor of the loan portfolio did not change significantly in the first half of 2016. At midyear, 33% of loans contractually repriced within one year, 26% repriced in one to five years, and 41% repriced over five years. As noted in the above securities discussion, the drop in interest rates at midyear is believed to have reduced the overall duration and average life of the loan portfolio and to have contributed to an increase in the premium fair value of the portfolio over book value at midyear.

Asset Quality. Asset quality metrics remained favorable and improved slightly from the prior quarter and the start of the year. Second quarter annualized net loan charge-offs measured 0.22% of average loans and period-end non-performing assets were 0.26% of total assets. Accruing delinquent loans were 0.31% of total loans, including accruing loans over 90 days past due measuring 0.06% of total loans. Loans identified as troubled debt restructurings decreased slightly to $22 million. Loans which became non-accruing totaled $4 million which was within the general run rate range of $4-10 million experienced for a number of recent quarters. At period-end, the total contractual balance of purchased credit impaired loans was $38 million, with a $20 million carrying value. The $18 million discount included $6 million in accretable yield and $12 million in nonaccretable discount. The 44 Business Capital business combination included $6.3 million in impaired loans with a book value of $6.2 million and a fair value of $2.6 million, including $0.7 million in accretable discount.

Loan Loss Allowance. The determination of the allowance for loan losses is a critical accounting estimate. The Company considers the allowance for loan losses appropriate to cover probable losses which can be reasonably estimated in the loan portfolio as of the balance sheet date. Under accounting standards for business combinations, acquired loans are recorded at fair value with no loan loss allowance on the date of acquisition. A loan loss allowance is recorded by the Company for the emergence of new probable and estimable losses on acquired loans which were not impaired as of the acquisition date. Because of the accounting for acquired loans, some measures of the loan loss allowance are not comparable to periods prior to the acquisition date or to peer measures.

The loan loss allowance increased by $2 million, or 5%, in the first half of 2016. This was in line with the 5% million increase in total loans. As a result, the ratio of the allowance to total loans remained unchanged from year-end at 0.69%. The allowance on loans from business activities decreased slightly to 0.75% from 0.76% of related

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loans; net annualized charge-offs of these loans measured 0.24% in the first half of 2016. The allowance on acquired loans decreased slightly to 0.40% from 0.41% of related loans; net annualized charge-offs of these loans measured 0.15% in the first half of 2016. At period-end, the allowance provided 3.2X coverage of annualized first half net charge-offs and 2.0X coverage of period-end non-accrual loans. Criticized loans decreased to 1.6% of total assets from 1.9% at the start of the year due primarily to a $15 million decrease in criticized loans from business activities, including an $8 million decrease to $52 million in potential problem loans, which the Company defines as substandard accruing loans from business activities. The ratio of criticized assets to the total of the Bank’s Tier 1 Capital plus the loan loss allowance declined to 21% from 24% during the first half of 2016.

Deposits. Total deposits increased by $68 million, or 1%, in the first half of 2016 with all growth recorded in the second quarter. First quarter deposits were flat including the runoff of unusually high year-end balances resulting from commercial customer year-end payroll cycles. Additionally, the Company recorded $30 million in deposits as held for sale in the first quarter, and this balance (along with an immaterial amount of loans) was transferred to other liabilities. This sale of these two small outlying New York branches was completed on August 5, 2016 and the settlement is not expected to have a material impact on third quarter results. Growth in the first six months was due to a $104 million increase in time deposits, including a $65 million increase in personal accounts and a $39 million increase in brokered accounts, with a slight decrease in commercial accounts. Time deposit growth was concentrated in jumbo accounts ($100,000 balance or higher). The cost of deposits increased by 8 basis points in the most recent quarter to 0.53% from 0.45% in the third quarter of 2015 (the last full quarter before the 25 basis point rate increase in short term rates in December 2015). This included a 5 basis point increase in the cost of money market accounts and a 16 basis point increase in time deposit costs including an increase in brokered deposit costs which are most sensitive to market interest rates. The loans/deposits ratio increased to 106% at midyear compared to 102% at the start of the year and is expected to decline below 100% when the First Choice merger is completed.

Borrowings and Other Liabilities. Total borrowings increased by $57 million, or 5% in the first half of 2016 to help fund the strong second quarter loan growth, including the 44 Business Capital business combination. The Bank uses short term FHLB advances for these liquidity management purposes. There were no swaps or other interest rate hedges undertaken with these additional short term borrowings based on management’s current assessment of interest rate expectations. The cost of borrowings increased to 1.38% in the most recent quarter from 0.81% in the third quarter of 2015 (the last full quarter before the 25 basis point Fed rate hike). Due to its asset/liability mix, the Company believes that earnings in 2016 have benefited from the Federal Reserve Board's rate increase. In addition to the impact of this rate hike on the overall portfolio of unhedged borrowings (totaling $0.9 billion), the borrowing cost also increased as the forward starting interest rate swaps began to become active as scheduled in the swap agreements. This is further discussed in the next section. The category of other liabilities increased by $52 million over the last six months, including the $30 million of deposits originally transferred to held for sale and to an increase to $14 million in the unrealized loss on the Company’s fixed payment interest rate swaps following the flattening of the yield curve late in the second quarter.

Derivative Financial Instruments and Hedging Activities. The notional balance of derivative financial instruments increased by $286 million, or 21%, to $1.65 billion in the first half of 2016. This included a $217 million increase in economic hedges related to commercial loan interest rate swaps reflecting strong customer demand for fixed rate loan protection in the low rate environment that developed in 2016. The Company recognizes non-interest income on the sale of these financial instruments, as further discussed in a later section. Customer swaps issued by the Bank are backed by similar swaps transacted with the Company’s national financial institution counterparties. As a result, the $217 million increase represented approximately $108 million in commercial customer loan transactions. Hedging instruments related to mortgage banking increased by $60 million in the first half of the year due to increased volume of interest rate locks due to strong demand by mortgage customers for purchase and refinancing commitments in the attractive borrowing environment.

At year-end 2015, the Company had $300 million of forward starting interest rate swaps which were scheduled to become active during the first three quarters of 2016, and which are now all fully active including swaps activating in the third quarter. These are all fixed payment swaps with a 2.29% weighted average pay rate and a 2.7 year average remaining maturity at midyear. The fully active swaps are reducing the net interest margin by approximately 8-9 basis points and earnings per share by approximately $0.10 compared to conditions existing at

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year-end 2015. The unrealized loss on these swaps increased to $14 million from $9 million over the first six months and this was the primary component of the overall net loss on derivative financial instruments, which increased to $17 million from $11 million over this period. Most of this loss (after tax) is reflected in changes in other comprehensive income which is a component of shareholders’ equity.

Shareholders’ Equity. Total equity increased by $36 million or 4% in the first half of 2016. This increase included the $19 million contribution from retained earnings and a $14 million increase in accumulated other comprehensive income. This latter increase was due to the after-tax impact of lower interest rates on the fair value of investment securities (increased by $17 million after tax) which was partially offset by the higher after-tax unrealized loss on derivative financial instruments (increased by $3 million after tax). Book value per share increased by $0.46 to $29.64 during the most recent quarter.

The Company also evaluates changes in tangible book value, a non-GAAP financial measure which is a commonly considered valuation metric used by the investment community. The 44 Business Capital business combination resulted in a $16 million increase in goodwill which was slightly offset by $1 million in new common equity issued as partial merger consideration. Including merger related costs, the total dilutive impact of this transaction was estimated by the Company at $0.52 per share. This dilution largely offset the positive contribution of retained earnings and unrealized gains in the second quarter, with the result that tangible book value per share was unchanged at $18.44 in the most recent quarter.

The ratio of shareholders’ equity to total assets increased to 11.5% from 11.3% in the first half of the year. Including the 44 Business Capital impacts, tangible equity/assets increased to 7.5% from 7.4% during this period. As previously noted, the Company also increased its quarterly shareholder dividend from $0.19 to $0.20 beginning in the first quarter of 2016.

COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2016 AND 2015

Summary. Berkshire’s results include the Hampden operations acquired on April 17, 2015, the Firestone operations acquired on August 7, 2015, and the 44 Business Capital operations acquired on April 29, 2016. As a result, many measures of revenue, expense, income, and average balances increased compared to prior periods, and per share measures were affected by new shares issued for merger consideration. Much of the following discussion will focus on second quarter results, which included Hampden operations in both years (2015 results included Hampden for approximately 82% of the quarter based on the acquisition date.)

As noted previously, Berkshire uses a non-GAAP measure of adjusted net income to supplement its evaluation of its operating results. Adjusted net income excludes certain amounts not viewed as related to its normalized operations. These adjusting items consist primarily of merger, acquisition, conversion, and restructuring expenses, together with gains recorded on securities. Berkshire views its net merger related costs as part of the economic investment for its acquisitions. Please see the Non-GAAP reconciliation section of this discussion for more discussion and information about adjusted net income and other non-GAAP financial measures discussed in this report.

Second quarter GAAP net income per share increased by 49% to $0.52 in 2016 from $0.35 in 2015. Adjusted net income increased by 6% to $0.54 per share from $0.51 for these respective periods. Results increased due to expanded operations and improved profitability. GAAP results last year included higher charges related to the Hampden Bancorp acquisition.

First half GAAP net income per share increased by 49% to $1.04 in 2016 from $0.70 in 2015. Adjusted earnings increased by 6% to $1.07 per share from $1.01 for these respective periods. These changes largely reflected the same trends discussed above that drove second quarter earnings growth. Of note, Berkshire has pursued bottom line growth while also investing in infrastructure development to support its larger operations and targeted future growth.

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In addition to per share measures of income and adjusted income, the Company also evaluates these measures in total. Growth was achieved in these measures for both the second quarter and first six months of 2016 compared to 2015, including the benefit of overall growth in the Company’s activities as well as improvements in profitability.

Return on equity and return on assets improved year-over-year on both a GAAP and core basis. Over the five most recent quarters, the GAAP ROE has varied in the 5.1% - 7.3% range depending primarily on merger related charges. The adjusted return on tangible equity has varied in the 12.2% - 12.8% range during this period. This ratio is a non-GAAP financial measure that compares adjusted earnings to average tangible equity in order to measure the rate of internal capital generation to support ongoing growth and dividends. Profitability has benefited from both a higher net interest margin as well as improved efficiency, with the efficiency ratio decreasing to 58.7% in the most recent quarter. The efficiency ratio is a non-GAAP financial measure that compares adjusted expenses and revenues to assess how well the Company is managing its costs.

Second quarter earnings in 2016 included accretion from the Hampden, Firestone, and 44 Business Capital acquisitions which were not part of operations for the full period of the second quarter of 2015. Management believes that these acquisition strategies have been beneficial to improve operating results, as well as to deepen and broaden the franchise. These benefits have also helped to offset the margin compression in the industry related to the ongoing low interest rate environment and to support Berkshire’s continuing investment in infrastructure to support its future strategic growth objectives.

Revenue. Second quarter net revenue increased by $3 million, or 4%, year-over-year. Revenue in 2015 included securities gains primarily recorded in conjunction with the Hampden acquisition. Excluding these gains, net revenue increased by $5 million, or 7%, which was the driver of positive operating leverage that improved profitability. Most revenue growth was in net interest income related to the acquired operations. Revenue in the most recent quarter included an estimated $5 million from Firestone and 44 Business Capital operations. Second quarter 2016 revenue decreased from the linked quarter due to higher tax credit investment amortization charges and lower seasonal contributions from wealth and insurance operations. First half revenue increased year-over-year by 14% including the additional benefit of the Hampden operations acquired in the second quarter of 2015.

Fee income was 21% of total net revenue in the most recent quarter. Berkshire is developing fee revenue synergies as part of its long term goal of diversifying revenue and deepening wallet share. With the expected mortgage banking revenue contribution of the First Choice operations, Berkshire’s goal is to achieve its target of 30% or more of revenue from fee income including those operations.

Berkshire’s second quarter annualized net revenue per share measured $9.36 per share in 2016 compared to $9.76 in the prior year. Excluding securities gains, this declined to $9.36 in 2016 compared to $9.42 due to the lower fee revenue penetration of operations acquired in 2015.

Net Interest Income. Second quarter net interest income increased year to year by $5 million, or 9%. This was chiefly volume related due to the $580 million, or 9%, increase in average earning assets from acquisitions and business activities. Average C&I loans increased by $162 million which included the benefit of the acquired Firestone operations. The remaining growth was primarily due to other growth in loan outstandings across all major lending categories.

The second quarter net interest margin increased year to year by 1 basis point to 3.31% in 2016. Despite the continuing asset yield compression from ongoing low interest rates and heightened competition, Berkshire’s initiatives to improve its asset mix resulted in a 20 basis point increase in the earning asset yield to 3.97%. This included improved loan and securities yields described in the earlier section in this discussion about financial condition. The improved earning asset yield more than offset a 19 basis point increase in the cost of funds, including higher deposit and borrowings costs which were also further described in the earlier discussion of financial condition. These yield changes included modest targeted increases in durations and credit risk, while overall risks measures remained favorable and well within the Company’s guidelines.

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The Company has particularly benefited from the increased spreads related to operations acquired in business combinations as a result of fair market valuations of assets and liabilities, including higher yields on acquired impaired assets and lower costs on acquired liabilities. Purchased loan accretion also includes recoveries on the resolution of purchased credit impaired loans, which has consistently been a significant source of earnings as a result of the Company’s strong asset management disciplines and favorable trends in market prices for impaired assets. Purchased loan accretion totaled $2.0 million in the second quarter of 2016, $2.1 million in the first quarter of 2016, and $2.2 million in the second quarter of 2015. Measured on a non-GAAP basis before this accretion, the net interest margin was 3.20% in the most recent quarter.

The net interest margin in 2016 includes the impact of forward starting interest rates swaps which became active as scheduled in roughly similar tranches in the first, second, and third quarters of this year and which have added to the total cost of funds including the swaps that have become active in the third quarter. Additionally, as a result of the recent decline in longer term treasury interest rates to record lows, the Company anticipates that additional asset yield compression will contribute to the swap cost to reduce the net interest margin in the third quarter and for at least the near term future. As discussed in the later section on market risk, the Company believes that the prospect for interest rate changes reflected in the forward interest rate curve at midyear will be adverse to the margin on the existing balance sheet. The Company intends to continue to pursue strategies to partially offset this compression and it believes that its efforts to diversify revenues and to develop specialized lending and wholesale channels will give it comparative advantage in addressing these pressures which affect the entire industry.

The foregoing discussion has focused on quarterly net interest income. For the first six months of the year, net interest income increased year to year by $17 million, or 17%. In addition to the influences previously discussed, this higher rate of increase for the six month period primarily reflects the full six month benefit of Hampden operations, which were owned for less than three months during the first half of 2015.

Non-Interest Income. Non-interest income is mostly comprised of fee income. Second quarter fee income decreased year to year by $0.2 million, or 2%. Six month fee income increased year to year by $1.4 million, or 5%, including the full six month benefit of the acquired Hampden operations in 2016. The largest source of fee income is deposit related fees. Six month 2016 deposit fee income of $12.4 million included $3.7 million in bank card fees and $7.2 million in service charges. Second quarter deposit fee income measured 0.45% of average deposits in 2016 compared to 0.51%, including the impact of higher reliance on time deposits. Six month loan related fees totaled $5.9 million in 2016, and included $2.4 million in commercial swap fees, $0.4 million in mortgage servicing income, and $2.1 million in gains on the sale of seasoned mortgages. Changes in mortgage banking revenue reflected volume changes in gains on mortgage production due to the impact of market interest rates on demand. Due to record low interest rates at midyear 2016, production volumes and gain on sale spreads were improving at midyear.

The category of other non-interest income included $2.0 million in income on bank owned life insurance for the first half of 2016 and was net of $0.6 million in charges for swap adjustments. It is also net of charges which totaled $3.0 million for the amortization of tax credit related investments, compared to $5.7 million in the first half of 2015. These charges are more than offset by credits to income tax expense related to these projects. The year to year decrease was due to lower qualifying investments as further addressed in the following discussion of income tax expense.

Non-interest income includes net securities gains which decreased in the first half to $23 thousand in 2016, compared to $2.4 million in 2015 which resulted from the gain on Hampden stock recorded at the time that acquisition was completed.

Loan Loss Provision. The provision for loan losses for the first half of the year increased by $0.5 million to $8.5 million in 2016. The provision for loan losses is a charge to earnings in an amount sufficient to maintain the allowance for loan losses at a level deemed adequate by the Company as an estimate of the probable and estimable loan losses in the portfolio as of period-end. The level of the allowance is a critical accounting estimate and the level of the allowance was included in the discussion of financial condition. The amount of the provision exceeded net charge-offs, as the allowance has risen due to loan portfolio growth resulting from loan originations.

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Non-Interest Expense. Second quarter non-interest expense decreased year to year by $8 million, or 14%, due to elevated merger, restructuring, and conversion expense in 2015. Adjusted expense, a non-GAAP financial measure which excludes these costs, was flat despite the 4% revenue growth posted during this time. Six month non-interest expense decreased by $6 million, or 6%, but on an adjusted basis this measure increased by $6 million or 7%, due to the 14% increase in net revenue primarily resulting from the Hampden acquisition in the second quarter of 2015. As a result of the positive operating leverage, the efficiency ratio, a non-GAAP measure, improved to 58.7% in the most recent quarter. Annualized expense in the most recent quarter measured 2.37% of average assets and 2.33% on an adjusted basis. Adjusted expense is down from 2.51% of average assets in the first quarter of 2015 which demonstrates the benefit of the Company’s growth and restructuring activities. Full time equivalent staff at midyear 2016 measured 1,222 persons which was little changed from 1,221 at the start of the year despite the acquisition of the 44 Business Capital operations.

Income Tax Expense. The second quarter effective income tax rate was 25% in 2016 compared to 10% in 2015. For the first half of the year, the tax rate was 26% in 2016 compared to 7% in 2015. The tax rate reflects the ongoing benefit of components described in the notes to the financial statement included in the 2015 Form 10-K.

The primary reasons for the effective tax rate changes in 2016 were the increased pre-tax earnings in 2016 and the reduction in the benefits related to the Company’s tax credit investment projects. The increased pre-tax earnings had the effect of increasing the effective income tax rate due to the lower proportional benefit of other tax preference items. The tax credit investment projects include tax credits and deductions generated primarily from investment in historic rehabilitation projects. The benefit to income tax expense totaled $2.8 million in the most recent quarter, and contributed $0.8 million to earnings, net of related amortization charges in non-interest income. Measured before all impacts of the tax credit investment projects, the Company's tax rate on pre-tax adjusted income was approximately 34% in the first half of 2016.

The Company’s per share results for the first six months of 2016 included a $0.04 benefit from tax credit investment projects in 2016 compared to a $0.09 benefit in 2015 (net of the amortization charge to non-interest incomes). The benefit of these investments can be variable from quarter to quarter depending on the origination of new investments, the construction of the projects, and the timing of tax accounting components. Updated Internal Revenue Service guidance issued shortly after midyear reduced the potential attractiveness of future qualifying projects based on the Company’s financial disciplines. As a result, the Company’s current outlook is that the effective tax rate will increase in the second half of the year and that the future earnings benefit of investment tax credit related projects will be reduced (net of a lower amortization charge to be recorded in non-interest income).

Total Comprehensive Income. Total comprehensive income includes net income together with other comprehensive income. Other comprehensive income consists primarily of changes in the net fair value of available for sale securities and derivative hedges, net of related income taxes. These changes normally result from changes in market interest rates. Securities prices generally move inversely to interest rates and the value of the Company’s fixed payment swaps generally moves in the same direction as interest rates, as measured on the date of the balance sheet. The changes for the larger and longer direction securities portfolio often exceed the changes related to swaps. In the first half of 2016, longer term interest rates decreased and as a result, other comprehensive income was positive. In the first half of 2015, longer term interest rates generally increased and the result was another comprehensive loss.

44 Business Capital Acquisition. The acquisition of certain business operations and assets related to 44 Business Capital was completed on April 29, 2016 and is described in Note 2 of the financial statement. This acquisition, located in the greater Philadelphia area, provides access to attractive mid-Atlantic commercial lending markets. 44 Business Capital specializes in originating SBA 7(a) guaranteed business loans, which generally exceed $1 million in loan size. This business sells the guaranteed portions of the loans and the Bank retains the unguaranteed portion. The business generates gains on the sale of these loans which is reported in non-interest income. 44 Business Capital originated $29 million in total SBA loans in its most recent fiscal year and loan sale gains were $4 million in 2015 and $5 million in 2014. Additionally, the Bank retains the servicing rights on sold loans; the notional balance of this servicing portfolio was $148 million at acquisition date, and the unguaranteed portion of the loans

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was valued at $37 million at acquisition. This business is complementary to Berkshire’s existing SBA loan program which generates smaller SBA loans and is ranked among the top ten U.S. SBA loan originators based on number of small balance loans. 44 Business Capital is also located within the market served by First Choice Bank and Berkshire expects to develop synergies between those operations, as well as with Berkshire’s Firestone Financial equipment lending operations. The 44 Business Capital acquisition by Berkshire Bank was financed primarily with cash and resulted in $16 million in goodwill that was recorded. Including merger costs, Berkshire estimates that this acquisition resulted in tangible book value dilution of $0.52 per share which the Company targets to earn back from earnings accretion within five years including a first year ramp up period. The Company is targeting an IRR in excess of 15% for this transaction. No cost savings were targeted with this acquisition. The pro forma analysis in the financial statement (assuming that the acquisition was completed on January 1, 2015) estimates that pro forma Berkshire earnings per share would have been $0.73 in the first six months of 2015 including 44 Business Capital operations, compared to the $0.70 actual result without this business line. Pro forma combined results under these assumptions in the first six months of 2016 would have been $1.06 in earnings per share (before acquisition expenses) compared to the $1.04 actually posted by the Company during this period.

Liquidity and Cash Flows. The Company utilized its liquidity resources to support the strong growth that emerged in the second quarter of 2016, including the purchase of loans related to the 44 Business Capital business combination, as well as wholesale purchases of residential mortgages. The loans/deposits ratio increased to 106% at midyear from 102% at the start of the year, and total borrowings increased by 4.5%. The Company continues to maintain appropriate liquidity sources. At midyear, the Company had approximately $513 million in borrowing availability with the Federal Home Loan Bank, compared to $576 million at the start of the year.

The Company evaluates liquidity impact as part of its acquisition strategies and analysis. In addition to whole bank purchases, this included the New York branch purchase in 2014 and the Firestone acquisition in 2015. First Choice Bank has a comparatively low loan/deposit ratio and this planned acquisition is targeted to improve the Company’s liquidity and resources to support loan growth in the future. Additionally, the First Choice acquisition is intended to provide access to new deposit funding sources in attractive mid-Atlantic markets. Also, the sophisticated operations of the First Choice national mortgage banking business will improve Berkshire’s overall access to national secondary mortgage markets.

Berkshire generally plans that over the medium term, deposit growth will be the primary source of funds and loan growth will be the primary use of funds. The Bank is diversifying its deposit sources including institutional and wholesale sources as part of the expansion of its liquidity management program and to provide additional options for managing its funds costs and asset liability objectives. In select cases, the Bank provides insured brokered reciprocal money market deposits to large institutional accounts to supplement its deposit insurance protection. The Bank is also expanding its use of short term institutional borrowings and FHLBB borrowings will continue to be a significant source of liquidity for daily operations and borrowings targeted for specific asset/liability purposes. The Company also uses interest rate swaps in managing its funds sources and uses.

Berkshire Hills Bancorp had a cash balance totaling $20 million as of June 30, 2016 which was on deposit with Berkshire Bank. The primary long run routine sources of funds for the Parent are expected to be dividends from Berkshire Bank and Berkshire Insurance Group, as well as cash from the exercise of stock options. The Bank paid $18 million in dividends to the Parent in the first half of 2016. The Parent purchased $11 million in equity securities during the first quarter. Additionally, the Parent sometimes uses cash as an element of merger consideration and sometimes acquires cash as a source of funds as a result of business combinations.

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Capital Resources. Please see the “Shareholders’ Equity” section of the Comparison of Financial Condition for a discussion of shareholders’ equity together with the “Shareholders’ Equity” note to the consolidated financial statements. At June 30, 2016, the regulatory capital ratios of the Bank and the Company continued to be consistent with the requirements to be classified as “Well Capitalized.” Additional information about regulatory capital is contained in the notes to the consolidated financial statements and in the 2015 Form 10-K.

Berkshire views its earnings and related internal capital generation as a primary source of capital to support dividends and growth of the franchise. Additionally, the Company generally uses the issuance of common stock as the primary source of consideration for bank acquisitions, and such acquisitions may result in net increases or decreases in its capital ratios. Berkshire’s long term objective is to generate a double digit annual return on equity, and the Company evaluates lending, investment, and acquisition decisions with this objective as a benchmark. The Company also evaluates its return on tangible equity as an indicator of its capital generation to support ongoing balance sheet growth. The Risk Management/Capital Committee of Berkshire’s Board of Directors is responsible for assisting the Board in planning for future capital needs and for ensuring compliance with regulations pertaining to capital structure and levels. The Company believes that the market for its stock is an additional capital resource over the long run and that Berkshire’s common stock is a significant resource available as merger consideration in the event of future acquisitions and business combinations. Additionally, the Company continues to monitor market conditions for other forms of regulatory capital such as preferred stock or subordinated debt, which are additional potential future capital resources to the Company and/ or the Bank. The Company has an ongoing process to enhance its internal processes for evaluating capital adequacy under various scenarios including stressed conditions.

On April 29, 2016, the Company issued approximately 45 thousand shares of stock as a component of the consideration paid for the Bank’s acquisition of the assets and operations of 44 Business Capital LLC. The Company’s agreement to acquire First Choice Bank utilizes Berkshire’s common stock as 100% of the merger consideration. The Company expects to issue approximately 4.3 million common shares to complete this transaction, which is targeted for the fourth quarter of 2016. This transaction, together with the planned deposit deleveraging, is expected to contribute positively to the Company’s ratios of capital adequacy.

Off-Balance Sheet Arrangements and Contractual Obligations. In the normal course of operations, Berkshire engages in a variety of financial transactions that, in accordance with generally accepted accounting principles are not recorded in the Company’s financial statements. These transactions involve, to varying degrees, elements of credit, interest rate, and liquidity risk. Such transactions are used primarily to manage customers’ requests for funding and take the form of loan commitments and lines of credit. Further information about the Company’s off-balance sheet arrangements is contained in the Company’s 2015 Form 10-K and information relating to payments due under contractual obligations is presented in the 2015 form 10-K. Changes in the fair value of derivative financial instruments and hedging activities are included on the balance sheet and information related to these matters is reported in the related footnote to the consolidated financial statements, and was included in management’s discussion of changes in financial condition. In the first six months of 2016, the Company completed the acquisition of assets and operations related to 44 Business Capital and entering into an agreement to sell two branches, which was completed on August 5, 2016. Berkshire expects to enter into more derivative financial contracts and off-balance sheet arrangements as a result of taking on the SBA loan secondary marketing operations of 44 Business Capital, as well as other initiatives it is pursuing as part of its financial institutions banking initiative. At midyear, Berkshire had an outstanding agreement to acquire First Choice Bank, subject to customary regulatory and shareholder approvals. The Company expects to complete this transaction in the fourth quarter of 2016. First Choice has a national mortgage banking operation with significant secondary market activity which is expected to increase the overall off-balance sheet arrangements and contractual obligations for the combined company.

Fair Value Measurements. The Company records fair value measurements of certain assets and liabilities, as described in the related note in the financial statements. There were no significant changes in the fair value measurement methodologies at June 30, 2016 compared to December 31, 2015. The Company compares the carrying value to fair value for major categories of financial assets and liabilities. The biggest difference relates to loans, and the change in the premium value of loans during the first half of the year was primarily related to the decrease in long term interest rates during the quarter. The fair value of net loans exceeded carrying value by 1.6% at midyear 2016, compared to 0.7% at the end of 2015.

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APPLICATION OF CRITICAL ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES, AND RECENT ACCOUNTING PRONOUNCEMENTS

The Company’s significant accounting policies are described in Note 1 to the consolidated financial statements in this Form 10-Q and in the most recent Form 10-K. Please see those policies in conjunction with this discussion. The accounting and reporting policies followed by the Company conform, in all material respects, to accounting principles generally accepted in the United States and to general practices within the financial services industry. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. While the Company bases estimates on historical experience, current information and other factors deemed to be relevant, actual results could differ from those estimates.

The SEC defines “critical accounting policies” as those that require application of management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in future periods. Please see those policies in conjunction with this discussion. Management believes that the following policies would be considered critical under the SEC’s definition:

Allowance for Loan Losses. The allowance for loan losses represents probable credit losses that are inherent in the loan portfolio at the financial statement date and which may be estimated. Management uses historical information, as well as current economic data, to assess the adequacy of the allowance for loan losses as it is affected by changing economic conditions and various external factors, which may impact the portfolio in ways currently unforeseen. Although management believes that it uses appropriate available information to establish the allowance for loan losses, future additions to the allowance may be necessary if certain future events occur that cause actual results to differ from the assumptions used in making the evaluation. Conditions in the local economy and real estate values could require the Company to increase provisions for loan losses, which would negatively impact earnings.

Acquired Loans. Loans that the Company acquired in business combinations are initially recorded at fair value with no carryover of the related allowance for credit losses. Determining the fair value of the loans involves estimating the amount and timing of principal and interest cash flows initially expected to be collected on the loans and discounting those cash flows at an appropriate market rate of interest. Going forward, the Company continues to evaluate reasonableness of expectations for the timing and the amount of cash to be collected. Subsequent decreases in expected cash flows may result in changes in the amortization or accretion of fair market value adjustments, and in some cases may result in the loan being considered impaired. For collateral dependent loans with deteriorated credit quality, the Company estimates the fair value of the underlying collateral of the loans. These values are discounted using market derived rates of return, with consideration given to the period of time and costs associated with the foreclosure and disposition of the collateral.

Income Taxes. Significant management judgment is required in determining income tax expense and deferred tax assets and liabilities. The Company uses the asset and liability method of accounting for income taxes in which deferred tax assets and liabilities are established for the temporary differences between the financial reporting basis and the tax basis of the Company's assets and liabilities. The realization of the net deferred tax asset generally depends upon future levels of taxable ordinary income, taxable capital gain income, and the existence of prior years' taxable income, to which "carry back" refund claims could be made. A valuation allowance is maintained for deferred tax assets that management estimates are more likely than not to be unrealizable based on available evidence at the time the estimate is made. In determining the valuation allowance, the Company uses historical and forecasted future operating results, including a review of the eligible carry-forward periods, tax planning opportunities and other relevant considerations. In particular, income tax benefits and deferred tax assets generated from tax-advantaged commercial development projects are based on management's assessment and interpretation of applicable tax law as it currently stands. These underlying assumptions can change from period to period. For example, tax law changes or variances in projected taxable ordinary income or taxable capital gain income could result in a change in the deferred tax asset or the valuation allowance. Should actual factors and conditions differ materially from those considered by management, the actual realization of the net deferred tax asset could differ materially from the amounts recorded in the financial statements. If the Company is not able to realize all or part of

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its net deferred tax asset in the future, an adjustment to the deferred tax asset in excess of the valuation allowance would be charged to income tax expense in the period such determination is made.

Goodwill and Identifiable Intangible Assets. Goodwill and identifiable intangible assets are recorded as a result of business acquisitions and combinations. These assets are evaluated for impairment annually or whenever events or changes in circumstances indicate the carrying value of these assets may not be recoverable. When these assets are evaluated for impairment, if the carrying amount exceeds fair value, an impairment charge is recorded to income. The fair value is based on observable market prices, when practicable. Other valuation techniques may be used when market prices are unavailable, including estimated discounted cash flows and analysis of market pricing multiples. These types of analyses contain uncertainties because they require management to make assumptions and to apply judgment to estimate industry economic factors and the profitability of future business strategies. In the event of future changes in fair value, the Company may be exposed to an impairment charge that could be material.

Determination of Other-Than-Temporary Impairment of Securities. The Company evaluates debt and equity securities within the Company's available for sale and held to maturity portfolios for other-than-temporary impairment ("OTTI"), at least quarterly. If the fair value of a debt security is below the amortized cost basis of the security, OTTI is required to be recognized if any of the following are met: (1) the Company intends to sell the security; (2) it is "more likely than not" that the Company will be required to sell the security before recovery of its amortized cost basis; or (3) for debt securities, the present value of expected cash flows is not sufficient to recover the entire amortized cost basis. For all impaired debt securities that the Company intends to sell, or more likely than not will be required to sell, the full amount of the loss is recognized as OTTI through earnings. Credit-related OTTI for all other impaired debt securities is recognized through earnings. Noncredit related OTTI for such debt securities is recognized in other comprehensive income, net of applicable taxes. In evaluating its marketable equity securities portfolios for OTTI, the Company considers its intent and ability to hold an equity security to recovery of its cost basis in addition to various other factors, including the length of time and the extent to which the fair value has been less than cost and the financial condition and near term prospects of the issuer. Any OTTI on marketable equity securities is recognized immediately through earnings. Should actual factors and conditions differ materially from those expected by management, the actual realization of gains or losses on investment securities could differ materially from the amounts recorded in the financial statements.

Fair Value of Financial Instruments. The Company uses fair value measurements to record fair value adjustments to certain financial instruments and to determine fair value disclosures. Trading assets, securities available for sale, and derivative instruments are recorded at fair value on a recurring basis. Additionally, from time to time, the Company may be required to record at fair value other assets on a nonrecurring basis, or to establish a loss allowance or write-down based on the fair value of impaired assets. Further, the notes to financial statements include information about the extent to which fair value is used to measure assets and liabilities, the valuation methodologies used and its impact to earnings. For financial instruments not recorded at fair value, the notes to financial statements disclose the estimate of their fair value. Due to the judgments and uncertainties involved in the estimation process, the estimates could result in materially different results under different assumptions and conditions.

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ITEM 3.                 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There were no material changes to the way that the Company measures market risk in the first six months of 2016. For further discussion about the Company’s Quantitative and Qualitative Aspects of Market Risk, please review Item 7A of the Report 10-K filed for the fiscal year ended December 31, 2015. Berkshire’s objective is to maintain a neutral or asset sensitive interest rate risk profile, as measured by the sensitivity of net interest income to market interest rate changes. The Company measures this sensitivity primarily by evaluating the impact of ramped and shocked interest rate changes on net interest income in the one year, two year, and three year time horizons, including parallel shifts and yield curve twists. The Company also evaluates its equity at risk from interest rate changes through discounted cash flow analysis. This measure assesses the present value changes to equity based on long term impacts of rate changes beyond the time horizons evaluated for net interest income at risk. Due to its growth and changes in the market risk environment, the Company has undertaken initiatives to review its processes of modeling loan and deposit behaviors. The Company has also contracted to upgrade and enhance its interest rate risk modeling systems and is working with third party vendors to expand the inputs and outputs of its modeling processes. As a result, the Company anticipates that there may be changes to its market risk measurement process by year-end 2016. The Company views its current processes as adequate for measuring and monitoring market risk and is undertaking these processes as part of its infrastructure development to support further growth and diversification. The Company has no current expectation that these methodological changes will have a material impact on its assessment of its market risk and any significant changes in methodology will be evaluated to ascertain their impact on modeling results and conclusions.

As of June 30, 2016, the Company remained modestly asset sensitive in most interest rate parallel shift scenarios. Increases in interest rates which result from a parallel shift in the yield curve generally result in higher interest income in most future periods compared to the base scenario of unchanged interest rates. Interest income is positively affected up to 5% in the third year compared to this base scenario depending on the timing and magnitude of the interest rate increase. This reflects the repricing of assets in an upward rate environment, together with the benefit of the fixed payment swaps. The Company’s position tends to be initially asset sensitive as prime and LIBOR indexed loans are expected to react quickly to rate changes while modeled deposit rate changes are expected to react less quickly. The Company believes that net interest income in the first six months of 2016 was positively affected by the market changes related to the 25 basis point hike in the federal funds rate by the Federal Reserve Bank in December 2015. The Company’s net interest income has been negatively affected by the activation of its interest rate swaps which were forward starting at year-end 2015 and were scheduled to become active in the first three quarters of 2016. The full impact of these swaps becoming active is expected to be completely recognized in third quarter earnings based on current interest rates.

If interest rates remain unchanged or if the yield curve flattens due to higher short term rates, the Company’s net interest income could be negatively impacted in the initial effective period of the swaps due to the contracted fixed payments, together with the ongoing effects of asset yield compression which have pressured industry margins in recent years. The forward interest rate curve at June 30 anticipates such a future flattening. The Company evaluates its projections under the scenario of the forward interest rate curve. Through its pricing disciplines and mix of business, Berkshire’s goal is manage its balance sheet to support the net interest margin in the “lower for longer” market expectation that developed around midyear 2016. The Company anticipates that the margin will decline in the third quarter as a result of market and competitive forces. Additionally, First Choice Bank operates with a lower net interest margin and is viewed by Berkshire as having a liability sensitive interest rate profile. Berkshire evaluated these impacts with its merger analytics and the projections of attractive returns on this investment include these expected impacts and the longer term expected operations of this business combination.

In addition to modeling market risk in relation to net interest income, the Company also models net income at risk in various interest rate scenarios. Various sources of fee income, including interest rate swap income and mortgage banking revenue, are sensitive to interest rates. Other components of revenue and expense are also considered and net income estimates include the impact of income taxes on modeled changes. Management considers the risks to net income in evaluating its overall asset liability management and strategies. As part of the modeling initiatives that management is currently undertaking, the Company will also be enhancing its modeling of net income at risk as well as integrating with its capital stress testing initiatives. Additionally, these initiatives will include the modeling

88

impacts of First Choice Bank and its relatively higher proportion of non-interest income at risk based on its mortgage banking operations.

The Company also estimates the sensitivity of the economic value of its equity to interest rate shocks. The Company seeks to avoid having excess long term earnings at risk when interest rates rise in the long term future, as anticipated. At midyear 2016, the Company estimated that the economic value of equity would decrease by approximately 12% in the event of a 200 basis point upward interest rate shock, which was within the Company’s policy limits. This compares to 9% at the start of the year; the increase reflects the impact of growth in fixed rate assets on medium and long term modeled net interest income if interest rates increase. This estimate is subject to numerous assumptions and uncertainties and is not intended as a projection of future operating results.

In a prolonged low rate environment, Berkshire has a number of business strategies to support its net interest income and margin objectives. These include changes in volumes and mix of interest bearing assets and liabilities, some of which are discussed above. The Company also evaluates its pricing strategies on an ongoing basis, and considers its investment, borrowings, and derivatives strategies in managing its income and risk profile. Due to the limitations and uncertainties relating to model assumptions, the modeled computations should not be relied on as projections of income. Further, the computations do not reflect any actions that management may undertake in response to changes in interest rates.

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ITEM 4.           CONTROLS AND PROCEDURES

a)  Disclosure controls and procedures.

The principal executive officers, including the principal financial officer, based on their evaluation of disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Quarterly Report on Form 10-Q, have concluded that the Company’s disclosure controls and procedures were effective.

b)  Changes in internal control over financial reporting.

There were no changes in the Company’s internal control over financial reporting that occurred during the last fiscal quarter 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

ITEM 1.            LEGAL PROCEEDINGS

As of June 30, 2016, neither the Company nor the Bank was involved in any pending legal proceedings believed by management to be material to the Company’s financial condition or results of operations. Periodically, there have been various claims and lawsuits involving the Bank, such as claims to enforce liens, condemnation proceedings on properties in which the Bank holds security interests, claims involving the making and servicing of real property loans and other issues incident to the Bank’s business. However, other than the item noted below, neither the Company nor the Bank is a party to any pending legal proceedings that it believes, in the aggregate, would have a material adverse effect on the financial condition or operations of the Company.

On April 28, 2016, Berkshire Hills and Berkshire Bank were served with a complaint filed in the United States District Court, District of Massachusetts, Springfield Division. The complaint was filed by an individual Berkshire Bank depositor, who claims to have filed the complaint on behalf of a purported class of Berkshire Bank depositors, and alleges violations of the Electronic Funds Transfer Act and certain regulations thereunder, among other matters. On July 15, 2016, the complaint was amended to add purported claims under the Massachusetts Consumer Protection Act. The complaint seeks, in part, compensatory, consequential, statutory, and punitive damages. Berkshire Hills and Berkshire Bank deny the allegations contained in the complaint and are vigorously defending this lawsuit.

ITEM 1A.               RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the factors discussed below and in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2015, which could materially affect our business, financial condition or future results. The risks described in this form are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

There is no assurance when or even if the merger of First Choice Bank with and into Berkshire Bank will be completed.

Completion of the merger of First Choice Bank with and into Berkshire Bank is subject to satisfaction or waiver of a number of conditions set forth in the merger agreement. There can be no assurance that the Company, Berkshire Bank, and First Choice Bank will be able to satisfy the closing conditions or that closing conditions beyond their control will be satisfied or waived.

The Company, Berkshire Bank, and First Choice Bank can agree at any time to terminate the merger agreement, even if First Choice Bank stockholders have already voted to approve the merger agreement. The Company and First Choice Bank can also terminate the merger agreement under other specified circumstances.

Regulatory approvals may not be received, may take longer than expected or impose conditions that are not presently anticipated.

Before the merger may be completed, certain approvals or consents must be obtained from the various bank regulatory and other authorities in the United States and the Commonwealth of Massachusetts. There can be no assurance as to whether the federal or state regulatory approval will be received or the timing of the approvals. The Company is not obligated to complete the merger if the regulatory approvals received in connection with the completion of the merger include any conditions or restrictions that would constitute a "material adverse effect" as defined in the merger agreement. While the Company does not currently expect that any such conditions or restrictions would be imposed, there can be no assurance that they will not be, and such conditions or restrictions could have the effect of delaying or preventing completion of the merger.

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Goodwill incurred in the merger may negatively affect the Company's financial condition.

To the extent that the merger consideration, consisting of the number of shares of the Company common stock issued or to be issued in the merger, exceeds the fair value of the net assets, including identifiable intangibles of First Choice Bank, that amount will be reported as goodwill by the Company. In accordance with current accounting guidance, goodwill will not be amortized but will be evaluated for impairment at least annually. A failure to realize expected benefits of the merger could adversely impact the carrying value of the goodwill recognized in the merger, and in turn negatively affect the Company's financial condition.

Berkshire Bank may be unable to successfully integrate First Choice Bank’s operations or otherwise realize the expected benefits from the merger, which would adversely affect the Company's results of operations and financial condition.

The merger involves the integration of two companies that have previously operated independently. The difficulties of combining the operations of the two companies include:

• Integrating personnel with diverse business backgrounds;

• Combining different corporate cultures; and

• Retaining key employees.

The process of integrating operations could cause an interruption of, or loss of momentum in, the activities of the business and the loss of key personnel. The integration of the two companies will require the experience and expertise of certain key employees of First Choice Bank and its subsidiary, First Choice Loan Services, who are expected to be retained by Berkshire Bank. Berkshire Bank may not be successful in retaining these employees for the time period necessary to successfully integrate First Choice Bank’s and First Choice Loan Services’ operations with those of Berkshire Bank. The diversion of management's attention and any delay or difficulty encountered in connection with the merger and the integration of the two companies' operations could have an adverse effect on the business and results of operation of the Company following the merger.

The success of the merger will depend, in part, on the Company's ability to realize the anticipated benefits and cost savings from combining the business of First Choice Bank with and into Berkshire Bank. If Berkshire Bank is unable to successfully integrate First Choice Bank and successfully manage First Choice Loan Services as a wholly owned subsidiary, the anticipated benefits and cost savings of the merger may not be realized fully or may take longer to realize than expected. For example, the Company may fail to realize the anticipated increase in earning and cost savings anticipated to be derived from the acquisition. In addition, as with regard to any merger, a significant decline in asset valuations or cash flows may also cause the Company not to realize expected benefits.

Clarification of tax rules and regulations may impact the Company's ability to execute on certain tax strategies.

The risk factors at year-end 2015 also included discussion of possible changes in tax preference items, including rulings by taxing authorities. In the third quarter of 2016, taxing authorities issued additional guidance relevant to certain tax credit related investments in progress and contemplated by the Company. This guidance reduced uncertainties related to such rulings and the Company's assessment is that the financial impact will be less for qualifying opportunities for certain investments in the future. The Company anticipates that its tax rate will increase if tax credit related benefits decrease from current levels.

Recent changes in executive management can introduce control risks.

In the third quarter of 2016, the Company announced the resignation of its SEVP/Chief Financial Officer and the recruitment of a new individual into this position. As noted in the Form 10-K, transitions in management could introduce control risks in the operating environment.

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ITEM 2.               UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(a)                Recent Sales of Unregistered Securities

The Company occasionally engages in the practice of transferring unregistered securities for the purpose of completing business transactions. These shares are issued to vendors or other organizations as consideration for services performed in accordance with each contract. During the six months ended June 30, 2016 and June 30, 2015, the Company transferred 50,120 shares and 4,269 shares, respectively.

(b)                 Not applicable.

(c)                 The following table provides certain information with regard to shares repurchased by the Company in the second quarter of 2016:

	Total number of	Average price		Total number of shares purchased as part of publicly announced	Maximum number of shares that may yet be purchased under
Period	shares purchased	paid per share		plans or programs	the plans or programs
April 1-30, 2016	—	$	—	—	500,000
May 1-31, 2016	—	—		—	500,000
June 1-30, 2016	—	—		—	500,000
Total	—	$	—	—	500,000

On December 2, 2015, the Company announced that its Board of Directors authorized a new stock repurchase program, pursuant to which the Company may repurchase up to 500 thousand shares of the Company's common stock, representing approximately 1.6% of the Company’s then outstanding shares. The timing of the purchases will depend on certain factors, including but not limited to, market conditions and prices, available funds, and alternative uses of capital. The stock repurchase program may be carried out through open-market purchases, block trades, negotiated private transactions or pursuant to a trading plan adopted in accordance with Rule 10b5-1 under the Securities Exchange Act of 1934. Any repurchased shares will be recorded as treasury shares. The repurchase plan will continue until it is completed or terminated by the Board of Directors. As of June 30, 2016, no shares had been purchased under this program.

ITEM 3.                DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.                  MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.                OTHER INFORMATION

None.

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ITEM 6.                   EXHIBITS

2.1	Agreement and Plan of Merger, dated as of November 3, 2014, by and between Berkshire Hills Bancorp, Inc. and Hampden Bancorp, Inc. (1)
2.2	Agreement and Plan of Merger, dated as of May 21, 2015, by and among Firestone Financial Corp., Berkshire Hills Bancorp, Inc., Berkshire Bank, Jacob Acquisition LLC, and David S. Cohen, solely in his capacity as the representative of the Firestone security holders (5)
2.3	Agreement and Plan of Merger, dated as of June 24, 2016, by and among Berkshire Hills Bancorp, Inc., Berkshire Bank, and First Choice Bank (6)
3.1	Certificate of Incorporation of Berkshire Hills Bancorp, Inc. (2)
3.2	Amended and Restated Bylaws of Berkshire Hills Bancorp, Inc. (3)
4.1	Form of Common Stock Certificate of Berkshire Hills Bancorp, Inc. (2)
4.2	Note Subscription Agreement by and among Berkshire Hills Bancorp, Inc. and certain subscribers dated September 20, 2012 (4)
10.1	Berkshire Bank Supplemental Executive Retirement Agreement for Richard Marotta (7)
11.0	Statement re: Computation of Per Share Earnings is incorporated herein by reference to Part II, Item 8, “Financial Statements and Supplementary Data”
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101	Shareholder Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Consolidated Statements of Condition, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Changes in Shareholders’ Equity, (v) the Consolidated Statements of Cash Flows, and (vi) the Notes to Consolidated Financial Statements tagged as blocks of text and in detail.

_______________________________________

(1)  Incorporated by reference from the Exhibits to the Form 8-K filed on November 4, 2014.

(2)  Incorporated herein by reference from the Exhibits to Form S-1, Registration Statement and amendments thereto, initially filed on March 10, 2000, Registration No. 333-32146.

(3)  Incorporated herein by reference from the Exhibits to the Form 8-K as filed on April 28, 2015.

(4)  Incorporated by reference from the Exhibits to the Form 8-K as filed on September 26, 2012.

(5) Incorporated herein by reference from the Exhibits to the Form 8-K as filed on May 22, 2015.

(6)  Incorporated herein by reference from the Exhibits to the Form 8-K as filed on June 27, 2016.

(7)  Incorporated herein by reference from the Exhibits to the Form 8-K as filed on June 29, 2016.

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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.

	BERKSHIRE HILLS BANCORP, INC.
Dated: August 9, 2016	By:	/s/ Michael P. Daly
	Michael P. Daly
	Chief Executive Officer
Dated: August 9, 2016	By:	/s/ James M. Moses
	James M. Moses
	Senior Executive Vice President, Chief Financial Officer

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EX-31.1

Exhibit 31.1

CERTIFICATION

I, Michael P. Daly, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Berkshire Hills 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 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 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 quarterly 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 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 registrant’s board of directors (or persons performing the equivalent functions):

a.	All significant deficiencies and material weakness 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.

August 9, 2016	/s/ Michael P. Daly
	Michael P. Daly
	Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, James M. Moses, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Berkshire Hills 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 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 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 quarterly 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 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 registrant’s board of directors (or persons performing the equivalent functions):

a.	All significant deficiencies and material weakness 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.

August 9, 2016	/s/ James M. Moses
	James M. Moses
	Senior Executive Vice President, Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Berkshire Hills Bancorp, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2016, as filed with the Securities and Exchange Commission (the “Report”), I, Michael P. Daly, Chairman and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.	The Report 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 the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the Report.

August 9, 2016	/s/ Michael P. Daly
	Michael P. Daly
	Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Berkshire Hills Bancorp, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2016, as filed with the Securities and Exchange Commission (the “Report”), I, James M. Moses, Senior Executive Vice President, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.	The Report 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 the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the Report.

August 9, 2016	/s/ James M. Moses
	James M. Moses
	Senior Executive Vice President, Chief Financial Officer

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Aug. 04, 2016
Document and Entity Information
Entity Registrant Name	BERKSHIRE HILLS BANCORP INC
Entity Central Index Key	0001108134
Document Type	10-Q
Document Period End Date	Jun. 30, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		31,139,213
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q2

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2016		Dec. 31, 2015
Assets
Cash and due from banks	$ 58,332		$ 72,918
Short-term investments	16,247		30,644
Total cash and cash equivalents	74,579		103,562
Trading security, at fair value	14,479		14,189
Securities available for sale, at fair value	1,073,370		1,154,457
Securities held to maturity (fair values of $141,544 and $136,904)	132,010		131,652
Federal Home Loan Bank stock and other restricted securities	68,242		71,018
Total securities	1,288,101		1,371,316
Loans held for sale	22,450		13,191
Commercial real estate	2,237,582		2,059,767
Commercial and industrial loans	1,034,559		1,048,263
Residential mortgages	1,843,600		1,815,035
Consumer loans	884,560		802,171
Total loans	6,000,301		5,725,236
Less: Allowance for loan losses	(41,397)		(39,308)
Net loans	5,958,904		5,685,928
Premises and equipment, net	86,274		88,072
Other real estate owned	595		1,725
Goodwill	339,929		323,943
Other intangible assets	9,057		10,664
Cash surrender value of bank-owned life insurance policies	127,000		125,233
Deferred tax assets, net	32,945		42,526
Other assets	103,825		64,926
Total assets	8,043,659		7,831,086
Liabilities
Demand deposits	1,050,220		1,081,860
NOW deposits	489,734		510,807
Money market deposits	1,415,041		1,408,107
Savings deposits	611,627		601,761
Time deposits	2,090,102		1,986,600
Total deposits	5,656,724		5,589,135
Short-term debt	1,110,320		1,071,200
Long-term Federal Home Loan Bank advances	120,844		103,135
Subordinated borrowings	89,072		88,983
Total borrowings	1,320,236		1,263,318
Other liabilities	143,279		91,444
Total liabilities	7,120,239		6,943,897
Shareholders’ equity
Common stock ($.01 par value; 50,000,000 shares authorized and 32,321,962 shares issued and 31,156,292 shares outstanding in 2016; 32,321,962 shares issued and 30,973,986 shares outstanding in 2015)	322		322
Additional paid-in capital	744,810		742,619
Unearned compensation	(8,798)		(6,997)
Retained earnings	203,382		183,885
Accumulated other comprehensive income	10,213		(3,305)
Treasury stock, at cost (1,056,739 shares in 2016 and 1,179,045 shares in 2015)	(26,509)		(29,335)
Total Shareholders’ equity	923,420	[1]	887,189
Total liabilities and Shareholders’ equity	$ 8,043,659		$ 7,831,086

[1] The Company's common stock includes the elimination of $2.9 million (108,931 shares) of Berkshire Hills Bancorp stock held by a subsidiary.

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CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Securities held to maturity, fair value	$ 141,544	$ 136,904
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	50,000,000	50,000,000
Common stock, shares issued (in shares)	32,321,962	32,321,962
Common stock, shares outstanding (in shares)	31,156,292	30,973,986
Treasury stock (in shares)	1,056,739	1,179,045

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CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Interest and dividend income
Loans	$ 59,703	$ 51,504	$ 118,145	$ 95,949
Securities and other	9,315	8,899	19,349	17,205
Total interest and dividend income	69,018	60,403	137,494	113,154
Interest expense
Deposits	7,378	5,292	14,537	10,241
Borrowings	4,199	2,474	7,819	4,783
Total interest expense	11,577	7,766	22,356	15,024
Net interest income	57,441	52,637	115,138	98,130
Non-interest income
Loan related income	2,898	2,783	5,944	4,066
Mortgage banking income	1,335	1,546	2,156	2,799
Deposit related fees	6,291	6,442	12,400	12,119
Insurance commissions and fees	2,660	2,486	5,553	5,453
Wealth management fees	2,235	2,397	4,737	5,000
Total fee income	15,419	15,654	30,790	29,437
Other	(851)	(1,258)	(628)	(2,513)
(Loss) gain on sale of securities, net	(13)	2,384	23	2,418
Total non-interest income	14,555	16,780	30,185	29,342
Total net revenue	71,996	69,417	145,323	127,472
Provision for loan losses	4,522	4,204	8,528	8,055
Non-interest expense
Compensation and benefits	24,664	24,503	50,378	46,314
Occupancy and equipment	6,560	7,243	13,250	14,351
Technology and communications	4,814	4,090	9,671	7,683
Marketing and promotion	737	800	1,410	1,513
Professional services	1,509	1,375	2,789	2,647
FDIC premiums and assessments	1,203	1,143	2,436	2,272
Other real estate owned and foreclosures	393	251	656	502
Amortization of intangible assets	787	934	1,606	1,835
Acquisition, restructuring and conversion related expenses	878	8,711	1,658	13,132
Other	4,723	4,975	9,514	8,924
Total non-interest expense	46,268	54,025	93,368	99,173
Income before income taxes	21,206	11,188	43,427	20,244
Income tax expense	5,249	1,144	11,469	1,441
Net income	$ 15,957	$ 10,044	$ 31,958	$ 18,803
Earnings per share:
Basic (USD per share)	$ 0.52	$ 0.35	$ 1.05	$ 0.71
Diluted (USD per share)	$ 0.52	$ 0.35	$ 1.04	$ 0.70
Weighted average common shares outstanding:
Basic (in shares)	30,605	28,301	30,561	26,557
Diluted (in shares)	30,765	28,461	30,725	26,713

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Statement of Comprehensive Income [Abstract]
Net income	$ 15,957	$ 10,044	$ 31,958	$ 18,803
Other comprehensive income, before tax:
Changes in unrealized gain on securities available-for-sale	9,586	(16,071)	27,293	(6,734)
Changes in unrealized loss on derivative hedges	(884)	784	(5,390)	(3,117)
Changes in unrealized loss on pension	0	65	0	(1,466)
Income taxes related to other comprehensive income:
Changes in unrealized gain on securities available-for-sale	(3,691)	6,100	(10,548)	2,495
Changes in unrealized loss on derivative hedges	355	(316)	2,163	1,256
Changes in unrealized loss on pension	0	(26)	0	591
Total other comprehensive income (loss)	5,366	(9,464)	13,518	(6,975)
Total comprehensive income	$ 21,323	$ 580	$ 45,476	$ 11,828

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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands		Total	Hampden Bancorp Inc	44 Business Capital	Common stock	Common stock Hampden Bancorp Inc	Common stock 44 Business Capital	Additional paid-in capital	Additional paid-in capital Hampden Bancorp Inc	Unearned compensation	Retained earnings	Accumulated other comprehensive (loss) income	Treasury stock	Treasury stock 44 Business Capital
Balance (shares) at Dec. 31, 2014					25,183,000
Balance at Beginning of Period at Dec. 31, 2014		$ 709,287			$ 265			$ 585,289		$ (6,147)	$ 156,446	$ 6,579	$ (33,145)
Comprehensive income:
Net income		18,803									18,803
Other comprehensive loss		(6,975)										(6,975)
Total comprehensive income		11,828
Acquisition of 44 Business Capital (shares)						4,186,000
Acquisition of 44 Business Capital						$ 42			$ 114,562
Cash dividends declared		(10,440)									(10,440)
Treasury stock purchased (shares)					0
Treasury stock purchased		0											0
Forfeited shares (shares)					(11,000)
Forfeited shares		0						28		254			(282)
Exercise of stock options (shares)					11,000
Exercise of stock options		116									(165)		281
Restricted stock grants (shares)					174,000
Restricted stock grants		0						283		(4,579)			4,296
Stock-based compensation		2,252						0		2,252
Net tax benefit related to stock-based compensation		26						26
Other, net (shares)					(22,000)
Other, net		(522)						5					(527)
Balance (shares) at Jun. 30, 2015					29,521,000
Balance at Jun. 30, 2015		827,151			$ 307			700,193		(8,220)	164,644	(396)	(29,377)
Balance (shares) at Dec. 31, 2014					25,183,000
Balance at Beginning of Period at Dec. 31, 2014		709,287			$ 265			585,289		(6,147)	156,446	6,579	(33,145)
Comprehensive income:
Acquisition of 44 Business Capital			$ 114,604
Balance (shares) at Dec. 31, 2015					30,974,000
Balance at Dec. 31, 2015		887,189			$ 322			742,619		(6,997)	183,885	(3,305)	(29,335)
Balance at Beginning of Period at Mar. 31, 2015												9,068
Comprehensive income:
Net income		10,044
Other comprehensive loss		(9,464)
Total comprehensive income		580
Balance (shares) at Jun. 30, 2015					29,521,000
Balance at Jun. 30, 2015		827,151			$ 307			700,193		(8,220)	164,644	(396)	(29,377)
Balance (shares) at Dec. 31, 2015					30,974,000
Balance at Beginning of Period at Dec. 31, 2015		887,189			$ 322			742,619		(6,997)	183,885	(3,305)	(29,335)
Comprehensive income:
Net income		31,958									31,958
Other comprehensive loss		13,518										13,518
Total comprehensive income		45,476
Acquisition of 44 Business Capital (shares)							45,000
Acquisition of 44 Business Capital				$ 1,217										$ 1,217
Cash dividends declared		$ (12,442)									(12,442)
Treasury stock purchased (shares)		(60,000)
Treasury stock purchased	[1]	$ 0						1,645					(1,645)
Forfeited shares (shares)					(22,000)
Forfeited shares		0						68		526			(594)
Exercise of stock options (shares)					2,000
Exercise of stock options		36									(19)		55
Restricted stock grants (shares)					180,000
Restricted stock grants		0						496		(4,923)			4,427
Stock-based compensation		2,596								2,596
Net tax benefit related to stock-based compensation		(1)						(1)
Other, net (shares)					(23,000)
Other, net		(651)						(17)					(634)
Balance (shares) at Jun. 30, 2016	[2]				31,156,000
Balance at Jun. 30, 2016	[2]	923,420			$ 322			744,810		(8,798)	203,382	10,213	(26,509)
Balance at Beginning of Period at Mar. 31, 2016												4,847
Comprehensive income:
Net income		15,957
Other comprehensive loss		5,366
Total comprehensive income		21,323
Balance (shares) at Jun. 30, 2016	[2]				31,156,000
Balance at Jun. 30, 2016	[2]	$ 923,420			$ 322			$ 744,810		$ (8,798)	$ 203,382	$ 10,213	$ (26,509)

[1] Treasury stock adjustment represents the sale of 60,000 shares of Berkshire Hills Bancorp stock held by the Company's subsidiary.

[2] The Company's common stock includes the elimination of $2.9 million (108,931 shares) of Berkshire Hills Bancorp stock held by a subsidiary.

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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - USD ($) $ in Millions		6 Months Ended
		Jun. 30, 2016	Jun. 30, 2015
Statement of Stockholders' Equity [Abstract]
Fair value of Hampden shares previously owned by the Company prior to acquisition		$ 2.9
Eliminated value of Berkshire Hills Bancorp stock held by a subsidiary (shares)	[1]	108,931
Treasury stock purchased (shares)		60,000
Cash dividends declared (USD per share)		$ 0.40	$ 0.38

[1] The Company's common stock includes the elimination of $2.9 million (108,931 shares) of Berkshire Hills Bancorp stock held by a subsidiary.

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Cash flows from operating activities:
Net income	$ 31,958	$ 18,803
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	8,528	8,055
Net amortization of securities	2,003	863
Change in unamortized net loan costs and premiums	(3,268)	836
Premises and equipment depreciation and amortization expense	4,237	4,282
Stock-based compensation expense	2,596	2,252
Accretion of purchase accounting entries, net	(4,801)	(3,071)
Amortization of other intangibles	1,606	1,835
Write down of other real estate owned	365	75
Excess tax loss from stock-based payment arrangements	(105)	(26)
Income from cash surrender value of bank-owned life insurance policies	(2,025)	(1,535)
Gain on sales of securities, net	(23)	(2,418)
Net (increase) in loans held for sale	(9,259)	(28,102)
Loss on disposition of assets	15	2,084
Loss on sale of real estate	57	400
Amortization of interest in tax-advantaged projects	2,929	5,748
Net change in other	(5,134)	(8,384)
Net cash provided by operating activities	29,679	1,697
Cash flows from investing activities:
Net decrease in trading security	296	282
Proceeds from sales of securities available for sale	187,519	22,504
Proceeds from maturities, calls and prepayments of securities available for sale	83,883	94,561
Purchases of securities available for sale	(164,943)	(174,992)
Proceeds from maturities, calls and prepayments of securities held to maturity	4,288	1,875
Purchases of securities held to maturity	(4,786)	(45,520)
Net change in loans	(250,002)	(126,806)
Proceeds from surrender of bank-owned life insurance	258	431
Proceeds from sale of Federal Home Loan Bank stock	11,578	163
Purchase of Federal Home Loan Bank stock	(8,803)	(10,706)
Net investment in limited partnership tax credits	(4,122)	(2,500)
Proceeds from the sale of premises and equipment	226	541
Purchase of premises and equipment, net	(2,839)	(3,070)
Acquisitions, net of cash (paid) acquired	(55,542)	83,134
Proceeds from sale of other real estate	933	1,476
Net cash used in investing activities	(202,056)	(158,627)
Cash flows from financing activities:
Net increase (decrease) in deposits	98,604	206,354
Proceeds from Federal Home Loan Bank advances and other borrowings	4,449,120	3,896,000
Repayments of Federal Home Loan Bank advances and other borrowings	(4,391,925)	(3,801,362)
Exercise of stock options	37	116
Excess tax loss from stock-based payment arrangements	0	26
Common stock cash dividends paid	(12,442)	(10,440)
Net cash provided by financing activities	143,394	290,694
Net change in cash and cash equivalents	(28,983)	133,764
Cash and cash equivalents at beginning of year	103,562	71,754
Cash and cash equivalents at end of year	74,579	205,518
Supplemental cash flow information:
Interest paid on deposits	14,573	10,290
Interest paid on borrowed funds	7,497	4,555
Income taxes paid, net	7,278	324
Acquisition of non-cash assets and liabilities:
Assets acquired	56,976	730,868
Liabilities assumed	(108)	(611,601)
Other non-cash changes:
Other net comprehensive income	13,518	(6,975)
Real estate owned acquired in settlement of loans	$ 225	$ 460

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BASIS OF PRESENTATION

6 Months Ended

Jun. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

BASIS OF PRESENTATION

BASIS OF PRESENTATION

The consolidated financial statements (the “financial statements”) of Berkshire Hills Bancorp, Inc. and its subsidiaries (the “Company” or “Berkshire”) have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The Company is a Delaware corporation and the holding company for Berkshire Bank (the “Bank”), a Massachusetts-chartered trust company headquartered in Pittsfield, Massachusetts, and Berkshire Insurance Group, Inc. (“Berkshire Insurance Group” or “BIG”). These financial statements include the accounts of the Company, its wholly-owned subsidiaries and the Bank’s consolidated subsidiaries. In consolidation, all significant intercompany accounts and transactions are eliminated. The results of operations of companies or assets acquired are included only from the dates of acquisition. All material wholly-owned and majority-owned subsidiaries are consolidated unless GAAP requires otherwise.

In addition, these interim financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X, and accordingly, certain information and footnote disclosures normally included in financial statements prepared according to U.S. GAAP have been omitted.

The results for any interim period are not necessarily indicative of results for the full year. These consolidated financial statements should be read in conjunction with the audited financial statements and note disclosures for Berkshire Hills Bancorp, Inc. (the “Company”) previously filed with the Securities and Exchange Commission in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. In management's opinion, all adjustments necessary for a fair statement are reflected in the interim periods presented.

Recently Adopted Accounting Principles

Effective January 1, 2016, the following new accounting guidance was adopted by the Company:

• ASU No. 2015-02, Consolidation (Topic 810) - Amendments to the Consolidation Analysis;

• ASU No. 2015-03, Interest-Imputation of Interest (Subtopic 835-30) - Simplifying the Presentation of Debt Issuance Costs;

• ASU No. 2015-05, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement; and

• ASU No. 2015-16, Business Combinations (Topic 805) - Simplifying the Accounting for Measurement - Period Adjustments.

The adoption of these accounting standards did not have a material impact on the Company's financial statements.

In March 2016, the FASB issued ASU No. 2016-09, “Improvement to Employee Share-Based Payment Accounting”. This ASU contains targeted amendments to the accounting for shared based payment transactions, including income tax consequences for awards, classification of awards as either equity or liabilities, and classification of activity on the statement of cash flows. Specifically, some of the requirements under the amendments include: (1) excess tax benefits and/or tax deficiencies, determined as the difference between compensation cost recognized for financial reporting purposes and the deduction for tax, be recognized in the income statement as income tax expense or benefit in the period in which they occur, removing historical equity treatment; (2) excess tax benefits are no longer separately classified as a financing activity but rather should be classified with other income tax cash flows as an operating activity on the statement of cash flows; (3) cash paid by an employer when withholding shares for tax withholding purposes should be classified as a financing activity. Additionally, regarding forfeitures, this guidance permits a company to make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest (current GAAP) or account for forfeitures when they occur. ASU No. 2016-09 is effective for annual periods beginning after December 15, 2016. The Company adopted ASU No. 2016-09 in April 2016 and the adoption of this accounting standard did not have a material impact on the Company's consolidated financial statements. The Company chose a modified retrospective approach and a policy election to account for forfeitures when they occur. This change resulted in a cumulative adjustment immaterial to all periods presented.

Future Application of Accounting Pronouncements

In May 2014, the FASB issued ASU No. 2014-09 related to the recognition of revenue from contracts with customers. The new revenue pronouncement creates a single source of revenue guidance for all companies in all industries and is more principles based than current revenue guidance. The pronouncement provides a five-step model for a company to recognize revenue when it transfers control of goods or services to customers at an amount that reflects the consideration to which it expects to be entitled in exchange for those goods or services. The five steps are (1) identify the contract with the customer, (2) identify the separate performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the separate performance obligations and (5) recognize revenue when each performance obligation is satisfied. The standard is effective for public entities for interim and annual reporting periods beginning after December 15, 2016; early adoption is not permitted. However, in August 2015, Accounting Standards Update No. 2015-14, “Deferral of the Effective Date” (“ASU 2015-14”) was issued and delayed the effective date of ASU 2014-09 to annual and interim periods in fiscal years beginning after December 15, 2017. Early adoption is permitted, but not before the original effective date (i.e., interim and annual reporting periods beginning after December 15, 2016). For financial reporting purposes, the standard allows for either full retrospective adoption, meaning the standard is applied to all of the periods presented, or modified retrospective adoption, meaning the standard is applied only to the most current period presented in the financial statements with the cumulative effect of initially applying the standard recognized at the date of initial application.

In March, April and May 2016, the FASB issued ASU No. 2016-08, “Principal versus Agent Considerations,” ASU No. 2016-10, “Identifying Performance Obligations and Licensing,” and ASU 2016-12, “Narrow-Scope Improvements and Practical Expedients,” respectfully. The updates are not intended to change the core principles of the standard; however, they attempt to clarify important aspects of the guidance and improve its operability. The amendments have the same effective date and transition requirements as the new revenue standard. The Company is currently evaluating the provisions of ASU No. 2014-09, and will be closely monitoring developments and additional guidance to determine the potential impact the new standard will have on the Company's consolidated financial statements.

In January 2016, the FASB issued ASU No. 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities.” This ASU requires an entity to: i) measure equity investments at fair value through net income, with certain exceptions; (ii) present in other comprehensive income the changes in instrument-specific credit risk for financial liabilities measured using the fair value option; (iii) present financial assets and financial liabilities by measurement category and form of financial asset; (iv) calculate the fair value of financial instruments for disclosure purposes based on an exit price and; (v) assess a valuation allowance on deferred tax assets related to unrealized losses of AFS debt securities in combination with other deferred tax assets. The guidance provides an election to subsequently measure certain nonmarketable equity investments at cost less any impairment and adjusted for certain observable price changes. The guidance also requires a qualitative impairment assessment of such equity investments and amends certain fair value disclosure requirements. The guidance is effective for annual periods beginning after December 15, 2017. Early adoption is only permitted for the provision related to instrument specific credit risk. The Company is currently evaluating the impact of the new standard on the Company's consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, “Leases”. The new pronouncement improves the transparency and comparability of financial reporting around leasing transactions and more closely aligns accounting for leases with the recently issued International Financial Reporting Standard.  The pronouncement affects all entities that are participants to leasing agreements. From a lessee accounting perspective, the ASU requires a lessee to recognize assets and liabilities on the balance sheet for operating leases and changes many key definitions, including the definition of a lease. The ASU includes a short-term lease exception for leases with a term of twelve months or less, in which a lessee can make an accounting policy election not to recognize lease assets and lease liabilities. Lessees will continue to differentiate between finance leases (previously referred to as capital leases) and operating leases, using classification criteria that are substantially similar to the previous guidance. For lessees, the recognition, measurement, and presentation of expenses and cash flows arising from a lease have not significantly changed from previous GAAP. From a lessor accounting perspective, the guidance is largely unchanged, except for targeted improvements to align with new terminology under lessee accounting and with the updated revenue recognition guidance in Topic 606. For sale-leaseback transactions, for a sale to occur the transfer must meet the sale criteria under the new revenue standard, ASC 606. Entities will not be required to reassess transactions previously accounted under then existing guidance.

Additionally, the ASU includes additional quantitative and qualitative disclosures required by lessees and lessors to help users better understand the amount, timing, and uncertainty of cash flows arising from leases. ASU No. 2016-02 is effective for fiscal years beginning after December 31, 2018, and interim periods within those fiscal years. Lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply as well as transition guidance specific to nonstandard leasing transactions. The Company is currently evaluating the provision of the ASU No. 2016-02 to determine the potential impact the new standard will have on the the Company's consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-05, “Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships”. This ASU clarifies that changes in the counterparty to a derivative instrument designated as a hedge do notalone require it to be de-designated and therefore discontinue the application of hedge accounting. Companies are still required to evaluate whether it is probable that a counterparty will perform under the contract as part of the ongoing effectiveness assessment for hedge accounting. The new guidance is effective for annual periods beginning after December 15, 2016 and entities may adopt on a prospective or modified retrospective basis. The adoption of this pronouncement is not expected to have a material impact on the Company's consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-06, “Contingent Put and Call Options in Debt Instruments” clarifying the assessment of whether contingent call (put) options that can accelerate the payment of principal on debt instruments are clearly and closely related to the economic characteristics and risks of their debt hosts, a criteria in assessing whether to bifurcate an embedded derivative.  The new pronouncement clarifies the exercise contingency and the event triggering the contingency does not need to be evaluated in the clearly and closely analysis relative to interest rates or credit risks. Rather, the call or put would be evaluated as a derivative regardless of the exercise contingency. Further, if an entity is no longer required to bifurcate aput or call option per the new guidance, the entity has a one-time option to irrevocably elect to measure that debt instrument in its entirety at fair value with changes in fair value recognized in earnings. ASU No. 2016-06 is effective for annual periods beginning after December 15, 2016 and early adoption is permitted. The ASU should be applied using the modified retrospective basis to existing instruments as of the beginning of the annual period of adoption. The adoption of this pronouncement is not expected to have a material impact on the Company's consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-07 “Simplifying the Transition to the Equity Method of Accounting” which eliminates the requirement to retroactively adjust an investment that becomes subject to the equity method of accounting as a result of an increase ownership interest or degree of influence.  Alternatively, an investor entity adds the cost of acquiring the additional interest in the investee to the current basis of the investor’s previously held interest and adopts the equity method of accounting prospectively as of the qualifying date; no retroactive adjustment is required. Additionally, ASU No. 2016-07 specifies that when an available-for-sale equity security becomes qualified for the equity method of accounting, a company should recognize the unrealized holding gain or loss in accumulated other comprehensive income through earnings at the date the investment becomes qualified for use of the equity method. This guidance is effective for all entities for annual periods beginning after December 15, 2016, with early adoption permitted on a prospective basis. The adoption of this pronouncement is not expected to have a material impact on the Company's consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, “Measurement of Credit Losses on Financial Instruments.” This ASU improves financial reporting by requiring timelier recording of credit losses on loans and other financial instruments. The ASU requires companies to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Forward-looking information will now be used in credit loss estimates. The ASU requires enhanced disclosures to provide better understanding surrounding significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of a company’s portfolio. These disclosures include qualitative and quantitative requirements that provide additional information about the amounts recorded in the financial statements. Additionally, the ASU amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. Most debt instruments will require a cumulative-effect adjustment to retained earnings on the statement of financial position as of the beginning of the first reporting period in which the guidance is adopted (modified retrospective approach). However, there is instrument-specific transition guidance. ASU No. 2016-13 is effective for interim and annual periods beginning after December 15, 2019. Early application will be permitted for interim and annual periods beginning after December 15, 2018. The Company is evaluating the provisions of ASU No. 2016-13, and will closely monitor developments and additional guidance to determine the potential impact on the Company's consolidated financial statements.

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ACQUISITION

6 Months Ended

Jun. 30, 2016

Business Combinations [Abstract]

ACQUISITION

ACQUISITION

44 Business Capital

On April 29, 2016, the Company acquired and assumed the business model, certain assets, and certain liabilities of 44 Business Capital, along with certain loans and other assets of Parke Bank’s (“Parke”) SBA 7(a) loan program operations. 44 Business Capital was a joint venture of Parke (51%) and a management group (49%), 44 Amigos LLC, located in Blue Bell, Pennsylvania. 44 Business Capital was engaged in originating, servicing, and selling SBA loans using Parke’s SBA PLP preferred lender license.

The transaction includes acquiring assets, key people, systems, and processes necessary for a market participant to run operations as a business. In accordance with ASC 805-10-55, the transaction was recorded as a business combination, resulting in acquisition accounting in which all assets are acquired and liabilities are assumed at fair value.

The loans acquired by the Company were the unguaranteed portions of SBA loans of which $35.6 million were recorded as commercial real estate and $1.2 million were recorded as commercial & industrial. Servicing rights on a notional loan balance of $148 million were also acquired. The Company expects the acquisition to expand its SBA lending program on a super-regional and national basis with the intent of selling many of these loans on the secondary market. Additionally, the acquisition of 44 Business Capital expands the Company’s product lines, creates cross-selling opportunities, and adds niche lending to its portfolio. 44 Business Capital will operate as a direct small business lending division reporting up through the Company’s established small business department.

The following table provides a summary of the assets acquired and liabilities assumed and the associated fair value adjustments as recorded by the Company at acquisition:

(in thousands)	As Acquired			Fair Value Adjustments				As Recorded at Acquisition
Consideration paid:
Company common stock issued to certain 44 Business Capital shareholders (44,840 shares)								$	1,217
Cash paid to 44 Business Capital shareholders and Parke								55,649
Total consideration paid								$	56,866
Recognized amounts of identifiable assets acquired and liabilities assumed, at fair value:
Cash and short-term investments	$	107		$	—			$	107
Loans	42,627			(5,777		)	(a)	36,850
Premises and equipment	69			(36		)	(b)	$	33
Other assets	3,076			639			(c)	3,715
Other liabilities	(108		)	—				$	(108	)
Total identifiable net assets	$	45,771		$	(5,174	)		$	40,597
Goodwill								$	16,269

Explanation of Certain Fair Value Adjustments

(a) The adjustment represents the write down of the book value of loans to their estimated fair value based on current interest rates and expected cash flows, which includes an estimate of expected loan loss inherent in the portfolio. Loans that met the criteria and are being accounted for in accordance with ASC 310-30 had a book value of $6.3 million and have a fair value $2.6 million. Non-impaired loans accounted for under ASC 310-10 had a book value of $36.4 million and have a fair value of $34.3 million. ASC 310-30 loans have a $708 thousand fair value adjustment discount that is accretable in earnings over an average estimated six-year life using the effective yield as determined on the date of acquisition. The effective yield is periodically adjusted for changes in expected flows. ASC 310-10 loans have a $2.1 million fair value adjustment discount that is amortized into income over the remaining term of the loans using the effective interest method.

(b) The fair value of the equipment was assumed to approximate the net carrying value based on overall condition and age. The adjustment represents the immediate expensing of equipment not meeting the thresholds for capitalization in accordance with Company policy. The recorded amount will be depreciated over the remaining estimated economic lives of the assets.

(c) The adjustment represents the fair value write up of book value of the loan servicing right asset to its estimated fair value based on current interest rates and expected cash flows, which includes an estimate of cost of service and conditional prepayment rates applied to the underlying unpaid loan pool balance over the remaining life of the loans. The balance includes accrued interest of $221 thousand.

The fair values for loans acquired were estimated using cash flow projections based on the remaining maturity and repricing terms. Cash flows were adjusted by estimating future credit losses and the rate of prepayments. Projected monthly cash flows were then discounted to present value using a risk-adjusted market rate for similar loans. There was no carryover of the seller’s allowance for credit losses associated with the loans that were acquired in the acquisition as the loans were initially recorded at fair value.

Information about the acquired loan portfolio subject to ASC 310-30 as of April 29, 2016 is, as follows (in thousands):

	ASC 310-30 Loans
Gross contractual receivable amounts at acquisition	$	6,265
Contractual cash flows not expected to be collected (nonaccretable discount)	(3,000		)
Expected cash flows at acquisition	3,265
Interest component of expected cash flows (accretable discount)	(708		)
Fair value of acquired loans	$	2,557

Goodwill capitalized, which is not amortized for book purposes, was assigned to the Company's banking reporting unit and is not deductible for tax purposes.

Direct acquisition and integration costs of the 44 Business Capital acquisition were expensed as incurred, and totaled $115 thousand during the six months ending June 30, 2016 and there were none for the same period of 2015. These costs totaled $21 thousand for the three months ended June 30, 2016 and there were none for the same period of 2015.

Pro Forma Information (unaudited)

The following table presents selected unaudited pro forma financial information reflecting the acquisition of 44 Business Capital assuming the acquisition was completed as of January 1, 2015. The unaudited pro forma financial information includes adjustments for scheduled amortization and accretion of fair value adjustments recorded at the acquisitions. These adjustments would have been different if they had been recorded on January 1, 2015, and they do not include the impact of prepayments. The unaudited pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of the combined financial results of the Company and 44 Business Capital had the transaction actually been completed at the beginning of the periods presented, nor does it indicate future results for any other interim or full-year period. Pro forma basic and diluted earnings per common share were calculated using Berkshire’s actual weighted-average shares outstanding for the periods presented plus the 45 thousand shares issued as a result of the 44 Business Capital acquisition. The unaudited pro forma information is based on the actual financial statements of Berkshire and 44 Business Capital for the periods shown until the date of acquisition, at which time 44 Business Capital operations became included in Berkshire’s financial statements. For the period from the date of acquisition through June 30, 2016, 44 Business Capital's net revenue was $841 thousand and net income was $59 thousand.

The unaudited pro forma information, for the six months ended June 30, 2016 and 2015, set forth below reflects adjustments related to amortization and accretion of purchase accounting fair value adjustments and an estimated tax rate of 40 percent. Direct acquisition expenses incurred by the Company during 2016, as noted above, are reversed for the purposes of this unaudited pro forma information. The unaudited pro forma information does not include interest income from the unguaranteed portion of acquired loans. Furthermore, the unaudited pro forma information does not reflect management’s estimate of any revenue-enhancing or anticipated cost-savings that could occur after June 30, 2016.

Information in the following table is shown in thousands, except earnings per share:

	Pro Forma (unaudited)
	Six Months Ended June 30,
	2016		2015
Net interest income	$	115,269	$	98,417
Non-interest income	32,338		31,650
Net income	32,652		19,417
Pro forma earnings per share:
Basic	$	1.07	$	0.73
Diluted	$	1.06	$	0.73

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TRADING SECURITY

6 Months Ended

Jun. 30, 2016

Trading Securities [Abstract]

TRADING SECURITY

TRADING SECURITY

The Company holds a tax advantaged economic development bond accounted for at fair value. The security had an amortized cost of $11.7 million and $12.0 million, and a fair value of $14.5 million and $14.2 million, at June 30, 2016 and December 31, 2015, respectively. As discussed further in Note 13 - Derivative Financial Instruments and Hedging Activities, the Company has entered into a swap contract to swap-out the fixed rate of the security in exchange for a variable rate. The Company does not purchase securities with the intent of selling them in the near term, and there are no other securities in the trading portfolio at June 30, 2016

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SECURITIES AVAILABLE FOR SALE AND HELD TO MATURITY

6 Months Ended

Jun. 30, 2016

Investments, Debt and Equity Securities [Abstract]

SECURITIES AVAILABLE FOR SALE AND HELD TO MATURITY

SECURITIES AVAILABLE FOR SALE AND HELD TO MATURITY

The following is a summary of securities available for sale and held to maturity:

(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
June 30, 2016
Securities available for sale
Debt securities:
Municipal bonds and obligations	$	103,645	$	7,945	$	—		$	111,590
Agency collateralized mortgage obligations	662,505		17,125		(124		)	679,506
Agency mortgage-backed securities	108,056		1,587		(30		)	109,613
Agency commercial mortgage-backed securities	62,352		899		—			63,251
Corporate bonds	46,874		196		(1,367		)	45,703
Trust preferred securities	11,599		192		(52		)	11,739
Other bonds and obligations	3,164		58		—			3,222
Total debt securities	998,195		28,002		(1,573		)	1,024,624
Marketable equity securities	42,470		7,557		(1,281		)	48,746
Total securities available for sale	1,040,665		35,559		(2,854		)	1,073,370
Securities held to maturity
Municipal bonds and obligations	95,663		7,337		—			103,000
Agency collateralized mortgage obligations	67		8		—			75
Tax advantaged economic development bonds	35,954		2,189		—			38,143
Other bonds and obligations	326		—		—			326
Total securities held to maturity	132,010		9,534		—			141,544
Total	$	1,172,675	$	45,093	$	(2,854	)	$	1,214,914
December 31, 2015
Securities available for sale
Debt securities:
Municipal bonds and obligations	$	99,922	$	4,763	$	(124	)	$	104,561
Agency collateralized mortgage obligations	833,633		4,957		(5,554		)	833,036
Agency mortgage-backed securities	127,274		542		(987		)	126,829
Agency commercial mortgage-backed securities	—		—		—			—
Corporate bonds	42,849		—		(1,827		)	41,022
Trust preferred securities	11,719		182		—			11,901
Other bonds and obligations	3,175		—		(34		)	3,141
Total debt securities	1,118,572		10,444		(8,526		)	1,120,490
Marketable equity securities	30,522		5,331		(1,886		)	33,967
Total securities available for sale	1,149,094		15,775		(10,412		)	1,154,457
Securities held to maturity
Municipal bonds and obligations	94,642		3,359		(34		)	97,967
Agency collateralized mortgage obligations	68		3		—			71
Tax advantaged economic development bonds	36,613		1,924		—			38,537
Other bonds and obligations	329		—		—			329
Total securities held to maturity	131,652		5,286		(34		)	136,904
Total	$	1,280,746	$	21,061	$	(10,446	)	$	1,291,361

The amortized cost and estimated fair value of available for sale (“AFS”) and held to maturity (“HTM”) securities, segregated by contractual maturity at June 30, 2016 are presented below. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Mortgage-backed securities are shown in total, as their maturities are highly variable. Equity securities have no maturity and are also shown in total.

	Available for sale				Held to maturity
	Amortized		Fair		Amortized		Fair
(In thousands)	Cost		Value		Cost		Value
Within 1 year	$	—	$	—	$	2,799	$	2,810
Over 1 year to 5 years	4,102		4,180		17,139		18,186
Over 5 years to 10 years	32,730		33,345		13,821		14,421
Over 10 years	128,450		134,729		98,184		106,052
Total bonds and obligations	165,282		172,254		131,943		141,469
Marketable equity securities	42,470		48,746		—		—
Mortgage-backed securities	832,913		852,370		67		75
Total	$	1,040,665	$	1,073,370	$	132,010	$	141,544

Securities with unrealized losses, segregated by the duration of their continuous unrealized loss positions, are summarized as follows:

	Less Than Twelve Months				Over Twelve Months				Total
	Gross				Gross				Gross
	Unrealized		Fair		Unrealized		Fair		Unrealized		Fair
(In thousands)	Losses		Value		Losses		Value		Losses		Value
June 30, 2016
Securities available for sale
Debt securities:
Agency collateralized mortgage obligations	$	4	$	8,824	$	120	$	14,854	$	124	$	23,678
Agency mortgage-backed securities	15		4,053		15		734		30		4,787
Corporate bonds	1,160		22,536		207		4,423		1,367		26,959
Trust preferred securities	52		1,204		—		—		52		1,204
Total debt securities	1,231		36,617		342		20,011		1,573		56,628
Marketable equity securities	203		3,851		1,078		7,063		1,281		10,914
Total securities available for sale	1,434		40,468		1,420		27,074		2,854		67,542
Total	$	1,434	$	40,468	$	1,420	$	27,074	$	2,854	$	67,542
December 31, 2015
Securities available for sale
Debt securities:
Municipal bonds and obligations	$	9	$	1,587	$	115	$	3,400	$	124	$	4,987
Agency collateralized mortgage obligations	2,958		304,907		2,596		136,988		5,554		441,895
Agency mortgage-backed securities	306		34,543		681		35,522		987		70,065
Corporate bonds	30		6,934		1,796		21,587		1,826		28,521
Trust preferred securities	1		1,269		—		—		1		1,269
Other bonds and obligations	—		108		34		3,032		34		3,140
Total debt securities	3,304		349,348		5,222		200,529		8,526		549,877
Marketable equity securities	534		2,908		1,352		5,729		1,886		8,637
Total securities available for sale	3,838		352,256		6,574		206,258		10,412		558,514
Securities held to maturity
Tax advantaged economic development bonds	—		—		34		2,143		34		2,143
Total securities held to maturity	—		—		34		2,143		34		2,143
Total	$	3,838	$	352,256	$	6,608	$	208,401	$	10,446	$	560,657

Debt Securities

The Company expects to recover its amortized cost basis on all debt securities in its AFS and HTM portfolios. Furthermore, the Company does not intend to sell nor does it anticipate that it will be required to sell any of its securities in an unrealized loss position as of June 30, 2016, prior to this recovery. The Company’s ability and intent to hold these securities until recovery is supported by the Company’s strong capital and liquidity positions as well as its historically low portfolio turnover.

The following summarizes, by investment security type, the basis for the conclusion that the debt securities in an unrealized loss position within the Company’s AFS and HTM portfolios were not other-than-temporarily impaired at June 30, 2016:

AFS collateralized mortgage obligations

At June 30, 2016, 4 out of the total 123 securities in the Company’s portfolios of AFS collateralized mortgage obligations were in unrealized loss positions. Aggregate unrealized losses represented 0.5% of the amortized cost of securities in unrealized loss positions. The Federal National Mortgage Association (“FNMA”), Federal Home Loan Mortgage Corporation (“FHLMC”), and Government National Mortgage Association (“GNMA”) guarantee the contractual cash flows of all of the Company’s collateralized mortgage obligations. The securities are investment grade rated and there were no material underlying credit downgrades during the quarter. All securities are performing.

AFS mortgage-backed securities

At June 30, 2016, 12 out of the total 82 securities in the Company’s portfolios of AFS residential mortgage-backed securities were in unrealized loss positions. Aggregate unrealized losses represented 0.6% of the amortized cost of securities in unrealized loss positions. The FNMA, FHLMC, and GNMA guarantee the contractual cash flows of all of the Company’s residential mortgage-backed securities. The securities are investment grade rated and there were no material underlying credit downgrades during the quarter. All securities are performing.

AFS corporate bonds

At June 30, 2016, 3 out of 9 securities in the Company’s portfolio of AFS corporate bonds were in an unrealized loss position. The aggregate unrealized loss represents 4.8% of the amortized cost of bonds in unrealized loss positions. The Company reviews the financial strength of all of these bonds and has concluded that the amortized cost remains supported by the expected future cash flows of these securities.

At June 30, 2016, $1.2 million of the total unrealized losses was attributable to a $17.6 million investment. The Company evaluated this security, with a Level 2 fair value of $16.4 million, for potential other-than-temporary impairment (“OTTI”) at June 30, 2016 and determined that OTTI was not evident based on both the Company’s ability and intent to hold the security until the recovery of its remaining amortized cost.

AFS trust preferred securities

At June 30, 2016 1 out of the 3 securities in the Company’s portfolio of AFS trust preferred securities were in an unrealized loss position. Aggregate unrealized losses represented 4.2% of the amortized cost of these securities in an unrealized loss position. The Company’s evaluation of the present value of expected cash flows on these securities supports its conclusions about the recoverability of these securities’ amortized cost basis. These securities are investment grade rated. The Company reviews the financial strength of all of the single issue trust issuers and has concluded that the amortized cost remains supported by the market value of these securities and they are performing.

Marketable Equity Securities

In evaluating its marketable equity securities portfolio for OTTI, the Company considers its ability to more likely than not hold an equity security to recovery. The Company additionally considers other various factors including the length of time and the extent to which the fair value has been less than cost and the financial condition and near term prospects of the issuer. Any OTTI is recognized immediately through earnings.

At June 30, 2016, 9 out of the total 26 securities in the Company’s portfolio of marketable equity securities were in an unrealized loss position. The unrealized loss represented 10.5% of the amortized cost of the securities. The Company has the ability and intent to hold the securities until recovery of their cost basis and does not consider the securities other-than-temporarily impaired at June 30, 2016. As new information becomes available in future periods, changes to the Company’s assumptions may be warranted and could lead to a different conclusion regarding the OTTI of these securities.

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LOANS

6 Months Ended

Jun. 30, 2016

Receivables [Abstract]

LOANS

LOANS

The Company’s loan portfolio is segregated into the following segments: commercial real estate, commercial and industrial, residential mortgage, and consumer. Commercial real estate loans include construction, single and multi-family, and other commercial real estate classes. Commercial and industrial loans include asset based lending loans, lease financing, and other commercial business loan classes. Residential mortgage loans include classes for 1-4 family owner occupied and construction loans. Consumer loans include home equity, direct and indirect auto, and other. These portfolio segments each have unique risk characteristics that are considered when determining the appropriate level for the allowance for loan losses. A substantial portion of the loan portfolio is secured by real estate in western Massachusetts, southern Vermont, northeastern New York, and in the Bank’s other New England lending areas. The ability of many of the Bank’s borrowers to honor their contracts is dependent, among other things, on the specific economy and real estate markets of these areas.

Total loans include business activity loans and acquired loans. Acquired loans are those loans acquired from Parke Bank, Firestone Financial Corp., Hampden Bancorp, Inc., the New York branch acquisition, Beacon Federal Bancorp, Inc., The Connecticut Bank and Trust Company, Legacy Bancorp, Inc., and Rome Bancorp, Inc. The following is a summary of total loans:

	June 30, 2016						December 31, 2015
(In thousands)	Business Activities Loans		Acquired Loans		Total		Business Activities Loans		Acquired Loans		Total
Commercial real estate:
Construction	$	218,607	$	30,428	$	249,035	$	210,196	$	43,474	$	253,670
Single and multi-family	244,949		42,171		287,120		214,823		36,783		251,606
Other commercial real estate	1,354,086		347,341		1,701,427		1,209,008		345,483		1,554,491
Total commercial real estate	1,817,642		419,940		2,237,582		1,634,027		425,740		2,059,767
Commercial and industrial loans:
Asset based lending	325,476		—		325,476		331,253		—		331,253
Other commercial and industrial loans	527,612		181,471		709,083		495,979		221,031		717,010
Total commercial and industrial loans	853,088		181,471		1,034,559		827,232		221,031		1,048,263
Total commercial loans	2,670,730		601,411		3,272,141		2,461,259		646,771		3,108,030
Residential mortgages:
1-4 family	1,519,067		302,702		1,821,769		1,454,233		332,747		1,786,980
Construction	20,965		866		21,831		26,704		1,351		28,055
Total residential mortgages	1,540,032		303,568		1,843,600		1,480,937		334,098		1,815,035
Consumer loans:
Home equity	310,565		49,346		359,911		307,159		53,446		360,605
Auto and other	414,486		110,163		524,649		311,328		130,238		441,566
Total consumer loans	725,051		159,509		884,560		618,487		183,684		802,171
Total loans	$	4,935,813	$	1,064,488	$	6,000,301	$	4,560,683	$	1,164,553	$	5,725,236

The carrying amount of the acquired loans at June 30, 2016 totaled $1.1 billion. A subset of these loans was determined to have evidence of credit deterioration at acquisition date, which is accounted for in accordance with ASC 310-30. These purchased credit-impaired loans presently maintain a carrying value of $19.7 million (and a note balance of $38.2 million). These loans are evaluated for impairment through the periodic reforecasting of expected cash flows. Loans considered not impaired at acquisition date had a carrying amount of $1.0 billion.

At December 31, 2015, acquired loans maintained a carrying value of $1.2 billion and purchased credit-impaired loans totaled $21.4 million (note balance of $40.2 million). Loans considered not impaired at acquisition date had a carrying amount of $1.1 billion.

The following table summarizes activity in the accretable yield for the acquired loan portfolio that falls under the purview of ASC 310-30, Accounting for Certain Loans or Debt Securities Acquired in a Transfer:

	Three Months Ended June 30,
(In thousands)	2016			2015
Balance at beginning of period	$	6,464		$	3,431
Acquisitions	708			4,178
Reclassification from nonaccretable difference for loans with improved cash flows	522			405
Reclassification to TDR	—			—
Accretion	(1,481		)	(1,474		)
Balance at end of period	$	6,213		$	6,540
	Six Months Ended June 30,
(In thousands)	2016			2015
Balance at beginning of period	$	6,925		$	2,541
Acquisitions	708			4,178
Reclassification from nonaccretable difference for loans with improved cash flows	1,418			1,736
Reclassification to TDR	(185		)	—
Accretion	(2,653		)	(1,915		)
Balance at end of period	$	6,213		$	6,540

The following is a summary of past due loans at June 30, 2016 and December 31, 2015:

Business Activities Loans

(in thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Loans		Past Due > 90 days and Accruing
June 30, 2016
Commercial real estate:
Construction	$	—	$	—	$	—	$	—	$	218,607	$	218,607	$	—
Single and multi-family	11		—		518		529		244,420		$	244,949	—
Other commercial real estate	1,210		—		5,593		6,803		1,347,283		$	1,354,086	2,195
Total	1,221		—		6,111		7,332		1,810,310		1,817,642		2,195
Commercial and industrial loans:
Asset based lending	—		—		—		—		325,476		$	325,476	—
Other commercial and industrial loans	931		2,270		5,934		9,135		518,477		$	527,612	127
Total	931		2,270		5,934		9,135		843,953		853,088		127
Residential mortgages:
1-4 family	1,907		1,359		3,075		6,341		1,512,726		$	1,519,067	487
Construction	—		—		44		44		20,921		$	20,965	—
Total	1,907		1,359		3,119		6,385		1,533,647		1,540,032		487
Consumer loans:
Home equity	1,374		5		1,760		3,139		307,426		$	310,565	43
Auto and other	1,650		238		378		2,266		412,220		$	414,486	—
Total	3,024		243		2,138		5,405		719,646		725,051		43
Total	$	7,083	$	3,872	$	17,302	$	28,257	$	4,907,556	$	4,935,813	$	2,852

Business Activities Loans

(in thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Loans		Past Due > 90 days and Accruing
December 31, 2015
Commercial real estate:
Construction	$	—	$	—	$	58	$	58	$	210,138	$	210,196	$	—
Single and multi-family	65		160		70		295		214,528		214,823		—
Other commercial real estate	1,523		831		3,286		5,640		1,203,368		1,209,008		—
Total	1,588		991		3,414		5,993		1,628,034		1,634,027		—
Commercial and industrial loans:
Asset based lending	—		—		—		—		331,253		331,253		—
Other commercial and industrial loans	1,202		1,105		7,770		10,077		485,902		495,979		146
Total	1,202		1,105		7,770		10,077		817,155		827,232		146
Residential mortgages:
1-4 family	3,537		857		4,304		8,698		1,445,535		1,454,233		2,006
Construction	—		—		—		—		26,704		26,704		—
Total	3,537		857		4,304		8,698		1,472,239		1,480,937		2,006
Consumer loans:
Home equity	563		20		1,658		2,241		304,918		307,159		61
Auto and other	1,230		132		610		1,972		309,356		311,328		59
Total	1,793		152		2,268		4,213		614,274		618,487		120
Total	$	8,120	$	3,105	$	17,756	$	28,981	$	4,531,702	$	4,560,683	$	2,272

Acquired Loans

(in thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Acquired Credit Impaired		Total Loans		Past Due > 90 days and Accruing
June 30, 2016
Commercial real estate:
Construction	$	—	$	—	$	—	$	—	$	1,093	$	30,428	$	—
Single and multi-family	341		—		392		733		1,546		42,171		296
Other commercial real estate	15		205		796		1,016		12,957		347,341		—
Total	356		205		1,188		1,749		15,596		419,940		296
Commercial and industrial loans:
Asset based lending	—		—		—		—		—		—		—
Other commercial and industrial loans	598		17		1,783		2,398		2,322		181,471		—
Total	598		17		1,783		2,398		2,322		181,471		—
Residential mortgages:
1-4 family	909		327		2,285		3,521		1,565		302,702		35
Construction	—		—		—		—		—		866		—
Total	909		327		2,285		3,521		1,565		303,568		35
Consumer loans:
Home equity	79		—		743		822		116		49,346		185
Auto and other	1,314		123		830		2,267		109		110,163		107
Total	1,393		123		1,573		3,089		225		159,509		292
Total	$	3,256	$	672	$	6,829	$	10,757	$	19,708	$	1,064,488	$	623

Acquired Loans

(in thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Acquired Credit Impaired		Total Loans		Past Due > 90 days and Accruing
December 31, 2015
Commercial real estate:							—
Construction	$	—	$	—	$	—	$	—	$	1,298	$	43,474	$	—
Single and multi-family	—		176		227		403		1,380		36,783		127
Other commercial real estate	547		43		1,368		1,958		13,087		345,483		—
Total	547		219		1,595		2,361		15,765		425,740		127
Commercial and industrial loans:
Asset based lending	—		—		—		—		—		—		—
Other commercial and industrial loans	1,214		505		1,420		3,139		2,775		221,031		785
Total	1,214		505		1,420		3,139		2,775		221,031		785
Residential mortgages:
1-4 family	2,580		311		1,880		4,771		2,572		332,747		212
Construction	—		—		—		—		—		1,351		—
Total	2,580		311		1,880		4,771		2,572		334,098		212
Consumer loans:
Home equity	82		277		837		1,196		118		53,446		111
Auto and other	1,491		145		1,081		2,717		132		130,238		187
Total	1,573		422		1,918		3,913		250		183,684		298
Total	$	5,914	$	1,457	$	6,813	$	14,184	$	21,362	$	1,164,553	$	1,422

The following is summary information pertaining to non-accrual loans at June 30, 2016 and December 31, 2015

	June 30, 2016						December 31, 2015
(In thousands)	Business Activities Loans		Acquired Loans (1)		Total		Business Activities Loans		Acquired Loans (2)		Total
Commercial real estate:
Construction	$	—	$	—	$	—	$	59	$	—	$	59
Single and multi-family	518		96		$	614	70		100		170
Other commercial real estate	3,398		796		$	4,194	3,285		1,368		4,653
Total	3,916		892		4,808		3,414		1,468		4,882
Commercial and industrial loans:
Other commercial and industrial loans	5,807		1,502		$	7,309	7,624		597		8,221
Total	5,807		1,502		7,309		7,624		597		8,221
Residential mortgages:
1-4 family	2,588		2,225		$	4,813	2,298		1,668		3,966
Construction	44		—		$	44	—		—		—
Total	2,632		2,225		4,857		2,298		1,668		3,966
Consumer loans:
Home equity	1,717		558		$	2,275	1,597		727		2,324
Auto and other	378		723		$	1,101	551		893		1,444
Total	2,095		1,281		3,376		2,148		1,620		3,768
Total non-accrual loans	$	14,450	$	5,900	$	20,350	$	15,484	$	5,353	$	20,837

_______________________________________

(1)  At quarter end June 30, 2016, acquired credit impaired loans accounted for $306 thousand of non-accrual loans that are not presented in the above table.

(2)  At December 31, 2015, acquired credit impaired loans accounted for $39 thousand of non-accrual loans that are not presented in the above table.

Loans evaluated for impairment as of June 30, 2016 and December 31, 2015 were as follows:

Business Activities Loans

(In thousands)	Commercial real estate		Commercial and industrial loans		Residential mortgages		Consumer		Total
June 30, 2016
Loans receivable:
Balance at end of period
Individually evaluated for impairment	$	12,501	$	5,081	$	2,906	$	1,735	$	22,223
Collectively evaluated	1,805,141		848,007		1,537,126		723,316		4,913,590
Total	$	1,817,642	$	853,088	$	1,540,032	$	725,051	$	4,935,813

Business Activities Loans

(In thousands)	Commercial real estate		Commercial and industrial loans		Residential mortgages		Consumer		Total
December 31, 2015
Loans receivable:
Balance at end of year
Individually evaluated for impairment	$	11,560	$	7,191	$	2,812	$	1,810	$	23,373
Collectively evaluated for impairment	1,622,467		820,041		1,478,125		616,677		4,537,310
Total	$	1,634,027	$	827,232	$	1,480,937	$	618,487	$	4,560,683

Acquired Loans

(In thousands)	Commercial real estate		Commercial and industrial loans		Residential mortgages		Consumer		Total
June 30, 2016
Loans receivable:
Balance at end of Period
Individually evaluated for impairment	$	3,924	$	1,141	$	519	$	572	$	6,156
Purchased credit-impaired loans	15,596		2,322		1,565		225		19,708
Collectively evaluated	400,420		178,008		301,484		158,712		1,038,624
Total	$	419,940	$	181,471	$	303,568	$	159,509	$	1,064,488

Acquired Loans

(In thousands)	Commercial real estate		Commercial and industrial loans		Residential mortgages		Consumer		Total
December 31, 2015
Loans receivable:
Balance at end of year
Individually evaluated for impairment	$	3,749	$	—	$	570	$	487	$	4,806
Purchased credit-impaired loans	15,765		2,775		2,572		250		21,362
Collectively evaluated for impairment	406,226		218,256		330,956		182,947		1,138,385
Total	$	425,740	$	221,031	$	334,098	$	183,684	$	1,164,553

The following is a summary of impaired loans at June 30, 2016 and December 31, 2015:

Business Activities Loans

	June 30, 2016
(In thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance:
Commercial real estate - construction	$	—	$	—	$	—
Commercial real estate - single and multifamily	—		—		—
Other commercial real estate loans	1,944		1,944		—
Other commercial and industrial loans	200		200		—
Residential mortgages - 1-4 family	1,313		1,313		—
Consumer - home equity	632		632		—
Consumer - other	1		1		—
With an allowance recorded:
Commercial real estate - construction	$	—	$	—	$	—
Commercial real estate - single and multifamily	—		—		—
Other commercial real estate loans	10,233		10,557		324
Other commercial and industrial loans	4,768		4,881		113
Residential mortgages - 1-4 family	1,443		1,593		150
Consumer - home equity	951		999		48
Consumer - other	96		103		7
Total
Commercial real estate	$	12,177	$	12,501	$	324
Commercial and industrial loans	4,968		5,081		113
Residential mortgages	2,756		2,906		150
Consumer	1,680		1,735		55
Total impaired loans	$	21,581	$	22,223	$	642

Business Activities Loans

	December 31, 2015
(In thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance:
Commercial real estate - construction	$	2,000	$	2,000	$	—
Commercial real estate - single and multifamily	—		—		—
Other commercial real estate loans	4,613		4,613		—
Other commercial and industrial loans	5,828		5,828		—
Residential mortgages - 1-4 family	1,181		1,181		—
Consumer - home equity	702		702		—
Consumer - other	1		1		—
With an allowance recorded:
Commercial real estate - construction	$	—	$	—	$	—
Commercial real estate - single and multifamily	—		—		—
Other commercial real estate loans	4,798		4,947		149
Other commercial and industrial loans	1,341		1,362		21
Residential mortgages - 1-4 family	1,479		1,632		153
Consumer - home equity	903		999		96
Consumer - other	101		108		7
Total
Commercial real estate	$	11,411	$	11,560	$	149
Commercial and industrial loans	7,169		7,190		21
Residential mortgages	2,660		2,813		153
Consumer	1,707		1,810		103
Total impaired loans	$	22,947	$	23,373	$	426

Acquired Loans

	June 30, 2016
(In thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance:
Commercial real estate - construction	$	—	$	—	$	—
Commercial real estate - single and multifamily	124		124		—
Other commercial real estate loans	351		351		—
Other commercial and industrial loans	—		—		—
Residential mortgages - 1-4 family	188		188		—
Consumer - home equity	—		—		—
Consumer - other	152		152		—
With an allowance recorded:
Commercial real estate - construction	$	—	$	—	$	—
Commercial real estate - single and multifamily	775		816		41
Other commercial real estate loans	2,498		2,633		135
Other commercial and industrial loans	1,099		1,141		42
Residential mortgages - 1-4 family	296		331		35
Consumer - home equity	387		420		33
Consumer - other	—		—		—
Total
Commercial real estate	$	3,748	$	3,924	$	176
Commercial and industrial loans	1,099		1,141		42
Residential mortgages	484		519		35
Consumer	539		572		33
Total impaired loans	$	5,870	$	6,156	$	286

Acquired Loans

	December 31, 2015
(In thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance:
Other commercial real estate loans	$	1,722	$	1,722	$	—
Residential mortgages - 1-4 family	274		274		—
Consumer - home equity	117		117		—
Consumer - other	177		177		—
With an allowance recorded:
Commercial real estate - single and multifamily	$	638	$	655	$	17
Other commercial real estate loans	1,964		2,032		68
Residential mortgages - 1-4 family	266		296		30
Consumer - home equity	167		192		25
Total
Other commercial real estate loans	$	4,324	$	4,409	$	85
Other commercial and industrial loans	—		—		—
Residential mortgages	540		570		30
Consumer	461		486		25
Total impaired loans	$	5,325	$	5,465	$	140

The following is a summary of the average recorded investment and interest income recognized on impaired loans as of June 30, 2016 and 2015:

Business Activities Loans

	Six Months Ended June 30, 2016				Six Months Ended June 30, 2015
(in thousands)	Average Recorded Investment		Cash Basis Interest Income Recognized		Average Recorded Investment		Cash Basis Interest Income Recognized
With no related allowance:
Commercial real estate - construction	$	—	$	—	$	2,466	$	1
Commercial real estate - single and multifamily	72		1		120		—
Other commercial real estate loans	2,690		3		12,734		170
Other commercial and industrial loans	707		16		1,447		3
Residential mortgages - 1-4 family	1,409		3		2,281		41
Consumer - home equity	792		5		360		1
Consumer - other	1		—		114		2
With an allowance recorded:
Commercial real estate - construction	$	—	$	—	$	—	$	—
Commercial real estate - single and multifamily	—		—		—		—
Other commercial real estate loans	10,144		240		6,629		92
Other commercial and industrial loans	5,576		119		329		2
Residential mortgages - 1-4 family	1,609		36		764		17
Consumer - home equity	999		17		—		—
Consumer - other	105		2		—		—
Total
Commercial real estate	$	12,906	$	244	$	21,949	$	263
Commercial and industrial loans	6,283		135		1,776		5
Residential mortgages	3,018		39		3,045		58
Consumer loans	1,897		24		474		3
Total impaired loans	$	24,104	$	442	$	27,244	$	329

Acquired Loans

	Six Months Ended June 30, 2016				Six Months Ended June 30, 2015
(in thousands)	Average Recorded Investment		Cash Basis Interest Income Recognized		Average Recorded Investment		Cash Basis Interest Income Recognized
With no related allowance:
Commercial real estate - construction	$	—	$	—	$	664	$	60
Commercial real estate - single and multifamily	125		4		254		—
Other commercial real estate loans	596		—		1,977		3
Other commercial and industrial loans	154		—		51		3
Residential mortgages - 1-4 family	100		—		569		2
Consumer - home equity	—		—		355		6
Consumer - other	160		1		—		—
With an allowance recorded:
Commercial real estate - construction	$	—	$	—	$	—	$	—
Commercial real estate - single and multifamily	822		21		2,872		63
Other commercial real estate loans	2,598		77		845		59
Other commercial and industrial loans	233		2		—		—
Residential mortgages - 1-4 family	333		6		310		5
Consumer - home equity	326		6		—		—
Consumer - other	—		—		—		—
Total
Other commercial real estate loans	$	4,141	$	102	$	6,612	$	185
Commercial and industrial loans	387		2		51		3
Residential mortgages	433		6		879		7
Consumer loans	486		7		355		6
Total impaired loans	$	5,447	$	117	$	7,897	$	201

Troubled Debt Restructuring Loans

The Company’s loan portfolio also includes certain loans that have been modified in a Troubled Debt Restructuring (TDR), where economic concessions have been granted to borrowers who have experienced or are expected to experience financial difficulties. These concessions typically result from the Company’s loss mitigation activities and could include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance, or other actions. Certain TDRs are classified as nonperforming at the time of restructure and may only be returned to performing status after considering the borrower’s sustained repayment performance for a reasonable period, generally six months. TDRs are evaluated individually for impairment and may result in a specific allowance amount allocated to an individual loan.

The following tables include the recorded investment and number of modifications identified during the three and six months ended June 30, 2016 and for the three and six months ended June 30, 2015, respectively. The table includes the recorded investment in the loans prior to a modification and also the recorded investment in the loans after the loans were restructured. The modifications for the three and six months ending June 30, 2016 were attributable to interest rate concessions, maturity date extensions, modified payment terms, reamortization, and accelerated maturity. The modifications for the three and six months ending June 30, 2015 were attributable to interest rate concessions, maturity date extensions and modified payment terms.

	Three Months Ended June 30, 2016
(Dollars in thousands)	Number of Modifications	Pre-Modification Outstanding Recorded Investment	Post-Modification Outstanding Recorded Investment
Troubled Debt Restructurings
Consumer - Home Equity	1	117	117
Total	1	117	117

	Six Months Ended June 30, 2016
(Dollars in thousands)	Number of Modifications	Pre-Modification Outstanding Recorded Investment	Post-Modification Outstanding Recorded Investment
Troubled Debt Restructurings
Commercial - Other	2	1,049	1,049
Commercial and industrial - Other	2	151	151
Consumer - Home Equity	1	117	117
Total	5	1,317	1,317

	Three Months Ended June 30, 2015
(Dollars in thousands)	Number of Modifications	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Troubled Debt Restructurings
Commercial - Construction	1	$	1,877	$	1,877
Commercial - Other	1	1,694		1,694
Commercial and industrial - Other	4	8,159		8,159
Total	6	$	11,730	$	11,730

	Six Months Ended June 30, 2015
(Dollars in thousands)	Number of Modifications	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Troubled Debt Restructurings
Commercial - Construction	1	$	2,000	$	2,000
Commercial - Other	2	1,694		1,694
Commercial and industrial - Other	5	8,192		8,192
Total	8	11,886		11,886

The following tables disclose the recorded investments and numbers of modifications for TDRs for the prior year where a concession has been made, that then defaulted in the respective reporting period. For the three and six months ended June 30, 2016, there were no loans that were restructured that had subsequently defaulted during the period.

	Modifications that Subsequently Defaulted
	Three Months Ended June 30, 2015
	Number of Contracts	Recorded Investment
Troubled Debt Restructurings
Commercial - Other	1	$	649

	Modifications that Subsequently Defaulted
	Six Months Ended June 30, 2015
	Number of Contracts	Recorded Investment
Troubled Debt Restructurings
Commercial - Other	1	$	649

The following table presents the Company’s TDR activity for the three and six months ended June 30, 2016 and 2015:

	Three Months Ended June 30,
(In thousands)	2016			2015
Balance at beginning of the period	$	23,654		$	17,204
Principal payments	(768		)	(607		)
TDR status change (1)	—			—
Other reductions/increases (2)	(881		)	(611		)
Newly identified TDRs	117			9,730
Balance at end of the period	$	22,122		$	25,716

	Six Months Ended June 30,
(In thousands)	2016			2015
Balance at beginning of the period	$	22,048		$	16,714
Principal payments	(1,109		)	(1,091		)
TDR status change (1)	2,236			—
Other reductions/increases (2)	(2,370		)	(1,793		)
Newly identified TDRs	1,317			11,886
Balance at end of the period	$	22,122		$	25,716

_________________________________

(1) TDR status change classification represents TDR loans with a specified interest rate equal to or greater than the rate that the Company was willing to accept at the time of the restructuring for a new loan with comparable risk and  the loan was on current payment status and not impaired based on the terms specified by the restructuring agreement.

(2) Other reductions classification consists of transfer to other real estate owned and charge-offs and advances to loans.

The evaluation of certain loans individually for specific impairment includes loans that were previously classified as TDRs or continue to be classified as TDRs.

As of June 30, 2016, the Company maintained foreclosed residential real estate property with a fair value of $60 thousand. Additionally, residential mortgage loans collateralized by real estate property that are in the process of foreclosure as of June 30, 2016 and December 31, 2015 totaled $6.1 million and $7.5 million, respectively. As of December 31, 2015, foreclosed residential real estate property totaled $675 thousand.

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LOAN LOSS ALLOWANCE

6 Months Ended

Jun. 30, 2016

Receivables [Abstract]

LOAN LOSS ALLOWANCE

LOAN LOSS ALLOWANCE

Activity in the allowance for loan losses for the six months ended June 30, 2016 and 2015 was as follows:

Business Activities Loans (In thousands)	Commercial real estate		Commercial and industrial loans		Residential mortgages		Consumer		Unallocated			Total
June 30, 2016
Balance at beginning of period	$	14,508	$	7,317	$	7,566	$	4,956	$	227		$	34,574
Charged-off loans	1,578		2,546		1,087		741		—			5,952
Recoveries on charged-off loans	128		77		5		122		—			332
Provision/(releases) for loan losses	3,837		3,448		1,042		432		(589		)	8,170
Balance at end of period	$	16,895	$	8,296	$	7,526	$	4,769	$	(362	)	$	37,124
Individually evaluated for impairment	324		113		150		55		—			642
Collectively evaluated	16,571		8,183		7,376		4,714		(362		)	36,482
Total	$	16,895	$	8,296	$	7,526	$	4,769	$	(362	)	$	37,124

Business Activities Loans (In thousands)	Commercial real estate		Commercial and industrial loans		Residential mortgages			Consumer			Unallocated			Total
June 30, 2015
Balance at beginning of period	$	14,690	$	5,206	$	6,836		$	5,928		$	135		$	32,795
Charged-off loans	4,422		372		446			462			—			5,702
Recoveries on charged-off loans	146		154		113			127			—			540
Provision/(releases) for loan losses	2,553		4,178		(32		)	(679		)	(427		)	5,593
Balance at end of period	$	12,967	$	9,166	$	6,471		$	4,914		$	(292	)	$	33,226
Individually evaluated for impairment	30		1,706		87			—			—			1,823
Collectively evaluated	12,937		7,460		6,384			4,914			(292		)	31,403
Total	$	12,967	$	9,166	$	6,471		$	4,914		$	(292	)	$	33,226

Acquired Loans (In thousands)	Commercial real estate		Commercial and industrial loans			Residential mortgages		Consumer		Unallocated		Total
June 30, 2016
Balance at beginning of period	$	1,903	$	1,330		$	976	$	525	$	—	$	4,734
Charged-off loans	126		275			364		380		—		1,145
Recoveries on charged-off loans	—		176			104		46		—		326
Provision for loan losses	363		(455		)	165		285		—		358
Balance at end of period	$	2,140	$	776		$	881	$	476	$	—	$	4,273
Individually evaluated for impairment	177		42			35		32		—		286
Purchased credit-impaired loans	—		—			—		—		—		—
Collectively evaluated	1,963		734			846		444		—		3,987
Total	$	2,140	$	776		$	881	$	476	$	—	$	4,273

Acquired Loans (In thousands)	Commercial real estate		Commercial and industrial loans		Residential mortgages		Consumer		Unallocated		Total
June 30, 2015
Balance at beginning of period	$	790	$	1,093	$	615	$	369	$	—	$	2,867
Charged-off loans	587		336		375		608		—		1,906
Recoveries on charged-off loans	395		56		41		56		—		548
Provision for loan losses	1,188		160		527		587		—		2,462
Balance at end of period	$	1,786	$	973	$	808	$	404	$	—	$	3,971
Individually evaluated for impairment	166		—		39		—		—		205
Purchased credit-impaired loans	—		—		—		—		—		—
Collectively evaluated	1,620		973		769		404		—		3,766
Total	$	1,786	$	973	$	808	$	404	$	—	$	3,971

Credit Quality Information

Business Activities Loans Credit Quality Analysis

The Company monitors the credit quality of its portfolio by using internal risk ratings that are based on regulatory guidance. Loans that are given a Pass rating are not considered a problem credit. Loans that are classified as Special Mention loans are considered to have potential credit problems and are evaluated closely by management. Substandard and non-accruing loans are loans for which a definitive weakness has been identified and which may make full collection of contractual cash flows questionable. Doubtful loans are those with identified weaknesses that make full collection of contractual cash flows, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. 

For commercial credits, the Company assigns an internal risk rating at origination and reviews the rating annually, semiannually or quarterly depending on the risk rating. The rating is also reassessed at any point in time when management becomes aware of information that may affect the borrower’s ability to fulfill their obligations.

The Company risk rates its residential mortgages, including 1-4 family and residential construction loans, based on a three rating system: Pass, Special Mention and Substandard. Loans that are current within 59 days are rated Pass. Residential mortgages that are 60-89 days delinquent are rated Special Mention. Loans delinquent for 90 days or greater are rated Substandard and generally placed on non-accrual status. Home equity loans are risk rated based on the same rating system as the Company’s residential mortgages.

Ratings for other consumer loans, including auto loans, are based on a two rating system. Loans that are current within 119 days are rated Performing while loans delinquent for 120 days or more are rated Non-performing. Other consumer loans are placed on non-accrual at such time as they become Non-performing.

Acquired Loans Credit Quality Analysis

Upon acquiring a loan portfolio, the Company's internal loan review function assigns risk ratings to the acquired loans, utilizing the same methodology as it does with business activities loans. This may differ from the risk rating policy of the predecessor bank. Loans which are rated Substandard or worse according to the rating process outlined below are deemed to be credit impaired loans accounted for under ASC 310-30, regardless of whether they are classified as performing or non-performing.

The Bank utilizes an eleven grade internal loan rating system for each of its acquired commercial real estate, construction and commercial loans as outlined in the Credit Quality Information section of this Note. The ratings system is similar to loans originated through business activities.

The Company subjects loans that do not meet the ASC 310-30 criteria to ASC 450-20 by collectively evaluating these loans for an allowance for loan loss. The Company applies a methodology similar to the methodology prescribed for business activities loans, which includes the application of environmental factors to each category of loans. The methodology to collectively evaluate the acquired loans outside the scope of ASC 310-30 includes the application of a number of environmental factors that reflect management’s best estimate of the level of incremental credit losses that might be recognized given current conditions. This is reviewed as part of the allowance for loan loss adequacy analysis. As the loan portfolio matures and environmental factors change, the loan portfolio will be reassessed each quarter to determine an appropriate reserve allowance.

Additionally, the Company considers the need for an additional reserve for acquired loans accounted for outside of the scope of ASC 310-30 under ASC 310-20. At acquisition date, the Bank determined a fair value mark with credit and interest rate components. Under the Company’s model, the impairment evaluation process involves comparing the carrying value of acquired loans, including the entire unamortized premium or discount, to the recorded reserve allowance. If necessary, the Company books an additional reserve to account for shortfalls identified through this calculation. Fair value marks are not bifurcated when evaluating for impairment.

A decrease in the expected cash flows in subsequent periods requires the establishment of an allowance for loan losses at that time for ASC 310-30 loans. At June 30, 2016 the allowance for loan losses related to acquired loans under ASC 310-30 and ASC 310-20 was $4.3 million using the above mentioned criteria.

The following tables present the Company’s loans by risk rating at June 30, 2016 and December 31, 2015:

Business Activities Loans

Commercial Real Estate

Credit Risk Profile by Creditworthiness Category

	Construction				Single and multi-family				Other				Total commercial real estate
(In thousands)	June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015
Grade:
Pass	$	218,607	$	208,138	$	242,207	$	212,900	$	1,306,634	$	1,155,770	$	1,767,448	$	1,576,808
Special mention	—		—		362		—		9,887		3,449		10,249		3,449
Substandard	—		2,058		2,380		1,923		37,528		49,716		39,908		53,697
Doubtful	—		—		—		—		37		73		37		73
Total	$	218,607	$	210,196	$	244,949	$	214,823	$	1,354,086	$	1,209,008	$	1,817,642	$	1,634,027

Commercial and Industrial Loans

Credit Risk Profile by Creditworthiness Category

	Asset based lending				Other				Total comm. and industrial loans
(In thousands)	June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015
Grade:
Pass	$	325,476	$	331,253	$	495,024	$	455,710	$	820,500	$	786,963
Special mention	—		—		11,253		24,578		11,253		24,578
Substandard	—		—		21,335		15,691		21,335		15,691
Total	$	325,476	$	331,253	$	527,612	$	495,979	$	853,088	$	827,232

Residential Mortgages

Credit Risk Profile by Internally Assigned Grade

	1-4 family				Construction				Total residential mortgages
(In thousands)	June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015
Grade:
Pass	$	1,514,633	$	1,449,073	$	20,920	$	26,704	$	1,535,553	$	1,475,777
Special mention	1,359		857		—		—		1,359		857
Substandard	3,075		4,303		45		—		3,120		4,303
Total	$	1,519,067	$	1,454,233	$	20,965	$	26,704	$	1,540,032	$	1,480,937

Consumer Loans

Credit Risk Profile Based on Payment Activity

	Home equity				Auto and other				Total consumer loans
(In thousands)	June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015
Performing	$	308,848	$	305,562	$	414,108	$	310,777	$	722,956	$	616,339
Nonperforming	1,717		1,597		378		551		2,095		2,148
Total	$	310,565	$	307,159	$	414,486	$	311,328	$	725,051	$	618,487

Acquired Loans

Commercial Real Estate

Credit Risk Profile by Creditworthiness Category

	Construction				Single and multi-family				Other				Total commercial real estate
(In thousands)	June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015
Grade:
Pass	$	29,335	$	42,176	$	36,845	$	32,796	$	328,594	$	324,614	$	394,774	$	399,586
Special mention	—		—		—		655		1,146		352		1,146		1,007
Substandard	1,093		1,298		5,326		3,332		17,601		20,517		24,020		25,147
Total	$	30,428	$	43,474	$	42,171	$	36,783	$	347,341	$	345,483	$	419,940	$	425,740

Commercial and Industrial Loans

Credit Risk Profile by Creditworthiness Category

	Asset based lending				Other				Total comm. and industrial loans
(In thousands)	June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015
Grade:
Pass	$	—	$	—	$	173,306	$	212,825	$	173,306	$	212,825
Special mention	—		—		515		487		515		487
Substandard	—		—		7,650		7,719		7,650		7,719
Total	$	—	$	—	$	181,471	$	221,031	$	181,471	$	221,031

Residential Mortgages

Credit Risk Profile by Internally Assigned Grade

	1-4 family				Construction				Total residential mortgages
(In thousands)	June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015
Grade:
Pass	$	299,909	$	329,375	$	866	$	1,351	$	300,775	$	330,726
Special mention	327		311		—		—		327		311
Substandard	2,466		3,061		—		—		2,466		3,061
Total	$	302,702	$	332,747	$	866	$	1,351	$	303,568	$	334,098

Consumer Loans

Credit Risk Profile Based on Payment Activity

	Home equity				Auto and other				Total consumer loans
(In thousands)	June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015
Performing	$	48,788	$	52,719	$	109,440	$	129,345	$	158,228	$	182,064
Nonperforming	558		727		723		893		1,281		1,620
Total	$	49,346	$	53,446	$	110,163	$	130,238	$	159,509	$	183,684

The following table summarizes information about total loans rated Special Mention or lower as of June 30, 2016 and December 31, 2015. The table below includes consumer loans that are special mention and substandard accruing that are classified in the above table as performing based on payment activity.

	June 30, 2016						December 31, 2015
(In thousands)	Business Activities Loans		Acquired Loans		Total		Business Activities Loans		Acquired Loans		Total
Non-Accrual	$	14,450	$	6,206	$	20,656	$	15,484	$	5,391	$	20,875
Substandard Accruing	52,086		29,647		81,733		60,549		32,560		93,109
Total Classified	66,536		35,853		102,389		76,033		37,951		113,984
Special Mention	23,105		2,111		25,216		29,036		2,259		31,295
Total Criticized	$	89,641	$	37,964	$	127,605	$	105,069	$	40,210	$	145,279

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DEPOSITS

6 Months Ended

Jun. 30, 2016

Deposits [Abstract]

DEPOSITS

DEPOSITS

A summary of time deposits is as follows:

(In thousands)	June 30, 2016		December 31, 2015
Time less than $100,000	$	544,761	$	545,819
Time $100,000 or more	1,545,341		1,440,781
Total time deposits	$	2,090,102	$	1,986,600

Included in time deposits are brokered deposits of $823.3 million and $784.1 million at June 30, 2016 and December 31, 2015, respectively. Included in the deposit balances contained on the balance sheet are reciprocal deposits of $106.4 million and $101.5 million at June 30, 2016 and December 31, 2015, respectively.

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BORROWED FUNDS

6 Months Ended

Jun. 30, 2016

Debt Disclosure [Abstract]

BORROWED FUNDS

BORROWED FUNDS

Borrowed funds at June 30, 2016 and December 31, 2015 are summarized, as follows:

	June 30, 2016				December 31, 2015
			Weighted				Weighted
			Average				Average
(dollars in thousands)	Principal		Rate		Principal		Rate
Short-term borrowings:
Advances from the FHLBB	$	1,110,320	0.54	%	$	1,071,200	0.43	%
Other Borrowings	—		—		—		—
Total short-term borrowings:	1,110,320		0.54		1,071,200		0.43
Long-term borrowings:
Advances from the FHLBB	120,844		1.62		103,135		1.89
Subordinated borrowings	73,608		7.00		73,519		7.00
Junior subordinated borrowings	15,464		2.50		15,464		2.23
Total long-term borrowings:	209,916		3.57		192,118		3.88
Total	$	1,320,236	1.02	%	$	1,263,318	0.96	%

Short term debt includes Federal Home Loan Bank of Boston (“FHLBB”) advances with an original maturity of less than one year and a short-term line-of-credit drawdown through a correspondent bank. The Bank also maintains a $3.0 million secured line of credit with the FHLBB that bears a daily adjustable rate calculated by the FHLBB. There was no outstanding balance on the FHLBB line of credit for the periods ended June 30, 2016 and December 31, 2015.

The Bank is approved to borrow on a short-term basis from the Federal Reserve Bank of Boston as a non-member bank. The Bank has pledged certain loans and securities to the Federal Reserve Bank to support this arrangement. No borrowings with the Federal Reserve Bank took place for the periods ended June 30, 2016 and December 31, 2015.

Long-term FHLBB advances consist of advances with an original maturity of more than one year. The advances outstanding at June 30, 2016 include callable advances totaling $11.0 million, and amortizing advances totaling $1.2 million. The advances outstanding at December 31, 2015 include callable advances totaling $11.0 million, and amortizing advances totaling $1.2 million. All FHLBB borrowings, including the line of credit, are secured by a blanket security agreement on certain qualified collateral, principally all residential first mortgage loans and certain securities.

A summary of maturities of FHLBB advances as of June 30, 2016 and December 31, 2015 is as follows:

	June 30, 2016
			Weighted
			Average
(in thousands, except rates)	Principal		Rate
Fixed rate advances maturing:
2016	$	1,131,862	0.56	%
2017	83,235		1.49
2018	1,022		2.62
2019	—		—
2020 and beyond	15,045		2.41
Total FHLBB advances	$	1,231,164	0.65	%

The Company does not have variable-rate FHLB advances for the periods ended June 30, 2016 and December 31, 2015.

In September 2012, the Company issued fifteen year subordinated notes in the amount of $75.0 million at a discount of 1.15%. The interest rate is fixed at 6.875% for the first ten years. After ten years, the notes become callable and convert to an interest rate of three-month LIBOR rate plus 5.113%. The subordinated note includes reduction to the note principal balance of $768 thousand and $829 thousand for unamortized debt issuance costs as of June 30, 2016 and December 31 2015, respectively.

The Company holds 100% of the common stock of Berkshire Hills Capital Trust I (“Trust I”) which is included in other assets with a cost of $0.5 million. The sole asset of Trust I is $15.5 million of the Company’s junior subordinated debentures due in 2035. These debentures bear interest at a variable rate equal to LIBOR plus 1.85% and had a rate of 2.50% and 2.23% at June 30, 2016 and December 31, 2015, respectively. The Company has the right to defer payments of interest for up to five years on the debentures at any time, or from time to time, with certain limitations, including a restriction on the payment of dividends to shareholders while such interest payments on the debentures have been deferred. The Company has not exercised this right to defer payments. The Company has the right to redeem the debentures at par value. Trust I is considered a variable interest entity for which the Company is not the primary beneficiary. Accordingly, Trust I is not consolidated into the Company’s financial statements.

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CAPITAL RATIOS AND SHAREHOLDERS' EQUITY

6 Months Ended

Jun. 30, 2016

Stockholders' Equity Note [Abstract]

STOCKHOLDERS' EQUITY

 CAPITAL RATIOS AND SHAREHOLDERS’ EQUITY

The actual and required capital ratios were as follows:

	June 30, 2016		Regulatory Minimum to be Well Capitalized		December 31, 2015		Regulatory Minimum to be Well Capitalized
Company (consolidated)
Total capital to risk weighted assets	11.4	%	10.0	%	11.9	%	10.0	%
Common Equity Tier 1 Capital to risk weighted assets	9.3		6.5		9.8		6.5
Tier 1 capital to risk weighted assets	9.5		8.0		9.9		8.0
Tier 1 capital to average assets	7.7		5.0		7.7		5.0
Bank
Total capital to risk weighted assets	10.6	%	10.0	%	11.2	%	10.0	%
Common Equity Tier 1 Capital to risk weighted assets	9.4		6.5		9.9		6.5
Tier 1 capital to risk weighted assets	9.4		8.0		9.9		8.0
Tier 1 capital to average assets	7.6		5.0		7.7		5.0

At each date shown, the Company and the Bank met the conditions to be classified as “well capitalized” under the relevant regulatory framework.  To be categorized as well capitalized, an institution must maintain minimum total risk-based, Tier 1 risk-based, and Tier 1 leverage ratios as set forth in the table above.

Effective January 1, 2015, the Company and the Bank became subject to the Basel III rule that requires the Company and the Bank to assess their Common Equity Tier 1 Capital to risk weighted assets and the Company and the Bank each exceed the minimum to be well capitalized. In addition, the final capital rules added a requirement to maintain a minimum conservation buffer, composed of Common equity tier 1 capital, of 2.5% of risk-weighted assets, to be phased in over three years and applied to the Common equity tier 1 risk-based capital ratio, the Tier 1 risk-based capital ratio and the Total risk-based capital ratio. Accordingly, banking organizations, on a fully phased in basis no later than January 1, 2019, must maintain a minimum Common equity tier 1 risk-based capital ratio of 7.0%, a minimum Tier 1 risk-based capital ratio of 8.5% and a minimum Total risk-based capital ratio of 10.5%.

The required minimum conservation buffer began to be phased in incrementally, starting at 0.625% on January 1, 2016 and will increase to 1.25% on January 1, 2017, 1.875% on January 1, 2018 and 2.5% on January 1, 2019. The final capital rules impose restrictions on capital distributions and certain discretionary cash bonus payments if the minimum capital conservation buffer is not met.

At June 30, 2016, the capital levels of both the Company and the Bank exceeded all regulatory capital requirements and their regulatory capital ratios were above the minimum levels required to be considered well capitalized for regulatory purposes. The capital levels of both the Company and the Bank at June 30, 2016 also exceeded the minimum capital requirements including the currently applicable capital conservation buffer of 0.625%.

Accumulated other comprehensive income (loss)

Components of accumulated other comprehensive income is as follows:

(In thousands)	June 30, 2016			December 31, 2015
Other accumulated comprehensive income, before tax:
Net unrealized holding gain on AFS securities	$	33,609		$	6,316
Net loss on effective cash flow hedging derivatives	(13,921		)	(8,532		)
Net unrealized holding loss on pension plans	(3,468		)	(3,469		)
Income taxes related to items of accumulated other comprehensive income:
Net unrealized holding gain on AFS securities	(12,984		)	(2,437		)
Net loss on effective cash flow hedging derivatives	5,586			3,425
Net unrealized holding loss on pension plans	1,391			1,392
Accumulated other comprehensive income (loss)	$	10,213		$	(3,305	)

The following table presents the components of other comprehensive income for the three and six months ended June 30, 2016 and 2015:

(In thousands)	Before Tax			Tax Effect			Net of Tax
Three Months Ended June 30, 2016
Net unrealized holding gains on AFS securities:	x
Net unrealized gains arising during the period	$	9,573		$	(3,686	)	$	5,887
Less: reclassification adjustment for loss realized in net income	13			(5		)	8
Net unrealized holding gain on AFS securities	9,586			(3,691		)	5,895
Net loss on cash flow hedging derivatives:
Net unrealized loss arising during the period	(1,771		)	711			(1,060		)
Less: reclassification adjustment for losses realized in net income	887			(356		)	531
Net loss on cash flow hedging derivatives	(884		)	355			(529		)
Net unrealized holding loss on pension plans
Net unrealized loss arising during the period	—			—			—
Less: reclassification adjustment for gains (losses) realized in net income	—			—			—
Net unrealized holding loss on pension plans	—			—			—
Other comprehensive income	$	8,702		$	(3,336	)	$	5,366
Three Months Ended June 30, 2015
Net unrealized holding loss on AFS securities:
Net unrealized loss arising during the period	$	(13,687	)	$	5,243		$	(8,444	)
Less: reclassification adjustment for (gains) realized in net income	(2,384		)	857			(1,527		)
Net unrealized holding loss on AFS securities	(16,071		)	6,100			(9,971		)
Net gain on cash flow hedging derivatives:
Net unrealized gain arising during the period	784			(316		)	468
Less: reclassification adjustment for losses realized in net income	—			—			—
Net gain on cash flow hedging derivatives	784			(316		)	468
Net unrealized holding loss on pension plans
Net unrealized loss arising during the period	—			—			—
Less: reclassification adjustment for gains (losses) realized in net income	65			(26		)	39
Net unrealized holding loss on pension plans	65			(26		)	39
Other comprehensive income	$	(15,222	)	$	5,758		$	(9,464	)

(In thousands)	Before Tax			Tax Effect			Net of Tax
Six Months Ended June 30, 2016
Net unrealized holding gains on AFS securities:
Net unrealized gains arising during the period	$	27,315		$	(10,556	)	$	16,759
Less: reclassification adjustment for (gains) realized in net income	(22		)	8			(14		)
Net unrealized holding gain on AFS securities	27,293			(10,548		)	16,745
Net loss on cash flow hedging derivatives:
Net unrealized loss arising during the period	(6,684		)	2,683			(4,001		)
Less: reclassification adjustment for gains (losses) realized in net income	1,294			(520		)	774
Net loss on cash flow hedging derivatives	(5,390		)	2,163			(3,227		)
Net unrealized holding loss on pension plans
Net unrealized loss arising during the period	—			—			—
Less: reclassification adjustment for gains (losses) realized in net income	—			—			—
Net unrealized holding loss on pension plans	—			—			—
Other comprehensive income	$	21,903		$	(8,385	)	$	13,518
Six Months Ended June 30, 2015
Net unrealized holding loss on AFS securities:
Net unrealized loss arising during the period	$	(4,316	)	$	1,625		$	(2,691	)
Less: reclassification adjustment for (gains) realized in net income	(2,418		)	870			(1,548		)
Net unrealized holding gain on AFS securities	(6,734		)	2,495			(4,239		)
Net loss on cash flow hedging derivatives:
Net unrealized loss arising during the period	(3,117		)	1,256			(1,861		)
Less: reclassification adjustment for (gains) realized in net income	—			—			—
Net gain on cash flow hedging derivatives	(3,117		)	1,256			(1,861		)
Net loss on pension plan:
Net unrealized loss arising during the period	(1,596		)	643			(953		)
Less: reclassification adjustment for losses realized in net income	130			(52		)	78
Net loss on terminated swap	(1,466		)	591			(875		)
Other comprehensive income	$	(11,317	)	$	4,342		$	(6,975	)

The following table presents the changes in each component of accumulated other comprehensive income (loss), for the three and six months ended June 30, 2016 and 2015:

(in thousands)	Net unrealized holding gain on AFS Securities			Net loss on effective cash flow hedging derivatives			Net unrealized holding loss on pension plans			Total
Three Months Ended June 30, 2016
Balance at Beginning of Period	$	14,730		$	(7,806	)	$	(2,077	)	$	4,847
Other Comprehensive Gain (Loss) Before reclassifications	5,887			(1,060		)	—			4,827
Amounts Reclassified from Accumulated other comprehensive income	8			531			—			539
Total Other Comprehensive Income (Loss)	5,895			(529		)	—			5,366
Balance at End of Period	$	20,625		$	(8,335	)	$	(2,077	)	$	10,213
Three Months Ended June 30, 2015
Balance at Beginning of Period	$	15,648		$	(4,298	)	$	(2,282	)	$	9,068
Other Comprehensive Gain (Loss) Before reclassifications	(8,444		)	468			—			(7,976		)
Amounts Reclassified from Accumulated other comprehensive income	(1,527		)	—			39			(1,488		)
Total Other Comprehensive (Loss) Income	(9,971		)	468			39			(9,464		)
Balance at End of Period	$	5,677		$	(3,830	)	$	(2,243	)	$	(396	)
Six Months Ended June 30, 2016
Balance at Beginning of Period	$	3,880		$	(5,108	)	$	(2,077	)	$	(3,305	)
Other Comprehensive (Loss) Before reclassifications	16,759			(4,001		)	—			12,758
Amounts Reclassified from Accumulated other comprehensive income	(14		)	774			—			760
Total Other Comprehensive Income (Loss)	16,745			(3,227		)	—			13,518
Balance at End of Period	$	20,625		$	(8,335	)	$	(2,077	)	$	10,213
Six Months Ended June 30, 2015
Balance at Beginning of Period	$	9,916		$	(1,969	)	$	(1,368	)	$	6,579
Other Comprehensive Gain (Loss) Before reclassifications	(2,691		)	(1,861		)	(953		)	(5,505		)
Amounts Reclassified from Accumulated other comprehensive income	(1,548		)	—			78			(1,470		)
Total Other Comprehensive (Loss)	(4,239		)	(1,861		)	(875		)	(6,975		)
Balance at End of Period	$	5,677		$	(3,830	)	$	(2,243	)	$	(396	)

The following table presents the amounts reclassified out of each component of accumulated other comprehensive income (loss) for the three and six months ended June 30, 2016 and 2015:

							Affected Line Item in the
	Three Months Ended June 30,						Statement where Net Income
(in thousands)	2016			2015			is Presented
Realized losses (gains) on AFS securities:
	$	13		$	(2,384	)	Non-interest income
	(5		)	857			Tax expense
	8			(1,527		)	Net of tax
Realized losses on cash flow hedging derivatives:
	887			—			Non-interest income
	(356		)	—			Tax expense
	531			—			Net of tax
Realized losses on pension plans:
	—			65			Non-interest income
	—			(26		)	Tax expense
	—			39			Net of tax
Total reclassifications for the period	$	539		$	(1,488	)	Net of tax

							Affected Line Item in the
	Six Months Ended June 30,						Statement where Net Income
(in thousands)	2016			2015			is Presented
Realized (gains) on AFS securities:
	$	(23	)	$	(2,418	)	Non-interest income
	9			870			Tax expense
	(14		)	(1,548		)	Net of tax
Realized losses on cash flow hedging derivatives:
	1,295			—			Non-interest income
	(521		)	—			Tax expense
	774			—			Net of tax
Realized losses on pension plans:
	—			130			Non-interest income
	—			(52		)	Tax expense
	—			78			Net of tax
Total reclassifications for the period	$	760		$	(1,470	)	Net of tax

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EARNINGS PER SHARE

6 Months Ended

Jun. 30, 2016

Earnings Per Share [Abstract]

EARNINGS PER SHARE

EARNINGS PER SHARE

Earnings per share have been computed based on the following (average diluted shares outstanding are calculated using the treasury stock method):

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands, except per share data)	2016		2015		2016		2015
Net income	$	15,957	$	10,044	$	31,958	$	18,803
Average number of common shares issued	32,213		29,975		32,188		28,260
Less: average number of treasury shares	1,075		1,193		1,107		1,244
Less: average number of unvested stock award shares	533		481		520		459
Average number of basic common shares outstanding	30,605		28,301		30,561		26,557
Plus: dilutive effect of unvested stock award shares	102		94		99		91
Plus: dilutive effect of stock options outstanding	58		66		65		65
Average number of diluted common shares outstanding	30,765		28,461		30,725		26,713
Earnings per share:
Basic	$	0.52	$	0.35	$	1.05	$	0.71
Diluted	$	0.52	$	0.35	$	1.04	$	0.70

For the six months ended June 30, 2016, 407 thousand shares of restricted stock and 204 thousand options were anti-dilutive and therefore excluded from the earnings per share calculations.  For the six months ended June 30, 2015, 365 thousand shares of restricted stock and 207 thousand options were anti-dilutive and therefore excluded from the earnings per share calculations.

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STOCK-BASED COMPENSATION PLANS

6 Months Ended

Jun. 30, 2016

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

STOCK-BASED COMPENSATION PLANS

STOCK-BASED COMPENSATION PLANS

A combined summary of activity in the Company’s stock award and stock option plans for the six months ended June 30, 2016 is presented in the following table:

		Non-vested Stock
		Awards Outstanding				Stock Options Outstanding
				Weighted-				Weighted-
		Number of		Average Grant Date		Number of		Average Exercise
(Shares in thousands)		Shares		Fair Value		Shares		Price
December 31, 2015		488		$	25.09	265		$	21.11
Granted		180		27.39		—		—
Stock options exercised		—		—		(2	)	16.76
Stock awards vested		(100	)	25.32		—		—
Forfeited		(22	)	24.39		—		—
Expired		—		—		(3	)	34.45
June 30, 2016		546		$	26.12	260		$	20.99
Exercisable options at	June 30, 2016					260		$	20.96

During the six months ended June 30, 2016 and 2015, proceeds from stock option exercises totaled $37 thousand and totaled $116 thousand, respectively. During the six months ended June 30, 2016, there were 100 thousand shares issued in connection with vested stock awards. During the six months ended June 30, 2015, there were 86 thousand shares issued in connection with vested stock awards. All of these shares were issued from available treasury stock. Stock-based compensation expense totaled $2.6 million and $2.3 million during the six months ended June 30, 2016 and 2015, respectively. Stock-based compensation expense is recognized over the requisite service period for all awards.

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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

6 Months Ended

Jun. 30, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

As of June 30, 2016, the Company held derivatives with a total notional amount of $1.7 billion. That amount included $300.0 million in interest rate swap derivatives that were designated as cash flow hedges for accounting purposes. The Company also had economic hedges and non-hedging derivatives totaling $1.3 billion and $64.4 million, respectively, which are not designated as hedges for accounting purposes and are therefore recorded at fair value. Economic hedges included interest rate swaps totaling $1.1 billion, risk participation agreements with dealer banks of $67.9 million, and $76.6 million in forward commitment contracts.

As part of the Company’s risk management strategy, the Company enters into interest rate swap agreements to mitigate the interest rate risk inherent in certain of the Company’s assets and liabilities. Interest rate swap agreements involve the risk of dealing with both Bank customers and institutional derivative counterparties and their ability to meet contractual terms. The agreements are entered into with counterparties that meet established credit standards and contain master netting and collateral provisions protecting the at-risk party. The derivatives program is overseen by the Risk Management/Capital Committee of the Company’s Board of Directors. Based on adherence to the Company’s credit standards and the presence of the netting and collateral provisions, the Company believes that the credit risk inherent in these contracts was not significant at June 30, 2016.

The Company pledged collateral to derivative counterparties in the form of cash totaling $853 thousand and securities with an amortized cost of $61.9 million and a fair value of $63.8 million as of June 30, 2016. The Company does not typically require its commercial customers to post cash or securities as collateral on its program of back-to-back economic hedges. However certain language is written into the International Swaps Dealers Association, Inc. (“ISDA”) and loan documents where, in default situations, the Bank is allowed to access collateral supporting the loan relationship to recover any losses suffered on the derivative asset or liability. The Company may need to post additional collateral in the future in proportion to potential increases in unrealized loss positions.

Information about derivative assets and liabilities at June 30, 2016, follows:

			Weighted	Weighted Average Rate				Estimated
	Notional		Average			Contract		Fair Value
	Amount		Maturity	Received		pay rate		Asset (Liability)
	(In thousands)		(In years)					(In thousands)
Cash flow hedges:
Interest rate swaps on FHLBB borrowings	$	200,000	2.6	0.47	%	2.19	%	$	(8,390	)
Forward-starting interest rate swaps on FHLBB borrowings	100,000		3.0	0.47	%	2.48	%	$	(5,531	)
Total cash flow hedges	300,000							(13,921		)
Economic hedges:
Interest rate swap on tax advantaged economic development bond	11,689		13.4	0.61	%	5.09	%	(3,023		)
Interest rate swaps on loans with commercial loan customers	565,898		5.6	1.92	%	3.78	%	(38,466		)
Reverse interest rate swaps on loans with commercial loan customers	565,898		5.6	3.78	%	1.92	%	38,020
Risk Participation Agreements with Dealer Banks	67,868		13.2					60
Forward sale commitments	76,634		0.2					(869		)
Total economic hedges	1,287,987							(4,278		)
Non-hedging derivatives:
Interest rate lock commitments	64,412		0.2					1,259
Total non-hedging derivatives	64,412							1,259
Total	$	1,652,399						$	(16,940	)

Information about derivative assets and liabilities at December 31, 2015, follows:

			Weighted	Weighted Average Rate				Estimated
	Notional		Average			Contract		Fair Value
	Amount		Maturity	Received		pay rate		Asset (Liability)
	(In thousands)		(In years)					(In thousands)
Cash flow hedges:
Forward-starting interest rate swaps on FHLBB borrowings	$	300,000	3.3	0.14	%	2.29	%	$	(8,532	)
Total cash flow hedges	300,000							(8,532		)
Economic hedges:
Interest rate swap on tax advantaged economic development bond	11,984		13.9	0.61	%	5.09	%	(2,450		)
Interest rate swaps on loans with commercial loan customers	457,392		6.7	2.18	%	4.49	%	(17,143		)
Reverse interest rate swaps on loans with commercial loan customers	457,392		6.7	4.49	%	2.18	%	17,129
Risk participation agreements with dealer banks	59,016		15.0					(56		)
Forward sale commitments	44,840		0.2					53
Total economic hedges	1,030,624							(2,467		)
Non-hedging derivatives:
Interest rate lock commitments	36,043		0.2					323
Total non-hedging derivatives	36,043							323
Total	$	1,366,667						$	(10,676	)

Cash flow hedges

The effective portion of unrealized changes in the fair value of derivatives accounted for as cash flow hedges is reported in other comprehensive income and subsequently reclassified to earnings in the same period or periods during which the hedged transaction is forecasted to affect earnings. Each quarter, 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 item or transaction. The ineffective portion of changes in the fair value of the derivatives is recognized directly in earnings.

The Company has entered into four interest rate swap contracts with an aggregate notional value of $200 million and two forward-starting interest rate swap contracts with an aggregate notional value of $100 million as of June 30, 2016. The two forward starting swaps will become effective in 2016. All have durations of three years. This hedge strategy converts the one month rolling FHLBB borrowings based on the FHLBB’s one month fixed interest rate to fixed interest rates, thereby protecting the Company from floating interest rate variability.

Amounts included in the Consolidated Statements of Income and in the other comprehensive income section of the Consolidated Statements of Comprehensive Income (related to interest rate derivatives designated as hedges of cash flows), were as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2016			2015			2016			2015
Interest rate swaps on FHLBB borrowings:
Unrealized (loss) gain recognized in accumulated other comprehensive loss	$	(1,771	)	$	784		$	(6,684	)	$	(3,117	)
Reclassification of unrealized loss from accumulated other comprehensive income to interest expense	887			—			1,295			—
Net tax benefit (expense) on items recognized in accumulated other comprehensive income	355			(316		)	2,162			1,256
Other comprehensive (loss) gain recorded in accumulated other comprehensive income, net of reclassification adjustments and tax effects	$	(529	)	$	468		$	(3,227	)	$	(1,861	)
Net interest expense recognized in interest expense on hedged FHLBB borrowings	$	887		$	—		$	1,295		$	—

Hedge ineffectiveness on interest rate swaps designated as cash flow hedges was immaterial to the Company’s financial statements during the three and six months ended June 30, 2016 and 2015.

Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate liabilities. During the next twelve months, the Company anticipates reclassification of approximately $5.4 million.

Economic hedges

As of June 30, 2016, the Company has an interest rate swap with a $11.7 million notional amount to swap out the fixed rate of interest on an economic development bond bearing a fixed rate of 5.09%, currently within the Company’s trading portfolio under the fair value option, in exchange for a LIBOR-based floating rate. The intent of the economic hedge is to improve the Company’s asset sensitivity to changing interest rates in anticipation of favorable average floating rates of interest over the 21-year life of the bond. The fair value changes of the economic development bond are mostly offset by fair value changes of the related interest rate swap.

The Company also offers certain derivative products directly to qualified commercial borrowers. The Company economically hedges derivative transactions executed with commercial borrowers by entering into mirror-image, offsetting derivatives with third-party financial institutions. The transaction allows the Company’s customer to convert a variable-rate loan to a fixed rate loan. Because the Company acts as an intermediary for its customer, changes in the fair value of the underlying derivative contracts mostly offset each other in earnings. Credit valuation adjustments arising from the difference in credit worthiness of the commercial loan and financial institution counterparties totaled $(372) thousand as of June 30, 2016. The interest income and expense on these mirror image swaps exactly offset each other.

The Company has risk participation agreements with dealer banks. Risk participation agreements occur when the Company participates on a loan and a swap where another bank is the lead. The Company gets paid a fee to take on the risk associated with having to make the lead bank whole on Berkshire’s portion of the pro-rated swap should the borrower default. Changes in fair value are recorded in current period earnings.

The Company utilizes forward sale commitments to hedge interest rate risk and the associated effects on the fair value of interest rate lock commitments and loans originated for sale. The forward sale commitments are accounted for as derivatives with changes in fair value recorded in current period earnings.

The Company uses the following types of forward sale commitments contracts:

• Best efforts loan sales,

• Mandatory delivery loan sales, and

• To Be Announced (“TBA”) mortgage-backed securities sales.

A best efforts contract refers to a loan sale agreement where the Company commits to deliver an individual mortgage loan of a specified principal amount and quality to an investor if the loan to the underlying borrower closes. The Company may enter into a best efforts contract once the price is known, which is shortly after the potential borrower’s interest rate is locked.

A mandatory delivery contract is a loan sale agreement where 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. Generally, the Company may enter into mandatory delivery contracts shortly after the loan closes with a customer.

The Company may sell TBA mortgage-backed securities to hedge the changes in fair value of interest rate lock commitments and held for sale loans, which do not have corresponding best efforts or mandatory delivery contracts. These security sales transactions are closed once mandatory contracts are written. On the closing date the price of the security is locked-in, and the sale is paired-off with a purchase of the same security. Settlement of the security purchase/sale transaction is done with cash on a net-basis.

Non-hedging derivatives

The Company enters into interest rate lock commitments (“IRLCs”) for residential mortgage loans, which commit the Company to lend funds to a potential borrower at a specific interest rate and within a specified period of time. IRLCs that relate to the origination of mortgage loans that will be held for sale are considered derivative financial instruments under applicable accounting guidance. Outstanding IRLCs expose the Company to the risk that the price of the mortgage loans underlying the commitments may decline due to increases in mortgage interest rates from inception of the rate lock to the funding of the loan. The IRLCs are free-standing derivatives which are carried at fair value with changes recorded in noninterest income in the Company’s consolidated statements of income. Changes in the fair value of IRLCs subsequent to inception are based on changes in the fair value of the underlying loan resulting from the fulfillment of the commitment and changes in the probability that the loan will fund within the terms of the commitment, which is affected primarily by changes in interest rates and the passage of time.

Amounts included in the Consolidated Statements of Income related to economic hedges and non-hedging derivatives were as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2016			2015			2016			2015
Economic hedges
Interest rate swap on industrial revenue bond:
Unrealized gain (loss) recognized in other non-interest income	$	(292	)	$	331		$	(831	)	$	60
Interest rate swaps on loans with commercial loan customers:
Unrealized (loss) gain recognized in other non-interest income	(7,725		)	3,889			(21,322		)	775
Reverse interest rate swaps on loans with commercial loan customers:
Unrealized gain (loss) recognized in other non-interest income	7,725			(3,889		)	21,322			(755		)
(Unfavorable) Favorable change in credit valuation adjustment recognized in other non-interest income	(372		)	56			(433		)	57
Risk Participation Agreements:
Unrealized gain (loss) recognized in other non-interest income	33			31			116			(40		)
Forward Commitments:
Unrealized (loss) gain recognized in other non-interest income	(869		)	475			(1,316		)	87
Realized gain (loss) in other non-interest income	50			504			(333		)	413
Non-hedging derivatives
Interest rate lock commitments
Unrealized gain recognized in other non-interest income	$	1,259		$	382		$	2,061		$	1,359
Realized gain in other non-interest income	896			186			1,745			941

Assets and Liabilities Subject to Enforceable Master Netting Arrangements

Interest Rate Swap Agreements (“Swap Agreements”)

The Company enters into swap agreements to facilitate the risk management strategies for commercial banking customers. The Company mitigates this risk by entering into equal and offsetting swap agreements with highly rated third party financial institutions. The swap agreements are free-standing derivatives and are recorded at fair value in the Company’s consolidated statements of condition. The Company is party to master netting arrangements with its financial institution counterparties; however, the Company does not offset assets and liabilities under these arrangements for financial statement presentation purposes. The master netting arrangements provide for a single net settlement of all swap agreements, as well as collateral, in the event of default on, or termination of, any one contract. Collateral generally in the form of marketable securities is received or posted by the counterparty with net liability positions, respectively, in accordance with contract thresholds.

The Company had net asset positions with its commercial banking counterparties totaling $38.0 million and $17.1 million as of June 30, 2016 and December 31, 2015, respectively. The Company had net liability positions with its financial institution counterparties totaling $55.5 million and $28.2 million as of June 30, 2016 and December 31, 2015, respectively. At June 30, 2016, the Company did not have a net liability position with its commercial banking counterparties. The collateral posted by the Company that covered liability positions was $55.5 million and $28.2 million as of June 30, 2016 and December 31, 2015, respectively.

The following table presents the assets and liabilities subject to an enforceable master netting arrangement as of June 30, 2016 and December 31, 2015:

Offsetting of Financial Assets and Derivative Assets

	Gross Amounts of		Gross Amounts Offset in the		Net Amounts of Assets Presented in the		Gross Amounts Not Offset in the Statements of Condition
	Recognized		Statements of		Statements of		Financial		Cash
(in thousands)	Assets		Condition		Condition		Instruments		Collateral Received		Net Amount
June 30, 2016
Interest Rate Swap Agreements:
Institutional counterparties	$	132	$	—	$	132	$	—	$	—	$	132
Commercial counterparties	38,020		—		38,020		—		—		38,020
Total	$	38,152	$	—	$	38,152	$	—	$	—	$	38,152

Offsetting of Financial Liabilities and Derivative Liabilities

	Gross Amounts of			Gross Amounts Offset in the		Net Amounts of Liabilities Presented in the			Gross Amounts Not Offset in the Statements of Condition
	Recognized			Statements of		Statements of			Financial		Cash
(in thousands)	Liabilities			Condition		Condition			Instruments		Collateral Pledged		Net Amount
June 30, 2016
Interest Rate Swap Agreements:
Institutional counterparties	$	(55,528	)	$	46	$	(55,482	)	$	54,832	$	650	$	—
Commercial counterparties	—			—		—			—		—		—
Total	$	(55,528	)	$	46	$	(55,482	)	$	54,832	$	650	$	—

Offsetting of Financial Assets and Derivative Assets

	Gross Amounts of		Gross Amounts Offset in the		Net Amounts of Assets Presented in the		Gross Amounts Not Offset in the Statements of Condition
	Recognized		Statements of		Statements of		Financial		Cash
(in thousands)	Assets		Condition		Condition		Instruments		Collateral Received		Net Amount
December 31, 2015
Interest Rate Swap Agreements:
Institutional counterparties	$	40	$	—	$	40	$	—	$	—	$	40
Commercial counterparties	17,129		—		17,129		—		—		17,129
Total	$	17,169	$	—	$	17,169	$	—	$	—	$	17,169

Offsetting of Financial Liabilities and Derivative Liabilities

	Gross Amounts of			Gross Amounts Offset in the		Net Amounts of Liabilities Presented in the			Gross Amounts Not Offset in the Statements of Condition
	Recognized			Statements of		Statements of			Financial		Cash
(in thousands)	Liabilities			Condition		Condition			Instruments		Collateral Pledged		Net Amount
December 31, 2015
Interest Rate Swap Agreements:
Institutional counterparties	$	(28,220	)	$	—	$	(28,220	)	$	18,500	$	9,720	$	—
Commercial counterparties	—			—		—			—		—		—
Total	$	(28,220	)	$	—	$	(28,220	)	$	18,500	$	9,720	$	—

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FAIR VALUE MEASUREMENTS

6 Months Ended

Jun. 30, 2016

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

A description of the valuation methodologies used for assets and liabilities measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. These valuation methodologies were applied to all of the Company’s financial assets and financial liabilities that are carried at fair value.

Recurring Fair Value Measurements

The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of June 30, 2016 and December 31, 2015, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value.

	June 30, 2016
	Level 1		Level 2		Level 3		Total
(In thousands)	Inputs		Inputs		Inputs		Fair Value
Trading security	$	—	$	—	$	14,479	$	14,479
Available-for-sale securities:
Municipal bonds and obligations	—		111,590		—		111,590
Agency collateralized mortgage obligations	—		679,506		—		679,506
Agency residential mortgage-backed securities	—		109,613		—		109,613
Agency commercial mortgage-backed securities	—		63,251		—		63,251
Corporate bonds	—		45,703		—		45,703
Trust preferred securities	—		11,739		—		11,739
Other bonds and obligations	—		3,222		—		3,222
Marketable equity securities	47,313		1,433		—		48,746
Loans held for sale (1)	—		21,182		—		21,182
Derivative assets	—		38,020		1,259		39,279
Derivative liabilities	680		55,350		189		56,219

(1) Loans held for sale excludes $1.3 million of loans held for sale shown on the balance sheet that are held at lower of cost or market.

	December 31, 2015
	Level 1		Level 2		Level 3		Total
(In thousands)	Inputs		Inputs		Inputs		Fair Value
Trading security	$	—	$	—	$	14,189	$	14,189
Available-for-sale securities:
Municipal bonds and obligations	—		104,561		—		104,561
Agency collateralized mortgage obligations	—		833,036		—		833,036
Agency residential mortgage-backed securities	—		126,829		—		126,829
Agency commercial mortgage-backed securities	—		—		—		—
Corporate bonds	—		41,022		—		41,022
Trust preferred securities	—		11,901		—		11,901
Other bonds and obligations	—		3,141		—		3,141
Marketable equity securities	32,925		334		708		33,967
Loans Held for Sale	—		13,191		—		13,191
Derivative assets	45		17,130		332		17,507
Derivative liabilities	—		28,181		—		28,181

There were no transfers between levels during the three months endedJune 30, 2016or2015.During the six months ended June 30, 2016, the Company had one transfer of $708 thousand in marketable equity securities from Level 3 to Level 2 based on a change in valuation technique driven by the availability of market data. There were no transfers between levels during the six months ended June 30, 2015.

Trading Security at Fair Value. The Company holds one security designated as a trading security. It is a tax advantaged economic development bond issued to the Company by a local nonprofit which provides wellness and health programs. The determination of the fair value for this security is determined based on a discounted cash flow methodology. Certain inputs to the fair value calculation are unobservable and there is little to no market activity in the security; therefore, the security meets the definition of a Level 3 security.  The discount rate used in the valuation of the security is sensitive to movements in the 3-month LIBOR rate.

Securities Available for Sale. AFS securities classified as Level 1 consist of publicly-traded equity securities for which the fair values can be obtained through quoted market prices in active exchange markets. AFS securities classified as Level 2 include most of the Company’s debt securities. The pricing on Level 2 was primarily sourced from third party pricing services, overseen by management, and is based on models that consider standard input factors such as dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond’s terms and condition, among other things.

Loans held for sale. The Company elected the fair value option for all loans held for sale (HFS) originated for sale on or after May 1, 2012.  Loans HFS are classified as Level 2 as the fair value is based on input factors such as quoted prices for similar loans in active markets.

					Aggregate Fair Value
June 30, 2016	Aggregate		Aggregate		Less Aggregate
(In thousands)	Fair Value		Unpaid Principal		Unpaid Principal
Loans Held for Sale (1)	$	21,182	$	20,321	$	861

(1) Loans held for sale excludes $1.3 million of loans held for sale shown on the balance sheet that are held at lower of cost or market.

					Aggregate Fair Value
December 31, 2015	Aggregate		Aggregate		Less Aggregate
(In thousands)	Fair Value		Unpaid Principal		Unpaid Principal
Loans Held for Sale	$	13,191	$	12,914	$	277

The changes in fair value of loans held for sale for the three and six months ended June 30, 2016, were gains of $369 thousand and $584 thousand, respectively. The changes in fair value of loans held for sale for the three and six months ended June 30, 2015, were losses of $285 thousand and $71 thousand, respectively. The changes in fair value are included in mortgage banking income in the Consolidated Statements of Income.

Derivative Assets and Liabilities

Interest Rate Swap. The valuation of the Company’s interest rate swaps is obtained from a third-party pricing service and is determined using a discounted cash flow analysis on the expected cash flows of each derivative. The pricing analysis is based on observable inputs for the contractual terms of the derivatives, including the period to maturity and interest rate curves.

The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings.

Although the Company has determined that the majority of the inputs used to value its interest rate derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. However, as of June 30, 2016, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.

Interest Rate Lock Commitments. The Company enters into IRLCs for residential mortgage loans, which commit the Company to lend funds to a potential borrower at a specific interest rate and within a specified period of time.  The estimated fair value of commitments to originate residential mortgage loans for sale is based on quoted prices for similar loans in active markets. However, this value is adjusted by a factor which considers the likelihood that the loan in a lock position will ultimately close, and by the non-refundable costs of originating the loan. The closing ratio is derived from the Bank’s internal data and is adjusted using significant management judgment. The costs to originate are primarily based on the Company’s internal commission rates that are not observable. As such, IRLCs are classified as Level 3 measurements.

Forward Sale Commitments. The Company utilizes forward sale commitments as economic hedges against potential changes in the values of the IRLCs and loans originated for sale. To Be Announced (“TBA”) mortgage-backed securities forward commitment sales are used as the hedging instrument, are classified as Level 1, and consist of publicly-traded debt securities for which identical fair values can be obtained through quoted market prices in active exchange markets. The fair values of the Company’s best efforts and mandatory delivery loan sale commitments are determined similarly to the IRLCs using quoted prices in the market place that are observable.  However, costs to originate and closing ratios included in the calculation are internally generated and are based on management’s judgment and prior experience, which are considered factors that are not observable. As such, best efforts and mandatory forward commitments are classified as Level 3 measurements.

The table below presents the changes in Level 3 assets and liabilities that were measured at fair value on a recurring basis for the three and six months ended June 30, 2016 and 2015.

	Assets (Liabilities)
				Securities			Interest Rate
	Trading			Available			Lock			Forward
(In thousands)	Security			for Sale			Commitments			Commitments
Three Months Ended June 30, 2016
March 31, 2016	$	14,474		$	—		$	802		$	(143	)
Unrealized gain, net recognized in other non-interest income	153			—			1,711			—
Unrealized gain included in accumulated other comprehensive loss	—			—			—			(46		)
Paydown of trading security	(148		)	—			—			—
Transfers to held for sale loans	—			—			(1,254		)	—
June 30, 2016	$	14,479		$	—		$	1,259		$	(189	)
Six Months Ended June 30, 2016
December 31, 2015	$	14,189		$	708		$	323		$	9
Unrealized (loss) gain, net recognized in other non-interest income	585			—			2,917			—
Transfers to Level 2	—			(708		)	—			(198		)
Paydown of trading security	(295		)	—			—			—
Transfers to held for sale loans	—			—			(1,981		)	—
June 30, 2016	$	14,479		$	—		$	1,259		$	(189	)
Unrealized gains (losses) relating to instruments still held at June 30, 2016	$	2,790		$	—		$	1,259		$	(189	)

	Assets (Liabilities)
				Securities			Interest Rate
	Trading			Available			Lock			Forward
(In thousands)	Security			for Sale			Commitments			Commitments
Three Months Ended June 30, 2015
March 31, 2015	$	14,970		$	719		$	977		$	(93	)
Sale of Marketable Equity Security	—			—			—			—
Unrealized (loss) gain, net recognized in other non-interest income	(451		)	—			941			—
Unrealized gain included in accumulated other comprehensive loss	—			54			—			143
Paydown of trading account security	(141		)	—			—			—
Transfers to held for sale loans	—			—			(1,536		)	—
June 30, 2015	$	14,378		$	773		$	382		$	50
Six Months Ended June 30, 2015
December 31, 2014	$	14,909		$	2,326		$	625		$	(93	)
Sale of Marketable Equity Security	—			(1,327		)	—			—
Unrealized (loss) gain, net recognized in other non-interest income	(248		)	—			2,671			—
Unrealized gain included in accumulated other comprehensive loss	—			(226		)	—			143
Paydown of trading account security	(283		)	—			—			—
Transfers to held for sale loans	—			—			(2,914		)	—
June 30, 2015	$	14,378		$	773		$	382		$	50
Unrealized gains (losses) relating to instruments still held at June 30, 2015	$	2,106		$	3		$	382		$	50

Quantitative information about the significant unobservable inputs within Level 3 recurring assets and liabilities is as follows:

	Fair Value					Significant Unobservable Input
(In thousands)	June 30, 2016			Valuation Techniques	Unobservable Inputs	Value
Assets (Liabilities)
Trading Security	$	14,479		Discounted Cash Flow	Discount Rate	1.70		%
Forward Commitments	(189		)	Historical Trend	Closing Ratio	89.35		%
				Pricing Model	Origination Costs, per loan	$	2,500
Interest Rate Lock Commitment	1,259			Historical Trend	Closing Ratio	89.35		%
				Pricing Model	Origination Costs, per loan	$	2,500
Total	$	15,549

	Fair Value				Significant Unobservable Input
(In thousands)	December 31, 2015		Valuation Techniques	Unobservable Inputs	Value
Assets (Liabilities)
Trading Security	$	14,189	Discounted Cash Flow	Discount Rate	2.49		%
AFS Securities	708		Pricing Model	Median Peer Price/Tangible Book Value Percentage Multiple	88.52		%
Forward Commitments	9		Historical Trend	Closing Ratio	92.57		%
			Pricing Model	Origination Costs, per loan	$	2,500
Interest Rate Lock Commitment	323		Historical Trend	Closing Ratio	92.57		%
			Pricing Model	Origination Costs, per loan	$	2,500
Total	$	15,229

Non-Recurring Fair Value Measurements

The Company is required, on a non-recurring basis, to adjust the carrying value or provide valuation allowances for certain assets using fair value measurements in accordance with GAAP. The following is a summary of applicable non-recurring fair value measurements. There are no liabilities measured at fair value on a non-recurring basis.

	June 30, 2016		December 31, 2015		Three months ended June 30, 2016			Six months ended June 30, 2016			Fair Value Measurement Date as of June 30, 2016
	Level 3		Level 3		Total			Total			Level 3
(In thousands)	Inputs		Inputs		Gains (Losses)			Gains (Losses)			Inputs
Assets
Impaired loans	$	22,546	$	11,657	$	(180	)	$	10,889		June 2016
Capitalized servicing rights	9,498		5,187		—			—			May 2016
Other real estate owned	595		1,725		(3		)	(56		)	Jan. 2015 - March 2016
Total	$	32,639	$	18,569	$	(183	)	$	10,833

Quantitative information about the significant unobservable inputs within Level 3 non-recurring assets is as follows:

	Fair Value
(in thousands)	June 30, 2016		Valuation Techniques	Unobservable Inputs	Range (Weighted Average) (a)
Assets
Impaired loans	$	22,546	Fair value of collateral	Loss severity	0.23% to 40.66% (5.24%)
				Appraised value	$5.0 to $3,513.9 ($1365.5)
Capitalized servicing rights	9,498		Discounted cash flow	Constant prepayment rate (CPR)	2.36% to 15.23% (9.66%)
				Discount rate	7.74% to 14.00% (11.30%)
Other real estate owned	595		Fair value of collateral	Appraised value	$46 to $1200.0 ($1,087.4)
Total	$	32,639

(a)  Where dollar amounts are disclosed, the amounts represent the lowest and highest fair value of the respective assets in the population except for adjustments for market/property conditions, which represents the range of adjustments to individuals properties.

	Fair Value
(in thousands)	December 31, 2015		Valuation Techniques	Unobservable Inputs	Range (Weighted Average) (a)
Assets
Impaired loans	$	11,657	Fair value of collateral	Loss severity	.05% to 29.50% (7.55%)
				Appraised value	$46.3 to $1962.0 ($999.7)
Capitalized servicing rights	5,187		Discounted cash flow	Constant prepayment rate (CPR)	7.17% to 12.06% (10.02%)
				Discount rate	10.00% to 15.00 (10.88%)
Other real estate owned	1,725		Fair value of collateral	Appraised value	$39 to $1,200.0 ($919.9)
Total	$	18,569

(a)  Where dollar amounts are disclosed, the amounts represent the lowest and highest fair value of the respective assets in the population except for adjustments for market/property conditions, which represents the range of adjustments to individuals properties.

There were no Level 1 or Level 2 nonrecurring fair value measurements for the periods ended June 30, 2016 and December 31, 2015.

Impaired Loans. Loans are generally not recorded at fair value on a recurring basis. Periodically, the Company records non-recurring adjustments to the carrying value of loans based on fair value measurements for partial charge-offs of the uncollectible portions of those loans. Non-recurring adjustments can also include certain impairment amounts for collateral-dependent loans calculated when establishing the allowance for credit losses. Such amounts are generally based on the fair value of the underlying collateral supporting the loan and, as a result, the carrying value of the loan less the calculated valuation amount does not necessarily represent the fair value of the loan. Real estate collateral is typically valued using appraisals or other indications of value based on recent comparable sales of similar properties or assumptions generally observable in the marketplace. However, the choice of observable data is subject to significant judgment, and there are often adjustments based on judgment in order to make observable data comparable and to consider the impact of time, the condition of properties, interest rates, and other market factors on current values. Additionally, commercial real estate appraisals frequently involve discounting of projected cash flows, which relies inherently on unobservable data. Therefore, nonrecurring fair value measurement adjustments that relate to real estate collateral have generally been classified as Level 3. Estimates of fair value for other collateral that supports commercial loans are generally based on assumptions not observable in the marketplace and therefore such valuations have been classified as Level 3. 

Capitalized loan servicing rights.  A loan servicing right asset represents the amount by which the present value of the estimated future net cash flows to be received from servicing loans exceed adequate compensation for performing the servicing. The fair value of servicing rights is estimated using a present value cash flow model. The most important assumptions used in the valuation model are the anticipated rate of the loan prepayments and discount rates. Adjustments are only recorded when the discounted cash flows derived from the valuation model are less than the carrying value of the asset. Although some assumptions in determining fair value are based on standards used by market participants, some are based on unobservable inputs and therefore are classified in Level 3 of the valuation hierarchy.

Other real estate owned (“OREO”). OREO results from the foreclosure process on residential or commercial loans issued by the Bank. Upon assuming the real estate, the Company records the property at the fair value of the asset less the estimated sales costs. Thereafter, OREO properties are recorded at the lower of cost or fair value less the estimated sales costs. OREO fair values are primarily determined based on Level 3 data including sales comparables and appraisals.

Summary of Estimated Fair Values of Financial Instruments

The estimated fair values, and related carrying amounts, of the Company’s financial instruments follow. Certain financial instruments and all non-financial instruments are excluded from disclosure requirements. Accordingly, the aggregate fair value amounts presented herein may not necessarily represent the underlying fair value of the Company.

	June 30, 2016
	Carrying		Fair
(In thousands)	Amount		Value		Level 1		Level 2		Level 3
Financial Assets
Cash and cash equivalents	$	74,579	$	74,579	$	74,579	$	—	$	—
Trading security	14,479		14,479		—		—		14,479
Securities available for sale	1,073,370		1,073,370		47,313		1,026,057		—
Securities held to maturity	132,010		141,544		—		—		141,544
FHLB bank stock and restricted securities	68,242		68,242		—		68,242		—
Net loans	5,958,904		6,051,886		—		—		6,051,886
Loans held for sale	22,450		22,450		—		22,450		—
Accrued interest receivable	22,255		22,255		—		22,255		—
Cash surrender value of bank-owned life insurance policies	127,000		127,000		—		127,000		—
Derivative assets	39,279		39,279		—		38,020		1,259
Assets held for sale	815		815		—		815		—
Financial Liabilities
Total deposits	$	5,656,724	$	5,661,984	$	—	$	5,661,984	$	—
Short-term debt	1,110,320		1,110,322		—		1,110,322		—
Long-term Federal Home Loan Bank advances	120,844		121,212		—		121,212		—
Subordinated borrowings	89,072		95,253		—		95,253		—
Derivative liabilities	56,219		56,219		680		55,350		189

	December 31, 2015
	Carrying		Fair
(In thousands)	Amount		Value		Level 1		Level 2		Level 3
Financial Assets
Cash and cash equivalents	$	103,562	$	103,562	$	103,562	$	—	$	—
Trading security	14,189		14,189		—		—		14,189
Securities available for sale	1,154,457		1,154,457		32,925		1,120,824		708
Securities held to maturity	131,652		136,904		—		—		136,904
FHLB bank stock and restricted securities	71,018		71,018		—		71,018		—
Net loans	5,685,928		5,727,570		—		—		5,727,570
Loans held for sale	13,191		13,191		—		13,191		—
Accrued interest receivable	20,940		20,940		—		20,940		—
Cash surrender value of bank-owned life insurance policies	125,233		125,233		—		125,233		—
Derivative assets	17,507		17,507		45		17,130		332
Assets held for sale	278		278		—		278		—
Financial Liabilities
Total deposits	$	5,589,135	$	5,582,835	$	—	$	5,582,835	$	—
Short-term debt	1,071,200		1,071,044		—		1,071,044		—
Long-term Federal Home Loan Bank advances	103,135		103,397		—		103,397		—
Subordinated borrowings	89,812		93,291		—		93,291		—
Derivative liabilities	28,181		28,181		—		28,181		—

Other than as discussed above, the following methods and assumptions were used by management to estimate the fair value of significant classes of financial instruments for which it is practicable to estimate that value.

Cash and cash equivalents. Carrying value is assumed to represent fair value for cash and cash equivalents that have original maturities of ninety days or less.

FHLB bank stock and restricted securities. Carrying value approximates fair value based on the redemption provisions of the issuers.

Cash surrender value of life insurance policies. Carrying value approximates fair value.

Loans, net. The carrying value of the loans in the loan portfolio is based on the cash flows of the loans discounted over their respective loan origination rates. The origination rates are adjusted for substandard and special mention loans to factor the impact of declines in the loan’s credit standing. The fair value of the loans is estimated by discounting future cash flows using the current interest rates at which similar loans with similar terms would be made to borrowers of similar credit quality.

Accrued interest receivable. Carrying value approximates fair value.

Deposits. The fair value of demand, non-interest bearing checking, savings and money market deposits is determined as the amount payable on demand at the reporting date. The fair value of time deposits is estimated by discounting the estimated future cash flows using market rates offered for deposits of similar remaining maturities.

Borrowed funds. The fair value of borrowed funds is estimated by discounting the future cash flows using market rates for similar borrowings.  Such funds include all categories of debt and debentures in the table above.

Subordinated borrowings. The Company utilizes a pricing service along with internal models to estimate the valuation of its junior subordinated debentures. The junior subordinated debentures re-price every ninety days.

Off-balance-sheet financial instruments. Off-balance-sheet financial instruments include standby letters of credit and other financial guarantees and commitments considered immaterial to the Company’s financial statements.

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NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES

6 Months Ended

Jun. 30, 2016

Banking and Thrift, Interest [Abstract]

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES

Presented below is net interest income after provision for loan losses for the three and six months ended June 30, 2016 and 2015, respectively.

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2016		2015		2016		2015
Net interest income	$	57,441	$	52,637	$	115,138	$	98,130
Provision for loan losses	4,522		4,204		8,528		8,055
Net interest income after provision for loan losses	$	52,919	$	48,433	$	106,610	$	90,075

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SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2016

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

On June 24, 2016, the Company entered into an agreement and plan of merger with First Choice Bank ("First Choice"), the parent company of First Choice Loan Services ("FCLS"), pursuant to which First Choice will merge with and into Berkshire Bank in a transaction to be accounted for as a business combination. It is expected that FCLS will become an operating subsidiary of the Bank. Headquartered in Lawrenceville, New Jersey, First Choice had $1.1 billion in assets as of June 30, 2016 (unaudited) and operates eight banking offices providing a range of banking services in central N.J. and greater Philadelphia.

If the Merger is completed, each outstanding share of First Choice Bank common stock will be converted into the right to receive 0.5773 shares of the Company's common stock. In addition, each outstanding share of First Choice preferred stock will be converted into the right to receive such number of the Company's common stock equal to the number of shares of First Choice common stock issuable upon the conversion of the First Choice preferred stock multiplied by 0.5773.

The transaction is subject to closing conditions, including the receipt of regulatory approvals and approval by the shareholders of First Choice. The merger is currently expected to be completed in the fourth quarter of 2016. If the merger is not consummated under specified circumstances, First Choice has agreed to pay the Company a termination fee of $4.1 million.

This agreement and plan of merger had no significant effect on the Company’s financial statements for the periods presented.

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BASIS OF PRESENTATION (Policies)

6 Months Ended

Jun. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

The consolidated financial statements (the “financial statements”) of Berkshire Hills Bancorp, Inc. and its subsidiaries (the “Company” or “Berkshire”) have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The Company is a Delaware corporation and the holding company for Berkshire Bank (the “Bank”), a Massachusetts-chartered trust company headquartered in Pittsfield, Massachusetts, and Berkshire Insurance Group, Inc. (“Berkshire Insurance Group” or “BIG”). These financial statements include the accounts of the Company, its wholly-owned subsidiaries and the Bank’s consolidated subsidiaries. In consolidation, all significant intercompany accounts and transactions are eliminated. The results of operations of companies or assets acquired are included only from the dates of acquisition. All material wholly-owned and majority-owned subsidiaries are consolidated unless GAAP requires otherwise.

In addition, these interim financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X, and accordingly, certain information and footnote disclosures normally included in financial statements prepared according to U.S. GAAP have been omitted.

The results for any interim period are not necessarily indicative of results for the full year. These consolidated financial statements should be read in conjunction with the audited financial statements and note disclosures for Berkshire Hills Bancorp, Inc. (the “Company”) previously filed with the Securities and Exchange Commission in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. In management's opinion, all adjustments necessary for a fair statement are reflected in the interim periods presented.

Recently Adopted Accounting Standards and Future Application of Accounting Pronouncements

Recently Adopted Accounting Principles

Effective January 1, 2016, the following new accounting guidance was adopted by the Company:

• ASU No. 2015-02, Consolidation (Topic 810) - Amendments to the Consolidation Analysis;

• ASU No. 2015-03, Interest-Imputation of Interest (Subtopic 835-30) - Simplifying the Presentation of Debt Issuance Costs;

• ASU No. 2015-05, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement; and

• ASU No. 2015-16, Business Combinations (Topic 805) - Simplifying the Accounting for Measurement - Period Adjustments.

The adoption of these accounting standards did not have a material impact on the Company's financial statements.

In March 2016, the FASB issued ASU No. 2016-09, “Improvement to Employee Share-Based Payment Accounting”. This ASU contains targeted amendments to the accounting for shared based payment transactions, including income tax consequences for awards, classification of awards as either equity or liabilities, and classification of activity on the statement of cash flows. Specifically, some of the requirements under the amendments include: (1) excess tax benefits and/or tax deficiencies, determined as the difference between compensation cost recognized for financial reporting purposes and the deduction for tax, be recognized in the income statement as income tax expense or benefit in the period in which they occur, removing historical equity treatment; (2) excess tax benefits are no longer separately classified as a financing activity but rather should be classified with other income tax cash flows as an operating activity on the statement of cash flows; (3) cash paid by an employer when withholding shares for tax withholding purposes should be classified as a financing activity. Additionally, regarding forfeitures, this guidance permits a company to make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest (current GAAP) or account for forfeitures when they occur. ASU No. 2016-09 is effective for annual periods beginning after December 15, 2016. The Company adopted ASU No. 2016-09 in April 2016 and the adoption of this accounting standard did not have a material impact on the Company's consolidated financial statements. The Company chose a modified retrospective approach and a policy election to account for forfeitures when they occur. This change resulted in a cumulative adjustment immaterial to all periods presented.

Future Application of Accounting Pronouncements

In May 2014, the FASB issued ASU No. 2014-09 related to the recognition of revenue from contracts with customers. The new revenue pronouncement creates a single source of revenue guidance for all companies in all industries and is more principles based than current revenue guidance. The pronouncement provides a five-step model for a company to recognize revenue when it transfers control of goods or services to customers at an amount that reflects the consideration to which it expects to be entitled in exchange for those goods or services. The five steps are (1) identify the contract with the customer, (2) identify the separate performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the separate performance obligations and (5) recognize revenue when each performance obligation is satisfied. The standard is effective for public entities for interim and annual reporting periods beginning after December 15, 2016; early adoption is not permitted. However, in August 2015, Accounting Standards Update No. 2015-14, “Deferral of the Effective Date” (“ASU 2015-14”) was issued and delayed the effective date of ASU 2014-09 to annual and interim periods in fiscal years beginning after December 15, 2017. Early adoption is permitted, but not before the original effective date (i.e., interim and annual reporting periods beginning after December 15, 2016). For financial reporting purposes, the standard allows for either full retrospective adoption, meaning the standard is applied to all of the periods presented, or modified retrospective adoption, meaning the standard is applied only to the most current period presented in the financial statements with the cumulative effect of initially applying the standard recognized at the date of initial application.

In March, April and May 2016, the FASB issued ASU No. 2016-08, “Principal versus Agent Considerations,” ASU No. 2016-10, “Identifying Performance Obligations and Licensing,” and ASU 2016-12, “Narrow-Scope Improvements and Practical Expedients,” respectfully. The updates are not intended to change the core principles of the standard; however, they attempt to clarify important aspects of the guidance and improve its operability. The amendments have the same effective date and transition requirements as the new revenue standard. The Company is currently evaluating the provisions of ASU No. 2014-09, and will be closely monitoring developments and additional guidance to determine the potential impact the new standard will have on the Company's consolidated financial statements.

In January 2016, the FASB issued ASU No. 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities.” This ASU requires an entity to: i) measure equity investments at fair value through net income, with certain exceptions; (ii) present in other comprehensive income the changes in instrument-specific credit risk for financial liabilities measured using the fair value option; (iii) present financial assets and financial liabilities by measurement category and form of financial asset; (iv) calculate the fair value of financial instruments for disclosure purposes based on an exit price and; (v) assess a valuation allowance on deferred tax assets related to unrealized losses of AFS debt securities in combination with other deferred tax assets. The guidance provides an election to subsequently measure certain nonmarketable equity investments at cost less any impairment and adjusted for certain observable price changes. The guidance also requires a qualitative impairment assessment of such equity investments and amends certain fair value disclosure requirements. The guidance is effective for annual periods beginning after December 15, 2017. Early adoption is only permitted for the provision related to instrument specific credit risk. The Company is currently evaluating the impact of the new standard on the Company's consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, “Leases”. The new pronouncement improves the transparency and comparability of financial reporting around leasing transactions and more closely aligns accounting for leases with the recently issued International Financial Reporting Standard.  The pronouncement affects all entities that are participants to leasing agreements. From a lessee accounting perspective, the ASU requires a lessee to recognize assets and liabilities on the balance sheet for operating leases and changes many key definitions, including the definition of a lease. The ASU includes a short-term lease exception for leases with a term of twelve months or less, in which a lessee can make an accounting policy election not to recognize lease assets and lease liabilities. Lessees will continue to differentiate between finance leases (previously referred to as capital leases) and operating leases, using classification criteria that are substantially similar to the previous guidance. For lessees, the recognition, measurement, and presentation of expenses and cash flows arising from a lease have not significantly changed from previous GAAP. From a lessor accounting perspective, the guidance is largely unchanged, except for targeted improvements to align with new terminology under lessee accounting and with the updated revenue recognition guidance in Topic 606. For sale-leaseback transactions, for a sale to occur the transfer must meet the sale criteria under the new revenue standard, ASC 606. Entities will not be required to reassess transactions previously accounted under then existing guidance.

Additionally, the ASU includes additional quantitative and qualitative disclosures required by lessees and lessors to help users better understand the amount, timing, and uncertainty of cash flows arising from leases. ASU No. 2016-02 is effective for fiscal years beginning after December 31, 2018, and interim periods within those fiscal years. Lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply as well as transition guidance specific to nonstandard leasing transactions. The Company is currently evaluating the provision of the ASU No. 2016-02 to determine the potential impact the new standard will have on the the Company's consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-05, “Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships”. This ASU clarifies that changes in the counterparty to a derivative instrument designated as a hedge do notalone require it to be de-designated and therefore discontinue the application of hedge accounting. Companies are still required to evaluate whether it is probable that a counterparty will perform under the contract as part of the ongoing effectiveness assessment for hedge accounting. The new guidance is effective for annual periods beginning after December 15, 2016 and entities may adopt on a prospective or modified retrospective basis. The adoption of this pronouncement is not expected to have a material impact on the Company's consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-06, “Contingent Put and Call Options in Debt Instruments” clarifying the assessment of whether contingent call (put) options that can accelerate the payment of principal on debt instruments are clearly and closely related to the economic characteristics and risks of their debt hosts, a criteria in assessing whether to bifurcate an embedded derivative.  The new pronouncement clarifies the exercise contingency and the event triggering the contingency does not need to be evaluated in the clearly and closely analysis relative to interest rates or credit risks. Rather, the call or put would be evaluated as a derivative regardless of the exercise contingency. Further, if an entity is no longer required to bifurcate aput or call option per the new guidance, the entity has a one-time option to irrevocably elect to measure that debt instrument in its entirety at fair value with changes in fair value recognized in earnings. ASU No. 2016-06 is effective for annual periods beginning after December 15, 2016 and early adoption is permitted. The ASU should be applied using the modified retrospective basis to existing instruments as of the beginning of the annual period of adoption. The adoption of this pronouncement is not expected to have a material impact on the Company's consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-07 “Simplifying the Transition to the Equity Method of Accounting” which eliminates the requirement to retroactively adjust an investment that becomes subject to the equity method of accounting as a result of an increase ownership interest or degree of influence.  Alternatively, an investor entity adds the cost of acquiring the additional interest in the investee to the current basis of the investor’s previously held interest and adopts the equity method of accounting prospectively as of the qualifying date; no retroactive adjustment is required. Additionally, ASU No. 2016-07 specifies that when an available-for-sale equity security becomes qualified for the equity method of accounting, a company should recognize the unrealized holding gain or loss in accumulated other comprehensive income through earnings at the date the investment becomes qualified for use of the equity method. This guidance is effective for all entities for annual periods beginning after December 15, 2016, with early adoption permitted on a prospective basis. The adoption of this pronouncement is not expected to have a material impact on the Company's consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, “Measurement of Credit Losses on Financial Instruments.” This ASU improves financial reporting by requiring timelier recording of credit losses on loans and other financial instruments. The ASU requires companies to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Forward-looking information will now be used in credit loss estimates. The ASU requires enhanced disclosures to provide better understanding surrounding significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of a company’s portfolio. These disclosures include qualitative and quantitative requirements that provide additional information about the amounts recorded in the financial statements. Additionally, the ASU amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. Most debt instruments will require a cumulative-effect adjustment to retained earnings on the statement of financial position as of the beginning of the first reporting period in which the guidance is adopted (modified retrospective approach). However, there is instrument-specific transition guidance. ASU No. 2016-13 is effective for interim and annual periods beginning after December 15, 2019. Early application will be permitted for interim and annual periods beginning after December 15, 2018. The Company is evaluating the provisions of ASU No. 2016-13, and will closely monitor developments and additional guidance to determine the potential impact on the Company's consolidated financial statements.

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ACQUISITION (Tables)

6 Months Ended

Jun. 30, 2016

Business Combinations [Abstract]

Summary of Consideration Paid, and Fair Values of the Assets Acquired and Liabilities Assumed

The following table provides a summary of the assets acquired and liabilities assumed and the associated fair value adjustments as recorded by the Company at acquisition:

(in thousands)	As Acquired			Fair Value Adjustments				As Recorded at Acquisition
Consideration paid:
Company common stock issued to certain 44 Business Capital shareholders (44,840 shares)								$	1,217
Cash paid to 44 Business Capital shareholders and Parke								55,649
Total consideration paid								$	56,866
Recognized amounts of identifiable assets acquired and liabilities assumed, at fair value:
Cash and short-term investments	$	107		$	—			$	107
Loans	42,627			(5,777		)	(a)	36,850
Premises and equipment	69			(36		)	(b)	$	33
Other assets	3,076			639			(c)	3,715
Other liabilities	(108		)	—				$	(108	)
Total identifiable net assets	$	45,771		$	(5,174	)		$	40,597
Goodwill								$	16,269

Explanation of Certain Fair Value Adjustments

(a) The adjustment represents the write down of the book value of loans to their estimated fair value based on current interest rates and expected cash flows, which includes an estimate of expected loan loss inherent in the portfolio. Loans that met the criteria and are being accounted for in accordance with ASC 310-30 had a book value of $6.3 million and have a fair value $2.6 million. Non-impaired loans accounted for under ASC 310-10 had a book value of $36.4 million and have a fair value of $34.3 million. ASC 310-30 loans have a $708 thousand fair value adjustment discount that is accretable in earnings over an average estimated six-year life using the effective yield as determined on the date of acquisition. The effective yield is periodically adjusted for changes in expected flows. ASC 310-10 loans have a $2.1 million fair value adjustment discount that is amortized into income over the remaining term of the loans using the effective interest method.

(b) The fair value of the equipment was assumed to approximate the net carrying value based on overall condition and age. The adjustment represents the immediate expensing of equipment not meeting the thresholds for capitalization in accordance with Company policy. The recorded amount will be depreciated over the remaining estimated economic lives of the assets.

(c) The adjustment represents the fair value write up of book value of the loan servicing right asset to its estimated fair value based on current interest rates and expected cash flows, which includes an estimate of cost of service and conditional prepayment rates applied to the underlying unpaid loan pool balance over the remaining life of the loans. The balance includes accrued interest of $221 thousand.

Schedule of Acquired Loan Portfolio

Information about the acquired loan portfolio subject to ASC 310-30 as of April 29, 2016 is, as follows (in thousands):

	ASC 310-30 Loans
Gross contractual receivable amounts at acquisition	$	6,265
Contractual cash flows not expected to be collected (nonaccretable discount)	(3,000		)
Expected cash flows at acquisition	3,265
Interest component of expected cash flows (accretable discount)	(708		)
Fair value of acquired loans	$	2,557

Pro Forma Financial Information

Information in the following table is shown in thousands, except earnings per share:

	Pro Forma (unaudited)
	Six Months Ended June 30,
	2016		2015
Net interest income	$	115,269	$	98,417
Non-interest income	32,338		31,650
Net income	32,652		19,417
Pro forma earnings per share:
Basic	$	1.07	$	0.73
Diluted	$	1.06	$	0.73

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SECURITIES AVAILABLE FOR SALE AND HELD TO MATURITY (Tables)

6 Months Ended

Jun. 30, 2016

Investments, Debt and Equity Securities [Abstract]

Summary of securities available for sale ("AFS") and held to maturity

The following is a summary of securities available for sale and held to maturity:

(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
June 30, 2016
Securities available for sale
Debt securities:
Municipal bonds and obligations	$	103,645	$	7,945	$	—		$	111,590
Agency collateralized mortgage obligations	662,505		17,125		(124		)	679,506
Agency mortgage-backed securities	108,056		1,587		(30		)	109,613
Agency commercial mortgage-backed securities	62,352		899		—			63,251
Corporate bonds	46,874		196		(1,367		)	45,703
Trust preferred securities	11,599		192		(52		)	11,739
Other bonds and obligations	3,164		58		—			3,222
Total debt securities	998,195		28,002		(1,573		)	1,024,624
Marketable equity securities	42,470		7,557		(1,281		)	48,746
Total securities available for sale	1,040,665		35,559		(2,854		)	1,073,370
Securities held to maturity
Municipal bonds and obligations	95,663		7,337		—			103,000
Agency collateralized mortgage obligations	67		8		—			75
Tax advantaged economic development bonds	35,954		2,189		—			38,143
Other bonds and obligations	326		—		—			326
Total securities held to maturity	132,010		9,534		—			141,544
Total	$	1,172,675	$	45,093	$	(2,854	)	$	1,214,914
December 31, 2015
Securities available for sale
Debt securities:
Municipal bonds and obligations	$	99,922	$	4,763	$	(124	)	$	104,561
Agency collateralized mortgage obligations	833,633		4,957		(5,554		)	833,036
Agency mortgage-backed securities	127,274		542		(987		)	126,829
Agency commercial mortgage-backed securities	—		—		—			—
Corporate bonds	42,849		—		(1,827		)	41,022
Trust preferred securities	11,719		182		—			11,901
Other bonds and obligations	3,175		—		(34		)	3,141
Total debt securities	1,118,572		10,444		(8,526		)	1,120,490
Marketable equity securities	30,522		5,331		(1,886		)	33,967
Total securities available for sale	1,149,094		15,775		(10,412		)	1,154,457
Securities held to maturity
Municipal bonds and obligations	94,642		3,359		(34		)	97,967
Agency collateralized mortgage obligations	68		3		—			71
Tax advantaged economic development bonds	36,613		1,924		—			38,537
Other bonds and obligations	329		—		—			329
Total securities held to maturity	131,652		5,286		(34		)	136,904
Total	$	1,280,746	$	21,061	$	(10,446	)	$	1,291,361

Schedule of amortized cost and estimated fair value of available for sale (AFS) and held to maturity (HTM) securities, segregated by contractual maturity

The amortized cost and estimated fair value of available for sale (“AFS”) and held to maturity (“HTM”) securities, segregated by contractual maturity at June 30, 2016 are presented below. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Mortgage-backed securities are shown in total, as their maturities are highly variable. Equity securities have no maturity and are also shown in total.

	Available for sale				Held to maturity
	Amortized		Fair		Amortized		Fair
(In thousands)	Cost		Value		Cost		Value
Within 1 year	$	—	$	—	$	2,799	$	2,810
Over 1 year to 5 years	4,102		4,180		17,139		18,186
Over 5 years to 10 years	32,730		33,345		13,821		14,421
Over 10 years	128,450		134,729		98,184		106,052
Total bonds and obligations	165,282		172,254		131,943		141,469
Marketable equity securities	42,470		48,746		—		—
Mortgage-backed securities	832,913		852,370		67		75
Total	$	1,040,665	$	1,073,370	$	132,010	$	141,544

Schedule of securities with unrealized losses, segregated by the duration of their continuous unrealized loss positions

Securities with unrealized losses, segregated by the duration of their continuous unrealized loss positions, are summarized as follows:

	Less Than Twelve Months				Over Twelve Months				Total
	Gross				Gross				Gross
	Unrealized		Fair		Unrealized		Fair		Unrealized		Fair
(In thousands)	Losses		Value		Losses		Value		Losses		Value
June 30, 2016
Securities available for sale
Debt securities:
Agency collateralized mortgage obligations	$	4	$	8,824	$	120	$	14,854	$	124	$	23,678
Agency mortgage-backed securities	15		4,053		15		734		30		4,787
Corporate bonds	1,160		22,536		207		4,423		1,367		26,959
Trust preferred securities	52		1,204		—		—		52		1,204
Total debt securities	1,231		36,617		342		20,011		1,573		56,628
Marketable equity securities	203		3,851		1,078		7,063		1,281		10,914
Total securities available for sale	1,434		40,468		1,420		27,074		2,854		67,542
Total	$	1,434	$	40,468	$	1,420	$	27,074	$	2,854	$	67,542
December 31, 2015
Securities available for sale
Debt securities:
Municipal bonds and obligations	$	9	$	1,587	$	115	$	3,400	$	124	$	4,987
Agency collateralized mortgage obligations	2,958		304,907		2,596		136,988		5,554		441,895
Agency mortgage-backed securities	306		34,543		681		35,522		987		70,065
Corporate bonds	30		6,934		1,796		21,587		1,826		28,521
Trust preferred securities	1		1,269		—		—		1		1,269
Other bonds and obligations	—		108		34		3,032		34		3,140
Total debt securities	3,304		349,348		5,222		200,529		8,526		549,877
Marketable equity securities	534		2,908		1,352		5,729		1,886		8,637
Total securities available for sale	3,838		352,256		6,574		206,258		10,412		558,514
Securities held to maturity
Tax advantaged economic development bonds	—		—		34		2,143		34		2,143
Total securities held to maturity	—		—		34		2,143		34		2,143
Total	$	3,838	$	352,256	$	6,608	$	208,401	$	10,446	$	560,657

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LOANS (Tables)

6 Months Ended

Jun. 30, 2016

Receivables [Abstract]

Schedule of Loans

The following is a summary of total loans:

	June 30, 2016						December 31, 2015
(In thousands)	Business Activities Loans		Acquired Loans		Total		Business Activities Loans		Acquired Loans		Total
Commercial real estate:
Construction	$	218,607	$	30,428	$	249,035	$	210,196	$	43,474	$	253,670
Single and multi-family	244,949		42,171		287,120		214,823		36,783		251,606
Other commercial real estate	1,354,086		347,341		1,701,427		1,209,008		345,483		1,554,491
Total commercial real estate	1,817,642		419,940		2,237,582		1,634,027		425,740		2,059,767
Commercial and industrial loans:
Asset based lending	325,476		—		325,476		331,253		—		331,253
Other commercial and industrial loans	527,612		181,471		709,083		495,979		221,031		717,010
Total commercial and industrial loans	853,088		181,471		1,034,559		827,232		221,031		1,048,263
Total commercial loans	2,670,730		601,411		3,272,141		2,461,259		646,771		3,108,030
Residential mortgages:
1-4 family	1,519,067		302,702		1,821,769		1,454,233		332,747		1,786,980
Construction	20,965		866		21,831		26,704		1,351		28,055
Total residential mortgages	1,540,032		303,568		1,843,600		1,480,937		334,098		1,815,035
Consumer loans:
Home equity	310,565		49,346		359,911		307,159		53,446		360,605
Auto and other	414,486		110,163		524,649		311,328		130,238		441,566
Total consumer loans	725,051		159,509		884,560		618,487		183,684		802,171
Total loans	$	4,935,813	$	1,064,488	$	6,000,301	$	4,560,683	$	1,164,553	$	5,725,236

Schedule of Activity in the Accretable Yield for the Acquired Loan Portfolio that Falls Under the Review of ASC 310-30, Accounting for Certain Loans or Debt Securities Acquired in a Transfer

The following table summarizes activity in the accretable yield for the acquired loan portfolio that falls under the purview of ASC 310-30, Accounting for Certain Loans or Debt Securities Acquired in a Transfer:

	Three Months Ended June 30,
(In thousands)	2016			2015
Balance at beginning of period	$	6,464		$	3,431
Acquisitions	708			4,178
Reclassification from nonaccretable difference for loans with improved cash flows	522			405
Reclassification to TDR	—			—
Accretion	(1,481		)	(1,474		)
Balance at end of period	$	6,213		$	6,540
	Six Months Ended June 30,
(In thousands)	2016			2015
Balance at beginning of period	$	6,925		$	2,541
Acquisitions	708			4,178
Reclassification from nonaccretable difference for loans with improved cash flows	1,418			1,736
Reclassification to TDR	(185		)	—
Accretion	(2,653		)	(1,915		)
Balance at end of period	$	6,213		$	6,540

Summary of Past Due Loans

Business Activities Loans

(in thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Loans		Past Due > 90 days and Accruing
June 30, 2016
Commercial real estate:
Construction	$	—	$	—	$	—	$	—	$	218,607	$	218,607	$	—
Single and multi-family	11		—		518		529		244,420		$	244,949	—
Other commercial real estate	1,210		—		5,593		6,803		1,347,283		$	1,354,086	2,195
Total	1,221		—		6,111		7,332		1,810,310		1,817,642		2,195
Commercial and industrial loans:
Asset based lending	—		—		—		—		325,476		$	325,476	—
Other commercial and industrial loans	931		2,270		5,934		9,135		518,477		$	527,612	127
Total	931		2,270		5,934		9,135		843,953		853,088		127
Residential mortgages:
1-4 family	1,907		1,359		3,075		6,341		1,512,726		$	1,519,067	487
Construction	—		—		44		44		20,921		$	20,965	—
Total	1,907		1,359		3,119		6,385		1,533,647		1,540,032		487
Consumer loans:
Home equity	1,374		5		1,760		3,139		307,426		$	310,565	43
Auto and other	1,650		238		378		2,266		412,220		$	414,486	—
Total	3,024		243		2,138		5,405		719,646		725,051		43
Total	$	7,083	$	3,872	$	17,302	$	28,257	$	4,907,556	$	4,935,813	$	2,852

Business Activities Loans

(in thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Loans		Past Due > 90 days and Accruing
December 31, 2015
Commercial real estate:
Construction	$	—	$	—	$	58	$	58	$	210,138	$	210,196	$	—
Single and multi-family	65		160		70		295		214,528		214,823		—
Other commercial real estate	1,523		831		3,286		5,640		1,203,368		1,209,008		—
Total	1,588		991		3,414		5,993		1,628,034		1,634,027		—
Commercial and industrial loans:
Asset based lending	—		—		—		—		331,253		331,253		—
Other commercial and industrial loans	1,202		1,105		7,770		10,077		485,902		495,979		146
Total	1,202		1,105		7,770		10,077		817,155		827,232		146
Residential mortgages:
1-4 family	3,537		857		4,304		8,698		1,445,535		1,454,233		2,006
Construction	—		—		—		—		26,704		26,704		—
Total	3,537		857		4,304		8,698		1,472,239		1,480,937		2,006
Consumer loans:
Home equity	563		20		1,658		2,241		304,918		307,159		61
Auto and other	1,230		132		610		1,972		309,356		311,328		59
Total	1,793		152		2,268		4,213		614,274		618,487		120
Total	$	8,120	$	3,105	$	17,756	$	28,981	$	4,531,702	$	4,560,683	$	2,272

Acquired Loans

(in thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Acquired Credit Impaired		Total Loans		Past Due > 90 days and Accruing
June 30, 2016
Commercial real estate:
Construction	$	—	$	—	$	—	$	—	$	1,093	$	30,428	$	—
Single and multi-family	341		—		392		733		1,546		42,171		296
Other commercial real estate	15		205		796		1,016		12,957		347,341		—
Total	356		205		1,188		1,749		15,596		419,940		296
Commercial and industrial loans:
Asset based lending	—		—		—		—		—		—		—
Other commercial and industrial loans	598		17		1,783		2,398		2,322		181,471		—
Total	598		17		1,783		2,398		2,322		181,471		—
Residential mortgages:
1-4 family	909		327		2,285		3,521		1,565		302,702		35
Construction	—		—		—		—		—		866		—
Total	909		327		2,285		3,521		1,565		303,568		35
Consumer loans:
Home equity	79		—		743		822		116		49,346		185
Auto and other	1,314		123		830		2,267		109		110,163		107
Total	1,393		123		1,573		3,089		225		159,509		292
Total	$	3,256	$	672	$	6,829	$	10,757	$	19,708	$	1,064,488	$	623

Acquired Loans

(in thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Acquired Credit Impaired		Total Loans		Past Due > 90 days and Accruing
December 31, 2015
Commercial real estate:							—
Construction	$	—	$	—	$	—	$	—	$	1,298	$	43,474	$	—
Single and multi-family	—		176		227		403		1,380		36,783		127
Other commercial real estate	547		43		1,368		1,958		13,087		345,483		—
Total	547		219		1,595		2,361		15,765		425,740		127
Commercial and industrial loans:
Asset based lending	—		—		—		—		—		—		—
Other commercial and industrial loans	1,214		505		1,420		3,139		2,775		221,031		785
Total	1,214		505		1,420		3,139		2,775		221,031		785
Residential mortgages:
1-4 family	2,580		311		1,880		4,771		2,572		332,747		212
Construction	—		—		—		—		—		1,351		—
Total	2,580		311		1,880		4,771		2,572		334,098		212
Consumer loans:
Home equity	82		277		837		1,196		118		53,446		111
Auto and other	1,491		145		1,081		2,717		132		130,238		187
Total	1,573		422		1,918		3,913		250		183,684		298
Total	$	5,914	$	1,457	$	6,813	$	14,184	$	21,362	$	1,164,553	$	1,422

Summary of Information Pertaining to Non-Accrual Loans

The following is summary information pertaining to non-accrual loans at June 30, 2016 and December 31, 2015

	June 30, 2016						December 31, 2015
(In thousands)	Business Activities Loans		Acquired Loans (1)		Total		Business Activities Loans		Acquired Loans (2)		Total
Commercial real estate:
Construction	$	—	$	—	$	—	$	59	$	—	$	59
Single and multi-family	518		96		$	614	70		100		170
Other commercial real estate	3,398		796		$	4,194	3,285		1,368		4,653
Total	3,916		892		4,808		3,414		1,468		4,882
Commercial and industrial loans:
Other commercial and industrial loans	5,807		1,502		$	7,309	7,624		597		8,221
Total	5,807		1,502		7,309		7,624		597		8,221
Residential mortgages:
1-4 family	2,588		2,225		$	4,813	2,298		1,668		3,966
Construction	44		—		$	44	—		—		—
Total	2,632		2,225		4,857		2,298		1,668		3,966
Consumer loans:
Home equity	1,717		558		$	2,275	1,597		727		2,324
Auto and other	378		723		$	1,101	551		893		1,444
Total	2,095		1,281		3,376		2,148		1,620		3,768
Total non-accrual loans	$	14,450	$	5,900	$	20,350	$	15,484	$	5,353	$	20,837

_______________________________________

(1)  At quarter end June 30, 2016, acquired credit impaired loans accounted for $306 thousand of non-accrual loans that are not presented in the above table.

(2)  At December 31, 2015, acquired credit impaired loans accounted for $39 thousand of non-accrual loans that are not presented in the above table.

Schedule of Loans Evaluated for Impairment

Loans evaluated for impairment as of June 30, 2016 and December 31, 2015 were as follows:

Business Activities Loans

(In thousands)	Commercial real estate		Commercial and industrial loans		Residential mortgages		Consumer		Total
June 30, 2016
Loans receivable:
Balance at end of period
Individually evaluated for impairment	$	12,501	$	5,081	$	2,906	$	1,735	$	22,223
Collectively evaluated	1,805,141		848,007		1,537,126		723,316		4,913,590
Total	$	1,817,642	$	853,088	$	1,540,032	$	725,051	$	4,935,813

Business Activities Loans

(In thousands)	Commercial real estate		Commercial and industrial loans		Residential mortgages		Consumer		Total
December 31, 2015
Loans receivable:
Balance at end of year
Individually evaluated for impairment	$	11,560	$	7,191	$	2,812	$	1,810	$	23,373
Collectively evaluated for impairment	1,622,467		820,041		1,478,125		616,677		4,537,310
Total	$	1,634,027	$	827,232	$	1,480,937	$	618,487	$	4,560,683

Acquired Loans

(In thousands)	Commercial real estate		Commercial and industrial loans		Residential mortgages		Consumer		Total
June 30, 2016
Loans receivable:
Balance at end of Period
Individually evaluated for impairment	$	3,924	$	1,141	$	519	$	572	$	6,156
Purchased credit-impaired loans	15,596		2,322		1,565		225		19,708
Collectively evaluated	400,420		178,008		301,484		158,712		1,038,624
Total	$	419,940	$	181,471	$	303,568	$	159,509	$	1,064,488

Acquired Loans

(In thousands)	Commercial real estate		Commercial and industrial loans		Residential mortgages		Consumer		Total
December 31, 2015
Loans receivable:
Balance at end of year
Individually evaluated for impairment	$	3,749	$	—	$	570	$	487	$	4,806
Purchased credit-impaired loans	15,765		2,775		2,572		250		21,362
Collectively evaluated for impairment	406,226		218,256		330,956		182,947		1,138,385
Total	$	425,740	$	221,031	$	334,098	$	183,684	$	1,164,553

Summary of Impaired Loans

The following is a summary of impaired loans at June 30, 2016 and December 31, 2015:

Business Activities Loans

	June 30, 2016
(In thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance:
Commercial real estate - construction	$	—	$	—	$	—
Commercial real estate - single and multifamily	—		—		—
Other commercial real estate loans	1,944		1,944		—
Other commercial and industrial loans	200		200		—
Residential mortgages - 1-4 family	1,313		1,313		—
Consumer - home equity	632		632		—
Consumer - other	1		1		—
With an allowance recorded:
Commercial real estate - construction	$	—	$	—	$	—
Commercial real estate - single and multifamily	—		—		—
Other commercial real estate loans	10,233		10,557		324
Other commercial and industrial loans	4,768		4,881		113
Residential mortgages - 1-4 family	1,443		1,593		150
Consumer - home equity	951		999		48
Consumer - other	96		103		7
Total
Commercial real estate	$	12,177	$	12,501	$	324
Commercial and industrial loans	4,968		5,081		113
Residential mortgages	2,756		2,906		150
Consumer	1,680		1,735		55
Total impaired loans	$	21,581	$	22,223	$	642

Business Activities Loans

	December 31, 2015
(In thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance:
Commercial real estate - construction	$	2,000	$	2,000	$	—
Commercial real estate - single and multifamily	—		—		—
Other commercial real estate loans	4,613		4,613		—
Other commercial and industrial loans	5,828		5,828		—
Residential mortgages - 1-4 family	1,181		1,181		—
Consumer - home equity	702		702		—
Consumer - other	1		1		—
With an allowance recorded:
Commercial real estate - construction	$	—	$	—	$	—
Commercial real estate - single and multifamily	—		—		—
Other commercial real estate loans	4,798		4,947		149
Other commercial and industrial loans	1,341		1,362		21
Residential mortgages - 1-4 family	1,479		1,632		153
Consumer - home equity	903		999		96
Consumer - other	101		108		7
Total
Commercial real estate	$	11,411	$	11,560	$	149
Commercial and industrial loans	7,169		7,190		21
Residential mortgages	2,660		2,813		153
Consumer	1,707		1,810		103
Total impaired loans	$	22,947	$	23,373	$	426

Acquired Loans

	June 30, 2016
(In thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance:
Commercial real estate - construction	$	—	$	—	$	—
Commercial real estate - single and multifamily	124		124		—
Other commercial real estate loans	351		351		—
Other commercial and industrial loans	—		—		—
Residential mortgages - 1-4 family	188		188		—
Consumer - home equity	—		—		—
Consumer - other	152		152		—
With an allowance recorded:
Commercial real estate - construction	$	—	$	—	$	—
Commercial real estate - single and multifamily	775		816		41
Other commercial real estate loans	2,498		2,633		135
Other commercial and industrial loans	1,099		1,141		42
Residential mortgages - 1-4 family	296		331		35
Consumer - home equity	387		420		33
Consumer - other	—		—		—
Total
Commercial real estate	$	3,748	$	3,924	$	176
Commercial and industrial loans	1,099		1,141		42
Residential mortgages	484		519		35
Consumer	539		572		33
Total impaired loans	$	5,870	$	6,156	$	286

Acquired Loans

	December 31, 2015
(In thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance:
Other commercial real estate loans	$	1,722	$	1,722	$	—
Residential mortgages - 1-4 family	274		274		—
Consumer - home equity	117		117		—
Consumer - other	177		177		—
With an allowance recorded:
Commercial real estate - single and multifamily	$	638	$	655	$	17
Other commercial real estate loans	1,964		2,032		68
Residential mortgages - 1-4 family	266		296		30
Consumer - home equity	167		192		25
Total
Other commercial real estate loans	$	4,324	$	4,409	$	85
Other commercial and industrial loans	—		—		—
Residential mortgages	540		570		30
Consumer	461		486		25
Total impaired loans	$	5,325	$	5,465	$	140

Summary of the Average Recorded Investment and Interest Income Recognized on Impaired Loans

The following is a summary of the average recorded investment and interest income recognized on impaired loans as of June 30, 2016 and 2015:

Business Activities Loans

	Six Months Ended June 30, 2016				Six Months Ended June 30, 2015
(in thousands)	Average Recorded Investment		Cash Basis Interest Income Recognized		Average Recorded Investment		Cash Basis Interest Income Recognized
With no related allowance:
Commercial real estate - construction	$	—	$	—	$	2,466	$	1
Commercial real estate - single and multifamily	72		1		120		—
Other commercial real estate loans	2,690		3		12,734		170
Other commercial and industrial loans	707		16		1,447		3
Residential mortgages - 1-4 family	1,409		3		2,281		41
Consumer - home equity	792		5		360		1
Consumer - other	1		—		114		2
With an allowance recorded:
Commercial real estate - construction	$	—	$	—	$	—	$	—
Commercial real estate - single and multifamily	—		—		—		—
Other commercial real estate loans	10,144		240		6,629		92
Other commercial and industrial loans	5,576		119		329		2
Residential mortgages - 1-4 family	1,609		36		764		17
Consumer - home equity	999		17		—		—
Consumer - other	105		2		—		—
Total
Commercial real estate	$	12,906	$	244	$	21,949	$	263
Commercial and industrial loans	6,283		135		1,776		5
Residential mortgages	3,018		39		3,045		58
Consumer loans	1,897		24		474		3
Total impaired loans	$	24,104	$	442	$	27,244	$	329

Acquired Loans

	Six Months Ended June 30, 2016				Six Months Ended June 30, 2015
(in thousands)	Average Recorded Investment		Cash Basis Interest Income Recognized		Average Recorded Investment		Cash Basis Interest Income Recognized
With no related allowance:
Commercial real estate - construction	$	—	$	—	$	664	$	60
Commercial real estate - single and multifamily	125		4		254		—
Other commercial real estate loans	596		—		1,977		3
Other commercial and industrial loans	154		—		51		3
Residential mortgages - 1-4 family	100		—		569		2
Consumer - home equity	—		—		355		6
Consumer - other	160		1		—		—
With an allowance recorded:
Commercial real estate - construction	$	—	$	—	$	—	$	—
Commercial real estate - single and multifamily	822		21		2,872		63
Other commercial real estate loans	2,598		77		845		59
Other commercial and industrial loans	233		2		—		—
Residential mortgages - 1-4 family	333		6		310		5
Consumer - home equity	326		6		—		—
Consumer - other	—		—		—		—
Total
Other commercial real estate loans	$	4,141	$	102	$	6,612	$	185
Commercial and industrial loans	387		2		51		3
Residential mortgages	433		6		879		7
Consumer loans	486		7		355		6
Total impaired loans	$	5,447	$	117	$	7,897	$	201

Schedule of Recorded Investment and Number of Modifications for TDRs Identified During the Period

The following tables include the recorded investment and number of modifications identified during the three and six months ended June 30, 2016 and for the three and six months ended June 30, 2015, respectively. The table includes the recorded investment in the loans prior to a modification and also the recorded investment in the loans after the loans were restructured. The modifications for the three and six months ending June 30, 2016 were attributable to interest rate concessions, maturity date extensions, modified payment terms, reamortization, and accelerated maturity. The modifications for the three and six months ending June 30, 2015 were attributable to interest rate concessions, maturity date extensions and modified payment terms.

	Three Months Ended June 30, 2016
(Dollars in thousands)	Number of Modifications	Pre-Modification Outstanding Recorded Investment	Post-Modification Outstanding Recorded Investment
Troubled Debt Restructurings
Consumer - Home Equity	1	117	117
Total	1	117	117

	Six Months Ended June 30, 2016
(Dollars in thousands)	Number of Modifications	Pre-Modification Outstanding Recorded Investment	Post-Modification Outstanding Recorded Investment
Troubled Debt Restructurings
Commercial - Other	2	1,049	1,049
Commercial and industrial - Other	2	151	151
Consumer - Home Equity	1	117	117
Total	5	1,317	1,317

	Three Months Ended June 30, 2015
(Dollars in thousands)	Number of Modifications	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Troubled Debt Restructurings
Commercial - Construction	1	$	1,877	$	1,877
Commercial - Other	1	1,694		1,694
Commercial and industrial - Other	4	8,159		8,159
Total	6	$	11,730	$	11,730

	Six Months Ended June 30, 2015
(Dollars in thousands)	Number of Modifications	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Troubled Debt Restructurings
Commercial - Construction	1	$	2,000	$	2,000
Commercial - Other	2	1,694		1,694
Commercial and industrial - Other	5	8,192		8,192
Total	8	11,886		11,886

The following tables disclose the recorded investments and numbers of modifications for TDRs for the prior year where a concession has been made, that then defaulted in the respective reporting period. For the three and six months ended June 30, 2016, there were no loans that were restructured that had subsequently defaulted during the period.

	Modifications that Subsequently Defaulted
	Three Months Ended June 30, 2015
	Number of Contracts	Recorded Investment
Troubled Debt Restructurings
Commercial - Other	1	$	649

	Modifications that Subsequently Defaulted
	Six Months Ended June 30, 2015
	Number of Contracts	Recorded Investment
Troubled Debt Restructurings
Commercial - Other	1	$	649

Schedule of TDR Activity

The following table presents the Company’s TDR activity for the three and six months ended June 30, 2016 and 2015:

	Three Months Ended June 30,
(In thousands)	2016			2015
Balance at beginning of the period	$	23,654		$	17,204
Principal payments	(768		)	(607		)
TDR status change (1)	—			—
Other reductions/increases (2)	(881		)	(611		)
Newly identified TDRs	117			9,730
Balance at end of the period	$	22,122		$	25,716

	Six Months Ended June 30,
(In thousands)	2016			2015
Balance at beginning of the period	$	22,048		$	16,714
Principal payments	(1,109		)	(1,091		)
TDR status change (1)	2,236			—
Other reductions/increases (2)	(2,370		)	(1,793		)
Newly identified TDRs	1,317			11,886
Balance at end of the period	$	22,122		$	25,716

_________________________________

(1) TDR status change classification represents TDR loans with a specified interest rate equal to or greater than the rate that the Company was willing to accept at the time of the restructuring for a new loan with comparable risk and  the loan was on current payment status and not impaired based on the terms specified by the restructuring agreement.

(2) Other reductions classification consists of transfer to other real estate owned and charge-offs and advances to loans.

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LOAN LOSS ALLOWANCE (Tables)

6 Months Ended

Jun. 30, 2016

Receivables [Abstract]

Schedule of Activity in the Allowance for Loan Losses

Activity in the allowance for loan losses for the six months ended June 30, 2016 and 2015 was as follows:

Business Activities Loans (In thousands)	Commercial real estate		Commercial and industrial loans		Residential mortgages		Consumer		Unallocated			Total
June 30, 2016
Balance at beginning of period	$	14,508	$	7,317	$	7,566	$	4,956	$	227		$	34,574
Charged-off loans	1,578		2,546		1,087		741		—			5,952
Recoveries on charged-off loans	128		77		5		122		—			332
Provision/(releases) for loan losses	3,837		3,448		1,042		432		(589		)	8,170
Balance at end of period	$	16,895	$	8,296	$	7,526	$	4,769	$	(362	)	$	37,124
Individually evaluated for impairment	324		113		150		55		—			642
Collectively evaluated	16,571		8,183		7,376		4,714		(362		)	36,482
Total	$	16,895	$	8,296	$	7,526	$	4,769	$	(362	)	$	37,124

Business Activities Loans (In thousands)	Commercial real estate		Commercial and industrial loans		Residential mortgages			Consumer			Unallocated			Total
June 30, 2015
Balance at beginning of period	$	14,690	$	5,206	$	6,836		$	5,928		$	135		$	32,795
Charged-off loans	4,422		372		446			462			—			5,702
Recoveries on charged-off loans	146		154		113			127			—			540
Provision/(releases) for loan losses	2,553		4,178		(32		)	(679		)	(427		)	5,593
Balance at end of period	$	12,967	$	9,166	$	6,471		$	4,914		$	(292	)	$	33,226
Individually evaluated for impairment	30		1,706		87			—			—			1,823
Collectively evaluated	12,937		7,460		6,384			4,914			(292		)	31,403
Total	$	12,967	$	9,166	$	6,471		$	4,914		$	(292	)	$	33,226

Acquired Loans (In thousands)	Commercial real estate		Commercial and industrial loans			Residential mortgages		Consumer		Unallocated		Total
June 30, 2016
Balance at beginning of period	$	1,903	$	1,330		$	976	$	525	$	—	$	4,734
Charged-off loans	126		275			364		380		—		1,145
Recoveries on charged-off loans	—		176			104		46		—		326
Provision for loan losses	363		(455		)	165		285		—		358
Balance at end of period	$	2,140	$	776		$	881	$	476	$	—	$	4,273
Individually evaluated for impairment	177		42			35		32		—		286
Purchased credit-impaired loans	—		—			—		—		—		—
Collectively evaluated	1,963		734			846		444		—		3,987
Total	$	2,140	$	776		$	881	$	476	$	—	$	4,273

Acquired Loans (In thousands)	Commercial real estate		Commercial and industrial loans		Residential mortgages		Consumer		Unallocated		Total
June 30, 2015
Balance at beginning of period	$	790	$	1,093	$	615	$	369	$	—	$	2,867
Charged-off loans	587		336		375		608		—		1,906
Recoveries on charged-off loans	395		56		41		56		—		548
Provision for loan losses	1,188		160		527		587		—		2,462
Balance at end of period	$	1,786	$	973	$	808	$	404	$	—	$	3,971
Individually evaluated for impairment	166		—		39		—		—		205
Purchased credit-impaired loans	—		—		—		—		—		—
Collectively evaluated	1,620		973		769		404		—		3,766
Total	$	1,786	$	973	$	808	$	404	$	—	$	3,971

Schedule of Loans by Risk Rating

Residential Mortgages

Credit Risk Profile by Internally Assigned Grade

	1-4 family				Construction				Total residential mortgages
(In thousands)	June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015
Grade:
Pass	$	1,514,633	$	1,449,073	$	20,920	$	26,704	$	1,535,553	$	1,475,777
Special mention	1,359		857		—		—		1,359		857
Substandard	3,075		4,303		45		—		3,120		4,303
Total	$	1,519,067	$	1,454,233	$	20,965	$	26,704	$	1,540,032	$	1,480,937

Consumer Loans

Credit Risk Profile Based on Payment Activity

	Home equity				Auto and other				Total consumer loans
(In thousands)	June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015
Performing	$	308,848	$	305,562	$	414,108	$	310,777	$	722,956	$	616,339
Nonperforming	1,717		1,597		378		551		2,095		2,148
Total	$	310,565	$	307,159	$	414,486	$	311,328	$	725,051	$	618,487

Acquired Loans

Commercial Real Estate

Credit Risk Profile by Creditworthiness Category

	Construction				Single and multi-family				Other				Total commercial real estate
(In thousands)	June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015
Grade:
Pass	$	29,335	$	42,176	$	36,845	$	32,796	$	328,594	$	324,614	$	394,774	$	399,586
Special mention	—		—		—		655		1,146		352		1,146		1,007
Substandard	1,093		1,298		5,326		3,332		17,601		20,517		24,020		25,147
Total	$	30,428	$	43,474	$	42,171	$	36,783	$	347,341	$	345,483	$	419,940	$	425,740

Commercial and Industrial Loans

Credit Risk Profile by Creditworthiness Category

	Asset based lending				Other				Total comm. and industrial loans
(In thousands)	June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015
Grade:
Pass	$	—	$	—	$	173,306	$	212,825	$	173,306	$	212,825
Special mention	—		—		515		487		515		487
Substandard	—		—		7,650		7,719		7,650		7,719
Total	$	—	$	—	$	181,471	$	221,031	$	181,471	$	221,031

Residential Mortgages

Credit Risk Profile by Internally Assigned Grade

	1-4 family				Construction				Total residential mortgages
(In thousands)	June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015
Grade:
Pass	$	299,909	$	329,375	$	866	$	1,351	$	300,775	$	330,726
Special mention	327		311		—		—		327		311
Substandard	2,466		3,061		—		—		2,466		3,061
Total	$	302,702	$	332,747	$	866	$	1,351	$	303,568	$	334,098

Consumer Loans

Credit Risk Profile Based on Payment Activity

	Home equity				Auto and other				Total consumer loans
(In thousands)	June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015
Performing	$	48,788	$	52,719	$	109,440	$	129,345	$	158,228	$	182,064
Nonperforming	558		727		723		893		1,281		1,620
Total	$	49,346	$	53,446	$	110,163	$	130,238	$	159,509	$	183,684

Summary of Information About Total Loans Rated Special Mention or Lower

The following table summarizes information about total loans rated Special Mention or lower as of June 30, 2016 and December 31, 2015. The table below includes consumer loans that are special mention and substandard accruing that are classified in the above table as performing based on payment activity.

	June 30, 2016						December 31, 2015
(In thousands)	Business Activities Loans		Acquired Loans		Total		Business Activities Loans		Acquired Loans		Total
Non-Accrual	$	14,450	$	6,206	$	20,656	$	15,484	$	5,391	$	20,875
Substandard Accruing	52,086		29,647		81,733		60,549		32,560		93,109
Total Classified	66,536		35,853		102,389		76,033		37,951		113,984
Special Mention	23,105		2,111		25,216		29,036		2,259		31,295
Total Criticized	$	89,641	$	37,964	$	127,605	$	105,069	$	40,210	$	145,279

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DEPOSITS (Tables)

6 Months Ended

Jun. 30, 2016

Deposits [Abstract]

Summary of Time Deposits

A summary of time deposits is as follows:

(In thousands)	June 30, 2016		December 31, 2015
Time less than $100,000	$	544,761	$	545,819
Time $100,000 or more	1,545,341		1,440,781
Total time deposits	$	2,090,102	$	1,986,600

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BORROWED FUNDS (Tables)

6 Months Ended

Jun. 30, 2016

Debt Disclosure [Abstract]

Schedule of Borrowed Funds

Borrowed funds at June 30, 2016 and December 31, 2015 are summarized, as follows:

	June 30, 2016				December 31, 2015
			Weighted				Weighted
			Average				Average
(dollars in thousands)	Principal		Rate		Principal		Rate
Short-term borrowings:
Advances from the FHLBB	$	1,110,320	0.54	%	$	1,071,200	0.43	%
Other Borrowings	—		—		—		—
Total short-term borrowings:	1,110,320		0.54		1,071,200		0.43
Long-term borrowings:
Advances from the FHLBB	120,844		1.62		103,135		1.89
Subordinated borrowings	73,608		7.00		73,519		7.00
Junior subordinated borrowings	15,464		2.50		15,464		2.23
Total long-term borrowings:	209,916		3.57		192,118		3.88
Total	$	1,320,236	1.02	%	$	1,263,318	0.96	%

Summary of Maturities of FHLBB Advances

A summary of maturities of FHLBB advances as of June 30, 2016 and December 31, 2015 is as follows:

	June 30, 2016
			Weighted
			Average
(in thousands, except rates)	Principal		Rate
Fixed rate advances maturing:
2016	$	1,131,862	0.56	%
2017	83,235		1.49
2018	1,022		2.62
2019	—		—
2020 and beyond	15,045		2.41
Total FHLBB advances	$	1,231,164	0.65	%

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CAPITAL RATIOS AND SHAREHOLDERS' EQUITY (Tables)

6 Months Ended

Jun. 30, 2016

Stockholders' Equity Note [Abstract]

Schedule of Actual and Required Capital Ratios

The actual and required capital ratios were as follows:

	June 30, 2016		Regulatory Minimum to be Well Capitalized		December 31, 2015		Regulatory Minimum to be Well Capitalized
Company (consolidated)
Total capital to risk weighted assets	11.4	%	10.0	%	11.9	%	10.0	%
Common Equity Tier 1 Capital to risk weighted assets	9.3		6.5		9.8		6.5
Tier 1 capital to risk weighted assets	9.5		8.0		9.9		8.0
Tier 1 capital to average assets	7.7		5.0		7.7		5.0
Bank
Total capital to risk weighted assets	10.6	%	10.0	%	11.2	%	10.0	%
Common Equity Tier 1 Capital to risk weighted assets	9.4		6.5		9.9		6.5
Tier 1 capital to risk weighted assets	9.4		8.0		9.9		8.0
Tier 1 capital to average assets	7.6		5.0		7.7		5.0

Schedule of Components of Accumulated Other Comprehensive Income

Components of accumulated other comprehensive income is as follows:

(In thousands)	June 30, 2016			December 31, 2015
Other accumulated comprehensive income, before tax:
Net unrealized holding gain on AFS securities	$	33,609		$	6,316
Net loss on effective cash flow hedging derivatives	(13,921		)	(8,532		)
Net unrealized holding loss on pension plans	(3,468		)	(3,469		)
Income taxes related to items of accumulated other comprehensive income:
Net unrealized holding gain on AFS securities	(12,984		)	(2,437		)
Net loss on effective cash flow hedging derivatives	5,586			3,425
Net unrealized holding loss on pension plans	1,391			1,392
Accumulated other comprehensive income (loss)	$	10,213		$	(3,305	)

Schedule of Components of Other Comprehensive Income

The following table presents the components of other comprehensive income for the three and six months ended June 30, 2016 and 2015:

(In thousands)	Before Tax			Tax Effect			Net of Tax
Three Months Ended June 30, 2016
Net unrealized holding gains on AFS securities:	x
Net unrealized gains arising during the period	$	9,573		$	(3,686	)	$	5,887
Less: reclassification adjustment for loss realized in net income	13			(5		)	8
Net unrealized holding gain on AFS securities	9,586			(3,691		)	5,895
Net loss on cash flow hedging derivatives:
Net unrealized loss arising during the period	(1,771		)	711			(1,060		)
Less: reclassification adjustment for losses realized in net income	887			(356		)	531
Net loss on cash flow hedging derivatives	(884		)	355			(529		)
Net unrealized holding loss on pension plans
Net unrealized loss arising during the period	—			—			—
Less: reclassification adjustment for gains (losses) realized in net income	—			—			—
Net unrealized holding loss on pension plans	—			—			—
Other comprehensive income	$	8,702		$	(3,336	)	$	5,366
Three Months Ended June 30, 2015
Net unrealized holding loss on AFS securities:
Net unrealized loss arising during the period	$	(13,687	)	$	5,243		$	(8,444	)
Less: reclassification adjustment for (gains) realized in net income	(2,384		)	857			(1,527		)
Net unrealized holding loss on AFS securities	(16,071		)	6,100			(9,971		)
Net gain on cash flow hedging derivatives:
Net unrealized gain arising during the period	784			(316		)	468
Less: reclassification adjustment for losses realized in net income	—			—			—
Net gain on cash flow hedging derivatives	784			(316		)	468
Net unrealized holding loss on pension plans
Net unrealized loss arising during the period	—			—			—
Less: reclassification adjustment for gains (losses) realized in net income	65			(26		)	39
Net unrealized holding loss on pension plans	65			(26		)	39
Other comprehensive income	$	(15,222	)	$	5,758		$	(9,464	)

(In thousands)	Before Tax			Tax Effect			Net of Tax
Six Months Ended June 30, 2016
Net unrealized holding gains on AFS securities:
Net unrealized gains arising during the period	$	27,315		$	(10,556	)	$	16,759
Less: reclassification adjustment for (gains) realized in net income	(22		)	8			(14		)
Net unrealized holding gain on AFS securities	27,293			(10,548		)	16,745
Net loss on cash flow hedging derivatives:
Net unrealized loss arising during the period	(6,684		)	2,683			(4,001		)
Less: reclassification adjustment for gains (losses) realized in net income	1,294			(520		)	774
Net loss on cash flow hedging derivatives	(5,390		)	2,163			(3,227		)
Net unrealized holding loss on pension plans
Net unrealized loss arising during the period	—			—			—
Less: reclassification adjustment for gains (losses) realized in net income	—			—			—
Net unrealized holding loss on pension plans	—			—			—
Other comprehensive income	$	21,903		$	(8,385	)	$	13,518
Six Months Ended June 30, 2015
Net unrealized holding loss on AFS securities:
Net unrealized loss arising during the period	$	(4,316	)	$	1,625		$	(2,691	)
Less: reclassification adjustment for (gains) realized in net income	(2,418		)	870			(1,548		)
Net unrealized holding gain on AFS securities	(6,734		)	2,495			(4,239		)
Net loss on cash flow hedging derivatives:
Net unrealized loss arising during the period	(3,117		)	1,256			(1,861		)
Less: reclassification adjustment for (gains) realized in net income	—			—			—
Net gain on cash flow hedging derivatives	(3,117		)	1,256			(1,861		)
Net loss on pension plan:
Net unrealized loss arising during the period	(1,596		)	643			(953		)
Less: reclassification adjustment for losses realized in net income	130			(52		)	78
Net loss on terminated swap	(1,466		)	591			(875		)
Other comprehensive income	$	(11,317	)	$	4,342		$	(6,975	)

Schedule of Gross Changes in Each Component of Accumulated Other Comprehensive Income

The following table presents the changes in each component of accumulated other comprehensive income (loss), for the three and six months ended June 30, 2016 and 2015:

(in thousands)	Net unrealized holding gain on AFS Securities			Net loss on effective cash flow hedging derivatives			Net unrealized holding loss on pension plans			Total
Three Months Ended June 30, 2016
Balance at Beginning of Period	$	14,730		$	(7,806	)	$	(2,077	)	$	4,847
Other Comprehensive Gain (Loss) Before reclassifications	5,887			(1,060		)	—			4,827
Amounts Reclassified from Accumulated other comprehensive income	8			531			—			539
Total Other Comprehensive Income (Loss)	5,895			(529		)	—			5,366
Balance at End of Period	$	20,625		$	(8,335	)	$	(2,077	)	$	10,213
Three Months Ended June 30, 2015
Balance at Beginning of Period	$	15,648		$	(4,298	)	$	(2,282	)	$	9,068
Other Comprehensive Gain (Loss) Before reclassifications	(8,444		)	468			—			(7,976		)
Amounts Reclassified from Accumulated other comprehensive income	(1,527		)	—			39			(1,488		)
Total Other Comprehensive (Loss) Income	(9,971		)	468			39			(9,464		)
Balance at End of Period	$	5,677		$	(3,830	)	$	(2,243	)	$	(396	)
Six Months Ended June 30, 2016
Balance at Beginning of Period	$	3,880		$	(5,108	)	$	(2,077	)	$	(3,305	)
Other Comprehensive (Loss) Before reclassifications	16,759			(4,001		)	—			12,758
Amounts Reclassified from Accumulated other comprehensive income	(14		)	774			—			760
Total Other Comprehensive Income (Loss)	16,745			(3,227		)	—			13,518
Balance at End of Period	$	20,625		$	(8,335	)	$	(2,077	)	$	10,213
Six Months Ended June 30, 2015
Balance at Beginning of Period	$	9,916		$	(1,969	)	$	(1,368	)	$	6,579
Other Comprehensive Gain (Loss) Before reclassifications	(2,691		)	(1,861		)	(953		)	(5,505		)
Amounts Reclassified from Accumulated other comprehensive income	(1,548		)	—			78			(1,470		)
Total Other Comprehensive (Loss)	(4,239		)	(1,861		)	(875		)	(6,975		)
Balance at End of Period	$	5,677		$	(3,830	)	$	(2,243	)	$	(396	)

Schedule of Amounts Reclassified Out of Each Component of Accumulated Other Comprehensive Income

The following table presents the amounts reclassified out of each component of accumulated other comprehensive income (loss) for the three and six months ended June 30, 2016 and 2015:

							Affected Line Item in the
	Three Months Ended June 30,						Statement where Net Income
(in thousands)	2016			2015			is Presented
Realized losses (gains) on AFS securities:
	$	13		$	(2,384	)	Non-interest income
	(5		)	857			Tax expense
	8			(1,527		)	Net of tax
Realized losses on cash flow hedging derivatives:
	887			—			Non-interest income
	(356		)	—			Tax expense
	531			—			Net of tax
Realized losses on pension plans:
	—			65			Non-interest income
	—			(26		)	Tax expense
	—			39			Net of tax
Total reclassifications for the period	$	539		$	(1,488	)	Net of tax

							Affected Line Item in the
	Six Months Ended June 30,						Statement where Net Income
(in thousands)	2016			2015			is Presented
Realized (gains) on AFS securities:
	$	(23	)	$	(2,418	)	Non-interest income
	9			870			Tax expense
	(14		)	(1,548		)	Net of tax
Realized losses on cash flow hedging derivatives:
	1,295			—			Non-interest income
	(521		)	—			Tax expense
	774			—			Net of tax
Realized losses on pension plans:
	—			130			Non-interest income
	—			(52		)	Tax expense
	—			78			Net of tax
Total reclassifications for the period	$	760		$	(1,470	)	Net of tax

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EARNINGS PER SHARE (Tables)

6 Months Ended

Jun. 30, 2016

Earnings Per Share [Abstract]

Schedule of Earnings Per Share

Earnings per share have been computed based on the following (average diluted shares outstanding are calculated using the treasury stock method):

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands, except per share data)	2016		2015		2016		2015
Net income	$	15,957	$	10,044	$	31,958	$	18,803
Average number of common shares issued	32,213		29,975		32,188		28,260
Less: average number of treasury shares	1,075		1,193		1,107		1,244
Less: average number of unvested stock award shares	533		481		520		459
Average number of basic common shares outstanding	30,605		28,301		30,561		26,557
Plus: dilutive effect of unvested stock award shares	102		94		99		91
Plus: dilutive effect of stock options outstanding	58		66		65		65
Average number of diluted common shares outstanding	30,765		28,461		30,725		26,713
Earnings per share:
Basic	$	0.52	$	0.35	$	1.05	$	0.71
Diluted	$	0.52	$	0.35	$	1.04	$	0.70

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STOCK-BASED COMPENSATION PLANS (Tables)

6 Months Ended

Jun. 30, 2016

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

Summary of Activity in the Stock Award and Stock Option Plans

A combined summary of activity in the Company’s stock award and stock option plans for the six months ended June 30, 2016 is presented in the following table:

		Non-vested Stock
		Awards Outstanding				Stock Options Outstanding
				Weighted-				Weighted-
		Number of		Average Grant Date		Number of		Average Exercise
(Shares in thousands)		Shares		Fair Value		Shares		Price
December 31, 2015		488		$	25.09	265		$	21.11
Granted		180		27.39		—		—
Stock options exercised		—		—		(2	)	16.76
Stock awards vested		(100	)	25.32		—		—
Forfeited		(22	)	24.39		—		—
Expired		—		—		(3	)	34.45
June 30, 2016		546		$	26.12	260		$	20.99
Exercisable options at	June 30, 2016					260		$	20.96

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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables)

6 Months Ended

Jun. 30, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Interest Rate Swap Agreements and Non-Hedging Derivative Assets and Liabilities

Information about derivative assets and liabilities at June 30, 2016, follows:

			Weighted	Weighted Average Rate				Estimated
	Notional		Average			Contract		Fair Value
	Amount		Maturity	Received		pay rate		Asset (Liability)
	(In thousands)		(In years)					(In thousands)
Cash flow hedges:
Interest rate swaps on FHLBB borrowings	$	200,000	2.6	0.47	%	2.19	%	$	(8,390	)
Forward-starting interest rate swaps on FHLBB borrowings	100,000		3.0	0.47	%	2.48	%	$	(5,531	)
Total cash flow hedges	300,000							(13,921		)
Economic hedges:
Interest rate swap on tax advantaged economic development bond	11,689		13.4	0.61	%	5.09	%	(3,023		)
Interest rate swaps on loans with commercial loan customers	565,898		5.6	1.92	%	3.78	%	(38,466		)
Reverse interest rate swaps on loans with commercial loan customers	565,898		5.6	3.78	%	1.92	%	38,020
Risk Participation Agreements with Dealer Banks	67,868		13.2					60
Forward sale commitments	76,634		0.2					(869		)
Total economic hedges	1,287,987							(4,278		)
Non-hedging derivatives:
Interest rate lock commitments	64,412		0.2					1,259
Total non-hedging derivatives	64,412							1,259
Total	$	1,652,399						$	(16,940	)

Information about derivative assets and liabilities at December 31, 2015, follows:

			Weighted	Weighted Average Rate				Estimated
	Notional		Average			Contract		Fair Value
	Amount		Maturity	Received		pay rate		Asset (Liability)
	(In thousands)		(In years)					(In thousands)
Cash flow hedges:
Forward-starting interest rate swaps on FHLBB borrowings	$	300,000	3.3	0.14	%	2.29	%	$	(8,532	)
Total cash flow hedges	300,000							(8,532		)
Economic hedges:
Interest rate swap on tax advantaged economic development bond	11,984		13.9	0.61	%	5.09	%	(2,450		)
Interest rate swaps on loans with commercial loan customers	457,392		6.7	2.18	%	4.49	%	(17,143		)
Reverse interest rate swaps on loans with commercial loan customers	457,392		6.7	4.49	%	2.18	%	17,129
Risk participation agreements with dealer banks	59,016		15.0					(56		)
Forward sale commitments	44,840		0.2					53
Total economic hedges	1,030,624							(2,467		)
Non-hedging derivatives:
Interest rate lock commitments	36,043		0.2					323
Total non-hedging derivatives	36,043							323
Total	$	1,366,667						$	(10,676	)

Schedule of Amounts Included in the Consolidated Statements of Income and in the Other Comprehensive Income Section of the Consolidated Statements of Comprehensive Income

Amounts included in the Consolidated Statements of Income and in the other comprehensive income section of the Consolidated Statements of Comprehensive Income (related to interest rate derivatives designated as hedges of cash flows), were as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2016			2015			2016			2015
Interest rate swaps on FHLBB borrowings:
Unrealized (loss) gain recognized in accumulated other comprehensive loss	$	(1,771	)	$	784		$	(6,684	)	$	(3,117	)
Reclassification of unrealized loss from accumulated other comprehensive income to interest expense	887			—			1,295			—
Net tax benefit (expense) on items recognized in accumulated other comprehensive income	355			(316		)	2,162			1,256
Other comprehensive (loss) gain recorded in accumulated other comprehensive income, net of reclassification adjustments and tax effects	$	(529	)	$	468		$	(3,227	)	$	(1,861	)
Net interest expense recognized in interest expense on hedged FHLBB borrowings	$	887		$	—		$	1,295		$	—

Schedule of Amounts Included in the Consolidated Statements of Income Related to Economic Hedges and Non-Hedging Derivatives

Amounts included in the Consolidated Statements of Income related to economic hedges and non-hedging derivatives were as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2016			2015			2016			2015
Economic hedges
Interest rate swap on industrial revenue bond:
Unrealized gain (loss) recognized in other non-interest income	$	(292	)	$	331		$	(831	)	$	60
Interest rate swaps on loans with commercial loan customers:
Unrealized (loss) gain recognized in other non-interest income	(7,725		)	3,889			(21,322		)	775
Reverse interest rate swaps on loans with commercial loan customers:
Unrealized gain (loss) recognized in other non-interest income	7,725			(3,889		)	21,322			(755		)
(Unfavorable) Favorable change in credit valuation adjustment recognized in other non-interest income	(372		)	56			(433		)	57
Risk Participation Agreements:
Unrealized gain (loss) recognized in other non-interest income	33			31			116			(40		)
Forward Commitments:
Unrealized (loss) gain recognized in other non-interest income	(869		)	475			(1,316		)	87
Realized gain (loss) in other non-interest income	50			504			(333		)	413
Non-hedging derivatives
Interest rate lock commitments
Unrealized gain recognized in other non-interest income	$	1,259		$	382		$	2,061		$	1,359
Realized gain in other non-interest income	896			186			1,745			941

Schedule of Assets Subject to an Enforceable Master Netting Arrangement

Offsetting of Financial Assets and Derivative Assets

	Gross Amounts of		Gross Amounts Offset in the		Net Amounts of Assets Presented in the		Gross Amounts Not Offset in the Statements of Condition
	Recognized		Statements of		Statements of		Financial		Cash
(in thousands)	Assets		Condition		Condition		Instruments		Collateral Received		Net Amount
December 31, 2015
Interest Rate Swap Agreements:
Institutional counterparties	$	40	$	—	$	40	$	—	$	—	$	40
Commercial counterparties	17,129		—		17,129		—		—		17,129
Total	$	17,169	$	—	$	17,169	$	—	$	—	$	17,169

Offsetting of Financial Assets and Derivative Assets

	Gross Amounts of		Gross Amounts Offset in the		Net Amounts of Assets Presented in the		Gross Amounts Not Offset in the Statements of Condition
	Recognized		Statements of		Statements of		Financial		Cash
(in thousands)	Assets		Condition		Condition		Instruments		Collateral Received		Net Amount
June 30, 2016
Interest Rate Swap Agreements:
Institutional counterparties	$	132	$	—	$	132	$	—	$	—	$	132
Commercial counterparties	38,020		—		38,020		—		—		38,020
Total	$	38,152	$	—	$	38,152	$	—	$	—	$	38,152

Schedule of Liabilities Subject to an Enforceable Master Netting Arrangement

Offsetting of Financial Liabilities and Derivative Liabilities

	Gross Amounts of			Gross Amounts Offset in the		Net Amounts of Liabilities Presented in the			Gross Amounts Not Offset in the Statements of Condition
	Recognized			Statements of		Statements of			Financial		Cash
(in thousands)	Liabilities			Condition		Condition			Instruments		Collateral Pledged		Net Amount
June 30, 2016
Interest Rate Swap Agreements:
Institutional counterparties	$	(55,528	)	$	46	$	(55,482	)	$	54,832	$	650	$	—
Commercial counterparties	—			—		—			—		—		—
Total	$	(55,528	)	$	46	$	(55,482	)	$	54,832	$	650	$	—

Offsetting of Financial Liabilities and Derivative Liabilities

	Gross Amounts of			Gross Amounts Offset in the		Net Amounts of Liabilities Presented in the			Gross Amounts Not Offset in the Statements of Condition
	Recognized			Statements of		Statements of			Financial		Cash
(in thousands)	Liabilities			Condition		Condition			Instruments		Collateral Pledged		Net Amount
December 31, 2015
Interest Rate Swap Agreements:
Institutional counterparties	$	(28,220	)	$	—	$	(28,220	)	$	18,500	$	9,720	$	—
Commercial counterparties	—			—		—			—		—		—
Total	$	(28,220	)	$	—	$	(28,220	)	$	18,500	$	9,720	$	—

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FAIR VALUE MEASUREMENTS (Tables)

6 Months Ended

Jun. 30, 2016

Quantitative information about the significant unobservable inputs within Level 3

Summary of Financial Assets and Financial Liabilities Measured at Fair Value on a Recurring Basis Segregated by the Level of the Valuation Inputs Within the Fair Value Hierarchy Utilized to Measure Fair Value

The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of June 30, 2016 and December 31, 2015, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value.

	June 30, 2016
	Level 1		Level 2		Level 3		Total
(In thousands)	Inputs		Inputs		Inputs		Fair Value
Trading security	$	—	$	—	$	14,479	$	14,479
Available-for-sale securities:
Municipal bonds and obligations	—		111,590		—		111,590
Agency collateralized mortgage obligations	—		679,506		—		679,506
Agency residential mortgage-backed securities	—		109,613		—		109,613
Agency commercial mortgage-backed securities	—		63,251		—		63,251
Corporate bonds	—		45,703		—		45,703
Trust preferred securities	—		11,739		—		11,739
Other bonds and obligations	—		3,222		—		3,222
Marketable equity securities	47,313		1,433		—		48,746
Loans held for sale (1)	—		21,182		—		21,182
Derivative assets	—		38,020		1,259		39,279
Derivative liabilities	680		55,350		189		56,219

(1) Loans held for sale excludes $1.3 million of loans held for sale shown on the balance sheet that are held at lower of cost or market.

	December 31, 2015
	Level 1		Level 2		Level 3		Total
(In thousands)	Inputs		Inputs		Inputs		Fair Value
Trading security	$	—	$	—	$	14,189	$	14,189
Available-for-sale securities:
Municipal bonds and obligations	—		104,561		—		104,561
Agency collateralized mortgage obligations	—		833,036		—		833,036
Agency residential mortgage-backed securities	—		126,829		—		126,829
Agency commercial mortgage-backed securities	—		—		—		—
Corporate bonds	—		41,022		—		41,022
Trust preferred securities	—		11,901		—		11,901
Other bonds and obligations	—		3,141		—		3,141
Marketable equity securities	32,925		334		708		33,967
Loans Held for Sale	—		13,191		—		13,191
Derivative assets	45		17,130		332		17,507
Derivative liabilities	—		28,181		—		28,181

Schedule of Loans Held for Sale

					Aggregate Fair Value
June 30, 2016	Aggregate		Aggregate		Less Aggregate
(In thousands)	Fair Value		Unpaid Principal		Unpaid Principal
Loans Held for Sale (1)	$	21,182	$	20,321	$	861

(1) Loans held for sale excludes $1.3 million of loans held for sale shown on the balance sheet that are held at lower of cost or market.

					Aggregate Fair Value
December 31, 2015	Aggregate		Aggregate		Less Aggregate
(In thousands)	Fair Value		Unpaid Principal		Unpaid Principal
Loans Held for Sale	$	13,191	$	12,914	$	277

Schedule of Changes in Level 3 Assets and Liabilities That Were Measured at Fair Value on a Recurring Basis

The table below presents the changes in Level 3 assets and liabilities that were measured at fair value on a recurring basis for the three and six months ended June 30, 2016 and 2015.

	Assets (Liabilities)
				Securities			Interest Rate
	Trading			Available			Lock			Forward
(In thousands)	Security			for Sale			Commitments			Commitments
Three Months Ended June 30, 2016
March 31, 2016	$	14,474		$	—		$	802		$	(143	)
Unrealized gain, net recognized in other non-interest income	153			—			1,711			—
Unrealized gain included in accumulated other comprehensive loss	—			—			—			(46		)
Paydown of trading security	(148		)	—			—			—
Transfers to held for sale loans	—			—			(1,254		)	—
June 30, 2016	$	14,479		$	—		$	1,259		$	(189	)
Six Months Ended June 30, 2016
December 31, 2015	$	14,189		$	708		$	323		$	9
Unrealized (loss) gain, net recognized in other non-interest income	585			—			2,917			—
Transfers to Level 2	—			(708		)	—			(198		)
Paydown of trading security	(295		)	—			—			—
Transfers to held for sale loans	—			—			(1,981		)	—
June 30, 2016	$	14,479		$	—		$	1,259		$	(189	)
Unrealized gains (losses) relating to instruments still held at June 30, 2016	$	2,790		$	—		$	1,259		$	(189	)

	Assets (Liabilities)
				Securities			Interest Rate
	Trading			Available			Lock			Forward
(In thousands)	Security			for Sale			Commitments			Commitments
Three Months Ended June 30, 2015
March 31, 2015	$	14,970		$	719		$	977		$	(93	)
Sale of Marketable Equity Security	—			—			—			—
Unrealized (loss) gain, net recognized in other non-interest income	(451		)	—			941			—
Unrealized gain included in accumulated other comprehensive loss	—			54			—			143
Paydown of trading account security	(141		)	—			—			—
Transfers to held for sale loans	—			—			(1,536		)	—
June 30, 2015	$	14,378		$	773		$	382		$	50
Six Months Ended June 30, 2015
December 31, 2014	$	14,909		$	2,326		$	625		$	(93	)
Sale of Marketable Equity Security	—			(1,327		)	—			—
Unrealized (loss) gain, net recognized in other non-interest income	(248		)	—			2,671			—
Unrealized gain included in accumulated other comprehensive loss	—			(226		)	—			143
Paydown of trading account security	(283		)	—			—			—
Transfers to held for sale loans	—			—			(2,914		)	—
June 30, 2015	$	14,378		$	773		$	382		$	50
Unrealized gains (losses) relating to instruments still held at June 30, 2015	$	2,106		$	3		$	382		$	50

Summary of Applicable Non-Recurring Fair Value Measurements

Quantitative information about the significant unobservable inputs within Level 3 non-recurring assets is as follows:

	Fair Value
(in thousands)	June 30, 2016		Valuation Techniques	Unobservable Inputs	Range (Weighted Average) (a)
Assets
Impaired loans	$	22,546	Fair value of collateral	Loss severity	0.23% to 40.66% (5.24%)
				Appraised value	$5.0 to $3,513.9 ($1365.5)
Capitalized servicing rights	9,498		Discounted cash flow	Constant prepayment rate (CPR)	2.36% to 15.23% (9.66%)
				Discount rate	7.74% to 14.00% (11.30%)
Other real estate owned	595		Fair value of collateral	Appraised value	$46 to $1200.0 ($1,087.4)
Total	$	32,639

(a)  Where dollar amounts are disclosed, the amounts represent the lowest and highest fair value of the respective assets in the population except for adjustments for market/property conditions, which represents the range of adjustments to individuals properties.

	Fair Value
(in thousands)	December 31, 2015		Valuation Techniques	Unobservable Inputs	Range (Weighted Average) (a)
Assets
Impaired loans	$	11,657	Fair value of collateral	Loss severity	.05% to 29.50% (7.55%)
				Appraised value	$46.3 to $1962.0 ($999.7)
Capitalized servicing rights	5,187		Discounted cash flow	Constant prepayment rate (CPR)	7.17% to 12.06% (10.02%)
				Discount rate	10.00% to 15.00 (10.88%)
Other real estate owned	1,725		Fair value of collateral	Appraised value	$39 to $1,200.0 ($919.9)
Total	$	18,569

(a)  Where dollar amounts are disclosed, the amounts represent the lowest and highest fair value of the respective assets in the population except for adjustments for market/property conditions, which represents the range of adjustments to individuals properties.

Summary of Estimated Fair Values, and Related Carrying Amounts, of Financial Instruments

The estimated fair values, and related carrying amounts, of the Company’s financial instruments follow. Certain financial instruments and all non-financial instruments are excluded from disclosure requirements. Accordingly, the aggregate fair value amounts presented herein may not necessarily represent the underlying fair value of the Company.

	June 30, 2016
	Carrying		Fair
(In thousands)	Amount		Value		Level 1		Level 2		Level 3
Financial Assets
Cash and cash equivalents	$	74,579	$	74,579	$	74,579	$	—	$	—
Trading security	14,479		14,479		—		—		14,479
Securities available for sale	1,073,370		1,073,370		47,313		1,026,057		—
Securities held to maturity	132,010		141,544		—		—		141,544
FHLB bank stock and restricted securities	68,242		68,242		—		68,242		—
Net loans	5,958,904		6,051,886		—		—		6,051,886
Loans held for sale	22,450		22,450		—		22,450		—
Accrued interest receivable	22,255		22,255		—		22,255		—
Cash surrender value of bank-owned life insurance policies	127,000		127,000		—		127,000		—
Derivative assets	39,279		39,279		—		38,020		1,259
Assets held for sale	815		815		—		815		—
Financial Liabilities
Total deposits	$	5,656,724	$	5,661,984	$	—	$	5,661,984	$	—
Short-term debt	1,110,320		1,110,322		—		1,110,322		—
Long-term Federal Home Loan Bank advances	120,844		121,212		—		121,212		—
Subordinated borrowings	89,072		95,253		—		95,253		—
Derivative liabilities	56,219		56,219		680		55,350		189

	December 31, 2015
	Carrying		Fair
(In thousands)	Amount		Value		Level 1		Level 2		Level 3
Financial Assets
Cash and cash equivalents	$	103,562	$	103,562	$	103,562	$	—	$	—
Trading security	14,189		14,189		—		—		14,189
Securities available for sale	1,154,457		1,154,457		32,925		1,120,824		708
Securities held to maturity	131,652		136,904		—		—		136,904
FHLB bank stock and restricted securities	71,018		71,018		—		71,018		—
Net loans	5,685,928		5,727,570		—		—		5,727,570
Loans held for sale	13,191		13,191		—		13,191		—
Accrued interest receivable	20,940		20,940		—		20,940		—
Cash surrender value of bank-owned life insurance policies	125,233		125,233		—		125,233		—
Derivative assets	17,507		17,507		45		17,130		332
Assets held for sale	278		278		—		278		—
Financial Liabilities
Total deposits	$	5,589,135	$	5,582,835	$	—	$	5,582,835	$	—
Short-term debt	1,071,200		1,071,044		—		1,071,044		—
Long-term Federal Home Loan Bank advances	103,135		103,397		—		103,397		—
Subordinated borrowings	89,812		93,291		—		93,291		—
Derivative liabilities	28,181		28,181		—		28,181		—

Recurring

Quantitative information about the significant unobservable inputs within Level 3

Schedule of Quantitative Information About the Significant Unobservable Inputs Within Level 3

Quantitative information about the significant unobservable inputs within Level 3 recurring assets and liabilities is as follows:

	Fair Value					Significant Unobservable Input
(In thousands)	June 30, 2016			Valuation Techniques	Unobservable Inputs	Value
Assets (Liabilities)
Trading Security	$	14,479		Discounted Cash Flow	Discount Rate	1.70		%
Forward Commitments	(189		)	Historical Trend	Closing Ratio	89.35		%
				Pricing Model	Origination Costs, per loan	$	2,500
Interest Rate Lock Commitment	1,259			Historical Trend	Closing Ratio	89.35		%
				Pricing Model	Origination Costs, per loan	$	2,500
Total	$	15,549

	Fair Value				Significant Unobservable Input
(In thousands)	December 31, 2015		Valuation Techniques	Unobservable Inputs	Value
Assets (Liabilities)
Trading Security	$	14,189	Discounted Cash Flow	Discount Rate	2.49		%
AFS Securities	708		Pricing Model	Median Peer Price/Tangible Book Value Percentage Multiple	88.52		%
Forward Commitments	9		Historical Trend	Closing Ratio	92.57		%
			Pricing Model	Origination Costs, per loan	$	2,500
Interest Rate Lock Commitment	323		Historical Trend	Closing Ratio	92.57		%
			Pricing Model	Origination Costs, per loan	$	2,500
Total	$	15,229

Non-recurring

Quantitative information about the significant unobservable inputs within Level 3

Schedule of Quantitative Information About the Significant Unobservable Inputs Within Level 3

The following is a summary of applicable non-recurring fair value measurements. There are no liabilities measured at fair value on a non-recurring basis.

	June 30, 2016		December 31, 2015		Three months ended June 30, 2016			Six months ended June 30, 2016			Fair Value Measurement Date as of June 30, 2016
	Level 3		Level 3		Total			Total			Level 3
(In thousands)	Inputs		Inputs		Gains (Losses)			Gains (Losses)			Inputs
Assets
Impaired loans	$	22,546	$	11,657	$	(180	)	$	10,889		June 2016
Capitalized servicing rights	9,498		5,187		—			—			May 2016
Other real estate owned	595		1,725		(3		)	(56		)	Jan. 2015 - March 2016
Total	$	32,639	$	18,569	$	(183	)	$	10,833

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NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES (Tables)

6 Months Ended

Jun. 30, 2016

Banking and Thrift, Interest [Abstract]

Schedule of Net Interest Income After Provision for Loan Losses

Presented below is net interest income after provision for loan losses for the three and six months ended June 30, 2016 and 2015, respectively.

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2016		2015		2016		2015
Net interest income	$	57,441	$	52,637	$	115,138	$	98,130
Provision for loan losses	4,522		4,204		8,528		8,055
Net interest income after provision for loan losses	$	52,919	$	48,433	$	106,610	$	90,075

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ACQUISITION - NARRATIVE (Details) - USD ($)		2 Months Ended	3 Months Ended		6 Months Ended
	Apr. 29, 2016	Jun. 30, 2016	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Apr. 28, 2016	Dec. 31, 2015
Business Acquisition [Line Items]
Loans		$ 6,000,301,000	$ 6,000,301,000		$ 6,000,301,000			$ 5,725,236,000
Pro forma estimated tax rate					40.00%	40.00%
44 Business Capital
Business Acquisition [Line Items]
Servicing asset at fair value, additions	$ 148,000,000
Acquisition related costs			$ 21,000	$ 0	$ 115,000	$ 0
Business acquisition, equity interest issued or Issuable, number of shares (shares)	44,840
Pro forma revenue		841,000
Pro forma net income (loss)		$ 59,000
Commercial real estate and industrial | 44 Business Capital
Business Acquisition [Line Items]
Loans	$ 35,600,000
Commercial Loans | 44 Business Capital
Business Acquisition [Line Items]
Loans	$ 1,200,000
44 Business Capital
Business Acquisition [Line Items]
Ownership percentage by parent							51.00%
Ownership percentage by noncontrolling owners							49.00%

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ACQUISITION - CONSIDERATION PAID AND ASSETS ACQUIRED AND LIABILITIES ASSUMED (Details) - USD ($) $ in Thousands	Apr. 29, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014
Recognized amounts of identifiable assets acquired and liabilities assumed, at fair value:
Goodwill		$ 339,929		$ 323,943
Loans		6,000,301		5,725,236
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield		$ 6,213	$ 6,464	$ 6,925	$ 6,540	$ 3,431	$ 2,541
44 Business Capital
Consideration paid:
Company common stock issued to certain 44 Business Capital shareholders	$ 1,217
Business acquisition, equity interest issued or Issuable, number of shares (shares)	44,840
Cash paid to 44 Business Capital shareholders and Parke	$ 55,649
Total consideration paid	56,866
Recognized amounts of identifiable assets acquired and liabilities assumed, at fair value:
Cash and short-term investments	107
Loans	36,850
Premises and equipment	33
Other assets	3,715
Other liabilities	(108)
Total identifiable net assets	40,597
Goodwill	16,269
Loans receivable, fair value disclosure	34,300
Loans and leases receivable, deferred income	2,100
44 Business Capital | Receivables Acquired with Deteriorated Credit Quality
Recognized amounts of identifiable assets acquired and liabilities assumed, at fair value:
Loans receivable, fair value disclosure	2,600
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield	$ 708
Fair value discount, amortization period (in years)	6 years
44 Business Capital | Scenario, Previously Reported
Recognized amounts of identifiable assets acquired and liabilities assumed, at fair value:
Cash and short-term investments	$ 107
Loans	42,627
Premises and equipment	69
Other assets	3,076
Other liabilities	(108)
Total identifiable net assets	45,771
Loans	36,400
44 Business Capital | Scenario, Previously Reported | Receivables Acquired with Deteriorated Credit Quality
Recognized amounts of identifiable assets acquired and liabilities assumed, at fair value:
Loans	6,300
44 Business Capital | Scenario, Adjustment
Recognized amounts of identifiable assets acquired and liabilities assumed, at fair value:
Cash and short-term investments	0
Loans	(5,777)
Premises and equipment	(36)
Other assets	639
Other liabilities	0
Total identifiable net assets	(5,174)
Accrued interest	$ 221

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ACQUISITION - LOAN PORTFOLIO ACQUIRED (Details) - ASC 310-30 - 44 Business Capital $ in Thousands	Apr. 29, 2016 USD ($)
Business Acquisition [Line Items]
Gross contractual receivable amounts at acquisition	$ 6,265
Contractual cash flows not expected to be collected (nonaccretable discount)	(3,000)
Expected cash flows at acquisition	3,265
Interest component of expected cash flows (accretable discount)	(708)
Fair value of acquired loans	$ 2,557

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ACQUISITION - PRO FORMA INFORMATION (Details) - 44 Business Capital - USD ($) $ / shares in Units, $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Business Acquisition [Line Items]
Net interest income	$ 115,269	$ 98,417
Non-interest income	32,338	31,650
Net income	$ 32,652	$ 19,417
Pro forma earnings per share, basic (USD per share)	$ 1.07	$ 0.73
Pro forma earnings per share, diluted (USD per share)	$ 1.06	$ 0.73

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TRADING SECURITY (Details) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Trading Securities [Abstract]
Amortized cost	$ 11,700,000	$ 12,000,000
Fair value	14,479,000	$ 14,189,000
Amount of other securities in the trading portfolio	$ 0

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SECURITIES AVAILABLE FOR SALE AND HELD TO MATURITY (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract]
Available-for-sale debt securities, amortized cost basis	$ 998,195	$ 1,118,572
Available-for-sale debt securities, accumulated gross unrealized gain	28,002	10,444
Available-for-sale debt securities, accumulated gross unrealized loss	(1,573)	(8,526)
Available-for-sale securities, debt securities	1,024,624	1,120,490
Available-for-sale Equity Securities, Amortized Cost Basis [Abstract]
Available-for-sale equity securities, amortized cost basis	42,470	30,522
Available-for-sale equity securities, accumulated gross unrealized gain	7,557	5,331
Available-for-sale equity securities, accumulated gross unrealized loss	(1,281)	(1,886)
Available-for-sale securities, equity securities	48,746	33,967
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract]
Available-for-sale securities, amortized cost basis	1,040,665	1,149,094
Available-for-sale securities, accumulated gross unrealized gain	35,559	15,775
Available-for-sale securities, accumulated gross unrealized loss	(2,854)	(10,412)
Available for sale securities	1,073,370	1,154,457
Securities held to maturity
Held to maturity, amortized cost basis	132,010	131,652
Held to maturity securities accumulated unrecognized holding gains	9,534	5,286
Held to maturity securities, accumulated unrecognized holding loss	0	(34)
Securities held to maturity, fair value	141,544	136,904
Available-for-sale Securities and Held-to-maturity Securities [Abstract]
Held to maturity and available for sale securities, amortized cost basis	1,172,675	1,280,746
Held to maturity and available for sale securities, gross unrealized gain	45,093	21,061
Held to maturity and available for sale securities, gross unrealized loss	(2,854)	(10,446)
Held to maturity and available for sale securities, fair value	1,214,914	1,291,361
Municipal bonds and obligations
Securities held to maturity
Held to maturity, amortized cost basis	95,663	94,642
Held to maturity securities accumulated unrecognized holding gains	7,337	3,359
Held to maturity securities, accumulated unrecognized holding loss	0	(34)
Securities held to maturity, fair value	103,000	97,967
Agency collateralized mortgage obligations
Securities held to maturity
Held to maturity, amortized cost basis	67	68
Held to maturity securities accumulated unrecognized holding gains	8	3
Held to maturity securities, accumulated unrecognized holding loss	0	0
Securities held to maturity, fair value	75	71
Tax advantaged economic development bonds
Securities held to maturity
Held to maturity, amortized cost basis	35,954	36,613
Held to maturity securities accumulated unrecognized holding gains	2,189	1,924
Held to maturity securities, accumulated unrecognized holding loss	0	0
Securities held to maturity, fair value	38,143	38,537
Other bonds and obligations
Securities held to maturity
Held to maturity, amortized cost basis	326	329
Held to maturity securities accumulated unrecognized holding gains	0	0
Held to maturity securities, accumulated unrecognized holding loss	0	0
Securities held to maturity, fair value	326	329
Municipal bonds and obligations
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract]
Available-for-sale debt securities, amortized cost basis	103,645	99,922
Available-for-sale debt securities, accumulated gross unrealized gain	7,945	4,763
Available-for-sale debt securities, accumulated gross unrealized loss	0	(124)
Available-for-sale securities, debt securities	111,590	104,561
Agency collateralized mortgage obligations
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract]
Available-for-sale debt securities, amortized cost basis	662,505	833,633
Available-for-sale debt securities, accumulated gross unrealized gain	17,125	4,957
Available-for-sale debt securities, accumulated gross unrealized loss	(124)	(5,554)
Available-for-sale securities, debt securities	679,506	833,036
Agency mortgage-backed securities
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract]
Available-for-sale debt securities, amortized cost basis	108,056	127,274
Available-for-sale debt securities, accumulated gross unrealized gain	1,587	542
Available-for-sale debt securities, accumulated gross unrealized loss	(30)	(987)
Available-for-sale securities, debt securities	109,613	126,829
Agency commercial mortgage-backed securities
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract]
Available-for-sale debt securities, amortized cost basis	62,352	0
Available-for-sale debt securities, accumulated gross unrealized gain	899	0
Available-for-sale debt securities, accumulated gross unrealized loss	0	0
Available-for-sale securities, debt securities	63,251	0
Corporate bonds
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract]
Available-for-sale debt securities, amortized cost basis	46,874	42,849
Available-for-sale debt securities, accumulated gross unrealized gain	196	0
Available-for-sale debt securities, accumulated gross unrealized loss	(1,367)	(1,827)
Available-for-sale securities, debt securities	45,703	41,022
Trust preferred securities
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract]
Available-for-sale debt securities, amortized cost basis	11,599	11,719
Available-for-sale debt securities, accumulated gross unrealized gain	192	182
Available-for-sale debt securities, accumulated gross unrealized loss	(52)	0
Available-for-sale securities, debt securities	11,739	11,901
Other bonds and obligations
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract]
Available-for-sale debt securities, amortized cost basis	3,164	3,175
Available-for-sale debt securities, accumulated gross unrealized gain	58	0
Available-for-sale debt securities, accumulated gross unrealized loss	0	(34)
Available-for-sale securities, debt securities	$ 3,222	$ 3,141

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SECURITIES AVAILABLE FOR SALE AND HELD TO MATURITY (Details 2) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Available for sale, Amortized Cost
Within 1 year	$ 0
Over 1 year to 5 years	4,102
Over 5 years to 10 years	32,730
Over 10 years	128,450
Total bonds and obligations	165,282
Marketable equity securities	42,470	$ 30,522
Residential mortgage-backed securities	832,913
Available-for-sale securities, amortized cost basis	1,040,665	1,149,094
Available for sale, Fair Value
Within 1 year	0
Over 1 year to 5 years	4,180
Over 5 years to 10 years	33,345
Over 10 years	134,729
Total bonds and obligations	172,254
Marketable equity securities	48,746	33,967
Residential mortgage-backed securities	852,370
Available for sale securities	1,073,370	1,154,457
Held to maturity, Amortized Cost
Within 1 year	2,799
Over 1 year to 5 years	17,139
Over 5 years to 10 years	13,821
Over 10 years	98,184
Total bonds and obligations	131,943
Residential mortgage-backed securities	67
Held to maturity, amortized cost basis	132,010	131,652
Held to maturity, Fair Value
Within 1 year	2,810
Over 1 year to 5 years	18,186
Over 5 years to 10 years	14,421
Over 10 years	106,052
Total bonds and obligations	141,469
Residential mortgage-backed securities	75
Fair Value	$ 141,544	$ 136,904

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SECURITIES AVAILABLE FOR SALE AND HELD TO MATURITY (Details 3) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss [Abstract]
Available for sale securities, less than twelve months, gross unrealized losses	$ 1,434	$ 3,838
Available for sale securities, over twelve months, gross unrealized losses	1,420	6,574
Available for sale securities, continuous unrealized loss position, accumulated loss	2,854	10,412
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract]
Available for sale securities, continuous unrealized loss position, less than twelve months, fair value	40,468	352,256
Available for sale securities, continuous unrealized loss position, over twelve months, fair value	27,074	206,258
Available for sale securities, continuous unrealized loss position, fair value	67,542	558,514
Held-to-maturity Securities, Continuous Unrealized Loss Position, Accumulated Loss [Abstract]
Held-to-maturity securities, continuous unrealized loss position, less than twelve months, accumulated loss		0
Held-to-maturity securities, continuous unrealized loss position, over twelve months, gross unrealized losses		34
Held to maturity securities, accumulated unrecognized holding loss	0	34
Held-to-maturity Securities, Continuous Unrealized Loss Position, Fair Value [Abstract]
Held to maturity securities, accumulated unrecognized holding loss, less than twelve months, fair value		0
Held to maturity securities, accumulated unrecognized holding loss, over twelve months, fair value		2,143
Held to maturity securities, accumulated unrecognized holding loss, fair value		2,143
Securities available for sale and held to maturity
Held to maturity and available for sale securities continuous unrealized loss position, less than twelve months, aggregate losses	1,434	3,838
Held to maturity and available for sale securities continuous unrealized loss position, less than twelve months, fair value	40,468	352,256
Held to maturity and available for sale securities continuous unrealized loss position, over twelve months, aggregate losses	1,420	6,608
Held to maturity and available for sale securities continuous unrealized loss position, over twelve months, fair value	27,074	208,401
Held to maturity and available for sale securities continuous unrealized loss position, aggregate losses	2,854	10,446
Held to maturity and available for sale securities continuous unrealized loss position, fair value	67,542	560,657
Debt securities
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss [Abstract]
Available for sale securities, less than twelve months, gross unrealized losses	1,231	3,304
Available for sale securities, over twelve months, gross unrealized losses	342	5,222
Available for sale securities, continuous unrealized loss position, accumulated loss	1,573	8,526
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract]
Available for sale securities, continuous unrealized loss position, less than twelve months, fair value	36,617	349,348
Available for sale securities, continuous unrealized loss position, over twelve months, fair value	20,011	200,529
Available for sale securities, continuous unrealized loss position, fair value	56,628	549,877
Debt securities | Municipal bonds and obligations
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss [Abstract]
Available for sale securities, less than twelve months, gross unrealized losses		9
Available for sale securities, over twelve months, gross unrealized losses		115
Available for sale securities, continuous unrealized loss position, accumulated loss		124
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract]
Available for sale securities, continuous unrealized loss position, less than twelve months, fair value		1,587
Available for sale securities, continuous unrealized loss position, over twelve months, fair value		3,400
Available for sale securities, continuous unrealized loss position, fair value		4,987
Debt securities | Agency collateralized mortgage obligations
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss [Abstract]
Available for sale securities, less than twelve months, gross unrealized losses	4	2,958
Available for sale securities, over twelve months, gross unrealized losses	120	2,596
Available for sale securities, continuous unrealized loss position, accumulated loss	124	5,554
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract]
Available for sale securities, continuous unrealized loss position, less than twelve months, fair value	8,824	304,907
Available for sale securities, continuous unrealized loss position, over twelve months, fair value	14,854	136,988
Available for sale securities, continuous unrealized loss position, fair value	23,678	441,895
Debt securities | Agency commercial mortgage-backed securities
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss [Abstract]
Available for sale securities, less than twelve months, gross unrealized losses	15	306
Available for sale securities, over twelve months, gross unrealized losses	15	681
Available for sale securities, continuous unrealized loss position, accumulated loss	30	987
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract]
Available for sale securities, continuous unrealized loss position, less than twelve months, fair value	4,053	34,543
Available for sale securities, continuous unrealized loss position, over twelve months, fair value	734	35,522
Available for sale securities, continuous unrealized loss position, fair value	4,787	70,065
Debt securities | Corporate bonds
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss [Abstract]
Available for sale securities, less than twelve months, gross unrealized losses	1,160	30
Available for sale securities, over twelve months, gross unrealized losses	207	1,796
Available for sale securities, continuous unrealized loss position, accumulated loss	1,367	1,826
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract]
Available for sale securities, continuous unrealized loss position, less than twelve months, fair value	22,536	6,934
Available for sale securities, continuous unrealized loss position, over twelve months, fair value	4,423	21,587
Available for sale securities, continuous unrealized loss position, fair value	26,959	28,521
Debt securities | Trust preferred securities
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss [Abstract]
Available for sale securities, less than twelve months, gross unrealized losses	52	1
Available for sale securities, over twelve months, gross unrealized losses	0	0
Available for sale securities, continuous unrealized loss position, accumulated loss	52	1
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract]
Available for sale securities, continuous unrealized loss position, less than twelve months, fair value	1,204	1,269
Available for sale securities, continuous unrealized loss position, over twelve months, fair value	0	0
Available for sale securities, continuous unrealized loss position, fair value	1,204	1,269
Debt securities | Other bonds and obligations
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss [Abstract]
Available for sale securities, less than twelve months, gross unrealized losses		0
Available for sale securities, over twelve months, gross unrealized losses		34
Available for sale securities, continuous unrealized loss position, accumulated loss		34
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract]
Available for sale securities, continuous unrealized loss position, less than twelve months, fair value		108
Available for sale securities, continuous unrealized loss position, over twelve months, fair value		3,032
Available for sale securities, continuous unrealized loss position, fair value		3,140
Debt securities | Tax advantaged economic development bonds
Held-to-maturity Securities, Continuous Unrealized Loss Position, Accumulated Loss [Abstract]
Held-to-maturity securities, continuous unrealized loss position, less than twelve months, accumulated loss		0
Held-to-maturity securities, continuous unrealized loss position, over twelve months, gross unrealized losses		34
Held to maturity securities, accumulated unrecognized holding loss		34
Held-to-maturity Securities, Continuous Unrealized Loss Position, Fair Value [Abstract]
Held to maturity securities, accumulated unrecognized holding loss, less than twelve months, fair value		0
Held to maturity securities, accumulated unrecognized holding loss, over twelve months, fair value		2,143
Held to maturity securities, accumulated unrecognized holding loss, fair value		2,143
Marketable equity securities
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss [Abstract]
Available for sale securities, less than twelve months, gross unrealized losses	203	534
Available for sale securities, over twelve months, gross unrealized losses	1,078	1,352
Available for sale securities, continuous unrealized loss position, accumulated loss	1,281	1,886
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Abstract]
Available for sale securities, continuous unrealized loss position, less than twelve months, fair value	3,851	2,908
Available for sale securities, continuous unrealized loss position, over twelve months, fair value	7,063	5,729
Available for sale securities, continuous unrealized loss position, fair value	$ 10,914	$ 8,637

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SECURITIES AVAILABLE FOR SALE AND HELD TO MATURITY - Narrative (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2016 USD ($) security	Dec. 31, 2015 USD ($)
Investment Holdings [Line Items]
Securities available for sale, at fair value | $	$ 1,073,370	$ 1,154,457
Level 2
Investment Holdings [Line Items]
Securities available for sale, at fair value | $	1,026,057	$ 1,120,824
Corporate bonds | One Investment | Level 2
Investment Holdings [Line Items]
Securities available for sale, at fair value | $	$ 16,400
Debt securities | Collateralized Mortgage Obligations
Investment Holdings [Line Items]
Available-for-sale, securities in unrealized loss positions (security)	4
Available for sale securities portfolio, number of securities (security)	123
Available for sale and held to maturity securities, continuous unrealized loss position, aggregate losses percentage	0.50%
Debt securities | Residential Mortgage Backed Securities
Investment Holdings [Line Items]
Available-for-sale, securities in unrealized loss positions (security)	12
Available for sale securities portfolio, number of securities (security)	82
Available for sale and held to maturity securities, continuous unrealized loss position, aggregate losses percentage	0.60%
Debt securities | Corporate bonds
Investment Holdings [Line Items]
Available-for-sale, securities in unrealized loss positions (security)	3
Available for sale securities portfolio, number of securities (security)	9
Available for sale and held to maturity securities, continuous unrealized loss position, aggregate losses percentage	4.80%
Debt securities | Corporate bonds | One Investment
Investment Holdings [Line Items]
Available for sale securities gross unrealized loss accumulated in investments | $	$ 1,200
Securities available for sale, at fair value | $	$ 17,600
Debt securities | Trust Preferred Securities
Investment Holdings [Line Items]
Available-for-sale, securities in unrealized loss positions (security)	1
Available for sale securities portfolio, number of securities (security)	3
Available for sale and held to maturity securities, continuous unrealized loss position, aggregate losses percentage	4.20%
Marketable equity securities
Investment Holdings [Line Items]
Available-for-sale, securities in unrealized loss positions (security)	9
Available for sale securities portfolio, number of securities (security)	26
Available for sale and held to maturity securities, continuous unrealized loss position, aggregate losses percentage	10.50%

XML

LOANS (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	$ 6,000,301	$ 5,725,236
Business Activities Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	4,935,813	4,560,683
Acquired Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	1,064,488	1,164,553
Commercial real estate and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	2,237,582	2,059,767
Commercial real estate and industrial | Business Activities Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	1,817,642	1,634,027
Commercial real estate and industrial | Acquired Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	419,940	425,740
Commercial real estate and industrial | Other commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	1,701,427	1,554,491
Commercial real estate and industrial | Other commercial real estate | Business Activities Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	1,354,086	1,209,008
Commercial real estate and industrial | Other commercial real estate | Acquired Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	347,341	345,483
Commercial real estate and industrial | Business loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	1,034,559	1,048,263
Commercial real estate and industrial | Business loans | Business Activities Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	853,088	827,232
Commercial real estate and industrial | Business loans | Acquired Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	181,471	221,031
Commercial real estate and industrial | Business loans | Asset based lending
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	325,476	331,253
Commercial real estate and industrial | Business loans | Asset based lending | Business Activities Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	325,476	331,253
Commercial real estate and industrial | Business loans | Asset based lending | Acquired Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	0	0
Commercial real estate and industrial | Business loans | Other commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	709,083	717,010
Commercial real estate and industrial | Business loans | Other commercial real estate | Business Activities Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	527,612	495,979
Commercial real estate and industrial | Business loans | Other commercial real estate | Acquired Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	181,471	221,031
Commercial real estate and industrial | Single and multi-family
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	287,120	251,606
Commercial real estate and industrial | Single and multi-family | Business Activities Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	244,949	214,823
Commercial real estate and industrial | Single and multi-family | Acquired Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	42,171	36,783
Commercial real estate and industrial | Construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	249,035	253,670
Commercial real estate and industrial | Construction | Business Activities Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	218,607	210,196
Commercial real estate and industrial | Construction | Acquired Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	30,428	43,474
Commercial Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	3,272,141	3,108,030
Commercial Loans | Business Activities Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	2,670,730	2,461,259
Commercial Loans | Acquired Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	601,411	646,771
Residential mortgages | Mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	1,843,600	1,815,035
Residential mortgages | Mortgages | Business Activities Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	1,540,032	1,480,937
Residential mortgages | Mortgages | Acquired Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	303,568	334,098
Residential mortgages | 1-4 family | Mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	1,821,769	1,786,980
Residential mortgages | 1-4 family | Mortgages | Business Activities Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	1,519,067	1,454,233
Residential mortgages | 1-4 family | Mortgages | Acquired Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	302,702	332,747
Residential mortgages | Construction | Mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	21,831	28,055
Residential mortgages | Construction | Mortgages | Business Activities Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	20,965	26,704
Residential mortgages | Construction | Mortgages | Acquired Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	866	1,351
Consumer Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	884,560	802,171
Consumer Loans | Business Activities Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	725,051	618,487
Consumer Loans | Acquired Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	159,509	183,684
Consumer Loans | Home equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	359,911	360,605
Consumer Loans | Home equity | Business Activities Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	310,565	307,159
Consumer Loans | Home equity | Acquired Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	49,346	53,446
Consumer Loans | Auto and other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	524,649	441,566
Consumer Loans | Auto and other | Business Activities Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	414,486	311,328
Consumer Loans | Auto and other | Acquired Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	$ 110,163	$ 130,238

XML

LOANS - Narrative (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	$ 6,000,301	$ 5,725,236
Borrower's sustained repayment performance period	6 months
Acquired Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	$ 1,064,488	1,164,553
Acquired Credit Impaired	19,708	21,362
Certain loans acquired in transfer not accounted for as debt securities, note balance, net	38,200	40,200
Financing receivable not considered impaired at time of acquisition	1,000,000	1,100,000
Residential mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
Foreclosed property	60	675
Mortgages | Residential mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	1,843,600	1,815,035
Process of foreclosure	6,100	7,500
Mortgages | Residential mortgages | Acquired Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	303,568	334,098
Acquired Credit Impaired	$ 1,565	$ 2,572

XML

LOANS (Details 2) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward]
Balance at beginning of period	$ 6,464	$ 3,431	$ 6,925	$ 2,541
Acquisitions	708	4,178	708	4,178
Reclassification from nonaccretable difference for loans with improved cash flows	522	405	1,418	1,736
Reclassification to TDR	0	0	(185)	0
Accretion	(1,481)	(1,474)	(2,653)	(1,915)
Balance at end of period	$ 6,213	$ 6,540	$ 6,213	$ 6,540

XML

LOANS (Details 3) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans	$ 6,000,301	$ 5,725,236
Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	28,257	28,981
Current	4,907,556	4,531,702
Total loans	4,935,813	4,560,683
Past Due 90 days and Accruing	2,852	2,272
Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	10,757	14,184
Acquired Credit Impaired	19,708	21,362
Total loans	1,064,488	1,164,553
Past Due 90 days and Accruing	623	1,422
Commercial real estate and industrial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans	2,237,582	2,059,767
Commercial real estate and industrial | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	7,332	5,993
Current	1,810,310	1,628,034
Total loans	1,817,642	1,634,027
Past Due 90 days and Accruing	2,195	0
Commercial real estate and industrial | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,749	2,361
Acquired Credit Impaired	15,596	15,765
Total loans	419,940	425,740
Past Due 90 days and Accruing	296	127
Commercial real estate and industrial | Other commercial real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans	1,701,427	1,554,491
Commercial real estate and industrial | Other commercial real estate | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans	1,354,086	1,209,008
Commercial real estate and industrial | Other commercial real estate | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans	347,341	345,483
Commercial real estate and industrial | Construction
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans	249,035	253,670
Commercial real estate and industrial | Construction | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	58
Current	218,607	210,138
Total loans	218,607	210,196
Past Due 90 days and Accruing	0	0
Commercial real estate and industrial | Construction | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	0
Acquired Credit Impaired	1,093	1,298
Total loans	30,428	43,474
Past Due 90 days and Accruing	0	0
Commercial real estate and industrial | Single and multi-family
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans	287,120	251,606
Commercial real estate and industrial | Single and multi-family | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	529	295
Current	244,420	214,528
Total loans	244,949	214,823
Past Due 90 days and Accruing	0	0
Commercial real estate and industrial | Single and multi-family | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	733	403
Acquired Credit Impaired	1,546	1,380
Total loans	42,171	36,783
Past Due 90 days and Accruing	296	127
Commercial real estate and industrial | Other | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	6,803	5,640
Current	1,347,283	1,203,368
Total loans	1,354,086	1,209,008
Past Due 90 days and Accruing	2,195	0
Commercial real estate and industrial | Other | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,016	1,958
Acquired Credit Impaired	12,957	13,087
Total loans	347,341	345,483
Past Due 90 days and Accruing	0	0
Commercial real estate and industrial | Business loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans	1,034,559	1,048,263
Commercial real estate and industrial | Business loans | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	9,135	10,077
Current	843,953	817,155
Total loans	853,088	827,232
Past Due 90 days and Accruing	127	146
Commercial real estate and industrial | Business loans | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	2,398	3,139
Acquired Credit Impaired	2,322	2,775
Total loans	181,471	221,031
Past Due 90 days and Accruing	0	785
Commercial real estate and industrial | Business loans | Asset based lending
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans	325,476	331,253
Commercial real estate and industrial | Business loans | Asset based lending | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	0
Current	325,476	331,253
Total loans	325,476	331,253
Past Due 90 days and Accruing	0	0
Commercial real estate and industrial | Business loans | Asset based lending | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	0
Acquired Credit Impaired	0	0
Total loans	0	0
Past Due 90 days and Accruing	0	0
Commercial real estate and industrial | Business loans | Other commercial real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans	709,083	717,010
Commercial real estate and industrial | Business loans | Other commercial real estate | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	9,135	10,077
Current	518,477	485,902
Total loans	527,612	495,979
Past Due 90 days and Accruing	127	146
Commercial real estate and industrial | Business loans | Other commercial real estate | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	2,398	3,139
Acquired Credit Impaired	2,322	2,775
Total loans	181,471	221,031
Past Due 90 days and Accruing	0	785
Residential mortgages | Mortgages
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans	1,843,600	1,815,035
Residential mortgages | Mortgages | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	6,385	8,698
Current	1,533,647	1,472,239
Total loans	1,540,032	1,480,937
Past Due 90 days and Accruing	487	2,006
Residential mortgages | Mortgages | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	3,521	4,771
Acquired Credit Impaired	1,565	2,572
Total loans	303,568	334,098
Past Due 90 days and Accruing	35	212
Residential mortgages | Mortgages | Construction
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans	21,831	28,055
Residential mortgages | Mortgages | Construction | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	44	0
Current	20,921	26,704
Total loans	20,965	26,704
Past Due 90 days and Accruing	0	0
Residential mortgages | Mortgages | Construction | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	0
Acquired Credit Impaired	0	0
Total loans	866	1,351
Past Due 90 days and Accruing	0	0
Residential mortgages | Mortgages | 1-4 family
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans	1,821,769	1,786,980
Residential mortgages | Mortgages | 1-4 family | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	6,341	8,698
Current	1,512,726	1,445,535
Total loans	1,519,067	1,454,233
Past Due 90 days and Accruing	487	2,006
Residential mortgages | Mortgages | 1-4 family | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	3,521	4,771
Acquired Credit Impaired	1,565	2,572
Total loans	302,702	332,747
Past Due 90 days and Accruing	35	212
Consumer Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans	884,560	802,171
Consumer Loans | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	5,405	4,213
Current	719,646	614,274
Total loans	725,051	618,487
Past Due 90 days and Accruing	43	120
Consumer Loans | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	3,089	3,913
Acquired Credit Impaired	225	250
Total loans	159,509	183,684
Past Due 90 days and Accruing	292	298
Consumer Loans | Home equity
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans	359,911	360,605
Consumer Loans | Home equity | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	3,139	2,241
Current	307,426	304,918
Total loans	310,565	307,159
Past Due 90 days and Accruing	43	61
Consumer Loans | Home equity | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	822	1,196
Acquired Credit Impaired	116	118
Total loans	49,346	53,446
Past Due 90 days and Accruing	185	111
Consumer Loans | Auto and other
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans	524,649	441,566
Consumer Loans | Auto and other | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	2,266	1,972
Current	412,220	309,356
Total loans	414,486	311,328
Past Due 90 days and Accruing	0	59
Consumer Loans | Auto and other | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	2,267	2,717
Acquired Credit Impaired	109	132
Total loans	110,163	130,238
Past Due 90 days and Accruing	107	187
30-59 Days Past Due | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	7,083	8,120
30-59 Days Past Due | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	3,256	5,914
30-59 Days Past Due | Commercial real estate and industrial | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,221	1,588
30-59 Days Past Due | Commercial real estate and industrial | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	356	547
30-59 Days Past Due | Commercial real estate and industrial | Construction | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	0
30-59 Days Past Due | Commercial real estate and industrial | Construction | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	0
30-59 Days Past Due | Commercial real estate and industrial | Single and multi-family | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	11	65
30-59 Days Past Due | Commercial real estate and industrial | Single and multi-family | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	341	0
30-59 Days Past Due | Commercial real estate and industrial | Other | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,210	1,523
30-59 Days Past Due | Commercial real estate and industrial | Other | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	15	547
30-59 Days Past Due | Commercial real estate and industrial | Business loans | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	931	1,202
30-59 Days Past Due | Commercial real estate and industrial | Business loans | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	598	1,214
30-59 Days Past Due | Commercial real estate and industrial | Business loans | Asset based lending | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	0
30-59 Days Past Due | Commercial real estate and industrial | Business loans | Asset based lending | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	0
30-59 Days Past Due | Commercial real estate and industrial | Business loans | Other commercial real estate | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	931	1,202
30-59 Days Past Due | Commercial real estate and industrial | Business loans | Other commercial real estate | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	598	1,214
30-59 Days Past Due | Residential mortgages | Mortgages | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,907	3,537
30-59 Days Past Due | Residential mortgages | Mortgages | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	909	2,580
30-59 Days Past Due | Residential mortgages | Mortgages | Construction | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	0
30-59 Days Past Due | Residential mortgages | Mortgages | Construction | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	0
30-59 Days Past Due | Residential mortgages | Mortgages | 1-4 family | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,907	3,537
30-59 Days Past Due | Residential mortgages | Mortgages | 1-4 family | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	909	2,580
30-59 Days Past Due | Consumer Loans | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	3,024	1,793
30-59 Days Past Due | Consumer Loans | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,393	1,573
30-59 Days Past Due | Consumer Loans | Home equity | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,374	563
30-59 Days Past Due | Consumer Loans | Home equity | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	79	82
30-59 Days Past Due | Consumer Loans | Auto and other | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,650	1,230
30-59 Days Past Due | Consumer Loans | Auto and other | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,314	1,491
60-89 Days Past Due | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	3,872	3,105
60-89 Days Past Due | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	672	1,457
60-89 Days Past Due | Commercial real estate and industrial | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	991
60-89 Days Past Due | Commercial real estate and industrial | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	205	219
60-89 Days Past Due | Commercial real estate and industrial | Construction | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	0
60-89 Days Past Due | Commercial real estate and industrial | Construction | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	0
60-89 Days Past Due | Commercial real estate and industrial | Single and multi-family | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	160
60-89 Days Past Due | Commercial real estate and industrial | Single and multi-family | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	176
60-89 Days Past Due | Commercial real estate and industrial | Other | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	831
60-89 Days Past Due | Commercial real estate and industrial | Other | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	205	43
60-89 Days Past Due | Commercial real estate and industrial | Business loans | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	2,270	1,105
60-89 Days Past Due | Commercial real estate and industrial | Business loans | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	17	505
60-89 Days Past Due | Commercial real estate and industrial | Business loans | Asset based lending | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	0
60-89 Days Past Due | Commercial real estate and industrial | Business loans | Asset based lending | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	0
60-89 Days Past Due | Commercial real estate and industrial | Business loans | Other commercial real estate | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	2,270	1,105
60-89 Days Past Due | Commercial real estate and industrial | Business loans | Other commercial real estate | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	17	505
60-89 Days Past Due | Residential mortgages | Mortgages | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,359	857
60-89 Days Past Due | Residential mortgages | Mortgages | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	327	311
60-89 Days Past Due | Residential mortgages | Mortgages | Construction | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	0
60-89 Days Past Due | Residential mortgages | Mortgages | Construction | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	0
60-89 Days Past Due | Residential mortgages | Mortgages | 1-4 family | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,359	857
60-89 Days Past Due | Residential mortgages | Mortgages | 1-4 family | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	327	311
60-89 Days Past Due | Consumer Loans | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	243	152
60-89 Days Past Due | Consumer Loans | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	123	422
60-89 Days Past Due | Consumer Loans | Home equity | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	5	20
60-89 Days Past Due | Consumer Loans | Home equity | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	277
60-89 Days Past Due | Consumer Loans | Auto and other | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	238	132
60-89 Days Past Due | Consumer Loans | Auto and other | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	123	145
90 Days or Greater Past Due | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	17,302	17,756
90 Days or Greater Past Due | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	6,829	6,813
90 Days or Greater Past Due | Commercial real estate and industrial | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	6,111	3,414
90 Days or Greater Past Due | Commercial real estate and industrial | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,188	1,595
90 Days or Greater Past Due | Commercial real estate and industrial | Construction | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	58
90 Days or Greater Past Due | Commercial real estate and industrial | Construction | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	0
90 Days or Greater Past Due | Commercial real estate and industrial | Single and multi-family | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	518	70
90 Days or Greater Past Due | Commercial real estate and industrial | Single and multi-family | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	392	227
90 Days or Greater Past Due | Commercial real estate and industrial | Other | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	5,593	3,286
90 Days or Greater Past Due | Commercial real estate and industrial | Other | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	796	1,368
90 Days or Greater Past Due | Commercial real estate and industrial | Business loans | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	5,934	7,770
90 Days or Greater Past Due | Commercial real estate and industrial | Business loans | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,783	1,420
90 Days or Greater Past Due | Commercial real estate and industrial | Business loans | Asset based lending | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	0
90 Days or Greater Past Due | Commercial real estate and industrial | Business loans | Asset based lending | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	0
90 Days or Greater Past Due | Commercial real estate and industrial | Business loans | Other commercial real estate | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	5,934	7,770
90 Days or Greater Past Due | Commercial real estate and industrial | Business loans | Other commercial real estate | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,783	1,420
90 Days or Greater Past Due | Residential mortgages | Mortgages | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	3,119	4,304
90 Days or Greater Past Due | Residential mortgages | Mortgages | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	2,285	1,880
90 Days or Greater Past Due | Residential mortgages | Mortgages | Construction | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	44	0
90 Days or Greater Past Due | Residential mortgages | Mortgages | Construction | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	0	0
90 Days or Greater Past Due | Residential mortgages | Mortgages | 1-4 family | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	3,075	4,304
90 Days or Greater Past Due | Residential mortgages | Mortgages | 1-4 family | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	2,285	1,880
90 Days or Greater Past Due | Consumer Loans | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	2,138	2,268
90 Days or Greater Past Due | Consumer Loans | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,573	1,918
90 Days or Greater Past Due | Consumer Loans | Home equity | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,760	1,658
90 Days or Greater Past Due | Consumer Loans | Home equity | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	743	837
90 Days or Greater Past Due | Consumer Loans | Auto and other | Business Activities Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	378	610
90 Days or Greater Past Due | Consumer Loans | Auto and other | Acquired Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 830	$ 1,081

XML

LOANS (Details 4) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Non-accrual loans
Non-accrual loans	$ 20,350	$ 20,837
Business Activities Loans
Non-accrual loans
Non-accrual loans	14,450	15,484
Acquired Loans
Non-accrual loans
Non-accrual loans	5,900	5,353
Acquired credit impaired loans
Non-accrual loans
Non-accrual loans	306	39
Commercial real estate and industrial
Non-accrual loans
Non-accrual loans	4,808	4,882
Commercial real estate and industrial | Business Activities Loans
Non-accrual loans
Non-accrual loans	3,916	3,414
Commercial real estate and industrial | Acquired Loans
Non-accrual loans
Non-accrual loans	892	1,468
Commercial real estate and industrial | Construction
Non-accrual loans
Non-accrual loans	0	59
Commercial real estate and industrial | Construction | Business Activities Loans
Non-accrual loans
Non-accrual loans	0	59
Commercial real estate and industrial | Construction | Acquired Loans
Non-accrual loans
Non-accrual loans	0	0
Commercial real estate and industrial | Single and multi-family
Non-accrual loans
Non-accrual loans	614	170
Commercial real estate and industrial | Single and multi-family | Business Activities Loans
Non-accrual loans
Non-accrual loans	518	70
Commercial real estate and industrial | Single and multi-family | Acquired Loans
Non-accrual loans
Non-accrual loans	96	100
Commercial real estate and industrial | Other
Non-accrual loans
Non-accrual loans	4,194	4,653
Commercial real estate and industrial | Other | Business Activities Loans
Non-accrual loans
Non-accrual loans	3,398	3,285
Commercial real estate and industrial | Other | Acquired Loans
Non-accrual loans
Non-accrual loans	796	1,368
Commercial real estate and industrial | Business loans
Non-accrual loans
Non-accrual loans	7,309	8,221
Commercial real estate and industrial | Business loans | Business Activities Loans
Non-accrual loans
Non-accrual loans	5,807	7,624
Commercial real estate and industrial | Business loans | Acquired Loans
Non-accrual loans
Non-accrual loans	1,502	597
Commercial real estate and industrial | Business loans | Other commercial real estate
Non-accrual loans
Non-accrual loans	7,309	8,221
Commercial real estate and industrial | Business loans | Other commercial real estate | Business Activities Loans
Non-accrual loans
Non-accrual loans	5,807	7,624
Commercial real estate and industrial | Business loans | Other commercial real estate | Acquired Loans
Non-accrual loans
Non-accrual loans	1,502	597
Residential mortgages | Mortgages
Non-accrual loans
Non-accrual loans	4,857	3,966
Residential mortgages | Mortgages | Business Activities Loans
Non-accrual loans
Non-accrual loans	2,632	2,298
Residential mortgages | Mortgages | Acquired Loans
Non-accrual loans
Non-accrual loans	2,225	1,668
Residential mortgages | Mortgages | 1-4 family
Non-accrual loans
Non-accrual loans	4,813	3,966
Residential mortgages | Mortgages | 1-4 family | Business Activities Loans
Non-accrual loans
Non-accrual loans	2,588	2,298
Residential mortgages | Mortgages | 1-4 family | Acquired Loans
Non-accrual loans
Non-accrual loans	2,225	1,668
Residential mortgages | Mortgages | Construction
Non-accrual loans
Non-accrual loans	44	0
Residential mortgages | Mortgages | Construction | Business Activities Loans
Non-accrual loans
Non-accrual loans	44	0
Residential mortgages | Mortgages | Construction | Acquired Loans
Non-accrual loans
Non-accrual loans	0	0
Consumer Loans
Non-accrual loans
Non-accrual loans	3,376	3,768
Consumer Loans | Business Activities Loans
Non-accrual loans
Non-accrual loans	2,095	2,148
Consumer Loans | Acquired Loans
Non-accrual loans
Non-accrual loans	1,281	1,620
Consumer Loans | Home equity
Non-accrual loans
Non-accrual loans	2,275	2,324
Consumer Loans | Home equity | Business Activities Loans
Non-accrual loans
Non-accrual loans	1,717	1,597
Consumer Loans | Home equity | Acquired Loans
Non-accrual loans
Non-accrual loans	558	727
Consumer Loans | Auto and other
Non-accrual loans
Non-accrual loans	1,101	1,444
Consumer Loans | Auto and other | Business Activities Loans
Non-accrual loans
Non-accrual loans	378	551
Consumer Loans | Auto and other | Acquired Loans
Non-accrual loans
Non-accrual loans	$ 723	$ 893

XML

LOANS (Details 5) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Loans receivable: balance at end of period
Total loans	$ 6,000,301	$ 5,725,236
Business Activities Loans
Loans receivable: balance at end of period
Individually evaluated for impairment	22,223	23,373
Collectively evaluated	4,913,590	4,537,310
Total loans	4,935,813	4,560,683
Acquired Loans
Loans receivable: balance at end of period
Individually evaluated for impairment	6,156	4,806
Purchased credit-impaired loans	19,708	21,362
Collectively evaluated	1,038,624	1,138,385
Total loans	1,064,488	1,164,553
Commercial real estate and industrial
Loans receivable: balance at end of period
Total loans	2,237,582	2,059,767
Commercial real estate and industrial | Business Activities Loans
Loans receivable: balance at end of period
Individually evaluated for impairment	12,501	11,560
Collectively evaluated	1,805,141	1,622,467
Total loans	1,817,642	1,634,027
Commercial real estate and industrial | Acquired Loans
Loans receivable: balance at end of period
Individually evaluated for impairment	3,924	3,749
Purchased credit-impaired loans	15,596	15,765
Collectively evaluated	400,420	406,226
Total loans	419,940	425,740
Commercial real estate and industrial | Business loans
Loans receivable: balance at end of period
Total loans	1,034,559	1,048,263
Commercial real estate and industrial | Business loans | Business Activities Loans
Loans receivable: balance at end of period
Individually evaluated for impairment	5,081	7,191
Collectively evaluated	848,007	820,041
Total loans	853,088	827,232
Commercial real estate and industrial | Business loans | Acquired Loans
Loans receivable: balance at end of period
Individually evaluated for impairment	1,141	0
Purchased credit-impaired loans	2,322	2,775
Collectively evaluated	178,008	218,256
Total loans	181,471	221,031
Residential mortgages | Mortgages
Loans receivable: balance at end of period
Total loans	1,843,600	1,815,035
Residential mortgages | Mortgages | Business Activities Loans
Loans receivable: balance at end of period
Individually evaluated for impairment	2,906	2,812
Collectively evaluated	1,537,126	1,478,125
Total loans	1,540,032	1,480,937
Residential mortgages | Mortgages | Acquired Loans
Loans receivable: balance at end of period
Individually evaluated for impairment	519	570
Purchased credit-impaired loans	1,565	2,572
Collectively evaluated	301,484	330,956
Total loans	303,568	334,098
Consumer Loans
Loans receivable: balance at end of period
Total loans	884,560	802,171
Consumer Loans | Business Activities Loans
Loans receivable: balance at end of period
Individually evaluated for impairment	1,735	1,810
Collectively evaluated	723,316	616,677
Total loans	725,051	618,487
Consumer Loans | Acquired Loans
Loans receivable: balance at end of period
Individually evaluated for impairment	572	487
Purchased credit-impaired loans	225	250
Collectively evaluated	158,712	182,947
Total loans	$ 159,509	$ 183,684

XML

LOANS (Details 6) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Business Activities Loans
Recorded Investment
Total	$ 21,581	$ 22,947
Unpaid Principal Balance
Total	22,223	23,373
Related Allowance
With an allowance recorded	642	426
Business Activities Loans | Commercial real estate and industrial
Recorded Investment
Total	12,177	11,411
Unpaid Principal Balance
Total	12,501	11,560
Related Allowance
With an allowance recorded	324	149
Business Activities Loans | Commercial real estate and industrial | Construction
Recorded Investment
With no related allowance	0	2,000
With an allowance recorded	0	0
Unpaid Principal Balance
With no related allowance	0	2,000
With an allowance recorded	0	0
Related Allowance
With an allowance recorded	0	0
Business Activities Loans | Commercial real estate and industrial | Single and multi-family
Recorded Investment
With no related allowance	0	0
With an allowance recorded	0	0
Unpaid Principal Balance
With no related allowance	0	0
With an allowance recorded	0	0
Related Allowance
With an allowance recorded	0	0
Business Activities Loans | Commercial real estate and industrial | Other
Recorded Investment
With no related allowance	1,944	4,613
With an allowance recorded	10,233	4,798
Unpaid Principal Balance
With no related allowance	1,944	4,613
With an allowance recorded	10,557	4,947
Related Allowance
With an allowance recorded	324	149
Business Activities Loans | Commercial real estate and industrial | Business loans
Recorded Investment
Total	4,968	7,169
Unpaid Principal Balance
Total	5,081	7,190
Related Allowance
With an allowance recorded	113	21
Business Activities Loans | Commercial real estate and industrial | Business loans | Other commercial real estate
Recorded Investment
With no related allowance	200	5,828
With an allowance recorded	4,768	1,341
Unpaid Principal Balance
With no related allowance	200	5,828
With an allowance recorded	4,881	1,362
Related Allowance
With an allowance recorded	113	21
Business Activities Loans | Residential mortgages | Mortgages
Recorded Investment
Total	2,756	2,660
Unpaid Principal Balance
Total	2,906	2,813
Related Allowance
With an allowance recorded	150	153
Business Activities Loans | Residential mortgages | Mortgages | 1-4 family
Recorded Investment
With no related allowance	1,313	1,181
With an allowance recorded	1,443	1,479
Unpaid Principal Balance
With no related allowance	1,313	1,181
With an allowance recorded	1,593	1,632
Related Allowance
With an allowance recorded	150	153
Business Activities Loans | Consumer Loans
Recorded Investment
Total	1,680	1,707
Unpaid Principal Balance
Total	1,735	1,810
Related Allowance
With an allowance recorded	55	103
Business Activities Loans | Consumer Loans | Home equity
Recorded Investment
With no related allowance	632	702
With an allowance recorded	951	903
Unpaid Principal Balance
With no related allowance	632	702
With an allowance recorded	999	999
Related Allowance
With an allowance recorded	48	96
Business Activities Loans | Consumer Loans | Other
Recorded Investment
With no related allowance	1	1
With an allowance recorded	96	101
Unpaid Principal Balance
With no related allowance	1	1
With an allowance recorded	103	108
Related Allowance
With an allowance recorded	7	7
Acquired Loans
Recorded Investment
Total	5,870	5,325
Unpaid Principal Balance
Total	6,156	5,465
Related Allowance
With an allowance recorded	286	140
Acquired Loans | Commercial real estate and industrial
Recorded Investment
Total	3,748	4,324
Unpaid Principal Balance
Total	3,924	4,409
Related Allowance
With an allowance recorded	176	85
Acquired Loans | Commercial real estate and industrial | Construction
Recorded Investment
With no related allowance	0
With an allowance recorded	0
Unpaid Principal Balance
With no related allowance	0
With an allowance recorded	0
Related Allowance
With an allowance recorded	0
Acquired Loans | Commercial real estate and industrial | Single and multi-family
Recorded Investment
With no related allowance	124
With an allowance recorded	775	638
Unpaid Principal Balance
With no related allowance	124
With an allowance recorded	816	655
Related Allowance
With an allowance recorded	41	17
Acquired Loans | Commercial real estate and industrial | Other
Recorded Investment
With no related allowance	351	1,722
With an allowance recorded	2,498	1,964
Unpaid Principal Balance
With no related allowance	351	1,722
With an allowance recorded	2,633	2,032
Related Allowance
With an allowance recorded	135	68
Acquired Loans | Commercial real estate and industrial | Business loans
Recorded Investment
Total	1,099
Unpaid Principal Balance
Total	1,141
Related Allowance
With an allowance recorded	42
Acquired Loans | Commercial real estate and industrial | Business loans | Other commercial real estate
Recorded Investment
With no related allowance	0
With an allowance recorded	1,099
Total		0
Unpaid Principal Balance
With no related allowance	0
With an allowance recorded	1,141
Total		0
Related Allowance
With an allowance recorded	42	0
Acquired Loans | Residential mortgages | Mortgages
Recorded Investment
Total	484	540
Unpaid Principal Balance
Total	519	570
Related Allowance
With an allowance recorded	35	30
Acquired Loans | Residential mortgages | Mortgages | 1-4 family
Recorded Investment
With no related allowance	188	274
With an allowance recorded	296	266
Unpaid Principal Balance
With no related allowance	188	274
With an allowance recorded	331	296
Related Allowance
With an allowance recorded	35	30
Acquired Loans | Consumer Loans | Home equity
Recorded Investment
With no related allowance	0	117
With an allowance recorded	387	167
Total		461
Unpaid Principal Balance
With no related allowance	0	117
With an allowance recorded	420	192
Total		486
Related Allowance
With an allowance recorded	33	25
Acquired Loans | Consumer Loans | Other
Recorded Investment
With no related allowance	152	177
With an allowance recorded	0
Unpaid Principal Balance
With no related allowance	152	$ 177
With an allowance recorded	0
Related Allowance
With an allowance recorded	0
Acquired Loans | Consumer Loans | Business loans | Home equity
Recorded Investment
Total	539
Unpaid Principal Balance
Total	572
Related Allowance
With an allowance recorded	$ 33

XML

LOANS (Details 7) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Business Activities Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Average recorded investment	$ 24,104	$ 27,244
Interest income, cash basis method	442	329
Business Activities Loans | Commercial real estate and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Average recorded investment	12,906	21,949
Interest income, cash basis method	244	263
Business Activities Loans | Commercial real estate and industrial | Construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Average recorded investment, with no related allowance	0	2,466
Cash basis interest income recognized, with no related allowance	0	1
Recorded investment with related allowance	0	0
Cash basis interest income recognized, with related allowance	0	0
Business Activities Loans | Commercial real estate and industrial | Single and multi-family
Accounts, Notes, Loans and Financing Receivable [Line Items]
Average recorded investment, with no related allowance	72	120
Cash basis interest income recognized, with no related allowance	1	0
Recorded investment with related allowance	0	0
Cash basis interest income recognized, with related allowance	0	0
Business Activities Loans | Commercial real estate and industrial | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Average recorded investment, with no related allowance	2,690	12,734
Cash basis interest income recognized, with no related allowance	3	170
Recorded investment with related allowance	10,144	6,629
Cash basis interest income recognized, with related allowance	240	92
Business Activities Loans | Commercial real estate and industrial | Business loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Average recorded investment, with no related allowance	707	1,447
Cash basis interest income recognized, with no related allowance	16	3
Recorded investment with related allowance	5,576	329
Cash basis interest income recognized, with related allowance	119	2
Average recorded investment	6,283	1,776
Interest income, cash basis method	135	5
Business Activities Loans | Residential mortgages | Mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
Average recorded investment	3,018	3,045
Interest income, cash basis method	39	58
Business Activities Loans | Residential mortgages | Mortgages | 1-4 family
Accounts, Notes, Loans and Financing Receivable [Line Items]
Average recorded investment, with no related allowance	1,409	2,281
Cash basis interest income recognized, with no related allowance	3	41
Recorded investment with related allowance	1,609	764
Cash basis interest income recognized, with related allowance	36	17
Business Activities Loans | Consumer Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Average recorded investment	1,897	474
Interest income, cash basis method	24	3
Business Activities Loans | Consumer Loans | Home equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
Average recorded investment, with no related allowance	792	360
Cash basis interest income recognized, with no related allowance	5	1
Recorded investment with related allowance	999	0
Cash basis interest income recognized, with related allowance	17	0
Business Activities Loans | Consumer Loans | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Average recorded investment, with no related allowance	1	114
Cash basis interest income recognized, with no related allowance	0	2
Recorded investment with related allowance	105	0
Cash basis interest income recognized, with related allowance	2	0
Acquired Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Average recorded investment	5,447	7,897
Interest income, cash basis method	117	201
Acquired Loans | Commercial real estate and industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Average recorded investment	4,141	6,612
Interest income, cash basis method	102	185
Acquired Loans | Commercial real estate and industrial | Construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Average recorded investment, with no related allowance	0	664
Cash basis interest income recognized, with no related allowance	0	60
Recorded investment with related allowance	0	0
Cash basis interest income recognized, with related allowance	0	0
Acquired Loans | Commercial real estate and industrial | Single and multi-family
Accounts, Notes, Loans and Financing Receivable [Line Items]
Average recorded investment, with no related allowance	125	254
Cash basis interest income recognized, with no related allowance	4	0
Recorded investment with related allowance	822	2,872
Cash basis interest income recognized, with related allowance	21	63
Acquired Loans | Commercial real estate and industrial | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Average recorded investment, with no related allowance	596	1,977
Cash basis interest income recognized, with no related allowance	0	3
Recorded investment with related allowance	2,598	845
Cash basis interest income recognized, with related allowance	77	59
Acquired Loans | Commercial real estate and industrial | Business loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Average recorded investment, with no related allowance	154	51
Cash basis interest income recognized, with no related allowance	0	3
Recorded investment with related allowance	233	0
Cash basis interest income recognized, with related allowance	2	0
Average recorded investment	387	51
Interest income, cash basis method	2	3
Acquired Loans | Residential mortgages | Mortgages
Accounts, Notes, Loans and Financing Receivable [Line Items]
Average recorded investment	433	879
Interest income, cash basis method	6	7
Acquired Loans | Residential mortgages | Mortgages | 1-4 family
Accounts, Notes, Loans and Financing Receivable [Line Items]
Average recorded investment, with no related allowance	100	569
Cash basis interest income recognized, with no related allowance	0	2
Recorded investment with related allowance	333	310
Cash basis interest income recognized, with related allowance	6	5
Acquired Loans | Consumer Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Average recorded investment	486	355
Interest income, cash basis method	7	6
Acquired Loans | Consumer Loans | Home equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
Average recorded investment, with no related allowance	0	355
Cash basis interest income recognized, with no related allowance	0	6
Recorded investment with related allowance	326	0
Cash basis interest income recognized, with related allowance	6	0
Acquired Loans | Consumer Loans | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Average recorded investment, with no related allowance	160	0
Cash basis interest income recognized, with no related allowance	1	0
Recorded investment with related allowance	0	0
Cash basis interest income recognized, with related allowance	$ 0	$ 0

XML

LOANS (Details 8) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016 USD ($) modification	Jun. 30, 2015 USD ($) modification	Jun. 30, 2016 USD ($) modification	Jun. 30, 2015 USD ($) modification
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Modifications | modification	1	6	5	8
Pre-Modification Outstanding Recorded Investment	$ 117	$ 11,730	$ 1,317	$ 11,886
Post-Modification Outstanding Recorded Investment	$ 117	$ 11,730	$ 1,317	$ 11,886
Commercial Loans | Construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Modifications | modification		1		1
Pre-Modification Outstanding Recorded Investment		$ 1,877		$ 2,000
Post-Modification Outstanding Recorded Investment		$ 1,877		$ 2,000
Commercial real estate and industrial | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Modifications | modification		1	2	2
Pre-Modification Outstanding Recorded Investment		$ 1,694	$ 1,049	$ 1,694
Post-Modification Outstanding Recorded Investment		$ 1,694	$ 1,049	$ 1,694
Commercial real estate and industrial | Commercial and industrial - Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Modifications | modification		4	2	5
Pre-Modification Outstanding Recorded Investment		$ 8,159	$ 151	$ 8,192
Post-Modification Outstanding Recorded Investment		$ 8,159	$ 151	$ 8,192
Consumer Loans | Consumer - Home Equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Modifications | modification	1		1
Pre-Modification Outstanding Recorded Investment	$ 117		$ 117
Post-Modification Outstanding Recorded Investment	$ 117		$ 117

XML

LOANS (Details 9) - Commercial Loans - Other $ in Thousands	6 Months Ended
	Jun. 30, 2015 USD ($) contract
Accounts, Notes, Loans and Financing Receivable [Line Items]
Modifications that subsequently defaulted, number of contracts | contract	1
Modifications that subsequently defaulted, recorded investment | $	$ 649

XML

LOANS (Details 10) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Trouble Debt Restructuring on Financing Receivables [Roll Forward]
Balance at beginning of the period	$ 23,654	$ 17,204	$ 22,048	$ 16,714
Principal payments	(768)	(607)	(1,109)	(1,091)
TDR status change	0	0	2,236	0
Other reductions/increases	(881)	(611)	(2,370)	(1,793)
Newly identified TDRs	117	9,730	1,317	11,886
Balance at end of the period	$ 22,122	$ 25,716	$ 22,122	$ 25,716

XML

LOAN LOSS ALLOWANCE (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Activity in the allowance for loan losses
Balance at beginning of period			$ 39,308
Provision for loan losses	$ 4,522	$ 4,204	8,528	$ 8,055
Balance at end of period	41,397		41,397
Allowance For Loan Losses
Total	41,397		39,308		$ 41,397
Business Activities Loans
Activity in the allowance for loan losses
Balance at beginning of period			34,574	32,795
Charged-off loans			5,952	5,702
Recoveries on charged-off loans			332	540
Provision for loan losses			8,170	5,593
Balance at end of period	37,124	33,226	37,124	33,226
Allowance For Loan Losses
Individually evaluated for impairment					642	$ 1,823
Collectively evaluated					36,482	31,403
Total	37,124	33,226	34,574	32,795	37,124	33,226
Acquired Loans
Activity in the allowance for loan losses
Balance at beginning of period			4,734	2,867
Charged-off loans			1,145	1,906
Recoveries on charged-off loans			326	548
Provision for loan losses			358	2,462
Balance at end of period	4,273	3,971	4,273	3,971
Allowance For Loan Losses
Individually evaluated for impairment					286	205
Purchased credit-impaired loans					0	0
Collectively evaluated					3,987	3,766
Total	4,273	3,971	4,734	2,867	4,273	3,971
Commercial real estate and industrial | Business Activities Loans
Activity in the allowance for loan losses
Balance at beginning of period			14,508	14,690
Charged-off loans			1,578	4,422
Recoveries on charged-off loans			128	146
Provision for loan losses			3,837	2,553
Balance at end of period	16,895	12,967	16,895	12,967
Allowance For Loan Losses
Individually evaluated for impairment					324	30
Collectively evaluated					16,571	12,937
Total	16,895	12,967	14,508	14,690	16,895	12,967
Commercial real estate and industrial | Acquired Loans
Activity in the allowance for loan losses
Balance at beginning of period			1,903	790
Charged-off loans			126	587
Recoveries on charged-off loans			0	395
Provision for loan losses			363	1,188
Balance at end of period	2,140	1,786	2,140	1,786
Allowance For Loan Losses
Individually evaluated for impairment					177	166
Purchased credit-impaired loans					0	0
Collectively evaluated					1,963	1,620
Total	2,140	1,786	1,903	790	2,140	1,786
Commercial real estate and industrial | Business loans | Business Activities Loans
Activity in the allowance for loan losses
Balance at beginning of period			7,317	5,206
Charged-off loans			2,546	372
Recoveries on charged-off loans			77	154
Provision for loan losses			3,448	4,178
Balance at end of period	8,296	9,166	8,296	9,166
Allowance For Loan Losses
Individually evaluated for impairment					113	1,706
Collectively evaluated					8,183	7,460
Total	8,296	9,166	7,317	5,206	8,296	9,166
Commercial real estate and industrial | Business loans | Acquired Loans
Activity in the allowance for loan losses
Balance at beginning of period			1,330	1,093
Charged-off loans			275	336
Recoveries on charged-off loans			176	56
Provision for loan losses			(455)	160
Balance at end of period	776	973	776	973
Allowance For Loan Losses
Individually evaluated for impairment					42	0
Purchased credit-impaired loans					0	0
Collectively evaluated					734	973
Total	776	973	1,330	1,093	776	973
Residential mortgages | Mortgages | Business Activities Loans
Activity in the allowance for loan losses
Balance at beginning of period			7,566	6,836
Charged-off loans			1,087	446
Recoveries on charged-off loans			5	113
Provision for loan losses			1,042	(32)
Balance at end of period	7,526	6,471	7,526	6,471
Allowance For Loan Losses
Individually evaluated for impairment					150	87
Collectively evaluated					7,376	6,384
Total	7,526	6,471	7,566	6,836	7,526	6,471
Residential mortgages | Mortgages | Acquired Loans
Activity in the allowance for loan losses
Balance at beginning of period			976	615
Charged-off loans			364	375
Recoveries on charged-off loans			104	41
Provision for loan losses			165	527
Balance at end of period	881	808	881	808
Allowance For Loan Losses
Individually evaluated for impairment					35	39
Purchased credit-impaired loans					0	0
Collectively evaluated					846	769
Total	881	808	976	615	881	808
Consumer Loans | Business Activities Loans
Activity in the allowance for loan losses
Balance at beginning of period			4,956	5,928
Charged-off loans			741	462
Recoveries on charged-off loans			122	127
Provision for loan losses			432	(679)
Balance at end of period	4,769	4,914	4,769	4,914
Allowance For Loan Losses
Individually evaluated for impairment					55	0
Collectively evaluated					4,714	4,914
Total	4,769	4,914	4,956	5,928	4,769	4,914
Consumer Loans | Acquired Loans
Activity in the allowance for loan losses
Balance at beginning of period			525	369
Charged-off loans			380	608
Recoveries on charged-off loans			46	56
Provision for loan losses			285	587
Balance at end of period	476	404	476	404
Allowance For Loan Losses
Individually evaluated for impairment					32	0
Purchased credit-impaired loans					0	0
Collectively evaluated					444	404
Total	476	404	525	369	476	404
Unallocated | Business Activities Loans
Activity in the allowance for loan losses
Balance at beginning of period			227	135
Charged-off loans			0	0
Recoveries on charged-off loans			0	0
Provision for loan losses			(589)	(427)
Balance at end of period	(362)	(292)	(362)	(292)
Allowance For Loan Losses
Individually evaluated for impairment					0	0
Collectively evaluated					(362)	(292)
Total	(362)	(292)	227	135	(362)	(292)
Unallocated | Acquired Loans
Activity in the allowance for loan losses
Balance at beginning of period			0	0
Charged-off loans			0	0
Recoveries on charged-off loans			0	0
Provision for loan losses			0	0
Balance at end of period	0	0	0	0
Allowance For Loan Losses
Individually evaluated for impairment					0	0
Purchased credit-impaired loans					0	0
Collectively evaluated					0	0
Total	$ 0	$ 0	$ 0	$ 0	$ 0	$ 0

XML

LOAN LOSS ALLOWANCE - NARRATIVE (Details) $ in Millions	6 Months Ended
	Jun. 30, 2016 USD ($) grade
Acquired Loans
Credit quality information
Number of grades in internal loan rating system (grade)	11
Allowance for losses on acquired loans under Subtopic ASC 310-30 | $	$ 4.3
Other | Consumer Loans
Credit quality information
Number of grades in internal loan rating system (grade)	2
Performing | Maximum | Other | Consumer Loans
Credit quality information
Period within which loans are current, based on which risk rating is assigned (in days)	119 days
Nonperforming | Minimum | Other | Consumer Loans
Credit quality information
Delinquency period of loans based on which risk rating is assigned to loans (in days)	120 days
Mortgages | Residential mortgages
Credit quality information
Number of grades in internal loan rating system (grade)	3
Mortgages | Pass | Maximum | Residential mortgages
Credit quality information
Delinquency period of loans based on which risk rating is assigned to loans (in days)	59 days
Mortgages | Special mention | Minimum | Residential mortgages
Credit quality information
Delinquency period of loans based on which risk rating is assigned to loans (in days)	60 days
Mortgages | Special mention | Maximum | Residential mortgages
Credit quality information
Delinquency period of loans based on which risk rating is assigned to loans (in days)	89 days
Mortgages | Substandard | Minimum | Residential mortgages
Credit quality information
Delinquency period of loans based on which risk rating is assigned to loans (in days)	90 days

XML

LOAN LOSS ALLOWANCE (Details 2) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Credit quality information
Total Loans	$ 6,000,301	$ 5,725,236
Business Activities Loans
Credit quality information
Total Loans	4,935,813	4,560,683
Acquired Loans
Credit quality information
Total Loans	1,064,488	1,164,553
Commercial real estate and industrial
Credit quality information
Total Loans	2,237,582	2,059,767
Commercial real estate and industrial | Business Activities Loans
Credit quality information
Total Loans	1,817,642	1,634,027
Commercial real estate and industrial | Acquired Loans
Credit quality information
Total Loans	419,940	425,740
Commercial real estate and industrial | Other commercial real estate
Credit quality information
Total Loans	1,701,427	1,554,491
Commercial real estate and industrial | Other commercial real estate | Business Activities Loans
Credit quality information
Total Loans	1,354,086	1,209,008
Commercial real estate and industrial | Other commercial real estate | Acquired Loans
Credit quality information
Total Loans	347,341	345,483
Commercial real estate and industrial | Construction
Credit quality information
Total Loans	249,035	253,670
Commercial real estate and industrial | Construction | Business Activities Loans
Credit quality information
Total Loans	218,607	210,196
Commercial real estate and industrial | Construction | Acquired Loans
Credit quality information
Total Loans	30,428	43,474
Commercial real estate and industrial | Single and multi-family
Credit quality information
Total Loans	287,120	251,606
Commercial real estate and industrial | Single and multi-family | Business Activities Loans
Credit quality information
Total Loans	244,949	214,823
Commercial real estate and industrial | Single and multi-family | Acquired Loans
Credit quality information
Total Loans	42,171	36,783
Commercial real estate and industrial | Other | Business Activities Loans
Credit quality information
Total Loans	1,354,086	1,209,008
Commercial real estate and industrial | Other | Acquired Loans
Credit quality information
Total Loans	347,341	345,483
Commercial real estate and industrial | Business loans
Credit quality information
Total Loans	1,034,559	1,048,263
Commercial real estate and industrial | Business loans | Business Activities Loans
Credit quality information
Total Loans	853,088	827,232
Commercial real estate and industrial | Business loans | Acquired Loans
Credit quality information
Total Loans	181,471	221,031
Commercial real estate and industrial | Business loans | Asset based lending
Credit quality information
Total Loans	325,476	331,253
Commercial real estate and industrial | Business loans | Asset based lending | Business Activities Loans
Credit quality information
Total Loans	325,476	331,253
Commercial real estate and industrial | Business loans | Asset based lending | Acquired Loans
Credit quality information
Total Loans	0	0
Commercial real estate and industrial | Business loans | Other commercial real estate
Credit quality information
Total Loans	709,083	717,010
Commercial real estate and industrial | Business loans | Other commercial real estate | Business Activities Loans
Credit quality information
Total Loans	527,612	495,979
Commercial real estate and industrial | Business loans | Other commercial real estate | Acquired Loans
Credit quality information
Total Loans	181,471	221,031
Residential mortgages | Mortgages
Credit quality information
Total Loans	1,843,600	1,815,035
Residential mortgages | Mortgages | Business Activities Loans
Credit quality information
Total Loans	1,540,032	1,480,937
Residential mortgages | Mortgages | Acquired Loans
Credit quality information
Total Loans	303,568	334,098
Residential mortgages | Mortgages | 1-4 family
Credit quality information
Total Loans	1,821,769	1,786,980
Residential mortgages | Mortgages | 1-4 family | Business Activities Loans
Credit quality information
Total Loans	1,519,067	1,454,233
Residential mortgages | Mortgages | 1-4 family | Acquired Loans
Credit quality information
Total Loans	302,702	332,747
Residential mortgages | Mortgages | Construction
Credit quality information
Total Loans	21,831	28,055
Residential mortgages | Mortgages | Construction | Business Activities Loans
Credit quality information
Total Loans	20,965	26,704
Residential mortgages | Mortgages | Construction | Acquired Loans
Credit quality information
Total Loans	866	1,351
Consumer Loans
Credit quality information
Total Loans	884,560	802,171
Consumer Loans | Business Activities Loans
Credit quality information
Total Loans	725,051	618,487
Consumer Loans | Acquired Loans
Credit quality information
Total Loans	159,509	183,684
Consumer Loans | Home equity
Credit quality information
Total Loans	359,911	360,605
Consumer Loans | Home equity | Business Activities Loans
Credit quality information
Total Loans	310,565	307,159
Consumer Loans | Home equity | Acquired Loans
Credit quality information
Total Loans	49,346	53,446
Consumer Loans | Auto and other
Credit quality information
Total Loans	524,649	441,566
Consumer Loans | Auto and other | Business Activities Loans
Credit quality information
Total Loans	414,486	311,328
Consumer Loans | Auto and other | Acquired Loans
Credit quality information
Total Loans	110,163	130,238
Pass | Commercial real estate and industrial | Business Activities Loans
Credit quality information
Total Loans	1,767,448	1,576,808
Pass | Commercial real estate and industrial | Acquired Loans
Credit quality information
Total Loans	394,774	399,586
Pass | Commercial real estate and industrial | Construction | Business Activities Loans
Credit quality information
Total Loans	218,607	208,138
Pass | Commercial real estate and industrial | Construction | Acquired Loans
Credit quality information
Total Loans	29,335	42,176
Pass | Commercial real estate and industrial | Single and multi-family | Business Activities Loans
Credit quality information
Total Loans	242,207	212,900
Pass | Commercial real estate and industrial | Single and multi-family | Acquired Loans
Credit quality information
Total Loans	36,845	32,796
Pass | Commercial real estate and industrial | Other | Business Activities Loans
Credit quality information
Total Loans	1,306,634	1,155,770
Pass | Commercial real estate and industrial | Other | Acquired Loans
Credit quality information
Total Loans	328,594	324,614
Pass | Commercial real estate and industrial | Business loans | Business Activities Loans
Credit quality information
Total Loans	820,500	786,963
Pass | Commercial real estate and industrial | Business loans | Acquired Loans
Credit quality information
Total Loans	173,306	212,825
Pass | Commercial real estate and industrial | Business loans | Asset based lending | Business Activities Loans
Credit quality information
Total Loans	325,476	331,253
Pass | Commercial real estate and industrial | Business loans | Asset based lending | Acquired Loans
Credit quality information
Total Loans	0	0
Pass | Commercial real estate and industrial | Business loans | Other commercial real estate | Business Activities Loans
Credit quality information
Total Loans	495,024	455,710
Pass | Commercial real estate and industrial | Business loans | Other commercial real estate | Acquired Loans
Credit quality information
Total Loans	173,306	212,825
Pass | Residential mortgages | Mortgages | Business Activities Loans
Credit quality information
Total Loans	1,535,553	1,475,777
Pass | Residential mortgages | Mortgages | Acquired Loans
Credit quality information
Total Loans	300,775	330,726
Pass | Residential mortgages | Mortgages | 1-4 family | Business Activities Loans
Credit quality information
Total Loans	1,514,633	1,449,073
Pass | Residential mortgages | Mortgages | 1-4 family | Acquired Loans
Credit quality information
Total Loans	299,909	329,375
Pass | Residential mortgages | Mortgages | Construction | Business Activities Loans
Credit quality information
Total Loans	20,920	26,704
Pass | Residential mortgages | Mortgages | Construction | Acquired Loans
Credit quality information
Total Loans	866	1,351
Special mention
Credit quality information
Total Loans	25,216	31,295
Special mention | Business Activities Loans
Credit quality information
Total Loans	23,105	29,036
Special mention | Acquired Loans
Credit quality information
Total Loans	2,111	2,259
Special mention | Commercial real estate and industrial | Business Activities Loans
Credit quality information
Total Loans	10,249	3,449
Special mention | Commercial real estate and industrial | Acquired Loans
Credit quality information
Total Loans	1,146	1,007
Special mention | Commercial real estate and industrial | Construction | Business Activities Loans
Credit quality information
Total Loans	0	0
Special mention | Commercial real estate and industrial | Construction | Acquired Loans
Credit quality information
Total Loans	0	0
Special mention | Commercial real estate and industrial | Single and multi-family | Business Activities Loans
Credit quality information
Total Loans	362	0
Special mention | Commercial real estate and industrial | Single and multi-family | Acquired Loans
Credit quality information
Total Loans	0	655
Special mention | Commercial real estate and industrial | Other | Business Activities Loans
Credit quality information
Total Loans	9,887	3,449
Special mention | Commercial real estate and industrial | Other | Acquired Loans
Credit quality information
Total Loans	1,146	352
Special mention | Commercial real estate and industrial | Business loans | Business Activities Loans
Credit quality information
Total Loans	11,253	24,578
Special mention | Commercial real estate and industrial | Business loans | Acquired Loans
Credit quality information
Total Loans	515	487
Special mention | Commercial real estate and industrial | Business loans | Asset based lending | Business Activities Loans
Credit quality information
Total Loans	0	0
Special mention | Commercial real estate and industrial | Business loans | Asset based lending | Acquired Loans
Credit quality information
Total Loans	0	0
Special mention | Commercial real estate and industrial | Business loans | Other commercial real estate | Business Activities Loans
Credit quality information
Total Loans	11,253	24,578
Special mention | Commercial real estate and industrial | Business loans | Other commercial real estate | Acquired Loans
Credit quality information
Total Loans	515	487
Special mention | Residential mortgages | Mortgages | Business Activities Loans
Credit quality information
Total Loans	1,359	857
Special mention | Residential mortgages | Mortgages | Acquired Loans
Credit quality information
Total Loans	327	311
Special mention | Residential mortgages | Mortgages | 1-4 family | Business Activities Loans
Credit quality information
Total Loans	1,359	857
Special mention | Residential mortgages | Mortgages | 1-4 family | Acquired Loans
Credit quality information
Total Loans	327	311
Special mention | Residential mortgages | Mortgages | Construction | Business Activities Loans
Credit quality information
Total Loans	0	0
Special mention | Residential mortgages | Mortgages | Construction | Acquired Loans
Credit quality information
Total Loans	0	0
Substandard
Credit quality information
Total Loans	81,733	93,109
Substandard | Business Activities Loans
Credit quality information
Total Loans	52,086	60,549
Substandard | Acquired Loans
Credit quality information
Total Loans	29,647	32,560
Substandard | Commercial real estate and industrial | Business Activities Loans
Credit quality information
Total Loans	39,908	53,697
Substandard | Commercial real estate and industrial | Acquired Loans
Credit quality information
Total Loans	24,020	25,147
Substandard | Commercial real estate and industrial | Construction | Business Activities Loans
Credit quality information
Total Loans	0	2,058
Substandard | Commercial real estate and industrial | Construction | Acquired Loans
Credit quality information
Total Loans	1,093	1,298
Substandard | Commercial real estate and industrial | Single and multi-family | Business Activities Loans
Credit quality information
Total Loans	2,380	1,923
Substandard | Commercial real estate and industrial | Single and multi-family | Acquired Loans
Credit quality information
Total Loans	5,326	3,332
Substandard | Commercial real estate and industrial | Other | Business Activities Loans
Credit quality information
Total Loans	37,528	49,716
Substandard | Commercial real estate and industrial | Other | Acquired Loans
Credit quality information
Total Loans	17,601	20,517
Substandard | Commercial real estate and industrial | Business loans | Business Activities Loans
Credit quality information
Total Loans	21,335	15,691
Substandard | Commercial real estate and industrial | Business loans | Acquired Loans
Credit quality information
Total Loans	7,650	7,719
Substandard | Commercial real estate and industrial | Business loans | Asset based lending | Business Activities Loans
Credit quality information
Total Loans	0	0
Substandard | Commercial real estate and industrial | Business loans | Asset based lending | Acquired Loans
Credit quality information
Total Loans	0	0
Substandard | Commercial real estate and industrial | Business loans | Other commercial real estate | Business Activities Loans
Credit quality information
Total Loans	21,335	15,691
Substandard | Commercial real estate and industrial | Business loans | Other commercial real estate | Acquired Loans
Credit quality information
Total Loans	7,650	7,719
Substandard | Residential mortgages | Mortgages | Business Activities Loans
Credit quality information
Total Loans	3,120	4,303
Substandard | Residential mortgages | Mortgages | Acquired Loans
Credit quality information
Total Loans	2,466	3,061
Substandard | Residential mortgages | Mortgages | 1-4 family | Business Activities Loans
Credit quality information
Total Loans	3,075	4,303
Substandard | Residential mortgages | Mortgages | 1-4 family | Acquired Loans
Credit quality information
Total Loans	2,466	3,061
Substandard | Residential mortgages | Mortgages | Construction | Business Activities Loans
Credit quality information
Total Loans	45	0
Substandard | Residential mortgages | Mortgages | Construction | Acquired Loans
Credit quality information
Total Loans	0	0
Doubtful | Commercial real estate and industrial | Business Activities Loans
Credit quality information
Total Loans	37	73
Doubtful | Commercial real estate and industrial | Construction | Business Activities Loans
Credit quality information
Total Loans	0	0
Doubtful | Commercial real estate and industrial | Single and multi-family | Business Activities Loans
Credit quality information
Total Loans	0	0
Doubtful | Commercial real estate and industrial | Other | Business Activities Loans
Credit quality information
Total Loans	37	73
Performing | Consumer Loans | Business Activities Loans
Credit quality information
Total Loans	722,956	616,339
Performing | Consumer Loans | Acquired Loans
Credit quality information
Total Loans	158,228	182,064
Performing | Consumer Loans | Home equity | Business Activities Loans
Credit quality information
Total Loans	308,848	305,562
Performing | Consumer Loans | Home equity | Acquired Loans
Credit quality information
Total Loans	48,788	52,719
Performing | Consumer Loans | Auto and other | Business Activities Loans
Credit quality information
Total Loans	414,108	310,777
Performing | Consumer Loans | Auto and other | Acquired Loans
Credit quality information
Total Loans	109,440	129,345
Nonperforming | Consumer Loans | Business Activities Loans
Credit quality information
Total Loans	2,095	2,148
Nonperforming | Consumer Loans | Acquired Loans
Credit quality information
Total Loans	1,281	1,620
Nonperforming | Consumer Loans | Home equity | Business Activities Loans
Credit quality information
Total Loans	1,717	1,597
Nonperforming | Consumer Loans | Home equity | Acquired Loans
Credit quality information
Total Loans	558	727
Nonperforming | Consumer Loans | Auto and other | Business Activities Loans
Credit quality information
Total Loans	378	551
Nonperforming | Consumer Loans | Auto and other | Acquired Loans
Credit quality information
Total Loans	723	893
Non-Accrual
Credit quality information
Total Loans	20,656	20,875
Non-Accrual | Business Activities Loans
Credit quality information
Total Loans	14,450	15,484
Non-Accrual | Acquired Loans
Credit quality information
Total Loans	6,206	5,391
Total Classified
Credit quality information
Total Loans	102,389	113,984
Total Classified | Business Activities Loans
Credit quality information
Total Loans	66,536	76,033
Total Classified | Acquired Loans
Credit quality information
Total Loans	35,853	37,951
Total Criticized
Credit quality information
Total Loans	127,605	145,279
Total Criticized | Business Activities Loans
Credit quality information
Total Loans	89,641	105,069
Total Criticized | Acquired Loans
Credit quality information
Total Loans	$ 37,964	$ 40,210

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DEPOSITS (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Deposits [Abstract]
Time less than $100,000	$ 544,761	$ 545,819
Time $100,000 or more	1,545,341	1,440,781
Total time deposits	2,090,102	1,986,600
Brokered time deposits	823,300	784,100
Reciprocal deposits	$ 106,400	$ 101,500

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BORROWED FUNDS (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Debt Instrument [Line Items]
Short-term borrowings	$ 1,110,320	$ 1,071,200
Long-term borrowings	209,916	192,118
Total borrowings	$ 1,320,236	$ 1,263,318
Weighted average rate on short-term borrowings	0.54%	0.43%
Weighted average rate on long-term borrowings	3.57%	3.88%
Weighted Average Rate	1.02%	0.96%
Advances from the FHLBB
Debt Instrument [Line Items]
Short-term borrowings	$ 1,110,320	$ 1,071,200
Long-term borrowings	$ 120,844	$ 103,135
Weighted average rate on short-term borrowings	0.54%	0.43%
Weighted average rate on long-term borrowings	1.62%	1.89%
Other Borrowings
Debt Instrument [Line Items]
Short-term borrowings	$ 0	$ 0
Weighted average rate on short-term borrowings	0.00%	0.00%
Subordinated borrowings
Debt Instrument [Line Items]
Long-term borrowings	$ 73,608	$ 73,519
Weighted average rate on long-term borrowings	7.00%	7.00%
Junior subordinated borrowings
Debt Instrument [Line Items]
Long-term borrowings	$ 15,464	$ 15,464
Weighted average rate on long-term borrowings	2.50%	2.23%

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BORROWED FUNDS - NARRATIVE (Details) - USD ($)	1 Months Ended	6 Months Ended
	Sep. 30, 2012	Jun. 30, 2016	Dec. 31, 2015
Debt Instrument [Line Items]
Line of credit, current		$ 3,000,000
Short-term debt		1,110,320,000	$ 1,071,200,000
Long-term borrowings		209,916,000	192,118,000
Advances from the FHLBB
Debt Instrument [Line Items]
Long-term line of credit		0	0
Short-term debt		1,110,320,000	1,071,200,000
Long-term borrowings		120,844,000	103,135,000
Federal Reserve Bank Advances
Debt Instrument [Line Items]
Short-term debt		0	0
Federal Home Loan Bank Certificates And Obligations F H L B Callable Advances
Debt Instrument [Line Items]
Long-term borrowings		11,000,000	11,000,000
Federal Home Loan Bank Certificates And Obligations F H L B Amortizing Advances
Debt Instrument [Line Items]
Long-term borrowings		1,200,000	1,200,000
Subordinated borrowings
Debt Instrument [Line Items]
Long-term borrowings		73,608,000	73,519,000
Maturity period (in years)	15 years
Principal amount of debt issued	$ 75,000,000.0
Discount rate (as a percent)	1.15%
Fixed interest rate	6.875%
Maturity period with fixed interest rate (in months)	10 years
Subordinated borrowings | Three-month LIBOR rate
Debt Instrument [Line Items]
Interest rate margin	5.113%
Unamortized debt issuance expense		768,000	829,000
Junior subordinated borrowings
Debt Instrument [Line Items]
Long-term borrowings		$ 15,464,000	$ 15,464,000
Junior subordinated borrowings | Trust I
Debt Instrument [Line Items]
Common stock of trust		100.00%
Common stock of trust included in other asset		$ 500,000
Sole asset of trust in form of debt		$ 15,500,000
Variable interest rate		2.50%	2.23%
Junior subordinated borrowings | Trust I | Maximum
Debt Instrument [Line Items]
Period up to which interest payments can be deferred (in years)		5 years
Junior subordinated borrowings | LIBOR | Trust I
Debt Instrument [Line Items]
Interest rate margin		1.85%

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BORROWED FUNDS (Details 2) - Fixed rate advances $ in Thousands	Jun. 30, 2016 USD ($)
Principal
2016	$ 1,131,862
2017	83,235
2018	1,022
2019	0
2020 and beyond	15,045
Total FHLBB advances	$ 1,231,164
Weighted Average
Weighted Average Rate (as a percent)
2016	0.56%
2017	1.49%
2018	2.62%
2019	0.00%
2020 and beyond	2.41%
Total FHLBB advances	0.65%

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CAPITAL RATIOS AND SHAREHOLDERS' EQUITY (Details)	Jun. 30, 2016	Dec. 31, 2015
Tier 1 capital to risk-weighted assets
Total capital to risk weighted assets	11.40%	11.90%
Common Equity Tier 1 Capital to risk weighted assets	9.30%	9.80%
Tier 1 capital to risk weighted assets	9.50%	9.90%
Tier 1 capital to average assets	7.70%	7.70%
Regulatory minimum to be well capitalized, Total capital to risk weighted assets	10.00%	10.00%
Regulatory minimum to be well capitalized, Common Equity Tier 1 Capital to risk weighted assets	6.50%	6.50%
Regulatory minimum to be well capitalized, Tier 1 capital to risk weighted assets	8.00%	8.00%
Regulatory minimum to be well capitalized, Tier 1 capital to average assets	5.00%	5.00%
Bank
Tier 1 capital to risk-weighted assets
Total capital to risk weighted assets	10.60%	11.20%
Common Equity Tier 1 Capital to risk weighted assets	9.40%	9.90%
Tier 1 capital to risk weighted assets	9.40%	9.90%
Tier 1 capital to average assets	7.60%	7.70%
Regulatory minimum to be well capitalized, Total capital to risk weighted assets	10.00%	10.00%
Regulatory minimum to be well capitalized, Common Equity Tier 1 Capital to risk weighted assets	6.50%	6.50%
Regulatory minimum to be well capitalized, Tier 1 capital to risk weighted assets	8.00%	8.00%
Regulatory minimum to be well capitalized, Tier 1 capital to average assets	5.00%	5.00%

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CAPITAL RATIOS AND SHAREHOLDERS' EQUITY (Details 2) - USD ($) $ in Thousands	Jun. 30, 2016		Mar. 31, 2016	Dec. 31, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014
Accumulated other comprehensive income	$ 923,420	[1]		$ 887,189	$ 827,151		$ 709,287
Net unrealized holding gain on AFS securities
Other accumulated comprehensive income (loss), before tax:	33,609			6,316
Income taxes related to items of accumulated other comprehensive income:	(12,984)			(2,437)
Accumulated other comprehensive income	20,625		$ 14,730	3,880	5,677	$ 15,648	9,916
Net loss on effective cash flow hedging derivatives
Other accumulated comprehensive income (loss), before tax:	(13,921)			(8,532)
Income taxes related to items of accumulated other comprehensive income:	5,586			3,425
Accumulated other comprehensive income	(8,335)		(7,806)	(5,108)	(3,830)	(4,298)	(1,969)
Net unrealized holding loss on pension plans
Other accumulated comprehensive income (loss), before tax:	(3,468)			(3,469)
Income taxes related to items of accumulated other comprehensive income:	1,391			1,392
Accumulated other comprehensive income	(2,077)		(2,077)	(2,077)	(2,243)	(2,282)	(1,368)
Accumulated other comprehensive (loss) income
Accumulated other comprehensive income	$ 10,213	[1]	$ 4,847	$ (3,305)	$ (396)	$ 9,068	$ 6,579

[1] The Company's common stock includes the elimination of $2.9 million (108,931 shares) of Berkshire Hills Bancorp stock held by a subsidiary.

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CAPITAL RATIOS AND SHAREHOLDERS' EQUITY (Details 3) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Net unrealized gain (loss) arising during the period
Net of Tax	$ 4,827	$ (7,976)	$ 12,758	$ (5,505)
Less: reclassification adjustment for losses realized in net income
Net of Tax	539	(1,488)	760	(1,470)
Other Comprehensive Income
Before Tax	8,702	(15,222)	21,903	(11,317)
Tax Effect	(3,336)	5,758	(8,385)	4,342
Total other comprehensive income (loss)	5,366	(9,464)	13,518	(6,975)
Net unrealized holding gain on AFS securities
Net unrealized gain (loss) arising during the period
Before Tax	9,573	(13,687)	27,315	(4,316)
Tax Effect	(3,686)	5,243	(10,556)	1,625
Net of Tax	5,887	(8,444)	16,759	(2,691)
Less: reclassification adjustment for losses realized in net income
Before Tax	13	(2,384)	(22)	(2,418)
Tax Effect	(5)	857	8	870
Net of Tax	8	(1,527)	(14)	(1,548)
Other Comprehensive Income
Before Tax	9,586	(16,071)	27,293	(6,734)
Tax Effect	(3,691)	6,100	(10,548)	2,495
Total other comprehensive income (loss)	5,895	(9,971)	16,745	(4,239)
Net loss on effective cash flow hedging derivatives
Net unrealized gain (loss) arising during the period
Before Tax	(1,771)	784	(6,684)	(3,117)
Tax Effect	711	(316)	2,683	1,256
Net of Tax	(1,060)	468	(4,001)	(1,861)
Less: reclassification adjustment for losses realized in net income
Before Tax	887	0	1,294	0
Tax Effect	(356)	0	(520)	0
Net of Tax	531	0	774	0
Other Comprehensive Income
Before Tax	(884)	784	(5,390)	(3,117)
Tax Effect	355	(316)	2,163	1,256
Total other comprehensive income (loss)	(529)	468	(3,227)	(1,861)
Net unrealized holding loss on pension plans
Net unrealized gain (loss) arising during the period
Before Tax	0	0	0	(1,596)
Tax Effect	0	0	0	643
Net of Tax	0	0	0	(953)
Less: reclassification adjustment for losses realized in net income
Before Tax	0	65	0	130
Tax Effect	0	(26)	0	(52)
Net of Tax	0	39	0	78
Other Comprehensive Income
Before Tax	0	65	0	(1,466)
Tax Effect	0	(26)	0	591
Total other comprehensive income (loss)	$ 0	$ 39	$ 0	$ (875)

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CAPITAL RATIOS AND SHAREHOLDERS' EQUITY (Details 4) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance at Beginning of Period			$ 887,189	$ 709,287
Other Comprehensive Gain (Loss) Before reclassifications	$ 4,827	$ (7,976)	12,758	(5,505)
Amounts Reclassified from Accumulated other comprehensive income	539	(1,488)	760	(1,470)
Total other comprehensive income (loss)	5,366	(9,464)	13,518	(6,975)
Balance at End of Period	10,213		10,213
Net unrealized holding gain on AFS securities
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance at Beginning of Period	14,730	15,648	3,880	9,916
Other Comprehensive Gain (Loss) Before reclassifications	5,887	(8,444)	16,759	(2,691)
Amounts Reclassified from Accumulated other comprehensive income	8	(1,527)	(14)	(1,548)
Total other comprehensive income (loss)	5,895	(9,971)	16,745	(4,239)
Net loss on effective cash flow hedging derivatives
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance at Beginning of Period	(7,806)	(4,298)	(5,108)	(1,969)
Other Comprehensive Gain (Loss) Before reclassifications	(1,060)	468	(4,001)	(1,861)
Amounts Reclassified from Accumulated other comprehensive income	531	0	774	0
Total other comprehensive income (loss)	(529)	468	(3,227)	(1,861)
Net unrealized holding loss on pension plans
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance at Beginning of Period	(2,077)	(2,282)	(2,077)	(1,368)
Other Comprehensive Gain (Loss) Before reclassifications	0	0	0	(953)
Amounts Reclassified from Accumulated other comprehensive income	0	39	0	78
Total other comprehensive income (loss)	0	39	0	(875)
Accumulated other comprehensive (loss) income
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance at Beginning of Period	$ 4,847	$ 9,068	(3,305)	6,579
Total other comprehensive income (loss)			$ 13,518	$ (6,975)

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CAPITAL RATIOS AND SHAREHOLDERS' EQUITY (Details 5) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Amounts reclassified out of each component of accumulated other comprehensive income
Non-interest income	$ (14,555)	$ (16,780)	$ (30,185)	$ (29,342)
Income tax expense (benefit)	5,249	1,144	11,469	1,441
Net income (loss)	(15,957)	(10,044)	(31,958)	(18,803)
Amount Reclassified From Accumulated Other Comprehensive Income (loss)
Amounts reclassified out of each component of accumulated other comprehensive income
Net income (loss)	539	(1,488)	760	(1,470)
Net unrealized holding gain on AFS securities | Amount Reclassified From Accumulated Other Comprehensive Income (loss)
Amounts reclassified out of each component of accumulated other comprehensive income
Non-interest income	13	(2,384)	(23)	(2,418)
Income tax expense (benefit)	(5)	857	9	870
Net income (loss)	8	(1,527)	(14)	(1,548)
Net loss on effective cash flow hedging derivatives | Amount Reclassified From Accumulated Other Comprehensive Income (loss)
Amounts reclassified out of each component of accumulated other comprehensive income
Non-interest income	887	0	1,295	0
Income tax expense (benefit)	(356)	0	(521)	0
Net income (loss)	531	0	774	0
Net unrealized holding loss on pension plans | Amount Reclassified From Accumulated Other Comprehensive Income (loss)
Amounts reclassified out of each component of accumulated other comprehensive income
Non-interest income	0	65	0	130
Income tax expense (benefit)	0	(26)	0	(52)
Net income (loss)	$ 0	$ 39	$ 0	$ 78

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EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Earnings per share
Net income	$ 15,957	$ 10,044	$ 31,958	$ 18,803
Average number of common shares issued (shares)	32,213	29,975	32,188	28,260
Less: average number of treasury shares (shares)	1,075	1,193	1,107	1,244
Less: average number of unvested stock award shares (shares)	533	481	520	459
Average number of basic common shares outstanding (shares)	30,605	28,301	30,561	26,557
Average number of diluted common shares outstanding (shares)	30,765	28,461	30,725	26,713
Earnings per share:
Basic (USD per share)	$ 0.52	$ 0.35	$ 1.05	$ 0.71
Diluted (USD per share)	$ 0.52	$ 0.35	$ 1.04	$ 0.70
Unvested Stock Award shares
Earnings per share
Plus: dilutive effect of share-based payment arrangements (shares)	102	94	99	91
Options
Earnings per share
Plus: dilutive effect of share-based payment arrangements (shares)	58	66	65	65

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EARNINGS PER SHARE (Details 2) - shares shares in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Unvested Stock Award shares
Anti-dilutive securities
Securities excluded from the earnings per share calculations (in shares)	407	365
Options
Anti-dilutive securities
Securities excluded from the earnings per share calculations (in shares)	204	207

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STOCK-BASED COMPENSATION PLANS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Stock-based compensation plans
Total compensation cost	$ 2,600	$ 2,300
Unvested Stock Award shares
Non-vested Stock Awards Outstanding, Number of Shares
Balance at the beginning of the period (in shares)	488
Granted (in shares)	180
Stock awards vested (in shares)	(100)	(86)
Forfeited (in shares)	(22)
Balance at the end of the period (in shares)	546
Non-vested Stock Awards Outstanding, Weighted-Average Grant Date Fair Value
Balance at the beginning of the period (USD per share)	$ 25.09
Granted (USD per share)	27.39
Stock awards vested (USD per share)	25.32
Forfeited (USD per share)	24.39
Balance at the end of the period (USD per share)	$ 26.12
Options
Stock Options Outstanding, Number of Shares
Balance at the beginning of the period (shares)	265
Granted (shares)	0
Stock options exercised (shares)	(2)
Forfeited (shares)	0
Expired (shares)	(3)
Balance at the end of the period (shares)	260
Exercisable options at the end of the period (shares)	260
Stock Options Outstanding, Weighted-Average Exercise Price
Balance at the beginning of the period (USD per share)	$ 21.11
Granted (USD per share)	0.00
Stock options exercised (USD per share)	16.76
Forfeited (USD per share)	0.00
Expired (USD per share)	34.45
Balance at the end of the period (USD per share)	20.99
Exercisable options at the end of the period (USD per share)	$ 20.96
Stock-based compensation plans
Proceeds from stock option exercises	$ 37	$ 116

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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - NARRATIVE (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2016 USD ($) contract	Dec. 31, 2015 USD ($)
Derivative [Line Items]
Notional amount	$ 1,652,399	$ 1,366,667
Cash pledged as collateral to derivative counterparties	853
Amortized cost of securities pledged as collateral to derivative counterparties	61,900
Fair value of securities as pledged collateral to derivative counterparties	63,800
Cash flow hedge gain (loss) to be reclassified within 12 months	5,400
Estimated fair value asset (liability)	(16,940)	(10,676)
Commercial counterparties
Derivative [Line Items]
Net asset position	38,000	17,100
Interest rate swaps
Derivative [Line Items]
Notional amount	11,700
Cash pledged as collateral to derivative counterparties	650	9,720
Derivative liability	55,482	28,220
Amount of collateral posted for the net liability positions	55,500	28,200
Interest rate swaps | Commercial counterparties
Derivative [Line Items]
Cash pledged as collateral to derivative counterparties	0	0
Derivative liability	0	0
Interest rate swaps | Institutional counterparties
Derivative [Line Items]
Cash pledged as collateral to derivative counterparties	650	9,720
Derivative liability	55,482	28,220
Not Designated as Hedging Instrument
Derivative [Line Items]
Notional amount	64,412	36,043
Estimated fair value asset (liability)	1,259	$ 323
Cash flow hedges:
Derivative [Line Items]
Notional amount	$ 300,000
Durations of derivative instruments (in years)	3 years
Cash flow hedges: | Interest rate swaps
Derivative [Line Items]
Notional amount	$ 200,000
Number of instruments (contract) | contract	4
Cash flow hedges: | Interest rate swaps | FHLBB borrowings
Derivative [Line Items]
Maturity period with fixed interest rate (in months)	1 month
Period of rolling advances (in months)	1 month
Cash flow hedges: | Forward-starting interest rate swaps on FHLBB borrowings
Derivative [Line Items]
Number of instruments (contract) | contract	2
Cash flow hedges: | Forward-starting interest rate swaps on FHLBB borrowings | FHLBB borrowings
Derivative [Line Items]
Notional amount	$ 100,000
Economic hedges:
Derivative [Line Items]
Notional amount	1,300,000
Credit valuation adjustments	$ (372)
Economic hedges: | Tax advantaged economic development bonds
Derivative [Line Items]
Fixed rate of interest	5.09%
Maturity period (in years)	21 years
Economic hedges: | Interest rate swaps
Derivative [Line Items]
Notional amount	$ 1,131,000
Economic hedges: | Risk participation agreements
Derivative [Line Items]
Notional amount	67,900
Economic hedges: | Forward sale commitments
Derivative [Line Items]
Notional amount	$ 76,600

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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Interest rate swap agreements and non-hedging derivative assets and liabilities
Notional amount	$ 1,652,399	$ 1,366,667
Estimated fair value asset (liability)	(16,940)	(10,676)
Interest rate swaps
Interest rate swap agreements and non-hedging derivative assets and liabilities
Notional amount	11,700
Cash flow hedges:
Interest rate swap agreements and non-hedging derivative assets and liabilities
Notional amount	300,000
Cash flow hedges: | Interest rate swaps
Interest rate swap agreements and non-hedging derivative assets and liabilities
Notional amount	200,000
Cash flow hedges: | Forward-starting interest rate swaps on FHLBB borrowings | FHLBB borrowings
Interest rate swap agreements and non-hedging derivative assets and liabilities
Notional amount	100,000
Economic hedges:
Interest rate swap agreements and non-hedging derivative assets and liabilities
Notional amount	1,300,000
Economic hedges: | Interest rate swaps
Interest rate swap agreements and non-hedging derivative assets and liabilities
Notional amount	1,131,000
Economic hedges: | Risk participation agreements
Interest rate swap agreements and non-hedging derivative assets and liabilities
Notional amount	67,900
Economic hedges: | Forward sale commitments
Interest rate swap agreements and non-hedging derivative assets and liabilities
Notional amount	76,600
Designated as Hedging Instrument | Cash flow hedges:
Interest rate swap agreements and non-hedging derivative assets and liabilities
Notional amount	300,000	300,000
Estimated fair value asset (liability)	(13,921)	(8,532)
Designated as Hedging Instrument | Cash flow hedges: | Interest rate swaps | FHLBB borrowings
Interest rate swap agreements and non-hedging derivative assets and liabilities
Notional amount	$ 200,000
Weighted average maturity	2 years 6 months 26 days
Weighted average rate, received	0.47%
Weighted average rate, contract pay rate	2.19%
Estimated fair value asset (liability)	$ (8,390)
Designated as Hedging Instrument | Cash flow hedges: | Forward-starting interest rate swaps on FHLBB borrowings | FHLBB borrowings
Interest rate swap agreements and non-hedging derivative assets and liabilities
Notional amount	$ 100,000	$ 300,000
Weighted average maturity	3 years	3 years 3 months 18 days
Weighted average rate, received	0.47%	0.14%
Weighted average rate, contract pay rate	2.48%	2.29%
Estimated fair value asset (liability)	$ (5,531)	$ (8,532)
Designated as Hedging Instrument | Economic hedges:
Interest rate swap agreements and non-hedging derivative assets and liabilities
Notional amount	1,287,987	1,030,624
Estimated fair value asset (liability)	(4,278)	(2,467)
Designated as Hedging Instrument | Economic hedges: | Interest rate swaps | Tax advantaged economic development bonds
Interest rate swap agreements and non-hedging derivative assets and liabilities
Notional amount	$ 11,689	$ 11,984
Weighted average maturity	13 years 4 months 26 days	13 years 10 months 24 days
Weighted average rate, received	0.61%	0.61%
Weighted average rate, contract pay rate	5.09%	5.09%
Estimated fair value asset (liability)	$ (3,023)	$ (2,450)
Designated as Hedging Instrument | Economic hedges: | Interest rate swaps | Loans with commercial loan customers
Interest rate swap agreements and non-hedging derivative assets and liabilities
Notional amount	$ 565,898	$ 457,392
Weighted average maturity	5 years 6 months 20 days	6 years 8 months 12 days
Weighted average rate, received	1.92%	2.18%
Weighted average rate, contract pay rate	3.78%	4.49%
Estimated fair value asset (liability)	$ (38,466)	$ (17,143)
Designated as Hedging Instrument | Economic hedges: | Reverse interest rate swaps | Loans with commercial loan customers
Interest rate swap agreements and non-hedging derivative assets and liabilities
Notional amount	$ 565,898	$ 457,392
Weighted average maturity	5 years 6 months 20 days	6 years 8 months 12 days
Weighted average rate, received	3.78%	4.49%
Weighted average rate, contract pay rate	1.92%	2.18%
Estimated fair value asset (liability)	$ 38,020	$ 17,129
Designated as Hedging Instrument | Economic hedges: | Risk participation agreements
Interest rate swap agreements and non-hedging derivative assets and liabilities
Notional amount	$ 67,868	$ 59,016
Weighted average maturity	13 years 2 months 26 days	15 years
Estimated fair value asset (liability)	$ 60	$ (56)
Designated as Hedging Instrument | Economic hedges: | Forward sale commitments
Interest rate swap agreements and non-hedging derivative assets and liabilities
Notional amount	$ 76,634	$ 44,840
Weighted average maturity	2 months 26 days	2 months 12 days
Estimated fair value asset (liability)	$ (869)	$ 53
Not Designated as Hedging Instrument
Interest rate swap agreements and non-hedging derivative assets and liabilities
Notional amount	64,412	36,043
Estimated fair value asset (liability)	1,259	323
Not Designated as Hedging Instrument | Interest rate lock commitments
Interest rate swap agreements and non-hedging derivative assets and liabilities
Notional amount	$ 64,412	$ 36,043
Weighted average maturity	2 months 26 days	2 months 12 days
Estimated fair value asset (liability)	$ 1,259	$ 323

XML

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details 1) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Derivative [Line Items]
Net interest expense recognized in interest expense on hedged FHLBB borrowings	$ 4,199	$ 2,474	$ 7,819	$ 4,783
FHLBB borrowings | Interest rate swaps | Cash flow hedges:
Derivative [Line Items]
Unrealized (loss) gain recognized in accumulated other comprehensive loss	(1,771)	784	(6,684)	(3,117)
Reclassification of unrealized loss from accumulated other comprehensive income to interest expense	887	0	1,295	0
Net tax benefit (expense) on items recognized in accumulated other comprehensive income	355	(316)	2,162	1,256
Other comprehensive (loss) gain recorded in accumulated other comprehensive income, net of reclassification adjustments and tax effects	(529)	468	(3,227)	(1,861)
Net interest expense recognized in interest expense on hedged FHLBB borrowings	$ 887	$ 0	$ 1,295	$ 0

XML

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details 2) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Interest rate swaps | Economic hedges: | Industrial revenue bond
Derivative [Line Items]
Unrealized gain (loss) recognized in other non-interest income	$ (292)	$ 331	$ (831)	$ 60
Interest rate swaps | Economic hedges: | Loans with commercial loan customers
Derivative [Line Items]
Unrealized gain (loss) recognized in other non-interest income	(7,725)	3,889	(21,322)	775
(Unfavorable) Favorable change in credit valuation adjustment recognized in other non-interest income	(372)	56	(433)	57
Reverse interest rate swaps | Economic hedges: | Loans with commercial loan customers
Derivative [Line Items]
Unrealized gain (loss) recognized in other non-interest income	7,725	(3,889)	21,322	(755)
Risk participation agreements | Economic hedges:
Derivative [Line Items]
Unrealized gain (loss) recognized in other non-interest income	33	31	116	(40)
Forward sale commitments | Economic hedges:
Derivative [Line Items]
Unrealized gain (loss) recognized in other non-interest income	(869)	475	(1,316)	87
Realized gain in other non-interest income	50	504	(333)	413
Interest rate lock commitments | Non-hedging derivatives:
Derivative [Line Items]
Unrealized gain (loss) recognized in other non-interest income	1,259	382	2,061	1,359
Realized gain in other non-interest income	$ 896	$ 186	$ 1,745	$ 941

XML

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details 3) - Interest rate swaps - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Offsetting of Financial Assets and Derivative Assets
Gross amounts of recognized assets	$ 38,152	$ 17,169
Gross amounts offset in the Statements of Condition	0	0
Net amounts of assets presented in the Statements of Condition	38,152	17,169
Gross amounts not offset in the Statement of Condition, financial instruments	0	0
Gross amounts not offset in the Statement of Condition, cash collateral received	0	0
Net amount	38,152	17,169
Institutional counterparties
Offsetting of Financial Assets and Derivative Assets
Gross amounts of recognized assets	132	40
Gross amounts offset in the Statements of Condition	0	0
Net amounts of assets presented in the Statements of Condition	132	40
Gross amounts not offset in the Statement of Condition, financial instruments	0	0
Gross amounts not offset in the Statement of Condition, cash collateral received	0	0
Net amount	132	40
Commercial counterparties
Offsetting of Financial Assets and Derivative Assets
Gross amounts of recognized assets	38,020	17,129
Gross amounts offset in the Statements of Condition	0	0
Net amounts of assets presented in the Statements of Condition	38,020	17,129
Gross amounts not offset in the Statement of Condition, financial instruments	0	0
Gross amounts not offset in the Statement of Condition, cash collateral received	0	0
Net amount	$ 38,020	$ 17,129

XML

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details 4) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Offsetting of Financial Liabilities and Derivative Liabilities
Gross amounts not offset in the Statements of Condition, cash collateral pledged	$ 853
Interest rate swaps
Offsetting of Financial Liabilities and Derivative Liabilities
Gross amounts of recognized liabilities	(55,528)	$ (28,220)
Gross amounts offset in the Statements of Condition	46	0
Net amounts of liabilities presented in the Statements of Condition	(55,482)	(28,220)
Gross amounts not offset in the Statements of Condition, financial instruments	54,832	18,500
Gross amounts not offset in the Statements of Condition, cash collateral pledged	650	9,720
Net amount	0	0
Interest rate swaps | Institutional counterparties
Offsetting of Financial Liabilities and Derivative Liabilities
Gross amounts of recognized liabilities	(55,528)	(28,220)
Gross amounts offset in the Statements of Condition	46	0
Net amounts of liabilities presented in the Statements of Condition	(55,482)	(28,220)
Gross amounts not offset in the Statements of Condition, financial instruments	54,832	18,500
Gross amounts not offset in the Statements of Condition, cash collateral pledged	650	9,720
Net amount	0	0
Interest rate swaps | Commercial counterparties
Offsetting of Financial Liabilities and Derivative Liabilities
Gross amounts of recognized liabilities	0	0
Gross amounts offset in the Statements of Condition	0	0
Net amounts of liabilities presented in the Statements of Condition	0	0
Gross amounts not offset in the Statements of Condition, financial instruments	0	0
Gross amounts not offset in the Statements of Condition, cash collateral pledged	0	0
Net amount	$ 0	$ 0

XML

FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading security, at fair value	$ 14,479	$ 14,189
Securities available for sale, at fair value	1,073,370	1,154,457
Total Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading security, at fair value	14,479	14,189
Securities available for sale, at fair value	1,073,370	1,154,457
Loans held for sale	22,450	13,191
Derivative assets	39,279	17,507
Derivative liabilities	56,219	28,181
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading security, at fair value	0	0
Securities available for sale, at fair value	47,313	32,925
Loans held for sale	0	0
Derivative assets	0	45
Derivative liabilities	680	0
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading security, at fair value	0	0
Securities available for sale, at fair value	1,026,057	1,120,824
Loans held for sale	22,450	13,191
Derivative assets	38,020	17,130
Derivative liabilities	55,350	28,181
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading security, at fair value	14,479	14,189
Securities available for sale, at fair value	0	708
Loans held for sale	0	0
Derivative assets	1,259	332
Derivative liabilities	189	0
Recurring | Total Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading security, at fair value	14,479	14,189
Loans held for sale	21,182	13,191
Derivative assets	39,279	17,507
Derivative liabilities	56,219	28,181
Recurring | Total Fair Value | Debt securities | Municipal bonds and obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	111,590	104,561
Recurring | Total Fair Value | Debt securities | Collateralized Mortgage Obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	679,506	833,036
Recurring | Total Fair Value | Debt securities | Agency mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	109,613	126,829
Recurring | Total Fair Value | Debt securities | Agency commercial mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	63,251	0
Recurring | Total Fair Value | Debt securities | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	45,703	41,022
Recurring | Total Fair Value | Debt securities | Trust preferred securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	11,739	11,901
Recurring | Total Fair Value | Debt securities | Other bonds and obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	3,222	3,141
Recurring | Total Fair Value | Marketable equity securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	48,746	33,967
Recurring | Portion at Other than Fair Value Measurement
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans held for sale	1,300
Recurring | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading security, at fair value	0	0
Loans held for sale	0	0
Derivative assets	0	45
Derivative liabilities	680	0
Recurring | Level 1 | Debt securities | Municipal bonds and obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	0	0
Recurring | Level 1 | Debt securities | Collateralized Mortgage Obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	0	0
Recurring | Level 1 | Debt securities | Agency mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	0	0
Recurring | Level 1 | Debt securities | Agency commercial mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	0	0
Recurring | Level 1 | Debt securities | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	0	0
Recurring | Level 1 | Debt securities | Trust preferred securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	0	0
Recurring | Level 1 | Debt securities | Other bonds and obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	0	0
Recurring | Level 1 | Marketable equity securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	47,313	32,925
Recurring | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading security, at fair value	0	0
Loans held for sale	21,182	13,191
Derivative assets	38,020	17,130
Derivative liabilities	55,350	28,181
Recurring | Level 2 | Debt securities | Municipal bonds and obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	111,590	104,561
Recurring | Level 2 | Debt securities | Collateralized Mortgage Obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	679,506	833,036
Recurring | Level 2 | Debt securities | Agency mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	109,613	126,829
Recurring | Level 2 | Debt securities | Agency commercial mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	63,251	0
Recurring | Level 2 | Debt securities | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	45,703	41,022
Recurring | Level 2 | Debt securities | Trust preferred securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	11,739	11,901
Recurring | Level 2 | Debt securities | Other bonds and obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	3,222	3,141
Recurring | Level 2 | Marketable equity securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	1,433	334
Recurring | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading security, at fair value	14,479	14,189
Loans held for sale	0	0
Derivative assets	1,259	332
Derivative liabilities	189	0
Recurring | Level 3 | Debt securities | Municipal bonds and obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	0	0
Recurring | Level 3 | Debt securities | Collateralized Mortgage Obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	0	0
Recurring | Level 3 | Debt securities | Agency mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	0	0
Recurring | Level 3 | Debt securities | Agency commercial mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	0	0
Recurring | Level 3 | Debt securities | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	0	0
Recurring | Level 3 | Debt securities | Trust preferred securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	0	0
Recurring | Level 3 | Debt securities | Other bonds and obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	0	0
Recurring | Level 3 | Marketable equity securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale, at fair value	$ 0	$ 708

XML

FAIR VALUE MEASUREMENTS - NARRATIVE (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016 USD ($) transfer	Jun. 30, 2015 USD ($) transfer	Jun. 30, 2016 USD ($) security transfer	Jun. 30, 2015 USD ($) transfer
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Transfers out of Level 3, number of transfers | transfer	0	0	1	0
Transfers to Level 2			$ 708
Junior subordinated debentures re-price period			90 days
Loans Held for Sale
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Gains (losses) in fair value of loans held for sale included in earnings	$ 369	$ (285)	$ 584	$ (71)
Trading Security
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Transfers to Level 2			$ 0
Number of securities in the portfolio (security) | security			1
Securities Available for Sale
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Transfers to Level 2			$ 708

XML

FAIR VALUE MEASUREMENTS (Details 2) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Level 2
Loans Held for Sale
Aggregate Fair Value	$ 22,450	$ 13,191
Aggregate Unpaid Principal	815	278
Recurring | Level 2
Loans Held for Sale
Aggregate Fair Value	21,182	13,191
Recurring | Loans Held for Sale | Level 2
Loans Held for Sale
Aggregate Fair Value	21,182	13,191
Aggregate Unpaid Principal	20,321	12,914
Aggregate Fair Value Less Aggregate Unpaid Principal	861	$ 277
Recurring | Portion at Other than Fair Value Measurement
Loans Held for Sale
Aggregate Fair Value	$ 1,300

XML

FAIR VALUE MEASUREMENTS (Details 3) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Changes in Level 3 assets that were measured at fair value on a recurring basis
Transfers to Level 2			$ (708)
Trading Security
Changes in Level 3 assets that were measured at fair value on a recurring basis
Balance at the beginning of the period	$ 14,474	$ 14,970	14,189	$ 14,909
Sale of Marketable Equity Security		0		0
Unrealized gain, net recognized in other non-interest income	153	(451)	585	(248)
Unrealized gain included in accumulated other comprehensive loss	0	0		0
Transfers to Level 2			0
Paydown of trading security	(148)	(141)	(295)	(283)
Transfers to held for sale loans	0	0	0	0
Balance at the end of the period	14,479	14,378	14,479	14,378
Unrealized gains (losses) relating to instruments still held at the end of the period	2,790	2,106	2,790	2,106
Securities Available for Sale
Changes in Level 3 assets that were measured at fair value on a recurring basis
Balance at the beginning of the period	0	719	708	2,326
Sale of Marketable Equity Security		0		(1,327)
Unrealized gain, net recognized in other non-interest income	0	0	0	0
Unrealized gain included in accumulated other comprehensive loss	0	54		(226)
Transfers to Level 2			(708)
Paydown of trading security	0	0	0	0
Transfers to held for sale loans	0	0	0	0
Balance at the end of the period	0	773	0	773
Unrealized gains (losses) relating to instruments still held at the end of the period	0	3	0	3
Interest rate lock commitments
Derivative Asset (Liability)
Beginning balance	802	977	323	625
Sale of Marketable Equity Security		0		0
Unrealized gain, net recognized in other non-interest income	1,711	941	2,917	2,671
Unrealized gain included in accumulated other comprehensive loss	0	0		0
Transfers to Level 2			0
Paydown of trading security	0	0	0	0
Transfers to held for sale loans	(1,254)	(1,536)	(1,981)	(2,914)
Ending balance	1,259	382	1,259	382
Unrealized gains (losses) relating to instruments still held at end of period	1,259	382	1,259	382
Forward Commitments
Derivative Asset (Liability)
Beginning balance	(143)	(93)	9	(93)
Unrealized gain included in accumulated other comprehensive loss	(46)	143		143
Transfers to Level 2			(198)
Ending balance	(189)	50	(189)	50
Unrealized gains (losses) relating to instruments still held at end of period	$ (189)	$ 50	$ (189)	$ 50

XML

FAIR VALUE MEASUREMENTS (Details 4) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Quantitative information about the significant unobservable inputs within Level 3
Derivative asset (liability), at fair value	$ (16,940,000)	$ (10,676,000)
Level 3 | Recurring
Quantitative information about the significant unobservable inputs within Level 3
Total	15,549,000	15,229,000
Level 3 | Recurring | Trading Security | Discounted Cash Flow
Quantitative information about the significant unobservable inputs within Level 3
Assets measured on recurring basis	$ 14,479,000	$ 14,189,000
Discount Rate	1.70%	2.49%
Level 3 | Recurring | Securities Available for Sale | Pricing Model
Quantitative information about the significant unobservable inputs within Level 3
Assets measured on recurring basis		$ 708,000
Median Peer Price/Tangible Book Value Percentage Multiple		88.52%
Level 3 | Recurring | Forward Commitments | Historical Trend
Quantitative information about the significant unobservable inputs within Level 3
Derivative asset (liability), at fair value	$ (189,000)	$ 9,000
Closing Ratio	89.35%	92.57%
Level 3 | Recurring | Forward Commitments | Pricing Model
Quantitative information about the significant unobservable inputs within Level 3
Origination Costs, per loan	$ 2,500	$ 2,500
Level 3 | Recurring | Interest rate lock commitments | Historical Trend
Quantitative information about the significant unobservable inputs within Level 3
Derivative asset (liability), at fair value	$ 1,259,000	$ 323,000
Closing Ratio	89.35%	92.57%
Level 3 | Recurring | Interest rate lock commitments | Pricing Model
Quantitative information about the significant unobservable inputs within Level 3
Origination Costs, per loan	$ 2,500	$ 2,500

XML

FAIR VALUE MEASUREMENTS (Details 5) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2016	Dec. 31, 2015
Quantitative information about the significant unobservable inputs within Level 3
Other real estate owned	$ 595	$ 595	$ 1,725
Non-recurring | Level 3
Quantitative information about the significant unobservable inputs within Level 3
Impaired loans	22,546	22,546	11,657
Capitalized servicing rights	9,498	9,498	5,187
Other real estate owned	595	595	1,725
Total	32,639	32,639	18,569
Unrealized gain included in accumulated other comprehensive loss	(183)	10,833
Non-recurring | Level 3 | Impaired loans
Quantitative information about the significant unobservable inputs within Level 3
Impaired loans	22,546	22,546	11,657
Unrealized gain included in accumulated other comprehensive loss	(180)	10,889
Non-recurring | Level 3 | Capitalized servicing rights
Quantitative information about the significant unobservable inputs within Level 3
Capitalized servicing rights	9,498	9,498	5,187
Unrealized gain included in accumulated other comprehensive loss	0	0
Non-recurring | Level 3 | Other real estate owned
Quantitative information about the significant unobservable inputs within Level 3
Other real estate owned	595	595	$ 1,725
Unrealized gain included in accumulated other comprehensive loss	$ (3)	$ (56)

XML

FAIR VALUE MEASUREMENTS (Details 6) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Quantitative information about the significant unobservable inputs within Level 3
Other real estate owned	$ 595,000	$ 1,725,000
Non-recurring | Level 3
Quantitative information about the significant unobservable inputs within Level 3
Impaired loans	22,546,000	11,657,000
Capitalized servicing rights	9,498,000	5,187,000
Other real estate owned	595,000	1,725,000
Total	32,639,000	18,569,000
Non-recurring | Impaired loans | Level 3
Quantitative information about the significant unobservable inputs within Level 3
Impaired loans	$ 22,546,000	$ 11,657,000
Non-recurring | Impaired loans | Minimum | Fair Value Of Collateral Valuation Technique | Level 3
Quantitative information about the significant unobservable inputs within Level 3
Loss severity	0.23%	0.05%
Appraised value	$ 5,000	$ 46,300
Non-recurring | Impaired loans | Maximum | Fair Value Of Collateral Valuation Technique | Level 3
Quantitative information about the significant unobservable inputs within Level 3
Loss severity	40.66%	29.50%
Appraised value	$ 3,513,900	$ 1,962,000
Non-recurring | Impaired loans | Weighted Average | Fair Value Of Collateral Valuation Technique | Level 3
Quantitative information about the significant unobservable inputs within Level 3
Loss severity	5.24%	7.55%
Appraised value	$ 1,365,500	$ 999,700
Non-recurring | Capitalized servicing rights | Level 3
Quantitative information about the significant unobservable inputs within Level 3
Capitalized servicing rights	$ 9,498,000	$ 5,187,000
Non-recurring | Capitalized servicing rights | Minimum | Discounted Cash Flow | Level 3
Quantitative information about the significant unobservable inputs within Level 3
Constant prepayment rate (CPR)	2.36%	7.17%
Discount Rate	7.74%	10.00%
Non-recurring | Capitalized servicing rights | Maximum | Discounted Cash Flow | Level 3
Quantitative information about the significant unobservable inputs within Level 3
Constant prepayment rate (CPR)	15.23%	12.06%
Discount Rate	14.00%	15.00%
Non-recurring | Capitalized servicing rights | Weighted Average | Discounted Cash Flow | Level 3
Quantitative information about the significant unobservable inputs within Level 3
Constant prepayment rate (CPR)	9.66%	10.02%
Discount Rate	11.30%	10.88%
Non-recurring | Other real estate owned | Level 3
Quantitative information about the significant unobservable inputs within Level 3
Other real estate owned	$ 595,000	$ 1,725,000
Non-recurring | Other real estate owned | Minimum | Fair Value Of Collateral Valuation Technique | Level 3
Quantitative information about the significant unobservable inputs within Level 3
Appraised value	46,000	39,000
Non-recurring | Other real estate owned | Maximum | Fair Value Of Collateral Valuation Technique | Level 3
Quantitative information about the significant unobservable inputs within Level 3
Appraised value	1,200,000	1,200,000
Non-recurring | Other real estate owned | Weighted Average | Fair Value Of Collateral Valuation Technique | Level 3
Quantitative information about the significant unobservable inputs within Level 3
Appraised value	$ 1,087,400	$ 919,900

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FAIR VALUE MEASUREMENTS (Details 7) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Financial Assets
Trading security, at fair value	$ 14,479	$ 14,189
Securities available for sale	1,073,370	1,154,457
Securities held to maturity	141,544	136,904
FHLB bank stock and restricted securities	68,242	71,018
Level 1
Financial Assets
Cash and cash equivalents	74,579	103,562
Trading security, at fair value	0	0
Securities available for sale	47,313	32,925
Securities held to maturity	0	0
FHLB bank stock and restricted securities	0	0
Net loans	0	0
Loans held for sale	0	0
Accrued interest receivable	0	0
Cash surrender value of bank-owned life insurance policies	0	0
Derivative assets	0	45
Assets held for sale	0	0
Financial Liabilities
Total deposits	0	0
Short-term debt	0	0
Long-term Federal Home Loan Bank advances	0	0
Subordinated borrowings	0	0
Derivative liabilities	680	0
Level 2
Financial Assets
Cash and cash equivalents	0	0
Trading security, at fair value	0	0
Securities available for sale	1,026,057	1,120,824
Securities held to maturity	0	0
FHLB bank stock and restricted securities	68,242	71,018
Net loans	0	0
Loans held for sale	22,450	13,191
Accrued interest receivable	22,255	20,940
Cash surrender value of bank-owned life insurance policies	127,000	125,233
Derivative assets	38,020	17,130
Assets held for sale	815	278
Financial Liabilities
Total deposits	5,661,984	5,582,835
Short-term debt	1,110,322	1,071,044
Long-term Federal Home Loan Bank advances	121,212	103,397
Subordinated borrowings	95,253	93,291
Derivative liabilities	55,350	28,181
Level 3
Financial Assets
Cash and cash equivalents	0	0
Trading security, at fair value	14,479	14,189
Securities available for sale	0	708
Securities held to maturity	141,544	136,904
FHLB bank stock and restricted securities	0	0
Net loans	6,051,886	5,727,570
Loans held for sale	0	0
Accrued interest receivable	0	0
Cash surrender value of bank-owned life insurance policies	0	0
Derivative assets	1,259	332
Assets held for sale	0	0
Financial Liabilities
Total deposits	0	0
Short-term debt	0	0
Long-term Federal Home Loan Bank advances	0	0
Subordinated borrowings	0	0
Derivative liabilities	189	0
Carrying Amount
Financial Assets
Cash and cash equivalents	74,579	103,562
Trading security, at fair value	14,479	14,189
Securities available for sale	1,073,370	1,154,457
Securities held to maturity	132,010	131,652
FHLB bank stock and restricted securities	68,242	71,018
Net loans	5,958,904	5,685,928
Loans held for sale	22,450	13,191
Accrued interest receivable	22,255	20,940
Cash surrender value of bank-owned life insurance policies	127,000	125,233
Derivative assets	39,279	17,507
Assets held for sale	815	278
Financial Liabilities
Total deposits	5,656,724	5,589,135
Short-term debt	1,110,320	1,071,200
Long-term Federal Home Loan Bank advances	120,844	103,135
Subordinated borrowings	89,072	89,812
Derivative liabilities	56,219	28,181
Total Fair Value
Financial Assets
Cash and cash equivalents	74,579	103,562
Trading security, at fair value	14,479	14,189
Securities available for sale	1,073,370	1,154,457
Securities held to maturity	141,544	136,904
FHLB bank stock and restricted securities	68,242	71,018
Net loans	6,051,886	5,727,570
Loans held for sale	22,450	13,191
Accrued interest receivable	22,255	20,940
Cash surrender value of bank-owned life insurance policies	127,000	125,233
Derivative assets	39,279	17,507
Assets held for sale	815	278
Financial Liabilities
Total deposits	5,661,984	5,582,835
Short-term debt	1,110,322	1,071,044
Long-term Federal Home Loan Bank advances	121,212	103,397
Subordinated borrowings	95,253	93,291
Derivative liabilities	$ 56,219	$ 28,181

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NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Banking and Thrift, Interest [Abstract]
Net interest income	$ 57,441	$ 52,637	$ 115,138	$ 98,130
Provision for loan losses	4,522	4,204	8,528	8,055
Net interest income after provision for loan losses	$ 52,919	$ 48,433	$ 106,610	$ 90,075

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SUBSEQUENT EVENTS (Details)	3 Months Ended	6 Months Ended
	Dec. 31, 2016 USD ($)	Jun. 30, 2016 USD ($) banking_office	Dec. 31, 2015 USD ($)
Subsequent Event [Line Items]
Assets		$ 8,043,659,000	$ 7,831,086,000
Scenario, Forecast
Subsequent Event [Line Items]
Business combination, number of shares issued, conversion of acquiree stock	0.5773
First Choice Bank
Subsequent Event [Line Items]
Assets		$ 1,100,000,000
Number of offices company operates | banking_office		8
First Choice Bank | Scenario, Forecast
Subsequent Event [Line Items]
Termination fee	$ 4,100,000.0