10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the Quarterly Period Ended March 31, 2017

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, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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

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

Act. ¨

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

Yes ¨ No x

The number of shares of common stock outstanding as of May 3, 2017 was 43,677,935.

UNION BANKSHARES CORPORATION

FORM 10-Q

INDEX

ITEM		PAGE
	PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Balance Sheets as of March 31, 2017 (unaudited) and December 31, 2016 (audited)	2
	Consolidated Statements of Income (unaudited) for the three months ended March 31, 2017 and 2016	3
	Consolidated Statements of Comprehensive Income (unaudited) for the three months ended March 31, 2017 and 2016	4
	Consolidated Statements of Changes in Stockholders’ Equity (unaudited) for the three months ended March 31, 2017 and 2016	5
	Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, 2017 and 2016	6
	Notes to Consolidated Financial Statements (unaudited)	7
	Report of Independent Registered Public Accounting Firm	43
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	44
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	62
Item 4.	Controls and Procedures	64
	PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	64
Item 1A.	Risk Factors	64
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	65
Item 6.	Exhibits	66
	Signatures	67

Glossary of Acronyms and Defined Terms

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
ROE	–	Return on average common equity
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)

	March 31, 2017			December 31, 2016
	(Unaudited)			(Audited)
ASSETS
Cash and cash equivalents:
Cash and due from banks	$	120,216		$	120,758
Interest-bearing deposits in other banks	62,656			58,030
Federal funds sold	947			449
Total cash and cash equivalents	183,819			179,237
Securities available for sale, at fair value	953,058			946,764
Securities held to maturity, at carrying value	203,478			201,526
Restricted stock, at cost	65,402			60,782
Loans held for sale, at fair value	19,976			36,487
Loans held for investment, net of deferred fees and costs	6,554,046			6,307,060
Less allowance for loan losses	38,414			37,192
Net loans held for investment	6,515,632			6,269,868
Premises and equipment, net	122,512			122,027
Other real estate owned, net of valuation allowance	9,605			10,084
Goodwill	298,191			298,191
Amortizable intangibles, net	18,965			20,602
Bank owned life insurance	178,774			179,318
Other assets	100,508			101,907
Total assets	$	8,669,920		$	8,426,793
LIABILITIES
Noninterest-bearing demand deposits	$	1,490,799		$	1,393,625
Interest-bearing deposits	5,123,396			4,985,864
Total deposits	6,614,195			6,379,489
Securities sold under agreements to repurchase	44,587			59,281
Other short-term borrowings	522,500			517,500
Long-term borrowings	413,779			413,308
Other liabilities	59,228			56,183
Total liabilities	7,654,289			7,425,761
Commitments and contingencies (Note 6)
STOCKHOLDERS' EQUITY
Common stock, $1.33 par value, shares authorized 100,000,000; issued and outstanding, 43,679,947 shares and 43,609,317 shares, respectively.	57,629			57,506
Additional paid-in capital	606,078			605,397
Retained earnings	352,335			341,938
Accumulated other comprehensive income	(411		)	(3,809		)
Total stockholders' equity	1,015,631			1,001,032
Total liabilities and stockholders' equity	$	8,669,920		$	8,426,793

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 and per share data)

	Three Months Ended
	March 31, 2017		March 31, 2016
Interest and dividend income:
Interest and fees on loans	$	68,084	$	62,947
Interest on deposits in other banks	71		47
Interest and dividends on securities:
Taxable	4,923		4,316
Nontaxable	3,562		3,439
Total interest and dividend income	76,640		70,749
Interest expense:
Interest on deposits	5,077		4,195
Interest on short-term borrowings	950		623
Interest on long-term borrowings	4,046		2,200
Total interest expense	10,073		7,018
Net interest income	66,567		63,731
Provision for credit losses	2,122		2,604
Net interest income after provision for credit losses	64,445		61,127
Noninterest income:
Service charges on deposit accounts	4,829		4,734
Other service charges and fees	4,408		4,156
Fiduciary and asset management fees	2,794		2,138
Mortgage banking income, net	2,025		2,146
Gains on securities transactions, net	481		143
Bank owned life insurance income	2,125		1,372
Loan-related interest rate swap fees	1,180		662
Other operating income	997		563
Total noninterest income	18,839		15,914
Noninterest expenses:
Salaries and benefits	32,168		28,048
Occupancy expenses	4,903		4,976
Furniture and equipment expenses	2,603		2,636
Printing, postage, and supplies	1,150		1,139
Communications expense	910		1,089
Technology and data processing	3,900		3,814
Professional services	1,658		1,989
Marketing and advertising expense	1,740		1,938
FDIC assessment premiums and other insurance	706		1,362
Other taxes	2,022		1,618
Loan-related expenses	1,329		878
OREO and credit-related expenses	541		569
Amortization of intangible assets	1,637		1,880
Training and other personnel costs	969		744
Other expenses	1,159		1,592
Total noninterest expenses	57,395		54,272
Income before income taxes	25,889		22,769
Income tax expense	6,765		5,808
Net income	$	19,124	$	16,961
Basic earnings per common share	$	0.44	$	0.38
Diluted earnings per common share	$	0.44	$	0.38
Dividends declared per common share	$	0.20	$	0.19
Basic weighted average number of common shares outstanding	43,654,498		44,251,276
Diluted weighted average number of common shares outstanding	43,725,923		44,327,229

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 March 31,
	2017			2016
Net income	$	19,124		$	16,961
Other comprehensive income (loss):
Cash flow hedges:
Change in fair value of cash flow hedges	(31		)	(2,681		)
Reclassification adjustment for losses (gains) included in net income (net of tax, $97 and $76 for the three months ended March 31, 2017 and 2016, respectively)	180			141
AFS securities:
Unrealized holding gains (losses) arising during period (net of tax, $1,958 and $1,633 for the three months ended March 31, 2017 and 2016, respectively)	3,637			3,032
Reclassification adjustment for losses (gains) included in net income (net of tax, $168 and $50 for the three months ended March 31, 2017 and 2016, respectively)	(313		)	(93		)
HTM securities:
Reclassification adjustment for accretion of unrealized gain on AFS securities transferred to HTM (net of tax, $99 and $157 for the three months ended March 31, 2017 and 2016, respectively)	(184		)	(292		)
Bank owned life insurance:
Reclassification adjustment for losses included in net income	109			—
Other comprehensive income (loss)	3,398			107
Comprehensive income	$	22,522		$	17,068

See accompanying notes to consolidated financial statements.

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UNION BANKSHARES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED)

THREE MONTHS ENDED MARCH 31, 2017 AND 2016

(Dollars in thousands, except share and per share amounts)

	Common Stock			Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total
Balance - December 31, 2015	$	59,159		$	631,822		$	298,134		$	6,252		$	995,367
Net income - 2016							16,961						16,961
Other comprehensive income (net of taxes of $1,502)										107			107
Dividends on common stock ($0.19 per share)							(8,410		)				(8,410		)
Stock purchased under stock repurchase plan (1,040,612 shares)	(1,384		)	(22,344		)							(23,728		)
Issuance of common stock under Equity Compensation Plans (21,804 shares)	29			288									317
Issuance of common stock for services rendered (4,400 shares)	6			94									100
Vesting of restricted stock, net of shares held for taxes, under Equity Compensation Plans (30,299 shares)	40			(417		)							(377		)
Stock-based compensation expense				641									641
Balance - March 31, 2016	$	57,850		$	610,084		$	306,685		$	6,359		$	980,978
Balance - December 31, 2016	$	57,506		$	605,397		$	341,938		$	(3,809	)	$	1,001,032
Net income - 2017							19,124						19,124
Other comprehensive income (net of taxes of $1,788)										3,398			3,398
Dividends on common stock ($0.20 per share)							(8,727		)				(8,727		)
Issuance of common stock under Equity Compensation Plans (29,008 shares)	39			489									528
Issuance of common stock for services rendered (4,856 shares)	6			170									176
Vesting of restricted stock, net of shares held for taxes, under Equity Compensation Plans (58,679 shares)	78			(1,126		)							(1,048		)
Stock-based compensation expense				1,148									1,148
Balance - March 31, 2017	$	57,629		$	606,078		$	352,335		$	(411	)	$	1,015,631

See accompanying notes to consolidated financial statements.

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UNION BANKSHARES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

THREE MONTHS ENDED MARCH 31, 2017 AND 2016

(Dollars in thousands)

	2017			2016
Operating activities:
Net income	$	19,124		$	16,961
Adjustments to reconcile net income to net cash and cash equivalents provided by (used in) operating activities:
Depreciation of premises and equipment	2,645			2,511
Writedown of OREO	238			126
Amortization, net	3,396			3,421
Amortization related to acquisition, net	144			734
Provision for credit losses	2,122			2,604
Gains on securities transactions, net	(481		)	(143		)
Bank owned life insurance income	(2,125		)	(1,372		)
Decrease (increase) in loans held for sale, net	16,511			10,921
Gains on sales of other real estate owned, net	(36		)	(7		)
Losses on sales of premises, net	26			45
Stock-based compensation expenses	1,148			641
Issuance of common stock for services	176			100
Net decrease (increase) in other assets	2,241			(14,594		)
Net increase in other liabilities	5,347			994
Net cash and cash equivalents provided by (used in) operating activities	50,476			22,942
Investing activities:
Purchases of securities available for sale and restricted stock	(53,782		)	(83,735		)
Purchases of securities held to maturity	(4,878		)	—
Proceeds from sales of securities available for sale and restricted stock	21,306			14,532
Proceeds from maturities, calls and paydowns of securities available for sale	26,167			29,151
Proceeds from maturities, calls and paydowns of securities held to maturity	1,001			—
Net increase in loans held for investment	(246,258		)	(110,513		)
Net increase in premises and equipment	(3,156		)	(1,885		)
Proceeds from sales of other real estate owned	206			1,339
Net cash and cash equivalents provided by (used in) investing activities	(259,394		)	(151,111		)
Financing activities:
Net increase (decrease) in noninterest-bearing deposits	97,174			(9,694		)
Net increase (decrease) in interest-bearing deposits	137,532			(8,260		)
Net increase (decrease) in short-term borrowings	(9,694		)	169,000
Cash paid for contingent consideration	(2,265		)	—
Cash dividends paid - common stock	(8,727		)	(8,410		)
Repurchase of common stock	—			(23,728		)
Issuance of common stock	528			317
Vesting of restricted stock, net of shares held for taxes	(1,048		)	(377		)
Net cash and cash equivalents provided by (used in) financing activities	213,500			118,848
Increase (decrease) in cash and cash equivalents	4,582			(9,321		)
Cash and cash equivalents at beginning of the period	179,237			142,660
Cash and cash equivalents at end of the period	$	183,819		$	133,339
Supplemental Disclosure of Cash Flow Information
Cash payments for:
Interest	$	8,141		$	6,998
Income taxes	—			10,500
Supplemental schedule of noncash investing and financing activities
Transfers between loans and other real estate owned	$	(71	)	$	405

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 2016 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. In the third quarter of 2016, the Company finalized the valuation of certain amortizable intangible assets which increased the fair value and also impacted 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.

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

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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. Residential 1-4 Family 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 & 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, using 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 months ended March 31, 2017 and March 31, 2016, the Company recognized amortization $223,000 and $130,000, respectively, and tax credits of $309,000 and $210,000, respectively, associated with these investments within “Income tax expense” on the Company’s Consolidated Statements of Income. The carrying value of the Company’s investments in these qualified affordable housing projects was $9.7 million and $9.9 million as of March 31, 2017 and December 31, 2016, respectively. At March 31, 2017 and December 31, 2016, the Company's recorded liability totaled $7.1 million for the related unfunded commitments, respectively, which are expected to be paid from 2017 to 2019.

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Adoption of New Accounting Standards

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. The Company adopted this standard in the first quarter of 2017. The adoption of ASU 2016-09 did not have a material impact on the Company’s consolidated financial statements.

Recent Accounting Pronouncements

In January 2017, the FASB issued ASU No. 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business.” This ASU clarifies the definition of a business that appears in ASC 805, Business Combinations. Amendments narrow the definition and provide a framework for making judgments whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendment to the Business Combinations Topic is intended to address concerns that the existing definition of a business has been applied too broadly and has resulted in many transactions being recorded as business acquisitions that in substance are more akin to asset acquisitions. ASU 2017-01 is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. The Company has concluded the adoption of ASU 2017-01 will not have a material impact on its consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-03, “Accounting Changes and Error Corrections (Topic 250) and Investments—Equity Method and Joint Ventures (Topic 323): Amendments to SEC Paragraphs Pursuant to Staff Announcements at the September 22, 2016 and November 17, 2016 EITF Meetings  (SEC Update).” This ASU incorporates into the Accounting Standards Codification recent SEC guidance about disclosing, under SEC SAB Topic 11.M, the effect on financial statements of adopting the revenue, leases, and credit losses standards. ASU 2017-03 is effective upon issuance. The Company has concluded the adoption of ASU 2017-03 will not have a material impact on its consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-04, “Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” This ASU simplifies accounting for goodwill impairments by eliminating step two (the implied fair value to carrying value of goodwill) from the existing goodwill impairment test. A goodwill impairment will now be the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of the goodwill. The effective date and transition requirements for the technical corrections will be effective for the Company for reporting periods beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company has concluded the adoption of ASU 2017-04 will not have a material impact on its consolidated financial statements.

In February 2017, the FASB issued ASU No. 2017-05, “Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets.” This ASU conforms the derecognition guidance on nonfinancial assets with the model for transactions in the new revenue standard. The amendments will be effective for the Company for reporting periods beginning after December 15, 2018. The Company is currently assessing the impact ASU 2017-05 will have on its consolidated financial statements.

In March 2017, the FASB issued ASU No. 2017-08, “Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities.” This ASU focuses on the amortization period for certain purchased callable debt securities held at a premium. The amendments shorten the amortization period for the premium to the earliest call date. The amendments will be effective for the Company for interim and annual periods beginning after December 15, 2018. The Company has concluded the adoption of ASU 2017-08 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 March 31, 2017 and December 31, 2016 are summarized as follows (dollars in thousands):

	Amortized		Gross Unrealized					Estimated
	Cost		Gains		(Losses)			Fair Value
March 31, 2017
Obligations of states and political subdivisions	$	274,003	$	5,910	$	(2,064	)	$	277,849
Corporate bonds	112,432		775		(1,161		)	112,046
Mortgage-backed securities	548,457		4,690		(3,792		)	549,355
Other securities	13,885		—		(77		)	13,808
Total available for sale securities	$	948,777	$	11,375	$	(7,094	)	$	953,058
December 31, 2016
Obligations of states and political subdivisions	$	274,007	$	4,962	$	(3,079	)	$	275,890
Corporate bonds	123,674		892		(2,786		)	121,780
Mortgage-backed securities	536,031		4,626		(5,371		)	535,286
Other securities	13,885		—		(77		)	13,808
Total available for sale securities	$	947,597	$	10,480	$	(11,313	)	$	946,764

The following table shows the gross unrealized losses and fair value (in thousands) of the Company’s available for sale securities with unrealized losses that are not deemed to be other-than-temporarily impaired as of March 31, 2017 and December 31, 2016. 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
March 31, 2017
Obligations of states and political subdivisions	$	63,155	$	(2,001	)	$	596	$	(63	)	$	63,751	$	(2,064	)
Mortgage-backed securities	277,308		(3,414		)	38,209		(378		)	315,517		(3,792		)
Corporate bonds and other securities	28,341		(581		)	40,237		(657		)	68,578		(1,238		)
Total available for sale securities	$	368,804	$	(5,996	)	$	79,042	$	(1,098	)	$	447,846	$	(7,094	)
December 31, 2016
Obligations of states and political subdivisions	$	108,440	$	(3,007	)	$	588	$	(72	)	$	109,028	$	(3,079	)
Mortgage-backed securities	316,469		(4,979		)	42,096		(392		)	358,565		(5,371		)
Corporate bonds and other securities	47,388		(1,537		)	40,468		(1,326		)	87,856		(2,863		)
Total available for sale securities	$	472,297	$	(9,523	)	$	83,152	$	(1,790	)	$	555,449	$	(11,313	)

As of March 31, 2017, there were $79.0 million, or 30 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 $1.1 million and consisted of municipal obligations, mortgage-backed securities, and corporate bonds. As of December 31, 2016, there were $83.2 million, or 30 issues, of individual securities that had been in a continuous loss position for more than 12 months. These securities had an unrealized loss of $1.8 million and consisted of municipal obligations, mortgage-backed securities, and corporate bonds. The Company has determined that these securities are temporarily impaired as of March 31, 2017 and December 31, 2016 for the reasons set out below:

-10-

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 credit crisis 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 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 available for sale securities as of March 31, 2017 and December 31, 2016, 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.

	March 31, 2017				December 31, 2016
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due in one year or less	$	24,906	$	24,989	$	21,403	$	21,517
Due after one year through five years	113,890		115,757		108,198		109,778
Due after five years through ten years	284,017		286,918		300,552		301,888
Due after ten years	525,964		525,394		517,444		513,581
Total securities available for sale	$	948,777	$	953,058	$	947,597	$	946,764

For information regarding 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 March 31, 2017 and December 31, 2016, see Note 6 "Commitments and Contingencies".

Held to Maturity

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 or losses are accreted over the remaining life of the security with no impact on future net income.

-11-

The carrying value, gross unrealized gains and losses, and estimated fair values of securities held to maturity as of March 31, 2017 and December 31, 2016 are summarized as follows (dollars in thousands):

	Carrying		Gross Unrealized					Estimated
	Value (1)		Gains		(Losses)			Fair Value
March 31, 2017
Obligations of states and political subdivisions	$	203,478	$	2,409	$	(276	)	$	205,611
December 31, 2016
Obligations of states and political subdivisions	$	201,526	$	1,617	$	(828	)	$	202,315

(1) The carrying value includes $4.8 million as of March 31, 2017 and $5.2 million as of December 31, 2016 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 March 31, 2017 and December 31, 2016. 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
March 31, 2017
Obligations of states and political subdivisions	$	34,558	$	(244	)	$	648	$	(32	)	$	35,206	$	(276	)
December 31, 2016
Obligations of states and political subdivisions	$	92,841	$	(747	)	$	648	$	(81	)	$	93,489	$	(828	)

As of March 31, 2017, there was $648,000, 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 $32,000, respectively. As of December 31, 2016, there was $648,000, 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. The Company has determined that these securities in a loss position are temporarily impaired as of March 31, 2017 and December 31, 2016 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 credit crisis 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.

-12-

The following table presents the amortized cost and estimated fair value of held to maturity securities as of March 31, 2017 and December 31, 2016, 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.

	March 31, 2017				December 31, 2016
	Carrying Value (1)		Estimated Fair Value		Carrying Value (1)		Estimated Fair Value
Due in one year or less	$	4,108	$	4,140	$	4,403	$	4,440
Due after one year through five years	30,050		30,503		28,383		28,763
Due after five years through ten years	62,127		62,485		51,730		51,522
Due after ten years	107,193		108,483		117,010		117,590
Total securities held to maturity	$	203,478	$	205,611	$	201,526	$	202,315

(1)The carrying value includes $4.8 million as of March 31, 2017 and $5.2 million as of December 31, 2016 of net unrealized gains present at the time of transfer from available for sale securities, net of any accretion.

For information regarding the estimated fair value of held to maturity securities which were pledged to secure public deposits as permitted or required by law as of March 31, 2017 and December 31, 2016, see Note 6 "Commitments and Contingencies".

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 March 31, 2017 and December 31, 2016, 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 March 31, 2017 and December 31, 2016. Restricted equity securities consist of Federal Reserve Bank stock in the amount of $27.6 million and $23.8 million for March 31, 2017 and December 31, 2016 and FHLB stock in the amount of $37.8 million and $37.0 million as of March 31, 2017 and December 31, 2016, 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 months ended March 31, 2017, 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.

-13-

Realized Gains and Losses

The following table presents the gross realized gains and losses on and the proceeds from the sale of securities during the three months ended March 31, 2017 and 2016 (dollars in thousands).

	Three Months Ended March 31, 2017		Three Months Ended March 31, 2016
Realized gains (losses):
Gross realized gains	$	481	$	239
Gross realized losses	—		(96		)
Net realized gains	$	481	$	143
Proceeds from sales of securities	$	21,306	$	14,532

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 March 31, 2017 and December 31, 2016 (dollars in thousands):

	March 31, 2017		December 31, 2016
Construction and Land Development	$	770,287	$	751,131
Commercial Real Estate - Owner Occupied	870,559		857,805
Commercial Real Estate - Non-Owner Occupied	1,631,767		1,564,295
Multifamily Real Estate	353,769		334,276
Commercial & Industrial	576,567		551,526
Residential 1-4 Family	1,057,439		1,029,547
Auto	271,466		262,071
HELOC	527,863		526,884
Consumer and all other	494,329		429,525
Total loans held for investment, net(1)	$	6,554,046	$	6,307,060

(1)Loans, as presented, are net of deferred fees and costs totaling $768,000 and $1.8 million as of March 31, 2017 and December 31, 2016, respectively.

-14-

The following table shows the aging of the Company’s loan portfolio, by segment, at March 31, 2017 (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	$	630	$	376	$	16	$	2,776	$	6,545	$	759,944	$	770,287
Commercial Real Estate - Owner Occupied	878		—		93		18,199		1,298		850,091		870,559
Commercial Real Estate - Non-Owner Occupied	1,487		—		711		16,725		2,798		1,610,046		1,631,767
Multifamily Real Estate	—		—		—		2,058		—		351,711		353,769
Commercial & Industrial	453		126		—		733		3,245		572,010		576,567
Residential 1-4 Family	11,615		2,104		686		15,910		5,856		1,021,268		1,057,439
Auto	1,534		250		11		—		393		269,278		271,466
HELOC	1,490		365		680		1,156		1,902		522,270		527,863
Consumer and all other	1,766		1,460		126		213		301		490,463		494,329
Total loans held for investment	$	19,853	$	4,681	$	2,323	$	57,770	$	22,338	$	6,447,081	$	6,554,046

The following table shows the aging of the Company’s loan portfolio, by segment, at December 31, 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	$	1,162	$	232	$	76	$	2,922	$	2,037	$	744,702	$	751,131
Commercial Real Estate - Owner Occupied	1,842		109		35		18,343		794		836,682		857,805
Commercial Real Estate - Non-Owner Occupied	2,369		—		—		17,303		—		1,544,623		1,564,295
Multifamily Real Estate	147		—		—		2,066		—		332,063		334,276
Commercial & Industrial	759		858		9		1,074		124		548,702		551,526
Residential 1-4 Family	7,038		534		2,048		16,200		5,279		998,448		1,029,547
Auto	2,570		317		111		—		169		258,904		262,071
HELOC	1,836		1,140		635		1,161		1,279		520,833		526,884
Consumer and all other	2,522		1,431		91		223		291		424,967		429,525
Total loans held for investment	$	20,245	$	4,621	$	3,005	$	59,292	$	9,973	$	6,209,924	$	6,307,060

-15-

The following table shows the PCI loan portfolios, by segment and their delinquency status, at March 31, 2017 (dollars in thousands):

	30-89 Days Past Due		Greater than 90 Days		Current		Total
Construction and Land Development	$	72	$	—	$	2,704	$	2,776
Commercial Real Estate - Owner Occupied	902		317		16,980		18,199
Commercial Real Estate - Non-Owner Occupied	303		1,025		15,397		16,725
Multifamily Real Estate	—		—		2,058		2,058
Commercial & Industrial	—		12		721		733
Residential 1-4 Family	1,491		1,057		13,362		15,910
HELOC	120		114		922		1,156
Consumer and all other	—		—		213		213
Total	$	2,888	$	2,525	$	52,357	$	57,770

The following table shows the PCI loan portfolios, by segment and their delinquency status, at December 31, 2016 (dollars in thousands):

	30-89 Days Past Due		Greater than 90 Days		Current		Total
Construction and Land Development	$	—	$	84	$	2,838	$	2,922
Commercial Real Estate - Owner Occupied	271		519		17,553		18,343
Commercial Real Estate - Non-Owner Occupied	409		126		16,768		17,303
Multifamily Real Estate	—		—		2,066		2,066
Commercial & Industrial	44		56		974		1,074
Residential 1-4 Family	1,298		945		13,957		16,200
HELOC	175		121		865		1,161
Consumer and all other	—		—		223		223
Total	$	2,197	$	1,851	$	55,244	$	59,292

-16-

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 March 31, 2017 and December 31, 2016 (dollars in thousands):

	March 31, 2017						December 31, 2016
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
Loans without a specific allowance
Construction and Land Development	$	11,290	$	11,775	$	—	$	13,877	$	14,353	$	—
Commercial Real Estate - Owner Occupied	6,120		6,285		—		5,886		6,042		—
Commercial Real Estate - Non-Owner Occupied	2,825		2,825		—		1,399		1,399		—
Commercial & Industrial	949		949		—		648		890		—
Residential 1-4 Family	9,541		10,515		—		8,496		9,518		—
HELOC	1,443		1,535		—		1,017		1,094		—
Consumer and all other	113		223		—		230		427		—
Total impaired loans without a specific allowance	$	32,281	$	34,107	$	—	$	31,553	$	33,723	$	—
Loans with a specific allowance
Construction and Land Development	$	6,011	$	6,018	$	729	$	1,395	$	1,404	$	107
Commercial Real Estate - Owner Occupied	639		639		3		646		646		4
Commercial Real Estate - Non-Owner Occupied	8,691		8,739		745		2,809		2,809		474
Commercial & Industrial	5,151		5,442		617		857		880		14
Residential 1-4 Family	3,243		3,414		393		3,335		3,535		200
Auto	393		506		1		169		235		1
HELOC	757		881		20		323		433		15
Consumer and all other	189		516		7		62		298		1
Total impaired loans with a specific allowance	$	25,074	$	26,155	$	2,515	$	9,596	$	10,240	$	816
Total impaired loans	$	57,355	$	60,262	$	2,515	$	41,149	$	43,963	$	816

The following table shows 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 months ended March 31, 2017 and 2016 (dollars in thousands):

	Three Months Ended March 31, 2017				Three Months Ended March 31, 2016
	Average Investment		Interest Income Recognized		Average Investment		Interest Income Recognized
Construction and Land Development	$	17,179	$	139	$	30,569	$	484
Commercial Real Estate - Owner Occupied	6,793		64		16,510		157
Commercial Real Estate - Non-Owner Occupied	11,540		108		4,214		41
Multifamily Real Estate	—		—		3,817		60
Commercial & Industrial	6,830		36		3,663		37
Residential 1-4 Family	13,047		73		15,301		106
Auto	477		1		218		—
HELOC	2,366		4		2,933		21
Consumer and all other	303		—		982		6
Total impaired loans	$	58,535	$	425	$	78,207	$	912

-17-

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 months ended March 31, 2017, 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 TDRs that continue to accrue interest under the terms of the restructuring agreement, which are considered to be performing, and TDRs that have been placed on nonaccrual status, which are considered to be nonperforming, as of March 31, 2017 and December 31, 2016 (dollars in thousands):

	March 31, 2017					December 31, 2016
	No. of Loans	Recorded Investment		Outstanding Commitment		No. of Loans	Recorded Investment		Outstanding Commitment
Performing
Construction and Land Development	6	$	3,422	$	—	8	$	3,793	$	—
Commercial Real Estate - Owner Occupied	6	2,605		—		7	3,106		—
Commercial Real Estate - Non-Owner Occupied	2	1,637		—		2	2,390		—
Commercial & Industrial	10	1,993		—		3	533		—
Residential 1-4 Family	31	4,668		—		28	4,145		—
Total performing	55	$	14,325	$	—	48	$	13,967	$	—
Nonperforming
Construction and Land Development	4	$	540	$	—	2	$	215	$	—
Commercial Real Estate - Owner Occupied	3	624		—		2	156		—
Commercial Real Estate - Non-Owner Occupied	2	2,390		—		—	—		—
Commercial & Industrial	1	104		—		1	116		—
Residential 1-4 Family	10	741		—		8	948		—
Total nonperforming	20	$	4,399	$	—	13	$	1,435	$	—
Total performing and nonperforming	75	$	18,724	$	—	61	$	15,402	$	—

The Company considers a default of a TDR 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 months ended March 31, 2017 and 2016, the Company did not identify any TDRs that went into default that had been restructured in the twelve-month period prior to default.

-18-

The following table shows, by segment and modification type, TDRs that occurred during the three months ended March 31, 2017 and 2016 (dollars in thousands):

	Three Months Ended March 31, 2017			Three Months Ended March 31, 2016
	No. of Loans	Recorded  Investment at Period End		No. of Loans	Recorded  Investment at Period End
Modified to interest only, at a market rate
Commercial & Industrial	5	$	661	—	$	—
Total interest only at market rate of interest	5	$	661	—	$	—
Term modification, at a market rate
Commercial Real Estate - Owner Occupied	—	$	—	1	$	709
Commercial Real Estate - Non-Owner Occupied	2	1,637		—	—
Commercial & Industrial	2	836		—	—
Residential 1-4 Family	3	380		1	378
Total loan term extended at a market rate	7	$	2,853	2	$	1,087
Term modification, below market rate
Commercial & Industrial	2	$	128	—	$	—
Residential 1-4 Family	4	865		—	—
Total loan term extended at a below market rate	6	$	993	—	$	—
Total	18	$	4,507	2	$	1,087

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 three months ended and as of March 31, 2017. The table below includes the provision for loan losses. In addition, a $112,000 provision was recognized during the three months ended March 31, 2017 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	$	10,055	$	37	$	(45	)	$	(496	)	$	9,551
Commercial Real Estate - Owner Occupied	3,801		20		—			(600		)	3,221
Commercial Real Estate - Non-Owner Occupied	6,622		—		—			640			7,262
Multifamily Real Estate	1,236		—		—			198			1,434
Commercial & Industrial	4,627		139		(241		)	754			5,279
Residential 1-4 Family	6,399		128		(135		)	227			6,619
Auto	946		108		(248		)	139			945
HELOC	1,328		88		(194		)	47			1,269
Consumer and all other	2,178		325		(770		)	1,101			2,834
Total	$	37,192	$	845	$	(1,633	)	$	2,010		$	38,414

-19-

	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	$	17,301	$	729	$	750,210	$	8,822	$	2,776	$	—	$	770,287	$	9,551
Commercial Real Estate - Owner Occupied	6,759		3		845,601		3,218		18,199		—		870,559		3,221
Commercial Real Estate - Non-Owner Occupied	11,516		745		1,603,526		6,517		16,725		—		1,631,767		7,262
Multifamily Real Estate	—		—		351,711		1,434		2,058		—		353,769		1,434
Commercial & Industrial	6,100		617		569,734		4,662		733		—		576,567		5,279
Residential 1-4 Family	12,784		393		1,028,745		6,226		15,910		—		1,057,439		6,619
Auto	393		1		271,073		944		—		—		271,466		945
HELOC	2,200		20		524,507		1,249		1,156		—		527,863		1,269
Consumer and all other	302		7		493,814		2,827		213		—		494,329		2,834
Total loans held for investment, net	$	57,355	$	2,515	$	6,438,921	$	35,899	$	57,770	$	—	$	6,554,046	$	38,414

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 three months ended and as of March 31, 2016. In addition, a $100,000 provision was recognized during the three months ended March 31, 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	$	19	$	(93	)	$	5,055		$	11,021
Commercial Real Estate - Owner Occupied	4,614		46		(772		)	(477		)	3,411
Commercial Real Estate - Non-Owner Occupied	6,929		—		—			(2,445		)	4,484
Multifamily Real Estate	1,606		—		—			(204		)	1,402
Commercial & Industrial	3,163		238		(617		)	1,441			4,225
Residential 1-4 Family	5,414		243		(153		)	471			5,975
Auto	1,703		84		(365		)	(615		)	807
HELOC	2,934		83		(409		)	(1,325		)	1,283
Consumer and all other	1,644		115		(571		)	603			1,791
Total	$	34,047	$	828	$	(2,980	)	$	2,504		$	34,399

	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	$	30,779	$	500	$	740,782	$	10,521	$	5,137	$	—	$	776,698	$	11,021
Commercial Real Estate - Owner Occupied	16,026		81		805,916		3,330		27,260		—		849,202		3,411
Commercial Real Estate - Non-Owner Occupied	4,203		1		1,278,412		4,483		13,636		—		1,296,251		4,484
Multifamily Real Estate	3,803		—		317,335		1,402		2,132		—		323,270		1,402
Commercial & Industrial	3,301		467		448,336		3,758		1,571		—		453,208		4,225
Residential 1-4 Family	14,558		414		945,615		5,561		18,305		—		978,478		5,975
Auto	162		1		241,575		806		—		—		241,737		807
HELOC	2,833		28		512,754		1,255		1,535		—		517,122		1,283
Consumer and all other	769		1		343,238		1,790		529		—		344,536		1,791
Total loans held for investment, net	$	76,434	$	1,493	$	5,633,963	$	32,906	$	70,105	$	—	$	5,780,502	$	34,399

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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 March 31, 2017 (dollars in thousands):

	Pass		Special Mention		Substandard		Doubtful		Total
Construction and Land Development	$	684,967	$	68,650	$	13,803	$	91	$	767,511
Commercial Real Estate - Owner Occupied	816,462		30,379		5,519		—		852,360
Commercial Real Estate - Non-Owner Occupied	1,571,645		32,064		11,333		—		1,615,042
Multifamily Real Estate	330,970		20,741		—		—		351,711
Commercial & Industrial	560,889		10,158		4,787		—		575,834
Residential 1-4 Family	1,012,281		22,382		4,323		2,543		1,041,529
Auto	269,081		2,016		217		152		271,466
HELOC	521,624		2,996		1,257		830		526,707
Consumer and all other	491,625		2,209		16		266		494,116
Total	$	6,259,544	$	191,595	$	41,255	$	3,882	$	6,496,276

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The following table shows the recorded investment in all loans, excluding PCI loans, by segment with their related risk level as of December 31, 2016 (dollars in thousands):

	Pass		Special Mention		Substandard		Doubtful		Total
Construction and Land Development	$	667,018	$	69,311	$	11,857	$	23	$	748,209
Commercial Real Estate - Owner Occupied	801,565		32,364		5,533		—		839,462
Commercial Real Estate - Non-Owner Occupied	1,505,153		37,631		4,208		—		1,546,992
Multifamily Real Estate	312,711		19,499		—		—		332,210
Commercial & Industrial	539,999		9,391		1,062		—		550,452
Residential 1-4 Family	986,973		18,518		4,813		3,043		1,013,347
Auto	258,188		3,648		135		100		262,071
HELOC	519,928		4,225		969		601		525,723
Consumer and all other	425,520		3,491		40		251		429,302
Total	$	6,017,055	$	198,078	$	28,617	$	4,018	$	6,247,768

The following table shows the recorded investment in only PCI loans by segment with their related risk level as of March 31, 2017 (dollars in thousands):

	Pass		Special Mention		Substandard		Doubtful		Total
Construction and Land Development	$	1,096	$	1,394	$	286	$	—	$	2,776
Commercial Real Estate - Owner Occupied	5,417		8,902		3,880		—		18,199
Commercial Real Estate - Non-Owner Occupied	11,014		4,323		1,388		—		16,725
Multifamily Real Estate	342		1,716		—		—		2,058
Commercial & Industrial	98		360		275		—		733
Residential 1-4 Family	8,079		4,740		2,301		790		15,910
HELOC	915		128		—		113		1,156
Consumer and all other	161		52		—		—		213
Total	$	27,122	$	21,615	$	8,130	$	903	$	57,770

The following table shows the recorded investment in only PCI loans by segment with their related risk level as of December 31, 2016 (dollars in thousands):

	Pass		Special Mention		Substandard		Doubtful		Total
Construction and Land Development	$	1,092	$	1,432	$	398	$	—	$	2,922
Commercial Real Estate - Owner Occupied	5,520		8,889		3,934		—		18,343
Commercial Real Estate - Non-Owner Occupied	10,927		4,638		1,738		—		17,303
Multifamily Real Estate	343		1,723		—		—		2,066
Commercial & Industrial	107		480		487		—		1,074
Residential 1-4 Family	8,557		4,455		2,672		516		16,200
HELOC	857		183		7		114		1,161
Consumer and all other	166		37		20		—		223
Total	$	27,569	$	21,837	$	9,256	$	630	$	59,292

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 Three Months Ended March 31,
	2017			2016
Balance at beginning of period	$	19,739		$	22,139
Accretion	(1,511		)	(1,390		)
Reclass of nonaccretable difference due to improvement in expected cash flows	1,680			1,266
Other, net (1)	(908		)	(1,510		)
Balance at end of period	$	19,000		$	20,505

(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 $57.8 million at March 31, 2017 and $59.3 million at December 31, 2016. The outstanding balance of the Company’s PCI loan portfolio totaled $71.5 million at March 31, 2017 and $73.6 million at December 31, 2016. The carrying value of the Company’s acquired performing loan portfolio, accounted for under ASC 310-20, Receivables – Nonrefundable Fees and Other Costs, totaled $1.0 billion at March 31, 2017 and $1.1 billion at December 31, 2016; the remaining discount on these loans totaled $16.1 million at March 31, 2017 and $16.9 million at December 31, 2016.

4.INTANGIBLE ASSETS

The Company’s intangible assets consist of core deposits, goodwill, and other intangibles arising from 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. Other amortizable intangible assets are being amortized over the period of expected benefit, which ranges from 5 to 10 years, using a straight-line method.

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.

Information concerning intangible assets with a finite life is presented in the following table (dollars in thousands):

	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
March 31, 2017
Amortizable core deposit intangibles	$	62,853	$	47,990	$	14,863
Other amortizable intangibles	4,502		400		4,102
December 31, 2016
Amortizable core deposit intangibles	$	68,367	$	51,987	$	16,380
Other amortizable intangibles	4,502		280		4,222
March 31, 2016
Amortizable core deposit intangibles	$	76,185	$	54,755	$	21,430

Amortization expense of core deposit intangibles for the three months ended March 31, 2017 and 2016 totaled $1.5 million and $1.9 million, respectively. Amortization expense of other intangibles for both the three months ended March 31, 2017 and 2016

-23-

totaled $120,000 and $0, respectively. As of March 31, 2017, the estimated remaining amortization expense of intangibles is as follows (dollars in thousands):

For the remaining nine months of 2017	$	4,433
For the year ending December 31, 2018	4,625
For the year ending December 31, 2019	3,573
For the year ending December 31, 2020	2,509
For the year ending December 31, 2021	1,481
Thereafter	2,344
Total estimated amortization expense	$	18,965

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 March 31, 2017 and December 31, 2016 (dollars in thousands):

	March 31, 2017			December 31, 2016
Securities sold under agreements to repurchase	$	44,587		$	59,281
Other short-term borrowings	522,500			517,500
Total short-term borrowings	$	567,087		$	576,781
Maximum month-end outstanding balance	$	634,750		$	678,262
Average outstanding balance during the period	573,116			590,074
Average interest rate (year-to-date)	0.67		%	0.49		%
Average interest rate at end of period	0.71		%	0.60		%
Other short-term borrowings:
FHLB	522,500			517,500
Other lines of credit	—			—

The Bank maintains federal funds lines with several correspondent banks; the remaining available balance was $175.0 million at both March 31, 2017 and December 31, 2016. The Company maintains an alternate line of credit at a correspondent bank, the available balance was $25.0 million at both March 31, 2017 and December 31, 2016. 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 $2.5 billion and $2.4 billion at March 31, 2017 and December 31, 2016, respectively.

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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 $6.7 million at March 31, 2017. 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	%	3.90	%	6/17/2034
Trust Preferred Capital Note - Statutory Trust II	36,000,000		1,114,000		1.40	%	2.55	%	6/15/2036
VFG Limited Liability Trust I Indenture	20,000,000		619,000		2.73	%	3.88	%	3/18/2034
FNB Statutory Trust II Indenture	12,000,000		372,000		3.10	%	4.25	%	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.

During the fourth quarter of 2016, the Company issued $150.0 million of fixed-to-floating rate subordinated notes with an initial fixed interest rate of 5.00% through December 15, 2021. The interest rate then changes to a floating rate of LIBOR plus 3.175% through its maturity date in December 15, 2026. At March 31, 2017 and December 31, 2016 the carrying value of the subordinated debt was $150.0 million, with a remaining discount of $2.0 million, respectively.

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 on 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 on the Company’s Consolidated Statements of Income. Amortization expense for the three months ended March 31, 2017 and 2016 was $470,000 and $463,000, respectively.

In connection with the StellarOne acquisition, the Company assumed $70.0 million in long-term borrowings with the FHLB of which there is $20.0 million remaining at March 31, 2017 that had a remaining fair value premium of $448,000.

As of March 31, 2017, 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	%	1.59	%	8/23/2022	$	55,000
Adjustable Rate Credit	0.45	%	1.60	%	11/23/2022	65,000
Adjustable Rate Credit	0.45	%	1.60	%	11/23/2022	10,000
Adjustable Rate Credit	0.45	%	1.60	%	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	—		0.99	%	10/19/2018	30,000
						$	190,000
(1)Interest rates calculated using non-rounded numbers.

-25-

As of December 31, 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	%	1.44	%	8/23/2022	$	55,000
Adjustable Rate Credit	0.45	%	1.45	%	11/23/2022	65,000
Adjustable Rate Credit	0.45	%	1.45	%	11/23/2022	10,000
Adjustable Rate Credit	0.45	%	1.45	%	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	—		0.99	%	10/19/2018	30,000
						$	190,000
(1)Interest rates calculated using non-rounded numbers.

For information on the carrying value of loans and securities pledged as collateral on FHLB advances as of March 31, 2017 and December 31, 2016, refer to Note 6 "Commitments and Contingencies".

As of March 31, 2017, the contractual maturities of long-term debt are as follows for the years ending (dollars in thousands):

	Trust Preferred Capital Notes		Subordinated Debt		FHLB Advances		Fair Value  Premium (Discount)			Prepayment Penalty			Total Long-term Borrowings
For the remaining nine months of 2017	$	—	$	—	$	10,000	$	(28	)	$	(1,452	)	$	8,520
2018	—		—		40,000		(343		)	(1,970		)	37,687
2019	—		—		—		(486		)	(2,018		)	(2,504		)
2020	—		—		—		(501		)	(2,074		)	(2,575		)
2021	—		—		—		(516		)	(2,119		)	(2,635		)
Thereafter	93,301		150,000		140,000		(6,308		)	(1,707		)	375,286
Total Long-term borrowings	$	93,301	$	150,000	$	190,000	$	(8,182	)	$	(11,340	)	$	413,779

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 on 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

-26-

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 the 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. As of March 31, 2017 and December 31, 2016, the Company's reserve for off-balance sheet credit risk was $700,000 and $725,000, respectively, and is reported as a component of "Other Liabilities" on the Company's Consolidated Balance Sheets.

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.

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

	March 31, 2017		December 31, 2016
Commitments with off-balance sheet risk:
Commitments to extend credit (1)	$	1,912,830	$	1,924,885
Standby letters of credit	110,525		84,212
Total commitments with off-balance sheet risk	$	2,023,355	$	2,009,097

(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 March 31, 2017 and December 31, 2016, the aggregate amount of daily average required reserves was approximately $59.0 million and $54.5 million, respectively, and were satisfied by vault cash holdings and deposits maintained with the Federal Reserve Bank.

As of March 31, 2017, the Company had approximately $32.6 million in deposits in other financial institutions, of which $14.6 million serves as collateral for cash flow and loan swap derivatives. The Company had approximately $16.7 million in deposits in other financial institutions that were uninsured at March 31, 2017. At least annually, 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.

The Company records an indemnification reserve that includes balances relating to the previously sold credit card portfolio and to mortgage loans previously sold based on historical statistics and loss rates; as of March 31, 2017 and December 31, 2016, the Company’s indemnification reserve was approximately $503,000 and $379,000, respectively.

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As part of the Company's liquidity management strategy, it pledges collateral to secure various financing and other activities that occur during the normal course of business. The following tables present the types of collateral pledged, at March 31, 2017 and December 31, 2016 (dollars in thousands):

	Pledged Assets as of March 31, 2017
	Cash		AFS Securities(1)		HTM Securities(1)		Loans(2)		Total
Public deposits	$	—	$	211,737	$	199,208	$	—	$	410,945
Repurchase agreements	—		103,721		—		—		103,721
FHLB advances	—		1,316		—		2,033,085		2,034,401
Derivatives	14,608		4,237		—		—		18,845
Other purposes	—		16,567		—		—		16,567
Total pledged assets	$	14,608	$	337,578	$	199,208	$	2,033,085	$	2,584,479

	Pledged Assets as of December 31, 2016
	Cash		AFS Securities(1)		HTM Securities(1)		Loans(2)		Total
Public deposits	$	—	$	210,546	$	197,889	$	—	$	408,435
Repurchase agreements	—		108,208		—		—		108,208
FHLB advances	—		1,475		—		1,959,929		1,961,404
Derivatives	33,595		4,376		—		—		37,971
Other purposes	—		17,499		—		—		17,499
Total pledged assets	$	33,595	$	342,104	$	197,889	$	1,959,929	$	2,533,517

(1) Balance represents market value.

(2) Balance represents book value.

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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. The original terms and conditions of the interest rate swaps vary and range in length with a maximum hedging time through November 2022. Amounts receivable or payable are recognized as accrued under the terms of the agreements.

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 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 on 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 by March 31, 2018 is $386,000.

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 March 31, 2017 and December 31, 2016, the aggregate notional amount of the related hedged items totaled $78.7 million and $65.9 million, respectively, and the fair value of the related hedged items was an unrealized loss of $1.1 million and $890,000, 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 on 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 on 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 with fair values as reported in “Other Assets” and “Other Liabilities” on 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

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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” on 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” on the Company’s Consolidated Balance Sheets. Any impact to income is recorded in current period earnings as a component of “Mortgage banking income, net” on the Company’s Consolidated Statements of Income.

The following table summarizes key elements of the Company’s derivative instruments as of March 31, 2017 and December 31, 2016, segregated by derivatives that are considered accounting hedges and those that are not (dollars in thousands):

	March 31, 2017							December 31, 2016
			Derivative (2)							Derivative (2)
	Notional or Contractual Amount (1)			Assets		Liabilities		Notional or Contractual Amount (1)			Assets		Liabilities
Derivatives designated as accounting hedges:
Interest rate contracts:
Cash flow hedges	$	188,500		$	167	$	9,354	$	188,500		$	211	$	9,619
Fair value hedges	78,701			1,549		138		65,920			1,437		296
Derivatives not designated as accounting hedges:
Loan Swaps
Pay fixed - receive floating interest rate swaps	429,485			—		897		373,355			—		1,005
Pay floating - receive fixed interest rate swaps	429,485			897		—		373,355			1,005		—
Other contracts:
Interest rate lock commitments	67,825			1,251		—		48,743			610		—
Best efforts forward delivery commitments	87,283			—		111		85,400			1,469		—

(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.

For information regarding collateral pledged on derivative instruments, see Note 6 "Commitments and Contingencies".

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8. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The change in accumulated other comprehensive income (loss) for the three months ended March 31, 2017 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			Unrealized Gains (Losses) on BOLI			Total
Balance - December 31, 2016	$	(542	)	$	3,377		$	(5,179	)	$	(1,465	)	$	(3,809	)
Other comprehensive income (loss)	3,637			—			(31		)	—			3,606
Amounts reclassified from accumulated other comprehensive income	(313		)	(184		)	180			109			(208		)
Net current period other comprehensive income (loss)	3,324			(184		)	149			109			3,398
Balance - March 31, 2017	$	2,782		$	3,193		$	(5,030	)	$	(1,356	)	$	(411	)

The change in accumulated other comprehensive income (loss) for the three months ended March 31, 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 - December 31, 2015	$	7,777		$	4,432		$	(5,957	)	$	6,252
Other comprehensive income (loss)	3,032			(292		)	(2,681		)	59
Amounts reclassified from accumulated other comprehensive income	(93		)	—			141			48
Net current period other comprehensive income (loss)	2,939			(292		)	(2,540		)	107
Balance - March 31, 2016	$	10,716		$	4,140		$	(8,497	)	$	6,359

Reclassifications of unrealized gains (losses) on available for sale securities are reported on 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 $481,000 and $143,000 for the three months ended March 31, 2017 and 2016, respectively, related to the sale of securities. The tax effects of these transactions during the three months ended March 31, 2017 and 2016 were $168,000 and $50,000, respectively, which amounts were included as a component of income tax expense.

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 securities included net pre-tax unrealized gains of $8.1 million at the date of transfer. Reclassifications of the unrealized gains on transferred securities are reported over time as accretion within interest income on the Company's Consolidated Statements of Income with the corresponding income tax effect being reflected as a component of income tax expense. The Company recorded accretion of $283,000 and $449,000 for the three months ended March 31, 2017 and 2016, respectively. The tax effect of these transactions during the three months ended March 31, 2017 and 2016 were $99,000 and $157,000, respectively, which were included as a component of income tax expense.

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Reclassifications of the change in fair value of cash flow hedges are reported in interest income and interest expense on 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 $277,000 and $217,000 for the three months ended March 31, 2017 and 2016, respectively. The tax effects of these transactions during the three months ended March 31, 2017 and 2016 were $97,000 and $76,000, respectively, which were included as a component of income tax expense.

Reclassifications of unrealized losses on BOLI are reported in salaries and benefits expense on the Company's Consolidated Statements of Income. The Company reported expenses of $109,000 and $0 for the three months ended March 31, 2017 and 2016, respectively.

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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. This value, however, 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 March 31, 2017 and December 31, 2016. As of March 31, 2017, 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 March 31, 2017 and December 31, 2016.

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 on 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 March 31, 2017 and December 31, 2016 (dollars in thousands):

	Fair Value Measurements at March 31, 2017 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	$	—	$	277,849	$	—	$	277,849
Corporate and other bonds	—		112,046		—		112,046
Mortgage-backed securities	—		549,355		—		549,355
Other securities	—		13,808		—		13,808
Loans held for sale	—		19,976		—		19,976
Derivatives:
Interest rate swap	—		897		—		897
Cash flow hedges	—		167		—		167
Fair value hedges	—		1,549		—		1,549
Interest rate lock commitments	—		—		1,251		1,251
LIABILITIES
Derivatives:
Interest rate swap	$	—	$	897	$	—	$	897
Cash flow hedges	—		9,354		—		9,354
Fair value hedges	—		138		—		138
Best efforts forward delivery commitments	—		—		111		111

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	Fair Value Measurements at December 31, 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	$	—	$	275,890	$	—	$	275,890
Corporate and other bonds	—		121,780		—		121,780
Mortgage-backed securities	—		535,286		—		535,286
Other securities	—		13,808		—		13,808
Loans held for sale	—		36,487		—		36,487
Derivatives:
Interest rate swap	—		1,005		—		1,005
Cash flow hedges	—		211		—		211
Fair value hedges	—		1,437		—		1,437
Interest rate lock commitments	—		—		610		610
Best efforts forward delivery commitments	—		—		1,469		1,469
LIABILITIES
Derivatives:
Interest rate swap	$	—	$	1,005	$	—	$	1,005
Cash flow hedges	—		9,619		—		9,619
Fair value hedges	—		296		—		296

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 three and twelve month periods ending March 31, 2017 and December 31, 2016, the Level 3 weighted average adjustments related to impaired loans were 1.2% and 1.5%, 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

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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 three and twelve month periods ending March 31, 2017 and December 31, 2016, the Level 3 weighted average adjustments related to OREO were approximately 25.6% and 25.1%, respectively.

Total valuation expenses related to OREO properties for the three months ended March 31, 2017 and 2016 totaled $238,000 and $126,000, respectively.

The following tables summarize the Company’s financial assets that were measured at fair value on a nonrecurring basis at March 31, 2017 and December 31, 2016 (dollars in thousands):

	Fair Value Measurements at March 31, 2017 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	$	—	$	—	$	18,097	$	18,097
Other real estate owned	—		—		9,605		9,605

	Fair Value Measurements at December 31, 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	$	—	$	—	$	4,344	$	4,344
Other real estate owned	—		—		10,084		10,084

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 March 31, 2017 and December 31, 2016.

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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 Valuation Service’s derivative pricing functions.

Accrued interest

The carrying amounts of accrued interest approximate fair value.

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The carrying values and estimated fair values of the Company’s financial instruments at March 31, 2017 and December 31, 2016 are as follows (dollars in thousands):

			Fair Value Measurements at March 31, 2017 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	$	183,819	$	183,819	$	—	$	—	$	183,819
Securities available for sale	953,058		—		953,058		—		953,058
Held to maturity securities	203,478		—		205,611		—		205,611
Restricted stock	65,402		—		65,402		—		65,402
Loans held for sale	19,976		—		19,976		—		19,976
Net loans	6,515,632		—		—		6,518,399		6,518,399
Derivatives:
Interest rate swap	897		—		897		—		897
Cash flow hedge	167		—		167		—		167
Fair value hedge	1,549		—		1,549		—		1,549
Interest rate lock commitments	1,251		—		—		1,251		1,251
Accrued interest receivable	23,458		—		23,458		—		23,458
Bank owned life insurance	178,774		—		178,774		—		178,774
LIABILITIES
Deposits	$	6,614,195	$	—	$	6,605,551	$	—	$	6,605,551
Borrowings	980,866		—		960,830		—		960,830
Accrued interest payable	4,209		—		4,209		—		4,209
Derivatives:
Interest rate swap	897		—		897		—		897
Cash flow hedges	9,354		—		9,354		—		9,354
Fair value hedges	138		—		138		—		138
Best efforts forward delivery commitments	111		—		—		111		111

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			Fair Value Measurements at December 31, 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	$	179,237	$	179,237	$	—	$	—	$	179,237
Securities available for sale	946,764		—		946,764		—		946,764
Held to maturity securities	201,526		—		202,315		—		202,315
Restricted stock	60,782		—		60,782		—		60,782
Loans held for sale	36,487		—		36,487		—		36,487
Net loans	6,269,868		—		—		6,265,443		6,265,443
Derivatives:
Interest rate swap	1,005		—		1,005		—		1,005
Cash flow hedges	211		—		211		—		211
Fair value hedges	1,437		—		1,437		—		1,437
Interest rate lock commitments	610		—		—		610		610
Best efforts forward delivery commitments	1,469		—		—		1,469		1,469
Accrued interest receivable	23,448		—		23,448		—		23,448
Bank owned life insurance	179,318		—		179,318		—		179,318
LIABILITIES
Deposits	$	6,379,489	$	—	$	6,370,457	$	—	$	6,370,457
Borrowings	990,089		—		970,195		—		970,195
Accrued interest payable	2,320		—		2,230		—		2,230
Derivatives:
Interest rate swap	1,005		—		1,005		—		1,005
Cash flow hedges	9,619		—		9,619		—		9,619
Fair value hedges	296		—		296		—		296

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. Borrowers with fixed rate obligations, however, 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 42,643 and 76,583 shares underlying anti-dilutive awards for the three months ended March 31, 2017 and 2016, 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 months ended March 31, 2017 and 2016 (in thousands except per share data):

	Net Income Available to Common Shareholders (Numerator)		Weighted Average Common Shares (Denominator)	Per Share Amount
Three months ended March 31, 2017
Net income, basic	$	19,124	43,654	$	0.44
Add: potentially dilutive common shares - stock awards	—		72	—
Diluted	$	19,124	43,726	$	0.44
Three months ended March 31, 2016
Net income, basic	$	16,961	44,251	$	0.38
Add: potentially dilutive common shares - stock awards	—		76	—
Diluted	$	16,961	44,327	$	0.38

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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 113 retail locations in Virginia as of March 31, 2017. 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 segment's business is a primarily fee-based business, while the community bank segment is driven principally by net interest income. The community 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 the three months ended March 31, 2017 and 2016 was the three month LIBOR rate plus 0.15% with no floor. These transactions are eliminated in the consolidation process.

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 the three months ended March 31, 2017 and 2016 is as follows (dollars in thousands):

UNION BANKSHARES CORPORATION AND SUBSIDIARIES

SEGMENT FINANCIAL INFORMATION

	Community Bank		Mortgage		Eliminations			Consolidated
Three Months Ended March 31, 2017
Net interest income	$	66,234	$	333	$	—		$	66,567
Provision for credit losses	2,104		18		—			2,122
Net interest income after provision for credit losses	64,130		315		—			64,445
Noninterest income	16,757		2,223		(141		)	18,839
Noninterest expenses	55,014		2,522		(141		)	57,395
Income before income taxes	25,873		16		—			25,889
Income tax expense	6,753		12		—			6,765
Net income	$	19,120	$	4	$	—		$	19,124
Total assets	$	8,660,987	$	76,818	$	(67,885	)	$	8,669,920
Three Months Ended March 31, 2016
Net interest income	$	63,425	$	306	$	—		$	63,731
Provision for credit losses	2,500		104		—			2,604
Net interest income after provision for credit losses	60,925		202		—			61,127
Noninterest income	13,608		2,477		(171		)	15,914
Noninterest expenses	51,844		2,599		(171		)	54,272
Income before income taxes	22,689		80		—			22,769
Income tax expense	5,782		26		—			5,808
Net income	$	16,907	$	54	$	—		$	16,961
Total assets	$	7,825,652	$	55,069	$	(48,110	)	$	7,832,611

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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 March 31, 2017, and the related consolidated statements of income, comprehensive income, changes in stockholders’ equity and cash flows for the three-month periods ended March 31, 2017 and 2016. 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, 2016, 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 28, 2017. In our opinion, the accompanying consolidated balance sheet of the Company as of December 31, 2016, 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

May 9, 2017

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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, 2016. Highlighted in the discussion are material changes from prior reporting periods and any identifiable trends affecting the Company. Results of operations for the three months ended March 31, 2017 and 2016 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, are based on certain assumptions as of the time they are made, and are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified.  Such statements are often characterized by the use of qualified words (and their derivatives) such as “expect,” “believe,” “estimate,” “plan,” “project,” “anticipate,” “intend,” “will,” “may,” “view,” “opportunity,” “potential,” 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 or changes in:

• changes in interest rates,

• general economic and financial market conditions,

• the Company’s ability to manage its growth or implement its growth strategy,

• the incremental cost and/or decreased revenues associated with exceeding $10 billion in assets,

• levels of unemployment in the Bank’s lending area,

• real estate values in the Bank’s lending area,

• an insufficient ALL,

• the quality or composition of the loan or investment portfolios,

• concentrations of loans secured by real estate, particularly commercial real estate,

• the effectiveness of the Company’s credit processes and management of the Company’s credit risk,

• demand for loan products and financial services in the Company’s market area,

• the Company’s ability to compete in the market for financial services,

• technological risks and developments, and cyber attacks or events,

• performance by the Company’s counterparties or vendors,

• deposit flows,

• the availability of financing and the terms thereof,

• the level of prepayments on loans and mortgage-backed securities,

• legislative or regulatory changes and requirements,

• monetary and fiscal policies of the U.S. government including policies of the U.S. Department of the Treasury and the Board of Governors of the Federal Reserve System, and

• accounting principles and guidelines.

More information on risk factors that could affect the Company’s forward-looking statements is available on the Company’s website, http://investors.bankatunion.com, or the Company's Annual Report on Form 10-K for the year ended December 31, 2016 and other reports filed with the SEC. The information on the Company’s website is not a part of this Form 10-Q. All risk factors and uncertainties described in those documents should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. 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.

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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, 2016.

The Company provides additional information on its critical accounting policies and estimates listed above under “MD&A—Critical Accounting Policies” in its 2016 Form 10-K.

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 113 bank branches and approximately 184 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 March 31, 2017, the Company reported net income of $19.1 million and earnings per share of $0.44. These results represent an increase of $2.1 million, or 12.8%, from $17.0 million in earnings from the first quarter of 2016. Earnings per share of $0.44 for the quarter ended March 31, 2017 represent an increase of $0.06, or 15.8%, in earnings per share from the first quarter of 2016. 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 first quarter of 2017 for the community bank segment was $19.1 million, or $0.44 per share, compared to $16.9 million, or $0.38 per share, in the first quarter of 2016.

• The mortgage segment reported net income of $4,000 for the first quarter of 2017, compared to net income of $54,000 in the first quarter of 2016.

• ROA was 0.92% for the quarter ended March 31, 2017 compared to 0.88% for the first quarter of 2016.

• ROE was 7.68% for the quarter ended March 31, 2017 compared to 6.89% for the first quarter of 2016. ROTCE was 11.20% for the quarter ended March 31, 2017 compared to 10.13% for the first quarter of 2016.

• Loans held for investment grew $247.0 million, or 15.7% (annualized), from December 31, 2016 and increased $773.5 million, or 13.4%, from March 31, 2016. Average loans held for investment increased $169.8 million, or 10.9% (annualized), from December 31, 2016 and increased $673.9 million, or 11.8%, from March 31, 2016.

• Deposits grew $234.7 million, or 14.7% (annualized), from December 31, 2016 and grew $668.2 million, or 11.2%, from March 31, 2016. Average deposits increased $97.3 million, or 6.2% (annualized), from the prior quarter and increased $507.9 million, or 8.6%, from the same quarter in the prior year.

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Net Interest Income

	For the Three Months Ended March 31,
	2017			2016			Change
	(Dollars in thousands)
Average interest-earning assets	$	7,660,937		$	6,968,988		$	691,949
Interest income	$	76,640		$	70,749		$	5,891
Interest income (FTE) (1)	$	79,180		$	73,238		$	5,942
Yield on interest-earning assets	4.05		%	4.09		%	(4		)	bps
Yield on interest-earning assets (FTE) (1)	4.19		%	4.23		%	(4		)	bps
Average interest-bearing liabilities	$	5,999,960		$	5,379,799		$	620,161
Interest expense	$	10,073		$	7,018		$	3,055
Cost of interest-bearing liabilities	0.68		%	0.52		%	16			bps
Cost of funds	0.53		%	0.41		%	12			bps
Net interest income	$	66,567		$	63,731		$	2,836
Net interest income (FTE) (1)	$	69,107		$	66,220		$	2,887
Net interest margin	3.52		%	3.68		%	(16		)	bps
Net interest margin (FTE) (1)	3.66		%	3.82		%	(16		)	bps
Core net interest margin (FTE) (1)(2)	3.58		%	3.76		%	(18		)	bps

(1) Refer to the “Non-GAAP Measures” section in this Item 2 of this Form 10-Q for more information about this non-GAAP financial measure.

(2) Core net interest margin (non-GAAP) excludes the impact of acquisition accounting accretion and amortization adjustments in net interest income.

For the first quarter of 2017, net interest income was $66.6 million, an increase of $2.8 million from the first quarter of 2016. For the first quarter of 2017, tax-equivalent net interest income was $69.1 million, an increase of $2.9 million from the first quarter of 2016. The increases in both net interest income and tax-equivalent net interest income were primarily driven by higher average loan balances and higher acquisition-related accretion. Net accretion related to acquisition accounting increased $347,000 from the first quarter of 2016 to $1.5 million in the first quarter of 2017. In the first quarter of 2017, net interest margin decreased 16 basis points to 3.52% from 3.68% in the first quarter of 2016, while tax-equivalent net interest margin decreased by 16 basis points to 3.66% compared to 3.82% for the same periods. Core tax-equivalent net interest margin (which excludes the 8 basis point impact of acquisition accounting accretion in the first quarter of 2017 and 6 basis points the first quarter of 2016) decreased by 18 basis points to 3.58% in the first quarter of 2017 from 3.76% in the first quarter of 2016. The net decreases in net interest margin and tax-equivalent net interest margin measures were driven by the 4 basis point decline in interest-earning asset yields and the 12 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. The increase in the cost of funds was primarily attributable to subordinated debt that the Company issued at the end of 2016.

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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 March 31,
	2017							2016
	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	$	746,359		$	4,923	2.68	%	$	743,724		$	4,316	2.33	%
Tax-exempt	461,409			5,480		4.82	%	443,426			5,291		4.80	%
Total securities	1,207,768			10,403		3.49	%	1,187,150			9,607		3.25	%
Loans, net (3) (4)	6,383,905			68,503		4.35	%	5,709,998			63,326		4.46	%
Other earning assets	69,264			274		4.60	%	71,840			305		1.71	%
Total earning assets	7,660,937			$	79,180	4.19	%	6,968,988			$	73,238	4.23	%
Allowance for loan losses	(37,898		)					(35,034		)
Total non-earning assets	842,478							830,876
Total assets	$	8,465,517						$	7,764,830
Liabilities and Stockholders' Equity:
Interest-bearing deposits:
Transaction and money market accounts	$	3,205,692		$	1,969	0.25	%	$	2,809,961		$	1,393	0.20	%
Regular savings	596,559			191		0.13	%	580,923			217		0.15	%
Time deposits	1,211,064			2,917		0.98	%	1,171,972			2,585		0.89	%
Total interest-bearing deposits	5,013,315			5,077		0.41	%	4,562,856			4,195		0.37	%
Other borrowings (5)	986,645			4,996		2.05	%	816,943			2,823		1.39	%
Total interest-bearing liabilities	5,999,960			$	10,073	0.68	%	5,379,799			$	7,018	0.52	%
Noninterest-bearing liabilities:
Demand deposits	1,393,966							1,336,548
Other liabilities	61,273							59,069
Total liabilities	7,455,199							6,775,416
Stockholders' equity	1,010,318							989,414
Total liabilities and stockholders' equity	$	8,465,517						$	7,764,830
Net interest income				$	69,107						$	66,220
Interest rate spread						3.51	%						3.71	%
Cost of funds						0.53	%						0.41	%
Net interest margin (6)						3.66	%						3.82	%

(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 $1.4 million and $1.1 million for the three months ended March 31, 2017 and 2016, respectively, in accretion of the fair market value adjustments related to acquisitions.

(5) Interest expense on borrowings includes $48,000 and $62,000 for the three months ended March 31, 2017 and 2016, respectively, in accretion of the fair market value adjustments related to acquisitions.

(6) Core net interest margin excludes purchase accounting adjustments and was 3.58% and 3.76% for the three months ended March 31, 2017 and 2016, 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 March 31, 2017 vs. March 31, 2016 Increase (Decrease) Due to Change in:
	Volume			Rate			Total
Earning Assets:
Securities:
Taxable	$	15		$	592		$	607
Tax-exempt	213			(24		)	189
Total securities	228			568			796
Loans, net (1)	7,284			(2,107		)	5,177
Other earning assets	(10		)	(21		)	(31		)
Total earning assets	$	7,502		$	(1,560	)	$	5,942
Interest-Bearing Liabilities:
Interest-bearing deposits:
Transaction and money market accounts	$	214		$	362		$	576
Regular savings	6			(32		)	(26		)
Time Deposits	88			244			332
Total interest-bearing deposits	308			574			882
Other borrowings (2)	670			1,503			2,173
Total interest-bearing liabilities	978			2,077			3,055
Change in net interest income	$	6,524		$	(3,637	)	$	2,887

(1) The rate-related change in interest income on loans includes the impact of higher accretion of the acquisition-related fair market value adjustments of $361,000.

(2) The rate-related change in interest expense on other borrowings includes the impact of lower accretion of the acquisition-related fair market value adjustments of $14,000.

The Company’s fully taxable equivalent net interest margin includes the impact of acquisition accounting fair value adjustments. The impact of net accretion for the quarters ended March 31, 2016 and 2017 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 March 31, 2017	1,445		48			1,493
For the remaining nine months of 2017	4,100		122			4,222
For the years ending:
2018	4,835		(143		)	4,692
2019	3,566		(286		)	3,280
2020	2,707		(301		)	2,406
2021	2,127		(316		)	1,811
2022	1,732		(332		)	1,400
Thereafter	6,589		(4,974		)	1,615

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Noninterest Income

	For the Three Months Ended
	March 31,						Change
	2017			2016			$			%
	(Dollars in thousands)
Noninterest income:
Service charges on deposit accounts	$	4,829		$	4,734		$	95		2.0	%
Other service charges and fees	4,408			4,156			252			6.1	%
Fiduciary and asset management fees	2,794			2,138			656			30.7	%
Mortgage banking income, net	2,025			2,146			(121		)	(5.6	)%
Gains on securities transactions, net	481			143			338			236.4	%
Bank owned life insurance income	2,125			1,372			753			54.9	%
Loan-related interest rate swap fees	1,180			662			518			78.2	%
Other operating income	997			563			434			77.1	%
Total noninterest income	$	18,839		$	15,914		$	2,925		18.4	%
Community bank segment	$	16,757		13,608			$	3,149		23.1	%
Mortgage segment	2,223			2,477			(254		)	(10.3	)%
Intercompany eliminations	(141		)	(171		)	30			17.5	%
Total noninterest income	$	18,839		$	15,914		$	2,925		18.4	%

Noninterest income increased $2.9 million, or 18.4%, to $18.8 million for the quarter ended March 31, 2017 from $15.9 million for the first quarter of 2016. For the first quarter of 2017, bank owned life insurance income increased $753,000 primarily related to death benefit proceeds received; fiduciary and asset management fees were $656,000 higher due to the acquisition of ODCM in the second quarter of 2016; loan-related swap fees increased $518,000; customer-related fee income increased $347,000 primarily related to increases in debit card interchange fees; and gains on sales of securities were $338,000 higher, in each case as compared to the first quarter of 2016.

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Noninterest expense

	For the Three Months Ended
	March 31,						Change
	2017			2016			$			%
	(Dollars in thousands)
Noninterest expense:
Salaries and benefits	$	32,168		$	28,048		$	4,120		14.7	%
Occupancy expenses	4,903			4,976			(73		)	(1.5	)%
Furniture and equipment expenses	2,603			2,636			(33		)	(1.3	)%
Printing, postage, and supplies	1,150			1,139			11			1.0	%
Communications expense	910			1,089			(179		)	(16.4	)%
Technology and data processing	3,900			3,814			86			2.3	%
Professional services	1,658			1,989			(331		)	(16.6	)%
Marketing and advertising expense	1,740			1,938			(198		)	(10.2	)%
FDIC assessment premiums and other insurance	706			1,362			(656		)	(48.2	)%
Other taxes	2,022			1,618			404			25.0	%
Loan-related expenses	1,329			878			451			51.4	%
OREO and credit-related expenses	541			569			(28		)	(4.9	)%
Amortization of intangible assets	1,637			1,880			(243		)	(12.9	)%
Training and other personnel costs	969			744			225			30.2	%
Other expenses	1,159			1,592			(433		)	(27.2	)%
Total noninterest expense	$	57,395		$	54,272		$	3,123		5.8	%
Community bank segment	$	55,014		$	51,844		$	3,170		6.1	%
Mortgage segment	2,522			2,599			(77		)	(3.0	)%
Intercompany eliminations	(141		)	(171		)	30			17.5	%
Total noninterest expense	$	57,395		$	54,272		$	3,123		5.8	%

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

Noninterest expense increased $3.1 million, or 5.8%, to $57.4 million for the quarter ended March 31, 2017 from $54.3 million in the first quarter of 2016. Salaries and benefits expenses increased by $4.1 million primarily related to annual merit adjustments; increases in group insurance and incentive compensation; and increases related to investments in the Company's growth with the Bank's ODCM acquisition and the opening of a loan production office, or LPO, in North Carolina. This increase was partially offset by lower FDIC and other insurance expenses of $656,000 and declines in professional fees of $331,000 due to lower legal and consulting fees.

SEGMENT INFORMATION

Community Bank Segment

For the three months ended March 31, 2017, the community bank segment reported net income of $19.1 million, which was an increase of $2.2 million from the first quarter of 2016. Net interest income increased $2.8 million year-over-year to $66.2 million for the quarter ended March 31, 2017, primarily driven by higher average loan balances and higher acquisition-related accretion. The provision for credit losses for the quarter ended March 31, 2017 was $2.1 million, a decrease of $396,000 compared to the quarter ended March 31, 2016, primarily driven by lower charge-off levels.

Noninterest income increased $3.2 million, or 23.1%, from $13.6 million in the first quarter of 2016 to $16.8 million in the first quarter of 2017. Customer-related fee income increased $347,000 primarily due to higher debit card interchange fees. Fiduciary and asset management fees also increased by $656,000 related to the acquisition of ODCM. Other increases in noninterest income were related to higher bank owned life insurance income of $753,000 primarily related to death benefit proceeds

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received and higher loan-related interest-rate swap fees of $518,000 in the quarter ended March 31, 2017 compared to the quarter ended March 31, 2016.

Noninterest expense increased $3.2 million, or 6.1%, from $51.8 million in the first quarter of 2016 to $55.0 million in the quarter ended March 31, 2017. The increase in noninterest expense is driven by increases in salaries and benefits expense of $4.2 million primarily related to annual merit adjustments; increases in group insurance and incentive compensation; and increases related to investments in the Company's growth with the Bank's ODCM acquisition and the opening of a North Carolina LPO. This increase in noninterest expense was partially offset by lower FDIC and other insurance expenses and professional fees related to lower legal and consulting fees.

Mortgage Segment

The mortgage segment reported net income of $4,000 for the first quarter of 2017, compared to net income of $54,000 in the first quarter of 2016. Mortgage banking income, net of commissions, decreased $121,000, due to lower gain on sale margins. Mortgage loan originations increased $2.0 million, or 2.0%, from $98.2 million for the quarter ended March 31, 2016 to $100.2 million for the quarter ended March 31, 2017. Noninterest expense decreased $77,000, largely a result of declines in personnel costs.

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 on a consolidated basis 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 March 31, 2017 and 2016 was 26.1% and 25.5%, respectively. The increase in the effective tax rate is primarily related to tax-exempt interest and bank owned life insurance income being a smaller percentage of pre-tax income in 2017 compared to 2016.

BALANCE SHEET

Assets

At March 31, 2017, total assets were $8.7 billion, an increase of $243.1 million, or 11.6% (annualized), from $8.4 billion at December 31, 2016. The increase in assets was mostly related to loan growth.

Loans held for investment, net of deferred fees and costs, were $6.6 billion at March 31, 2017, an increase of $247.0 million, or 15.7% (annualized), from December 31, 2016. Loan growth occurred across all categories. Quarterly average loans increased $169.8 million, or 10.9% (annualized), for the quarter ended March 31, 2017 compared to the quarter ended December 31, 2016. 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 March 31, 2017, total liabilities were $7.7 billion, an increase of $228.5 million from December 31, 2016.

Total deposits were $6.6 billion at March 31, 2017, an increase of $234.7 million, or 14.7% (annualized), from December 31, 2016. Deposits increased in all categories when compared to year-end 2016, but was primarily driven by increases in demand and interest-bearing deposits consisting of NOW and money market accounts. Quarterly average deposits increased $97.3 million, or 6.2% (annualized), for the quarter ended March 31, 2017 compared to the quarter ended December 31, 2016. For further discussion on this topic, see “Deposits” below.

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At March 31, 2017, stockholders’ equity was $1.0 billion, an increase of $14.6 million from December 31, 2016. 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 March 31, 2017 and December 31, 2016 were 13.30% and 13.56%, respectively. The Tier 1 risk-based capital ratios were 10.77% and 10.97% at March 31, 2017 and December 31, 2016, respectively. The common equity Tier 1 risk-based capital ratios were 9.55% and 9.72% at March 31, 2017 and December 31, 2016, respectively. The Company’s common equity to total asset ratios at March 31, 2017 and December 31, 2016 were 11.71% and 11.88%, respectively, while its tangible common equity to tangible assets ratios were 8.36% and 8.41%, respectively, at the same dates.

Also, the Company declared and paid a cash dividend of $0.20 per share during the first quarter of 2017, consistent with the dividend paid in the prior quarter, and an increase of $0.01 per share, or 5.3%, compared to the dividend paid during the same quarter in the prior year.

Securities

At March 31, 2017, the Company had total investments in the amount of $1.2 billion, or 14.1 % of total assets, as compared to $1.2 billion, or 14.3% of total assets, at December 31, 2016. 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 many of its peers. The Company does not engage in structured derivative or hedging activities within the investment portfolio.

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): 

	March 31, 2017		December 31, 2016
Available for Sale:
Obligations of states and political subdivisions	$	277,849	$	275,890
Corporate and other bonds	112,046		121,780
Mortgage-backed securities	549,355		535,286
Other securities	13,808		13,808
Total securities available for sale, at fair value	953,058		946,764
Held to Maturity:
Obligations of states and political subdivisions, at carrying value	203,478		201,526
Federal Reserve Bank stock	27,558		23,808
Federal Home Loan Bank stock	37,844		36,974
Total restricted stock, at cost	65,402		60,782
Total investments	$	1,221,938	$	1,209,072

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 March 31, 2017. 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.

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The following table summarizes the contractual maturity of securities available for sale at fair value and their weighted average yields as of March 31, 2017 (dollars in thousands): 

	1 Year or Less		1 - 5 Years		5 - 10 Years		Over 10 Years		Total
Mortgage backed securities:
Amortized cost	$	208	$	57,232	$	152,643	$	338,374	$	548,457
Fair value	211		57,119		152,565		339,460		549,355
Weighted average yield (1)	3.75		1.99		2.21		2.48		2.35
Obligations of states and political subdivisions:
Amortized cost	13,313		56,140		78,844		125,706		274,003
Fair value	13,470		58,120		81,172		125,087		277,849
Weighted average yield (1)	6.05		4.70		4.50		3.90		4.34
Corporate bonds and other securities:
Amortized cost	11,385		518		52,530		61,884		126,317
Fair value	11,308		518		53,181		60,847		125,854
Weighted average yield (1)	0.30		0.47		4.44		2.10		2.91
Total securities available for sale:
Amortized cost	24,906		113,890		284,017		525,964		948,777
Fair value	24,989		115,757		286,918		525,394		953,058
Weighted average yield (1)	3.40		3.32		3.26		2.78		3.00

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

The following table summarizes the contractual maturity of securities held to maturity at carrying value and their weighted average yields as of March 31, 2017 (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	$	4,108	$	30,050	$	62,127	$	107,193	$	203,478
Fair value	4,140		30,503		62,485		108,483		205,611
Weighted average yield (1)	2.80		2.65		3.11		3.74		3.37

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

As of March 31, 2017, 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 Commonwealth of Virginia and the State of Texas both represented 12% and issuances within the State of Washington represented 11% of the municipal portfolio; no other state had a concentration above 10%. Substantially all municipal holdings are considered investment grade. 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.

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As of March 31, 2017, liquid assets totaled $2.2 billion, or 28.3%, of total earning assets. As of March 31, 2017, approximately $2.0 billion, or 30.6%, of total loans are scheduled to mature within one year based on contractual maturity, adjusted for expected prepayments.

Loan Portfolio

Loans held for investment, net of deferred fees and costs, were $6.6 billion at March 31, 2017, $6.3 billion at December 31, 2016, and $5.8 billion at March 31, 2016, respectively. Commercial real estate - non-owner occupied loans continue to represent the Company’s largest category, comprising 24.9% of the total loan portfolio at March 31, 2017.

The following table presents the Company’s composition of loans held for investment, 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): 

	March 31, 2017				December 31, 2016				September 30, 2016				June 30, 2016				March 31, 2016
Construction and Land Development	$	770,287	11.8	%	$	751,131	11.9	%	$	776,430	12.6	%	$	765,997	12.9	%	$	776,698	13.4	%
Commercial Real Estate - Owner Occupied	870,559		13.3	%	857,805		13.6	%	857,142		13.9	%	831,880		14.0	%	849,202		14.7	%
Commercial Real Estate - Non-Owner Occupied	1,631,767		24.9	%	1,564,295		24.8	%	1,454,828		23.7	%	1,370,745		23.1	%	1,296,251		22.5	%
Multifamily Real Estate	353,769		5.4	%	334,276		5.3	%	339,313		5.5	%	337,723		5.7	%	323,270		5.6	%
Commercial & Industrial	576,567		8.8	%	551,526		8.7	%	509,857		8.3	%	469,054		7.9	%	453,208		7.8	%
Residential 1-4 Family	1,057,439		16.1	%	1,029,547		16.3	%	999,361		16.3	%	992,457		16.7	%	978,478		16.9	%
Auto	271,466		4.1	%	262,071		4.2	%	255,188		4.2	%	244,575		4.1	%	241,737		4.2	%
HELOC	527,863		8.1	%	526,884		8.4	%	524,097		8.5	%	519,196		8.7	%	517,122		8.9	%
Consumer and all other	494,329		7.5	%	429,525		6.8	%	432,702		7.0	%	409,471		6.9	%	344,536		6.0	%
Total loans held for investment	$	6,554,046	100.0	%	$	6,307,060	100.0	%	$	6,148,918	100.0	%	$	5,941,098	100.0	%	$	5,780,502	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 March 31, 2017 (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
Construction and Land Development	$	770,287	$	460,265	$	186,425	$	153,335	$	33,090	$	123,597	$	99,641	$	23,956
Commercial Real Estate - Owner Occupied	870,559		94,692		252,681		43,370		209,311		523,186		361,939		161,247
Commercial Real Estate - Non-Owner Occupied	1,631,767		137,264		559,793		197,067		362,726		934,710		657,825		276,885
Multifamily Real Estate	353,769		23,611		140,023		28,120		111,903		190,135		164,435		25,700
Commercial & Industrial	576,567		184,634		172,026		129,123		42,903		219,907		146,816		73,091
Residential 1-4 Family	1,057,439		71,129		345,253		12,568		332,685		641,057		359,330		281,727
Auto	271,466		2,094		—		—		—		269,372		129,560		139,812
HELOC	527,863		34,215		491,179		41,263		449,916		2,469		2,019		450
Consumer and all other	494,329		44,135		47,640		10,972		36,668		402,554		164,457		238,097
Total loans held for investment	$	6,554,046	$	1,052,039	$	2,195,020	$	615,818	$	1,579,202	$	3,306,987	$	2,086,022	$	1,220,965

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 March 31, 2017, the largest component of the Company’s loan portfolio consisted of commercial real estate loans, residential 1-4 family loans, and construction and land development loans. 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 primarily serves as a secondary mortgage banking 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 quarter of 2017, the Company experienced declines in past due loan levels as well as in net charge-off levels from the prior quarter and the first quarter of 2016. Nonaccrual loan levels increased in the first quarter of 2017, primarily related to two credit relationships. The loan loss provision and allowance for loan loss increased from December 31, 2016 due to loan growth and increased specific reserves related to increases in nonaccrual loans.

All nonaccrual and past due loan metrics discussed below exclude purchased credit impaired (“PCI”) loans totaling $57.8 million (net of fair value mark of $13.7 million) at March 31, 2017.

Troubled Debt Restructurings

The total recorded investment in TDRs as of March 31, 2017 was $18.7 million, an increase of $3.3 million, or 21.6%, from $15.4 million at December 31, 2016 and an increase of $5.8 million, or 44.5%, from $13.0 million at March 31, 2016. Of the $18.7 million of TDRs at March 31, 2017, $14.3 million, or 76.5%, were considered performing while the remaining $4.4 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, which is included in the Company's general reserve. 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 ("NPAs")

At March 31, 2017, NPAs totaled $31.9 million, an increase of $11.9 million, or 59.3%, from December 31, 2016 and an increase of $4.6 million, or 16.8%, from a year ago. In addition, NPAs as a percentage of total outstanding loans increased 17 basis points to 0.49% at March 31, 2017 from 0.32% as of December 31, 2016 and increased 2 basis points from 0.47% a year earlier.

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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):

	March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016			March 31, 2016
Nonaccrual loans, excluding PCI loans	$	22,338		$	9,973		$	12,677		$	10,861		$	13,092
Foreclosed properties	6,951			7,430			7,927			10,076			10,941
Former bank premises	2,654			2,654			2,654			3,305			3,305
Total nonperforming assets	31,943			20,057			23,258			24,242			27,338
Loans past due 90 days and accruing interest	2,323			3,005			3,529			3,533			5,723
Total nonperforming assets and loans past due 90 days and accruing interest	$	34,266		$	23,062		$	26,787		$	27,775		$	33,061
Performing TDRs	$	14,325		$	13,967		$	11,824		$	11,885		$	11,486
PCI loans	57,770			59,292			62,346			67,170			70,105
Balances
Allowance for loan losses	$	38,414		$	37,192		$	36,542		$	35,074		$	34,399
Average loans, net of deferred fees and costs	6,383,905			6,214,084			6,033,723			5,863,007			5,709,998
Loans, net of deferred fees and costs	6,554,046			6,307,060			6,148,918			5,941,098			5,780,502
Ratios
NPAs to total loans	0.49		%	0.32		%	0.38		%	0.41		%	0.47		%
NPAs & loans 90 days past due to total loans	0.52		%	0.37		%	0.44		%	0.47		%	0.57		%
NPAs to total loans & OREO	0.49		%	0.32		%	0.38		%	0.41		%	0.47		%
NPAs & loans 90 days past due and accruing to total loans & OREO	0.52		%	0.37		%	0.43		%	0.47		%	0.57		%
ALL to nonaccrual loans	171.97		%	372.93		%	288.25		%	322.94		%	262.75		%
ALL to nonaccrual loans & loans 90 days past due and accruing	155.77		%	286.58		%	225.48		%	243.67		%	182.83		%

Nonperforming assets at March 31, 2017 included $22.3 million in nonaccrual loans, a net increase of $12.4 million, or 124.0%, from December 31, 2016 and a net increase of $9.2 million, or 70.6%, from March 31, 2016. The following table shows the activity in nonaccrual loans for the quarter ended (dollars in thousands):

	March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016			March 31, 2016
Beginning Balance	$	9,973		$	12,677		$	10,861		$	13,092		$	11,936
Net customer payments	(1,068		)	(1,451		)	(1,645		)	(2,859		)	(1,204		)
Additions	13,557			1,094			4,359			2,568			5,150
Charge-offs	(97		)	(1,216		)	(660		)	(1,096		)	(1,446		)
Loans returning to accruing status	(27		)	(1,039		)	(23		)	(396		)	(932		)
Transfers to OREO	—			(92		)	(215		)	(448		)	(412		)
Ending Balance	$	22,338		$	9,973		$	12,677		$	10,861		$	13,092

The nonaccrual additions in the first quarter of 2017 primarily relate to two unrelated credit relationships; one relationship was comprised of commercial and industrial and construction loans, while the other was comprised of commercial real estate - non-owner occupied loans.

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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):

	March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016			March 31, 2016
Construction and Land Development	$	6,545		$	2,037		$	2,301		$	1,604		$	2,156
Commercial Real Estate - Owner Occupied	1,298			794			1,609			1,661			2,816
Commercial Real Estate - Non-owner Occupied	2,798			—			—			—			—
Commercial & Industrial	3,245			124			1,344			263			810
Residential 1-4 Family	5,856			5,279			5,279			5,448			5,696
Auto	393			169			231			140			162
HELOC	1,902			1,279			1,464			1,495			973
Consumer and All Other	301			291			449			250			479
Total	$	22,338		$	9,973		$	12,677		$	10,861		$	13,092
Coverage Ratio	171.97		%	372.93		%	288.25		%	322.94		%	262.75		%

Nonperforming assets at March 31, 2017 also included $9.6 million in OREO, a decrease of $479,000, or 4.8%, from December 31, 2016 and a decrease of $4.6 million, or 32.6%, from the prior year. The following table shows the activity in OREO for the quarters ended (dollars in thousands):

	March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016			March 31, 2016
Beginning Balance	$	10,084		$	10,581		$	13,381		$	14,246		$	15,299
Additions of foreclosed property	—			859			246			501			456
Valuation adjustments	(238		)	(138		)	(479		)	(274		)	(126		)
Proceeds from sales	(277		)	(1,282		)	(2,844		)	(1,086		)	(1,390		)
Gains (losses) from sales	36			64			277			(6		)	7
Ending Balance	$	9,605		$	10,084		$	10,581		$	13,381		$	14,246

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

	March 31, 2017		December 31, 2016		September 30, 2016		June 30, 2016		March 31, 2016
Land	$	3,328	$	3,328	$	3,440	$	4,759	$	4,874
Land Development	2,111		2,379		2,320		2,416		2,616
Residential Real Estate	1,338		1,549		1,806		2,412		2,707
Commercial Real Estate	174		174		361		489		744
Former Bank Premises (1)	2,654		2,654		2,654		3,305		3,305
Total	$	9,605	$	10,084	$	10,581	$	13,381	$	14,246

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

Past Due Loans

At March 31, 2017, total accruing past due loans were $26.9 million, or 0.41% of total loans, compared to $27.9 million, or 0.44%, at December 31, 2016 and $35.1 million, or 0.61%, a year ago. At March 31, 2017, loans past due 90 days or more and accruing interest totaled $2.3 million, or 0.04% of total loans, compared to $3.0 million, or 0.05%, at December 31, 2016 and $5.7 million, or 0.10%, a year ago.

Charge-offs and delinquencies

For the quarter ended March 31, 2017, net charge-offs were $788,000, or 0.05% of average loans on an annualized basis, compared to $2.2 million, or 0.15%, for the same quarter last year.

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Provision for Credit Losses

The provision for loan losses for the quarter ended March 31, 2017 was $2.0 million, a decline of $494,000 compared to the same quarter a year ago. Despite the loan growth that has occurred during the year, the provision for loan losses declined in the first three months of 2017 compared to the same period in the prior year, primarily due to lower charge-off levels. Additionally, a $112,000 provision was recorded during the quarter ending March 31, 2017 related to off-balance sheet credit exposures, resulting in a total of $2.1 million in provision for credit losses for the quarter, compared to $2.6 million in the first quarter of 2016.

Allowance for Loan Losses

The allowance for loan losses of $38.4 million at March 31, 2017, is an increase of $1.2 million compared to the allowance for loan losses at December 31, 2016, primarily related to loan growth and increases in specific reserves related to nonaccrual loans. 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):

	March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016			March 31, 2016
Balance, beginning of period	$	37,192		$	36,542		$	35,074		$	34,399		$	34,047
Loans charged-off:
Commercial	241			620			16			668			617
Real estate	374			469			929			1,299			1,427
Consumer	1,018			738			518			318			936
Total loans charged-off	1,633			1,827			1,463			2,285			2,980
Recoveries:
Commercial	139			61			67			117			238
Real estate	273			806			303			281			391
Consumer	433			136			164			262			199
Total recoveries	845			1,003			534			660			828
Net charge-offs	788			824			929			1,625			2,152
Provision for loan losses	2,010			1,474			2,397			2,300			2,504
Balance, end of period	$	38,414		$	37,192		$	36,542		$	35,074		$	34,399
ALL to loans	0.59		%	0.59		%	0.59		%	0.59		%	0.60		%
ALL to loans, adjusted for acquisition accounting (Non-GAAP)	0.84		%	0.86		%	0.90		%	0.92		%	0.95		%
Net charge-offs to average loans	0.05		%	0.05		%	0.06		%	0.11		%	0.15		%
Provision to average loans	0.13		%	0.09		%	0.16		%	0.16		%	0.18		%

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):

	March 31, 2017				December 31, 2016				September 30, 2016				June 30, 2016				March 31, 2016
	$		% (1)		$		% (1)		$		% (1)		$		% (1)		$		% (1)
Commercial	$	5,279	8.8	%	$	4,627	8.7	%	$	5,403	8.3	%	$	4,026	7.9	%	$	4,225	7.8	%
Real estate	29,356		79.6	%	29,441		80.3	%	28,064		81.0	%	28,061		81.6	%	27,576		82.6	%
Consumer	3,779		11.6	%	3,124		11.0	%	3,075		10.7	%	2,987		10.5	%	2,598		9.6	%
Total	$	38,414	100.0	%	$	37,192	100.0	%	$	36,542	100.0	%	$	35,074	100.0	%	$	34,399	100.0	%

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

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Deposits

As of March 31, 2017, total deposits were $6.6 billion, an increase of $234.7 million, or 14.7% (annualized), from December 31, 2016. 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 24.0% of total interest-bearing deposits at March 31, 2017.

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

	March 31, 2017				December 31, 2016
Deposits:	Amount		% of total deposits		Amount		% of total deposits
Non-interest bearing	$	1,490,799	22.5	%	$	1,393,625	21.8	%
NOW accounts	1,792,531		27.1	%	1,765,956		27.7	%
Money market accounts	1,499,585		22.7	%	1,435,591		22.5	%
Savings accounts	602,851		9.1	%	591,742		9.3	%
Time deposits of $100,000 and over	555,431		8.4	%	530,275		8.3	%
Other time deposits	672,998		10.2	%	662,300		10.4	%
Total Deposits	$	6,614,195	100.0	%	$	6,379,489	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 March 31, 2017 and December 31, 2016, there were $2.3 million and $0, respectively, purchased certificates of deposit included in certificates of deposit on the Company’s Consolidated Balance Sheets. Maturities of time deposits as of March 31, 2017 were as follows (dollars in thousands):

	Within 3 Months		3 - 12 Months		Over 12 Months		Total
Maturities of time deposits of $100,000 and over	$	55,686	$	141,939	$	357,806	$	555,431
Maturities of other time deposits	85,461		210,769		376,768		672,998
Total time deposits	$	141,147	$	352,708	$	734,574	$	1,228,429

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.

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.

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Beginning January 1, 2016, the capital conservation buffer requirement began to be 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. As of March 31, 2017, the capital conservation buffer was 1.25% of risk-weighted assets. 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):

	March 31, 2017			December 31, 2016			March 31, 2016
Common equity Tier 1 capital	$	708,985		$	699,728		$	674,498
Tier 1 capital	799,485			790,228			764,998
Tier 2 capital	187,295			185,917			34,811
Total risk-based capital	986,780			976,145			799,809
Risk-weighted assets	7,420,280			7,200,778			6,577,394
Capital ratios:
Common equity Tier 1 capital ratio	9.55		%	9.72		%	10.25		%
Tier 1 capital ratio	10.77		%	10.97		%	11.63		%
Total capital ratio	13.30		%	13.56		%	12.16		%
Leverage ratio (Tier 1 capital to average assets)	9.79		%	9.87		%	10.25		%
Capital conservation buffer ratio (1)	4.77		%	4.97		%	4.16		%
Common equity to total assets	11.71		%	11.88		%	12.52		%
Tangible common equity to tangible assets	8.36		%	8.41		%	8.86		%

(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 results of March 31, 2017, the Company has provided supplemental performance measures on a tax-equivalent, core, or tangible basis. These measures are a supplement to GAAP used to prepare the Company's financial statements and should not be considered in isolation or as a substitute for comparable measures calculated in accordance with GAAP. In addition, the Company's non-GAAP measures may not be comparable to non-GAAP measures of other companies.

Net interest income (FTE), which is used in computing net interest margin (FTE), provides valuable additional insight into the net interest margin by adjusting for differences in tax treatment of interest income sources.

Core net interest income (FTE), which is used in computing core net interest margin (FTE), provides valuable additional insight into the net interest margin by adjusting for differences in tax treatment of interest income sources as well as the net accretion of acquisition-related fair value marks.

The Company believes tangible common equity is an important indication of its ability to grow organically and through business combinations as well as its ability to pay dividends and to engage in various capital management strategies. Tangible common equity is used in the calculation of certain profitability, capital, and per share ratios. These 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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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 March 31,
	2017			2016
Interest Income (FTE)
Interest Income (GAAP)	$	76,640		$	70,749
FTE adjustment	2,540			2,489
Interest Income FTE (non-GAAP)	79,180			73,238
Average earning assets	$	7,660,937		$	6,968,988
Yield on interest-earning assets (GAAP)	4.05		%	4.09		%
Yield on interest-earning assets (FTE) (non-GAAP)	4.19		%	4.23		%
Net Interest Income (FTE) & Core Net Interest Income (FTE)
Net Interest Income (GAAP)	$	66,567		$	63,731
FTE adjustment	2,540			2,489
Net Interest Income FTE (non-GAAP)	69,107			66,220
Less: Net accretion of acquisition fair value marks	1,493			1,146
Core Net Interest Income FTE (non-GAAP)	$	67,614		$	65,074
Average earning assets	$	7,660,937		$	6,968,988
Net interest margin (GAAP)	3.52		%	3.68		%
Net interest margin (FTE) (non-GAAP)	3.66		%	3.82		%
Core net interest margin (FTE) (non-GAAP)	3.58		%	3.76		%
Tangible Assets
Ending Assets (GAAP)	$	8,669,920		$	7,832,611
Less: Ending goodwill	298,191			293,522
Less: Ending amortizable intangibles	18,965			21,430
Ending tangible assets (non-GAAP)	$	8,352,764		$	7,517,659
Tangible Common Equity
Ending Equity (GAAP)	$	1,015,631		$	980,978
Less: Ending goodwill	298,191			293,522
Less: Ending amortizable intangibles	18,965			21,430
Ending tangible common equity (non-GAAP)	$	698,475		$	666,026
Average equity (GAAP)	$	1,010,318		$	989,414
Less: Average goodwill	298,191			293,522
Less: Average amortizable intangibles	19,743			22,330
Average tangible common equity (non-GAAP)	$	692,384		$	673,562
ROE (GAAP)	7.68		%	6.89		%
ROTCE (non-GAAP)	11.20		%	10.13		%

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

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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):

	March 31, 2017			December 31, 2016			March 31, 2016
Allowance for loan losses	$	38,414		$	37,192		$	34,399
Remaining fair value mark on acquired performing loans	16,121			16,939			19,994
Adjusted allowance for loan losses	$	54,535		$	54,131		$	54,393
Loans, net of deferred fees and costs	$	6,554,046		$	6,307,060		$	5,780,502
Remaining fair value mark on acquired performing loans	16,121			16,939			19,994
Less: PCI loans, net of fair value mark	57,770			59,292			70,105
Adjusted loans, net of deferred fees and costs	$	6,512,397		$	6,264,707		$	5,730,391
Allowance for loan losses ratio	0.59		%	0.59		%	0.60		%
Allowance for loan losses ratio, adjusted for acquisition accounting	0.84		%	0.86		%	0.95		%

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.

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. These assumptions may not materialize and unanticipated events and circumstances may occur. The model also does not take into account any future actions of management to mitigate the impact of interest rate changes. 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

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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 near 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 March 31, 2017 and 2016 (dollars in thousands):

	Change In Net Interest Income March 31,
	2017				2016
	%		$		%		$
Change in Yield Curve:
+300 basis points	14.68		44,658		5.14		14,241
+200 basis points	10.05		30,566		3.72		10,304
+100 basis points	5.21		15,861		2.05		5,683
Most likely rate scenario	—		—		—		—
-100 basis points	(5.95	)	(18,094	)	(1.77	)	(4,912	)
-200 basis points	(10.18	)	(30,968	)	(3.59	)	(9,934	)
-300 basis points	(10.78	)	(32,785	)	(3.71	)	(10,267	)

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 March 31, 2017, the Company was more asset sensitive in a rising interest rate environment scenario when compared to March 31, 2016 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.

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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 March 31, 2017 and 2016 (dollars in thousands):

	Change In Economic Value of Equity March 31,
	2017				2016
	%		$		%		$
Change in Yield Curve:
+300 basis points	3.39		49,683		(1.23	)	(16,345	)
+200 basis points	2.97		43,563		0.06		757
+100 basis points	1.98		28,998		0.55		7,341
Most likely rate scenario	—		—		—		—
-100 basis points	(4.29	)	(62,850	)	(3.31	)	(43,817	)
-200 basis points	(11.31	)	(165,668	)	(7.21	)	(95,510	)
-300 basis points	(14.70	)	(215,437	)	(6.19	)	(82,106	)

As of March 31, 2017, the Company was more sensitive to market interest rate fluctuations when compared to March 31, 2016. The Company believes that the shock down 200 or 300 basis points analysis is not as meaningful since interest rates across most of the yield curve are near historic lows and are not likely to 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.

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 necessarily 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 March 31, 2017 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, 2016.

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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 - None.

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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
3.01	Articles of Incorporation of Union Bankshares Corporation, as amended April 25, 2014 (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on April 29, 2014).
3.02	Bylaws of Union Bankshares Corporation, as amended January 21, 2017. (incorporated by reference to Exhibit 3.02 to Annual Report on Form 10-K filed on February 28, 2017).
10.30	Management Incentive Plan (incorporated by reference to Exhibit 10.30 to Annual Report on Form 10-K filed on February 28, 2017).
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 March 31, 2017 pursuant to Rule 405 of Regulation S-T (1): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income (unaudited), (iii) the Consolidated Statements of Comprehensive Income (unaudited), (iv) the Consolidated Statements of Changes in Shareholders’ Equity (unaudited), (v) the Consolidated Statements of Cash Flows (unaudited) and (vi) the Notes to the Consolidated Financial Statements (unaudited).

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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: May 9, 2017	By:	/s/ John C. Asbury
		John C. Asbury,
		President and Chief Executive Officer
		(principal executive officer)
Date: May 9, 2017	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. 333-156946, 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 May 9, 2017 relating to the unaudited consolidated interim financial statements of Union Bankshares Corporation that are included in its Form 10-Q for the quarter ended March 31, 2017.

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

May 9, 2017

EX-31.01

Exhibit 31.01

CERTIFICATIONS

I, John C. Asbury, certify that:

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

2. Based on my knowledge, this quarterly 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: May 9, 2017

/s/ John C. Asbury

John C. Asbury,

President and Chief Executive Officer

A signed original of this written statement required by Section 302 of the Sarbanes-OxleyAct 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.

EX-31.02

Exhibit 31.02

CERTIFICATIONS

I, Robert M. Gorman, certify that:

1. I have reviewed this quarterly 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: May 9, 2017

/s/ Robert M. Gorman

Robert M. Gorman,

Executive Vice President and Chief Financial Officer

A signed original of this written statement required by Section 302 of the Sarbanes-OxleyAct 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.

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 March 31, 2017 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/ John C. Asbury

John C. Asbury, President and Chief Executive Officer

May 9, 2017

/s/ Robert M. Gorman

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

May 9, 2017

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	3 Months Ended
	Mar. 31, 2017	May 03, 2017
Document and Entity Information [Abstract]
Entity Registrant Name	Union Bankshares Corp
Entity Central Index Key	0000883948
Document Type	10-Q
Document Period End Date	Mar. 31, 2017
Amendment Flag	false
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q1
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		43,677,935

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Cash and cash equivalents:
Cash and due from banks	$ 120,216	$ 120,758
Interest-bearing deposits in other banks	62,656	58,030
Federal funds sold	947	449
Total cash and cash equivalents	183,819	179,237
Securities available for sale, at fair value	953,058	946,764
Securities held to maturity, at carrying value	203,478	201,526
Restricted stock, at cost	65,402	60,782
Loans held for sale, at fair value	19,976	36,487
Loans held for investment, net of deferred fees and costs	6,554,046	6,307,060
Less allowance for loan losses	38,414	37,192
Net loans held for investment	6,515,632	6,269,868
Premises and equipment, net	122,512	122,027
Other real estate owned, net of valuation allowance	9,605	10,084
Goodwill	298,191	298,191
Amortizable intangibles, net	18,965	20,602
Bank owned life insurance	178,774	179,318
Other assets	100,508	101,907
Total assets	8,669,920	8,426,793
LIABILITIES
Noninterest-bearing demand deposits	1,490,799	1,393,625
Interest-bearing deposits	5,123,396	4,985,864
Total deposits	6,614,195	6,379,489
Securities sold under agreements to repurchase	44,587	59,281
Other short-term borrowings	522,500	517,500
Long-term borrowings	413,779	413,308
Other liabilities	59,228	56,183
Total liabilities	7,654,289	7,425,761
Commitments and contingencies
STOCKHOLDERS' EQUITY
Common stock, $1.33 par value, shares authorized 100,000,000; issued and outstanding, 43,679,947 shares and 43,609,317 shares, respectively.	57,629	57,506
Additional paid-in capital	606,078	605,397
Retained earnings	352,335	341,938
Accumulated other comprehensive income	(411)	(3,809)
Total stockholders' equity	1,015,631	1,001,032
Total liabilities and stockholders' equity	$ 8,669,920	$ 8,426,793

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CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2017	Dec. 31, 2016
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)	43,679,947	43,609,317
Common stock, shares outstanding (in shares)	43,679,947	43,609,317

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CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Interest and dividend income:
Interest and fees on loans	$ 68,084	$ 62,947
Interest on deposits in other banks	71	47
Interest and dividends on securities:
Taxable	4,923	4,316
Nontaxable	3,562	3,439
Total interest and dividend income	76,640	70,749
Interest expense:
Interest on deposits	5,077	4,195
Interest on short-term borrowings	950	623
Interest on long-term borrowings	4,046	2,200
Total interest expense	10,073	7,018
Net interest income	66,567	63,731
Provision for credit losses	2,122	2,604
Net interest income after provision for credit losses	64,445	61,127
Noninterest income:
Service charges on deposit accounts	4,829	4,734
Other service charges and fees	4,408	4,156
Fiduciary and asset management fees	2,794	2,138
Mortgage banking income, net	2,025	2,146
Gains on securities transactions, net	481	143
Bank owned life insurance income	2,125	1,372
Loan-related interest rate swap fees	1,180	662
Other operating income	997	563
Total noninterest income	18,839	15,914
Noninterest expenses:
Salaries and benefits	32,168	28,048
Occupancy expenses	4,903	4,976
Furniture and equipment expenses	2,603	2,636
Printing, postage, and supplies	1,150	1,139
Communications expense	910	1,089
Technology and data processing	3,900	3,814
Professional services	1,658	1,989
Marketing and advertising expense	1,740	1,938
FDIC assessment premiums and other insurance	706	1,362
Other taxes	2,022	1,618
Loan-related expenses	1,329	878
OREO and credit-related expenses	541	569
Amortization of intangible assets	1,637	1,880
Training and other personnel costs	969	744
Other expenses	1,159	1,592
Total noninterest expenses	57,395	54,272
Income before income taxes	25,889	22,769
Income tax expense	6,765	5,808
Net income	$ 19,124	$ 16,961
Basic earnings per common share (in usd per share)	$ 0.44	$ 0.38
Diluted earnings per common share (in usd per share)	0.44	0.38
Dividends declared per common share (in usd per share)	$ 0.20	$ 0.19
Basic weighted average number of common shares outstanding (in shares)	43,654,498	44,251,276
Diluted weighted average number of common shares outstanding (in shares)	43,725,923	44,327,229

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Statement of Comprehensive Income [Abstract]
Net income	$ 19,124	$ 16,961
Cash flow hedges:
Change in fair value of cash flow hedges	(31)	(2,681)
Reclassification adjustment for losses (gains) included in net income (net of tax, $97 and $76 for the three months ended March 31, 2017 and 2016, respectively)	180	141
AFS securities:
Unrealized holding gains (losses) arising during period (net of tax, $1,958 and $1,633 for the three months ended March 31, 2017 and 2016, respectively)	3,637	3,032
Reclassification adjustment for losses (gains) included in net income (net of tax, $168 and $50 for the three months ended March 31, 2017 and 2016, respectively)	(313)	(93)
HTM securities:
Reclassification adjustment for accretion of unrealized gain on AFS securities transferred to HTM (net of tax, $99 and $157 for the three months ended March 31, 2017 and 2016, respectively)	(184)	(292)
Bank owned life insurance:
Reclassification adjustment for losses included in net income	109	0
Net current period other comprehensive income (loss)	3,398	107
Comprehensive income	$ 22,522	$ 17,068

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Statement of Comprehensive Income [Abstract]
Tax expense (benefit) related to reclassification adjustment for losses included in net income	$ (97)	$ (76)
Tax expense (benefit) related to unrealized holding (losses) gains arising during period	1,958	1,633
Tax expense (benefit) related to (gains) losses on the sale of securities	168	50
Tax expense (benefit) related to (gains) losses for AFS securities transferred to HTM	$ 99	$ 157

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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, 2015	$ 995,367	$ 59,159	$ 631,822	$ 298,134	$ 6,252
Net income	16,961			16,961
Other comprehensive income, (net of taxes)	107				107
Dividends on common stock	(8,410)			(8,410)
Stock purchased under stock repurchase plan	(23,728)	(1,384)	(22,344)
Issuance of common stock under Equity Compensation Plans	317	29	288
Issuance of common stock for services rendered	100	6	94
Vesting of restricted stock, including tax effects, under Equity Compensation Plans	(377)	40	(417)
Stock-based compensation expense	641		641
Ending balance at Mar. 31, 2016	980,978	57,850	610,084	306,685	6,359
Beginning balance at Dec. 31, 2016	1,001,032	57,506	605,397	341,938	(3,809)
Net income	19,124			19,124
Other comprehensive income, (net of taxes)	3,398				3,398
Dividends on common stock	(8,727)			(8,727)
Issuance of common stock under Equity Compensation Plans	528	39	489
Issuance of common stock for services rendered	176	6	170
Vesting of restricted stock, including tax effects, under Equity Compensation Plans	(1,048)	78	(1,126)
Stock-based compensation expense	1,148		1,148
Ending balance at Mar. 31, 2017	$ 1,015,631	$ 57,629	$ 606,078	$ 352,335	$ (411)

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Statement of Stockholders' Equity [Abstract]
Other comprehensive income (loss), tax	$ 1,788	$ 1,502
Dividends on common stock, per share (in usd per share)	$ 0.20	$ 0.19
Stock purchased under stock repurchase plan, shares		1,040,612
Issuance of common stock under Equity Compensation Plan , shares	29,008	21,804
Issuance of common stock for services rendered, shares	4,856	4,400
Vesting of restricted stock under Equity Compensation Plans, shares	58,679	30,299

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CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Operating activities:
Net income	$ 19,124	$ 16,961
Adjustments to reconcile net income to net cash and cash equivalents provided by (used in) operating activities:
Depreciation of premises and equipment	2,645	2,511
Writedown of OREO	238	126
Amortization, net	3,396	3,421
Amortization related to acquisition, net	144	734
Provision for credit losses	2,122	2,604
Gains on securities transactions, net	(481)	(143)
Bank owned life insurance income	(2,125)	(1,372)
Decrease (increase) in loans held for sale, net	16,511	10,921
Gains on sales of other real estate owned, net	(36)	(7)
Losses on sales of premises, net	26	45
Stock-based compensation expenses	1,148	641
Issuance of common stock for services	176	100
Net decrease (increase) in other assets	2,241	(14,594)
Net increase in other liabilities	5,347	994
Net cash and cash equivalents provided by (used in) operating activities	50,476	22,942
Investing activities:
Purchases of securities available for sale and restricted stock	(53,782)	(83,735)
Purchases of securities held to maturity	(4,878)	0
Proceeds from sales of securities available for sale and restricted stock	21,306	14,532
Proceeds from maturities, calls and paydowns of securities available for sale	26,167	29,151
Proceeds from maturities, calls and paydowns of securities held to maturity	1,001	0
Net increase in loans held for investment	(246,258)	(110,513)
Net increase in premises and equipment	(3,156)	(1,885)
Proceeds from sales of other real estate owned	206	1,339
Net cash and cash equivalents provided by (used in) investing activities	(259,394)	(151,111)
Financing activities:
Net increase (decrease) in noninterest-bearing deposits	97,174	(9,694)
Net increase (decrease) in interest-bearing deposits	137,532	(8,260)
Net increase (decrease) in short-term borrowings	(9,694)	169,000
Cash paid for contingent consideration	(2,265)	0
Cash dividends paid - common stock	(8,727)	(8,410)
Repurchase of common stock	0	(23,728)
Issuance of common stock	528	317
Vesting of restricted stock, net of shares held for taxes	(1,048)	(377)
Net cash and cash equivalents provided by (used in) financing activities	213,500	118,848
Increase (decrease) in cash and cash equivalents	4,582	(9,321)
Cash and cash equivalents at beginning of the period	179,237	142,660
Cash and cash equivalents at end of the period	183,819	133,339
Cash payments for:
Interest	8,141	6,998
Income taxes	0	10,500
Supplemental schedule of noncash investing and financing activities
Transfers between loans and other real estate owned	$ (71)	$ 405

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ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2017

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 2016 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. In the third quarter of 2016, the Company finalized the valuation of certain amortizable intangible assets which increased the fair value and also impacted 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.

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. Residential 1-4 Family 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 & 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, using 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 months ended March 31, 2017 and March 31, 2016, the Company recognized amortization $223,000 and $130,000, respectively, and tax credits of $309,000 and $210,000, respectively, associated with these investments within “Income tax expense” on the Company’s Consolidated Statements of Income. The carrying value of the Company’s investments in these qualified affordable housing projects was $9.7 million and $9.9 million as of March 31, 2017 and December 31, 2016, respectively. At March 31, 2017 and December 31, 2016, the Company's recorded liability totaled $7.1 million for the related unfunded commitments, respectively, which are expected to be paid from 2017 to 2019.

Adoption of New Accounting Standards

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. The Company adopted this standard in the first quarter of 2017. The adoption of ASU 2016-09 did not have a material impact on the Company’s consolidated financial statements.

Recent Accounting Pronouncements

In January 2017, the FASB issued ASU No. 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business.” This ASU clarifies the definition of a business that appears in ASC 805, Business Combinations. Amendments narrow the definition and provide a framework for making judgments whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendment to the Business Combinations Topic is intended to address concerns that the existing definition of a business has been applied too broadly and has resulted in many transactions being recorded as business acquisitions that in substance are more akin to asset acquisitions. ASU 2017-01 is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. The Company has concluded the adoption of ASU 2017-01 will not have a material impact on its consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-03, “Accounting Changes and Error Corrections (Topic 250) and Investments—Equity Method and Joint Ventures (Topic 323): Amendments to SEC Paragraphs Pursuant to Staff Announcements at the September 22, 2016 and November 17, 2016 EITF Meetings  (SEC Update).” This ASU incorporates into the Accounting Standards Codification recent SEC guidance about disclosing, under SEC SAB Topic 11.M, the effect on financial statements of adopting the revenue, leases, and credit losses standards. ASU 2017-03 is effective upon issuance. The Company has concluded the adoption of ASU 2017-03 will not have a material impact on its consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-04, “Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” This ASU simplifies accounting for goodwill impairments by eliminating step two (the implied fair value to carrying value of goodwill) from the existing goodwill impairment test. A goodwill impairment will now be the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of the goodwill. The effective date and transition requirements for the technical corrections will be effective for the Company for reporting periods beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company has concluded the adoption of ASU 2017-04 will not have a material impact on its consolidated financial statements.

In February 2017, the FASB issued ASU No. 2017-05, “Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets.” This ASU conforms the derecognition guidance on nonfinancial assets with the model for transactions in the new revenue standard. The amendments will be effective for the Company for reporting periods beginning after December 15, 2018. The Company is currently assessing the impact ASU 2017-05 will have on its consolidated financial statements.

In March 2017, the FASB issued ASU No. 2017-08, “Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities.” This ASU focuses on the amortization period for certain purchased callable debt securities held at a premium. The amendments shorten the amortization period for the premium to the earliest call date. The amendments will be effective for the Company for interim and annual periods beginning after December 15, 2018. The Company has concluded the adoption of ASU 2017-08 will not have a material impact on its consolidated financial statements.

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SECURITIES

3 Months Ended

Mar. 31, 2017

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 March 31, 2017 and December 31, 2016 are summarized as follows (dollars in thousands):

	Amortized		Gross Unrealized					Estimated
	Cost		Gains		(Losses)			Fair Value
March 31, 2017
Obligations of states and political subdivisions	$	274,003	$	5,910	$	(2,064	)	$	277,849
Corporate bonds	112,432		775		(1,161		)	112,046
Mortgage-backed securities	548,457		4,690		(3,792		)	549,355
Other securities	13,885		—		(77		)	13,808
Total available for sale securities	$	948,777	$	11,375	$	(7,094	)	$	953,058
December 31, 2016
Obligations of states and political subdivisions	$	274,007	$	4,962	$	(3,079	)	$	275,890
Corporate bonds	123,674		892		(2,786		)	121,780
Mortgage-backed securities	536,031		4,626		(5,371		)	535,286
Other securities	13,885		—		(77		)	13,808
Total available for sale securities	$	947,597	$	10,480	$	(11,313	)	$	946,764

The following table shows the gross unrealized losses and fair value (in thousands) of the Company’s available for sale securities with unrealized losses that are not deemed to be other-than-temporarily impaired as of March 31, 2017 and December 31, 2016. 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
March 31, 2017
Obligations of states and political subdivisions	$	63,155	$	(2,001	)	$	596	$	(63	)	$	63,751	$	(2,064	)
Mortgage-backed securities	277,308		(3,414		)	38,209		(378		)	315,517		(3,792		)
Corporate bonds and other securities	28,341		(581		)	40,237		(657		)	68,578		(1,238		)
Total available for sale securities	$	368,804	$	(5,996	)	$	79,042	$	(1,098	)	$	447,846	$	(7,094	)
December 31, 2016
Obligations of states and political subdivisions	$	108,440	$	(3,007	)	$	588	$	(72	)	$	109,028	$	(3,079	)
Mortgage-backed securities	316,469		(4,979		)	42,096		(392		)	358,565		(5,371		)
Corporate bonds and other securities	47,388		(1,537		)	40,468		(1,326		)	87,856		(2,863		)
Total available for sale securities	$	472,297	$	(9,523	)	$	83,152	$	(1,790	)	$	555,449	$	(11,313	)

As of March 31, 2017, there were $79.0 million, or 30 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 $1.1 million and consisted of municipal obligations, mortgage-backed securities, and corporate bonds. As of December 31, 2016, there were $83.2 million, or 30 issues, of individual securities that had been in a continuous loss position for more than 12 months. These securities had an unrealized loss of $1.8 million and consisted of municipal obligations, mortgage-backed securities, and corporate bonds. The Company has determined that these securities are temporarily impaired as of March 31, 2017 and December 31, 2016 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 credit crisis 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 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 available for sale securities as of March 31, 2017 and December 31, 2016, 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.

	March 31, 2017				December 31, 2016
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due in one year or less	$	24,906	$	24,989	$	21,403	$	21,517
Due after one year through five years	113,890		115,757		108,198		109,778
Due after five years through ten years	284,017		286,918		300,552		301,888
Due after ten years	525,964		525,394		517,444		513,581
Total securities available for sale	$	948,777	$	953,058	$	947,597	$	946,764

For information regarding 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 March 31, 2017 and December 31, 2016, see Note 6 "Commitments and Contingencies".

Held to Maturity

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 or 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 March 31, 2017 and December 31, 2016 are summarized as follows (dollars in thousands):

	Carrying		Gross Unrealized					Estimated
	Value (1)		Gains		(Losses)			Fair Value
March 31, 2017
Obligations of states and political subdivisions	$	203,478	$	2,409	$	(276	)	$	205,611
December 31, 2016
Obligations of states and political subdivisions	$	201,526	$	1,617	$	(828	)	$	202,315

(1) The carrying value includes $4.8 million as of March 31, 2017 and $5.2 million as of December 31, 2016 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 March 31, 2017 and December 31, 2016. 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
March 31, 2017
Obligations of states and political subdivisions	$	34,558	$	(244	)	$	648	$	(32	)	$	35,206	$	(276	)
December 31, 2016
Obligations of states and political subdivisions	$	92,841	$	(747	)	$	648	$	(81	)	$	93,489	$	(828	)

As of March 31, 2017, there was $648,000, 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 $32,000, respectively. As of December 31, 2016, there was $648,000, 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. The Company has determined that these securities in a loss position are temporarily impaired as of March 31, 2017 and December 31, 2016 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 credit crisis 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 March 31, 2017 and December 31, 2016, 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.

	March 31, 2017				December 31, 2016
	Carrying Value (1)		Estimated Fair Value		Carrying Value (1)		Estimated Fair Value
Due in one year or less	$	4,108	$	4,140	$	4,403	$	4,440
Due after one year through five years	30,050		30,503		28,383		28,763
Due after five years through ten years	62,127		62,485		51,730		51,522
Due after ten years	107,193		108,483		117,010		117,590
Total securities held to maturity	$	203,478	$	205,611	$	201,526	$	202,315

(1)The carrying value includes $4.8 million as of March 31, 2017 and $5.2 million as of December 31, 2016 of net unrealized gains present at the time of transfer from available for sale securities, net of any accretion.

For information regarding the estimated fair value of held to maturity securities which were pledged to secure public deposits as permitted or required by law as of March 31, 2017 and December 31, 2016, see Note 6 "Commitments and Contingencies".

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 March 31, 2017 and December 31, 2016, 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 March 31, 2017 and December 31, 2016. Restricted equity securities consist of Federal Reserve Bank stock in the amount of $27.6 million and $23.8 million for March 31, 2017 and December 31, 2016 and FHLB stock in the amount of $37.8 million and $37.0 million as of March 31, 2017 and December 31, 2016, 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 months ended March 31, 2017, 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 and the proceeds from the sale of securities during the three months ended March 31, 2017 and 2016 (dollars in thousands).

	Three Months Ended March 31, 2017		Three Months Ended March 31, 2016
Realized gains (losses):
Gross realized gains	$	481	$	239
Gross realized losses	—		(96		)
Net realized gains	$	481	$	143
Proceeds from sales of securities	$	21,306	$	14,532

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LOANS AND ALLOWANCE FOR LOAN LOSSES

3 Months Ended

Mar. 31, 2017

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 March 31, 2017 and December 31, 2016 (dollars in thousands):

	March 31, 2017		December 31, 2016
Construction and Land Development	$	770,287	$	751,131
Commercial Real Estate - Owner Occupied	870,559		857,805
Commercial Real Estate - Non-Owner Occupied	1,631,767		1,564,295
Multifamily Real Estate	353,769		334,276
Commercial & Industrial	576,567		551,526
Residential 1-4 Family	1,057,439		1,029,547
Auto	271,466		262,071
HELOC	527,863		526,884
Consumer and all other	494,329		429,525
Total loans held for investment, net(1)	$	6,554,046	$	6,307,060

(1)Loans, as presented, are net of deferred fees and costs totaling $768,000 and $1.8 million as of March 31, 2017 and December 31, 2016, respectively.

The following table shows the aging of the Company’s loan portfolio, by segment, at March 31, 2017 (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	$	630	$	376	$	16	$	2,776	$	6,545	$	759,944	$	770,287
Commercial Real Estate - Owner Occupied	878		—		93		18,199		1,298		850,091		870,559
Commercial Real Estate - Non-Owner Occupied	1,487		—		711		16,725		2,798		1,610,046		1,631,767
Multifamily Real Estate	—		—		—		2,058		—		351,711		353,769
Commercial & Industrial	453		126		—		733		3,245		572,010		576,567
Residential 1-4 Family	11,615		2,104		686		15,910		5,856		1,021,268		1,057,439
Auto	1,534		250		11		—		393		269,278		271,466
HELOC	1,490		365		680		1,156		1,902		522,270		527,863
Consumer and all other	1,766		1,460		126		213		301		490,463		494,329
Total loans held for investment	$	19,853	$	4,681	$	2,323	$	57,770	$	22,338	$	6,447,081	$	6,554,046

The following table shows the aging of the Company’s loan portfolio, by segment, at December 31, 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	$	1,162	$	232	$	76	$	2,922	$	2,037	$	744,702	$	751,131
Commercial Real Estate - Owner Occupied	1,842		109		35		18,343		794		836,682		857,805
Commercial Real Estate - Non-Owner Occupied	2,369		—		—		17,303		—		1,544,623		1,564,295
Multifamily Real Estate	147		—		—		2,066		—		332,063		334,276
Commercial & Industrial	759		858		9		1,074		124		548,702		551,526
Residential 1-4 Family	7,038		534		2,048		16,200		5,279		998,448		1,029,547
Auto	2,570		317		111		—		169		258,904		262,071
HELOC	1,836		1,140		635		1,161		1,279		520,833		526,884
Consumer and all other	2,522		1,431		91		223		291		424,967		429,525
Total loans held for investment	$	20,245	$	4,621	$	3,005	$	59,292	$	9,973	$	6,209,924	$	6,307,060

The following table shows the PCI loan portfolios, by segment and their delinquency status, at March 31, 2017 (dollars in thousands):

	30-89 Days Past Due		Greater than 90 Days		Current		Total
Construction and Land Development	$	72	$	—	$	2,704	$	2,776
Commercial Real Estate - Owner Occupied	902		317		16,980		18,199
Commercial Real Estate - Non-Owner Occupied	303		1,025		15,397		16,725
Multifamily Real Estate	—		—		2,058		2,058
Commercial & Industrial	—		12		721		733
Residential 1-4 Family	1,491		1,057		13,362		15,910
HELOC	120		114		922		1,156
Consumer and all other	—		—		213		213
Total	$	2,888	$	2,525	$	52,357	$	57,770

The following table shows the PCI loan portfolios, by segment and their delinquency status, at December 31, 2016 (dollars in thousands):

	30-89 Days Past Due		Greater than 90 Days		Current		Total
Construction and Land Development	$	—	$	84	$	2,838	$	2,922
Commercial Real Estate - Owner Occupied	271		519		17,553		18,343
Commercial Real Estate - Non-Owner Occupied	409		126		16,768		17,303
Multifamily Real Estate	—		—		2,066		2,066
Commercial & Industrial	44		56		974		1,074
Residential 1-4 Family	1,298		945		13,957		16,200
HELOC	175		121		865		1,161
Consumer and all other	—		—		223		223
Total	$	2,197	$	1,851	$	55,244	$	59,292

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 March 31, 2017 and December 31, 2016 (dollars in thousands):

	March 31, 2017						December 31, 2016
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
Loans without a specific allowance
Construction and Land Development	$	11,290	$	11,775	$	—	$	13,877	$	14,353	$	—
Commercial Real Estate - Owner Occupied	6,120		6,285		—		5,886		6,042		—
Commercial Real Estate - Non-Owner Occupied	2,825		2,825		—		1,399		1,399		—
Commercial & Industrial	949		949		—		648		890		—
Residential 1-4 Family	9,541		10,515		—		8,496		9,518		—
HELOC	1,443		1,535		—		1,017		1,094		—
Consumer and all other	113		223		—		230		427		—
Total impaired loans without a specific allowance	$	32,281	$	34,107	$	—	$	31,553	$	33,723	$	—
Loans with a specific allowance
Construction and Land Development	$	6,011	$	6,018	$	729	$	1,395	$	1,404	$	107
Commercial Real Estate - Owner Occupied	639		639		3		646		646		4
Commercial Real Estate - Non-Owner Occupied	8,691		8,739		745		2,809		2,809		474
Commercial & Industrial	5,151		5,442		617		857		880		14
Residential 1-4 Family	3,243		3,414		393		3,335		3,535		200
Auto	393		506		1		169		235		1
HELOC	757		881		20		323		433		15
Consumer and all other	189		516		7		62		298		1
Total impaired loans with a specific allowance	$	25,074	$	26,155	$	2,515	$	9,596	$	10,240	$	816
Total impaired loans	$	57,355	$	60,262	$	2,515	$	41,149	$	43,963	$	816

The following table shows 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 months ended March 31, 2017 and 2016 (dollars in thousands):

	Three Months Ended March 31, 2017				Three Months Ended March 31, 2016
	Average Investment		Interest Income Recognized		Average Investment		Interest Income Recognized
Construction and Land Development	$	17,179	$	139	$	30,569	$	484
Commercial Real Estate - Owner Occupied	6,793		64		16,510		157
Commercial Real Estate - Non-Owner Occupied	11,540		108		4,214		41
Multifamily Real Estate	—		—		3,817		60
Commercial & Industrial	6,830		36		3,663		37
Residential 1-4 Family	13,047		73		15,301		106
Auto	477		1		218		—
HELOC	2,366		4		2,933		21
Consumer and all other	303		—		982		6
Total impaired loans	$	58,535	$	425	$	78,207	$	912

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 months ended March 31, 2017, 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 TDRs that continue to accrue interest under the terms of the restructuring agreement, which are considered to be performing, and TDRs that have been placed on nonaccrual status, which are considered to be nonperforming, as of March 31, 2017 and December 31, 2016 (dollars in thousands):

	March 31, 2017					December 31, 2016
	No. of Loans	Recorded Investment		Outstanding Commitment		No. of Loans	Recorded Investment		Outstanding Commitment
Performing
Construction and Land Development	6	$	3,422	$	—	8	$	3,793	$	—
Commercial Real Estate - Owner Occupied	6	2,605		—		7	3,106		—
Commercial Real Estate - Non-Owner Occupied	2	1,637		—		2	2,390		—
Commercial & Industrial	10	1,993		—		3	533		—
Residential 1-4 Family	31	4,668		—		28	4,145		—
Total performing	55	$	14,325	$	—	48	$	13,967	$	—
Nonperforming
Construction and Land Development	4	$	540	$	—	2	$	215	$	—
Commercial Real Estate - Owner Occupied	3	624		—		2	156		—
Commercial Real Estate - Non-Owner Occupied	2	2,390		—		—	—		—
Commercial & Industrial	1	104		—		1	116		—
Residential 1-4 Family	10	741		—		8	948		—
Total nonperforming	20	$	4,399	$	—	13	$	1,435	$	—
Total performing and nonperforming	75	$	18,724	$	—	61	$	15,402	$	—

The Company considers a default of a TDR 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 months ended March 31, 2017 and 2016, the Company did not identify any TDRs 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 months ended March 31, 2017 and 2016 (dollars in thousands):

	Three Months Ended March 31, 2017			Three Months Ended March 31, 2016
	No. of Loans	Recorded  Investment at Period End		No. of Loans	Recorded  Investment at Period End
Modified to interest only, at a market rate
Commercial & Industrial	5	$	661	—	$	—
Total interest only at market rate of interest	5	$	661	—	$	—
Term modification, at a market rate
Commercial Real Estate - Owner Occupied	—	$	—	1	$	709
Commercial Real Estate - Non-Owner Occupied	2	1,637		—	—
Commercial & Industrial	2	836		—	—
Residential 1-4 Family	3	380		1	378
Total loan term extended at a market rate	7	$	2,853	2	$	1,087
Term modification, below market rate
Commercial & Industrial	2	$	128	—	$	—
Residential 1-4 Family	4	865		—	—
Total loan term extended at a below market rate	6	$	993	—	$	—
Total	18	$	4,507	2	$	1,087

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 three months ended and as of March 31, 2017. The table below includes the provision for loan losses. In addition, a $112,000 provision was recognized during the three months ended March 31, 2017 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	$	10,055	$	37	$	(45	)	$	(496	)	$	9,551
Commercial Real Estate - Owner Occupied	3,801		20		—			(600		)	3,221
Commercial Real Estate - Non-Owner Occupied	6,622		—		—			640			7,262
Multifamily Real Estate	1,236		—		—			198			1,434
Commercial & Industrial	4,627		139		(241		)	754			5,279
Residential 1-4 Family	6,399		128		(135		)	227			6,619
Auto	946		108		(248		)	139			945
HELOC	1,328		88		(194		)	47			1,269
Consumer and all other	2,178		325		(770		)	1,101			2,834
Total	$	37,192	$	845	$	(1,633	)	$	2,010		$	38,414

	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	$	17,301	$	729	$	750,210	$	8,822	$	2,776	$	—	$	770,287	$	9,551
Commercial Real Estate - Owner Occupied	6,759		3		845,601		3,218		18,199		—		870,559		3,221
Commercial Real Estate - Non-Owner Occupied	11,516		745		1,603,526		6,517		16,725		—		1,631,767		7,262
Multifamily Real Estate	—		—		351,711		1,434		2,058		—		353,769		1,434
Commercial & Industrial	6,100		617		569,734		4,662		733		—		576,567		5,279
Residential 1-4 Family	12,784		393		1,028,745		6,226		15,910		—		1,057,439		6,619
Auto	393		1		271,073		944		—		—		271,466		945
HELOC	2,200		20		524,507		1,249		1,156		—		527,863		1,269
Consumer and all other	302		7		493,814		2,827		213		—		494,329		2,834
Total loans held for investment, net	$	57,355	$	2,515	$	6,438,921	$	35,899	$	57,770	$	—	$	6,554,046	$	38,414

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 three months ended and as of March 31, 2016. In addition, a $100,000 provision was recognized during the three months ended March 31, 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	$	19	$	(93	)	$	5,055		$	11,021
Commercial Real Estate - Owner Occupied	4,614		46		(772		)	(477		)	3,411
Commercial Real Estate - Non-Owner Occupied	6,929		—		—			(2,445		)	4,484
Multifamily Real Estate	1,606		—		—			(204		)	1,402
Commercial & Industrial	3,163		238		(617		)	1,441			4,225
Residential 1-4 Family	5,414		243		(153		)	471			5,975
Auto	1,703		84		(365		)	(615		)	807
HELOC	2,934		83		(409		)	(1,325		)	1,283
Consumer and all other	1,644		115		(571		)	603			1,791
Total	$	34,047	$	828	$	(2,980	)	$	2,504		$	34,399

	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	$	30,779	$	500	$	740,782	$	10,521	$	5,137	$	—	$	776,698	$	11,021
Commercial Real Estate - Owner Occupied	16,026		81		805,916		3,330		27,260		—		849,202		3,411
Commercial Real Estate - Non-Owner Occupied	4,203		1		1,278,412		4,483		13,636		—		1,296,251		4,484
Multifamily Real Estate	3,803		—		317,335		1,402		2,132		—		323,270		1,402
Commercial & Industrial	3,301		467		448,336		3,758		1,571		—		453,208		4,225
Residential 1-4 Family	14,558		414		945,615		5,561		18,305		—		978,478		5,975
Auto	162		1		241,575		806		—		—		241,737		807
HELOC	2,833		28		512,754		1,255		1,535		—		517,122		1,283
Consumer and all other	769		1		343,238		1,790		529		—		344,536		1,791
Total loans held for investment, net	$	76,434	$	1,493	$	5,633,963	$	32,906	$	70,105	$	—	$	5,780,502	$	34,399

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 March 31, 2017 (dollars in thousands):

	Pass		Special Mention		Substandard		Doubtful		Total
Construction and Land Development	$	684,967	$	68,650	$	13,803	$	91	$	767,511
Commercial Real Estate - Owner Occupied	816,462		30,379		5,519		—		852,360
Commercial Real Estate - Non-Owner Occupied	1,571,645		32,064		11,333		—		1,615,042
Multifamily Real Estate	330,970		20,741		—		—		351,711
Commercial & Industrial	560,889		10,158		4,787		—		575,834
Residential 1-4 Family	1,012,281		22,382		4,323		2,543		1,041,529
Auto	269,081		2,016		217		152		271,466
HELOC	521,624		2,996		1,257		830		526,707
Consumer and all other	491,625		2,209		16		266		494,116
Total	$	6,259,544	$	191,595	$	41,255	$	3,882	$	6,496,276

The following table shows the recorded investment in all loans, excluding PCI loans, by segment with their related risk level as of December 31, 2016 (dollars in thousands):

	Pass		Special Mention		Substandard		Doubtful		Total
Construction and Land Development	$	667,018	$	69,311	$	11,857	$	23	$	748,209
Commercial Real Estate - Owner Occupied	801,565		32,364		5,533		—		839,462
Commercial Real Estate - Non-Owner Occupied	1,505,153		37,631		4,208		—		1,546,992
Multifamily Real Estate	312,711		19,499		—		—		332,210
Commercial & Industrial	539,999		9,391		1,062		—		550,452
Residential 1-4 Family	986,973		18,518		4,813		3,043		1,013,347
Auto	258,188		3,648		135		100		262,071
HELOC	519,928		4,225		969		601		525,723
Consumer and all other	425,520		3,491		40		251		429,302
Total	$	6,017,055	$	198,078	$	28,617	$	4,018	$	6,247,768

The following table shows the recorded investment in only PCI loans by segment with their related risk level as of March 31, 2017 (dollars in thousands):

	Pass		Special Mention		Substandard		Doubtful		Total
Construction and Land Development	$	1,096	$	1,394	$	286	$	—	$	2,776
Commercial Real Estate - Owner Occupied	5,417		8,902		3,880		—		18,199
Commercial Real Estate - Non-Owner Occupied	11,014		4,323		1,388		—		16,725
Multifamily Real Estate	342		1,716		—		—		2,058
Commercial & Industrial	98		360		275		—		733
Residential 1-4 Family	8,079		4,740		2,301		790		15,910
HELOC	915		128		—		113		1,156
Consumer and all other	161		52		—		—		213
Total	$	27,122	$	21,615	$	8,130	$	903	$	57,770

The following table shows the recorded investment in only PCI loans by segment with their related risk level as of December 31, 2016 (dollars in thousands):

	Pass		Special Mention		Substandard		Doubtful		Total
Construction and Land Development	$	1,092	$	1,432	$	398	$	—	$	2,922
Commercial Real Estate - Owner Occupied	5,520		8,889		3,934		—		18,343
Commercial Real Estate - Non-Owner Occupied	10,927		4,638		1,738		—		17,303
Multifamily Real Estate	343		1,723		—		—		2,066
Commercial & Industrial	107		480		487		—		1,074
Residential 1-4 Family	8,557		4,455		2,672		516		16,200
HELOC	857		183		7		114		1,161
Consumer and all other	166		37		20		—		223
Total	$	27,569	$	21,837	$	9,256	$	630	$	59,292

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 Three Months Ended March 31,
	2017			2016
Balance at beginning of period	$	19,739		$	22,139
Accretion	(1,511		)	(1,390		)
Reclass of nonaccretable difference due to improvement in expected cash flows	1,680			1,266
Other, net (1)	(908		)	(1,510		)
Balance at end of period	$	19,000		$	20,505

(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 $57.8 million at March 31, 2017 and $59.3 million at December 31, 2016. The outstanding balance of the Company’s PCI loan portfolio totaled $71.5 million at March 31, 2017 and $73.6 million at December 31, 2016. The carrying value of the Company’s acquired performing loan portfolio, accounted for under ASC 310-20, Receivables – Nonrefundable Fees and Other Costs, totaled $1.0 billion at March 31, 2017 and $1.1 billion at December 31, 2016; the remaining discount on these loans totaled $16.1 million at March 31, 2017 and $16.9 million at December 31, 2016.

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INTANGIBLE ASSETS

3 Months Ended

Mar. 31, 2017

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 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. Other amortizable intangible assets are being amortized over the period of expected benefit, which ranges from 5 to 10 years, using a straight-line method.

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.

Information concerning intangible assets with a finite life is presented in the following table (dollars in thousands):

	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
March 31, 2017
Amortizable core deposit intangibles	$	62,853	$	47,990	$	14,863
Other amortizable intangibles	4,502		400		4,102
December 31, 2016
Amortizable core deposit intangibles	$	68,367	$	51,987	$	16,380
Other amortizable intangibles	4,502		280		4,222
March 31, 2016
Amortizable core deposit intangibles	$	76,185	$	54,755	$	21,430

Amortization expense of core deposit intangibles for the three months ended March 31, 2017 and 2016 totaled $1.5 million and $1.9 million, respectively. Amortization expense of other intangibles for both the three months ended March 31, 2017 and 2016 totaled $120,000 and $0, respectively. As of March 31, 2017, the estimated remaining amortization expense of intangibles is as follows (dollars in thousands):

For the remaining nine months of 2017	$	4,433
For the year ending December 31, 2018	4,625
For the year ending December 31, 2019	3,573
For the year ending December 31, 2020	2,509
For the year ending December 31, 2021	1,481
Thereafter	2,344
Total estimated amortization expense	$	18,965

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BORROWINGS

3 Months Ended

Mar. 31, 2017

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 March 31, 2017 and December 31, 2016 (dollars in thousands):

	March 31, 2017			December 31, 2016
Securities sold under agreements to repurchase	$	44,587		$	59,281
Other short-term borrowings	522,500			517,500
Total short-term borrowings	$	567,087		$	576,781
Maximum month-end outstanding balance	$	634,750		$	678,262
Average outstanding balance during the period	573,116			590,074
Average interest rate (year-to-date)	0.67		%	0.49		%
Average interest rate at end of period	0.71		%	0.60		%
Other short-term borrowings:
FHLB	522,500			517,500
Other lines of credit	—			—

The Bank maintains federal funds lines with several correspondent banks; the remaining available balance was $175.0 million at both March 31, 2017 and December 31, 2016. The Company maintains an alternate line of credit at a correspondent bank, the available balance was $25.0 million at both March 31, 2017 and December 31, 2016. 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 $2.5 billion and $2.4 billion at March 31, 2017 and December 31, 2016, 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 $6.7 million at March 31, 2017. 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	%	3.90	%	6/17/2034
Trust Preferred Capital Note - Statutory Trust II	36,000,000		1,114,000		1.40	%	2.55	%	6/15/2036
VFG Limited Liability Trust I Indenture	20,000,000		619,000		2.73	%	3.88	%	3/18/2034
FNB Statutory Trust II Indenture	12,000,000		372,000		3.10	%	4.25	%	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.

During the fourth quarter of 2016, the Company issued $150.0 million of fixed-to-floating rate subordinated notes with an initial fixed interest rate of 5.00% through December 15, 2021. The interest rate then changes to a floating rate of LIBOR plus 3.175% through its maturity date in December 15, 2026. At March 31, 2017 and December 31, 2016 the carrying value of the subordinated debt was $150.0 million, with a remaining discount of $2.0 million, respectively.

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 on 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 on the Company’s Consolidated Statements of Income. Amortization expense for the three months ended March 31, 2017 and 2016 was $470,000 and $463,000, respectively.

In connection with the StellarOne acquisition, the Company assumed $70.0 million in long-term borrowings with the FHLB of which there is $20.0 million remaining at March 31, 2017 that had a remaining fair value premium of $448,000.

As of March 31, 2017, 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	%	1.59	%	8/23/2022	$	55,000
Adjustable Rate Credit	0.45	%	1.60	%	11/23/2022	65,000
Adjustable Rate Credit	0.45	%	1.60	%	11/23/2022	10,000
Adjustable Rate Credit	0.45	%	1.60	%	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	—		0.99	%	10/19/2018	30,000
						$	190,000
(1)Interest rates calculated using non-rounded numbers.

As of December 31, 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	%	1.44	%	8/23/2022	$	55,000
Adjustable Rate Credit	0.45	%	1.45	%	11/23/2022	65,000
Adjustable Rate Credit	0.45	%	1.45	%	11/23/2022	10,000
Adjustable Rate Credit	0.45	%	1.45	%	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	—		0.99	%	10/19/2018	30,000
						$	190,000
(1)Interest rates calculated using non-rounded numbers.

For information on the carrying value of loans and securities pledged as collateral on FHLB advances as of March 31, 2017 and December 31, 2016, refer to Note 6 "Commitments and Contingencies".

As of March 31, 2017, the contractual maturities of long-term debt are as follows for the years ending (dollars in thousands):

	Trust Preferred Capital Notes		Subordinated Debt		FHLB Advances		Fair Value  Premium (Discount)			Prepayment Penalty			Total Long-term Borrowings
For the remaining nine months of 2017	$	—	$	—	$	10,000	$	(28	)	$	(1,452	)	$	8,520
2018	—		—		40,000		(343		)	(1,970		)	37,687
2019	—		—		—		(486		)	(2,018		)	(2,504		)
2020	—		—		—		(501		)	(2,074		)	(2,575		)
2021	—		—		—		(516		)	(2,119		)	(2,635		)
Thereafter	93,301		150,000		140,000		(6,308		)	(1,707		)	375,286
Total Long-term borrowings	$	93,301	$	150,000	$	190,000	$	(8,182	)	$	(11,340	)	$	413,779

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COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2017

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 on 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 the 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. As of March 31, 2017 and December 31, 2016, the Company's reserve for off-balance sheet credit risk was $700,000 and $725,000, respectively, and is reported as a component of "Other Liabilities" on the Company's Consolidated Balance Sheets.

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.

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

	March 31, 2017		December 31, 2016
Commitments with off-balance sheet risk:
Commitments to extend credit (1)	$	1,912,830	$	1,924,885
Standby letters of credit	110,525		84,212
Total commitments with off-balance sheet risk	$	2,023,355	$	2,009,097

(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 March 31, 2017 and December 31, 2016, the aggregate amount of daily average required reserves was approximately $59.0 million and $54.5 million, respectively, and were satisfied by vault cash holdings and deposits maintained with the Federal Reserve Bank.

As of March 31, 2017, the Company had approximately $32.6 million in deposits in other financial institutions, of which $14.6 million serves as collateral for cash flow and loan swap derivatives. The Company had approximately $16.7 million in deposits in other financial institutions that were uninsured at March 31, 2017. At least annually, 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.

The Company records an indemnification reserve that includes balances relating to the previously sold credit card portfolio and to mortgage loans previously sold based on historical statistics and loss rates; as of March 31, 2017 and December 31, 2016, the Company’s indemnification reserve was approximately $503,000 and $379,000, respectively.

As part of the Company's liquidity management strategy, it pledges collateral to secure various financing and other activities that occur during the normal course of business. The following tables present the types of collateral pledged, at March 31, 2017 and December 31, 2016 (dollars in thousands):

	Pledged Assets as of March 31, 2017
	Cash		AFS Securities(1)		HTM Securities(1)		Loans(2)		Total
Public deposits	$	—	$	211,737	$	199,208	$	—	$	410,945
Repurchase agreements	—		103,721		—		—		103,721
FHLB advances	—		1,316		—		2,033,085		2,034,401
Derivatives	14,608		4,237		—		—		18,845
Other purposes	—		16,567		—		—		16,567
Total pledged assets	$	14,608	$	337,578	$	199,208	$	2,033,085	$	2,584,479

	Pledged Assets as of December 31, 2016
	Cash		AFS Securities(1)		HTM Securities(1)		Loans(2)		Total
Public deposits	$	—	$	210,546	$	197,889	$	—	$	408,435
Repurchase agreements	—		108,208		—		—		108,208
FHLB advances	—		1,475		—		1,959,929		1,961,404
Derivatives	33,595		4,376		—		—		37,971
Other purposes	—		17,499		—		—		17,499
Total pledged assets	$	33,595	$	342,104	$	197,889	$	1,959,929	$	2,533,517

(1) Balance represents market value.

(2) Balance represents book value.

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DERIVATIVES

3 Months Ended

Mar. 31, 2017

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. The original terms and conditions of the interest rate swaps vary and range in length with a maximum hedging time through November 2022. Amounts receivable or payable are recognized as accrued under the terms of the agreements.

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 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 on 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 by March 31, 2018 is $386,000.

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 March 31, 2017 and December 31, 2016, the aggregate notional amount of the related hedged items totaled $78.7 million and $65.9 million, respectively, and the fair value of the related hedged items was an unrealized loss of $1.1 million and $890,000, 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 on 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 on 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 with fair values as reported in “Other Assets” and “Other Liabilities” on 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” on 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” on the Company’s Consolidated Balance Sheets. Any impact to income is recorded in current period earnings as a component of “Mortgage banking income, net” on the Company’s Consolidated Statements of Income.

The following table summarizes key elements of the Company’s derivative instruments as of March 31, 2017 and December 31, 2016, segregated by derivatives that are considered accounting hedges and those that are not (dollars in thousands):

	March 31, 2017							December 31, 2016
			Derivative (2)							Derivative (2)
	Notional or Contractual Amount (1)			Assets		Liabilities		Notional or Contractual Amount (1)			Assets		Liabilities
Derivatives designated as accounting hedges:
Interest rate contracts:
Cash flow hedges	$	188,500		$	167	$	9,354	$	188,500		$	211	$	9,619
Fair value hedges	78,701			1,549		138		65,920			1,437		296
Derivatives not designated as accounting hedges:
Loan Swaps
Pay fixed - receive floating interest rate swaps	429,485			—		897		373,355			—		1,005
Pay floating - receive fixed interest rate swaps	429,485			897		—		373,355			1,005		—
Other contracts:
Interest rate lock commitments	67,825			1,251		—		48,743			610		—
Best efforts forward delivery commitments	87,283			—		111		85,400			1,469		—

(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.

For information regarding collateral pledged on derivative instruments, see Note 6 "Commitments and Contingencies".

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

3 Months Ended

Mar. 31, 2017

Equity [Abstract]

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The change in accumulated other comprehensive income (loss) for the three months ended March 31, 2017 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			Unrealized Gains (Losses) on BOLI			Total
Balance - December 31, 2016	$	(542	)	$	3,377		$	(5,179	)	$	(1,465	)	$	(3,809	)
Other comprehensive income (loss)	3,637			—			(31		)	—			3,606
Amounts reclassified from accumulated other comprehensive income	(313		)	(184		)	180			109			(208		)
Net current period other comprehensive income (loss)	3,324			(184		)	149			109			3,398
Balance - March 31, 2017	$	2,782		$	3,193		$	(5,030	)	$	(1,356	)	$	(411	)

The change in accumulated other comprehensive income (loss) for the three months ended March 31, 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 - December 31, 2015	$	7,777		$	4,432		$	(5,957	)	$	6,252
Other comprehensive income (loss)	3,032			(292		)	(2,681		)	59
Amounts reclassified from accumulated other comprehensive income	(93		)	—			141			48
Net current period other comprehensive income (loss)	2,939			(292		)	(2,540		)	107
Balance - March 31, 2016	$	10,716		$	4,140		$	(8,497	)	$	6,359

Reclassifications of unrealized gains (losses) on available for sale securities are reported on 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 $481,000 and $143,000 for the three months ended March 31, 2017 and 2016, respectively, related to the sale of securities. The tax effects of these transactions during the three months ended March 31, 2017 and 2016 were $168,000 and $50,000, respectively, which amounts were included as a component of income tax expense.

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 securities included net pre-tax unrealized gains of $8.1 million at the date of transfer. Reclassifications of the unrealized gains on transferred securities are reported over time as accretion within interest income on the Company's Consolidated Statements of Income with the corresponding income tax effect being reflected as a component of income tax expense. The Company recorded accretion of $283,000 and $449,000 for the three months ended March 31, 2017 and 2016, respectively. The tax effect of these transactions during the three months ended March 31, 2017 and 2016 were $99,000 and $157,000, respectively, which 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 on 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 $277,000 and $217,000 for the three months ended March 31, 2017 and 2016, respectively. The tax effects of these transactions during the three months ended March 31, 2017 and 2016 were $97,000 and $76,000, respectively, which were included as a component of income tax expense.

Reclassifications of unrealized losses on BOLI are reported in salaries and benefits expense on the Company's Consolidated Statements of Income. The Company reported expenses of $109,000 and $0 for the three months ended March 31, 2017 and 2016, respectively.

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FAIR VALUE MEASUREMENTS

3 Months Ended

Mar. 31, 2017

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. This value, however, 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 March 31, 2017 and December 31, 2016. As of March 31, 2017, 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 March 31, 2017 and December 31, 2016.

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 on 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 March 31, 2017 and December 31, 2016 (dollars in thousands):

	Fair Value Measurements at March 31, 2017 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	$	—	$	277,849	$	—	$	277,849
Corporate and other bonds	—		112,046		—		112,046
Mortgage-backed securities	—		549,355		—		549,355
Other securities	—		13,808		—		13,808
Loans held for sale	—		19,976		—		19,976
Derivatives:
Interest rate swap	—		897		—		897
Cash flow hedges	—		167		—		167
Fair value hedges	—		1,549		—		1,549
Interest rate lock commitments	—		—		1,251		1,251
LIABILITIES
Derivatives:
Interest rate swap	$	—	$	897	$	—	$	897
Cash flow hedges	—		9,354		—		9,354
Fair value hedges	—		138		—		138
Best efforts forward delivery commitments	—		—		111		111

	Fair Value Measurements at December 31, 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	$	—	$	275,890	$	—	$	275,890
Corporate and other bonds	—		121,780		—		121,780
Mortgage-backed securities	—		535,286		—		535,286
Other securities	—		13,808		—		13,808
Loans held for sale	—		36,487		—		36,487
Derivatives:
Interest rate swap	—		1,005		—		1,005
Cash flow hedges	—		211		—		211
Fair value hedges	—		1,437		—		1,437
Interest rate lock commitments	—		—		610		610
Best efforts forward delivery commitments	—		—		1,469		1,469
LIABILITIES
Derivatives:
Interest rate swap	$	—	$	1,005	$	—	$	1,005
Cash flow hedges	—		9,619		—		9,619
Fair value hedges	—		296		—		296

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 three and twelve month periods ending March 31, 2017 and December 31, 2016, the Level 3 weighted average adjustments related to impaired loans were 1.2% and 1.5%, 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 three and twelve month periods ending March 31, 2017 and December 31, 2016, the Level 3 weighted average adjustments related to OREO were approximately 25.6% and 25.1%, respectively.

Total valuation expenses related to OREO properties for the three months ended March 31, 2017 and 2016 totaled $238,000 and $126,000, respectively.

The following tables summarize the Company’s financial assets that were measured at fair value on a nonrecurring basis at March 31, 2017 and December 31, 2016 (dollars in thousands):

	Fair Value Measurements at March 31, 2017 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	$	—	$	—	$	18,097	$	18,097
Other real estate owned	—		—		9,605		9,605

	Fair Value Measurements at December 31, 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	$	—	$	—	$	4,344	$	4,344
Other real estate owned	—		—		10,084		10,084

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 March 31, 2017 and December 31, 2016.

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 Valuation Service’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 March 31, 2017 and December 31, 2016 are as follows (dollars in thousands):

			Fair Value Measurements at March 31, 2017 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	$	183,819	$	183,819	$	—	$	—	$	183,819
Securities available for sale	953,058		—		953,058		—		953,058
Held to maturity securities	203,478		—		205,611		—		205,611
Restricted stock	65,402		—		65,402		—		65,402
Loans held for sale	19,976		—		19,976		—		19,976
Net loans	6,515,632		—		—		6,518,399		6,518,399
Derivatives:
Interest rate swap	897		—		897		—		897
Cash flow hedge	167		—		167		—		167
Fair value hedge	1,549		—		1,549		—		1,549
Interest rate lock commitments	1,251		—		—		1,251		1,251
Accrued interest receivable	23,458		—		23,458		—		23,458
Bank owned life insurance	178,774		—		178,774		—		178,774
LIABILITIES
Deposits	$	6,614,195	$	—	$	6,605,551	$	—	$	6,605,551
Borrowings	980,866		—		960,830		—		960,830
Accrued interest payable	4,209		—		4,209		—		4,209
Derivatives:
Interest rate swap	897		—		897		—		897
Cash flow hedges	9,354		—		9,354		—		9,354
Fair value hedges	138		—		138		—		138
Best efforts forward delivery commitments	111		—		—		111		111

			Fair Value Measurements at December 31, 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	$	179,237	$	179,237	$	—	$	—	$	179,237
Securities available for sale	946,764		—		946,764		—		946,764
Held to maturity securities	201,526		—		202,315		—		202,315
Restricted stock	60,782		—		60,782		—		60,782
Loans held for sale	36,487		—		36,487		—		36,487
Net loans	6,269,868		—		—		6,265,443		6,265,443
Derivatives:
Interest rate swap	1,005		—		1,005		—		1,005
Cash flow hedges	211		—		211		—		211
Fair value hedges	1,437		—		1,437		—		1,437
Interest rate lock commitments	610		—		—		610		610
Best efforts forward delivery commitments	1,469		—		—		1,469		1,469
Accrued interest receivable	23,448		—		23,448		—		23,448
Bank owned life insurance	179,318		—		179,318		—		179,318
LIABILITIES
Deposits	$	6,379,489	$	—	$	6,370,457	$	—	$	6,370,457
Borrowings	990,089		—		970,195		—		970,195
Accrued interest payable	2,320		—		2,230		—		2,230
Derivatives:
Interest rate swap	1,005		—		1,005		—		1,005
Cash flow hedges	9,619		—		9,619		—		9,619
Fair value hedges	296		—		296		—		296

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. Borrowers with fixed rate obligations, however, 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

3 Months Ended

Mar. 31, 2017

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 42,643 and 76,583 shares underlying anti-dilutive awards for the three months ended March 31, 2017 and 2016, 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 months ended March 31, 2017 and 2016 (in thousands except per share data):

	Net Income Available to Common Shareholders (Numerator)		Weighted Average Common Shares (Denominator)	Per Share Amount
Three months ended March 31, 2017
Net income, basic	$	19,124	43,654	$	0.44
Add: potentially dilutive common shares - stock awards	—		72	—
Diluted	$	19,124	43,726	$	0.44
Three months ended March 31, 2016
Net income, basic	$	16,961	44,251	$	0.38
Add: potentially dilutive common shares - stock awards	—		76	—
Diluted	$	16,961	44,327	$	0.38

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SEGMENT REPORTING DISCLOSURES

3 Months Ended

Mar. 31, 2017

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 113 retail locations in Virginia as of March 31, 2017. 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 segment's business is a primarily fee-based business, while the community bank segment is driven principally by net interest income. The community 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 the three months ended March 31, 2017 and 2016 was the three month LIBOR rate plus 0.15% with no floor. These transactions are eliminated in the consolidation process.

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 the three months ended March 31, 2017 and 2016 is as follows (dollars in thousands):

UNION BANKSHARES CORPORATION AND SUBSIDIARIES

SEGMENT FINANCIAL INFORMATION

	Community Bank		Mortgage		Eliminations			Consolidated
Three Months Ended March 31, 2017
Net interest income	$	66,234	$	333	$	—		$	66,567
Provision for credit losses	2,104		18		—			2,122
Net interest income after provision for credit losses	64,130		315		—			64,445
Noninterest income	16,757		2,223		(141		)	18,839
Noninterest expenses	55,014		2,522		(141		)	57,395
Income before income taxes	25,873		16		—			25,889
Income tax expense	6,753		12		—			6,765
Net income	$	19,120	$	4	$	—		$	19,124
Total assets	$	8,660,987	$	76,818	$	(67,885	)	$	8,669,920
Three Months Ended March 31, 2016
Net interest income	$	63,425	$	306	$	—		$	63,731
Provision for credit losses	2,500		104		—			2,604
Net interest income after provision for credit losses	60,925		202		—			61,127
Noninterest income	13,608		2,477		(171		)	15,914
Noninterest expenses	51,844		2,599		(171		)	54,272
Income before income taxes	22,689		80		—			22,769
Income tax expense	5,782		26		—			5,808
Net income	$	16,907	$	54	$	—		$	16,961
Total assets	$	7,825,652	$	55,069	$	(48,110	)	$	7,832,611

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ACCOUNTING POLICIES (Policies)

3 Months Ended

Mar. 31, 2017

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. In the third quarter of 2016, the Company finalized the valuation of certain amortizable intangible assets which increased the fair value and also impacted 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.

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. Residential 1-4 Family 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 & 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, using 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 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. The Company adopted this standard in the first quarter of 2017. The adoption of ASU 2016-09 did not have a material impact on the Company’s consolidated financial statements.

Recent Accounting Pronouncements

In January 2017, the FASB issued ASU No. 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business.” This ASU clarifies the definition of a business that appears in ASC 805, Business Combinations. Amendments narrow the definition and provide a framework for making judgments whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendment to the Business Combinations Topic is intended to address concerns that the existing definition of a business has been applied too broadly and has resulted in many transactions being recorded as business acquisitions that in substance are more akin to asset acquisitions. ASU 2017-01 is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. The Company has concluded the adoption of ASU 2017-01 will not have a material impact on its consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-03, “Accounting Changes and Error Corrections (Topic 250) and Investments—Equity Method and Joint Ventures (Topic 323): Amendments to SEC Paragraphs Pursuant to Staff Announcements at the September 22, 2016 and November 17, 2016 EITF Meetings  (SEC Update).” This ASU incorporates into the Accounting Standards Codification recent SEC guidance about disclosing, under SEC SAB Topic 11.M, the effect on financial statements of adopting the revenue, leases, and credit losses standards. ASU 2017-03 is effective upon issuance. The Company has concluded the adoption of ASU 2017-03 will not have a material impact on its consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-04, “Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” This ASU simplifies accounting for goodwill impairments by eliminating step two (the implied fair value to carrying value of goodwill) from the existing goodwill impairment test. A goodwill impairment will now be the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of the goodwill. The effective date and transition requirements for the technical corrections will be effective for the Company for reporting periods beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company has concluded the adoption of ASU 2017-04 will not have a material impact on its consolidated financial statements.

In February 2017, the FASB issued ASU No. 2017-05, “Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets.” This ASU conforms the derecognition guidance on nonfinancial assets with the model for transactions in the new revenue standard. The amendments will be effective for the Company for reporting periods beginning after December 15, 2018. The Company is currently assessing the impact ASU 2017-05 will have on its consolidated financial statements.

In March 2017, the FASB issued ASU No. 2017-08, “Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities.” This ASU focuses on the amortization period for certain purchased callable debt securities held at a premium. The amendments shorten the amortization period for the premium to the earliest call date. The amendments will be effective for the Company for interim and annual periods beginning after December 15, 2018. The Company has concluded the adoption of ASU 2017-08 will not have a material impact on its consolidated financial statements.

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SECURITIES (Tables)

3 Months Ended

Mar. 31, 2017

Gross Realized Gain and Losses on the Sale of Securities

The following table presents the gross realized gains and losses on and the proceeds from the sale of securities during the three months ended March 31, 2017 and 2016 (dollars in thousands).

	Three Months Ended March 31, 2017		Three Months Ended March 31, 2016
Realized gains (losses):
Gross realized gains	$	481	$	239
Gross realized losses	—		(96		)
Net realized gains	$	481	$	143
Proceeds from sales of securities	$	21,306	$	14,532

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 March 31, 2017 and December 31, 2016 are summarized as follows (dollars in thousands):

	Amortized		Gross Unrealized					Estimated
	Cost		Gains		(Losses)			Fair Value
March 31, 2017
Obligations of states and political subdivisions	$	274,003	$	5,910	$	(2,064	)	$	277,849
Corporate bonds	112,432		775		(1,161		)	112,046
Mortgage-backed securities	548,457		4,690		(3,792		)	549,355
Other securities	13,885		—		(77		)	13,808
Total available for sale securities	$	948,777	$	11,375	$	(7,094	)	$	953,058
December 31, 2016
Obligations of states and political subdivisions	$	274,007	$	4,962	$	(3,079	)	$	275,890
Corporate bonds	123,674		892		(2,786		)	121,780
Mortgage-backed securities	536,031		4,626		(5,371		)	535,286
Other securities	13,885		—		(77		)	13,808
Total available for sale securities	$	947,597	$	10,480	$	(11,313	)	$	946,764

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 securities with unrealized losses that are not deemed to be other-than-temporarily impaired as of March 31, 2017 and December 31, 2016. 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
March 31, 2017
Obligations of states and political subdivisions	$	63,155	$	(2,001	)	$	596	$	(63	)	$	63,751	$	(2,064	)
Mortgage-backed securities	277,308		(3,414		)	38,209		(378		)	315,517		(3,792		)
Corporate bonds and other securities	28,341		(581		)	40,237		(657		)	68,578		(1,238		)
Total available for sale securities	$	368,804	$	(5,996	)	$	79,042	$	(1,098	)	$	447,846	$	(7,094	)
December 31, 2016
Obligations of states and political subdivisions	$	108,440	$	(3,007	)	$	588	$	(72	)	$	109,028	$	(3,079	)
Mortgage-backed securities	316,469		(4,979		)	42,096		(392		)	358,565		(5,371		)
Corporate bonds and other securities	47,388		(1,537		)	40,468		(1,326		)	87,856		(2,863		)
Total available for sale securities	$	472,297	$	(9,523	)	$	83,152	$	(1,790	)	$	555,449	$	(11,313	)

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 March 31, 2017 and December 31, 2016, 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.

	March 31, 2017				December 31, 2016
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due in one year or less	$	24,906	$	24,989	$	21,403	$	21,517
Due after one year through five years	113,890		115,757		108,198		109,778
Due after five years through ten years	284,017		286,918		300,552		301,888
Due after ten years	525,964		525,394		517,444		513,581
Total securities available for sale	$	948,777	$	953,058	$	947,597	$	946,764

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 March 31, 2017 and December 31, 2016, 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.

	March 31, 2017				December 31, 2016
	Carrying Value (1)		Estimated Fair Value		Carrying Value (1)		Estimated Fair Value
Due in one year or less	$	4,108	$	4,140	$	4,403	$	4,440
Due after one year through five years	30,050		30,503		28,383		28,763
Due after five years through ten years	62,127		62,485		51,730		51,522
Due after ten years	107,193		108,483		117,010		117,590
Total securities held to maturity	$	203,478	$	205,611	$	201,526	$	202,315

(1)The carrying value includes $4.8 million as of March 31, 2017 and $5.2 million as of December 31, 2016 of net unrealized gains present at the time of transfer from available for sale securities, net of any accretion.

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 March 31, 2017 and December 31, 2016 are summarized as follows (dollars in thousands):

	Carrying		Gross Unrealized					Estimated
	Value (1)		Gains		(Losses)			Fair Value
March 31, 2017
Obligations of states and political subdivisions	$	203,478	$	2,409	$	(276	)	$	205,611
December 31, 2016
Obligations of states and political subdivisions	$	201,526	$	1,617	$	(828	)	$	202,315

(1) The carrying value includes $4.8 million as of March 31, 2017 and $5.2 million as of December 31, 2016 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 March 31, 2017 and December 31, 2016. 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
March 31, 2017
Obligations of states and political subdivisions	$	34,558	$	(244	)	$	648	$	(32	)	$	35,206	$	(276	)
December 31, 2016
Obligations of states and political subdivisions	$	92,841	$	(747	)	$	648	$	(81	)	$	93,489	$	(828	)

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LOANS AND ALLOWANCE FOR LOAN LOSSES (Tables)

3 Months Ended

Mar. 31, 2017

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 March 31, 2017 and December 31, 2016 (dollars in thousands):

	March 31, 2017		December 31, 2016
Construction and Land Development	$	770,287	$	751,131
Commercial Real Estate - Owner Occupied	870,559		857,805
Commercial Real Estate - Non-Owner Occupied	1,631,767		1,564,295
Multifamily Real Estate	353,769		334,276
Commercial & Industrial	576,567		551,526
Residential 1-4 Family	1,057,439		1,029,547
Auto	271,466		262,071
HELOC	527,863		526,884
Consumer and all other	494,329		429,525
Total loans held for investment, net(1)	$	6,554,046	$	6,307,060

(1)Loans, as presented, are net of deferred fees and costs totaling $768,000 and $1.8 million as of March 31, 2017 and December 31, 2016, 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 March 31, 2017 (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	$	630	$	376	$	16	$	2,776	$	6,545	$	759,944	$	770,287
Commercial Real Estate - Owner Occupied	878		—		93		18,199		1,298		850,091		870,559
Commercial Real Estate - Non-Owner Occupied	1,487		—		711		16,725		2,798		1,610,046		1,631,767
Multifamily Real Estate	—		—		—		2,058		—		351,711		353,769
Commercial & Industrial	453		126		—		733		3,245		572,010		576,567
Residential 1-4 Family	11,615		2,104		686		15,910		5,856		1,021,268		1,057,439
Auto	1,534		250		11		—		393		269,278		271,466
HELOC	1,490		365		680		1,156		1,902		522,270		527,863
Consumer and all other	1,766		1,460		126		213		301		490,463		494,329
Total loans held for investment	$	19,853	$	4,681	$	2,323	$	57,770	$	22,338	$	6,447,081	$	6,554,046

The following table shows the aging of the Company’s loan portfolio, by segment, at December 31, 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	$	1,162	$	232	$	76	$	2,922	$	2,037	$	744,702	$	751,131
Commercial Real Estate - Owner Occupied	1,842		109		35		18,343		794		836,682		857,805
Commercial Real Estate - Non-Owner Occupied	2,369		—		—		17,303		—		1,544,623		1,564,295
Multifamily Real Estate	147		—		—		2,066		—		332,063		334,276
Commercial & Industrial	759		858		9		1,074		124		548,702		551,526
Residential 1-4 Family	7,038		534		2,048		16,200		5,279		998,448		1,029,547
Auto	2,570		317		111		—		169		258,904		262,071
HELOC	1,836		1,140		635		1,161		1,279		520,833		526,884
Consumer and all other	2,522		1,431		91		223		291		424,967		429,525
Total loans held for investment	$	20,245	$	4,621	$	3,005	$	59,292	$	9,973	$	6,209,924	$	6,307,060

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 March 31, 2017 and December 31, 2016 (dollars in thousands):

	March 31, 2017						December 31, 2016
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
Loans without a specific allowance
Construction and Land Development	$	11,290	$	11,775	$	—	$	13,877	$	14,353	$	—
Commercial Real Estate - Owner Occupied	6,120		6,285		—		5,886		6,042		—
Commercial Real Estate - Non-Owner Occupied	2,825		2,825		—		1,399		1,399		—
Commercial & Industrial	949		949		—		648		890		—
Residential 1-4 Family	9,541		10,515		—		8,496		9,518		—
HELOC	1,443		1,535		—		1,017		1,094		—
Consumer and all other	113		223		—		230		427		—
Total impaired loans without a specific allowance	$	32,281	$	34,107	$	—	$	31,553	$	33,723	$	—
Loans with a specific allowance
Construction and Land Development	$	6,011	$	6,018	$	729	$	1,395	$	1,404	$	107
Commercial Real Estate - Owner Occupied	639		639		3		646		646		4
Commercial Real Estate - Non-Owner Occupied	8,691		8,739		745		2,809		2,809		474
Commercial & Industrial	5,151		5,442		617		857		880		14
Residential 1-4 Family	3,243		3,414		393		3,335		3,535		200
Auto	393		506		1		169		235		1
HELOC	757		881		20		323		433		15
Consumer and all other	189		516		7		62		298		1
Total impaired loans with a specific allowance	$	25,074	$	26,155	$	2,515	$	9,596	$	10,240	$	816
Total impaired loans	$	57,355	$	60,262	$	2,515	$	41,149	$	43,963	$	816

The following table shows 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 months ended March 31, 2017 and 2016 (dollars in thousands):

	Three Months Ended March 31, 2017				Three Months Ended March 31, 2016
	Average Investment		Interest Income Recognized		Average Investment		Interest Income Recognized
Construction and Land Development	$	17,179	$	139	$	30,569	$	484
Commercial Real Estate - Owner Occupied	6,793		64		16,510		157
Commercial Real Estate - Non-Owner Occupied	11,540		108		4,214		41
Multifamily Real Estate	—		—		3,817		60
Commercial & Industrial	6,830		36		3,663		37
Residential 1-4 Family	13,047		73		15,301		106
Auto	477		1		218		—
HELOC	2,366		4		2,933		21
Consumer and all other	303		—		982		6
Total impaired loans	$	58,535	$	425	$	78,207	$	912

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

The following table provides a summary, by segment, of TDRs that continue to accrue interest under the terms of the restructuring agreement, which are considered to be performing, and TDRs that have been placed on nonaccrual status, which are considered to be nonperforming, as of March 31, 2017 and December 31, 2016 (dollars in thousands):

	March 31, 2017					December 31, 2016
	No. of Loans	Recorded Investment		Outstanding Commitment		No. of Loans	Recorded Investment		Outstanding Commitment
Performing
Construction and Land Development	6	$	3,422	$	—	8	$	3,793	$	—
Commercial Real Estate - Owner Occupied	6	2,605		—		7	3,106		—
Commercial Real Estate - Non-Owner Occupied	2	1,637		—		2	2,390		—
Commercial & Industrial	10	1,993		—		3	533		—
Residential 1-4 Family	31	4,668		—		28	4,145		—
Total performing	55	$	14,325	$	—	48	$	13,967	$	—
Nonperforming
Construction and Land Development	4	$	540	$	—	2	$	215	$	—
Commercial Real Estate - Owner Occupied	3	624		—		2	156		—
Commercial Real Estate - Non-Owner Occupied	2	2,390		—		—	—		—
Commercial & Industrial	1	104		—		1	116		—
Residential 1-4 Family	10	741		—		8	948		—
Total nonperforming	20	$	4,399	$	—	13	$	1,435	$	—
Total performing and nonperforming	75	$	18,724	$	—	61	$	15,402	$	—

Schedule of TDR by Class and Modification Type

The following table shows, by segment and modification type, TDRs that occurred during the three months ended March 31, 2017 and 2016 (dollars in thousands):

	Three Months Ended March 31, 2017			Three Months Ended March 31, 2016
	No. of Loans	Recorded  Investment at Period End		No. of Loans	Recorded  Investment at Period End
Modified to interest only, at a market rate
Commercial & Industrial	5	$	661	—	$	—
Total interest only at market rate of interest	5	$	661	—	$	—
Term modification, at a market rate
Commercial Real Estate - Owner Occupied	—	$	—	1	$	709
Commercial Real Estate - Non-Owner Occupied	2	1,637		—	—
Commercial & Industrial	2	836		—	—
Residential 1-4 Family	3	380		1	378
Total loan term extended at a market rate	7	$	2,853	2	$	1,087
Term modification, below market rate
Commercial & Industrial	2	$	128	—	$	—
Residential 1-4 Family	4	865		—	—
Total loan term extended at a below market rate	6	$	993	—	$	—
Total	18	$	4,507	2	$	1,087

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 three months ended and as of March 31, 2017. The table below includes the provision for loan losses. In addition, a $112,000 provision was recognized during the three months ended March 31, 2017 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	$	10,055	$	37	$	(45	)	$	(496	)	$	9,551
Commercial Real Estate - Owner Occupied	3,801		20		—			(600		)	3,221
Commercial Real Estate - Non-Owner Occupied	6,622		—		—			640			7,262
Multifamily Real Estate	1,236		—		—			198			1,434
Commercial & Industrial	4,627		139		(241		)	754			5,279
Residential 1-4 Family	6,399		128		(135		)	227			6,619
Auto	946		108		(248		)	139			945
HELOC	1,328		88		(194		)	47			1,269
Consumer and all other	2,178		325		(770		)	1,101			2,834
Total	$	37,192	$	845	$	(1,633	)	$	2,010		$	38,414

	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	$	17,301	$	729	$	750,210	$	8,822	$	2,776	$	—	$	770,287	$	9,551
Commercial Real Estate - Owner Occupied	6,759		3		845,601		3,218		18,199		—		870,559		3,221
Commercial Real Estate - Non-Owner Occupied	11,516		745		1,603,526		6,517		16,725		—		1,631,767		7,262
Multifamily Real Estate	—		—		351,711		1,434		2,058		—		353,769		1,434
Commercial & Industrial	6,100		617		569,734		4,662		733		—		576,567		5,279
Residential 1-4 Family	12,784		393		1,028,745		6,226		15,910		—		1,057,439		6,619
Auto	393		1		271,073		944		—		—		271,466		945
HELOC	2,200		20		524,507		1,249		1,156		—		527,863		1,269
Consumer and all other	302		7		493,814		2,827		213		—		494,329		2,834
Total loans held for investment, net	$	57,355	$	2,515	$	6,438,921	$	35,899	$	57,770	$	—	$	6,554,046	$	38,414

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 three months ended and as of March 31, 2016. In addition, a $100,000 provision was recognized during the three months ended March 31, 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	$	19	$	(93	)	$	5,055		$	11,021
Commercial Real Estate - Owner Occupied	4,614		46		(772		)	(477		)	3,411
Commercial Real Estate - Non-Owner Occupied	6,929		—		—			(2,445		)	4,484
Multifamily Real Estate	1,606		—		—			(204		)	1,402
Commercial & Industrial	3,163		238		(617		)	1,441			4,225
Residential 1-4 Family	5,414		243		(153		)	471			5,975
Auto	1,703		84		(365		)	(615		)	807
HELOC	2,934		83		(409		)	(1,325		)	1,283
Consumer and all other	1,644		115		(571		)	603			1,791
Total	$	34,047	$	828	$	(2,980	)	$	2,504		$	34,399

	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	$	30,779	$	500	$	740,782	$	10,521	$	5,137	$	—	$	776,698	$	11,021
Commercial Real Estate - Owner Occupied	16,026		81		805,916		3,330		27,260		—		849,202		3,411
Commercial Real Estate - Non-Owner Occupied	4,203		1		1,278,412		4,483		13,636		—		1,296,251		4,484
Multifamily Real Estate	3,803		—		317,335		1,402		2,132		—		323,270		1,402
Commercial & Industrial	3,301		467		448,336		3,758		1,571		—		453,208		4,225
Residential 1-4 Family	14,558		414		945,615		5,561		18,305		—		978,478		5,975
Auto	162		1		241,575		806		—		—		241,737		807
HELOC	2,833		28		512,754		1,255		1,535		—		517,122		1,283
Consumer and all other	769		1		343,238		1,790		529		—		344,536		1,791
Total loans held for investment, net	$	76,434	$	1,493	$	5,633,963	$	32,906	$	70,105	$	—	$	5,780,502	$	34,399

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 March 31, 2017 (dollars in thousands):

	Pass		Special Mention		Substandard		Doubtful		Total
Construction and Land Development	$	684,967	$	68,650	$	13,803	$	91	$	767,511
Commercial Real Estate - Owner Occupied	816,462		30,379		5,519		—		852,360
Commercial Real Estate - Non-Owner Occupied	1,571,645		32,064		11,333		—		1,615,042
Multifamily Real Estate	330,970		20,741		—		—		351,711
Commercial & Industrial	560,889		10,158		4,787		—		575,834
Residential 1-4 Family	1,012,281		22,382		4,323		2,543		1,041,529
Auto	269,081		2,016		217		152		271,466
HELOC	521,624		2,996		1,257		830		526,707
Consumer and all other	491,625		2,209		16		266		494,116
Total	$	6,259,544	$	191,595	$	41,255	$	3,882	$	6,496,276

The following table shows the recorded investment in all loans, excluding PCI loans, by segment with their related risk level as of December 31, 2016 (dollars in thousands):

	Pass		Special Mention		Substandard		Doubtful		Total
Construction and Land Development	$	667,018	$	69,311	$	11,857	$	23	$	748,209
Commercial Real Estate - Owner Occupied	801,565		32,364		5,533		—		839,462
Commercial Real Estate - Non-Owner Occupied	1,505,153		37,631		4,208		—		1,546,992
Multifamily Real Estate	312,711		19,499		—		—		332,210
Commercial & Industrial	539,999		9,391		1,062		—		550,452
Residential 1-4 Family	986,973		18,518		4,813		3,043		1,013,347
Auto	258,188		3,648		135		100		262,071
HELOC	519,928		4,225		969		601		525,723
Consumer and all other	425,520		3,491		40		251		429,302
Total	$	6,017,055	$	198,078	$	28,617	$	4,018	$	6,247,768

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 Three Months Ended March 31,
	2017			2016
Balance at beginning of period	$	19,739		$	22,139
Accretion	(1,511		)	(1,390		)
Reclass of nonaccretable difference due to improvement in expected cash flows	1,680			1,266
Other, net (1)	(908		)	(1,510		)
Balance at end of period	$	19,000		$	20,505

(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 March 31, 2017 (dollars in thousands):

	30-89 Days Past Due		Greater than 90 Days		Current		Total
Construction and Land Development	$	72	$	—	$	2,704	$	2,776
Commercial Real Estate - Owner Occupied	902		317		16,980		18,199
Commercial Real Estate - Non-Owner Occupied	303		1,025		15,397		16,725
Multifamily Real Estate	—		—		2,058		2,058
Commercial & Industrial	—		12		721		733
Residential 1-4 Family	1,491		1,057		13,362		15,910
HELOC	120		114		922		1,156
Consumer and all other	—		—		213		213
Total	$	2,888	$	2,525	$	52,357	$	57,770

The following table shows the PCI loan portfolios, by segment and their delinquency status, at December 31, 2016 (dollars in thousands):

	30-89 Days Past Due		Greater than 90 Days		Current		Total
Construction and Land Development	$	—	$	84	$	2,838	$	2,922
Commercial Real Estate - Owner Occupied	271		519		17,553		18,343
Commercial Real Estate - Non-Owner Occupied	409		126		16,768		17,303
Multifamily Real Estate	—		—		2,066		2,066
Commercial & Industrial	44		56		974		1,074
Residential 1-4 Family	1,298		945		13,957		16,200
HELOC	175		121		865		1,161
Consumer and all other	—		—		223		223
Total	$	2,197	$	1,851	$	55,244	$	59,292

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 March 31, 2017 (dollars in thousands):

	Pass		Special Mention		Substandard		Doubtful		Total
Construction and Land Development	$	1,096	$	1,394	$	286	$	—	$	2,776
Commercial Real Estate - Owner Occupied	5,417		8,902		3,880		—		18,199
Commercial Real Estate - Non-Owner Occupied	11,014		4,323		1,388		—		16,725
Multifamily Real Estate	342		1,716		—		—		2,058
Commercial & Industrial	98		360		275		—		733
Residential 1-4 Family	8,079		4,740		2,301		790		15,910
HELOC	915		128		—		113		1,156
Consumer and all other	161		52		—		—		213
Total	$	27,122	$	21,615	$	8,130	$	903	$	57,770

The following table shows the recorded investment in only PCI loans by segment with their related risk level as of December 31, 2016 (dollars in thousands):

	Pass		Special Mention		Substandard		Doubtful		Total
Construction and Land Development	$	1,092	$	1,432	$	398	$	—	$	2,922
Commercial Real Estate - Owner Occupied	5,520		8,889		3,934		—		18,343
Commercial Real Estate - Non-Owner Occupied	10,927		4,638		1,738		—		17,303
Multifamily Real Estate	343		1,723		—		—		2,066
Commercial & Industrial	107		480		487		—		1,074
Residential 1-4 Family	8,557		4,455		2,672		516		16,200
HELOC	857		183		7		114		1,161
Consumer and all other	166		37		20		—		223
Total	$	27,569	$	21,837	$	9,256	$	630	$	59,292

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INTANGIBLE ASSETS (Tables)

3 Months Ended

Mar. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Information Concerning Intangible Assets with Finite Life

Information concerning intangible assets with a finite life is presented in the following table (dollars in thousands):

	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
March 31, 2017
Amortizable core deposit intangibles	$	62,853	$	47,990	$	14,863
Other amortizable intangibles	4,502		400		4,102
December 31, 2016
Amortizable core deposit intangibles	$	68,367	$	51,987	$	16,380
Other amortizable intangibles	4,502		280		4,222
March 31, 2016
Amortizable core deposit intangibles	$	76,185	$	54,755	$	21,430

Estimated Remaining Amortization Expense of Core Deposit Intangibles

As of March 31, 2017, the estimated remaining amortization expense of intangibles is as follows (dollars in thousands):

For the remaining nine months of 2017	$	4,433
For the year ending December 31, 2018	4,625
For the year ending December 31, 2019	3,573
For the year ending December 31, 2020	2,509
For the year ending December 31, 2021	1,481
Thereafter	2,344
Total estimated amortization expense	$	18,965

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BORROWINGS (Tables)

3 Months Ended

Mar. 31, 2017

Debt Disclosure [Abstract]

Short-Term Borrowings

Total short-term borrowings consist of the following as of March 31, 2017 and December 31, 2016 (dollars in thousands):

	March 31, 2017			December 31, 2016
Securities sold under agreements to repurchase	$	44,587		$	59,281
Other short-term borrowings	522,500			517,500
Total short-term borrowings	$	567,087		$	576,781
Maximum month-end outstanding balance	$	634,750		$	678,262
Average outstanding balance during the period	573,116			590,074
Average interest rate (year-to-date)	0.67		%	0.49		%
Average interest rate at end of period	0.71		%	0.60		%
Other short-term borrowings:
FHLB	522,500			517,500
Other lines of credit	—			—

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	%	3.90	%	6/17/2034
Trust Preferred Capital Note - Statutory Trust II	36,000,000		1,114,000		1.40	%	2.55	%	6/15/2036
VFG Limited Liability Trust I Indenture	20,000,000		619,000		2.73	%	3.88	%	3/18/2034
FNB Statutory Trust II Indenture	12,000,000		372,000		3.10	%	4.25	%	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 March 31, 2017, 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	%	1.59	%	8/23/2022	$	55,000
Adjustable Rate Credit	0.45	%	1.60	%	11/23/2022	65,000
Adjustable Rate Credit	0.45	%	1.60	%	11/23/2022	10,000
Adjustable Rate Credit	0.45	%	1.60	%	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	—		0.99	%	10/19/2018	30,000
						$	190,000
(1)Interest rates calculated using non-rounded numbers.

As of December 31, 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	%	1.44	%	8/23/2022	$	55,000
Adjustable Rate Credit	0.45	%	1.45	%	11/23/2022	65,000
Adjustable Rate Credit	0.45	%	1.45	%	11/23/2022	10,000
Adjustable Rate Credit	0.45	%	1.45	%	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	—		0.99	%	10/19/2018	30,000
						$	190,000
(1)Interest rates calculated using non-rounded numbers.

Contractual Maturities of Long-Term Debt

As of March 31, 2017, the contractual maturities of long-term debt are as follows for the years ending (dollars in thousands):

	Trust Preferred Capital Notes		Subordinated Debt		FHLB Advances		Fair Value  Premium (Discount)			Prepayment Penalty			Total Long-term Borrowings
For the remaining nine months of 2017	$	—	$	—	$	10,000	$	(28	)	$	(1,452	)	$	8,520
2018	—		—		40,000		(343		)	(1,970		)	37,687
2019	—		—		—		(486		)	(2,018		)	(2,504		)
2020	—		—		—		(501		)	(2,074		)	(2,575		)
2021	—		—		—		(516		)	(2,119		)	(2,635		)
Thereafter	93,301		150,000		140,000		(6,308		)	(1,707		)	375,286
Total Long-term borrowings	$	93,301	$	150,000	$	190,000	$	(8,182	)	$	(11,340	)	$	413,779

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COMMITMENTS AND CONTINGENCIES (Tables)

3 Months Ended

Mar. 31, 2017

Commitments and Contingencies Disclosure [Abstract]

Balances of Commitments and Contingencies

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

	March 31, 2017		December 31, 2016
Commitments with off-balance sheet risk:
Commitments to extend credit (1)	$	1,912,830	$	1,924,885
Standby letters of credit	110,525		84,212
Total commitments with off-balance sheet risk	$	2,023,355	$	2,009,097

(1) Includes unfunded overdraft protection.

Schedule of Pledged Assets Not Separately Reported on Statement of Financial Position

As part of the Company's liquidity management strategy, it pledges collateral to secure various financing and other activities that occur during the normal course of business. The following tables present the types of collateral pledged, at March 31, 2017 and December 31, 2016 (dollars in thousands):

	Pledged Assets as of March 31, 2017
	Cash		AFS Securities(1)		HTM Securities(1)		Loans(2)		Total
Public deposits	$	—	$	211,737	$	199,208	$	—	$	410,945
Repurchase agreements	—		103,721		—		—		103,721
FHLB advances	—		1,316		—		2,033,085		2,034,401
Derivatives	14,608		4,237		—		—		18,845
Other purposes	—		16,567		—		—		16,567
Total pledged assets	$	14,608	$	337,578	$	199,208	$	2,033,085	$	2,584,479

	Pledged Assets as of December 31, 2016
	Cash		AFS Securities(1)		HTM Securities(1)		Loans(2)		Total
Public deposits	$	—	$	210,546	$	197,889	$	—	$	408,435
Repurchase agreements	—		108,208		—		—		108,208
FHLB advances	—		1,475		—		1,959,929		1,961,404
Derivatives	33,595		4,376		—		—		37,971
Other purposes	—		17,499		—		—		17,499
Total pledged assets	$	33,595	$	342,104	$	197,889	$	1,959,929	$	2,533,517

(1) Balance represents market value.

(2) Balance represents book value.

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DERIVATIVES (Tables)

3 Months Ended

Mar. 31, 2017

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 March 31, 2017 and December 31, 2016, segregated by derivatives that are considered accounting hedges and those that are not (dollars in thousands):

	March 31, 2017							December 31, 2016
			Derivative (2)							Derivative (2)
	Notional or Contractual Amount (1)			Assets		Liabilities		Notional or Contractual Amount (1)			Assets		Liabilities
Derivatives designated as accounting hedges:
Interest rate contracts:
Cash flow hedges	$	188,500		$	167	$	9,354	$	188,500		$	211	$	9,619
Fair value hedges	78,701			1,549		138		65,920			1,437		296
Derivatives not designated as accounting hedges:
Loan Swaps
Pay fixed - receive floating interest rate swaps	429,485			—		897		373,355			—		1,005
Pay floating - receive fixed interest rate swaps	429,485			897		—		373,355			1,005		—
Other contracts:
Interest rate lock commitments	67,825			1,251		—		48,743			610		—
Best efforts forward delivery commitments	87,283			—		111		85,400			1,469		—

(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.

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables)

3 Months Ended

Mar. 31, 2017

Equity [Abstract]

Change in Accumulated Other Comprehensive Income

The change in accumulated other comprehensive income (loss) for the three months ended March 31, 2017 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			Unrealized Gains (Losses) on BOLI			Total
Balance - December 31, 2016	$	(542	)	$	3,377		$	(5,179	)	$	(1,465	)	$	(3,809	)
Other comprehensive income (loss)	3,637			—			(31		)	—			3,606
Amounts reclassified from accumulated other comprehensive income	(313		)	(184		)	180			109			(208		)
Net current period other comprehensive income (loss)	3,324			(184		)	149			109			3,398
Balance - March 31, 2017	$	2,782		$	3,193		$	(5,030	)	$	(1,356	)	$	(411	)

The change in accumulated other comprehensive income (loss) for the three months ended March 31, 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 - December 31, 2015	$	7,777		$	4,432		$	(5,957	)	$	6,252
Other comprehensive income (loss)	3,032			(292		)	(2,681		)	59
Amounts reclassified from accumulated other comprehensive income	(93		)	—			141			48
Net current period other comprehensive income (loss)	2,939			(292		)	(2,540		)	107
Balance - March 31, 2016	$	10,716		$	4,140		$	(8,497	)	$	6,359

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FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Mar. 31, 2017

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 March 31, 2017 and December 31, 2016 (dollars in thousands):

	Fair Value Measurements at March 31, 2017 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	$	—	$	277,849	$	—	$	277,849
Corporate and other bonds	—		112,046		—		112,046
Mortgage-backed securities	—		549,355		—		549,355
Other securities	—		13,808		—		13,808
Loans held for sale	—		19,976		—		19,976
Derivatives:
Interest rate swap	—		897		—		897
Cash flow hedges	—		167		—		167
Fair value hedges	—		1,549		—		1,549
Interest rate lock commitments	—		—		1,251		1,251
LIABILITIES
Derivatives:
Interest rate swap	$	—	$	897	$	—	$	897
Cash flow hedges	—		9,354		—		9,354
Fair value hedges	—		138		—		138
Best efforts forward delivery commitments	—		—		111		111

	Fair Value Measurements at December 31, 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	$	—	$	275,890	$	—	$	275,890
Corporate and other bonds	—		121,780		—		121,780
Mortgage-backed securities	—		535,286		—		535,286
Other securities	—		13,808		—		13,808
Loans held for sale	—		36,487		—		36,487
Derivatives:
Interest rate swap	—		1,005		—		1,005
Cash flow hedges	—		211		—		211
Fair value hedges	—		1,437		—		1,437
Interest rate lock commitments	—		—		610		610
Best efforts forward delivery commitments	—		—		1,469		1,469
LIABILITIES
Derivatives:
Interest rate swap	$	—	$	1,005	$	—	$	1,005
Cash flow hedges	—		9,619		—		9,619
Fair value hedges	—		296		—		296

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 March 31, 2017 and December 31, 2016 (dollars in thousands):

	Fair Value Measurements at March 31, 2017 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	$	—	$	—	$	18,097	$	18,097
Other real estate owned	—		—		9,605		9,605

	Fair Value Measurements at December 31, 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	$	—	$	—	$	4,344	$	4,344
Other real estate owned	—		—		10,084		10,084

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 March 31, 2017 and December 31, 2016 are as follows (dollars in thousands):

			Fair Value Measurements at March 31, 2017 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	$	183,819	$	183,819	$	—	$	—	$	183,819
Securities available for sale	953,058		—		953,058		—		953,058
Held to maturity securities	203,478		—		205,611		—		205,611
Restricted stock	65,402		—		65,402		—		65,402
Loans held for sale	19,976		—		19,976		—		19,976
Net loans	6,515,632		—		—		6,518,399		6,518,399
Derivatives:
Interest rate swap	897		—		897		—		897
Cash flow hedge	167		—		167		—		167
Fair value hedge	1,549		—		1,549		—		1,549
Interest rate lock commitments	1,251		—		—		1,251		1,251
Accrued interest receivable	23,458		—		23,458		—		23,458
Bank owned life insurance	178,774		—		178,774		—		178,774
LIABILITIES
Deposits	$	6,614,195	$	—	$	6,605,551	$	—	$	6,605,551
Borrowings	980,866		—		960,830		—		960,830
Accrued interest payable	4,209		—		4,209		—		4,209
Derivatives:
Interest rate swap	897		—		897		—		897
Cash flow hedges	9,354		—		9,354		—		9,354
Fair value hedges	138		—		138		—		138
Best efforts forward delivery commitments	111		—		—		111		111

			Fair Value Measurements at December 31, 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	$	179,237	$	179,237	$	—	$	—	$	179,237
Securities available for sale	946,764		—		946,764		—		946,764
Held to maturity securities	201,526		—		202,315		—		202,315
Restricted stock	60,782		—		60,782		—		60,782
Loans held for sale	36,487		—		36,487		—		36,487
Net loans	6,269,868		—		—		6,265,443		6,265,443
Derivatives:
Interest rate swap	1,005		—		1,005		—		1,005
Cash flow hedges	211		—		211		—		211
Fair value hedges	1,437		—		1,437		—		1,437
Interest rate lock commitments	610		—		—		610		610
Best efforts forward delivery commitments	1,469		—		—		1,469		1,469
Accrued interest receivable	23,448		—		23,448		—		23,448
Bank owned life insurance	179,318		—		179,318		—		179,318
LIABILITIES
Deposits	$	6,379,489	$	—	$	6,370,457	$	—	$	6,370,457
Borrowings	990,089		—		970,195		—		970,195
Accrued interest payable	2,320		—		2,230		—		2,230
Derivatives:
Interest rate swap	1,005		—		1,005		—		1,005
Cash flow hedges	9,619		—		9,619		—		9,619
Fair value hedges	296		—		296		—		296

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EARNINGS PER SHARE (Tables)

3 Months Ended

Mar. 31, 2017

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 months ended March 31, 2017 and 2016 (in thousands except per share data):

	Net Income Available to Common Shareholders (Numerator)		Weighted Average Common Shares (Denominator)	Per Share Amount
Three months ended March 31, 2017
Net income, basic	$	19,124	43,654	$	0.44
Add: potentially dilutive common shares - stock awards	—		72	—
Diluted	$	19,124	43,726	$	0.44
Three months ended March 31, 2016
Net income, basic	$	16,961	44,251	$	0.38
Add: potentially dilutive common shares - stock awards	—		76	—
Diluted	$	16,961	44,327	$	0.38

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SEGMENT REPORTING DISCLOSURES (Tables)

3 Months Ended

Mar. 31, 2017

Segment Reporting [Abstract]

Information About Reportable Segments and Reconciliation

Information about reportable segments and reconciliation of such information to the consolidated financial statements for the three months ended March 31, 2017 and 2016 is as follows (dollars in thousands):

UNION BANKSHARES CORPORATION AND SUBSIDIARIES

SEGMENT FINANCIAL INFORMATION

	Community Bank		Mortgage		Eliminations			Consolidated
Three Months Ended March 31, 2017
Net interest income	$	66,234	$	333	$	—		$	66,567
Provision for credit losses	2,104		18		—			2,122
Net interest income after provision for credit losses	64,130		315		—			64,445
Noninterest income	16,757		2,223		(141		)	18,839
Noninterest expenses	55,014		2,522		(141		)	57,395
Income before income taxes	25,873		16		—			25,889
Income tax expense	6,753		12		—			6,765
Net income	$	19,120	$	4	$	—		$	19,124
Total assets	$	8,660,987	$	76,818	$	(67,885	)	$	8,669,920
Three Months Ended March 31, 2016
Net interest income	$	63,425	$	306	$	—		$	63,731
Provision for credit losses	2,500		104		—			2,604
Net interest income after provision for credit losses	60,925		202		—			61,127
Noninterest income	13,608		2,477		(171		)	15,914
Noninterest expenses	51,844		2,599		(171		)	54,272
Income before income taxes	22,689		80		—			22,769
Income tax expense	5,782		26		—			5,808
Net income	$	16,907	$	54	$	—		$	16,961
Total assets	$	7,825,652	$	55,069	$	(48,110	)	$	7,832,611

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ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands		3 Months Ended
	May 31, 2016	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Business Acquisition [Line Items]
Goodwill		$ 298,191		$ 298,191
Affordable Housing Projects [Abstract]
Affordable housing projects, recognized amortization		223	$ 130
Affordable housing projects, tax credits		309	$ 210
Affordable housing projects, investment amount		9,700		9,900
Affordable housing projects, liability		$ 7,100		$ 7,100
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	Mar. 31, 2017	Dec. 31, 2016
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	$ 948,777	$ 947,597
Gross Unrealized Gains	11,375	10,480
Gross Unrealized (Losses)	(7,094)	(11,313)
Estimated Fair Value	953,058	946,764
Obligations of States and Political Subdivisions
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	274,003	274,007
Gross Unrealized Gains	5,910	4,962
Gross Unrealized (Losses)	(2,064)	(3,079)
Estimated Fair Value	277,849	275,890
Corporate and Other Bonds
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	112,432	123,674
Gross Unrealized Gains	775	892
Gross Unrealized (Losses)	(1,161)	(2,786)
Estimated Fair Value	112,046	121,780
Mortgage-Backed Securities
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	548,457	536,031
Gross Unrealized Gains	4,690	4,626
Gross Unrealized (Losses)	(3,792)	(5,371)
Estimated Fair Value	549,355	535,286
Other Securities
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	13,885	13,885
Gross Unrealized Gains	0	0
Gross Unrealized (Losses)	(77)	(77)
Estimated Fair Value	$ 13,808	$ 13,808

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SECURITIES (Schedule of Gross Unrealized Losses and Fair Value of Investments) (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Schedule of Trading Securities and Other Trading Assets [Line Items]
Less than 12 months, Fair Value	$ 368,804	$ 472,297
Less than 12 months, Unrealized Losses	(5,996)	(9,523)
More than 12 Months, Fair Value	79,042	83,152
More than 12 months, Unrealized Losses	(1,098)	(1,790)
Total, Fair Value	447,846	555,449
Total, Unrealized Losses	(7,094)	(11,313)
Obligations of States and Political Subdivisions
Schedule of Trading Securities and Other Trading Assets [Line Items]
Less than 12 months, Fair Value	63,155	108,440
Less than 12 months, Unrealized Losses	(2,001)	(3,007)
More than 12 Months, Fair Value	596	588
More than 12 months, Unrealized Losses	(63)	(72)
Total, Fair Value	63,751	109,028
Total, Unrealized Losses	(2,064)	(3,079)
Mortgage-Backed Securities
Schedule of Trading Securities and Other Trading Assets [Line Items]
Less than 12 months, Fair Value	277,308	316,469
Less than 12 months, Unrealized Losses	(3,414)	(4,979)
More than 12 Months, Fair Value	38,209	42,096
More than 12 months, Unrealized Losses	(378)	(392)
Total, Fair Value	315,517	358,565
Total, Unrealized Losses	(3,792)	(5,371)
Corporate Bonds and Other Securities
Schedule of Trading Securities and Other Trading Assets [Line Items]
Less than 12 months, Fair Value	28,341	47,388
Less than 12 months, Unrealized Losses	(581)	(1,537)
More than 12 Months, Fair Value	40,237	40,468
More than 12 months, Unrealized Losses	(657)	(1,326)
Total, Fair Value	68,578	87,856
Total, Unrealized Losses	$ (1,238)	$ (2,863)

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SECURITIES (Narrative) (Details)	3 Months Ended		12 Months Ended
	Mar. 31, 2017 USD ($) security	Jun. 30, 2015 USD ($)	Dec. 31, 2016 USD ($) security	Dec. 31, 2015 USD ($)
Schedule of Investments [Line Items]
Individual securities that had been in a continuous loss position for more than 12 months, amount	$ 79,042,000		$ 83,152,000
Securities that had been in a continuous loss position for more than 12 months, unrealized loss	1,098,000		1,790,000
Held to maturity securities unrealized gains before tax	4,800,000	$ 8,100,000	5,200,000
Held-to-maturity securities in continuous loss position for more than 12 months	$ 648,000		$ 648,000
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	$ 32,000		$ 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	$ 27,600,000		$ 23,800,000
Federal Home Loan Bank stock	37,800,000		$ 37,000,000
Credit-related OTTI	$ 0			$ 300,000
Available-for-sale Securities
Schedule of Investments [Line Items]
Individual securities that had been in a continuous loss position | security	30		30

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SECURITIES (Schedule of Amortized Cost and Estimated Fair Value of Securities) (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2017	Jun. 30, 2015	Dec. 31, 2016
Amortized Cost
Due in one year or less	$ 24,906		$ 21,403
Due after one year through five years	113,890		108,198
Due after five years through ten years	284,017		300,552
Due after ten years	525,964		517,444
Total securities available for sale	948,777		947,597
Estimated Fair Value
Due in one year or less	24,989		21,517
Due after one year through five years	115,757		109,778
Due after five years through ten years	286,918		301,888
Due after ten years	525,394		513,581
Total securities available for sale	953,058		946,764
Carrying Value
Due in one year or less	4,108		4,403
Due after one year through five years	30,050		28,383
Due after five years through ten years	62,127		51,730
Due after ten years	107,193		117,010
Total securities held to maturity	203,478		201,526
Estimated Fair Value
Due in one year or less	4,140		4,440
Due after one year through five years	30,503		28,763
Due after five years through ten years	62,485		51,522
Due after ten years	108,483		117,590
Total securities held to maturity	205,611		202,315
Held to maturity securities unrealized gains before tax	$ 4,800	$ 8,100	$ 5,200

XML

SECURITIES (Schedule of Carrying Value, Gross Unrealized Gains and Losses and Estimated Fair Value of Securities) (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2017	Jun. 30, 2015	Dec. 31, 2016
Schedule of Held-to-maturity Securities [Line Items]
Total securities held to maturity	$ 203,478		$ 201,526
Estimated Fair Value	205,611		202,315
Held to maturity securities unrealized gains before tax	4,800	$ 8,100	5,200
Obligations of States and Political Subdivisions
Schedule of Held-to-maturity Securities [Line Items]
Total securities held to maturity	203,478		201,526
Gross Unrealized Gains	2,409		1,617
Gross Unrealized (Losses)	(276)		(828)
Estimated Fair Value	$ 205,611		$ 202,315

XML

SECURITIES (Gross Unrealized Losses and Fair Value of Securities) (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Schedule of Held-to-maturity Securities [Line Items]
More than 12 months, Fair Value	$ 648	$ 648
More than 12 months, Unrealized Losses	(32)	(81)
Obligations of States and Political Subdivisions
Schedule of Held-to-maturity Securities [Line Items]
Less than 12 months, Fair Value	34,558	92,841
Less than 12 months, Unrealized Losses	(244)	(747)
More than 12 months, Fair Value	648	648
More than 12 months, Unrealized Losses	(32)	(81)
Total, Fair Value	35,206	93,489
Total, Unrealized Losses	$ (276)	$ (828)

XML

SECURITIES (Gross Realized Gains and Losses on the Sale of Securities) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Realized gains (losses):
Gross realized gains	$ 481	$ 239
Gross realized losses	0	(96)
Net realized gains	481	143
Proceeds from sales of securities	$ 21,306	$ 14,532

XML

LOANS AND ALLOWANCE FOR LOAN LOSSES (Loans Stated at Face Amount, Net of Deferred Fees and Costs) (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016	Mar. 31, 2016
Loans and Leases Receivable Disclosure [Line Items]
Total loans held for investment, net	$ 6,554,046	$ 6,307,060	$ 5,780,502
Loans receivable, deferred fees and costs	768	1,800
Construction and Land Development
Loans and Leases Receivable Disclosure [Line Items]
Total loans held for investment, net	770,287	751,131	776,698
Commercial Real Estate - Owner Occupied
Loans and Leases Receivable Disclosure [Line Items]
Total loans held for investment, net	870,559	857,805	849,202
Commercial Real Estate - Non-Owner Occupied
Loans and Leases Receivable Disclosure [Line Items]
Total loans held for investment, net	1,631,767	1,564,295	1,296,251
Multifamily Real Estate
Loans and Leases Receivable Disclosure [Line Items]
Total loans held for investment, net	353,769	334,276	323,270
Commercial & Industrial
Loans and Leases Receivable Disclosure [Line Items]
Total loans held for investment, net	576,567	551,526	453,208
Residential 1-4 Family
Loans and Leases Receivable Disclosure [Line Items]
Total loans held for investment, net	1,057,439	1,029,547	978,478
Auto
Loans and Leases Receivable Disclosure [Line Items]
Total loans held for investment, net	271,466	262,071	241,737
HELOC
Loans and Leases Receivable Disclosure [Line Items]
Total loans held for investment, net	527,863	526,884	517,122
Consumer and all other
Loans and Leases Receivable Disclosure [Line Items]
Total loans held for investment, net	$ 494,329	$ 429,525	$ 344,536

XML

LOANS AND ALLOWANCE FOR LOAN LOSSES (Summary of Aging of the Loan Portfolio by Segment) (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016	Mar. 31, 2016
Financing Receivable, Recorded Investment, Past Due [Line Items]
Greater than 90 Days and still Accruing	$ 2,323	$ 3,005
Total Loans	6,554,046	6,307,060	$ 5,780,502
Nonaccrual	22,338	9,973
Current	6,447,081	6,209,924
Purchased Impaired
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	57,770	59,292	70,105
Current	52,357	55,244
30 to 59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	19,853	20,245
60 to 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	4,681	4,621
Construction and Land Development
Financing Receivable, Recorded Investment, Past Due [Line Items]
Greater than 90 Days and still Accruing	16	76
Total Loans	770,287	751,131	776,698
Nonaccrual	6,545	2,037
Current	759,944	744,702
Construction and Land Development | Purchased Impaired
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	2,776	2,922	5,137
Current	2,704	2,838
Construction and Land Development | 30 to 59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	630	1,162
Construction and Land Development | 60 to 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	376	232
Commercial Real Estate - Owner Occupied
Financing Receivable, Recorded Investment, Past Due [Line Items]
Greater than 90 Days and still Accruing	93	35
Total Loans	870,559	857,805	849,202
Nonaccrual	1,298	794
Current	850,091	836,682
Commercial Real Estate - Owner Occupied | Purchased Impaired
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	18,199	18,343	27,260
Current	16,980	17,553
Commercial Real Estate - Owner Occupied | 30 to 59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	878	1,842
Commercial Real Estate - Owner Occupied | 60 to 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	0	109
Commercial Real Estate - Non-Owner Occupied
Financing Receivable, Recorded Investment, Past Due [Line Items]
Greater than 90 Days and still Accruing	711	0
Total Loans	1,631,767	1,564,295	1,296,251
Nonaccrual	2,798	0
Current	1,610,046	1,544,623
Commercial Real Estate - Non-Owner Occupied | Purchased Impaired
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	16,725	17,303	13,636
Current	15,397	16,768
Commercial Real Estate - Non-Owner Occupied | 30 to 59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	1,487	2,369
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	0
Total Loans	353,769	334,276	323,270
Nonaccrual	0	0
Current	351,711	332,063
Multifamily Real Estate | Purchased Impaired
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	2,058	2,066	2,132
Current	2,058	2,066
Multifamily Real Estate | 30 to 59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	0	147
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	0	9
Total Loans	576,567	551,526	453,208
Nonaccrual	3,245	124
Current	572,010	548,702
Commercial & Industrial | Purchased Impaired
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	733	1,074	1,571
Current	721	974
Commercial & Industrial | 30 to 59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	453	759
Commercial & Industrial | 60 to 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	126	858
Residential 1-4 Family
Financing Receivable, Recorded Investment, Past Due [Line Items]
Greater than 90 Days and still Accruing	686	2,048
Total Loans	1,057,439	1,029,547	978,478
Nonaccrual	5,856	5,279
Current	1,021,268	998,448
Residential 1-4 Family | Purchased Impaired
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	15,910	16,200	18,305
Current	13,362	13,957
Residential 1-4 Family | 30 to 59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	11,615	7,038
Residential 1-4 Family | 60 to 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	2,104	534
Auto
Financing Receivable, Recorded Investment, Past Due [Line Items]
Greater than 90 Days and still Accruing	11	111
Total Loans	271,466	262,071	241,737
Nonaccrual	393	169
Current	269,278	258,904
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	1,534	2,570
Auto | 60 to 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	250	317
HELOC
Financing Receivable, Recorded Investment, Past Due [Line Items]
Greater than 90 Days and still Accruing	680	635
Total Loans	527,863	526,884	517,122
Nonaccrual	1,902	1,279
Current	522,270	520,833
HELOC | Purchased Impaired
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	1,156	1,161	1,535
Current	922	865
HELOC | 30 to 59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	1,490	1,836
HELOC | 60 to 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	365	1,140
Consumer and all other
Financing Receivable, Recorded Investment, Past Due [Line Items]
Greater than 90 Days and still Accruing	126	91
Total Loans	494,329	429,525	344,536
Nonaccrual	301	291
Current	490,463	424,967
Consumer and all other | Purchased Impaired
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	213	223	$ 529
Current	213	223
Consumer and all other | 30 to 59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	1,766	2,522
Consumer and all other | 60 to 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	$ 1,460	$ 1,431

XML

LOANS AND ALLOWANCE FOR LOAN LOSSES (PCI Loan Portfolios by Segment and Delinquency Status) (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016	Mar. 31, 2016
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	$ 6,447,081	$ 6,209,924
Total Loans	6,554,046	6,307,060	$ 5,780,502
Construction and Land Development
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	759,944	744,702
Total Loans	770,287	751,131	776,698
Commercial Real Estate - Owner Occupied
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	850,091	836,682
Total Loans	870,559	857,805	849,202
Commercial Real Estate - Non-Owner Occupied
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	1,610,046	1,544,623
Total Loans	1,631,767	1,564,295	1,296,251
Multifamily Real Estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	351,711	332,063
Total Loans	353,769	334,276	323,270
Commercial & Industrial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	572,010	548,702
Total Loans	576,567	551,526	453,208
Residential 1-4 Family
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	1,021,268	998,448
Total Loans	1,057,439	1,029,547	978,478
HELOC
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	522,270	520,833
Total Loans	527,863	526,884	517,122
Consumer and all other
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	490,463	424,967
Total Loans	494,329	429,525	344,536
Purchased Impaired
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	52,357	55,244
Total Loans	57,770	59,292	70,105
Purchased Impaired | 30 To 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	2,888	2,197
Purchased Impaired | Greater than 90 Days
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	2,525	1,851
Purchased Impaired | Construction and Land Development
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	2,704	2,838
Total Loans	2,776	2,922	5,137
Purchased Impaired | Construction and Land Development | 30 To 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	72	0
Purchased Impaired | Construction and Land Development | Greater than 90 Days
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	0	84
Purchased Impaired | Commercial Real Estate - Owner Occupied
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	16,980	17,553
Total Loans	18,199	18,343	27,260
Purchased Impaired | Commercial Real Estate - Owner Occupied | 30 To 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	902	271
Purchased Impaired | Commercial Real Estate - Owner Occupied | Greater than 90 Days
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	317	519
Purchased Impaired | Commercial Real Estate - Non-Owner Occupied
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	15,397	16,768
Total Loans	16,725	17,303	13,636
Purchased Impaired | Commercial Real Estate - Non-Owner Occupied | 30 To 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	303	409
Purchased Impaired | Commercial Real Estate - Non-Owner Occupied | Greater than 90 Days
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	1,025	126
Purchased Impaired | Multifamily Real Estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	2,058	2,066
Total Loans	2,058	2,066	2,132
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	721	974
Total Loans	733	1,074	1,571
Purchased Impaired | Commercial & Industrial | 30 To 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	0	44
Purchased Impaired | Commercial & Industrial | Greater than 90 Days
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	12	56
Purchased Impaired | Residential 1-4 Family
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	13,362	13,957
Total Loans	15,910	16,200	18,305
Purchased Impaired | Residential 1-4 Family | 30 To 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	1,491	1,298
Purchased Impaired | Residential 1-4 Family | Greater than 90 Days
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	1,057	945
Purchased Impaired | HELOC
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	922	865
Total Loans	1,156	1,161	1,535
Purchased Impaired | HELOC | 30 To 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	120	175
Purchased Impaired | HELOC | Greater than 90 Days
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	114	121
Purchased Impaired | Consumer and all other
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	213	223
Total Loans	213	223	$ 529
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
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Recorded Investment
Loans without a specific allowance	$ 32,281		$ 31,553
Loans with a specific allowance	25,074		9,596
Total impaired loans	57,355		41,149
Unpaid Principal Balance
Loans without a specific allowance	34,107		33,723
Loans with a specific allowance	26,155		10,240
Total impaired loans	60,262		43,963
Related Allowance	2,515		816
Average Investment	58,535	$ 78,207
Interest Income Recognized	425	912
Construction and Land Development
Recorded Investment
Loans without a specific allowance	11,290		13,877
Loans with a specific allowance	6,011		1,395
Unpaid Principal Balance
Loans without a specific allowance	11,775		14,353
Loans with a specific allowance	6,018		1,404
Related Allowance	729		107
Average Investment	17,179	30,569
Interest Income Recognized	139	484
Commercial Real Estate - Owner Occupied
Recorded Investment
Loans without a specific allowance	6,120		5,886
Loans with a specific allowance	639		646
Unpaid Principal Balance
Loans without a specific allowance	6,285		6,042
Loans with a specific allowance	639		646
Related Allowance	3		4
Average Investment	6,793	16,510
Interest Income Recognized	64	157
Commercial Real Estate - Non-Owner Occupied
Recorded Investment
Loans without a specific allowance	2,825		1,399
Loans with a specific allowance	8,691		2,809
Unpaid Principal Balance
Loans without a specific allowance	2,825		1,399
Loans with a specific allowance	8,739		2,809
Related Allowance	745		474
Average Investment	11,540	4,214
Interest Income Recognized	108	41
Multifamily Real Estate
Unpaid Principal Balance
Average Investment	0	3,817
Interest Income Recognized	0	60
Commercial & Industrial
Recorded Investment
Loans without a specific allowance	949		648
Loans with a specific allowance	5,151		857
Unpaid Principal Balance
Loans without a specific allowance	949		890
Loans with a specific allowance	5,442		880
Related Allowance	617		14
Average Investment	6,830	3,663
Interest Income Recognized	36	37
Residential 1-4 Family
Recorded Investment
Loans without a specific allowance	9,541		8,496
Loans with a specific allowance	3,243		3,335
Unpaid Principal Balance
Loans without a specific allowance	10,515		9,518
Loans with a specific allowance	3,414		3,535
Related Allowance	393		200
Average Investment	13,047	15,301
Interest Income Recognized	73	106
Auto
Recorded Investment
Loans with a specific allowance	393		169
Unpaid Principal Balance
Loans with a specific allowance	506		235
Related Allowance	1		1
Average Investment	477	218
Interest Income Recognized	1	0
HELOC
Recorded Investment
Loans without a specific allowance	1,443		1,017
Loans with a specific allowance	757		323
Unpaid Principal Balance
Loans without a specific allowance	1,535		1,094
Loans with a specific allowance	881		433
Related Allowance	20		15
Average Investment	2,366	2,933
Interest Income Recognized	4	21
Consumer and all other
Recorded Investment
Loans without a specific allowance	113		230
Loans with a specific allowance	189		62
Unpaid Principal Balance
Loans without a specific allowance	223		427
Loans with a specific allowance	516		298
Related Allowance	7		$ 1
Average Investment	303	982
Interest Income Recognized	$ 0	$ 6

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	Mar. 31, 2017 USD ($) loan	Dec. 31, 2016 USD ($) loan
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	75	61
Recorded Investment	$ 18,724	$ 15,402
Outstanding Commitment	$ 0	$ 0
Performing
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	55	48
Recorded Investment	$ 14,325	$ 13,967
Outstanding Commitment	$ 0	$ 0
Performing | Construction and Land Development
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	6	8
Recorded Investment	$ 3,422	$ 3,793
Outstanding Commitment	$ 0	$ 0
Performing | Commercial Real Estate - Owner Occupied
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	6	7
Recorded Investment	$ 2,605	$ 3,106
Outstanding Commitment	$ 0	$ 0
Performing | Commercial Real Estate - Non-Owner Occupied
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	2	2
Recorded Investment	$ 1,637	$ 2,390
Outstanding Commitment	$ 0	$ 0
Performing | Commercial & Industrial
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	10	3
Recorded Investment	$ 1,993	$ 533
Outstanding Commitment	$ 0	$ 0
Performing | Residential 1-4 Family
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	31	28
Recorded Investment	$ 4,668	$ 4,145
Outstanding Commitment	$ 0	$ 0
Nonperforming
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	20	13
Recorded Investment	$ 4,399	$ 1,435
Outstanding Commitment	$ 0	$ 0
Nonperforming | Construction and Land Development
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	4	2
Recorded Investment	$ 540	$ 215
Outstanding Commitment	$ 0	$ 0
Nonperforming | Commercial Real Estate - Owner Occupied
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	3	2
Recorded Investment	$ 624	$ 156
Outstanding Commitment	$ 0	$ 0
Nonperforming | Commercial Real Estate - Non-Owner Occupied
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	2	0
Recorded Investment	$ 2,390	$ 0
Outstanding Commitment	$ 0	$ 0
Nonperforming | Commercial & Industrial
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	1	1
Recorded Investment	$ 104	$ 116
Outstanding Commitment	$ 0	$ 0
Nonperforming | Residential 1-4 Family
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	10	8
Recorded Investment	$ 741	$ 948
Outstanding Commitment	$ 0	$ 0

XML

LOANS AND ALLOWANCE FOR LOAN LOSSES (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Financing Receivable, Modifications [Line Items]
Period for restructured loan to be considered default	90 days
Provision for unfunded commitments	$ 112	$ 100
Total loans held for investment, net	6,554,046	5,780,502	$ 6,307,060
Acquired Performing Loan Portfolio
Financing Receivable, Modifications [Line Items]
Total loans held for investment, net	1,000,000		1,100,000
Remaining discount on acquired loans	16,100		16,900
Purchased Impaired
Financing Receivable, Modifications [Line Items]
Total loans held for investment, net	57,770	$ 70,105	59,292
Purchased impaired loans (gross)	$ 71,500		$ 73,600

XML

LOANS AND ALLOWANCE FOR LOAN LOSSES (Schedule of TDR by Class and Modification Type) (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2017 USD ($) loan	Mar. 31, 2016 USD ($) loan
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	18	2
Recorded Investment at Period End | $	$ 4,507	$ 1,087
Modified to interest only, at a market rate
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	5	0
Recorded Investment at Period End | $	$ 661	$ 0
Modified to interest only, at a market rate | Commercial & Industrial
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	5	0
Recorded Investment at Period End | $	$ 661	$ 0
Term modification, at a market rate
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	7	2
Recorded Investment at Period End | $	$ 2,853	$ 1,087
Term modification, at a market rate | Commercial Real Estate - Owner Occupied
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	0	1
Recorded Investment at Period End | $	$ 0	$ 709
Term modification, at a market rate | Commercial Real Estate - Non-Owner Occupied
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	2	0
Recorded Investment at Period End | $	$ 1,637	$ 0
Term modification, at a market rate | Commercial & Industrial
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	2	0
Recorded Investment at Period End | $	$ 836	$ 0
Term modification, at a market rate | Residential 1-4 Family
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	3	1
Recorded Investment at Period End | $	$ 380	$ 378
Term modification, below market rate
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	6	0
Recorded Investment at Period End | $	$ 993	$ 0
Term modification, below market rate | Commercial & Industrial
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	2	0
Recorded Investment at Period End | $	$ 128	$ 0
Term modification, below market rate | Residential 1-4 Family
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	4	0
Recorded Investment at Period End | $	$ 865	$ 0

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	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Dec. 31, 2016	Mar. 31, 2016
Allowance for loan losses
Balance, beginning of the year	$ 37,192	$ 34,047
Recoveries credited to allowance	845	828
Loans charged off	(1,633)	(2,980)
Provision charged to operations	2,010	2,504
Balance, end of period	38,414	34,399
Total Loans
Loans individually evaluated for impairment			$ 57,355		$ 76,434
ALL individually evaluated for impairment			2,515		1,493
Loans collectively evaluated for impairment			6,438,921		5,633,963
ALL collectively evaluated for impairment			35,899		32,906
Total Loans			6,554,046	$ 6,307,060	5,780,502
Total ALL	37,192	34,047	38,414	37,192	34,399
Purchased Impaired
Allowance for loan losses
Balance, end of period	0	0
Total Loans
Total Loans			57,770	59,292	70,105
Total ALL	0	0	0		0
Construction and Land Development
Allowance for loan losses
Balance, beginning of the year	10,055	6,040
Recoveries credited to allowance	37	19
Loans charged off	(45)	(93)
Provision charged to operations	(496)	5,055
Balance, end of period	9,551	11,021
Total Loans
Loans individually evaluated for impairment			17,301		30,779
ALL individually evaluated for impairment			729		500
Loans collectively evaluated for impairment			750,210		740,782
ALL collectively evaluated for impairment			8,822		10,521
Total Loans			770,287	751,131	776,698
Total ALL	10,055	6,040	9,551	10,055	11,021
Construction and Land Development | Purchased Impaired
Allowance for loan losses
Balance, end of period	0	0
Total Loans
Total Loans			2,776	2,922	5,137
Total ALL	0	0	0		0
Commercial Real Estate - Owner Occupied
Allowance for loan losses
Balance, beginning of the year	3,801	4,614
Recoveries credited to allowance	20	46
Loans charged off	0	(772)
Provision charged to operations	(600)	(477)
Balance, end of period	3,221	3,411
Total Loans
Loans individually evaluated for impairment			6,759		16,026
ALL individually evaluated for impairment			3		81
Loans collectively evaluated for impairment			845,601		805,916
ALL collectively evaluated for impairment			3,218		3,330
Total Loans			870,559	857,805	849,202
Total ALL	3,801	4,614	3,221	3,801	3,411
Commercial Real Estate - Owner Occupied | Purchased Impaired
Allowance for loan losses
Balance, end of period	0	0
Total Loans
Total Loans			18,199	18,343	27,260
Total ALL	0	0	0		0
Commercial Real Estate - Non-Owner Occupied
Allowance for loan losses
Balance, beginning of the year	6,622	6,929
Recoveries credited to allowance	0	0
Loans charged off	0	0
Provision charged to operations	640	(2,445)
Balance, end of period	7,262	4,484
Total Loans
Loans individually evaluated for impairment			11,516		4,203
ALL individually evaluated for impairment			745		1
Loans collectively evaluated for impairment			1,603,526		1,278,412
ALL collectively evaluated for impairment			6,517		4,483
Total Loans			1,631,767	1,564,295	1,296,251
Total ALL	6,622	6,929	7,262	6,622	4,484
Commercial Real Estate - Non-Owner Occupied | Purchased Impaired
Allowance for loan losses
Balance, end of period	0	0
Total Loans
Total Loans			16,725	17,303	13,636
Total ALL	0	0	0		0
Multifamily Real Estate
Allowance for loan losses
Balance, beginning of the year	1,236	1,606
Recoveries credited to allowance	0	0
Loans charged off	0	0
Provision charged to operations	198	(204)
Balance, end of period	1,434	1,402
Total Loans
Loans individually evaluated for impairment			0		3,803
ALL individually evaluated for impairment			0		0
Loans collectively evaluated for impairment			351,711		317,335
ALL collectively evaluated for impairment			1,434		1,402
Total Loans			353,769	334,276	323,270
Total ALL	1,236	1,606	1,434	1,236	1,402
Multifamily Real Estate | Purchased Impaired
Allowance for loan losses
Balance, end of period	0	0
Total Loans
Total Loans			2,058	2,066	2,132
Total ALL	0	0	0		0
Commercial & Industrial
Allowance for loan losses
Balance, beginning of the year	4,627	3,163
Recoveries credited to allowance	139	238
Loans charged off	(241)	(617)
Provision charged to operations	754	1,441
Balance, end of period	5,279	4,225
Total Loans
Loans individually evaluated for impairment			6,100		3,301
ALL individually evaluated for impairment			617		467
Loans collectively evaluated for impairment			569,734		448,336
ALL collectively evaluated for impairment			4,662		3,758
Total Loans			576,567	551,526	453,208
Total ALL	4,627	3,163	5,279	4,627	4,225
Commercial & Industrial | Purchased Impaired
Allowance for loan losses
Balance, end of period	0	0
Total Loans
Total Loans			733	1,074	1,571
Total ALL	0	0	0		0
Residential 1-4 Family
Allowance for loan losses
Balance, beginning of the year	6,399	5,414
Recoveries credited to allowance	128	243
Loans charged off	(135)	(153)
Provision charged to operations	227	471
Balance, end of period	6,619	5,975
Total Loans
Loans individually evaluated for impairment			12,784		14,558
ALL individually evaluated for impairment			393		414
Loans collectively evaluated for impairment			1,028,745		945,615
ALL collectively evaluated for impairment			6,226		5,561
Total Loans			1,057,439	1,029,547	978,478
Total ALL	6,399	5,414	6,619	6,399	5,975
Residential 1-4 Family | Purchased Impaired
Allowance for loan losses
Balance, end of period	0	0
Total Loans
Total Loans			15,910	16,200	18,305
Total ALL	0	0	0		0
Auto
Allowance for loan losses
Balance, beginning of the year	946	1,703
Recoveries credited to allowance	108	84
Loans charged off	(248)	(365)
Provision charged to operations	139	(615)
Balance, end of period	945	807
Total Loans
Loans individually evaluated for impairment			393		162
ALL individually evaluated for impairment			1		1
Loans collectively evaluated for impairment			271,073		241,575
ALL collectively evaluated for impairment			944		806
Total Loans			271,466	262,071	241,737
Total ALL	946	1,703	945	946	807
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	1,328	2,934
Recoveries credited to allowance	88	83
Loans charged off	(194)	(409)
Provision charged to operations	47	(1,325)
Balance, end of period	1,269	1,283
Total Loans
Loans individually evaluated for impairment			2,200		2,833
ALL individually evaluated for impairment			20		28
Loans collectively evaluated for impairment			524,507		512,754
ALL collectively evaluated for impairment			1,249		1,255
Total Loans			527,863	526,884	517,122
Total ALL	1,328	2,934	1,269	1,328	1,283
HELOC | Purchased Impaired
Allowance for loan losses
Balance, end of period	0	0
Total Loans
Total Loans			1,156	1,161	1,535
Total ALL	0	0	0		0
Consumer and all other
Allowance for loan losses
Balance, beginning of the year	2,178	1,644
Recoveries credited to allowance	325	115
Loans charged off	(770)	(571)
Provision charged to operations	1,101	603
Balance, end of period	2,834	1,791
Total Loans
Loans individually evaluated for impairment			302		769
ALL individually evaluated for impairment			7		1
Loans collectively evaluated for impairment			493,814		343,238
ALL collectively evaluated for impairment			2,827		1,790
Total Loans			494,329	429,525	344,536
Total ALL	2,178	1,644	2,834	2,178	1,791
Consumer and all other | Purchased Impaired
Allowance for loan losses
Balance, end of period	0	0
Total Loans
Total Loans			213	$ 223	529
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	Mar. 31, 2017	Dec. 31, 2016	Mar. 31, 2016
Financing Receivable, Recorded Investment [Line Items]
Total Loans	$ 6,554,046	$ 6,307,060	$ 5,780,502
Construction and Land Development
Financing Receivable, Recorded Investment [Line Items]
Total Loans	770,287	751,131	776,698
Commercial Real Estate - Owner Occupied
Financing Receivable, Recorded Investment [Line Items]
Total Loans	870,559	857,805	849,202
Commercial Real Estate - Non-Owner Occupied
Financing Receivable, Recorded Investment [Line Items]
Total Loans	1,631,767	1,564,295	1,296,251
Multifamily Real Estate
Financing Receivable, Recorded Investment [Line Items]
Total Loans	353,769	334,276	323,270
Commercial & Industrial
Financing Receivable, Recorded Investment [Line Items]
Total Loans	576,567	551,526	453,208
Residential 1-4 Family
Financing Receivable, Recorded Investment [Line Items]
Total Loans	1,057,439	1,029,547	978,478
Auto
Financing Receivable, Recorded Investment [Line Items]
Total Loans	271,466	262,071	241,737
HELOC
Financing Receivable, Recorded Investment [Line Items]
Total Loans	527,863	526,884	517,122
Consumer and all other
Financing Receivable, Recorded Investment [Line Items]
Total Loans	494,329	429,525	$ 344,536
Excluding Purchased Impaired
Financing Receivable, Recorded Investment [Line Items]
Total Loans	6,496,276	6,247,768
Excluding Purchased Impaired | Pass
Financing Receivable, Recorded Investment [Line Items]
Total Loans	6,259,544	6,017,055
Excluding Purchased Impaired | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total Loans	191,595	198,078
Excluding Purchased Impaired | Substandard
Financing Receivable, Recorded Investment [Line Items]
Total Loans	41,255	28,617
Excluding Purchased Impaired | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Total Loans	3,882	4,018
Excluding Purchased Impaired | Construction and Land Development
Financing Receivable, Recorded Investment [Line Items]
Total Loans	767,511	748,209
Excluding Purchased Impaired | Construction and Land Development | Pass
Financing Receivable, Recorded Investment [Line Items]
Total Loans	684,967	667,018
Excluding Purchased Impaired | Construction and Land Development | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total Loans	68,650	69,311
Excluding Purchased Impaired | Construction and Land Development | Substandard
Financing Receivable, Recorded Investment [Line Items]
Total Loans	13,803	11,857
Excluding Purchased Impaired | Construction and Land Development | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Total Loans	91	23
Excluding Purchased Impaired | Commercial Real Estate - Owner Occupied
Financing Receivable, Recorded Investment [Line Items]
Total Loans	852,360	839,462
Excluding Purchased Impaired | Commercial Real Estate - Owner Occupied | Pass
Financing Receivable, Recorded Investment [Line Items]
Total Loans	816,462	801,565
Excluding Purchased Impaired | Commercial Real Estate - Owner Occupied | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total Loans	30,379	32,364
Excluding Purchased Impaired | Commercial Real Estate - Owner Occupied | Substandard
Financing Receivable, Recorded Investment [Line Items]
Total Loans	5,519	5,533
Excluding Purchased Impaired | Commercial Real Estate - Owner Occupied | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Total Loans	0	0
Excluding Purchased Impaired | Commercial Real Estate - Non-Owner Occupied
Financing Receivable, Recorded Investment [Line Items]
Total Loans	1,615,042	1,546,992
Excluding Purchased Impaired | Commercial Real Estate - Non-Owner Occupied | Pass
Financing Receivable, Recorded Investment [Line Items]
Total Loans	1,571,645	1,505,153
Excluding Purchased Impaired | Commercial Real Estate - Non-Owner Occupied | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total Loans	32,064	37,631
Excluding Purchased Impaired | Commercial Real Estate - Non-Owner Occupied | Substandard
Financing Receivable, Recorded Investment [Line Items]
Total Loans	11,333	4,208
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	351,711	332,210
Excluding Purchased Impaired | Multifamily Real Estate | Pass
Financing Receivable, Recorded Investment [Line Items]
Total Loans	330,970	312,711
Excluding Purchased Impaired | Multifamily Real Estate | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total Loans	20,741	19,499
Excluding Purchased Impaired | Multifamily Real Estate | Substandard
Financing Receivable, Recorded Investment [Line Items]
Total Loans	0	0
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	575,834	550,452
Excluding Purchased Impaired | Commercial & Industrial | Pass
Financing Receivable, Recorded Investment [Line Items]
Total Loans	560,889	539,999
Excluding Purchased Impaired | Commercial & Industrial | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total Loans	10,158	9,391
Excluding Purchased Impaired | Commercial & Industrial | Substandard
Financing Receivable, Recorded Investment [Line Items]
Total Loans	4,787	1,062
Excluding Purchased Impaired | Commercial & Industrial | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Total Loans	0	0
Excluding Purchased Impaired | Residential 1-4 Family
Financing Receivable, Recorded Investment [Line Items]
Total Loans	1,041,529	1,013,347
Excluding Purchased Impaired | Residential 1-4 Family | Pass
Financing Receivable, Recorded Investment [Line Items]
Total Loans	1,012,281	986,973
Excluding Purchased Impaired | Residential 1-4 Family | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total Loans	22,382	18,518
Excluding Purchased Impaired | Residential 1-4 Family | Substandard
Financing Receivable, Recorded Investment [Line Items]
Total Loans	4,323	4,813
Excluding Purchased Impaired | Residential 1-4 Family | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Total Loans	2,543	3,043
Excluding Purchased Impaired | Auto
Financing Receivable, Recorded Investment [Line Items]
Total Loans	271,466	262,071
Excluding Purchased Impaired | Auto | Pass
Financing Receivable, Recorded Investment [Line Items]
Total Loans	269,081	258,188
Excluding Purchased Impaired | Auto | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total Loans	2,016	3,648
Excluding Purchased Impaired | Auto | Substandard
Financing Receivable, Recorded Investment [Line Items]
Total Loans	217	135
Excluding Purchased Impaired | Auto | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Total Loans	152	100
Excluding Purchased Impaired | HELOC
Financing Receivable, Recorded Investment [Line Items]
Total Loans	526,707	525,723
Excluding Purchased Impaired | HELOC | Pass
Financing Receivable, Recorded Investment [Line Items]
Total Loans	521,624	519,928
Excluding Purchased Impaired | HELOC | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total Loans	2,996	4,225
Excluding Purchased Impaired | HELOC | Substandard
Financing Receivable, Recorded Investment [Line Items]
Total Loans	1,257	969
Excluding Purchased Impaired | HELOC | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Total Loans	830	601
Excluding Purchased Impaired | Consumer and all other
Financing Receivable, Recorded Investment [Line Items]
Total Loans	494,116	429,302
Excluding Purchased Impaired | Consumer and all other | Pass
Financing Receivable, Recorded Investment [Line Items]
Total Loans	491,625	425,520
Excluding Purchased Impaired | Consumer and all other | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total Loans	2,209	3,491
Excluding Purchased Impaired | Consumer and all other | Substandard
Financing Receivable, Recorded Investment [Line Items]
Total Loans	16	40
Excluding Purchased Impaired | Consumer and all other | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Total Loans	$ 266	$ 251

XML

LOANS AND ALLOWANCE FOR LOAN LOSSES (Loans Receivables Related Risk Rating Including Purchased Impaired Loans) (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016	Mar. 31, 2016
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	$ 6,554,046	$ 6,307,060	$ 5,780,502
Construction and Land Development
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	770,287	751,131	776,698
Commercial Real Estate - Owner Occupied
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	870,559	857,805	849,202
Commercial Real Estate - Non-Owner Occupied
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	1,631,767	1,564,295	1,296,251
Multifamily Real Estate
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	353,769	334,276	323,270
Commercial & Industrial
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	576,567	551,526	453,208
Residential 1-4 Family
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	1,057,439	1,029,547	978,478
HELOC
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	527,863	526,884	517,122
Consumer and all other
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	494,329	429,525	344,536
Purchased Impaired
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	57,770	59,292	70,105
Purchased Impaired | Pass
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	27,122	27,569
Purchased Impaired | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	21,615	21,837
Purchased Impaired | Substandard
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	8,130	9,256
Purchased Impaired | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	903	630
Purchased Impaired | Construction and Land Development
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	2,776	2,922	5,137
Purchased Impaired | Construction and Land Development | Pass
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	1,096	1,092
Purchased Impaired | Construction and Land Development | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	1,394	1,432
Purchased Impaired | Construction and Land Development | Substandard
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	286	398
Purchased Impaired | Construction and Land Development | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	0	0
Purchased Impaired | Commercial Real Estate - Owner Occupied
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	18,199	18,343	27,260
Purchased Impaired | Commercial Real Estate - Owner Occupied | Pass
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	5,417	5,520
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	8,902	8,889
Purchased Impaired | Commercial Real Estate - Owner Occupied | Substandard
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	3,880	3,934
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	16,725	17,303	13,636
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	11,014	10,927
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	4,323	4,638
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	1,388	1,738
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	2,058	2,066	2,132
Purchased Impaired | Multifamily Real Estate | Pass
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	342	343
Purchased Impaired | Multifamily Real Estate | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	1,716	1,723
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	733	1,074	1,571
Purchased Impaired | Commercial & Industrial | Pass
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	98	107
Purchased Impaired | Commercial & Industrial | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	360	480
Purchased Impaired | Commercial & Industrial | Substandard
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	275	487
Purchased Impaired | Commercial & Industrial | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	0	0
Purchased Impaired | Residential 1-4 Family
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	15,910	16,200	18,305
Purchased Impaired | Residential 1-4 Family | Pass
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	8,079	8,557
Purchased Impaired | Residential 1-4 Family | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	4,740	4,455
Purchased Impaired | Residential 1-4 Family | Substandard
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	2,301	2,672
Purchased Impaired | Residential 1-4 Family | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	790	516
Purchased Impaired | HELOC
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	1,156	1,161	1,535
Purchased Impaired | HELOC | Pass
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	915	857
Purchased Impaired | HELOC | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	128	183
Purchased Impaired | HELOC | Substandard
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	0	7
Purchased Impaired | HELOC | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	113	114
Purchased Impaired | Consumer and all other
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	213	223	$ 529
Purchased Impaired | Consumer and all other | Pass
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	161	166
Purchased Impaired | Consumer and all other | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	52	37
Purchased Impaired | Consumer and all other | Substandard
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	0	20
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

XML

LOANS AND ALLOWANCE FOR LOAN LOSSES (Schedule of Acquired Loan Portfolio and Accretable Yield) (Details) - Purchased Impaired - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Accretable Yield
Balance at beginning of period	$ 19,739	$ 22,139
Accretion	(1,511)	(1,390)
Reclass of nonaccretable difference due to improvement in expected cash flows	1,680	1,266
Other, net	(908)	(1,510)
Balance at end of period	$ 19,000	$ 20,505

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INTANGIBLE ASSETS (Narrative) (Details) - USD ($)	3 Months Ended
	Mar. 31, 2017	Jun. 30, 2016	Mar. 31, 2016
Finite-Lived Intangible Assets [Line Items]
Impairment charges		$ 0
Intangible assets, amortization expense	$ 1,637,000		$ 1,880,000
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
Amortizable core deposit intangibles
Finite-Lived Intangible Assets [Line Items]
Intangible assets, amortization expense	$ 1,500,000		1,900,000
Amortizable core deposit intangibles | Minimum
Finite-Lived Intangible Assets [Line Items]
Intangible assets, amortization period	4 years
Amortizable core deposit intangibles | Maximum
Finite-Lived Intangible Assets [Line Items]
Intangible assets, amortization period	14 years
Other amortizable intangibles
Finite-Lived Intangible Assets [Line Items]
Intangible assets, amortization expense	$ 120,000		$ 0

XML

INTANGIBLE ASSETS (Information Concerning Intangible Assets with Finite Life) (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016	Mar. 31, 2016
Finite-Lived Intangible Assets [Line Items]
Net Carrying Value	$ 18,965
Amortizable core deposit intangibles
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	62,853	$ 68,367	$ 76,185
Accumulated Amortization	47,990	51,987	54,755
Net Carrying Value	14,863	16,380	$ 21,430
Other amortizable intangibles
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	4,502	4,502
Accumulated Amortization	400	280
Net Carrying Value	$ 4,102	$ 4,222

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INTANGIBLE ASSETS (Estimated Remaining Amortization Expense of Core Deposit Intangibles) (Details) $ in Thousands	Mar. 31, 2017 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
For the remaining nine months of 2017	$ 4,433
For the year ending December 31, 2018	4,625
For the year ending December 31, 2019	3,573
For the year ending December 31, 2020	2,509
For the year ending December 31, 2021	1,481
Thereafter	2,344
Net Carrying Value	$ 18,965

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BORROWINGS (Short-Term Borrowings) (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Debt Disclosure [Abstract]
Securities sold under agreements to repurchase	$ 44,587	$ 59,281
Other short-term borrowings	522,500	517,500
Total short-term borrowings	567,087	576,781
Maximum month-end outstanding balance	634,750	678,262
Average outstanding balance during the period	$ 573,116	$ 590,074
Average interest rate (year-to-date)	0.67%	0.49%
Average interest rate at end of period	0.71%	0.60%
Other short-term borrowings:
FHLB	$ 522,500	$ 517,500
Other lines of credit	$ 0	$ 0

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BORROWINGS (Narrative) (Details) $ in Thousands			3 Months Ended		12 Months Ended
	Jan. 01, 2014 USD ($)	Aug. 23, 2012 USD ($)	Mar. 31, 2017 USD ($) acquisition	Mar. 31, 2016 USD ($)	Dec. 31, 2016 USD ($)
Subordinated Borrowing [Line Items]
Remaining available balance for the federal funds lines			$ 175,000		$ 175,000
Remaining available balance of alternate line of credit			25,000		25,000
Maximum collateral dependent line of credit with the FHLB			2,500,000		2,400,000
Subordinated debt			150,000		150,000
Prepayment penalty		$ 19,600
Prepayment penalty amortization expense			470	$ 463
Trust Preferred Capital Notes
Subordinated Borrowing [Line Items]
Trust preferred capital notes principal balance			90,500
Subordinated Debt
Subordinated Borrowing [Line Items]
Remaining fair value discount on acquired notes			$ 2,000		$ 2,000
Spread on LIBOR			5.00%
Maturity Date					Dec. 15, 2026
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		20,000
Remaining fair value premium on acquired FHLB advances			448
StellarOne | Trust Preferred Capital Notes
Subordinated Borrowing [Line Items]
Trust preferred capital notes principal balance	$ 32,000
Remaining fair value discount on acquired notes			$ 6,700
LIBOR | Subordinated Debt
Subordinated Borrowing [Line Items]
Spread on LIBOR			3.175%

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BORROWINGS (Trust Preferred Capital Notes Qualify for Tier 1 Capital) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Debt Instrument [Line Items]
Investment	$ 100,508	$ 101,907
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	3.90%
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	2.55%
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	3.88%
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	4.25%
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	3 Months Ended	12 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Federal Home Loan Bank, Advances [Line Items]
Advance Amount	$ 190,000	$ 190,000
Adjustable Rate Credit One
Federal Home Loan Bank, Advances [Line Items]
Interest Rate	1.59%	1.44%
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	1.60%	1.45%
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	1.60%	1.45%
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	1.60%	1.45%
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	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	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	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	0.99%	0.99%
Maturity Date	Oct. 19, 2018	Oct. 19, 2018
Advance Amount	$ 30,000	$ 30,000

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BORROWINGS (Contractual Maturities of Long-Term Debt) (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Fair Value Premium (Discount)
For the remaining nine months of 2017	$ (28)
2018	(343)
2019	(486)
2020	(501)
2021	(516)
Thereafter	(6,308)
Total Long-term borrowings	(8,182)
Prepayment Penalty
For the remaining nine months of 2017	(1,452)
2018	(1,970)
2019	(2,018)
2020	(2,074)
2021	(2,119)
Thereafter	(1,707)
Total Long-term borrowings	(11,340)
Total Long-term Borrowings
For the remaining nine months of 2017	8,520
2018	37,687
2019	(2,504)
2020	(2,575)
2021	(2,635)
Thereafter	375,286
Total Long-term borrowings	413,779	$ 413,308
Trust Preferred Capital Notes
Total Long-term Borrowings, Gross
Thereafter	93,301
Total Long-term borrowings	93,301
Subordinated Debt
Total Long-term Borrowings
Thereafter	150,000
Total Long-term borrowings	150,000
FHLB Advances
Total Long-term Borrowings, Gross
For the remaining nine months of 2017	10,000
2018	40,000
Thereafter	140,000
Total Long-term borrowings	$ 190,000

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COMMITMENTS AND CONTINGENCIES (Balances of Commitments and Contingencies) (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Commitments with off-balance sheet risk:
Total commitments with off-balance sheet risk	$ 2,023,355	$ 2,009,097
Commitments to Extend Credit
Commitments with off-balance sheet risk:
Total commitments with off-balance sheet risk	1,912,830	1,924,885
Standby Letters of Credit
Commitments with off-balance sheet risk:
Total commitments with off-balance sheet risk	$ 110,525	$ 84,212

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COMMITMENTS AND CONTINGENCIES (Narrative) (Details) - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Other Commitments [Line Items]
Daily average required reserves	$ 59,000,000	$ 54,500,000
Deposits with other financial institutions	32,600,000
Uninsured deposits with other financial institutions	16,700,000
Indemnification reserves	503,000	379,000
Cash Flow Hedges
Other Commitments [Line Items]
Deposits with other financial institutions serves as collateral	14,600,000
Reserve for Off-balance Sheet Activities
Other Commitments [Line Items]
Off-balance sheet credit risks, amount, liability	$ 700,000	$ 725,000

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COMMITMENTS AND CONTINGENCIES (Schedule of Securities Pledged as Collateral) (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Financial Instruments Owned and Pledged as Collateral [Line Items]
Cash	$ 14,608	$ 33,595
Loans	2,033,085	1,959,929
Total pledged assets	2,584,479	2,533,517
Public deposits
Financial Instruments Owned and Pledged as Collateral [Line Items]
Cash	0	0
Loans	0	0
Total pledged assets	410,945	408,435
Repurchase agreements
Financial Instruments Owned and Pledged as Collateral [Line Items]
Cash	0	0
Loans	0	0
Total pledged assets	103,721	108,208
FHLB advances
Financial Instruments Owned and Pledged as Collateral [Line Items]
Cash	0	0
Loans	2,033,085	1,959,929
Total pledged assets	2,034,401	1,961,404
Derivatives
Financial Instruments Owned and Pledged as Collateral [Line Items]
Cash	14,608	33,595
Loans	0	0
Total pledged assets	18,845	37,971
Other purposes
Financial Instruments Owned and Pledged as Collateral [Line Items]
Cash	0	0
Loans	0	0
Total pledged assets	16,567	17,499
AFS Securities
Financial Instruments Owned and Pledged as Collateral [Line Items]
Securities pledged	337,578	342,104
AFS Securities | Public deposits
Financial Instruments Owned and Pledged as Collateral [Line Items]
Securities pledged	211,737	210,546
AFS Securities | Repurchase agreements
Financial Instruments Owned and Pledged as Collateral [Line Items]
Securities pledged	103,721	108,208
AFS Securities | FHLB advances
Financial Instruments Owned and Pledged as Collateral [Line Items]
Securities pledged	1,316	1,475
AFS Securities | Derivatives
Financial Instruments Owned and Pledged as Collateral [Line Items]
Securities pledged	4,237	4,376
AFS Securities | Other purposes
Financial Instruments Owned and Pledged as Collateral [Line Items]
Securities pledged	16,567	17,499
HTM Securities
Financial Instruments Owned and Pledged as Collateral [Line Items]
Securities pledged	199,208	197,889
HTM Securities | Public deposits
Financial Instruments Owned and Pledged as Collateral [Line Items]
Securities pledged	199,208	197,889
HTM Securities | Repurchase agreements
Financial Instruments Owned and Pledged as Collateral [Line Items]
Securities pledged	0	0
HTM Securities | FHLB advances
Financial Instruments Owned and Pledged as Collateral [Line Items]
Securities pledged	0	0
HTM Securities | Derivatives
Financial Instruments Owned and Pledged as Collateral [Line Items]
Securities pledged	0	0
HTM Securities | Other purposes
Financial Instruments Owned and Pledged as Collateral [Line Items]
Securities pledged	$ 0	$ 0

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DERIVATIVES (Narrative) (Details) $ in Thousands		3 Months Ended	12 Months Ended
	Jun. 13, 2016 USD ($) derivative_instrument	Mar. 31, 2017 USD ($)	Dec. 31, 2016 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		$ 386
Fair Value Hedges
Derivatives, Fair Value [Line Items]
Aggregate notional amount of the hedged items		78,700	$ 65,900
Fair value of aggregate notional amount of the hedged items		$ (1,100)	$ (890)

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DERIVATIVES (Summary of the Derivatives) (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Interest Rate Lock Commitments
Summary of the derivative designated as a cash flow hedge
Derivative Assets	$ 1,251	$ 610
Designated as Accounting Hedges | Cash Flow Hedges
Summary of the derivative designated as a cash flow hedge
Notional or Contractual Amount	188,500	188,500
Derivative Assets	167	211
Derivative Liabilities	9,354	9,619
Designated as Accounting Hedges | Fair Value Hedges
Summary of the derivative designated as a cash flow hedge
Notional or Contractual Amount	78,701	65,920
Derivative Assets	1,549	1,437
Derivative Liabilities	138	296
Not Designated as Accounting Hedges | Interest Rate Lock Commitments
Summary of the derivative designated as a cash flow hedge
Notional or Contractual Amount	67,825	48,743
Derivative Assets	1,251	610
Derivative Liabilities	0	0
Not Designated as Accounting Hedges | Best efforts forward delivery commitments
Summary of the derivative designated as a cash flow hedge
Notional or Contractual Amount	87,283	85,400
Derivative Assets	0	1,469
Derivative Liabilities	111	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	429,485	373,355
Derivative Assets	0	0
Derivative Liabilities	897	1,005
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	429,485	373,355
Derivative Assets	897	1,005
Derivative Liabilities	$ 0	$ 0

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Change in Accumulated Other Comprehensive Income) (Details) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
AOCI Attributable to Parent, Net of Tax
Beginning balance	$ 1,001,032,000	$ 995,367,000
Other comprehensive income (loss)	3,606,000	59,000
Amounts reclassified from accumulated other comprehensive income	(208,000)	48,000
Net current period other comprehensive income (loss)	3,398,000	107,000
Ending balance	1,015,631,000	980,978,000
Accumulated Other Comprehensive Income (Loss)
AOCI Attributable to Parent, Net of Tax
Beginning balance	(3,809,000)	6,252,000
Net current period other comprehensive income (loss)	3,398,000	107,000
Ending balance	(411,000)	6,359,000
Unrealized Gains (Losses) on AFS Securities
AOCI Attributable to Parent, Net of Tax
Beginning balance	(542,000)	7,777,000
Other comprehensive income (loss)	3,637,000	3,032,000
Amounts reclassified from accumulated other comprehensive income	(313,000)	(93,000)
Net current period other comprehensive income (loss)	3,324,000	2,939,000
Ending balance	2,782,000	10,716,000
Unrealized Gain for AFS Securities Transferred to HTM
AOCI Attributable to Parent, Net of Tax
Beginning balance	3,377,000	4,432,000
Other comprehensive income (loss)	0	(292,000)
Amounts reclassified from accumulated other comprehensive income	(184,000)	0
Net current period other comprehensive income (loss)	(184,000)	(292,000)
Ending balance	3,193,000	4,140,000
Change in Fair Value of Cash Flow Hedge
AOCI Attributable to Parent, Net of Tax
Beginning balance	(5,179,000)	(5,957,000)
Other comprehensive income (loss)	(31,000)	(2,681,000)
Amounts reclassified from accumulated other comprehensive income	180,000	141,000
Net current period other comprehensive income (loss)	149,000	(2,540,000)
Ending balance	(5,030,000)	(8,497,000)
Unrealized Gains (Losses) on BOLI
AOCI Attributable to Parent, Net of Tax
Beginning balance	(1,465,000)
Other comprehensive income (loss)	0
Amounts reclassified from accumulated other comprehensive income	109,000	$ 0
Net current period other comprehensive income (loss)	109,000
Ending balance	$ (1,356,000)

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Narrative) (Details) - USD ($)	3 Months Ended			12 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Jun. 30, 2015	Dec. 31, 2016
Accumulated Other Comprehensive Income (Loss) [Line Items]
Gains on securities transactions, net	$ 481,000	$ 143,000
Tax expense (benefit) related to (gains) losses on the sale of securities	168,000	50,000
Transfer from securities available for sale to securities held to maturity			$ 201,800,000
Held to maturity securities unrealized gains before tax	4,800,000		$ 8,100,000	$ 5,200,000
Accretion expense	(283,000)	(449,000)
Tax expense (benefit) related to (gains) losses for AFS securities transferred to HTM	99,000	157,000
Tax expense (benefit) related to (gains) losses on the cash flow hedges	(97,000)	(76,000)
Reclassification adjustment for losses (gains) included in net income	208,000	(48,000)
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	277,000	217,000
Unrealized Gains (Losses) on BOLI
Accumulated Other Comprehensive Income (Loss) [Line Items]
Reclassification adjustment for losses (gains) included in net income	$ (109,000)	$ 0

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FAIR VALUE MEASUREMENTS (Narrative) (Details) participant in Thousands, $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2017 USD ($) participant	Mar. 31, 2016 USD ($)	Dec. 31, 2016
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	1.20%		1.50%
Level 3 fair value measurements weighted average related to other real estate owned	25.60%		25.10%
Total valuation expenses related to OREO properties | $	$ 238	$ 126

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FAIR VALUE MEASUREMENTS (Schedule of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis) (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
ASSETS
Securities available for sale	$ 953,058	$ 946,764
Loans held for sale	19,976	36,487
Cash flow hedges	167	211
Fair value hedges	1,549	1,437
Best efforts forward delivery commitments		1,469
LIABILITIES
Interest rate swap	897	1,005
Cash flow hedges	9,354	9,619
Fair value hedges	138	296
Best efforts forward delivery commitments	111
Interest Rate Lock Commitments
ASSETS
Interest rate lock commitments	1,251	610
Obligations of States and Political Subdivisions
ASSETS
Securities available for sale	277,849	275,890
Corporate and Other Bonds
ASSETS
Securities available for sale	112,046	121,780
Mortgage-Backed Securities
ASSETS
Securities available for sale	549,355	535,286
Other Securities
ASSETS
Securities available for sale	13,808	13,808
Quoted Prices in Active Markets for Identical Assets Level 1
ASSETS
Securities available for sale	0	0
Loans held for sale	0	0
Cash flow hedges	0	0
Fair value hedges	0	0
Best efforts forward delivery commitments		0
LIABILITIES
Interest rate swap	0	0
Cash flow hedges	0	0
Fair value hedges	0	0
Best efforts forward delivery commitments	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	953,058	946,764
Loans held for sale	19,976	36,487
Cash flow hedges	167	211
Fair value hedges	1,549	1,437
Best efforts forward delivery commitments		0
LIABILITIES
Interest rate swap	897	1,005
Cash flow hedges	9,354	9,619
Fair value hedges	138	296
Best efforts forward delivery commitments	0
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
Cash flow hedges	0	0
Fair value hedges	0	0
Best efforts forward delivery commitments		1,469
LIABILITIES
Interest rate swap	0	0
Cash flow hedges	0	0
Fair value hedges	0	0
Best efforts forward delivery commitments	111
Significant Unobservable Inputs Level 3 | Interest Rate Lock Commitments
ASSETS
Interest rate lock commitments	1,251	610
Recurring
ASSETS
Loans held for sale	19,976	36,487
Interest rate swap	897	1,005
Cash flow hedges	167	211
Fair value hedges	1,549	1,437
Best efforts forward delivery commitments		1,469
LIABILITIES
Interest rate swap	897	1,005
Cash flow hedges	9,354	9,619
Fair value hedges	138	296
Best efforts forward delivery commitments	111
Recurring | Interest Rate Lock Commitments
ASSETS
Interest rate lock commitments	1,251	610
Recurring | Obligations of States and Political Subdivisions
ASSETS
Securities available for sale	277,849	275,890
Recurring | Corporate and Other Bonds
ASSETS
Securities available for sale	112,046	121,780
Recurring | Mortgage-Backed Securities
ASSETS
Securities available for sale	549,355	535,286
Recurring | Other Securities
ASSETS
Securities available for sale	13,808	13,808
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
Fair value hedges	0	0
Best efforts forward delivery commitments		0
LIABILITIES
Interest rate swap	0	0
Cash flow hedges	0	0
Fair value hedges	0	0
Best efforts forward delivery commitments	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	19,976	36,487
Interest rate swap	897	1,005
Cash flow hedges	167	211
Fair value hedges	1,549	1,437
Best efforts forward delivery commitments		0
LIABILITIES
Interest rate swap	897	1,005
Cash flow hedges	9,354	9,619
Fair value hedges	138	296
Best efforts forward delivery commitments	0
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	277,849	275,890
Recurring | Significant Other Observable Inputs Level 2 | Corporate and Other Bonds
ASSETS
Securities available for sale	112,046	121,780
Recurring | Significant Other Observable Inputs Level 2 | Mortgage-Backed Securities
ASSETS
Securities available for sale	549,355	535,286
Recurring | Significant Other Observable Inputs Level 2 | Other Securities
ASSETS
Securities available for sale	13,808	13,808
Recurring | Significant Unobservable Inputs Level 3
ASSETS
Loans held for sale	0	0
Interest rate swap	0	0
Cash flow hedges	0	0
Fair value hedges	0	0
Best efforts forward delivery commitments		1,469
LIABILITIES
Interest rate swap	0	0
Cash flow hedges	0	0
Fair value hedges	0	0
Best efforts forward delivery commitments	111
Recurring | Significant Unobservable Inputs Level 3 | Interest Rate Lock Commitments
ASSETS
Interest rate lock commitments	1,251	610
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

XML

FAIR VALUE MEASUREMENTS (Schedule of Financial Assets Measured at Fair Value on Nonrecurring Basis) (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
ASSETS
Other real estate owned	$ 9,605	$ 10,084
Nonrecurring
ASSETS
Impaired loans	18,097	4,344
Other real estate owned	9,605	10,084
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	18,097	4,344
Other real estate owned	$ 9,605	$ 10,084

XML

FAIR VALUE MEASUREMENTS (Carrying Values and Estimated Fair Values of the Company's Financial Instruments) (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
ASSETS
Cash and cash equivalents	$ 183,819	$ 179,237
Securities available for sale, at fair value	953,058	946,764
Held to maturity securities	205,611	202,315
Restricted stock	65,402	60,782
Loans held for sale	19,976	36,487
Net loans	6,518,399	6,265,443
Derivatives:
Cash flow hedges	167	211
Fair value hedges	1,549	1,437
Best efforts forward delivery commitments		1,469
Accrued interest receivable	23,458	23,448
Bank owned life insurance	178,774	179,318
LIABILITIES
Deposits	6,605,551	6,370,457
Borrowings	960,830	970,195
Accrued interest payable	4,209	2,230
Derivatives:
Interest rate swap	897	1,005
Cash flow hedges	9,354	9,619
Fair value hedges	138	296
Best efforts forward delivery commitments	111
Interest Rate Swap
Derivatives:
Interest rate swap	897	1,005
Interest Rate Lock Commitments
Derivatives:
Interest rate lock commitments	1,251	610
Carrying Value
ASSETS
Cash and cash equivalents	183,819	179,237
Securities available for sale, at fair value	953,058	946,764
Held to maturity securities	203,478	201,526
Restricted stock	65,402	60,782
Loans held for sale	19,976	36,487
Net loans	6,515,632	6,269,868
Derivatives:
Cash flow hedges	167	211
Fair value hedges	1,549	1,437
Best efforts forward delivery commitments		1,469
Accrued interest receivable	23,458	23,448
Bank owned life insurance	178,774	179,318
LIABILITIES
Deposits	6,614,195	6,379,489
Borrowings	980,866	990,089
Accrued interest payable	4,209	2,320
Derivatives:
Interest rate swap	897	1,005
Cash flow hedges	9,354	9,619
Fair value hedges	138	296
Best efforts forward delivery commitments	111
Carrying Value | Interest Rate Swap
Derivatives:
Interest rate swap	897	1,005
Carrying Value | Interest Rate Lock Commitments
Derivatives:
Interest rate lock commitments	1,251	610
Quoted Prices in Active Markets for Identical Assets Level 1
ASSETS
Cash and cash equivalents	183,819	179,237
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:
Cash flow hedges	0	0
Fair value hedges	0	0
Best efforts forward delivery commitments		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
Best efforts forward delivery commitments	0
Quoted Prices in Active Markets for Identical Assets Level 1 | Interest Rate Swap
Derivatives:
Interest rate swap	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	953,058	946,764
Held to maturity securities	205,611	202,315
Restricted stock	65,402	60,782
Loans held for sale	19,976	36,487
Net loans	0	0
Derivatives:
Cash flow hedges	167	211
Fair value hedges	1,549	1,437
Best efforts forward delivery commitments		0
Accrued interest receivable	23,458	23,448
Bank owned life insurance	178,774	179,318
LIABILITIES
Deposits	6,605,551	6,370,457
Borrowings	960,830	970,195
Accrued interest payable	4,209	2,230
Derivatives:
Interest rate swap	897	1,005
Cash flow hedges	9,354	9,619
Fair value hedges	138	296
Best efforts forward delivery commitments	0
Significant Other Observable Inputs Level 2 | Interest Rate Swap
Derivatives:
Interest rate swap	897	1,005
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	6,518,399	6,265,443
Derivatives:
Cash flow hedges	0	0
Fair value hedges	0	0
Best efforts forward delivery commitments		1,469
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
Best efforts forward delivery commitments	111
Significant Unobservable Inputs Level 3 | Interest Rate Swap
Derivatives:
Interest rate swap	0	0
Significant Unobservable Inputs Level 3 | Interest Rate Lock Commitments
Derivatives:
Interest rate lock commitments	$ 1,251	$ 610

XML

EARNINGS PER SHARE (Narrative) (Details) - shares	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Earnings Per Share [Abstract]
Anti-dilutive stock awards, shares	42,643	76,583

XML

EARNINGS PER SHARE (Reconciliation of the Denominators of the Basic and Diluted EPS Computations) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Earnings Per Share [Abstract]
Basic EPS, Net Income Available to Common Stockholders (Numerator)	$ 19,124	$ 16,961
Basic EPS, Weighted Average Shares (Denominator)	43,654,498	44,251,276
Basic EPS, Per Share Amount (in usd per share)	$ 0.44	$ 0.38
Effect of dilutive stock awards, Weighted Average Shares (Denominator)	72,000	76,000
Diluted EPS, Net Income Available to Common Stockholders (Numerator)	$ 19,124	$ 16,961
Diluted EPS, Weighted Average Common Shares	43,725,923	44,327,229
Diluted EPS, Per Share Amount (in usd per share)	$ 0.44	$ 0.38

XML

SEGMENT REPORTING DISCLOSURES (Narrative) (Details)	3 Months Ended
	Mar. 31, 2017 segment bank store	Mar. 31, 2016
Segment Reporting Information [Line Items]
Number of reportable segments | segment	2
Number of subsidiary bank | bank	1
Number of retail locations | store	113
Warehouse Line of Credit | LIBOR
Segment Reporting Information [Line Items]
Spread on LIBOR	0.15%	0.15%
Mortgage banking segment interest - floor	0.00%	0.00%

XML

SEGMENT REPORTING DISCLOSURES (Information About Reportable Segments and Reconciliation) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Segment Reporting Information [Line Items]
Net interest income	$ 66,567	$ 63,731
Provision for credit losses	2,122	2,604
Net interest income after provision for credit losses	64,445	61,127
Noninterest income	18,839	15,914
Noninterest expenses	57,395	54,272
Income before income taxes	25,889	22,769
Income tax expense	6,765	5,808
Net income	19,124	16,961
Total assets	8,669,920	7,832,611	$ 8,426,793
Operating Segments | Community Bank
Segment Reporting Information [Line Items]
Net interest income	66,234	63,425
Provision for credit losses	2,104	2,500
Net interest income after provision for credit losses	64,130	60,925
Noninterest income	16,757	13,608
Noninterest expenses	55,014	51,844
Income before income taxes	25,873	22,689
Income tax expense	6,753	5,782
Net income	19,120	16,907
Total assets	8,660,987	7,825,652
Operating Segments | Mortgage
Segment Reporting Information [Line Items]
Net interest income	333	306
Provision for credit losses	18	104
Net interest income after provision for credit losses	315	202
Noninterest income	2,223	2,477
Noninterest expenses	2,522	2,599
Income before income taxes	16	80
Income tax expense	12	26
Net income	4	54
Total assets	76,818	55,069
Eliminations
Segment Reporting Information [Line Items]
Net interest income	0	0
Provision for credit losses	0	0
Net interest income after provision for credit losses	0	0
Noninterest income	(141)	(171)
Noninterest expenses	(141)	(171)
Income before income taxes	0	0
Income tax expense	0	0
Net income	0	0
Total assets	$ (67,885)	$ (48,110)