10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________________________________________________

FORM 10-Q

____________________________________________________________

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

For the quarterly period ended March 31, 2017

¨ 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 000-18911

____________________________________________________________

GLACIER BANCORP, INC.

(Exact name of registrant as specified in its charter)

____________________________________________________________

MONTANA	81-0519541
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
49 Commons Loop, Kalispell, Montana	59901
(Address of principal executive offices)	(Zip Code)

(406) 756-4200

Registrant’s telephone number, including area code

Not Applicable

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

____________________________________________________________

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

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

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

Large accelerated filer	ý		Accelerated filer	¨
Non-accelerated filer	¨	(Do not check if a smaller reporting company)	Smaller reporting company	¨
			Emerging growth company	¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

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

The number of shares of Registrant’s common stock outstanding on April 17, 2017 was 76,619,952. No preferred shares are issued or outstanding.

TABLE OF CONTENTS

	Page
Part I. Financial Information
Item 1 – Financial Statements
Unaudited Condensed Consolidated Statements of Financial Condition – March 31, 2017 and December 31, 2016	4
Unaudited Condensed Consolidated Statements of Operations – Three Months ended March 31, 2017 and 2016	5
Unaudited Condensed Consolidated Statements of Comprehensive Income – Three Months ended March 31, 2017 and 2016	6
Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity – Three Months ended March 31, 2017 and 2016	7
Unaudited Condensed Consolidated Statements of Cash Flows – Three Months ended March 31, 2017 and 2016	8
Notes to Unaudited Condensed Consolidated Financial Statements	10
Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations	37
Item 3 – Quantitative and Qualitative Disclosure about Market Risk	65
Item 4 – Controls and Procedures	65
Part II. Other Information	65
Item 1 – Legal Proceedings	65
Item 1A – Risk Factors	65
Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds	65
Item 3 – Defaults upon Senior Securities	66
Item 4 – Mine Safety Disclosures	66
Item 5 – Other Information	66
Item 6 – Exhibits	66
Signatures	67

ABBREVIATIONS/ACRONYMS

ALCO – Asset Liability Committee

ALLL or allowance – allowance for loan and lease losses

ASC – Accounting Standards Codification^TM

ATM – automated teller machine

Bank – Glacier Bank

Basel III – third installment of the Basel Accords

Board – Glacier Bancorp, Inc.’s Board of Directors

CCP – Core Consolidation Project

CDE – Certified Development Entity

CDFI Fund – Community Development Financial Institutions Fund

CEO – Chief Executive Officer

CFO – Chief Financial Officer

Company – Glacier Bancorp, Inc.

DDA – demand deposit account

Dodd-Frank Act – Dodd-Frank Wall Street Reform and Consumer Protection Act

Fannie Mae – Federal National Mortgage Association

FASB – Financial Accounting Standards Board

FHLB – Federal Home Loan Bank

Final Rules – final rules implemented by the federal banking agencies that amended regulatory risk-based capital rules

FRB – Federal Reserve Bank

Freddie Mac – Federal Home Loan Mortgage Corporation

GAAP – accounting principles generally accepted in the United States of America

Ginnie Mae – Government National Mortgage Association

LIBOR – London Interbank Offered Rate

LIHTC – Low Income Housing Tax Credit

NMTC – New Markets Tax Credit

NOW – negotiable order of withdrawal

NRSRO – Nationally Recognized Statistical Rating Organizations

OCI – other comprehensive income

OREO – other real estate owned

Repurchase agreements – securities sold under agreements to repurchase

S&P – Standard and Poor’s

SEC – United States Securities and Exchange Commission

TDR – troubled debt restructuring

TSB – Treasure State Bank

VIE – variable interest entity

GLACIER BANCORP, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Dollars in thousands, except per share data)	March 31, 2017			December 31, 2016
Assets
Cash on hand and in banks	$	124,501		135,268
Federal funds sold	190			—
Interest bearing cash deposits	109,313			17,273
Cash and cash equivalents	234,004			152,541
Investment securities, available-for-sale	2,314,521			2,425,477
Investment securities, held-to-maturity	667,388			675,674
Total investment securities	2,981,909			3,101,151
Loans held for sale	25,649			72,927
Loans receivable	5,876,974			5,684,463
Allowance for loan and lease losses	(129,226		)	(129,572	)
Loans receivable, net	5,747,748			5,554,891
Premises and equipment, net	175,283			176,198
Other real estate owned	17,771			20,954
Accrued interest receivable	48,043			45,832
Deferred tax asset	64,575			67,121
Core deposit intangible, net	11,746			12,347
Goodwill	147,053			147,053
Non-marketable equity securities	23,944			25,550
Other assets	76,183			74,035
Total assets	$	9,553,908		9,450,600
Liabilities
Non-interest bearing deposits	$	2,049,476		2,041,852
Interest bearing deposits	5,430,681			5,330,427
Securities sold under agreements to repurchase	497,187			473,650
Federal Home Loan Bank advances	211,627			251,749
Other borrowed funds	8,894			4,440
Subordinated debentures	126,027			125,991
Accrued interest payable	3,467			3,584
Other liabilities	91,309			102,038
Total liabilities	8,418,668			8,333,731
Stockholders’ Equity
Preferred shares, $0.01 par value per share, 1,000,000 shares authorized, none issued or outstanding	—			—
Common stock, $0.01 par value per share, 117,187,500 shares authorized	766			765
Paid-in capital	749,381			749,107
Retained earnings - substantially restricted	389,505			374,379
Accumulated other comprehensive loss	(4,412		)	(7,382	)
Total stockholders’ equity	1,135,240			1,116,869
Total liabilities and stockholders’ equity	$	9,553,908		9,450,600
Number of common stock shares issued and outstanding	76,619,952			76,525,402

See accompanying notes to unaudited condensed consolidated financial statements.

4

GLACIER BANCORP, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months ended
(Dollars in thousands, except per share data)	March 31, 2017			March 31, 2016
Interest Income
Investment securities	$	21,939		23,883
Residential real estate loans	7,918			8,285
Commercial loans	49,970			44,503
Consumer and other loans	7,801			7,710
Total interest income	87,628			84,381
Interest Expense
Deposits	4,440			4,795
Securities sold under agreements to repurchase	382			318
Federal Home Loan Bank advances	1,510			1,652
Other borrowed funds	15			18
Subordinated debentures	1,019			892
Total interest expense	7,366			7,675
Net Interest Income	80,262			76,706
Provision for loan losses	1,598			568
Net interest income after provision for loan losses	78,664			76,138
Non-Interest Income
Service charges and other fees	15,633			14,681
Miscellaneous loan fees and charges	980			1,021
Gain on sale of loans	6,358			5,992
(Loss) gain on sale of investments	(100		)	108
Other income	2,818			2,450
Total non-interest income	25,689			24,252
Non-Interest Expense
Compensation and employee benefits	39,246			36,941
Occupancy and equipment	6,646			6,676
Advertising and promotions	1,973			2,125
Data processing	3,124			3,373
Other real estate owned	273			390
Regulatory assessments and insurance	1,061			1,508
Core deposit intangibles amortization	601			797
Other expenses	10,420			10,546
Total non-interest expense	63,344			62,356
Income Before Income Taxes	41,009			38,034
Federal and state income tax expense	9,754			9,352
Net Income	$	31,255		28,682
Basic earnings per share	$	0.41		0.38
Diluted earnings per share	$	0.41		0.38
Dividends declared per share	$	0.21		0.20
Average outstanding shares - basic	76,572,116			76,126,251
Average outstanding shares - diluted	76,633,283			76,173,417

See accompanying notes to unaudited condensed consolidated financial statements.

5

GLACIER BANCORP, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Three Months ended
(Dollars in thousands)	March 31, 2017			March 31, 2016
Net Income	$	31,255		28,682
Other Comprehensive Income, Net of Tax
Unrealized gains on available-for-sale securities	3,113			13,598
Reclassification adjustment for losses (gains) included in net income	139			(61	)
Net unrealized gains on available-for-sale securities	3,252			13,537
Tax effect	(1,260		)	(5,244	)
Net of tax amount	1,992			8,293
Unrealized gains (losses) on derivatives used for cash flow hedges	264			(9,928	)
Reclassification adjustment for losses included in net income	1,332			1,829
Net unrealized gains (losses) on derivatives used for cash flow hedges	1,596			(8,099	)
Tax effect	(618		)	3,138
Net of tax amount	978			(4,961	)
Total other comprehensive income, net of tax	2,970			3,332
Total Comprehensive Income	$	34,225		32,014

See accompanying notes to unaudited condensed consolidated financial statements.

6

GLACIER BANCORP, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

Three Months ended March 31, 2017 and 2016

(Dollars in thousands, except per share data)	Common Stock			Paid-in Capital		Retained Earnings Substantially Restricted		Accumulated Other Compre- hensive Income (Loss)
	Shares	Amount								Total
Balance at December 31, 2015	76,086,288	$	761	736,368		337,532		1,989		1,076,650
Comprehensive income	—	—		—		28,682		3,332		32,014
Cash dividends declared ($0.20 per share)	—	—		—		(15,281	)	—		(15,281	)
Stock issuances under stock incentive plans	82,100	1		(1	)	—		—		—
Stock-based compensation and related taxes	—	—		297		—		—		297
Balance at March 31, 2016	76,168,388	$	762	736,664		350,933		5,321		1,093,680
Balance at December 31, 2016	76,525,402	$	765	749,107		374,379		(7,382	)	1,116,869
Comprehensive income	—	—		—		31,255		2,970		34,225
Cash dividends declared ($0.21 per share)	—	—		—		(16,129	)	—		(16,129	)
Stock issuances under stock incentive plans	94,550	1		(1	)	—		—		—
Stock-based compensation and related taxes	—	—		275		—		—		275
Balance at March 31, 2017	76,619,952	$	766	749,381		389,505		(4,412	)	1,135,240

See accompanying notes to unaudited condensed consolidated financial statements.

7

GLACIER BANCORP, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Three Months ended
(Dollars in thousands)	March 31, 2017			March 31, 2016
Operating Activities
Net income	$	31,255		28,682
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	1,598			568
Net amortization of investment securities premiums and discounts	5,830			6,594
Net accretion of purchase accounting adjustments	(1,394		)	(1,774	)
Loans held for sale originated or acquired	(171,110		)	(179,471	)
Proceeds from sales of loans held for sale	231,318			202,605
Gain on sale of loans	(6,358		)	(5,992	)
Loss (gain) on sale of investments	100			(108	)
Bank-owned life insurance income, net	(315		)	(257	)
Stock-based compensation	1,722			828
Net tax benefits from stock-based compensation	(1,117		)	(253	)
Depreciation of premises and equipment	3,720			3,730
(Gain) loss on sale of other real estate owned and write-downs, net	(928		)	52
Amortization of core deposit intangibles	601			797
Amortization of investments in variable interest entities	730			255
Net increase in accrued interest receivable	(2,211		)	(2,839	)
Net decrease (increase) in other assets	1,093			(98	)
Net (decrease) increase in accrued interest payable	(117		)	91
Net (decrease) increase in other liabilities	(660		)	2,823
Net cash provided by operating activities	93,757			56,233
Investing Activities
Sales of available-for-sale securities	—			20,539
Maturities, prepayments and calls of available-for-sale securities	110,475			156,779
Purchases of available-for-sale securities	(1,701		)	(163,654	)
Maturities, prepayments and calls of held-to-maturity securities	7,790			11,155
Purchases of held-to-maturity securities	—			(1,223	)
Principal collected on loans	420,744			347,869
Loans originated or acquired	(620,407		)	(465,644	)
Net increase of premises and equipment and other real estate owned	(2,805		)	(2,726	)
Proceeds from sale of other real estate owned	4,156			4,457
Proceeds from sale of non-marketable equity securities	18,206			27,896
Purchases of non-marketable equity securities	(16,600		)	(24,599	)
Proceeds from bank-owned life insurance	437			294
Investments in variable interest entities	(3,865		)	—
Net cash used in investing activities	(83,570		)	(88,857	)

See accompanying notes to unaudited condensed consolidated financial statements.

8

GLACIER BANCORP, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

	Three Months ended
(Dollars in thousands)	March 31, 2017			March 31, 2016
Financing Activities
Net increase in deposits	$	107,888		71,218
Net increase in securities sold under agreements to repurchase	23,537			22,546
Net decrease in short-term Federal Home Loan Bank advances	(40,000		)	(80,000	)
Repayments of long-term Federal Home Loan Bank advances	(114		)	(128	)
Net increase in other borrowed funds	4,454			31
Cash dividends paid	(23,042		)	(22,883	)
Tax withholding payments for stock-based compensation	(1,447		)	(552	)
Net cash provided by (used in) financing activities	71,276			(9,768	)
Net increase (decrease) in cash and cash equivalents	81,463			(42,392	)
Cash and cash equivalents at beginning of period	152,541			193,253
Cash and cash equivalents at end of period	$	234,004		150,861
Supplemental Disclosure of Cash Flow Information
Cash paid during the period for interest	$	7,483		7,584
Cash paid during the period for income taxes	70			—
Supplemental Disclosure of Non-Cash Investing Activities
Sale and refinancing of other real estate owned	$	345		474
Transfer of loans to other real estate owned	390			178
Dividends declared but not paid	16,224			15,281

See accompanying notes to unaudited condensed consolidated financial statements.

9

GLACIER BANCORP, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Nature of Operations and Summary of Significant Accounting Policies

General

Glacier Bancorp, Inc. (“Company”) is a Montana corporation headquartered in Kalispell, Montana. The Company provides a full range of banking services to individuals and businesses in Montana, Idaho, Wyoming, Colorado, Utah and Washington through its wholly-owned bank subsidiary, Glacier Bank (“Bank”). The Company offers a wide range of banking products and services, including transaction and savings deposits, real estate, commercial, agriculture and consumer loans and mortgage origination services. The Company serves individuals, small to medium-sized businesses, community organizations and public entities.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the Company’s financial condition as of March 31, 2017, the results of operations and comprehensive income for the three month periods ended March 31, 2017 and 2016, and changes in stockholders’ equity and cash flows for the three month periods ended March 31, 2017 and 2016. The condensed consolidated statement of financial condition of the Company as of December 31, 2016 has been derived from the audited consolidated statements of the Company as of that date.

The accompanying unaudited condensed consolidated financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. Operating results for the three months ended March 31, 2017 are not necessarily indicative of the results anticipated for the year ending December 31, 2017.

The Company is a defendant in legal proceedings arising in the normal course of business. In the opinion of management, the disposition of pending litigation will not have a material affect on the Company’s consolidated financial position, results of operations or liquidity.

Material estimates that are particularly susceptible to significant change include: 1) the determination of the allowance for loan and lease losses (“ALLL” or “allowance”); 2) the valuation of investment securities; 3) the valuation of real estate acquired in connection with foreclosures or in satisfaction of loans; and 4) the evaluation of goodwill impairment. For the determination of the ALLL and real estate valuation estimates, management obtains independent appraisals (new or updated) for significant items. Estimates relating to investment valuations are obtained from independent third parties. Estimates relating to the evaluation of goodwill for impairment are determined based on internal calculations using significant independent party inputs.

Principles of Consolidation

The consolidated financial statements of the Company include the parent holding company and the Bank. The Bank consists of thirteen bank divisions, a treasury division and an information technology division. The treasury division includes the Bank’s investment portfolio and wholesale borrowings and the information technology division includes the Bank’s internal data processing and information technology expenses. The Bank divisions operate under separate names, management teams and advisory directors. The Company considers the Bank to be its sole operating segment as the Bank 1) engages in similar bank business activity from which it earns revenues and incurs expenses; 2) the operating results of the Bank are regularly reviewed by the Chief Executive Officer (i.e., the chief operating decision maker) who makes decisions about resources to be allocated to the Bank; and 3) financial information is available for the Bank. All significant inter-company transactions have been eliminated in consolidation.

10

The Bank has subsidiary interests in variable interest entities (“VIE”) for which the Bank has both the power to direct the VIE’s significant activities and the obligation to absorb losses or right to receive benefits of the VIE that could potentially be significant to the VIE. These subsidiary interests are included in the Company’s consolidated financial statements. The parent holding company also owns non-bank subsidiaries that have issued trust preferred securities as Tier 1 capital instruments. The trust subsidiaries are not included in the Company’s consolidated financial statements. The Company's investments in the trust subsidiaries are included in non-marketable equity securities on the Company's statement of financial condition.

In August 2016, the Company completed its acquisition of Treasure State Bank (“TSB”), a community bank based in Missoula, Montana. The transaction was accounted for using the acquisition method, and its results of operations have been included in the Company’s consolidated financial statements as of the acquisition date.

Loans Receivable

Loans that are intended to be held-to-maturity are reported at the unpaid principal balance less net charge-offs and adjusted for deferred fees and costs on originated loans and unamortized premiums or discounts on acquired loans. Fees and costs on originated loans and premiums or discounts on acquired loans are deferred and subsequently amortized or accreted as a yield adjustment over the expected life of the loan utilizing the interest method. The objective of the interest method is to calculate periodic interest income at a constant effective yield. When a loan is paid off prior to maturity, the remaining fees and costs on originated loans and premiums or discounts on acquired loans are immediately recognized into interest income.

The Company’s loan segments, which are based on the purpose of the loan, include residential real estate, commercial, and consumer loans. The Company’s loan classes, a further disaggregation of segments, include residential real estate loans (residential real estate segment), commercial real estate and other commercial loans (commercial segment), and home equity and other consumer loans (consumer segment).

Loans that are thirty days or more past due based on payments received and applied to the loan are considered delinquent. Loans are designated non-accrual and the accrual of interest is discontinued when the collection of the contractual principal or interest is unlikely. A loan is typically placed on non-accrual when principal or interest is due and has remained unpaid for ninety days or more. When a loan is placed on non-accrual status, interest previously accrued but not collected is reversed against current period interest income. Subsequent payments on non-accrual loans are applied to the outstanding principal balance if doubt remains as to the ultimate collectability of the loan. Interest accruals are not resumed on partially charged-off impaired loans. For other loans on nonaccrual, interest accruals are resumed on such loans only when they are brought fully current with respect to interest and principal and when, in the judgment of management, the loans are estimated to be fully collectible as to both principal and interest.

The Company considers impaired loans to be the primary credit quality indicator for monitoring the credit quality of the loan portfolio. Loans are designated impaired when, based upon 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 and, therefore, the Company has serious doubts as to the ability of such borrowers to fulfill the contractual obligation. Impaired loans include non-performing loans (i.e., non-accrual loans and accruing loans ninety days or more past due) and accruing loans under ninety days past due where it is probable payments will not be received according to the loan agreement (e.g., troubled debt restructuring). Interest income on accruing impaired loans is recognized using the interest method. The Company measures impairment on a loan-by-loan basis in the same manner for each class within the loan portfolio. An insignificant delay or shortfall in the amounts of payments would not cause a loan or lease to be considered impaired. The Company determines the significance of payment delays and shortfalls on a case-by-case basis, taking into consideration all of the facts and circumstances surrounding the loan and the borrower, including the length and reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest due.

11

A restructured loan is considered a troubled debt restructuring (“TDR”) if the creditor, for economic or legal reasons related to the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider. The Company periodically enters into restructure agreements with borrowers whereby the loans were previously identified as TDRs. When such circumstances occur, the Company carefully evaluates the facts of the subsequent restructure to determine the appropriate accounting and under certain circumstances it may be acceptable not to account for the subsequently restructured loan as a TDR. When assessing whether a concession has been granted by the Company, any prior forgiveness on a cumulative basis is considered a continuing concession. A TDR loan is considered an impaired loan and a specific valuation allowance is established when the fair value of the collateral-dependent loan or present value of the loan’s expected future cash flows (discounted at the loan’s effective interest rate based on the original contractual rate) is lower than the carrying value of the impaired loan. The Company has made the following types of loan modifications, some of which were considered a TDR:

• reduction of the stated interest rate for the remaining term of the debt;

• extension of the maturity date(s) at a stated rate of interest lower than the current market rate for newly originated debt having similar risk characteristics; and

• reduction of the face amount of the debt as stated in the debt agreements.

The Company recognizes that while borrowers may experience deterioration in their financial condition, many continue to be creditworthy customers who have the willingness and capacity for debt repayment. In determining whether non-restructured or unimpaired loans issued to a single or related party group of borrowers should continue to accrue interest when the borrower has other loans that are impaired or are TDRs, the Company on a quarterly or more frequent basis performs an updated and comprehensive assessment of the willingness and capacity of the borrowers to timely and ultimately repay their total debt obligations, including contingent obligations. Such analysis takes into account current financial information about the borrowers and financially responsible guarantors, if any, including for example:

• analysis of global, i.e., aggregate debt service for total debt obligations;

• assessment of the value and security protection of collateral pledged using current market conditions and alternative market assumptions across a variety of potential future situations; and

• loan structures and related covenants.

For additional information relating to loans, see Note 3.

Allowance for Loan and Lease Losses

Based upon management’s analysis of the Company’s loan portfolio, the balance of the ALLL is an estimate of probable credit losses known and inherent within the Bank’s loan portfolio as of the date of the consolidated financial statements. The ALLL is analyzed at the loan class level and is maintained within a range of estimated losses. Determining the adequacy of the ALLL involves a high degree of judgment and is inevitably imprecise as the risk of loss is difficult to quantify. The determination of the ALLL and the related provision for loan losses is a critical accounting estimate that involves management’s judgments about known relevant internal and external environmental factors that affect loan losses. The balance of the ALLL is highly dependent upon management’s evaluations of borrowers’ current and prospective performance, appraisals and other variables affecting the quality of the loan portfolio. Individually significant loans and major lending areas are reviewed periodically to determine potential problems at an early date. Changes in management’s estimates and assumptions are reasonably possible and may have a material impact upon the Company’s consolidated financial statements, results of operations or capital.

Risk characteristics considered in the ALLL analysis applicable to each loan class within the Company's loan portfolio are as follows:

Residential Real Estate.  Residential real estate loans are secured by owner-occupied 1-4 family residences.  Repayment of these loans is primarily dependent on the personal income and credit rating of the borrowers.  Credit risk in these loans is impacted by economic conditions within the Company’s market areas that affect the value of the property securing the loans and affect the borrowers' personal incomes.  Mitigating risk factors for this loan class include a large number of borrowers, geographic dispersion of market areas and the loans are originated for relatively smaller amounts.

12

Commercial Real Estate.  Commercial real estate loans typically involve larger principal amounts, and repayment of these loans is generally dependent on the successful operation of the property securing the loan and/or the business conducted on the property securing the loan.  Credit risk in these loans is impacted by the creditworthiness of a borrower, valuation of the property securing the loan and conditions within the local economies in the Company’s diverse, geographic market areas.

Commercial.  Commercial loans consist of loans to commercial customers for use in financing working capital needs, equipment purchases and business expansions.  The loans in this category are repaid primarily from the cash flow of a borrower’s principal business operation.  Credit risk in these loans is driven by creditworthiness of a borrower and the economic conditions that impact the cash flow stability from business operations across the Company’s diverse, geographic market areas.

Home Equity.  Home equity loans consist of junior lien mortgages and first and junior lien lines of credit (revolving open-end and amortizing closed-end) secured by owner-occupied 1-4 family residences.  Repayment of these loans is primarily dependent on the personal income and credit rating of the borrowers.  Credit risk in these loans is impacted by economic conditions within the Company’s market areas that affect the value of the residential property securing the loans and affect the borrowers' personal incomes.  Mitigating risk factors for this loan class are a large number of borrowers, geographic dispersion of market areas and the loans are originated for terms that range from 10 years to 15 years.

Other Consumer.  The other consumer loan portfolio consists of various short-term loans such as automobile loans and loans for other personal purposes.  Repayment of these loans is primarily dependent on the personal income of the borrowers.  Credit risk is driven by consumer economic factors (such as unemployment and general economic conditions in the Company’s diverse, geographic market area) and the creditworthiness of a borrower.

The ALLL consists of a specific valuation allowance component and a general valuation allowance component. The specific component relates to loans that are determined to be impaired and individually evaluated for impairment. The Company measures impairment on a loan-by-loan basis based on the present value of expected future cash flows discounted at the loan’s effective interest rate, except when it is determined that repayment of the loan is expected to be provided solely by the underlying collateral. For impairment based on expected future cash flows, the Company considers all information available as of a measurement date, including past events, current conditions, potential prepayments, and estimated cost to sell when such costs are expected to reduce the cash flows available to repay or otherwise satisfy the loan. For alternative ranges of cash flows, the likelihood of the possible outcomes is considered in determining the best estimate of expected future cash flows. The effective interest rate for a loan restructured in a TDR is based on the original contractual rate. For collateral-dependent loans and real estate loans for which foreclosure or a deed-in-lieu of foreclosure is probable, impairment is measured by the fair value of the collateral, less estimated cost to sell. The fair value of the collateral is determined primarily based upon appraisal or evaluation of the underlying real property value.

The general valuation allowance component relates to probable credit losses inherent in the balance of the loan portfolio based on historical loss experience, adjusted for changes in trends and conditions of qualitative or environmental factors. The historical loss experience is based on the previous twelve quarters loss experience by loan class adjusted for risk characteristics in the existing loan portfolio. The same trends and conditions are evaluated for each class within the loan portfolio; however, the risk characteristics are weighted separately at the individual class level based on the Company’s judgment and experience.

The changes in trends and conditions evaluated for each class within the loan portfolio include the following:

• Changes in lending policies and procedures, including changes in underwriting standards and collection, charge-off, and recovery practices not considered elsewhere in estimating credit losses;

• Changes in global, national, regional, and local economic and business conditions and developments that affect the collectability of the portfolio, including the condition of various market segments;

• Changes in the nature and volume of the portfolio and in the terms of loans;

• Changes in experience, ability, and depth of lending management and other relevant staff;

• Changes in the volume and severity of past due and nonaccrual loans;

• Changes in the quality of the Company’s loan review system;

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

• The existence and effect of any concentrations of credit, and changes in the level of such concentrations; and

• The effect of other external factors such as competition and legal and regulatory requirements on the level of estimated credit losses in the Company’s existing portfolio.

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The ALLL is increased by provisions for loan losses which are charged to expense. The portions of loan balances determined by management to be uncollectible are charged off as a reduction of the ALLL and recoveries of amounts previously charged off are credited as an increase to the ALLL. The Company’s charge-off policy is consistent with bank regulatory standards. Consumer loans generally are charged off when the loan becomes over 120 days delinquent. Real estate acquired as a result of foreclosure or by deed-in-lieu of foreclosure is classified as real estate owned until such time as it is sold.

At acquisition date, the assets and liabilities of acquired banks are recorded at their estimated fair values which results in no ALLL carried over from acquired banks. Subsequent to acquisition, an allowance will be recorded on the acquired loan portfolios for further credit deterioration, if any.

Reclassifications

Certain reclassifications have been made to the 2016 financial statements to conform to the 2017 presentation.

Impact of Recent Authoritative Accounting Guidance

The Accounting Standards Codification^™ (“ASC”) is the Financial Accounting Standards Board’s (“FASB”) officially recognized source of authoritative GAAP applicable to all public and non-public non-governmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under the authority of the federal securities laws are also sources of authoritative GAAP for the Company as an SEC registrant. All other accounting literature is non-authoritative. The following paragraphs provide descriptions of recently adopted or newly issued but not yet effective accounting standards that could have a material effect on the Company’s financial position or results of operations.

In March 2017, FASB amended FASB ASC Subtopic 310-20, Receivables-Nonrefundable Fees and Other Costs. The amendments in the Update shorten the amortization period for certain callable debt securities held at a premium. Specifically, the amendments require the premium to be amortized to the earliest call date instead of the maturity date. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. The amendments are effective for public business entities for the first interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted and if adopted in an interim period, any adjustments should be reflected as of the beginning of the year that includes the interim period. The entity should apply the amendments on a modified retrospective basis through a cumulative-effective adjustment directly to retained earnings as of the beginning of the period of adoption. The Company has premiums on debt securities that are currently being amortized to the maturity date, primarily in state and local governments category. The Company is currently evaluating the amount of the premium associated with debt securities that will be impacted by the amendments and whether it will early adopt. The accounting policies and procedures will be modified after the Company has fully evaluated the standard, although, significant changes are not expected.

In January 2017, FASB amended FASB ASC Topic 350, Simplifying the Test for Goodwill. The amendments in the Update simplify the measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Instead, under these amendments, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss should not exceed the total amount of goodwill allocated to that reporting unit. The amendments are effective for public business entities for the first interim and annual reporting periods beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company has goodwill from prior business combinations and performs an annual impairment test or more frequently if changes or circumstances occur that would more-likely-than-not reduce the fair value of the reporting unit below its carrying value. During the third quarter of 2016, the Company performed its impairment assessment and determined the fair value of the aggregated reporting units exceed the carrying value, such that the Company’s goodwill was not considered impaired. Although the Company cannot anticipate future goodwill impairment assessments, based on the most recent assessment, it is unlikely that an impairment amount would need to be calculated and, therefore, the Company does not anticipate a material impact from these amendments to the Company’s financial position and results of operations. The current accounting policies and processes are not anticipated to change, except for the elimination of the Step 2 analysis. For additional information regarding goodwill impairment testing, see Note 4.

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In June 2016, FASB amended FASB ASC Topic 326, Financial Instruments - Credit Losses. The amendments in this Update replace the incurred loss model with a methodology that reflects expected credit losses over the life of the loan and requires consideration of a broader range of reasonable and supportable information to calculate credit loss estimates. The amendments are effective for public business entities for the first interim and annual reporting periods beginning after December 15, 2019. The Company is currently evaluating the impact of these amendments to the Company’s financial position and results of operations and currently does not know or cannot reasonably quantify the impact of the adoption of the amendments as a result of the complexity and extensive changes from the amendments. The ALLL is a material estimate of the Company and given the change from an incurred loss model to a methodology that considers the credit loss over the life of the loan, there is the potential for an increase in the ALLL at adoption date. The Company is anticipating a significant change in the processes and procedures to calculate the ALLL, including changes in assumptions and estimates to consider expected credit losses over the life of the loan versus the current accounting practice that utilizes the incurred loss model. The Company will also develop new procedures for determining an allowance for credit losses relating to held-to-maturity investment securities. In addition, the current accounting policy and procedures for other-than-temporary impairment on available-for-sale investment securities will be replaced with an allowance approach. The Company is expecting to begin developing and implementing processes and procedures during the next two years to ensure it is fully compliant with the amendments at adoption date. For additional information on the allowance for loan losses, see Note 3.

In March 2016, FASB amended FASB ASC Topic 718, Compensation - Stock Compensation. The amendments in this Update address certain aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification of awards on the statement of cash flows. The amendments were effective for public business entities for the first interim and annual reporting periods beginning after December 15, 2016 and the Company adopted the amendments as of January 1, 2017. The amendments require entities to recognize all income tax effects related to share-based payment awards in the statement of operations when the awards vest or are settled. Previously, income tax benefits at the settlement of awards were reported as increases (or decreases) to additional paid-in capital to the extent that those benefits were greater than (or less than) the income tax benefits recognized in earnings during the awards’ vesting periods. Such amounts are to be classified as an operating activity in the statement of cash flows instead of the prior accounting treatment, which required it to be classified as both an operating and a financing activity. The Company has elected to apply this classification change on a retrospective basis. Also in connection with the adoption of the Update, the Company has elected to change its accounting policy to recognize forfeitures as they occur. The requirement to report income tax effects in earnings has been applied to the settlement of awards on a prospective basis and the impact of applying the guidance reduced reported income tax expense for the three month period ended March 31, 2017 by $537,000, or approximately $0.01 per diluted common share. The implementation of the remaining provisions of the Update did not have a significant impact on the Company’s consolidated financial statements.

In February 2016, FASB amended FASB ASC Topic 842, Leases. The amendments in this Update address several aspects of lease accounting with the significant change being the recognition of lease assets and lease liabilities for leases previously classified as operating leases. The amendments are effective for public business entities for the first interim and annual reporting periods beginning after December 15, 2018, and early adoption is permitted. The Company has several lease agreements for which the amendments will require the Company to recognize a lease liability to make lease payments and a right-of-use asset which will represent its right to use the underlying asset for the lease term. The Company is currently reviewing the amendments to ensure it is fully compliant by the adoption date and doesn’t expect to early adopt. As permitted by the amendments, the Company is anticipating electing an accounting policy to not recognize lease assets and lease liabilities for leases with a term of twelve months or less. The impact is not expected to have a material effect on the Company’s financial position or results of operations since the Company does not have a material amount of lease agreements. The Company is currently in the process of fully evaluating the amendments and will subsequently implement new processes which are not expected to significantly change since the Company already has processes for certain lease agreements that recognize the lease assets and lease liabilities. In addition, the Company will change its current accounting policies to comply with the amendments with such changes as mentioned above.

15

In January 2016, FASB amended FASB ASC Topic 825, Financial Instruments. The amendments in this Update address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The amendments are effective for public business entities for the first interim and annual reporting periods beginning after December 15, 2017. Early adoption is only permitted under certain circumstances outlined in the amendments. A reporting entity should apply the amendments by means of a cumulative-effect adjustment to the Company’s statement of financial condition as of the beginning of the reporting year of adoption. The amendments will impact the Company in a few areas including requiring equity investments (with certain exclusions) to be measured at fair value with the changes recognized in net income, requirement to utilize an exit price when measuring the fair value of financial instruments, additional disclosures related to other comprehensive income, evaluation of a valuation allowance on a deferred tax asset related to available-for-sale investment securities in combination with the entity’s other deferred tax assets, and other disclosure changes. The Company is currently evaluating the impact of these amendments, but does not expect them to have a material material effect on the Company’s financial position or results of operations since it does not have a material amount of equity securities or a valuation allowance. However, the amendments will have an impact on certain items that are disclosed at fair value that are not currently utilizing the exit price notion when measuring fair value. As of March 31, 2017, the Company cannot quantify the change in the fair value of such disclosures since the Company is currently evaluating the full impact of the Update and is in the planning stages of developing appropriate procedures and processes to comply with the disclosure requirements of such amendments. The current accounting policies and procedures will be modified after the Company has fully evaluated the standard to comply with the accounting changes mentioned above.

In May 2014, FASB amended FASB ASC Topic 606, Revenue from Contracts with Customers. The amendments clarify the principals for recognizing revenue and develop a common revenue standard among industries. The new guidance establishes the following core principal: 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 goods or services. Five steps are provided for a company or organization to follow to achieve such core principle. The new guidance also includes a cohesive set of disclosure requirements that will provide users of financial statements with comprehensive information about the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The entity should apply the amendments using one of two retrospective methods described in the amendment. Accounting Standards Update No. 2015-14, Revenue from Contracts with Customers (Topic 606) delayed the effective date for public entities to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Several subsequent amendments have been issued that provide clarifying guidance and are effective with the adoption of the original Update. Early application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company is in its preliminary stages of evaluating the impact of these amendments, although it doesn’t expect the amendments to have a significant impact to the Company’s financial position or results of operation. The amendments could potentially impact the accounting procedures and processes over the recognition of certain revenue sources, including, but not limited to, non-interest income. The Company is expecting to begin developing processes and procedures during 2017 to ensure it is fully compliant with these amendments at the date of adoption.

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Note 2. Investment Securities

The following tables present the amortized cost, the gross unrealized gains and losses and the fair value of the Company’s investment securities:

	March 31, 2017
	Amortized Cost		Gross Unrealized			Fair Value
(Dollars in thousands)			Gains	Losses
Available-for-sale
U.S. government and federal agency	$	37,598	26	(208	)	37,416
U.S. government sponsored enterprises	19,551		31	(46	)	19,536
State and local governments	750,443		21,463	(9,739	)	762,167
Corporate bonds	443,012		1,274	(585	)	443,701
Residential mortgage-backed securities	954,072		2,959	(7,940	)	949,091
Commercial mortgage-backed securities	103,918		26	(1,334	)	102,610
Total available-for-sale	2,308,594		25,779	(19,852	)	2,314,521
Held-to-maturity
State and local governments	667,388		21,125	(8,118	)	680,395
Total held-to-maturity	667,388		21,125	(8,118	)	680,395
Total investment securities	$	2,975,982	46,904	(27,970	)	2,994,916

	December 31, 2016
	Amortized Cost		Gross Unrealized			Fair Value
(Dollars in thousands)			Gains	Losses
Available-for-sale
U.S. government and federal agency	$	39,554	15	(162	)	39,407
U.S. government sponsored enterprises	19,557		55	(42	)	19,570
State and local governments	775,395		20,941	(9,963	)	786,373
Corporate bonds	471,569		1,175	(793	)	471,951
Residential mortgage-backed securities	1,014,518		2,744	(9,747	)	1,007,515
Commercial mortgage-backed securities	102,209		30	(1,578	)	100,661
Total available-for-sale	2,422,802		24,960	(22,285	)	2,425,477
Held-to-maturity
State and local governments	675,674		21,400	(7,985	)	689,089
Total held-to-maturity	675,674		21,400	(7,985	)	689,089
Total investment securities	$	3,098,476	46,360	(30,270	)	3,114,566

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The following table presents the amortized cost and fair value of available-for-sale and held-to-maturity securities by contractual maturity at March 31, 2017. Actual maturities may differ from expected or contractual maturities since issuers have the right to prepay obligations with or without prepayment penalties.

	March 31, 2017
	Available-for-Sale			Held-to-Maturity
(Dollars in thousands)	Amortized Cost		Fair Value	Amortized Cost	Fair Value
Due within one year	$	146,875	147,136	—	—
Due after one year through five years	393,309		394,219	593	605
Due after five years through ten years	204,217		207,961	57,405	58,611
Due after ten years	506,203		513,504	609,390	621,179
	1,250,604		1,262,820	667,388	680,395
Mortgage-backed securities 1	1,057,990		1,051,701	—	—
Total	$	2,308,594	2,314,521	667,388	680,395

__________

¹Mortgage-backed securities, which have prepayment provisions, are not assigned to maturity categories due to fluctuations in their prepayment speeds.

Proceeds from sales and calls of investment securities and the associated gains and losses that have been included in earnings are listed below:

	Three Months ended
(Dollars in thousands)	March 31, 2017			March 31, 2016
Available-for-sale
Proceeds from sales and calls of investment securities	$	8,491		58,623
Gross realized gains 1	10			800
Gross realized losses 1	(149		)	(739	)
Held-to-maturity
Proceeds from calls of investment securities	7,790			11,155
Gross realized gains 1	81			47
Gross realized losses 1	(42		)	—

__________

¹The gain or loss on the sale or call of each investment security is determined by the specific identification method.

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Investment securities with an unrealized loss position are summarized as follows:

	March 31, 2017
	Less than 12 Months				12 Months or More			Total
(Dollars in thousands)	Fair Value		Unrealized Loss		Fair Value	Unrealized Loss		Fair Value	Unrealized Loss
Available-for-sale
U.S. government and federal agency	$	4,527	(42	)	22,972	(166	)	27,499	(208	)
U.S. government sponsored enterprises	6,048		(46	)	—	—		6,048	(46	)
State and local governments	208,261		(4,716	)	78,082	(5,023	)	286,343	(9,739	)
Corporate bonds	142,028		(575	)	6,128	(10	)	148,156	(585	)
Residential mortgage-backed securities	636,458		(7,670	)	27,561	(270	)	664,019	(7,940	)
Commercial mortgage-backed securities	100,570		(1,334	)	—	—		100,570	(1,334	)
Total available-for-sale	$	1,097,892	(14,383	)	134,743	(5,469	)	1,232,635	(19,852	)
Held-to-maturity
State and local governments	$	105,671	(1,644	)	85,782	(6,474	)	191,453	(8,118	)
Total held-to-maturity	$	105,671	(1,644	)	85,782	(6,474	)	191,453	(8,118	)

	December 31, 2016
	Less than 12 Months				12 Months or More			Total
(Dollars in thousands)	Fair Value		Unrealized Loss		Fair Value	Unrealized Loss		Fair Value	Unrealized Loss
Available-for-sale
U.S. government and federal agency	$	6,718	(24	)	26,239	(138	)	32,957	(162	)
U.S. government sponsored enterprises	6,049		(42	)	—	—		6,049	(42	)
State and local governments	222,700		(4,949	)	81,783	(5,014	)	304,483	(9,963	)
Corporate bonds	174,821		(774	)	6,141	(19	)	180,962	(793	)
Residential mortgage-backed securities	688,811		(9,079	)	29,957	(668	)	718,768	(9,747	)
Commercial mortgage-backed securities	89,298		(1,578	)	—	—		89,298	(1,578	)
Total available-for-sale	$	1,188,397	(16,446	)	144,120	(5,839	)	1,332,517	(22,285	)
Held-to-maturity
State and local governments	$	117,912	(1,712	)	86,601	(6,273	)	204,513	(7,985	)
Total held-to-maturity	$	117,912	(1,712	)	86,601	(6,273	)	204,513	(7,985	)

Based on an analysis of its investment securities with unrealized losses as of March 31, 2017 and December 31, 2016, the Company determined that none of such securities had other-than-temporary impairment and the unrealized losses were primarily the result of interest rate changes and market spreads subsequent to acquisition. The fair value of the investment securities is expected to recover as payments are received and the securities approach maturity. At March 31, 2017, management determined that it did not intend to sell investment securities with unrealized losses, and there was no expected requirement to sell any of its investment securities with unrealized losses before recovery of their amortized cost.

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Note 3. Loans Receivable, Net

The Company’s loan portfolio is comprised of three segments: residential real estate, commercial, and consumer and other loans. The loan segments are further disaggregated into the following classes: residential real estate, commercial real estate, other commercial, home equity and other consumer loans. The following table presents loans receivable for each portfolio class of loans:

	At or for the Three Months ended			At or for the Year ended
(Dollars in thousands)	March 31, 2017			December 31, 2016
Residential real estate loans	$	685,458		674,347
Commercial loans
Real estate	3,056,372			2,990,141
Other commercial	1,462,110			1,342,250
Total	4,518,482			4,332,391
Consumer and other loans
Home equity	433,554			434,774
Other consumer	239,480			242,951
Total	673,034			677,725
Loans receivable 1	5,876,974			5,684,463
Allowance for loan and lease losses	(129,226		)	(129,572	)
Loans receivable, net	$	5,747,748		5,554,891
Weighted-average interest rate on loans (tax-equivalent)	4.73		%	4.77	%

__________

¹  Includes net deferred fees, costs, premiums and discounts of $12,017,000 and $13,372,000 at March 31, 2017 and December 31, 2016, respectively.

The following tables summarize the activity in the ALLL by portfolio segment:

	Three Months ended March 31, 2017
(Dollars in thousands)	Total			Residential Real Estate		Commercial Real Estate		Other Commercial		Home Equity		Other Consumer
Balance at beginning of period	$	129,572		12,436		65,773		37,823		7,572		5,968
Provision for loan losses	1,598			(926	)	(370	)	1,621		129		1,144
Charge-offs	(4,229		)	(22	)	(888	)	(471	)	(96	)	(2,752	)
Recoveries	2,285			47		238		184		74		1,742
Balance at end of period	$	129,226		11,535		64,753		39,157		7,679		6,102

	Three Months ended March 31, 2016
(Dollars in thousands)	Total			Residential Real Estate		Commercial Real Estate		Other Commercial		Home Equity		Other Consumer
Balance at beginning of period	$	129,697		14,427		67,877		32,525		8,998		5,870
Provision for loan losses	568			(1,149	)	(873	)	3,720		(793	)	(337	)
Charge-offs	(1,163		)	(100	)	(253	)	(324	)	(229	)	(257	)
Recoveries	969			18		295		133		173		350
Balance at end of period	$	130,071		13,196		67,046		36,054		8,149		5,626

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The following tables disclose the balance in the ALLL and the recorded investment in loans by portfolio segment:

	March 31, 2017
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Allowance for loan and lease losses
Individually evaluated for impairment	$	6,787	245	545	5,047	551	399
Collectively evaluated for impairment	122,439		11,290	64,208	34,110	7,128	5,703
Total allowance for loan and lease losses	$	129,226	11,535	64,753	39,157	7,679	6,102
Loans receivable
Individually evaluated for impairment	$	135,086	13,048	85,452	27,050	6,449	3,087
Collectively evaluated for impairment	5,741,888		672,410	2,970,920	1,435,060	427,105	236,393
Total loans receivable	$	5,876,974	685,458	3,056,372	1,462,110	433,554	239,480

	December 31, 2016
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Allowance for loan and lease losses
Individually evaluated for impairment	$	6,881	856	922	4,419	296	388
Collectively evaluated for impairment	122,691		11,580	64,851	33,404	7,276	5,580
Total allowance for loan and lease losses	$	129,572	12,436	65,773	37,823	7,572	5,968
Loans receivable
Individually evaluated for impairment	$	130,263	11,612	85,634	23,950	5,934	3,133
Collectively evaluated for impairment	5,554,200		662,735	2,904,507	1,318,300	428,840	239,818
Total loans receivable	$	5,684,463	674,347	2,990,141	1,342,250	434,774	242,951

Substantially all of the Company’s loans receivable are with customers in the Company’s geographic market areas. Although the Company has a diversified loan portfolio, a substantial portion of its customers’ ability to honor their obligations is dependent upon the economic performance in the Company’s market areas.

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The following tables disclose information related to impaired loans by portfolio segment:

	At or for the Three Months ended March 31, 2017
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Loans with a specific valuation allowance
Recorded balance	$	19,877	2,891	5,279	10,053	546	1,108
Unpaid principal balance	20,139		2,955	5,285	10,190	559	1,150
Specific valuation allowance	6,787		245	545	5,047	551	399
Average balance	21,003		2,825	7,204	9,434	440	1,100
Loans without a specific valuation allowance
Recorded balance	$	115,209	10,157	80,173	16,997	5,903	1,979
Unpaid principal balance	138,436		11,224	98,480	19,350	7,323	2,059
Average balance	111,672		9,505	78,339	16,067	5,751	2,010
Total
Recorded balance	$	135,086	13,048	85,452	27,050	6,449	3,087
Unpaid principal balance	158,575		14,179	103,765	29,540	7,882	3,209
Specific valuation allowance	6,787		245	545	5,047	551	399
Average balance	132,675		12,330	85,543	25,501	6,191	3,110

	At or for the Year ended December 31, 2016
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Loans with a specific valuation allowance
Recorded balance	$	22,128	2,759	9,129	8,814	334	1,092
Unpaid principal balance	22,374		2,825	9,130	8,929	345	1,145
Specific valuation allowance	6,881		856	922	4,419	296	388
Average balance	26,745		4,942	10,441	9,840	257	1,265
Loans without a specific valuation allowance
Recorded balance	$	108,135	8,853	76,505	15,136	5,600	2,041
Unpaid principal balance	131,059		9,925	94,180	17,724	7,120	2,110
Average balance	108,827		12,858	72,323	15,537	6,004	2,105
Total
Recorded balance	$	130,263	11,612	85,634	23,950	5,934	3,133
Unpaid principal balance	153,433		12,750	103,310	26,653	7,465	3,255
Specific valuation allowance	6,881		856	922	4,419	296	388
Average balance	135,572		17,800	82,764	25,377	6,261	3,370

Interest income recognized on impaired loans for the three months ended March 31, 2017 and 2016 was not significant.

22

The following tables present an aging analysis of the recorded investment in loans by portfolio segment:

	March 31, 2017
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Accruing loans 30-59 days past due	$	27,122	5,255	11,294	7,657	1,555	1,361
Accruing loans 60-89 days past due	12,038		431	8,100	2,259	641	607
Accruing loans 90 days or more past due	3,028		—	203	2,441	336	48
Non-accrual loans	50,674		5,949	30,277	8,301	5,619	528
Total past due and non-accrual loans	92,862		11,635	49,874	20,658	8,151	2,544
Current loans receivable	5,784,112		673,823	3,006,498	1,441,452	425,403	236,936
Total loans receivable	$	5,876,974	685,458	3,056,372	1,462,110	433,554	239,480

	December 31, 2016
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Accruing loans 30-59 days past due	$	20,599	6,338	5,079	5,388	2,439	1,355
Accruing loans 60-89 days past due	5,018		1,398	754	1,352	844	670
Accruing loans 90 days or more past due	1,099		266	145	283	191	214
Non-accrual loans	49,332		4,528	30,216	8,817	5,240	531
Total past due and non-accrual loans	76,048		12,530	36,194	15,840	8,714	2,770
Current loans receivable	5,608,415		661,817	2,953,947	1,326,410	426,060	240,181
Total loans receivable	$	5,684,463	674,347	2,990,141	1,342,250	434,774	242,951

The following tables present TDRs that occurred during the periods presented and the TDRs that occurred within the previous twelve months that subsequently defaulted during the periods presented:

	Three Months ended March 31, 2017
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
TDRs that occurred during the period
Number of loans	10		2	2	4	1	1
Pre-modification recorded balance	$	9,555	280	582	8,530	153	10
Post-modification recorded balance	$	9,552	280	582	8,530	153	7
TDRs that subsequently defaulted
Number of loans	2		—	—	1	—	1
Recorded balance	$	25	—	—	18	—	7

23

	Three Months ended March 31, 2016
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
TDRs that occurred during the period
Number of loans	3		—	1	1	1	—
Pre-modification recorded balance	$	8,959	—	56	8,755	148	—
Post-modification recorded balance	$	8,959	—	56	8,755	148	—
TDRs that subsequently defaulted
Number of loans	—		—	—	—	—	—
Recorded balance	$	—	—	—	—	—	—

The modifications for the TDRs that occurred during the three months ended March 31, 2017 and 2016 included one or a combination of the following: an extension of the maturity date, a reduction of the interest rate or a reduction in the principal amount.

In addition to the TDRs that occurred during the period provided in the preceding tables, the Company had TDRs with pre-modification loan balances of $514,000 and $210,000 for the three months ended March 31, 2017 and 2016, respectively, for which other real estate owned (“OREO”) was received in full or partial satisfaction of the loans. The majority of such TDRs were in commercial real estate and residential real estate for the three months ended March 31, 2017 and 2016, respectively. At March 31, 2017 and December 31, 2016, the Company had $2,532,000 and $1,770,000, respectively, of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process. At March 31, 2017 and December 31, 2016, the Company had $2,354,000 and $2,699,000, respectively, of OREO secured by residential real estate properties.

Note 4. Goodwill

There were no changes in the carrying value of goodwill during the three months ended March 31, 2017 and 2016. The gross carrying value of goodwill and the accumulated impairment charge consists of the following:

(Dollars in thousands)	March 31, 2017			December 31, 2016
Gross carrying value	$	187,212		187,212
Accumulated impairment charge 1	(40,159		)	(40,159	)
Net carrying value	$	147,053		147,053

__________

¹ A goodwill impairment charge was recognized in 2011 and was due to high levels of volatility and dislocation in bank stock prices nationwide.

The Company performed its annual goodwill impairment test during the third quarter of 2016 and determined the fair value of the aggregated reporting units exceeded the carrying value, such that the Company’s goodwill was not considered impaired. Changes in the economic environment, operations of the aggregated reporting units, or other factors could result in the decline in the fair value of the aggregated reporting units which could result in a goodwill impairment in the future.

24

Note 5. Variable Interest Entities

A VIE is a partnership, limited liability company, trust or other legal entity that meets one of the following criteria: 1) the entity’s equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support from other parties; 2) the holders of the equity investment at risk, as a group, lack the characteristics of a controlling financial interest; and 3) the voting rights of some holders of the equity investment at risk are disproportionate to their obligation to absorb losses or receive returns, and substantially all of the activities are conducted on behalf of the holder of equity investment at risk with disproportionately few voting rights. A VIE must be consolidated by the Company if it is deemed to be the primary beneficiary, which is the party involved with the VIE that has both: 1) the power to direct the activities of the VIE that most significantly affect the VIE’s economic performance; and 2) the obligation to absorb the losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

The Company’s VIEs are regularly monitored to determine if any reconsideration events have occurred that could cause the primary beneficiary status to change. A previously unconsolidated VIE is consolidated when the Company becomes the primary beneficiary. A previously consolidated VIE is deconsolidated when the Company ceases to be the primary beneficiary or the entity is no longer a VIE.

Consolidated Variable Interest Entities

The Company has equity investments in Certified Development Entities (“CDE”) which have received allocations of New Markets Tax Credits (“NMTC”). The NMTC program provides federal tax incentives to investors to make investments in distressed communities and promotes economic improvements through the development of successful businesses in these communities. The NMTC is available to investors over a seven-year period and is subject to recapture if certain events occur during such period. The maximum exposure to loss in the CDEs is the amount of equity invested and credit extended by the Company. However, the Company has credit protection in the form of indemnification agreements, guarantees, and collateral arrangements. The Company has evaluated the variable interests held by the Company in each CDE (NMTC) investment and determined the Company does not individually meet the characteristics of a primary beneficiary; however, the related-party group does meet the criteria as a group and substantially all of the activities of the CDEs either involve or are conducted on behalf of the Company. As a result, the Company is the primary beneficiary of the CDEs and their assets, liabilities, and results of operations are included in the Company’s consolidated financial statements. The primary activities of the CDEs are recognized in commercial loans interest income and other borrowed funds interest expense on the Company’s statements of operations and the federal income tax credit allocations from the investments are recognized in the Company’s statements of operations as a component of income tax expense. Such related cash flows are recognized in loans originated, principal collected on loans and change in other borrowed funds.

The following table summarizes the carrying amounts of the consolidated VIEs’ assets and liabilities included in the Company’s statements of financial condition and are adjusted for intercompany eliminations. All assets presented can be used only to settle obligations of the consolidated VIEs and all liabilities presented consist of liabilities for which creditors and other beneficial interest holders therein have no recourse to the general credit of the Company.

(Dollars in thousands)	March 31, 2017		December 31, 2016
Assets
Loans receivable	$	43,143	36,950
Accrued interest receivable	125		120
Other assets	2,095		1,984
Total assets	$	45,363	39,054
Liabilities
Other borrowed funds	$	8,577	4,105
Accrued interest payable	6		2
Other liabilities	22		27
Total liabilities	$	8,605	4,134

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Unconsolidated Variable Interest Entities

The Company has equity investments in Low-Income Housing Tax Credit (“LIHTC”) partnerships with carrying values of $8,616,000 and $7,282,000 as of March 31, 2017 and December 31, 2016, respectively. The LIHTCs are indirect federal subsidies to finance low-income housing and are used in connection with both newly constructed and renovated residential rental buildings. Once a project is placed in service, it is generally eligible for the tax credit for ten consecutive years. To continue generating the tax credit and to avoid tax credit recapture, a LIHTC building must satisfy specific low-income housing compliance rules for a full fifteen-year period. The maximum exposure to loss in the VIEs is the amount of equity invested and credit extended by the Company. However, the Company has credit protection in the form of indemnification agreements, guarantees, and collateral arrangements. The Company has evaluated the variable interests held by the Company in each LIHTC investment and determined that the Company does not have controlling financial interests in such investments, and is not the primary beneficiary. The Company reports the investments in the unconsolidated LIHTCs as other assets on the Company’s statements of financial condition. Total unfunded contingent commitments related to the Company’s LIHTC investments totaled $18,095,000 at March 31, 2017, and the Company expects to fulfill the majority of these commitments during 2017. There were no impairment losses on the Company’s LIHTC investments during the three months ended March 31, 2017.

The Company has elected to use the proportional amortization method for the amortization of all eligible LIHTC investments and amortization expense is recognized as a component of income tax expense. The following table summarizes the amortization expense and the amount of tax credits and other tax benefits recognized for qualified affordable housing project investments during the periods presented.

	Three Months ended
(Dollars in thousands)	March 31, 2017		March 31, 2016
Amortization expense	$	503	255
Tax credits and other tax benefits recognized	776		392

The Company also owns the following trust subsidiaries, each of which issued trust preferred securities as Tier 1 capital instruments: Glacier Capital Trust II, Glacier Capital Trust III, Glacier Capital Trust IV, Citizens (ID) Statutory Trust I, Bank of the San Juans Bancorporation Trust I, First Company Statutory Trust 2001, and First Company Statutory Trust 2003. The trust subsidiaries have no assets, operations, revenues or cash flows other than those related to the issuance, administration and repayment of the securities held by third parties. The trust subsidiaries are not included in the Company’s consolidated financial statements because the sole asset of each trust subsidiary is a receivable from the Company, even though the Company owns all of the voting equity shares of the trust subsidiaries, has fully guaranteed the obligations of the trust subsidiaries and may have the right to redeem the third party securities under certain circumstances. The Company reports the trust preferred securities issued to the trust subsidiaries as subordinated debentures on the Company’s statements of financial condition.

26

Note 6. Securities Sold Under Agreements to Repurchase

The Company’s securities sold under agreements to repurchase (“repurchase agreements”) totaled $497,187,000 and $473,650,000 at March 31, 2017 and December 31, 2016, respectively, and are secured by investment securities with carrying values of $478,899,000 and $472,239,000, respectively. Securities are pledged to customers at the time of the transaction in an amount at least equal to the outstanding balance and are held in custody accounts by third parties. The fair value of collateral is continually monitored and additional collateral is provided as deemed appropriate.

The following tables summarize the carrying value of the Company’s repurchase agreements by remaining contractual maturity and category of collateral:

	March 31, 2017
	Remaining Contractual Maturity of the Agreements
(Dollars in thousands)	Overnight and Continuous		Up to 30 Days	Total
Residential mortgage-backed securities	$	484,126	—	484,126
Commercial mortgage-backed securities	13,061		—	13,061
Total	$	497,187	—	497,187

	December 31, 2016
	Remaining Contractual Maturity of the Agreements
(Dollars in thousands)	Overnight and Continuous		Up to 30 Days	Total
Residential mortgage-backed securities	$	471,706	643	472,349
Commercial mortgage-backed securities	1,301		—	1,301
Total	$	473,007	643	473,650

Note 7. Derivatives and Hedging Activities

As of March 31, 2017, the Company’s interest rate swap derivative financial instruments were designated as cash flow hedges and are summarized as follows:

(Dollars in thousands)	Forecasted Notional  Amount		Variable Interest Rate 1	Fixed Interest Rate 1		Payment Term
Interest rate swap	$	160,000	3 month LIBOR	3.378	%	Oct. 21, 2014 - Oct. 21, 2021
Interest rate swap	100,000		3 month LIBOR	2.498	%	Nov. 30, 2015 - Nov. 30, 2022

__________

¹The Company pays the fixed interest rate and the counterparty pays the Company the variable interest rate.

The hedging strategy converts the LIBOR-based variable interest rate on borrowings to a fixed interest rate, thereby protecting the Company from interest rate variability.

27

The interest rate swaps with the $160,000,000 and $100,000,000 notional amounts began their payment terms in October 2014 and November 2015, respectively. The Company designated wholesale deposits as the cash flow hedge and these deposits were determined to be fully effective during the current and prior year. As such, no amount of ineffectiveness has been included in the Company’s statements of operations for the three months ended March 31, 2017 and 2016. Therefore, the aggregate fair value of the interest rate swaps was recorded in other liabilities with changes recorded in other comprehensive income (“OCI”). The Company expects the hedges to remain highly effective during the remaining terms of the interest rate swaps. Interest expense recorded on the interest rate swaps totaled $1,976,000 and $1,998,000 for the three months ended March 31, 2017 and 2016, respectively, and is reported as a component of interest expense on deposits. Unless the interest rate swaps are terminated during the next year, the Company expects $5,183,000 of the unrealized loss reported in other comprehensive income at March 31, 2017 to be reclassified to interest expense during the next twelve months.

The following table presents the pre-tax gains or losses recorded in accumulated other comprehensive income and the Company’s statements of operations relating to the interest rate swap derivative financial instruments:

	Three Months ended
(Dollars in thousands)	March 31, 2017			March 31, 2016
Interest rate swaps
Amount of gain (loss) recognized in OCI (effective portion)	$	264		(9,928	)
Amount of loss reclassified from OCI to interest expense	(1,332		)	(1,829	)
Amount of loss recognized in other non-interest expense (ineffective portion)	—			—

The following table discloses the offsetting of financial liabilities and interest rate swap derivative liabilities. There were no interest rate swap derivative assets at the dates presented.

	March 31, 2017				December 31, 2016
(Dollars in thousands)	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Statements of Financial Position	Net Amounts of Liabilities Presented in the Statements of Financial Position	Gross Amounts of Recognized Liabilities	Gross Amounts Offset in the Statements of Financial Position	Net Amounts of Liabilities Presented in the Statements of Financial Position
Interest rate swaps	$	13,129	—	13,129	14,725	—	14,725

Pursuant to the interest rate swap agreements, the Company pledged collateral to the counterparty in the form of investment securities totaling $27,931,000 at March 31, 2017. There was $0 collateral pledged from the counterparty to the Company as of March 31, 2017. There is the possibility that the Company may need to pledge additional collateral in the future if there were declines in the fair value of the interest rate swap derivative financial instruments versus the collateral pledged.

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Note 8. Other Expenses

Other expenses consists of the following:

	Three Months ended
(Dollars in thousands)	March 31, 2017		March 31, 2016
Debit card expenses	$	1,718	1,849
Consulting and outside services	1,420		1,014
Telephone	977		960
Loan expenses	891		783
Employee expenses	789		579
Postage	725		880
Printing and supplies	640		943
Accounting and audit fees	512		391
VIE amortization and other expenses	464		639
Checking and operating expenses	365		694
Business development	340		342
Legal fees	340		237
ATM expenses	312		255
Other	927		980
Total other expenses	$	10,420	10,546

Note 9. Accumulated Other Comprehensive Income (Loss)

The following table illustrates the activity within accumulated other comprehensive income (loss) by component, net of tax:

(Dollars in thousands)	Gains on Available-For-Sale Securities			Losses on Derivatives Used for Cash Flow Hedges		Total
Balance at December 31, 2015	$	13,935		(11,946	)	1,989
Other comprehensive income (loss) before reclassifications	8,331			(6,082	)	2,249
Amounts reclassified from accumulated other comprehensive (loss) income	(38		)	1,121		1,083
Net current period other comprehensive income (loss)	8,293			(4,961	)	3,332
Balance at March 31, 2016	$	22,228		(16,907	)	5,321
Balance at December 31, 2016	$	1,639		(9,021	)	(7,382	)
Other comprehensive income before reclassifications	1,907			162		2,069
Amounts reclassified from accumulated other comprehensive income	85			816		901
Net current period other comprehensive income	1,992			978		2,970
Balance at March 31, 2017	$	3,631		(8,043	)	(4,412	)

29

Note 10. Earnings Per Share

Basic earnings per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding during the period presented. Diluted earnings per share is computed by including the net increase in shares as if dilutive outstanding restricted stock awards were vested, using the treasury stock method.

Basic and diluted earnings per share has been computed based on the following:

	Three Months ended
(Dollars in thousands, except per share data)	March 31, 2017		March 31, 2016
Net income available to common stockholders, basic and diluted	$	31,255	28,682
Average outstanding shares - basic	76,572,116		76,126,251
Add: dilutive restricted stock awards	61,167		47,166
Average outstanding shares - diluted	76,633,283		76,173,417
Basic earnings per share	$	0.41	0.38
Diluted earnings per share	$	0.41	0.38

There were 39,348 and 0 stock awards excluded from the diluted average outstanding share calculation for the three months ended March 31, 2017 and 2016, respectively. Anti-dilution occurs when the unrecognized compensation cost per share of a restricted stock award exceeds the market price of the Company’s stock.

Note 11. Fair Value of Assets and Liabilities

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. There is a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of inputs that may be used to measure fair value are as follows:

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

Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities

Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities

Transfers in and out of Level 1 (quoted prices in active markets), Level 2 (significant other observable inputs) and Level 3 (significant unobservable inputs) are recognized on the actual transfer date. There were no transfers between fair value hierarchy levels during the three month periods ended March 31, 2017 and 2016.

Recurring Measurements

The following is a description of the inputs and valuation methodologies used for assets and liabilities measured at fair value on a recurring basis, as well as the general classification of such assets and liabilities pursuant to the valuation hierarchy. There have been no significant changes in the valuation techniques during the period ended March 31, 2017.

Investment securities, available-for-sale: fair value for available-for-sale securities is estimated by obtaining quoted market prices for identical assets, where available. If such prices are not available, fair value is based on independent asset pricing services and models, the inputs of which are market-based or independently sourced market parameters, including but not limited to, yield curves, interest rates, volatilities, market spreads, prepayments, defaults, recoveries, cumulative loss projections, and cash flows. Such securities are classified in Level 2 of the valuation hierarchy. Where Level 1 or Level 2 inputs are not available, such securities are classified as Level 3 within the hierarchy.

30

Fair value determinations of available-for-sale securities are the responsibility of the Company’s corporate accounting and treasury departments. The Company obtains fair value estimates from independent third party vendors on a monthly basis. The vendors’ pricing system methodologies, procedures and system controls are reviewed to ensure they are appropriately designed and operating effectively. The Company reviews the vendors’ inputs for fair value estimates and the recommended assignments of levels within the fair value hierarchy. The review includes the extent to which markets for investment securities are determined to have limited or no activity, or are judged to be active markets. The Company reviews the extent to which observable and unobservable inputs are used as well as the appropriateness of the underlying assumptions about risk that a market participant would use in active markets, with adjustments for limited or inactive markets. In considering the inputs to the fair value estimates, the Company places less reliance on quotes that are judged to not reflect orderly transactions, or are non-binding indications. In assessing credit risk, the Company reviews payment performance, collateral adequacy, third party research and analyses, credit rating histories and issuers’ financial statements. For those markets determined to be inactive or limited, the valuation techniques used are models for which management has verified that discount rates are appropriately adjusted to reflect illiquidity and credit risk.

Interest rate swap derivative financial instruments: fair values for interest rate swap derivative financial instruments are based upon the estimated amounts to settle the contracts considering current interest rates and are calculated using discounted cash flows that are observable or that can be corroborated by observable market data and, therefore, are classified within Level 2 of the valuation hierarchy. The inputs used to determine fair value include the 3 month LIBOR forward curve to estimate variable rate cash inflows and the Fed Funds Effective Swap Rate to estimate the discount rate. The estimated variable rate cash inflows are compared to the fixed rate outflows and such difference is discounted to a present value to estimate the fair value of the interest rate swaps. The Company also obtains and compares the reasonableness of the pricing from an independent third party.

The following tables disclose the fair value measurement of assets and liabilities measured at fair value on a recurring basis:

			Fair Value Measurements At the End of the Reporting Period Using
(Dollars in thousands)	Fair Value March 31, 2017		Quoted Prices in Active  Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Investment securities, available-for-sale
U.S. government and federal agency	$	37,416	—	37,416	—
U.S. government sponsored enterprises	19,536		—	19,536	—
State and local governments	762,167		—	762,167	—
Corporate bonds	443,701		—	443,701	—
Residential mortgage-backed securities	949,091		—	949,091	—
Commercial mortgage-backed securities	102,610		—	102,610	—
Total assets measured at fair value on a recurring basis	$	2,314,521	—	2,314,521	—
Interest rate swaps	$	13,129	—	13,129	—
Total liabilities measured at fair value on a recurring basis	$	13,129	—	13,129	—

31

			Fair Value Measurements At the End of the Reporting Period Using
(Dollars in thousands)	Fair Value December 31, 2016		Quoted Prices in Active  Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Investment securities, available-for-sale
U.S. government and federal agency	$	39,407	—	39,407	—
U.S. government sponsored enterprises	19,570		—	19,570	—
State and local governments	786,373		—	786,373	—
Corporate bonds	471,951		—	471,951	—
Residential mortgage-backed securities	1,007,515		—	1,007,515	—
Commercial mortgage-backed securities	100,661		—	100,661	—
Total assets measured at fair value on a recurring basis	$	2,425,477	—	2,425,477	—
Interest rate swaps	$	14,725	—	14,725	—
Total liabilities measured at fair value on a recurring basis	$	14,725	—	14,725	—

Non-recurring Measurements

The following is a description of the inputs and valuation methodologies used for assets recorded at fair value on a non-recurring basis, as well as the general classification of such assets pursuant to the valuation hierarchy. There have been no significant changes in the valuation techniques during the period ended March 31, 2017.

Other real estate owned: OREO is carried at the lower of fair value at acquisition date or current estimated fair value, less estimated cost to sell. Estimated fair value of OREO is based on appraisals or evaluations (new or updated). OREO is classified within Level 3 of the fair value hierarchy.

Collateral-dependent impaired loans, net of ALLL: loans included in the Company’s loan portfolio for which it is probable that the Company will not collect all principal and interest due according to contractual terms are considered impaired. Estimated fair value of collateral-dependent impaired loans is based on the fair value of the collateral, less estimated cost to sell. Collateral-dependent impaired loans are classified within Level 3 of the fair value hierarchy.

The Company’s credit departments review appraisals for OREO and collateral-dependent loans, giving consideration to the highest and best use of the collateral. The appraisal or evaluation (new or updated) is considered the starting point for determining fair value. The valuation techniques used in preparing appraisals or evaluations (new or updated) include the cost approach, income approach, sales comparison approach, or a combination of the preceding valuation techniques. The key inputs used to determine the fair value of the collateral-dependent loans and OREO include selling costs, discounted cash flow rate or capitalization rate, and adjustment to comparables. Valuations and significant inputs obtained by independent sources are reviewed by the Company for accuracy and reasonableness. The Company also considers other factors and events in the environment that may affect the fair value. The appraisals or evaluations (new or updated) are reviewed at least quarterly and more frequently based on current market conditions, including deterioration in a borrower’s financial condition and when property values may be subject to significant volatility. After review and acceptance of the collateral appraisal or evaluation (new or updated), adjustments to the impaired loan or OREO may occur. The Company generally obtains appraisals or evaluations (new or updated) annually.

32

The following tables disclose the fair value measurement of assets with a recorded change during the period resulting from re-measuring the assets at fair value on a non-recurring basis:

			Fair Value Measurements At the End of the Reporting Period Using
(Dollars in thousands)	Fair Value March 31, 2017		Quoted Prices in Active  Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Other real estate owned	$	147	—	—	147
Collateral-dependent impaired loans, net of ALLL	7,601		—	—	7,601
Total assets measured at fair value on a non-recurring basis	$	7,748	—	—	7,748

			Fair Value Measurements At the End of the Reporting Period Using
(Dollars in thousands)	Fair Value December 31, 2016		Quoted Prices in Active  Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Other real estate owned	$	7,839	—	—	7,839
Collateral-dependent impaired loans, net of ALLL	5,664		—	—	5,664
Total assets measured at fair value on a non-recurring basis	$	13,503	—	—	13,503

Non-recurring Measurements Using Significant Unobservable Inputs (Level 3)

The following tables present additional quantitative information about assets measured at fair value on a non-recurring basis and for which the Company has utilized Level 3 inputs to determine fair value:

	Fair Value March 31, 2017		Quantitative Information about Level 3 Fair Value Measurements
(Dollars in thousands)			Valuation Technique	Unobservable Input	Range (Weighted-Average) 1
Other real estate owned	$	147	Sales comparison approach	Selling costs	8.0% - 8.0% (8.0%)
Collateral-dependent impaired loans, net of ALLL	$	5	Cost approach	Selling costs	20.0% - 20.0% (20.0%)
	2,994		Sales comparison approach	Selling costs	8.0% - 10.0% (9.7%)
	4,602		Combined approach	Selling costs	10.0% - 10.0% (10.0%)
				Adjustment to comparables	20.0% - 20.0% (20.0%)
	$	7,601

33

	Fair Value December 31, 2016		Quantitative Information about Level 3 Fair Value Measurements
(Dollars in thousands)			Valuation Technique	Unobservable Input	Range (Weighted-Average) 1
Other real estate owned	$	7,767	Sales comparison approach	Selling costs	6.0% - 10.0% (6.9%)
				Adjustment to comparables	0.0% - 10.0% (0.1%)
	72		Combined approach	Selling costs	10.0% - 10.0% (10.0%)
				Adjustment to comparables	10.0% - 10.0% (10.0%)
	$	7,839
Collateral-dependent impaired loans, net of ALLL	$	110	Cost approach	Selling costs	6.0% - 20.0% (6.6%)
	1,982		Sales comparison approach	Selling costs	8.0% - 10.0% (9.6%)
	3,572		Combined approach	Selling costs	10.0% - 10.0% (10.0%)
				Adjustment to comparables	20.0% - 20.0% (20.0%)
	$	5,664

__________

¹ The range for selling costs and adjustments to comparables indicate reductions to the fair value.

Fair Value of Financial Instruments

The following is a description of the methods used to estimate the fair value of all other assets and liabilities recognized at amounts other than fair value.

Cash and cash equivalents: fair value is estimated at book value.

Investment securities, held-to-maturity: fair value for held-to-maturity securities is estimated in the same manner as available-for-sale securities, which is described above.

Loans held for sale: fair value is estimated at book value.

Loans receivable, net of ALLL: fair value is estimated by discounting the future cash flows using the rates at which similar notes would be written for the same remaining maturities. The market rates used are based on current rates the Company would impose for similar loans and reflect a market participant assumption about risks associated with non-performance, illiquidity, and the structure and term of the loans along with local economic and market conditions. Estimated fair value of impaired loans is based on the fair value of the collateral, less estimated cost to sell, or the present value of the loan’s expected future cash flows (discounted at the loan’s effective interest rate). All impaired loans are classified as Level 3 and all other loans are classified as Level 2 within the valuation hierarchy.

Accrued interest receivable: fair value is estimated at book value.

Non-marketable equity securities: fair value is estimated at book value due to restrictions that limit the sale or transfer of such securities.

Deposits: fair value of term deposits is estimated by discounting the future cash flows using rates of similar deposits with similar maturities. The market rates used were obtained from an independent third party and reviewed by the Company. The rates were the average of current rates offered by the Company’s local competitors. The estimated fair value of demand, NOW, savings, and money market deposits is the book value since rates are regularly adjusted to market rates and transactions are executed at book value daily. Therefore, such deposits are classified in Level 1 of the valuation hierarchy. Certificate accounts and wholesale deposits are classified as Level 2 within the hierarchy.

Federal Home Loan Bank advances: fair value of non-callable Federal Home Loan Bank (“FHLB”) advances is estimated by discounting the future cash flows using rates of similar advances with similar maturities. Such rates were obtained from current rates offered by FHLB. The estimated fair value of callable FHLB advances was obtained from FHLB and the model was reviewed by the Company.

34

Securities sold under agreements to repurchase and other borrowed funds: fair value of term repurchase agreements and other term borrowings is estimated based on current repurchase rates and borrowing rates currently available to the Company for repurchases and borrowings with similar terms and maturities. The estimated fair value for overnight repurchase agreements and other borrowings is book value.

Subordinated debentures: fair value of the subordinated debt is estimated by discounting the estimated future cash flows using current estimated market rates. The market rates used were averages of currently traded trust preferred securities with similar characteristics to the Company’s issuances and obtained from an independent third party.

Accrued interest payable: fair value is estimated at book value.

Off-balance sheet financial instruments: commitments to extend credit and letters of credit represent the principal categories of off-balance sheet financial instruments. Rates for these commitments are set at time of loan closing, such that no adjustment is necessary to reflect these commitments at market value. The Company has an insignificant amount of off-balance sheet financial instruments.

The following tables present the carrying amounts, estimated fair values and the level within the fair value hierarchy of the Company’s financial instruments:

			Fair Value Measurements At the End of the Reporting Period Using
(Dollars in thousands)	Carrying Amount March 31, 2017		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Financial assets
Cash and cash equivalents	$	234,004	234,004	—	—
Investment securities, available-for-sale	2,314,521		—	2,314,521	—
Investment securities, held-to-maturity	667,388		—	680,395	—
Loans held for sale	25,649		25,649	—	—
Loans receivable, net of ALLL	5,747,748		—	5,558,406	128,299
Accrued interest receivable	48,043		48,043	—	—
Non-marketable equity securities	23,944		—	23,944	—
Total financial assets	$	9,061,297	307,696	8,577,266	128,299
Financial liabilities
Deposits	$	7,480,157	6,197,583	1,284,399	—
FHLB advances	211,627		—	217,435	—
Repurchase agreements and other borrowed funds	506,081		—	506,081	—
Subordinated debentures	126,027		—	89,136	—
Accrued interest payable	3,467		3,467	—	—
Interest rate swaps	13,129		—	13,129	—
Total financial liabilities	$	8,340,488	6,201,050	2,110,180	—

35

			Fair Value Measurements At the End of the Reporting Period Using
(Dollars in thousands)	Carrying Amount December 31, 2016		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Financial assets
Cash and cash equivalents	$	152,541	152,541	—	—
Investment securities, available-for-sale	2,425,477		—	2,425,477	—
Investment securities, held-to-maturity	675,674		—	689,089	—
Loans held for sale	72,927		72,927	—	—
Loans receivable, net of ALLL	5,554,891		—	5,380,286	123,382
Accrued interest receivable	45,832		45,832	—	—
Non-marketable equity securities	25,550		—	25,550	—
Total financial assets	$	8,952,892	271,300	8,520,402	123,382
Financial liabilities
Deposits	$	7,372,279	6,090,879	1,283,532	—
FHLB advances	251,749		—	257,643	—
Repurchase agreements and other borrowed funds	478,090		—	478,090	—
Subordinated debentures	125,991		—	85,557	—
Accrued interest payable	3,584		3,584	—	—
Interest rate swaps	14,725		—	14,725	—
Total financial liabilities	$	8,246,418	6,094,463	2,119,547	—

Note 12. Subsequent Event

On April 30, 2017, the Company acquired 100 percent of the outstanding common stock of TFB Bancorp, Inc. and its wholly-owned subsidiary, The Foothills Bank, a community bank based in Yuma, Arizona (collectively, “Foothills”). Foothills provides banking services to individuals and businesses in Arizona, with banking offices located in Yuma, Prescott and Casa Grande, Arizona. The acquisition expands the Company’s market into the state of Arizona and further diversifies the Company’s loan, customer and deposit base. Foothills merged into Glacier Bank and will operate as a separate Bank division under its existing name and management team.

As of March 31, 2017, Foothills had total assets of $359,941,000, gross loans of $305,239,000 and total deposits of $292,320,000. The calculation of fair value of the consideration transferred, the total identifiable net assets acquired and resulting goodwill has not yet been determined.

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

The following discussion is intended to provide a more comprehensive review of the Glacier Bancorp, Inc.’s (“Company”) operating results and financial condition than can be obtained from reading the Consolidated Financial Statements alone. The discussion should be read in conjunction with the Consolidated Financial Statements and the notes thereto included in “Part I. Item 1. Financial Statements.”

FORWARD-LOOKING STATEMENTS

This Form 10-Q may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about management’s plans, objectives, expectations and intentions that are not historical facts, and other statements identified by words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “should,” “projects,” “seeks,” “estimates” or words of similar meaning. These forward-looking statements are based on current beliefs and expectations of management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the Company’s control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. In addition to the factors set forth in the sections titled “Risk Factors,” “Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, as applicable, in this report and the Annual Report on Form 10-K for the year ended December 31, 2016 (the “2016 Annual Report”), the following factors, among others, could cause actual results to differ materially from the anticipated results:

• the risks associated with lending and potential adverse changes of the credit quality of loans in the Company’s portfolio;

• changes in trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System or the Federal Reserve Board, which could adversely affect the Company’s net interest income and profitability;

• changes in the cost and scope of insurance from the FDIC and other third parties;

• legislative or regulatory changes, including increased banking and consumer protection regulation that adversely affect the Company’s business;

• ability to complete pending or prospective future acquisitions, limit certain sources of revenue, or increase cost of operations;

• costs or difficulties related to the completion and integration of acquisitions;

• the goodwill the Company has recorded in connection with acquisitions could become impaired, which may have an adverse impact on earnings and capital;

• reduced demand for banking products and services;

• the reputation of banks and the financial services industry could deteriorate, which could adversely affect the Company's ability to obtain (and maintain) customers;

• competition among financial institutions in the Company's markets may increase significantly;

• the risks presented by continued public stock market volatility, which could adversely affect the market price of the Company’s common stock and the ability to raise additional capital or grow the Company through acquisitions;

• the projected business and profitability of an expansion or the opening of a new branch could be lower than expected;

• consolidation in the financial services industry in the Company’s markets resulting in the creation of larger financial institutions who may have greater resources could change the competitive landscape;

• dependence on the Chief Executive Officer (“CEO”), the senior management team and the Presidents of Glacier Bank (“Bank”) divisions;

• material failure, potential interruption or breach in security of the Company’s systems and technological changes which could expose us to new risks (e.g., cybersecurity), fraud or system failures;

• natural disasters, including fires, floods, earthquakes, and other unexpected events;

• the Company’s success in managing risks involved in the foregoing; and

• the effects of any reputational damage to the Company resulting from any of the foregoing.

Please take into account that forward-looking statements speak only as of the date of this Form 10-Q. The Company does not undertake any obligation to publicly correct or update any forward-looking statement if it later becomes aware that actual results are likely to differ materially from those expressed in such forward-looking statement.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Financial Highlights

	At or for the Three Months ended
(Dollars in thousands, except per share and market data)	Mar 31, 2017			Dec 31, 2016		Mar 31, 2016
Operating results
Net income	$	31,255		31,041		28,682
Basic earnings per share	$	0.41		0.41		0.38
Diluted earnings per share	$	0.41		0.41		0.38
Dividends declared per share 1	$	0.21		0.50		0.20
Market value per share
Closing	$	33.93		36.23		25.42
High	$	38.03		37.66		26.34
Low	$	32.47		27.50		22.19
Selected ratios and other data
Number of common stock shares outstanding	76,619,952			76,525,402		76,168,388
Average outstanding shares - basic	76,572,116			76,525,402		76,126,251
Average outstanding shares - diluted	76,633,283			76,615,272		76,173,417
Return on average assets (annualized)	1.35		%	1.33	%	1.28	%
Return on average equity (annualized)	11.19		%	10.82	%	10.53	%
Efficiency ratio	55.57		%	55.08	%	56.53	%
Dividend payout ratio 1	51.22		%	121.95	%	52.63	%
Loan to deposit ratio	78.91		%	78.10	%	74.65	%
Number of full time equivalent employees	2,224			2,222		2,184
Number of locations	142			142		144
Number of ATMs	161			166		167

__________

¹ Includes a special dividend declared of $0.30 per share for the three months ended December 31, 2016.

The Company reported net income of $31.3 million for the current quarter, an increase of $2.6 million, or 9 percent, from the $28.7 million of net income for the prior year first quarter. Diluted earnings per share for the current quarter was $0.41 per share, an increase of $0.03, or 8 percent, from the prior year first quarter diluted earnings per share of $0.38.

Recent Acquisition

On April 30, 2017, the Company completed the acquisition of TFB Bancorp, Inc. and its wholly-owned subsidiary, The Foothills Bank (collectively, “Foothills”), which has community banking offices in Yuma, Prescott and Casa Grande, Arizona. The Foothills Bank merged into Glacier Bank and will operate as a separate Bank division under its existing name and management team. As of March 31, 2017, Foothills had total assets of $360 million, gross loans of $305 million and total deposits of $292 million. The calculation of fair value of the consideration transferred, the total identifiable net assets acquired and resulting goodwill has not yet been determined.

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Financial Condition Analysis

Assets

The following table summarizes the Company’s assets as of the dates indicated: 

								$ Change from
(Dollars in thousands)	Mar 31, 2017			Dec 31, 2016		Mar 31, 2016		Dec 31, 2016		Mar 31, 2016
Cash and cash equivalents	$	234,004		152,541		150,861		81,463		83,143
Investment securities, available-for-sale	2,314,521			2,425,477		2,604,625		(110,956	)	(290,104	)
Investment securities, held-to-maturity	667,388			675,674		691,663		(8,286	)	(24,275	)
Total investment securities	2,981,909			3,101,151		3,296,288		(119,242	)	(314,379	)
Loans receivable
Residential real estate	685,458			674,347		685,026		11,111		432
Commercial real estate	3,056,372			2,990,141		2,680,691		66,231		375,681
Other commercial	1,462,110			1,342,250		1,172,956		119,860		289,154
Home equity	433,554			434,774		423,895		(1,220	)	9,659
Other consumer	239,480			242,951		234,625		(3,471	)	4,855
Loans receivable	5,876,974			5,684,463		5,197,193		192,511		679,781
Allowance for loan and lease losses	(129,226		)	(129,572	)	(130,071	)	346		845
Loans receivable, net	5,747,748			5,554,891		5,067,122		192,857		680,626
Other assets	590,247			642,017		606,471		(51,770	)	(16,224	)
Total assets	$	9,553,908		9,450,600		9,120,742		103,308		433,166

Total investment securities of $2.982 billion at March 31, 2017 decreased $119 million, or 4 percent, during the current quarter and decreased $314 million, or 10 percent, from the prior year first quarter. The decrease in the investment portfolio resulted from the Company redeploying the investment securities portfolio cash flow into the Company’s higher yielding loan portfolio. Investment securities represented 31 percent of total assets at March 31, 2017 compared to 33 percent of total assets at December 31, 2016 and 36 percent of total assets at March 31, 2016.

The Company experienced another solid quarter for loan growth with an increase of $193 million, or 14 percent annualized, during the current quarter. The loan category with the largest increase was other commercial loans which increased $120 million, or 9 percent, and included an increase of $42 million from municipal loans. Excluding the acquisition of Treasure State Bank (“TSB”), the loan portfolio increased $628 million, or 12 percent, since March 31, 2016 with the primary increase coming from growth in commercial real estate and other commercial loans of $351 million and $281 million, respectively.

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Liabilities

The following table summarizes the Company’s liabilities as of the dates indicated:

					$ Change from
(Dollars in thousands)	Mar 31, 2017		Dec 31, 2016	Mar 31, 2016	Dec 31, 2016		Mar 31, 2016
Deposits
Non-interest bearing deposits	$	2,049,476	2,041,852	1,887,004	7,624		162,472
NOW and DDA accounts	1,596,353		1,588,550	1,448,454	7,803		147,899
Savings accounts	1,035,023		996,061	879,541	38,962		155,482
Money market deposit accounts	1,516,731		1,464,415	1,411,970	52,316		104,761
Certificate accounts	941,628		948,714	1,063,735	(7,086	)	(122,107	)
Core deposits, total	7,139,211		7,039,592	6,690,704	99,619		448,507
Wholesale deposits	340,946		332,687	325,490	8,259		15,456
Deposits, total	7,480,157		7,372,279	7,016,194	107,878		463,963
Securities sold under agreements to repurchase	497,187		473,650	445,960	23,537		51,227
Federal Home Loan Bank advances	211,627		251,749	313,969	(40,122	)	(102,342	)
Other borrowed funds	8,894		4,440	6,633	4,454		2,261
Subordinated debentures	126,027		125,991	125,884	36		143
Other liabilities	94,776		105,622	118,422	(10,846	)	(23,646	)
Total liabilities	$	8,418,668	8,333,731	8,027,062	84,937		391,606

The Company benefited from the current quarter growth in core deposits which increased $99.6 million, or 6 percent annualized, from the prior quarter. Excluding the TSB acquisition, core deposits increased $390 million, or 6 percent, from March 31, 2016. Non-interest bearing deposits of $2.049 billion at March 31, 2017 increased $7.6 million, or 37 basis points, from the prior quarter. Excluding the TSB acquisition, non-interest bearing deposits increased $149 million, or 8 percent, from March 31, 2016.

Securities sold under agreements to repurchase (“repurchase agreements”) of $497 million at March 31, 2017 increased $23.5 million, or 5 percent, from the prior quarter and increased $51.2 million, or 11 percent, from the prior year first quarter. Federal Home Loan Bank (“FHLB”) advances of $212 million at March 31, 2017 decreased $40.1 million, or 16 percent, from the prior quarter and decreased $102 million, or 33 percent, from the prior year first quarter due to the increase in deposits.

Stockholders’ Equity

The following table summarizes the stockholders’ equity balances as of the dates indicated: 

								$ Change from
(Dollars in thousands, except per share data)	Mar 31, 2017			Dec 31, 2016		Mar 31, 2016		Dec 31, 2016	Mar 31, 2016
Common equity	$	1,139,652		1,124,251		1,088,359		15,401	51,293
Accumulated other comprehensive (loss) income	(4,412		)	(7,382	)	5,321		2,970	(9,733	)
Total stockholders’ equity	1,135,240			1,116,869		1,093,680		18,371	41,560
Goodwill and core deposit intangible, net	(158,799		)	(159,400	)	(154,396	)	601	(4,403	)
Tangible stockholders’ equity	$	976,441		957,469		939,284		18,972	37,157

Stockholders’ equity to total assets	11.88		%	11.82	%	11.99	%
Tangible stockholders’ equity to total tangible assets	10.39		%	10.31	%	10.48	%
Book value per common share	$	14.82		14.59		14.36		0.23	0.46
Tangible book value per common share	$	12.74		12.51		12.33		0.23	0.41

40

Tangible stockholders’ equity of $976 million at March 31, 2017 increased $19.0 million, or 2 percent, from the prior quarter primarily as a result of earnings retention and an increase in accumulated other comprehensive income. Tangible stockholders’ equity increased $37.2 million, or 4 percent, from a year ago, the result of earnings retention and $10.5 million of Company stock issued in connection with the TSB acquisition; such increases more than offset the increase in goodwill and other intangibles from the acquisition and the decrease in accumulated other comprehensive income. Tangible book value per common share at quarter end increased $0.23 per share from the prior quarter and increased $0.41 per share from a year ago.

Cash Dividend

On March 29, 2017, the Company’s Board of Directors declared a quarterly cash dividend of $0.21 per share, an increase of $0.01 per share, or 5 percent. The dividend was payable April 20, 2017 to shareholders of record April 11, 2017. Future cash dividends will depend on a variety of factors, including net income, capital, asset quality, general economic conditions and regulatory considerations.

Operating Results for Three Months Ended March 31, 2017

Compared to December 31, 2016 and March 31, 2016

Income Summary

The following table summarizes revenue for the periods indicated: 

	Three Months ended							$ Change from
(Dollars in thousands)	Mar 31, 2017			Dec 31, 2016		Mar 31, 2016		Dec 31, 2016		Mar 31, 2016
Net interest income
Interest income	$	87,628		87,759		84,381		(131	)	3,247
Interest expense	7,366			7,214		7,675		152		(309	)
Total net interest income	80,262			80,545		76,706		(283	)	3,556
Non-interest income
Service charges and other fees	15,633			15,645		14,681		(12	)	952
Miscellaneous loan fees and charges	980			1,234		1,021		(254	)	(41	)
Gain on sale of loans	6,358			9,765		5,992		(3,407	)	366
(Loss) gain on sale of investments	(100		)	(757	)	108		657		(208	)
Other income	2,818			2,127		2,450		691		368
Total non-interest income	25,689			28,014		24,252		(2,325	)	1,437
	$	105,951		108,559		100,958		(2,608	)	4,993
Net interest margin (tax-equivalent)	4.03		%	4.02	%	4.01	%

Net Interest Income

In the current quarter, interest income of $87.6 million decreased $131 thousand, or 15 basis points, from the prior quarter which was primarily attributable to two less days during the current quarter. Current quarter interest income increased $3.2 million, or 4 percent, over the prior year first quarter. Current quarter interest income on commercial loans increased $5.5 million, or 12 percent, from the prior year first quarter which more than offset the $1.9 million decrease in investment interest income.

The current quarter interest expense of $7.4 million increased $152 thousand, or 2 percent, from the prior quarter and decreased $309 thousand, or 4 percent, from the prior year first quarter. The total cost of funding (including non-interest bearing deposits) for the current quarter was 37 basis points compared to 36 basis points for the prior quarter and 39 basis points for the prior year first quarter.

41

The Company’s net interest margin as a percentage of earning assets, on a tax-equivalent basis, for the current quarter was 4.03 percent compared to 4.02 percent in the prior quarter which was attributable to an increase in the earning asset yields from the continuing shift of lower yielding investments to higher yielding loans. The current quarter net interest margin increased 2 basis points over the prior year first quarter net interest margin of 4.01 percent, due to a 2 basis points decrease in cost of funds and the remix of earning assets to higher yielding loans.

Non-interest Income

Non-interest income for the current quarter totaled $25.7 million, a decrease of $2.3 million, or 8 percent, from the prior quarter and an increase of $1.4 million, or 6 percent, over the same quarter last year. Service fee income of $15.6 million, increased by $952 thousand, or 6 percent, from the prior year first quarter as a result of the increased number of accounts. Gain on sale of loans for the current quarter decreased $3.4 million, or 35 percent, from the prior quarter and was driven by the seasonal activity. Gain on sale of loans for the current quarter increased $366 thousand, or 6 percent, from the prior year first quarter. Other income of $2.8 million, increased $691 thousand, or 32 percent, over the prior quarter and increased $368 thousand, or 15 percent, over the prior year first quarter principally due to the current quarter gain on sale of other real estate owned (“OREO”). Other income included a gain of $967 thousand from the sale of OREO and operating revenue of $15 thousand from OREO, a combined total of $982 thousand for the current quarter compared to $481 thousand for the prior quarter and $214 thousand for the prior year first quarter.

Non-interest Expense

The following table summarizes non-interest expense for the periods indicated:

	Three Months ended				$ Change from
(Dollars in thousands)	Mar 31, 2017		Dec 31, 2016	Mar 31, 2016	Dec 31, 2016		Mar 31, 2016
Compensation and employee benefits	$	39,246	38,826	36,941	420		2,305
Occupancy and equipment	6,646		6,692	6,676	(46	)	(30	)
Advertising and promotions	1,973		2,125	2,125	(152	)	(152	)
Data processing	3,124		3,409	3,373	(285	)	(249	)
Other real estate owned	273		2,076	390	(1,803	)	(117	)
Regulatory assessments and insurance	1,061		1,048	1,508	13		(447	)
Core deposit intangibles amortization	601		608	797	(7	)	(196	)
Other expenses	10,420		11,933	10,546	(1,513	)	(126	)
Total non-interest expense	$	63,344	66,717	62,356	(3,373	)	988

The Company consolidated its Bank divisions’ individual core database systems into a single core database and re-issued debit cards with chip technology during 2016 (the Core Consolidation Project or “CCP”). Expenses related to the CCP were $741 thousand in the fourth quarter of 2016 and $834 thousand during the first quarter of 2016. Excluding CCP expenses, non-interest expense for the current quarter decreased $2.6 million, or 4 percent, over the prior quarter and increased $1.8 million, or 4 percent, over the prior year first quarter.

Compensation and employee benefits for the current quarter increased by $2.3 million, or 6 percent, from the prior year first quarter due to salary increases, vesting of restricted stock awards and the increased number of employees, including increases from the TSB acquisition. The current quarter OREO expense of $273 thousand included $234 thousand of operating expense, $21 thousand of fair value write-downs, and $18 thousand of loss from the sales of OREO. The current quarter other expenses decreased $1.5 million over the prior quarter primarily from decreases related to CCP, acquisition related expenses, and expenses connected with equity investments in New Markets Tax Credit (“NMTC”) projects. Current quarter other expenses decreased $126 thousand, or 1 percent, from the prior year first quarter which was driven by decreased costs from CCP.

42

Efficiency Ratio

The current quarter efficiency ratio was 55.57 percent, a 49 basis points increase from the prior quarter efficiency ratio of 55.08 percent. Although there was a reduction in expenses, the decrease in gain on sale of loans during the current quarter drove the increase in the efficiency ratio from the prior quarter. The current quarter efficiency ratio decreased 96 basis points from the prior year first quarter ratio of 56.53 percent resulting from the increase in income on commercial loans, which was greater than the increase in non-interest expense.

Provision for Loan Losses

The following table summarizes the provision for loan losses, net charge-offs and select ratios relating to the provision for loan losses for the previous eight quarters:

(Dollars in thousands)	Provision for Loan Losses		Net Charge-Offs (Recoveries)			Allowance for Loan and Lease Losses as a Percent of Loans		Accruing Loans 30-89 Days Past Due as a Percent of Loans		Non-Performing Assets to Total Sub-sidiary Assets
First quarter 2017	$	1,598	$	1,944		2.20	%	0.67	%	0.75	%
Fourth quarter 2016	1,139		4,101			2.28	%	0.45	%	0.76	%
Third quarter 2016	626		478			2.37	%	0.49	%	0.84	%
Second quarter 2016	—		(2,315		)	2.46	%	0.44	%	0.82	%
First quarter 2016	568		194			2.50	%	0.46	%	0.88	%
Fourth quarter 2015	411		1,482			2.55	%	0.38	%	0.88	%
Third quarter 2015	826		577			2.68	%	0.37	%	0.97	%
Second quarter 2015	282		(381		)	2.71	%	0.59	%	0.98	%

Net charge-offs for the current quarter were $1.9 million compared to $4.1 million for the prior quarter and $194 thousand from the same quarter last year. The quarterly net charge-offs continue to experience a fair amount of volatility on a quarterly basis. There was $1.6 million of current quarter provision for loan losses, compared to $1.1 million in the prior quarter and $568 thousand in the prior year first quarter. Loan portfolio growth, composition, average loan size, credit quality considerations, and other environmental factors will continue to determine the level of the loan loss provision.

The determination of the allowance for loan and lease losses (“ALLL” or “allowance”) and the related provision for loan losses is a critical accounting estimate that involves management’s judgments about current environmental factors which affect loan losses, such factors including economic conditions, changes in collateral values, net charge-offs, and other factors discussed below in “Additional Management’s Discussion and Analysis.”

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ADDITIONAL MANAGEMENT’S DISCUSSION AND ANALYSIS

Investment Activity

Investment securities classified as available-for-sale are carried at estimated fair value and investment securities classified as held-to-maturity are carried at amortized cost. Unrealized gains or losses, net of tax, on available-for-sale securities are reflected as an adjustment to other comprehensive income. The Company’s investment securities are summarized below:

	March 31, 2017				December 31, 2016				March 31, 2016
(Dollars in thousands)	Carrying Amount		Percent		Carrying Amount		Percent		Carrying Amount		Percent
Available-for-sale
U.S. government and federal agency	$	37,416	1	%	$	39,407	1	%	$	45,687	1	%
U.S. government sponsored enterprises	19,536		1	%	19,570		1	%	68,773		2	%
State and local governments	762,167		26	%	786,373		25	%	901,133		27	%
Corporate bonds	443,701		15	%	471,951		15	%	442,875		14	%
Residential mortgage-backed securities	949,091		32	%	1,007,515		33	%	1,131,641		35	%
Commercial mortgage-backed securities	102,610		3	%	100,661		3	%	14,516		—	%
Total available-for-sale	2,314,521		78	%	2,425,477		78	%	2,604,625		79	%
Held-to-maturity
State and local governments	667,388		22	%	675,674		22	%	691,663		21	%
Total held-to-maturity	667,388		22	%	675,674		22	%	691,663		21	%
Total investment securities	$	2,981,909	100	%	$	3,101,151	100	%	$	3,296,288	100	%

The Company’s investment portfolio is primarily comprised of state and local government securities and mortgage-backed securities. State and local government securities are largely exempt from federal income tax and the Company’s maximum federal statutory rate of 35 percent is used in calculating the tax-equivalent yields on the tax-exempt securities. Mortgage-backed securities are primarily short, weighted-average life U.S. agency guaranteed residential mortgage pass-through securities.  To a lesser extent, mortgage-backed securities also consist of short, weighted-average life U.S. agency guaranteed residential collateralized mortgage obligations and U.S. agency guaranteed commercial mortgage-backed securities. Combined, the mortgage-backed securities provide the Company with ongoing liquidity as scheduled and pre-paid principal is received on the securities.

State and local government securities carry different risks that are not as prevalent in other security types. The Company evaluates the investment grade quality of its securities in accordance with regulatory guidance. Investment grade securities are those where the issuer has an adequate capacity to meet the financial commitments under the security for the projected life of the investment. An issuer has an adequate capacity to meet financial commitments if the risk of default by the obligor is low and the full and timely payment of principal and interest are expected. In assessing credit risk, the Company may use credit ratings from Nationally Recognized Statistical Rating Organizations (“NRSRO” entities such as Standard and Poor’s [“S&P”] and Moody’s) as support for the evaluation; however, they are not solely relied upon. There have been no significant differences in the Company’s internal evaluation of the creditworthiness of any issuer when compared with the ratings assigned by the NRSROs.

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The following table stratifies the state and local government securities by the associated NRSRO ratings. The highest issued rating was used to categorize the securities in the table for those securities where the NRSRO ratings were not at the same level.

	March 31, 2017			December 31, 2016
(Dollars in thousands)	Amortized Cost		Fair Value	Amortized Cost	Fair Value
S&P: AAA / Moody’s: Aaa	$	344,903	345,267	345,527	346,301
S&P: AA+, AA, AA- / Moody’s: Aa1, Aa2, Aa3	873,023		889,476	879,271	894,652
S&P: A+, A, A- / Moody’s: A1, A2, A3	182,733		189,884	209,217	216,589
S&P: BBB+, BBB, BBB- / Moody’s: Baa1, Baa2, Baa3	2,270		2,348	2,270	2,352
Not rated by either entity	14,052		14,715	13,934	14,694
Below investment grade	850		872	850	874
Total	$	1,417,831	1,442,562	1,451,069	1,475,462

State and local government securities largely consist of both taxable and tax-exempt general obligation and revenue bonds. The following table stratifies the state and local government securities by the associated security type.

	March 31, 2017			December 31, 2016
(Dollars in thousands)	Amortized Cost		Fair Value	Amortized Cost	Fair Value
General obligation - unlimited	$	790,524	804,975	805,779	819,990
General obligation - limited	215,617		222,978	221,099	228,218
Revenue	377,401		379,332	389,506	391,615
Certificate of participation	23,214		24,276	23,590	24,603
Other	11,075		11,001	11,095	11,036
Total	$	1,417,831	1,442,562	1,451,069	1,475,462

The following table outlines the five states in which the Company owns the highest concentrations of state and local government securities.

	March 31, 2017			December 31, 2016
(Dollars in thousands)	Amortized Cost		Fair Value	Amortized Cost	Fair Value
Washington	$	192,540	197,404	188,778	193,035
Texas	191,383		194,157	193,652	196,641
Michigan	173,214		177,815	173,400	177,305
Montana	93,602		96,946	94,168	97,259
California	92,994		93,793	93,441	94,275
All other states	674,098		682,447	707,630	716,947
Total	$	1,417,831	1,442,562	1,451,069	1,475,462

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The following table presents the carrying amount and weighted-average yield of available-for-sale and held-to-maturity investment securities by contractual maturity at March 31, 2017. Weighted-average yields are based upon the amortized cost of securities and are calculated using the interest method which takes into consideration premium amortization, discount accretion and mortgage-backed securities’ prepayment provisions. Weighted-average yields on tax-exempt investment securities exclude the federal income tax benefit.

	One Year or Less				After One through Five Years				After Five through Ten Years				After Ten Years				Mortgage-Backed Securities				Total
(Dollars in thousands)	Amount		Yield		Amount		Yield		Amount		Yield		Amount		Yield		Amount		Yield		Amount		Yield
Available-for-sale
U.S. government and federal agency	$	—	—	%	$	1,848	1.53	%	$	14,057	1.52	%	$	21,511	1.48	%	$	—	—	%	$	37,416	1.49	%
U.S. government sponsored enterprises	407		2.24	%	19,129		1.96	%	—		—	%	—		—	%	—		—	%	19,536		1.97	%
State and local governments	23,010		1.95	%	53,260		2.16	%	193,904		3.43	%	491,993		4.23	%	—		—	%	762,167		3.78	%
Corporate bonds	123,719		1.94	%	319,982		2.10	%	—		—	%	—		—	%	—		—	%	443,701		2.06	%
Residential mortgage-backed securities	—		—	%	—		—	%	—		—	%	—		—	%	949,091		2.00	%	949,091		2.00	%
Commercial mortgage-backed securities	—		—	%	—		—	%	—		—	%	—		—	%	102,610		2.03	%	102,610		2.03	%
Total available- for-sale	147,136		1.94	%	394,219		2.10	%	207,961		3.30	%	513,504		4.11	%	1,051,701		2.01	%	2,314,521		2.59	%
Held-to-maturity
State and local governments	—		—	%	593		1.84	%	57,405		2.97	%	609,390		4.08	%	—		—	%	667,388		3.98	%
Total held-to-maturity	—		—	%	593		1.84	%	57,405		2.97	%	609,390		4.08	%	—		—	%	667,388		3.98	%
Total investment securities	$	147,136	1.94	%	$	394,812	2.10	%	$	265,366	3.23	%	$	1,122,894	4.09	%	$	1,051,701	2.01	%	$	2,981,909	2.90	%

For additional information on investment securities, see Note 2 to the Consolidated Financial Statements in “Part I. Item 1. Financial Statements.”

Other-Than-Temporary Impairment on Securities Analysis

Non-marketable equity securities. Non-marketable equity securities largely consist of capital stock issued by the FHLB of Des Moines and are evaluated for impairment whenever events or circumstances suggest the carrying value may not be recoverable. Based on the Company’s evaluation of its investments in non-marketable equity securities as of March 31, 2017, the Company determined that none of such securities had other-than-temporary impairment.

Debt securities. In evaluating debt securities for other-than-temporary impairment losses, management assesses whether 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. In so doing, management considers contractual constraints, liquidity, capital, asset/liability management and securities portfolio objectives. For debt securities with limited or inactive markets, the impact of macroeconomic conditions in the U.S. upon fair value estimates includes higher risk-adjusted discount rates and changes in credit ratings provided by NRSRO. In November 2016, S&P reaffirmed its AA+ rating of U.S. government long-term debt, and the outlook remains stable. In November 2016, Moody's reaffirmed its Aaa rating of U.S. government long-term debt and the outlook remains stable. In April 2016, Fitch reaffirmed its AAA rating of U.S. government long-term debt and the outlook remains stable. S&P, Moody's and Fitch have similar credit ratings and outlooks with respect to certain long-term debt instruments issued by Federal National Mortgage Association (“Fannie Mae”), Federal Home Loan Mortgage Corporation (“Freddie Mac”) and other U.S. government agencies linked to the long-term U.S. debt.

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The following table separates investments with an unrealized loss position at March 31, 2017 into two categories: investments purchased prior to 2017 and those purchased during 2017. Of those investments purchased prior to 2017, the fair market value and unrealized gain or loss at December 31, 2016 is also presented.

	March 31, 2017							December 31, 2016
(Dollars in thousands)	Fair Value		Unrealized Loss			Unrealized Loss as a Percent of Fair Value		Fair Value		Unrealized Loss			Unrealized Loss as a Percent of Fair Value
Temporarily impaired securities purchased prior to 2017
U.S. government and federal agency	$	27,499	$	(208	)	(1	)%	$	28,663	$	(156	)	(1	)%
U.S. government sponsored enterprises	6,048		(46		)	(1	)%	6,048		(42		)	(1	)%
State and local governments	476,272		(17,787		)	(4	)%	477,528		(17,395		)	(4	)%
Corporate bonds	147,157		(583		)	—	%	147,656		(709		)	—	%
Residential mortgage-backed securities	656,619		(7,886		)	(1	)%	691,907		(9,559		)	(1	)%
Commercial mortgage-backed securities	97,562		(1,331		)	(1	)%	98,743		(1,578		)	(2	)%
Total	$	1,411,157	$	(27,841	)	(2	)%	$	1,450,545	$	(29,439	)	(2	)%
Temporarily impaired securities purchased during 2017
State and local governments	$	1,524	$	(70	)	(5	)%
Corporate bonds	999		(2		)	—	%
Residential mortgage-backed securities	7,400		(54		)	(1	)%
Commercial mortgage-backed securities	3,008		(3		)	—	%
Total	$	12,931	$	(129	)	(1	)%
Temporarily impaired securities
U.S. government and federal agency	$	27,499	$	(208	)	(1	)%
U.S. government sponsored enterprises	6,048		(46		)	(1	)%
State and local governments	477,796		(17,857		)	(4	)%
Corporate bonds	148,156		(585		)	—	%
Residential mortgage-backed securities	664,019		(7,940		)	(1	)%
Commercial mortgage-backed securities	100,570		(1,334		)	(1	)%
Total	$	1,424,088	$	(27,970	)	(2	)%

With respect to severity, the following table provides the number of debt securities and amount of unrealized loss in the various ranges of unrealized loss as a percent of book value at March 31, 2017:

(Dollars in thousands)	Number of Debt Securities	Unrealized Loss
5.1% to 10.0%	88	$	(11,303	)
0.1% to 5.0%	631	(16,667		)
Total	719	$	(27,970	)

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With respect to the duration of the impaired debt securities, the Company identified 153 securities which have been continuously impaired for the twelve months ending March 31, 2017. The valuation history of such securities in the prior year(s) was also reviewed to determine the number of months in the prior year(s) in which the identified securities were in an unrealized loss position.

The following table provides details of the 153 debt securities which have been continuously impaired for the twelve months ended March 31, 2017, including the most notable loss for any one bond in each category.

(Dollars in thousands)	Number of Debt Securities	Unrealized Loss for 12 Months Or More			Most Notable Loss
U.S. government and federal agency	19	$	(166	)	$	(36	)
State and local governments	108	(11,497		)	(1,289		)
Corporate bonds	3	(10		)	(6		)
Residential mortgage-backed securities	23	(270		)	(107		)
Total	153	$	(11,943	)

Based on the Company's analysis of its impaired debt securities as of March 31, 2017, the Company determined that none of such securities had other-than-temporary impairment and the unrealized losses were primarily the result of interest rate changes and market spreads subsequent to acquisition. A substantial portion of the debt securities with unrealized losses at March 31, 2017 were issued by Fannie Mae, Freddie Mac, Government National Mortgage Association (“Ginnie Mae”) and other agencies of the U.S. government or have credit ratings issued by one or more of the NRSRO entities in the four highest credit rating categories. All of the Company's impaired debt securities at March 31, 2017 have been determined by the Company to be investment grade.

Lending Activity

The Company focuses its lending activities primarily on the following types of loans: 1) first-mortgage, conventional loans secured by residential properties, particularly single-family; 2) commercial lending, including agriculture, that concentrates on targeted businesses; and 3) installment lending for consumer purposes (e.g., home equity, automobile, etc.). Supplemental information regarding the Company’s loan portfolio and credit quality based on regulatory classification is provided in the section captioned “Loans by Regulatory Classification” included in “Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The regulatory classification of loans is based primarily on the type of collateral for the loans. Loan information included in “Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” is based on the Company’s loan segments and classes, which are based on the purpose of the loan, unless otherwise noted as a regulatory classification. The following table summarizes the Company’s loan portfolio as of the dates indicated:

	March 31, 2017					December 31, 2016					March 31, 2016
(Dollars in thousands)	Amount			Percent		Amount			Percent		Amount			Percent
Residential real estate loans	$	685,458		12	%	$	674,347		12	%	$	685,026		14	%
Commercial loans
Real estate	3,056,372			53	%	2,990,141			54	%	2,680,691			53	%
Other commercial	1,462,110			25	%	1,342,250			24	%	1,172,956			23	%
Total	4,518,482			78	%	4,332,391			78	%	3,853,647			76	%
Consumer and other loans
Home equity	433,554			8	%	434,774			8	%	423,895			8	%
Other consumer	239,480			4	%	242,951			4	%	234,625			5	%
Total	673,034			12	%	677,725			12	%	658,520			13	%
Loans receivable	5,876,974			102	%	5,684,463			102	%	5,197,193			103	%
Allowance for loan and lease losses	(129,226		)	(2	)%	(129,572		)	(2	)%	(130,071		)	(3	)%
Loans receivable, net	$	5,747,748		100	%	$	5,554,891		100	%	$	5,067,122		100	%

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Non-performing Assets

The following table summarizes information regarding non-performing assets at the dates indicated:

	At or for the Three Months ended			At or for the Year ended		At or for the Three Months ended
(Dollars in thousands)	March 31, 2017			December 31, 2016		March 31, 2016
Other real estate owned	$	17,771		20,954		22,085
Accruing loans 90 days or more past due
Residential real estate	—			266		833
Commercial	2,644			428		3,637
Consumer and other	384			405		145
Total	3,028			1,099		4,615
Non-accrual loans
Residential real estate	5,949			4,528		7,319
Commercial	38,578			39,033		39,546
Consumer and other	6,147			5,771		6,658
Total	50,674			49,332		53,523
Total non-performing assets	$	71,473		71,385		80,223
Non-performing assets as a percentage of subsidiary assets	0.75		%	0.76	%	0.88	%
ALLL as a percentage of non-performing loans	241		%	257	%	224	%
Accruing loans 30-89 days past due	$	39,160		25,617		23,996
Accruing troubled debt restructurings	$	38,955		52,077		53,311
Non-accrual troubled debt restructurings	$	19,479		21,693		23,879
U.S. government guarantees included in non-performing assets	$	1,690		1,746		2,247
Interest income 1	$	589		2,364		639

__________

¹  Amounts represent estimated interest income that would have been recognized on loans accounted for on a non-accrual basis as of the end of each period had such loans performed pursuant to contractual terms.

Non-performing assets at March 31, 2017 were $71.5 million, with a slight increase from the prior quarter and a decrease of $8.8 million, or 11 percent, from a year ago. Non-performing assets as a percentage of subsidiary assets at March 31, 2017 was 0.75 percent which was a decrease of 13 basis points from the prior year first quarter of 0.88 percent. Early stage delinquencies (accruing loans 30-89 days past due) of $39.2 million at March 31, 2017 increased $13.5 million from the prior quarter and increased $15.2 million from the prior year first quarter with half of the increase from one loan that the Company is currently in the process of evaluating.

Most of the Company’s non-performing assets are secured by real estate, and based on the most current information available to management, including updated appraisals or evaluations (new or updated), the Company believes the value of the underlying real estate collateral is adequate to minimize significant charge-offs or losses to the Company. The Company evaluates the level of its non-performing loans, the values of the underlying real estate and other collateral, and related trends in internal and external environmental factors and net charge-offs in determining the adequacy of the ALLL. Through pro-active credit administration, the Company works closely with its borrowers to seek favorable resolution to the extent possible, thereby attempting to minimize net charge-offs or losses to the Company.

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In prior years, construction loans, a regulatory classification, accounted for a significant portion of the Company’s non-accrual loans. As a result of the gradual economic recovery and the Company’s diligent focus on this category of non-performing loans, construction loans only accounted for 21 percent of the Company’s non-accrual loans as of March 31, 2017. With very limited exceptions, the Company does not disburse additional funds on non-performing loans. Instead, the Company has proceeded to collection and foreclosure actions in order to reduce the Company’s exposure to loss on such loans.

For additional information on accounting policies relating to non-performing assets and impaired loans, see Note 1 to the Consolidated Financial Statements in “Part I. Item 1. Financial Statements.”

Impaired Loans

Loans are designated impaired when, based upon 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 and therefore, the Company has serious doubts as to the ability of such borrowers to fulfill the contractual obligation. Impaired loans include non-performing loans (i.e., non-accrual loans and accruing loans ninety days or more past due) and accruing loans under ninety days past due where it is probable payments will not be received according to the loan agreement (e.g., troubled debt restructuring).

Impaired loans were $135 million and $130 million as of March 31, 2017 and December 31, 2016, respectively. The ALLL includes specific valuation allowances of $6.8 million and $6.9 million of impaired loans as of March 31, 2017 and December 31, 2016, respectively. Of the total impaired loans at March 31, 2017, there were 15 significant commercial real estate and other commercial loans that accounted for $57.5 million, or 43 percent, of the impaired loans. The 15 loans were collateralized by 145 percent of the loan value, the majority of which had appraisals or evaluations (new or updated) during the last year, such appraisals reviewed at least quarterly taking into account current market conditions. Of the total impaired loans at March 31, 2017, there were 116 loans aggregating $72.3 million, or 53 percent, whereby the borrowers had more than one impaired loan.

Restructured Loans

A restructured loan is considered a troubled debt restructuring (“TDR”) if the creditor, for economic or legal reasons related to the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider. The Company had TDR loans of $58.4 million and $77.2 million as of March 31, 2017 and December 31, 2016, respectively. The Company’s TDR loans are considered impaired loans of which $19.5 million and $23.9 million as of March 31, 2017 and December 31, 2016, respectively, are designated as non-accrual.

Each restructured debt is separately negotiated with the borrower and includes terms and conditions that reflect the borrower’s prospective ability to service the debt as modified. The Company discourages the use of the multiple loan strategy when restructuring loans regardless of whether or not the loans are designated as TDRs.

Other Real Estate Owned

The book value of loans prior to the acquisition of collateral and transfer of the loans into OREO during 2017 was $514 thousand. The fair value of the loan collateral acquired in foreclosure during 2017 was $390 thousand. The following table sets forth the changes in OREO for the periods indicated:

	At or for the Three Months ended			At or for the Year ended		At or for the Three Months ended
(Dollars in thousands)	March 31, 2017			December 31, 2016		March 31, 2016
Balance at beginning of period	$	20,954		26,815		26,815
Acquisitions	—			882		—
Additions	390			5,198		178
Capital improvements	—			149		75
Write-downs	(21		)	(1,821	)	(55	)
Sales	(3,552		)	(10,269	)	(4,928	)
Balance at end of period	$	17,771		20,954		22,085

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Allowance for Loan and Lease Losses

Determining the adequacy of the ALLL involves a high degree of judgment and is inevitably imprecise as the risk of loss is difficult to quantify. The ALLL methodology is designed to reasonably estimate the probable loan and lease losses within the Company’s loan portfolio. Accordingly, the ALLL is maintained within a range of estimated losses. The determination of the ALLL, including the provision for loan losses and net charge-offs, is a critical accounting estimate that involves management’s judgments about all known relevant internal and external environmental factors that affect loan losses, including the credit risk inherent in the loan portfolio, economic conditions nationally and in the local markets in which the Company operates, trends and changes in collateral values, delinquencies, non-performing assets, net charge-offs and credit-related policies and personnel. Although the Company continues to actively monitor economic trends, soft economic conditions combined with potential declines in the values of real estate that collateralize most of the Company’s loan portfolio may adversely affect the credit risk and potential for loss to the Company.

The ALLL evaluation is well documented and approved by the Company’s Board. In addition, the policy and procedures for determining the balance of the ALLL are reviewed annually by the Company’s Board, the internal audit department, independent credit reviewers and state and federal bank regulatory agencies.

At the end of each quarter, the Company analyzes its loan portfolio and maintains an ALLL at a level that is appropriate and determined in accordance with GAAP. The allowance consists of a specific valuation allowance component and a general valuation allowance component. The specific valuation allowance component relates to loans that are determined to be impaired. A specific valuation allowance is established when the fair value of a collateral-dependent loan or the present value of the loan’s expected future cash flows (discounted at the loan’s effective interest rate) is lower than the carrying value of the impaired loan. The general valuation allowance component relates to probable credit losses inherent in the balance of the loan portfolio based on historical loss experience, adjusted for changes in trends and conditions of qualitative or environmental factors.

The Bank divisions’ credit administration reviews their respective loan portfolios to determine which loans are impaired and estimates the specific valuation allowance. The impaired loans and related specific valuation allowance are then provided to the Company’s credit administration for further review and approval. The Company’s credit administration also determines the estimated general valuation allowance and reviews and approves the overall ALLL. The credit administration of the Company exercises significant judgment when evaluating the effect of applicable qualitative or environmental factors on the Company’s historical loss experience for loans not identified as impaired. Quantification of the impact upon the Company’s ALLL is inherently subjective as data for any factor may not be directly applicable, consistently relevant, or reasonably available for management to determine the precise impact of a factor on the collectability of the Company’s loans collectively evaluated for impairment as of each evaluation date. The Company’s credit administration documents its conclusions and rationale for changes that occur in each applicable factor’s weight (i.e., measurement) and ensures that such changes are directionally consistent based on the underlying current trends and conditions for the factor. To have directional consistency, the provision for loan losses and credit quality should generally move in the same direction.

The Company’s model includes thirteen Bank divisions with separate management teams providing substantial local oversight to the lending and credit management function. The Company’s business model affords multiple reviews of larger loans before credit is extended, a significant benefit in mitigating and managing the Company’s credit risk. The geographic dispersion of the market areas in which the Company operates further mitigates the risk of credit loss. While this process is intended to limit credit exposure, there can be no assurance that further problem credits will not arise and additional loan losses incurred, particularly in this slowly improving, but fragile economic recovery and in periods of rapid economic downturns.

The primary responsibility for credit risk assessment and identification of problem loans rests with the loan officer of the account. This continuous process of identifying impaired loans is necessary to support management’s evaluation of the ALLL adequacy. An independent loan review function verifying credit risk ratings evaluates the loan officer and management’s evaluation of the loan portfolio credit quality.

No assurance can be given that the Company will not, in any particular period, sustain losses that are significant relative to the ALLL amount, or that subsequent evaluations of the loan portfolio applying management’s judgment about then current factors, including economic and regulatory developments, will not require significant changes in the ALLL. Under such circumstances, this could result in enhanced provisions for loan losses.

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The following table summarizes the allocation of the ALLL as of the dates indicated:

	March 31, 2017						December 31, 2016						March 31, 2016
(Dollars in thousands)	ALLL		Percent of ALLL in Category		Percent of Loans in Category		ALLL		Percent of  ALLL in Category		Percent of Loans in Category		ALLL		Percent of  ALLL in Category		Percent of Loans in Category
Residential real estate	$	11,535	9	%	12	%	$	12,436	9	%	12	%	$	13,196	10	%	13	%
Commercial real estate	64,753		50	%	52	%	65,773		51	%	52	%	67,046		52	%	52	%
Other commercial	39,157		30	%	25	%	37,823		29	%	24	%	36,054		28	%	22	%
Home equity	7,679		6	%	7	%	7,572		6	%	8	%	8,149		6	%	8	%
Other consumer	6,102		5	%	4	%	5,968		5	%	4	%	5,626		4	%	5	%
Total	$	129,226	100	%	100	%	$	129,572	100	%	100	%	$	130,071	100	%	100	%

The following table summarizes the ALLL experience for the periods indicated:

	At or for the Three Months ended			At or for the Year ended		At or for the Three Months ended
(Dollars in thousands)	March 31, 2017			December 31, 2016		March 31, 2016
Balance at beginning of period	$	129,572		129,697		129,697
Provision for loan losses	1,598			2,333		568
Charge-offs
Residential real estate	(22		)	(464	)	(100	)
Commercial loans	(1,359		)	(4,226	)	(577	)
Consumer and other loans	(2,848		)	(6,806	)	(486	)
Total charge-offs	(4,229		)	(11,496	)	(1,163	)
Recoveries
Residential real estate	47			207		18
Commercial loans	422			5,271		428
Consumer and other loans	1,816			3,560		523
Total recoveries	2,285			9,038		969
Charge-offs, net of recoveries	(1,944		)	(2,458	)	(194	)
Balance at end of period	$	129,226		129,572		130,071
ALLL as a percentage of total loans	2.20		%	2.28	%	2.50	%
Net charge-offs as a percentage of total loans	0.03		%	0.04	%	—	%

The allowance as a percent of total loans outstanding at March 31, 2017 was 2.20 percent, a decrease of 8 basis points from 2.28 percent at December 31, 2016.

The Company’s ALLL of $129 million is considered adequate to absorb losses from any class of its loan portfolio. For the periods ended March 31, 2017 and 2016, the Company believes the ALLL is commensurate with the risk in the Company’s loan portfolio and is directionally consistent with the change in the quality of the Company’s loan portfolio.

When applied to the Company’s historical loss experience, the qualitative or environmental factors result in the provision for loan losses being recorded in the period in which the loss has probably occurred. When the loss is confirmed at a later date, a charge-off is recorded. During 2017, loan charge-offs, net of recoveries, exceeded the provision for loan losses by $346 thousand. During the same period in 2016, the provision for loan losses exceeded loan charge-offs, net of recoveries, by $374 thousand.

52

The Company provides commercial services to individuals, small to medium-sized businesses, community organizations and public entities from 142 locations, including 133 branches, across Montana, Idaho, Wyoming, Colorado, Utah, and Washington. The Rocky Mountain states in which the Company operates have diverse economies and markets that are tied to commodities (crops, livestock, minerals, oil and natural gas), tourism, real estate and land development and an assortment of industries, both manufacturing and service-related. Thus, the changes in the global, national, and local economies are not uniform across the Company’s geographic locations.

Overall, there continues to be slow improvements in the economic environment compared to the past several years and the housing market is slowly recovering. Home prices continue to increase in all of the states within the Company’s footprint, except Wyoming. Colorado and Washington are experiencing the strongest pricing pressures, while Wyoming continues to lag behind the national trend. Four of the Company’s states are ranked in the top 10 nationally for house price appreciation. Home ownership in the United States has continually declined since 2008; however, there have been recent periods of increased home ownership during the second half of 2015 and the second half of 2016. The long-term average for the United States homeownership rate is at 65 percent. Annual personal income growth remains in positive territory for each of the Company’s states, while Washington, Colorado and Utah exceed the national average. The Federal Reserve Bank of Philadelphia’s composite state coincident indices projects steady growth during the first half of 2017 throughout the Company’s footprint. The increase in Gross Domestic Product during the prior quarter reflected positive contributions from personal consumption expenditures, private inventory investment and residential/nonresidential fixed investment and was partly offset by negative contributions from federal government spending and exports. Colorado, Utah, Idaho, Montana and Wyoming all have unemployment rates below 5 percent, which reflects the Federal Reserve’s definition of full employment. Crude oil, natural gas and base metal prices have all increased throughout 2016 and certain agriculture commodities within the Company’s footprint remain volatile. The tourism industry and related lodging activity continues to be a source of strength for locations where the Company’s markets include national parks and similar recreational areas. However, Canadian tourism in Washington, Idaho and Montana has been negatively impacted by the weak Canadian dollar. Overall, the Company sees positive signs in the various economic indices; however, given the significant recession experienced during 2008 and 2009, the Company is cautiously optimistic about the subsequent recovery of the housing industry. The Company will continue to actively monitor the economy’s impact on its lending portfolio.

In evaluating the need for a specific or general valuation allowance for impaired and unimpaired loans, respectively, within the Company’s construction loan portfolio (i.e., regulatory classification), including residential construction and land, lot and other construction loans, the credit risk related to such loans was considered in the ongoing monitoring of such loans, including assessments based on current information, including appraisals or evaluations (new or updated) of the underlying collateral, expected cash flows and the timing thereof, as well as the estimated cost to sell when such costs are expected to reduce the cash flows available to repay or otherwise satisfy the construction loan. Construction loans were 12 percent of the Company’s total loan portfolio and accounted for 21 percent and 20 percent of the Company’s non-accrual loans at March 31, 2017 and December 31, 2016, respectively. Collateral securing construction loans includes residential buildings (e.g., single/multi-family and condominiums), commercial buildings, and associated land (e.g., multi-acre parcels and individual lots, with and without shorelines).

The Company’s ALLL consisted of the following components as of the dates indicated:

(Dollars in thousands)	March 31, 2017		December 31, 2016	March 31, 2016
Specific valuation allowance	$	6,787	6,881	8,440
General valuation allowance	122,439		122,691	121,631
Total ALLL	$	129,226	129,572	130,071

During 2017, the ALLL decreased by $346 thousand, the net result of a $94 thousand decrease in the specific valuation allowance and a $252 thousand decrease in the general valuation allowance. The specific valuation allowance decreased as the result of a $2.3 million decrease in loans individually reviewed for impairment with a specific impairment. The minimal decrease in the general valuation allowance since the prior year end was a result of the continued improvement in credit quality.

For additional information regarding the ALLL, its relation to the provision for loan losses and risk related to asset quality, see Note 3 to the Consolidated Financial Statements in “Part I. Item 1. Financial Statements.”

53

Loans by Regulatory Classification

Supplemental information regarding identification of the Company’s loan portfolio and credit quality based on regulatory classification is provided in the following tables. The regulatory classification of loans is based primarily on the type of collateral for the loans. There may be differences when compared to loan tables and loan amounts appearing elsewhere which reflect the Company’s internal loan segments and classes which are based on the purpose of the loan.

The following table summarizes the Company’s loan portfolio by regulatory classification:

	Loans Receivable, by Loan Type									% Change from
(Dollars in thousands)	Mar 31, 2017			Dec 31, 2016			Mar 31, 2016			Dec 31, 2016		Mar 31, 2016
Custom and owner occupied construction	$	92,835		$	86,233		$	68,893		8	%	35	%
Pre-sold and spec construction	68,736			66,184			59,220			4	%	16	%
Total residential construction	161,571			152,417			128,113			6	%	26	%
Land development	78,042			75,078			59,539			4	%	31	%
Consumer land or lots	94,840			97,449			93,922			(3	)%	1	%
Unimproved land	66,857			69,157			73,791			(3	)%	(9	)%
Developed lots for operative builders	13,046			13,254			12,973			(2	)%	1	%
Commercial lots	26,639			30,523			23,558			(13	)%	13	%
Other construction	272,184			257,769			166,378			6	%	64	%
Total land, lot, and other construction	551,608			543,230			430,161			2	%	28	%
Owner occupied	988,544			977,932			944,411			1	%	5	%
Non-owner occupied	964,913			929,729			806,856			4	%	20	%
Total commercial real estate	1,953,457			1,907,661			1,751,267			2	%	12	%
Commercial and industrial	739,475			686,870			664,855			8	%	11	%
Agriculture	411,094			407,208			372,616			1	%	10	%
1st lien	839,387			877,893			841,848			(4	)%	—	%
Junior lien	54,801			58,564			63,162			(6	)%	(13	)%
Total 1-4 family	894,188			936,457			905,010			(5	)%	(1	)%
Multifamily residential	162,636			184,068			197,267			(12	)%	(18	)%
Home equity lines of credit	405,309			402,614			379,866			1	%	7	%
Other consumer	153,159			155,193			150,047			(1	)%	2	%
Total consumer	558,468			557,807			529,913			—	%	5	%
Other	470,126			381,672			258,475			23	%	82	%
Total loans receivable, including loans held for sale	5,902,623			5,757,390			5,237,677			3	%	13	%
Less loans held for sale 1	(25,649		)	(72,927		)	(40,484		)	(65	)%	(37	)%
Total loans receivable	$	5,876,974		$	5,684,463		$	5,197,193		3	%	13	%

__________

¹  Loans held for sale are primarily 1st lien 1-4 family loans.

54

The following tables summarize selected information identified by regulatory classification of the Company’s non-performing assets.

	Non-performing Assets,  by Loan Type				Non- Accrual Loans	Accruing Loans 90  Days or  More Past Due	Other Real  Estate Owned
(Dollars in thousands)	Mar 31, 2017		Dec 31, 2016	Mar 31, 2016	Mar 31, 2017	Mar 31, 2017	Mar 31, 2017
Custom and owner occupied construction	$	—	—	995	—	—	—
Pre-sold and spec construction	227		226	—	227	—	—
Total residential construction	227		226	995	227	—	—
Land development	8,856		9,864	18,190	1,482	—	7,374
Consumer land or lots	1,728		2,137	1,751	754	—	974
Unimproved land	12,017		11,905	11,651	8,137	—	3,880
Developed lots for operative builders	116		175	457	—	—	116
Commercial lots	1,255		1,466	1,333	—	—	1,255
Total land, lot and other construction	23,972		25,547	33,382	10,373	—	13,599
Owner occupied	17,956		18,749	12,130	16,109	148	1,699
Non-owner occupied	3,194		3,426	4,354	3,194	—	—
Total commercial real estate	21,150		22,175	16,484	19,303	148	1,699
Commercial and industrial	4,466		5,184	6,046	4,298	65	103
Agriculture	1,878		1,615	3,220	1,488	390	—
1st lien	10,047		9,186	11,041	8,037	296	1,714
Junior lien	1,335		1,167	1,111	1,286	49	—
Total 1-4 family	11,382		10,353	12,152	9,323	345	1,714
Multifamily residential	388		400	432	388	—	—
Home equity lines of credit	6,008		5,494	5,432	5,136	232	640
Other consumer	202		391	280	138	48	16
Total consumer	6,210		5,885	5,712	5,274	280	656
Other	1,800		—	1,800	—	1,800	—
Total	$	71,473	71,385	80,223	50,674	3,028	17,771

55

	Accruing 30-89 Days Delinquent Loans,  by Loan Type						% Change from
(Dollars in thousands)	Mar 31, 2017		Dec 31, 2016		Mar 31, 2016		Dec 31, 2016		Mar 31, 2016
Custom and owner occupied construction	$	380	$	1,836	$	—	(79	)%	n/m
Pre-sold and spec construction	488		—		304		n/m		61	%
Total residential construction	868		1,836		304		(53	)%	186	%
Land development	—		154		198		(100	)%	(100	)%
Consumer land or lots	432		638		796		(32	)%	(46	)%
Unimproved land	938		1,442		1,284		(35	)%	(27	)%
Commercial lots	258		—		—		n/m		n/m
Other construction	7,125		—		—		n/m		n/m
Total land, lot and other construction	8,753		2,234		2,278		292	%	284	%
Owner occupied	6,686		2,307		4,552		190	%	47	%
Non-owner occupied	405		1,689		1,466		(76	)%	(72	)%
Total commercial real estate	7,091		3,996		6,018		77	%	18	%
Commercial and industrial	6,796		3,032		4,907		124	%	38	%
Agriculture	3,567		1,133		659		215	%	441	%
1st lien	7,132		7,777		5,896		(8	)%	21	%
Junior lien	848		1,016		759		(17	)%	12	%
Total 1-4 family	7,980		8,793		6,655		(9	)%	20	%
Multifamily residential	2,028		10		—		20,180	%	n/m
Home equity lines of credit	703		1,537		2,528		(54	)%	(72	)%
Other consumer	1,317		1,180		607		12	%	117	%
Total consumer	2,020		2,717		3,135		(26	)%	(36	)%
Other	57		1,866		40		(97	)%	43	%
Total	$	39,160	$	25,617	$	23,996	53	%	63	%

__________

n/m - not measurable

56

The following table summarizes net charge-offs at the dates indicated, including identification by regulatory classification:

	Net Charge-Offs (Recoveries), Year-to-Date Period Ending, By Loan Type							Charge-Offs	Recoveries
(Dollars in thousands)	Mar 31, 2017			Dec 31, 2016		Mar 31, 2016		Mar 31, 2017	Mar 31, 2017
Custom and owner occupied construction	$	—		(1	)	—		—	—
Pre-sold and spec construction	(11		)	786		(28	)	—	11
Total residential construction	(11		)	785		(28	)	—	11
Land development	(33		)	(2,661	)	(100	)	—	33
Consumer land or lots	(57		)	(688	)	(240	)	—	57
Unimproved land	(96		)	(184	)	(34	)	—	96
Developed lots for operative builders	(5		)	(27	)	(12	)	—	5
Commercial lots	(2		)	27		23		—	2
Total land, lot and other construction	(193		)	(3,533	)	(363	)	—	193
Owner occupied	795			1,196		(27	)	888	93
Non-owner occupied	(1		)	44		(1	)	—	1
Total commercial real estate	794			1,240		(28	)	888	94
Commercial and industrial	344			(370	)	69		470	126
Agriculture	(3		)	50		(1	)	—	3
1st lien	(15		)	487		47		44	59
Junior lien	(16		)	60		(15	)	—	16
Total 1-4 family	(31		)	547		32		44	75
Multifamily residential	—			229		229		—	—
Home equity lines of credit	12			611		179		75	63
Other consumer	(11		)	257		95		73	84
Total consumer	1			868		274		148	147
Other	1,043			2,642		10		2,679	1,636
Total	$	1,944		2,458		194		4,229	2,285

57

Sources of Funds

The Company’s deposits have traditionally been the principal source of funds for use in lending and other business purposes. The Company also obtains funds from repayment of loans and investment securities, repurchase agreements, wholesale deposits, advances from FHLB and other borrowings. Loan repayments are a relatively stable source of funds, while interest bearing deposit inflows and outflows are significantly influenced by general interest rate levels and market conditions. Borrowings and advances may be used on a short-term basis to compensate for reductions in normal sources of funds such as deposit inflows at less than projected levels. Borrowings also may be used on a long-term basis to support expanded activities, match maturities of longer-term assets or manage interest rate risk.

Deposits

The Company has several deposit programs designed to attract both short-term and long-term deposits from the general public by providing a wide selection of accounts and rates. These programs include non-interest bearing demand accounts, interest bearing NOW and demand accounts, savings, money market deposit accounts, fixed rate certificates of deposit with maturities ranging from three months to five years, negotiated-rate jumbo certificates, and individual retirement accounts. These deposits are obtained primarily from individual and business residents in the Bank’s geographic market areas. In addition, wholesale deposits are obtained through various programs and include brokered deposits classified as NOW, DDA, money market deposit and certificate accounts. The Company’s deposits are summarized below:

	March 31, 2017				December 31, 2016				March 31, 2016
(Dollars in thousands)	Amount		Percent		Amount		Percent		Amount		Percent
Non-interest bearing deposits	$	2,049,476	27	%	$	2,041,852	28	%	$	1,887,004	27	%
NOW and DDA accounts	1,596,353		21	%	1,588,550		22	%	1,448,454		21	%
Savings accounts	1,035,023		14	%	996,061		13	%	879,541		12	%
Money market deposit accounts	1,516,731		20	%	1,464,415		20	%	1,411,970		20	%
Certificate accounts	941,628		13	%	948,714		13	%	1,063,735		15	%
Wholesale deposits	340,946		5	%	332,687		4	%	325,490		5	%
Total interest bearing deposits	5,430,681		73	%	5,330,427		72	%	5,129,190		73	%
Total deposits	$	7,480,157	100	%	$	7,372,279	100	%	$	7,016,194	100	%

Securities Sold Under Agreements to Repurchase, Federal Home Loan Bank Advances and Other Borrowings

The Company borrows money through repurchase agreements. This process involves the selling of one or more of the securities in the Company’s investment portfolio and simultaneously entering into an agreement to repurchase that same securities at an agreed upon later date, typically overnight. A rate of interest is paid for the agreed period of time. Through a policy adopted by the Bank’s Board of Directors, the Bank enters into repurchase agreements with local municipalities, and certain customers, and has adopted procedures designed to ensure proper transfer of title and safekeeping of the underlying securities. In addition to retail repurchase agreements, the Company enters into wholesale repurchase agreements as additional funding sources. The Company has not entered into reverse repurchase agreements.

The Bank is a member of the FHLB of Des Moines, which is one of eleven banks that comprise the FHLB system.  The Bank is required to maintain a certain level of activity-based stock in order to borrow or to engage in other transactions with the FHLB of Des Moines. Additionally, the Bank is subject to a membership capital stock requirement that is based upon an annual calibration tied to the total assets of the Bank. The borrowings are collateralized by eligible categories of loans and investment securities (principally, securities which are obligations of, or guaranteed by, the U.S. government and its agencies), provided certain standards related to credit-worthiness have been met. Advances are made pursuant to several different credit programs, each of which has its own interest rates and range of maturities. The Bank’s maximum amount of FHLB advances is limited to the lesser of a fixed percentage of the Bank’s total assets or the discounted value of eligible collateral. FHLB advances fluctuate to meet seasonal and other withdrawals of deposits and to expand lending or investment opportunities of the Company.

Additionally, the Company has other sources of secured and unsecured borrowing lines from various sources that may be used from time to time.

58

Short-term borrowings

A critical component of the Company’s liquidity and capital resources is access to short-term borrowings to fund its operations. Short-term borrowings are accompanied by increased risks managed by the Bank’s Asset Liability Committee (“ALCO”) such as rate increases or unfavorable change in terms which would make it more costly to obtain future short-term borrowings. The Company’s short-term borrowing sources include FHLB advances, federal funds purchased and retail and wholesale repurchase agreements. The Company also has access to the short-term discount window borrowing programs (i.e., primary credit) of the Federal Reserve Bank (“FRB”). FHLB advances and certain other short-term borrowings may be renewed as long-term borrowings to decrease certain risks such as liquidity or interest rate risk; however, the reduction in risks are weighed against the increased cost of funds and other risks.

The following table provides information relating to significant short-term borrowings, which consists of borrowings that mature within one year of period end:

	At or for the Three Months ended			At or for the Year ended
(Dollars in thousands)	March 31, 2017			December 31, 2016
Repurchase agreements
Amount outstanding at end of period	$	497,187		473,650
Weighted interest rate on outstanding amount	0.38		%	0.34	%
Maximum outstanding at any month-end	$	497,187		473,650
Average balance	$	430,552		384,066
Weighted-average interest rate	0.36		%	0.31	%

Subordinated Debentures

In addition to funds obtained in the ordinary course of business, the Company formed or acquired financing subsidiaries for the purpose of issuing trust preferred securities that entitle the investor to receive cumulative cash distributions thereon. The subordinated debentures outstanding as of March 31, 2017 were $126 million, including fair value adjustments from prior acquisitions.

Contractual Obligations and Off-Balance Sheet Arrangements

In the normal course of business, there may be various outstanding commitments to obtain funding and to extend credit, such as letters of credit and un-advanced loan commitments, which are not reflected in the accompanying condensed consolidated financial statements. The Company does not anticipate any material losses as a result of these transactions.

Off-balance sheet arrangements also include any obligation related to a variable interest held in an unconsolidated entity. The Company does not anticipate any material losses as a result of these transactions. For additional information regarding the Company’s interests in unconsolidated variable interest entities (“VIE”), see Note 5 to the Consolidated Financial Statements in “Part I. Item 1. Financial Statements.”

59

Liquidity Risk

Liquidity risk is the possibility that the Company will not be able to fund present and future obligations as they come due because of an inability to liquidate assets or obtain adequate funding at a reasonable cost. The objective of liquidity management is to maintain cash flows adequate to meet current and future needs for credit demand, deposit withdrawals, maturing liabilities and corporate operating expenses. Effective liquidity management entails three elements:

1. Assessing on an ongoing basis, the current and expected future needs for funds, and ensuring that sufficient funds or access to funds exist to meet those needs at the appropriate time;

2. Providing for an adequate cushion of liquidity to meet unanticipated cash flow needs that may arise from potential adverse circumstances ranging from high probability/low severity events to low probability/high severity; and

3. Balancing the benefits between providing for adequate liquidity to mitigate potential adverse events and the cost of that liquidity.

The Company has a wide range of versatility in managing the liquidity and asset/liability mix. The Bank’s ALCO meets regularly to assess liquidity risk, among other matters. The Company monitors liquidity and contingency funding alternatives through management reports of liquid assets (e.g., investment securities), both unencumbered and pledged, as well as borrowing capacity, both secured and unsecured, including off-balance sheet funding sources. The Company evaluates its potential funding needs across alternative scenarios and maintains contingency funding plans consistent with the Company’s access to diversified sources of contingent funding.

The following table identifies certain liquidity sources and capacity available to the Company as of the dates indicated:

(Dollars in thousands)	March 31, 2017			December 31, 2016
FHLB advances
Borrowing capacity	$	1,694,600		1,558,527
Amount utilized	(211,627		)	(251,749	)
Amount available	$	1,482,973		1,306,778
FRB discount window
Borrowing capacity	$	1,259,540		1,226,683
Amount utilized	—			—
Amount available	$	1,259,540		1,226,683
Unsecured lines of credit available	$	255,000		255,000
Unencumbered investment securities
U.S. government and federal agency	$	35,071		39,407
U.S. government sponsored enterprises	8,651			12,086
State and local governments	741,147			814,942
Corporate bonds	25,539			19,573
Residential mortgage-backed securities	203,423			258,260
Commercial mortgage-backed securities	57,315			78,144
Total unencumbered securities	$	1,071,146		1,222,412

60

Capital Resources

Maintaining capital strength continues to be a long-term objective of the Company. Abundant capital is necessary to sustain growth, provide protection against unanticipated declines in asset values, and to safeguard the funds of depositors. Capital is also a source of funds for loan demand and enables the Company to effectively manage its assets and liabilities. The Company has the capacity to issue 117,187,500 shares of common stock of which 76,619,952 have been issued as of March 31, 2017. The Company also has the capacity to issue 1,000,000 shares of preferred stock of which none have been issued as of March 31, 2017. Conversely, the Company may decide to utilize a portion of its strong capital position, as it has done in the past, to repurchase shares of its outstanding common stock, depending on market price and other relevant considerations.

The Federal Reserve has adopted capital adequacy guidelines that are used to assess the adequacy of capital in supervising a bank holding company. The federal banking agencies implemented final rules (“Final Rules”) to establish a new comprehensive regulatory capital framework with a phase-in period beginning on January 1, 2015 and ending on January 1, 2019. The Final Rules implemented the third installment of the Basel Accords (“Basel III”) regulatory capital reforms and changes required by the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) and substantially amended the regulatory risk-based capital rules applicable to the Company. Under Basel III, the Company must hold a conservation buffer above the adequately capitalized risk-based capital ratios. The capital conservation buffer for 2017 is 1.25%. As of March 31, 2017, management believes the Company and Bank meet all capital adequacy requirements to which they are subject.

The following table illustrates the Bank’s regulatory ratios and the Federal Reserve’s current capital adequacy guidelines as of March 31, 2017. The Federal Reserve’s fully phased-in guidelines applicable in 2019 are also summarized.

	Total Capital (To Risk-Weighted Assets)		Tier 1 Capital (To Risk-Weighted Assets)		Common Equity Tier 1 (To Risk-Weighted Assets)		Leverage Ratio/ Tier 1 Capital (To Average Assets)
Glacier Bank’s actual regulatory ratios	15.63	%	14.37	%	14.37	%	11.41	%
Minimum capital requirements	8.00	%	6.00	%	4.50	%	4.00	%
Well capitalized requirements	10.00	%	8.00	%	6.50	%	5.00	%
Minimum capital requirements, including fully-phased in capital conservation buffer (2019)	10.50	%	8.50	%	7.00	%	N/A

There are no conditions or events since March 31, 2017 that management believes have changed the Company’s or Bank’s risk-based capital category.

61

Federal and State Income Taxes

The Company files a consolidated federal income tax return using the accrual method of accounting. All required tax returns have been timely filed. Financial institutions are subject to the provisions of the Internal Revenue Code of 1986, as amended, in the same general manner as other corporations.

Under Montana, Idaho, Colorado and Utah law, financial institutions are subject to a corporation income tax, which incorporates or is substantially similar to applicable provisions of the Internal Revenue Code. The corporation income tax is imposed on federal taxable income, subject to certain adjustments. State taxes are incurred at the rate of 6.75 percent in Montana, 7.4 percent in Idaho, 5 percent in Utah and 4.63 percent in Colorado. Wyoming and Washington do not impose a corporate income tax.

Income tax expense for the three months ended March 31, 2017 and 2016 was $9.8 million and $9.4 million, respectively. The Company’s effective tax rate for the three months ended March 31, 2017 and 2016 was 23.8 percent and 24.6 percent, respectively. The current and prior year’s low effective tax rates are due to income from tax-exempt investment securities, municipal loans and leases and benefits from federal income tax credits. The income from tax-exempt investment securities, loans and leases was $14.4 million for the three months ended March 31, 2017 and 2016. The benefits from federal income tax credits were $987 thousand and $509 thousand for the three months ended March 31, 2017 and 2016, respectively.

The Company has equity investments in Certified Development Entities (“CDE”) which have received allocations of NMTCs. Administered by the Community Development Financial Institutions Fund (“CDFI Fund”) of the U.S. Department of the Treasury, the NMTC program is aimed at stimulating economic and community development and job creation in low-income communities. The federal income tax credits received are claimed over a seven-year credit allowance period. The Company also has equity investments in Low-Income Housing Tax Credits (“LIHTC”) which are indirect federal subsidies used to finance the development of affordable rental housing for low-income households. The federal income tax credits are claimed over a ten-year credit allowance period. The Company has investments of $22.1 million in Qualified Zone Academy and Qualified School Construction bonds whereby the Company receives quarterly federal income tax credits in lieu of taxable interest income. The federal income tax credits on these investment securities are subject to federal and state income tax.

Following is a list of expected federal income tax credits to be received in the years indicated.

(Dollars in thousands)	New Markets Tax Credits		Low-Income Housing Tax Credits	Investment Securities Tax Credits	Total
2017	$	1,911	2,860	783	5,554
2018	1,589		3,647	710	5,946
2019	1,689		3,647	661	5,997
2020	1,754		3,432	611	5,797
2021	1,754		2,615	566	4,935
Thereafter	1,375		13,838	1,929	17,142
	$	10,072	30,039	5,260	45,371

62

Average Balance Sheet

The following schedule provides 1) the total dollar amount of interest and dividend income of the Company for earning assets and the average yields; 2) the total dollar amount of interest expense on interest bearing liabilities and the average rates; 3) net interest and dividend income and interest rate spread; and 4) net interest margin (tax-equivalent).

	Three Months ended							Three Months ended
	March 31, 2017							March 31, 2016
(Dollars in thousands)	Average Balance			Interest and Dividends		Average Yield/ Rate		Average Balance		Interest and Dividends		Average Yield/ Rate
Assets
Residential real estate loans	$	709,432		$	7,918	4.46	%	$	726,270	$	8,285	4.56	%
Commercial loans 1	4,372,299			51,335		4.76	%	3,749,929		45,335		4.86	%
Consumer and other loans	672,480			7,801		4.70	%	653,839		7,710		4.74	%
Total loans 2	5,754,211			67,054		4.73	%	5,130,038		61,330		4.81	%
Tax-exempt investment securities 3	1,245,358			17,761		5.70	%	1,352,683		19,383		5.73	%
Taxable investment securities 4	1,857,335			10,575		2.28	%	1,999,000		11,461		2.29	%
Total earning assets	8,856,904			95,390		4.37	%	8,481,721		92,174		4.37	%
Goodwill and intangibles	159,089							154,790
Non-earning assets	369,274							390,891
Total assets	$	9,385,267						$	9,027,402
Liabilities
Non-interest bearing deposits	$	1,970,654		$	—	—	%	$	1,863,389	$	—	—	%
NOW and DDA accounts	1,575,928			247		0.06	%	1,465,181		293		0.08	%
Savings accounts	1,015,108			146		0.06	%	863,764		104		0.05	%
Money market deposit accounts	1,490,198			565		0.15	%	1,406,718		553		0.16	%
Certificate accounts	953,527			1,333		0.57	%	1,071,055		1,564		0.59	%
Wholesale deposits 5	332,255			2,149		2.62	%	335,126		2,281		2.74	%
FHLB advances	271,225			1,510		2.23	%	308,040		1,652		2.12	%
Repurchase agreements and other borrowed funds	562,628			1,416		1.02	%	521,565		1,228		0.95	%
Total interest bearing liabilities	8,171,523			7,366		0.37	%	7,834,838		7,675		0.39	%
Other liabilities	81,419							96,701
Total liabilities	8,252,942							7,931,539
Stockholders’ Equity
Common stock	766							761
Paid-in capital	748,851							736,398
Retained earnings	389,798							351,536
Accumulated other comprehensive (loss) income	(7,090		)					7,168
Total stockholders’ equity	1,132,325							1,095,863
Total liabilities and stockholders’ equity	$	9,385,267						$	9,027,402
Net interest income (tax-equivalent)				$	88,024					$	84,499
Net interest spread (tax-equivalent)						4.00	%					3.98	%
Net interest margin (tax-equivalent)						4.03	%					4.01	%

__________

¹  Includes tax effect of $1.4 million and $832 thousand on tax-exempt municipal loan and lease income for the three months ended March 31, 2017 and 2016, respectively.

²  Total loans are gross of the allowance for loan and lease losses, net of unearned income and include loans held for sale. Non-accrual loans were included in the average volume for the entire period.

³  Includes tax effect of $6.1 million and $6.6 million on tax-exempt investment securities income for the three months ended March 31, 2017 and 2016, respectively.

⁴  Includes tax effect of $338 thousand and $352 thousand on federal income tax credits for the three months ended March 31, 2017 and 2016, respectively.

⁵  Wholesale deposits include brokered deposits classified as NOW, DDA, money market deposit and certificate accounts.

63

Rate/Volume Analysis

Net interest income can be evaluated from the perspective of relative dollars of change in each period. Interest income and interest expense, which are the components of net interest income, are shown in the following table on the basis of the amount of any increases (or decreases) attributable to changes in the dollar levels of the Company’s interest earning assets and interest bearing liabilities (“volume”) and the yields earned and paid on such assets and liabilities (“rate”). The change in interest income and interest expense attributable to changes in both volume and rates has been allocated proportionately to the change due to volume and the change due to rate.

	Three Months ended March 31,
	2017 vs. 2016
	Increase (Decrease) Due to:
(Dollars in thousands)	Volume			Rate		Net
Interest income
Residential real estate loans	$	(192	)	(175	)	(367	)
Commercial loans (tax-equivalent)	6,943			(943	)	6,000
Consumer and other loans	133			(42	)	91
Investment securities (tax-equivalent)	(2,292		)	(216	)	(2,508	)
Total interest income	4,592			(1,376	)	3,216
Interest expense
NOW and DDA accounts	18			(64	)	(46	)
Savings accounts	17			25		42
Money market deposit accounts	26			(14	)	12
Certificate accounts	(187		)	(44	)	(231	)
Wholesale deposits	(44		)	(88	)	(132	)
FHLB advances	(213		)	71		(142	)
Repurchase agreements and other borrowed funds	82			106		188
Total interest expense	(301		)	(8	)	(309	)
Net interest income (tax-equivalent)	$	4,893		(1,368	)	3,525

Net interest income (tax-equivalent) increased $3.5 million for the three months ended March 31, 2017 compared to the same period in 2016. The interest income for the current quarter increased over the prior year first quarter primarily from increased growth of the Company’s commercial loan portfolio. Total interest expense remained relatively flat compared to the prior year with the majority of the change due to a decrease in FHLB borrowings and certificate accounts.

Effect of inflation and changing prices

Accounting principles generally accepted in the United States of America (“GAAP”) often requires the measurement of financial position and operating results in terms of historical dollars, without consideration for change in relative purchasing power over time due to inflation. Virtually all assets of the Company are monetary in nature; therefore, interest rates generally have a more significant impact on a company’s performance than does the effect of inflation.

64

Item 3. Quantitative and Qualitative Disclosure about Market Risk

The Company’s assessment of market risk as of March 31, 2017 indicates there are no material changes in the quantitative and qualitative disclosures from those in the 2016 Annual Report.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company’s Chief Executive Officer and Chief Financial Officer have reviewed and evaluated the effectiveness of the Company’s disclosure controls and procedures (as required by Exchange Act Rules 240.13a-15(b) and 15d-14(c)) as of March 31, 2017. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Company’s current disclosure controls and procedures are effective and timely, providing them with material information relating to the Company required to be disclosed in the reports the Company files or submits under the Exchange Act.

Changes in Internal Controls

There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the first quarter of 2017, to which this report relates that have materially affected, or are reasonably likely to materially affect the Company’s internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

The Company is involved in various claims, legal actions and complaints which arise in the ordinary course of business. In the Company’s opinion, all such matters are adequately covered by insurance, are without merit or are of such kind, or involve such amounts, that unfavorable disposition would not have a material adverse effect on the financial condition or results of operations of the Company.

Item 1A. Risk Factors

The Company believes there have been no material changes from risk factors previously disclosed in the 2016 Annual Report. The risks and uncertainties described in the 2016 Annual Report should be carefully reviewed. These are not the only risks and uncertainties that the Company faces. Additional risks and uncertainties that the Company does not currently know about or that the Company currently believes are immaterial, or that the Company has not predicted, may also harm its business operations or adversely affect the Company. If any of these risks or uncertainties actually occurs, the Company’s business, financial condition, operating results or liquidity could be adversely affected.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(a) Not Applicable

(b) Not Applicable

(c) Not Applicable

65

Item 3. Defaults upon Senior Securities

(a) Not Applicable

(b) Not Applicable

Item 4. Mine Safety Disclosures

Not Applicable

Item 5. Other Information

(a) Not Applicable

(b) Not Applicable

Item 6. Exhibits

Exhibit 31.1 - Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes - Oxley Act of 2002

Exhibit 31.2 - Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes - Oxley Act of 2002

Exhibit 32 - Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes - Oxley Act of 2002

Exhibit 101 - The following financial information from Glacier Bancorp, Inc's Quarterly Report on Form 10-Q for the quarter ended March 31, 2017 is formatted in XBRL: (i) the Unaudited Condensed Consolidated Statements of Financial Condition, (ii) the Unaudited Condensed Consolidated Statements of Operations, (iii) the Unaudited Condensed Consolidated Statements of Stockholders’ Equity and Comprehensive Income, (iv) the Unaudited Condensed Consolidated Statements of Cash Flows, and (v) the Notes to Unaudited Condensed Consolidated Financial Statements.

66

SIGNATURES

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

	GLACIER BANCORP, INC.
May 2, 2017	/s/ Randall M. Chesler
	Randall M. Chesler
	President and CEO
May 2, 2017	/s/ Ron J. Copher
	Ron J. Copher
	Executive Vice President and CFO

67

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Randall M. Chesler, certify that:

1. I have reviewed this Quartely Report on Form 10-Q of Glacier Bancorp, Inc.

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

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

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

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

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

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

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

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

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

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

May 2, 2017	/s/ Randall M. Chesler
	Randall M. Chesler
	President/CEO

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Ron J. Copher, certify that:

1. I have reviewed this Quartely Report on Form 10-Q of Glacier Bancorp, Inc.

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

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

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

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

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

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

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

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

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

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

May 2, 2017	/s/ Ron J. Copher
	Ron J. Copher
	Executive Vice President/CFO

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Glacier Bancorp, Inc. (“Company”) on Form 10-Q for the period ended March 31, 2017, as filed with the Securities and Exchange Commission on the date hereof (“Report”), we, Randall M. Chesler, President and Chief Executive Officer, and Ron J. Copher, Executive Vice President and Chief Financial Officer, of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

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

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

May 2, 2017	/s/ Randall M. Chesler
	Randall M. Chesler
	President/CEO
May 2, 2017	/s/ Ron J. Copher
	Ron J. Copher
	Executive Vice President/CFO

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2017	Apr. 17, 2017
Document and Entity Information [Abstract]
Entity Registrant Name	GLACIER BANCORP INC
Entity Central Index Key	0000868671
Document Type	10-Q
Document Period End Date	Mar. 31, 2017
Amendment Flag	false
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q1
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		76,619,952

XML

Unaudited Condensed Consolidated Statements of Financial Condition - USD ($) $ in Thousands		Mar. 31, 2017	Dec. 31, 2016
Assets
Cash on hand and in banks		$ 124,501	$ 135,268
Federal funds sold		190	0
Interest bearing cash deposits		109,313	17,273
Cash and cash equivalents		234,004	152,541
Investment securities, available-for-sale		2,314,521	2,425,477
Investment securities, held-to-maturity		667,388	675,674
Total investment securities		2,981,909	3,101,151
Loans held for sale		25,649	72,927
Loans receivable	[1]	5,876,974	5,684,463
Allowance for loan and lease losses		(129,226)	(129,572)
Loans receivable, net		5,747,748	5,554,891
Premises and equipment, net		175,283	176,198
Other real estate owned		17,771	20,954
Accrued interest receivable		48,043	45,832
Deferred tax asset		64,575	67,121
Core deposit intangible, net		11,746	12,347
Goodwill		147,053	147,053
Non-marketable equity securities		23,944	25,550
Other assets		76,183	74,035
Total assets		9,553,908	9,450,600
Liabilities
Non-interest bearing deposits		2,049,476	2,041,852
Interest bearing deposits		5,430,681	5,330,427
Securities sold under agreements to repurchase		497,187	473,650
Federal Home Loan Bank advances		211,627	251,749
Other borrowed funds		8,894	4,440
Subordinated debentures		126,027	125,991
Accrued interest payable		3,467	3,584
Other liabilities		91,309	102,038
Total liabilities		8,418,668	8,333,731
Stockholders' Equity
Preferred shares, $0.01 par value per share, 1,000,000 shares authorized, none issued or outstanding		0	0
Common stock, $0.01 par value per share, 117,187,500 shares authorized		766	765
Paid-in capital		749,381	749,107
Retained earnings - substantially restricted		389,505	374,379
Accumulated other comprehensive loss		(4,412)	(7,382)
Total stockholders' equity		1,135,240	1,116,869
Total liabilities and stockholders' equity		$ 9,553,908	$ 9,450,600
Number of common stock shares issued and outstanding		76,619,952	76,525,402

[1] Includes net deferred fees, costs, premiums and discounts of $12,017,000 and $13,372,000 at March 31, 2017 and December 31, 2016, respectively.

XML

Unaudited Condensed Consolidated Statements of Financial Condition (Parenthetical) - $ / shares	Mar. 31, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Preferred shares, par value	$ 0.01	$ 0.01
Preferred shares, authorized	1,000,000	1,000,000
Preferred shares, issued	0	0
Preferred shares, outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	117,187,500	117,187,500

XML

Unaudited Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Interest Income
Investment securities	$ 21,939	$ 23,883
Residential real estate loans	7,918	8,285
Commercial loans	49,970	44,503
Consumer and other loans	7,801	7,710
Total interest income	87,628	84,381
Interest Expense
Deposits	4,440	4,795
Securities sold under agreements to repurchase	382	318
Federal Home Loan Bank advances	1,510	1,652
Other borrowed funds	15	18
Subordinated debentures	1,019	892
Total interest expense	7,366	7,675
Net Interest Income	80,262	76,706
Provision for loan losses	1,598	568
Net interest income after provision for loan losses	78,664	76,138
Non-Interest Income
Service charges and other fees	15,633	14,681
Miscellaneous loan fees and charges	980	1,021
Gain on sale of loans	6,358	5,992
(Loss) gain on sale of investments	(100)	108
Other income	2,818	2,450
Total non-interest income	25,689	24,252
Non-Interest Expense
Compensation and employee benefits	39,246	36,941
Occupancy and equipment	6,646	6,676
Advertising and promotions	1,973	2,125
Data processing	3,124	3,373
Other real estate owned	273	390
Regulatory assessments and insurance	1,061	1,508
Core deposit intangibles amortization	601	797
Other expenses	10,420	10,546
Total non-interest expense	63,344	62,356
Income Before Income Taxes	41,009	38,034
Federal and state income tax expense	9,754	9,352
Net Income	$ 31,255	$ 28,682
Basic earnings per share	$ 0.41	$ 0.38
Diluted earnings per share	0.41	0.38
Dividends declared per share	$ 0.21	$ 0.20
Average outstanding shares - basic	76,572,116	76,126,251
Average outstanding shares - diluted	76,633,283	76,173,417

XML

Unaudited Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Statement of Comprehensive Income [Abstract]
Net income	$ 31,255	$ 28,682
Other Comprehensive Income, Net of Tax
Unrealized gains on available-for-sale securities	3,113	13,598
Reclassification adjustment for losses (gains) included in net income	139	(61)
Net unrealized gains on available-for-sale securities	3,252	13,537
Tax effect	(1,260)	(5,244)
Net of tax amount	1,992	8,293
Unrealized gains (losses) on derivatives used for cash flow hedges	264	(9,928)
Reclassification adjustment for losses included in net income	1,332	1,829
Net unrealized gains (losses) on derivatives used for cash flow hedges	1,596	(8,099)
Tax effect	(618)	3,138
Net of tax amount	978	(4,961)
Total other comprehensive income, net of tax	2,970	3,332
Total Comprehensive Income	$ 34,225	$ 32,014

XML

Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands	Total	Common Stock	Paid-in Capital	Retained Earnings Substantially Restricted	Accumulated Other Comprehensive Income
Balance, beginning, shares at Dec. 31, 2015		76,086,288
Balance, beginning at Dec. 31, 2015	$ 1,076,650	$ 761	$ 736,368	$ 337,532	$ 1,989
Net income	28,682			28,682
Comprehensive income, accumulated other comprehensive income	3,332				3,332
Comprehensive income, total	32,014
Cash dividends declared	(15,281)			(15,281)
Stock issuances under stock incentive plans, shares		82,100
Stock issuances under stock incentive plans, value	0	$ 1	(1)
Stock-based compensation and related taxes	297		297
Balance, ending, shares at Mar. 31, 2016		76,168,388
Balance, ending at Mar. 31, 2016	$ 1,093,680	$ 762	736,664	350,933	5,321
Balance, beginning, shares at Dec. 31, 2016	76,525,402	76,525,402
Balance, beginning at Dec. 31, 2016	$ 1,116,869	$ 765	749,107	374,379	(7,382)
Net income	31,255			31,255
Comprehensive income, accumulated other comprehensive income	2,970				2,970
Comprehensive income, total	34,225
Cash dividends declared	(16,129)			(16,129)
Stock issuances under stock incentive plans, shares		94,550
Stock issuances under stock incentive plans, value	0	$ 1	(1)
Stock-based compensation and related taxes	$ 275		275
Balance, ending, shares at Mar. 31, 2017	76,619,952	76,619,952
Balance, ending at Mar. 31, 2017	$ 1,135,240	$ 766	$ 749,381	$ 389,505	$ (4,412)

XML

Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Cash dividends declared per share	$ 0.21	$ 0.20
Retained Earnings Substantially Restricted
Cash dividends declared per share	$ 0.21	$ 0.20

XML

Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Operating Activities
Net income	$ 31,255	$ 28,682
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	1,598	568
Net amortization of investment securities premiums and discounts	5,830	6,594
Net accretion of purchase accounting adjustments	(1,394)	(1,774)
Loans held for sale originated or acquired	(171,110)	(179,471)
Proceeds from sales of loans held for sale	231,318	202,605
Gain on sale of loans	(6,358)	(5,992)
Loss (gain) on sale of investments	100	(108)
Bank-owned life insurance income, net	(315)	(257)
Stock-based compensation	1,722	828
Net tax benefits from stock-based compensation	(1,117)	(253)
Depreciation of premises and equipment	3,720	3,730
(Gain) loss on sale of other real estate owned and write-downs, net	(928)	52
Amortization of core deposit intangibles	601	797
Amortization of investments in variable interest entities	730	255
Net increase in accrued interest receivable	(2,211)	(2,839)
Net decrease (increase) in other assets	1,093	(98)
Net (decrease) increase in accrued interest payable	(117)	91
Net (decrease) increase in other liabilities	(660)	2,823
Net cash provided by operating activities	93,757	56,233
Investing Activities
Sales of available-for-sale securities	0	20,539
Maturities, prepayments and calls of available-for-sale securities	110,475	156,779
Purchases of available-for-sale securities	(1,701)	(163,654)
Maturities, prepayments and calls of held-to-maturity securities	7,790	11,155
Purchases of held-to-maturity securities	0	(1,223)
Principal collected on loans	420,744	347,869
Loans originated or acquired	(620,407)	(465,644)
Net increase of premises and equipment and other real estate owned	(2,805)	(2,726)
Proceeds from sale of other real estate owned	4,156	4,457
Proceeds from sale of non-marketable equity securities	18,206	27,896
Purchases of non-marketable equity securities	(16,600)	(24,599)
Proceeds from bank-owned life insurance	437	294
Investments in variable interest entities	(3,865)	0
Net cash used in investing activities	(83,570)	(88,857)
Financing Activities
Net increase in deposits	107,888	71,218
Net increase in securities sold under agreements to repurchase	23,537	22,546
Net decrease in short-term Federal Home Loan Bank advances	(40,000)	(80,000)
Repayments of long-term Federal Home Loan Bank advances	(114)	(128)
Net increase in other borrowed funds	4,454	31
Cash dividends paid	(23,042)	(22,883)
Tax withholding payments for stock-based compensation	(1,447)	(552)
Net cash provided by (used in) financing activities	71,276	(9,768)
Net increase (decrease) in cash and cash equivalents	81,463	(42,392)
Cash and cash equivalents at beginning of period	152,541	193,253
Cash and cash equivalents at end of period	234,004	150,861
Supplemental Disclosure of Cash Flow Information
Cash paid during the period for interest	7,483	7,584
Cash paid during the period for income taxes	70	0
Supplemental Disclosure of Non-Cash Investing Activities
Sale and refinancing of other real estate owned	345	474
Transfer of loans to other real estate owned	390	178
Dividends declared but not paid	$ 16,224	$ 15,281

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Nature of Operations and Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Operations and Summary of Significant Accounting Policies

Nature of Operations and Summary of Significant Accounting Policies

General

Glacier Bancorp, Inc. (“Company”) is a Montana corporation headquartered in Kalispell, Montana. The Company provides a full range of banking services to individuals and businesses in Montana, Idaho, Wyoming, Colorado, Utah and Washington through its wholly-owned bank subsidiary, Glacier Bank (“Bank”). The Company offers a wide range of banking products and services, including transaction and savings deposits, real estate, commercial, agriculture and consumer loans and mortgage origination services. The Company serves individuals, small to medium-sized businesses, community organizations and public entities.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the Company’s financial condition as of March 31, 2017, the results of operations and comprehensive income for the three month periods ended March 31, 2017 and 2016, and changes in stockholders’ equity and cash flows for the three month periods ended March 31, 2017 and 2016. The condensed consolidated statement of financial condition of the Company as of December 31, 2016 has been derived from the audited consolidated statements of the Company as of that date.

The accompanying unaudited condensed consolidated financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. Operating results for the three months ended March 31, 2017 are not necessarily indicative of the results anticipated for the year ending December 31, 2017.

The Company is a defendant in legal proceedings arising in the normal course of business. In the opinion of management, the disposition of pending litigation will not have a material affect on the Company’s consolidated financial position, results of operations or liquidity.

Material estimates that are particularly susceptible to significant change include: 1) the determination of the allowance for loan and lease losses (“ALLL” or “allowance”); 2) the valuation of investment securities; 3) the valuation of real estate acquired in connection with foreclosures or in satisfaction of loans; and 4) the evaluation of goodwill impairment. For the determination of the ALLL and real estate valuation estimates, management obtains independent appraisals (new or updated) for significant items. Estimates relating to investment valuations are obtained from independent third parties. Estimates relating to the evaluation of goodwill for impairment are determined based on internal calculations using significant independent party inputs.

Principles of Consolidation

The consolidated financial statements of the Company include the parent holding company and the Bank. The Bank consists of thirteen bank divisions, a treasury division and an information technology division. The treasury division includes the Bank’s investment portfolio and wholesale borrowings and the information technology division includes the Bank’s internal data processing and information technology expenses. The Bank divisions operate under separate names, management teams and advisory directors. The Company considers the Bank to be its sole operating segment as the Bank 1) engages in similar bank business activity from which it earns revenues and incurs expenses; 2) the operating results of the Bank are regularly reviewed by the Chief Executive Officer (i.e., the chief operating decision maker) who makes decisions about resources to be allocated to the Bank; and 3) financial information is available for the Bank. All significant inter-company transactions have been eliminated in consolidation.

The Bank has subsidiary interests in variable interest entities (“VIE”) for which the Bank has both the power to direct the VIE’s significant activities and the obligation to absorb losses or right to receive benefits of the VIE that could potentially be significant to the VIE. These subsidiary interests are included in the Company’s consolidated financial statements. The parent holding company also owns non-bank subsidiaries that have issued trust preferred securities as Tier 1 capital instruments. The trust subsidiaries are not included in the Company’s consolidated financial statements. The Company's investments in the trust subsidiaries are included in non-marketable equity securities on the Company's statement of financial condition.

In August 2016, the Company completed its acquisition of Treasure State Bank (“TSB”), a community bank based in Missoula, Montana. The transaction was accounted for using the acquisition method, and its results of operations have been included in the Company’s consolidated financial statements as of the acquisition date.

Loans Receivable

Loans that are intended to be held-to-maturity are reported at the unpaid principal balance less net charge-offs and adjusted for deferred fees and costs on originated loans and unamortized premiums or discounts on acquired loans. Fees and costs on originated loans and premiums or discounts on acquired loans are deferred and subsequently amortized or accreted as a yield adjustment over the expected life of the loan utilizing the interest method. The objective of the interest method is to calculate periodic interest income at a constant effective yield. When a loan is paid off prior to maturity, the remaining fees and costs on originated loans and premiums or discounts on acquired loans are immediately recognized into interest income.

The Company’s loan segments, which are based on the purpose of the loan, include residential real estate, commercial, and consumer loans. The Company’s loan classes, a further disaggregation of segments, include residential real estate loans (residential real estate segment), commercial real estate and other commercial loans (commercial segment), and home equity and other consumer loans (consumer segment).

Loans that are thirty days or more past due based on payments received and applied to the loan are considered delinquent. Loans are designated non-accrual and the accrual of interest is discontinued when the collection of the contractual principal or interest is unlikely. A loan is typically placed on non-accrual when principal or interest is due and has remained unpaid for ninety days or more. When a loan is placed on non-accrual status, interest previously accrued but not collected is reversed against current period interest income. Subsequent payments on non-accrual loans are applied to the outstanding principal balance if doubt remains as to the ultimate collectability of the loan. Interest accruals are not resumed on partially charged-off impaired loans. For other loans on nonaccrual, interest accruals are resumed on such loans only when they are brought fully current with respect to interest and principal and when, in the judgment of management, the loans are estimated to be fully collectible as to both principal and interest.

The Company considers impaired loans to be the primary credit quality indicator for monitoring the credit quality of the loan portfolio. Loans are designated impaired when, based upon 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 and, therefore, the Company has serious doubts as to the ability of such borrowers to fulfill the contractual obligation. Impaired loans include non-performing loans (i.e., non-accrual loans and accruing loans ninety days or more past due) and accruing loans under ninety days past due where it is probable payments will not be received according to the loan agreement (e.g., troubled debt restructuring). Interest income on accruing impaired loans is recognized using the interest method. The Company measures impairment on a loan-by-loan basis in the same manner for each class within the loan portfolio. An insignificant delay or shortfall in the amounts of payments would not cause a loan or lease to be considered impaired. The Company determines the significance of payment delays and shortfalls on a case-by-case basis, taking into consideration all of the facts and circumstances surrounding the loan and the borrower, including the length and reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest due.

A restructured loan is considered a troubled debt restructuring (“TDR”) if the creditor, for economic or legal reasons related to the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider. The Company periodically enters into restructure agreements with borrowers whereby the loans were previously identified as TDRs. When such circumstances occur, the Company carefully evaluates the facts of the subsequent restructure to determine the appropriate accounting and under certain circumstances it may be acceptable not to account for the subsequently restructured loan as a TDR. When assessing whether a concession has been granted by the Company, any prior forgiveness on a cumulative basis is considered a continuing concession. A TDR loan is considered an impaired loan and a specific valuation allowance is established when the fair value of the collateral-dependent loan or present value of the loan’s expected future cash flows (discounted at the loan’s effective interest rate based on the original contractual rate) is lower than the carrying value of the impaired loan. The Company has made the following types of loan modifications, some of which were considered a TDR:

• reduction of the stated interest rate for the remaining term of the debt;

• extension of the maturity date(s) at a stated rate of interest lower than the current market rate for newly originated debt having similar risk characteristics; and

• reduction of the face amount of the debt as stated in the debt agreements.

The Company recognizes that while borrowers may experience deterioration in their financial condition, many continue to be creditworthy customers who have the willingness and capacity for debt repayment. In determining whether non-restructured or unimpaired loans issued to a single or related party group of borrowers should continue to accrue interest when the borrower has other loans that are impaired or are TDRs, the Company on a quarterly or more frequent basis performs an updated and comprehensive assessment of the willingness and capacity of the borrowers to timely and ultimately repay their total debt obligations, including contingent obligations. Such analysis takes into account current financial information about the borrowers and financially responsible guarantors, if any, including for example:

• analysis of global, i.e., aggregate debt service for total debt obligations;

• assessment of the value and security protection of collateral pledged using current market conditions and alternative market assumptions across a variety of potential future situations; and

• loan structures and related covenants.

For additional information relating to loans, see Note 3.

Allowance for Loan and Lease Losses

Based upon management’s analysis of the Company’s loan portfolio, the balance of the ALLL is an estimate of probable credit losses known and inherent within the Bank’s loan portfolio as of the date of the consolidated financial statements. The ALLL is analyzed at the loan class level and is maintained within a range of estimated losses. Determining the adequacy of the ALLL involves a high degree of judgment and is inevitably imprecise as the risk of loss is difficult to quantify. The determination of the ALLL and the related provision for loan losses is a critical accounting estimate that involves management’s judgments about known relevant internal and external environmental factors that affect loan losses. The balance of the ALLL is highly dependent upon management’s evaluations of borrowers’ current and prospective performance, appraisals and other variables affecting the quality of the loan portfolio. Individually significant loans and major lending areas are reviewed periodically to determine potential problems at an early date. Changes in management’s estimates and assumptions are reasonably possible and may have a material impact upon the Company’s consolidated financial statements, results of operations or capital.

Risk characteristics considered in the ALLL analysis applicable to each loan class within the Company's loan portfolio are as follows:

Residential Real Estate.  Residential real estate loans are secured by owner-occupied 1-4 family residences.  Repayment of these loans is primarily dependent on the personal income and credit rating of the borrowers.  Credit risk in these loans is impacted by economic conditions within the Company’s market areas that affect the value of the property securing the loans and affect the borrowers' personal incomes.  Mitigating risk factors for this loan class include a large number of borrowers, geographic dispersion of market areas and the loans are originated for relatively smaller amounts.

Commercial Real Estate.  Commercial real estate loans typically involve larger principal amounts, and repayment of these loans is generally dependent on the successful operation of the property securing the loan and/or the business conducted on the property securing the loan.  Credit risk in these loans is impacted by the creditworthiness of a borrower, valuation of the property securing the loan and conditions within the local economies in the Company’s diverse, geographic market areas.

Commercial.  Commercial loans consist of loans to commercial customers for use in financing working capital needs, equipment purchases and business expansions.  The loans in this category are repaid primarily from the cash flow of a borrower’s principal business operation.  Credit risk in these loans is driven by creditworthiness of a borrower and the economic conditions that impact the cash flow stability from business operations across the Company’s diverse, geographic market areas.

Home Equity.  Home equity loans consist of junior lien mortgages and first and junior lien lines of credit (revolving open-end and amortizing closed-end) secured by owner-occupied 1-4 family residences.  Repayment of these loans is primarily dependent on the personal income and credit rating of the borrowers.  Credit risk in these loans is impacted by economic conditions within the Company’s market areas that affect the value of the residential property securing the loans and affect the borrowers' personal incomes.  Mitigating risk factors for this loan class are a large number of borrowers, geographic dispersion of market areas and the loans are originated for terms that range from 10 years to 15 years.

Other Consumer.  The other consumer loan portfolio consists of various short-term loans such as automobile loans and loans for other personal purposes.  Repayment of these loans is primarily dependent on the personal income of the borrowers.  Credit risk is driven by consumer economic factors (such as unemployment and general economic conditions in the Company’s diverse, geographic market area) and the creditworthiness of a borrower.

The ALLL consists of a specific valuation allowance component and a general valuation allowance component. The specific component relates to loans that are determined to be impaired and individually evaluated for impairment. The Company measures impairment on a loan-by-loan basis based on the present value of expected future cash flows discounted at the loan’s effective interest rate, except when it is determined that repayment of the loan is expected to be provided solely by the underlying collateral. For impairment based on expected future cash flows, the Company considers all information available as of a measurement date, including past events, current conditions, potential prepayments, and estimated cost to sell when such costs are expected to reduce the cash flows available to repay or otherwise satisfy the loan. For alternative ranges of cash flows, the likelihood of the possible outcomes is considered in determining the best estimate of expected future cash flows. The effective interest rate for a loan restructured in a TDR is based on the original contractual rate. For collateral-dependent loans and real estate loans for which foreclosure or a deed-in-lieu of foreclosure is probable, impairment is measured by the fair value of the collateral, less estimated cost to sell. The fair value of the collateral is determined primarily based upon appraisal or evaluation of the underlying real property value.

The general valuation allowance component relates to probable credit losses inherent in the balance of the loan portfolio based on historical loss experience, adjusted for changes in trends and conditions of qualitative or environmental factors. The historical loss experience is based on the previous twelve quarters loss experience by loan class adjusted for risk characteristics in the existing loan portfolio. The same trends and conditions are evaluated for each class within the loan portfolio; however, the risk characteristics are weighted separately at the individual class level based on the Company’s judgment and experience.

The changes in trends and conditions evaluated for each class within the loan portfolio include the following:

• Changes in lending policies and procedures, including changes in underwriting standards and collection, charge-off, and recovery practices not considered elsewhere in estimating credit losses;

• Changes in global, national, regional, and local economic and business conditions and developments that affect the collectability of the portfolio, including the condition of various market segments;

• Changes in the nature and volume of the portfolio and in the terms of loans;

• Changes in experience, ability, and depth of lending management and other relevant staff;

• Changes in the volume and severity of past due and nonaccrual loans;

• Changes in the quality of the Company’s loan review system;

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

• The existence and effect of any concentrations of credit, and changes in the level of such concentrations; and

• The effect of other external factors such as competition and legal and regulatory requirements on the level of estimated credit losses in the Company’s existing portfolio.

The ALLL is increased by provisions for loan losses which are charged to expense. The portions of loan balances determined by management to be uncollectible are charged off as a reduction of the ALLL and recoveries of amounts previously charged off are credited as an increase to the ALLL. The Company’s charge-off policy is consistent with bank regulatory standards. Consumer loans generally are charged off when the loan becomes over 120 days delinquent. Real estate acquired as a result of foreclosure or by deed-in-lieu of foreclosure is classified as real estate owned until such time as it is sold.

At acquisition date, the assets and liabilities of acquired banks are recorded at their estimated fair values which results in no ALLL carried over from acquired banks. Subsequent to acquisition, an allowance will be recorded on the acquired loan portfolios for further credit deterioration, if any.

Reclassifications

Certain reclassifications have been made to the 2016 financial statements to conform to the 2017 presentation.

Impact of Recent Authoritative Accounting Guidance

The Accounting Standards Codification^™ (“ASC”) is the Financial Accounting Standards Board’s (“FASB”) officially recognized source of authoritative GAAP applicable to all public and non-public non-governmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under the authority of the federal securities laws are also sources of authoritative GAAP for the Company as an SEC registrant. All other accounting literature is non-authoritative. The following paragraphs provide descriptions of recently adopted or newly issued but not yet effective accounting standards that could have a material effect on the Company’s financial position or results of operations.

In March 2017, FASB amended FASB ASC Subtopic 310-20, Receivables-Nonrefundable Fees and Other Costs. The amendments in the Update shorten the amortization period for certain callable debt securities held at a premium. Specifically, the amendments require the premium to be amortized to the earliest call date instead of the maturity date. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. The amendments are effective for public business entities for the first interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted and if adopted in an interim period, any adjustments should be reflected as of the beginning of the year that includes the interim period. The entity should apply the amendments on a modified retrospective basis through a cumulative-effective adjustment directly to retained earnings as of the beginning of the period of adoption. The Company has premiums on debt securities that are currently being amortized to the maturity date, primarily in state and local governments category. The Company is currently evaluating the amount of the premium associated with debt securities that will be impacted by the amendments and whether it will early adopt. The accounting policies and procedures will be modified after the Company has fully evaluated the standard, although, significant changes are not expected.

In January 2017, FASB amended FASB ASC Topic 350, Simplifying the Test for Goodwill. The amendments in the Update simplify the measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Instead, under these amendments, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss should not exceed the total amount of goodwill allocated to that reporting unit. The amendments are effective for public business entities for the first interim and annual reporting periods beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company has goodwill from prior business combinations and performs an annual impairment test or more frequently if changes or circumstances occur that would more-likely-than-not reduce the fair value of the reporting unit below its carrying value. During the third quarter of 2016, the Company performed its impairment assessment and determined the fair value of the aggregated reporting units exceed the carrying value, such that the Company’s goodwill was not considered impaired. Although the Company cannot anticipate future goodwill impairment assessments, based on the most recent assessment, it is unlikely that an impairment amount would need to be calculated and, therefore, the Company does not anticipate a material impact from these amendments to the Company’s financial position and results of operations. The current accounting policies and processes are not anticipated to change, except for the elimination of the Step 2 analysis. For additional information regarding goodwill impairment testing, see Note 4.

In June 2016, FASB amended FASB ASC Topic 326, Financial Instruments - Credit Losses. The amendments in this Update replace the incurred loss model with a methodology that reflects expected credit losses over the life of the loan and requires consideration of a broader range of reasonable and supportable information to calculate credit loss estimates. The amendments are effective for public business entities for the first interim and annual reporting periods beginning after December 15, 2019. The Company is currently evaluating the impact of these amendments to the Company’s financial position and results of operations and currently does not know or cannot reasonably quantify the impact of the adoption of the amendments as a result of the complexity and extensive changes from the amendments. The ALLL is a material estimate of the Company and given the change from an incurred loss model to a methodology that considers the credit loss over the life of the loan, there is the potential for an increase in the ALLL at adoption date. The Company is anticipating a significant change in the processes and procedures to calculate the ALLL, including changes in assumptions and estimates to consider expected credit losses over the life of the loan versus the current accounting practice that utilizes the incurred loss model. The Company will also develop new procedures for determining an allowance for credit losses relating to held-to-maturity investment securities. In addition, the current accounting policy and procedures for other-than-temporary impairment on available-for-sale investment securities will be replaced with an allowance approach. The Company is expecting to begin developing and implementing processes and procedures during the next two years to ensure it is fully compliant with the amendments at adoption date. For additional information on the allowance for loan losses, see Note 3.

In March 2016, FASB amended FASB ASC Topic 718, Compensation - Stock Compensation. The amendments in this Update address certain aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification of awards on the statement of cash flows. The amendments were effective for public business entities for the first interim and annual reporting periods beginning after December 15, 2016 and the Company adopted the amendments as of January 1, 2017. The amendments require entities to recognize all income tax effects related to share-based payment awards in the statement of operations when the awards vest or are settled. Previously, income tax benefits at the settlement of awards were reported as increases (or decreases) to additional paid-in capital to the extent that those benefits were greater than (or less than) the income tax benefits recognized in earnings during the awards’ vesting periods. Such amounts are to be classified as an operating activity in the statement of cash flows instead of the prior accounting treatment, which required it to be classified as both an operating and a financing activity. The Company has elected to apply this classification change on a retrospective basis. Also in connection with the adoption of the Update, the Company has elected to change its accounting policy to recognize forfeitures as they occur. The requirement to report income tax effects in earnings has been applied to the settlement of awards on a prospective basis and the impact of applying the guidance reduced reported income tax expense for the three month period ended March 31, 2017 by $537,000, or approximately $0.01 per diluted common share. The implementation of the remaining provisions of the Update did not have a significant impact on the Company’s consolidated financial statements.

In February 2016, FASB amended FASB ASC Topic 842, Leases. The amendments in this Update address several aspects of lease accounting with the significant change being the recognition of lease assets and lease liabilities for leases previously classified as operating leases. The amendments are effective for public business entities for the first interim and annual reporting periods beginning after December 15, 2018, and early adoption is permitted. The Company has several lease agreements for which the amendments will require the Company to recognize a lease liability to make lease payments and a right-of-use asset which will represent its right to use the underlying asset for the lease term. The Company is currently reviewing the amendments to ensure it is fully compliant by the adoption date and doesn’t expect to early adopt. As permitted by the amendments, the Company is anticipating electing an accounting policy to not recognize lease assets and lease liabilities for leases with a term of twelve months or less. The impact is not expected to have a material effect on the Company’s financial position or results of operations since the Company does not have a material amount of lease agreements. The Company is currently in the process of fully evaluating the amendments and will subsequently implement new processes which are not expected to significantly change since the Company already has processes for certain lease agreements that recognize the lease assets and lease liabilities. In addition, the Company will change its current accounting policies to comply with the amendments with such changes as mentioned above.

In January 2016, FASB amended FASB ASC Topic 825, Financial Instruments. The amendments in this Update address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The amendments are effective for public business entities for the first interim and annual reporting periods beginning after December 15, 2017. Early adoption is only permitted under certain circumstances outlined in the amendments. A reporting entity should apply the amendments by means of a cumulative-effect adjustment to the Company’s statement of financial condition as of the beginning of the reporting year of adoption. The amendments will impact the Company in a few areas including requiring equity investments (with certain exclusions) to be measured at fair value with the changes recognized in net income, requirement to utilize an exit price when measuring the fair value of financial instruments, additional disclosures related to other comprehensive income, evaluation of a valuation allowance on a deferred tax asset related to available-for-sale investment securities in combination with the entity’s other deferred tax assets, and other disclosure changes. The Company is currently evaluating the impact of these amendments, but does not expect them to have a material material effect on the Company’s financial position or results of operations since it does not have a material amount of equity securities or a valuation allowance. However, the amendments will have an impact on certain items that are disclosed at fair value that are not currently utilizing the exit price notion when measuring fair value. As of March 31, 2017, the Company cannot quantify the change in the fair value of such disclosures since the Company is currently evaluating the full impact of the Update and is in the planning stages of developing appropriate procedures and processes to comply with the disclosure requirements of such amendments. The current accounting policies and procedures will be modified after the Company has fully evaluated the standard to comply with the accounting changes mentioned above.

In May 2014, FASB amended FASB ASC Topic 606, Revenue from Contracts with Customers. The amendments clarify the principals for recognizing revenue and develop a common revenue standard among industries. The new guidance establishes the following core principal: 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 goods or services. Five steps are provided for a company or organization to follow to achieve such core principle. The new guidance also includes a cohesive set of disclosure requirements that will provide users of financial statements with comprehensive information about the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The entity should apply the amendments using one of two retrospective methods described in the amendment. Accounting Standards Update No. 2015-14, Revenue from Contracts with Customers (Topic 606) delayed the effective date for public entities to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Several subsequent amendments have been issued that provide clarifying guidance and are effective with the adoption of the original Update. Early application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company is in its preliminary stages of evaluating the impact of these amendments, although it doesn’t expect the amendments to have a significant impact to the Company’s financial position or results of operation. The amendments could potentially impact the accounting procedures and processes over the recognition of certain revenue sources, including, but not limited to, non-interest income. The Company is expecting to begin developing processes and procedures during 2017 to ensure it is fully compliant with these amendments at the date of adoption.

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Investment Securities

3 Months Ended

Mar. 31, 2017

Investments, Debt and Equity Securities [Abstract]

Investment Securities

Investment Securities

The following tables present the amortized cost, the gross unrealized gains and losses and the fair value of the Company’s investment securities:

	March 31, 2017
	Amortized Cost		Gross Unrealized			Fair Value
(Dollars in thousands)			Gains	Losses
Available-for-sale
U.S. government and federal agency	$	37,598	26	(208	)	37,416
U.S. government sponsored enterprises	19,551		31	(46	)	19,536
State and local governments	750,443		21,463	(9,739	)	762,167
Corporate bonds	443,012		1,274	(585	)	443,701
Residential mortgage-backed securities	954,072		2,959	(7,940	)	949,091
Commercial mortgage-backed securities	103,918		26	(1,334	)	102,610
Total available-for-sale	2,308,594		25,779	(19,852	)	2,314,521
Held-to-maturity
State and local governments	667,388		21,125	(8,118	)	680,395
Total held-to-maturity	667,388		21,125	(8,118	)	680,395
Total investment securities	$	2,975,982	46,904	(27,970	)	2,994,916

	December 31, 2016
	Amortized Cost		Gross Unrealized			Fair Value
(Dollars in thousands)			Gains	Losses
Available-for-sale
U.S. government and federal agency	$	39,554	15	(162	)	39,407
U.S. government sponsored enterprises	19,557		55	(42	)	19,570
State and local governments	775,395		20,941	(9,963	)	786,373
Corporate bonds	471,569		1,175	(793	)	471,951
Residential mortgage-backed securities	1,014,518		2,744	(9,747	)	1,007,515
Commercial mortgage-backed securities	102,209		30	(1,578	)	100,661
Total available-for-sale	2,422,802		24,960	(22,285	)	2,425,477
Held-to-maturity
State and local governments	675,674		21,400	(7,985	)	689,089
Total held-to-maturity	675,674		21,400	(7,985	)	689,089
Total investment securities	$	3,098,476	46,360	(30,270	)	3,114,566

The following table presents the amortized cost and fair value of available-for-sale and held-to-maturity securities by contractual maturity at March 31, 2017. Actual maturities may differ from expected or contractual maturities since issuers have the right to prepay obligations with or without prepayment penalties.

	March 31, 2017
	Available-for-Sale			Held-to-Maturity
(Dollars in thousands)	Amortized Cost		Fair Value	Amortized Cost	Fair Value
Due within one year	$	146,875	147,136	—	—
Due after one year through five years	393,309		394,219	593	605
Due after five years through ten years	204,217		207,961	57,405	58,611
Due after ten years	506,203		513,504	609,390	621,179
	1,250,604		1,262,820	667,388	680,395
Mortgage-backed securities 1	1,057,990		1,051,701	—	—
Total	$	2,308,594	2,314,521	667,388	680,395

__________

¹Mortgage-backed securities, which have prepayment provisions, are not assigned to maturity categories due to fluctuations in their prepayment speeds.

Proceeds from sales and calls of investment securities and the associated gains and losses that have been included in earnings are listed below:

	Three Months ended
(Dollars in thousands)	March 31, 2017			March 31, 2016
Available-for-sale
Proceeds from sales and calls of investment securities	$	8,491		58,623
Gross realized gains 1	10			800
Gross realized losses 1	(149		)	(739	)
Held-to-maturity
Proceeds from calls of investment securities	7,790			11,155
Gross realized gains 1	81			47
Gross realized losses 1	(42		)	—

__________

¹The gain or loss on the sale or call of each investment security is determined by the specific identification method.

Investment securities with an unrealized loss position are summarized as follows:

	March 31, 2017
	Less than 12 Months				12 Months or More			Total
(Dollars in thousands)	Fair Value		Unrealized Loss		Fair Value	Unrealized Loss		Fair Value	Unrealized Loss
Available-for-sale
U.S. government and federal agency	$	4,527	(42	)	22,972	(166	)	27,499	(208	)
U.S. government sponsored enterprises	6,048		(46	)	—	—		6,048	(46	)
State and local governments	208,261		(4,716	)	78,082	(5,023	)	286,343	(9,739	)
Corporate bonds	142,028		(575	)	6,128	(10	)	148,156	(585	)
Residential mortgage-backed securities	636,458		(7,670	)	27,561	(270	)	664,019	(7,940	)
Commercial mortgage-backed securities	100,570		(1,334	)	—	—		100,570	(1,334	)
Total available-for-sale	$	1,097,892	(14,383	)	134,743	(5,469	)	1,232,635	(19,852	)
Held-to-maturity
State and local governments	$	105,671	(1,644	)	85,782	(6,474	)	191,453	(8,118	)
Total held-to-maturity	$	105,671	(1,644	)	85,782	(6,474	)	191,453	(8,118	)

	December 31, 2016
	Less than 12 Months				12 Months or More			Total
(Dollars in thousands)	Fair Value		Unrealized Loss		Fair Value	Unrealized Loss		Fair Value	Unrealized Loss
Available-for-sale
U.S. government and federal agency	$	6,718	(24	)	26,239	(138	)	32,957	(162	)
U.S. government sponsored enterprises	6,049		(42	)	—	—		6,049	(42	)
State and local governments	222,700		(4,949	)	81,783	(5,014	)	304,483	(9,963	)
Corporate bonds	174,821		(774	)	6,141	(19	)	180,962	(793	)
Residential mortgage-backed securities	688,811		(9,079	)	29,957	(668	)	718,768	(9,747	)
Commercial mortgage-backed securities	89,298		(1,578	)	—	—		89,298	(1,578	)
Total available-for-sale	$	1,188,397	(16,446	)	144,120	(5,839	)	1,332,517	(22,285	)
Held-to-maturity
State and local governments	$	117,912	(1,712	)	86,601	(6,273	)	204,513	(7,985	)
Total held-to-maturity	$	117,912	(1,712	)	86,601	(6,273	)	204,513	(7,985	)

Based on an analysis of its investment securities with unrealized losses as of March 31, 2017 and December 31, 2016, the Company determined that none of such securities had other-than-temporary impairment and the unrealized losses were primarily the result of interest rate changes and market spreads subsequent to acquisition. The fair value of the investment securities is expected to recover as payments are received and the securities approach maturity. At March 31, 2017, management determined that it did not intend to sell investment securities with unrealized losses, and there was no expected requirement to sell any of its investment securities with unrealized losses before recovery of their amortized cost.

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Loans Receivable, Net

3 Months Ended

Mar. 31, 2017

Receivables [Abstract]

Loans Receivable, Net

Loans Receivable, Net

The Company’s loan portfolio is comprised of three segments: residential real estate, commercial, and consumer and other loans. The loan segments are further disaggregated into the following classes: residential real estate, commercial real estate, other commercial, home equity and other consumer loans. The following table presents loans receivable for each portfolio class of loans:

	At or for the Three Months ended			At or for the Year ended
(Dollars in thousands)	March 31, 2017			December 31, 2016
Residential real estate loans	$	685,458		674,347
Commercial loans
Real estate	3,056,372			2,990,141
Other commercial	1,462,110			1,342,250
Total	4,518,482			4,332,391
Consumer and other loans
Home equity	433,554			434,774
Other consumer	239,480			242,951
Total	673,034			677,725
Loans receivable 1	5,876,974			5,684,463
Allowance for loan and lease losses	(129,226		)	(129,572	)
Loans receivable, net	$	5,747,748		5,554,891
Weighted-average interest rate on loans (tax-equivalent)	4.73		%	4.77	%

__________

¹  Includes net deferred fees, costs, premiums and discounts of $12,017,000 and $13,372,000 at March 31, 2017 and December 31, 2016, respectively.

The following tables summarize the activity in the ALLL by portfolio segment:

	Three Months ended March 31, 2017
(Dollars in thousands)	Total			Residential Real Estate		Commercial Real Estate		Other Commercial		Home Equity		Other Consumer
Balance at beginning of period	$	129,572		12,436		65,773		37,823		7,572		5,968
Provision for loan losses	1,598			(926	)	(370	)	1,621		129		1,144
Charge-offs	(4,229		)	(22	)	(888	)	(471	)	(96	)	(2,752	)
Recoveries	2,285			47		238		184		74		1,742
Balance at end of period	$	129,226		11,535		64,753		39,157		7,679		6,102

	Three Months ended March 31, 2016
(Dollars in thousands)	Total			Residential Real Estate		Commercial Real Estate		Other Commercial		Home Equity		Other Consumer
Balance at beginning of period	$	129,697		14,427		67,877		32,525		8,998		5,870
Provision for loan losses	568			(1,149	)	(873	)	3,720		(793	)	(337	)
Charge-offs	(1,163		)	(100	)	(253	)	(324	)	(229	)	(257	)
Recoveries	969			18		295		133		173		350
Balance at end of period	$	130,071		13,196		67,046		36,054		8,149		5,626

The following tables disclose the balance in the ALLL and the recorded investment in loans by portfolio segment:

	March 31, 2017
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Allowance for loan and lease losses
Individually evaluated for impairment	$	6,787	245	545	5,047	551	399
Collectively evaluated for impairment	122,439		11,290	64,208	34,110	7,128	5,703
Total allowance for loan and lease losses	$	129,226	11,535	64,753	39,157	7,679	6,102
Loans receivable
Individually evaluated for impairment	$	135,086	13,048	85,452	27,050	6,449	3,087
Collectively evaluated for impairment	5,741,888		672,410	2,970,920	1,435,060	427,105	236,393
Total loans receivable	$	5,876,974	685,458	3,056,372	1,462,110	433,554	239,480

	December 31, 2016
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Allowance for loan and lease losses
Individually evaluated for impairment	$	6,881	856	922	4,419	296	388
Collectively evaluated for impairment	122,691		11,580	64,851	33,404	7,276	5,580
Total allowance for loan and lease losses	$	129,572	12,436	65,773	37,823	7,572	5,968
Loans receivable
Individually evaluated for impairment	$	130,263	11,612	85,634	23,950	5,934	3,133
Collectively evaluated for impairment	5,554,200		662,735	2,904,507	1,318,300	428,840	239,818
Total loans receivable	$	5,684,463	674,347	2,990,141	1,342,250	434,774	242,951

Substantially all of the Company’s loans receivable are with customers in the Company’s geographic market areas. Although the Company has a diversified loan portfolio, a substantial portion of its customers’ ability to honor their obligations is dependent upon the economic performance in the Company’s market areas.

The following tables disclose information related to impaired loans by portfolio segment:

	At or for the Three Months ended March 31, 2017
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Loans with a specific valuation allowance
Recorded balance	$	19,877	2,891	5,279	10,053	546	1,108
Unpaid principal balance	20,139		2,955	5,285	10,190	559	1,150
Specific valuation allowance	6,787		245	545	5,047	551	399
Average balance	21,003		2,825	7,204	9,434	440	1,100
Loans without a specific valuation allowance
Recorded balance	$	115,209	10,157	80,173	16,997	5,903	1,979
Unpaid principal balance	138,436		11,224	98,480	19,350	7,323	2,059
Average balance	111,672		9,505	78,339	16,067	5,751	2,010
Total
Recorded balance	$	135,086	13,048	85,452	27,050	6,449	3,087
Unpaid principal balance	158,575		14,179	103,765	29,540	7,882	3,209
Specific valuation allowance	6,787		245	545	5,047	551	399
Average balance	132,675		12,330	85,543	25,501	6,191	3,110

	At or for the Year ended December 31, 2016
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Loans with a specific valuation allowance
Recorded balance	$	22,128	2,759	9,129	8,814	334	1,092
Unpaid principal balance	22,374		2,825	9,130	8,929	345	1,145
Specific valuation allowance	6,881		856	922	4,419	296	388
Average balance	26,745		4,942	10,441	9,840	257	1,265
Loans without a specific valuation allowance
Recorded balance	$	108,135	8,853	76,505	15,136	5,600	2,041
Unpaid principal balance	131,059		9,925	94,180	17,724	7,120	2,110
Average balance	108,827		12,858	72,323	15,537	6,004	2,105
Total
Recorded balance	$	130,263	11,612	85,634	23,950	5,934	3,133
Unpaid principal balance	153,433		12,750	103,310	26,653	7,465	3,255
Specific valuation allowance	6,881		856	922	4,419	296	388
Average balance	135,572		17,800	82,764	25,377	6,261	3,370

Interest income recognized on impaired loans for the three months ended March 31, 2017 and 2016 was not significant.

The following tables present an aging analysis of the recorded investment in loans by portfolio segment:

	March 31, 2017
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Accruing loans 30-59 days past due	$	27,122	5,255	11,294	7,657	1,555	1,361
Accruing loans 60-89 days past due	12,038		431	8,100	2,259	641	607
Accruing loans 90 days or more past due	3,028		—	203	2,441	336	48
Non-accrual loans	50,674		5,949	30,277	8,301	5,619	528
Total past due and non-accrual loans	92,862		11,635	49,874	20,658	8,151	2,544
Current loans receivable	5,784,112		673,823	3,006,498	1,441,452	425,403	236,936
Total loans receivable	$	5,876,974	685,458	3,056,372	1,462,110	433,554	239,480

	December 31, 2016
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Accruing loans 30-59 days past due	$	20,599	6,338	5,079	5,388	2,439	1,355
Accruing loans 60-89 days past due	5,018		1,398	754	1,352	844	670
Accruing loans 90 days or more past due	1,099		266	145	283	191	214
Non-accrual loans	49,332		4,528	30,216	8,817	5,240	531
Total past due and non-accrual loans	76,048		12,530	36,194	15,840	8,714	2,770
Current loans receivable	5,608,415		661,817	2,953,947	1,326,410	426,060	240,181
Total loans receivable	$	5,684,463	674,347	2,990,141	1,342,250	434,774	242,951

The following tables present TDRs that occurred during the periods presented and the TDRs that occurred within the previous twelve months that subsequently defaulted during the periods presented:

	Three Months ended March 31, 2017
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
TDRs that occurred during the period
Number of loans	10		2	2	4	1	1
Pre-modification recorded balance	$	9,555	280	582	8,530	153	10
Post-modification recorded balance	$	9,552	280	582	8,530	153	7
TDRs that subsequently defaulted
Number of loans	2		—	—	1	—	1
Recorded balance	$	25	—	—	18	—	7

	Three Months ended March 31, 2016
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
TDRs that occurred during the period
Number of loans	3		—	1	1	1	—
Pre-modification recorded balance	$	8,959	—	56	8,755	148	—
Post-modification recorded balance	$	8,959	—	56	8,755	148	—
TDRs that subsequently defaulted
Number of loans	—		—	—	—	—	—
Recorded balance	$	—	—	—	—	—	—

The modifications for the TDRs that occurred during the three months ended March 31, 2017 and 2016 included one or a combination of the following: an extension of the maturity date, a reduction of the interest rate or a reduction in the principal amount.

In addition to the TDRs that occurred during the period provided in the preceding tables, the Company had TDRs with pre-modification loan balances of $514,000 and $210,000 for the three months ended March 31, 2017 and 2016, respectively, for which other real estate owned (“OREO”) was received in full or partial satisfaction of the loans. The majority of such TDRs were in commercial real estate and residential real estate for the three months ended March 31, 2017 and 2016, respectively. At March 31, 2017 and December 31, 2016, the Company had $2,532,000 and $1,770,000, respectively, of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process. At March 31, 2017 and December 31, 2016, the Company had $2,354,000 and $2,699,000, respectively, of OREO secured by residential real estate properties.

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Goodwill

3 Months Ended

Mar. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

Goodwill

There were no changes in the carrying value of goodwill during the three months ended March 31, 2017 and 2016. The gross carrying value of goodwill and the accumulated impairment charge consists of the following:

(Dollars in thousands)	March 31, 2017			December 31, 2016
Gross carrying value	$	187,212		187,212
Accumulated impairment charge 1	(40,159		)	(40,159	)
Net carrying value	$	147,053		147,053

__________

¹ A goodwill impairment charge was recognized in 2011 and was due to high levels of volatility and dislocation in bank stock prices nationwide.

The Company performed its annual goodwill impairment test during the third quarter of 2016 and determined the fair value of the aggregated reporting units exceeded the carrying value, such that the Company’s goodwill was not considered impaired. Changes in the economic environment, operations of the aggregated reporting units, or other factors could result in the decline in the fair value of the aggregated reporting units which could result in a goodwill impairment in the future.

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Variable Interest Entities

3 Months Ended

Mar. 31, 2017

Equity Method Investments and Joint Ventures [Abstract]

Variable Interest Entities

Variable Interest Entities

A VIE is a partnership, limited liability company, trust or other legal entity that meets one of the following criteria: 1) the entity’s equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support from other parties; 2) the holders of the equity investment at risk, as a group, lack the characteristics of a controlling financial interest; and 3) the voting rights of some holders of the equity investment at risk are disproportionate to their obligation to absorb losses or receive returns, and substantially all of the activities are conducted on behalf of the holder of equity investment at risk with disproportionately few voting rights. A VIE must be consolidated by the Company if it is deemed to be the primary beneficiary, which is the party involved with the VIE that has both: 1) the power to direct the activities of the VIE that most significantly affect the VIE’s economic performance; and 2) the obligation to absorb the losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

The Company’s VIEs are regularly monitored to determine if any reconsideration events have occurred that could cause the primary beneficiary status to change. A previously unconsolidated VIE is consolidated when the Company becomes the primary beneficiary. A previously consolidated VIE is deconsolidated when the Company ceases to be the primary beneficiary or the entity is no longer a VIE.

Consolidated Variable Interest Entities

The Company has equity investments in Certified Development Entities (“CDE”) which have received allocations of New Markets Tax Credits (“NMTC”). The NMTC program provides federal tax incentives to investors to make investments in distressed communities and promotes economic improvements through the development of successful businesses in these communities. The NMTC is available to investors over a seven-year period and is subject to recapture if certain events occur during such period. The maximum exposure to loss in the CDEs is the amount of equity invested and credit extended by the Company. However, the Company has credit protection in the form of indemnification agreements, guarantees, and collateral arrangements. The Company has evaluated the variable interests held by the Company in each CDE (NMTC) investment and determined the Company does not individually meet the characteristics of a primary beneficiary; however, the related-party group does meet the criteria as a group and substantially all of the activities of the CDEs either involve or are conducted on behalf of the Company. As a result, the Company is the primary beneficiary of the CDEs and their assets, liabilities, and results of operations are included in the Company’s consolidated financial statements. The primary activities of the CDEs are recognized in commercial loans interest income and other borrowed funds interest expense on the Company’s statements of operations and the federal income tax credit allocations from the investments are recognized in the Company’s statements of operations as a component of income tax expense. Such related cash flows are recognized in loans originated, principal collected on loans and change in other borrowed funds.

The following table summarizes the carrying amounts of the consolidated VIEs’ assets and liabilities included in the Company’s statements of financial condition and are adjusted for intercompany eliminations. All assets presented can be used only to settle obligations of the consolidated VIEs and all liabilities presented consist of liabilities for which creditors and other beneficial interest holders therein have no recourse to the general credit of the Company.

(Dollars in thousands)	March 31, 2017		December 31, 2016
Assets
Loans receivable	$	43,143	36,950
Accrued interest receivable	125		120
Other assets	2,095		1,984
Total assets	$	45,363	39,054
Liabilities
Other borrowed funds	$	8,577	4,105
Accrued interest payable	6		2
Other liabilities	22		27
Total liabilities	$	8,605	4,134

Unconsolidated Variable Interest Entities

The Company has equity investments in Low-Income Housing Tax Credit (“LIHTC”) partnerships with carrying values of $8,616,000 and $7,282,000 as of March 31, 2017 and December 31, 2016, respectively. The LIHTCs are indirect federal subsidies to finance low-income housing and are used in connection with both newly constructed and renovated residential rental buildings. Once a project is placed in service, it is generally eligible for the tax credit for ten consecutive years. To continue generating the tax credit and to avoid tax credit recapture, a LIHTC building must satisfy specific low-income housing compliance rules for a full fifteen-year period. The maximum exposure to loss in the VIEs is the amount of equity invested and credit extended by the Company. However, the Company has credit protection in the form of indemnification agreements, guarantees, and collateral arrangements. The Company has evaluated the variable interests held by the Company in each LIHTC investment and determined that the Company does not have controlling financial interests in such investments, and is not the primary beneficiary. The Company reports the investments in the unconsolidated LIHTCs as other assets on the Company’s statements of financial condition. Total unfunded contingent commitments related to the Company’s LIHTC investments totaled $18,095,000 at March 31, 2017, and the Company expects to fulfill the majority of these commitments during 2017. There were no impairment losses on the Company’s LIHTC investments during the three months ended March 31, 2017.

The Company has elected to use the proportional amortization method for the amortization of all eligible LIHTC investments and amortization expense is recognized as a component of income tax expense. The following table summarizes the amortization expense and the amount of tax credits and other tax benefits recognized for qualified affordable housing project investments during the periods presented.

	Three Months ended
(Dollars in thousands)	March 31, 2017		March 31, 2016
Amortization expense	$	503	255
Tax credits and other tax benefits recognized	776		392

The Company also owns the following trust subsidiaries, each of which issued trust preferred securities as Tier 1 capital instruments: Glacier Capital Trust II, Glacier Capital Trust III, Glacier Capital Trust IV, Citizens (ID) Statutory Trust I, Bank of the San Juans Bancorporation Trust I, First Company Statutory Trust 2001, and First Company Statutory Trust 2003. The trust subsidiaries have no assets, operations, revenues or cash flows other than those related to the issuance, administration and repayment of the securities held by third parties. The trust subsidiaries are not included in the Company’s consolidated financial statements because the sole asset of each trust subsidiary is a receivable from the Company, even though the Company owns all of the voting equity shares of the trust subsidiaries, has fully guaranteed the obligations of the trust subsidiaries and may have the right to redeem the third party securities under certain circumstances. The Company reports the trust preferred securities issued to the trust subsidiaries as subordinated debentures on the Company’s statements of financial condition.

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Securities Sold Under Agreements to Repurchase

3 Months Ended

Mar. 31, 2017

Transfers and Servicing [Abstract]

Securities Sold Under Agreements to Repurchase

Securities Sold Under Agreements to Repurchase

The Company’s securities sold under agreements to repurchase (“repurchase agreements”) totaled $497,187,000 and $473,650,000 at March 31, 2017 and December 31, 2016, respectively, and are secured by investment securities with carrying values of $478,899,000 and $472,239,000, respectively. Securities are pledged to customers at the time of the transaction in an amount at least equal to the outstanding balance and are held in custody accounts by third parties. The fair value of collateral is continually monitored and additional collateral is provided as deemed appropriate.

The following tables summarize the carrying value of the Company’s repurchase agreements by remaining contractual maturity and category of collateral:

	March 31, 2017
	Remaining Contractual Maturity of the Agreements
(Dollars in thousands)	Overnight and Continuous		Up to 30 Days	Total
Residential mortgage-backed securities	$	484,126	—	484,126
Commercial mortgage-backed securities	13,061		—	13,061
Total	$	497,187	—	497,187

	December 31, 2016
	Remaining Contractual Maturity of the Agreements
(Dollars in thousands)	Overnight and Continuous		Up to 30 Days	Total
Residential mortgage-backed securities	$	471,706	643	472,349
Commercial mortgage-backed securities	1,301		—	1,301
Total	$	473,007	643	473,650

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Derivatives and Hedging Activities

3 Months Ended

Mar. 31, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives and Hedging Activities

Derivatives and Hedging Activities

As of March 31, 2017, the Company’s interest rate swap derivative financial instruments were designated as cash flow hedges and are summarized as follows:

(Dollars in thousands)	Forecasted Notional  Amount		Variable Interest Rate 1	Fixed Interest Rate 1		Payment Term
Interest rate swap	$	160,000	3 month LIBOR	3.378	%	Oct. 21, 2014 - Oct. 21, 2021
Interest rate swap	100,000		3 month LIBOR	2.498	%	Nov. 30, 2015 - Nov. 30, 2022

__________

¹The Company pays the fixed interest rate and the counterparty pays the Company the variable interest rate.

The hedging strategy converts the LIBOR-based variable interest rate on borrowings to a fixed interest rate, thereby protecting the Company from interest rate variability.

The interest rate swaps with the $160,000,000 and $100,000,000 notional amounts began their payment terms in October 2014 and November 2015, respectively. The Company designated wholesale deposits as the cash flow hedge and these deposits were determined to be fully effective during the current and prior year. As such, no amount of ineffectiveness has been included in the Company’s statements of operations for the three months ended March 31, 2017 and 2016. Therefore, the aggregate fair value of the interest rate swaps was recorded in other liabilities with changes recorded in other comprehensive income (“OCI”). The Company expects the hedges to remain highly effective during the remaining terms of the interest rate swaps. Interest expense recorded on the interest rate swaps totaled $1,976,000 and $1,998,000 for the three months ended March 31, 2017 and 2016, respectively, and is reported as a component of interest expense on deposits. Unless the interest rate swaps are terminated during the next year, the Company expects $5,183,000 of the unrealized loss reported in other comprehensive income at March 31, 2017 to be reclassified to interest expense during the next twelve months.

The following table presents the pre-tax gains or losses recorded in accumulated other comprehensive income and the Company’s statements of operations relating to the interest rate swap derivative financial instruments:

	Three Months ended
(Dollars in thousands)	March 31, 2017			March 31, 2016
Interest rate swaps
Amount of gain (loss) recognized in OCI (effective portion)	$	264		(9,928	)
Amount of loss reclassified from OCI to interest expense	(1,332		)	(1,829	)
Amount of loss recognized in other non-interest expense (ineffective portion)	—			—

The following table discloses the offsetting of financial liabilities and interest rate swap derivative liabilities. There were no interest rate swap derivative assets at the dates presented.

	March 31, 2017				December 31, 2016
(Dollars in thousands)	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Statements of Financial Position	Net Amounts of Liabilities Presented in the Statements of Financial Position	Gross Amounts of Recognized Liabilities	Gross Amounts Offset in the Statements of Financial Position	Net Amounts of Liabilities Presented in the Statements of Financial Position
Interest rate swaps	$	13,129	—	13,129	14,725	—	14,725

Pursuant to the interest rate swap agreements, the Company pledged collateral to the counterparty in the form of investment securities totaling $27,931,000 at March 31, 2017. There was $0 collateral pledged from the counterparty to the Company as of March 31, 2017. There is the possibility that the Company may need to pledge additional collateral in the future if there were declines in the fair value of the interest rate swap derivative financial instruments versus the collateral pledged.

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Other Expenses

3 Months Ended

Mar. 31, 2017

Other Expenses [Abstract]

Other Expenses

Other Expenses

Other expenses consists of the following:

	Three Months ended
(Dollars in thousands)	March 31, 2017		March 31, 2016
Debit card expenses	$	1,718	1,849
Consulting and outside services	1,420		1,014
Telephone	977		960
Loan expenses	891		783
Employee expenses	789		579
Postage	725		880
Printing and supplies	640		943
Accounting and audit fees	512		391
VIE amortization and other expenses	464		639
Checking and operating expenses	365		694
Business development	340		342
Legal fees	340		237
ATM expenses	312		255
Other	927		980
Total other expenses	$	10,420	10,546

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Accumulated Other Comprehensive Income (Loss)

3 Months Ended

Mar. 31, 2017

Equity [Abstract]

Accumulated Other Comprehensive Income (Loss)

Accumulated Other Comprehensive Income (Loss)

The following table illustrates the activity within accumulated other comprehensive income (loss) by component, net of tax:

(Dollars in thousands)	Gains on Available-For-Sale Securities			Losses on Derivatives Used for Cash Flow Hedges		Total
Balance at December 31, 2015	$	13,935		(11,946	)	1,989
Other comprehensive income (loss) before reclassifications	8,331			(6,082	)	2,249
Amounts reclassified from accumulated other comprehensive (loss) income	(38		)	1,121		1,083
Net current period other comprehensive income (loss)	8,293			(4,961	)	3,332
Balance at March 31, 2016	$	22,228		(16,907	)	5,321
Balance at December 31, 2016	$	1,639		(9,021	)	(7,382	)
Other comprehensive income before reclassifications	1,907			162		2,069
Amounts reclassified from accumulated other comprehensive income	85			816		901
Net current period other comprehensive income	1,992			978		2,970
Balance at March 31, 2017	$	3,631		(8,043	)	(4,412	)

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Earnings Per Share

3 Months Ended

Mar. 31, 2017

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

Basic earnings per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding during the period presented. Diluted earnings per share is computed by including the net increase in shares as if dilutive outstanding restricted stock awards were vested, using the treasury stock method.

Basic and diluted earnings per share has been computed based on the following:

	Three Months ended
(Dollars in thousands, except per share data)	March 31, 2017		March 31, 2016
Net income available to common stockholders, basic and diluted	$	31,255	28,682
Average outstanding shares - basic	76,572,116		76,126,251
Add: dilutive restricted stock awards	61,167		47,166
Average outstanding shares - diluted	76,633,283		76,173,417
Basic earnings per share	$	0.41	0.38
Diluted earnings per share	$	0.41	0.38

There were 39,348 and 0 stock awards excluded from the diluted average outstanding share calculation for the three months ended March 31, 2017 and 2016, respectively. Anti-dilution occurs when the unrecognized compensation cost per share of a restricted stock award exceeds the market price of the Company’s stock.

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Fair Value of Assets and Liabilities

3 Months Ended

Mar. 31, 2017

Fair Value Disclosures [Abstract]

Fair Value of Assets and Liabilities

Fair Value of Assets and Liabilities

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. There is a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of inputs that may be used to measure fair value are as follows:

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

Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities

Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities

Transfers in and out of Level 1 (quoted prices in active markets), Level 2 (significant other observable inputs) and Level 3 (significant unobservable inputs) are recognized on the actual transfer date. There were no transfers between fair value hierarchy levels during the three month periods ended March 31, 2017 and 2016.

Recurring Measurements

The following is a description of the inputs and valuation methodologies used for assets and liabilities measured at fair value on a recurring basis, as well as the general classification of such assets and liabilities pursuant to the valuation hierarchy. There have been no significant changes in the valuation techniques during the period ended March 31, 2017.

Investment securities, available-for-sale: fair value for available-for-sale securities is estimated by obtaining quoted market prices for identical assets, where available. If such prices are not available, fair value is based on independent asset pricing services and models, the inputs of which are market-based or independently sourced market parameters, including but not limited to, yield curves, interest rates, volatilities, market spreads, prepayments, defaults, recoveries, cumulative loss projections, and cash flows. Such securities are classified in Level 2 of the valuation hierarchy. Where Level 1 or Level 2 inputs are not available, such securities are classified as Level 3 within the hierarchy.

Fair value determinations of available-for-sale securities are the responsibility of the Company’s corporate accounting and treasury departments. The Company obtains fair value estimates from independent third party vendors on a monthly basis. The vendors’ pricing system methodologies, procedures and system controls are reviewed to ensure they are appropriately designed and operating effectively. The Company reviews the vendors’ inputs for fair value estimates and the recommended assignments of levels within the fair value hierarchy. The review includes the extent to which markets for investment securities are determined to have limited or no activity, or are judged to be active markets. The Company reviews the extent to which observable and unobservable inputs are used as well as the appropriateness of the underlying assumptions about risk that a market participant would use in active markets, with adjustments for limited or inactive markets. In considering the inputs to the fair value estimates, the Company places less reliance on quotes that are judged to not reflect orderly transactions, or are non-binding indications. In assessing credit risk, the Company reviews payment performance, collateral adequacy, third party research and analyses, credit rating histories and issuers’ financial statements. For those markets determined to be inactive or limited, the valuation techniques used are models for which management has verified that discount rates are appropriately adjusted to reflect illiquidity and credit risk.

Interest rate swap derivative financial instruments: fair values for interest rate swap derivative financial instruments are based upon the estimated amounts to settle the contracts considering current interest rates and are calculated using discounted cash flows that are observable or that can be corroborated by observable market data and, therefore, are classified within Level 2 of the valuation hierarchy. The inputs used to determine fair value include the 3 month LIBOR forward curve to estimate variable rate cash inflows and the Fed Funds Effective Swap Rate to estimate the discount rate. The estimated variable rate cash inflows are compared to the fixed rate outflows and such difference is discounted to a present value to estimate the fair value of the interest rate swaps. The Company also obtains and compares the reasonableness of the pricing from an independent third party.

The following tables disclose the fair value measurement of assets and liabilities measured at fair value on a recurring basis:

			Fair Value Measurements At the End of the Reporting Period Using
(Dollars in thousands)	Fair Value March 31, 2017		Quoted Prices in Active  Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Investment securities, available-for-sale
U.S. government and federal agency	$	37,416	—	37,416	—
U.S. government sponsored enterprises	19,536		—	19,536	—
State and local governments	762,167		—	762,167	—
Corporate bonds	443,701		—	443,701	—
Residential mortgage-backed securities	949,091		—	949,091	—
Commercial mortgage-backed securities	102,610		—	102,610	—
Total assets measured at fair value on a recurring basis	$	2,314,521	—	2,314,521	—
Interest rate swaps	$	13,129	—	13,129	—
Total liabilities measured at fair value on a recurring basis	$	13,129	—	13,129	—

			Fair Value Measurements At the End of the Reporting Period Using
(Dollars in thousands)	Fair Value December 31, 2016		Quoted Prices in Active  Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Investment securities, available-for-sale
U.S. government and federal agency	$	39,407	—	39,407	—
U.S. government sponsored enterprises	19,570		—	19,570	—
State and local governments	786,373		—	786,373	—
Corporate bonds	471,951		—	471,951	—
Residential mortgage-backed securities	1,007,515		—	1,007,515	—
Commercial mortgage-backed securities	100,661		—	100,661	—
Total assets measured at fair value on a recurring basis	$	2,425,477	—	2,425,477	—
Interest rate swaps	$	14,725	—	14,725	—
Total liabilities measured at fair value on a recurring basis	$	14,725	—	14,725	—

Non-recurring Measurements

The following is a description of the inputs and valuation methodologies used for assets recorded at fair value on a non-recurring basis, as well as the general classification of such assets pursuant to the valuation hierarchy. There have been no significant changes in the valuation techniques during the period ended March 31, 2017.

Other real estate owned: OREO is carried at the lower of fair value at acquisition date or current estimated fair value, less estimated cost to sell. Estimated fair value of OREO is based on appraisals or evaluations (new or updated). OREO is classified within Level 3 of the fair value hierarchy.

Collateral-dependent impaired loans, net of ALLL: loans included in the Company’s loan portfolio for which it is probable that the Company will not collect all principal and interest due according to contractual terms are considered impaired. Estimated fair value of collateral-dependent impaired loans is based on the fair value of the collateral, less estimated cost to sell. Collateral-dependent impaired loans are classified within Level 3 of the fair value hierarchy.

The Company’s credit departments review appraisals for OREO and collateral-dependent loans, giving consideration to the highest and best use of the collateral. The appraisal or evaluation (new or updated) is considered the starting point for determining fair value. The valuation techniques used in preparing appraisals or evaluations (new or updated) include the cost approach, income approach, sales comparison approach, or a combination of the preceding valuation techniques. The key inputs used to determine the fair value of the collateral-dependent loans and OREO include selling costs, discounted cash flow rate or capitalization rate, and adjustment to comparables. Valuations and significant inputs obtained by independent sources are reviewed by the Company for accuracy and reasonableness. The Company also considers other factors and events in the environment that may affect the fair value. The appraisals or evaluations (new or updated) are reviewed at least quarterly and more frequently based on current market conditions, including deterioration in a borrower’s financial condition and when property values may be subject to significant volatility. After review and acceptance of the collateral appraisal or evaluation (new or updated), adjustments to the impaired loan or OREO may occur. The Company generally obtains appraisals or evaluations (new or updated) annually.

The following tables disclose the fair value measurement of assets with a recorded change during the period resulting from re-measuring the assets at fair value on a non-recurring basis:

			Fair Value Measurements At the End of the Reporting Period Using
(Dollars in thousands)	Fair Value March 31, 2017		Quoted Prices in Active  Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Other real estate owned	$	147	—	—	147
Collateral-dependent impaired loans, net of ALLL	7,601		—	—	7,601
Total assets measured at fair value on a non-recurring basis	$	7,748	—	—	7,748

			Fair Value Measurements At the End of the Reporting Period Using
(Dollars in thousands)	Fair Value December 31, 2016		Quoted Prices in Active  Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Other real estate owned	$	7,839	—	—	7,839
Collateral-dependent impaired loans, net of ALLL	5,664		—	—	5,664
Total assets measured at fair value on a non-recurring basis	$	13,503	—	—	13,503

Non-recurring Measurements Using Significant Unobservable Inputs (Level 3)

The following tables present additional quantitative information about assets measured at fair value on a non-recurring basis and for which the Company has utilized Level 3 inputs to determine fair value:

	Fair Value March 31, 2017		Quantitative Information about Level 3 Fair Value Measurements
(Dollars in thousands)			Valuation Technique	Unobservable Input	Range (Weighted-Average) 1
Other real estate owned	$	147	Sales comparison approach	Selling costs	8.0% - 8.0% (8.0%)
Collateral-dependent impaired loans, net of ALLL	$	5	Cost approach	Selling costs	20.0% - 20.0% (20.0%)
	2,994		Sales comparison approach	Selling costs	8.0% - 10.0% (9.7%)
	4,602		Combined approach	Selling costs	10.0% - 10.0% (10.0%)
				Adjustment to comparables	20.0% - 20.0% (20.0%)
	$	7,601

	Fair Value December 31, 2016		Quantitative Information about Level 3 Fair Value Measurements
(Dollars in thousands)			Valuation Technique	Unobservable Input	Range (Weighted-Average) 1
Other real estate owned	$	7,767	Sales comparison approach	Selling costs	6.0% - 10.0% (6.9%)
				Adjustment to comparables	0.0% - 10.0% (0.1%)
	72		Combined approach	Selling costs	10.0% - 10.0% (10.0%)
				Adjustment to comparables	10.0% - 10.0% (10.0%)
	$	7,839
Collateral-dependent impaired loans, net of ALLL	$	110	Cost approach	Selling costs	6.0% - 20.0% (6.6%)
	1,982		Sales comparison approach	Selling costs	8.0% - 10.0% (9.6%)
	3,572		Combined approach	Selling costs	10.0% - 10.0% (10.0%)
				Adjustment to comparables	20.0% - 20.0% (20.0%)
	$	5,664

__________

¹ The range for selling costs and adjustments to comparables indicate reductions to the fair value.

Fair Value of Financial Instruments

The following is a description of the methods used to estimate the fair value of all other assets and liabilities recognized at amounts other than fair value.

Cash and cash equivalents: fair value is estimated at book value.

Investment securities, held-to-maturity: fair value for held-to-maturity securities is estimated in the same manner as available-for-sale securities, which is described above.

Loans held for sale: fair value is estimated at book value.

Loans receivable, net of ALLL: fair value is estimated by discounting the future cash flows using the rates at which similar notes would be written for the same remaining maturities. The market rates used are based on current rates the Company would impose for similar loans and reflect a market participant assumption about risks associated with non-performance, illiquidity, and the structure and term of the loans along with local economic and market conditions. Estimated fair value of impaired loans is based on the fair value of the collateral, less estimated cost to sell, or the present value of the loan’s expected future cash flows (discounted at the loan’s effective interest rate). All impaired loans are classified as Level 3 and all other loans are classified as Level 2 within the valuation hierarchy.

Accrued interest receivable: fair value is estimated at book value.

Non-marketable equity securities: fair value is estimated at book value due to restrictions that limit the sale or transfer of such securities.

Deposits: fair value of term deposits is estimated by discounting the future cash flows using rates of similar deposits with similar maturities. The market rates used were obtained from an independent third party and reviewed by the Company. The rates were the average of current rates offered by the Company’s local competitors. The estimated fair value of demand, NOW, savings, and money market deposits is the book value since rates are regularly adjusted to market rates and transactions are executed at book value daily. Therefore, such deposits are classified in Level 1 of the valuation hierarchy. Certificate accounts and wholesale deposits are classified as Level 2 within the hierarchy.

Federal Home Loan Bank advances: fair value of non-callable Federal Home Loan Bank (“FHLB”) advances is estimated by discounting the future cash flows using rates of similar advances with similar maturities. Such rates were obtained from current rates offered by FHLB. The estimated fair value of callable FHLB advances was obtained from FHLB and the model was reviewed by the Company.

Securities sold under agreements to repurchase and other borrowed funds: fair value of term repurchase agreements and other term borrowings is estimated based on current repurchase rates and borrowing rates currently available to the Company for repurchases and borrowings with similar terms and maturities. The estimated fair value for overnight repurchase agreements and other borrowings is book value.

Subordinated debentures: fair value of the subordinated debt is estimated by discounting the estimated future cash flows using current estimated market rates. The market rates used were averages of currently traded trust preferred securities with similar characteristics to the Company’s issuances and obtained from an independent third party.

Accrued interest payable: fair value is estimated at book value.

Off-balance sheet financial instruments: commitments to extend credit and letters of credit represent the principal categories of off-balance sheet financial instruments. Rates for these commitments are set at time of loan closing, such that no adjustment is necessary to reflect these commitments at market value. The Company has an insignificant amount of off-balance sheet financial instruments.

The following tables present the carrying amounts, estimated fair values and the level within the fair value hierarchy of the Company’s financial instruments:

			Fair Value Measurements At the End of the Reporting Period Using
(Dollars in thousands)	Carrying Amount March 31, 2017		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Financial assets
Cash and cash equivalents	$	234,004	234,004	—	—
Investment securities, available-for-sale	2,314,521		—	2,314,521	—
Investment securities, held-to-maturity	667,388		—	680,395	—
Loans held for sale	25,649		25,649	—	—
Loans receivable, net of ALLL	5,747,748		—	5,558,406	128,299
Accrued interest receivable	48,043		48,043	—	—
Non-marketable equity securities	23,944		—	23,944	—
Total financial assets	$	9,061,297	307,696	8,577,266	128,299
Financial liabilities
Deposits	$	7,480,157	6,197,583	1,284,399	—
FHLB advances	211,627		—	217,435	—
Repurchase agreements and other borrowed funds	506,081		—	506,081	—
Subordinated debentures	126,027		—	89,136	—
Accrued interest payable	3,467		3,467	—	—
Interest rate swaps	13,129		—	13,129	—
Total financial liabilities	$	8,340,488	6,201,050	2,110,180	—

			Fair Value Measurements At the End of the Reporting Period Using
(Dollars in thousands)	Carrying Amount December 31, 2016		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Financial assets
Cash and cash equivalents	$	152,541	152,541	—	—
Investment securities, available-for-sale	2,425,477		—	2,425,477	—
Investment securities, held-to-maturity	675,674		—	689,089	—
Loans held for sale	72,927		72,927	—	—
Loans receivable, net of ALLL	5,554,891		—	5,380,286	123,382
Accrued interest receivable	45,832		45,832	—	—
Non-marketable equity securities	25,550		—	25,550	—
Total financial assets	$	8,952,892	271,300	8,520,402	123,382
Financial liabilities
Deposits	$	7,372,279	6,090,879	1,283,532	—
FHLB advances	251,749		—	257,643	—
Repurchase agreements and other borrowed funds	478,090		—	478,090	—
Subordinated debentures	125,991		—	85,557	—
Accrued interest payable	3,584		3,584	—	—
Interest rate swaps	14,725		—	14,725	—
Total financial liabilities	$	8,246,418	6,094,463	2,119,547	—

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Subsequent Event

3 Months Ended

Mar. 31, 2017

Subsequent Events [Abstract]

Subsequent Event

Subsequent Event

On April 30, 2017, the Company acquired 100 percent of the outstanding common stock of TFB Bancorp, Inc. and its wholly-owned subsidiary, The Foothills Bank, a community bank based in Yuma, Arizona (collectively, “Foothills”). Foothills provides banking services to individuals and businesses in Arizona, with banking offices located in Yuma, Prescott and Casa Grande, Arizona. The acquisition expands the Company’s market into the state of Arizona and further diversifies the Company’s loan, customer and deposit base. Foothills merged into Glacier Bank and will operate as a separate Bank division under its existing name and management team.

As of March 31, 2017, Foothills had total assets of $359,941,000, gross loans of $305,239,000 and total deposits of $292,320,000. The calculation of fair value of the consideration transferred, the total identifiable net assets acquired and resulting goodwill has not yet been determined.

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Nature of Operations and Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

General

General

Glacier Bancorp, Inc. (“Company”) is a Montana corporation headquartered in Kalispell, Montana. The Company provides a full range of banking services to individuals and businesses in Montana, Idaho, Wyoming, Colorado, Utah and Washington through its wholly-owned bank subsidiary, Glacier Bank (“Bank”). The Company offers a wide range of banking products and services, including transaction and savings deposits, real estate, commercial, agriculture and consumer loans and mortgage origination services. The Company serves individuals, small to medium-sized businesses, community organizations and public entities.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the Company’s financial condition as of March 31, 2017, the results of operations and comprehensive income for the three month periods ended March 31, 2017 and 2016, and changes in stockholders’ equity and cash flows for the three month periods ended March 31, 2017 and 2016. The condensed consolidated statement of financial condition of the Company as of December 31, 2016 has been derived from the audited consolidated statements of the Company as of that date.

The accompanying unaudited condensed consolidated financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. Operating results for the three months ended March 31, 2017 are not necessarily indicative of the results anticipated for the year ending December 31, 2017.

The Company is a defendant in legal proceedings arising in the normal course of business. In the opinion of management, the disposition of pending litigation will not have a material affect on the Company’s consolidated financial position, results of operations or liquidity.

Material estimates that are particularly susceptible to significant change include: 1) the determination of the allowance for loan and lease losses (“ALLL” or “allowance”); 2) the valuation of investment securities; 3) the valuation of real estate acquired in connection with foreclosures or in satisfaction of loans; and 4) the evaluation of goodwill impairment. For the determination of the ALLL and real estate valuation estimates, management obtains independent appraisals (new or updated) for significant items. Estimates relating to investment valuations are obtained from independent third parties. Estimates relating to the evaluation of goodwill for impairment are determined based on internal calculations using significant independent party inputs.

Principles of Consolidation

Principles of Consolidation

The consolidated financial statements of the Company include the parent holding company and the Bank. The Bank consists of thirteen bank divisions, a treasury division and an information technology division. The treasury division includes the Bank’s investment portfolio and wholesale borrowings and the information technology division includes the Bank’s internal data processing and information technology expenses. The Bank divisions operate under separate names, management teams and advisory directors. The Company considers the Bank to be its sole operating segment as the Bank 1) engages in similar bank business activity from which it earns revenues and incurs expenses; 2) the operating results of the Bank are regularly reviewed by the Chief Executive Officer (i.e., the chief operating decision maker) who makes decisions about resources to be allocated to the Bank; and 3) financial information is available for the Bank. All significant inter-company transactions have been eliminated in consolidation.

The Bank has subsidiary interests in variable interest entities (“VIE”) for which the Bank has both the power to direct the VIE’s significant activities and the obligation to absorb losses or right to receive benefits of the VIE that could potentially be significant to the VIE. These subsidiary interests are included in the Company’s consolidated financial statements. The parent holding company also owns non-bank subsidiaries that have issued trust preferred securities as Tier 1 capital instruments. The trust subsidiaries are not included in the Company’s consolidated financial statements. The Company's investments in the trust subsidiaries are included in non-marketable equity securities on the Company's statement of financial condition.

In August 2016, the Company completed its acquisition of Treasure State Bank (“TSB”), a community bank based in Missoula, Montana. The transaction was accounted for using the acquisition method, and its results of operations have been included in the Company’s consolidated financial statements as of the acquisition date.

Loans Receivable

Loans Receivable

Loans that are intended to be held-to-maturity are reported at the unpaid principal balance less net charge-offs and adjusted for deferred fees and costs on originated loans and unamortized premiums or discounts on acquired loans. Fees and costs on originated loans and premiums or discounts on acquired loans are deferred and subsequently amortized or accreted as a yield adjustment over the expected life of the loan utilizing the interest method. The objective of the interest method is to calculate periodic interest income at a constant effective yield. When a loan is paid off prior to maturity, the remaining fees and costs on originated loans and premiums or discounts on acquired loans are immediately recognized into interest income.

The Company’s loan segments, which are based on the purpose of the loan, include residential real estate, commercial, and consumer loans. The Company’s loan classes, a further disaggregation of segments, include residential real estate loans (residential real estate segment), commercial real estate and other commercial loans (commercial segment), and home equity and other consumer loans (consumer segment).

Loans that are thirty days or more past due based on payments received and applied to the loan are considered delinquent. Loans are designated non-accrual and the accrual of interest is discontinued when the collection of the contractual principal or interest is unlikely. A loan is typically placed on non-accrual when principal or interest is due and has remained unpaid for ninety days or more. When a loan is placed on non-accrual status, interest previously accrued but not collected is reversed against current period interest income. Subsequent payments on non-accrual loans are applied to the outstanding principal balance if doubt remains as to the ultimate collectability of the loan. Interest accruals are not resumed on partially charged-off impaired loans. For other loans on nonaccrual, interest accruals are resumed on such loans only when they are brought fully current with respect to interest and principal and when, in the judgment of management, the loans are estimated to be fully collectible as to both principal and interest.

The Company considers impaired loans to be the primary credit quality indicator for monitoring the credit quality of the loan portfolio. Loans are designated impaired when, based upon 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 and, therefore, the Company has serious doubts as to the ability of such borrowers to fulfill the contractual obligation. Impaired loans include non-performing loans (i.e., non-accrual loans and accruing loans ninety days or more past due) and accruing loans under ninety days past due where it is probable payments will not be received according to the loan agreement (e.g., troubled debt restructuring). Interest income on accruing impaired loans is recognized using the interest method. The Company measures impairment on a loan-by-loan basis in the same manner for each class within the loan portfolio. An insignificant delay or shortfall in the amounts of payments would not cause a loan or lease to be considered impaired. The Company determines the significance of payment delays and shortfalls on a case-by-case basis, taking into consideration all of the facts and circumstances surrounding the loan and the borrower, including the length and reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest due.

A restructured loan is considered a troubled debt restructuring (“TDR”) if the creditor, for economic or legal reasons related to the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider. The Company periodically enters into restructure agreements with borrowers whereby the loans were previously identified as TDRs. When such circumstances occur, the Company carefully evaluates the facts of the subsequent restructure to determine the appropriate accounting and under certain circumstances it may be acceptable not to account for the subsequently restructured loan as a TDR. When assessing whether a concession has been granted by the Company, any prior forgiveness on a cumulative basis is considered a continuing concession. A TDR loan is considered an impaired loan and a specific valuation allowance is established when the fair value of the collateral-dependent loan or present value of the loan’s expected future cash flows (discounted at the loan’s effective interest rate based on the original contractual rate) is lower than the carrying value of the impaired loan. The Company has made the following types of loan modifications, some of which were considered a TDR:

• reduction of the stated interest rate for the remaining term of the debt;

• extension of the maturity date(s) at a stated rate of interest lower than the current market rate for newly originated debt having similar risk characteristics; and

• reduction of the face amount of the debt as stated in the debt agreements.

The Company recognizes that while borrowers may experience deterioration in their financial condition, many continue to be creditworthy customers who have the willingness and capacity for debt repayment. In determining whether non-restructured or unimpaired loans issued to a single or related party group of borrowers should continue to accrue interest when the borrower has other loans that are impaired or are TDRs, the Company on a quarterly or more frequent basis performs an updated and comprehensive assessment of the willingness and capacity of the borrowers to timely and ultimately repay their total debt obligations, including contingent obligations. Such analysis takes into account current financial information about the borrowers and financially responsible guarantors, if any, including for example:

• analysis of global, i.e., aggregate debt service for total debt obligations;

• assessment of the value and security protection of collateral pledged using current market conditions and alternative market assumptions across a variety of potential future situations; and

• loan structures and related covenants.

For additional information relating to loans, see Note 3.

Allowance for Loan and Lease Losses

Allowance for Loan and Lease Losses

Based upon management’s analysis of the Company’s loan portfolio, the balance of the ALLL is an estimate of probable credit losses known and inherent within the Bank’s loan portfolio as of the date of the consolidated financial statements. The ALLL is analyzed at the loan class level and is maintained within a range of estimated losses. Determining the adequacy of the ALLL involves a high degree of judgment and is inevitably imprecise as the risk of loss is difficult to quantify. The determination of the ALLL and the related provision for loan losses is a critical accounting estimate that involves management’s judgments about known relevant internal and external environmental factors that affect loan losses. The balance of the ALLL is highly dependent upon management’s evaluations of borrowers’ current and prospective performance, appraisals and other variables affecting the quality of the loan portfolio. Individually significant loans and major lending areas are reviewed periodically to determine potential problems at an early date. Changes in management’s estimates and assumptions are reasonably possible and may have a material impact upon the Company’s consolidated financial statements, results of operations or capital.

Risk characteristics considered in the ALLL analysis applicable to each loan class within the Company's loan portfolio are as follows:

Residential Real Estate.  Residential real estate loans are secured by owner-occupied 1-4 family residences.  Repayment of these loans is primarily dependent on the personal income and credit rating of the borrowers.  Credit risk in these loans is impacted by economic conditions within the Company’s market areas that affect the value of the property securing the loans and affect the borrowers' personal incomes.  Mitigating risk factors for this loan class include a large number of borrowers, geographic dispersion of market areas and the loans are originated for relatively smaller amounts.

Commercial Real Estate.  Commercial real estate loans typically involve larger principal amounts, and repayment of these loans is generally dependent on the successful operation of the property securing the loan and/or the business conducted on the property securing the loan.  Credit risk in these loans is impacted by the creditworthiness of a borrower, valuation of the property securing the loan and conditions within the local economies in the Company’s diverse, geographic market areas.

Commercial.  Commercial loans consist of loans to commercial customers for use in financing working capital needs, equipment purchases and business expansions.  The loans in this category are repaid primarily from the cash flow of a borrower’s principal business operation.  Credit risk in these loans is driven by creditworthiness of a borrower and the economic conditions that impact the cash flow stability from business operations across the Company’s diverse, geographic market areas.

Home Equity.  Home equity loans consist of junior lien mortgages and first and junior lien lines of credit (revolving open-end and amortizing closed-end) secured by owner-occupied 1-4 family residences.  Repayment of these loans is primarily dependent on the personal income and credit rating of the borrowers.  Credit risk in these loans is impacted by economic conditions within the Company’s market areas that affect the value of the residential property securing the loans and affect the borrowers' personal incomes.  Mitigating risk factors for this loan class are a large number of borrowers, geographic dispersion of market areas and the loans are originated for terms that range from 10 years to 15 years.

Other Consumer.  The other consumer loan portfolio consists of various short-term loans such as automobile loans and loans for other personal purposes.  Repayment of these loans is primarily dependent on the personal income of the borrowers.  Credit risk is driven by consumer economic factors (such as unemployment and general economic conditions in the Company’s diverse, geographic market area) and the creditworthiness of a borrower.

The ALLL consists of a specific valuation allowance component and a general valuation allowance component. The specific component relates to loans that are determined to be impaired and individually evaluated for impairment. The Company measures impairment on a loan-by-loan basis based on the present value of expected future cash flows discounted at the loan’s effective interest rate, except when it is determined that repayment of the loan is expected to be provided solely by the underlying collateral. For impairment based on expected future cash flows, the Company considers all information available as of a measurement date, including past events, current conditions, potential prepayments, and estimated cost to sell when such costs are expected to reduce the cash flows available to repay or otherwise satisfy the loan. For alternative ranges of cash flows, the likelihood of the possible outcomes is considered in determining the best estimate of expected future cash flows. The effective interest rate for a loan restructured in a TDR is based on the original contractual rate. For collateral-dependent loans and real estate loans for which foreclosure or a deed-in-lieu of foreclosure is probable, impairment is measured by the fair value of the collateral, less estimated cost to sell. The fair value of the collateral is determined primarily based upon appraisal or evaluation of the underlying real property value.

The general valuation allowance component relates to probable credit losses inherent in the balance of the loan portfolio based on historical loss experience, adjusted for changes in trends and conditions of qualitative or environmental factors. The historical loss experience is based on the previous twelve quarters loss experience by loan class adjusted for risk characteristics in the existing loan portfolio. The same trends and conditions are evaluated for each class within the loan portfolio; however, the risk characteristics are weighted separately at the individual class level based on the Company’s judgment and experience.

The changes in trends and conditions evaluated for each class within the loan portfolio include the following:

• Changes in lending policies and procedures, including changes in underwriting standards and collection, charge-off, and recovery practices not considered elsewhere in estimating credit losses;

• Changes in global, national, regional, and local economic and business conditions and developments that affect the collectability of the portfolio, including the condition of various market segments;

• Changes in the nature and volume of the portfolio and in the terms of loans;

• Changes in experience, ability, and depth of lending management and other relevant staff;

• Changes in the volume and severity of past due and nonaccrual loans;

• Changes in the quality of the Company’s loan review system;

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

• The existence and effect of any concentrations of credit, and changes in the level of such concentrations; and

• The effect of other external factors such as competition and legal and regulatory requirements on the level of estimated credit losses in the Company’s existing portfolio.

The ALLL is increased by provisions for loan losses which are charged to expense. The portions of loan balances determined by management to be uncollectible are charged off as a reduction of the ALLL and recoveries of amounts previously charged off are credited as an increase to the ALLL. The Company’s charge-off policy is consistent with bank regulatory standards. Consumer loans generally are charged off when the loan becomes over 120 days delinquent. Real estate acquired as a result of foreclosure or by deed-in-lieu of foreclosure is classified as real estate owned until such time as it is sold.

At acquisition date, the assets and liabilities of acquired banks are recorded at their estimated fair values which results in no ALLL carried over from acquired banks. Subsequent to acquisition, an allowance will be recorded on the acquired loan portfolios for further credit deterioration, if any.

Reclassifications

Reclassifications

Certain reclassifications have been made to the 2016 financial statements to conform to the 2017 presentation.

Impact of Recent Authoritative Accounting Guidance

Impact of Recent Authoritative Accounting Guidance

The Accounting Standards Codification^™ (“ASC”) is the Financial Accounting Standards Board’s (“FASB”) officially recognized source of authoritative GAAP applicable to all public and non-public non-governmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under the authority of the federal securities laws are also sources of authoritative GAAP for the Company as an SEC registrant. All other accounting literature is non-authoritative. The following paragraphs provide descriptions of recently adopted or newly issued but not yet effective accounting standards that could have a material effect on the Company’s financial position or results of operations.

In March 2017, FASB amended FASB ASC Subtopic 310-20, Receivables-Nonrefundable Fees and Other Costs. The amendments in the Update shorten the amortization period for certain callable debt securities held at a premium. Specifically, the amendments require the premium to be amortized to the earliest call date instead of the maturity date. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. The amendments are effective for public business entities for the first interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted and if adopted in an interim period, any adjustments should be reflected as of the beginning of the year that includes the interim period. The entity should apply the amendments on a modified retrospective basis through a cumulative-effective adjustment directly to retained earnings as of the beginning of the period of adoption. The Company has premiums on debt securities that are currently being amortized to the maturity date, primarily in state and local governments category. The Company is currently evaluating the amount of the premium associated with debt securities that will be impacted by the amendments and whether it will early adopt. The accounting policies and procedures will be modified after the Company has fully evaluated the standard, although, significant changes are not expected.

In January 2017, FASB amended FASB ASC Topic 350, Simplifying the Test for Goodwill. The amendments in the Update simplify the measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Instead, under these amendments, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss should not exceed the total amount of goodwill allocated to that reporting unit. The amendments are effective for public business entities for the first interim and annual reporting periods beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company has goodwill from prior business combinations and performs an annual impairment test or more frequently if changes or circumstances occur that would more-likely-than-not reduce the fair value of the reporting unit below its carrying value. During the third quarter of 2016, the Company performed its impairment assessment and determined the fair value of the aggregated reporting units exceed the carrying value, such that the Company’s goodwill was not considered impaired. Although the Company cannot anticipate future goodwill impairment assessments, based on the most recent assessment, it is unlikely that an impairment amount would need to be calculated and, therefore, the Company does not anticipate a material impact from these amendments to the Company’s financial position and results of operations. The current accounting policies and processes are not anticipated to change, except for the elimination of the Step 2 analysis. For additional information regarding goodwill impairment testing, see Note 4.

In June 2016, FASB amended FASB ASC Topic 326, Financial Instruments - Credit Losses. The amendments in this Update replace the incurred loss model with a methodology that reflects expected credit losses over the life of the loan and requires consideration of a broader range of reasonable and supportable information to calculate credit loss estimates. The amendments are effective for public business entities for the first interim and annual reporting periods beginning after December 15, 2019. The Company is currently evaluating the impact of these amendments to the Company’s financial position and results of operations and currently does not know or cannot reasonably quantify the impact of the adoption of the amendments as a result of the complexity and extensive changes from the amendments. The ALLL is a material estimate of the Company and given the change from an incurred loss model to a methodology that considers the credit loss over the life of the loan, there is the potential for an increase in the ALLL at adoption date. The Company is anticipating a significant change in the processes and procedures to calculate the ALLL, including changes in assumptions and estimates to consider expected credit losses over the life of the loan versus the current accounting practice that utilizes the incurred loss model. The Company will also develop new procedures for determining an allowance for credit losses relating to held-to-maturity investment securities. In addition, the current accounting policy and procedures for other-than-temporary impairment on available-for-sale investment securities will be replaced with an allowance approach. The Company is expecting to begin developing and implementing processes and procedures during the next two years to ensure it is fully compliant with the amendments at adoption date. For additional information on the allowance for loan losses, see Note 3.

In March 2016, FASB amended FASB ASC Topic 718, Compensation - Stock Compensation. The amendments in this Update address certain aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification of awards on the statement of cash flows. The amendments were effective for public business entities for the first interim and annual reporting periods beginning after December 15, 2016 and the Company adopted the amendments as of January 1, 2017. The amendments require entities to recognize all income tax effects related to share-based payment awards in the statement of operations when the awards vest or are settled. Previously, income tax benefits at the settlement of awards were reported as increases (or decreases) to additional paid-in capital to the extent that those benefits were greater than (or less than) the income tax benefits recognized in earnings during the awards’ vesting periods. Such amounts are to be classified as an operating activity in the statement of cash flows instead of the prior accounting treatment, which required it to be classified as both an operating and a financing activity. The Company has elected to apply this classification change on a retrospective basis. Also in connection with the adoption of the Update, the Company has elected to change its accounting policy to recognize forfeitures as they occur. The requirement to report income tax effects in earnings has been applied to the settlement of awards on a prospective basis and the impact of applying the guidance reduced reported income tax expense for the three month period ended March 31, 2017 by $537,000, or approximately $0.01 per diluted common share. The implementation of the remaining provisions of the Update did not have a significant impact on the Company’s consolidated financial statements.

In February 2016, FASB amended FASB ASC Topic 842, Leases. The amendments in this Update address several aspects of lease accounting with the significant change being the recognition of lease assets and lease liabilities for leases previously classified as operating leases. The amendments are effective for public business entities for the first interim and annual reporting periods beginning after December 15, 2018, and early adoption is permitted. The Company has several lease agreements for which the amendments will require the Company to recognize a lease liability to make lease payments and a right-of-use asset which will represent its right to use the underlying asset for the lease term. The Company is currently reviewing the amendments to ensure it is fully compliant by the adoption date and doesn’t expect to early adopt. As permitted by the amendments, the Company is anticipating electing an accounting policy to not recognize lease assets and lease liabilities for leases with a term of twelve months or less. The impact is not expected to have a material effect on the Company’s financial position or results of operations since the Company does not have a material amount of lease agreements. The Company is currently in the process of fully evaluating the amendments and will subsequently implement new processes which are not expected to significantly change since the Company already has processes for certain lease agreements that recognize the lease assets and lease liabilities. In addition, the Company will change its current accounting policies to comply with the amendments with such changes as mentioned above.

In January 2016, FASB amended FASB ASC Topic 825, Financial Instruments. The amendments in this Update address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The amendments are effective for public business entities for the first interim and annual reporting periods beginning after December 15, 2017. Early adoption is only permitted under certain circumstances outlined in the amendments. A reporting entity should apply the amendments by means of a cumulative-effect adjustment to the Company’s statement of financial condition as of the beginning of the reporting year of adoption. The amendments will impact the Company in a few areas including requiring equity investments (with certain exclusions) to be measured at fair value with the changes recognized in net income, requirement to utilize an exit price when measuring the fair value of financial instruments, additional disclosures related to other comprehensive income, evaluation of a valuation allowance on a deferred tax asset related to available-for-sale investment securities in combination with the entity’s other deferred tax assets, and other disclosure changes. The Company is currently evaluating the impact of these amendments, but does not expect them to have a material material effect on the Company’s financial position or results of operations since it does not have a material amount of equity securities or a valuation allowance. However, the amendments will have an impact on certain items that are disclosed at fair value that are not currently utilizing the exit price notion when measuring fair value. As of March 31, 2017, the Company cannot quantify the change in the fair value of such disclosures since the Company is currently evaluating the full impact of the Update and is in the planning stages of developing appropriate procedures and processes to comply with the disclosure requirements of such amendments. The current accounting policies and procedures will be modified after the Company has fully evaluated the standard to comply with the accounting changes mentioned above.

In May 2014, FASB amended FASB ASC Topic 606, Revenue from Contracts with Customers. The amendments clarify the principals for recognizing revenue and develop a common revenue standard among industries. The new guidance establishes the following core principal: 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 goods or services. Five steps are provided for a company or organization to follow to achieve such core principle. The new guidance also includes a cohesive set of disclosure requirements that will provide users of financial statements with comprehensive information about the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The entity should apply the amendments using one of two retrospective methods described in the amendment. Accounting Standards Update No. 2015-14, Revenue from Contracts with Customers (Topic 606) delayed the effective date for public entities to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Several subsequent amendments have been issued that provide clarifying guidance and are effective with the adoption of the original Update. Early application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company is in its preliminary stages of evaluating the impact of these amendments, although it doesn’t expect the amendments to have a significant impact to the Company’s financial position or results of operation. The amendments could potentially impact the accounting procedures and processes over the recognition of certain revenue sources, including, but not limited to, non-interest income. The Company is expecting to begin developing processes and procedures during 2017 to ensure it is fully compliant with these amendments at the date of adoption.

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Investment Securities (Tables)

3 Months Ended

Mar. 31, 2017

Investments, Debt and Equity Securities [Abstract]

Amortized cost, gross unrealized gains and losses and fair value of investment securities

The following tables present the amortized cost, the gross unrealized gains and losses and the fair value of the Company’s investment securities:

	March 31, 2017
	Amortized Cost		Gross Unrealized			Fair Value
(Dollars in thousands)			Gains	Losses
Available-for-sale
U.S. government and federal agency	$	37,598	26	(208	)	37,416
U.S. government sponsored enterprises	19,551		31	(46	)	19,536
State and local governments	750,443		21,463	(9,739	)	762,167
Corporate bonds	443,012		1,274	(585	)	443,701
Residential mortgage-backed securities	954,072		2,959	(7,940	)	949,091
Commercial mortgage-backed securities	103,918		26	(1,334	)	102,610
Total available-for-sale	2,308,594		25,779	(19,852	)	2,314,521
Held-to-maturity
State and local governments	667,388		21,125	(8,118	)	680,395
Total held-to-maturity	667,388		21,125	(8,118	)	680,395
Total investment securities	$	2,975,982	46,904	(27,970	)	2,994,916

	December 31, 2016
	Amortized Cost		Gross Unrealized			Fair Value
(Dollars in thousands)			Gains	Losses
Available-for-sale
U.S. government and federal agency	$	39,554	15	(162	)	39,407
U.S. government sponsored enterprises	19,557		55	(42	)	19,570
State and local governments	775,395		20,941	(9,963	)	786,373
Corporate bonds	471,569		1,175	(793	)	471,951
Residential mortgage-backed securities	1,014,518		2,744	(9,747	)	1,007,515
Commercial mortgage-backed securities	102,209		30	(1,578	)	100,661
Total available-for-sale	2,422,802		24,960	(22,285	)	2,425,477
Held-to-maturity
State and local governments	675,674		21,400	(7,985	)	689,089
Total held-to-maturity	675,674		21,400	(7,985	)	689,089
Total investment securities	$	3,098,476	46,360	(30,270	)	3,114,566

Amortized cost and fair value of securities by contractual maturity

The following table presents the amortized cost and fair value of available-for-sale and held-to-maturity securities by contractual maturity at March 31, 2017. Actual maturities may differ from expected or contractual maturities since issuers have the right to prepay obligations with or without prepayment penalties.

	March 31, 2017
	Available-for-Sale			Held-to-Maturity
(Dollars in thousands)	Amortized Cost		Fair Value	Amortized Cost	Fair Value
Due within one year	$	146,875	147,136	—	—
Due after one year through five years	393,309		394,219	593	605
Due after five years through ten years	204,217		207,961	57,405	58,611
Due after ten years	506,203		513,504	609,390	621,179
	1,250,604		1,262,820	667,388	680,395
Mortgage-backed securities 1	1,057,990		1,051,701	—	—
Total	$	2,308,594	2,314,521	667,388	680,395

__________

¹Mortgage-backed securities, which have prepayment provisions, are not assigned to maturity categories due to fluctuations in their prepayment speeds.

Proceeds from sales and calls of investment securities and the associated gains and losses

Proceeds from sales and calls of investment securities and the associated gains and losses that have been included in earnings are listed below:

	Three Months ended
(Dollars in thousands)	March 31, 2017			March 31, 2016
Available-for-sale
Proceeds from sales and calls of investment securities	$	8,491		58,623
Gross realized gains 1	10			800
Gross realized losses 1	(149		)	(739	)
Held-to-maturity
Proceeds from calls of investment securities	7,790			11,155
Gross realized gains 1	81			47
Gross realized losses 1	(42		)	—

__________

¹The gain or loss on the sale or call of each investment security is determined by the specific identification method.

Summary of investments with an unrealized loss position

Investment securities with an unrealized loss position are summarized as follows:

	March 31, 2017
	Less than 12 Months				12 Months or More			Total
(Dollars in thousands)	Fair Value		Unrealized Loss		Fair Value	Unrealized Loss		Fair Value	Unrealized Loss
Available-for-sale
U.S. government and federal agency	$	4,527	(42	)	22,972	(166	)	27,499	(208	)
U.S. government sponsored enterprises	6,048		(46	)	—	—		6,048	(46	)
State and local governments	208,261		(4,716	)	78,082	(5,023	)	286,343	(9,739	)
Corporate bonds	142,028		(575	)	6,128	(10	)	148,156	(585	)
Residential mortgage-backed securities	636,458		(7,670	)	27,561	(270	)	664,019	(7,940	)
Commercial mortgage-backed securities	100,570		(1,334	)	—	—		100,570	(1,334	)
Total available-for-sale	$	1,097,892	(14,383	)	134,743	(5,469	)	1,232,635	(19,852	)
Held-to-maturity
State and local governments	$	105,671	(1,644	)	85,782	(6,474	)	191,453	(8,118	)
Total held-to-maturity	$	105,671	(1,644	)	85,782	(6,474	)	191,453	(8,118	)

	December 31, 2016
	Less than 12 Months				12 Months or More			Total
(Dollars in thousands)	Fair Value		Unrealized Loss		Fair Value	Unrealized Loss		Fair Value	Unrealized Loss
Available-for-sale
U.S. government and federal agency	$	6,718	(24	)	26,239	(138	)	32,957	(162	)
U.S. government sponsored enterprises	6,049		(42	)	—	—		6,049	(42	)
State and local governments	222,700		(4,949	)	81,783	(5,014	)	304,483	(9,963	)
Corporate bonds	174,821		(774	)	6,141	(19	)	180,962	(793	)
Residential mortgage-backed securities	688,811		(9,079	)	29,957	(668	)	718,768	(9,747	)
Commercial mortgage-backed securities	89,298		(1,578	)	—	—		89,298	(1,578	)
Total available-for-sale	$	1,188,397	(16,446	)	144,120	(5,839	)	1,332,517	(22,285	)
Held-to-maturity
State and local governments	$	117,912	(1,712	)	86,601	(6,273	)	204,513	(7,985	)
Total held-to-maturity	$	117,912	(1,712	)	86,601	(6,273	)	204,513	(7,985	)

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Loans Receivable, Net (Tables)

3 Months Ended

Mar. 31, 2017

Receivables [Abstract]

Summary of loans receivable

The following table presents loans receivable for each portfolio class of loans:

	At or for the Three Months ended			At or for the Year ended
(Dollars in thousands)	March 31, 2017			December 31, 2016
Residential real estate loans	$	685,458		674,347
Commercial loans
Real estate	3,056,372			2,990,141
Other commercial	1,462,110			1,342,250
Total	4,518,482			4,332,391
Consumer and other loans
Home equity	433,554			434,774
Other consumer	239,480			242,951
Total	673,034			677,725
Loans receivable 1	5,876,974			5,684,463
Allowance for loan and lease losses	(129,226		)	(129,572	)
Loans receivable, net	$	5,747,748		5,554,891
Weighted-average interest rate on loans (tax-equivalent)	4.73		%	4.77	%

__________

¹  Includes net deferred fees, costs, premiums and discounts of $12,017,000 and $13,372,000 at March 31, 2017 and December 31, 2016, respectively.

Summary of the activity in the ALLL

The following tables summarize the activity in the ALLL by portfolio segment:

	Three Months ended March 31, 2017
(Dollars in thousands)	Total			Residential Real Estate		Commercial Real Estate		Other Commercial		Home Equity		Other Consumer
Balance at beginning of period	$	129,572		12,436		65,773		37,823		7,572		5,968
Provision for loan losses	1,598			(926	)	(370	)	1,621		129		1,144
Charge-offs	(4,229		)	(22	)	(888	)	(471	)	(96	)	(2,752	)
Recoveries	2,285			47		238		184		74		1,742
Balance at end of period	$	129,226		11,535		64,753		39,157		7,679		6,102

	Three Months ended March 31, 2016
(Dollars in thousands)	Total			Residential Real Estate		Commercial Real Estate		Other Commercial		Home Equity		Other Consumer
Balance at beginning of period	$	129,697		14,427		67,877		32,525		8,998		5,870
Provision for loan losses	568			(1,149	)	(873	)	3,720		(793	)	(337	)
Charge-offs	(1,163		)	(100	)	(253	)	(324	)	(229	)	(257	)
Recoveries	969			18		295		133		173		350
Balance at end of period	$	130,071		13,196		67,046		36,054		8,149		5,626

Summary of ALLL and loans receivable

The following tables disclose the balance in the ALLL and the recorded investment in loans by portfolio segment:

	March 31, 2017
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Allowance for loan and lease losses
Individually evaluated for impairment	$	6,787	245	545	5,047	551	399
Collectively evaluated for impairment	122,439		11,290	64,208	34,110	7,128	5,703
Total allowance for loan and lease losses	$	129,226	11,535	64,753	39,157	7,679	6,102
Loans receivable
Individually evaluated for impairment	$	135,086	13,048	85,452	27,050	6,449	3,087
Collectively evaluated for impairment	5,741,888		672,410	2,970,920	1,435,060	427,105	236,393
Total loans receivable	$	5,876,974	685,458	3,056,372	1,462,110	433,554	239,480

	December 31, 2016
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Allowance for loan and lease losses
Individually evaluated for impairment	$	6,881	856	922	4,419	296	388
Collectively evaluated for impairment	122,691		11,580	64,851	33,404	7,276	5,580
Total allowance for loan and lease losses	$	129,572	12,436	65,773	37,823	7,572	5,968
Loans receivable
Individually evaluated for impairment	$	130,263	11,612	85,634	23,950	5,934	3,133
Collectively evaluated for impairment	5,554,200		662,735	2,904,507	1,318,300	428,840	239,818
Total loans receivable	$	5,684,463	674,347	2,990,141	1,342,250	434,774	242,951

Summary of impaired loans

The following tables disclose information related to impaired loans by portfolio segment:

	At or for the Three Months ended March 31, 2017
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Loans with a specific valuation allowance
Recorded balance	$	19,877	2,891	5,279	10,053	546	1,108
Unpaid principal balance	20,139		2,955	5,285	10,190	559	1,150
Specific valuation allowance	6,787		245	545	5,047	551	399
Average balance	21,003		2,825	7,204	9,434	440	1,100
Loans without a specific valuation allowance
Recorded balance	$	115,209	10,157	80,173	16,997	5,903	1,979
Unpaid principal balance	138,436		11,224	98,480	19,350	7,323	2,059
Average balance	111,672		9,505	78,339	16,067	5,751	2,010
Total
Recorded balance	$	135,086	13,048	85,452	27,050	6,449	3,087
Unpaid principal balance	158,575		14,179	103,765	29,540	7,882	3,209
Specific valuation allowance	6,787		245	545	5,047	551	399
Average balance	132,675		12,330	85,543	25,501	6,191	3,110

	At or for the Year ended December 31, 2016
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Loans with a specific valuation allowance
Recorded balance	$	22,128	2,759	9,129	8,814	334	1,092
Unpaid principal balance	22,374		2,825	9,130	8,929	345	1,145
Specific valuation allowance	6,881		856	922	4,419	296	388
Average balance	26,745		4,942	10,441	9,840	257	1,265
Loans without a specific valuation allowance
Recorded balance	$	108,135	8,853	76,505	15,136	5,600	2,041
Unpaid principal balance	131,059		9,925	94,180	17,724	7,120	2,110
Average balance	108,827		12,858	72,323	15,537	6,004	2,105
Total
Recorded balance	$	130,263	11,612	85,634	23,950	5,934	3,133
Unpaid principal balance	153,433		12,750	103,310	26,653	7,465	3,255
Specific valuation allowance	6,881		856	922	4,419	296	388
Average balance	135,572		17,800	82,764	25,377	6,261	3,370

Loan portfolio aging analysis

The following tables present an aging analysis of the recorded investment in loans by portfolio segment:

	March 31, 2017
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Accruing loans 30-59 days past due	$	27,122	5,255	11,294	7,657	1,555	1,361
Accruing loans 60-89 days past due	12,038		431	8,100	2,259	641	607
Accruing loans 90 days or more past due	3,028		—	203	2,441	336	48
Non-accrual loans	50,674		5,949	30,277	8,301	5,619	528
Total past due and non-accrual loans	92,862		11,635	49,874	20,658	8,151	2,544
Current loans receivable	5,784,112		673,823	3,006,498	1,441,452	425,403	236,936
Total loans receivable	$	5,876,974	685,458	3,056,372	1,462,110	433,554	239,480

	December 31, 2016
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Accruing loans 30-59 days past due	$	20,599	6,338	5,079	5,388	2,439	1,355
Accruing loans 60-89 days past due	5,018		1,398	754	1,352	844	670
Accruing loans 90 days or more past due	1,099		266	145	283	191	214
Non-accrual loans	49,332		4,528	30,216	8,817	5,240	531
Total past due and non-accrual loans	76,048		12,530	36,194	15,840	8,714	2,770
Current loans receivable	5,608,415		661,817	2,953,947	1,326,410	426,060	240,181
Total loans receivable	$	5,684,463	674,347	2,990,141	1,342,250	434,774	242,951

Summary of TDRs

The following tables present TDRs that occurred during the periods presented and the TDRs that occurred within the previous twelve months that subsequently defaulted during the periods presented:

	Three Months ended March 31, 2017
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
TDRs that occurred during the period
Number of loans	10		2	2	4	1	1
Pre-modification recorded balance	$	9,555	280	582	8,530	153	10
Post-modification recorded balance	$	9,552	280	582	8,530	153	7
TDRs that subsequently defaulted
Number of loans	2		—	—	1	—	1
Recorded balance	$	25	—	—	18	—	7

	Three Months ended March 31, 2016
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
TDRs that occurred during the period
Number of loans	3		—	1	1	1	—
Pre-modification recorded balance	$	8,959	—	56	8,755	148	—
Post-modification recorded balance	$	8,959	—	56	8,755	148	—
TDRs that subsequently defaulted
Number of loans	—		—	—	—	—	—
Recorded balance	$	—	—	—	—	—	—

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Goodwill (Tables)

3 Months Ended

Mar. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Gross carrying value of goodwill and the accumulated impairment charge

The gross carrying value of goodwill and the accumulated impairment charge consists of the following:

(Dollars in thousands)	March 31, 2017			December 31, 2016
Gross carrying value	$	187,212		187,212
Accumulated impairment charge 1	(40,159		)	(40,159	)
Net carrying value	$	147,053		147,053

__________

¹ A goodwill impairment charge was recognized in 2011 and was due to high levels of volatility and dislocation in bank stock prices nationwide.

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Variable Interest Entities (Tables)

3 Months Ended

Mar. 31, 2017

Equity Method Investments and Joint Ventures [Abstract]

Carrying amounts of consolidated VIEs' assets and liabilities

The following table summarizes the carrying amounts of the consolidated VIEs’ assets and liabilities included in the Company’s statements of financial condition and are adjusted for intercompany eliminations. All assets presented can be used only to settle obligations of the consolidated VIEs and all liabilities presented consist of liabilities for which creditors and other beneficial interest holders therein have no recourse to the general credit of the Company.

(Dollars in thousands)	March 31, 2017		December 31, 2016
Assets
Loans receivable	$	43,143	36,950
Accrued interest receivable	125		120
Other assets	2,095		1,984
Total assets	$	45,363	39,054
Liabilities
Other borrowed funds	$	8,577	4,105
Accrued interest payable	6		2
Other liabilities	22		27
Total liabilities	$	8,605	4,134

Amortization expense and tax credits and other tax benefits recognized for qualified affordable housing project investments

The following table summarizes the amortization expense and the amount of tax credits and other tax benefits recognized for qualified affordable housing project investments during the periods presented.

	Three Months ended
(Dollars in thousands)	March 31, 2017		March 31, 2016
Amortization expense	$	503	255
Tax credits and other tax benefits recognized	776		392

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Securities Sold Under Agreements to Repurchase Securities Sold Under Agreements to Repurchase (Tables)

3 Months Ended

Mar. 31, 2017

Transfers and Servicing [Abstract]

Carrying Value of Repurchase Agreements

The following tables summarize the carrying value of the Company’s repurchase agreements by remaining contractual maturity and category of collateral:

	March 31, 2017
	Remaining Contractual Maturity of the Agreements
(Dollars in thousands)	Overnight and Continuous		Up to 30 Days	Total
Residential mortgage-backed securities	$	484,126	—	484,126
Commercial mortgage-backed securities	13,061		—	13,061
Total	$	497,187	—	497,187

	December 31, 2016
	Remaining Contractual Maturity of the Agreements
(Dollars in thousands)	Overnight and Continuous		Up to 30 Days	Total
Residential mortgage-backed securities	$	471,706	643	472,349
Commercial mortgage-backed securities	1,301		—	1,301
Total	$	473,007	643	473,650

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Derivatives and Hedging Activities (Tables)

3 Months Ended

Mar. 31, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Summary of interest rate swap derivative financial instruments

As of March 31, 2017, the Company’s interest rate swap derivative financial instruments were designated as cash flow hedges and are summarized as follows:

(Dollars in thousands)	Forecasted Notional  Amount		Variable Interest Rate 1	Fixed Interest Rate 1		Payment Term
Interest rate swap	$	160,000	3 month LIBOR	3.378	%	Oct. 21, 2014 - Oct. 21, 2021
Interest rate swap	100,000		3 month LIBOR	2.498	%	Nov. 30, 2015 - Nov. 30, 2022

__________

¹The Company pays the fixed interest rate and the counterparty pays the Company the variable interest rate.

Summary of Pre-Tax Gains or Losses

The following table presents the pre-tax gains or losses recorded in accumulated other comprehensive income and the Company’s statements of operations relating to the interest rate swap derivative financial instruments:

	Three Months ended
(Dollars in thousands)	March 31, 2017			March 31, 2016
Interest rate swaps
Amount of gain (loss) recognized in OCI (effective portion)	$	264		(9,928	)
Amount of loss reclassified from OCI to interest expense	(1,332		)	(1,829	)
Amount of loss recognized in other non-interest expense (ineffective portion)	—			—

Offsetting liabilities

The following table discloses the offsetting of financial liabilities and interest rate swap derivative liabilities. There were no interest rate swap derivative assets at the dates presented.

	March 31, 2017				December 31, 2016
(Dollars in thousands)	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Statements of Financial Position	Net Amounts of Liabilities Presented in the Statements of Financial Position	Gross Amounts of Recognized Liabilities	Gross Amounts Offset in the Statements of Financial Position	Net Amounts of Liabilities Presented in the Statements of Financial Position
Interest rate swaps	$	13,129	—	13,129	14,725	—	14,725

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Other Expenses (Tables)

3 Months Ended

Mar. 31, 2017

Other Expenses [Abstract]

Schedule of Other Expenses

Other expenses consists of the following:

	Three Months ended
(Dollars in thousands)	March 31, 2017		March 31, 2016
Debit card expenses	$	1,718	1,849
Consulting and outside services	1,420		1,014
Telephone	977		960
Loan expenses	891		783
Employee expenses	789		579
Postage	725		880
Printing and supplies	640		943
Accounting and audit fees	512		391
VIE amortization and other expenses	464		639
Checking and operating expenses	365		694
Business development	340		342
Legal fees	340		237
ATM expenses	312		255
Other	927		980
Total other expenses	$	10,420	10,546

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Accumulated Other Comprehensive Income (Loss) (Tables)

3 Months Ended

Mar. 31, 2017

Equity [Abstract]

Activity within Accumulated Other Comprehensive Income, Net of Tax

The following table illustrates the activity within accumulated other comprehensive income (loss) by component, net of tax:

(Dollars in thousands)	Gains on Available-For-Sale Securities			Losses on Derivatives Used for Cash Flow Hedges		Total
Balance at December 31, 2015	$	13,935		(11,946	)	1,989
Other comprehensive income (loss) before reclassifications	8,331			(6,082	)	2,249
Amounts reclassified from accumulated other comprehensive (loss) income	(38		)	1,121		1,083
Net current period other comprehensive income (loss)	8,293			(4,961	)	3,332
Balance at March 31, 2016	$	22,228		(16,907	)	5,321
Balance at December 31, 2016	$	1,639		(9,021	)	(7,382	)
Other comprehensive income before reclassifications	1,907			162		2,069
Amounts reclassified from accumulated other comprehensive income	85			816		901
Net current period other comprehensive income	1,992			978		2,970
Balance at March 31, 2017	$	3,631		(8,043	)	(4,412	)

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Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2017

Earnings Per Share [Abstract]

Basic and diluted earnings per share

Basic and diluted earnings per share has been computed based on the following:

	Three Months ended
(Dollars in thousands, except per share data)	March 31, 2017		March 31, 2016
Net income available to common stockholders, basic and diluted	$	31,255	28,682
Average outstanding shares - basic	76,572,116		76,126,251
Add: dilutive restricted stock awards	61,167		47,166
Average outstanding shares - diluted	76,633,283		76,173,417
Basic earnings per share	$	0.41	0.38
Diluted earnings per share	$	0.41	0.38

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Fair Value of Assets and Liabilities (Tables)

3 Months Ended

Mar. 31, 2017

Fair Value Disclosures [Abstract]

Fair value measurement of assets and liabilities measured at fair value on a recurring basis

The following tables disclose the fair value measurement of assets and liabilities measured at fair value on a recurring basis:

			Fair Value Measurements At the End of the Reporting Period Using
(Dollars in thousands)	Fair Value March 31, 2017		Quoted Prices in Active  Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Investment securities, available-for-sale
U.S. government and federal agency	$	37,416	—	37,416	—
U.S. government sponsored enterprises	19,536		—	19,536	—
State and local governments	762,167		—	762,167	—
Corporate bonds	443,701		—	443,701	—
Residential mortgage-backed securities	949,091		—	949,091	—
Commercial mortgage-backed securities	102,610		—	102,610	—
Total assets measured at fair value on a recurring basis	$	2,314,521	—	2,314,521	—
Interest rate swaps	$	13,129	—	13,129	—
Total liabilities measured at fair value on a recurring basis	$	13,129	—	13,129	—

			Fair Value Measurements At the End of the Reporting Period Using
(Dollars in thousands)	Fair Value December 31, 2016		Quoted Prices in Active  Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Investment securities, available-for-sale
U.S. government and federal agency	$	39,407	—	39,407	—
U.S. government sponsored enterprises	19,570		—	19,570	—
State and local governments	786,373		—	786,373	—
Corporate bonds	471,951		—	471,951	—
Residential mortgage-backed securities	1,007,515		—	1,007,515	—
Commercial mortgage-backed securities	100,661		—	100,661	—
Total assets measured at fair value on a recurring basis	$	2,425,477	—	2,425,477	—
Interest rate swaps	$	14,725	—	14,725	—
Total liabilities measured at fair value on a recurring basis	$	14,725	—	14,725	—

Fair value measurement of assets measured at fair value on a non-recurring basis

The following tables disclose the fair value measurement of assets with a recorded change during the period resulting from re-measuring the assets at fair value on a non-recurring basis:

			Fair Value Measurements At the End of the Reporting Period Using
(Dollars in thousands)	Fair Value March 31, 2017		Quoted Prices in Active  Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Other real estate owned	$	147	—	—	147
Collateral-dependent impaired loans, net of ALLL	7,601		—	—	7,601
Total assets measured at fair value on a non-recurring basis	$	7,748	—	—	7,748

			Fair Value Measurements At the End of the Reporting Period Using
(Dollars in thousands)	Fair Value December 31, 2016		Quoted Prices in Active  Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Other real estate owned	$	7,839	—	—	7,839
Collateral-dependent impaired loans, net of ALLL	5,664		—	—	5,664
Total assets measured at fair value on a non-recurring basis	$	13,503	—	—	13,503

Quantitative information about assets measured at fair value on a non-recurring basis for which Level 3 inputs were used

The following tables present additional quantitative information about assets measured at fair value on a non-recurring basis and for which the Company has utilized Level 3 inputs to determine fair value:

	Fair Value March 31, 2017		Quantitative Information about Level 3 Fair Value Measurements
(Dollars in thousands)			Valuation Technique	Unobservable Input	Range (Weighted-Average) 1
Other real estate owned	$	147	Sales comparison approach	Selling costs	8.0% - 8.0% (8.0%)
Collateral-dependent impaired loans, net of ALLL	$	5	Cost approach	Selling costs	20.0% - 20.0% (20.0%)
	2,994		Sales comparison approach	Selling costs	8.0% - 10.0% (9.7%)
	4,602		Combined approach	Selling costs	10.0% - 10.0% (10.0%)
				Adjustment to comparables	20.0% - 20.0% (20.0%)
	$	7,601

	Fair Value December 31, 2016		Quantitative Information about Level 3 Fair Value Measurements
(Dollars in thousands)			Valuation Technique	Unobservable Input	Range (Weighted-Average) 1
Other real estate owned	$	7,767	Sales comparison approach	Selling costs	6.0% - 10.0% (6.9%)
				Adjustment to comparables	0.0% - 10.0% (0.1%)
	72		Combined approach	Selling costs	10.0% - 10.0% (10.0%)
				Adjustment to comparables	10.0% - 10.0% (10.0%)
	$	7,839
Collateral-dependent impaired loans, net of ALLL	$	110	Cost approach	Selling costs	6.0% - 20.0% (6.6%)
	1,982		Sales comparison approach	Selling costs	8.0% - 10.0% (9.6%)
	3,572		Combined approach	Selling costs	10.0% - 10.0% (10.0%)
				Adjustment to comparables	20.0% - 20.0% (20.0%)
	$	5,664

__________

¹ The range for selling costs and adjustments to comparables indicate reductions to the fair value.

Carrying amounts and estimated fair values of financial instruments

The following tables present the carrying amounts, estimated fair values and the level within the fair value hierarchy of the Company’s financial instruments:

			Fair Value Measurements At the End of the Reporting Period Using
(Dollars in thousands)	Carrying Amount March 31, 2017		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Financial assets
Cash and cash equivalents	$	234,004	234,004	—	—
Investment securities, available-for-sale	2,314,521		—	2,314,521	—
Investment securities, held-to-maturity	667,388		—	680,395	—
Loans held for sale	25,649		25,649	—	—
Loans receivable, net of ALLL	5,747,748		—	5,558,406	128,299
Accrued interest receivable	48,043		48,043	—	—
Non-marketable equity securities	23,944		—	23,944	—
Total financial assets	$	9,061,297	307,696	8,577,266	128,299
Financial liabilities
Deposits	$	7,480,157	6,197,583	1,284,399	—
FHLB advances	211,627		—	217,435	—
Repurchase agreements and other borrowed funds	506,081		—	506,081	—
Subordinated debentures	126,027		—	89,136	—
Accrued interest payable	3,467		3,467	—	—
Interest rate swaps	13,129		—	13,129	—
Total financial liabilities	$	8,340,488	6,201,050	2,110,180	—

			Fair Value Measurements At the End of the Reporting Period Using
(Dollars in thousands)	Carrying Amount December 31, 2016		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Financial assets
Cash and cash equivalents	$	152,541	152,541	—	—
Investment securities, available-for-sale	2,425,477		—	2,425,477	—
Investment securities, held-to-maturity	675,674		—	689,089	—
Loans held for sale	72,927		72,927	—	—
Loans receivable, net of ALLL	5,554,891		—	5,380,286	123,382
Accrued interest receivable	45,832		45,832	—	—
Non-marketable equity securities	25,550		—	25,550	—
Total financial assets	$	8,952,892	271,300	8,520,402	123,382
Financial liabilities
Deposits	$	7,372,279	6,090,879	1,283,532	—
FHLB advances	251,749		—	257,643	—
Repurchase agreements and other borrowed funds	478,090		—	478,090	—
Subordinated debentures	125,991		—	85,557	—
Accrued interest payable	3,584		3,584	—	—
Interest rate swaps	14,725		—	14,725	—
Total financial liabilities	$	8,246,418	6,094,463	2,119,547	—

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Nature of Operations and Summary of Significant Accounting Policies (Details Textual)	3 Months Ended
	Mar. 31, 2017 USD ($) quarter step operating_segment division $ / shares
Number of Bank Divisions | division	13
Number of Operating Segments | operating_segment	1
Minimum Period Past Due to Consider Loan as Delinquent	30 days
Minimum Period Past Due to Consider Loan as Non Accrual	90 days
Number of Quarters Used to Evaluate Historical Loss Experience | quarter	12
Period to begin developing and implementing processes and procedures for FASB Update	2 years
Effect of change on net income from applying new accounting pronouncement | $	$ 537,000
Effect of change on diluted earnings per share from applying new accounting pronouncement | $ / shares	$ 0.01
Maximum lease term to not recognize lease assets and liabilities	12 months
Number of Steps to Achieve Core Revenue Recognition Principal | step	5
Consumer and Other
Minimum Number of Days Delinquent to Charge off Loans	120 days
Minimum Range
Number of years for home equity loan origination term	10 years
Maximum Range
Number of years for home equity loan origination term	15 years

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Amortized Cost, Gross Unrealized Gains and Losses and Fair Value of Investment Securities (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Available-for-sale
Amortized Cost	$ 2,308,594	$ 2,422,802
Gross Unrealized Gains	25,779	24,960
Gross Unrealized Losses	(19,852)	(22,285)
Fair Value	2,314,521	2,425,477
Held-to-maturity
Amortized Cost	667,388	675,674
Gross Unrealized Gains	21,125	21,400
Gross Unrealized Losses	(8,118)	(7,985)
Fair Value	680,395	689,089
Total
Amortized Cost	2,975,982	3,098,476
Gross Unrealized Gains	46,904	46,360
Gross Unrealized Losses	(27,970)	(30,270)
Fair Value	2,994,916	3,114,566
U.S. government and federal agency
Available-for-sale
Amortized Cost	37,598	39,554
Gross Unrealized Gains	26	15
Gross Unrealized Losses	(208)	(162)
Fair Value	37,416	39,407
U.S. government sponsored enterprises
Available-for-sale
Amortized Cost	19,551	19,557
Gross Unrealized Gains	31	55
Gross Unrealized Losses	(46)	(42)
Fair Value	19,536	19,570
State and local governments
Available-for-sale
Amortized Cost	750,443	775,395
Gross Unrealized Gains	21,463	20,941
Gross Unrealized Losses	(9,739)	(9,963)
Fair Value	762,167	786,373
Held-to-maturity
Amortized Cost	667,388	675,674
Gross Unrealized Gains	21,125	21,400
Gross Unrealized Losses	(8,118)	(7,985)
Fair Value	680,395	689,089
Corporate bonds
Available-for-sale
Amortized Cost	443,012	471,569
Gross Unrealized Gains	1,274	1,175
Gross Unrealized Losses	(585)	(793)
Fair Value	443,701	471,951
Residential mortgage-backed securities
Available-for-sale
Amortized Cost	954,072	1,014,518
Gross Unrealized Gains	2,959	2,744
Gross Unrealized Losses	(7,940)	(9,747)
Fair Value	949,091	1,007,515
Commercial mortgage-backed securities
Available-for-sale
Amortized Cost	103,918	102,209
Gross Unrealized Gains	26	30
Gross Unrealized Losses	(1,334)	(1,578)
Fair Value	$ 102,610	$ 100,661

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Investment Securities Maturity Schedule (Details) - USD ($) $ in Thousands		Mar. 31, 2017	Dec. 31, 2016
Available-for-Sale, Amortized Cost
Due within one year		$ 146,875
Due after one year through five years		393,309
Due after five years through ten years		204,217
Due after ten years		506,203
Total before mortgage-backed securities		1,250,604
Total		2,308,594	$ 2,422,802
Available-for-Sale, Fair Value
Due within one year		147,136
Due after one year through five years		394,219
Due after five years through ten years		207,961
Due after ten years		513,504
Total before mortgage-backed securities		1,262,820
Total		2,314,521	2,425,477
Held-to-Maturity, Amortized Cost
Due within one year		0
Due after one year through five years		593
Due after five years through ten years		57,405
Due after ten years		609,390
Total before mortgage-backed securities		667,388
Amortized Cost		667,388	675,674
Held-to-Maturity, Fair Value
Due within one year		0
Due after one year through five years		605
Due after five years through ten years		58,611
Due after ten years		621,179
Total before mortgage-backed securities		680,395
Total		680,395	$ 689,089
Mortgage-backed securities
Available-for-Sale, Amortized Cost
Mortgage-backed securities	[1]	1,057,990
Available-for-Sale, Fair Value
Mortgage-backed securities	[1]	1,051,701
Held-to-Maturity, Amortized Cost
Mortgage-backed securities	[1]	0
Held-to-Maturity, Fair Value
Mortgage-backed securities	[1]	$ 0

[1] Mortgage-backed securities, which have prepayment provisions, are not assigned to maturity categories due to fluctuations in their prepayment speeds.

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Proceeds From Sales and Calls of Investment Securities and Associates Gains or Losses (Details) - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2017	Mar. 31, 2016
Available-for-sale
Proceeds from sales and calls of investment securities		$ 8,491	$ 58,623
Gross realized gains	[1]	10	800
Gross realized losses	[1]	(149)	(739)
Held-to-maturity
Proceeds from calls of investment securities		7,790	11,155
Gross realized gains	[1]	81	47
Gross realized losses	[1]	$ (42)	$ 0

[1] The gain or loss on the sale or call of each investment security is determined by the specific identification method.

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Investment with an Unrealized Loss Position (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Available-for-sale, Fair Value
Less than 12 Months	$ 1,097,892	$ 1,188,397
12 Months or More	134,743	144,120
Total	1,232,635	1,332,517
Available-for-sale, Unrealized Loss
Less than 12 Months	(14,383)	(16,446)
12 Months or More	(5,469)	(5,839)
Total	(19,852)	(22,285)
Held-to-maturity, Fair Value
Less than 12 Months	105,671	117,912
12 Months or More	85,782	86,601
Total	191,453	204,513
Held-to-maturity, Unrealized Loss
Less than 12 Months	(1,644)	(1,712)
12 Months or More	(6,474)	(6,273)
Total	(8,118)	(7,985)
U.S. government and federal agency
Available-for-sale, Fair Value
Less than 12 Months	4,527	6,718
12 Months or More	22,972	26,239
Total	27,499	32,957
Available-for-sale, Unrealized Loss
Less than 12 Months	(42)	(24)
12 Months or More	(166)	(138)
Total	(208)	(162)
U.S. government sponsored enterprises
Available-for-sale, Fair Value
Less than 12 Months	6,048	6,049
12 Months or More	0	0
Total	6,048	6,049
Available-for-sale, Unrealized Loss
Less than 12 Months	(46)	(42)
12 Months or More	0	0
Total	(46)	(42)
State and local governments
Available-for-sale, Fair Value
Less than 12 Months	208,261	222,700
12 Months or More	78,082	81,783
Total	286,343	304,483
Available-for-sale, Unrealized Loss
Less than 12 Months	(4,716)	(4,949)
12 Months or More	(5,023)	(5,014)
Total	(9,739)	(9,963)
Held-to-maturity, Fair Value
Less than 12 Months	105,671	117,912
12 Months or More	85,782	86,601
Total	191,453	204,513
Held-to-maturity, Unrealized Loss
Less than 12 Months	(1,644)	(1,712)
12 Months or More	(6,474)	(6,273)
Total	(8,118)	(7,985)
Corporate bonds
Available-for-sale, Fair Value
Less than 12 Months	142,028	174,821
12 Months or More	6,128	6,141
Total	148,156	180,962
Available-for-sale, Unrealized Loss
Less than 12 Months	(575)	(774)
12 Months or More	(10)	(19)
Total	(585)	(793)
Residential mortgage-backed securities
Available-for-sale, Fair Value
Less than 12 Months	636,458	688,811
12 Months or More	27,561	29,957
Total	664,019	718,768
Available-for-sale, Unrealized Loss
Less than 12 Months	(7,670)	(9,079)
12 Months or More	(270)	(668)
Total	(7,940)	(9,747)
Commercial mortgage-backed securities
Available-for-sale, Fair Value
Less than 12 Months	100,570	89,298
12 Months or More	0	0
Total	100,570	89,298
Available-for-sale, Unrealized Loss
Less than 12 Months	(1,334)	(1,578)
12 Months or More	0	0
Total	$ (1,334)	$ (1,578)

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Investment Securities (Details Textual) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Investments, Debt and Equity Securities [Abstract]
Other-than-temporary impairment on investment securities	$ 0	$ 0

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Loans Receivable, Net Summary of Loans Receivable (Details) - USD ($)		3 Months Ended	12 Months Ended
		Mar. 31, 2017	Dec. 31, 2016
Summary of Loans Receivable
Loans receivable	[1]	$ 5,876,974,000	$ 5,684,463,000
Allowance for loan and lease losses		(129,226,000)	(129,572,000)
Loans receivable, net		$ 5,747,748,000	$ 5,554,891,000
Weighted-average interest rate on loans (tax-equivalent)		4.73%	4.77%
Net deferred fees, costs, premiums, and discounts included in loans receivable		$ 12,017,000	$ 13,372,000
Residential Real Estate | Residential Real Estate
Summary of Loans Receivable
Loans receivable		685,458,000	674,347,000
Allowance for loan and lease losses		(11,535,000)	(12,436,000)
Commercial
Summary of Loans Receivable
Loans receivable		4,518,482,000	4,332,391,000
Commercial | Commercial Real Estate
Summary of Loans Receivable
Loans receivable		3,056,372,000	2,990,141,000
Allowance for loan and lease losses		(64,753,000)	(65,773,000)
Commercial | Other Commercial
Summary of Loans Receivable
Loans receivable		1,462,110,000	1,342,250,000
Allowance for loan and lease losses		(39,157,000)	(37,823,000)
Consumer and Other
Summary of Loans Receivable
Loans receivable		673,034,000	677,725,000
Consumer and Other | Home Equity
Summary of Loans Receivable
Loans receivable		433,554,000	434,774,000
Allowance for loan and lease losses		(7,679,000)	(7,572,000)
Consumer and Other | Other Consumer
Summary of Loans Receivable
Loans receivable		239,480,000	242,951,000
Allowance for loan and lease losses		$ (6,102,000)	$ (5,968,000)

[1] Includes net deferred fees, costs, premiums and discounts of $12,017,000 and $13,372,000 at March 31, 2017 and December 31, 2016, respectively.

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ALLL Activity (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Allowance for loan and lease losses
Balance at beginning of period	$ 129,572	$ 129,697
Provision for loan losses	1,598	568
Charge-offs	(4,229)	(1,163)
Recoveries	2,285	969
Balance at end of period	129,226	130,071
Residential Real Estate | Residential Real Estate
Allowance for loan and lease losses
Balance at beginning of period	12,436	14,427
Provision for loan losses	(926)	(1,149)
Charge-offs	(22)	(100)
Recoveries	47	18
Balance at end of period	11,535	13,196
Commercial | Commercial Real Estate
Allowance for loan and lease losses
Balance at beginning of period	65,773	67,877
Provision for loan losses	(370)	(873)
Charge-offs	(888)	(253)
Recoveries	238	295
Balance at end of period	64,753	67,046
Commercial | Other Commercial
Allowance for loan and lease losses
Balance at beginning of period	37,823	32,525
Provision for loan losses	1,621	3,720
Charge-offs	(471)	(324)
Recoveries	184	133
Balance at end of period	39,157	36,054
Consumer and Other | Home Equity
Allowance for loan and lease losses
Balance at beginning of period	7,572	8,998
Provision for loan losses	129	(793)
Charge-offs	(96)	(229)
Recoveries	74	173
Balance at end of period	7,679	8,149
Consumer and Other | Other Consumer
Allowance for loan and lease losses
Balance at beginning of period	5,968	5,870
Provision for loan losses	1,144	(337)
Charge-offs	(2,752)	(257)
Recoveries	1,742	350
Balance at end of period	$ 6,102	$ 5,626

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ALLL and Loans Receivable Summary (Details) - USD ($) $ in Thousands		Mar. 31, 2017	Dec. 31, 2016
Allowance for Loan and Lease Losses and Loans Receivable
Individually evaluated for impairment		$ 6,787	$ 6,881
Collectively evaluated for impairment		122,439	122,691
Total allowance for loan and lease losses		129,226	129,572
Individually evaluated for impairment		135,086	130,263
Collectively evaluated for impairment		5,741,888	5,554,200
Total loans receivable	[1]	5,876,974	5,684,463
Residential Real Estate | Residential Real Estate
Allowance for Loan and Lease Losses and Loans Receivable
Individually evaluated for impairment		245	856
Collectively evaluated for impairment		11,290	11,580
Total allowance for loan and lease losses		11,535	12,436
Individually evaluated for impairment		13,048	11,612
Collectively evaluated for impairment		672,410	662,735
Total loans receivable		685,458	674,347
Commercial
Allowance for Loan and Lease Losses and Loans Receivable
Total loans receivable		4,518,482	4,332,391
Commercial | Commercial Real Estate
Allowance for Loan and Lease Losses and Loans Receivable
Individually evaluated for impairment		545	922
Collectively evaluated for impairment		64,208	64,851
Total allowance for loan and lease losses		64,753	65,773
Individually evaluated for impairment		85,452	85,634
Collectively evaluated for impairment		2,970,920	2,904,507
Total loans receivable		3,056,372	2,990,141
Commercial | Other Commercial
Allowance for Loan and Lease Losses and Loans Receivable
Individually evaluated for impairment		5,047	4,419
Collectively evaluated for impairment		34,110	33,404
Total allowance for loan and lease losses		39,157	37,823
Individually evaluated for impairment		27,050	23,950
Collectively evaluated for impairment		1,435,060	1,318,300
Total loans receivable		1,462,110	1,342,250
Consumer and Other
Allowance for Loan and Lease Losses and Loans Receivable
Total loans receivable		673,034	677,725
Consumer and Other | Home Equity
Allowance for Loan and Lease Losses and Loans Receivable
Individually evaluated for impairment		551	296
Collectively evaluated for impairment		7,128	7,276
Total allowance for loan and lease losses		7,679	7,572
Individually evaluated for impairment		6,449	5,934
Collectively evaluated for impairment		427,105	428,840
Total loans receivable		433,554	434,774
Consumer and Other | Other Consumer
Allowance for Loan and Lease Losses and Loans Receivable
Individually evaluated for impairment		399	388
Collectively evaluated for impairment		5,703	5,580
Total allowance for loan and lease losses		6,102	5,968
Individually evaluated for impairment		3,087	3,133
Collectively evaluated for impairment		236,393	239,818
Total loans receivable		$ 239,480	$ 242,951

[1] Includes net deferred fees, costs, premiums and discounts of $12,017,000 and $13,372,000 at March 31, 2017 and December 31, 2016, respectively.

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Impaired Loans (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Summary of the impaired loans by portfolio class of loans
Loans with a specific valuation allowance, Recorded balance	$ 19,877	$ 22,128
Loans with a specific valuation allowance, Unpaid principal balance	20,139	22,374
Specific valuation allowance	6,787	6,881
Loans with a specific valuation allowance, Average balance	21,003	26,745
Loans without a specific valuation allowance, Recorded balance	115,209	108,135
Loans without a specific valuation allowance, Unpaid principal balance	138,436	131,059
Loans without a specific valuation allowance, Average balance	111,672	108,827
Recorded balance	135,086	130,263
Unpaid principal balance	158,575	153,433
Average balance	132,675	135,572
Residential Real Estate | Residential Real Estate
Summary of the impaired loans by portfolio class of loans
Loans with a specific valuation allowance, Recorded balance	2,891	2,759
Loans with a specific valuation allowance, Unpaid principal balance	2,955	2,825
Specific valuation allowance	245	856
Loans with a specific valuation allowance, Average balance	2,825	4,942
Loans without a specific valuation allowance, Recorded balance	10,157	8,853
Loans without a specific valuation allowance, Unpaid principal balance	11,224	9,925
Loans without a specific valuation allowance, Average balance	9,505	12,858
Recorded balance	13,048	11,612
Unpaid principal balance	14,179	12,750
Average balance	12,330	17,800
Commercial | Commercial Real Estate
Summary of the impaired loans by portfolio class of loans
Loans with a specific valuation allowance, Recorded balance	5,279	9,129
Loans with a specific valuation allowance, Unpaid principal balance	5,285	9,130
Specific valuation allowance	545	922
Loans with a specific valuation allowance, Average balance	7,204	10,441
Loans without a specific valuation allowance, Recorded balance	80,173	76,505
Loans without a specific valuation allowance, Unpaid principal balance	98,480	94,180
Loans without a specific valuation allowance, Average balance	78,339	72,323
Recorded balance	85,452	85,634
Unpaid principal balance	103,765	103,310
Average balance	85,543	82,764
Commercial | Other Commercial
Summary of the impaired loans by portfolio class of loans
Loans with a specific valuation allowance, Recorded balance	10,053	8,814
Loans with a specific valuation allowance, Unpaid principal balance	10,190	8,929
Specific valuation allowance	5,047	4,419
Loans with a specific valuation allowance, Average balance	9,434	9,840
Loans without a specific valuation allowance, Recorded balance	16,997	15,136
Loans without a specific valuation allowance, Unpaid principal balance	19,350	17,724
Loans without a specific valuation allowance, Average balance	16,067	15,537
Recorded balance	27,050	23,950
Unpaid principal balance	29,540	26,653
Average balance	25,501	25,377
Consumer and Other | Home Equity
Summary of the impaired loans by portfolio class of loans
Loans with a specific valuation allowance, Recorded balance	546	334
Loans with a specific valuation allowance, Unpaid principal balance	559	345
Specific valuation allowance	551	296
Loans with a specific valuation allowance, Average balance	440	257
Loans without a specific valuation allowance, Recorded balance	5,903	5,600
Loans without a specific valuation allowance, Unpaid principal balance	7,323	7,120
Loans without a specific valuation allowance, Average balance	5,751	6,004
Recorded balance	6,449	5,934
Unpaid principal balance	7,882	7,465
Average balance	6,191	6,261
Consumer and Other | Other Consumer
Summary of the impaired loans by portfolio class of loans
Loans with a specific valuation allowance, Recorded balance	1,108	1,092
Loans with a specific valuation allowance, Unpaid principal balance	1,150	1,145
Specific valuation allowance	399	388
Loans with a specific valuation allowance, Average balance	1,100	1,265
Loans without a specific valuation allowance, Recorded balance	1,979	2,041
Loans without a specific valuation allowance, Unpaid principal balance	2,059	2,110
Loans without a specific valuation allowance, Average balance	2,010	2,105
Recorded balance	3,087	3,133
Unpaid principal balance	3,209	3,255
Average balance	$ 3,110	$ 3,370

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Loans Receivable Aging Analysis (Details) - USD ($) $ in Thousands		Mar. 31, 2017	Dec. 31, 2016
Loan portfolio aging analysis
Non-accrual loans		$ 50,674	$ 49,332
Total past due and non-accrual loans		92,862	76,048
Current loans receivable		5,784,112	5,608,415
Total loans receivable	[1]	5,876,974	5,684,463
Accruing loans 30 to 59 days past due
Loan portfolio aging analysis
Past due loans		27,122	20,599
Accruing loans 60 to 89 days past due
Loan portfolio aging analysis
Past due loans		12,038	5,018
Accruing loans 90 days or more past due
Loan portfolio aging analysis
Past due loans		3,028	1,099
Residential Real Estate | Residential Real Estate
Loan portfolio aging analysis
Non-accrual loans		5,949	4,528
Total past due and non-accrual loans		11,635	12,530
Current loans receivable		673,823	661,817
Total loans receivable		685,458	674,347
Residential Real Estate | Residential Real Estate | Accruing loans 30 to 59 days past due
Loan portfolio aging analysis
Past due loans		5,255	6,338
Residential Real Estate | Residential Real Estate | Accruing loans 60 to 89 days past due
Loan portfolio aging analysis
Past due loans		431	1,398
Residential Real Estate | Residential Real Estate | Accruing loans 90 days or more past due
Loan portfolio aging analysis
Past due loans		0	266
Commercial
Loan portfolio aging analysis
Total loans receivable		4,518,482	4,332,391
Commercial | Commercial Real Estate
Loan portfolio aging analysis
Non-accrual loans		30,277	30,216
Total past due and non-accrual loans		49,874	36,194
Current loans receivable		3,006,498	2,953,947
Total loans receivable		3,056,372	2,990,141
Commercial | Commercial Real Estate | Accruing loans 30 to 59 days past due
Loan portfolio aging analysis
Past due loans		11,294	5,079
Commercial | Commercial Real Estate | Accruing loans 60 to 89 days past due
Loan portfolio aging analysis
Past due loans		8,100	754
Commercial | Commercial Real Estate | Accruing loans 90 days or more past due
Loan portfolio aging analysis
Past due loans		203	145
Commercial | Other Commercial
Loan portfolio aging analysis
Non-accrual loans		8,301	8,817
Total past due and non-accrual loans		20,658	15,840
Current loans receivable		1,441,452	1,326,410
Total loans receivable		1,462,110	1,342,250
Commercial | Other Commercial | Accruing loans 30 to 59 days past due
Loan portfolio aging analysis
Past due loans		7,657	5,388
Commercial | Other Commercial | Accruing loans 60 to 89 days past due
Loan portfolio aging analysis
Past due loans		2,259	1,352
Commercial | Other Commercial | Accruing loans 90 days or more past due
Loan portfolio aging analysis
Past due loans		2,441	283
Consumer and Other
Loan portfolio aging analysis
Total loans receivable		673,034	677,725
Consumer and Other | Home Equity
Loan portfolio aging analysis
Non-accrual loans		5,619	5,240
Total past due and non-accrual loans		8,151	8,714
Current loans receivable		425,403	426,060
Total loans receivable		433,554	434,774
Consumer and Other | Home Equity | Accruing loans 30 to 59 days past due
Loan portfolio aging analysis
Past due loans		1,555	2,439
Consumer and Other | Home Equity | Accruing loans 60 to 89 days past due
Loan portfolio aging analysis
Past due loans		641	844
Consumer and Other | Home Equity | Accruing loans 90 days or more past due
Loan portfolio aging analysis
Past due loans		336	191
Consumer and Other | Other Consumer
Loan portfolio aging analysis
Non-accrual loans		528	531
Total past due and non-accrual loans		2,544	2,770
Current loans receivable		236,936	240,181
Total loans receivable		239,480	242,951
Consumer and Other | Other Consumer | Accruing loans 30 to 59 days past due
Loan portfolio aging analysis
Past due loans		1,361	1,355
Consumer and Other | Other Consumer | Accruing loans 60 to 89 days past due
Loan portfolio aging analysis
Past due loans		607	670
Consumer and Other | Other Consumer | Accruing loans 90 days or more past due
Loan portfolio aging analysis
Past due loans		$ 48	$ 214

[1] Includes net deferred fees, costs, premiums and discounts of $12,017,000 and $13,372,000 at March 31, 2017 and December 31, 2016, respectively.

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Troubled Debt Restructurings (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2017 USD ($) Loan	Mar. 31, 2016 USD ($) Loan
Troubled Debt Restructurings
Troubled debt restructurings, Number of Loans | Loan	10	3
Troubled debt restructurings, Pre-modification recorded balance	$ 9,555	$ 8,959
Troubled debt restructurings, Post-modification recorded balance	$ 9,552	$ 8,959
TDRs that Subsequently Defaulted, Number of Loans | Loan	2	0
TDRs that Subsequently Defaulted, Recorded Balance	$ 25	$ 0
Residential Real Estate | Residential Real Estate
Troubled Debt Restructurings
Troubled debt restructurings, Number of Loans | Loan	2	0
Troubled debt restructurings, Pre-modification recorded balance	$ 280	$ 0
Troubled debt restructurings, Post-modification recorded balance	$ 280	$ 0
TDRs that Subsequently Defaulted, Number of Loans | Loan	0	0
TDRs that Subsequently Defaulted, Recorded Balance	$ 0	$ 0
Commercial | Commercial Real Estate
Troubled Debt Restructurings
Troubled debt restructurings, Number of Loans | Loan	2	1
Troubled debt restructurings, Pre-modification recorded balance	$ 582	$ 56
Troubled debt restructurings, Post-modification recorded balance	$ 582	$ 56
TDRs that Subsequently Defaulted, Number of Loans | Loan	0	0
TDRs that Subsequently Defaulted, Recorded Balance	$ 0	$ 0
Commercial | Other Commercial
Troubled Debt Restructurings
Troubled debt restructurings, Number of Loans | Loan	4	1
Troubled debt restructurings, Pre-modification recorded balance	$ 8,530	$ 8,755
Troubled debt restructurings, Post-modification recorded balance	$ 8,530	$ 8,755
TDRs that Subsequently Defaulted, Number of Loans | Loan	1	0
TDRs that Subsequently Defaulted, Recorded Balance	$ 18	$ 0
Consumer and Other | Home Equity
Troubled Debt Restructurings
Troubled debt restructurings, Number of Loans | Loan	1	1
Troubled debt restructurings, Pre-modification recorded balance	$ 153	$ 148
Troubled debt restructurings, Post-modification recorded balance	$ 153	$ 148
TDRs that Subsequently Defaulted, Number of Loans | Loan	0	0
TDRs that Subsequently Defaulted, Recorded Balance	$ 0	$ 0
Consumer and Other | Other Consumer
Troubled Debt Restructurings
Troubled debt restructurings, Number of Loans | Loan	1	0
Troubled debt restructurings, Pre-modification recorded balance	$ 10	$ 0
Troubled debt restructurings, Post-modification recorded balance	$ 7	$ 0
TDRs that Subsequently Defaulted, Number of Loans | Loan	1	0
TDRs that Subsequently Defaulted, Recorded Balance	$ 7	$ 0

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Loans Receivable, Net (Details Textual)	3 Months Ended
	Mar. 31, 2017 USD ($) portfolio_segment	Dec. 31, 2016 USD ($)	Mar. 31, 2016 USD ($)
Loans and Leases Receivable Disclosure
Number of segments in the Company's loan portfolio | portfolio_segment	3
TDR With Pre Modification Loan Balance for Which Oreo Was Received	$ 514,000		$ 210,000
Consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process	2,532,000	$ 1,770,000
OREO Secured by Residential Real Estate	$ 2,354,000	$ 2,699,000

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Net Carrying Value of Goodwill (Details) - USD ($) $ in Thousands		Mar. 31, 2017	Dec. 31, 2016
Gross carrying value of goodwill and the accumulated impairment charge
Gross carrying value		$ 187,212	$ 187,212
Accumulated impairment charge	[1]	(40,159)	(40,159)
Net carrying value		$ 147,053	$ 147,053

[1] A goodwill impairment charge was recognized in 2011 and was due to high levels of volatility and dislocation in bank stock prices nationwide.

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Variable Interest Entities VIE Carrying Amounts Included in Financial Statements (Details) - Consolidated VIEs - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Consolidated VIEs
Assets	$ 45,363	$ 39,054
Liabilities	8,605	4,134
Loans Receivable
Consolidated VIEs
Assets	43,143	36,950
Accrued Interest Receivable
Consolidated VIEs
Assets	125	120
Other assets
Consolidated VIEs
Assets	2,095	1,984
Other borrowed funds
Consolidated VIEs
Liabilities	8,577	4,105
Accrued interest payable
Consolidated VIEs
Liabilities	6	2
Other liabilities
Consolidated VIEs
Liabilities	$ 22	$ 27

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Variable Interest Entities Amortization Expense and Tax Credits and Other Tax Benefits (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Investments in Affordable Housing Projects
Amortization expense	$ 503	$ 255
Tax credits and other tax benefits recognized	$ 776	$ 392

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Variable Interest Entities (Details Textual) - USD ($)	3 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Variable Interest Entities
Unfunded contingent commitments	$ 18,095,000
Year in which commitments will be fulfilled	2017
Impairment losses	$ 0
Other assets
Variable Interest Entities
Carrying value of equity investments in LIHTCs	$ 8,616,000	$ 7,282,000
CDE
Variable Interest Entities
Tax credit period	7 years
LIHTC
Variable Interest Entities
Tax credit period	10 years
Tax credit compliance period	15 years

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Carrying Value of Repurchase Agreements (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Securities Sold Under Agreements to Repurchase
Repurchase Agreements	$ 497,187	$ 473,650
Overnight and Continuous
Securities Sold Under Agreements to Repurchase
Repurchase Agreements	497,187	473,007
Up to 30 Days
Securities Sold Under Agreements to Repurchase
Repurchase Agreements	0	643
Residential mortgage-backed securities
Securities Sold Under Agreements to Repurchase
Repurchase Agreements	484,126	472,349
Residential mortgage-backed securities | Overnight and Continuous
Securities Sold Under Agreements to Repurchase
Repurchase Agreements	484,126	471,706
Residential mortgage-backed securities | Up to 30 Days
Securities Sold Under Agreements to Repurchase
Repurchase Agreements	0	643
Commercial mortgage-backed securities
Securities Sold Under Agreements to Repurchase
Repurchase Agreements	13,061	1,301
Commercial mortgage-backed securities | Overnight and Continuous
Securities Sold Under Agreements to Repurchase
Repurchase Agreements	13,061	1,301
Commercial mortgage-backed securities | Up to 30 Days
Securities Sold Under Agreements to Repurchase
Repurchase Agreements	$ 0	$ 0

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Securities Sold Under Agreements to Repurchase Securities Sold Under Agreements to Repurchase (Details Textual) - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Securities Sold Under Agreements to Repurchase
Repurchase Agreements	$ 497,187,000	$ 473,650,000
Securities Pledged for Repurchase Agreements	$ 478,899,000	$ 472,239,000

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Interest Rate Swap Summary (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2017 USD ($)
Interest Rate Swap One
Interest rate swap derivative financial instruments
Forecasted Notional Amount	$ 160,000
Variable Interest Rate	3 month LIBOR	[1]
Fixed Interest Rate	3.378%	[1]
Term, Effective Date	Oct. 21, 2014
Term, Maturity Date	Oct. 21, 2021
Interest Rate Swap Two
Interest rate swap derivative financial instruments
Forecasted Notional Amount	$ 100,000
Variable Interest Rate	3 month LIBOR	[1]
Fixed Interest Rate	2.498%	[1]
Term, Effective Date	Nov. 30, 2015
Term, Maturity Date	Nov. 30, 2022

[1] The Company pays the fixed interest rate and the counterparty pays the Company the variable interest rate.

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Derivatives and Hedging Activities Interest Rate Swap Gains or Losses (Details) - Interest Rate Swap - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Interest Expense
Pre-Tax Gains or Losses
Amount of loss reclassified from OCI to interest expense	$ (1,332)	$ (1,829)
Other Non-Interest Expense
Pre-Tax Gains or Losses
Amount of loss recognized in other non-interest expense (ineffective portion)	0	0
Other Comprehensive Income
Pre-Tax Gains or Losses
Amount of gain (loss) recognized in OCI (effective portion)	$ 264	$ (9,928)

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Derivatives and Hedging Activities Offsetting Assets (Details) - Interest Rate Swap - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Offsetting Derivative Assets
Gross Amounts of Recognized Assets	$ 0	$ 0
Gross Amounts Offset in the Statements of Financial Position	0	0
Net Amounts of Assets Presented in the Statements of Financial Position	$ 0	$ 0

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Derivatives and Hedging Activities Offsetting Liabilities (Details) - Interest Rate Swap - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Offsetting Derivative Liabilities
Gross Amounts of Recognized Liabilities	$ 13,129	$ 14,725
Gross Amounts Offset in the Statements of Financial Position	0	0
Net Amounts of Liabilities Presented in the Statements of Financial Position	$ 13,129	$ 14,725

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Derivatives and Hedging Activities (Details Textual) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Interest Rate Swap One
Interest rate swap derivative financial instruments
Forecasted Notional Amount	$ 160,000,000
Interest Rate Swap Two
Interest rate swap derivative financial instruments
Forecasted Notional Amount	100,000,000
Interest Rate Swap
Interest rate swap derivative financial instruments
Interest expense recorded on interest rate swap	1,976,000	$ 1,998,000
Unrealized loss to be reclassified within twelve months	5,183,000
Investment securities pledged as collateral	27,931,000
Collateral pledged from the counterparties to the Company	$ 0

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Other Expenses (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Other Expenses
Debit card expenses	$ 1,718	$ 1,849
Consulting and outside services	1,420	1,014
Telephone	977	960
Loan expenses	891	783
Employee expenses	789	579
Postage	725	880
Printing and supplies	640	943
Accounting and audit fees	512	391
VIE amortization and other expenses	464	639
Checking and operating expenses	365	694
Business development	340	342
Legal fees	340	237
ATM expenses	312	255
Other	927	980
Total other expenses	$ 10,420	$ 10,546

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Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Accumulated Other Comprehensive Income (Loss)
Balance, beginning	$ (7,382)	$ 1,989
Other comprehensive income (loss) before reclassification	2,069	2,249
Amounts reclassified from accumulated other comprehensive income (loss)	901	1,083
Net current period other comprehensive income (loss)	2,970	3,332
Balance, end	(4,412)	5,321
Available-For-Sale Securities
Accumulated Other Comprehensive Income (Loss)
Balance, beginning	1,639	13,935
Other comprehensive income (loss) before reclassification	1,907	8,331
Amounts reclassified from accumulated other comprehensive income (loss)	85	(38)
Net current period other comprehensive income (loss)	1,992	8,293
Balance, end	3,631	22,228
Derivatives Used for Cash Flow Hedges
Accumulated Other Comprehensive Income (Loss)
Balance, beginning	(9,021)	(11,946)
Other comprehensive income (loss) before reclassification	162	(6,082)
Amounts reclassified from accumulated other comprehensive income (loss)	816	1,121
Net current period other comprehensive income (loss)	978	(4,961)
Balance, end	$ (8,043)	$ (16,907)

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Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Basic and Diluted Earnings Per Share
Net income available to common stockholders, basic and diluted	$ 31,255	$ 28,682
Average outstanding shares - basic	76,572,116	76,126,251
Add: dilutive restricted stock awards	61,167	47,166
Average outstanding shares - diluted	76,633,283	76,173,417
Basic earnings per share	$ 0.41	$ 0.38
Diluted earnings per share	$ 0.41	$ 0.38
Earnings Per Share
Restricted stock awards excluded from the diluted average outstanding share calculation	39,348	0

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Fair Value Measurements on a Recurring Basis (Details) - Recurring Measurements - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Financial Assets
Total assets measured at fair value on a recurring basis	$ 2,314,521	$ 2,425,477
Financial Liabilities
Total liabilities measured at fair value on a recurring basis	13,129	14,725
Interest rate swaps
Financial Liabilities
Interest rate swaps	13,129	14,725
U.S. government and federal agency
Financial Assets
Investment securities, available-for-sale	37,416	39,407
U.S. government sponsored enterprises
Financial Assets
Investment securities, available-for-sale	19,536	19,570
State and local governments
Financial Assets
Investment securities, available-for-sale	762,167	786,373
Corporate bonds
Financial Assets
Investment securities, available-for-sale	443,701	471,951
Residential mortgage-backed securities
Financial Assets
Investment securities, available-for-sale	949,091	1,007,515
Commercial mortgage-backed securities
Financial Assets
Investment securities, available-for-sale	102,610	100,661
Level 1
Financial Assets
Total assets measured at fair value on a recurring basis	0	0
Financial Liabilities
Total liabilities measured at fair value on a recurring basis	0	0
Level 1 | Interest rate swaps
Financial Liabilities
Interest rate swaps	0	0
Level 1 | U.S. government and federal agency
Financial Assets
Investment securities, available-for-sale	0	0
Level 1 | U.S. government sponsored enterprises
Financial Assets
Investment securities, available-for-sale	0	0
Level 1 | State and local governments
Financial Assets
Investment securities, available-for-sale	0	0
Level 1 | Corporate bonds
Financial Assets
Investment securities, available-for-sale	0	0
Level 1 | Residential mortgage-backed securities
Financial Assets
Investment securities, available-for-sale	0	0
Level 1 | Commercial mortgage-backed securities
Financial Assets
Investment securities, available-for-sale	0	0
Level 2
Financial Assets
Total assets measured at fair value on a recurring basis	2,314,521	2,425,477
Financial Liabilities
Total liabilities measured at fair value on a recurring basis	13,129	14,725
Level 2 | Interest rate swaps
Financial Liabilities
Interest rate swaps	13,129	14,725
Level 2 | U.S. government and federal agency
Financial Assets
Investment securities, available-for-sale	37,416	39,407
Level 2 | U.S. government sponsored enterprises
Financial Assets
Investment securities, available-for-sale	19,536	19,570
Level 2 | State and local governments
Financial Assets
Investment securities, available-for-sale	762,167	786,373
Level 2 | Corporate bonds
Financial Assets
Investment securities, available-for-sale	443,701	471,951
Level 2 | Residential mortgage-backed securities
Financial Assets
Investment securities, available-for-sale	949,091	1,007,515
Level 2 | Commercial mortgage-backed securities
Financial Assets
Investment securities, available-for-sale	102,610	100,661
Level 3
Financial Assets
Total assets measured at fair value on a recurring basis	0	0
Financial Liabilities
Total liabilities measured at fair value on a recurring basis	0	0
Level 3 | Interest rate swaps
Financial Liabilities
Interest rate swaps	0	0
Level 3 | U.S. government and federal agency
Financial Assets
Investment securities, available-for-sale	0	0
Level 3 | U.S. government sponsored enterprises
Financial Assets
Investment securities, available-for-sale	0	0
Level 3 | State and local governments
Financial Assets
Investment securities, available-for-sale	0	0
Level 3 | Corporate bonds
Financial Assets
Investment securities, available-for-sale	0	0
Level 3 | Residential mortgage-backed securities
Financial Assets
Investment securities, available-for-sale	0	0
Level 3 | Commercial mortgage-backed securities
Financial Assets
Investment securities, available-for-sale	$ 0	$ 0

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Fair Value Measurements on a Non-Recurring Basis (Details) - Non-Recurring Measurements - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Assets with a recorded change resulting from re-measuring at fair value on a non-recurring basis
Other real estate owned	$ 147	$ 7,839
Collateral-dependent impaired loans, net of ALLL	7,601	5,664
Total assets measured at fair value on a non-recurring basis	7,748	13,503
Level 1
Assets with a recorded change resulting from re-measuring at fair value on a non-recurring basis
Other real estate owned	0	0
Collateral-dependent impaired loans, net of ALLL	0	0
Total assets measured at fair value on a non-recurring basis	0	0
Level 2
Assets with a recorded change resulting from re-measuring at fair value on a non-recurring basis
Other real estate owned	0	0
Collateral-dependent impaired loans, net of ALLL	0	0
Total assets measured at fair value on a non-recurring basis	0	0
Level 3
Assets with a recorded change resulting from re-measuring at fair value on a non-recurring basis
Other real estate owned	147	7,839
Collateral-dependent impaired loans, net of ALLL	7,601	5,664
Total assets measured at fair value on a non-recurring basis	$ 7,748	$ 13,503

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Quantitative Information about Level 3 Fair Value Measurements (Details) - Non-Recurring Measurements - USD ($) $ in Thousands		3 Months Ended	12 Months Ended
		Mar. 31, 2017	Dec. 31, 2016
Quantitative Information About Level 3 Fair Value Measurements
Fair Value		$ 7,748	$ 13,503
Level 3
Quantitative Information About Level 3 Fair Value Measurements
Fair Value		7,748	13,503
Other real estate owned | Level 3
Quantitative Information About Level 3 Fair Value Measurements
Fair Value			7,839
Other real estate owned | Sales Comparison Approach | Level 3
Quantitative Information About Level 3 Fair Value Measurements
Fair Value		$ 147	7,767
Other real estate owned | Combined Approach | Level 3
Quantitative Information About Level 3 Fair Value Measurements
Fair Value			$ 72
Other real estate owned | Minimum Range | Sales Comparison Approach | Level 3
Unobservable Inputs
Selling Costs	[1]	8.00%	6.00%
Adjustment to Comparables	[1]		0.00%
Other real estate owned | Minimum Range | Combined Approach | Level 3
Unobservable Inputs
Selling Costs	[1]		10.00%
Adjustment to Comparables	[1]		10.00%
Other real estate owned | Maximum Range | Sales Comparison Approach | Level 3
Unobservable Inputs
Selling Costs	[1]	8.00%	10.00%
Adjustment to Comparables	[1]		10.00%
Other real estate owned | Maximum Range | Combined Approach | Level 3
Unobservable Inputs
Selling Costs	[1]		10.00%
Adjustment to Comparables	[1]		10.00%
Other real estate owned | Weighted Average Range | Sales Comparison Approach | Level 3
Unobservable Inputs
Selling Costs	[1]	8.00%	6.90%
Adjustment to Comparables	[1]		0.10%
Other real estate owned | Weighted Average Range | Combined Approach | Level 3
Unobservable Inputs
Selling Costs	[1]		10.00%
Adjustment to Comparables	[1]		10.00%
Collateral-dependent Impaired Loans, Net of ALLL | Level 3
Quantitative Information About Level 3 Fair Value Measurements
Fair Value		$ 7,601	$ 5,664
Collateral-dependent Impaired Loans, Net of ALLL | Sales Comparison Approach | Level 3
Quantitative Information About Level 3 Fair Value Measurements
Fair Value		2,994	1,982
Collateral-dependent Impaired Loans, Net of ALLL | Cost Approach | Level 3
Quantitative Information About Level 3 Fair Value Measurements
Fair Value		5	110
Collateral-dependent Impaired Loans, Net of ALLL | Combined Approach | Level 3
Quantitative Information About Level 3 Fair Value Measurements
Fair Value		$ 4,602	$ 3,572
Collateral-dependent Impaired Loans, Net of ALLL | Minimum Range | Sales Comparison Approach | Level 3
Unobservable Inputs
Selling Costs	[1]	8.00%	8.00%
Collateral-dependent Impaired Loans, Net of ALLL | Minimum Range | Cost Approach | Level 3
Unobservable Inputs
Selling Costs	[1]	20.00%	6.00%
Collateral-dependent Impaired Loans, Net of ALLL | Minimum Range | Combined Approach | Level 3
Unobservable Inputs
Selling Costs	[1]	10.00%	10.00%
Adjustment to Comparables	[1]	20.00%	20.00%
Collateral-dependent Impaired Loans, Net of ALLL | Maximum Range | Sales Comparison Approach | Level 3
Unobservable Inputs
Selling Costs	[1]	10.00%	10.00%
Collateral-dependent Impaired Loans, Net of ALLL | Maximum Range | Cost Approach | Level 3
Unobservable Inputs
Selling Costs	[1]	20.00%	20.00%
Collateral-dependent Impaired Loans, Net of ALLL | Maximum Range | Combined Approach | Level 3
Unobservable Inputs
Selling Costs	[1]	10.00%	10.00%
Adjustment to Comparables	[1]	20.00%	20.00%
Collateral-dependent Impaired Loans, Net of ALLL | Weighted Average Range | Sales Comparison Approach | Level 3
Unobservable Inputs
Selling Costs	[1]	9.70%	9.60%
Collateral-dependent Impaired Loans, Net of ALLL | Weighted Average Range | Cost Approach | Level 3
Unobservable Inputs
Selling Costs	[1]	20.00%	6.60%
Collateral-dependent Impaired Loans, Net of ALLL | Weighted Average Range | Combined Approach | Level 3
Unobservable Inputs
Selling Costs	[1]	10.00%	10.00%
Adjustment to Comparables	[1]	20.00%	20.00%

[1] The range for selling costs and adjustments to comparables indicate reductions to the fair value.

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Carrying Amount and Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Carrying Amount
Financial assets
Cash and cash equivalents	$ 234,004	$ 152,541
Investment securities, available-for-sale	2,314,521	2,425,477
Investment securities, held-to-maturity	667,388	675,674
Loans held for sale	25,649	72,927
Loans receivable, net of ALLL	5,747,748	5,554,891
Accrued interest receivable	48,043	45,832
Non-marketable equity securities	23,944	25,550
Total financial assets	9,061,297	8,952,892
Financial liabilities
Deposits	7,480,157	7,372,279
FHLB advances	211,627	251,749
Repurchase agreements and other borrowed funds	506,081	478,090
Subordinated debentures	126,027	125,991
Accrued interest payable	3,467	3,584
Interest rate swaps	13,129	14,725
Total financial liabilities	8,340,488	8,246,418
Estimated Fair Value | Level 1
Financial assets
Cash and cash equivalents	234,004	152,541
Investment securities, available-for-sale	0	0
Investment securities, held-to-maturity	0	0
Loans held for sale	25,649	72,927
Loans receivable, net of ALLL	0	0
Accrued interest receivable	48,043	45,832
Non-marketable equity securities	0	0
Total financial assets	307,696	271,300
Financial liabilities
Deposits	6,197,583	6,090,879
FHLB advances	0	0
Repurchase agreements and other borrowed funds	0	0
Subordinated debentures	0	0
Accrued interest payable	3,467	3,584
Interest rate swaps	0	0
Total financial liabilities	6,201,050	6,094,463
Estimated Fair Value | Level 2
Financial assets
Cash and cash equivalents	0	0
Investment securities, available-for-sale	2,314,521	2,425,477
Investment securities, held-to-maturity	680,395	689,089
Loans held for sale	0	0
Loans receivable, net of ALLL	5,558,406	5,380,286
Accrued interest receivable	0	0
Non-marketable equity securities	23,944	25,550
Total financial assets	8,577,266	8,520,402
Financial liabilities
Deposits	1,284,399	1,283,532
FHLB advances	217,435	257,643
Repurchase agreements and other borrowed funds	506,081	478,090
Subordinated debentures	89,136	85,557
Accrued interest payable	0	0
Interest rate swaps	13,129	14,725
Total financial liabilities	2,110,180	2,119,547
Estimated Fair Value | Level 3
Financial assets
Cash and cash equivalents	0	0
Investment securities, available-for-sale	0	0
Investment securities, held-to-maturity	0	0
Loans held for sale	0	0
Loans receivable, net of ALLL	128,299	123,382
Accrued interest receivable	0	0
Non-marketable equity securities	0	0
Total financial assets	128,299	123,382
Financial liabilities
Deposits	0	0
FHLB advances	0	0
Repurchase agreements and other borrowed funds	0	0
Subordinated debentures	0	0
Accrued interest payable	0	0
Interest rate swaps	0	0
Total financial liabilities	$ 0	$ 0

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Subsequent Event (Details Textual) - USD ($)		3 Months Ended
		Mar. 31, 2017	Dec. 31, 2016
Subsequent Event
Date of subsequent event		Apr. 30, 2017
Subsequent Event, Description		On April 30, 2017, the Company acquired 100% of the outstanding common stock of TFB Bancorp, Inc. and its wholly-owned subsidiary, The Foothills Bank, a community bank based in Yuma, Arizona (collectively, “Foothills”).
Total assets		$ 9,553,908,000	$ 9,450,600,000
Gross loans	[1]	$ 5,876,974,000	$ 5,684,463,000
The Foothills Bank
Subsequent Event
Percentage of Outstanding Common Stock Acquired		100.00%
Total assets		$ 359,941,000
Gross loans		305,239,000
Total deposits		$ 292,320,000

[1] Includes net deferred fees, costs, premiums and discounts of $12,017,000 and $13,372,000 at March 31, 2017 and December 31, 2016, respectively.