10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________

FORM 10-Q

(Mark One)

[X]	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 2014
	or
[ ]	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from _________ to __________.

Commission File Number 0-10967

_______________

FIRST MIDWEST BANCORP, INC.

(Exact name of registrant as specified in its charter)

Delaware	36-3161078
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

One Pierce Place, Suite 1500

Itasca, Illinois 60143-9768

(Address of principal executive offices) (zip code)

______________________

Registrant’s telephone number, including area code: (630) 875-7450

______________________

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 [X] No [ ].

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

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

Large accelerated filer [X]	Accelerated filer [ ]
Non-accelerated filer [ ]	Smaller reporting company [ ]
(Do not check if a smaller reporting company)

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

As of November 3, 2014, there were 75,295,023 shares of common stock, $.01 par value, outstanding.

FIRST MIDWEST BANCORP, INC.

FORM 10-Q

TABLE OF CONTENTS

		Page
Part I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Consolidated Statements of Financial Condition	3
	Condensed Consolidated Statements of Income	4
	Consolidated Statements of Comprehensive Income	5
	Consolidated Statements of Changes in Stockholders’ Equity	6
	Condensed Consolidated Statements of Cash Flows	7
	Notes to the Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition   and Result of Operations	44
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	75
Item 4.	Controls and Procedures	76
Part II.	OTHER INFORMATION
Item 1.	Legal Proceedings	76
Item 1A.	Risk Factors	76
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	77
Item 6.	Exhibits	78

2

PART I. FINANCIAL INFORMATION (Unaudited)

ITEM 1. FINANCIAL STATEMENTS

FIRST MIDWEST BANCORP, INC.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Amounts in thousands, except per share data)

					September 30, 2014			December 31, 2013
Assets					(Unaudited)
Cash and due from banks					$	125,977		$	110,417
Interest-bearing deposits in other banks					550,606			476,824
Trading securities, at fair value					17,928			17,317
Securities available-for-sale, at fair value					997,420			1,112,725
Securities held-to-maturity, at amortized cost					26,776			44,322
Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank stock, at cost					35,588			35,161
Loans, excluding covered loans					6,428,204			5,580,005
Covered loans					90,875			134,355
Allowance for loan and covered loan losses					(73,106		)	(85,505		)
Net loans					6,445,973			5,628,855
Other real estate owned (“OREO”), excluding covered OREO					29,165			32,473
Covered OREO					9,277			8,863
Federal Deposit Insurance Corporation (“FDIC”) indemnification asset					8,699			16,585
Premises, furniture, and equipment					123,473			120,204
Investment in bank-owned life insurance (“BOLI”)					195,270			193,167
Goodwill and other intangible assets					322,664			276,366
Accrued interest receivable and other assets					207,535			180,128
Total assets					$	9,096,351		$	8,253,407
Liabilities
Noninterest-bearing deposits					$	2,295,679		$	1,911,602
Interest-bearing deposits					5,320,454			4,854,499
Total deposits					7,616,133			6,766,101
Borrowed funds					132,877			224,342
Senior and subordinated debt					191,028			190,932
Accrued interest payable and other liabilities					106,637			70,590
Total liabilities					8,046,675			7,251,965
Stockholders’ Equity
Common stock					858			858
Additional paid-in capital					408,789			414,293
Retained earnings					891,129			853,740
Accumulated other comprehensive loss, net of tax					(18,852		)	(26,792		)
Treasury stock, at cost					(232,248		)	(240,657		)
Total stockholders’ equity					1,049,676			1,001,442
Total liabilities and stockholders’ equity					$	9,096,351		$	8,253,407
	September 30, 2014				December 31, 2013
	Preferred		Common		Preferred			Common
	Shares		Shares		Shares			Shares
Par Value	$	—	$	0.01	$	—		$	0.01
Shares authorized	1,000		150,000		1,000			100,000
Shares issued	—		85,787		—			85,787
Shares outstanding	—		75,295		—			75,071
Treasury shares	—		10,492		—			10,716

See accompanying notes to the unaudited condensed consolidated financial statements.

3

FIRST MIDWEST BANCORP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Amounts in thousands, except per share data)

(Unaudited)

	Quarters Ended   September 30,					Nine Months Ended   September 30,
	2014		2013			2014			2013
Interest Income
Loans, excluding covered loans	$	66,117	$	60,614		$	185,753		$	179,156
Covered loans	2,596		3,142			7,139			10,742
Investment securities	7,465		7,742			23,489			22,755
Other short-term investments	684		831			2,174			2,474
Total interest income	76,862		72,329			218,555			215,127
Interest Expense
Deposits	2,806		2,837			7,914			9,160
Borrowed funds	9		390			561			1,217
Senior and subordinated debt	3,016		3,436			9,047			10,306
Total interest expense	5,831		6,663			17,522			20,683
Net interest income	71,031		65,666			201,033			194,444
Provision for loan and covered loan losses	10,727		4,770			17,509			16,257
Net interest income after provision for loan and covered loan   losses	60,304		60,896			183,524			178,187
Noninterest Income
Service charges on deposit accounts	9,902		9,472			26,895			27,267
Wealth management fees	6,721		6,018			19,730			17,983
Card-based fees	6,646		5,509			17,950			16,132
Mortgage banking income	1,125		1,273			3,199			4,251
Other service charges, commissions, and fees	5,266		5,532			13,943			13,937
Gains on sales of properties	3,954		—			3,954			—
Net securities gains	2,570		33,801			8,160			34,017
BOLI income (loss)	767		(13,028		)	2,030			(12,428		)
Other income	156		1,682			1,748			4,116
Gain on termination of FHLB forward commitments	—		7,829			—			7,829
Loss on extinguishment of debt	—		—			(2,059		)	—
Total noninterest income	37,107		58,088			95,550			113,104
Noninterest Expense
Salaries and employee benefits	35,933		34,270			103,985			103,760
Net occupancy and equipment expense	8,702		7,982			25,765			23,922
Professional services	7,098		5,517			19,004			16,330
Technology and related costs	4,316		2,984			10,494			8,351
Other expenses	14,264		13,949			39,750			39,580
Total noninterest expense	70,313		64,702			198,998			191,943
Income before income tax expense	27,098		54,282			80,076			99,348
Income tax expense	8,549		24,959			25,363			39,207
Net income	$	18,549	$	29,323		$	54,713		$	60,141
Per Common Share Data
Basic earnings per common share	$	0.25	$	0.39		$	0.73		$	0.80
Diluted earnings per common share	$	0.25	$	0.39		$	0.73		$	0.80
Dividends declared per common share	$	0.08	$	0.04		$	0.23		$	0.09
Weighted-average common shares outstanding	74,341		74,023			74,270			73,969
Weighted-average diluted common shares outstanding	74,352		74,034			74,282			73,978

See accompanying notes to the unaudited condensed consolidated financial statements.

4

FIRST MIDWEST BANCORP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollar amounts in thousands)

(Unaudited)

	Quarters Ended   September 30,						Nine Months Ended   September 30,
	2014			2013			2014			2013
Net income	$	18,549		$	29,323		$	54,713		$	60,141
Securities available-for-sale
Unrealized holding (losses) gains:
Before tax	(2,693		)	6,211			22,028			5,359
Tax effect	1,003			(1,993		)	(8,776		)	(2,151		)
Net of tax	(1,690		)	4,218			13,252			3,208
Reclassification of net gains included in net income:
Before tax	2,570			33,801			8,160			34,017
Tax effect	(1,051		)	(13,825		)	(3,337		)	(13,913		)
Net of tax	1,519			19,976			4,823			20,104
Net unrealized holding (losses) gains	(3,209		)	(15,758		)	8,429			(16,896		)
Derivative instruments
Unrealized holding losses:
Before tax	(629		)	—			(827		)	—
Tax effect	257			—			338			—
Net of tax	(372		)	—			(489		)	—
Unrecognized net pension costs
Unrealized holding gains:
Before tax	—			—			—			10,997
Tax effect	—			—			—			(4,498		)
Net of tax	—			—			—			6,499
Total other comprehensive (loss) income	(3,581		)	(15,758		)	7,940			(10,397		)
Total comprehensive income	$	14,968		$	13,565		$	62,653		$	49,744

	Accumulated Unrealized Gain (Loss) on Securities Available- for-Sale			Accumulated Unrealized Loss on Derivative Instruments			Unrecognized Net Pension Costs			Total Accumulated Other Comprehensive Loss
Balance at December 31, 2012	$	1,115		$	—		$	(16,775	)	$	(15,660	)
Other comprehensive (loss) income	(16,896		)	—			6,499			(10,397		)
Balance at September 30, 2013	$	(15,781	)	$	—		$	(10,276	)	$	(26,057	)
Balance at December 31, 2013	$	(20,419	)	$	—		$	(6,373	)	$	(26,792	)
Other comprehensive income (loss)	8,429			(489		)	—			7,940
Balance at September 30, 2014	$	(11,990	)	$	(489	)	$	(6,373	)	$	(18,852	)

See accompanying notes to the unaudited condensed consolidated financial statements.

5

FIRST MIDWEST BANCORP, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Amounts in thousands, except per share data)

(Unaudited)

	Common Shares Outstanding		Common Stock		Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Treasury Stock			Total
Balance at December 31, 2012	74,840		$	858	$	418,318		$	786,453		$	(15,660	)	$	(249,076	)	$	940,893
Comprehensive income (loss)	—		—		—			60,141			(10,397		)	—			49,744
Common dividends declared ($0.09 per common share)	—		—		—			(6,759		)	—			—			(6,759		)
Share-based compensation expense	—		—		4,366			—			—			—			4,366
Restricted stock activity	236		—		(9,915		)	—			—			8,379			(1,536		)
Treasury stock issued to benefit plans	(2	)	—		(92		)	—			—			109			17
Balance at September 30, 2013	75,074		$	858	$	412,677		$	839,835		$	(26,057	)	$	(240,588	)	$	986,725
Balance at December 31, 2013	75,071		$	858	$	414,293		$	853,740		$	(26,792	)	$	(240,657	)	$	1,001,442
Comprehensive income	—		—		—			54,713			7,940			—			62,653
Common dividends declared ($0.23 per common share)	—		—		—			(17,324		)	—			—			(17,324		)
Share-based compensation expense	—		—		4,461			—			—			—			4,461
Restricted stock activity	215		—		(9,833		)	—			—			7,938			(1,895		)
Treasury stock issued to   benefit plans	9		—		(132		)	—			—			471			339
Balance at September 30, 2014	75,295		$	858	$	408,789		$	891,129		$	(18,852	)	$	(232,248	)	$	1,049,676

See accompanying notes to the unaudited condensed consolidated financial statements.

6

FIRST MIDWEST BANCORP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollar amounts in thousands)

(Unaudited)

	Nine Months Ended   September 30,
	2014			2013
Net cash provided by operating activities	$	88,575		$	104,383
Investing Activities
Proceeds from maturities, prepayments, and calls of securities available-for-sale	125,244			178,256
Proceeds from sales of securities available-for-sale	24,947			69,428
Purchases of securities available-for-sale	(16,411		)	(326,143		)
Proceeds from maturities, prepayments, and calls of securities held-to-maturity	3,814			7,084
Purchases of securities held-to-maturity	(1,998		)	(2,636		)
Net (purchases) redemption of FHLB and Federal Reserve Bank stock	(427		)	12,071
Net increase in loans	(291,561		)	(233,844		)
BOLI income, net of claims	(73		)	(2		)
Proceeds from sales of OREO	14,293			20,715
Proceeds from sales of premises, furniture, and equipment	3,893			1,425
Purchases of premises, furniture, and equipment	(7,885		)	(6,586		)
Cash received from acquisitions, net of cash paid	139,486			—
Net cash used in investing activities	(6,678		)	(280,232		)
Financing Activities
Net increase in deposit accounts	119,440			330,953
Increase in borrowed funds	23,085			26,074
(Payment for) proceeds from the termination of FHLB advances and forward   commitments	(116,609		)	7,829
Cash dividends paid	(16,556		)	(4,502		)
Restricted stock activity	(2,739		)	(1,588		)
Excess tax benefit related to share-based compensation	824			55
Net cash provided by financing activities	7,445			358,821
Net increase in cash and cash equivalents	89,342			182,972
Cash and cash equivalents at beginning of period	587,241			716,266
Cash and cash equivalents at end of period	$	676,583		$	899,238
Supplemental Disclosures of Cash Flow Information:
Income taxes paid (refunded)	$	7,262		$	(1,779	)
Interest paid to depositors and creditors	14,714			17,715
Dividends declared, but unpaid	6,028			3,006
Non-cash transfers of loans to OREO	13,277			15,877
Non-cash transfer of loans held-for-investment to loans held-for-sale	70,183			1,275
Non-cash transfer of an investment from other assets to securities available-for-sale	—			2,787

See accompanying notes to the unaudited condensed consolidated financial statements.

7

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation – The accompanying unaudited condensed consolidated interim financial statements of First Midwest Bancorp, Inc. (the “Company”), a Delaware corporation, were prepared in accordance with the rules and regulations of the Securities and Exchange Commission ("SEC") for quarterly reports on Form 10-Q and reflect all adjustments that management deems necessary for the fair presentation of the financial position and results of operations for the periods presented. The results of operations for the quarter and nine months ended September 30, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014.

The accounting and reporting policies of the Company and its subsidiaries conform to U.S. generally accepted accounting principles (“GAAP”) and general practices within the banking industry. The accompanying quarterly statements do not include certain information and footnote disclosures required by GAAP for complete annual financial statements. Therefore, these financial statements should be read in conjunction with the Company’s 2013 Annual Report on Form 10-K (“2013 10-K”). The Company uses the accrual basis of accounting for financial reporting purposes. Certain reclassifications were made to prior year amounts to conform to the current year presentation.

Principles of Consolidation – The accompanying condensed consolidated financial statements include the financial position and results of operations of the Company and its subsidiaries after elimination of all significant intercompany accounts and transactions. Assets held in a fiduciary or agency capacity are not assets of the Company or its subsidiaries and are not included in the condensed consolidated financial statements.

Use of Estimates – The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Although these estimates and assumptions are based on the best available information, actual results could differ from those estimates.

The accounting policies related to business combinations, loans, the allowance for credit losses, the FDIC indemnification asset, and derivative financial instruments are presented below. For a summary of all other significant accounting policies, please refer to Note 1, “Summary of Significant Accounting Policies,” in the Company’s 2013 10-K.

Business Combinations – Business combinations are accounted for under the acquisition method of accounting. Assets acquired and liabilities assumed are recorded at their estimated fair values as of the date of acquisition, with any excess of the purchase price of the acquisition over the fair value of the net tangible and intangible assets acquired recorded as goodwill. Alternatively, a gain is recorded if the fair value of assets purchased exceeds the fair value of liabilities assumed and consideration paid. The results of operations of the acquired business are included in the Consolidated Statements of Income from the effective date of the acquisition.

Loans – Loans held-for-investment are loans that the Company intends to hold until they are paid in full and are carried at the principal amount outstanding, including certain net deferred loan origination fees. Interest income on loans is accrued based on principal amounts outstanding. Loan origination fees, commitment fees, and certain direct loan origination costs are deferred, and the net amount is amortized as a yield adjustment over the contractual life of the related loans or commitments and included in interest income. Fees related to standby letters of credit are amortized into fee income over the contractual life of the commitment. Other credit-related fees are recognized as fee income when earned. Loans held-for-sale are carried at the lower of aggregate cost or fair value and included in other assets in the Consolidated Statements of Financial Condition.

Acquired and Covered Loans - Acquired loans consist primarily of loans that were acquired in business combinations. Covered loans consist of loans acquired by the Company in FDIC-assisted transactions, the majority of which are covered by loss share agreements with the FDIC (the “FDIC Agreements”), under which the FDIC reimburses the Company for the majority of the losses and eligible expenses related to these assets. No allowance for credit losses is recorded on acquired and covered loans at the acquisition date since business combination accounting requires that they are recorded at fair value.

Acquired and covered loans are separated into (i) non-purchased credit impaired ("Non-PCI") and (ii) purchased credit impaired ("PCI") loans. Non-PCI loans include loans that did not have evidence of credit deterioration since origination. PCI loans include loans that had evidence of credit deterioration since origination and for which it was probable at acquisition that the Company would not collect all contractually required principal and interest payments. Evidence of credit deterioration was evaluated using various indicators, such as past due and non-accrual status. Other key considerations included past performance of the institutions'

8

credit underwriting standards, completeness and accuracy of credit files, maintenance of risk ratings, and age of appraisals. Leases and revolving loans do not qualify to be accounted for as PCI loans.

The acquisition adjustment related to Non-PCI loans is amortized into interest income over the contractual life of the related loans. As the acquisition adjustment is accreted into income over future periods, an allowance for credit losses will be established as necessary to reflect credit deterioration.

PCI loans are accounted for prospectively based on estimates of expected future cash flows. To estimate the fair value, the Company generally aggregates purchased consumer loans and certain smaller balance commercial loans into pools of loans with common risk characteristics, such as delinquency status, credit score, and internal risk rating. The fair values of larger balance commercial loans are estimated on an individual basis. Expected future cash flows in excess of the fair value of loans at the purchase date (“accretable yield”) are recorded as interest income over the life of the loans if the timing and amount of the expected future cash flows can be reasonably estimated. The non-accretable yield represents the difference between contractually required payments and the expected future cash flows determined at acquisition. Subsequent increases in expected future cash flows are recognized as interest income prospectively. The present value of any decreases in expected future cash flows is recognized by recording a charge-off through the allowance for loan and covered loan losses or establishing an allowance for loan and covered loan losses.

Non-accrual Loans– Generally, corporate loans are placed on non-accrual status (i) when either principal or interest payments become 90 days or more past due unless the loan is sufficiently collateralized such that full repayment of both principal and interest is expected and is in the process of collection within a reasonable period or (ii) when an individual analysis of a borrower’s creditworthiness warrants a downgrade to non-accrual regardless of past due status. When a loan is placed on non-accrual status, unpaid interest credited to income in the current year is reversed, and unpaid interest accrued in prior years is charged against the allowance for loan losses. After the loan is placed on non-accrual, all debt service payments are applied to the principal on the loan. Future interest income may only be recorded on a cash basis after recovery of principal is reasonably assured. Non-accrual loans are returned to accrual status when the financial position of the borrower and other relevant factors indicate that the Company will collect all principal and interest.

Commercial loans and loans secured by real estate are charged-off when deemed uncollectible. A loss is recorded if the net realizable value of the underlying collateral is less than the outstanding principal and interest. Consumer loans that are not secured by real estate are subject to mandatory charge-off at a specified delinquency date and are usually not classified as non-accrual prior to being charged-off. Closed-end consumer loans, which include installment, automobile, and single payment loans, are usually charged-off no later than the end of the month in which the loan becomes 120 days past due.

PCI loans are generally considered accruing loans unless reasonable estimates of the timing and amount of expected future cash flows cannot be determined. Loans without reasonable future cash flow estimates are classified as non-accrual loans, and interest income is not recognized on those loans until the timing and amount of the expected future cash flows can be reasonably determined.

Troubled Debt Restructurings (“TDRs”) – A restructuring is considered a TDR when (i) the borrower is experiencing financial difficulties and (ii) the creditor grants a concession, such as forgiveness of principal, reduction of the interest rate, changes in payments, or extension of the maturity date. Loans are not classified as TDRs when the modification is short-term or results in an insignificant delay in payments. The Company’s TDRs are determined on a case-by-case basis.

The Company does not accrue interest on a TDR unless it believes collection of all principal and interest under the modified terms is reasonably assured. For a TDR to begin accruing interest, the borrower must demonstrate both some level of past performance and the future capacity to perform under the modified terms. Generally, six months of consecutive payment performance under the restructured terms is required before a TDR is returned to accrual status. However, the period could vary depending on the individual facts and circumstances of the loan. An evaluation of the borrower’s current creditworthiness is used to assess the borrower’s capacity to repay the loan under the modified terms. This evaluation includes an estimate of expected future cash flows, evidence of strong financial position, and estimates of the value of collateral, if applicable. For TDRs to be removed from TDR status in the calendar year after the restructuring, the loans must (i) have an interest rate and terms that reflect market conditions at the time of restructuring, and (ii) be in compliance with the modified terms. If the loan was restructured at below market rates and terms, it continues to be separately reported as restructured until it is paid in full or charged-off.

Impaired Loans – Impaired loans consist of corporate non-accrual loans and TDRs.

A loan is considered impaired when it is probable that the Company will not collect all contractual principal and interest. With the exception of accruing TDRs, impaired loans are classified as non-accrual and are exclusive of smaller homogeneous loans, such as home equity, 1-4 family mortgages, and installment loans. Impaired loans with balances under a specified threshold are not individually evaluated for impairment. For all other impaired loans, impairment is measured by comparing the estimated value

9

of the loan to the recorded book value. The value of collateral-dependent loans is based on the fair value of the underlying collateral, less costs to sell. The value of other loans is measured using the present value of expected future cash flows discounted at the loan’s initial effective interest rate.

90-Days Past Due Loans –The Company’s accrual of interest on loans is discontinued at the time the loan is 90 days past due unless the credit is sufficiently collateralized and in the process of renewal or collection.

Allowance for Credit Losses – The allowance for credit losses is comprised of the allowance for loan losses, the allowance for covered loan losses, and the reserve for unfunded commitments, and is maintained by management at a level believed adequate to absorb estimated losses inherent in the existing loan portfolio. Determination of the allowance for credit losses is subjective since it requires significant estimates and management judgment, including the amounts and timing of expected future cash flows on impaired loans, estimated losses on pools of homogeneous loans, consideration of current economic trends, and other factors.

Loans deemed to be uncollectible are charged-off against the allowance for loan and covered loan losses, while recoveries of amounts previously charged-off are credited to the allowance for loan and covered loan losses. Additions to the allowance for loan and covered loan losses are charged to expense through the provision for loan and covered loan losses. The amount of provision depends on a number of factors, including net charge-off levels, loan growth, changes in the composition of the loan portfolio, and the Company’s assessment of the allowance for loan and covered loan losses based on the methodology discussed below.

Allowance for Loan Losses– The allowance for loan losses consists of (i) specific reserves for individual loans where the recorded investment exceeds the value, (ii) an allowance based on a loss migration analysis that uses historical credit loss experience for each loan category, and (iii) an allowance based on other internal and external qualitative factors.

The specific reserves component of the allowance for loan losses is based on a periodic analysis of impaired loans exceeding a fixed dollar amount. If the value of an impaired loan is less than the recorded book value, the Company either establishes a valuation allowance (i.e., a specific reserve) equal to the excess of the book value over the value of the loan as a component of the allowance for loan losses or charges off the amount if it is a confirmed loss.

The general reserve component is based on a loss migration analysis, which examines actual loss experience by loan category for a rolling 8-quarter period and the related internal risk rating for corporate loans. The loss migration analysis is updated quarterly primarily using actual loss experience. This component is then adjusted based on management’s consideration of many internal and external qualitative factors, including:

• Changes in the composition of the loan portfolio, trends in the volume of loans, and trends in delinquent and non-accrual loans that could indicate that historical trends do not reflect current conditions.

• Changes in credit policies and procedures, such as underwriting standards and collection, charge-off, and recovery practices.

• Changes in the experience, ability, and depth of credit management and other relevant staff.

• Changes in the quality of the Company’s loan review system and Board of Directors oversight.

• The effect of any concentration of credit and changes in the level of concentrations, such as loan type or risk rating.

• Changes in the value of the underlying collateral for collateral-dependent loans.

• Changes in the national and local economy that affect the collectability of various segments of the portfolio.

• The effect of other external factors, such as competition and legal and regulatory requirements, on the Company’s loan portfolio.

Allowance for Covered Loan Losses– The Company’s allowance for covered loan losses reflects the difference between the carrying value and the expected future cash flows of the covered PCI loans. On a periodic basis, the adequacy of this allowance is determined through a re-estimation of expected future cash flows on all of the outstanding covered PCI loans using either a probability of default/loss given default (“PD/LGD”) methodology or a specific review methodology. The PD/LGD model is a loss model that estimates expected future cash flows using a probability of default curve and loss given default estimates.

Reserve for Unfunded Commitments– The Company also maintains a reserve for unfunded commitments, including letters of credit, for the risk of loss inherent in these arrangements. The reserve for unfunded commitments is estimated using the loss migration analysis from the allowance for loan losses, adjusted for probabilities of future funding requirements. The reserve for unfunded commitments is included in other liabilities in the Consolidated Statements of Financial Condition.

The establishment of the allowance for credit losses involves a high degree of judgment given the difficulty of assessing the factors impacting loan repayment and estimating the timing and amount of losses. While management utilizes its best judgment and information available, the adequacy of the allowance for credit losses depends on a variety of factors beyond the Company’s

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control, including the performance of its loan portfolio, the economy, changes in interest rates and property values, and the interpretation of loan risk classifications by regulatory authorities.

FDIC Indemnification Asset – The majority of loans and OREO acquired through FDIC-assisted transactions are covered by the FDIC Agreements. The FDIC indemnification asset represents the present value of future expected reimbursements from the FDIC. Since the indemnified items are covered loans and covered OREO, which are initially measured at fair value, the FDIC indemnification asset is also initially measured at fair value by discounting the expected future cash flows to be received from the FDIC. These expected future cash flows are estimated by multiplying estimated losses on covered PCI loans and covered OREO by the reimbursement rates in the FDIC Agreements.

The balance of the FDIC indemnification asset is adjusted periodically to reflect changes in expected future cash flows. Decreases in estimated reimbursements from the FDIC are recorded prospectively through amortization and increases in estimated reimbursements from the FDIC are recognized by an increase in the carrying value of the indemnification asset. Payments from the FDIC for reimbursement of losses result in a reduction of the FDIC indemnification asset.

Derivative Financial Instruments – In the ordinary course of business, the Company enters into derivative transactions as part of its overall interest rate risk management strategy to minimize significant unplanned fluctuations in earnings and expected future cash flows caused by interest rate volatility. All derivative instruments are recorded at fair value as either other assets or other liabilities in the Consolidated Statements of Financial Condition. Subsequent changes in a derivative’s fair value are recognized in earnings unless specific hedge accounting criteria are met.

On the date the Company enters into a derivative contract, the derivative is designated as a fair value hedge, a cash flow hedge, or a non-hedge derivative instrument. Fair value hedges are designed to mitigate exposure to changes in the fair value of an asset or liability attributable to a particular risk, such as interest rate risk. Cash flow hedges are designed to mitigate exposure to variability in expected future cash flows to be received or paid related to an asset, liability, or other type of forecasted transaction. The Company formally documents all relationships between hedging instruments and hedged items, including its risk management objective and strategy.

At the hedge’s inception and quarterly thereafter, a formal assessment is performed to determine the effectiveness of the derivative in offsetting changes in the fair values or expected future cash flows of the hedged items in the current period and prospectively. If a derivative instrument designated as a hedge is terminated or ceases to be highly effective, hedge accounting is discontinued prospectively, and the gain or loss is amortized into earnings. For fair value hedges, the gain or loss is amortized over the remaining life of the hedged asset or liability. For cash flow hedges, the gain or loss is amortized over the same period that the forecasted hedged transactions impact earnings. If the hedged item is disposed of, any fair value adjustments are included in the gain or loss from the disposition of the hedged item. If the forecasted transaction is no longer probable, the gain or loss is included in earnings immediately.

For effective fair value hedges, changes in the fair value of the derivative instruments, as well as changes in the fair value of the hedged item, are recognized in earnings. For cash flow hedges, the effective portion of the change in fair value of the derivative instrument is reported as a component of accumulated other comprehensive loss and is reclassified to earnings when the hedged transaction is reflected in earnings.

Ineffectiveness is calculated based on the change in fair value of the hedged item compared with the change in fair value of the hedging instrument. For all types of hedges, any ineffectiveness in the hedging relationship is recognized in earnings during the period the ineffectiveness occurs.

2.  RECENT EVENTS

Equity Matters

On May 21, 2014, the stockholders of the Company approved an amendment to the Company's Restated Certificate of Incorporation. The amendment increased the Company's authorized common stock by 50,000,000 shares. Following this amendment, the Company is now authorized to issue a total of 151,000,000 shares, including 1,000,000 shares of Preferred Stock, without a par value, and 150,000,000 shares of Common Stock, $0.01 par value per share.

Recent Accounting Pronouncements

Income Taxes: In January of 2014, the Financial Accounting Standards Board ("FASB") issued guidance that requires an entity to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, as a reduction to a deferred tax asset for a net

11

operating loss carryforward, a similar tax loss, or a tax credit carryforward. To the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date or, if the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The guidance is effective for annual and interim reporting periods beginning on or after December 15, 2013, and must be applied prospectively. The adoption of this guidance on January 1, 2014 did not impact the Company's financial condition, results of operations, or liquidity.

Receivables - Troubled Debt Restructurings by Creditors: In January of 2014, the FASB issued guidance to clarify when an in substance repossession or foreclosure occurs and an entity is considered to have received physical possession of the residential real estate property such that a loan receivable should be derecognized and the real estate property recognized. Additionally, the guidance requires interim and annual disclosure of the amount of foreclosed residential real estate property held by the entity and the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction. The guidance is effective for annual and interim periods beginning after December 15, 2014 and can be applied retrospectively or prospectively. Management does not expect the adoption of this guidance will materially impact the Company's financial condition, results of operations, or liquidity.

Reporting Discontinued Operations: In April of 2014, the FASB issued guidance that requires an entity to report a disposal of a component of an entity or a group of components of an entity in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity's operations and financial results when the component of an entity or group of components of an entity (i) meets the criteria to be classified as held for sale, (ii) is disposed of by sale, or (iii) is disposed of other than by sale. The guidance is effective for annual and interim reporting periods beginning on or after December 15, 2014, and must be applied prospectively. Management does not expect the adoption of this guidance will materially impact the Company's financial condition, results of operations, or liquidity.

Revenue from Contracts with Customers: In May of 2014, the FASB issued guidance that requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance is effective for annual and interim reporting periods beginning on or after December 15, 2016, and must be applied either retrospectively or using the modified retrospective approach. Management is evaluating the new guidance, but does not expect the adoption of this guidance will materially impact the Company's financial condition, results of operations, or liquidity.

Transfers and Servicing: In June of 2014, the FASB issued guidance that requires repurchase-to-maturity transactions to be accounted for as secured borrowings. The guidance also requires separate accounting for a transfer of a financial asset executed contemporaneously with a repurchase agreement with the same counterparty. If the derecognition criteria are met, the initial transfer will generally be accounted for as a sale and the repurchase agreement will generally be accounted for as a secured borrowing. The guidance is effective for annual and interim reporting periods beginning after December 15, 2014. Management is evaluating the new guidance, but does not expect the adoption of this guidance will materially impact the Company's financial condition, results of operations, or liquidity.

Receivables - Troubled Debt Restructurings by Creditors: In August of 2014, the FASB issued guidance that requires an entity to derecognize a mortgage loan and recognize a separate other receivable upon foreclosure if (i) the loan has a government guarantee that is not separable from the loan before foreclosure, (ii) at the time of foreclosure, the creditor has the intent to convey the real estate property to the guarantor and make a claim on that guarantee, and the creditor has the ability to recover under that claim, and (iii) at the time of foreclosure, any amount of the claim that is determined on the basis of the fair value of the real estate is fixed. The separate other receivable is to be measured based on the amount of the loan balance (principal and interest) expected to be recovered from the guarantor. The guidance is effective for annual and interim reporting periods beginning after December 15, 2014. Management is evaluating the new guidance, but does not expect the adoption of this guidance will materially impact the Company's financial condition, results of operations, or liquidity.

Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern: In August of 2014, the FASB issued guidance that requires management to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued. The guidance is effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. Management does not expect the adoption of this guidance will materially impact the Company's financial condition, results of operations, or liquidity.

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3.  ACQUISITIONS

Completed Acquisitions

Popular Community Bank

On August 8, 2014, First Midwest Bank (the "Bank") completed the acquisition of the Chicago area banking operations of Banco Popular North America (“Popular”), doing business as Popular Community Bank, which is a subsidiary of Popular, Inc. The acquisition included Popular’s twelve full-service retail banking offices and its small business and middle market commercial lending activities in the Chicago metropolitan area at a purchase price of $19.0 million paid in cash.

The assets acquired and liabilities assumed, both intangible and tangible, were recorded at their estimated fair values as of the August 8, 2014 acquisition date and have been accounted for under the acquisition method of accounting. The Company is finalizing the fair values of loans and intangible assets and liabilities. As a result, the fair value adjustments associated with these accounts and goodwill, which are included in the following table, are preliminary and may change.

Popular Acquisition

(Dollar amounts in thousands)

	August 8, 2014
Assets
Cash and due from banks	$	142,276
Loans:
Commercial, industrial, and agricultural	76,680
Commercial real estate:
Office, retail, and industrial	194,312
Multi-family	192,464
Other commercial real estate	57,111
Total commercial real estate	443,887
Consumer	28,819
Total loans	549,386
Goodwill	36,906
Intangible assets	8,003
Premises, furniture, and equipment	4,647
Accrued interest receivable and other assets	1,849
Total assets	$	743,067
Liabilities
Deposits:
Demand deposits	$	163,299
Savings deposits	91,205
NOW accounts	100,852
Money market deposits	181,730
Time deposits	194,786
Total deposits	731,872
Intangible liabilities	10,631
Accrued interest payable and other liabilities	564
Total liabilities	$	743,067

Expenses related to the acquisition of Popular totaled $2.2 million and $2.8 million during the quarter and nine months ended September 30, 2014, respectively, and are reported within noninterest expense. The acquisition was not considered material to the Company’s financial statements; therefore, pro forma financial data and related disclosures are not included.

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National Machine Tool Financial Corporation

On September 26, 2014, the Bank completed the acquisition of National Machine Tool Financial Corporation ("National Machine Tool"). National Machine Tool provides equipment leasing and financing alternatives to traditional bank financing. On the date of acquisition, the Bank acquired approximately $4.4 million in direct financing leases, lease loans, and other assets.

Pending Acquisitions

Great Lakes Financial Resources, Inc.

On July 7, 2014, the Company entered into a definitive agreement to acquire the south suburban Chicago-based Great Lakes Financial Resources, Inc. ("Great Lakes"), the holding company for Great Lakes Bank, National Association. As part of the acquisition, the Company will acquire eight locations and approximately $234 million in loans and will assume approximately $490 million in deposits. The merger consideration will be a combination of Company common stock and cash, with an overall transaction value of approximately $58.0 million, subject to certain adjustments based on the price of the Company's common stock prior to closing. The Company received approval for this acquisition from the Federal Reserve, and the acquisition is expected to close before the end of 2014, subject to approval by the stockholders of Great Lakes and certain closing conditions.

4.  SECURITIES

Securities are classified as held-to-maturity, trading, or available-for-sale at the time of purchase. Securities classified as held-to-maturity are securities for which management has the positive intent and ability to hold to maturity and are stated at cost.

The Company’s trading securities consist of diversified investment securities reported at fair value that are held in a grantor trust under deferred compensation arrangements that allow plan participants to direct amounts into a variety of securities, including Company stock. Net trading (losses) gains represent changes in the fair value of the trading securities portfolio and are included in other noninterest income in the Condensed Consolidated Statements of Income.

All other securities are classified as available-for-sale and are carried at fair value with unrealized gains and losses, net of related deferred income taxes, recorded in stockholders’ equity as a separate component of accumulated other comprehensive loss.

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A summary of the Company's securities portfolio by category and maturity is presented in the following tables.

Securities Portfolio

(Dollar amounts in thousands)

	September 30, 2014									December 31, 2013
	Amortized Cost		Gross Unrealized					Fair  Value		Amortized Cost		Gross Unrealized					Fair  Value
			Gains		Losses							Gains		Losses
Securities Available-for-Sale
U.S. agency securities	$	500	$	—	$	—		$	500	$	500	$	—	$	—		$	500
Collateralized mortgage   obligations (“CMOs”)	424,946		1,578		(9,977		)	416,547		490,962		1,427		(16,621		)	475,768
Other mortgage-backed   securities (“MBSs”)	117,271		4,045		(827		)	120,489		135,097		3,349		(2,282		)	136,164
Municipal securities	423,904		12,517		(1,349		)	435,072		457,318		9,673		(5,598		)	461,393
Trust preferred   collateralized debt   obligations (“CDOs”)	45,021		—		(26,652		)	18,369		46,532		—		(28,223		)	18,309
Corporate debt securities	3,724		122		—			3,846		12,999		1,930		—			14,929
Equity securities	2,575		77		(55		)	2,597		3,706		2,046		(90		)	5,662
Total available-   for-sale securities	$	1,017,941	$	18,339	$	(38,860	)	$	997,420	$	1,147,114	$	18,425	$	(52,814	)	$	1,112,725
Securities Held-to-Maturity
Municipal securities	$	26,776	$	990	$	—		$	27,766	$	44,322	$	—	$	(935	)	$	43,387
Trading Securities								$	17,928								$	17,317

Remaining Contractual Maturity of Securities

(Dollar amounts in thousands)

	September 30, 2014
	Available-for-Sale				Held-to-Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
One year or less	$	65,157	$	63,042	$	3,425	$	3,552
After one year to five years	80,964		78,335		8,505		8,819
After five years to ten years	196,380		190,004		5,703		5,914
After ten years	130,648		126,406		9,143		9,481
Securities that do not have a single contractual maturity date	544,792		539,633		—		—
Total	$	1,017,941	$	997,420	$	26,776	$	27,766

The carrying value of securities available-for-sale that were pledged to secure deposits or for other purposes as permitted or required by law totaled $816.1 million at September 30, 2014 and $755.3 million at December 31, 2013. No securities held-to-maturity were pledged as of September 30, 2014 or December 31, 2013.

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Purchases and sales of securities are recognized on a trade date basis. Realized securities gains or losses are reported in net securities gains in the Condensed Consolidated Statements of Income. The cost of securities sold is based on the specific identification method. The following table presents net realized gains on securities.

Securities Gains (Losses)

(Dollar amounts in thousands)

	Quarters Ended   September 30,						Nine Months Ended   September 30,
	2014			2013			2014			2013
Gains on sales of securities:
Gross realized gains	$	2,570		$	34,205		$	8,188		$	34,421
Gross realized losses	—			—			—			—
Net realized gains on sales of securities	2,570			34,205			8,188			34,421
Non-cash impairment charges:
Other-than-temporary securities impairment ("OTTI")	—			(404		)	(28		)	(404		)
Net non-cash impairment charges	—			(404		)	(28		)	(404		)
Net realized gains	$	2,570		$	33,801		$	8,160		$	34,017
Net trading (losses) gains (1)	$	(356	)	$	882		$	366		$	2,132

⁽¹⁾  All net trading (losses) gains relate to trading securities still held as of September 30, 2014 and September 30, 2013 and are included in other income in the Condensed Consolidated Statement of Income.

Net realized gains on sales of securities for the third quarter and first nine months of 2014 were $2.6 million and $8.2 million, respectively. During the third quarter of 2014, the Company sold certain corporate bonds and other investments at gains of $2.6 million. Net securities gains for the nine months ended September 30, 2014 also consisted of the sale of a non-accrual CDO at a gain of $3.5 million, sales of municipal securities at gains of $468,000, and the sale of other investments at a gain of $1.6 million.

The non-cash impairment charges for the nine months ended September 30, 2014 in the table above relates to OTTI charges on certain CMOs. For the quarter and nine months ended September 30, 2013, non-cash impairment charges relates to OTTI on municipal securities and CDOs. Accounting guidance requires that the credit portion of an OTTI charge be recognized through income. If a decline in fair value below carrying value is not attributable to credit deterioration and the Company does not intend to sell the security or believe it would not be more likely than not required to sell the security prior to recovery, the Company records the non-credit related portion of the decline in fair value in other comprehensive (loss) income.

The following table presents a rollforward of life-to-date OTTI recognized in earnings related to all available-for-sale securities held by the Company for the quarters and nine months ended September 30, 2014 and 2013. The majority of the beginning and ending balance of OTTI relates to CDOs currently held by the Company.

Changes in OTTI Recognized in Earnings

(Dollar amounts in thousands)

	Quarters Ended   September 30,					Nine Months Ended   September 30,
	2014		2013			2014			2013
Beginning balance	$	23,880	$	32,053		$	32,422		$	38,803
OTTI included in earnings (1):
Losses on securities that previously had OTTI	—		—			28			—
Losses on securities that did not previously have OTTI	—		404			—			404
Reduction for sales of securities (2)	—		(39		)	(8,570		)	(6,789		)
Ending balance	$	23,880	$	32,418		$	23,880		$	32,418

⁽¹⁾  Included in net securities gains in the Condensed Consolidated Statements of Income.

⁽²⁾  During the nine months ended September 30, 2014, one CDO with a carrying value of $1.3 million was sold. In addition, one CDO with a carrying value of zero was sold during the nine months ended September 30, 2013. These CDOs had OTTI of $8.6 million and $6.8 million, respectively, that were previously recognized in earnings.

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The following table presents the aggregate amount of unrealized losses and the aggregate related fair values of securities with unrealized losses as of September 30, 2014 and December 31, 2013.

Securities in an Unrealized Loss Position

(Dollar amounts in thousands)

		Less Than 12 Months				Greater Than 12 Months				Total
	Number of Securities	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
As of September 30, 2014
CMOs	59	$	15,653	$	139	$	312,418	$	9,838	$	328,071	$	9,977
Other MBSs	11	173		2		41,570		825		41,743		827
Municipal securities	92	1,318		8		57,298		1,341		58,616		1,349
CDOs	5	—		—		18,369		26,652		18,369		26,652
Equity securities	1	—		—		2,238		55		2,238		55
Total	168	$	17,144	$	149	$	431,893	$	38,711	$	449,037	$	38,860
As of December 31, 2013
CMOs	67	$	338,064	$	14,288	$	57,269	$	2,333	$	395,333	$	16,621
Other MBSs	19	57,311		2,281		356		1		57,667		2,282
Municipal securities	154	65,370		3,245		27,565		2,353		92,935		5,598
CDOs	6	—		—		18,309		28,223		18,309		28,223
Equity securities	1	2,168		90		—		—		2,168		90
Total	247	$	462,913	$	19,904	$	103,499	$	32,910	$	566,412	$	52,814

Substantially all of the Company’s CMOs and other MBSs are either backed by U.S. government-owned agencies or issued by U.S. government-sponsored enterprises. Municipal securities are issued by municipal authorities, and the majority are supported by third party insurance or some other form of credit enhancement. Management does not believe any individual unrealized loss as of September 30, 2014 represents an OTTI related to credit deterioration. The unrealized losses associated with these securities are not believed to be attributed to credit quality, but rather to changes in interest rates and temporary market movements. In addition, the Company does not intend to sell the securities with unrealized losses, and it is not more likely than not that the Company will be required to sell them before recovery of their amortized cost basis, which may be at maturity.

The unrealized losses on CDOs as of September 30, 2014 reflect the illiquidity of these structured investment vehicles. Management does not believe these unrealized losses represent OTTI related to credit deterioration. In addition, the Company does not intend to sell the CDOs with unrealized losses within a short period of time, and the Company does not believe it is more likely than not that it will be required to sell them before recovery of their amortized cost basis, which may be at maturity.

Significant judgment is required to calculate the fair value of the CDOs, all of which are pooled. The Company estimates the fair value of these securities using discounted cash flow analyses with the assistance of a structured credit valuation firm. For additional discussion of the CDO valuation methodology, refer to Note 12, “Fair Value."

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5.  LOANS

Loans Held-for-Investment

The following table presents the Company's loans held-for-investment by class.

Loan Portfolio

(Dollar amounts in thousands)

	September 30, 2014		December 31, 2013
Commercial and industrial	$	2,208,166	$	1,830,638
Agricultural	347,511		321,702
Commercial real estate:
Office, retail, and industrial	1,422,522		1,353,685
Multi-family	559,689		332,873
Construction	193,445		186,197
Other commercial real estate	871,825		807,071
Total commercial real estate	3,047,481		2,679,826
Total corporate loans	5,603,158		4,832,166
Home equity	517,446		427,020
1-4 family mortgages	238,172		275,992
Installment	69,428		44,827
Total consumer loans	825,046		747,839
Total loans, excluding covered loans	6,428,204		5,580,005
Covered loans (1)	90,875		134,355
Total loans	$	6,519,079	$	5,714,360
Deferred loan fees included in total loans	$	4,163	$	4,656
Overdrawn demand deposits included in total loans	3,632		5,047

⁽¹⁾  For information on covered loans, refer to Note 6, “Acquired and Covered Loans.”

The Company primarily lends to community-based and mid-sized businesses, commercial real estate customers, and consumers in its markets. Within these areas, the Company diversifies its loan portfolio by loan type, industry, and borrower.

It is the Company’s policy to review each prospective credit to determine the appropriateness and the adequacy of security or collateral prior to making a loan. In the event of borrower default, the Company seeks recovery in compliance with state lending laws, the Company’s lending standards, and credit monitoring and remediation procedures. A discussion of risk characteristics relevant to each portfolio segment is presented in Note 4, “Loans,” in the Company’s 2013 10-K.

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Loan Sales

The table below summarizes the Company's loan sales for the quarter and nine months ended September 30, 2014 and 2013.

Loan Sales

(Dollar amounts in thousands)

	Quarters Ended   September 30,				Nine Months Ended   September 30,
	2014		2013		2014		2013
1-4 family mortgage loans
Proceeds from sales	$	32,611	$	37,060	$	117,549	$	122,067
Less book value of loans sold:
Loans originated with intent to sell	26,384		32,485		62,319		32,807
Loans held-for-investment	5,302		3,592		52,384		85,271
Total book value of loans sold	31,686		36,077		114,703		118,078
Net gains on sales of 1-4 family mortgages	$	925	$	983	$	2,846	$	3,989

The Company retained servicing responsibilities for a portion of the 1-4 family mortgage loans sold and collects servicing fees equal to a percentage of the outstanding principal balance. The Company also retained limited recourse for credit losses on the sold loans. A description of the recourse obligation is presented in Note 11, “Commitments, Guarantees, and Contingent Liabilities.”

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6.  ACQUIRED AND COVERED LOANS

Acquired loans consist primarily of loans that were acquired in business combinations that are not covered by the FDIC Agreements. These loans are included in loans, excluding covered loans, in the Consolidated Statements of Financial Condition. Covered loans consist of loans acquired by the Company in four FDIC-assisted transactions. Most loans and OREO acquired in three of those transactions are covered by the FDIC Agreements. The significant accounting policies related to acquired and covered loans, which are classified as PCI and Non-PCI, and the related FDIC indemnification asset are presented in Note 1, “Summary of Significant Accounting Policies.”

The following table presents PCI and Non-PCI, loans as of September 30, 2014 and December 31, 2013.

Acquired and Covered Loans

(Dollar amounts in thousands)

	September 30, 2014						December 31, 2013
	PCI		Non-PCI		Total		PCI		Non-PCI		Total
Acquired loans	$	20,937	$	539,454	$	560,391	$	15,608	$	17,024	$	32,632
Covered loans	64,015		26,860		90,875		103,525		30,830		134,355
Total acquired and covered loans	$	84,952	$	566,314	$	651,266	$	119,133	$	47,854	$	166,987

In connection with the FDIC Agreements, the Company recorded an indemnification asset. To maintain eligibility for the loss share reimbursement, the Company is required to follow certain servicing procedures as specified in the FDIC Agreements. The Company was in compliance with those requirements as of September 30, 2014 and December 31, 2013.

A rollforward of the carrying value of the FDIC indemnification asset for the quarters and nine months ended September 30, 2014 and 2013 is presented in the following table.

Changes in the FDIC Indemnification Asset

(Dollar amounts in thousands)

	Quarters Ended   September 30,						Nine Months Ended   September 30,
	2014			2013			2014			2013
Beginning balance	$	10,276		$	23,158		$	16,585		$	37,051
Amortization	(650		)	(116		)	(2,784		)	(2,348		)
Change in expected reimbursements from the FDIC for changes   in expected credit losses	(857		)	(999		)	(325		)	(3,453		)
Payments received from the FDIC	(70		)	(3,965		)	(4,777		)	(13,172		)
Ending balance	$	8,699		$	18,078		$	8,699		$	18,078

20

Changes in the accretable yield for acquired and covered PCI loans were as follows.

Changes in Accretable Yield

(Dollar amounts in thousands)

	Quarters Ended   September 30,						Nine Months Ended   September 30,
	2014			2013			2014			2013
Beginning balances	$	35,152		$	47,104		$	36,792		$	51,498
Accretion	(3,346		)	(3,410		)	(10,277		)	(11,752		)
Additions	1,265			—			1,265			—
Other (1)	(5,215		)	(3,128		)	76			820
Ending balance	$	27,856		$	40,566		$	27,856		$	40,566

⁽¹⁾  Decreases result from the resolution of certain loans occurring earlier than anticipated while increases represent an increase in the expected future cash flows to be collected over the remaining estimated life of the underlying portfolio.

21

7.  PAST DUE LOANS, ALLOWANCE FOR CREDIT LOSSES, IMPAIRED LOANS, AND TDRS

Past Due and Non-accrual Loans

The following table presents an aging analysis of the Company’s past due loans as of September 30, 2014 and December 31, 2013. The aging is determined without regard to accrual status. The table also presents non-performing loans, consisting of non-accrual loans (the majority of which are past due) and loans 90 days or more past due and still accruing interest, as of each balance sheet date.

Aging Analysis of Past Due Loans and Non-Performing Loans by Class

(Dollar amounts in thousands)

	Aging Analysis (Accruing and Non-accrual)										Non-performing Loans
	Current		30-89 Days Past Due		90 Days or More Past Due		Total Past Due		Total Loans		Non- accrual Loans		90 Days Past Due Loans, Still Accruing Interest
September 30, 2014
Commercial and industrial	$	2,197,785	$	6,216	$	4,165	$	10,381	$	2,208,166	$	19,696	$	1,256
Agricultural	347,179		—		332		332		347,511		361		—
Commercial real estate:
Office, retail, and industrial	1,401,990		1,842		18,690		20,532		1,422,522		16,963		3,840
Multi-family	557,852		641		1,196		1,837		559,689		1,536		—
Construction	186,363		—		7,082		7,082		193,445		7,082		—
Other commercial real estate	861,061		4,461		6,303		10,764		871,825		7,912		150
Total commercial real   estate	3,007,266		6,944		33,271		40,215		3,047,481		33,493		3,990
Total corporate loans	5,552,230		13,160		37,768		50,928		5,603,158		53,550		5,246
Home equity	509,530		3,525		4,391		7,916		517,446		5,834		587
1-4 family mortgages	234,672		1,935		1,565		3,500		238,172		3,235		126
Installment	66,997		428		2,003		2,431		69,428		1,909		103
Total consumer loans	811,199		5,888		7,959		13,847		825,046		10,978		816
Total loans, excluding   covered loans	6,363,429		19,048		45,727		64,775		6,428,204		64,528		6,062
Covered loans	73,370		954		16,551		17,505		90,875		10,905		7,031
Total loans	$	6,436,799	$	20,002	$	62,278	$	82,280	$	6,519,079	$	75,433	$	13,093
December 31, 2013
Commercial and industrial	$	1,814,660	$	6,872	$	9,106	$	15,978	$	1,830,638	$	11,767	$	393
Agricultural	321,156		134		412		546		321,702		519		—
Commercial real estate:
Office, retail, and industrial	1,335,027		2,620		16,038		18,658		1,353,685		17,076		1,315
Multi-family	330,960		318		1,595		1,913		332,873		1,848		—
Construction	180,083		23		6,091		6,114		186,197		6,297		—
Other commercial real estate	795,462		5,365		6,244		11,609		807,071		8,153		258
Total commercial real   estate	2,641,532		8,326		29,968		38,294		2,679,826		33,374		1,573
Total corporate loans	4,777,348		15,332		39,486		54,818		4,832,166		45,660		1,966
Home equity	415,791		4,830		6,399		11,229		427,020		6,864		1,102
1-4 family mortgages	268,912		2,046		5,034		7,080		275,992		5,198		548
Installment	42,350		330		2,147		2,477		44,827		2,076		92
Total consumer loans	727,053		7,206		13,580		20,786		747,839		14,138		1,742
Total loans, excluding   covered loans	5,504,401		22,538		53,066		75,604		5,580,005		59,798		3,708
Covered loans	94,211		2,232		37,912		40,144		134,355		20,942		18,081
Total loans	$	5,598,612	$	24,770	$	90,978	$	115,748	$	5,714,360	$	80,740	$	21,789

22

Allowance for Credit Losses

The Company maintains an allowance for credit losses at a level deemed adequate by management to absorb probable losses inherent in the loan portfolio. Refer to Note 1, “Summary of Significant Accounting Policies,” for the accounting policy for the allowance for credit losses. A rollforward of the allowance for credit losses by portfolio segment for the quarters and nine months ended September 30, 2014 and 2013 is presented in the table below.

Allowance for Credit Losses by Portfolio Segment

(Dollar amounts in thousands)

	Commercial, Industrial, and Agricultural			Office, Retail, and Industrial			Multi- Family			Construction			Other Commercial Real Estate			Consumer			Covered Loans			Reserve for Unfunded Commitments			Total Allowance
Quarter ended September 30, 2014
Beginning balance	$	29,194		$	11,831		$	2,048		$	4,885		$	8,585		$	12,440		$	9,343		$	1,616		$	79,942
Charge-offs	(9,763		)	(2,514		)	(26		)	(157		)	(1,363		)	(3,148		)	(135		)	—			(17,106		)
Recoveries	716			55			—			—			108			150			130			—			1,159
Net charge-offs	(9,047		)	(2,459		)	(26		)	(157		)	(1,255		)	(2,998		)	(5		)	—			(15,947		)
Provision for loan   and covered loan   losses and other	10,458			265			(65		)	(3,130		)	189			3,699			(689		)	—			10,727
Ending balance	$	30,605		$	9,637		$	1,957		$	1,598		$	7,519		$	13,141		$	8,649		$	1,616		$	74,722
Quarter ended September 30, 2013
Beginning balance	$	31,742		$	11,857		$	3,424		$	4,170		$	16,169		$	12,367		$	14,381		$	2,866		$	96,976
Charge-offs	(2,719		)	(987		)	(112		)	(470		)	(889		)	(2,482		)	(1,636		)	—			(9,295		)
Recoveries	521			31			—			57			253			374			7			—			1,243
Net charge-offs	(2,198		)	(956		)	(112		)	(413		)	(636		)	(2,108		)	(1,629		)	—			(8,052		)
Provision for loan   and covered loan   losses and other	2,452			938			(31		)	(100		)	(1,218		)	2,425			304			(480		)	4,290
Ending balance	$	31,996		$	11,839		$	3,281		$	3,657		$	14,315		$	12,684		$	13,056		$	2,386		$	93,214
Nine months ended September 30, 2014
Beginning balance	$	30,381		$	10,405		$	2,017		$	6,316		$	10,817		$	13,010		$	12,559		$	1,616		$	87,121
Charge-offs	(15,542		)	(7,108		)	(383		)	(1,052		)	(3,695		)	(7,005		)	(659		)	—			(35,444		)
Recoveries	3,135			403			3			160			341			502			992			—			5,536
Net charge-offs	(12,407		)	(6,705		)	(380		)	(892		)	(3,354		)	(6,503		)	333			—			(29,908		)
Provision for loan   and covered loan   losses and other	12,631			5,937			320			(3,826		)	56			6,634			(4,243		)	—			17,509
Ending balance	$	30,605		$	9,637		$	1,957		$	1,598		$	7,519		$	13,141		$	8,649		$	1,616		$	74,722
Nine months ended September 30, 2013
Beginning balance	$	36,761		$	11,432		$	3,575		$	5,242		$	17,512		$	12,862		$	12,062		$	3,366		$	102,812
Charge-offs	(9,010		)	(3,702		)	(490		)	(1,885		)	(3,971		)	(7,369		)	(4,322		)	—			(30,749		)
Recoveries	3,183			68			35			62			1,614			894			18			—			5,874
Net charge-offs	(5,827		)	(3,634		)	(455		)	(1,823		)	(2,357		)	(6,475		)	(4,304		)	—			(24,875		)
Provision for loan   and covered loan   losses and other	1,062			4,041			161			238			(840		)	6,297			5,298			(980		)	15,277
Ending balance	$	31,996		$	11,839		$	3,281		$	3,657		$	14,315		$	12,684		$	13,056		$	2,386		$	93,214

23

The table below provides a breakdown of loans and the related allowance for credit losses by portfolio segment as of September 30, 2014 and December 31, 2013.

Loans and Related Allowance for Credit Losses by Portfolio Segment

(Dollar amounts in thousands)

	Loans								Allowance for Credit Losses
	Individually Evaluated for Impairment		Collectively Evaluated for Impairment		PCI		Total		Individually Evaluated for Impairment		Collectively Evaluated for Impairment		PCI		Total
September 30, 2014
Commercial, industrial, and   agricultural	$	18,547	$	2,535,395	$	1,735	$	2,555,677	$	3,599	$	27,006	$	—	$	30,605
Commercial real estate:
Office, retail, and industrial	16,140		1,406,307		75		1,422,522		—		9,637		—		9,637
Multi-family	1,141		554,814		3,734		559,689		—		1,942		15		1,957
Construction	6,859		186,586		—		193,445		—		1,598		—		1,598
Other commercial real estate	4,719		860,410		6,696		871,825		—		7,519		—		7,519
Total commercial   real estate	28,859		3,008,117		10,505		3,047,481		—		20,696		15		20,711
Total corporate loans	47,406		5,543,512		12,240		5,603,158		3,599		47,702		15		51,316
Consumer	—		816,349		8,697		825,046		—		12,588		553		13,141
Total loans, excluding   covered loans	47,406		6,359,861		20,937		6,428,204		3,599		60,290		568		64,457
Covered loans	—		26,860		64,015		90,875		—		578		8,071		8,649
Reserve for unfunded   commitments	—		—		—		—		—		1,616		—		1,616
Total loans	$	47,406	$	6,386,721	$	84,952	$	6,519,079	$	3,599	$	62,484	$	8,639	$	74,722
December 31, 2013
Commercial, industrial, and   agricultural	$	13,178	$	2,137,440	$	1,722	$	2,152,340	$	4,046	$	26,335	$	—	$	30,381
Commercial real estate:
Office, retail, and industrial	26,348		1,327,337		—		1,353,685		214		10,191		—		10,405
Multi-family	1,296		331,445		132		332,873		18		1,999		—		2,017
Construction	5,712		180,485		—		186,197		178		6,138		—		6,316
Other commercial real estate	9,298		793,703		4,070		807,071		704		10,113		—		10,817
Total commercial   real estate	42,654		2,632,970		4,202		2,679,826		1,114		28,441		—		29,555
Total corporate loans	55,832		4,770,410		5,924		4,832,166		5,160		54,776		—		59,936
Consumer	—		738,155		9,684		747,839		—		13,010		—		13,010
Total loans, excluding   covered loans	55,832		5,508,565		15,608		5,580,005		5,160		67,786		—		72,946
Covered loans	—		30,830		103,525		134,355		—		702		11,857		12,559
Reserve for unfunded   commitments	—		—		—		—		—		1,616		—		1,616
Total loans	$	55,832	$	5,539,395	$	119,133	$	5,714,360	$	5,160	$	70,104	$	11,857	$	87,121

24

Loans Individually Evaluated for Impairment

The following table presents loans individually evaluated for impairment by class of loan as of September 30, 2014 and December 31, 2013. PCI loans are excluded from this disclosure.

Impaired Loans Individually Evaluated by Class

(Dollar amounts in thousands)

	September 30, 2014								December 31, 2013
	Recorded Investment In								Recorded Investment In
	Loans with No Specific Reserve		Loans with a Specific Reserve		Unpaid Principal Balance		Specific Reserve		Loans with No Specific Reserve		Loans with a Specific Reserve		Unpaid Principal Balance		Specific Reserve
Commercial and industrial	$	2,524	$	16,023	$	40,067	$	2,968	$	10,047	$	3,131	$	25,887	$	4,046
Agricultural	—		—		—		—		—		—		—		—
Commercial real estate:
Office, retail, and industrial	16,140		—		25,614		—		23,872		2,476		35,868		214
Multi-family	1,141		—		1,268		—		1,098		198		1,621		18
Construction	6,859		—		8,412		—		4,586		1,126		10,037		178
Other commercial real estate	4,719		—		6,979		—		7,553		1,745		11,335		704
Total commercial real   estate	28,859		—		42,273		—		37,109		5,545		58,861		1,114
Total impaired loans    individually evaluated    for impairment	$	31,383	$	16,023	$	82,340	$	2,968	$	47,156	$	8,676	$	84,748	$	5,160

25

The following table presents the average recorded investment and interest income recognized on impaired loans by class for the quarters and nine months ended September 30, 2014 and 2013. PCI loans are excluded from this disclosure.

Average Recorded Investment and Interest Income Recognized on Impaired Loans by Class

(Dollar amounts in thousands)

	Quarters Ended September 30,
	2014				2013
	Average Recorded Investment		Interest Income Recognized (1)		Average Recorded Investment		Interest Income Recognized (1)
Commercial and industrial	$	20,137	$	57	$	20,665	$	195
Agricultural	—		—		—		—
Commercial real estate:
Office, retail, and industrial	15,873		3		25,747		5
Multi-family	1,155		—		1,337		—
Construction	5,792		—		6,511		—
Other commercial real estate	5,234		22		12,511		16
Total commercial real estate	28,054		25		46,106		21
Total impaired loans	$	48,191	$	82	$	66,771	$	216
	Nine Months Ended September 30,
	2014				2013
	Average Recorded Investment		Interest Income Recognized (1)		Average Recorded Investment		Interest Income Recognized (1)
Commercial and industrial	$	15,222	$	204	$	22,862	$	198
Agricultural	—		—		—		—
Commercial real estate:
Office, retail, and industrial	20,671		150		24,415		15
Multi-family	1,321		—		1,071		—
Construction	5,537		—		5,987		—
Other commercial real estate	6,701		137		14,102		24
Total commercial real estate	34,230		287		45,575		39
Total impaired loans	$	49,452	$	491	$	68,437	$	237

⁽¹⁾  Recorded using the cash basis of accounting.

26

Credit Quality Indicators

Corporate loans and commitments are assessed for credit risk and assigned ratings based on various characteristics, such as the borrower's cash flow, leverage, and collateral. Ratings for commercial credits are reviewed periodically. The following tables present credit quality indicators by class for corporate and consumer loans, excluding covered loans, as of September 30, 2014 and December 31, 2013.

Corporate Credit Quality Indicators by Class, Excluding Covered Loans

(Dollar amounts in thousands)

	Pass		Special Mention (1) (4)		Substandard (2) (4)		Non-accrual (3)		Total
September 30, 2014
Commercial and industrial	$	2,094,453	$	66,429	$	27,588	$	19,696	$	2,208,166
Agricultural	346,851		299		—		361		347,511
Commercial real estate:
Office, retail, and industrial	1,343,833		28,586		33,140		16,963		1,422,522
Multi-family	545,419		5,916		6,818		1,536		559,689
Construction	162,527		7,229		16,607		7,082		193,445
Other commercial real estate	816,679		22,824		24,410		7,912		871,825
Total commercial real estate	2,868,458		64,555		80,975		33,493		3,047,481
Total corporate loans	$	5,309,762	$	131,283	$	108,563	$	53,550	$	5,603,158
December 31, 2013
Commercial and industrial	$	1,780,194	$	23,806	$	14,871	$	11,767	$	1,830,638
Agricultural	320,839		344		—		519		321,702
Commercial real estate:
Office, retail, and industrial	1,284,394		28,677		23,538		17,076		1,353,685
Multi-family	326,901		3,214		910		1,848		332,873
Construction	153,949		8,309		17,642		6,297		186,197
Other commercial real estate	761,465		14,877		22,576		8,153		807,071
Total commercial real estate	2,526,709		55,077		64,666		33,374		2,679,826
Total corporate loans	$	4,627,742	$	79,227	$	79,537	$	45,660	$	4,832,166

⁽¹⁾  Loans categorized as special mention exhibit potential weaknesses that require the close attention of management since these potential weaknesses may result in the deterioration of repayment prospects in the future.

⁽²⁾  Loans categorized as substandard exhibit a well-defined weakness or weaknesses that may jeopardize the liquidation of the debt. These loans continue to accrue interest because they are well secured and collection of principal and interest is expected within a reasonable time.

⁽³⁾  Loans categorized as non-accrual exhibit a well-defined weakness or weaknesses that may jeopardize the liquidation of the debt or result in a loss if the deficiencies are not corrected.

⁽⁴⁾  Total special mention and substandard loans includes accruing TDRs of $3.5 million as of September 30, 2014 and $2.8 million as of December 31, 2013.

27

Consumer Credit Quality Indicators by Class, Excluding Covered Loans

(Dollar amounts in thousands)

	Performing		Non-accrual		Total
September 30, 2014
Home equity	$	511,612	$	5,834	$	517,446
1-4 family mortgages	234,937		3,235		238,172
Installment	67,519		1,909		69,428
Total consumer loans	$	814,068	$	10,978	$	825,046
December 31, 2013
Home equity	$	420,156	$	6,864	$	427,020
1-4 family mortgages	270,794		5,198		275,992
Installment	42,751		2,076		44,827
Total consumer loans	$	733,701	$	14,138	$	747,839

TDRs

TDRs are generally performed at the request of the individual borrower and may include forgiveness of principal, reduction in interest rates, changes in payments, and maturity date extensions. The table below presents TDRs by class as of September 30, 2014 and December 31, 2013. A discussion of our accounting policies for TDRs can be found in Note 1, “Summary of Significant Accounting Policies.”

TDRs by Class

(Dollar amounts in thousands)

	As of September 30, 2014						As of December 31, 2013
	Accruing		Non-accrual (1)		Total		Accruing		Non-accrual (1)		Total
Commercial and industrial	$	2,163	$	15,806	$	17,969	$	6,538	$	2,121	$	8,659
Agricultural	—		—		—		—		—		—
Commercial real estate:
Office, retail, and industrial	592		—		592		10,271		—		10,271
Multi-family	616		237		853		1,038		253		1,291
Construction	—		—		—		—		—		—
Other commercial real estate	441		186		627		4,326		291		4,617
Total commercial real estate	1,649		423		2,072		15,635		544		16,179
Total corporate loans	3,812		16,229		20,041		22,173		2,665		24,838
Home equity	752		513		1,265		787		512		1,299
1-4 family mortgages	885		235		1,120		810		906		1,716
Installment	—		—		—		—		—		—
Total consumer loans	1,637		748		2,385		1,597		1,418		3,015
Total loans	$	5,449	$	16,977	$	22,426	$	23,770	$	4,083	$	27,853

⁽¹⁾  These TDRs are included in non-accrual loans in the preceding tables.

TDRs are included in the calculation of the allowance for credit losses in the same manner as impaired loans. There were $2.6 million in specific reserves related to TDRs as of September 30, 2014 and there were $2.0 million in specific reserves related to TDRs as of December 31, 2013.

28

The following table presents a summary of loans that were restructured during the quarters and nine months ended September 30, 2014 and 2013.

Loans Restructured During the Period

(Dollar amounts in thousands)

	Number of Loans	Pre- Modification Recorded Investment		Funds Disbursed		Interest and Escrow Capitalized		Charge-offs		Post- Modification Recorded Investment
Quarter ended September 30, 2014
Commercial and industrial	5	$	23,015	$	—	$	—	$	—	$	23,015
Office, retail, and industrial	1	417		—		—		—		417
Total TDRs restructured during the period	6	$	23,432	$	—	$	—	$	—	$	23,432
Quarter ended September 30, 2013
Commercial and industrial	3	$	369	$	—	$	—	$	—	$	369
Office, retail, and industrial	2	1,674		—		—		—		1,674
Other commercial real estate	1	10		—		—		—		10
Home equity	8	822		—		—		—		822
Total TDRs restructured during the period	14	$	2,875	$	—	$	—	$	—	$	2,875
Nine months ended September 30, 2014
Commercial and industrial	5	$	23,015	$	—	$	—	$	—	$	23,015
Office, retail, and industrial	1	417		—		—		—		417
Home equity	1	75		—		—		—		75
Total TDRs restructured during the period	7	$	23,507	$	—	$	—	$	—	$	23,507
Nine months ended September 30, 2013
Commercial and industrial	7	$	14,439	$	—	$	2	$	—	$	14,441
Office, retail, and industrial	6	2,275		30		—		—		2,305
Multi-family	5	1,275		—		57		—		1,332
Construction	2	508		—		—		—		508
Other commercial real estate	5	526		—		—		—		526
Home equity	9	947		—		—		—		947
1-4 family mortgages	1	132		—		4		—		136
Total TDRs restructured during the period	35	$	20,102	$	30	$	63	$	—	$	20,195

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Accruing TDRs that do not perform in accordance with their modified terms are transferred to non-accrual. The following table presents TDRs that had payment defaults during the quarters and nine months ended September 30, 2014 and 2013 where the default occurred within twelve months of the restructure date.

TDRs That Defaulted Within Twelve Months of the Restructure Date

(Dollar amounts in thousands)

	Quarters Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
	Number of Loans	Recorded Investment		Number of Loans	Recorded Investment		Number of Loans	Recorded Investment		Number of Loans	Recorded Investment
Commercial and industrial	—	$	—	—	$	—	2	$	125	1	$	350
Other commercial real estate	—	—		—	—		—	—		3	354
Home equity	1	77		—	—		1	77		—	—
Total	1	$	77	—	$	—	3	$	202	4	$	704

A rollforward of the carrying value of TDRs for the quarters and nine months ended September 30, 2014 and 2013 is presented in the following table.

TDR Rollforward

(Dollar amounts in thousands)

	Quarters Ended   September 30,						Nine Months Ended   September 30,
	2014			2013			2014			2013
Accruing
Beginning balance	$	5,697		$	8,287		$	23,770		$	6,867
Additions	417			1,128			492			4,606
Net payments received	(109		)	(248		)	(1,219		)	(415		)
Returned to performing status	—			—			(18,821		)	(5,037		)
Net transfers from non-accrual	(556		)	15,162			1,227			18,308
Ending balance	5,449			24,329			5,449			24,329
Non-accrual
Beginning balance	1,700			18,450			4,083			10,924
Additions	23,015			1,747			23,015			15,589
Net payments received	(135		)	(201		)	(292		)	(735		)
Charge-offs	(8,159		)	(62		)	(8,345		)	(1,850		)
Transfers to OREO	—			(35		)	(257		)	(77		)
Loans sold	—			—			—			(806		)
Net transfers to accruing	556			(15,162		)	(1,227		)	(18,308		)
Ending balance	16,977			4,737			16,977			4,737
Total TDRs	$	22,426		$	29,066		$	22,426		$	29,066

For TDRs to be removed from TDR status in the calendar year after the restructuring, the loans must (i) have an interest rate and terms that reflect market conditions at the time of restructuring, and (ii) be in compliance with the modified terms. TDRs that were returned to performing status totaled $18.8 million and $5.0 million for the nine months ended September 30, 2014 and 2013, respectively. Loans that were not restructured at market rates and terms, that are not in compliance with the modified terms, or for which there is a concern about the future ability of the borrower to meet its obligations under the modified terms, continue to be separately reported as restructured until paid in full or charged-off.

There were no material commitments to lend additional funds to borrowers with TDRs as of September 30, 2014 and December 31, 2013.

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8. EARNINGS PER COMMON SHARE

The table below displays the calculation of basic and diluted earnings per share.

Basic and Diluted Earnings per Common Share

(Amounts in thousands, except per share data)

	Quarters Ended   September 30,						Nine Months Ended   September 30,
	2014			2013			2014			2013
Net income	$	18,549		$	29,323		$	54,713		$	60,141
Net income applicable to non-vested restricted shares	(242		)	(416		)	(697		)	(847		)
Net income applicable to common shares	$	18,307		$	28,907		$	54,016		$	59,294
Weighted-average common shares outstanding:
Weighted-average common shares outstanding (basic)	74,341			74,023			74,270			73,969
Dilutive effect of common stock equivalents	11			11			12			9
Weighted-average diluted common shares outstanding	74,352			74,034			74,282			73,978
Basic earnings per common share	$	0.25		$	0.39		$	0.73		$	0.80
Diluted earnings per common share	$	0.25		$	0.39		$	0.73		$	0.80
Anti-dilutive shares not included in the computation of diluted earnings per common share (1)	1,155			1,412			1,215			1,483

⁽¹⁾  This amount represents outstanding stock options for which the exercise price is greater than the average market price of the Company's common stock.

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9.  INCOME TAXES

The following table presents income tax expense and the effective income tax rate for the quarters and nine months ended September 30, 2014 and 2013.

Income Tax Expense

(Dollar amounts in thousands)

	Quarters Ended   September 30,						Nine Months Ended   September 30,
	2014			2013			2014			2013
Income before income tax expense	$	27,098		$	54,282		$	80,076		$	99,348
Income tax expense:
Federal income tax expense	$	6,714		$	19,145		$	19,719		$	29,058
State income tax expense	1,835			5,814			5,644			10,149
Total income tax expense	$	8,549		$	24,959		$	25,363		$	39,207
Effective income tax rate	31.5		%	46.0		%	31.7		%	39.5		%

Federal income tax expense and the effective income tax rate are influenced by the amount of tax-exempt income derived from investment securities and BOLI in relation to pre-tax income and state income taxes. State income tax expense and the related effective tax rate are driven by the amount of state tax-exempt income in relation to pre-tax income and state tax rules for consolidated/combined reporting and sourcing of income and expense.

Effective tax rates were elevated for the quarter and nine months ended September 30, 2013 due to a $34.0 million gain recognized on the sale of an equity investment and a $7.8 million gain on the termination of two FHLB forward commitments, which were taxed at statutory rates, and a $13.3 million non-deductible BOLI modification loss. Excluding these transactions, the effective tax rate for the quarter and nine months ended September 30, 2013 would have been 30.5% and 31.2%, respectively. In addition, an increase in income exempt from state taxes contributed to the decrease in the effective income tax rate compared to both prior periods.

The Company's accounting policies for the recognition of income taxes in the Consolidated Statements of Financial Condition and Income are included in Notes 1 and 14 to the Consolidated Financial Statements of the Company's 2013 10-K.

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10.  DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

In the ordinary course of business, the Company enters into derivative transactions as part of its overall interest rate risk management strategy. The significant accounting policies related to derivative instruments and hedging activities are presented in Note 1, "Summary of Significant Accounting Policies."

Fair Value Hedges

The Company hedges the fair value of fixed rate commercial real estate loans using interest rate swaps through which the Company pays fixed amounts and receives variable amounts. These derivative contracts are designated as fair value hedges.

Fair Value Hedges

(Dollar amounts in thousands)

	September 30, 2014			December 31, 2013
Gross notional amount outstanding	$	13,854		$	14,730
Derivative liability fair value	(1,103		)	(1,472		)
Weighted-average interest rate received	2.07		%	2.08		%
Weighted-average interest rate paid	6.38		%	6.39		%
Weighted-average maturity (in years)	3.02			3.76
Fair value of assets needed to settle derivative transactions (1)	$	1,130		$	1,502

⁽¹⁾  This amount represents the fair value if credit risk related contingent features were triggered.

Hedge ineffectiveness is recognized in other noninterest income in the Condensed Consolidated Statements of Income. For the quarters and nine months ended September 30, 2014 and 2013, fair value hedge ineffectiveness was not material.

Cash Flow Hedges

During the nine months ended September 30, 2014, the Company hedged $325.0 million of certain corporate variable rate loans using interest rate swaps through which the Company receives fixed amounts and pays variable amounts. The Company also hedged $325.0 million of borrowed funds using four forward starting interest rate swaps through which the Company receives variable amounts and pays fixed amounts. The four forward starting interest rate swaps begin in 2015 and 2016 and mature in 2019. These derivative contracts are designated as cash flow hedges.

Cash Flow Hedges

(Dollar amounts in thousands)

	September 30, 2014			December 31, 2013
Gross notional amount outstanding	$	650,000		$	—
Derivative asset fair value	1,156			—
Derivative liability fair value	(1,983		)	—
Weighted-average interest rate received	1.63		%	—
Weighted-average interest rate paid	0.16		%	—
Weighted-average maturity (in years)	4.77			—

The effective portion of gains or losses on cash flow hedges is recorded in accumulated other comprehensive income on an after-tax basis and is subsequently reclassified to interest income or expense in the period that the forecasted hedge impacts earnings. Hedge ineffectiveness is determined using a regressionanalysis at the inception of the hedge relationship and on an ongoing basis. For the quarter ended September 30, 2014, there were no gains or losses related to cash flow hedge ineffectiveness. As of September 30, 2014, the Company estimates that $4.0 million will be reclassified from accumulated other comprehensive income as an increase to interest income over the next twelve months.

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Other Derivative Instruments

The Company also enters into derivative transactions with its commercial customers and simultaneously enters into an offsetting interest rate derivative transaction with a third party. This transaction allows the Company’s customers to effectively convert a variable rate loan into a fixed rate loan. Due to the offsetting nature of these transactions, the Company does not apply hedge accounting treatment. Transaction fees related to commercial customer derivative instruments of $874,000 and $1.3 million were recorded in noninterest income for the quarter and nine months ended September 30, 2014, respectively. There were $1.4 million and $2.0 million in transaction fees recorded for the quarter and nine months ended September 30, 2013, respectfully.

Other Derivative Instruments

(Dollar amounts in thousands)

	September 30, 2014			December 31, 2013
Gross notional amount outstanding	$	432,977		$	256,638
Derivative asset fair value	4,916			2,235
Derivative liability fair value	(4,916		)	(2,235		)
Fair value of assets needed to settle derivative transactions (1)	4,899			1,305

⁽¹⁾  This amount represents the fair value if credit risk related contingent features were triggered.

The Company’s derivative portfolio also includes other derivative instruments that do not receive hedge accounting treatment, such as commitments to originate 1-4 family mortgage loans and foreign exchange contracts. In addition, the Company occasionally enters into risk participation agreements with counterparty banks to transfer or assume a portion of the credit risk related to customer transactions. The amounts of these instruments were not material for any periods presented. The Company had no other derivative instruments as of September 30, 2014 or December 31, 2013. The Company does not enter into derivative transactions for purely speculative purposes.

Credit Risk

Derivative instruments are inherently subject to credit risk, which represents the Company’s risk of loss when the counterparty to a derivative contract fails to perform according to the terms of the agreement. Credit risk is managed by limiting and collateralizing the aggregate amount of net unrealized losses by transaction, monitoring the size and the maturity structure of the derivatives, and applying uniform credit standards. Company policy establishes limits on credit exposure to any single counterparty. In addition, the Company established bilateral collateral agreements with derivative counterparties that provide for exchanges of marketable securities or cash to collateralize either party’s net losses above a stated minimum threshold.

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Certain derivative instruments are subject to master netting agreements with counterparties. The Company records these transactions at their gross fair values and does not offset derivative assets and liabilities in the Consolidated Statements of Financial Condition. The following table presents the Company's derivatives and offsetting positions as of September 30, 2014 and December 31, 2013.

Offsetting Derivatives

(Dollar amounts in thousands)

	Derivative Assets						Derivative Liabilities
	Fair Value						Fair Value
	September 30, 2014			December 31, 2013			September 30, 2014			December 31, 2013
Gross amounts recognized	$	6,072		$	2,235		$	8,002		$	3,707
Less: amounts offset in the Consolidated Statements of   Financial Condition	—			—			—			—
Net amount presented in the Consolidated Statements of   Financial Condition (1)	6,072			2,235			8,002			3,707
Gross amounts not offset in the Consolidated Statements of Financial Condition
Offsetting derivative positions	(1,156		)	(704		)	(1,156		)	(704		)
Cash collateral pledged (2)	—			—			(6,846		)	(3,003		)
Net credit exposure	$	4,916		$	1,531		$	—		$	—

⁽¹⁾  Included in other assets or other liabilities in the Consolidated Statements of Financial Condition.

⁽²⁾  The Company pledged cash collateral of $5.8 million and $3.0 million as of September 30, 2014 and December 31, 2013, respectively, which resulted in a shortage of collateral with counterparties as of September 30, 2014. For purposes of this disclosure, the amount of cash collateral is increased, given excess derivative assets, to fully offset the derivative liability.

As of September 30, 2014 and December 31, 2013, the Company’s derivative instruments generally contained provisions that require the Company’s debt to remain above a certain credit rating by each of the major credit rating agencies or that the Company maintain certain capital levels. If the Company’s debt were to fall below the required credit ratings or the Company's capital were to fall below the required levels, it would be in violation of those provisions, and the counterparties to the derivative instruments could terminate the swap transaction and demand cash settlement of the derivative instrument in an amount equal to the derivative liability fair value. As of September 30, 2014 and December 31, 2013, the Company was not in violation of these provisions.

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11.  COMMITMENTS, GUARANTEES, AND CONTINGENT LIABILITIES

Credit Commitments and Guarantees

In the normal course of business, the Company enters into a variety of financial instruments with off-balance sheet risk to meet the financing needs of its customers and to conduct lending activities, including commitments to extend credit and standby and commercial letters of credit. These instruments involve elements of credit and interest rate risk in excess of the amount recognized in the Consolidated Statements of Financial Condition.

Contractual or Notional Amounts of Financial Instruments

(Dollar amounts in thousands)

	September 30, 2014		December 31, 2013
Commitments to extend credit:
Commercial, industrial, and agricultural	$	1,202,700	$	1,077,201
Commercial real estate	172,012		133,867
Home equity	293,122		268,311
Other commitments (1)	187,385		181,702
Total commitments to extend credit	$	1,855,219	$	1,661,081
Standby letters of credit	$	125,569	$	110,453
Recourse on assets sold:
Unpaid principal balance of loans sold	$	182,834	$	170,330
Carrying value of recourse obligation (2)	158		162

⁽¹⁾  Other commitments includes installment and overdraft protection program commitments.

⁽²⁾  Included in other liabilities in the Consolidated Statements of Financial Condition.

Commitments to extend credit are agreements to lend funds to a customer, subject to contractual terms and covenants. Commitments generally have fixed expiration dates or other termination clauses, variable interest rates, and fee requirements, when applicable. Since many of the commitments are expected to expire without being drawn, the total commitment amounts do not necessarily represent future cash flow requirements.

In the event of a customer's non-performance, the Company's credit loss exposure is equal to the contractual amount of the commitments. The credit risk is essentially the same as extending loans to customers. The Company uses the same credit policies for credit commitments as its loans and minimizes exposure to credit loss through various collateral requirements.

Letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Standby letters of credit generally are contingent on the failure of the customer to perform according to the terms of the contract with the third party and are often issued in favor of a municipality where construction is taking place to ensure the borrower adequately completes the construction.

The maximum potential future payments guaranteed by the Company under standby letters of credit arrangements are equal to the contractual amount of the commitment. If a commitment is funded, the Company may seek recourse through the liquidation of the underlying collateral, including real estate, production plants and property, marketable securities, or receipt of cash.

As a result of the sale of certain 1-4 family mortgage loans, the Company is contractually obligated to repurchase any non-performing loans or loans that do not meet underwriting requirements at recorded value. In accordance with the sales agreements, there is no limitation to the maximum potential future payments or expiration of the Company's recourse obligation. There were no material loan repurchases during the quarters ended September 30, 2014 and 2013.

Legal Proceedings

In the ordinary course of business, there were certain legal proceedings pending against the Company and its subsidiaries at September 30, 2014. While the outcome of any legal proceeding is inherently uncertain, based on information currently available, the Company's management does not expect that any liabilities arising from pending legal matters will have a material adverse effect on the Company's financial position, results of operations, or cash flows.

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12.  FAIR VALUE

Fair value represents the amount expected to be received to sell an asset or paid to transfer a liability in its principal or most advantageous market in an orderly transaction between market participants at the measurement date. In accordance with fair value accounting guidance, the Company measures, records, and reports various types of assets and liabilities at fair value on either a recurring or non-recurring basis in the Consolidated Statements of Financial Condition. Those assets and liabilities are presented below in the sections titled "Assets and Liabilities Required to be Measured at Fair Value on a Recurring Basis" and "Assets and Liabilities Required to be Measured at Fair Value on a Non-Recurring Basis."

Other assets and liabilities are not required to be measured at fair value in the Consolidated Statements of Financial Condition, but must be disclosed at fair value. Refer to the "Fair Value Measurements of Other Financial Instruments" section of this footnote. Any aggregation of the estimated fair values presented in this footnote does not represent the value of the Company.

Depending on the nature of the asset or liability, the Company uses various valuation methodologies and assumptions to estimate fair value. GAAP provides a three-tiered fair value hierarchy based on the inputs used to measure fair value. The hierarchy is defined as follows:

• Level 1 - Quoted prices in active markets for identical assets or liabilities.

• Level 2 - Observable inputs other than level 1 prices, such as quoted prices for similar instruments, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

• Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. These inputs require significant management judgment or estimation, some of which use model-based techniques and may be internally developed.

Assets and liabilities are assigned to a level within the fair value hierarchy based on the lowest level of significant input used to measure fair value. Assets and liabilities may change levels within the fair value hierarchy due to market conditions or other circumstances. Those transfers are recognized on the date of the event that prompted the transfer. There were no transfers of assets or liabilities between levels of the fair value hierarchy during the periods presented.

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Assets and Liabilities Required to be Measured at Fair Value on a Recurring Basis

The following table provides the fair value for assets and liabilities required to be measured at fair value on a recurring basis in the Consolidated Statements of Financial Condition by level in the fair value hierarchy.

Recurring Fair Value Measurements

(Dollar amounts in thousands)

	September 30, 2014						December 31, 2013
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Assets:
Trading securities:
Money market funds	$	1,383	$	—	$	—	$	1,847	$	—	$	—
Mutual funds	16,545		—		—		15,470		—		—
Total trading securities	17,928		—		—		17,317		—		—
Securities available-for-sale:
U.S. Agency securities	—		500		—		—		500		—
CMOs	—		416,547		—		—		475,768		—
Other MBSs	—		120,489		—		—		136,164		—
Municipal securities	—		435,072		—		—		461,393		—
CDOs	—		—		18,369		—		—		18,309
Corporate debt securities	—		3,846		—		—		14,929		—
Equity securities	44		2,553		—		44		5,618		—
Total securities   available-for-sale	44		979,007		18,369		44		1,094,372		18,309
Mortgage servicing rights (1)	—		—		1,942		—		—		1,893
Derivative assets (1)	—		6,072		—		—		2,235		—
Liabilities:
Derivative liabilities (2)	$	—	$	8,002	$	—	$	—	$	3,707	$	—

⁽¹⁾  Included in other assets in the Consolidated Statements of Financial Condition.

⁽²⁾  Included in other liabilities in the Consolidated Statements of Financial Condition.

The following sections describe the specific valuation techniques and inputs used to measure financial assets and liabilities at fair value.

Trading Securities

The Company's trading securities consist of diversified investment securities held in a grantor trust and are invested in money market and mutual funds. The fair value of these money market and mutual funds is based on quoted market prices in active exchange markets and is classified in level 1 of the fair value hierarchy.

Securities Available-for-Sale

The Company’s available-for-sale securities are primarily fixed income instruments that are not quoted on an exchange, but may be traded in active markets. The fair values are based on quoted prices in active markets or market prices for similar securities obtained from external pricing services or dealer market participants and are classified in level 2 of the fair value hierarchy. Quarterly, the Company evaluates the methodologies used by its external pricing services to develop the fair values to determine whether the results of the valuations are representative of an exit price in the Company’s principal markets and an appropriate representation of fair value.

CDOs are classified in level 3 of the fair value hierarchy. The Company estimates the fair values for each CDO using discounted cash flow analyses with the assistance of a structured credit valuation firm. This methodology relies on credit analysis and review of historical financial data for each of the issuers of the securities underlying the individual CDO (the “Issuers”) to estimate the expected future cash flows. These estimates are highly subjective and sensitive to several significant, unobservable inputs, including prepayment assumptions, default probabilities, loss given default assumptions, and deferral cure probabilities. The expected future

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cash flows for each Issuer are then discounted to present values using LIBOR plus an adjustment to reflect the higher risk inherent in these securities given their complex structures and the impact of market factors. Finally, the discounted expected future cash flows for each Issuer are aggregated to derive the estimated fair value for the specific CDO. Information for each CDO, as well as the significant unobservable assumptions, is presented in the following table.

Characteristics of CDOs and Significant Unobservable Inputs

Used in the Valuation of CDOs as of September 30, 2014

(Dollar amounts in thousands)

	CDO Number
	1			2			3			4			5
Characteristics:
Class	C-1			C-1			C-1			B1			C
Original par	$	17,500		$	15,000		$	15,000		$	15,000		$	6,500
Amortized cost	7,140			5,598			12,377			13,727			6,179
Fair value	4,837			704			4,872			5,428			2,528
Lowest credit rating (Moody’s)	Ca			Ca			Ca			Ca			Ca
Number of underlying Issuers	43			54			57			56			74
Percent of Issuers currently   performing	83.7		%	81.5		%	77.2		%	62.5		%	73.0		%
Current deferral and default percent (1)	8.7		%	10.3		%	11.0		%	24.4		%	22.5		%
Expected future deferral and   default percent (2)	12.2		%	10.8		%	13.5		%	19.0		%	9.6		%
Excess subordination percent (3)	—		%	—		%	—		%	10.3		%	10.1		%
Discount rate risk adjustment (4)	12.5		%	14.3		%	13.3		%	11.8		%	12.3		%
Significant unobservable inputs, weighted average of Issuers:
Probability of prepayment	15.2		%	7.6		%	4.5		%	4.5		%	3.5		%
Probability of default	18.5		%	22.2		%	19.8		%	26.0		%	28.8		%
Loss given default	88.2		%	83.2		%	89.4		%	93.2		%	96.3		%
Probability of deferral cure	23.2		%	12.4		%	36.3		%	38.8		%	27.6		%

⁽¹⁾  Represents actual deferrals and defaults, net of recoveries, as a percent of the original collateral.

⁽²⁾  Represents expected future deferrals and defaults, net of recoveries, as a percent of the remaining performing collateral. The probability of future defaults is derived for each Issuer based on a credit analysis. The associated assumed loss given default is based on historical default and recovery information provided by a nationally recognized credit rating agency and is assumed to be 90% for banks, 85% for insurance companies, and 100% for Issuers that have already defaulted.

⁽³⁾  Represents additional defaults that the CDO can absorb before the security experiences any credit impairment. The excess subordination percentage is calculated by dividing the amount of potential additional loss that can be absorbed (before the receipt of all expected future principal and interest payments is affected) by the total balance of performing collateral.

⁽⁴⁾  Cash flows are discounted at LIBOR plus this adjustment to reflect the higher risk inherent in these securities.

Most Issuers have the right to prepay the securities on the fifth anniversary of issuance and under other limited circumstances. To estimate prepayments, a credit analysis of each Issuer is performed to estimate its ability and likelihood to fund a prepayment. If a prepayment occurs, the Company receives cash equal to the par value for the portion of the CDO associated with that Issuer.

The likelihood that an Issuer who is currently deferring payment on the securities will pay all deferred amounts and remain current thereafter is based on an analysis of the Issuer’s asset quality, leverage ratios, and other measures of financial viability.

The impact of changes in these key inputs could result in a significantly higher or lower fair value measurement for each CDO. The timing of the default, the magnitude of the default, and the timing and magnitude of the cure probability are directly interrelated. Defaults that occur sooner and/or are greater than anticipated have a negative impact on the valuation. In addition, a high cure probability assumption has a positive effect on the fair value, and, if a cure event takes place sooner than anticipated, the impact on the valuation is also favorable.

Management monitors the valuation results of each CDO on a quarterly basis, which includes an analysis of historical pricing trends for these types of securities, overall economic conditions (such as tracking LIBOR curves), and the performance of the

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Issuers’ industries. Management also reviews market activity for the same or similar tranches of the CDOs, when available. Annually, management validates significant assumptions by reviewing detailed back-testing performed by the structured credit valuation firm.

A rollforward of the carrying value of CDOs for the quarters and nine months ended September 30, 2014 and 2013 is presented in the following table.

Rollforward of the Carrying Value of CDOs

(Dollar amounts in thousands)

	Quarters Ended   September 30,					Nine Months Ended   September 30,
	2014			2013		2014			2013
Beginning balance	$	18,436		$	14,917	$	18,309		$	12,129
Change in other comprehensive (loss) income (1)	(65		)	2,079		1,571			4,867
Purchases, sales, issuances, settlements, and paydowns (2)	(2		)	—		(1,511		)	—
Ending balance	$	18,369		$	16,996	$	18,369		$	16,996
Change in unrealized losses recognized in earnings related to   securities still held at end of period	$	—		$	—	$	—		$	—

⁽¹⁾  Included in unrealized holding (losses) gains in the Consolidated Statements of Comprehensive Income.

⁽²⁾  For the nine months ended September 30, 2014, one CDO with a carrying value of $1.3 million was sold. In addition, one CDO with a carrying value of zero was sold during the nine months ended September 30, 2013.

Mortgage Servicing Rights

The Company services loans for others totaling $218.9 million as of September 30, 2014 and $214.5 million as of December 31, 2013. These loans are owned by third parties and are not included in the Consolidated Statements of Condition. The Company estimates the fair value of mortgage servicing rights by using a discounted cash flow analysis and classifies them in level 3 of the fair value hierarchy. Additional information regarding the Company’s mortgage servicing rights can be found in Note 21, “Fair Value,” in the Company’s 2013 10-K.

Derivative Assets and Derivative Liabilities

The Company enters into interest rate swaps and derivative transactions with commercial customers. These derivative transactions are executed in the dealer market, and pricing is based on market quotes obtained from the counterparties. The market quotes were developed using market observable inputs, which primarily include LIBOR. Therefore, derivatives are classified in level 2 of the fair value hierarchy. For its derivative assets and liabilities, the Company also considers non-performance risk, including the likelihood of default by itself and its counterparties, when evaluating whether the market quotes from the counterparty are representative of an exit price.

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Assets and Liabilities Required to be Measured at Fair Value on a Non-Recurring Basis

The following table provides the fair value for each class of assets and liabilities required to be measured at fair value on a non-recurring basis in the Consolidated Statements of Financial Condition by level in the fair value hierarchy.

Non-Recurring Fair Value Measurements

(Dollar amounts in thousands)

	September 30, 2014						December 31, 2013
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Collateral-dependent impaired loans (1)	$	—	$	—	$	18,754	$	—	$	—	$	13,103
OREO (2)	—		—		17,580		—		—		13,347
Loans held-for-sale (3)	—		—		24,504		—		—		4,739
Assets held-for-sale (4)	—		—		2,026		—		—		4,027

⁽¹⁾  Includes impaired loans with charge-offs and impaired loans with a specific reserve during the periods presented.

⁽²⁾  Includes OREO and covered OREO with fair value adjustments subsequent to initial transfer that occurred during the periods presented.

⁽³⁾  Included in other assets in the Consolidated Statements of Financial Condition.

⁽⁴⁾  Included in premises, furniture, and equipment in the Consolidated Statements of Financial Condition.

Collateral-Dependent Impaired Loans

Certain collateral-dependent impaired loans are subject to fair value adjustments to reflect the difference between the carrying value of the loan and the value of the underlying collateral. The fair values of collateral-dependent impaired loans are primarily determined by current appraised values of the underlying collateral. Based on the age and/or type, appraisals may be adjusted in the range of 0% to 20%. In certain cases, an internal valuation may be used when the underlying collateral is located in areas where comparable sales data is limited or unavailable. Accordingly, collateral-dependent impaired loans are classified in level 3 of the fair value hierarchy.

Collateral-dependent impaired loans for which the fair value is greater than the recorded investment are not measured at fair value in the Consolidated Statements of Financial Condition and are not included in this disclosure.

OREO

The fair value of OREO is measured using the current appraised value of the properties. In certain circumstances, a current appraisal may not be available or may not represent an accurate measurement of the property's fair value due to outdated market information or other factors. In these cases, the fair value is determined based on the lower of the (i) most recent appraised value, (ii) broker price opinion, (iii) current listing price, or (iv) signed sales contract. Given these valuation methods, OREO is classified in level 3 of the fair value hierarchy.

Loans Held-for-Sale

As of September 30, 2014, loans held-for-sale consisted of 1-4 family mortgage loans, which were originated with the intent to sell, and one commercial real estate credit relationship, which was transferred to the held-for-sale category at the contract price. Accordingly, these loans are classified in level 3 of the fair value hierarchy. As of December 31, 2013, loans held-for-sale consists of 1-4 family mortgage loans and one commercial real estate loan.

Assets Held-for-Sale

Assets held-for-sale consist of former branches that are no longer in operation, which were transferred into the held-for-sale category at the lower of their fair value as determined by a current appraisal or their recorded investment. Based on these valuation methods, they are classified in level 3 of the fair value hierarchy.

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Financial Instruments Not Required to be Measured at Fair Value

For certain financial instruments that are not required to be measured at fair value in the Consolidated Statements of Financial Condition, the Company must disclose the estimated fair values and the level within the fair value hierarchy as shown in the following table.

Fair Value Measurements of Other Financial Instruments

(Dollar amounts in thousands)

		September 30, 2014				December 31, 2013
	Fair Value Hierarchy Level	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Assets:
Cash and due from banks	1	$	125,977	$	125,977	$	110,417	$	110,417
Interest-bearing deposits in other banks	2	550,606		550,606		476,824		476,824
Securities held-to-maturity	2	26,776		27,766		44,322		43,387
FHLB and Federal Reserve Bank stock	2	35,588		35,588		35,161		35,161
Net loans	3	6,445,973		6,315,474		5,628,855		5,544,146
FDIC indemnification asset	3	8,699		4,659		16,585		7,829
Investment in BOLI	3	195,270		195,270		193,167		193,167
Accrued interest receivable	3	27,375		27,375		25,735		25,735
Other interest earning assets	3	4,399		4,527		6,550		6,809
Liabilities:
Deposits	2	$	7,616,133	$	7,610,119	$	6,766,101	$	6,765,404
Borrowed funds	2	132,877		132,877		224,342		226,839
Senior and subordinated debt	1	191,028		191,769		190,932		201,147
Accrued interest payable	2	5,208		5,208		2,400		2,400

Management uses various methodologies and assumptions to determine the estimated fair values of the financial instruments in the table above. The fair value estimates are made at a discrete point in time based on relevant market information and consider management’s judgments regarding future expected economic conditions, loss experience, and specific risk characteristics of the financial instruments.

Short-Term Financial Assets and Liabilities - For financial instruments with a shorter-term or with no stated maturity, prevailing market rates, and limited credit risk, the carrying amounts approximate fair value. Those financial instruments include cash and due from banks, interest-bearing deposits in other banks, other short-term investments, accrued interest receivable, and accrued interest payable.

Securities Held-to-Maturity - The fair value of securities held-to-maturity is estimated using the present value of expected future cash flows of the remaining maturities of the securities.

FHLB and Federal Reserve Bank Stock - The carrying amounts approximate fair value.

Net Loans - The fair value of loans is estimated using the present value of the expected future cash flows of the remaining maturities of the loans. Prepayment assumptions that consider the Company’s historical experience and current economic and lending conditions were included. The discount rate was based on the LIBOR yield curve with adjustments for liquidity and credit risk. The primary impact of credit risk on the fair value of the loan portfolio was accommodated through the use of the allowance for loan and covered loan losses, which is believed to represent the current fair value of estimated inherent losses in the loan portfolio.

FDIC Indemnification Asset - The fair value of the FDIC indemnification asset is calculated by discounting the expected future cash flows expected to be received from the FDIC. The expected future cash flows are estimated by multiplying anticipated losses on covered loans and covered OREO by the reimbursement rates in the FDIC Agreements.

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Investment in BOLI - The fair value of the investment in BOLI approximates the carrying amount as both are based on each policy's respective cash surrender value ("CSV"), which is the amount the Company would receive from liquidation of these investments. The CSV is derived from monthly reports provided by the managing brokers and is determined using the Company's initial insurance premium and earnings of the underlying assets, offset by management fees.

Other Interest-Earning Assets - The fair value of other interest-earning assets is estimated using the present value of the expected future cash flows of the remaining maturities of the assets.

Deposits - The fair values disclosed for deposits, savings deposits, NOW accounts, and money market deposits are equal to the amount payable on demand at the reporting date (i.e., their carrying amounts). The fair value for fixed-rate time deposits was estimated using the expected future cash flows discounted based on the LIBOR yield curve, plus or minus the spread associated with current pricing.

Borrowed Funds- The fair value of FHLB advances is estimated by discounting the agreements based on maturities using the rates currently offered for FHLB advances of similar remaining maturities adjusted for prepayment penalties that would be incurred if the borrowings were paid off on the measurement date. The carrying amounts of securities sold under agreements to repurchase approximate their fair value due to their short-term nature.

Senior and Subordinated Debt - The fair value of senior and subordinated debt is determined using quoted market prices.

The Company estimated the fair value of lending commitments outstanding to be immaterial based on the following factors: (i) the limited interest rate exposure of the commitments outstanding due to their variable nature, (ii) the short-term nature of the commitment periods, (iii) termination clauses provided in the agreements, and (iv) the market rate of fees charged.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

INTRODUCTION

First Midwest Bancorp, Inc. (the “Company”) is a bank holding company headquartered in the Chicago suburb of Itasca, Illinois with operations throughout the greater Chicago metropolitan area as well as northwest Indiana, central and western Illinois, and eastern Iowa. Our principal subsidiary is First Midwest Bank (the “Bank”), which provides a broad range of commercial and retail banking and wealth management services to consumer, commercial and industrial, commercial real estate, and municipal customers through approximately 100 banking offices. We are committed to meeting the financial needs of the people and businesses in the communities where we live and work by providing customized banking solutions, quality products, and innovative services that fulfill those financial needs.

The following discussion and analysis is intended to address the significant factors affecting our results of operations and financial condition for the quarters and nine months ended September 30, 2014 and 2013. When we use the terms “First Midwest,” the “Company,” “we,” “us,” and “our,” we mean First Midwest Bancorp, Inc., a Delaware Corporation, and its consolidated subsidiaries. When we use the term “Bank,” we are referring to our wholly owned banking subsidiary, First Midwest Bank. Management’s discussion and analysis should be read in conjunction with the consolidated financial statements and accompanying notes presented elsewhere in this report, as well as in our 2013 Annual Report on Form 10-K (“2013 10-K”). The results of operations for the quarter and nine months ended September 30, 2014 are not necessarily indicative of future results.

Our results of operations are affected by various factors, many of which are beyond our control, including interest rates, local and national economic conditions, business spending, consumer confidence, certain seasonal factors, legislative and regulatory changes, and changes in real estate and securities markets. Our management evaluates performance using a variety of qualitative and quantitative metrics. The primary quantitative metrics used by management include:

• Net Interest Income - Net interest income, our primary source of revenue, equals the difference between interest income and fees earned on interest-earning assets and interest expense incurred on interest-bearing liabilities.

• Net Interest Margin - Net interest margin equals net interest income divided by total average interest-earning assets.

• Noninterest Income - Noninterest income is the income we earn from fee-based revenues, investment in bank-owned life insurance ("BOLI") and other income, and non-operating revenues.

• Asset Quality - Asset quality represents an estimation of the quality of our loan portfolio, including an assessment of the credit risk related to existing and potential loss exposure, and can be evaluated using a number of quantitative measures, such as non-performing loans to total loans.

• Regulatory Capital - Our regulatory capital is currently classified in one of the following two tiers: (i) Tier 1 capital consists of common equity, retained earnings, and qualifying trust-preferred securities, less goodwill and most intangible assets and (ii) Tier 2 capital includes qualifying subordinated debt and the allowance for credit losses, subject to limitations.

Unless otherwise stated, all earnings per common share data included in this section and throughout the remainder of this discussion are presented on a diluted basis.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q may contain certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, forward-looking statements can be identified by the use of words such as “may,” “might,” “will,” “would,” “should,” “could,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “probable,” “potential,” “possible,” or “continue” and words of similar import. Forward-looking statements are not historical facts but instead express only management’s beliefs regarding future results or events, many of which, by their nature, are inherently uncertain and outside of management’s control. It is possible that actual results and events may differ, possibly materially, from the anticipated results or events indicated in these forward-looking statements. Forward-looking statements are not guarantees of future performance, and we caution you not to place undue reliance on these statements. Forward-looking statements are made only as of the date of this report, and we undertake no obligation to update any forward-looking statements contained in this report to reflect new information or events or conditions after the date hereof.

Forward-looking statements may be deemed to include, among other things, statements relating to our future financial performance, the performance of our loan or securities portfolio, the expected amount of future credit reserves or charge-offs, corporate strategies or objectives, anticipated trends in our business, regulatory developments, pending acquisition transactions, including estimated synergies, cost savings and financial benefits of pending or consummated transactions, and growth strategies, including possible future acquisitions. These statements are subject to certain risks, uncertainties and assumptions. For a discussion of these risks,

44

uncertainties and assumptions, you should refer to the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this report and in our 2013 10-K, as well as our subsequent filings made with the Securities and Exchange Commission ("SEC"). However, these risks and uncertainties are not exhaustive. Other sections of this report describe additional factors that could adversely impact our business and financial performance.

CRITICAL ACCOUNTING POLICIES

Our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles ("GAAP") and are consistent with predominant practices in the financial services industry. Critical accounting policies are those policies that management believes are the most important to our financial position and results of operations. Application of critical accounting policies requires management to make estimates, assumptions, and judgments based on information available as of the date of the financial statements that affect the amounts reported in the financial statements and accompanying notes. Future changes in information may affect these estimates, assumptions, and judgments, which may affect the amounts reported in the financial statements.

For additional information regarding critical accounting policies, refer to “Summary of Significant Accounting Policies,” presented in Note 1 to the Condensed Consolidated Financial Statements and the section titled “Critical Accounting Policies” in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the Company’s 2013 10-K. There have been no significant changes in the Company’s application of critical accounting policies related to the allowance for credit losses, valuation of securities, and income taxes since December 31, 2013.

NON-GAAP FINANCIAL INFORMATION

The Company's accounting and reporting policies conform to GAAP and general practice within the banking industry. As a supplement to GAAP, the Company provides non-GAAP performance results, which the Company believes are useful because they assist investors in assessing the Company's operating performance. This includes, but is not limited to, earnings per share, excluding acquisition and integration related expenses, tax-equivalent net interest income (including its individual components), the efficiency ratio, tier 1 common capital to risk-weighted assets, tangible common equity to tangible assets, tangible common equity, excluding accumulated other comprehensive loss, to tangible assets, tangible common equity to risk-weighted assets, and return on average tangible common equity. Although intended to enhance investors' understanding of the Company's business and performance, these non-GAAP financial measures should not be considered an alternative to GAAP.

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PERFORMANCE OVERVIEW

Table 1

Selected Financial Data

(Dollar and share amounts in thousands, except per share data)

	Quarters Ended   September 30,						Nine Months Ended   September 30,
	2014			2013			2014			2013
Operating Results
Interest income	$	76,862		$	72,329		$	218,555		$	215,127
Interest expense	5,831			6,663			17,522			20,683
Net interest income	71,031			65,666			201,033			194,444
Provision for loan and covered loan losses	10,727			4,770			17,509			16,257
Noninterest income	37,107			58,088			95,550			113,104
Noninterest expense	70,313			64,702			198,998			191,943
Income before income tax expense	27,098			54,282			80,076			99,348
Income tax expense	8,549			24,959			25,363			39,207
Net income	$	18,549		$	29,323		$	54,713		$	60,141
Weighted-average diluted common shares outstanding	74,352			74,034			74,282			73,978
Diluted earnings per common share	$	0.25		$	0.39		$	0.73		$	0.80
Performance Ratios (1)
Return on average common equity	6.91		%	11.66		%	6.99		%	8.22		%
Return on average tangible common equity (2)	11.73		%	16.33		%	10.58		%	11.58		%
Return on average assets	0.84		%	1.38		%	0.86		%	0.98		%
Net interest margin – tax equivalent	3.72		%	3.63		%	3.66		%	3.70		%
Efficiency ratio (3)	62.02		%	62.70		%	64.00		%	64.46		%

⁽¹⁾  All ratios are presented on an annualized basis.

⁽²⁾  Tangible common equity (“TCE”) represents common stockholders’ equity less goodwill and identifiable intangible assets. Acquisition and integration related expenses of $3.7 million and $4.6 million for the quarter and nine months ended September 30, 2014, respectively, are excluded from the return on average tangible common equity ratio.

⁽³⁾  The efficiency ratio expresses noninterest expense, excluding other real estate owned ("OREO") expense, as a percentage of tax-equivalent net interest income plus total fee-based revenues, other income, net trading (losses) gains, and tax-equivalent adjusted BOLI income. In addition, acquisition and integration related expenses of $3.7 million and $4.6 million are excluded from the efficiency ratio for the quarter and nine months ended September 30, 2014, respectively.

	September 30, 2014			December 31, 2013			September 30, 2013			September 30, 2014   Change From
										December 31, 2013		September 30, 2013
Balance Sheet Highlights
Total assets	$	9,096,351		$	8,253,407		$	8,517,913		$	842,944	$	578,438
Total loans, excluding covered loans	6,428,204			5,580,005			5,448,929			848,199		979,275
Total loans, including covered loans	6,519,079			5,714,360			5,602,234			804,719		916,845
Total deposits	7,616,133			6,766,101			7,003,208			850,032		612,925
Transactional deposits	6,359,686			5,558,318			5,745,047			801,368		614,639
Loans-to-deposits ratio	85.6		%	84.5		%	80.0		%
Transactional deposits to total deposits	83.5		%	82.1		%	82.0		%

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	September 30, 2014			December 31, 2013			September 30, 2013			September 30, 2014   Change From
										December 31, 2013			September 30, 2013
Asset Quality Highlights (1)
Non-accrual loans	$	63,858		$	59,798		$	68,170		$	4,060		$	(4,312	)
90 days or more past due loans   (still accruing interest)	5,983			3,708			5,642			2,275			341
Total non-performing loans	69,841			63,506			73,812			6,335			(3,971		)
Accruing troubled debt   restructurings ("TDRs")	5,449			23,770			24,329			(18,321		)	(18,880		)
OREO	29,165			32,473			35,616			(3,308		)	(6,451		)
Total non-performing assets	$	104,455		$	119,749		$	133,757		$	(15,294	)	$	(29,302	)
30-89 days past due loans   (still accruing interest)	$	13,459		$	20,742		$	15,111		$	(7,283	)	$	(1,652	)
Allowance for Credit Losses
Allowance for credit losses	$	74,722		$	87,121		$	93,214		$	(12,399	)	$	(18,492	)
Allowance for credit losses to loans,   excluding acquired loans,   including covered loans	1.25		%	1.52		%	1.66		%
Allowance for credit losses to   non-accrual loans, excluding   acquired and covered loans	103.47		%	124.69		%	117.59		%

⁽¹⁾  Due to the impact of business combination accounting and protection provided by loss share agreements with the FDIC ("the FDIC Agreements"), acquired loans and covered loans and covered OREO are excluded from these metrics to provide for improved comparability to prior periods and better perspective into asset quality trends. For a discussion of acquired and covered loans, refer to Note 1 and Note 6 of “Notes to Condensed Consolidated Financial Statements” in Part I, Item 1 of this Form 10-Q. Asset quality, including acquired loans, covered loans, and covered OREO, is included in the “Loan Portfolio and Credit Quality” section below.

Net income for the third quarter of 2014 was $18.5 million, or $0.25 per share, compared to $29.3 million, or $0.39 per share, for the third quarter of 2013. For the nine months ended September 30, 2014, net income was $54.7 million, or $0.73 per share, compared to $60.1 million, or $0.80 per share, for the same period in 2013.

The third quarter of 2013 net income was impacted by certain significant transactions, which included a $34.0 million gain on the sale of an equity investment, a $7.8 million gain on the termination of two Federal Home Loan Bank ("FHLB") forward commitments, and a $13.3 million non-deductible write-down of the cash surrender values of certain BOLI policies. Excluding these items, which were reported in noninterest income, net income for the third quarter of 2013 was $17.5 million, or $0.24 per share, compared to $18.5 million, or $0.25 per share, for third quarter of 2014. In addition, net income for the third quarter and nine months ended September 30, 2014 was impacted by acquisition and integration related expenses of $3.7 million and $4.6 million, respectively. A discussion of net interest income, noninterest income, and noninterest expense is presented in the following section titled "Earnings Performance."

Total loans, excluding covered loans, of $6.4 billion rose by $848.2 million from December 31, 2013. Total loans, excluding acquired and covered loans, grew 7.5% annualized from December 31, 2013. The majority of the loan growth was driven by the acquisition of Popular, which represents $533.2 million of loans at September 30, 2014. The loan portfolio also benefited from solid performance from our legacy sales platform concentrated within our commercial and industrial and agricultural loan categories.

Non-performing assets, excluding acquired and covered loans and covered OREO, decreased by $15.3 million, or 12.8%, from December 31, 2013 and $29.3 million, or 21.9% from September 30, 2013. Refer to the “Loan Portfolio and Credit Quality” section below for further discussion of our loan portfolio, non-accrual loans, 90 days past due loans, TDRs, and OREO.

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Acquisitions

On July 7, 2014, the Company entered into a definitive agreement to acquire the south suburban Chicago-based Great Lakes Financial Resources, Inc. ("Great Lakes"), the holding company for Great Lakes Bank, National Association. As part of the acquisition, the Company will acquire eight locations, approximately $490 million in deposits, and $234 million in loans. The Company has received approval for this acquisition from the Federal Reserve, its primary regulator, and the acquisition is expected to close before the end of 2014, subject to approval by the stockholders of Great Lakes and certain closing conditions.

On August 8, 2014, the Bank completed the acquisition of the Chicago area banking operations of Banco Popular North America ("Popular"), doing business as Popular Community Bank, which is a subsidiary of Popular, Inc. The acquisition included Popular's twelve full-service retail banking offices and its small business and middle market commercial lending activities in the Chicago metropolitan area. On the date of acquisition, the Bank assumed $731.9 million in deposits and acquired $549.4 million in loans.

On September 26, 2014, the Bank completed the acquisition of National Machine Tool Financial Corporation ("National Machine Tool"). In business for more than 28 years and a customer of the Bank for more than 15 years, National Machine Tool provides equipment leasing and financing alternatives to traditional bank financing. The addition of equipment leasing to First Midwest's product offerings affords us the opportunity to leverage our sales platform to augment National Machine Tool's historical lease production of approximately $40 million per year.

EARNINGS PERFORMANCE

Net Interest Income

Net interest income is our primary source of revenue and is impacted by interest rates and the volume and mix of interest-earning assets and interest-bearing liabilities. The accounting policies for the recognition of interest income on loans, securities, and other interest-earning assets are presented in Note 1 to the Consolidated Financial Statements of our 2013 10-K.

Our accounting and reporting policies conform to GAAP and general practices within the banking industry. For purposes of this discussion, both net interest income and net interest margin have been adjusted to a fully tax-equivalent basis to more appropriately compare the returns on certain tax-exempt loans and securities to those on taxable interest-earning assets. Although we believe that these non-GAAP financial measures enhance investors’ understanding of our business and performance, they should not be considered an alternative to GAAP. The effect of this adjustment is at the bottom of Tables 2 and 3.

Table 2 summarizes our average interest-earning assets and interest-bearing liabilities for the quarters ended September 30, 2014and 2013, the related interest income and interest expense for each earning asset category and funding source, and the average interest rates earned and paid. Table 2 also details differences in interest income and expense from the prior quarter and the extent to which any changes are attributable to volume and rate fluctuations. Table 3 presents this same information for the nine months ended September 30, 2014 and 2013.

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Table 2

Net Interest Income and Margin Analysis

(Dollar amounts in thousands)

	Quarters Ended September 30,												Attribution of Change in Net Interest Income (1)
	2014						2013
	Average Balance			Interest		Yield/ Rate (%)	Average Balance			Interest		Yield/ Rate (%)	Volume			Yield/ Rate			Total
Assets:
Other interest-earning assets	$	476,768		$	313	0.26	$	661,779		$	469	0.28	$	(74	)	$	(82	)	$	(156	)
Trading securities	18,363			30		0.65	15,543			29		0.75	4			(3		)	1
Investment securities (2)	1,067,742			9,659		3.62	1,250,158			10,199		3.26	(2,126		)	1,586			(540		)
FHLB and Federal Reserve   Bank stock	35,588			341		3.83	35,162			333		3.79	4			4			8
Loans (2)(3)	6,302,883			69,458		4.37	5,559,932			64,326		4.59	6,708			(1,576		)	5,132
Total interest-earning assets (2)	7,901,344			79,801		4.01	7,522,574			75,356		3.98	4,516			(71		)	4,445
Cash and due from banks	126,279						127,847
Allowance for loan and   covered loan losses	(77,596		)				(93,940		)
Other assets	818,066						847,304
Total assets	$	8,768,093					$	8,403,785
Liabilities and Stockholders’ Equity:
Savings deposits	$	1,231,700		231		0.07	$	1,127,970		192		0.07	39			—			39
NOW accounts	1,261,522			166		0.05	1,175,926			162		0.05	4			—			4
Money market deposits	1,413,753			468		0.13	1,343,263			411		0.12	22			35			57
Time deposits	1,226,025			1,941		0.63	1,288,746			2,072		0.64	(99		)	(32		)	(131		)
Borrowed funds	101,674			9		0.04	203,613			390		0.76	(190		)	(191		)	(381		)
Senior and subordinated debt	191,013			3,016		6.26	214,860			3,436		6.34	(377		)	(43		)	(420		)
Total interest-bearing   liabilities	5,425,687			5,831		0.43	5,354,378			6,663		0.49	(601		)	(231		)	(832		)
Demand deposits	2,208,450						1,975,797
Other liabilities	83,075						90,154
Stockholders’ equity - common	1,050,881						983,456
Total liabilities and   stockholders’ equity	$	8,768,093					$	8,403,785
Net interest income/margin (2)				$	73,970	3.72				$	68,693	3.63	$	5,117		$	160		$	5,277
Net interest income (GAAP)				$	71,031					$	65,666
Tax equivalent adjustment				2,939						3,027
Tax-equivalent net interest   income				$	73,970					$	68,693

⁽¹⁾  For purposes of this table, changes which are not due solely to volume changes or rate changes are allocated to these categories on the basis of the percentage relationship of each to the sum of the two.

⁽²⁾  Interest income and yields are presented on a tax-equivalent basis, assuming a federal income tax rate of 35%.

⁽³⁾  This item includes covered interest-earning assets consisting of loans acquired through the Company’s Federal Deposit Insurance Corporation (“FDIC”)-assisted transactions with loss share agreements and the related FDIC indemnification asset. For additional discussion, please refer to Note 1 and Note 6 of “Notes to the Condensed Consolidated Financial Statements” in Part I, Item 1 of this Form 10-Q.

49

Table 3

Net Interest Income and Margin Analysis

(Dollar amounts in thousands)

	Nine Months Ended September 30,												Attribution of Change in Net Interest Income (1)
	2014						2013
	Average Balance			Interest		Yield/ Rate (%)	Average Balance			Interest		Yield/ Rate (%)	Volume			Yield/ Rate			Total
Assets:
Other interest-earning assets	$	515,380		$	1,064	0.28	$	640,551		$	1,371	0.29	$	(165	)	$	(142	)	$	(307	)
Trading securities	17,919			86		0.64	15,174			89		0.78	16			(19		)	(3		)
Investment securities (2)	1,115,882			30,317		3.62	1,227,619			30,303		3.29	(132		)	146			14
FHLB and Federal Reserve   Bank stock	35,424			1,024		3.85	41,086			1,014		3.29	(41		)	51			10
Loans (2)(3)	5,978,223			194,878		4.36	5,439,308			191,605		4.71	30,628			(27,355		)	3,273
Total interest-earning assets (2)	7,662,828			227,369		3.97	7,363,738			224,382		4.07	30,306			(27,319		)	2,987
Cash and due from banks	118,350						121,037
Allowance for loan and   covered loan losses	(81,098		)				(96,991		)
Other assets	790,782						858,347
Total assets	$	8,490,862					$	8,246,131
Liabilities and Stockholders’ Equity:
Savings deposits	$	1,193,952		636		0.07	$	1,126,501		647		0.08	54			(65		)	(11		)
NOW accounts	1,213,471			488		0.05	1,162,657			505		0.06	25			(42		)	(17		)
Money market deposits	1,353,857			1,253		0.12	1,289,857			1,315		0.14	72			(134		)	(62		)
Time deposits	1,197,232			5,537		0.62	1,331,277			6,693		0.67	(644		)	(512		)	(1,156		)
Borrowed funds	162,481			561		0.46	202,664			1,217		0.80	(534		)	(122		)	(656		)
Senior and subordinated debt	190,981			9,047		6.33	214,829			10,306		6.41	(1,131		)	(128		)	(1,259		)
Total interest-bearing   liabilities	5,311,974			17,522		0.44	5,327,785			20,683		0.52	(2,158		)	(1,003		)	(3,161		)
Demand deposits	2,069,866						1,866,560
Other liabilities	75,268						87,651
Stockholders’ equity - common	1,033,754						964,135
Total liabilities and   stockholders’ equity	$	8,490,862					$	8,246,131
Net interest income/margin (2)				$	209,847	3.66				$	203,699	3.70	$	32,464		$	(26,316	)	$	6,148
Net interest income (GAAP)				$	201,033					$	194,444
Tax equivalent adjustment				8,814						9,255
Tax-equivalent net interest   income				$	209,847					$	203,699

⁽¹⁾  For purposes of this table, changes which are not due solely to volume changes or rate changes are allocated to these categories on the basis of the percentage relationship of each to the sum of the two.

⁽²⁾  Interest income and yields are presented on a tax-equivalent basis, assuming a federal income tax rate of 35%.

⁽³⁾  This item includes covered interest-earning assets consisting of loans acquired through the Company’s FDIC-assisted transactions with loss share agreements and the related FDIC indemnification asset. For additional discussion, please refer to Note 1 and Note 6 of “Notes to the Condensed Consolidated Financial Statements” in Part I, Item 1 of this Form 10-Q.

Total average interest-earning assets for the third quarter of 2014 increased by $378.8 million from the third quarter of 2013 and $299.1 million for the first nine months of 2014 compared to the same period in 2013. The increase compared to both prior periods was driven by loans acquired in the Popular acquisition and organic loan growth.

The $71.3 million increase in average interest-bearing liabilities compared to the third quarter of 2013 resulted primarily from the Popular acquisition. Compared to the first nine months of 2013, average interest-bearing liabilities decreased $15.8 million primarily

50

due to lower levels of time deposits, the repurchase and retirement of $24.0 million of junior subordinated debentures with a rate of 6.95%, and the prepayment of $114.6 million of FHLB advances with a weighted-average rate of 1.08%, which is net of the yield earned on the cash used for the prepayment. These declines were substantially offset by $731.9 million of deposits assumed in the Popular acquisition.

Tax-equivalent net interest margin for the third quarter of 2014 was 3.72%, an increase of 9 basis points from the third quarter of 2013. The Popular acquisition contributed approximately half of the improvement, adding a greater proportion of higher yielding, fixed rate loans along with low cost deposits. In addition, certain loan hedging strategies and an increase in the yield on covered interest-earning assets drove the higher margin.

For the nine months ended September 30, 2014, tax-equivalent net interest margin was 3.66%, a decline of 4 basis points from the same period in 2013. The decrease in the yield on loans was driven by the flattening of the yield curve, the competitive market environment, and a continued shift in the loan mix to floating rate loans. This decline was partially offset by higher yielding, fixed rate loans acquired in the Popular transaction, certain loan hedging strategies, and an increase in the yield on covered interest-earning assets. Overall, the reduction in net interest margin was partially offset by higher yields on investment securities, a reduction in higher cost borrowed funds, and growth in core deposits.

Higher tax-equivalent net interest income of $5.3 million compared to the third quarter of 2013 and $6.1 million compared to the first nine months of 2013 was primarily due to the Popular acquisition, which contributed $3.5 million of the increase. In addition, continued organic loan growth, the prepayment of FHLB advances, and repurchase and retirement of junior subordinated debentures contributed to the positive variance.

51

Noninterest Income

A summary of noninterest income for the quarters and nine months ended September 30, 2014 and 2013 is presented in the following table.

Table 4

Noninterest Income Analysis

(Dollar amounts in thousands)

	Quarters Ended   September 30,								Nine Months Ended   September 30,
	2014			2013			% Change		2014			2013			% Change
Service charges on deposit accounts	$	9,902		$	9,472		4.5		$	26,895		$	27,267		(1.4	)
Wealth management fees	6,721			6,018			11.7		19,730			17,983			9.7
Card-based fees (1)	6,646			5,509			20.6		17,950			16,132			11.3
Merchant servicing fees (2)	2,932			2,915			0.6		8,557			8,368			2.3
Mortgage banking income	1,125			1,273			(11.6	)	3,199			4,251			(24.7	)
Other service charges, commissions,   and fees (2)	2,334			2,617			(10.8	)	5,386			5,569			(3.3	)
Total fee-based revenues	29,660			27,804			6.7		81,717			79,570			2.7
Gains on sales of properties	3,954			—			100.0		3,954			—			100.0
Net securities gains	2,570			33,801			(92.4	)	8,160			34,017			(76.0	)
BOLI income (3)	767			284			N/M		2,030			884			N/M
Other income (4)(6)	512			800			(36.0	)	1,382			1,984			(30.3	)
Net trading (losses) gains (5)(6)	(356		)	882			N/M		366			2,132			(82.8	)
Loss on early extinguishment of debt	—			—			—		(2,059		)	—			(100.0	)
BOLI modification loss (3)	—			(13,312		)	100.0		—			(13,312		)	100.0
Gain on termination of FHLB forward   commitments	—			7,829			(100.0	)	—			7,829			(100.0	)
Total noninterest income	$	37,107		$	58,088		(36.1	)	$	95,550		$	113,104		(15.5	)

N/M - Not meaningful.

⁽¹⁾  Card-based fees consist of debit and credit card interchange fees for processing transactions as well as various fees on both customer and non-customer automated teller machine (“ATM”) and point-of-sale transactions processed through the ATM and point-of-sale networks.

⁽²⁾  These line items are included in other service charges, commissions, and fees in the Condensed Consolidated Statements of Income.

⁽³⁾  These line items are included in BOLI income in the Condensed Consolidated Statements of Income.

⁽⁴⁾  Other income consists of various items, including safe deposit box rentals, miscellaneous recoveries, and gains on the sales of various assets.

⁽⁵⁾  Net trading (losses) gains result from changes in the fair value of diversified investment securities held in a grantor trust under deferred compensation arrangements and are substantially offset by nonqualified plan expense for each period presented.

⁽⁶⁾  These line items are included in other income in the Condensed Consolidated Statements of Income.

Total fee-based revenues continue to be strong and grew to $29.7 million, an increase of 6.7% compared to the third quarter of 2013 and 2.7% from the first nine months of 2013.

Compared to the third quarter of 2013, service charges on deposit accounts were impacted by an increase in service charge volume from existing clients and new customers acquired in the Popular transaction. A lower volume of non-sufficient funds transactions contributed to the decrease in service charges on deposit accounts compared to the nine months ended September 30, 2013.

Wealth management fees increased 11.7% from the third quarter of 2013 and 9.7% from the first nine months of 2013 due to a 10.9% rise in assets under management driven by new customer relationships across all service offerings.

The growth in card-based fees compared to both prior periods reflects higher transaction volumes as well as incentives from a renewed vendor contract.

52

During the third quarter and first nine months of 2014, we sold $31.7 million and $114.7 million of 1-4 family mortgage loans, respectively, compared to $36.1 million and $118.1 million of loans sold during the same periods in 2013. Lower market pricing contributed to the decline in mortgage banking income compared to the third quarter of 2013.

Lower levels of fee income from sales of capital market products to commercial clients contributed to the decrease in other service charges, commissions, and fees compared to the quarter and nine months ended September 30, 2013.

In the third quarter of 2014, we completed the disposition of two branch properties at pre-tax gains of $4.0 million as part of multi-year efforts to optimize our retail distribution.

Net securities gains for the third quarter of 2014 were driven by the sale of longer-duration corporate bonds and other investments, resulting in pre-tax gains of $2.6 million. Net securities gains for the first nine months of 2014 also consisted of the sale of a non-accrual trust-preferred collateralized debt obligation ("CDO") at a pre-tax gain of $3.5 million and sales of municipal securities and other investments at pre-tax gains of $2.1 million.

During the first nine months of 2014, the loss on early extinguishment of debt resulted from the prepayment of $114.6 million in FHLB advances.

Total noninterest income was impacted by certain significant transactions during the third quarter of 2013, including a $34.0 million gain on the sale of an equity investment, a $7.8 million gain on the termination of two FHLB forward commitments, and a $13.3 million write-down of the cash surrender values of certain BOLI policies.

53

Noninterest Expense

A summary of noninterest expense for the quarters and nine months ended September 30, 2014 and 2013 is presented in the following table.

Table 5

Noninterest Expense Analysis

(Dollar amounts in thousands)

	Quarters Ended   September 30,								Nine Months Ended   September 30,
	2014			2013			% Change		2014			2013			% Change
Salaries and employee benefits:
Salaries and wages	$	28,972		$	27,254		6.3		$	84,022		$	81,646		2.9
Nonqualified plan expense (1)	(386		)	1,003			N/M		350			2,394			(85.4	)
Retirement and other employee benefits	7,347			6,013			22.2		19,613			19,720			(0.5	)
Total salaries and employee benefits	35,933			34,270			4.9		103,985			103,760			0.2
Net occupancy and equipment expense	8,702			7,982			9.0		25,765			23,922			7.7
Professional services:
Loan remediation costs	2,107			1,893			11.3		6,336			6,579			(3.7	)
Other professional services	4,991			3,624			37.7		12,668			9,751			29.9
Professional services	7,098			5,517			28.7		19,004			16,330			16.4
Technology and related costs	4,316			2,984			44.6		10,494			8,351			25.7
Net OREO expense (2)	1,406			2,849			(50.6	)	4,531			5,732			(21.0	)
Advertising and promotions (2)	1,858			2,166			(14.2	)	5,778			5,609			3.0
Merchant card expense (2)	2,396			2,339			2.4		6,992			6,704			4.3
Cardholder expenses (2)	1,120			1,031			8.6		3,215			3,003			7.1
Other expenses (2)	7,484			5,564			34.5		19,234			18,532			3.8
Total noninterest expense	$	70,313		$	64,702		8.7		$	198,998		$	191,943		3.7
Efficiency ratio (3)	62.02		%	62.70		%			64.00		%	64.46		%

N/M - Not meaningful.

⁽¹⁾  Nonqualified plan expense results from changes in the Company's obligation to participants under deferred compensation agreements and is substantially offset by earnings on related assets, which are reported as net trading (losses) gains and included in noninterest income.

⁽²⁾  These line items are included in other expense in the Condensed Consolidated Statements of Income.

⁽³⁾  The efficiency ratio expresses noninterest expense, excluding OREO expense, as a percentage of tax-equivalent net interest income plus total fee-based revenues, other income, net trading (losses) gains, and tax-equivalent adjusted BOLI income. In addition, acquisition and integration related expenses of $3.7 million and $4.6 million are excluded from the efficiency ratio for the quarter and nine months ended September 30, 2014, respectively.

The efficiency ratio, excluding acquisition and integration related expenses, improved to 62.02% for the third quarter of 2014 and 64.00% for the first nine months of 2014. Total noninterest expense for the third quarter of 2014 increased 8.7% from the third quarter of 2013 and 3.7% for the first nine months of 2014 compared to the same periods in 2013. The rise in total noninterest expense compared to both prior periods resulted primarily from acquisition and integration related expenses, totaling $3.7 million for the third quarter of 2014 and $4.6 million for the nine months ended September 30, 2014. In addition, the recurring costs associated with operating the newly acquired Popular locations contributed to the increase. During the third quarter of 2014, the Company also recorded a $430,000 valuation adjustment relative to the closing of a banking facility.

Compared to both prior periods presented, the increase in salaries and employee benefits resulted from additional employees assumed in the Popular acquisition during the third quarter of 2014. The timing of certain incentive compensation accruals and higher premiums paid for employee insurance also contributed to the variance compared to the third quarter of 2013.

Net occupancy and equipment expense increased for the third quarter of 2014 and nine months ended September 30, 2014 due to the acquisition of twelve branches in the Popular transaction and an increase in real estate taxes. Additionally, higher utilities and snow removal costs during the first quarter of 2014 impacted the comparison to the first nine months of 2013.

54

The rise in loan remediation costs compared to the third quarter of 2013 resulted from higher levels of real estate taxes paid to preserve the Company's rights to collateral associated with problem loans and an increase in appraisal costs for underlying collateral. Compared to the first nine months of 2013, loan remediation costs decreased due to lower servicing costs for our covered loan portfolio and a reduction in real estate taxes paid, which was partially offset by higher appraisal costs.

Other professional services expense increased compared to the third quarter and first nine months of 2013. These increases were driven primarily by legal expenses related to acquisition activity which totaled $1.4 million for the third quarter of 2014 and $2.2 million for the first nine months of 2014.

Higher levels of technology and related costs compared to both prior periods presented resulted mainly from conversion costs related to acquisition activity, which totaled $1.1 million for the quarter and nine months ended September 30, 2014.

Compared to both prior periods presented, the decrease in net OREO expense resulted primarily from net gains on sales of OREO properties compared to net losses on sales, as well as lower levels of operating expenses. Higher levels of valuation adjustments partially offset these declines.

Advertising and promotions expense declined compared to the third quarter of 2013 due to the timing of certain advertising costs.

Higher levels of other expenses in the third quarter and first nine months of 2014 resulted from a $430,000 valuation adjustment relative to the closing of a banking facility and miscellaneous expenses related to the Popular acquisition.

Income Taxes

Our provision for income taxes includes both federal and state income tax expense. An analysis of the provision for income taxes is detailed in the following table.

Table 6

Income Tax Expense Analysis

(Dollar amounts in thousands)

	Quarters Ended   September 30,						Nine Months Ended   September 30,
	2014			2013			2014			2013
Income before income tax expense	$	27,098		$	54,282		$	80,076		$	99,348
Income tax expense:
Federal income tax expense	$	6,714		$	19,145		$	19,719		$	29,058
State income tax expense	1,835			5,814			5,644			10,149
Total income tax expense	$	8,549		$	24,959		$	25,363		$	39,207
Effective income tax rate	31.5		%	46.0		%	31.7		%	39.5		%

Federal income tax expense and the related effective income tax rate are influenced by the amount of tax-exempt income derived from investment securities and BOLI in relation to pre-tax income and state income taxes. State income tax expense and the related effective tax rate are driven by the amount of state tax-exempt income in relation to pre-tax income and state tax rules related to consolidated/combined reporting and sourcing of income and expense.

Effective tax rates were elevated for the quarter and nine months ended September 30, 2013 due to a $34.0 million gain recognized on the sale of an equity investment and a $7.8 million gain on the termination of two FHLB forward commitments, which was taxed at statutory rates, and a $13.3 million non-deductible BOLI modification loss. Excluding these transactions, the effective tax rate for the quarter and nine months ended September 30, 2013 would have been 30.5% and 31.2%, respectively. In addition, an increase in income exempt from state taxes contributed to the decrease in the effective income tax rate compared to both prior periods.

Our accounting policies for the recognition of income taxes in the Consolidated Statements of Financial Condition and Income are included in Notes 1 and 14 to the Consolidated Financial Statements of our 2013 10-K.

55

FINANCIAL CONDITION

Investment Portfolio Management

Securities that we have the positive intent and ability to hold until maturity are classified as securities held-to-maturity and are accounted for using historical cost, adjusted for amortization of premiums and accretion of discounts. Trading securities are carried at fair value with changes in fair value included in other noninterest income. Our trading securities consist of securities held in a grantor trust for our nonqualified deferred compensation plan and are not considered part of the traditional investment portfolio. All other securities are classified as securities available-for-sale and are carried at fair value with unrealized gains and losses, net of related deferred income taxes, recorded in stockholders’ equity as a separate component of accumulated other comprehensive loss.

We manage our investment portfolio to maximize the return on invested funds within acceptable risk guidelines, to meet pledging and liquidity requirements, and to adjust balance sheet interest rate sensitivity to mitigate the impact of changes in interest rates on net interest income.

From time to time, we adjust the size and composition of our securities portfolio based on a number of factors, including expected loan growth, anticipated changes in collateralized public funds on account, the interest rate environment, and the related value of various segments of the securities markets. The following table provides a valuation summary of our investment portfolio.

Table 7

Investment Portfolio Valuation Summary

(Dollar amounts in thousands)

	September 30, 2014								December 31, 2013
	Amortized Cost		Net Unrealized Gains (Losses)			Fair Value		% of Total	Amortized Cost		Net Unrealized Gains (Losses)			Fair Value		% of Total
Securities Available-for-Sale
U.S. agency securities	$	500	$	—		$	500	—	$	500	$	—		$	500	—
Collateralized mortgage   obligations ("CMOs")	424,946		(8,399		)	416,547		40.6	490,962		(15,194		)	475,768		41.2
Other mortgage-backed   securities ("MBSs")	117,271		3,218			120,489		11.8	135,097		1,067			136,164		11.8
Municipal securities	423,904		11,168			435,072		42.4	457,318		4,075			461,393		39.9
CDOs	45,021		(26,652		)	18,369		1.8	46,532		(28,223		)	18,309		1.6
Corporate debt   securities	3,724		122			3,846		0.4	12,999		1,930			14,929		1.3
Equity securities	2,575		22			2,597		0.3	3,706		1,956			5,662		0.5
Total available-for-   sale securities	1,017,941		(20,521		)	997,420		97.3	1,147,114		(34,389		)	1,112,725		96.3
Securities Held-to-Maturity
Municipal securities	26,776		990			27,766		2.7	44,322		(935		)	43,387		3.7
Total securities	$	1,044,717	$	(19,531	)	$	1,025,186	100.0	$	1,191,436	$	(35,324	)	$	1,156,112	100.0

Portfolio Composition

As of September 30, 2014, our securities portfolio totaled $1.0 billion, decreasing 11.3% compared to December 31, 2013. The reduction in CMOs, MBSs, and municipal securities from December 31, 2013 resulted from sales of $24.9 million and maturities, calls, and prepayments of $125.2 million, which were slightly offset by purchases of $16.4 million. Refer to the "Securities Gains and Losses" section below for further detail.

Approximately 97.5% of our available-for-sale securities portfolio is comprised of U.S. agency securities, CMOs, other MBSs, and municipal securities. The remainder of the portfolio consists of five CDOs with a total fair value of $18.4 million and miscellaneous other securities with fair values of $6.4 million.

56

Investments in municipal securities comprised 43.6%, or $435.1 million, of the total available-for-sale securities portfolio at September 30, 2014. The majority consists of general obligations of local municipalities. Our municipal securities portfolio has historically experienced very low default rates and provides a predictable cash flow.

Table 8

Securities Effective Duration Analysis

(Dollar amounts in thousands)

	September 30, 2014					December 31, 2013
	Effective		Average	Yield to		Effective		Average	Yield to
	Duration (1)		Life (2)	Maturity (3)		Duration (1)		Life (2)	Maturity (3)
Securities Available-for-Sale
U.S. agency securities	1.49	%	1.50	0.49	%	2.23	%	2.25	0.49	%
CMOs	3.92	%	3.95	1.87	%	4.48	%	4.26	1.86	%
Other MBSs	3.20	%	4.42	3.00	%	3.93	%	4.85	2.45	%
Municipal securities	3.31	%	2.57	5.52	%	5.11	%	3.27	5.53	%
CDOs	N/M		N/M	N/M		N/M		N/M	N/M
Corporate debt securities	0.43	%	0.48	4.59	%	4.86	%	7.18	6.39	%
Equity securities	N/M		N/M	N/M		N/M		N/M	N/M
Total available-for-sale securities	3.55	%	3.39	3.61	%	4.68	%	3.95	3.52	%
Securities Held-to-Maturity
Municipal securities	5.43	%	8.05	4.48	%	6.50	%	11.84	5.47	%
Total securities	3.60	%	3.52	3.63	%	4.75	%	4.26	3.60	%

N/M - Not meaningful.

⁽¹⁾  The effective duration represents the estimated percentage change in the fair value of the securities portfolio given a 100 basis point increase or decrease in interest rates. This measure is used to evaluate the portfolio’s price volatility at a single point in time and is not intended to be a precise predictor of future fair values since those values will be influenced by a number of factors.

⁽²⁾  Average life is presented in years and represents the weighted-average time to receive half of all future cash flows using the dollar amount of principal paydowns, including estimated principal prepayments, as the weighting factor.

⁽³⁾  Yields on municipal securities are reflected on a tax-equivalent basis, assuming a federal income tax rate of 35%.

Effective Duration

The average life and effective duration of our available-for-sale securities portfolio as of September 30, 2014 declined from December 31, 2013 since cash from maturities and sales of investment securities was not reinvested in the securities portfolio.

Securities Gains and Losses

Net securities gains for the third quarter and first nine months of 2014 were $2.6 million and $8.2 million, respectively. During the third quarter of 2014, we sold certain longer-duration corporate bonds with a carrying value of $9.3 million at gains of $2.0 million and certain other investments, which resulted in gains of $552,000. Net securities gains for the first nine months of 2014 also consisted of the sale of a non-accrual CDO at a gain of $3.5 million, sales of municipal securities at gains of $468,000, and the sale of other investments at a gain of $1.6 million.

Net securities gains for the third quarter and first nine months of 2013 were $33.8 million and $34.0 million, respectively, which resulted primarily from the sale of an equity investment. Net securities gains for the third quarter of 2013 include other-than-temporary securities impairment ("OTTI") charges of $404,000 on four municipal securities.

57

Unrealized Gains and Losses

Unrealized gains and losses on securities available-for-sale represent the difference between the aggregate cost and fair value of the portfolio. These amounts are presented in the Consolidated Statements of Comprehensive Income and reported as a separate component of stockholders’ equity in accumulated other comprehensive loss on an after-tax basis. This balance sheet component will fluctuate as current market interest rates and conditions change and affect the aggregate fair value of the portfolio. Net unrealized losses were $20.5 million at September 30, 2014 compared to $34.4 million at December 31, 2013.

Net unrealized losses in the CMO portfolio totaled $8.4 million at September 30, 2014 compared to $15.2 million at December 31, 2013. CMOs are either backed by U.S. government-owned agencies or issued by U.S. government-sponsored enterprises. We do not believe any individual unrealized loss on this type of security as of September 30, 2014 represents OTTI since the unrealized losses are not believed to be attributed to credit quality.

As of September 30, 2014, net unrealized gains in the municipal securities portfolio totaled $11.2 million compared to $4.1 million as of December 31, 2013. Net unrealized gains on municipal securities include unrealized losses of $1.3 million at September 30, 2014. Substantially all of these securities carry investment grade ratings, with the majority supported by the general revenues of the issuing governmental entity, and are supported by third party bond insurance or other types of credit enhancement. We do not believe the unrealized loss on any of these securities represents OTTI.

Our investments in CDOs are supported by the credit of the underlying banks and insurance companies. The unrealized losses on these securities declined from $28.2 million at December 31, 2013 to $26.7 million at September 30, 2014. We do not believe the unrealized losses on the CDOs as of September 30, 2014 represent OTTI related to credit deterioration. In addition, we do not intend to sell the CDOs with unrealized losses within a short period of time, and we do not believe it is more likely than not that we will be required to sell them before recovery of their amortized cost basis, which may be at maturity. Our estimation of fair values for the CDOs is based on discounted cash flow analyses as described in Note 12 of “Notes to the Condensed Consolidated Financial Statements,” in Part I, Item 1 of this Form 10-Q.

LOAN PORTFOLIO AND CREDIT QUALITY

Loans Held-for-Investment

Our loan portfolio is comprised of both corporate and consumer loans with corporate loans representing 87.2% of total loans, excluding covered loans, at September 30, 2014. Consistent with our emphasis on relationship banking, the majority of our corporate loans are made to our core, multi-relationship customers. The customers usually maintain deposit relationships and utilize our other banking services, such as cash management or wealth management services.

To maximize loan income within an acceptable level of risk, we have certain lending policies and procedures that management reviews on a regular basis. In addition, management receives periodic reporting related to loan production, loan quality, credit concentrations, loan delinquencies, and non-performing and performing potential problem loans to mitigate and monitor potential and current risks in the portfolio. We do not offer any sub-prime products and we have policies to limit our exposure to any single borrower.

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Table 9

Loan Portfolio

(Dollar amounts in thousands)

	September 30, 2014
	Legacy		Acquired (1)		Total		% of Total	December 31, 2013		% of Total	% Change
Commercial and industrial	$	2,131,464	$	76,702	$	2,208,166	34.3	$	1,830,638	32.8	20.6
Agricultural	347,391		120		347,511		5.4	321,702		5.8	8.0
Commercial real estate:
Office	404,870		32,352		437,222		6.8	459,202		8.2	(4.8	)
Retail	383,209		70,969		454,178		7.1	392,576		7.0	15.7
Industrial	486,723		44,399		531,122		8.3	501,907		9.0	5.8
Multi-family	360,330		199,359		559,689		8.7	332,873		6.0	68.1
Construction	193,445		—		193,445		3.0	186,197		3.3	3.9
Other commercial   real estate	790,383		81,442		871,825		13.6	807,071		14.5	8.0
Total commercial   real estate	2,618,960		428,521		3,047,481		47.5	2,679,826		48.0	13.7
Total corporate loans	5,097,815		505,343		5,603,158		87.2	4,832,166		86.6	16.0
Home equity	494,975		22,471		517,446		8.0	427,020		7.7	21.2
1-4 family mortgages	238,172		—		238,172		3.7	275,992		4.9	(13.7	)
Installment	64,024		5,404		69,428		1.1	44,827		0.8	54.9
Total consumer loans	797,171		27,875		825,046		12.8	747,839		13.4	10.3
Total loans, excluding   covered loans	5,894,986		533,218		6,428,204		100.0	5,580,005		100.0	15.2
Covered loans	90,875		—		90,875			134,355			(32.4	)
Total loans	$	5,985,861	$	533,218	$	6,519,079		$	5,714,360		14.1

⁽¹⁾  Acquired loans consist of loans that were acquired in the Popular business combination that are recorded at fair value as of the acquisition date.

Total loans, excluding covered loans, of $6.4 billion rose by $848.2 million from December 31, 2013. Total loans, excluding acquired and covered loans, grew 7.5% annualized from December 31, 2013.

The majority of the loan growth was related to the Popular acquisition, which added $533.2 million of loans at September 30, 2014, and well-balanced growth across the majority of categories. In addition, solid performance from our legacy sales platform concentrated within our commercial and industrial and agricultural loan categories reflects the impact of greater resource investments and expansion into certain sector-based lending areas, such as agri-business, asset-based lending, and healthcare.

During the nine months ended September 30, 2014, total consumer loans grew 10.3% from December 31, 2013. The 1-4 family mortgage portfolio reflects the sale of $114.7 million of 1-4 family mortgage loans. Compared to December 31, 2013, the 21.2% increase in the home equity portfolio was impacted by organic growth, the purchase of $48.7 million of high quality, shorter-duration, floating rate loans, and $22.5 million of loans acquired in the Popular acquisition.

Commercial, Industrial, and Agricultural Loans

Commercial, industrial, and agricultural loans represent 39.7% of total loans, excluding covered loans, and totaled $2.6 billion at September 30, 2014, an increase of $403.3 million, or 18.7% from December 31, 2013. Loans acquired in the Popular transaction during the third quarter of 2014 contributed $76.8 million, or 3.6%, of this growth. Our commercial and industrial loans are a diverse group of loans to community-based and middle market businesses generally located in the Chicago metropolitan area with purposes that range from supporting seasonal working capital needs to term financing of equipment. The underwriting for these loans is based primarily on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. Most commercial and industrial loans are secured by the assets being financed or other business assets, such as accounts receivable or inventory, and may incorporate a personal guarantee.

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Agricultural loans are generally provided to meet seasonal production, equipment, and farm real estate borrowing needs of individual and corporate crop and livestock producers. As part of the underwriting process, the Company examines projected future cash flows, financial statement stability, and the value of the underlying collateral. Seasonal crop production loans are repaid by the liquidation of the financed crop that is typically covered by crop insurance. Equipment and real estate term loans are repaid through cash flows of the farming operation.

Commercial Real Estate Loans

Commercial real estate loans represent 47.5% of total loans, excluding covered loans, and totaled $3.0 billion at September 30, 2014 an increase of $367.7 million, or 13.7% from December 31, 2013. Overall, growth was driven by loans acquired in the Popular transaction, which totaled $428.5 million at September 30, 2014. This growth was partially offset by declines in the office, retail, and industrial and other commercial real estate portfolios. Commercial real estate loans are subject to underwriting standards and processes similar to commercial and industrial loans. The repayment of commercial real estate loans depends on the successful operation of the property securing the loan or the business conducted on the property securing the loan. This category of loans may be more adversely affected by conditions in the real estate market. Management monitors and evaluates commercial real estate loans based on cash flow, collateral, geography, and risk rating criteria. The mix of properties securing the loans in our commercial real estate portfolio are balanced between owner-occupied and investor categories and represent varying types across our market footprint.

Construction loans are generally based on estimates of costs and values associated with the completed projects and are underwritten utilizing feasibility studies, independent appraisal reviews, sensitivity analyses of absorption and lease rates, and financial analyses of the developers and property owners. Sources of repayment may be permanent loans from long-term lenders, sales of developed property, or an interim loan commitment until permanent financing is obtained. Generally, construction loans have a higher risk profile than other real estate loans since repayment is impacted by real estate values, interest rate changes, governmental regulation of real property, demand and supply of alternative real estate, the availability of long-term financing, and changes in general economic conditions.

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The following table presents commercial real estate loan detail.

Table 10

Commercial Real Estate Loans

(Dollar amounts in thousands)

	September 30, 2014			% of Total	December 31, 2013			% of Total
Office, retail, and industrial:
Office	$	437,222		14.4	$	459,202		17.1
Retail	454,178			14.9	392,576			14.7
Industrial	531,122			17.4	501,907			18.7
Total office, retail, and industrial	1,422,522			46.7	1,353,685			50.5
Multi-family	559,689			18.4	332,873			12.4
Construction	193,445			6.3	186,197			7.0
Other commercial real estate
Rental properties	121,573			4.0	112,887			4.2
Service stations and truck stops	71,100			2.3	83,237			3.1
Warehouses and storage	131,416			4.3	122,325			4.6
Hotels	53,187			1.7	62,451			2.3
Restaurants	76,459			2.5	79,809			3.0
Automobile dealers	33,901			1.1	37,504			1.4
Recreational	47,729			1.6	56,327			2.1
Religious	35,519			1.2	32,614			1.2
Multi-use properties	204,993			6.7	118,351			4.4
Other	95,948			3.2	101,566			3.8
Total other commercial real estate	871,825			28.6	807,071			30.1
Total commercial real estate	$	3,047,481		100.0	$	2,679,826		100.0
Owner-occupied commercial real estate loans,   excluding multi-family and construction loans	$	961,962			$	933,151
Owner-occupied as a percent of total,   excluding multi-family and construction loans	41.9		%		43.2		%

Consumer Loans

Consumer loans represent 12.8% of total loans, excluding covered loans, and totaled $825.0 million at September 30, 2014, an increase of $77.2 million, or 10.3% from December 31, 2013. Loans acquired in the Popular transaction during the third quarter of 2014 contributed $27.9 million, or 3.7%, of this growth. Consumer loans are centrally underwritten using a credit scoring model developed by the Fair Isaac Corporation (“FICO”). It uses a risk-based system to determine the probability that a borrower may default on financial obligations to the lender. Underwriting standards for home equity loans are heavily influenced by statutory requirements, which include loan-to-value and affordability ratios, risk-based pricing strategies, and documentation requirements. The home equity category consists mainly of revolving lines of credit secured by junior liens on owner-occupied real estate. Loan-to-value ratios on home equity loans and 1-4 family mortgages are based on the current appraised value of the collateral.

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Non-performing Assets and Performing Potential Problem Loans

The following table presents our loan portfolio by performing and non-performing status. A discussion of our accounting policies for non-accrual loans, TDRs, and loans 90 days or more past due can be found in Note 1 of “Notes to the Condensed Consolidated Financial Statements” in Part 1, Item 1 of this Form 10-Q.

Table 11

Loan Portfolio by Performing/Non-Performing Status

(Dollar amounts in thousands)

					Accruing
	Total Loans		Current		30-89 Days Past Due		90 Days Past Due		TDRs		Non-accrual
As of September 30, 2014
Commercial and industrial	$	2,208,166	$	2,179,077	$	5,974	$	1,256	$	2,163	$	19,696
Agricultural	347,511		347,150		—		—		—		361
Commercial real estate:
Office	437,222		428,602		867		3,766		—		3,987
Retail	454,178		444,774		975		74		416		7,939
Industrial	531,122		525,909		—		—		176		5,037
Multi-family	559,689		556,896		641		—		616		1,536
Construction	193,445		186,363		—		—		—		7,082
Other commercial real estate	871,825		859,440		3,882		150		441		7,912
Total commercial real estate	3,047,481		3,001,984		6,365		3,990		1,649		33,493
Total corporate loans	5,603,158		5,528,211		12,339		5,246		3,812		53,550
Home equity	517,446		507,314		2,959		587		752		5,834
1-4 family mortgages	238,172		232,331		1,595		126		885		3,235
Installment	69,428		66,988		428		103		—		1,909
Total consumer loans	825,046		806,633		4,982		816		1,637		10,978
Total loans, excluding covered loans	6,428,204		6,334,844		17,321		6,062		5,449		64,528
Covered loans	90,875		72,137		802		7,031		—		10,905
Total loans	$	6,519,079	$	6,406,981	$	18,123	$	13,093	$	5,449	$	75,433
As of December 31, 2013
Commercial and industrial	$	1,830,638	$	1,805,516	$	6,424	$	393	$	6,538	$	11,767
Agricultural	321,702		321,123		60		—		—		519
Commercial real estate:
Office	459,202		455,547		1,200		731		—		1,724
Retail	392,576		385,234		939		272		624		5,507
Industrial	501,907		481,766		337		312		9,647		9,845
Multi-family	332,873		329,669		318		—		1,038		1,848
Construction	186,197		179,877		23		—		—		6,297
Other commercial real estate	807,071		789,517		4,817		258		4,326		8,153
Total commercial real estate	2,679,826		2,621,610		7,634		1,573		15,635		33,374
Total corporate loans	4,832,166		4,748,249		14,118		1,966		22,173		45,660
Home equity	427,020		413,912		4,355		1,102		787		6,864
1-4 family mortgages	275,992		267,497		1,939		548		810		5,198
Installment	44,827		42,329		330		92		—		2,076
Total consumer loans	747,839		723,738		6,624		1,742		1,597		14,138
Total loans, excluding covered loans	5,580,005		5,471,987		20,742		3,708		23,770		59,798
Covered loans	134,355		93,100		2,232		18,081		—		20,942
Total loans	$	5,714,360	$	5,565,087	$	22,974	$	21,789	$	23,770	$	80,740

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The following table provides a comparison of our non-performing assets and past due loans to prior periods.

Table 12

Non-Performing Assets and Past Due Loans

(Dollar amounts in thousands)

	2014									2013
	September 30			June 30			March 31			December 31			September 30
Non-performing assets, excluding acquired and covered loans and covered OREO (1)
Non-accrual loans	$	63,858		$	66,728		$	64,217		$	59,798		$	68,170
90 days or more past due loans	5,983			3,533			4,973			3,708			5,642
Total non-performing loans	69,841			70,261			69,190			63,506			73,812
Accruing TDRs	5,449			5,697			6,301			23,770			24,329
OREO	29,165			30,331			30,026			32,473			35,616
Total non-performing assets	$	104,455		$	106,289		$	105,517		$	119,749		$	133,757
30-89 days past due loans	$	13,459		$	24,167		$	12,861		$	20,742		$	15,111
Non-accrual loans to total loans	1.08		%	1.14		%	1.13		%	1.07		%	1.25		%
Non-performing loans to total loans	1.18		%	1.20		%	1.22		%	1.14		%	1.35		%
Non-performing assets to loans plus   OREO	1.76		%	1.81		%	1.84		%	2.13		%	2.44		%
Non-performing acquired loans and OREO (1)
Non-accrual loans	$	670		$	—		$	—		$	—		$	—
90 days or more past due loans	79			—			—			—			—
Total non-performing loans	749			—			—			—			—
OREO	—			—			—			—			—
Total non-performing assets	$	749		$	—		$	—		$	—		$	—
30-89 days past due loans	$	3,862		$	—		$	—		$	—		$	—
Non-performing covered loans and covered OREO (1)
Non-accrual loans	$	10,905		$	13,060		$	18,004		$	20,942		$	30,856
90 days or more past due loans	7,031			8,464			14,691			18,081			20,235
Total non-performing loans	17,936			21,524			32,695			39,023			51,091
OREO	9,277			9,825			7,355			8,863			10,477
Total non-performing assets	$	27,213		$	31,349		$	40,050		$	47,886		$	61,568
30-89 days past due loans	$	802		$	6,286		$	2,439		$	2,232		$	7,881
Total non-performing assets
Non-accrual loans	$	75,433		$	79,788		$	82,221		$	80,740		$	99,026
90 days or more past due loans	13,093			11,997			19,664			21,789			25,877
Total non-performing loans	88,526			91,785			101,885			102,529			124,903
Accruing TDRs	5,449			5,697			6,301			23,770			24,329
OREO	38,442			40,156			37,381			41,336			46,093
Total non-performing assets	$	132,417		$	137,638		$	145,567		$	167,635		$	195,325
30-89 days past due loans	$	18,123		$	30,453		$	15,300		$	22,974		$	22,992
Non-accrual loans to total loans	1.16		%	1.34		%	1.41		%	1.41		%	1.77		%
Non-performing loans to total loans	1.36		%	1.54		%	1.75		%	1.79		%	2.23		%
Non-performing assets to loans plus   OREO	2.02		%	2.30		%	2.49		%	2.91		%	3.46		%

⁽¹⁾  Due to the impact of business combination accounting and protection provided by the FDIC Agreements, acquired loans and covered loans and covered OREO are separated in this table and excluded from these metrics to provide for improved comparability to prior periods and better perspective into asset quality trends. For a discussion of acquired and covered loans, refer to Note 1 and Note 6 of “Notes to the Condensed Consolidated Financial Statements” in Part I, Item 1 of this Form 10-Q.

Non-performing assets, excluding acquired and covered loans and covered OREO, decreased by $15.3 million, or 12.8%, from December 31, 2013 due primarily to lower levels of accruing TDRs, which was partially offset by a rise in non-performing loans.

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Two accruing TDRs totaling $18.8 million were returned to performing status after sustained payment performance in accordance with their modified terms, which represent market rates at the time of restructuring. Refer to the "TDRs" section below for further discussion.

TDRs

Loan modifications may be performed at the request of the individual borrower and may include reductions in interest rates, changes in payments, and extensions of maturity dates. We occasionally restructure loans at other than market rates or terms to enable the borrower to work through financial difficulties for a period of time, and these restructures remain classified as TDRs for the remaining terms of the loans.

Table 13

TDRs by Type

(Dollar amounts in thousands)

	September 30, 2014			December 31, 2013			September 30, 2013
	Number of Loans	Amount		Number of Loans	Amount		Number of Loans	Amount
Commercial and industrial	9	$	17,969	10	$	8,659	12	$	9,029
Agricultural	—	—		—	—		—	—
Commercial real estate:
Office	—	—		—	—		—	—
Retail	1	416		2	624		2	626
Industrial	1	176		3	9,647		4	10,083
Multi-family	4	853		5	1,291		5	1,304
Construction	—	—		—	—		2	495
Other commercial real estate	6	627		7	4,617		7	4,726
Total commercial real estate	12	2,072		17	16,179		20	17,234
Total corporate loans	21	20,041		27	24,838		32	26,263
Home equity	18	1,265		18	1,299		14	1,068
1-4 family mortgages	11	1,120		14	1,716		14	1,735
Installment	—	—		—	—		—	—
Total consumer loans	29	2,385		32	3,015		28	2,803
Total TDRs	50	$	22,426	59	$	27,853	60	$	29,066
Accruing TDRs	30	$	5,449	39	$	23,770	37	$	24,329
Non-accrual TDRs	20	16,977		20	4,083		23	4,737
Total TDRs	50	$	22,426	59	$	27,853	60	$	29,066
Year-to-date charge-offs on TDRs		$	8,345		$	1,880		$	1,850
Specific reserves related to TDRs		2,625			1,952			2,024

TDRs totaled $22.4 million at September 30, 2014, decreasing $5.4 million from December 31, 2013.

Accruing TDRs declined $18.3 million from December 31, 2013 driven primarily by the return of two TDRs totaling $18.8 million to performing status during the first quarter of 2014 after sustained payment performance in accordance with their modified terms, which represent market rates at the time of restructuring. This reduction was partially offset by the addition of a corporate loan relationship totaling $2.0 million that was upgraded to accruing TDR status.

At September 30, 2014, non-accrual TDRs totaled $17.0 million compared to $4.1 million at December 31, 2013. The increase was driven primarily by the restructure of one non-accrual credit totaling $15.5 million, net of related charge-offs, during the third quarter of 2014. TDRs are reported as non-accrual if they are not performing in accordance with their modified terms or they have not yet exhibited sufficient performance under their modified terms.

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Performing Potential Problem Loans

Performing potential problem loans consist of special mention loans and substandard loans. These loans are performing in accordance with contractual terms, but we have concerns about the ability of the borrower to continue to comply with loan terms due to the borrower’s operating or financial difficulties.

Table 14

Performing Potential Problem Loans

(Dollar amounts in thousands)

	September 30, 2014									December 31, 2013
	Special Mention (1)			Substandard (2)			Total (3)			Special Mention (1)			Substandard (2)			Total (3)
Commercial and industrial	$	66,429		$	25,425		$	91,854		$	23,679		$	14,135		$	37,814
Agricultural	299			—			299			344			—			344
Commercial real estate:
Office, retail, and industrial	28,411			32,723			61,134			27,871			23,538			51,409
Multi-family	5,502			6,818			12,320			2,794			499			3,293
Construction	7,229			16,607			23,836			8,309			17,642			25,951
Other commercial real estate	22,528			24,410			46,938			14,567			22,576			37,143
Total commercial real estate	63,670			80,558			144,228			53,541			64,255			117,796
Total performing potential    problem loans	130,398			105,983			236,381			77,564			78,390			155,954
Less: acquired performing   potential problem loans	3,855			38,234			42,089			—			—			—
Total performing potential   problem loans, excluding   acquired loans	$	126,543		$	67,749		$	194,292		$	77,564		$	78,390		$	155,954
Performing potential problem   loans to corporate loans	2.33		%	1.89		%	4.22		%	1.61		%	1.62		%	3.23		%
Performing potential problem   loans to corporate loans,   excluding acquired loans	2.48		%	1.33		%	3.81		%	1.61		%	1.62		%	3.23		%

⁽¹⁾  Loans categorized as special mention exhibit potential weaknesses that require the close attention of management since these potential weaknesses may result in the deterioration of repayment prospects in the future.

⁽²⁾  Loans categorized as substandard exhibit a well-defined weakness or weaknesses that may jeopardize the liquidation of the debt. These loans continue to accrue interest because they are well secured and collection of principal and interest is expected within a reasonable time.

⁽³⁾  Total performing potential problem loans excludes accruing TDRs of $3.5 million as of September 30, 2014 and $2.8 million as of December 31, 2013.

Performing potential problem loans totaled $236.4 million as of September 30, 2014 compared to $156.0 million as of December 31, 2013. This increase was impacted by the Popular acquisition, which added $42.1 million of performing potential problem loans. Acquired loans are recorded at fair value, which incorporates credit risk, at the data of acquisition.

Performing potential problem loans, excluding acquired loans, were 3.81% of corporate loans at September 30, 2014 compared to 3.23% at December 31, 2013. This level reflects a greater proportion of loans classified as special mention compared to December 31, 2013. Special mention loans, excluding acquired loans, increased by $49.0 million from December 31, 2013, driven primarily by the downgrade of two corporate loan relationships totaling $37.5 million for which management has specific monitoring plans.

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OREO

OREO consists of properties acquired as the result of borrower defaults on loans. OREO, excluding covered OREO, was $29.2 million at September 30, 2014, decreasing $3.3 million from December 31, 2013.

Table 15

OREO by Type

(Dollar amounts in thousands)

	September 30, 2014		December 31, 2013		September 30, 2013
Single-family homes	$	2,106	$	2,257	$	3,028
Land parcels:
Raw land	3,145		4,037		4,540
Commercial lots	10,941		11,649		11,955
Single-family lots	1,742		3,101		3,105
Total land parcels	15,828		18,787		19,600
Multi-family units	933		346		845
Commercial properties	10,298		11,083		12,143
Total OREO, excluding covered OREO	29,165		32,473		35,616
Covered OREO	9,277		8,863		10,477
Total OREO	$	38,442	$	41,336	$	46,093

OREO Activity

A rollforward of OREO balances for the nine months ended September 30, 2014 and 2013 is presented in the following table.

Table 16

OREO Rollforward

(Dollar amounts in thousands)

	Nine Months Ended
	September 30, 2014									September 30, 2013
	OREO			Covered OREO			Total			OREO			Covered OREO			Total
Beginning balance	$	32,473		$	8,863		$	41,336		$	39,953		$	13,123		$	53,076
Transfers from loans	4,749			8,528			13,277			10,775			5,102			15,877
Proceeds from sales	(6,047		)	(8,246		)	(14,293		)	(13,151		)	(7,564		)	(20,715		)
Gains (losses) on sales of OREO	703			177			880			(1,333		)	17			(1,316		)
OREO valuation adjustments	(2,713		)	(45		)	(2,758		)	(628		)	(201		)	(829		)
Ending Balance	$	29,165		$	9,277		$	38,442		$	35,616		$	10,477		$	46,093

66

Allowance for Credit Losses

Methodology for the Allowance for Credit Losses

The allowance for credit losses is comprised of the allowance for loan and covered loan losses and the reserve for unfunded commitments and is maintained by management at a level believed adequate to absorb estimated losses inherent in the existing loan portfolio. Determination of the allowance for credit losses is inherently subjective since it requires significant estimates and management judgment, including the amounts and timing of expected future cash flows on impaired loans, estimated losses on pools of homogeneous loans, and consideration of current economic trends.

Acquired loans are recorded at fair value, which incorporates credit risk, at the date of acquisition. No allowance for credit losses is recorded on the acquisition date. As the acquisition adjustment is accreted into income over future periods, an allowance for credit losses will be established as necessary to reflect credit deterioration.

While management utilizes its best judgment and information available, the ultimate adequacy of the allowance for credit losses depends on a variety of factors beyond the Company’s control, including the performance of its loan portfolio, the economy, changes in interest rates and property values, and the interpretation of loan risk ratings by regulatory authorities. Management believes that the allowance for credit losses is an appropriate estimate of credit losses inherent in the loan portfolio as of September 30, 2014.

The accounting policy for the allowance for credit losses is discussed in Note 1 of “Notes to the Condensed Consolidated Financial Statements” in Part I, Item 1 of this Form 10-Q.

An allowance for credit losses is established on legacy loans, which consist of loans originated by the Bank, acquired loans, and covered loans. Additional discussion regarding acquired and covered loans is discussed in Note 6 of “Notes to the Condensed Consolidated Financial Statements” in Part I, Item 1 of this Form 10-Q. The following table provides additional details related to the legacy, covered, and acquired components of the allowance for credit losses and the remaining acquisition adjustment associated with acquired loans for the quarter ended September 30, 2014.

Table 17

Allowance for Credit Losses and Acquisition Adjustment

(Dollar amounts in thousands)

	Legacy and Covered Loans			Acquired Loans			Total
Quarter ended September 30, 2014
Beginning balance	$	79,942		$	—		$	79,942
Net charge-offs	(15,947		)	—			(15,947		)
Provision for loan and covered loan losses	10,727			—			10,727
Ending balance	$	74,722		$	—		$	74,722
Total loans	$	5,985,861		$	533,218		$	6,519,079
Remaining acquisition adjustment	N/A			13,598			13,598
Allowance for credit losses as a percent of total loans	1.25		%	N/A			1.15		%
Remaining acquisition adjustment as a percent of acquired loans	N/A			2.55		%	N/A

N/A - Not applicable.

Excluding acquired loans, the total allowance for credit losses to total loans is 1.25%. Accretion of the acquisition adjustment into interest income totaled $500,000 during the third quarter of 2014, resulting in a remaining acquisition adjustment as a percent of acquired loans of 2.55%.

67

Table 18

Allowance for Credit Losses

and Summary of Credit Loss Experience

(Dollar amounts in thousands)

	Quarters Ended
	2014									2013
	September 30			June 30			March 31			December 31			September 30
Change in allowance for credit losses
Beginning balance	$	79,942		$	82,248		$	87,121		$	93,214		$	96,976
Loan charge-offs:
Commercial, industrial, and agricultural	9,763			2,099			3,680			3,084			2,719
Office, retail, and industrial	2,514			3,511			1,083			1,042			987
Multi-family	26			267			90			539			112
Construction	157			234			661			31			470
Other commercial real estate	1,363			561			1,771			813			889
Consumer	3,148			1,829			2,028			2,045			2,482
Total loan charge-offs	16,971			8,501			9,313			7,554			7,659
Recoveries of loan charge-offs:
Commercial, industrial, and agricultural	716			259			2,160			614			521
Office, retail, and industrial	55			290			58			160			31
Multi-family	—			2			1			549			—
Construction	—			2			158			965			60
Other commercial real estate	108			89			144			37			250
Consumer	150			214			138			177			374
Total recoveries of loan charge-offs	1,029			856			2,659			2,502			1,236
Net loan charge-offs, excluding   covered loan charge-offs	15,942			7,645			6,654			5,052			6,423
Net covered loan charge-offs (recoveries)	5			2			(340		)	271			1,629
Net loan and covered loan charge-offs	15,947			7,647			6,314			5,323			8,052
Provision for loan and covered loan losses:
Provision for loan losses	11,416			7,425			2,911			226			4,466
Provision for covered loan losses	(689		)	(2,084		)	(1,470		)	(226		)	304
Total provision for loan and covered   loan losses	10,727			5,341			1,441			—			4,770
Reduction in reserve for unfunded   commitments (1)	—			—			—			(770		)	(480		)
Total provision for loan and   covered loan losses and other	10,727			5,341			1,441			(770		)	4,290
Ending balance	$	74,722		$	79,942		$	82,248		$	87,121		$	93,214

⁽¹⁾  Included in other noninterest expense in the Consolidated Statements of Income.

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	Quarters Ended
	2014									2013
	September 30			June 30			March 31			December 31			September 30
Allowance for credit losses
Allowance for loan losses	$	64,457		$	68,983		$	69,203		$	72,946		$	77,772
Allowance for covered loan losses	8,649			9,343			11,429			12,559			13,056
Total allowance for loan and   covered loan losses	73,106			78,326			80,632			85,505			90,828
Reserve for unfunded commitments	1,616			1,616			1,616			1,616			2,386
Total allowance for credit losses	$	74,722		$	79,942		$	82,248		$	87,121		$	93,214
Amounts and ratios, excluding acquired loans, including covered loans (1)
Average loans	$	5,980,337		$	5,891,127		$	5,706,880		$	5,658,756		$	5,539,776
Net loan charge-offs to average loans,   annualized	1.06		%	0.52		%	0.45		%	0.37		%	0.58		%
Allowance for credit losses at end of   period as a percent of:
Total loans	1.25		%	1.34		%	1.41		%	1.52		%	1.66		%
Non-accrual loans	99.95		%	100.19		%	100.03		%	107.90		%	94.13		%
Non-performing loans	85.13		%	87.10		%	80.73		%	84.97		%	74.63		%

⁽¹⁾  Due to the impact of business combination accounting, acquired loans are excluded from these metrics to provide for improved comparability to prior periods and better perspective into asset quality trends.

Activity in the Allowance for Credit Losses

The allowance for credit losses was $74.7 million as of September 30, 2014, a decline of $12.4 million from December 31, 2013. The allowance for credit losses was 1.25% of total loans, excluding acquired loans, including covered loans, at September 30, 2014 compared to 1.52% at December 31, 2013.

Net loan charge-offs, excluding covered loan charge-offs, increased by $10.9 million from the fourth quarter of 2013, and primarily relates to the recognition of a $7.5 million loss attributable to a longstanding commercial borrowing relationship. This loss resulted from reported accounting irregularities and the resulting impact on the borrower's adherence to customary debt covenants. The Company is aggressively pursuing all appropriate collection and other remedies.

Covered loan charge-offs reflect the decline, and recoveries reflect the increase, in expected future cash flows of certain acquired loans. Management re-estimates expected future cash flows periodically, and the present value of any decreases in expected future cash flows from the FDIC is recorded as either a charge-off or an allowance for covered loan losses is established. Any increases in expected future cash flows are recorded through the allowance for covered loan losses as recoveries to the extent charge-offs were previously taken or prospectively as yield adjustments over the remaining lives of the specific loans.

69

FUNDING AND LIQUIDITY MANAGEMENT

The following table provides a comparison of average funding sources for the quarters ended September 30, 2014, December 31, 2013, and September 30, 2013. We believe that average balances, rather than period-end balances, are more meaningful in analyzing funding sources because of the normal fluctuations that may occur on a daily or monthly basis within funding categories.

Table 19

Funding Sources – Average Balances

(Dollar amounts in thousands)

	Quarters Ended									Third Quarter 2014 % Change From
	September 30, 2014			December 31, 2013			September 30, 2013			Fourth Quarter 2013		Third Quarter 2013
Demand deposits	$	2,208,450		$	1,956,570		$	1,975,797		12.9	%	11.8	%
Savings deposits	1,231,700			1,126,737			1,127,970			9.3	%	9.2	%
NOW accounts	1,261,522			1,195,471			1,175,926			5.5	%	7.3	%
Money market accounts	1,413,753			1,356,383			1,343,263			4.2	%	5.2	%
Transactional deposits	6,115,425			5,635,161			5,622,956			8.5	%	8.8	%
Time deposits	1,209,935			1,218,450			1,272,670			(0.7	)%	(4.9	)%
Brokered deposits	16,090			16,067			16,076			0.1	%	0.1	%
Total time deposits	1,226,025			1,234,517			1,288,746			(0.7	)%	(4.9	)%
Total deposits	7,341,450			6,869,678			6,911,702			6.9	%	6.2	%
Securities sold under agreements to   repurchase	101,348			99,207			89,029			2.2	%	13.8	%
Federal funds purchased	326			—			22			100.0	%	N/M
FHLB advances	—			114,554			114,562			(100.0	)%	(100.0	)%
Total borrowed funds	101,674			213,761			203,613			(52.4	)%	(50.1	)%
Senior and subordinated debt	191,013			207,162			214,860			(7.8	)%	(11.1	)%
Total funding sources	$	7,634,137		$	7,290,601		$	7,330,175		4.7	%	4.1	%
Average interest rate paid on   borrowed funds	0.04		%	0.72		%	0.76		%
Weighted-average maturity of FHLB   advances	N/M			29.3 months			32.6 months
Weighted-average interest rate of   FHLB advances	N/M			1.34		%	1.34		%

N/M - Not meaningful.

Average funding sources for the third quarter of 2014 increased $343.5 million from the fourth quarter of 2013 and $304.0 million from the third quarter of 2013. Compared to both prior periods presented, the rise in transactional deposits was driven primarily by deposits assumed in the Popular transaction. The reduction in borrowed funds resulted from the prepayment of $114.6 million in FHLB advances with a weighted-average rate of 1.33% during the second quarter of 2014. The reduction in average senior and subordinated debt compared to both prior quarters presented was due to the repurchase and retirement of $24.0 million of junior subordinated debentures with a rate of 6.95% during the fourth quarter of 2013.

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Table 20

Borrowed Funds

(Dollar amounts in thousands)

	September 30, 2014			September 30, 2013
	Amount		Weighted- Average Rate (%)	Amount		Weighted- Average Rate (%)
At period-end:
Securities sold under agreements to repurchase	$	107,877	0.04	$	97,500	0.03
Federal funds purchased	25,000		—	—		—
FHLB advances	—		—	114,558		1.34
Total borrowed funds	$	132,877	0.04	$	212,058	0.74
Average for the year-to-date period:
Securities sold under agreements to repurchase	$	104,468	0.03	$	88,088	0.03
Federal funds purchased	110		—	7		—
FHLB advances	57,903		1.24	114,569		1.40
Total borrowed funds	$	162,481	0.46	$	202,664	0.80
Maximum amount outstanding at the end of any day during the period:
Securities sold under agreements to repurchase	$	117,772		$	106,170
Federal funds purchased	25,000			—
FHLB advances	114,551			114,581

Average borrowed funds totaled $162.5 million for the first nine months of 2014 decreasing 19.8% compared to the same period in 2013 due to the prepayment of $114.6 million of FHLB advances during the second quarter of 2014. This decline was partially offset by higher levels of securities sold under agreements to repurchase.

Securities sold under agreements to repurchase generally mature within 1 to 90 days from the transaction date.

71

MANAGEMENT OF CAPITAL

Capital Measurements

A strong capital structure is required under applicable banking regulations and is crucial in maintaining investor confidence, accessing capital markets, and enabling us to take advantage of future growth opportunities. Our capital policy requires that the Company and the Bank maintain capital ratios in excess of the minimum regulatory guidelines. It serves as an internal discipline in analyzing business risks and internal growth opportunities and sets targeted levels of return on equity. Under regulatory capital adequacy guidelines, the Company and the Bank are subject to various capital requirements set and administered by the federal banking agencies. These requirements specify minimum capital ratios, defined as Tier 1 and total capital as a percentage of assets and off-balance sheet items that were weighted according to broad risk categories and a leverage ratio calculated as Tier 1 capital as a percentage of adjusted average assets. We manage our capital ratios for the Bank to consistently maintain these measurements in excess of the Federal Reserve’s minimum levels to be considered “well-capitalized,” which is the highest capital category established.

The following table presents our consolidated measures of capital as of the dates presented and the capital guidelines established by the Federal Reserve for the Bank to be categorized as “well-capitalized.” All regulatory mandated ratios for characterization as “well-capitalized” were exceeded as of September 30, 2014 and December 31, 2013.

All other ratios presented in the table below are capital adequacy metrics used and relied on by investors and industry analysts; however, they are non-GAAP financial measures for SEC purposes. These non-GAAP measures are valuable indicators of a financial institution’s capital strength since they eliminate intangible assets from stockholders’ equity and retain the effect of accumulated other comprehensive loss in stockholders’ equity. Reconciliations of the components of those ratios to GAAP are also presented in the table below.

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Table 21

Capital Measurements

(Dollar amounts in thousands)

	September 30, 2014			December 31, 2013			Regulatory Minimum For Well- Capitalized		Excess Over Required Minimums at September 30, 2014
Bank regulatory capital ratios:
Total capital to risk-weighted assets	11.70		%	13.86		%	10.00	%	17	%	$	125,043
Tier 1 capital to risk-weighted assets	10.69		%	12.61		%	6.00	%	78	%	$	344,057
Tier 1 leverage to average assets	9.42		%	10.24		%	5.00	%	88	%	$	368,276
Company regulatory capital ratios (1):
Total capital to risk-weighted assets	10.94		%	12.39		%	N/A		N/A		N/A
Tier 1 capital to risk-weighted assets	9.86		%	10.91		%	N/A		N/A		N/A
Tier 1 leverage to average assets	8.93		%	9.18		%	N/A		N/A		N/A
Company tier 1 common capital to risk-weighted   assets (1)(2)	9.38		%	10.37		%	N/A		N/A		N/A
Reconciliation of Company capital components to GAAP:
Total stockholders' equity	$	1,049,676		$	1,001,442
Goodwill and other intangible assets	(322,664		)	(276,366		)
Tangible common equity	727,012			725,076
Accumulated other comprehensive loss	18,852			26,792
Tangible common equity, excluding accumulated   other comprehensive loss	$	745,864		$	751,868
Total assets	$	9,096,351		$	8,253,407
Goodwill and other intangible assets	(322,664		)	(276,366		)
Tangible assets	$	8,773,687		$	7,977,041
Risk-weighted assets	$	7,636,326		$	6,794,666
Company tangible common equity ratios (1)(3):
Tangible common equity to tangible assets	8.29		%	9.09		%	N/A		N/A		N/A
Tangible common equity, excluding accumulated   other comprehensive loss, to tangible assets	8.50		%	9.43		%	N/A		N/A		N/A
Tangible common equity to risk-weighted assets	9.52		%	10.67		%	N/A		N/A		N/A

N/A - Not applicable.

⁽¹⁾  Ratio is not subject to formal Federal Reserve regulatory guidance.

⁽²⁾  Excludes the impact of trust-preferred securities.

⁽³⁾  Tangible common equity (“TCE”) represents common stockholders’ equity less goodwill and identifiable intangible assets. In management’s view, Tier 1 common capital and TCE measures are meaningful to the Company, as well as analysts and investors, in assessing the Company’s use of equity and in facilitating comparisons with competitors.

Overall, the Company's capital ratios decreased compared to December 31, 2013. The Popular acquisition drove this decrease due to the addition of risk-weighted assets and average assets, including goodwill and other intangible assets, in the third quarter of 2014. The Bank's regulatory ratios exceeded all regulatory mandated ratios for characterization as “well-capitalized” as of September 30, 2014.

The Board of Directors reviews the Company’s capital plan each quarter, considering the current and expected operating environment as well as an evaluation of various capital alternatives.

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Basel III Capital Rules

In July of 2013, the Company and the Bank's primary federal regulator, the Federal Reserve, published final rules establishing a new comprehensive capital framework for U.S. banking organizations. The Basel III Capital Rules are discussed in the "Supervision and Regulation" section in Item 1, "Business" in the Company's 2013 10-K.

Management believes that as of September 30, 2014 the Company and the Bank would meet all capital adequacy requirements under the Basel III Capital Rules on a fully phased-in basis as if such requirements were currently in effect.

Dividends

The Board of Directors approved a quarterly cash dividend of $0.08 per common share during the third quarter of 2014, which follows a dividend increase from $0.07 to $0.08 per common share during the second quarter of 2014.

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ITEM 3. QUANTITATIVE AND QUALITATIVE

DISCLOSURES ABOUT MARKET RISK

Market risk is the risk of loss arising from adverse changes in the fair value of financial instruments due to changes in interest rates, exchange rates, and equity prices. Interest rate risk is our primary market risk and is the result of repricing, basis, and option risk. A description and analysis of our interest rate risk management policies is included in Part II, Item 7A, “Quantitative and Qualitative Disclosures about Market Risk,” in our 2013 10-K.

We seek to achieve consistent growth in net interest income and net income while managing volatility that arises from shifts in interest rates. The Bank’s Asset Liability Committee (“ALCO”) oversees financial risk management by developing programs to measure and manage interest rate risks within authorized limits set by the Bank’s Board of Directors. ALCO also approves the Bank’s asset and liability management policies, oversees the formulation and implementation of strategies to improve balance sheet positioning and earnings, and reviews the Bank’s interest rate sensitivity position. Management uses net interest income simulation modeling to analyze and capture exposure of earnings to changes in interest rates.

Net Interest Income Sensitivity

The analysis of net interest income sensitivity assesses the magnitude of changes in net interest income over a twelve-month measurement period resulting from immediate changes in interest rates using multiple rate scenarios. These scenarios include, but are not limited to, a flat or unchanged rate environment, immediate increases of 100, 200, and 300 basis points, and an immediate decrease of 100 basis points. Due to the low interest rate environment as of September 30, 2014 and December 31, 2013, management determined that an immediate decrease in interest rates greater than 100 basis points was not meaningful for this analysis.

This simulation analysis is based on expected future cash flows and repricing characteristics for balance sheet and off-balance sheet instruments and incorporates market-based assumptions regarding the effect of changing interest rates on the prepayment rates of certain assets and liabilities. In addition, this sensitivity analysis examines assets and liabilities at the beginning of the measurement period and does not assume any changes from growth or business plans over the next twelve months. Interest-earning assets and interest-bearing liabilities are assumed to re-price based on contractual terms over the twelve-month measurement period assuming an instantaneous parallel shift in interest rates in effect at the beginning of the measurement period. The simulation analysis also incorporates assumptions based on the historical behavior of deposit rates in relation to interest rates. Because these assumptions are inherently uncertain, the simulation analysis cannot definitively measure net interest income or predict the impact of the fluctuation in interest rates on net interest income, but does provide an indication of the Company's sensitivity to changes in interest rates. Actual results may differ from simulated results due to timing, magnitude, and frequency of interest rate changes as well as changes in market conditions and management strategies.

Our balance sheet is asset sensitive based on repricing and maturity characteristics and simulation analysis assumptions. The Bank’s current simulation analysis indicates we would benefit from rising interest rates. Interest-earning assets consist of short and long-term products. As of September 30, 2014, 50% of the loan portfolio consisted of fixed rate loans and 50% were floating rate loans. Investments, consisting of securities and interest-bearing deposits, are more heavily weighted toward fixed rate securities at 61% of the total compared to 39% for floating rate interest-bearing deposits in other banks. Fixed rate loans are most sensitive to the 3-5 year portion of the yield curve and the Bank limits its loans with maturities that extend beyond 5 years. The majority of floating rate loans are indexed to the short-term Prime or LIBOR rates. The amount of floating rate loans with interest rate floors was $681.1 million, or 26%, of the floating rate loan portfolio as of September 30, 2014, compared to $807.3 million, or 34%, of the floating rate loan portfolio as of December 31, 2013. On the liability side of the balance sheet, 83.5% of deposits are demand deposits or interest-bearing transactional deposits, which either do not pay interest or the interest rates are expected to rise at a slower pace than short-term interest rates.

75

Analysis of Net Interest Income Sensitivity

(Dollar amounts in thousands)

	Immediate Change in Rates
	+300			+200			+100			-100
September 30, 2014:
Dollar change	$	44,567		$	28,614		$	13,384		$	(10,265	)
Percent change	15.8		%	10.1		%	4.7		%	(3.6		)%
December 31, 2013:
Dollar change	$	45,209		$	28,307		$	11,925		$	(11,791	)
Percent change	17.3		%	10.8		%	4.6		%	(4.5		)%

The sensitivity of estimated net interest income to an instantaneous parallel shift in interest rates is reflected as both dollar and percentage changes. For example, this table illustrates that an instantaneous 200 basis point rise in interest rates as of September 30, 2014 would increase net interest income by $28.6 million, or 10.1%, over the next twelve months compared to no change in interest rates. This same measure was $28.3 million, or 10.8%, as of December 31, 2013, which suggests that the Company was slightly less sensitive to rising rates at September 30, 2014 compared to December 31, 2013.

During the nine months ended September 30, 2014, the increase in floating rate loan balances were funded by an increase in core deposits, which are less rate sensitive. Overall, this increase in rate sensitive assets was offset by the prepayment of $114.6 million of FHLB advances at fixed rates and the hedging of $325.0 million of certain corporate variable rate loans using interest rate swaps through which we receive fixed amounts and pay variable amounts. Fixed rate loans also increased due to the Popular acquisition, which added a greater proportion of higher yielding, fixed rate loans; however, this effect was mostly offset by a decrease in investments as cash flows have not been reinvested in the investment security portfolio during the nine months ended September 30, 2014. While net interest income is projected to decline in a decreasing interest rate environment, we believe the risk of a significant and sustained decrease in interest rates is minimal.

ITEM 4. CONTROLS AND PROCEDURES

At the end of the period covered by this report, (the “Evaluation Date”), the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s President and Chief Executive Officer and its Executive Vice President and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on that evaluation, the President and Chief Executive Officer and Executive Vice President and Chief Financial Officer concluded that as of the Evaluation Date, the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission rules and forms. There were no changes in the Company’s internal control over financial reporting during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

In the ordinary course of business, there were certain legal proceedings pending against the Company and its subsidiaries at September 30, 2014. While the outcome of any legal proceeding is inherently uncertain, based on information currently available, the Company's management believes that any liabilities arising from pending legal matters are not expected to have a material adverse effect on the Company's financial position, results of operations, or cash flows.

ITEM 1A. RISK FACTORS

The Company provided a discussion of certain risks and uncertainties faced by the Company in its Annual Report on Form 10-K for 2013. However, these factors may not be the only risks or uncertainties the Company faces.

76

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

The following table summarizes the Company’s monthly Common Stock purchases during the third quarter of 2014. The Board approved a stock repurchase program on November 27, 2007. Up to 2.5 million shares of the Company’s Common Stock may be repurchased, and the total remaining authorization under the program was 2,494,747 shares as of September 30, 2014. The repurchase program has no set expiration or termination date.

Issuer Purchases of Equity Securities

	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of a Publicly Announced Plan or Program	Maximum Number of Shares that May Yet Be Purchased Under the Plan or Program
July 1 – July 31, 2014	1,553	$	16.75	—	2,494,747
August 1 – August 31, 2014	—	—		—	2,494,747
September 1 – September 30, 2014	—	—		—	2,494,747
Total	1,553	$	16.75	—

⁽¹⁾  Consists of shares acquired pursuant to the Company’s share-based compensation plans and not the Company’s stock repurchase program. Under the terms of these plans, the Company accepts shares of Common Stock from option holders if they elect to surrender previously owned shares upon exercise to cover the exercise price of the stock options or, in the case of restricted shares of Common Stock, the withholding of shares to satisfy tax withholding obligations associated with the vesting of restricted shares.

77

ITEM 6. EXHIBITS

Exhibit Number	Description of Documents
3.1	Restated Certificate of Incorporation of the Company is incorporated herein by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 27, 2009.
3.2	Certificate of Amendment of Restated Certificate of Incorporation of the Company is incorporated herein by reference to Exhibit 3.2 to the Company's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 4, 2014.
3.3	Restated By-Laws of the Company are incorporated herein by reference to Exhibit 3.2 to the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 28, 2012.
11	Statement re: Computation of Per Share Earnings - The computation of basic and diluted earnings per common share is included in Note 8 of the Company’s Notes to the Condensed Consolidated Financial Statements included in “ITEM 1. FINANCIAL STATEMENTS” of this document.
15	Acknowledgment of Independent Registered Public Accounting Firm.
31.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1 (1)	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2 (1)	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99	Report of Independent Registered Public Accounting Firm.
101	Interactive Data File.

⁽¹⁾  Furnished, not filed.

78

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.

                      First Midwest Bancorp, Inc.

/s/ PAUL F. CLEMENS

                               Paul F. Clemens

    Executive Vice President and Chief Financial Officer*

Date: November 7, 2014

* Duly authorized to sign on behalf of the registrant.

79

EX-15

Exhibit 15

Acknowledgement of Independent Registered Public Accounting Firm

November 7, 2014

The Board of Directors of First Midwest Bancorp, Inc.

We are aware of the incorporation by reference in the following Registration Statements of First Midwest Bancorp, Inc. (the “Company”) of our report dated November 7, 2014, relating to the unaudited condensed consolidated interim financial statements of the Company that are included in its Form 10-Q for the quarter ended September 30, 2014.

• Registration Statement (Form S-3 No. 33-20439) pertaining to the First Midwest Bancorp, Inc. Dividend Reinvestment and Stock Purchase Plan;

• Registration Statement (Form S-3ASR No. 333-179815) pertaining to a First Midwest Bancorp, Inc. debt and equity securities offering;

• Registration Statement (Form S-4 No. 333-114406) pertaining to First Midwest Capital Trust I;

• Registration Statement (Form S-8 No. 33-25136) pertaining to the First Midwest Bancorp, Inc. Savings and Profit Sharing Plan;

• Registration Statement (Form S-8 No. 33-42980) pertaining to the First Midwest Bancorp, Inc. 1989 Omnibus Stock and Incentive Plan;

• Registration Statement (Form S-8 No. 333-159389) pertaining to the First Midwest Bancorp, Inc. 1989 Omnibus Stock and Incentive Plan;

• Registration Statement (Form S-8 No. 333-42273) pertaining to the First Midwest Bancorp, Inc. 1989 Omnibus Stock and Incentive Plan;

• Registration Statement (Form S-8 No. 333-61090) pertaining to the First Midwest Bancorp, Inc. 1989 Omnibus Stock and Incentive Plan;

• Registration Statement (Form S-8 No. 333-50140) pertaining to the First Midwest Bancorp, Inc. Non-employee Directors’ 1997 Stock Option Plan;

• Registration Statement (Form S-8 No. 333-63095) pertaining to the First Midwest Bancorp, Inc. Non-employee Directors’ Stock Option Plan;

• Registration Statement (Form S-8 No. 333-63097) pertaining to the First Midwest Bancorp, Inc. Nonqualified Retirement Plan;

• Registration Statement (Form S-8 No. 333-151072) pertaining to the First Midwest Bancorp, Inc. Amended and Restated Non-employee Directors Stock Plan;

• Registration Statement (Form S-3 No. 333-157615) pertaining to a First Midwest Bancorp, Inc. debt and equity securities offering;

• Registration Statement (Form S-8 No. 333-168973) pertaining to the First Midwest Bancorp, Inc. Amended and Restated Omnibus Stock and Incentive Plan; and

• Registration Statement (Form S-4 No. 333-198561) pertaining to a First Midwest Bancorp, Inc. equity securities registration.

/s/ ERNST & YOUNG LLP

Chicago, IL

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Michael L. Scudder, certify that:

1. I have reviewed this report on Form 10-Q of First Midwest 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 and have:

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

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

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

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

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

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

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

Date: November 7, 2014 /s/ MICHAEL L. SCUDDER [Signature] President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Paul F. Clemens, certify that:

1. I have reviewed this report on Form 10-Q of First Midwest 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 and have:

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

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

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

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

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

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

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

Date: November 7, 2014 /s/ PAUL F. CLEMENS [Signature] Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, the undersigned officer of First Midwest Bancorp, Inc. (the “Company”), hereby certifies that:

1. The Company’s Report on Form 10-Q for the quarter ended September 30, 2014 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities and Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ MICHAEL L. SCUDDER
Name:	Michael L. Scudder
Title:	President and Chief Executive Officer
Dated:	November 7, 2014

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, the undersigned officer of First Midwest Bancorp, Inc. (the “Company”), hereby certifies that:

1. The Company’s Report on Form 10-Q for the quarter ended September 30, 2014 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities and Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ PAUL F. CLEMENS
Name:	Paul F. Clemens
Title:	Executive Vice President and Chief Financial Officer
Dated:	November 7, 2014

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-99

Exhibit 99

Report of Independent Registered Public Accounting Firm

The Board of Directors

First Midwest Bancorp, Inc.

We have reviewed the consolidated statement of financial condition of First Midwest Bancorp, Inc. (the “Company”) as of September 30, 2014, and the related condensed consolidated statements of income and the consolidated statements of comprehensive income for the three- and nine-month periods ended September 30, 2014 and 2013, and the consolidated statements of changes in stockholders’ equity and the condensed consolidated statements of cash flows for the nine-month periods ended September 30, 2014 and 2013. These financial statements are the responsibility of the Company’s management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the consolidated financial statements referred to above for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated statement of financial condition of the Company as of December 31, 2013, and the related consolidated statements of income, comprehensive income, changes in stockholders’ equity, and cash flows for the year then ended (not presented herein) and in our report dated March 3, 2014, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated statement of financial condition as of December 31, 2013, is fairly stated, in all material respects, in relation to the consolidated statement of financial condition from which it has been derived.

/s/ ERNST & YOUNG LLP

Chicago, Illinois

November 7, 2014

XML

Securities (Details) - Changes In Credit Losses Recognized In Earnings (USD $) In Thousands, unless otherwise specified	3 Months Ended				9 Months Ended
	Sep. 30, 2014		Sep. 30, 2013		Sep. 30, 2014		Sep. 30, 2013
Changes in Credit Losses Recognized in Earnings [Roll Forward]
Beginning balance	$ 23,880		$ 32,053		$ 32,422		$ 38,803
Losses on securities that previously had OTTI	0	[1]	0	[1]	28	[1]	0	[1]
Losses on securities that did not previously have OTTI	0	[1]	404	[1]	0	[1]	404	[1]
Reduction for sales of securities	0	[1],[2]	(39)	[1],[2]	(8,570)	[1],[2]	(6,789)	[1],[2]
Ending balance	$ 23,880		$ 32,418		$ 23,880		$ 32,418

[1] Included in net securities gains in the Condensed Consolidated Statements of Income.

[2] During the nine months ended September 30, 2014, one CDO with a carrying value of $1.3 million was sold. In addition, one CDO with a carrying value of zero was sold during the nine months ended September 30, 2013. These CDOs had OTTI of $8.6 million and $6.8 million, respectively, that were previously recognized in earnings.

XML

Past Due Loans, Allowance For Credit Losses, Impaired Loans and TDRS (Details) - TDRs By Class (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014		Dec. 31, 2013		Sep. 30, 2013
Past Due Loans, Allowance For Credit Losses, and Impaired Loans (Details) - TDRs By Class [Line Items]
Accruing	$ 5,449		$ 23,770
Non-accrual	16,977	[1]	4,083	[1]
Total	22,426		27,853		29,066
Commercial And Industrial
Past Due Loans, Allowance For Credit Losses, and Impaired Loans (Details) - TDRs By Class [Line Items]
Accruing	2,163		6,538
Non-accrual	15,806	[1]	2,121	[1]
Total	17,969		8,659
Agricultural
Past Due Loans, Allowance For Credit Losses, and Impaired Loans (Details) - TDRs By Class [Line Items]
Accruing	0		0
Non-accrual	0	[1]	0	[1]
Total	0		0
Office Retail And Industrial
Past Due Loans, Allowance For Credit Losses, and Impaired Loans (Details) - TDRs By Class [Line Items]
Accruing	592		10,271
Non-accrual	0	[1]	0	[1]
Total	592		10,271
Multi-Family
Past Due Loans, Allowance For Credit Losses, and Impaired Loans (Details) - TDRs By Class [Line Items]
Accruing	616		1,038
Non-accrual	237	[1]	253	[1]
Total	853		1,291
Construction
Past Due Loans, Allowance For Credit Losses, and Impaired Loans (Details) - TDRs By Class [Line Items]
Accruing	0		0
Non-accrual	0	[1]	0	[1]
Total	0		0
Other Commercial Real Estate
Past Due Loans, Allowance For Credit Losses, and Impaired Loans (Details) - TDRs By Class [Line Items]
Accruing	441		4,326
Non-accrual	186	[1]	291	[1]
Total	627		4,617
Total Commercial Real Estate
Past Due Loans, Allowance For Credit Losses, and Impaired Loans (Details) - TDRs By Class [Line Items]
Accruing	1,649		15,635
Non-accrual	423	[1]	544	[1]
Total	2,072		16,179
Total Corporate Loans
Past Due Loans, Allowance For Credit Losses, and Impaired Loans (Details) - TDRs By Class [Line Items]
Accruing	3,812		22,173
Non-accrual	16,229	[1]	2,665	[1]
Total	20,041		24,838
Home Equity Line of Credit
Past Due Loans, Allowance For Credit Losses, and Impaired Loans (Details) - TDRs By Class [Line Items]
Accruing	752		787
Non-accrual	513	[1]	512	[1]
Total	1,265		1,299
1-4 family mortgages
Past Due Loans, Allowance For Credit Losses, and Impaired Loans (Details) - TDRs By Class [Line Items]
Accruing	885		810
Non-accrual	235	[1]	906	[1]
Total	1,120		1,716
Installment Loans
Past Due Loans, Allowance For Credit Losses, and Impaired Loans (Details) - TDRs By Class [Line Items]
Accruing	0		0
Non-accrual	0	[1]	0	[1]
Total	0		0
Total Consumer Loans
Past Due Loans, Allowance For Credit Losses, and Impaired Loans (Details) - TDRs By Class [Line Items]
Accruing	1,637		1,597
Non-accrual	748	[1]	1,418	[1]
Total	$ 2,385		$ 3,015

[1] These TDRs are included in non-accrual loans in the preceding tables.

XML

Past Due Loans, Allowance For Credit Losses, Impaired Loans and TDRS (Details) - Allowance for Credit Losses (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Allowance for Credit Losses by Portfolio Segment [Roll Forward]
Beginning balance	$ 79,942	$ 96,976	$ 87,121	$ 102,812
Charge-offs	(17,106)	(9,295)	(35,444)	(30,749)
Recoveries	1,159	1,243	5,536	5,874
Net charge-offs	(15,947)	(8,052)	(29,908)	(24,875)
Provision for loan and covered loan losses and other	10,727	4,290	17,509	15,277
Ending balance	74,722	93,214	74,722	93,214
Commercial, Industrial, And Agricultural
Allowance for Credit Losses by Portfolio Segment [Roll Forward]
Beginning balance	29,194	31,742	30,381	36,761
Charge-offs	(9,763)	(2,719)	(15,542)	(9,010)
Recoveries	716	521	3,135	3,183
Net charge-offs	(9,047)	(2,198)	(12,407)	(5,827)
Provision for loan and covered loan losses and other	10,458	2,452	12,631	1,062
Ending balance	30,605	31,996	30,605	31,996
Office Retail And Industrial
Allowance for Credit Losses by Portfolio Segment [Roll Forward]
Beginning balance	11,831	11,857	10,405	11,432
Charge-offs	(2,514)	(987)	(7,108)	(3,702)
Recoveries	55	31	403	68
Net charge-offs	(2,459)	(956)	(6,705)	(3,634)
Provision for loan and covered loan losses and other	265	938	5,937	4,041
Ending balance	9,637	11,839	9,637	11,839
Multi-Family
Allowance for Credit Losses by Portfolio Segment [Roll Forward]
Beginning balance	2,048	3,424	2,017	3,575
Charge-offs	(26)	(112)	(383)	(490)
Recoveries	0	0	3	35
Net charge-offs	(26)	(112)	(380)	(455)
Provision for loan and covered loan losses and other	(65)	(31)	320	161
Ending balance	1,957	3,281	1,957	3,281
Construction
Allowance for Credit Losses by Portfolio Segment [Roll Forward]
Beginning balance	4,885	4,170	6,316	5,242
Charge-offs	(157)	(470)	(1,052)	(1,885)
Recoveries	0	57	160	62
Net charge-offs	(157)	(413)	(892)	(1,823)
Provision for loan and covered loan losses and other	(3,130)	(100)	(3,826)	238
Ending balance	1,598	3,657	1,598	3,657
Other Commercial Real Estate
Allowance for Credit Losses by Portfolio Segment [Roll Forward]
Beginning balance	8,585	16,169	10,817	17,512
Charge-offs	(1,363)	(889)	(3,695)	(3,971)
Recoveries	108	253	341	1,614
Net charge-offs	(1,255)	(636)	(3,354)	(2,357)
Provision for loan and covered loan losses and other	189	(1,218)	56	(840)
Ending balance	7,519	14,315	7,519	14,315
Consumer
Allowance for Credit Losses by Portfolio Segment [Roll Forward]
Beginning balance	12,440	12,367	13,010	12,862
Charge-offs	(3,148)	(2,482)	(7,005)	(7,369)
Recoveries	150	374	502	894
Net charge-offs	(2,998)	(2,108)	(6,503)	(6,475)
Provision for loan and covered loan losses and other	3,699	2,425	6,634	6,297
Ending balance	13,141	12,684	13,141	12,684
Covered Loans
Allowance for Credit Losses by Portfolio Segment [Roll Forward]
Beginning balance	9,343	14,381	12,559	12,062
Charge-offs	(135)	(1,636)	(659)	(4,322)
Recoveries	130	7	992	18
Net charge-offs	(5)	(1,629)	333	(4,304)
Provision for loan and covered loan losses and other	(689)	304	(4,243)	5,298
Ending balance	8,649	13,056	8,649	13,056
Reserve for Unfunded Commitments
Allowance for Credit Losses by Portfolio Segment [Roll Forward]
Beginning balance	1,616	2,866	1,616	3,366
Charge-offs	0	0	0	0
Recoveries	0	0	0	0
Net charge-offs	0	0	0	0
Provision for loan and covered loan losses and other	0	(480)	0	(980)
Ending balance	$ 1,616	$ 2,386	$ 1,616	$ 2,386

XML

Fair Value (Details) - Carrying Value of Level 3 Securities Available-for-Sale (USD $) In Thousands, unless otherwise specified	3 Months Ended				9 Months Ended
	Sep. 30, 2014		Sep. 30, 2013		Sep. 30, 2014		Sep. 30, 2013
Rollforward of the Carrying Value of CDOs [Roll Forward]
Beginning balance	$ 18,436		$ 14,917		$ 18,309		$ 12,129
Change in other comprehensive (loss) income	(65)	[1]	2,079	[1]	1,571		4,867	[1]
Purchases, sales, issuances, settlements, and paydowns	(2)	[2]	0	[2]	(1,511)	[2]	0	[2]
Ending balance	18,369		16,996		18,369		16,996
Change in unrealized losses recognized in earnings related to securities still held at end of period	$ 0		$ 0		$ 0		$ 0

[1] Included in unrealized holding (losses) gains in the Consolidated Statements of Comprehensive Income.

[2] the nine months ended September 30, 2014, one CDO with a carrying value of $1.3 million was sold. In addition, one CDO with a carrying value of zero was sold during the nine months ended September 30, 2013

XML

Past Due Loans, Allowance For Credit Losses, Impaired Loans and TDRS (Details) - TDRs That Were Restructured (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014 loan	Sep. 30, 2013 loan	Sep. 30, 2014 loan	Sep. 30, 2013 loan
Financing Receivable, Modifications [Line Items]
Number of Loans	6	14	7	35
Pre- Modification Recorded Investment	$ 23,432	$ 2,875	$ 23,507	$ 20,102
Funds Disbursed	0	0	0	30
Interest and Escrow Capitalized	0	0	0	63
Charge-offs	0	0	0	0
Post- Modification Recorded Investment	23,432	2,875	23,507	20,195
Commercial And Industrial
Financing Receivable, Modifications [Line Items]
Number of Loans	5	3	5	7
Pre- Modification Recorded Investment	23,015	369	23,015	14,439
Funds Disbursed	0	0	0	0
Interest and Escrow Capitalized	0	0	0	2
Charge-offs	0	0	0	0
Post- Modification Recorded Investment	23,015	369	23,015	14,441
Office Retail And Industrial
Financing Receivable, Modifications [Line Items]
Number of Loans	1	2	1	6
Pre- Modification Recorded Investment	417	1,674	417	2,275
Funds Disbursed	0	0	0	30
Interest and Escrow Capitalized	0	0	0	0
Charge-offs	0	0	0	0
Post- Modification Recorded Investment	417	1,674	417	2,305
Multi-Family
Financing Receivable, Modifications [Line Items]
Number of Loans				5
Pre- Modification Recorded Investment				1,275
Funds Disbursed				0
Interest and Escrow Capitalized				57
Charge-offs				0
Post- Modification Recorded Investment				1,332
Construction
Financing Receivable, Modifications [Line Items]
Number of Loans				2
Pre- Modification Recorded Investment				508
Funds Disbursed				0
Interest and Escrow Capitalized				0
Charge-offs				0
Post- Modification Recorded Investment				508
Other Commercial Real Estate
Financing Receivable, Modifications [Line Items]
Number of Loans		1		5
Pre- Modification Recorded Investment		10		526
Funds Disbursed		0		0
Interest and Escrow Capitalized		0		0
Charge-offs		0		0
Post- Modification Recorded Investment		10		526
Home Equity Line of Credit
Financing Receivable, Modifications [Line Items]
Number of Loans		8	1	9
Pre- Modification Recorded Investment		822	75	947
Funds Disbursed		0	0	0
Interest and Escrow Capitalized		0	0	0
Charge-offs		0	0	0
Post- Modification Recorded Investment		822	75	947
1-4 family mortgages
Financing Receivable, Modifications [Line Items]
Number of Loans				1
Pre- Modification Recorded Investment				132
Funds Disbursed				0
Interest and Escrow Capitalized				4
Charge-offs				0
Post- Modification Recorded Investment				$ 136

XML

Past Due Loans, Allowance For Credit Losses, Impaired Loans and TDRS (Details) (USD $)	9 Months Ended		12 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013
Financing Receivable, Modifications [Line Items]
Accruing TDRs	$ 5,449,000		$ 23,770,000
Valuation Allowance On Troubled Debt Restructured Loans	2,625,000		2,000,000
TDRs Returned to Performing Status	18,800,000	5,000,000
Commitments to lend additional funds to borrowers with TDRs	0		0
Special Mention and Substandard Loans
Financing Receivable, Modifications [Line Items]
Accruing TDRs	$ 3,500,000		$ 2,800,000

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Acquisitions Additional Information (Details) (USD $) In Millions, unless otherwise specified	0 Months Ended	3 Months Ended	9 Months Ended			0 Months Ended
	Aug. 08, 2014 Banco Popular North America	Sep. 30, 2014 Banco Popular North America	Sep. 30, 2014 Banco Popular North America	Aug. 08, 2014 Banco Popular North America retail_branch	Sep. 26, 2014 National Machine Tool Financial Corporation	Jul. 07, 2014 Great Lakes Financial Resources Inc	Jul. 07, 2014 Great Lakes Financial Resources Inc location
Business Acquisition [Line Items]
Expenses related to acquisition		$ 2.2	$ 2.8
Business combination, other noncurrent assets					4.4
Business combination, number of retail branches acquired				12
Payments to acquire business	19.0
Business combination, number of locations acquired							8
Deposits to be acquired							490
Loans to be acquired							234
Transaction value of announced acquisition						$ 58.0

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Past Due Loans, Allowance For Credit Losses, Impaired Loans and TDRS Past Due Loans, Allowance For Credit Losses, Impaired Loans and TDRS - TDR Rollforward (Details) (USD $)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013
Troubled Debt Restructuring Activity Rollforward [Roll Forward]
Beginning balance			$ 27,853,000
Additions	23,432,000	2,875,000	23,507,000	20,195,000
Returned to performing status			0		0
Ending balance	22,426,000	29,066,000	22,426,000	29,066,000	27,853,000
Accruing
Troubled Debt Restructuring Activity Rollforward [Roll Forward]
Beginning balance	5,697,000	8,287,000	23,770,000	6,867,000	6,867,000
Additions	417,000	1,128,000	492,000	4,606,000
Net payments received	(109,000)	(248,000)	(1,219,000)	(415,000)
Returned to performing status	0	0	(18,821,000)	(5,037,000)
Net transfers from non-accrual	(556,000)	15,162,000	1,227,000	18,308,000
Ending balance	5,449,000	24,329,000	5,449,000	24,329,000
Nonaccrual
Troubled Debt Restructuring Activity Rollforward [Roll Forward]
Beginning balance	1,700,000	18,450,000	4,083,000	10,924,000	10,924,000
Additions	23,015,000	1,747,000	23,015,000	15,589,000
Net payments received	(135,000)	(201,000)	(292,000)	(735,000)
Charge-offs	(8,159,000)	(62,000)	(8,345,000)	(1,850,000)
Transfers to OREO	0	(35,000)	(257,000)	(77,000)
Loans sold	0	0	0	(806,000)
Net transfers to accruing	556,000	(15,162,000)	(1,227,000)	(18,308,000)
Ending balance	$ 16,977,000	$ 4,737,000	$ 16,977,000	$ 4,737,000

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Fair Value (Details) - Assets Measured At Fair Value On A Non-Recurring Basis (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014		Dec. 31, 2013
Level 1
Fair Value (Details) - Assets Measured At Fair Value On A Non-Recurring Basis [Line Items]
Collateral-dependent impaired loans	$ 0	[1]	$ 0	[1]
OREO	0	[2]	0	[2]
Loans held-for-sale	0	[3]	0	[3]
Assets held-for-sale	0	[4]	0	[4]
Level 2
Fair Value (Details) - Assets Measured At Fair Value On A Non-Recurring Basis [Line Items]
Collateral-dependent impaired loans	0	[1]	0	[1]
OREO	0	[2]	0	[2]
Loans held-for-sale	0	[3]	0	[3]
Assets held-for-sale	0	[4]	0	[4]
Level 3
Fair Value (Details) - Assets Measured At Fair Value On A Non-Recurring Basis [Line Items]
Collateral-dependent impaired loans	18,754	[1]	13,103	[1]
OREO	17,580	[2]	13,347	[2]
Loans held-for-sale	24,504	[3]	4,739	[3]
Assets held-for-sale	$ 2,026	[4]	$ 4,027	[4]

[1] Includes impaired loans with charge-offs and impaired loans with a specific reserve during the periods presented.

[2] Includes OREO and covered OREO with fair value adjustments subsequent to initial transfer that occurred during the periods presented.

[3] Included in other assets in the Consolidated Statements of Financial Condition.

[4] Included in premises, furniture, and equipment in the Consolidated Statements of Financial Condition.

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Acquired Loans (Tables)

9 Months Ended

Sep. 30, 2014

Acquired Loans [Abstract]

Acquired Loans

The following table presents PCI and Non-PCI, loans as of September 30, 2014 and December 31, 2013.

Acquired and Covered Loans

(Dollar amounts in thousands)

	September 30, 2014						December 31, 2013
	PCI		Non-PCI		Total		PCI		Non-PCI		Total
Acquired loans	$	20,937	$	539,454	$	560,391	$	15,608	$	17,024	$	32,632
Covered loans	64,015		26,860		90,875		103,525		30,830		134,355
Total acquired and covered loans	$	84,952	$	566,314	$	651,266	$	119,133	$	47,854	$	166,987

FDIC Indemnification Asset Roll Forward

A rollforward of the carrying value of the FDIC indemnification asset for the quarters and nine months ended September 30, 2014 and 2013 is presented in the following table.

Changes in the FDIC Indemnification Asset

(Dollar amounts in thousands)

	Quarters Ended   September 30,						Nine Months Ended   September 30,
	2014			2013			2014			2013
Beginning balance	$	10,276		$	23,158		$	16,585		$	37,051
Amortization	(650		)	(116		)	(2,784		)	(2,348		)
Change in expected reimbursements from the FDIC for changes   in expected credit losses	(857		)	(999		)	(325		)	(3,453		)
Payments received from the FDIC	(70		)	(3,965		)	(4,777		)	(13,172		)
Ending balance	$	8,699		$	18,078		$	8,699		$	18,078

Schedule Of Changes In Accretable Yield For Purchased Credit Impaired Loans

Changes in the accretable yield for acquired and covered PCI loans were as follows.

Changes in Accretable Yield

(Dollar amounts in thousands)

	Quarters Ended   September 30,						Nine Months Ended   September 30,
	2014			2013			2014			2013
Beginning balances	$	35,152		$	47,104		$	36,792		$	51,498
Accretion	(3,346		)	(3,410		)	(10,277		)	(11,752		)
Additions	1,265			—			1,265			—
Other (1)	(5,215		)	(3,128		)	76			820
Ending balance	$	27,856		$	40,566		$	27,856		$	40,566

⁽¹⁾  Decreases result from the resolution of certain loans occurring earlier than anticipated while increases represent an increase in the expected future cash flows to be collected over the remaining estimated life of the underlying portfolio.

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Past Due Loans, Allowance For Credit Losses, Impaired Loans and TDRS (Details) - Impaired Loans Individually Evaluated by Class (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Commercial And Industrial
Financing Receivable, Impaired [Line Items]
Recorded investment in loans with no specific reserve	$ 2,524	$ 10,047
Recorded investment in loans with a specific reserve	16,023	3,131
Unpaid Principal Balance	40,067	25,887
Specific Reserve	2,968	4,046
Agricultural
Financing Receivable, Impaired [Line Items]
Recorded investment in loans with no specific reserve	0	0
Recorded investment in loans with a specific reserve	0	0
Unpaid Principal Balance	0	0
Specific Reserve	0	0
Office Retail And Industrial
Financing Receivable, Impaired [Line Items]
Recorded investment in loans with no specific reserve	16,140	23,872
Recorded investment in loans with a specific reserve	0	2,476
Unpaid Principal Balance	25,614	35,868
Specific Reserve	0	214
Multi-Family
Financing Receivable, Impaired [Line Items]
Recorded investment in loans with no specific reserve	1,141	1,098
Recorded investment in loans with a specific reserve	0	198
Unpaid Principal Balance	1,268	1,621
Specific Reserve	0	18
Construction
Financing Receivable, Impaired [Line Items]
Recorded investment in loans with no specific reserve	6,859	4,586
Recorded investment in loans with a specific reserve	0	1,126
Unpaid Principal Balance	8,412	10,037
Specific Reserve	0	178
Other Commercial Real Estate
Financing Receivable, Impaired [Line Items]
Recorded investment in loans with no specific reserve	4,719	7,553
Recorded investment in loans with a specific reserve	0	1,745
Unpaid Principal Balance	6,979	11,335
Specific Reserve	0	704
Total Commercial Real Estate
Financing Receivable, Impaired [Line Items]
Recorded investment in loans with no specific reserve	28,859	37,109
Recorded investment in loans with a specific reserve	0	5,545
Unpaid Principal Balance	42,273	58,861
Specific Reserve	0	1,114
Total Impaired Loans Individually Evaluated For Impairment
Financing Receivable, Impaired [Line Items]
Recorded investment in loans with no specific reserve	31,383	47,156
Recorded investment in loans with a specific reserve	16,023	8,676
Unpaid Principal Balance	82,340	84,748
Specific Reserve	$ 2,968	$ 5,160

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Loans Sold (Details) (One-to-Four Family Mortgage Loan, USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
One-to-Four Family Mortgage Loan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Proceeds from sales	$ 32,611	$ 37,060	$ 117,549	$ 122,067
Loans originated with intent to sell	26,384	32,485	62,319	32,807
Loans held-for-investment	5,302	3,592	52,384	85,271
Total book value of loans sold	31,686	36,077	114,703	118,078
Net gains on sales of 1-4 family mortgages	$ 925	$ 983	$ 2,846	$ 3,989

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Securities (Details) - Remaining Contractual Maturity of Securities (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Available-for-sale Securities, Amortized Cost Basis [Abstract]
One year or less	$ 65,157
After one year to five years	80,964
After five years to ten years	196,380
After ten years	130,648
Securities that do not have a single contractual maturity	544,792
Total	1,017,941	1,147,114
Available-for-sale Securities, Fair Value [Abstract]
One year or less	63,042
After one year to five years	78,335
After five years to ten years	190,004
After ten years	126,406
Securities that do not have a single contractual maturity	539,633
Total securities available-for-sale	997,420	1,112,725
Held-to-maturity Securities, Amortized Cost [Abstract]
One year or less	3,425
After one year to five years	8,505
After five years to ten years	5,703
After ten years	9,143
Securities that do not have a single contractual maturity	0
Total	26,776	44,322
Held-to-maturity Securities, Fair Value [Abstract]
One year or less	3,552
After one year to five years	8,819
After five years to ten years	5,914
After ten years	9,481
Securities that do not have a single contractual maturity	0
Total	$ 27,766	$ 43,387

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Past Due Loans, Allowance For Credit Losses, Impaired Loans and TDRS (Details) - Credit Quality Indicators by Class, Excluding Covered Loans (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014		Dec. 31, 2013
Financing Receivable, Recorded Investment [Line Items]
Credit Quality Indicators by Class	$ 825,046		$ 747,839
Commercial And Industrial | Pass
Financing Receivable, Recorded Investment [Line Items]
Credit Quality Indicators by Class	2,094,453		1,780,194
Commercial And Industrial | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Credit Quality Indicators by Class	66,429	[1],[2]	23,806	[1],[2]
Commercial And Industrial | Substandard Accrual
Financing Receivable, Recorded Investment [Line Items]
Credit Quality Indicators by Class	27,588	[1],[3]	14,871	[1],[3]
Commercial And Industrial | Substandard Non-Accrual
Financing Receivable, Recorded Investment [Line Items]
Credit Quality Indicators by Class	19,696	[4]	11,767	[4]
Commercial And Industrial | Total
Financing Receivable, Recorded Investment [Line Items]
Credit Quality Indicators by Class	2,208,166		1,830,638
Agricultural | Pass
Financing Receivable, Recorded Investment [Line Items]
Credit Quality Indicators by Class	346,851		320,839
Agricultural | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Credit Quality Indicators by Class	299	[1],[2]	344	[1],[2]
Agricultural | Substandard Accrual
Financing Receivable, Recorded Investment [Line Items]
Credit Quality Indicators by Class	0	[1],[3]	0	[1],[3]
Agricultural | Substandard Non-Accrual
Financing Receivable, Recorded Investment [Line Items]
Credit Quality Indicators by Class	361	[4]	519	[4]
Agricultural | Total
Financing Receivable, Recorded Investment [Line Items]
Credit Quality Indicators by Class	347,511		321,702
Office Retail And Industrial | Pass
Financing Receivable, Recorded Investment [Line Items]
Credit Quality Indicators by Class	1,343,833		1,284,394
Office Retail And Industrial | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Credit Quality Indicators by Class	28,586	[1],[2]	28,677	[1],[2]
Office Retail And Industrial | Substandard Accrual
Financing Receivable, Recorded Investment [Line Items]
Credit Quality Indicators by Class	33,140	[1],[3]	23,538	[1],[3]
Office Retail And Industrial | Substandard Non-Accrual
Financing Receivable, Recorded Investment [Line Items]
Credit Quality Indicators by Class	16,963	[4]	17,076	[4]
Office Retail And Industrial | Total
Financing Receivable, Recorded Investment [Line Items]
Credit Quality Indicators by Class	1,422,522		1,353,685
Multi-Family | Pass
Financing Receivable, Recorded Investment [Line Items]
Credit Quality Indicators by Class	545,419		326,901
Multi-Family | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Credit Quality Indicators by Class	5,916	[1],[2]	3,214	[1],[2]
Multi-Family | Substandard Accrual
Financing Receivable, Recorded Investment [Line Items]
Credit Quality Indicators by Class	6,818	[1],[3]	910	[1],[3]
Multi-Family | Substandard Non-Accrual
Financing Receivable, Recorded Investment [Line Items]
Credit Quality Indicators by Class	1,536	[4]	1,848	[4]
Multi-Family | Total
Financing Receivable, Recorded Investment [Line Items]
Credit Quality Indicators by Class	559,689		332,873
Construction | Pass
Financing Receivable, Recorded Investment [Line Items]
Credit Quality Indicators by Class	162,527		153,949
Construction | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Credit Quality Indicators by Class	7,229	[1],[2]	8,309	[1],[2]
Construction | Substandard Accrual
Financing Receivable, Recorded Investment [Line Items]
Credit Quality Indicators by Class	16,607	[1],[3]	17,642	[1],[3]
Construction | Substandard Non-Accrual
Financing Receivable, Recorded Investment [Line Items]
Credit Quality Indicators by Class	7,082	[4]	6,297	[4]
Construction | Total
Financing Receivable, Recorded Investment [Line Items]
Credit Quality Indicators by Class	193,445		186,197
Other Commercial Real Estate | Pass
Financing Receivable, Recorded Investment [Line Items]
Credit Quality Indicators by Class	816,679		761,465
Other Commercial Real Estate | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Credit Quality Indicators by Class	22,824	[1],[2]	14,877	[1],[2]
Other Commercial Real Estate | Substandard Accrual
Financing Receivable, Recorded Investment [Line Items]
Credit Quality Indicators by Class	24,410	[1],[3]	22,576	[1],[3]
Other Commercial Real Estate | Substandard Non-Accrual
Financing Receivable, Recorded Investment [Line Items]
Credit Quality Indicators by Class	7,912	[4]	8,153	[4]
Other Commercial Real Estate | Total
Financing Receivable, Recorded Investment [Line Items]
Credit Quality Indicators by Class	871,825		807,071
Total Commercial Real Estate | Pass
Financing Receivable, Recorded Investment [Line Items]
Credit Quality Indicators by Class	2,868,458		2,526,709
Total Commercial Real Estate | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Credit Quality Indicators by Class	64,555	[1],[2]	55,077	[1],[2]
Total Commercial Real Estate | Substandard Accrual
Financing Receivable, Recorded Investment [Line Items]
Credit Quality Indicators by Class	80,975	[1],[3]	64,666	[1],[3]
Total Commercial Real Estate | Substandard Non-Accrual
Financing Receivable, Recorded Investment [Line Items]
Credit Quality Indicators by Class	33,493	[4]	33,374	[4]
Total Commercial Real Estate | Total
Financing Receivable, Recorded Investment [Line Items]
Credit Quality Indicators by Class	3,047,481		2,679,826
Total Corporate Loans | Pass
Financing Receivable, Recorded Investment [Line Items]
Credit Quality Indicators by Class	5,309,762		4,627,742
Total Corporate Loans | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Credit Quality Indicators by Class	131,283	[1],[2]	79,227	[1],[2]
Total Corporate Loans | Substandard Accrual
Financing Receivable, Recorded Investment [Line Items]
Credit Quality Indicators by Class	108,563	[1],[3]	79,537	[1],[3]
Total Corporate Loans | Substandard Non-Accrual
Financing Receivable, Recorded Investment [Line Items]
Credit Quality Indicators by Class	53,550	[4]	45,660	[4]
Total Corporate Loans | Total
Financing Receivable, Recorded Investment [Line Items]
Credit Quality Indicators by Class	$ 5,603,158		$ 4,832,166

[1] Total special mention and substandard loans includes accruing TDRs of $3.5 million as of September 30, 2014 and $2.8 million as of December 31, 2013.

[2] Loans categorized as special mention exhibit potential weaknesses that require the close attention of management since these potential weaknesses may result in the deterioration of repayment prospects in the future.

[3] Loans categorized as substandard exhibit a well-defined weakness or weaknesses that may jeopardize the liquidation of the debt. These loans continue to accrue interest because they are well secured and collection of principal and interest is expected within a reasonable time.

[4] Loans categorized as non-accrual exhibit a well-defined weakness or weaknesses that may jeopardize the liquidation of the debt or result in a loss if the deficiencies are not corrected.

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Fair Value (Details) (USD $)	9 Months Ended
	Sep. 30, 2014 obligation	Sep. 30, 2013 obligation	Dec. 31, 2013
Fair Value (Details) [Line Items]
Assumed Loss Given Default Rate For Banks Thrifts And Other Depository Institutions (percent)	90.00%
Assumed Loss Given Default Rate for Insurance Co (percent)	85.00%
Assumed Loss Given Default Rate For Issuers That Defaulted (percent)	100.00%
Number Of CDOs Sold	1	1
Carrying Value Of CDO Sold	$ 1,300,000	$ 0
Total Amount of Loans Being Serviced For The Benefit Of Others At the End of The Period (in Millions)	$ 218,900,000		$ 214,500,000
Minimum
Fair Value (Details) [Line Items]
Appraisal Adjustment (percent)	0.00%
Maximum
Fair Value (Details) [Line Items]
Appraisal Adjustment (percent)	20.00%

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Derivative Financial Instruments and Hedging Activities (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014 swap	Sep. 30, 2013	Sep. 30, 2014 swap	Sep. 30, 2013
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Derivative notional amount, cash flow hedge, received fixed pay variable interest rate swap	$ 325,000,000		$ 325,000,000
Derivative notional amount, cash flow hedge, forward starting interest rate swap	325,000,000		325,000,000
Interest rate cash flow hedge gain (loss) to be reclassified during the next 12 months, net	4,000,000		4,000,000
Derivative Transaction Fees	$ 874,000	$ 1,432,000	$ 1,300,000	$ 2,000,000
Derivative, number of instruments held	4		4

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Past Due Loans, Allowance For Credit Losses, Impaired Loans and TDRS (Details) - Aging Analysis of Past Due Loans and Non-Performing Loans by Class (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	$ 6,436,799	$ 5,598,612
30-89 Days Past Due	20,002	24,770
90 Days or More Past Due	62,278	90,978
Total Past Due	82,280	115,748
Total Loans	6,519,079	5,714,360
Non- accrual Loans	75,433	80,740
90 Days Past Due Loans, Still Accruing Interest	13,093	21,789
Commercial And Industrial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	2,197,785	1,814,660
30-89 Days Past Due	6,216	6,872
90 Days or More Past Due	4,165	9,106
Total Past Due	10,381	15,978
Total Loans	2,208,166	1,830,638
Non- accrual Loans	19,696	11,767
90 Days Past Due Loans, Still Accruing Interest	1,256	393
Agricultural
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	347,179	321,156
30-89 Days Past Due	0	134
90 Days or More Past Due	332	412
Total Past Due	332	546
Total Loans	347,511	321,702
Non- accrual Loans	361	519
90 Days Past Due Loans, Still Accruing Interest	0	0
Office Retail And Industrial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	1,401,990	1,335,027
30-89 Days Past Due	1,842	2,620
90 Days or More Past Due	18,690	16,038
Total Past Due	20,532	18,658
Total Loans	1,422,522	1,353,685
Non- accrual Loans	16,963	17,076
90 Days Past Due Loans, Still Accruing Interest	3,840	1,315
Multi-Family
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	557,852	330,960
30-89 Days Past Due	641	318
90 Days or More Past Due	1,196	1,595
Total Past Due	1,837	1,913
Total Loans	559,689	332,873
Non- accrual Loans	1,536	1,848
90 Days Past Due Loans, Still Accruing Interest	0	0
Construction
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	186,363	180,083
30-89 Days Past Due	0	23
90 Days or More Past Due	7,082	6,091
Total Past Due	7,082	6,114
Total Loans	193,445	186,197
Non- accrual Loans	7,082	6,297
90 Days Past Due Loans, Still Accruing Interest	0	0
Other Commercial Real Estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	861,061	795,462
30-89 Days Past Due	4,461	5,365
90 Days or More Past Due	6,303	6,244
Total Past Due	10,764	11,609
Total Loans	871,825	807,071
Non- accrual Loans	7,912	8,153
90 Days Past Due Loans, Still Accruing Interest	150	258
Total Commercial Real Estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	3,007,266	2,641,532
30-89 Days Past Due	6,944	8,326
90 Days or More Past Due	33,271	29,968
Total Past Due	40,215	38,294
Total Loans	3,047,481	2,679,826
Non- accrual Loans	33,493	33,374
90 Days Past Due Loans, Still Accruing Interest	3,990	1,573
Total Corporate Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	5,552,230	4,777,348
30-89 Days Past Due	13,160	15,332
90 Days or More Past Due	37,768	39,486
Total Past Due	50,928	54,818
Total Loans	5,603,158	4,832,166
Non- accrual Loans	53,550	45,660
90 Days Past Due Loans, Still Accruing Interest	5,246	1,966
Home Equity Line of Credit
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	509,530	415,791
30-89 Days Past Due	3,525	4,830
90 Days or More Past Due	4,391	6,399
Total Past Due	7,916	11,229
Total Loans	517,446	427,020
Non- accrual Loans	5,834	6,864
90 Days Past Due Loans, Still Accruing Interest	587	1,102
1-4 family mortgages
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	234,672	268,912
30-89 Days Past Due	1,935	2,046
90 Days or More Past Due	1,565	5,034
Total Past Due	3,500	7,080
Total Loans	238,172	275,992
Non- accrual Loans	3,235	5,198
90 Days Past Due Loans, Still Accruing Interest	126	548
Installment Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	66,997	42,350
30-89 Days Past Due	428	330
90 Days or More Past Due	2,003	2,147
Total Past Due	2,431	2,477
Total Loans	69,428	44,827
Non- accrual Loans	1,909	2,076
90 Days Past Due Loans, Still Accruing Interest	103	92
Total Consumer Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	811,199	727,053
30-89 Days Past Due	5,888	7,206
90 Days or More Past Due	7,959	13,580
Total Past Due	13,847	20,786
Total Loans	825,046	747,839
Non- accrual Loans	10,978	14,138
90 Days Past Due Loans, Still Accruing Interest	816	1,742
Total Loans Excluding Covered Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	6,363,429	5,504,401
30-89 Days Past Due	19,048	22,538
90 Days or More Past Due	45,727	53,066
Total Past Due	64,775	75,604
Total Loans	6,428,204	5,580,005
Non- accrual Loans	64,528	59,798
90 Days Past Due Loans, Still Accruing Interest	6,062	3,708
Covered Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	73,370	94,211
30-89 Days Past Due	954	2,232
90 Days or More Past Due	16,551	37,912
Total Past Due	17,505	40,144
Total Loans	90,875	134,355
Non- accrual Loans	10,905	20,942
90 Days Past Due Loans, Still Accruing Interest	$ 7,031	$ 18,081

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2014

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation – The accompanying unaudited condensed consolidated interim financial statements of First Midwest Bancorp, Inc. (the “Company”), a Delaware corporation, were prepared in accordance with the rules and regulations of the Securities and Exchange Commission ("SEC") for quarterly reports on Form 10-Q and reflect all adjustments that management deems necessary for the fair presentation of the financial position and results of operations for the periods presented. The results of operations for the quarter and nine months ended September 30, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014.

The accounting and reporting policies of the Company and its subsidiaries conform to U.S. generally accepted accounting principles (“GAAP”) and general practices within the banking industry. The accompanying quarterly statements do not include certain information and footnote disclosures required by GAAP for complete annual financial statements. Therefore, these financial statements should be read in conjunction with the Company’s 2013 Annual Report on Form 10-K (“2013 10-K”). The Company uses the accrual basis of accounting for financial reporting purposes. Certain reclassifications were made to prior year amounts to conform to the current year presentation.

Principles of Consolidation – The accompanying condensed consolidated financial statements include the financial position and results of operations of the Company and its subsidiaries after elimination of all significant intercompany accounts and transactions. Assets held in a fiduciary or agency capacity are not assets of the Company or its subsidiaries and are not included in the condensed consolidated financial statements.

Use of Estimates – The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Although these estimates and assumptions are based on the best available information, actual results could differ from those estimates.

The accounting policies related to business combinations, loans, the allowance for credit losses, the FDIC indemnification asset, and derivative financial instruments are presented below. For a summary of all other significant accounting policies, please refer to Note 1, “Summary of Significant Accounting Policies,” in the Company’s 2013 10-K.

Business Combinations – Business combinations are accounted for under the acquisition method of accounting. Assets acquired and liabilities assumed are recorded at their estimated fair values as of the date of acquisition, with any excess of the purchase price of the acquisition over the fair value of the net tangible and intangible assets acquired recorded as goodwill. Alternatively, a gain is recorded if the fair value of assets purchased exceeds the fair value of liabilities assumed and consideration paid. The results of operations of the acquired business are included in the Consolidated Statements of Income from the effective date of the acquisition.

Loans – Loans held-for-investment are loans that the Company intends to hold until they are paid in full and are carried at the principal amount outstanding, including certain net deferred loan origination fees. Interest income on loans is accrued based on principal amounts outstanding. Loan origination fees, commitment fees, and certain direct loan origination costs are deferred, and the net amount is amortized as a yield adjustment over the contractual life of the related loans or commitments and included in interest income. Fees related to standby letters of credit are amortized into fee income over the contractual life of the commitment. Other credit-related fees are recognized as fee income when earned. Loans held-for-sale are carried at the lower of aggregate cost or fair value and included in other assets in the Consolidated Statements of Financial Condition.

Acquired and Covered Loans - Acquired loans consist primarily of loans that were acquired in business combinations. Covered loans consist of loans acquired by the Company in FDIC-assisted transactions, the majority of which are covered by loss share agreements with the FDIC (the “FDIC Agreements”), under which the FDIC reimburses the Company for the majority of the losses and eligible expenses related to these assets. No allowance for credit losses is recorded on acquired and covered loans at the acquisition date since business combination accounting requires that they are recorded at fair value.

Acquired and covered loans are separated into (i) non-purchased credit impaired ("Non-PCI") and (ii) purchased credit impaired ("PCI") loans. Non-PCI loans include loans that did not have evidence of credit deterioration since origination. PCI loans include loans that had evidence of credit deterioration since origination and for which it was probable at acquisition that the Company would not collect all contractually required principal and interest payments. Evidence of credit deterioration was evaluated using various indicators, such as past due and non-accrual status. Other key considerations included past performance of the institutions' credit underwriting standards, completeness and accuracy of credit files, maintenance of risk ratings, and age of appraisals. Leases and revolving loans do not qualify to be accounted for as PCI loans.

The acquisition adjustment related to Non-PCI loans is amortized into interest income over the contractual life of the related loans. As the acquisition adjustment is accreted into income over future periods, an allowance for credit losses will be established as necessary to reflect credit deterioration.

PCI loans are accounted for prospectively based on estimates of expected future cash flows. To estimate the fair value, the Company generally aggregates purchased consumer loans and certain smaller balance commercial loans into pools of loans with common risk characteristics, such as delinquency status, credit score, and internal risk rating. The fair values of larger balance commercial loans are estimated on an individual basis. Expected future cash flows in excess of the fair value of loans at the purchase date (“accretable yield”) are recorded as interest income over the life of the loans if the timing and amount of the expected future cash flows can be reasonably estimated. The non-accretable yield represents the difference between contractually required payments and the expected future cash flows determined at acquisition. Subsequent increases in expected future cash flows are recognized as interest income prospectively. The present value of any decreases in expected future cash flows is recognized by recording a charge-off through the allowance for loan and covered loan losses or establishing an allowance for loan and covered loan losses.

Non-accrual Loans– Generally, corporate loans are placed on non-accrual status (i) when either principal or interest payments become 90 days or more past due unless the loan is sufficiently collateralized such that full repayment of both principal and interest is expected and is in the process of collection within a reasonable period or (ii) when an individual analysis of a borrower’s creditworthiness warrants a downgrade to non-accrual regardless of past due status. When a loan is placed on non-accrual status, unpaid interest credited to income in the current year is reversed, and unpaid interest accrued in prior years is charged against the allowance for loan losses. After the loan is placed on non-accrual, all debt service payments are applied to the principal on the loan. Future interest income may only be recorded on a cash basis after recovery of principal is reasonably assured. Non-accrual loans are returned to accrual status when the financial position of the borrower and other relevant factors indicate that the Company will collect all principal and interest.

Commercial loans and loans secured by real estate are charged-off when deemed uncollectible. A loss is recorded if the net realizable value of the underlying collateral is less than the outstanding principal and interest. Consumer loans that are not secured by real estate are subject to mandatory charge-off at a specified delinquency date and are usually not classified as non-accrual prior to being charged-off. Closed-end consumer loans, which include installment, automobile, and single payment loans, are usually charged-off no later than the end of the month in which the loan becomes 120 days past due.

PCI loans are generally considered accruing loans unless reasonable estimates of the timing and amount of expected future cash flows cannot be determined. Loans without reasonable future cash flow estimates are classified as non-accrual loans, and interest income is not recognized on those loans until the timing and amount of the expected future cash flows can be reasonably determined.

Troubled Debt Restructurings (“TDRs”) – A restructuring is considered a TDR when (i) the borrower is experiencing financial difficulties and (ii) the creditor grants a concession, such as forgiveness of principal, reduction of the interest rate, changes in payments, or extension of the maturity date. Loans are not classified as TDRs when the modification is short-term or results in an insignificant delay in payments. The Company’s TDRs are determined on a case-by-case basis.

The Company does not accrue interest on a TDR unless it believes collection of all principal and interest under the modified terms is reasonably assured. For a TDR to begin accruing interest, the borrower must demonstrate both some level of past performance and the future capacity to perform under the modified terms. Generally, six months of consecutive payment performance under the restructured terms is required before a TDR is returned to accrual status. However, the period could vary depending on the individual facts and circumstances of the loan. An evaluation of the borrower’s current creditworthiness is used to assess the borrower’s capacity to repay the loan under the modified terms. This evaluation includes an estimate of expected future cash flows, evidence of strong financial position, and estimates of the value of collateral, if applicable. For TDRs to be removed from TDR status in the calendar year after the restructuring, the loans must (i) have an interest rate and terms that reflect market conditions at the time of restructuring, and (ii) be in compliance with the modified terms. If the loan was restructured at below market rates and terms, it continues to be separately reported as restructured until it is paid in full or charged-off.

Impaired Loans – Impaired loans consist of corporate non-accrual loans and TDRs.

A loan is considered impaired when it is probable that the Company will not collect all contractual principal and interest. With the exception of accruing TDRs, impaired loans are classified as non-accrual and are exclusive of smaller homogeneous loans, such as home equity, 1-4 family mortgages, and installment loans. Impaired loans with balances under a specified threshold are not individually evaluated for impairment. For all other impaired loans, impairment is measured by comparing the estimated value of the loan to the recorded book value. The value of collateral-dependent loans is based on the fair value of the underlying collateral, less costs to sell. The value of other loans is measured using the present value of expected future cash flows discounted at the loan’s initial effective interest rate.

90-Days Past Due Loans –The Company’s accrual of interest on loans is discontinued at the time the loan is 90 days past due unless the credit is sufficiently collateralized and in the process of renewal or collection.

Allowance for Credit Losses – The allowance for credit losses is comprised of the allowance for loan losses, the allowance for covered loan losses, and the reserve for unfunded commitments, and is maintained by management at a level believed adequate to absorb estimated losses inherent in the existing loan portfolio. Determination of the allowance for credit losses is subjective since it requires significant estimates and management judgment, including the amounts and timing of expected future cash flows on impaired loans, estimated losses on pools of homogeneous loans, consideration of current economic trends, and other factors.

Loans deemed to be uncollectible are charged-off against the allowance for loan and covered loan losses, while recoveries of amounts previously charged-off are credited to the allowance for loan and covered loan losses. Additions to the allowance for loan and covered loan losses are charged to expense through the provision for loan and covered loan losses. The amount of provision depends on a number of factors, including net charge-off levels, loan growth, changes in the composition of the loan portfolio, and the Company’s assessment of the allowance for loan and covered loan losses based on the methodology discussed below.

Allowance for Loan Losses– The allowance for loan losses consists of (i) specific reserves for individual loans where the recorded investment exceeds the value, (ii) an allowance based on a loss migration analysis that uses historical credit loss experience for each loan category, and (iii) an allowance based on other internal and external qualitative factors.

The specific reserves component of the allowance for loan losses is based on a periodic analysis of impaired loans exceeding a fixed dollar amount. If the value of an impaired loan is less than the recorded book value, the Company either establishes a valuation allowance (i.e., a specific reserve) equal to the excess of the book value over the value of the loan as a component of the allowance for loan losses or charges off the amount if it is a confirmed loss.

The general reserve component is based on a loss migration analysis, which examines actual loss experience by loan category for a rolling 8-quarter period and the related internal risk rating for corporate loans. The loss migration analysis is updated quarterly primarily using actual loss experience. This component is then adjusted based on management’s consideration of many internal and external qualitative factors, including:

• Changes in the composition of the loan portfolio, trends in the volume of loans, and trends in delinquent and non-accrual loans that could indicate that historical trends do not reflect current conditions.

• Changes in credit policies and procedures, such as underwriting standards and collection, charge-off, and recovery practices.

• Changes in the experience, ability, and depth of credit management and other relevant staff.

• Changes in the quality of the Company’s loan review system and Board of Directors oversight.

• The effect of any concentration of credit and changes in the level of concentrations, such as loan type or risk rating.

• Changes in the value of the underlying collateral for collateral-dependent loans.

• Changes in the national and local economy that affect the collectability of various segments of the portfolio.

• The effect of other external factors, such as competition and legal and regulatory requirements, on the Company’s loan portfolio.

Allowance for Covered Loan Losses– The Company’s allowance for covered loan losses reflects the difference between the carrying value and the expected future cash flows of the covered PCI loans. On a periodic basis, the adequacy of this allowance is determined through a re-estimation of expected future cash flows on all of the outstanding covered PCI loans using either a probability of default/loss given default (“PD/LGD”) methodology or a specific review methodology. The PD/LGD model is a loss model that estimates expected future cash flows using a probability of default curve and loss given default estimates.

Reserve for Unfunded Commitments– The Company also maintains a reserve for unfunded commitments, including letters of credit, for the risk of loss inherent in these arrangements. The reserve for unfunded commitments is estimated using the loss migration analysis from the allowance for loan losses, adjusted for probabilities of future funding requirements. The reserve for unfunded commitments is included in other liabilities in the Consolidated Statements of Financial Condition.

The establishment of the allowance for credit losses involves a high degree of judgment given the difficulty of assessing the factors impacting loan repayment and estimating the timing and amount of losses. While management utilizes its best judgment and information available, the adequacy of the allowance for credit losses depends on a variety of factors beyond the Company’s control, including the performance of its loan portfolio, the economy, changes in interest rates and property values, and the interpretation of loan risk classifications by regulatory authorities.

FDIC Indemnification Asset – The majority of loans and OREO acquired through FDIC-assisted transactions are covered by the FDIC Agreements. The FDIC indemnification asset represents the present value of future expected reimbursements from the FDIC. Since the indemnified items are covered loans and covered OREO, which are initially measured at fair value, the FDIC indemnification asset is also initially measured at fair value by discounting the expected future cash flows to be received from the FDIC. These expected future cash flows are estimated by multiplying estimated losses on covered PCI loans and covered OREO by the reimbursement rates in the FDIC Agreements.

The balance of the FDIC indemnification asset is adjusted periodically to reflect changes in expected future cash flows. Decreases in estimated reimbursements from the FDIC are recorded prospectively through amortization and increases in estimated reimbursements from the FDIC are recognized by an increase in the carrying value of the indemnification asset. Payments from the FDIC for reimbursement of losses result in a reduction of the FDIC indemnification asset.

Derivative Financial Instruments – In the ordinary course of business, the Company enters into derivative transactions as part of its overall interest rate risk management strategy to minimize significant unplanned fluctuations in earnings and expected future cash flows caused by interest rate volatility. All derivative instruments are recorded at fair value as either other assets or other liabilities in the Consolidated Statements of Financial Condition. Subsequent changes in a derivative’s fair value are recognized in earnings unless specific hedge accounting criteria are met.

On the date the Company enters into a derivative contract, the derivative is designated as a fair value hedge, a cash flow hedge, or a non-hedge derivative instrument. Fair value hedges are designed to mitigate exposure to changes in the fair value of an asset or liability attributable to a particular risk, such as interest rate risk. Cash flow hedges are designed to mitigate exposure to variability in expected future cash flows to be received or paid related to an asset, liability, or other type of forecasted transaction. The Company formally documents all relationships between hedging instruments and hedged items, including its risk management objective and strategy.

At the hedge’s inception and quarterly thereafter, a formal assessment is performed to determine the effectiveness of the derivative in offsetting changes in the fair values or expected future cash flows of the hedged items in the current period and prospectively. If a derivative instrument designated as a hedge is terminated or ceases to be highly effective, hedge accounting is discontinued prospectively, and the gain or loss is amortized into earnings. For fair value hedges, the gain or loss is amortized over the remaining life of the hedged asset or liability. For cash flow hedges, the gain or loss is amortized over the same period that the forecasted hedged transactions impact earnings. If the hedged item is disposed of, any fair value adjustments are included in the gain or loss from the disposition of the hedged item. If the forecasted transaction is no longer probable, the gain or loss is included in earnings immediately.

For effective fair value hedges, changes in the fair value of the derivative instruments, as well as changes in the fair value of the hedged item, are recognized in earnings. For cash flow hedges, the effective portion of the change in fair value of the derivative instrument is reported as a component of accumulated other comprehensive loss and is reclassified to earnings when the hedged transaction is reflected in earnings.

Ineffectiveness is calculated based on the change in fair value of the hedged item compared with the change in fair value of the hedging instrument. For all types of hedges, any ineffectiveness in the hedging relationship is recognized in earnings during the period the ineffectiveness occurs.

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Derivative Financial Instruments and Hedging Activities (Details) - Interest Rate Derivatives Portfolio (Fair Value Hedging, USD $) In Thousands, unless otherwise specified	9 Months Ended		12 Months Ended
	Sep. 30, 2014		Dec. 31, 2013
Fair Value Hedging
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Gross notional amount outstanding	$ 13,854		$ 14,730
Derivative liability fair value	(1,103)		(1,472)
Weighted-average interest rate received (percent)	2.07%		2.08%
Weighted-average interest rate paid (percent)	6.38%		6.39%
Weighted-average maturity (in years)	3 years 0 months 8 days		3 years 9 months 5 days
Fair value of assets needed to settle derivative transactions	$ 1,130	[1]	$ 1,502

[1] This amount represents the fair value if credit risk related contingent features were triggered.

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Acquired Loans (Details) - Acquired Loans (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Note 5 - Acquired Loans (Details) - Acquired Loans [Line Items]
Purchased impaired loans	$ 84,952	$ 119,133
Non-Purchased impaired loans	566,314	47,854
Total	651,266	166,987
Non Covered Loan
Note 5 - Acquired Loans (Details) - Acquired Loans [Line Items]
Purchased impaired loans	20,937	15,608
Non-Purchased impaired loans	539,454	17,024
Total	560,391	32,632
Covered Loans
Note 5 - Acquired Loans (Details) - Acquired Loans [Line Items]
Purchased impaired loans	64,015	103,525
Non-Purchased impaired loans	26,860	30,830
Total	$ 90,875	$ 134,355

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Derivative Financial Instruments and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Interest Rate Derivatives

Cash Flow Hedges

(Dollar amounts in thousands)

	September 30, 2014			December 31, 2013
Gross notional amount outstanding	$	650,000		$	—
Derivative asset fair value	1,156			—
Derivative liability fair value	(1,983		)	—
Weighted-average interest rate received	1.63		%	—
Weighted-average interest rate paid	0.16		%	—
Weighted-average maturity (in years)	4.77			—

Fair Value Hedges

(Dollar amounts in thousands)

	September 30, 2014			December 31, 2013
Gross notional amount outstanding	$	13,854		$	14,730
Derivative liability fair value	(1,103		)	(1,472		)
Weighted-average interest rate received	2.07		%	2.08		%
Weighted-average interest rate paid	6.38		%	6.39		%
Weighted-average maturity (in years)	3.02			3.76
Fair value of assets needed to settle derivative transactions (1)	$	1,130		$	1,502

⁽¹⁾  This amount represents the fair value if credit risk related contingent features were triggered.

Schedule of Derivative Instruments

Other Derivative Instruments

(Dollar amounts in thousands)

	September 30, 2014			December 31, 2013
Gross notional amount outstanding	$	432,977		$	256,638
Derivative asset fair value	4,916			2,235
Derivative liability fair value	(4,916		)	(2,235		)
Fair value of assets needed to settle derivative transactions (1)	4,899			1,305

⁽¹⁾  This amount represents the fair value if credit risk related contingent features were triggered.

Offsetting Assets

The following table presents the Company's derivatives and offsetting positions as of September 30, 2014 and December 31, 2013.

Offsetting Derivatives

(Dollar amounts in thousands)

	Derivative Assets						Derivative Liabilities
	Fair Value						Fair Value
	September 30, 2014			December 31, 2013			September 30, 2014			December 31, 2013
Gross amounts recognized	$	6,072		$	2,235		$	8,002		$	3,707
Less: amounts offset in the Consolidated Statements of   Financial Condition	—			—			—			—
Net amount presented in the Consolidated Statements of   Financial Condition (1)	6,072			2,235			8,002			3,707
Gross amounts not offset in the Consolidated Statements of Financial Condition
Offsetting derivative positions	(1,156		)	(704		)	(1,156		)	(704		)
Cash collateral pledged (2)	—			—			(6,846		)	(3,003		)
Net credit exposure	$	4,916		$	1,531		$	—		$	—

⁽¹⁾  Included in other assets or other liabilities in the Consolidated Statements of Financial Condition.

⁽²⁾  The Company pledged cash collateral of $5.8 million and $3.0 million as of September 30, 2014 and December 31, 2013, respectively, which resulted in a shortage of collateral with counterparties as of September 30, 2014. For purposes of this disclosure, the amount of cash collateral is increased, given excess derivative assets, to fully offset the derivative liability.

Offsetting Liabilities

The following table presents the Company's derivatives and offsetting positions as of September 30, 2014 and December 31, 2013.

Offsetting Derivatives

(Dollar amounts in thousands)

	Derivative Assets						Derivative Liabilities
	Fair Value						Fair Value
	September 30, 2014			December 31, 2013			September 30, 2014			December 31, 2013
Gross amounts recognized	$	6,072		$	2,235		$	8,002		$	3,707
Less: amounts offset in the Consolidated Statements of   Financial Condition	—			—			—			—
Net amount presented in the Consolidated Statements of   Financial Condition (1)	6,072			2,235			8,002			3,707
Gross amounts not offset in the Consolidated Statements of Financial Condition
Offsetting derivative positions	(1,156		)	(704		)	(1,156		)	(704		)
Cash collateral pledged (2)	—			—			(6,846		)	(3,003		)
Net credit exposure	$	4,916		$	1,531		$	—		$	—

⁽¹⁾  Included in other assets or other liabilities in the Consolidated Statements of Financial Condition.

⁽²⁾  The Company pledged cash collateral of $5.8 million and $3.0 million as of September 30, 2014 and December 31, 2013, respectively, which resulted in a shortage of collateral with counterparties as of September 30, 2014. For purposes of this disclosure, the amount of cash collateral is increased, given excess derivative assets, to fully offset the derivative liability.

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Income Taxes (Tables)

9 Months Ended

Sep. 30, 2014

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Expense (Benefit)

The following table presents income tax expense and the effective income tax rate for the quarters and nine months ended September 30, 2014 and 2013.

Income Tax Expense

(Dollar amounts in thousands)

	Quarters Ended   September 30,						Nine Months Ended   September 30,
	2014			2013			2014			2013
Income before income tax expense	$	27,098		$	54,282		$	80,076		$	99,348
Income tax expense:
Federal income tax expense	$	6,714		$	19,145		$	19,719		$	29,058
State income tax expense	1,835			5,814			5,644			10,149
Total income tax expense	$	8,549		$	24,959		$	25,363		$	39,207
Effective income tax rate	31.5		%	46.0		%	31.7		%	39.5		%

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Past Due Loans, Allowance For Credit Losses, Impaired Loans and TDRS (Details) - TDRs That Defaulted Within Twelve Months of the Restructured Date (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014 loan	Sep. 30, 2013 loan	Sep. 30, 2014 loan	Sep. 30, 2013 loan
Past Due Loans, Allowance For Credit Losses, and Impaired Loans (Details) - TDRs That Defaulted Within Twelve Months of the Restructured Date [Line Items]
Number of Loans	1	0	3	4
Recorded Investment	$ 77	$ 0	$ 202	$ 704
Commercial And Industrial
Past Due Loans, Allowance For Credit Losses, and Impaired Loans (Details) - TDRs That Defaulted Within Twelve Months of the Restructured Date [Line Items]
Number of Loans	0	0	2	1
Recorded Investment	0	0	125	350
Other Commercial Real Estate
Past Due Loans, Allowance For Credit Losses, and Impaired Loans (Details) - TDRs That Defaulted Within Twelve Months of the Restructured Date [Line Items]
Number of Loans	0	0	0	3
Recorded Investment	0	0	0	354
Home Equity Line of Credit
Past Due Loans, Allowance For Credit Losses, and Impaired Loans (Details) - TDRs That Defaulted Within Twelve Months of the Restructured Date [Line Items]
Number of Loans	1	0	1	0
Recorded Investment	$ 77	$ 0	$ 77	$ 0

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Acquired Loans (Details) - Changes in FDIC Indemnification Asset (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
FDIC Indemnification Asset [Roll Forward]
Beginning balance	$ 10,276	$ 23,158	$ 16,585	$ 37,051
Amortization	(650)	(116)	(2,784)	(2,348)
Change in expected reimbursements from the FDIC for changes in expected credit losses	(857)	(999)	(325)	(3,453)
Payments received from the FDIC	(70)	(3,965)	(4,777)	(13,172)
Ending balance	$ 8,699	$ 18,078	$ 8,699	$ 18,078

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Commitments, Guarantees, and Contingent Liabilities (Tables)

9 Months Ended

Sep. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments Disclosure

Contractual or Notional Amounts of Financial Instruments

(Dollar amounts in thousands)

	September 30, 2014		December 31, 2013
Commitments to extend credit:
Commercial, industrial, and agricultural	$	1,202,700	$	1,077,201
Commercial real estate	172,012		133,867
Home equity	293,122		268,311
Other commitments (1)	187,385		181,702
Total commitments to extend credit	$	1,855,219	$	1,661,081
Standby letters of credit	$	125,569	$	110,453
Recourse on assets sold:
Unpaid principal balance of loans sold	$	182,834	$	170,330
Carrying value of recourse obligation (2)	158		162

⁽¹⁾  Other commitments includes installment and overdraft protection program commitments.

⁽²⁾  Included in other liabilities in the Consolidated Statements of Financial Condition.

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Fair Value (Tables)

9 Months Ended

Sep. 30, 2014

Fair Value Disclosures [Abstract]

Fair Value, Assets Measured on Recurring Basis

The following table provides the fair value for assets and liabilities required to be measured at fair value on a recurring basis in the Consolidated Statements of Financial Condition by level in the fair value hierarchy.

Recurring Fair Value Measurements

(Dollar amounts in thousands)

	September 30, 2014						December 31, 2013
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Assets:
Trading securities:
Money market funds	$	1,383	$	—	$	—	$	1,847	$	—	$	—
Mutual funds	16,545		—		—		15,470		—		—
Total trading securities	17,928		—		—		17,317		—		—
Securities available-for-sale:
U.S. Agency securities	—		500		—		—		500		—
CMOs	—		416,547		—		—		475,768		—
Other MBSs	—		120,489		—		—		136,164		—
Municipal securities	—		435,072		—		—		461,393		—
CDOs	—		—		18,369		—		—		18,309
Corporate debt securities	—		3,846		—		—		14,929		—
Equity securities	44		2,553		—		44		5,618		—
Total securities   available-for-sale	44		979,007		18,369		44		1,094,372		18,309
Mortgage servicing rights (1)	—		—		1,942		—		—		1,893
Derivative assets (1)	—		6,072		—		—		2,235		—
Liabilities:
Derivative liabilities (2)	$	—	$	8,002	$	—	$	—	$	3,707	$	—

⁽¹⁾  Included in other assets in the Consolidated Statements of Financial Condition.

⁽²⁾  Included in other liabilities in the Consolidated Statements of Financial Condition.

Fair Value Inputs, Assets, Quantitative Information

Information for each CDO, as well as the significant unobservable assumptions, is presented in the following table.

Characteristics of CDOs and Significant Unobservable Inputs

Used in the Valuation of CDOs as of September 30, 2014

(Dollar amounts in thousands)

	CDO Number
	1			2			3			4			5
Characteristics:
Class	C-1			C-1			C-1			B1			C
Original par	$	17,500		$	15,000		$	15,000		$	15,000		$	6,500
Amortized cost	7,140			5,598			12,377			13,727			6,179
Fair value	4,837			704			4,872			5,428			2,528
Lowest credit rating (Moody’s)	Ca			Ca			Ca			Ca			Ca
Number of underlying Issuers	43			54			57			56			74
Percent of Issuers currently   performing	83.7		%	81.5		%	77.2		%	62.5		%	73.0		%
Current deferral and default percent (1)	8.7		%	10.3		%	11.0		%	24.4		%	22.5		%
Expected future deferral and   default percent (2)	12.2		%	10.8		%	13.5		%	19.0		%	9.6		%
Excess subordination percent (3)	—		%	—		%	—		%	10.3		%	10.1		%
Discount rate risk adjustment (4)	12.5		%	14.3		%	13.3		%	11.8		%	12.3		%
Significant unobservable inputs, weighted average of Issuers:
Probability of prepayment	15.2		%	7.6		%	4.5		%	4.5		%	3.5		%
Probability of default	18.5		%	22.2		%	19.8		%	26.0		%	28.8		%
Loss given default	88.2		%	83.2		%	89.4		%	93.2		%	96.3		%
Probability of deferral cure	23.2		%	12.4		%	36.3		%	38.8		%	27.6		%

⁽¹⁾  Represents actual deferrals and defaults, net of recoveries, as a percent of the original collateral.

⁽²⁾  Represents expected future deferrals and defaults, net of recoveries, as a percent of the remaining performing collateral. The probability of future defaults is derived for each Issuer based on a credit analysis. The associated assumed loss given default is based on historical default and recovery information provided by a nationally recognized credit rating agency and is assumed to be 90% for banks, 85% for insurance companies, and 100% for Issuers that have already defaulted.

⁽³⁾  Represents additional defaults that the CDO can absorb before the security experiences any credit impairment. The excess subordination percentage is calculated by dividing the amount of potential additional loss that can be absorbed (before the receipt of all expected future principal and interest payments is affected) by the total balance of performing collateral.

⁽⁴⁾  Cash flows are discounted at LIBOR plus this adjustment to reflect the higher risk inherent in these securities.

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation

A rollforward of the carrying value of CDOs for the quarters and nine months ended September 30, 2014 and 2013 is presented in the following table.

Rollforward of the Carrying Value of CDOs

(Dollar amounts in thousands)

	Quarters Ended   September 30,					Nine Months Ended   September 30,
	2014			2013		2014			2013
Beginning balance	$	18,436		$	14,917	$	18,309		$	12,129
Change in other comprehensive (loss) income (1)	(65		)	2,079		1,571			4,867
Purchases, sales, issuances, settlements, and paydowns (2)	(2		)	—		(1,511		)	—
Ending balance	$	18,369		$	16,996	$	18,369		$	16,996
Change in unrealized losses recognized in earnings related to   securities still held at end of period	$	—		$	—	$	—		$	—

⁽¹⁾  Included in unrealized holding (losses) gains in the Consolidated Statements of Comprehensive Income.

⁽²⁾  For the nine months ended September 30, 2014, one CDO with a carrying value of $1.3 million was sold. In addition, one CDO with a carrying value of zero was sold during the nine months ended September 30, 2013

Fair Value Measurements, Nonrecurring

The following table provides the fair value for each class of assets and liabilities required to be measured at fair value on a non-recurring basis in the Consolidated Statements of Financial Condition by level in the fair value hierarchy.

Non-Recurring Fair Value Measurements

(Dollar amounts in thousands)

	September 30, 2014						December 31, 2013
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Collateral-dependent impaired loans (1)	$	—	$	—	$	18,754	$	—	$	—	$	13,103
OREO (2)	—		—		17,580		—		—		13,347
Loans held-for-sale (3)	—		—		24,504		—		—		4,739
Assets held-for-sale (4)	—		—		2,026		—		—		4,027

⁽¹⁾  Includes impaired loans with charge-offs and impaired loans with a specific reserve during the periods presented.

⁽²⁾  Includes OREO and covered OREO with fair value adjustments subsequent to initial transfer that occurred during the periods presented.

⁽³⁾  Included in other assets in the Consolidated Statements of Financial Condition.

⁽⁴⁾  Included in premises, furniture, and equipment in the Consolidated Statements of Financial Condition.

Fair Value, by Balance Sheet Grouping

For certain financial instruments that are not required to be measured at fair value in the Consolidated Statements of Financial Condition, the Company must disclose the estimated fair values and the level within the fair value hierarchy as shown in the following table.

Fair Value Measurements of Other Financial Instruments

(Dollar amounts in thousands)

		September 30, 2014				December 31, 2013
	Fair Value Hierarchy Level	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Assets:
Cash and due from banks	1	$	125,977	$	125,977	$	110,417	$	110,417
Interest-bearing deposits in other banks	2	550,606		550,606		476,824		476,824
Securities held-to-maturity	2	26,776		27,766		44,322		43,387
FHLB and Federal Reserve Bank stock	2	35,588		35,588		35,161		35,161
Net loans	3	6,445,973		6,315,474		5,628,855		5,544,146
FDIC indemnification asset	3	8,699		4,659		16,585		7,829
Investment in BOLI	3	195,270		195,270		193,167		193,167
Accrued interest receivable	3	27,375		27,375		25,735		25,735
Other interest earning assets	3	4,399		4,527		6,550		6,809
Liabilities:
Deposits	2	$	7,616,133	$	7,610,119	$	6,766,101	$	6,765,404
Borrowed funds	2	132,877		132,877		224,342		226,839
Senior and subordinated debt	1	191,028		191,769		190,932		201,147
Accrued interest payable	2	5,208		5,208		2,400		2,400

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Consolidated Statements Of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Statement of Cash Flows [Abstract]
Net cash provided by operating activities	$ 88,575	$ 104,383
Investing Activities
Proceeds from maturities, prepayments, and calls of securities available-for-sale	125,244	178,256
Proceeds from sales of securities available-for-sale	24,947	69,428
Purchases of securities available-for-sale	(16,411)	(326,143)
Proceeds from maturities, prepayments, and calls of securities held-to-maturity	3,814	7,084
Purchases of securities held-to-maturity	(1,998)	(2,636)
Net (purchases) redemption of FHLB and Federal Reserve Bank stock	(427)	12,071
Net increase in loans	(291,561)	(233,844)
BOLI income, net of claims	(73)	(2)
Proceeds from sales of OREO	14,293	20,715
Proceeds from sales of premises, furniture, and equipment	3,893	1,425
Purchases of premises, furniture, and equipment	(7,885)	(6,586)
Cash received from acquisitions, net of cash paid	139,486	0
Net cash used in investing activities	(6,678)	(280,232)
Financing Activities
Net increase in deposit accounts	119,440	330,953
Increase in borrowed funds	23,085	26,074
(Payment for) proceeds from the termination of FHLB advances and forward commitments	116,609	(7,829)
Cash dividends paid	(16,556)	(4,502)
Restricted stock activity	(2,739)	(1,588)
Excess tax benefit related to share-based compensation	824	55
Net cash provided by financing activities	7,445	358,821
Net increase in cash and cash equivalents	89,342	182,972
Cash and cash equivalents at beginning of period	587,241	716,266
Cash and cash equivalents at end of period	676,583	899,238
Supplemental Disclosures of Cash Flow Information:
Income taxes paid (refunded)	7,262	(1,779)
Interest paid to depositors and creditors	14,714	17,715
Dividends declared, but unpaid	6,028	3,006
Non-cash transfers of loans to OREO	13,277	15,877
Non-cash transfer of loans held-for-investment to loans held-for-sale	70,183	1,275
Non-cash transfer of an investment from other assets to securities available-for-sale	$ 0	$ 2,787

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Recent Events (Details) - Equity Matters (USD $)	0 Months Ended
	May 21, 2014	Sep. 30, 2014	May 21, 2014	Dec. 31, 2013
Recent Events [Abstract]
Common stock authorized during period, shares, period increase (decrease)	50,000,000
Common and preferred stock authorized (shares)			151,000,000
Shares authorized, preferred stock (in shares)		1,000,000	1,000,000	1,000,000
Shares authorized (in Shares)		150,000,000	150,000,000	100,000,000
Par Value (in Dollars per share)		$ 0.01	$ 0.01	$ 0.01

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Securities (Details) - Securities In An Unrealized Loss Position (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 30, 2014 security	Dec. 31, 2013 security
Collateralized Mortgage Obligations
Securities (Details) - Securities In An Unrealized Loss Position [Line Items]
Number of Securities (securities)	59	67
Fair Value - Less Than 12 Months	$ 15,653	$ 338,064
Unrealized Losses - Less Than 12 Months	139	14,288
Fair Value - 12 Months or Longer	312,418	57,269
Unrealized Losses - 12 Months or Longer	9,838	2,333
Fair Value - Total	328,071	395,333
Unrealized Losses - Total	9,977	16,621
Other Mortgage Backed Securities
Securities (Details) - Securities In An Unrealized Loss Position [Line Items]
Number of Securities (securities)	11	19
Fair Value - Less Than 12 Months	173	57,311
Unrealized Losses - Less Than 12 Months	2	2,281
Fair Value - 12 Months or Longer	41,570	356
Unrealized Losses - 12 Months or Longer	825	1
Fair Value - Total	41,743	57,667
Unrealized Losses - Total	827	2,282
Municipal Securities
Securities (Details) - Securities In An Unrealized Loss Position [Line Items]
Number of Securities (securities)	92	154
Fair Value - Less Than 12 Months	1,318	65,370
Unrealized Losses - Less Than 12 Months	8	3,245
Fair Value - 12 Months or Longer	57,298	27,565
Unrealized Losses - 12 Months or Longer	1,341	2,353
Fair Value - Total	58,616	92,935
Unrealized Losses - Total	1,349	5,598
Trust-preferred collateralized debt obligations
Securities (Details) - Securities In An Unrealized Loss Position [Line Items]
Number of Securities (securities)	5	6
Fair Value - Less Than 12 Months	0	0
Unrealized Losses - Less Than 12 Months	0	0
Fair Value - 12 Months or Longer	18,369	18,309
Unrealized Losses - 12 Months or Longer	26,652	28,223
Fair Value - Total	18,369	18,309
Unrealized Losses - Total	26,652	28,223
Equity Securities
Securities (Details) - Securities In An Unrealized Loss Position [Line Items]
Number of Securities (securities)	1	1
Fair Value - Less Than 12 Months	0	2,168
Unrealized Losses - Less Than 12 Months	0	90
Fair Value - 12 Months or Longer	2,238	0
Unrealized Losses - 12 Months or Longer	55	0
Fair Value - Total	2,238	2,168
Unrealized Losses - Total	55	90
Unrealized Loss Position
Securities (Details) - Securities In An Unrealized Loss Position [Line Items]
Number of Securities (securities)	168	247
Fair Value - Less Than 12 Months	17,144	462,913
Unrealized Losses - Less Than 12 Months	149	19,904
Fair Value - 12 Months or Longer	431,893	103,499
Unrealized Losses - 12 Months or Longer	38,711	32,910
Fair Value - Total	449,037	566,412
Unrealized Losses - Total	$ 38,860	$ 52,814

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Past Due Loans, Allowance For Credit Losses, Impaired Loans and TDRS (Details) - Credit Quality Indicators by Class, Excluding Covered Loans (Continued) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Past Due Loans, Allowance For Credit Losses, and Impaired Loans (Details) - Credit Quality Indicators by Class, Excluding Covered Loans (Continued) [Line Items]
Credit Quality Indicators by Class	$ 825,046	$ 747,839
Performing
Past Due Loans, Allowance For Credit Losses, and Impaired Loans (Details) - Credit Quality Indicators by Class, Excluding Covered Loans (Continued) [Line Items]
Credit Quality Indicators by Class	814,068	733,701
Non-accrual
Past Due Loans, Allowance For Credit Losses, and Impaired Loans (Details) - Credit Quality Indicators by Class, Excluding Covered Loans (Continued) [Line Items]
Credit Quality Indicators by Class	10,978	14,138
Home Equity Line of Credit
Past Due Loans, Allowance For Credit Losses, and Impaired Loans (Details) - Credit Quality Indicators by Class, Excluding Covered Loans (Continued) [Line Items]
Credit Quality Indicators by Class	517,446	427,020
Home Equity Line of Credit | Performing
Past Due Loans, Allowance For Credit Losses, and Impaired Loans (Details) - Credit Quality Indicators by Class, Excluding Covered Loans (Continued) [Line Items]
Credit Quality Indicators by Class	511,612	420,156
Home Equity Line of Credit | Non-accrual
Past Due Loans, Allowance For Credit Losses, and Impaired Loans (Details) - Credit Quality Indicators by Class, Excluding Covered Loans (Continued) [Line Items]
Credit Quality Indicators by Class	5,834	6,864
1-4 family mortgages
Past Due Loans, Allowance For Credit Losses, and Impaired Loans (Details) - Credit Quality Indicators by Class, Excluding Covered Loans (Continued) [Line Items]
Credit Quality Indicators by Class	238,172	275,992
1-4 family mortgages | Performing
Past Due Loans, Allowance For Credit Losses, and Impaired Loans (Details) - Credit Quality Indicators by Class, Excluding Covered Loans (Continued) [Line Items]
Credit Quality Indicators by Class	234,937	270,794
1-4 family mortgages | Non-accrual
Past Due Loans, Allowance For Credit Losses, and Impaired Loans (Details) - Credit Quality Indicators by Class, Excluding Covered Loans (Continued) [Line Items]
Credit Quality Indicators by Class	3,235	5,198
Installment Loans
Past Due Loans, Allowance For Credit Losses, and Impaired Loans (Details) - Credit Quality Indicators by Class, Excluding Covered Loans (Continued) [Line Items]
Credit Quality Indicators by Class	69,428	44,827
Installment Loans | Performing
Past Due Loans, Allowance For Credit Losses, and Impaired Loans (Details) - Credit Quality Indicators by Class, Excluding Covered Loans (Continued) [Line Items]
Credit Quality Indicators by Class	67,519	42,751
Installment Loans | Non-accrual
Past Due Loans, Allowance For Credit Losses, and Impaired Loans (Details) - Credit Quality Indicators by Class, Excluding Covered Loans (Continued) [Line Items]
Credit Quality Indicators by Class	$ 1,909	$ 2,076

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Fair Value (Details) - Financial Instruments (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Jun. 30, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Dec. 31, 2012
Assets:
Cash and due from banks	$ 125,977		$ 110,417
Interest-bearing deposits in other banks	550,606		476,824
Securities held-to-maturity, at amortized cost	26,776		44,322
FHLB and Federal Reserve Bank stock	35,588		35,161
Net loans	6,445,973		5,628,855
Federal Deposit Insurance Corporation (“FDIC”) indemnification asset	8,699	10,276	16,585	18,078	23,158	37,051
Investment in BOLI	195,270		193,167
Liabilities:
Deposits	7,616,133		6,766,101
Borrowed funds	132,877		224,342
Senior and subordinated debt	191,028		190,932
Level 1
Assets:
Cash and due from banks	125,977		110,417
Liabilities:
Senior and subordinated debt	191,769		201,147
Level 2
Assets:
Interest-bearing deposits in other banks	550,606		476,824
Securities held-to-maturity, at amortized cost	27,766		43,387
FHLB and Federal Reserve Bank stock	35,588		35,161
Liabilities:
Deposits	7,610,119		6,765,404
Borrowed funds	132,877		226,839
Accrued interest payable	5,208		2,400
Level 3
Assets:
Net loans	6,315,474		5,544,146
Federal Deposit Insurance Corporation (“FDIC”) indemnification asset	4,659		7,829
Investment in BOLI	195,270		193,167
Accrued interest receivable	27,375		25,735
Other interest earning assets	4,527		6,809
Carrying Amount | Level 1
Assets:
Cash and due from banks	125,977		110,417
Liabilities:
Senior and subordinated debt	191,028		190,932
Carrying Amount | Level 2
Assets:
Interest-bearing deposits in other banks	550,606		476,824
Securities held-to-maturity, at amortized cost	26,776		44,322
FHLB and Federal Reserve Bank stock	35,588		35,161
Liabilities:
Deposits	7,616,133		6,766,101
Borrowed funds	132,877		224,342
Accrued interest payable	5,208		2,400
Carrying Amount | Level 3
Assets:
Net loans	6,445,973		5,628,855
Federal Deposit Insurance Corporation (“FDIC”) indemnification asset	8,699		16,585
Investment in BOLI	195,270		193,167
Accrued interest receivable	27,375		25,735
Other interest earning assets	$ 4,399		$ 6,550

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Consolidated Statements of Financial Condition (Current Period Unaudited) (USD $) In Thousands, except Share data, unless otherwise specified	Sep. 30, 2014		Dec. 31, 2013
Assets [Abstract]
Cash and due from banks	$ 125,977		$ 110,417
Interest-bearing deposits in other banks	550,606		476,824
Trading securities, at fair value	17,928		17,317
Securities available-for-sale, at fair value	997,420		1,112,725
Securities held-to-maturity, at amortized cost	26,776		44,322
Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank stock, at cost	35,588		35,161
Loans, excluding covered loans	6,428,204		5,580,005
Covered loans	90,875	[1]	134,355	[1]
Allowance for loan and covered loan losses	(73,106)		(85,505)
Net loans	6,445,973		5,628,855
Other real estate owned (“OREO”), excluding covered OREO	29,165		32,473
Covered OREO	9,277		8,863
Federal Deposit Insurance Corporation (“FDIC”) indemnification asset	8,699		16,585
Premises, furniture, and equipment	123,473		120,204
Investment in bank-owned life insurance (“BOLI”)	195,270		193,167
Goodwill and other intangible assets	322,664		276,366
Accrued interest receivable and other assets	207,535		180,128
Total assets	9,096,351		8,253,407
Liabilities
Noninterest-bearing deposits	2,295,679		1,911,602
Interest-bearing deposits	5,320,454		4,854,499
Total deposits	7,616,133		6,766,101
Borrowed funds	132,877		224,342
Senior and subordinated debt	191,028		190,932
Accrued interest payable and other liabilities	106,637		70,590
Total liabilities	8,046,675		7,251,965
Stockholders’ Equity
Common stock	858		858
Additional paid-in capital	408,789		414,293
Retained earnings	891,129		853,740
Accumulated other comprehensive loss, net of tax	(18,852)		(26,792)
Treasury stock, at cost	(232,248)		(240,657)
Total stockholders’ equity	1,049,676		1,001,442
Total liabilities and stockholders’ equity	$ 9,096,351		$ 8,253,407
Per Common Share Data
Par Value (in Dollars per share)	$ 0.01		$ 0.01
Shares authorized, preferred stock (in shares)	1,000,000		1,000,000
Shares authorized (in Shares)	150,000,000		100,000,000
Shares issued (in Shares)	85,787,000		85,787,000
Shares outstanding (in Shares)	75,295,000		75,071,000
Treasury shares (in Shares)	10,492,000		10,716,000

[1] For information on covered loans, refer to Note 6, “Acquired and Covered Loans.”

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Acquired Loans (Details) - Changes in Accretable Yield (USD $) In Thousands, unless otherwise specified	3 Months Ended				9 Months Ended
	Sep. 30, 2014		Sep. 30, 2013		Sep. 30, 2014		Sep. 30, 2013
Changes in Accretable Yield [Roll Forward]
Beginning balances	$ 35,152		$ 47,104		$ 36,792		$ 51,498
Accretion	(3,346)		(3,410)		(10,277)		(11,752)
Additions	1,265		0		1,265		0
Other	(5,215)	[1]	(3,128)	[1]	76	[1]	820	[1]
Ending balance	$ 27,856		$ 40,566		$ 27,856		$ 40,566

[1] Decreases result from the resolution of certain loans occurring earlier than anticipated while increases represent an increase in the expected future cash flows to be collected over the remaining estimated life of the underlying portfolio.

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Consolidated Statements Of Changes In Stockholders’ Equity (Unaudited) (USD $) In Thousands, unless otherwise specified	Total	Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Treasury Stock
Balance Beginning at Dec. 31, 2012	$ 940,893	$ 858	$ 418,318	$ 786,453	$ (15,660)	$ (249,076)
Balance Beginning (in Shares) at Dec. 31, 2012		74,840
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Comprehensive income (loss)	49,744			60,141	(10,397)
Common dividends declared ($0.23 and $0.09 per common share)	(6,759)			(6,759)
Share-based compensation expense	4,366		4,366
Restricted stock activity	(1,536)		(9,915)			8,379
Restricted stock activity (in Shares)		236
Treasury stock issued to benefit plans	17		(92)			109
Treasury stock issued to benefit plans (in Shares)		(2)
Balance Ending at Sep. 30, 2013	986,725	858	412,677	839,835	(26,057)	(240,588)
Balance Ending (in Shares) at Sep. 30, 2013		75,074
Balance Beginning at Dec. 31, 2013	1,001,442	858	414,293	853,740	(26,792)	(240,657)
Balance Beginning (in Shares) at Dec. 31, 2013	75,071	75,071
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Comprehensive income (loss)	62,653			54,713	7,940
Common dividends declared ($0.23 and $0.09 per common share)	(17,324)			(17,324)
Share-based compensation expense	4,461		4,461
Restricted stock activity	(1,895)		(9,833)			7,938
Restricted stock activity (in Shares)		215
Treasury stock issued to benefit plans	339		(132)			471
Treasury stock issued to benefit plans (in Shares)		9
Balance Ending at Sep. 30, 2014	$ 1,049,676	$ 858	$ 408,789	$ 891,129	$ (18,852)	$ (232,248)
Balance Ending (in Shares) at Sep. 30, 2014	75,295	75,295

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Income Taxes (Details) - Components of Income Tax Benefit (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Income Tax Disclosure [Abstract]
Income before income tax expense	$ 27,098	$ 54,282	$ 80,076	$ 99,348
Income tax expense:
Federal income tax expense	6,714	19,145	19,719	29,058
State income tax expense	1,835	5,814	5,644	10,149
Total income tax expense	$ 8,549	$ 24,959	$ 25,363	$ 39,207
Effective income tax rate (percent)	31.50%	46.00%	31.70%	39.50%

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Securities (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014 obligation	Sep. 30, 2013 obligation	Dec. 31, 2013
Securities (Details) - Securities Portfolio [Line Items]
Available-for-sale securities pledged as collateral	$ 816,100,000		$ 816,100,000		$ 755,300,000
Held-to-maturity securities pledged as collateral	0		0		0
Available-for-sale securities, gross realized gain (loss), excluding OTTI	2,570,000	34,205,000	8,188,000	34,421,000
Number Of CDOs Sold			1	1
Carrying Value Of CDO Sold	1,300,000	0	1,300,000	0
OTTI credit losses recognized in earnings reductions CDO sold			8,600,000	6,800,000
Corporate Bonds and Other Investments
Securities (Details) - Securities Portfolio [Line Items]
Available-for-sale securities, gross realized gain (loss), excluding OTTI	2,600,000
Trust-preferred collateralized debt obligations
Securities (Details) - Securities Portfolio [Line Items]
Available-for-sale securities, gross realized gain (loss), excluding OTTI			3,500,000
Municipal Securities
Securities (Details) - Securities Portfolio [Line Items]
Available-for-sale securities, gross realized gain (loss), excluding OTTI			468,000
Equity Securities
Securities (Details) - Securities Portfolio [Line Items]
Available-for-sale securities, gross realized gain (loss), excluding OTTI			$ 1,600,000

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Derivative Financial Instruments and Hedging Activities (Details) - Offsetting Derivatives (USD $)	Sep. 30, 2014		Dec. 31, 2013
Offsetting Derivative Assets [Abstract]
Gross amounts recognized	$ 6,072,000		$ 2,235,000
Less: amounts offset in the Consolidated Statements of Financial Condition	0		0
Net amount presented in the Consolidated Statements of Financial Condition	6,072,000	[1]	2,235,000	[1]
Offsetting derivative positions	(1,156,000)		(704,000)
Cash collateral pledged	0	[2]	0	[2]
Derivative Asset, Net credit exposure	4,916,000		1,531,000
Offsetting Derivative Liabilities [Abstract]
Gross amounts recognized	8,002,000		3,707,000
Less: amounts offset in the Consolidated Statements of Financial Condition	0		0
Net amount presented in the Consolidated Statements of Financial Condition	8,002,000	[1]	3,707,000	[1]
Offsetting derivative positions	(1,156,000)		(704,000)
Cash collateral pledged	(6,846,000)	[2]	(3,003,000)	[2]
Derivative Liability, Net credit exposure	0		0
Cash collateral already posted	$ 5,800,000		$ 3,000,000

[1] Included in other assets or other liabilities in the Consolidated Statements of Financial Condition.

[2] The Company pledged cash collateral of $5.8 million and $3.0 million as of September 30, 2014 and December 31, 2013, respectively, which resulted in a shortage of collateral with counterparties as of September 30, 2014. For purposes of this disclosure, the amount of cash collateral is increased, given excess derivative assets, to fully offset the derivative liability.

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Acquisitions (Tables)

9 Months Ended

Sep. 30, 2014

Business Combinations [Abstract]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

Popular Acquisition

(Dollar amounts in thousands)

	August 8, 2014
Assets
Cash and due from banks	$	142,276
Loans:
Commercial, industrial, and agricultural	76,680
Commercial real estate:
Office, retail, and industrial	194,312
Multi-family	192,464
Other commercial real estate	57,111
Total commercial real estate	443,887
Consumer	28,819
Total loans	549,386
Goodwill	36,906
Intangible assets	8,003
Premises, furniture, and equipment	4,647
Accrued interest receivable and other assets	1,849
Total assets	$	743,067
Liabilities
Deposits:
Demand deposits	$	163,299
Savings deposits	91,205
NOW accounts	100,852
Money market deposits	181,730
Time deposits	194,786
Total deposits	731,872
Intangible liabilities	10,631
Accrued interest payable and other liabilities	564
Total liabilities	$	743,067

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Securities (Details) - Securities Portfolio (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 30, 2014	Dec. 31, 2013
Securities Available-for-Sale
Amortized Cost	$ 1,017,941	$ 1,147,114
Gross Unrealized Gains	18,339	18,425
Gross Unrealized Losses	(38,860)	(52,814)
Fair Value	997,420	1,112,725
Securities Held-to-Maturity
Municipal securities, at amortized cost	26,776	44,322
Municipal securities, Gross Unrealized Gains	990	0
Municipal securities, Gross Unrealized Losses	0	(935)
Municipal securities, Fair Value	27,766	43,387
Trading Securities	17,928	17,317
U.S. Agency Securities
Securities Available-for-Sale
Amortized Cost	500	500
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	500	500
Collateralized Mortgage Obligations
Securities Available-for-Sale
Amortized Cost	424,946	490,962
Gross Unrealized Gains	1,578	1,427
Gross Unrealized Losses	(9,977)	(16,621)
Fair Value	416,547	475,768
Other Mortgage Backed Securities
Securities Available-for-Sale
Amortized Cost	117,271	135,097
Gross Unrealized Gains	4,045	3,349
Gross Unrealized Losses	(827)	(2,282)
Fair Value	120,489	136,164
Municipal Securities
Securities Available-for-Sale
Amortized Cost	423,904	457,318
Gross Unrealized Gains	12,517	9,673
Gross Unrealized Losses	(1,349)	(5,598)
Fair Value	435,072	461,393
Trust-preferred collateralized debt obligations
Securities Available-for-Sale
Amortized Cost	45,021	46,532
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(26,652)	(28,223)
Fair Value	18,369	18,309
Corporate Debt Securities
Securities Available-for-Sale
Amortized Cost	3,724	12,999
Gross Unrealized Gains	122	1,930
Gross Unrealized Losses	0	0
Fair Value	3,846	14,929
Equity Securities
Securities Available-for-Sale
Amortized Cost	2,575	3,706
Gross Unrealized Gains	77	2,046
Gross Unrealized Losses	(55)	(90)
Fair Value	$ 2,597	$ 5,662

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Loans (Tables)

9 Months Ended

Sep. 30, 2014

Loans and Leases Receivable Disclosure [Abstract]

Composition Of Loan Portfolio

The following table presents the Company's loans held-for-investment by class.

Loan Portfolio

(Dollar amounts in thousands)

	September 30, 2014		December 31, 2013
Commercial and industrial	$	2,208,166	$	1,830,638
Agricultural	347,511		321,702
Commercial real estate:
Office, retail, and industrial	1,422,522		1,353,685
Multi-family	559,689		332,873
Construction	193,445		186,197
Other commercial real estate	871,825		807,071
Total commercial real estate	3,047,481		2,679,826
Total corporate loans	5,603,158		4,832,166
Home equity	517,446		427,020
1-4 family mortgages	238,172		275,992
Installment	69,428		44,827
Total consumer loans	825,046		747,839
Total loans, excluding covered loans	6,428,204		5,580,005
Covered loans (1)	90,875		134,355
Total loans	$	6,519,079	$	5,714,360
Deferred loan fees included in total loans	$	4,163	$	4,656
Overdrawn demand deposits included in total loans	3,632		5,047

⁽¹⁾  For information on covered loans, refer to Note 6, “Acquired and Covered Loans.”

Schedule Of Loans Sold

The table below summarizes the Company's loan sales for the quarter and nine months ended September 30, 2014 and 2013.

Loan Sales

(Dollar amounts in thousands)

	Quarters Ended   September 30,				Nine Months Ended   September 30,
	2014		2013		2014		2013
1-4 family mortgage loans
Proceeds from sales	$	32,611	$	37,060	$	117,549	$	122,067
Less book value of loans sold:
Loans originated with intent to sell	26,384		32,485		62,319		32,807
Loans held-for-investment	5,302		3,592		52,384		85,271
Total book value of loans sold	31,686		36,077		114,703		118,078
Net gains on sales of 1-4 family mortgages	$	925	$	983	$	2,846	$	3,989

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Fair Value (Details) - Fair Value Measurements (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014		Jun. 30, 2014	Dec. 31, 2013		Sep. 30, 2013	Jun. 30, 2013	Dec. 31, 2012
Trading securities:
Total trading securities	$ 17,928			$ 17,317
Securities available-for-sale:
CDOs	18,369		18,436	18,309		16,996	14,917	12,129
Total securities available-for-sale	997,420			1,112,725
Level 1
Trading securities:
Money market funds	1,383			1,847
Mutual funds	16,545			15,470
Total trading securities	17,928			17,317
Securities available-for-sale:
U.S. Agency securities	0			0
CMOs	0			0
Other MBSs	0			0
Municipal securities	0			0
CDOs	0			0
Corporate debt securities	0			0
Equity securities	44			44
Total securities available-for-sale	44			44
Mortgage servicing rights	0	[1]		0	[1]
Derivative assets	0	[1]		0	[1]
Liabilities:
Derivative liabilities	0	[2]		0	[2]
Level 2
Trading securities:
Money market funds	0			0
Mutual funds	0			0
Total trading securities	0			0
Securities available-for-sale:
U.S. Agency securities	500			500
CMOs	416,547			475,768
Other MBSs	120,489			136,164
Municipal securities	435,072			461,393
CDOs	0			0
Corporate debt securities	3,846			14,929
Equity securities	2,553			5,618
Total securities available-for-sale	979,007			1,094,372
Mortgage servicing rights	0	[1]		0	[1]
Derivative assets	6,072	[1]		2,235	[1]
Liabilities:
Derivative liabilities	8,002	[2]		3,707	[2]
Level 3
Trading securities:
Money market funds	0			0
Mutual funds	0			0
Total trading securities	0			0
Securities available-for-sale:
U.S. Agency securities	0			0
CMOs	0			0
Other MBSs	0			0
Municipal securities	0			0
CDOs	18,369			18,309
Corporate debt securities	0			0
Equity securities	0			0
Total securities available-for-sale	18,369			18,309
Mortgage servicing rights	1,942	[1]		1,893	[1]
Derivative assets	0	[1]		0	[1]
Liabilities:
Derivative liabilities	$ 0	[2]		$ 0	[2]

[1] Included in other assets in the Consolidated Statements of Financial Condition.

[2] Included in other liabilities in the Consolidated Statements of Financial Condition.

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Consolidated Statements Of Changes In Stockholders’ Equity (Unaudited) (Parentheticals) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Statement of Stockholders' Equity [Abstract]
Dividends declared per common share (in Dollars per share)	$ 0.08	$ 0.04	$ 0.23	$ 0.09

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Consolidated Statements of Income (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Interest Income
Loans, excluding covered loans	$ 66,117	$ 60,614	$ 185,753	$ 179,156
Covered loans	2,596	3,142	7,139	10,742
Investment securities	7,465	7,742	23,489	22,755
Other short-term investments	684	831	2,174	2,474
Total interest income	76,862	72,329	218,555	215,127
Interest Expense
Deposits	2,806	2,837	7,914	9,160
Borrowed funds	9	390	561	1,217
Senior and subordinated debt	3,016	3,436	9,047	10,306
Total interest expense	5,831	6,663	17,522	20,683
Net interest income	71,031	65,666	201,033	194,444
Provision for loan and covered loan losses	10,727	4,770	17,509	16,257
Net interest income after provision for loan and covered loan losses	60,304	60,896	183,524	178,187
Noninterest Income
Service charges on deposit accounts	9,902	9,472	26,895	27,267
Wealth management fees	6,721	6,018	19,730	17,983
Card-based fees	6,646	5,509	17,950	16,132
Mortgage banking income	1,125	1,273	3,199	4,251
Other service charges, commissions, and fees	5,266	5,532	13,943	13,937
Gains on sales of properties	3,954	0	3,954	0
Net securities gains	2,570	33,801	8,160	34,017
BOLI income (loss)	767	(13,028)	2,030	(12,428)
Other income	156	1,682	1,748	4,116
Gain on termination of FHLB forward commitments	0	7,829	0	7,829
Loss on extinguishment of debt	0	0	(2,059)	0
Total noninterest income	37,107	58,088	95,550	113,104
Noninterest Expense
Salaries and employee benefits	35,933	34,270	103,985	103,760
Net occupancy and equipment expense	8,702	7,982	25,765	23,922
Professional services	7,098	5,517	19,004	16,330
Technology and related costs	4,316	2,984	10,494	8,351
Other expenses	14,264	13,949	39,750	39,580
Total noninterest expense	70,313	64,702	198,998	191,943
Income before income tax expense	27,098	54,282	80,076	99,348
Income tax expense	8,549	24,959	25,363	39,207
Net income	$ 18,549	$ 29,323	$ 54,713	$ 60,141
Per Common Share Data
Basic earnings per common share (in Dollars per share)	$ 0.25	$ 0.39	$ 0.73	$ 0.80
Diluted earnings per common share (in Dollars per share)	$ 0.25	$ 0.39	$ 0.73	$ 0.80
Dividends declared per common share (in Dollars per share)	$ 0.08	$ 0.04	$ 0.23	$ 0.09
Weighted-average common shares outstanding (in Shares)	74,341	74,023	74,270	73,969
Weighted-average diluted common shares outstanding (in Shares)	74,352	74,034	74,282	73,978

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Income Taxes

9 Months Ended

Sep. 30, 2014

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

The following table presents income tax expense and the effective income tax rate for the quarters and nine months ended September 30, 2014 and 2013.

Income Tax Expense

(Dollar amounts in thousands)

	Quarters Ended   September 30,						Nine Months Ended   September 30,
	2014			2013			2014			2013
Income before income tax expense	$	27,098		$	54,282		$	80,076		$	99,348
Income tax expense:
Federal income tax expense	$	6,714		$	19,145		$	19,719		$	29,058
State income tax expense	1,835			5,814			5,644			10,149
Total income tax expense	$	8,549		$	24,959		$	25,363		$	39,207
Effective income tax rate	31.5		%	46.0		%	31.7		%	39.5		%

Federal income tax expense and the effective income tax rate are influenced by the amount of tax-exempt income derived from investment securities and BOLI in relation to pre-tax income and state income taxes. State income tax expense and the related effective tax rate are driven by the amount of state tax-exempt income in relation to pre-tax income and state tax rules for consolidated/combined reporting and sourcing of income and expense.

Effective tax rates were elevated for the quarter and nine months ended September 30, 2013 due to a $34.0 million gain recognized on the sale of an equity investment and a $7.8 million gain on the termination of two FHLB forward commitments, which were taxed at statutory rates, and a $13.3 million non-deductible BOLI modification loss. Excluding these transactions, the effective tax rate for the quarter and nine months ended September 30, 2013 would have been 30.5% and 31.2%, respectively. In addition, an increase in income exempt from state taxes contributed to the decrease in the effective income tax rate compared to both prior periods.

The Company's accounting policies for the recognition of income taxes in the Consolidated Statements of Financial Condition and Income are included in Notes 1 and 14 to the Consolidated Financial Statements of the Company's 2013 10-K.

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Document And Entity Information	9 Months Ended
	Sep. 30, 2014	Nov. 03, 2014
Document and Entity Information [Abstract]
Entity Registrant Name	FIRST MIDWEST BANCORP INC
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		75,295,023
Amendment Flag	false
Entity Central Index Key	0000702325
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Large Accelerated Filer
Entity Well-known Seasoned Issuer	No
Document Period End Date	Sep. 30, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q3

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Derivative Financial Instruments

9 Months Ended

Sep. 30, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments and Hedging Activities

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

In the ordinary course of business, the Company enters into derivative transactions as part of its overall interest rate risk management strategy. The significant accounting policies related to derivative instruments and hedging activities are presented in Note 1, "Summary of Significant Accounting Policies."

Fair Value Hedges

The Company hedges the fair value of fixed rate commercial real estate loans using interest rate swaps through which the Company pays fixed amounts and receives variable amounts. These derivative contracts are designated as fair value hedges.

Fair Value Hedges

(Dollar amounts in thousands)

	September 30, 2014			December 31, 2013
Gross notional amount outstanding	$	13,854		$	14,730
Derivative liability fair value	(1,103		)	(1,472		)
Weighted-average interest rate received	2.07		%	2.08		%
Weighted-average interest rate paid	6.38		%	6.39		%
Weighted-average maturity (in years)	3.02			3.76
Fair value of assets needed to settle derivative transactions (1)	$	1,130		$	1,502

⁽¹⁾  This amount represents the fair value if credit risk related contingent features were triggered.

Hedge ineffectiveness is recognized in other noninterest income in the Condensed Consolidated Statements of Income. For the quarters and nine months ended September 30, 2014 and 2013, fair value hedge ineffectiveness was not material.

Cash Flow Hedges

During the nine months ended September 30, 2014, the Company hedged $325.0 million of certain corporate variable rate loans using interest rate swaps through which the Company receives fixed amounts and pays variable amounts. The Company also hedged $325.0 million of borrowed funds using four forward starting interest rate swaps through which the Company receives variable amounts and pays fixed amounts. The four forward starting interest rate swaps begin in 2015 and 2016 and mature in 2019. These derivative contracts are designated as cash flow hedges.

Cash Flow Hedges

(Dollar amounts in thousands)

	September 30, 2014			December 31, 2013
Gross notional amount outstanding	$	650,000		$	—
Derivative asset fair value	1,156			—
Derivative liability fair value	(1,983		)	—
Weighted-average interest rate received	1.63		%	—
Weighted-average interest rate paid	0.16		%	—
Weighted-average maturity (in years)	4.77			—

The effective portion of gains or losses on cash flow hedges is recorded in accumulated other comprehensive income on an after-tax basis and is subsequently reclassified to interest income or expense in the period that the forecasted hedge impacts earnings. Hedge ineffectiveness is determined using a regressionanalysis at the inception of the hedge relationship and on an ongoing basis. For the quarter ended September 30, 2014, there were no gains or losses related to cash flow hedge ineffectiveness. As of September 30, 2014, the Company estimates that $4.0 million will be reclassified from accumulated other comprehensive income as an increase to interest income over the next twelve months.

Other Derivative Instruments

The Company also enters into derivative transactions with its commercial customers and simultaneously enters into an offsetting interest rate derivative transaction with a third party. This transaction allows the Company’s customers to effectively convert a variable rate loan into a fixed rate loan. Due to the offsetting nature of these transactions, the Company does not apply hedge accounting treatment. Transaction fees related to commercial customer derivative instruments of $874,000 and $1.3 million were recorded in noninterest income for the quarter and nine months ended September 30, 2014, respectively. There were $1.4 million and $2.0 million in transaction fees recorded for the quarter and nine months ended September 30, 2013, respectfully.

Other Derivative Instruments

(Dollar amounts in thousands)

	September 30, 2014			December 31, 2013
Gross notional amount outstanding	$	432,977		$	256,638
Derivative asset fair value	4,916			2,235
Derivative liability fair value	(4,916		)	(2,235		)
Fair value of assets needed to settle derivative transactions (1)	4,899			1,305

⁽¹⁾  This amount represents the fair value if credit risk related contingent features were triggered.

The Company’s derivative portfolio also includes other derivative instruments that do not receive hedge accounting treatment, such as commitments to originate 1-4 family mortgage loans and foreign exchange contracts. In addition, the Company occasionally enters into risk participation agreements with counterparty banks to transfer or assume a portion of the credit risk related to customer transactions. The amounts of these instruments were not material for any periods presented. The Company had no other derivative instruments as of September 30, 2014 or December 31, 2013. The Company does not enter into derivative transactions for purely speculative purposes.

Credit Risk

Derivative instruments are inherently subject to credit risk, which represents the Company’s risk of loss when the counterparty to a derivative contract fails to perform according to the terms of the agreement. Credit risk is managed by limiting and collateralizing the aggregate amount of net unrealized losses by transaction, monitoring the size and the maturity structure of the derivatives, and applying uniform credit standards. Company policy establishes limits on credit exposure to any single counterparty. In addition, the Company established bilateral collateral agreements with derivative counterparties that provide for exchanges of marketable securities or cash to collateralize either party’s net losses above a stated minimum threshold.

Certain derivative instruments are subject to master netting agreements with counterparties. The Company records these transactions at their gross fair values and does not offset derivative assets and liabilities in the Consolidated Statements of Financial Condition. The following table presents the Company's derivatives and offsetting positions as of September 30, 2014 and December 31, 2013.

Offsetting Derivatives

(Dollar amounts in thousands)

	Derivative Assets						Derivative Liabilities
	Fair Value						Fair Value
	September 30, 2014			December 31, 2013			September 30, 2014			December 31, 2013
Gross amounts recognized	$	6,072		$	2,235		$	8,002		$	3,707
Less: amounts offset in the Consolidated Statements of   Financial Condition	—			—			—			—
Net amount presented in the Consolidated Statements of   Financial Condition (1)	6,072			2,235			8,002			3,707
Gross amounts not offset in the Consolidated Statements of Financial Condition
Offsetting derivative positions	(1,156		)	(704		)	(1,156		)	(704		)
Cash collateral pledged (2)	—			—			(6,846		)	(3,003		)
Net credit exposure	$	4,916		$	1,531		$	—		$	—

⁽¹⁾  Included in other assets or other liabilities in the Consolidated Statements of Financial Condition.

⁽²⁾  The Company pledged cash collateral of $5.8 million and $3.0 million as of September 30, 2014 and December 31, 2013, respectively, which resulted in a shortage of collateral with counterparties as of September 30, 2014. For purposes of this disclosure, the amount of cash collateral is increased, given excess derivative assets, to fully offset the derivative liability.

As of September 30, 2014 and December 31, 2013, the Company’s derivative instruments generally contained provisions that require the Company’s debt to remain above a certain credit rating by each of the major credit rating agencies or that the Company maintain certain capital levels. If the Company’s debt were to fall below the required credit ratings or the Company's capital were to fall below the required levels, it would be in violation of those provisions, and the counterparties to the derivative instruments could terminate the swap transaction and demand cash settlement of the derivative instrument in an amount equal to the derivative liability fair value. As of September 30, 2014 and December 31, 2013, the Company was not in violation of these provisions.

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Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Statement of Comprehensive Income [Abstract]
Net income	$ 18,549	$ 29,323	$ 54,713	$ 60,141
Unrealized holding (losses) gains:
Before tax	(2,693)	6,211	22,028	5,359
Tax effect	1,003	(1,993)	(8,776)	(2,151)
Net of tax	(1,690)	4,218	13,252	3,208
Reclassification of net gains included in net income:
Before tax	2,570	33,801	8,160	34,017
Tax effect	(1,051)	(13,825)	(3,337)	(13,913)
Net of tax	1,519	19,976	4,823	20,104
Net unrealized holding (losses) gains	(3,209)	(15,758)	8,429	(16,896)
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, before Tax [Abstract]
Before tax	(629)	0	(827)	0
Tax effect	257	0	338	0
Net of tax	(372)	0	(489)	0
Other Comprehensive (Income) Loss, Pension and Other Postretirement Benefit Plans, Adjustment, before Tax, [Abstract]
Before tax	0	0	0	10,997
Tax effect	0	0	0	(4,498)
Net of tax	0	0	0	6,499
Total other comprehensive (loss) income	(3,581)	(15,758)	7,940	(10,397)
Total comprehensive income	$ 14,968	$ 13,565	$ 62,653	$ 49,744

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Securities

9 Months Ended

Sep. 30, 2014

Investments, Debt and Equity Securities [Abstract]

Securities

SECURITIES

Securities are classified as held-to-maturity, trading, or available-for-sale at the time of purchase. Securities classified as held-to-maturity are securities for which management has the positive intent and ability to hold to maturity and are stated at cost.

The Company’s trading securities consist of diversified investment securities reported at fair value that are held in a grantor trust under deferred compensation arrangements that allow plan participants to direct amounts into a variety of securities, including Company stock. Net trading (losses) gains represent changes in the fair value of the trading securities portfolio and are included in other noninterest income in the Condensed Consolidated Statements of Income.

All other securities are classified as available-for-sale and are carried at fair value with unrealized gains and losses, net of related deferred income taxes, recorded in stockholders’ equity as a separate component of accumulated other comprehensive loss.

A summary of the Company's securities portfolio by category and maturity is presented in the following tables.

Securities Portfolio

(Dollar amounts in thousands)

	September 30, 2014									December 31, 2013
	Amortized Cost		Gross Unrealized					Fair  Value		Amortized Cost		Gross Unrealized					Fair  Value
			Gains		Losses							Gains		Losses
Securities Available-for-Sale
U.S. agency securities	$	500	$	—	$	—		$	500	$	500	$	—	$	—		$	500
Collateralized mortgage   obligations (“CMOs”)	424,946		1,578		(9,977		)	416,547		490,962		1,427		(16,621		)	475,768
Other mortgage-backed   securities (“MBSs”)	117,271		4,045		(827		)	120,489		135,097		3,349		(2,282		)	136,164
Municipal securities	423,904		12,517		(1,349		)	435,072		457,318		9,673		(5,598		)	461,393
Trust preferred   collateralized debt   obligations (“CDOs”)	45,021		—		(26,652		)	18,369		46,532		—		(28,223		)	18,309
Corporate debt securities	3,724		122		—			3,846		12,999		1,930		—			14,929
Equity securities	2,575		77		(55		)	2,597		3,706		2,046		(90		)	5,662
Total available-   for-sale securities	$	1,017,941	$	18,339	$	(38,860	)	$	997,420	$	1,147,114	$	18,425	$	(52,814	)	$	1,112,725
Securities Held-to-Maturity
Municipal securities	$	26,776	$	990	$	—		$	27,766	$	44,322	$	—	$	(935	)	$	43,387
Trading Securities								$	17,928								$	17,317

Remaining Contractual Maturity of Securities

(Dollar amounts in thousands)

	September 30, 2014
	Available-for-Sale				Held-to-Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
One year or less	$	65,157	$	63,042	$	3,425	$	3,552
After one year to five years	80,964		78,335		8,505		8,819
After five years to ten years	196,380		190,004		5,703		5,914
After ten years	130,648		126,406		9,143		9,481
Securities that do not have a single contractual maturity date	544,792		539,633		—		—
Total	$	1,017,941	$	997,420	$	26,776	$	27,766

The carrying value of securities available-for-sale that were pledged to secure deposits or for other purposes as permitted or required by law totaled $816.1 million at September 30, 2014 and $755.3 million at December 31, 2013. No securities held-to-maturity were pledged as of September 30, 2014 or December 31, 2013.

Purchases and sales of securities are recognized on a trade date basis. Realized securities gains or losses are reported in net securities gains in the Condensed Consolidated Statements of Income. The cost of securities sold is based on the specific identification method. The following table presents net realized gains on securities.

Securities Gains (Losses)

(Dollar amounts in thousands)

	Quarters Ended   September 30,						Nine Months Ended   September 30,
	2014			2013			2014			2013
Gains on sales of securities:
Gross realized gains	$	2,570		$	34,205		$	8,188		$	34,421
Gross realized losses	—			—			—			—
Net realized gains on sales of securities	2,570			34,205			8,188			34,421
Non-cash impairment charges:
Other-than-temporary securities impairment ("OTTI")	—			(404		)	(28		)	(404		)
Net non-cash impairment charges	—			(404		)	(28		)	(404		)
Net realized gains	$	2,570		$	33,801		$	8,160		$	34,017
Net trading (losses) gains (1)	$	(356	)	$	882		$	366		$	2,132

⁽¹⁾  All net trading (losses) gains relate to trading securities still held as of September 30, 2014 and September 30, 2013 and are included in other income in the Condensed Consolidated Statement of Income.

Net realized gains on sales of securities for the third quarter and first nine months of 2014 were $2.6 million and $8.2 million, respectively. During the third quarter of 2014, the Company sold certain corporate bonds and other investments at gains of $2.6 million. Net securities gains for the nine months ended September 30, 2014 also consisted of the sale of a non-accrual CDO at a gain of $3.5 million, sales of municipal securities at gains of $468,000, and the sale of other investments at a gain of $1.6 million.

The non-cash impairment charges for the nine months ended September 30, 2014 in the table above relates to OTTI charges on certain CMOs. For the quarter and nine months ended September 30, 2013, non-cash impairment charges relates to OTTI on municipal securities and CDOs. Accounting guidance requires that the credit portion of an OTTI charge be recognized through income. If a decline in fair value below carrying value is not attributable to credit deterioration and the Company does not intend to sell the security or believe it would not be more likely than not required to sell the security prior to recovery, the Company records the non-credit related portion of the decline in fair value in other comprehensive (loss) income.

The following table presents a rollforward of life-to-date OTTI recognized in earnings related to all available-for-sale securities held by the Company for the quarters and nine months ended September 30, 2014 and 2013. The majority of the beginning and ending balance of OTTI relates to CDOs currently held by the Company.

Changes in OTTI Recognized in Earnings

(Dollar amounts in thousands)

	Quarters Ended   September 30,					Nine Months Ended   September 30,
	2014		2013			2014			2013
Beginning balance	$	23,880	$	32,053		$	32,422		$	38,803
OTTI included in earnings (1):
Losses on securities that previously had OTTI	—		—			28			—
Losses on securities that did not previously have OTTI	—		404			—			404
Reduction for sales of securities (2)	—		(39		)	(8,570		)	(6,789		)
Ending balance	$	23,880	$	32,418		$	23,880		$	32,418

⁽¹⁾  Included in net securities gains in the Condensed Consolidated Statements of Income.

⁽²⁾  During the nine months ended September 30, 2014, one CDO with a carrying value of $1.3 million was sold. In addition, one CDO with a carrying value of zero was sold during the nine months ended September 30, 2013. These CDOs had OTTI of $8.6 million and $6.8 million, respectively, that were previously recognized in earnings.

The following table presents the aggregate amount of unrealized losses and the aggregate related fair values of securities with unrealized losses as of September 30, 2014 and December 31, 2013.

Securities in an Unrealized Loss Position

(Dollar amounts in thousands)

		Less Than 12 Months				Greater Than 12 Months				Total
	Number of Securities	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
As of September 30, 2014
CMOs	59	$	15,653	$	139	$	312,418	$	9,838	$	328,071	$	9,977
Other MBSs	11	173		2		41,570		825		41,743		827
Municipal securities	92	1,318		8		57,298		1,341		58,616		1,349
CDOs	5	—		—		18,369		26,652		18,369		26,652
Equity securities	1	—		—		2,238		55		2,238		55
Total	168	$	17,144	$	149	$	431,893	$	38,711	$	449,037	$	38,860
As of December 31, 2013
CMOs	67	$	338,064	$	14,288	$	57,269	$	2,333	$	395,333	$	16,621
Other MBSs	19	57,311		2,281		356		1		57,667		2,282
Municipal securities	154	65,370		3,245		27,565		2,353		92,935		5,598
CDOs	6	—		—		18,309		28,223		18,309		28,223
Equity securities	1	2,168		90		—		—		2,168		90
Total	247	$	462,913	$	19,904	$	103,499	$	32,910	$	566,412	$	52,814

Substantially all of the Company’s CMOs and other MBSs are either backed by U.S. government-owned agencies or issued by U.S. government-sponsored enterprises. Municipal securities are issued by municipal authorities, and the majority are supported by third party insurance or some other form of credit enhancement. Management does not believe any individual unrealized loss as of September 30, 2014 represents an OTTI related to credit deterioration. The unrealized losses associated with these securities are not believed to be attributed to credit quality, but rather to changes in interest rates and temporary market movements. In addition, the Company does not intend to sell the securities with unrealized losses, and it is not more likely than not that the Company will be required to sell them before recovery of their amortized cost basis, which may be at maturity.

The unrealized losses on CDOs as of September 30, 2014 reflect the illiquidity of these structured investment vehicles. Management does not believe these unrealized losses represent OTTI related to credit deterioration. In addition, the Company does not intend to sell the CDOs with unrealized losses within a short period of time, and the Company does not believe it is more likely than not that it will be required to sell them before recovery of their amortized cost basis, which may be at maturity.

Significant judgment is required to calculate the fair value of the CDOs, all of which are pooled. The Company estimates the fair value of these securities using discounted cash flow analyses with the assistance of a structured credit valuation firm. For additional discussion of the CDO valuation methodology, refer to Note 12, “Fair Value."

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Acquisitions

9 Months Ended

Sep. 30, 2014

Business Combinations [Abstract]

Acquisitions

ACQUISITIONS

Completed Acquisitions

Popular Community Bank

On August 8, 2014, First Midwest Bank (the "Bank") completed the acquisition of the Chicago area banking operations of Banco Popular North America (“Popular”), doing business as Popular Community Bank, which is a subsidiary of Popular, Inc. The acquisition included Popular’s twelve full-service retail banking offices and its small business and middle market commercial lending activities in the Chicago metropolitan area at a purchase price of $19.0 million paid in cash.

The assets acquired and liabilities assumed, both intangible and tangible, were recorded at their estimated fair values as of the August 8, 2014 acquisition date and have been accounted for under the acquisition method of accounting. The Company is finalizing the fair values of loans and intangible assets and liabilities. As a result, the fair value adjustments associated with these accounts and goodwill, which are included in the following table, are preliminary and may change.

Popular Acquisition

(Dollar amounts in thousands)

	August 8, 2014
Assets
Cash and due from banks	$	142,276
Loans:
Commercial, industrial, and agricultural	76,680
Commercial real estate:
Office, retail, and industrial	194,312
Multi-family	192,464
Other commercial real estate	57,111
Total commercial real estate	443,887
Consumer	28,819
Total loans	549,386
Goodwill	36,906
Intangible assets	8,003
Premises, furniture, and equipment	4,647
Accrued interest receivable and other assets	1,849
Total assets	$	743,067
Liabilities
Deposits:
Demand deposits	$	163,299
Savings deposits	91,205
NOW accounts	100,852
Money market deposits	181,730
Time deposits	194,786
Total deposits	731,872
Intangible liabilities	10,631
Accrued interest payable and other liabilities	564
Total liabilities	$	743,067

Expenses related to the acquisition of Popular totaled $2.2 million and $2.8 million during the quarter and nine months ended September 30, 2014, respectively, and are reported within noninterest expense. The acquisition was not considered material to the Company’s financial statements; therefore, pro forma financial data and related disclosures are not included.

National Machine Tool Financial Corporation

On September 26, 2014, the Bank completed the acquisition of National Machine Tool Financial Corporation ("National Machine Tool"). National Machine Tool provides equipment leasing and financing alternatives to traditional bank financing. On the date of acquisition, the Bank acquired approximately $4.4 million in direct financing leases, lease loans, and other assets.

Pending Acquisitions

Great Lakes Financial Resources, Inc.

On July 7, 2014, the Company entered into a definitive agreement to acquire the south suburban Chicago-based Great Lakes Financial Resources, Inc. ("Great Lakes"), the holding company for Great Lakes Bank, National Association. As part of the acquisition, the Company will acquire eight locations and approximately $234 million in loans and will assume approximately $490 million in deposits. The merger consideration will be a combination of Company common stock and cash, with an overall transaction value of approximately $58.0 million, subject to certain adjustments based on the price of the Company's common stock prior to closing. The Company received approval for this acquisition from the Federal Reserve, and the acquisition is expected to close before the end of 2014, subject to approval by the stockholders of Great Lakes and certain closing conditions.

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Securities (Tables)

9 Months Ended

Sep. 30, 2014

Investments, Debt and Equity Securities [Abstract]

Marketable Securities

A summary of the Company's securities portfolio by category and maturity is presented in the following tables.

Securities Portfolio

(Dollar amounts in thousands)

	September 30, 2014									December 31, 2013
	Amortized Cost		Gross Unrealized					Fair  Value		Amortized Cost		Gross Unrealized					Fair  Value
			Gains		Losses							Gains		Losses
Securities Available-for-Sale
U.S. agency securities	$	500	$	—	$	—		$	500	$	500	$	—	$	—		$	500
Collateralized mortgage   obligations (“CMOs”)	424,946		1,578		(9,977		)	416,547		490,962		1,427		(16,621		)	475,768
Other mortgage-backed   securities (“MBSs”)	117,271		4,045		(827		)	120,489		135,097		3,349		(2,282		)	136,164
Municipal securities	423,904		12,517		(1,349		)	435,072		457,318		9,673		(5,598		)	461,393
Trust preferred   collateralized debt   obligations (“CDOs”)	45,021		—		(26,652		)	18,369		46,532		—		(28,223		)	18,309
Corporate debt securities	3,724		122		—			3,846		12,999		1,930		—			14,929
Equity securities	2,575		77		(55		)	2,597		3,706		2,046		(90		)	5,662
Total available-   for-sale securities	$	1,017,941	$	18,339	$	(38,860	)	$	997,420	$	1,147,114	$	18,425	$	(52,814	)	$	1,112,725
Securities Held-to-Maturity
Municipal securities	$	26,776	$	990	$	—		$	27,766	$	44,322	$	—	$	(935	)	$	43,387
Trading Securities								$	17,928								$	17,317

Investments Classified by Contractual Maturity Date

Remaining Contractual Maturity of Securities

(Dollar amounts in thousands)

	September 30, 2014
	Available-for-Sale				Held-to-Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
One year or less	$	65,157	$	63,042	$	3,425	$	3,552
After one year to five years	80,964		78,335		8,505		8,819
After five years to ten years	196,380		190,004		5,703		5,914
After ten years	130,648		126,406		9,143		9,481
Securities that do not have a single contractual maturity date	544,792		539,633		—		—
Total	$	1,017,941	$	997,420	$	26,776	$	27,766

Realized Gain (Loss) on Investments

The following table presents net realized gains on securities.

Securities Gains (Losses)

(Dollar amounts in thousands)

	Quarters Ended   September 30,						Nine Months Ended   September 30,
	2014			2013			2014			2013
Gains on sales of securities:
Gross realized gains	$	2,570		$	34,205		$	8,188		$	34,421
Gross realized losses	—			—			—			—
Net realized gains on sales of securities	2,570			34,205			8,188			34,421
Non-cash impairment charges:
Other-than-temporary securities impairment ("OTTI")	—			(404		)	(28		)	(404		)
Net non-cash impairment charges	—			(404		)	(28		)	(404		)
Net realized gains	$	2,570		$	33,801		$	8,160		$	34,017
Net trading (losses) gains (1)	$	(356	)	$	882		$	366		$	2,132

⁽¹⁾  All net trading (losses) gains relate to trading securities still held as of September 30, 2014 and September 30, 2013 and are included in other income in the Condensed Consolidated Statement of Income.

Other than Temporary Impairment, Credit Losses Recognized in Earnings

The following table presents a rollforward of life-to-date OTTI recognized in earnings related to all available-for-sale securities held by the Company for the quarters and nine months ended September 30, 2014 and 2013. The majority of the beginning and ending balance of OTTI relates to CDOs currently held by the Company.

Changes in OTTI Recognized in Earnings

(Dollar amounts in thousands)

	Quarters Ended   September 30,					Nine Months Ended   September 30,
	2014		2013			2014			2013
Beginning balance	$	23,880	$	32,053		$	32,422		$	38,803
OTTI included in earnings (1):
Losses on securities that previously had OTTI	—		—			28			—
Losses on securities that did not previously have OTTI	—		404			—			404
Reduction for sales of securities (2)	—		(39		)	(8,570		)	(6,789		)
Ending balance	$	23,880	$	32,418		$	23,880		$	32,418

⁽¹⁾  Included in net securities gains in the Condensed Consolidated Statements of Income.

⁽²⁾  During the nine months ended September 30, 2014, one CDO with a carrying value of $1.3 million was sold. In addition, one CDO with a carrying value of zero was sold during the nine months ended September 30, 2013. These CDOs had OTTI of $8.6 million and $6.8 million, respectively, that were previously recognized in earnings.

Unrealized Gain (Loss) on Investments

The following table presents the aggregate amount of unrealized losses and the aggregate related fair values of securities with unrealized losses as of September 30, 2014 and December 31, 2013.

Securities in an Unrealized Loss Position

(Dollar amounts in thousands)

		Less Than 12 Months				Greater Than 12 Months				Total
	Number of Securities	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
As of September 30, 2014
CMOs	59	$	15,653	$	139	$	312,418	$	9,838	$	328,071	$	9,977
Other MBSs	11	173		2		41,570		825		41,743		827
Municipal securities	92	1,318		8		57,298		1,341		58,616		1,349
CDOs	5	—		—		18,369		26,652		18,369		26,652
Equity securities	1	—		—		2,238		55		2,238		55
Total	168	$	17,144	$	149	$	431,893	$	38,711	$	449,037	$	38,860
As of December 31, 2013
CMOs	67	$	338,064	$	14,288	$	57,269	$	2,333	$	395,333	$	16,621
Other MBSs	19	57,311		2,281		356		1		57,667		2,282
Municipal securities	154	65,370		3,245		27,565		2,353		92,935		5,598
CDOs	6	—		—		18,309		28,223		18,309		28,223
Equity securities	1	2,168		90		—		—		2,168		90
Total	247	$	462,913	$	19,904	$	103,499	$	32,910	$	566,412	$	52,814

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Commitments, Guarantees, and Contingent Liabilities

9 Months Ended

Sep. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments, Guarantees, and Contingent Liabilities

COMMITMENTS, GUARANTEES, AND CONTINGENT LIABILITIES

Credit Commitments and Guarantees

In the normal course of business, the Company enters into a variety of financial instruments with off-balance sheet risk to meet the financing needs of its customers and to conduct lending activities, including commitments to extend credit and standby and commercial letters of credit. These instruments involve elements of credit and interest rate risk in excess of the amount recognized in the Consolidated Statements of Financial Condition.

Contractual or Notional Amounts of Financial Instruments

(Dollar amounts in thousands)

	September 30, 2014		December 31, 2013
Commitments to extend credit:
Commercial, industrial, and agricultural	$	1,202,700	$	1,077,201
Commercial real estate	172,012		133,867
Home equity	293,122		268,311
Other commitments (1)	187,385		181,702
Total commitments to extend credit	$	1,855,219	$	1,661,081
Standby letters of credit	$	125,569	$	110,453
Recourse on assets sold:
Unpaid principal balance of loans sold	$	182,834	$	170,330
Carrying value of recourse obligation (2)	158		162

⁽¹⁾  Other commitments includes installment and overdraft protection program commitments.

⁽²⁾  Included in other liabilities in the Consolidated Statements of Financial Condition.

Commitments to extend credit are agreements to lend funds to a customer, subject to contractual terms and covenants. Commitments generally have fixed expiration dates or other termination clauses, variable interest rates, and fee requirements, when applicable. Since many of the commitments are expected to expire without being drawn, the total commitment amounts do not necessarily represent future cash flow requirements.

In the event of a customer's non-performance, the Company's credit loss exposure is equal to the contractual amount of the commitments. The credit risk is essentially the same as extending loans to customers. The Company uses the same credit policies for credit commitments as its loans and minimizes exposure to credit loss through various collateral requirements.

Letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Standby letters of credit generally are contingent on the failure of the customer to perform according to the terms of the contract with the third party and are often issued in favor of a municipality where construction is taking place to ensure the borrower adequately completes the construction.

The maximum potential future payments guaranteed by the Company under standby letters of credit arrangements are equal to the contractual amount of the commitment. If a commitment is funded, the Company may seek recourse through the liquidation of the underlying collateral, including real estate, production plants and property, marketable securities, or receipt of cash.

As a result of the sale of certain 1-4 family mortgage loans, the Company is contractually obligated to repurchase any non-performing loans or loans that do not meet underwriting requirements at recorded value. In accordance with the sales agreements, there is no limitation to the maximum potential future payments or expiration of the Company's recourse obligation. There were no material loan repurchases during the quarters ended September 30, 2014 and 2013.

Legal Proceedings

In the ordinary course of business, there were certain legal proceedings pending against the Company and its subsidiaries at September 30, 2014. While the outcome of any legal proceeding is inherently uncertain, based on information currently available, the Company's management does not expect that any liabilities arising from pending legal matters will have a material adverse effect on the Company's financial position, results of operations, or cash flows.

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Past Due Loans, Allowance For Credit Losses, and Impaired Loans

9 Months Ended

Sep. 30, 2014

Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract]

Past Due Loans, Allowance For Credit Losses, Impaired Loans and TDRS

PAST DUE LOANS, ALLOWANCE FOR CREDIT LOSSES, IMPAIRED LOANS, AND TDRS

Past Due and Non-accrual Loans

The following table presents an aging analysis of the Company’s past due loans as of September 30, 2014 and December 31, 2013. The aging is determined without regard to accrual status. The table also presents non-performing loans, consisting of non-accrual loans (the majority of which are past due) and loans 90 days or more past due and still accruing interest, as of each balance sheet date.

Aging Analysis of Past Due Loans and Non-Performing Loans by Class

(Dollar amounts in thousands)

	Aging Analysis (Accruing and Non-accrual)										Non-performing Loans
	Current		30-89 Days Past Due		90 Days or More Past Due		Total Past Due		Total Loans		Non- accrual Loans		90 Days Past Due Loans, Still Accruing Interest
September 30, 2014
Commercial and industrial	$	2,197,785	$	6,216	$	4,165	$	10,381	$	2,208,166	$	19,696	$	1,256
Agricultural	347,179		—		332		332		347,511		361		—
Commercial real estate:
Office, retail, and industrial	1,401,990		1,842		18,690		20,532		1,422,522		16,963		3,840
Multi-family	557,852		641		1,196		1,837		559,689		1,536		—
Construction	186,363		—		7,082		7,082		193,445		7,082		—
Other commercial real estate	861,061		4,461		6,303		10,764		871,825		7,912		150
Total commercial real   estate	3,007,266		6,944		33,271		40,215		3,047,481		33,493		3,990
Total corporate loans	5,552,230		13,160		37,768		50,928		5,603,158		53,550		5,246
Home equity	509,530		3,525		4,391		7,916		517,446		5,834		587
1-4 family mortgages	234,672		1,935		1,565		3,500		238,172		3,235		126
Installment	66,997		428		2,003		2,431		69,428		1,909		103
Total consumer loans	811,199		5,888		7,959		13,847		825,046		10,978		816
Total loans, excluding   covered loans	6,363,429		19,048		45,727		64,775		6,428,204		64,528		6,062
Covered loans	73,370		954		16,551		17,505		90,875		10,905		7,031
Total loans	$	6,436,799	$	20,002	$	62,278	$	82,280	$	6,519,079	$	75,433	$	13,093
December 31, 2013
Commercial and industrial	$	1,814,660	$	6,872	$	9,106	$	15,978	$	1,830,638	$	11,767	$	393
Agricultural	321,156		134		412		546		321,702		519		—
Commercial real estate:
Office, retail, and industrial	1,335,027		2,620		16,038		18,658		1,353,685		17,076		1,315
Multi-family	330,960		318		1,595		1,913		332,873		1,848		—
Construction	180,083		23		6,091		6,114		186,197		6,297		—
Other commercial real estate	795,462		5,365		6,244		11,609		807,071		8,153		258
Total commercial real   estate	2,641,532		8,326		29,968		38,294		2,679,826		33,374		1,573
Total corporate loans	4,777,348		15,332		39,486		54,818		4,832,166		45,660		1,966
Home equity	415,791		4,830		6,399		11,229		427,020		6,864		1,102
1-4 family mortgages	268,912		2,046		5,034		7,080		275,992		5,198		548
Installment	42,350		330		2,147		2,477		44,827		2,076		92
Total consumer loans	727,053		7,206		13,580		20,786		747,839		14,138		1,742
Total loans, excluding   covered loans	5,504,401		22,538		53,066		75,604		5,580,005		59,798		3,708
Covered loans	94,211		2,232		37,912		40,144		134,355		20,942		18,081
Total loans	$	5,598,612	$	24,770	$	90,978	$	115,748	$	5,714,360	$	80,740	$	21,789

Allowance for Credit Losses

The Company maintains an allowance for credit losses at a level deemed adequate by management to absorb probable losses inherent in the loan portfolio. Refer to Note 1, “Summary of Significant Accounting Policies,” for the accounting policy for the allowance for credit losses. A rollforward of the allowance for credit losses by portfolio segment for the quarters and nine months ended September 30, 2014 and 2013 is presented in the table below.

Allowance for Credit Losses by Portfolio Segment

(Dollar amounts in thousands)

	Commercial, Industrial, and Agricultural			Office, Retail, and Industrial			Multi- Family			Construction			Other Commercial Real Estate			Consumer			Covered Loans			Reserve for Unfunded Commitments			Total Allowance
Quarter ended September 30, 2014
Beginning balance	$	29,194		$	11,831		$	2,048		$	4,885		$	8,585		$	12,440		$	9,343		$	1,616		$	79,942
Charge-offs	(9,763		)	(2,514		)	(26		)	(157		)	(1,363		)	(3,148		)	(135		)	—			(17,106		)
Recoveries	716			55			—			—			108			150			130			—			1,159
Net charge-offs	(9,047		)	(2,459		)	(26		)	(157		)	(1,255		)	(2,998		)	(5		)	—			(15,947		)
Provision for loan   and covered loan   losses and other	10,458			265			(65		)	(3,130		)	189			3,699			(689		)	—			10,727
Ending balance	$	30,605		$	9,637		$	1,957		$	1,598		$	7,519		$	13,141		$	8,649		$	1,616		$	74,722
Quarter ended September 30, 2013
Beginning balance	$	31,742		$	11,857		$	3,424		$	4,170		$	16,169		$	12,367		$	14,381		$	2,866		$	96,976
Charge-offs	(2,719		)	(987		)	(112		)	(470		)	(889		)	(2,482		)	(1,636		)	—			(9,295		)
Recoveries	521			31			—			57			253			374			7			—			1,243
Net charge-offs	(2,198		)	(956		)	(112		)	(413		)	(636		)	(2,108		)	(1,629		)	—			(8,052		)
Provision for loan   and covered loan   losses and other	2,452			938			(31		)	(100		)	(1,218		)	2,425			304			(480		)	4,290
Ending balance	$	31,996		$	11,839		$	3,281		$	3,657		$	14,315		$	12,684		$	13,056		$	2,386		$	93,214
Nine months ended September 30, 2014
Beginning balance	$	30,381		$	10,405		$	2,017		$	6,316		$	10,817		$	13,010		$	12,559		$	1,616		$	87,121
Charge-offs	(15,542		)	(7,108		)	(383		)	(1,052		)	(3,695		)	(7,005		)	(659		)	—			(35,444		)
Recoveries	3,135			403			3			160			341			502			992			—			5,536
Net charge-offs	(12,407		)	(6,705		)	(380		)	(892		)	(3,354		)	(6,503		)	333			—			(29,908		)
Provision for loan   and covered loan   losses and other	12,631			5,937			320			(3,826		)	56			6,634			(4,243		)	—			17,509
Ending balance	$	30,605		$	9,637		$	1,957		$	1,598		$	7,519		$	13,141		$	8,649		$	1,616		$	74,722
Nine months ended September 30, 2013
Beginning balance	$	36,761		$	11,432		$	3,575		$	5,242		$	17,512		$	12,862		$	12,062		$	3,366		$	102,812
Charge-offs	(9,010		)	(3,702		)	(490		)	(1,885		)	(3,971		)	(7,369		)	(4,322		)	—			(30,749		)
Recoveries	3,183			68			35			62			1,614			894			18			—			5,874
Net charge-offs	(5,827		)	(3,634		)	(455		)	(1,823		)	(2,357		)	(6,475		)	(4,304		)	—			(24,875		)
Provision for loan   and covered loan   losses and other	1,062			4,041			161			238			(840		)	6,297			5,298			(980		)	15,277
Ending balance	$	31,996		$	11,839		$	3,281		$	3,657		$	14,315		$	12,684		$	13,056		$	2,386		$	93,214

The table below provides a breakdown of loans and the related allowance for credit losses by portfolio segment as of September 30, 2014 and December 31, 2013.

Loans and Related Allowance for Credit Losses by Portfolio Segment

(Dollar amounts in thousands)

	Loans								Allowance for Credit Losses
	Individually Evaluated for Impairment		Collectively Evaluated for Impairment		PCI		Total		Individually Evaluated for Impairment		Collectively Evaluated for Impairment		PCI		Total
September 30, 2014
Commercial, industrial, and   agricultural	$	18,547	$	2,535,395	$	1,735	$	2,555,677	$	3,599	$	27,006	$	—	$	30,605
Commercial real estate:
Office, retail, and industrial	16,140		1,406,307		75		1,422,522		—		9,637		—		9,637
Multi-family	1,141		554,814		3,734		559,689		—		1,942		15		1,957
Construction	6,859		186,586		—		193,445		—		1,598		—		1,598
Other commercial real estate	4,719		860,410		6,696		871,825		—		7,519		—		7,519
Total commercial   real estate	28,859		3,008,117		10,505		3,047,481		—		20,696		15		20,711
Total corporate loans	47,406		5,543,512		12,240		5,603,158		3,599		47,702		15		51,316
Consumer	—		816,349		8,697		825,046		—		12,588		553		13,141
Total loans, excluding   covered loans	47,406		6,359,861		20,937		6,428,204		3,599		60,290		568		64,457
Covered loans	—		26,860		64,015		90,875		—		578		8,071		8,649
Reserve for unfunded   commitments	—		—		—		—		—		1,616		—		1,616
Total loans	$	47,406	$	6,386,721	$	84,952	$	6,519,079	$	3,599	$	62,484	$	8,639	$	74,722
December 31, 2013
Commercial, industrial, and   agricultural	$	13,178	$	2,137,440	$	1,722	$	2,152,340	$	4,046	$	26,335	$	—	$	30,381
Commercial real estate:
Office, retail, and industrial	26,348		1,327,337		—		1,353,685		214		10,191		—		10,405
Multi-family	1,296		331,445		132		332,873		18		1,999		—		2,017
Construction	5,712		180,485		—		186,197		178		6,138		—		6,316
Other commercial real estate	9,298		793,703		4,070		807,071		704		10,113		—		10,817
Total commercial   real estate	42,654		2,632,970		4,202		2,679,826		1,114		28,441		—		29,555
Total corporate loans	55,832		4,770,410		5,924		4,832,166		5,160		54,776		—		59,936
Consumer	—		738,155		9,684		747,839		—		13,010		—		13,010
Total loans, excluding   covered loans	55,832		5,508,565		15,608		5,580,005		5,160		67,786		—		72,946
Covered loans	—		30,830		103,525		134,355		—		702		11,857		12,559
Reserve for unfunded   commitments	—		—		—		—		—		1,616		—		1,616
Total loans	$	55,832	$	5,539,395	$	119,133	$	5,714,360	$	5,160	$	70,104	$	11,857	$	87,121

Loans Individually Evaluated for Impairment

The following table presents loans individually evaluated for impairment by class of loan as of September 30, 2014 and December 31, 2013. PCI loans are excluded from this disclosure.

Impaired Loans Individually Evaluated by Class

(Dollar amounts in thousands)

	September 30, 2014								December 31, 2013
	Recorded Investment In								Recorded Investment In
	Loans with No Specific Reserve		Loans with a Specific Reserve		Unpaid Principal Balance		Specific Reserve		Loans with No Specific Reserve		Loans with a Specific Reserve		Unpaid Principal Balance		Specific Reserve
Commercial and industrial	$	2,524	$	16,023	$	40,067	$	2,968	$	10,047	$	3,131	$	25,887	$	4,046
Agricultural	—		—		—		—		—		—		—		—
Commercial real estate:
Office, retail, and industrial	16,140		—		25,614		—		23,872		2,476		35,868		214
Multi-family	1,141		—		1,268		—		1,098		198		1,621		18
Construction	6,859		—		8,412		—		4,586		1,126		10,037		178
Other commercial real estate	4,719		—		6,979		—		7,553		1,745		11,335		704
Total commercial real   estate	28,859		—		42,273		—		37,109		5,545		58,861		1,114
Total impaired loans    individually evaluated    for impairment	$	31,383	$	16,023	$	82,340	$	2,968	$	47,156	$	8,676	$	84,748	$	5,160

The following table presents the average recorded investment and interest income recognized on impaired loans by class for the quarters and nine months ended September 30, 2014 and 2013. PCI loans are excluded from this disclosure.

Average Recorded Investment and Interest Income Recognized on Impaired Loans by Class

(Dollar amounts in thousands)

	Quarters Ended September 30,
	2014				2013
	Average Recorded Investment		Interest Income Recognized (1)		Average Recorded Investment		Interest Income Recognized (1)
Commercial and industrial	$	20,137	$	57	$	20,665	$	195
Agricultural	—		—		—		—
Commercial real estate:
Office, retail, and industrial	15,873		3		25,747		5
Multi-family	1,155		—		1,337		—
Construction	5,792		—		6,511		—
Other commercial real estate	5,234		22		12,511		16
Total commercial real estate	28,054		25		46,106		21
Total impaired loans	$	48,191	$	82	$	66,771	$	216
	Nine Months Ended September 30,
	2014				2013
	Average Recorded Investment		Interest Income Recognized (1)		Average Recorded Investment		Interest Income Recognized (1)
Commercial and industrial	$	15,222	$	204	$	22,862	$	198
Agricultural	—		—		—		—
Commercial real estate:
Office, retail, and industrial	20,671		150		24,415		15
Multi-family	1,321		—		1,071		—
Construction	5,537		—		5,987		—
Other commercial real estate	6,701		137		14,102		24
Total commercial real estate	34,230		287		45,575		39
Total impaired loans	$	49,452	$	491	$	68,437	$	237

⁽¹⁾  Recorded using the cash basis of accounting.

Credit Quality Indicators

Corporate loans and commitments are assessed for credit risk and assigned ratings based on various characteristics, such as the borrower's cash flow, leverage, and collateral. Ratings for commercial credits are reviewed periodically. The following tables present credit quality indicators by class for corporate and consumer loans, excluding covered loans, as of September 30, 2014 and December 31, 2013.

Corporate Credit Quality Indicators by Class, Excluding Covered Loans

(Dollar amounts in thousands)

	Pass		Special Mention (1) (4)		Substandard (2) (4)		Non-accrual (3)		Total
September 30, 2014
Commercial and industrial	$	2,094,453	$	66,429	$	27,588	$	19,696	$	2,208,166
Agricultural	346,851		299		—		361		347,511
Commercial real estate:
Office, retail, and industrial	1,343,833		28,586		33,140		16,963		1,422,522
Multi-family	545,419		5,916		6,818		1,536		559,689
Construction	162,527		7,229		16,607		7,082		193,445
Other commercial real estate	816,679		22,824		24,410		7,912		871,825
Total commercial real estate	2,868,458		64,555		80,975		33,493		3,047,481
Total corporate loans	$	5,309,762	$	131,283	$	108,563	$	53,550	$	5,603,158
December 31, 2013
Commercial and industrial	$	1,780,194	$	23,806	$	14,871	$	11,767	$	1,830,638
Agricultural	320,839		344		—		519		321,702
Commercial real estate:
Office, retail, and industrial	1,284,394		28,677		23,538		17,076		1,353,685
Multi-family	326,901		3,214		910		1,848		332,873
Construction	153,949		8,309		17,642		6,297		186,197
Other commercial real estate	761,465		14,877		22,576		8,153		807,071
Total commercial real estate	2,526,709		55,077		64,666		33,374		2,679,826
Total corporate loans	$	4,627,742	$	79,227	$	79,537	$	45,660	$	4,832,166

⁽¹⁾  Loans categorized as special mention exhibit potential weaknesses that require the close attention of management since these potential weaknesses may result in the deterioration of repayment prospects in the future.

⁽²⁾  Loans categorized as substandard exhibit a well-defined weakness or weaknesses that may jeopardize the liquidation of the debt. These loans continue to accrue interest because they are well secured and collection of principal and interest is expected within a reasonable time.

⁽³⁾  Loans categorized as non-accrual exhibit a well-defined weakness or weaknesses that may jeopardize the liquidation of the debt or result in a loss if the deficiencies are not corrected.

⁽⁴⁾  Total special mention and substandard loans includes accruing TDRs of $3.5 million as of September 30, 2014 and $2.8 million as of December 31, 2013.

Consumer Credit Quality Indicators by Class, Excluding Covered Loans

(Dollar amounts in thousands)

	Performing		Non-accrual		Total
September 30, 2014
Home equity	$	511,612	$	5,834	$	517,446
1-4 family mortgages	234,937		3,235		238,172
Installment	67,519		1,909		69,428
Total consumer loans	$	814,068	$	10,978	$	825,046
December 31, 2013
Home equity	$	420,156	$	6,864	$	427,020
1-4 family mortgages	270,794		5,198		275,992
Installment	42,751		2,076		44,827
Total consumer loans	$	733,701	$	14,138	$	747,839

TDRs

TDRs are generally performed at the request of the individual borrower and may include forgiveness of principal, reduction in interest rates, changes in payments, and maturity date extensions. The table below presents TDRs by class as of September 30, 2014 and December 31, 2013. A discussion of our accounting policies for TDRs can be found in Note 1, “Summary of Significant Accounting Policies.”

TDRs by Class

(Dollar amounts in thousands)

	As of September 30, 2014						As of December 31, 2013
	Accruing		Non-accrual (1)		Total		Accruing		Non-accrual (1)		Total
Commercial and industrial	$	2,163	$	15,806	$	17,969	$	6,538	$	2,121	$	8,659
Agricultural	—		—		—		—		—		—
Commercial real estate:
Office, retail, and industrial	592		—		592		10,271		—		10,271
Multi-family	616		237		853		1,038		253		1,291
Construction	—		—		—		—		—		—
Other commercial real estate	441		186		627		4,326		291		4,617
Total commercial real estate	1,649		423		2,072		15,635		544		16,179
Total corporate loans	3,812		16,229		20,041		22,173		2,665		24,838
Home equity	752		513		1,265		787		512		1,299
1-4 family mortgages	885		235		1,120		810		906		1,716
Installment	—		—		—		—		—		—
Total consumer loans	1,637		748		2,385		1,597		1,418		3,015
Total loans	$	5,449	$	16,977	$	22,426	$	23,770	$	4,083	$	27,853

⁽¹⁾  These TDRs are included in non-accrual loans in the preceding tables.

TDRs are included in the calculation of the allowance for credit losses in the same manner as impaired loans. There were $2.6 million in specific reserves related to TDRs as of September 30, 2014 and there were $2.0 million in specific reserves related to TDRs as of December 31, 2013.

The following table presents a summary of loans that were restructured during the quarters and nine months ended September 30, 2014 and 2013.

Loans Restructured During the Period

(Dollar amounts in thousands)

	Number of Loans	Pre- Modification Recorded Investment		Funds Disbursed		Interest and Escrow Capitalized		Charge-offs		Post- Modification Recorded Investment
Quarter ended September 30, 2014
Commercial and industrial	5	$	23,015	$	—	$	—	$	—	$	23,015
Office, retail, and industrial	1	417		—		—		—		417
Total TDRs restructured during the period	6	$	23,432	$	—	$	—	$	—	$	23,432
Quarter ended September 30, 2013
Commercial and industrial	3	$	369	$	—	$	—	$	—	$	369
Office, retail, and industrial	2	1,674		—		—		—		1,674
Other commercial real estate	1	10		—		—		—		10
Home equity	8	822		—		—		—		822
Total TDRs restructured during the period	14	$	2,875	$	—	$	—	$	—	$	2,875
Nine months ended September 30, 2014
Commercial and industrial	5	$	23,015	$	—	$	—	$	—	$	23,015
Office, retail, and industrial	1	417		—		—		—		417
Home equity	1	75		—		—		—		75
Total TDRs restructured during the period	7	$	23,507	$	—	$	—	$	—	$	23,507
Nine months ended September 30, 2013
Commercial and industrial	7	$	14,439	$	—	$	2	$	—	$	14,441
Office, retail, and industrial	6	2,275		30		—		—		2,305
Multi-family	5	1,275		—		57		—		1,332
Construction	2	508		—		—		—		508
Other commercial real estate	5	526		—		—		—		526
Home equity	9	947		—		—		—		947
1-4 family mortgages	1	132		—		4		—		136
Total TDRs restructured during the period	35	$	20,102	$	30	$	63	$	—	$	20,195

Accruing TDRs that do not perform in accordance with their modified terms are transferred to non-accrual. The following table presents TDRs that had payment defaults during the quarters and nine months ended September 30, 2014 and 2013 where the default occurred within twelve months of the restructure date.

TDRs That Defaulted Within Twelve Months of the Restructure Date

(Dollar amounts in thousands)

	Quarters Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
	Number of Loans	Recorded Investment		Number of Loans	Recorded Investment		Number of Loans	Recorded Investment		Number of Loans	Recorded Investment
Commercial and industrial	—	$	—	—	$	—	2	$	125	1	$	350
Other commercial real estate	—	—		—	—		—	—		3	354
Home equity	1	77		—	—		1	77		—	—
Total	1	$	77	—	$	—	3	$	202	4	$	704

A rollforward of the carrying value of TDRs for the quarters and nine months ended September 30, 2014 and 2013 is presented in the following table.

TDR Rollforward

(Dollar amounts in thousands)

	Quarters Ended   September 30,						Nine Months Ended   September 30,
	2014			2013			2014			2013
Accruing
Beginning balance	$	5,697		$	8,287		$	23,770		$	6,867
Additions	417			1,128			492			4,606
Net payments received	(109		)	(248		)	(1,219		)	(415		)
Returned to performing status	—			—			(18,821		)	(5,037		)
Net transfers from non-accrual	(556		)	15,162			1,227			18,308
Ending balance	5,449			24,329			5,449			24,329
Non-accrual
Beginning balance	1,700			18,450			4,083			10,924
Additions	23,015			1,747			23,015			15,589
Net payments received	(135		)	(201		)	(292		)	(735		)
Charge-offs	(8,159		)	(62		)	(8,345		)	(1,850		)
Transfers to OREO	—			(35		)	(257		)	(77		)
Loans sold	—			—			—			(806		)
Net transfers to accruing	556			(15,162		)	(1,227		)	(18,308		)
Ending balance	16,977			4,737			16,977			4,737
Total TDRs	$	22,426		$	29,066		$	22,426		$	29,066

For TDRs to be removed from TDR status in the calendar year after the restructuring, the loans must (i) have an interest rate and terms that reflect market conditions at the time of restructuring, and (ii) be in compliance with the modified terms. TDRs that were returned to performing status totaled $18.8 million and $5.0 million for the nine months ended September 30, 2014 and 2013, respectively. Loans that were not restructured at market rates and terms, that are not in compliance with the modified terms, or for which there is a concern about the future ability of the borrower to meet its obligations under the modified terms, continue to be separately reported as restructured until paid in full or charged-off.

There were no material commitments to lend additional funds to borrowers with TDRs as of September 30, 2014 and December 31, 2013.

XML

Income Taxes (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013 contract	Sep. 30, 2014	Sep. 30, 2013 contract
Income Tax Disclosure [Abstract]
Gain on sale of equity investments		$ 34,000,000
Gain on termination of FHLB forward commitments	0	7,829,000	0	7,829,000
Number of terminated FHLB commitments		2		2
Boli Modification Loss		$ 13,300,000
Effective income tax rat reconciliation, excluding gain on sale of investment and BOLI modification loss (as a percent)		30.50%		31.20%

XML

Loans

9 Months Ended

Sep. 30, 2014

Loans and Leases Receivable Disclosure [Abstract]

Loans

LOANS

Loans Held-for-Investment

The following table presents the Company's loans held-for-investment by class.

Loan Portfolio

(Dollar amounts in thousands)

	September 30, 2014		December 31, 2013
Commercial and industrial	$	2,208,166	$	1,830,638
Agricultural	347,511		321,702
Commercial real estate:
Office, retail, and industrial	1,422,522		1,353,685
Multi-family	559,689		332,873
Construction	193,445		186,197
Other commercial real estate	871,825		807,071
Total commercial real estate	3,047,481		2,679,826
Total corporate loans	5,603,158		4,832,166
Home equity	517,446		427,020
1-4 family mortgages	238,172		275,992
Installment	69,428		44,827
Total consumer loans	825,046		747,839
Total loans, excluding covered loans	6,428,204		5,580,005
Covered loans (1)	90,875		134,355
Total loans	$	6,519,079	$	5,714,360
Deferred loan fees included in total loans	$	4,163	$	4,656
Overdrawn demand deposits included in total loans	3,632		5,047

⁽¹⁾  For information on covered loans, refer to Note 6, “Acquired and Covered Loans.”

The Company primarily lends to community-based and mid-sized businesses, commercial real estate customers, and consumers in its markets. Within these areas, the Company diversifies its loan portfolio by loan type, industry, and borrower.

It is the Company’s policy to review each prospective credit to determine the appropriateness and the adequacy of security or collateral prior to making a loan. In the event of borrower default, the Company seeks recovery in compliance with state lending laws, the Company’s lending standards, and credit monitoring and remediation procedures. A discussion of risk characteristics relevant to each portfolio segment is presented in Note 4, “Loans,” in the Company’s 2013 10-K.

Loan Sales

The table below summarizes the Company's loan sales for the quarter and nine months ended September 30, 2014 and 2013.

Loan Sales

(Dollar amounts in thousands)

	Quarters Ended   September 30,				Nine Months Ended   September 30,
	2014		2013		2014		2013
1-4 family mortgage loans
Proceeds from sales	$	32,611	$	37,060	$	117,549	$	122,067
Less book value of loans sold:
Loans originated with intent to sell	26,384		32,485		62,319		32,807
Loans held-for-investment	5,302		3,592		52,384		85,271
Total book value of loans sold	31,686		36,077		114,703		118,078
Net gains on sales of 1-4 family mortgages	$	925	$	983	$	2,846	$	3,989

The Company retained servicing responsibilities for a portion of the 1-4 family mortgage loans sold and collects servicing fees equal to a percentage of the outstanding principal balance. The Company also retained limited recourse for credit losses on the sold loans. A description of the recourse obligation is presented in Note 11, “Commitments, Guarantees, and Contingent Liabilities.”

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Acquired Loans

9 Months Ended

Sep. 30, 2014

Acquired Loans [Abstract]

Acquired Loans

ACQUIRED AND COVERED LOANS

Acquired loans consist primarily of loans that were acquired in business combinations that are not covered by the FDIC Agreements. These loans are included in loans, excluding covered loans, in the Consolidated Statements of Financial Condition. Covered loans consist of loans acquired by the Company in four FDIC-assisted transactions. Most loans and OREO acquired in three of those transactions are covered by the FDIC Agreements. The significant accounting policies related to acquired and covered loans, which are classified as PCI and Non-PCI, and the related FDIC indemnification asset are presented in Note 1, “Summary of Significant Accounting Policies.”

The following table presents PCI and Non-PCI, loans as of September 30, 2014 and December 31, 2013.

Acquired and Covered Loans

(Dollar amounts in thousands)

	September 30, 2014						December 31, 2013
	PCI		Non-PCI		Total		PCI		Non-PCI		Total
Acquired loans	$	20,937	$	539,454	$	560,391	$	15,608	$	17,024	$	32,632
Covered loans	64,015		26,860		90,875		103,525		30,830		134,355
Total acquired and covered loans	$	84,952	$	566,314	$	651,266	$	119,133	$	47,854	$	166,987

In connection with the FDIC Agreements, the Company recorded an indemnification asset. To maintain eligibility for the loss share reimbursement, the Company is required to follow certain servicing procedures as specified in the FDIC Agreements. The Company was in compliance with those requirements as of September 30, 2014 and December 31, 2013.

A rollforward of the carrying value of the FDIC indemnification asset for the quarters and nine months ended September 30, 2014 and 2013 is presented in the following table.

Changes in the FDIC Indemnification Asset

(Dollar amounts in thousands)

	Quarters Ended   September 30,						Nine Months Ended   September 30,
	2014			2013			2014			2013
Beginning balance	$	10,276		$	23,158		$	16,585		$	37,051
Amortization	(650		)	(116		)	(2,784		)	(2,348		)
Change in expected reimbursements from the FDIC for changes   in expected credit losses	(857		)	(999		)	(325		)	(3,453		)
Payments received from the FDIC	(70		)	(3,965		)	(4,777		)	(13,172		)
Ending balance	$	8,699		$	18,078		$	8,699		$	18,078

Changes in the accretable yield for acquired and covered PCI loans were as follows.

Changes in Accretable Yield

(Dollar amounts in thousands)

	Quarters Ended   September 30,						Nine Months Ended   September 30,
	2014			2013			2014			2013
Beginning balances	$	35,152		$	47,104		$	36,792		$	51,498
Accretion	(3,346		)	(3,410		)	(10,277		)	(11,752		)
Additions	1,265			—			1,265			—
Other (1)	(5,215		)	(3,128		)	76			820
Ending balance	$	27,856		$	40,566		$	27,856		$	40,566

⁽¹⁾  Decreases result from the resolution of certain loans occurring earlier than anticipated while increases represent an increase in the expected future cash flows to be collected over the remaining estimated life of the underlying portfolio.

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Earnings Per Common Share

9 Months Ended

Sep. 30, 2014

Earnings Per Share [Abstract]

Earnings Per Common Share

EARNINGS PER COMMON SHARE

The table below displays the calculation of basic and diluted earnings per share.

Basic and Diluted Earnings per Common Share

(Amounts in thousands, except per share data)

	Quarters Ended   September 30,						Nine Months Ended   September 30,
	2014			2013			2014			2013
Net income	$	18,549		$	29,323		$	54,713		$	60,141
Net income applicable to non-vested restricted shares	(242		)	(416		)	(697		)	(847		)
Net income applicable to common shares	$	18,307		$	28,907		$	54,016		$	59,294
Weighted-average common shares outstanding:
Weighted-average common shares outstanding (basic)	74,341			74,023			74,270			73,969
Dilutive effect of common stock equivalents	11			11			12			9
Weighted-average diluted common shares outstanding	74,352			74,034			74,282			73,978
Basic earnings per common share	$	0.25		$	0.39		$	0.73		$	0.80
Diluted earnings per common share	$	0.25		$	0.39		$	0.73		$	0.80
Anti-dilutive shares not included in the computation of diluted earnings per common share (1)	1,155			1,412			1,215			1,483

⁽¹⁾  This amount represents outstanding stock options for which the exercise price is greater than the average market price of the Company's common stock.

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Derivative Financial Instruments and Hedging Activities (Details) - Other Derivative Instruments (Other Derivative Instruments, USD $) In Thousands, unless otherwise specified	Sep. 30, 2014		Dec. 31, 2013
Other Derivative Instruments
Derivative [Line Items]
Gross notional amount outstanding	$ 432,977		$ 256,638
Derivative asset fair value	4,916		2,235
Derivative liability fair value	(4,916)		(2,235)
Fair value of assets needed to settle derivative transactions	$ 4,899	[1]	$ 1,305	[1]

[1] This amount represents the fair value if credit risk related contingent features were triggered.

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Commitments, Guarantees, and Contingent Liabilities (Details) - Contractual or Notional Amounts of Financial Instruments (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014		Dec. 31, 2013
Recourse on assets sold: [Abstract]
Unpaid principal balance of loans sold	$ 182,834		$ 170,330
Carrying value of recourse obligation	158	[1]	162	[1]
Letter of Credit
Commitments, Guarantees, and Contingent Liabilities (Details) - Contractual or Notional Amounts of Financial Instruments [Line Items]
Standby letters of credit	125,569		110,453
Commitments to Extend Credit
Commitments, Guarantees, and Contingent Liabilities (Details) - Contractual or Notional Amounts of Financial Instruments [Line Items]
Commercial, industrial, and agricultural	1,202,700		1,077,201
Commercial real estate	172,012		133,867
Home equity	293,122		268,311
Other commitments	187,385	[2]	181,702	[2]
Total commitments to extend credit	$ 1,855,219		$ 1,661,081

[1] Included in other liabilities in the Consolidated Statements of Financial Condition

[2] This amount represents the fair value if credit risk related contingent features were triggered.

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Derivative Financial Instruments and Hedging Activities (Details) - Cash Flow Hedges (Cash Flow Hedging, USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 30, 2014	Dec. 31, 2013
Cash Flow Hedging
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Gross notional amount outstanding	$ 650,000	$ 0
Derivative asset fair value	1,156	0
Derivative liability fair value	$ (1,983)	$ 0
Weighted-average interest rate received	1.63%	0.00%
Weighted-average interest rate paid	0.16%	0.00%
Weighted-average maturity (in years)	4 years 9 months 8 days	0 years

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Acquisitions Schedule of Recognized Identified Assets Acquired and Liabilities Assumed (Details) (Banco Popular North America, USD $) In Thousands, unless otherwise specified	Aug. 08, 2014
Banco Popular North America
Assets
Cash and due from banks	$ 142,276
Commercial, industrial, and agricultural	76,680
Office, retail, and industrial	194,312
Multi-family	192,464
Other commercial real estate	57,111
Total commercial real estate	443,887
Consumer	28,819
Total loans	549,386
Goodwill	36,906
Intangible assets	8,003
Premises, furniture, and equipment	4,647
Accrued interest receivable and other assets	1,849
Total assets	743,067
Deposits:
Demand deposits	163,299
Savings deposits	91,205
NOW accounts	100,852
Money market deposits	181,730
Time deposits	194,786
Total deposits	731,872
Intangible liabilities	10,631
Accrued interest payable and other liabilities	564
Total liabilities	$ 743,067

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Past Due Loans, Allowance For Credit Losses, Impaired Loans and TDRS (Details) - Impaired Loans Individually Evaluated by Class (Continued) (USD $) In Thousands, unless otherwise specified	3 Months Ended				9 Months Ended
	Sep. 30, 2014		Sep. 30, 2013		Sep. 30, 2014		Sep. 30, 2013
Past Due Loans, Allowance For Credit Losses, and Impaired Loans (Details) - Impaired Loans Individually Evaluated by Class (Continued) [Line Items]
Average Recorded Investment	$ 48,191		$ 66,771		$ 49,452		$ 68,437
Interest Income Recognized	82	[1]	216	[1]	491	[1]	237	[1]
Commercial And Industrial
Past Due Loans, Allowance For Credit Losses, and Impaired Loans (Details) - Impaired Loans Individually Evaluated by Class (Continued) [Line Items]
Average Recorded Investment	20,137		20,665		15,222		22,862
Interest Income Recognized	57	[1]	195		204	[1]	198	[1]
Agricultural
Past Due Loans, Allowance For Credit Losses, and Impaired Loans (Details) - Impaired Loans Individually Evaluated by Class (Continued) [Line Items]
Average Recorded Investment	0		0		0		0
Interest Income Recognized	0	[1]	0		0	[1]	0	[1]
Office Retail And Industrial
Past Due Loans, Allowance For Credit Losses, and Impaired Loans (Details) - Impaired Loans Individually Evaluated by Class (Continued) [Line Items]
Average Recorded Investment	15,873		25,747		20,671		24,415
Interest Income Recognized	3	[1]	5		150	[1]	15	[1]
Multi-Family
Past Due Loans, Allowance For Credit Losses, and Impaired Loans (Details) - Impaired Loans Individually Evaluated by Class (Continued) [Line Items]
Average Recorded Investment	1,155		1,337		1,321		1,071
Interest Income Recognized	0	[1]	0		0	[1]	0	[1]
Construction
Past Due Loans, Allowance For Credit Losses, and Impaired Loans (Details) - Impaired Loans Individually Evaluated by Class (Continued) [Line Items]
Average Recorded Investment	5,792		6,511		5,537		5,987
Interest Income Recognized	0	[1]	0		0	[1]	0	[1]
Other Commercial Real Estate
Past Due Loans, Allowance For Credit Losses, and Impaired Loans (Details) - Impaired Loans Individually Evaluated by Class (Continued) [Line Items]
Average Recorded Investment	5,234		12,511		6,701		14,102
Interest Income Recognized	22	[1]	16		137	[1]	24	[1]
Total Commercial Real Estate
Past Due Loans, Allowance For Credit Losses, and Impaired Loans (Details) - Impaired Loans Individually Evaluated by Class (Continued) [Line Items]
Average Recorded Investment	28,054		46,106		34,230		45,575
Interest Income Recognized	$ 25	[1]	$ 21	[1]	$ 287	[1]	$ 39	[1]

[1] Recorded using the cash basis of accounting.

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Accounting Policies, by Policy (Policies)

9 Months Ended

Sep. 30, 2014

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation – The accompanying unaudited condensed consolidated interim financial statements of First Midwest Bancorp, Inc. (the “Company”), a Delaware corporation, were prepared in accordance with the rules and regulations of the Securities and Exchange Commission ("SEC") for quarterly reports on Form 10-Q and reflect all adjustments that management deems necessary for the fair presentation of the financial position and results of operations for the periods presented. The results of operations for the quarter and nine months ended September 30, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014.

The accounting and reporting policies of the Company and its subsidiaries conform to U.S. generally accepted accounting principles (“GAAP”) and general practices within the banking industry. The accompanying quarterly statements do not include certain information and footnote disclosures required by GAAP for complete annual financial statements. Therefore, these financial statements should be read in conjunction with the Company’s 2013 Annual Report on Form 10-K (“2013 10-K”). The Company uses the accrual basis of accounting for financial reporting purposes. Certain reclassifications were made to prior year amounts to conform to the current year presentation

Principles of Consolidation

Principles of Consolidation – The accompanying condensed consolidated financial statements include the financial position and results of operations of the Company and its subsidiaries after elimination of all significant intercompany accounts and transactions. Assets held in a fiduciary or agency capacity are not assets of the Company or its subsidiaries and are not included in the condensed consolidated financial statements.

Use of Estimates

Use of Estimates – The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Although these estimates and assumptions are based on the best available information, actual results could differ from those estimates.

The accounting policies related to business combinations, loans, the allowance for credit losses, the FDIC indemnification asset, and derivative financial instruments are presented below. For a summary of all other significant accounting policies, please refer to Note 1, “Summary of Significant Accounting Policies,” in the Company’s 2013 10-K.

Business Combinations

Business Combinations – Business combinations are accounted for under the acquisition method of accounting. Assets acquired and liabilities assumed are recorded at their estimated fair values as of the date of acquisition, with any excess of the purchase price of the acquisition over the fair value of the net tangible and intangible assets acquired recorded as goodwill. Alternatively, a gain is recorded if the fair value of assets purchased exceeds the fair value of liabilities assumed and consideration paid. The results of operations of the acquired business are included in the Consolidated Statements of Income from the effective date of the acquisition.

Loans

Loans – Loans held-for-investment are loans that the Company intends to hold until they are paid in full and are carried at the principal amount outstanding, including certain net deferred loan origination fees. Interest income on loans is accrued based on principal amounts outstanding. Loan origination fees, commitment fees, and certain direct loan origination costs are deferred, and the net amount is amortized as a yield adjustment over the contractual life of the related loans or commitments and included in interest income. Fees related to standby letters of credit are amortized into fee income over the contractual life of the commitment. Other credit-related fees are recognized as fee income when earned. Loans held-for-sale are carried at the lower of aggregate cost or fair value and included in other assets in the Consolidated Statements of Financial Condition.

Acquired and Covered Loans

Acquired and Covered Loans - Acquired loans consist primarily of loans that were acquired in business combinations. Covered loans consist of loans acquired by the Company in FDIC-assisted transactions, the majority of which are covered by loss share agreements with the FDIC (the “FDIC Agreements”), under which the FDIC reimburses the Company for the majority of the losses and eligible expenses related to these assets. No allowance for credit losses is recorded on acquired and covered loans at the acquisition date since business combination accounting requires that they are recorded at fair value.

Acquired and covered loans are separated into (i) non-purchased credit impaired ("Non-PCI") and (ii) purchased credit impaired ("PCI") loans. Non-PCI loans include loans that did not have evidence of credit deterioration since origination. PCI loans include loans that had evidence of credit deterioration since origination and for which it was probable at acquisition that the Company would not collect all contractually required principal and interest payments. Evidence of credit deterioration was evaluated using various indicators, such as past due and non-accrual status. Other key considerations included past performance of the institutions' credit underwriting standards, completeness and accuracy of credit files, maintenance of risk ratings, and age of appraisals. Leases and revolving loans do not qualify to be accounted for as PCI loans.

The acquisition adjustment related to Non-PCI loans is amortized into interest income over the contractual life of the related loans. As the acquisition adjustment is accreted into income over future periods, an allowance for credit losses will be established as necessary to reflect credit deterioration.

PCI loans are accounted for prospectively based on estimates of expected future cash flows. To estimate the fair value, the Company generally aggregates purchased consumer loans and certain smaller balance commercial loans into pools of loans with common risk characteristics, such as delinquency status, credit score, and internal risk rating. The fair values of larger balance commercial loans are estimated on an individual basis. Expected future cash flows in excess of the fair value of loans at the purchase date (“accretable yield”) are recorded as interest income over the life of the loans if the timing and amount of the expected future cash flows can be reasonably estimated. The non-accretable yield represents the difference between contractually required payments and the expected future cash flows determined at acquisition. Subsequent increases in expected future cash flows are recognized as interest income prospectively. The present value of any decreases in expected future cash flows is recognized by recording a charge-off through the allowance for loan and covered loan losses or establishing an allowance for loan and covered loan losses.

Non-accrual Loans

Non-accrual Loans– Generally, corporate loans are placed on non-accrual status (i) when either principal or interest payments become 90 days or more past due unless the loan is sufficiently collateralized such that full repayment of both principal and interest is expected and is in the process of collection within a reasonable period or (ii) when an individual analysis of a borrower’s creditworthiness warrants a downgrade to non-accrual regardless of past due status. When a loan is placed on non-accrual status, unpaid interest credited to income in the current year is reversed, and unpaid interest accrued in prior years is charged against the allowance for loan losses. After the loan is placed on non-accrual, all debt service payments are applied to the principal on the loan. Future interest income may only be recorded on a cash basis after recovery of principal is reasonably assured. Non-accrual loans are returned to accrual status when the financial position of the borrower and other relevant factors indicate that the Company will collect all principal and interest.

Commercial loans and loans secured by real estate are charged-off when deemed uncollectible. A loss is recorded if the net realizable value of the underlying collateral is less than the outstanding principal and interest. Consumer loans that are not secured by real estate are subject to mandatory charge-off at a specified delinquency date and are usually not classified as non-accrual prior to being charged-off. Closed-end consumer loans, which include installment, automobile, and single payment loans, are usually charged-off no later than the end of the month in which the loan becomes 120 days past due.

PCI loans are generally considered accruing loans unless reasonable estimates of the timing and amount of expected future cash flows cannot be determined. Loans without reasonable future cash flow estimates are classified as non-accrual loans, and interest income is not recognized on those loans until the timing and amount of the expected future cash flows can be reasonably determined.

Troubled Debt Restructurings (“TDRs”)

Troubled Debt Restructurings (“TDRs”) – A restructuring is considered a TDR when (i) the borrower is experiencing financial difficulties and (ii) the creditor grants a concession, such as forgiveness of principal, reduction of the interest rate, changes in payments, or extension of the maturity date. Loans are not classified as TDRs when the modification is short-term or results in an insignificant delay in payments. The Company’s TDRs are determined on a case-by-case basis.

The Company does not accrue interest on a TDR unless it believes collection of all principal and interest under the modified terms is reasonably assured. For a TDR to begin accruing interest, the borrower must demonstrate both some level of past performance and the future capacity to perform under the modified terms. Generally, six months of consecutive payment performance under the restructured terms is required before a TDR is returned to accrual status. However, the period could vary depending on the individual facts and circumstances of the loan. An evaluation of the borrower’s current creditworthiness is used to assess the borrower’s capacity to repay the loan under the modified terms. This evaluation includes an estimate of expected future cash flows, evidence of strong financial position, and estimates of the value of collateral, if applicable. For TDRs to be removed from TDR status in the calendar year after the restructuring, the loans must (i) have an interest rate and terms that reflect market conditions at the time of restructuring, and (ii) be in compliance with the modified terms. If the loan was restructured at below market rates and terms, it continues to be separately reported as restructured until it is paid in full or charged-off.

Impaired Loans

Impaired Loans – Impaired loans consist of corporate non-accrual loans and TDRs.

A loan is considered impaired when it is probable that the Company will not collect all contractual principal and interest. With the exception of accruing TDRs, impaired loans are classified as non-accrual and are exclusive of smaller homogeneous loans, such as home equity, 1-4 family mortgages, and installment loans. Impaired loans with balances under a specified threshold are not individually evaluated for impairment. For all other impaired loans, impairment is measured by comparing the estimated value of the loan to the recorded book value. The value of collateral-dependent loans is based on the fair value of the underlying collateral, less costs to sell. The value of other loans is measured using the present value of expected future cash flows discounted at the loan’s initial effective interest rate.

90-Days Past Due Loans

90-Days Past Due Loans –The Company’s accrual of interest on loans is discontinued at the time the loan is 90 days past due unless the credit is sufficiently collateralized and in the process of renewal or collection.

Allowance for Credit Losses

Allowance for Credit Losses – The allowance for credit losses is comprised of the allowance for loan losses, the allowance for covered loan losses, and the reserve for unfunded commitments, and is maintained by management at a level believed adequate to absorb estimated losses inherent in the existing loan portfolio. Determination of the allowance for credit losses is subjective since it requires significant estimates and management judgment, including the amounts and timing of expected future cash flows on impaired loans, estimated losses on pools of homogeneous loans, consideration of current economic trends, and other factors.

Loans deemed to be uncollectible are charged-off against the allowance for loan and covered loan losses, while recoveries of amounts previously charged-off are credited to the allowance for loan and covered loan losses. Additions to the allowance for loan and covered loan losses are charged to expense through the provision for loan and covered loan losses. The amount of provision depends on a number of factors, including net charge-off levels, loan growth, changes in the composition of the loan portfolio, and the Company’s assessment of the allowance for loan and covered loan losses based on the methodology discussed below.

Allowance for Loan Losses– The allowance for loan losses consists of (i) specific reserves for individual loans where the recorded investment exceeds the value, (ii) an allowance based on a loss migration analysis that uses historical credit loss experience for each loan category, and (iii) an allowance based on other internal and external qualitative factors.

The specific reserves component of the allowance for loan losses is based on a periodic analysis of impaired loans exceeding a fixed dollar amount. If the value of an impaired loan is less than the recorded book value, the Company either establishes a valuation allowance (i.e., a specific reserve) equal to the excess of the book value over the value of the loan as a component of the allowance for loan losses or charges off the amount if it is a confirmed loss.

The general reserve component is based on a loss migration analysis, which examines actual loss experience by loan category for a rolling 8-quarter period and the related internal risk rating for corporate loans. The loss migration analysis is updated quarterly primarily using actual loss experience. This component is then adjusted based on management’s consideration of many internal and external qualitative factors, including:

• Changes in the composition of the loan portfolio, trends in the volume of loans, and trends in delinquent and non-accrual loans that could indicate that historical trends do not reflect current conditions.

• Changes in credit policies and procedures, such as underwriting standards and collection, charge-off, and recovery practices.

• Changes in the experience, ability, and depth of credit management and other relevant staff.

• Changes in the quality of the Company’s loan review system and Board of Directors oversight.

• The effect of any concentration of credit and changes in the level of concentrations, such as loan type or risk rating.

• Changes in the value of the underlying collateral for collateral-dependent loans.

• Changes in the national and local economy that affect the collectability of various segments of the portfolio.

• The effect of other external factors, such as competition and legal and regulatory requirements, on the Company’s loan portfolio.

Allowance for Covered Loan Losses– The Company’s allowance for covered loan losses reflects the difference between the carrying value and the expected future cash flows of the covered PCI loans. On a periodic basis, the adequacy of this allowance is determined through a re-estimation of expected future cash flows on all of the outstanding covered PCI loans using either a probability of default/loss given default (“PD/LGD”) methodology or a specific review methodology. The PD/LGD model is a loss model that estimates expected future cash flows using a probability of default curve and loss given default estimates.

Reserve for Unfunded Commitments– The Company also maintains a reserve for unfunded commitments, including letters of credit, for the risk of loss inherent in these arrangements. The reserve for unfunded commitments is estimated using the loss migration analysis from the allowance for loan losses, adjusted for probabilities of future funding requirements. The reserve for unfunded commitments is included in other liabilities in the Consolidated Statements of Financial Condition.

The establishment of the allowance for credit losses involves a high degree of judgment given the difficulty of assessing the factors impacting loan repayment and estimating the timing and amount of losses. While management utilizes its best judgment and information available, the adequacy of the allowance for credit losses depends on a variety of factors beyond the Company’s control, including the performance of its loan portfolio, the economy, changes in interest rates and property values, and the interpretation of loan risk classifications by regulatory authorities.

FDIC Indemnification Asset

FDIC Indemnification Asset – The majority of loans and OREO acquired through FDIC-assisted transactions are covered by the FDIC Agreements. The FDIC indemnification asset represents the present value of future expected reimbursements from the FDIC. Since the indemnified items are covered loans and covered OREO, which are initially measured at fair value, the FDIC indemnification asset is also initially measured at fair value by discounting the expected future cash flows to be received from the FDIC. These expected future cash flows are estimated by multiplying estimated losses on covered PCI loans and covered OREO by the reimbursement rates in the FDIC Agreements.

The balance of the FDIC indemnification asset is adjusted periodically to reflect changes in expected future cash flows. Decreases in estimated reimbursements from the FDIC are recorded prospectively through amortization and increases in estimated reimbursements from the FDIC are recognized by an increase in the carrying value of the indemnification asset. Payments from the FDIC for reimbursement of losses result in a reduction of the FDIC indemnification asset.

Derivative Financial Instruments

Derivative Financial Instruments – In the ordinary course of business, the Company enters into derivative transactions as part of its overall interest rate risk management strategy to minimize significant unplanned fluctuations in earnings and expected future cash flows caused by interest rate volatility. All derivative instruments are recorded at fair value as either other assets or other liabilities in the Consolidated Statements of Financial Condition. Subsequent changes in a derivative’s fair value are recognized in earnings unless specific hedge accounting criteria are met.

On the date the Company enters into a derivative contract, the derivative is designated as a fair value hedge, a cash flow hedge, or a non-hedge derivative instrument. Fair value hedges are designed to mitigate exposure to changes in the fair value of an asset or liability attributable to a particular risk, such as interest rate risk. Cash flow hedges are designed to mitigate exposure to variability in expected future cash flows to be received or paid related to an asset, liability, or other type of forecasted transaction. The Company formally documents all relationships between hedging instruments and hedged items, including its risk management objective and strategy.

At the hedge’s inception and quarterly thereafter, a formal assessment is performed to determine the effectiveness of the derivative in offsetting changes in the fair values or expected future cash flows of the hedged items in the current period and prospectively. If a derivative instrument designated as a hedge is terminated or ceases to be highly effective, hedge accounting is discontinued prospectively, and the gain or loss is amortized into earnings. For fair value hedges, the gain or loss is amortized over the remaining life of the hedged asset or liability. For cash flow hedges, the gain or loss is amortized over the same period that the forecasted hedged transactions impact earnings. If the hedged item is disposed of, any fair value adjustments are included in the gain or loss from the disposition of the hedged item. If the forecasted transaction is no longer probable, the gain or loss is included in earnings immediately.

For effective fair value hedges, changes in the fair value of the derivative instruments, as well as changes in the fair value of the hedged item, are recognized in earnings. For cash flow hedges, the effective portion of the change in fair value of the derivative instrument is reported as a component of accumulated other comprehensive loss and is reclassified to earnings when the hedged transaction is reflected in earnings.

Ineffectiveness is calculated based on the change in fair value of the hedged item compared with the change in fair value of the hedging instrument. For all types of hedges, any ineffectiveness in the hedging relationship is recognized in earnings during the period the ineffectiveness occurs.

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Past Due Loans, Allowance For Credit Losses, Impaired Loans and TDRS (Tables)

9 Months Ended

Sep. 30, 2014

Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract]

Past Due Financing Receivables

The following table presents an aging analysis of the Company’s past due loans as of September 30, 2014 and December 31, 2013. The aging is determined without regard to accrual status. The table also presents non-performing loans, consisting of non-accrual loans (the majority of which are past due) and loans 90 days or more past due and still accruing interest, as of each balance sheet date.

Aging Analysis of Past Due Loans and Non-Performing Loans by Class

(Dollar amounts in thousands)

	Aging Analysis (Accruing and Non-accrual)										Non-performing Loans
	Current		30-89 Days Past Due		90 Days or More Past Due		Total Past Due		Total Loans		Non- accrual Loans		90 Days Past Due Loans, Still Accruing Interest
September 30, 2014
Commercial and industrial	$	2,197,785	$	6,216	$	4,165	$	10,381	$	2,208,166	$	19,696	$	1,256
Agricultural	347,179		—		332		332		347,511		361		—
Commercial real estate:
Office, retail, and industrial	1,401,990		1,842		18,690		20,532		1,422,522		16,963		3,840
Multi-family	557,852		641		1,196		1,837		559,689		1,536		—
Construction	186,363		—		7,082		7,082		193,445		7,082		—
Other commercial real estate	861,061		4,461		6,303		10,764		871,825		7,912		150
Total commercial real   estate	3,007,266		6,944		33,271		40,215		3,047,481		33,493		3,990
Total corporate loans	5,552,230		13,160		37,768		50,928		5,603,158		53,550		5,246
Home equity	509,530		3,525		4,391		7,916		517,446		5,834		587
1-4 family mortgages	234,672		1,935		1,565		3,500		238,172		3,235		126
Installment	66,997		428		2,003		2,431		69,428		1,909		103
Total consumer loans	811,199		5,888		7,959		13,847		825,046		10,978		816
Total loans, excluding   covered loans	6,363,429		19,048		45,727		64,775		6,428,204		64,528		6,062
Covered loans	73,370		954		16,551		17,505		90,875		10,905		7,031
Total loans	$	6,436,799	$	20,002	$	62,278	$	82,280	$	6,519,079	$	75,433	$	13,093
December 31, 2013
Commercial and industrial	$	1,814,660	$	6,872	$	9,106	$	15,978	$	1,830,638	$	11,767	$	393
Agricultural	321,156		134		412		546		321,702		519		—
Commercial real estate:
Office, retail, and industrial	1,335,027		2,620		16,038		18,658		1,353,685		17,076		1,315
Multi-family	330,960		318		1,595		1,913		332,873		1,848		—
Construction	180,083		23		6,091		6,114		186,197		6,297		—
Other commercial real estate	795,462		5,365		6,244		11,609		807,071		8,153		258
Total commercial real   estate	2,641,532		8,326		29,968		38,294		2,679,826		33,374		1,573
Total corporate loans	4,777,348		15,332		39,486		54,818		4,832,166		45,660		1,966
Home equity	415,791		4,830		6,399		11,229		427,020		6,864		1,102
1-4 family mortgages	268,912		2,046		5,034		7,080		275,992		5,198		548
Installment	42,350		330		2,147		2,477		44,827		2,076		92
Total consumer loans	727,053		7,206		13,580		20,786		747,839		14,138		1,742
Total loans, excluding   covered loans	5,504,401		22,538		53,066		75,604		5,580,005		59,798		3,708
Covered loans	94,211		2,232		37,912		40,144		134,355		20,942		18,081
Total loans	$	5,598,612	$	24,770	$	90,978	$	115,748	$	5,714,360	$	80,740	$	21,789

Allowance for Credit Losses on Financing Receivables

A rollforward of the allowance for credit losses by portfolio segment for the quarters and nine months ended September 30, 2014 and 2013 is presented in the table below.

Allowance for Credit Losses by Portfolio Segment

(Dollar amounts in thousands)

	Commercial, Industrial, and Agricultural			Office, Retail, and Industrial			Multi- Family			Construction			Other Commercial Real Estate			Consumer			Covered Loans			Reserve for Unfunded Commitments			Total Allowance
Quarter ended September 30, 2014
Beginning balance	$	29,194		$	11,831		$	2,048		$	4,885		$	8,585		$	12,440		$	9,343		$	1,616		$	79,942
Charge-offs	(9,763		)	(2,514		)	(26		)	(157		)	(1,363		)	(3,148		)	(135		)	—			(17,106		)
Recoveries	716			55			—			—			108			150			130			—			1,159
Net charge-offs	(9,047		)	(2,459		)	(26		)	(157		)	(1,255		)	(2,998		)	(5		)	—			(15,947		)
Provision for loan   and covered loan   losses and other	10,458			265			(65		)	(3,130		)	189			3,699			(689		)	—			10,727
Ending balance	$	30,605		$	9,637		$	1,957		$	1,598		$	7,519		$	13,141		$	8,649		$	1,616		$	74,722
Quarter ended September 30, 2013
Beginning balance	$	31,742		$	11,857		$	3,424		$	4,170		$	16,169		$	12,367		$	14,381		$	2,866		$	96,976
Charge-offs	(2,719		)	(987		)	(112		)	(470		)	(889		)	(2,482		)	(1,636		)	—			(9,295		)
Recoveries	521			31			—			57			253			374			7			—			1,243
Net charge-offs	(2,198		)	(956		)	(112		)	(413		)	(636		)	(2,108		)	(1,629		)	—			(8,052		)
Provision for loan   and covered loan   losses and other	2,452			938			(31		)	(100		)	(1,218		)	2,425			304			(480		)	4,290
Ending balance	$	31,996		$	11,839		$	3,281		$	3,657		$	14,315		$	12,684		$	13,056		$	2,386		$	93,214
Nine months ended September 30, 2014
Beginning balance	$	30,381		$	10,405		$	2,017		$	6,316		$	10,817		$	13,010		$	12,559		$	1,616		$	87,121
Charge-offs	(15,542		)	(7,108		)	(383		)	(1,052		)	(3,695		)	(7,005		)	(659		)	—			(35,444		)
Recoveries	3,135			403			3			160			341			502			992			—			5,536
Net charge-offs	(12,407		)	(6,705		)	(380		)	(892		)	(3,354		)	(6,503		)	333			—			(29,908		)
Provision for loan   and covered loan   losses and other	12,631			5,937			320			(3,826		)	56			6,634			(4,243		)	—			17,509
Ending balance	$	30,605		$	9,637		$	1,957		$	1,598		$	7,519		$	13,141		$	8,649		$	1,616		$	74,722
Nine months ended September 30, 2013
Beginning balance	$	36,761		$	11,432		$	3,575		$	5,242		$	17,512		$	12,862		$	12,062		$	3,366		$	102,812
Charge-offs	(9,010		)	(3,702		)	(490		)	(1,885		)	(3,971		)	(7,369		)	(4,322		)	—			(30,749		)
Recoveries	3,183			68			35			62			1,614			894			18			—			5,874
Net charge-offs	(5,827		)	(3,634		)	(455		)	(1,823		)	(2,357		)	(6,475		)	(4,304		)	—			(24,875		)
Provision for loan   and covered loan   losses and other	1,062			4,041			161			238			(840		)	6,297			5,298			(980		)	15,277
Ending balance	$	31,996		$	11,839		$	3,281		$	3,657		$	14,315		$	12,684		$	13,056		$	2,386		$	93,214

Schedule of Loans and The Related Allowance For Credit Losses

The table below provides a breakdown of loans and the related allowance for credit losses by portfolio segment as of September 30, 2014 and December 31, 2013.

Loans and Related Allowance for Credit Losses by Portfolio Segment

(Dollar amounts in thousands)

	Loans								Allowance for Credit Losses
	Individually Evaluated for Impairment		Collectively Evaluated for Impairment		PCI		Total		Individually Evaluated for Impairment		Collectively Evaluated for Impairment		PCI		Total
September 30, 2014
Commercial, industrial, and   agricultural	$	18,547	$	2,535,395	$	1,735	$	2,555,677	$	3,599	$	27,006	$	—	$	30,605
Commercial real estate:
Office, retail, and industrial	16,140		1,406,307		75		1,422,522		—		9,637		—		9,637
Multi-family	1,141		554,814		3,734		559,689		—		1,942		15		1,957
Construction	6,859		186,586		—		193,445		—		1,598		—		1,598
Other commercial real estate	4,719		860,410		6,696		871,825		—		7,519		—		7,519
Total commercial   real estate	28,859		3,008,117		10,505		3,047,481		—		20,696		15		20,711
Total corporate loans	47,406		5,543,512		12,240		5,603,158		3,599		47,702		15		51,316
Consumer	—		816,349		8,697		825,046		—		12,588		553		13,141
Total loans, excluding   covered loans	47,406		6,359,861		20,937		6,428,204		3,599		60,290		568		64,457
Covered loans	—		26,860		64,015		90,875		—		578		8,071		8,649
Reserve for unfunded   commitments	—		—		—		—		—		1,616		—		1,616
Total loans	$	47,406	$	6,386,721	$	84,952	$	6,519,079	$	3,599	$	62,484	$	8,639	$	74,722
December 31, 2013
Commercial, industrial, and   agricultural	$	13,178	$	2,137,440	$	1,722	$	2,152,340	$	4,046	$	26,335	$	—	$	30,381
Commercial real estate:
Office, retail, and industrial	26,348		1,327,337		—		1,353,685		214		10,191		—		10,405
Multi-family	1,296		331,445		132		332,873		18		1,999		—		2,017
Construction	5,712		180,485		—		186,197		178		6,138		—		6,316
Other commercial real estate	9,298		793,703		4,070		807,071		704		10,113		—		10,817
Total commercial   real estate	42,654		2,632,970		4,202		2,679,826		1,114		28,441		—		29,555
Total corporate loans	55,832		4,770,410		5,924		4,832,166		5,160		54,776		—		59,936
Consumer	—		738,155		9,684		747,839		—		13,010		—		13,010
Total loans, excluding   covered loans	55,832		5,508,565		15,608		5,580,005		5,160		67,786		—		72,946
Covered loans	—		30,830		103,525		134,355		—		702		11,857		12,559
Reserve for unfunded   commitments	—		—		—		—		—		1,616		—		1,616
Total loans	$	55,832	$	5,539,395	$	119,133	$	5,714,360	$	5,160	$	70,104	$	11,857	$	87,121

Impaired Financing Receivables

The following table presents loans individually evaluated for impairment by class of loan as of September 30, 2014 and December 31, 2013. PCI loans are excluded from this disclosure.

Impaired Loans Individually Evaluated by Class

(Dollar amounts in thousands)

	September 30, 2014								December 31, 2013
	Recorded Investment In								Recorded Investment In
	Loans with No Specific Reserve		Loans with a Specific Reserve		Unpaid Principal Balance		Specific Reserve		Loans with No Specific Reserve		Loans with a Specific Reserve		Unpaid Principal Balance		Specific Reserve
Commercial and industrial	$	2,524	$	16,023	$	40,067	$	2,968	$	10,047	$	3,131	$	25,887	$	4,046
Agricultural	—		—		—		—		—		—		—		—
Commercial real estate:
Office, retail, and industrial	16,140		—		25,614		—		23,872		2,476		35,868		214
Multi-family	1,141		—		1,268		—		1,098		198		1,621		18
Construction	6,859		—		8,412		—		4,586		1,126		10,037		178
Other commercial real estate	4,719		—		6,979		—		7,553		1,745		11,335		704
Total commercial real   estate	28,859		—		42,273		—		37,109		5,545		58,861		1,114
Total impaired loans    individually evaluated    for impairment	$	31,383	$	16,023	$	82,340	$	2,968	$	47,156	$	8,676	$	84,748	$	5,160

Impaired Financing Receivables Continued

The following table presents the average recorded investment and interest income recognized on impaired loans by class for the quarters and nine months ended September 30, 2014 and 2013. PCI loans are excluded from this disclosure.

Average Recorded Investment and Interest Income Recognized on Impaired Loans by Class

(Dollar amounts in thousands)

	Quarters Ended September 30,
	2014				2013
	Average Recorded Investment		Interest Income Recognized (1)		Average Recorded Investment		Interest Income Recognized (1)
Commercial and industrial	$	20,137	$	57	$	20,665	$	195
Agricultural	—		—		—		—
Commercial real estate:
Office, retail, and industrial	15,873		3		25,747		5
Multi-family	1,155		—		1,337		—
Construction	5,792		—		6,511		—
Other commercial real estate	5,234		22		12,511		16
Total commercial real estate	28,054		25		46,106		21
Total impaired loans	$	48,191	$	82	$	66,771	$	216
	Nine Months Ended September 30,
	2014				2013
	Average Recorded Investment		Interest Income Recognized (1)		Average Recorded Investment		Interest Income Recognized (1)
Commercial and industrial	$	15,222	$	204	$	22,862	$	198
Agricultural	—		—		—		—
Commercial real estate:
Office, retail, and industrial	20,671		150		24,415		15
Multi-family	1,321		—		1,071		—
Construction	5,537		—		5,987		—
Other commercial real estate	6,701		137		14,102		24
Total commercial real estate	34,230		287		45,575		39
Total impaired loans	$	49,452	$	491	$	68,437	$	237

⁽¹⁾  Recorded using the cash basis of accounting.

Financing Receivable Credit Quality Indicators

The following tables present credit quality indicators by class for corporate and consumer loans, excluding covered loans, as of September 30, 2014 and December 31, 2013.

Corporate Credit Quality Indicators by Class, Excluding Covered Loans

(Dollar amounts in thousands)

	Pass		Special Mention (1) (4)		Substandard (2) (4)		Non-accrual (3)		Total
September 30, 2014
Commercial and industrial	$	2,094,453	$	66,429	$	27,588	$	19,696	$	2,208,166
Agricultural	346,851		299		—		361		347,511
Commercial real estate:
Office, retail, and industrial	1,343,833		28,586		33,140		16,963		1,422,522
Multi-family	545,419		5,916		6,818		1,536		559,689
Construction	162,527		7,229		16,607		7,082		193,445
Other commercial real estate	816,679		22,824		24,410		7,912		871,825
Total commercial real estate	2,868,458		64,555		80,975		33,493		3,047,481
Total corporate loans	$	5,309,762	$	131,283	$	108,563	$	53,550	$	5,603,158
December 31, 2013
Commercial and industrial	$	1,780,194	$	23,806	$	14,871	$	11,767	$	1,830,638
Agricultural	320,839		344		—		519		321,702
Commercial real estate:
Office, retail, and industrial	1,284,394		28,677		23,538		17,076		1,353,685
Multi-family	326,901		3,214		910		1,848		332,873
Construction	153,949		8,309		17,642		6,297		186,197
Other commercial real estate	761,465		14,877		22,576		8,153		807,071
Total commercial real estate	2,526,709		55,077		64,666		33,374		2,679,826
Total corporate loans	$	4,627,742	$	79,227	$	79,537	$	45,660	$	4,832,166

⁽¹⁾  Loans categorized as special mention exhibit potential weaknesses that require the close attention of management since these potential weaknesses may result in the deterioration of repayment prospects in the future.

⁽²⁾  Loans categorized as substandard exhibit a well-defined weakness or weaknesses that may jeopardize the liquidation of the debt. These loans continue to accrue interest because they are well secured and collection of principal and interest is expected within a reasonable time.

⁽³⁾  Loans categorized as non-accrual exhibit a well-defined weakness or weaknesses that may jeopardize the liquidation of the debt or result in a loss if the deficiencies are not corrected.

⁽⁴⁾  Total special mention and substandard loans includes accruing TDRs of $3.5 million as of September 30, 2014 and $2.8 million as of December 31, 2013.

Financing Receivable Credit Quality Indicators Continued

Consumer Credit Quality Indicators by Class, Excluding Covered Loans

(Dollar amounts in thousands)

	Performing		Non-accrual		Total
September 30, 2014
Home equity	$	511,612	$	5,834	$	517,446
1-4 family mortgages	234,937		3,235		238,172
Installment	67,519		1,909		69,428
Total consumer loans	$	814,068	$	10,978	$	825,046
December 31, 2013
Home equity	$	420,156	$	6,864	$	427,020
1-4 family mortgages	270,794		5,198		275,992
Installment	42,751		2,076		44,827
Total consumer loans	$	733,701	$	14,138	$	747,839

Troubled Debt Restructuring by Class

The table below presents TDRs by class as of September 30, 2014 and December 31, 2013. A discussion of our accounting policies for TDRs can be found in Note 1, “Summary of Significant Accounting Policies.”

TDRs by Class

(Dollar amounts in thousands)

	As of September 30, 2014						As of December 31, 2013
	Accruing		Non-accrual (1)		Total		Accruing		Non-accrual (1)		Total
Commercial and industrial	$	2,163	$	15,806	$	17,969	$	6,538	$	2,121	$	8,659
Agricultural	—		—		—		—		—		—
Commercial real estate:
Office, retail, and industrial	592		—		592		10,271		—		10,271
Multi-family	616		237		853		1,038		253		1,291
Construction	—		—		—		—		—		—
Other commercial real estate	441		186		627		4,326		291		4,617
Total commercial real estate	1,649		423		2,072		15,635		544		16,179
Total corporate loans	3,812		16,229		20,041		22,173		2,665		24,838
Home equity	752		513		1,265		787		512		1,299
1-4 family mortgages	885		235		1,120		810		906		1,716
Installment	—		—		—		—		—		—
Total consumer loans	1,637		748		2,385		1,597		1,418		3,015
Total loans	$	5,449	$	16,977	$	22,426	$	23,770	$	4,083	$	27,853

⁽¹⁾  These TDRs are included in non-accrual loans in the preceding tables.

Troubled Debt Restructurings on Financing Receivables

The following table presents a summary of loans that were restructured during the quarters and nine months ended September 30, 2014 and 2013.

Loans Restructured During the Period

(Dollar amounts in thousands)

	Number of Loans	Pre- Modification Recorded Investment		Funds Disbursed		Interest and Escrow Capitalized		Charge-offs		Post- Modification Recorded Investment
Quarter ended September 30, 2014
Commercial and industrial	5	$	23,015	$	—	$	—	$	—	$	23,015
Office, retail, and industrial	1	417		—		—		—		417
Total TDRs restructured during the period	6	$	23,432	$	—	$	—	$	—	$	23,432
Quarter ended September 30, 2013
Commercial and industrial	3	$	369	$	—	$	—	$	—	$	369
Office, retail, and industrial	2	1,674		—		—		—		1,674
Other commercial real estate	1	10		—		—		—		10
Home equity	8	822		—		—		—		822
Total TDRs restructured during the period	14	$	2,875	$	—	$	—	$	—	$	2,875
Nine months ended September 30, 2014
Commercial and industrial	5	$	23,015	$	—	$	—	$	—	$	23,015
Office, retail, and industrial	1	417		—		—		—		417
Home equity	1	75		—		—		—		75
Total TDRs restructured during the period	7	$	23,507	$	—	$	—	$	—	$	23,507
Nine months ended September 30, 2013
Commercial and industrial	7	$	14,439	$	—	$	2	$	—	$	14,441
Office, retail, and industrial	6	2,275		30		—		—		2,305
Multi-family	5	1,275		—		57		—		1,332
Construction	2	508		—		—		—		508
Other commercial real estate	5	526		—		—		—		526
Home equity	9	947		—		—		—		947
1-4 family mortgages	1	132		—		4		—		136
Total TDRs restructured during the period	35	$	20,102	$	30	$	63	$	—	$	20,195

Schedule of Troubled Debt Restructurings That Defaulted Within Twelve Months of the Restructured Date

The following table presents TDRs that had payment defaults during the quarters and nine months ended September 30, 2014 and 2013 where the default occurred within twelve months of the restructure date.

TDRs That Defaulted Within Twelve Months of the Restructure Date

(Dollar amounts in thousands)

	Quarters Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
	Number of Loans	Recorded Investment		Number of Loans	Recorded Investment		Number of Loans	Recorded Investment		Number of Loans	Recorded Investment
Commercial and industrial	—	$	—	—	$	—	2	$	125	1	$	350
Other commercial real estate	—	—		—	—		—	—		3	354
Home equity	1	77		—	—		1	77		—	—
Total	1	$	77	—	$	—	3	$	202	4	$	704

Troubled Debt Restructuring Activity Rollforward

A rollforward of the carrying value of TDRs for the quarters and nine months ended September 30, 2014 and 2013 is presented in the following table.

TDR Rollforward

(Dollar amounts in thousands)

	Quarters Ended   September 30,						Nine Months Ended   September 30,
	2014			2013			2014			2013
Accruing
Beginning balance	$	5,697		$	8,287		$	23,770		$	6,867
Additions	417			1,128			492			4,606
Net payments received	(109		)	(248		)	(1,219		)	(415		)
Returned to performing status	—			—			(18,821		)	(5,037		)
Net transfers from non-accrual	(556		)	15,162			1,227			18,308
Ending balance	5,449			24,329			5,449			24,329
Non-accrual
Beginning balance	1,700			18,450			4,083			10,924
Additions	23,015			1,747			23,015			15,589
Net payments received	(135		)	(201		)	(292		)	(735		)
Charge-offs	(8,159		)	(62		)	(8,345		)	(1,850		)
Transfers to OREO	—			(35		)	(257		)	(77		)
Loans sold	—			—			—			(806		)
Net transfers to accruing	556			(15,162		)	(1,227		)	(18,308		)
Ending balance	16,977			4,737			16,977			4,737
Total TDRs	$	22,426		$	29,066		$	22,426		$	29,066

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Past Due Loans, Allowance For Credit Losses, Impaired Loans and TDRS (Details) - Loans and Related Allowance for Credit Losses by Portfolio Segment (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Jun. 30, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Dec. 31, 2012
Loans [Abstract]
Total Loans	$ 6,519,079		$ 5,714,360
Allowance for Credit Losses [Abstract]
Total allowance for credit losses	74,722	79,942	87,121	93,214	96,976	102,812
Commercial, Industrial, And Agricultural
Loans [Abstract]
Individually Evaluated for Impairment	18,547		13,178
Collectively Evaluated for Impairment	2,535,395		2,137,440
PCI	1,735		1,722
Total Loans	2,555,677		2,152,340
Allowance for Credit Losses [Abstract]
Individually Evaluated for Impairment	3,599		4,046
Collectively Evaluated for Impairment	27,006		26,335
PCI	0		0
Total allowance for credit losses	30,605		30,381
Office Retail And Industrial
Loans [Abstract]
Individually Evaluated for Impairment	16,140		26,348
Collectively Evaluated for Impairment	1,406,307		1,327,337
PCI	75		0
Total Loans	1,422,522		1,353,685
Allowance for Credit Losses [Abstract]
Individually Evaluated for Impairment	0		214
Collectively Evaluated for Impairment	9,637		10,191
PCI	0		0
Total allowance for credit losses	9,637		10,405
Multi-Family
Loans [Abstract]
Individually Evaluated for Impairment	1,141		1,296
Collectively Evaluated for Impairment	554,814		331,445
PCI	3,734		132
Total Loans	559,689		332,873
Allowance for Credit Losses [Abstract]
Individually Evaluated for Impairment	0		18
Collectively Evaluated for Impairment	1,942		1,999
PCI	15		0
Total allowance for credit losses	1,957		2,017
Construction
Loans [Abstract]
Individually Evaluated for Impairment	6,859		5,712
Collectively Evaluated for Impairment	186,586		180,485
PCI	0		0
Total Loans	193,445		186,197
Allowance for Credit Losses [Abstract]
Individually Evaluated for Impairment	0		178
Collectively Evaluated for Impairment	1,598		6,138
PCI	0		0
Total allowance for credit losses	1,598		6,316
Other Commercial Real Estate
Loans [Abstract]
Individually Evaluated for Impairment	4,719		9,298
Collectively Evaluated for Impairment	860,410		793,703
PCI	6,696		4,070
Total Loans	871,825		807,071
Allowance for Credit Losses [Abstract]
Individually Evaluated for Impairment	0		704
Collectively Evaluated for Impairment	7,519		10,113
PCI	0		0
Total allowance for credit losses	7,519		10,817
Commercial Real Estate
Loans [Abstract]
Individually Evaluated for Impairment	28,859		42,654
Collectively Evaluated for Impairment	3,008,117		2,632,970
PCI	10,505		4,202
Total Loans	3,047,481		2,679,826
Allowance for Credit Losses [Abstract]
Individually Evaluated for Impairment	0		1,114
Collectively Evaluated for Impairment	20,696		28,441
PCI	15		0
Total allowance for credit losses	20,711		29,555
Total Corporate Loans
Loans [Abstract]
Individually Evaluated for Impairment	47,406		55,832
Collectively Evaluated for Impairment	5,543,512		4,770,410
PCI	12,240		5,924
Total Loans	5,603,158		4,832,166
Allowance for Credit Losses [Abstract]
Individually Evaluated for Impairment	3,599		5,160
Collectively Evaluated for Impairment	47,702		54,776
PCI	15		0
Total allowance for credit losses	51,316		59,936
Consumer
Loans [Abstract]
Individually Evaluated for Impairment	0		0
Collectively Evaluated for Impairment	816,349		738,155
PCI	8,697		9,684
Total Loans	825,046		747,839
Allowance for Credit Losses [Abstract]
Individually Evaluated for Impairment	0		0
Collectively Evaluated for Impairment	12,588		13,010
PCI	553		0
Total allowance for credit losses	13,141		13,010
Total Loans Excluding Covered Loans
Loans [Abstract]
Individually Evaluated for Impairment	47,406		55,832
Collectively Evaluated for Impairment	6,359,861		5,508,565
PCI	20,937		15,608
Total Loans	6,428,204		5,580,005
Allowance for Credit Losses [Abstract]
Individually Evaluated for Impairment	3,599		5,160
Collectively Evaluated for Impairment	60,290		67,786
PCI	568		0
Total allowance for credit losses	64,457		72,946
Covered Loans
Loans [Abstract]
Individually Evaluated for Impairment	0		0
Collectively Evaluated for Impairment	26,860		30,830
PCI	64,015		103,525
Total Loans	90,875		134,355
Allowance for Credit Losses [Abstract]
Individually Evaluated for Impairment	0		0
Collectively Evaluated for Impairment	578		702
PCI	8,071		11,857
Total allowance for credit losses	8,649		12,559
Reserve for Unfunded Commitments
Loans [Abstract]
Individually Evaluated for Impairment	0		0
Collectively Evaluated for Impairment	0		0
PCI	0		0
Total Loans	0		0
Allowance for Credit Losses [Abstract]
Individually Evaluated for Impairment	0		0
Collectively Evaluated for Impairment	1,616		1,616
PCI	0		0
Total allowance for credit losses	1,616		1,616
Total Loans Included in Calculation of Allowance
Loans [Abstract]
Individually Evaluated for Impairment	47,406		55,832
Collectively Evaluated for Impairment	6,386,721		5,539,395
PCI	84,952		119,133
Total Loans	6,519,079		5,714,360
Allowance for Credit Losses [Abstract]
Individually Evaluated for Impairment	3,599		5,160
Collectively Evaluated for Impairment	62,484		70,104
PCI	8,639		11,857
Total allowance for credit losses	$ 74,722		$ 87,121

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Loans (Details) - Loan Portfolio (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014		Dec. 31, 2013
Loans and Leases Receivable Disclosure [Abstract]
Commercial and industrial	$ 2,208,166		$ 1,830,638
Agricultural	347,511		321,702
Commercial real estate:
Office, retail, and industrial	1,422,522		1,353,685
Multi-family	559,689		332,873
Construction	193,445		186,197
Other commercial real estate	871,825		807,071
Total commercial real estate	3,047,481		2,679,826
Total corporate loans	5,603,158		4,832,166
Home equity	517,446		427,020
1-4 family mortgages	238,172		275,992
Installment	69,428		44,827
Total consumer loans	825,046		747,839
Total loans, excluding covered loans	6,428,204		5,580,005
Covered loans	90,875	[1]	134,355	[1]
Total Loans	6,519,079		5,714,360
Deferred loan fees included in total loans	4,163		4,656
Overdrawn demand deposits included in total loans	$ 3,632		$ 5,047

[1] For information on covered loans, refer to Note 6, “Acquired and Covered Loans.”

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Consolidated Statements Of Comprehensive Income (Loss) (Unaudited)-AOCI (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning Balance			$ (26,792)	$ (15,660)
Other comprehensive income (loss)	(3,581)	(15,758)	7,940	(10,397)
Ending Balance	(18,852)	(26,057)	(18,852)	(26,057)
Accumulated Unrealized Gain (Loss) on Securities Available- for-Sale
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning Balance			(20,419)	1,115
Other comprehensive income (loss)			8,429	(16,896)
Ending Balance	(11,990)	(15,781)	(11,990)	(15,781)
Accumulated Unrealized Loss on Derivative Instruments
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning Balance			0	0
Other comprehensive income (loss)			(489)	0
Ending Balance	(489)	0	(489)	0
Unrecognized Net Pension Costs
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning Balance			(6,373)	(16,775)
Other comprehensive income (loss)			0	6,499
Ending Balance	$ (6,373)	$ (10,276)	$ (6,373)	$ (10,276)

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Recent Events

9 Months Ended

Sep. 30, 2014

Recent Events [Abstract]

Recent Events

RECENT EVENTS

Equity Matters

On May 21, 2014, the stockholders of the Company approved an amendment to the Company's Restated Certificate of Incorporation. The amendment increased the Company's authorized common stock by 50,000,000 shares. Following this amendment, the Company is now authorized to issue a total of 151,000,000 shares, including 1,000,000 shares of Preferred Stock, without a par value, and 150,000,000 shares of Common Stock, $0.01 par value per share.

Recent Accounting Pronouncements

Income Taxes: In January of 2014, the Financial Accounting Standards Board ("FASB") issued guidance that requires an entity to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. To the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date or, if the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The guidance is effective for annual and interim reporting periods beginning on or after December 15, 2013, and must be applied prospectively. The adoption of this guidance on January 1, 2014 did not impact the Company's financial condition, results of operations, or liquidity.

Receivables - Troubled Debt Restructurings by Creditors: In January of 2014, the FASB issued guidance to clarify when an in substance repossession or foreclosure occurs and an entity is considered to have received physical possession of the residential real estate property such that a loan receivable should be derecognized and the real estate property recognized. Additionally, the guidance requires interim and annual disclosure of the amount of foreclosed residential real estate property held by the entity and the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction. The guidance is effective for annual and interim periods beginning after December 15, 2014 and can be applied retrospectively or prospectively. Management does not expect the adoption of this guidance will materially impact the Company's financial condition, results of operations, or liquidity.

Reporting Discontinued Operations: In April of 2014, the FASB issued guidance that requires an entity to report a disposal of a component of an entity or a group of components of an entity in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity's operations and financial results when the component of an entity or group of components of an entity (i) meets the criteria to be classified as held for sale, (ii) is disposed of by sale, or (iii) is disposed of other than by sale. The guidance is effective for annual and interim reporting periods beginning on or after December 15, 2014, and must be applied prospectively. Management does not expect the adoption of this guidance will materially impact the Company's financial condition, results of operations, or liquidity.

Revenue from Contracts with Customers: In May of 2014, the FASB issued guidance that requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance is effective for annual and interim reporting periods beginning on or after December 15, 2016, and must be applied either retrospectively or using the modified retrospective approach. Management is evaluating the new guidance, but does not expect the adoption of this guidance will materially impact the Company's financial condition, results of operations, or liquidity.

Transfers and Servicing: In June of 2014, the FASB issued guidance that requires repurchase-to-maturity transactions to be accounted for as secured borrowings. The guidance also requires separate accounting for a transfer of a financial asset executed contemporaneously with a repurchase agreement with the same counterparty. If the derecognition criteria are met, the initial transfer will generally be accounted for as a sale and the repurchase agreement will generally be accounted for as a secured borrowing. The guidance is effective for annual and interim reporting periods beginning after December 15, 2014. Management is evaluating the new guidance, but does not expect the adoption of this guidance will materially impact the Company's financial condition, results of operations, or liquidity.

Receivables - Troubled Debt Restructurings by Creditors: In August of 2014, the FASB issued guidance that requires an entity to derecognize a mortgage loan and recognize a separate other receivable upon foreclosure if (i) the loan has a government guarantee that is not separable from the loan before foreclosure, (ii) at the time of foreclosure, the creditor has the intent to convey the real estate property to the guarantor and make a claim on that guarantee, and the creditor has the ability to recover under that claim, and (iii) at the time of foreclosure, any amount of the claim that is determined on the basis of the fair value of the real estate is fixed. The separate other receivable is to be measured based on the amount of the loan balance (principal and interest) expected to be recovered from the guarantor. The guidance is effective for annual and interim reporting periods beginning after December 15, 2014. Management is evaluating the new guidance, but does not expect the adoption of this guidance will materially impact the Company's financial condition, results of operations, or liquidity.

Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern: In August of 2014, the FASB issued guidance that requires management to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued. The guidance is effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. Management does not expect the adoption of this guidance will materially impact the Company's financial condition, results of operations, or liquidity.

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Earnings Per Common Share (Details) - Basic and Diluted Earnings Per Common Share (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended				9 Months Ended
	Sep. 30, 2014		Sep. 30, 2013		Sep. 30, 2014		Sep. 30, 2013
Earnings Per Share, Basic and Diluted [Abstract]
Net income	$ 18,549		$ 29,323		$ 54,713		$ 60,141
Net income applicable to non-vested restricted shares	(242)		(416)		(697)		(847)
Net income applicable to common shares	$ 18,307		$ 28,907		$ 54,016		$ 59,294
Weighted-average common shares outstanding (in Shares)	74,341		74,023		74,270		73,969
Dilutive effect of common stock equivalents (in Shares)	11		11		12		9
Weighted-average diluted common shares outstanding (in Shares)	74,352		74,034		74,282		73,978
Basic earnings per common share (in Dollars per share)	$ 0.25		$ 0.39		$ 0.73		$ 0.80
Diluted earnings per common share (in Dollars per share)	$ 0.25		$ 0.39		$ 0.73		$ 0.80
Anti-dilutive shares not included in the computation of diluted earnings per common share (in thousands)	1,155	[1]	1,412	[1]	1,215	[1]	1,483	[1]

[1] This amount represents outstanding stock options for which the exercise price is greater than the average market price of the Company's common stock.

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Fair Value (Details) - Characteristics of CDOs and Unobservable Inputs Significant to the Valuation of CDOs (USD $) In Thousands, unless otherwise specified							9 Months Ended
	Sep. 30, 2014	Jun. 30, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Dec. 31, 2012	Sep. 30, 2014 No 1 underlying_issuer		Sep. 30, 2014 No 2 underlying_issuer		Sep. 30, 2014 No 3 underlying_issuer		Sep. 30, 2014 No 4 underlying_issuer		Sep. 30, 2014 No 5 underlying_issuer
Characteristics:
Class							C-1		C-1		C-1		B1		C
Original par (in Dollars)							$ 17,500		$ 15,000		$ 15,000		$ 15,000		$ 6,500
Amortized cost (in Dollars)							7,140		5,598		12,377		13,727		6,179
Fair value (in Dollars)	$ 18,369	$ 18,436	$ 18,309	$ 16,996	$ 14,917	$ 12,129	$ 4,837		$ 704		$ 4,872		$ 5,428		$ 2,528
Lowest credit rating (Moody’s)							Ca		Ca		Ca		Ca		Ca
Number of underlying Issuers (underlying issuers)							43		54		57		56		74
Percent of Issuers currently performing (percent)							83.70%		81.50%		77.20%		62.50%		73.00%
Current deferral and default percent (percent)							8.70%	[1]	10.30%	[1]	11.00%	[1]	24.40%	[1]	22.50%	[1]
Expected future deferral and default percent (percent)							12.20%	[2]	10.80%	[2]	13.50%	[2]	19.00%	[2]	9.60%	[2]
Excess subordination percent (percent)							0.00%	[3]	0.00%	[3]	0.00%	[3]	10.30%	[3]	10.10%	[3]
Discount rate risk adjustment (percent)							12.50%	[4]	14.30%	[4]	13.30%	[4]	11.80%	[4]	12.30%	[4]
Significant unobservable inputs, weighted average of Issuers:
Probability of prepayment (percent)							15.20%		7.60%		4.50%		4.50%		3.50%
Probability of default (percent)							18.50%		22.20%		19.80%		26.00%		28.80%
Loss given default (percent)							88.20%		83.20%		89.40%		93.20%		96.30%
Probability of deferral cure (percent)							23.20%		12.40%		36.30%		38.80%		27.60%

[1] Represents actual deferrals and defaults, net of recoveries, as a percent of the original collateral.

[2] Represents expected future deferrals and defaults, net of recoveries, as a percent of the remaining performing collateral. The probability of future defaults is derived for each Issuer based on a credit analysis. The associated assumed loss given default is based on historical default and recovery information provided by a nationally recognized credit rating agency and is assumed to be 90% for banks, 85% for insurance companies, and 100% for Issuers that have already defaulted.

[3] Represents additional defaults that the CDO can absorb before the security experiences any credit impairment. The excess subordination percentage is calculated by dividing the amount of potential additional loss that can be absorbed (before the receipt of all expected future principal and interest payments is affected) by the total balance of performing collateral.

[4] Cash flows are discounted at LIBOR plus this adjustment to reflect the higher risk inherent in these securities.

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Earnings Per Common Share (Tables)

9 Months Ended

Sep. 30, 2014

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The table below displays the calculation of basic and diluted earnings per share.

Basic and Diluted Earnings per Common Share

(Amounts in thousands, except per share data)

	Quarters Ended   September 30,						Nine Months Ended   September 30,
	2014			2013			2014			2013
Net income	$	18,549		$	29,323		$	54,713		$	60,141
Net income applicable to non-vested restricted shares	(242		)	(416		)	(697		)	(847		)
Net income applicable to common shares	$	18,307		$	28,907		$	54,016		$	59,294
Weighted-average common shares outstanding:
Weighted-average common shares outstanding (basic)	74,341			74,023			74,270			73,969
Dilutive effect of common stock equivalents	11			11			12			9
Weighted-average diluted common shares outstanding	74,352			74,034			74,282			73,978
Basic earnings per common share	$	0.25		$	0.39		$	0.73		$	0.80
Diluted earnings per common share	$	0.25		$	0.39		$	0.73		$	0.80
Anti-dilutive shares not included in the computation of diluted earnings per common share (1)	1,155			1,412			1,215			1,483

⁽¹⁾  This amount represents outstanding stock options for which the exercise price is greater than the average market price of the Company's common stock.

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Securities (Details) - Securities Gains (Losses) (USD $) In Thousands, unless otherwise specified	3 Months Ended				9 Months Ended
	Sep. 30, 2014		Sep. 30, 2013		Sep. 30, 2014		Sep. 30, 2013
Gains on sales of securities:
Gross realized gains	$ 2,570		$ 34,205		$ 8,188		$ 34,421
Gross realized losses	0		0		0		0
Net realized gains on sales of securities	2,570		34,205		8,188		34,421
Non-cash impairment charges:
Other-than-temporary securities impairment (OTTI)	0		(404)		(28)		(404)
Net non-cash impairment charges	0		(404)		(28)		(404)
Net realized gains	2,570		33,801		8,160		34,017
Net trading (losses) gains	$ (356)	[1]	$ 882	[1]	$ 366	[1]	$ 2,132	[1]

[1] All net trading (losses) gains relate to trading securities still held as of September 30, 2014 and September 30, 2013 and are included in other income in the Condensed Consolidated Statement of Income.

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Fair Value

9 Months Ended

Sep. 30, 2014

Fair Value Disclosures [Abstract]

Fair Value

FAIR VALUE

Fair value represents the amount expected to be received to sell an asset or paid to transfer a liability in its principal or most advantageous market in an orderly transaction between market participants at the measurement date. In accordance with fair value accounting guidance, the Company measures, records, and reports various types of assets and liabilities at fair value on either a recurring or non-recurring basis in the Consolidated Statements of Financial Condition. Those assets and liabilities are presented below in the sections titled "Assets and Liabilities Required to be Measured at Fair Value on a Recurring Basis" and "Assets and Liabilities Required to be Measured at Fair Value on a Non-Recurring Basis."

Other assets and liabilities are not required to be measured at fair value in the Consolidated Statements of Financial Condition, but must be disclosed at fair value. Refer to the "Fair Value Measurements of Other Financial Instruments" section of this footnote. Any aggregation of the estimated fair values presented in this footnote does not represent the value of the Company.

Depending on the nature of the asset or liability, the Company uses various valuation methodologies and assumptions to estimate fair value. GAAP provides a three-tiered fair value hierarchy based on the inputs used to measure fair value. The hierarchy is defined as follows:

• Level 1 - Quoted prices in active markets for identical assets or liabilities.

• Level 2 - Observable inputs other than level 1 prices, such as quoted prices for similar instruments, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

• Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. These inputs require significant management judgment or estimation, some of which use model-based techniques and may be internally developed.

Assets and liabilities are assigned to a level within the fair value hierarchy based on the lowest level of significant input used to measure fair value. Assets and liabilities may change levels within the fair value hierarchy due to market conditions or other circumstances. Those transfers are recognized on the date of the event that prompted the transfer. There were no transfers of assets or liabilities between levels of the fair value hierarchy during the periods presented.

Assets and Liabilities Required to be Measured at Fair Value on a Recurring Basis

The following table provides the fair value for assets and liabilities required to be measured at fair value on a recurring basis in the Consolidated Statements of Financial Condition by level in the fair value hierarchy.

Recurring Fair Value Measurements

(Dollar amounts in thousands)

	September 30, 2014						December 31, 2013
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Assets:
Trading securities:
Money market funds	$	1,383	$	—	$	—	$	1,847	$	—	$	—
Mutual funds	16,545		—		—		15,470		—		—
Total trading securities	17,928		—		—		17,317		—		—
Securities available-for-sale:
U.S. Agency securities	—		500		—		—		500		—
CMOs	—		416,547		—		—		475,768		—
Other MBSs	—		120,489		—		—		136,164		—
Municipal securities	—		435,072		—		—		461,393		—
CDOs	—		—		18,369		—		—		18,309
Corporate debt securities	—		3,846		—		—		14,929		—
Equity securities	44		2,553		—		44		5,618		—
Total securities   available-for-sale	44		979,007		18,369		44		1,094,372		18,309
Mortgage servicing rights (1)	—		—		1,942		—		—		1,893
Derivative assets (1)	—		6,072		—		—		2,235		—
Liabilities:
Derivative liabilities (2)	$	—	$	8,002	$	—	$	—	$	3,707	$	—

⁽¹⁾  Included in other assets in the Consolidated Statements of Financial Condition.

⁽²⁾  Included in other liabilities in the Consolidated Statements of Financial Condition.

The following sections describe the specific valuation techniques and inputs used to measure financial assets and liabilities at fair value.

Trading Securities

The Company's trading securities consist of diversified investment securities held in a grantor trust and are invested in money market and mutual funds. The fair value of these money market and mutual funds is based on quoted market prices in active exchange markets and is classified in level 1 of the fair value hierarchy.

Securities Available-for-Sale

The Company’s available-for-sale securities are primarily fixed income instruments that are not quoted on an exchange, but may be traded in active markets. The fair values are based on quoted prices in active markets or market prices for similar securities obtained from external pricing services or dealer market participants and are classified in level 2 of the fair value hierarchy. Quarterly, the Company evaluates the methodologies used by its external pricing services to develop the fair values to determine whether the results of the valuations are representative of an exit price in the Company’s principal markets and an appropriate representation of fair value.

CDOs are classified in level 3 of the fair value hierarchy. The Company estimates the fair values for each CDO using discounted cash flow analyses with the assistance of a structured credit valuation firm. This methodology relies on credit analysis and review of historical financial data for each of the issuers of the securities underlying the individual CDO (the “Issuers”) to estimate the expected future cash flows. These estimates are highly subjective and sensitive to several significant, unobservable inputs, including prepayment assumptions, default probabilities, loss given default assumptions, and deferral cure probabilities. The expected future cash flows for each Issuer are then discounted to present values using LIBOR plus an adjustment to reflect the higher risk inherent in these securities given their complex structures and the impact of market factors. Finally, the discounted expected future cash flows for each Issuer are aggregated to derive the estimated fair value for the specific CDO. Information for each CDO, as well as the significant unobservable assumptions, is presented in the following table.

Characteristics of CDOs and Significant Unobservable Inputs

Used in the Valuation of CDOs as of September 30, 2014

(Dollar amounts in thousands)

	CDO Number
	1			2			3			4			5
Characteristics:
Class	C-1			C-1			C-1			B1			C
Original par	$	17,500		$	15,000		$	15,000		$	15,000		$	6,500
Amortized cost	7,140			5,598			12,377			13,727			6,179
Fair value	4,837			704			4,872			5,428			2,528
Lowest credit rating (Moody’s)	Ca			Ca			Ca			Ca			Ca
Number of underlying Issuers	43			54			57			56			74
Percent of Issuers currently   performing	83.7		%	81.5		%	77.2		%	62.5		%	73.0		%
Current deferral and default percent (1)	8.7		%	10.3		%	11.0		%	24.4		%	22.5		%
Expected future deferral and   default percent (2)	12.2		%	10.8		%	13.5		%	19.0		%	9.6		%
Excess subordination percent (3)	—		%	—		%	—		%	10.3		%	10.1		%
Discount rate risk adjustment (4)	12.5		%	14.3		%	13.3		%	11.8		%	12.3		%
Significant unobservable inputs, weighted average of Issuers:
Probability of prepayment	15.2		%	7.6		%	4.5		%	4.5		%	3.5		%
Probability of default	18.5		%	22.2		%	19.8		%	26.0		%	28.8		%
Loss given default	88.2		%	83.2		%	89.4		%	93.2		%	96.3		%
Probability of deferral cure	23.2		%	12.4		%	36.3		%	38.8		%	27.6		%

⁽¹⁾  Represents actual deferrals and defaults, net of recoveries, as a percent of the original collateral.

⁽²⁾  Represents expected future deferrals and defaults, net of recoveries, as a percent of the remaining performing collateral. The probability of future defaults is derived for each Issuer based on a credit analysis. The associated assumed loss given default is based on historical default and recovery information provided by a nationally recognized credit rating agency and is assumed to be 90% for banks, 85% for insurance companies, and 100% for Issuers that have already defaulted.

⁽³⁾  Represents additional defaults that the CDO can absorb before the security experiences any credit impairment. The excess subordination percentage is calculated by dividing the amount of potential additional loss that can be absorbed (before the receipt of all expected future principal and interest payments is affected) by the total balance of performing collateral.

⁽⁴⁾  Cash flows are discounted at LIBOR plus this adjustment to reflect the higher risk inherent in these securities.

Most Issuers have the right to prepay the securities on the fifth anniversary of issuance and under other limited circumstances. To estimate prepayments, a credit analysis of each Issuer is performed to estimate its ability and likelihood to fund a prepayment. If a prepayment occurs, the Company receives cash equal to the par value for the portion of the CDO associated with that Issuer.

The likelihood that an Issuer who is currently deferring payment on the securities will pay all deferred amounts and remain current thereafter is based on an analysis of the Issuer’s asset quality, leverage ratios, and other measures of financial viability.

The impact of changes in these key inputs could result in a significantly higher or lower fair value measurement for each CDO. The timing of the default, the magnitude of the default, and the timing and magnitude of the cure probability are directly interrelated. Defaults that occur sooner and/or are greater than anticipated have a negative impact on the valuation. In addition, a high cure probability assumption has a positive effect on the fair value, and, if a cure event takes place sooner than anticipated, the impact on the valuation is also favorable.

Management monitors the valuation results of each CDO on a quarterly basis, which includes an analysis of historical pricing trends for these types of securities, overall economic conditions (such as tracking LIBOR curves), and the performance of the Issuers’ industries. Management also reviews market activity for the same or similar tranches of the CDOs, when available. Annually, management validates significant assumptions by reviewing detailed back-testing performed by the structured credit valuation firm.

A rollforward of the carrying value of CDOs for the quarters and nine months ended September 30, 2014 and 2013 is presented in the following table.

Rollforward of the Carrying Value of CDOs

(Dollar amounts in thousands)

	Quarters Ended   September 30,					Nine Months Ended   September 30,
	2014			2013		2014			2013
Beginning balance	$	18,436		$	14,917	$	18,309		$	12,129
Change in other comprehensive (loss) income (1)	(65		)	2,079		1,571			4,867
Purchases, sales, issuances, settlements, and paydowns (2)	(2		)	—		(1,511		)	—
Ending balance	$	18,369		$	16,996	$	18,369		$	16,996
Change in unrealized losses recognized in earnings related to   securities still held at end of period	$	—		$	—	$	—		$	—

⁽¹⁾  Included in unrealized holding (losses) gains in the Consolidated Statements of Comprehensive Income.

⁽²⁾  For the nine months ended September 30, 2014, one CDO with a carrying value of $1.3 million was sold. In addition, one CDO with a carrying value of zero was sold during the nine months ended September 30, 2013.

Mortgage Servicing Rights

The Company services loans for others totaling $218.9 million as of September 30, 2014 and $214.5 million as of December 31, 2013. These loans are owned by third parties and are not included in the Consolidated Statements of Condition. The Company estimates the fair value of mortgage servicing rights by using a discounted cash flow analysis and classifies them in level 3 of the fair value hierarchy. Additional information regarding the Company’s mortgage servicing rights can be found in Note 21, “Fair Value,” in the Company’s 2013 10-K.

Derivative Assets and Derivative Liabilities

The Company enters into interest rate swaps and derivative transactions with commercial customers. These derivative transactions are executed in the dealer market, and pricing is based on market quotes obtained from the counterparties. The market quotes were developed using market observable inputs, which primarily include LIBOR. Therefore, derivatives are classified in level 2 of the fair value hierarchy. For its derivative assets and liabilities, the Company also considers non-performance risk, including the likelihood of default by itself and its counterparties, when evaluating whether the market quotes from the counterparty are representative of an exit price.

Assets and Liabilities Required to be Measured at Fair Value on a Non-Recurring Basis

The following table provides the fair value for each class of assets and liabilities required to be measured at fair value on a non-recurring basis in the Consolidated Statements of Financial Condition by level in the fair value hierarchy.

Non-Recurring Fair Value Measurements

(Dollar amounts in thousands)

	September 30, 2014						December 31, 2013
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Collateral-dependent impaired loans (1)	$	—	$	—	$	18,754	$	—	$	—	$	13,103
OREO (2)	—		—		17,580		—		—		13,347
Loans held-for-sale (3)	—		—		24,504		—		—		4,739
Assets held-for-sale (4)	—		—		2,026		—		—		4,027

⁽¹⁾  Includes impaired loans with charge-offs and impaired loans with a specific reserve during the periods presented.

⁽²⁾  Includes OREO and covered OREO with fair value adjustments subsequent to initial transfer that occurred during the periods presented.

⁽³⁾  Included in other assets in the Consolidated Statements of Financial Condition.

⁽⁴⁾  Included in premises, furniture, and equipment in the Consolidated Statements of Financial Condition.

Collateral-Dependent Impaired Loans

Certain collateral-dependent impaired loans are subject to fair value adjustments to reflect the difference between the carrying value of the loan and the value of the underlying collateral. The fair values of collateral-dependent impaired loans are primarily determined by current appraised values of the underlying collateral. Based on the age and/or type, appraisals may be adjusted in the range of 0% to 20%. In certain cases, an internal valuation may be used when the underlying collateral is located in areas where comparable sales data is limited or unavailable. Accordingly, collateral-dependent impaired loans are classified in level 3 of the fair value hierarchy.

Collateral-dependent impaired loans for which the fair value is greater than the recorded investment are not measured at fair value in the Consolidated Statements of Financial Condition and are not included in this disclosure.

OREO

The fair value of OREO is measured using the current appraised value of the properties. In certain circumstances, a current appraisal may not be available or may not represent an accurate measurement of the property's fair value due to outdated market information or other factors. In these cases, the fair value is determined based on the lower of the (i) most recent appraised value, (ii) broker price opinion, (iii) current listing price, or (iv) signed sales contract. Given these valuation methods, OREO is classified in level 3 of the fair value hierarchy.

Loans Held-for-Sale

As of September 30, 2014, loans held-for-sale consisted of 1-4 family mortgage loans, which were originated with the intent to sell, and one commercial real estate credit relationship, which was transferred to the held-for-sale category at the contract price. Accordingly, these loans are classified in level 3 of the fair value hierarchy. As of December 31, 2013, loans held-for-sale consists of 1-4 family mortgage loans and one commercial real estate loan.

Assets Held-for-Sale

Assets held-for-sale consist of former branches that are no longer in operation, which were transferred into the held-for-sale category at the lower of their fair value as determined by a current appraisal or their recorded investment. Based on these valuation methods, they are classified in level 3 of the fair value hierarchy.

Financial Instruments Not Required to be Measured at Fair Value

For certain financial instruments that are not required to be measured at fair value in the Consolidated Statements of Financial Condition, the Company must disclose the estimated fair values and the level within the fair value hierarchy as shown in the following table.

Fair Value Measurements of Other Financial Instruments

(Dollar amounts in thousands)

		September 30, 2014				December 31, 2013
	Fair Value Hierarchy Level	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Assets:
Cash and due from banks	1	$	125,977	$	125,977	$	110,417	$	110,417
Interest-bearing deposits in other banks	2	550,606		550,606		476,824		476,824
Securities held-to-maturity	2	26,776		27,766		44,322		43,387
FHLB and Federal Reserve Bank stock	2	35,588		35,588		35,161		35,161
Net loans	3	6,445,973		6,315,474		5,628,855		5,544,146
FDIC indemnification asset	3	8,699		4,659		16,585		7,829
Investment in BOLI	3	195,270		195,270		193,167		193,167
Accrued interest receivable	3	27,375		27,375		25,735		25,735
Other interest earning assets	3	4,399		4,527		6,550		6,809
Liabilities:
Deposits	2	$	7,616,133	$	7,610,119	$	6,766,101	$	6,765,404
Borrowed funds	2	132,877		132,877		224,342		226,839
Senior and subordinated debt	1	191,028		191,769		190,932		201,147
Accrued interest payable	2	5,208		5,208		2,400		2,400

Management uses various methodologies and assumptions to determine the estimated fair values of the financial instruments in the table above. The fair value estimates are made at a discrete point in time based on relevant market information and consider management’s judgments regarding future expected economic conditions, loss experience, and specific risk characteristics of the financial instruments.

Short-Term Financial Assets and Liabilities - For financial instruments with a shorter-term or with no stated maturity, prevailing market rates, and limited credit risk, the carrying amounts approximate fair value. Those financial instruments include cash and due from banks, interest-bearing deposits in other banks, other short-term investments, accrued interest receivable, and accrued interest payable.

Securities Held-to-Maturity - The fair value of securities held-to-maturity is estimated using the present value of expected future cash flows of the remaining maturities of the securities.

FHLB and Federal Reserve Bank Stock - The carrying amounts approximate fair value.

Net Loans - The fair value of loans is estimated using the present value of the expected future cash flows of the remaining maturities of the loans. Prepayment assumptions that consider the Company’s historical experience and current economic and lending conditions were included. The discount rate was based on the LIBOR yield curve with adjustments for liquidity and credit risk. The primary impact of credit risk on the fair value of the loan portfolio was accommodated through the use of the allowance for loan and covered loan losses, which is believed to represent the current fair value of estimated inherent losses in the loan portfolio.

FDIC Indemnification Asset - The fair value of the FDIC indemnification asset is calculated by discounting the expected future cash flows expected to be received from the FDIC. The expected future cash flows are estimated by multiplying anticipated losses on covered loans and covered OREO by the reimbursement rates in the FDIC Agreements.

Investment in BOLI - The fair value of the investment in BOLI approximates the carrying amount as both are based on each policy's respective cash surrender value ("CSV"), which is the amount the Company would receive from liquidation of these investments. The CSV is derived from monthly reports provided by the managing brokers and is determined using the Company's initial insurance premium and earnings of the underlying assets, offset by management fees.

Other Interest-Earning Assets - The fair value of other interest-earning assets is estimated using the present value of the expected future cash flows of the remaining maturities of the assets.

Deposits - The fair values disclosed for deposits, savings deposits, NOW accounts, and money market deposits are equal to the amount payable on demand at the reporting date (i.e., their carrying amounts). The fair value for fixed-rate time deposits was estimated using the expected future cash flows discounted based on the LIBOR yield curve, plus or minus the spread associated with current pricing.

Borrowed Funds- The fair value of FHLB advances is estimated by discounting the agreements based on maturities using the rates currently offered for FHLB advances of similar remaining maturities adjusted for prepayment penalties that would be incurred if the borrowings were paid off on the measurement date. The carrying amounts of securities sold under agreements to repurchase approximate their fair value due to their short-term nature.

Senior and Subordinated Debt - The fair value of senior and subordinated debt is determined using quoted market prices.

The Company estimated the fair value of lending commitments outstanding to be immaterial based on the following factors: (i) the limited interest rate exposure of the commitments outstanding due to their variable nature, (ii) the short-term nature of the commitment periods, (iii) termination clauses provided in the agreements, and (iv) the market rate of fees charged.