10-K

United States Securities and Exchange Commission

Washington, D.C. 20549

FORM 10-K

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

For the fiscal year ended December 31, 2016

or

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

For the transition period from              to             

Commission File Number: 1-9047

Independent Bank Corp.

(Exact name of registrant as specified in its charter)

Massachusetts	04-2870273
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
Office Address: 2036 Washington Street, Hanover, Massachusetts Mailing Address: 288 Union Street, Rockland, Massachusetts (Address of principal executive offices)	02339 02370 (Zip Code)

Registrant’s telephone number, including area code:

(781) 878-6100

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common Stock, $.0l par value per share	NASDAQ Global Select Market

Securities registered pursuant to section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    

Yes  x No   o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  o   No  x

Indicate by check mark whether the registrant (1) has filed all reports required 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  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, 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  o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.     o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the 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 o Non-accelerated filer o Smaller reporting company o

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

As of June 30, 2016, the last business day of the registrant's most recently completed second fiscal quarter, the aggregate market value of the voting common stock held by non-affiliates of the registrant, computed by reference to the closing price of such stock on June 30, 2016 was approximately $1,169,088,062.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. February 21, 2017 - 27,042,036

DOCUMENTS INCORPORATED BY REFERENCE

List hereunder the following documents if incorporated by reference and the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is incorporated: (1) Any annual report to security holders; (2) Any proxy or information statement; and (3) Any prospectus filed pursuant to Rule 424(b) or (c) under the Securities Act of 1933.

Portions of the Registrant’s definitive proxy statement for its 2017 Annual Meeting of Stockholders are incorporated into Part III, Items 10-14 of this Form 10-K. The 2017 definitive proxy statement will be filed within 120 days of December 31, 2016.

INDEPENDENT BANK CORP.

2016 ANNUAL REPORT ON FORM 10-K

TABLE OF CONTENTS

		Page #
Part I
Item 1.	Business	4
	General	4
	Market Area and Competition	5
	Lending Activities	5
	Investment Activities	10
	Sources of Funds	10
	Investment Management	11
	Regulation	11
	Statistical Disclosure by Bank Holding Companies	18
	Available Information	19
Item 1A.	Risk Factors	20
Item 1B.	Unresolved Staff Comments	25
Item 2.	Properties	25
Item 3.	Legal Proceedings	25
Item 4.	Mine Safety Disclosures	25
Part II
Item 5.	Market for Independent Bank Corp.’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	26
Item 6.	Selected Financial Data	28
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
	Table 1 - Securities Portfolio Composition	37
	Table 2 - Securities Portfolio, Amounts Maturing	38
	Table 3 - Closed Residential Real Estate Loans	39
	Table 4 - Residential Mortgage Loan Sales	39
	Table 5 - Mortgage Servicing Asset	40
	Table 6 - Components of Loan Growth/(Decline)	40
	Table 7 - Loan Portfolio Composition	41
	Table 8 - Scheduled Contractual Loan Amortization	41
	Table 9 - Nonperforming Assets	44
	Table 10 - Activity in Nonperforming Assets	45
	Table 11 - Troubled Debt Restructurings	45
	Table 12 - Activity in Troubled Debt Restructurings	46
	Table 13 - Interest Income Recognized/Collected on Nonaccrual Loans and Troubled Debt Restructurings	46
	Table 14 - Summary of Changes in the Allowance for Loan Losses	48
	Table 15 - Summary of Allocation of Allowance for Loan Losses	49
	Table 16 - Components of Deposit Growth	50
	Table 17 - Maturities of Time Certificate of Deposits $100,000 and over	50
	Table 18 - Brokered Deposits	51
	Table 19 - Borrowings by Category	51
	Table 20 - Summary of Results of Operations	52
	Table 21 - Average Balance, Interest Earned/Paid & Average Yields	52
	Table 22 - Volume Rate Analysis	54
	Table 23 - Noninterest Income	55
	Table 24 - Noninterest Expense	56
	Table 25 - Tax Provision and Applicable Tax Rates	57
	Table 26 - New Markets Tax Credit Recognition Schedule	57

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		Page #
	Table 27 - Interest Rate Sensitivity	61
	Table 28 - Sources of Liquidity	62
	Table 29 - Contractual Obligations, Commitments, Contingencies, and Off-Balance Sheet Financial Instruments by Maturity	64
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	67
Item 8.	Financial Statements and Supplementary Data	68
	Consolidated Balance Sheets	69
	Consolidated Statements of Income	70
	Consolidated Statements of Comprehensive Income	71
	Consolidated Statements of Stockholders' Equity	72
	Consolidated Statements of Cash Flows	73
	Note 1 - Summary of Significant Accounting Policies	75
	Note 2 - Acquisitions	87
	Note 3 - Securities	92
	Note 4 - Loans, Allowance for Loan Losses and Credit Quality	96
	Note 5 - Bank Premises and Equipment	107
	Note 6 - Goodwill and Other Intangible Assets	107
	Note 7 - Deposits	108
	Note 8 - Borrowings	109
	Note 9 - Earnings Per Share	112
	Note 10 - Stock Based Compensation	113
	Note 11 - Derivatives and Hedging Activities	117
	Note 12 - Balance Sheet Offsetting	122
	Note 13 - Income Taxes	123
	Note 14 - Low Income Housing Project Investments	125
	Note 15 - Employee Benefit Plans	126
	Note 16 - Fair Value Measurements	131
	Note 17 - Other Comprehensive Income (Loss)	138
	Note 18 - Commitments and Contingencies	140
	Note 19 - Regulatory Matters	141
	Note 20 - Parent Company Financial Statements	143
	Note 21 - Selected Quarterly Financial Data	146
	Note 22 - Transactions with Related Parties	146
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	147
Item 9A.	Controls and Procedures	147
Item 9B.	Other Information	150
Part III
Item 10.	Directors, Executive Officers and Corporate Governance	150
Item 11.	Executive Compensation	150
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	150
Item 13.	Certain Relationships and Related Transactions, and Director Independence	150
Item 14.	Principal Accounting Fees and Services	150
Part IV
Item 15.	Exhibits, Financial Statement Schedules	151
Signatures		155

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Cautionary Statement Regarding Forward-Looking Statements

This Annual Report on Form 10-K, both in the MD&A and elsewhere, contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are not historical facts and include expressions about management’s confidence and strategies and management’s expectations about new and existing programs and products, acquisitions, relationships, opportunities, taxation, technology, market conditions and economic expectations. These statements may be identified by such forward-looking terminology as “should,” “expect,” “believe,” “view,” “opportunity,” “allow,” “continues,” “reflects,” “typically,” “usually,” “anticipate,” or similar statements or variations of such terms. Such forward-looking statements involve certain risks and uncertainties and our actual results may differ materially from such forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements in addition to those risk factors listed under the “Risk Factors” section of this Annual Report on Form 10-K include, but are not limited to:

• a weakening in the United States economy in general and the regional and local economies within the New England region and the Company’s market area;

• adverse changes in the local real estate market;

• adverse changes in asset quality including an unanticipated credit deterioration in our loan portfolio including those related to one or more large commercial relationships;

• acquisitions may not produce results at levels or within time frames originally anticipated and may result in unforeseen integration issues or impairment of goodwill and/or other intangibles;

• changes in trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System;

• higher than expected tax expense, resulting from failure to comply with general tax laws, changes in tax laws, or failure to comply with requirements of the federal New Markets Tax Credit program;

• unexpected changes in market interest rates for interest earning assets and/or interest bearing liabilities;

• unexpected increased competition in our market area;

• unanticipated loan delinquencies, loss of collateral, decreased service revenues, and other potential negative effects on our business caused by severe weather or other external events;

• a deterioration in the conditions of the securities markets;

• a deterioration of the credit rating for U.S. long-term sovereign debt;

• our inability to adapt to changes in information technology;

• electronic fraudulent activity within the financial services industry, especially in the commercial banking sector;

• adverse changes in consumer spending and savings habits;

• failure to consummate or delay in consummating the acquisition of Island Bancorp, which is subject to certain standard conditions, including approval of the transaction by Island Bancorp shareholders and receipt of required regulatory approvals;

• the inability to realize expected cost savings from business acquisitions in the amounts or in the timeframe anticipated;

• inability to retain customers and employees, including those of previous acquisitions;

• the effect of laws and regulations regarding the financial services industry including, but not limited to, the Dodd-Frank Wall Street Reform and Consumer Protection Act;

• changes in laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) generally applicable to our business;

• changes in accounting policies, practices and standards, as may be adopted by the regulatory agencies as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board, and other accounting standard setters;

• cyber security attacks or intrusions that could adversely impact our businesses; and

• other unexpected material adverse changes in our operations or earnings.

Except as required by law, the Company disclaims any intent or obligation to update publicly any such forward-looking statements, whether in response to new information, future events or otherwise. Any public statements or disclosures by the Company following this Annual Report on Form 10-K which modify or impact any of the forward-looking statements contained in this Annual Report on Form 10-K will be deemed to modify or supersede such statements in this Annual Report on Form 10-K.

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PART I

ITEM 1. BUSINESS

General

Independent Bank Corp. (the “Company”) is a state chartered, federally registered bank holding company headquartered in Rockland, Massachusetts that was incorporated under Massachusetts law in 1985. The Company is the sole stockholder of Rockland Trust Company (“Rockland” or the “Bank”), a Massachusetts trust company chartered in 1907. Rockland is a community-oriented commercial bank, and the community banking business is the Company’s only reportable operating segment. The community banking business is managed as a single strategic unit and derives its revenues from a wide range of banking services, including lending activities, acceptance of demand, savings, and time deposits, and investment management. At December 31, 2016, the Company had total assets of $7.7 billion, total deposits of $6.4 billion, stockholders’ equity of $864.7 million, and 1,103 full-time equivalent employees.

On November 10, 2016, the Company completed its acquisition of New England Bancorp, Inc. ("NEB"), the parent of Bank of Cape Cod, adding one full service bank branch, while three of the former NEB branches were closed and consolidated into existing Rockland Trust locations. The acquisition included $225.7 million in loans and $175.7 million in deposits, at fair value. Total consideration of $41.7 million was paid primarily by the issuance of 672,665 shares of Independent Bank Corp. common stock to New England Bancorp shareholders. See Note 2, "Acquisitions" to the Consolidated Financial Statements in Item 8 hereof for further discussion of the acquisition.

On October 20, 2016, the Company, parent of Rockland Trust Company, and Island Bancorp, Inc., parent of The Edgartown National Bank, signed a definitive merger agreement for the Company to acquire Island Bancorp and Rockland Trust to acquire The Edgartown National. The parties anticipate that the consummation of the transaction will occur in the second quarter of 2017. Under the merger agreement each share of Island Bancorp stock will be exchanged for either 9.525 shares of Independent common stock or $500 in cash, subject to customary pro-ration procedures which will result in an aggregate stock/cash consideration mix of 80% stock/20% cash. Independent anticipates issuing approximately 369,311 shares of its common stock in the merger. Based upon the Company's $53.25 per share closing price on October 19, 2016 the transaction is valued at approximately $24.5 million.

On February 20, 2015 the Company completed the acquisition of Peoples Federal Bancshares, Inc. ("Peoples"), adding eight full service bank branches. The Company paid total consideration of $141.8 million to Peoples shareholders using stock and cash, issuing 2,052,137 shares of common stock and paying $55.4 million in cash, in the aggregate. See Note 2, "Acquisitions" to the Consolidated Financial Statements in Item 8 hereof for further discussion of the acquisition.

The Company is currently the sponsor of Independent Capital Trust V, a Delaware statutory trust, Slade's Ferry Statutory Trust I, a Connecticut statutory trust, Central Bancorp Capital Trust I, a Delaware statutory trust, and Central Bancorp Statutory Trust II, a Connecticut statutory trust, each of which was formed to issue trust preferred securities. These statutory trusts are not included in the Company's consolidated financial statements in accordance with the requirements of the consolidation topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”).

As of December 31, 2016, the Bank had the following corporate subsidiaries, all of which were wholly owned by the Bank and included in the Company’s consolidated financial statements:

• Five Massachusetts security corporations, namely Rockland Borrowing Collateral Securities Corp., Rockland Deposit Collateral Securities Corp., Taunton Avenue Securities Corp., Goddard Ave Securities Corp. and MFLR Securities Corporation;

• Rockland Trust Community Development Corporation, which has two wholly-owned subsidiaries, Rockland Trust Community Development LLC and Rockland Trust Community Development Corporation II, and which also serves as the manager of three Limited Liability Company subsidiaries wholly-owned by the Bank, Rockland Trust Community Development III LLC, Rockland Trust Community Development IV LLC, and Rockland Trust Community Development V LLC, which are all qualified as community development entities under federal New Markets Tax Credit Program criteria;

• Rockland MHEF Fund LLC, established as a wholly-owned subsidiary of Rockland Trust, created with Massachusetts Housing Equity Fund, Inc. as the third party nonmember manager and was established to invest in certain low-income housing tax credit projects;

• RTC LIHTC Investments LLC, established to invest primarily in Massachusetts-based low-income housing tax credit projects;

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• Rockland Trust Phoenix LLC, formed for the purpose of holding, maintaining, and disposing of certain foreclosed properties;

• Compass Exchange Advisors LLC, which provides like-kind exchange services pursuant to section 1031 of the Internal Revenue Code;

• Bright Rock Capital Management LLC, which was established to act as a registered investment advisor under the Investment Advisors Act of 1940.

Periodically, Compass Exchange Advisors LLC, a wholly owned subsidiary of the Bank, acts as an Exchange Accommodation Titleholder (“EAT”) in connection with customers' like-kind exchanges under Section 1031 of the Internal Revenue Code. When Compass Exchange Advisors LLC provides EAT services, it establishes an EAT entity to hold title to property for its customers for up to 180 days in accordance with Internal Revenue Service guidelines. EAT entities are considered the property owner solely for federal income tax purposes, and in no other instances, in order to facilitate a customer's like kind exchange. A typical EAT entity is a Massachusetts corporation whose directors are all Rockland Trust officers and which has Compass Exchange Advisors LLC as its sole shareholder. The EAT entity owns all of the membership interest in a LLC which holds title to the property and is managed by the customer. All financial benefits and burdens of property ownership are borne by the customer. EAT entities are therefore not consolidated onto Compass Exchange Advisors LLC's balance sheet in accordance with requirements of the consolidation topic of the ASC.

Market Area and Competition

The Bank contends with considerable competition both in generating loans and attracting deposits. The Bank’s competition for generating loans is primarily from other commercial banks, savings banks, credit unions, mortgage banking companies, finance companies, and other institutional lenders. Competitive factors considered for loan generation include interest rates, terms offered, loan fees charged, loan products offered, services provided, and geographic locations.

In attracting deposits, the Bank’s primary competitors are savings banks, commercial and co-operative banks, credit unions, internet banks, as well as other nonbank institutions that offer financial alternatives such as brokerage firms and insurance companies. Competitive factors considered in attracting and retaining deposits include deposit and investment products and their respective rates of return, brand awareness, liquidity, and risk, among other factors, such as convenient branch locations and hours of operation, personalized customer service, online and mobile access to accounts, and automated teller machines.

The Bank’s market area is attractive and entry into the market by financial institutions previously not competing in the market area may continue to occur which could impact the Bank’s growth or profitability. The Bank’s market area is generally comprised of Eastern Massachusetts, including Cape Cod, and Rhode Island.

Lending Activities

The Bank’s gross loan portfolio (loans before allowance for loan losses) amounted to $6.0 billion on December 31, 2016, or 77.8% of total assets. The Bank classifies loans as commercial, consumer real estate, or other consumer. Commercial loans consist of commercial and industrial loans, asset-based loans, commercial real estate, commercial construction, and small business loans. Commercial and industrial loans generally consist of loans with credit needs in excess of $250,000 and revenue in excess of $2.5 million, for working capital and other business-related purposes and floor plan financing. Asset-based loans consist primarily of revolving lines of credit but also include term loans. Asset-based revolving lines of credit are typically structured as committed lines with terms of three to five years, have variable rates of interest, and are collateralized by accounts receivable and inventory. Asset-based term loans are typically secured by owner occupied commercial real estate and machinery and equipment. Commercial real estate loans are comprised of commercial mortgages, including mortgages for construction purposes that are secured by nonresidential properties, multifamily properties, or one-to-four family rental properties. Small business loans, including real estate loans, generally consist of loans to businesses with commercial credit needs of less than or equal to $250,000 and revenues of less than $2.5 million. Consumer real estate consists of residential mortgages and home equity loans and lines that are secured primarily by owner-occupied residences and mortgages for the construction of residential properties. Other consumer loans are mainly personal loans.

The Bank’s borrowers consist of small-to-medium sized businesses and consumers. Substantially all of the Bank’s commercial, consumer real estate, and other consumer loan portfolios consist of loans made to residents of and businesses located in the Bank’s market area. The majority of the real estate loans in the Bank’s loan portfolio are secured by properties located within this market area.

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Interest rates charged on loans may be fixed or variable and vary with the degree of risk, loan term, underwriting and servicing costs, loan amount, and the extent of other banking relationships maintained with customers. Rates are further subject to competitive pressures, the current interest rate environment, availability of funds, and government regulations.

The Bank’s principal earning assets are its loans. Although the Bank judges its borrowers' creditworthiness, the risk of deterioration in borrowers’ abilities to repay their loans in accordance with their existing loan agreements is inherent in any lending function. Participating as a lender in the credit market requires a strict underwriting and monitoring process to minimize credit risk. This process requires substantial analysis of the loan application, an evaluation of the customer’s capacity to repay according to the loan’s contractual terms, and an objective determination of the value of the collateral. The Bank also utilizes the services of an independent third-party to provide loan review services, which consist of a variety of monitoring techniques performed after a loan becomes part of the Bank’s portfolio.

The Bank’s Controlled Asset and Consumer Collections departments are responsible for the management and resolution of nonperforming loans. Nonperforming loans consist of nonaccrual loans and loans that are more than 90 days past due but still accruing interest. In the course of resolving nonperforming loans, the Bank may choose to foreclose on the loan or restructure the contractual terms of certain loans, by modifying the terms of the loan to fit the ability of the borrower to repay in line with its current financial status.

Other Real Estate Owned (“OREO”) includes real estate properties, which have primarily served as collateral to secure loans, that are controlled or owned by the Bank. The Bank had eight properties held as OREO at December 31, 2016 with a balance of $4.2 million.

Origination of Loans    Commercial and industrial, asset-based, commercial real estate, and construction loan applications are obtained through existing customers, solicitation by Bank personnel, referrals from current or past customers, or walk-in customers. Small business loan applications are typically originated by the Bank’s retail staff, through a dedicated team of business officers, by referrals from other areas of the Bank, by referrals from current or past customers, or through walk-in customers. Consumer real estate loan applications primarily result from referrals by real estate brokers, homebuilders, advertising, direct mail, and existing or walk-in customers. Other consumer loan applications are directly obtained through existing or walk-in customers who have been made aware of the Bank’s consumer loan services through advertising, direct mail, and other media.

Loans are approved based upon a hierarchy of authority, predicated upon the size of the loan. Levels within the hierarchy of lending authorities range from individual lenders to the Executive Committee of the Board of Directors. In accordance with governing banking statutes, the Bank is permitted, with certain exceptions, to make loans and commitments to any one borrower, including related entities, in the aggregate amount of not more than 20% of the Bank’s stockholders’ equity, or $186.7 million, at December 31, 2016, which is the Bank’s legal lending limit. Notwithstanding the foregoing, the Bank has established a more restrictive limit of not more than 75% of the Bank’s legal lending limit, or $140.0 million, at December 31, 2016, which may only be exceeded with the approval of the Board of Directors. There were no borrowers whose total indebtedness in aggregate exceeded the Bank’s self-imposed restrictive limit. The Bank’s largest relationship as of December 31, 2016 consisted of fifty-two loans with an aggregate of $82.9 million in exposure.

Sale of Loans    The Bank’s residential mortgage loans are originated in compliance with terms, conditions and documentation which permit the sale of such loans to investors in the secondary market. Loan sales in the secondary market provide funds for additional lending and other banking activities. Currently, the Bank sells the servicing of the sold loans for a servicing released premium, simultaneous with the sale of the loan. In the past, the Bank may have opted to sell loans and retain the servicing. In these instances, a mortgage servicing rights asset would have been recognized. As part of its asset/liability management strategy, the Bank may retain certain adjustable rate and fixed rate residential real estate loan originations for its portfolio. During 2016, the Bank originated $423.1 million in residential real estate loans of which $118.7 million were retained in its portfolio.

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Loan Portfolio    The following table shows the balance of the loans, the percentage of the gross loan portfolio, and the percentage of total interest income that the loans generated, by category, for the fiscal years indicated:

	As of		% of  Total Loans		% of Total Interest Income Generated For the Years Ended December 31,
	December 31, 2016				2016		2015		2014
	(Dollars in thousands)
Commercial	$	4,355,968	72.6	%	66.8	%	66.5	%	66.6	%
Consumer real estate	1,632,573		27.2	%	23.7	%	24.0	%	23.6	%
Other consumer	11,064		0.2	%	0.5	%	0.7	%	0.8	%
Total	$	5,999,605	100.0	%	91.0	%	91.2	%	91.0	%

Commercial Loans    Commercial loans consist of commercial and industrial loans, asset-based loans, commercial real estate loans, commercial construction loans and small business loans. The Bank offers secured and unsecured commercial loans for business purposes. Commercial loans may be structured as term loans or as revolving/nonrevolving lines of credit, and include overdraft protection, credit cards, and automatic clearinghouse (“ACH”) exposure. These loans may be collateralized by either owner or nonowner-occupied commercial mortgages.

The following pie chart shows the diversification of the commercial and industrial portfolio as of December 31, 2016:

Select Statistics Regarding the Commercial and Industrial Portfolio
	(Dollars in thousands)
Average loan size	$	233
Largest individual commercial and industrial loan outstanding	$	20,000
Commercial and industrial nonperforming loans/commercial and industrial loans	4.15		%

Commercial and industrial term loans generally have a repayment schedule of five years or less and, although the Bank occasionally originates some commercial term loans with interest rates which float in accordance with a designated index rate, the majority of commercial term loans have fixed rates of interest and are collateralized by equipment, machinery or other corporate assets. In addition, the Bank generally obtains personal guarantees from the principals of the borrower for virtually all of its commercial loans. At December 31, 2016, there were $322.5 million of term loans in the commercial and industrial loan portfolio.

Collateral for commercial and industrial revolving lines of credit may consist of accounts receivable, inventory, or both, as well as other business assets. Commercial revolving lines of credit generally are reviewed on an annual basis and usually require

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substantial repayment of principal during the course of a year. The vast majority of these revolving lines of credit have variable rates of interest. At December 31, 2016, there were $579.6 million of revolving lines of credit in the commercial and industrial loan portfolio.

Also included in the commercial and industrial portfolio are automobile and, to a lesser extent, boat, recreational vehicle, and other vehicle floor plan financing. Floor plan loans are secured by the automobiles, boats, or other vehicles, which constitute the dealer’s inventory. Upon the sale of a floor plan unit, the proceeds of the sale are applied to reduce the loan balance. In the event a unit financed under a floor plan line of credit remains in the dealer’s inventory for an extended period, the Bank requires the dealer to pay-down the outstanding balance associated with such unit. Contractors hired by the Bank make unannounced periodic inspections of each dealer to review the condition of the underlying collateral and ensure that each unit that the Company has financed is accounted for. At December 31, 2016, there were $77.6 million in floor plan loans, all of which have variable rates of interest.

Small business lending caters to all of the banking needs of businesses with commercial credit requirements and revenues typically less than or equal to $250,000 and $2.5 million, respectively, and uses partially automated loan underwriting capabilities. Additionally, the Company makes use of the Bank’s authority as a preferred lender with the U.S. Small Business Administration (“SBA”). At December 31, 2016, there were $36.3 million of SBA guaranteed loans in the commercial and industrial and commercial real estate loan categories, and $9.9 million of SBA guaranteed loans in the small business loan category.

The Bank’s commercial real estate portfolio, inclusive of commercial construction, is the Bank’s largest loan type concentration. This portfolio is well-diversified with loans secured by a variety of property types, such as owner-occupied and nonowner-occupied commercial, retail, office, industrial, warehouse, industrial development bonds, and other special purpose properties, such as hotels, motels, nursing homes, restaurants, churches, recreational facilities, marinas, and golf courses. Commercial real estate also includes loans secured by certain residential-related property types including multi-family apartment buildings, residential development tracts and condominiums.

The following pie chart shows the diversification of the commercial real estate portfolio as of December 31, 2016:

Select Statistics Regarding the Commercial Real Estate Portfolio
	(Dollars in thousands)
Average loan size	$	822
Largest individual commercial real estate mortgage outstanding	$	27,950
Commercial real estate nonperforming loans/commercial real estate loans	0.19		%
Owner occupied commercial real estate loans/commercial real estate loans	16.2		%

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Although terms vary, commercial real estate loans typically are underwritten with maturities of five to ten years. These loans generally have amortization periods of 20 to 25 years, with interest rates that float in accordance with a designated index or that are fixed during the origination process. For loans with terms greater than five years, with certain exceptions, interest rates may be fixed for no longer than five years and are reset typically on the fifth anniversary of the loan. It is the Bank’s policy to obtain personal guarantees from the principals of the borrower on commercial real estate loans and to obtain financial statements at least annually from all actively managed commercial and multi-family borrowers.

Commercial real estate lending entails additional risks as compared to residential real estate lending. Commercial real estate loans typically involve larger loan balances to single borrowers or groups of related borrowers. Development of commercial real estate projects also may be subject to numerous land use and environmental issues. The payment experience on such loans is typically dependent on the successful operation of the real estate project, which can be significantly impacted by supply and demand conditions within the markets for commercial, retail, office, industrial/warehouse and multi-family tenancy.

Also included in the commercial real estate portfolio are industrial developmental bonds. The Bank owns certain bonds issued by various state agencies, municipalities and nonprofit organizations that it categorizes as loans. This categorization is made on the basis that another entity (i.e. the Bank’s customer), not the issuing agency, is responsible for the payment to the Bank of the principal and interest on the debt. Furthermore, credit underwriting is based solely on the credit of the customer (and guarantors, if any), the banking relationship is with the customer and not the agency, there is no active secondary market for the bonds, and the bonds are not available for sale, but are intended to be held by the Bank until maturity. Therefore, the Bank believes that such bonds are more appropriately characterized as loans, rather than securities. At December 31, 2016, the balance of industrial development bonds was $81.4 million.

Construction loans are intended to finance the construction of residential and commercial properties, including loans for the acquisition and development of land or rehabilitation of existing properties. Nonpermanent construction loans generally have terms of at least six months, but not more than two years. They usually do not provide for amortization of the loan balance during the construction term. The majority of the Bank’s commercial construction loans have floating rates of interest. At December 31, 2016, the commercial construction portfolio amounted to $320.4 million.

Construction loans are generally considered to present a higher degree of risk than permanent real estate loans and may be affected by a variety of factors, such as adverse changes in interest rates and the borrower’s ability to control costs and adhere to time schedules. Other construction-related risks may include market risk, that is, the risk that “for-sale” or “for-lease” units may not be absorbed by the market within a developer’s anticipated time-frame or at a developer’s anticipated price. When the Company enters into a loan agreement with a borrower on a construction loan, an interest reserve may be included in the amount of the loan commitment to the borrower and it allows the lender to periodically advance loan funds to pay interest charges on the outstanding balance of the loan. The interest may be capitalized and added to the loan balance. Management actively tracks and monitors these accounts. At December 31, 2016 the amount of interest reserves relating to construction loans was approximately $1.3 million.

Consumer Real Estate Loans    The Bank’s consumer real estate loans consist of loans and lines secured by one-to-four family residential properties.

The Bank originates both fixed-rate and adjustable-rate residential real estate loans. The Bank will lend up to 97% of the lesser of the appraised value of the residential property securing the loan or the purchase price, and generally requires borrowers to obtain private mortgage insurance when the amount of the loan exceeds 80% of the value of the property. In certain instances for loans that qualify for the Fannie Mae Home Affordable Refinance Initiative and other similar programs, the Bank will lend up to 125% of the appraised value of the residential property, and such loans are then subsequently sold by the Bank. The rates of these loans are typically competitive with market rates. The Bank’s residential real estate loans are generally originated only under terms, conditions and documentation which permit sale in the secondary market. In order to protect the properties securing its residential and other real estate loans, the Bank requires title insurance protecting the priority of its mortgage lien, as well as fire, extended casualty, and flood insurance, when necessary. Independent appraisers assess properties securing all of the Bank’s first mortgage real estate loans, as required by regulatory standards.

Home equity loans and lines may be made as fixed rate term loans or under variable rate revolving lines of credit secured by a first or second mortgage on the borrower’s residence or second home. At December 31, 2016, 58.4% of the home equity portfolio was in first lien position and 41.6% of the portfolio was in subordinate position. At December 31, 2016, $351.9 million, or 35.6%, of the home equity portfolio were term loans and $636.3 million, or 64.4%, of the home equity portfolio was comprised of revolving lines of credit. The Bank will typically originate home equity loans and lines in an amount up to 80% of the appraised value or on-line valuation, reduced for any loans outstanding that are secured by such collateral. Home equity loans and lines are underwritten in accordance with the Bank’s loan policy, which includes a combination of credit history, loan-to-value (“LTV”) ratio, employment history and debt-to-income ratio.

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The Bank periodically supplements performance data with current Fair Isaac Corporation (“FICO”) and LTV estimates. Current FICO data is purchased and appended to all consumer loans on a quarterly basis. In addition, automated valuation services and broker opinions of value are used to supplement original value data for the residential and home equity portfolios. Use of re-score and re-value data enables the Bank to better understand the current credit risk associated with these loans, but is not the only factor relied upon in determining a borrower’s creditworthiness. See Note 4, “Loans, Allowance for Loan Losses and Credit Quality” within Notes to the Consolidated Financial Statements included in Item 8 hereof for more information regarding FICO and LTV estimates.

Other Consumer Loans    Consumer loans primarily consist of installment loans and overdraft protection. The Bank’s consumer loans also include auto loans, unsecured loans, loans secured by deposit accounts and loans to purchase motorcycles, recreational vehicles, or boats. Effective January 1, 2015, the Bank no longer offers consumer unsecured loans, or loans to purchase or refinance motorcycles, boats, or recreational vehicles.

Investment Activities

The Bank’s securities portfolio consists of U.S. Treasury securities, U.S. Government agency securities, agency mortgage-backed securities, agency collateralized mortgage obligations, state, county, and municipal securities, single issuer and pooled trust preferred securities issued by banks and insurers, small business administration pooled securities and equity securities, comprised primarily of investments in mutual funds. Also included in the Company's security portfolio are trading securities related to certain employee benefit programs. The majority of these securities are investment grade debt obligations with average lives of five years or less. U.S. Treasury and U.S. Government Agency securities entail a lesser degree of risk than loans made by the Bank by virtue of the guarantees that back them, require less capital under risk-based capital rules than noninsured or nonguaranteed mortgage loans, are more liquid than individual mortgage loans, and may be used to collateralize borrowings or other obligations of the Bank. The Bank views its securities portfolio as a source of income and liquidity. Interest and principal payments generated from securities provide a source of liquidity to fund loans and meet short-term cash needs. The Bank’s securities portfolio is managed in accordance with the Rockland Trust Company Investment Policy ("Investment Policy") approved by the Board of Directors. Two members of the Asset-Liability Committee of the Bank ("ALCO"), one of whom must be the Chief Executive Officer or the Chief Financial Officer, must approve purchases or sales, between meetings. These purchases are subject to limits on the type, size and quality of all investments, which are specified in the Investment Policy. The Bank’s ALCO, or its appointee, is required to evaluate any purchase from the standpoint of overall diversification of the portfolio. At December 31, 2016, the Company's securities totaled $851.5 million, and generated interest and dividends of 8.5%, 8.6%, and 8.7% of total interest income for the fiscal years ended December 31, 2016, 2015, and 2014, respectively. The Company reviews its security portfolio for impairment and to evaluate collection of principal and interest. If any securities are deferring interest payments, as they may be contractually entitled to do, the Company would place these securities on nonaccrual status and reverse any accrued but uncollected interest.

Sources of Funds

Deposits   At December 31, 2016, total deposits were $6.4 billion. Deposits obtained through the Bank’s branch banking network have traditionally been the principal source of the Bank’s funds for use in lending and for other general business purposes. The Bank has built a stable base of in-market core deposits from consumers, businesses, and municipalities. The Bank offers a range of demand deposits, interest checking, money market accounts, savings accounts, and time certificates of deposit. Interest rates on deposits are based on factors that include loan demand, deposit maturities, alternative costs of funds, and interest rates offered by competing financial institutions in the Bank’s market area. The Bank believes it has been able to attract and maintain satisfactory levels of deposits based on the level of service it provides to its customers, the convenience of its banking locations, its electronic banking options, and its interest rates, that are generally competitive with those of competing financial institutions. Additionally, the Bank has a municipal banking department that focuses on providing core depository services to local municipalities. As of December 31, 2016, municipal deposits totaled $496.0 million. Occasionally when rates and terms are favorable, and in keeping with the Bank’s interest rate risk and liquidity strategy, the Bank will supplement its customer deposit base with brokered deposits. As of December 31, 2016, brokered deposits totaled $14.7 million. Included in this amount are balances associated with the Bank's participation in the Certificate of Deposit Account Registry Service (“CDARS”) program, which allows the Bank to provide easy access to multi-million dollar Federal Deposit Insurance Corporation (“FDIC”) insurance protection on Certificate of Deposit investments for consumers, businesses and public entities. As of December 31, 2016, CDARS deposits totaled $13.7 million, or 93.2% of total brokered deposits.

Rockland Trust’s eighty-three branch locations are supplemented by the Bank’s internet and mobile banking services as well as automated teller machine (“ATM”) cards and debit cards which may be used to conduct various banking transactions at ATMs maintained at each of the Bank’s full-service offices and twelve additional remote ATM locations. The ATM cards and debit cards also allow customers access to a variety of national and international ATM networks. The Bank's mobile banking services give customers the ability to use a variety of mobile devices to check balances, track account activity, pay bills, search transactions, and set up alerts for text or e-mail messages for changes in their account. Customers can also transfer funds between Rockland Trust accounts, deposit checks into their account, and identify the nearest branch or ATM directly from their mobile device.

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Borrowings    As of December 31, 2016, total borrowings were $335.5 million. Borrowings consist of short-term and long-term obligations and may consist of Federal Home Loan Bank (“FHLB”) advances, federal funds purchased, securities sold under repurchase agreements, and junior subordinated debentures.

Rockland is a member of the FHLB of Boston. The primary reason for FHLB membership is to gain access to a reliable source of wholesale funding, particularly term funding, as a tool to manage interest rate risk. As a member of the FHLB of Boston, the Bank is required to purchase stock in the FHLB. Accordingly, the Company had invested $11.5 million in FHLB stock and had $50.8 million outstanding in FHLB borrowings with initial maturities ranging from less than 3 months to 20 years at December 31, 2016. In addition, the Bank had $793.1 million of borrowing capacity remaining with the FHLB at December 31, 2016, inclusive of a $5.0 million line of credit.

The Company also has access to other forms of borrowing, such as securities repurchase agreements. In a security repurchase agreement transaction, the Bank will generally sell a security, agreeing to repurchase either the same or a substantially identical security on a specified later date, at a price greater than the original sales price. The difference between the sale price and purchase price is the cost of the proceeds, which is recorded as interest expense. Payments on such borrowings are interest only until the scheduled repurchase date. In a repurchase agreement, the Bank is subject to the risk that the purchaser may default at maturity and not return the securities underlying the agreements. In order to minimize this risk, the Bank either deals with established firms when entering into these transactions or with customers whose agreements stipulate that the securities underlying the agreement are not delivered to the customer and instead are held in segregated safekeeping accounts by the Bank’s safekeeping agents. At December 31, 2016, the Bank had no repurchase agreements with investment brokerage firms and $176.9 million with customers.

Also included in borrowings at December 31, 2016 were $73.1 million of junior subordinated debentures, which are inclusive of unamortized fair value marks associated with previous acquisitions and net of unamortized issuance costs. Total borrowings also includes $34.6 million of subordinated debt, net of unamortized issuance costs. These instruments provide long-term funding as well as regulatory capital benefits. See Note 8, “Borrowings” within Notes to the Consolidated Financial Statements included in Item 8 hereof for more information regarding borrowings.

Investment Management

The Rockland Trust Investment Management Group provides investment management and trust services to individuals, institutions, small businesses, and charitable institutions throughout Eastern Massachusetts, including Cape Cod, and Rhode Island.

Accounts maintained by the Rockland Trust Investment Management Group consist of managed and nonmanaged accounts. Managed accounts are those for which the Bank is responsible for administration and investment management and/or investment advice, while nonmanaged accounts are those for which the Bank acts solely as a custodian or directed trustee. The Bank receives fees dependent upon the level and type of service(s) provided. For the year ended December 31, 2016, the Investment Management Group generated gross fee revenues of $19.6 million. Total assets under administration as of December 31, 2016 were $2.9 billion, of which $2.7 billion was related to managed accounts. Included in these amounts as of December 31, 2016 are assets under administration of $266.5 million, relating to the Company's registered investment advisor, Bright Rock Capital Management, LLC, which provides institutional quality investment management services to both institutional and high net worth clients.

The administration of trust and fiduciary accounts is monitored by the Trust Committee of the Bank’s Board of Directors. The Trust Committee has delegated administrative responsibilities to three committees, one for investments, one for administration, and one for operations, all of which are comprised of Investment Management Group officers who meet no less than quarterly.

The Bank has an agreement with LPL Financial (“LPL”) and its affiliates and their insurance subsidiary, LPL Insurance Associates, Inc., to offer the sale of mutual fund shares, unit investment trust shares, general securities, fixed and variable annuities and life insurance. Registered representatives who are both employed by the Bank and licensed and contracted with LPL are onsite to offer these products to the Bank’s customer base. These same agents are also approved and appointed with the Smith Companies LTD, a division of Capitas Financial, LLC, an insurance general agent, to offer term, whole and universal life insurance, disability insurance, and long term care insurance. The Bank also has an agreement with Savings Bank Life Insurance of Massachusetts (“SBLI”) to enable appropriately licensed Bank employees to offer SBLI’s fixed annuities and life insurance to the Bank’s customer base. For the year ended December 31, 2016, the retail investments and insurance group generated gross fee revenues of $2.2 million.

Regulation

The following discussion sets forth certain material elements of the regulatory framework applicable to bank holding companies and their subsidiaries and provides certain specific information relevant to the Company. To the extent that the following information describes statutory and regulatory provisions, it is qualified in its entirety by reference to the particular statutory and regulatory provisions. A change in applicable statutes, regulations or regulatory policy may have a material effect on the Company’s

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business. The laws and regulations governing the Company and the Bank that are described in the following discussion generally have been promulgated to offer protection to depositors and not for the purpose of protecting stockholders.

General The Company is registered as a bank holding company under the Bank Holding Company Act of 1956 as amended (“BHCA”), and as such is subject to regulation by the Board of Governors of the Federal Reserve System (“Federal Reserve”). Rockland Trust is subject to regulation and examination by the Commissioner of Banks of the Commonwealth of Massachusetts (the “Commissioner”) and the FDIC.

The Bank Holding Company Act    The BHCA prohibits the Company from acquiring direct or indirect ownership or control of more than 5% of any class of voting shares of any bank, or increasing such ownership or control of any bank, without prior approval of the Federal Reserve. The BHCA also prohibits the Company from, with certain exceptions, acquiring more than 5% of any class of voting shares of any company that is not a bank and from engaging in any business other than banking or managing or controlling banks.

Under the BHCA, the Federal Reserve is authorized to approve the ownership by the Company of shares in any company, the activities of which the Federal Reserve has determined to be so closely related to banking or to managing or controlling banks as to be a proper incident thereto. The Federal Reserve has, by regulation, determined that some activities are closely related to banking within the meaning of the BHCA. These activities include, but are not limited to, operating a mortgage company, finance company, credit card company, factoring company, trust company or savings association; performing data processing operations; providing some securities brokerage services; acting as an investment or financial adviser; acting as an insurance agent for types of credit-related insurance; engaging in insurance underwriting under limited circumstances; leasing personal property on a full-payout, nonoperating basis; providing tax planning and preparation services; operating a collection agency and a credit bureau; providing consumer financial counseling and courier services. The Federal Reserve also has determined that other activities, including real estate brokerage and syndication, land development, property management and, except under limited circumstances, underwriting of life insurance not related to credit transactions, are not closely related to banking and are not a proper incident thereto.

Financial Services Modernization Legislation   The Gramm-Leach-Bliley Act of 1999 (“GLB”) repealed provisions of the Glass-Steagall Act which restricted the affiliation of Federal Reserve member banks with firms “engaged principally” in specified securities activities, and which restricted officer, director, or employee interlocks between a member bank and any company or person “primarily engaged” in specified securities activities.

In addition, the GLB preempts any state law restricting the establishment of financial affiliations, primarily related to insurance. The general effect of the law has been to establish a comprehensive framework permitting affiliations among commercial banks, insurance companies, securities firms and other financial service providers, by revising and expanding the BHCA framework to permit a holding company to engage in a full range of financial activities through an entity known as a “financial holding company.” “Financial activities” is broadly defined to include not only banking, insurance and securities activities, but also merchant banking and additional activities that the Federal Reserve Board, in consultation with the Secretary of the Treasury, determines to be financial in nature, incidental to such financial activities or complementary activities that do not pose a substantial risk to the safety and soundness of depository institutions or the financial system generally.

The GLB also permits national banks to engage in expanded activities through the formation of financial subsidiaries. A national bank may have a subsidiary engaged in any activity authorized for national banks directly or any financial activity, except for insurance underwriting, insurance investments, real estate investment or development, or merchant banking, which may only be conducted through a subsidiary of a financial holding company. Financial activities include all activities permitted under the BHCA or permitted by regulation.

Because the GLB permits banks, securities firms and insurance companies to affiliate, the financial services industry has experienced further consolidation which has increased the amount of competition that the Company faces from larger institutions and other types of companies offering financial products, many of which may have substantially more financial resources than the Company.

Interstate Banking   The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, as amended by the Riegle-Neal Amendments Act of 1997 (the “Interstate Banking Act”), permits bank holding companies to acquire banks in states other than their home state without regard to state laws that previously restricted or prohibited such acquisitions except for any state requirement that the bank has been organized and operating for a minimum period of time, not to exceed five years, and the requirement that the bank holding company, after the proposed acquisition, controls no more than 10 percent of the total amount of deposits of insured depository institutions in the United States and no more than 30 percent or such lesser or greater amount set by state law of such deposits in that state. The Interstate Banking Act also facilitates the operation by state-chartered banks of branch networks across state lines.

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Pursuant to Massachusetts law, no approval to acquire a banking institution, acquire additional shares in a banking institution, acquire substantially all the assets of a banking institution, or merge or consolidate with another bank holding company, may be given if the bank being acquired has been in existence for a period less than three years or, as a result, the bank holding company would control, in excess of 30% of the total deposits of all state and federally chartered banks in Massachusetts, unless waived by the Commissioner. With the prior written approval of the Commissioner, Massachusetts also permits the establishment of de novo branches in Massachusetts to the full extent permitted by the Interstate Banking Act, provided the laws of the home state of such out-of-state bank expressly authorize, under conditions no more restrictive than those of Massachusetts, Massachusetts’ banks to establish and operate de novo branches in such state.

Capital Requirements   The Federal Reserve has adopted capital adequacy guidelines pursuant to which it assesses the adequacy of capital in examining and supervising a bank holding company and in analyzing applications to it under the BHCA. In July 2013, the Federal Reserve published final rules establishing a new comprehensive capital framework for U.S. banking organizations, referred to herein as the "Rules". The FDIC has adopted substantially identical rules (as interim final rules). The Rules implement the Basel Committee’s December 2010 framework, commonly referred to as Basel III, for strengthening international capital standards as well as certain provisions of the Dodd-Frank Act. The Rules substantially revised the risk-based capital requirements applicable to bank holding companies and depository institutions, including the Company and the Bank. The Rules became effective for the Company on January 1, 2015 (subject to phase-in periods for certain components).

The Rules, among other things: (i) introduced a new capital measure called “Common Equity Tier 1,” or CET1; (ii) specified that Tier 1 capital consist of CET1 and “Additional Tier 1 capital” instruments meeting specified requirements; (iii) applied most deductions/adjustments to regulatory capital measures to CET1 and not to the other components of capital, thus potentially requiring higher levels of CET1 in order to meet minimum ratios; and (iv) expanded the scope of the reductions/adjustments from capital as compared to existing regulations.

Under the Rules the minimum capital ratios for the Company and the Bank are as follows:

• 4.5% CET1 to risk-weighted assets.

• 6.0% Tier 1 capital (i.e., CET1 plus Additional Tier 1) to risk-weighted assets.

• 8.0% Total capital (i.e., Tier 1 plus Tier 2) to risk-weighted assets.

• 4.0% Tier 1 leverage capital ratio.

When fully phased in on January 1, 2019, the Rules will also require the Company and the Bank to maintain a “capital conservation buffer” in an amount greater than 2.5%, composed entirely of CET1, on top of the minimum risk-weighted asset ratios. The capital conservation buffer is designed to absorb losses during periods of economic stress. Banking institutions that meet the minimum capital requirements of 4.5%, 6.0% and 8.0% for CET1, Tier 1 and Total capital, respectively, but fall below the capital conservation buffer, will face constraints on capital distributions and discretionary bonus payments to executive officers based on the amount of the shortfall. The capital conservation buffer effectively increases the minimum CET1 capital ratio to 7.0%, the minimum Tier 1 risk-based capital ratio to 8.5%, and the minimum total risk-based capital ratio to 10.5%, for banking organizations seeking to avoid the limitations on capital distributions and discretionary bonus payments to executive officers. The implementation of the capital conservation buffer began on January 1, 2016 at an amount of 0.625% and will increase by 0.625% on each subsequent January 1, until it reaches 2.5% on January 1, 2019. As of January 1, 2017, the Company and the Bank were required to maintain a capital conservation buffer of 1.25%.

The Rules provided for a number of deductions from and adjustments to CET1. These include, for example, the requirement that mortgage servicing rights, deferred tax assets dependent upon future taxable income, and significant investments in common equity issued by nonconsolidated financial entities be deducted from CET1 to the extent that any one such category exceeds 10% of CET1 or all such categories in the aggregate exceed 15% of CET1. In addition, the effects of certain accumulated other comprehensive items are not excluded; however, certain banking organizations could make a one-time permanent election to continue to exclude these items effective as of January 1, 2015. The Company and the Bank each made such election.

The deductions and other adjustments to CET1 are being phased in incrementally between January 1, 2015 and January 1, 2018.

With respect to the Bank, the Rules also revised the “prompt corrective action” regulations pursuant to Section 38 of the Federal Deposit Insurance Act, by: (i) introducing a CET1 ratio requirement at each capital quality level (other than critically undercapitalized), with the required CET1 ratio being 6.5% for well-capitalized status; (ii) increasing the minimum Tier 1 capital ratio requirement for each category, with the minimum Tier 1 capital ratio for well-capitalized status being 8% (as compared to the previous 6%); and (iii) requiring a leverage ratio of 5% to be well-capitalized (as compared to the previously required leverage ratio of 3 or 4%). The Rules did not change the total risk-based capital requirement for any “prompt corrective action” category.

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When the capital conservation buffer is fully phased in, the capital ratios applicable to depository institutions under the Rules will exceed the ratios to be considered well-capitalized under the prompt corrective action regulations.

The Rules prescribed a standardized approach for calculating risk-weighted assets that expand the risk-weighting categories from the past four Basel I-derived categories (0%, 20%, 50% and 100%) to a much larger and more risk-sensitive number of categories, depending on the nature of the assets.

The revised minimum capital levels under the Rules are set forth below:

	Bank						Holding Company
	Total Risk-Based Ratio		Tier 1 Risk-Based Ratio		Common Equity Tier 1 Capital	Tier 1 Leverage Capital Ratio	Total Risk-Based Ratio		Tier 1 Risk-Based Ratio		Tier 1 Leverage Capital Ratio
Category
Well capitalized	> 10%	and	> 8%	and	> 6.5%	> 5%	n/a		n/a		n/a
Adequately capitalized	> 8%	and	> 6%	and	> 4.5%	> 4%	> 8%	and	> 6%	and	> 4%
Undercapitalized	< 8%	or	< 6%	or	< 4.5%	< 4%	< 8%	or	< 6%	or	< 4%
Significantly undercapitalized	< 6%	or	< 4%	or	< 3%	< 3%	n/a		n/a		n/a

The Company is currently in compliance with the above-described regulatory capital requirements. See Note 19, “Regulatory Matters” within Notes to the Consolidated Financial Statements included in Item 8 hereof for more information.

Commitments to Affiliated InstitutionsUnder Federal Reserve policy, the Company is expected to act as a source of financial strength to the Bank and to commit resources to support the Bank. This support may be required at times when the Company may not be able to provide such support. Similarly, under the cross-guarantee provisions of the Federal Deposit Insurance Act, in the event of a loss suffered or anticipated by the FDIC - either as a result of default of a banking or thrift subsidiary of a bank holding company such as the Company or related to FDIC assistance provided to a subsidiary in danger of default - the other banking subsidiaries of such bank holding company may be assessed for the FDIC’s loss, subject to certain exceptions.

Limitations on Acquisitions of Common Stock   The federal Change in Bank Control Act (“CBCA”) prohibits a person or group of persons from acquiring control of a bank holding company or bank unless the appropriate federal bank regulator has been given 60 days prior written notice of such proposed acquisition and within that time period such regulator has not issued a notice disapproving the proposed acquisition or extending for up to another 30 days the period during which such a disapproval may be issued. The acquisition of 25% or more of any class of voting securities constitutes the acquisition of control under the CBCA. In addition, under a rebuttal presumption established under the CBCA regulations, the acquisition of 10% or more of a class of voting stock of a bank holding company or a FDIC insured bank, with a class of securities registered under or subject to the requirements of Section 12 of the Securities Exchange Act of 1934 would, under the circumstances set forth in the presumption, constitute the acquisition of control.

Any company would be required to obtain the approval of the Federal Reserve under the BHCA before acquiring 25% (5% in the case of an acquirer that is a bank holding company) or more of the outstanding common stock of the Company, or such lesser number of shares as constitute control over the Company. Such approval would be contingent upon, among other things, the acquirer registering as a bank holding company, divesting all impermissible holdings and ceasing any activities not permissible for a bank holding company. The Company does not own more than 5% voting stock in any banking institution other than the Bank.

FDIC Deposit Insurance   The Bank's deposit accounts are insured to the maximum extent permitted by law by the Deposit Insurance Fund which is administered by the FDIC. The FDIC offers insurance coverage on deposits up to the federally insured limit of $250,000.

The Bank is currently assessed a deposit insurance charge from the FDIC based upon the Bank's overall assessment base multiplied by an assessment rate, determined from five established risk categories. The Bank's assessment base is defined as average consolidated total assets minus average tangible equity, adjusted for the impact of the risk category factors. In June 2016, the Deposit Insurance Fund reserve ratio reached a level that triggered changes to the assessment rate, effective July 1, 2016. As a result of these changes the Company's assessment rate decreased, resulting in overall reduced levels of expense. During 2016, the Company expensed $3.4 million related to this assessment.

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Community Reinvestment Act (“CRA”)   Pursuant to the CRA and similar provisions of Massachusetts law, regulatory authorities review the performance of the Company and the Bank in meeting the credit needs of the communities served by the Bank. The applicable regulatory authorities consider compliance with this law in connection with applications for, among other things, approval of new branches, branch relocations, engaging in certain additional financial activities under the GLB, and acquisitions of banks and bank holding companies. The FDIC and the Massachusetts Division of Banks have assigned the Bank a CRA rating of Outstanding as of the latest examination.

Bank Secrecy Act    The Bank Secrecy Act requires financial institutions to keep records and file reports that are determined to have a high degree of usefulness in criminal, tax and regulatory matters, and to implement counter-money laundering programs and compliance procedures.

USA Patriot Act of 2001  The Patriot Act strengthens U.S. law enforcement’s and the intelligence communities’ abilities to work cohesively to combat terrorism on a variety of fronts. The impact of the Patriot Act on financial institutions of all kinds is significant and wide ranging. The Patriot Act contains sweeping anti-money laundering and financial transparency laws and imposes various regulations, including standards for verifying client identification at account opening, and rules to promote cooperation among financial institutions, regulators and law enforcement entities in identifying parties that may be involved in terrorism or money laundering.

Sarbanes-Oxley Act of 2002 The Sarbanes-Oxley Act of 2002 (“SOX”) implemented a broad range of corporate governance and accounting measures to increase corporate responsibility, to provide for enhanced penalties for accounting and auditing improprieties at public companies, and to protect investors by improving the accuracy and reliability of disclosures under federal securities laws. Among other things, SOX and/or its implementing regulations have established new membership requirements and additional responsibilities for the Company’s audit committee, imposed restrictions on the relationship between the Company and its external auditors (including restrictions on the types of non-audit services the external auditors may provide), imposed additional responsibilities for the external financial statements on the Chief Executive Officer and Chief Financial Officer, expanded the disclosure requirements for corporate insiders, required management to evaluate disclosure controls and procedures, as well as internal control over financial reporting, and required the auditors to issue a report on the internal control over financial reporting.

Regulation W Transactions between a bank and its “affiliates” are quantitatively and qualitatively restricted under the Federal Reserve Act. The Federal Deposit Insurance Act applies Sections 23A and 23B to insured nonmember banks in the same manner and to the same extent as if they were members of the Federal Reserve System. The Federal Reserve Board has also issued Regulation W, which codifies prior regulations under Sections 23A and 23B of the Federal Reserve Act and interpretative guidance with respect to affiliate transactions. Regulation W incorporates the exemption from the affiliate transaction rules, but expands the exemption to cover the purchase of any type of loan or extension of credit from an affiliate. Affiliates of a bank include, among other entities, the bank’s holding company and companies that are under common control with the bank. The Company is considered to be an affiliate of the Bank. In general, subject to certain specified exemptions, a bank and its subsidiaries are limited in their ability to engage in “covered transactions” with affiliates:

• to an amount equal to 10% of the bank’s capital and surplus, in the case of covered transactions with any one affiliate; and

• to an amount equal to 20% of the bank’s capital and surplus, in the case of covered transactions with all affiliates.

In addition, a bank and its subsidiaries may engage in covered transactions and other specified transactions only on terms and under circumstances that are substantially the same, or at least as favorable to the bank or its subsidiary, as those prevailing at the time for comparable transactions with nonaffiliated companies. A “covered transaction” includes:

• a loan or extension of credit to an affiliate;

• a purchase of, or an investment in, securities issued by an affiliate;

• a purchase of assets from an affiliate, with some exceptions;

• the acceptance of securities issued by an affiliate as collateral for a loan or extension of credit to any party; and

• the issuance of a guarantee, acceptance or letter of credit on behalf of an affiliate.

In addition, under Regulation W:

• a bank and its subsidiaries may not purchase a low-quality asset from an affiliate;

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• covered transactions and other specified transactions between a bank or its subsidiaries and an affiliate must be on terms and conditions that are consistent with safe and sound banking practices; and

• with some exceptions, each loan or extension of credit by a bank to an affiliate must be secured by collateral with a market value ranging from 100% to 130%, depending on the type of collateral, of the amount of the loan or extension of credit.

Regulation W generally excludes all nonbank and nonsavings association subsidiaries of banks from treatment as affiliates, except to the extent that the Federal Reserve Board decides to treat these subsidiaries as affiliates.

New Markets Tax Credit Program    The New Markets Tax Credit Program was created in December 2000 under federal law to provide federal tax incentives to induce private-sector, market-driven investment in businesses and real estate development projects located in low-income urban and rural communities across the nation. The New Markets Tax Credit Program is part of the United States Department of the Treasury Community Development Financial Institutions Fund. The New Markets Tax Credit Program enables investors to acquire federal tax credits by making equity investments for a period of at least seven years in qualified community development entities which have been awarded tax credit allocation authority by, and entered into an allocation agreement with, the United States Treasury. Community development entities must use equity investments to make loans to, or other investments in, qualified businesses and individuals in low-income communities in accordance with New Markets Tax Credit Program criteria. Investors receive an overall tax credit equal to 39% of their total equity investment, credited at a rate of 5% in each of the first 3 years and 6% in each of the final 4 years. More information on the New Markets Tax Credit Program may be obtained at www.cdfifund.gov. (The Company has included the web address only as inactive textual references and does not intend it to be an active link to the New Markets Tax Credit Programs website.) For further details about the Bank’s New Markets Tax Credit Program, see the paragraph entitled “Income Taxes” included in Item 7 below.

Dodd-Frank Wall Street Reform and Consumer Protection Act   During 2010, Congress enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). This significant law affects the lending, deposit, investment, trading and operating activities of financial institutions and their holding companies.

Key provisions of the Dodd-Frank Act are as follows:

• eliminated the federal prohibitions on paying interest on demand deposits, thus allowing businesses to have interest bearing checking accounts.

• broadened the base for Federal Deposit Insurance Corporation insurance assessments. The Dodd-Frank Act also permanently increased the maximum amount of deposit insurance for banks, savings institutions and credit unions to $250,000 per depositor.

• requires publicly traded companies to give stockholders a nonbinding vote on executive compensation and so-called “golden parachute” payments. The Company provides its shareholders with the opportunity to vote on executive compensation every year.

• broadened the scope of derivative instruments, and the Company is subject to increased regulation of its derivative business, including record keeping, reporting requirements, and heightened supervision.

• created a new Consumer Financial Protection Bureau with broad powers to supervise and enforce consumer protection laws. Banks and savings institutions with $10 billion or less in assets will continue to be examined for compliance with consumer laws by their primary bank regulators.

• debit card and interchange fees must be reasonable and proportional to the issuer’s cost for processing the transaction.

In January 2013, the CFPB issued a series of final rules related to mortgage loan origination and mortgage loan servicing. In particular, the CFPB issued a final rule amending Regulation Z to implement certain amendments to the Truth in Lending Act. The CFPB issued a final rule implementing amendments to the Truth in Lending Act and the Real Estate Settlement Procedures Act.  The rule amends Regulation Z by expanding the types of mortgage loans that are subject to the protections of the Home Ownership and Equity Protections Act of 1994 (HOEPA), revising and expanding the tests for coverage under HOEPA, and imposing additional restrictions on mortgages that are covered by HOEPA, including a pre-loan counseling requirement.  The rule also amends Regulation Z and Regulation X by imposing other requirements related to homeownership counseling.

In addition, the CFPB amended Regulation B to implement changes to the Equal Credit Opportunity Act. The CFPB also amended Regulation Z to implement requirements and restrictions to the Truth in Lending Act concerning loan originator compensation, qualifications of, and registration or licensing of loan originators, compliance procedures for depository institutions, mandatory arbitration, and the financing of single-premium credit insurance.  

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The final rules also implement the ability-to-repay and qualified mortgage (QM) provisions of the Truth in Lending Act, as amended by the Dodd-Frank Act (the “QM Rule”). The ability-to-repay provision requires creditors to make reasonable, good faith determinations that borrowers are able to repay their mortgages before extending the credit based on a number of factors and consideration of financial information about the borrower from reasonably reliable third-party documents. Under the Dodd-Frank Act and the QM Rule, loans meeting the definition of “qualified mortgage” are entitled to a presumption that the lender satisfied the ability-to-repay requirements. The presumption is a conclusive presumption/safe harbor for prime loans meeting the QM requirements, and a rebuttable presumption for higher-priced/subprime loans meeting the QM requirements. The definition of a “qualified mortgage” incorporates the statutory requirements, such as not allowing negative amortization or terms longer than 30 years. The QM Rule also adds an explicit maximum 43 percent debt-to-income ratio for borrowers if the loan is to meet the QM definition, though some mortgages that meet GSE, FHA and VA underwriting and eligibility guidelines may, for a period not to exceed seven years, meet the QM definition without being subject to the 43 percent debt-to-income limits.

The CFPB has continued to issue final rules regarding mortgages including amendments to certain mortgage servicing sales regarding forced-placed insurance notices, policies and procedures and other matters. There is no assurance that existing or future regulations will not have a material adverse impact on the Bank’s residential mortgage loan business or the housing market in which the Bank participates.

To the extent the Dodd-Frank Act remains in place or is not materially amended by the new administration, it is likely to continue to increase the Company's cost of doing business, limit the Bank's permissible activities, and affect the competitive balance within the industry and market areas.

Incentive Compensation The Dodd-Frank Act requires the federal bank regulatory agencies and the SEC to establish joint regulations or guidelines prohibiting incentive-based payment arrangements at specified regulated entities, such as the Company and the Bank, with at least $1 billion in total assets that encourage inappropriate risks by providing an executive officer, employee, director or principal shareholder with excessive compensation, fees, or benefits or that could lead to material financial loss to the entity. In addition, these regulators must establish regulations or guidelines requiring enhanced disclosure to regulators of incentive-based compensation arrangements. The agencies proposed such regulations in April 2011, and proposed revised regulations in May 2016 but the revised regulations have not been finalized. If the revised regulations are adopted in the form proposed, they will impose limitations on the manner in which the Company may structure compensation for its executives and employees.

In June 2010, the FRB, OCC and FDIC issued comprehensive final guidance on incentive compensation policies intended to ensure that the incentive compensation policies of banking organizations do not undermine the safety and soundness of such organizations by encouraging excessive risk-taking. The guidance, which covers all employees that have the ability to materially affect the risk profile of an organization, either individually or as part of a group, is based upon the key principles that a banking organization’s incentive compensation arrangements should (i) provide incentives that do not encourage risk-taking beyond the organization’s ability to effectively identify and manage risks, (ii) be compatible with effective internal controls and risk management, and (iii) be supported by strong corporate governance, including active and effective oversight by the organization’s board of directors. These three principles are incorporated into the proposed joint compensation regulations under the Dodd-Frank Act.

The FRB will review, as part of its regular, risk-focused examination process, the incentive compensation arrangements of banking organizations, such as the Company, that are not “large, complex banking organizations.” These reviews will be tailored to each organization based on the scope and complexity of the organization’s activities and the prevalence of incentive compensation arrangements. The findings of the supervisory initiatives will be included in reports of examination. Deficiencies will be incorporated into the organization’s supervisory ratings, which can affect the organization’s ability to make acquisitions and take other actions. Enforcement actions may be taken against a banking organization if its incentive compensation arrangements, or related risk-management control or governance processes, pose a risk to the organization’s safety and soundness and the organization is not taking prompt and effective measures to correct the deficiencies.

Volcker Rule On December 10, 2013, the Federal Reserve, the Office of the Comptroller of the Currency, the FDIC, the CFTC and the SEC issued final rules to implement the Volcker Rule contained in section 619 of the Dodd-Frank Act. The Volcker Rule prohibits an insured depository institution and its affiliates from: (i) engaging in “proprietary trading” and (ii) investing in or sponsoring certain types of funds (defined as “Covered Funds”) subject to certain limited exceptions. The rule also effectively prohibits short-term trading strategies by any U.S. banking entity if those strategies involve instruments other than those specifically permitted for trading and prohibits the use of some hedging strategies. The Company has no investments that met the definition of Covered Funds under the foregoing rules.

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Consumer Protection Regulations The Bank is subject to federal consumer protection statutes and regulations, including, but not limited to the following:

• Truth-In-Lending Act and Regulation Z, governing disclosures of credit terms to consumer borrowers;

• Home Mortgage Disclosure Act and Regulation C, requiring financial institutions to provide certain information about home mortgage and refinanced loans;

• Equal Credit Opportunity Act and Regulation B, prohibiting discrimination on the basis of race, creed, or other prohibited factors in extending credit;

• Fair Credit Reporting Act and Regulation V, governing the provision of consumer information to credit reporting agencies and the use of consumer information; and

• Fair Debt Collection Act, governing the manner in which consumer debts may be collected by collection agencies.

The Bank’s deposit operations are also subject to the following federal statutes and regulations, among others:

• The Truth in Savings Act and Regulation DD, which requires disclosure of deposit terms to consumers;

• Regulation CC, which relates to the availability of deposit funds to consumers;

• The Right to Financial Privacy Act, which imposes a duty to maintain the confidentiality of consumer financial records and prescribes procedures for complying with administrative subpoenas of financial records; and

• Electronic Funds Transfer Act and Regulation E, governing automatic deposits to, and withdrawals from, deposit accounts and customers’ rights and liabilities arising from the use of automated teller machines and other electronic banking services.

Many of the foregoing laws and regulations are subject to change resulting from the provisions in the Dodd-Frank Act, which in many cases calls for revisions to implementing regulations, such as the amendments described above in the discussion on the Dodd-Frank Act.

Regulation E   Federal Reserve Board Regulation E governs electronic fund transfers and provides a basic framework that establishes the rights, liabilities, and responsibilities of participants in electronic fund transfer systems such as automated teller machine transfers, telephone bill-payment services, point-of-sale terminal transfers in stores, and preauthorized transfers from or to a consumer’s account (such as direct deposit and social security payments). The term “electronic fund transfer” generally refers to a transaction initiated through an electronic terminal, telephone, computer, or magnetic tape that instructs a financial institution either to credit or to debit a consumer’s asset account. Regulation E describes the disclosures which financial institutions are required to make to consumers who engage in electronic fund transfers and generally limits a consumer’s liability for unauthorized electronic fund transfers, such as those arising from loss or theft of an access device, to $50 for consumers who notify their bank in a timely manner.

Employees  As of December 31, 2016, the Bank had 1,103 full time equivalent employees. None of the Company’s employees are represented by a labor union and management considers its relationship with employees to be good.

Statistical Disclosure by Bank Holding Companies

The statistical disclosure relating to Independent Bank Corp. required under the SEC's Industry Guide 3, "Statistical Disclosure by Bank Holding Companies," is included in the section of Independent Bank Corp.'s 2016 SEC Form 10-K captioned, Selected Financial Data in Item 6 hereof , Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 hereof and Note 8, “Borrowings” within Notes to the Consolidated Financial Statements included in Item 8 hereof, if applicable.

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Available Information

Under Section 13 and 15(d) of the Securities Exchange Act of 1934 the Company must file periodic and current reports with the SEC. The public may read and copy any materials filed with the SEC at the SEC’s Public Reference Room at 100 F Street N.E. Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the Public Reference Room at 1-800-SEC-0330. The Company electronically files the following reports with the SEC: Form 10-K (Annual Report), Form 10-Q (Quarterly Report), Form 11-K (Annual Report for Employees’ Savings, Profit Sharing and Stock Ownership Plan), Form 8-K (Report of Unscheduled Material Events), Forms S-4, S-3 and 8-A (Registration Statements), Form DEF 14A (Proxy Statement), and the Company may file additional forms as well. The SEC maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, at www.sec.gov, in which all forms filed electronically may be accessed. Additionally, the Company’s SEC filings and additional shareholder information are available free of charge on the Company’s website: www.RocklandTrust.com (within the Investor Relations section). Information contained on the Company’s website and the SEC website is not incorporated by reference into this Form 10-K. (The Company has included its web address and the SEC website address only as inactive textual references and does not intend them to be active links to our website or the SEC website.) The Company’s Code of Ethics and other Corporate Governance documents are also available on the Company’s website in the Investor Relations section of the website.

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ITEM 1A. RISK FACTORS

Changes in interest rates and other factors could adversely impact the Company’s financial condition and results of operations.    The Company’s ability to make a profit, like that of most financial institutions, substantially depends upon its net interest income, which is the difference between the interest income earned on interest earning assets, such as loans and investment securities, and the interest expense paid on interest-bearing liabilities, such as deposits and borrowings. However, certain assets and liabilities may react differently to changes in market interest rates. Further, interest rates on some types of assets and liabilities may fluctuate prior to changes in broader market interest rates, while rates on other types of assets and liabilities may lag behind. Additionally, some assets such as adjustable-rate mortgages have features, such as rate caps and floors, which restrict changes in applicable interest rates. The Federal Reserve Bank acted to increase interest rates in December of 2016 and may act to implement additional rate increases in the coming year.

Factors such as inflation, recession, unemployment, money supply, global disorder, instability in domestic and foreign financial markets, political uncertainty, and other factors beyond the Company’s control, may affect interest rates. Changes in market interest rates also affect the level of voluntary prepayments on loans and the receipt of payments on mortgage-backed securities, which can impact the expected timing of receipt of proceeds. Particularly in a decreasing interest environment, prepayments may result in proceeds having to be reinvested at a lower rate than the loan or mortgage-backed security being prepaid.

Potential sovereign debt defaults may severely impact global and domestic economies and may lead to significantly tighter liquidity and impact the availability of credit. Economic growth may slow down and the national or global economy may experience additional downturns, including recessionary periods. Market disruption, including potential disruption resulting form Great Britain's decision to exit the European Union, government and central bank policy actions designed to counteract the effects of recession, changes in investor expectations regarding compensation for market risk, credit risk and liquidity risk and changing economic data could impact both the volatility of and the magnitude of the directional movements of interest rates. Although the Company pursues an asset/liability management strategy designed to manage its risk arising from changes in interest rates, the Company's strategy may not be fully effective, or may be effective in part, and changes in market interest rates can have a material adverse effect on the Company’s profitability.

If the Company experiences loan losses at a level higher than anticipated in the Company's models, its earnings could materially decrease.    The Company’s loan customers may not repay loans according to their terms, and the collateral securing the payment of loans may be insufficient to assure repayment or cover losses. If loan customers fail to repay loans according to the terms of the loans, the Company may experience significant credit losses which could have a material adverse effect on its operating results and capital ratios. The Company makes various assumptions and judgments about the collectability of its loan portfolio, including the creditworthiness of borrowers, the value of the real estate and other assets serving as collateral for the repayment of loans, and the enforceability of its loan documents. In determining the amount of the allowance for loan losses, the Company, in addition to assessing the collectability of its loan portfolio, relies on experience and evaluation of economic conditions. If the assumptions underlying the determination of its allowance for loan losses prove to be incorrect, the current allowance for loan losses may not be sufficient to cover losses inherent in its loan portfolio and an adjustment may be necessary to allow for different economic conditions or adverse developments in its loan portfolio. A problem with one or more loans could require the Company to significantly increase the level of its allowance for loan losses. In addition, federal and state regulators periodically review the Company’s allowance for loan losses and may require it to increase its allowance for loan losses or recognize further loan charge-offs. Material additions to the allowance would materially decrease the Company’s net income.

A significant amount of the Company’s loans are concentrated in the Bank’s geographic footprint and adverse conditions in this geographic footprint could negatively impact its results of operations.    Substantially all of the loans the Company originates are secured by properties located in, or are made to businesses which operate in Massachusetts, and to a lesser extent Rhode Island. Because of the current concentration of the Company’s loan origination activities in its geographic footprint, in the event of adverse economic conditions impacting the region (including, but not limited to, increased unemployment, downward pressure on the value of residential or commercial real estate, political or business developments, that may affect the ability of property owners and businesses to make payments of principal and interest on the underlying loans in the Bank’s geographic footprint). The Company would likely experience higher rates of loss and delinquency on its loans than if its loan portfolio were more geographically diversified, which could have an adverse effect on its results of operations or financial condition.

A significant portion of the Company’s loan portfolio is secured by real estate, and events that negatively impact the real estate market could adversely affect the Company’s asset quality and the profitability of loans secured by real property and increase the number of defaults and the level of losses within the Company’s loan portfolio. The real estate collateral securing our loans provides an alternate source of repayment in the event of default by the borrower. Should real estate values deteriorate during the time the credit is extended, the Company is potentially exposed to greater losses. A downturn in the real estate market in the Company’s primary market areas could result in an increase in the number of borrowers who default on loans and a reduction in the value of the collateral securing loans, which in turn could have an adverse effect on the Company’s profitability

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and asset quality. Further if the Company is required to liquidate collateral securing a loan to satisfy the related debt during a period of reduced real estate values, the Company may experience higher loan losses and its earnings and shareholders’ equity could be adversely affected. The declines in real estate prices in the Company’s primary markets also may result in increases in delinquencies and losses in its loan portfolios. Unanticipated decreases in real estate prices coupled with a prolonged economic recovery and elevated levels of unemployment could drive loan losses beyond the level provided for in the Company’s allowance for loan losses. If this occurs, the Company’s earnings could be adversely affected.

The Company operates in a highly regulated environment and may be adversely impacted by changes in law, regulations, and accounting policies.    The Company is subject to extensive regulation, supervision and examination. See “Regulation” in Item 1 hereof, Business. Any change in the laws or regulations or failure by the Company to comply with applicable law and regulation, or a change in regulators’ supervisory policies or examination procedures, whether by the Massachusetts Commissioner of Banks, the FDIC, the Federal Reserve Board, other state or federal regulators, the United States Congress, or the Massachusetts legislature could have a material adverse effect on the Company’s business, financial condition, results of operations, and cash flows. Changes in accounting policies, practices and standards, as may be adopted by the regulatory agencies as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board, and other accounting standard setters, could also impact the Company’s financial results.

Change in regulatory capital requirements may have an adverse impact on the Company's future financial results. In 2013, the FDIC, the OCC and the Federal Reserve Board approved new rules that substantially amended the regulatory risk-based capital rules applicable to the Company and the Bank. The final rule implemented the “Basel III” regulatory capital reforms and changes required by the Dodd-Frank Act. The new rules went into effect on January 1, 2015, although certain portions of the rule, including the capital conservation buffer, are being phased in over a period of several years. The application of more stringent capital requirements, including the phase in of the capital conservation buffer could, among other things, lower returns on equity, require the raising of additional capital, or impact the ability to deploy capital (including, with out limitations, to pay dividends or to repurchase shares of the Company's common stock).

The Company has strong competition within its market area which may constrain the Company’s ability to grow and achieve profitability.    The Company faces significant competition both in attracting deposits and in the origination of loans. See “Market Area and Competition” in Item 1 hereof, Business. Additional mergers and acquisitions of financial institutions within the Company’s market area may also occur which could add more competitive pressure as the Company would be competing with the resultant larger financial institutions with greater financial resources on a combined basis. Additionally, the Company's market share and income may be adversely affected by its inability to successfully compete against larger and more diverse financial service providers. If the Company is unable to compete effectively, it may lose market share, or fail to maintain its market share, and income generated from loans, deposits, and other financial products may decline.

The success of the Company is dependent on the Company's ability to attract, hire and retain certain key personnel.    The Company’s business is complex and specialized and performance is largely dependent on the knowledge, talents and efforts of highly skilled individuals. The Company relies on key personnel to manage and operate its business, including major revenue producing functions such as loan and deposit generation. The loss of key personnel could adversely affect the Company’s ability to maintain and manage these functions effectively, which could negatively affect the Company’s net income. In addition, loss of key personnel could result in increased recruiting and hiring expenses, which could adversely impact the Company’s net income. The Company’s continued ability to compete effectively depends on its ability to attract new employees and to retain and motivate its existing key employees.

Part of Company’s business strategy is growth through acquisitions and the failure to execute effectively on acquisitions could have an impact on its earnings and results of operations.    While focus on organic growth, the Company's strategy also includes, in part, growth through acquisitions. The Company recently announced its intention to acquire Island Bancorp which is expected to close in the second quarter of 2017. The Company may not be able to identify suitable acquisition candidates, or complete acquisitions. Further, the success of any acquisition depends on the ability to effectively integrate the acquired business, including integrating operations and achieving synergies and cost efficiencies. Acquisitions can be disruptive as they result in diversion of management's attention from other business activities and can consume significant executive and employee resources as the Company integrates the target's operations and functional business into its operations and business. The Company may experience complications or delays while integrating. In addition, once integrated, acquired businesses may not achieve levels of expected profitability or profitability comparable to those achieved by the Company’s existing operations, or otherwise may not perform as expected. Further acquisitions involve numerous risks, including lower than expected performance or higher than expected costs, potential dilution of stockholder value, changes in relationships with customers, and the potential loss of key employees. In addition, the Company may not be successful in mitigating deposit erosion or loan quality deterioration at acquired institutions. Competition for acquisitions can be highly competitive, and the Company may not be able to acquire other institutions on acceptable terms. The ability to grow may be limited if the Company is unable to successfully make acquisitions in the future.

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The Company’s securities portfolio performance in difficult market conditions could have adverse effects on the Company’s results of operations.    Under U.S. Generally Accepted Accounting Principles ("GAAP"), the Company is required to review its investment portfolio periodically for the presence of other-than-temporary impairment of its securities, taking into consideration current market conditions, the extent and nature of changes in fair value, issuer rating changes and trends, volatility of earnings, current analysts’ evaluations, the Company’s ability and intent to hold investments until a recovery of amortized cost, as well as other factors. Adverse developments with respect to one or more of these factors could require the Company to deem particular securities to be other-than-temporarily impaired, with the credit related portion of the reduction in the value required to be recognized as a charge to the Company’s earnings. Market volatility can make it extremely challenging to accurately value certain securities the Company holds. Subsequent periodic valuations of securities, taking into consideration ten prevailing factors may result in changes to valuations. Significant negative changes to valuations could result in impairments in the value of the Company’s securities portfolio, which could have an adverse effect on the Company’s results of operations or financial conditions.

Impairment of goodwill and/or intangible assets could require charges to earnings, which could result in a negative impact on the Company's results of operations.    Goodwill arises when the Company acquires a business for an amount greater than the net fair value of the assets of the acquired business. The Bank has recognized goodwill as an asset on the balance sheet in connection with several acquisitions (see Note 6, “Goodwill and Other Intangible Assets” within Notes to the Consolidated Financial Statements included in Item 8 hereof). Goodwill is an intangible asset. When an intangible asset is determined to have an indefinite useful life, it is not amortized, and instead is evaluated for impairment. The Company conducts goodwill impairment tests annually, or more frequently if necessary. The Company evaluates goodwill using a qualitative or two-step impairment testing approach. A significant and sustained decline in the Company’s stock price and market capitalization, a significant decline in the Company’s expected future cash flows, a significant adverse change in the business climate, slower growth rates or other factors could result in a finding of impairment of goodwill or other intangible assets. If the Company were to conclude that a future write-down of goodwill or other intangible assets is necessary, then the Company would record the appropriate charge to earnings, which could have material adverse effect on the results of operations or financial condition.

Deterioration in the Federal Home Loan Bank (“FHLB”) of Boston’s capital might restrict the FHLB of Boston’s ability to meet the funding needs of its members, cause a suspension of its dividend, and cause its stock to be determined to be impaired.    Significant components of the Bank’s liquidity needs are met through its access to funding pursuant to its membership in the FHLB of Boston. The FHLB is a cooperative that provides services to its member banking institutions. The primary reason for joining the FHLB is to obtain funding. The purchase of stock in the FHLB is a requirement for a member to gain access to funding. Any deterioration in the FHLB’s performance or financial condition may affect the Company’s ability to access funding and/or require the Company to deem the required investment in FHLB stock to be impaired. If the Company is not able to access funding, it may not be able to meet its liquidity needs, which could have an adverse effect on the results of operations or financial condition. Similarly, if the Company deems all or part of its investment in FHLB stock impaired, such action could have a material adverse effect on the results of operations or financial condition.

Reductions in the value of the Company’s deferred tax assets could adversely affect the Company's results of operations.    A deferred tax asset is created by the tax effect of the differences between an asset’s book value and its tax basis. The Company assesses the deferred tax assets periodically to determine the likelihood of the Company’s ability to realize the benefits. These assessments consider the performance of the associated business and its ability to generate future taxable income. If the information available to the Company at the time of assessment indicates there is a greater than 50% chance that the Company will not realize the deferred tax asset benefit, the Company is required to establish a valuation allowance for the deferred tax asset and reduce its future deferred tax assets to the amount the Company believes could be realized. Recording such a valuation allowance could have a material adverse effect on the results of operations or financial condition. Additionally the deferred tax assets are determined using effective tax rates expected to apply to the Company's taxable income in the years in which the temporary differences are expected to be recovered or settled. Accordingly, a change in statutory tax rates may result in a decrease/increase to the Company’s deferred tax assets. A decrease in our deferred tax assets could have a material adverse effect on our results of operations or financial condition.

Evolving information technologies, the need to mitigate against and react to cyber-security risks and electronic fraud risks require significant resources and notwithstanding our investment in resources, we remain subject to cyber security risks and electronic fraud.    The Company needs to invest in information technology to keep pace with technology changes, and while the Company invest amounts it believes will be adequate, it may fail to invest adequate amounts such that the efficiency of information technology systems fail to meet operation needs. The risk of electronic fraudulent activity within the financial services industry, especially in the commercial banking sector due to cyber attacks (crime committed through or involving the internet (phishing, hacking, denial of service attacks, stealing information, unauthorized intrusions into internal systems or the systems of the Company's third party vendors) could adversely impact the Company’s operations or damage its reputation. The Company's information technology infrastructure and systems may be vulnerable to cyber terrorism, computer viruses, system failures and other intentional or unintentional interference, fraud and other unauthorized attempts to access or interfere with the systems. A breach of these security controls and the occurrence of one or more of these incidents could have a material adverse

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effect on the Company's reputation, business, financial condition or results of operations. Further any such occurrences could result in regulatory actions (including fines), litigation, unexpected costs and expenses, third-party damages or other loss or liabilities, any of which could have a material adverse effect on the results of operations or financial condition.

The Company’s business depends on maintaining the trust and confidence of customers and other market participants, and the Company's reputation is critical to its business.    The Company’s ability to originate and maintain accounts and business is highly dependent upon the perceptions of consumer and commercial borrowers and deposit holders and other external perceptions of the Company’s business practices and financial health. The Company’s reputation is vulnerable to threats that can be difficult or impossible to control, and costly or impossible to remediate. Regulatory inquiries, actual or alleged incidents of employee misconduct and rumors, among other things, can substantially damage the Company’s reputation, even if the inquiries, allegations, or rumors are baseless or satisfactorily addressed. Adverse perceptions regarding the Company’s reputation in the consumer, commercial and funding markets could result in difficulties in generating and maintaining accounts and business as well as in financing accounts and the Company's business. Further, adverse perceptions can result in decreases in the levels of deposits that consumer and commercial customers and potential customers choose to maintain with the Company, any of which could have a material adverse effect on the Company’s results of operations or financial condition.

If the Company’s risk management framework does not effectively identify or mitigate the Company’s risks, the Company could suffer unexpected losses and the results of operations and financial condition could be materially adversely affected.    The Company’s risk management framework seeks to mitigate risk and appropriately balance risk and return. The Company has established processes and procedures intended to identify, measure, monitor and report the types of risk to which it's subject, including credit risk, operations risk, compliance risk, reputation risk, strategic risk, market risk and liquidity risk. The Company seeks to monitor and control its risk exposure through a framework of policies, procedures and reporting requirements. Management of the Company’s risks in some cases depends upon the use of analytical and/or forecasting models, which in turn rely on assumptions and estimates. If the models used to mitigate these risks are inadequate, or the assumption or estimates are inaccurate or otherwise flawed, the Company may fail to adequately protect against risks and may incur losses. In addition, there may be risks that exist, or that develop in the future, that the Company has not appropriately anticipated, identified or mitigated. If the Company’s risk management framework does not effectively anticipate, identify and mitigate its risks, the Company could suffer unexpected losses and the results of operations or financial condition could be materially adversely affected.

Some of the Company's accounting policies require the use of estimates and assumptions that affect the value of its assets and liabilities and the results of operations and if actual events differ from the Company's estimates and assumptions the results of operations and financial condition could be materially adversely affected. Some of these accounting policies require the use of estimates and assumptions that may affect the value of the Company’s assets and liabilities and results of operations. The Company identified the accounting policies regarding the allowance for loan losses, security valuations and impairments, goodwill and other intangible assets, and income taxes to be critical because these policies require management to make difficult, subjective and complex judgments, estimates and assumptions about matters that are inherently uncertain. Under each of these policies, it is possible that materially different values and results of operations would be reported under different conditions, different judgments, or different estimates or assumptions. Further, as new information becomes available, the Company may make a determination to refine or change its judgments, estimates and assumptions, any of which could materially adversely affect the value of the assets and liabilities or the results of operations.

From time to time, the FASB and the SEC change applicable guidance governing the form and content of the Company’s financial statements. In addition, accounting standard setters and those who interpret U.S. GAAP, such as the FASB, SEC, and banking regulators, may change or even reverse their previous interpretations or positions on how these standards should be applied. Such changes are expected to continue, and may accelerate dependent upon the FASB and International Accounting Standards Board commitments to achieving convergence between U.S. GAAP and International Financial Reporting Standards. Changes in U.S. GAAP and changes in current interpretations are beyond the Company’s control, can be hard to predict and could materially impact how the Company reports its financial results and condition. In certain cases, the Company could be required to apply new or revised guidance retroactively or apply existing guidance differently (also retroactively) which may result in the Company restating prior period financial statements for material amounts. Additionally, significant changes to U.S. GAAP may require costly technology changes, additional training and personnel, and other expenses could materially adversely affect the Company’s results of operations.

The Company may be unable to adequately manage its liquidity risk, which could affect its ability to meet its obligations as they become due, capitalize on growth opportunities, or pay dividends on its common stock. Liquidity risk refers to managing the Company's liquidity so that it can meet its obligations as the obligations become due, opportunistically capitalize on potential growth opportunities as they arise, or pay dividends on its common stock. The Company's liquidity arises from its ability to liquidate assets or obtain adequate funding in a timely basis, at a reasonable cost and within acceptable risk tolerances. Liquidity is also required to fund various obligations, including credit commitments to borrowers, mortgage and other loan originations, withdrawals by depositors, repayment of borrowings, dividends to shareholders, operating expenses and capital

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expenditures. The Company's liquidity is derived primarily from funding obtained from the FHLB of Boston, retail deposit growth and retention; principal and interest payments on loans; principal and interest payments on investment securities the Company issues; sale, maturity and prepayment of investment securities the Company holds; net cash provided from operations, and access to other funding sources.

The Company is subject to environmental liability risk associated with lending activities which could have a material adverse effect on its financial condition and results of operations. A significant portion of the Company’s loan portfolio is secured by real property. During the ordinary course of business, the Company may foreclose on and take title to properties securing certain loans. In doing so, there is a risk that hazardous or toxic substances could be found on these properties. If hazardous or toxic substances are found, the Company may be liable for remediation costs, as well as for personal injury and property damage. Environmental laws may require the Company to incur substantial expenses and may materially reduce the affected property’s value or limit the Company’s ability to use or sell the affected property. In addition, future laws or more stringent interpretations or enforcement policies with respect to existing laws may increase the Company’s exposure to environmental liability. Although the Company has policies and procedures regarding performance of an environmental review prior to originating certain commercial real estate loans, as well as before initiating any foreclosure action on real property, these reviews may not detect all potential environmental hazards. The remediation costs and any other financial liabilities associated with an environmental hazard could have a material adverse effect on the Company’s financial condition or results of operations.

Changes in the Fixed-Income and Equity markets or economic downturns could affect the level of assets under management and the demand for other fee-based services. Economic downturns could affect the volume of income earned from and demand for fee-based services. Revenues from the investment management business depend in large part on the level of assets under management and administration. Market volatility that results in customers liquidating investments as well as lower asset values can reduce the level of assets under management and administration and decrease the Company's investment management and administration revenues which could materially adversely affect our results of operations.

The Company relies on its systems, employees and certain service providers, and if the Company experiences a system failure or if the Company's security measures are compromised or inadequate, the operations could be disrupted or the customer data could be improperly divulged. The Company faces the risk that the design of its controls and procedures, including those designed to mitigate the risk of fraud by employees or outside third parties, may be inadequate or be circumvented, thereby causing delays or failures in detection of errors or inaccuracies in data and information. The Company regularly reviews and updates the Company's internal controls, disclosure controls and procedures, and corporate governance policies and procedures. Any system of controls, however well designed and operated, is based in part on certain assumptions and can provide only reasonable, not absolute, assurances that the objectives of the system are met. Any failure or circumvention of the Company's controls and procedures or failure to comply with regulations related to controls and procedures could have a material adverse effect on the Company's business, results of operations and financial condition. The Company may also be subject to disruptions of the systems arising or originating from third party services providers or from events that are wholly or partially beyond the Company's control (including, for example, electrical, internet or telecommunications outages), which may adversely impact our ability to provide service to customers and results in loss, cost and expense or liability. Additionally, the Company's risk exposure to security matters may increase in the future if the Company increases in size and prominence in the financial services industry, as the Company expands internet based and mobile banking tools and products and services, and as a consequence of the risk inherent in system and customer account conversions associated with the integration of acquisition targets. The Company is further exposed to the risk that external service providers may be unable to fulfill their contractual obligations on matters of internet security and adequacy of services. (The Company's third party service providers are subject to many if not all of the same risks, including internet vulnerability and fraud operational errors by their respective employees.) While the Company conducts due diligence on service providers and engage in other vendor management risk migration activities designed to mitigate service provider risk, no set of risk management protocols can provide full protection against all risks and the Company's (or service providers) business continuity plans, risk management processes and procedures or security systems (including security against cybercrime) could be inadequate. While the Company maintains a control framework designed to monitor service provider risks, the failure of a service provider to perform in accordance with the contracted arrangements and, if applicable, under service level agreements could be disruptive to the Company's operations, which could have a material adverse impact on the Company's financial condition or results of operations.

The Company's ability to make opportunistic acquisitions is contingent on regulators granting any requisite approvals. Part of the Company's business strategy includes seeking to may make opportunistic whole or partial acquisitions of other banks, branches, financial institutions, or related businesses from time to time. Any possible acquisition may be subject to regulatory approval, and there can be no assurance that the Company will be able to obtain any such approval in a timely manner or at all.

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The Company’s effective income tax rate would be adversely affected if the Company's community development entity subsidiaries do not receive additional New Markets Tax Credit awards. As indicated in Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations", the Company’s effective tax rate is determined by a number of factors, including the recognition of federal tax credits in connection with New Markets Tax Credit awards. In 2016, the Company recognized $6.4 million in federal tax credits through New Markets Tax Credit award deployment. Federal government agencies periodically determine New Markets Tax Credit award recipients through a nationwide application process that is highly competitive. While the Company’s community development entity subsidiaries have received four prior New Markets Tax Credit awards, it may not be successful in any current or future New Markets Tax Credit applications. The Company applied for but did not receive a New Markets Tax Credit award in 2017. Further, the New Markets Tax Credit Program is subject to periodic renewal by congress and it is possible the current Congress may act to reduce or eliminate the program altogether. If the Company does not obtain additional awards the Company's effective tax rate will increase substantially in the future, adversely affecting net income, as existing federal tax credits run off.

The Company may experience losses and expenses if security interests granted for loans are not enforceable. When the Bank makes loans it is sometimes obtains liens such as real estate mortgages or other asset pledges to provide the Bank with a security interest in collateral. If there is a loan default the Bank may seek to foreclose upon collateral and enforce the security interests that were granted to obtain repayment and eliminate or mitigate the Company's loss. Drafting errors, recording errors, other defects or imperfections in the security interests granted to the Bank, and/or changes in law may render liens granted to the Bank unenforceable. The Company may incur losses or expenses if security interests granted to the Bank are not enforceable.

ITEM 1B.    UNRESOLVED STAFF COMMENTS

None

ITEM 2.    PROPERTIES

At December 31, 2016, the Bank conducted its business from its main office located at 288 Union Street, Rockland, Massachusetts and seventy-nine banking offices and three limited service branches located within Barnstable, Bristol, Middlesex, Norfolk, Plymouth, Suffolk and Worcester counties in Eastern Massachusetts. In addition to its main office, the Bank leased fifty-four of its branches (including three limited service branches) and owned the remaining twenty-eight branches. Also, the Bank had twelve remote ATM locations, eleven of which were leased and one was owned.

The Bank’s executive administration offices are located in Hanover, Massachusetts while the remaining administrative and operations locations are housed in several different campuses. Additionally, there are a number of sales offices not associated with a branch location throughout the Bank’s footprint.

For additional information regarding the Bank’s premises and equipment and lease obligations, see Notes 5, “Bank Premises and Equipment” and 18, “Commitments and Contingencies,” respectively, within Notes to Consolidated Financial Statements included in Item 8 hereof.

ITEM 3.    LEGAL PROCEEDINGS

At December 31, 2016, Rockland Trust was involved in pending lawsuits that arose in the ordinary course of business. Management has reviewed these pending lawsuits with legal counsel and has taken into consideration the view of counsel as to their outcome. In the opinion of management, the final disposition of pending lawsuits is not expected to have a material adverse effect on the Company’s financial position or results of operations.

ITEM 4.    MINE SAFETY DISCLOSURES

Not applicable

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PART II

ITEM 5. MARKET FOR INDEPENDENT BANK CORP.'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

(a.) Independent Bank Corp.’s common stock trades on the NASDAQ Global Select Market under the symbol INDB. The Company declared cash dividends of $1.16 and $1.04 per share in 2016 and in 2015, respectively. The ratio of dividends paid to earnings in 2016 and 2015 was 38.76% and 40.29%, respectively.

Payment of dividends by the Company on its common stock is subject to various regulatory restrictions and guidelines. Since substantially all of the funds available for the payment of dividends are derived from the Bank, future dividends will depend on the earnings of the Bank, its financial condition, its need for funds, applicable governmental policies and regulations, and other such matters as the Board of Directors deem appropriate. Management believes that the Bank will continue to generate adequate earnings to continue to pay common dividends on a quarterly basis.

The following schedule summarizes the closing price range of common stock and the cash dividends paid for the fiscal years 2016 and 2015:

	2016
	High		Low		Dividend
4th Quarter	$	70.95	$	52.21	$	0.29
3rd Quarter	54.09		44.26		0.29
2nd Quarter	49.81		42.60		0.29
1st Quarter	47.66		41.35		0.29
	2015
	High		Low		Dividend
4th Quarter	$	52.17	$	44.19	$	0.26
3rd Quarter	49.90		43.05		0.26
2nd Quarter	48.94		41.03		0.26
1st Quarter	44.79		37.83		0.26

As of December 31, 2016, there were 27,005,813 shares of common stock outstanding which were held by approximately 2,702 holders of record. The number of record-holders may not reflect the number of persons or entities holding stock in nominee name through banks, brokerage firms, and other nominees. The closing price of the Company’s stock on December 31, 2016 was $70.45.

The information required by S-K Item 201(d) is incorporated by reference from Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters hereof.

Comparative Stock Performance Graph

The stock performance graph below and associated table compare the cumulative total shareholder return of the Company’s common stock from December 31, 2011 to December 31, 2016 to the cumulative total return of the NASDAQ Composite Index (U.S. Companies) and the SNL Bank NASDAQ Index. The lines in the graph and the numbers in the table below represent yearly index levels derived from compounded daily returns that include reinvestment or retention of all dividends. If the yearly interval, based on the last day of a fiscal year, was not a trading day, the preceding trading day was used. The index value for all of the series was set to 100.00 on December 31, 2011 (which assumes that $100.00 was invested in each of the series on December 31, 2011).

The following information in this Item 5 of this Annual Report on Form 10-K is not deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C under the Securities Exchange Act of 1934 or to the liabilities of Section 18 of the Securities Exchange Act of 1934, and will not be deemed incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent the Company specifically incorporates it by reference into such a filing. The stock price performance shown on the stock performance graph and associated table below is not necessarily indicative of future price performance. Information used in the graph and table was obtained from a third party provider, a source believed to be reliable, but the Company is not responsible for any errors or omissions in such information.

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The following chart depicts the total return performance of the Company:

Source: SNL Financial LC, Charlottesville, VA

(b.) Not applicable

(c.) The following table sets forth information regarding the Company’s repurchases of its common stock during the three months ended December 31, 2016:

	Issuer Purchases of Equity Securities
Period	Total Number of Shares Purchased(1)	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plan or Program(2)	Maximum Number of Shares That May Yet Be Purchased Under the Plan or Program
October 1 to October 31, 2016	120	$	53.18	—	—
November 1 to November 30, 2016	2,332	65.03		—	—
December 1 to December 31, 2016	120	69.83		—	—
Total	2,572			—	—

(1) Shares repurchased relate to the surrendering of mature shares for the exercise and/or vesting of stock compensation grants.

(2) The Company does not currently have a stock repurchase program or plan in place.

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ITEM 6.    SELECTED FINANCIAL DATA

The selected consolidated financial and other data of the Company set forth below does not purport to be complete and should be read in conjunction with, and is qualified in its entirety by, the more detailed information, including the Consolidated Financial Statements and related notes, appearing elsewhere herein.

	Years Ended December 31
	2016			2015			2014			2013			2012
	(Dollars in thousands, except per share data)
Financial condition data
Securities available for sale	$	363,644		$	367,249		$	348,554		$	356,862		$	329,286
Securities held to maturity	487,076			477,507			375,453			350,652			178,318
Loans	5,999,605			5,547,721			4,970,733			4,718,307			4,519,011
Allowance for loan losses	(61,566		)	(55,825		)	(55,100		)	(53,239		)	(51,834		)
Goodwill and other intangibles	231,374			212,909			180,306			182,642			162,144
Total assets	7,709,375			7,209,469			6,364,318			6,098,869			5,756,544
Deposits	6,412,253			5,990,703			5,210,466			4,986,418			4,546,677
Borrowings	335,474			343,933			406,061			448,123			590,614
Stockholders’ equity	864,690			771,463			640,527			591,540			529,320
Nonperforming loans	57,407			27,690			27,512			34,659			28,766
Nonperforming assets	61,580			29,849			38,894			43,833			42,427
Operating data
Interest income	$	246,637		$	235,545		$	216,459		$	205,914		$	196,192
Interest expense	18,793			20,617			20,417			23,336			23,393
Net interest income	227,844			214,928			196,042			182,578			172,799
Provision for loan losses	6,075			1,500			10,403			10,200			18,056
Noninterest income	82,428			75,888			69,943			68,009			62,016
Noninterest expenses	192,122			197,138			171,838			173,649			159,459
Net income	76,648			64,960			59,845			50,254			42,627
Per share data
Net income — basic	$	2.90		$	2.51		2.50			2.18			1.96
Net income — diluted	2.90			2.50			2.49			2.18			1.95
Cash dividends declared	1.16			1.04			0.96			0.88			0.84
Book value	32.02			29.40			26.69			24.85			23.24
Tangible book value (1)	23.45			21.29			19.18			17.18			16.12
Performance ratios
Return on average assets	1.04		%	0.93		%	0.95		%	0.87		%	0.83		%
Return on average common equity	9.43		%	8.79		%	9.66		%	9.09		%	8.66		%
Net interest margin (on a fully tax equivalent basis)	3.40		%	3.42		%	3.45		%	3.51		%	3.75		%
Equity to assets	11.22		%	10.70		%	10.06		%	9.70		%	9.19		%
Dividend payout ratio	38.76		%	40.29		%	37.50		%	30.09		%	52.77		%
Asset quality ratios
Nonperforming loans as a percent of gross loans	0.96		%	0.50		%	0.55		%	0.73		%	0.64		%
Nonperforming assets as a percent of total assets	0.80		%	0.41		%	0.61		%	0.72		%	0.74		%
Allowance for loan losses as a percent of total loans	1.03		%	1.01		%	1.11		%	1.13		%	1.15		%
Allowance for loan losses as a percent of nonperforming loans	107.24		%	201.61		%	200.28		%	153.61		%	180.19		%
Capital ratios
Tier 1 leverage capital ratio	9.77		%	9.33		%	8.84		%	8.64		%	8.65		%
Common equity tier 1 capital ratio	10.82		%	10.44		%	n/a			n/a			n/a
Tier 1 risk-based capital ratio	11.99		%	11.71		%	10.88		%	10.88		%	10.36		%
Total risk-based capital ratio	13.60		%	13.36		%	13.15		%	12.58		%	12.23		%

(1) Represents a non-GAAP measurement. For reconciliation to GAAP book value per share, see Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations - Executive Level Overview - Non-GAAP Measures".

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ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Company is a state chartered, federally registered bank holding company, incorporated in 1985. The Company is the sole stockholder of Rockland Trust, a Massachusetts trust company chartered in 1907. For a full list of corporate entities see Item 1 “Business — General."

All material intercompany balances and transactions have been eliminated in consolidation. When necessary, certain amounts in prior year financial statements have been reclassified to conform to the current year’s presentation. The following should be read in conjunction with the Consolidated Financial Statements and related notes.

Executive Level Overview

Management evaluates the Company's operating results and financial condition using measures that include net income, earnings per share, return on assets and equity, return on tangible common equity, net interest margin, tangible book value per share, asset quality indicators, and many others. These metrics help management make key decisions regarding the Company's balance sheet, liquidity, interest rate sensitivity, and capital resources and assist with identifying areas to improve. The Company is focused on organic growth, but will consider acquisition opportunities that provide a satisfactory financial return. During the fourth quarter of 2016 the Company completed the acquisition of New England Bancorp, Inc. ("NEB"). The Company also recently announced the acquisition of Island Bancorp Inc. ("Island Bancorp"), which is expected to close in the second quarter of 2017. The closing of the Island Bancorp acquisition is subject to certain conditions including approval of the transaction by Island Bancorp shareholders, receipt of required regulatory approvals, and other standard conditions.

Loans and Asset Quality

Management’s balance sheet strategy emphasizes commercial and home equity lending. The results depicted in the following table reflect an overall increase in total loans over the past five years due to the results of that strategy, as well as the impact from acquisitions. Organic growth in 2016 was driven primarily by increases in the commercial real estate and home equity categories.

Management strives to be disciplined about loan pricing and generates loan assets with interest rate sensitivity in mind. The Company has gradually and intentionally shifted its balance sheet composition so that its interest-rate risk position is fundamentally asset-sensitive.

Management takes a disciplined approach to credit underwriting, seeking to avoid undue credit risk and loan losses.

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Funding and the Net Interest Margin

The Company's overall sources of funding reflect strong business and retail deposit growth, supporting management's emphasis on core deposit growth to fund loans, as depicted by the following chart:

Core deposits increased by 8.62% during 2016, partially due to the NEB acquisition, and represented 89.9% of total deposits at year end. Despite the addition of the higher cost NEB deposits, the total cost of deposits was 0.18% for 2016, representing a two basis point decrease from the prior year.

The Company's net interest margin was 3.40% for the year ended December 31, 2016, reflecting a prolonged low rate environment and relatively higher average liquid balances. The Company has countered net interest margin pressure with consistent loan growth which, when combined with asset and liability pricing discipline, has led to net interest income growth.

Noninterest Income

Management continues to focus on noninterest income growth. Noninterest income is primarily comprised of deposit account fees, interchange and ATM fees, investment management fees and mortgage banking income. The following chart shows the components of noninterest income and the growth that the Company has experienced over the past five years:

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Expense Control

Management takes a balanced approach to noninterest expense control by monitoring the management of ongoing operating expenses while making needed capital expenditures and prudently investing in growth initiatives. The Company’s primary expenses arise from Rockland Trust’s employee salaries and benefits and expenses associated with buildings and equipment. The following chart depicts the Company's efficiency ratio on a GAAP basis (calculated by dividing noninterest expense by the sum of noninterest income and net interest income), as well as its efficiency ratio on an operating basis (calculated by dividing noninterest expense, excluding certain noncore items, by the sum of noninterest income, excluding certain noncore items, and net interest income) over the past five years:

*See "Non-GAAP Measures" below for a reconciliation to GAAP financial measures.

Tax Effectiveness

The Company participates in federal and state tax credit programs designed to promote economic development, affordable housing, and job creation. The Company continues to participate in the federal New Markets Tax Credit program and has also made low-income housing tax credit investments. The Company has also established security corporation subsidiaries and, through its subsidiaries, purchased tax-exempt bonds. Federal and state tax credit program participation and other tax strategies permit the Company to operate in a tax effective manner and sometimes also creates a competitive advantage for Rockland Trust and its community development subsidiaries. During 2016, the Company’s effective tax rate was 31.61%.

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Capital

The Company's disciplined approach with respect to revenue, expense, and tax effectiveness is designed to promote long-term earnings growth. Strong earnings growth has resulted in healthy capital growth. Book value per share increased 8.9% in 2016 and has increased 37.8% over the past four years. In addition, tangible book value per share increased 10.1% in 2016 compared to the prior year and has increased 45.5% over the past four years. Stockholders' equity as a percentage of total assets was 11.22% at December 31, 2016 , compared to 10.70% in the prior year. Tangible common equity as a percentage of tangible assets increased to 8.47% at December 31, 2016, as compared to 7.98% in the prior year (see "Non-GAAP Measures" below for a reconciliation to GAAP financial measures). The following chart shows the Company's book value and tangible book value per share over the past five years:

*See "Non-GAAP Measures" below for a reconciliation to GAAP financial measures.

This strong growth in capital has led to a consistent cash dividend which increased from $1.04 per share in 2015 to $1.16 per share in 2016, an 11.5% increase.

2016 Results

Net income for 2016 computed in accordance with GAAP was $76.6 million, or $2.90 on a diluted earnings per share basis, as compared to $65.0 million, or $2.50 per diluted share, for the prior year. Net income for 2016 and 2015 included items that are considered noncore, which are excluded for purposes of assessing operating earnings. Net operating earnings for 2016 were $80.4 million, or $3.04 on a diluted earnings per share basis, an increase of 12.1% and 10.1%, respectively, when compared to net operating earnings of $71.7 million, or $2.76 per diluted share, for the year ending December 31, 2015. See "Non-GAAP Measures" below for a reconciliation of net operating earnings and diluted earnings per share to GAAP net income and earnings per share, respectively.

Non-GAAP Measures

When management assesses the Company’s financial performance for purposes of making day-to-day and strategic decisions, it does so based upon the performance of its core banking business, which is primarily derived from the combination of net interest income and noninterest or fee income, reduced by operating expenses, the provision for loan losses, and the impact of income taxes and other noncore items shown in the table that follows. The Company’s financial reporting is determined in accordance with GAAP which sometimes includes items that management believes are unrelated to its core banking business such as gains or losses on the sales of securities, merger and acquisition expenses, loss on extinguishment of debt, impairment and other items. Management, therefore, computes the Company’s non-GAAP operating earnings and operating EPS, noninterest income on an operating basis and the efficiency ratio on an operating basis, which exclude items deemed by management to be noncore, to measure the strength of the Company’s core banking business and to identify trends that may to some extent be obscured by such items.

Management also supplements its evaluation of financial performance with analysis of tangible book value per share (which is computed by dividing stockholders' equity less goodwill and identifiable intangible assets, or "tangible common equity", by common shares outstanding) and with the tangible common equity ratio (which is computed by dividing tangible common

32

equity by tangible assets). The Company has included information on these tangible ratios because management believes that investors may find it useful to have access to the same analytical tools used by management.  As a result of merger and acquisition activity, the Company has recognized goodwill and other intangible assets in conjunction with business combination accounting principles.  Excluding the impact of goodwill and other intangibles in measuring asset and capital values for the ratios provided, along with other bank standard capital ratios, provides a framework to compare the capital adequacy of the Company to other companies in the financial services industry.

These non-GAAP measures should not be viewed as a substitute for financial results determined in accordance with GAAP. An item which management deems to be noncore and excludes when computing these non-GAAP measures can be of substantial importance to the Company’s results for any particular period. The Company’s non-GAAP performance measures are not necessarily comparable to non-GAAP performance measures which may be presented by other companies.

The following table summarizes the impact of noncore items recorded for the time periods indicated below and reconciles them in accordance with GAAP:

	Net Income						Diluted Earnings Per Share
	2016			2015			2016			2015
	(Dollars in thousands, except per share data)
Net income available to common shareholders (GAAP)	$	76,648		$	64,960		$	2.90		$	2.50
Non-GAAP adjustments
Noninterest income components
Gain on sale of fixed income securities	—			(798		)	—			(0.03		)
Noninterest expense components
Impairment on acquired facilities	—			109			—			—
Loss on extinguishment of debt	437			122			0.02			—
Loss on sale of fixed income securities	—			1,124			—			0.04
Merger and acquisition expenses	5,455			10,501			0.20			0.41
Total impact of noncore items	5,892			11,058			0.22			0.42
Net tax benefit associated with noncore items (1)	$	(2,163	)	$	(4,285	)	$	(0.08	)	$	(0.16	)
Net operating earnings (Non-GAAP)	$	80,377		$	71,733		$	3.04		$	2.76

(1) The net tax benefit associated with noncore items is determined by assessing whether each noncore item is included or excluded from net taxable income and applying the Company's combined marginal tax rate only to those items included in net taxable income.

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The following table summarizes the impact of noncore items with respect to the Company's total revenue, noninterest income as a percentage of total revenue, and the efficiency ratio for the periods indicated:

	Years Ended December 31
	2016			2015			2014			2013			2012
	(Dollars in thousands)
Net interest income	$	227,844		$	214,928		$	196,042		$	182,578		$	172,799		(a)
Noninterest income (GAAP)	$	82,428		$	75,888		$	69,943		$	68,009		$	62,016		(b)
Less:
Gain on extinguishment of debt	—			—			—			763			—
Gain on life insurance benefits	—			—			1,964			227			1,307
Gain on sale of fixed income securities	—			798			121			258			5
Noninterest income on an operating basis (non-GAAP)	$	82,428		$	75,090		$	67,858		$	66,761		$	60,704		(c)
Noninterest expense (GAAP)	$	192,122		$	197,138		$	171,838		$	173,649		$	159,459		(d)
Less:
Goodwill impairment	—			—			—			—			2,227
Impairment on acquired facilities	—			109			524			—			—
Loss on extinguishment of debt	437			122			—			—			7
Loss on sale of fixed income securities	—			1,124			21			—			—
Loss on termination of derivatives	—			—			1,122			—			—
Merger & acquisition expenses	5,455			10,501			1,339			8,685			6,741
Severance	—			—			—			325			—
Noninterest expense on an operating basis (non-GAAP)	$	186,230		$	185,282		$	168,832		$	164,639		$	150,484		(e)
Total revenue (GAAP)	$	310,272		$	290,816		$	265,985		$	250,587		$	234,815		(a+b)
Total operating revenue (non-GAAP)	$	310,272		$	290,018		$	263,900		$	249,339		$	233,503		(a+c)
Ratios
Noninterest income as a % of revenue	26.57		%	26.09		%	26.30		%	27.14		%	26.41		%	(b/(a+b))
Noninterest income as a % of revenue on an operating basis	26.57		%	25.89		%	25.71		%	26.78		%	26.00		%	(c/(a+c))
Efficiency ratio (GAAP)	61.92		%	67.79		%	64.60		%	69.30		%	67.91		%	(d/(a+b))
Efficiency ratio on an operating basis (non-GAAP)	60.02		%	63.89		%	63.98		%	66.03		%	64.45		%	(e/(a+c))

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The following table summarizes the calculation of the Company's tangible common equity ratio and tangible book value per share for the periods indicated:

	Years Ended December 31
	2016			2015			2014			2013			2012
	(Dollars in thousands, except per share data)
Tangible common equity
Stockholders’ equity	$	864,690		$	771,463		$	640,527		$	591,540		$	529,320		(a)
Less: Goodwill and other intangibles	$	231,374		$	212,909		$	180,306		$	182,642		$	162,144
Tangible common equity (Non-GAAP)	633,316			558,554			460,221			408,898			367,176			(b)
Tangible assets
Assets (GAAP)	7,709,375			7,209,469			6,364,318			6,098,869			5,756,544			(c)
Less: Goodwill and other intangibles	231,374			212,909			180,306			182,642			162,144
Tangible assets (Non-GAAP)	7,478,001			6,996,560			6,184,012			5,916,227			5,594,400			(d)
Common shares	27,005,813			26,236,352			23,998,738			23,805,984			22,774,009			(e)
Common equity to assets ratio (GAAP)	11.22		%	10.70		%	10.06		%	9.70		%	9.20		%	(a/c)
Tangible common equity to tangible assets ratio (Non-GAAP)	8.47		%	7.98		%	7.44		%	6.91		%	6.56		%	(b/d)
Book value per share (GAAP)	$	32.02		$	29.40		$	26.69		$	24.85		$	23.24		(a/e)
Tangible book value per share	$	23.45		$	21.29		$	19.18		$	17.18		$	16.12		(b/e)

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Financial Position

Securities Portfolio    The Company’s securities portfolio consists of trading securities, securities available for sale and securities which management intends to hold until maturity. Securities increased by $6.4 million, or 0.8%, at December 31, 2016 as compared to December 31, 2015. The small increase was attributable to periodic purchases throughout the year partially offset by paydowns. The ratio of securities to total assets as of December 31, 2016 was 11.0%, compared to 11.7% at December 31, 2015.

The Company continually reviews investment securities for the presence of other-than-temporary impairment (“OTTI”). For debt securities, the primary consideration in determining whether impairment is OTTI is whether or not the Bank expects to collect all contractual cash flows. Further analysis of the Company’s OTTI can be found in Note 3, “Securities” within Notes to Consolidated Financial Statements included in Item 8 hereof.

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The following table sets forth the fair value of available for sale securities and the amortized cost of held to maturity securities along with the percentage distribution:

Table 1 — Securities Portfolio Composition

	December 31
	2016				2015				2014
	Amount		Percent		Amount		Percent		Amount		Percent
	(Dollars in thousands)
Fair value of securities available for sale
U.S. government agency securities	$	24,244	6.7	%	$	30,215	8.2	%	$	41,486	11.9	%
Agency mortgage-backed securities	175,384		48.2	%	210,937		57.4	%	217,678		62.5	%
Agency collateralized mortgage obligations	99,868		27.5	%	63,584		17.3	%	63,035		18.1	%
State, county and municipal securities	3,793		1.0	%	4,659		1.3	%	5,223		1.5	%
Single issuer trust preferred securities issued by banks	2,311		0.6	%	2,792		0.8	%	2,909		0.8	%
Pooled trust preferred securities issued by banks and insurers	1,584		0.4	%	1,572		0.4	%	6,321		1.8	%
Small business administration pooled securities	37,189		10.2	%	40,449		11.0	%	—		—	%
Equity securities	19,271		5.4	%	13,041		3.6	%	11,902		3.4	%
Total fair value of securities available for sale	363,644		100.0	%	367,249		100.0	%	348,554		100.0	%
Amortized Cost of Securities Held to Maturity
U.S. treasury securities	1,007		0.2	%	1,009		0.2	%	1,010		0.3	%
Agency mortgage-backed securities	156,088		32.0	%	167,134		35.0	%	159,522		42.5	%
Agency collateralized mortgage obligations	297,445		61.1	%	267,348		56.0	%	198,220		52.8	%
State, county and municipal securities	—		—	%	225		—	%	424		0.1	%
Single issuer trust preferred securities issued by banks	1,500		0.3	%	1,500		0.3	%	1,500		0.4	%
Small business administration pooled securities	31,036		6.4	%	35,291		7.4	%	9,775		2.6	%
Corporate debt securities	—		—	%	5,000		1.1	%	5,002		1.3	%
Total amortized cost of securities held to maturity	487,076		100.0	%	477,507		100.0	%	375,453		100.0	%
Total	$	850,720			$	844,756			$	724,007

The Company’s available for sale securities are carried at fair value and are categorized within the fair value hierarchy based on the observability of model inputs. Securities which require inputs that are both significant to the fair value measurement and unobservable are classified as level 3 within the fair value hierarchy. As of December 31, 2016, 2015, and 2014, the Company had $1.6 million, $1.6 million, and $6.3 million, respectively, of securities categorized as level 3 within the fair value hierarchy.

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The following tables set forth contractual maturities of the Bank’s securities portfolio at December 31, 2016. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Weighted average yields in the table below have been calculated based on the amortized cost of the security.

Table 2 — Securities Portfolio, Amounts Maturing

	Within One Year				One Year to Five Years				Five Years to Ten Years				Over Ten Years				Total
	Amount		Weighted Average Yield		Amount		Weighted Average Yield		Amount		Weighted Average Yield		Amount		Weighted Average Yield		Amount		Weighted Average Yield
	(Dollars in thousands)
Fair value of securities available for sale
U.S. government agency securities	$	1,001	1.1	%	$	13,079	1.8	%	$	10,164	2.4	%	$	—	—		$	24,244	2.0	%
Agency mortgage-backed securities	—		—		14,710		3.1	%	84,987		2.5	%	75,687		3.2	%	175,384		2.8	%
Agency collateralized mortgage obligations	—		—		107		4.0	%	—		—	%	99,761		2.1	%	99,868		2.1	%
State, county and municipal securities	—		—		1,523		2.6	%	2,270		2.9	%	—		—	%	3,793		2.8	%
Single issuer trust preferred securities issued by banks	—		—		—		—		—		—		2,311		5.4	%	2,311		5.4	%
Pooled trust preferred securities issued by banks and insurers	—		—		—		—		—		—		1,584		1.4	%	1,584		1.4	%
Small business administration pooled securities	—		—		—		—		—		—		37,189		2.6	%	37,189		2.6	%
Equity securities(1)	—		—		—		—		—		—		19,271		—		19,271		—
Total fair value of securities available for sale	1,001		1.1	%	29,419		2.5	%	97,421		2.5	%	235,803		2.6	%	363,644		2.5	%
Amortized cost of securities held to maturity
U.S. Treasury securities	—		—		1,007		3.0	%	—		—	%	—		—		1,007		3.0	%
Agency mortgage-backed securities	1		5.5	%	15,000		2.6	%	19,835		2.9	%	121,252		2.7	%	156,088		2.7	%
Agency collateralized mortgage obligations	—		—		—		—		2,829		3.0	%	294,616		2.2	%	297,445		2.2	%
Single issuer trust preferred securities issued by banks	—		—		—		—		—		—		1,500		8.3	%	1,500		8.3	%
Small business administration pooled securities	—		—		—		—		—		—		31,036		2.6	%	31,036		2.6	%
Total amortized cost of securities held to maturity	1		5.5	%	16,007		2.6	%	22,664		2.9	%	448,404		2.4	%	487,076		2.4	%
Total	$	1,002	1.1	%	$	45,426	2.5	%	$	120,085	2.6	%	$	684,207	2.5	%	$	850,720	2.5	%

(1) Equity securities have no contractual maturity and typically do not pay contractual interest or dividend income, therefore they are reported above in the over ten year maturity column with no weighted average yield.

As of December 31, 2016, the weighted average life of the securities portfolio was 5.1 years and the modified duration was 4.6 years.

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Residential Mortgage Loan Sales   The Company’s primary loan sale activity arises from the sale of government sponsored enterprise eligible residential mortgage loans. During 2016 and 2015, the Company originated residential loans with the intention of selling them in the secondary market, and to a lesser extent, to hold in the Company's residential portfolio. When a loan is sold, the Company enters into agreements that contain representations and warranties about the characteristics of the loans sold and their origination. The Company may be required to either repurchase mortgage loans or to indemnify the purchaser from losses if representations and warranties are breached. The Company has incurred minimal losses during the year ended December 31, 2016 related to repurchased loans. During 2015 the Company reached a settlement for loans that were sold to a third party in the amount of $300,000, of which the Company had previously established a reserve of $250,000 in the prior year.

The following table shows the total residential loans that were closed and whether the amounts were held in the portfolio or sold/held for sale in the secondary market during the period indicated:

Table 3 — Closed Residential Real Estate Loans

	Years Ended December 31
	2016		2015		2014
	(Dollars in thousands)
Held in portfolio	$	118,735	$	72,274	$	67,888
Sold or held for sale in the secondary market	304,402		240,943		147,648
Total closed loans	$	423,137	$	313,217	$	215,536

The table below reflects additional information related to the loans which were sold during the periods indicated:

Table 4 — Residential Mortgage Loan Sales

	December 31
	2016		2015
	(Dollars in thousands)
Sold with servicing rights released	$	304,339	$	234,858
Sold with servicing rights retained	—		5,912
Total loans sold	$	304,339	$	240,770

Currently, the Bank sells the servicing of sold loans for a servicing release premium, simultaneous with the sale of the loan. In the past, the Bank may have opted to sell loans and retain the servicing. Upon sale with servicing rights retained, a mortgage servicing asset was established, which represents the then current estimated fair value based on market prices for comparable mortgage servicing contracts, when available, or alternatively is based on a valuation model that calculates the present value of estimated future net servicing income. The valuation model incorporates assumptions that market participants would use in estimating future net servicing income, such as the cost to service, the discount rate, an inflation rate, ancillary income, prepayment speeds and default rates and losses. Servicing rights are recorded in other assets in the consolidated balance sheets, are amortized in proportion to and over the period of estimated net servicing income, and are assessed for impairment based on fair value at each reporting date. Impairment is determined by stratifying the rights based on predominant characteristics, such as interest rate, loan type and investor type. Impairment is recognized through a valuation allowance, to the extent that fair value is less than the capitalized amount. If the Company later determines that all or a portion of the impairment no longer exists, a reduction of the allowance may be recorded as an increase to income. The principal balance of loans serviced by the Bank on behalf of investors amounted to $311.3 million at December 31, 2016 and $372.4 million at December 31, 2015.

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The following table shows the adjusted cost of the servicing rights associated with these loans and the changes for the periods indicated:

Table 5 — Mortgage Servicing Asset

	2016			2015
	(Dollars in thousands)
Beginning balance	$	2,581		$	2,912
Additions	—			161
Acquired portfolio	—			83
Amortization	(527		)	(585		)
Change in valuation allowance	(6		)	10
Ending balance	$	2,048		$	2,581

Forward sale contracts of mortgage loans, considered derivative instruments for accounting purposes, may be utilized by the Company in its efforts to manage risk of loss associated with its mortgage loan commitments and mortgage loans held for sale. Prior to closing and funding certain one-to-four family residential mortgage loans, an interest rate lock commitment is generally extended to the borrower. During the period from commitment date to closing date, the Company is subject to the risk that market rates of interest may change. If market rates rise, investors generally will pay less to purchase such loans, resulting in a reduction in the gain on sale of the loans or, possibly, a loss. In an effort to mitigate such risk, forward delivery sales commitments are executed, under which the Company agrees to deliver whole mortgage loans to investors which economically hedges this market risk. See Note 11, “Derivatives and Hedging Activities” within Notes to Consolidated Financial Statements included in Item 8 hereof for more information on mortgage activity and mortgage related derivatives.

Loan Portfolio    Management continues to focus on growth in the commercial and home equity lending categories. Management believes this emphasis is prudent, given the prevailing interest rate and economic environment, as well as strategic priorities. The Company’s loan portfolio increased by $451.9 million during 2016 due partially to the acquired loan portfolio related to the NEB acquisition and continued modest growth in the commercial and home equity portfolios.

Excluding the effects of the NEB acquisition, organic growth in the commercial and industrial, commercial real estate, small business, and home equity portfolios was countered by declines in the commercial construction and residential real estate loan portfolios. The following table summarizes loan growth as of the dates indicated:

Table 6 - Components of Loan Growth/(Decline)

	December 31		December 31		NEB		Organic			Organic
	2016		2015		Acquisition		Growth/(Decline) $			Growth/(Decline) %
	(Dollars in thousands)
Commercial and industrial	$	902,053	$	843,276	$	35,767	$	23,010		2.7	%
Commercial real estate	3,010,798		2,653,434		148,016		209,348			7.9	%
Commercial construction	320,391		373,368		4,633		(57,610		)	(15.4	)%
Small business	122,726		96,246		53		26,427			27.5	%
Residential real estate	644,426		638,606		30,670		(24,850		)	(3.9	)%
Home equity	988,147		927,803		6,439		53,905			5.8	%
Other consumer	11,064		14,988		153		(4,077		)	(27.2	)%
Total loans	$	5,999,605	$	5,547,721	$	225,731	$	226,153		4.1	%

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The following table sets forth information concerning the composition of the Bank’s loan portfolio by loan type at the dates indicated:

Table 7 — Loan Portfolio Composition

	December 31
	2016				2015				2014				2013				2012
	(Dollars in thousands)
	Amount		Percent		Amount		Percent		Amount		Percent		Amount		Percent		Amount		Percent
Commercial and industrial	$	902,053	15.0	%	$	843,276	15.2	%	$	860,839	17.3	%	$	784,202	16.6	%	$	687,511	15.2	%
Commercial real estate	3,010,798		50.3	%	2,653,434		47.8	%	2,347,323		47.2	%	2,249,260		47.7	%	2,122,153		46.9	%
Commercial construction	320,391		5.3	%	373,368		6.7	%	265,994		5.4	%	223,859		4.7	%	188,768		4.2	%
Small business	122,726		2.0	%	96,246		1.7	%	85,247		1.7	%	77,240		1.6	%	78,594		1.7	%
Residential real estate	644,426		10.7	%	638,606		11.5	%	530,259		10.7	%	541,443		11.5	%	612,881		13.6	%
Home equity	988,147		16.5	%	927,803		16.8	%	863,863		17.4	%	822,141		17.5	%	802,149		17.8	%
Other consumer	11,064		0.2	%	14,988		0.3	%	17,208		0.3	%	20,162		0.4	%	26,955		0.6	%
Gross loans	5,999,605		100.0	%	5,547,721		100.0	%	4,970,733		100.0	%	4,718,307		100.0	%	4,519,011		100.0	%
Allowance for loan losses	61,566				55,825				55,100				53,239				51,834
Net loans	$	5,938,039			$	5,491,896			$	4,915,633			$	4,665,068			$	4,467,177

The following table sets forth the scheduled contractual amortization of the Bank’s loan portfolio at December 31, 2016. Loans having no schedule of repayments or no stated maturity are reported as being due in greater than five years. The following table also sets forth the rate structure of loans scheduled to mature after one year:

Table 8 — Scheduled Contractual Loan Amortization

	December 31, 2016
	Commercial		Commercial Real Estate		Commercial Construction (1)		Small Business		Residential Real Estate		Home Equity		Consumer Other		Total
	(Dollars in thousands)
Amounts due in:
One year or less	$	185,662	$	581,024	$	94,512	$	37,443	$	28,729	$	23,969	$	8,157	$	959,496
After one year through five years	416,076		1,418,409		126,000		46,859		94,700		99,879		2,401		2,204,324
Beyond five years	300,315		1,011,365		99,879		38,424		520,997		864,299		506		2,835,785
Total	$	902,053	$	3,010,798	$	320,391	$	122,726	$	644,426	$	988,147	$	11,064	$	5,999,605
Interest rate terms on amounts due after one year:
Fixed rate	$	339,281	$	794,979	$	32,550	$	54,902	$	455,484	$	329,049	$	2,907	$	2,009,152
Adjustable rate	$	377,110	$	1,634,795	$	193,329	$	30,381	$	160,213	$	635,129	$	—	$	3,030,957

(1) Includes certain construction loans that will convert to commercial mortgages and will be reclassified to commercial real estate upon the completion of the construction phase.

As of December 31, 2016, $38.6 million of loans scheduled to mature within one year were nonperforming.

Generally, the actual maturity of loans is substantially shorter than their contractual maturity due to prepayments and, in the case of real estate loans, due-on-sale clauses, which generally give the Bank the right to declare a loan immediately due and payable in the event that, among other things, the borrower sells the property subject to the mortgage and the loan is not repaid. The average life of real estate loans tends to increase when current real estate loan rates are higher than rates on mortgages in the portfolio and, conversely, tends to decrease when rates on mortgages in the portfolio are higher than current real estate loan rates.

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Under the latter scenario, the weighted average yield on the portfolio tends to decrease as higher yielding loans are repaid or refinanced at lower rates. Due to the fact that the Bank may, consistent with industry practice, renew a significant portion of commercial and commercial real estate loans at or immediately prior to their maturity by renewing the loans on substantially similar or revised terms, the principal repayments actually received by the Bank are anticipated to be significantly less than the amounts contractually due in any particular period. In other circumstances, a loan, or a portion of a loan, may not be repaid due to the borrower’s inability to satisfy the contractual obligations of the loan.

Asset Quality     The Company continually monitors the asset quality of the loan portfolio using all available information. Based on this assessment, loans demonstrating certain payment issues or other weaknesses may be categorized as delinquent, impaired, nonperforming and/or put on nonaccrual status. Additionally, in the course of resolving such loans, the Company may choose to restructure the contractual terms of certain loans to match the borrower’s ability to repay the loan based on their current financial condition. If a restructured loan meets certain criteria, it may be categorized as a troubled debt restructuring ("TDR").

DelinquencyThe Company’s philosophy toward managing its loan portfolios is predicated upon careful monitoring, which stresses early detection and response to delinquent and default situations.  The Company seeks to make arrangements to resolve any delinquent or default situation over the shortest possible time frame.  Generally, the Company requires that a delinquency notice be mailed to a borrower upon expiration of a grace period (typically no longer than 15 days beyond the due date).  Reminder notices may be sent and telephone calls may be made prior to the expiration of the grace period. If the delinquent status is not resolved within a reasonable time frame following the mailing of a delinquency notice, the Bank’s personnel charged with managing its loan portfolios contacts the borrower to ascertain the reasons for delinquency and the prospects for payment.  Any subsequent actions taken to resolve the delinquency will depend upon the nature of the loan and the length of time that the loan has been delinquent. The borrower’s needs are considered as much as reasonably possible without jeopardizing the Bank’s position. A late charge is usually assessed on loans upon expiration of the grace period.

Nonaccrual Loans    As a general rule, loans more than 90 days past due with respect to principal or interest are classified as nonaccrual loans. However, certain loans that are more than 90 days past due may be kept on an accruing status if the loans are well secured and/or in the process of collection. The Company may also put a junior lien mortgage on nonaccrual status as a result of delinquency with respect to the first position, which is held by another financial institution, while the junior lien is currently performing. Income accruals are suspended on all nonaccrual loans and all previously accrued and uncollected interest is reversed against current income. A loan remains on nonaccrual status until it becomes current with respect to principal and interest (and in certain instances remains current for up to six months), the loan is liquidated, or when the loan is determined to be uncollectible and is charged-off against the allowance for loan losses.

Troubled Debt RestructuringsIn the course of resolving problem loans, the Company may choose to restructure the contractual terms of certain loans. The Company attempts to work out an alternative payment schedule with the borrower in order to avoid or cure a default. Loans that are modified are reviewed by the Company to identify if a TDR has occurred, which is when, for economic or legal reasons related to a borrower’s financial difficulties, the Bank grants a concession to the borrower that it would not otherwise consider. Terms may be modified to fit the ability of the borrower to repay in line with its current financial status and the restructuring of the loan may include adjustments to interest rates, extensions of maturity, consumer loans where the borrower's obligations have been effectively discharged through Chapter 7 Bankruptcy and the borrower has not reaffirmed the debt to the Bank, and other actions intended to minimize economic loss and avoid foreclosure or repossession of collateral. If such efforts by the Bank do not result in satisfactory performance, the loan is referred to legal counsel, at which time foreclosure proceedings are initiated. At any time prior to a sale of the property at foreclosure, the Bank may terminate foreclosure proceedings if the borrower is able to work out a satisfactory payment plan.

It is the Company’s policy to have any restructured loans which are on nonaccrual status prior to being modified remain on nonaccrual status for six months, subsequent to being modified, before management considers its return to accrual status. If the restructured loan is on accrual status prior to being modified, it is reviewed to determine if the modified loan should remain on accrual status. Loans that are considered TDRs are classified as performing, unless they are on nonaccrual status or greater than 90 days delinquent. Loans classified as TDRs remain classified as such for the life of the loan, except in limited circumstances, when it may be determined that the borrower is performing under modified terms and the restructuring agreement specified an interest rate greater than or equal to an acceptable market rate for a comparable new loan at the time of the restructuring.

Purchased Credit Impaired Loans Purchased Credit Impaired (“PCI”) loans are acquired loans which had evidence of deterioration in credit quality at the purchase date and for which it is probable that all contractually required payments will not be collected. PCI loans are recorded at fair value without any carryover of the allowance for loan losses. The excess cash flows expected to be collected over the carrying amount of the loans, referred to as the "accretable yield," is accreted into interest income over the life of the loans using the effective yield method. Accordingly, PCI loans are not subject to classification as nonaccrual in the same manner as originated loans, rather they are generally considered to be accruing loans because their interest income

42

recognized relates to the accretable yield and not to contractual interest payments. See Note 4, "Loans, Allowance for Loan Losses and Credit Quality" within Notes to Consolidated Financial Statements included in Item 8 hereof for more information.

Nonperforming Assets    Nonperforming assets are comprised of nonperforming loans, nonperforming securities, other real estate owned (“OREO”), and other assets in possession. Nonperforming loans consist of nonaccrual loans and loans that are more than 90 days past due but still accruing interest.

Nonperforming securities consisted of securities that are on nonaccrual status. The Company previously held five collateralized debt obligation securities (“CDOs”) comprised of pools of trust preferred securities issued by banks and insurance companies, which were deferring interest payments on certain tranches within the bonds’ structures including the tranches held by the Company. These nonaccrual securities were sold by the Company during 2015 for a net gain of $162,000.

OREO consists of real estate properties, which have primarily served as collateral to secure loans, that are controlled or owned by the Bank. These properties are recorded at fair value less estimated costs to sell at the date control is established, resulting in a new cost basis. The amount by which the recorded investment in the loan exceeds the fair value (net of estimated costs to sell) of the foreclosed asset is charged to the allowance for loan losses. Subsequent declines in the fair value of the foreclosed asset below the new cost basis are recorded through the use of a valuation allowance. Subsequent increases in the fair value are recorded as reductions in the valuation allowance, but not below zero. All costs incurred thereafter in maintaining the property are generally charged to noninterest expense. In the event the real estate is utilized as a rental property, net rental income and expenses are recorded as incurred within noninterest expense.

Other assets in possession typically consist of foreclosed non-real estate assets deemed to be in control of the Company.

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The following table sets forth information regarding nonperforming assets held by the Bank at the dates indicated:

Table 9 — Nonperforming Assets

	December 31
	2016			2015			2014			2013			2012
	(Dollars in thousands)
Loans accounted for on a nonaccrual basis (1)
Commercial and industrial (2)	$	37,455		$	3,699		$	2,822		$	4,178		$	2,666
Commercial real estate	6,266			8,160			7,590			11,834			6,574
Small business	302			239			246			633			570
Residential real estate	7,782			8,795			8,697			10,329			11,472
Home equity	5,553			6,742			8,038			7,068			7,311
Other consumer	47			55			—			92			121
Total	57,405			27,690			27,393			34,134			28,714
Loans past due 90 days or more but still accruing
Residential real estate (3)	—			—			106			462			—
Other consumer	2			—			13			63			52
Total	2			—			119			525			52
Total nonperforming loans	57,407			27,690			27,512			34,659			28,766
Nonaccrual securities (4)	—			—			3,639			1,541			1,511
Other assets in possession	—			—			—			167			176
Other real estate owned	4,173			2,159			7,743			7,466			11,974
Total nonperforming assets	$	61,580		$	29,849		$	38,894		$	43,833		$	42,427
Nonperforming loans as a percent of gross loans	0.96		%	0.50		%	0.55		%	0.73		%	0.64		%
Nonperforming assets as a percent of total assets	0.80		%	0.41		%	0.61		%	0.72		%	0.74		%

(1) Included in these amounts were TDRs on nonaccrual of $5.2 million at December 31, 2016, 2015, and 2014, $7.5 million at December 31, 2013, and $6.6 million at December 31, 2012.

(2) Included in this amount at December 31, 2016 is $34.6 million of loans related to one large relationship that was placed on nonaccrual status in the fourth quarter of 2016 despite being contractually current.

(3) Represents purchased credit impaired loans that are accruing interest due to expectations of future cash collections.

(4) Amounts represent the fair value of nonaccrual securities. The Company had no nonaccrual securities in 2016 and 2015, five nonaccrual securities in 2014 and 2013, and six nonaccrual securities in 2012.

44

The following table summarizes the changes in nonperforming assets for the periods indicated:

Table 10 — Activity in Nonperforming Assets

	Years Ended December 31
	2016			2015
	(Dollars in thousands)
Nonperforming assets beginning balance	$	29,849		$	38,894
Acquired nonperforming loans	—			1,901
New to nonperforming	47,371			25,751
Loans charged-off	(3,472		)	(4,919		)
Loans paid-off	(9,632		)	(14,951		)
Loans restored to accrual status	(3,447		)	(6,114		)
Loans transferred to other real estate owned/other assets	(1,322		)	(1,522		)
Change to other real estate owned:
New to other real estate owned (1)	1,322			2,446
Acquired other real estate owned	2,100			—
Valuation write down	(206		)	(1,254		)
Sale of other real estate owned	(1,406		)	(7,516		)
Capital improvements to other real estate owned	203			959
Net change in nonaccrual securities	—			(3,639		)
Other	220			(187		)
Nonperforming assets ending balance	$	61,580		$	29,849

(1) For the year ended December 31, 2015 this amount is inclusive of a $612,000 payment to buy out the first position of a foreclosed loan and $312,000 of real estate recognized as a loan recovery.

The following table sets forth information regarding troubled debt restructured loans as of the dates indicated:

Table 11 — Troubled Debt Restructurings

	December 31
	2016			2015			2014			2013			2012
	(Dollars in thousands)
Performing troubled debt restructurings	$	27,093		$	32,849		$	38,382		$	38,410		$	46,764
Nonaccrual troubled debt restructurings	5,199			5,225			5,248			7,454			6,554
Total	$	32,292		$	38,074		$	43,630		$	45,864		$	53,318
Performing troubled debt restructurings as a % of total loans	0.45		%	0.59		%	0.77		%	0.81		%	1.03		%
Nonaccrual troubled debt restructurings as a % of total loans	0.09		%	0.09		%	0.11		%	0.16		%	0.15		%
Total troubled debt restructurings as a % of total loans	0.54		%	0.69		%	0.88		%	0.97		%	1.18		%

45

The following table summarizes changes in TDRs for the periods indicated:

Table 12 — Activity in Troubled Debt Restructurings

	December 31
	2016			2015
	(Dollars in thousands)
TDRs beginning balance	$	38,074		$	43,630
New to TDR status	4,282			6,031
Paydowns	(9,984		)	(11,163		)
Charge-offs	(80		)	(424		)
Loans removed from TDR status	—			—
TDRs ending balance	$	32,292		$	38,074

Income accruals are suspended on all nonaccrual loans and all previously accrued and uncollected interest is reversed against current income. The table below shows interest income that was recognized or collected on all nonaccrual loans and TDRs as of the dates indicated:

Table 13 — Interest Income Recognized/Collected on Nonaccrual Loans and Troubled Debt Restructurings

	Years Ended December 31
	2016		2015		2014
	(Dollars in thousands)
The amount of incremental gross interest income that would have been recorded if nonaccrual loans had been current in accordance with their original terms	$	1,131	$	1,270	$	1,580
The amount of interest income on nonaccrual loans and performing TDRs that was included in net income	$	1,872	$	2,274	$	2,419

A loan is considered impaired when, based on current information and events, it is probable that the Bank will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower's prior payment record, and the amount of the shortfall in relation to the principal and interest owed.

Impaired loans include all commercial and industrial loans, commercial real estate loans, commercial construction and small business loans that are on nonaccrual status, TDRs, and other loans that have been categorized as impaired. Impairment is measured on a loan by loan basis by comparing the loan’s value to either the present value of expected future cash flows discounted at the loan's effective interest rate, the loan's obtainable market price, or the fair value of the collateral if the loan is collateral dependent. For impaired loans deemed collateral dependent, where impairment is measured using the fair value of the collateral, the Bank will either order a new appraisal or use another available source of collateral assessment such as a broker’s opinion of value to determine a reasonable estimate of the fair value of the collateral.

Total impaired loans at December 31, 2016 and 2015 were $77.3 million and $51.4 million, respectively. For additional information regarding the Bank’s asset quality, including delinquent loans, nonaccruals, TDRs, and impaired loans, see Note 4, “Loans, Allowance for Loan Losses and Credit Quality” within Notes to Consolidated Financial Statements included in Item 8 hereof.

Potential problem loans are any loans which are not included in nonaccrual or nonperforming loans, where known information about possible credit problems of the borrowers causes management to have concerns as to the ability of such borrowers to comply with present loan repayment terms. At December 31, 2016, there were 54 relationships, with an aggregate balance of $87.8 million, deemed to be potential problem loans. These potential problem loans continued to perform with respect to payments. Management actively monitors these loans and strives to minimize any possible adverse impact to the Bank.

46

Allowance for Loan Losses    The allowance for loan losses is maintained at a level that management considers appropriate to provide for probable loan losses based upon evaluation of known and inherent risks in the loan portfolio. The allowance is increased by providing for loan losses through a charge to expense and by credits for recoveries of loans previously charged-off and is reduced by loans being charged-off.

While management uses available information to recognize losses on loans, future additions to the allowance may be necessary based on increases in nonperforming loans, changes in economic conditions, or for other reasons. Additionally, various regulatory agencies, as an integral part of the Bank's examination process, periodically assess the appropriateness of the allowance for loan losses and may require it to increase its provision for loan losses or recognize further loan charge-offs, in accordance with GAAP.

The allowance for loan losses is allocated to loan types using both a formula-based approach applied to groups of loans and an analysis of certain individual loans for impairment. The formula-based approach emphasizes loss factors derived from actual historical portfolio loss rates, which are combined with an assessment of certain qualitative factors to determine the allowance amounts allocated to the various loan categories. Allowance amounts are determined based on an estimate of the historical average annual percentage rate of loan loss for each loan category, an estimate of the incurred loss emergence and confirmation period for each loan category, and certain qualitative risk factors considered in the computation of the allowance for loan losses. Additionally, the Company reviews numerous credit quality indicators when assessing the risk in its loan portfolio. For the commercial portfolio, the Company utilizes a 10-point commercial risk-rating system, which assigns a risk-grade to each borrower based on a number of quantitative and qualitative factors associated with a commercial loan transaction. Factors considered include industry and market conditions, position within the industry, earnings trends, operating cash flow, asset/liability values, debt capacity, guarantor strength, management and controls, financial reporting, collateral and other considerations.

As of December 31, 2016, the allowance for loan losses totaled $61.6 million, or 1.03% of total loans, as compared to $56.4 million, or 1.01% of total loans, at December 31, 2015. The increase in the amount of the allowance as a percentage of loans is largely attributable to a specific loan loss reserve for one large commercial relationship which was placed on nonaccrual status in the fourth quarter of 2016.

47

The following table summarizes changes in the allowance for loan losses and other selected statistics for the periods presented:

Table 14 — Summary of Changes in the Allowance for Loan Losses

	December 31
	2016			2015			2014			2013			2012
	(Dollars in thousands)
Average total loans	$	5,670,427		$	5,394,464		$	4,871,197		$	4,556,351		$	4,022,349
Allowance for loan losses, beginning of year	$	55,825		$	55,100		$	53,239		$	51,834		$	48,260
Charged-off loans:
Commercial and industrial	593			2,010			2,097			2,683			6,191
Commercial real estate	414			330			5,454			3,587			4,348
Commercial construction	—			—			—			308			—
Small business	228			267			605			773			616
Residential real estate	28			285			826			622			1,094
Home equity	602			710			750			1,370			3,178
Other consumer	1,607			1,316			1,215			1,175			1,165
Total charged-off loans	3,472			4,918			10,947			10,518			16,592
Recoveries on loans previously charged-off
Commercial and industrial	859			1,593			462			272			963
Commercial real estate	564			1,073			404			206			188
Commercial construction	—			—			—			100			—
Small business	195			264			275			279			134
Residential real estate	299			133			424			143			151
Home equity	141			356			249			135			93
Other consumer	1,080			724			591			588			581
Total recoveries	3,138			4,143			2,405			1,723			2,110
Net loans charged-off (recoveries)
Commercial and industrial	(266		)	417			1,635			2,411			5,228
Commercial real estate	(150		)	(743		)	5,050			3,381			4,160
Commercial construction	—			—			—			208			—
Small business	33			3			330			494			482
Residential real estate	(271		)	152			402			479			943
Home equity	461			354			501			1,235			3,085
Other consumer	527			592			624			587			584
Total net loans charged-off	334			775			8,542			8,795			14,482
Provision for loan losses	6,075			1,500			10,403			10,200			18,056
Total allowances for loan losses, end of year	$	61,566		$	55,825		$	55,100		$	53,239		$	51,834
Net loans charged-off as a percent of average total loans	0.01		%	0.01		%	0.18		%	0.19		%	0.36		%
Allowance for loan losses as a percent of total loans	1.03		%	1.01		%	1.11		%	1.13		%	1.15		%
Allowance for loan losses as a percent of nonperforming loans	107.24		%	201.61		%	200.28		%	153.61		%	180.19		%
Net loans charged-off as a percent of allowance for loan losses	0.54		%	1.39		%	15.50		%	16.52		%	27.94		%
Recoveries as a percent of gross charge-offs	90.38		%	84.24		%	21.97		%	16.38		%	12.72		%

48

For purposes of the allowance for loan losses, management segregates the loan portfolio into the portfolio segments detailed in the table below. The allocation of the allowance for loan losses is made to each loan category using the analytical techniques and estimation methods described herein. While these amounts represent management’s best estimate of the distribution of probable losses at the evaluation dates, they are not necessarily indicative of either the categories in which actual losses may occur or the extent of such actual losses that may be recognized within each category. Each of these loan categories possess unique risk characteristics that are considered when determining the appropriate level of allowance for each segment. The total allowance is available to absorb losses from any segment of the loan portfolio.

The following table sets forth the allocation of the allowance for loan losses by loan category at the dates indicated:

Table 15 — Summary of Allocation of Allowance for Loan Losses

	December 31
	2016				2015				2014				2013				2012
	Allowance Amount		Percent of Loans In Category To Total Loans		Allowance Amount		Percent of Loans In Category To Total Loans		Allowance Amount		Percent of Loans In Category To Total Loans		Allowance Amount		Percent of Loans In Category To Total Loans		Allowance Amount		Percent of Loans In Category To Total Loans
	(Dollars in thousands)
Allocated Allowance
Commercial and industrial	$	16,921	15.0	%	$	13,802	15.2	%	$	15,573	17.3	%	$	15,622	16.6	%	$	13,461	15.2	%
Commercial real estate	30,369		50.2	%	27,327		47.8	%	25,873		47.2	%	24,541		47.7	%	22,598		46.9	%
Commercial construction	4,522		5.3	%	5,366		6.7	%	3,945		5.4	%	3,371		4.7	%	2,811		4.2	%
Small business	1,502		2.1	%	1,264		1.7	%	1,171		1.7	%	1,215		1.6	%	1,524		1.7	%
Residential real estate	2,621		10.7	%	2,590		11.5	%	2,834		10.7	%	2,760		11.5	%	2,930		13.6	%
Home equity	5,238		16.5	%	4,889		16.7	%	4,956		17.4	%	5,036		17.5	%	7,703		17.8	%
Other consumer	393		0.2	%	587		0.4	%	748		0.3	%	694		0.4	%	807		0.6	%
Total	$	61,566	100.0	%	$	55,825	100.0	%	$	55,100	100.0	%	$	53,239	100.0	%	$	51,834	100.0	%

To determine if a loan should be charged-off, all possible sources of repayment are analyzed. Possible sources of repayment include the potential for future cash flows, the value of the Bank’s collateral, and the strength of co-makers or guarantors. When available information confirms that specific loans or portions thereof are uncollectible, these amounts are promptly charged-off against the allowance for loan losses and any recoveries of such previously charged-off amounts are credited to the allowance.

Regardless of whether a loan is unsecured or collateralized, the Company charges off the amount of any confirmed loan loss in the period when the loans, or portions of loans, are deemed uncollectible. For troubled, collateral-dependent loans, loss-confirming events may include an appraisal or other valuation that reflects a shortfall between the value of the collateral and the carrying value of the loan or receivable, or a deficiency balance following the sale of the collateral.

For additional information regarding the Bank’s allowance for loan losses, see Note 1, “Summary of Significant Accounting Policies” and Note 4, “Loans, Allowance for Loan Losses and Credit Quality” within Notes to Consolidated Financial Statements included in Item 8 hereof.

Federal Home Loan Bank Stock    The Bank held an investment in Federal Home Loan Bank (“FHLB”) of Boston, of $11.5 million at December 31, 2016 and $14.4 million at December 31, 2015. The FHLB is a cooperative that provides services to its member banking institutions. The primary reason for the FHLB of Boston membership is to gain access to a reliable source of wholesale funding, particularly term funding, as a tool to manage interest rate risk. The purchase of stock in the FHLB is a requirement for a member to gain access to funding. The Company purchases FHLB stock proportional to the volume of funding received and views the purchases as a necessary long-term investment for the purposes of balance sheet liquidity and not for investment return. During 2016, the Bank acquired $2.3 million of additional FHLB stock in connection with the NEB acquisition, and was subject to both redemptions of stock from the FHLB, as well as additional required purchases.

49

Goodwill and Other Intangible Assets    Goodwill and Other Intangible Assets were $231.4 million and $212.9 million at December 31, 2016 and December 31, 2015, respectively. The increase is due to the NEB acquisition offset by amortization of definite-lived intangibles.

The Company typically performs its annual goodwill impairment testing during the third quarter of the year, unless certain indicators suggest earlier testing to be warranted. The Company performed its annual goodwill impairment testing during the third quarter of 2016 and determined that the Company's goodwill was not impaired. Other intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. There were no events or changes that indicated impairment of other intangible assets. For additional information regarding the goodwill and other intangible assets, see Note 6, “Goodwill and Other Intangible Assets” within Notes to Consolidated Financial Statements included in Item 8 hereof.

Cash Surrender Value of Life Insurance Policies    The Bank holds life insurance policies for the purpose of offsetting its future obligations to its employees under its retirement and benefits plans. The cash surrender value of life insurance policies was $144.5 million and $134.6 million at December 31, 2016 and December 31, 2015, respectively, reflective of additional policies acquired in the NEB acquisition. The Company recorded tax exempt income from the life insurance policies of $4.1 million, $3.7 million, and $3.1 million in 2016, 2015, and 2014, respectively. Also during 2014, the Company recognized tax-exempt gains on life insurance benefits in the amount of $1.9 million. There were no such gains in 2016 or 2015.

Deposits    As of December 31, 2016, total deposits were $6.4 billion, representing a $421.6 million, or 7.0%, increase from the prior year-end. The increase is due partially to the impact of the NEB acquisition combined with strong core deposit growth, partially offset by a decrease in time deposits. This continued focus on core deposit growth, which the Company defines as nontime and nonbrokered deposits, resulted in core deposits comprising 89.9% of total deposits at December 31, 2016, and an overall total cost of deposits of 0.18%.

Excluding the effects of the NEB acquisition, organic growth in demand deposits, savings and interest checking and money market deposits was countered by declines in the time certificates of deposits. The following table sets forth deposit growth during the year:

Table 16 - Components of Deposit Growth

	December 31 2016		December 31 2015		New England Bancorp Acquisition		Organic Growth/(Decline) $			Organic Growth/(Decline) %
	(Dollars in thousands)
Demand deposits	$	2,057,086	$	1,846,593	$	32,889	$	177,604		9.6	%
Savings and interest checking	2,469,237		2,370,141		32,151		66,945			2.8	%
Money market	1,236,778		1,089,139		41,449		106,190			9.7	%
Time certificates of deposits	649,152		684,830		69,197		(104,875		)	(15.3	)%
Total	$	6,412,253	$	5,990,703	$	175,686	$	245,864		4.1	%

The following table sets forth the maturities of the Bank’s time certificates of deposits in the amount of $100,000 or more as of December 31, 2016:

Table 17 — Maturities of Time Certificates of Deposits $100,000 and Over

	Balance		Percentage
	(Dollars in thousands)
1 to 3 months	$	64,349	24.2	%
4 to 6 months	53,399		20.1	%
7 to 12 months	52,006		19.5	%
Over 12 months	96,436		36.2	%
Total	$	266,190	100.0	%

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The Bank also participates in the Certificate of Deposit Account Registry Service (“CDARS”) program, allowing the Bank to provide easy access to multi-million dollar Federal Deposit Insurance Corporation ("FDIC") deposit insurance protection on certificate of deposit investments for consumers, businesses and public entities. In addition, the Company may occasionally raise funds through brokered certificates of deposit. This channel allows the Company to seek additional funding in potentially large quantities by attracting deposits from outside the Bank’s core market.

The following table sets forth the balance of the Bank’s brokered deposits as of the dates indicated:

Table 18 — Brokered Deposits

	December 31
	2016		2015
	(Dollars in thousands)
CDARS	$	13,724	$	34,871
Brokered certificates of deposit	—		10,416
Brokered money market	1,000		1,000
Total brokered deposits	$	14,724	$	46,287

Borrowings    The Company's borrowings consist of both short-term and long-term borrowings and provide the Bank with one of its primary sources of funding. Maintaining available borrowing capacity provides the Bank with a contingent source of liquidity.

During 2016 the Company assumed, at fair value, $51.5 million of FHLB borrowings as a result of the NEB acquisition. The company repaid $102.8 million in borrowings throughout the year, inclusive of the amount acquired from NEB. The paid off borrowings resulted in a loss on extinguishment of debt of $437,000.

During 2015 the Company assumed, at fair value, an additional $51.2 million of FHLB borrowings as part of the Peoples acquisition. In addition, during the first quarter of 2015, the Company redeemed $30.0 million of subordinated debt held at the Bank, as the debt had started to lose its qualification for Tier 2 capital based on its maturity date. The Company did not incur a prepayment penalty as part of the redemption. Also, during the third quarter of 2015, the Company's borrowings in wholesale repurchase agreements of $50.0 million matured and were repaid in full, which resulted in a loss on extinguishment of debt of $122,000.

The following table sets forth the balance of borrowings, net of applicable debt issuance costs, at the periods indicated:

Table 19 — Borrowings by Category

	December 31
	2016		2015		% Change
	(Dollars in thousands)
Federal Home Loan Bank borrowings	$	50,819	$	102,080	(50.2	)%
Customer repurchase agreements and other short-term borrowings	176,913		133,958		32.1	%
Junior subordinated debentures	73,107		73,306		(0.3	)%
Subordinated debentures	34,635		34,589		0.1	%
Total	$	335,474	$	343,933	(2.5	)%

See Note 8, "Borrowings" within Notes to Consolidated Financial Statements included in Item 8 hereof for more information regarding borrowings.

Capital Resources   The Federal Reserve Board (Federal Reserve), the FDIC, and other regulatory agencies have established capital guidelines for banks and bank holding companies. Effective January 1, 2015, risk-based capital guidelines issued by the federal regulatory agencies require banks to meet a minimum Common Equity Tier 1 capital ratio of 4.5%, Tier 1 capital ratio of 6.0% and a total capital ratio of 8.0%. A minimum requirement of 4.0% Tier 1 leverage capital is also mandated. In addition, the Company is required to maintain a minimum capital conservation buffer, in the form of common equity, in order to avoid restrictions on capital distributions and discretionary bonuses. The required amount of the capital conservation buffer is being phased-in, beginning at 0.625% on January 1, 2016 and ultimately increasing to 2.5% on January 1, 2019. At December 31, 2016, the Company and the Bank exceeded the minimum requirements for Common Equity Tier 1 capital, Tier 1 capital, total capital, and

51

Tier 1 leverage capital., inclusive of the required capital conservation buffer. See Note 19, “Regulatory Matters” within Notes to Consolidated Financial Statements included in Item 8 hereof for more information regarding capital requirements.

Results of Operations

Table 20 — Summary of Results of Operations

	Years Ended December 31
	2016			2015
	(Dollars in thousands, except per share data)
Net income	$	76,648		$	64,960
Diluted earnings per share	$	2.90		$	2.50
Return on average assets	1.04		%	0.93		%
Return on average equity	9.43		%	8.79		%
Stockholders' equity as % of assets	11.22		%	10.70		%
Net interest margin	3.40		%	3.42		%

Net Interest Income    The amount of net interest income is affected by changes in interest rates and by the volume, mix, and interest rate sensitivity of interest-earning assets and interest-bearing liabilities.

On a fully tax-equivalent basis, net interest income was $229.4 million in 2016, a 6.0% increase from 2015 net interest income of $216.4 million, driven by the overall increase in interest earning assets.

The following table presents the Company’s average balances, net interest income, interest rate spread, and net interest margin for 2016, 2015, and 2014. Nontaxable income from loans and securities is presented on a fully tax-equivalent basis by adjusting tax-exempt income upward by an amount equivalent to the prevailing federal income taxes that would have been paid if the income had been fully taxable.

Table 21 — Average Balance, Interest Earned/Paid & Average Yields

	Years Ended December 31
	2016						2015						2014
	Average Balance		Interest Earned/ Paid		Average Yield		Average Balance		Interest Earned/ Paid		Average Yield		Average Balance		Interest Earned/ Paid		Average Yield
	(Dollars in thousands)
Interest-earning assets
Interest-earning deposits with banks, federal funds sold, and short term investments	$	228,861	$	1,190	0.52	%	$	138,694	$	349	0.25	%	$	111,764	$	279	0.25	%
Securities
Securities - trading	701		—		—	%	389		—		—	%	—		—		—	%
Securities - taxable investments	826,131		20,851		2.52	%	787,781		20,120		2.55	%	713,969		18,610		2.61	%
Securities - nontaxable investments (1)	4,486		180		4.01	%	5,101		195		3.82	%	5,944		233		3.92	%
Total securities	831,318		21,031		2.53	%	793,271		20,315		2.56	%	719,913		18,843		2.62	%
Loans held for sale	9,213		235		2.55	%	9,244		225		2.43	%	11,125		405		3.64	%
Loans(2)
Commercial and industrial	848,434		33,206		3.91	%	858,043		33,569		3.91	%	837,618		32,442		3.87	%
Commercial real estate (1)	2,748,337		111,977		4.07	%	2,590,482		106,801		4.12	%	2,306,901		97,971		4.25	%
Commercial construction	365,590		15,094		4.13	%	304,545		12,838		4.22	%	249,389		10,682		4.28	%
Small business	108,619		5,875		5.41	%	90,081		4,900		5.44	%	79,736		4,431		5.56	%
Total commercial	4,070,980		166,152		4.08	%	3,843,151		158,108		4.11	%	3,473,644		145,526		4.19	%
Residential real estate	633,313		25,487		4.02	%	641,218		25,603		3.99	%	538,171		21,462		3.99	%
Home equity	952,736		32,889		3.45	%	892,920		30,777		3.45	%	841,710		29,568		3.51	%
Total consumer real estate	1,586,049		58,376		3.68	%	1,534,138		56,380		3.68	%	1,379,881		51,030		3.70	%
Other consumer	13,398		1,185		8.84	%	17,175		1,664		9.69	%	17,672		1,732		9.80	%

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Total loans	5,670,427		225,713		3.98	%	5,394,464		216,152		4.01	%	4,871,197		198,288		4.07	%
Total Interest-Earning Assets	6,739,819		248,169		3.68	%	6,335,673		237,041		3.74	%	5,713,999		217,815		3.81	%
Cash and Due from Banks	91,107						110,202						113,394
Federal Home Loan Bank Stock	12,831						31,080						36,467
Other Assets	544,917						512,908						422,247
Total Assets	$	7,388,674					$	6,989,863					$	6,286,107
Interest-bearing liabilities
Deposits
Savings and interest checking accounts	$	2,399,147	$	3,173	0.13	%	$	2,242,245	$	3,556	0.16	%	$	2,087,973	$	3,573	0.17	%
Money market	1,178,262		2,996		0.25	%	1,102,892		2,878		0.26	%	972,664		2,487		0.26	%
Time certificates of deposits	649,678		4,971		0.77	%	708,094		5,142		0.73	%	698,070		4,979		0.71	%
Total interest bearing deposits	4,227,087		11,140		0.26	%	4,053,231		11,576		0.29	%	3,758,707		11,039		0.29	%
Borrowings
Federal Home Loan Bank borrowings	61,398		1,653		2.69	%	106,686		2,208		2.07	%	100,631		2,784		2.77	%
Customer repurchase agreements and other short-term borrowings	149,042		208		0.14	%	138,363		210		0.15	%	144,358		200		0.14	%
Wholesale repurchase agreements	—		—		—	%	32,192		746		2.32	%	50,000		1,158		2.32	%
Junior subordinated debentures	73,207		4,083		5.58	%	73,407		4,026		5.48	%	73,607		4,008		5.45	%
Subordinated debt	34,612		1,709		4.94	%	38,692		1,851		4.78	%	34,154		1,228		3.60	%
Total borrowings	318,259		7,653		2.40	%	389,340		9,041		2.32	%	402,750		9,378		2.33	%
Total interest-bearing liabilities	4,545,346		18,793		0.41	%	4,442,571		20,617		0.46	%	4,161,457		20,417		0.49	%
Demand deposits	1,924,173						1,704,253						1,422,510
Other liabilities	106,766						103,839						82,310
Total liabilities	6,576,285						6,250,663						5,666,277
Stockholders’ equity	812,389						739,200						619,830
Total liabilities and stockholders’ equity	$	7,388,674					$	6,989,863					$	6,286,107
Net interest income(1)			$	229,376					$	216,424					$	197,398
Interest rate spread(3)					3.27	%					3.28	%					3.32	%
Net interest margin(4)					3.40	%					3.42	%					3.45	%
Supplemental Information
Total deposits, including demand deposits	$	6,151,260	$	11,140			$	5,757,484	$	11,576			$	5,181,217	$	11,039
Cost of total deposits					0.18	%					0.20	%					0.21	%
Total funding liabilities, including demand deposits	$	6,469,519	$	18,793			$	6,146,824	$	20,617			$	5,583,967	$	20,417
Cost of total funding liabilities					0.29	%					0.34	%					0.37	%

(1) The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $1.5 million for both 2016 and 2015, and $1.4 million in 2014. The FTE adjustment relates to nontaxable investment securities with average balances of $4.5 million, $5.1 million, and $5.9 million, in 2016, 2015, and 2014, respectively, and nontaxable industrial development bonds with average balances of $69.9 million, $67.7 million, and $51.3 million in 2016, 2015, and 2014, respectively.

(2) Average nonaccruing loans are included in loans.

(3) Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average costs of interest-bearing liabilities.

(4) Net interest margin represents net interest income as a percentage of average interest-earning assets.

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The following table presents certain information on a fully-tax equivalent basis regarding changes in the Company’s interest income and interest expense for the periods indicated. For each category of interest-earning assets and interest-bearing liabilities, information is provided with respect to changes attributable to (1) changes in rate (change in rate multiplied by prior year volume), (2) changes in volume (change in volume multiplied by prior year rate) and (3) changes in volume/rate (change in rate multiplied by change in volume) which is allocated to the change due to rate column:

Table 22 — Volume Rate Analysis

	Years Ended December 31
	2016 Compared To 2015									2015 Compared To 2014									2014 Compared to 2013
	Change Due to Rate			Change Due to Volume			Total Change			Change Due to Rate			Change Due to Volume			Total Change			Change Due to Rate			Change Due to Volume			Total Change
	(Dollars in thousands)
Income on interest-earning assets
Interest-earning deposits, federal funds sold and short term investments	$	614		$	227		$	841		$	3		$	67		$	70		$	1		$	78		$	79
Securities
Taxable securities	(248		)	979			731			(414		)	1,924			1,510			(459		)	3,932			3,473
Nontaxable securities(1)	9			(24		)	(15		)	(5		)	(33		)	(38		)	(110		)	255			145
Total securities							716									1,472									3,618
Loans held for sale	11			(1		)	10			(112		)	(68		)	(180		)	94			(463		)	(369		)
Loans
Commercial and industrial	13			(376		)	(363		)	336			791			1,127			(799		)	4,000			3,201
Commercial real estate	(1,332		)	6,508			5,176			(3,213		)	12,043			8,830			(4,446		)	6,252			1,806
Commercial construction	(317		)	2,573			2,256			(206		)	2,362			2,156			353			1,263			1,616
Small business	(33		)	1,008			975			(106		)	575			469			(10		)	169			159
Total commercial							8,044									12,582									6,782
Residential real estate	200			(316		)	(116		)	32			4,109			4,141			145			138			283
Home equity	50			2,062			2,112			(590		)	1,799			1,209			(617		)	1,473			856
Total consumer real estate							1,996									5,350									1,139
Total other consumer	(113		)	(366		)	(479		)	(19		)	(49		)	(68		)	126			(441		)	(315		)
Loans(1)(2)							9,561									17,864									7,606
Total							$	11,128								$	19,226								$	10,934
Expense of interest-bearing liabilities
Deposits
Savings and interest checking accounts	$	(632	)	$	249		$	(383	)	$	(281	)	$	264		$	(17	)	$	(166	)	$	632		$	466
Money market	(79		)	197			118			58			333			391			(1		)	217			216
Time certificates of deposits	253			(424		)	(171		)	92			71			163			(75		)	(192		)	(267		)
Total interest-bearing deposits							(436		)							537									415
Borrowings
Federal Home Loan Bank borrowings	382			(937		)	(555		)	(744		)	168			(576		)	551			(3,213		)	(2,662		)
Customer repurchase agreements and other short-term borrowings	(18		)	16			(2		)	18			(8		)	10			(65		)	(11		)	(76		)
Wholesale repurchase agreements	—			(746		)	(746		)	—			(412		)	(412		)	—			—			—
Junior subordinated debentures	68			(11		)	57			30			(12		)	18			(29		)	(12		)	(41		)
Subordinated debt	53			(195		)	(142		)	451			172			623			(811		)	256			(555		)
Total borrowings							(1,388		)							(337		)							(3,334		)
Total							$	(1,824	)							$	200								$	(2,919	)
Change in net interest income							$	12,952								$	19,026								$	13,853

(1) The table above reflects income determined on a fully tax equivalent basis. See footnote (1) to Table 21 above for the related adjustments.

(2) Loans include portfolio loans and nonaccrual loans, however unpaid interest on nonaccrual loans has not been included for purposes of determining interest income.

The increase in net interest income is driven primarily by loan growth exceeding the impact of a continued decreasing interest rate environment.

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Provision For Loan Losses    The provision for loan losses represents the charge to expense that is required to maintain an appropriate level of allowance for loan losses. The provision for loan losses totaled $6.1 million in 2016, compared with $1.5 million in 2015. The increase in provision was primarily due to a specific reserve for one large commercial relationship which was placed on nonaccrual status in the fourth quarter of 2016. The Company’s allowance for loan losses, as a percentage of total loans, was 1.03% at December 31, 2016, as compared to 1.01% at December 31, 2015. Net charge-offs for the year ended December 31, 2016 totaled $334,000, a decrease of $441,000 from the prior year.

General economic conditions within the region continued to show moderate improvement during 2016, as measured by employment levels, economic activity, and other regional economic indicators. Job growth has been steady and unemployment levels have decreased. Lower energy costs related to oil and gasoline prices have benefited consumers and businesses in the region, although energy prices have rebounded moderately through year-end 2016. Area residential real estate prices and sales volume both are up year-over-year. Commercial real estate market conditions have held steady with most markets within the region experiencing stable to rising values and, generally, positive trends in rents and occupancy rates. However, commercial real estate valuations may have reached peak levels given market fundamentals. Investors and business leaders are growing more cautious about the economy and the uncertainty of a new administration. Leading economic indicators suggest low to moderate growth will continue in the near term, but could slow as global economic conditions and geopolitical forces could weigh on the economic outlook for the region, as parts of the region’s economy are susceptible to these factors.

Management’s periodic evaluation of the appropriate allowance for loan losses considers past loan loss experience, known and inherent risks in the loan portfolio, adverse situations which may affect the borrowers’ ability to repay, the estimated value of the underlying collateral, if any, and current economic conditions. Substantial portions of the Bank’s loans are secured by real estate in Massachusetts and Rhode Island. Accordingly, the ultimate collectability of a substantial portion of the Bank’s loan portfolio is susceptible to changes in property values within those states.

Noninterest Income    The following table sets forth information regarding noninterest income for the periods shown:

Table 23 — Noninterest Income

	Years Ended December 31
					Change
	2016		2015		Amount			%
	(Dollars in thousands)
Deposit account fees	$	18,085	$	18,078	$	7		—	%
Interchange and ATM fees	16,210		14,728		1,482			10.1	%
Investment management	21,809		20,735		1,074			5.2	%
Mortgage banking income	6,607		5,163		1,444			28.0	%
Increase in cash surrender value of life insurance policies	4,089		3,692		397			10.8	%
Gain on sale of fixed income securities	—		798		(798		)	(100.0	)%
Gain on sale of equity securities	6		20		(14		)	(70.0	)%
Loan level derivative income	6,155		3,830		2,325			60.7	%
Other noninterest income	9,467		8,844		623			7.0	%
Total	$	82,428	$	75,888	$	6,540		8.6	%

The primary reasons for significant variances in the noninterest income category shown in the preceding table are noted below:

Interchange and ATM fees increased $1.5 million, or 10.1%, as a result the continued successful growth of core checking accounts, and to a lesser degree by the NEB acquisition which closed in November 2016.

Investment management revenue increased by $1.1 million, or 5.2%, due primarily to a 9.29% increase in assets under administration, which grew from $2.7 billion at December 31, 2015 to $2.9 billion at December 31, 2016.

Mortgage banking income increased $1.4 million, or 28.0%, due to increased volumes of loan closings in 2016.

Increases in the cash surrender value of life insurance policies rose in 2016 as the related insurance policy's values continued to increase.

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Gain on the sale of fixed income securities during 2015 reflected the sales of mortgage backed securities and certain pooled trust preferred securities. There were no such gains during 2016.

Loan level derivative income increased due to increased customer demand during the year.

Other noninterest income increased during the year, mainly due to increases in 1031 exchange income, merchant processing income, foreign currency exchange fees, asset based lending fee income, and wire transfer fees. These increases were partially offset by decreased dividend income from the Company's investment in Federal Home Loan Bank stock.

Noninterest Expense    The following table sets forth information regarding noninterest expense for the periods shown:

Table 24 — Noninterest Expense

	Years Ended December 31
					Change
	2016		2015		Amount			%
	(Dollars in thousands)
Salaries and employee benefits	$	108,636	$	105,068	$	3,568		3.4	%
Occupancy and equipment	22,867		23,020		(153		)	(0.7	)%
Data processing and facilities management	4,975		4,631		344			7.4	%
FDIC assessment	3,380		3,979		(599		)	-15.1	%
Advertising	5,202		4,645		557			12.0	%
Consulting	3,486		3,680		(194		)	(5.3	)%
Loss on extinguishment of debt	437		122		315			258.2	%
Loss on sale of fixed income securities	—		1,124		(1,124		)	-100.0	%
Loss on sale of equity securities	32		99		(67		)	-67.7	%
Merger & acquisitions	5,455		10,501		(5,046		)	-48.1	%
Other noninterest expense	37,652		40,269		(2,617		)	(6.5	)%
Total	$	192,122	$	197,138	$	(5,016	)	(2.5	)%

The primary reasons for significant variances in the noninterest expense category shown in the preceding tables are noted below:

The increase in salaries and employee benefits reflects overall increases in the employee base during 2016 (including the NEB acquisition) along with increases in expenses associated with retirement benefits and medical insurance, partially offset by an increase in deferred loan origination costs.

Data processing and facilities management increased during 2016 due to increased transactional volume and continued investments in technology.

FDIC assessment decreased by $599,000 during 2016 due to a decrease in the Company's assessment rate. In June 2016, the Deposit Insurance Fund reserve ratio reached a level that triggered changes to the assessment rate, effective July 1, 2016, which drove the decrease.

Advertising expenses increased during 2016 due to increased television advertising.

Consulting expense decreased during 2016 due to the timing of various initiatives.

Loss on the sale of fixed income securities during 2015 reflected the sales of mortgage backed securities and certain pooled trust preferred securities. There were no such losses during 2016.

The majority of the merger and acquisition expenses in 2016 related to compensation and severance agreements, as well as legal and consulting fees associated with the fourth quarter 2016 closing of the NEB acquisition. Also included in 2016 were expenses incurred relating to the pending acquisition of Island Bancorp, which is expected to close in the second quarter of 2017. Merger and acquisition expenses in 2015 were due to the closing of the Peoples acquisition in February of 2015.

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Other noninterest expenses decreased in 2016 compared to 2015 due primarily to decreases in loan workout costs, the provision for unfunded commitments and other losses and charge-offs, offset by increases in mortgage operations and software maintenance.

Income Taxes    The tax effect of all income and expense transactions is recognized by the Company in each year’s consolidated statements of income, regardless of the year in which the transactions are reported for income tax purposes. The following table sets forth information regarding the Company’s tax provision and applicable tax rates for the periods indicated:

Table 25 — Tax Provision and Applicable Tax Rates

	December 31
	2016			2015			2014
	(Dollars in thousands)
Combined federal and state income tax provisions	$	35,427		$	27,218		$	23,899
Effective income tax rates	31.61		%	29.53		%	28.54		%
Blended Statutory tax rate	40.90		%	40.83		%	40.85		%

The effective income tax rates are lower than the blended statutory tax rate due to certain tax preference assets such as life insurance policies and tax exempt bonds, as well as federal tax credits recognized primarily in connection with the New Markets Tax Credit program and investments in Low Income Housing Project Investments. The increase in the effective income tax rate for 2016 is primarily due to a reduction in the benefits recognized from New Markets Tax Credits.

The Company's subsidiaries have received several awards of tax credit allocation authority under the federal New Markets Tax Credit Program which enable the Company to recognize federal tax credits over a seven year period totaling 39.0% of the total award. The Company recognizes federal tax credits as capital investments are made into its subsidiaries to fund below market interest rate loans to qualifying businesses in low income communities. The following table details the credits recognized in 2016 and remaining tax credit recognition by year associated with this program:

Table 26 — New Markets Tax Credit Recognition Schedule

	Investment		2016		2017		2018		2019		Total Remaining Credits
	(Dollars in thousands)
2010	40,000		2,400		—		—		—		2,400
2012	21,400		1,285		1,285		1,285		—		3,855
2013	44,600		2,675		2,675		2,675		2,675		10,700
Total	$	106,000	$	6,360	$	3,960	$	3,960	$	2,675	$	16,955

The Company invests in various low income housing projects which are real estate limited partnerships that acquire, develop, own and operate low and moderate-income housing developments. As a limited partner in these operating partnerships, the Company will receive tax credits and tax deductions for losses incurred by the underlying properties. The investments are accounted for using the proportional amortization method and will be amortized over various periods through 2032, which represents the period that the tax credits and other tax benefits will be utilized. The total committed investment in these partnerships is $47.4 million, of which $35.2 million has been funded. The Company recognized a net tax benefit of approximately $1.6 million for the 2016 calendar year, and anticipates additional net tax benefits of $14.0 million over the remaining life of the investments from the combination of tax credits and operating losses.

For additional information related to the Company's income taxes see Note 13, "Income Taxes" and Note 14, "Low Income Housing Project Investments" within Notes to the Consolidated Financial Statements included in Item 8 hereof.

Dividends    The Company declared cash dividends of $1.16 per common share in 2016 and $1.04 in 2015. The 2016 and 2015 ratio of dividends paid to earnings was 38.76% and 40.29%, respectively.

Since substantially all of the funds available for the payment of dividends are derived from the Bank, future dividends of the Company will depend on the earnings of the Bank, its financial condition, its need for funds, applicable governmental policies and regulations, and other such matters as the Board of Directors deem appropriate.

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Comparison of 2015 vs. 2014    In February of 2015, the Company completed the Peoples acquisition, acquiring loans of $463.9 million and deposits of $432.3 million, at fair value. As of December 31, 2015, the Company’s total assets were $7.2 billion, which represented an increase of $845.2 million, or 13.3%, as compared to December 31, 2014. Total average assets were $7.0 billion and $6.3 billion in 2015 and 2014, respectively. Total securities of $845.1 million, at December 31, 2015, increased$121.1 million compared to the $724.0 million reported on December 31, 2014. Total loans of $5.5 billion, at December 31, 2015, increased$577.0 million compared to the prior year end. Total deposits of $6.0 billion at December 31, 2015 reflected an increase of $780.2 million, or 15.0%, compared to December 31, 2014. Borrowings decreased by $62.1 million, or 15.3%, during the year ended December 31, 2015. Stockholders’ equity increased by $130.9 million in 2015.

Net income for 2015 was $65.0 million, or $2.50 per diluted share, compared to $59.8 million, or $2.49 per diluted share, in 2014. Return on average assets and return on average common equity were 0.93% and 8.79%, respectively, for 2015 and 0.95% and 9.66%, respectively, for 2014.

On a fully tax-equivalent basis, net interest income was $216.4 million in 2015, a 9.6% increase from 2014 net interest income of $197.4 million. The increase in net interest income was driven by the overall increase in interest earning assets, inclusive of the Peoples acquisition.

Interest expense for the year ended December 31, 2015 remained relatively consistent at $20.6 million compared to $20.4 million recorded in 2014. The total cost of funds decreased three basis points to 0.34% for 2015 as compared to 0.37% for 2014. Average interest-bearing deposits increased $294.5 million, or 7.8%, over the prior year while the cost of these deposits remained consistent at 0.20% and 0.21% in 2015 and 2014, respectively.

The provision for loan losses totaled $1.5 million in 2015, compared with $10.4 million in 2014, a decrease of $8.9 million, reflecting the Company's low level of net charge-offs for the year. Net charge-offs for the year ended December 31, 2015 totaled $775,000, a decrease of $7.8 million from the prior year. The Company’s allowance for loan losses, as a percentage of total loans, was 1.01% at year end 2015, as compared to 1.11% at December 31, 2014.

The primary reasons for significant variances in the noninterest income category between 2015 and 2014 are noted below:

Interchange and ATM fees increased $1.8 million, or 13.5%, as a result of the Peoples acquisition and the continued successful growth of core checking accounts.

Investment management revenue increased by $1.1 million, or 5.6%, for the year ended December 31, 2015, as compared to the same period in 2014. The increase is primarily attributable to an 8.4% increase in assets under administration, which grew from $2.5 billion at December 31, 2014 to $2.7 billion at December 31, 2015.

Mortgage banking income increased $1.8 million, or 52.6%, due to increased volumes of loan closings in 2015.

Increases in the cash surrender value of life insurance policies were higher in 2015 due primarily to the additional policies acquired from Peoples.

The Company recognized gains on life insurance benefits in the amount of $2.0 million during 2014, which represented tax-exempt income to the Company. There were no such gains in 2015.

There was a gain on the sale of fixed income securities during 2015 due to the sales of mortgage backed securities and certain pooled trust preferred securities. There were minimal gains in the prior year.

Loan level derivative income increased due to increased customer demand during the year.

Other noninterest income increased during 2015, mainly due to increases in dividend income from the Company's investment in Federal Home Loan Bank stock, along with increases in asset based lending fee income, merchant processing income and commercial loan late charge fees. These increases were somewhat offset by decreased income on Community Reinvestment Act investments.

The primary reasons for significant variances in the noninterest expense category between 2015 and 2014 are noted below:

The increase in salaries and employee benefits reflects overall increases in the employee base (including the Peoples acquisition) along with increases in expenses associated with incentive programs, retirement benefits, medical insurance, payroll taxes, and commissions.

Occupancy and equipment expense increases were attributable to general expense increases due to the addition of Peoples facilities and increased snow removal costs during 2015.

58

Advertising expenses increased during 2015 due to the scale of the spring campaign initiatives.

Consulting expense increased due to various initiatives.

There was a loss on the sale of fixed income securities during 2015 due to the sales of mortgage backed securities and certain pooled trust preferred securities. Such losses recognized in the prior year were minimal.

Merger and acquisition expenses increased in 2015 due to the closing of the Peoples acquisition in February of 2015.

Other noninterest expenses increased in 2015 compared to 2014 due primarily to increases in the provision for unfunded commitments, amortization of intangibles, software maintenance, legal fees, subscriptions, other losses and charge-offs and mortgage- related expenses, partially offset by a decrease in loan workout costs and director fees.

Risk Management

The Company’s Board of Directors and Executive Management have identified significant risk categories which affect the Company. The risk categories include: credit risk, operations risk, compliance risk, strategic and reputation risk, market risk and liquidity risk. The Board of Directors has approved an Enterprise Risk Management Policy that addresses each category of risk. The Portfolio Risk Manager, Chief Financial Officer, Chief Information Officer, Director of Residential Lending, Compliance Officer, Executive Vice President of Commercial Lending and other members of management provide regular reports to the Board of Directors, identifying key risk issues and plans to address these issues. The Board of Directors will ensure the level of risk is within limits established by both the Risk Management Policy and other previously approved policies.

Credit Risk    Credit risk represents the possibility that the Company's borrowing customers or other counterparties may not repay loans or other contractual obligations according to their terms due to changes in the financial capacity and ability of such borrowing customers or counterparties to meet their obligations. In some cases, the collateral securing the payment of the loans may be sufficient to assure repayment, but in other cases the Company may experience significant credit losses which could have an adverse effect on its operating results. The Company makes various assumptions and judgments about the collectability of its loan portfolio, including the creditworthiness of its borrowers and counterparties and the value of the real estate and other assets serving as collateral for the repayment of loans. For further discussion regarding the credit risk and the credit quality of the Company’s loan portfolio, see Note 4, “Loans, Allowance for Loan Losses and Credit Quality” within Notes to Consolidated Financial Statements included in Item 8 hereof.

Operations Risk    Operations risk is the risk of loss due to human behavior, inadequate or failed internal systems and controls, and external influences such as market conditions, fraudulent activities, disasters and security risks. The potential for operational risk exposure exists throughout the organization. Integral to the Company's performance is the continued efficiency of the Company's technical systems, operational infrastructure, relationships with third parties and the associates and key executives in day-to-day and ongoing operations. Failure by any or all of these resources subjects the Company to risks that may vary in size, scale and scope. This includes but is not limited to operational or technical failures, unlawful tampering with technical systems, terrorist activities, ineffectiveness or exposure due to interruption in third party support, as well as the loss of key individuals or failure on the part of the key individuals to perform properly. The Bank has an Operations Risk Management Committee that meets monthly and reports to the Board quarterly or more frequently if warranted.  The Committee is chaired by the Director of Risk Management and members of the Committee include representatives from Audit, Finance, Technology, Operations, Information Security, Compliance and periodic attendance from business units throughout the organization.  An operations risk management dashboard is updated quarterly and reviewed with the Board.

Compliance Risk    Compliance risk represents the risk of regulatory sanctions or financial loss resulting from the Company’s failure to comply with rules and regulations issued by the various banking agencies, the U.S. Securities and Exchange Commission, the NASDAQ Stock Market, and standards of good banking practice. Activities which may expose the Company to compliance risk include, but are not limited to, those dealing with the prevention of money laundering, privacy and data protection, adherence to all applicable laws and regulations, community reinvestment initiatives and employment and tax matters. Compliance risk is mitigated through the use of written policies and procedures, training of staff, and monitoring of activities for adherence to those procedures. The Bank has a Compliance Committee that meets quarterly and updates the Board and Management quarterly or more frequently if warranted.  The Committee is chaired by the Director of Compliance, and members of the Committee include representatives from each of the principal business lines as well as Enterprise Risk Management, Audit, Finance, Technology and Information Security.

Strategic and Reputation Risk   Strategic and reputation risk represent the risk of loss due to impairment of reputation, failure to fully develop and execute business plans, and failure to assess current and new opportunities and threats in business, markets, and products. Management mitigates strategic and reputational risk through robust annual strategic planning, frequent executive strategic reviews, ongoing competitive and technological observation, rigorous assessment processes of new product,

59

new branch, and new business initiatives, adherence to ethical standards, a philosophy of customer advocacy, a structured process of customer complaint resolution, and ongoing reputational monitoring, crisis management plan, and management tools.

Market Risk     Market risk is the sensitivity of income to changes in interest rates, foreign exchange rates, commodity prices and other market-driven rates or prices. Interest rate sensitivity is the most significant market risk to which the Company is exposed.

Interest rate risk is the sensitivity of income to changes in interest rates. Changes in interest rates, as well as fluctuations in the level and duration of assets and liabilities, affect net interest income, the Company’s primary source of revenue. Interest rate risk arises directly from the Company’s core banking activities. In addition to directly impacting net interest income, changes in the level of interest rates can also affect the amount of loans originated, the timing of cash flows on loans and securities, and the fair value of securities and derivatives, as well as other effects.

The primary goal of interest rate risk management is to control this risk within limits approved by the Board of Directors. These limits reflect the Company’s tolerance for interest rate risk over both short-term and long-term horizons. The Company attempts to control interest rate risk by identifying, quantifying, and where appropriate, hedging its exposure. If assets and liabilities do not re-price simultaneously and in equal volume, the potential for interest rate exposure exists. It is management’s objective to maintain stability in the growth of net interest income through the maintenance of an appropriate mix of interest-earning assets and interest-bearing liabilities and, when necessary, within prudent limits, through the use of off-balance sheet hedging instruments such as interest rate swaps, floors and caps.

The Company quantifies its interest rate exposures using net interest income simulation models, as well as simpler gap analysis, and Economic Value of Equity analysis. Key assumptions in these simulation analyses relate to behavior of interest rates and behavior of the Company’s deposit and loan customers. The most material assumptions relate to the prepayment of mortgage assets (including mortgage loans and mortgage-backed securities) and the life and sensitivity of nonmaturity deposits (e.g. DDA, NOW, savings and money market). In the case of prepayment of mortgage assets, assumptions are derived from published dealer median prepayment estimates for comparable mortgage loans. The risk of prepayment tends to increase when interest rates fall. Since future prepayment behavior of loan customers is uncertain, the resultant interest rate sensitivity of loans cannot be determined exactly.

The Company’s policy on interest-rate risk simulation specifies that for all "core" interest rate scenarios, estimated net interest income for the subsequent one-year period should not decline by more than 10%. The Company's core scenarios for December 31, 2016 included five instantaneous parallel shifts (“shocks”) to market interest rates and four gradual (12 to 24 months) shifts in interest. Additionally, the Company analyzed a separate alternative scenario, labeled "Flat Up 200". In this scenario the short term end of the yield curve increases 200 bps over the first 12 months of the simulation, while the long term end of the curve remains relatively flat.

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The results of all scenarios are outlined in the table below:

Table 27 — Interest Rate Sensitivity

	Years Ended December 31
	2016		2015
	Year 1	Year 2	Year 1	Year 2
Parallel rate shocks (basis points)
-100	(5.7)%	(8.0)%	(2.8)%	(5.7)%
+100	6.0%	10.0%	5.9%	9.4%
+200	11.7%	18.4%	11.6%	17.6%
+300	17.3%	26.8%	17.2%	25.7%
+400	22.9%	35.1%	22.7%	33.6%
Gradual rate shifts (basis points)
-100 over 12 months	(3.1)%	(7.0)%	(1.2)%	(4.2)%
+200 over 12 months	5.5%	16.3%	5.5%	15.7%
+400 over 24 months	5.6%	21.8%	5.5%	21.1%
Flat +500 over 12 months	6.9%	26.0%	7.0%	25.3%
Alternative scenarios
Flat up 200 basis points scenario	5.4%	14.4%	5.6%	14.1%

The Company's policy on interest rate risk simulation also specifies that estimated net interest income for the second year of all “core scenarios” should not decline by more than 15.0%. The Company was within policy limits at December 31, 2016 and 2015. It should be emphasized, however, that the results are dependent on material assumptions such as those discussed above. For instance, asymmetrical rate behavior can have a material impact on the simulation results. If competition for deposits forced the Company to raise rates on those liabilities more quickly than is assumed in the simulation analysis without a corresponding increase in asset yields, net interest income may be negatively impacted. Alternatively, if the Company is able to lag increases in deposit rates as loans re-price upward, net interest income would be positively impacted.

The most significant factors affecting market risk exposure of the Company’s net interest income during the year ended December 31, 2016 were the shape of the U.S. Government securities and interest rate swap yield curve, the level of U.S. prime interest rate and LIBOR rates, and the level of interest rates being offered on long-term fixed rate loans.

The Company manages the interest rate risk inherent in both its loan and borrowing portfolios by utilizing interest rate swap agreements and interest rate caps and floors. An interest rate swap is an agreement whereby one party agrees to pay a floating rate of interest on a notional principal amount in exchange for receiving a fixed rate of interest on the same notional amount for a predetermined period of time from a second party. Interest rate caps and floors are agreements whereby one party agrees to pay a floating rate of interest on a notional principal amount for a predetermined period of time to a second party if certain market interest rate thresholds are realized. The amounts relating to the notional principal amount are not actually exchanged. Additionally, the Company may manage the interest rate risk inherent in its mortgage banking operations by entering into forward sales contracts. Prior to closing and funding certain 1- 4 family residential mortgage loans, an interest rate lock commitment is generally extended to the borrower. During the period from commitment date to closing date, the Company is subject to the risk that market rates of interest may change. If market rates rise, investors generally will pay less to purchase such loans resulting in a reduction in the gain on sale of the loans or, possibly, a loss. In an effort to mitigate such risk, forward delivery sales commitments are executed, under which the Company agrees to deliver whole mortgage loans to various investors. See Note 11, “Derivatives and Hedging Activities” within Notes to Consolidated Financial Statements included in Item 8 hereof for additional information regarding the Company’s Derivative Financial Instruments.

The Company’s earnings are not directly or materially impacted by movements in foreign currency rates or commodity prices. Movements in equity prices may have a modest impact on earnings by affecting the volume of activity or the amount of fees from investment-related business lines.

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Liquidity Risk    Liquidity risk is the risk that the Company will not have the ability to generate adequate amounts of cash in the most economical way for the institution to meet its ongoing obligations to pay deposit withdrawals, service borrowings, and to fund loan commitments. The Company’s primary sources of funds are deposits, borrowings, and the amortization, prepayment and maturities of loans and securities. The Bank utilizes its extensive branch network to access retail customers who provide a stable base of in-market core deposits. These funds are principally comprised of demand deposits, interest checking accounts, savings accounts, and money market accounts. Deposit levels are greatly influenced by interest rates, economic conditions, and competitive factors.

The Company actively manages its liquidity position under the direction of the Asset-Liability Committee of the Bank ("ALCO"). The Company’s primary measure of short-term liquidity is the Total Basic Surplus/Deficit as a percentage of assets. This ratio, which is an analysis of the relationship between liquid assets plus available funding at the FHLB less short-term liabilities relative to total assets, was within policy limits at December 31, 2016. The Total Basic Surplus/Deficit measure is affected primarily by changes in deposits, securities and short-term investments, loans and borrowings. An increase in deposits, without a corresponding increase in nonliquid assets, will improve the Total Basic Surplus/Deficit measure, whereas, an increase in loans, with no increase in deposits, will decrease the measure. Other factors affecting the Total Basic Surplus/Deficit measure include collateral requirements at the FHLB, changes in the securities portfolio, and the mix of deposits.

The Bank is careful to increase deposits without adversely impacting the weighted average cost of those funds. As part of a prudent liquidity risk management practice, the Company maintains various liquidity sources, some of which are only accessed on a contingency basis. Accordingly, management has implemented funding strategies that include FHLB advances, Federal Reserve Bank borrowing capacity and repurchase agreement lines. These nondeposit funds are also viewed as a contingent source of liquidity and, when profitable lending and investment opportunities exist, access to such funds provides a means to grow the balance sheet.

Borrowing capacity at the FHLB and the Federal Reserve is impacted by the amount and type of assets available to be pledged. For example, a prime, one-to-four family, residential loan, may provide 75 cents of borrowing capacity for every $1.00 pledged, whereas, a commercial loan may provide a lower amount. As a result, the Company’s strategic lending decisions can also affect its liquidity position.

The Company can raise additional liquidity through the issuance of equity or unsecured debt privately or publicly. Additionally, the Company is able to enter into additional repurchase agreements or acquire brokered deposits at its discretion. The availability and cost of equity or debt on an unsecured basis is dependent on many factors. Some factors that will impact this source of liquidity are the Company’s financial position, the market environment, and the Company’s credit rating. As such, the Company is careful to monitor the various factors that could impact its ability to raise liquidity through these channels.

The table below shows current and unused liquidity capacity from various sources as of the dates indicated:

Table 28 — Sources of Liquidity

	December 31
	2016					2015
	Outstanding		Additional Borrowing Capacity			Outstanding		Additional Borrowing Capacity
	(Dollars in thousands)
Federal Home Loan Bank borrowings (1)	$	50,819	$	793,118		$	102,080	$	777,452
Federal Reserve Bank of Boston	—		696,085		(3)	—		715,732		(3)
Unpledged securities	—		368,585			—		399,960
Wholesale repurchase agreements	—		—		(4)	—		—		(4)
Customer repurchase agreements	176,913		—		(4)	133,958		—		(4)
Junior subordinated debentures (1)	73,107		—		(4)	73,306		—		(4)
Subordinated debt	34,635		—		(4)	34,589		—		(4)
Brokered deposits (2)	14,724		—		(4)	46,287		—		(4)
	$	350,198	$	1,857,788		$	390,220	$	1,893,144

(1) Amounts shown are inclusive of fair value marks associated with previous acquisitions and net of issuance costs.

(2) Inclusive of $13.7 million and $34.9 million of brokered deposits acquired through participation in the CDARS program as of December 31, 2016 and 2015, respectively.

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(3) Loans with a carrying value of $1.4 billion and $1.3 billion at December 31, 2016 and 2015, respectively, have been pledged to the Federal Reserve Bank of Boston resulting in this additional unused borrowing capacity.

(4) The additional borrowing capacity has not been assessed for these categories.

In addition to policies used for managing operational liquidity, the Board of Directors and the ALCO recognize the need to establish reasonable guidelines for managing through an environment of heightened liquidity risk. Catalysts for elevated liquidity risk can be Bank-specific issues and/or systemic industry-wide events. It is therefore the responsibility of the Board and the ALCO to institute systems and controls to provide advanced detection of potentially significant funding shortages, establish methods for assessing and monitoring risk levels, and institute prompt responses that may alleviate/circumvent a potential liquidity crisis. As such, the Board of Directors and the ALCO have put a Liquidity Contingency Plan in place. The overall goal of this plan is to provide a framework for the Bank to help detect liquidity problems promptly and appropriately address potential liquidity problems in a timely manner. In a period of perceived heightened liquidity risk, the Liquidity Contingency Plan provides for the establishment of a Liquidity Crisis Task Force. The Liquidity Crisis Task Force is responsible for monitoring the potential for a liquidity crisis and for establishing and executing an appropriate response.

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Contractual Obligations, Commitments, Contingencies, and Off-Balance Sheet Financial Instruments

The Company has entered into contractual obligations, commitments, and off-balance sheet financial instruments. The amounts below assume the contractual obligations and commitments will run through the end of the applicable term and, as such, do not include early termination fees or penalties where applicable. The following tables summarize the Company’s contractual obligations, other commitments, contingencies, and off-balance sheet financial instruments at December 31, 2016:

Table 29 — Contractual Obligations, Commitments, Contingencies, and Off-Balance Sheet

Financial Instruments by Maturity

	Payments Due — By Period
Contractual Obligations, Commitments and Contingencies	Total		Less than One Year		One to Three Years		Four to Five Years		After Five Years
	(Dollars in thousands)
FHLB advances (1)	$	50,819	$	50,000	$	—	$	819	$	—
Customer repurchase agreements	176,913		176,913		—		—		—
Junior subordinated debentures (1)	73,198		—		—		—		73,198
Subordinated debt (1)	35,000		—		—		—		35,000
Time certificates of deposits	649,152		430,834		126,817		91,501		—
All other deposits with no maturity (2)	5,763,101		—		—		—		5,763,101
Lease obligations	44,047		9,287		15,251		11,296		8,213
Vendor contracts	43,611		14,359		20,226		9,026		—
Retirement benefit obligations (3)	50,196		948		1,972		2,027		45,249
Total Contractual Obligations	$	6,886,037	$	682,341	$	164,266	$	114,669	$	5,924,761
	Amount of Commitment Expiring — By Period
Off-Balance Sheet Financial Instruments	Total		Less than One Year		One to Three Years		Four to Five Years		After Five Years
	(Dollars in thousands)
Commitments to extend credit (2)	$	2,227,955	$	371,750	$	127,223	$	52,394	$	1,676,588
Standby letters of credit (2)	18,190		15,232		2,958		—		—
Mortgage derivatives - notional value	32,596		32,596		—		—		—
Interest rate swaps - notional value (4)	75,000		—		25,000		50,000		—
Customer-related positions
Foreign exchange contracts - notional value (5)	45,711		45,711		—		—		—
Loan level interest rate swaps - notional value (6)	849,404		30,245		85,479		289,923		443,757
Total Commitments	$	3,248,856	$	495,534	$	240,660	$	392,317	$	2,120,345

(1) The Company has hedged certain short-term borrowings and variable rate junior subordinated debentures, effectively converting the borrowings to a fixed rate. Amounts maturing represent contractual amounts due, inclusive of fair value marks associated with acquired borrowings and does not include any issuance costs, which may be presented on a net basis in the financial statements.

(2) Items with no maturity are presented in the table in the after five year's category.

(3) Retirement benefit obligations include expected contributions to the Company’s frozen pension plan, post retirement plans, and supplemental executive retirement plans. Expected contributions for the pension plan have been included only through plan year July 1, 2016 - June 30, 2017 and reflect only the expected minimum required contribution. Contributions beyond this plan year cannot be quantified as they will be determined based upon the return on the investments in the plan and the discount rate used to quantify the liability. Expected contributions for the post retirement plans and supplemental executive retirement plans include obligations that are payable over the life of the participants.

(4) Interest rate swaps on borrowings and junior subordinated debentures (Bank pays fixed, receives variable). Amounts relating to the notional principal amounts are not actually exchanged.

(5) Offsetting positions to foreign exchange contracts offered to commercial borrowers through the Company’s derivative program. Amounts relating to the notional principal amounts are exchanged.

(6) Offsetting positions to Interest rate swaps offered to commercial borrowers through the Company’s derivative program. Amounts relating to the notional principal amounts are not actually exchanged.

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Impact of Inflation and Changing Prices

The consolidated financial statements and related notes thereto presented elsewhere herein have been prepared in accordance with accounting principles generally accepted in the United States of America which require the measurement of financial position and operating results in terms of historical dollars without considering changes in the relative purchasing power of money over time due to inflation.

The financial nature of the Company’s consolidated financial statements is more clearly affected by changes in interest rates than by inflation. Interest rates do not necessarily fluctuate in the same direction or in the same magnitude as the prices of goods and services. However, inflation does affect the Company because, as prices increase, the money supply grows and interest rates are affected by inflationary expectations. The impact on the Company is a noted increase in the size of loan requests with resulting growth in total assets. In addition, operating expenses may increase without a corresponding increase in productivity. There is no precise method, however, to measure the effects of inflation on the Company’s consolidated financial statements. Accordingly, any examination or analysis of the financial statements should take into consideration the possible effects of inflation.

Critical Accounting Policies and Estimates

Critical accounting policies are defined as those that are reflective of significant judgments and uncertainties, and could potentially result in materially different results under different assumptions and conditions. Management believes that the Company’s most critical accounting policies upon which the Company’s financial condition depends, and which involve the most complex or subjective decisions or assessments, are as follows:

Allowance for Loan Losses   The Company’s allowance for loan losses provides for probable losses based upon evaluations of known and inherent risks in the loan portfolio. Arriving at an appropriate amount of allowance for loan losses involves a high degree of judgment.

The Company makes use of two types of allowances for loan losses: specific and general. A specific allowance may be assigned to a loan that is considered to be impaired. Certain loans are evaluated individually for impairment and are judged to be impaired when management believes it is probable that the Bank will not collect all of the contractual interest and principal payments as scheduled in the loan agreement. Judgment is required with respect to designating a loan as impaired and determining the amount of the required specific allowance. Management’s judgment is based upon its assessment of probability of default, loss given default, and exposure at default. Changes in these estimates could be due to a number of circumstances which may have a direct impact on the provision for loan losses and may result in changes to the amount of allowance.

The general allowance is determined based upon the application of the Company’s methodology for assessing the adequacy of the allowance for loan losses, which considers historical and expected loss factors, loan portfolio composition and other relevant indicators. This methodology involves management’s judgment regarding the application and use of such factors, including the effects of changes to the prevailing economic environment in its estimate of the required amounts of general allowance.

The allowance is increased by provisions for loan losses and by recoveries of loans previously charged-off and is reduced by loans charged-off. For additional discussion of the Company’s methodology of assessing the adequacy of the allowance for loan losses, see Note 4, “Loans, Allowance for Loan Losses and Credit Quality” within Notes to Consolidated Financial Statements included in Item 8 hereof.

Income Taxes   The Company accounts for income taxes using two components of income tax expense, current and deferred.  Current taxes represent the net estimated amount due to or to be received from taxing authorities in the current year.  In estimating accrued taxes, management assesses the relative merits and risks of the appropriate tax treatment of transactions taking into account statutory, judicial, and regulatory guidance in the context of the Company’s tax position. Deferred tax assets and liabilities represent the future effects on income taxes that result from temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, and carry-forwards that exist at the end of a period. Deferred tax assets and liabilities are measured using enacted tax rates and provisions of the enacted tax law and are not discounted to reflect the time-value of money.  The effect of any change in enacted tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. Deferred tax assets are assessed for recoverability and the Company may record a valuation allowance if it believes based on available evidence that it is more likely than not that the deferred tax assets recognized will not be realized before their expiration. The amount of the deferred tax asset recognized and considered realizable could be reduced if projected income is not achieved due to various factors such as unfavorable business conditions. If projected income is not expected to be achieved, the Company may record a valuation allowance to reduce its deferred tax assets to the amount that it believes can be realized in its future tax returns. Additionally, deferred tax assets and liabilities are calculated based on tax rates expected to be in effect in future periods. Previously recorded tax assets and liabilities need to be adjusted when the expected date of the future event is revised based upon current information. The Company may also record an unrecognized tax benefit related to uncertain tax positions taken by the Company on its tax returns for which there is less than a 50% likelihood of being

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recognized upon a tax examination. All movements in unrecognized tax benefits are recognized through the provision for income taxes. Taxes are discussed in more detail in Note 13, “Income Taxes” within Notes to the Consolidated Financial Statements included in Item 8 hereof.

Valuation of Goodwill/Intangible Assets and Analysis for Impairment    The Company has increased its market share through the acquisition of entire financial institutions accounted for under the acquisition method of accounting, as well as from the acquisition of branches (not the entire institution) and other nonbanking entities. For all acquisitions, the Company is required to record assets acquired and liabilities assumed at their fair value, which is an estimate determined by the use of internal or other valuation techniques. Goodwill is evaluated for impairment at least annually, or more often if warranted, using a combined qualitative and quantitative impairment approach. The initial qualitative approach assesses whether the existence of events or circumstances led to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events and circumstances, the Company determines it is more likely than not that the fair value is less than carrying value the two step quantitative impairment test is performed. Step one of the quantitative impairment testing compares book value to the fair value of the reporting unit. If test one is failed, a more detailed analysis is performed, which involves measuring the excess of the fair value of the reporting unit, as determined in step one, over the aggregate fair value of the individual assets, liabilities, and identifiable intangibles as if the reporting unit was being acquired in a business combination. Step one of the impairment testing was passed for all reporting units during 2016. The remainder of the Company’s goodwill relates to acquisitions that are fully integrated into the retail banking operations, which management does not consider to be at risk of failing step one in the near future. The Company’s intangible assets are subject to amortization and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be receivable. If applicable, the Company tests each of the intangibles by comparing the carrying value of the intangible to the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset.

Valuation of Securities and Analysis for Impairment    Securities that the Company has the ability and intent to hold until maturity are classified as securities held-to-maturity and are accounted for using historical cost, adjusted for amortization of premium and accretion of discount. Trading securities are carried at fair value, with unrealized gains and losses recorded in other noninterest income. All other securities are classified as securities available-for-sale and are carried at fair market value. The fair values of securities are based on either quoted market price or third party pricing services. In general, the third-party pricing services employ various methodologies, including but not limited to, broker quotes and proprietary models. Management does not typically adjust the prices received from third-party pricing services. Depending upon the type of security, management employs various techniques to analyze the pricing it receives from third-parties, such as reviewing model inputs, reviewing comparable trades, analyzing changes in market yields and, in certain instances, reviewing the underlying collateral of the security. Management reviews changes in fair values from period to period and performs testing to ensure that the prices received from the third parties are consistent with their expectation of the market.

Management determines if the market for a security is active primarily based upon the frequency of which the security, or similar securities, are traded. For securities which are determined to have an inactive market, fair value models are calibrated and to the extent possible, significant inputs are back tested on a quarterly basis. The third-party service provider performs calibration and testing of the models by comparing anticipated inputs to actual results, on a quarterly basis. Unrealized gains and losses on securities available-for-sale are reported, on an after-tax basis, as a separate component of stockholders’ equity in accumulated other comprehensive income.

On a quarterly basis, the Company makes an assessment to determine whether there have been any events or circumstances to indicate that a security for which there is an unrealized loss is impaired on an other-than-temporary basis. The Company considers many factors, including the severity and duration of the impairment; the Company’s intent to sell the security, or whether it is more likely than not that the Company will be required to sell the debt security before its anticipated recovery, recent events specific to the issuer or industry; and for debt securities, external credit ratings and recent downgrades. The term other-than-temporary is not intended to indicate that the decline is permanent. It indicates that the prospects for near-term recovery are not necessarily favorable or that there is a lack of evidence to support fair values greater than or equal to the carrying value of the investment. Estimates of the expected cash flows for investment securities that potentially may be deemed to have OTTI begin with the contractual cash flows of the security. This amount is then reduced by an estimate of probable credit losses associated with the security. When estimating the extent of probable losses on the securities, management considers the strength of the underlying issuers of the securities. Indicators of diminished credit quality of the issuers include defaults, interest deferrals, or “payments in kind.” Numerous factors are considered when estimating the ultimate realizability of the cash flow for each individual security. The resulting estimate of cash flows after considering credit is then subject to a present value computation using a discount rate equal to the current yield used to accrete the beneficial interest or, the effective interest rate implicit in the security at the date of acquisition. If the present value of the estimated cash flows is less than the current amortized cost basis, an OTTI is considered to have occurred and the security is written down to the fair value indicated by the cash flows analysis. Any portion of decline in fair value considered to be an OTTI charge that is not due to the reduction in cash flows due to credit is considered

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a decline due to other factors such as liquidity or interest rates and accordingly is recorded in other comprehensive income. Any portion of the decline which is related to credit is recorded in earnings.

Recent Accounting Developments

See Note 1, “Summary of Significant Accounting Policies” within Notes to Consolidated Financial Statements included in Item 8 hereof.

ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Risk Management” in Item 7 hereof.

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ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders of

Independent Bank Corp.:

We have audited the accompanying consolidated balance sheets of Independent Bank Corp. (the “Company”) as of December 31, 2016 and 2015, and the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2016. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Independent Bank Corp. at December 31, 2016 and 2015, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2016, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of December 31, 2016, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 28, 2017 expressed an unqualified opinion thereon.

Boston, Massachusetts

February 28, 2017

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INDEPENDENT BANK CORP.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

	December 31
	2016			2015
Assets
Cash and due from banks	$	97,196		$	84,813
Interest-earning deposits with banks	191,899			190,952
Securities
Securities - trading	804			356
Securities - available for sale	363,644			367,249
Securities - held to maturity (fair value $485,650 and $478,749)	487,076			477,507
Total securities	851,524			845,112
Loans held for sale (at fair value)	6,139			5,990
Loans
Commercial and industrial	902,053			843,276
Commercial real estate	3,010,798			2,653,434
Commercial construction	320,391			373,368
Small business	122,726			96,246
Residential real estate	644,426			638,606
Home equity - first position	577,006			543,092
Home equity - subordinate positions	411,141			384,711
Other consumer	11,064			14,988
Total loans	5,999,605			5,547,721
Less: allowance for loan losses	(61,566		)	(55,825		)
Net loans	5,938,039			5,491,896
Federal Home Loan Bank stock	11,497			14,431
Bank premises and equipment, net	78,480			75,663
Goodwill	221,526			201,083
Other intangible assets	9,848			11,826
Cash surrender value of life insurance policies	144,503			134,627
Other real estate owned and other foreclosed assets	4,173			2,159
Other assets	154,551			150,917
Total assets	$	7,709,375		$	7,209,469
Liabilities and Stockholders' Equity
Deposits
Demand deposits	$	2,057,086		$	1,846,593
Savings and interest checking accounts	2,469,237			2,370,141
Money market	1,236,778			1,089,139
Time certificates of deposit of $100,000 and over	266,190			274,701
Other time certificates of deposits	382,962			410,129
Total deposits	6,412,253			5,990,703
Borrowings
Federal Home Loan Bank borrowings	50,819			102,080
Customer repurchase agreements and other short-term borrowings	176,913			133,958
Junior subordinated debentures	73,107			73,306
Subordinated debentures (less unamortized debt issuance costs of $365 and $376)	34,635			34,589
Total borrowings	335,474			343,933
Other liabilities	96,958			103,370
Total liabilities	6,844,685			6,438,006
Commitments and contingencies
Stockholders' Equity
Preferred stock, $.01 par value. authorized: 1,000,000 shares, outstanding: none	—			—
Common stock, $.01 par value. authorized: 75,000,000 shares, issued and outstanding: 27,005,813 shares at December 31, 2016 and 26,236,352 shares at December 31, 2015 (includes 212,698 and 230,900 shares of unvested participating restricted stock awards, respectively)	268			260
Value of shares held in rabbi trust at cost: 170,036 shares at December 31, 2016 and 173,378 shares at December 31, 2015	(4,277		)	(3,958		)
Deferred compensation obligation	4,277			3,958
Additional paid in capital	451,664			405,486
Retained earnings	414,095			368,169
Accumulated other comprehensive loss, net of tax	(1,337		)	(2,452		)
Total stockholders' equity	864,690			771,463
Total liabilities and stockholders' equity	$	7,709,375		$	7,209,469

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

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INDEPENDENT BANK CORP.

CONSOLIDATED STATEMENTS OF INCOME

	Years Ended December 31
	2016		2015		2014
	(Dollars in thousands, except per share data)
Interest income
Interest and fees on loans	$	224,244	$	214,724	$	197,021
Taxable interest and dividends on securities	20,851		20,120		18,610
Nontaxable interest and dividends on securities	117		127		144
Interest on loans held for sale	235		225		405
Interest on federal funds sold and short-term investments	1,190		349		279
Total interest and dividend income	246,637		235,545		216,459
Interest expense
Interest on deposits	11,140		11,576		11,039
Interest on borrowings	7,653		9,041		9,378
Total interest expense	18,793		20,617		20,417
Net interest income	227,844		214,928		196,042
Provision for loan losses	6,075		1,500		10,403
Net interest income after provision for loan losses	221,769		213,428		185,639
Noninterest income
Deposit account fees	18,085		18,078		18,065
Interchange and ATM fees	16,210		14,728		12,975
Investment management	21,809		20,735		19,642
Mortgage banking income	6,607		5,163		3,384
Increase in cash surrender value of life insurance policies	4,089		3,692		3,128
Gain on life insurance benefits	—		—		1,964
Gain on sale of equity securities	6		20		91
Gain on sale of fixed income securities	—		798		121
Loan level derivative income	6,155		3,830		2,477
Other noninterest income	9,467		8,844		8,096
Total noninterest income	82,428		75,888		69,943
Noninterest expenses
Salaries and employee benefits	108,636		105,068		94,044
Occupancy and equipment expenses	22,867		23,020		21,820
Data processing & facilities management	4,975		4,631		4,765
FDIC assessment	3,380		3,979		3,770
Advertising expense	5,202		4,645		3,859
Consulting expense	3,486		3,680		2,923
Loss on extinguishment of debt	437		122		—
Loss on sale of fixed income securities	—		1,124		21
Loss on sale of equity securities	32		99		—
Merger and acquisition expense	5,455		10,501		1,339
Other noninterest expenses	37,652		40,269		39,297
Total noninterest expenses	192,122		197,138		171,838
Income before income taxes	112,075		92,178		83,744
Provision for income taxes	35,427		27,218		23,899
Net Income	$	76,648	$	64,960	$	59,845
Basic earnings per share	$	2.90	$	2.51	$	2.50
Diluted earnings per share	$	2.90	$	2.50	$	2.49
Weighted average common shares (basic)	26,404,071		25,891,382		23,899,562
Common share equivalents	51,847		68,566		93,815
Weighted average common shares (diluted)	26,455,918		25,959,948		23,993,377
Cash dividends declared per common share	$	1.16	$	1.04	$	0.96

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

70

INDEPENDENT BANK CORP.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Years Ended December 31
	2016			2015			2014
	(Dollars in thousands)
Net income	$	76,648		$	64,960		$	59,845
Other comprehensive income (loss), net of tax
Net change in fair value of securities available for sale	(1,133		)	(2,083		)	5,412
Net change in fair value of cash flow hedges	2,170			1,199			2,256
Net change in other comprehensive income for defined benefit postretirement plans	78			564			(2,366		)
Total other comprehensive income (loss)	1,115			(320		)	5,302
Total comprehensive income	$	77,763		$	64,640		$	65,147

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

71

INDEPENDENT BANK CORP.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

	Common Stock Outstanding	Common Stock		Value of Shares Held in Rabbi Trust at Cost			Deferred Compensation Obligation		Additional Paid in Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Total
	(Dollars in thousands, except per share data)
Balance December 31, 2013	23,805,984	$	235	$	(3,404	)	$	3,404	$	305,179		$	293,560		$	(7,434	)	$	591,540
Net income	—	—		—			—		—			59,845			—			59,845
Other comprehensive income	—	—		—			—		—			—			5,302			5,302
Common dividend declared ($0.96 per share)	—	—		—			—		—			(22,961		)	—			(22,961		)
Proceeds from exercise of stock options, net of cash paid	91,171	1		—			—		2,332			—			—			2,333
Tax benefit related to equity award activity	—	—		—			—		704			—			—			704
Stock based compensation	—	—		—			—		2,712			—			—			2,712
Restricted stock awards issued, net of awards surrendered	59,675	1		—			—		(642		)	—			—			(641		)
Shares issued under direct stock purchase plan	41,908	—		—			—		1,555			—			—			1,555
Deferred compensation and other retirement benefit obligations	—	—		(262		)	262		—			—			—			—
Tax benefit related to deferred compensation distributions	—	—		—			—		138			—			—			138
Balance December 31, 2014	23,998,738	$	237	$	(3,666	)	$	3,666	$	311,978		$	330,444		$	(2,132	)	$	640,527
Net income	—	—		—			—		—			64,960			—			64,960
Other comprehensive loss	—	—		—			—		—			—			(320		)	(320		)
Common dividend declared ($1.04 per share)	—	—		—			—		—			(27,235		)	—			(27,235		)
Common stock issued for acquisition	2,052,137	21		—			—		86,394			—			—			86,415
Proceeds from exercise of stock options	100,794	1		—			—		1,366			—			—			1,367
Tax benefit related to equity award activity	—	—		—			—		1,042			—			—			1,042
Stock based compensation	—	—		—			—		2,490			—			—			2,490
Restricted stock awards issued, net of awards surrendered	23,851	1		—			—		(658		)	—			—			(657		)
Shares issued under direct stock purchase plan	60,832	—		—			—		2,695			—			—			2,695
Deferred compensation and other retirement benefit obligations	—	—		(292		)	292					—			—			—
Tax benefit related to deferred compensation distributions	—	—		—			—		179			—			—			179
Balance December 31, 2015	26,236,352	$	260	$	(3,958	)	$	3,958	$	405,486		$	368,169		$	(2,452	)	$	771,463
Net income	—	—		—			—		—			76,648			—			76,648
Other comprehensive income	—	—		—			—		—			—			1,115			1,115
Common dividend declared ($1.16 per share)	—	—		—			—		—			(30,722		)	—			(30,722		)
Common stock issued for acquisition	672,665	7		—			—		40,723			—			—			40,730
Proceeds from exercise of stock options, net of cash paid	13,449	—		—			—		201			—			—			201
Tax benefit related to equity award activity	—	—		—			—		476			—			—			476
Stock based compensation	—	—		—			—		2,965			—			—			2,965
Restricted stock awards issued, net of awards surrendered	33,432	1		—			—		(697		)	—			—			(696		)
Shares issued under direct stock purchase plan	49,915	—		—			—		2,323			—			—			2,323
Deferred compensation and other retirement benefit obligations	—	—		(319		)	319		—			—			—			—
Tax benefit related to deferred compensation distributions	—	—		—			—		187			—			—			187
Balance December 31, 2016	27,005,813	$	268	$	(4,277	)	$	4,277	$	451,664		$	414,095		$	(1,337	)	$	864,690

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

72

INDEPENDENT BANK CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Years Ended December 31
	2016			2015			2014
	(Dollars in thousands)
Cash flow from operating activities
Net income	$	76,648		$	64,960		$	59,845
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	14,354			12,307			12,108
Provision for loan losses	6,075			1,500			10,403
Deferred income tax expense (benefit)	(5		)	10,220			2,840
Net (gain) loss on sale of securities	26			405			(191		)
Net loss on bank premises and equipment	114			221			469
Loss on extinguishment of debt	437			122			—
Loss on termination of derivatives	—			—			1,122
Net loss on other real estate owned and foreclosed assets	29			1,152			723
Realized gain on sale leaseback transaction	(1,034		)	(1,034		)	(1,034		)
Stock based compensation	2,965			2,490			2,712
Excess tax benefit related to equity award activity	(476		)	(1,042		)	(704		)
Increase in cash surrender value of life insurance policies	(4,089		)	(3,692		)	(3,128		)
Gain on life insurance benefits	—			—			(1,964		)
Change in fair value on loans held for sale	(87		)	22			(18		)
Net change in:
Trading assets	(448		)	(356		)	—
Loans held for sale	(62		)	876			2,012
Other assets	7,627			3,842			(1,907		)
Other liabilities	(8,738		)	(2,450		)	7,017
Total adjustments	16,688			24,583			30,460
Net cash provided by operating activities	93,336			89,543			90,305
Cash flows used in investing activities
Proceeds from sales of securities available for sale	618			14,199			5,438
Proceeds from maturities and principal repayments of securities available for sale	69,775			78,497			47,720
Purchases of securities available for sale	(69,671		)	(73,064		)	(37,047		)
Proceeds from maturities and principal repayments of securities held to maturity	90,991			60,168			44,710
Purchases of securities held to maturity	(100,198		)	(162,021		)	(69,544		)
Redemption of Federal Home Loan Bank stock	5,229			23,054			6,693
Investments in low income housing projects	(7,626		)	(15,055		)	(16,452		)
Purchases of life insurance policies	(163		)	(162		)	(10,161		)
Proceeds from life insurance policies	—			—			6,310
Net increase in loans	(227,838		)	(114,550		)	(266,961		)
Cash provided by (used in) business combinations	8,668			(13,448		)	—
Purchases of bank premises and equipment	(10,395		)	(10,488		)	(7,678		)
Proceeds from the sale of bank premises and equipment	345			1,233			1,219
Payments on early termination of hedging relationship	—			—			(1,122		)
Proceeds from the sale of other real estate owned and foreclosed assets	1,583			7,667			7,458
Net payments relating to other real estate owned and foreclosed assets	(204		)	(1,571		)	(3,255		)
Net cash used in investing activities	(238,886		)	(205,541		)	(292,672		)
Cash flows provided by financing activities
Net decrease in time deposits	(104,803		)	(80,726		)	(94,008		)
Net increase in other deposits	350,739			428,713			318,056
Net repayments of short-term Federal Home Loan Bank borrowings	(37,000		)	(10,000		)	(65,000		)
Repayments of long-term Federal Home Loan Bank borrowings	(65,791		)	(9,000		)	(5,000		)
Net increase (decrease) in customer repurchase agreements	42,955			(13,932		)	(1,398		)
Repayments of wholesale repurchase agreements	—			(50,000		)	—
Net decrease in other short term borrowings	—			—			(5,000		)
Proceeds from issuance of (repayments of) subordinated debentures	—			(30,000		)	35,000
Net proceeds from exercise of stock options	201			1,367			2,333

73

Restricted stock awards issued, net of awards surrendered	(696		)	(657		)	(641		)
Excess tax benefit from stock based compensation	476			1,042			704
Tax benefit from deferred compensation distribution	187			179			138
Proceeds from shares issued under direct stock purchase plan	2,323			2,695			1,555
Common dividends paid	(29,711		)	(26,172		)	(22,443		)
Net cash provided by financing activities	158,880			213,509			164,296
Net increase (decrease) in cash and cash equivalents	13,330			97,511			(38,071		)
Cash and cash equivalents at beginning of year	275,765			178,254			216,325
Cash and cash equivalents at end of period	$	289,095		$	275,765		$	178,254
Cash paid during the year for
Interest on deposits and borrowings	$	18,963		$	20,773		$	20,257
Income taxes	$	33,473		$	11,841		$	14,547
Supplemental schedule of noncash investing and financing activities
Transfer of loans to other real estate owned and foreclosed assets	$	1,322		$	1,522		$	5,248
Other net transfers to other real estate owned	$	—		$	142		$	—
Net increase in capital commitments relating to low income housing project investments	$	5,180		$	1,658		$	38,839
In conjunction with the Company's acquisitions, assets were acquired and liabilities were assumed as follows
Common stock issued for acquisition	$	40,730		$	86,415		$	—
Fair value of assets acquired, net of cash acquired	$	266,242		$	598,376		$	—
Fair value of liabilities assumed	$	234,180		$	498,513		$	—

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

74

INDEPENDENT BANK CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

Independent Bank Corp. (the “Company”) is a bank holding company whose principal subsidiary is Rockland Trust Company (“Rockland Trust” or the “Bank”). Rockland Trust is a state-chartered commercial bank, which operates eighty full service and three limited service retail branches, eleven commercial banking centers, five investment management offices and one mortgage lending center, all of which are located in Eastern Massachusetts, including Cape Cod, with the exception of an investment management group/commercial lending office located in Providence, Rhode Island. Rockland Trust deposits are insured by the Federal Deposit Insurance Corporation, subject to regulatory limits. The Company’s primary source of income is from providing loans to individuals and small-to-medium sized businesses in its market area. Rockland Trust is a community-oriented commercial bank, and the community banking business is the Company's only reportable operating segment.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company, the Bank and other wholly-owned subsidiaries, except subsidiaries that are not deemed necessary to be consolidated. All significant intercompany balances and transactions have been eliminated in consolidation.

The Company determines whether it has a controlling financial interest in an entity by first evaluating whether the entity is a voting interest entity or a variable interest entity under GAAP. Voting interest entities are entities in which the total equity investment at risk is sufficient to enable the entity to finance itself independently and provides the equity holders with the obligation to absorb losses, the right to receive residual returns and the right to make decisions about the entity’s activities. The Company would consolidate voting interest entities in which it has all, or at least a majority of, the voting interest. As defined in applicable accounting standards, variable interest entities (“VIEs”) are entities that lack one or more of the characteristics of a voting interest entity. A controlling financial interest in a VIE is present when the Company has both the power and ability to direct the activities of the VIE that most significantly impact the VIE's economic performance and an obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. 

The Company also owns the common stock of various trusts which have issued trust preferred securities. These trusts are VIEs in which the Company is not the primary beneficiary and, therefore, are not consolidated. The trust's only assets are junior subordinated debentures issued by the Company, which were acquired by the trust using the proceeds from the issuance of the trust preferred securities and common stock. The junior subordinated debentures are included in long-term debt and the Company’s equity interest in the trust is included in other assets in the accompanying Consolidated Balance Sheets. Interest expense on the junior subordinated debentures is reported in interest expense on long-term debt in the accompanying Consolidated Statements of Income.

Reclassification

Certain previously reported amounts have been reclassified to conform to the current year’s presentation.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could vary from these estimates. Material estimates that are particularly susceptible to significant changes in the near-term relate to the determination of the allowance for loan losses, income taxes, valuation and potential impairment of investment securities, other-than-temporary impairment (“OTTI”) of certain investment securities, as well as valuation of goodwill and other intangibles and their respective analyses of impairment.

75

Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Significant Concentrations of Credit Risk

The vast majority of the Bank’s lending activities are conducted in the Commonwealth of Massachusetts and Rhode Island. The Bank originates commercial and industrial loans, commercial and residential real estate loans, including construction loans, small business loans, home equity loans, and other consumer loans for its portfolio. The Bank considers a concentration of credit to a particular industry to exist when the aggregate credit exposure which includes direct, indirect or contingent obligations to a borrower, an affiliated group of borrowers or a nonaffiliated group of borrowers engaged in one industry, exceeds 10% of the Bank’s loan portfolio.

Loans originated by the Bank to lessors of nonresidential buildings represented 15.4% and 15.0% of the total loan portfolio as of December 31, 2016 and 2015, respectively. Within this concentration category the Company believes it is well diversified among collateral property types and tenant industries.

Cash and Cash Equivalents

For purposes of reporting cash flows, cash and cash equivalents may include cash on hand, amounts due from banks, inclusive of interest-earning deposits held at banks, and federal funds sold. Generally, federal funds are sold for up to two week periods.

Securities

Investment securities are classified at the time of purchase as “available for sale,” “held to maturity,” or “trading.” Classification is constantly re-evaluated for consistency with corporate goals and objectives. Trading securities are recorded at fair value with subsequent changes in fair value recorded in earnings. Debt securities that management has the positive intent and ability to hold to maturity are classified as “held to maturity” and recorded at amortized cost. Securities not classified as held to maturity or trading, including equity securities with readily determinable fair values, are classified as “available for sale” and recorded at fair value, with changes in fair value excluded from earnings and reported in other comprehensive income, net of related tax. Purchase premiums and discounts are recognized in interest income, using the interest method, to arrive at periodic interest income at a constant effective yield, thereby reflecting the securities market yield. Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method.

Declines in the fair value of held to maturity and available for sale securities below their amortized cost deemed to be OTTI are written down to fair value as determined by a cash flow analysis. To the extent the estimated cash flows do not support the amortized cost, the deficiency is considered to be due to credit loss and recognized in earnings. Unless the Company intends to sell the security, or if it is more likely than not that the Company will be required to sell the debt security before its anticipated recovery, the remainder of the OTTI charge is considered to be due to other factors, such as liquidity or interest rates, and thus is not recognized in earnings, but rather through other comprehensive income, net of related tax. The Company evaluates individual securities that have fair values below cost for six months or longer, or for a shorter period of time if considered appropriate by management, to determine if the decline in fair value is other-than-temporary. Consideration is given to the obligor of the security, whether the security is guaranteed, whether there is a projected adverse change in cash flows, the liquidity of the security, the type of security, the capital position of security issuers, and payment history of the security, amongst other factors when evaluating such securities.

Loans Held for Sale

The Bank primarily classifies new residential real estate mortgage loans as held for sale based on intent, which is determined when loans are underwritten. Residential real estate mortgage loans not designated as held for sale are retained based upon available liquidity, for interest rate risk management and other business purposes.

The Company has elected the fair value option to account for originated closed loans intended for sale. Accordingly, changes in fair value relating to loans intended for sale are recorded in earnings and are offset by changes in fair value relating to interest rate lock commitments and forward sales commitments. Gains and losses on residential loan sales (sales proceeds minus carrying amount) are recorded in mortgage banking income. Upfront costs and fees related to items for which the fair value option is elected are recognized in earnings as incurred and not deferred.

76

Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Loans

Loans are carried at the principal amounts outstanding, or amortized acquired fair value in the case of acquired loans, adjusted by partial charge-offs and net of deferred loan costs or fees. For originated loans, loan fees and certain direct origination costs are deferred and amortized into interest income over the expected term of the loan using the level-yield method.  When a loan is paid off, the unamortized portion is recognized in interest income. Interest income on loans is accrued based upon the daily principal amount outstanding except for loans on nonaccrual status. For acquired loans which did not show signs of credit deterioration at acquisition, interest income is also accrued based upon the daily principal amount outstanding and is then further adjusted by the accretion of any discount or amortization of any premium associated with the loan.

 As a general rule, loans more than 90 days past due with respect to principal or interest are classified as nonaccrual loans, or sooner if management considers such action to be prudent. However, loans that are more than 90 days past due may be kept on an accruing status if the loan is well secured and/or in the process of collection. The Company may also put a junior lien mortgage on nonaccrual status as a result of delinquency with respect to the first position, which is held by another financial institution, while the junior lien is currently performing. Income accruals are suspended on all nonaccrual loans and all previously accrued and uncollected interest is reversed against current income. A loan remains on nonaccrual status until it becomes current with respect to principal and interest (and in certain instances remains current for up to six months), the loan is liquidated, or when the loan is determined to be uncollectible and is charged-off against the allowance for loan losses. When doubt exists as to the collectability of a loan, any payments received are applied to reduce the recorded investment in the asset to the extent necessary to eliminate such doubt. For all loan portfolios, a charge-off occurs when the Company determines that a specific loan, or portion thereof, is uncollectible.  This determination is made based on management's review of specific facts and circumstances of the individual loan, including assessing the viability of the customer’s business or project as a going concern, the expected cash flows to repay the loan, the value of the collateral and the ability and willingness of any guarantors to perform. 

In cases where a borrower experiences financial difficulties and the Company makes certain concessionary modifications to contractual terms, the loan is classified as a troubled debt restructuring (“TDR”). Modifications may include adjustments to interest rates, extensions of maturity, consumer loans where the borrower's obligations have been effectively discharged through Chapter 7 Bankruptcy and the borrower has not reaffirmed the debt to the Bank, and other actions intended to minimize economic loss and avoid foreclosure or repossession of collateral. The recorded investment of loans classified as TDRs is adjusted to reflect the changes in value, if any, resulting from the granting of a concession. Nonaccrual loans that are restructured remain on nonaccrual for a period of six months to demonstrate that the borrower can meet the restructured terms. If the restructured loan is on accrual status prior to being modified, it is reviewed to determine if the modified loan should remain on accrual status. If the borrower’s ability to meet the revised payment schedule is not reasonably assured, the loan is classified as a nonaccrual loan. Loans classified as TDRs remain classified as such for the life of the loan, except in limited circumstances, when it is determined that the borrower is performing under the modified terms and the restructuring agreement specified an interest rate greater than or equal to an acceptable market rate for a comparable new loan at the time of the restructuring.

Acquired loans

All acquired loans are recorded at fair value with no carryover of the allowance for loan losses. At acquisition, loans are also reviewed to determine if the loan has evidence of deterioration in credit quality and to review if it is probable, at acquisition, that all contractually required payments will not be collected. Such loans are deemed to be purchased credit impaired ("PCI") loans. Under the accounting model for PCI loans, the excess of cash flows expected to be collected over the carrying amount of the loans, referred to as the "accretable yield", is accreted into interest income over the life of the loans using the effective yield method. Accordingly, PCI loans are not subject to classification as nonaccrual in the same manner as originated loans. Rather, acquired loans are generally considered to be accruing loans because their interest income relates to the accretable yield recognized and not to contractual interest payments at the loan level. The difference between contractually required principal and interest payments and the cash flows expected to be collected, referred to as the "nonaccretable difference", includes estimates of both the impact of prepayments and future credit losses expected to be incurred over the life of the loans.

The estimate of cash flows expected to be collected is regularly re-assessed subsequent to acquisition. These re-assessments involve updates, as necessary, of the key assumptions and estimates used in the initial estimate of fair value. Generally speaking, expected cash flows are affected by:

77

Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

• Changes in the expected principal and interest payments over the estimated life - Changes in expected cash flows may be driven by the credit outlook and actions taken with borrowers. Changes in expected future cash flows resulting from loan modifications are included in the assessment of expected cash flows.

• Change in prepayment assumptions - Prepayments affect the estimated life of the loans, which may change the amount of interest income expected to be collected.

• Change in interest rate indices for variable rate loans - Expected future cash flows are based, as applicable, on the variable rates in effect at the time of the assessment of expected cash flows.

A decrease in expected cash flows in subsequent periods may indicate that the loan is impaired which would likely require the recognition of a charge-off against the allowance for loan losses or an establishment of a specific reserve. An increase in expected cash flows in subsequent periods serves, first, to reduce any previously established specific reserve by the increase in the present value of cash flows expected to be collected. Any increase above the previously established specific reserve results in a recalculation of the amount of accretable yield for the loan. The adjustment of accretable yield due to an increase in expected cash flows is accounted for as a change in estimate. The additional cash flows expected to be collected are reclassified from the nonaccretable difference to the accretable yield, and the amount of periodic accretion is adjusted accordingly over the remaining life of the loans.

A PCI loan may be resolved either through receipt of payment (in full or in part) from the borrower, the sale of the loan to a third party, or foreclosure of the collateral. In the event of a sale of the loan, a gain or loss on sale would be recognized and reported within noninterest income based on the difference between the sales proceeds and the carrying amount of the loan. For PCI loans accounted for on an individual loan basis and resolved directly with the borrower, any amount received from resolution in excess of the carrying amount of the loan is recognized and reported within interest income.

A refinancing or modification of a PCI loan accounted for individually is assessed to determine whether the modification represents a TDR. If the loan is considered to be a TDR, it will be included in the total impaired loans reported by the Company. The loan will continue to recognize interest income based upon the excess of cash flows expected to be collected over the carrying amount of the loan.

Allowance for Loan Losses

The allowance for loan losses is established based upon the level of estimated probable losses in the current loan portfolio. Loan losses are charged against the allowance when management believes the collectability of a loan balance is doubtful. Subsequent recoveries, if any, are credited to the allowance.

The allowance for loan losses is allocated to loan types using both a formula-based approach applied to groups of loans and an analysis of certain individual loans for impairment. The formula-based approach emphasizes loss factors derived from actual historical portfolio loss rates, which are combined with an assessment of certain qualitative factors to determine the allowance amounts allocated to the various loan categories. Allowance amounts are determined based on an estimate of the historical average annual percentage rate of loan loss for each loan category, an estimate of the incurred loss emergence and confirmation period for each loan category, and certain qualitative risk factors considered in the computation of the allowance for loan losses.

The qualitative risk factors impacting the inherent risk of loss within the portfolio include the following:

• National and local economic and business conditions

• Level and trend of delinquencies

• Level and trend of charge-offs and recoveries

• Trends in volume and terms of loans

• Risk selection, lending policy and underwriting standards

• Experience and depth of management

• Banking industry conditions and other external factors

• Concentration risk

The formula-based approach evaluates groups of loans with common characteristics, which consist of similar loan types with similar terms and conditions, to determine the appropriate allocation within each portfolio section. This approach incorporates qualitative adjustments based upon management’s assessment of various market and portfolio specific risk factors

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into its formula-based estimate. Due to the imprecise nature of the loan loss estimation process and ever changing conditions, the qualitative risk attributes may not adequately capture amounts of incurred loss in the formula-based loan loss components used to determine the Bank’s analysis of the appropriateness of the allowance for loan losses.

The Bank evaluates certain loans within the commercial and industrial, commercial real estate, commercial construction and small business portfolios individually for specific impairment. A loan is considered impaired when, based on current information and events, it is probable that the Bank will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, contractual interest rates and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Loans are selected for evaluation based upon a change in internal risk rating, occurrence of delinquency, loan classification, troubled debt restructuring or nonaccrual status. A specific allowance amount is allocated to an individual loan when such loan has been deemed impaired and when the amount of the probable loss is able to be estimated. Estimates of loss may be determined by the present value of anticipated future cash flows, the loan’s observable fair market value, or the fair value of the collateral, if the loan is collateral dependent. However, for collateral dependent loans, the amount of the recorded investment in a loan that exceeds the fair value of the collateral less costs to sell is charged-off against the allowance for loan losses in lieu of an allocation of a specific allowance amount when such an amount has been identified definitively as uncollectible.

Large groups of small-balance homogeneous loans such as the residential real estate, residential construction, home equity and other consumer portfolios are collectively evaluated for impairment. As such, the Bank does not typically identify individual loans within these groupings as impaired loans for impairment evaluation and disclosure. However, the Bank evaluates all TDRs for impairment on an individual loan basis regardless of loan type.

In the ordinary course of business, the Bank enters into commitments to extend credit, commercial letters of credit, and standby letters of credit. Such financial instruments are recorded in the financial statements when they become payable. The credit risk associated with these commitments is evaluated in a manner similar to the allowance for loan losses. The reserve for unfunded lending commitments is included in other liabilities in the balance sheet. At December 31, 2016 and 2015, the reserve for unfunded loan commitments was $954,000 and $1.4 million, respectively.

Transfers and Servicing of Financial Assets

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

Loans held for sale are generally sold with servicing rights released, however if rights are retained, servicing assets are recognized as separate assets. Servicing rights are originally recorded at fair value within other assets, but subsequently are amortized in proportion to and over the period of estimated net servicing income, and are assessed for impairment at each reporting date. Fair value is based on market prices for comparable mortgage servicing contracts, when available, or alternatively, is based on a valuation model that calculates the present value of estimated future net servicing income. The valuation model incorporates assumptions that market participants would use in estimating future net servicing income, such as the cost to service, the discount rate, the custodial earnings rate, an inflation rate, ancillary income, prepayment speeds, default rates and losses. Impairment is determined by stratifying the rights based on predominant characteristics, such as interest rate, loan type and investor type. Impairment is recognized through a valuation allowance, to the extent that fair value is less than the capitalized amount. If the Company later determines that all or a portion of the impairment no longer exists, a reduction of the allowance may be recorded as an increase to income.

Servicing fee income is recorded for fees earned for servicing loans for investors. The fees are based on a contractual percentage of the outstanding principal or a fixed amount per loan, and are recorded as income when earned. The amortization of mortgage servicing rights is recorded as a reduction of loan servicing fee income.

Federal Home Loan Bank Stock

The Company, as a member of the Federal Home Loan Bank (“FHLB”) of Boston, is required to maintain an investment in capital stock of the FHLB. Based on redemption provisions, the stock has no quoted market value and is carried at cost. The Company continually reviews its investment to determine if OTTI exists. The Company reviews recent public filings, rating agency analysis and other factors, when making its determination.

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Bank Premises and Equipment

Land is carried at cost. Bank premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line convention method over the estimated useful lives of the assets. Leasehold improvements are amortized over the shorter of the lease terms or the estimated useful lives of the improvements. Expected terms include lease option periods to the extent that the exercise of such options is reasonably assured, not to exceed fifteen years.

Goodwill and Other Intangible Assets

Goodwill represents the excess of the purchase price over the net fair value of acquired businesses and is not amortized. Goodwill is evaluated for impairment at least annually, or more often if warranted, using a combined qualitative and quantitative impairment approach. The initial qualitative approach assesses whether the existence of events or circumstances led to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events and circumstances, the Company determines it is more likely than not that the fair value is less than carrying value, the two step quantitative impairment test is performed. Step one of the quantitative impairment test compares book value to the fair value of the reporting unit. If step one is failed, a detailed step two analysis is performed, which involves measuring the excess of the fair value of the reporting unit, as determined in step one, over the aggregate fair value of the individual assets, liabilities, and identifiable intangibles as if the reporting unit was being acquired in a business combination.

Other intangible assets subject to amortization consist of core deposit intangibles, noncompete agreements, customer lists and market-based favorable or unfavorable lease positions at time of acquisition, and are amortized over the estimated lives of the intangibles using a method that approximates the amount of economic benefits that are realized by the Company. Other intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. The range of useful lives is as follows:

Core deposit intangibles	10 years
Noncompete agreements	1-3 years
Customer lists	10 years
Leases	7.5-29 years

The determination of which intangible assets have finite lives is subjective, as is the determination of the amortization period for such intangible assets.

Impairment of Long-Lived Assets Other Than Goodwill

The Company reviews long-lived assets, including premises and equipment, for impairment whenever events or changes in business circumstances indicate that the remaining useful life may warrant revision or that the carrying amount of the long-lived asset may not be fully recoverable. The Company performs undiscounted cash flow analysis to determine if impairment exists. If impairment is determined to exist, any related impairment loss is calculated based on fair value. Impairment losses on assets to be disposed of, if any, are based on the estimated proceeds to be received, less costs of disposal.

Cash Surrender Value of Life Insurance Policies

Increases in the cash surrender value (“CSV”) of life insurance policies, as well as benefits received net of any CSV, are recorded in other noninterest income, and are not subject to income taxes. The CSV of the policies is recorded as an asset of the Bank, with liabilities recognized for any split dollar arrangements associated with the policies. The Company reviews the financial strength of the insurance carriers prior to the purchase of life insurance policies and no less than annually thereafter. Regulatory requirements limit the total amount of CSV to be held with any individual carrier to 15% of Tier 1 capital (as defined for regulatory purposes) and the total CSV of all life insurance policies is limited to 25% of Tier 1 capital.

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Other Real Estate Owned and Other Foreclosed Assets

Real estate properties and other assets, which have served as collateral to secure loans, are held for sale and are initially recorded at fair value less estimated costs to sell at the date control is established, resulting in a new cost basis. The amount by which the recorded investment in the loan exceeds the fair value (net of estimated costs to sell) of the foreclosed asset is charged to the allowance for loan losses. Subsequent declines in the fair value of the foreclosed asset below the new cost basis are recorded through the use of a valuation allowance. Subsequent increases in the fair value are recorded as reductions in the valuation allowance, but not below zero. Upon a sale of a foreclosed asset, any excess of the carrying value over the sale proceeds is recognized as a loss on sale. Any excess of sale proceeds over the carrying value of the foreclosed asset is first applied as a recovery to the valuation allowance, if any, with the remainder being recognized as a gain on sale. Operating expenses and changes in the valuation allowance relating to foreclosed assets are included in other noninterest expense.

Customer Repurchase Agreements

In a security repurchase agreement transaction, the Company will generally sell a security, agreeing to repurchase either the same or substantially identical security on a specified later date, at a greater price than the original sales price. The difference between the sale price and purchase price is the cost of the proceeds, which is recorded as interest expense. The securities underlying the agreements are delivered to counterparties as security for the repurchase obligations. Since the securities are treated as collateral and the agreement does not qualify for a full transfer of effective control, the transactions do not meet the criteria to be classified as a sale, and are therefore considered a secured borrowing transaction for accounting purposes.

Derivatives

Derivative instruments are carried at fair value in the Company’s financial statements. The accounting for changes in the fair value of a derivative instrument is determined by whether it has been designated and qualifies as part of a hedging relationship, and further, by the type of hedging relationship. At the inception of a hedge, the Company documents certain items, including but not limited to the following: the relationship between hedging instruments and hedged items, the Company's risk management objectives, hedging strategies, and the evaluation of hedge transaction effectiveness. Documentation includes linking all derivatives designated as fair value or cash flow hedges to specific assets and liabilities on the balance sheet or to specific forecasted transactions.

For those derivative instruments that are designated and qualify for special hedge accounting, the Company designates the hedging instrument, based upon the exposure being hedged, as either a fair value hedge or a cash flow hedge. For derivative instruments that are designated and qualify as a cash flow hedge (i.e., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income, net of related tax, and reclassified into earnings in the same period or periods during which the hedged transactions affect earnings. The remaining gain or loss on the derivative instrument in excess of the cumulative change in the present value of future cash flows of the hedged item (i.e., the ineffective portion), if any, is recognized in current earnings during the period. For derivative instruments designated and qualifying as a fair value hedge (i.e., hedging the exposure to changes in the fair value of an asset or liability or an identified portion thereof that is attributable to the hedged risk), the gain or loss on the derivative instrument, as well as the offsetting gain or loss on the hedged item attributable to the hedged risk, are recognized in current earnings during the period of the change in fair values. Hedge accounting is discontinued prospectively when (1) a derivative is no longer highly effective in offsetting changes in the fair value or cash flow of a hedged item, (2) a derivative expires or is settled, (3) it is no longer likely that a forecasted transaction associated with the hedge will occur, or (4) it is determined that designation of a derivative as a hedge is no longer appropriate.

To the extent the Company enters into new or re-designates existing hedging relationships, it is the Company's policy to include the Overnight Index Swap Rate in the spectrum of available benchmark interest rates for hedge accounting.

For derivative instruments not designated as hedging instruments, such as loan level derivatives, foreign exchange contracts and mortgage derivatives, changes in fair value are recognized in other noninterest income during the period of change.

Retirement Plans

The Company has various retirement plans in place for current and former employees, including postretirement benefit plans, supplemental executive retirement plans, frozen multiemployer pension plans, deferred compensation plans as well as other benefits.

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The postretirement benefit plans and the supplemental executive retirement plans are unfunded and therefore have no plan assets. The actuarial cost method used to compute the benefit liabilities and related expense is the projected unit credit method. The projected benefit obligation is principally determined based on the present value of the projected benefit distributions at an assumed discount rate. The discount rate which is utilized is based on the investment yield of high quality corporate bonds available in the market place with maturities approximately equal to projected cash flows of future benefit payments as of the measurement date. Periodic benefit expense (or income) includes service costs and interest costs based on the assumed discount rate, amortization of prior service costs due to plan amendments and amortization of actuarial gains and losses. The amortization of actuarial gains and losses is determined using the 10% corridor minimum amortization approach and is taken over the average remaining future working lifetime of the plan participants. The underfunded status of the plans is recorded as a liability on the balance sheet.

The multiemployer pension plans' assets are determined based on fair value, generally representing observable market prices. The actuarial cost method used to compute the pension liabilities and related expense is the unit credit method. The pension expense is equal to the plan contribution requirement of the Company for the plan year.

The Director Deferred Compensation and 401(k) Restoration plans allow directors and employees to invest their funds within a rabbi trust, including both Company stock and other investment alternatives offered by the plan. The plans do not permit diversification and therefore elections made to defer into Company stock result in both the investment and obligation recognized within Stockholders' Equity. Investments not in Company stock are included in Securities-Trading, with the correlating obligation classified as a liability.

The Company has obligations with various individuals related to certain post retirement benefits. The obligations are based on the individual's service through retirement, with the associated cost recognized over the requisite service period. The accrual methodology results in an accrued amount at the full eligibility date equal to the then present value of all of the future benefits expected to be paid.

Stock-Based Compensation

The Company recognizes stock-based compensation based on the grant-date fair value of the award adjusted for forfeitures. For restricted stock awards and units, the Company recognizes compensation expense ratably over the vesting period for the fair value of the award, measured at the grant date. For stock option awards, the Company values awards granted using the Black-Scholes option-pricing model. The Company recognizes compensation expense for these awards on a straight-line basis over the requisite service period for the entire award (straight-line attribution method), ensuring that the amount of compensation cost recognized at any date at least equals the portion of the grant-date fair value of the award that is vested at that time.

Income Taxes

Deferred income tax assets and liabilities are determined using the asset and liability (or balance sheet) method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. If current available information raises doubt as to the realization of the deferred tax assets, a valuation allowance is established. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in enacted tax rates is recognized in income in the period that includes the enactment date. Income taxes are allocated to each entity in the consolidated group based on its share of taxable income. Management exercises significant judgment in evaluating the amount and timing of recognition of the resulting tax liabilities and assets, including projections of future taxable income. Additionally, a liability for unrecognized tax benefits is recorded for uncertain tax positions taken by the Company on its tax returns for which there is less than a 50% likelihood of being recognized upon a tax examination.

Tax credits generated from the New Markets Tax Credit program are reflected in earnings when realized for federal income tax purposes.

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Low Income Housing Tax Credits

The Company accounts for its investments in qualified affordable housing projects using the proportional amortization method. Under the proportional amortization method the Company amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received, and recognizes the net investment benefit as a component of income tax expense (benefit).

Assets Under Administration

Assets held in a fiduciary or agency capacity for customers are not included in the accompanying consolidated balance sheet, as such assets are not assets of the Company. Revenue from administrative and management activities associated with these assets is recorded on an accrual basis.

Extinguishment of Debt

Upon extinguishment of an outstanding debt, the Company records the difference between the exit price and the net carrying amount of the debt as a gain or loss on the extinguishment. The gain or loss is recorded as a component of other noninterest income or other noninterest expense, respectively.

Earnings Per Share

Basic earnings per share is calculated using the two-class method. The two-class method is an earnings allocation formula under which earnings per share is calculated from common stock and participating securities according to dividends declared and participation rights in undistributed earnings. Under this method, all earnings distributed and undistributed, are allocated to participating securities and common shares based on their respective rights to receive dividends. Unvested share-based payment awards that contain nonforfeitable rights to dividends are considered participating securities (i.e. unvested time-vested restricted stock), not subject to performance based measures. Basic earnings per share is calculated by dividing net income by the weighted average number of common shares outstanding (inclusive of participating securities). Diluted earnings per share have been calculated in a manner similar to that of basic earnings per share except that the weighted average number of common shares outstanding is increased to include the number of additional common shares that would have been outstanding if all potentially dilutive common shares (such as those resulting from the exercise of stock options or the attainment of performance measures) were issued during the period, computed using the treasury stock method.

Comprehensive Income

Comprehensive income consists of net income and other comprehensive income. Other comprehensive income includes unrealized gains and losses on securities available for sale, unrealized losses related to factors other than credit on debt securities, if applicable, unrealized gains and losses on cash flow hedges, deferred gains on hedge accounting transactions, and changes in the funded status of the Company’s postretirement and supplemental retirement plans.

Fair Value Measurements

In general, fair values of financial instruments are based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon developed models that primarily use, as inputs, observable market-based parameters. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. These adjustments may include amounts to reflect counterparty credit quality and the Company’s creditworthiness, among other things, as well as unobservable parameters.

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Recent Accounting Standards    

Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Financial Account Standards Board Topic 805 "Business Combinations" Updated No. 2017-01. Update No. 2017-01 was issued in January of 2017 to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill and consolidation. The amendments in this update are effective for annual periods and interim periods within those annual periods beginning after December 15, 2017. Earlier adoption is permitted, including interim reporting periods within that reporting period. The adoption of this standard is not expected to have a material impact on the Company's consolidated financial position.

FASB ASC Topic 606 "Revenue from Contracts with Customers" Update No. 2014-09. Update No. 2014-09 was issued in May 2014 to address the previous revenue recognition requirements in GAAP that differ from those in International Financial Reporting Standards (IFRS).  Accordingly, the FASB and the International Accounting Standards Board (IASB) initiated a joint project to clarify the principles for recognizing revenue and to develop a common revenue standard for U.S. GAAP and IFRS. The largely converged revenue recognition standards will supersede virtually all revenue recognition guidance in GAAP and IFRS. The core principle of the guidance is that an entity should 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. Since the issuance of Update 2014-09, the FASB has finalized various amendments to the standard as summarized below:

FASB ASC Topic 606 "Revenue from Contracts with Customers" Update No. 2016-20

FASB ASC Topic 606 "Revenue from Contracts with Customers" Update No. 2016-12

FASB ASC Topic 606 "Revenue from Contracts with Customers" Update No. 2016-10

FASB ASC Topic 606 "Revenue from Contracts with Customers" Update No. 2016-08.

FASB ASC Topic 606 "Revenue from Contracts with Customers" Update No. 2015-14.

The amendments in Update 2016-20 make minor corrections or minor improvements to the codification that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities.

Through Updates 2016-12, 2016-10 and 2016-08, the FASB amended its new revenue guidance on licenses of intellectual property, identification of performance obligations, collectability, noncash consideration and the presentation of sales and other similar taxes. The FASB also clarified the definition of a completed contract at transition and added a practical expedient to ease transition for contracts that were modified prior to adoption. The FASB also amended the new revenue recognition guidance on determining whether an entity is a principal or an agent in an arrangement which affects whether revenue should be reported gross or net.

Following the issuance of Update 2015-14, Update 2014-09, as amended, is effective for the Company for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier adoption is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. A full or modified retrospective transition method is required. The Company's revenue is comprised of net interest income on financial assets and liabilities, which is explicitly excluded from the scope of the new guidance, and noninterest income. The Company plans to adopt the revenue recognition guidance in the first quarter of 2018 and is currently evaluating the potential impact on noninterest income on the Company's consolidated financial position, other presentation and disclosure issues. Additionally, the Company anticipates using the modified retrospective transition method upon adoption.

FASB ASC Topic 740 "Income Taxes" Update No. 2016-16. Update No. 2016-16 was issued in October 2016 and the amendments in this update require that entities recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The amendments is this update do not change GAAP for the pre-tax effects of an intra-entity asset transfer under Topic 810, Consolidation, or for an intra-entity transfer of inventory. The amendments in this update are effective for annual periods and interim periods within those annual periods beginning after December 31, 2017. Earlier adoption is permitted, including interim reporting periods within that reporting period. The adoption of this standard is not expected to have a material impact on the Company's consolidated financial position.

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FASB ASC Topic 230 "Statement of Cash Flows" Update No. 2016-15. Update No. 2016-15 was issued in August 2016 to reduce diversity of practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments in this update provide guidance on the following eight specific cash flow issues; (1) debt prepayment or debt extinguishment costs, (2) settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing, (3) contingent consideration payments made after a business combination, (4) proceeds from the settlement of insurance claims, (5) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies, (6) distributions received from equity method investees, (7) beneficial interests in securitization transactions, and (8) separately identifiable cash flows and application of the predominance principle. The amendments in this topic will provide guidance for these eight issues, thereby reducing the current and potential future diversity in practice. The amendments in this update are effective for annual periods and interim periods within those annual periods beginning after December 31, 2017. Earlier adoption is permitted, including interim reporting periods within that reporting period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. The adoption of this standard is not expected to have a material impact on the Company's consolidated financial position.

FASB ASC Topic 326 "Financial Instruments - Credit Losses" Update No. 2016-13. Update No. 2016-13 was issued in June 2016 to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in this update replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendments affect entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off-balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The amendments in this update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with earlier adoption permitted as of fiscal years beginning after December 15, 2018, including interim periods with those fiscal years. The Company is currently assessing the impact of the adoption of this standard on the Company's consolidated financial position.

FASB ASC Topic 605 "Revenue Recognition" and Topic 815 "Derivatives and Hedging" Update No. 2016-11. Update No. 2016-11 was issued in May 2016 and is a rescission of SEC guidance because of ASU Updates 2014-09 and 2014-16 pursuant to staff announcements at the March 3, 2016 Emerging Issues Task Force meeting. The amendments in this update are effective upon adoption of Topic 606 "Revenue from Contracts with Customers." The Company is currently assessing the impact of the adoption of this standard on the Company's consolidated financial position.

FASB ASC Topic 718 "Compensation - Stock Compensation" Update No. 2016-09. Update No. 2016-09 was issued in March 2016 and affects all entities that issue share-based awards to their employees. This update was issued as part of the FASB’s simplification initiative. The areas for simplification in this update involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The amendments in this update are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company has adopted the standard effective January 1, 2017, which will require a cumulative effect adjustment to retained earnings, the impact of which did not have a material affect on the Company's consolidated financial position.    

FASB ASC Topic 323 "Investments -Equity Method and Joint Ventures" Update No. 2016-07. Update No. 2016-07 was issued in March 2016 and eliminates the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods that the investment had been held. The amendments require that the equity method investor add the cost of acquiring the additional interest in the investees to the current basis of the investor's previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. Therefore, upon qualifying for the equity method of accounting, no retroactive adjustment of the investment is required. The amendments in this update require that an entity that has an available-for-sale equity security that becomes qualified for the equity method of accounting recognize through earnings the unrealized holding gain or loss in accumulated other comprehensive income at the date the investment becomes qualified for use of the equity method. The amendments in this update are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The amendments should be applied prospectively upon their effective date to increases in the level of ownership interest or degree of influence that result

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in the adoption of the equity method. Early adoption is permitted. Upon adoption of this standard on January 1, 2017, there was no material impact on the Company's consolidated financial position.

FASB ASC Topic 815 "Derivative and Hedging - Contingent Put and Call Options in Debt Instruments" Update No. 2016-06. Update No. 2016-06 was issued in March 2016 to clarify the requirements for assessing whether contingent call (put) options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt hosts. An entity performing the assessment under the amendments in this update is required to assess the embedded call (put) options solely in accordance with the four-step decision sequence. For public entities, the amendments in this update are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. An entity has an option to apply the amendments in this update on either a prospective basis or a modified retrospective basis. Early adoption is permitted, including adoption in an interim period. Upon adoption of this standard on January 1, 2017, there was no material impact on the Company's consolidated financial position.

FASB ASC Topic 815 "Derivative and Hedging - Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships" Update No. 2016-05. Update No. 2016-05 was issued in March 2016 and applies to all reporting entities for which there is a change in the counterparty to a derivative instrument that has been designated as a hedging instrument under Topic 815. The amendments in this update clarify that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument under Topic 815 does not, in and of itself, require de-designation of that hedging relationship provided that all other hedge accounting criteria (including those in paragraphs 815-20-35-14 through 35-18) continue to be met. For public entities, the amendments in this update are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. An entity has an option to apply the amendments in this update on either a prospective basis or a modified retrospective basis. Early adoption is permitted, including adoption in an interim period. Upon adoption of this standard on January 1, 2017, there was no material impact on the Company's consolidated financial position.

FASB ASC Topic 842 "Leases" Update No. 2016-02. Update No. 2016-02 was issued in February 2016 and affects any entity that enters into a lease (as that term is defined in this update), with some specified scope exemptions. The core principle of this update is that a lessee should recognize in the statement of financial position a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. The recognition, measurement, and presentation of expenses and cash flows arising from a lease have not significantly changed from previous GAAP. In addition, the accounting applied by a lessor is largely unchanged from that applied under previous GAAP. For public companies, the amendments in this update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently assessing the impact of the adoption of this standard on the Company's consolidated financial position.    

FASB ASC Topic 825-10 "Financial Instruments - Overall Recognition and Measurement of Financial Assets and Financial Liabilities" Update No. 2016-01. Update No. 2016-01 was issued in January 2016 to amend the guidance in U.S. GAAP on the classification and measurement of financial instruments. Although the update retains many current requirements, it significantly revises an entity's accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. The update also amends certain disclosure requirements associated with the fair value of financial instruments and various other aspects of recognition, measurement, presentation and disclosure of financial instruments. For public entities, the amendments in this update are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted for only certain guidance. The Company is currently assessing the impact of the adoption of this standard on the Company's consolidated financial position.

FASB ASC Subtopic 835-30 "Interest - Imputation of Interest" Update No. 2015-03. Update No. 2015-03 was issued in April 2015 to simplify presentation of debt issuance costs. The amendments in this update require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuances costs are not affected by the amendments in this update. The amendments in this update were adopted by the Company effective January 1, 2016, with applicable prior period presentation updated for the reclassification of $501,000 and $568,000 of debt issuance costs from other assets to borrowings at December 31, 2016 and 2015, respectively. The adoption of this standard did not have a material impact on the Company's consolidated financial position.

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NOTE 2ACQUISITIONS

New England Bancorp, Inc.

On November 10, 2016, the Company completed its acquisition of New England Bancorp, Inc. ("NEB"), the parent of Bank of Cape Cod. The transaction qualified as a tax-free reorganization for federal income tax purposes and NEB shareholders received, for each share of NEB common stock, the right to receive 0.25 shares of the Company's stock (valued at $15.14 per share, based upon the highest trading value of the Company's stock on November 10, 2016 of $60.55). The deal consideration was $41.7 million in the aggregate, inclusive of cash paid in lieu of fractional shares and resulted in an increase to the Company's outstanding shares of 672,665 shares.

The Company accounted for the NEB acquisition using the acquisition method pursuant to the Business Combinations Topic of the FASB ASC. Accordingly, the Company recorded merger and acquisition expenses of $5.0 million, during the year ended December 31, 2016, related to the NEB transaction. Additionally, the acquisition method requires the acquirer to recognize the assets acquired and the liabilities assumed at their fair values as of the acquisition date. The following table summarizes the estimated fair value of the assets acquired and liabilities assumed as of the date of the acquisition:

	Net Assets Acquired at Fair Value
	(Dollars in thousands)
Assets
Cash	$	9,679
Loans	225,731
Premises and equipment	201
Goodwill	20,443
Core deposit and other intangibles	670
Other assets	19,197
Total assets acquired	275,921
Liabilities
Deposits	175,686
Borrowings	51,150
Other liabilities	7,344
Total liabilities assumed	234,180
Purchase price	$	41,741

Fair value adjustments to assets acquired and liabilities assumed are generally amortized using either an effective yield or straight-line basis over periods consistent with the average life, useful life and/or contractual term of the related assets and liabilities.

Fair values of the major categories of assets acquired and liabilities assumed were determined as follows:

Cash and Cash Equivalents

The fair values of cash and cash equivalents approximate the respective carrying amounts because the instruments are payable on demand or have short-term maturities.

Loans

The loans acquired were recorded at fair value without a carryover of the allowance for loan losses. Fair value of the loans is determined using market participant assumptions in estimating the amount and timing of both principal and interest cash flows expected to be collected, as adjusted for an estimate of future credit losses and prepayments, and then applying a market-based discount rate to those cash flows. The overall discount on the loans acquired in this transaction was due to estimated credit risk, as well as considerations for liquidity and market interest rates. In addition, the acquired loans were reviewed to determine if the the loan had evidence of deterioration of credit quality at the purchase date and also reviewed to determine if it was probable that all contractually required payments will not be collected. Based on the review of the loan

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portfolio at the time of the acquisition it was deemed that there was no evidence to show that any of the acquired loans were purchased credit impaired.

Core Deposit Intangible

The fair value of the core deposit intangible is derived by comparing the interest rate and servicing costs that the financial institution pays on the core deposit liability versus the current market rate for alternative sources of financing, while factoring in estimates over the remaining life and attrition rate of the deposit accounts. The intangible asset represents the stable and relatively low cost source of funds that the deposits and accompanying relationships provide the Company, when compared to alternative funding sources.

Deposits

The fair value of acquired savings and transaction deposit accounts was assumed to approximate the carrying value as these accounts have no stated maturity and are payable on demand. The fair value of time deposits were determined based on the present value of the contractual cash flows over the remaining period to maturity using a market interest rate.

Borrowings

The fair values of Federal Home Loan Bank ("FHLB") advances were derived based upon the present value of the principal and interest payments using a current market discount rate. Subsequent to the acquisition, the Company paid off all acquired borrowings at their recognized fair value amounts, resulting in no gain or loss on extinguishment.

Selected Pro Forma Results

The following summarizes the unaudited pro forma results of operations as if the Company acquired NEB on January 1, 2016 (2015 amounts represent combined results for the Company and NEB). The selected pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of the financial results of the combined companies had the acquisition actually been completed at the beginning of the periods presented, nor does it indicate future results for any other interim or full-year period.

	Years Ended December 31
	2016		2015
	(Dollars in thousands)
Net interest income after provision for loan losses	$	228,927	$	221,252
Net income	$	80,411	$	65,623

Excluded from the pro forma results of operations for the year ended December 31, 2016 are merger-related costs of $6.3 million recognized by both the Company and NEB in the aggregate and the corresponding tax benefit. These costs were primarily made up of contract terminations arising due to the change in control, the acceleration of certain compensation and benefit costs, and other merger expenses.

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Peoples Federal Bancshares, Inc.

On February 20, 2015, the Company completed its acquisition of Peoples Federal Bancshares, Inc. ("Peoples"), the parent of Peoples Federal Saving Bank. The transaction qualified as a tax-free reorganization for federal income tax purposes and Peoples shareholders received, for each share of Peoples common stock, the right to receive either $21.00 in cash per share or 0.5523 shares of the Company's stock (valued at $23.26 per share, based upon the highest trading value of the Company's stock on February 20, 2015 of $42.11). The total deal consideration was $141.8 million and was comprised of 40% cash and 60% stock consideration. The cash consideration was $55.4 million in the aggregate, inclusive of cash paid in lieu of fractional shares. The total stock consideration was $86.4 million and resulted in an increase to the Company's outstanding shares of 2,052,137 shares.

The Company accounted for the Peoples acquisition using the acquisition method pursuant to the Business Combinations Topic of the FASB ASC. Accordingly, the Company recorded merger and acquisition expenses of $10.5 million during the year ended December 31, 2015. Additionally, the acquisition method requires the acquirer to recognize the assets acquired and the liabilities assumed at their fair values as of the acquisition date. The following table summarizes the estimated fair value of the assets acquired and liabilities assumed as of the date of the Peoples acquisition:

	Net Assets Acquired at Fair Value
	(Dollars in thousands)
Assets
Cash	$	41,957
Investments	43,585
Loans	463,927
Premises and equipment	9,346
Goodwill	30,662
Core deposit and other intangibles	3,936
Other assets	46,920
Total assets acquired	640,333
Liabilities
Deposits	432,250
Borrowings	51,209
Other liabilities	15,054
Total liabilities assumed	498,513
Purchase price	$	141,820

Fair value adjustments to assets acquired and liabilities assumed are generally amortized using either an effective yield or straight-line basis over periods consistent with the average life, useful life and/or contractual term of the related assets and liabilities.

Fair values of the major categories of assets acquired and liabilities assumed were determined as follows:

Cash and Cash Equivalents

The fair values of cash and cash equivalents approximate the respective carrying amounts because the instruments are payable on demand or have short-term maturities.

Investments

The fair values of securities were based on quoted market prices for identical securities received from an independent, nationally-recognized, third-party pricing service. Prices provided by the independent pricing service were based on recent trading activity and other observable information including, but not limited to, market interest rate curves, referenced credit spreads and estimated prepayment rates where applicable.

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Loans

The loans acquired were recorded at fair value without a carryover of the allowance for loan losses. Fair value of the loans is determined using market participant assumptions in estimating the amount and timing of both principal and interest cash flows expected to be collected, as adjusted for an estimate of future credit losses and prepayments, and then applying a market-based discount rate to those cash flows. The overall discount on the loans acquired in this transaction was due to estimated credit loss, as well as considerations for liquidity and market interest rates.

A portion of the loans acquired showed evidence of deterioration of credit quality at the purchase date and it was deemed unlikely that the Company would be able to collect all contractually required payments. As such, these loans were deemed to be purchased credit impaired ("PCI") and the carrying value and prospective income recognition are predicated upon future cash flows expected to be collected. The following is a summary of these PCI loans associated with the acquisition as of the date acquired:

	As of February 20, 2015
	(Dollars in thousands)
Contractually required principal and interest at acquisition	$	4,358
Contractual cash flows not expected to be collected	(1,596		)
Expected cash flows at acquisition	2,762
Interest component of expected cash flows	(319		)
Basis in PCI loans at acquisition - estimated fair value	$	2,443

Premises and Equipment

The fair value of the premises, including land, buildings and improvements, was determined based upon appraisals by licensed real estate appraisers or pending agreed upon sale prices. The appraisals were based upon the best and highest use of the property with final values determined based upon an analysis of the cost, sales comparison and income capitalization approaches for each property appraised.

Core Deposit Intangible

The fair value of the core deposit intangible is derived by comparing the interest rate and servicing costs that the financial institution pays on the core deposit liability versus the current market rate for alternative sources of financing, while factoring in estimates over the remaining life and attrition rate of the deposit accounts. The intangible asset represents the stable and relatively low cost source of funds that the deposits and accompanying relationships provide the Company, when compared to alternative funding sources.

Deposits

The fair value of acquired savings and transaction deposit accounts was assumed to approximate the carrying value as these accounts have no stated maturity and are payable on demand. The fair value of time deposits were determined based on the present value of the contractual cash flows over the remaining period to maturity using a market interest rate.

Borrowings

The fair values of FHLB advances were derived based upon the present value of the principal and interest payments using a current market discount rate.

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Selected Pro Forma Results

The following summarizes the unaudited pro forma results of operations as if the Company acquired Peoples on January 1, 2015 (2014 amounts represent combined results for the Company and Peoples). The selected pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of the financial results of the combined companies had the acquisition actually been completed at the beginning of the periods presented, nor does it indicate future results for any other interim or full-year period.

	Years Ended December 31
	2015		2014
	(Dollars in thousands)
Net interest income after provision for loan losses	$	216,086	$	203,296
Net income	$	69,816	$	60,896

Excluded from the pro forma results of operations for the year ended December 31, 2015 are merger-related costs of $16.7 million, pre-tax, recognized by both the Company and Peoples in the aggregate. These costs were primarily made up of contract terminations arising due to the change in control, the acceleration of certain compensation and benefit costs, and other merger expenses.

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NOTE 3SECURITIES

Trading Securities

As of December 31, 2016 and December 31, 2015 the Company had trading securities of $804,000 and $356,000, respectively. These securities are held in a rabbi trust and will be used for future payments associated with the Company's non-qualified 401(k) Restoration Plan and non-qualified deferred compensation plan.

Available for Sale and Held to Maturity Securities

The following table presents a summary of the amortized cost, gross unrealized holding gains and losses and fair value of securities available for sale and securities held to maturity for the periods indicated:

	December 31, 2016									December 31, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(Dollars in thousands)
Available for sale securities
U.S. government agency securities	$	24,006	$	238	$	—		$	24,244	$	29,958	$	261	$	(4	)	$	30,215
Agency mortgage-backed securities	173,268		2,852		(736		)	175,384		207,693		4,227		(983		)	210,937
Agency collateralized mortgage obligations	101,094		106		(1,332		)	99,868		64,157		179		(752		)	63,584
State, county, and municipal securities	3,743		50		—			3,793		4,543		116		—			4,659
Single issuer trust preferred securities issued by banks	2,311		3		(3		)	2,311		2,865		8		(81		)	2,792
Pooled trust preferred securities issued by banks and insurers	2,200		—		(616		)	1,584		2,217		—		(645		)	1,572
Small business administration pooled securities	37,561		—		(372		)	37,189		40,472		87		(110		)	40,449
Equity securities	19,183		641		(553		)	19,271		13,235		374		(568		)	13,041
Total available for sale securities	363,366		3,890		(3,612		)	363,644		365,140		5,252		(3,143		)	367,249
Held to maturity securities
U.S. treasury securities	1,007		47		—			1,054		1,009		55		—			1,064
Agency mortgage-backed securities	156,088		2,274		(858		)	157,504		167,134		3,460		(219		)	170,375
Agency collateralized mortgage obligations	297,445		1,002		(3,797		)	294,650		267,348		1,195		(3,652		)	264,891
State, county, and municipal securities	—		—		—			—		225		2		—			227
Single issuer trust preferred securities issued by banks	1,500		44		—			1,544		1,500		22		—			1,522
Small business administration pooled securities	31,036		189		(327		)	30,898		35,291		437		(64		)	35,664
Corporate debt securities	—		—		—			—		5,000		6		—			5,006
Total held to maturity securities	487,076		3,556		(4,982		)	485,650		477,507		5,177		(3,935		)	478,749
Total	$	850,442	$	7,446	$	(8,594	)	$	849,294	$	842,647	$	10,429	$	(7,078	)	$	845,998

When securities are sold, the adjusted cost of the specific security sold is used to compute the gain or loss on the sale.

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The actual maturities of certain securities may differ from the contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. A schedule of the contractual maturities of securities available for sale and securities held to maturity as of December 31, 2016 is presented below:

	Available for Sale				Held to Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(Dollars in thousands)
Due in one year or less	$	999	$	1,001	$	1	$	1
Due after one year to five years	29,144		29,419		16,007		16,228
Due after five to ten years	97,144		97,421		22,664		23,309
Due after ten years	216,896		216,532		448,404		446,112
Total debt securities	344,183		344,373		487,076		485,650
Equity securities	19,183		19,271		—		—
Total	$	363,366	$	363,644	$	487,076	$	485,650

Inclusive in the table above is $10.9 million of callable securities at December 31, 2016.

The carrying value of securities pledged to secure public funds, trust deposits, repurchase agreements and for other purposes, as required or permitted by law, was $482.1 million and $444.8 million at December 31, 2016 and 2015, respectively.

At December 31, 2016 and 2015, the Company had no investments in obligations of individual states, counties, or municipalities, which exceeded 10% of stockholders’ equity.

Other-Than-Temporary Impairment

The Company continually reviews investment securities for the existence of OTTI, taking into consideration current market conditions, the extent and nature of changes in fair value, issuer rating changes and trends, the credit worthiness of the obligor of the security, volatility of earnings, current analysts’ evaluations, the Company’s intent to sell the security, or whether it is more likely than not that the Company will be required to sell the debt security before its anticipated recovery, as well as other qualitative factors. The term “other-than-temporary” is not intended to indicate that the decline is permanent, but indicates that the prospects for a near-term recovery of value is not necessarily favorable, or that there is a lack of evidence to support a realizable value equal to or greater than the carrying value of the investment.

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The following tables show the gross unrealized losses and fair value of the Company’s investments in an unrealized loss position, which the Company has not deemed to be OTTI, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:

		December 31, 2016
		Less than 12 months					12 months or longer					Total
Description of securities	# of holdings	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
		(Dollars in thousands)
Agency mortgage-backed securities	57	$	137,949	$	(1,594	)	$	—	$	—		$	137,949	$	(1,594	)
Agency collateralized mortgage obligations	32	243,051		(3,140		)	47,403		(1,989		)	290,454		(5,129		)
Single issuer trust preferred securities issued by banks and insurers	1	—		—			1,036		(3		)	1,036		(3		)
Pooled trust preferred securities issued by banks and insurers	1	—		—			1,583		(616		)	1,583		(616		)
Small business administration pooled securities	5	59,846		(699		)	—		—			59,846		(699		)
Equity securities	25	3,625		(77		)	6,334		(476		)	9,959		(553		)
Total temporarily impaired securities	121	$	444,471	$	(5,510	)	$	56,356	$	(3,084	)	$	500,827	$	(8,594	)
		December 31, 2015
		Less than 12 months					12 months or longer					Total
Description of securities	# of holdings	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
		(Dollars in thousands)
U.S.government agency securities	3	$	1,990	$	(4	)	$	—	$	—		$	1,990	$	(4	)
Agency mortgage-backed securities	57	112,648		(1,062		)	4,297		(140		)	116,945		(1,202		)
Agency collateralized mortgage obligations	23	147,707		(1,420		)	80,927		(2,984		)	228,634		(4,404		)
Single issuer trust preferred securities issued by banks and insurers	2	1,018		(33		)	1,018		(48		)	2,036		(81		)
Pooled trust preferred securities issued by banks and insurers	1	—		—			1,572		(645		)	1,572		(645		)
Small business administration pooled securities	3	37,986		(174		)	—		—			37,986		(174		)
Equity securities	34	3,481		(189		)	4,971		(379		)	8,452		(568		)
Total temporarily impaired securities	123	$	304,830	$	(2,882	)	$	92,785	$	(4,196	)	$	397,615	$	(7,078	)

The Company does not intend to sell these investments and has determined based upon available evidence that it is more likely than not that the Company will not be required to sell the security before the recovery of its amortized cost basis. As a result, the Company does not consider these unrealized losses to be OTTI. The Company made this determination by reviewing various qualitative and quantitative factors regarding each investment category, such as current market conditions, extent and nature of changes in fair value, issuer rating changes and trends, volatility of earnings, and current analysts’ evaluations.

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As a result of the Company’s review of these qualitative and quantitative factors, the causes of the impairments listed in the table above by category are as follows at December 31, 2016:

• Agency Mortgage-Backed Securities, Agency Collateralized Mortgage Obligations and Small Business Administration Pooled Securities: These portfolios have contractual terms that generally do not permit the issuer to settle the securities at a price less than the current par value of the investment. The decline in market value of these securities is attributable to changes in interest rates and not credit quality. Additionally, these securities are implicitly guaranteed by the U.S. Government or one of its agencies.

• Single Issuer Trust Preferred Securities: This portfolio consists of one security, which is investment grade. The unrealized loss on this security is attributable to the illiquid nature of the trust preferred market in the current economic environment. Management evaluates various financial metrics for the issuers, including regulatory capital ratios of the issuers.

• Pooled Trust Preferred Securities: This portfolio consists of one below investment grade security which is performing. The unrealized loss on this security is attributable to the illiquid nature of the trust preferred market and the significant risk premiums required in the current economic environment. Management evaluates collateral credit and instrument structure, including current and expected deferral and default rates and timing. In addition, discount rates are determined by evaluating comparable spreads observed currently in the market for similar instruments.

• Equity Securities: This portfolio consists of mutual funds and other equity investments. During some periods, the mutual funds in the Company’s investment portfolio may have unrealized losses resulting from market fluctuations as well as the risk premium associated with that particular asset class. For example, emerging market equities tend to trade at a higher risk premium than U.S. government bonds and thus, will fluctuate to a greater degree on both the upside and the downside. In the context of a well-diversified portfolio, however, the correlation amongst the various asset classes represented by the funds serves to minimize downside risk. The Company evaluates each mutual fund in the portfolio regularly and measures performance on both an absolute and relative basis. A reasonable recovery period for positions with an unrealized loss is based on management’s assessment of general economic data, trends within a particular asset class, valuations, earnings forecasts and bond durations. The Company does not intend to sell these equity securities and has determined based on available evidence that it will not be required to sell the equity securities prior to the recovery of fair value.

The following table shows the total OTTI that the Company recorded for the periods indicated:

	Years Ended December 31
	2016		2015		2014
	(Dollars in thousands)
Gross change in OTTI recorded on certain investments	$	—	$	—	$	2,098
Portion of OTTI recognized in OCI	—		—		(2,098		)
Total credit related OTTI recognized in earnings	$	—	$	—	$	—

The following table shows the cumulative credit related component of OTTI for the periods indicated:

	Years Ended December 31
	2016		2015			2014
	(Dollars in thousands)
Balance at beginning of period	$	—	$	(9,997	)	$	(9,997	)
Add
Incurred on securities not previously impaired	—		—			—
Incurred on securities previously impaired	—		—			—
Less
Securities sold during the period	—		9,997			—
Reclassification due to changes in Company’s intent	—		—			—
Increases in cash flow expected to be collected	—		—			—
Balance at end of period	$	—	$	—		$	(9,997	)

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NOTE 4LOANS, ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY

Allowance for Loan Losses

The following table summarizes changes in the allowance for loan losses by loan category and bifurcates the amount of allowance allocated to each loan category based on collective impairment analysis and loans evaluated individually for impairment:

	December 31, 2016
	Commercial and Industrial			Commercial Real Estate			Commercial Construction			Small Business			Residential Real Estate			Home Equity			Other Consumer			Total
	(Dollars in thousands)
Allowance for loan losses
Beginning balance	$	13,802		$	27,327		$	5,366		$	1,264		$	2,590		$	4,889		$	587		$	55,825
Charge-offs	(593		)	(414		)	—			(228		)	(28		)	(602		)	(1,607		)	(3,472		)
Recoveries	859			564			—			195			299			141			1,080			3,138
Provision (benefit)	2,853			2,892			(844		)	271			(240		)	810			333			6,075
Ending balance	$	16,921		$	30,369		$	4,522		$	1,502		$	2,621		$	5,238		$	393		$	61,566
Ending balance: collectively evaluated for impairment	$	13,260		$	30,173		$	4,522		$	1,494		$	1,535		$	4,996		$	372		$	56,352
Ending balance: individually evaluated for impairment	$	3,661		$	196		$	—		$	8		$	1,086		$	242		$	21		$	5,214
Financing receivables ending balance:
Collectively evaluated for impairment	$	862,875		$	2,983,642		$	320,391		$	121,855		$	622,392		$	982,095		$	10,666		$	5,903,916
Individually evaluated for impairment	39,178			16,813			—			871			14,175			5,863			397			77,297
Purchased credit impaired loans	—			10,343			—			—			7,859			189			1			18,392
Total loans by group	$	902,053		$	3,010,798		$	320,391		$	122,726		$	644,426		$	988,147		$	11,064		$	5,999,605		(1)
	December 31, 2015
	Commercial and Industrial			Commercial Real Estate			Commercial Construction			Small Business			Residential Real Estate			Home Equity			Other Consumer			Total
	(Dollars in thousands)
Allowance for loan losses
Beginning balance	$	15,573		$	25,873		$	3,945		$	1,171		$	2,834		$	4,956		$	748		$	55,100
Charge-offs	(2,010		)	(330		)	—			(267		)	(285		)	(710		)	(1,316		)	(4,918		)
Recoveries	1,593			1,073			—			264			133			356			724			4,143
Provision (benefit)	$	(1,354	)	$	711		$	1,421		$	96		$	(92	)	$	287		$	431		$	1,500
Ending balance	$	13,802		$	27,327		$	5,366		$	1,264		$	2,590		$	4,889		$	587		$	55,825
Ending balance: collectively evaluated for impairment	$	13,619		$	27,123		$	5,366		$	1,260		$	1,312		$	4,651		$	564		$	53,895
Ending balance: individually evaluated for impairment	$	183		$	204		$	—		$	4		$	1,278		$	238		$	23		$	1,930
Financing receivables ending balance:
Collectively evaluated for impairment	$	838,129		$	2,619,294		$	373,064		$	95,225		$	614,014		$	921,563		$	14,427		$	5,475,716
Individually evaluated for impairment	5,147			22,986			304			1,021			15,405			5,989			558			51,410
Purchased credit impaired loans	—			11,154			—			—			9,187			251			3			20,595
Total loans by group	$	843,276		$	2,653,434		$	373,368		$	96,246		$	638,606		$	927,803		$	14,988		$	5,547,721		(1)

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	December 31, 2014
	Commercial and Industrial			Commercial Real Estate			Commercial Construction		Small Business			Residential Real Estate			Home Equity			Other Consumer			Total
	(Dollars in thousands)
Allowance for loan losses
Beginning balance	$	15,622		$	24,541		$	3,371	$	1,215		$	2,760		$	5,036		$	694		$	53,239
Charge-offs	(2,097		)	(5,454		)	—		(605		)	(826		)	(750		)	(1,215		)	(10,947		)
Recoveries	462			404			—		275			424			249			591			2,405
Provision	1,586			6,382			574		286			476			421			678			10,403
Ending balance	$	15,573		$	25,873		$	3,945	$	1,171		$	2,834		$	4,956		$	748		$	55,100
Ending balance: individually evaluated for impairment	$	412		$	197		$	—	$	7		$	1,500		$	262		$	38		$	2,416
Ending balance: collectively evaluated for impairment	$	15,161		$	25,676		$	3,945	$	1,164		$	1,334		$	4,694		$	710		$	52,684
Financing receivables ending balance:
Collectively evaluated for impairment	$	856,185		$	2,304,099		$	265,501	$	84,159		$	505,799		$	858,305		$	16,335		$	4,890,383
Individually evaluated for impairment	4,654			30,729			311		1,088			15,055			5,330			868			58,035
Purchase credit impaired loans	—			12,495			182		—			9,405			228			5			22,315
Total loans by group	$	860,839		$	2,347,323		$	265,994	$	85,247		$	530,259		$	863,863		$	17,208		$	4,970,733		(1)

(1) The amount of net deferred costs on originated loans included in the ending balance was $5.1 million, $4.3 million, and $2.8 million at December 31, 2016, 2015, and 2014, respectively. Net unamortized discounts on acquired loans not deemed to be PCI included in the ending balance was $8.6 million, $6.6 million, and $1.9 million at December 31, 2016, 2015, and 2014, respectively.

For the purpose of estimating the allowance for loan losses, management segregates the loan portfolio into the portfolio segments detailed in the above tables.  Each of these loan categories possesses unique risk characteristics that are considered when determining the appropriate level of allowance for each segment.  Some of the risk characteristics unique to each loan category include:

Commercial Portfolio

• Commercial and Industrial: Loans in this category consist of revolving and term loan obligations extended to business and corporate enterprises for the purpose of financing working capital and/or capital investment.  Collateral generally consists of pledges of business assets including, but not limited to: accounts receivable, inventory, plant and equipment, or real estate, if applicable. Repayment sources consist of primarily, operating cash flow, and secondarily, liquidation of assets.

• Commercial Real Estate: Loans in this category consist of mortgage loans to finance investment in real property such as multi-family residential, commercial/retail, office, industrial, hotels, educational and healthcare facilities and other specific use properties.  Loans are typically written with amortizing payment structures.  Collateral values are determined based upon third party appraisals and evaluations.  Loan to value ratios at origination are governed by established policy and regulatory guidelines. Repayment sources consist of primarily, cash flow from operating leases and rents, and secondarily, liquidation of assets.

• Commercial Construction: Loans in this category consist of short-term construction loans, revolving and nonrevolving credit lines and construction/permanent loans to finance the acquisition, development and construction or rehabilitation of real property.  Project types include residential 1-4 family, condominium and multi-family homes, commercial/retail, office, industrial, hotels, educational and healthcare facilities and other specific use properties.  Loans may be written with nonamortizing or hybrid payment structures depending upon the type of project.  Collateral values are determined based upon third party appraisals and evaluations.  Loan to value ratios at origination are governed by established policy and regulatory guidelines.  Repayment sources vary depending upon the type of project and may consist of sale or lease of units, operating cash flows or liquidation of other assets.

• Small Business: Loans in this category consist of revolving, term loan and mortgage obligations extended to sole proprietors and small businesses for purposes of financing working capital and/or capital investment.  Collateral generally consists of pledges of business assets including, but not limited to, accounts receivable, inventory, plant and equipment, or real estate if applicable.  Repayment sources consist primarily of operating cash flows, and secondarily, liquidation of assets.

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For the commercial portfolio it is the Company’s policy to obtain personal guarantees for payment from individuals holding material ownership interests of the borrowing entities.

Consumer Portfolio

• Residential Real Estate: Residential mortgage loans held in the Company’s portfolio are made to borrowers who demonstrate the ability to make scheduled payments with full consideration to underwriting factors such as current and expected income, employment status, current assets, other financial resources, credit history and the value of the collateral.  Collateral consists of mortgage liens on 1-4 family residential properties.

• Home Equity: Home equity loans and lines are made to qualified individuals and are primarily secured by senior or junior mortgage liens on owner-occupied 1-4 family homes, condominiums or vacation homes. The home equity loan has a fixed rate and is billed in equal payments comprised of principal and interest. The home equity line of credit has a variable rate and is billed in interest-only payments during the draw period. At the end of the draw period, the home equity line of credit is billed as a percentage of the principal balance plus all accrued interest. Additionally, the Company has the option of renewing the line of credit for additional draw periods.  Borrower qualifications include favorable credit history combined with supportive income requirements and combined loan to value ratios within established policy guidelines.

• Other Consumer: Other consumer loan products include personal lines of credit and amortizing loans made to qualified individuals for various purposes such as debt consolidation, personal expenses or overdraft protection.  Borrower qualifications include favorable credit history combined with supportive income and collateral requirements within established policy guidelines.  These loans may be secured or unsecured.

Credit Quality

The Company continually monitors the asset quality of the loan portfolio using all available information. Based on this information, loans demonstrating certain payment issues or other weaknesses may be categorized as delinquent, impaired, nonperforming and/or put on nonaccrual status. Additionally, in the course of resolving such loans, the Company may choose to restructure the contractual terms of certain loans to match the borrower’s ability to repay the loan based on their current financial condition. If a restructured loan meets certain criteria, it may be categorized as a troubled debt restructuring (“TDR”).

The Company reviews numerous credit quality indicators when assessing the risk in its loan portfolio. For the commercial portfolio, the Company utilizes a 10-point commercial risk-rating system, which assigns a risk-grade to each borrower based on a number of quantitative and qualitative factors associated with a commercial loan transaction. Factors considered include industry and market conditions, position within the industry, earnings trends, operating cash flow, asset/liability values, debt capacity, guarantor strength, management and controls, financial reporting, collateral, and other considerations. The risk-ratings categories are defined as follows:

• 1- 6 Rating — Pass: Risk-rating grades “1” through “6” comprise those loans ranging from ‘Substantially Risk Free’ which indicates borrowers are of unquestioned credit standing and the pinnacle of credit quality, well established companies with a very strong financial condition, and loans fully secured by cash collateral, through ‘Acceptable Risk’, which indicates borrowers may exhibit declining earnings, strained cash flow, increasing or above average leverage and/or weakening market fundamentals that indicate below average asset quality, margins and market share. Collateral coverage is protective.

• 7 Rating — Potential Weakness: Borrowers exhibit potential credit weaknesses or downward trends deserving management’s close attention. If not checked or corrected, these trends will weaken the Company’s asset and position. While potentially weak, currently these borrowers are marginally acceptable; no loss of principal or interest is envisioned.

• 8 Rating — Definite Weakness Loss Unlikely: Borrowers exhibit well defined weaknesses that jeopardize the orderly liquidation of debt. Loan may be inadequately protected by the current net worth and paying capacity of the obligor or by the collateral pledged, if any. Normal repayment from the borrower is in jeopardy, although no loss of principal is envisioned. However, there is a distinct possibility that a partial loss of interest and/or principal will occur if the deficiencies are not corrected. Collateral coverage may be inadequate to cover the principal obligation.

• 9 Rating — Partial Loss Probable: Borrowers exhibit well defined weaknesses that jeopardize the orderly liquidation of debt with the added provision that the weaknesses make collection of the debt in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Serious problems exist to the point where partial loss of principal is likely.

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• 10 Rating — Definite Loss: Borrowers deemed incapable of repayment. Loans to such borrowers are considered uncollectible and of such little value that continuation as active assets of the Company is not warranted.

The credit quality of the commercial loan portfolio is actively monitored and any changes in credit quality are reflected in risk-rating changes. Risk-ratings are assigned or reviewed for all new loans, when advancing significant additions to existing relationships (over $50,000), at least quarterly for all actively managed loans, and any time a significant event occurs, including at renewal of the loan.

The Company utilizes a comprehensive strategy for monitoring commercial credit quality. Borrowers are required to provide updated financial information at least annually which is carefully evaluated for any changes in credit quality. Larger loan relationships are subject to a full annual credit review by an experienced credit analysis group. Additionally, the Company retains an independent loan review firm to evaluate the credit quality of the commercial loan portfolio. The independent loan review process achieves significant penetration into the commercial loan portfolio and reports the results of these reviews to the Audit Committee of the Board of Directors on a quarterly basis.

The following table details the amount of outstanding principal balances relative to each of the risk-rating categories for the Company’s commercial portfolio:

		December 31, 2016
Category	Risk Rating	Commercial and Industrial		Commercial Real Estate		Commercial Construction		Small Business		Total
		(Dollars in thousands)
Pass	1 - 6	$	783,825	$	2,876,570	$	317,099	$	120,304	$	4,097,798
Potential weakness	7	46,176		84,641		1,363		1,859		134,039
Definite weakness - loss unlikely	8	71,991		47,164		1,929		556		121,640
Partial loss probable	9	61		2,423		—		7		2,491
Definite loss	10	—		—		—		—		—
Total		$	902,053	$	3,010,798	$	320,391	$	122,726	$	4,355,968
		December 31, 2015
Category	Risk Rating	Commercial and Industrial		Commercial Real Estate		Commercial Construction		Small Business		Total
		(Dollars in thousands)
Pass	1 - 6	$	765,753	$	2,484,025	$	363,781	$	93,008	$	3,706,567
Potential weakness	7	54,375		112,022		7,678		2,444		176,519
Definite weakness - loss unlikely	8	23,073		56,276		1,909		732		81,990
Partial loss probable	9	75		1,111		—		62		1,248
Definite loss	10	—		—		—		—		—
Total		$	843,276	$	2,653,434	$	373,368	$	96,246	$	3,966,324

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For the Company’s consumer portfolio, the quality of the loan is best indicated by the repayment performance of an individual borrower. However, the Company does supplement performance data with current Fair Isaac Corporation (“FICO”) scores and Loan to Value (“LTV”) estimates for the residential and home equity portfolios. Current FICO data is purchased and appended to substantially all consumer loans on a quarterly basis. In addition, automated valuation services and broker opinions of value are used to supplement original value data for the residential and home equity portfolios, periodically. The following table shows the weighted average FICO scores and the weighted average combined LTV ratios as of the periods indicated below:

	December 31
	2016		2015
Residential portfolio
FICO score (re-scored)(1)	743		742
LTV (re-valued)(2)	63.2	%	61.4	%
Home equity portfolio
FICO score (re-scored)(1)	767		765
LTV (re-valued)(2)	55.9	%	55.8	%

(1) The average FICO scores above are based upon rescores available from November and origination score data for loans booked between December 1 and December 31, for the years indicated.

(2) The combined LTV ratios for December 31, 2016 and 2015 are based upon updated automated valuations as of March 31, 2015 and original valuation data for loans booked from April 1, 2015 through the dates indicated. For home equity loans and lines in a subordinate lien, the LTV data represents a combined LTV, taking into account the senior lien data for loans and lines.

Asset Quality

The Bank’s philosophy toward managing its loan portfolios is predicated upon careful monitoring, which stresses early detection and response to delinquent and default situations. Delinquent loans are managed by a team of seasoned collection specialists and the Bank seeks to make arrangements to resolve any delinquent or default situation over the shortest possible time frame.  As a general rule, loans more than 90 days past due with respect to principal or interest are classified as nonaccrual loans. The Company also may use discretion regarding the accrual status of other loans over 90 days delinquent if the loan is well secured and/or in process of collection.

The following table shows nonaccrual loans at the dates indicated:

	December 31
	2016		2015
	(Dollars in thousands)
Commercial and industrial (1)	$	37,455	$	3,699
Commercial real estate	6,266		7,856
Commercial construction	—		304
Small business	302		239
Residential real estate	7,782		8,795
Home equity	5,553		6,742
Other consumer	47		55
Total nonaccrual loans (2)	$	57,405	$	27,690

(1) $34.6 million of this balance relates to one large relationship that was contractually current but instead placed on discretionary nonaccrual as of December 31, 2016.

(2) Included in these amounts were $5.2 million of nonaccruing TDRs at both December 31, 2016 and 2015, respectively.

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The following table shows information regarding foreclosed residential real estate property at the date indicated:

	December 31, 2016			December 31, 2015
	(Dollars in thousands)
Foreclosed residential real estate property held by the creditor	$	3,775	(1)	$	1,430
Recorded investment in mortgage loans collateralized by residential real estate property that are in the process of foreclosure	$	1,715		$	1,059

(1) Inclusive of acquired other real estate owned of $2.1 million relating to the NEB acquisition.

The following table shows the age analysis of past due financing receivables as of the dates indicated:

	December 31, 2016
	30-59 days			60-89 days			90 days or more			Total Past Due			Current		Total Financing Receivables		Recorded Investment >90 Days and Accruing
	Number of Loans	Principal Balance		Number of Loans	Principal Balance		Number of Loans	Principal Balance		Number of Loans	Principal Balance
	(Dollars in thousands)
Commercial and industrial	8	$	100	32	$	253	6	$	2,480	46	$	2,833	$	899,220	$	902,053	$	—
Commercial real estate	5	1,518		8	1,957		8	3,105		21	6,580		3,004,218		3,010,798		—
Commercial construction	—	—		—	—		—	—		—	—		320,391		320,391		—
Small business	9	323		—	—		19	140		28	463		122,263		122,726		—
Residential real estate	11	1,277		9	1,950		27	3,507		47	6,734		637,692		644,426		—
Home equity	19	1,117		11	767		16	1,209		46	3,093		985,054		988,147		—
Other consumer (1)	249	184		12	17		15	7		276	208		10,856		11,064		2
Total	301	$	4,519	72	$	4,944	91	$	10,448	464	$	19,911	$	5,979,694	$	5,999,605	$	2

	December 31, 2015
	30-59 days			60-89 days			90 days or more			Total Past Due			Current		Total Financing Receivables		Recorded Investment >90 Days and Accruing
	Number of Loans	Principal Balance		Number of Loans	Principal Balance		Number of Loans	Principal Balance		Number of Loans	Principal Balance
	(Dollars in thousands)
Commercial and industrial	9	$	399	4	$	1,021	8	$	3,039	21	$	4,459	$	838,817	$	843,276	$	—
Commercial real estate	19	7,349		6	1,627		13	4,458		38	13,434		2,640,000		2,653,434		—
Commercial construction	—	—		—	—		1	304		1	304		373,064		373,368		—
Small business	11	93		4	9		13	69		28	171		96,075		96,246		—
Residential real estate	20	3,119		11	2,049		19	3,433		50	8,601		630,005		638,606		—
Home equity	21	1,526		11	903		20	1,338		52	3,767		924,036		927,803		—
Other consumer (1)	297	231		12	65		13	25		322	321		14,667		14,988		—
Total	377	$	12,717	48	$	5,674	87	$	12,666	512	$	31,057	$	5,516,664	$	5,547,721	$	—

(1) Other consumer portfolio is inclusive of deposit account overdrafts recorded as loan balances.

Troubled Debt Restructurings

In the course of resolving nonperforming loans, the Bank may choose to restructure the contractual terms of certain loans. The Bank attempts to work out an alternative payment schedule with the borrower in order to avoid foreclosure actions. Any loans that are modified are reviewed by the Bank to identify if a TDR has occurred, which is when, for economic or legal reasons related to a borrower’s financial difficulties, the Bank grants a concession to the borrower that it would not otherwise consider. Terms may be modified to fit the ability of the borrower to repay in line with its current financial status and the restructuring of

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the loan may include the transfer of assets from the borrower to satisfy the debt, a modification of loan terms, or a combination of the two.

The following table shows the Company’s total TDRs and other pertinent information as of the dates indicated:

	December 31
	2016		2015
	(Dollars in thousands)
TDRs on accrual status	$	27,093	$	32,849
TDRs on nonaccrual status	5,199		5,225
Total TDRs	$	32,292	$	38,074
Amount of specific reserves included in the allowance for loan loss associated with TDRs:	$	1,417	$	1,628
Additional commitments to lend to a borrower who has been a party to a TDR:	$	1,378	$	972

The Company’s policy is to have any restructured loan which is on nonaccrual status prior to being modified remain on nonaccrual status for six months, subsequent to being modified, before management considers its return to accrual status. If the restructured loan is on accrual status prior to being modified, it is reviewed to determine if the modified loan should remain on accrual status. Additionally, loans classified as TDRs are adjusted to reflect the changes in value of the recorded investment in the loan, if any, resulting from the granting of a concession. For all residential loan modifications, the borrower must perform during a 90 day trial period before the modification is finalized.

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The following table shows the modifications which occurred during the periods indicated and the change in the recorded investment subsequent to the modifications occurring:

	Years Ended December 31
	2016
	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment(1)
	(Dollars in thousands)
Troubled debt restructurings
Commercial and industrial	10	$	1,623	$	1,623
Commercial real estate	10	2,959		2,959
Small business	3	188		188
Residential real estate	8	1,808		1,850
Home equity	13	932		932
Other consumer	6	153		153
Total	50	$	7,663	$	7,705
	2015
Troubled debt restructurings
Commercial and industrial	13	$	1,314	$	1,314
Commercial real estate	6	2,941		2,941
Small business	9	293		293
Residential real estate	8	843		870
Home equity	8	694		694
Total	44	$	6,085	$	6,112
	2014
Troubled debt restructurings
Commercial and industrial	12	$	681	$	681
Commercial real estate	13	4,329		4,329
Small business	5	133		133
Residential real estate	9	1,535		1,568
Home equity	11	923		926
Other consumer	1	8		8
Total	51	$	7,609	$	7,645

(1) The post-modification balances represent the legal principal balance of the loan on the date of modification. These amounts may show an increase when modifications include a capitalization of interest.

The following table shows the Company’s post-modification balance of TDRs listed by type of modification as of the periods indicated:

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	Years Ended December 31
	2016		2015		2014
	(Dollars in thousands)
Extended maturity	$	5,044	$	2,936	$	3,441
Adjusted interest rate	92		—		727
Combination rate and maturity	1,035		2,199		2,640
Court ordered concession	1,534		977		837
Total	$	7,705	$	6,112	$	7,645

The Company considers a loan to have defaulted when it reaches 90 days past due. The following table shows loans that were modified during the prior twelve months and subsequently defaulted during the periods indicated:

	Years Ended December 31
	2016			2015			2014
	Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment
	(Dollars in thousands)
Troubled debt restructurings that subsequently defaulted
Commercial & industrial	—	$	—	3	$	339	2	$	196
Commercial real estate	1	249		1	502		—	—
Residential real estate	—	—		2	326		3	214
Home equity	—	—		1	100		—	—
Total	1	$	249	7	$	1,267	5	$	410

All TDR loans are considered impaired and therefore are subject to a specific review for credit losses. The impairment analysis appropriately discounts the present value of the anticipated cash flows by the loan’s contractual rate of interest in effect prior to the loan’s modification. The amount of impairment, if any, is recorded as a specific loss allocation to each individual loan in the allowance for loan losses. Commercial loans (commercial and industrial, commercial construction, commercial real estate and small business loans), residential loans, and home equity loans that have been classified as TDRs and which subsequently default are reviewed to determine if the loan should be deemed collateral dependent. In such an instance, any shortfall between the value of the collateral and the carrying value of the loan is determined by measuring the recorded investment in the loan against the fair value of the collateral less costs to sell. The Company charges off the amount of any confirmed loan loss in the period when the loans, or portion of loans, are deemed uncollectible. Smaller balance consumer TDR loans are reviewed for performance to determine when a charge-off is appropriate.

Impaired Loans

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed.

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The table below sets forth information regarding the Company’s impaired loans. The information for average recorded investment and interest income recognized is reflective of the full period being presented and does not take into account the date at which a loan was deemed to be impaired. See information below as of the dates indicated:

	As of and For the Years Ended December 31
	2016
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
	(Dollars in thousands)
With no related allowance recorded
Commercial and industrial	$	28,776	$	29,772	$	—	$	26,472	$	927
Commercial real estate	11,628		12,891		—		12,744		437
Small business	494		569		—		534		20
Residential real estate	4,216		4,427		—		4,302		185
Home equity	4,485		4,572		—		4,602		184
Other consumer	146		146		—		160		11
Subtotal	49,745		52,377		—		48,814		1,764
With an allowance recorded
Commercial and industrial	10,402		10,440		3,661		10,760		325
Commercial real estate	5,185		5,533		196		5,491		200
Small business	377		392		8		408		21
Residential real estate	9,959		10,530		1,086		10,065		332
Home equity	1,378		1,547		242		1,403		50
Other consumer	251		252		21		268		8
Subtotal	27,552		28,694		5,214		28,395		936
Total	$	77,297	$	81,071	$	5,214	$	77,209	$	2,700
	2015
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
	(Dollars in thousands)
With no related allowance recorded
Commercial and industrial	$	2,613	$	3,002	$	—	$	3,024	$	71
Commercial real estate	12,008		13,128		—		11,676		375
Commercial construction	304		305		—		308		—
Small business	527		618		—		584		22
Residential real estate	3,874		4,033		—		3,958		157
Home equity	4,893		5,005		—		5,023		195
Other consumer	184		185		—		201		15
Subtotal	24,403		26,276		—		24,774		835
With an allowance recorded
Commercial and industrial	2,534		2,648		183		2,848		48
Commercial real estate	10,978		11,047		204		10,789		592
Small business	494		523		4		535		30
Residential real estate	11,531		12,652		1,278		11,669		460
Home equity	1,096		1,287		238		655		14
Other consumer	374		389		23		408		14
Subtotal	27,007		28,546		1,930		26,904		1,158
Total	$	51,410	$	54,822	$	1,930	$	51,678	$	1,993

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	2014
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
	(Dollars in thousands)
With no related allowance recorded
Commercial and industrial	$	3,005	$	3,278	$	—	$	4,557	$	258
Commercial real estate	15,982		17,164		—		16,703		1,025
Commercial construction	311		311		—		311		13
Small business	692		718		—		772		45
Residential real estate	2,439		2,502		—		2,493		102
Home equity	4,169		4,221		—		4,264		198
Other consumer	338		341		—		364		24
Subtotal	26,936		28,535		—		29,464		1,665
With an allowance recorded
Commercial and industrial	1,649		1,859		412		2,032		98
Commercial real estate	14,747		15,514		197		15,650		842
Small business	396		458		7		456		32
Residential real estate	12,616		13,727		1,500		12,817		537
Home equity	1,161		1,264		262		1,203		46
Other consumer	530		530		38		580		22
Subtotal	31,099		33,352		2,416		32,738		1,577
Total	$	58,035	$	61,887	$	2,416	$	62,202	$	3,242

Purchased Credit Impaired Loans

Certain loans acquired by the Company may have shown evidence of deterioration of credit quality since origination and it was deemed unlikely that the Company would be able to collect all contractually required payments. As such, these loans were deemed to be PCI loans and the carrying value and prospective income recognition are predicated upon future cash flows expected to be collected. The following table displays certain information pertaining to PCI loans at the dates indicated:

	December 31
	2016		2015
	(Dollars in thousands)
Outstanding balance	$	20,477	$	23,199
Carrying amount	$	18,392	$	20,595

The following table summarizes activity in the accretable yield for the PCI loan portfolio:

	2016			2015
	(Dollars in thousands)
Beginning balance	$	2,827		$	2,974
Acquisition	—			319
Accretion	(1,540		)	(2,485		)
Other change in expected cash flows (1)	953			1,721
Reclassification from nonaccretable difference for loans which have paid off (2)	130			298
Ending balance	$	2,370		$	2,827

(1) Represents changes in cash flows expected to be collected resulting in increased interest income as a prospective yield adjustment over the remaining life of the loan(s).

(2) Results in increased income during the period when a loan pays off at amount greater than originally expected.

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NOTE 5BANK PREMISES AND EQUIPMENT

Bank premises and equipment at December 31, were as follows:

	2016			2015			Estimated Useful Life
	(Dollars in thousands)						(In years)
Cost
Land	$	20,585		$	20,780		n/a
Bank premises	43,553			39,182			5-39
Leasehold improvements	24,387			22,817			4-27
Furniture and equipment	58,237			55,336			1-12
Total cost	146,762			138,115
Accumulated depreciation	(68,282		)	(62,452		)
Net bank premises and equipment	$	78,480		$	75,663

Depreciation expense related to bank premises and equipment was $7.3 million in 2016, $7.0 million in 2015, and $6.6 million in 2014, which is primarily included in occupancy and equipment expenses. Depreciation expense relating to computer software is included within other noninterest expense. In addition, the Company has recognized impairment of $16,000, $109,000, and $670,000 during 2016, 2015 and 2014, respectively, relating to certain Bank premises.

NOTE 6GOODWILL AND OTHER INTANGIBLE ASSETS

The following table sets forth the carrying value of goodwill and other intangible assets, net of accumulated amortization, at December 31:

	2016		2015
	(Dollars in thousands)
Balances not subject to amortization
Goodwill	$	221,526	$	201,083
Balances subject to amortization
Core deposit intangibles	8,527		10,264
Other intangible assets	1,321		1,562
Total other intangible assets	9,848		11,826
Total goodwill and other intangible assets	$	231,374	$	212,909

The changes in the carrying value of goodwill for the periods indicated were as follows:

	2016		2015
	(Dollars in thousands)
Balance at beginning of year	$	201,083	$	170,421
Acquisitions	20,443		30,662
Balance at end of year	$	221,526	$	201,083

The gross carrying amount and accumulated amortization of other intangible assets were as follows at the periods indicated:

	December 31
	2016							2015
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
	(Dollars in thousands)
Core deposit intangibles	$	23,917	$	(15,390	)	$	8,527	$	23,367	$	(13,103	)	$	10,264
Other intangible assets	3,020		(1,699		)	1,321		3,051		(1,489		)	1,562
Total	$	26,937	$	(17,089	)	$	9,848	$	26,418	$	(14,592	)	$	11,826

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Amortization of intangible assets was $2.8 million for both 2016 and 2015, and $2.3 million for 2014.

The following table sets forth the estimated annual amortization expense of intangible assets for each of the next five years:

Year	Amount
	(Dollars in thousands)
2017	$	3,002
2018	$	1,888
2019	$	1,232
2020	$	1,035
2021	$	939

The original weighted average amortization period for intangible assets is 9.8 years.

NOTE 7DEPOSITS

The following is a summary of the scheduled maturities of time deposits as of December 31:

	2016				2015
	(Dollars in thousands)
1 year or less	$	430,834	66.4	%	$	488,046	71.2	%
Over 1 year to 2 years	82,627		12.7	%	83,244		12.2	%
Over 2 years to 3 years	44,190		6.8	%	31,017		4.5	%
Over 3 years to 4 years	49,446		7.6	%	35,448		5.2	%
Over 4 years to 5 years	42,055		6.5	%	47,075		6.9	%
Total	$	649,152	100.0	%	$	684,830	100.0	%

The amounts of overdraft deposits that were reclassified to the loan category at December 31, 2016 and 2015 were $2.3 million and $2.8 million, respectively.

The Company has pledged assets as collateral covering certain deposits in the amount of $299.7 million and $298.8 million at December 31, 2016 and 2015, respectively.

The Bank's deposit accounts are insured to the maximum extent permitted by law by the Deposit Insurance Fund which is administered by the FDIC. The FDIC offers insurance coverage on deposits up to the federally insured limit of $250,000. The amount of time deposit accounts equal to and greater than $250,000 as of December 31, 2016 and 2015 is $75.3 million and $69.6 million, respectively. 

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NOTE 8BORROWINGS

Federal Home Loan Bank Borrowings

Advances payable to the Federal Home Loan Bank as of December 31 are summarized as follows:

	2016				2015
			Weighted				Weighted
			Average				Average
	Total		Contractual		Total		Contractual
	Outstanding		Rate		Outstanding		Rate
	(Dollars in thousands)
Stated Maturity
2016	$	—	—	%	$	52,025	1.23	%
2017	50,000		2.43	%	40,154		3.10	%
2018	—		—	%	7,043		1.74	%
2019	—		—	%	2,011		1.99	%
Subtotal	50,000		2.43	%	101,233		2.00	%
Amortizing advances	819				847
Total Federal Home Loan Bank Advances	$	50,819			$	102,080

To manage the interest rate risk of these advances, the Company has entered into an interest rate swap which effectively converts $25.0 million of the FHLB advances to a fixed rate of 2.85% and 3.25% at December 31, 2016 and 2015, respectively. Inclusive of the impact of the swap, the weighted average rate of the FHLB borrowings was 3.42% in 2016 and 2.60% in the prior year.

During 2016, exclusive of the impact from the NEB acquisition, the Company repaid $49.0 million of FHLB borrowings prior to the maturity date of the borrowings. This prepayment resulted in a loss on extinguishment of debt of $437,000. The Company also repaid $13.0 million of FHLB borrowings in 2015, resulting in a loss on extinguishment of debt of $122,000.

The Company’s FHLB advances are collateralized by a blanket pledge agreement on the Bank’s FHLB stock, certain qualified investment securities, deposits at the FHLB, and by residential mortgages, and certain commercial real estate loans held in the Bank’s portfolio. The carrying value of the loans pledged as collateral for these borrowings totaled $1.4 billion at both December 31, 2016 and 2015. The Bank’s unused remaining available borrowing capacity at the FHLB was approximately $793.1 million and $777.5 million at December 31, 2016 and 2015, respectively, inclusive of a $5.0 million line of credit. At December 31, 2016 and 2015, the Company had sufficient collateral at the FHLB to support its obligations and was in compliance with the FHLB's collateral pledging program.

Short-Term Debt

The Company’s short-term borrowings of customer repurchase agreements amounted to $176.9 million and $134.0 million at December 31, 2016 and 2015, respectively.

The interest expense on short-term borrowings was $208,000, $210,000, and $200,000 for the years ended December 31, 2016, 2015, and 2014, respectively.

Customer Repurchase Agreements. The Company can raise additional liquidity by entering into repurchase agreements at its discretion. These repurchases are accounted for as a secured borrowing transaction for accounting purposes. Payments on such borrowings are interest only until the scheduled repurchase date. In a repurchase agreement the Company is subject to the risk that the purchaser may default at maturity and not return the securities underlying the agreements. In order to minimize this potential risk, the Company enter deals with customers whose agreements stipulate that the securities underlying the agreement are not delivered to the customer and instead are held in segregated safekeeping accounts by the Company's safekeeping agents.

The table below sets forth information regarding the Company’s repurchase agreements allocated by source of collateral at the dates indicated:

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	December 31, 2016
	Remaining Contractual Maturity of the Agreements
	Overnight and Continuous		Up to 30 Days		30-90 Days		Greater than 90 Days		Total
	(Dollars in thousands)
Sources of Collateral
U.S. government agency securities	$	20,233	$	—	$	—	$	—	$	20,233
Agency mortgage-backed securities	79,079		—		—		—		79,079
Agency collateralized mortgage obligations	77,601		—		—		—		77,601
Total borrowings	$	176,913	$	—	$	—	$	—	$	176,913
	December 31, 2015
	Remaining Contractual Maturity of the Agreements
	Overnight and Continuous		Up to 30 Days		30-90 Days		Greater than 90 Days		Total
	(Dollars in thousands)
Sources of Collateral
U.S. government agency securities	$	10,157	$	—	$	—	$	—	$	10,157
Agency mortgage-backed securities	69,142		—		—		—		69,142
Agency collateralized mortgage obligations	54,659		—		—		—		54,659
Total borrowings	$	133,958	$	—	$	—	$	—	$	133,958

Certain counterparties monitor collateral, and may request additional collateral to be posted from time to time. For further information regarding the Company's repurchase agreements see Note 12, Balance Sheet Offsetting.

Long-Term Debt

The following table summarizes long-term debt, net of debt issuances costs, as of the periods indicated:

	December 31
	2016		2015
	(Dollars in thousands)
Junior subordinated debentures
Capital Trust V	$	51,500	$	51,497
Slades Ferry Trust I	10,224		10,219
Central Trust I	5,302		5,516
Central Trust II	6,081		6,074
Subordinated debentures	34,635		34,589
Total long-term debt	$	107,742	$	107,895

The interest expense on long-term debt was $5.8 million, $6.6 million, and $6.4 million for the years ended December 31, 2016, 2015, and 2014, respectively.

Junior Subordinated Debentures: The junior subordinated debentures are issued to various trust subsidiaries of the Company. These trusts are considered to be variable interest entities for which the Company is not the primary beneficiary, and therefore the accounts of the trusts are not included in the Company’s consolidated financial statements. These trusts were formed for the purpose of issuing trust preferred securities, which were then sold in a private placement offering. The proceeds from the sale of the securities and the issuance of common stock by these trusts were invested in these Junior Subordinated Debentures issued by the Company.

For regulatory purposes, bank holding companies are allowed to include trust preferred securities in Tier 1 capital up to a certain limit. Provisions in the Dodd-Frank Act generally exclude trust preferred securities from Tier 1 capital, however, holding

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companies with consolidated assets of less than $15 billion, such as the Company, are able to continue to include these instruments in Tier 1 capital, but no such securities issued in the future will count as Tier 1 capital.

Information relating to these trust preferred securities are as follows:

Trust	Description of Capital Securities
Capital Trust V	$50.0 million due in 2037, interest at a variable rate of 3 month LIBOR plus 1.48% (2.44% at December 31, 2016), which had previously been converted to a fixed rate of 6.52%, through the use of an interest rate swap which expired on December 28, 2016. Beginning on January 17, 2017, the borrowings will be subject to a forward starting interest rate swap, converting the interest to a fixed rate of 2.84% through December 15, 2021. These securities are callable quarterly, until maturity.
Slades Ferry Trust I	$10.0 million due in 2034, bearing interest at a variable rate of 3 month LIBOR plus 2.79% (3.78% at December 31, 2016). These securities are callable quarterly, until maturity.
Central Trust I	$5.1 million due in 2034, bearing interest at a variable rate of 3 month LIBOR plus 2.44% (3.40% at December 31, 2016). These securities are callable quarterly, until maturity.
Central Trust II	$5.9 million due in 2037, bearing a fixed interest rate of 7.015% until March 15, 2017. Subsequent to this date, the interest will be variable (3 month LIBOR plus 1.65%) and the securities will become callable quarterly, until maturity.

All obligations under these trust preferred securities are unconditionally guaranteed by the Company.

Subordinated Debentures: In the first quarter of 2015, the Bank redeemed $30.0 million of subordinated debt that had an original maturity of October 1, 2019, without penalty. The interest rate at the time of redemption was floating rate of LIBOR plus 3.00%. The subordinated debentures were issued to USB Capital Resources, Inc., a wholly-owned subsidiary of U.S. Bank National Association.

At December 31, 2016 and 2015 there was $35.0 million of outstanding subordinated debentures at the bank holding company. The subordinated debentures were issued to several investors via private placement on November 17, 2014. The subordinated debt matures on November 15, 2024, however with regulatory approval, the Bank may redeem the subordinated debt without penalty at any scheduled payment date on or after November 15, 2019 with 30 days notice. The interest rate is fixed at 4.75% through November 15, 2019, after which it converts to LIBOR plus 2.98%.

The following table sets forth the contractual maturities of long-term debt over the next five years:

	2017		2018		2019		2020		2021		Thereafter		Total
	(Dollars in thousands)
Junior subordinated debentures
Capital trust V	$	—	$	—	$	—	$	—	$	—	$	51,547	$	51,547
Slades ferry trust I	$	—	$	—	$	—	$	—	$	—	$	10,310	$	10,310
Central trust I	$	—	$	—	$	—	$	—	$	—	$	5,258	$	5,258
Central trust II	$	—	$	—	$	—	$	—	$	—	$	6,083	$	6,083
Subordinated debentures	$	—	$	—	$	—	$	—	$	—	$	35,000	$	35,000

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NOTE 9EARNINGS PER SHARE

Earnings per share consisted of the following components for the years ended December 31:

	2016		2015			2014
	(Dollars in thousands, except per share data)
Net income	$	76,648	$	64,960		$	59,845
Weighted Average Shares
Basic shares	26,404,071		25,891,382			23,899,562
Effect of dilutive securities	51,847		68,566			93,815
Diluted shares	26,455,918		25,959,948			23,993,377
Net income per share
Basic EPS	$	2.90	$	2.51		$	2.50
Effect of dilutive securities	—		(0.01		)	(0.01		)
Diluted EPS	$	2.90	$	2.50		$	2.49

There were no options to purchase common stock and there were no shares of performance-based restricted stock that were excluded from the calculation of diluted earnings per share because they were anti-dilutive during the years ended December 31, 2016, 2015, and 2014.

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NOTE 10STOCK BASED COMPENSATION

The Company's stock based plans include the Second Amended and Restated 2005 Employee Stock Plan (“2005 Plan”) and the 2010 Nonemployee Director Stock Plan (“2010 Plan”) both of which have been approved by the Company’s Board of Directors and shareholders. The Company may award shares from these plans as either stock options or restricted stock from its pool of authorized but unissued shares.

The following table presents the amount of cumulatively granted stock options and restricted stock awards, net of forfeitures, through December 31, 2016:

	Authorized Awards	Cumulative Granted, Net of Forfeitures		Total	Authorized but Unissued
		Stock Option  Awards	Restricted Stock  Awards
2005 Plan	1,650,000	537,941	650,485	1,188,426	461,574
2010 Plan	314,600	37,000	86,245	123,245	191,355

The following table presents the pre-tax expense associated with stock option and restricted stock awards and the related tax benefits recognized for the years presented:

	Years Ended December 31
	2016		2015		2014
	(Dollars in thousands)
Stock based compensation expense
Stock options	$	—	$	—	$	36
Restricted stock awards(1)	2,590		2,296		2,135
Directors’ fee expense
Stock options	72		—		14
Restricted stock awards	303		194		527
Total stock based award expense	$	2,965	$	2,490	$	2,712
Related tax benefits recognized in earnings	$	1,211	$	1,122	$	945

(1) Inclusive of compensation expense associated with time-vested and performance-based restricted stock awards.

Expense related to awards issued to directors are recognized as directors’ fees within other noninterest expense.

The Company has standard form agreements used for stock option and restricted stock awards. The standard form agreements used for the Chief Executive Officer and all other Executive Officers have previously been disclosed in Securities and Exchange Commission filings and generally provide that: (1) any unvested options or unvested restricted stock vest upon a Change of Control; and, that (2) any stock options which vest pursuant to a Change of Control, which is an event described in Section 280G of the Internal Revenue Code of 1986, will be cashed out at the difference between the acquisition price and the exercise price of the stock option.

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Stock Options

The fair value of each option grant is estimated on the date of the grant using the Black-Scholes option-pricing model with the following assumptions used for grants under the identified plans:

• Expected volatility is based on the standard deviation of the historical volatility of the weekly adjusted closing price of the Company’s shares for a period equivalent to the expected life of the option.

• Expected life represents the period of time that the option is expected to be outstanding, taking into account the contractual term, historical exercise/forfeiture behavior, and the vesting period, if any.

• Expected dividend yield is an annualized rate calculated using the most recent dividend payment at time of grant and the Company’s average trailing twelve-month daily closing stock price.

• The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for a period equivalent to the expected life of the option.

• The stock based compensation expense recognized in earnings should be based on the amount of awards ultimately expected to vest, therefore a forfeiture assumption is estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Stock based compensation expense recognized has been reduced for annualized estimated forfeitures of 4.5% in 2016 and 2015 and 3.5% in 2014 based on historical experience.

The Company made the following awards of nonqualified options to purchase shares of common stock in 2016. There were no such awards made in 2015 or 2014.

	Year Ended December 31, 2016
Date of grant	7/14/2016			2/20/2016
Plan	2010			2010
Options granted	5,000			5,000
Vesting period (beginning on the grant date)	18 months			22 months
Expiration date	7/14/2026			2/20/2026
Expected volatility	32.28		%	32.44		%
Expected life (years)	5.5			5.5
Expected dividend yield	2.37		%	2.28		%
Risk free interest rate	1.14		%	1.29		%
Fair value per option	$	11.46		$	10.59

Under all of the Company’s stock based plans, the option exercise price is based upon the average of the high and low trading value of the stock on the date of grant. Stock option awards granted to date under all plans expire through 2026.

The following table presents relevant information relating to the Company’s stock options for the periods indicated:

	Years Ended December 31
	2016		2015		2014
	(Dollars in thousands, except per share data)
Fair value of stock options vested based on grant date fair value	$	37	$	14	$	211
Intrinsic value of stock options exercised	$	494	$	3,362	$	1,210
Cash received from stock option exercises	$	680	$	6,105	$	6,285
Tax benefit realized on stock option exercises/repurchase	$	204	$	1,362	$	442
Weighted average grant date fair value of options granted (per share)	$	11.03	$	—	$	—

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A summary of stock option activity of the Company’s Stock Option Grants for the year ended December 31, 2016 is presented in the table below:

	Outstanding								Nonvested
	Stock Option Awards			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (1)		Stock Option Awards		Weighted Average Grant Date Fair Value
	(Dollars in thousands, except per share data)
Balance at January 1, 2016	121,900			$	28.76				—		$	—
Granted	10,000			45.69					10,000		11.03
Exercised	(22,250	)		30.58					—		—
Vested	n/a			n/a					(3,334	)	11.03
Forfeited	—			—					—		—
Expired	—			—					—		—
Balance at December 31, 2016	109,650		(2)	$	29.93	3.02 years	$	4,443	6,666		$	11.03
Options outstanding and expected to vest at December 31, 2016	109,498		(3)	$	29.91	3.01 years	$	4,439
Options exercisable at December 31, 2016	102,984		(4)	$	28.91	2.61 years	$	4,278
Unrecognized compensation cost, including forfeiture estimate													$	37
Weighted average remaining recognition period (years)													1.01 years

(1) The aggregate intrinsic value in the preceding tables represents the total pre-tax intrinsic value, based on the average of the high price and low price at which the Company’s common stock traded on December 31, 2016 of $70.45, which would have been received by the option holders had they all exercised their options as of that date.

(2) Inclusive of 34,000 stock options outstanding to Directors.

(3) Inclusive of 33,848 vested stock options and expected to vest to Directors.

(4) Inclusive of 27,334 vested stock options outstanding to Directors.

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Restricted Stock

The Company grants both time-vested restricted stock awards as well as performance-based restricted stock awards. During the years ended December 31, 2016, 2015, and 2014 the Company has made the following restricted stock award grants:

	Shares Granted	Plan	Fair Value (1)		Vesting Period
Time-vested
2016
2/11/2016	51,475	2005	$	41.96	Ratably over 5 years from grant date
3/1/2016	600	2005	$	44.37	Ratably over 5 years from grant date
5/24/2016	8,700	2010	$	48.34	At the end of 5 years from grant date (2)
9/19/2016	800	2005	$	52.92	Ratably over 5 years from grant date
11/7/2016	500	2005	$	54.28	Ratably over 5 years from grant date
11/14/2016	725	2010	$	63.43	Once on May 24, 2021 (3)
2015
2/11/2015	31,500	2005	$	39.42	Ratably over 5 years from grant date
2/12/2015	25,910	2005	$	40.03	Ratably over 5 years from grant date
3/19/2015	3,800	2005	$	43.56	Ratably over 5 years from grant date
4/27/2015	625	2005	$	41.61	At the end of 3 years from grant date
4/27/2015	1,875	2005	$	41.61	At the end of 5 years from grant date
5/27/2015	8,800	2010	$	45.02	At the end of 5 years from grant date (2)
7/14/2015	800	2010	$	47.82	Once on May 27, 2020 (4)
10/13/2015	1,000	2005	$	46.09	Ratably over 5 years from grant date
10/20/2015	2,000	2005	$	46.47	Ratably over 5 years from grant date
2014
3/20/2014	65,950	2005	$	39.82	Ratably over 5 years from grant date
3/31/2014	3,000	2005	$	39.00	Ratably over 3 years from grant date
5/20/2014	10,920	2010	$	35.08	At the end of 5 years from grant date (2)
11/20/2014	2,000	2005	$	39.11	Ratably over 5 years from grant date
12/11/2014	2,000	2005	$	40.89	Ratably over 5 years from grant date
Performance-based
2016
2/11/2016	20,450	2005	$	41.96	The earlier of: the date on which it is determined if the performance goal has been achieved; or, March 31, 2019.
2015
2/12/2015	21,780	2005	$	40.03	The earlier of: the date on which it is determined if the performance goal has been achieved; or, March 31, 2018.
2014
3/20/2014	20,700	2005	$	39.82	The earlier of: the date on which it is determined if the performance goal has been achieved; or, March 31, 2017.

(1) The fair value of the restricted stock awards are based upon the average of the high and low prices at which the Company’s common stock traded on the date of grant. The holders of time-vested restricted stock awards participate fully in the rewards of stock ownership of the Company, including voting and dividend rights. The holders of performance-based restricted stock awards do not participate in the rewards of stock ownership of the Company until vested. The holders of all restricted stock awards are not required to pay any consideration to the Company for the awards.

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(2) These restricted stock grants will vest at the end of a five year period, or earlier if the director ceases to be a director for any reason other than cause, such as, for example, by retirement.

(3) These restricted stock grants will vest on May 24, 2021, or earlier if the director ceases to be a director for any reason other than cause, such as, for example, by retirement.

(4) These restricted stock grants will vest on May 27, 2020, or earlier if the director ceases to be a director for any reason other than cause, such as, for example, by retirement.

The following table presents the fair value of restricted stock awards vesting during the periods presented:

	Years Ended December 31
	2016		2015		2014
	(Dollars in thousands)
Fair value of restricted stock awards upon vesting	$	3,019	$	2,610	$	3,293

A summary of the status of the Company’s Restricted Stock Award Grants for the year ended December 31, 2016 is presented in the table below:

	Outstanding Restricted Stock Awards			Weighted Average Grant Price ($)
	(Dollars in thousands, except per share data)
Balance at January 1, 2016	264,944			$	36.03
Granted	83,250			43.01
Vested/released	(67,242	)		32.96
Forfeited	(16,637	)		38.06
Balance at December 31, 2016	264,315		(1)	$	38.88
Unrecognized compensation cost (inclusive of directors’ fees), including forfeiture estimate						$	6,268
Weighted average remaining recognition period (years)						2.88

(1) Inclusive of 47,325 restricted stock awards outstanding to Directors.

NOTE 11DERIVATIVES AND HEDGING ACTIVITIES

The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally to manage the Company’s interest rate risk. Additionally, the Company enters into interest rate derivatives and foreign exchange contracts to accommodate the business requirements of its customers (“customer related positions”). The Company minimizes the market and liquidity risks of customer related positions by entering into similar offsetting positions with broker-dealers. Derivative instruments are carried at fair value in the Company’s financial statements. The accounting for changes in the fair value of a derivative instrument is dependent upon whether or not it qualifies as a hedge for accounting purposes, and further, by the type of hedging relationship.

The Company does not enter into proprietary trading positions for any derivatives.

Interest Rate Positions

The Company currently utilizes interest rate swap agreements as hedging instruments against interest rate risk associated with the Company’s borrowings. An interest rate swap is an agreement whereby one party agrees to pay a floating rate of interest on a notional principal amount in exchange for receiving a fixed rate of interest on the same notional amount, for a predetermined period of time, from a second party. The amounts relating to the notional principal amount are not actually exchanged. The maximum length of time over which the Company is currently hedging its exposure to the variability in future cash flows for forecasted transactions related to the payment of variable interest on existing financial instruments is five years.

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The following table reflects the Company’s derivative positions for the periods indicated below for interest rate swaps which qualify as cash flow hedges for accounting purposes:

December 31, 2016
Notional Amount		Trade Date	Effective Date	Maturity Date		Receive (Variable) Index	Current Rate Received		Pay Fixed Swap Rate		Fair Value
(Dollars in thousands)
$	25,000	9-Dec-08	10-Dec-08	10-Dec-18		3 Month LIBOR	0.95	%	2.94	%	$	(740	)
25,000		1-Apr-16	17-Jan-17	15-Dec-21	(1)	3 Month LIBOR	N/A		1.36	%	689
25,000		1-Apr-16	17-Jan-17	15-Dec-21	(1)	3 Month LIBOR	N/A		1.36	%	675
$	75,000										$	624
December 31, 2015
Notional Amount		Trade Date	Effective Date	Maturity Date		Receive (Variable) Index	Current Rate Received		Pay Fixed Swap Rate		Fair Value
(Dollars in thousands)
$	25,000	16-Feb-06	28-Dec-06	28-Dec-16		3 Month LIBOR	0.51	%	5.04	%	$	(1,054	)
25,000		16-Feb-06	28-Dec-06	28-Dec-16		3 Month LIBOR	0.51	%	5.04	%	(1,055		)
25,000		9-Dec-08	10-Dec-08	10-Dec-18		3 Month LIBOR	0.49	%	2.94	%	(1,164		)
$	75,000										$	(3,273	)

(1) In April 2016, the Company entered into two forward starting swaps with notional amounts of $25.0 million each, with the intention of hedging $50.0 million of existing junior subordinated debentures, as the current hedges on this borrowing expired in December 2016.

For derivative instruments that are designated and qualify as cash flow hedging instruments, the effective portion of the gains or losses is reported as a component of other comprehensive income ("OCI"), and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The Company expects approximately $291,000 (pre-tax) to be reclassified to interest expense from OCI, related to the Company’s cash flow hedges, in the next twelve months.  This reclassification is due to anticipated payments that will be made and/or received on the swaps based upon the forward curve as of December 31, 2016.

The Company recognized $244,000 of net amortization income that was an offset to interest expense related to previously terminated swaps for the years ended December 31, 2016, 2015 and 2014.

In 2014, the Company repaid certain borrowings and consequently terminated the corresponding cash flow hedges. As a result of the termination of the cash flow hedges, the Company reclassified a pre-tax loss of approximately $1.1 million out of OCI and into other noninterest expense.

The Company had no fair value hedges during December 31, 2016, 2015, and 2014.

Customer Related Positions

Loan level derivatives, primarily interest rate swaps, offered to commercial borrowers through the Company’s loan level derivative program do not qualify as hedges for accounting purposes. The Company believes that its exposure to commercial customer derivatives is limited because these contracts are simultaneously matched at inception with an offsetting dealer transaction. The commercial customer derivative program allows the Company to retain variable-rate commercial loans while allowing the customer to synthetically fix the loan rate by entering into a variable-to-fixed interest rate swap.

Foreign exchange contracts offered to commercial borrowers through the Company’s derivative program do not qualify as hedges for accounting purposes. The Company acts as a seller and buyer of foreign exchange contracts to accommodate its customers. To mitigate the market and liquidity risk associated with these derivatives, the Company enters into similar offsetting positions.

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The following table reflects the Company’s customer related derivative positions for the periods indicated below for those derivatives not designated as hedging:

	Number of Positions (1)	Notional Amount Maturing
		Less than 1 year		Less than 2 years		Less than 3 years		Less than 4 years		Thereafter		Total		Fair Value
	December 31, 2016
	(Dollars in thousands)
Loan level derivatives
Receive fixed, pay variable	222	$	30,245	$	21,708	$	63,771	$	165,783	$	567,897	$	849,404	$	12,005
Pay fixed, receive variable	207	$	30,245	$	21,708	$	63,771	$	165,783	$	567,897	$	849,404	$	(12,008	)
Foreign exchange contracts
Buys foreign currency, sells U.S. currency	33	$	45,711	$	—	$	—	$	—	$	—	$	45,711	$	(2,250	)
Buys U.S. currency, sells foreign currency	33	$	45,711	$	—	$	—	$	—	$	—	$	45,711	$	2,277
	December 31, 2015
	(Dollars in thousands)
Loan level derivatives
Receive fixed, pay variable	171	$	37,732	$	34,424	$	29,629	$	77,041	$	488,110	$	666,936	$	22,467
Pay fixed, receive variable	165	$	37,732	$	34,424	$	29,629	$	77,041	488,110		$	666,936	$	(22,462	)
Foreign exchange contracts
Buys foreign currency, sells U.S. currency	21	$	38,416	$	—	$	—	$	—	$	—	$	38,416	$	(354	)
Buys U.S. currency, sells foreign currency	21	$	38,416	$	—	$	—	$	—	$	—	$	38,416	$	382

(1) The Company may enter into one dealer swap agreement which offsets multiple commercial borrower swap agreements.

Mortgage Derivatives

Prior to closing and funding certain 1- 4 family residential mortgage loans, an interest rate lock commitment is generally extended to the borrower. During the period from commitment date to closing date, the Company is subject to the risk that market rates of interest may change. If market rates rise, investors generally will pay less to purchase such loans resulting in a reduction in the gain on sale of the loans or, possibly, a loss. In an effort to mitigate such risk, forward delivery sales commitments are executed, under which the Company agrees to deliver whole mortgage loans to various investors. These forward commitments carry a market price that has a strong inverse relationship to that of mortgage prices. Certain assumptions, including pull through rates and rate lock periods, are used in managing the existing and future economic hedges. The effectiveness of the economic hedges rely on the accuracy of these assumptions.    

The change in fair value on the interest rate lock commitments and forward delivery sale commitments are recorded in current period earnings as a component of mortgage banking income. In addition, the Company has elected the fair value option to carry loans held for sale at fair value. The change in fair value of loans held for sale is recorded in current period earnings as a component of mortgage banking income in accordance with the Company's fair value election. The change in fair value associated with loans held for sale was an increase of $87,000, a decrease of $22,000 and an increase of $18,000 for the years ended December 31, 2016, 2015, and 2014. These amounts were offset in earnings by the change in the fair value of mortgage derivatives. Additionally, the aggregate amount of net realized gains or losses on sales of such loans included within mortgage banking income amounted to $6.1 million, $4.7 million and $3.0 million for the years ended December 31, 2016, 2015 and 2014, respectively.

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The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the balance sheet at the periods indicated:

	Asset Derivatives					Liability Derivatives
		Fair Value at		Fair Value at			Fair Value at		Fair Value at
	Balance Sheet Location	December 31, 2016		December 31, 2015		Balance Sheet Location	December 31, 2016		December 31, 2015
	(Dollars in thousands)
Derivatives designated as hedges
Interest rate derivatives	Other assets	$	1,364	$	—	Other liabilities	$	740	$	3,273
Derivatives not designated as hedges
Customer Related Positions:
Loan level derivatives	Other assets	18,629		22,470		Other liabilities	18,632		22,465
Foreign exchange contracts	Other assets	2,338		602		Other liabilities	2,311		574
Mortgage Derivatives
Interest rate lock commitments	Other assets	430		233		Other liabilities	—		—
Forward sales agreements	Other assets	—		—		Other liabilities	233		1
Subtotal		21,397		23,305			21,176		23,040
Total		$	22,761	$	23,305		$	21,916	$	26,313

The table below presents the effect of the Company’s derivative financial instruments included in OCI and current earnings for the periods indicated:

	Years Ended December 31
	2016			2015			2014
	(Dollars in thousands)
Derivatives designated as hedges
Gain (loss) in OCI on derivatives (effective portion), net of tax	$	2,170		$	1,199		$	2,256
Loss reclassified from OCI into interest expense (effective portion)	$	(2,520	)	$	(2,828	)	$	(3,662	)
Loss reclassified from OCI into noninterest expense (loss on termination)	$	—		$	—		$	(1,122	)
Loss recognized in income on derivatives (ineffective portion and amount excluded from effectiveness testing)
Interest expense	$	—		$	—		$	—
Other expense	—			—			—
Total	$	—		$	—		$	—
Derivatives not designated as hedges
Changes in fair value of customer related positions
Other income	$	73		$	60		$	63
Other expenses	(82		)	(53		)	(4		)
Changes in fair value of mortgage derivatives
Mortgage banking income	(35		)	(50		)	49
Total	$	(44	)	$	(43	)	$	108

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By using derivatives, the Company is exposed to credit risk to the extent that counterparties to the derivative contracts do not perform as required. Should a counterparty fail to perform under the terms of a derivative contract, the Company’s credit exposure on interest rate swaps is limited to the net positive fair value and accrued interest of all swaps with each counterparty. The Company seeks to minimize counterparty credit risk through credit approvals, limits, monitoring procedures, and obtaining collateral, where appropriate. Institutional counterparties must have an investment grade credit rating and be approved by the Company’s Board of Directors. As such, management believes the risk of incurring credit losses on derivative contracts with those counterparties is remote and losses, if any, would be immaterial. The Company had $4.7 million and $2,000 in exposure relating to institutional counterparties at December 31, 2016 and 2015, respectively. The Company’s exposure relating to customer counterparties was approximately $16.1 million and $23.2 million at December 31, 2016 and 2015, respectively. Credit exposure may be reduced by the amount of collateral pledged by the counterparty.

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NOTE 12BALANCE SHEET OFFSETTING

The Company does not offset fair value amounts recognized for derivative instruments or repurchase agreements. The Company does net the amount recognized for the right to reclaim cash collateral against the obligation to return cash collateral arising from derivative instruments executed with the same counterparty under a master netting arrangement. Collateral legally required to be maintained at dealer banks by the Company is monitored and adjusted as necessary. At December 31, 2016 and 2015, it was determined that no additional collateral would have to be posted to immediately settle these instruments.

The following tables present the Company's asset and liability derivative positions and the potential effect of netting arrangements on its financial position, as of the periods indicated:

							Gross Amounts Not Offset in the Statement of Financial Position
	Gross Amounts Recognized		Gross Amounts Offset in the Statement of Financial Position		Net Amounts Presented in the Statement of Financial Position		Financial Instruments (1)		Collateral Pledged		Net Amount
	December 31, 2016
	(Dollars in thousands)
Derivative Assets
Interest rate swaps	$	1,364	$	—	$	1,364	$	961	$	—	$	403
Loan level derivatives	$	18,629	$	—	$	18,629	$	3,261	$	—	$	15,368
Customer foreign exchange contracts	2,338		—		2,338		—		—		2,338
	$	22,331	$	—	$	22,331	$	4,222	$	—	$	18,109
Derivative Liabilities
Interest rate swaps	$	740	$	—	$	740	$	—	$	740	$	—
Loan level derivatives	18,632		—		18,632		4,222		11,106		3,304
Customer foreign exchange contracts	2,311		—		2,311		—		—		2,311
Repurchase agreements
Customer repurchase agreements	176,913		—		176,913		—		176,913		—
	$	198,596	$	—	$	198,596	$	4,222	$	188,759	$	5,615

(1) Reflects offsetting derivative positions with the same counterparty.

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							Gross Amounts Not Offset in the Statement of Financial Position
	Gross Amounts Recognized		Gross Amounts Offset in the Statement of Financial Position		Net Amounts Presented in the Statement of Financial Position		Financial Instruments (1)		Collateral Pledged		Net Amount
	December 31, 2015
	(Dollars in thousands)
Derivative Assets
Loan level derivatives	$	22,470	$	—	$	22,470	$	2	$	—	$	22,468
Customer foreign exchange contracts	602		—		602		—		—		602
	$	23,072	$	—	$	23,072	$	2	$	—	$	23,070
Derivative Liabilities
Interest rate swaps	$	3,273	$	—	$	3,273	$	—	$	3,273	$	—
Loan level derivatives	22,465		—		22,465		2		22,461		2
Customer foreign exchange contracts	574		—		574		—		—		574
Repurchase agreements
Customer repurchase agreements	133,958		—		133,958		—		133,958		—
	$	160,270	$	—	$	160,270	$	2	$	159,692	$	576

(1) Reflects offsetting derivative positions with the same counterparty.

The Company has agreements with certain of its derivative counterparties that contain a provision where if the Company fails to maintain its status as a well capitalized institution, then the Company could be required to terminate any outstanding derivatives with the counterparty. All liability position interest rate swap and customer loan level swap counterparties have credit-risk contingent features as of the dates indicated in the table above. In addition, derivative instruments that contain credit-risk related contingent features that are in a net liability position require the Company to assign collateral as noted in the table above.

NOTE 13INCOME TAXES

The provision for income taxes is comprised of the following components:

	Years Ended December 31
	2016			2015		2014
	(Dollars in thousands)
Current expense
Federal	$	26,549		$	11,946	$	14,709
State	8,883			5,052		6,350
Total current expense	35,432			16,998		21,059
Deferred expense (benefit)
Federal	153			8,466		2,877
State	(158		)	1,754		(37		)
Total deferred expense (benefit)	(5		)	10,220		2,840
Total expense	$	35,427		$	27,218	$	23,899

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The difference between the statutory federal income tax rate of 35% and the effective income tax rate reported for the last three years is detailed below:

	Years Ended December 31
	2016					2015					2014
	(Dollars in thousands)
Computed statutory federal income tax provision	$	39,226		35.00	%	$	32,262		35.00	%	$	29,310		35.00	%
State taxes, net of federal tax benefit	5,643			5.03	%	4,500			4.88	%	4,104			4.90	%
Nontaxable interest, net	(996		)	(0.89	)%	(973		)	(1.06	)%	(795		)	(0.95	)%
New Markets Tax Credits	(6,360		)	(5.67	)%	(6,514		)	(7.07	)%	(6,708		)	(8.01	)%
Low Income Housing Project Investments	(1,641		)	(1.46	)%	(1,182		)	(1.28	)%	(594		)	(0.71	)%
Increase in cash surrender value of life insurance and gain on life insurance benefits	(1,431		)	(1.28	)%	(1,292		)	(1.40	)%	(1,782		)	(2.13	)%
Merger and other related costs (non-deductible)	210			0.19	%	185			0.20	%	274			0.33	%
Change in valuation allowance	28			0.02	%	41			0.04	%	—			—	%
Other, net	748			0.67	%	191			0.22	%	90			0.11	%
Total expense	$	35,427		31.61	%	$	27,218		29.53	%	$	23,899		28.54	%

The tax-effected components of the net deferred tax asset at December 31 were as follows:

	2016			2015
	(Dollars in thousands)
Deferred tax assets
Accrued expenses not deducted for tax purposes	$	15,401		$	14,621
Allowance for loan losses	24,681			22,744
Deferred gain on sale leaseback transaction	1,744			2,158
Derivatives fair value adjustment	—			1,033
Employee and director equity compensation	2,095			2,466
Federal Home Loan Bank borrowings fair value adjustment	82			108
Loan basis difference fair value adjustment	4,336			3,789
Net operating loss carry-forward	69			41
New Markets Tax Credit carry-forward	—			459
Other	1,015			451
Gross deferred tax assets	49,423			47,870
Valuation allowance	(69		)	(41		)
Total deferred tax assets net of valuation allowance	$	49,354		$	47,829
Deferred tax liabilities
Core deposit and other intangibles	$	3,040		$	3,785
Deferred loan fees, net	5,407			4,872
Fixed assets	6,168			7,269
Goodwill	14,737			14,576
Net unrealized gain on securities available for sale	105			805
Derivatives fair value adjustment	454			—
Other	3,909			2,468
Gross deferred tax liabilities	$	33,820		$	33,775
Total net deferred tax asset	$	15,534		$	14,054

Deferred tax assets are to be reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The realization of the tax benefit depends upon the existence of sufficient taxable income within the carry-back and future periods.

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The Company believes that it is more likely than not that its deferred tax assets as of December 31, 2016, excluding the deferred tax asset on certain state net operating losses, will be realized through the utilization of carry-back provisions to taxable income on prior years, future reversals of existing taxable temporary differences and by offsetting other future taxable income. The Company believes it is more likely than not that the deferred tax asset related to certain state net operating losses generated from the Company's investments in low income housing partnerships, which expire over a 20-year period, will not be realized and has recorded a valuation allowance of $69,000 at December 31, 2016, attributable to this deferred tax asset.

The Company has utilized all federal net operating loss carry forwards acquired from recent acquisitions that were subject to annual change in ownership limitations under Internal Revenue Code Section 382 as of December 31, 2016.  In addition, the Company’s general business credit carry forward from 2015 of $459,000 was fully utilized during 2016.  As such, the Company does not have a federal net operating loss carry forward or general business credit carry forward subject to expiration as of December 31, 2016.

Uncertainty in Income Taxes

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction as well as in various states.  The Company is subject to U.S. federal, state and local income tax examinations by tax authorities for the 2013 through 2015 tax years including any related income tax filings from its recent Bank acquisitions.  The Company believes that its income tax returns have been filed based upon applicable statutes, regulations and case law in effect at the time of filing, however, the Internal Revenue Service ("IRS") and /or state jurisdictions could disagree with the Company's interpretation upon examination. The Company accounts for uncertainties in income taxes by providing a tax reserve for certain positions. The following is a reconciliation of the beginning and ending amount of unrecognized tax benefits:

	(Dollars in thousands)
Balance at December 31, 2014	$	—
Reduction of tax positions for prior years	—
Increase for prior year tax position	—
Increase for current year tax positions	81
Balance at December 31, 2015	$	81
Reduction of tax positions for prior years	—
Increase for prior year tax positions	—
Increase for current year tax positions	30
Balance at December 31, 2016	$	111

Increases to the Company's unrealized tax positions occur as a result of accruing for the unrecognized tax benefit as well the accrual of interest and penalties related to prior year positions. Decreases in the Company's unrealized tax positions occur as a result of the statute of limitation lapsing on prior year positions and/or settlements relating to outstanding positions. The table above does not include the indirect federal benefit of state tax positions of approximately $11,000. All of the Company’s unrecognized tax benefits, including the indirect federal benefit of state tax positions, are recorded as a component of income tax expense therefore affecting the effective tax rate. In addition, the Company records interest and penalties related to uncertain tax positions in the provision for income taxes. The Company accrued approximately $11,000 for interest and penalties on uncertain tax positions as of December 31, 2016 and none for 2015, which are not included in the table above.

NOTE 14LOW INCOME HOUSING PROJECT INVESTMENTS

The Company has invested in low income housing projects that generate Low Income Housing Tax Credits (“LIHTC”) which provide the Company with tax credits and operating loss tax benefits over a period of approximately 15 years. None of the original investment is expected to be repaid.

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The following table presents certain information related to the Company's investments in low income housing projects as of December 31:

	2016		2015		2014
	(Dollars in thousands)
Original investment value	$	47,379	$	42,199	$	40,541
Current recorded investment	$	39,606	$	38,151	$	38,943
Unfunded liability obligation	$	12,161	$	14,607	$	28,004
Tax credits and benefits earned during the year	$	5,366	$	3,632	$	1,683
Amortization of investments during the year	$	3,725	$	2,450	$	1,089
Net income tax benefit recognized during the year	$	1,641	$	1,182	$	594

NOTE 15EMPLOYEE BENEFIT PLANS

Pension

The Company maintains a multiemployer defined benefit pension plan (the “Pension Plan”) administered by Pentegra Retirement Services (the “Fund” or “Pentegra Defined Benefit Plan for Financial Institutions”). The Fund does not segregate the assets or liabilities of all participating employers and accordingly, disclosure of plan assets, accumulated vested and nonvested benefits is not possible. Effective July 1, 2006, the Company froze the defined benefit plan by eliminating all future benefit accruals. Contributions to the Pension Plan are based on each individual employer’s experience. The Company bears the market risk relating to the Pension Plan and will continue to fund the Pension Plan as required. The Pension Plan year is July 1^st through June 30^th.

In conjunction with the acquisition of Peoples Federal Savings Bank in 2015, the Company acquired the Peoples Federal Defined Benefit Pension Plan (“Peoples Plan”). The Peoples Plan was frozen at the date of acquisition and will be maintained in the same manner as the Pension Plan. The Peoples Plan is also administered by Pentegra Retirement Services under the same Fund as the Pension Plan.

The Company’s participation in the Pension Plan and the Peoples Plan (the "Pension Plans") for the annual period ended December 31, 2016, is outlined in the table below. The “EIN/Pension Plan Number” column provides the Employer Identification Number (“EIN”) and the three-digit plan number. The funding status of the Pension Plans is determined on the basis of the financial statements provided by the Fund using total plan assets and accumulated benefit obligation. The “FIP/RP Status Pending/Implemented” column indicates plans for which a financial improvement plan (“FIP”) or a rehabilitation plan (“RP”) is either pending or has been implemented. The “Expiration Date of Collective-Bargaining Agreement” column lists the expiration dates of any collective-bargaining agreement(s) to which the Pension Plans are subject.

		Funding Status of Pension Plan		FIP/RP Status Pending/ Implemented	Surcharge Imposed	Expiration Date of Collective- Bargaining Agreement	Minimum Contributions Required for Future Periods
	EIN/Pension Plan Number	2016	2015
Pentegra defined benefit plan for financial institutions	13-5645888/333	At least 80 percent	At least 80 percent	No	No	N/A	$	—

Contributions to the Fund are based on each individual employer’s experience. The Company’s total contributions to the Pension Plans did not represent more than 5% of the total contributions to the Pension Plan as indicated in the Pension Plan’s most recently available annual report dated June 30, 2016. The comparability of employer contributions is impacted by asset performance, discount rates and the reduction in the number of covered employees year over year.

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The Company’s contributions to the Pension Plans were as follows for the periods indicated:

					Required Contributions - Plan Year Allocation
	Cash Payment		Future period funding		2016-2017		2015-2016		2014-2015
	(Dollars in thousands)
2016	$	6,245	$	4,000	$	2,245	$	—	$	—
2015	$	2,983	$	1,215	$	—	$	1,768	$	—
2014	$	1,320	$	—	$	—	$	—	$	1,320

The Company’s total defined benefit plan expense was $2.0 million, $1.6 million, and $1.5 million, for the years ending December 31, 2016, 2015, and 2014, respectively.

Financial information for the Fund is made available through the public Form 5500 which is available by April 15^th of the year following the plan year end.

Postretirement Benefit Plans

Employees retiring from the Bank after attaining age 65, who have rendered at least 10 years of continuous service are entitled to a fixed contribution toward the premium for postretirement health care benefits and a $5,000 benefit paid upon death. The health care benefits are subject to deductibles, co-payment provisions and other limitations. The Bank may amend or change these benefits periodically. Additionally, the Company has acquired small postretirement plans and/or agreements in conjunction with various acquisitions, which do not have a material impact on the amount of expense realized by the Company. The expense related to these plans for the years ending December 31, 2016, 2015, and 2014 was not material.

Supplemental Executive Retirement Plans

The Bank maintains defined benefit supplemental executive retirement plans (“SERP”) for certain highly compensated employees designed to offset the impact of regulatory limits on benefits under qualified pension plans. The Bank also maintains defined benefit SERPs acquired from previous acquisitions. The Bank has established and funded Rabbi Trusts to accumulate funds in order to satisfy the contractual liability of these supplemental retirement plan benefits. These agreements provide for the Bank to pay all benefits from its general assets, and the establishment of these trust funds does not reduce nor otherwise affect the Bank’s continuing liability to pay benefits from such assets except that the Bank’s liability shall be offset by actual benefit payments made from the trusts. The related trust assets, included in the Company's available for sale securities portfolio, totaled $16.0 million and $10.0 million at December 31, 2016 and 2015, respectively.

During 2014, the Company amended the retirement benefit amounts for certain participants. The Company then froze its defined benefit SERP by closing it to new participants and restricting future adjustments to the retirement benefit amounts.

The following table shows the defined benefit supplemental retirement expense, and the contributions paid to the plans which were used only to pay the current year benefits as of the dates indicated:

	2016		2015		2014
	(Dollars in thousands)
Retirement expense	$	1,513	$	1,834	$	954
Contributions paid	$	320	$	276	$	271

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Expected future benefit payments for the defined benefit supplemental executive retirement plans are presented below:

	Defined Benefit Supplemental Executive Retirement Plans Expected Benefit Payments
	(Dollars in thousands)
2017	$	412
2018	$	414
2019	$	485
2020	$	471
2021	$	466
2022-2026	$	4,348

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The measurement date used to determine the defined benefit supplemental executive retirement plans' benefits is December 31 for each of the years reported. The following table illustrates the status of the defined benefit supplemental executive retirement plans at December 31 for the years presented:

	Defined Benefit Supplemental Executive Retirement Benefits
	2016			2015			2014
	(Dollars in thousands)
Change in accumulated benefit obligation
Benefit obligation at beginning of year	$	13,290		$	12,537		$	8,243
Accumulated service cost	395			742			397
Interest cost	539			470			390
Plan amendment	—			—			1,357
Actuarial loss/(gain)	273			(183		)	2,421
Benefits paid	(320		)	(276		)	(271		)
Accumulated benefit obligation at end of year	$	14,177		$	13,290		$	12,537
Change in plan assets
Fair value of plan assets at beginning of year	$	—		$	—		$	—
Employer contribution	320			276			271
Benefits paid	(320		)	(276		)	(271		)
Fair value of plan assets at end of year	$	—		$	—		$	—
Funded status at end of year	$	(14,177	)	$	(13,290	)	$	(12,537	)
Assets	—			—			—
Liabilities	(14,177		)	(13,290		)	(12,537		)
Accrued benefit cost	$	(14,177	)	$	(13,290	)	$	(12,537	)
Amounts recognized in accumulated other comprehensive income (“AOCI”)
Net loss	$	2,830		$	2,859		$	3,305
Prior service cost	1,323			1,599			1,904
Amounts recognized in AOCI	$	4,153		$	4,458		$	5,209
Information for plans with an accumulated benefit obligation in excess of plan assets
Projected benefit obligation	$	14,177		$	13,290		$	12,537
Accumulated benefit obligation	$	14,177		$	13,290		$	12,537
Net periodic benefit cost
Service cost	$	395		$	742		$	397
Interest cost	539			470			390
Amortization of prior service cost	276			305			113
Recognized net actuarial loss	303			317			54
Net periodic benefit cost	$	1,513		$	1,834		$	954
Amounts in accumulated other comprehensive income expected to be recognized in net periodic benefit cost over next fiscal year
Net actuarial loss	$	338		$	270		$	309
Net prior service cost	$	276		$	276		$	947
Discount rate used for benefit obligation	2.49-3.94%			2.49-4.16%			2.24-3.84%
Discount rate used for net periodic benefit cost	2.49-4.16%			2.24-3.84%			2.43-4.76%
Rate of compensation increase	n/a			n/a			n/a

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Other Employee Benefits

The Bank from time to time creates an incentive compensation plan for senior management and other officers to participate in at varying levels. In addition, the Bank may also pay a discretionary bonus to senior management, officers, and/or nonofficers of the Bank. The expense for the incentive plans and the discretionary bonus amounted to $10.3 million in both 2016 and 2015, and $8.5 million in 2014.

The Bank has an Employee Savings Plan that qualifies as a deferred salary arrangement under Section 401(k) of the Internal Revenue Code. Under the Employee Savings Plan, participating employees may defer a portion of their earnings, not to exceed the Internal Revenue Service annual contribution limits. The Bank matches 25% of each employee’s contributions up to the first 6% of the employee’s earnings. The 401(k) Plan incorporates an Employee Stock Ownership Plan for contributions invested in the Company’s common stock. This Plan also provides nondiscretionary contributions in which employees, with one year and 1,000 hours of service, receive a 5% cash contribution of eligible pay up to the social security limit and a 10% cash contribution of eligible pay over the social security limit up to the maximum amount permitted by law. Benefits contributed to employees under this defined contribution plan vest immediately. The defined contribution plan expense was $4.8 million, $4.5 million and $4.2 million for the years ended December 2016, 2015, in 2014, respectively.

The Company has a non-qualified deferred compensation plan which allows for deferrals of incentive payments until an elected distribution date in the future. This deferred compensation plan is available to certain highly compensated employees. Deferrals are invested at the election of the participant into one of the actively managed funds made available to the participant through the Company's Investment Management Group. The funds are held in a Rabbi Trust until the elected date of distribution.

The Company has a non-qualified 401(k) Restoration Plan ("Restoration Plan") for certain executive officers. The Restoration Plan is intended to contribute to each participant the amount of matching and discretionary contributions which would have been made to the existing Rockland Trust 401(k) plan on the participant's behalf, but were prohibited due to Internal Revenue Code limitations. Deferrals are invested at the election of the participant into one of the actively managed funds made available to the participant through the Company's Investment Management Group or in the Company's stock. The funds, which are not invested in the Company's stock are held in a Rabbi Trust until the elected date of distribution. The Company recognized expense of $425,000, $232,000 and $56,000 related to this plan for services already performed for the years ended December 31, 2016, 2015 and 2014, respectively.

As a result of the Peoples acquisition in 2015, the Company assumed an Employee Stock Ownership Plan and a 401(k) Plan. The Company received approval and terminated both plans during 2016, and as such, there was no expense associated with either plan during 2016 and 2015.

Also as part of the Peoples acquisition, the Company assumed various Salary Continuation Agreements with certain current and former senior executives. The agreements require the payment of specified benefits upon retirement over periods of ten or twenty years as described in each agreement. Expense related to the Salary Continuation Agreements was $272,000 and $222,000 for the years ended December 31, 2016 and 2015, respectively.

The Company also assumed a Peoples supplemental retirement plan with a former executive, whereby the amounts paid under this plan commenced upon the executive's retirement and continue for his lifetime. Expense related to the supplemental retirement plan was $13,000 and $11,000 for the years ended December 31, 2016 and 2015.

Director Benefits    

The Company maintains a deferred compensation plan for the Company’s Board of Directors. The Board of Directors is entitled to elect to defer their director’s fees until retirement. If the Director elects to do so, their compensation is invested in the Company’s stock and maintained within the Company’s Investment Management Group. The amount of compensation deferred during 2016, 2015, and 2014 was $142,000, $149,000, and $135,000, respectively. At December 31, 2016 and 2015, the Company had 168,352 and 172,580 of shares provided for the plan with a related liability of $4.2 million and $3.9 million established within shareholders’ equity, respectively.

As a result of the Peoples acquisition during 2015, the Company assumed several Director Retirement Agreements. The agreements require the payment of specified benefits upon retirement over periods of ten or twenty years as described in each agreement. Expense for the Director Retirement Agreements was $40,000 and $35,000 for the years ended December 31, 2016 and 2015, respectively.

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NOTE 16FAIR VALUE MEASUREMENTS

Fair value is a market-based measure considered from the perspective of a market participant rather than an entity-specific measure. Therefore, even when market assumptions are not readily available, the Company’s own assumptions are set to reflect those that market participants would use in pricing the asset or liability at the measurement date. If there has been a significant decrease in the volume and level of activity for the asset or liability, regardless of the valuation technique(s) used, the objective of a fair value measurement remains the same. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. The Company uses prices and inputs that are current as of the measurement date. In periods of market dislocation, the observability of prices and inputs may be reduced for many instruments. This condition could cause an instrument to be reclassified from one level to another.

The Fair Value Measurements and Disclosures Topic of the FASB ASC defines fair value and establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under the Fair Value Measurements and Disclosures Topic of the FASB ASC are described below:

Level 1 – Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

Level 2 – Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3 – Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

Valuation Techniques

There have been no changes in the valuation techniques used during the current period.

Securities:

Trading and Equity Securities

These equity securities are valued based on market quoted prices. These securities are categorized in Level 1 as they are actively traded and no valuation adjustments have been applied.

U.S. Government Agency Securities

Fair value is estimated using either multi-dimensional spread tables or benchmarks. The inputs used include benchmark yields, reported trades, and broker/dealer quotes. These securities are classified as Level 2.

Agency Mortgage-Backed Securities

Fair value is estimated using either a matrix or benchmarks. The inputs used include benchmark yields, reported trades, broker/dealer quotes, and issuer spreads. These securities are categorized as Level 2.

Agency Collateralized Mortgage Obligations and Small Business Administration Pooled Securities

The valuation model for these securities is volatility-driven and ratings based, and uses multi-dimensional spread tables. The inputs used include benchmark yields, reported trades, new issue data, broker dealer quotes, and collateral performance. If there is at least one significant model assumption or input that is not observable, these securities are categorized as Level 3 within the fair value hierarchy; otherwise, they are classified as Level 2.

State, County, and Municipal Securities

The fair value is estimated using a valuation matrix with inputs including bond interest rate tables, recent transaction, and yield relationships. These securities are categorized as Level 2.

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Single and Pooled Issuer Trust Preferred Securities

The fair value of trust preferred securities, including pooled and single issuer preferred securities, is estimated using external pricing models, discounted cash flow methodologies or similar techniques. The inputs used in these valuations include benchmark yields, reported trades, new issue data, broker dealer quotes, and collateral performance. If there is at least one significant model assumption or input that is not observable, these securities are classified as Level 3 within the fair value hierarchy; otherwise, they are classified as Level 2.

Loans Held for Sale

The Company has elected the fair value option to account for originated closed loans intended for sale. The fair value is measured on an individual loan basis using quoted market prices and when not available, comparable market value or discounted cash flow analysis may be utilized. These assets are typically classified as Level 2.

Derivative Instruments

Derivatives

The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The Company incorporates credit valuation adjustments to appropriately reflect nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings. Additionally, in conjunction with fair value measurement guidance, the Company has made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio. Although the Company has determined that the majority of the inputs used to value its interest rate derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties. However, as of December 31, 2016 and 2015, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2.

Mortgage Derivatives

The fair value of mortgage derivatives is determined based on current market prices for similar assets in the secondary market and, therefore, classified as Level 2 within the fair value hierarchy.

Impaired Loans

Collateral dependent loans that are deemed to be impaired are valued based upon the lower of cost or fair value of the underlying collateral less costs to sell.  The inputs used in the appraisals of the collateral are not always observable, and therefore the loans may be classified as Level 3 within the fair value hierarchy; otherwise, they are classified as Level 2.

Other Real Estate Owned and Other Foreclosed Assets

The fair values are generally estimated based upon recent appraisal values of the property less costs to sell the property, as Other Real Estate Owned ("OREO") and Other Foreclosed Assets are valued at the lower of cost or fair value of the property, less estimated costs to sell. Certain inputs used in appraisals are not always observable, and therefore OREO and Other Foreclosed Assets are classified as Level 3 within the fair value hierarchy.

Goodwill and Other Intangible Assets

Goodwill and identified intangible assets are subject to impairment testing. The Company conducts an annual impairment test of goodwill in the third quarter of each year, or more frequently if necessary, and other intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. To estimate the fair value of goodwill and, if necessary, other intangible assets, the Company utilizes both a comparable analysis of relevant price multiples in recent market transactions and discounted cash flow analysis. Both valuation models require a significant degree of management judgment. In the event the fair value as determined by the valuation model is less than the carrying value, the intangibles may be impaired. If the impairment testing resulted in impairment, the Company would classify the impaired goodwill and other intangible assets subjected to nonrecurring fair value adjustments as Level 3.

Assets and liabilities measured at fair value on a recurring and nonrecurring basis were as follows as of the dates indicated:

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			Fair Value Measurements at Reporting Date Using
	Balance		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	December 31, 2016
	(Dollars in thousands)
Recurring fair value measurements
Assets
Trading securities	$	804	$	804	$	—	$	—
Securities available for sale
U.S. Government agency securities	24,244		—		24,244		—
Agency mortgage-backed securities	175,384		—		175,384		—
Agency collateralized mortgage obligations	99,868		—		99,868		—
State, county, and municipal securities	3,793		—		3,793		—
Single issuer trust preferred securities issued by banks and insurers	2,311		—		2,311		—
Pooled trust preferred securities issued by banks and insurers	1,584		—		—		1,584
Small business administration pooled securities	37,189		—		37,189		—
Equity securities	19,271		19,271		—		—
Loans held for sale	6,139		—		6,139		—
Derivative instruments	22,761		—		22,761		—
Liabilities
Derivative instruments	21,916		—		21,916		—
Total recurring fair value measurements	$	371,432	$	20,075	$	349,773	$	1,584
Nonrecurring fair value measurements
Assets
Collateral dependent impaired loans	$	33,974	$	—	$	—	$	33,974
Other real estate owned and other foreclosed assets	4,173		—		—		4,173
Total nonrecurring fair value measurements	$	38,147	$	—	$	—	$	38,147

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			Fair Value Measurements at Reporting Date Using
	Balance		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	December 31, 2015
	(Dollars in thousands)
Recurring fair value measurements
Assets
Trading securities	$	356	$	356	$	—	$	—
Securities available for sale
U.S. Government agency securities	30,215		$	—	30,215		—
Agency mortgage-backed securities	210,937		—		210,937		—
Agency collateralized mortgage obligations	63,584		—		63,584		—
State, county, and municipal securities	4,659		—		4,659		—
Single issuer trust preferred securities issued by banks and insurers	2,792		—		2,792		—
Pooled trust preferred securities issued by banks and insurers	1,572		—		—		1,572
Small business administration pooled securities	40,449		—		40,449		—
Equity securities	13,041		13,041		—		—
Loans held for sale	5,990		—		5,990		—
Derivative instruments	23,305		—		23,305		—
Liabilities
Derivative instruments	26,313		—		26,313		—
Total recurring fair value measurements	$	370,587	$	13,397	$	355,618	$	1,572
Nonrecurring fair value measurements:
Assets
Collateral dependent impaired loans	$	4,598	$	—	$	—	$	4,598
Other real estate owned and other foreclosed assets	2,159		—		—		2,159
Total nonrecurring fair value measurements	$	6,757	$	—	$	—	$	6,757

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The table below presents a reconciliation for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3), which were valued using pricing models and discounted cash flow methodologies, as of the dates indicated:

	As of and for the years ended December 31,
	2016			2015			2014
	(Dollars in thousands)
Pooled Trust Preferred Securities
Beginning balance	$	1,572		$	6,321		$	3,841
Gain and (losses) (realized/unrealized)
Included in earnings	—			—			—
Included in other comprehensive income	29			14			2,655
Sales	—			(4,679		)	—
Settlements	(17		)	(84		)	(175		)
Transfers into (out of) level 3	—			—			—
Ending Balance	$	1,584		$	1,572		$	6,321

It is the Company’s policy to recognize the transfers between levels of the fair value hierarchy as of the end of the reporting period. There were no transfers between the levels of the fair value hierarchy for any assets or liabilities measured at fair value on a recurring basis during the years ended December 31, 2016, 2015 and 2014.

The following table sets forth certain unobservable inputs regarding the Company's financial instruments that are classified as Level 3 as of December 31st for the years indicated:

	2016		2015			2016	2015	2016	2015
Valuation Technique	Fair Value				Unobservable Inputs	Range		Weighted Average
	(Dollars in thousands)
Discounted cash flow methodology
Pooled trust preferred securities	$	1,584	$	1,572	Cumulative prepayment	0% - 62%	0%-64%	2.5%	2.7%
					Cumulative default	5% - 100%	5%-100%	12.8%	15.1%
					Loss given default	85% - 100%	85%-100%	94.2%	94.2%
					Cure given default	0% - 75%	0%-75%	60.9%	62.3%
Appraisals of collateral (1)
Collateral dependent impaired loans	$	33,974	$	4,598
Other real estate owned and foreclosed assets	$	4,173	$	2,159

(1) Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various Level 3 inputs which are not identifiable. Appraisals may be adjusted by management for qualitative factors such as economic factors and estimated liquidation expenses. The range of these possible adjustments may vary.

For the fair value measurements in the table above, which are classified as Level 3 within the fair value hierarchy, the Company’s Treasury and Finance groups determine the valuation policies and procedures. For the pricing of the securities, the Company uses third-party pricing information, without adjustment. Depending on the type of the security, management employs various techniques to analyze the pricing it receives from third parties, such as analyzing changes in market yields and in certain instances reviewing the underlying collateral of the security. Management reviews changes in fair value from period to period and performs testing to ensure that prices received from the third parties are consistent with their expectation of the market. For the securities whose market is deemed to be inactive and which are categorized as Level 3, the fair value models are calibrated and significant inputs are back tested on a quarterly basis, to the extent possible. This testing is done by the third party service provider, who performs this testing by comparing anticipated inputs to actual results. Significant changes in fair value from period

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to period are closely scrutinized to ensure fair value models are not flawed. The driver(s) of the respective change in fair value and the method for forecasting the driver(s) is closely considered by management.

The significant unobservable inputs used in the fair value measurement of the Company’s pooled trust preferred securities are cumulative prepayment rates, cumulative defaults, loss given defaults and cure given defaults. Significant increases (decreases) in deferrals or defaults, in isolation, would result in a significantly lower (higher) fair value measurement. Alternatively, significant increases (decreases) in cure rates, in isolation, would result in a significantly higher (lower) fair value measurement.

Additionally, the Company has certain assets which are marked to fair value on a nonrecurring basis which are categorized within Level 3. These assets include collateral dependent impaired loans and OREO and other foreclosed assets. The determination of the fair value amount is derived from the use of independent third party appraisals and evaluations, prepared by firms from a predetermined list of qualified and approved appraisers or evaluators. Upon receipt of an appraisal or evaluation, the Company's Commercial Real Estate Appraisal Department will review the report for compliance with regulatory and Company standards, as well as reasonableness and acceptance of the value conclusions. Any issues or concerns regarding compliance or value conclusions will be addressed with the engaged firm and the report may be adjusted or revised. If a disagreement cannot be resolved, the Commercial Real Estate Appraisal Department will either address the key issues and modify the report for acceptance or reject the report and re-order a new report. Ultimately, the Company’s Commercial Real Estate Appraisal Department will confirm the collateral value as part of its review process.

The estimated fair values and related carrying amounts for assets and liabilities for which fair value is only disclosed are shown below as of the periods indicated:

					Fair Value Measurements at Reporting Date Using
	Book Value		Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	December 31, 2016
	(Dollars in thousands)
Financial assets
Securities held to maturity(a)
U.S. Treasury securities	$	1,007	$	1,054	$	—	$	1,054	$	—
Agency mortgage-backed securities	156,088		157,504		—		157,504		—
Agency collateralized mortgage obligations	297,445		294,650		—		294,650		—
State, county, and municipal securities	—		—		—		—		—
Single issuer trust preferred securities issued by banks	1,500		1,544		—		1,544		—
Small business administration pooled securities	31,036		30,898		—		30,898		—
Loans, net of allowance for loan losses(b)	5,904,065		5,784,778		—		—		5,784,778
Federal Home Loan Bank stock(c)	11,497		11,497		—		11,497		—
Cash surrender value of life insurance policies(d)	144,503		144,503		—		144,503		—
Financial liabilities
Deposit liabilities, other than time deposits(e)	$	5,763,101	$	5,763,101	$	—	$	5,763,101	$	—
Time certificates of deposits(f)	649,152		647,038		—		647,038		$	—
Federal Home Loan Bank borrowings(f)	50,819		50,898		—		50,898		—
Customer repurchase agreements and other short-term borrowings(f)	176,913		176,913		—		—		176,913
Junior subordinated debentures(g)	73,107		72,510		—		72,510		—
Subordinated debentures(f)	34,635		34,241		—		—		34,241

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					Fair Value Measurements at Reporting Date Using
	Book Value		Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	December 31, 2015
Financial assets	(Dollars in thousands)
Securities held to maturity(a)
U.S. Treasury securities	$	1,009	$	1,064	$	—	$	1,064	$	—
Agency mortgage-backed securities	167,134		170,375		—		170,375		—
Agency collateralized mortgage obligations	267,348		264,891		—		264,891		—
State, county, and municipal securities	225		227		—		227		—
Single issuer trust preferred securities issued by banks	1,500		1,522		—		1,522		—
Small business administration pooled securities	35,291		35,664		—		35,664		—
Corporate debt securities	5,000		5,006		—		5,006		—
Loans, net of allowance for loan losses(b)	5,487,298		5,417,425		—		—		5,417,425
Federal Home Loan Bank stock(c)	14,431		14,431		—		14,431		—
Cash surrender value of life insurance policies(d)	134,627		134,627		—		134,627		—
Financial liabilities
Deposit liabilities, other than time deposits(e)	$	5,305,873	$	5,305,873	$	—	$	5,305,873	$	—
Time certificates of deposits(f)	$	684,830	$	684,370	$	—	$	684,370	$	—
Federal Home Loan Bank borrowings(f)	102,080		102,396		—		102,396		—
Customer repurchase agreements and other short-term borrowings(f)	133,958		133,958		—		—		133,958
Junior subordinated debentures(g)	73,306		73,871		—		73,871		—
Subordinated debentures(f)	34,589		34,370		—		—		34,370

(a) The fair values presented are based on quoted market prices, where available. If quoted market prices are not available, fair values are based on quoted market prices of comparable instruments and/or discounted cash flow analysis.

(b) Fair value is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities or cash flows. Additionally, this amount excludes collateral dependent impaired loans, which are deemed to be marked to fair value on a nonrecurring basis.

(c) FHLB stock has no quoted market value and is carried at cost, therefore the carrying amount approximates fair value.

(d) Cash surrender value of life insurance is recorded at its cash surrender value (or the amount that can be realized upon surrender of the policy), therefore carrying amount approximates fair value.

(e) Fair value of demand deposits, savings and interest checking accounts and money market deposits is the amount payable on demand at the reporting date.

(f) Fair value was determined by discounting anticipated future cash payments using rates currently available for instruments with similar remaining maturities.

(g) Fair value was determined based upon market prices of securities with similar terms and maturities.

This summary excludes financial assets and liabilities for which the carrying value approximates fair value. For financial assets, these may include cash and due from banks, federal funds sold and short-term investments. For financial liabilities, these may include federal funds purchased. These instruments would all be considered to be classified as Level 1 within the fair value hierarchy. Also excluded from the summary are financial instruments measured at fair value on a recurring and nonrecurring basis, as previously described.

The Company considers its financial instruments' current use to be the highest and best use of the instruments.

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NOTE 17OTHER COMPREHENSIVE INCOME (LOSS)

The following table presents a reconciliation of the changes in the components of other comprehensive income (loss) for the dates indicated, including the amount of income tax (expense) benefit allocated to each component of other comprehensive income (loss):

	December 31, 2016
	Pre Tax Amount			Tax (Expense) Benefit			After Tax Amount
	(Dollars in thousands)
Change in fair value of securities available for sale	$	(1,858	)	$	710		$	(1,148	)
Less: net security losses reclassified into other noninterest income (expense)	(26		)	11			(15		)
Net change in fair value of securities available for sale	(1,832		)	699			(1,133		)
Change in fair value of cash flow hedges	1,133			(453		)	680
Less: net cash flow hedge losses reclassified into interest on borrowings expense (1)	(2,520		)	1,030			(1,490		)
Net change in fair value of cash flow hedges	3,653			(1,483		)	2,170
Net unamortized loss related to defined benefit pension and other postretirement adjustments arising during the period	(383		)	157			(226		)
Amortization of net actuarial losses	238			(97		)	141
Amortization of net prior service cost	276			(113		)	163
Net change in other comprehensive income for defined benefit postretirement plans (2)	131			(53		)	78
Total other comprehensive income	$	1,952		$	(837	)	$	1,115
	Year Ended December 31, 2015
	Pre Tax Amount			Tax (Expense) Benefit			After Tax Amount
	(Dollars in thousands)
Change in fair value of securities available for sale	$	(3,757	)	$	1,434		$	(2,323	)
Less: net security losses reclassified into other noninterest income (expense)	(405		)	165			(240		)
Net change in fair value of securities available for sale	(3,352		)	1,269			(2,083		)
Change in fair value of cash flow hedges	(776		)	299			(477		)
Less: net cash flow hedge losses reclassified into interest on borrowings expense (1)	(2,828		)	1,152			(1,676		)
Net change in fair value of cash flow hedges	2,052			(853		)	1,199
Net unamortized gain related to defined benefit pension and other postretirement adjustments arising during the period	438			(193		)	245
Amortization of net actuarial losses	243			(99		)	144
Amortization of net prior service cost	294			(119		)	175
Net change in other comprehensive income for defined benefit postretirement plans (2)	975			(411		)	564
Total other comprehensive loss	$	(325	)	$	5		$	(320	)

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	Year Ended December 31, 2014
	Pre Tax Amount			Tax (Expense) Benefit			After Tax Amount
	(Dollars in thousands)
Change in fair value of securities available for sale	$	9,095		$	(3,570	)	$	5,525
Less: net security losses reclassified into other noninterest income	191			(78		)	113
Net change in fair value of securities available for sale	8,904			(3,492		)	5,412
Change in fair value of cash flow hedges	(969		)	396			(573		)
Less: Net cash flow hedge losses reclassified into interest on borrowings expense (1)	(3,662		)	1,496			(2,166		)
Less: Loss on termination of hedge reclassified into noninterest expense	(1,122		)	459			(663		)
Net change in fair value of cash flow hedges	3,815			(1,559		)	2,256
Net unamortized loss related to defined benefit pension and other postretirement adjustments arising during the period	(2,699		)	1,103			(1,596		)
Net prior service costs related to plan amendment arising during the period	(1,357		)	554			(803		)
Amortization of net actuarial gains	(44		)	18			(26		)
Amortization of net prior service cost	102			(42		)	60
Amortization of net transition obligation	(2		)	1			(1		)
Net change in other comprehensive income for defined benefit postretirement plans (2)	(4,000		)	1,634			(2,366		)
Total other comprehensive income	$	8,719		$	(3,417	)	$	5,302

(1) Includes the amortization of the remaining balance of a realized but unrecognized gain, net of tax, from the termination of interest rate swaps in June 2009. The original gain of $1.4 million, net of tax, will be recognized in earnings through December 2018, the original maturity date of the swap. The balance of this gain had amortized to $281,000, $427,000, and $571,000 at December 31, 2016, 2015, and 2014, respectively.

(2) The amortization of prior service costs is included in the computation of net periodic pension costs as disclosed in Note 15 - Employee Benefit Plans.

Information on the Company's accumulated other comprehensive loss, net of tax, is comprised of the following components as of the periods indicated:

	Unrealized Gain on Securities			Unrealized Loss on Cash Flow Hedge			Deferred Gain on Hedge Transactions			Defined Benefit Postretirement Plans			Accumulated Other Comprehensive Income (Loss)
	(Dollars in Thousands)
Beginning balance: January 1, 2014	$	(2,023	)	$	(5,698	)	$	715		$	(428	)	$	(7,434	)
Net change in other comprehensive income (loss)	5,412			2,400			(144		)	(2,366		)	5,302
Ending balance: December 31, 2014	$	3,389		$	(3,298	)	$	571		$	(2,794	)	$	(2,132	)
Net change in other comprehensive income (loss)	(2,083		)	1,343			(144		)	564			(320		)
Ending balance: December 31, 2015	$	1,306		$	(1,955	)	$	427		$	(2,230	)	$	(2,452	)
Net change in other comprehensive income (loss)	(1,133		)	2,316			(146		)	78			1,115
Ending balance: December 31, 2016	$	173		$	361		$	281		$	(2,152	)	$	(1,337	)

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NOTE 18COMMITMENTS AND CONTINGENCIES

Financial Instruments with Off-Balance Sheet Risk

In the normal course of business, the Company enters into various transactions to meet the financing needs of its customers, which, in accordance with GAAP, are not included in its consolidated balance sheets. These transactions include commitments to extend credit and standby letters of credit, which involve, to varying degrees, elements of credit risk and interest rate risk in excess of the amounts recognized in the consolidated balance sheets. The Company minimizes its exposure to loss under these commitments by subjecting them to credit approval and monitoring procedures.

The Company enters into contractual commitments to extend credit, normally with fixed expiration dates or termination clauses, at specified rates and for specific purposes. Substantially all of these commitments to extend credit are contingent upon customers maintaining specific credit standards at the time of loan funding.

Standby letters of credit are written conditional commitments issued to guarantee the performance of a customer to a third party. In the event the customer does not perform in accordance with the terms of the agreement with the third party, the Company would be required to fund the commitment. The maximum potential amount of future payments the Company could be required to make is represented by the contractual amount of the commitment. If the commitment were funded, the Company would be entitled to seek recovery from the customer. The Company’s policies generally require that standby letter of credit arrangements contain security and debt covenants similar to those contained in loan agreements.

The fees collected in connection with the issuance of standby letters of credit are representative of the fair value of its obligation undertaken in issuing the guarantee. In accordance with applicable accounting standards related to guarantees, fees collected in connection with the issuance of standby letters of credit are deferred. The fees are then recognized in income proportionately over the life of the standby letter of credit agreement. The deferred standby letter of credit fees represent the fair value of the Company's potential obligations under the standby letter of credit guarantees.

The following table summarizes the above financial instruments at the dates indicated:

	2016		2015
	(Dollars in thousands)
Commitments to extend credit	$	2,227,955	$	2,091,170
Standby letters of credit	$	18,190	$	17,962
Deferred standby letter of credit fees	$	108	$	72

Lease Commitments

The Company leases office space, space for ATM locations, and certain branch locations under noncancelable operating leases. The following is a schedule of minimum future lease payments under such leases as of December 31, 2016:

	(Dollars in thousands)
2017	$	9,287
2018	7,960
2019	7,291
2020	6,296
2021	5,000
Thereafter	8,213
Total future minimum lease commitments	$	44,047

Rent expense incurred under operating leases was approximately $8.5 million in 2016, $8.2 million in 2015, and $7.9 million in 2014. Renewal options ranging from 1-10 years exist for several of these leases.

Other Contingencies

At December 31, 2016, Rockland Trust was involved in pending lawsuits that arose in the ordinary course of business. Management has reviewed these pending lawsuits with legal counsel and has taken into consideration the view of counsel as to their outcome. In the opinion of management, the final disposition of pending lawsuits is not expected to have a material adverse effect on the Company’s financial position or results of operations.

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The Bank is required to maintain certain reserve requirements of vault cash and/or deposits with the Federal Reserve Bank of Boston. The amount of this reserve requirement was $31.8 million and $21.7 million at December 31, 2016 and 2015, respectively.

NOTE 19REGULATORY MATTERS

Regulatory Capital Requirements

The Company and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of the Company’s and the Bank’s assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios (set forth in the table below) of Total, Tier 1 Capital and Common Equity Tier 1 Capital (as defined for regulatory purposes) to risk weighted assets (as defined for regulatory purposes) and Tier 1 Capital to average assets (as defined for regulatory purposes). Management believes, as of December 31, 2016 and 2015, that the Company and the Bank met all capital adequacy requirements to which they are subject.

At December 31, 2016 the most recent notification from the Federal Deposit Insurance Corporation indicated that the Bank's capital levels met or exceeded the minimum levels to be considered "well capitalized" for bank regulatory purposes. To be categorized as well capitalized, an institution must maintain minimum total risk-based, Tier 1 risk-based, Common equity Tier 1 risk-based and Tier 1 leverage ratios as set forth in the following tables. There are no conditions or events since the notification that management believes have changed the Bank’s category. The Company’s and the Bank’s actual capital amounts and ratios as of December 31, 2016 and 2015 are also presented in the table that follows:

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	Actual				For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio		Amount			Ratio		Amount			Ratio
	December 31, 2016
	(Dollars in thousands)
Independent Bank Corp.
Total capital (to risk weighted assets)	$	824,265	13.60	%	$	484,942	≥	8.0	%	N/A			N/A
Common equity tier 1 capital (to risk weighted assets)	$	656,080	10.82	%	$	272,780	≥	4.5	%	N/A			N/A
Tier 1 capital (to risk weighted assets)	$	727,070	11.99	%	$	363,706	≥	6.0	%	N/A			N/A
Tier 1 capital (to average assets)	$	727,070	9.77	%	$	297,748	≥	4.0	%	N/A			N/A
Rockland Trust Company
Total capital (to risk weighted assets)	$	788,320	13.01	%	$	484,834	≥	8.0	%	$	606,042	≥	10.0	%
Common equity tier 1 capital (to risk weighted assets)	$	725,760	11.98	%	$	272,719	≥	4.5	%	$	393,927	≥	6.5	%
Tier 1 capital (to risk weighted assets)	$	725,760	11.98	%	$	363,625	≥	6.0	%	$	484,834	≥	8.0	%
Tier 1 capital (to average assets)	$	725,760	9.76	%	$	297,589	≥	4.0	%	$	371,986	≥	5.0	%
	December 31, 2015
	(Dollars in thousands)
Independent Bank Corp.
Total capital (to risk weighted assets)	$	747,372	13.36	%	$	447,664	≥	8.0	%	N/A			N/A
Common equity tier 1 capital (to risk weighted assets)	$	584,378	10.44	%	$	251,811	≥	4.5	%	N/A			N/A
Tier 1 capital (to risk weighted assets)	$	655,154	11.71	%	$	335,748	≥	6.0	%	N/A			N/A
Tier 1 capital (to average assets)	$	655,154	9.33	%	$	280,889	≥	4.0	%	N/A			N/A
Rockland Trust Company
Total capital (to risk weighted assets)	$	718,197	12.84	%	$	447,334	≥	8.0	%	$	559,167	≥	10.0	%
Common equity tier 1 capital (to risk weighted assets)	$	660,979	11.82	%	$	251,625	≥	4.5	%	$	363,459	≥	6.5	%
Tier 1 capital (to risk weighted assets)	$	660,979	11.82	%	$	335,500	≥	6.0	%	$	447,334	≥	8.0	%
Tier 1 capital (to average assets)	$	660,979	9.42	%	$	280,653	≥	4.0	%	$	350,816	≥	5.0	%

In addition to the minimum risk-based capital requirements outlined in the table above, the Company is required to maintain a minimum capital conservation buffer, in the form of common equity, in order to avoid restrictions on capital distributions and discretionary bonuses. The required amount of the capital conservation buffer is being phased-in, beginning at 0.625% on January 1, 2016 and ultimately increasing to 2.5% on January 1, 2019. The Company's capital levels exceeded the fully phased-in buffer of 2.5% as of December 31, 2016.

Dividend Restrictions

In the ordinary course of business, the Company is dependent upon dividends from the Bank to provide funds for the payment of dividends to shareholders and to provide for other cash requirements. Banking regulations may limit the amount of dividends that may be paid. Approval by regulatory authorities is required if the effect of dividends declared would cause the regulatory capital of the Bank to fall below specified minimum levels. Approval is also required if dividends declared exceed the net profits for that year combined with the retained net profits for the preceding two years. Under the foregoing dividend restrictions and while maintaining its "well capitalized" status, dividends paid by the Bank to the Company for the year ended December 31, 2016 and 2015 totaled $44.5 million and $38.1 million, respectively.

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Trust Preferred Securities

In accordance with the applicable accounting standard related to variable interest entities, the common stock of trusts which have issued trust preferred securities have not been included in the consolidated financial statements. At December 31, 2016 and 2015, $71.0 million in trust preferred securities have been included in the Tier 1 capital of the Company for regulatory reporting purposes pursuant to the Federal Reserve's capital adequacy guidelines.

NOTE 20PARENT COMPANY FINANCIAL STATEMENTS

Condensed financial information relative to the Parent Company’s balance sheets at December 31, 2016 and 2015 and the related statements of income and cash flows for the years ended December 31, 2016, 2015, and 2014 are presented below. The statement of stockholders’ equity is not presented below as the parent company’s stockholders’ equity is that of the consolidated Company.

BALANCE SHEETS

	December 31
	2016		2015
	(Dollars in thousands)
Assets
Cash (1)	$	42,596	$	35,428
Investments in subsidiaries(2)	935,778		851,743
Prepaid income taxes	625		530
Deferred tax asset	216		2,229
Derivative instruments(1)	1,364		—
Total assets	$	980,579	$	889,930
Liabilities and stockholders’ equity
Dividends payable	$	7,834	$	6,824
Junior subordinated debentures	73,107		73,306
Subordinated debentures	34,635		34,589
Derivative instruments(1)	—		2,109
Other liabilities	313		1,639
Total liabilities	115,889		118,467
Stockholders’ equity	864,690		771,463
Total liabilities and stockholders’ equity	$	980,579	$	889,930

(1) Entire balance eliminates in consolidation.

(2) $933.6 million and $849.5 million eliminate in consolidation at December 31, 2016 and 2015, respectively.

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STATEMENTS OF INCOME

	Years Ended December 31
	2016			2015			2014
	(Dollars in thousands)
Income
Dividends received from subsidiaries(1)	$	44,598		$	38,153		$	40,170
Interest income(2)	98			78			57
Total income	44,696			38,231			40,227
Expenses
Interest expense	5,901			5,769			4,225
Other expenses	—			29			—
Total expenses	5,901			5,798			4,225
Income before income taxes and equity in undistributed income of subsidiaries	38,795			32,433			36,002
Income tax benefit	(1,791		)	(2,301		)	(1,298		)
Income of parent company	40,586			34,734			37,300
Equity in undistributed income of subsidiaries	36,062			30,226			22,545
Net income	$	76,648		$	64,960		$	59,845

(1) Income of $62,000, $55,000 and $53,000 was not eliminated in consolidation for the years ended December 31, 2016, 2015, and 2014, respectively.

(2) Entire balance eliminated in consolidation.

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STATEMENTS OF CASH FLOWS

	Years Ended December 31
	2016			2015			2014
	(Dollars in thousands)
Cash flows from operating activities
Net income	$	76,648		$	64,960		$	59,845
Adjustments to reconcile net income to cash provided by operating activities
Accretion	(154		)	(150		)	(194		)
Deferred income tax expense	678			3,266			293
Change in other assets	423			7,488			—
Change in other liabilities	(5,532		)	(254		)	(267		)
Equity in undistributed income of subsidiaries	(36,062		)	(30,226		)	(22,545		)
Net cash provided by operating activities	36,001			45,084			37,132
Cash flows used in investing activities
Cash paid for acquisitions, net of cash acquired (1)	(950		)	(51,680		)	—
Net cash used in investing activities	(950		)	(51,680		)	—
Cash flows provided by (used in) financing activities
Repayment of short-term borrowings	—			—			(5,000		)
Proceeds from issuance of subordinated debentures	—			—			35,000
Restricted stock awards issued, net of awards surrendered	(696		)	(657		)	(641		)
Net proceeds from exercise of stock options	201			1,367			2,333
Proceeds from shares issued under the direct stock purchase plan	2,323			2,695			1,555
Common dividends paid	(29,711		)	(26,172		)	(22,443		)
Net cash provided by (used in) financing activities	(27,883		)	(22,767		)	10,804
Net increase (decrease) in cash and cash equivalents	7,168			(29,363		)	47,936
Cash and cash equivalents at the beginning of the year	35,428			64,791			16,855
Cash and cash equivalents at the end of the year	$	42,596		$	35,428		$	64,791

(1) The majority of the net assets acquired at the parent company represented New England Bancorp Inc.'s investment in its wholly owned subsidiary, Bank of Cape Cod, which was eliminated in consolidation.

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NOTE 21SELECTED QUARTELY FINANCIAL DATA (UNAUDITED)

	First Quarter					Second Quarter				Third Quarter				Fourth Quarter
	2016		2015			2016		2015		2016		2015		2016		2015
						(Dollars in thousands, except per share data)
Interest income	$	59,741	$	56,429		$	61,160	$	59,016	$	62,308	$	60,228	$	63,428	$	59,870
Interest expense	4,850		5,180			4,627		5,269		4,640		5,183		4,676		4,985
Net interest income	54,891		51,249			56,533		53,747		57,668		55,045		58,752		54,885
Provision (benefit) for loan losses	525		(500		)	600		700		950		800		4,000		500
Total noninterest income	19,155		16,557			21,095		20,261		20,416		19,247		21,762		19,824
Total noninterest expenses	46,482		54,977			47,146		48,644		46,857		47,031		51,637		46,486
Provision for income taxes	8,428		3,869			9,508		7,213		9,793		7,867		7,698		8,268
Net income	$	18,611	$	9,460		$	20,374	$	17,451	$	20,484	$	18,594	$	17,179	$	19,455
Basic earnings per share	$	0.71	$	0.38		$	0.77	$	0.67	$	0.78	$	0.71	$	0.64	$	0.74
Diluted earnings per share	$	0.71	$	0.38		$	0.77	$	0.67	$	0.78	$	0.71	$	0.64	$	0.74
Weighted average common shares (basic)	26,275,323		24,959,865			26,304,129		26,149,593		26,324,316		26,200,621		26,710,029		26,238,004
Common stock equivalents	43,409		80,215			47,885		71,819		53,072		63,493		60,022		52,772
Weighted average common shares (diluted)	26,318,732		25,040,080			26,352,014		26,221,412		26,377,388		26,264,114		26,770,051		26,290,776
Unusual or infrequently occurring items
Items within noninterest income
Gain on sale of fixed income securities	$	—	$	—		$	—	$	798	$	—	$	—	$	—	$	—
Total	$	—	$	—		$	—	$	798	$	—	$	—	$	—	$	—
Items within noninterest expense
Impairment on acquired facilities	$	—	$	—		$	—	$	109	$	—	$	—	$	—	$	—
Loss on extinguishment of debt	437		122			—		—		—		—		—		—
Loss on sale of fixed income securities	—		—			—		1,124		—		—		—		—
Merger and acquisition expense	334		10,230			206		271		151		—		4,764		—
Total	$	771	$	10,352		$	206	$	1,504	$	151	$	—	$	4,764	$	—

NOTE 22TRANSACTIONS WITH RELATED PARTIES

Certain directors and officers (including their affiliates, certain family members and entities in which they are principal owners) of the Company are customers of and have had, and are expected to have, transactions with the Company, within the ordinary course of business.  These transactions include, but are not limited to, lending activities, deposit services, investment management, and property lease commitments.  In the opinion of management, such transactions are consistent with prudent banking practices and are within applicable banking regulations.  Further details relating to certain related party transactions are outlined below:

Lending Activities

The following information represents annual activity of loans to related parties for the periods indicated:

	2016			2015
	(Dollars in thousands)
Principal balance of loans outstanding at beginning of year	$	24,653		$	25,994
Loan advances	1,718			9,268
Loan payments/payoffs	(3,576		)	(10,609		)
Principal balance of loans outstanding at end of year	$	22,795		$	24,653

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At December 31, 2016 and 2015 there were no loans to related parties which were past due, on nonaccrual status or that had been restructured as part of a troubled debt restructuring.

Deposits

At December 31, 2016 and 2015 the amount of deposit balances of related parties totaled $14.7 million and $13.9 million, respectively.

Lease Commitments

There were no leases with related parties during the years ended December 31, 2016 and 2015. Leases with related parties required rental payments of approximately $278,000 during the year ended December 31, 2014.

ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None

ITEM 9A.    CONTROLS AND PROCEDURES

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures 

The Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer along with the Company’s Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based upon that evaluation, the Company’s Chief Executive Officer along with the Company’s Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective as of the end of the period covered by this annual report.

Changes in Internal Control over Financial Reporting  

There were no changes in our internal control over financial reporting that occurred during the fourth quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Management’s Report on Internal Control Over Financial Reporting

Management of Independent Bank Corp. is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) under the Exchange Act as a process designed by, or under the supervision of, the Company’s principal executive and principal financial officers and effected by the Company’s Board of Directors, management and other personnel, 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. Independent Bank Corp.’s internal control over financial reporting includes those policies and procedures that:

(i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflects the transactions and disposition of the assets of the Company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and

(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2016. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013).

Based on our assessment and those criteria, management believes that the Company maintained effective internal control over financial reporting as of December 31, 2016.

147

Independent Bank Corp.’s independent registered public accounting firm has issued a report on the Company’s internal control over financial reporting, which appears below:

148

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders of

Independent Bank Corp.:

We have audited Independent Bank Corp.’s (the “Company”) internal control over financial reporting as of December 31, 2016, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (“the COSO criteria”). The Company’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Independent Bank Corp. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2016, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the 2016 consolidated financial statements of Independent Bank Corp. and our report dated February 28, 2017 expressed an unqualified opinion thereon.

Boston, Massachusetts

February 28, 2017

149

ITEM 9B.    OTHER INFORMATION

None

PART III

ITEM 10.    DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required herein is incorporated by reference from the Company’s proxy statement relating to its May 18, 2017 Annual Meeting of Stockholders (the “Definitive Proxy Statement”) that will be filed with the Commission within 120 days following the fiscal year end December 31, 2016 under the headings of "Board of Director Information," "Executive Officer Information," and "Section 16(a) Beneficial Ownership Reporting Compliance."

ITEM 11.    EXECUTIVE COMPENSATION

The information required herein is incorporated by reference from the Definitive Proxy Statement under the heading "Executive Officer Information" and "Board of Directors Information."

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Securities Authorized for Issuance Under Equity Compensation Plans

The following table sets forth information as of December 31, 2016 about the securities authorized for issuance under the Company’s equity compensation plans, consisting of the 2005 Employee Stock Plan and the 2010 Nonemployee Director Stock Plan. The Company’s shareholders previously approved each of these plans and all amendments that were subject to shareholder approval. The Company has no other equity compensation plans that have not been approved by shareholders.

Equity Compensation Plans

Equity Compensation Plan Category	Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights	Weighted- Average Exercise Price of Outstanding Options, Warrants and Rights		Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))
	(a)	(b)		(c)
Plans approved by security holders	109,650	$	29.93	652,929	(1)
Plans not approved by security holders	—	—		—
TOTAL	109,650	$	29.93	652,929

(1) There are 461,574 shares available for future issuance under the 2005 Employee Stock Plan. There are 191,355 shares available for future issuance under the 2010 Non-Employee Director Stock Plan. Shares under the 2005 and 2010 Plans may be issued as stock options or restricted stock awards.

The information required herein by Item 403 of Regulation S-K regarding the security ownership of management and certain beneficial owners is incorporated by reference from the Definitive Proxy Statement under the heading "Stock Ownership and Other Matters."

ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required herein is incorporated by reference from the Definitive Proxy Statement under the heading "Board of Director Information - Related Party Transactions" and "Board of Director Information - Director Independence."

ITEM 14.    PRINCIPAL ACCOUNTING FEES AND SERVICES

The information required herein is incorporated by reference from the Definitive Proxy Statement under the heading "Proposals to be Voted upon at the Annual Meeting - Ratification of Appointment of Independent Registered Public Accounting Firm (Proposal 2)."

150

PART IV

ITEM 15.    EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a) Documents Filed as Part of this Report

(1) The following financial statements are incorporated herein by reference from Item 8 hereto:

Management’s Report on Internal Control over Financial Reporting

Reports of Independent Registered Public Accounting Firm.

Consolidated balance sheets as of December 31, 2016 and 2015.

Consolidated statements of income and comprehensive income for each of the years in the three-year period ended December 31, 2016.

Consolidated statements of stockholders’ equity for each of the years in the three-year period ended December 31, 2016.

Consolidated statements of cash flows for each of the years in the three-year period ended December 31, 2016.

Notes to Consolidated Financial Statements.

(2) All schedules for which provision is made in the applicable accounting regulations of the SEC are omitted because of the absence of conditions under which they are required or because the required information is included in the consolidated financial statements and related notes thereto.

(3) The following exhibits are filed as part of this Form 10-K, and this list includes the Exhibit Index.

(b) See (a)(3) above for all exhibits filed herewith and the Exhibit Index.

(c) All schedules are omitted as the required information is not applicable or the information is presented in the Consolidated Financial Statements or related notes.

151

Exhibits Index

No.	Exhibit
2.1	Agreement and Plan of Merger dated March 17, 2016 by and among Independent Bank Corp., Rockland Trust Company, New England Bancorp, Inc. and Bank of Cape Cod is incorporated by reference to Exhibit 2.1 to Form 8-K filed on March 17, 2016.
2.2	Agreement and Plan of Merger dated October 20, 2016 by and among Independent Bank Corp., Rockland Trust Company, Island Bancorp, Inc. and The Edgartown National Bank is incorporated by reference to Exhibit 2.1 to Form 8-K filed on October 20, 2016.
3.1	Restated Articles of Organization, as adopted July 16, 2015, incorporated by reference to Exhibit 3.2 to Form 8-K filed on July 20, 2015.
3.2	Amended and Restated Bylaws of the Company, as adopted July 16, 2015, incorporated by reference to Exhibit 3.1 to Form 8-K filed on July 20, 2015.
4.1	Specimen Common Stock Certificate, incorporated by reference to Form 10-K for the year ended December 31, 1992 filed on March 29, 1993 (SEC File No. 001-09047).
4.2	Indenture of Registrant relating the Junior Subordinated Debt Securities issued to Independent Capital Trust V is incorporated by reference to Exhibit 4.13 to Form 10-K for the year ended December 31, 2006 filed on February 28, 2007 (SEC File No. 001-09047).
4.3	Form of Certificate of Junior Subordinated Debt Security for Independent Capital Trust V (included as Exhibit A to Exhibit 4.9).
4.4	Amended and Restated Declaration of Trust for Independent Capital Trust V is incorporated by reference to Exhibit 4.15 to Form 10-K for the year ended December 31, 2006 filed on February 28, 2007 (SEC File No. 001-09047).
4.5	Issuing and Paying Agency Agreement is incorporated by reference to Exhibit 4.1 to Form 8-K filed on November 17, 2014 (SEC File No. 001-09047).
4.6	Form of Fixed to Floating Rate Subordinate Notes Due 2024 is incorporated by reference to Exhibit 4.2 to Form 8-K filed on November 17, 2014 (SEC File No. 001-09047).
4.7	Form of Capital Security Certificate for Independent Capital Trust V (included as Exhibit A-1 to Exhibit 4.9).
4.8	Guarantee Agreement relating to Independent Capital Trust V is incorporated by reference to Exhibit 4.17 to Form 10-K for the year ended December 31, 2006 filed on February 28, 2007 (SEC File No. 001-09047).
4.9	Forms of Capital Securities Purchase Agreements for Independent Capital Trust V is incorporated by reference to Exhibit 4.18 to Form 10-K for the year ended December 31, 2006 filed on February 28, 2007 (SEC File No. 001-09047).
4.10	Subordinated Debt Purchase Agreement between USB Capital Resources and Rockland Trust Company dated as of August 27, 2008 is incorporated by reference to Exhibit 99.2 to Form 8-K filed on September 2, 2008 (SEC File No. 001-09047).
4.11	Rockland Trust Company Employee Savings, Profit Sharing and Stock Ownership Plan, incorporated by reference to Exhibit 4.2 to Form S-8 filed on April 16, 2010 (SEC File No. 333-166124).#
4.12	Independent Bank Corp. 2014 Dividend Reinvestment and Stock Purchase Plan incorporated by reference to Form S-3 filed on October 31, 2014 (SEC File No. 333-169024).#
10.1	Independent Bank Corp. Amended and Restated 2005 Employee Stock Plan, incorporated by reference to Exhibit 99.1 to Form S-8 filed on June 17, 2011. #
10.2	Independent Bank Corp. Deferred Compensation Program for Directors (restated as amended as of December 1, 2000), is incorporated by reference to Exhibit 10.3 to Form 10-K for the year ended December 31, 2000 filed on March 29, 2001 (SEC File No. 001-09047). #
10.3	Revised employment agreements between Christopher Oddleifson, Raymond G. Fuerschbach, Gerard F. Nadeau, and Edward H. Seksay and the Company and/or Rockland Trust incorporated by reference to Exhibit 99.1, 99.2, 99.4, 99.5, and 99.6 to Form 8-K filed on November 21, 2008 (SEC File No. 001-09047). #
10.4	Rockland Trust Company Amended and Restated Supplemental Executive Retirement Plan, incorporated by reference to Exhibit 99.8 to Form 8-K filed on November 21, 2008 (SEC File No. 001-09047).#
10.5	New employment agreements between Barry H. Jensen and Robert D. Cozzone and the Company and/or Rockland Trust dated September 5, 2013, are incorporated by reference to Exhibit10.8 to Form 10-Q filed on November 6, 2013. #
10.6	Specimen forms of stock option agreements for the Company's Chief Executive and other executive officers are incorporated by reference to Exhibits 99.1 and 99.2 to Form 8-K filed on December 20, 2005 (SEC File No. 001-09047).#

152

10.7	Information Technology service Agreement by and between Fidelity Information Services, LLC and Independent Bank Corp., effective as of January 1, 2015, is incorporated by reference to Exhibit 10.1 to Form 10-Q for the quarter ended March 31, 2015 filed on May 6, 2015 (SEC File No. 001-09047).
10.08	New Markets Tax Credit program Allocation Agreement between the Community Development Financial Institutions Fund of the United States Department of the Treasury and Rockland Community Development with an Allocation Effective Date of June 18, 2009 is incorporated by reference to Exhibit 99.1 to Form 10-Q for the three and nine months ended September 30, 2009.
10.09	New Markets Tax Credit program Allocation Agreement between the Community Development Financial Institutions Fund of the United States Department of the Treasury and Rockland Community Development with an Allocation Effective Date of April 17, 2012 is incorporated by reference to Exhibit 99.1 to form 8-K filed on April 26, 2012.
10.10	Core System Processing Services Agreement dated and effective as of May 11, 2012 by and between Fidelity Information Services, Inc. and Independent Bank Corp. is incorporated by reference to Exhibit 99.1 to Form 8-K/A filed on July 24, 2012.
10.11	Independent Bank Corp. 2010 Nonemployee Director Stock Plan, incorporated by reference to Exhibit 99.1 to Form 8-K filed May 24, 2010. #
10.12	Independent Bank Corp. 2010 Stock Option Agreement for Nonemployee Director, incorporated by reference to Exhibit 99.2 to Form 8-K filed May 24, 2010. #
10.13	Independent Bank Corp. 2010 Restricted Stock Agreement for Nonemployee Director, incorporated by reference to Exhibit 99.3 to Form 8-K filed May 24, 2010. #
10.14	Master Data Processing Services Agreement dated and effective as of May 15, 2012 between Rockland Trust Company and Q2 Software, Inc., incorporated by reference to Exhibit 10.1 to Form 8-K/A filed July 18, 2012.
10.15	Independent Bank Corp. Forms of Performance Based Restricted Stock Award Agreement for Chief Executive Officer and Executive Officers and related performance goals, incorporated by reference to Exhibits 99.1, 99.2 and 99.3 to Form 8-K filed on March 26, 2014.#
10.16	Nonqualified Deferred Compensation Plan, incorporated by reference to Exhibit 99.1 to Form 8-K filed on June 25, 2014.#
10.17	Form of Independent Bank Corp. Chief Executive Officer Time Vesting Restricted Stock Agreement incorporated by reference to Exhibit 10.26 to Form 10-K for the year ended December 31, 2014 filed on February 27, 2015. #

10.18	Form of Independent Bank Corp. Executive Officer Time Vesting Restricted Stock Agreement, incorporated by reference to Exhibit 10.27 to Form 10-K for the year ended December 31, 2014 filed on February 27, 2015. #
10.19	Form of Independent Bank Corp. Time-Vesting Restricted Stock Agreement for Rockland Trust Company Officers, incorporated by reference to exhibit 10.28 to Form 10-K for the year ended December 31, 2014 filed on February 27, 2015. #
10.20	Peoples Federal Savings Bank Director Retirement Agreement between Peoples Federal Savings Bank and Maurice H. Sullivan, Jr. dated November 29, 2004, incorporated by reference to exhibit 10.29 to Form 10-K for the year ended December 31, 2014 filed on February 27, 2015. #
10.21	Information Technology Service Agreement by and between Fidelity Information Services, LLC and Independent Bank Corp., effective as of January 1, 2015, incorporated by reference to Exhibit 10.1 to Form 8-K/A filed on March 6, 2015. ++
10.22	Independent Bank Corp. and Rockland Trust Company Executive Officer Performance Incentive Plan, incorporated by reference to Exhibit 99.1 to Form 8-K filed on February 17, 2016. #
10.23	Rockland Trust Company Amended and Restated 401(k) Restoration Plan, incorporated by reference to Exhibit 4.1 to Form S-8 filed on April 20, 2015. #

23.1	Consent of Independent Registered Public Accounting Firm*
31.1	Section 302 Certification of Sarbanes-Oxley Act of 2002 is attached hereto.*
31.2	Section 302 Certification of Sarbanes-Oxley Act of 2002 is attached hereto.*
32.1	Section 906 Certification of Sarbanes-Oxley Act of 2002 is attached hereto.+
32.2	Section 906 Certification of Sarbanes-Oxley Act of 2002 is attached hereto.+
101	Interactive Data File +

* Filed herewith

+ Furnished herewith

153

# Management contract or compensatory plan or arrangement.

++ Confidential treatment has been granted for certain portions of this exhibit pursuant to a confidential treatment order granted by the SEC. The omitted portions have been separately filed with the SEC.

154

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

INDEPENDENT BANK CORP.

/s/                     CHRISTOPHER ODDLEIFSON

Christopher Oddleifson,

Chief Executive Officer and President

Date: February 28, 2017

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. Each person whose signature appears below hereby makes, constitutes and appoints Christopher Oddleifson and Robert Cozzone and each of them acting individually, his true and lawful attorneys, with full power to sign for such person and in such person’s name and capacity indicated below any and all amendments to this Form 10-K, hereby ratifying and confirming such person’s signature as it may be signed by said attorneys to any and all amendments.

155

/s/    CHRISTOPHER ODDLEIFSON	Director CEO/President	Date:	February 28, 2017
Christopher Oddleifson	(Principal Executive Officer)
/s/    DONNA L. ABELLI	Director and Chairman of the Board	Date:	February 28, 2017
Donna L. Abelli
/s/    ROBERT COZZONE	CFO (Principal Financial Officer)	Date:	February 28, 2017
Robert Cozzone
/s/    MARK RUGGIERO	Controller	Date:	February 28, 2017
Mark Ruggiero	(Principal Accounting Officer)
/s/    WILLIAM P. BISSONNETTE	Director	Date:	February 28, 2017
William P. Bissonnette
/s/    KEVIN J. JONES	Director	Date:	February 28, 2017
Kevin J. Jones
/s/ MARY L. LENTZ	Director	Date:	February 28, 2017
Mary L. Lentz
/s/    EILEEN C. MISKELL	Director	Date:	February 28, 2017
Eileen C. Miskell
/s/    JOHN J. MORRISSEY	Director	Date:	February 28, 2017
John J. Morrissey
/s/    DANIEL F. O’BRIEN	Director	Date:	February 28, 2017
Daniel F. O’ Brien
/s/    CARL RIBEIRO	Director	Date:	February 28, 2017
Carl Ribeiro
/s/    JOHN H. SPURR, JR.	Director	Date:	February 28, 2017
John H. Spurr, Jr.
/s/ MAURICE H. SULLIVAN, JR.	Director	Date:	February 28, 2017
Maurice H. Sullivan, Jr.
/s/    FREDERICK TAW	Director	Date:	February 28, 2017
Frederick Taw
/s/    BRIAN S. TEDESCHI	Director	Date:	February 28, 2017
Brian S. Tedeschi
/s/    THOMAS R. VENABLES	Director	Date:	February 28, 2017
Thomas R. Venables

156

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the following Registration Statements:

• Registration Statement (Form S-3 ASR No. 333-199750) pertaining to the Independent Bank Corp. 2014 Dividend Reinvestment and Stock Purchase Plan.

• Registration Statement (Form S-3 ASR No. 333-206481) of Independent Bank Corp.

• Registration Statement (Form S-8 No. 333-174991) pertaining to the Independent Bank Corp. Amended and Restated 2005 Employee Stock Plan

• Registration Statement (Form S-8 No. 333-167046) pertaining to the Independent Bank Corp. 2010 Non-Employee Director Stock Plan

• Registration Statement (Form S-8 No. 333-166124) pertaining to The Rockland Trust Company Employee Savings, Profit Sharing and Stock Ownership Plan

• Registration Statement (Form S-8 No. 333-126986) pertaining to the Independent Bank Corp. 2005 Employee Stock Plan

• Registration Statement (From S-8 No. 333-203525) pertaining to the Rockland Trust Company Amended and Restated 401(k) Restoration Plan

of our reports dated February 28, 2017, with respect to the consolidated financial statements of Independent Bank Corp. and the effectiveness of internal control over financial reporting of Independent Bank Corp. included in this Annual Report (Form 10-K) of Independent Bank Corp. for the year ended December 31, 2016.

Boston, Massachusetts

February 28, 2017

EX-31.1

Exhibit 31.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER

PURSUANT TO RULE 13A-14 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Christopher Oddleifson, certify that:

1.I have reviewed this annual report on Form 10-K of Independent Bank Corp.;

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 controls 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 controls 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 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: February 28, 2017

/s/ CHRISTOPHER ODDLEIFSON

Christopher Oddleifson

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER

PURSUANT TO RULE 13A-14 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Robert Cozzone:

1.I have reviewed this annual report on Form 10-K of Independent Bank Corp.;

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 controls 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 controls 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 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: February 28, 2017

/s/  ROBERT COZZONE

Robert Cozzone

Chief Financial Officer and Treasurer

EX-32.1

Exhibit 32.1

CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Independent Bank Corp. (the “Company”) on Form 10-K for the year ending December 31, 2016, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certifies, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the undersigned’s best knowledge and belief:

(a) the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 as amended; and

(b) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: February 28, 2017

Independent Bank Corp.

(“Company”)

/s/ CHRISTOPHER ODDLEIFSON

Christopher Oddleifson

Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to Independent Bank Corp. and will be retained by Independent Bank Corp. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Independent Bank Corp. (the “Company”) on Form 10-K for the year ending December 31, 2016, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certifies, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the undersigned’s best knowledge and belief:

(a) the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 as amended; and

(b) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: February 28, 2017

Independent Bank Corp.

(“Company”)

/s/  ROBERT COZZONE

Robert Cozzone

Chief Financial Officer and Treasurer

A signed original of this written statement required by Section 906 has been provided to Independent Bank Corp. and will be retained by Independent Bank Corp. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2016	Feb. 21, 2017
Document and Entity Information [Abstract]
Entity Registrant Name	Independent Bank Corp
Entity Central Index Key	0000776901
Document Type	10-K
Document Period End Date	Dec. 31, 2016
Amendment Flag	false
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	FY
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float	$ 1,169,088,062
Entity Common Stock, Shares Outstanding		27,042,036

XML

Consolidated Balance Sheets - USD ($)	Dec. 31, 2016	Dec. 31, 2015
Assets
Cash and due from banks	$ 97,196,000	$ 84,813,000
Interest-earning deposits with banks	191,899,000	190,952,000
Securities
Trading Securities	804,000	356,000
Securities - available for sale	363,644,000	367,249,000
Securities - held to maturity (fair value $485,650 and $478,749)	487,076,000	477,507,000
Total securities	851,524,000	845,112,000
Loans held for sale (at fair value)	6,139,000	5,990,000
Loans
Commercial and industrial	902,053,000	843,276,000
Commercial real estate	3,010,798,000	2,653,434,000
Commercial construction	320,391,000	373,368,000
Small business	122,726,000	96,246,000
Residential real estate	644,426,000	638,606,000
Loans and Leases Receivable Consumer Home Equity in First Position	577,006,000	543,092,000
Loans and Leases Receivable Consumer Home Equity in Subordinated Position	411,141,000	384,711,000
Other consumer	11,064,000	14,988,000
Total loans	5,999,605,000	5,547,721,000
Less: allowance for loan losses	(61,566,000)	(55,825,000)
Net loans	5,938,039,000	5,491,896,000
Federal Home Loan Bank stock	11,497,000	14,431,000
Bank premises and equipment, net	78,480,000	75,663,000
Goodwill	221,526,000	201,083,000
Other intangible assets	9,848,000	11,826,000
Cash surrender value of life insurance policies	144,503,000	134,627,000
Other real estate owned and other foreclosed assets	4,173,000	2,159,000
Other assets	154,551,000	150,917,000
Total assets	7,709,375,000	7,209,469,000
Deposits
Demand deposits	2,057,086,000	1,846,593,000
Savings and interest checking accounts	2,469,237,000	2,370,141,000
Money market	1,236,778,000	1,089,139,000
Time certificates of deposit of $100,000 and over	266,190,000	274,701,000
Other time certificates of deposits	382,962,000	410,129,000
Total deposits	6,412,253,000	5,990,703,000
Borrowings
Advances from Federal Home Loan Banks	50,819,000	102,080,000
Customer Repurchase Agreements and other short-term borrowings	176,913,000	133,958,000
Junior subordinated debentures	73,107,000	73,306,000
Subordinated debentures (less unamortized debt issuance costs of $365 and $376)	34,635,000	34,589,000
Total borrowings	335,474,000	343,933,000
Other liabilities	96,958,000	103,370,000
Total liabilities	6,844,685,000	6,438,006,000
Commitments and contingencies
Stockholders' Equity
Preferred stock, $.01 par value. authorized: 1,000,000 shares, outstanding: none	0	0
Common stock, $.01 par value. authorized: 75,000,000 shares, issued and outstanding: 27,005,813 shares at December 31, 2016 and 26,236,352 shares at December 31, 2015 (includes 212,698 and 230,900 shares of unvested participating restricted stock awards, respectively)	268,000	260,000
Value of shares held in rabbi trust at cost: 170,036 shares at December 31, 2016 and 173,378 shares at December 31, 2015	(4,277,000)	(3,958,000)
Deferred compensation obligation	4,277,000	3,958,000
Additional paid in capital	451,664,000	405,486,000
Retained earnings	414,095,000	368,169,000
Accumulated other comprehensive loss, net of tax	(1,337,000)	(2,452,000)
Total stockholders' equity	864,690,000	771,463,000
Liabilities and Equity	$ 7,709,375,000	$ 7,209,469,000

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Consolidated Balance Sheets (Parenthetical) - USD ($)	Dec. 31, 2016	Dec. 31, 2015
Time certificates of deposit least amount	$ 100,000	$ 100,000
Securities held to maturity, fair value	$ 485,650,000	$ 478,749,000
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	75,000,000	75,000,000
Common stock, shares issued	27,005,813	26,236,352
Common stock, unvested restricted Stock awards	212,698	230,900
Shares held in rabbit trust at cost	170,036	173,378
Common Stock Outstanding
Common stock, shares outstanding	27,005,813	26,236,352

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Consolidated Statements of Income - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Interest income
Interest and fees on loans	$ 224,244,000	$ 214,724,000	$ 197,021,000
Taxable interest and dividends on securities	20,851,000	20,120,000	18,610,000
Nontaxable interest and dividends on securities	117,000	127,000	144,000
Interest on loans held for sale	235,000	225,000	405,000
Interest on federal funds sold and short-term investments	1,190,000	349,000	279,000
Total interest and dividend income	246,637,000	235,545,000	216,459,000
Interest expense
Interest on deposits	11,140,000	11,576,000	11,039,000
Interest on borrowings	7,653,000	9,041,000	9,378,000
Total interest expense	18,793,000	20,617,000	20,417,000
Net interest income	227,844,000	214,928,000	196,042,000
Provision (benefit)	6,075,000	1,500,000	10,403,000
Net interest income after provision for loan losses	221,769,000	213,428,000	185,639,000
Noninterest income
Deposit account fees	18,085,000	18,078,000	18,065,000
Interchange and ATM fees	16,210,000	14,728,000	12,975,000
Investment management	21,809,000	20,735,000	19,642,000
Fees and Commission Mortgage Banking	6,607,000	5,163,000	3,384,000
Increase in cash surrender value of life insurance policies	4,089,000	3,692,000	3,128,000
Gain on life insurance benefits	0	0	1,964,000
Available-For-Sale Securities - Fixed Income Gross Realized Gains	0	798,000	121,000
Gain (Loss) on Sale of Equity Investments	6,000	20,000	91,000
Loan level derivative income	6,155,000	3,830,000	2,477,000
Other noninterest income	9,467,000	8,844,000	8,096,000
Total noninterest income	82,428,000	75,888,000	69,943,000
Noninterest expenses
Salaries and employee benefits	108,636,000	105,068,000	94,044,000
Occupancy and equipment expenses	22,867,000	23,020,000	21,820,000
Data processing & facilities management	4,975,000	4,631,000	4,765,000
FDIC assessment	3,380,000	3,979,000	3,770,000
Advertising expense	5,202,000	4,645,000	3,859,000
Consulting expense	3,486,000	3,680,000	2,923,000
Gains (Losses) on Extinguishment of Debt	437,000	122,000	0
Available-for-Sale Securities - Fixed Income Gross Realized Losses	0	1,124,000	21,000
Available-For-Sale Securities - Equity Gross Realized Losses	32,000	99,000	0
Merger and acquisition expense	5,455,000	10,501,000	1,339,000
Other noninterest expenses	37,652,000	40,269,000	39,297,000
Total noninterest expenses	192,122,000	197,138,000	171,838,000
Income before income taxes	112,075,000	92,178,000	83,744,000
Provision for income taxes	35,427,000	27,218,000	23,899,000
Net Income	$ 76,648,000	$ 64,960,000	$ 59,845,000
Basic earnings per share (in dollars per share)	$ 2.90	$ 2.51	$ 2.50
Diluted earnings per share (in dollars per share)	$ 2.90	$ 2.50	$ 2.49
Weighted average common shares (basic) (in shares)	26,404,071	25,891,382	23,899,562
Common share equivalents (in shares)	51,847	68,566	93,815
Weighted average common shares (diluted) (in shares)	26,455,918	25,959,948	23,993,377.000
Retained Earnings
Noninterest expenses
Net Income	$ 76,648,000	$ 64,960,000	$ 59,845,000
Cash dividends declared (in dollars per share)	$ 1.16	$ 1.04	$ 0.96

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Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Statement of Comprehensive Income [Abstract]
Net income	$ 76,648	$ 64,960	$ 59,845
Other comprehensive income (loss), net of tax
Net change in fair value of securities available for sale	(1,133)	(2,083)	5,412
Net change in fair value of cash flow hedges	2,170	1,199	2,256
Net change in other comprehensive income for defined benefit postretirement plans	78	564	(2,366)
Total other comprehensive income (loss)	1,115	(320)	5,302
Total comprehensive income	$ 77,763	$ 64,640	$ 65,147

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Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Total	Common Stock Outstanding	Common Stock	Value of Shares Held in Rabbi Trust at Cost	Deferred Compensation Obligation	Additional Paid in Capital	Retained Earnings	Accumulated Other Comprehensive Loss
Common Stock, Dividends, Per Share, Declared							$ 0.96
Beginning balance at Dec. 31, 2013	$ 591,540		$ 235	$ (3,404)	$ 3,404	$ 305,179	$ 293,560	$ (7,434)
Beginning balance (in shares) at Dec. 31, 2013		23,805,984
Net income	59,845						59,845
Other comprehensive income	5,302							5,302
Common dividend declared	(22,961)						(22,961)
Common stock issued for acquisition	0
Proceeds from exercise of stock options, net of cash paid	2,333		1			2,332
Proceeds from exercise of stock options (in shares)		91,171
Tax benefit related to equity award activity	704					704
Stock based compensation	2,712					2,712
Restricted stock awards issued, net of awards surrendered (in shares)		59,675
Restricted stock awards issued, net of awards surrendered	(641)		1			(642)
Stock Issued During Period, Shares, Other		41,908
Stock Issued During Period, Value, Other	1,555					1,555
Increase (Decrease) in Deferred Compensation				(262)	262
Tax benefit related to deferred compensation distributions	138					138
Ending balance (in shares) at Dec. 31, 2014		23,998,738
Ending balance at Dec. 31, 2014	640,527		237	(3,666)	3,666	311,978	$ 330,444	(2,132)
Common Stock, Dividends, Per Share, Declared							$ 1.04
Net income	64,960						$ 64,960
Other comprehensive income	(320)							(320)
Common dividend declared	(27,235)						(27,235)
Common stock issued for acquisition	86,415		21			86,394
Common stock issued for acquisition (in shares)		2,052,137
Proceeds from exercise of stock options, net of cash paid	1,367		1			1,366
Proceeds from exercise of stock options (in shares)		100,794
Tax benefit related to equity award activity	1,042					1,042
Stock based compensation	2,490					2,490
Restricted stock awards issued, net of awards surrendered (in shares)		23,851
Restricted stock awards issued, net of awards surrendered	(657)		1			(658)
Stock Issued During Period, Shares, Other		60,832
Stock Issued During Period, Value, Other	2,695					2,695
Increase (Decrease) in Deferred Compensation	0			(292)	292
Tax benefit related to deferred compensation distributions	179					179
Ending balance (in shares) at Dec. 31, 2015		26,236,352
Ending balance at Dec. 31, 2015	771,463		260	(3,958)	3,958	405,486	$ 368,169	(2,452)
Common Stock, Dividends, Per Share, Declared							$ 1.16
Net income	76,648						$ 76,648
Other comprehensive income	1,115							1,115
Common dividend declared	(30,722)						(30,722)
Common stock issued for acquisition	40,730		7			40,723
Common stock issued for acquisition (in shares)		672,665
Proceeds from exercise of stock options, net of cash paid	201					201
Proceeds from exercise of stock options (in shares)		13,449
Tax benefit related to equity award activity	476					476
Stock based compensation	2,965					2,965
Restricted stock awards issued, net of awards surrendered (in shares)		33,432
Restricted stock awards issued, net of awards surrendered	(696)		1			(697)
Stock Issued During Period, Shares, Other		49,915
Stock Issued During Period, Value, Other	2,323					2,323
Increase (Decrease) in Deferred Compensation and Other Retirement Benefits				(319)	319
Tax benefit related to deferred compensation distributions	187					187
Ending balance (in shares) at Dec. 31, 2016		27,005,813
Ending balance at Dec. 31, 2016	$ 864,690		$ 268	$ (4,277)	$ 4,277	$ 451,664	$ 414,095	$ (1,337)

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Consolidated Statements of Cash Flows	12 Months Ended
	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)
Cash flow from operating activities
Net income	$ 76,648,000	$ 64,960,000	$ 59,845,000
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	14,354,000	12,307,000	12,108,000
Provision for loan losses	6,075,000	1,500,000	10,403,000
Deferred income tax expense (benefit)	(5,000)	10,220,000	2,840,000
Loss on write-down of investments in securities available for sale	26,000	405,000	(191,000)
Net loss on bank premises and equipment	114,000	221,000	469,000
Loss on extinguishment of debt	437,000	122,000	0
Loss on termination of derivatives	0	0	1,122,000
Net loss on other real estate owned and foreclosed assets	29,000	1,152,000	723,000
Realized gain on sale leaseback transaction	(1,034,000)	(1,034,000)	(1,034,000)
Stock based compensation	2,965,000	2,490,000	2,712,000
Excess tax benefit related to equity award activity	(476,000)	(1,042,000)	(704,000)
Increase in cash surrender value of life insurance policies	(4,089,000)	(3,692,000)	(3,128,000)
Gain on life insurance benefits	0	0	(1,964,000)
Change in fair value on loans held for sale	(87,000)	22,000	(18,000)
Net change in:
Trading assets	(448,000)	(356,000)	0
Loans held for sale	(62,000)	876,000	2,012,000
Other assets	7,627,000	3,842,000	(1,907,000)
Other liabilities	(8,738,000)	(2,450,000)	7,017,000
Total adjustments	16,688,000	24,583,000	30,460,000
Net cash provided by operating activities	93,336,000	89,543,000	90,305,000
Cash flows used in investing activities
Proceeds from sales of securities available for sale	618,000	14,199,000	5,438,000
Proceeds from maturities and principal repayments of securities available for sale	69,775,000	78,497,000	47,720,000
Purchases of securities available for sale	(69,671,000)	(73,064,000)	(37,047,000)
Proceeds from maturities and principal repayments of securities held to maturity	90,991,000	60,168,000	44,710,000
Purchases of securities held to maturity	(100,198,000)	(162,021,000)	(69,544,000)
Redemption of Federal Home Loan Bank stock	5,229,000	23,054,000	6,693,000
Investments in low income housing projects	(7,626,000)	(15,055,000)	(16,452,000)
Purchases of life insurance policies	(163,000)	(162,000)	(10,161,000)
Proceeds from life insurance policies	0	0	6,310,000
Net increase in loans	(227,838,000)	(114,550,000)	(266,961,000)
Cash Acquired in Excess of Payments to Acquire Business	8,668,000
Cash provided by (used in) business combinations		(13,448,000)	0
Purchases of bank premises and equipment	(10,395,000)	(10,488,000)	(7,678,000)
Proceeds from the sale of bank premises and equipment	345,000	1,233,000	1,219,000
Payments on early termination of hedging relationship			(1,122,000)
Proceeds from the sale of other real estate owned and foreclosed assets	1,583,000	7,667,000	7,458,000
Net payments relating to other real estate owned and foreclosed assets	(204,000)	(1,571,000)	(3,255,000)
Net cash used in investing activities	(238,886,000)	(205,541,000)	(292,672,000)
Cash flows provided by financing activities
Net decrease in time deposits	(104,803,000)	(80,726,000)	(94,008,000)
Net increase in other deposits	350,739,000	428,713,000	318,056,000
Net repayments of short-term Federal Home Loan Bank borrowings	(37,000,000)	(10,000,000)	(65,000,000)
Repayments of long-term Federal Home Loan Bank borrowings	(65,791,000)	(9,000,000)	(5,000,000)
Net increase (decrease) in customer repurchase agreements	42,955,000	(13,932,000)	(1,398,000)
Increase (Decrease) in Payables under Repurchase Agreements	0	(50,000,000)	0
Net decrease in other short term borrowings			(5,000,000)
Repayments of Subordinated Debt	0	(30,000,000)
Proceeds from Issuance of Subordinated Long-term Debt			35,000,000
Net proceeds from exercise of stock options	201,000	1,367,000	2,333,000
Restricted stock awards issued, net of awards surrendered	(696,000)	(657,000)	(641,000)
Excess tax benefit from stock based compensation	476,000	1,042,000	704,000
Tax benefit from deferred compensation distribution	187,000	179,000	138,000
Proceeds from shares issued under the direct stock purchase plan	2,323,000	2,695,000	1,555,000
Common dividends paid	(29,711,000)	(26,172,000)	(22,443,000)
Net cash provided by financing activities	158,880,000	213,509,000	164,296,000
Net increase (decrease) in cash and cash equivalents	13,330,000	97,511,000	(38,071,000)
Cash and cash equivalents at beginning of year	275,765,000	178,254,000	216,325,000
Cash and cash equivalents at end of period	289,095,000	275,765,000	178,254,000
Supplemental schedule of noncash investing and financing activities
Interest on deposits and borrowings	18,963,000	20,773,000	20,257,000
Income taxes	33,473,000	11,841,000	14,547,000
Transfer of loans to other real estate owned and foreclosed assets	1,322,000	1,522,000	5,248,000
Real Estate Owned, Transfer to Real Estate Owned	0	142,000
Capital commitment relating to Low Income Housing Project investments, noncash	5,180,000	1,658,000	38,839,000
In conjunction with the Company's acquisitions, assets were acquired and liabilities were assumed as follows
Common stock issued for acquisition	40,730,000	86,415,000	0
Fair value of assets acquired, net of cash acquired	266,242,000	598,376,000	$ 0
Fair value of liabilities assumed		$ 498,513,000
New England Bancorp, Inc. [Member]
In conjunction with the Company's acquisitions, assets were acquired and liabilities were assumed as follows
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Financial Liabilities	$ 234,180,000

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2016

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

Independent Bank Corp. (the “Company”) is a bank holding company whose principal subsidiary is Rockland Trust Company (“Rockland Trust” or the “Bank”). Rockland Trust is a state-chartered commercial bank, which operates eighty full service and three limited service retail branches, eleven commercial banking centers, five investment management offices and one mortgage lending center, all of which are located in Eastern Massachusetts, including Cape Cod, with the exception of an investment management group/commercial lending office located in Providence, Rhode Island. Rockland Trust deposits are insured by the Federal Deposit Insurance Corporation, subject to regulatory limits. The Company’s primary source of income is from providing loans to individuals and small-to-medium sized businesses in its market area. Rockland Trust is a community-oriented commercial bank, and the community banking business is the Company's only reportable operating segment.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company, the Bank and other wholly-owned subsidiaries, except subsidiaries that are not deemed necessary to be consolidated. All significant intercompany balances and transactions have been eliminated in consolidation.

The Company determines whether it has a controlling financial interest in an entity by first evaluating whether the entity is a voting interest entity or a variable interest entity under GAAP. Voting interest entities are entities in which the total equity investment at risk is sufficient to enable the entity to finance itself independently and provides the equity holders with the obligation to absorb losses, the right to receive residual returns and the right to make decisions about the entity’s activities. The Company would consolidate voting interest entities in which it has all, or at least a majority of, the voting interest. As defined in applicable accounting standards, variable interest entities (“VIEs”) are entities that lack one or more of the characteristics of a voting interest entity. A controlling financial interest in a VIE is present when the Company has both the power and ability to direct the activities of the VIE that most significantly impact the VIE's economic performance and an obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. 

The Company also owns the common stock of various trusts which have issued trust preferred securities. These trusts are VIEs in which the Company is not the primary beneficiary and, therefore, are not consolidated. The trust's only assets are junior subordinated debentures issued by the Company, which were acquired by the trust using the proceeds from the issuance of the trust preferred securities and common stock. The junior subordinated debentures are included in long-term debt and the Company’s equity interest in the trust is included in other assets in the accompanying Consolidated Balance Sheets. Interest expense on the junior subordinated debentures is reported in interest expense on long-term debt in the accompanying Consolidated Statements of Income.

Reclassification

Certain previously reported amounts have been reclassified to conform to the current year’s presentation.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could vary from these estimates. Material estimates that are particularly susceptible to significant changes in the near-term relate to the determination of the allowance for loan losses, income taxes, valuation and potential impairment of investment securities, other-than-temporary impairment (“OTTI”) of certain investment securities, as well as valuation of goodwill and other intangibles and their respective analyses of impairment.

Significant Concentrations of Credit Risk

The vast majority of the Bank’s lending activities are conducted in the Commonwealth of Massachusetts and Rhode Island. The Bank originates commercial and industrial loans, commercial and residential real estate loans, including construction loans, small business loans, home equity loans, and other consumer loans for its portfolio. The Bank considers a concentration of credit to a particular industry to exist when the aggregate credit exposure which includes direct, indirect or contingent obligations to a borrower, an affiliated group of borrowers or a nonaffiliated group of borrowers engaged in one industry, exceeds 10% of the Bank’s loan portfolio.

Loans originated by the Bank to lessors of nonresidential buildings represented 15.4% and 15.0% of the total loan portfolio as of December 31, 2016 and 2015, respectively. Within this concentration category the Company believes it is well diversified among collateral property types and tenant industries.

Cash and Cash Equivalents

For purposes of reporting cash flows, cash and cash equivalents may include cash on hand, amounts due from banks, inclusive of interest-earning deposits held at banks, and federal funds sold. Generally, federal funds are sold for up to two week periods.

Securities

Investment securities are classified at the time of purchase as “available for sale,” “held to maturity,” or “trading.” Classification is constantly re-evaluated for consistency with corporate goals and objectives. Trading securities are recorded at fair value with subsequent changes in fair value recorded in earnings. Debt securities that management has the positive intent and ability to hold to maturity are classified as “held to maturity” and recorded at amortized cost. Securities not classified as held to maturity or trading, including equity securities with readily determinable fair values, are classified as “available for sale” and recorded at fair value, with changes in fair value excluded from earnings and reported in other comprehensive income, net of related tax. Purchase premiums and discounts are recognized in interest income, using the interest method, to arrive at periodic interest income at a constant effective yield, thereby reflecting the securities market yield. Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method.

Declines in the fair value of held to maturity and available for sale securities below their amortized cost deemed to be OTTI are written down to fair value as determined by a cash flow analysis. To the extent the estimated cash flows do not support the amortized cost, the deficiency is considered to be due to credit loss and recognized in earnings. Unless the Company intends to sell the security, or if it is more likely than not that the Company will be required to sell the debt security before its anticipated recovery, the remainder of the OTTI charge is considered to be due to other factors, such as liquidity or interest rates, and thus is not recognized in earnings, but rather through other comprehensive income, net of related tax. The Company evaluates individual securities that have fair values below cost for six months or longer, or for a shorter period of time if considered appropriate by management, to determine if the decline in fair value is other-than-temporary. Consideration is given to the obligor of the security, whether the security is guaranteed, whether there is a projected adverse change in cash flows, the liquidity of the security, the type of security, the capital position of security issuers, and payment history of the security, amongst other factors when evaluating such securities.

Loans Held for Sale

The Bank primarily classifies new residential real estate mortgage loans as held for sale based on intent, which is determined when loans are underwritten. Residential real estate mortgage loans not designated as held for sale are retained based upon available liquidity, for interest rate risk management and other business purposes.

The Company has elected the fair value option to account for originated closed loans intended for sale. Accordingly, changes in fair value relating to loans intended for sale are recorded in earnings and are offset by changes in fair value relating to interest rate lock commitments and forward sales commitments. Gains and losses on residential loan sales (sales proceeds minus carrying amount) are recorded in mortgage banking income. Upfront costs and fees related to items for which the fair value option is elected are recognized in earnings as incurred and not deferred.

Loans

Loans are carried at the principal amounts outstanding, or amortized acquired fair value in the case of acquired loans, adjusted by partial charge-offs and net of deferred loan costs or fees. For originated loans, loan fees and certain direct origination costs are deferred and amortized into interest income over the expected term of the loan using the level-yield method.  When a loan is paid off, the unamortized portion is recognized in interest income. Interest income on loans is accrued based upon the daily principal amount outstanding except for loans on nonaccrual status. For acquired loans which did not show signs of credit deterioration at acquisition, interest income is also accrued based upon the daily principal amount outstanding and is then further adjusted by the accretion of any discount or amortization of any premium associated with the loan.

 As a general rule, loans more than 90 days past due with respect to principal or interest are classified as nonaccrual loans, or sooner if management considers such action to be prudent. However, loans that are more than 90 days past due may be kept on an accruing status if the loan is well secured and/or in the process of collection. The Company may also put a junior lien mortgage on nonaccrual status as a result of delinquency with respect to the first position, which is held by another financial institution, while the junior lien is currently performing. Income accruals are suspended on all nonaccrual loans and all previously accrued and uncollected interest is reversed against current income. A loan remains on nonaccrual status until it becomes current with respect to principal and interest (and in certain instances remains current for up to six months), the loan is liquidated, or when the loan is determined to be uncollectible and is charged-off against the allowance for loan losses. When doubt exists as to the collectability of a loan, any payments received are applied to reduce the recorded investment in the asset to the extent necessary to eliminate such doubt. For all loan portfolios, a charge-off occurs when the Company determines that a specific loan, or portion thereof, is uncollectible.  This determination is made based on management's review of specific facts and circumstances of the individual loan, including assessing the viability of the customer’s business or project as a going concern, the expected cash flows to repay the loan, the value of the collateral and the ability and willingness of any guarantors to perform. 

In cases where a borrower experiences financial difficulties and the Company makes certain concessionary modifications to contractual terms, the loan is classified as a troubled debt restructuring (“TDR”). Modifications may include adjustments to interest rates, extensions of maturity, consumer loans where the borrower's obligations have been effectively discharged through Chapter 7 Bankruptcy and the borrower has not reaffirmed the debt to the Bank, and other actions intended to minimize economic loss and avoid foreclosure or repossession of collateral. The recorded investment of loans classified as TDRs is adjusted to reflect the changes in value, if any, resulting from the granting of a concession. Nonaccrual loans that are restructured remain on nonaccrual for a period of six months to demonstrate that the borrower can meet the restructured terms. If the restructured loan is on accrual status prior to being modified, it is reviewed to determine if the modified loan should remain on accrual status. If the borrower’s ability to meet the revised payment schedule is not reasonably assured, the loan is classified as a nonaccrual loan. Loans classified as TDRs remain classified as such for the life of the loan, except in limited circumstances, when it is determined that the borrower is performing under the modified terms and the restructuring agreement specified an interest rate greater than or equal to an acceptable market rate for a comparable new loan at the time of the restructuring.

Acquired loans

All acquired loans are recorded at fair value with no carryover of the allowance for loan losses. At acquisition, loans are also reviewed to determine if the loan has evidence of deterioration in credit quality and to review if it is probable, at acquisition, that all contractually required payments will not be collected. Such loans are deemed to be purchased credit impaired ("PCI") loans. Under the accounting model for PCI loans, the excess of cash flows expected to be collected over the carrying amount of the loans, referred to as the "accretable yield", is accreted into interest income over the life of the loans using the effective yield method. Accordingly, PCI loans are not subject to classification as nonaccrual in the same manner as originated loans. Rather, acquired loans are generally considered to be accruing loans because their interest income relates to the accretable yield recognized and not to contractual interest payments at the loan level. The difference between contractually required principal and interest payments and the cash flows expected to be collected, referred to as the "nonaccretable difference", includes estimates of both the impact of prepayments and future credit losses expected to be incurred over the life of the loans.

The estimate of cash flows expected to be collected is regularly re-assessed subsequent to acquisition. These re-assessments involve updates, as necessary, of the key assumptions and estimates used in the initial estimate of fair value. Generally speaking, expected cash flows are affected by:

• Changes in the expected principal and interest payments over the estimated life - Changes in expected cash flows may be driven by the credit outlook and actions taken with borrowers. Changes in expected future cash flows resulting from loan modifications are included in the assessment of expected cash flows.

• Change in prepayment assumptions - Prepayments affect the estimated life of the loans, which may change the amount of interest income expected to be collected.

• Change in interest rate indices for variable rate loans - Expected future cash flows are based, as applicable, on the variable rates in effect at the time of the assessment of expected cash flows.

A decrease in expected cash flows in subsequent periods may indicate that the loan is impaired which would likely require the recognition of a charge-off against the allowance for loan losses or an establishment of a specific reserve. An increase in expected cash flows in subsequent periods serves, first, to reduce any previously established specific reserve by the increase in the present value of cash flows expected to be collected. Any increase above the previously established specific reserve results in a recalculation of the amount of accretable yield for the loan. The adjustment of accretable yield due to an increase in expected cash flows is accounted for as a change in estimate. The additional cash flows expected to be collected are reclassified from the nonaccretable difference to the accretable yield, and the amount of periodic accretion is adjusted accordingly over the remaining life of the loans.

A PCI loan may be resolved either through receipt of payment (in full or in part) from the borrower, the sale of the loan to a third party, or foreclosure of the collateral. In the event of a sale of the loan, a gain or loss on sale would be recognized and reported within noninterest income based on the difference between the sales proceeds and the carrying amount of the loan. For PCI loans accounted for on an individual loan basis and resolved directly with the borrower, any amount received from resolution in excess of the carrying amount of the loan is recognized and reported within interest income.

A refinancing or modification of a PCI loan accounted for individually is assessed to determine whether the modification represents a TDR. If the loan is considered to be a TDR, it will be included in the total impaired loans reported by the Company. The loan will continue to recognize interest income based upon the excess of cash flows expected to be collected over the carrying amount of the loan.

Allowance for Loan Losses

The allowance for loan losses is established based upon the level of estimated probable losses in the current loan portfolio. Loan losses are charged against the allowance when management believes the collectability of a loan balance is doubtful. Subsequent recoveries, if any, are credited to the allowance.

The allowance for loan losses is allocated to loan types using both a formula-based approach applied to groups of loans and an analysis of certain individual loans for impairment. The formula-based approach emphasizes loss factors derived from actual historical portfolio loss rates, which are combined with an assessment of certain qualitative factors to determine the allowance amounts allocated to the various loan categories. Allowance amounts are determined based on an estimate of the historical average annual percentage rate of loan loss for each loan category, an estimate of the incurred loss emergence and confirmation period for each loan category, and certain qualitative risk factors considered in the computation of the allowance for loan losses.

The qualitative risk factors impacting the inherent risk of loss within the portfolio include the following:

• National and local economic and business conditions

• Level and trend of delinquencies

• Level and trend of charge-offs and recoveries

• Trends in volume and terms of loans

• Risk selection, lending policy and underwriting standards

• Experience and depth of management

• Banking industry conditions and other external factors

• Concentration risk

The formula-based approach evaluates groups of loans with common characteristics, which consist of similar loan types with similar terms and conditions, to determine the appropriate allocation within each portfolio section. This approach incorporates qualitative adjustments based upon management’s assessment of various market and portfolio specific risk factors into its formula-based estimate. Due to the imprecise nature of the loan loss estimation process and ever changing conditions, the qualitative risk attributes may not adequately capture amounts of incurred loss in the formula-based loan loss components used to determine the Bank’s analysis of the appropriateness of the allowance for loan losses.

The Bank evaluates certain loans within the commercial and industrial, commercial real estate, commercial construction and small business portfolios individually for specific impairment. A loan is considered impaired when, based on current information and events, it is probable that the Bank will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, contractual interest rates and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Loans are selected for evaluation based upon a change in internal risk rating, occurrence of delinquency, loan classification, troubled debt restructuring or nonaccrual status. A specific allowance amount is allocated to an individual loan when such loan has been deemed impaired and when the amount of the probable loss is able to be estimated. Estimates of loss may be determined by the present value of anticipated future cash flows, the loan’s observable fair market value, or the fair value of the collateral, if the loan is collateral dependent. However, for collateral dependent loans, the amount of the recorded investment in a loan that exceeds the fair value of the collateral less costs to sell is charged-off against the allowance for loan losses in lieu of an allocation of a specific allowance amount when such an amount has been identified definitively as uncollectible.

Large groups of small-balance homogeneous loans such as the residential real estate, residential construction, home equity and other consumer portfolios are collectively evaluated for impairment. As such, the Bank does not typically identify individual loans within these groupings as impaired loans for impairment evaluation and disclosure. However, the Bank evaluates all TDRs for impairment on an individual loan basis regardless of loan type.

In the ordinary course of business, the Bank enters into commitments to extend credit, commercial letters of credit, and standby letters of credit. Such financial instruments are recorded in the financial statements when they become payable. The credit risk associated with these commitments is evaluated in a manner similar to the allowance for loan losses. The reserve for unfunded lending commitments is included in other liabilities in the balance sheet. At December 31, 2016 and 2015, the reserve for unfunded loan commitments was $954,000 and $1.4 million, respectively.

Transfers and Servicing of Financial Assets

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

Loans held for sale are generally sold with servicing rights released, however if rights are retained, servicing assets are recognized as separate assets. Servicing rights are originally recorded at fair value within other assets, but subsequently are amortized in proportion to and over the period of estimated net servicing income, and are assessed for impairment at each reporting date. Fair value is based on market prices for comparable mortgage servicing contracts, when available, or alternatively, is based on a valuation model that calculates the present value of estimated future net servicing income. The valuation model incorporates assumptions that market participants would use in estimating future net servicing income, such as the cost to service, the discount rate, the custodial earnings rate, an inflation rate, ancillary income, prepayment speeds, default rates and losses. Impairment is determined by stratifying the rights based on predominant characteristics, such as interest rate, loan type and investor type. Impairment is recognized through a valuation allowance, to the extent that fair value is less than the capitalized amount. If the Company later determines that all or a portion of the impairment no longer exists, a reduction of the allowance may be recorded as an increase to income.

Servicing fee income is recorded for fees earned for servicing loans for investors. The fees are based on a contractual percentage of the outstanding principal or a fixed amount per loan, and are recorded as income when earned. The amortization of mortgage servicing rights is recorded as a reduction of loan servicing fee income.

Federal Home Loan Bank Stock

The Company, as a member of the Federal Home Loan Bank (“FHLB”) of Boston, is required to maintain an investment in capital stock of the FHLB. Based on redemption provisions, the stock has no quoted market value and is carried at cost. The Company continually reviews its investment to determine if OTTI exists. The Company reviews recent public filings, rating agency analysis and other factors, when making its determination.

Bank Premises and Equipment

Land is carried at cost. Bank premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line convention method over the estimated useful lives of the assets. Leasehold improvements are amortized over the shorter of the lease terms or the estimated useful lives of the improvements. Expected terms include lease option periods to the extent that the exercise of such options is reasonably assured, not to exceed fifteen years.

Goodwill and Other Intangible Assets

Goodwill represents the excess of the purchase price over the net fair value of acquired businesses and is not amortized. Goodwill is evaluated for impairment at least annually, or more often if warranted, using a combined qualitative and quantitative impairment approach. The initial qualitative approach assesses whether the existence of events or circumstances led to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events and circumstances, the Company determines it is more likely than not that the fair value is less than carrying value, the two step quantitative impairment test is performed. Step one of the quantitative impairment test compares book value to the fair value of the reporting unit. If step one is failed, a detailed step two analysis is performed, which involves measuring the excess of the fair value of the reporting unit, as determined in step one, over the aggregate fair value of the individual assets, liabilities, and identifiable intangibles as if the reporting unit was being acquired in a business combination.

Other intangible assets subject to amortization consist of core deposit intangibles, noncompete agreements, customer lists and market-based favorable or unfavorable lease positions at time of acquisition, and are amortized over the estimated lives of the intangibles using a method that approximates the amount of economic benefits that are realized by the Company. Other intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. The range of useful lives is as follows:

Core deposit intangibles	10 years
Noncompete agreements	1-3 years
Customer lists	10 years
Leases	7.5-29 years

The determination of which intangible assets have finite lives is subjective, as is the determination of the amortization period for such intangible assets.

Impairment of Long-Lived Assets Other Than Goodwill

The Company reviews long-lived assets, including premises and equipment, for impairment whenever events or changes in business circumstances indicate that the remaining useful life may warrant revision or that the carrying amount of the long-lived asset may not be fully recoverable. The Company performs undiscounted cash flow analysis to determine if impairment exists. If impairment is determined to exist, any related impairment loss is calculated based on fair value. Impairment losses on assets to be disposed of, if any, are based on the estimated proceeds to be received, less costs of disposal.

Cash Surrender Value of Life Insurance Policies

Increases in the cash surrender value (“CSV”) of life insurance policies, as well as benefits received net of any CSV, are recorded in other noninterest income, and are not subject to income taxes. The CSV of the policies is recorded as an asset of the Bank, with liabilities recognized for any split dollar arrangements associated with the policies. The Company reviews the financial strength of the insurance carriers prior to the purchase of life insurance policies and no less than annually thereafter. Regulatory requirements limit the total amount of CSV to be held with any individual carrier to 15% of Tier 1 capital (as defined for regulatory purposes) and the total CSV of all life insurance policies is limited to 25% of Tier 1 capital.

Other Real Estate Owned and Other Foreclosed Assets

Real estate properties and other assets, which have served as collateral to secure loans, are held for sale and are initially recorded at fair value less estimated costs to sell at the date control is established, resulting in a new cost basis. The amount by which the recorded investment in the loan exceeds the fair value (net of estimated costs to sell) of the foreclosed asset is charged to the allowance for loan losses. Subsequent declines in the fair value of the foreclosed asset below the new cost basis are recorded through the use of a valuation allowance. Subsequent increases in the fair value are recorded as reductions in the valuation allowance, but not below zero. Upon a sale of a foreclosed asset, any excess of the carrying value over the sale proceeds is recognized as a loss on sale. Any excess of sale proceeds over the carrying value of the foreclosed asset is first applied as a recovery to the valuation allowance, if any, with the remainder being recognized as a gain on sale. Operating expenses and changes in the valuation allowance relating to foreclosed assets are included in other noninterest expense.

Customer Repurchase Agreements

In a security repurchase agreement transaction, the Company will generally sell a security, agreeing to repurchase either the same or substantially identical security on a specified later date, at a greater price than the original sales price. The difference between the sale price and purchase price is the cost of the proceeds, which is recorded as interest expense. The securities underlying the agreements are delivered to counterparties as security for the repurchase obligations. Since the securities are treated as collateral and the agreement does not qualify for a full transfer of effective control, the transactions do not meet the criteria to be classified as a sale, and are therefore considered a secured borrowing transaction for accounting purposes.

Derivatives

Derivative instruments are carried at fair value in the Company’s financial statements. The accounting for changes in the fair value of a derivative instrument is determined by whether it has been designated and qualifies as part of a hedging relationship, and further, by the type of hedging relationship. At the inception of a hedge, the Company documents certain items, including but not limited to the following: the relationship between hedging instruments and hedged items, the Company's risk management objectives, hedging strategies, and the evaluation of hedge transaction effectiveness. Documentation includes linking all derivatives designated as fair value or cash flow hedges to specific assets and liabilities on the balance sheet or to specific forecasted transactions.

For those derivative instruments that are designated and qualify for special hedge accounting, the Company designates the hedging instrument, based upon the exposure being hedged, as either a fair value hedge or a cash flow hedge. For derivative instruments that are designated and qualify as a cash flow hedge (i.e., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income, net of related tax, and reclassified into earnings in the same period or periods during which the hedged transactions affect earnings. The remaining gain or loss on the derivative instrument in excess of the cumulative change in the present value of future cash flows of the hedged item (i.e., the ineffective portion), if any, is recognized in current earnings during the period. For derivative instruments designated and qualifying as a fair value hedge (i.e., hedging the exposure to changes in the fair value of an asset or liability or an identified portion thereof that is attributable to the hedged risk), the gain or loss on the derivative instrument, as well as the offsetting gain or loss on the hedged item attributable to the hedged risk, are recognized in current earnings during the period of the change in fair values. Hedge accounting is discontinued prospectively when (1) a derivative is no longer highly effective in offsetting changes in the fair value or cash flow of a hedged item, (2) a derivative expires or is settled, (3) it is no longer likely that a forecasted transaction associated with the hedge will occur, or (4) it is determined that designation of a derivative as a hedge is no longer appropriate.

To the extent the Company enters into new or re-designates existing hedging relationships, it is the Company's policy to include the Overnight Index Swap Rate in the spectrum of available benchmark interest rates for hedge accounting.

For derivative instruments not designated as hedging instruments, such as loan level derivatives, foreign exchange contracts and mortgage derivatives, changes in fair value are recognized in other noninterest income during the period of change.

Retirement Plans

The Company has various retirement plans in place for current and former employees, including postretirement benefit plans, supplemental executive retirement plans, frozen multiemployer pension plans, deferred compensation plans as well as other benefits.

The postretirement benefit plans and the supplemental executive retirement plans are unfunded and therefore have no plan assets. The actuarial cost method used to compute the benefit liabilities and related expense is the projected unit credit method. The projected benefit obligation is principally determined based on the present value of the projected benefit distributions at an assumed discount rate. The discount rate which is utilized is based on the investment yield of high quality corporate bonds available in the market place with maturities approximately equal to projected cash flows of future benefit payments as of the measurement date. Periodic benefit expense (or income) includes service costs and interest costs based on the assumed discount rate, amortization of prior service costs due to plan amendments and amortization of actuarial gains and losses. The amortization of actuarial gains and losses is determined using the 10% corridor minimum amortization approach and is taken over the average remaining future working lifetime of the plan participants. The underfunded status of the plans is recorded as a liability on the balance sheet.

The multiemployer pension plans' assets are determined based on fair value, generally representing observable market prices. The actuarial cost method used to compute the pension liabilities and related expense is the unit credit method. The pension expense is equal to the plan contribution requirement of the Company for the plan year.

The Director Deferred Compensation and 401(k) Restoration plans allow directors and employees to invest their funds within a rabbi trust, including both Company stock and other investment alternatives offered by the plan. The plans do not permit diversification and therefore elections made to defer into Company stock result in both the investment and obligation recognized within Stockholders' Equity. Investments not in Company stock are included in Securities-Trading, with the correlating obligation classified as a liability.

The Company has obligations with various individuals related to certain post retirement benefits. The obligations are based on the individual's service through retirement, with the associated cost recognized over the requisite service period. The accrual methodology results in an accrued amount at the full eligibility date equal to the then present value of all of the future benefits expected to be paid.

Stock-Based Compensation

The Company recognizes stock-based compensation based on the grant-date fair value of the award adjusted for forfeitures. For restricted stock awards and units, the Company recognizes compensation expense ratably over the vesting period for the fair value of the award, measured at the grant date. For stock option awards, the Company values awards granted using the Black-Scholes option-pricing model. The Company recognizes compensation expense for these awards on a straight-line basis over the requisite service period for the entire award (straight-line attribution method), ensuring that the amount of compensation cost recognized at any date at least equals the portion of the grant-date fair value of the award that is vested at that time.

Income Taxes

Deferred income tax assets and liabilities are determined using the asset and liability (or balance sheet) method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. If current available information raises doubt as to the realization of the deferred tax assets, a valuation allowance is established. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in enacted tax rates is recognized in income in the period that includes the enactment date. Income taxes are allocated to each entity in the consolidated group based on its share of taxable income. Management exercises significant judgment in evaluating the amount and timing of recognition of the resulting tax liabilities and assets, including projections of future taxable income. Additionally, a liability for unrecognized tax benefits is recorded for uncertain tax positions taken by the Company on its tax returns for which there is less than a 50% likelihood of being recognized upon a tax examination.

Tax credits generated from the New Markets Tax Credit program are reflected in earnings when realized for federal income tax purposes.

Low Income Housing Tax Credits

The Company accounts for its investments in qualified affordable housing projects using the proportional amortization method. Under the proportional amortization method the Company amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received, and recognizes the net investment benefit as a component of income tax expense (benefit).

Assets Under Administration

Assets held in a fiduciary or agency capacity for customers are not included in the accompanying consolidated balance sheet, as such assets are not assets of the Company. Revenue from administrative and management activities associated with these assets is recorded on an accrual basis.

Extinguishment of Debt

Upon extinguishment of an outstanding debt, the Company records the difference between the exit price and the net carrying amount of the debt as a gain or loss on the extinguishment. The gain or loss is recorded as a component of other noninterest income or other noninterest expense, respectively.

Earnings Per Share

Basic earnings per share is calculated using the two-class method. The two-class method is an earnings allocation formula under which earnings per share is calculated from common stock and participating securities according to dividends declared and participation rights in undistributed earnings. Under this method, all earnings distributed and undistributed, are allocated to participating securities and common shares based on their respective rights to receive dividends. Unvested share-based payment awards that contain nonforfeitable rights to dividends are considered participating securities (i.e. unvested time-vested restricted stock), not subject to performance based measures. Basic earnings per share is calculated by dividing net income by the weighted average number of common shares outstanding (inclusive of participating securities). Diluted earnings per share have been calculated in a manner similar to that of basic earnings per share except that the weighted average number of common shares outstanding is increased to include the number of additional common shares that would have been outstanding if all potentially dilutive common shares (such as those resulting from the exercise of stock options or the attainment of performance measures) were issued during the period, computed using the treasury stock method.

Comprehensive Income

Comprehensive income consists of net income and other comprehensive income. Other comprehensive income includes unrealized gains and losses on securities available for sale, unrealized losses related to factors other than credit on debt securities, if applicable, unrealized gains and losses on cash flow hedges, deferred gains on hedge accounting transactions, and changes in the funded status of the Company’s postretirement and supplemental retirement plans.

Fair Value Measurements

In general, fair values of financial instruments are based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon developed models that primarily use, as inputs, observable market-based parameters. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. These adjustments may include amounts to reflect counterparty credit quality and the Company’s creditworthiness, among other things, as well as unobservable parameters.

Recent Accounting Standards    

Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Financial Account Standards Board Topic 805 "Business Combinations" Updated No. 2017-01. Update No. 2017-01 was issued in January of 2017 to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill and consolidation. The amendments in this update are effective for annual periods and interim periods within those annual periods beginning after December 15, 2017. Earlier adoption is permitted, including interim reporting periods within that reporting period. The adoption of this standard is not expected to have a material impact on the Company's consolidated financial position.

FASB ASC Topic 606 "Revenue from Contracts with Customers" Update No. 2014-09. Update No. 2014-09 was issued in May 2014 to address the previous revenue recognition requirements in GAAP that differ from those in International Financial Reporting Standards (IFRS).  Accordingly, the FASB and the International Accounting Standards Board (IASB) initiated a joint project to clarify the principles for recognizing revenue and to develop a common revenue standard for U.S. GAAP and IFRS. The largely converged revenue recognition standards will supersede virtually all revenue recognition guidance in GAAP and IFRS. The core principle of the guidance is that an entity should 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. Since the issuance of Update 2014-09, the FASB has finalized various amendments to the standard as summarized below:

FASB ASC Topic 606 "Revenue from Contracts with Customers" Update No. 2016-20

FASB ASC Topic 606 "Revenue from Contracts with Customers" Update No. 2016-12

FASB ASC Topic 606 "Revenue from Contracts with Customers" Update No. 2016-10

FASB ASC Topic 606 "Revenue from Contracts with Customers" Update No. 2016-08.

FASB ASC Topic 606 "Revenue from Contracts with Customers" Update No. 2015-14.

The amendments in Update 2016-20 make minor corrections or minor improvements to the codification that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities.

Through Updates 2016-12, 2016-10 and 2016-08, the FASB amended its new revenue guidance on licenses of intellectual property, identification of performance obligations, collectability, noncash consideration and the presentation of sales and other similar taxes. The FASB also clarified the definition of a completed contract at transition and added a practical expedient to ease transition for contracts that were modified prior to adoption. The FASB also amended the new revenue recognition guidance on determining whether an entity is a principal or an agent in an arrangement which affects whether revenue should be reported gross or net.

Following the issuance of Update 2015-14, Update 2014-09, as amended, is effective for the Company for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier adoption is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. A full or modified retrospective transition method is required. The Company's revenue is comprised of net interest income on financial assets and liabilities, which is explicitly excluded from the scope of the new guidance, and noninterest income. The Company plans to adopt the revenue recognition guidance in the first quarter of 2018 and is currently evaluating the potential impact on noninterest income on the Company's consolidated financial position, other presentation and disclosure issues. Additionally, the Company anticipates using the modified retrospective transition method upon adoption.

FASB ASC Topic 740 "Income Taxes" Update No. 2016-16. Update No. 2016-16 was issued in October 2016 and the amendments in this update require that entities recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The amendments is this update do not change GAAP for the pre-tax effects of an intra-entity asset transfer under Topic 810, Consolidation, or for an intra-entity transfer of inventory. The amendments in this update are effective for annual periods and interim periods within those annual periods beginning after December 31, 2017. Earlier adoption is permitted, including interim reporting periods within that reporting period. The adoption of this standard is not expected to have a material impact on the Company's consolidated financial position.

FASB ASC Topic 230 "Statement of Cash Flows" Update No. 2016-15. Update No. 2016-15 was issued in August 2016 to reduce diversity of practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments in this update provide guidance on the following eight specific cash flow issues; (1) debt prepayment or debt extinguishment costs, (2) settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing, (3) contingent consideration payments made after a business combination, (4) proceeds from the settlement of insurance claims, (5) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies, (6) distributions received from equity method investees, (7) beneficial interests in securitization transactions, and (8) separately identifiable cash flows and application of the predominance principle. The amendments in this topic will provide guidance for these eight issues, thereby reducing the current and potential future diversity in practice. The amendments in this update are effective for annual periods and interim periods within those annual periods beginning after December 31, 2017. Earlier adoption is permitted, including interim reporting periods within that reporting period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. The adoption of this standard is not expected to have a material impact on the Company's consolidated financial position.

FASB ASC Topic 326 "Financial Instruments - Credit Losses" Update No. 2016-13. Update No. 2016-13 was issued in June 2016 to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in this update replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendments affect entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off-balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The amendments in this update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with earlier adoption permitted as of fiscal years beginning after December 15, 2018, including interim periods with those fiscal years. The Company is currently assessing the impact of the adoption of this standard on the Company's consolidated financial position.

FASB ASC Topic 605 "Revenue Recognition" and Topic 815 "Derivatives and Hedging" Update No. 2016-11. Update No. 2016-11 was issued in May 2016 and is a rescission of SEC guidance because of ASU Updates 2014-09 and 2014-16 pursuant to staff announcements at the March 3, 2016 Emerging Issues Task Force meeting. The amendments in this update are effective upon adoption of Topic 606 "Revenue from Contracts with Customers." The Company is currently assessing the impact of the adoption of this standard on the Company's consolidated financial position.

FASB ASC Topic 718 "Compensation - Stock Compensation" Update No. 2016-09. Update No. 2016-09 was issued in March 2016 and affects all entities that issue share-based awards to their employees. This update was issued as part of the FASB’s simplification initiative. The areas for simplification in this update involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The amendments in this update are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company has adopted the standard effective January 1, 2017, which will require a cumulative effect adjustment to retained earnings, the impact of which did not have a material affect on the Company's consolidated financial position.    

FASB ASC Topic 323 "Investments -Equity Method and Joint Ventures" Update No. 2016-07. Update No. 2016-07 was issued in March 2016 and eliminates the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods that the investment had been held. The amendments require that the equity method investor add the cost of acquiring the additional interest in the investees to the current basis of the investor's previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. Therefore, upon qualifying for the equity method of accounting, no retroactive adjustment of the investment is required. The amendments in this update require that an entity that has an available-for-sale equity security that becomes qualified for the equity method of accounting recognize through earnings the unrealized holding gain or loss in accumulated other comprehensive income at the date the investment becomes qualified for use of the equity method. The amendments in this update are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The amendments should be applied prospectively upon their effective date to increases in the level of ownership interest or degree of influence that result in the adoption of the equity method. Early adoption is permitted. Upon adoption of this standard on January 1, 2017, there was no material impact on the Company's consolidated financial position.

FASB ASC Topic 815 "Derivative and Hedging - Contingent Put and Call Options in Debt Instruments" Update No. 2016-06. Update No. 2016-06 was issued in March 2016 to clarify the requirements for assessing whether contingent call (put) options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt hosts. An entity performing the assessment under the amendments in this update is required to assess the embedded call (put) options solely in accordance with the four-step decision sequence. For public entities, the amendments in this update are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. An entity has an option to apply the amendments in this update on either a prospective basis or a modified retrospective basis. Early adoption is permitted, including adoption in an interim period. Upon adoption of this standard on January 1, 2017, there was no material impact on the Company's consolidated financial position.

FASB ASC Topic 815 "Derivative and Hedging - Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships" Update No. 2016-05. Update No. 2016-05 was issued in March 2016 and applies to all reporting entities for which there is a change in the counterparty to a derivative instrument that has been designated as a hedging instrument under Topic 815. The amendments in this update clarify that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument under Topic 815 does not, in and of itself, require de-designation of that hedging relationship provided that all other hedge accounting criteria (including those in paragraphs 815-20-35-14 through 35-18) continue to be met. For public entities, the amendments in this update are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. An entity has an option to apply the amendments in this update on either a prospective basis or a modified retrospective basis. Early adoption is permitted, including adoption in an interim period. Upon adoption of this standard on January 1, 2017, there was no material impact on the Company's consolidated financial position.

FASB ASC Topic 842 "Leases" Update No. 2016-02. Update No. 2016-02 was issued in February 2016 and affects any entity that enters into a lease (as that term is defined in this update), with some specified scope exemptions. The core principle of this update is that a lessee should recognize in the statement of financial position a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. The recognition, measurement, and presentation of expenses and cash flows arising from a lease have not significantly changed from previous GAAP. In addition, the accounting applied by a lessor is largely unchanged from that applied under previous GAAP. For public companies, the amendments in this update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently assessing the impact of the adoption of this standard on the Company's consolidated financial position.    

FASB ASC Topic 825-10 "Financial Instruments - Overall Recognition and Measurement of Financial Assets and Financial Liabilities" Update No. 2016-01. Update No. 2016-01 was issued in January 2016 to amend the guidance in U.S. GAAP on the classification and measurement of financial instruments. Although the update retains many current requirements, it significantly revises an entity's accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. The update also amends certain disclosure requirements associated with the fair value of financial instruments and various other aspects of recognition, measurement, presentation and disclosure of financial instruments. For public entities, the amendments in this update are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted for only certain guidance. The Company is currently assessing the impact of the adoption of this standard on the Company's consolidated financial position.

FASB ASC Subtopic 835-30 "Interest - Imputation of Interest" Update No. 2015-03. Update No. 2015-03 was issued in April 2015 to simplify presentation of debt issuance costs. The amendments in this update require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuances costs are not affected by the amendments in this update. The amendments in this update were adopted by the Company effective January 1, 2016, with applicable prior period presentation updated for the reclassification of $501,000 and $568,000 of debt issuance costs from other assets to borrowings at December 31, 2016 and 2015, respectively. The adoption of this standard did not have a material impact on the Company's consolidated financial position.

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ACQUISITIONS

12 Months Ended

Dec. 31, 2016

Business Acquisition [Line Items]

ACQUISITIONS

ACQUISITIONS

New England Bancorp, Inc.

On November 10, 2016, the Company completed its acquisition of New England Bancorp, Inc. ("NEB"), the parent of Bank of Cape Cod. The transaction qualified as a tax-free reorganization for federal income tax purposes and NEB shareholders received, for each share of NEB common stock, the right to receive 0.25 shares of the Company's stock (valued at $15.14 per share, based upon the highest trading value of the Company's stock on November 10, 2016 of $60.55). The deal consideration was $41.7 million in the aggregate, inclusive of cash paid in lieu of fractional shares and resulted in an increase to the Company's outstanding shares of 672,665 shares.

The Company accounted for the NEB acquisition using the acquisition method pursuant to the Business Combinations Topic of the FASB ASC. Accordingly, the Company recorded merger and acquisition expenses of $5.0 million, during the year ended December 31, 2016, related to the NEB transaction. Additionally, the acquisition method requires the acquirer to recognize the assets acquired and the liabilities assumed at their fair values as of the acquisition date. The following table summarizes the estimated fair value of the assets acquired and liabilities assumed as of the date of the acquisition:

	Net Assets Acquired at Fair Value
	(Dollars in thousands)
Assets
Cash	$	9,679
Loans	225,731
Premises and equipment	201
Goodwill	20,443
Core deposit and other intangibles	670
Other assets	19,197
Total assets acquired	275,921
Liabilities
Deposits	175,686
Borrowings	51,150
Other liabilities	7,344
Total liabilities assumed	234,180
Purchase price	$	41,741

Fair value adjustments to assets acquired and liabilities assumed are generally amortized using either an effective yield or straight-line basis over periods consistent with the average life, useful life and/or contractual term of the related assets and liabilities.

Fair values of the major categories of assets acquired and liabilities assumed were determined as follows:

Cash and Cash Equivalents

The fair values of cash and cash equivalents approximate the respective carrying amounts because the instruments are payable on demand or have short-term maturities.

Loans

The loans acquired were recorded at fair value without a carryover of the allowance for loan losses. Fair value of the loans is determined using market participant assumptions in estimating the amount and timing of both principal and interest cash flows expected to be collected, as adjusted for an estimate of future credit losses and prepayments, and then applying a market-based discount rate to those cash flows. The overall discount on the loans acquired in this transaction was due to estimated credit risk, as well as considerations for liquidity and market interest rates. In addition, the acquired loans were reviewed to determine if the the loan had evidence of deterioration of credit quality at the purchase date and also reviewed to determine if it was probable that all contractually required payments will not be collected. Based on the review of the loan portfolio at the time of the acquisition it was deemed that there was no evidence to show that any of the acquired loans were purchased credit impaired.

Core Deposit Intangible

The fair value of the core deposit intangible is derived by comparing the interest rate and servicing costs that the financial institution pays on the core deposit liability versus the current market rate for alternative sources of financing, while factoring in estimates over the remaining life and attrition rate of the deposit accounts. The intangible asset represents the stable and relatively low cost source of funds that the deposits and accompanying relationships provide the Company, when compared to alternative funding sources.

Deposits

The fair value of acquired savings and transaction deposit accounts was assumed to approximate the carrying value as these accounts have no stated maturity and are payable on demand. The fair value of time deposits were determined based on the present value of the contractual cash flows over the remaining period to maturity using a market interest rate.

Borrowings

The fair values of Federal Home Loan Bank ("FHLB") advances were derived based upon the present value of the principal and interest payments using a current market discount rate. Subsequent to the acquisition, the Company paid off all acquired borrowings at their recognized fair value amounts, resulting in no gain or loss on extinguishment.

Selected Pro Forma Results

The following summarizes the unaudited pro forma results of operations as if the Company acquired NEB on January 1, 2016 (2015 amounts represent combined results for the Company and NEB). The selected pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of the financial results of the combined companies had the acquisition actually been completed at the beginning of the periods presented, nor does it indicate future results for any other interim or full-year period.

	Years Ended December 31
	2016		2015
	(Dollars in thousands)
Net interest income after provision for loan losses	$	228,927	$	221,252
Net income	$	80,411	$	65,623

Excluded from the pro forma results of operations for the year ended December 31, 2016 are merger-related costs of $6.3 million recognized by both the Company and NEB in the aggregate and the corresponding tax benefit. These costs were primarily made up of contract terminations arising due to the change in control, the acceleration of certain compensation and benefit costs, and other merger expenses.

Peoples Federal Bancshares, Inc.

On February 20, 2015, the Company completed its acquisition of Peoples Federal Bancshares, Inc. ("Peoples"), the parent of Peoples Federal Saving Bank. The transaction qualified as a tax-free reorganization for federal income tax purposes and Peoples shareholders received, for each share of Peoples common stock, the right to receive either $21.00 in cash per share or 0.5523 shares of the Company's stock (valued at $23.26 per share, based upon the highest trading value of the Company's stock on February 20, 2015 of $42.11). The total deal consideration was $141.8 million and was comprised of 40% cash and 60% stock consideration. The cash consideration was $55.4 million in the aggregate, inclusive of cash paid in lieu of fractional shares. The total stock consideration was $86.4 million and resulted in an increase to the Company's outstanding shares of 2,052,137 shares.

The Company accounted for the Peoples acquisition using the acquisition method pursuant to the Business Combinations Topic of the FASB ASC. Accordingly, the Company recorded merger and acquisition expenses of $10.5 million during the year ended December 31, 2015. Additionally, the acquisition method requires the acquirer to recognize the assets acquired and the liabilities assumed at their fair values as of the acquisition date. The following table summarizes the estimated fair value of the assets acquired and liabilities assumed as of the date of the Peoples acquisition:

	Net Assets Acquired at Fair Value
	(Dollars in thousands)
Assets
Cash	$	41,957
Investments	43,585
Loans	463,927
Premises and equipment	9,346
Goodwill	30,662
Core deposit and other intangibles	3,936
Other assets	46,920
Total assets acquired	640,333
Liabilities
Deposits	432,250
Borrowings	51,209
Other liabilities	15,054
Total liabilities assumed	498,513
Purchase price	$	141,820

Fair value adjustments to assets acquired and liabilities assumed are generally amortized using either an effective yield or straight-line basis over periods consistent with the average life, useful life and/or contractual term of the related assets and liabilities.

Fair values of the major categories of assets acquired and liabilities assumed were determined as follows:

Cash and Cash Equivalents

The fair values of cash and cash equivalents approximate the respective carrying amounts because the instruments are payable on demand or have short-term maturities.

Investments

The fair values of securities were based on quoted market prices for identical securities received from an independent, nationally-recognized, third-party pricing service. Prices provided by the independent pricing service were based on recent trading activity and other observable information including, but not limited to, market interest rate curves, referenced credit spreads and estimated prepayment rates where applicable.

Loans

The loans acquired were recorded at fair value without a carryover of the allowance for loan losses. Fair value of the loans is determined using market participant assumptions in estimating the amount and timing of both principal and interest cash flows expected to be collected, as adjusted for an estimate of future credit losses and prepayments, and then applying a market-based discount rate to those cash flows. The overall discount on the loans acquired in this transaction was due to estimated credit loss, as well as considerations for liquidity and market interest rates.

A portion of the loans acquired showed evidence of deterioration of credit quality at the purchase date and it was deemed unlikely that the Company would be able to collect all contractually required payments. As such, these loans were deemed to be purchased credit impaired ("PCI") and the carrying value and prospective income recognition are predicated upon future cash flows expected to be collected. The following is a summary of these PCI loans associated with the acquisition as of the date acquired:

	As of February 20, 2015
	(Dollars in thousands)
Contractually required principal and interest at acquisition	$	4,358
Contractual cash flows not expected to be collected	(1,596		)
Expected cash flows at acquisition	2,762
Interest component of expected cash flows	(319		)
Basis in PCI loans at acquisition - estimated fair value	$	2,443

Premises and Equipment

The fair value of the premises, including land, buildings and improvements, was determined based upon appraisals by licensed real estate appraisers or pending agreed upon sale prices. The appraisals were based upon the best and highest use of the property with final values determined based upon an analysis of the cost, sales comparison and income capitalization approaches for each property appraised.

Core Deposit Intangible

The fair value of the core deposit intangible is derived by comparing the interest rate and servicing costs that the financial institution pays on the core deposit liability versus the current market rate for alternative sources of financing, while factoring in estimates over the remaining life and attrition rate of the deposit accounts. The intangible asset represents the stable and relatively low cost source of funds that the deposits and accompanying relationships provide the Company, when compared to alternative funding sources.

Deposits

The fair value of acquired savings and transaction deposit accounts was assumed to approximate the carrying value as these accounts have no stated maturity and are payable on demand. The fair value of time deposits were determined based on the present value of the contractual cash flows over the remaining period to maturity using a market interest rate.

Borrowings

The fair values of FHLB advances were derived based upon the present value of the principal and interest payments using a current market discount rate.

Selected Pro Forma Results

The following summarizes the unaudited pro forma results of operations as if the Company acquired Peoples on January 1, 2015 (2014 amounts represent combined results for the Company and Peoples). The selected pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of the financial results of the combined companies had the acquisition actually been completed at the beginning of the periods presented, nor does it indicate future results for any other interim or full-year period.

	Years Ended December 31
	2015		2014
	(Dollars in thousands)
Net interest income after provision for loan losses	$	216,086	$	203,296
Net income	$	69,816	$	60,896

Excluded from the pro forma results of operations for the year ended December 31, 2015 are merger-related costs of $16.7 million, pre-tax, recognized by both the Company and Peoples in the aggregate. These costs were primarily made up of contract terminations arising due to the change in control, the acceleration of certain compensation and benefit costs, and other merger expenses.

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SECURITIES

12 Months Ended

Dec. 31, 2016

Investments, Debt and Equity Securities [Abstract]

SECURITIES

Trading Securities

As of December 31, 2016 and December 31, 2015 the Company had trading securities of $804,000 and $356,000, respectively. These securities are held in a rabbi trust and will be used for future payments associated with the Company's non-qualified 401(k) Restoration Plan and non-qualified deferred compensation plan.

Available for Sale and Held to Maturity Securities

The following table presents a summary of the amortized cost, gross unrealized holding gains and losses and fair value of securities available for sale and securities held to maturity for the periods indicated:

	December 31, 2016									December 31, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(Dollars in thousands)
Available for sale securities
U.S. government agency securities	$	24,006	$	238	$	—		$	24,244	$	29,958	$	261	$	(4	)	$	30,215
Agency mortgage-backed securities	173,268		2,852		(736		)	175,384		207,693		4,227		(983		)	210,937
Agency collateralized mortgage obligations	101,094		106		(1,332		)	99,868		64,157		179		(752		)	63,584
State, county, and municipal securities	3,743		50		—			3,793		4,543		116		—			4,659
Single issuer trust preferred securities issued by banks	2,311		3		(3		)	2,311		2,865		8		(81		)	2,792
Pooled trust preferred securities issued by banks and insurers	2,200		—		(616		)	1,584		2,217		—		(645		)	1,572
Small business administration pooled securities	37,561		—		(372		)	37,189		40,472		87		(110		)	40,449
Equity securities	19,183		641		(553		)	19,271		13,235		374		(568		)	13,041
Total available for sale securities	363,366		3,890		(3,612		)	363,644		365,140		5,252		(3,143		)	367,249
Held to maturity securities
U.S. treasury securities	1,007		47		—			1,054		1,009		55		—			1,064
Agency mortgage-backed securities	156,088		2,274		(858		)	157,504		167,134		3,460		(219		)	170,375
Agency collateralized mortgage obligations	297,445		1,002		(3,797		)	294,650		267,348		1,195		(3,652		)	264,891
State, county, and municipal securities	—		—		—			—		225		2		—			227
Single issuer trust preferred securities issued by banks	1,500		44		—			1,544		1,500		22		—			1,522
Small business administration pooled securities	31,036		189		(327		)	30,898		35,291		437		(64		)	35,664
Corporate debt securities	—		—		—			—		5,000		6		—			5,006
Total held to maturity securities	487,076		3,556		(4,982		)	485,650		477,507		5,177		(3,935		)	478,749
Total	$	850,442	$	7,446	$	(8,594	)	$	849,294	$	842,647	$	10,429	$	(7,078	)	$	845,998

When securities are sold, the adjusted cost of the specific security sold is used to compute the gain or loss on the sale.

The actual maturities of certain securities may differ from the contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. A schedule of the contractual maturities of securities available for sale and securities held to maturity as of December 31, 2016 is presented below:

	Available for Sale				Held to Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(Dollars in thousands)
Due in one year or less	$	999	$	1,001	$	1	$	1
Due after one year to five years	29,144		29,419		16,007		16,228
Due after five to ten years	97,144		97,421		22,664		23,309
Due after ten years	216,896		216,532		448,404		446,112
Total debt securities	344,183		344,373		487,076		485,650
Equity securities	19,183		19,271		—		—
Total	$	363,366	$	363,644	$	487,076	$	485,650

Inclusive in the table above is $10.9 million of callable securities at December 31, 2016.

The carrying value of securities pledged to secure public funds, trust deposits, repurchase agreements and for other purposes, as required or permitted by law, was $482.1 million and $444.8 million at December 31, 2016 and 2015, respectively.

At December 31, 2016 and 2015, the Company had no investments in obligations of individual states, counties, or municipalities, which exceeded 10% of stockholders’ equity.

Other-Than-Temporary Impairment

The Company continually reviews investment securities for the existence of OTTI, taking into consideration current market conditions, the extent and nature of changes in fair value, issuer rating changes and trends, the credit worthiness of the obligor of the security, volatility of earnings, current analysts’ evaluations, the Company’s intent to sell the security, or whether it is more likely than not that the Company will be required to sell the debt security before its anticipated recovery, as well as other qualitative factors. The term “other-than-temporary” is not intended to indicate that the decline is permanent, but indicates that the prospects for a near-term recovery of value is not necessarily favorable, or that there is a lack of evidence to support a realizable value equal to or greater than the carrying value of the investment.

The following tables show the gross unrealized losses and fair value of the Company’s investments in an unrealized loss position, which the Company has not deemed to be OTTI, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:

		December 31, 2016
		Less than 12 months					12 months or longer					Total
Description of securities	# of holdings	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
		(Dollars in thousands)
Agency mortgage-backed securities	57	$	137,949	$	(1,594	)	$	—	$	—		$	137,949	$	(1,594	)
Agency collateralized mortgage obligations	32	243,051		(3,140		)	47,403		(1,989		)	290,454		(5,129		)
Single issuer trust preferred securities issued by banks and insurers	1	—		—			1,036		(3		)	1,036		(3		)
Pooled trust preferred securities issued by banks and insurers	1	—		—			1,583		(616		)	1,583		(616		)
Small business administration pooled securities	5	59,846		(699		)	—		—			59,846		(699		)
Equity securities	25	3,625		(77		)	6,334		(476		)	9,959		(553		)
Total temporarily impaired securities	121	$	444,471	$	(5,510	)	$	56,356	$	(3,084	)	$	500,827	$	(8,594	)
		December 31, 2015
		Less than 12 months					12 months or longer					Total
Description of securities	# of holdings	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
		(Dollars in thousands)
U.S.government agency securities	3	$	1,990	$	(4	)	$	—	$	—		$	1,990	$	(4	)
Agency mortgage-backed securities	57	112,648		(1,062		)	4,297		(140		)	116,945		(1,202		)
Agency collateralized mortgage obligations	23	147,707		(1,420		)	80,927		(2,984		)	228,634		(4,404		)
Single issuer trust preferred securities issued by banks and insurers	2	1,018		(33		)	1,018		(48		)	2,036		(81		)
Pooled trust preferred securities issued by banks and insurers	1	—		—			1,572		(645		)	1,572		(645		)
Small business administration pooled securities	3	37,986		(174		)	—		—			37,986		(174		)
Equity securities	34	3,481		(189		)	4,971		(379		)	8,452		(568		)
Total temporarily impaired securities	123	$	304,830	$	(2,882	)	$	92,785	$	(4,196	)	$	397,615	$	(7,078	)

The Company does not intend to sell these investments and has determined based upon available evidence that it is more likely than not that the Company will not be required to sell the security before the recovery of its amortized cost basis. As a result, the Company does not consider these unrealized losses to be OTTI. The Company made this determination by reviewing various qualitative and quantitative factors regarding each investment category, such as current market conditions, extent and nature of changes in fair value, issuer rating changes and trends, volatility of earnings, and current analysts’ evaluations.

As a result of the Company’s review of these qualitative and quantitative factors, the causes of the impairments listed in the table above by category are as follows at December 31, 2016:

• Agency Mortgage-Backed Securities, Agency Collateralized Mortgage Obligations and Small Business Administration Pooled Securities: These portfolios have contractual terms that generally do not permit the issuer to settle the securities at a price less than the current par value of the investment. The decline in market value of these securities is attributable to changes in interest rates and not credit quality. Additionally, these securities are implicitly guaranteed by the U.S. Government or one of its agencies.

• Single Issuer Trust Preferred Securities: This portfolio consists of one security, which is investment grade. The unrealized loss on this security is attributable to the illiquid nature of the trust preferred market in the current economic environment. Management evaluates various financial metrics for the issuers, including regulatory capital ratios of the issuers.

• Pooled Trust Preferred Securities: This portfolio consists of one below investment grade security which is performing. The unrealized loss on this security is attributable to the illiquid nature of the trust preferred market and the significant risk premiums required in the current economic environment. Management evaluates collateral credit and instrument structure, including current and expected deferral and default rates and timing. In addition, discount rates are determined by evaluating comparable spreads observed currently in the market for similar instruments.

• Equity Securities: This portfolio consists of mutual funds and other equity investments. During some periods, the mutual funds in the Company’s investment portfolio may have unrealized losses resulting from market fluctuations as well as the risk premium associated with that particular asset class. For example, emerging market equities tend to trade at a higher risk premium than U.S. government bonds and thus, will fluctuate to a greater degree on both the upside and the downside. In the context of a well-diversified portfolio, however, the correlation amongst the various asset classes represented by the funds serves to minimize downside risk. The Company evaluates each mutual fund in the portfolio regularly and measures performance on both an absolute and relative basis. A reasonable recovery period for positions with an unrealized loss is based on management’s assessment of general economic data, trends within a particular asset class, valuations, earnings forecasts and bond durations. The Company does not intend to sell these equity securities and has determined based on available evidence that it will not be required to sell the equity securities prior to the recovery of fair value.

The following table shows the total OTTI that the Company recorded for the periods indicated:

	Years Ended December 31
	2016		2015		2014
	(Dollars in thousands)
Gross change in OTTI recorded on certain investments	$	—	$	—	$	2,098
Portion of OTTI recognized in OCI	—		—		(2,098		)
Total credit related OTTI recognized in earnings	$	—	$	—	$	—

The following table shows the cumulative credit related component of OTTI for the periods indicated:

	Years Ended December 31
	2016		2015			2014
	(Dollars in thousands)
Balance at beginning of period	$	—	$	(9,997	)	$	(9,997	)
Add
Incurred on securities not previously impaired	—		—			—
Incurred on securities previously impaired	—		—			—
Less
Securities sold during the period	—		9,997			—
Reclassification due to changes in Company’s intent	—		—			—
Increases in cash flow expected to be collected	—		—			—
Balance at end of period	$	—	$	—		$	(9,997	)

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LOANS, ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY

12 Months Ended

Dec. 31, 2016

Loans, Allowance for Loan Losses and Credit Quality [Abstract]

LOANS, ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY

LOANS, ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY

Allowance for Loan Losses

The following table summarizes changes in the allowance for loan losses by loan category and bifurcates the amount of allowance allocated to each loan category based on collective impairment analysis and loans evaluated individually for impairment:

	December 31, 2016
	Commercial and Industrial			Commercial Real Estate			Commercial Construction			Small Business			Residential Real Estate			Home Equity			Other Consumer			Total
	(Dollars in thousands)
Allowance for loan losses
Beginning balance	$	13,802		$	27,327		$	5,366		$	1,264		$	2,590		$	4,889		$	587		$	55,825
Charge-offs	(593		)	(414		)	—			(228		)	(28		)	(602		)	(1,607		)	(3,472		)
Recoveries	859			564			—			195			299			141			1,080			3,138
Provision (benefit)	2,853			2,892			(844		)	271			(240		)	810			333			6,075
Ending balance	$	16,921		$	30,369		$	4,522		$	1,502		$	2,621		$	5,238		$	393		$	61,566
Ending balance: collectively evaluated for impairment	$	13,260		$	30,173		$	4,522		$	1,494		$	1,535		$	4,996		$	372		$	56,352
Ending balance: individually evaluated for impairment	$	3,661		$	196		$	—		$	8		$	1,086		$	242		$	21		$	5,214
Financing receivables ending balance:
Collectively evaluated for impairment	$	862,875		$	2,983,642		$	320,391		$	121,855		$	622,392		$	982,095		$	10,666		$	5,903,916
Individually evaluated for impairment	39,178			16,813			—			871			14,175			5,863			397			77,297
Purchased credit impaired loans	—			10,343			—			—			7,859			189			1			18,392
Total loans by group	$	902,053		$	3,010,798		$	320,391		$	122,726		$	644,426		$	988,147		$	11,064		$	5,999,605		(1)
	December 31, 2015
	Commercial and Industrial			Commercial Real Estate			Commercial Construction			Small Business			Residential Real Estate			Home Equity			Other Consumer			Total
	(Dollars in thousands)
Allowance for loan losses
Beginning balance	$	15,573		$	25,873		$	3,945		$	1,171		$	2,834		$	4,956		$	748		$	55,100
Charge-offs	(2,010		)	(330		)	—			(267		)	(285		)	(710		)	(1,316		)	(4,918		)
Recoveries	1,593			1,073			—			264			133			356			724			4,143
Provision (benefit)	$	(1,354	)	$	711		$	1,421		$	96		$	(92	)	$	287		$	431		$	1,500
Ending balance	$	13,802		$	27,327		$	5,366		$	1,264		$	2,590		$	4,889		$	587		$	55,825
Ending balance: collectively evaluated for impairment	$	13,619		$	27,123		$	5,366		$	1,260		$	1,312		$	4,651		$	564		$	53,895
Ending balance: individually evaluated for impairment	$	183		$	204		$	—		$	4		$	1,278		$	238		$	23		$	1,930
Financing receivables ending balance:
Collectively evaluated for impairment	$	838,129		$	2,619,294		$	373,064		$	95,225		$	614,014		$	921,563		$	14,427		$	5,475,716
Individually evaluated for impairment	5,147			22,986			304			1,021			15,405			5,989			558			51,410
Purchased credit impaired loans	—			11,154			—			—			9,187			251			3			20,595
Total loans by group	$	843,276		$	2,653,434		$	373,368		$	96,246		$	638,606		$	927,803		$	14,988		$	5,547,721		(1)

	December 31, 2014
	Commercial and Industrial			Commercial Real Estate			Commercial Construction		Small Business			Residential Real Estate			Home Equity			Other Consumer			Total
	(Dollars in thousands)
Allowance for loan losses
Beginning balance	$	15,622		$	24,541		$	3,371	$	1,215		$	2,760		$	5,036		$	694		$	53,239
Charge-offs	(2,097		)	(5,454		)	—		(605		)	(826		)	(750		)	(1,215		)	(10,947		)
Recoveries	462			404			—		275			424			249			591			2,405
Provision	1,586			6,382			574		286			476			421			678			10,403
Ending balance	$	15,573		$	25,873		$	3,945	$	1,171		$	2,834		$	4,956		$	748		$	55,100
Ending balance: individually evaluated for impairment	$	412		$	197		$	—	$	7		$	1,500		$	262		$	38		$	2,416
Ending balance: collectively evaluated for impairment	$	15,161		$	25,676		$	3,945	$	1,164		$	1,334		$	4,694		$	710		$	52,684
Financing receivables ending balance:
Collectively evaluated for impairment	$	856,185		$	2,304,099		$	265,501	$	84,159		$	505,799		$	858,305		$	16,335		$	4,890,383
Individually evaluated for impairment	4,654			30,729			311		1,088			15,055			5,330			868			58,035
Purchase credit impaired loans	—			12,495			182		—			9,405			228			5			22,315
Total loans by group	$	860,839		$	2,347,323		$	265,994	$	85,247		$	530,259		$	863,863		$	17,208		$	4,970,733		(1)

(1) The amount of net deferred costs on originated loans included in the ending balance was $5.1 million, $4.3 million, and $2.8 million at December 31, 2016, 2015, and 2014, respectively. Net unamortized discounts on acquired loans not deemed to be PCI included in the ending balance was $8.6 million, $6.6 million, and $1.9 million at December 31, 2016, 2015, and 2014, respectively.

For the purpose of estimating the allowance for loan losses, management segregates the loan portfolio into the portfolio segments detailed in the above tables.  Each of these loan categories possesses unique risk characteristics that are considered when determining the appropriate level of allowance for each segment.  Some of the risk characteristics unique to each loan category include:

Commercial Portfolio

• Commercial and Industrial: Loans in this category consist of revolving and term loan obligations extended to business and corporate enterprises for the purpose of financing working capital and/or capital investment.  Collateral generally consists of pledges of business assets including, but not limited to: accounts receivable, inventory, plant and equipment, or real estate, if applicable. Repayment sources consist of primarily, operating cash flow, and secondarily, liquidation of assets.

• Commercial Real Estate: Loans in this category consist of mortgage loans to finance investment in real property such as multi-family residential, commercial/retail, office, industrial, hotels, educational and healthcare facilities and other specific use properties.  Loans are typically written with amortizing payment structures.  Collateral values are determined based upon third party appraisals and evaluations.  Loan to value ratios at origination are governed by established policy and regulatory guidelines. Repayment sources consist of primarily, cash flow from operating leases and rents, and secondarily, liquidation of assets.

• Commercial Construction: Loans in this category consist of short-term construction loans, revolving and nonrevolving credit lines and construction/permanent loans to finance the acquisition, development and construction or rehabilitation of real property.  Project types include residential 1-4 family, condominium and multi-family homes, commercial/retail, office, industrial, hotels, educational and healthcare facilities and other specific use properties.  Loans may be written with nonamortizing or hybrid payment structures depending upon the type of project.  Collateral values are determined based upon third party appraisals and evaluations.  Loan to value ratios at origination are governed by established policy and regulatory guidelines.  Repayment sources vary depending upon the type of project and may consist of sale or lease of units, operating cash flows or liquidation of other assets.

• Small Business: Loans in this category consist of revolving, term loan and mortgage obligations extended to sole proprietors and small businesses for purposes of financing working capital and/or capital investment.  Collateral generally consists of pledges of business assets including, but not limited to, accounts receivable, inventory, plant and equipment, or real estate if applicable.  Repayment sources consist primarily of operating cash flows, and secondarily, liquidation of assets.

For the commercial portfolio it is the Company’s policy to obtain personal guarantees for payment from individuals holding material ownership interests of the borrowing entities.

Consumer Portfolio

• Residential Real Estate: Residential mortgage loans held in the Company’s portfolio are made to borrowers who demonstrate the ability to make scheduled payments with full consideration to underwriting factors such as current and expected income, employment status, current assets, other financial resources, credit history and the value of the collateral.  Collateral consists of mortgage liens on 1-4 family residential properties.

• Home Equity: Home equity loans and lines are made to qualified individuals and are primarily secured by senior or junior mortgage liens on owner-occupied 1-4 family homes, condominiums or vacation homes. The home equity loan has a fixed rate and is billed in equal payments comprised of principal and interest. The home equity line of credit has a variable rate and is billed in interest-only payments during the draw period. At the end of the draw period, the home equity line of credit is billed as a percentage of the principal balance plus all accrued interest. Additionally, the Company has the option of renewing the line of credit for additional draw periods.  Borrower qualifications include favorable credit history combined with supportive income requirements and combined loan to value ratios within established policy guidelines.

• Other Consumer: Other consumer loan products include personal lines of credit and amortizing loans made to qualified individuals for various purposes such as debt consolidation, personal expenses or overdraft protection.  Borrower qualifications include favorable credit history combined with supportive income and collateral requirements within established policy guidelines.  These loans may be secured or unsecured.

Credit Quality

The Company continually monitors the asset quality of the loan portfolio using all available information. Based on this information, loans demonstrating certain payment issues or other weaknesses may be categorized as delinquent, impaired, nonperforming and/or put on nonaccrual status. Additionally, in the course of resolving such loans, the Company may choose to restructure the contractual terms of certain loans to match the borrower’s ability to repay the loan based on their current financial condition. If a restructured loan meets certain criteria, it may be categorized as a troubled debt restructuring (“TDR”).

The Company reviews numerous credit quality indicators when assessing the risk in its loan portfolio. For the commercial portfolio, the Company utilizes a 10-point commercial risk-rating system, which assigns a risk-grade to each borrower based on a number of quantitative and qualitative factors associated with a commercial loan transaction. Factors considered include industry and market conditions, position within the industry, earnings trends, operating cash flow, asset/liability values, debt capacity, guarantor strength, management and controls, financial reporting, collateral, and other considerations. The risk-ratings categories are defined as follows:

• 1- 6 Rating — Pass: Risk-rating grades “1” through “6” comprise those loans ranging from ‘Substantially Risk Free’ which indicates borrowers are of unquestioned credit standing and the pinnacle of credit quality, well established companies with a very strong financial condition, and loans fully secured by cash collateral, through ‘Acceptable Risk’, which indicates borrowers may exhibit declining earnings, strained cash flow, increasing or above average leverage and/or weakening market fundamentals that indicate below average asset quality, margins and market share. Collateral coverage is protective.

• 7 Rating — Potential Weakness: Borrowers exhibit potential credit weaknesses or downward trends deserving management’s close attention. If not checked or corrected, these trends will weaken the Company’s asset and position. While potentially weak, currently these borrowers are marginally acceptable; no loss of principal or interest is envisioned.

• 8 Rating — Definite Weakness Loss Unlikely: Borrowers exhibit well defined weaknesses that jeopardize the orderly liquidation of debt. Loan may be inadequately protected by the current net worth and paying capacity of the obligor or by the collateral pledged, if any. Normal repayment from the borrower is in jeopardy, although no loss of principal is envisioned. However, there is a distinct possibility that a partial loss of interest and/or principal will occur if the deficiencies are not corrected. Collateral coverage may be inadequate to cover the principal obligation.

• 9 Rating — Partial Loss Probable: Borrowers exhibit well defined weaknesses that jeopardize the orderly liquidation of debt with the added provision that the weaknesses make collection of the debt in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Serious problems exist to the point where partial loss of principal is likely.

• 10 Rating — Definite Loss: Borrowers deemed incapable of repayment. Loans to such borrowers are considered uncollectible and of such little value that continuation as active assets of the Company is not warranted.

The credit quality of the commercial loan portfolio is actively monitored and any changes in credit quality are reflected in risk-rating changes. Risk-ratings are assigned or reviewed for all new loans, when advancing significant additions to existing relationships (over $50,000), at least quarterly for all actively managed loans, and any time a significant event occurs, including at renewal of the loan.

The Company utilizes a comprehensive strategy for monitoring commercial credit quality. Borrowers are required to provide updated financial information at least annually which is carefully evaluated for any changes in credit quality. Larger loan relationships are subject to a full annual credit review by an experienced credit analysis group. Additionally, the Company retains an independent loan review firm to evaluate the credit quality of the commercial loan portfolio. The independent loan review process achieves significant penetration into the commercial loan portfolio and reports the results of these reviews to the Audit Committee of the Board of Directors on a quarterly basis.

The following table details the amount of outstanding principal balances relative to each of the risk-rating categories for the Company’s commercial portfolio:

		December 31, 2016
Category	Risk Rating	Commercial and Industrial		Commercial Real Estate		Commercial Construction		Small Business		Total
		(Dollars in thousands)
Pass	1 - 6	$	783,825	$	2,876,570	$	317,099	$	120,304	$	4,097,798
Potential weakness	7	46,176		84,641		1,363		1,859		134,039
Definite weakness - loss unlikely	8	71,991		47,164		1,929		556		121,640
Partial loss probable	9	61		2,423		—		7		2,491
Definite loss	10	—		—		—		—		—
Total		$	902,053	$	3,010,798	$	320,391	$	122,726	$	4,355,968
		December 31, 2015
Category	Risk Rating	Commercial and Industrial		Commercial Real Estate		Commercial Construction		Small Business		Total
		(Dollars in thousands)
Pass	1 - 6	$	765,753	$	2,484,025	$	363,781	$	93,008	$	3,706,567
Potential weakness	7	54,375		112,022		7,678		2,444		176,519
Definite weakness - loss unlikely	8	23,073		56,276		1,909		732		81,990
Partial loss probable	9	75		1,111		—		62		1,248
Definite loss	10	—		—		—		—		—
Total		$	843,276	$	2,653,434	$	373,368	$	96,246	$	3,966,324

For the Company’s consumer portfolio, the quality of the loan is best indicated by the repayment performance of an individual borrower. However, the Company does supplement performance data with current Fair Isaac Corporation (“FICO”) scores and Loan to Value (“LTV”) estimates for the residential and home equity portfolios. Current FICO data is purchased and appended to substantially all consumer loans on a quarterly basis. In addition, automated valuation services and broker opinions of value are used to supplement original value data for the residential and home equity portfolios, periodically. The following table shows the weighted average FICO scores and the weighted average combined LTV ratios as of the periods indicated below:

	December 31
	2016		2015
Residential portfolio
FICO score (re-scored)(1)	743		742
LTV (re-valued)(2)	63.2	%	61.4	%
Home equity portfolio
FICO score (re-scored)(1)	767		765
LTV (re-valued)(2)	55.9	%	55.8	%

(1) The average FICO scores above are based upon rescores available from November and origination score data for loans booked between December 1 and December 31, for the years indicated.

(2) The combined LTV ratios for December 31, 2016 and 2015 are based upon updated automated valuations as of March 31, 2015 and original valuation data for loans booked from April 1, 2015 through the dates indicated. For home equity loans and lines in a subordinate lien, the LTV data represents a combined LTV, taking into account the senior lien data for loans and lines.

Asset Quality

The Bank’s philosophy toward managing its loan portfolios is predicated upon careful monitoring, which stresses early detection and response to delinquent and default situations. Delinquent loans are managed by a team of seasoned collection specialists and the Bank seeks to make arrangements to resolve any delinquent or default situation over the shortest possible time frame.  As a general rule, loans more than 90 days past due with respect to principal or interest are classified as nonaccrual loans. The Company also may use discretion regarding the accrual status of other loans over 90 days delinquent if the loan is well secured and/or in process of collection.

The following table shows nonaccrual loans at the dates indicated:

	December 31
	2016		2015
	(Dollars in thousands)
Commercial and industrial (1)	$	37,455	$	3,699
Commercial real estate	6,266		7,856
Commercial construction	—		304
Small business	302		239
Residential real estate	7,782		8,795
Home equity	5,553		6,742
Other consumer	47		55
Total nonaccrual loans (2)	$	57,405	$	27,690

(1) $34.6 million of this balance relates to one large relationship that was contractually current but instead placed on discretionary nonaccrual as of December 31, 2016.

(2) Included in these amounts were $5.2 million of nonaccruing TDRs at both December 31, 2016 and 2015, respectively.

The following table shows information regarding foreclosed residential real estate property at the date indicated:

	December 31, 2016			December 31, 2015
	(Dollars in thousands)
Foreclosed residential real estate property held by the creditor	$	3,775	(1)	$	1,430
Recorded investment in mortgage loans collateralized by residential real estate property that are in the process of foreclosure	$	1,715		$	1,059

(1) Inclusive of acquired other real estate owned of $2.1 million relating to the NEB acquisition.

The following table shows the age analysis of past due financing receivables as of the dates indicated:

	December 31, 2016
	30-59 days			60-89 days			90 days or more			Total Past Due			Current		Total Financing Receivables		Recorded Investment >90 Days and Accruing
	Number of Loans	Principal Balance		Number of Loans	Principal Balance		Number of Loans	Principal Balance		Number of Loans	Principal Balance
	(Dollars in thousands)
Commercial and industrial	8	$	100	32	$	253	6	$	2,480	46	$	2,833	$	899,220	$	902,053	$	—
Commercial real estate	5	1,518		8	1,957		8	3,105		21	6,580		3,004,218		3,010,798		—
Commercial construction	—	—		—	—		—	—		—	—		320,391		320,391		—
Small business	9	323		—	—		19	140		28	463		122,263		122,726		—
Residential real estate	11	1,277		9	1,950		27	3,507		47	6,734		637,692		644,426		—
Home equity	19	1,117		11	767		16	1,209		46	3,093		985,054		988,147		—
Other consumer (1)	249	184		12	17		15	7		276	208		10,856		11,064		2
Total	301	$	4,519	72	$	4,944	91	$	10,448	464	$	19,911	$	5,979,694	$	5,999,605	$	2

	December 31, 2015
	30-59 days			60-89 days			90 days or more			Total Past Due			Current		Total Financing Receivables		Recorded Investment >90 Days and Accruing
	Number of Loans	Principal Balance		Number of Loans	Principal Balance		Number of Loans	Principal Balance		Number of Loans	Principal Balance
	(Dollars in thousands)
Commercial and industrial	9	$	399	4	$	1,021	8	$	3,039	21	$	4,459	$	838,817	$	843,276	$	—
Commercial real estate	19	7,349		6	1,627		13	4,458		38	13,434		2,640,000		2,653,434		—
Commercial construction	—	—		—	—		1	304		1	304		373,064		373,368		—
Small business	11	93		4	9		13	69		28	171		96,075		96,246		—
Residential real estate	20	3,119		11	2,049		19	3,433		50	8,601		630,005		638,606		—
Home equity	21	1,526		11	903		20	1,338		52	3,767		924,036		927,803		—
Other consumer (1)	297	231		12	65		13	25		322	321		14,667		14,988		—
Total	377	$	12,717	48	$	5,674	87	$	12,666	512	$	31,057	$	5,516,664	$	5,547,721	$	—

(1) Other consumer portfolio is inclusive of deposit account overdrafts recorded as loan balances.

Troubled Debt Restructurings

In the course of resolving nonperforming loans, the Bank may choose to restructure the contractual terms of certain loans. The Bank attempts to work out an alternative payment schedule with the borrower in order to avoid foreclosure actions. Any loans that are modified are reviewed by the Bank to identify if a TDR has occurred, which is when, for economic or legal reasons related to a borrower’s financial difficulties, the Bank grants a concession to the borrower that it would not otherwise consider. Terms may be modified to fit the ability of the borrower to repay in line with its current financial status and the restructuring of the loan may include the transfer of assets from the borrower to satisfy the debt, a modification of loan terms, or a combination of the two.

The following table shows the Company’s total TDRs and other pertinent information as of the dates indicated:

	December 31
	2016		2015
	(Dollars in thousands)
TDRs on accrual status	$	27,093	$	32,849
TDRs on nonaccrual status	5,199		5,225
Total TDRs	$	32,292	$	38,074
Amount of specific reserves included in the allowance for loan loss associated with TDRs:	$	1,417	$	1,628
Additional commitments to lend to a borrower who has been a party to a TDR:	$	1,378	$	972

The Company’s policy is to have any restructured loan which is on nonaccrual status prior to being modified remain on nonaccrual status for six months, subsequent to being modified, before management considers its return to accrual status. If the restructured loan is on accrual status prior to being modified, it is reviewed to determine if the modified loan should remain on accrual status. Additionally, loans classified as TDRs are adjusted to reflect the changes in value of the recorded investment in the loan, if any, resulting from the granting of a concession. For all residential loan modifications, the borrower must perform during a 90 day trial period before the modification is finalized.

The following table shows the modifications which occurred during the periods indicated and the change in the recorded investment subsequent to the modifications occurring:

	Years Ended December 31
	2016
	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment(1)
	(Dollars in thousands)
Troubled debt restructurings
Commercial and industrial	10	$	1,623	$	1,623
Commercial real estate	10	2,959		2,959
Small business	3	188		188
Residential real estate	8	1,808		1,850
Home equity	13	932		932
Other consumer	6	153		153
Total	50	$	7,663	$	7,705
	2015
Troubled debt restructurings
Commercial and industrial	13	$	1,314	$	1,314
Commercial real estate	6	2,941		2,941
Small business	9	293		293
Residential real estate	8	843		870
Home equity	8	694		694
Total	44	$	6,085	$	6,112
	2014
Troubled debt restructurings
Commercial and industrial	12	$	681	$	681
Commercial real estate	13	4,329		4,329
Small business	5	133		133
Residential real estate	9	1,535		1,568
Home equity	11	923		926
Other consumer	1	8		8
Total	51	$	7,609	$	7,645

(1) The post-modification balances represent the legal principal balance of the loan on the date of modification. These amounts may show an increase when modifications include a capitalization of interest.

The following table shows the Company’s post-modification balance of TDRs listed by type of modification as of the periods indicated:

	Years Ended December 31
	2016		2015		2014
	(Dollars in thousands)
Extended maturity	$	5,044	$	2,936	$	3,441
Adjusted interest rate	92		—		727
Combination rate and maturity	1,035		2,199		2,640
Court ordered concession	1,534		977		837
Total	$	7,705	$	6,112	$	7,645

The Company considers a loan to have defaulted when it reaches 90 days past due. The following table shows loans that were modified during the prior twelve months and subsequently defaulted during the periods indicated:

	Years Ended December 31
	2016			2015			2014
	Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment
	(Dollars in thousands)
Troubled debt restructurings that subsequently defaulted
Commercial & industrial	—	$	—	3	$	339	2	$	196
Commercial real estate	1	249		1	502		—	—
Residential real estate	—	—		2	326		3	214
Home equity	—	—		1	100		—	—
Total	1	$	249	7	$	1,267	5	$	410

All TDR loans are considered impaired and therefore are subject to a specific review for credit losses. The impairment analysis appropriately discounts the present value of the anticipated cash flows by the loan’s contractual rate of interest in effect prior to the loan’s modification. The amount of impairment, if any, is recorded as a specific loss allocation to each individual loan in the allowance for loan losses. Commercial loans (commercial and industrial, commercial construction, commercial real estate and small business loans), residential loans, and home equity loans that have been classified as TDRs and which subsequently default are reviewed to determine if the loan should be deemed collateral dependent. In such an instance, any shortfall between the value of the collateral and the carrying value of the loan is determined by measuring the recorded investment in the loan against the fair value of the collateral less costs to sell. The Company charges off the amount of any confirmed loan loss in the period when the loans, or portion of loans, are deemed uncollectible. Smaller balance consumer TDR loans are reviewed for performance to determine when a charge-off is appropriate.

Impaired Loans

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed.

The table below sets forth information regarding the Company’s impaired loans. The information for average recorded investment and interest income recognized is reflective of the full period being presented and does not take into account the date at which a loan was deemed to be impaired. See information below as of the dates indicated:

	As of and For the Years Ended December 31
	2016
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
	(Dollars in thousands)
With no related allowance recorded
Commercial and industrial	$	28,776	$	29,772	$	—	$	26,472	$	927
Commercial real estate	11,628		12,891		—		12,744		437
Small business	494		569		—		534		20
Residential real estate	4,216		4,427		—		4,302		185
Home equity	4,485		4,572		—		4,602		184
Other consumer	146		146		—		160		11
Subtotal	49,745		52,377		—		48,814		1,764
With an allowance recorded
Commercial and industrial	10,402		10,440		3,661		10,760		325
Commercial real estate	5,185		5,533		196		5,491		200
Small business	377		392		8		408		21
Residential real estate	9,959		10,530		1,086		10,065		332
Home equity	1,378		1,547		242		1,403		50
Other consumer	251		252		21		268		8
Subtotal	27,552		28,694		5,214		28,395		936
Total	$	77,297	$	81,071	$	5,214	$	77,209	$	2,700
	2015
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
	(Dollars in thousands)
With no related allowance recorded
Commercial and industrial	$	2,613	$	3,002	$	—	$	3,024	$	71
Commercial real estate	12,008		13,128		—		11,676		375
Commercial construction	304		305		—		308		—
Small business	527		618		—		584		22
Residential real estate	3,874		4,033		—		3,958		157
Home equity	4,893		5,005		—		5,023		195
Other consumer	184		185		—		201		15
Subtotal	24,403		26,276		—		24,774		835
With an allowance recorded
Commercial and industrial	2,534		2,648		183		2,848		48
Commercial real estate	10,978		11,047		204		10,789		592
Small business	494		523		4		535		30
Residential real estate	11,531		12,652		1,278		11,669		460
Home equity	1,096		1,287		238		655		14
Other consumer	374		389		23		408		14
Subtotal	27,007		28,546		1,930		26,904		1,158
Total	$	51,410	$	54,822	$	1,930	$	51,678	$	1,993

	2014
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
	(Dollars in thousands)
With no related allowance recorded
Commercial and industrial	$	3,005	$	3,278	$	—	$	4,557	$	258
Commercial real estate	15,982		17,164		—		16,703		1,025
Commercial construction	311		311		—		311		13
Small business	692		718		—		772		45
Residential real estate	2,439		2,502		—		2,493		102
Home equity	4,169		4,221		—		4,264		198
Other consumer	338		341		—		364		24
Subtotal	26,936		28,535		—		29,464		1,665
With an allowance recorded
Commercial and industrial	1,649		1,859		412		2,032		98
Commercial real estate	14,747		15,514		197		15,650		842
Small business	396		458		7		456		32
Residential real estate	12,616		13,727		1,500		12,817		537
Home equity	1,161		1,264		262		1,203		46
Other consumer	530		530		38		580		22
Subtotal	31,099		33,352		2,416		32,738		1,577
Total	$	58,035	$	61,887	$	2,416	$	62,202	$	3,242

Purchased Credit Impaired Loans

Certain loans acquired by the Company may have shown evidence of deterioration of credit quality since origination and it was deemed unlikely that the Company would be able to collect all contractually required payments. As such, these loans were deemed to be PCI loans and the carrying value and prospective income recognition are predicated upon future cash flows expected to be collected. The following table displays certain information pertaining to PCI loans at the dates indicated:

	December 31
	2016		2015
	(Dollars in thousands)
Outstanding balance	$	20,477	$	23,199
Carrying amount	$	18,392	$	20,595

The following table summarizes activity in the accretable yield for the PCI loan portfolio:

	2016			2015
	(Dollars in thousands)
Beginning balance	$	2,827		$	2,974
Acquisition	—			319
Accretion	(1,540		)	(2,485		)
Other change in expected cash flows (1)	953			1,721
Reclassification from nonaccretable difference for loans which have paid off (2)	130			298
Ending balance	$	2,370		$	2,827

(1) Represents changes in cash flows expected to be collected resulting in increased interest income as a prospective yield adjustment over the remaining life of the loan(s).

(2) Results in increased income during the period when a loan pays off at amount greater than originally expected.

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BANK PREMISES AND EQUIPMENT

12 Months Ended

Dec. 31, 2016

Property, Plant and Equipment [Abstract]

BANK PREMISES AND EQUIPMENT

Bank premises and equipment at December 31, were as follows:

	2016			2015			Estimated Useful Life
	(Dollars in thousands)						(In years)
Cost
Land	$	20,585		$	20,780		n/a
Bank premises	43,553			39,182			5-39
Leasehold improvements	24,387			22,817			4-27
Furniture and equipment	58,237			55,336			1-12
Total cost	146,762			138,115
Accumulated depreciation	(68,282		)	(62,452		)
Net bank premises and equipment	$	78,480		$	75,663

Depreciation expense related to bank premises and equipment was $7.3 million in 2016, $7.0 million in 2015, and $6.6 million in 2014, which is primarily included in occupancy and equipment expenses. Depreciation expense relating to computer software is included within other noninterest expense. In addition, the Company has recognized impairment of $16,000, $109,000, and $670,000 during 2016, 2015 and 2014, respectively, relating to certain Bank premises.

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GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS

GOODWILL AND OTHER INTANGIBLE ASSETS

The following table sets forth the carrying value of goodwill and other intangible assets, net of accumulated amortization, at December 31:

	2016		2015
	(Dollars in thousands)
Balances not subject to amortization
Goodwill	$	221,526	$	201,083
Balances subject to amortization
Core deposit intangibles	8,527		10,264
Other intangible assets	1,321		1,562
Total other intangible assets	9,848		11,826
Total goodwill and other intangible assets	$	231,374	$	212,909

The changes in the carrying value of goodwill for the periods indicated were as follows:

	2016		2015
	(Dollars in thousands)
Balance at beginning of year	$	201,083	$	170,421
Acquisitions	20,443		30,662
Balance at end of year	$	221,526	$	201,083

The gross carrying amount and accumulated amortization of other intangible assets were as follows at the periods indicated:

	December 31
	2016							2015
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
	(Dollars in thousands)
Core deposit intangibles	$	23,917	$	(15,390	)	$	8,527	$	23,367	$	(13,103	)	$	10,264
Other intangible assets	3,020		(1,699		)	1,321		3,051		(1,489		)	1,562
Total	$	26,937	$	(17,089	)	$	9,848	$	26,418	$	(14,592	)	$	11,826

Amortization of intangible assets was $2.8 million for both 2016 and 2015, and $2.3 million for 2014.

The following table sets forth the estimated annual amortization expense of intangible assets for each of the next five years:

Year	Amount
	(Dollars in thousands)
2017	$	3,002
2018	$	1,888
2019	$	1,232
2020	$	1,035
2021	$	939

The original weighted average amortization period for intangible assets is 9.8 years.

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DEPOSITS

12 Months Ended

Dec. 31, 2016

Banking and Thrift [Abstract]

DEPOSITS

The following is a summary of the scheduled maturities of time deposits as of December 31:

	2016				2015
	(Dollars in thousands)
1 year or less	$	430,834	66.4	%	$	488,046	71.2	%
Over 1 year to 2 years	82,627		12.7	%	83,244		12.2	%
Over 2 years to 3 years	44,190		6.8	%	31,017		4.5	%
Over 3 years to 4 years	49,446		7.6	%	35,448		5.2	%
Over 4 years to 5 years	42,055		6.5	%	47,075		6.9	%
Total	$	649,152	100.0	%	$	684,830	100.0	%

The amounts of overdraft deposits that were reclassified to the loan category at December 31, 2016 and 2015 were $2.3 million and $2.8 million, respectively.

The Company has pledged assets as collateral covering certain deposits in the amount of $299.7 million and $298.8 million at December 31, 2016 and 2015, respectively.

The Bank's deposit accounts are insured to the maximum extent permitted by law by the Deposit Insurance Fund which is administered by the FDIC. The FDIC offers insurance coverage on deposits up to the federally insured limit of $250,000. The amount of time deposit accounts equal to and greater than $250,000 as of December 31, 2016 and 2015 is $75.3 million and $69.6 million, respectively.

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BORROWINGS

12 Months Ended

Dec. 31, 2016

Debt Disclosure [Abstract]

BORROWINGS

BORROWINGS

Federal Home Loan Bank Borrowings

Advances payable to the Federal Home Loan Bank as of December 31 are summarized as follows:

	2016				2015
			Weighted				Weighted
			Average				Average
	Total		Contractual		Total		Contractual
	Outstanding		Rate		Outstanding		Rate
	(Dollars in thousands)
Stated Maturity
2016	$	—	—	%	$	52,025	1.23	%
2017	50,000		2.43	%	40,154		3.10	%
2018	—		—	%	7,043		1.74	%
2019	—		—	%	2,011		1.99	%
Subtotal	50,000		2.43	%	101,233		2.00	%
Amortizing advances	819				847
Total Federal Home Loan Bank Advances	$	50,819			$	102,080

To manage the interest rate risk of these advances, the Company has entered into an interest rate swap which effectively converts $25.0 million of the FHLB advances to a fixed rate of 2.85% and 3.25% at December 31, 2016 and 2015, respectively. Inclusive of the impact of the swap, the weighted average rate of the FHLB borrowings was 3.42% in 2016 and 2.60% in the prior year.

During 2016, exclusive of the impact from the NEB acquisition, the Company repaid $49.0 million of FHLB borrowings prior to the maturity date of the borrowings. This prepayment resulted in a loss on extinguishment of debt of $437,000. The Company also repaid $13.0 million of FHLB borrowings in 2015, resulting in a loss on extinguishment of debt of $122,000.

The Company’s FHLB advances are collateralized by a blanket pledge agreement on the Bank’s FHLB stock, certain qualified investment securities, deposits at the FHLB, and by residential mortgages, and certain commercial real estate loans held in the Bank’s portfolio. The carrying value of the loans pledged as collateral for these borrowings totaled $1.4 billion at both December 31, 2016 and 2015. The Bank’s unused remaining available borrowing capacity at the FHLB was approximately $793.1 million and $777.5 million at December 31, 2016 and 2015, respectively, inclusive of a $5.0 million line of credit. At December 31, 2016 and 2015, the Company had sufficient collateral at the FHLB to support its obligations and was in compliance with the FHLB's collateral pledging program.

Short-Term Debt

The Company’s short-term borrowings of customer repurchase agreements amounted to $176.9 million and $134.0 million at December 31, 2016 and 2015, respectively.

The interest expense on short-term borrowings was $208,000, $210,000, and $200,000 for the years ended December 31, 2016, 2015, and 2014, respectively.

Customer Repurchase Agreements. The Company can raise additional liquidity by entering into repurchase agreements at its discretion. These repurchases are accounted for as a secured borrowing transaction for accounting purposes. Payments on such borrowings are interest only until the scheduled repurchase date. In a repurchase agreement the Company is subject to the risk that the purchaser may default at maturity and not return the securities underlying the agreements. In order to minimize this potential risk, the Company enter deals with customers whose agreements stipulate that the securities underlying the agreement are not delivered to the customer and instead are held in segregated safekeeping accounts by the Company's safekeeping agents.

The table below sets forth information regarding the Company’s repurchase agreements allocated by source of collateral at the dates indicated:

	December 31, 2016
	Remaining Contractual Maturity of the Agreements
	Overnight and Continuous		Up to 30 Days		30-90 Days		Greater than 90 Days		Total
	(Dollars in thousands)
Sources of Collateral
U.S. government agency securities	$	20,233	$	—	$	—	$	—	$	20,233
Agency mortgage-backed securities	79,079		—		—		—		79,079
Agency collateralized mortgage obligations	77,601		—		—		—		77,601
Total borrowings	$	176,913	$	—	$	—	$	—	$	176,913
	December 31, 2015
	Remaining Contractual Maturity of the Agreements
	Overnight and Continuous		Up to 30 Days		30-90 Days		Greater than 90 Days		Total
	(Dollars in thousands)
Sources of Collateral
U.S. government agency securities	$	10,157	$	—	$	—	$	—	$	10,157
Agency mortgage-backed securities	69,142		—		—		—		69,142
Agency collateralized mortgage obligations	54,659		—		—		—		54,659
Total borrowings	$	133,958	$	—	$	—	$	—	$	133,958

Certain counterparties monitor collateral, and may request additional collateral to be posted from time to time. For further information regarding the Company's repurchase agreements see Note 12, Balance Sheet Offsetting.

Long-Term Debt

The following table summarizes long-term debt, net of debt issuances costs, as of the periods indicated:

	December 31
	2016		2015
	(Dollars in thousands)
Junior subordinated debentures
Capital Trust V	$	51,500	$	51,497
Slades Ferry Trust I	10,224		10,219
Central Trust I	5,302		5,516
Central Trust II	6,081		6,074
Subordinated debentures	34,635		34,589
Total long-term debt	$	107,742	$	107,895

The interest expense on long-term debt was $5.8 million, $6.6 million, and $6.4 million for the years ended December 31, 2016, 2015, and 2014, respectively.

Junior Subordinated Debentures: The junior subordinated debentures are issued to various trust subsidiaries of the Company. These trusts are considered to be variable interest entities for which the Company is not the primary beneficiary, and therefore the accounts of the trusts are not included in the Company’s consolidated financial statements. These trusts were formed for the purpose of issuing trust preferred securities, which were then sold in a private placement offering. The proceeds from the sale of the securities and the issuance of common stock by these trusts were invested in these Junior Subordinated Debentures issued by the Company.

For regulatory purposes, bank holding companies are allowed to include trust preferred securities in Tier 1 capital up to a certain limit. Provisions in the Dodd-Frank Act generally exclude trust preferred securities from Tier 1 capital, however, holding companies with consolidated assets of less than $15 billion, such as the Company, are able to continue to include these instruments in Tier 1 capital, but no such securities issued in the future will count as Tier 1 capital.

Information relating to these trust preferred securities are as follows:

Trust	Description of Capital Securities
Capital Trust V	$50.0 million due in 2037, interest at a variable rate of 3 month LIBOR plus 1.48% (2.44% at December 31, 2016), which had previously been converted to a fixed rate of 6.52%, through the use of an interest rate swap which expired on December 28, 2016. Beginning on January 17, 2017, the borrowings will be subject to a forward starting interest rate swap, converting the interest to a fixed rate of 2.84% through December 15, 2021. These securities are callable quarterly, until maturity.
Slades Ferry Trust I	$10.0 million due in 2034, bearing interest at a variable rate of 3 month LIBOR plus 2.79% (3.78% at December 31, 2016). These securities are callable quarterly, until maturity.
Central Trust I	$5.1 million due in 2034, bearing interest at a variable rate of 3 month LIBOR plus 2.44% (3.40% at December 31, 2016). These securities are callable quarterly, until maturity.
Central Trust II	$5.9 million due in 2037, bearing a fixed interest rate of 7.015% until March 15, 2017. Subsequent to this date, the interest will be variable (3 month LIBOR plus 1.65%) and the securities will become callable quarterly, until maturity.

All obligations under these trust preferred securities are unconditionally guaranteed by the Company.

Subordinated Debentures: In the first quarter of 2015, the Bank redeemed $30.0 million of subordinated debt that had an original maturity of October 1, 2019, without penalty. The interest rate at the time of redemption was floating rate of LIBOR plus 3.00%. The subordinated debentures were issued to USB Capital Resources, Inc., a wholly-owned subsidiary of U.S. Bank National Association.

At December 31, 2016 and 2015 there was $35.0 million of outstanding subordinated debentures at the bank holding company. The subordinated debentures were issued to several investors via private placement on November 17, 2014. The subordinated debt matures on November 15, 2024, however with regulatory approval, the Bank may redeem the subordinated debt without penalty at any scheduled payment date on or after November 15, 2019 with 30 days notice. The interest rate is fixed at 4.75% through November 15, 2019, after which it converts to LIBOR plus 2.98%.

The following table sets forth the contractual maturities of long-term debt over the next five years:

	2017		2018		2019		2020		2021		Thereafter		Total
	(Dollars in thousands)
Junior subordinated debentures
Capital trust V	$	—	$	—	$	—	$	—	$	—	$	51,547	$	51,547
Slades ferry trust I	$	—	$	—	$	—	$	—	$	—	$	10,310	$	10,310
Central trust I	$	—	$	—	$	—	$	—	$	—	$	5,258	$	5,258
Central trust II	$	—	$	—	$	—	$	—	$	—	$	6,083	$	6,083
Subordinated debentures	$	—	$	—	$	—	$	—	$	—	$	35,000	$	35,000

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EARNINGS PER SHARE

12 Months Ended

Dec. 31, 2016

Earnings Per Share [Abstract]

EARNINGS PER SHARE

Earnings per share consisted of the following components for the years ended December 31:

	2016		2015			2014
	(Dollars in thousands, except per share data)
Net income	$	76,648	$	64,960		$	59,845
Weighted Average Shares
Basic shares	26,404,071		25,891,382			23,899,562
Effect of dilutive securities	51,847		68,566			93,815
Diluted shares	26,455,918		25,959,948			23,993,377
Net income per share
Basic EPS	$	2.90	$	2.51		$	2.50
Effect of dilutive securities	—		(0.01		)	(0.01		)
Diluted EPS	$	2.90	$	2.50		$	2.49

There were no options to purchase common stock and there were no shares of performance-based restricted stock that were excluded from the calculation of diluted earnings per share because they were anti-dilutive during the years ended December 31, 2016, 2015, and 2014.

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STOCK BASED COMPENSATION

12 Months Ended

Dec. 31, 2016

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

STOCK BASED COMPENSATION

The Company's stock based plans include the Second Amended and Restated 2005 Employee Stock Plan (“2005 Plan”) and the 2010 Nonemployee Director Stock Plan (“2010 Plan”) both of which have been approved by the Company’s Board of Directors and shareholders. The Company may award shares from these plans as either stock options or restricted stock from its pool of authorized but unissued shares.

The following table presents the amount of cumulatively granted stock options and restricted stock awards, net of forfeitures, through December 31, 2016:

	Authorized Awards	Cumulative Granted, Net of Forfeitures		Total	Authorized but Unissued
		Stock Option  Awards	Restricted Stock  Awards
2005 Plan	1,650,000	537,941	650,485	1,188,426	461,574
2010 Plan	314,600	37,000	86,245	123,245	191,355

The following table presents the pre-tax expense associated with stock option and restricted stock awards and the related tax benefits recognized for the years presented:

	Years Ended December 31
	2016		2015		2014
	(Dollars in thousands)
Stock based compensation expense
Stock options	$	—	$	—	$	36
Restricted stock awards(1)	2,590		2,296		2,135
Directors’ fee expense
Stock options	72		—		14
Restricted stock awards	303		194		527
Total stock based award expense	$	2,965	$	2,490	$	2,712
Related tax benefits recognized in earnings	$	1,211	$	1,122	$	945

(1) Inclusive of compensation expense associated with time-vested and performance-based restricted stock awards.

Expense related to awards issued to directors are recognized as directors’ fees within other noninterest expense.

The Company has standard form agreements used for stock option and restricted stock awards. The standard form agreements used for the Chief Executive Officer and all other Executive Officers have previously been disclosed in Securities and Exchange Commission filings and generally provide that: (1) any unvested options or unvested restricted stock vest upon a Change of Control; and, that (2) any stock options which vest pursuant to a Change of Control, which is an event described in Section 280G of the Internal Revenue Code of 1986, will be cashed out at the difference between the acquisition price and the exercise price of the stock option.

Stock Options

The fair value of each option grant is estimated on the date of the grant using the Black-Scholes option-pricing model with the following assumptions used for grants under the identified plans:

• Expected volatility is based on the standard deviation of the historical volatility of the weekly adjusted closing price of the Company’s shares for a period equivalent to the expected life of the option.

• Expected life represents the period of time that the option is expected to be outstanding, taking into account the contractual term, historical exercise/forfeiture behavior, and the vesting period, if any.

• Expected dividend yield is an annualized rate calculated using the most recent dividend payment at time of grant and the Company’s average trailing twelve-month daily closing stock price.

• The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for a period equivalent to the expected life of the option.

• The stock based compensation expense recognized in earnings should be based on the amount of awards ultimately expected to vest, therefore a forfeiture assumption is estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Stock based compensation expense recognized has been reduced for annualized estimated forfeitures of 4.5% in 2016 and 2015 and 3.5% in 2014 based on historical experience.

The Company made the following awards of nonqualified options to purchase shares of common stock in 2016. There were no such awards made in 2015 or 2014.

	Year Ended December 31, 2016
Date of grant	7/14/2016			2/20/2016
Plan	2010			2010
Options granted	5,000			5,000
Vesting period (beginning on the grant date)	18 months			22 months
Expiration date	7/14/2026			2/20/2026
Expected volatility	32.28		%	32.44		%
Expected life (years)	5.5			5.5
Expected dividend yield	2.37		%	2.28		%
Risk free interest rate	1.14		%	1.29		%
Fair value per option	$	11.46		$	10.59

Under all of the Company’s stock based plans, the option exercise price is based upon the average of the high and low trading value of the stock on the date of grant. Stock option awards granted to date under all plans expire through 2026.

The following table presents relevant information relating to the Company’s stock options for the periods indicated:

	Years Ended December 31
	2016		2015		2014
	(Dollars in thousands, except per share data)
Fair value of stock options vested based on grant date fair value	$	37	$	14	$	211
Intrinsic value of stock options exercised	$	494	$	3,362	$	1,210
Cash received from stock option exercises	$	680	$	6,105	$	6,285
Tax benefit realized on stock option exercises/repurchase	$	204	$	1,362	$	442
Weighted average grant date fair value of options granted (per share)	$	11.03	$	—	$	—

A summary of stock option activity of the Company’s Stock Option Grants for the year ended December 31, 2016 is presented in the table below:

	Outstanding								Nonvested
	Stock Option Awards			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (1)		Stock Option Awards		Weighted Average Grant Date Fair Value
	(Dollars in thousands, except per share data)
Balance at January 1, 2016	121,900			$	28.76				—		$	—
Granted	10,000			45.69					10,000		11.03
Exercised	(22,250	)		30.58					—		—
Vested	n/a			n/a					(3,334	)	11.03
Forfeited	—			—					—		—
Expired	—			—					—		—
Balance at December 31, 2016	109,650		(2)	$	29.93	3.02 years	$	4,443	6,666		$	11.03
Options outstanding and expected to vest at December 31, 2016	109,498		(3)	$	29.91	3.01 years	$	4,439
Options exercisable at December 31, 2016	102,984		(4)	$	28.91	2.61 years	$	4,278
Unrecognized compensation cost, including forfeiture estimate													$	37
Weighted average remaining recognition period (years)													1.01 years

(1) The aggregate intrinsic value in the preceding tables represents the total pre-tax intrinsic value, based on the average of the high price and low price at which the Company’s common stock traded on December 31, 2016 of $70.45, which would have been received by the option holders had they all exercised their options as of that date.

(2) Inclusive of 34,000 stock options outstanding to Directors.

(3) Inclusive of 33,848 vested stock options and expected to vest to Directors.

(4) Inclusive of 27,334 vested stock options outstanding to Directors.

Restricted Stock

The Company grants both time-vested restricted stock awards as well as performance-based restricted stock awards. During the years ended December 31, 2016, 2015, and 2014 the Company has made the following restricted stock award grants:

	Shares Granted	Plan	Fair Value (1)		Vesting Period
Time-vested
2016
2/11/2016	51,475	2005	$	41.96	Ratably over 5 years from grant date
3/1/2016	600	2005	$	44.37	Ratably over 5 years from grant date
5/24/2016	8,700	2010	$	48.34	At the end of 5 years from grant date (2)
9/19/2016	800	2005	$	52.92	Ratably over 5 years from grant date
11/7/2016	500	2005	$	54.28	Ratably over 5 years from grant date
11/14/2016	725	2010	$	63.43	Once on May 24, 2021 (3)
2015
2/11/2015	31,500	2005	$	39.42	Ratably over 5 years from grant date
2/12/2015	25,910	2005	$	40.03	Ratably over 5 years from grant date
3/19/2015	3,800	2005	$	43.56	Ratably over 5 years from grant date
4/27/2015	625	2005	$	41.61	At the end of 3 years from grant date
4/27/2015	1,875	2005	$	41.61	At the end of 5 years from grant date
5/27/2015	8,800	2010	$	45.02	At the end of 5 years from grant date (2)
7/14/2015	800	2010	$	47.82	Once on May 27, 2020 (4)
10/13/2015	1,000	2005	$	46.09	Ratably over 5 years from grant date
10/20/2015	2,000	2005	$	46.47	Ratably over 5 years from grant date
2014
3/20/2014	65,950	2005	$	39.82	Ratably over 5 years from grant date
3/31/2014	3,000	2005	$	39.00	Ratably over 3 years from grant date
5/20/2014	10,920	2010	$	35.08	At the end of 5 years from grant date (2)
11/20/2014	2,000	2005	$	39.11	Ratably over 5 years from grant date
12/11/2014	2,000	2005	$	40.89	Ratably over 5 years from grant date
Performance-based
2016
2/11/2016	20,450	2005	$	41.96	The earlier of: the date on which it is determined if the performance goal has been achieved; or, March 31, 2019.
2015
2/12/2015	21,780	2005	$	40.03	The earlier of: the date on which it is determined if the performance goal has been achieved; or, March 31, 2018.
2014
3/20/2014	20,700	2005	$	39.82	The earlier of: the date on which it is determined if the performance goal has been achieved; or, March 31, 2017.

(1) The fair value of the restricted stock awards are based upon the average of the high and low prices at which the Company’s common stock traded on the date of grant. The holders of time-vested restricted stock awards participate fully in the rewards of stock ownership of the Company, including voting and dividend rights. The holders of performance-based restricted stock awards do not participate in the rewards of stock ownership of the Company until vested. The holders of all restricted stock awards are not required to pay any consideration to the Company for the awards.

(2) These restricted stock grants will vest at the end of a five year period, or earlier if the director ceases to be a director for any reason other than cause, such as, for example, by retirement.

(3) These restricted stock grants will vest on May 24, 2021, or earlier if the director ceases to be a director for any reason other than cause, such as, for example, by retirement.

(4) These restricted stock grants will vest on May 27, 2020, or earlier if the director ceases to be a director for any reason other than cause, such as, for example, by retirement.

The following table presents the fair value of restricted stock awards vesting during the periods presented:

	Years Ended December 31
	2016		2015		2014
	(Dollars in thousands)
Fair value of restricted stock awards upon vesting	$	3,019	$	2,610	$	3,293

A summary of the status of the Company’s Restricted Stock Award Grants for the year ended December 31, 2016 is presented in the table below:

	Outstanding Restricted Stock Awards			Weighted Average Grant Price ($)
	(Dollars in thousands, except per share data)
Balance at January 1, 2016	264,944			$	36.03
Granted	83,250			43.01
Vested/released	(67,242	)		32.96
Forfeited	(16,637	)		38.06
Balance at December 31, 2016	264,315		(1)	$	38.88
Unrecognized compensation cost (inclusive of directors’ fees), including forfeiture estimate						$	6,268
Weighted average remaining recognition period (years)						2.88

(1) Inclusive of 47,325 restricted stock awards outstanding to Directors.

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DERIVATIVES AND HEDGING ACTIVITIES

12 Months Ended

Dec. 31, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVES AND HEDGING ACTIVITIES

DERIVATIVES AND HEDGING ACTIVITIES

The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally to manage the Company’s interest rate risk. Additionally, the Company enters into interest rate derivatives and foreign exchange contracts to accommodate the business requirements of its customers (“customer related positions”). The Company minimizes the market and liquidity risks of customer related positions by entering into similar offsetting positions with broker-dealers. Derivative instruments are carried at fair value in the Company’s financial statements. The accounting for changes in the fair value of a derivative instrument is dependent upon whether or not it qualifies as a hedge for accounting purposes, and further, by the type of hedging relationship.

The Company does not enter into proprietary trading positions for any derivatives.

Interest Rate Positions

The Company currently utilizes interest rate swap agreements as hedging instruments against interest rate risk associated with the Company’s borrowings. An interest rate swap is an agreement whereby one party agrees to pay a floating rate of interest on a notional principal amount in exchange for receiving a fixed rate of interest on the same notional amount, for a predetermined period of time, from a second party. The amounts relating to the notional principal amount are not actually exchanged. The maximum length of time over which the Company is currently hedging its exposure to the variability in future cash flows for forecasted transactions related to the payment of variable interest on existing financial instruments is five years.

The following table reflects the Company’s derivative positions for the periods indicated below for interest rate swaps which qualify as cash flow hedges for accounting purposes:

December 31, 2016
Notional Amount		Trade Date	Effective Date	Maturity Date		Receive (Variable) Index	Current Rate Received		Pay Fixed Swap Rate		Fair Value
(Dollars in thousands)
$	25,000	9-Dec-08	10-Dec-08	10-Dec-18		3 Month LIBOR	0.95	%	2.94	%	$	(740	)
25,000		1-Apr-16	17-Jan-17	15-Dec-21	(1)	3 Month LIBOR	N/A		1.36	%	689
25,000		1-Apr-16	17-Jan-17	15-Dec-21	(1)	3 Month LIBOR	N/A		1.36	%	675
$	75,000										$	624
December 31, 2015
Notional Amount		Trade Date	Effective Date	Maturity Date		Receive (Variable) Index	Current Rate Received		Pay Fixed Swap Rate		Fair Value
(Dollars in thousands)
$	25,000	16-Feb-06	28-Dec-06	28-Dec-16		3 Month LIBOR	0.51	%	5.04	%	$	(1,054	)
25,000		16-Feb-06	28-Dec-06	28-Dec-16		3 Month LIBOR	0.51	%	5.04	%	(1,055		)
25,000		9-Dec-08	10-Dec-08	10-Dec-18		3 Month LIBOR	0.49	%	2.94	%	(1,164		)
$	75,000										$	(3,273	)

(1) In April 2016, the Company entered into two forward starting swaps with notional amounts of $25.0 million each, with the intention of hedging $50.0 million of existing junior subordinated debentures, as the current hedges on this borrowing expired in December 2016.

For derivative instruments that are designated and qualify as cash flow hedging instruments, the effective portion of the gains or losses is reported as a component of other comprehensive income ("OCI"), and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The Company expects approximately $291,000 (pre-tax) to be reclassified to interest expense from OCI, related to the Company’s cash flow hedges, in the next twelve months.  This reclassification is due to anticipated payments that will be made and/or received on the swaps based upon the forward curve as of December 31, 2016.

The Company recognized $244,000 of net amortization income that was an offset to interest expense related to previously terminated swaps for the years ended December 31, 2016, 2015 and 2014.

In 2014, the Company repaid certain borrowings and consequently terminated the corresponding cash flow hedges. As a result of the termination of the cash flow hedges, the Company reclassified a pre-tax loss of approximately $1.1 million out of OCI and into other noninterest expense.

The Company had no fair value hedges during December 31, 2016, 2015, and 2014.

Customer Related Positions

Loan level derivatives, primarily interest rate swaps, offered to commercial borrowers through the Company’s loan level derivative program do not qualify as hedges for accounting purposes. The Company believes that its exposure to commercial customer derivatives is limited because these contracts are simultaneously matched at inception with an offsetting dealer transaction. The commercial customer derivative program allows the Company to retain variable-rate commercial loans while allowing the customer to synthetically fix the loan rate by entering into a variable-to-fixed interest rate swap.

Foreign exchange contracts offered to commercial borrowers through the Company’s derivative program do not qualify as hedges for accounting purposes. The Company acts as a seller and buyer of foreign exchange contracts to accommodate its customers. To mitigate the market and liquidity risk associated with these derivatives, the Company enters into similar offsetting positions.

The following table reflects the Company’s customer related derivative positions for the periods indicated below for those derivatives not designated as hedging:

	Number of Positions (1)	Notional Amount Maturing
		Less than 1 year		Less than 2 years		Less than 3 years		Less than 4 years		Thereafter		Total		Fair Value
	December 31, 2016
	(Dollars in thousands)
Loan level derivatives
Receive fixed, pay variable	222	$	30,245	$	21,708	$	63,771	$	165,783	$	567,897	$	849,404	$	12,005
Pay fixed, receive variable	207	$	30,245	$	21,708	$	63,771	$	165,783	$	567,897	$	849,404	$	(12,008	)
Foreign exchange contracts
Buys foreign currency, sells U.S. currency	33	$	45,711	$	—	$	—	$	—	$	—	$	45,711	$	(2,250	)
Buys U.S. currency, sells foreign currency	33	$	45,711	$	—	$	—	$	—	$	—	$	45,711	$	2,277
	December 31, 2015
	(Dollars in thousands)
Loan level derivatives
Receive fixed, pay variable	171	$	37,732	$	34,424	$	29,629	$	77,041	$	488,110	$	666,936	$	22,467
Pay fixed, receive variable	165	$	37,732	$	34,424	$	29,629	$	77,041	488,110		$	666,936	$	(22,462	)
Foreign exchange contracts
Buys foreign currency, sells U.S. currency	21	$	38,416	$	—	$	—	$	—	$	—	$	38,416	$	(354	)
Buys U.S. currency, sells foreign currency	21	$	38,416	$	—	$	—	$	—	$	—	$	38,416	$	382

(1) The Company may enter into one dealer swap agreement which offsets multiple commercial borrower swap agreements.

Mortgage Derivatives

Prior to closing and funding certain 1- 4 family residential mortgage loans, an interest rate lock commitment is generally extended to the borrower. During the period from commitment date to closing date, the Company is subject to the risk that market rates of interest may change. If market rates rise, investors generally will pay less to purchase such loans resulting in a reduction in the gain on sale of the loans or, possibly, a loss. In an effort to mitigate such risk, forward delivery sales commitments are executed, under which the Company agrees to deliver whole mortgage loans to various investors. These forward commitments carry a market price that has a strong inverse relationship to that of mortgage prices. Certain assumptions, including pull through rates and rate lock periods, are used in managing the existing and future economic hedges. The effectiveness of the economic hedges rely on the accuracy of these assumptions.    

The change in fair value on the interest rate lock commitments and forward delivery sale commitments are recorded in current period earnings as a component of mortgage banking income. In addition, the Company has elected the fair value option to carry loans held for sale at fair value. The change in fair value of loans held for sale is recorded in current period earnings as a component of mortgage banking income in accordance with the Company's fair value election. The change in fair value associated with loans held for sale was an increase of $87,000, a decrease of $22,000 and an increase of $18,000 for the years ended December 31, 2016, 2015, and 2014. These amounts were offset in earnings by the change in the fair value of mortgage derivatives. Additionally, the aggregate amount of net realized gains or losses on sales of such loans included within mortgage banking income amounted to $6.1 million, $4.7 million and $3.0 million for the years ended December 31, 2016, 2015 and 2014, respectively.

The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the balance sheet at the periods indicated:

	Asset Derivatives					Liability Derivatives
		Fair Value at		Fair Value at			Fair Value at		Fair Value at
	Balance Sheet Location	December 31, 2016		December 31, 2015		Balance Sheet Location	December 31, 2016		December 31, 2015
	(Dollars in thousands)
Derivatives designated as hedges
Interest rate derivatives	Other assets	$	1,364	$	—	Other liabilities	$	740	$	3,273
Derivatives not designated as hedges
Customer Related Positions:
Loan level derivatives	Other assets	18,629		22,470		Other liabilities	18,632		22,465
Foreign exchange contracts	Other assets	2,338		602		Other liabilities	2,311		574
Mortgage Derivatives
Interest rate lock commitments	Other assets	430		233		Other liabilities	—		—
Forward sales agreements	Other assets	—		—		Other liabilities	233		1
Subtotal		21,397		23,305			21,176		23,040
Total		$	22,761	$	23,305		$	21,916	$	26,313

The table below presents the effect of the Company’s derivative financial instruments included in OCI and current earnings for the periods indicated:

	Years Ended December 31
	2016			2015			2014
	(Dollars in thousands)
Derivatives designated as hedges
Gain (loss) in OCI on derivatives (effective portion), net of tax	$	2,170		$	1,199		$	2,256
Loss reclassified from OCI into interest expense (effective portion)	$	(2,520	)	$	(2,828	)	$	(3,662	)
Loss reclassified from OCI into noninterest expense (loss on termination)	$	—		$	—		$	(1,122	)
Loss recognized in income on derivatives (ineffective portion and amount excluded from effectiveness testing)
Interest expense	$	—		$	—		$	—
Other expense	—			—			—
Total	$	—		$	—		$	—
Derivatives not designated as hedges
Changes in fair value of customer related positions
Other income	$	73		$	60		$	63
Other expenses	(82		)	(53		)	(4		)
Changes in fair value of mortgage derivatives
Mortgage banking income	(35		)	(50		)	49
Total	$	(44	)	$	(43	)	$	108

By using derivatives, the Company is exposed to credit risk to the extent that counterparties to the derivative contracts do not perform as required. Should a counterparty fail to perform under the terms of a derivative contract, the Company’s credit exposure on interest rate swaps is limited to the net positive fair value and accrued interest of all swaps with each counterparty. The Company seeks to minimize counterparty credit risk through credit approvals, limits, monitoring procedures, and obtaining collateral, where appropriate. Institutional counterparties must have an investment grade credit rating and be approved by the Company’s Board of Directors. As such, management believes the risk of incurring credit losses on derivative contracts with those counterparties is remote and losses, if any, would be immaterial. The Company had $4.7 million and $2,000 in exposure relating to institutional counterparties at December 31, 2016 and 2015, respectively. The Company’s exposure relating to customer counterparties was approximately $16.1 million and $23.2 million at December 31, 2016 and 2015, respectively. Credit exposure may be reduced by the amount of collateral pledged by the counterparty.

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BALANCE SHEET OFFSETTING - USD ($)
$ in Thousands

12 Months Ended

Dec. 31, 2016

Dec. 31, 2015

Offsetting [Abstract]

Total

$ 22,331

$ 23,072

Derivative Asset

$ 22,331

$ 23,072

Balance Sheet Offsetting Disclosure [Text Block]

BALANCE SHEET OFFSETTING

The Company does not offset fair value amounts recognized for derivative instruments or repurchase agreements. The Company does net the amount recognized for the right to reclaim cash collateral against the obligation to return cash collateral arising from derivative instruments executed with the same counterparty under a master netting arrangement. Collateral legally required to be maintained at dealer banks by the Company is monitored and adjusted as necessary. At December 31, 2016 and 2015, it was determined that no additional collateral would have to be posted to immediately settle these instruments.

The following tables present the Company's asset and liability derivative positions and the potential effect of netting arrangements on its financial position, as of the periods indicated:

							Gross Amounts Not Offset in the Statement of Financial Position
	Gross Amounts Recognized		Gross Amounts Offset in the Statement of Financial Position		Net Amounts Presented in the Statement of Financial Position		Financial Instruments (1)		Collateral Pledged		Net Amount
	December 31, 2016
	(Dollars in thousands)
Derivative Assets
Interest rate swaps	$	1,364	$	—	$	1,364	$	961	$	—	$	403
Loan level derivatives	$	18,629	$	—	$	18,629	$	3,261	$	—	$	15,368
Customer foreign exchange contracts	2,338		—		2,338		—		—		2,338
	$	22,331	$	—	$	22,331	$	4,222	$	—	$	18,109
Derivative Liabilities
Interest rate swaps	$	740	$	—	$	740	$	—	$	740	$	—
Loan level derivatives	18,632		—		18,632		4,222		11,106		3,304
Customer foreign exchange contracts	2,311		—		2,311		—		—		2,311
Repurchase agreements
Customer repurchase agreements	176,913		—		176,913		—		176,913		—
	$	198,596	$	—	$	198,596	$	4,222	$	188,759	$	5,615

(1) Reflects offsetting derivative positions with the same counterparty.

							Gross Amounts Not Offset in the Statement of Financial Position
	Gross Amounts Recognized		Gross Amounts Offset in the Statement of Financial Position		Net Amounts Presented in the Statement of Financial Position		Financial Instruments (1)		Collateral Pledged		Net Amount
	December 31, 2015
	(Dollars in thousands)
Derivative Assets
Loan level derivatives	$	22,470	$	—	$	22,470	$	2	$	—	$	22,468
Customer foreign exchange contracts	602		—		602		—		—		602
	$	23,072	$	—	$	23,072	$	2	$	—	$	23,070
Derivative Liabilities
Interest rate swaps	$	3,273	$	—	$	3,273	$	—	$	3,273	$	—
Loan level derivatives	22,465		—		22,465		2		22,461		2
Customer foreign exchange contracts	574		—		574		—		—		574
Repurchase agreements
Customer repurchase agreements	133,958		—		133,958		—		133,958		—
	$	160,270	$	—	$	160,270	$	2	$	159,692	$	576

(1) Reflects offsetting derivative positions with the same counterparty.

The Company has agreements with certain of its derivative counterparties that contain a provision where if the Company fails to maintain its status as a well capitalized institution, then the Company could be required to terminate any outstanding derivatives with the counterparty. All liability position interest rate swap and customer loan level swap counterparties have credit-risk contingent features as of the dates indicated in the table above. In addition, derivative instruments that contain credit-risk related contingent features that are in a net liability position require the Company to assign collateral as noted in the table above.

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INCOME TAXES

12 Months Ended

Dec. 31, 2016

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The provision for income taxes is comprised of the following components:

	Years Ended December 31
	2016			2015		2014
	(Dollars in thousands)
Current expense
Federal	$	26,549		$	11,946	$	14,709
State	8,883			5,052		6,350
Total current expense	35,432			16,998		21,059
Deferred expense (benefit)
Federal	153			8,466		2,877
State	(158		)	1,754		(37		)
Total deferred expense (benefit)	(5		)	10,220		2,840
Total expense	$	35,427		$	27,218	$	23,899

The difference between the statutory federal income tax rate of 35% and the effective income tax rate reported for the last three years is detailed below:

	Years Ended December 31
	2016					2015					2014
	(Dollars in thousands)
Computed statutory federal income tax provision	$	39,226		35.00	%	$	32,262		35.00	%	$	29,310		35.00	%
State taxes, net of federal tax benefit	5,643			5.03	%	4,500			4.88	%	4,104			4.90	%
Nontaxable interest, net	(996		)	(0.89	)%	(973		)	(1.06	)%	(795		)	(0.95	)%
New Markets Tax Credits	(6,360		)	(5.67	)%	(6,514		)	(7.07	)%	(6,708		)	(8.01	)%
Low Income Housing Project Investments	(1,641		)	(1.46	)%	(1,182		)	(1.28	)%	(594		)	(0.71	)%
Increase in cash surrender value of life insurance and gain on life insurance benefits	(1,431		)	(1.28	)%	(1,292		)	(1.40	)%	(1,782		)	(2.13	)%
Merger and other related costs (non-deductible)	210			0.19	%	185			0.20	%	274			0.33	%
Change in valuation allowance	28			0.02	%	41			0.04	%	—			—	%
Other, net	748			0.67	%	191			0.22	%	90			0.11	%
Total expense	$	35,427		31.61	%	$	27,218		29.53	%	$	23,899		28.54	%

The tax-effected components of the net deferred tax asset at December 31 were as follows:

	2016			2015
	(Dollars in thousands)
Deferred tax assets
Accrued expenses not deducted for tax purposes	$	15,401		$	14,621
Allowance for loan losses	24,681			22,744
Deferred gain on sale leaseback transaction	1,744			2,158
Derivatives fair value adjustment	—			1,033
Employee and director equity compensation	2,095			2,466
Federal Home Loan Bank borrowings fair value adjustment	82			108
Loan basis difference fair value adjustment	4,336			3,789
Net operating loss carry-forward	69			41
New Markets Tax Credit carry-forward	—			459
Other	1,015			451
Gross deferred tax assets	49,423			47,870
Valuation allowance	(69		)	(41		)
Total deferred tax assets net of valuation allowance	$	49,354		$	47,829
Deferred tax liabilities
Core deposit and other intangibles	$	3,040		$	3,785
Deferred loan fees, net	5,407			4,872
Fixed assets	6,168			7,269
Goodwill	14,737			14,576
Net unrealized gain on securities available for sale	105			805
Derivatives fair value adjustment	454			—
Other	3,909			2,468
Gross deferred tax liabilities	$	33,820		$	33,775
Total net deferred tax asset	$	15,534		$	14,054

Deferred tax assets are to be reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The realization of the tax benefit depends upon the existence of sufficient taxable income within the carry-back and future periods.

The Company believes that it is more likely than not that its deferred tax assets as of December 31, 2016, excluding the deferred tax asset on certain state net operating losses, will be realized through the utilization of carry-back provisions to taxable income on prior years, future reversals of existing taxable temporary differences and by offsetting other future taxable income. The Company believes it is more likely than not that the deferred tax asset related to certain state net operating losses generated from the Company's investments in low income housing partnerships, which expire over a 20-year period, will not be realized and has recorded a valuation allowance of $69,000 at December 31, 2016, attributable to this deferred tax asset.

The Company has utilized all federal net operating loss carry forwards acquired from recent acquisitions that were subject to annual change in ownership limitations under Internal Revenue Code Section 382 as of December 31, 2016.  In addition, the Company’s general business credit carry forward from 2015 of $459,000 was fully utilized during 2016.  As such, the Company does not have a federal net operating loss carry forward or general business credit carry forward subject to expiration as of December 31, 2016.

Uncertainty in Income Taxes

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction as well as in various states.  The Company is subject to U.S. federal, state and local income tax examinations by tax authorities for the 2013 through 2015 tax years including any related income tax filings from its recent Bank acquisitions.  The Company believes that its income tax returns have been filed based upon applicable statutes, regulations and case law in effect at the time of filing, however, the Internal Revenue Service ("IRS") and /or state jurisdictions could disagree with the Company's interpretation upon examination. The Company accounts for uncertainties in income taxes by providing a tax reserve for certain positions. The following is a reconciliation of the beginning and ending amount of unrecognized tax benefits:

	(Dollars in thousands)
Balance at December 31, 2014	$	—
Reduction of tax positions for prior years	—
Increase for prior year tax position	—
Increase for current year tax positions	81
Balance at December 31, 2015	$	81
Reduction of tax positions for prior years	—
Increase for prior year tax positions	—
Increase for current year tax positions	30
Balance at December 31, 2016	$	111

Increases to the Company's unrealized tax positions occur as a result of accruing for the unrecognized tax benefit as well the accrual of interest and penalties related to prior year positions. Decreases in the Company's unrealized tax positions occur as a result of the statute of limitation lapsing on prior year positions and/or settlements relating to outstanding positions. The table above does not include the indirect federal benefit of state tax positions of approximately $11,000. All of the Company’s unrecognized tax benefits, including the indirect federal benefit of state tax positions, are recorded as a component of income tax expense therefore affecting the effective tax rate. In addition, the Company records interest and penalties related to uncertain tax positions in the provision for income taxes. The Company accrued approximately $11,000 for interest and penalties on uncertain tax positions as of December 31, 2016 and none for 2015, which are not included in the table above.

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LOW INCOME HOUSING PROJECT INVESTMENTS Low Income Housing Project Investments

12 Months Ended

Dec. 31, 2016

Low Income Housing Project Investments [Abstract]

Investments in Low Income Housing Projects [Text Block]

LOW INCOME HOUSING PROJECT INVESTMENTS

The Company has invested in low income housing projects that generate Low Income Housing Tax Credits (“LIHTC”) which provide the Company with tax credits and operating loss tax benefits over a period of approximately 15 years. None of the original investment is expected to be repaid.

The following table presents certain information related to the Company's investments in low income housing projects as of December 31:

	2016		2015		2014
	(Dollars in thousands)
Original investment value	$	47,379	$	42,199	$	40,541
Current recorded investment	$	39,606	$	38,151	$	38,943
Unfunded liability obligation	$	12,161	$	14,607	$	28,004
Tax credits and benefits earned during the year	$	5,366	$	3,632	$	1,683
Amortization of investments during the year	$	3,725	$	2,450	$	1,089
Net income tax benefit recognized during the year	$	1,641	$	1,182	$	594

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EMPLOYEE BENEFIT PLANS

12 Months Ended

Dec. 31, 2016

Compensation and Retirement Disclosure [Abstract]

EMPLOYEE BENEFIT PLANS

EMPLOYEE BENEFIT PLANS

Pension

The Company maintains a multiemployer defined benefit pension plan (the “Pension Plan”) administered by Pentegra Retirement Services (the “Fund” or “Pentegra Defined Benefit Plan for Financial Institutions”). The Fund does not segregate the assets or liabilities of all participating employers and accordingly, disclosure of plan assets, accumulated vested and nonvested benefits is not possible. Effective July 1, 2006, the Company froze the defined benefit plan by eliminating all future benefit accruals. Contributions to the Pension Plan are based on each individual employer’s experience. The Company bears the market risk relating to the Pension Plan and will continue to fund the Pension Plan as required. The Pension Plan year is July 1^st through June 30^th.

In conjunction with the acquisition of Peoples Federal Savings Bank in 2015, the Company acquired the Peoples Federal Defined Benefit Pension Plan (“Peoples Plan”). The Peoples Plan was frozen at the date of acquisition and will be maintained in the same manner as the Pension Plan. The Peoples Plan is also administered by Pentegra Retirement Services under the same Fund as the Pension Plan.

The Company’s participation in the Pension Plan and the Peoples Plan (the "Pension Plans") for the annual period ended December 31, 2016, is outlined in the table below. The “EIN/Pension Plan Number” column provides the Employer Identification Number (“EIN”) and the three-digit plan number. The funding status of the Pension Plans is determined on the basis of the financial statements provided by the Fund using total plan assets and accumulated benefit obligation. The “FIP/RP Status Pending/Implemented” column indicates plans for which a financial improvement plan (“FIP”) or a rehabilitation plan (“RP”) is either pending or has been implemented. The “Expiration Date of Collective-Bargaining Agreement” column lists the expiration dates of any collective-bargaining agreement(s) to which the Pension Plans are subject.

		Funding Status of Pension Plan		FIP/RP Status Pending/ Implemented	Surcharge Imposed	Expiration Date of Collective- Bargaining Agreement	Minimum Contributions Required for Future Periods
	EIN/Pension Plan Number	2016	2015
Pentegra defined benefit plan for financial institutions	13-5645888/333	At least 80 percent	At least 80 percent	No	No	N/A	$	—

Contributions to the Fund are based on each individual employer’s experience. The Company’s total contributions to the Pension Plans did not represent more than 5% of the total contributions to the Pension Plan as indicated in the Pension Plan’s most recently available annual report dated June 30, 2016. The comparability of employer contributions is impacted by asset performance, discount rates and the reduction in the number of covered employees year over year.

The Company’s contributions to the Pension Plans were as follows for the periods indicated:

					Required Contributions - Plan Year Allocation
	Cash Payment		Future period funding		2016-2017		2015-2016		2014-2015
	(Dollars in thousands)
2016	$	6,245	$	4,000	$	2,245	$	—	$	—
2015	$	2,983	$	1,215	$	—	$	1,768	$	—
2014	$	1,320	$	—	$	—	$	—	$	1,320

The Company’s total defined benefit plan expense was $2.0 million, $1.6 million, and $1.5 million, for the years ending December 31, 2016, 2015, and 2014, respectively.

Financial information for the Fund is made available through the public Form 5500 which is available by April 15^th of the year following the plan year end.

Postretirement Benefit Plans

Employees retiring from the Bank after attaining age 65, who have rendered at least 10 years of continuous service are entitled to a fixed contribution toward the premium for postretirement health care benefits and a $5,000 benefit paid upon death. The health care benefits are subject to deductibles, co-payment provisions and other limitations. The Bank may amend or change these benefits periodically. Additionally, the Company has acquired small postretirement plans and/or agreements in conjunction with various acquisitions, which do not have a material impact on the amount of expense realized by the Company. The expense related to these plans for the years ending December 31, 2016, 2015, and 2014 was not material.

Supplemental Executive Retirement Plans

The Bank maintains defined benefit supplemental executive retirement plans (“SERP”) for certain highly compensated employees designed to offset the impact of regulatory limits on benefits under qualified pension plans. The Bank also maintains defined benefit SERPs acquired from previous acquisitions. The Bank has established and funded Rabbi Trusts to accumulate funds in order to satisfy the contractual liability of these supplemental retirement plan benefits. These agreements provide for the Bank to pay all benefits from its general assets, and the establishment of these trust funds does not reduce nor otherwise affect the Bank’s continuing liability to pay benefits from such assets except that the Bank’s liability shall be offset by actual benefit payments made from the trusts. The related trust assets, included in the Company's available for sale securities portfolio, totaled $16.0 million and $10.0 million at December 31, 2016 and 2015, respectively.

During 2014, the Company amended the retirement benefit amounts for certain participants. The Company then froze its defined benefit SERP by closing it to new participants and restricting future adjustments to the retirement benefit amounts.

The following table shows the defined benefit supplemental retirement expense, and the contributions paid to the plans which were used only to pay the current year benefits as of the dates indicated:

	2016		2015		2014
	(Dollars in thousands)
Retirement expense	$	1,513	$	1,834	$	954
Contributions paid	$	320	$	276	$	271

Expected future benefit payments for the defined benefit supplemental executive retirement plans are presented below:

	Defined Benefit Supplemental Executive Retirement Plans Expected Benefit Payments
	(Dollars in thousands)
2017	$	412
2018	$	414
2019	$	485
2020	$	471
2021	$	466
2022-2026	$	4,348

The measurement date used to determine the defined benefit supplemental executive retirement plans' benefits is December 31 for each of the years reported. The following table illustrates the status of the defined benefit supplemental executive retirement plans at December 31 for the years presented:

	Defined Benefit Supplemental Executive Retirement Benefits
	2016			2015			2014
	(Dollars in thousands)
Change in accumulated benefit obligation
Benefit obligation at beginning of year	$	13,290		$	12,537		$	8,243
Accumulated service cost	395			742			397
Interest cost	539			470			390
Plan amendment	—			—			1,357
Actuarial loss/(gain)	273			(183		)	2,421
Benefits paid	(320		)	(276		)	(271		)
Accumulated benefit obligation at end of year	$	14,177		$	13,290		$	12,537
Change in plan assets
Fair value of plan assets at beginning of year	$	—		$	—		$	—
Employer contribution	320			276			271
Benefits paid	(320		)	(276		)	(271		)
Fair value of plan assets at end of year	$	—		$	—		$	—
Funded status at end of year	$	(14,177	)	$	(13,290	)	$	(12,537	)
Assets	—			—			—
Liabilities	(14,177		)	(13,290		)	(12,537		)
Accrued benefit cost	$	(14,177	)	$	(13,290	)	$	(12,537	)
Amounts recognized in accumulated other comprehensive income (“AOCI”)
Net loss	$	2,830		$	2,859		$	3,305
Prior service cost	1,323			1,599			1,904
Amounts recognized in AOCI	$	4,153		$	4,458		$	5,209
Information for plans with an accumulated benefit obligation in excess of plan assets
Projected benefit obligation	$	14,177		$	13,290		$	12,537
Accumulated benefit obligation	$	14,177		$	13,290		$	12,537
Net periodic benefit cost
Service cost	$	395		$	742		$	397
Interest cost	539			470			390
Amortization of prior service cost	276			305			113
Recognized net actuarial loss	303			317			54
Net periodic benefit cost	$	1,513		$	1,834		$	954
Amounts in accumulated other comprehensive income expected to be recognized in net periodic benefit cost over next fiscal year
Net actuarial loss	$	338		$	270		$	309
Net prior service cost	$	276		$	276		$	947
Discount rate used for benefit obligation	2.49-3.94%			2.49-4.16%			2.24-3.84%
Discount rate used for net periodic benefit cost	2.49-4.16%			2.24-3.84%			2.43-4.76%
Rate of compensation increase	n/a			n/a			n/a

Other Employee Benefits

The Bank from time to time creates an incentive compensation plan for senior management and other officers to participate in at varying levels. In addition, the Bank may also pay a discretionary bonus to senior management, officers, and/or nonofficers of the Bank. The expense for the incentive plans and the discretionary bonus amounted to $10.3 million in both 2016 and 2015, and $8.5 million in 2014.

The Bank has an Employee Savings Plan that qualifies as a deferred salary arrangement under Section 401(k) of the Internal Revenue Code. Under the Employee Savings Plan, participating employees may defer a portion of their earnings, not to exceed the Internal Revenue Service annual contribution limits. The Bank matches 25% of each employee’s contributions up to the first 6% of the employee’s earnings. The 401(k) Plan incorporates an Employee Stock Ownership Plan for contributions invested in the Company’s common stock. This Plan also provides nondiscretionary contributions in which employees, with one year and 1,000 hours of service, receive a 5% cash contribution of eligible pay up to the social security limit and a 10% cash contribution of eligible pay over the social security limit up to the maximum amount permitted by law. Benefits contributed to employees under this defined contribution plan vest immediately. The defined contribution plan expense was $4.8 million, $4.5 million and $4.2 million for the years ended December 2016, 2015, in 2014, respectively.

The Company has a non-qualified deferred compensation plan which allows for deferrals of incentive payments until an elected distribution date in the future. This deferred compensation plan is available to certain highly compensated employees. Deferrals are invested at the election of the participant into one of the actively managed funds made available to the participant through the Company's Investment Management Group. The funds are held in a Rabbi Trust until the elected date of distribution.

The Company has a non-qualified 401(k) Restoration Plan ("Restoration Plan") for certain executive officers. The Restoration Plan is intended to contribute to each participant the amount of matching and discretionary contributions which would have been made to the existing Rockland Trust 401(k) plan on the participant's behalf, but were prohibited due to Internal Revenue Code limitations. Deferrals are invested at the election of the participant into one of the actively managed funds made available to the participant through the Company's Investment Management Group or in the Company's stock. The funds, which are not invested in the Company's stock are held in a Rabbi Trust until the elected date of distribution. The Company recognized expense of $425,000, $232,000 and $56,000 related to this plan for services already performed for the years ended December 31, 2016, 2015 and 2014, respectively.

As a result of the Peoples acquisition in 2015, the Company assumed an Employee Stock Ownership Plan and a 401(k) Plan. The Company received approval and terminated both plans during 2016, and as such, there was no expense associated with either plan during 2016 and 2015.

Also as part of the Peoples acquisition, the Company assumed various Salary Continuation Agreements with certain current and former senior executives. The agreements require the payment of specified benefits upon retirement over periods of ten or twenty years as described in each agreement. Expense related to the Salary Continuation Agreements was $272,000 and $222,000 for the years ended December 31, 2016 and 2015, respectively.

The Company also assumed a Peoples supplemental retirement plan with a former executive, whereby the amounts paid under this plan commenced upon the executive's retirement and continue for his lifetime. Expense related to the supplemental retirement plan was $13,000 and $11,000 for the years ended December 31, 2016 and 2015.

Director Benefits    

The Company maintains a deferred compensation plan for the Company’s Board of Directors. The Board of Directors is entitled to elect to defer their director’s fees until retirement. If the Director elects to do so, their compensation is invested in the Company’s stock and maintained within the Company’s Investment Management Group. The amount of compensation deferred during 2016, 2015, and 2014 was $142,000, $149,000, and $135,000, respectively. At December 31, 2016 and 2015, the Company had 168,352 and 172,580 of shares provided for the plan with a related liability of $4.2 million and $3.9 million established within shareholders’ equity, respectively.

As a result of the Peoples acquisition during 2015, the Company assumed several Director Retirement Agreements. The agreements require the payment of specified benefits upon retirement over periods of ten or twenty years as described in each agreement. Expense for the Director Retirement Agreements was $40,000 and $35,000 for the years ended December 31, 2016 and 2015, respectively.

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FAIR VALUE MEASUREMENTS

12 Months Ended

Dec. 31, 2016

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

Fair value is a market-based measure considered from the perspective of a market participant rather than an entity-specific measure. Therefore, even when market assumptions are not readily available, the Company’s own assumptions are set to reflect those that market participants would use in pricing the asset or liability at the measurement date. If there has been a significant decrease in the volume and level of activity for the asset or liability, regardless of the valuation technique(s) used, the objective of a fair value measurement remains the same. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. The Company uses prices and inputs that are current as of the measurement date. In periods of market dislocation, the observability of prices and inputs may be reduced for many instruments. This condition could cause an instrument to be reclassified from one level to another.

The Fair Value Measurements and Disclosures Topic of the FASB ASC defines fair value and establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under the Fair Value Measurements and Disclosures Topic of the FASB ASC are described below:

Level 1 – Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

Level 2 – Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3 – Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

Valuation Techniques

There have been no changes in the valuation techniques used during the current period.

Securities:

Trading and Equity Securities

These equity securities are valued based on market quoted prices. These securities are categorized in Level 1 as they are actively traded and no valuation adjustments have been applied.

U.S. Government Agency Securities

Fair value is estimated using either multi-dimensional spread tables or benchmarks. The inputs used include benchmark yields, reported trades, and broker/dealer quotes. These securities are classified as Level 2.

Agency Mortgage-Backed Securities

Fair value is estimated using either a matrix or benchmarks. The inputs used include benchmark yields, reported trades, broker/dealer quotes, and issuer spreads. These securities are categorized as Level 2.

Agency Collateralized Mortgage Obligations and Small Business Administration Pooled Securities

The valuation model for these securities is volatility-driven and ratings based, and uses multi-dimensional spread tables. The inputs used include benchmark yields, reported trades, new issue data, broker dealer quotes, and collateral performance. If there is at least one significant model assumption or input that is not observable, these securities are categorized as Level 3 within the fair value hierarchy; otherwise, they are classified as Level 2.

State, County, and Municipal Securities

The fair value is estimated using a valuation matrix with inputs including bond interest rate tables, recent transaction, and yield relationships. These securities are categorized as Level 2.

Single and Pooled Issuer Trust Preferred Securities

The fair value of trust preferred securities, including pooled and single issuer preferred securities, is estimated using external pricing models, discounted cash flow methodologies or similar techniques. The inputs used in these valuations include benchmark yields, reported trades, new issue data, broker dealer quotes, and collateral performance. If there is at least one significant model assumption or input that is not observable, these securities are classified as Level 3 within the fair value hierarchy; otherwise, they are classified as Level 2.

Loans Held for Sale

The Company has elected the fair value option to account for originated closed loans intended for sale. The fair value is measured on an individual loan basis using quoted market prices and when not available, comparable market value or discounted cash flow analysis may be utilized. These assets are typically classified as Level 2.

Derivative Instruments

Derivatives

The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The Company incorporates credit valuation adjustments to appropriately reflect nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings. Additionally, in conjunction with fair value measurement guidance, the Company has made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio. Although the Company has determined that the majority of the inputs used to value its interest rate derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties. However, as of December 31, 2016 and 2015, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2.

Mortgage Derivatives

The fair value of mortgage derivatives is determined based on current market prices for similar assets in the secondary market and, therefore, classified as Level 2 within the fair value hierarchy.

Impaired Loans

Collateral dependent loans that are deemed to be impaired are valued based upon the lower of cost or fair value of the underlying collateral less costs to sell.  The inputs used in the appraisals of the collateral are not always observable, and therefore the loans may be classified as Level 3 within the fair value hierarchy; otherwise, they are classified as Level 2.

Other Real Estate Owned and Other Foreclosed Assets

The fair values are generally estimated based upon recent appraisal values of the property less costs to sell the property, as Other Real Estate Owned ("OREO") and Other Foreclosed Assets are valued at the lower of cost or fair value of the property, less estimated costs to sell. Certain inputs used in appraisals are not always observable, and therefore OREO and Other Foreclosed Assets are classified as Level 3 within the fair value hierarchy.

Goodwill and Other Intangible Assets

Goodwill and identified intangible assets are subject to impairment testing. The Company conducts an annual impairment test of goodwill in the third quarter of each year, or more frequently if necessary, and other intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. To estimate the fair value of goodwill and, if necessary, other intangible assets, the Company utilizes both a comparable analysis of relevant price multiples in recent market transactions and discounted cash flow analysis. Both valuation models require a significant degree of management judgment. In the event the fair value as determined by the valuation model is less than the carrying value, the intangibles may be impaired. If the impairment testing resulted in impairment, the Company would classify the impaired goodwill and other intangible assets subjected to nonrecurring fair value adjustments as Level 3.

Assets and liabilities measured at fair value on a recurring and nonrecurring basis were as follows as of the dates indicated:

			Fair Value Measurements at Reporting Date Using
	Balance		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	December 31, 2016
	(Dollars in thousands)
Recurring fair value measurements
Assets
Trading securities	$	804	$	804	$	—	$	—
Securities available for sale
U.S. Government agency securities	24,244		—		24,244		—
Agency mortgage-backed securities	175,384		—		175,384		—
Agency collateralized mortgage obligations	99,868		—		99,868		—
State, county, and municipal securities	3,793		—		3,793		—
Single issuer trust preferred securities issued by banks and insurers	2,311		—		2,311		—
Pooled trust preferred securities issued by banks and insurers	1,584		—		—		1,584
Small business administration pooled securities	37,189		—		37,189		—
Equity securities	19,271		19,271		—		—
Loans held for sale	6,139		—		6,139		—
Derivative instruments	22,761		—		22,761		—
Liabilities
Derivative instruments	21,916		—		21,916		—
Total recurring fair value measurements	$	371,432	$	20,075	$	349,773	$	1,584
Nonrecurring fair value measurements
Assets
Collateral dependent impaired loans	$	33,974	$	—	$	—	$	33,974
Other real estate owned and other foreclosed assets	4,173		—		—		4,173
Total nonrecurring fair value measurements	$	38,147	$	—	$	—	$	38,147

			Fair Value Measurements at Reporting Date Using
	Balance		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	December 31, 2015
	(Dollars in thousands)
Recurring fair value measurements
Assets
Trading securities	$	356	$	356	$	—	$	—
Securities available for sale
U.S. Government agency securities	30,215		$	—	30,215		—
Agency mortgage-backed securities	210,937		—		210,937		—
Agency collateralized mortgage obligations	63,584		—		63,584		—
State, county, and municipal securities	4,659		—		4,659		—
Single issuer trust preferred securities issued by banks and insurers	2,792		—		2,792		—
Pooled trust preferred securities issued by banks and insurers	1,572		—		—		1,572
Small business administration pooled securities	40,449		—		40,449		—
Equity securities	13,041		13,041		—		—
Loans held for sale	5,990		—		5,990		—
Derivative instruments	23,305		—		23,305		—
Liabilities
Derivative instruments	26,313		—		26,313		—
Total recurring fair value measurements	$	370,587	$	13,397	$	355,618	$	1,572
Nonrecurring fair value measurements:
Assets
Collateral dependent impaired loans	$	4,598	$	—	$	—	$	4,598
Other real estate owned and other foreclosed assets	2,159		—		—		2,159
Total nonrecurring fair value measurements	$	6,757	$	—	$	—	$	6,757

The table below presents a reconciliation for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3), which were valued using pricing models and discounted cash flow methodologies, as of the dates indicated:

	As of and for the years ended December 31,
	2016			2015			2014
	(Dollars in thousands)
Pooled Trust Preferred Securities
Beginning balance	$	1,572		$	6,321		$	3,841
Gain and (losses) (realized/unrealized)
Included in earnings	—			—			—
Included in other comprehensive income	29			14			2,655
Sales	—			(4,679		)	—
Settlements	(17		)	(84		)	(175		)
Transfers into (out of) level 3	—			—			—
Ending Balance	$	1,584		$	1,572		$	6,321

It is the Company’s policy to recognize the transfers between levels of the fair value hierarchy as of the end of the reporting period. There were no transfers between the levels of the fair value hierarchy for any assets or liabilities measured at fair value on a recurring basis during the years ended December 31, 2016, 2015 and 2014.

The following table sets forth certain unobservable inputs regarding the Company's financial instruments that are classified as Level 3 as of December 31st for the years indicated:

	2016		2015			2016	2015	2016	2015
Valuation Technique	Fair Value				Unobservable Inputs	Range		Weighted Average
	(Dollars in thousands)
Discounted cash flow methodology
Pooled trust preferred securities	$	1,584	$	1,572	Cumulative prepayment	0% - 62%	0%-64%	2.5%	2.7%
					Cumulative default	5% - 100%	5%-100%	12.8%	15.1%
					Loss given default	85% - 100%	85%-100%	94.2%	94.2%
					Cure given default	0% - 75%	0%-75%	60.9%	62.3%
Appraisals of collateral (1)
Collateral dependent impaired loans	$	33,974	$	4,598
Other real estate owned and foreclosed assets	$	4,173	$	2,159

(1) Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various Level 3 inputs which are not identifiable. Appraisals may be adjusted by management for qualitative factors such as economic factors and estimated liquidation expenses. The range of these possible adjustments may vary.

For the fair value measurements in the table above, which are classified as Level 3 within the fair value hierarchy, the Company’s Treasury and Finance groups determine the valuation policies and procedures. For the pricing of the securities, the Company uses third-party pricing information, without adjustment. Depending on the type of the security, management employs various techniques to analyze the pricing it receives from third parties, such as analyzing changes in market yields and in certain instances reviewing the underlying collateral of the security. Management reviews changes in fair value from period to period and performs testing to ensure that prices received from the third parties are consistent with their expectation of the market. For the securities whose market is deemed to be inactive and which are categorized as Level 3, the fair value models are calibrated and significant inputs are back tested on a quarterly basis, to the extent possible. This testing is done by the third party service provider, who performs this testing by comparing anticipated inputs to actual results. Significant changes in fair value from period to period are closely scrutinized to ensure fair value models are not flawed. The driver(s) of the respective change in fair value and the method for forecasting the driver(s) is closely considered by management.

The significant unobservable inputs used in the fair value measurement of the Company’s pooled trust preferred securities are cumulative prepayment rates, cumulative defaults, loss given defaults and cure given defaults. Significant increases (decreases) in deferrals or defaults, in isolation, would result in a significantly lower (higher) fair value measurement. Alternatively, significant increases (decreases) in cure rates, in isolation, would result in a significantly higher (lower) fair value measurement.

Additionally, the Company has certain assets which are marked to fair value on a nonrecurring basis which are categorized within Level 3. These assets include collateral dependent impaired loans and OREO and other foreclosed assets. The determination of the fair value amount is derived from the use of independent third party appraisals and evaluations, prepared by firms from a predetermined list of qualified and approved appraisers or evaluators. Upon receipt of an appraisal or evaluation, the Company's Commercial Real Estate Appraisal Department will review the report for compliance with regulatory and Company standards, as well as reasonableness and acceptance of the value conclusions. Any issues or concerns regarding compliance or value conclusions will be addressed with the engaged firm and the report may be adjusted or revised. If a disagreement cannot be resolved, the Commercial Real Estate Appraisal Department will either address the key issues and modify the report for acceptance or reject the report and re-order a new report. Ultimately, the Company’s Commercial Real Estate Appraisal Department will confirm the collateral value as part of its review process.

The estimated fair values and related carrying amounts for assets and liabilities for which fair value is only disclosed are shown below as of the periods indicated:

					Fair Value Measurements at Reporting Date Using
	Book Value		Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	December 31, 2016
	(Dollars in thousands)
Financial assets
Securities held to maturity(a)
U.S. Treasury securities	$	1,007	$	1,054	$	—	$	1,054	$	—
Agency mortgage-backed securities	156,088		157,504		—		157,504		—
Agency collateralized mortgage obligations	297,445		294,650		—		294,650		—
State, county, and municipal securities	—		—		—		—		—
Single issuer trust preferred securities issued by banks	1,500		1,544		—		1,544		—
Small business administration pooled securities	31,036		30,898		—		30,898		—
Loans, net of allowance for loan losses(b)	5,904,065		5,784,778		—		—		5,784,778
Federal Home Loan Bank stock(c)	11,497		11,497		—		11,497		—
Cash surrender value of life insurance policies(d)	144,503		144,503		—		144,503		—
Financial liabilities
Deposit liabilities, other than time deposits(e)	$	5,763,101	$	5,763,101	$	—	$	5,763,101	$	—
Time certificates of deposits(f)	649,152		647,038		—		647,038		$	—
Federal Home Loan Bank borrowings(f)	50,819		50,898		—		50,898		—
Customer repurchase agreements and other short-term borrowings(f)	176,913		176,913		—		—		176,913
Junior subordinated debentures(g)	73,107		72,510		—		72,510		—
Subordinated debentures(f)	34,635		34,241		—		—		34,241

					Fair Value Measurements at Reporting Date Using
	Book Value		Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	December 31, 2015
Financial assets	(Dollars in thousands)
Securities held to maturity(a)
U.S. Treasury securities	$	1,009	$	1,064	$	—	$	1,064	$	—
Agency mortgage-backed securities	167,134		170,375		—		170,375		—
Agency collateralized mortgage obligations	267,348		264,891		—		264,891		—
State, county, and municipal securities	225		227		—		227		—
Single issuer trust preferred securities issued by banks	1,500		1,522		—		1,522		—
Small business administration pooled securities	35,291		35,664		—		35,664		—
Corporate debt securities	5,000		5,006		—		5,006		—
Loans, net of allowance for loan losses(b)	5,487,298		5,417,425		—		—		5,417,425
Federal Home Loan Bank stock(c)	14,431		14,431		—		14,431		—
Cash surrender value of life insurance policies(d)	134,627		134,627		—		134,627		—
Financial liabilities
Deposit liabilities, other than time deposits(e)	$	5,305,873	$	5,305,873	$	—	$	5,305,873	$	—
Time certificates of deposits(f)	$	684,830	$	684,370	$	—	$	684,370	$	—
Federal Home Loan Bank borrowings(f)	102,080		102,396		—		102,396		—
Customer repurchase agreements and other short-term borrowings(f)	133,958		133,958		—		—		133,958
Junior subordinated debentures(g)	73,306		73,871		—		73,871		—
Subordinated debentures(f)	34,589		34,370		—		—		34,370

(a) The fair values presented are based on quoted market prices, where available. If quoted market prices are not available, fair values are based on quoted market prices of comparable instruments and/or discounted cash flow analysis.

(b) Fair value is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities or cash flows. Additionally, this amount excludes collateral dependent impaired loans, which are deemed to be marked to fair value on a nonrecurring basis.

(c) FHLB stock has no quoted market value and is carried at cost, therefore the carrying amount approximates fair value.

(d) Cash surrender value of life insurance is recorded at its cash surrender value (or the amount that can be realized upon surrender of the policy), therefore carrying amount approximates fair value.

(e) Fair value of demand deposits, savings and interest checking accounts and money market deposits is the amount payable on demand at the reporting date.

(f) Fair value was determined by discounting anticipated future cash payments using rates currently available for instruments with similar remaining maturities.

(g) Fair value was determined based upon market prices of securities with similar terms and maturities.

This summary excludes financial assets and liabilities for which the carrying value approximates fair value. For financial assets, these may include cash and due from banks, federal funds sold and short-term investments. For financial liabilities, these may include federal funds purchased. These instruments would all be considered to be classified as Level 1 within the fair value hierarchy. Also excluded from the summary are financial instruments measured at fair value on a recurring and nonrecurring basis, as previously described.

The Company considers its financial instruments' current use to be the highest and best use of the instruments.

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OTHER COMPREHENSIVE LOSS

12 Months Ended

Dec. 31, 2016

Equity [Abstract]

OTHER COMPREHENSIVE LOSS

OTHER COMPREHENSIVE INCOME (LOSS)

The following table presents a reconciliation of the changes in the components of other comprehensive income (loss) for the dates indicated, including the amount of income tax (expense) benefit allocated to each component of other comprehensive income (loss):

	December 31, 2016
	Pre Tax Amount			Tax (Expense) Benefit			After Tax Amount
	(Dollars in thousands)
Change in fair value of securities available for sale	$	(1,858	)	$	710		$	(1,148	)
Less: net security losses reclassified into other noninterest income (expense)	(26		)	11			(15		)
Net change in fair value of securities available for sale	(1,832		)	699			(1,133		)
Change in fair value of cash flow hedges	1,133			(453		)	680
Less: net cash flow hedge losses reclassified into interest on borrowings expense (1)	(2,520		)	1,030			(1,490		)
Net change in fair value of cash flow hedges	3,653			(1,483		)	2,170
Net unamortized loss related to defined benefit pension and other postretirement adjustments arising during the period	(383		)	157			(226		)
Amortization of net actuarial losses	238			(97		)	141
Amortization of net prior service cost	276			(113		)	163
Net change in other comprehensive income for defined benefit postretirement plans (2)	131			(53		)	78
Total other comprehensive income	$	1,952		$	(837	)	$	1,115
	Year Ended December 31, 2015
	Pre Tax Amount			Tax (Expense) Benefit			After Tax Amount
	(Dollars in thousands)
Change in fair value of securities available for sale	$	(3,757	)	$	1,434		$	(2,323	)
Less: net security losses reclassified into other noninterest income (expense)	(405		)	165			(240		)
Net change in fair value of securities available for sale	(3,352		)	1,269			(2,083		)
Change in fair value of cash flow hedges	(776		)	299			(477		)
Less: net cash flow hedge losses reclassified into interest on borrowings expense (1)	(2,828		)	1,152			(1,676		)
Net change in fair value of cash flow hedges	2,052			(853		)	1,199
Net unamortized gain related to defined benefit pension and other postretirement adjustments arising during the period	438			(193		)	245
Amortization of net actuarial losses	243			(99		)	144
Amortization of net prior service cost	294			(119		)	175
Net change in other comprehensive income for defined benefit postretirement plans (2)	975			(411		)	564
Total other comprehensive loss	$	(325	)	$	5		$	(320	)

	Year Ended December 31, 2014
	Pre Tax Amount			Tax (Expense) Benefit			After Tax Amount
	(Dollars in thousands)
Change in fair value of securities available for sale	$	9,095		$	(3,570	)	$	5,525
Less: net security losses reclassified into other noninterest income	191			(78		)	113
Net change in fair value of securities available for sale	8,904			(3,492		)	5,412
Change in fair value of cash flow hedges	(969		)	396			(573		)
Less: Net cash flow hedge losses reclassified into interest on borrowings expense (1)	(3,662		)	1,496			(2,166		)
Less: Loss on termination of hedge reclassified into noninterest expense	(1,122		)	459			(663		)
Net change in fair value of cash flow hedges	3,815			(1,559		)	2,256
Net unamortized loss related to defined benefit pension and other postretirement adjustments arising during the period	(2,699		)	1,103			(1,596		)
Net prior service costs related to plan amendment arising during the period	(1,357		)	554			(803		)
Amortization of net actuarial gains	(44		)	18			(26		)
Amortization of net prior service cost	102			(42		)	60
Amortization of net transition obligation	(2		)	1			(1		)
Net change in other comprehensive income for defined benefit postretirement plans (2)	(4,000		)	1,634			(2,366		)
Total other comprehensive income	$	8,719		$	(3,417	)	$	5,302

(1) Includes the amortization of the remaining balance of a realized but unrecognized gain, net of tax, from the termination of interest rate swaps in June 2009. The original gain of $1.4 million, net of tax, will be recognized in earnings through December 2018, the original maturity date of the swap. The balance of this gain had amortized to $281,000, $427,000, and $571,000 at December 31, 2016, 2015, and 2014, respectively.

(2) The amortization of prior service costs is included in the computation of net periodic pension costs as disclosed in Note 15 - Employee Benefit Plans.

Information on the Company's accumulated other comprehensive loss, net of tax, is comprised of the following components as of the periods indicated:

	Unrealized Gain on Securities			Unrealized Loss on Cash Flow Hedge			Deferred Gain on Hedge Transactions			Defined Benefit Postretirement Plans			Accumulated Other Comprehensive Income (Loss)
	(Dollars in Thousands)
Beginning balance: January 1, 2014	$	(2,023	)	$	(5,698	)	$	715		$	(428	)	$	(7,434	)
Net change in other comprehensive income (loss)	5,412			2,400			(144		)	(2,366		)	5,302
Ending balance: December 31, 2014	$	3,389		$	(3,298	)	$	571		$	(2,794	)	$	(2,132	)
Net change in other comprehensive income (loss)	(2,083		)	1,343			(144		)	564			(320		)
Ending balance: December 31, 2015	$	1,306		$	(1,955	)	$	427		$	(2,230	)	$	(2,452	)
Net change in other comprehensive income (loss)	(1,133		)	2,316			(146		)	78			1,115
Ending balance: December 31, 2016	$	173		$	361		$	281		$	(2,152	)	$	(1,337	)

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COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

Financial Instruments with Off-Balance Sheet Risk

In the normal course of business, the Company enters into various transactions to meet the financing needs of its customers, which, in accordance with GAAP, are not included in its consolidated balance sheets. These transactions include commitments to extend credit and standby letters of credit, which involve, to varying degrees, elements of credit risk and interest rate risk in excess of the amounts recognized in the consolidated balance sheets. The Company minimizes its exposure to loss under these commitments by subjecting them to credit approval and monitoring procedures.

The Company enters into contractual commitments to extend credit, normally with fixed expiration dates or termination clauses, at specified rates and for specific purposes. Substantially all of these commitments to extend credit are contingent upon customers maintaining specific credit standards at the time of loan funding.

Standby letters of credit are written conditional commitments issued to guarantee the performance of a customer to a third party. In the event the customer does not perform in accordance with the terms of the agreement with the third party, the Company would be required to fund the commitment. The maximum potential amount of future payments the Company could be required to make is represented by the contractual amount of the commitment. If the commitment were funded, the Company would be entitled to seek recovery from the customer. The Company’s policies generally require that standby letter of credit arrangements contain security and debt covenants similar to those contained in loan agreements.

The fees collected in connection with the issuance of standby letters of credit are representative of the fair value of its obligation undertaken in issuing the guarantee. In accordance with applicable accounting standards related to guarantees, fees collected in connection with the issuance of standby letters of credit are deferred. The fees are then recognized in income proportionately over the life of the standby letter of credit agreement. The deferred standby letter of credit fees represent the fair value of the Company's potential obligations under the standby letter of credit guarantees.

The following table summarizes the above financial instruments at the dates indicated:

	2016		2015
	(Dollars in thousands)
Commitments to extend credit	$	2,227,955	$	2,091,170
Standby letters of credit	$	18,190	$	17,962
Deferred standby letter of credit fees	$	108	$	72

Lease Commitments

The Company leases office space, space for ATM locations, and certain branch locations under noncancelable operating leases. The following is a schedule of minimum future lease payments under such leases as of December 31, 2016:

	(Dollars in thousands)
2017	$	9,287
2018	7,960
2019	7,291
2020	6,296
2021	5,000
Thereafter	8,213
Total future minimum lease commitments	$	44,047

Rent expense incurred under operating leases was approximately $8.5 million in 2016, $8.2 million in 2015, and $7.9 million in 2014. Renewal options ranging from 1-10 years exist for several of these leases.

Other Contingencies

At December 31, 2016, Rockland Trust was involved in pending lawsuits that arose in the ordinary course of business. Management has reviewed these pending lawsuits with legal counsel and has taken into consideration the view of counsel as to their outcome. In the opinion of management, the final disposition of pending lawsuits is not expected to have a material adverse effect on the Company’s financial position or results of operations.

The Bank is required to maintain certain reserve requirements of vault cash and/or deposits with the Federal Reserve Bank of Boston. The amount of this reserve requirement was $31.8 million and $21.7 million at December 31, 2016 and 2015, respectively.

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REGULATORY CAPITAL REQUIREMENTS

12 Months Ended

Dec. 31, 2016

Banking and Thrift [Abstract]

REGULATORY CAPITAL REQUIREMENTS

REGULATORY MATTERS

Regulatory Capital Requirements

The Company and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of the Company’s and the Bank’s assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios (set forth in the table below) of Total, Tier 1 Capital and Common Equity Tier 1 Capital (as defined for regulatory purposes) to risk weighted assets (as defined for regulatory purposes) and Tier 1 Capital to average assets (as defined for regulatory purposes). Management believes, as of December 31, 2016 and 2015, that the Company and the Bank met all capital adequacy requirements to which they are subject.

At December 31, 2016 the most recent notification from the Federal Deposit Insurance Corporation indicated that the Bank's capital levels met or exceeded the minimum levels to be considered "well capitalized" for bank regulatory purposes. To be categorized as well capitalized, an institution must maintain minimum total risk-based, Tier 1 risk-based, Common equity Tier 1 risk-based and Tier 1 leverage ratios as set forth in the following tables. There are no conditions or events since the notification that management believes have changed the Bank’s category. The Company’s and the Bank’s actual capital amounts and ratios as of December 31, 2016 and 2015 are also presented in the table that follows:

	Actual				For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio		Amount			Ratio		Amount			Ratio
	December 31, 2016
	(Dollars in thousands)
Independent Bank Corp.
Total capital (to risk weighted assets)	$	824,265	13.60	%	$	484,942	≥	8.0	%	N/A			N/A
Common equity tier 1 capital (to risk weighted assets)	$	656,080	10.82	%	$	272,780	≥	4.5	%	N/A			N/A
Tier 1 capital (to risk weighted assets)	$	727,070	11.99	%	$	363,706	≥	6.0	%	N/A			N/A
Tier 1 capital (to average assets)	$	727,070	9.77	%	$	297,748	≥	4.0	%	N/A			N/A
Rockland Trust Company
Total capital (to risk weighted assets)	$	788,320	13.01	%	$	484,834	≥	8.0	%	$	606,042	≥	10.0	%
Common equity tier 1 capital (to risk weighted assets)	$	725,760	11.98	%	$	272,719	≥	4.5	%	$	393,927	≥	6.5	%
Tier 1 capital (to risk weighted assets)	$	725,760	11.98	%	$	363,625	≥	6.0	%	$	484,834	≥	8.0	%
Tier 1 capital (to average assets)	$	725,760	9.76	%	$	297,589	≥	4.0	%	$	371,986	≥	5.0	%
	December 31, 2015
	(Dollars in thousands)
Independent Bank Corp.
Total capital (to risk weighted assets)	$	747,372	13.36	%	$	447,664	≥	8.0	%	N/A			N/A
Common equity tier 1 capital (to risk weighted assets)	$	584,378	10.44	%	$	251,811	≥	4.5	%	N/A			N/A
Tier 1 capital (to risk weighted assets)	$	655,154	11.71	%	$	335,748	≥	6.0	%	N/A			N/A
Tier 1 capital (to average assets)	$	655,154	9.33	%	$	280,889	≥	4.0	%	N/A			N/A
Rockland Trust Company
Total capital (to risk weighted assets)	$	718,197	12.84	%	$	447,334	≥	8.0	%	$	559,167	≥	10.0	%
Common equity tier 1 capital (to risk weighted assets)	$	660,979	11.82	%	$	251,625	≥	4.5	%	$	363,459	≥	6.5	%
Tier 1 capital (to risk weighted assets)	$	660,979	11.82	%	$	335,500	≥	6.0	%	$	447,334	≥	8.0	%
Tier 1 capital (to average assets)	$	660,979	9.42	%	$	280,653	≥	4.0	%	$	350,816	≥	5.0	%

In addition to the minimum risk-based capital requirements outlined in the table above, the Company is required to maintain a minimum capital conservation buffer, in the form of common equity, in order to avoid restrictions on capital distributions and discretionary bonuses. The required amount of the capital conservation buffer is being phased-in, beginning at 0.625% on January 1, 2016 and ultimately increasing to 2.5% on January 1, 2019. The Company's capital levels exceeded the fully phased-in buffer of 2.5% as of December 31, 2016.

Dividend Restrictions

In the ordinary course of business, the Company is dependent upon dividends from the Bank to provide funds for the payment of dividends to shareholders and to provide for other cash requirements. Banking regulations may limit the amount of dividends that may be paid. Approval by regulatory authorities is required if the effect of dividends declared would cause the regulatory capital of the Bank to fall below specified minimum levels. Approval is also required if dividends declared exceed the net profits for that year combined with the retained net profits for the preceding two years. Under the foregoing dividend restrictions and while maintaining its "well capitalized" status, dividends paid by the Bank to the Company for the year ended December 31, 2016 and 2015 totaled $44.5 million and $38.1 million, respectively.

Trust Preferred Securities

In accordance with the applicable accounting standard related to variable interest entities, the common stock of trusts which have issued trust preferred securities have not been included in the consolidated financial statements. At December 31, 2016 and 2015, $71.0 million in trust preferred securities have been included in the Tier 1 capital of the Company for regulatory reporting purposes pursuant to the Federal Reserve's capital adequacy guidelines.

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PARENT COMPANY FINANCIALS ONLY

12 Months Ended

Dec. 31, 2016

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

PARENT COMPANY FINANCIAL STATEMENTS

PARENT COMPANY FINANCIAL STATEMENTS

Condensed financial information relative to the Parent Company’s balance sheets at December 31, 2016 and 2015 and the related statements of income and cash flows for the years ended December 31, 2016, 2015, and 2014 are presented below. The statement of stockholders’ equity is not presented below as the parent company’s stockholders’ equity is that of the consolidated Company.

BALANCE SHEETS

	December 31
	2016		2015
	(Dollars in thousands)
Assets
Cash (1)	$	42,596	$	35,428
Investments in subsidiaries(2)	935,778		851,743
Prepaid income taxes	625		530
Deferred tax asset	216		2,229
Derivative instruments(1)	1,364		—
Total assets	$	980,579	$	889,930
Liabilities and stockholders’ equity
Dividends payable	$	7,834	$	6,824
Junior subordinated debentures	73,107		73,306
Subordinated debentures	34,635		34,589
Derivative instruments(1)	—		2,109
Other liabilities	313		1,639
Total liabilities	115,889		118,467
Stockholders’ equity	864,690		771,463
Total liabilities and stockholders’ equity	$	980,579	$	889,930

(1) Entire balance eliminates in consolidation.

(2) $933.6 million and $849.5 million eliminate in consolidation at December 31, 2016 and 2015, respectively.

STATEMENTS OF INCOME

	Years Ended December 31
	2016			2015			2014
	(Dollars in thousands)
Income
Dividends received from subsidiaries(1)	$	44,598		$	38,153		$	40,170
Interest income(2)	98			78			57
Total income	44,696			38,231			40,227
Expenses
Interest expense	5,901			5,769			4,225
Other expenses	—			29			—
Total expenses	5,901			5,798			4,225
Income before income taxes and equity in undistributed income of subsidiaries	38,795			32,433			36,002
Income tax benefit	(1,791		)	(2,301		)	(1,298		)
Income of parent company	40,586			34,734			37,300
Equity in undistributed income of subsidiaries	36,062			30,226			22,545
Net income	$	76,648		$	64,960		$	59,845

(1) Income of $62,000, $55,000 and $53,000 was not eliminated in consolidation for the years ended December 31, 2016, 2015, and 2014, respectively.

(2) Entire balance eliminated in consolidation.

STATEMENTS OF CASH FLOWS

	Years Ended December 31
	2016			2015			2014
	(Dollars in thousands)
Cash flows from operating activities
Net income	$	76,648		$	64,960		$	59,845
Adjustments to reconcile net income to cash provided by operating activities
Accretion	(154		)	(150		)	(194		)
Deferred income tax expense	678			3,266			293
Change in other assets	423			7,488			—
Change in other liabilities	(5,532		)	(254		)	(267		)
Equity in undistributed income of subsidiaries	(36,062		)	(30,226		)	(22,545		)
Net cash provided by operating activities	36,001			45,084			37,132
Cash flows used in investing activities
Cash paid for acquisitions, net of cash acquired (1)	(950		)	(51,680		)	—
Net cash used in investing activities	(950		)	(51,680		)	—
Cash flows provided by (used in) financing activities
Repayment of short-term borrowings	—			—			(5,000		)
Proceeds from issuance of subordinated debentures	—			—			35,000
Restricted stock awards issued, net of awards surrendered	(696		)	(657		)	(641		)
Net proceeds from exercise of stock options	201			1,367			2,333
Proceeds from shares issued under the direct stock purchase plan	2,323			2,695			1,555
Common dividends paid	(29,711		)	(26,172		)	(22,443		)
Net cash provided by (used in) financing activities	(27,883		)	(22,767		)	10,804
Net increase (decrease) in cash and cash equivalents	7,168			(29,363		)	47,936
Cash and cash equivalents at the beginning of the year	35,428			64,791			16,855
Cash and cash equivalents at the end of the year	$	42,596		$	35,428		$	64,791

(1) The majority of the net assets acquired at the parent company represented New England Bancorp Inc.'s investment in its wholly owned subsidiary, Bank of Cape Cod, which was eliminated in consolidation.

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SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

12 Months Ended

Dec. 31, 2016

Quarterly Financial Information Disclosure [Abstract]

SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

SELECTED QUARTELY FINANCIAL DATA (UNAUDITED)

	First Quarter					Second Quarter				Third Quarter				Fourth Quarter
	2016		2015			2016		2015		2016		2015		2016		2015
						(Dollars in thousands, except per share data)
Interest income	$	59,741	$	56,429		$	61,160	$	59,016	$	62,308	$	60,228	$	63,428	$	59,870
Interest expense	4,850		5,180			4,627		5,269		4,640		5,183		4,676		4,985
Net interest income	54,891		51,249			56,533		53,747		57,668		55,045		58,752		54,885
Provision (benefit) for loan losses	525		(500		)	600		700		950		800		4,000		500
Total noninterest income	19,155		16,557			21,095		20,261		20,416		19,247		21,762		19,824
Total noninterest expenses	46,482		54,977			47,146		48,644		46,857		47,031		51,637		46,486
Provision for income taxes	8,428		3,869			9,508		7,213		9,793		7,867		7,698		8,268
Net income	$	18,611	$	9,460		$	20,374	$	17,451	$	20,484	$	18,594	$	17,179	$	19,455
Basic earnings per share	$	0.71	$	0.38		$	0.77	$	0.67	$	0.78	$	0.71	$	0.64	$	0.74
Diluted earnings per share	$	0.71	$	0.38		$	0.77	$	0.67	$	0.78	$	0.71	$	0.64	$	0.74
Weighted average common shares (basic)	26,275,323		24,959,865			26,304,129		26,149,593		26,324,316		26,200,621		26,710,029		26,238,004
Common stock equivalents	43,409		80,215			47,885		71,819		53,072		63,493		60,022		52,772
Weighted average common shares (diluted)	26,318,732		25,040,080			26,352,014		26,221,412		26,377,388		26,264,114		26,770,051		26,290,776
Unusual or infrequently occurring items
Items within noninterest income
Gain on sale of fixed income securities	$	—	$	—		$	—	$	798	$	—	$	—	$	—	$	—
Total	$	—	$	—		$	—	$	798	$	—	$	—	$	—	$	—
Items within noninterest expense
Impairment on acquired facilities	$	—	$	—		$	—	$	109	$	—	$	—	$	—	$	—
Loss on extinguishment of debt	437		122			—		—		—		—		—		—
Loss on sale of fixed income securities	—		—			—		1,124		—		—		—		—
Merger and acquisition expense	334		10,230			206		271		151		—		4,764		—
Total	$	771	$	10,352		$	206	$	1,504	$	151	$	—	$	4,764	$	—

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TRANSACTIONS WITH RELATED PARTIES (Notes)

12 Months Ended

Dec. 31, 2016

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

TRANSACTIONS WITH RELATED PARTIES

Certain directors and officers (including their affiliates, certain family members and entities in which they are principal owners) of the Company are customers of and have had, and are expected to have, transactions with the Company, within the ordinary course of business.  These transactions include, but are not limited to, lending activities, deposit services, investment management, and property lease commitments.  In the opinion of management, such transactions are consistent with prudent banking practices and are within applicable banking regulations.  Further details relating to certain related party transactions are outlined below:

Lending Activities

The following information represents annual activity of loans to related parties for the periods indicated:

	2016			2015
	(Dollars in thousands)
Principal balance of loans outstanding at beginning of year	$	24,653		$	25,994
Loan advances	1,718			9,268
Loan payments/payoffs	(3,576		)	(10,609		)
Principal balance of loans outstanding at end of year	$	22,795		$	24,653

At December 31, 2016 and 2015 there were no loans to related parties which were past due, on nonaccrual status or that had been restructured as part of a troubled debt restructuring.

Deposits

At December 31, 2016 and 2015 the amount of deposit balances of related parties totaled $14.7 million and $13.9 million, respectively.

Lease Commitments

There were no leases with related parties during the years ended December 31, 2016 and 2015. Leases with related parties required rental payments of approximately $278,000 during the year ended December 31, 2014.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2016

Accounting Policies [Abstract]

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the Company, the Bank and other wholly-owned subsidiaries, except subsidiaries that are not deemed necessary to be consolidated. All significant intercompany balances and transactions have been eliminated in consolidation.

The Company determines whether it has a controlling financial interest in an entity by first evaluating whether the entity is a voting interest entity or a variable interest entity under GAAP. Voting interest entities are entities in which the total equity investment at risk is sufficient to enable the entity to finance itself independently and provides the equity holders with the obligation to absorb losses, the right to receive residual returns and the right to make decisions about the entity’s activities. The Company would consolidate voting interest entities in which it has all, or at least a majority of, the voting interest. As defined in applicable accounting standards, variable interest entities (“VIEs”) are entities that lack one or more of the characteristics of a voting interest entity. A controlling financial interest in a VIE is present when the Company has both the power and ability to direct the activities of the VIE that most significantly impact the VIE's economic performance and an obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. 

The Company also owns the common stock of various trusts which have issued trust preferred securities. These trusts are VIEs in which the Company is not the primary beneficiary and, therefore, are not consolidated. The trust's only assets are junior subordinated debentures issued by the Company, which were acquired by the trust using the proceeds from the issuance of the trust preferred securities and common stock. The junior subordinated debentures are included in long-term debt and the Company’s equity interest in the trust is included in other assets in the accompanying Consolidated Balance Sheets. Interest expense on the junior subordinated debentures is reported in interest expense on long-term debt in the accompanying Consolidated Statements of Income.

RECLASSIFICATION

Reclassification

Certain previously reported amounts have been reclassified to conform to the current year’s presentation.

USE OF ESTIMATES

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could vary from these estimates. Material estimates that are particularly susceptible to significant changes in the near-term relate to the determination of the allowance for loan losses, income taxes, valuation and potential impairment of investment securities, other-than-temporary impairment (“OTTI”) of certain investment securities, as well as valuation of goodwill and other intangibles and their respective analyses of impairment.

SIGNIFICANT CONCENTRATIONS OF CREDIT RISK

Significant Concentrations of Credit Risk

The vast majority of the Bank’s lending activities are conducted in the Commonwealth of Massachusetts and Rhode Island. The Bank originates commercial and industrial loans, commercial and residential real estate loans, including construction loans, small business loans, home equity loans, and other consumer loans for its portfolio. The Bank considers a concentration of credit to a particular industry to exist when the aggregate credit exposure which includes direct, indirect or contingent obligations to a borrower, an affiliated group of borrowers or a nonaffiliated group of borrowers engaged in one industry, exceeds 10% of the Bank’s loan portfolio.

Loans originated by the Bank to lessors of nonresidential buildings represented 15.4% and 15.0% of the total loan portfolio as of December 31, 2016 and 2015, respectively. Within this concentration category the Company believes it is well diversified among collateral property types and tenant industries.

CASH AND CASH EQUIVALENTS

Cash and Cash Equivalents

For purposes of reporting cash flows, cash and cash equivalents may include cash on hand, amounts due from banks, inclusive of interest-earning deposits held at banks, and federal funds sold. Generally, federal funds are sold for up to two week periods.

SECURITIES

Investment securities are classified at the time of purchase as “available for sale,” “held to maturity,” or “trading.” Classification is constantly re-evaluated for consistency with corporate goals and objectives. Trading securities are recorded at fair value with subsequent changes in fair value recorded in earnings. Debt securities that management has the positive intent and ability to hold to maturity are classified as “held to maturity” and recorded at amortized cost. Securities not classified as held to maturity or trading, including equity securities with readily determinable fair values, are classified as “available for sale” and recorded at fair value, with changes in fair value excluded from earnings and reported in other comprehensive income, net of related tax. Purchase premiums and discounts are recognized in interest income, using the interest method, to arrive at periodic interest income at a constant effective yield, thereby reflecting the securities market yield. Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method.

Declines in the fair value of held to maturity and available for sale securities below their amortized cost deemed to be OTTI are written down to fair value as determined by a cash flow analysis. To the extent the estimated cash flows do not support the amortized cost, the deficiency is considered to be due to credit loss and recognized in earnings. Unless the Company intends to sell the security, or if it is more likely than not that the Company will be required to sell the debt security before its anticipated recovery, the remainder of the OTTI charge is considered to be due to other factors, such as liquidity or interest rates, and thus is not recognized in earnings, but rather through other comprehensive income, net of related tax. The Company evaluates individual securities that have fair values below cost for six months or longer, or for a shorter period of time if considered appropriate by management, to determine if the decline in fair value is other-than-temporary. Consideration is given to the obligor of the security, whether the security is guaranteed, whether there is a projected adverse change in cash flows, the liquidity of the security, the type of security, the capital position of security issuers, and payment history of the security, amongst other factors when evaluating such securities.

LOANS HELD FOR SALE

Loans Held for Sale

The Bank primarily classifies new residential real estate mortgage loans as held for sale based on intent, which is determined when loans are underwritten. Residential real estate mortgage loans not designated as held for sale are retained based upon available liquidity, for interest rate risk management and other business purposes.

The Company has elected the fair value option to account for originated closed loans intended for sale. Accordingly, changes in fair value relating to loans intended for sale are recorded in earnings and are offset by changes in fair value relating to interest rate lock commitments and forward sales commitments. Gains and losses on residential loan sales (sales proceeds minus carrying amount) are recorded in mortgage banking income. Upfront costs and fees related to items for which the fair value option is elected are recognized in earnings as incurred and not deferred.

LOANS

Loans

Loans are carried at the principal amounts outstanding, or amortized acquired fair value in the case of acquired loans, adjusted by partial charge-offs and net of deferred loan costs or fees. For originated loans, loan fees and certain direct origination costs are deferred and amortized into interest income over the expected term of the loan using the level-yield method.  When a loan is paid off, the unamortized portion is recognized in interest income. Interest income on loans is accrued based upon the daily principal amount outstanding except for loans on nonaccrual status. For acquired loans which did not show signs of credit deterioration at acquisition, interest income is also accrued based upon the daily principal amount outstanding and is then further adjusted by the accretion of any discount or amortization of any premium associated with the loan.

 As a general rule, loans more than 90 days past due with respect to principal or interest are classified as nonaccrual loans, or sooner if management considers such action to be prudent. However, loans that are more than 90 days past due may be kept on an accruing status if the loan is well secured and/or in the process of collection. The Company may also put a junior lien mortgage on nonaccrual status as a result of delinquency with respect to the first position, which is held by another financial institution, while the junior lien is currently performing. Income accruals are suspended on all nonaccrual loans and all previously accrued and uncollected interest is reversed against current income. A loan remains on nonaccrual status until it becomes current with respect to principal and interest (and in certain instances remains current for up to six months), the loan is liquidated, or when the loan is determined to be uncollectible and is charged-off against the allowance for loan losses. When doubt exists as to the collectability of a loan, any payments received are applied to reduce the recorded investment in the asset to the extent necessary to eliminate such doubt. For all loan portfolios, a charge-off occurs when the Company determines that a specific loan, or portion thereof, is uncollectible.  This determination is made based on management's review of specific facts and circumstances of the individual loan, including assessing the viability of the customer’s business or project as a going concern, the expected cash flows to repay the loan, the value of the collateral and the ability and willingness of any guarantors to perform. 

In cases where a borrower experiences financial difficulties and the Company makes certain concessionary modifications to contractual terms, the loan is classified as a troubled debt restructuring (“TDR”). Modifications may include adjustments to interest rates, extensions of maturity, consumer loans where the borrower's obligations have been effectively discharged through Chapter 7 Bankruptcy and the borrower has not reaffirmed the debt to the Bank, and other actions intended to minimize economic loss and avoid foreclosure or repossession of collateral. The recorded investment of loans classified as TDRs is adjusted to reflect the changes in value, if any, resulting from the granting of a concession. Nonaccrual loans that are restructured remain on nonaccrual for a period of six months to demonstrate that the borrower can meet the restructured terms. If the restructured loan is on accrual status prior to being modified, it is reviewed to determine if the modified loan should remain on accrual status. If the borrower’s ability to meet the revised payment schedule is not reasonably assured, the loan is classified as a nonaccrual loan. Loans classified as TDRs remain classified as such for the life of the loan, except in limited circumstances, when it is determined that the borrower is performing under the modified terms and the restructuring agreement specified an interest rate greater than or equal to an acceptable market rate for a comparable new loan at the time of the restructuring

ACQUIRED LOANS

Acquired loans

All acquired loans are recorded at fair value with no carryover of the allowance for loan losses. At acquisition, loans are also reviewed to determine if the loan has evidence of deterioration in credit quality and to review if it is probable, at acquisition, that all contractually required payments will not be collected. Such loans are deemed to be purchased credit impaired ("PCI") loans. Under the accounting model for PCI loans, the excess of cash flows expected to be collected over the carrying amount of the loans, referred to as the "accretable yield", is accreted into interest income over the life of the loans using the effective yield method. Accordingly, PCI loans are not subject to classification as nonaccrual in the same manner as originated loans. Rather, acquired loans are generally considered to be accruing loans because their interest income relates to the accretable yield recognized and not to contractual interest payments at the loan level. The difference between contractually required principal and interest payments and the cash flows expected to be collected, referred to as the "nonaccretable difference", includes estimates of both the impact of prepayments and future credit losses expected to be incurred over the life of the loans.

The estimate of cash flows expected to be collected is regularly re-assessed subsequent to acquisition. These re-assessments involve updates, as necessary, of the key assumptions and estimates used in the initial estimate of fair value. Generally speaking, expected cash flows are affected by:

• Changes in the expected principal and interest payments over the estimated life - Changes in expected cash flows may be driven by the credit outlook and actions taken with borrowers. Changes in expected future cash flows resulting from loan modifications are included in the assessment of expected cash flows.

• Change in prepayment assumptions - Prepayments affect the estimated life of the loans, which may change the amount of interest income expected to be collected.

• Change in interest rate indices for variable rate loans - Expected future cash flows are based, as applicable, on the variable rates in effect at the time of the assessment of expected cash flows.

A decrease in expected cash flows in subsequent periods may indicate that the loan is impaired which would likely require the recognition of a charge-off against the allowance for loan losses or an establishment of a specific reserve. An increase in expected cash flows in subsequent periods serves, first, to reduce any previously established specific reserve by the increase in the present value of cash flows expected to be collected. Any increase above the previously established specific reserve results in a recalculation of the amount of accretable yield for the loan. The adjustment of accretable yield due to an increase in expected cash flows is accounted for as a change in estimate. The additional cash flows expected to be collected are reclassified from the nonaccretable difference to the accretable yield, and the amount of periodic accretion is adjusted accordingly over the remaining life of the loans.

A PCI loan may be resolved either through receipt of payment (in full or in part) from the borrower, the sale of the loan to a third party, or foreclosure of the collateral. In the event of a sale of the loan, a gain or loss on sale would be recognized and reported within noninterest income based on the difference between the sales proceeds and the carrying amount of the loan. For PCI loans accounted for on an individual loan basis and resolved directly with the borrower, any amount received from resolution in excess of the carrying amount of the loan is recognized and reported within interest income.

A refinancing or modification of a PCI loan accounted for individually is assessed to determine whether the modification represents a TDR. If the loan is considered to be a TDR, it will be included in the total impaired loans reported by the Company. The loan will continue to recognize interest income based upon the excess of cash flows expected to be collected over the carrying amount of the loan.

ALLOWANCE FOR LOAN LOSSES

Allowance for Loan Losses

The allowance for loan losses is established based upon the level of estimated probable losses in the current loan portfolio. Loan losses are charged against the allowance when management believes the collectability of a loan balance is doubtful. Subsequent recoveries, if any, are credited to the allowance.

The allowance for loan losses is allocated to loan types using both a formula-based approach applied to groups of loans and an analysis of certain individual loans for impairment. The formula-based approach emphasizes loss factors derived from actual historical portfolio loss rates, which are combined with an assessment of certain qualitative factors to determine the allowance amounts allocated to the various loan categories. Allowance amounts are determined based on an estimate of the historical average annual percentage rate of loan loss for each loan category, an estimate of the incurred loss emergence and confirmation period for each loan category, and certain qualitative risk factors considered in the computation of the allowance for loan losses.

The qualitative risk factors impacting the inherent risk of loss within the portfolio include the following:

• National and local economic and business conditions

• Level and trend of delinquencies

• Level and trend of charge-offs and recoveries

• Trends in volume and terms of loans

• Risk selection, lending policy and underwriting standards

• Experience and depth of management

• Banking industry conditions and other external factors

• Concentration risk

The formula-based approach evaluates groups of loans with common characteristics, which consist of similar loan types with similar terms and conditions, to determine the appropriate allocation within each portfolio section. This approach incorporates qualitative adjustments based upon management’s assessment of various market and portfolio specific risk factors into its formula-based estimate. Due to the imprecise nature of the loan loss estimation process and ever changing conditions, the qualitative risk attributes may not adequately capture amounts of incurred loss in the formula-based loan loss components used to determine the Bank’s analysis of the appropriateness of the allowance for loan losses.

The Bank evaluates certain loans within the commercial and industrial, commercial real estate, commercial construction and small business portfolios individually for specific impairment. A loan is considered impaired when, based on current information and events, it is probable that the Bank will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, contractual interest rates and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Loans are selected for evaluation based upon a change in internal risk rating, occurrence of delinquency, loan classification, troubled debt restructuring or nonaccrual status. A specific allowance amount is allocated to an individual loan when such loan has been deemed impaired and when the amount of the probable loss is able to be estimated. Estimates of loss may be determined by the present value of anticipated future cash flows, the loan’s observable fair market value, or the fair value of the collateral, if the loan is collateral dependent. However, for collateral dependent loans, the amount of the recorded investment in a loan that exceeds the fair value of the collateral less costs to sell is charged-off against the allowance for loan losses in lieu of an allocation of a specific allowance amount when such an amount has been identified definitively as uncollectible.

Large groups of small-balance homogeneous loans such as the residential real estate, residential construction, home equity and other consumer portfolios are collectively evaluated for impairment. As such, the Bank does not typically identify individual loans within these groupings as impaired loans for impairment evaluation and disclosure. However, the Bank evaluates all TDRs for impairment on an individual loan basis regardless of loan type.

In the ordinary course of business, the Bank enters into commitments to extend credit, commercial letters of credit, and standby letters of credit. Such financial instruments are recorded in the financial statements when they become payable. The credit risk associated with these commitments is evaluated in a manner similar to the allowance for loan losses. The reserve for unfunded lending commitments is included in other liabilities in the balance sheet. At December 31, 2016 and 2015, the reserve for unfunded loan commitments was $954,000 and $1.4 million, respectively.

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

Transfers and Servicing of Financial Assets

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

Loans held for sale are generally sold with servicing rights released, however if rights are retained, servicing assets are recognized as separate assets. Servicing rights are originally recorded at fair value within other assets, but subsequently are amortized in proportion to and over the period of estimated net servicing income, and are assessed for impairment at each reporting date. Fair value is based on market prices for comparable mortgage servicing contracts, when available, or alternatively, is based on a valuation model that calculates the present value of estimated future net servicing income. The valuation model incorporates assumptions that market participants would use in estimating future net servicing income, such as the cost to service, the discount rate, the custodial earnings rate, an inflation rate, ancillary income, prepayment speeds, default rates and losses. Impairment is determined by stratifying the rights based on predominant characteristics, such as interest rate, loan type and investor type. Impairment is recognized through a valuation allowance, to the extent that fair value is less than the capitalized amount. If the Company later determines that all or a portion of the impairment no longer exists, a reduction of the allowance may be recorded as an increase to income.

Servicing fee income is recorded for fees earned for servicing loans for investors. The fees are based on a contractual percentage of the outstanding principal or a fixed amount per loan, and are recorded as income when earned. The amortization of mortgage servicing rights is recorded as a reduction of loan servicing fee income.

FEDERAL HOME LOAN BANK STOCK

Federal Home Loan Bank Stock

The Company, as a member of the Federal Home Loan Bank (“FHLB”) of Boston, is required to maintain an investment in capital stock of the FHLB. Based on redemption provisions, the stock has no quoted market value and is carried at cost. The Company continually reviews its investment to determine if OTTI exists. The Company reviews recent public filings, rating agency analysis and other factors, when making its determination.

BANK PREMISES AND EQUIPMENT

Bank Premises and Equipment

Land is carried at cost. Bank premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line convention method over the estimated useful lives of the assets. Leasehold improvements are amortized over the shorter of the lease terms or the estimated useful lives of the improvements. Expected terms include lease option periods to the extent that the exercise of such options is reasonably assured, not to exceed fifteen years.

GOODWILL AND IDENTIABLE INTANGIBLE ASSETS

Goodwill and Other Intangible Assets

Goodwill represents the excess of the purchase price over the net fair value of acquired businesses and is not amortized. Goodwill is evaluated for impairment at least annually, or more often if warranted, using a combined qualitative and quantitative impairment approach. The initial qualitative approach assesses whether the existence of events or circumstances led to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events and circumstances, the Company determines it is more likely than not that the fair value is less than carrying value, the two step quantitative impairment test is performed. Step one of the quantitative impairment test compares book value to the fair value of the reporting unit. If step one is failed, a detailed step two analysis is performed, which involves measuring the excess of the fair value of the reporting unit, as determined in step one, over the aggregate fair value of the individual assets, liabilities, and identifiable intangibles as if the reporting unit was being acquired in a business combination.

Other intangible assets subject to amortization consist of core deposit intangibles, noncompete agreements, customer lists and market-based favorable or unfavorable lease positions at time of acquisition, and are amortized over the estimated lives of the intangibles using a method that approximates the amount of economic benefits that are realized by the Company. Other intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. The range of useful lives is as follows:

Core deposit intangibles	10 years
Noncompete agreements	1-3 years
Customer lists	10 years
Leases	7.5-29 years

The determination of which intangible assets have finite lives is subjective, as is the determination of the amortization period for such intangible assets.

IMPAIRMENT OF LONG-LIVED ASSETS OTHER THAN GOODWILL

Impairment of Long-Lived Assets Other Than Goodwill

The Company reviews long-lived assets, including premises and equipment, for impairment whenever events or changes in business circumstances indicate that the remaining useful life may warrant revision or that the carrying amount of the long-lived asset may not be fully recoverable. The Company performs undiscounted cash flow analysis to determine if impairment exists. If impairment is determined to exist, any related impairment loss is calculated based on fair value. Impairment losses on assets to be disposed of, if any, are based on the estimated proceeds to be received, less costs of disposal.

CASH SURRENDER VALUE OF LIFE INSURANCE POLICIES

Cash Surrender Value of Life Insurance Policies

Increases in the cash surrender value (“CSV”) of life insurance policies, as well as benefits received net of any CSV, are recorded in other noninterest income, and are not subject to income taxes. The CSV of the policies is recorded as an asset of the Bank, with liabilities recognized for any split dollar arrangements associated with the policies. The Company reviews the financial strength of the insurance carriers prior to the purchase of life insurance policies and no less than annually thereafter. Regulatory requirements limit the total amount of CSV to be held with any individual carrier to 15% of Tier 1 capital (as defined for regulatory purposes) and the total CSV of all life insurance policies is limited to 25% of Tier 1 capital.

OTHER REAL ESTATE OWNED AND OTHER FORECLOSED ASSETS

and Other Foreclosed Assets

Real estate properties and other assets, which have served as collateral to secure loans, are held for sale and are initially recorded at fair value less estimated costs to sell at the date control is established, resulting in a new cost basis. The amount by which the recorded investment in the loan exceeds the fair value (net of estimated costs to sell) of the foreclosed asset is charged to the allowance for loan losses. Subsequent declines in the fair value of the foreclosed asset below the new cost basis are recorded through the use of a valuation allowance. Subsequent increases in the fair value are recorded as reductions in the valuation allowance, but not below zero. Upon a sale of a foreclosed asset, any excess of the carrying value over the sale proceeds is recognized as a loss on sale. Any excess of sale proceeds over the carrying value of the foreclosed asset is first applied as a recovery to the valuation allowance, if any, with the remainder being recognized as a gain on sale. Operating expenses and changes in the valuation allowance relating to foreclosed assets are included in other noninterest expense.

Repurchase and Resale Agreements Policy [Policy Text Block]

Customer Repurchase Agreements

In a security repurchase agreement transaction, the Company will generally sell a security, agreeing to repurchase either the same or substantially identical security on a specified later date, at a greater price than the original sales price. The difference between the sale price and purchase price is the cost of the proceeds, which is recorded as interest expense. The securities underlying the agreements are delivered to counterparties as security for the repurchase obligations. Since the securities are treated as collateral and the agreement does not qualify for a full transfer of effective control, the transactions do not meet the criteria to be classified as a sale, and are therefore considered a secured borrowing transaction for accounting purposes.

DERIVATIVES

Derivatives

Derivative instruments are carried at fair value in the Company’s financial statements. The accounting for changes in the fair value of a derivative instrument is determined by whether it has been designated and qualifies as part of a hedging relationship, and further, by the type of hedging relationship. At the inception of a hedge, the Company documents certain items, including but not limited to the following: the relationship between hedging instruments and hedged items, the Company's risk management objectives, hedging strategies, and the evaluation of hedge transaction effectiveness. Documentation includes linking all derivatives designated as fair value or cash flow hedges to specific assets and liabilities on the balance sheet or to specific forecasted transactions.

For those derivative instruments that are designated and qualify for special hedge accounting, the Company designates the hedging instrument, based upon the exposure being hedged, as either a fair value hedge or a cash flow hedge. For derivative instruments that are designated and qualify as a cash flow hedge (i.e., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income, net of related tax, and reclassified into earnings in the same period or periods during which the hedged transactions affect earnings. The remaining gain or loss on the derivative instrument in excess of the cumulative change in the present value of future cash flows of the hedged item (i.e., the ineffective portion), if any, is recognized in current earnings during the period. For derivative instruments designated and qualifying as a fair value hedge (i.e., hedging the exposure to changes in the fair value of an asset or liability or an identified portion thereof that is attributable to the hedged risk), the gain or loss on the derivative instrument, as well as the offsetting gain or loss on the hedged item attributable to the hedged risk, are recognized in current earnings during the period of the change in fair values. Hedge accounting is discontinued prospectively when (1) a derivative is no longer highly effective in offsetting changes in the fair value or cash flow of a hedged item, (2) a derivative expires or is settled, (3) it is no longer likely that a forecasted transaction associated with the hedge will occur, or (4) it is determined that designation of a derivative as a hedge is no longer appropriate.

To the extent the Company enters into new or re-designates existing hedging relationships, it is the Company's policy to include the Overnight Index Swap Rate in the spectrum of available benchmark interest rates for hedge accounting.

For derivative instruments not designated as hedging instruments, such as loan level derivatives, foreign exchange contracts and mortgage derivatives, changes in fair value are recognized in other noninterest income during the period of change.

RETIREMENT PLANS

Retirement Plans

The Company has various retirement plans in place for current and former employees, including postretirement benefit plans, supplemental executive retirement plans, frozen multiemployer pension plans, deferred compensation plans as well as other benefits.

The postretirement benefit plans and the supplemental executive retirement plans are unfunded and therefore have no plan assets. The actuarial cost method used to compute the benefit liabilities and related expense is the projected unit credit method. The projected benefit obligation is principally determined based on the present value of the projected benefit distributions at an assumed discount rate. The discount rate which is utilized is based on the investment yield of high quality corporate bonds available in the market place with maturities approximately equal to projected cash flows of future benefit payments as of the measurement date. Periodic benefit expense (or income) includes service costs and interest costs based on the assumed discount rate, amortization of prior service costs due to plan amendments and amortization of actuarial gains and losses. The amortization of actuarial gains and losses is determined using the 10% corridor minimum amortization approach and is taken over the average remaining future working lifetime of the plan participants. The underfunded status of the plans is recorded as a liability on the balance sheet.

The multiemployer pension plans' assets are determined based on fair value, generally representing observable market prices. The actuarial cost method used to compute the pension liabilities and related expense is the unit credit method. The pension expense is equal to the plan contribution requirement of the Company for the plan year.

The Director Deferred Compensation and 401(k) Restoration plans allow directors and employees to invest their funds within a rabbi trust, including both Company stock and other investment alternatives offered by the plan. The plans do not permit diversification and therefore elections made to defer into Company stock result in both the investment and obligation recognized within Stockholders' Equity. Investments not in Company stock are included in Securities-Trading, with the correlating obligation classified as a liability.

The Company has obligations with various individuals related to certain post retirement benefits. The obligations are based on the individual's service through retirement, with the associated cost recognized over the requisite service period. The accrual methodology results in an accrued amount at the full eligibility date equal to the then present value of all of the future benefits expected to be paid.

STOCK-BASED COMPENSATION

Stock-Based Compensation

The Company recognizes stock-based compensation based on the grant-date fair value of the award adjusted for forfeitures. For restricted stock awards and units, the Company recognizes compensation expense ratably over the vesting period for the fair value of the award, measured at the grant date. For stock option awards, the Company values awards granted using the Black-Scholes option-pricing model. The Company recognizes compensation expense for these awards on a straight-line basis over the requisite service period for the entire award (straight-line attribution method), ensuring that the amount of compensation cost recognized at any date at least equals the portion of the grant-date fair value of the award that is vested at that time.

INCOME TAXES

Income Taxes

Deferred income tax assets and liabilities are determined using the asset and liability (or balance sheet) method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. If current available information raises doubt as to the realization of the deferred tax assets, a valuation allowance is established. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in enacted tax rates is recognized in income in the period that includes the enactment date. Income taxes are allocated to each entity in the consolidated group based on its share of taxable income. Management exercises significant judgment in evaluating the amount and timing of recognition of the resulting tax liabilities and assets, including projections of future taxable income. Additionally, a liability for unrecognized tax benefits is recorded for uncertain tax positions taken by the Company on its tax returns for which there is less than a 50% likelihood of being recognized upon a tax examination.

Tax credits generated from the New Markets Tax Credit program are reflected in earnings when realized for federal income tax purposes.

Low Income Housing Tax Credits Policy Text Block [Policy Text Block]

Low Income Housing Tax Credits

The Company accounts for its investments in qualified affordable housing projects using the proportional amortization method. Under the proportional amortization method the Company amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received, and recognizes the net investment benefit as a component of income tax expense (benefit).

ASSETS UNDER ADMININSTRATION

Assets Under Administration

Assets held in a fiduciary or agency capacity for customers are not included in the accompanying consolidated balance sheet, as such assets are not assets of the Company. Revenue from administrative and management activities associated with these assets is recorded on an accrual basis.

Extinguishment of Debt [Policy Text Block]

Extinguishment of Debt

Upon extinguishment of an outstanding debt, the Company records the difference between the exit price and the net carrying amount of the debt as a gain or loss on the extinguishment. The gain or loss is recorded as a component of other noninterest income or other noninterest expense, respectively.

EARNINGS PER SHARE

Earnings Per Share

Basic earnings per share is calculated using the two-class method. The two-class method is an earnings allocation formula under which earnings per share is calculated from common stock and participating securities according to dividends declared and participation rights in undistributed earnings. Under this method, all earnings distributed and undistributed, are allocated to participating securities and common shares based on their respective rights to receive dividends. Unvested share-based payment awards that contain nonforfeitable rights to dividends are considered participating securities (i.e. unvested time-vested restricted stock), not subject to performance based measures. Basic earnings per share is calculated by dividing net income by the weighted average number of common shares outstanding (inclusive of participating securities). Diluted earnings per share have been calculated in a manner similar to that of basic earnings per share except that the weighted average number of common shares outstanding is increased to include the number of additional common shares that would have been outstanding if all potentially dilutive common shares (such as those resulting from the exercise of stock options or the attainment of performance measures) were issued during the period, computed using the treasury stock method.

COMPREHENSIVE INCOME

Comprehensive Income

Comprehensive income consists of net income and other comprehensive income. Other comprehensive income includes unrealized gains and losses on securities available for sale, unrealized losses related to factors other than credit on debt securities, if applicable, unrealized gains and losses on cash flow hedges, deferred gains on hedge accounting transactions, and changes in the funded status of the Company’s postretirement and supplemental retirement plans.

FAIR VALUE MEASUREMENTS

Fair Value Measurements

In general, fair values of financial instruments are based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon developed models that primarily use, as inputs, observable market-based parameters. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. These adjustments may include amounts to reflect counterparty credit quality and the Company’s creditworthiness, among other things, as well as unobservable parameters.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Standards    

Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Financial Account Standards Board Topic 805 "Business Combinations" Updated No. 2017-01. Update No. 2017-01 was issued in January of 2017 to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill and consolidation. The amendments in this update are effective for annual periods and interim periods within those annual periods beginning after December 15, 2017. Earlier adoption is permitted, including interim reporting periods within that reporting period. The adoption of this standard is not expected to have a material impact on the Company's consolidated financial position.

FASB ASC Topic 606 "Revenue from Contracts with Customers" Update No. 2014-09. Update No. 2014-09 was issued in May 2014 to address the previous revenue recognition requirements in GAAP that differ from those in International Financial Reporting Standards (IFRS).  Accordingly, the FASB and the International Accounting Standards Board (IASB) initiated a joint project to clarify the principles for recognizing revenue and to develop a common revenue standard for U.S. GAAP and IFRS. The largely converged revenue recognition standards will supersede virtually all revenue recognition guidance in GAAP and IFRS. The core principle of the guidance is that an entity should 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. Since the issuance of Update 2014-09, the FASB has finalized various amendments to the standard as summarized below:

FASB ASC Topic 606 "Revenue from Contracts with Customers" Update No. 2016-20

FASB ASC Topic 606 "Revenue from Contracts with Customers" Update No. 2016-12

FASB ASC Topic 606 "Revenue from Contracts with Customers" Update No. 2016-10

FASB ASC Topic 606 "Revenue from Contracts with Customers" Update No. 2016-08.

FASB ASC Topic 606 "Revenue from Contracts with Customers" Update No. 2015-14.

The amendments in Update 2016-20 make minor corrections or minor improvements to the codification that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities.

Through Updates 2016-12, 2016-10 and 2016-08, the FASB amended its new revenue guidance on licenses of intellectual property, identification of performance obligations, collectability, noncash consideration and the presentation of sales and other similar taxes. The FASB also clarified the definition of a completed contract at transition and added a practical expedient to ease transition for contracts that were modified prior to adoption. The FASB also amended the new revenue recognition guidance on determining whether an entity is a principal or an agent in an arrangement which affects whether revenue should be reported gross or net.

Following the issuance of Update 2015-14, Update 2014-09, as amended, is effective for the Company for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier adoption is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. A full or modified retrospective transition method is required. The Company's revenue is comprised of net interest income on financial assets and liabilities, which is explicitly excluded from the scope of the new guidance, and noninterest income. The Company plans to adopt the revenue recognition guidance in the first quarter of 2018 and is currently evaluating the potential impact on noninterest income on the Company's consolidated financial position, other presentation and disclosure issues. Additionally, the Company anticipates using the modified retrospective transition method upon adoption.

FASB ASC Topic 740 "Income Taxes" Update No. 2016-16. Update No. 2016-16 was issued in October 2016 and the amendments in this update require that entities recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The amendments is this update do not change GAAP for the pre-tax effects of an intra-entity asset transfer under Topic 810, Consolidation, or for an intra-entity transfer of inventory. The amendments in this update are effective for annual periods and interim periods within those annual periods beginning after December 31, 2017. Earlier adoption is permitted, including interim reporting periods within that reporting period. The adoption of this standard is not expected to have a material impact on the Company's consolidated financial position.

FASB ASC Topic 230 "Statement of Cash Flows" Update No. 2016-15. Update No. 2016-15 was issued in August 2016 to reduce diversity of practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments in this update provide guidance on the following eight specific cash flow issues; (1) debt prepayment or debt extinguishment costs, (2) settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing, (3) contingent consideration payments made after a business combination, (4) proceeds from the settlement of insurance claims, (5) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies, (6) distributions received from equity method investees, (7) beneficial interests in securitization transactions, and (8) separately identifiable cash flows and application of the predominance principle. The amendments in this topic will provide guidance for these eight issues, thereby reducing the current and potential future diversity in practice. The amendments in this update are effective for annual periods and interim periods within those annual periods beginning after December 31, 2017. Earlier adoption is permitted, including interim reporting periods within that reporting period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. The adoption of this standard is not expected to have a material impact on the Company's consolidated financial position.

FASB ASC Topic 326 "Financial Instruments - Credit Losses" Update No. 2016-13. Update No. 2016-13 was issued in June 2016 to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in this update replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendments affect entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off-balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The amendments in this update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with earlier adoption permitted as of fiscal years beginning after December 15, 2018, including interim periods with those fiscal years. The Company is currently assessing the impact of the adoption of this standard on the Company's consolidated financial position.

FASB ASC Topic 605 "Revenue Recognition" and Topic 815 "Derivatives and Hedging" Update No. 2016-11. Update No. 2016-11 was issued in May 2016 and is a rescission of SEC guidance because of ASU Updates 2014-09 and 2014-16 pursuant to staff announcements at the March 3, 2016 Emerging Issues Task Force meeting. The amendments in this update are effective upon adoption of Topic 606 "Revenue from Contracts with Customers." The Company is currently assessing the impact of the adoption of this standard on the Company's consolidated financial position.

FASB ASC Topic 718 "Compensation - Stock Compensation" Update No. 2016-09. Update No. 2016-09 was issued in March 2016 and affects all entities that issue share-based awards to their employees. This update was issued as part of the FASB’s simplification initiative. The areas for simplification in this update involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The amendments in this update are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company has adopted the standard effective January 1, 2017, which will require a cumulative effect adjustment to retained earnings, the impact of which did not have a material affect on the Company's consolidated financial position.    

FASB ASC Topic 323 "Investments -Equity Method and Joint Ventures" Update No. 2016-07. Update No. 2016-07 was issued in March 2016 and eliminates the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods that the investment had been held. The amendments require that the equity method investor add the cost of acquiring the additional interest in the investees to the current basis of the investor's previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. Therefore, upon qualifying for the equity method of accounting, no retroactive adjustment of the investment is required. The amendments in this update require that an entity that has an available-for-sale equity security that becomes qualified for the equity method of accounting recognize through earnings the unrealized holding gain or loss in accumulated other comprehensive income at the date the investment becomes qualified for use of the equity method. The amendments in this update are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The amendments should be applied prospectively upon their effective date to increases in the level of ownership interest or degree of influence that result in the adoption of the equity method. Early adoption is permitted. Upon adoption of this standard on January 1, 2017, there was no material impact on the Company's consolidated financial position.

FASB ASC Topic 815 "Derivative and Hedging - Contingent Put and Call Options in Debt Instruments" Update No. 2016-06. Update No. 2016-06 was issued in March 2016 to clarify the requirements for assessing whether contingent call (put) options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt hosts. An entity performing the assessment under the amendments in this update is required to assess the embedded call (put) options solely in accordance with the four-step decision sequence. For public entities, the amendments in this update are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. An entity has an option to apply the amendments in this update on either a prospective basis or a modified retrospective basis. Early adoption is permitted, including adoption in an interim period. Upon adoption of this standard on January 1, 2017, there was no material impact on the Company's consolidated financial position.

FASB ASC Topic 815 "Derivative and Hedging - Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships" Update No. 2016-05. Update No. 2016-05 was issued in March 2016 and applies to all reporting entities for which there is a change in the counterparty to a derivative instrument that has been designated as a hedging instrument under Topic 815. The amendments in this update clarify that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument under Topic 815 does not, in and of itself, require de-designation of that hedging relationship provided that all other hedge accounting criteria (including those in paragraphs 815-20-35-14 through 35-18) continue to be met. For public entities, the amendments in this update are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. An entity has an option to apply the amendments in this update on either a prospective basis or a modified retrospective basis. Early adoption is permitted, including adoption in an interim period. Upon adoption of this standard on January 1, 2017, there was no material impact on the Company's consolidated financial position.

FASB ASC Topic 842 "Leases" Update No. 2016-02. Update No. 2016-02 was issued in February 2016 and affects any entity that enters into a lease (as that term is defined in this update), with some specified scope exemptions. The core principle of this update is that a lessee should recognize in the statement of financial position a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. The recognition, measurement, and presentation of expenses and cash flows arising from a lease have not significantly changed from previous GAAP. In addition, the accounting applied by a lessor is largely unchanged from that applied under previous GAAP. For public companies, the amendments in this update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently assessing the impact of the adoption of this standard on the Company's consolidated financial position.    

FASB ASC Topic 825-10 "Financial Instruments - Overall Recognition and Measurement of Financial Assets and Financial Liabilities" Update No. 2016-01. Update No. 2016-01 was issued in January 2016 to amend the guidance in U.S. GAAP on the classification and measurement of financial instruments. Although the update retains many current requirements, it significantly revises an entity's accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. The update also amends certain disclosure requirements associated with the fair value of financial instruments and various other aspects of recognition, measurement, presentation and disclosure of financial instruments. For public entities, the amendments in this update are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted for only certain guidance. The Company is currently assessing the impact of the adoption of this standard on the Company's consolidated financial position.

FASB ASC Subtopic 835-30 "Interest - Imputation of Interest" Update No. 2015-03. Update No. 2015-03 was issued in April 2015 to simplify presentation of debt issuance costs. The amendments in this update require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuances costs are not affected by the amendments in this update. The amendments in this update were adopted by the Company effective January 1, 2016, with applicable prior period presentation updated for the reclassification of $501,000 and $568,000 of debt issuance costs from other assets to borrowings at December 31, 2016 and 2015, respectively. The adoption of this standard did not have a material impact on the Company's consolidated financial position.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2016

Accounting Policies [Abstract]

Schedule of Finite-Lived Intangible Asses Useful Lives

The range of useful lives is as follows:

Core deposit intangibles	10 years
Noncompete agreements	1-3 years
Customer lists	10 years
Leases	7.5-29 years

The determination of which intangible assets have finite lives is subjective, as is the determination of the amortization period for such intangible assets.

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ACQUISITIONS (Tables)

12 Months Ended

Dec. 31, 2016

Business Acquisition [Line Items]

Schedule of Estimated Fair Value of Assets Acquired and Liabilities Assumed

The following table summarizes the estimated fair value of the assets acquired and liabilities assumed as of the date of the Peoples acquisition:

	Net Assets Acquired at Fair Value
	(Dollars in thousands)
Assets
Cash	$	41,957
Investments	43,585
Loans	463,927
Premises and equipment	9,346
Goodwill	30,662
Core deposit and other intangibles	3,936
Other assets	46,920
Total assets acquired	640,333
Liabilities
Deposits	432,250
Borrowings	51,209
Other liabilities	15,054
Total liabilities assumed	498,513
Purchase price	$	141,820

The following table summarizes the estimated fair value of the assets acquired and liabilities assumed as of the date of the acquisition:

	Net Assets Acquired at Fair Value
	(Dollars in thousands)
Assets
Cash	$	9,679
Loans	225,731
Premises and equipment	201
Goodwill	20,443
Core deposit and other intangibles	670
Other assets	19,197
Total assets acquired	275,921
Liabilities
Deposits	175,686
Borrowings	51,150
Other liabilities	7,344
Total liabilities assumed	234,180
Purchase price	$	41,741

Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Table Text Block]

The following is a summary of these PCI loans associated with the acquisition as of the date acquired:

	As of February 20, 2015
	(Dollars in thousands)
Contractually required principal and interest at acquisition	$	4,358
Contractual cash flows not expected to be collected	(1,596		)
Expected cash flows at acquisition	2,762
Interest component of expected cash flows	(319		)
Basis in PCI loans at acquisition - estimated fair value	$	2,443

Business Acquisition, Pro Forma Information [Table Text Block]

The selected pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of the financial results of the combined companies had the acquisition actually been completed at the beginning of the periods presented, nor does it indicate future results for any other interim or full-year period.

	Years Ended December 31
	2016		2015
	(Dollars in thousands)
Net interest income after provision for loan losses	$	228,927	$	221,252
Net income	$	80,411	$	65,623

The selected pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of the financial results of the combined companies had the acquisition actually been completed at the beginning of the periods presented, nor does it indicate future results for any other interim or full-year period.

	Years Ended December 31
	2015		2014
	(Dollars in thousands)
Net interest income after provision for loan losses	$	216,086	$	203,296
Net income	$	69,816	$	60,896

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SECURITIES (Tables)

12 Months Ended

Dec. 31, 2016

Investments, Debt and Equity Securities [Abstract]

Schedule of Available-for-sale Securities and Held-to-maturity Securties

The following table presents a summary of the amortized cost, gross unrealized holding gains and losses and fair value of securities available for sale and securities held to maturity for the periods indicated:

	December 31, 2016									December 31, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(Dollars in thousands)
Available for sale securities
U.S. government agency securities	$	24,006	$	238	$	—		$	24,244	$	29,958	$	261	$	(4	)	$	30,215
Agency mortgage-backed securities	173,268		2,852		(736		)	175,384		207,693		4,227		(983		)	210,937
Agency collateralized mortgage obligations	101,094		106		(1,332		)	99,868		64,157		179		(752		)	63,584
State, county, and municipal securities	3,743		50		—			3,793		4,543		116		—			4,659
Single issuer trust preferred securities issued by banks	2,311		3		(3		)	2,311		2,865		8		(81		)	2,792
Pooled trust preferred securities issued by banks and insurers	2,200		—		(616		)	1,584		2,217		—		(645		)	1,572
Small business administration pooled securities	37,561		—		(372		)	37,189		40,472		87		(110		)	40,449
Equity securities	19,183		641		(553		)	19,271		13,235		374		(568		)	13,041
Total available for sale securities	363,366		3,890		(3,612		)	363,644		365,140		5,252		(3,143		)	367,249
Held to maturity securities
U.S. treasury securities	1,007		47		—			1,054		1,009		55		—			1,064
Agency mortgage-backed securities	156,088		2,274		(858		)	157,504		167,134		3,460		(219		)	170,375
Agency collateralized mortgage obligations	297,445		1,002		(3,797		)	294,650		267,348		1,195		(3,652		)	264,891
State, county, and municipal securities	—		—		—			—		225		2		—			227
Single issuer trust preferred securities issued by banks	1,500		44		—			1,544		1,500		22		—			1,522
Small business administration pooled securities	31,036		189		(327		)	30,898		35,291		437		(64		)	35,664
Corporate debt securities	—		—		—			—		5,000		6		—			5,006
Total held to maturity securities	487,076		3,556		(4,982		)	485,650		477,507		5,177		(3,935		)	478,749
Total	$	850,442	$	7,446	$	(8,594	)	$	849,294	$	842,647	$	10,429	$	(7,078	)	$	845,998

Schedule of Contractual Maturities of Securities

A schedule of the contractual maturities of securities available for sale and securities held to maturity as of December 31, 2016 is presented below:

	Available for Sale				Held to Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(Dollars in thousands)
Due in one year or less	$	999	$	1,001	$	1	$	1
Due after one year to five years	29,144		29,419		16,007		16,228
Due after five to ten years	97,144		97,421		22,664		23,309
Due after ten years	216,896		216,532		448,404		446,112
Total debt securities	344,183		344,373		487,076		485,650
Equity securities	19,183		19,271		—		—
Total	$	363,366	$	363,644	$	487,076	$	485,650

Schedule of Gross Unrealized Losses and Fair Value of Investments

The following tables show the gross unrealized losses and fair value of the Company’s investments in an unrealized loss position, which the Company has not deemed to be OTTI, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:

		December 31, 2016
		Less than 12 months					12 months or longer					Total
Description of securities	# of holdings	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
		(Dollars in thousands)
Agency mortgage-backed securities	57	$	137,949	$	(1,594	)	$	—	$	—		$	137,949	$	(1,594	)
Agency collateralized mortgage obligations	32	243,051		(3,140		)	47,403		(1,989		)	290,454		(5,129		)
Single issuer trust preferred securities issued by banks and insurers	1	—		—			1,036		(3		)	1,036		(3		)
Pooled trust preferred securities issued by banks and insurers	1	—		—			1,583		(616		)	1,583		(616		)
Small business administration pooled securities	5	59,846		(699		)	—		—			59,846		(699		)
Equity securities	25	3,625		(77		)	6,334		(476		)	9,959		(553		)
Total temporarily impaired securities	121	$	444,471	$	(5,510	)	$	56,356	$	(3,084	)	$	500,827	$	(8,594	)
		December 31, 2015
		Less than 12 months					12 months or longer					Total
Description of securities	# of holdings	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
		(Dollars in thousands)
U.S.government agency securities	3	$	1,990	$	(4	)	$	—	$	—		$	1,990	$	(4	)
Agency mortgage-backed securities	57	112,648		(1,062		)	4,297		(140		)	116,945		(1,202		)
Agency collateralized mortgage obligations	23	147,707		(1,420		)	80,927		(2,984		)	228,634		(4,404		)
Single issuer trust preferred securities issued by banks and insurers	2	1,018		(33		)	1,018		(48		)	2,036		(81		)
Pooled trust preferred securities issued by banks and insurers	1	—		—			1,572		(645		)	1,572		(645		)
Small business administration pooled securities	3	37,986		(174		)	—		—			37,986		(174		)
Equity securities	34	3,481		(189		)	4,971		(379		)	8,452		(568		)
Total temporarily impaired securities	123	$	304,830	$	(2,882	)	$	92,785	$	(4,196	)	$	397,615	$	(7,078	)

Schedule of Other Than Temporary Impairment

The following table shows the total OTTI that the Company recorded for the periods indicated:

	Years Ended December 31
	2016		2015		2014
	(Dollars in thousands)
Gross change in OTTI recorded on certain investments	$	—	$	—	$	2,098
Portion of OTTI recognized in OCI	—		—		(2,098		)
Total credit related OTTI recognized in earnings	$	—	$	—	$	—

Summary of Cumulative Credit Related Component of OTTI

The following table shows the cumulative credit related component of OTTI for the periods indicated:

	Years Ended December 31
	2016		2015			2014
	(Dollars in thousands)
Balance at beginning of period	$	—	$	(9,997	)	$	(9,997	)
Add
Incurred on securities not previously impaired	—		—			—
Incurred on securities previously impaired	—		—			—
Less
Securities sold during the period	—		9,997			—
Reclassification due to changes in Company’s intent	—		—			—
Increases in cash flow expected to be collected	—		—			—
Balance at end of period	$	—	$	—		$	(9,997	)

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LOANS, ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY (Tables)

12 Months Ended

Dec. 31, 2016

Loans, Allowance for Loan Losses and Credit Quality [Abstract]

Schedule of Allowance for Loan Losses

The following table summarizes changes in the allowance for loan losses by loan category and bifurcates the amount of allowance allocated to each loan category based on collective impairment analysis and loans evaluated individually for impairment:

	December 31, 2016
	Commercial and Industrial			Commercial Real Estate			Commercial Construction			Small Business			Residential Real Estate			Home Equity			Other Consumer			Total
	(Dollars in thousands)
Allowance for loan losses
Beginning balance	$	13,802		$	27,327		$	5,366		$	1,264		$	2,590		$	4,889		$	587		$	55,825
Charge-offs	(593		)	(414		)	—			(228		)	(28		)	(602		)	(1,607		)	(3,472		)
Recoveries	859			564			—			195			299			141			1,080			3,138
Provision (benefit)	2,853			2,892			(844		)	271			(240		)	810			333			6,075
Ending balance	$	16,921		$	30,369		$	4,522		$	1,502		$	2,621		$	5,238		$	393		$	61,566
Ending balance: collectively evaluated for impairment	$	13,260		$	30,173		$	4,522		$	1,494		$	1,535		$	4,996		$	372		$	56,352
Ending balance: individually evaluated for impairment	$	3,661		$	196		$	—		$	8		$	1,086		$	242		$	21		$	5,214
Financing receivables ending balance:
Collectively evaluated for impairment	$	862,875		$	2,983,642		$	320,391		$	121,855		$	622,392		$	982,095		$	10,666		$	5,903,916
Individually evaluated for impairment	39,178			16,813			—			871			14,175			5,863			397			77,297
Purchased credit impaired loans	—			10,343			—			—			7,859			189			1			18,392
Total loans by group	$	902,053		$	3,010,798		$	320,391		$	122,726		$	644,426		$	988,147		$	11,064		$	5,999,605		(1)
	December 31, 2015
	Commercial and Industrial			Commercial Real Estate			Commercial Construction			Small Business			Residential Real Estate			Home Equity			Other Consumer			Total
	(Dollars in thousands)
Allowance for loan losses
Beginning balance	$	15,573		$	25,873		$	3,945		$	1,171		$	2,834		$	4,956		$	748		$	55,100
Charge-offs	(2,010		)	(330		)	—			(267		)	(285		)	(710		)	(1,316		)	(4,918		)
Recoveries	1,593			1,073			—			264			133			356			724			4,143
Provision (benefit)	$	(1,354	)	$	711		$	1,421		$	96		$	(92	)	$	287		$	431		$	1,500
Ending balance	$	13,802		$	27,327		$	5,366		$	1,264		$	2,590		$	4,889		$	587		$	55,825
Ending balance: collectively evaluated for impairment	$	13,619		$	27,123		$	5,366		$	1,260		$	1,312		$	4,651		$	564		$	53,895
Ending balance: individually evaluated for impairment	$	183		$	204		$	—		$	4		$	1,278		$	238		$	23		$	1,930
Financing receivables ending balance:
Collectively evaluated for impairment	$	838,129		$	2,619,294		$	373,064		$	95,225		$	614,014		$	921,563		$	14,427		$	5,475,716
Individually evaluated for impairment	5,147			22,986			304			1,021			15,405			5,989			558			51,410
Purchased credit impaired loans	—			11,154			—			—			9,187			251			3			20,595
Total loans by group	$	843,276		$	2,653,434		$	373,368		$	96,246		$	638,606		$	927,803		$	14,988		$	5,547,721		(1)

	December 31, 2014
	Commercial and Industrial			Commercial Real Estate			Commercial Construction		Small Business			Residential Real Estate			Home Equity			Other Consumer			Total
	(Dollars in thousands)
Allowance for loan losses
Beginning balance	$	15,622		$	24,541		$	3,371	$	1,215		$	2,760		$	5,036		$	694		$	53,239
Charge-offs	(2,097		)	(5,454		)	—		(605		)	(826		)	(750		)	(1,215		)	(10,947		)
Recoveries	462			404			—		275			424			249			591			2,405
Provision	1,586			6,382			574		286			476			421			678			10,403
Ending balance	$	15,573		$	25,873		$	3,945	$	1,171		$	2,834		$	4,956		$	748		$	55,100
Ending balance: individually evaluated for impairment	$	412		$	197		$	—	$	7		$	1,500		$	262		$	38		$	2,416
Ending balance: collectively evaluated for impairment	$	15,161		$	25,676		$	3,945	$	1,164		$	1,334		$	4,694		$	710		$	52,684
Financing receivables ending balance:
Collectively evaluated for impairment	$	856,185		$	2,304,099		$	265,501	$	84,159		$	505,799		$	858,305		$	16,335		$	4,890,383
Individually evaluated for impairment	4,654			30,729			311		1,088			15,055			5,330			868			58,035
Purchase credit impaired loans	—			12,495			182		—			9,405			228			5			22,315
Total loans by group	$	860,839		$	2,347,323		$	265,994	$	85,247		$	530,259		$	863,863		$	17,208		$	4,970,733		(1)

(1) The amount of net deferred costs on originated loans included in the ending balance was $5.1 million, $4.3 million, and $2.8 million at December 31, 2016, 2015, and 2014, respectively. Net unamortized discounts on acquired loans not deemed to be PCI included in the ending balance was $8.6 million, $6.6 million, and $1.9 million at December 31, 2016, 2015, and 2014, respectively.

Schedule of Internal Risk-Rating Categories for the Company's Commercial Portfolio

The following table details the amount of outstanding principal balances relative to each of the risk-rating categories for the Company’s commercial portfolio:

		December 31, 2016
Category	Risk Rating	Commercial and Industrial		Commercial Real Estate		Commercial Construction		Small Business		Total
		(Dollars in thousands)
Pass	1 - 6	$	783,825	$	2,876,570	$	317,099	$	120,304	$	4,097,798
Potential weakness	7	46,176		84,641		1,363		1,859		134,039
Definite weakness - loss unlikely	8	71,991		47,164		1,929		556		121,640
Partial loss probable	9	61		2,423		—		7		2,491
Definite loss	10	—		—		—		—		—
Total		$	902,053	$	3,010,798	$	320,391	$	122,726	$	4,355,968
		December 31, 2015
Category	Risk Rating	Commercial and Industrial		Commercial Real Estate		Commercial Construction		Small Business		Total
		(Dollars in thousands)
Pass	1 - 6	$	765,753	$	2,484,025	$	363,781	$	93,008	$	3,706,567
Potential weakness	7	54,375		112,022		7,678		2,444		176,519
Definite weakness - loss unlikely	8	23,073		56,276		1,909		732		81,990
Partial loss probable	9	75		1,111		—		62		1,248
Definite loss	10	—		—		—		—		—
Total		$	843,276	$	2,653,434	$	373,368	$	96,246	$	3,966,324

Schedule of Weighted Average FICO Scores and Weighted Average Combined LTV Ratio

The following table shows the weighted average FICO scores and the weighted average combined LTV ratios as of the periods indicated below:

	December 31
	2016		2015
Residential portfolio
FICO score (re-scored)(1)	743		742
LTV (re-valued)(2)	63.2	%	61.4	%
Home equity portfolio
FICO score (re-scored)(1)	767		765
LTV (re-valued)(2)	55.9	%	55.8	%

(1) The average FICO scores above are based upon rescores available from November and origination score data for loans booked between December 1 and December 31, for the years indicated.

(2) The combined LTV ratios for December 31, 2016 and 2015 are based upon updated automated valuations as of March 31, 2015 and original valuation data for loans booked from April 1, 2015 through the dates indicated. For home equity loans and lines in a subordinate lien, the LTV data represents a combined LTV, taking into account the senior lien data for loans and lines.

Schedule of Nonaccrual Loans

The following table shows nonaccrual loans at the dates indicated:

	December 31
	2016		2015
	(Dollars in thousands)
Commercial and industrial (1)	$	37,455	$	3,699
Commercial real estate	6,266		7,856
Commercial construction	—		304
Small business	302		239
Residential real estate	7,782		8,795
Home equity	5,553		6,742
Other consumer	47		55
Total nonaccrual loans (2)	$	57,405	$	27,690

(1) $34.6 million of this balance relates to one large relationship that was contractually current but instead placed on discretionary nonaccrual as of December 31, 2016.

(2) Included in these amounts were $5.2 million of nonaccruing TDRs at both December 31, 2016 and 2015, respectively.

Foreclosed Residential Real Estate Property [Table Text Block]

The following table shows information regarding foreclosed residential real estate property at the date indicated:

	December 31, 2016			December 31, 2015
	(Dollars in thousands)
Foreclosed residential real estate property held by the creditor	$	3,775	(1)	$	1,430
Recorded investment in mortgage loans collateralized by residential real estate property that are in the process of foreclosure	$	1,715		$	1,059

(1) Inclusive of acquired other real estate owned of $2.1 million relating to the NEB acquisition.

Schedule of the Age Analysis of Past Due Financing Receivables

The following table shows the age analysis of past due financing receivables as of the dates indicated:

	December 31, 2016
	30-59 days			60-89 days			90 days or more			Total Past Due			Current		Total Financing Receivables		Recorded Investment >90 Days and Accruing
	Number of Loans	Principal Balance		Number of Loans	Principal Balance		Number of Loans	Principal Balance		Number of Loans	Principal Balance
	(Dollars in thousands)
Commercial and industrial	8	$	100	32	$	253	6	$	2,480	46	$	2,833	$	899,220	$	902,053	$	—
Commercial real estate	5	1,518		8	1,957		8	3,105		21	6,580		3,004,218		3,010,798		—
Commercial construction	—	—		—	—		—	—		—	—		320,391		320,391		—
Small business	9	323		—	—		19	140		28	463		122,263		122,726		—
Residential real estate	11	1,277		9	1,950		27	3,507		47	6,734		637,692		644,426		—
Home equity	19	1,117		11	767		16	1,209		46	3,093		985,054		988,147		—
Other consumer (1)	249	184		12	17		15	7		276	208		10,856		11,064		2
Total	301	$	4,519	72	$	4,944	91	$	10,448	464	$	19,911	$	5,979,694	$	5,999,605	$	2

	December 31, 2015
	30-59 days			60-89 days			90 days or more			Total Past Due			Current		Total Financing Receivables		Recorded Investment >90 Days and Accruing
	Number of Loans	Principal Balance		Number of Loans	Principal Balance		Number of Loans	Principal Balance		Number of Loans	Principal Balance
	(Dollars in thousands)
Commercial and industrial	9	$	399	4	$	1,021	8	$	3,039	21	$	4,459	$	838,817	$	843,276	$	—
Commercial real estate	19	7,349		6	1,627		13	4,458		38	13,434		2,640,000		2,653,434		—
Commercial construction	—	—		—	—		1	304		1	304		373,064		373,368		—
Small business	11	93		4	9		13	69		28	171		96,075		96,246		—
Residential real estate	20	3,119		11	2,049		19	3,433		50	8,601		630,005		638,606		—
Home equity	21	1,526		11	903		20	1,338		52	3,767		924,036		927,803		—
Other consumer (1)	297	231		12	65		13	25		322	321		14,667		14,988		—
Total	377	$	12,717	48	$	5,674	87	$	12,666	512	$	31,057	$	5,516,664	$	5,547,721	$	—

(1) Other consumer portfolio is inclusive of deposit account overdrafts recorded as loan balances.

Schedule of Troubled Debt Restructuring and Other Pertinent Information

The following table shows the Company’s total TDRs and other pertinent information as of the dates indicated:

	December 31
	2016		2015
	(Dollars in thousands)
TDRs on accrual status	$	27,093	$	32,849
TDRs on nonaccrual status	5,199		5,225
Total TDRs	$	32,292	$	38,074
Amount of specific reserves included in the allowance for loan loss associated with TDRs:	$	1,417	$	1,628
Additional commitments to lend to a borrower who has been a party to a TDR:	$	1,378	$	972

Schedule of Troubled Debt Restructuring Modifications

The following table shows the modifications which occurred during the periods indicated and the change in the recorded investment subsequent to the modifications occurring:

	Years Ended December 31
	2016
	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment(1)
	(Dollars in thousands)
Troubled debt restructurings
Commercial and industrial	10	$	1,623	$	1,623
Commercial real estate	10	2,959		2,959
Small business	3	188		188
Residential real estate	8	1,808		1,850
Home equity	13	932		932
Other consumer	6	153		153
Total	50	$	7,663	$	7,705
	2015
Troubled debt restructurings
Commercial and industrial	13	$	1,314	$	1,314
Commercial real estate	6	2,941		2,941
Small business	9	293		293
Residential real estate	8	843		870
Home equity	8	694		694
Total	44	$	6,085	$	6,112
	2014
Troubled debt restructurings
Commercial and industrial	12	$	681	$	681
Commercial real estate	13	4,329		4,329
Small business	5	133		133
Residential real estate	9	1,535		1,568
Home equity	11	923		926
Other consumer	1	8		8
Total	51	$	7,609	$	7,645

(1) The post-modification balances represent the legal principal balance of the loan on the date of modification. These amounts may show an increase when modifications include a capitalization of interest.

Schedule of Post-Modification Balance of Troubled Debt Restructuring by Type of Modification

The following table shows the Company’s post-modification balance of TDRs listed by type of modification as of the periods indicated:

	Years Ended December 31
	2016		2015		2014
	(Dollars in thousands)
Extended maturity	$	5,044	$	2,936	$	3,441
Adjusted interest rate	92		—		727
Combination rate and maturity	1,035		2,199		2,640
Court ordered concession	1,534		977		837
Total	$	7,705	$	6,112	$	7,645

Schedule of Troubled Debt Restructurings Which Have Subsequently Defaulted

The Company considers a loan to have defaulted when it reaches 90 days past due. The following table shows loans that were modified during the prior twelve months and subsequently defaulted during the periods indicated:

	Years Ended December 31
	2016			2015			2014
	Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment
	(Dollars in thousands)
Troubled debt restructurings that subsequently defaulted
Commercial & industrial	—	$	—	3	$	339	2	$	196
Commercial real estate	1	249		1	502		—	—
Residential real estate	—	—		2	326		3	214
Home equity	—	—		1	100		—	—
Total	1	$	249	7	$	1,267	5	$	410

Schedule of Impaired Loans by Loan Portfolio

The table below sets forth information regarding the Company’s impaired loans. The information for average recorded investment and interest income recognized is reflective of the full period being presented and does not take into account the date at which a loan was deemed to be impaired. See information below as of the dates indicated:

	As of and For the Years Ended December 31
	2016
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
	(Dollars in thousands)
With no related allowance recorded
Commercial and industrial	$	28,776	$	29,772	$	—	$	26,472	$	927
Commercial real estate	11,628		12,891		—		12,744		437
Small business	494		569		—		534		20
Residential real estate	4,216		4,427		—		4,302		185
Home equity	4,485		4,572		—		4,602		184
Other consumer	146		146		—		160		11
Subtotal	49,745		52,377		—		48,814		1,764
With an allowance recorded
Commercial and industrial	10,402		10,440		3,661		10,760		325
Commercial real estate	5,185		5,533		196		5,491		200
Small business	377		392		8		408		21
Residential real estate	9,959		10,530		1,086		10,065		332
Home equity	1,378		1,547		242		1,403		50
Other consumer	251		252		21		268		8
Subtotal	27,552		28,694		5,214		28,395		936
Total	$	77,297	$	81,071	$	5,214	$	77,209	$	2,700
	2015
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
	(Dollars in thousands)
With no related allowance recorded
Commercial and industrial	$	2,613	$	3,002	$	—	$	3,024	$	71
Commercial real estate	12,008		13,128		—		11,676		375
Commercial construction	304		305		—		308		—
Small business	527		618		—		584		22
Residential real estate	3,874		4,033		—		3,958		157
Home equity	4,893		5,005		—		5,023		195
Other consumer	184		185		—		201		15
Subtotal	24,403		26,276		—		24,774		835
With an allowance recorded
Commercial and industrial	2,534		2,648		183		2,848		48
Commercial real estate	10,978		11,047		204		10,789		592
Small business	494		523		4		535		30
Residential real estate	11,531		12,652		1,278		11,669		460
Home equity	1,096		1,287		238		655		14
Other consumer	374		389		23		408		14
Subtotal	27,007		28,546		1,930		26,904		1,158
Total	$	51,410	$	54,822	$	1,930	$	51,678	$	1,993

	2014
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
	(Dollars in thousands)
With no related allowance recorded
Commercial and industrial	$	3,005	$	3,278	$	—	$	4,557	$	258
Commercial real estate	15,982		17,164		—		16,703		1,025
Commercial construction	311		311		—		311		13
Small business	692		718		—		772		45
Residential real estate	2,439		2,502		—		2,493		102
Home equity	4,169		4,221		—		4,264		198
Other consumer	338		341		—		364		24
Subtotal	26,936		28,535		—		29,464		1,665
With an allowance recorded
Commercial and industrial	1,649		1,859		412		2,032		98
Commercial real estate	14,747		15,514		197		15,650		842
Small business	396		458		7		456		32
Residential real estate	12,616		13,727		1,500		12,817		537
Home equity	1,161		1,264		262		1,203		46
Other consumer	530		530		38		580		22
Subtotal	31,099		33,352		2,416		32,738		1,577
Total	$	58,035	$	61,887	$	2,416	$	62,202	$	3,242

Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Table Text Block]

he following table displays certain information pertaining to PCI loans at the dates indicated:

	December 31
	2016		2015
	(Dollars in thousands)
Outstanding balance	$	20,477	$	23,199
Carrying amount	$	18,392	$	20,595

Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Table Text Block]

The following table summarizes activity in the accretable yield for the PCI loan portfolio:

	2016			2015
	(Dollars in thousands)
Beginning balance	$	2,827		$	2,974
Acquisition	—			319
Accretion	(1,540		)	(2,485		)
Other change in expected cash flows (1)	953			1,721
Reclassification from nonaccretable difference for loans which have paid off (2)	130			298
Ending balance	$	2,370		$	2,827

(1) Represents changes in cash flows expected to be collected resulting in increased interest income as a prospective yield adjustment over the remaining life of the loan(s).

(2) Results in increased income during the period when a loan pays off at amount greater than originally expected.

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BANK PREMISES AND EQUIPMENT (Tables)

12 Months Ended

Dec. 31, 2016

Property, Plant and Equipment [Abstract]

Schedule of Premises and Equipment

BANK PREMISES AND EQUIPMENT

Bank premises and equipment at December 31, were as follows:

	2016			2015			Estimated Useful Life
	(Dollars in thousands)						(In years)
Cost
Land	$	20,585		$	20,780		n/a
Bank premises	43,553			39,182			5-39
Leasehold improvements	24,387			22,817			4-27
Furniture and equipment	58,237			55,336			1-12
Total cost	146,762			138,115
Accumulated depreciation	(68,282		)	(62,452		)
Net bank premises and equipment	$	78,480		$	75,663

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GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS (Tables)

12 Months Ended

Dec. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets and Goodwill

The following table sets forth the carrying value of goodwill and other intangible assets, net of accumulated amortization, at December 31:

	2016		2015
	(Dollars in thousands)
Balances not subject to amortization
Goodwill	$	221,526	$	201,083
Balances subject to amortization
Core deposit intangibles	8,527		10,264
Other intangible assets	1,321		1,562
Total other intangible assets	9,848		11,826
Total goodwill and other intangible assets	$	231,374	$	212,909

Schedule of Goodwill

The changes in the carrying value of goodwill for the periods indicated were as follows:

	2016		2015
	(Dollars in thousands)
Balance at beginning of year	$	201,083	$	170,421
Acquisitions	20,443		30,662
Balance at end of year	$	221,526	$	201,083

Schedule of Other Intangible Assets

The gross carrying amount and accumulated amortization of other intangible assets were as follows at the periods indicated:

	December 31
	2016							2015
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
	(Dollars in thousands)
Core deposit intangibles	$	23,917	$	(15,390	)	$	8,527	$	23,367	$	(13,103	)	$	10,264
Other intangible assets	3,020		(1,699		)	1,321		3,051		(1,489		)	1,562
Total	$	26,937	$	(17,089	)	$	9,848	$	26,418	$	(14,592	)	$	11,826

Schedule of Intangible Assets Estimated Annual Amortization Expense

The following table sets forth the estimated annual amortization expense of intangible assets for each of the next five years:

Year	Amount
	(Dollars in thousands)
2017	$	3,002
2018	$	1,888
2019	$	1,232
2020	$	1,035
2021	$	939

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DEPOSITS (Tables)

12 Months Ended

Dec. 31, 2016

Banking and Thrift [Abstract]

Schedule of Time Deposits Maturities

The following is a summary of the scheduled maturities of time deposits as of December 31:

	2016				2015
	(Dollars in thousands)
1 year or less	$	430,834	66.4	%	$	488,046	71.2	%
Over 1 year to 2 years	82,627		12.7	%	83,244		12.2	%
Over 2 years to 3 years	44,190		6.8	%	31,017		4.5	%
Over 3 years to 4 years	49,446		7.6	%	35,448		5.2	%
Over 4 years to 5 years	42,055		6.5	%	47,075		6.9	%
Total	$	649,152	100.0	%	$	684,830	100.0	%

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BORROWINGS (Tables)

12 Months Ended

Dec. 31, 2016

Debt Disclosure [Abstract]

Schedule of Federal Home Loan Bank Borrowings

Advances payable to the Federal Home Loan Bank as of December 31 are summarized as follows:

	2016				2015
			Weighted				Weighted
			Average				Average
	Total		Contractual		Total		Contractual
	Outstanding		Rate		Outstanding		Rate
	(Dollars in thousands)
Stated Maturity
2016	$	—	—	%	$	52,025	1.23	%
2017	50,000		2.43	%	40,154		3.10	%
2018	—		—	%	7,043		1.74	%
2019	—		—	%	2,011		1.99	%
Subtotal	50,000		2.43	%	101,233		2.00	%
Amortizing advances	819				847
Total Federal Home Loan Bank Advances	$	50,819			$	102,080

Schedule of Underlying Assets of Repurchase Agreements when Amount of Repurchase Agreements Exceeds 10 Percent of Assets [Table Text Block]

The table below sets forth information regarding the Company’s repurchase agreements allocated by source of collateral at the dates indicated:

	December 31, 2016
	Remaining Contractual Maturity of the Agreements
	Overnight and Continuous		Up to 30 Days		30-90 Days		Greater than 90 Days		Total
	(Dollars in thousands)
Sources of Collateral
U.S. government agency securities	$	20,233	$	—	$	—	$	—	$	20,233
Agency mortgage-backed securities	79,079		—		—		—		79,079
Agency collateralized mortgage obligations	77,601		—		—		—		77,601
Total borrowings	$	176,913	$	—	$	—	$	—	$	176,913
	December 31, 2015
	Remaining Contractual Maturity of the Agreements
	Overnight and Continuous		Up to 30 Days		30-90 Days		Greater than 90 Days		Total
	(Dollars in thousands)
Sources of Collateral
U.S. government agency securities	$	10,157	$	—	$	—	$	—	$	10,157
Agency mortgage-backed securities	69,142		—		—		—		69,142
Agency collateralized mortgage obligations	54,659		—		—		—		54,659
Total borrowings	$	133,958	$	—	$	—	$	—	$	133,958

Schedule of Long-term Borrowings

The following table summarizes long-term debt, net of debt issuances costs, as of the periods indicated:

	December 31
	2016		2015
	(Dollars in thousands)
Junior subordinated debentures
Capital Trust V	$	51,500	$	51,497
Slades Ferry Trust I	10,224		10,219
Central Trust I	5,302		5,516
Central Trust II	6,081		6,074
Subordinated debentures	34,635		34,589
Total long-term debt	$	107,742	$	107,895

Information relating to Trust Preferred Securities [Table Text Block]

Information relating to these trust preferred securities are as follows:

Trust	Description of Capital Securities
Capital Trust V	$50.0 million due in 2037, interest at a variable rate of 3 month LIBOR plus 1.48% (2.44% at December 31, 2016), which had previously been converted to a fixed rate of 6.52%, through the use of an interest rate swap which expired on December 28, 2016. Beginning on January 17, 2017, the borrowings will be subject to a forward starting interest rate swap, converting the interest to a fixed rate of 2.84% through December 15, 2021. These securities are callable quarterly, until maturity.
Slades Ferry Trust I	$10.0 million due in 2034, bearing interest at a variable rate of 3 month LIBOR plus 2.79% (3.78% at December 31, 2016). These securities are callable quarterly, until maturity.
Central Trust I	$5.1 million due in 2034, bearing interest at a variable rate of 3 month LIBOR plus 2.44% (3.40% at December 31, 2016). These securities are callable quarterly, until maturity.
Central Trust II	$5.9 million due in 2037, bearing a fixed interest rate of 7.015% until March 15, 2017. Subsequent to this date, the interest will be variable (3 month LIBOR plus 1.65%) and the securities will become callable quarterly, until maturity.

Schedule of Maturities of Borrowings

The following table sets forth the contractual maturities of long-term debt over the next five years:

	2017		2018		2019		2020		2021		Thereafter		Total
	(Dollars in thousands)
Junior subordinated debentures
Capital trust V	$	—	$	—	$	—	$	—	$	—	$	51,547	$	51,547
Slades ferry trust I	$	—	$	—	$	—	$	—	$	—	$	10,310	$	10,310
Central trust I	$	—	$	—	$	—	$	—	$	—	$	5,258	$	5,258
Central trust II	$	—	$	—	$	—	$	—	$	—	$	6,083	$	6,083
Subordinated debentures	$	—	$	—	$	—	$	—	$	—	$	35,000	$	35,000

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EARNINGS PER SHARE (Tables)

12 Months Ended

Dec. 31, 2016

Earnings Per Share [Abstract]

Schedule of the Components of Earnings Per Share

Earnings per share consisted of the following components for the years ended December 31:

	2016		2015			2014
	(Dollars in thousands, except per share data)
Net income	$	76,648	$	64,960		$	59,845
Weighted Average Shares
Basic shares	26,404,071		25,891,382			23,899,562
Effect of dilutive securities	51,847		68,566			93,815
Diluted shares	26,455,918		25,959,948			23,993,377
Net income per share
Basic EPS	$	2.90	$	2.51		$	2.50
Effect of dilutive securities	—		(0.01		)	(0.01		)
Diluted EPS	$	2.90	$	2.50		$	2.49

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STOCK BASED COMPENSATION (Tables)

12 Months Ended

Dec. 31, 2016

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

Schedule of Cumulatively Granted Stock Options and Restricted Stock Awards, Net of Forfeitures

The following table presents the amount of cumulatively granted stock options and restricted stock awards, net of forfeitures, through December 31, 2016:

	Authorized Awards	Cumulative Granted, Net of Forfeitures		Total	Authorized but Unissued
		Stock Option  Awards	Restricted Stock  Awards
2005 Plan	1,650,000	537,941	650,485	1,188,426	461,574
2010 Plan	314,600	37,000	86,245	123,245	191,355

Schedule of Pre-tax Compensation Expense and Related Tax Benefits

The following table presents the pre-tax expense associated with stock option and restricted stock awards and the related tax benefits recognized for the years presented:

	Years Ended December 31
	2016		2015		2014
	(Dollars in thousands)
Stock based compensation expense
Stock options	$	—	$	—	$	36
Restricted stock awards(1)	2,590		2,296		2,135
Directors’ fee expense
Stock options	72		—		14
Restricted stock awards	303		194		527
Total stock based award expense	$	2,965	$	2,490	$	2,712
Related tax benefits recognized in earnings	$	1,211	$	1,122	$	945

(1) Inclusive of compensation expense associated with time-vested and performance-based restricted stock awards.

Schedule of Stock Options Granted

The Company made the following awards of nonqualified options to purchase shares of common stock in 2016. There were no such awards made in 2015 or 2014.

	Year Ended December 31, 2016
Date of grant	7/14/2016			2/20/2016
Plan	2010			2010
Options granted	5,000			5,000
Vesting period (beginning on the grant date)	18 months			22 months
Expiration date	7/14/2026			2/20/2026
Expected volatility	32.28		%	32.44		%
Expected life (years)	5.5			5.5
Expected dividend yield	2.37		%	2.28		%
Risk free interest rate	1.14		%	1.29		%
Fair value per option	$	11.46		$	10.59

Schedule of Relevant Information Relating to Stock Options

The following table presents relevant information relating to the Company’s stock options for the periods indicated:

	Years Ended December 31
	2016		2015		2014
	(Dollars in thousands, except per share data)
Fair value of stock options vested based on grant date fair value	$	37	$	14	$	211
Intrinsic value of stock options exercised	$	494	$	3,362	$	1,210
Cash received from stock option exercises	$	680	$	6,105	$	6,285
Tax benefit realized on stock option exercises/repurchase	$	204	$	1,362	$	442
Weighted average grant date fair value of options granted (per share)	$	11.03	$	—	$	—

Schedule of Stock Options

A summary of stock option activity of the Company’s Stock Option Grants for the year ended December 31, 2016 is presented in the table below:

	Outstanding								Nonvested
	Stock Option Awards			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (1)		Stock Option Awards		Weighted Average Grant Date Fair Value
	(Dollars in thousands, except per share data)
Balance at January 1, 2016	121,900			$	28.76				—		$	—
Granted	10,000			45.69					10,000		11.03
Exercised	(22,250	)		30.58					—		—
Vested	n/a			n/a					(3,334	)	11.03
Forfeited	—			—					—		—
Expired	—			—					—		—
Balance at December 31, 2016	109,650		(2)	$	29.93	3.02 years	$	4,443	6,666		$	11.03
Options outstanding and expected to vest at December 31, 2016	109,498		(3)	$	29.91	3.01 years	$	4,439
Options exercisable at December 31, 2016	102,984		(4)	$	28.91	2.61 years	$	4,278
Unrecognized compensation cost, including forfeiture estimate													$	37
Weighted average remaining recognition period (years)													1.01 years

(1) The aggregate intrinsic value in the preceding tables represents the total pre-tax intrinsic value, based on the average of the high price and low price at which the Company’s common stock traded on December 31, 2016 of $70.45, which would have been received by the option holders had they all exercised their options as of that date.

(2) Inclusive of 34,000 stock options outstanding to Directors.

(3) Inclusive of 33,848 vested stock options and expected to vest to Directors.

(4) Inclusive of 27,334 vested stock options outstanding to Directors.

Schedule of Restricted Stock Granted

The Company grants both time-vested restricted stock awards as well as performance-based restricted stock awards. During the years ended December 31, 2016, 2015, and 2014 the Company has made the following restricted stock award grants:

	Shares Granted	Plan	Fair Value (1)		Vesting Period
Time-vested
2016
2/11/2016	51,475	2005	$	41.96	Ratably over 5 years from grant date
3/1/2016	600	2005	$	44.37	Ratably over 5 years from grant date
5/24/2016	8,700	2010	$	48.34	At the end of 5 years from grant date (2)
9/19/2016	800	2005	$	52.92	Ratably over 5 years from grant date
11/7/2016	500	2005	$	54.28	Ratably over 5 years from grant date
11/14/2016	725	2010	$	63.43	Once on May 24, 2021 (3)
2015
2/11/2015	31,500	2005	$	39.42	Ratably over 5 years from grant date
2/12/2015	25,910	2005	$	40.03	Ratably over 5 years from grant date
3/19/2015	3,800	2005	$	43.56	Ratably over 5 years from grant date
4/27/2015	625	2005	$	41.61	At the end of 3 years from grant date
4/27/2015	1,875	2005	$	41.61	At the end of 5 years from grant date
5/27/2015	8,800	2010	$	45.02	At the end of 5 years from grant date (2)
7/14/2015	800	2010	$	47.82	Once on May 27, 2020 (4)
10/13/2015	1,000	2005	$	46.09	Ratably over 5 years from grant date
10/20/2015	2,000	2005	$	46.47	Ratably over 5 years from grant date
2014
3/20/2014	65,950	2005	$	39.82	Ratably over 5 years from grant date
3/31/2014	3,000	2005	$	39.00	Ratably over 3 years from grant date
5/20/2014	10,920	2010	$	35.08	At the end of 5 years from grant date (2)
11/20/2014	2,000	2005	$	39.11	Ratably over 5 years from grant date
12/11/2014	2,000	2005	$	40.89	Ratably over 5 years from grant date
Performance-based
2016
2/11/2016	20,450	2005	$	41.96	The earlier of: the date on which it is determined if the performance goal has been achieved; or, March 31, 2019.
2015
2/12/2015	21,780	2005	$	40.03	The earlier of: the date on which it is determined if the performance goal has been achieved; or, March 31, 2018.
2014
3/20/2014	20,700	2005	$	39.82	The earlier of: the date on which it is determined if the performance goal has been achieved; or, March 31, 2017.

(1) The fair value of the restricted stock awards are based upon the average of the high and low prices at which the Company’s common stock traded on the date of grant. The holders of time-vested restricted stock awards participate fully in the rewards of stock ownership of the Company, including voting and dividend rights. The holders of performance-based restricted stock awards do not participate in the rewards of stock ownership of the Company until vested. The holders of all restricted stock awards are not required to pay any consideration to the Company for the awards.

(2) These restricted stock grants will vest at the end of a five year period, or earlier if the director ceases to be a director for any reason other than cause, such as, for example, by retirement.

(3) These restricted stock grants will vest on May 24, 2021, or earlier if the director ceases to be a director for any reason other than cause, such as, for example, by retirement.

(4) These restricted stock grants will vest on May 27, 2020, or earlier if the director ceases to be a director for any reason other than cause, such as, for example, by retirement.

Schedule of Share-based Compensation, Fair Value of Restricted Stock Awards Vesting [Table Text Block]

The following table presents the fair value of restricted stock awards vesting during the periods presented:

	Years Ended December 31
	2016		2015		2014
	(Dollars in thousands)
Fair value of restricted stock awards upon vesting	$	3,019	$	2,610	$	3,293

^[1]

Schedule of Restricted Stock Awards

A summary of the status of the Company’s Restricted Stock Award Grants for the year ended December 31, 2016 is presented in the table below:

	Outstanding Restricted Stock Awards			Weighted Average Grant Price ($)
	(Dollars in thousands, except per share data)
Balance at January 1, 2016	264,944			$	36.03
Granted	83,250			43.01
Vested/released	(67,242	)		32.96
Forfeited	(16,637	)		38.06
Balance at December 31, 2016	264,315		(1)	$	38.88
Unrecognized compensation cost (inclusive of directors’ fees), including forfeiture estimate						$	6,268
Weighted average remaining recognition period (years)						2.88

(1) Inclusive of 47,325 restricted stock awards outstanding to Directors.

[1] These restricted stock grants will vest on May 27, 2020, or earlier if the director ceases to be a director for any reason other than cause, such as, for example, by retirement.

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DERIVATIVES AND HEDGING ACTIVITIES (Tables)

12 Months Ended

Dec. 31, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Details of derivative positions for interest rate swaps which qualify as hedges for accounting purposes

The following table reflects the Company’s derivative positions for the periods indicated below for interest rate swaps which qualify as cash flow hedges for accounting purposes:

December 31, 2016
Notional Amount		Trade Date	Effective Date	Maturity Date		Receive (Variable) Index	Current Rate Received		Pay Fixed Swap Rate		Fair Value
(Dollars in thousands)
$	25,000	9-Dec-08	10-Dec-08	10-Dec-18		3 Month LIBOR	0.95	%	2.94	%	$	(740	)
25,000		1-Apr-16	17-Jan-17	15-Dec-21	(1)	3 Month LIBOR	N/A		1.36	%	689
25,000		1-Apr-16	17-Jan-17	15-Dec-21	(1)	3 Month LIBOR	N/A		1.36	%	675
$	75,000										$	624
December 31, 2015
Notional Amount		Trade Date	Effective Date	Maturity Date		Receive (Variable) Index	Current Rate Received		Pay Fixed Swap Rate		Fair Value
(Dollars in thousands)
$	25,000	16-Feb-06	28-Dec-06	28-Dec-16		3 Month LIBOR	0.51	%	5.04	%	$	(1,054	)
25,000		16-Feb-06	28-Dec-06	28-Dec-16		3 Month LIBOR	0.51	%	5.04	%	(1,055		)
25,000		9-Dec-08	10-Dec-08	10-Dec-18		3 Month LIBOR	0.49	%	2.94	%	(1,164		)
$	75,000										$	(3,273	)

Summary of customer related derivative positions, not designated as hedging

The following table reflects the Company’s customer related derivative positions for the periods indicated below for those derivatives not designated as hedging:

	Number of Positions (1)	Notional Amount Maturing
		Less than 1 year		Less than 2 years		Less than 3 years		Less than 4 years		Thereafter		Total		Fair Value
	December 31, 2016
	(Dollars in thousands)
Loan level derivatives
Receive fixed, pay variable	222	$	30,245	$	21,708	$	63,771	$	165,783	$	567,897	$	849,404	$	12,005
Pay fixed, receive variable	207	$	30,245	$	21,708	$	63,771	$	165,783	$	567,897	$	849,404	$	(12,008	)
Foreign exchange contracts
Buys foreign currency, sells U.S. currency	33	$	45,711	$	—	$	—	$	—	$	—	$	45,711	$	(2,250	)
Buys U.S. currency, sells foreign currency	33	$	45,711	$	—	$	—	$	—	$	—	$	45,711	$	2,277
	December 31, 2015
	(Dollars in thousands)
Loan level derivatives
Receive fixed, pay variable	171	$	37,732	$	34,424	$	29,629	$	77,041	$	488,110	$	666,936	$	22,467
Pay fixed, receive variable	165	$	37,732	$	34,424	$	29,629	$	77,041	488,110		$	666,936	$	(22,462	)
Foreign exchange contracts
Buys foreign currency, sells U.S. currency	21	$	38,416	$	—	$	—	$	—	$	—	$	38,416	$	(354	)
Buys U.S. currency, sells foreign currency	21	$	38,416	$	—	$	—	$	—	$	—	$	38,416	$	382

(1) The Company may enter into one dealer swap agreement which offsets multiple commercial borrower swap agreements.

Fair value of derivative financial instruments as well as their classification on the balance sheet

The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the balance sheet at the periods indicated:

	Asset Derivatives					Liability Derivatives
		Fair Value at		Fair Value at			Fair Value at		Fair Value at
	Balance Sheet Location	December 31, 2016		December 31, 2015		Balance Sheet Location	December 31, 2016		December 31, 2015
	(Dollars in thousands)
Derivatives designated as hedges
Interest rate derivatives	Other assets	$	1,364	$	—	Other liabilities	$	740	$	3,273
Derivatives not designated as hedges
Customer Related Positions:
Loan level derivatives	Other assets	18,629		22,470		Other liabilities	18,632		22,465
Foreign exchange contracts	Other assets	2,338		602		Other liabilities	2,311		574
Mortgage Derivatives
Interest rate lock commitments	Other assets	430		233		Other liabilities	—		—
Forward sales agreements	Other assets	—		—		Other liabilities	233		1
Subtotal		21,397		23,305			21,176		23,040
Total		$	22,761	$	23,305		$	21,916	$	26,313

Effect of derivative financial instruments included in OCI and current earnings

The table below presents the effect of the Company’s derivative financial instruments included in OCI and current earnings for the periods indicated:

	Years Ended December 31
	2016			2015			2014
	(Dollars in thousands)
Derivatives designated as hedges
Gain (loss) in OCI on derivatives (effective portion), net of tax	$	2,170		$	1,199		$	2,256
Loss reclassified from OCI into interest expense (effective portion)	$	(2,520	)	$	(2,828	)	$	(3,662	)
Loss reclassified from OCI into noninterest expense (loss on termination)	$	—		$	—		$	(1,122	)
Loss recognized in income on derivatives (ineffective portion and amount excluded from effectiveness testing)
Interest expense	$	—		$	—		$	—
Other expense	—			—			—
Total	$	—		$	—		$	—
Derivatives not designated as hedges
Changes in fair value of customer related positions
Other income	$	73		$	60		$	63
Other expenses	(82		)	(53		)	(4		)
Changes in fair value of mortgage derivatives
Mortgage banking income	(35		)	(50		)	49
Total	$	(44	)	$	(43	)	$	108

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BALANCE SHEET OFFSETTING (Tables)

12 Months Ended

Dec. 31, 2016

Offsetting [Abstract]

Financial Instruments Derivative Assets Liabilities and resell agreements net of amount not offset [Table Text Block]

BALANCE SHEET OFFSETTING

The Company does not offset fair value amounts recognized for derivative instruments or repurchase agreements. The Company does net the amount recognized for the right to reclaim cash collateral against the obligation to return cash collateral arising from derivative instruments executed with the same counterparty under a master netting arrangement. Collateral legally required to be maintained at dealer banks by the Company is monitored and adjusted as necessary. At December 31, 2016 and 2015, it was determined that no additional collateral would have to be posted to immediately settle these instruments.

The following tables present the Company's asset and liability derivative positions and the potential effect of netting arrangements on its financial position, as of the periods indicated:

							Gross Amounts Not Offset in the Statement of Financial Position
	Gross Amounts Recognized		Gross Amounts Offset in the Statement of Financial Position		Net Amounts Presented in the Statement of Financial Position		Financial Instruments (1)		Collateral Pledged		Net Amount
	December 31, 2016
	(Dollars in thousands)
Derivative Assets
Interest rate swaps	$	1,364	$	—	$	1,364	$	961	$	—	$	403
Loan level derivatives	$	18,629	$	—	$	18,629	$	3,261	$	—	$	15,368
Customer foreign exchange contracts	2,338		—		2,338		—		—		2,338
	$	22,331	$	—	$	22,331	$	4,222	$	—	$	18,109
Derivative Liabilities
Interest rate swaps	$	740	$	—	$	740	$	—	$	740	$	—
Loan level derivatives	18,632		—		18,632		4,222		11,106		3,304
Customer foreign exchange contracts	2,311		—		2,311		—		—		2,311
Repurchase agreements
Customer repurchase agreements	176,913		—		176,913		—		176,913		—
	$	198,596	$	—	$	198,596	$	4,222	$	188,759	$	5,615

(1) Reflects offsetting derivative positions with the same counterparty.

							Gross Amounts Not Offset in the Statement of Financial Position
	Gross Amounts Recognized		Gross Amounts Offset in the Statement of Financial Position		Net Amounts Presented in the Statement of Financial Position		Financial Instruments (1)		Collateral Pledged		Net Amount
	December 31, 2015
	(Dollars in thousands)
Derivative Assets
Loan level derivatives	$	22,470	$	—	$	22,470	$	2	$	—	$	22,468
Customer foreign exchange contracts	602		—		602		—		—		602
	$	23,072	$	—	$	23,072	$	2	$	—	$	23,070
Derivative Liabilities
Interest rate swaps	$	3,273	$	—	$	3,273	$	—	$	3,273	$	—
Loan level derivatives	22,465		—		22,465		2		22,461		2
Customer foreign exchange contracts	574		—		574		—		—		574
Repurchase agreements
Customer repurchase agreements	133,958		—		133,958		—		133,958		—
	$	160,270	$	—	$	160,270	$	2	$	159,692	$	576

(1) Reflects offsetting derivative positions with the same counterparty.

The Company has agreements with certain of its derivative counterparties that contain a provision where if the Company fails to maintain its status as a well capitalized institution, then the Company could be required to terminate any outstanding derivatives with the counterparty. All liability position interest rate swap and customer loan level swap counterparties have credit-risk contingent features as of the dates indicated in the table above. In addition, derivative instruments that contain credit-risk related contingent features that are in a net liability position require the Company to assign collateral as noted in the table above.

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INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2016

Income Tax Disclosure [Abstract]

Schedule of Components of Income Taxes

The provision for income taxes is comprised of the following components:

	Years Ended December 31
	2016			2015		2014
	(Dollars in thousands)
Current expense
Federal	$	26,549		$	11,946	$	14,709
State	8,883			5,052		6,350
Total current expense	35,432			16,998		21,059
Deferred expense (benefit)
Federal	153			8,466		2,877
State	(158		)	1,754		(37		)
Total deferred expense (benefit)	(5		)	10,220		2,840
Total expense	$	35,427		$	27,218	$	23,899

Schedule of Income Tax Rate Reconciliation

The difference between the statutory federal income tax rate of 35% and the effective income tax rate reported for the last three years is detailed below:

	Years Ended December 31
	2016					2015					2014
	(Dollars in thousands)
Computed statutory federal income tax provision	$	39,226		35.00	%	$	32,262		35.00	%	$	29,310		35.00	%
State taxes, net of federal tax benefit	5,643			5.03	%	4,500			4.88	%	4,104			4.90	%
Nontaxable interest, net	(996		)	(0.89	)%	(973		)	(1.06	)%	(795		)	(0.95	)%
New Markets Tax Credits	(6,360		)	(5.67	)%	(6,514		)	(7.07	)%	(6,708		)	(8.01	)%
Low Income Housing Project Investments	(1,641		)	(1.46	)%	(1,182		)	(1.28	)%	(594		)	(0.71	)%
Increase in cash surrender value of life insurance and gain on life insurance benefits	(1,431		)	(1.28	)%	(1,292		)	(1.40	)%	(1,782		)	(2.13	)%
Merger and other related costs (non-deductible)	210			0.19	%	185			0.20	%	274			0.33	%
Change in valuation allowance	28			0.02	%	41			0.04	%	—			—	%
Other, net	748			0.67	%	191			0.22	%	90			0.11	%
Total expense	$	35,427		31.61	%	$	27,218		29.53	%	$	23,899		28.54	%

Schedule of Net Deferred Tax Asset

The tax-effected components of the net deferred tax asset at December 31 were as follows:

	2016			2015
	(Dollars in thousands)
Deferred tax assets
Accrued expenses not deducted for tax purposes	$	15,401		$	14,621
Allowance for loan losses	24,681			22,744
Deferred gain on sale leaseback transaction	1,744			2,158
Derivatives fair value adjustment	—			1,033
Employee and director equity compensation	2,095			2,466
Federal Home Loan Bank borrowings fair value adjustment	82			108
Loan basis difference fair value adjustment	4,336			3,789
Net operating loss carry-forward	69			41
New Markets Tax Credit carry-forward	—			459
Other	1,015			451
Gross deferred tax assets	49,423			47,870
Valuation allowance	(69		)	(41		)
Total deferred tax assets net of valuation allowance	$	49,354		$	47,829
Deferred tax liabilities
Core deposit and other intangibles	$	3,040		$	3,785
Deferred loan fees, net	5,407			4,872
Fixed assets	6,168			7,269
Goodwill	14,737			14,576
Net unrealized gain on securities available for sale	105			805
Derivatives fair value adjustment	454			—
Other	3,909			2,468
Gross deferred tax liabilities	$	33,820		$	33,775
Total net deferred tax asset	$	15,534		$	14,054

Reconciliation of Unrecognized Tax Benefits

The Company accounts for uncertainties in income taxes by providing a tax reserve for certain positions. The following is a reconciliation of the beginning and ending amount of unrecognized tax benefits:

	(Dollars in thousands)
Balance at December 31, 2014	$	—
Reduction of tax positions for prior years	—
Increase for prior year tax position	—
Increase for current year tax positions	81
Balance at December 31, 2015	$	81
Reduction of tax positions for prior years	—
Increase for prior year tax positions	—
Increase for current year tax positions	30
Balance at December 31, 2016	$	111

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LOW INCOME HOUSING PROJECT INVESTMENTS Low Income Housing Project Investments (Tables)

12 Months Ended

Dec. 31, 2016

Low Income Housing Project Investments [Abstract]

Investments in Low Income Housing Projects [Table Text Block]

The following table presents certain information related to the Company's investments in low income housing projects as of December 31:

	2016		2015		2014
	(Dollars in thousands)
Original investment value	$	47,379	$	42,199	$	40,541
Current recorded investment	$	39,606	$	38,151	$	38,943
Unfunded liability obligation	$	12,161	$	14,607	$	28,004
Tax credits and benefits earned during the year	$	5,366	$	3,632	$	1,683
Amortization of investments during the year	$	3,725	$	2,450	$	1,089
Net income tax benefit recognized during the year	$	1,641	$	1,182	$	594

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EMPLOYEE BENEFIT PLANS (Tables)

12 Months Ended

Dec. 31, 2016

Compensation and Retirement Disclosure [Abstract]

Schedule of Multiemployer Plan

		Funding Status of Pension Plan		FIP/RP Status Pending/ Implemented	Surcharge Imposed	Expiration Date of Collective- Bargaining Agreement	Minimum Contributions Required for Future Periods
	EIN/Pension Plan Number	2016	2015
Pentegra defined benefit plan for financial institutions	13-5645888/333	At least 80 percent	At least 80 percent	No	No	N/A	$	—

Schedule of Multiemployer Plan Contributions

The Company’s contributions to the Pension Plans were as follows for the periods indicated:

					Required Contributions - Plan Year Allocation
	Cash Payment		Future period funding		2016-2017		2015-2016		2014-2015
	(Dollars in thousands)
2016	$	6,245	$	4,000	$	2,245	$	—	$	—
2015	$	2,983	$	1,215	$	—	$	1,768	$	—
2014	$	1,320	$	—	$	—	$	—	$	1,320

Schedule of Supplemental Retirement Expense and Contributions Paid

The following table shows the defined benefit supplemental retirement expense, and the contributions paid to the plans which were used only to pay the current year benefits as of the dates indicated:

	2016		2015		2014
	(Dollars in thousands)
Retirement expense	$	1,513	$	1,834	$	954
Contributions paid	$	320	$	276	$	271

Schedule of Expected Benefit Payments

Expected future benefit payments for the defined benefit supplemental executive retirement plans are presented below:

	Defined Benefit Supplemental Executive Retirement Plans Expected Benefit Payments
	(Dollars in thousands)
2017	$	412
2018	$	414
2019	$	485
2020	$	471
2021	$	466
2022-2026	$	4,348

Schedule of Supplemental Executive Retirement Plans

The following table illustrates the status of the defined benefit supplemental executive retirement plans at December 31 for the years presented:

	Defined Benefit Supplemental Executive Retirement Benefits
	2016			2015			2014
	(Dollars in thousands)
Change in accumulated benefit obligation
Benefit obligation at beginning of year	$	13,290		$	12,537		$	8,243
Accumulated service cost	395			742			397
Interest cost	539			470			390
Plan amendment	—			—			1,357
Actuarial loss/(gain)	273			(183		)	2,421
Benefits paid	(320		)	(276		)	(271		)
Accumulated benefit obligation at end of year	$	14,177		$	13,290		$	12,537
Change in plan assets
Fair value of plan assets at beginning of year	$	—		$	—		$	—
Employer contribution	320			276			271
Benefits paid	(320		)	(276		)	(271		)
Fair value of plan assets at end of year	$	—		$	—		$	—
Funded status at end of year	$	(14,177	)	$	(13,290	)	$	(12,537	)
Assets	—			—			—
Liabilities	(14,177		)	(13,290		)	(12,537		)
Accrued benefit cost	$	(14,177	)	$	(13,290	)	$	(12,537	)
Amounts recognized in accumulated other comprehensive income (“AOCI”)
Net loss	$	2,830		$	2,859		$	3,305
Prior service cost	1,323			1,599			1,904
Amounts recognized in AOCI	$	4,153		$	4,458		$	5,209
Information for plans with an accumulated benefit obligation in excess of plan assets
Projected benefit obligation	$	14,177		$	13,290		$	12,537
Accumulated benefit obligation	$	14,177		$	13,290		$	12,537
Net periodic benefit cost
Service cost	$	395		$	742		$	397
Interest cost	539			470			390
Amortization of prior service cost	276			305			113
Recognized net actuarial loss	303			317			54
Net periodic benefit cost	$	1,513		$	1,834		$	954
Amounts in accumulated other comprehensive income expected to be recognized in net periodic benefit cost over next fiscal year
Net actuarial loss	$	338		$	270		$	309
Net prior service cost	$	276		$	276		$	947
Discount rate used for benefit obligation	2.49-3.94%			2.49-4.16%			2.24-3.84%
Discount rate used for net periodic benefit cost	2.49-4.16%			2.24-3.84%			2.43-4.76%
Rate of compensation increase	n/a			n/a			n/a

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FAIR VALUE MEASUREMENTS (Tables)

12 Months Ended

Dec. 31, 2016

Fair Value Disclosures [Abstract]

Schedule of Assets and Liabilities Measured at Fair Value on a Recurring and Nonrecurring Basis

Assets and liabilities measured at fair value on a recurring and nonrecurring basis were as follows as of the dates indicated:

			Fair Value Measurements at Reporting Date Using
	Balance		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	December 31, 2016
	(Dollars in thousands)
Recurring fair value measurements
Assets
Trading securities	$	804	$	804	$	—	$	—
Securities available for sale
U.S. Government agency securities	24,244		—		24,244		—
Agency mortgage-backed securities	175,384		—		175,384		—
Agency collateralized mortgage obligations	99,868		—		99,868		—
State, county, and municipal securities	3,793		—		3,793		—
Single issuer trust preferred securities issued by banks and insurers	2,311		—		2,311		—
Pooled trust preferred securities issued by banks and insurers	1,584		—		—		1,584
Small business administration pooled securities	37,189		—		37,189		—
Equity securities	19,271		19,271		—		—
Loans held for sale	6,139		—		6,139		—
Derivative instruments	22,761		—		22,761		—
Liabilities
Derivative instruments	21,916		—		21,916		—
Total recurring fair value measurements	$	371,432	$	20,075	$	349,773	$	1,584
Nonrecurring fair value measurements
Assets
Collateral dependent impaired loans	$	33,974	$	—	$	—	$	33,974
Other real estate owned and other foreclosed assets	4,173		—		—		4,173
Total nonrecurring fair value measurements	$	38,147	$	—	$	—	$	38,147

			Fair Value Measurements at Reporting Date Using
	Balance		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	December 31, 2015
	(Dollars in thousands)
Recurring fair value measurements
Assets
Trading securities	$	356	$	356	$	—	$	—
Securities available for sale
U.S. Government agency securities	30,215		$	—	30,215		—
Agency mortgage-backed securities	210,937		—		210,937		—
Agency collateralized mortgage obligations	63,584		—		63,584		—
State, county, and municipal securities	4,659		—		4,659		—
Single issuer trust preferred securities issued by banks and insurers	2,792		—		2,792		—
Pooled trust preferred securities issued by banks and insurers	1,572		—		—		1,572
Small business administration pooled securities	40,449		—		40,449		—
Equity securities	13,041		13,041		—		—
Loans held for sale	5,990		—		5,990		—
Derivative instruments	23,305		—		23,305		—
Liabilities
Derivative instruments	26,313		—		26,313		—
Total recurring fair value measurements	$	370,587	$	13,397	$	355,618	$	1,572
Nonrecurring fair value measurements:
Assets
Collateral dependent impaired loans	$	4,598	$	—	$	—	$	4,598
Other real estate owned and other foreclosed assets	2,159		—		—		2,159
Total nonrecurring fair value measurements	$	6,757	$	—	$	—	$	6,757

Reconciliation of Assets on Recurring Basis Using Significant Unobservable Inputs

The table below presents a reconciliation for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3), which were valued using pricing models and discounted cash flow methodologies, as of the dates indicated:

	As of and for the years ended December 31,
	2016			2015			2014
	(Dollars in thousands)
Pooled Trust Preferred Securities
Beginning balance	$	1,572		$	6,321		$	3,841
Gain and (losses) (realized/unrealized)
Included in earnings	—			—			—
Included in other comprehensive income	29			14			2,655
Sales	—			(4,679		)	—
Settlements	(17		)	(84		)	(175		)
Transfers into (out of) level 3	—			—			—
Ending Balance	$	1,584		$	1,572		$	6,321

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

The following table sets forth certain unobservable inputs regarding the Company's financial instruments that are classified as Level 3 as of December 31st for the years indicated:

	2016		2015			2016	2015	2016	2015
Valuation Technique	Fair Value				Unobservable Inputs	Range		Weighted Average
	(Dollars in thousands)
Discounted cash flow methodology
Pooled trust preferred securities	$	1,584	$	1,572	Cumulative prepayment	0% - 62%	0%-64%	2.5%	2.7%
					Cumulative default	5% - 100%	5%-100%	12.8%	15.1%
					Loss given default	85% - 100%	85%-100%	94.2%	94.2%
					Cure given default	0% - 75%	0%-75%	60.9%	62.3%
Appraisals of collateral (1)
Collateral dependent impaired loans	$	33,974	$	4,598
Other real estate owned and foreclosed assets	$	4,173	$	2,159

(1) Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various Level 3 inputs which are not identifiable. Appraisals may be adjusted by management for qualitative factors such as economic factors and estimated liquidation expenses. The range of these possible adjustments may vary.

Schedule of Fair Values and Related Carrying Amounts by Balance Sheet Grouping

The estimated fair values and related carrying amounts for assets and liabilities for which fair value is only disclosed are shown below as of the periods indicated:

					Fair Value Measurements at Reporting Date Using
	Book Value		Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	December 31, 2016
	(Dollars in thousands)
Financial assets
Securities held to maturity(a)
U.S. Treasury securities	$	1,007	$	1,054	$	—	$	1,054	$	—
Agency mortgage-backed securities	156,088		157,504		—		157,504		—
Agency collateralized mortgage obligations	297,445		294,650		—		294,650		—
State, county, and municipal securities	—		—		—		—		—
Single issuer trust preferred securities issued by banks	1,500		1,544		—		1,544		—
Small business administration pooled securities	31,036		30,898		—		30,898		—
Loans, net of allowance for loan losses(b)	5,904,065		5,784,778		—		—		5,784,778
Federal Home Loan Bank stock(c)	11,497		11,497		—		11,497		—
Cash surrender value of life insurance policies(d)	144,503		144,503		—		144,503		—
Financial liabilities
Deposit liabilities, other than time deposits(e)	$	5,763,101	$	5,763,101	$	—	$	5,763,101	$	—
Time certificates of deposits(f)	649,152		647,038		—		647,038		$	—
Federal Home Loan Bank borrowings(f)	50,819		50,898		—		50,898		—
Customer repurchase agreements and other short-term borrowings(f)	176,913		176,913		—		—		176,913
Junior subordinated debentures(g)	73,107		72,510		—		72,510		—
Subordinated debentures(f)	34,635		34,241		—		—		34,241

					Fair Value Measurements at Reporting Date Using
	Book Value		Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	December 31, 2015
Financial assets	(Dollars in thousands)
Securities held to maturity(a)
U.S. Treasury securities	$	1,009	$	1,064	$	—	$	1,064	$	—
Agency mortgage-backed securities	167,134		170,375		—		170,375		—
Agency collateralized mortgage obligations	267,348		264,891		—		264,891		—
State, county, and municipal securities	225		227		—		227		—
Single issuer trust preferred securities issued by banks	1,500		1,522		—		1,522		—
Small business administration pooled securities	35,291		35,664		—		35,664		—
Corporate debt securities	5,000		5,006		—		5,006		—
Loans, net of allowance for loan losses(b)	5,487,298		5,417,425		—		—		5,417,425
Federal Home Loan Bank stock(c)	14,431		14,431		—		14,431		—
Cash surrender value of life insurance policies(d)	134,627		134,627		—		134,627		—
Financial liabilities
Deposit liabilities, other than time deposits(e)	$	5,305,873	$	5,305,873	$	—	$	5,305,873	$	—
Time certificates of deposits(f)	$	684,830	$	684,370	$	—	$	684,370	$	—
Federal Home Loan Bank borrowings(f)	102,080		102,396		—		102,396		—
Customer repurchase agreements and other short-term borrowings(f)	133,958		133,958		—		—		133,958
Junior subordinated debentures(g)	73,306		73,871		—		73,871		—
Subordinated debentures(f)	34,589		34,370		—		—		34,370

(a) The fair values presented are based on quoted market prices, where available. If quoted market prices are not available, fair values are based on quoted market prices of comparable instruments and/or discounted cash flow analysis.

(b) Fair value is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities or cash flows. Additionally, this amount excludes collateral dependent impaired loans, which are deemed to be marked to fair value on a nonrecurring basis.

(c) FHLB stock has no quoted market value and is carried at cost, therefore the carrying amount approximates fair value.

(d) Cash surrender value of life insurance is recorded at its cash surrender value (or the amount that can be realized upon surrender of the policy), therefore carrying amount approximates fair value.

(e) Fair value of demand deposits, savings and interest checking accounts and money market deposits is the amount payable on demand at the reporting date.

(f) Fair value was determined by discounting anticipated future cash payments using rates currently available for instruments with similar remaining maturities.

(g) Fair value was determined based upon market prices of securities with similar terms and maturities.

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OTHER COMPREHENSIVE LOSS (Tables)

12 Months Ended

Dec. 31, 2016

Equity [Abstract]

Schedule of Other Comprehensive Loss

The following table presents a reconciliation of the changes in the components of other comprehensive income (loss) for the dates indicated, including the amount of income tax (expense) benefit allocated to each component of other comprehensive income (loss):

	December 31, 2016
	Pre Tax Amount			Tax (Expense) Benefit			After Tax Amount
	(Dollars in thousands)
Change in fair value of securities available for sale	$	(1,858	)	$	710		$	(1,148	)
Less: net security losses reclassified into other noninterest income (expense)	(26		)	11			(15		)
Net change in fair value of securities available for sale	(1,832		)	699			(1,133		)
Change in fair value of cash flow hedges	1,133			(453		)	680
Less: net cash flow hedge losses reclassified into interest on borrowings expense (1)	(2,520		)	1,030			(1,490		)
Net change in fair value of cash flow hedges	3,653			(1,483		)	2,170
Net unamortized loss related to defined benefit pension and other postretirement adjustments arising during the period	(383		)	157			(226		)
Amortization of net actuarial losses	238			(97		)	141
Amortization of net prior service cost	276			(113		)	163
Net change in other comprehensive income for defined benefit postretirement plans (2)	131			(53		)	78
Total other comprehensive income	$	1,952		$	(837	)	$	1,115
	Year Ended December 31, 2015
	Pre Tax Amount			Tax (Expense) Benefit			After Tax Amount
	(Dollars in thousands)
Change in fair value of securities available for sale	$	(3,757	)	$	1,434		$	(2,323	)
Less: net security losses reclassified into other noninterest income (expense)	(405		)	165			(240		)
Net change in fair value of securities available for sale	(3,352		)	1,269			(2,083		)
Change in fair value of cash flow hedges	(776		)	299			(477		)
Less: net cash flow hedge losses reclassified into interest on borrowings expense (1)	(2,828		)	1,152			(1,676		)
Net change in fair value of cash flow hedges	2,052			(853		)	1,199
Net unamortized gain related to defined benefit pension and other postretirement adjustments arising during the period	438			(193		)	245
Amortization of net actuarial losses	243			(99		)	144
Amortization of net prior service cost	294			(119		)	175
Net change in other comprehensive income for defined benefit postretirement plans (2)	975			(411		)	564
Total other comprehensive loss	$	(325	)	$	5		$	(320	)

	Year Ended December 31, 2014
	Pre Tax Amount			Tax (Expense) Benefit			After Tax Amount
	(Dollars in thousands)
Change in fair value of securities available for sale	$	9,095		$	(3,570	)	$	5,525
Less: net security losses reclassified into other noninterest income	191			(78		)	113
Net change in fair value of securities available for sale	8,904			(3,492		)	5,412
Change in fair value of cash flow hedges	(969		)	396			(573		)
Less: Net cash flow hedge losses reclassified into interest on borrowings expense (1)	(3,662		)	1,496			(2,166		)
Less: Loss on termination of hedge reclassified into noninterest expense	(1,122		)	459			(663		)
Net change in fair value of cash flow hedges	3,815			(1,559		)	2,256
Net unamortized loss related to defined benefit pension and other postretirement adjustments arising during the period	(2,699		)	1,103			(1,596		)
Net prior service costs related to plan amendment arising during the period	(1,357		)	554			(803		)
Amortization of net actuarial gains	(44		)	18			(26		)
Amortization of net prior service cost	102			(42		)	60
Amortization of net transition obligation	(2		)	1			(1		)
Net change in other comprehensive income for defined benefit postretirement plans (2)	(4,000		)	1,634			(2,366		)
Total other comprehensive income	$	8,719		$	(3,417	)	$	5,302

(1) Includes the amortization of the remaining balance of a realized but unrecognized gain, net of tax, from the termination of interest rate swaps in June 2009. The original gain of $1.4 million, net of tax, will be recognized in earnings through December 2018, the original maturity date of the swap. The balance of this gain had amortized to $281,000, $427,000, and $571,000 at December 31, 2016, 2015, and 2014, respectively.

(2) The amortization of prior service costs is included in the computation of net periodic pension costs as disclosed in Note 15 - Employee Benefit Plans.

Schedule of Accumulated Other Comprehensive Income (Loss), Net of Tax

Information on the Company's accumulated other comprehensive loss, net of tax, is comprised of the following components as of the periods indicated:

	Unrealized Gain on Securities			Unrealized Loss on Cash Flow Hedge			Deferred Gain on Hedge Transactions			Defined Benefit Postretirement Plans			Accumulated Other Comprehensive Income (Loss)
	(Dollars in Thousands)
Beginning balance: January 1, 2014	$	(2,023	)	$	(5,698	)	$	715		$	(428	)	$	(7,434	)
Net change in other comprehensive income (loss)	5,412			2,400			(144		)	(2,366		)	5,302
Ending balance: December 31, 2014	$	3,389		$	(3,298	)	$	571		$	(2,794	)	$	(2,132	)
Net change in other comprehensive income (loss)	(2,083		)	1,343			(144		)	564			(320		)
Ending balance: December 31, 2015	$	1,306		$	(1,955	)	$	427		$	(2,230	)	$	(2,452	)
Net change in other comprehensive income (loss)	(1,133		)	2,316			(146		)	78			1,115
Ending balance: December 31, 2016	$	173		$	361		$	281		$	(2,152	)	$	(1,337	)

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COMMITMENTS AND CONTINGENCIES (Tables)

12 Months Ended

Dec. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

Schedule of Off-Balance Sheet Financial Instruments

	2016		2015
	(Dollars in thousands)
Commitments to extend credit	$	2,227,955	$	2,091,170
Standby letters of credit	$	18,190	$	17,962
Deferred standby letter of credit fees	$	108	$	72

Schedule of Minimum Future Lease Commitments

The Company leases office space, space for ATM locations, and certain branch locations under noncancelable operating leases. The following is a schedule of minimum future lease payments under such leases as of December 31, 2016:

	(Dollars in thousands)
2017	$	9,287
2018	7,960
2019	7,291
2020	6,296
2021	5,000
Thereafter	8,213
Total future minimum lease commitments	$	44,047

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REGULATORY CAPITAL REQUIREMENTS (Tables)

12 Months Ended

Dec. 31, 2016

Banking and Thrift [Abstract]

Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations

The Company’s and the Bank’s actual capital amounts and ratios as of December 31, 2016 and 2015 are also presented in the table that follows:

	Actual				For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio		Amount			Ratio		Amount			Ratio
	December 31, 2016
	(Dollars in thousands)
Independent Bank Corp.
Total capital (to risk weighted assets)	$	824,265	13.60	%	$	484,942	≥	8.0	%	N/A			N/A
Common equity tier 1 capital (to risk weighted assets)	$	656,080	10.82	%	$	272,780	≥	4.5	%	N/A			N/A
Tier 1 capital (to risk weighted assets)	$	727,070	11.99	%	$	363,706	≥	6.0	%	N/A			N/A
Tier 1 capital (to average assets)	$	727,070	9.77	%	$	297,748	≥	4.0	%	N/A			N/A
Rockland Trust Company
Total capital (to risk weighted assets)	$	788,320	13.01	%	$	484,834	≥	8.0	%	$	606,042	≥	10.0	%
Common equity tier 1 capital (to risk weighted assets)	$	725,760	11.98	%	$	272,719	≥	4.5	%	$	393,927	≥	6.5	%
Tier 1 capital (to risk weighted assets)	$	725,760	11.98	%	$	363,625	≥	6.0	%	$	484,834	≥	8.0	%
Tier 1 capital (to average assets)	$	725,760	9.76	%	$	297,589	≥	4.0	%	$	371,986	≥	5.0	%
	December 31, 2015
	(Dollars in thousands)
Independent Bank Corp.
Total capital (to risk weighted assets)	$	747,372	13.36	%	$	447,664	≥	8.0	%	N/A			N/A
Common equity tier 1 capital (to risk weighted assets)	$	584,378	10.44	%	$	251,811	≥	4.5	%	N/A			N/A
Tier 1 capital (to risk weighted assets)	$	655,154	11.71	%	$	335,748	≥	6.0	%	N/A			N/A
Tier 1 capital (to average assets)	$	655,154	9.33	%	$	280,889	≥	4.0	%	N/A			N/A
Rockland Trust Company
Total capital (to risk weighted assets)	$	718,197	12.84	%	$	447,334	≥	8.0	%	$	559,167	≥	10.0	%
Common equity tier 1 capital (to risk weighted assets)	$	660,979	11.82	%	$	251,625	≥	4.5	%	$	363,459	≥	6.5	%
Tier 1 capital (to risk weighted assets)	$	660,979	11.82	%	$	335,500	≥	6.0	%	$	447,334	≥	8.0	%
Tier 1 capital (to average assets)	$	660,979	9.42	%	$	280,653	≥	4.0	%	$	350,816	≥	5.0	%

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PARENT COMPANY FINANCIALS ONLY (Tables)

12 Months Ended

Dec. 31, 2016

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Schedule of Condensed Balance Sheets

BALANCE SHEETS

	December 31
	2016		2015
	(Dollars in thousands)
Assets
Cash (1)	$	42,596	$	35,428
Investments in subsidiaries(2)	935,778		851,743
Prepaid income taxes	625		530
Deferred tax asset	216		2,229
Derivative instruments(1)	1,364		—
Total assets	$	980,579	$	889,930
Liabilities and stockholders’ equity
Dividends payable	$	7,834	$	6,824
Junior subordinated debentures	73,107		73,306
Subordinated debentures	34,635		34,589
Derivative instruments(1)	—		2,109
Other liabilities	313		1,639
Total liabilities	115,889		118,467
Stockholders’ equity	864,690		771,463
Total liabilities and stockholders’ equity	$	980,579	$	889,930

(1) Entire balance eliminates in consolidation.

(2) $933.6 million and $849.5 million eliminate in consolidation at December 31, 2016 and 2015, respectively.

Schedule of Condensed Statements of Income

STATEMENTS OF INCOME

	Years Ended December 31
	2016			2015			2014
	(Dollars in thousands)
Income
Dividends received from subsidiaries(1)	$	44,598		$	38,153		$	40,170
Interest income(2)	98			78			57
Total income	44,696			38,231			40,227
Expenses
Interest expense	5,901			5,769			4,225
Other expenses	—			29			—
Total expenses	5,901			5,798			4,225
Income before income taxes and equity in undistributed income of subsidiaries	38,795			32,433			36,002
Income tax benefit	(1,791		)	(2,301		)	(1,298		)
Income of parent company	40,586			34,734			37,300
Equity in undistributed income of subsidiaries	36,062			30,226			22,545
Net income	$	76,648		$	64,960		$	59,845

(1) Income of $62,000, $55,000 and $53,000 was not eliminated in consolidation for the years ended December 31, 2016, 2015, and 2014, respectively.

(2) Entire balance eliminated in consolidation.

Schedule of Condensed Statements of Cash Flows

STATEMENTS OF CASH FLOWS

	Years Ended December 31
	2016			2015			2014
	(Dollars in thousands)
Cash flows from operating activities
Net income	$	76,648		$	64,960		$	59,845
Adjustments to reconcile net income to cash provided by operating activities
Accretion	(154		)	(150		)	(194		)
Deferred income tax expense	678			3,266			293
Change in other assets	423			7,488			—
Change in other liabilities	(5,532		)	(254		)	(267		)
Equity in undistributed income of subsidiaries	(36,062		)	(30,226		)	(22,545		)
Net cash provided by operating activities	36,001			45,084			37,132
Cash flows used in investing activities
Cash paid for acquisitions, net of cash acquired (1)	(950		)	(51,680		)	—
Net cash used in investing activities	(950		)	(51,680		)	—
Cash flows provided by (used in) financing activities
Repayment of short-term borrowings	—			—			(5,000		)
Proceeds from issuance of subordinated debentures	—			—			35,000
Restricted stock awards issued, net of awards surrendered	(696		)	(657		)	(641		)
Net proceeds from exercise of stock options	201			1,367			2,333
Proceeds from shares issued under the direct stock purchase plan	2,323			2,695			1,555
Common dividends paid	(29,711		)	(26,172		)	(22,443		)
Net cash provided by (used in) financing activities	(27,883		)	(22,767		)	10,804
Net increase (decrease) in cash and cash equivalents	7,168			(29,363		)	47,936
Cash and cash equivalents at the beginning of the year	35,428			64,791			16,855
Cash and cash equivalents at the end of the year	$	42,596		$	35,428		$	64,791

(1) The majority of the net assets acquired at the parent company represented New England Bancorp Inc.'s investment in its wholly owned subsidiary, Bank of Cape Cod, which was eliminated in consolidation.

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SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables)

12 Months Ended

Dec. 31, 2016

Quarterly Financial Information Disclosure [Abstract]

Schedule of Quarterly Financial Information

	First Quarter					Second Quarter				Third Quarter				Fourth Quarter
	2016		2015			2016		2015		2016		2015		2016		2015
						(Dollars in thousands, except per share data)
Interest income	$	59,741	$	56,429		$	61,160	$	59,016	$	62,308	$	60,228	$	63,428	$	59,870
Interest expense	4,850		5,180			4,627		5,269		4,640		5,183		4,676		4,985
Net interest income	54,891		51,249			56,533		53,747		57,668		55,045		58,752		54,885
Provision (benefit) for loan losses	525		(500		)	600		700		950		800		4,000		500
Total noninterest income	19,155		16,557			21,095		20,261		20,416		19,247		21,762		19,824
Total noninterest expenses	46,482		54,977			47,146		48,644		46,857		47,031		51,637		46,486
Provision for income taxes	8,428		3,869			9,508		7,213		9,793		7,867		7,698		8,268
Net income	$	18,611	$	9,460		$	20,374	$	17,451	$	20,484	$	18,594	$	17,179	$	19,455
Basic earnings per share	$	0.71	$	0.38		$	0.77	$	0.67	$	0.78	$	0.71	$	0.64	$	0.74
Diluted earnings per share	$	0.71	$	0.38		$	0.77	$	0.67	$	0.78	$	0.71	$	0.64	$	0.74
Weighted average common shares (basic)	26,275,323		24,959,865			26,304,129		26,149,593		26,324,316		26,200,621		26,710,029		26,238,004
Common stock equivalents	43,409		80,215			47,885		71,819		53,072		63,493		60,022		52,772
Weighted average common shares (diluted)	26,318,732		25,040,080			26,352,014		26,221,412		26,377,388		26,264,114		26,770,051		26,290,776
Unusual or infrequently occurring items
Items within noninterest income
Gain on sale of fixed income securities	$	—	$	—		$	—	$	798	$	—	$	—	$	—	$	—
Total	$	—	$	—		$	—	$	798	$	—	$	—	$	—	$	—
Items within noninterest expense
Impairment on acquired facilities	$	—	$	—		$	—	$	109	$	—	$	—	$	—	$	—
Loss on extinguishment of debt	437		122			—		—		—		—		—		—
Loss on sale of fixed income securities	—		—			—		1,124		—		—		—		—
Merger and acquisition expense	334		10,230			206		271		151		—		4,764		—
Total	$	771	$	10,352		$	206	$	1,504	$	151	$	—	$	4,764	$	—

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TRANSACTIONS WITH RELATED PARTIES Activity of Loans to Related Parties (Tables)

12 Months Ended

Dec. 31, 2016

Related Party Transaction [Line Items]

Schedule of Related Party Transactions [Table Text Block]

The following information represents annual activity of loans to related parties for the periods indicated:

	2016			2015
	(Dollars in thousands)
Principal balance of loans outstanding at beginning of year	$	24,653		$	25,994
Loan advances	1,718			9,268
Loan payments/payoffs	(3,576		)	(10,609		)
Principal balance of loans outstanding at end of year	$	22,795		$	24,653

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)	12 Months Ended
	Dec. 31, 2016
Core deposit intangibles [Member]
Finite-Lived Intangible Assets [Line Items]
Useful life	10 years
Noncompete Agreements [Member] | Minimum [Member]
Finite-Lived Intangible Assets [Line Items]
Useful life	1 year
Noncompete Agreements [Member] | Maximum [Member]
Finite-Lived Intangible Assets [Line Items]
Useful life	3 years
Customer Lists [Member]
Finite-Lived Intangible Assets [Line Items]
Useful life	10 years
Lease Agreements [Member] | Minimum [Member]
Finite-Lived Intangible Assets [Line Items]
Useful life	7 years 5 months
Lease Agreements [Member] | Maximum [Member]
Finite-Lived Intangible Assets [Line Items]
Useful life	29 years

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual)	12 Months Ended
	Dec. 31, 2016 USD ($) center branch	Dec. 31, 2015 USD ($)
Accounting Policies [Line Items]
Reserve for unfunded loan commitments | $	$ 954,000	$ 1,400,000
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | $	$ 501,000	$ 568,000
Maximum [Member]
Accounting Policies [Line Items]
Lease option period	15 years
Loans Receivable [Member] | Lender Concentration Risk [Member] | Residential Building [Member]
Accounting Policies [Line Items]
Loans of nonresidential buildings to total loan portfolio	15.40%	15.00%
Full Service Retail Branch [Member] | Bank [Member]
Accounting Policies [Line Items]
Number of branches | branch	80
Limited Service Retail Branch [Member] | Bank [Member]
Accounting Policies [Line Items]
Number of branches | branch	3
Commercial Banking Center [Member] | Bank [Member]
Accounting Policies [Line Items]
Number of centers	11
Investment Management Office [Member] | Bank [Member]
Accounting Policies [Line Items]
Number of centers	5
Mortgage Lending Center [Member] | Bank [Member]
Accounting Policies [Line Items]
Number of centers	1

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ACQUISITIONS (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Nov. 10, 2016	Dec. 31, 2015	Feb. 20, 2015	Dec. 31, 2014
Assets
Goodwill	$ 221,526		$ 201,083		$ 170,421
Peoples Federal Bancshares, Inc [Member]
Assets
Cash				$ 41,957
Investments				43,585
Loans				463,927
Premises and equipment				9,346
Goodwill				30,662
Core deposit intangible				3,936
Other assets				46,920
Total assets acquired				640,333
Liabilities
Deposits				432,250
Borrowings				51,209
Other liabilities				15,054
Total liabilities assumed				498,513
Purchase price				$ 141,820
New England Bancorp, Inc. [Member]
Assets
Cash		$ 9,679
Loans		225,731
Premises and equipment		201
Goodwill		20,443
Core deposit intangible		670
Other assets		19,197
Total assets acquired		275,921
Liabilities
Deposits		175,686
Borrowings		51,150
Other liabilities		7,344
Total liabilities assumed	$ 234,180
Purchase price		$ 41,741

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ACQUISITIONS (Details 1) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015	Feb. 20, 2015	Dec. 31, 2014
Business Acquisition [Line Items]
Interest component of expected cash flows	$ (2,370)	$ (2,827)		$ (2,974)
Peoples Federal Bancshares, Inc [Member]
Business Acquisition [Line Items]
Contractually required principal and interest payments receivable			$ 4,358
Certain Loans Acquired in Transfer, Nonaccretable Difference			(1,596)
Certain Loans Acquired in Transfer Accounted for as Debt Securities, Acquired During Period, Cash Flows Expected to be Collected at Acquisition			2,762
Interest component of expected cash flows			(319)
Less: fair value (initial carrying amount)			$ 2,443

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ACQUISITIONS (Details 2) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Peoples Federal Bancshares, Inc [Member]
Business Acquisition [Line Items]
Net interest income after provision for loan losses		$ 216,086	$ 203,296
Net income		69,816	$ 60,896
New England Bancorp, Inc. [Member]
Business Acquisition [Line Items]
Net interest income after provision for loan losses	$ 228,927	221,252
Net income	$ 80,411	$ 65,623

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ACQUISITIONS (Details Textual) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended							12 Months Ended
	Feb. 20, 2015	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Nov. 10, 2016
Business Acquisition [Line Items]
Acquisition Related Costs		$ 4,764	$ 151	$ 206	$ 334	$ 0	$ 271	$ 10,230	$ 5,455	$ 10,501	$ 1,339
New England Bancorp, Inc. [Member]
Business Acquisition [Line Items]
Number of shares of company stock issued for each share of Central common stock (in shares)												0.25
Value of shares of company stock issued for each share of acquiree stock (in dollars per share)												$ 15.14
Company's closing price per share (in dollars per share)												$ 60.55
Business transaction value												$ 41,700
Increase in acquirer outstanding shares												672,665
Acquisition Related Costs									5,000
Loans acquired												$ 225,731
Combination of INDB and New England Bancorp, Inc. [Member]
Business Acquisition [Line Items]
Acquisition Related Costs									6,300
Peoples Federal Bancshares, Inc [Member]
Business Acquisition [Line Items]
Equity Interest Issued or Issuable Shareholders Option To Receive, Cash Per Share	$ 21.00
Number of shares of company stock issued for each share of Central common stock (in shares)	0.5523
Value of shares of company stock issued for each share of acquiree stock (in dollars per share)	$ 23.26
Company's closing price per share (in dollars per share)	$ 42.11
Business transaction value	$ 141,800
Cost of acquired entity, percentage cash	40.00%
Business Acquisition, Cost of Acquired Entity, Percentage Stock Consideration	60.00%
Cost of acquired entity, cash paid	$ 55,400
Consideration Transferred, Equity Interests Issued and Issuable	$ 86,400
Increase in acquirer outstanding shares	2,052,137
Acquisition Related Costs									$ 10,500
Loans acquired	$ 463,927
Combination of INDB and Peoples Federal Bancshares, Inc [Member]
Business Acquisition [Line Items]
Acquisition Related Costs										$ 16,700

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SECURITIES (Details 1) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Available-for-sale Securities:
Amortized Cost	$ 363,366	$ 365,140
Available-for-sale Equity Securities, Accumulated Gross Unrealized Gain, before Tax	3,890	5,252
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax	(3,612)	(3,143)
Fair Value	363,644	367,249
Held-to-maturity Securities:
Amortized Cost	487,076	477,507
Held-to-maturity Securities, Accumulated Unrecognized Holding Gain	3,556	5,177
Held-to-maturity Securities, Accumulated Unrecognized Holding Loss	(4,982)	(3,935)
Fair Value	485,650	478,749
Available-for-sale Securities and Held-to-maturity Securities:
Amortized Cost	850,442	842,647
Gross Unrealized Gains	7,446	10,429
Gross Unrealized Losses	(8,594)	(7,078)
Fair Value	849,294	845,998
U.S. Government agency securities
Available-for-sale Securities:
Amortized Cost	24,006	29,958
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax	238	261
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax	0	(4)
Fair Value	24,244	30,215
U.S. treasury securities [Member]
Held-to-maturity Securities:
Amortized Cost	1,007	1,009
Held-to-maturity Securities, Accumulated Unrecognized Holding Gain	47	55
Held-to-maturity Securities, Accumulated Unrecognized Holding Loss	0	0
Fair Value	1,054	1,064
Agency mortgage-backed securities [Member]
Available-for-sale Securities:
Amortized Cost	173,268	207,693
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax	2,852	4,227
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax	(736)	(983)
Fair Value	175,384	210,937
Held-to-maturity Securities:
Amortized Cost	156,088	167,134
Held-to-maturity Securities, Accumulated Unrecognized Holding Gain	2,274	3,460
Held-to-maturity Securities, Accumulated Unrecognized Holding Loss	(858)	(219)
Fair Value	157,504	170,375
Agency collateralized mortgage obligations [Member]
Available-for-sale Securities:
Amortized Cost	101,094	64,157
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax	106	179
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax	(1,332)	(752)
Fair Value	99,868	63,584
Held-to-maturity Securities:
Amortized Cost	297,445	267,348
Held-to-maturity Securities, Accumulated Unrecognized Holding Gain	1,002	1,195
Held-to-maturity Securities, Accumulated Unrecognized Holding Loss	(3,797)	(3,652)
Fair Value	294,650	264,891
State, county, and municipal securities [Member]
Available-for-sale Securities:
Amortized Cost	3,743	4,543
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax	50	116
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax	0	0
Fair Value	3,793	4,659
Held-to-maturity Securities:
Amortized Cost	0	225
Held-to-maturity Securities, Accumulated Unrecognized Holding Gain	0	2
Held-to-maturity Securities, Accumulated Unrecognized Holding Loss	0	0
Fair Value	0	227
Single issuer trust preferred securities issued by banks [Member]
Available-for-sale Securities:
Amortized Cost	2,311	2,865
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax	3	8
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax	(3)	(81)
Fair Value	2,311	2,792
Held-to-maturity Securities:
Amortized Cost	1,500	1,500
Held-to-maturity Securities, Accumulated Unrecognized Holding Gain	44	22
Held-to-maturity Securities, Accumulated Unrecognized Holding Loss	0	0
Fair Value	1,544	1,522
Pooled trust preferred securities issued by banks and insurers
Available-for-sale Securities:
Amortized Cost	2,200	2,217
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax	0	0
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax	(616)	(645)
Fair Value	1,584	1,572
Small Business Administration Pooled Securities [Member]
Available-for-sale Securities:
Amortized Cost	37,561	40,472
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax	0	87
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax	(372)	(110)
Fair Value	37,189	40,449
Held-to-maturity Securities:
Amortized Cost	31,036	35,291
Held-to-maturity Securities, Accumulated Unrecognized Holding Gain	189	437
Held-to-maturity Securities, Accumulated Unrecognized Holding Loss	(327)	(64)
Fair Value	30,898	35,664
Marketable securities [Member]
Available-for-sale Securities:
Amortized Cost	19,183	13,235
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax	641	374
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax	(553)	(568)
Fair Value	19,271	13,041
Corporate debt securities [Member]
Held-to-maturity Securities:
Amortized Cost	0	5,000
Held-to-maturity Securities, Accumulated Unrecognized Holding Gain	0	6
Held-to-maturity Securities, Accumulated Unrecognized Holding Loss	0	0
Fair Value	$ 0	$ 5,006

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SECURITIES (Details 3) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Available for Sale, Amortized Cost
Amortized Cost	$ 363,366	$ 365,140
Available for Sale, Fair Value
Securities - available for sale	363,644	367,249
Held to Maturity, Amortized Cost
Amortized Cost	487,076	477,507
Held to Maturity, Fair Value
Fair Value	485,650	$ 478,749
Debt Securities [Member]
Available for Sale, Amortized Cost
Due in one year or less	999
Due after one year to five years	29,144
Due after five to ten years	97,144
Due after ten years	216,896
Amortized Cost	344,183
Available for Sale, Fair Value
Due in one year or less	1,001
Due in one year or less	29,419
Due after five to ten years	97,421
Due after ten years	216,532
Securities - available for sale	344,373
Held to Maturity, Amortized Cost
Due in one year or less	1
Due after one year to five years	16,007
Due after five to ten years	22,664
Due after ten years	448,404
Amortized Cost	487,076
Held to Maturity, Fair Value
Due in one year or less	1
Due after one year to five years	16,228
Due after five to ten years	23,309
Due after ten years	446,112
Fair Value	485,650
Marketable securities [Member]
Available for Sale, Amortized Cost
Available-for-sale Equity Securities, Amortized Cost Basis	19,183
Available for Sale, Fair Value
Assets Designated to Closed Block, Equity Securities, Available-for-sale, at Fair Value	19,271
Held to Maturity, Amortized Cost
Amortized Cost	0
Held to Maturity, Fair Value
Fair Value	$ 0

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SECURITIES (Details 4) $ in Thousands	Dec. 31, 2016 USD ($) holding	Dec. 31, 2015 USD ($) holding
Summary of gross unrealized losses and fair value of investments
No of holdings | holding	121	123
Fair value, less than 12 months	$ 444,471	$ 304,830
Fair value, 12 months or longer	56,356	92,785
Fair value, Total	500,827	397,615
Unrealized losses, Total	(8,594)	(7,078)
Unrealized loss position for available for sale and held to maturity securities in a continuous loss position for less than 12 months	(5,510)	(2,882)
Unrealized loss position for available for sale and held to maturity securities in a continuous loss position for more than 12 months	$ (3,084)	$ (4,196)
US Government Agencies Debt Securities [Member]
Summary of gross unrealized losses and fair value of investments
No of holdings | holding		3
Fair value, less than 12 months		$ 1,990
Fair value, 12 months or longer		0
Fair value, Total		1,990
Unrealized losses, Total		(4)
Unrealized loss position for available for sale and held to maturity securities in a continuous loss position for less than 12 months		(4)
Unrealized loss position for available for sale and held to maturity securities in a continuous loss position for more than 12 months		$ 0
Agency mortgage-backed securities [Member]
Summary of gross unrealized losses and fair value of investments
No of holdings | holding	57	57
Fair value, less than 12 months	$ 137,949	$ 112,648
Fair value, 12 months or longer	0	4,297
Fair value, Total	137,949	116,945
Unrealized losses, Total	(1,594)	(1,202)
Unrealized loss position for available for sale and held to maturity securities in a continuous loss position for less than 12 months	(1,594)	(1,062)
Unrealized loss position for available for sale and held to maturity securities in a continuous loss position for more than 12 months	$ 0	$ (140)
Agency collateralized mortgage obligations [Member]
Summary of gross unrealized losses and fair value of investments
No of holdings | holding	32	23
Fair value, less than 12 months	$ 243,051	$ 147,707
Fair value, 12 months or longer	47,403	80,927
Fair value, Total	290,454	228,634
Unrealized losses, Total	(5,129)	(4,404)
Unrealized loss position for available for sale and held to maturity securities in a continuous loss position for less than 12 months	(3,140)	(1,420)
Unrealized loss position for available for sale and held to maturity securities in a continuous loss position for more than 12 months	$ (1,989)	$ (2,984)
Single issuer trust preferred securities issued by banks and insurers
Summary of gross unrealized losses and fair value of investments
No of holdings | holding	1	2
Fair value, less than 12 months	$ 0	$ 1,018
Fair value, 12 months or longer	1,036	1,018
Fair value, Total	1,036	2,036
Unrealized losses, Total	(3)	(81)
Unrealized loss position for available for sale and held to maturity securities in a continuous loss position for less than 12 months	0	(33)
Unrealized loss position for available for sale and held to maturity securities in a continuous loss position for more than 12 months	$ (3)	$ (48)
Pooled trust preferred securities issued by banks and insurers
Summary of gross unrealized losses and fair value of investments
No of holdings | holding	1	1
Fair value, less than 12 months	$ 0	$ 0
Fair value, 12 months or longer	1,583	1,572
Fair value, Total	1,583	1,572
Unrealized losses, Total	(616)	(645)
Unrealized loss position for available for sale and held to maturity securities in a continuous loss position for less than 12 months	0	0
Unrealized loss position for available for sale and held to maturity securities in a continuous loss position for more than 12 months	$ (616)	$ (645)
Small Business Administration Pooled Securities [Member]
Summary of gross unrealized losses and fair value of investments
No of holdings | holding	5	3
Fair value, less than 12 months	$ 59,846	$ 37,986
Fair value, 12 months or longer	0	0
Fair value, Total	59,846	37,986
Unrealized losses, Total	(699)	(174)
Unrealized loss position for available for sale and held to maturity securities in a continuous loss position for less than 12 months	$ (699)	$ (174)
Marketable securities [Member]
Summary of gross unrealized losses and fair value of investments
No of holdings | holding	25	34
Fair value, less than 12 months	$ 3,625	$ 3,481
Fair value, 12 months or longer	6,334	4,971
Fair value, Total	9,959	8,452
Unrealized losses, Total	(553)	(568)
Unrealized loss position for available for sale and held to maturity securities in a continuous loss position for less than 12 months	(77)	(189)
Unrealized loss position for available for sale and held to maturity securities in a continuous loss position for more than 12 months	$ (476)	$ (379)

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SECURITIES (Details 7) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Schedule of Available-for-sale Securities [Line Items]
Gross change in OTTI recorded on certain investments	$ 0	$ 0	$ 2,098
Portion of OTTI recognized in OCI	0	0	(2,098)
Net impairment losses recognized in earnings on securities	$ 0	$ 0	$ 0

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SECURITIES (Details 8) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Summary of cumulative credit related component of OTTI
Balance at beginning of period	$ 0	$ (9,997)	$ (9,997)
Add
Incurred on securities not previously impaired	0	0	0
Incurred on securities previously impaired	0	0	0
Less
Securities sold during the period	0	9,997	0
Reclassification due to changes in Company’s intent	0	0	0
Increases in cash flow expected to be collected	0	0	0
Balance at end of period	$ 0	$ 0	$ (9,997)

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SECURITIES (Details Textual) - USD ($)	Dec. 31, 2016	Dec. 31, 2015
Investments, Debt and Equity Securities [Abstract]
Trading Securities	$ 804,000	$ 356,000
Callable securities in investment portfolio	10,900,000
Investment securities pledged	482,100,000	$ 444,800,000
Investments in obligations of individual states, counties or municipalities which exceed 10% of equity	$ 0

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Allowance Allocations (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance				$ 55,825				$ 55,100	$ 55,825	$ 55,100	$ 53,239
Charge-offs									(3,472)	(4,918)	(10,947)
Recoveries									3,138	4,143	2,405
Provision (benefit)	$ 4,000	$ 950	$ 600	525	$ 500	$ 800	$ 700	(500)	6,075	1,500	10,403
Ending balance	61,566				55,825				61,566	55,825	55,100
Ending balance: individually evaluated for impairment	5,214				1,930				5,214	1,930	2,416
Ending balance: collectively evaluated for impairment	56,352				53,895				56,352	53,895	52,684
Financing receivables ending balance:
Financing Receivable, Collectively Evaluated for Impairment	5,903,916				5,475,716				5,903,916	5,475,716	4,890,383
Individually evaluated for impairment	77,297				51,410				77,297	51,410	58,035
Financing Receivable, Net	4,355,968				3,966,324				4,355,968	3,966,324
Loans Receivable, Gross, Commercial and Industrial	902,053				843,276				902,053	843,276
Loans Receivable, Gross, Commercial, Mortgage	3,010,798				2,653,434				3,010,798	2,653,434
Total loans	5,999,605				5,547,721				5,999,605	5,547,721	4,970,733	[1]
Loans and Leases Receivable, Gross, Consumer, Other	11,064				14,988				11,064	14,988
Loans Receivable, Gross, Commercial, Construction	320,391				373,368				320,391	373,368
Small Business	122,726				96,246				122,726	96,246
Loans and Leases Receivable, Gross, Consumer, Mortgage	644,426				638,606				644,426	638,606
Commercial and Industrial [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance				13,802				15,573	13,802	15,573	15,622
Charge-offs									(593)	(2,010)	(2,097)
Recoveries									859	1,593	462
Provision (benefit)									2,853	(1,354)	1,586
Ending balance	16,921				13,802				16,921	13,802	15,573
Ending balance: individually evaluated for impairment	3,661				183				3,661	183	412
Ending balance: collectively evaluated for impairment	13,260				13,619				13,260	13,619	15,161
Financing receivables ending balance:
Financing Receivable, Collectively Evaluated for Impairment	862,875				838,129				862,875	838,129	856,185
Individually evaluated for impairment	39,178				5,147				39,178	5,147	4,654
Financing Receivable, Net	902,053				843,276				902,053	843,276
Total loans	902,053				843,276				902,053	843,276	860,839
Commercial Real Estate [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance				27,327				25,873	27,327	25,873	24,541
Charge-offs									(414)	(330)	(5,454)
Recoveries									564	1,073	404
Provision (benefit)									2,892	711	6,382
Ending balance	30,369				27,327				30,369	27,327	25,873
Ending balance: individually evaluated for impairment	196				204				196	204	197
Ending balance: collectively evaluated for impairment	30,173				27,123				30,173	27,123	25,676
Financing receivables ending balance:
Financing Receivable, Collectively Evaluated for Impairment	2,983,642				2,619,294				2,983,642	2,619,294	2,304,099
Individually evaluated for impairment	16,813				22,986				16,813	22,986	30,729
Financing Receivable, Net	3,010,798				2,653,434				3,010,798	2,653,434
Total loans	3,010,798				2,653,434				3,010,798	2,653,434	2,347,323
Construction Loans [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance				5,366				3,945	5,366	3,945	3,371
Charge-offs									0	0	0
Recoveries									0	0
Provision (benefit)									(844)	1,421	574
Ending balance	4,522				5,366				4,522	5,366	3,945
Ending balance: individually evaluated for impairment	0				0				0	0	0
Ending balance: collectively evaluated for impairment	4,522				5,366				4,522	5,366	3,945
Financing receivables ending balance:
Financing Receivable, Collectively Evaluated for Impairment	320,391				373,064				320,391	373,064	265,501
Individually evaluated for impairment	0				304				0	304	311
Financing Receivable, Net	320,391				373,368				320,391	373,368
Total loans	320,391				373,368				320,391	373,368	265,994
Small Business [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance				1,264				1,171	1,264	1,171	1,215
Charge-offs									(228)	(267)	(605)
Recoveries									195	264	275
Provision (benefit)									271	96	286
Ending balance	1,502				1,264				1,502	1,264	1,171
Ending balance: individually evaluated for impairment	8				4				8	4	7
Ending balance: collectively evaluated for impairment	1,494				1,260				1,494	1,260	1,164
Financing receivables ending balance:
Financing Receivable, Collectively Evaluated for Impairment	121,855				95,225				121,855	95,225	84,159
Individually evaluated for impairment	871				1,021				871	1,021	1,088
Financing Receivable, Net	122,726				96,246				122,726	96,246
Total loans	122,726				96,246				122,726	96,246	85,247
Residential Real Estate [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance				2,590				2,834	2,590	2,834	2,760
Charge-offs									(28)	(285)	(826)
Recoveries									299	133	424
Provision (benefit)									(240)	(92)	476
Ending balance	2,621				2,590				2,621	2,590	2,834
Ending balance: individually evaluated for impairment	1,086				1,278				1,086	1,278	1,500
Ending balance: collectively evaluated for impairment	1,535				1,312				1,535	1,312	1,334
Financing receivables ending balance:
Financing Receivable, Collectively Evaluated for Impairment	622,392				614,014				622,392	614,014	505,799
Individually evaluated for impairment	14,175				15,405				14,175	15,405	15,055
Total loans	644,426				638,606				644,426	638,606	530,259
Home Equity [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance				4,889				4,956	4,889	4,956	5,036
Charge-offs									(602)	(710)	(750)
Recoveries									141	356	249
Provision (benefit)									810	287	421
Ending balance	5,238				4,889				5,238	4,889	4,956
Ending balance: individually evaluated for impairment	242				238				242	238	262
Ending balance: collectively evaluated for impairment	4,996				4,651				4,996	4,651	4,694
Financing receivables ending balance:
Financing Receivable, Collectively Evaluated for Impairment	982,095				921,563				982,095	921,563	858,305
Individually evaluated for impairment	5,863				5,989				5,863	5,989	5,330
Total loans	988,147				927,803				988,147	927,803	863,863
Consumer Portfolio Segment [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance				$ 587				$ 748	587	748	694
Charge-offs									(1,607)	(1,316)	(1,215)
Recoveries									1,080	724	591
Provision (benefit)									333	431	678
Ending balance	393				587				393	587	748
Ending balance: individually evaluated for impairment	21				23				21	23	38
Ending balance: collectively evaluated for impairment	372				564				372	564	710
Financing receivables ending balance:
Financing Receivable, Collectively Evaluated for Impairment	10,666				14,427				10,666	14,427	16,335
Individually evaluated for impairment	397				558				397	558	868
Total loans	11,064				14,988				11,064	14,988	17,208
Receivables Acquired with Deteriorated Credit Quality [Member]
Financing receivables ending balance:
Financing Receivable, Net	18,392				20,595				18,392	20,595	22,315
Receivables Acquired with Deteriorated Credit Quality [Member] | Commercial and Industrial [Member]
Financing receivables ending balance:
Financing Receivable, Net	0				0				0	0	0
Receivables Acquired with Deteriorated Credit Quality [Member] | Commercial Real Estate [Member]
Financing receivables ending balance:
Financing Receivable, Net	10,343				11,154				10,343	11,154	12,495
Receivables Acquired with Deteriorated Credit Quality [Member] | Construction Loans [Member]
Financing receivables ending balance:
Financing Receivable, Net	0				0				0	0	182
Receivables Acquired with Deteriorated Credit Quality [Member] | Small Business [Member]
Financing receivables ending balance:
Financing Receivable, Net	0				0				0	0	0
Receivables Acquired with Deteriorated Credit Quality [Member] | Residential Real Estate [Member]
Financing receivables ending balance:
Financing Receivable, Net	7,859				9,187				7,859	9,187	9,405
Receivables Acquired with Deteriorated Credit Quality [Member] | Home Equity [Member]
Financing receivables ending balance:
Financing Receivable, Net	189				251				189	251	228
Receivables Acquired with Deteriorated Credit Quality [Member] | Consumer Portfolio Segment [Member]
Financing receivables ending balance:
Financing Receivable, Net	$ 1				$ 3				$ 1	$ 3	$ 5

[1] The amount of net deferred costs on originated loans included in the ending balance was $5.1 million, $4.3 million, and $2.8 million at December 31, 2016, 2015, and 2014, respectively. Net unamortized discounts on acquired loans not deemed to be PCI included in the ending balance was $8.6 million, $6.6 million, and $1.9 million at December 31, 2016, 2015, and 2014, respectively.

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Internal Risk Rating Categories for Commercial Portfolio (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Internal risk-rating categories for the Company's commercial portfolio
Financing Receivable, Net	$ 4,355,968	$ 3,966,324
Commercial and Industrial [Member]
Internal risk-rating categories for the Company's commercial portfolio
Financing Receivable, Net	902,053	843,276
Commercial Real Estate [Member]
Internal risk-rating categories for the Company's commercial portfolio
Financing Receivable, Net	3,010,798	2,653,434
Construction Loans [Member]
Internal risk-rating categories for the Company's commercial portfolio
Financing Receivable, Net	320,391	373,368
Small Business [Member]
Internal risk-rating categories for the Company's commercial portfolio
Financing Receivable, Net	122,726	96,246
Pass [Member]
Internal risk-rating categories for the Company's commercial portfolio
Financing Receivable, Net	4,097,798	3,706,567
Pass [Member] | Commercial and Industrial [Member]
Internal risk-rating categories for the Company's commercial portfolio
Financing Receivable, Net	783,825	765,753
Pass [Member] | Commercial Real Estate [Member]
Internal risk-rating categories for the Company's commercial portfolio
Financing Receivable, Net	2,876,570	2,484,025
Pass [Member] | Construction Loans [Member]
Internal risk-rating categories for the Company's commercial portfolio
Financing Receivable, Net	317,099	363,781
Pass [Member] | Small Business [Member]
Internal risk-rating categories for the Company's commercial portfolio
Financing Receivable, Net	120,304	93,008
Potential weakness [Member]
Internal risk-rating categories for the Company's commercial portfolio
Financing Receivable, Net	134,039	176,519
Potential weakness [Member] | Commercial and Industrial [Member]
Internal risk-rating categories for the Company's commercial portfolio
Financing Receivable, Net	46,176	54,375
Potential weakness [Member] | Commercial Real Estate [Member]
Internal risk-rating categories for the Company's commercial portfolio
Financing Receivable, Net	84,641	112,022
Potential weakness [Member] | Construction Loans [Member]
Internal risk-rating categories for the Company's commercial portfolio
Financing Receivable, Net	1,363	7,678
Potential weakness [Member] | Small Business [Member]
Internal risk-rating categories for the Company's commercial portfolio
Financing Receivable, Net	1,859	2,444
Definite weakness [Member]
Internal risk-rating categories for the Company's commercial portfolio
Financing Receivable, Net	121,640	81,990
Definite weakness [Member] | Commercial and Industrial [Member]
Internal risk-rating categories for the Company's commercial portfolio
Financing Receivable, Net	71,991	23,073
Definite weakness [Member] | Commercial Real Estate [Member]
Internal risk-rating categories for the Company's commercial portfolio
Financing Receivable, Net	47,164	56,276
Definite weakness [Member] | Construction Loans [Member]
Internal risk-rating categories for the Company's commercial portfolio
Financing Receivable, Net	1,929	1,909
Definite weakness [Member] | Small Business [Member]
Internal risk-rating categories for the Company's commercial portfolio
Financing Receivable, Net	556	732
Parital loss probable [Member]
Internal risk-rating categories for the Company's commercial portfolio
Financing Receivable, Net	2,491	1,248
Parital loss probable [Member] | Commercial and Industrial [Member]
Internal risk-rating categories for the Company's commercial portfolio
Financing Receivable, Net	61	75
Parital loss probable [Member] | Commercial Real Estate [Member]
Internal risk-rating categories for the Company's commercial portfolio
Financing Receivable, Net	2,423	1,111
Parital loss probable [Member] | Construction Loans [Member]
Internal risk-rating categories for the Company's commercial portfolio
Financing Receivable, Net	0	0
Parital loss probable [Member] | Small Business [Member]
Internal risk-rating categories for the Company's commercial portfolio
Financing Receivable, Net	7	62
Definite loss [Member]
Internal risk-rating categories for the Company's commercial portfolio
Financing Receivable, Net	0	0
Definite loss [Member] | Commercial and Industrial [Member]
Internal risk-rating categories for the Company's commercial portfolio
Financing Receivable, Net	0	0
Definite loss [Member] | Commercial Real Estate [Member]
Internal risk-rating categories for the Company's commercial portfolio
Financing Receivable, Net	0	0
Definite loss [Member] | Construction Loans [Member]
Internal risk-rating categories for the Company's commercial portfolio
Financing Receivable, Net	0	0
Definite loss [Member] | Small Business [Member]
Internal risk-rating categories for the Company's commercial portfolio
Financing Receivable, Net	$ 0	$ 0

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Weighted Average FICO Scores & weighted Average Combined LTV Ratios (Details) - score	Dec. 31, 2016	Dec. 31, 2015
Residential Portfolio Segment [Member]
Weighted average FICO scores and the weighted average combined LTV Ratio
FICO score (re-scored)	743	742
Financing Receivable With Credit Quality Of Loan Based Upon the Weighted Average Loan-To-Value Ratio	63.20%	61.40%
Home Equity [Member]
Weighted average FICO scores and the weighted average combined LTV Ratio
FICO score (re-scored)	767	765
Financing Receivable With Credit Quality Of Loan Based Upon the Weighted Average Loan-To-Value Ratio	55.90%	55.80%

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Summary of Nonaccrual Loans (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Financing Receivable Impaired [Line Items]
TDRs on nonaccrual status	$ 5,199	$ 5,225
Financing Receivable, Recorded Investment, Nonaccrual Status	57,405	27,690
Commercial and Industrial [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	37,455	3,699
Commercial Real Estate [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	6,266	7,856
Construction Loans [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	0	304
Small Business [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	302	239
Residential Real Estate [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	7,782	8,795
Home Equity [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	5,553	6,742
Consumer Portfolio Segment [Member]
Financing Receivable Impaired [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	$ 47	$ 55

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Age Analysis of Past Due Financing receivables (Details) $ in Thousands	Dec. 31, 2016 USD ($) loan	Dec. 31, 2015 USD ($) loan	Dec. 31, 2014 USD ($)
Age Analysis of Past Due Financing Receivables
Number of Loans 30-59 Days | loan	301	377
Number of Loans 60-89 Days | loan	72	48
Number of Loans 90 Days or More | loan	91	87
Number of Loans Total Past Due | loan	464	512
Principal Balance Total Past Due	$ 19,911	$ 31,057
Current	5,979,694	5,516,664
Total loans	5,999,605	5,547,721	$ 4,970,733	[1]
Recorded Investment >90 Days and Accruing	$ 2	$ 0
Commercial and Industrial [Member]
Age Analysis of Past Due Financing Receivables
Number of Loans 30-59 Days | loan	8	9
Number of Loans 60-89 Days | loan	32	4
Number of Loans 90 Days or More | loan	6	8
Number of Loans Total Past Due | loan	46	21
Principal Balance Total Past Due	$ 2,833	$ 4,459
Current	899,220	838,817
Total loans	902,053	843,276	860,839
Recorded Investment >90 Days and Accruing	$ 0	$ 0
Commercial Real Estate [Member]
Age Analysis of Past Due Financing Receivables
Number of Loans 30-59 Days | loan	5	19
Number of Loans 60-89 Days | loan	8	6
Number of Loans 90 Days or More | loan	8	13
Number of Loans Total Past Due | loan	21	38
Principal Balance Total Past Due	$ 6,580	$ 13,434
Current	3,004,218	2,640,000
Total loans	3,010,798	2,653,434	2,347,323
Recorded Investment >90 Days and Accruing	$ 0	$ 0
Construction Loans [Member]
Age Analysis of Past Due Financing Receivables
Number of Loans 30-59 Days | loan	0	0
Number of Loans 60-89 Days | loan	0	0
Number of Loans 90 Days or More | loan	0	1
Number of Loans Total Past Due | loan	0	1
Principal Balance Total Past Due	$ 0	$ 304
Current	320,391	373,064
Total loans	320,391	373,368	265,994
Recorded Investment >90 Days and Accruing	$ 0	$ 0
Small Business [Member]
Age Analysis of Past Due Financing Receivables
Number of Loans 30-59 Days | loan	9	11
Number of Loans 60-89 Days | loan	0	4
Number of Loans 90 Days or More | loan	19	13
Number of Loans Total Past Due | loan	28	28
Principal Balance Total Past Due	$ 463	$ 171
Current	122,263	96,075
Total loans	122,726	96,246	85,247
Recorded Investment >90 Days and Accruing	$ 0	$ 0
Residential Real Estate [Member]
Age Analysis of Past Due Financing Receivables
Number of Loans 30-59 Days | loan	11	20
Number of Loans 60-89 Days | loan	9	11
Number of Loans 90 Days or More | loan	27	19
Number of Loans Total Past Due | loan	47	50
Principal Balance Total Past Due	$ 6,734	$ 8,601
Current	637,692	630,005
Total loans	644,426	638,606	530,259
Recorded Investment >90 Days and Accruing	$ 0	$ 0
Home Equity [Member]
Age Analysis of Past Due Financing Receivables
Number of Loans 30-59 Days | loan	19	21
Number of Loans 60-89 Days | loan	11	11
Number of Loans 90 Days or More | loan	16	20
Number of Loans Total Past Due | loan	46	52
Principal Balance Total Past Due	$ 3,093	$ 3,767
Current	985,054	924,036
Total loans	988,147	927,803	863,863
Recorded Investment >90 Days and Accruing	$ 0	$ 0
Consumer Portfolio Segment [Member]
Age Analysis of Past Due Financing Receivables
Number of Loans 30-59 Days | loan	249	297
Number of Loans 60-89 Days | loan	12	12
Number of Loans 90 Days or More | loan	15	13
Number of Loans Total Past Due | loan	276	322
Principal Balance Total Past Due	$ 208	$ 321
Current	10,856	14,667
Total loans	11,064	14,988	$ 17,208
Recorded Investment >90 Days and Accruing	2	0
Financing Receivables, 30 to 59 Days Past Due [Member]
Age Analysis of Past Due Financing Receivables
Principal Balance Total Past Due	4,519	12,717
Financing Receivables, 30 to 59 Days Past Due [Member] | Commercial and Industrial [Member]
Age Analysis of Past Due Financing Receivables
Principal Balance Total Past Due	100	399
Financing Receivables, 30 to 59 Days Past Due [Member] | Commercial Real Estate [Member]
Age Analysis of Past Due Financing Receivables
Principal Balance Total Past Due	1,518	7,349
Financing Receivables, 30 to 59 Days Past Due [Member] | Construction Loans [Member]
Age Analysis of Past Due Financing Receivables
Principal Balance Total Past Due	0	0
Financing Receivables, 30 to 59 Days Past Due [Member] | Small Business [Member]
Age Analysis of Past Due Financing Receivables
Principal Balance Total Past Due	323	93
Financing Receivables, 30 to 59 Days Past Due [Member] | Residential Real Estate [Member]
Age Analysis of Past Due Financing Receivables
Principal Balance Total Past Due	1,277	3,119
Financing Receivables, 30 to 59 Days Past Due [Member] | Home Equity [Member]
Age Analysis of Past Due Financing Receivables
Principal Balance Total Past Due	1,117	1,526
Financing Receivables, 30 to 59 Days Past Due [Member] | Consumer Portfolio Segment [Member]
Age Analysis of Past Due Financing Receivables
Principal Balance Total Past Due	184	231
Financing Receivables, 60 to 89 Days Past Due [Member]
Age Analysis of Past Due Financing Receivables
Principal Balance Total Past Due	4,944	5,674
Financing Receivables, 60 to 89 Days Past Due [Member] | Commercial and Industrial [Member]
Age Analysis of Past Due Financing Receivables
Principal Balance Total Past Due	253	1,021
Financing Receivables, 60 to 89 Days Past Due [Member] | Commercial Real Estate [Member]
Age Analysis of Past Due Financing Receivables
Principal Balance Total Past Due	1,957	1,627
Financing Receivables, 60 to 89 Days Past Due [Member] | Construction Loans [Member]
Age Analysis of Past Due Financing Receivables
Principal Balance Total Past Due	0	0
Financing Receivables, 60 to 89 Days Past Due [Member] | Small Business [Member]
Age Analysis of Past Due Financing Receivables
Principal Balance Total Past Due	0	9
Financing Receivables, 60 to 89 Days Past Due [Member] | Residential Real Estate [Member]
Age Analysis of Past Due Financing Receivables
Principal Balance Total Past Due	1,950	2,049
Financing Receivables, 60 to 89 Days Past Due [Member] | Home Equity [Member]
Age Analysis of Past Due Financing Receivables
Principal Balance Total Past Due	767	903
Financing Receivables, 60 to 89 Days Past Due [Member] | Consumer Portfolio Segment [Member]
Age Analysis of Past Due Financing Receivables
Principal Balance Total Past Due	17	65
Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Age Analysis of Past Due Financing Receivables
Principal Balance Total Past Due	10,448	12,666
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Commercial and Industrial [Member]
Age Analysis of Past Due Financing Receivables
Principal Balance Total Past Due	2,480	3,039
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Commercial Real Estate [Member]
Age Analysis of Past Due Financing Receivables
Principal Balance Total Past Due	3,105	4,458
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Construction Loans [Member]
Age Analysis of Past Due Financing Receivables
Principal Balance Total Past Due	0	304
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Small Business [Member]
Age Analysis of Past Due Financing Receivables
Principal Balance Total Past Due	140	69
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Residential Real Estate [Member]
Age Analysis of Past Due Financing Receivables
Principal Balance Total Past Due	3,507	3,433
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Home Equity [Member]
Age Analysis of Past Due Financing Receivables
Principal Balance Total Past Due	1,209	1,338
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Consumer Portfolio Segment [Member]
Age Analysis of Past Due Financing Receivables
Principal Balance Total Past Due	$ 7	$ 25

[1] The amount of net deferred costs on originated loans included in the ending balance was $5.1 million, $4.3 million, and $2.8 million at December 31, 2016, 2015, and 2014, respectively. Net unamortized discounts on acquired loans not deemed to be PCI included in the ending balance was $8.6 million, $6.6 million, and $1.9 million at December 31, 2016, 2015, and 2014, respectively.

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TDR's and Other Pertinent Information (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Summary of Troubled Debt Restructurings and other pertinent information
TDRs on accrual status	$ 27,093	$ 32,849
TDRs on nonaccrual status	5,199	5,225
Total TDRs	32,292	38,074
Amount of specific reserves included in the allowance for loan loss associated with TDRs:	1,417	1,628
Additional commitments to lend to a borrower who has been a party to a TDR:	$ 1,378	$ 972

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Modification which Occurred During the Period & Change in Recorded Investment(Details) $ in Thousands	12 Months Ended
	Dec. 31, 2016 USD ($) contract	Dec. 31, 2015 USD ($) contract	Dec. 31, 2014 USD ($) contract
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts | contract	50	44	51
Financing Receivable, Modifications, Pre-Modification Recorded Investment	$ 7,663	$ 6,085	$ 7,609
TROUBLED DEBT RESTRUCTURINGS:
Post-Modification Outstanding Recorded Investment	$ 7,705	$ 6,112	$ 7,645
Consumer Portfolio Segment [Member]
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts | contract	6		1
Financing Receivable, Modifications, Pre-Modification Recorded Investment	$ 153		$ 8
TROUBLED DEBT RESTRUCTURINGS:
Post-Modification Outstanding Recorded Investment	$ 153		$ 8
Home Equity Line of Credit [Member]
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts | contract	13	8	11
Financing Receivable, Modifications, Pre-Modification Recorded Investment	$ 932	$ 694	$ 923
TROUBLED DEBT RESTRUCTURINGS:
Post-Modification Outstanding Recorded Investment	$ 932	$ 694	$ 926
Residential Real Estate [Member]
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts | contract	8	8	9
Financing Receivable, Modifications, Pre-Modification Recorded Investment	$ 1,808	$ 843	$ 1,535
TROUBLED DEBT RESTRUCTURINGS:
Post-Modification Outstanding Recorded Investment	$ 1,850	$ 870	$ 1,568
Small Business [Member]
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts | contract	3	9	5
Financing Receivable, Modifications, Pre-Modification Recorded Investment	$ 188	$ 293	$ 133
TROUBLED DEBT RESTRUCTURINGS:
Post-Modification Outstanding Recorded Investment	$ 188	$ 293	$ 133
Commercial Real Estate [Member]
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts | contract	10	6	13
Financing Receivable, Modifications, Pre-Modification Recorded Investment	$ 2,959	$ 2,941	$ 4,329
TROUBLED DEBT RESTRUCTURINGS:
Post-Modification Outstanding Recorded Investment	$ 2,959	$ 2,941	$ 4,329
Commercial And Industrial [Member]
Financing Receivable, Modifications [Line Items]
Financing Receivable, Modifications, Number of Contracts | contract	10	13	12
Financing Receivable, Modifications, Pre-Modification Recorded Investment	$ 1,623	$ 1,314	$ 681
TROUBLED DEBT RESTRUCTURINGS:
Post-Modification Outstanding Recorded Investment	$ 1,623	$ 1,314	$ 681

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Post-modification balance of TDRs Listed by type of Modification(Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Loans, Allowance for Loan Losses and Credit Quality [Abstract]
Extended maturity	$ 5,044	$ 2,936	$ 3,441
Adjusted interest rate	92	0	727
Combination rate and maturity	1,035	2,199	2,640
Court ordered concession	1,534	977	837
Total	$ 7,705	$ 6,112	$ 7,645

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TDR's that have subsequent default (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2016 USD ($) contract	Dec. 31, 2015 USD ($) contract	Dec. 31, 2014 USD ($) contract
TROUBLED DEBT RESTRUCTURINGS THAT SUBSEQUENTLY DEFAULTED:
Recorded Investment | $	$ 249	$ 1,267	$ 410
Financing Receivable, Modifications, Subsequent Default, Number of Contracts | contract	1	7	5
Commercial And Industrial [Member]
TROUBLED DEBT RESTRUCTURINGS THAT SUBSEQUENTLY DEFAULTED:
Recorded Investment | $	$ 0	$ 339	$ 196
Financing Receivable, Modifications, Subsequent Default, Number of Contracts | contract	0	3	2
Commercial Real Estate [Member]
TROUBLED DEBT RESTRUCTURINGS THAT SUBSEQUENTLY DEFAULTED:
Recorded Investment | $	$ 249	$ 502	$ 0
Financing Receivable, Modifications, Subsequent Default, Number of Contracts | contract	1	1	0
Residential Real Estate [Member]
TROUBLED DEBT RESTRUCTURINGS THAT SUBSEQUENTLY DEFAULTED:
Recorded Investment | $	$ 0	$ 326	$ 214
Financing Receivable, Modifications, Subsequent Default, Number of Contracts | contract	0	2	3
Home Equity Line of Credit [Member]
TROUBLED DEBT RESTRUCTURINGS THAT SUBSEQUENTLY DEFAULTED:
Recorded Investment | $	$ 0	$ 100	$ 0
Financing Receivable, Modifications, Subsequent Default, Number of Contracts | contract	0	1	0

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Imparied Loan Information by Portfolio (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Impaired loans by loan portfolio
Financing Receivable, Allowance for Credit Losses, Individually Evaluated for Impairment	$ 5,214	$ 1,930	$ 2,416
Related Allowance	5,214	1,930	2,416
Recorded Investment	77,297	51,410	58,035
Unpaid Principal Balance	81,071	54,822	61,887
Average Recorded Investment	77,209	51,678	62,202
Interest Income Recognized	2,700	1,993	3,242
Commercial and Industrial [Member]
Impaired loans by loan portfolio
Financing Receivable, Allowance for Credit Losses, Individually Evaluated for Impairment	3,661	183	412
Commercial Real Estate [Member]
Impaired loans by loan portfolio
Financing Receivable, Allowance for Credit Losses, Individually Evaluated for Impairment	196	204	197
Construction Loans [Member]
Impaired loans by loan portfolio
Financing Receivable, Allowance for Credit Losses, Individually Evaluated for Impairment	0	0	0
Small Business [Member]
Impaired loans by loan portfolio
Financing Receivable, Allowance for Credit Losses, Individually Evaluated for Impairment	8	4	7
Residential Real Estate [Member]
Impaired loans by loan portfolio
Financing Receivable, Allowance for Credit Losses, Individually Evaluated for Impairment	1,086	1,278	1,500
Home Equity [Member]
Impaired loans by loan portfolio
Financing Receivable, Allowance for Credit Losses, Individually Evaluated for Impairment	242	238	262
Consumer Portfolio Segment [Member]
Impaired loans by loan portfolio
Financing Receivable, Allowance for Credit Losses, Individually Evaluated for Impairment	21	23	38
With No Related Allowance Recorded [Member]
Impaired loans by loan portfolio
Recorded Investment	49,745	24,403	26,936
Unpaid Principal Balance	52,377	26,276	28,535
Average Recorded Investment	48,814	24,774	29,464
Interest Income Recognized	1,764	835	1,665
Related Allowance	0	0	0
With No Related Allowance Recorded [Member] | Commercial and Industrial [Member]
Impaired loans by loan portfolio
Recorded Investment	28,776	2,613	3,005
Unpaid Principal Balance	29,772	3,002	3,278
Average Recorded Investment	26,472	3,024	4,557
Interest Income Recognized	927	71	258
Related Allowance	0	0	0
With No Related Allowance Recorded [Member] | Commercial Real Estate [Member]
Impaired loans by loan portfolio
Recorded Investment	11,628	12,008	15,982
Unpaid Principal Balance	12,891	13,128	17,164
Average Recorded Investment	12,744	11,676	16,703
Interest Income Recognized	437	375	1,025
Related Allowance	0	0	0
With No Related Allowance Recorded [Member] | Construction Loans [Member]
Impaired loans by loan portfolio
Recorded Investment		304	311
Unpaid Principal Balance		305	311
Average Recorded Investment		308	311
Interest Income Recognized		0	13
Related Allowance		0	0
With No Related Allowance Recorded [Member] | Small Business [Member]
Impaired loans by loan portfolio
Recorded Investment	494	527	692
Unpaid Principal Balance	569	618	718
Average Recorded Investment	534	584	772
Interest Income Recognized	20	22	45
Related Allowance	0	0	0
With No Related Allowance Recorded [Member] | Residential Real Estate [Member]
Impaired loans by loan portfolio
Recorded Investment	4,216	3,874	2,439
Unpaid Principal Balance	4,427	4,033	2,502
Average Recorded Investment	4,302	3,958	2,493
Interest Income Recognized	185	157	102
Related Allowance	0	0	0
With No Related Allowance Recorded [Member] | Home Equity [Member]
Impaired loans by loan portfolio
Recorded Investment	4,485	4,893	4,169
Unpaid Principal Balance	4,572	5,005	4,221
Average Recorded Investment	4,602	5,023	4,264
Interest Income Recognized	184	195	198
Related Allowance	0	0	0
With No Related Allowance Recorded [Member] | Consumer Portfolio Segment [Member]
Impaired loans by loan portfolio
Recorded Investment	146	184	338
Unpaid Principal Balance	146	185	341
Average Recorded Investment	160	201	364
Interest Income Recognized	11	15	24
Related Allowance	0	0	0
With Allowance Recorded [Member]
Impaired loans by loan portfolio
Recorded Investment	27,552	27,007	31,099
Unpaid Principal Balance	28,694	28,546	33,352
Average Recorded Investment	28,395	26,904	32,738
Interest Income Recognized	936	1,158	1,577
With Allowance Recorded [Member] | Commercial and Industrial [Member]
Impaired loans by loan portfolio
Recorded Investment	10,402	2,534	1,649
Unpaid Principal Balance	10,440	2,648	1,859
Average Recorded Investment	10,760	2,848	2,032
Interest Income Recognized	325	48	98
With Allowance Recorded [Member] | Commercial Real Estate [Member]
Impaired loans by loan portfolio
Recorded Investment	5,185	10,978	14,747
Unpaid Principal Balance	5,533	11,047	15,514
Average Recorded Investment	5,491	10,789	15,650
Interest Income Recognized	200	592	842
With Allowance Recorded [Member] | Small Business [Member]
Impaired loans by loan portfolio
Recorded Investment	377	494	396
Unpaid Principal Balance	392	523	458
Average Recorded Investment	408	535	456
Interest Income Recognized	21	30	32
With Allowance Recorded [Member] | Residential Real Estate [Member]
Impaired loans by loan portfolio
Recorded Investment	9,959	11,531	12,616
Unpaid Principal Balance	10,530	12,652	13,727
Average Recorded Investment	10,065	11,669	12,817
Interest Income Recognized	332	460	537
With Allowance Recorded [Member] | Home Equity [Member]
Impaired loans by loan portfolio
Recorded Investment	1,378	1,096	1,161
Unpaid Principal Balance	1,547	1,287	1,264
Average Recorded Investment	1,403	655	1,203
Interest Income Recognized	50	14	46
With Allowance Recorded [Member] | Consumer Portfolio Segment [Member]
Impaired loans by loan portfolio
Recorded Investment	251	374	530
Unpaid Principal Balance	252	389	530
Average Recorded Investment	268	408	580
Interest Income Recognized	$ 8	$ 14	$ 22

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Purchased Credit Impaired Loans - Outstanding/Carrying Balance (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Outstanding Balance	$ 20,477	$ 23,199
Financing Receivable, Net	4,355,968	3,966,324
Receivables Acquired with Deteriorated Credit Quality [Member]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items]
Financing Receivable, Net	$ 18,392	$ 20,595	$ 22,315

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LOANS, ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Loans, Allowance for Loan Losses and Credit Quality [Abstract]
Unamortized Loan Commitment and Origination fees	$ 5,100,000	$ 4,300,000	$ 2,800,000
Unamortized Discounts or Premiums	8,600,000	6,600,000	$ 1,900,000
Discretionary Nonaccrual	$ 34,600,000
Days To Be Termed As Non Accrual Loans	90 days
Significant advanced considered for risk rating change	$ 50,000
TDRs on nonaccrual status	5,199,000	5,225,000
Restructuring Cost and Reserve [Line Items]
Other Real Estate	4,173,000	$ 2,159,000
New England Bancorp, Inc. [Member]
Restructuring Cost and Reserve [Line Items]
Other Real Estate	$ 2,100,000

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LOANS, ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY Activity in the Accretable Yield PCI Loans(Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Certain Loans Acquired in Transfer Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward]
Beginning balance	$ 2,827	$ 2,974
Acquisition	0	319
Accretion	(1,540)	(2,485)
Certainloansacquiredinatransfernotaccountedforasdebtsecuritiesaccretableyieldadjustmentchangesinexpectedcashflow	953	1,721
Reclassification from nonaccretable difference for loans with improved cash flows	130	298
Ending balance	$ 2,370	$ 2,827

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LOANS, ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY Foreclosed Residential Real Estate Property (Details) - USD ($) $ in Thousands	Dec. 31, 2016		Dec. 31, 2015
Foreclosed Residential Real Estate Property [Line Items]
Foreclosed residential real estate property held by the creditor	$ 3,775	[1]	$ 1,430
Mortgage Loans in Process of Foreclosure, Amount	$ 1,715		$ 1,059

[1] (1) Inclusive of acquired other real estate owned of $2.1 million relating to the NEB acquisition.

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BANK PREMISES AND EQUIPMENT (Details) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Property, Plant and Equipment [Line Items]
Total cost	$ 146,762,000	$ 138,115,000
Accumulated depreciation	(68,282,000)	(62,452,000)
Net bank premises and equipment	78,480,000	75,663,000
Depreciation expense	7,300,000	7,000,000	$ 6,600,000
Impairment of Long-Lived Assets to be Disposed of	16,000	109,000	$ 670,000
Land [Member]
Property, Plant and Equipment [Line Items]
Total cost	20,585,000	20,780,000
Bank Premises [Member]
Property, Plant and Equipment [Line Items]
Total cost	$ 43,553,000	39,182,000
Bank Premises [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	5 years
Bank Premises [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	39 years
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Total cost	$ 24,387,000	22,817,000
Leasehold Improvements [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	4 years
Leasehold Improvements [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	27 years
Furniture and Equipment [Member]
Property, Plant and Equipment [Line Items]
Total cost	$ 58,237,000	$ 55,336,000
Furniture and Equipment [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	1 year
Furniture and Equipment [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	12 years

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GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Finite-Lived Intangible Assets [Line Items]
Goodwill	$ 221,526	$ 201,083	$ 170,421
Other Intangible Assets	9,848	11,826
Total goodwill and other intangible assets	231,374	212,909
Core deposit intangibles [Member]
Finite-Lived Intangible Assets [Line Items]
Other Intangible Assets	8,527	10,264
Other identifiable Intangible Assets [Member]
Finite-Lived Intangible Assets [Line Items]
Other Intangible Assets	$ 1,321	$ 1,562

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GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS (Details 1) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Goodwill [Roll Forward]
Balance at beginning of year	$ 201,083	$ 170,421
Acquisitions	20,443	30,662
Balance at end of year	$ 221,526	$ 201,083

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GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS (Details 2) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 26,937	$ 26,418
Accumulated Amortization	(17,089)	(14,592)
Net Carrying Amount	9,848	11,826
Core deposits [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	23,917	23,367
Accumulated Amortization	(15,390)	(13,103)
Net Carrying Amount	8,527	10,264
Other intangible assets [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	3,020	3,051
Accumulated Amortization	(1,699)	(1,489)
Net Carrying Amount	$ 1,321	$ 1,562

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GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS (Details 3) $ in Thousands	Dec. 31, 2016 USD ($)
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
2017	$ 3,002
2018	1,888
2019	1,232
2020	1,035
2021	$ 939

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GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS (Details Textual) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Finite-Lived Intangible Assets [Line Items]
Amortization of intangible assets	$ 2,800	$ 2,800	$ 2,300
Weighted average amortization period for intangible assets	9 years 9 months 18 days

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DEPOSITS (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Banking and Thrift [Abstract]
Deposit Liabilities Reclassified as Loans Receivable	$ 2,300	$ 2,800
Time Deposits, Fiscal Year Maturity [Abstract]
1 year or less	430,834	488,046
Over 1 year to 2 years	82,627	83,244
Over 2 years to 3 years	44,190	31,017
Over 3 years to 4 years	49,446	35,448
Over 4 years to 5 years	42,055	47,075
Time Deposits	$ 649,152	$ 684,830
1 year or less (as percent)	66.40%	71.20%
Over 1 years to 2 years (as percent)	12.70%	12.20%
Over 2 years to 3 years (as percent)	6.80%	4.50%
Over 3 years to 4 years (as percent)	7.60%	5.20%
Over 4 years to 5 years (as percent)	6.50%	6.90%
Time Deposits (as percent)	100.00%	100.00%
Deposit Liabilities, Collateral Issued, Description	299660	298789
Deposits over $250,000.00	$ 75,300	$ 69,600

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BORROWINGS (FHLB Advances) (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Debt Disclosure [Abstract]
Federal Home Loan Bank, Advances, Maturities Summary, Due in Next Twelve Months	$ 50,000	$ 52,025
Federal Home Loan Bank, Advances, Activity for Year, Average Interest Rate for Year	2.43%	1.23%
Federal Home Loan Bank, Advances, Maturities Summary, Due in Year Two	$ 0	$ 40,154
Federal Home Loan Bank, Advances, Maturities Summary, Average Interest Rate, One to Two Years from Balance Sheet Date	0.00%	3.10%
Federal Home Loan Bank, Advances, Maturities Summary, Due in Year Three	$ 0	$ 7,043
Federal Home Loan Bank, Advances, Maturities Summary, Average Interest Rate, Two to Three Years from Balance Sheet Date	0.00%	1.74%
Federal Home Loan Bank, Advances, Maturities Summary, Due in Year Four		$ 2,011
Federal Home Loan Bank, Advances, Maturities Summary, Average Interest Rate, Three to Four Years from Balance Sheet Date		1.99%
Federal Home Loan Bank, Advances, Branch of FHLB Bank, Amount of Advances	$ 50,000	$ 101,233
Federal Home Loan Bank, Advances, Weighted Average Interest Rate	2.43%	2.00%
Debt Instrument, Unamortized Premium	$ 819	$ 847
Total Federal Home Loan Bank Advances	$ 50,819	$ 102,080

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BORROWINGS Repurchase Agreements (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Assets Sold under Agreements to Repurchase [Line Items]
Assets Sold under Agreements to Repurchase, Repurchase Liability	$ 176,913	$ 133,958
U.S. Government agency securities
Assets Sold under Agreements to Repurchase [Line Items]
Assets Sold under Agreements to Repurchase, Repurchase Liability	20,233	10,157
Agency mortgage-backed securities
Assets Sold under Agreements to Repurchase [Line Items]
Assets Sold under Agreements to Repurchase, Repurchase Liability	79,079	69,142
Collateralized Debt Obligations [Member]
Assets Sold under Agreements to Repurchase [Line Items]
Assets Sold under Agreements to Repurchase, Repurchase Liability	77,601	54,659
Maturity Overnight [Member]
Assets Sold under Agreements to Repurchase [Line Items]
Assets Sold under Agreements to Repurchase, Repurchase Liability	176,913	133,958
Maturity Overnight [Member] | U.S. Government agency securities
Assets Sold under Agreements to Repurchase [Line Items]
Assets Sold under Agreements to Repurchase, Repurchase Liability	20,233	10,157
Maturity Overnight [Member] | Agency mortgage-backed securities
Assets Sold under Agreements to Repurchase [Line Items]
Assets Sold under Agreements to Repurchase, Repurchase Liability	79,079	69,142
Maturity Overnight [Member] | Collateralized Debt Obligations [Member]
Assets Sold under Agreements to Repurchase [Line Items]
Assets Sold under Agreements to Repurchase, Repurchase Liability	77,601	54,659
Maturity 30 to 90 Days [Member]
Assets Sold under Agreements to Repurchase [Line Items]
Assets Sold under Agreements to Repurchase, Repurchase Liability	0	0
Maturity 30 to 90 Days [Member] | U.S. Government agency securities
Assets Sold under Agreements to Repurchase [Line Items]
Assets Sold under Agreements to Repurchase, Repurchase Liability	0	0
Maturity 30 to 90 Days [Member] | Agency mortgage-backed securities
Assets Sold under Agreements to Repurchase [Line Items]
Assets Sold under Agreements to Repurchase, Repurchase Liability	0	0
Maturity 30 to 90 Days [Member] | Collateralized Debt Obligations [Member]
Assets Sold under Agreements to Repurchase [Line Items]
Assets Sold under Agreements to Repurchase, Repurchase Liability	0	0
Maturity Less than 30 Days [Member]
Assets Sold under Agreements to Repurchase [Line Items]
Assets Sold under Agreements to Repurchase, Repurchase Liability	0	0
Maturity Less than 30 Days [Member] | U.S. Government agency securities
Assets Sold under Agreements to Repurchase [Line Items]
Assets Sold under Agreements to Repurchase, Repurchase Liability	0	0
Maturity Less than 30 Days [Member] | Agency mortgage-backed securities
Assets Sold under Agreements to Repurchase [Line Items]
Assets Sold under Agreements to Repurchase, Repurchase Liability	0	0
Maturity Less than 30 Days [Member] | Collateralized Debt Obligations [Member]
Assets Sold under Agreements to Repurchase [Line Items]
Assets Sold under Agreements to Repurchase, Repurchase Liability	0	0
Maturity Greater than 90 Days [Member]
Assets Sold under Agreements to Repurchase [Line Items]
Assets Sold under Agreements to Repurchase, Repurchase Liability	0	0
Maturity Greater than 90 Days [Member] | U.S. Government agency securities
Assets Sold under Agreements to Repurchase [Line Items]
Assets Sold under Agreements to Repurchase, Repurchase Liability	0	0
Maturity Greater than 90 Days [Member] | Agency mortgage-backed securities
Assets Sold under Agreements to Repurchase [Line Items]
Assets Sold under Agreements to Repurchase, Repurchase Liability	0	0
Maturity Greater than 90 Days [Member] | Collateralized Debt Obligations [Member]
Assets Sold under Agreements to Repurchase [Line Items]
Assets Sold under Agreements to Repurchase, Repurchase Liability	$ 0	$ 0

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BORROWINGS (Long-Term Debt) (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Debt Instrument [Line Items]
Total Long-Term Borrowings	$ 107,742	$ 107,895
Subordinated Debt	34,635	34,589
Junior Subordinated Debentures [Member] | Capital Trust V Preferred Securities Due in 2037 [Member]
Debt Instrument [Line Items]
Total Long-Term Borrowings	51,500	51,497
Junior Subordinated Debentures [Member] | Slades Ferry Trust I Preferred Securities Due in 2034 [Member]
Debt Instrument [Line Items]
Total Long-Term Borrowings	10,224	10,219
Junior Subordinated Debentures [Member] | Central Bancorp Capital Trust I Securities Due in 2034 [Member]
Debt Instrument [Line Items]
Total Long-Term Borrowings	5,302	5,516
Junior Subordinated Debentures [Member] | Central Bancorp Capital Trust II Securities Due in 2037 [Member]
Debt Instrument [Line Items]
Total Long-Term Borrowings	$ 6,081	$ 6,074

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BORROWINGS (Trust Preferred Securities) (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Debt Instrument [Line Items]
Face Amount		$ 71.0
Junior Subordinated Debentures [Member]
Debt Instrument [Line Items]
Face Amount	$ 71.0
Junior Subordinated Debentures [Member] | Capital Trust V Preferred Securities Due in 2037 [Member]
Debt Instrument [Line Items]
Face Amount	$ 50.0
Fixed rate	2.44%
Junior Subordinated Debentures [Member] | Capital Trust V Preferred Securities Due in 2037 [Member] | LIBOR [Member]
Debt Instrument [Line Items]
Basis spread on variable rate	1.48%
Junior Subordinated Debentures [Member] | Slades Ferry Trust I Preferred Securities Due in 2034 [Member]
Debt Instrument [Line Items]
Face Amount	$ 10.0
Fixed rate	3.78%
Junior Subordinated Debentures [Member] | Slades Ferry Trust I Preferred Securities Due in 2034 [Member] | LIBOR [Member]
Debt Instrument [Line Items]
Basis spread on variable rate	2.79%
Junior Subordinated Debentures [Member] | Central Bancorp Capital Trust I Securities Due in 2034 [Member]
Debt Instrument [Line Items]
Face Amount	$ 5.1
Fixed rate	3.40%
Junior Subordinated Debentures [Member] | Central Bancorp Capital Trust I Securities Due in 2034 [Member] | LIBOR [Member]
Debt Instrument [Line Items]
Basis spread on variable rate	2.44%
Junior Subordinated Debentures [Member] | Central Bancorp Capital Trust II Securities Due in 2037 [Member]
Debt Instrument [Line Items]
Face Amount	$ 5.9
Fixed rate	7.015%
Junior Subordinated Debentures [Member] | Central Bancorp Capital Trust II Securities Due in 2037 [Member] | LIBOR [Member]
Debt Instrument [Line Items]
Basis spread on variable rate	1.65%
Subordinated Debt [Member] | Subordinated Debentures Due in October 2019 [Member] | LIBOR [Member]
Debt Instrument [Line Items]
Basis spread on variable rate	3.00%
Subordinated Debt [Member] | Subordinated Debentures Due in November 2019 [Member] [Domain]
Debt Instrument [Line Items]
Fixed rate	4.75%
Subordinated Debt [Member] | Subordinated Debentures Due in November 2019 [Member] [Domain] | LIBOR [Member]
Debt Instrument [Line Items]
Basis spread on variable rate	2.98%

XML

BORROWINGS (Maturities of Long-Term Debt) (Details) $ in Thousands	Dec. 31, 2016 USD ($)
Junior Subordinated Debentures [Member] | Capital Trust V Preferred Securities Due in 2037 [Member]
Long-term Debt, Fiscal Year Maturity [Abstract]
2015	$ 0
2016	0
2017	0
2018	0
2019	0
Thereafter	51,547
Total	51,547
Junior Subordinated Debentures [Member] | Slades Ferry Trust I Preferred Securities Due in 2034 [Member]
Long-term Debt, Fiscal Year Maturity [Abstract]
2015	0
2016	0
2017	0
2018	0
2019	0
Thereafter	10,310
Total	10,310
Junior Subordinated Debentures [Member] | Central Bancorp Capital Trust I Securities Due in 2034 [Member]
Long-term Debt, Fiscal Year Maturity [Abstract]
2015	0
2016	0
2017	0
2018	0
2019	0
Thereafter	5,258
Total	5,258
Junior Subordinated Debentures [Member] | Central Bancorp Capital Trust II Securities Due in 2037 [Member]
Long-term Debt, Fiscal Year Maturity [Abstract]
2015	0
2016	0
2017	0
2018	0
2019	0
Thereafter	6,083
Total	6,083
Subordinated Debentures [Member] | Subordinated Debentures Due August 27, 2018 [Member]
Long-term Debt, Fiscal Year Maturity [Abstract]
2015	0
2016	0
2017	0
2018	0
2019	0
Thereafter	35,000
Total	$ 35,000

XML

BORROWINGS (Details Textual) - USD ($)	3 Months Ended								12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Debt Instrument [Line Items]
Repayments of Subordinated Debt									$ 0	$ 30,000,000
Subordinated Debt	$ 34,635,000				$ 34,589,000				34,635,000	34,589,000
Customer Repurchase Agreements					134,000,000					134,000,000
Interest Expense, Long-term Debt									5,800,000	6,600,000	$ 6,400,000
Gains (Losses) on Extinguishment of Debt	0	$ 0	$ 0	$ (437,000)	0	$ 0	$ 0	$ (122,000)	(437,000)	(122,000)	0
Loans Pledged as Collateral	$ 1,400,000,000				$ 1,432,820,000				$ 1,400,000,000	$ 1,432,820,000
Federal Home Loan Bank Advances Weighted Average Interest Rate inclusive of Swaps	3.42%				2.60%				3.42%	2.60%
Repayments of Debt									$ 49,000,000	$ 13,000,000
Customer Repurchase Agreements and other short-term borrowings	$ 176,913,000				$ 133,958,000				176,913,000	133,958,000
Interest expense on short-term borrowings									208,000	210,000	$ 200,000
Total Long-Term Borrowings	107,742,000				107,895,000				107,742,000	107,895,000
Parent Company [Member]
Debt Instrument [Line Items]
Subordinated Debt	35,000,000				35,000,000				35,000,000	35,000,000
Capital Trust V Preferred Securities Due in 2037 [Member] | Junior Subordinated Debt [Member]
Debt Instrument [Line Items]
Total Long-Term Borrowings	$ 51,500,000				51,497,000				$ 51,500,000	51,497,000
Fixed rate	2.44%								2.44%
Debt Instrument, interest rate, stated rate inclusive of interest rate swap - expired	6.52%								6.52%
Debt Instrument, interest rate, stated rate inclusive of interest rate swap - forward starting	2.84%								2.84%
Capital Trust V Preferred Securities Due in 2037 [Member] | Junior Subordinated Debt [Member] | LIBOR [Member]
Debt Instrument [Line Items]
Basis spread on variable rate									1.48%
Subordinated Debentures Due in October 2019 [Member] | Subordinated Debentures [Member] | LIBOR [Member]
Debt Instrument [Line Items]
Basis spread on variable rate									3.00%
Subordinated Debentures Due in November 2019 [Member] [Domain] | Subordinated Debentures [Member]
Debt Instrument [Line Items]
Fixed rate	4.75%								4.75%
Subordinated Debentures Due in November 2019 [Member] [Domain] | Subordinated Debentures [Member] | LIBOR [Member]
Debt Instrument [Line Items]
Basis spread on variable rate									2.98%
Slades Ferry Trust I Preferred Securities Due in 2034 [Member] | Junior Subordinated Debt [Member]
Debt Instrument [Line Items]
Total Long-Term Borrowings	$ 10,224,000				10,219,000				$ 10,224,000	10,219,000
Fixed rate	3.78%								3.78%
Slades Ferry Trust I Preferred Securities Due in 2034 [Member] | Junior Subordinated Debt [Member] | LIBOR [Member]
Debt Instrument [Line Items]
Basis spread on variable rate									2.79%
Central Bancorp Capital Trust I Securities Due in 2034 [Member] | Junior Subordinated Debt [Member]
Debt Instrument [Line Items]
Total Long-Term Borrowings	$ 5,302,000				5,516,000				$ 5,302,000	5,516,000
Fixed rate	3.40%								3.40%
Central Bancorp Capital Trust I Securities Due in 2034 [Member] | Junior Subordinated Debt [Member] | LIBOR [Member]
Debt Instrument [Line Items]
Basis spread on variable rate									2.44%
Federal Home Loan Bank Advances [Member]
Debt Instrument [Line Items]
Federal home loan bank unused remaining available borrowing capacity	$ 793,100,000				777,500,000				$ 793,100,000	777,500,000
Line of credit maximum borrowing capacity	5,000,000								5,000,000
Swap [Member] | Federal Home Loan Bank Advances [Member]
Debt Instrument [Line Items]
FHLB advances amount hedged	$ 25,000,000				$ 25,000,000				$ 25,000,000	$ 25,000,000
Derivative weighted average interest rate	2.85%				3.25%				2.85%	3.25%

XML

EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Earnings Per Share [Abstract]
Net income	$ 17,179	$ 20,484	$ 20,374	$ 18,611	$ 19,455	$ 18,594	$ 17,451	$ 9,460	$ 76,648	$ 64,960	$ 59,845
Weighted Average Shares (in shares)
Basic Shares (in shares)	26,710,029	26,324,316.000	26,304,129.000	26,275,323	26,238,004.000	26,200,621.000	26,149,593.000	24,959,865	26,404,071	25,891,382	23,899,562
Effect of dilutive securities (in shares)	60,022	53,072.000	47,885.000	43,409	52,772.000	63,493.000	71,819.000	80,215	51,847	68,566	93,815
Weighted average common shares (diluted) (in shares)	26,770,051	26,377,388	26,352,014	26,318,732	26,290,776.000	26,264,114.000	26,221,412.000	25,040,080	26,455,918	25,959,948	23,993,377.000
Net Income Available to Common Shareholders per Share (in dollars per share)
Basic EPS (in dollars per share)	$ 0.64	$ 0.78	$ 0.77	$ 0.71	$ 0.74	$ 0.71	$ 0.67	$ 0.38	$ 2.90	$ 2.51	$ 2.50
Effect of Dilutive Securities (in dollars per share)									0.00	(0.01)	(0.01)
Diluted EPS (in dollars per share)	$ 0.64	$ 0.78	$ 0.77	$ 0.71	$ 0.74	$ 0.71	$ 0.67	$ 0.38	$ 2.90	$ 2.50	$ 2.49

XML

EARNINGS PER SHARE (Details 1) - shares	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Performance Shares [Member]
Details of anti dilutive options to purchase common stock
Stock options	0	0	0
Stock options [Member]
Details of anti dilutive options to purchase common stock
Stock options	0	0	0

XML

CUMULATIVELY GRANTED AWARDS (Details)	Dec. 31, 2016 shares
2005 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Authorized Stock Awards	1,650,000
Cumulative Granted, Net of Forfeitures	1,188,426
Authorized but Unissued	461,574
2005 Plan [Member] | Stock options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Cumulative Granted, Net of Forfeitures	537,941
2005 Plan [Member] | Restricted stock awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Cumulative Granted, Net of Forfeitures	650,485
2010 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Authorized Stock Awards	314,600
Cumulative Granted, Net of Forfeitures	123,245
Authorized but Unissued	191,355
2010 Plan [Member] | Stock options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Cumulative Granted, Net of Forfeitures	37,000
2010 Plan [Member] | Restricted stock awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Cumulative Granted, Net of Forfeitures	86,245

XML

PRE TAX EXPENSE (Details 1) - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock based award expense		$ 2,965	$ 2,490	$ 2,712
Related tax benefits recognized in earnings		1,211	1,122	945
Stock options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock based award expense		0	0	36
Stock options [Member] | Director [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock based award expense		72	0	14
Restricted stock awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock based award expense	[1]	2,590	2,296	2,135
Restricted stock awards [Member] | Director [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock based award expense		$ 303	$ 194	$ 527

[1] Inclusive of compensation expense associated with time-vested and performance-based restricted stock awards.

XML

STOCK OPTION AWARDS DURING PERIOD (Details 3) - Stock options [Member] - $ / shares	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted	10,000
Weighted average grant date fair value of options granted (per share)	$ 11.03	$ 0.00	$ 0.00
2/20/2016 | 2010 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted	5,000
Vesting period	22 months
Investment Options, Expiration Date	Feb. 20, 2026
Expected volatility	32.44%
Expected life (years)	5 years 6 months
Expected dividend yield	2.28%
Risk free interest rate	1.29%
Weighted average grant date fair value of options granted (per share)	$ 10.59
Options Granted Date Two [Member] | 2010 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted	5,000
Vesting period	18 months
Investment Options, Expiration Date	Jul. 14, 2026
Expected volatility	32.28%
Expected life (years)	5 years 6 months
Expected dividend yield	2.37%
Risk free interest rate	1.14%
Weighted average grant date fair value of options granted (per share)	$ 11.46

XML

RELEVANT STOCK OPTION INFORMATION (Details 4) - Stock options [Member] - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value of stock options vested based on grant date fair value	$ 37	$ 14	$ 211
Intrinsic value of stock options exercised	494	3,362	1,210
Cash received from stock option exercises	680	6,105	6,285
Tax benefit realized on stock option exercises/repurchase	$ 204	$ 1,362	$ 442
Weighted average grant date fair value of options granted (per share)	$ 11.03	$ 0.00	$ 0.00

XML

STOCK OPTION ROLLFORWARD (Details 5) - Stock options [Member] - USD ($) $ / shares in Units, $ in Thousands		12 Months Ended
		Dec. 31, 2016		Dec. 31, 2015	Dec. 31, 2014
Stock Option Awards, Outstanding (in shares):
Balance outstanding at beginning of period		121,900
Granted		10,000
Exercised		(22,250)
Forfeited		0
Expired		0
Balance outstanding at end of period		109,650	[1]	121,900
Options outstanding and expected to vest at December 31, 2016	[2]	109,498
Options exercisable at December 31, 2016	[3]	102,984
Weighted Average Exercise Price, Outstanding (in usd per share):
Balance outstanding at beginning of period		$ 28.76
Granted		45.69
Exercised		30.58
Forfeited		0.00
Expired		0.00
Balance outstanding at end of period		29.93		$ 28.76
Options outstanding and expected to vest at December 31, 2016		29.91
Options exercisable at December 31, 2016		$ 28.91
Balance at December 31, 2016, Weighted average remaining contractual term (years)		3 years 7 days
Options outstanding and expected to vest at December 31, 2016, Weighted Average Remaining Contractual Term (years)		3 years 5 days
Options exercisable at December 31, 2016, Weighted Average Remaining Contractual Term (years)		2 years 7 months 8 days
Balance at December 31, 2016, Aggregate Intrinsic Value	[4]	$ 4,443
Options outstanding and expected to vest at December 31, 2016, Aggregate Instrinsic Value	[4]	4,439
Options exercisable at December 31, 2016, Aggregate Intrinsic Value	[4]	$ 4,278
Stock Option Awards, Nonvested (in shares)
Balance nonvested at beginning of period		0
Granted		10,000
Vested		(3,334)
Forfeited		0
Expired		0
Balance nonvested at end of period		6,666		0
Weighted Average Grant Date Fair Value, Nonvested (in dollars per share):
Balance nonvested at beginning of period		$ 0.00
Granted		11.03		$ 0.00	$ 0.00
Vested		11.03
Forfeited		0.00
Expired		0
Balance nonvested at end of period		$ 11.03		$ 0.00
Unrecognized compensation cost, including forfeiture estimate		$ 37
Weighted average remaining recognition period (years)		1 year 5 days

[1] Inclusive of 34,000 stock options outstanding to Directors.

[2] Inclusive of 33,848 vested stock options and expected to vest to Directors.

[3] Inclusive of 27,334 vested stock options outstanding to Directors.

[4] The aggregate intrinsic value in the preceding tables represents the total pre-tax intrinsic value, based on the average of the high price and low price at which the Company’s common stock traded on December 31, 2016 of $70.45, which would have been received by the option holders had they all exercised their options as of that date.

XML

RSA GRANTS (Details 6) - $ / shares		12 Months Ended
		Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Non Employee Director Stock Plan Member | 5/20/2014 | At The End of Period [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted				10,920
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	[1]			$ 35.08
Vesting terms	[2]			At the end of 5 years from grant date (2)
Restricted stock awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value		$ 43.01
Restricted stock awards [Member] | Employee Stock Plan [Member] | 2/11/2016 | Ratably Over Period [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted		51,475
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	[1]	$ 41.96
Vesting terms		Ratably over 5 years from grant date
Restricted stock awards [Member] | Employee Stock Plan [Member] | 3/1/2016 | Ratably Over Period [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted		600
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	[1]	$ 44.37
Vesting terms		Ratably over 5 years from grant date
Restricted stock awards [Member] | Employee Stock Plan [Member] | 9/19/2016 | Ratably Over Period [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted		800
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	[1]	$ 52.92
Vesting terms		Ratably over 5 years from grant date
Restricted stock awards [Member] | Employee Stock Plan [Member] | 11/7/2016 | Ratably Over Period [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted		500
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	[1]	$ 54.28
Vesting terms		Ratably over 5 years from grant date
Restricted stock awards [Member] | Employee Stock Plan [Member] | 2/11/2015 | Ratably Over Period [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted			31,500
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	[1]		$ 39.42
Vesting terms			Ratably over 5 years from grant date
Restricted stock awards [Member] | Employee Stock Plan [Member] | 2/12/2015 | Ratably Over Period [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted			25,910
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	[1]		$ 40.03
Vesting terms			Ratably over 5 years from grant date
Restricted stock awards [Member] | Employee Stock Plan [Member] | 3/19/2015 | Ratably Over Period [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted			3,800
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	[1]		$ 43.56
Vesting terms			Ratably over 5 years from grant date
Restricted stock awards [Member] | Employee Stock Plan [Member] | 4/27/2015 | At The End of Period [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted			625
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	[1]		$ 41.61
Vesting terms			At the end of 3 years from grant date
Restricted stock awards [Member] | Employee Stock Plan [Member] | 4/27/2015 | At The End of Period [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted			1,875
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	[1]		$ 41.61
Vesting terms			At the end of 5 years from grant date
Restricted stock awards [Member] | Employee Stock Plan [Member] | 10/13/2015 | Ratably Over Period [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted			1,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	[1]		$ 46.09
Vesting terms			Ratably over 5 years from grant date
Restricted stock awards [Member] | Employee Stock Plan [Member] | 10/20/2015 | Ratably Over Period [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted			2,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	[1]		$ 46.47
Vesting terms			Ratably over 5 years from grant date
Restricted stock awards [Member] | Employee Stock Plan [Member] | 3/20/2014 | Ratably Over Period [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted				65,950
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	[1]			$ 39.82
Vesting terms				Ratably over 5 years from grant date
Restricted stock awards [Member] | Employee Stock Plan [Member] | 3/31/2014 | Ratably Over Period [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted				3,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	[1]			$ 39.00
Vesting terms				Ratably over 3 years from grant date
Restricted stock awards [Member] | Employee Stock Plan [Member] | 11/20/2014 | Ratably Over Period [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted				2,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	[1]			$ 39.11
Vesting terms				Ratably over 5 years from grant date
Restricted stock awards [Member] | Employee Stock Plan [Member] | 12/11/2014 | Ratably Over Period [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted				2,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	[1]			$ 40.89
Vesting terms				Ratably over 5 years from grant date
Restricted stock awards [Member] | Non Employee Director Stock Plan Member | 5/24/2016 | At The End of Period [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted		8,700
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	[1]	$ 48.34
Vesting terms	[2]	At the end of 5 years from grant date (2)
Restricted stock awards [Member] | Non Employee Director Stock Plan Member | 11/14/2016 | At The End of Period [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted		725
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	[1]	$ 63.43
Vesting terms	[3]	Once on May 24, 2021 (3)
Restricted stock awards [Member] | Non Employee Director Stock Plan Member | 5/27/2015 | At The End of Period [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted			8,800
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	[1]		$ 45.02
Vesting terms	[2]		At the end of 5 years from grant date (2)
Restricted stock awards [Member] | Non Employee Director Stock Plan Member | 7/14/2015 | At The End of Period [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted			800
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	[1]		$ 47.82
Vesting terms	[4]		Once on May 27, 2020 (4)
Performance Shares [Member] | Employee Stock Plan [Member] | 2/11/2016 | At The End of Period [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted		20,450
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	[1]	$ 41.96
Vesting terms		The earlier of: the date on which it is determined if the performance goal has been achieved; or, March 31, 2019.
Performance Shares [Member] | Employee Stock Plan [Member] | 2/12/2015 | At The End of Period [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted			21,780
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	[1]		$ 40.03
Vesting terms			The earlier of: the date on which it is determined if the performance goal has been achieved; or, March 31, 2018.
Performance Shares [Member] | Employee Stock Plan [Member] | 3/20/2014 | At The End of Period [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted				20,700
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	[1]			$ 39.82
Vesting terms				The earlier of: the date on which it is determined if the performance goal has been achieved; or, March 31, 2017.

[1] The fair value of the restricted stock awards are based upon the average of the high and low prices at which the Company’s common stock traded on the date of grant. The holders of time-vested restricted stock awards participate fully in the rewards of stock ownership of the Company, including voting and dividend rights. The holders of performance-based restricted stock awards do not participate in the rewards of stock ownership of the Company until vested. The holders of all restricted stock awards are not required to pay any consideration to the Company for the awards.

[2] These restricted stock grants will vest at the end of a five year period, or earlier if the director ceases to be a director for any reason other than cause, such as, for example, by retirement.

[3] These restricted stock grants will vest on May 24, 2021, or earlier if the director ceases to be a director for any reason other than cause, such as, for example, by retirement.

[4] These restricted stock grants will vest on May 27, 2020, or earlier if the director ceases to be a director for any reason other than cause, such as, for example, by retirement.

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FV OF RSA VESTS (Details 7) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Restricted stock awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value of restricted stock awards upon vesting	$ 3,019	$ 2,610	$ 3,293

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RSA ROLLFORWARD (Details 8) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2016 USD ($) $ / shares shares
Oustanding (in shares):
Beginning balance	230,900
Ending balance	212,698
Restricted stock awards [Member]
Oustanding (in shares):
Beginning balance	264,944
Granted	83,250
Vested/Released	(67,242)
Forfeited	(16,637)
Ending balance	264,315	[1]
Weighted Average Grant Price (in usd per share):
Beginning balance | $ / shares	$ 36.03
Granted | $ / shares	43.01
Vested/Released | $ / shares	32.96
Forfeited | $ / shares	38.06
Ending balance | $ / shares	$ 38.88
Unrecognized compensation cost (inclusive of directors’ fees), including forfeiture estimate | $	$ 6,268
Weighted average remaining recognition period (years)	2 years 10 months 18 days

[1] Inclusive of 47,325 restricted stock awards outstanding to Directors.

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STOCK BASED COMPENSATION (Details Textual) - $ / shares		12 Months Ended
		Dec. 31, 2016		Dec. 31, 2015	Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number		212,698		230,900
Share Based Compensation Arrangement By Share Based Payment Award Options Price Per Share Common Stock Average High And Low Price Intrinsic Value		$ 70.45
Stock options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number		109,650	[1]	121,900
Options outstanding and expected to vest at December 31, 2016	[2]	109,498
Annualized estimated forfeitures		4.50%		4.50%	3.50%
Options exercisable at December 31, 2016	[3]	102,984
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares		6,666		0
Weighted average remaining recognition period (years)		1 year 5 days
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number		264,315	[4]	264,944
Weighted average remaining recognition period (years)		2 years 10 months 18 days
Director [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number		34,000
Options outstanding and expected to vest at December 31, 2016	[1]	33,848
Options exercisable at December 31, 2016	[1]	27,334
Director [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number		47,325
Two Thousand Five Amended and Restated Employee Stock Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized		1,650,000
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant		461,574
Two Thousand Ten Nonemployee Director Stock Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized		314,600
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant		191,355
Two Thousand Ten Nonemployee Director Stock Plan [Member] | Maximum [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period		5 years

[1] Inclusive of 34,000 stock options outstanding to Directors.

[2] Inclusive of 33,848 vested stock options and expected to vest to Directors.

[3] Inclusive of 27,334 vested stock options outstanding to Directors.

[4] Inclusive of 47,325 restricted stock awards outstanding to Directors.

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Derivatives and Hedging Activities (Derivative Positions for Interest Rate Swaps which Qualify as Hedges) (Details) - USD ($)		12 Months Ended
		Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Details of derivative positions for interest rate swaps which qualify as hedges for accounting purposes
Notional Amount		$ 75,000,000	$ 75,000,000
Fair Value		624,000	(3,273,000)
Amortization Of Deferred Hedge Gains Losses		244,000	244,000	$ 244,000
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Loss on Termination of Derivatives, before Tax				$ 1,122,000
Positions Five [Member]
Details of derivative positions for interest rate swaps which qualify as hedges for accounting purposes
Notional Amount	[1]	$ 25,000,000
Trade Date		Apr. 01, 2016
Effective Date		Jan. 17, 2017
Maturity Date		Dec. 15, 2021
Receive (Variable) Index		3 Month LIBOR
Current Rate Received		0.00%
Pay Fixed Swap Rate		1.36%
Fair Value		$ 689,000
Positions One [Member]
Details of derivative positions for interest rate swaps which qualify as hedges for accounting purposes
Notional Amount			$ 25,000,000
Trade Date			Feb. 16, 2006
Effective Date			Dec. 28, 2006
Maturity Date			Dec. 28, 2016
Receive (Variable) Index			3 Month LIBOR
Current Rate Received			0.51%
Pay Fixed Swap Rate			5.04%
Fair Value			$ (1,054,000)
Positions Six [Member]
Details of derivative positions for interest rate swaps which qualify as hedges for accounting purposes
Notional Amount	[1]	$ 25,000,000
Trade Date		Apr. 01, 2016
Effective Date		Jan. 17, 2017
Maturity Date		Dec. 15, 2021
Receive (Variable) Index		3 Month LIBOR
Current Rate Received		0.00%
Pay Fixed Swap Rate		1.36%
Fair Value		$ 675,000
Positions Two [Member]
Details of derivative positions for interest rate swaps which qualify as hedges for accounting purposes
Notional Amount			$ 25,000,000
Trade Date			Feb. 16, 2006
Effective Date			Dec. 28, 2006
Maturity Date			Dec. 28, 2016
Receive (Variable) Index			3 Month LIBOR
Current Rate Received			0.51%
Pay Fixed Swap Rate			5.04%
Fair Value			$ (1,055,000)
Positions Four [Member]
Details of derivative positions for interest rate swaps which qualify as hedges for accounting purposes
Notional Amount		$ 25,000,000	$ 25,000,000
Trade Date		Dec. 09, 2008	Dec. 09, 2008
Effective Date		Dec. 10, 2008	Dec. 10, 2008
Maturity Date		Dec. 10, 2018	Dec. 10, 2018
Receive (Variable) Index		3 Month LIBOR	3 Month LIBOR
Current Rate Received		0.95%	0.49%
Pay Fixed Swap Rate		2.94%	2.94%
Fair Value		$ (740,000)	$ (1,164,000)

[1] (1) In April 2016, the Company entered into two forward starting swaps with notional amounts of $25.0 million each, with the intention of hedging $50.0 million of existing junior subordinated debentures, as the current hedges on this borrowing expired in December 2016.

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Derivatives and Hedging Activities (Customer Related Derivative Positions - Not Designated as Hedges) (Details) $ in Thousands	Dec. 31, 2016 USD ($) position	Dec. 31, 2015 USD ($) position
Summary of customer related derivative positions, not designated as hedging
Total	$ 75,000	$ 75,000
Fair Value	$ 624	$ (3,273)
Not Designated as Hedging Instrument [Member] | Receive fixed, pay variable | Loan level derivatives
Summary of customer related derivative positions, not designated as hedging
Number of Positions (1) | position	222	171
Less than 1 year	$ 30,245	$ 37,732
Less than 2 years	21,708	34,424
Less than 3 years	63,771	29,629
Less than 4 years	165,783	77,041
Thereafter	567,897	488,110
Total	849,404	666,936
Fair Value	$ 12,005	$ 22,467
Not Designated as Hedging Instrument [Member] | Pay fixed, receive variable | Loan level derivatives
Summary of customer related derivative positions, not designated as hedging
Number of Positions (1) | position	207	165
Less than 1 year	$ 30,245	$ 37,732
Less than 2 years	21,708	34,424
Less than 3 years	63,771	29,629
Less than 4 years	165,783	77,041
Thereafter	567,897	488,110
Total	849,404	666,936
Fair Value	$ (12,008)	$ (22,462)
Not Designated as Hedging Instrument [Member] | Buys foreign currency, sells U.S. currency | Foreign exchange contracts
Summary of customer related derivative positions, not designated as hedging
Number of Positions (1) | position	33	21
Less than 1 year	$ 45,711	$ 38,416
Total	45,711	38,416
Fair Value	$ (2,250)	$ (354)
Not Designated as Hedging Instrument [Member] | Buys U.S. currency, sells foreign currency | Foreign exchange contracts
Summary of customer related derivative positions, not designated as hedging
Number of Positions (1) | position	33	21
Less than 1 year	$ 45,711	$ 38,416
Total	45,711	38,416
Fair Value	$ 2,277	$ 382

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Derivatives and Hedging Activities (FV of Derivative Financial Instruments and Classification on Balance Sheet) (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Fair value of derivative financial instruments as well as their classification on the balance sheet
Total	$ 22,331	$ 23,072
Total	198,596	160,270
Other Assets [Member]
Fair value of derivative financial instruments as well as their classification on the balance sheet
Derivative Instruments Not Designated as Hedging Instruments, Asset, at Fair Value	21,397	23,305
Total	22,761	23,305
Other Liabilities [Member]
Fair value of derivative financial instruments as well as their classification on the balance sheet
Derivative Instruments Not Designated as Hedging Instruments, Liability, at Fair Value	21,176	23,040
Total	21,916	26,313
Interest rate derivatives
Fair value of derivative financial instruments as well as their classification on the balance sheet
Total		3,273
Interest rate derivatives | Derivatives designated as hedges: [Member] | Other Assets [Member]
Fair value of derivative financial instruments as well as their classification on the balance sheet
Interest Rate Derivative Assets, at Fair Value	1,364
Interest rate derivatives | Derivatives designated as hedges: [Member] | Other Liabilities [Member]
Fair value of derivative financial instruments as well as their classification on the balance sheet
Interest rate derivatives	740	3,273
Loan level derivatives
Fair value of derivative financial instruments as well as their classification on the balance sheet
Total	18,629	22,470
Total	18,632	22,465
Loan level derivatives | Derivatives not designated as hedges: [Member] | Other Assets [Member]
Fair value of derivative financial instruments as well as their classification on the balance sheet
Loan level derivatives		22,470
Loan level derivatives | Derivatives not designated as hedges: [Member] | Other Liabilities [Member]
Fair value of derivative financial instruments as well as their classification on the balance sheet
Loan level derivatives		22,465
Foreign exchange contracts
Fair value of derivative financial instruments as well as their classification on the balance sheet
Total	2,338	602
Total	2,311	574
Foreign exchange contracts | Derivatives not designated as hedges: [Member] | Other Assets [Member]
Fair value of derivative financial instruments as well as their classification on the balance sheet
Foreign exchange contracts		602
Foreign exchange contracts | Derivatives not designated as hedges: [Member] | Other Liabilities [Member]
Fair value of derivative financial instruments as well as their classification on the balance sheet
Foreign exchange contracts		574
Mortgage Derivatives | Derivatives not designated as hedges: [Member] | Other Assets [Member]
Fair value of derivative financial instruments as well as their classification on the balance sheet
Interest rate lock commitments	430	233
Forward sales agreements	0	0
Mortgage Derivatives | Derivatives not designated as hedges: [Member] | Other Liabilities [Member]
Fair value of derivative financial instruments as well as their classification on the balance sheet
Interest rate lock commitments	0	0
Forward sales agreements	$ 233	$ 1

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Derivatives and Hedging Activities (Derivative Financial Instruments included in OCI and Current Earnings) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) in OCI on derivatives (effective portion), net of tax	$ 680	$ (477)	$ (573)
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Borrowings Expense, before Tax	(2,520)	(2,828)	(3,662)
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Loss on Termination of Derivatives, before Tax			1,122
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Borrowings Expense, Tax	(1,030)	(1,152)	(1,496)
Derivatives designated as hedges: [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) in OCI on derivatives (effective portion), net of tax	2,170	1,199	2,256
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Borrowings Expense, before Tax		(2,828)	(3,662)
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Loss on Termination of Derivatives, before Tax			(1,122)
Derivatives not designated as hedges: [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Other income	(44)	(43)	108
Other Expense [Member] | Derivatives not designated as hedges: [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Other income	(82)	(53)	(4)
Other Income [Member] | Derivatives not designated as hedges: [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Other income	73	60	63
Mortgage banking income | Derivatives not designated as hedges: [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Increase Decrease In Fair Value Of Unhedged Derivative Instruments Relating To Residential Loans	$ (35)	$ (50)	$ 49

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Derivatives and Hedging Activities (Textual) (Details) - USD ($)		12 Months Ended
		Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Derivative [Line Items]
Total		$ 75,000,000	$ 75,000,000
Debt Instrument, Face Amount			71,000,000
Change in fair value on loans held for sale		87,000	(22,000)	$ 18,000
Net amortization income		244,000	244,000	244,000
Exposure to Institutional Counterparties		$ 4,700,000	2,000
Maximum length of time Company is currently hedging its exposure		5 years
Interest expense		$ 291,000
Customer related positions		16,100,000	23,200,000
Loss on termination of derivatives				1,100,000
Gain (Loss) on Sales of Loans, Net		6,100,000	$ 4,700,000	$ 3,000,000
Notional amount of fair value hedged derivative		0
Positions Six [Member]
Derivative [Line Items]
Total	[1]	25,000,000
Junior Subordinated Debt [Member]
Derivative [Line Items]
Debt Instrument, Face Amount		71,000,000
Junior Subordinated Debt [Member] | Capital Trust V Preferred Securities Due in 2037 [Member]
Derivative [Line Items]
Debt Instrument, Face Amount		$ 50,000,000

[1] (1) In April 2016, the Company entered into two forward starting swaps with notional amounts of $25.0 million each, with the intention of hedging $50.0 million of existing junior subordinated debentures, as the current hedges on this borrowing expired in December 2016.

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BALANCE SHEET OFFSETTING (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Offsetting Liabilities [Line Items]
Total	$ 22,331	$ 23,072
Derivative Asset, Collateral, Obligation to Return Cash, Offset	0	0
Derivative Asset	22,331	23,072
Derivative, Collateral, Obligation to Return Securities	4,222	2
Derivative, Collateral, Obligation to Return Cash	0	0
Derivative Asset, Fair Value, Amount Offset Against Collateral	18,109	23,070
Total	198,596	160,270
Derivative Liability, Collateral, Right to Reclaim Cash, Offset	0	0
Derivative Liability	198,596	160,270
Derivative, Collateral, Right to Reclaim Securities	4,222	2
Derivative, Collateral, Right to Reclaim Cash	188,759	159,692
Derivative Liability, Fair Value, Amount Offset Against Collateral	5,615	576
Interest Rate Swap [Member]
Offsetting Liabilities [Line Items]
Derivative Asset, Collateral, Obligation to Return Cash, Offset	0
Derivative Asset	1,364
Derivative, Collateral, Obligation to Return Securities	961
Derivative, Collateral, Obligation to Return Cash	0
Derivative Asset, Fair Value, Amount Offset Against Collateral	403
Total		3,273
Derivative Liability, Collateral, Right to Reclaim Cash, Offset	0	0
Derivative Liability	740	3,273
Derivative, Collateral, Right to Reclaim Securities	0	0
Derivative, Collateral, Right to Reclaim Cash	740	3,273
Derivative Liability, Fair Value, Amount Offset Against Collateral	0	0
Loan level derivatives
Offsetting Liabilities [Line Items]
Total	18,629	22,470
Derivative Asset, Collateral, Obligation to Return Cash, Offset	0	0
Derivative Asset	18,629	22,470
Derivative, Collateral, Obligation to Return Securities	3,261	2
Derivative, Collateral, Obligation to Return Cash	0	0
Derivative Asset, Fair Value, Amount Offset Against Collateral	15,368	22,468
Total	18,632	22,465
Derivative Liability, Collateral, Right to Reclaim Cash, Offset	0	0
Derivative Liability	18,632	22,465
Derivative, Collateral, Right to Reclaim Securities	4,222	2
Derivative, Collateral, Right to Reclaim Cash	11,106	22,461
Derivative Liability, Fair Value, Amount Offset Against Collateral	3,304	2
Foreign Exchange Contract [Member]
Offsetting Liabilities [Line Items]
Total	2,338	602
Derivative Asset, Collateral, Obligation to Return Cash, Offset	0	0
Derivative Asset	2,338	602
Derivative, Collateral, Obligation to Return Securities	0	0
Derivative, Collateral, Obligation to Return Cash	0	0
Derivative Asset, Fair Value, Amount Offset Against Collateral	2,338	602
Total	2,311	574
Derivative Liability, Collateral, Right to Reclaim Cash, Offset	0	0
Derivative Liability	2,311	574
Derivative, Collateral, Right to Reclaim Securities	0	0
Derivative, Collateral, Right to Reclaim Cash	0	0
Derivative Liability, Fair Value, Amount Offset Against Collateral	2,311	574
Customer Repurchase Agreements [Member]
Offsetting Liabilities [Line Items]
Total	176,913	133,958
Derivative Liability, Collateral, Right to Reclaim Cash, Offset	0	0
Derivative Liability	176,913	133,958
Derivative, Collateral, Right to Reclaim Securities	0	0
Derivative, Collateral, Right to Reclaim Cash	176,913	133,958
Derivative Liability, Fair Value, Amount Offset Against Collateral	0	0
Other Assets [Member]
Offsetting Liabilities [Line Items]
Total	$ 22,761	$ 23,305

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INCOME TAXES (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Current expense
Federal									$ 26,549	$ 11,946	$ 14,709
State									8,883	5,052	6,350
Total current expense									35,432	16,998	21,059
Deferred expense (benefit)
Federal									153	8,466	2,877
State									(158)	1,754	(37)
Total deferred expense (benefit)									(5)	10,220	2,840
Total expense	$ 7,698	$ 9,793	$ 9,508	$ 8,428	$ 8,268	$ 7,867	$ 7,213	$ 3,869	$ 35,427	$ 27,218	$ 23,899

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INCOME TAXES (Details 1) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Income Tax Expense (Benefit), Continuing Operations, Income Tax Reconciliation [Abstract]
Computed statutory federal income tax provision									$ 39,226	$ 32,262	$ 29,310
State taxes, net of federal tax benefit									5,643	4,500	4,104
Nontaxable interest, net									(996)	(973)	(795)
New Markets Tax Credits									(6,360)	(6,514)	(6,708)
Low Income Housing Project Investments									(1,641)	(1,182)	(594)
Increase in cash surrender value of life insurance and gain on life insurance benefits									(1,431)	(1,292)	(1,782)
Merger and other related costs (non-deductible)									210	185	274
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Amount									28	41	0
Other, net									748	191	90
Total expense	$ 7,698	$ 9,793	$ 9,508	$ 8,428	$ 8,268	$ 7,867	$ 7,213	$ 3,869	$ 35,427	$ 27,218	$ 23,899
Effective Income Tax Rate, Continuing Operations, Tax Rate Reconciliation [Abstract]
Computed statutory federal income tax provision									35.00%	35.00%	35.00%
State taxes, net of federal tax benefit									5.03%	4.88%	4.90%
Nontaxable interest, net									(0.89%)	(1.06%)	(0.95%)
New Markets Tax Credits									(5.67%)	(7.07%)	(8.01%)
Low Income Housing Project Investments									(1.46%)	(1.28%)	(0.71%)
Increase in cash surrender value of life insurance and gain on life insurance benefits									(1.28%)	(1.40%)	(2.13%)
Merger and other related costs (non-deductible)									0.19%	0.20%	0.33%
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Percent									0.02%	0.04%	0.00%
Other, net									0.67%	0.22%	0.11%
Total expense									31.61%	29.53%	28.54%

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INCOME TAXES (Details 2) - USD ($)	Dec. 31, 2016	Dec. 31, 2015
Deferred tax assets
Accrued expenses not deducted for tax purposes	$ 15,401,000	$ 14,621,000
Allowance for loan losses	24,681,000	22,744,000
Deferred gain on sale leaseback transaction	1,744,000	2,158,000
Derivatives fair value adjustment	0	1,033,000
Employee and director equity compensation	2,095,000	2,466,000
Federal Home Loan Bank borrowings fair value adjustment	82,000	108,000
Loan basis difference fair value adjustment	4,336,000	3,789,000
Deferred Tax Assets, Operating Loss Carryforwards	69,000	41,000
New Markets Tax Credit carry-forward	0	459,000
Other	1,015,000	451,000
Gross deferred tax assets	49,423,000	47,870,000
Deferred Tax Assets, Valuation Allowance	(69,000)	(41,000)
Deferred Tax Assets, Net of Valuation Allowance	49,354,000	47,829,000
Deferred tax liabilities
Core deposit and other intangibles	3,040,000	3,785,000
Deferred loan fees, net	5,407,000	4,872,000
Fixed assets	6,168,000	7,269,000
Goodwill	14,737,000	14,576,000
Net unrealized gain on securities available for sale	105,000	805,000
Deferred Tax Liabilities, Derivatives	454,000	0
Other	3,909,000	2,468,000
Gross deferred tax liabilities	33,820,000	33,775,000
Total net deferred tax asset	$ 15,534,000	$ 14,054,000

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INCOME TAXES (Details 3) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
Beginning Balance	$ 81	$ 0
Reduction of tax positions for prior years	0	0
Increase for prior year tax positions	0	0
Increase for current year tax positions	30	81
Ending Balance	$ 111	$ 81

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INCOME TAXES (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items]
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Amount	$ 11,000
Deferred Tax Assets, Operating Loss Carryforwards	$ 69,000	$ 41,000
Computed statutory federal income tax provision	35.00%	35.00%	35.00%
Tax Credit Carryforward, Amount		$ 459,000
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued	$ 11,000	$ 0

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LOW INCOME HOUSING PROJECT INVESTMENTS Low Income Housing Project Investments (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Low Income Housing Project Investments [Abstract]
Original Investment in Low Income Housing Projects	$ 47,379	$ 42,199	$ 40,541
Amortization Method Qualified Affordable Housing Project Investments	39,606	38,151	38,943
Qualified Affordable Housing Project Investments, Commitment	12,161	14,607	28,004
Affordable Housing Tax Credits and Other Tax Benefits, Amount	5,366	3,632	1,683
Amortization Method Qualified Affordable Housing Project Investments, Amortization	3,725	2,450	1,089
Income (Loss) from Affordable Housing Projects, Equity Method Investments	$ 1,641	$ 1,182	$ 594

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EMPLOYEE BENEFIT PLANS (Details) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Pension Plan [Member]
Multiemployer Plans [Line Items]
Multiemployer Plans, Funded Status	At least 80 percent	At least 80 percent
FIP/RP Status Pending/Implemented	No
Surcharge Imposed	No
Expiration Date of Collective-Bargaining Agreement	N/A
Minimum Contributions Required for Future Periods	$ 0
Pension Plan [Member] | Pentegra Defined Benefit Plan for Financial Institutions [Member]
Multiemployer Plans [Line Items]
Entity Tax Identification Number	135645888
Pension Plan Number	333
Minimum [Member]
Multiemployer Plans [Line Items]
Discount rate used for benefit obligation	2.49%	2.49%	2.24%
Discount rate used for net periodic benefit cost	2.49%	2.24%	2.43%
Maximum [Member]
Multiemployer Plans [Line Items]
Discount rate used for benefit obligation	3.94%	4.16%	3.84%
Discount rate used for net periodic benefit cost	4.16%	3.84%	4.76%
Supplemental Executive Retirement Plans [Member]
Multiemployer Plans [Line Items]
Defined Benefit Plan, Benefit Obligation	$ 14,177,000	$ 13,290,000	$ 12,537,000	$ 8,243,000
Defined Benefit Plan, Expected Future Benefit Payments, Year Four	471,000
Contributions paid	320,000	$ 276,000	$ 271,000
Defined Benefit Plan, Expected Future Benefit Payments, Year Five	$ 466,000

XML

EMPLOYEE BENEFIT PLANS (Details 1) - Pension Plan [Member] - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Multiemployer Plans [Line Items]
Cash payment	$ 6,245	$ 2,983	$ 1,320
Multiemployer Plan Year Allocation Four [Member]
Multiemployer Plans [Line Items]
Cash payment	4,000	1,215
Multiemployer Plan Year Allocation One [Member]
Multiemployer Plans [Line Items]
Cash payment	$ 2,245
Multiemployer Plan Year Allocation Two [Member]
Multiemployer Plans [Line Items]
Cash payment		$ 1,768
Multiemployer Plan Year Allocation Three [Member]
Multiemployer Plans [Line Items]
Cash payment			$ 1,320

XML

EMPLOYEE BENEFIT PLANS (Details 2) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Retirement expense	$ 2,000	$ 1,600	$ 1,500
Supplemental Employee Retirement Plan [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Retirement expense	1,513	1,834	954
Contributions paid	$ 320	$ 276	$ 271

XML

EMPLOYEE BENEFIT PLANS (Details 3) - Supplemental Executive Retirement Plans [Member] $ in Thousands	Dec. 31, 2016 USD ($)
Defined Benefit Plan Disclosure [Line Items]
2017	$ 412
2018	414
2019	485
2020	471
2021	466
2022-2026	$ 4,348

XML

EMPLOYEE BENEFIT PLANS (Details 4) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Change in plan assets
Fair value of plan assets at beginning of year	$ 10,000
Fair value of plan assets at end of year	16,000	$ 10,000
Supplemental Executive Retirement Plans [Member]
Change in accumulated benefit obligation
Benefit obligation at beginning of year	13,290	12,537	$ 8,243
Accumulated service cost	395	742	397
Interest cost	539	470	390
Plan amendment			1,357
Actuarial loss/(gain)	273	(183)	2,421
Accumulated benefit obligation at end of year	14,177	13,290	12,537
Change in plan assets
Employer contribution	320	276	271
Benefits paid	(320)	(276)	(271)
Funded status at end of year	(14,177)	(13,290)	(12,537)
Assets	0	0	0
Liabilities	(14,177)	(13,290)	(12,537)
Accrued benefit cost	(14,177)	(13,290)	(12,537)
Amounts recognized in accumulated other comprehensive income (“AOCI”)
Pension and Other Postretirement Benefit Plans, Accumulated Other Comprehensive Income (Loss), Net Gains (Losses), before Tax	2,830	2,859	3,305
Pension and Other Postretirement Benefit Plans, Accumulated Other Comprehensive Income (Loss), Net Prior Service Cost (Credit), before Tax	1,323	1,599	1,904
Pension and Other Postretirement Benefit Plans, Accumulated Other Comprehensive Income (Loss), before Tax	4,153	4,458	5,209
Information for plans with an accumulated benefit obligation in excess of plan assets
Projected benefit obligation	14,177	13,290	12,537
Accumulated benefit obligation	14,177	13,290	12,537
Net periodic benefit cost
Service cost	395	742	397
Interest cost	539	470	390
Amortization of prior service cost	276	305	113
Recognized net actuarial loss	303	317	54
Net periodic benefit cost	1,513	1,834	954
Amounts in accumulated other comprehensive income expected to be recognized in net periodic benefit cost over next fiscal year
Net actuarial loss	338	270	309
Net prior service cost	$ 276	$ 276	$ 947
Minimum [Member]
Amounts in accumulated other comprehensive income expected to be recognized in net periodic benefit cost over next fiscal year
Discount rate used for benefit obligation	2.49%	2.49%	2.24%
Discount rate used for net periodic benefit cost	2.49%	2.24%	2.43%
Maximum [Member]
Amounts in accumulated other comprehensive income expected to be recognized in net periodic benefit cost over next fiscal year
Discount rate used for benefit obligation	3.94%	4.16%	3.84%
Discount rate used for net periodic benefit cost	4.16%	3.84%	4.76%

XML

EMPLOYEE BENEFIT PLANS (Details Textual)	12 Months Ended
	Dec. 31, 2016 USD ($) age shares	Dec. 31, 2015 USD ($) shares	Dec. 31, 2014 USD ($)
Defined Contribution Plan Disclosure [Line Items]
Incentive plans and discretionary bonus expense	$ 10,300,000	$ 10,300,000	$ 8,500,000
Employer matching contribution percent	25.00%
Employee contribution percent	6.00%
Nondiscretionary requisite service period	1 year
Defined Contribution Plan, Nondiscretionary Requisite service hours	1000
Nondiscretionary employer contribution, percent up to social security limit	5.00%
Nondiscretionary employer contribution, percent over social security limit	10.00%
Multiemployer Plans [Abstract]
Significance of contributions percentage	5.00%
Defined benefit plan expense	$ 2,000,000	1,600,000	1,500,000
Postretirement Benefits [Abstract]
Retirement age | age	65
Service period to be eligible for postretirement benefit	10 years
Death benefit	$ 5,000
Supplemental Executive Retirement Plans [Abstract]
Plan assets	16,000,000	10,000,000
Deferred Compensation Arrangements [Abstract]
Deferred Compensation Arrangement with Individual, Employer Contribution	142,000	149,000	135,000
Deferred compensation expense	$ 40,000	$ 35,000
Deferred compensation, shares provided for the plan (in shares) | shares	168,352	172,580
Deferred compensation, recorded liability	$ 4,200,000	$ 3,900,000
401(k) Restoration Plan [Member]
Defined Contribution Plan Disclosure [Line Items]
Defined contribution plan expense	425,000	232,000	56,000
Employee Savings Plan [Member]
Defined Contribution Plan Disclosure [Line Items]
Defined contribution plan expense	4,800,000	4,500,000	$ 4,200,000
Executive Vice President [Member]
Defined Contribution Plan Disclosure [Line Items]
Supplemental Unemployment Benefit, Salary Continuation Expense	272,000	222,000
Officer [Member]
Defined Contribution Plan Disclosure [Line Items]
Supplemental Unemployment Benefit, Salary Continuation Expense	$ 13,000	$ 11,000

XML

FAIR VALUE MEASUREMENTS (Details) - USD ($)	Dec. 31, 2016	Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading Securities	$ 804,000	$ 356,000
Assets
Securities - available for sale	363,644,000	367,249,000
Disposal Group, Including Discontinued Operation, Mortgage Loans	6,139,000	5,990,000
Total	22,331,000	23,072,000
Fair Value, Measurements, Recurring [Member]
Liabilities
Total recurring fair value measurements	371,432,000	370,587,000
Fair Value, Measurements, Recurring [Member] | Trading securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading Securities	804,000	356,000
Fair Value, Measurements, Recurring [Member] | U.S. Government agency securities
Assets
Securities - available for sale	24,244,000	30,215,000
Fair Value, Measurements, Recurring [Member] | Agency mortgage-backed securities
Assets
Securities - available for sale	175,384,000	210,937,000
Fair Value, Measurements, Recurring [Member] | Agency collateralized mortgage obligations
Assets
Securities - available for sale	99,868,000	63,584,000
Fair Value, Measurements, Recurring [Member] | State, county, and municipal securities
Assets
Securities - available for sale	3,793,000	4,659,000
Fair Value, Measurements, Recurring [Member] | Single issuer trust preferred securities issued by banks and insurers
Assets
Securities - available for sale	2,311,000	2,792,000
Fair Value, Measurements, Recurring [Member] | Pooled trust preferred securities issued by banks and insurers
Assets
Securities - available for sale	1,584,000	1,572,000
Fair Value, Measurements, Recurring [Member] | Small Business Administration Pooled Securities [Member]
Assets
Securities - available for sale	37,189,000	40,449,000
Fair Value, Measurements, Recurring [Member] | Equity securities
Assets
Securities - available for sale	19,271,000	13,041,000
Fair Value, Measurements, Recurring [Member] | Loans held for sale
Assets
Disposal Group, Including Discontinued Operation, Mortgage Loans	6,139,000	5,990,000
Fair Value, Measurements, Recurring [Member] | Derivative instruments
Assets
Total	22,761,000	23,305,000
Fair Value, Measurements, Recurring [Member] | Derivative instruments
Liabilities
Liabilities	21,916,000	26,313,000
Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Liabilities
Total recurring fair value measurements	20,075,000	13,397,000
Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Trading securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading Securities	804,000	356,000
Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | State, county, and municipal securities
Assets
Securities - available for sale		0
Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Small Business Administration Pooled Securities [Member]
Assets
Securities - available for sale	0	0
Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Equity securities
Assets
Securities - available for sale	19,271,000	13,041,000
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member]
Liabilities
Total recurring fair value measurements	349,773,000	355,618,000
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | U.S. Government agency securities
Assets
Securities - available for sale	24,244,000	30,215,000
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | Agency mortgage-backed securities
Assets
Securities - available for sale	175,384,000	210,937,000
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | Agency collateralized mortgage obligations
Assets
Securities - available for sale	99,868,000	63,584,000
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | State, county, and municipal securities
Assets
Securities - available for sale	3,793,000	4,659,000
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | Single issuer trust preferred securities issued by banks and insurers
Assets
Securities - available for sale	2,311,000	2,792,000
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | Small Business Administration Pooled Securities [Member]
Assets
Securities - available for sale	37,189,000	40,449,000
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | Loans held for sale
Assets
Securities - available for sale	6,139,000	5,990,000
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | Derivative instruments
Assets
Total	22,761,000	23,305,000
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | Derivative instruments
Liabilities
Liabilities	21,916,000	26,313,000
Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member]
Liabilities
Total recurring fair value measurements	1,584,000	1,572,000
Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | U.S. Government agency securities
Assets
Securities - available for sale
Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | State, county, and municipal securities
Assets
Securities - available for sale		0
Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | Pooled trust preferred securities issued by banks and insurers
Assets
Securities - available for sale	1,584,000	1,572,000
Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | Small Business Administration Pooled Securities [Member]
Assets
Securities - available for sale	0	0
Fair Value, Measurements, Nonrecurring [Member]
Assets
Assets And Liabilities Fair Value Disclosure Nonrecurring	38,147,000	6,757,000
Fair Value, Measurements, Nonrecurring [Member] | Collateral dependent impaired loans
Assets
Assets nonrecurring	33,974,000	4,598,000
Fair Value, Measurements, Nonrecurring [Member] | Other real estate owned and other foreclosed assets
Assets
Assets nonrecurring	4,173,000	2,159,000
Fair Value, Measurements, Nonrecurring [Member] | Significant Unobservable Inputs (Level 3) [Member]
Assets
Assets And Liabilities Fair Value Disclosure Nonrecurring	38,147,000	6,757,000
Fair Value, Measurements, Nonrecurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | Collateral dependent impaired loans
Assets
Assets nonrecurring	33,974,000	4,598,000
Fair Value, Measurements, Nonrecurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | Other real estate owned and other foreclosed assets
Assets
Assets nonrecurring	$ 4,173,000	$ 2,159,000

XML

FAIR VALUE MEASUREMENTS (Details 1) - Fair Value, Inputs, Level 3 [Member] - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Reconciliation for all assets and liabilities measured at fair value on a recurring basis
Settlements	$ 0	$ 0	$ 0
Pooled Trust Preferred Securities [Member]
Reconciliation for all assets and liabilities measured at fair value on a recurring basis
Beginning balance	1,572	6,321	3,841
Included in earnings	29	14	2,655
Sales	0	(4,679)	0
Settlements	17	84	175
Ending Balance	$ 1,584	$ 1,572	$ 6,321

XML

FAIR VALUE MEASUREMENTS (Details 2) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Fair Value, Assets, Quantitative Information [Line Items]
Securities - available for sale	$ 363,644	$ 367,249
Weighted Average [Member] | Discounted cash flow methodology [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets, Quantitative Information [Line Items]
Cumulative Prepayment	2.50%	2.70%
Cumulative Default	12.80%	15.10%
Loss Given Default	94.20%	94.20%
Cure Given Default	60.90%	62.30%
Pooled Trust Preferred Securities [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets, Quantitative Information [Line Items]
Securities - available for sale	$ 1,584	$ 1,572
Pooled Trust Preferred Securities [Member] | Minimum [Member] | Discounted cash flow methodology [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets, Quantitative Information [Line Items]
Cumulative Prepayment	0.00%	0.00%
Cumulative Default	5.00%	5.00%
Loss Given Default	85.00%	85.00%
Cure Given Default	0.00%	0.00%
Pooled Trust Preferred Securities [Member] | Maximum [Member] | Discounted cash flow methodology [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets, Quantitative Information [Line Items]
Cumulative Prepayment	62.00%	64.00%
Cumulative Default	100.00%	100.00%
Loss Given Default	100.00%	100.00%
Cure Given Default	75.00%	75.00%
Impaired Loans [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets, Quantitative Information [Line Items]
Assets, Fair Value Disclosure, Recurring	$ 33,974	$ 4,598
Other real estate owned and other foreclosed assets | Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets, Quantitative Information [Line Items]
Assets, Fair Value Disclosure, Recurring	$ 4,173	$ 2,159

XML

FAIR VALUE MEASUREMENTS (Details 3) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Assets, Fair Value Disclosure [Abstract]
Held-to-maturity Securities	$ 487,076	$ 477,507
Loans and Leases Receivable, Net Amount	5,938,039	5,491,896
Securities held to maturity, fair value	485,650	478,749
Federal Home Loan Bank Stock	11,497	14,431
Bank Owned Life Insurance	144,503	134,627
Liabilities, Fair Value Disclosure [Abstract]
Advances from Federal Home Loan Banks	50,819	102,080
Customer Repurchase Agreements and other short-term borrowings	176,913	133,958
Junior subordinated debentures	73,107	73,306
Subordinated Debt	34,635	34,589
Deposits [Member]
Liabilities, Fair Value Disclosure [Abstract]
Financial Liabilities Book Value	5,763,101	5,305,873
Accrued Liabilities, Fair Value Disclosure	5,763,101	5,305,873
Bank Time Deposits [Member]
Liabilities, Fair Value Disclosure [Abstract]
Financial Liabilities Book Value	649,152	684,830
Accrued Liabilities, Fair Value Disclosure	647,038	684,370
Federal Home Loan Bank Advances [Member]
Liabilities, Fair Value Disclosure [Abstract]
Advances from Federal Home Loan Banks	50,819	102,080
Federal Home Loan Bank Borrowings, Fair Value Disclosure	50,898	102,396
Customer Repurchase Agreements [Member]
Liabilities, Fair Value Disclosure [Abstract]
Customer Repurchase Agreements and other short-term borrowings	176,913	133,958
Accrued Liabilities, Fair Value Disclosure	176,913	133,958
Junior Subordinated Debt [Member]
Liabilities, Fair Value Disclosure [Abstract]
Junior subordinated debentures	73,107	73,306
Accrued Liabilities, Fair Value Disclosure	72,510	73,871
Subordinated Debt [Member]
Liabilities, Fair Value Disclosure [Abstract]
Subordinated Debt	34,635	34,589
Accrued Liabilities, Fair Value Disclosure	34,241	34,370
Significant Other Observable Inputs (Level 2) [Member] | Deposits [Member]
Liabilities, Fair Value Disclosure [Abstract]
Accrued Liabilities, Fair Value Disclosure	5,763,101	5,305,873
Significant Other Observable Inputs (Level 2) [Member] | Bank Time Deposits [Member]
Liabilities, Fair Value Disclosure [Abstract]
Accrued Liabilities, Fair Value Disclosure	647,038	684,370
Significant Other Observable Inputs (Level 2) [Member] | Federal Home Loan Bank Advances [Member]
Liabilities, Fair Value Disclosure [Abstract]
Federal Home Loan Bank Borrowings, Fair Value Disclosure	50,898
Accrued Liabilities, Fair Value Disclosure		102,396
Significant Other Observable Inputs (Level 2) [Member] | Junior Subordinated Debt [Member]
Liabilities, Fair Value Disclosure [Abstract]
Accrued Liabilities, Fair Value Disclosure	72,510	73,871
Significant Unobservable Inputs (Level 3) [Member] | Customer Repurchase Agreements [Member]
Liabilities, Fair Value Disclosure [Abstract]
Accrued Liabilities, Fair Value Disclosure	176,913	133,958
Significant Unobservable Inputs (Level 3) [Member] | Subordinated Debt [Member]
Liabilities, Fair Value Disclosure [Abstract]
Accrued Liabilities, Fair Value Disclosure	34,241	34,370
US Treasury Securities [Member]
Assets, Fair Value Disclosure [Abstract]
Held-to-maturity Securities	1,007	1,009
Securities held to maturity, fair value	1,054	1,064
US Treasury Securities [Member] | Significant Other Observable Inputs (Level 2) [Member]
Assets, Fair Value Disclosure [Abstract]
Securities held to maturity, fair value	1,054	1,064
Agency mortgage-backed securities
Assets, Fair Value Disclosure [Abstract]
Held-to-maturity Securities	156,088	167,134
Securities held to maturity, fair value	157,504	170,375
Agency mortgage-backed securities | Significant Other Observable Inputs (Level 2) [Member]
Assets, Fair Value Disclosure [Abstract]
Securities held to maturity, fair value	157,504	170,375
Agency collateralized mortgage obligations
Assets, Fair Value Disclosure [Abstract]
Held-to-maturity Securities	297,445	267,348
Securities held to maturity, fair value	294,650	264,891
Agency collateralized mortgage obligations | Significant Other Observable Inputs (Level 2) [Member]
Assets, Fair Value Disclosure [Abstract]
Securities held to maturity, fair value	294,650	264,891
State, county, and municipal securities
Assets, Fair Value Disclosure [Abstract]
Held-to-maturity Securities		225
Securities held to maturity, fair value		227
State, county, and municipal securities | Significant Other Observable Inputs (Level 2) [Member]
Assets, Fair Value Disclosure [Abstract]
Securities held to maturity, fair value	0	227
Single issuer trust preferred securities issued by banks and insurers
Assets, Fair Value Disclosure [Abstract]
Held-to-maturity Securities	1,500	1,500
Securities held to maturity, fair value	1,544	1,522
Single issuer trust preferred securities issued by banks and insurers | Significant Other Observable Inputs (Level 2) [Member]
Assets, Fair Value Disclosure [Abstract]
Securities held to maturity, fair value	1,544	1,522
Small Business Administration Pooled Securities [Member]
Assets, Fair Value Disclosure [Abstract]
Held-to-maturity Securities	31,036	35,291
Securities held to maturity, fair value	30,898	35,664
Small Business Administration Pooled Securities [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Assets, Fair Value Disclosure [Abstract]
Securities held to maturity, fair value	0	0
Small Business Administration Pooled Securities [Member] | Significant Other Observable Inputs (Level 2) [Member]
Assets, Fair Value Disclosure [Abstract]
Securities held to maturity, fair value	30,898	35,664
Small Business Administration Pooled Securities [Member] | Significant Unobservable Inputs (Level 3) [Member]
Assets, Fair Value Disclosure [Abstract]
Securities held to maturity, fair value	0	0
Corporate Debt Securities [Member]
Assets, Fair Value Disclosure [Abstract]
Held-to-maturity Securities		5,000
Securities held to maturity, fair value		5,006
Corporate Debt Securities [Member] | Significant Other Observable Inputs (Level 2) [Member]
Assets, Fair Value Disclosure [Abstract]
Securities held to maturity, fair value		5,006
Loans Net Of Allowance For Loan Loses [Member]
Assets, Fair Value Disclosure [Abstract]
Loans and Leases Receivable, Net Amount	5,904,065	5,487,298
Loans, net of allowance for loan losses	5,784,778	5,417,425
Loans Net Of Allowance For Loan Loses [Member] | Significant Unobservable Inputs (Level 3) [Member]
Assets, Fair Value Disclosure [Abstract]
Loans, net of allowance for loan losses	5,784,778	5,417,425
Investment in Federal Home Loan Bank Stock [Member]
Assets, Fair Value Disclosure [Abstract]
Federal Home Loan Bank Stock	11,497	14,431
Investment in Federal Home Loan Bank Stock, Fair Value Disclosure	11,497	14,431
Investment in Federal Home Loan Bank Stock [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Assets, Fair Value Disclosure [Abstract]
Investment in Federal Home Loan Bank Stock, Fair Value Disclosure	0	0
Investment in Federal Home Loan Bank Stock [Member] | Significant Other Observable Inputs (Level 2) [Member]
Assets, Fair Value Disclosure [Abstract]
Investment in Federal Home Loan Bank Stock, Fair Value Disclosure	11,497	14,431
Investment in Federal Home Loan Bank Stock [Member] | Significant Unobservable Inputs (Level 3) [Member]
Assets, Fair Value Disclosure [Abstract]
Investment in Federal Home Loan Bank Stock, Fair Value Disclosure	0	0
Cash Surrender Value [Member]
Assets, Fair Value Disclosure [Abstract]
Bank Owned Life Insurance	144,503	134,627
Cash Surrender Value, Fair Value Disclosure	144,503	134,627
Cash Surrender Value [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Assets, Fair Value Disclosure [Abstract]
Cash Surrender Value, Fair Value Disclosure	0	0
Cash Surrender Value [Member] | Significant Other Observable Inputs (Level 2) [Member]
Assets, Fair Value Disclosure [Abstract]
Cash Surrender Value, Fair Value Disclosure	144,503	134,627
Cash Surrender Value [Member] | Significant Unobservable Inputs (Level 3) [Member]
Assets, Fair Value Disclosure [Abstract]
Cash Surrender Value, Fair Value Disclosure	$ 0	$ 0

XML

OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Other Comprehensive Income (Loss), before Tax [Abstract]
Change in fair value of securities available for sale, pre tax amount	$ (1,858)	$ (3,757)	$ 9,095
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale and Write-down of Securities, before Tax	(26)	(405)	191
Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, before Tax, Portion Attributable to Parent	(1,832)	(3,352)	8,904
Change in fair value of cash flow hedges, pre tax amount	1,133	(776)	(969)
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Borrowings Expense, before Tax	(2,520)	(2,828)	(3,662)
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Loss on Termination of Derivatives, before Tax			1,122
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, before Tax, Portion Attributable to Parent	3,653	2,052	3,815
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Net Unamortized Gain (Loss) Arising During Period, before Tax	(383)	438	(2,699)
Other Comprehensive (Income) Loss, Pension and Other Postretirement Benefit Plans, Net Prior Service Cost (Credit) Arising During Period, before Tax			(1,357)
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, for Net Gain (Loss), before Tax	238	243	(44)
Amortization of certain costs included in net periodic retirement costs, pre tax amount	(276)	(294)	(102)
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, for Net Transition Asset (Obligation), before Tax			(2)
Other Comprehensive (Income) Loss, Pension and Other Postretirement Benefit Plans, Adjustment, before Tax	131	975	(4,000)
Total other comprehensive loss, pre tax amount	1,952	(325)	8,719
Other Comprehensive Income (Loss), Tax [Abstract]
Other Comprehensive Income (Loss), Unrealized Holding Gain (Loss) on Securities Arising During Period, Tax	710	1,434	(3,570)
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale and Write-down of Securities, Tax	11	165	(78)
Other Comprehensive Income (Loss), Available-for-sale Securities, Tax, Portion Attributable to Parent	699	1,269	(3,492)
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Tax	(453)	299	396
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Borrowings Expense, Tax	1,030	1,152	1,496
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Loss on Termination of Derivatives, Tax			459
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Tax, Portion Attributable to Parent	(1,483)	(853)	(1,559)
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Net Unamortized Gain (Loss) Arising During Period, Tax	157	(193)	1,103
Other Comprehensive (Income) Loss, Pension and Other Postretirement Benefit Plans, Net Prior Service Cost (Credit), Tax			(554)
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, for Net Gain (Loss), Tax	(97)	(99)	18
Other Comprehensive (Income) Loss, Amortization Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, for Net Prior Service Cost (Credit), Tax	(113)	(119)	(42)
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, for Net Transition Asset (Obligation), before Tax			1
Other Comprehensive (Income) Loss, Pension and Other Postretirement Benefit Plans, Tax	(53)	(411)	1,634
Other Comprehensive Income (Loss), Tax, Portion Attributable to Parent	(837)	5	(3,417)
Other Comprehensive Income (Loss), Net of Tax [Abstract]
Other Comprehensive Income (Loss), Unrealized Holding Gain (Loss) on Securities Arising During Period, Net of Tax	(1,148)	(2,323)	5,525
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale and Write-down of Securities, Net of Tax	(15)	(240)	113
Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, Net of Tax, Portion Attributable to Parent	(1,133)	(2,083)	5,412
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Net of Tax	680	(477)	(573)
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Borrowings Expense, Net of Tax	(1,490)	(1,676)	(2,166)
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Loss on Termination of Derivatives, Net of Tax		1,199	(663)
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax, Portion Attributable to Parent	2,170		2,256
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Net Unamortized Gain (Loss) Arising During Period, Net of Tax	(226)	245	(1,596)
Other Comprehensive (Income) Loss, Pension and Other Postretirement Benefit Plans, Net Prior Service Cost (Credit) Arising During Period, Net of Tax			(803)
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, for Net Gain (Loss), Net of Tax	141	144	(26)
Amortization of certain costs included in net periodic retirement costs, after tax amount	163	175	60
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, for Net Transition Asset (Obligation), Net of Tax			(1)
Other Comprehensive (Income) Loss, Pension and Other Postretirement Benefit Plans, Adjustment, Net of Tax	78	564	(2,366)
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	1,115	(320)	5,302
Designated as Hedging Instrument [Member]
Other Comprehensive Income (Loss), before Tax [Abstract]
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Borrowings Expense, before Tax		(2,828)	(3,662)
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Loss on Termination of Derivatives, before Tax			(1,122)
Other Comprehensive Income (Loss), Net of Tax [Abstract]
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Net of Tax	$ 2,170	$ 1,199	$ 2,256

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OTHER COMPREHENSIVE LOSS (Details 1) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning Balance	$ (2,452)	$ (2,132)	$ (7,434)
Total other comprehensive income (loss)	1,115	(320)	5,302
Ending Balance	(1,337)	(2,452)	(2,132)
Unrealized Gain on Securities
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning Balance	1,306	3,389	(2,023)
Total other comprehensive income (loss)	(1,133)	(2,083)	5,412
Ending Balance	173	1,306	3,389
Unrealized Loss on Cash Flow Hedge
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning Balance	(1,955)	(3,298)	(5,698)
Total other comprehensive income (loss)	2,316	1,343	2,400
Ending Balance	361	(1,955)	(3,298)
Deferred Gain on Hedge Transactions
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning Balance	427	571	715
Total other comprehensive income (loss)	(146)	(144)	(144)
Ending Balance	281	427	571
Defined Benefit Postretirement Plans
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning Balance	(2,230)	(2,794)	(428)
Total other comprehensive income (loss)	78	564	(2,366)
Ending Balance	$ (2,152)	$ (2,230)	$ (2,794)

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OTHER COMPREHENSIVE LOSS (Details Textual) - USD ($)	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Sep. 30, 2013
Equity [Abstract]
Gain on interest rate swaps	$ 281,000	$ 427,000	$ 571,000	$ 1,400,000

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COMMITMENTS AND CONTINGENCIES Financial Instruments (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Commitments to Extend Credit [Member]
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Off-balance sheet financial instruments	$ 2,227,955	$ 2,091,170
Standby letters of credit [Member]
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Off-balance sheet financial instruments	18,190	17,962
Deferred standby letter of credit fees [Member]
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Off-balance sheet financial instruments	$ 108	$ 72

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COMMITMENTS AND CONTINGENCIES Lease Commitments (Details 1) $ in Thousands	Dec. 31, 2016 USD ($)
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
2017	$ 9,287
2018	7,960
2019	7,291
2020	6,296
2021	5,000
Thereafter	8,213
Total future minimum rentals	$ 44,047

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COMMITMENTS AND CONTINGENCIES (Details Textual) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Operating Leases, Rent Expense, Net [Abstract]
Operating lease rent expense	$ 8.5	$ 8.2	$ 7.9
Reserve requirement	$ 31.8	$ 21.7
Minimum [Member]
Operating Leases, Rent Expense, Net [Abstract]
Operating lease renewal period option	1 year
Maximum [Member]
Operating Leases, Rent Expense, Net [Abstract]
Operating lease renewal period option	10 years

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REGULATORY CAPITAL REQUIREMENTS (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Company (consolidated) [Member]
Total capital (to risk weighted assets):
Actual	$ 824,265	$ 747,372
Actual Ratio	13.60%	13.36%
Capital Required for Capital Adequacy	$ 484,942	$ 447,664
For Capital Adequacy Purposes Ratio	8.00%	8.00%
Common Equity Tier One Capital	$ 656,080	$ 584,378
Common Equity tier One Capital to Risk Weighted Assets	10.82%	10.44%
Common Equity Tier One Capital Required for Capital Adequacy	$ 272,780	$ 251,811
Common Equity Tier One Capital for Capitalized Adequacy to Risk Weighted Assets	4.50%	4.50%
Tier 1 capital (to risk weighted assets):
Actual	$ 727,070	$ 655,154
Actual Ratio	11.99%	11.71%
For Capital Adequacy Purposes	$ 363,706	$ 335,748
For Capital Adequacy Purposes Ratio	6.00%	6.00%
Tier 1 capital (to average assets):
Actual	$ 727,070	$ 655,154
Actual Ratio	9.77%	9.33%
For Capital Adequacy Purposes	$ 297,748	$ 280,889
For Capital Adequacy Purposes Ratio	4.00%	4.00%
Bank [Member]
Total capital (to risk weighted assets):
Actual	$ 788,320	$ 718,197
Actual Ratio	13.01%	12.84%
Capital Required for Capital Adequacy	$ 484,834	$ 447,334
For Capital Adequacy Purposes Ratio	8.00%	8.00%
To Be Well Capitalized Under Prompt Corrective Action Provisions	$ 606,042	$ 559,167
To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	10.00%	10.00%
Common Equity Tier One Capital	$ 725,760	$ 660,979
Common Equity tier One Capital to Risk Weighted Assets	11.98%	11.82%
Common Equity Tier One Capital Required for Capital Adequacy	$ 272,719	$ 251,625
Common Equity Tier One Capital for Capitalized Adequacy to Risk Weighted Assets	4.50%	4.50%
Common Equity Tier 1 Capital to be Well Capitalized	$ 393,927	$ 363,459
Common Equity Tier One Capital to be Well Capitalized to Risk Weighted Assets	6.50%	6.50%
Tier 1 capital (to risk weighted assets):
Actual	$ 725,760	$ 660,979
Actual Ratio	11.98%	11.82%
For Capital Adequacy Purposes	$ 363,625	$ 335,500
For Capital Adequacy Purposes Ratio	6.00%	6.00%
To Be Well Capitalized Under Prompt Corrective Action Provisions	$ 484,834	$ 447,334
To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	8.00%	8.00%
Tier 1 capital (to average assets):
Actual	$ 725,760	$ 660,979
Actual Ratio	9.76%	9.42%
For Capital Adequacy Purposes	$ 297,589	$ 280,653
For Capital Adequacy Purposes Ratio	4.00%	4.00%
To Be Well Capitalized Under Prompt Correction Action Provisions	$ 371,986	$ 350,816
To Be Well Capitalized Under Prompt Correction Action Provisions Ratio	5.00%	5.00%

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REGULATORY CAPITAL REQUIREMENTS Regulatory Capital Requirements (Details Textual) (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Debt Instrument [Line Items]
Dividends received from subsidiaries(1)	$ (44.5)	$ (38.1)
Debt Instrument, Face Amount		$ 71.0
Junior Subordinated Debt [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 71.0

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PARENT COMPANY FINANCIALS ONLY (Details) - USD ($) $ in Thousands		Dec. 31, 2016		Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Assets:
Deferred tax asset		$ 49,354		$ 47,829
Derivative Asset		22,331		23,072
Total assets		7,709,375		7,209,469
Liabilities and stockholders’ equity
Junior subordinated debentures		73,107		73,306
Subordinated Debt		34,635		34,589
Derivative instruments		198,596		160,270
Other liabilities		96,958		103,370
Total liabilities		6,844,685		6,438,006
Stockholders’ equity		864,690		771,463	$ 640,527	$ 591,540
Liabilities and Equity		7,709,375		7,209,469
Consolidation, Eliminations [Member]
Assets:
Investments in subsidiaries		933,600		849,500
Parent Company [Member]
Assets:
Cash		42,596	[1]	35,428
Investments in subsidiaries	[2]	935,778		851,743
Prepaid income taxes		625		530
Deferred tax asset		216		2,229
Derivative Asset		1,364
Total assets		980,579		889,930
Liabilities and stockholders’ equity
Dividends payable		7,834		6,824
Junior subordinated debentures		73,107		73,306
Subordinated Debt		34,635		34,589
Derivative instruments	[1]			2,109
Other liabilities		313		1,639
Total liabilities		115,889		118,467
Stockholders’ equity		864,690		771,463
Liabilities and Equity		$ 980,579		$ 889,930

[1] Entire balance eliminates in consolidation.

[2] $933.6 million and $849.5 million eliminate in consolidation at December 31, 2016 and 2015, respectively.

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PARENT COMPANY FINANCIALS ONLY (Details 1) - USD ($)		3 Months Ended								12 Months Ended
		Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Condensed Financial Statements, Captions [Line Items]
Derivative Asset		$ 22,331,000				$ 23,072,000				$ 22,331,000	$ 23,072,000
Income
Dividends received from subsidiaries(1)										(44,500,000)	(38,100,000)
Expenses
Interest expense		4,676,000	$ 4,640,000	$ 4,627,000	$ 4,850,000	4,985,000	$ 5,183,000	$ 5,269,000	$ 5,180,000	18,793,000	20,617,000	$ 20,417,000
Income tax benefit		7,698,000	9,793,000	9,508,000	8,428,000	8,268,000	7,867,000	7,213,000	3,869,000	35,427,000	27,218,000	23,899,000
Net Income		17,179,000	$ 20,484,000	$ 20,374,000	$ 18,611,000	$ 19,455,000	$ 18,594,000	$ 17,451,000	$ 9,460,000	76,648,000	64,960,000	59,845,000
Parent Company [Member]
Condensed Financial Statements, Captions [Line Items]
Derivative Asset		$ 1,364,000								1,364,000
Income
Dividends received from subsidiaries(1)	[1]									44,598,000	38,153,000	40,170,000
Interest income(2)	[2]									98,000	78,000	57,000
Total income										44,696,000	38,231,000	40,227,000
Expenses
Interest expense										5,901,000	5,769,000	4,225,000
Other expenses											29,000
Total expenses										5,901,000	5,798,000	4,225,000
Income before income taxes and equity in undistributed income of subsidiaries										38,795,000	32,433,000	36,002,000
Income tax benefit										(1,791,000)	(2,301,000)	(1,298,000)
Income of parent company										40,586,000	34,734,000	37,300,000
Equity in undistributed income of subsidiaries										36,062,000	30,226,000	22,545,000
Net Income										76,648,000	64,960,000	59,845,000
Consolidation, Eliminations [Member]
Income
Dividends received from subsidiaries(1)										$ (62,000)	$ (55,000)	$ (53,000)

[1] Income of $62,000, $55,000 and $53,000 was not eliminated in consolidation for the years ended December 31, 2016, 2015, and 2014, respectively.

[2] Entire balance eliminated in consolidation.

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PARENT COMPANY FINANCIALS ONLY (Details 2) - USD ($)		3 Months Ended									12 Months Ended
		Dec. 31, 2016		Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2016		Dec. 31, 2015	Dec. 31, 2014
Condensed Financial Statements, Captions [Line Items]
Dividends received from subsidiaries(1)											$ (44,500,000)		$ (38,100,000)
Net income		$ 17,179,000		$ 20,484,000	$ 20,374,000	$ 18,611,000	$ 19,455,000	$ 18,594,000	$ 17,451,000	$ 9,460,000	76,648,000		64,960,000	$ 59,845,000
Adjustments to reconcile net income to net cash provided by operating activities
Deferred income tax expense											(5,000)		10,220,000	2,840,000
Change in other assets											7,627,000		3,842,000	(1,907,000)
Change in other liabilities											(8,738,000)		(2,450,000)	7,017,000
Net cash provided by operating activities											93,336,000		89,543,000	90,305,000
Cash flows used in investing activities
Net cash used in investing activities											(238,886,000)		(205,541,000)	(292,672,000)
Cash flows provided by financing activities
Net repayments of short-term Federal Home Loan Bank borrowings											(37,000,000)		(10,000,000)	(65,000,000)
Restricted stock awards issued, net of awards surrendered											(696,000)		(657,000)	(641,000)
Proceeds from stock issued and stock options exercised											201,000		1,367,000	2,333,000
Proceeds from shares issued under the direct stock purchase plan											2,323,000		2,695,000	1,555,000
Common dividends paid											(29,711,000)		(26,172,000)	(22,443,000)
Net cash provided by financing activities											158,880,000		213,509,000	164,296,000
Net increase (decrease) in cash and cash equivalents											13,330,000		97,511,000	(38,071,000)
Cash and cash equivalents at beginning of year						275,765,000				178,254,000	275,765,000		178,254,000	216,325,000
Cash and cash equivalents at end of period		289,095,000					275,765,000				289,095,000		275,765,000	178,254,000
Consolidation, Eliminations [Member]
Condensed Financial Statements, Captions [Line Items]
Dividends received from subsidiaries(1)											(62,000)		(55,000)	(53,000)
Investments in subsidiaries		933,600,000					849,500,000				933,600,000		849,500,000
Parent Company [Member]
Condensed Financial Statements, Captions [Line Items]
Dividends received from subsidiaries(1)	[1]										44,598,000		38,153,000	40,170,000
Investments in subsidiaries	[2]	935,778,000					851,743,000				935,778,000		851,743,000
Net income											76,648,000		64,960,000	59,845,000
Adjustments to reconcile net income to net cash provided by operating activities
Accretion											(154,000)		(150,000)	(194,000)
Deferred income tax expense											678,000		3,266,000	293,000
Change in other assets											423,000		7,488,000
Change in other liabilities											(5,532,000)		(254,000)	(267,000)
Equity in undistributed income of subsidiaries											(36,062,000)		(30,226,000)	(22,545,000)
Net cash provided by operating activities											36,001,000		45,084,000	37,132,000
Cash flows used in investing activities
Cash paid for acquisitions, net of cash acquired (1)											(950,000)		(51,680,000)
Net cash used in investing activities											(950,000)		(51,680,000)
Cash flows provided by financing activities
Repayment of short-term borrowings														(5,000,000)
Net repayments of short-term Federal Home Loan Bank borrowings														35,000,000
Restricted stock awards issued, net of awards surrendered											(696,000)		(657,000)	(641,000)
Proceeds from stock issued and stock options exercised											201,000		1,367,000	2,333,000
Proceeds from shares issued under the direct stock purchase plan											2,323,000		2,695,000	1,555,000
Common dividends paid											(29,711,000)		(26,172,000)	(22,443,000)
Net cash provided by financing activities											(27,883,000)		(22,767,000)	10,804,000
Net increase (decrease) in cash and cash equivalents											7,168,000		(29,363,000)	47,936,000
Cash and cash equivalents at beginning of year						$ 35,428,000				$ 64,791,000	35,428,000		64,791,000	16,855,000
Cash and cash equivalents at end of period		42,596,000					35,428,000				42,596,000		35,428,000	$ 64,791,000
Cash		$ 42,596,000	[3]				$ 35,428,000				$ 42,596,000	[3]	$ 35,428,000

[1] Income of $62,000, $55,000 and $53,000 was not eliminated in consolidation for the years ended December 31, 2016, 2015, and 2014, respectively.

[2] $933.6 million and $849.5 million eliminate in consolidation at December 31, 2016 and 2015, respectively.

[3] Entire balance eliminates in consolidation.

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SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($)	3 Months Ended								12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Quarterly Financial Information Disclosure [Abstract]
Interest income	$ 63,428,000	$ 62,308,000	$ 61,160,000	$ 59,741,000	$ 59,870,000	$ 60,228,000	$ 59,016,000	$ 56,429,000	$ 246,637,000	$ 235,545,000	$ 216,459,000
Interest expense	4,676,000	4,640,000	4,627,000	4,850,000	4,985,000	5,183,000	5,269,000	5,180,000	18,793,000	20,617,000	20,417,000
Net interest income	58,752,000	57,668,000	56,533,000	54,891,000	54,885,000	55,045,000	53,747,000	51,249,000	227,844,000	214,928,000	196,042,000
Provision (benefit)	4,000,000	950,000	600,000	525,000	500,000	800,000	700,000	(500,000)	6,075,000	1,500,000	10,403,000
Total noninterest income	21,762,000	20,416,000	21,095,000	19,155,000	19,824,000	19,247,000	20,261,000	16,557,000	82,428,000	75,888,000	69,943,000
Total noninterest expenses	51,637,000	46,857,000	47,146,000	46,482,000	46,486,000	47,031,000	48,644,000	54,977,000	192,122,000	197,138,000	171,838,000
Provision for income taxes	7,698,000	9,793,000	9,508,000	8,428,000	8,268,000	7,867,000	7,213,000	3,869,000	35,427,000	27,218,000	23,899,000
Net Income	$ 17,179,000	$ 20,484,000	$ 20,374,000	$ 18,611,000	$ 19,455,000	$ 18,594,000	$ 17,451,000	$ 9,460,000	$ 76,648,000	$ 64,960,000	$ 59,845,000
Basic earnings per share (in dollars per share)	$ 0.64	$ 0.78	$ 0.77	$ 0.71	$ 0.74	$ 0.71	$ 0.67	$ 0.38	$ 2.90	$ 2.51	$ 2.50
Diluted earnings per share (in dollars per share)	$ 0.64	$ 0.78	$ 0.77	$ 0.71	$ 0.74	$ 0.71	$ 0.67	$ 0.38	$ 2.90	$ 2.50	$ 2.49
Weighted average common shares (basic) (in shares)	26,710,029	26,324,316.000	26,304,129.000	26,275,323	26,238,004.000	26,200,621.000	26,149,593.000	24,959,865	26,404,071	25,891,382	23,899,562
Common share equivalents (in shares)	60,022	53,072.000	47,885.000	43,409	52,772.000	63,493.000	71,819.000	80,215	51,847	68,566	93,815
Weighted average common shares (diluted) (in shares)	26,770,051	26,377,388	26,352,014	26,318,732	26,290,776.000	26,264,114.000	26,221,412.000	25,040,080	26,455,918	25,959,948	23,993,377.000
Available-For-Sale Securities - Fixed Income Gross Realized Gains	$ 0	$ 0	$ 0	$ 0	$ 0	$ 0	$ 798,000	$ 0	$ 0	$ 798,000	$ 121,000
Total Unusual or infrequent Income Items	0	0	0	0	0	0	798,000	0
Utilities Operating Expense, Impairments	0	0	0	0	0	0	109,000	0
Gains (Losses) on Extinguishment of Debt	0	0	0	437,000	0	0	0	122,000	437,000	122,000	0
Available-for-Sale Securities - Fixed Income Gross Realized Losses	0	0	0	0	0	0	1,124,000	0	0	1,124,000	21,000
Acquisition Related Costs	4,764,000	151,000	206,000	334,000		0	271,000	10,230,000	$ 5,455,000	$ 10,501,000	$ 1,339,000
Total unusual or infrequent expense items	$ 4,764,000	$ 151,000	$ 206,000	$ 771,000	$ 0	$ 0	$ 1,504,000	$ 10,352,000

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TRANSACTIONS WITH RELATED PARTIES (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Related Party Transaction [Line Items]
Loans and Leases Receivable, Related Parties	$ 22,795	$ 24,653	$ 25,994
Loans and Leases Receivable, Related Parties, Additions	1,718	9,268
Loans and Leases Receivable, Related Parties, Collections	$ (3,576)	$ (10,609)

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TRANSACTIONS WITH RELATED PARTIES Related Parties Textual (Details) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Related Party Transaction [Line Items]
Operating Leases, Rent Expense	$ 8,500,000	$ 8,200,000	$ 7,900,000
Related Party Deposit Liabilities	14,700,000	13,900,000
Affiliated Entity [Member]
Related Party Transaction [Line Items]
Operating Leases, Rent Expense	$ 0	$ 0	$ 278,000