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 September 30, 2016

OR

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

Commission File Number: 0-20293

UNION BANKSHARES CORPORATION

(Exact name of registrant as specified in its charter)

VIRGINIA	54-1598552
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

1051 East Cary Street

Suite 1200

Richmond, Virginia 23219

(Address of principal executive offices) (Zip Code)

(804) 633-5031

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes x No ¨

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

Large accelerated filer	ý	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ¨ No x

The number of shares of common stock outstanding as of October 31, 2016 was 43,558,217.

UNION BANKSHARES CORPORATION

FORM 10-Q

INDEX

ITEM		PAGE
	PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Balance Sheets as of September 30, 2016 and December 31, 2015	2
	Consolidated Statements of Income for the three and nine months ended September 30, 2016 and 2015	3
	Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2016 and 2015	4
	Consolidated Statements of Changes in Stockholders’ Equity for the nine months ended September 30, 2016 and 2015	5
	Consolidated Statements of Cash Flows for the nine months ended September 30, 2016 and 2015	6
	Notes to Consolidated Financial Statements	7
	Report of Independent Registered Public Accounting Firm	45
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	46
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	67
Item 4.	Controls and Procedures	70
	PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	70
Item 1A.	Risk Factors	70
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	71
Item 6.	Exhibits	72
	Signatures	73

Glossary of Acronyms

AFS	–	Available for sale
ALCO	–	Asset Liability Committee
ALL	–	Allowance for loan losses
ASC	–	Accounting Standards Codification
ASU	–	Accounting Standards Update
ATM	–	Automated teller machine
the Bank	–	Union Bank & Trust
bps	–	Basis points
the Company	–	Union Bankshares Corporation
Dodd-Frank Act	–	Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010
EPS	–	Earnings per share
Exchange Act	–	Securities Exchange Act of 1934
FASB	–	Financial Accounting Standards Board
FDIC	–	Federal Deposit Insurance Corporation
Federal Reserve	–	Board of Governors of the Federal Reserve System
Federal Reserve Bank	–	Federal Reserve Bank of Richmond
FHLB	–	Federal Home Loan Bank of Atlanta
U.S. GAAP or GAAP	–	Accounting principles generally accepted in the United States
HELOC	–	Home equity line of credit
HTM	–	Held to maturity
LIBOR	–	London Interbank Offered Rate
NPA	–	Nonperforming assets
ODCM	–	Old Dominion Capital Management, Inc.
OREO	–	Other real estate owned
OTTI	–	Other than temporary impairment
PCI	–	Purchased credit impaired
ROA	–	Return on average assets
ROTCE	–	Return on average tangible common equity
StellarOne	–	StellarOne Corporation
TDR	–	Troubled debt restructuring
UMG	–	Union Mortgage Group, Inc.

PART I – FINANCIAL INFORMATION

ITEM 1 – FINANCIAL STATEMENTS

UNION BANKSHARES CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except share data)

	September 30, 2016		December 31, 2015
	(Unaudited)		(Audited)
ASSETS
Cash and cash equivalents:
Cash and due from banks	$	103,979	$	111,323
Interest-bearing deposits in other banks	51,303		29,670
Federal funds sold	893		1,667
Total cash and cash equivalents	156,175		142,660
Securities available for sale, at fair value	954,984		903,292
Securities held to maturity, at carrying value	200,839		205,374
Restricted stock, at cost	63,204		51,828
Loans held for sale	46,814		36,030
Loans held for investment, net of deferred fees and costs	6,148,918		5,671,462
Less allowance for loan losses	36,542		34,047
Net loans held for investment	6,112,376		5,637,415
Premises and equipment, net	123,416		126,028
Other real estate owned, net of valuation allowance	10,581		15,299
Goodwill	298,191		293,522
Core deposit intangibles, net	18,001		23,310
Other amortizable intangibles, net	4,342		—
Bank owned life insurance	177,847		173,687
Other assets	91,460		84,846
Total assets	$	8,258,230	$	7,693,291
LIABILITIES
Noninterest-bearing demand deposits	$	1,442,268	$	1,372,937
Interest-bearing deposits	4,816,238		4,590,999
Total deposits	6,258,506		5,963,936
Securities sold under agreements to repurchase	64,225		84,977
Other short-term borrowings	601,500		304,000
Long-term borrowings	259,902		291,198
Other liabilities	73,133		53,813
Total liabilities	7,257,266		6,697,924
Commitments and contingencies (Note 6)
STOCKHOLDERS' EQUITY
Common stock, $1.33 par value, shares authorized 100,000,000; issued and outstanding, 43,556,486 shares and 44,785,674 shares, respectively.	57,444		59,159
Additional paid-in capital	603,785		631,822
Retained earnings	329,876		298,134
Accumulated other comprehensive income	9,859		6,252
Total stockholders' equity	1,000,964		995,367
Total liabilities and stockholders' equity	$	8,258,230	$	7,693,291

See accompanying notes to consolidated financial statements.

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UNION BANKSHARES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(Dollars in thousands, except share data)

	Three Months Ended					Nine Months Ended
	September 30, 2016		September 30, 2015			September 30, 2016		September 30, 2015
Interest and dividend income:
Interest and fees on loans	$	66,190	$	62,651		$	193,884	$	185,706
Interest on deposits in other banks	65		23			178		65
Interest and dividends on securities:
Taxable	4,732		3,954			13,558		11,621
Nontaxable	3,446		3,372			10,344		10,062
Total interest and dividend income	74,433		70,000			217,964		207,454
Interest expense:
Interest on deposits	4,552		4,204			12,945		11,204
Interest on federal funds purchased	2		1			5		6
Interest on short-term borrowings	763		223			2,093		728
Interest on long-term borrowings	2,088		2,128			6,386		6,287
Total interest expense	7,405		6,556			21,429		18,225
Net interest income	67,028		63,444			196,535		189,229
Provision for credit losses	2,472		2,062			7,376		7,561
Net interest income after provision for credit losses	64,556		61,382			189,159		181,668
Noninterest income:
Service charges on deposit accounts	4,965		4,965			14,454		13,800
Other service charges and fees	4,397		3,983			12,971		11,618
Fiduciary and asset management fees	2,844		2,304			7,315		6,835
Mortgage banking income, net	3,207		2,630			8,324		7,582
Gains on securities transactions, net	—		75			145		672
Other-than-temporary impairment losses	—		(300		)	—		(300		)
Bank owned life insurance income	1,389		1,161			4,122		3,431
Other operating income	2,148		1,907			5,526		4,352
Total noninterest income	18,950		16,725			52,857		47,990
Noninterest expenses:
Salaries and benefits	30,493		25,853			87,061		78,905
Occupancy expenses	4,841		4,915			14,627		15,220
Furniture and equipment expenses	2,635		3,015			7,867		8,818
Printing, postage, and supplies	1,147		1,191			3,566		3,970
Communications expense	948		1,159			2,964		3,481
Technology and data processing	3,917		3,549			11,340		10,020
Professional services	1,895		1,991			6,432		5,008
Marketing and advertising expense	1,975		1,781			5,838		5,841
FDIC assessment premiums and other insurance	1,262		1,351			4,003		4,030
Other taxes	639		1,569			3,864		4,674
Loan-related expenses	1,531		1,341			3,638		3,173
OREO and credit-related expenses	503		1,263			1,965		4,415
Amortization of intangible assets	1,843		2,074			5,468		6,435
Training and other personnel costs	863		1,198			2,512		2,831
Other expenses	2,421		1,075			5,291		5,584
Total noninterest expenses	56,913		53,325			166,436		162,405
Income before income taxes	26,593		24,782			75,580		67,253
Income tax expense	6,192		6,566			18,881		17,989
Net income	$	20,401	$	18,216		$	56,699	$	49,264
Basic earnings per common share	$	0.47	$	0.40		$	1.29	$	1.09
Diluted earnings per common share	$	0.47	$	0.40		$	1.29	$	1.09
Dividends declared per common share	$	0.19	$	0.17		$	0.57	$	0.49
Basic weighted average number of common shares outstanding	43,565,937		45,087,409			43,853,548		45,107,290
Diluted weighted average number of common shares outstanding	43,754,915		45,171,610			43,967,725		45,189,578

See accompanying notes to consolidated financial statements.

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UNION BANKSHARES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

(Dollars in thousands)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Net income	$	20,401		$	18,216		$	56,699		$	49,264
Other comprehensive income (loss):
Cash flow hedges:
Change in fair value of cash flow hedges	(78		)	(2,328		)	(3,766		)	(2,009		)
Reclassification adjustment for losses (gains) included in net income (net of tax, $83 and $84 for the three months and $233 and $253 for the nine months ended September 30, 2016 and 2015, respectively)	154			157			433			470
AFS securities:
Unrealized holding gains (losses) arising during period (net of tax, $604 and $673 for the three months and $4,227 and $976 for the nine months ended September 30, 2016 and 2015, respectively)	1,121			1,250			7,851			(1,812		)
Reclassification adjustment for losses (gains) included in net income (net of tax, $0 and $79 for the three months and $51 and $130 for the nine months ended September 30, 2016 and 2015, respectively)	—			146			(95		)	(242		)
HTM securities:
Accretion of unrealized gain for AFS securities transferred to HTM (net of tax, $128 and $166 for the three months and $439 and $278 for the nine months ended September 30, 2016 and 2015, respectively)	(237		)	(308		)	(816		)	(516		)
Other comprehensive income (loss)	960			(1,083		)	3,607			(4,109		)
Comprehensive income	$	21,361		$	17,133		$	60,306		$	45,155

See accompanying notes to consolidated financial statements.

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UNION BANKSHARES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED)

NINE MONTHS ENDED SEPTEMBER 30, 2016 AND 2015

(Dollars in thousands, except share amounts)

	Common Stock			Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total
Balance - December 31, 2014	$	59,795		$	643,443		$	261,676		$	12,255		$	977,169
Net income - 2015							49,264						49,264
Other comprehensive income (net of taxes of $1,130)										(4,109		)	(4,109		)
Dividends on common stock ($0.49 per share)							(21,000		)				(21,000		)
Stock purchased under stock repurchase plan (347,021 shares)	(460		)	(7,535		)							(7,995		)
Issuance of common stock under Dividend Reinvestment Plan (52,201 shares)	69			1,030			(1,099		)				—
Issuance of common stock under Equity Compensation Plans (37,124 shares)	49			517									566
Issuance of common stock for services rendered (19,417 shares)	26			420									446
Vesting of restricted stock, including tax effects, under Equity Compensation Plans (26,576 shares)	35			(321		)							(286		)
Stock-based compensation expense				957									957
Balance - September 30, 2015	$	59,514		$	638,511		$	288,841		$	8,146		$	995,012
Balance - December 31, 2015	$	59,159		$	631,822		$	298,134		$	6,252		$	995,367
Net income - 2016							56,699						56,699
Other comprehensive income (net of taxes of $3,970)										3,607			3,607
Issuance of common stock in regard to acquisition (17,232 shares)	23			430									453
Dividends on common stock ($0.57 per share)							(24,957		)				(24,957		)
Stock purchased under stock repurchase plan (1,411,131 shares)	(1,876		)	(31,300		)							(33,176		)
Issuance of common stock under Equity Compensation Plans (54,044 shares)	72			681									753
Issuance of common stock for services rendered (14,576 shares)	19			360									379
Vesting of restricted stock, including tax effects, under Equity Compensation Plans (35,515 shares)	47			(492		)							(445		)
Stock-based compensation expense				2,284									2,284
Balance - September 30, 2016	$	57,444		$	603,785		$	329,876		$	9,859		$	1,000,964

See accompanying notes to consolidated financial statements.

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UNION BANKSHARES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED SEPTEMBER 30, 2016 AND 2015

(Dollars in thousands)

	2016			2015
Operating activities:
Net income	$	56,699		$	49,264
Adjustments to reconcile net income to net cash and cash equivalents provided by (used in) operating activities:
Depreciation of premises and equipment	7,617			8,097
Writedown of OREO	879			1,773
Other-than-temporary impairment recognized in earnings	—			300
Amortization, net	8,837			10,080
Amortization (accretion) related to acquisition, net	1,400			1,175
Provision for credit losses	7,376			7,561
Losses (gains) on securities transactions, net	(145		)	(672		)
Bank owned life insurance income	(4,122		)	(3,431		)
Decrease (increase) in loans held for sale, net	(10,784		)	3,206
Losses (gains) on sales of other real estate owned, net	(278		)	80
Losses (gains) on sales of premises, net	97			98
Stock-based compensation expenses	2,284			957
Issuance of common stock for services	379			446
Net decrease (increase) in other assets	(11,169		)	(461		)
Net increase (decrease) in other liabilities	11,005			691
Net cash and cash equivalents provided by (used in) operating activities	70,075			79,164
Investing activities:
Purchases of securities available for sale	(159,863		)	(171,203		)
Proceeds from sales of securities available for sale	18,272			63,928
Proceeds from maturities, calls and paydowns of securities available for sale	83,942			110,132
Proceeds from maturities, calls and paydowns of securities held to maturity	1,841			795
Net decrease (increase) in loans held for investment	(479,346		)	(228,839		)
Net decrease (increase) in premises and equipment	(5,102		)	(2,541		)
Proceeds from sales of other real estate owned	4,982			6,374
Improvements to other real estate owned	—			(308		)
Cash paid for equity-method investments	—			(355		)
Cash paid in acquisition	(4,077		)	—
Cash acquired in acquisitions	207			—
Net cash and cash equivalents provided by (used in) investing activities	(539,144		)	(222,017		)
Financing activities:
Net increase (decrease) in noninterest-bearing deposits	69,331			138,667
Net increase (decrease) in interest-bearing deposits	225,239			43,259
Net increase (decrease) in short-term borrowings	276,748			44,024
Net increase (decrease) in long-term borrowings	(30,909		)	(8,448		)
Cash dividends paid - common stock	(24,957		)	(21,000		)
Repurchase of common stock	(33,176		)	(7,995		)
Issuance of common stock	753			566
Vesting of restricted stock, including tax effects	(445		)	(286		)
Net cash and cash equivalents provided by (used in) financing activities	482,584			188,787
Increase (decrease) in cash and cash equivalents	13,515			45,934
Cash and cash equivalents at beginning of the period	142,660			133,260
Cash and cash equivalents at end of the period	$	156,175		$	179,194
Supplemental Disclosure of Cash Flow Information
Cash payments for:
Interest	$	21,812		$	20,720
Income taxes	19,800			13,800
Supplemental schedule of noncash investing and financing activities
Unrealized (losses) gains on securities available for sale	$	11,932		$	(3,160	)
Transfer from securities available for sale to securities held to maturity	—			201,822
Transfer from loans held for investment to loans held for sale	—			26,400
Changes in fair value of interest rate swap loss	(3,333		)	(1,539		)
Transfers between loans and other real estate owned	865			1,493
Transfers from bank premises to other real estate owned	—			402
Issuance of common stock in exchange for net assets in acquisition	453			—

See accompanying notes to consolidated financial statements.

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UNION BANKSHARES CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

1. ACCOUNTING POLICIES

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Significant inter-company accounts and transactions have been eliminated in consolidation.

The unaudited consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and follow general practice within the banking industry. Accordingly, the unaudited consolidated financial statements do not include all the information and footnotes required by U.S. GAAP for complete financial statements; however, in the opinion of management, all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of the results of the interim periods presented have been made. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the full year.

These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2015 Annual Report on Form 10-K. Certain prior period amounts have been reclassified to conform to current period presentation.

Business Combinations

On May 31, 2016, the Bank completed its acquisition of ODCM, a Charlottesville, Virginia based registered investment advisor with nearly $300.0 million in assets under management at the time of the acquisition. The acquisition date fair value of consideration transferred totaled $9.1 million, which consisted of $4.1 million in cash, $453,000 in stock, and the remainder being contingent on achieving certain performance metrics. The contingent consideration is carried at fair value and is reported as a component of “Other Liabilities” in the Consolidated Balance Sheet. The fair value of this liability will be assessed at each reporting period. 

In connection with the transaction, the Company recorded $4.7 million in goodwill and $4.5 million of amortizable assets, which primarily relate to the value of customer relationships. The Company is amortizing these intangibles assets over the period of expected benefit, which ranges from 5 to 10 years using a straight-line method. The transaction was accounted for using the acquisition method of accounting and, accordingly, assets acquired, liabilities assumed, and consideration exchanged were recorded at estimated fair values on the acquisition date. During the current quarter, the Company finalized the valuation of certain amortizable intangible assets which increased the fair value and also impacting the recognized goodwill. The fair values are subject to refinement for up to one year after the closing date of the acquisition.

Loans

The Company originates commercial and consumer loans to customers. A substantial portion of the loan portfolio is represented by commercial and residential real estate loans (including acquisition and development loans and residential construction loans) throughout its market area. The ability of the Company’s debtors to honor their contracts on such loans is dependent upon the real estate and general economic conditions in those markets, as well as other factors.

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off generally are reported at their outstanding unpaid principal balances adjusted for any charge-offs, the allowance for loan losses, and any deferred fees or costs on originated loans. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized as an adjustment of the related loan yield using the interest method.

As of January 1, 2016, the Company enhanced the loan portfolio segmentation to better align with how the Company manages credit risk and to better align with industry practice. Below is a summary of the new loan segmentation.

Construction and Land Development – construction loans generally made to commercial and residential builders for specific construction projects. The successful repayment of these types of loans is generally dependent upon (a) a commitment for permanent financing from the Company, or (b) from the sale of the constructed property. These loans carry more risk than both types of commercial real estate term loans due to the dynamics of construction projects, changes in interest rates, the long-term financing market, and state and local government regulations. As in commercial real estate term lending, the Company manages risk by using specific underwriting policies and procedures for these types of loans and by avoiding excessive concentrations to any one business or industry.

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Also, included in this category are loans generally made to residential home builders to support their lot and home inventory needs. Repayment relies upon the successful performance of the underlying residential real estate project. This type of lending carries a higher level of risk as compared to other commercial lending. This class of lending manages risks related to residential real estate market conditions, a functioning first and secondary market in which to sell residential properties, and the borrower’s ability to manage inventory and run projects. The Company manages this risk by lending to experienced builders and developers by using specific underwriting policies and procedures for these types of loans and by avoiding excessive concentrations with any particular customer or geographic region.

Commercial Real Estate – Owner Occupied - term loans made to support owner occupied real estate properties that rely upon the successful operation of the business occupying the property for repayment. General market conditions and economic activity may affect these types of loans. In addition to using specific underwriting policies and procedures for these types of loans, the Company manages risk by avoiding concentrations to any one business or industry.

Commercial Real Estate – Non-Owner Occupied - term loans typically made to borrowers to support income producing properties that rely upon the successful operation of the property for repayment. General market conditions and economic activity may impact the performance of these types of loans. In addition to using specific underwriting policies and procedures for these types of loans, the Company manages risk by diversifying the lending to various lines of businesses, such as retail, office, office warehouse, and hotel as well as avoiding concentrations to any one business or industry.

Residential 1-4 Family – loans generally made to both commercial and residential borrowers. Mortgage loan portfolios carry risks associated with the creditworthiness of the borrower or the tenant and changes in loan-to-value ratios. The Company manages these risks through policies and procedures such as limiting loan-to-value ratios at origination, experienced underwriting, requiring standards for appraisers, and not making subprime loans.

Multifamily Real Estate – loans made to real estate investors to support permanent financing for multifamily residential income producing properties that rely on the successful operation of the property for repayment. This management mainly involves property maintenance and collection of rents due from tenants. This type of lending carries a lower level of risk as compared to other commercial lending. In addition, underwriting requirements for multifamily properties are stricter than for other non-owner-occupied property types. The Company manages this risk by avoiding concentrations with any particular customer.

Commercial and Industrial – loans generally made to support the Company’s borrowers’ need for equipment/vehicle purchases and short-term or seasonal cash flow needs. Repayment relies upon the successful operation of the business. This type of lending carries a lower level of commercial credit risk as compared to other commercial lending. The Company manages this risk by using general underwriting policies and procedures for these types of loans and by avoiding concentrations to any one business or industry.

HELOC – the consumer HELOC portfolio carries risks associated with the creditworthiness of the borrower and changes in loan-to-value ratios. The Company manages these risks through policies and procedures such as limiting loan-to-value ratios at origination, experienced underwriting, requiring standards for appraisers, and not making subprime loans.

Auto – the consumer indirect auto lending portfolio generally carries certain risks associated with the values of the collateral that management must mitigate. The Company focuses its indirect auto lending on one to two year old used vehicles where substantial depreciation has already occurred thereby minimizing the risk of significant loss of collateral values in the future. This type of lending places reliance on computer-based loan approval systems to supplement other underwriting standards.

Consumer and all other - portfolios carry risks associated with the creditworthiness of the borrower and changes in the economic environment. The Company manages these risks through policies and procedures such as experienced underwriting, maximum debt to income ratios, and minimum borrower credit scores. Also included in this category are loans that generally support small business lines of credit and agricultural lending neither of which are a material source of business for the Company.

Affordable Housing Entities

The Company invests in private investment funds that make equity investments in multifamily affordable housing properties that provide affordable housing tax credits for these investments. The activities of these entities are financed with a combination of invested equity capital and debt. For the three and nine months ended September 30, 2016, the Company recognized amortization of $185,000 and $445,000, respectively, and tax credits of $265,000 and $685,000, respectively, associated with these investments within “Income tax expense” on the Company’s Consolidated Statements of Income. For the three and nine months ended September 30, 2015, the Company recognized amortization of $118,000 and $397,000, respectively, and tax

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credits of $213,000 and $641,000, respectively. The carrying value of the Company’s investments in these qualified affordable housing projects was $8.0 million and $8.5 million as of September 30, 2016 and December 31, 2015, respectively. The Company recorded a liability of $5.3 million for the related unfunded commitments as of September 30, 2016, which are expected to be paid from 2016 to 2019.

Adoption of New Accounting Standards

In February 2015, the FASB issued revised guidance to simplify the consolidation assessment required to evaluate whether organizations should consolidate certain legal entities such as limited partnerships, limited liability corporations, and securitization structures. The guidance also removed the indefinite deferral of specialized guidance for certain investment funds. The Company adopted ASU No. 2015-02, “Amendments to the Consolidation Analysis” during the first quarter of 2016. The adoption of ASU 2015-02 did not have a material impact on the Company’s consolidated financial statements.

Recent Accounting Pronouncements

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

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” This ASU requires lessees to put most leases on their balance sheets, but recognize expenses in the income statement in a manner similar to today’s accounting. The guidance also eliminates the real estate-specific provisions and changes the guidance on sale-leaseback transactions, initial direct costs, and lease executory costs for all entities. For lessors, the standard modifies the classification criteria and the accounting for sales-type and direct financing leases. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The Company is currently assessing the impact ASU 2016-02 will have on its consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-05, “Derivatives and Hedging (Topic 815): Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships.” This ASU clarifies that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument in an existing hedging relationship would not, in and of itself, be considered a termination of the derivative instrument or a change in a critical term of the hedging relationship. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. The Company does not expect the adoption of ASU 2016-05 to have a material impact on its consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-06, “Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments.” This ASU clarifies that in assessing whether an embedded contingent put or call option is clearly and closely related to the debt host, an entity is required to perform only the four-step decision sequence in ASC 815-15-25-42 (as amended by the ASU). The entity does not have to separately assess whether the event that triggers its ability to exercise the contingent option is itself indexed only to interest rates or credit risk. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. The Company has concluded the adoption of ASU 2016-06 will not have a material impact on its consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-07, “Investments – Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting.” This ASU simplifies the equity method of accounting by eliminating the requirement to retrospectively apply the equity method to an investment that subsequently qualifies for such accounting as a result of an increase in the level of ownership interest or degree of influence. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. The amendments should be applied prospectively and early adoption is permitted. The Company has concluded the adoption of ASU 2016-07 will not have a material impact on its consolidated financial statements.

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In March 2016, the FASB issued ASU No. 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net).” This ASU amends the principal-versus-agent implementation guidance and illustrations in the FASB’s new revenue standard (ASU 2014-09) and clarifies that an entity should evaluate whether it is the principal or the agent for each specified good or service promised in a contract with a customer. The ASU has the same effective date as the new revenue standard (as amended by the one-year deferral and the early adoption provisions in ASU 2015-14 delaying the effective date to fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017). In addition, entities are required to adopt the ASU by using the same transition method they used to adopt the new revenue standard. The Company is currently assessing the impact ASU 2016-08 will have on its consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-09, “Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” This ASU simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted; however, if the Company elects to early adopt, then all amendments must be adopted in the same period. The Company has concluded the adoption of ASU 2016-07 will not have a material impact on its consolidated financial statements.

In April 2016, the FASB issued ASU No. 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing.” This ASU amends certain aspects of the FASB’s new revenue standard, specifically the standard’s guidance on identifying performance obligations and the implementation guidance on licensing. The amendments in this update affect the guidance in ASU 2014-09, Revenue from Contracts with Customers, which is not yet effective. The ASU has the same effective date as the new revenue standard (as amended by the one-year deferral and the early adoption provisions in ASU 2015-14). The Company is currently assessing the impact ASU 2016-10 will have on its consolidated financial statements.

In May 2016, the FASB issued ASU No. 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients.”This ASU amends certain aspects of the FASB's new revenue standard to reduce the potential for diversity in practice at the initial application of Topic 606 by entities with transactions that fall into the scope of this guidance, as well as reducing the cost and complexity of applying Topic 606 at the transition date and on a continual basis. The amendment affects ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), that is not yet effective. The Company is currently assessing the impact ASU 2016-12 will have on its consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.”This ASU updates the existing guidance to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The amendment replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and required consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendment is effective for fiscal years beginning after December 15, 2019. The Company is currently assessing the impact ASU 2016-13 will have on its consolidated financial statements.

In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Payments (a consensus of Merging Issues Task Force)." This ASUattempts to clarify how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The purpose of this update is to reduce existing diversity in practice in eight areas addressed by the update. The amendment will be effective for the Company for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted. The Company has concluded the adoption of ASU 2016-15 will not have a material impact on its consolidated financial statements.

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2. SECURITIES

Available for Sale

The amortized cost, gross unrealized gains and losses, and estimated fair values of securities available for sale as of September 30, 2016 and December 31, 2015 are summarized as follows (dollars in thousands):

	Amortized		Gross Unrealized					Estimated
	Cost		Gains		(Losses)			Fair Value
September 30, 2016
Obligations of states and political subdivisions	$	266,291	$	13,147	$	(215	)	$	279,223
Corporate bonds	122,130		1,196		(1,579		)	121,747
Mortgage-backed securities	529,228		11,877		(509		)	540,596
Other securities	13,385		33		—			13,418
Total available for sale securities	$	931,034	$	26,253	$	(2,303	)	$	954,984
December 31, 2015
Obligations of states and political subdivisions	$	257,740	$	10,479	$	(140	)	$	268,079
Corporate bonds	77,628		55		(1,704		)	75,979
Mortgage-backed securities	544,823		6,127		(2,779		)	548,171
Other securities	11,085		—		(22		)	11,063
Total available for sale securities	$	891,276	$	16,661	$	(4,645	)	$	903,292

The following table shows the gross unrealized losses and fair value (in thousands) of the Company’s available for sale investments with unrealized losses that are not deemed to be other-than-temporarily impaired as of September 30, 2016 and December 31, 2015. These are aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position.

	Less than 12 months					More than 12 months					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
September 30, 2016
Obligations of states and political subdivisions	$	11,640	$	(209	)	$	655	$	(6	)	$	12,295	$	(215	)
Mortgage-backed securities	37,739		(156		)	43,430		(353		)	81,169		(509		)
Corporate bonds and other securities	5,059		(16		)	41,000		(1,563		)	46,059		(1,579		)
Total available for sale	$	54,438	$	(381	)	$	85,085	$	(1,922	)	$	139,523	$	(2,303	)
December 31, 2015
Obligations of states and political subdivisions	$	8,114	$	(70	)	$	4,950	$	(70	)	$	13,064	$	(140	)
Mortgage-backed securities	287,113		(2,442		)	21,660		(337		)	308,773		(2,779		)
Corporate bonds and other securities	36,157		(751		)	19,558		(975		)	55,715		(1,726		)
Total available for sale	$	331,384	$	(3,263	)	$	46,168	$	(1,382	)	$	377,552	$	(4,645	)

As of September 30, 2016, there were $85.1 million, or 28 issues, of individual available for sale securities that had been in a continuous loss position for more than 12 months. These securities had an unrealized loss of $1.9 million and consisted of municipal obligations, mortgage-backed securities, and corporate bonds. As of December 31, 2015, there were $46.2 million, or 20 issues, of individual securities that had been in a continuous loss position for more than 12 months. These securities had an unrealized loss of $1.4 million and consisted of municipal obligations, mortgage-backed securities, corporate bonds, and other securities. The Company has determined that these securities are temporarily impaired as of September 30, 2016 and December 31, 2015 for the reasons set out below:

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Mortgage-backed securities. This category’s unrealized losses are primarily the result of interest rate fluctuations. Because the decline in market value is attributable to changes in interest rates and not credit quality, the Company does not intend to sell the investments, and it is not likely that the Company will be required to sell the investments before recovery of their amortized cost basis, which may be maturity, the Company does not consider those investments to be other-than-temporarily impaired. Also, the majority of the Company’s mortgage-backed securities are agency-backed securities, which have a government guarantee.

Obligations of state and political subdivisions. This category’s unrealized losses are primarily the result of interest rate fluctuations and also a certain few ratings downgrades brought about by the impact of the economic downturn on states and political subdivisions. The contractual terms of the investments do not permit the issuer to settle the securities at a price less than the cost basis of each investment. Because the Company does not intend to sell any of the investments and the accounting standard of “more likely than not” has not been met for the Company to be required to sell any of the investments before recovery of its amortized cost basis, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired.

Corporate bonds. The Company’s unrealized losses in corporate debt securities are related to both interest rate fluctuations and ratings downgrades for a limited number of securities. The majority of the securities remain investment grade and the Company’s analysis did not indicate the existence of a credit loss. The contractual terms of the investments do not permit the issuer to settle the securities at a price less than the cost basis of each investment. Because the Company does not intend to sell any of the investments before recovery of its amortized cost basis, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired.

The following table presents the amortized cost and estimated fair value of available for sale securities as of September 30, 2016 and December 31, 2015, by contractual maturity (dollars in thousands). Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	September 30, 2016				December 31, 2015
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due in one year or less	$	16,667	$	16,860	$	8,380	$	8,370
Due after one year through five years	109,700		113,093		65,326		66,996
Due after five years through ten years	314,903		324,270		296,864		301,920
Due after ten years	489,764		500,761		520,706		526,006
Total securities available for sale	$	931,034	$	954,984	$	891,276	$	903,292

The following table presents the estimated fair value of available for sale securities which were pledged to secure public deposits, repurchase agreements, and for other purposes as permitted or required by law as of September 30, 2016 and December 31, 2015 (dollars in thousands):

	September 30, 2016		December 31, 2015
Public deposits	$	183,841	$	184,635
Repurchase agreements	116,844		126,120
Other purposes (1)	23,326		26,546
Total pledged securities	$	324,011	$	337,301

(1) The "Other purposes" category consists of borrowings, derivatives, and accounts held at the Bank.

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Held to Maturity

During the second quarter of 2015, the Company transferred securities, which it intends and has the ability to hold until maturity, with a fair value of $201.8 million on the date of transfer, from securities available for sale to securities held to maturity. The Company transferred these securities to held to maturity to reduce the impact of price volatility on capital and in consideration of changes to the regulatory environment. The securities included net pre-tax unrealized gains of $8.1 million at the date of transfer with a remaining balance of $5.6 million as of September 30, 2016 and $6.8 million as of December 31, 2015.

The Company reports securities held to maturity on the Consolidated Balance Sheets at carrying value. Carrying value is amortized cost which includes any unamortized unrealized gains and losses recognized in accumulated other comprehensive income prior to reclassifying the securities from securities available for sale to securities held to maturity. Investment securities transferred into the held to maturity category from the available for sale category are recorded at fair value at the date of transfer. The unrealized holding gain or loss at the date of transfer is retained in accumulated other comprehensive income and in the carrying value of the securities held to maturity. Such unrealized gains/(losses) are accreted over the remaining life of the security with no impact on future net income.

The carrying value, gross unrealized gains and losses, and estimated fair values of securities held to maturity as of September 30, 2016 and December 31, 2015 are summarized as follows (dollars in thousands):

	Carrying		Gross Unrealized					Estimated
	Value (1)		Gains		(Losses)			Fair Value
September 30, 2016
Obligations of states and political subdivisions	$	200,839	$	8,959	$	(81	)	$	209,717
December 31, 2015
Obligations of states and political subdivisions	$	205,374	$	5,748	$	(1,685	)	$	209,437

(1) The carrying value includes $5.6 million as of September 30, 2016 and $6.8 million as of December 31, 2015 of net unrealized gains present at the time of transfer from available for sale securities, net of any accretion.

The following table shows the gross unrealized losses and fair value (in thousands) of the Company’s held to maturity securities with unrealized losses that are not deemed to be other-than-temporarily impaired as of September 30, 2016 and December 31, 2015. These are aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position.

	Less than 12 months					More than 12 months					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
September 30, 2016
Obligations of states and political subdivisions	$	—	$	—		$	661	$	(81	)	$	661	$	(81	)
December 31, 2015
Obligations of states and political subdivisions	$	7,056	$	(1,685	)	$	—	$	—		$	7,056	$	(1,685	)

As of September 30, 2016, there was $661,000, or 1 issue, of an individual held to maturity security that had been in a continuous loss position for more than 12 months. This security had an unrealized loss of $81,000 and consisted of a municipal obligation. The Company has determined that these securities in a loss position are temporarily impaired as of September 30, 2016 and December 31, 2015 for the reasons set out below:

Obligations of states and political subdivisions. This category’s unrealized losses are primarily the result of interest rate fluctuations and also a certain few ratings downgrades brought about by the impact of the economic downturn on states and political subdivisions. The contractual terms of the investments do not permit the issuer to settle the securities at a price less than the cost basis of each investment. Because the Company does not intend to sell any of the investments and the accounting standard of “more likely than not” has not been met for the Company to be required to sell any of the investments before

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recovery of its amortized cost basis, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired.

The following table presents the amortized cost and estimated fair value of held to maturity securities as of September 30, 2016 and December 31, 2015, by contractual maturity (dollars in thousands). Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	September 30, 2016				December 31, 2015
	Carrying Value (1)		Estimated Fair Value		Carrying Value (1)		Estimated Fair Value
Due in one year or less	$	850	$	850	$	1,488	$	1,491
Due after one year through five years	25,918		26,561		4,294		4,348
Due after five years through ten years	48,243		50,017		44,736		45,501
Due after ten years	125,828		132,289		154,856		158,097
Total securities held to maturity	$	200,839	$	209,717	$	205,374	$	209,437

(1) The carrying value includes $5.6 million as of September 30, 2016 and $6.8 million as of December 31, 2015 of net unrealized gains present at the time of transfer from available for sale securities, net of any accretion.

The following table presents the estimated fair value of held to maturity securities which were pledged to secure public deposits as permitted or required by law as of September 30, 2016 and December 31, 2015 (dollars in thousands):

	September 30, 2016		December 31, 2015
Public deposits	$	209,717	$	207,140
Total pledged securities	$	209,717	$	207,140

Restricted Stock, at cost

Due to restrictions placed upon the Bank’s common stock investment in the Federal Reserve Bank and FHLB, these securities have been classified as restricted equity securities and carried at cost. These restricted securities are not subject to the investment security classifications and are included as a separate line item on the Company’s Consolidated Balance Sheets. At September 30, 2016 and December 31, 2015, the FHLB required the Bank to maintain stock in an amount equal to 4.25% of outstanding borrowings and a specific percentage of the Bank’s total assets. The Federal Reserve Bank required the Bank to maintain stock with a par value equal to 6% of its outstanding capital at both September 30, 2016 and December 31, 2015. Restricted equity securities consist of Federal Reserve Bank stock in the amount of $23.8 million for both September 30, 2016 and December 31, 2015 and FHLB stock in the amount of $39.4 million and $28.0 million as of September 30, 2016 and December 31, 2015, respectively.

Other-Than-Temporary-Impairment

During each quarter, the Company conducts an assessment of the securities portfolio for OTTI consideration. The assessment considers factors such as external credit ratings, delinquency coverage ratios, market price, management’s judgment, expectations of future performance, and relevant industry research and analysis. An impairment is other-than-temporary if any of the following conditions exist: the entity intends to sell the security; it is more likely than not that the entity will be required to sell the security before recovery of its amortized cost basis; or the entity does not expect to recover the security’s entire amortized cost basis (even if the entity does not intend to sell). If a credit loss exists, but an entity does not intend to sell the impaired debt security and is not more likely than not to be required to sell before recovery, the impairment is other-than-temporary and should be separated into a credit portion to be recognized in earnings and the remaining amount relating to all other factors recognized as other comprehensive loss. Based on the assessment for the three and nine months ended September 30, 2016, and in accordance with the guidance, no OTTI was recognized. For the year ended December 31, 2015, the Company determined that a municipal security in the available for sale portfolio incurred credit-related OTTI of $300,000.  During the quarter ended March 31, 2016, the municipal security was sold.  As a result, the Company recognized an additional loss on sale of the previously written down security.

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Realized Gains and Losses

The following table presents the gross realized gains and losses on the sale of securities available for sale and the proceeds from the sale of securities during the three and nine months ended September 30, 2016 and 2015 (dollars in thousands). The Company did not sell any investment securities that are held to maturity.

	Three Months Ended September 30, 2016		Nine Months Ended September 30, 2016
Realized gains (losses):
Gross realized gains	$	—	$	242
Gross realized losses	—		(97		)
Net realized gains	$	—	$	145
Proceeds from sales of securities	$	2,848	$	18,272

	Three Months Ended September 30, 2015		Nine Months Ended September 30, 2015
Realized gains (losses):
Gross realized gains	$	75	$	759
Gross realized losses	—		(87		)
Net realized gains	$	75	$	672
Proceeds from sales of securities	$	5,771	$	63,928

3. LOANS AND ALLOWANCE FOR LOAN LOSSES

Loans are stated at their face amount, net of deferred fees and costs, and consist of the following at September 30, 2016 and December 31, 2015 (dollars in thousands):

	September 30, 2016		December 31, 2015
Construction and Land Development	$	776,430	$	749,720
Commercial Real Estate - Owner Occupied	857,142		860,086
Commercial Real Estate - Non-Owner Occupied	1,454,828		1,270,480
Multifamily Real Estate	339,313		322,528
Commercial & Industrial	509,857		435,365
Residential 1-4 Family	999,361		978,469
Auto	255,188		234,061
HELOC	524,097		516,726
Consumer and all other	432,702		304,027
Total loans held for investment, net(1)	$	6,148,918	$	5,671,462

(1)Loans, as presented, are net of deferred fees and costs totaling $3.3 million and $3.0 million as of September 30, 2016 and December 31, 2015, respectively.

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The following table shows the aging of the Company’s loan portfolio, by segment, at September 30, 2016 (dollars in thousands):

	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days and still Accruing		PCI		Nonaccrual		Current		Total Loans
Construction and Land Development	$	309	$	697	$	610	$	3,205	$	2,301	$	769,308	$	776,430
Commercial Real Estate - Owner Occupied	1,411		365		304		19,064		1,609		834,389		857,142
Commercial Real Estate - Non-Owner Occupied	324		—		—		18,141		—		1,436,363		1,454,828
Multifamily Real Estate	—		—		—		2,079		—		337,234		339,313
Commercial & Industrial	567		51		77		1,145		1,344		506,673		509,857
Residential 1-4 Family	4,985		6,345		2,005		16,828		5,279		963,919		999,361
Auto	1,846		239		28		—		231		252,844		255,188
HELOC	2,600		899		407		1,498		1,464		517,229		524,097
Consumer and all other	1,713		1,037		98		386		449		429,019		432,702
Total loans held for investment	$	13,755	$	9,633	$	3,529	$	62,346	$	12,677	$	6,046,978	$	6,148,918

The following table shows the aging of the Company’s loan portfolio, by segment, at December 31, 2015 (dollars in thousands):

	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days and still Accruing		PCI		Nonaccrual		Current		Total Loans
Construction and Land Development	$	3,155	$	380	$	128	$	5,986	$	2,113	$	737,958	$	749,720
Commercial Real Estate - Owner Occupied	1,714		118		103		27,388		3,904		826,859		860,086
Commercial Real Estate - Non-Owner Occupied	771		—		723		13,519		100		1,255,367		1,270,480
Multifamily Real Estate	—		—		272		1,555		—		320,701		322,528
Commercial & Industrial	1,056		27		124		1,813		429		431,916		435,365
Residential 1-4 Family	15,023		6,774		3,638		21,159		3,563		928,312		978,469
Auto	2,312		233		60		—		192		231,264		234,061
HELOC	2,589		1,112		762		1,791		1,348		509,124		516,726
Consumer and all other	1,167		689		19		526		287		301,339		304,027
Total loans held for investment	$	27,787	$	9,333	$	5,829	$	73,737	$	11,936	$	5,542,840	$	5,671,462

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The following table shows the PCI loan portfolios, by segment and their delinquency status, at September 30, 2016 (dollars in thousands):

	30-89 Days Past Due		Greater than 90 Days		Current		Total
Construction and Land Development	$	29	$	—	$	3,176	$	3,205
Commercial Real Estate - Owner Occupied	737		634		17,693		19,064
Commercial Real Estate - Non-Owner Occupied	1,921		125		16,095		18,141
Multifamily Real Estate	—		—		2,079		2,079
Commercial & Industrial	45		57		1,043		1,145
Residential 1-4 Family	1,686		775		14,367		16,828
HELOC	122		435		941		1,498
Consumer and all other	—		—		386		386
Total	$	4,540	$	2,026	$	55,780	$	62,346

The following table shows the PCI loan portfolios, by segment and their delinquency status, at December 31, 2015 (dollars in thousands):

	30-89 Days Past Due		Greater than 90 Days		Current		Total
Construction and Land Development	$	369	$	241	$	5,376	$	5,986
Commercial Real Estate - Owner Occupied	1,139		1,412		24,837		27,388
Commercial Real Estate - Non-Owner Occupied	755		202		12,562		13,519
Multifamily Real Estate	—		—		1,555		1,555
Commercial & Industrial	209		21		1,583		1,813
Residential 1-4 Family	2,143		1,923		17,093		21,159
HELOC	410		458		923		1,791
Consumer and all other	—		—		526		526
Total	$	5,025	$	4,257	$	64,455	$	73,737

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The Company measures the amount of impairment by evaluating loans either in their collective homogeneous pools or individually. The following table shows the Company’s impaired loans, excluding PCI loans related to the StellarOne acquisition, by segment at September 30, 2016 and December 31, 2015 (dollars in thousands):

	September 30, 2016						December 31, 2015
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
Loans without a specific allowance
Construction and Land Development	$	25,171	$	25,647	$	—	$	33,250	$	33,731	$	—
Commercial Real Estate - Owner Occupied	6,414		6,579		—		7,781		8,983		—
Commercial Real Estate - Non-Owner Occupied	3,752		3,752		—		5,328		5,325		—
Multifamily Real Estate	—		—		—		3,828		3,828		—
Commercial & Industrial	952		1,362		—		711		951		—
Residential 1-4 Family	9,066		10,059		—		7,564		8,829		—
Auto	—		—		—		7		7		—
HELOC	1,347		1,416		—		1,786		2,028		—
Consumer and all other	173		223		—		211		211		—
Total impaired loans without a specific allowance	$	46,875	$	49,038	$	—	$	60,466	$	63,893	$	—
Loans with a specific allowance
Construction and Land Development	$	2,070	$	2,442	$	123	$	3,167	$	3,218	$	538
Commercial Real Estate - Owner Occupied	1,198		1,215		5		3,237		3,239		358
Commercial Real Estate - Non-Owner Occupied	40		40		1		907		907		75
Commercial & Industrial	2,496		2,498		642		1,952		1,949		441
Residential 1-4 Family	3,607		3,794		115		6,065		6,153		418
Auto	231		270		1		192		199		1
HELOC	706		791		17		769		925		76
Consumer and all other	278		650		88		363		512		95
Total impaired loans with a specific allowance	$	10,626	$	11,700	$	992	$	16,652	$	17,102	$	2,002
Total impaired loans	$	57,501	$	60,738	$	992	$	77,118	$	80,995	$	2,002

The following tables show the average recorded investment and interest income recognized for the Company’s impaired loans, excluding PCI loans related to the StellarOne acquisition, by segment for the three and nine months ended September 30, 2016 and 2015 (dollars in thousands):

	Three Months Ended September 30, 2016				Nine Months Ended September 30, 2016
	Average Investment		Interest Income Recognized		Average Investment		Interest Income Recognized
Construction and Land Development	$	28,195	$	464	$	27,645	$	1,346
Commercial Real Estate - Owner Occupied	7,691		72		7,862		230
Commercial Real Estate - Non-Owner Occupied	3,777		33		3,759		98
Commercial & Industrial	4,628		42		4,964		134
Residential 1-4 Family	13,106		89		13,439		267
Auto	271		—		289		4
HELOC	2,118		7		2,185		35
Consumer and all other	453		—		620		6
Total impaired loans	$	60,239	$	707	$	60,763	$	2,120

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	Three Months Ended September 30, 2015				Nine Months Ended September 30, 2015
	Average Investment		Interest Income Recognized		Average Investment		Interest Income Recognized
Construction and Land Development	$	33,145	$	530	$	33,727	$	1,579
Commercial Real Estate - Owner Occupied	18,859		195		18,709		547
Commercial Real Estate - Non-Owner Occupied	8,596		96		8,809		270
Multifamily Real Estate	4,593		75		4,598		222
Commercial & Industrial	3,503		42		3,633		125
Residential 1-4 Family	11,494		160		11,723		374
Auto	115		1		121		5
HELOC	1,710		14		1,727		36
Consumer and all other	534		6		594		20
Total impaired loans	$	82,549	$	1,119	$	83,641	$	3,178

The Company considers TDRs to be impaired loans. A modification of a loan’s terms constitutes a TDR if the creditor grants a concession that it would not otherwise consider to the borrower for economic or legal reasons related to the borrower’s financial difficulties. All loans that are considered to be TDRs are evaluated for impairment in accordance with the Company’s allowance for loan loss methodology and are included in the preceding impaired loan tables. For the three and nine months ended September 30, 2016, the recorded investment in restructured loans prior to modifications was not materially impacted by the modification.

The following table provides a summary, by segment, of modified loans that continue to accrue interest under the terms of the restructuring agreement, which are considered to be performing, and modified loans that have been placed on nonaccrual status, which are considered to be nonperforming, as of September 30, 2016 and December 31, 2015 (dollars in thousands):

	September 30, 2016					December 31, 2015
	No. of Loans	Recorded Investment		Outstanding Commitment		No. of Loans	Recorded Investment		Outstanding Commitment
Performing
Construction and Land Development	5	$	3,744	$	—	6	$	3,349	$	—
Commercial Real Estate - Owner Occupied	5	2,070		—		5	1,530		—
Commercial Real Estate - Non-Owner Occupied	2	2,390		—		2	2,390		—
Commercial & Industrial	4	663		—		5	261		—
Residential 1-4 Family	25	2,957		—		27	3,173		—
Consumer and all other	—	—		—		1	77		—
Total performing	41	$	11,824	$	—	46	$	10,780	$	—
Nonperforming
Construction and Land Development	2	$	215	$	—	2	$	321	$	—
Commercial Real Estate - Owner Occupied	2	161		—		1	137		—
Commercial & Industrial	1	125		—		1	2		—
Residential 1-4 Family	8	951		—		6	1,142		—
HELOC	—	—		—		1	319		—
Total nonperforming	13	$	1,452	$	—	11	$	1,921	$	—
Total performing and nonperforming	54	$	13,276	$	—	57	$	12,701	$	—

The Company considers a default of a restructured loan to occur when the borrower is 90 days past due following the restructure or a foreclosure and repossession of the applicable collateral occurs. During the three and nine months ended September 30, 2016, the Company identified one loan, totaling approximately $23,000, that went into default that had been restructured in the twelve-month period prior to the time of default. This loan was a commercial real estate - owner occupied loan which had a term modification at a market rate. During the three and nine months ended September 30, 2015, the

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Company did not identify any restructured loans that went into default that had been restructured in the twelve-month period prior to default.

The following table shows, by segment and modification type, TDRs that occurred during the three and nine months ended September 30, 2016 (dollars in thousands):

	Three Months Ended September 30, 2016			Nine Months Ended September 30, 2016
	No. of Loans	Recorded  Investment at Period End		No. of Loans	Recorded  Investment at Period End
Term modification, at a market rate
Construction and Land Development	—	$	—	1	$	1,177
Commercial Real Estate - Owner Occupied	—	—		2	739
Commercial & Industrial	1	457		1	457
Residential 1-4 Family	—	—		2	474
Total loan term extended at a market rate	1	$	457	6	$	2,847
Term modification, below market rate
Residential 1-4 Family	—	$	—	1	$	36
Total loan term extended at a below market rate	—	$	—	1	$	36
Interest rate modification, below market rate
Commercial & Industrial	—	$	—	1	$	125
Total interest only at below market rate of interest	—	$	—	1	$	125
Total	1	$	457	8	$	3,008

The following table shows, by segment and modification type, TDRs that occurred during the three and nine months ended September 30, 2015 (dollars in thousands):

	Three Months Ended September 30, 2015			Nine Months Ended September 30, 2015
	No. of Loans	Recorded  Investment at Period End		No. of Loans	Recorded  Investment at Period End
Term modification, at a market rate
Commercial Real Estate - Owner Occupied	—	$	—	1	$	117
Commercial & Industrial	—	—		1	17
Total loan term extended at a market rate	—	$	—	2	$	134
Term modification, below market rate
Construction and Land Development	1	$	400	1	$	400
Commercial Real Estate - Owner Occupied	—	—		1	871
Residential 1-4 Family	3	674		3	674
Total loan term extended at a below market rate	4	$	1,074	5	$	1,945
Total	4	$	1,074	7	$	2,079

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The following table shows the allowance for loan loss activity, balances for allowance for loan losses, and loan balances based on impairment methodology by segment for the nine months ended and as of September 30, 2016. The table below includes the provision for loan losses. As discussed in Note 1 “Accounting Policies,” the Company enhanced its loan segmentation for purposes of the allowance calculation as well as its disclosures. The impact of this enhancement is reflected in the provision amounts in the table below. In addition, a $175,000 provision was recognized during the nine months ended September 30, 2016 for unfunded loan commitments for which the reserves are recorded as a component of “Other Liabilities” on the Company’s Consolidated Balance Sheets. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories (dollars in thousands):

	Allowance for loan losses
	Balance, beginning of the year		Recoveries credited to allowance		Loans charged off			Provision charged to operations			Balance, end of period
Construction and Land Development	$	6,040	$	165	$	(869	)	$	5,464		$	10,800
Commercial Real Estate - Owner Occupied	4,614		112		(772		)	(770		)	3,184
Commercial Real Estate - Non-Owner Occupied	6,929		3		(1		)	(813		)	6,118
Multifamily Real Estate	1,606		—		—			(658		)	948
Commercial & Industrial	3,163		422		(1,301		)	3,119			5,403
Residential 1-4 Family	5,414		466		(741		)	518			5,657
Auto	1,703		243		(815		)	(260		)	871
HELOC	2,934		229		(1,272		)	(534		)	1,357
Consumer and all other	1,644		382		(957		)	1,135			2,204
Total	$	34,047	$	2,022	$	(6,728	)	$	7,201		$	36,542

	Loans individually evaluated for impairment				Loans collectively evaluated for impairment				Loans acquired with deteriorated credit quality				Total
	Loans		ALL		Loans		ALL		Loans		ALL		Loans		ALL
Construction and Land Development	$	27,241	$	123	$	745,984	$	10,677	$	3,205	$	—	$	776,430	$	10,800
Commercial Real Estate - Owner Occupied	7,612		5		830,466		3,179		19,064		—		857,142		3,184
Commercial Real Estate - Non-Owner Occupied	3,792		1		1,432,895		6,117		18,141		—		1,454,828		6,118
Multifamily Real Estate	—		—		337,234		948		2,079		—		339,313		948
Commercial & Industrial	3,448		642		505,264		4,761		1,145		—		509,857		5,403
Residential 1-4 Family	12,673		115		969,860		5,542		16,828		—		999,361		5,657
Auto	231		1		254,957		870		—		—		255,188		871
HELOC	2,053		17		520,546		1,340		1,498		—		524,097		1,357
Consumer and all other	451		88		431,865		2,116		386		—		432,702		2,204
Total loans held for investment, net	$	57,501	$	992	$	6,029,071	$	35,550	$	62,346	$	—	$	6,148,918	$	36,542

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The following table shows the allowance for loan loss activity, balances for allowance for loan losses, and loan balances based on impairment methodology by segment for the nine months ended and as of September 30, 2015. In addition, a $300,000 provision was recognized during the nine months ended September 30, 2015 for unfunded loan commitments. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories (dollars in thousands):

	Allowance for loan losses
	Balance, beginning of the year		Recoveries credited to allowance		Loans charged off			Provision charged to operations		Balance, end of period
Construction and Land Development	$	4,856	$	594	$	(415	)	$	169	$	5,204
Commercial Real Estate - Owner Occupied	4,640		15		(481		)	630		4,804
Commercial Real Estate - Non-Owner Occupied	7,256		232		(2,850		)	1,744		6,382
Multifamily Real Estate	1,374		—		—			296		1,670
Commercial & Industrial	2,610		776		(2,081		)	1,485		2,790
Residential 1-4 Family	5,607		513		(1,303		)	927		5,744
Auto	1,297		213		(545		)	600		1,565
HELOC	2,675		237		(749		)	671		2,834
Consumer and all other	2,069		414		(946		)	739		2,276
Total	$	32,384	$	2,994	$	(9,370	)	$	7,261	$	33,269

	Loans individually evaluated for impairment				Loans collectively evaluated for impairment				Loans acquired with deteriorated credit quality				Total
	Loans		ALL		Loans		ALL		Loans		ALL		Loans		ALL
Construction and Land Development	$	33,647	$	175	$	653,370	$	5,029	$	7,628	$	—	$	694,645	$	5,204
Commercial Real Estate - Owner Occupied	18,564		677		816,320		4,127		28,694		—		863,578		4,804
Commercial Real Estate - Non-Owner Occupied	8,632		137		1,201,649		6,245		13,326		—		1,223,607		6,382
Multifamily Real Estate	4,607		—		323,409		1,670		1,943		—		329,959		1,670
Commercial & Industrial	3,439		318		403,973		2,472		2,245		—		409,657		2,790
Residential 1-4 Family	10,679		615		954,730		5,129		22,379		—		987,788		5,744
Auto	89		1		225,905		1,564		—		—		225,994		1,565
HELOC	1,502		9		511,048		2,825		1,812		—		514,362		2,834
Consumer and all other	459		80		292,993		2,196		579		—		294,031		2,276
Total loans held for investment, net	$	81,618	$	2,012	$	5,383,397	$	31,257	$	78,606	$	—	$	5,543,621	$	33,269

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The Company uses a risk rating system and past due status as the primary credit quality indicators for the loan categories. The risk rating system on a scale of 0 through 9 is used to determine risk level as used in the calculation of the allowance for loan losses; on those loans without a risk rating, the Company uses past due status to determine risk level. The risk levels, as described below, do not necessarily follow the regulatory definitions of risk levels with the same name. A general description of the characteristics of the risk levels follows:

Pass is determined by the following criteria:

•Risk rated 0 loans have little or no risk and are generally secured by General Obligation Municipal Credits;

•Risk rated 1 loans have little or no risk and are generally secured by cash or cash equivalents;

•Risk rated 2 loans have minimal risk to well qualified borrowers and no significant questions as to safety;

•Risk rated 3 loans are satisfactory loans with strong borrowers and secondary sources of repayment;

•Risk rated 4 loans are satisfactory loans with borrowers not as strong as risk rated 3 loans and may exhibit a greater

degree of financial risk based on the type of business supporting the loan; or

•Loans that are not risk rated but that are 0 to 29 days past due.

Special Mention is determined by the following criteria:

•Risk rated 5 loans are watch loans that warrant more than the normal level of supervision and have the possibility of an

event occurring that may weaken the borrower’s ability to repay;

•Risk rated 6 loans have increasing potential weaknesses beyond those at which the loan originally was granted and if

not addressed could lead to inadequately protecting the Company’s credit position; or

•Loans that are not risk rated but that are 30 to 89 days past due.

Substandard is determined by the following criteria:

•Risk rated 7 loans are substandard loans and are inadequately protected by the current sound worth or paying capacity

of the obligor or the collateral pledged; these have well defined weaknesses that jeopardize the liquidation of the debt

with the distinct possibility the Company will sustain some loss if the deficiencies are not corrected; or

•Loans that are not risk rated but that are 90 to 149 days past due.

Doubtful is determined by the following criteria:

•Risk rated 8 loans are doubtful of collection and the possibility of loss is high but pending specific borrower plans for

recovery, its classification as a loss is deferred until its more exact status is determined;

•Risk rated 9 loans are loss loans which are considered uncollectable and of such little value that their continuance as

    bankable assets is not warranted; or

•Loans that are not risk rated but that are over 149 days past due.

The following table shows the recorded investment in all loans, excluding PCI loans, by segment with their related risk level as of September 30, 2016 (dollars in thousands):

	Pass		Special Mention		Substandard		Doubtful		Total
Construction and Land Development	$	690,623	$	56,433	$	25,559	$	610	$	773,225
Commercial Real Estate - Owner Occupied	806,096		26,090		5,892		—		838,078
Commercial Real Estate - Non-Owner Occupied	1,399,369		33,608		3,710		—		1,436,687
Multifamily Real Estate	313,497		23,737		—		—		337,234
Commercial & Industrial	495,764		10,088		2,860		—		508,712
Residential 1-4 Family	950,707		22,163		7,571		2,092		982,533
Auto	252,549		2,459		91		89		255,188
HELOC	516,178		4,745		1,305		371		522,599
Consumer and all other	428,574		3,503		42		197		432,316
Total	$	5,853,357	$	182,826	$	47,030	$	3,359	$	6,086,572

-23-

The following table shows the recorded investment in all loans, excluding PCI loans, by segment with their related risk level as of December 31, 2015 (dollars in thousands):

	Pass		Special Mention		Substandard		Doubtful		Total
Construction and Land Development	$	663,067	$	52,650	$	27,980	$	37	$	743,734
Commercial Real Estate - Owner Occupied	800,979		20,856		8,931		1,932		832,698
Commercial Real Estate - Non-Owner Occupied	1,228,956		22,341		5,664		—		1,256,961
Multifamily Real Estate	315,128		2,017		3,828		—		320,973
Commercial & Industrial	414,333		16,724		2,396		99		433,552
Residential 1-4 Family	912,839		34,728		8,037		1,706		957,310
Auto	230,670		3,109		194		88		234,061
HELOC	507,514		4,801		1,611		1,009		514,935
Consumer and all other	299,014		3,996		231		260		303,501
Total	$	5,372,500	$	161,222	$	58,872	$	5,131	$	5,597,725

The following table shows the recorded investment in only PCI loans by segment with their related risk level as of September 30, 2016 (dollars in thousands):

	Pass		Special Mention		Substandard		Doubtful		Total
Construction and Land Development	$	1,102	$	1,677	$	426	$	—	$	3,205
Commercial Real Estate - Owner Occupied	5,313		9,036		4,715		—		19,064
Commercial Real Estate - Non-Owner Occupied	4,855		11,562		1,724		—		18,141
Multifamily Real Estate	347		1,732		—		—		2,079
Commercial & Industrial	93		496		556		—		1,145
Residential 1-4 Family	8,085		5,297		2,941		505		16,828
HELOC	932		130		—		436		1,498
Consumer and all other	326		38		22		—		386
Total	$	21,053	$	29,968	$	10,384	$	941	$	62,346

The following table shows the recorded investment in only PCI loans by segment with their related risk level as of December 31, 2015 (dollars in thousands):

	Pass		Special Mention		Substandard		Doubtful		Total
Construction and Land Development	$	2,059	$	1,778	$	1,908	$	241	$	5,986
Commercial Real Estate - Owner Occupied	5,260		15,530		6,598		—		27,388
Commercial Real Estate - Non-Owner Occupied	4,442		7,827		1,250		—		13,519
Multifamily Real Estate	356		1,199		—		—		1,555
Commercial & Industrial	144		359		1,289		21		1,813
Residential 1-4 Family	9,098		6,380		4,605		1,076		21,159
HELOC	923		410		20		438		1,791
Consumer and all other	57		379		90		—		526
Total	$	22,339	$	33,862	$	15,760	$	1,776	$	73,737

Loans acquired are originally recorded at fair value, with certain loans being identified as impaired at the date of purchase. The fair values were determined based on the credit quality of the portfolio, expected future cash flows, and timing of those expected future cash flows.

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The following shows changes in the accretable yield for loans accounted for under ASC 310-30, Receivables – Loans and Debt Securities Acquired with Deteriorated Credit Quality, for the periods presented (dollars in thousands):

	For the Nine Months Ended September 30,
	2016			2015
Balance at beginning of period	$	22,139		$	28,956
Accretion	(4,232		)	(4,707		)
Reclass of nonaccretable difference due to improvement in expected cash flows	3,580			3,168
Other, net (1)	(1,149		)	(5,624		)
Balance at end of period	$	20,338		$	21,793

(1)This line item represents changes in the cash flows expected to be collected due to the impact of non-credit changes such as prepayment assumptions, changes in interest rates on variable rate PCI loans, and discounted payoffs that occurred in the quarter.

The carrying value of the Company’s PCI loan portfolio, accounted for under ASC 310-30, totaled $62.3 million at September 30, 2016 and $73.7 million at December 31, 2015. The outstanding balance of the Company’s PCI loan portfolio totaled $77.9 million at September 30, 2016 and $90.3 million at December 31, 2015. The carrying value of the Company’s acquired performing loan portfolio, accounted for under ASC 310-20, Receivables – Nonrefundable Fees and Other Costs, totaled $1.2 billion at September 30, 2016 and $1.4 billion at December 31, 2015; the remaining discount on these loans totaled $18.2 million at September 30, 2016 and $20.8 million at December 31, 2015.

4.INTANGIBLE ASSETS

The Company’s intangible assets consist of core deposits, goodwill, and other intangibles arising from previous and current acquisitions. The Company has determined that core deposit intangibles have finite lives and amortizes them over their estimated useful lives. Core deposit intangible assets are being amortized over the period of expected benefit, which ranges from 4 to 14 years, using an accelerated method. On January 1, 2014, the Company completed the acquisition of StellarOne and acquired intangible assets of $29.6 million and recorded $234.1 million of goodwill. On May 31, 2016, the Company completed the acquisition of ODCM and recorded goodwill of $4.7 million and other amortizable intangible assets of $4.5 million. The Company is amortizing these intangible assets over the period of expected benefit, which ranges from 5 to 10 years using a straight-line method. During the current quarter, the Company finalized the valuation of certain amortizable intangible assets which increased the fair value and also impacting the recognized goodwill. The fair values are subject to refinement for up to one year after the closing date of the acquisition.

In accordance with ASC 350, Intangibles-Goodwill and Other, the Company reviews the carrying value of indefinite lived intangible assets at least annually or more frequently if certain impairment indicators exist. The Company performed its annual impairment testing in the second quarter of 2016 and determined that there was no impairment to its goodwill or intangible assets.

Amortization expense of core deposit intangibles for the three and nine months ended September 30, 2016 totaled $1.7 million and $5.3 million, respectively; and the three and nine months ended September 30, 2015 totaled $2.1 million and $6.4 million, respectively. Amortization expense of other intangibles for both the three and nine months ended September 30, 2016 totaled $160,000, respectively. As of September 30, 2016, the estimated remaining amortization expense of core deposit intangibles and other amortizable intangible assets is as follows (dollars in thousands):

For the remaining three months of 2016	$	1,745
For the year ending December 31, 2017	6,070
For the year ending December 31, 2018	4,624
For the year ending December 31, 2019	3,573
For the year ending December 31, 2020	2,508
Thereafter	3,823
Total estimated amortization expense	$	22,343

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5. BORROWINGS

Short-term Borrowings

The Company classifies all borrowings that will mature within a year from the date on which the Company enters into them as short-term borrowings. Total short-term borrowings consist primarily of advances from the FHLB, federal funds purchased (which are secured overnight borrowings from other financial institutions), and other lines of credit. Also included in total short-term borrowings are securities sold under agreements to repurchase, which are secured transactions with customers and generally mature the day following the date sold. Total short-term borrowings consist of the following as of September 30, 2016 and December 31, 2015 (dollars in thousands):

	September 30, 2016			December 31, 2015
Securities sold under agreements to repurchase	$	64,225		$	84,977
Other short-term borrowings	601,500			304,000
Total short-term borrowings	$	665,725		$	388,977
Maximum month-end outstanding balance	$	678,262		$	445,761
Average outstanding balance during the period	583,418			379,783
Average interest rate (year-to-date)	0.48		%	0.25		%
Average interest rate at end of period	0.48		%	0.27		%
Other short-term borrowings:
Federal funds purchased	$	6,000		$	—
FHLB	579,500			304,000
Other lines of credit	16,000			—

The Bank maintains federal funds lines with several correspondent banks; the remaining available balance was $169.0 million at September 30, 2016 and $175.0 million at December 31, 2015. The Company maintains an alternate line of credit at a correspondent bank, the available balance was $9.0 million at September 30, 2016 and $25.0 million at December 31, 2015. The Company has certain restrictive covenants related to certain asset quality, capital, and profitability metrics associated with these lines and is considered to be in compliance with these covenants. Additionally, the Company had a collateral dependent line of credit with the FHLB of up to $2.4 billion and $1.5 billion at September 30, 2016 and December 31, 2015, respectively.

Long-term Borrowings

In connection with two bank acquisitions prior to 2006, the Company issued trust preferred capital notes to fund the cash portion of those acquisitions, collectively totaling $58.5 million. In connection with the acquisition of StellarOne, the Company acquired trust preferred capital notes totaling $32.0 million with a remaining fair value discount of $6.8 million at September 30, 2016. The trust preferred capital notes currently qualify for Tier 1 capital of the Company for regulatory purposes.

	Trust Preferred Capital Securities(1)		Investment(1)		Spread to  3-Month LIBOR		Rate		Maturity
Trust Preferred Capital Note - Statutory Trust I	$	22,500,000	$	696,000	2.75	%	3.60	%	6/17/2034
Trust Preferred Capital Note - Statutory Trust II	36,000,000		1,114,000		1.40	%	2.25	%	6/15/2036
VFG Limited Liability Trust I Indenture	20,000,000		619,000		2.73	%	3.58	%	3/18/2034
FNB Statutory Trust II Indenture	12,000,000		372,000		3.10	%	3.95	%	6/26/2033
Total	$	90,500,000	$	2,801,000

(1)The total of the trust preferred capital securities and investments in the respective trusts represents the principal asset of the Company's junior subordinated debt securities with like maturities and like interest rates to the capital securities. The Company's investment in the trusts is reported in "Other Assets" within the Consolidated Balance Sheets.

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On August 23, 2012, the Company modified its fixed rate FHLB advances to floating rate advances, which resulted in reducing the Company’s FHLB borrowing costs. In connection with this modification, the Company incurred a prepayment penalty of $19.6 million on the original advances, which is included as a component of long-term borrowings in the Company’s Consolidated Balance Sheets. In accordance with ASC 470-50, Modifications and Extinguishments, the Company is amortizing this prepayment penalty over the term of the modified advances using the effective rate method. The amortization expense is included as a component of interest expense on long-term borrowings in the Company’s Consolidated Statements of Income. Amortization expense for the three and nine months ended September 30, 2016 and 2015 was $474,000 and $1.4 million and $463,000 and $1.4 million, respectively.

In connection with the StellarOne acquisition, the Company assumed $70.0 million in long-term borrowings with the FHLB of which there is $45.0 million remaining at September 30, 2016 that had a remaining fair value premium of $693,000.

As of September 30, 2016, the Company had long-term advances from the FHLB consisting of the following (dollars in thousands):

Long-term Type	Spread to 3-Month LIBOR		Interest Rate (1)		Maturity Date	Advance Amount
Adjustable Rate Credit	0.44	%	1.29	%	8/23/2022	$	55,000
Adjustable Rate Credit	0.45	%	1.31	%	11/23/2022	65,000
Adjustable Rate Credit	0.45	%	1.31	%	11/23/2022	10,000
Adjustable Rate Credit	0.45	%	1.31	%	11/23/2022	10,000
Fixed Rate	—		3.62	%	11/28/2017	10,000
Fixed Rate	—		3.75	%	7/30/2018	5,000
Fixed Rate	—		3.97	%	7/30/2018	5,000
Fixed Rate Hybrid	—		2.11	%	10/5/2016	25,000
						$	185,000
(1) Interest rates calculated using non-rounded numbers.

As of December 31, 2015, the Company had long-term advances from the FHLB consisting of the following (dollars in thousands):

Long-term Type	Spread to 3-Month LIBOR		Interest Rate (1)		Maturity Date	Advance Amount
Adjustable Rate Credit	0.44	%	1.05	%	8/23/2022	$	55,000
Adjustable Rate Credit	0.45	%	1.07	%	11/23/2022	65,000
Adjustable Rate Credit	0.45	%	1.07	%	11/23/2022	10,000
Adjustable Rate Credit	0.45	%	1.07	%	11/23/2022	10,000
Fixed Rate	—		3.62	%	11/28/2017	10,000
Fixed Rate	—		3.75	%	7/30/2018	5,000
Fixed Rate	—		3.97	%	7/30/2018	5,000
Fixed Rate Hybrid	—		2.11	%	10/5/2016	25,000
Fixed Rate Hybrid	—		0.91	%	7/25/2016	15,000
						$	200,000
(1) Interest rates calculated using non-rounded numbers.

The carrying value of the loans and securities pledged as collateral for FHLB advances totaled $2.0 billion as of September 30, 2016 and $1.9 billion at December 31, 2015.

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As of September 30, 2016, the contractual maturities of long-term debt are as follows for the years ending (dollars in thousands):

	Trust Preferred Capital Notes		FHLB Advances		Fair Value  Premium (Discount)			Prepayment Penalty			Total Long-term Borrowings
For the remaining three months of 2016	$	—	$	25,000	$	71		$	(477	)	$	24,594
2017	—		10,000		170			(1,922		)	8,248
2018	—		10,000		(143		)	(1,970		)	7,887
2019	—		—		(286		)	(2,018		)	(2,304		)
2020	—		—		(301		)	(2,074		)	(2,375		)
Thereafter	93,301		140,000		(5,623		)	(3,826		)	223,852
Total Long-term borrowings	$	93,301	$	185,000	$	(6,112	)	$	(12,287	)	$	259,902

6. COMMITMENTS AND CONTINGENCIES

Litigation Matters

In the ordinary course of its operations, the Company and its subsidiaries are parties to various legal proceedings. Based on the information presently available, and after consultation with legal counsel, management believes that the ultimate outcome in such proceedings, in the aggregate, will not have a material adverse effect on the business, financial condition, or results of operations of the Company.

Financial Instruments with Off-Balance Sheet Risk

The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers and to reduce its own exposure to fluctuations in interest rates. These financial instruments include commitments to extend credit and standby letters of credit. These instruments involve elements of credit and interest rate risk in excess of the amount recognized in the Company’s Consolidated Balance Sheets. The contractual amounts of these instruments reflect the extent of the Company’s involvement in particular classes of financial instruments.

The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instruments for commitments to extend credit and letters of credit written is represented by the contractual amount of these instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. Unless noted otherwise, the Company does not require collateral or other security to support off-balance sheet financial instruments with credit risk. The Company considers credit losses related to off-balance sheet commitments by undergoing a similar process in evaluating losses for loans that are carried on balance sheet. The Company considers historical loss rates, current economic conditions, risk ratings, and past due status among other factors in the consideration of whether credit losses are inherent in the Company’s off-balance sheet commitments to extend credit. The Company does not expect credit losses arising from off-balance sheet commitments to have a material adverse impact on the Company’s consolidated financial statements.

Commitments to extend credit are agreements to lend to customers as long as there are no violations of any conditions established in the contracts. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Because many of the commitments may expire without being completely drawn upon, the total commitment amounts do not necessarily represent future cash requirements.

Letters of credit are conditional commitments issued by the Company to guarantee the performance of customers to third parties. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers.

UMG, a wholly owned subsidiary of the Bank, uses rate lock commitments and best efforts contracts during the origination process and for loans held for sale. These best efforts contracts are designed to mitigate UMG’s exposure to fluctuations in interest rates in connection with rate lock commitments and loans held for sale.

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The following table presents the balances of commitments and contingencies (dollars in thousands):

	September 30, 2016		December 31, 2015
Commitments with off-balance sheet risk:
Commitments to extend credit (1)	$	1,787,953	$	1,557,350
Standby letters of credit	84,491		139,371
Mortgage loan rate lock commitments	76,070		50,369
Total commitments with off-balance sheet risk	$	1,948,514	$	1,747,090
Commitments with balance sheet risk:
Loans held for sale	$	46,814	$	36,030
Total other commitments	$	1,995,328	$	1,783,120

(1) Includes unfunded overdraft protection.

The Company must maintain a reserve against its deposits in accordance with Regulation D of the Federal Reserve Act. For the final weekly reporting period in the periods ended September 30, 2016 and December 31, 2015, the aggregate amount of daily average required reserves was approximately $52.7 million and $48.7 million, respectively.

As of September 30, 2016, the Company had approximately $49.3 million in deposits in other financial institutions, of which $18.8 million and $14.8 million serve as collateral for the cash flow hedges and loan swaps, respectively, as discussed in Note 7 “Derivatives”. The Company had approximately $14.2 million in deposits in other financial institutions that were uninsured at September 30, 2016. On an annual basis, the Company’s management evaluates the loss risk of its uninsured deposits in financial counterparties.

For asset/liability management purposes, the Company uses interest rate swap agreements to hedge various exposures or to modify the interest rate characteristics of various balance sheet accounts. See Note 7 “Derivatives” for additional information.

In the ordinary course of business, the Company records an indemnification reserve relating to the credit card portfolio and to mortgage loans previously sold based on historical statistics and loss rates; as of September 30, 2016 and December 31, 2015, the Company’s indemnification reserve was approximately $506,000 and $450,000, respectively.

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7. DERIVATIVES

The Company is exposed to economic risks arising from its business operations and uses derivatives primarily to manage risk associated with changing interest rates, and to assist customers with their risk management objectives. The Company designates certain derivatives as hedging instruments in a qualifying hedge accounting relationship (cash flow or fair value hedge). The remaining are classified as free standing derivatives consisting of customer accommodation loan swaps and interest rate lock commitments that do not qualify for hedge accounting.

Cash Flow Hedges

The Company designates derivatives as cash flow hedges when they are used to manage exposure to variability in cash flows related to forecasted transactions on variable rate borrowings, such as trust preferred capital notes, FHLB borrowings, and prime commercial loans. The Company uses interest rate swap agreements as part of its hedging strategy by exchanging a notional amount, equal to the principal amount of the borrowings, for fixed-rate interest based on benchmarked interest rates.

All swaps entered into with counterparties met the Company’s credit standards, and the agreements contain collateral provisions protecting the at-risk party. The Company believes that the credit risk inherent in the contract is not significant.

The terms and conditions of the interest rate swaps vary and amounts receivable or payable are recognized as accrued under the terms of the agreements. The Company assesses the effectiveness of each hedging relationship on a periodic basis using statistical regression analysis. The Company also measures the ineffectiveness of each hedging relationship using the change in variable cash flows method which compares the cumulative changes in cash flows of the hedging instrument relative to cumulative changes in the hedged item’s cash flows. In accordance with ASC 815, Derivatives and Hedging, the effective portions of the derivatives’ unrealized gains or losses are recorded as a component of other comprehensive income. Based on the Company’s assessment, its cash flow hedges are highly effective, but to the extent that any ineffectiveness exists in the hedge relationships, the amounts would be recorded in interest income or interest expense in the Company’s Consolidated Statements of Income.

On June 13, 2016, the Company terminated three interest rate swaps designated as cash flow hedges prior to their respective maturity dates. The unrealized gain of $1.3 million within accumulated Other Comprehensive Income will be re-classified into earnings over a three year period using the effective interest method. The estimated net amount of gains expected to be reclassified into earnings within the next twelve months is $377,000.

Fair Value Hedge

Derivatives are designated as fair value hedges when they are used to manage exposure to changes in the fair value of certain financial assets and liabilities, referred to as the hedged items, which fluctuate in value as a result of movements in interest rates. During the normal course of business, the Company enters into interest rate swaps to convert certain long-term fixed-rate loans to floating rates to hedge the Company’s exposure to interest rate risk. The Company pays a fixed interest rate to the counterparty and receives a floating rate from the same counterparty, calculated on the aggregate notional amount. At September 30, 2016 and December 31, 2015, the aggregate notional amount of the related hedged items totaled $43.5 million and $61.2 million, respectively, with fair value amounts of $3.2 million and $689,000, respectively.

The Company applies hedge accounting in accordance with ASC 815, Derivatives and Hedging, and the fair value hedge and the underlying hedged item, attributable to the risk being hedged, are recorded at fair value with unrealized gains and losses being recorded in the Company’s Consolidated Statements of Income. Statistical regression analysis is used to assess hedge effectiveness, both at inception of the hedging relationship and on an ongoing basis. The regression analysis involves regressing the periodic change in fair value of the hedging instrument against the periodic changes in fair value of the asset being hedged due to changes in the hedged risk. The Company’s fair value hedges continue to be highly effective and had no material impact on the Consolidated Statements of Income, but if any ineffectiveness exists, portions of the unrealized gains or losses would be recorded in interest income or interest expense in the Company’s Consolidated Statements of Income.

Loan Swaps

During the normal course of business, the Company enters into interest rate swap loan relationships (“loan swaps”) with borrowers to meet their financing needs. Upon entering into the loan swaps, the Company enters into offsetting positions with a third party in order to minimize interest rate risk. These back-to-back loan swaps qualify as financial derivatives, and the fair values are reported in “Other Assets” and “Other Liabilities” within the Company’s Consolidated Balance Sheets.

Interest Rate Lock Commitments

During the normal course of business, the Company enters into commitments to originate mortgage loans whereby the interest rate on the loan is determined prior to funding (“rate lock commitments”).  Rate lock commitments on mortgage loans that are intended to be sold in the secondary market are considered to be derivatives.  The period of time between issuance of a loan commitment, closing, and sale of the loan generally ranges from 30 to 120 days.  The Company protects itself from changes in

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interest rates through the use of best efforts forward delivery commitments, whereby the Company commits to sell a loan at the time the borrower commits to an interest rate with the intent that the buyer has assumed interest rate risk on the loan.  The correlation between the rate lock commitments and the best efforts contracts is high due to their similarity.

The market values of rate lock commitments and best efforts forward delivery commitments is not readily ascertainable with precision because rate lock commitments and best efforts contracts are not actively traded in stand-alone markets. The Company determines the fair value of rate lock commitments and best efforts contracts by measuring the change in the value of the underlying asset, while taking into consideration the probability that the rate lock commitments will close. The fair value of the rate lock commitments is reported as a component of “Other Assets” in the Company’s Consolidated Balance Sheets; the fair value of the Company’s best efforts forward delivery commitments is recorded as a component of “Other Liabilities” in the Company’s Consolidated Balance Sheets. Any impact to income is recorded in current period earnings as a component of “Mortgage banking income, net” in the Company’s Consolidated Statements of Income.

The following table summarizes key elements of the Company’s derivative instruments as of September 30, 2016 and December 31, 2015, segregated by derivatives that are considered accounting hedges and those that are not (dollars in thousands):

	September 30, 2016									December 31, 2015
			Derivative (2)									Derivative (2)
	Notional or Contractual Amount (1)			Assets		Liabilities		Collateral Pledged (3)		Notional or Contractual Amount (1)			Assets		Liabilities		Collateral Pledged (3)
Derivatives designated as accounting hedges:
Interest rate contracts:
Cash flow hedges	$	188,500		$	343	$	16,087	$	22,071	$	263,000		$	946	$	10,352	$	14,449
Fair value hedges	43,455			—		3,529		—		61,150			—		888		—
Derivatives not designated as accounting hedges:
Loan Swaps (4)
Pay fixed - receive floating interest rate swaps	280,336			12,218		—		—		138,969			3,758		—		—
Pay floating - receive fixed interest rate swaps	280,336			—		12,218		16,141		138,969			—		3,758		5,983
Other contracts:
Interest rate lock commitments	76,070			1,422		—		—		50,369			701		—		—

(1) Notional amounts are not recorded on the balance sheet and are generally used only as a basis on which interest and other payments are determined.

(2) Balancesrepresent fair value of derivative financial instruments.

(3) Collateral pledged is comprised of both cash and securities.

(4) Prior period reflects reclassifications to conform to the current presentation.

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8. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The change in accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2016 is summarized as follows, net of tax (dollars in thousands):

	Unrealized Gains (Losses) on AFS Securities		Unrealized Gain for AFS Securities Transferred to HTM			Change in Fair Value of Cash Flow Hedge			Total
Balance - June 30, 2016	$	14,412	$	3,853		$	(9,366	)	$	8,899
Other comprehensive income (loss)	1,121		(237		)	(78		)	806
Amounts reclassified from accumulated other comprehensive income	—		—			154			154
Net current period other comprehensive income (loss)	1,121		(237		)	76			960
Balance - September 30, 2016	$	15,533	$	3,616		$	(9,290	)	$	9,859

	Unrealized Gains (Losses) on AFS Securities			Unrealized Gain for AFS Securities Transferred to HTM			Change in Fair Value of Cash Flow Hedge			Total
Balance - December 31, 2015	$	7,777		$	4,432		$	(5,957	)	$	6,252
Other comprehensive income (loss)	7,851			(816		)	(3,766		)	3,269
Amounts reclassified from accumulated other comprehensive income	(95		)	—			433			338
Net current period other comprehensive income (loss)	7,756			(816		)	(3,333		)	3,607
Balance - September 30, 2016	$	15,533		$	3,616		$	(9,290	)	$	9,859

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The change in accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2015 is summarized as follows, net of tax (dollars in thousands):

	Unrealized Gains (Losses) on AFS Securities		Unrealized Gain for AFS Securities Transferred to HTM			Change in Fair Value of Cash Flow Hedge			Total
Balance - June 30, 2015	$	8,738	$	5,043		$	(4,552	)	$	9,229
Other comprehensive income (loss)	1,250		(308		)	(2,328		)	(1,386		)
Amounts reclassified from accumulated other comprehensive income	146		—			157			303
Net current period other comprehensive income (loss)	1,396		(308		)	(2,171		)	(1,083		)
Balance - September 30, 2015	$	10,134	$	4,735		$	(6,723	)	$	8,146

	Unrealized Gains (Losses) on AFS Securities			Unrealized Gain for AFS Securities Transferred to HTM			Change in Fair Value of Cash Flow Hedge			Total
Balance - December 31, 2014	$	17,439		$	—		$	(5,184	)	$	12,255
Unrealized gain transferred from AFS to HTM	(5,251		)	5,251			—			—
Other comprehensive income (loss)	(1,812		)	(516		)	(2,009		)	(4,337		)
Amounts reclassified from accumulated other comprehensive income	(242		)	—			470			228
Net current period other comprehensive income (loss)	(2,054		)	(516		)	(1,539		)	(4,109		)
Balance - September 30, 2015	$	10,134		$	4,735		$	(6,723	)	$	8,146

Reclassifications of unrealized gains (losses) on available for sale securities are reported in the Company’s Consolidated Statements of Income as “Gains on securities transactions, net” with the corresponding income tax effect being reflected as a component of income tax expense. The Company reported gains of $0 and $145,000 for the three and nine months ended September 30, 2016 and $75,000 and $672,000 for the three and nine months ended September 30, 2015, related to the sale of securities. The Company recorded $300,000 in OTTI in the third quarter of 2015 on a municipal security in the available for sale portfolio. The tax effects of the gains on sales of securities transaction, net of OTTI recorded, were $0 and $51,000 during the three and nine months ended September 30, 2016 and $79,000 and $130,000 during the three and nine months ended September 30, 2015, which amounts were included as a component of income tax expense.

Reclassifications of the change in fair value of cash flow hedges are reported in interest income and interest expense in the Company’s Consolidated Statements of Income with the corresponding income tax effect being reflected as a component of income tax expense. The Company reported net interest expense of $237,000 and $666,000 for the three and nine months ended September 30, 2016 and $241,000 and $723,000 for the three and nine months ended September 30, 2015. The tax effects of these transactions were $83,000 and $233,000 during the three and nine months ended September 30, 2016 and $84,000 and $253,000 during the three and nine months ended September 30, 2015, which were included as a component of income tax expense.

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9. FAIR VALUE MEASUREMENTS

The Company follows ASC 820, Fair Value Measurements and Disclosures, to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. This codification clarifies that fair value of certain assets and liabilities is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between willing market participants.

ASC 820 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. The three levels of the fair value hierarchy under ASC 820 based on these two types of inputs are as follows:

Level 1	Valuation is based on quoted prices in active markets for identical assets and liabilities.
Level 2	Valuation is based on observable inputs including quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets and liabilities in less active markets, and model-based valuation techniques for which significant assumptions can be derived primarily from or corroborated by observable data in the markets.
Level 3	Valuation is based on model-based techniques that use one or more significant inputs or assumptions that are unobservable in the market.  These unobservable inputs reflect the Company’s assumptions about what market participants would use and information that is reasonably available under the circumstances without undue cost and effort.

The following describes the valuation techniques used by the Company to measure certain financial assets and liabilities recorded at fair value on a recurring basis in the financial statements.

Derivative instruments

As discussed in Note 7 “Derivatives”, the Company records derivative instruments at fair value on a recurring basis. The Company utilizes derivative instruments as part of the management of interest rate risk to modify the re-pricing characteristics of certain portions of the Company’s interest-bearing assets and liabilities. The Company has contracted with a third party vendor to provide valuations for derivatives using standard valuation techniques and therefore classifies such valuations as Level 2. Third party valuations are validated by the Company using Bloomberg Valuation Service’s derivative pricing functions. The Company has considered counterparty credit risk in the valuation of its derivative assets and has considered its own credit risk in the valuation of its derivative liabilities.

During the ordinary course of business, the Company enters into interest rate lock commitments related to the origination of mortgage loans held for sale as well as best effort forward delivery commitments to mitigate interest rate risk; these instruments are recorded at estimated fair value based on the value of the underlying loan, which in turn is based on quoted prices for similar loans in the secondary market. However, this value is adjusted by a pull-through rate which considers the likelihood that the loan in a lock position will ultimately close. The pull-through rate is derived from the Company’s internal data and is adjusted using significant management judgment. The pull-through rate is largely dependent on the loan processing stage that a loan is currently in and the change in prevailing interest rates from the time of the rate lock. As such, interest rate lock commitments are classified as Level 3. An increase in the pull-through rate utilized in the fair value measurement of the interest rate lock commitment derivative will result in positive fair value adjustments while a decrease in the pull-through rate will result in a negative fair value adjustment. The Company’s weighted average pull-through rate was approximately 80% as of September 30, 2016 and December 31, 2015. As of September 30, 2016, the interest rate lock commitments are recorded as a component of “Other Assets” on the Company’s Consolidated Balance Sheets.

Securities available for sale

Securities available for sale are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted market prices, when available (Level 1). If quoted market prices are not available, fair values are measured utilizing independent valuation techniques of identical or similar securities for which significant assumptions are derived primarily from or corroborated by observable market data (Level 2). If the inputs used to provide the evaluation for certain securities are unobservable and/or there is little, if any, market activity, then the security would fall to the lowest level of the hierarchy (Level 3).

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The Company’s investment portfolio is primarily valued using fair value measurements that are considered to be Level 2. The Company has contracted with a third party portfolio accounting service vendor for valuation of its securities portfolio. The vendor’s primary source for security valuation is Interactive Data Corporation (“IDC”), which evaluates securities based on market data. IDC utilizes evaluated pricing models that vary by asset class and include available trade, bid, and other market information. Generally, the methodology includes broker quotes, proprietary models, vast descriptive terms and conditions databases, as well as extensive quality control programs.

The vendor utilizes proprietary valuation matrices for valuing all municipals securities. The initial curves for determining the price, movement, and yield relationships within the municipal matrices are derived from industry benchmark curves or sourced from a municipal trading desk. The securities are further broken down according to issuer, credit support, state of issuance, and rating to incorporate additional spreads to the industry benchmark curves.

The Company primarily uses Bloomberg Valuation Service, an independent information source that draws on quantitative models and market data contributed from over 4,000 market participants, to validate third party valuations. Any material differences between valuation sources are researched by further analyzing the various inputs that are utilized by each pricing source. No material differences were identified during the validation as of September 30, 2016 and December 31, 2015.

The carrying value of restricted Federal Reserve Bank and FHLB stock approximates fair value based on the redemption provisions of each entity and is therefore excluded from the following table.

Loans held for sale

Loans held for sale are carried at fair value. These loans currently consist of residential loans originated for sale in the secondary market. Fair value is based on the price secondary markets are currently offering for similar loans using observable market data which is not materially different than cost due to the short duration between origination and sale (Level 2). Gains and losses on the sale of loans are recorded within the mortgage segment and are reported on a separate line item in the Company’s Consolidated Statements of Income.

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The following table presents the balances of financial assets and liabilities measured at fair value on a recurring basis at September 30, 2016 and December 31, 2015 (dollars in thousands):

	Fair Value Measurements at September 30, 2016 using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Level 1		Level 2		Level 3		Balance
ASSETS
Securities available for sale:
Obligations of states and political subdivisions	$	—	$	279,223	$	—	$	279,223
Corporate and other bonds	—		121,747		—		121,747
Mortgage-backed securities	—		540,596		—		540,596
Other securities	—		13,418		—		13,418
Loans held for sale	—		46,814		—		46,814
Derivatives:
Interest rate swap	—		12,218		—		12,218
Cash flow hedges	—		343		—		343
Interest rate lock commitments	—		—		1,422		1,422
LIABILITIES
Derivatives:
Interest rate swap	$	—	$	12,218	$	—	$	12,218
Cash flow hedges	—		16,087		—		16,087
Fair value hedges	—		3,529		—		3,529

	Fair Value Measurements at December 31, 2015 using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Level 1		Level 2		Level 3		Balance
ASSETS
Securities available for sale:
Obligations of states and political subdivisions	$	—	$	268,079	$	—	$	268,079
Corporate and other bonds	—		75,979		—		75,979
Mortgage-backed securities	—		548,171		—		548,171
Other securities	—		11,063		—		11,063
Loans held for sale	—		36,030		—		36,030
Derivatives:
Interest rate swap	—		3,758		—		3,758
Cash flow hedges	—		946		—		946
Interest rate lock commitments	—		—		701		701
LIABILITIES
Derivatives:
Interest rate swap	$	—	$	3,758	$	—	$	3,758
Cash flow hedges	—		10,352		—		10,352
Fair value hedges	—		888		—		888

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Certain assets are measured at fair value on a nonrecurring basis in accordance with U.S. GAAP. Adjustments to the fair value of these assets usually result from the application of lower-of-cost-or-market accounting or write-downs of individual assets.

The following describes the valuation techniques used by the Company to measure certain assets recorded at fair value on a nonrecurring basis in the financial statements.

Impaired loans

Loans are designated as impaired when, in the judgment of management based on current information and events, it is probable that all amounts due according to the contractual terms of the loan agreements will not be collected. The measurement of loss associated with impaired loans can be based on either the observable market price of the loan or the fair value of the collateral. Collateral dependent loans are reported at the fair value of the underlying collateral if repayment is solely from the underlying value of the collateral. Collateral may be in the form of real estate or business assets including equipment, inventory, and accounts receivable. The vast majority of the Company’s collateral is real estate. The value of real estate collateral is determined utilizing an income or market valuation approach based on an appraisal conducted by an independent, licensed appraiser using observable market data. When evaluating the fair value, management may discount the appraisal further if, based on their understanding of the market conditions, it is determined the collateral is further impaired below the appraised value (Level 3). For the periods ending September 30, 2016 and December 31, 2015, the Level 3 weighted averages related to impaired loans were 12.4% and 7.0%, respectively. The value of business equipment is based upon an outside appraisal, of one year or less, if deemed significant, or the net book value on the applicable business’s financial statements if not considered significant using observable market data. Likewise, values for inventory and accounts receivables collateral are based on financial statement balances or aging reports (Level 3). Collateral dependent impaired loans allocated to the allowance for loan losses are measured at fair value on a nonrecurring basis. Any fair value adjustments are recorded in the period incurred as provision for loan losses on the Company’s Consolidated Statements of Income.

Other real estate owned

OREO is evaluated for impairment at least quarterly by the Bank’s Special Asset Loan Committee and any necessary write downs to fair values are recorded as impairment and included as a component of noninterest expense. Fair values of OREO are carried at fair value less selling costs. Fair value is based upon independent market prices, appraised values of the collateral, or management’s estimation of the value of the collateral. When an appraised value is not available or management determines the fair value of the collateral is further impaired below the appraised value and there is no observable market price, the Company records the foreclosed asset as Level 3 valuation. For the nine and twelve month periods ending September 30, 2016 and December 31, 2015, the Level 3 weighted averages related to OREO were approximately 24.7% and 32.0%, respectively.

Total valuation expenses related to OREO properties for the three and nine months ended September 30, 2016 and 2015 totaled $479,000 and $879,000 and $473,000 and $1.8 million, respectively.

-37-

The following tables summarize the Company’s financial assets that were measured at fair value on a nonrecurring basis at September 30, 2016 and December 31, 2015 (dollars in thousands):

	Fair Value Measurements at September 30, 2016 using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Level 1		Level 2		Level 3		Balance
ASSETS
Impaired loans	$	—	$	—	$	2,573	$	2,573
Other real estate owned	—		—		10,581		10,581

	Fair Value Measurements at December 31, 2015 using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Level 1		Level 2		Level 3		Balance
ASSETS
Impaired loans	$	—	$	—	$	2,214	$	2,214
Other real estate owned	—		—		15,299		15,299

ASC 825, Financial Instruments, requires disclosure about fair value of financial instruments for interim periods and excludes certain financial instruments and all non-financial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company.

Cash and cash equivalents

For those short-term instruments, the carrying amount is a reasonable estimate of fair value.

Held to Maturity Securities

The Company’s investment portfolio is primarily valued using fair value measurements that are considered to be Level 2. The Company has contracted with a third party portfolio accounting service vendor for valuation of its securities portfolio. The vendor’s primary source for security valuation is IDC, which evaluates securities based on market data. IDC utilizes evaluated pricing models that vary by asset class and include available trade, bid, and other market information. Generally, the methodology includes broker quotes, proprietary models, vast descriptive terms and conditions databases, as well as extensive quality control programs.

The vendor utilizes proprietary valuation matrices for valuing all municipals securities. The initial curves for determining the price, movement, and yield relationships within the municipal matrices are derived from industry benchmark curves or sourced from a municipal trading desk. The securities are further broken down according to issuer, credit support, state of issuance, and rating to incorporate additional spreads to the industry benchmark curves.

The Company primarily uses Bloomberg Valuation Service, an independent information source that draws on quantitative models and market data contributed from over 4,000 market participants, to validate third party valuations. Any material differences between valuation sources are researched by further analyzing the various inputs that are utilized by each pricing source. No material differences were identified during the validation as of September 30, 2016 and December 31, 2015.

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Loans

The fair value of performing loans is estimated by discounting expected future cash flows using a yield curve that is constructed by adding a loan spread to a market yield curve. Loan spreads are based on spreads currently observed in the market for loans of similar type and structure. Fair value for impaired loans and their respective level within the fair value hierarchy, are described in the previous disclosure related to fair value measurements of assets that are measured on a nonrecurring basis.

Bank owned life insurance

The carrying value of bank owned life insurance approximates fair value. The Company records these policies at their cash surrender value, which is estimated using information provided by insurance carriers.

Deposits

The fair value of demand deposits, savings accounts, and certain money market deposits is the amount payable on demand at the reporting date. The fair value of certificates of deposit is estimated by discounting the future cash flows using the rates currently offered for deposits of similar remaining maturities.

Borrowings

The carrying value of the Company’s repurchase agreements is a reasonable estimate of fair value. Other borrowings are discounted using the current yield curve for the same type of borrowing. For borrowings with embedded optionality, a third party source is used to value the instrument. The Company validates all third party valuations for borrowings with optionality using Bloomberg’s derivative pricing functions.

Accrued interest

The carrying amounts of accrued interest approximate fair value.

-39-

The carrying values and estimated fair values of the Company’s financial instruments at September 30, 2016 and December 31, 2015 are as follows (dollars in thousands):

			Fair Value Measurements at September 30, 2016 using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs		Total Fair Value
	Carrying Value		Level 1		Level 2		Level 3		Balance
ASSETS
Cash and cash equivalents	$	156,175	$	156,175	$	—	$	—	$	156,175
Securities available for sale	954,984		—		954,984		—		954,984
Held to maturity securities	200,839		—		209,717		—		209,717
Restricted stock	63,204		—		63,204		—		63,204
Loans held for sale	46,814		—		46,814		—		46,814
Net loans	6,112,376		—		—		6,144,971		6,144,971
Derivatives:
Interest rate lock commitments	1,422		—		—		1,422		1,422
Interest rate swap	12,218		—		12,218		—		12,218
Cash flow hedges	343		—		343		—		343
Accrued interest receivable	22,084		—		22,084		—		22,084
Bank owned life insurance	177,847		—		177,847		—		177,847
LIABILITIES
Deposits	$	6,258,506	$	—	$	6,258,166	$	—	$	6,258,166
Borrowings	925,627		—		905,653		—		905,653
Accrued interest payable	1,581		—		1,581		—		1,581
Derivatives:
Interest rate swap	12,218		—		12,218		—		12,218
Cash flow hedges	16,087		—		16,087		—		16,087
Fair value hedges	3,529		—		3,529		—		3,529

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			Fair Value Measurements at December 31, 2015 using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs		Total Fair Value
	Carrying Value		Level 1		Level 2		Level 3		Balance
ASSETS
Cash and cash equivalents	$	142,660	$	142,660	$	—	$	—	$	142,660
Securities available for sale	903,292		—		903,292		—		903,292
Held to maturity securities	205,374		—		209,437		—		209,437
Restricted stock	51,828		—		51,828		—		51,828
Loans held for sale	36,030		—		36,030		—		36,030
Net loans	5,637,415		—		—		5,671,155		5,671,155
Derivatives:
Interest rate lock commitments	701		—		—		701		701
Interest rate swap	3,758		—		3,758		—		3,758
Cash flow hedges	946		—		946		—		946
Accrued interest receivable	20,760		—		20,760		—		20,760
Bank owned life insurance	173,687		—		173,687		—		173,687
LIABILITIES
Deposits	$	5,963,936	$	—	$	5,957,484	$	—	$	5,957,484
Borrowings	680,175		—		659,364		—		659,364
Accrued interest payable	1,578		—		1,578		—		1,578
Derivatives:
Interest rate swap	3,758		—		3,758		—		3,758
Cash flow hedges	10,352		—		10,352		—		10,352
Fair value hedges	888		—		888		—		888

The Company assumes interest rate risk (the risk that general interest rate levels will change) as a result of its normal operations. As a result, the fair values of the Company’s financial instruments will change when interest rate levels change and that change may be either favorable or unfavorable to the Company. Management attempts to match maturities of assets and liabilities to the extent believed necessary to minimize interest rate risk. However, borrowers with fixed rate obligations are less likely to prepay in a rising rate environment and more likely to prepay in a falling rate environment. Conversely, depositors who are receiving fixed rates are more likely to withdraw funds before maturity in a rising rate environment and less likely to do so in a falling rate environment. Management monitors rates and maturities of assets and liabilities and attempts to minimize interest rate risk by adjusting terms of new loans and deposits and by investing in securities with terms that mitigate the Company’s overall interest rate risk.

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10. EARNINGS PER SHARE

Basic EPS is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted EPS is computed using the weighted average number of common shares outstanding during the period, including the effect of dilutive potential common shares outstanding attributable to stock awards.

There were approximately 118 and 51,179 shares underlying anti-dilutive awards for the three months ended September 30, 2016 and 2015, respectively, and there were approximately 579 and 54,475 shares underlying anti-dilutive awards for the nine months ended September 30, 2016 and 2015, respectively. Anti-dilutive awards were excluded from the calculation of diluted EPS.

The following is a reconciliation of the denominators of the basic and diluted EPS computations for the three and nine months ended September 30, 2016 and 2015 (in thousands except per share data):

	Net Income Available to Common Shareholders (Numerator)		Weighted Average Common Shares (Denominator)	Per Share Amount
Three months ended September 30, 2016
Net income, basic	$	20,401	43,566	$	0.47
Add: potentially dilutive common shares - stock awards	—		189	—
Diluted	$	20,401	43,755	$	0.47
Three months ended September 30, 2015
Net income, basic	$	18,216	45,087	$	0.40
Add: potentially dilutive common shares - stock awards	—		84	—
Diluted	$	18,216	45,171	$	0.40
Nine months ended September 30, 2016
Net income, basic	$	56,699	43,854	$	1.29
Add: potentially dilutive common shares - stock awards	—		114	—
Diluted	$	56,699	43,968	$	1.29
Nine months ended September 30, 2015
Net income, basic	$	49,264	45,107	$	1.09
Add: potentially dilutive common shares - stock awards	—		82	—
Diluted	$	49,264	45,189	$	1.09

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11. SEGMENT REPORTING DISCLOSURES

The Company has two reportable segments: a traditional full service community bank segment and a mortgage loan origination business segment. The community bank segment includes one subsidiary bank, the Bank, which provides loan, deposit, investment, and trust services to retail and commercial customers throughout its 115 retail locations in Virginia as of September 30, 2016. The mortgage segment includes UMG, which provides a variety of mortgage loan products principally in Virginia, North Carolina, Maryland, and the Washington D.C. metro area. These loans are originated and sold primarily in the secondary market through purchase commitments from investors, which serves to mitigate the Company’s exposure to interest rate risk.

Profit and loss is measured by net income after taxes including realized gains and losses on the Company’s investment portfolio. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies. Inter-segment transactions are recorded at cost and eliminated as part of the consolidation process.

Both of the Company’s reportable segments are service-based. The mortgage business is a primarily fee-based business, while the Bank is driven principally by net interest income. The bank segment provides a distribution and referral network through its customers for the mortgage loan origination business. The mortgage segment offers a more limited referral network for the bank segment.

The community bank segment provides the mortgage segment with the short-term funds needed to originate mortgage loans through a warehouse line of credit and charges the mortgage banking segment interest. The interest rate on the warehouse line of credit for each of the three and nine months ended September 30, 2016 and 2015 was the three month LIBOR rate plus 0.15% with no floor. These transactions are eliminated in the consolidation process.

During 2015, the mortgage segment began originating loans with the intent that they be held for investment purposes. The community bank segment provides the mortgage segment with the long-term funds needed to originate these loans through a long-term funding facility and charges the mortgage segment interest. The interest charged is determined by the community bank segment based on the cost of funds available to the community bank segment for similar durations of the loans being funded by the mortgage segment.

A management fee for operations and administrative support services is charged to all subsidiaries and eliminated in the consolidated totals.

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Information about reportable segments and reconciliation of such information to the consolidated financial statements for each of the three and nine months ended September 30, 2016 and 2015 is as follows (dollars in thousands):

UNION BANKSHARES CORPORATION AND SUBSIDIARIES

SEGMENT FINANCIAL INFORMATION

	Community Bank		Mortgage			Eliminations			Consolidated
Three Months Ended September 30, 2016
Net interest income	$	66,605	$	423		$	—		$	67,028
Provision for credit losses	2,455		17			—			2,472
Net interest income after provision for credit losses	64,150		406			—			64,556
Noninterest income	15,589		3,501			(140		)	18,950
Noninterest expenses	54,353		2,700			(140		)	56,913
Income before income taxes	25,386		1,207			—			26,593
Income tax expense	5,770		422			—			6,192
Net income	$	19,616	$	785		$	—		$	20,401
Total assets	$	8,251,351	$	90,692		$	(83,813	)	$	8,258,230
Three Months Ended September 30, 2015
Net interest income	$	63,075	$	369		$	—		$	63,444
Provision for credit losses	2,000		62			—			2,062
Net interest income after provision for credit losses	61,075		307			—			61,382
Noninterest income	14,287		2,608			(170		)	16,725
Noninterest expenses	50,674		2,821			(170		)	53,325
Income before income taxes	24,688		94			—			24,782
Income tax expense	6,531		35			—			6,566
Net income	$	18,157	$	59		$	—		$	18,216
Total assets	$	7,588,606	$	62,127		$	(56,420	)	$	7,594,313
Nine Months Ended September 30, 2016
Net interest income	$	195,508	$	1,027		$	—		$	196,535
Provision for credit losses	7,215		161			—			7,376
Net interest income after provision for credit losses	188,293		866			—			189,159
Noninterest income	44,137		9,185			(465		)	52,857
Noninterest expenses	158,964		7,937			(465		)	166,436
Income before income taxes	73,466		2,114			—			75,580
Income tax expense	18,145		736			—			18,881
Net income	$	55,321	$	1,378		$	—		$	56,699
Total assets	$	8,251,351	$	90,692		$	(83,813	)	$	8,258,230
Nine Months Ended September 30, 2015
Net interest income	$	188,240	$	989		$	—		$	189,229
Provision for credit losses	7,450		111			—			7,561
Net interest income after provision for credit losses	180,790		878			—			181,668
Noninterest income	40,658		7,844			(512		)	47,990
Noninterest expenses	154,011		8,906			(512		)	162,405
Income (loss) before income taxes	67,437		(184		)	—			67,253
Income tax expense (benefit)	18,060		(71		)	—			17,989
Net income (loss)	$	49,377	$	(113	)	$	—		$	49,264
Total assets	$	7,588,606	$	62,127		$	(56,420	)	$	7,594,313

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Review Report of Independent Registered Public Accounting Firm

The Stockholders and Board of Directors of Union Bankshares Corporation

We have reviewed the consolidated balance sheet of Union Bankshares Corporation (the “Company”) as of September 30, 2016, and the related consolidated statements of income and comprehensive income for the three and nine-month periods ended September 30, 2016 and 2015, and the consolidated statements of changes in stockholders’ equity and cash flows for the nine-month periods ended September 30, 2016 and 2015. These financial statements are the responsibility of the Company's management.

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

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

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of the Company as of December 31, 2015, and the related consolidated statements of income, comprehensive income, changes in stockholders' equity, and cash flows for the year then ended, not presented herein, and we expressed an unqualified audit opinion on those consolidated financial statements in our report dated February 25, 2016. In our opinion, the accompanying consolidated balance sheet of the Company as of December 31, 2015, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

/s/ Ernst & Young LLP

Richmond, Virginia

November 3, 2016

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

Management’s discussion and analysis is presented to aid the reader in understanding and evaluating the financial condition and results of operations of Union Bankshares Corporation and its subsidiaries (collectively, the “Company”). This discussion and analysis should be read with the consolidated financial statements, the notes to the financial statements, and the other financial data included in this report, as well as the Company’s Annual Report on Form 10-K and management’s discussion and analysis for the year ended December 31, 2015. Highlighted in the discussion are material changes from prior reporting periods and any identifiable trends affecting the Company. Results of operations for the three and nine months ended September 30, 2016 and 2015 are not necessarily indicative of results that may be attained for any other period. Amounts are rounded for presentation purposes while some of the percentages presented are computed based on unrounded amounts.

FORWARD-LOOKING STATEMENTS

Certain statements in this report may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements are statements that include projections, predictions, expectations, or beliefs about future events or results or otherwise are not statements of historical fact.  Such statements are often characterized by the use of qualified words (and their derivatives) such as “expect,” “believe,” “estimate,” “plan,” “project,” “anticipate,” “intend,” “will,” or words of similar meaning or other statements concerning opinions or judgment of the Company and its management about future events.  Although the Company believes that its expectations with respect to forward-looking statements are based upon reasonable assumptions within the bounds of its existing knowledge of its business and operations, there can be no assurance that actual results, performance, or achievements of the Company will not differ materially from any projected future results, performance, or achievements expressed or implied by such forward-looking statements.  Actual future results and trends may differ materially from historical results or those anticipated depending on a variety of factors, including, but not limited to, the effects of and changes in: general economic and bank industry conditions, the interest rate environment, legislative and regulatory requirements, competitive pressures, new products and delivery systems, inflation, stock and bond markets, accounting standards or interpretations of existing standards, mergers and acquisitions, technology, information security, and consumer spending and savings habits. More information is available on the Company’s website, http://investors.bankatunion.com and on the Securities and Exchange Commission’s website, www.sec.gov. The information on the Company’s website is not a part of this Form 10-Q. The Company does not intend or assume any obligation to update or revise any forward-looking statements that may be made from time to time by or on behalf of the Company.

CRITICAL ACCOUNTING POLICIES

The accounting and reporting policies of the Company are in accordance with U.S. GAAP and conform to general practices within the banking industry. The Company’s financial position and results of operations are affected by management’s application of accounting policies, including estimates, assumptions, and judgments made to arrive at the carrying value of assets and liabilities and amounts reported for revenues, expenses, and related disclosures. Different assumptions in the application of these policies could result in material changes in the Company’s consolidated financial position and/or results of operations. The Company evaluates its critical accounting estimates and assumptions on an ongoing basis and updates them, as needed. Management has discussed the Company’s critical accounting policies and estimates with the Audit Committee of the Board of Directors.

The critical accounting and reporting policies include the Company’s accounting for the allowance for loan losses, acquired loans, and goodwill and intangible assets. The Company’s accounting policies are fundamental to understanding the Company’s consolidated financial position and consolidated results of operations. Accordingly, the Company’s significant accounting policies are discussed in detail in Note 1 “Summary of Significant Accounting Policies” in the “Notes to the Consolidated Financial Statements” contained in Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.

The Company provides additional information on its critical accounting policies and estimates listed above under “MD&A—Critical Accounting Policies” in its 2015 Form 10-K.

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ABOUT UNION BANKSHARES CORPORATION

Headquartered in Richmond, Union Bankshares Corporation is the largest community banking organization headquartered in Virginia and operates in all major banking markets of the Commonwealth. Union Bankshares Corporation is the holding company for Union Bank & Trust, which provides banking, trust, and wealth management services and has a statewide presence of 115 bank branches and approximately 193 ATMs. Non-bank affiliates of the holding company include: Union Mortgage Group, Inc., which provides a full line of mortgage products; Union Insurance Group, LLC, which offers various lines of insurance products; and Old Dominion Capital Management, Inc., which provides investment advisory services.

Shares of the Company’s common stock are traded on the NASDAQ Global Select Market under the symbol UBSH. Additional information is available on the Company’s website at http://investors.bankatunion.com. The information contained on the Company’s website is not a part of or incorporated into this report.

RESULTS OF OPERATIONS

Executive Overview

For the quarter ended September 30, 2016, the Company reported net income of $20.4 million and earnings per share of $0.47. These results represent an increase of $2.2 million, or 12.0%, from $18.2 million in earnings from the third quarter of 2015. Earnings per share of $0.47 for the current quarter represent an increase of $0.07, or 17.5%, in earnings per share from the third quarter of 2015. This increase is primarily attributable to increases in net interest income, driven by increased loan production and higher average loan balances, and higher overall noninterest income.

For the nine months ended September 30, 2016, the Company reported net income of $56.7 million and earnings per share of $1.29. These results represent an increase of $7.4 million, or 15.1%, from $49.3 million in earnings from the first nine months of 2015. Earnings per share of $1.29 for the current nine-month period represent an increase of $0.20, or 18.3%, in earnings per share from the first nine months of 2015. This increase is primarily attributable to increases in net interest income, driven by increased loan production and higher average loan balances, and higher overall noninterest income.

• Net income for the third quarter of 2016 for the community bank segment was $19.6 million, or $0.45 per share, compared to $18.2 million, or $0.40 per share, in the third quarter of 2015. Net income for the community bank segment for the nine months ended September 30, 2016 was $55.3 million, or $1.26 per share, compared to $49.4 million, or $1.09 per share, for the nine months ended September 30, 2015.

• The mortgage segment reported net income of $785,000 for the third quarter of 2016, an improvement of $726,000 from $59,000 in the third quarter of 2015. The mortgage segment had net income of $1.4 million in the first nine months of 2016, an improvement of $1.5 million from a loss of $113,000 in the first nine months of 2015. The improvement was largely a result of higher gain on sale margins and cost control initiatives in personnel costs.

• ROA was 1.00% for the quarter ended September 30, 2016 compared to 0.96% for the third quarter of 2015; ROA was 0.95% for the nine months ended September 30, 2016 compared to 0.88% for first nine months of 2015.

• ROTCE was 12.00% for the quarter ended September 30, 2016 compared to 10.70% for the third quarter of 2015; ROTCE was 11.25% for the nine months ended September 30, 2016 compared to 9.86% for first nine months of 2015.

• During the third quarter of 2016, the Company closed five in-store branches as part of its continuing efforts to become more efficient. The Company incurred approximately $400,000 in related branch closure costs.

• Loans held for investment grew $605.3 million, or 10.9%, from September 30, 2015 to $6.1 billion at September 30, 2016, while average loan balances increased $508.6 million, or 9.2%, from the same quarter in the prior year. Period end loan balances grew $477.5 million, or 11.2% (annualized), from December 31, 2015.

• Deposits grew $439.7 million, or 7.6%, from September 30, 2015 to $6.3 billion at September 30, 2016, while average deposit balances increased $390.8 million, or 6.7%, from the same quarter in the prior year. Period end deposit balances increased $294.6 million, or 6.6% (annualized), from December 31, 2015.

• Asset quality continued to improve as nonperforming assets and past due loan levels continued to decline.

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Net Interest Income

	For the Three Months Ended September 30,
	2016			2015			Change
	(Dollars in thousands)
Average interest-earning assets	$	7,354,684		$	6,751,654		$	603,030
Interest income (FTE)	$	76,860		$	72,287		$	4,573
Yield on interest-earning assets	4.16		%	4.25		%	(9		)	bps
Core yield on interest-earning assets (1)	4.09		%	4.17		%	(8		)	bps
Average interest-bearing liabilities	$	5,681,102		$	5,162,928		$	518,174
Interest expense	$	7,405		$	6,556		$	849
Cost of interest-bearing liabilities	0.52		%	0.50		%	2			bps
Core cost of interest-bearing liabilities (1)	0.53		%	0.52		%	1			bps
Cost of funds	0.40		%	0.39		%	1			bps
Core cost of funds (1)	0.42		%	0.40		%	2			bps
Net Interest Income (FTE)	$	69,455		$	65,731		$	3,724
Net Interest Margin (FTE)	3.76		%	3.86		%	(10		)	bps
Core Net Interest Margin (FTE) (1)	3.67		%	3.77		%	(10		)	bps

 (1) Core metrics exclude the impact of acquisition accounting accretion and amortization adjustments in net interest income.

For the third quarter of 2016, tax-equivalent net interest income was $69.5 million, an increase of $3.7 million from the third quarter of 2015, primarily driven by higher average loan balances. Net accretion related to acquisition accounting decreased $86,000 from the third quarter of 2015 to $1.5 million in the third quarter of 2016. The third quarter 2016 tax-equivalent net interest margin decreased by 10 basis points to 3.76% compared to 3.86% in the comparable quarter in the prior year. Core tax-equivalent net interest margin (which excludes the 9 basis point impact of acquisition accounting accretion in the both third quarter of 2016 and the third quarter of 2015) decreased by 10 basis points to 3.67% in the third quarter of 2016 from 3.77% in the third quarter of 2015. The decrease in core tax-equivalent net interest margin was driven by the 8 basis point decline in interest-earning asset yields and the 2 basis point increase in cost of funds. The decline in interest-earning asset yields was primarily driven by lower loan yields, as new and renewed loans were originated and re-priced at lower rates, as well as lower levels of fees on loans.

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	For the Nine Months Ended September 30,
	2016			2015			Change
	(Dollars in thousands)
Average interest-earning assets	$	7,159,813		$	6,668,812		$	491,001
Interest income (FTE)	$	225,331		$	214,195		$	11,136
Yield on interest-earning assets	4.20		%	4.29		%	(9		)	bps
Core yield on interest-earning assets (1)	4.14		%	4.23		%	(9		)	bps
Average interest-bearing liabilities	$	5,528,833		$	5,131,338		$	397,495
Interest expense	$	21,429		$	18,225		$	3,204
Cost of interest-bearing liabilities	0.52		%	0.47		%	5			bps
Core cost of interest-bearing liabilities (1)	0.53		%	0.53		%	—			bps
Cost of funds	0.40		%	0.36		%	4			bps
Core cost of funds (1)	0.41		%	0.41		%	—			bps
Net Interest Income (FTE)	$	203,902		$	195,970		$	7,932
Net Interest Margin (FTE)	3.80		%	3.93		%	(13		)	bps
Core Net Interest Margin (FTE) (1)	3.73		%	3.82		%	(9		)	bps

 (1) Core metrics exclude the impact of acquisition accounting accretion and amortization adjustments in net interest income.

For the first nine months of 2016, tax-equivalent net interest income was $203.9 million, an increase of $7.9 million from the same period of 2015, primarily driven by higher average loan balances. Net accretion related to acquisition accounting decreased $1.2 million from the first nine months of 2015 to $4.1 million in the first nine months of 2016. The tax-equivalent net interest margin decreased by 13 basis points to 3.80% for the first nine months of 2016 compared to 3.93% in the comparable period in the prior year. Core tax-equivalent net interest margin (which excludes the 7 basis point impact of acquisition accounting accretion in the first nine months of 2016 and 11 basis points in the first nine months of 2015) decreased by 9 basis points to 3.73% for the first nine months of 2016 from 3.82% for the first nine months of 2015. The decrease in core tax-equivalent net interest margin was due to the 9 basis point decline in interest-earning asset yields, which was primarily driven by lower loan yields, as new and renewed loans were originated and re-priced at lower rates, as well as lower levels of fees on loans.

-49-

The following tables show interest income on earning assets and related average yields as well as interest expense on interest-bearing liabilities and related average rates paid for the periods indicated (dollars in thousands):

AVERAGE BALANCES, INCOME AND EXPENSES, YIELDS AND RATES (TAXABLE EQUIVALENT BASIS)

	For the Three Months Ended September 30,
	2016							2015
	Average Balance			Interest  Income / Expense (1)		Yield /  Rate (1)(2)		Average Balance			Interest  Income / Expense (1)		Yield /  Rate (1)(2)
	(Dollars in thousands)
Assets:
Securities:
Taxable	$	768,608		$	4,732	2.45	%	$	710,583		$	3,954	2.21	%
Tax-exempt	449,944			5,302		4.69	%	427,879			5,187		4.81	%
Total securities	1,218,552			10,034		3.28	%	1,138,462			9,141		3.19	%
Loans, net (3) (4)	6,033,723			66,397		4.38	%	5,525,119			62,745		4.51	%
Other earning assets	102,409			429		1.67	%	88,073			401		1.81	%
Total earning assets	7,354,684			$	76,860	4.16	%	6,751,654			$	72,287	4.25	%
Allowance for loan losses	(35,995		)					(32,857		)
Total non-earning assets	835,262							803,044
Total assets	$	8,153,951						$	7,521,841
Liabilities and Stockholders' Equity:
Interest-bearing deposits:
Transaction and money market accounts	$	3,016,337		$	1,682	0.22	%	$	2,706,542		$	1,289	0.19	%
Regular savings	598,232			207		0.14	%	567,034			248		0.17	%
Time deposits (5)	1,181,936			2,663		0.90	%	1,227,835			2,667		0.86	%
Total interest-bearing deposits	4,796,505			4,552		0.38	%	4,501,411			4,204		0.37	%
Other borrowings (6)	884,597			2,853		1.28	%	661,517			2,352		1.41	%
Total interest-bearing liabilities	5,681,102			$	7,405	0.52	%	5,162,928			$	6,556	0.50	%
Noninterest-bearing liabilities:
Demand deposits	1,408,453							1,312,735
Other liabilities	67,728							50,715
Total liabilities	7,157,283							6,526,378
Stockholders' equity	996,668							995,463
Total liabilities and stockholders' equity	$	8,153,951						$	7,521,841
Net interest income				$	69,455						$	65,731
Interest rate spread						3.64	%						3.75	%
Cost of funds						0.40	%						0.39	%
Net interest margin (7)						3.76	%						3.86	%

(1) Income and yields are reported on a taxable equivalent basis using the statutory federal corporate tax rate of 35%.

(2) Rates and yields are annualized and calculated from actual, not rounded, amounts in thousands, which appear above.

(3) Nonaccrual loans are included in average loans outstanding.

(4) Interest income on loans includes $1.3 million and $1.4 million for the three months ended September 30, 2016 and 2015, respectively, in accretion of the fair market value adjustments related to acquisitions.

(5) Interest expense on certificates of deposits includes $0 and $154,000 for the three months ended September 30, 2016 and 2015, respectively, in accretion of the fair market value adjustments related to acquisitions.

(6) Interest expense on borrowings includes $181,000 and $87,000 for the three months ended September 30, 2016 and 2015, respectively, in accretion of the fair market value adjustments related to acquisitions.

(7) Core net interest margin excludes purchase accounting adjustments and was 3.67% and 3.77% for the three months ended September 30, 2016 and 2015, respectively.

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AVERAGE BALANCES, INCOME AND EXPENSES, YIELDS AND RATES (TAXABLE EQUIVALENT BASIS)

	For the Nine Months Ended September 30,
	2016							2015
	Average Balance			Interest  Income / Expense (1)		Yield /  Rate (1)(2)		Average Balance			Interest  Income / Expense (1)		Yield /  Rate (1)(2)
	(Dollars in thousands)
Assets:
Securities:
Taxable	$	756,042		$	13,558	2.40	%	$	720,569		$	11,621	2.16	%
Tax-exempt	446,840			15,914		4.76	%	421,224			15,480		4.91	%
Total securities	1,202,882			29,472		3.27	%	1,141,793			27,101		3.17	%
Loans, net (3) (4)	5,869,511			194,839		4.43	%	5,445,243			185,959		4.57	%
Other earning assets	87,420			1,020		1.56	%	81,776			1,135		1.86	%
Total earning assets	7,159,813			$	225,331	4.20	%	6,668,812			$	214,195	4.29	%
Allowance for loan losses	(35,439		)					(32,507		)
Total non-earning assets	832,467							812,268
Total assets	$	7,956,841						$	7,448,573
Liabilities and Stockholders' Equity:
Interest-bearing deposits:
Transaction and money market accounts	$	2,903,336		$	4,523	0.21	%	$	2,644,209		$	3,649	0.18	%
Regular savings	591,699			649		0.15	%	562,288			777		0.18	%
Time deposits (5)	1,172,856			7,773		0.89	%	1,243,546			6,778		0.73	%
Total interest-bearing deposits	4,667,891			12,945		0.37	%	4,450,043			11,204		0.34	%
Other borrowings (6)	860,942			8,484		1.32	%	681,295			7,021		1.38	%
Total interest-bearing liabilities	5,528,833			$	21,429	0.52	%	5,131,338			$	18,225	0.47	%
Noninterest-bearing liabilities:
Demand deposits	1,376,001							1,271,937
Other liabilities	60,910							55,549
Total liabilities	6,965,744							6,458,824
Stockholders' equity	991,097							989,749
Total liabilities and stockholders' equity	$	7,956,841						$	7,448,573
Net interest income				$	203,902						$	195,970
Interest rate spread						3.68	%						3.82	%
Cost of funds						0.40	%						0.36	%
Net interest margin (7)						3.80	%						3.93	%

(1) Income and yields are reported on a taxable equivalent basis using the statutory federal corporate tax rate of 35%.

(2) Rates and yields are annualized and calculated from actual, not rounded, amounts in thousands, which appear above.

(3) Nonaccrual loans are included in average loans outstanding.

(4) Interest income on loans includes $3.7 million and $3.1 million for the nine months ended September 30, 2016 and 2015, respectively, in accretion of the fair market value adjustments related to acquisitions.

(5) Interest expense on certificates of deposits includes $0 and $1.8 million for the nine months ended September 30, 2016 and 2015, respectively, in accretion of the fair market value adjustments related to acquisitions.

(6) Interest expense on borrowings includes $386,000 and $362,000 for the nine months ended September 30, 2016 and 2015, respectively, in accretion of the fair market value adjustments related to acquisitions.

(7) Core net interest margin excludes purchase accounting adjustments and was 3.73% and 3.82% for the nine months ended September 30, 2016 and 2015, respectively.

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The Volume Rate Analysis table below presents changes in interest income and interest expense and distinguishes between the changes related to increases or decreases in average outstanding balances of interest-earning assets and interest-bearing liabilities (volume), and the changes related to increases or decreases in average interest rates on such assets and liabilities (rate). Changes attributable to both volume and rate have been allocated proportionally. Results, on a taxable equivalent basis, are as follows (dollars in thousands):

	Three Months Ended September 30, 2016 vs. September 30, 2015 Increase (Decrease) Due to Change in:									Nine Months Ended September 30, 2016 vs. September 30, 2015 Increase (Decrease) Due to Change in:
	Volume			Rate			Total			Volume			Rate			Total
Earning Assets:
Securities:
Taxable	$	337		$	441		$	778		$	592		$	1,345		$	1,937
Tax-exempt	263			(148		)	115			922			(488		)	434
Total securities	600			293			893			1,514			857			2,371
Loans, net (1)	5,642			(1,990		)	3,652			14,191			(5,311		)	8,880
Other earning assets	62			(34		)	28			74			(189		)	(115		)
Total earning assets	$	6,304		$	(1,731	)	$	4,573		$	15,779		$	(4,643	)	$	11,136
Interest-Bearing Liabilities:
Interest-bearing deposits:
Transaction and money market accounts	$	158		$	235		$	393		$	378		$	496		$	874
Regular savings	13			(54		)	(41		)	39			(167		)	(128		)
Time Deposits (2)	(102		)	98			(4		)	(403		)	1,398			995
Total interest-bearing deposits	69			279			348			14			1,727			1,741
Other borrowings (3)	735			(234		)	501			1,782			(319		)	1,463
Total interest-bearing liabilities	804			45			849			1,796			1,408			3,204
Change in net interest income	$	5,500		$	(1,776	)	$	3,724		$	13,983		$	(6,051	)	$	7,932

(1) The rate-related change in interest income on loans includes the impact of higher (lower) accretion of the acquisition-related fair market value adjustments of ($26,000) and $626,000 for the three- and nine-month change, respectively.

(2) The rate-related change in interest expense on time deposits includes the impact of lower accretion of the acquisition-related fair market value adjustments of $154,000 and $1.8 million for the three- and nine-month change, respectively.

(3) The rate-related change in interest expense on other borrowings includes the impact of higher accretion of the acquisition-related fair market value adjustments of $94,000 and $25,000 for the three- and nine-month change, respectively.

The Company’s fully taxable equivalent net interest margin includes the impact of acquisition accounting fair value adjustments. The impact of net accretion for 2016 as well as the remaining estimated net accretion are reflected in the following table (dollars in thousands):

	Loan Accretion		Borrowings Accretion (Amortization)			Total
For the quarter ended March 31, 2016	$	1,084	$	62		$	1,146
For the quarter ended June 30, 2016	1,259		143			1,402
For the quarter ended September 30, 2016	1,338		181			1,519
For the remaining three months of 2016	1,040		71			1,111
For the years ending:
2017	4,089		170			4,259
2018	3,692		(143		)	3,549
2019	3,029		(286		)	2,743
2020	2,622		(301		)	2,321
2021	2,232		(316		)	1,916
Thereafter	8,691		(5,306		)	3,385

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Noninterest Income

	For the Three Months Ended
	September 30,						Change
	2016			2015			$			%
	(Dollars in thousands)
Noninterest income:
Service charges on deposit accounts	$	4,965		$	4,965		$	—		—	%
Other service charges and fees	4,397			3,983			414			10.4	%
Fiduciary and asset management fees	2,844			2,304			540			23.4	%
Mortgage banking income, net	3,207			2,630			577			21.9	%
Gains on securities transactions, net	—			75			(75		)	(100.0	)%
Other-than-temporary impairment losses	—			(300		)	300			100.0	%
Bank owned life insurance income	1,389			1,161			228			19.6	%
Other operating income	2,148			1,907			241			12.6	%
Total noninterest income	$	18,950		$	16,725		$	2,225		13.3	%
Mortgage segment operations	$	(3,501	)	(2,608		)	$	(893	)	34.2	%
Intercompany eliminations	140			170			(30		)	(17.6	)%
Community Bank segment	$	15,589		$	14,287		$	1,302		9.1	%

For the quarter ended September 30, 2016, noninterest income increased $2.2 million, or 13.3%, to $19.0 million from $16.7 million for the third quarter of 2015. Customer-related fee income increased $414,000 primarily due to higher debit card interchange and letter of credit fees. Mortgage banking income increased $577,000 related to higher mortgage loan originations. Fiduciary and asset management fees also increased by $540,000 when compared to the same quarter in the prior year, due to the acquisition of ODCM.

	For the Nine Months Ended
	September 30,						Change
	2016			2015			$			%
	(Dollars in thousands)
Noninterest income:
Service charges on deposit accounts	$	14,454		$	13,800		$	654		4.7	%
Other service charges and fees	12,971			11,618			1,353			11.6	%
Fiduciary and asset management fees	7,315			6,835			480			7.0	%
Mortgage banking income, net	8,324			7,582			742			9.8	%
Gains on securities transactions, net	145			672			(527		)	(78.4	)%
Other-than-temporary impairment losses	—			(300		)	300			100.0	%
Bank owned life insurance income	4,122			3,431			691			20.1	%
Other operating income	5,526			4,352			1,174			27.0	%
Total noninterest income	$	52,857		$	47,990		$	4,867		10.1	%
Mortgage segment operations	$	(9,185	)	(7,844		)	$	(1,341	)	17.1	%
Intercompany eliminations	465			512			(47		)	(9.2	)%
Community Bank segment	$	44,137		$	40,658		$	3,479		8.6	%

For the nine months ended September 30, 2016, noninterest income increased $4.9 million, or 10.1%, to $52.9 million from $48.0 million for the first nine months of 2015. Customer-related fee income increased $2.0 million due to higher overdraft, debit card interchange, and letter of credit fees. Bank owned life insurance increased $691,000 compared to the prior year due to increased investments in bank owned life insurance at the end of 2015, and other operating income increased $1.2 million, primarily related to higher loan-related interest rate swap fees. Mortgage banking income increased $742,000 related to higher gain on sale margins. Fiduciary and asset management fees also increased by $480,000 when compared to the same period in the prior year, due to the acquisition of ODCM.

-53-

Noninterest expense

	For the Three Months Ended
	September 30,						Change
	2016			2015			$			%
	(Dollars in thousands)
Noninterest expense:
Salaries and benefits	$	30,493		$	25,853		$	4,640		17.9	%
Occupancy expenses	4,841			4,915			(74		)	(1.5	)%
Furniture and equipment expenses	2,635			3,015			(380		)	(12.6	)%
Technology and data processing	3,917			3,549			368			10.4	%
Professional services	1,895			1,991			(96		)	(4.8	)%
Marketing and advertising expense	1,975			1,781			194			10.9	%
OREO and credit-related expenses (1)	503			1,263			(760		)	(60.2	)%
Other operating expenses	10,654			10,958			(304		)	(2.8	)%
Total noninterest expense	$	56,913		$	53,325		$	3,588		6.7	%
Mortgage segment operations	$	(2,700	)	$	(2,821	)	$	121		(4.3	)%
Intercompany eliminations	140			170			(30		)	(17.6	)%
Community Bank segment	$	54,353		$	50,674		$	3,679		7.3	%

(1) OREO related costs include foreclosure related expenses, gains/losses on the sale of OREO, valuation reserves, and asset resolution related legal expenses.

For the quarter ended September 30,2016, noninterest expense increased $3.6 million, or 6.7%, to $56.9 million from $53.3 million for the third quarter of 2015. Salaries and benefits expense increased $4.6 million primarily related to annual merit adjustments as well as increases in incentive compensation and benefit-related costs. Technology and software costs increased $368,000 due to investments in infrastructure to support the Company's growth. The majority of declines in noninterest expense were related to decreases in OREO and credit-related costs of $760,000 related to lower property and legal-related expenses as well as higher gains on sales of OREO. Other declines in noninterest expenses were related to a decrease in furniture and equipment expenses of $380,000, related to lower depreciation and equipment maintenance expenses, and lower core deposit intangible amortization expense of $391,000.

	For the Nine Months Ended
	September 30,						Change
	2016			2015			$			%
	(Dollars in thousands)
Noninterest expense:
Salaries and benefits	$	87,061		$	78,905		$	8,156		10.3	%
Occupancy expenses	14,627			15,220			(593		)	(3.9	)%
Furniture and equipment expenses	7,867			8,818			(951		)	(10.8	)%
Technology and data processing	11,340			10,020			1,320			13.2	%
Professional services	6,432			5,008			1,424			28.4	%
Marketing and advertising expense	5,838			5,841			(3		)	(0.1	)%
OREO and credit-related expenses (1)	1,965			4,415			(2,450		)	(55.5	)%
Other operating expenses	31,306			34,178			(2,872		)	(8.4	)%
Total noninterest expense	$	166,436		$	162,405		$	4,031		2.5	%
Mortgage segment operations	$	(7,937	)	$	(8,906	)	$	969		(10.9	)%
Intercompany eliminations	465			512			(47		)	(9.2	)%
Community Bank segment	$	158,964		$	154,011		$	4,953		3.2	%

(1) OREO related costs include foreclosure related expenses, gains/losses on the sale of OREO, valuation reserves, and asset resolution related legal expenses.

-54-

For the nine months ended September 30,2016, noninterest expense increased $4.0 million to $166.4 million from $162.4 million when compared to the first nine months of 2015. Salaries and benefits expense increased $8.2 million primarily related to annual merit adjustments as well as increases in incentive and equity-based compensation and benefit-related costs; the increase in salaries also relates to investments in key positions to support the Company's long-term growth strategy. Professional fees increased $1.4 million due to higher project-related consulting expenses, and technology and software costs increased $1.3 million due to investments in infrastructure to support the Company's growth. These increases were partially offset by declines in OREO and credit-related costs of $2.5 million related to lower valuation adjustments and property and legal-related fees as well as gains on sales of OREO compared to losses in 2015. Additional declines in noninterest expenses were related to lower core deposit intangible amortization expense of $1.1 million, a decrease in furniture and equipment expenses of $951,000 primarily related to lower depreciation expenses, lower occupancy expenses of $593,000 due to lower rental expenses, a decline in communications expenses of $517,000, and lower printing costs of $404,000.

SEGMENT INFORMATION

Community Bank Segment

For the three months ended September 30, 2016, the community bank segment reported net income of $19.6 million, which was an increase of $1.5 million from the third quarter of 2015. Net interest income increased $3.5 million in the current quarter to $66.6 million at September 30, 2016, primarily driven by higher average loan balances. The provision for credit losses for the quarter ended September 30, 2016 was $2.5 million, an increase of $455,000 compared to the same quarter a year ago, primarily driven by loan growth.

Noninterest income increased $1.3 million, or 9.1%, from $14.3 million in the third quarter of 2015 to $15.6 million in the third quarter of 2016. Customer-related fee income increased $414,000 primarily due to higher debit card interchange and letter of credit fees. Fiduciary and asset management fees also increased by $540,000 related to the acquisition of ODCM. Loan-related interest-rate swap fees increased $1.3 million in the current quarter compared to the same quarter a year ago. These increases were partially offset by nonrecurring income in the third quarter of 2015 related to the resolution of a problem credit resulting in a note sale.

Noninterest expense increased $3.7 million, or 7.3%, from $50.7 million in the third quarter of 2015 to $54.4 million in the current quarter. The increase in noninterest expense is driven by increases in salaries and benefits expense of $4.8 million primarily related to annual merit adjustments as well as increases in incentive compensation and benefit-related costs; the increase in salaries also relates to investments in key positions to support the Company's long-term growth strategy. Technology and software costs increased $374,000 when compared to the third quarter of 2015. These increases in noninterest expense were partially offset by decreases in OREO and credit-related expenses, core deposit intangible amortization, and furniture and equipment expenses.

For the nine months ended September 30, 2016, the community bank segment reported net income of $55.3 million, which was $5.9 million higher than net income in the first nine months of 2015. Net interest income increased $7.3 million from $188.2 million in the first nine months of 2015 to $195.5 million in the first nine months of 2016, primarily driven by loan growth. The provision for credit losses for the nine months ended September 30, 2016 was $7.2 million, a decrease of $235,000 compared to the same period a year ago, driven by lower charge-off levels and improving asset quality metrics.

Noninterest income increased $3.5 million, or 8.6%, from $40.7 million in the first nine months of 2015 to $44.1 million in 2016. Customer-related noninterest income increased $2.0 million primarily due to higher overdraft, debit card interchange, and letter of credit fees. Fiduciary and asset management fees increased by $480,000 related to the acquisition of ODCM. Loan-related interest-rate swap fees increased $2.6 million in the current year compared to same period a year ago, and bank owned life insurance increased $691,000. These increases were partially offset by lower gains on sales of securities in the current year as well as nonrecurring income in 2015 related to the resolution of a problem credit resulting in a note sale and gains from the dissolution of a limited partnership.

Noninterest expense increased $5.0 million, or 3.2%, from $154.0 million in the first nine months of 2015 to $159.0 million in the current year. The increase in noninterest expense was driven by increases in salaries and benefits expense primarily related to annual merit adjustments as well as increases in incentive and equity-based compensation and benefit-related costs, increases in technology and software costs, and increases in professional fees due to higher project-related consulting expense. The increase in salaries also relates to investments in key positions to support the Company's long-term growth strategy. These increases in noninterest expense were partially offset by decreases in OREO and credit related expenses, core deposit intangible amortization, furniture and equipment expenses, and rental expenses.

-55-

Mortgage Segment

The mortgage segment reported net income of $785,000 for the third quarter of 2016, an improvement of $726,000 from net income of $59,000 in the third quarter of 2015. The improvement was primarily due to increased mortgage banking income, net of commissions, of $577,000, related to increases in mortgage loan originations. Mortgage loan originations increased $8.6 million, or 5.8%, from $148.1 million for the quarter ended September 30, 2015 to $156.7 million for the quarter ended September 30, 2016. Noninterest expense decreased $121,000, largely a result of cost control initiatives in personnel costs.

The mortgage segment reported net income of $1.4 million for the first nine months of 2016, an improvement of $1.5 million from a net loss of $113,000 in the first nine months of 2015. The improvement was primarily due to a reduction in noninterest expense of $969,000, largely a result of cost control initiatives in personnel costs as well as lower volume-driven expenses. Mortgage banking income, net of commissions, increased $742,000 to $8.3 million in the first nine months of 2016 due to increased gain on sale margins, despite lower origination volume of $32.1 million, or 7.5%, as volume declined from $427.1 million for the first nine months of 2015 to $395.0 million for the first nine months of 2016.

Income Taxes

The provision for income taxes is based upon the results of operations, adjusted for the effect of certain tax-exempt income and non-deductible expenses. In addition, certain items of income and expense are reported in different periods for financial reporting and tax return purposes. The tax effects of these temporary differences are recognized currently in the deferred income tax provision or benefit. Deferred tax assets or liabilities are computed based on the difference between the financial statement and income tax bases of assets and liabilities using the applicable enacted marginal tax rate.

In assessing the ability to realize deferred tax assets, management considers the scheduled reversal of temporary differences, projected future taxable income, and tax planning strategies. Management continues to believe that it is not likely that the Company will realize its deferred tax asset related to net operating losses generated at the state level and accordingly has established a valuation allowance. The Company’s bank subsidiary is not subject to a state income tax in its primary place of business (Virginia). The Company’s other subsidiaries are subject to state income taxes and have generated losses for state income tax purposes which the Company is currently unable to utilize. State net operating loss carryovers will begin to expire after 2026.

The effective tax rate for the three months ended September 30, 2016 and 2015 was 23.3% and 26.5%, respectively; the effective tax rate for the nine months ended September 30, 2016 and 2015 was 25.0% and 26.7%, respectively. The decrease in the effective tax rate is primarily related to historic tax credits realized in the third quarter of 2016 related to the Company's investment in a historic rehabilitation project that was completed.

BALANCE SHEET

Assets

At September 30, 2016, total assets were $8.3 billion, an increase of $564.9 million, or 9.8% (annualized), from $7.7 billion at December 31, 2015. The increase in assets was mostly related to loan growth.

Loans held for investment, net of deferred fees and costs, were $6.1 billion at September 30, 2016, an increase of $477.5 million, or 11.2% (annualized), from December 31, 2015. The increase was primarily driven by growth in non-owner occupied commercial real estate, commercial and industrial, and consumer loans. Quarterly average loans increased $508.6 million, or 9.2%, from the same quarter in the prior year. For additional information on the Company’s loan activity, please refer to “Loan Portfolio” below or Note 3 “Loans and Allowance for Loan Losses” in Part I, Item 1 – Financial Statements, of this report.

Liabilities and Stockholders’ Equity

At September 30, 2016, total liabilities were $7.3 billion, an increase of $559.3 million from December 31, 2015.

Total deposits were $6.3 billion at September 30, 2016, an increase of $294.6 million, or 6.6% (annualized), from December 31, 2015. The net increase in deposits from year-end 2015 was primarily related to increases in low-cost deposits, partially offset by

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continued run-off in time deposits. Quarterly average deposits increased $390.8 million, or 6.7%, from the same quarter in the prior year. For further discussion on this topic, see “Deposits” below.

The Company’s short term borrowings generally include secured financing transactions, such as customer repurchase agreements, advances from the FHLB, and other lines of credit. Short-term borrowings at September 30, 2016 were $665.7 million, an increase of $276.7 million from December 31, 2015, primarily due to an increase in FHLB advances. For additional information on the Company’s borrowings activity, please refer to Note 5 “Borrowings” in Part I, Item 1 – Financial Statements, of this report.

At September 30, 2016, stockholders’ equity was $1.0 billion, an increase of $5.6 million from $995.4 million reported at December 31, 2015. The Company’s capital ratios continue to exceed the minimum capital requirements for regulatory purposes but have decreased from prior periods primarily due to share repurchases and asset growth. The total risk-based capital ratios at September 30, 2016 and December 31, 2015 were 11.60% and 12.46%, respectively. The Tier 1 risk-based capital ratios were 11.07% and 11.93% at September 30, 2016 and December 31, 2015, respectively. The common equity Tier 1 risk-based capital ratios were 9.78% and 10.55% at September 30, 2016 and December 31, 2015, respectively. The Company’s common equity to total asset ratios at September 30, 2016 and December 31, 2015 were 12.12% and 12.94%, respectively, while its tangible common equity to tangible assets ratios were 8.57% and 9.20%, respectively, at the same dates.

On October 29, 2015, the Company’s Board of Directors authorized a share repurchase program to purchase up to $25.0 million worth of the Company’s common stock on the open market or in privately negotiated transactions. This share repurchase program was completed in February 19, 2016. On February 25, 2016, the Company’s Board of Directors authorized a new share repurchase program to purchase up to $25.0 million worth of the Company’s common stock on the open market or in privately negotiated transactions. The Company repurchased approximately 1.4 million shares during the nine months ended September 30, 2016 and had approximately $13.0 million available for repurchase under the current program.

Also, the Company declared and paid a cash dividend of $0.19 per share during the third quarter of 2016, consistent with the dividend paid in the prior quarter, and an increase of $0.02 per share, or 11.8%, compared to the dividend paid during the same quarter in the prior year. For the nine months ended September 30, 2016, the Company paid dividends of $0.57, which is an increase of $0.08 or 16.3% compared to the dividends paid during the first nine months of 2015.

Securities

At September 30, 2016, the Company had total investments in the amount of $1.2 billion, or 14.8% of total assets, as compared to $1.2 billion, or 15.1% of total assets, at December 31, 2015. The Company seeks to diversify its portfolio to minimize risk. It focuses on purchasing mortgage-backed securities for cash flow and reinvestment opportunities and securities issued by states and political subdivisions due to the tax benefits and the higher yield offered from these securities. The majority of the Company’s mortgage-backed securities are investment grade. The investment portfolio has a high percentage of municipals and mortgage-backed securities; therefore a higher taxable equivalent yield exists on the portfolio compared to its peers. The Company does not engage in structured derivative or hedging activities within the investment portfolio.

During the second quarter of 2015, the Company transferred securities, which it intends and has the ability to hold until maturity, with a fair value of $201.8 million on the date of transfer, from securities available for sale to securities held to maturity. The Company transferred these securities to held to maturity to reduce the impact of price volatility on capital and in consideration of changes to the regulatory environment. The securities included net pre-tax unrealized gains of $8.1 million at the date of transfer with a remaining balance of $5.6 million as of September 30, 2016 and $6.8 million as of December 31, 2015.

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The table below sets forth a summary of the securities available for sale, securities held to maturity, and restricted stock for the following periods (dollars in thousands): 

	September 30, 2016		December 31, 2015
Available for Sale:
Obligations of states and political subdivisions	$	279,223	$	268,079
Corporate and other bonds	121,747		75,979
Mortgage-backed securities	540,596		548,171
Other securities	13,418		11,063
Total securities available for sale, at fair value	954,984		903,292
Held to Maturity:
Obligations of states and political subdivisions, at carrying value	200,839		205,374
Federal Reserve Bank stock	23,808		23,808
Federal Home Loan Bank stock	39,396		28,020
Total restricted stock, at cost	63,204		51,828
Total investments	$	1,219,027	$	1,160,494

During each quarter and at year end, the Company conducts an assessment of the securities portfolio for OTTI consideration. No OTTI was recognized for the quarter ended September 30, 2016. For the year ended December 31, 2015, the Company determined that a municipal security in the available for sale portfolio incurred credit-related OTTI of $300,000. During the quarter ended March 31, 2016, the municipal security was sold.  As a result, the Company recognized an additional loss on sale of the previously written down security. The Company monitors the portfolio, which is subject to liquidity needs, market rate changes, and credit risk changes, to determine whether adjustments are needed. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

The following table summarizes the contractual maturity of securities available for sale at fair value and their weighted average yields as of September 30, 2016 (dollars in thousands): 

	1 Year or Less		1 - 5 Years		5 - 10 Years		Over 10 Years		Total
Mortgage backed securities:
Amortized cost	$	4,997	$	52,523	$	171,804	$	299,904	$	529,228
Fair value	5,004		53,373		176,346		305,873		540,596
Weighted average yield (1)	1.56		2.00		2.19		2.25		2.20
Obligations of states and political subdivisions:
Amortized cost	5,785		51,651		79,205		129,650		266,291
Fair value	5,938		54,194		83,454		135,637		279,223
Weighted average yield (1)	6.44		4.72		4.60		3.95		4.35
Corporate bonds and other securities:
Amortized cost	5,885		5,526		63,894		60,210		135,515
Fair value	5,918		5,526		64,470		59,251		135,165
Weighted average yield (1)	1.12		0.85		4.36		2.21		3.12
Total securities available for sale:
Amortized cost	16,667		109,700		314,903		489,764		931,034
Fair value	16,860		113,093		324,270		500,761		954,984
Weighted average yield (1)	3.10		3.22		3.23		2.70		2.95

(1) Yields on tax-exempt securities have been computed on a tax-equivalent basis.

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The following table summarizes the contractual maturity of securities held to maturity at carrying value and their weighted average yields as of September 30, 2016 (dollars in thousands):

	1 Year or Less		1 - 5 Years		5 - 10 Years		Over 10 Years		Total
Obligations of states and political subdivisions:
Carrying Value	$	850	$	25,918	$	48,243	$	125,828	$	200,839
Fair value	850		26,561		50,017		132,289		209,717
Weighted average yield (1)	0.69		2.81		3.03		3.78		3.46

(1) Yields on tax-exempt securities have been computed on a tax-equivalent basis.

As of September 30, 2016, the Company maintained a diversified municipal bond portfolio with approximately 75% of its holdings in general obligation issues and the remainder backed by revenue bonds. Issuances within the State of Texas represented 12%, the State of Washington represented 12%, and the Commonwealth of Virginia represented 12% of the municipal portfolio; no other state had a concentration above 10%. Substantially all municipal holdings are considered investment grade by Moody’s or Standard & Poor’s. The non-investment grade securities are principally insured Texas municipalities with no underlying rating.  When purchasing municipal securities, the Company focuses on strong underlying ratings for general obligation issuers or bonds backed by essential service revenues.

Liquidity

Liquidity represents an institution’s ability to meet present and future financial obligations through either the sale or maturity of existing assets or the acquisition of additional funds through liability management. Liquid assets include cash, interest-bearing deposits with banks, money market investments, federal funds sold, securities available for sale, loans held for sale, and loans maturing or re-pricing within one year. Additional sources of liquidity available to the Company include its capacity to borrow additional funds when necessary through federal funds lines with several correspondent banks, a line of credit with the FHLB, the purchase of brokered certificates of deposit, and a corporate line of credit with a large correspondent bank. Management considers the Company’s overall liquidity to be sufficient to satisfy its depositors’ requirements and to meet its customers’ credit needs.

As of September 30, 2016, the cash, interest-bearing deposits in other banks, money market investments, federal funds sold, loans held for sale, and loans that mature within one year totaled $2.1 billion, or 27.8%, of total earning assets. As of September 30, 2016, approximately $1.9 billion, or 30.2%, of total loans are scheduled to mature within one year based on contractual maturity, adjusted for expected prepayments.

Loan Portfolio

Loans, net of deferred fees and costs, were $6.1 billion at September 30, 2016, $5.7 billion at December 31, 2015, and $5.5 billion at September 30, 2015. Loans secured by real estate continue to represent the Company’s largest category, comprising 81.0% of the total loan portfolio at September 30, 2016.

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The following table presents the Company’s composition of loans, net of deferred fees and costs, in dollar amounts and as a percentage of total gross loans as of the quarter ended (dollars in thousands): 

	September 30, 2016				June 30, 2016				March 31, 2016				December 31, 2015				September 30, 2015
Loans secured by real estate:
Residential 1-4 family	$	948,963	15.4	%	$	941,446	15.8	%	$	926,556	16.0	%	$	925,490	16.3	%	$	935,266	16.9	%
Commercial	2,311,970		37.7	%	2,202,625		37.1	%	2,145,454		37.2	%	2,130,566		37.6	%	2,087,186		37.6	%
Construction, land development and other land loans	776,430		12.6	%	765,997		12.9	%	776,698		13.4	%	749,720		13.2	%	694,644		12.5	%
Second mortgages	50,398		0.8	%	51,014		0.9	%	51,921		0.9	%	52,977		0.9	%	52,547		0.9	%
Equity lines of credit	524,097		8.5	%	519,196		8.7	%	517,122		9.0	%	517,050		9.1	%	514,730		9.3	%
Multifamily	339,313		5.5	%	337,723		5.7	%	323,270		5.6	%	322,528		5.7	%	329,959		6.0	%
Farm land	29,846		0.5	%	30,384		0.5	%	29,724		0.5	%	28,963		0.5	%	26,984		0.5	%
Total real estate loans	4,981,017		81.0	%	4,848,385		81.6	%	4,770,745		82.6	%	4,727,294		83.3	%	4,641,316		83.7	%
Commercial & industrial loans	509,857		8.3	%	469,054		7.9	%	453,208		7.8	%	435,366		7.7	%	409,654		7.4	%
Personal loans	542,268		8.8	%	510,684		8.6	%	447,341		7.7	%	403,857		7.1	%	389,379		7.0	%
All other loans	115,776		1.9	%	112,975		1.9	%	109,208		1.9	%	104,945		1.9	%	103,272		1.9	%
Gross loans	$	6,148,918	100.0	%	$	5,941,098	100.0	%	$	5,780,502	100.0	%	$	5,671,462	100.0	%	$	5,543,621	100.0	%

The following table presents the remaining maturities, based on contractual maturity, by loan type and by rate type (variable or fixed), as of September 30, 2016 (dollars in thousands):

					Variable Rate						Fixed Rate
	Total Maturities		Less than 1 year		Total		1-5 years		More than 5 years		Total		1-5 years		More than 5 years
Loans secured by real estate:
Residential 1-4 family	$	948,963	$	72,793	$	342,976	$	15,005	$	327,971	$	533,194	$	295,808	$	237,386
Commercial	2,311,970		229,676		716,815		186,572		530,243		1,365,479		1,005,989		359,490
Construction, land development and other land loans	776,430		446,965		214,326		176,060		38,266		115,139		90,187		24,952
Second mortgages	50,398		4,514		4,055		801		3,254		41,829		14,720		27,109
Equity lines of credit	524,097		35,240		488,278		39,408		448,870		579		457		122
Multifamily	339,313		24,247		121,428		27,802		93,626		193,638		161,330		32,308
Farm land	29,846		7,362		7,973		4,644		3,329		14,511		10,110		4,401
Total real estate loans	4,981,017		820,797		1,895,851		450,292		1,445,559		2,264,369		1,578,601		685,768
Commercial & industrial loans	509,857		168,506		138,448		124,831		13,617		202,903		123,446		79,457
Consumer loans	542,268		16,319		8,467		8,254		213		517,482		213,548		303,934
All other loans	115,776		19,785		41,337		12,287		29,050		54,654		20,754		33,900
Gross loans	$	6,148,918	$	1,025,407	$	2,084,103	$	595,664	$	1,488,439	$	3,039,408	$	1,936,349	$	1,103,059

While the current economic environment is challenging, the Company remains committed to originating soundly underwritten loans to qualifying borrowers within its markets. The Company is focused on providing community-based financial services and discourages the origination of portfolio loans outside of its principal trade areas. As reflected in the loan table, at September 30, 2016, the largest component of the Company’s loan portfolio consisted of real estate loans, concentrated in commercial, construction, and residential 1-4 family. The risks attributable to these concentrations are mitigated by the Company’s credit underwriting and monitoring processes, including oversight by a centralized credit administration function and credit policy and risk management committee, as well as seasoned bankers focusing their lending to borrowers with proven track records in markets with which the Company is familiar. UMG serves as a mortgage brokerage operation, selling the majority of its loan production in the secondary market or selling loans to meet the Bank’s current asset/liability management needs.

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Asset Quality

Overview

During the first nine months of 2016, the Company experienced declines in nonperforming assets and total past due loan levels from December 31, 2015. OREO balances declined significantly from the prior year primarily as a result of sales of foreclosed property. Net charge-off levels were lower compared to the prior year due to improving asset quality. The allowance for loan losses increased from December 31, 2015 due to loan growth in 2016.

Troubled Debt Restructurings

The total recorded investment in TDRs as of September 30, 2016 was $13.3 million, an increase of $575,000, or 4.5%, from $12.7 million at December 31, 2015 and an increase of $1.7 million, or 14.9%, from $11.6 million at September 30, 2015. Of the $13.3 million of TDRs at September 30, 2016, $11.8 million, or 89.1%, were considered performing while the remaining $1.5 million were considered nonperforming. Loans removed from TDR status represent restructured loans with a market rate of interest at the time of the restructuring. These loans have performed in accordance with their modified terms for twelve consecutive months and were no longer considered impaired. Loans removed from TDR status are collectively evaluated for impairment; due to the significant improvement in the expected future cash flows, these loans are grouped based on their primary risk characteristics, typically using the Company’s internal risk rating system as its primary credit quality indicator. Impairment is measured based on historical loss experience taking into consideration environmental factors. The significant majority of these loans have been subject to new credit decisions due to the improvement in the expected future cash flows, the financial condition of the borrower, and other factors considered during re-underwriting. The TDR activity during the quarter did not have a material impact on the Company’s allowance for loan losses, financial condition, or results of operations.

Nonperforming Assets

At September 30, 2016, nonperforming assets totaled $23.3 million, a decrease of $4.0 million, or 14.6%, from December 31, 2015 and a decline of $11.8 million, or 33.7%, from a year ago. In addition, NPAs as a percentage of total outstanding loans decreased 10 basis points to 0.38% in the current quarter from 0.48% as of December 31, 2015 and declined 25 basis points from 0.63% a year earlier. All nonaccrual and past due loan metrics discussed below exclude PCI loans, which totaled $62.3 million (net of fair value mark of $15.6 million) at September 30, 2016.

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The following table shows a summary of asset quality balances and related ratios as of and for the quarters ended (dollars in thousands):

	September 30, 2016			June 30, 2016			March 31, 2016			December 31, 2015			September 30, 2015
Nonaccrual loans, excluding PCI loans	$	12,677		$	10,861		$	13,092		$	11,936		$	12,966
Foreclosed properties	7,927			10,076			10,941			11,994			18,789
Former bank premises	2,654			3,305			3,305			3,305			3,305
Total nonperforming assets	23,258			24,242			27,338			27,235			35,060
Loans past due 90 days and accruing interest	3,529			3,533			5,723			5,829			5,164
Total nonperforming assets and loans past due 90 days and accruing interest	$	26,787		$	27,775		$	33,061		$	33,064		$	40,224
Performing Restructurings	$	11,824		$	11,885		$	11,486		$	10,780		$	9,468
Balances
Allowance for loan losses	$	36,542		$	35,074		$	34,399		$	34,047		$	33,269
Average loans, net of deferred fees and costs	6,033,723			5,863,007			5,709,998			5,612,366			5,525,119
Loans, net of deferred fees and costs	6,148,918			5,941,098			5,780,502			5,671,462			5,543,621
Ratios
NPAs to total loans	0.38		%	0.41		%	0.47		%	0.48		%	0.63		%
NPAs & loans 90 days past due to total loans	0.44		%	0.47		%	0.57		%	0.58		%	0.73		%
NPAs to total loans & OREO	0.38		%	0.41		%	0.47		%	0.48		%	0.63		%
NPAs & loans 90 days past due and accruing to total loans & OREO	0.43		%	0.47		%	0.57		%	0.58		%	0.72		%
ALL to nonaccrual loans	288.25		%	322.94		%	262.75		%	285.25		%	256.59		%
ALL to nonaccrual loans & loans 90 days past due and accruing	225.48		%	243.67		%	182.83		%	191.65		%	183.50		%

Nonperforming assets at September 30, 2016 included $12.7 million in nonaccrual loans, a net increase of $741,000, or 6.2%, from December 31, 2015 and a net decrease of $289,000, or 2.2%, from September 30, 2015. The following table shows the activity in nonaccrual loans for the quarter ended (dollars in thousands):

	September 30, 2016			June 30, 2016			March 31, 2016			December 31, 2015			September 30, 2015
Beginning Balance	$	10,861		$	13,092		$	11,936		$	12,966		$	9,521
Net customer payments	(1,645		)	(2,859		)	(1,204		)	(1,493		)	(1,104		)
Additions	4,359			2,568			5,150			2,344			5,213
Charge-offs	(660		)	(1,096		)	(1,446		)	(1,245		)	(541		)
Loans returning to accruing status	(23		)	(396		)	(932		)	(402		)	(123		)
Transfers to OREO	(215		)	(448		)	(412		)	(234		)	—
Ending Balance	$	12,677		$	10,861		$	13,092		$	11,936		$	12,966

The additions to nonaccrual loans in the third quarter of 2016 were comprised of several smaller credit relationships, the majority of which were construction and commercial & industrial loans as well as loans secured by residential 1-4 family property.

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The following table presents the composition of nonaccrual loans and the coverage ratio, which is the allowance for loan losses expressed as a percentage of nonaccrual loans, at the quarters ended (dollars in thousands):

	September 30, 2016			June 30, 2016			March 31, 2016			December 31, 2015			September 30, 2015
Construction and Land Development	$	2,301		$	1,604		$	2,156		$	2,113		$	3,142
Commercial Real Estate - Owner Occupied	1,609			1,661			2,816			3,904			3,989
Commercial Real Estate - Non-owner Occupied	—			—			—			100			200
Commercial and Industrial	1,344			263			810			429			403
Residential 1-4 Family	5,279			5,448			5,696			3,563			3,960
HELOC	1,464			1,495			973			1,348			937
Consumer and All Other	680			390			641			479			335
Total	$	12,677		$	10,861		$	13,092		$	11,936		$	12,966
Coverage Ratio	288.25		%	322.94		%	262.75		%	285.25		%	256.59		%

Nonperforming assets at September 30, 2016 also included $10.6 million in OREO, a decrease of $4.7 million, or 30.8%, from December 31, 2015 and a decrease of $11.5 million, or 52.1%, from the prior year. The following table shows the activity in OREO for the quarters ended (dollars in thousands):

	September 30, 2016			June 30, 2016			March 31, 2016			December 31, 2015			September 30, 2015
Beginning Balance	$	13,381		$	14,246		$	15,299		$	22,094		$	22,222
Additions of foreclosed property	246			501			456			234			1,082
Additions of former bank premises	—			—			—			1,822			—
Capitalized improvements	—			—			—			—			9
Valuation adjustments	(479		)	(274		)	(126		)	(4,229		)	(473		)
Proceeds from sales	(2,844		)	(1,086		)	(1,390		)	(4,961		)	(767		)
Gains (losses) from sales	277			(6		)	7			339			21
Ending Balance	$	10,581		$	13,381		$	14,246		$	15,299		$	22,094

During the third quarter of 2016, the majority of sales of OREO were related to land and residential real estate.

The following table presents the composition of the OREO portfolio at the quarter ended (dollars in thousands):

	September 30, 2016		June 30, 2016		March 31, 2016		December 31, 2015		September 30, 2015
Land	$	3,440	$	4,759	$	4,874	$	5,731	$	7,139
Land Development	2,320		2,416		2,616		2,918		6,700
Residential Real Estate	1,806		2,412		2,707		2,601		3,517
Commercial Real Estate	361		489		744		744		1,433
Former Bank Premises (1)	2,654		3,305		3,305		3,305		3,305
Total	$	10,581	$	13,381	$	14,246	$	15,299	$	22,094

(1)Includes closed branch property and land previously held for branch sites.

Past Due Loans

At September 30, 2016, total accruing past due loans were $26.9 million, or 0.44% of total loans, compared to $42.9 million, or 0.76%, at December 31, 2015 and $27.5 million, or 0.50%, a year ago. At September 30, 2016, loans past due 90 days or more and accruing interest totaled $3.5 million, or 0.06% of total loans, compared to $5.8 million, or 0.10%, at December 31, 2015 and $5.2 million, or 0.09%, a year ago.

Charge-offs and delinquencies

For the quarter ended September 30, 2016, net charge-offs were $929,000, or 0.06% of average loans on an annualized basis, compared to $1.0 million, or 0.07%, for the same quarter last year. For the nine months ended September 30, 2016, net charge-

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offs were $4.7 million, or 0.11% on an annualized basis, compared to $6.4 million, or 0.15%, for the same period last year. The decrease in net charge-off levels is attributable to improving asset quality. The majority of net charge-offs in the third quarter of 2016 were related to HELOCs and loans secured by residential 1-4 family property.

Provision

The provision for loan losses for the quarter ended September 30, 2016 was $2.4 million, an increase of $435,000 compared to the same quarter a year ago. This increase in loan loss provision is primarily related to loan growth. The provision for loan losses for the nine months ended September 30, 2016 was $7.2 million, a decrease of $60,000 compared to the nine months ended September 30, 2015. Despite the loan growth that has occurred during the year, the decline in provision for loan losses in the first nine months of 2016 compared to the same period in the prior year was primarily driven by lower charge-off levels and improving asset quality metrics.

Allowance for Loan Losses

The allowance for loan losses of $36.5 million at September 30, 2016, is an increase of $2.5 million compared to the allowance for loan losses at December 31, 2015. The allowance for loan losses as a percentage of the total loan portfolio, unadjusted for acquisition accounting, was 0.59% at September 30, 2016 and 0.60% at both December 31, 2015, and September 30, 2015. The ALL as a percentage of the total loan portfolio, adjusted for acquisition accounting (non-GAAP), was 0.90% at September 30, 2016, a decrease from 0.98% at December 31, 2015 and 1.01% at September 30, 2015. In acquisition accounting, there is no carryover of previously established allowance for loan losses, as acquired loans are recorded at fair value.

The nonaccrual loan coverage ratio was 288.3% at September 30, 2016, compared to 285.3% at December 31, 2015, and 256.6% at September 30, 2015. The current level of the allowance for loan losses reflects specific reserves related to nonperforming loans, current risk ratings on loans, net charge-off activity, loan growth, delinquency trends, and other credit risk factors that the Company considers important in assessing the adequacy of the allowance for loan losses.

The following table summarizes activity in the allowance for loan losses during the quarters ended (dollars in thousands):

	September 30, 2016			June 30, 2016			March 31, 2016			December 31, 2015			September 30, 2015
Balance, beginning of period	$	35,074		$	34,399		$	34,047		$	33,269		$	32,344
Loans charged-off:
Commercial	16			668			617			280			388
Real estate	929			1,299			1,427			1,360			1,480
Consumer	518			318			936			525			468
Total loans charged-off	1,463			2,285			2,980			2,165			2,336
Recoveries:
Commercial	67			117			238			182			559
Real estate	303			281			391			561			565
Consumer	164			262			199			190			175
Total recoveries	534			660			828			933			1,299
Net charge-offs	929			1,625			2,152			1,232			1,037
Provision for loan losses	2,397			2,300			2,504			2,010			1,962
Balance, end of period	$	36,542		$	35,074		$	34,399		$	34,047		$	33,269
Allowance for loan losses to loans	0.59		%	0.59		%	0.60		%	0.60		%	0.60		%
ALL to loans, adjusted for acquisition accounting (Non-GAAP)	0.90		%	0.92		%	0.95		%	0.98		%	1.01		%
Net charge-offs to average loans	0.06		%	0.11		%	0.15		%	0.09		%	0.07		%
Provision to average loans	0.16		%	0.16		%	0.18		%	0.14		%	0.14		%

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The following table shows both an allocation of the allowance for loan losses among loan categories based upon the loan portfolio’s composition and the ratio of the related outstanding loan balances to total loans as of the quarters ended (dollars in thousands):

	September 30, 2016				June 30, 2016				March 31, 2016				December 31, 2015				September 30, 2015
	$		% (1)		$		% (1)		$		% (1)		$		% (1)		$		% (1)
Commercial	$	5,403	8.3	%	$	4,026	7.9	%	$	4,225	7.8	%	$	3,163	7.7	%	$	2,790	7.4	%
Real estate	28,064		81.0	%	28,061		81.6	%	27,576		82.6	%	27,537		83.3	%	26,638		83.7	%
Consumer	3,075		10.7	%	2,987		10.5	%	2,598		9.6	%	3,347		9.0	%	3,841		8.9	%
Total	$	36,542	100.0	%	$	35,074	100.0	%	$	34,399	100.0	%	$	34,047	100.0	%	$	33,269	100.0	%

(1) The percent represents the loan balance divided by total loans.

Deposits

As of September 30, 2016, total deposits were $6.3 billion, an increase of $294.6 million, or 6.6% (annualized), from December 31, 2015. Total interest-bearing deposits consist of NOW, money market, savings, and time deposit account balances. Total time deposit balances of $1.2 billion accounted for 24.6% of total interest-bearing deposits at September 30, 2016.

The following table presents the deposit balances by major categories as of the quarters ended (dollars in thousands):

	September 30, 2016				December 31, 2015
Deposits:	Amount		% of total deposits		Amount		% of total deposits
Non-interest bearing	$	1,442,268	23.0	%	$	1,372,937	23.0	%
NOW accounts	1,635,446		26.3	%	1,521,906		25.5	%
Money market accounts	1,398,177		22.3	%	1,312,612		22.0	%
Savings accounts	596,702		9.5	%	572,800		9.6	%
Time deposits of $100,000 and over	528,227		8.4	%	514,286		8.7	%
Other time deposits	657,686		10.5	%	669,395		11.2	%
Total Deposits	$	6,258,506	100.0	%	$	5,963,936	100.0	%

The Company may also borrow additional funds by purchasing certificates of deposit through a nationally recognized network of financial institutions. The Company utilizes this funding source when rates are more favorable than other funding sources. As of September 30, 2016 and December 31, 2015, the Company did not have purchased certificates of deposit included in certificates of deposit on the Company’s Consolidated Balance Sheets. Maturities of time deposits as of September 30, 2016 are as follows (dollars in thousands):

	Within 3 Months		3 - 12 Months		Over 12 Months		Total
Maturities of time deposits of $100,000 and over	$	62,206	$	139,766	$	326,255	$	528,227
Maturities of other time deposits	88,509		220,744		348,433		657,686
Total time deposits	$	150,715	$	360,510	$	674,688	$	1,185,913

Capital Resources

Capital resources represent funds, earned or obtained, over which financial institutions can exercise greater or longer control in comparison with deposits and borrowed funds. The adequacy of the Company’s capital is reviewed by management on an ongoing basis with reference to size, composition, and quality of the Company’s resources and consistency with regulatory requirements and industry standards. Management seeks to maintain a capital structure that will assure an adequate level of capital to support anticipated asset growth and to absorb potential losses, yet allow management to effectively leverage its capital to maximize return to shareholders.

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In July 2013, the Federal Reserve issued final rules to include technical changes to its market risk capital rules to align them with the Basel III regulatory capital framework and meet certain requirements of the Dodd-Frank Act. Effective January 1, 2015, the final rules require the Company and the Bank to comply with the following minimum capital ratios: (i) a new common equity Tier 1 capital ratio of 4.5% of risk-weighted assets; (ii) a Tier 1 capital ratio of 6.0% of risk-weighted assets (increased from the prior requirement of 4.0%); (iii) a total capital ratio of 8.0% of risk-weighted assets (unchanged from the prior requirement); and (iv) a leverage ratio of 4.0% of total assets (unchanged from the prior requirement). These capital requirements will be phased in over a four-year period. When fully phased in on January 1, 2019, the rules will require the Company and the Bank to maintain (i) a minimum ratio of common equity Tier 1 to risk-weighted assets of at least 4.5%, plus a 2.5% “capital conservation buffer” (which is added to the 4.5% common equity Tier 1 ratio as that buffer is phased in, effectively resulting in a minimum ratio of common equity Tier 1 to risk-weighted assets of at least 7.0% upon full implementation), (ii) a minimum ratio of Tier 1 capital to risk-weighted assets of at least 6.0%, plus the 2.5% capital conservation buffer (which is added to the 6.0% Tier 1 capital ratio as that buffer is phased in, effectively resulting in a minimum Tier 1 capital ratio of 8.5% upon full implementation), (iii) a minimum ratio of total capital to risk-weighted assets of at least 8.0%, plus the 2.5% capital conservation buffer (which is added to the 8.0% total capital ratio as that buffer is phased in, effectively resulting in a minimum total capital ratio of 10.5% upon full implementation), and (iv) a minimum leverage ratio of 4.0%, calculated as the ratio of Tier 1 capital to average assets.

Beginning January 1, 2016, the capital conservation buffer requirement is being phased in at 0.625% of risk-weighted assets, and will increase by the same amount each year until fully implemented at 2.5% on January 1, 2019. The capital conservation buffer is designed to absorb losses during periods of economic stress. Banking institutions with a ratio of common equity Tier 1 to risk-weighted assets above the minimum but below the conservation buffer will face constraints on dividends, equity repurchases, and compensation based on the amount of the shortfall. The table summarizes the Company’s regulatory capital and related ratios for the periods presented (dollars in thousands):

	September 30, 2016			December 31, 2015			September 30, 2015
Common equity Tier 1 capital	$	685,329		$	691,195		$	688,376
Tier 1 capital	775,829			781,695			$	778,876
Tier 2 capital	37,032			34,346			33,666
Total risk-based capital	812,861			816,041			812,542
Risk-weighted assets	7,010,112			6,551,028			6,403,685
Capital ratios:
Common equity Tier 1 capital ratio	9.78		%	10.55		%	10.75		%
Tier 1 capital ratio	11.07		%	11.93		%	12.16		%
Total capital ratio	11.60		%	12.46		%	12.69		%
Leverage ratio (Tier 1 capital to average assets)	9.89		%	10.68		%	10.80		%
Capital conservation buffer ratio (1)	3.60		%	N/A			N/A
Common equity to total assets	12.12		%	12.94		%	13.10		%
Tangible common equity to tangible assets	8.57		%	9.20		%	9.29		%

(1) Calculated by subtracting the regulatory minimum capital ratio requirements from the Company's actual ratio results for Common equity, Tier 1, and Total risk based capital. The lowest of the three measures represents the Company's capital conservation buffer ratio.

NON-GAAP MEASURES

In reporting the Company’s results as of and for the periods ended September 30, 2016 and 2015, the Company has provided supplemental performance measures on a tangible basis. Tangible common equity is used in the calculation of certain capital and per share ratios. The Company believes tangible common equity and the related ratios are meaningful measures of capital adequacy because they provide a meaningful base for period-to-period and company-to-company comparisons, which the Company believes will assist investors in assessing the capital of the Company and its ability to absorb potential losses.

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These measures are a supplement to U.S. GAAP used to prepare the Company’s financial statements and should not be viewed as a substitute for U.S. GAAP measures. In addition, the Company’s non-GAAP measures may not be comparable to non-GAAP measures of other companies.

The following table reconciles these non-GAAP measures from their respective U.S. GAAP basis measures for each of the periods presented (dollars in thousands, except per share amounts):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Tangible Common Equity
Ending equity	$	1,000,964	$	995,012	$	1,000,964	$	995,012
Less: Ending goodwill	298,191		293,522		298,191		293,522
Less: Ending core deposit intangibles	18,001		25,320		18,001		25,320
Less: Ending other amortizable intangibles	4,342		—		4,342		—
Ending tangible common equity (non-GAAP)	$	680,430	$	676,170	$	680,430	$	676,170
Average equity	$	996,668	$	995,463	$	991,097	$	989,749
Less: Average goodwill	297,707		293,522		295,380		293,522
Less: Average core deposit intangibles	18,820		26,323		20,550		28,435
Less: Average other amortizable intangibles	3,833		—		1,699		—
Average tangible common equity (non-GAAP)	$	676,308	$	675,618	$	673,468	$	667,792

The allowance for loan losses ratio, adjusted for acquisition accounting (non-GAAP), includes an adjustment for the fair value mark on acquired performing loans. The acquired performing loans are reported net of the related fair value mark in loans, net of deferred fees and costs, on the Company’s Consolidated Balance Sheets; therefore, the fair value mark is added back to the balance to represent the total loan portfolio. The adjusted allowance for loan losses, including the fair value mark, represents the total reserve on the Company’s loan portfolio. The PCI loans, net of the respective fair value mark, are removed from the loans, net of deferred fees and costs, as these PCI loans are not covered by the allowance established by the Company unless changes in expected cash flows indicate that one of the PCI loan pools is impaired, at which time an allowance for PCI loans will be established. U.S. GAAP requires the acquired allowance for loan losses not be carried over in an acquisition or merger. The Company believes the presentation of the allowance for loan losses ratio, adjusted for acquisition accounting, is useful to investors because the acquired loans were purchased at a market discount with no allowance for loan losses carried over to the Company, and the fair value mark on the purchased performing loans represents the allowance associated with those purchased loans. The Company believes that this measure is a better reflection of the reserves on the Company’s loan portfolio. The following table shows the allowance for loan losses as a percentage of the total loan portfolio, adjusted for acquisition accounting, as of the quarters ended (dollars in thousands):

	September 30, 2016			December 31, 2015			September 30, 2015
Allowance for loan losses	$	36,542		$	34,047		$	33,269
Remaining fair value mark on acquired performing loans	18,154			20,819			21,884
Adjusted allowance for loan losses	$	54,696		$	54,866		$	55,153
Loans, net of deferred fees	$	6,148,918		$	5,671,462		$	5,543,621
Remaining fair value mark on acquired performing loans	18,154			20,819			21,884
Less: PCI loans, net of fair value mark	62,346			73,737			78,606
Adjusted loans, net of deferred fees	$	6,104,726		$	5,618,544		$	5,486,899
Allowance for loan losses ratio	0.59		%	0.60		%	0.60		%
Allowance for loan losses ratio, adjusted for acquisition accounting	0.90		%	0.98		%	1.01		%

ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the risk of loss arising from adverse changes in the fair value of financial instruments due to changes in interest rates, exchange rates, and equity prices. The Company’s market risk is composed primarily of interest rate risk. The ALCO of the Company is responsible for reviewing the interest rate sensitivity position of the Company and establishing policies to monitor and limit exposure to this risk. The Company’s Board of Directors reviews and approves the guidelines established by ALCO.

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Interest rate risk is monitored through the use of three complementary modeling tools: static gap analysis, earnings simulation modeling, and economic value simulation (net present value estimation). Each of these models measures changes in a variety of interest rate scenarios. While each of the interest rate risk models has limitations, taken together they represent a reasonably comprehensive view of the magnitude of interest rate risk in the Company, the distribution of risk along the yield curve, the level of risk through time, and the amount of exposure to changes in certain interest rate relationships. Static gap, which measures aggregate re-pricing values, is less utilized because it does not effectively measure the options risk impact on the Company and is not addressed here. Earnings simulation and economic value models, which more effectively measure the cash flow and optionality impacts, are utilized by management on a regular basis and are explained below.

The Company determines the overall magnitude of interest sensitivity risk and then formulates policies and practices governing asset generation and pricing, funding sources and pricing, and off-balance sheet commitments. These decisions are based on management’s expectations regarding future interest rate movements, the states of the national, regional, and local economies, and other financial and business risk factors. The Company uses simulation modeling to measure and monitor the effect of various interest rate scenarios and business strategies on net interest income. This modeling reflects interest rate changes and the related impact on net interest income and net income over specified time horizons.

EARNINGS SIMULATION ANALYSIS

Management uses simulation analysis to measure the sensitivity of net interest income to changes in interest rates. The model calculates an earnings estimate based on current and projected balances and rates. This method is subject to the accuracy of the assumptions that underlie the process, but it provides a better analysis of the sensitivity of earnings to changes in interest rates than other analyses, such as the static gap analysis discussed above.

Assumptions used in the model are derived from historical trends and management’s outlook and include loan and deposit growth rates and projected yields and rates. Such assumptions are monitored by management and periodically adjusted as appropriate. All maturities, calls, and prepayments in the securities portfolio are assumed to be reinvested in like instruments. Mortgage loans and mortgage-backed securities prepayment assumptions are based on industry estimates of prepayment speeds for portfolios with similar coupon ranges and seasoning. Different interest rate scenarios and yield curves are used to measure the sensitivity of earnings to changing interest rates. Interest rates on different asset and liability accounts move differently when the prime rate changes and are reflected in the different rate scenarios.

The Company uses its simulation model to estimate earnings in rate environments where rates are instantaneously shocked up or down around a “most likely” rate scenario, based on implied forward rates. The analysis assesses the impact on net interest income over a 12 month time horizon after an immediate increase or “shock” in rates, of 100 basis points up to 300 basis points. The shock down 200 or 300 basis points analysis is not as meaningful as interest rates across most of the yield curve are at historic lows and cannot decrease another 200 or 300 basis points. The model, under all scenarios, does not drop the index below zero.

The following table represents the interest rate sensitivity on net interest income for the Company across the rate paths modeled for balances as of September 30, 2016 and 2015 (dollars in thousands):

	Change In Net Interest Income September 30,
	2016				2015
	%		$		%		$
Change in Yield Curve:
+300 basis points	11.25		31,821		6.03		16,192
+200 basis points	7.65		21,636		4.07		10,933
+100 basis points	3.91		11,051		1.72		4,611
Most likely rate scenario	—		—		—		—
-100 basis points	(3.30	)	(9,338	)	(1.72	)	(4,626	)
-200 basis points	(4.66	)	(13,197	)	(3.85	)	(10,334	)
-300 basis points	(4.76	)	(13,464	)	(4.03	)	(10,824	)

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Asset sensitivity indicates that in a rising interest rate environment the Company’s net interest income would increase and in a decreasing interest rate environment the Company’s net interest income would decrease. Liability sensitivity indicates that in a rising interest rate environment the Company’s net interest income would decrease and in a decreasing interest rate environment the Company’s net interest income would increase.

As of September 30, 2016, the Company became more asset sensitive in a rising interest rate environment scenario when compared to September 30, 2015 in part due to the composition of the balance sheet and in part due to the market characteristics of certain deposit products. The Company would expect net interest income to increase with an immediate increase or shock in market rates. In the decreasing interest rate environments, the Company would expect a decline in net interest income as interest-earning assets re-price at lower rates and interest-bearing deposits remain at or near their floors. It should be noted that although net interest income simulation results are presented through the down 300 basis points interest rate environments, the Company does not believe the down 200 and 300 basis point scenarios are plausible given the current level of interest rates.

ECONOMIC VALUE SIMULATION

Economic value simulation is used to calculate the estimated fair value of assets and liabilities over different interest rate environments. Economic values are calculated based on discounted cash flow analysis. The net economic value of equity is the economic value of all assets minus the economic value of all liabilities. The change in net economic value over different rate environments is an indication of the longer-term earnings capability of the balance sheet. The same assumptions are used in the economic value simulation as in the earnings simulation. The economic value simulation uses instantaneous rate shocks to the balance sheet.

The following chart reflects the estimated change in net economic value over different rate environments using economic value simulation for the balances at the quarterly periods ended September 30, 2016 and 2015 (dollars in thousands):

	Change In Economic Value of Equity September 30,
	2016				2015
	%		$		%		$
Change in Yield Curve:
+300 basis points	2.67		35,364		(0.41	)	(5,407	)
+200 basis points	2.65		35,109		0.68		9,006
+100 basis points	1.85		24,533		1.00		13,244
Most likely rate scenario	—		—
-100 basis points	(4.68	)	(61,889	)	(3.54	)	(47,052	)
-200 basis points	(8.92	)	(117,988	)	(8.94	)	(118,937	)
-300 basis points	(5.86	)	(77,480	)	(9.30	)	(123,658	)

The shock down 200 or 300 basis points analysis is not as meaningful since interest rates across most of the yield curve are at historic lows and cannot decrease another 200 or 300 basis points.  While management considers this scenario highly unlikely, the natural floor increases the Company’s sensitivity in rates down scenarios. 

Compared to September 30, 2015, the Company’s economic value of equity model as of September 30, 2016 projects that an instantaneous change in market interest rates would result in more overall variation in the Company’s estimated economic value of equity in the shock up 100, 200 or 300 basis point and shock down 100 basis point interest rate scenarios, while the Company islesssensitive to market interest rates in a shock down 200 and 300 basis point scenario. The Company believes the down 200 and 300 basis point scenarios are not plausible given the current low level of interest rates.

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ITEM 4 – CONTROLS AND PROCEDURES

The Company maintains “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed in reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating its disclosure controls and procedures, management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable assurance that the objectives of the disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, management was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Based on their evaluation as of the end of the period covered by this quarterly report on Form 10-Q, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the disclosure controls and procedures were effective at the reasonable assurance level. There was no change in the internal control over financial reporting that occurred during the quarter ended September 30, 2016 that has materially affected, or is reasonably likely to materially affect, the internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1 – LEGAL PROCEEDINGS

In the ordinary course of its operations, the Company and its subsidiaries are parties to various legal proceedings. Based on the information presently available, and after consultation with legal counsel, management believes that the ultimate outcome in such proceedings, in the aggregate, will not have a material adverse effect on the business or the financial condition or results of operations of the Company.

ITEM 1A – RISK FACTORS

There have been no material changes with respect to the risk factors disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015.

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

(a) Sales of Unregistered Securities – None.

(b) Use of Proceeds – Not Applicable.

(c) Issuer Purchases of Securities

Stock Repurchase Program

The following information describes the Company’s common stock repurchases for the nine months ended September 30, 2016:

Period	Total number of shares purchased (1)	Average price paid per share ($)	Approximate value of shares that may be purchased under the plan ($)
December 31, 2015			21,139,000
January 1 - January 31, 2016	380,882	23.70	12,114,000
February 1 - February 29, 2016	553,566	21.99	24,942,000
March 1 - March 31, 2016	106,164	23.55	22,442,000
April 1 - April 30, 2016	102,144	24.48	19,942,000
May 1 - May 31, 2016	82,800	26.24	17,769,000
June 1 - June 30, 2016	87,000	26.21	15,489,000
July 1 - July 31, 2016	98,575	25.22	13,003,000
August 1 - August 31, 2016	—	—	13,003,000
September 1 - September 30, 2016	—	—	13,003,000
Total	1,411,131	23.48

(1)On October 29, 2015, the Company’s Board of Directors authorized a share repurchase program to purchase up to $25.0 million worth of the Company’s common stock on the open market or in privately negotiated transactions. The repurchase program was authorized through December 31, 2016, and completed in February 2016. On February 25, 2016, the Company’s Board of Directors authorized a new share repurchase program to purchase up to $25.0 million worth of the Company’s common stock on the open market or in privately negotiated transactions. The repurchase program is authorized through December 31, 2016.

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ITEM 6 – EXHIBITS

The following exhibits are filed as part of this Form 10-Q and this list includes the Exhibit Index:

Exhibit No.	Description
10.1	Employment Agreement, dated August 23, 2016, by and between Union Bankshares Corporation and John C. Asbury (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on August 24, 2016).
10.2	Management Continuity Agreement, dated August 23, 2016, by and between Union Bankshares Corporation and John C. Asbury (incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K on August 24, 2016).
10.3	Transition Agreement, dated August 23, 2016, by and between Union Bankshares Corporation and G. William Beale (incorporated by reference to Exhibit 10.3 to Current Report on Form 8-K filed on August 24, 2016).
15.01	Letter regarding unaudited interim financial information.
31.01	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.02	Certification of Principal Financial and Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.01	Certification of Principal Executive Officer and Principal Financial and Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.00	Interactive data files formatted in eXtensible Business Reporting Language for the quarter ended September 30, 2016 pursuant to Rule 405 of Regulation S-T (1): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Changes in Shareholders’ Equity, (v) the Consolidated Statements of Cash Flows and (vi) the Notes to the Consolidated Financial Statements.

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SIGNATURES

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

	Union Bankshares Corporation
	(Registrant)
Date: November 3, 2016	By:	/s/ G. William Beale
		G. William Beale,
		Chief Executive Officer
		(principal executive officer)
Date: November 3, 2016	By:	/s/ Robert M. Gorman
		Robert M. Gorman,
		Executive Vice President and Chief Financial Officer
		(principal financial and accounting officer)

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EX-15.01

Exhibit 15.01

The Shareholders and Board of Directors of Union Bankshares Corporation

We are aware of the incorporation by reference in the Registration Statements (Form S-3 No. 333-198710, Form S-3 No. 333-175807, Form S-3 No. 333-166520, Form S-3 No. 333-165874, Form S-3 No. 333-161860, Form S-3 No. 333-156946, Form S-3 No. 333-154730, Form S-3 No. 333-144481, Form S-3 No. 033-78060, Form S-3 No. 333-102012, Form S-3 No. 333-81199, Form S-8 No. 333-203580, Form S-8 No. 333-193364, Form S-8 No. 333-175808, Form S-8 No. 333-113842 and Form S-8 No. 333-113839) of Union Bankshares Corporation of our report dated November 3, 2016 relating to the unaudited consolidated interim financial statements of Union Bankshares Corporation that are included in its Form 10-Q for the quarter ended September 30, 2016.

Under Rule 436(c) of the 1933 Act, our report is not a part of the registration statement prepared or certified by accountants within the meaning of Section 7 or 11 of the 1933 Act.

/s/ Ernst & Young LLP

Richmond, Virginia

November 3, 2016

EX-31.01

Exhibit 31.01

CERTIFICATIONS

I, G. William Beale, certify that:

1. I have reviewed this report on Form 10-Q of Union Bankshares Corporation;

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

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

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

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

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

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

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

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

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

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

Date: November 3, 2016

/s/ G. William Beale

G. William Beale,

Chief Executive Officer

EX-31.02

Exhibit 31.02

CERTIFICATIONS

I, Robert M. Gorman, certify that:

1. I have reviewed this report on Form 10-Q of Union Bankshares Corporation;

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

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

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

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

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

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

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

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

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

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

Date: November 3, 2016

/s/ Robert M. Gorman

Robert M. Gorman,

Executive Vice President and Chief Financial Officer

EX-32.01

Exhibit 32.01

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 Union Bankshares Corporation (the “Company”) on Form 10-Q for the period ending September 30, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned Chief Executive Officer and Chief Financial Officer of the Company hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002 that based on their knowledge and belief: 1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and 2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the periods covered in the Report.

/s/ G. William Beale

G. William Beale, Chief Executive Officer

/s/ Robert M. Gorman

Robert M. Gorman, Executive Vice President and Chief Financial Officer

November 3, 2016

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

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Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Oct. 31, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	Union Bankshares Corp
Entity Central Index Key	0000883948
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Amendment Flag	false
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		43,558,217

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CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Cash and cash equivalents:
Cash and due from banks	$ 103,979	$ 111,323
Interest-bearing deposits in other banks	51,303	29,670
Federal funds sold	893	1,667
Total cash and cash equivalents	156,175	142,660
Securities available for sale, at fair value	954,984	903,292
Securities held to maturity, at carrying value	200,839	205,374
Restricted stock, at cost	63,204	51,828
Loans held for sale	46,814	36,030
Loans held for investment, net of deferred fees and costs	6,148,918	5,671,462
Less allowance for loan losses	36,542	34,047
Net loans held for investment	6,112,376	5,637,415
Premises and equipment, net	123,416	126,028
Other real estate owned, net of valuation allowance	10,581	15,299
Goodwill	298,191	293,522
Core deposit intangibles, net	18,001	23,310
Other amortizable intangibles, net	4,342	0
Bank owned life insurance	177,847	173,687
Other assets	91,460	84,846
Total assets	8,258,230	7,693,291
LIABILITIES
Noninterest-bearing demand deposits	1,442,268	1,372,937
Interest-bearing deposits	4,816,238	4,590,999
Total deposits	6,258,506	5,963,936
Securities sold under agreements to repurchase	64,225	84,977
Other short-term borrowings	601,500	304,000
Long-term borrowings	259,902	291,198
Other liabilities	73,133	53,813
Total liabilities	7,257,266	6,697,924
Commitments and contingencies
STOCKHOLDERS' EQUITY
Common stock, $1.33 par value, shares authorized 100,000,000; issued and outstanding, 43,556,486 shares and 44,785,674 shares, respectively.	57,444	59,159
Additional paid-in capital	603,785	631,822
Retained earnings	329,876	298,134
Accumulated other comprehensive income	9,859	6,252
Total stockholders' equity	1,000,964	995,367
Total liabilities and stockholders' equity	$ 8,258,230	$ 7,693,291

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CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Common stock, par value (in usd per share)	$ 1.33	$ 1.33
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	43,556,486	44,785,674
Common stock, shares outstanding (in shares)	43,556,486	44,785,674

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CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Interest and dividend income:
Interest and fees on loans	$ 66,190	$ 62,651	$ 193,884	$ 185,706
Interest on deposits in other banks	65	23	178	65
Interest and dividends on securities:
Taxable	4,732	3,954	13,558	11,621
Nontaxable	3,446	3,372	10,344	10,062
Total interest and dividend income	74,433	70,000	217,964	207,454
Interest expense:
Interest on deposits	4,552	4,204	12,945	11,204
Interest on federal funds purchased	2	1	5	6
Interest on short-term borrowings	763	223	2,093	728
Interest on long-term borrowings	2,088	2,128	6,386	6,287
Total interest expense	7,405	6,556	21,429	18,225
Net interest income	67,028	63,444	196,535	189,229
Provision for credit losses	2,472	2,062	7,376	7,561
Net interest income after provision for credit losses	64,556	61,382	189,159	181,668
Noninterest income:
Service charges on deposit accounts	4,965	4,965	14,454	13,800
Other service charges and fees	4,397	3,983	12,971	11,618
Fiduciary and asset management fees	2,844	2,304	7,315	6,835
Mortgage banking income, net	3,207	2,630	8,324	7,582
Gains on securities transactions, net	0	75	145	672
Other-than-temporary impairment losses	0	(300)	0	(300)
Bank owned life insurance income	1,389	1,161	4,122	3,431
Other operating income	2,148	1,907	5,526	4,352
Total noninterest income	18,950	16,725	52,857	47,990
Noninterest expenses:
Salaries and benefits	30,493	25,853	87,061	78,905
Occupancy expenses	4,841	4,915	14,627	15,220
Furniture and equipment expenses	2,635	3,015	7,867	8,818
Printing, postage, and supplies	1,147	1,191	3,566	3,970
Communications expense	948	1,159	2,964	3,481
Technology and data processing	3,917	3,549	11,340	10,020
Professional services	1,895	1,991	6,432	5,008
Marketing and advertising expense	1,975	1,781	5,838	5,841
FDIC assessment premiums and other insurance	1,262	1,351	4,003	4,030
Other taxes	639	1,569	3,864	4,674
Loan-related expenses	1,531	1,341	3,638	3,173
OREO and credit-related expenses	503	1,263	1,965	4,415
Amortization of intangible assets	1,843	2,074	5,468	6,435
Training and other personnel costs	863	1,198	2,512	2,831
Other expenses	2,421	1,075	5,291	5,584
Total noninterest expenses	56,913	53,325	166,436	162,405
Income before income taxes	26,593	24,782	75,580	67,253
Income tax expense	6,192	6,566	18,881	17,989
Net income (loss)	$ 20,401	$ 18,216	$ 56,699	$ 49,264
Basic earnings per common share (in usd per share)	$ 0.47	$ 0.40	$ 1.29	$ 1.09
Diluted earnings per common share (in usd per share)	0.47	0.40	1.29	1.09
Dividends declared per common share (in usd per share)	$ 0.19	$ 0.17	$ 0.57	$ 0.49
Basic weighted average number of common shares outstanding (in shares)	43,565,937	45,087,409	43,853,548	45,107,290
Diluted weighted average number of common shares outstanding (in shares)	43,754,915	45,171,610	43,967,725	45,189,578

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Statement of Comprehensive Income [Abstract]
Net income	$ 20,401	$ 18,216	$ 56,699	$ 49,264
Cash flow hedges:
Change in fair value of cash flow hedges	(78)	(2,328)	(3,766)	(2,009)
Reclassification adjustment for losses (gains) included in net income (net of tax, $83 and $84 for the three months and $233 and $253 for the nine months ended September 30, 2016 and 2015, respectively)	154	157	433	470
AFS securities:
Unrealized holding gains (losses) arising during period (net of tax, $604 and $673 for the three months and $4,227 and $976 for the nine months ended September 30, 2016 and 2015, respectively)	1,121	1,250	7,851	(1,812)
Reclassification adjustment for losses (gains) included in net income (net of tax, $0 and $79 for the three months and $51 and $130 for the nine months ended September 30, 2016 and 2015, respectively)	0	146	(95)	(242)
HTM securities:
Accretion of unrealized gain for AFS securities transferred to HTM (net of tax, $128 and $166 for the three months and $439 and $278 for the nine months ended September 30, 2016 and 2015, respectively)	(237)	(308)	(816)	(516)
Net current period other comprehensive income (loss)	960	(1,083)	3,607	(4,109)
Comprehensive income	$ 21,361	$ 17,133	$ 60,306	$ 45,155

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Statement of Comprehensive Income [Abstract]
Tax expense (benefit) related to reclassification adjustment for losses included in net income	$ (83)	$ (84)	$ (233)	$ (253)
Tax expense (benefit) related to unrealized holding (losses) gains arising during period	604	673	4,227	(976)
Tax expense (benefit) related to (gains) losses on the sale of securities	0	(79)	51	130
Tax expense (benefit) related to (gains) losses for AFS securities transferred to HTM	$ (128)	$ (166)	$ (439)	$ (278)

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)
Beginning balance at Dec. 31, 2014	$ 977,169	$ 59,795	$ 643,443	$ 261,676	$ 12,255
Net income	49,264			49,264
Other comprehensive income, (net of taxes)	(4,109)				(4,109)
Issuance of common stock in regard to acquisition	0
Dividends on common stock	(21,000)			(21,000)
Stock purchased under stock repurchase plan	(7,995)	(460)	(7,535)
Issuance of common stock under Dividend Reinvestment Plan	0	69	1,030	(1,099)
Issuance of common stock under Equity Compensation Plans	566	49	517
Issuance of common stock for services rendered	446	26	420
Vesting of restricted stock, including tax effects, under Equity Compensation Plans	(286)	35	(321)
Stock-based compensation expense	957		957
Ending balance at Sep. 30, 2015	995,012	59,514	638,511	288,841	8,146
Beginning balance at Jun. 30, 2015					9,229
Net income	18,216
Other comprehensive income, (net of taxes)	(1,083)
Ending balance at Sep. 30, 2015	995,012	59,514	638,511	288,841	8,146
Beginning balance at Dec. 31, 2015	995,367	59,159	631,822	298,134	6,252
Net income	56,699			56,699
Other comprehensive income, (net of taxes)	3,607				3,607
Issuance of common stock in regard to acquisition	453	23	430
Dividends on common stock	(24,957)			(24,957)
Stock purchased under stock repurchase plan	(33,176)	(1,876)	(31,300)
Issuance of common stock under Equity Compensation Plans	753	72	681
Issuance of common stock for services rendered	379	19	360
Vesting of restricted stock, including tax effects, under Equity Compensation Plans	(445)	47	(492)
Stock-based compensation expense	2,284		2,284
Ending balance at Sep. 30, 2016	1,000,964	57,444	603,785	329,876	9,859
Beginning balance at Jun. 30, 2016					8,899
Net income	20,401
Other comprehensive income, (net of taxes)	960
Ending balance at Sep. 30, 2016	$ 1,000,964	$ 57,444	$ 603,785	$ 329,876	$ 9,859

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Statement of Stockholders' Equity [Abstract]
Other comprehensive income (loss), tax	$ 3,970	$ 1,130
Issuance of common stock, acquisition, shares	17,232
Dividends on common stock, per share (in usd per share)	$ 0.57	$ 0.49
Stock purchased under stock repurchase plan, shares	1,411,131	347,021
Issuance of common stock under Dividend Reinvestment Plans, shares		52,201
Issuance of common stock under Equity Compensation Plan , shares	54,044	37,124
Issuance of common stock for services rendered, shares	14,576	19,417
Vesting of restricted stock under Equity Compensation Plans, shares	35,515	26,576

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Operating activities:
Net income	$ 56,699	$ 49,264
Adjustments to reconcile net income to net cash and cash equivalents provided by (used in) operating activities:
Depreciation of premises and equipment	7,617	8,097
Writedown of OREO	879	1,773
Other-than-temporary impairment recognized in earnings	0	300
Amortization, net	8,837	10,080
Amortization (accretion) related to acquisition, net	1,400	1,175
Provision for credit losses	7,376	7,561
Losses (gains) on securities transactions, net	(145)	(672)
Bank owned life insurance income	(4,122)	(3,431)
Decrease (increase) in loans held for sale, net	(10,784)	3,206
Losses (gains) on sales of other real estate owned, net	(278)	80
Losses (gains) on sales of premises, net	97	98
Stock-based compensation expenses	2,284	957
Issuance of common stock for services	379	446
Net decrease (increase) in other assets	(11,169)	(461)
Net increase (decrease) in other liabilities	11,005	691
Net cash and cash equivalents provided by (used in) operating activities	70,075	79,164
Investing activities:
Purchases of securities available for sale	(159,863)	(171,203)
Proceeds from sales of securities available for sale	18,272	63,928
Proceeds from maturities, calls and paydowns of securities available for sale	83,942	110,132
Proceeds from maturities, calls and paydowns of securities held to maturity	1,841	795
Net decrease (increase) in loans held for investment	(479,346)	(228,839)
Net decrease (increase) in premises and equipment	(5,102)	(2,541)
Proceeds from sales of other real estate owned	4,982	6,374
Improvements to other real estate owned	0	(308)
Cash paid for equity-method investments	0	(355)
Cash paid in acquisition	(4,077)	0
Cash acquired in acquisitions	207	0
Net cash and cash equivalents provided by (used in) investing activities	(539,144)	(222,017)
Financing activities:
Net increase (decrease) in noninterest-bearing deposits	69,331	138,667
Net increase (decrease) in interest-bearing deposits	225,239	43,259
Net increase (decrease) in short-term borrowings	276,748	44,024
Net increase (decrease) in long-term borrowings	(30,909)	(8,448)
Cash dividends paid - common stock	(24,957)	(21,000)
Repurchase of common stock	(33,176)	(7,995)
Issuance of common stock	753	566
Vesting of restricted stock, including tax effects	(445)	(286)
Net cash and cash equivalents provided by (used in) financing activities	482,584	188,787
Increase (decrease) in cash and cash equivalents	13,515	45,934
Cash and cash equivalents at beginning of the period	142,660	133,260
Cash and cash equivalents at end of the period	156,175	179,194
Cash payments for:
Interest	21,812	20,720
Income taxes	19,800	13,800
Supplemental schedule of noncash investing and financing activities
Unrealized (losses) gains on securities available for sale	11,932	(3,160)
Transfer from securities available for sale to securities held to maturity	0	201,822
Transfer from loans held for investment to loans held for sale	0	26,400
Changes in fair value of interest rate swap loss	(3,333)	(1,539)
Transfers between loans and other real estate owned	865	1,493
Transfers from bank premises to other real estate owned	0	402
Issuance of common stock in exchange for net assets in acquisition	$ 453	$ 0

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ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2016

Accounting Policies [Abstract]

ACCOUNTING POLICIES

ACCOUNTING POLICIES

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Significant inter-company accounts and transactions have been eliminated in consolidation.

The unaudited consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and follow general practice within the banking industry. Accordingly, the unaudited consolidated financial statements do not include all the information and footnotes required by U.S. GAAP for complete financial statements; however, in the opinion of management, all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of the results of the interim periods presented have been made. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the full year.

These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2015 Annual Report on Form 10-K. Certain prior period amounts have been reclassified to conform to current period presentation.

Business Combinations

On May 31, 2016, the Bank completed its acquisition of ODCM, a Charlottesville, Virginia based registered investment advisor with nearly $300.0 million in assets under management at the time of the acquisition. The acquisition date fair value of consideration transferred totaled $9.1 million, which consisted of $4.1 million in cash, $453,000 in stock, and the remainder being contingent on achieving certain performance metrics. The contingent consideration is carried at fair value and is reported as a component of “Other Liabilities” in the Consolidated Balance Sheet. The fair value of this liability will be assessed at each reporting period. 

In connection with the transaction, the Company recorded $4.7 million in goodwill and $4.5 million of amortizable assets, which primarily relate to the value of customer relationships. The Company is amortizing these intangibles assets over the period of expected benefit, which ranges from 5 to 10 years using a straight-line method. The transaction was accounted for using the acquisition method of accounting and, accordingly, assets acquired, liabilities assumed, and consideration exchanged were recorded at estimated fair values on the acquisition date. During the current quarter, the Company finalized the valuation of certain amortizable intangible assets which increased the fair value and also impacting the recognized goodwill. The fair values are subject to refinement for up to one year after the closing date of the acquisition.

Loans

The Company originates commercial and consumer loans to customers. A substantial portion of the loan portfolio is represented by commercial and residential real estate loans (including acquisition and development loans and residential construction loans) throughout its market area. The ability of the Company’s debtors to honor their contracts on such loans is dependent upon the real estate and general economic conditions in those markets, as well as other factors.

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off generally are reported at their outstanding unpaid principal balances adjusted for any charge-offs, the allowance for loan losses, and any deferred fees or costs on originated loans. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized as an adjustment of the related loan yield using the interest method.

As of January 1, 2016, the Company enhanced the loan portfolio segmentation to better align with how the Company manages credit risk and to better align with industry practice. Below is a summary of the new loan segmentation.

Construction and Land Development – construction loans generally made to commercial and residential builders for specific construction projects. The successful repayment of these types of loans is generally dependent upon (a) a commitment for permanent financing from the Company, or (b) from the sale of the constructed property. These loans carry more risk than both types of commercial real estate term loans due to the dynamics of construction projects, changes in interest rates, the long-term financing market, and state and local government regulations. As in commercial real estate term lending, the Company manages risk by using specific underwriting policies and procedures for these types of loans and by avoiding excessive concentrations to any one business or industry.

Also, included in this category are loans generally made to residential home builders to support their lot and home inventory needs. Repayment relies upon the successful performance of the underlying residential real estate project. This type of lending carries a higher level of risk as compared to other commercial lending. This class of lending manages risks related to residential real estate market conditions, a functioning first and secondary market in which to sell residential properties, and the borrower’s ability to manage inventory and run projects. The Company manages this risk by lending to experienced builders and developers by using specific underwriting policies and procedures for these types of loans and by avoiding excessive concentrations with any particular customer or geographic region.

Commercial Real Estate – Owner Occupied - term loans made to support owner occupied real estate properties that rely upon the successful operation of the business occupying the property for repayment. General market conditions and economic activity may affect these types of loans. In addition to using specific underwriting policies and procedures for these types of loans, the Company manages risk by avoiding concentrations to any one business or industry.

Commercial Real Estate – Non-Owner Occupied - term loans typically made to borrowers to support income producing properties that rely upon the successful operation of the property for repayment. General market conditions and economic activity may impact the performance of these types of loans. In addition to using specific underwriting policies and procedures for these types of loans, the Company manages risk by diversifying the lending to various lines of businesses, such as retail, office, office warehouse, and hotel as well as avoiding concentrations to any one business or industry.

Residential 1-4 Family – loans generally made to both commercial and residential borrowers. Mortgage loan portfolios carry risks associated with the creditworthiness of the borrower or the tenant and changes in loan-to-value ratios. The Company manages these risks through policies and procedures such as limiting loan-to-value ratios at origination, experienced underwriting, requiring standards for appraisers, and not making subprime loans.

Multifamily Real Estate – loans made to real estate investors to support permanent financing for multifamily residential income producing properties that rely on the successful operation of the property for repayment. This management mainly involves property maintenance and collection of rents due from tenants. This type of lending carries a lower level of risk as compared to other commercial lending. In addition, underwriting requirements for multifamily properties are stricter than for other non-owner-occupied property types. The Company manages this risk by avoiding concentrations with any particular customer.

Commercial and Industrial – loans generally made to support the Company’s borrowers’ need for equipment/vehicle purchases and short-term or seasonal cash flow needs. Repayment relies upon the successful operation of the business. This type of lending carries a lower level of commercial credit risk as compared to other commercial lending. The Company manages this risk by using general underwriting policies and procedures for these types of loans and by avoiding concentrations to any one business or industry.

HELOC – the consumer HELOC portfolio carries risks associated with the creditworthiness of the borrower and changes in loan-to-value ratios. The Company manages these risks through policies and procedures such as limiting loan-to-value ratios at origination, experienced underwriting, requiring standards for appraisers, and not making subprime loans.

Auto – the consumer indirect auto lending portfolio generally carries certain risks associated with the values of the collateral that management must mitigate. The Company focuses its indirect auto lending on one to two year old used vehicles where substantial depreciation has already occurred thereby minimizing the risk of significant loss of collateral values in the future. This type of lending places reliance on computer-based loan approval systems to supplement other underwriting standards.

Consumer and all other - portfolios carry risks associated with the creditworthiness of the borrower and changes in the economic environment. The Company manages these risks through policies and procedures such as experienced underwriting, maximum debt to income ratios, and minimum borrower credit scores. Also included in this category are loans that generally support small business lines of credit and agricultural lending neither of which are a material source of business for the Company.

Affordable Housing Entities

The Company invests in private investment funds that make equity investments in multifamily affordable housing properties that provide affordable housing tax credits for these investments. The activities of these entities are financed with a combination of invested equity capital and debt. For the three and nine months ended September 30, 2016, the Company recognized amortization of $185,000 and $445,000, respectively, and tax credits of $265,000 and $685,000, respectively, associated with these investments within “Income tax expense” on the Company’s Consolidated Statements of Income. For the three and nine months ended September 30, 2015, the Company recognized amortization of $118,000 and $397,000, respectively, and tax credits of $213,000 and $641,000, respectively. The carrying value of the Company’s investments in these qualified affordable housing projects was $8.0 million and $8.5 million as of September 30, 2016 and December 31, 2015, respectively. The Company recorded a liability of $5.3 million for the related unfunded commitments as of September 30, 2016, which are expected to be paid from 2016 to 2019.

Adoption of New Accounting Standards

In February 2015, the FASB issued revised guidance to simplify the consolidation assessment required to evaluate whether organizations should consolidate certain legal entities such as limited partnerships, limited liability corporations, and securitization structures. The guidance also removed the indefinite deferral of specialized guidance for certain investment funds. The Company adopted ASU No. 2015-02, “Amendments to the Consolidation Analysis” during the first quarter of 2016. The adoption of ASU 2015-02 did not have a material impact on the Company’s consolidated financial statements.

Recent Accounting Pronouncements

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

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” This ASU requires lessees to put most leases on their balance sheets, but recognize expenses in the income statement in a manner similar to today’s accounting. The guidance also eliminates the real estate-specific provisions and changes the guidance on sale-leaseback transactions, initial direct costs, and lease executory costs for all entities. For lessors, the standard modifies the classification criteria and the accounting for sales-type and direct financing leases. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The Company is currently assessing the impact ASU 2016-02 will have on its consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-05, “Derivatives and Hedging (Topic 815): Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships.” This ASU clarifies that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument in an existing hedging relationship would not, in and of itself, be considered a termination of the derivative instrument or a change in a critical term of the hedging relationship. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. The Company does not expect the adoption of ASU 2016-05 to have a material impact on its consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-06, “Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments.” This ASU clarifies that in assessing whether an embedded contingent put or call option is clearly and closely related to the debt host, an entity is required to perform only the four-step decision sequence in ASC 815-15-25-42 (as amended by the ASU). The entity does not have to separately assess whether the event that triggers its ability to exercise the contingent option is itself indexed only to interest rates or credit risk. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. The Company has concluded the adoption of ASU 2016-06 will not have a material impact on its consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-07, “Investments – Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting.” This ASU simplifies the equity method of accounting by eliminating the requirement to retrospectively apply the equity method to an investment that subsequently qualifies for such accounting as a result of an increase in the level of ownership interest or degree of influence. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. The amendments should be applied prospectively and early adoption is permitted. The Company has concluded the adoption of ASU 2016-07 will not have a material impact on its consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net).” This ASU amends the principal-versus-agent implementation guidance and illustrations in the FASB’s new revenue standard (ASU 2014-09) and clarifies that an entity should evaluate whether it is the principal or the agent for each specified good or service promised in a contract with a customer. The ASU has the same effective date as the new revenue standard (as amended by the one-year deferral and the early adoption provisions in ASU 2015-14 delaying the effective date to fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017). In addition, entities are required to adopt the ASU by using the same transition method they used to adopt the new revenue standard. The Company is currently assessing the impact ASU 2016-08 will have on its consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-09, “Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” This ASU simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted; however, if the Company elects to early adopt, then all amendments must be adopted in the same period. The Company has concluded the adoption of ASU 2016-07 will not have a material impact on its consolidated financial statements.

In April 2016, the FASB issued ASU No. 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing.” This ASU amends certain aspects of the FASB’s new revenue standard, specifically the standard’s guidance on identifying performance obligations and the implementation guidance on licensing. The amendments in this update affect the guidance in ASU 2014-09, Revenue from Contracts with Customers, which is not yet effective. The ASU has the same effective date as the new revenue standard (as amended by the one-year deferral and the early adoption provisions in ASU 2015-14). The Company is currently assessing the impact ASU 2016-10 will have on its consolidated financial statements.

In May 2016, the FASB issued ASU No. 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients.”This ASU amends certain aspects of the FASB's new revenue standard to reduce the potential for diversity in practice at the initial application of Topic 606 by entities with transactions that fall into the scope of this guidance, as well as reducing the cost and complexity of applying Topic 606 at the transition date and on a continual basis. The amendment affects ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), that is not yet effective. The Company is currently assessing the impact ASU 2016-12 will have on its consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.”This ASU updates the existing guidance to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The amendment replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and required consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendment is effective for fiscal years beginning after December 15, 2019. The Company is currently assessing the impact ASU 2016-13 will have on its consolidated financial statements.

In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Payments (a consensus of Merging Issues Task Force)." This ASUattempts to clarify how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The purpose of this update is to reduce existing diversity in practice in eight areas addressed by the update. The amendment will be effective for the Company for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted. The Company has concluded the adoption of ASU 2016-15 will not have a material impact on its consolidated financial statements.

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SECURITIES

9 Months Ended

Sep. 30, 2016

Investments, Debt and Equity Securities [Abstract]

SECURITIES

SECURITIES

Available for Sale

The amortized cost, gross unrealized gains and losses, and estimated fair values of securities available for sale as of September 30, 2016 and December 31, 2015 are summarized as follows (dollars in thousands):

	Amortized		Gross Unrealized					Estimated
	Cost		Gains		(Losses)			Fair Value
September 30, 2016
Obligations of states and political subdivisions	$	266,291	$	13,147	$	(215	)	$	279,223
Corporate bonds	122,130		1,196		(1,579		)	121,747
Mortgage-backed securities	529,228		11,877		(509		)	540,596
Other securities	13,385		33		—			13,418
Total available for sale securities	$	931,034	$	26,253	$	(2,303	)	$	954,984
December 31, 2015
Obligations of states and political subdivisions	$	257,740	$	10,479	$	(140	)	$	268,079
Corporate bonds	77,628		55		(1,704		)	75,979
Mortgage-backed securities	544,823		6,127		(2,779		)	548,171
Other securities	11,085		—		(22		)	11,063
Total available for sale securities	$	891,276	$	16,661	$	(4,645	)	$	903,292

The following table shows the gross unrealized losses and fair value (in thousands) of the Company’s available for sale investments with unrealized losses that are not deemed to be other-than-temporarily impaired as of September 30, 2016 and December 31, 2015. These are aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position.

	Less than 12 months					More than 12 months					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
September 30, 2016
Obligations of states and political subdivisions	$	11,640	$	(209	)	$	655	$	(6	)	$	12,295	$	(215	)
Mortgage-backed securities	37,739		(156		)	43,430		(353		)	81,169		(509		)
Corporate bonds and other securities	5,059		(16		)	41,000		(1,563		)	46,059		(1,579		)
Total available for sale	$	54,438	$	(381	)	$	85,085	$	(1,922	)	$	139,523	$	(2,303	)
December 31, 2015
Obligations of states and political subdivisions	$	8,114	$	(70	)	$	4,950	$	(70	)	$	13,064	$	(140	)
Mortgage-backed securities	287,113		(2,442		)	21,660		(337		)	308,773		(2,779		)
Corporate bonds and other securities	36,157		(751		)	19,558		(975		)	55,715		(1,726		)
Total available for sale	$	331,384	$	(3,263	)	$	46,168	$	(1,382	)	$	377,552	$	(4,645	)

As of September 30, 2016, there were $85.1 million, or 28 issues, of individual available for sale securities that had been in a continuous loss position for more than 12 months. These securities had an unrealized loss of $1.9 million and consisted of municipal obligations, mortgage-backed securities, and corporate bonds. As of December 31, 2015, there were $46.2 million, or 20 issues, of individual securities that had been in a continuous loss position for more than 12 months. These securities had an unrealized loss of $1.4 million and consisted of municipal obligations, mortgage-backed securities, corporate bonds, and other securities. The Company has determined that these securities are temporarily impaired as of September 30, 2016 and December 31, 2015 for the reasons set out below:

Mortgage-backed securities. This category’s unrealized losses are primarily the result of interest rate fluctuations. Because the decline in market value is attributable to changes in interest rates and not credit quality, the Company does not intend to sell the investments, and it is not likely that the Company will be required to sell the investments before recovery of their amortized cost basis, which may be maturity, the Company does not consider those investments to be other-than-temporarily impaired. Also, the majority of the Company’s mortgage-backed securities are agency-backed securities, which have a government guarantee.

Obligations of state and political subdivisions. This category’s unrealized losses are primarily the result of interest rate fluctuations and also a certain few ratings downgrades brought about by the impact of the economic downturn on states and political subdivisions. The contractual terms of the investments do not permit the issuer to settle the securities at a price less than the cost basis of each investment. Because the Company does not intend to sell any of the investments and the accounting standard of “more likely than not” has not been met for the Company to be required to sell any of the investments before recovery of its amortized cost basis, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired.

Corporate bonds. The Company’s unrealized losses in corporate debt securities are related to both interest rate fluctuations and ratings downgrades for a limited number of securities. The majority of the securities remain investment grade and the Company’s analysis did not indicate the existence of a credit loss. The contractual terms of the investments do not permit the issuer to settle the securities at a price less than the cost basis of each investment. Because the Company does not intend to sell any of the investments before recovery of its amortized cost basis, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired.

The following table presents the amortized cost and estimated fair value of available for sale securities as of September 30, 2016 and December 31, 2015, by contractual maturity (dollars in thousands). Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	September 30, 2016				December 31, 2015
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due in one year or less	$	16,667	$	16,860	$	8,380	$	8,370
Due after one year through five years	109,700		113,093		65,326		66,996
Due after five years through ten years	314,903		324,270		296,864		301,920
Due after ten years	489,764		500,761		520,706		526,006
Total securities available for sale	$	931,034	$	954,984	$	891,276	$	903,292

The following table presents the estimated fair value of available for sale securities which were pledged to secure public deposits, repurchase agreements, and for other purposes as permitted or required by law as of September 30, 2016 and December 31, 2015 (dollars in thousands):

	September 30, 2016		December 31, 2015
Public deposits	$	183,841	$	184,635
Repurchase agreements	116,844		126,120
Other purposes (1)	23,326		26,546
Total pledged securities	$	324,011	$	337,301

(1) The "Other purposes" category consists of borrowings, derivatives, and accounts held at the Bank.

Held to Maturity

During the second quarter of 2015, the Company transferred securities, which it intends and has the ability to hold until maturity, with a fair value of $201.8 million on the date of transfer, from securities available for sale to securities held to maturity. The Company transferred these securities to held to maturity to reduce the impact of price volatility on capital and in consideration of changes to the regulatory environment. The securities included net pre-tax unrealized gains of $8.1 million at the date of transfer with a remaining balance of $5.6 million as of September 30, 2016 and $6.8 million as of December 31, 2015.

The Company reports securities held to maturity on the Consolidated Balance Sheets at carrying value. Carrying value is amortized cost which includes any unamortized unrealized gains and losses recognized in accumulated other comprehensive income prior to reclassifying the securities from securities available for sale to securities held to maturity. Investment securities transferred into the held to maturity category from the available for sale category are recorded at fair value at the date of transfer. The unrealized holding gain or loss at the date of transfer is retained in accumulated other comprehensive income and in the carrying value of the securities held to maturity. Such unrealized gains/(losses) are accreted over the remaining life of the security with no impact on future net income.

The carrying value, gross unrealized gains and losses, and estimated fair values of securities held to maturity as of September 30, 2016 and December 31, 2015 are summarized as follows (dollars in thousands):

	Carrying		Gross Unrealized					Estimated
	Value (1)		Gains		(Losses)			Fair Value
September 30, 2016
Obligations of states and political subdivisions	$	200,839	$	8,959	$	(81	)	$	209,717
December 31, 2015
Obligations of states and political subdivisions	$	205,374	$	5,748	$	(1,685	)	$	209,437

(1) The carrying value includes $5.6 million as of September 30, 2016 and $6.8 million as of December 31, 2015 of net unrealized gains present at the time of transfer from available for sale securities, net of any accretion.

The following table shows the gross unrealized losses and fair value (in thousands) of the Company’s held to maturity securities with unrealized losses that are not deemed to be other-than-temporarily impaired as of September 30, 2016 and December 31, 2015. These are aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position.

	Less than 12 months					More than 12 months					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
September 30, 2016
Obligations of states and political subdivisions	$	—	$	—		$	661	$	(81	)	$	661	$	(81	)
December 31, 2015
Obligations of states and political subdivisions	$	7,056	$	(1,685	)	$	—	$	—		$	7,056	$	(1,685	)

As of September 30, 2016, there was $661,000, or 1 issue, of an individual held to maturity security that had been in a continuous loss position for more than 12 months. This security had an unrealized loss of $81,000 and consisted of a municipal obligation. The Company has determined that these securities in a loss position are temporarily impaired as of September 30, 2016 and December 31, 2015 for the reasons set out below:

Obligations of states and political subdivisions. This category’s unrealized losses are primarily the result of interest rate fluctuations and also a certain few ratings downgrades brought about by the impact of the economic downturn on states and political subdivisions. The contractual terms of the investments do not permit the issuer to settle the securities at a price less than the cost basis of each investment. Because the Company does not intend to sell any of the investments and the accounting standard of “more likely than not” has not been met for the Company to be required to sell any of the investments before recovery of its amortized cost basis, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired.

The following table presents the amortized cost and estimated fair value of held to maturity securities as of September 30, 2016 and December 31, 2015, by contractual maturity (dollars in thousands). Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	September 30, 2016				December 31, 2015
	Carrying Value (1)		Estimated Fair Value		Carrying Value (1)		Estimated Fair Value
Due in one year or less	$	850	$	850	$	1,488	$	1,491
Due after one year through five years	25,918		26,561		4,294		4,348
Due after five years through ten years	48,243		50,017		44,736		45,501
Due after ten years	125,828		132,289		154,856		158,097
Total securities held to maturity	$	200,839	$	209,717	$	205,374	$	209,437

(1) The carrying value includes $5.6 million as of September 30, 2016 and $6.8 million as of December 31, 2015 of net unrealized gains present at the time of transfer from available for sale securities, net of any accretion.

The following table presents the estimated fair value of held to maturity securities which were pledged to secure public deposits as permitted or required by law as of September 30, 2016 and December 31, 2015 (dollars in thousands):

	September 30, 2016		December 31, 2015
Public deposits	$	209,717	$	207,140
Total pledged securities	$	209,717	$	207,140

Restricted Stock, at cost

Due to restrictions placed upon the Bank’s common stock investment in the Federal Reserve Bank and FHLB, these securities have been classified as restricted equity securities and carried at cost. These restricted securities are not subject to the investment security classifications and are included as a separate line item on the Company’s Consolidated Balance Sheets. At September 30, 2016 and December 31, 2015, the FHLB required the Bank to maintain stock in an amount equal to 4.25% of outstanding borrowings and a specific percentage of the Bank’s total assets. The Federal Reserve Bank required the Bank to maintain stock with a par value equal to 6% of its outstanding capital at both September 30, 2016 and December 31, 2015. Restricted equity securities consist of Federal Reserve Bank stock in the amount of $23.8 million for both September 30, 2016 and December 31, 2015 and FHLB stock in the amount of $39.4 million and $28.0 million as of September 30, 2016 and December 31, 2015, respectively.

Other-Than-Temporary-Impairment

During each quarter, the Company conducts an assessment of the securities portfolio for OTTI consideration. The assessment considers factors such as external credit ratings, delinquency coverage ratios, market price, management’s judgment, expectations of future performance, and relevant industry research and analysis. An impairment is other-than-temporary if any of the following conditions exist: the entity intends to sell the security; it is more likely than not that the entity will be required to sell the security before recovery of its amortized cost basis; or the entity does not expect to recover the security’s entire amortized cost basis (even if the entity does not intend to sell). If a credit loss exists, but an entity does not intend to sell the impaired debt security and is not more likely than not to be required to sell before recovery, the impairment is other-than-temporary and should be separated into a credit portion to be recognized in earnings and the remaining amount relating to all other factors recognized as other comprehensive loss. Based on the assessment for the three and nine months ended September 30, 2016, and in accordance with the guidance, no OTTI was recognized. For the year ended December 31, 2015, the Company determined that a municipal security in the available for sale portfolio incurred credit-related OTTI of $300,000.  During the quarter ended March 31, 2016, the municipal security was sold.  As a result, the Company recognized an additional loss on sale of the previously written down security.

Realized Gains and Losses

The following table presents the gross realized gains and losses on the sale of securities available for sale and the proceeds from the sale of securities during the three and nine months ended September 30, 2016 and 2015 (dollars in thousands). The Company did not sell any investment securities that are held to maturity.

	Three Months Ended September 30, 2016		Nine Months Ended September 30, 2016
Realized gains (losses):
Gross realized gains	$	—	$	242
Gross realized losses	—		(97		)
Net realized gains	$	—	$	145
Proceeds from sales of securities	$	2,848	$	18,272

	Three Months Ended September 30, 2015		Nine Months Ended September 30, 2015
Realized gains (losses):
Gross realized gains	$	75	$	759
Gross realized losses	—		(87		)
Net realized gains	$	75	$	672
Proceeds from sales of securities	$	5,771	$	63,928

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LOANS AND ALLOWANCE FOR LOAN LOSSES

9 Months Ended

Sep. 30, 2016

Loans and Leases Receivable Disclosure [Abstract]

LOANS AND ALLOWANCE FOR LOAN LOSSES

LOANS AND ALLOWANCE FOR LOAN LOSSES

Loans are stated at their face amount, net of deferred fees and costs, and consist of the following at September 30, 2016 and December 31, 2015 (dollars in thousands):

	September 30, 2016		December 31, 2015
Construction and Land Development	$	776,430	$	749,720
Commercial Real Estate - Owner Occupied	857,142		860,086
Commercial Real Estate - Non-Owner Occupied	1,454,828		1,270,480
Multifamily Real Estate	339,313		322,528
Commercial & Industrial	509,857		435,365
Residential 1-4 Family	999,361		978,469
Auto	255,188		234,061
HELOC	524,097		516,726
Consumer and all other	432,702		304,027
Total loans held for investment, net(1)	$	6,148,918	$	5,671,462

(1)Loans, as presented, are net of deferred fees and costs totaling $3.3 million and $3.0 million as of September 30, 2016 and December 31, 2015, respectively.

The following table shows the aging of the Company’s loan portfolio, by segment, at September 30, 2016 (dollars in thousands):

	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days and still Accruing		PCI		Nonaccrual		Current		Total Loans
Construction and Land Development	$	309	$	697	$	610	$	3,205	$	2,301	$	769,308	$	776,430
Commercial Real Estate - Owner Occupied	1,411		365		304		19,064		1,609		834,389		857,142
Commercial Real Estate - Non-Owner Occupied	324		—		—		18,141		—		1,436,363		1,454,828
Multifamily Real Estate	—		—		—		2,079		—		337,234		339,313
Commercial & Industrial	567		51		77		1,145		1,344		506,673		509,857
Residential 1-4 Family	4,985		6,345		2,005		16,828		5,279		963,919		999,361
Auto	1,846		239		28		—		231		252,844		255,188
HELOC	2,600		899		407		1,498		1,464		517,229		524,097
Consumer and all other	1,713		1,037		98		386		449		429,019		432,702
Total loans held for investment	$	13,755	$	9,633	$	3,529	$	62,346	$	12,677	$	6,046,978	$	6,148,918

The following table shows the aging of the Company’s loan portfolio, by segment, at December 31, 2015 (dollars in thousands):

	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days and still Accruing		PCI		Nonaccrual		Current		Total Loans
Construction and Land Development	$	3,155	$	380	$	128	$	5,986	$	2,113	$	737,958	$	749,720
Commercial Real Estate - Owner Occupied	1,714		118		103		27,388		3,904		826,859		860,086
Commercial Real Estate - Non-Owner Occupied	771		—		723		13,519		100		1,255,367		1,270,480
Multifamily Real Estate	—		—		272		1,555		—		320,701		322,528
Commercial & Industrial	1,056		27		124		1,813		429		431,916		435,365
Residential 1-4 Family	15,023		6,774		3,638		21,159		3,563		928,312		978,469
Auto	2,312		233		60		—		192		231,264		234,061
HELOC	2,589		1,112		762		1,791		1,348		509,124		516,726
Consumer and all other	1,167		689		19		526		287		301,339		304,027
Total loans held for investment	$	27,787	$	9,333	$	5,829	$	73,737	$	11,936	$	5,542,840	$	5,671,462

The following table shows the PCI loan portfolios, by segment and their delinquency status, at September 30, 2016 (dollars in thousands):

	30-89 Days Past Due		Greater than 90 Days		Current		Total
Construction and Land Development	$	29	$	—	$	3,176	$	3,205
Commercial Real Estate - Owner Occupied	737		634		17,693		19,064
Commercial Real Estate - Non-Owner Occupied	1,921		125		16,095		18,141
Multifamily Real Estate	—		—		2,079		2,079
Commercial & Industrial	45		57		1,043		1,145
Residential 1-4 Family	1,686		775		14,367		16,828
HELOC	122		435		941		1,498
Consumer and all other	—		—		386		386
Total	$	4,540	$	2,026	$	55,780	$	62,346

The following table shows the PCI loan portfolios, by segment and their delinquency status, at December 31, 2015 (dollars in thousands):

	30-89 Days Past Due		Greater than 90 Days		Current		Total
Construction and Land Development	$	369	$	241	$	5,376	$	5,986
Commercial Real Estate - Owner Occupied	1,139		1,412		24,837		27,388
Commercial Real Estate - Non-Owner Occupied	755		202		12,562		13,519
Multifamily Real Estate	—		—		1,555		1,555
Commercial & Industrial	209		21		1,583		1,813
Residential 1-4 Family	2,143		1,923		17,093		21,159
HELOC	410		458		923		1,791
Consumer and all other	—		—		526		526
Total	$	5,025	$	4,257	$	64,455	$	73,737

The Company measures the amount of impairment by evaluating loans either in their collective homogeneous pools or individually. The following table shows the Company’s impaired loans, excluding PCI loans related to the StellarOne acquisition, by segment at September 30, 2016 and December 31, 2015 (dollars in thousands):

	September 30, 2016						December 31, 2015
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
Loans without a specific allowance
Construction and Land Development	$	25,171	$	25,647	$	—	$	33,250	$	33,731	$	—
Commercial Real Estate - Owner Occupied	6,414		6,579		—		7,781		8,983		—
Commercial Real Estate - Non-Owner Occupied	3,752		3,752		—		5,328		5,325		—
Multifamily Real Estate	—		—		—		3,828		3,828		—
Commercial & Industrial	952		1,362		—		711		951		—
Residential 1-4 Family	9,066		10,059		—		7,564		8,829		—
Auto	—		—		—		7		7		—
HELOC	1,347		1,416		—		1,786		2,028		—
Consumer and all other	173		223		—		211		211		—
Total impaired loans without a specific allowance	$	46,875	$	49,038	$	—	$	60,466	$	63,893	$	—
Loans with a specific allowance
Construction and Land Development	$	2,070	$	2,442	$	123	$	3,167	$	3,218	$	538
Commercial Real Estate - Owner Occupied	1,198		1,215		5		3,237		3,239		358
Commercial Real Estate - Non-Owner Occupied	40		40		1		907		907		75
Commercial & Industrial	2,496		2,498		642		1,952		1,949		441
Residential 1-4 Family	3,607		3,794		115		6,065		6,153		418
Auto	231		270		1		192		199		1
HELOC	706		791		17		769		925		76
Consumer and all other	278		650		88		363		512		95
Total impaired loans with a specific allowance	$	10,626	$	11,700	$	992	$	16,652	$	17,102	$	2,002
Total impaired loans	$	57,501	$	60,738	$	992	$	77,118	$	80,995	$	2,002

The following tables show the average recorded investment and interest income recognized for the Company’s impaired loans, excluding PCI loans related to the StellarOne acquisition, by segment for the three and nine months ended September 30, 2016 and 2015 (dollars in thousands):

	Three Months Ended September 30, 2016				Nine Months Ended September 30, 2016
	Average Investment		Interest Income Recognized		Average Investment		Interest Income Recognized
Construction and Land Development	$	28,195	$	464	$	27,645	$	1,346
Commercial Real Estate - Owner Occupied	7,691		72		7,862		230
Commercial Real Estate - Non-Owner Occupied	3,777		33		3,759		98
Commercial & Industrial	4,628		42		4,964		134
Residential 1-4 Family	13,106		89		13,439		267
Auto	271		—		289		4
HELOC	2,118		7		2,185		35
Consumer and all other	453		—		620		6
Total impaired loans	$	60,239	$	707	$	60,763	$	2,120

	Three Months Ended September 30, 2015				Nine Months Ended September 30, 2015
	Average Investment		Interest Income Recognized		Average Investment		Interest Income Recognized
Construction and Land Development	$	33,145	$	530	$	33,727	$	1,579
Commercial Real Estate - Owner Occupied	18,859		195		18,709		547
Commercial Real Estate - Non-Owner Occupied	8,596		96		8,809		270
Multifamily Real Estate	4,593		75		4,598		222
Commercial & Industrial	3,503		42		3,633		125
Residential 1-4 Family	11,494		160		11,723		374
Auto	115		1		121		5
HELOC	1,710		14		1,727		36
Consumer and all other	534		6		594		20
Total impaired loans	$	82,549	$	1,119	$	83,641	$	3,178

The Company considers TDRs to be impaired loans. A modification of a loan’s terms constitutes a TDR if the creditor grants a concession that it would not otherwise consider to the borrower for economic or legal reasons related to the borrower’s financial difficulties. All loans that are considered to be TDRs are evaluated for impairment in accordance with the Company’s allowance for loan loss methodology and are included in the preceding impaired loan tables. For the three and nine months ended September 30, 2016, the recorded investment in restructured loans prior to modifications was not materially impacted by the modification.

The following table provides a summary, by segment, of modified loans that continue to accrue interest under the terms of the restructuring agreement, which are considered to be performing, and modified loans that have been placed on nonaccrual status, which are considered to be nonperforming, as of September 30, 2016 and December 31, 2015 (dollars in thousands):

	September 30, 2016					December 31, 2015
	No. of Loans	Recorded Investment		Outstanding Commitment		No. of Loans	Recorded Investment		Outstanding Commitment
Performing
Construction and Land Development	5	$	3,744	$	—	6	$	3,349	$	—
Commercial Real Estate - Owner Occupied	5	2,070		—		5	1,530		—
Commercial Real Estate - Non-Owner Occupied	2	2,390		—		2	2,390		—
Commercial & Industrial	4	663		—		5	261		—
Residential 1-4 Family	25	2,957		—		27	3,173		—
Consumer and all other	—	—		—		1	77		—
Total performing	41	$	11,824	$	—	46	$	10,780	$	—
Nonperforming
Construction and Land Development	2	$	215	$	—	2	$	321	$	—
Commercial Real Estate - Owner Occupied	2	161		—		1	137		—
Commercial & Industrial	1	125		—		1	2		—
Residential 1-4 Family	8	951		—		6	1,142		—
HELOC	—	—		—		1	319		—
Total nonperforming	13	$	1,452	$	—	11	$	1,921	$	—
Total performing and nonperforming	54	$	13,276	$	—	57	$	12,701	$	—

The Company considers a default of a restructured loan to occur when the borrower is 90 days past due following the restructure or a foreclosure and repossession of the applicable collateral occurs. During the three and nine months ended September 30, 2016, the Company identified one loan, totaling approximately $23,000, that went into default that had been restructured in the twelve-month period prior to the time of default. This loan was a commercial real estate - owner occupied loan which had a term modification at a market rate. During the three and nine months ended September 30, 2015, the Company did not identify any restructured loans that went into default that had been restructured in the twelve-month period prior to default.

The following table shows, by segment and modification type, TDRs that occurred during the three and nine months ended September 30, 2016 (dollars in thousands):

	Three Months Ended September 30, 2016			Nine Months Ended September 30, 2016
	No. of Loans	Recorded  Investment at Period End		No. of Loans	Recorded  Investment at Period End
Term modification, at a market rate
Construction and Land Development	—	$	—	1	$	1,177
Commercial Real Estate - Owner Occupied	—	—		2	739
Commercial & Industrial	1	457		1	457
Residential 1-4 Family	—	—		2	474
Total loan term extended at a market rate	1	$	457	6	$	2,847
Term modification, below market rate
Residential 1-4 Family	—	$	—	1	$	36
Total loan term extended at a below market rate	—	$	—	1	$	36
Interest rate modification, below market rate
Commercial & Industrial	—	$	—	1	$	125
Total interest only at below market rate of interest	—	$	—	1	$	125
Total	1	$	457	8	$	3,008

The following table shows, by segment and modification type, TDRs that occurred during the three and nine months ended September 30, 2015 (dollars in thousands):

	Three Months Ended September 30, 2015			Nine Months Ended September 30, 2015
	No. of Loans	Recorded  Investment at Period End		No. of Loans	Recorded  Investment at Period End
Term modification, at a market rate
Commercial Real Estate - Owner Occupied	—	$	—	1	$	117
Commercial & Industrial	—	—		1	17
Total loan term extended at a market rate	—	$	—	2	$	134
Term modification, below market rate
Construction and Land Development	1	$	400	1	$	400
Commercial Real Estate - Owner Occupied	—	—		1	871
Residential 1-4 Family	3	674		3	674
Total loan term extended at a below market rate	4	$	1,074	5	$	1,945
Total	4	$	1,074	7	$	2,079

The following table shows the allowance for loan loss activity, balances for allowance for loan losses, and loan balances based on impairment methodology by segment for the nine months ended and as of September 30, 2016. The table below includes the provision for loan losses. As discussed in Note 1 “Accounting Policies,” the Company enhanced its loan segmentation for purposes of the allowance calculation as well as its disclosures. The impact of this enhancement is reflected in the provision amounts in the table below. In addition, a $175,000 provision was recognized during the nine months ended September 30, 2016 for unfunded loan commitments for which the reserves are recorded as a component of “Other Liabilities” on the Company’s Consolidated Balance Sheets. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories (dollars in thousands):

	Allowance for loan losses
	Balance, beginning of the year		Recoveries credited to allowance		Loans charged off			Provision charged to operations			Balance, end of period
Construction and Land Development	$	6,040	$	165	$	(869	)	$	5,464		$	10,800
Commercial Real Estate - Owner Occupied	4,614		112		(772		)	(770		)	3,184
Commercial Real Estate - Non-Owner Occupied	6,929		3		(1		)	(813		)	6,118
Multifamily Real Estate	1,606		—		—			(658		)	948
Commercial & Industrial	3,163		422		(1,301		)	3,119			5,403
Residential 1-4 Family	5,414		466		(741		)	518			5,657
Auto	1,703		243		(815		)	(260		)	871
HELOC	2,934		229		(1,272		)	(534		)	1,357
Consumer and all other	1,644		382		(957		)	1,135			2,204
Total	$	34,047	$	2,022	$	(6,728	)	$	7,201		$	36,542

	Loans individually evaluated for impairment				Loans collectively evaluated for impairment				Loans acquired with deteriorated credit quality				Total
	Loans		ALL		Loans		ALL		Loans		ALL		Loans		ALL
Construction and Land Development	$	27,241	$	123	$	745,984	$	10,677	$	3,205	$	—	$	776,430	$	10,800
Commercial Real Estate - Owner Occupied	7,612		5		830,466		3,179		19,064		—		857,142		3,184
Commercial Real Estate - Non-Owner Occupied	3,792		1		1,432,895		6,117		18,141		—		1,454,828		6,118
Multifamily Real Estate	—		—		337,234		948		2,079		—		339,313		948
Commercial & Industrial	3,448		642		505,264		4,761		1,145		—		509,857		5,403
Residential 1-4 Family	12,673		115		969,860		5,542		16,828		—		999,361		5,657
Auto	231		1		254,957		870		—		—		255,188		871
HELOC	2,053		17		520,546		1,340		1,498		—		524,097		1,357
Consumer and all other	451		88		431,865		2,116		386		—		432,702		2,204
Total loans held for investment, net	$	57,501	$	992	$	6,029,071	$	35,550	$	62,346	$	—	$	6,148,918	$	36,542

The following table shows the allowance for loan loss activity, balances for allowance for loan losses, and loan balances based on impairment methodology by segment for the nine months ended and as of September 30, 2015. In addition, a $300,000 provision was recognized during the nine months ended September 30, 2015 for unfunded loan commitments. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories (dollars in thousands):

	Allowance for loan losses
	Balance, beginning of the year		Recoveries credited to allowance		Loans charged off			Provision charged to operations		Balance, end of period
Construction and Land Development	$	4,856	$	594	$	(415	)	$	169	$	5,204
Commercial Real Estate - Owner Occupied	4,640		15		(481		)	630		4,804
Commercial Real Estate - Non-Owner Occupied	7,256		232		(2,850		)	1,744		6,382
Multifamily Real Estate	1,374		—		—			296		1,670
Commercial & Industrial	2,610		776		(2,081		)	1,485		2,790
Residential 1-4 Family	5,607		513		(1,303		)	927		5,744
Auto	1,297		213		(545		)	600		1,565
HELOC	2,675		237		(749		)	671		2,834
Consumer and all other	2,069		414		(946		)	739		2,276
Total	$	32,384	$	2,994	$	(9,370	)	$	7,261	$	33,269

	Loans individually evaluated for impairment				Loans collectively evaluated for impairment				Loans acquired with deteriorated credit quality				Total
	Loans		ALL		Loans		ALL		Loans		ALL		Loans		ALL
Construction and Land Development	$	33,647	$	175	$	653,370	$	5,029	$	7,628	$	—	$	694,645	$	5,204
Commercial Real Estate - Owner Occupied	18,564		677		816,320		4,127		28,694		—		863,578		4,804
Commercial Real Estate - Non-Owner Occupied	8,632		137		1,201,649		6,245		13,326		—		1,223,607		6,382
Multifamily Real Estate	4,607		—		323,409		1,670		1,943		—		329,959		1,670
Commercial & Industrial	3,439		318		403,973		2,472		2,245		—		409,657		2,790
Residential 1-4 Family	10,679		615		954,730		5,129		22,379		—		987,788		5,744
Auto	89		1		225,905		1,564		—		—		225,994		1,565
HELOC	1,502		9		511,048		2,825		1,812		—		514,362		2,834
Consumer and all other	459		80		292,993		2,196		579		—		294,031		2,276
Total loans held for investment, net	$	81,618	$	2,012	$	5,383,397	$	31,257	$	78,606	$	—	$	5,543,621	$	33,269

The Company uses a risk rating system and past due status as the primary credit quality indicators for the loan categories. The risk rating system on a scale of 0 through 9 is used to determine risk level as used in the calculation of the allowance for loan losses; on those loans without a risk rating, the Company uses past due status to determine risk level. The risk levels, as described below, do not necessarily follow the regulatory definitions of risk levels with the same name. A general description of the characteristics of the risk levels follows:

Pass is determined by the following criteria:

•Risk rated 0 loans have little or no risk and are generally secured by General Obligation Municipal Credits;

•Risk rated 1 loans have little or no risk and are generally secured by cash or cash equivalents;

•Risk rated 2 loans have minimal risk to well qualified borrowers and no significant questions as to safety;

•Risk rated 3 loans are satisfactory loans with strong borrowers and secondary sources of repayment;

•Risk rated 4 loans are satisfactory loans with borrowers not as strong as risk rated 3 loans and may exhibit a greater

degree of financial risk based on the type of business supporting the loan; or

•Loans that are not risk rated but that are 0 to 29 days past due.

Special Mention is determined by the following criteria:

•Risk rated 5 loans are watch loans that warrant more than the normal level of supervision and have the possibility of an

event occurring that may weaken the borrower’s ability to repay;

•Risk rated 6 loans have increasing potential weaknesses beyond those at which the loan originally was granted and if

not addressed could lead to inadequately protecting the Company’s credit position; or

•Loans that are not risk rated but that are 30 to 89 days past due.

Substandard is determined by the following criteria:

•Risk rated 7 loans are substandard loans and are inadequately protected by the current sound worth or paying capacity

of the obligor or the collateral pledged; these have well defined weaknesses that jeopardize the liquidation of the debt

with the distinct possibility the Company will sustain some loss if the deficiencies are not corrected; or

•Loans that are not risk rated but that are 90 to 149 days past due.

Doubtful is determined by the following criteria:

•Risk rated 8 loans are doubtful of collection and the possibility of loss is high but pending specific borrower plans for

recovery, its classification as a loss is deferred until its more exact status is determined;

•Risk rated 9 loans are loss loans which are considered uncollectable and of such little value that their continuance as

    bankable assets is not warranted; or

•Loans that are not risk rated but that are over 149 days past due.

The following table shows the recorded investment in all loans, excluding PCI loans, by segment with their related risk level as of September 30, 2016 (dollars in thousands):

	Pass		Special Mention		Substandard		Doubtful		Total
Construction and Land Development	$	690,623	$	56,433	$	25,559	$	610	$	773,225
Commercial Real Estate - Owner Occupied	806,096		26,090		5,892		—		838,078
Commercial Real Estate - Non-Owner Occupied	1,399,369		33,608		3,710		—		1,436,687
Multifamily Real Estate	313,497		23,737		—		—		337,234
Commercial & Industrial	495,764		10,088		2,860		—		508,712
Residential 1-4 Family	950,707		22,163		7,571		2,092		982,533
Auto	252,549		2,459		91		89		255,188
HELOC	516,178		4,745		1,305		371		522,599
Consumer and all other	428,574		3,503		42		197		432,316
Total	$	5,853,357	$	182,826	$	47,030	$	3,359	$	6,086,572

The following table shows the recorded investment in all loans, excluding PCI loans, by segment with their related risk level as of December 31, 2015 (dollars in thousands):

	Pass		Special Mention		Substandard		Doubtful		Total
Construction and Land Development	$	663,067	$	52,650	$	27,980	$	37	$	743,734
Commercial Real Estate - Owner Occupied	800,979		20,856		8,931		1,932		832,698
Commercial Real Estate - Non-Owner Occupied	1,228,956		22,341		5,664		—		1,256,961
Multifamily Real Estate	315,128		2,017		3,828		—		320,973
Commercial & Industrial	414,333		16,724		2,396		99		433,552
Residential 1-4 Family	912,839		34,728		8,037		1,706		957,310
Auto	230,670		3,109		194		88		234,061
HELOC	507,514		4,801		1,611		1,009		514,935
Consumer and all other	299,014		3,996		231		260		303,501
Total	$	5,372,500	$	161,222	$	58,872	$	5,131	$	5,597,725

The following table shows the recorded investment in only PCI loans by segment with their related risk level as of September 30, 2016 (dollars in thousands):

	Pass		Special Mention		Substandard		Doubtful		Total
Construction and Land Development	$	1,102	$	1,677	$	426	$	—	$	3,205
Commercial Real Estate - Owner Occupied	5,313		9,036		4,715		—		19,064
Commercial Real Estate - Non-Owner Occupied	4,855		11,562		1,724		—		18,141
Multifamily Real Estate	347		1,732		—		—		2,079
Commercial & Industrial	93		496		556		—		1,145
Residential 1-4 Family	8,085		5,297		2,941		505		16,828
HELOC	932		130		—		436		1,498
Consumer and all other	326		38		22		—		386
Total	$	21,053	$	29,968	$	10,384	$	941	$	62,346

The following table shows the recorded investment in only PCI loans by segment with their related risk level as of December 31, 2015 (dollars in thousands):

	Pass		Special Mention		Substandard		Doubtful		Total
Construction and Land Development	$	2,059	$	1,778	$	1,908	$	241	$	5,986
Commercial Real Estate - Owner Occupied	5,260		15,530		6,598		—		27,388
Commercial Real Estate - Non-Owner Occupied	4,442		7,827		1,250		—		13,519
Multifamily Real Estate	356		1,199		—		—		1,555
Commercial & Industrial	144		359		1,289		21		1,813
Residential 1-4 Family	9,098		6,380		4,605		1,076		21,159
HELOC	923		410		20		438		1,791
Consumer and all other	57		379		90		—		526
Total	$	22,339	$	33,862	$	15,760	$	1,776	$	73,737

Loans acquired are originally recorded at fair value, with certain loans being identified as impaired at the date of purchase. The fair values were determined based on the credit quality of the portfolio, expected future cash flows, and timing of those expected future cash flows.

The following shows changes in the accretable yield for loans accounted for under ASC 310-30, Receivables – Loans and Debt Securities Acquired with Deteriorated Credit Quality, for the periods presented (dollars in thousands):

	For the Nine Months Ended September 30,
	2016			2015
Balance at beginning of period	$	22,139		$	28,956
Accretion	(4,232		)	(4,707		)
Reclass of nonaccretable difference due to improvement in expected cash flows	3,580			3,168
Other, net (1)	(1,149		)	(5,624		)
Balance at end of period	$	20,338		$	21,793

(1)This line item represents changes in the cash flows expected to be collected due to the impact of non-credit changes such as prepayment assumptions, changes in interest rates on variable rate PCI loans, and discounted payoffs that occurred in the quarter.

The carrying value of the Company’s PCI loan portfolio, accounted for under ASC 310-30, totaled $62.3 million at September 30, 2016 and $73.7 million at December 31, 2015. The outstanding balance of the Company’s PCI loan portfolio totaled $77.9 million at September 30, 2016 and $90.3 million at December 31, 2015. The carrying value of the Company’s acquired performing loan portfolio, accounted for under ASC 310-20, Receivables – Nonrefundable Fees and Other Costs, totaled $1.2 billion at September 30, 2016 and $1.4 billion at December 31, 2015; the remaining discount on these loans totaled $18.2 million at September 30, 2016 and $20.8 million at December 31, 2015.

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INTANGIBLE ASSETS

9 Months Ended

Sep. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS

INTANGIBLE ASSETS

The Company’s intangible assets consist of core deposits, goodwill, and other intangibles arising from previous and current acquisitions. The Company has determined that core deposit intangibles have finite lives and amortizes them over their estimated useful lives. Core deposit intangible assets are being amortized over the period of expected benefit, which ranges from 4 to 14 years, using an accelerated method. On January 1, 2014, the Company completed the acquisition of StellarOne and acquired intangible assets of $29.6 million and recorded $234.1 million of goodwill. On May 31, 2016, the Company completed the acquisition of ODCM and recorded goodwill of $4.7 million and other amortizable intangible assets of $4.5 million. The Company is amortizing these intangible assets over the period of expected benefit, which ranges from 5 to 10 years using a straight-line method. During the current quarter, the Company finalized the valuation of certain amortizable intangible assets which increased the fair value and also impacting the recognized goodwill. The fair values are subject to refinement for up to one year after the closing date of the acquisition.

In accordance with ASC 350, Intangibles-Goodwill and Other, the Company reviews the carrying value of indefinite lived intangible assets at least annually or more frequently if certain impairment indicators exist. The Company performed its annual impairment testing in the second quarter of 2016 and determined that there was no impairment to its goodwill or intangible assets.

Amortization expense of core deposit intangibles for the three and nine months ended September 30, 2016 totaled $1.7 million and $5.3 million, respectively; and the three and nine months ended September 30, 2015 totaled $2.1 million and $6.4 million, respectively. Amortization expense of other intangibles for both the three and nine months ended September 30, 2016 totaled $160,000, respectively. As of September 30, 2016, the estimated remaining amortization expense of core deposit intangibles and other amortizable intangible assets is as follows (dollars in thousands):

For the remaining three months of 2016	$	1,745
For the year ending December 31, 2017	6,070
For the year ending December 31, 2018	4,624
For the year ending December 31, 2019	3,573
For the year ending December 31, 2020	2,508
Thereafter	3,823
Total estimated amortization expense	$	22,343

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BORROWINGS

9 Months Ended

Sep. 30, 2016

Debt Disclosure [Abstract]

BORROWINGS

BORROWINGS

Short-term Borrowings

The Company classifies all borrowings that will mature within a year from the date on which the Company enters into them as short-term borrowings. Total short-term borrowings consist primarily of advances from the FHLB, federal funds purchased (which are secured overnight borrowings from other financial institutions), and other lines of credit. Also included in total short-term borrowings are securities sold under agreements to repurchase, which are secured transactions with customers and generally mature the day following the date sold. Total short-term borrowings consist of the following as of September 30, 2016 and December 31, 2015 (dollars in thousands):

	September 30, 2016			December 31, 2015
Securities sold under agreements to repurchase	$	64,225		$	84,977
Other short-term borrowings	601,500			304,000
Total short-term borrowings	$	665,725		$	388,977
Maximum month-end outstanding balance	$	678,262		$	445,761
Average outstanding balance during the period	583,418			379,783
Average interest rate (year-to-date)	0.48		%	0.25		%
Average interest rate at end of period	0.48		%	0.27		%
Other short-term borrowings:
Federal funds purchased	$	6,000		$	—
FHLB	579,500			304,000
Other lines of credit	16,000			—

The Bank maintains federal funds lines with several correspondent banks; the remaining available balance was $169.0 million at September 30, 2016 and $175.0 million at December 31, 2015. The Company maintains an alternate line of credit at a correspondent bank, the available balance was $9.0 million at September 30, 2016 and $25.0 million at December 31, 2015. The Company has certain restrictive covenants related to certain asset quality, capital, and profitability metrics associated with these lines and is considered to be in compliance with these covenants. Additionally, the Company had a collateral dependent line of credit with the FHLB of up to $2.4 billion and $1.5 billion at September 30, 2016 and December 31, 2015, respectively.

Long-term Borrowings

In connection with two bank acquisitions prior to 2006, the Company issued trust preferred capital notes to fund the cash portion of those acquisitions, collectively totaling $58.5 million. In connection with the acquisition of StellarOne, the Company acquired trust preferred capital notes totaling $32.0 million with a remaining fair value discount of $6.8 million at September 30, 2016. The trust preferred capital notes currently qualify for Tier 1 capital of the Company for regulatory purposes.

	Trust Preferred Capital Securities(1)		Investment(1)		Spread to  3-Month LIBOR		Rate		Maturity
Trust Preferred Capital Note - Statutory Trust I	$	22,500,000	$	696,000	2.75	%	3.60	%	6/17/2034
Trust Preferred Capital Note - Statutory Trust II	36,000,000		1,114,000		1.40	%	2.25	%	6/15/2036
VFG Limited Liability Trust I Indenture	20,000,000		619,000		2.73	%	3.58	%	3/18/2034
FNB Statutory Trust II Indenture	12,000,000		372,000		3.10	%	3.95	%	6/26/2033
Total	$	90,500,000	$	2,801,000

(1)The total of the trust preferred capital securities and investments in the respective trusts represents the principal asset of the Company's junior subordinated debt securities with like maturities and like interest rates to the capital securities. The Company's investment in the trusts is reported in "Other Assets" within the Consolidated Balance Sheets.

On August 23, 2012, the Company modified its fixed rate FHLB advances to floating rate advances, which resulted in reducing the Company’s FHLB borrowing costs. In connection with this modification, the Company incurred a prepayment penalty of $19.6 million on the original advances, which is included as a component of long-term borrowings in the Company’s Consolidated Balance Sheets. In accordance with ASC 470-50, Modifications and Extinguishments, the Company is amortizing this prepayment penalty over the term of the modified advances using the effective rate method. The amortization expense is included as a component of interest expense on long-term borrowings in the Company’s Consolidated Statements of Income. Amortization expense for the three and nine months ended September 30, 2016 and 2015 was $474,000 and $1.4 million and $463,000 and $1.4 million, respectively.

In connection with the StellarOne acquisition, the Company assumed $70.0 million in long-term borrowings with the FHLB of which there is $45.0 million remaining at September 30, 2016 that had a remaining fair value premium of $693,000.

As of September 30, 2016, the Company had long-term advances from the FHLB consisting of the following (dollars in thousands):

Long-term Type	Spread to 3-Month LIBOR		Interest Rate (1)		Maturity Date	Advance Amount
Adjustable Rate Credit	0.44	%	1.29	%	8/23/2022	$	55,000
Adjustable Rate Credit	0.45	%	1.31	%	11/23/2022	65,000
Adjustable Rate Credit	0.45	%	1.31	%	11/23/2022	10,000
Adjustable Rate Credit	0.45	%	1.31	%	11/23/2022	10,000
Fixed Rate	—		3.62	%	11/28/2017	10,000
Fixed Rate	—		3.75	%	7/30/2018	5,000
Fixed Rate	—		3.97	%	7/30/2018	5,000
Fixed Rate Hybrid	—		2.11	%	10/5/2016	25,000
						$	185,000
(1) Interest rates calculated using non-rounded numbers.

As of December 31, 2015, the Company had long-term advances from the FHLB consisting of the following (dollars in thousands):

Long-term Type	Spread to 3-Month LIBOR		Interest Rate (1)		Maturity Date	Advance Amount
Adjustable Rate Credit	0.44	%	1.05	%	8/23/2022	$	55,000
Adjustable Rate Credit	0.45	%	1.07	%	11/23/2022	65,000
Adjustable Rate Credit	0.45	%	1.07	%	11/23/2022	10,000
Adjustable Rate Credit	0.45	%	1.07	%	11/23/2022	10,000
Fixed Rate	—		3.62	%	11/28/2017	10,000
Fixed Rate	—		3.75	%	7/30/2018	5,000
Fixed Rate	—		3.97	%	7/30/2018	5,000
Fixed Rate Hybrid	—		2.11	%	10/5/2016	25,000
Fixed Rate Hybrid	—		0.91	%	7/25/2016	15,000
						$	200,000
(1) Interest rates calculated using non-rounded numbers.

The carrying value of the loans and securities pledged as collateral for FHLB advances totaled $2.0 billion as of September 30, 2016 and $1.9 billion at December 31, 2015.

As of September 30, 2016, the contractual maturities of long-term debt are as follows for the years ending (dollars in thousands):

	Trust Preferred Capital Notes		FHLB Advances		Fair Value  Premium (Discount)			Prepayment Penalty			Total Long-term Borrowings
For the remaining three months of 2016	$	—	$	25,000	$	71		$	(477	)	$	24,594
2017	—		10,000		170			(1,922		)	8,248
2018	—		10,000		(143		)	(1,970		)	7,887
2019	—		—		(286		)	(2,018		)	(2,304		)
2020	—		—		(301		)	(2,074		)	(2,375		)
Thereafter	93,301		140,000		(5,623		)	(3,826		)	223,852
Total Long-term borrowings	$	93,301	$	185,000	$	(6,112	)	$	(12,287	)	$	259,902

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COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2016

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

Litigation Matters

In the ordinary course of its operations, the Company and its subsidiaries are parties to various legal proceedings. Based on the information presently available, and after consultation with legal counsel, management believes that the ultimate outcome in such proceedings, in the aggregate, will not have a material adverse effect on the business, financial condition, or results of operations of the Company.

Financial Instruments with Off-Balance Sheet Risk

The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers and to reduce its own exposure to fluctuations in interest rates. These financial instruments include commitments to extend credit and standby letters of credit. These instruments involve elements of credit and interest rate risk in excess of the amount recognized in the Company’s Consolidated Balance Sheets. The contractual amounts of these instruments reflect the extent of the Company’s involvement in particular classes of financial instruments.

The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instruments for commitments to extend credit and letters of credit written is represented by the contractual amount of these instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. Unless noted otherwise, the Company does not require collateral or other security to support off-balance sheet financial instruments with credit risk. The Company considers credit losses related to off-balance sheet commitments by undergoing a similar process in evaluating losses for loans that are carried on balance sheet. The Company considers historical loss rates, current economic conditions, risk ratings, and past due status among other factors in the consideration of whether credit losses are inherent in the Company’s off-balance sheet commitments to extend credit. The Company does not expect credit losses arising from off-balance sheet commitments to have a material adverse impact on the Company’s consolidated financial statements.

Commitments to extend credit are agreements to lend to customers as long as there are no violations of any conditions established in the contracts. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Because many of the commitments may expire without being completely drawn upon, the total commitment amounts do not necessarily represent future cash requirements.

Letters of credit are conditional commitments issued by the Company to guarantee the performance of customers to third parties. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers.

UMG, a wholly owned subsidiary of the Bank, uses rate lock commitments and best efforts contracts during the origination process and for loans held for sale. These best efforts contracts are designed to mitigate UMG’s exposure to fluctuations in interest rates in connection with rate lock commitments and loans held for sale.

The following table presents the balances of commitments and contingencies (dollars in thousands):

	September 30, 2016		December 31, 2015
Commitments with off-balance sheet risk:
Commitments to extend credit (1)	$	1,787,953	$	1,557,350
Standby letters of credit	84,491		139,371
Mortgage loan rate lock commitments	76,070		50,369
Total commitments with off-balance sheet risk	$	1,948,514	$	1,747,090
Commitments with balance sheet risk:
Loans held for sale	$	46,814	$	36,030
Total other commitments	$	1,995,328	$	1,783,120

(1) Includes unfunded overdraft protection.

The Company must maintain a reserve against its deposits in accordance with Regulation D of the Federal Reserve Act. For the final weekly reporting period in the periods ended September 30, 2016 and December 31, 2015, the aggregate amount of daily average required reserves was approximately $52.7 million and $48.7 million, respectively.

As of September 30, 2016, the Company had approximately $49.3 million in deposits in other financial institutions, of which $18.8 million and $14.8 million serve as collateral for the cash flow hedges and loan swaps, respectively, as discussed in Note 7 “Derivatives”. The Company had approximately $14.2 million in deposits in other financial institutions that were uninsured at September 30, 2016. On an annual basis, the Company’s management evaluates the loss risk of its uninsured deposits in financial counterparties.

For asset/liability management purposes, the Company uses interest rate swap agreements to hedge various exposures or to modify the interest rate characteristics of various balance sheet accounts. See Note 7 “Derivatives” for additional information.

In the ordinary course of business, the Company records an indemnification reserve relating to the credit card portfolio and to mortgage loans previously sold based on historical statistics and loss rates; as of September 30, 2016 and December 31, 2015, the Company’s indemnification reserve was approximately $506,000 and $450,000, respectively.

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DERIVATIVES

9 Months Ended

Sep. 30, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVES

DERIVATIVES

The Company is exposed to economic risks arising from its business operations and uses derivatives primarily to manage risk associated with changing interest rates, and to assist customers with their risk management objectives. The Company designates certain derivatives as hedging instruments in a qualifying hedge accounting relationship (cash flow or fair value hedge). The remaining are classified as free standing derivatives consisting of customer accommodation loan swaps and interest rate lock commitments that do not qualify for hedge accounting.

Cash Flow Hedges

The Company designates derivatives as cash flow hedges when they are used to manage exposure to variability in cash flows related to forecasted transactions on variable rate borrowings, such as trust preferred capital notes, FHLB borrowings, and prime commercial loans. The Company uses interest rate swap agreements as part of its hedging strategy by exchanging a notional amount, equal to the principal amount of the borrowings, for fixed-rate interest based on benchmarked interest rates.

All swaps entered into with counterparties met the Company’s credit standards, and the agreements contain collateral provisions protecting the at-risk party. The Company believes that the credit risk inherent in the contract is not significant.

The terms and conditions of the interest rate swaps vary and amounts receivable or payable are recognized as accrued under the terms of the agreements. The Company assesses the effectiveness of each hedging relationship on a periodic basis using statistical regression analysis. The Company also measures the ineffectiveness of each hedging relationship using the change in variable cash flows method which compares the cumulative changes in cash flows of the hedging instrument relative to cumulative changes in the hedged item’s cash flows. In accordance with ASC 815, Derivatives and Hedging, the effective portions of the derivatives’ unrealized gains or losses are recorded as a component of other comprehensive income. Based on the Company’s assessment, its cash flow hedges are highly effective, but to the extent that any ineffectiveness exists in the hedge relationships, the amounts would be recorded in interest income or interest expense in the Company’s Consolidated Statements of Income.

On June 13, 2016, the Company terminated three interest rate swaps designated as cash flow hedges prior to their respective maturity dates. The unrealized gain of $1.3 million within accumulated Other Comprehensive Income will be re-classified into earnings over a three year period using the effective interest method. The estimated net amount of gains expected to be reclassified into earnings within the next twelve months is $377,000.

Fair Value Hedge

Derivatives are designated as fair value hedges when they are used to manage exposure to changes in the fair value of certain financial assets and liabilities, referred to as the hedged items, which fluctuate in value as a result of movements in interest rates. During the normal course of business, the Company enters into interest rate swaps to convert certain long-term fixed-rate loans to floating rates to hedge the Company’s exposure to interest rate risk. The Company pays a fixed interest rate to the counterparty and receives a floating rate from the same counterparty, calculated on the aggregate notional amount. At September 30, 2016 and December 31, 2015, the aggregate notional amount of the related hedged items totaled $43.5 million and $61.2 million, respectively, with fair value amounts of $3.2 million and $689,000, respectively.

The Company applies hedge accounting in accordance with ASC 815, Derivatives and Hedging, and the fair value hedge and the underlying hedged item, attributable to the risk being hedged, are recorded at fair value with unrealized gains and losses being recorded in the Company’s Consolidated Statements of Income. Statistical regression analysis is used to assess hedge effectiveness, both at inception of the hedging relationship and on an ongoing basis. The regression analysis involves regressing the periodic change in fair value of the hedging instrument against the periodic changes in fair value of the asset being hedged due to changes in the hedged risk. The Company’s fair value hedges continue to be highly effective and had no material impact on the Consolidated Statements of Income, but if any ineffectiveness exists, portions of the unrealized gains or losses would be recorded in interest income or interest expense in the Company’s Consolidated Statements of Income.

Loan Swaps

During the normal course of business, the Company enters into interest rate swap loan relationships (“loan swaps”) with borrowers to meet their financing needs. Upon entering into the loan swaps, the Company enters into offsetting positions with a third party in order to minimize interest rate risk. These back-to-back loan swaps qualify as financial derivatives, and the fair values are reported in “Other Assets” and “Other Liabilities” within the Company’s Consolidated Balance Sheets.

Interest Rate Lock Commitments

During the normal course of business, the Company enters into commitments to originate mortgage loans whereby the interest rate on the loan is determined prior to funding (“rate lock commitments”).  Rate lock commitments on mortgage loans that are intended to be sold in the secondary market are considered to be derivatives.  The period of time between issuance of a loan commitment, closing, and sale of the loan generally ranges from 30 to 120 days.  The Company protects itself from changes in interest rates through the use of best efforts forward delivery commitments, whereby the Company commits to sell a loan at the time the borrower commits to an interest rate with the intent that the buyer has assumed interest rate risk on the loan.  The correlation between the rate lock commitments and the best efforts contracts is high due to their similarity.

The market values of rate lock commitments and best efforts forward delivery commitments is not readily ascertainable with precision because rate lock commitments and best efforts contracts are not actively traded in stand-alone markets. The Company determines the fair value of rate lock commitments and best efforts contracts by measuring the change in the value of the underlying asset, while taking into consideration the probability that the rate lock commitments will close. The fair value of the rate lock commitments is reported as a component of “Other Assets” in the Company’s Consolidated Balance Sheets; the fair value of the Company’s best efforts forward delivery commitments is recorded as a component of “Other Liabilities” in the Company’s Consolidated Balance Sheets. Any impact to income is recorded in current period earnings as a component of “Mortgage banking income, net” in the Company’s Consolidated Statements of Income.

The following table summarizes key elements of the Company’s derivative instruments as of September 30, 2016 and December 31, 2015, segregated by derivatives that are considered accounting hedges and those that are not (dollars in thousands):

	September 30, 2016									December 31, 2015
			Derivative (2)									Derivative (2)
	Notional or Contractual Amount (1)			Assets		Liabilities		Collateral Pledged (3)		Notional or Contractual Amount (1)			Assets		Liabilities		Collateral Pledged (3)
Derivatives designated as accounting hedges:
Interest rate contracts:
Cash flow hedges	$	188,500		$	343	$	16,087	$	22,071	$	263,000		$	946	$	10,352	$	14,449
Fair value hedges	43,455			—		3,529		—		61,150			—		888		—
Derivatives not designated as accounting hedges:
Loan Swaps (4)
Pay fixed - receive floating interest rate swaps	280,336			12,218		—		—		138,969			3,758		—		—
Pay floating - receive fixed interest rate swaps	280,336			—		12,218		16,141		138,969			—		3,758		5,983
Other contracts:
Interest rate lock commitments	76,070			1,422		—		—		50,369			701		—		—

(1) Notional amounts are not recorded on the balance sheet and are generally used only as a basis on which interest and other payments are determined.

(2) Balancesrepresent fair value of derivative financial instruments.

(3) Collateral pledged is comprised of both cash and securities.

(4) Prior period reflects reclassifications to conform to the current presentation.

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

9 Months Ended

Sep. 30, 2016

Equity [Abstract]

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The change in accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2016 is summarized as follows, net of tax (dollars in thousands):

	Unrealized Gains (Losses) on AFS Securities		Unrealized Gain for AFS Securities Transferred to HTM			Change in Fair Value of Cash Flow Hedge			Total
Balance - June 30, 2016	$	14,412	$	3,853		$	(9,366	)	$	8,899
Other comprehensive income (loss)	1,121		(237		)	(78		)	806
Amounts reclassified from accumulated other comprehensive income	—		—			154			154
Net current period other comprehensive income (loss)	1,121		(237		)	76			960
Balance - September 30, 2016	$	15,533	$	3,616		$	(9,290	)	$	9,859

	Unrealized Gains (Losses) on AFS Securities			Unrealized Gain for AFS Securities Transferred to HTM			Change in Fair Value of Cash Flow Hedge			Total
Balance - December 31, 2015	$	7,777		$	4,432		$	(5,957	)	$	6,252
Other comprehensive income (loss)	7,851			(816		)	(3,766		)	3,269
Amounts reclassified from accumulated other comprehensive income	(95		)	—			433			338
Net current period other comprehensive income (loss)	7,756			(816		)	(3,333		)	3,607
Balance - September 30, 2016	$	15,533		$	3,616		$	(9,290	)	$	9,859

The change in accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2015 is summarized as follows, net of tax (dollars in thousands):

	Unrealized Gains (Losses) on AFS Securities		Unrealized Gain for AFS Securities Transferred to HTM			Change in Fair Value of Cash Flow Hedge			Total
Balance - June 30, 2015	$	8,738	$	5,043		$	(4,552	)	$	9,229
Other comprehensive income (loss)	1,250		(308		)	(2,328		)	(1,386		)
Amounts reclassified from accumulated other comprehensive income	146		—			157			303
Net current period other comprehensive income (loss)	1,396		(308		)	(2,171		)	(1,083		)
Balance - September 30, 2015	$	10,134	$	4,735		$	(6,723	)	$	8,146

	Unrealized Gains (Losses) on AFS Securities			Unrealized Gain for AFS Securities Transferred to HTM			Change in Fair Value of Cash Flow Hedge			Total
Balance - December 31, 2014	$	17,439		$	—		$	(5,184	)	$	12,255
Unrealized gain transferred from AFS to HTM	(5,251		)	5,251			—			—
Other comprehensive income (loss)	(1,812		)	(516		)	(2,009		)	(4,337		)
Amounts reclassified from accumulated other comprehensive income	(242		)	—			470			228
Net current period other comprehensive income (loss)	(2,054		)	(516		)	(1,539		)	(4,109		)
Balance - September 30, 2015	$	10,134		$	4,735		$	(6,723	)	$	8,146

Reclassifications of unrealized gains (losses) on available for sale securities are reported in the Company’s Consolidated Statements of Income as “Gains on securities transactions, net” with the corresponding income tax effect being reflected as a component of income tax expense. The Company reported gains of $0 and $145,000 for the three and nine months ended September 30, 2016 and $75,000 and $672,000 for the three and nine months ended September 30, 2015, related to the sale of securities. The Company recorded $300,000 in OTTI in the third quarter of 2015 on a municipal security in the available for sale portfolio. The tax effects of the gains on sales of securities transaction, net of OTTI recorded, were $0 and $51,000 during the three and nine months ended September 30, 2016 and $79,000 and $130,000 during the three and nine months ended September 30, 2015, which amounts were included as a component of income tax expense.

Reclassifications of the change in fair value of cash flow hedges are reported in interest income and interest expense in the Company’s Consolidated Statements of Income with the corresponding income tax effect being reflected as a component of income tax expense. The Company reported net interest expense of $237,000 and $666,000 for the three and nine months ended September 30, 2016 and $241,000 and $723,000 for the three and nine months ended September 30, 2015. The tax effects of these transactions were $83,000 and $233,000 during the three and nine months ended September 30, 2016 and $84,000 and $253,000 during the three and nine months ended September 30, 2015, which were included as a component of income tax expense.

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FAIR VALUE MEASUREMENTS

9 Months Ended

Sep. 30, 2016

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

The Company follows ASC 820, Fair Value Measurements and Disclosures, to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. This codification clarifies that fair value of certain assets and liabilities is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between willing market participants.

ASC 820 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. The three levels of the fair value hierarchy under ASC 820 based on these two types of inputs are as follows:

Level 1	Valuation is based on quoted prices in active markets for identical assets and liabilities.
Level 2	Valuation is based on observable inputs including quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets and liabilities in less active markets, and model-based valuation techniques for which significant assumptions can be derived primarily from or corroborated by observable data in the markets.
Level 3	Valuation is based on model-based techniques that use one or more significant inputs or assumptions that are unobservable in the market.  These unobservable inputs reflect the Company’s assumptions about what market participants would use and information that is reasonably available under the circumstances without undue cost and effort.

The following describes the valuation techniques used by the Company to measure certain financial assets and liabilities recorded at fair value on a recurring basis in the financial statements.

Derivative instruments

As discussed in Note 7 “Derivatives”, the Company records derivative instruments at fair value on a recurring basis. The Company utilizes derivative instruments as part of the management of interest rate risk to modify the re-pricing characteristics of certain portions of the Company’s interest-bearing assets and liabilities. The Company has contracted with a third party vendor to provide valuations for derivatives using standard valuation techniques and therefore classifies such valuations as Level 2. Third party valuations are validated by the Company using Bloomberg Valuation Service’s derivative pricing functions. The Company has considered counterparty credit risk in the valuation of its derivative assets and has considered its own credit risk in the valuation of its derivative liabilities.

During the ordinary course of business, the Company enters into interest rate lock commitments related to the origination of mortgage loans held for sale as well as best effort forward delivery commitments to mitigate interest rate risk; these instruments are recorded at estimated fair value based on the value of the underlying loan, which in turn is based on quoted prices for similar loans in the secondary market. However, this value is adjusted by a pull-through rate which considers the likelihood that the loan in a lock position will ultimately close. The pull-through rate is derived from the Company’s internal data and is adjusted using significant management judgment. The pull-through rate is largely dependent on the loan processing stage that a loan is currently in and the change in prevailing interest rates from the time of the rate lock. As such, interest rate lock commitments are classified as Level 3. An increase in the pull-through rate utilized in the fair value measurement of the interest rate lock commitment derivative will result in positive fair value adjustments while a decrease in the pull-through rate will result in a negative fair value adjustment. The Company’s weighted average pull-through rate was approximately 80% as of September 30, 2016 and December 31, 2015. As of September 30, 2016, the interest rate lock commitments are recorded as a component of “Other Assets” on the Company’s Consolidated Balance Sheets.

Securities available for sale

Securities available for sale are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted market prices, when available (Level 1). If quoted market prices are not available, fair values are measured utilizing independent valuation techniques of identical or similar securities for which significant assumptions are derived primarily from or corroborated by observable market data (Level 2). If the inputs used to provide the evaluation for certain securities are unobservable and/or there is little, if any, market activity, then the security would fall to the lowest level of the hierarchy (Level 3).

The Company’s investment portfolio is primarily valued using fair value measurements that are considered to be Level 2. The Company has contracted with a third party portfolio accounting service vendor for valuation of its securities portfolio. The vendor’s primary source for security valuation is Interactive Data Corporation (“IDC”), which evaluates securities based on market data. IDC utilizes evaluated pricing models that vary by asset class and include available trade, bid, and other market information. Generally, the methodology includes broker quotes, proprietary models, vast descriptive terms and conditions databases, as well as extensive quality control programs.

The vendor utilizes proprietary valuation matrices for valuing all municipals securities. The initial curves for determining the price, movement, and yield relationships within the municipal matrices are derived from industry benchmark curves or sourced from a municipal trading desk. The securities are further broken down according to issuer, credit support, state of issuance, and rating to incorporate additional spreads to the industry benchmark curves.

The Company primarily uses Bloomberg Valuation Service, an independent information source that draws on quantitative models and market data contributed from over 4,000 market participants, to validate third party valuations. Any material differences between valuation sources are researched by further analyzing the various inputs that are utilized by each pricing source. No material differences were identified during the validation as of September 30, 2016 and December 31, 2015.

The carrying value of restricted Federal Reserve Bank and FHLB stock approximates fair value based on the redemption provisions of each entity and is therefore excluded from the following table.

Loans held for sale

Loans held for sale are carried at fair value. These loans currently consist of residential loans originated for sale in the secondary market. Fair value is based on the price secondary markets are currently offering for similar loans using observable market data which is not materially different than cost due to the short duration between origination and sale (Level 2). Gains and losses on the sale of loans are recorded within the mortgage segment and are reported on a separate line item in the Company’s Consolidated Statements of Income.

The following table presents the balances of financial assets and liabilities measured at fair value on a recurring basis at September 30, 2016 and December 31, 2015 (dollars in thousands):

	Fair Value Measurements at September 30, 2016 using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Level 1		Level 2		Level 3		Balance
ASSETS
Securities available for sale:
Obligations of states and political subdivisions	$	—	$	279,223	$	—	$	279,223
Corporate and other bonds	—		121,747		—		121,747
Mortgage-backed securities	—		540,596		—		540,596
Other securities	—		13,418		—		13,418
Loans held for sale	—		46,814		—		46,814
Derivatives:
Interest rate swap	—		12,218		—		12,218
Cash flow hedges	—		343		—		343
Interest rate lock commitments	—		—		1,422		1,422
LIABILITIES
Derivatives:
Interest rate swap	$	—	$	12,218	$	—	$	12,218
Cash flow hedges	—		16,087		—		16,087
Fair value hedges	—		3,529		—		3,529

	Fair Value Measurements at December 31, 2015 using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Level 1		Level 2		Level 3		Balance
ASSETS
Securities available for sale:
Obligations of states and political subdivisions	$	—	$	268,079	$	—	$	268,079
Corporate and other bonds	—		75,979		—		75,979
Mortgage-backed securities	—		548,171		—		548,171
Other securities	—		11,063		—		11,063
Loans held for sale	—		36,030		—		36,030
Derivatives:
Interest rate swap	—		3,758		—		3,758
Cash flow hedges	—		946		—		946
Interest rate lock commitments	—		—		701		701
LIABILITIES
Derivatives:
Interest rate swap	$	—	$	3,758	$	—	$	3,758
Cash flow hedges	—		10,352		—		10,352
Fair value hedges	—		888		—		888

Certain assets are measured at fair value on a nonrecurring basis in accordance with U.S. GAAP. Adjustments to the fair value of these assets usually result from the application of lower-of-cost-or-market accounting or write-downs of individual assets.

The following describes the valuation techniques used by the Company to measure certain assets recorded at fair value on a nonrecurring basis in the financial statements.

Impaired loans

Loans are designated as impaired when, in the judgment of management based on current information and events, it is probable that all amounts due according to the contractual terms of the loan agreements will not be collected. The measurement of loss associated with impaired loans can be based on either the observable market price of the loan or the fair value of the collateral. Collateral dependent loans are reported at the fair value of the underlying collateral if repayment is solely from the underlying value of the collateral. Collateral may be in the form of real estate or business assets including equipment, inventory, and accounts receivable. The vast majority of the Company’s collateral is real estate. The value of real estate collateral is determined utilizing an income or market valuation approach based on an appraisal conducted by an independent, licensed appraiser using observable market data. When evaluating the fair value, management may discount the appraisal further if, based on their understanding of the market conditions, it is determined the collateral is further impaired below the appraised value (Level 3). For the periods ending September 30, 2016 and December 31, 2015, the Level 3 weighted averages related to impaired loans were 12.4% and 7.0%, respectively. The value of business equipment is based upon an outside appraisal, of one year or less, if deemed significant, or the net book value on the applicable business’s financial statements if not considered significant using observable market data. Likewise, values for inventory and accounts receivables collateral are based on financial statement balances or aging reports (Level 3). Collateral dependent impaired loans allocated to the allowance for loan losses are measured at fair value on a nonrecurring basis. Any fair value adjustments are recorded in the period incurred as provision for loan losses on the Company’s Consolidated Statements of Income.

Other real estate owned

OREO is evaluated for impairment at least quarterly by the Bank’s Special Asset Loan Committee and any necessary write downs to fair values are recorded as impairment and included as a component of noninterest expense. Fair values of OREO are carried at fair value less selling costs. Fair value is based upon independent market prices, appraised values of the collateral, or management’s estimation of the value of the collateral. When an appraised value is not available or management determines the fair value of the collateral is further impaired below the appraised value and there is no observable market price, the Company records the foreclosed asset as Level 3 valuation. For the nine and twelve month periods ending September 30, 2016 and December 31, 2015, the Level 3 weighted averages related to OREO were approximately 24.7% and 32.0%, respectively.

Total valuation expenses related to OREO properties for the three and nine months ended September 30, 2016 and 2015 totaled $479,000 and $879,000 and $473,000 and $1.8 million, respectively.

The following tables summarize the Company’s financial assets that were measured at fair value on a nonrecurring basis at September 30, 2016 and December 31, 2015 (dollars in thousands):

	Fair Value Measurements at September 30, 2016 using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Level 1		Level 2		Level 3		Balance
ASSETS
Impaired loans	$	—	$	—	$	2,573	$	2,573
Other real estate owned	—		—		10,581		10,581

	Fair Value Measurements at December 31, 2015 using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Level 1		Level 2		Level 3		Balance
ASSETS
Impaired loans	$	—	$	—	$	2,214	$	2,214
Other real estate owned	—		—		15,299		15,299

ASC 825, Financial Instruments, requires disclosure about fair value of financial instruments for interim periods and excludes certain financial instruments and all non-financial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company.

Cash and cash equivalents

For those short-term instruments, the carrying amount is a reasonable estimate of fair value.

Held to Maturity Securities

The Company’s investment portfolio is primarily valued using fair value measurements that are considered to be Level 2. The Company has contracted with a third party portfolio accounting service vendor for valuation of its securities portfolio. The vendor’s primary source for security valuation is IDC, which evaluates securities based on market data. IDC utilizes evaluated pricing models that vary by asset class and include available trade, bid, and other market information. Generally, the methodology includes broker quotes, proprietary models, vast descriptive terms and conditions databases, as well as extensive quality control programs.

The vendor utilizes proprietary valuation matrices for valuing all municipals securities. The initial curves for determining the price, movement, and yield relationships within the municipal matrices are derived from industry benchmark curves or sourced from a municipal trading desk. The securities are further broken down according to issuer, credit support, state of issuance, and rating to incorporate additional spreads to the industry benchmark curves.

The Company primarily uses Bloomberg Valuation Service, an independent information source that draws on quantitative models and market data contributed from over 4,000 market participants, to validate third party valuations. Any material differences between valuation sources are researched by further analyzing the various inputs that are utilized by each pricing source. No material differences were identified during the validation as of September 30, 2016 and December 31, 2015.

Loans

The fair value of performing loans is estimated by discounting expected future cash flows using a yield curve that is constructed by adding a loan spread to a market yield curve. Loan spreads are based on spreads currently observed in the market for loans of similar type and structure. Fair value for impaired loans and their respective level within the fair value hierarchy, are described in the previous disclosure related to fair value measurements of assets that are measured on a nonrecurring basis.

Bank owned life insurance

The carrying value of bank owned life insurance approximates fair value. The Company records these policies at their cash surrender value, which is estimated using information provided by insurance carriers.

Deposits

The fair value of demand deposits, savings accounts, and certain money market deposits is the amount payable on demand at the reporting date. The fair value of certificates of deposit is estimated by discounting the future cash flows using the rates currently offered for deposits of similar remaining maturities.

Borrowings

The carrying value of the Company’s repurchase agreements is a reasonable estimate of fair value. Other borrowings are discounted using the current yield curve for the same type of borrowing. For borrowings with embedded optionality, a third party source is used to value the instrument. The Company validates all third party valuations for borrowings with optionality using Bloomberg’s derivative pricing functions.

Accrued interest

The carrying amounts of accrued interest approximate fair value.

The carrying values and estimated fair values of the Company’s financial instruments at September 30, 2016 and December 31, 2015 are as follows (dollars in thousands):

			Fair Value Measurements at September 30, 2016 using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs		Total Fair Value
	Carrying Value		Level 1		Level 2		Level 3		Balance
ASSETS
Cash and cash equivalents	$	156,175	$	156,175	$	—	$	—	$	156,175
Securities available for sale	954,984		—		954,984		—		954,984
Held to maturity securities	200,839		—		209,717		—		209,717
Restricted stock	63,204		—		63,204		—		63,204
Loans held for sale	46,814		—		46,814		—		46,814
Net loans	6,112,376		—		—		6,144,971		6,144,971
Derivatives:
Interest rate lock commitments	1,422		—		—		1,422		1,422
Interest rate swap	12,218		—		12,218		—		12,218
Cash flow hedges	343		—		343		—		343
Accrued interest receivable	22,084		—		22,084		—		22,084
Bank owned life insurance	177,847		—		177,847		—		177,847
LIABILITIES
Deposits	$	6,258,506	$	—	$	6,258,166	$	—	$	6,258,166
Borrowings	925,627		—		905,653		—		905,653
Accrued interest payable	1,581		—		1,581		—		1,581
Derivatives:
Interest rate swap	12,218		—		12,218		—		12,218
Cash flow hedges	16,087		—		16,087		—		16,087
Fair value hedges	3,529		—		3,529		—		3,529

			Fair Value Measurements at December 31, 2015 using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs		Total Fair Value
	Carrying Value		Level 1		Level 2		Level 3		Balance
ASSETS
Cash and cash equivalents	$	142,660	$	142,660	$	—	$	—	$	142,660
Securities available for sale	903,292		—		903,292		—		903,292
Held to maturity securities	205,374		—		209,437		—		209,437
Restricted stock	51,828		—		51,828		—		51,828
Loans held for sale	36,030		—		36,030		—		36,030
Net loans	5,637,415		—		—		5,671,155		5,671,155
Derivatives:
Interest rate lock commitments	701		—		—		701		701
Interest rate swap	3,758		—		3,758		—		3,758
Cash flow hedges	946		—		946		—		946
Accrued interest receivable	20,760		—		20,760		—		20,760
Bank owned life insurance	173,687		—		173,687		—		173,687
LIABILITIES
Deposits	$	5,963,936	$	—	$	5,957,484	$	—	$	5,957,484
Borrowings	680,175		—		659,364		—		659,364
Accrued interest payable	1,578		—		1,578		—		1,578
Derivatives:
Interest rate swap	3,758		—		3,758		—		3,758
Cash flow hedges	10,352		—		10,352		—		10,352
Fair value hedges	888		—		888		—		888

The Company assumes interest rate risk (the risk that general interest rate levels will change) as a result of its normal operations. As a result, the fair values of the Company’s financial instruments will change when interest rate levels change and that change may be either favorable or unfavorable to the Company. Management attempts to match maturities of assets and liabilities to the extent believed necessary to minimize interest rate risk. However, borrowers with fixed rate obligations are less likely to prepay in a rising rate environment and more likely to prepay in a falling rate environment. Conversely, depositors who are receiving fixed rates are more likely to withdraw funds before maturity in a rising rate environment and less likely to do so in a falling rate environment. Management monitors rates and maturities of assets and liabilities and attempts to minimize interest rate risk by adjusting terms of new loans and deposits and by investing in securities with terms that mitigate the Company’s overall interest rate risk.

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EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2016

Earnings Per Share [Abstract]

EARNINGS PER SHARE

EARNINGS PER SHARE

Basic EPS is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted EPS is computed using the weighted average number of common shares outstanding during the period, including the effect of dilutive potential common shares outstanding attributable to stock awards.

There were approximately 118 and 51,179 shares underlying anti-dilutive awards for the three months ended September 30, 2016 and 2015, respectively, and there were approximately 579 and 54,475 shares underlying anti-dilutive awards for the nine months ended September 30, 2016 and 2015, respectively. Anti-dilutive awards were excluded from the calculation of diluted EPS.

The following is a reconciliation of the denominators of the basic and diluted EPS computations for the three and nine months ended September 30, 2016 and 2015 (in thousands except per share data):

	Net Income Available to Common Shareholders (Numerator)		Weighted Average Common Shares (Denominator)	Per Share Amount
Three months ended September 30, 2016
Net income, basic	$	20,401	43,566	$	0.47
Add: potentially dilutive common shares - stock awards	—		189	—
Diluted	$	20,401	43,755	$	0.47
Three months ended September 30, 2015
Net income, basic	$	18,216	45,087	$	0.40
Add: potentially dilutive common shares - stock awards	—		84	—
Diluted	$	18,216	45,171	$	0.40
Nine months ended September 30, 2016
Net income, basic	$	56,699	43,854	$	1.29
Add: potentially dilutive common shares - stock awards	—		114	—
Diluted	$	56,699	43,968	$	1.29
Nine months ended September 30, 2015
Net income, basic	$	49,264	45,107	$	1.09
Add: potentially dilutive common shares - stock awards	—		82	—
Diluted	$	49,264	45,189	$	1.09

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SEGMENT REPORTING DISCLOSURES

9 Months Ended

Sep. 30, 2016

Segment Reporting [Abstract]

SEGMENT REPORTING DISCLOSURES

SEGMENT REPORTING DISCLOSURES

The Company has two reportable segments: a traditional full service community bank segment and a mortgage loan origination business segment. The community bank segment includes one subsidiary bank, the Bank, which provides loan, deposit, investment, and trust services to retail and commercial customers throughout its 115 retail locations in Virginia as of September 30, 2016. The mortgage segment includes UMG, which provides a variety of mortgage loan products principally in Virginia, North Carolina, Maryland, and the Washington D.C. metro area. These loans are originated and sold primarily in the secondary market through purchase commitments from investors, which serves to mitigate the Company’s exposure to interest rate risk.

Profit and loss is measured by net income after taxes including realized gains and losses on the Company’s investment portfolio. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies. Inter-segment transactions are recorded at cost and eliminated as part of the consolidation process.

Both of the Company’s reportable segments are service-based. The mortgage business is a primarily fee-based business, while the Bank is driven principally by net interest income. The bank segment provides a distribution and referral network through its customers for the mortgage loan origination business. The mortgage segment offers a more limited referral network for the bank segment.

The community bank segment provides the mortgage segment with the short-term funds needed to originate mortgage loans through a warehouse line of credit and charges the mortgage banking segment interest. The interest rate on the warehouse line of credit for each of the three and nine months ended September 30, 2016 and 2015 was the three month LIBOR rate plus 0.15% with no floor. These transactions are eliminated in the consolidation process.

During 2015, the mortgage segment began originating loans with the intent that they be held for investment purposes. The community bank segment provides the mortgage segment with the long-term funds needed to originate these loans through a long-term funding facility and charges the mortgage segment interest. The interest charged is determined by the community bank segment based on the cost of funds available to the community bank segment for similar durations of the loans being funded by the mortgage segment.

A management fee for operations and administrative support services is charged to all subsidiaries and eliminated in the consolidated totals.

Information about reportable segments and reconciliation of such information to the consolidated financial statements for each of the three and nine months ended September 30, 2016 and 2015 is as follows (dollars in thousands):

UNION BANKSHARES CORPORATION AND SUBSIDIARIES

SEGMENT FINANCIAL INFORMATION

	Community Bank		Mortgage			Eliminations			Consolidated
Three Months Ended September 30, 2016
Net interest income	$	66,605	$	423		$	—		$	67,028
Provision for credit losses	2,455		17			—			2,472
Net interest income after provision for credit losses	64,150		406			—			64,556
Noninterest income	15,589		3,501			(140		)	18,950
Noninterest expenses	54,353		2,700			(140		)	56,913
Income before income taxes	25,386		1,207			—			26,593
Income tax expense	5,770		422			—			6,192
Net income	$	19,616	$	785		$	—		$	20,401
Total assets	$	8,251,351	$	90,692		$	(83,813	)	$	8,258,230
Three Months Ended September 30, 2015
Net interest income	$	63,075	$	369		$	—		$	63,444
Provision for credit losses	2,000		62			—			2,062
Net interest income after provision for credit losses	61,075		307			—			61,382
Noninterest income	14,287		2,608			(170		)	16,725
Noninterest expenses	50,674		2,821			(170		)	53,325
Income before income taxes	24,688		94			—			24,782
Income tax expense	6,531		35			—			6,566
Net income	$	18,157	$	59		$	—		$	18,216
Total assets	$	7,588,606	$	62,127		$	(56,420	)	$	7,594,313
Nine Months Ended September 30, 2016
Net interest income	$	195,508	$	1,027		$	—		$	196,535
Provision for credit losses	7,215		161			—			7,376
Net interest income after provision for credit losses	188,293		866			—			189,159
Noninterest income	44,137		9,185			(465		)	52,857
Noninterest expenses	158,964		7,937			(465		)	166,436
Income before income taxes	73,466		2,114			—			75,580
Income tax expense	18,145		736			—			18,881
Net income	$	55,321	$	1,378		$	—		$	56,699
Total assets	$	8,251,351	$	90,692		$	(83,813	)	$	8,258,230
Nine Months Ended September 30, 2015
Net interest income	$	188,240	$	989		$	—		$	189,229
Provision for credit losses	7,450		111			—			7,561
Net interest income after provision for credit losses	180,790		878			—			181,668
Noninterest income	40,658		7,844			(512		)	47,990
Noninterest expenses	154,011		8,906			(512		)	162,405
Income (loss) before income taxes	67,437		(184		)	—			67,253
Income tax expense (benefit)	18,060		(71		)	—			17,989
Net income (loss)	$	49,377	$	(113	)	$	—		$	49,264
Total assets	$	7,588,606	$	62,127		$	(56,420	)	$	7,594,313

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ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2016

Accounting Policies [Abstract]

Business Combinations

Business Combinations

On May 31, 2016, the Bank completed its acquisition of ODCM, a Charlottesville, Virginia based registered investment advisor with nearly $300.0 million in assets under management at the time of the acquisition. The acquisition date fair value of consideration transferred totaled $9.1 million, which consisted of $4.1 million in cash, $453,000 in stock, and the remainder being contingent on achieving certain performance metrics. The contingent consideration is carried at fair value and is reported as a component of “Other Liabilities” in the Consolidated Balance Sheet. The fair value of this liability will be assessed at each reporting period. 

In connection with the transaction, the Company recorded $4.7 million in goodwill and $4.5 million of amortizable assets, which primarily relate to the value of customer relationships. The Company is amortizing these intangibles assets over the period of expected benefit, which ranges from 5 to 10 years using a straight-line method. The transaction was accounted for using the acquisition method of accounting and, accordingly, assets acquired, liabilities assumed, and consideration exchanged were recorded at estimated fair values on the acquisition date. During the current quarter, the Company finalized the valuation of certain amortizable intangible assets which increased the fair value and also impacting the recognized goodwill. The fair values are subject to refinement for up to one year after the closing date of the acquisition.

Loans

Loans

The Company originates commercial and consumer loans to customers. A substantial portion of the loan portfolio is represented by commercial and residential real estate loans (including acquisition and development loans and residential construction loans) throughout its market area. The ability of the Company’s debtors to honor their contracts on such loans is dependent upon the real estate and general economic conditions in those markets, as well as other factors.

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off generally are reported at their outstanding unpaid principal balances adjusted for any charge-offs, the allowance for loan losses, and any deferred fees or costs on originated loans. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized as an adjustment of the related loan yield using the interest method.

As of January 1, 2016, the Company enhanced the loan portfolio segmentation to better align with how the Company manages credit risk and to better align with industry practice. Below is a summary of the new loan segmentation.

Construction and Land Development – construction loans generally made to commercial and residential builders for specific construction projects. The successful repayment of these types of loans is generally dependent upon (a) a commitment for permanent financing from the Company, or (b) from the sale of the constructed property. These loans carry more risk than both types of commercial real estate term loans due to the dynamics of construction projects, changes in interest rates, the long-term financing market, and state and local government regulations. As in commercial real estate term lending, the Company manages risk by using specific underwriting policies and procedures for these types of loans and by avoiding excessive concentrations to any one business or industry.

Also, included in this category are loans generally made to residential home builders to support their lot and home inventory needs. Repayment relies upon the successful performance of the underlying residential real estate project. This type of lending carries a higher level of risk as compared to other commercial lending. This class of lending manages risks related to residential real estate market conditions, a functioning first and secondary market in which to sell residential properties, and the borrower’s ability to manage inventory and run projects. The Company manages this risk by lending to experienced builders and developers by using specific underwriting policies and procedures for these types of loans and by avoiding excessive concentrations with any particular customer or geographic region.

Commercial Real Estate – Owner Occupied - term loans made to support owner occupied real estate properties that rely upon the successful operation of the business occupying the property for repayment. General market conditions and economic activity may affect these types of loans. In addition to using specific underwriting policies and procedures for these types of loans, the Company manages risk by avoiding concentrations to any one business or industry.

Commercial Real Estate – Non-Owner Occupied - term loans typically made to borrowers to support income producing properties that rely upon the successful operation of the property for repayment. General market conditions and economic activity may impact the performance of these types of loans. In addition to using specific underwriting policies and procedures for these types of loans, the Company manages risk by diversifying the lending to various lines of businesses, such as retail, office, office warehouse, and hotel as well as avoiding concentrations to any one business or industry.

Residential 1-4 Family – loans generally made to both commercial and residential borrowers. Mortgage loan portfolios carry risks associated with the creditworthiness of the borrower or the tenant and changes in loan-to-value ratios. The Company manages these risks through policies and procedures such as limiting loan-to-value ratios at origination, experienced underwriting, requiring standards for appraisers, and not making subprime loans.

Multifamily Real Estate – loans made to real estate investors to support permanent financing for multifamily residential income producing properties that rely on the successful operation of the property for repayment. This management mainly involves property maintenance and collection of rents due from tenants. This type of lending carries a lower level of risk as compared to other commercial lending. In addition, underwriting requirements for multifamily properties are stricter than for other non-owner-occupied property types. The Company manages this risk by avoiding concentrations with any particular customer.

Commercial and Industrial – loans generally made to support the Company’s borrowers’ need for equipment/vehicle purchases and short-term or seasonal cash flow needs. Repayment relies upon the successful operation of the business. This type of lending carries a lower level of commercial credit risk as compared to other commercial lending. The Company manages this risk by using general underwriting policies and procedures for these types of loans and by avoiding concentrations to any one business or industry.

HELOC – the consumer HELOC portfolio carries risks associated with the creditworthiness of the borrower and changes in loan-to-value ratios. The Company manages these risks through policies and procedures such as limiting loan-to-value ratios at origination, experienced underwriting, requiring standards for appraisers, and not making subprime loans.

Auto – the consumer indirect auto lending portfolio generally carries certain risks associated with the values of the collateral that management must mitigate. The Company focuses its indirect auto lending on one to two year old used vehicles where substantial depreciation has already occurred thereby minimizing the risk of significant loss of collateral values in the future. This type of lending places reliance on computer-based loan approval systems to supplement other underwriting standards.

Consumer and all other - portfolios carry risks associated with the creditworthiness of the borrower and changes in the economic environment. The Company manages these risks through policies and procedures such as experienced underwriting, maximum debt to income ratios, and minimum borrower credit scores. Also included in this category are loans that generally support small business lines of credit and agricultural lending neither of which are a material source of business for the Company.

Affordable Housing Entities

Affordable Housing Entities

The Company invests in private investment funds that make equity investments in multifamily affordable housing properties that provide affordable housing tax credits for these investments. The activities of these entities are financed with a combination of invested equity capital and debt.

Adoption of New Accounting Standards and Recent Accounting Pronouncements

Adoption of New Accounting Standards

In February 2015, the FASB issued revised guidance to simplify the consolidation assessment required to evaluate whether organizations should consolidate certain legal entities such as limited partnerships, limited liability corporations, and securitization structures. The guidance also removed the indefinite deferral of specialized guidance for certain investment funds. The Company adopted ASU No. 2015-02, “Amendments to the Consolidation Analysis” during the first quarter of 2016. The adoption of ASU 2015-02 did not have a material impact on the Company’s consolidated financial statements.

Recent Accounting Pronouncements

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

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” This ASU requires lessees to put most leases on their balance sheets, but recognize expenses in the income statement in a manner similar to today’s accounting. The guidance also eliminates the real estate-specific provisions and changes the guidance on sale-leaseback transactions, initial direct costs, and lease executory costs for all entities. For lessors, the standard modifies the classification criteria and the accounting for sales-type and direct financing leases. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The Company is currently assessing the impact ASU 2016-02 will have on its consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-05, “Derivatives and Hedging (Topic 815): Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships.” This ASU clarifies that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument in an existing hedging relationship would not, in and of itself, be considered a termination of the derivative instrument or a change in a critical term of the hedging relationship. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. The Company does not expect the adoption of ASU 2016-05 to have a material impact on its consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-06, “Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments.” This ASU clarifies that in assessing whether an embedded contingent put or call option is clearly and closely related to the debt host, an entity is required to perform only the four-step decision sequence in ASC 815-15-25-42 (as amended by the ASU). The entity does not have to separately assess whether the event that triggers its ability to exercise the contingent option is itself indexed only to interest rates or credit risk. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. The Company has concluded the adoption of ASU 2016-06 will not have a material impact on its consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-07, “Investments – Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting.” This ASU simplifies the equity method of accounting by eliminating the requirement to retrospectively apply the equity method to an investment that subsequently qualifies for such accounting as a result of an increase in the level of ownership interest or degree of influence. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. The amendments should be applied prospectively and early adoption is permitted. The Company has concluded the adoption of ASU 2016-07 will not have a material impact on its consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net).” This ASU amends the principal-versus-agent implementation guidance and illustrations in the FASB’s new revenue standard (ASU 2014-09) and clarifies that an entity should evaluate whether it is the principal or the agent for each specified good or service promised in a contract with a customer. The ASU has the same effective date as the new revenue standard (as amended by the one-year deferral and the early adoption provisions in ASU 2015-14 delaying the effective date to fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017). In addition, entities are required to adopt the ASU by using the same transition method they used to adopt the new revenue standard. The Company is currently assessing the impact ASU 2016-08 will have on its consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-09, “Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” This ASU simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted; however, if the Company elects to early adopt, then all amendments must be adopted in the same period. The Company has concluded the adoption of ASU 2016-07 will not have a material impact on its consolidated financial statements.

In April 2016, the FASB issued ASU No. 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing.” This ASU amends certain aspects of the FASB’s new revenue standard, specifically the standard’s guidance on identifying performance obligations and the implementation guidance on licensing. The amendments in this update affect the guidance in ASU 2014-09, Revenue from Contracts with Customers, which is not yet effective. The ASU has the same effective date as the new revenue standard (as amended by the one-year deferral and the early adoption provisions in ASU 2015-14). The Company is currently assessing the impact ASU 2016-10 will have on its consolidated financial statements.

In May 2016, the FASB issued ASU No. 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients.”This ASU amends certain aspects of the FASB's new revenue standard to reduce the potential for diversity in practice at the initial application of Topic 606 by entities with transactions that fall into the scope of this guidance, as well as reducing the cost and complexity of applying Topic 606 at the transition date and on a continual basis. The amendment affects ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), that is not yet effective. The Company is currently assessing the impact ASU 2016-12 will have on its consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.”This ASU updates the existing guidance to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The amendment replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and required consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendment is effective for fiscal years beginning after December 15, 2019. The Company is currently assessing the impact ASU 2016-13 will have on its consolidated financial statements.

In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Payments (a consensus of Merging Issues Task Force)." This ASUattempts to clarify how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The purpose of this update is to reduce existing diversity in practice in eight areas addressed by the update. The amendment will be effective for the Company for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted. The Company has concluded the adoption of ASU 2016-15 will not have a material impact on its consolidated financial statements.

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SECURITIES (Tables)

9 Months Ended

Sep. 30, 2016

Gross Realized Gain and Losses on the Sale of Securities

The following table presents the gross realized gains and losses on the sale of securities available for sale and the proceeds from the sale of securities during the three and nine months ended September 30, 2016 and 2015 (dollars in thousands). The Company did not sell any investment securities that are held to maturity.

	Three Months Ended September 30, 2016		Nine Months Ended September 30, 2016
Realized gains (losses):
Gross realized gains	$	—	$	242
Gross realized losses	—		(97		)
Net realized gains	$	—	$	145
Proceeds from sales of securities	$	2,848	$	18,272

	Three Months Ended September 30, 2015		Nine Months Ended September 30, 2015
Realized gains (losses):
Gross realized gains	$	75	$	759
Gross realized losses	—		(87		)
Net realized gains	$	75	$	672
Proceeds from sales of securities	$	5,771	$	63,928

Available-for-sale Securities

Amortized Cost, Gross Unrealized Gains and Losses, and Estimated Fair Values of Investment Securities

Available for Sale

The amortized cost, gross unrealized gains and losses, and estimated fair values of securities available for sale as of September 30, 2016 and December 31, 2015 are summarized as follows (dollars in thousands):

	Amortized		Gross Unrealized					Estimated
	Cost		Gains		(Losses)			Fair Value
September 30, 2016
Obligations of states and political subdivisions	$	266,291	$	13,147	$	(215	)	$	279,223
Corporate bonds	122,130		1,196		(1,579		)	121,747
Mortgage-backed securities	529,228		11,877		(509		)	540,596
Other securities	13,385		33		—			13,418
Total available for sale securities	$	931,034	$	26,253	$	(2,303	)	$	954,984
December 31, 2015
Obligations of states and political subdivisions	$	257,740	$	10,479	$	(140	)	$	268,079
Corporate bonds	77,628		55		(1,704		)	75,979
Mortgage-backed securities	544,823		6,127		(2,779		)	548,171
Other securities	11,085		—		(22		)	11,063
Total available for sale securities	$	891,276	$	16,661	$	(4,645	)	$	903,292

Schedule of Gross Unrealized Losses and Fair Value of Investments

The following table shows the gross unrealized losses and fair value (in thousands) of the Company’s available for sale investments with unrealized losses that are not deemed to be other-than-temporarily impaired as of September 30, 2016 and December 31, 2015. These are aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position.

	Less than 12 months					More than 12 months					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
September 30, 2016
Obligations of states and political subdivisions	$	11,640	$	(209	)	$	655	$	(6	)	$	12,295	$	(215	)
Mortgage-backed securities	37,739		(156		)	43,430		(353		)	81,169		(509		)
Corporate bonds and other securities	5,059		(16		)	41,000		(1,563		)	46,059		(1,579		)
Total available for sale	$	54,438	$	(381	)	$	85,085	$	(1,922	)	$	139,523	$	(2,303	)
December 31, 2015
Obligations of states and political subdivisions	$	8,114	$	(70	)	$	4,950	$	(70	)	$	13,064	$	(140	)
Mortgage-backed securities	287,113		(2,442		)	21,660		(337		)	308,773		(2,779		)
Corporate bonds and other securities	36,157		(751		)	19,558		(975		)	55,715		(1,726		)
Total available for sale	$	331,384	$	(3,263	)	$	46,168	$	(1,382	)	$	377,552	$	(4,645	)

Schedule of Amortized Cost and Estimated Fair Value of Securities

The following table presents the amortized cost and estimated fair value of available for sale securities as of September 30, 2016 and December 31, 2015, by contractual maturity (dollars in thousands). Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	September 30, 2016				December 31, 2015
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due in one year or less	$	16,667	$	16,860	$	8,380	$	8,370
Due after one year through five years	109,700		113,093		65,326		66,996
Due after five years through ten years	314,903		324,270		296,864		301,920
Due after ten years	489,764		500,761		520,706		526,006
Total securities available for sale	$	931,034	$	954,984	$	891,276	$	903,292

Schedule of Securities Pledged to Secure Public Deposits, Repurchase Agreements, and for Other Purposes

The following table presents the estimated fair value of available for sale securities which were pledged to secure public deposits, repurchase agreements, and for other purposes as permitted or required by law as of September 30, 2016 and December 31, 2015 (dollars in thousands):

	September 30, 2016		December 31, 2015
Public deposits	$	183,841	$	184,635
Repurchase agreements	116,844		126,120
Other purposes (1)	23,326		26,546
Total pledged securities	$	324,011	$	337,301

(1) The "Other purposes" category consists of borrowings, derivatives, and accounts held at the Bank.

Held-to-maturity Securities

Schedule of Amortized Cost and Estimated Fair Value of Securities

The following table presents the amortized cost and estimated fair value of held to maturity securities as of September 30, 2016 and December 31, 2015, by contractual maturity (dollars in thousands). Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	September 30, 2016				December 31, 2015
	Carrying Value (1)		Estimated Fair Value		Carrying Value (1)		Estimated Fair Value
Due in one year or less	$	850	$	850	$	1,488	$	1,491
Due after one year through five years	25,918		26,561		4,294		4,348
Due after five years through ten years	48,243		50,017		44,736		45,501
Due after ten years	125,828		132,289		154,856		158,097
Total securities held to maturity	$	200,839	$	209,717	$	205,374	$	209,437

(1) The carrying value includes $5.6 million as of September 30, 2016 and $6.8 million as of December 31, 2015 of net unrealized gains present at the time of transfer from available for sale securities, net of any accretion.

Schedule of Securities Pledged to Secure Public Deposits, Repurchase Agreements, and for Other Purposes

The following table presents the estimated fair value of held to maturity securities which were pledged to secure public deposits as permitted or required by law as of September 30, 2016 and December 31, 2015 (dollars in thousands):

	September 30, 2016		December 31, 2015
Public deposits	$	209,717	$	207,140
Total pledged securities	$	209,717	$	207,140

Schedule of Carrying Values, Gross Unrealized Gains and Losses and Estimated Fair Value of Securities

The carrying value, gross unrealized gains and losses, and estimated fair values of securities held to maturity as of September 30, 2016 and December 31, 2015 are summarized as follows (dollars in thousands):

	Carrying		Gross Unrealized					Estimated
	Value (1)		Gains		(Losses)			Fair Value
September 30, 2016
Obligations of states and political subdivisions	$	200,839	$	8,959	$	(81	)	$	209,717
December 31, 2015
Obligations of states and political subdivisions	$	205,374	$	5,748	$	(1,685	)	$	209,437

(1) The carrying value includes $5.6 million as of September 30, 2016 and $6.8 million as of December 31, 2015 of net unrealized gains present at the time of transfer from available for sale securities, net of any accretion.

Gross Unrealized Losses and Fair Value of Securities

The following table shows the gross unrealized losses and fair value (in thousands) of the Company’s held to maturity securities with unrealized losses that are not deemed to be other-than-temporarily impaired as of September 30, 2016 and December 31, 2015. These are aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position.

	Less than 12 months					More than 12 months					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
September 30, 2016
Obligations of states and political subdivisions	$	—	$	—		$	661	$	(81	)	$	661	$	(81	)
December 31, 2015
Obligations of states and political subdivisions	$	7,056	$	(1,685	)	$	—	$	—		$	7,056	$	(1,685	)

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LOANS AND ALLOWANCE FOR LOAN LOSSES (Tables)

9 Months Ended

Sep. 30, 2016

Accounts, Notes, Loans and Financing Receivable [Line Items]

Loans Stated at Face Amount, Net of Unearned Income

Loans are stated at their face amount, net of deferred fees and costs, and consist of the following at September 30, 2016 and December 31, 2015 (dollars in thousands):

	September 30, 2016		December 31, 2015
Construction and Land Development	$	776,430	$	749,720
Commercial Real Estate - Owner Occupied	857,142		860,086
Commercial Real Estate - Non-Owner Occupied	1,454,828		1,270,480
Multifamily Real Estate	339,313		322,528
Commercial & Industrial	509,857		435,365
Residential 1-4 Family	999,361		978,469
Auto	255,188		234,061
HELOC	524,097		516,726
Consumer and all other	432,702		304,027
Total loans held for investment, net(1)	$	6,148,918	$	5,671,462

(1)Loans, as presented, are net of deferred fees and costs totaling $3.3 million and $3.0 million as of September 30, 2016 and December 31, 2015, respectively.

Summary of Aging of the Loan Portfolio by Class

The following table shows the aging of the Company’s loan portfolio, by segment, at September 30, 2016 (dollars in thousands):

	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days and still Accruing		PCI		Nonaccrual		Current		Total Loans
Construction and Land Development	$	309	$	697	$	610	$	3,205	$	2,301	$	769,308	$	776,430
Commercial Real Estate - Owner Occupied	1,411		365		304		19,064		1,609		834,389		857,142
Commercial Real Estate - Non-Owner Occupied	324		—		—		18,141		—		1,436,363		1,454,828
Multifamily Real Estate	—		—		—		2,079		—		337,234		339,313
Commercial & Industrial	567		51		77		1,145		1,344		506,673		509,857
Residential 1-4 Family	4,985		6,345		2,005		16,828		5,279		963,919		999,361
Auto	1,846		239		28		—		231		252,844		255,188
HELOC	2,600		899		407		1,498		1,464		517,229		524,097
Consumer and all other	1,713		1,037		98		386		449		429,019		432,702
Total loans held for investment	$	13,755	$	9,633	$	3,529	$	62,346	$	12,677	$	6,046,978	$	6,148,918

The following table shows the aging of the Company’s loan portfolio, by segment, at December 31, 2015 (dollars in thousands):

	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days and still Accruing		PCI		Nonaccrual		Current		Total Loans
Construction and Land Development	$	3,155	$	380	$	128	$	5,986	$	2,113	$	737,958	$	749,720
Commercial Real Estate - Owner Occupied	1,714		118		103		27,388		3,904		826,859		860,086
Commercial Real Estate - Non-Owner Occupied	771		—		723		13,519		100		1,255,367		1,270,480
Multifamily Real Estate	—		—		272		1,555		—		320,701		322,528
Commercial & Industrial	1,056		27		124		1,813		429		431,916		435,365
Residential 1-4 Family	15,023		6,774		3,638		21,159		3,563		928,312		978,469
Auto	2,312		233		60		—		192		231,264		234,061
HELOC	2,589		1,112		762		1,791		1,348		509,124		516,726
Consumer and all other	1,167		689		19		526		287		301,339		304,027
Total loans held for investment	$	27,787	$	9,333	$	5,829	$	73,737	$	11,936	$	5,542,840	$	5,671,462

Impaired Loans by Class

The Company measures the amount of impairment by evaluating loans either in their collective homogeneous pools or individually. The following table shows the Company’s impaired loans, excluding PCI loans related to the StellarOne acquisition, by segment at September 30, 2016 and December 31, 2015 (dollars in thousands):

	September 30, 2016						December 31, 2015
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
Loans without a specific allowance
Construction and Land Development	$	25,171	$	25,647	$	—	$	33,250	$	33,731	$	—
Commercial Real Estate - Owner Occupied	6,414		6,579		—		7,781		8,983		—
Commercial Real Estate - Non-Owner Occupied	3,752		3,752		—		5,328		5,325		—
Multifamily Real Estate	—		—		—		3,828		3,828		—
Commercial & Industrial	952		1,362		—		711		951		—
Residential 1-4 Family	9,066		10,059		—		7,564		8,829		—
Auto	—		—		—		7		7		—
HELOC	1,347		1,416		—		1,786		2,028		—
Consumer and all other	173		223		—		211		211		—
Total impaired loans without a specific allowance	$	46,875	$	49,038	$	—	$	60,466	$	63,893	$	—
Loans with a specific allowance
Construction and Land Development	$	2,070	$	2,442	$	123	$	3,167	$	3,218	$	538
Commercial Real Estate - Owner Occupied	1,198		1,215		5		3,237		3,239		358
Commercial Real Estate - Non-Owner Occupied	40		40		1		907		907		75
Commercial & Industrial	2,496		2,498		642		1,952		1,949		441
Residential 1-4 Family	3,607		3,794		115		6,065		6,153		418
Auto	231		270		1		192		199		1
HELOC	706		791		17		769		925		76
Consumer and all other	278		650		88		363		512		95
Total impaired loans with a specific allowance	$	10,626	$	11,700	$	992	$	16,652	$	17,102	$	2,002
Total impaired loans	$	57,501	$	60,738	$	992	$	77,118	$	80,995	$	2,002

The following tables show the average recorded investment and interest income recognized for the Company’s impaired loans, excluding PCI loans related to the StellarOne acquisition, by segment for the three and nine months ended September 30, 2016 and 2015 (dollars in thousands):

	Three Months Ended September 30, 2016				Nine Months Ended September 30, 2016
	Average Investment		Interest Income Recognized		Average Investment		Interest Income Recognized
Construction and Land Development	$	28,195	$	464	$	27,645	$	1,346
Commercial Real Estate - Owner Occupied	7,691		72		7,862		230
Commercial Real Estate - Non-Owner Occupied	3,777		33		3,759		98
Commercial & Industrial	4,628		42		4,964		134
Residential 1-4 Family	13,106		89		13,439		267
Auto	271		—		289		4
HELOC	2,118		7		2,185		35
Consumer and all other	453		—		620		6
Total impaired loans	$	60,239	$	707	$	60,763	$	2,120

	Three Months Ended September 30, 2015				Nine Months Ended September 30, 2015
	Average Investment		Interest Income Recognized		Average Investment		Interest Income Recognized
Construction and Land Development	$	33,145	$	530	$	33,727	$	1,579
Commercial Real Estate - Owner Occupied	18,859		195		18,709		547
Commercial Real Estate - Non-Owner Occupied	8,596		96		8,809		270
Multifamily Real Estate	4,593		75		4,598		222
Commercial & Industrial	3,503		42		3,633		125
Residential 1-4 Family	11,494		160		11,723		374
Auto	115		1		121		5
HELOC	1,710		14		1,727		36
Consumer and all other	534		6		594		20
Total impaired loans	$	82,549	$	1,119	$	83,641	$	3,178

Summary of Modified Loans that Continue to Accrue Interest Under the Terms of Restructuring Agreement

The following table provides a summary, by segment, of modified loans that continue to accrue interest under the terms of the restructuring agreement, which are considered to be performing, and modified loans that have been placed on nonaccrual status, which are considered to be nonperforming, as of September 30, 2016 and December 31, 2015 (dollars in thousands):

	September 30, 2016					December 31, 2015
	No. of Loans	Recorded Investment		Outstanding Commitment		No. of Loans	Recorded Investment		Outstanding Commitment
Performing
Construction and Land Development	5	$	3,744	$	—	6	$	3,349	$	—
Commercial Real Estate - Owner Occupied	5	2,070		—		5	1,530		—
Commercial Real Estate - Non-Owner Occupied	2	2,390		—		2	2,390		—
Commercial & Industrial	4	663		—		5	261		—
Residential 1-4 Family	25	2,957		—		27	3,173		—
Consumer and all other	—	—		—		1	77		—
Total performing	41	$	11,824	$	—	46	$	10,780	$	—
Nonperforming
Construction and Land Development	2	$	215	$	—	2	$	321	$	—
Commercial Real Estate - Owner Occupied	2	161		—		1	137		—
Commercial & Industrial	1	125		—		1	2		—
Residential 1-4 Family	8	951		—		6	1,142		—
HELOC	—	—		—		1	319		—
Total nonperforming	13	$	1,452	$	—	11	$	1,921	$	—
Total performing and nonperforming	54	$	13,276	$	—	57	$	12,701	$	—

Schedule of TDR by Class and Modification Type

The following table shows, by segment and modification type, TDRs that occurred during the three and nine months ended September 30, 2016 (dollars in thousands):

	Three Months Ended September 30, 2016			Nine Months Ended September 30, 2016
	No. of Loans	Recorded  Investment at Period End		No. of Loans	Recorded  Investment at Period End
Term modification, at a market rate
Construction and Land Development	—	$	—	1	$	1,177
Commercial Real Estate - Owner Occupied	—	—		2	739
Commercial & Industrial	1	457		1	457
Residential 1-4 Family	—	—		2	474
Total loan term extended at a market rate	1	$	457	6	$	2,847
Term modification, below market rate
Residential 1-4 Family	—	$	—	1	$	36
Total loan term extended at a below market rate	—	$	—	1	$	36
Interest rate modification, below market rate
Commercial & Industrial	—	$	—	1	$	125
Total interest only at below market rate of interest	—	$	—	1	$	125
Total	1	$	457	8	$	3,008

The following table shows, by segment and modification type, TDRs that occurred during the three and nine months ended September 30, 2015 (dollars in thousands):

	Three Months Ended September 30, 2015			Nine Months Ended September 30, 2015
	No. of Loans	Recorded  Investment at Period End		No. of Loans	Recorded  Investment at Period End
Term modification, at a market rate
Commercial Real Estate - Owner Occupied	—	$	—	1	$	117
Commercial & Industrial	—	—		1	17
Total loan term extended at a market rate	—	$	—	2	$	134
Term modification, below market rate
Construction and Land Development	1	$	400	1	$	400
Commercial Real Estate - Owner Occupied	—	—		1	871
Residential 1-4 Family	3	674		3	674
Total loan term extended at a below market rate	4	$	1,074	5	$	1,945
Total	4	$	1,074	7	$	2,079

Allowance for Loan Loss Activity, by Portfolio Segment, Balances for Allowance for Credit Losses, and Loans Based on Impairment Methodology

The following table shows the allowance for loan loss activity, balances for allowance for loan losses, and loan balances based on impairment methodology by segment for the nine months ended and as of September 30, 2016. The table below includes the provision for loan losses. As discussed in Note 1 “Accounting Policies,” the Company enhanced its loan segmentation for purposes of the allowance calculation as well as its disclosures. The impact of this enhancement is reflected in the provision amounts in the table below. In addition, a $175,000 provision was recognized during the nine months ended September 30, 2016 for unfunded loan commitments for which the reserves are recorded as a component of “Other Liabilities” on the Company’s Consolidated Balance Sheets. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories (dollars in thousands):

	Allowance for loan losses
	Balance, beginning of the year		Recoveries credited to allowance		Loans charged off			Provision charged to operations			Balance, end of period
Construction and Land Development	$	6,040	$	165	$	(869	)	$	5,464		$	10,800
Commercial Real Estate - Owner Occupied	4,614		112		(772		)	(770		)	3,184
Commercial Real Estate - Non-Owner Occupied	6,929		3		(1		)	(813		)	6,118
Multifamily Real Estate	1,606		—		—			(658		)	948
Commercial & Industrial	3,163		422		(1,301		)	3,119			5,403
Residential 1-4 Family	5,414		466		(741		)	518			5,657
Auto	1,703		243		(815		)	(260		)	871
HELOC	2,934		229		(1,272		)	(534		)	1,357
Consumer and all other	1,644		382		(957		)	1,135			2,204
Total	$	34,047	$	2,022	$	(6,728	)	$	7,201		$	36,542

	Loans individually evaluated for impairment				Loans collectively evaluated for impairment				Loans acquired with deteriorated credit quality				Total
	Loans		ALL		Loans		ALL		Loans		ALL		Loans		ALL
Construction and Land Development	$	27,241	$	123	$	745,984	$	10,677	$	3,205	$	—	$	776,430	$	10,800
Commercial Real Estate - Owner Occupied	7,612		5		830,466		3,179		19,064		—		857,142		3,184
Commercial Real Estate - Non-Owner Occupied	3,792		1		1,432,895		6,117		18,141		—		1,454,828		6,118
Multifamily Real Estate	—		—		337,234		948		2,079		—		339,313		948
Commercial & Industrial	3,448		642		505,264		4,761		1,145		—		509,857		5,403
Residential 1-4 Family	12,673		115		969,860		5,542		16,828		—		999,361		5,657
Auto	231		1		254,957		870		—		—		255,188		871
HELOC	2,053		17		520,546		1,340		1,498		—		524,097		1,357
Consumer and all other	451		88		431,865		2,116		386		—		432,702		2,204
Total loans held for investment, net	$	57,501	$	992	$	6,029,071	$	35,550	$	62,346	$	—	$	6,148,918	$	36,542

The following table shows the allowance for loan loss activity, balances for allowance for loan losses, and loan balances based on impairment methodology by segment for the nine months ended and as of September 30, 2015. In addition, a $300,000 provision was recognized during the nine months ended September 30, 2015 for unfunded loan commitments. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories (dollars in thousands):

	Allowance for loan losses
	Balance, beginning of the year		Recoveries credited to allowance		Loans charged off			Provision charged to operations		Balance, end of period
Construction and Land Development	$	4,856	$	594	$	(415	)	$	169	$	5,204
Commercial Real Estate - Owner Occupied	4,640		15		(481		)	630		4,804
Commercial Real Estate - Non-Owner Occupied	7,256		232		(2,850		)	1,744		6,382
Multifamily Real Estate	1,374		—		—			296		1,670
Commercial & Industrial	2,610		776		(2,081		)	1,485		2,790
Residential 1-4 Family	5,607		513		(1,303		)	927		5,744
Auto	1,297		213		(545		)	600		1,565
HELOC	2,675		237		(749		)	671		2,834
Consumer and all other	2,069		414		(946		)	739		2,276
Total	$	32,384	$	2,994	$	(9,370	)	$	7,261	$	33,269

	Loans individually evaluated for impairment				Loans collectively evaluated for impairment				Loans acquired with deteriorated credit quality				Total
	Loans		ALL		Loans		ALL		Loans		ALL		Loans		ALL
Construction and Land Development	$	33,647	$	175	$	653,370	$	5,029	$	7,628	$	—	$	694,645	$	5,204
Commercial Real Estate - Owner Occupied	18,564		677		816,320		4,127		28,694		—		863,578		4,804
Commercial Real Estate - Non-Owner Occupied	8,632		137		1,201,649		6,245		13,326		—		1,223,607		6,382
Multifamily Real Estate	4,607		—		323,409		1,670		1,943		—		329,959		1,670
Commercial & Industrial	3,439		318		403,973		2,472		2,245		—		409,657		2,790
Residential 1-4 Family	10,679		615		954,730		5,129		22,379		—		987,788		5,744
Auto	89		1		225,905		1,564		—		—		225,994		1,565
HELOC	1,502		9		511,048		2,825		1,812		—		514,362		2,834
Consumer and all other	459		80		292,993		2,196		579		—		294,031		2,276
Total loans held for investment, net	$	81,618	$	2,012	$	5,383,397	$	31,257	$	78,606	$	—	$	5,543,621	$	33,269

Loans Receivables Related Risk Rating

The following table shows the recorded investment in all loans, excluding PCI loans, by segment with their related risk level as of September 30, 2016 (dollars in thousands):

	Pass		Special Mention		Substandard		Doubtful		Total
Construction and Land Development	$	690,623	$	56,433	$	25,559	$	610	$	773,225
Commercial Real Estate - Owner Occupied	806,096		26,090		5,892		—		838,078
Commercial Real Estate - Non-Owner Occupied	1,399,369		33,608		3,710		—		1,436,687
Multifamily Real Estate	313,497		23,737		—		—		337,234
Commercial & Industrial	495,764		10,088		2,860		—		508,712
Residential 1-4 Family	950,707		22,163		7,571		2,092		982,533
Auto	252,549		2,459		91		89		255,188
HELOC	516,178		4,745		1,305		371		522,599
Consumer and all other	428,574		3,503		42		197		432,316
Total	$	5,853,357	$	182,826	$	47,030	$	3,359	$	6,086,572

The following table shows the recorded investment in all loans, excluding PCI loans, by segment with their related risk level as of December 31, 2015 (dollars in thousands):

	Pass		Special Mention		Substandard		Doubtful		Total
Construction and Land Development	$	663,067	$	52,650	$	27,980	$	37	$	743,734
Commercial Real Estate - Owner Occupied	800,979		20,856		8,931		1,932		832,698
Commercial Real Estate - Non-Owner Occupied	1,228,956		22,341		5,664		—		1,256,961
Multifamily Real Estate	315,128		2,017		3,828		—		320,973
Commercial & Industrial	414,333		16,724		2,396		99		433,552
Residential 1-4 Family	912,839		34,728		8,037		1,706		957,310
Auto	230,670		3,109		194		88		234,061
HELOC	507,514		4,801		1,611		1,009		514,935
Consumer and all other	299,014		3,996		231		260		303,501
Total	$	5,372,500	$	161,222	$	58,872	$	5,131	$	5,597,725

Schedule of Acquired Loan Portfolio and Accretable Yield

The following shows changes in the accretable yield for loans accounted for under ASC 310-30, Receivables – Loans and Debt Securities Acquired with Deteriorated Credit Quality, for the periods presented (dollars in thousands):

	For the Nine Months Ended September 30,
	2016			2015
Balance at beginning of period	$	22,139		$	28,956
Accretion	(4,232		)	(4,707		)
Reclass of nonaccretable difference due to improvement in expected cash flows	3,580			3,168
Other, net (1)	(1,149		)	(5,624		)
Balance at end of period	$	20,338		$	21,793

(1)This line item represents changes in the cash flows expected to be collected due to the impact of non-credit changes such as prepayment assumptions, changes in interest rates on variable rate PCI loans, and discounted payoffs that occurred in the quarter.

Purchased Impaired

Accounts, Notes, Loans and Financing Receivable [Line Items]

Summary of Aging of the Loan Portfolio by Class

The following table shows the PCI loan portfolios, by segment and their delinquency status, at September 30, 2016 (dollars in thousands):

	30-89 Days Past Due		Greater than 90 Days		Current		Total
Construction and Land Development	$	29	$	—	$	3,176	$	3,205
Commercial Real Estate - Owner Occupied	737		634		17,693		19,064
Commercial Real Estate - Non-Owner Occupied	1,921		125		16,095		18,141
Multifamily Real Estate	—		—		2,079		2,079
Commercial & Industrial	45		57		1,043		1,145
Residential 1-4 Family	1,686		775		14,367		16,828
HELOC	122		435		941		1,498
Consumer and all other	—		—		386		386
Total	$	4,540	$	2,026	$	55,780	$	62,346

The following table shows the PCI loan portfolios, by segment and their delinquency status, at December 31, 2015 (dollars in thousands):

	30-89 Days Past Due		Greater than 90 Days		Current		Total
Construction and Land Development	$	369	$	241	$	5,376	$	5,986
Commercial Real Estate - Owner Occupied	1,139		1,412		24,837		27,388
Commercial Real Estate - Non-Owner Occupied	755		202		12,562		13,519
Multifamily Real Estate	—		—		1,555		1,555
Commercial & Industrial	209		21		1,583		1,813
Residential 1-4 Family	2,143		1,923		17,093		21,159
HELOC	410		458		923		1,791
Consumer and all other	—		—		526		526
Total	$	5,025	$	4,257	$	64,455	$	73,737

Loans Receivables Related Risk Rating

The following table shows the recorded investment in only PCI loans by segment with their related risk level as of September 30, 2016 (dollars in thousands):

	Pass		Special Mention		Substandard		Doubtful		Total
Construction and Land Development	$	1,102	$	1,677	$	426	$	—	$	3,205
Commercial Real Estate - Owner Occupied	5,313		9,036		4,715		—		19,064
Commercial Real Estate - Non-Owner Occupied	4,855		11,562		1,724		—		18,141
Multifamily Real Estate	347		1,732		—		—		2,079
Commercial & Industrial	93		496		556		—		1,145
Residential 1-4 Family	8,085		5,297		2,941		505		16,828
HELOC	932		130		—		436		1,498
Consumer and all other	326		38		22		—		386
Total	$	21,053	$	29,968	$	10,384	$	941	$	62,346

The following table shows the recorded investment in only PCI loans by segment with their related risk level as of December 31, 2015 (dollars in thousands):

	Pass		Special Mention		Substandard		Doubtful		Total
Construction and Land Development	$	2,059	$	1,778	$	1,908	$	241	$	5,986
Commercial Real Estate - Owner Occupied	5,260		15,530		6,598		—		27,388
Commercial Real Estate - Non-Owner Occupied	4,442		7,827		1,250		—		13,519
Multifamily Real Estate	356		1,199		—		—		1,555
Commercial & Industrial	144		359		1,289		21		1,813
Residential 1-4 Family	9,098		6,380		4,605		1,076		21,159
HELOC	923		410		20		438		1,791
Consumer and all other	57		379		90		—		526
Total	$	22,339	$	33,862	$	15,760	$	1,776	$	73,737

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INTANGIBLE ASSETS (Tables)

9 Months Ended

Sep. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Estimated Remaining Amortization Expense of Core Deposit Intangibles

As of September 30, 2016, the estimated remaining amortization expense of core deposit intangibles and other amortizable intangible assets is as follows (dollars in thousands):

For the remaining three months of 2016	$	1,745
For the year ending December 31, 2017	6,070
For the year ending December 31, 2018	4,624
For the year ending December 31, 2019	3,573
For the year ending December 31, 2020	2,508
Thereafter	3,823
Total estimated amortization expense	$	22,343

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BORROWINGS (Tables)

9 Months Ended

Sep. 30, 2016

Debt Disclosure [Abstract]

Short-Term Borrowings

Total short-term borrowings consist of the following as of September 30, 2016 and December 31, 2015 (dollars in thousands):

	September 30, 2016			December 31, 2015
Securities sold under agreements to repurchase	$	64,225		$	84,977
Other short-term borrowings	601,500			304,000
Total short-term borrowings	$	665,725		$	388,977
Maximum month-end outstanding balance	$	678,262		$	445,761
Average outstanding balance during the period	583,418			379,783
Average interest rate (year-to-date)	0.48		%	0.25		%
Average interest rate at end of period	0.48		%	0.27		%
Other short-term borrowings:
Federal funds purchased	$	6,000		$	—
FHLB	579,500			304,000
Other lines of credit	16,000			—

Trust Preferred Capital Notes Qualify for Tier 1 Capital

The trust preferred capital notes currently qualify for Tier 1 capital of the Company for regulatory purposes.

	Trust Preferred Capital Securities(1)		Investment(1)		Spread to  3-Month LIBOR		Rate		Maturity
Trust Preferred Capital Note - Statutory Trust I	$	22,500,000	$	696,000	2.75	%	3.60	%	6/17/2034
Trust Preferred Capital Note - Statutory Trust II	36,000,000		1,114,000		1.40	%	2.25	%	6/15/2036
VFG Limited Liability Trust I Indenture	20,000,000		619,000		2.73	%	3.58	%	3/18/2034
FNB Statutory Trust II Indenture	12,000,000		372,000		3.10	%	3.95	%	6/26/2033
Total	$	90,500,000	$	2,801,000

(1)The total of the trust preferred capital securities and investments in the respective trusts represents the principal asset of the Company's junior subordinated debt securities with like maturities and like interest rates to the capital securities. The Company's investment in the trusts is reported in "Other Assets" within the Consolidated Balance Sheets.

Advances from the FHLB

As of September 30, 2016, the Company had long-term advances from the FHLB consisting of the following (dollars in thousands):

Long-term Type	Spread to 3-Month LIBOR		Interest Rate (1)		Maturity Date	Advance Amount
Adjustable Rate Credit	0.44	%	1.29	%	8/23/2022	$	55,000
Adjustable Rate Credit	0.45	%	1.31	%	11/23/2022	65,000
Adjustable Rate Credit	0.45	%	1.31	%	11/23/2022	10,000
Adjustable Rate Credit	0.45	%	1.31	%	11/23/2022	10,000
Fixed Rate	—		3.62	%	11/28/2017	10,000
Fixed Rate	—		3.75	%	7/30/2018	5,000
Fixed Rate	—		3.97	%	7/30/2018	5,000
Fixed Rate Hybrid	—		2.11	%	10/5/2016	25,000
						$	185,000
(1) Interest rates calculated using non-rounded numbers.

As of December 31, 2015, the Company had long-term advances from the FHLB consisting of the following (dollars in thousands):

Long-term Type	Spread to 3-Month LIBOR		Interest Rate (1)		Maturity Date	Advance Amount
Adjustable Rate Credit	0.44	%	1.05	%	8/23/2022	$	55,000
Adjustable Rate Credit	0.45	%	1.07	%	11/23/2022	65,000
Adjustable Rate Credit	0.45	%	1.07	%	11/23/2022	10,000
Adjustable Rate Credit	0.45	%	1.07	%	11/23/2022	10,000
Fixed Rate	—		3.62	%	11/28/2017	10,000
Fixed Rate	—		3.75	%	7/30/2018	5,000
Fixed Rate	—		3.97	%	7/30/2018	5,000
Fixed Rate Hybrid	—		2.11	%	10/5/2016	25,000
Fixed Rate Hybrid	—		0.91	%	7/25/2016	15,000
						$	200,000
(1) Interest rates calculated using non-rounded numbers.

Contractual Maturities of Long-Term Debt

As of September 30, 2016, the contractual maturities of long-term debt are as follows for the years ending (dollars in thousands):

	Trust Preferred Capital Notes		FHLB Advances		Fair Value  Premium (Discount)			Prepayment Penalty			Total Long-term Borrowings
For the remaining three months of 2016	$	—	$	25,000	$	71		$	(477	)	$	24,594
2017	—		10,000		170			(1,922		)	8,248
2018	—		10,000		(143		)	(1,970		)	7,887
2019	—		—		(286		)	(2,018		)	(2,304		)
2020	—		—		(301		)	(2,074		)	(2,375		)
Thereafter	93,301		140,000		(5,623		)	(3,826		)	223,852
Total Long-term borrowings	$	93,301	$	185,000	$	(6,112	)	$	(12,287	)	$	259,902

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COMMITMENTS AND CONTINGENCIES (Tables)

9 Months Ended

Sep. 30, 2016

Commitments and Contingencies Disclosure [Abstract]

Balances of Commitments and Contingencies

The following table presents the balances of commitments and contingencies (dollars in thousands):

	September 30, 2016		December 31, 2015
Commitments with off-balance sheet risk:
Commitments to extend credit (1)	$	1,787,953	$	1,557,350
Standby letters of credit	84,491		139,371
Mortgage loan rate lock commitments	76,070		50,369
Total commitments with off-balance sheet risk	$	1,948,514	$	1,747,090
Commitments with balance sheet risk:
Loans held for sale	$	46,814	$	36,030
Total other commitments	$	1,995,328	$	1,783,120

(1) Includes unfunded overdraft protection.

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DERIVATIVES (Tables)

9 Months Ended

Sep. 30, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Summary of the Derivatives

The following table summarizes key elements of the Company’s derivative instruments as of September 30, 2016 and December 31, 2015, segregated by derivatives that are considered accounting hedges and those that are not (dollars in thousands):

	September 30, 2016									December 31, 2015
			Derivative (2)									Derivative (2)
	Notional or Contractual Amount (1)			Assets		Liabilities		Collateral Pledged (3)		Notional or Contractual Amount (1)			Assets		Liabilities		Collateral Pledged (3)
Derivatives designated as accounting hedges:
Interest rate contracts:
Cash flow hedges	$	188,500		$	343	$	16,087	$	22,071	$	263,000		$	946	$	10,352	$	14,449
Fair value hedges	43,455			—		3,529		—		61,150			—		888		—
Derivatives not designated as accounting hedges:
Loan Swaps (4)
Pay fixed - receive floating interest rate swaps	280,336			12,218		—		—		138,969			3,758		—		—
Pay floating - receive fixed interest rate swaps	280,336			—		12,218		16,141		138,969			—		3,758		5,983
Other contracts:
Interest rate lock commitments	76,070			1,422		—		—		50,369			701		—		—

(1) Notional amounts are not recorded on the balance sheet and are generally used only as a basis on which interest and other payments are determined.

(2) Balancesrepresent fair value of derivative financial instruments.

(3) Collateral pledged is comprised of both cash and securities.

(4) Prior period reflects reclassifications to conform to the current presentation.

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables)

9 Months Ended

Sep. 30, 2016

Equity [Abstract]

Change in Accumulated Other Comprehensive Income

The change in accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2016 is summarized as follows, net of tax (dollars in thousands):

	Unrealized Gains (Losses) on AFS Securities		Unrealized Gain for AFS Securities Transferred to HTM			Change in Fair Value of Cash Flow Hedge			Total
Balance - June 30, 2016	$	14,412	$	3,853		$	(9,366	)	$	8,899
Other comprehensive income (loss)	1,121		(237		)	(78		)	806
Amounts reclassified from accumulated other comprehensive income	—		—			154			154
Net current period other comprehensive income (loss)	1,121		(237		)	76			960
Balance - September 30, 2016	$	15,533	$	3,616		$	(9,290	)	$	9,859

	Unrealized Gains (Losses) on AFS Securities			Unrealized Gain for AFS Securities Transferred to HTM			Change in Fair Value of Cash Flow Hedge			Total
Balance - December 31, 2015	$	7,777		$	4,432		$	(5,957	)	$	6,252
Other comprehensive income (loss)	7,851			(816		)	(3,766		)	3,269
Amounts reclassified from accumulated other comprehensive income	(95		)	—			433			338
Net current period other comprehensive income (loss)	7,756			(816		)	(3,333		)	3,607
Balance - September 30, 2016	$	15,533		$	3,616		$	(9,290	)	$	9,859

The change in accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2015 is summarized as follows, net of tax (dollars in thousands):

	Unrealized Gains (Losses) on AFS Securities		Unrealized Gain for AFS Securities Transferred to HTM			Change in Fair Value of Cash Flow Hedge			Total
Balance - June 30, 2015	$	8,738	$	5,043		$	(4,552	)	$	9,229
Other comprehensive income (loss)	1,250		(308		)	(2,328		)	(1,386		)
Amounts reclassified from accumulated other comprehensive income	146		—			157			303
Net current period other comprehensive income (loss)	1,396		(308		)	(2,171		)	(1,083		)
Balance - September 30, 2015	$	10,134	$	4,735		$	(6,723	)	$	8,146

	Unrealized Gains (Losses) on AFS Securities			Unrealized Gain for AFS Securities Transferred to HTM			Change in Fair Value of Cash Flow Hedge			Total
Balance - December 31, 2014	$	17,439		$	—		$	(5,184	)	$	12,255
Unrealized gain transferred from AFS to HTM	(5,251		)	5,251			—			—
Other comprehensive income (loss)	(1,812		)	(516		)	(2,009		)	(4,337		)
Amounts reclassified from accumulated other comprehensive income	(242		)	—			470			228
Net current period other comprehensive income (loss)	(2,054		)	(516		)	(1,539		)	(4,109		)
Balance - September 30, 2015	$	10,134		$	4,735		$	(6,723	)	$	8,146

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FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Sep. 30, 2016

Fair Value Disclosures [Abstract]

Schedule of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table presents the balances of financial assets and liabilities measured at fair value on a recurring basis at September 30, 2016 and December 31, 2015 (dollars in thousands):

	Fair Value Measurements at September 30, 2016 using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Level 1		Level 2		Level 3		Balance
ASSETS
Securities available for sale:
Obligations of states and political subdivisions	$	—	$	279,223	$	—	$	279,223
Corporate and other bonds	—		121,747		—		121,747
Mortgage-backed securities	—		540,596		—		540,596
Other securities	—		13,418		—		13,418
Loans held for sale	—		46,814		—		46,814
Derivatives:
Interest rate swap	—		12,218		—		12,218
Cash flow hedges	—		343		—		343
Interest rate lock commitments	—		—		1,422		1,422
LIABILITIES
Derivatives:
Interest rate swap	$	—	$	12,218	$	—	$	12,218
Cash flow hedges	—		16,087		—		16,087
Fair value hedges	—		3,529		—		3,529

	Fair Value Measurements at December 31, 2015 using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Level 1		Level 2		Level 3		Balance
ASSETS
Securities available for sale:
Obligations of states and political subdivisions	$	—	$	268,079	$	—	$	268,079
Corporate and other bonds	—		75,979		—		75,979
Mortgage-backed securities	—		548,171		—		548,171
Other securities	—		11,063		—		11,063
Loans held for sale	—		36,030		—		36,030
Derivatives:
Interest rate swap	—		3,758		—		3,758
Cash flow hedges	—		946		—		946
Interest rate lock commitments	—		—		701		701
LIABILITIES
Derivatives:
Interest rate swap	$	—	$	3,758	$	—	$	3,758
Cash flow hedges	—		10,352		—		10,352
Fair value hedges	—		888		—		888

Schedule of Financial Assets Measured at Fair Value on Nonrecurring Basis

The following tables summarize the Company’s financial assets that were measured at fair value on a nonrecurring basis at September 30, 2016 and December 31, 2015 (dollars in thousands):

	Fair Value Measurements at September 30, 2016 using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Level 1		Level 2		Level 3		Balance
ASSETS
Impaired loans	$	—	$	—	$	2,573	$	2,573
Other real estate owned	—		—		10,581		10,581

	Fair Value Measurements at December 31, 2015 using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Level 1		Level 2		Level 3		Balance
ASSETS
Impaired loans	$	—	$	—	$	2,214	$	2,214
Other real estate owned	—		—		15,299		15,299

Carrying Values and Estimated Fair Values of the Company's Financial Instruments

The carrying values and estimated fair values of the Company’s financial instruments at September 30, 2016 and December 31, 2015 are as follows (dollars in thousands):

			Fair Value Measurements at September 30, 2016 using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs		Total Fair Value
	Carrying Value		Level 1		Level 2		Level 3		Balance
ASSETS
Cash and cash equivalents	$	156,175	$	156,175	$	—	$	—	$	156,175
Securities available for sale	954,984		—		954,984		—		954,984
Held to maturity securities	200,839		—		209,717		—		209,717
Restricted stock	63,204		—		63,204		—		63,204
Loans held for sale	46,814		—		46,814		—		46,814
Net loans	6,112,376		—		—		6,144,971		6,144,971
Derivatives:
Interest rate lock commitments	1,422		—		—		1,422		1,422
Interest rate swap	12,218		—		12,218		—		12,218
Cash flow hedges	343		—		343		—		343
Accrued interest receivable	22,084		—		22,084		—		22,084
Bank owned life insurance	177,847		—		177,847		—		177,847
LIABILITIES
Deposits	$	6,258,506	$	—	$	6,258,166	$	—	$	6,258,166
Borrowings	925,627		—		905,653		—		905,653
Accrued interest payable	1,581		—		1,581		—		1,581
Derivatives:
Interest rate swap	12,218		—		12,218		—		12,218
Cash flow hedges	16,087		—		16,087		—		16,087
Fair value hedges	3,529		—		3,529		—		3,529

			Fair Value Measurements at December 31, 2015 using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs		Total Fair Value
	Carrying Value		Level 1		Level 2		Level 3		Balance
ASSETS
Cash and cash equivalents	$	142,660	$	142,660	$	—	$	—	$	142,660
Securities available for sale	903,292		—		903,292		—		903,292
Held to maturity securities	205,374		—		209,437		—		209,437
Restricted stock	51,828		—		51,828		—		51,828
Loans held for sale	36,030		—		36,030		—		36,030
Net loans	5,637,415		—		—		5,671,155		5,671,155
Derivatives:
Interest rate lock commitments	701		—		—		701		701
Interest rate swap	3,758		—		3,758		—		3,758
Cash flow hedges	946		—		946		—		946
Accrued interest receivable	20,760		—		20,760		—		20,760
Bank owned life insurance	173,687		—		173,687		—		173,687
LIABILITIES
Deposits	$	5,963,936	$	—	$	5,957,484	$	—	$	5,957,484
Borrowings	680,175		—		659,364		—		659,364
Accrued interest payable	1,578		—		1,578		—		1,578
Derivatives:
Interest rate swap	3,758		—		3,758		—		3,758
Cash flow hedges	10,352		—		10,352		—		10,352
Fair value hedges	888		—		888		—		888

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EARNINGS PER SHARE (Tables)

9 Months Ended

Sep. 30, 2016

Earnings Per Share [Abstract]

Reconciliation of the Denominators of the Basic and Diluted EPS Computations

The following is a reconciliation of the denominators of the basic and diluted EPS computations for the three and nine months ended September 30, 2016 and 2015 (in thousands except per share data):

	Net Income Available to Common Shareholders (Numerator)		Weighted Average Common Shares (Denominator)	Per Share Amount
Three months ended September 30, 2016
Net income, basic	$	20,401	43,566	$	0.47
Add: potentially dilutive common shares - stock awards	—		189	—
Diluted	$	20,401	43,755	$	0.47
Three months ended September 30, 2015
Net income, basic	$	18,216	45,087	$	0.40
Add: potentially dilutive common shares - stock awards	—		84	—
Diluted	$	18,216	45,171	$	0.40
Nine months ended September 30, 2016
Net income, basic	$	56,699	43,854	$	1.29
Add: potentially dilutive common shares - stock awards	—		114	—
Diluted	$	56,699	43,968	$	1.29
Nine months ended September 30, 2015
Net income, basic	$	49,264	45,107	$	1.09
Add: potentially dilutive common shares - stock awards	—		82	—
Diluted	$	49,264	45,189	$	1.09

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SEGMENT REPORTING DISCLOSURES (Tables)

9 Months Ended

Sep. 30, 2016

Segment Reporting [Abstract]

Information About Reportable Segments and Reconciliation

Information about reportable segments and reconciliation of such information to the consolidated financial statements for each of the three and nine months ended September 30, 2016 and 2015 is as follows (dollars in thousands):

UNION BANKSHARES CORPORATION AND SUBSIDIARIES

SEGMENT FINANCIAL INFORMATION

	Community Bank		Mortgage			Eliminations			Consolidated
Three Months Ended September 30, 2016
Net interest income	$	66,605	$	423		$	—		$	67,028
Provision for credit losses	2,455		17			—			2,472
Net interest income after provision for credit losses	64,150		406			—			64,556
Noninterest income	15,589		3,501			(140		)	18,950
Noninterest expenses	54,353		2,700			(140		)	56,913
Income before income taxes	25,386		1,207			—			26,593
Income tax expense	5,770		422			—			6,192
Net income	$	19,616	$	785		$	—		$	20,401
Total assets	$	8,251,351	$	90,692		$	(83,813	)	$	8,258,230
Three Months Ended September 30, 2015
Net interest income	$	63,075	$	369		$	—		$	63,444
Provision for credit losses	2,000		62			—			2,062
Net interest income after provision for credit losses	61,075		307			—			61,382
Noninterest income	14,287		2,608			(170		)	16,725
Noninterest expenses	50,674		2,821			(170		)	53,325
Income before income taxes	24,688		94			—			24,782
Income tax expense	6,531		35			—			6,566
Net income	$	18,157	$	59		$	—		$	18,216
Total assets	$	7,588,606	$	62,127		$	(56,420	)	$	7,594,313
Nine Months Ended September 30, 2016
Net interest income	$	195,508	$	1,027		$	—		$	196,535
Provision for credit losses	7,215		161			—			7,376
Net interest income after provision for credit losses	188,293		866			—			189,159
Noninterest income	44,137		9,185			(465		)	52,857
Noninterest expenses	158,964		7,937			(465		)	166,436
Income before income taxes	73,466		2,114			—			75,580
Income tax expense	18,145		736			—			18,881
Net income	$	55,321	$	1,378		$	—		$	56,699
Total assets	$	8,251,351	$	90,692		$	(83,813	)	$	8,258,230
Nine Months Ended September 30, 2015
Net interest income	$	188,240	$	989		$	—		$	189,229
Provision for credit losses	7,450		111			—			7,561
Net interest income after provision for credit losses	180,790		878			—			181,668
Noninterest income	40,658		7,844			(512		)	47,990
Noninterest expenses	154,011		8,906			(512		)	162,405
Income (loss) before income taxes	67,437		(184		)	—			67,253
Income tax expense (benefit)	18,060		(71		)	—			17,989
Net income (loss)	$	49,377	$	(113	)	$	—		$	49,264
Total assets	$	7,588,606	$	62,127		$	(56,420	)	$	7,594,313

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ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
	May 31, 2016	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Business Acquisition [Line Items]
Cash paid in acquisition				$ 4,077	$ 0
Goodwill		$ 298,191		298,191		$ 293,522
Affordable housing projects, recognized amortization		185	$ 118	445	397
Affordable housing projects, tax credits		265	$ 213	685	$ 641
Affordable housing projects, investment amount		8,000		8,000		$ 8,500
Affordable housing projects, liability		$ 5,300		$ 5,300
ODCM
Business Acquisition [Line Items]
Assets under management	$ 300,000
Acquisition date fair value of consideration transferred	9,100
Cash paid in acquisition	4,100
Stock issued	453
Goodwill	4,700
Acquired amortizable intangible assets	$ 4,500
Minimum | ODCM
Business Acquisition [Line Items]
Intangible assets, amortization period	5 years
Maximum | ODCM
Business Acquisition [Line Items]
Intangible assets, amortization period	10 years

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SECURITIES (Amortized Cost, Gross Unrealized Gains and Losses, and Estimated Fair Values of Investment Securities) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	$ 931,034	$ 891,276
Gross Unrealized Gains	26,253	16,661
Gross Unrealized (Losses)	(2,303)	(4,645)
Estimated Fair Value	954,984	903,292
Obligations of States and Political Subdivisions
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	266,291	257,740
Gross Unrealized Gains	13,147	10,479
Gross Unrealized (Losses)	(215)	(140)
Estimated Fair Value	279,223	268,079
Corporate and Other Bonds
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	122,130	77,628
Gross Unrealized Gains	1,196	55
Gross Unrealized (Losses)	(1,579)	(1,704)
Estimated Fair Value	121,747	75,979
Mortgage-Backed Securities
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	529,228	544,823
Gross Unrealized Gains	11,877	6,127
Gross Unrealized (Losses)	(509)	(2,779)
Estimated Fair Value	540,596	548,171
Other Securities
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	13,385	11,085
Gross Unrealized Gains	33	0
Gross Unrealized (Losses)	0	(22)
Estimated Fair Value	$ 13,418	$ 11,063

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SECURITIES (Schedule of Gross Unrealized Losses and Fair Value of Investments) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Schedule of Trading Securities and Other Trading Assets [Line Items]
Less than 12 months, Fair Value	$ 54,438	$ 331,384
Less than 12 months, Unrealized Losses	(381)	(3,263)
More than 12 Months, Fair Value	85,085	46,168
More than 12 months, Unrealized Losses	(1,922)	(1,382)
Total, Fair Value	139,523	377,552
Total, Unrealized Losses	(2,303)	(4,645)
Obligations of States and Political Subdivisions
Schedule of Trading Securities and Other Trading Assets [Line Items]
Less than 12 months, Fair Value	11,640	8,114
Less than 12 months, Unrealized Losses	(209)	(70)
More than 12 Months, Fair Value	655	4,950
More than 12 months, Unrealized Losses	(6)	(70)
Total, Fair Value	12,295	13,064
Total, Unrealized Losses	(215)	(140)
Mortgage-Backed Securities
Schedule of Trading Securities and Other Trading Assets [Line Items]
Less than 12 months, Fair Value	37,739	287,113
Less than 12 months, Unrealized Losses	(156)	(2,442)
More than 12 Months, Fair Value	43,430	21,660
More than 12 months, Unrealized Losses	(353)	(337)
Total, Fair Value	81,169	308,773
Total, Unrealized Losses	(509)	(2,779)
Corporate Bonds and Other Securities
Schedule of Trading Securities and Other Trading Assets [Line Items]
Less than 12 months, Fair Value	5,059	36,157
Less than 12 months, Unrealized Losses	(16)	(751)
More than 12 Months, Fair Value	41,000	19,558
More than 12 months, Unrealized Losses	(1,563)	(975)
Total, Fair Value	46,059	55,715
Total, Unrealized Losses	$ (1,579)	$ (1,726)

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SECURITIES (Narrative) (Details)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2016 USD ($) security	Jun. 30, 2015 USD ($)	Sep. 30, 2016 USD ($) security	Sep. 30, 2015 USD ($)	Dec. 31, 2015 USD ($) security
Schedule of Investments [Line Items]
Individual securities that had been in a continuous loss position for more than 12 months, amount	$ 85,085,000		$ 85,085,000		$ 46,168,000
Securities that had been in a continuous loss position for more than 12 months, unrealized loss	1,922,000		1,922,000		1,382,000
Transfer from securities available for sale to securities held to maturity		$ 201,800,000	0	$ 201,822,000
Held to maturity securities unrealized gains before tax		$ 8,100,000	5,600,000		$ 6,800,000
Held-to-maturity securities in continuous loss position for more than 12 months	$ 661,000		$ 661,000
Number of held-to-maturity securities in unrealized loss positions | security	1		1
Held-to-maturity securities, continuous unrealized loss position, more than 12 months	$ 81,000		$ 81,000
Federal Home Loan Bank requires Bank to maintain percentage of stock equal to outstanding borrowings			4.25%		4.25%
Percentage of Federal Reserve Bank of Richmond reserve			6.00%		6.00%
Restricted equity securities consist of Federal Reserve Bank stock	23,800,000		$ 23,800,000		$ 23,800,000
Federal Home Loan Bank Stock	39,400,000		39,400,000		28,000,000
Credit-related OTTI	$ 0		$ 0		$ 300,000
Available-for-sale Securities
Schedule of Investments [Line Items]
Individual securities that had been in a continuous loss position | security	28		28		20

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SECURITIES (Schedule of Amortized Cost and Estimated Fair Value of Securities) (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended	12 Months Ended
	Jun. 30, 2015	Sep. 30, 2016	Dec. 31, 2015
Amortized Cost
Due in one year or less		$ 16,667	$ 8,380
Due after one year through five years		109,700	65,326
Due after five years through ten years		314,903	296,864
Due after ten years		489,764	520,706
Total securities available for sale		931,034	891,276
Estimated Fair Value
Due in one year or less		16,860	8,370
Due after one year through five years		113,093	66,996
Due after five years through ten years		324,270	301,920
Due after ten years		500,761	526,006
Total securities available for sale		954,984	903,292
Carrying Value
Due in one year or less		850	1,488
Due after one year through five years		25,918	4,294
Due after five years through ten years		48,243	44,736
Due after ten years		125,828	154,856
Total securities held to maturity		200,839	205,374
Estimated Fair Value
Due in one year or less		850	1,491
Due after one year through five years		26,561	4,348
Due after five years through ten years		50,017	45,501
Due after ten years		132,289	158,097
Total securities held to maturity		209,717	209,437
Held to maturity securities unrealized gains before tax	$ 8,100	$ 5,600	$ 6,800

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SECURITIES (Schedule of Securities Pledged to Secure Public Deposits, Repurchase Agreements, and for Other Purposes) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Available-for-sale Securities
Schedule of Investments [Line Items]
Total pledged AFS securities, fair value	$ 324,011	$ 337,301
Available-for-sale Securities | Public Deposits
Schedule of Investments [Line Items]
Total pledged AFS securities, fair value	183,841	184,635
Available-for-sale Securities | Repurchase Agreements
Schedule of Investments [Line Items]
Total pledged AFS securities, fair value	116,844	126,120
Available-for-sale Securities | Other Purposes
Schedule of Investments [Line Items]
Total pledged AFS securities, fair value	23,326	26,546
Held-to-maturity Securities
Schedule of Investments [Line Items]
Total pledged HTM securities, fair value	209,717	207,140
Held-to-maturity Securities | Public Deposits
Schedule of Investments [Line Items]
Total pledged HTM securities, fair value	$ 209,717	$ 207,140

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SECURITIES (Schedule of Carrying Value, Gross Unrealized Gains and Losses and Estimated Fair Value of Securities) (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended	12 Months Ended
	Jun. 30, 2015	Sep. 30, 2016	Dec. 31, 2015
Schedule of Held-to-maturity Securities [Line Items]
Total securities held to maturity		$ 200,839	$ 205,374
Estimated Fair Value		209,717	209,437
Held to maturity securities unrealized gains before tax	$ 8,100	5,600	6,800
Obligations of States and Political Subdivisions
Schedule of Held-to-maturity Securities [Line Items]
Total securities held to maturity		200,839	205,374
Gross Unrealized Gains		8,959	5,748
Gross Unrealized (Losses)		(81)	(1,685)
Estimated Fair Value		$ 209,717	$ 209,437

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SECURITIES (Gross Unrealized Losses and Fair Value of Securities) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Schedule of Held-to-maturity Securities [Line Items]
More than 12 months, Fair Value	$ 661
More than 12 months, Unrealized Losses	(81)
Obligations of States and Political Subdivisions
Schedule of Held-to-maturity Securities [Line Items]
Less than 12 months, Fair Value	0	$ 7,056
Less than 12 months, Unrealized Losses	0	(1,685)
More than 12 months, Fair Value	661	0
More than 12 months, Unrealized Losses	(81)	0
Total, Fair Value	661	7,056
Total, Unrealized Losses	$ (81)	$ (1,685)

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SECURITIES (Gross Realized Gains and Losses on the Sale of Securities) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Realized gains (losses):
Gross realized gains	$ 0	$ 75	$ 242	$ 759
Gross realized losses	0	0	(97)	(87)
Net realized gains	0	75	145	672
Proceeds from sales of securities	$ 2,848	$ 5,771	$ 18,272	$ 63,928

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LOANS AND ALLOWANCE FOR LOAN LOSSES (Loans Stated at Face Amount, Net of Deferred Fees and Costs) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015	Sep. 30, 2015
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans held for investment, net	$ 6,148,918	$ 5,671,462	$ 5,543,621
Loans receivable, deferred fees and costs	3,300	3,000
Construction and Land Development
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans held for investment, net	776,430	749,720	694,645
Commercial Real Estate - Owner Occupied
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans held for investment, net	857,142	860,086	863,578
Commercial Real Estate - Non-Owner Occupied
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans held for investment, net	1,454,828	1,270,480	1,223,607
Multifamily Real Estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans held for investment, net	339,313	322,528	329,959
Commercial & Industrial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans held for investment, net	509,857	435,365	409,657
Residential 1-4 Family
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans held for investment, net	999,361	978,469	987,788
Auto
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans held for investment, net	255,188	234,061	225,994
HELOC
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans held for investment, net	524,097	516,726	514,362
Consumer and all other
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total loans held for investment, net	$ 432,702	$ 304,027	$ 294,031

XML

LOANS AND ALLOWANCE FOR LOAN LOSSES (Summary of Aging of the Loan Portfolio by Segment) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015	Sep. 30, 2015
Financing Receivable, Recorded Investment, Past Due [Line Items]
Greater than 90 Days and still Accruing	$ 3,529	$ 5,829
Total Loans	6,148,918	5,671,462	$ 5,543,621
Nonaccrual	12,677	11,936
Current	6,046,978	5,542,840
Purchased Impaired
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	62,346	73,737	78,606
Current	55,780	64,455
30 to 59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	13,755	27,787
60 to 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	9,633	9,333
Construction and Land Development
Financing Receivable, Recorded Investment, Past Due [Line Items]
Greater than 90 Days and still Accruing	610	128
Total Loans	776,430	749,720	694,645
Nonaccrual	2,301	2,113
Current	769,308	737,958
Construction and Land Development | Purchased Impaired
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	3,205	5,986	7,628
Current	3,176	5,376
Construction and Land Development | 30 to 59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	309	3,155
Construction and Land Development | 60 to 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	697	380
Commercial Real Estate - Owner Occupied
Financing Receivable, Recorded Investment, Past Due [Line Items]
Greater than 90 Days and still Accruing	304	103
Total Loans	857,142	860,086	863,578
Nonaccrual	1,609	3,904
Current	834,389	826,859
Commercial Real Estate - Owner Occupied | Purchased Impaired
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	19,064	27,388	28,694
Current	17,693	24,837
Commercial Real Estate - Owner Occupied | 30 to 59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	1,411	1,714
Commercial Real Estate - Owner Occupied | 60 to 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	365	118
Commercial Real Estate - Non-Owner Occupied
Financing Receivable, Recorded Investment, Past Due [Line Items]
Greater than 90 Days and still Accruing	0	723
Total Loans	1,454,828	1,270,480	1,223,607
Nonaccrual	0	100
Current	1,436,363	1,255,367
Commercial Real Estate - Non-Owner Occupied | Purchased Impaired
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	18,141	13,519	13,326
Current	16,095	12,562
Commercial Real Estate - Non-Owner Occupied | 30 to 59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	324	771
Commercial Real Estate - Non-Owner Occupied | 60 to 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	0	0
Multifamily Real Estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Greater than 90 Days and still Accruing	0	272
Total Loans	339,313	322,528	329,959
Nonaccrual	0	0
Current	337,234	320,701
Multifamily Real Estate | Purchased Impaired
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	2,079	1,555	1,943
Current	2,079	1,555
Multifamily Real Estate | 30 to 59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	0	0
Multifamily Real Estate | 60 to 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	0	0
Commercial & Industrial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Greater than 90 Days and still Accruing	77	124
Total Loans	509,857	435,365	409,657
Nonaccrual	1,344	429
Current	506,673	431,916
Commercial & Industrial | Purchased Impaired
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	1,145	1,813	2,245
Current	1,043	1,583
Commercial & Industrial | 30 to 59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	567	1,056
Commercial & Industrial | 60 to 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	51	27
Residential 1-4 Family
Financing Receivable, Recorded Investment, Past Due [Line Items]
Greater than 90 Days and still Accruing	2,005	3,638
Total Loans	999,361	978,469	987,788
Nonaccrual	5,279	3,563
Current	963,919	928,312
Residential 1-4 Family | Purchased Impaired
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	16,828	21,159	22,379
Current	14,367	17,093
Residential 1-4 Family | 30 to 59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	4,985	15,023
Residential 1-4 Family | 60 to 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	6,345	6,774
Auto
Financing Receivable, Recorded Investment, Past Due [Line Items]
Greater than 90 Days and still Accruing	28	60
Total Loans	255,188	234,061	225,994
Nonaccrual	231	192
Current	252,844	231,264
Auto | Purchased Impaired
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	0	0	0
Auto | 30 to 59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	1,846	2,312
Auto | 60 to 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	239	233
HELOC
Financing Receivable, Recorded Investment, Past Due [Line Items]
Greater than 90 Days and still Accruing	407	762
Total Loans	524,097	516,726	514,362
Nonaccrual	1,464	1,348
Current	517,229	509,124
HELOC | Purchased Impaired
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	1,498	1,791	1,812
Current	941	923
HELOC | 30 to 59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	2,600	2,589
HELOC | 60 to 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	899	1,112
Consumer and all other
Financing Receivable, Recorded Investment, Past Due [Line Items]
Greater than 90 Days and still Accruing	98	19
Total Loans	432,702	304,027	294,031
Nonaccrual	449	287
Current	429,019	301,339
Consumer and all other | Purchased Impaired
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	386	526	$ 579
Current	386	526
Consumer and all other | 30 to 59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	1,713	1,167
Consumer and all other | 60 to 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	$ 1,037	$ 689

XML

LOANS AND ALLOWANCE FOR LOAN LOSSES (PCI Loan Portfolios by Segment and Delinquency Status) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015	Sep. 30, 2015
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	$ 6,046,978	$ 5,542,840
Total Loans	6,148,918	5,671,462	$ 5,543,621
Construction and Land Development
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	769,308	737,958
Total Loans	776,430	749,720	694,645
Commercial Real Estate - Owner Occupied
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	834,389	826,859
Total Loans	857,142	860,086	863,578
Commercial Real Estate - Non-Owner Occupied
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	1,436,363	1,255,367
Total Loans	1,454,828	1,270,480	1,223,607
Multifamily Real Estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	337,234	320,701
Total Loans	339,313	322,528	329,959
Commercial & Industrial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	506,673	431,916
Total Loans	509,857	435,365	409,657
Residential 1-4 Family
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	963,919	928,312
Total Loans	999,361	978,469	987,788
HELOC
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	517,229	509,124
Total Loans	524,097	516,726	514,362
Consumer and all other
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	429,019	301,339
Total Loans	432,702	304,027	294,031
Purchased Impaired
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	55,780	64,455
Total Loans	62,346	73,737	78,606
Purchased Impaired | 30 To 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	4,540	5,025
Purchased Impaired | Greater than 90 Days
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	2,026	4,257
Purchased Impaired | Construction and Land Development
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	3,176	5,376
Total Loans	3,205	5,986	7,628
Purchased Impaired | Construction and Land Development | 30 To 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	29	369
Purchased Impaired | Construction and Land Development | Greater than 90 Days
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	0	241
Purchased Impaired | Commercial Real Estate - Owner Occupied
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	17,693	24,837
Total Loans	19,064	27,388	28,694
Purchased Impaired | Commercial Real Estate - Owner Occupied | 30 To 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	737	1,139
Purchased Impaired | Commercial Real Estate - Owner Occupied | Greater than 90 Days
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	634	1,412
Purchased Impaired | Commercial Real Estate - Non-Owner Occupied
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	16,095	12,562
Total Loans	18,141	13,519	13,326
Purchased Impaired | Commercial Real Estate - Non-Owner Occupied | 30 To 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	1,921	755
Purchased Impaired | Commercial Real Estate - Non-Owner Occupied | Greater than 90 Days
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	125	202
Purchased Impaired | Multifamily Real Estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	2,079	1,555
Total Loans	2,079	1,555	1,943
Purchased Impaired | Multifamily Real Estate | 30 To 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	0	0
Purchased Impaired | Multifamily Real Estate | Greater than 90 Days
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	0	0
Purchased Impaired | Commercial & Industrial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	1,043	1,583
Total Loans	1,145	1,813	2,245
Purchased Impaired | Commercial & Industrial | 30 To 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	45	209
Purchased Impaired | Commercial & Industrial | Greater than 90 Days
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	57	21
Purchased Impaired | Residential 1-4 Family
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	14,367	17,093
Total Loans	16,828	21,159	22,379
Purchased Impaired | Residential 1-4 Family | 30 To 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	1,686	2,143
Purchased Impaired | Residential 1-4 Family | Greater than 90 Days
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	775	1,923
Purchased Impaired | HELOC
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	941	923
Total Loans	1,498	1,791	1,812
Purchased Impaired | HELOC | 30 To 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	122	410
Purchased Impaired | HELOC | Greater than 90 Days
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	435	458
Purchased Impaired | Consumer and all other
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	386	526
Total Loans	386	526	$ 579
Purchased Impaired | Consumer and all other | 30 To 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	0	0
Purchased Impaired | Consumer and all other | Greater than 90 Days
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	$ 0	$ 0

XML

LOANS AND ALLOWANCE FOR LOAN LOSSES (Impaired Loans Individually Evaluated for Impairment by Segment) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Recorded Investment
Loans without a specific allowance	$ 46,875		$ 46,875		$ 60,466
Loans with a specific allowance	10,626		10,626		16,652
Total impaired loans	57,501		57,501		77,118
Unpaid Principal Balance
Loans without a specific allowance	49,038		49,038		63,893
Loans with a specific allowance	11,700		11,700		17,102
Total impaired loans	60,738		60,738		80,995
Related Allowance	992		992		2,002
Average Investment	60,239	$ 82,549	60,763	$ 83,641
Interest Income Recognized	707	1,119	2,120	3,178
Construction and Land Development
Recorded Investment
Loans without a specific allowance	25,171		25,171		33,250
Loans with a specific allowance	2,070		2,070		3,167
Unpaid Principal Balance
Loans without a specific allowance	25,647		25,647		33,731
Loans with a specific allowance	2,442		2,442		3,218
Related Allowance	123		123		538
Average Investment	28,195	33,145	27,645	33,727
Interest Income Recognized	464	530	1,346	1,579
Commercial Real Estate - Owner Occupied
Recorded Investment
Loans without a specific allowance	6,414		6,414		7,781
Loans with a specific allowance	1,198		1,198		3,237
Unpaid Principal Balance
Loans without a specific allowance	6,579		6,579		8,983
Loans with a specific allowance	1,215		1,215		3,239
Related Allowance	5		5		358
Average Investment	7,691	18,859	7,862	18,709
Interest Income Recognized	72	195	230	547
Commercial Real Estate - Non-Owner Occupied
Recorded Investment
Loans without a specific allowance	3,752		3,752		5,328
Loans with a specific allowance	40		40		907
Unpaid Principal Balance
Loans without a specific allowance	3,752		3,752		5,325
Loans with a specific allowance	40		40		907
Related Allowance	1		1		75
Average Investment	3,777	8,596	3,759	8,809
Interest Income Recognized	33	96	98	270
Multifamily Real Estate
Recorded Investment
Loans without a specific allowance	0		0		3,828
Unpaid Principal Balance
Loans without a specific allowance	0		0		3,828
Average Investment		4,593		4,598
Interest Income Recognized		75		222
Commercial & Industrial
Recorded Investment
Loans without a specific allowance	952		952		711
Loans with a specific allowance	2,496		2,496		1,952
Unpaid Principal Balance
Loans without a specific allowance	1,362		1,362		951
Loans with a specific allowance	2,498		2,498		1,949
Related Allowance	642		642		441
Average Investment	4,628	3,503	4,964	3,633
Interest Income Recognized	42	42	134	125
Residential 1-4 Family
Recorded Investment
Loans without a specific allowance	9,066		9,066		7,564
Loans with a specific allowance	3,607		3,607		6,065
Unpaid Principal Balance
Loans without a specific allowance	10,059		10,059		8,829
Loans with a specific allowance	3,794		3,794		6,153
Related Allowance	115		115		418
Average Investment	13,106	11,494	13,439	11,723
Interest Income Recognized	89	160	267	374
Auto
Recorded Investment
Loans without a specific allowance	0		0		7
Loans with a specific allowance	231		231		192
Unpaid Principal Balance
Loans without a specific allowance	0		0		7
Loans with a specific allowance	270		270		199
Related Allowance	1		1		1
Average Investment	271	115	289	121
Interest Income Recognized	0	1	4	5
HELOC
Recorded Investment
Loans without a specific allowance	1,347		1,347		1,786
Loans with a specific allowance	706		706		769
Unpaid Principal Balance
Loans without a specific allowance	1,416		1,416		2,028
Loans with a specific allowance	791		791		925
Related Allowance	17		17		76
Average Investment	2,118	1,710	2,185	1,727
Interest Income Recognized	7	14	35	36
Consumer and all other
Recorded Investment
Loans without a specific allowance	173		173		211
Loans with a specific allowance	278		278		363
Unpaid Principal Balance
Loans without a specific allowance	223		223		211
Loans with a specific allowance	650		650		512
Related Allowance	88		88		$ 95
Average Investment	453	534	620	594
Interest Income Recognized	$ 0	$ 6	$ 6	$ 20

XML

LOANS AND ALLOWANCE FOR LOAN LOSSES (Summary of Modified Loans that Continue to Accrue Interest Under the Terms of Restructuring Agreement) (Details) $ in Thousands	Sep. 30, 2016 USD ($) loan	Dec. 31, 2015 USD ($) loan
Financing Receivable, Recorded Investment, Past Due [Line Items]
No. of Loans | loan	54	57
Recorded Investment	$ 13,276	$ 12,701
Outstanding Commitment	$ 0	$ 0
Performing
Financing Receivable, Recorded Investment, Past Due [Line Items]
No. of Loans | loan	41	46
Recorded Investment	$ 11,824	$ 10,780
Outstanding Commitment	$ 0	$ 0
Performing | Construction and Land Development
Financing Receivable, Recorded Investment, Past Due [Line Items]
No. of Loans | loan	5	6
Recorded Investment	$ 3,744	$ 3,349
Outstanding Commitment	$ 0	$ 0
Performing | Commercial Real Estate - Owner Occupied
Financing Receivable, Recorded Investment, Past Due [Line Items]
No. of Loans | loan	5	5
Recorded Investment	$ 2,070	$ 1,530
Outstanding Commitment	$ 0	$ 0
Performing | Commercial Real Estate - Non-Owner Occupied
Financing Receivable, Recorded Investment, Past Due [Line Items]
No. of Loans | loan	2	2
Recorded Investment	$ 2,390	$ 2,390
Outstanding Commitment	$ 0	$ 0
Performing | Commercial & Industrial
Financing Receivable, Recorded Investment, Past Due [Line Items]
No. of Loans | loan	4	5
Recorded Investment	$ 663	$ 261
Outstanding Commitment	$ 0	$ 0
Performing | Residential 1-4 Family
Financing Receivable, Recorded Investment, Past Due [Line Items]
No. of Loans | loan	25	27
Recorded Investment	$ 2,957	$ 3,173
Outstanding Commitment	$ 0	$ 0
Performing | Consumer and all other
Financing Receivable, Recorded Investment, Past Due [Line Items]
No. of Loans | loan	0	1
Recorded Investment	$ 0	$ 77
Outstanding Commitment	$ 0	$ 0
Nonperforming
Financing Receivable, Recorded Investment, Past Due [Line Items]
No. of Loans | loan	13	11
Recorded Investment	$ 1,452	$ 1,921
Outstanding Commitment	$ 0	$ 0
Nonperforming | Construction and Land Development
Financing Receivable, Recorded Investment, Past Due [Line Items]
No. of Loans | loan	2	2
Recorded Investment	$ 215	$ 321
Outstanding Commitment	$ 0	$ 0
Nonperforming | Commercial Real Estate - Owner Occupied
Financing Receivable, Recorded Investment, Past Due [Line Items]
No. of Loans | loan	2	1
Recorded Investment	$ 161	$ 137
Outstanding Commitment	$ 0	$ 0
Nonperforming | Commercial & Industrial
Financing Receivable, Recorded Investment, Past Due [Line Items]
No. of Loans | loan	1	1
Recorded Investment	$ 125	$ 2
Outstanding Commitment	$ 0	$ 0
Nonperforming | Residential 1-4 Family
Financing Receivable, Recorded Investment, Past Due [Line Items]
No. of Loans | loan	8	6
Recorded Investment	$ 951	$ 1,142
Outstanding Commitment	$ 0	$ 0
Nonperforming | HELOC
Financing Receivable, Recorded Investment, Past Due [Line Items]
No. of Loans | loan	0	1
Recorded Investment	$ 0	$ 319
Outstanding Commitment	$ 0	$ 0

XML

LOANS AND ALLOWANCE FOR LOAN LOSSES (Narrative) (Details)	3 Months Ended	9 Months Ended
	Sep. 30, 2016 USD ($) loan	Sep. 30, 2016 USD ($) loan	Sep. 30, 2015 USD ($)	Dec. 31, 2015 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Period for restructured loan to be considered default		90 days
Provision for unfunded commitments		$ 175,000	$ 300,000
Total loans held for investment, net	$ 6,148,918,000	6,148,918,000	5,543,621,000	$ 5,671,462,000
Acquired Performing Loan Portfolio
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans held for investment, net	1,200,000,000	1,200,000,000		1,400,000,000
Remaining discount on acquired loans	18,200,000	18,200,000		20,800,000
Purchased Impaired
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans held for investment, net	62,346,000	62,346,000	78,606,000	73,737,000
Purchased impaired loans (gross)	$ 77,900,000	$ 77,900,000		90,300,000
Commercial Real Estate - Owner Occupied
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Modifications, Subsequent Default, Number of Contracts | loan	1	1
Subsequent default of a restructured loan	$ 23,000	$ 23,000
Total loans held for investment, net	857,142,000	857,142,000	863,578,000	860,086,000
Commercial Real Estate - Owner Occupied | Purchased Impaired
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans held for investment, net	$ 19,064,000	$ 19,064,000	$ 28,694,000	$ 27,388,000

XML

LOANS AND ALLOWANCE FOR LOAN LOSSES (Schedule of TDR by Class and Modification Type) (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016 USD ($) loan	Sep. 30, 2015 USD ($) loan	Sep. 30, 2016 USD ($) loan	Sep. 30, 2015 USD ($) loan
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	1	4	8	7
Recorded Investment at Period End | $	$ 457	$ 1,074	$ 3,008	$ 2,079
Term modification, at a market rate
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	1	0	6	2
Recorded Investment at Period End | $	$ 457	$ 0	$ 2,847	$ 134
Term modification, at a market rate | Construction and Land Development
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	0		1
Recorded Investment at Period End | $	$ 0		$ 1,177
Term modification, at a market rate | Commercial Real Estate - Owner Occupied
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	0	0	2	1
Recorded Investment at Period End | $	$ 0	$ 0	$ 739	$ 117
Term modification, at a market rate | Commercial & Industrial
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	1	0	1	1
Recorded Investment at Period End | $	$ 457	$ 0	$ 457	$ 17
Term modification, at a market rate | Residential 1-4 Family
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	0		2
Recorded Investment at Period End | $	$ 0		$ 474
Term modification, below market rate
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	0	4	1	5
Recorded Investment at Period End | $	$ 0	$ 1,074	$ 36	$ 1,945
Term modification, below market rate | Construction and Land Development
Financing Receivable, Modifications [Line Items]
No. of Loans | loan		1		1
Recorded Investment at Period End | $		$ 400		$ 400
Term modification, below market rate | Commercial Real Estate - Owner Occupied
Financing Receivable, Modifications [Line Items]
No. of Loans | loan		0		1
Recorded Investment at Period End | $		$ 0		$ 871
Term modification, below market rate | Residential 1-4 Family
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	0	3	1	3
Recorded Investment at Period End | $	$ 0	$ 674	$ 36	$ 674
Interest rate modification, below market rate
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	0		1
Recorded Investment at Period End | $	$ 0		$ 125
Interest rate modification, below market rate | Commercial & Industrial
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	0		1
Recorded Investment at Period End | $	$ 0		$ 125

XML

LOANS AND ALLOWANCE FOR LOAN LOSSES (Allowance for Loan Loss Activity, by Portfolio Segment, Balances for Allowance for Credit Losses, and Loans Based on Impairment Methodology) (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Dec. 31, 2015	Sep. 30, 2015
Allowance for loan losses
Balance, beginning of the year	$ 34,047	$ 32,384
Recoveries credited to allowance	2,022	2,994
Loans charged off	(6,728)	(9,370)
Provision charged to operations	7,201	7,261
Balance, end of period	36,542	33,269
Total Loans
Loans individually evaluated for impairment			$ 57,501		$ 81,618
ALL individually evaluated for impairment			992		2,012
Loans collectively evaluated for impairment			6,029,071		5,383,397
ALL collectively evaluated for impairment			35,550		31,257
Total Loans			6,148,918	$ 5,671,462	5,543,621
Total ALL	34,047	32,384	36,542	34,047	33,269
Purchased Impaired
Allowance for loan losses
Balance, end of period	0	0
Total Loans
Total Loans			62,346	73,737	78,606
Total ALL	0	0	0		0
Construction and Land Development
Allowance for loan losses
Balance, beginning of the year	6,040	4,856
Recoveries credited to allowance	165	594
Loans charged off	(869)	(415)
Provision charged to operations	5,464	169
Balance, end of period	10,800	5,204
Total Loans
Loans individually evaluated for impairment			27,241		33,647
ALL individually evaluated for impairment			123		175
Loans collectively evaluated for impairment			745,984		653,370
ALL collectively evaluated for impairment			10,677		5,029
Total Loans			776,430	749,720	694,645
Total ALL	6,040	4,856	10,800	6,040	5,204
Construction and Land Development | Purchased Impaired
Allowance for loan losses
Balance, end of period	0	0
Total Loans
Total Loans			3,205	5,986	7,628
Total ALL	0	0	0		0
Commercial Real Estate - Owner Occupied
Allowance for loan losses
Balance, beginning of the year	4,614	4,640
Recoveries credited to allowance	112	15
Loans charged off	(772)	(481)
Provision charged to operations	(770)	630
Balance, end of period	3,184	4,804
Total Loans
Loans individually evaluated for impairment			7,612		18,564
ALL individually evaluated for impairment			5		677
Loans collectively evaluated for impairment			830,466		816,320
ALL collectively evaluated for impairment			3,179		4,127
Total Loans			857,142	860,086	863,578
Total ALL	4,614	4,640	3,184	4,614	4,804
Commercial Real Estate - Owner Occupied | Purchased Impaired
Allowance for loan losses
Balance, end of period	0	0
Total Loans
Total Loans			19,064	27,388	28,694
Total ALL	0	0	0		0
Commercial Real Estate - Non-Owner Occupied
Allowance for loan losses
Balance, beginning of the year	6,929	7,256
Recoveries credited to allowance	3	232
Loans charged off	(1)	(2,850)
Provision charged to operations	(813)	1,744
Balance, end of period	6,118	6,382
Total Loans
Loans individually evaluated for impairment			3,792		8,632
ALL individually evaluated for impairment			1		137
Loans collectively evaluated for impairment			1,432,895		1,201,649
ALL collectively evaluated for impairment			6,117		6,245
Total Loans			1,454,828	1,270,480	1,223,607
Total ALL	6,929	7,256	6,118	6,929	6,382
Commercial Real Estate - Non-Owner Occupied | Purchased Impaired
Allowance for loan losses
Balance, end of period	0	0
Total Loans
Total Loans			18,141	13,519	13,326
Total ALL	0	0	0		0
Multifamily Real Estate
Allowance for loan losses
Balance, beginning of the year	1,606	1,374
Recoveries credited to allowance	0	0
Loans charged off	0	0
Provision charged to operations	(658)	296
Balance, end of period	948	1,670
Total Loans
Loans individually evaluated for impairment			0		4,607
ALL individually evaluated for impairment			0		0
Loans collectively evaluated for impairment			337,234		323,409
ALL collectively evaluated for impairment			948		1,670
Total Loans			339,313	322,528	329,959
Total ALL	1,606	1,374	948	1,606	1,670
Multifamily Real Estate | Purchased Impaired
Allowance for loan losses
Balance, end of period	0	0
Total Loans
Total Loans			2,079	1,555	1,943
Total ALL	0	0	0		0
Commercial & Industrial
Allowance for loan losses
Balance, beginning of the year	3,163	2,610
Recoveries credited to allowance	422	776
Loans charged off	(1,301)	(2,081)
Provision charged to operations	3,119	1,485
Balance, end of period	5,403	2,790
Total Loans
Loans individually evaluated for impairment			3,448		3,439
ALL individually evaluated for impairment			642		318
Loans collectively evaluated for impairment			505,264		403,973
ALL collectively evaluated for impairment			4,761		2,472
Total Loans			509,857	435,365	409,657
Total ALL	3,163	2,610	5,403	3,163	2,790
Commercial & Industrial | Purchased Impaired
Allowance for loan losses
Balance, end of period	0	0
Total Loans
Total Loans			1,145	1,813	2,245
Total ALL	0	0	0		0
Residential 1-4 Family
Allowance for loan losses
Balance, beginning of the year	5,414	5,607
Recoveries credited to allowance	466	513
Loans charged off	(741)	(1,303)
Provision charged to operations	518	927
Balance, end of period	5,657	5,744
Total Loans
Loans individually evaluated for impairment			12,673		10,679
ALL individually evaluated for impairment			115		615
Loans collectively evaluated for impairment			969,860		954,730
ALL collectively evaluated for impairment			5,542		5,129
Total Loans			999,361	978,469	987,788
Total ALL	5,414	5,607	5,657	5,414	5,744
Residential 1-4 Family | Purchased Impaired
Allowance for loan losses
Balance, end of period	0	0
Total Loans
Total Loans			16,828	21,159	22,379
Total ALL	0	0	0		0
Auto
Allowance for loan losses
Balance, beginning of the year	1,703	1,297
Recoveries credited to allowance	243	213
Loans charged off	(815)	(545)
Provision charged to operations	(260)	600
Balance, end of period	871	1,565
Total Loans
Loans individually evaluated for impairment			231		89
ALL individually evaluated for impairment			1		1
Loans collectively evaluated for impairment			254,957		225,905
ALL collectively evaluated for impairment			870		1,564
Total Loans			255,188	234,061	225,994
Total ALL	1,703	1,297	871	1,703	1,565
Auto | Purchased Impaired
Allowance for loan losses
Balance, end of period	0	0
Total Loans
Total Loans			0	0	0
Total ALL	0	0	0		0
HELOC
Allowance for loan losses
Balance, beginning of the year	2,934	2,675
Recoveries credited to allowance	229	237
Loans charged off	(1,272)	(749)
Provision charged to operations	(534)	671
Balance, end of period	1,357	2,834
Total Loans
Loans individually evaluated for impairment			2,053		1,502
ALL individually evaluated for impairment			17		9
Loans collectively evaluated for impairment			520,546		511,048
ALL collectively evaluated for impairment			1,340		2,825
Total Loans			524,097	516,726	514,362
Total ALL	2,934	2,675	1,357	2,934	2,834
HELOC | Purchased Impaired
Allowance for loan losses
Balance, end of period	0	0
Total Loans
Total Loans			1,498	1,791	1,812
Total ALL	0	0	0		0
Consumer and all other
Allowance for loan losses
Balance, beginning of the year	1,644	2,069
Recoveries credited to allowance	382	414
Loans charged off	(957)	(946)
Provision charged to operations	1,135	739
Balance, end of period	2,204	2,276
Total Loans
Loans individually evaluated for impairment			451		459
ALL individually evaluated for impairment			88		80
Loans collectively evaluated for impairment			431,865		292,993
ALL collectively evaluated for impairment			2,116		2,196
Total Loans			432,702	304,027	294,031
Total ALL	1,644	2,069	2,204	1,644	2,276
Consumer and all other | Purchased Impaired
Allowance for loan losses
Balance, end of period	0	0
Total Loans
Total Loans			386	$ 526	579
Total ALL	$ 0	$ 0	$ 0		$ 0

XML

LOANS AND ALLOWANCE FOR LOAN LOSSES (Loans Receivables Related Risk Rating Excluding Purchased Impaired Loans) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015	Sep. 30, 2015
Financing Receivable, Recorded Investment [Line Items]
Total Loans	$ 6,148,918	$ 5,671,462	$ 5,543,621
Construction and Land Development
Financing Receivable, Recorded Investment [Line Items]
Total Loans	776,430	749,720	694,645
Commercial Real Estate - Owner Occupied
Financing Receivable, Recorded Investment [Line Items]
Total Loans	857,142	860,086	863,578
Commercial Real Estate - Non-Owner Occupied
Financing Receivable, Recorded Investment [Line Items]
Total Loans	1,454,828	1,270,480	1,223,607
Multifamily Real Estate
Financing Receivable, Recorded Investment [Line Items]
Total Loans	339,313	322,528	329,959
Commercial & Industrial
Financing Receivable, Recorded Investment [Line Items]
Total Loans	509,857	435,365	409,657
Residential 1-4 Family
Financing Receivable, Recorded Investment [Line Items]
Total Loans	999,361	978,469	987,788
Auto
Financing Receivable, Recorded Investment [Line Items]
Total Loans	255,188	234,061	225,994
HELOC
Financing Receivable, Recorded Investment [Line Items]
Total Loans	524,097	516,726	514,362
Consumer and all other
Financing Receivable, Recorded Investment [Line Items]
Total Loans	432,702	304,027	$ 294,031
Excluding Purchased Impaired
Financing Receivable, Recorded Investment [Line Items]
Total Loans	6,086,572	5,597,725
Excluding Purchased Impaired | Pass
Financing Receivable, Recorded Investment [Line Items]
Total Loans	5,853,357	5,372,500
Excluding Purchased Impaired | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total Loans	182,826	161,222
Excluding Purchased Impaired | Substandard
Financing Receivable, Recorded Investment [Line Items]
Total Loans	47,030	58,872
Excluding Purchased Impaired | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Total Loans	3,359	5,131
Excluding Purchased Impaired | Construction and Land Development
Financing Receivable, Recorded Investment [Line Items]
Total Loans	773,225	743,734
Excluding Purchased Impaired | Construction and Land Development | Pass
Financing Receivable, Recorded Investment [Line Items]
Total Loans	690,623	663,067
Excluding Purchased Impaired | Construction and Land Development | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total Loans	56,433	52,650
Excluding Purchased Impaired | Construction and Land Development | Substandard
Financing Receivable, Recorded Investment [Line Items]
Total Loans	25,559	27,980
Excluding Purchased Impaired | Construction and Land Development | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Total Loans	610	37
Excluding Purchased Impaired | Commercial Real Estate - Owner Occupied
Financing Receivable, Recorded Investment [Line Items]
Total Loans	838,078	832,698
Excluding Purchased Impaired | Commercial Real Estate - Owner Occupied | Pass
Financing Receivable, Recorded Investment [Line Items]
Total Loans	806,096	800,979
Excluding Purchased Impaired | Commercial Real Estate - Owner Occupied | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total Loans	26,090	20,856
Excluding Purchased Impaired | Commercial Real Estate - Owner Occupied | Substandard
Financing Receivable, Recorded Investment [Line Items]
Total Loans	5,892	8,931
Excluding Purchased Impaired | Commercial Real Estate - Owner Occupied | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Total Loans	0	1,932
Excluding Purchased Impaired | Commercial Real Estate - Non-Owner Occupied
Financing Receivable, Recorded Investment [Line Items]
Total Loans	1,436,687	1,256,961
Excluding Purchased Impaired | Commercial Real Estate - Non-Owner Occupied | Pass
Financing Receivable, Recorded Investment [Line Items]
Total Loans	1,399,369	1,228,956
Excluding Purchased Impaired | Commercial Real Estate - Non-Owner Occupied | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total Loans	33,608	22,341
Excluding Purchased Impaired | Commercial Real Estate - Non-Owner Occupied | Substandard
Financing Receivable, Recorded Investment [Line Items]
Total Loans	3,710	5,664
Excluding Purchased Impaired | Commercial Real Estate - Non-Owner Occupied | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Total Loans	0	0
Excluding Purchased Impaired | Multifamily Real Estate
Financing Receivable, Recorded Investment [Line Items]
Total Loans	337,234	320,973
Excluding Purchased Impaired | Multifamily Real Estate | Pass
Financing Receivable, Recorded Investment [Line Items]
Total Loans	313,497	315,128
Excluding Purchased Impaired | Multifamily Real Estate | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total Loans	23,737	2,017
Excluding Purchased Impaired | Multifamily Real Estate | Substandard
Financing Receivable, Recorded Investment [Line Items]
Total Loans	0	3,828
Excluding Purchased Impaired | Multifamily Real Estate | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Total Loans	0	0
Excluding Purchased Impaired | Commercial & Industrial
Financing Receivable, Recorded Investment [Line Items]
Total Loans	508,712	433,552
Excluding Purchased Impaired | Commercial & Industrial | Pass
Financing Receivable, Recorded Investment [Line Items]
Total Loans	495,764	414,333
Excluding Purchased Impaired | Commercial & Industrial | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total Loans	10,088	16,724
Excluding Purchased Impaired | Commercial & Industrial | Substandard
Financing Receivable, Recorded Investment [Line Items]
Total Loans	2,860	2,396
Excluding Purchased Impaired | Commercial & Industrial | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Total Loans	0	99
Excluding Purchased Impaired | Residential 1-4 Family
Financing Receivable, Recorded Investment [Line Items]
Total Loans	982,533	957,310
Excluding Purchased Impaired | Residential 1-4 Family | Pass
Financing Receivable, Recorded Investment [Line Items]
Total Loans	950,707	912,839
Excluding Purchased Impaired | Residential 1-4 Family | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total Loans	22,163	34,728
Excluding Purchased Impaired | Residential 1-4 Family | Substandard
Financing Receivable, Recorded Investment [Line Items]
Total Loans	7,571	8,037
Excluding Purchased Impaired | Residential 1-4 Family | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Total Loans	2,092	1,706
Excluding Purchased Impaired | Auto
Financing Receivable, Recorded Investment [Line Items]
Total Loans	255,188	234,061
Excluding Purchased Impaired | Auto | Pass
Financing Receivable, Recorded Investment [Line Items]
Total Loans	252,549	230,670
Excluding Purchased Impaired | Auto | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total Loans	2,459	3,109
Excluding Purchased Impaired | Auto | Substandard
Financing Receivable, Recorded Investment [Line Items]
Total Loans	91	194
Excluding Purchased Impaired | Auto | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Total Loans	89	88
Excluding Purchased Impaired | HELOC
Financing Receivable, Recorded Investment [Line Items]
Total Loans	522,599	514,935
Excluding Purchased Impaired | HELOC | Pass
Financing Receivable, Recorded Investment [Line Items]
Total Loans	516,178	507,514
Excluding Purchased Impaired | HELOC | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total Loans	4,745	4,801
Excluding Purchased Impaired | HELOC | Substandard
Financing Receivable, Recorded Investment [Line Items]
Total Loans	1,305	1,611
Excluding Purchased Impaired | HELOC | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Total Loans	371	1,009
Excluding Purchased Impaired | Consumer and all other
Financing Receivable, Recorded Investment [Line Items]
Total Loans	432,316	303,501
Excluding Purchased Impaired | Consumer and all other | Pass
Financing Receivable, Recorded Investment [Line Items]
Total Loans	428,574	299,014
Excluding Purchased Impaired | Consumer and all other | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total Loans	3,503	3,996
Excluding Purchased Impaired | Consumer and all other | Substandard
Financing Receivable, Recorded Investment [Line Items]
Total Loans	42	231
Excluding Purchased Impaired | Consumer and all other | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Total Loans	$ 197	$ 260

XML

LOANS AND ALLOWANCE FOR LOAN LOSSES (Loans Receivables Related Risk Rating Including Purchased Impaired Loans) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015	Sep. 30, 2015
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	$ 6,148,918	$ 5,671,462	$ 5,543,621
Construction and Land Development
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	776,430	749,720	694,645
Commercial Real Estate - Owner Occupied
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	857,142	860,086	863,578
Commercial Real Estate - Non-Owner Occupied
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	1,454,828	1,270,480	1,223,607
Multifamily Real Estate
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	339,313	322,528	329,959
Commercial & Industrial
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	509,857	435,365	409,657
Residential 1-4 Family
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	999,361	978,469	987,788
HELOC
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	524,097	516,726	514,362
Consumer and all other
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	432,702	304,027	294,031
Purchased Impaired
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	62,346	73,737	78,606
Purchased Impaired | Pass
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	21,053	22,339
Purchased Impaired | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	29,968	33,862
Purchased Impaired | Substandard
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	10,384	15,760
Purchased Impaired | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	941	1,776
Purchased Impaired | Construction and Land Development
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	3,205	5,986	7,628
Purchased Impaired | Construction and Land Development | Pass
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	1,102	2,059
Purchased Impaired | Construction and Land Development | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	1,677	1,778
Purchased Impaired | Construction and Land Development | Substandard
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	426	1,908
Purchased Impaired | Construction and Land Development | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	0	241
Purchased Impaired | Commercial Real Estate - Owner Occupied
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	19,064	27,388	28,694
Purchased Impaired | Commercial Real Estate - Owner Occupied | Pass
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	5,313	5,260
Purchased Impaired | Commercial Real Estate - Owner Occupied | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	9,036	15,530
Purchased Impaired | Commercial Real Estate - Owner Occupied | Substandard
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	4,715	6,598
Purchased Impaired | Commercial Real Estate - Owner Occupied | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	0	0
Purchased Impaired | Commercial Real Estate - Non-Owner Occupied
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	18,141	13,519	13,326
Purchased Impaired | Commercial Real Estate - Non-Owner Occupied | Pass
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	4,855	4,442
Purchased Impaired | Commercial Real Estate - Non-Owner Occupied | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	11,562	7,827
Purchased Impaired | Commercial Real Estate - Non-Owner Occupied | Substandard
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	1,724	1,250
Purchased Impaired | Commercial Real Estate - Non-Owner Occupied | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	0	0
Purchased Impaired | Multifamily Real Estate
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	2,079	1,555	1,943
Purchased Impaired | Multifamily Real Estate | Pass
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	347	356
Purchased Impaired | Multifamily Real Estate | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	1,732	1,199
Purchased Impaired | Multifamily Real Estate | Substandard
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	0	0
Purchased Impaired | Multifamily Real Estate | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	0	0
Purchased Impaired | Commercial & Industrial
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	1,145	1,813	2,245
Purchased Impaired | Commercial & Industrial | Pass
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	93	144
Purchased Impaired | Commercial & Industrial | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	496	359
Purchased Impaired | Commercial & Industrial | Substandard
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	556	1,289
Purchased Impaired | Commercial & Industrial | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	0	21
Purchased Impaired | Residential 1-4 Family
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	16,828	21,159	22,379
Purchased Impaired | Residential 1-4 Family | Pass
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	8,085	9,098
Purchased Impaired | Residential 1-4 Family | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	5,297	6,380
Purchased Impaired | Residential 1-4 Family | Substandard
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	2,941	4,605
Purchased Impaired | Residential 1-4 Family | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	505	1,076
Purchased Impaired | HELOC
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	1,498	1,791	1,812
Purchased Impaired | HELOC | Pass
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	932	923
Purchased Impaired | HELOC | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	130	410
Purchased Impaired | HELOC | Substandard
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	0	20
Purchased Impaired | HELOC | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	436	438
Purchased Impaired | Consumer and all other
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	386	526	$ 579
Purchased Impaired | Consumer and all other | Pass
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	326	57
Purchased Impaired | Consumer and all other | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	38	379
Purchased Impaired | Consumer and all other | Substandard
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	22	90
Purchased Impaired | Consumer and all other | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	$ 0	$ 0

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LOANS AND ALLOWANCE FOR LOAN LOSSES (Schedule of Acquired Loan Portfolio and Accretable Yield) (Details) - Purchased Impaired - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Accretable Yield
Balance at beginning of period	$ 22,139	$ 28,956
Accretion	(4,232)	(4,707)
Reclass of nonaccretable difference due to improvement in expected cash flows	3,580	3,168
Other, net	(1,149)	(5,624)
Balance at end of period	$ 20,338	$ 21,793

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INTANGIBLE ASSETS (Narrative) (Details) - USD ($)		3 Months Ended			9 Months Ended
	May 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015	Jan. 01, 2014
Finite-Lived Intangible Assets [Line Items]
Goodwill		$ 298,191,000			$ 298,191,000		$ 293,522,000
Impairment charges			$ 0
Intangible assets, amortization expense		1,843,000		$ 2,074,000	5,468,000	$ 6,435,000
StellarOne
Finite-Lived Intangible Assets [Line Items]
Acquired intangible assets								$ 29,600,000
Goodwill								$ 234,100,000
ODCM
Finite-Lived Intangible Assets [Line Items]
Goodwill	$ 4,700,000
Amortizable intangible assets	$ 4,500,000
Minimum | ODCM
Finite-Lived Intangible Assets [Line Items]
Intangible assets, amortization period	5 years
Maximum | ODCM
Finite-Lived Intangible Assets [Line Items]
Intangible assets, amortization period	10 years
Core Deposits
Finite-Lived Intangible Assets [Line Items]
Intangible assets, amortization expense		1,700,000		$ 2,100,000	$ 5,300,000	$ 6,400,000
Core Deposits | Minimum
Finite-Lived Intangible Assets [Line Items]
Intangible assets, amortization period					4 years
Core Deposits | Maximum
Finite-Lived Intangible Assets [Line Items]
Intangible assets, amortization period					14 years
Other Intangible Assets
Finite-Lived Intangible Assets [Line Items]
Intangible assets, amortization expense		$ 160,000			$ 160,000

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INTANGIBLE ASSETS (Estimated Remaining Amortization Expense of Core Deposit Intangibles) (Details) $ in Thousands	Sep. 30, 2016 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
For the remaining three months of 2016	$ 1,745
For the year ending December 31, 2017	6,070
For the year ending December 31, 2018	4,624
For the year ending December 31, 2019	3,573
For the year ending December 31, 2020	2,508
Thereafter	3,823
Total estimated amortization expense	$ 22,343

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BORROWINGS (Short-Term Borrowings) (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Debt Disclosure [Abstract]
Securities sold under agreements to repurchase	$ 64,225	$ 84,977
Other short-term borrowings	601,500	304,000
Total short-term borrowings	665,725	388,977
Maximum month-end outstanding balance	678,262	445,761
Average outstanding balance during the period	$ 583,418	$ 379,783
Average interest rate (year-to-date)	0.48%	0.25%
Average interest rate at end of period	0.48%	0.27%
Other short-term borrowings:
Federal funds purchased	$ 6,000	$ 0
FHLB	579,500	304,000
Other lines of credit	$ 16,000	$ 0

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BORROWINGS (Narrative) (Details) $ in Thousands			3 Months Ended		9 Months Ended
	Jan. 01, 2014 USD ($)	Aug. 23, 2012 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)	Sep. 30, 2016 USD ($) acquisition	Sep. 30, 2015 USD ($)	Dec. 31, 2015 USD ($)
Subordinated Borrowing [Line Items]
Remaining available balance for the federal funds lines			$ 169,000		$ 169,000		$ 175,000
Remaining available balance of alternate line of credit			9,000		9,000		25,000
Maximum collateral dependent line of credit with the FHLB			2,400,000		2,400,000		1,500,000
Prepayment penalty		$ 19,600
Prepayment penalty amortization expense			474	$ 463	1,404	$ 1,400
Carrying value of the loans and securities pledged as collateral for FHLB			2,000,000		2,000,000		$ 1,900,000
Trust Preferred Capital Notes
Subordinated Borrowing [Line Items]
Trust preferred capital notes principal balance					$ 90,500
Acquisitions, Prior To 2006
Subordinated Borrowing [Line Items]
Number of bank acquisitions | acquisition					2
Trust preferred capital notes principal balance					$ 58,500
StellarOne
Subordinated Borrowing [Line Items]
Long-term FHLB borrowings	$ 70,000		45,000		45,000
Remaining fair value premium on acquired FHLB advances			693		693
StellarOne | Trust Preferred Capital Notes
Subordinated Borrowing [Line Items]
Trust preferred capital notes principal balance	$ 32,000
Remaining fair value discount on acquired notes			$ 6,800		$ 6,800

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BORROWINGS (Trust Preferred Capital Notes Qualify for Tier 1 Capital) (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Debt Instrument [Line Items]
Investment	$ 91,460	$ 84,846
Trust Preferred Capital Notes
Debt Instrument [Line Items]
Trust preferred capital notes principal balance	90,500
Investment	2,801
Statutory Trust I
Debt Instrument [Line Items]
Trust preferred capital notes principal balance	22,500
Investment	$ 696
Rate	3.60%
Maturity	Jun. 17, 2034
Statutory Trust I | LIBOR
Debt Instrument [Line Items]
Spread to 3-Month LIBOR	2.75%
Statutory Trust II
Debt Instrument [Line Items]
Trust preferred capital notes principal balance	$ 36,000
Investment	$ 1,114
Rate	2.25%
Maturity	Jun. 15, 2036
Statutory Trust II | LIBOR
Debt Instrument [Line Items]
Spread to 3-Month LIBOR	1.40%
VFG Limited Liability Trust I Indenture
Debt Instrument [Line Items]
Trust preferred capital notes principal balance	$ 20,000
Investment	$ 619
Rate	3.58%
Maturity	Mar. 18, 2034
VFG Limited Liability Trust I Indenture | LIBOR
Debt Instrument [Line Items]
Spread to 3-Month LIBOR	2.73%
FNB Statutory Trust II Indenture
Debt Instrument [Line Items]
Trust preferred capital notes principal balance	$ 12,000
Investment	$ 372
Rate	3.95%
Maturity	Jun. 26, 2033
FNB Statutory Trust II Indenture | LIBOR
Debt Instrument [Line Items]
Spread to 3-Month LIBOR	3.10%

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BORROWINGS (Advances from the FHLB) (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Federal Home Loan Bank, Advances [Line Items]
Advance Amount	$ 185,000	$ 200,000
Adjustable Rate Credit One
Federal Home Loan Bank, Advances [Line Items]
Interest Rate (1)	1.29%	1.05%
Maturity Date	Aug. 23, 2022	Aug. 23, 2022
Advance Amount	$ 55,000	$ 55,000
Adjustable Rate Credit One | LIBOR
Federal Home Loan Bank, Advances [Line Items]
Spread to 3-Month LIBOR	0.44%	0.44%
Adjustable Rate Credit Two
Federal Home Loan Bank, Advances [Line Items]
Interest Rate (1)	1.31%	1.07%
Maturity Date	Nov. 23, 2022	Nov. 23, 2022
Advance Amount	$ 65,000	$ 65,000
Adjustable Rate Credit Two | LIBOR
Federal Home Loan Bank, Advances [Line Items]
Spread to 3-Month LIBOR	0.45%	0.45%
Adjustable Rate Credit Three
Federal Home Loan Bank, Advances [Line Items]
Interest Rate (1)	1.31%	1.07%
Maturity Date	Nov. 23, 2022	Nov. 23, 2022
Advance Amount	$ 10,000	$ 10,000
Adjustable Rate Credit Three | LIBOR
Federal Home Loan Bank, Advances [Line Items]
Spread to 3-Month LIBOR	0.45%	0.45%
Adjustable Rate Credit Four
Federal Home Loan Bank, Advances [Line Items]
Interest Rate (1)	1.31%	1.07%
Maturity Date	Nov. 23, 2022	Nov. 23, 2022
Advance Amount	$ 10,000	$ 10,000
Adjustable Rate Credit Four | LIBOR
Federal Home Loan Bank, Advances [Line Items]
Spread to 3-Month LIBOR	0.45%	0.45%
Fixed Rate One
Federal Home Loan Bank, Advances [Line Items]
Interest Rate (1)	3.62%	3.62%
Maturity Date	Nov. 28, 2017	Nov. 28, 2017
Advance Amount	$ 10,000	$ 10,000
Fixed Rate Two
Federal Home Loan Bank, Advances [Line Items]
Interest Rate (1)	3.75%	3.75%
Maturity Date	Jul. 30, 2018	Jul. 30, 2018
Advance Amount	$ 5,000	$ 5,000
Fixed Rate Three
Federal Home Loan Bank, Advances [Line Items]
Interest Rate (1)	3.97%	3.97%
Maturity Date	Jul. 30, 2018	Jul. 30, 2018
Advance Amount	$ 5,000	$ 5,000
Fixed Rate Hybrid One
Federal Home Loan Bank, Advances [Line Items]
Interest Rate (1)	2.11%	2.11%
Maturity Date	Oct. 05, 2016	Oct. 05, 2016
Advance Amount	$ 25,000	$ 25,000
Fixed Rate Hybrid Two
Federal Home Loan Bank, Advances [Line Items]
Interest Rate (1)		0.91%
Maturity Date		Jul. 25, 2016
Advance Amount		$ 15,000

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BORROWINGS (Contractual Maturities of Long-Term Debt) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Fair Value Premium (Discount)
For the remaining three months of 2016	$ 71
2017	170
2018	(143)
2019	(286)
2020	(301)
Thereafter	(5,623)
Total Long-term borrowings	(6,112)
Prepayment Penalty
For the remaining three months of 2016	(477)
2017	(1,922)
2018	(1,970)
2019	(2,018)
2020	(2,074)
Thereafter	(3,826)
Total Long-term borrowings	(12,287)
Total Long-term Borrowings
For the remaining three months of 2016	24,594
2017	8,248
2018	7,887
2019	(2,304)
2020	(2,375)
Thereafter	223,852
Total Long-term borrowings	259,902	$ 291,198
Trust Preferred Capital Notes
Total Long-term Borrowings, Gross
Thereafter	93,301
Total Long-term borrowings	93,301
FHLB Advances
Total Long-term Borrowings, Gross
For the remaining three months of 2016	25,000
2017	10,000
2018	10,000
Thereafter	140,000
Total Long-term borrowings	$ 185,000

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COMMITMENTS AND CONTINGENCIES (Balances of Commitments and Contingencies) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Commitments with off-balance sheet risk:
Total commitments with off-balance sheet risk	$ 1,948,514	$ 1,747,090
Commitments with balance sheet risk:
Loans held for sale	46,814	36,030
Total other commitments	1,995,328	1,783,120
Commitments to Extend Credit
Commitments with off-balance sheet risk:
Total commitments with off-balance sheet risk	1,787,953	1,557,350
Standby Letters of Credit
Commitments with off-balance sheet risk:
Total commitments with off-balance sheet risk	84,491	139,371
Mortgage Loan Rate Lock Commitments
Commitments with off-balance sheet risk:
Total commitments with off-balance sheet risk	$ 76,070	$ 50,369

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COMMITMENTS AND CONTINGENCIES (Narrative) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Other Commitments [Line Items]
Daily average required reserves	$ 52,700	$ 48,700
Deposits with other financial institutions	49,300
Uninsured deposits with other financial institutions	14,200
Indemnification reserves	506	$ 450
Loan Swaps
Other Commitments [Line Items]
Deposits with other financial institutions serves as collateral	14,800
Cash Flow Hedges
Other Commitments [Line Items]
Deposits with other financial institutions serves as collateral	$ 18,800

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DERIVATIVES (Narrative) (Details) $ in Thousands		9 Months Ended	12 Months Ended
	Jun. 13, 2016 USD ($) derivative_instrument	Sep. 30, 2016 USD ($)	Dec. 31, 2015 USD ($)
Minimum
Derivatives, Fair Value [Line Items]
Interest rate lock commitments period		30 days
Maximum
Derivatives, Fair Value [Line Items]
Interest rate lock commitments period		120 days
Cash Flow Hedges
Derivatives, Fair Value [Line Items]
Number of interest rate swaps terminated | derivative_instrument	3
Unrealized gain within accumulated other comprehensive income, to be reclassified into earnings	$ 1,300
Reclassification of gain (loss) from accumulated other comprehensive income to earnings, estimate of time to transfer	3 years
Estimated net amount of gains expected to be reclassified into earnings within the next twelve months		$ 377
Fair Value Hedges
Derivatives, Fair Value [Line Items]
Aggregate notional amount of the hedged items		43,500	$ 61,200
Fair value of aggregate notional amount of the hedged items		$ 3,200	$ 689

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DERIVATIVES (Summary of the Derivatives) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Interest Rate Lock Commitments
Summary of the derivative designated as a cash flow hedge
Derivative Assets	$ 1,422	$ 701
Designated as Accounting Hedges | Cash Flow Hedges
Summary of the derivative designated as a cash flow hedge
Notional or Contractual Amount	188,500	263,000
Derivative Assets	343	946
Derivative Liabilities	16,087	10,352
Collateral Pledged	22,071	14,449
Designated as Accounting Hedges | Fair Value Hedges
Summary of the derivative designated as a cash flow hedge
Notional or Contractual Amount	43,455	61,150
Derivative Assets	0	0
Derivative Liabilities	3,529	888
Collateral Pledged	0	0
Not Designated as Accounting Hedges | Interest Rate Lock Commitments
Summary of the derivative designated as a cash flow hedge
Notional or Contractual Amount	76,070	50,369
Derivative Assets	1,422	701
Derivative Liabilities	0	0
Collateral Pledged	0	0
Not Designated as Accounting Hedges | Pay Fixed - Receive Floating Interest Rate Swaps
Summary of the derivative designated as a cash flow hedge
Notional or Contractual Amount	280,336	138,969
Derivative Assets	12,218	3,758
Derivative Liabilities	0	0
Collateral Pledged	0	0
Not Designated as Accounting Hedges | Pay Floating - Receive Fixed Interest Rate Swaps
Summary of the derivative designated as a cash flow hedge
Notional or Contractual Amount	280,336	138,969
Derivative Assets	0	0
Derivative Liabilities	12,218	3,758
Collateral Pledged	$ 16,141	$ 5,983

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Change in Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
AOCI Attributable to Parent, Net of Tax
Beginning balance			$ 995,367	$ 977,169
Unrealized gain transferred from AFS to HTM				0
Other comprehensive income (loss)	$ 806	$ (1,386)	3,269	(4,337)
Amounts reclassified from accumulated other comprehensive income	154	303	338	228
Net current period other comprehensive income (loss)	960	(1,083)	3,607	(4,109)
Ending balance	1,000,964	995,012	1,000,964	995,012
Accumulated Other Comprehensive Income (Loss)
AOCI Attributable to Parent, Net of Tax
Beginning balance	8,899	9,229	6,252	12,255
Net current period other comprehensive income (loss)			3,607	(4,109)
Ending balance	9,859	8,146	9,859	8,146
Unrealized Gains (Losses) on AFS Securities
AOCI Attributable to Parent, Net of Tax
Beginning balance	14,412	8,738	7,777	17,439
Unrealized gain transferred from AFS to HTM				(5,251)
Other comprehensive income (loss)	1,121	1,250	7,851	(1,812)
Amounts reclassified from accumulated other comprehensive income	0	146	(95)	(242)
Net current period other comprehensive income (loss)	1,121	1,396	7,756	(2,054)
Ending balance	15,533	10,134	15,533	10,134
Unrealized Gain for AFS Securities Transferred to HTM
AOCI Attributable to Parent, Net of Tax
Beginning balance	3,853	5,043	4,432	0
Unrealized gain transferred from AFS to HTM				5,251
Other comprehensive income (loss)	(237)	(308)	(816)	(516)
Amounts reclassified from accumulated other comprehensive income	0	0	0	0
Net current period other comprehensive income (loss)	(237)	(308)	(816)	(516)
Ending balance	3,616	4,735	3,616	4,735
Change in Fair Value of Cash Flow Hedge
AOCI Attributable to Parent, Net of Tax
Beginning balance	(9,366)	(4,552)	(5,957)	(5,184)
Unrealized gain transferred from AFS to HTM				0
Other comprehensive income (loss)	(78)	(2,328)	(3,766)	(2,009)
Amounts reclassified from accumulated other comprehensive income	154	157	433	470
Net current period other comprehensive income (loss)	76	(2,171)	(3,333)	(1,539)
Ending balance	$ (9,290)	$ (6,723)	$ (9,290)	$ (6,723)

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Narrative) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Accumulated Other Comprehensive Income (Loss) [Line Items]
Gains on securities transactions, net	$ 0	$ 75,000	$ 145,000	$ 672,000
Other than temporary impairment losses, available-for-sale securities	0	300,000	0	300,000
Tax expense (benefit) related to (gains) losses on the sale of securities	0	(79,000)	51,000	130,000
Tax expense (benefit) related to (gains) losses on the cash flow hedges	(83,000)	(84,000)	(233,000)	(253,000)
Cash Flow Hedges | Interest Expense, Net
Accumulated Other Comprehensive Income (Loss) [Line Items]
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, before Tax	$ 237,000	$ 241,000	$ 666,000	$ 723,000

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FAIR VALUE MEASUREMENTS (Narrative) (Details) participant in Thousands, $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)	Sep. 30, 2016 USD ($) participant	Sep. 30, 2015 USD ($)	Dec. 31, 2015
Fair Value Disclosures [Abstract]
Weighted average pull through rate			80.00%		80.00%
Minimum number of market participants (more than) | participant			4
Level 3 Fair value measurements weighted average related to impaired loans			12.40%		7.00%
Level 3 fair value measurements weighted average related to other real estate owned			24.70%		32.00%
Total valuation expenses related to OREO properties | $	$ 479	$ 473	$ 879	$ 1,773

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FAIR VALUE MEASUREMENTS (Schedule of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
ASSETS
Securities available for sale	$ 954,984	$ 903,292
Loans held for sale	46,814	36,030
Interest rate swap	12,218	3,758
Cash flow hedges	343	946
LIABILITIES
Interest rate swap	12,218	3,758
Cash flow hedges	16,087	10,352
Fair value hedges	3,529	888
Interest Rate Lock Commitments
ASSETS
Interest rate lock commitments	1,422	701
Obligations of States and Political Subdivisions
ASSETS
Securities available for sale	279,223	268,079
Corporate and Other Bonds
ASSETS
Securities available for sale	121,747	75,979
Mortgage-Backed Securities
ASSETS
Securities available for sale	540,596	548,171
Other Securities
ASSETS
Securities available for sale	13,418	11,063
Quoted Prices in Active Markets for Identical Assets Level 1
ASSETS
Securities available for sale	0	0
Loans held for sale	0	0
Interest rate swap	0	0
Cash flow hedges	0	0
LIABILITIES
Interest rate swap	0	0
Cash flow hedges	0	0
Fair value hedges	0	0
Quoted Prices in Active Markets for Identical Assets Level 1 | Interest Rate Lock Commitments
ASSETS
Interest rate lock commitments	0	0
Significant Other Observable Inputs Level 2
ASSETS
Securities available for sale	954,984	903,292
Loans held for sale	46,814	36,030
Interest rate swap	12,218	3,758
Cash flow hedges	343	946
LIABILITIES
Interest rate swap	12,218	3,758
Cash flow hedges	16,087	10,352
Fair value hedges	3,529	888
Significant Other Observable Inputs Level 2 | Interest Rate Lock Commitments
ASSETS
Interest rate lock commitments	0	0
Significant Unobservable Inputs Level 3
ASSETS
Securities available for sale	0	0
Loans held for sale	0	0
Interest rate swap	0	0
Cash flow hedges	0	0
LIABILITIES
Interest rate swap	0	0
Cash flow hedges	0	0
Fair value hedges	0	0
Significant Unobservable Inputs Level 3 | Interest Rate Lock Commitments
ASSETS
Interest rate lock commitments	1,422	701
Recurring
ASSETS
Loans held for sale	46,814	36,030
Interest rate swap	12,218	3,758
Cash flow hedges	343	946
LIABILITIES
Interest rate swap	12,218	3,758
Cash flow hedges	16,087	10,352
Fair value hedges	3,529	888
Recurring | Interest Rate Lock Commitments
ASSETS
Interest rate lock commitments	1,422	701
Recurring | Obligations of States and Political Subdivisions
ASSETS
Securities available for sale	279,223	268,079
Recurring | Corporate and Other Bonds
ASSETS
Securities available for sale	121,747	75,979
Recurring | Mortgage-Backed Securities
ASSETS
Securities available for sale	540,596	548,171
Recurring | Other Securities
ASSETS
Securities available for sale	13,418	11,063
Recurring | Quoted Prices in Active Markets for Identical Assets Level 1
ASSETS
Loans held for sale	0	0
Interest rate swap	0	0
Cash flow hedges	0	0
LIABILITIES
Interest rate swap	0	0
Cash flow hedges	0	0
Fair value hedges	0	0
Recurring | Quoted Prices in Active Markets for Identical Assets Level 1 | Interest Rate Lock Commitments
ASSETS
Interest rate lock commitments	0	0
Recurring | Quoted Prices in Active Markets for Identical Assets Level 1 | Obligations of States and Political Subdivisions
ASSETS
Securities available for sale	0	0
Recurring | Quoted Prices in Active Markets for Identical Assets Level 1 | Corporate and Other Bonds
ASSETS
Securities available for sale	0	0
Recurring | Quoted Prices in Active Markets for Identical Assets Level 1 | Mortgage-Backed Securities
ASSETS
Securities available for sale	0	0
Recurring | Quoted Prices in Active Markets for Identical Assets Level 1 | Other Securities
ASSETS
Securities available for sale	0	0
Recurring | Significant Other Observable Inputs Level 2
ASSETS
Loans held for sale	46,814	36,030
Interest rate swap	12,218	3,758
Cash flow hedges	343	946
LIABILITIES
Interest rate swap	12,218	3,758
Cash flow hedges	16,087	10,352
Fair value hedges	3,529	888
Recurring | Significant Other Observable Inputs Level 2 | Interest Rate Lock Commitments
ASSETS
Interest rate lock commitments	0	0
Recurring | Significant Other Observable Inputs Level 2 | Obligations of States and Political Subdivisions
ASSETS
Securities available for sale	279,223	268,079
Recurring | Significant Other Observable Inputs Level 2 | Corporate and Other Bonds
ASSETS
Securities available for sale	121,747	75,979
Recurring | Significant Other Observable Inputs Level 2 | Mortgage-Backed Securities
ASSETS
Securities available for sale	540,596	548,171
Recurring | Significant Other Observable Inputs Level 2 | Other Securities
ASSETS
Securities available for sale	13,418	11,063
Recurring | Significant Unobservable Inputs Level 3
ASSETS
Loans held for sale	0	0
Interest rate swap	0	0
Cash flow hedges	0	0
LIABILITIES
Interest rate swap	0	0
Cash flow hedges	0	0
Fair value hedges	0	0
Recurring | Significant Unobservable Inputs Level 3 | Interest Rate Lock Commitments
ASSETS
Interest rate lock commitments	1,422	701
Recurring | Significant Unobservable Inputs Level 3 | Obligations of States and Political Subdivisions
ASSETS
Securities available for sale	0	0
Recurring | Significant Unobservable Inputs Level 3 | Corporate and Other Bonds
ASSETS
Securities available for sale	0	0
Recurring | Significant Unobservable Inputs Level 3 | Mortgage-Backed Securities
ASSETS
Securities available for sale	0	0
Recurring | Significant Unobservable Inputs Level 3 | Other Securities
ASSETS
Securities available for sale	$ 0	$ 0

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FAIR VALUE MEASUREMENTS (Schedule of Financial Assets Measured at Fair Value on Nonrecurring Basis) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
ASSETS
Other real estate owned	$ 10,581	$ 15,299
Nonrecurring
ASSETS
Impaired loans	2,573	2,214
Other real estate owned	10,581	15,299
Nonrecurring | Quoted Prices in Active Markets for Identical Assets Level 1
ASSETS
Impaired loans	0	0
Other real estate owned	0	0
Nonrecurring | Significant Other Observable Inputs Level 2
ASSETS
Impaired loans	0	0
Other real estate owned	0	0
Nonrecurring | Significant Unobservable Inputs Level 3
ASSETS
Impaired loans	2,573	2,214
Other real estate owned	$ 10,581	$ 15,299

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FAIR VALUE MEASUREMENTS (Carrying Values and Estimated Fair Values of the Company's Financial Instruments) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
ASSETS
Cash and cash equivalents	$ 156,175	$ 142,660
Securities available for sale, at fair value	954,984	903,292
Held to maturity securities	209,717	209,437
Restricted stock	63,204	51,828
Loans held for sale	46,814	36,030
Net loans	6,144,971	5,671,155
Derivatives:
Interest rate swap	12,218	3,758
Cash flow hedges	343	946
Accrued interest receivable	22,084	20,760
Bank owned life insurance	177,847	173,687
LIABILITIES
Deposits	6,258,166	5,957,484
Borrowings	905,653	659,364
Accrued interest payable	1,581	1,578
Derivatives:
Interest rate swap	12,218	3,758
Cash flow hedges	16,087	10,352
Fair value hedges	3,529	888
Interest Rate Lock Commitments
Derivatives:
Interest rate lock commitments	1,422	701
Carrying Value
ASSETS
Cash and cash equivalents	156,175	142,660
Securities available for sale, at fair value	954,984	903,292
Held to maturity securities	200,839	205,374
Restricted stock	63,204	51,828
Loans held for sale	46,814	36,030
Net loans	6,112,376	5,637,415
Derivatives:
Interest rate swap	12,218	3,758
Cash flow hedges	343	946
Accrued interest receivable	22,084	20,760
Bank owned life insurance	177,847	173,687
LIABILITIES
Deposits	6,258,506	5,963,936
Borrowings	925,627	680,175
Accrued interest payable	1,581	1,578
Derivatives:
Interest rate swap	12,218	3,758
Cash flow hedges	16,087	10,352
Fair value hedges	3,529	888
Carrying Value | Interest Rate Lock Commitments
Derivatives:
Interest rate lock commitments	1,422	701
Quoted Prices in Active Markets for Identical Assets Level 1
ASSETS
Cash and cash equivalents	156,175	142,660
Securities available for sale, at fair value	0	0
Held to maturity securities	0	0
Restricted stock	0	0
Loans held for sale	0	0
Net loans	0	0
Derivatives:
Interest rate swap	0	0
Cash flow hedges	0	0
Accrued interest receivable	0	0
Bank owned life insurance	0	0
LIABILITIES
Deposits	0	0
Borrowings	0	0
Accrued interest payable	0	0
Derivatives:
Interest rate swap	0	0
Cash flow hedges	0	0
Fair value hedges	0	0
Quoted Prices in Active Markets for Identical Assets Level 1 | Interest Rate Lock Commitments
Derivatives:
Interest rate lock commitments	0	0
Significant Other Observable Inputs Level 2
ASSETS
Cash and cash equivalents	0	0
Securities available for sale, at fair value	954,984	903,292
Held to maturity securities	209,717	209,437
Restricted stock	63,204	51,828
Loans held for sale	46,814	36,030
Net loans	0	0
Derivatives:
Interest rate swap	12,218	3,758
Cash flow hedges	343	946
Accrued interest receivable	22,084	20,760
Bank owned life insurance	177,847	173,687
LIABILITIES
Deposits	6,258,166	5,957,484
Borrowings	905,653	659,364
Accrued interest payable	1,581	1,578
Derivatives:
Interest rate swap	12,218	3,758
Cash flow hedges	16,087	10,352
Fair value hedges	3,529	888
Significant Other Observable Inputs Level 2 | Interest Rate Lock Commitments
Derivatives:
Interest rate lock commitments	0	0
Significant Unobservable Inputs Level 3
ASSETS
Cash and cash equivalents	0	0
Securities available for sale, at fair value	0	0
Held to maturity securities	0	0
Restricted stock	0	0
Loans held for sale	0	0
Net loans	6,144,971	5,671,155
Derivatives:
Interest rate swap	0	0
Cash flow hedges	0	0
Accrued interest receivable	0	0
Bank owned life insurance	0	0
LIABILITIES
Deposits	0	0
Borrowings	0	0
Accrued interest payable	0	0
Derivatives:
Interest rate swap	0	0
Cash flow hedges	0	0
Fair value hedges	0	0
Significant Unobservable Inputs Level 3 | Interest Rate Lock Commitments
Derivatives:
Interest rate lock commitments	$ 1,422	$ 701

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EARNINGS PER SHARE (Narrative) (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Earnings Per Share [Abstract]
Anti-dilutive stock awards, shares	118	51,179	579	54,475

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EARNINGS PER SHARE (Reconciliation of the Denominators of the Basic and Diluted EPS Computations) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Earnings Per Share [Abstract]
Basic EPS, Net Income Available to Common Stockholders (Numerator)	$ 20,401	$ 18,216	$ 56,699	$ 49,264
Basic EPS, Weighted Average Shares (Denominator)	43,565,937	45,087,409	43,853,548	45,107,290
Basic EPS, Per Share Amount (in usd per share)	$ 0.47	$ 0.40	$ 1.29	$ 1.09
Effect of dilutive stock awards, Weighted Average Shares (Denominator)	189,000	84,000	114,000	82,000
Diluted EPS, Net Income Available to Common Stockholders (Numerator)	$ 20,401	$ 18,216	$ 56,699	$ 49,264
Diluted EPS, Weighted Average Common Shares	43,754,915	45,171,610	43,967,725	45,189,578
Diluted EPS, Per Share Amount (in usd per share)	$ 0.47	$ 0.40	$ 1.29	$ 1.09

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SEGMENT REPORTING DISCLOSURES (Narrative) (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2016 store	Sep. 30, 2015	Sep. 30, 2016 segment store entity	Sep. 30, 2015
Segment Reporting Information [Line Items]
Number of reportable segments | segment			2
Number of subsidiary bank | entity			1
Number of retail locations | store	115		115
Warehouse Line of Credit | LIBOR
Segment Reporting Information [Line Items]
Spread on LIBOR	0.15%	0.15%	0.15%	0.15%
Mortgage banking segment interest - floor	0.00%	0.00%	0.00%	0.00%

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SEGMENT REPORTING DISCLOSURES (Information About Reportable Segments and Reconciliation) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Segment Reporting Information [Line Items]
Net interest income	$ 67,028	$ 63,444	$ 196,535	$ 189,229
Provision for credit losses	2,472	2,062	7,376	7,561
Net interest income after provision for credit losses	64,556	61,382	189,159	181,668
Noninterest income	18,950	16,725	52,857	47,990
Noninterest expenses	56,913	53,325	166,436	162,405
Income before income taxes	26,593	24,782	75,580	67,253
Income tax expense	6,192	6,566	18,881	17,989
Net income (loss)	20,401	18,216	56,699	49,264
Total assets	8,258,230	7,594,313	8,258,230	7,594,313	$ 7,693,291
Operating Segments | Community Bank
Segment Reporting Information [Line Items]
Net interest income	66,605	63,075	195,508	188,240
Provision for credit losses	2,455	2,000	7,215	7,450
Net interest income after provision for credit losses	64,150	61,075	188,293	180,790
Noninterest income	15,589	14,287	44,137	40,658
Noninterest expenses	54,353	50,674	158,964	154,011
Income before income taxes	25,386	24,688	73,466	67,437
Income tax expense	5,770	6,531	18,145	18,060
Net income (loss)	19,616	18,157	55,321	49,377
Total assets	8,251,351	7,588,606	8,251,351	7,588,606
Operating Segments | Mortgage
Segment Reporting Information [Line Items]
Net interest income	423	369	1,027	989
Provision for credit losses	17	62	161	111
Net interest income after provision for credit losses	406	307	866	878
Noninterest income	3,501	2,608	9,185	7,844
Noninterest expenses	2,700	2,821	7,937	8,906
Income before income taxes	1,207	94	2,114	(184)
Income tax expense	422	35	736	(71)
Net income (loss)	785	59	1,378	(113)
Total assets	90,692	62,127	90,692	62,127
Eliminations
Segment Reporting Information [Line Items]
Net interest income	0	0	0	0
Provision for credit losses	0	0	0	0
Net interest income after provision for credit losses	0	0	0	0
Noninterest income	(140)	(170)	(465)	(512)
Noninterest expenses	(140)	(170)	(465)	(512)
Income before income taxes	0	0	0	0
Income tax expense	0	0	0	0
Net income (loss)	0	0	0	0
Total assets	$ (83,813)	$ (56,420)	$ (83,813)	$ (56,420)