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 June 30, 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 August 2, 2017 was 43,707,506.

UNION BANKSHARES CORPORATION

FORM 10-Q

INDEX

ITEM		PAGE
	PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Balance Sheets as of June 30, 2017 (unaudited) and December 31, 2016 (audited)	2
	Consolidated Statements of Income (unaudited) for the three and six months ended June 30, 2017 and 2016	3
	Consolidated Statements of Comprehensive Income (unaudited) for the three and six months ended June 30, 2017 and 2016	4
	Consolidated Statements of Changes in Stockholders’ Equity (unaudited) for the six months ended June 30, 2017 and 2016	5
	Consolidated Statements of Cash Flows (unaudited) for the six months ended June 30, 2017 and 2016	6
	Notes to Consolidated Financial Statements (unaudited)	7
	Report of Independent Registered Public Accounting Firm	45
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	46
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	69
Item 4.	Controls and Procedures	71
	PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	71
Item 1A.	Risk Factors	71
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	74
Item 6.	Exhibits	75
	Signatures	76

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
BOLI	–	Bank-owned life insurance
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
SEC	–	Securities and Exchange Commission
StellarOne	–	StellarOne Corporation
TDR	–	Troubled debt restructuring
UMG	–	Union Mortgage Group, Inc.
Xenith	–	Xenith Bankshares, Inc.

PART I – FINANCIAL INFORMATION

ITEM 1 – FINANCIAL STATEMENTS

UNION BANKSHARES CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except share data)

	June 30, 2017		December 31, 2016
	(Unaudited)		(Audited)
ASSETS
Cash and cash equivalents:
Cash and due from banks	$	135,759	$	120,758
Interest-bearing deposits in other banks	45,473		58,030
Federal funds sold	678		449
Total cash and cash equivalents	181,910		179,237
Securities available for sale, at fair value	960,537		946,764
Securities held to maturity, at carrying value	205,630		201,526
Restricted stock, at cost	69,631		60,782
Loans held for sale, at fair value	41,135		36,487
Loans held for investment, net of deferred fees and costs	6,771,490		6,307,060
Less allowance for loan losses	38,214		37,192
Net loans held for investment	6,733,276		6,269,868
Premises and equipment, net	121,842		122,027
Other real estate owned, net of valuation allowance	9,482		10,084
Goodwill	298,191		298,191
Amortizable intangibles, net	17,422		20,602
Bank owned life insurance	180,110		179,318
Other assets	96,021		101,907
Total assets	$	8,915,187	$	8,426,793
LIABILITIES
Noninterest-bearing demand deposits	$	1,501,570	$	1,393,625
Interest-bearing deposits	5,262,864		4,985,864
Total deposits	6,764,434		6,379,489
Securities sold under agreements to repurchase	34,543		59,281
Other short-term borrowings	602,000		517,500
Long-term borrowings	434,260		413,308
Other liabilities	49,081		56,183
Total liabilities	7,884,318		7,425,761
Commitments and contingencies (Note 6)
STOCKHOLDERS' EQUITY
Common stock, $1.33 par value, shares authorized 100,000,000; issued and outstanding, 43,706,000 shares and 43,609,317 shares, respectively.	57,643		57,506
Additional paid-in capital	607,666		605,397
Retained earnings	361,552		341,938
Accumulated other comprehensive income	4,008		(3,809		)
Total stockholders' equity	1,030,869		1,001,032
Total liabilities and stockholders' equity	$	8,915,187	$	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				Six Months Ended
	June 30, 2017		June 30, 2016		June 30, 2017		June 30, 2016
Interest and dividend income:
Interest and fees on loans	$	72,612	$	64,747	$	140,696	$	127,694
Interest on deposits in other banks	115		65		186		112
Interest and dividends on securities:
Taxable	4,982		4,510		9,905		8,826
Nontaxable	3,512		3,459		7,074		6,898
Total interest and dividend income	81,221		72,781		157,861		143,530
Interest expense:
Interest on deposits	6,100		4,197		11,176		8,393
Interest on short-term borrowings	1,400		710		2,350		1,332
Interest on long-term borrowings	4,722		2,098		8,768		4,298
Total interest expense	12,222		7,005		22,294		14,023
Net interest income	68,999		65,776		135,567		129,507
Provision for credit losses	2,173		2,300		4,295		4,904
Net interest income after provision for credit losses	66,826		63,476		131,272		124,603
Noninterest income:
Service charges on deposit accounts	4,963		4,754		9,792		9,488
Other service charges and fees	4,637		4,418		9,045		8,574
Fiduciary and asset management fees	2,725		2,333		5,519		4,471
Mortgage banking income, net	2,793		2,972		4,818		5,117
Gains on securities transactions, net	117		3		598		146
Bank owned life insurance income	1,335		1,361		3,460		2,734
Loan-related interest rate swap fees	1,031		1,091		2,211		1,753
Other operating income	455		1,061		1,451		1,624
Total noninterest income	18,056		17,993		36,894		33,907
Noninterest expenses:
Salaries and benefits	30,561		28,519		62,730		56,567
Occupancy expenses	4,718		4,809		9,621		9,785
Furniture and equipment expenses	2,720		2,595		5,323		5,232
Printing, postage, and supplies	1,406		1,280		2,556		2,419
Communications expense	872		927		1,782		2,016
Technology and data processing	3,927		3,608		7,827		7,422
Professional services	2,092		2,548		3,750		4,537
Marketing and advertising expense	2,279		1,924		4,019		3,863
FDIC assessment premiums and other insurance	947		1,379		1,652		2,741
Other taxes	2,022		1,607		4,043		3,225
Loan-related expenses	1,281		1,229		2,610		2,107
OREO and credit-related expenses	342		894		884		1,463
Amortization of intangible assets	1,544		1,745		3,180		3,625
Training and other personnel costs	1,043		905		2,012		1,649
Acquisition and conversion costs	2,744		—		2,744		—
Other expenses	1,432		1,282		2,592		2,872
Total noninterest expenses	59,930		55,251		117,325		109,523
Income before income taxes	24,952		26,218		50,841		48,987
Income tax expense	6,996		6,881		13,761		12,689
Net income	$	17,956	$	19,337	$	37,080	$	36,298
Basic earnings per common share	$	0.41	$	0.44	$	0.85	$	0.82
Diluted earnings per common share	$	0.41	$	0.44	$	0.85	$	0.82
Dividends declared per common share	$	0.20	$	0.19	$	0.40	$	0.38
Basic weighted average number of common shares outstanding	43,693,427		43,746,583		43,674,070		43,998,929
Diluted weighted average number of common shares outstanding	43,783,952		43,824,183		43,755,045		44,075,706

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 June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Net income	$	17,956		$	19,337		$	37,080		$	36,298
Other comprehensive income (loss):
Cash flow hedges:
Change in fair value of cash flow hedges	(775		)	(1,007		)	(807		)	(3,688		)
Reclassification adjustment for losses (gains) included in net income (net of tax, $171 and $74 for the three months and $269 and $150 for the six months ended June 30, 2017 and 2016, respectively)	318			138			499			279
AFS securities:
Unrealized holding gains (losses) arising during period (net of tax, $2,707 and $1,991 for the three months and $4,665 and $3,624 for the six months ended June 30, 2017 and 2016, respectively)	5,027			3,698			8,664			6,730
Reclassification adjustment for losses (gains) included in net income (net of tax, $41 and $1 for the three months and $209 and $51 for the six months ended June 30, 2017 and 2016, respectively)	(76		)	(2		)	(389		)	(95		)
HTM securities:
Reclassification adjustment for accretion of unrealized gain on AFS securities transferred to HTM (net of tax, $86 and $155 for the three months and $185 and $312 for the six months ended June 30, 2017 and 2016, respectively)	(160		)	(287		)	(344		)	(579		)
Bank owned life insurance:
Reclassification adjustment for losses included in net income	85			—			194			—
Other comprehensive income	4,419			2,540			7,817			2,647
Comprehensive income	$	22,375		$	21,877		$	44,897		$	38,945

See accompanying notes to consolidated financial statements.

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UNION BANKSHARES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED)

SIX MONTHS ENDED JUNE 30, 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							36,298						36,298
Other comprehensive income (net of taxes of $3,411)										2,647			2,647
Issuance of common stock in regard to acquisition (17,232 shares)	23			430									453
Dividends on common stock ($0.38 per share)							(16,685		)				(16,685		)
Stock purchased under stock repurchase plan (1,312,556 shares)	(1,747		)	(28,943		)							(30,690		)
Issuance of common stock under Equity Compensation Plans (34,227 shares)	46			436									482
Issuance of common stock for services rendered (9,552 shares)	13			227									240
Vesting of restricted stock, net of shares held for taxes, under Equity Compensation Plans (31,993 shares)	43			(441		)							(398		)
Stock-based compensation expense				1,487									1,487
Balance - June 30, 2016	$	57,537		$	605,018		$	317,747		$	8,899		$	989,201
Balance - December 31, 2016	$	57,506		$	605,397		$	341,938		$	(3,809	)	$	1,001,032
Net income - 2017							37,080						37,080
Other comprehensive income (net of taxes of $4,540)										7,817			7,817
Dividends on common stock ($0.40 per share)							(17,466		)				(17,466		)
Issuance of common stock under Equity Compensation Plans (31,818 shares)	43			529									572
Issuance of common stock for services rendered (11,320 shares)	15			383									398
Vesting of restricted stock, net of shares held for taxes, under Equity Compensation Plans (59,426 shares)	79			(1,145		)							(1,066		)
Stock-based compensation expense				2,502									2,502
Balance - June 30, 2017	$	57,643		$	607,666		$	361,552		$	4,008		$	1,030,869

See accompanying notes to consolidated financial statements.

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UNION BANKSHARES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

SIX MONTHS ENDED JUNE 30, 2017 AND 2016

(Dollars in thousands)

	2017			2016
Operating activities:
Net income	$	37,080		$	36,298
Adjustments to reconcile net income to net cash and cash equivalents provided by (used in) operating activities:
Depreciation of premises and equipment	5,431			4,983
Writedown of OREO	257			400
Amortization, net	6,977			6,845
Amortization related to acquisition, net	70			1,077
Provision for credit losses	4,295			4,904
Gains on securities transactions, net	(598		)	(146		)
Bank owned life insurance income	(3,460		)	(2,734		)
Increase in loans held for sale, net	(4,648		)	(2,084		)
Gains on sales of other real estate owned, net	(72		)	(1		)
Losses on sales of premises, net	27			72
Stock-based compensation expenses	2,502			1,487
Issuance of common stock for services	398			240
Net decrease (increase) in other assets	3,991			(8,549		)
Net (decrease) increase in other liabilities	(4,392		)	1,920
Net cash and cash equivalents provided by (used in) operating activities	47,858			44,712
Investing activities:
Purchases of securities available for sale and restricted stock	(124,411		)	(122,690		)
Purchases of securities held to maturity	(7,836		)	—
Proceeds from sales of securities available for sale and restricted stock	52,626			15,424
Proceeds from maturities, calls and paydowns of securities available for sale	59,342			56,414
Proceeds from maturities, calls and paydowns of securities held to maturity	909			610
Net increase in loans held for investment	(464,667		)	(271,689		)
Net increase in premises and equipment	(5,273		)	(3,059		)
Proceeds from sales of other real estate owned	381			2,138
Cash paid in acquisition	—			(4,077		)
Cash acquired in acquisitions	—			207
Net cash and cash equivalents provided by (used in) investing activities	(488,929		)	(326,722		)
Financing activities:
Net increase in noninterest-bearing deposits	107,945			19,797
Net increase in interest-bearing deposits	277,000			112,093
Net increase in short-term borrowings	59,762			289,285
Cash paid for contingent consideration	(3,003		)	—
Proceeds from issuance of long-term debt	20,000			—
Repayments of long-term debt	—			(17,500		)
Cash dividends paid - common stock	(17,466		)	(16,685		)
Repurchase of common stock	—			(30,690		)
Issuance of common stock	572			482
Vesting of restricted stock, net of shares held for taxes	(1,066		)	(398		)
Net cash and cash equivalents provided by (used in) financing activities	443,744			356,384
Increase in cash and cash equivalents	2,673			74,374
Cash and cash equivalents at beginning of the period	179,237			142,660
Cash and cash equivalents at end of the period	$	181,910		$	217,034
Supplemental Disclosure of Cash Flow Information
Cash payments for:
Interest	$	22,424		$	14,212
Income taxes	16,400			15,800
Supplemental schedule of noncash investing and financing activities
Transfers between loans and other real estate owned	$	(36	)	$	619
Issuance of common stock in exchange for net assets in acquisition	—			453

See accompanying notes to consolidated financial statements.

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UNION BANKSHARES CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

1. ACCOUNTING POLICIES

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

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

These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2016 Annual Report on Form 10-K. Certain prior period amounts have been reclassified to conform to current period presentation.

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.

Below is a summary of the Company's loan segments:

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.

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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 and six months ended June 30, 2017, the Company recognized amortization of $190,000 and $414,000, respectively, and tax credits of $174,000 and $484,000, respectively, associated with these investments within “Income tax expense” on the Company’s Consolidated Statements of Income. For the three and six months ended June 30, 2016, the Company recognized amortization of $130,000 and $260,000, respectively, and tax credits of $210,000 and $420,000, respectively. The carrying value of the Company’s investments in these qualified affordable housing projects was $9.4 million and $9.9 million as of June 30, 2017 and December 31, 2016, respectively. At June 30, 2017 and December 31, 2016, the Company's recorded liability totaled $4.6 million and $7.1 million, respectively, for the related unfunded commitments, which are expected to be paid from the second half of 2017 through 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 May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers: Topic 606.” This ASU revised guidance for the recognition, measurement, and disclosure of revenue from contracts with customers. The original guidance has been amended through subsequent accounting standard updates that resulted in technical corrections, improvements, and a one-year deferral of the effective date to January 1, 2018. The guidance, as amended, is applicable to all entities and, once effective, will replace significant portions of existing industry and transaction-specific revenue recognition rules with a more principles-

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based recognition model. Most revenue associated with financial instruments, including interest income, loan origination fees, and credit card fees, is outside the scope of the guidance. Gains and losses on investment securities, derivatives, and sales of financial instruments are similarly excluded from the scope. Entities can elect to adopt the guidance either on a full or modified retrospective basis. Full retrospective adoption will require a cumulative effect adjustment to retained earnings as of the beginning of the earliest comparative period presented. Modified retrospective adoption will require a cumulative effect adjustment to retained earnings as of the beginning of the reporting period in which the entity first applies the new guidance. The Company plans to adopt this guidance on the effective date, January 1, 2018. The Company is finalizing its assessment of the adoption of this ASU and the related subsequent technical corrections issued; however, based on the work performed, the Company does not anticipate that there will be a material impact on its consolidated financial statements.

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

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

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.

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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.

In May 2017, the FASB issued ASU No. 2017-09, “Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting.”This ASU relates to changes in the terms or conditions of a share-based payment award. The amendments provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The amendments will be effective for the Company for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted. The Company has concluded the adoption of ASU 2017-09 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 June 30, 2017 and December 31, 2016 are summarized as follows (dollars in thousands):

	Amortized		Gross Unrealized					Estimated
	Cost		Gains		(Losses)			Fair Value
June 30, 2017
Obligations of states and political subdivisions	$	270,206	$	9,087	$	(753	)	$	278,540
Corporate bonds	116,318		1,009		(909		)	116,418
Mortgage-backed securities	548,229		5,417		(1,895		)	551,751
Other securities	13,886		—		(58		)	13,828
Total available for sale securities	$	948,639	$	15,513	$	(3,615	)	$	960,537
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 June 30, 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
June 30, 2017
Obligations of states and political subdivisions	$	27,804	$	(717	)	$	624	$	(36	)	$	28,428	$	(753	)
Mortgage-backed securities	197,560		(1,436		)	41,582		(459		)	239,142		(1,895		)
Corporate bonds and other securities	20,230		(367		)	38,872		(600		)	59,102		(967		)
Total available for sale securities	$	245,594	$	(2,520	)	$	81,078	$	(1,095	)	$	326,672	$	(3,615	)
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 June 30, 2017, there were $81.1 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 June 30, 2017 and December 31, 2016 for the reasons set out below:

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

Obligations of state and political subdivisions. This category’s unrealized losses are primarily the result of interest rate fluctuations and also a certain few ratings downgrades brought about by the impact of the 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 June 30, 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.

	June 30, 2017				December 31, 2016
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due in one year or less	$	23,527	$	23,610	$	21,403	$	21,517
Due after one year through five years	120,077		122,479		108,198		109,778
Due after five years through ten years	276,269		281,588		300,552		301,888
Due after ten years	528,766		532,860		517,444		513,581
Total securities available for sale	$	948,639	$	960,537	$	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 June 30, 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.

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The carrying value, gross unrealized gains and losses, and estimated fair values of securities held to maturity as of June 30, 2017 and December 31, 2016 are summarized as follows (dollars in thousands):

	Carrying		Gross Unrealized					Estimated
	Value (1)		Gains		(Losses)			Fair Value
June 30, 2017
Obligations of states and political subdivisions	$	205,630	$	5,909	$	(93	)	$	211,446
December 31, 2016
Obligations of states and political subdivisions	$	201,526	$	1,617	$	(828	)	$	202,315

(1) The carrying value includes $4.4 million as of June 30, 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 (dollars 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 June 30, 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
June 30, 2017
Obligations of states and political subdivisions	$	3,088	$	(67	)	$	644	$	(26	)	$	3,732	$	(93	)
December 31, 2016
Obligations of states and political subdivisions	$	92,841	$	(747	)	$	648	$	(81	)	$	93,489	$	(828	)

As of June 30, 2017, there was $644,000, or one 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 $26,000. As of December 31, 2016, there was $648,000, or one 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 June 30, 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.

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The following table presents the amortized cost and estimated fair value of held to maturity securities as of June 30, 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.

	June 30, 2017				December 31, 2016
	Carrying Value (1)		Estimated Fair Value		Carrying Value (1)		Estimated Fair Value
Due in one year or less	$	4,797	$	4,826	$	4,403	$	4,440
Due after one year through five years	34,383		35,020		28,383		28,763
Due after five years through ten years	63,538		65,281		51,730		51,522
Due after ten years	102,912		106,319		117,010		117,590
Total securities held to maturity	$	205,630	$	211,446	$	201,526	$	202,315

(1)The carrying value includes $4.4 million as of June 30, 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 June 30, 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 June 30, 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 June 30, 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 June 30, 2017 and December 31, 2016 and FHLB stock in the amount of $42.1 million and $37.0 million as of June 30, 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 and six months ended June 30, 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.

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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 and six months ended June 30, 2017 and 2016 (dollars in thousands).

	Three Months Ended June 30, 2017			Six Months Ended June 30, 2017
Realized gains (losses):
Gross realized gains	$	180		$	661
Gross realized losses	(63		)	(63		)
Net realized gains	$	117		$	598
Proceeds from sales of securities	$	31,320		$	52,626

	Three Months Ended June 30, 2016		Six Months Ended June 30, 2016
Realized gains (losses):
Gross realized gains	$	3	$	242
Gross realized losses	—		(96		)
Net realized gains	$	3	$	146
Proceeds from sales of securities	$	892	$	15,424

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 June 30, 2017 and December 31, 2016 (dollars in thousands):

	June 30, 2017		December 31, 2016
Construction and Land Development	$	799,938	$	751,131
Commercial Real Estate - Owner Occupied	888,285		857,805
Commercial Real Estate - Non-Owner Occupied	1,698,329		1,564,295
Multifamily Real Estate	367,257		334,276
Commercial & Industrial	568,602		551,526
Residential 1-4 Family	1,066,519		1,029,547
Auto	274,162		262,071
HELOC	535,088		526,884
Consumer and all other	573,310		429,525
Total loans held for investment, net (1)	$	6,771,490	$	6,307,060

(1)Loans, as presented, are net of deferred fees and costs totaling $898,000 and $1.8 million as of June 30, 2017 and December 31, 2016, respectively.

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The following table shows the aging of the Company’s loan portfolio, by segment, at June 30, 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	$	602	$	26	$	83	$	2,694	$	5,659	$	790,874	$	799,938
Commercial Real Estate - Owner Occupied	3,148		194		56		17,906		1,279		865,702		888,285
Commercial Real Estate - Non-Owner Occupied	1,530		571		298		16,308		4,765		1,674,857		1,698,329
Multifamily Real Estate	500		—		—		2,047		—		364,710		367,257
Commercial & Industrial	1,652		113		55		751		4,281		561,750		568,602
Residential 1-4 Family	2,477		5,663		2,369		15,087		6,128		1,034,795		1,066,519
Auto	1,562		240		35		—		270		272,055		274,162
HELOC	1,405		964		544		1,156		2,059		528,960		535,088
Consumer and all other	1,891		1,242		185		218		133		569,641		573,310
Total loans held for investment	$	14,767	$	9,013	$	3,625	$	56,167	$	24,574	$	6,663,344	$	6,771,490

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

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The following table shows the PCI loan portfolios, by segment and their delinquency status, at June 30, 2017 (dollars in thousands):

	30-89 Days Past Due		Greater than 90 Days		Current		Total
Construction and Land Development	$	67	$	—	$	2,627	$	2,694
Commercial Real Estate - Owner Occupied	339		650		16,917		17,906
Commercial Real Estate - Non-Owner Occupied	1,195		76		15,037		16,308
Multifamily Real Estate	—		—		2,047		2,047
Commercial & Industrial	109		—		642		751
Residential 1-4 Family	1,138		903		13,046		15,087
HELOC	221		127		808		1,156
Consumer and all other	35		—		183		218
Total	$	3,104	$	1,756	$	51,307	$	56,167

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

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The Company measures the amount of impairment by evaluating loans either in their collective homogeneous pools or individually. The following table shows the Company’s impaired loans, excluding PCI loans, by segment at June 30, 2017 and December 31, 2016 (dollars in thousands):

	June 30, 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	$	10,097	$	10,109	$	—	$	13,877	$	14,353	$	—
Commercial Real Estate - Owner Occupied	5,810		5,981		—		5,886		6,042		—
Commercial Real Estate - Non-Owner Occupied	1,671		1,671		—		1,399		1,399		—
Commercial & Industrial	1,040		1,285		—		648		890		—
Residential 1-4 Family	9,144		10,208		—		8,496		9,518		—
HELOC	1,174		1,351		—		1,017		1,094		—
Consumer and all other	605		716		—		230		427		—
Total impaired loans without a specific allowance	$	29,541	$	31,321	$	—	$	31,553	$	33,723	$	—
Loans with a specific allowance
Construction and Land Development	$	5,136	$	5,331	$	720	$	1,395	$	1,404	$	107
Commercial Real Estate - Owner Occupied	631		631		3		646		646		4
Commercial Real Estate - Non-Owner Occupied	7,991		8,040		640		2,809		2,809		474
Commercial & Industrial	5,836		5,945		1,034		857		880		14
Residential 1-4 Family	3,834		4,071		424		3,335		3,535		200
Auto	270		393		1		169		235		1
HELOC	937		962		70		323		433		15
Consumer and all other	24		88		1		62		298		1
Total impaired loans with a specific allowance	$	24,659	$	25,461	$	2,893	$	9,596	$	10,240	$	816
Total impaired loans	$	54,200	$	56,782	$	2,893	$	41,149	$	43,963	$	816

The following tables show the average recorded investment and interest income recognized for the Company’s impaired loans, excluding PCI loans, by segment for the three and six months ended June 30, 2017 and 2016 (dollars in thousands):

	Three Months Ended June 30, 2017				Six Months Ended June 30, 2017
	Average Investment		Interest Income Recognized		Average Investment		Interest Income Recognized
Construction and Land Development	$	15,111	$	119	$	14,939	$	235
Commercial Real Estate - Owner Occupied	6,471		61		6,507		122
Commercial Real Estate - Non-Owner Occupied	9,675		48		9,698		139
Commercial & Industrial	6,942		41		7,212		72
Residential 1-4 Family	13,311		43		13,372		108
Auto	347		2		368		2
HELOC	2,265		1		2,273		5
Consumer and all other	564		8		405		7
Total impaired loans	$	54,686	$	323	$	54,774	$	690

-18-

	Three Months Ended June 30, 2016				Six Months Ended June 30, 2016
	Average Investment		Interest Income Recognized		Average Investment		Interest Income Recognized
Construction and Land Development	$	30,524	$	495	$	30,174	$	962
Commercial Real Estate - Owner Occupied	13,567		148		13,719		292
Commercial Real Estate - Non-Owner Occupied	4,215		43		4,216		79
Multifamily Real Estate	3,791		60		3,804		120
Commercial & Industrial	2,622		31		2,861		61
Residential 1-4 Family	14,189		90		14,365		183
Auto	162		—		183		—
HELOC	2,492		11		2,519		29
Consumer and all other	374		1		572		4
Total impaired loans	$	71,936	$	879	$	72,413	$	1,730

The Company considers TDRs to be impaired loans. A modification of a loan’s terms constitutes a TDR if the creditor grants a concession that it would not otherwise consider to the borrower for economic or legal reasons related to the borrower’s financial difficulties. All loans that are considered to be TDRs are evaluated for impairment in accordance with the Company’s allowance for loan loss methodology and are included in the preceding impaired loan tables. For the three and six months ended June 30, 2017, the recorded investment in TDRs 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 June 30, 2017 and December 31, 2016 (dollars in thousands):

	June 30, 2017					December 31, 2016
	No. of Loans	Recorded Investment		Outstanding Commitment		No. of Loans	Recorded Investment		Outstanding Commitment
Performing
Construction and Land Development	7	$	3,282	$	—	8	$	3,793	$	—
Commercial Real Estate - Owner Occupied	6	2,579		—		7	3,106		—
Commercial Real Estate - Non-Owner Occupied	2	1,631		—		2	2,390		—
Commercial & Industrial	13	2,194		—		3	533		—
Residential 1-4 Family	32	4,766		—		28	4,145		—
Consumer and all other	1	495		—		—	—		—
Total performing	61	$	14,947	$	—	48	$	13,967	$	—
Nonperforming
Construction and Land Development	5	$	502	$	—	2	$	215	$	—
Commercial Real Estate - Owner Occupied	3	616		—		2	156		—
Commercial Real Estate - Non-Owner Occupied	1	2,050		—		—	—		—
Commercial & Industrial	1	86		—		1	116		—
Residential 1-4 Family	10	1,200		—		8	948		—
Total nonperforming	20	$	4,454	$	—	13	$	1,435	$	—
Total performing and nonperforming	81	$	19,401	$	—	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 and six months ended June 30, 2017, the Company identified five TDRs, totaling approximately $1.1 million that went into default that had been restructured in the twelve-month period prior to default; these loans consisted of commercial real estate - owner occupied, residential 1-4 family, and construction and land development loans. During the three and six months ended June 30, 2016, the Company did not identify any TDRs that went into default that had been restructured in the twelve-month period prior to default.

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The following table shows, by segment and modification type, TDRs that occurred during the three and six months ended June 30, 2017 (dollars in thousands):

	Three Months Ended June 30, 2017			Six Months Ended June 30, 2017
	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
Construction and Land Development	3	$	1,084	3	$	1,084
Commercial Real Estate - Non-Owner Occupied	—	—		2	1,631
Commercial & Industrial	2	157		4	973
Residential 1-4 Family	2	562		5	939
Consumer and all other	1	495		1	495
Total loan term extended at a market rate	8	$	2,298	15	$	5,122
Term modification, below market rate
Commercial Real Estate - Owner Occupied	1	$	844	1	$	844
Commercial & Industrial	1	85		3	195
Residential 1-4 Family	3	244		7	1,107
Total loan term extended at a below market rate	5	$	1,173	11	$	2,146
Total	13	$	3,471	31	$	7,929

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

	Three Months Ended June 30, 2016			Six Months Ended June 30, 2016
	No. of Loans	Recorded  Investment at Period End		No. of Loans	Recorded  Investment at Period End
Term modification, at a market rate
Construction and Land Development	1	$	1,193	1	$	1,193
Commercial Real Estate - Owner Occupied	1	38		2	743
Residential 1-4 Family	1	100		2	476
Total loan term extended at a market rate	3	$	1,331	5	$	2,412
Term modification, below market rate
Residential 1-4 Family	1	$	37	1	$	37
Total loan term extended at a below market rate	1	$	37	1	$	37
Interest rate modification, below market rate
Commercial & Industrial	1	$	135	1	$	135
Total interest only at below market rate of interest	1	$	135	1	$	135
Total	5	$	1,503	7	$	2,584

-20-

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 six months ended and as of June 30, 2017. The table below includes the provision for loan losses. 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	$	45	$	(253	)	$	(792	)	$	9,055
Commercial Real Estate - Owner Occupied	3,801		65		—			(514		)	3,352
Commercial Real Estate - Non-Owner Occupied	6,622		1		(677		)	1,390			7,336
Multifamily Real Estate	1,236		—		—			(117		)	1,119
Commercial & Industrial	4,627		262		(557		)	1,282			5,614
Residential 1-4 Family	6,399		266		(466		)	49			6,248
Auto	946		249		(586		)	311			920
HELOC	1,328		202		(573		)	383			1,340
Consumer and all other	2,178		582		(1,848		)	2,318			3,230
Total	$	37,192	$	1,672	$	(4,960	)	$	4,310		$	38,214

	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	$	15,233	$	720	$	782,011	$	8,335	$	2,694	$	—	$	799,938	$	9,055
Commercial Real Estate - Owner Occupied	6,441		3		863,938		3,349		17,906		—		888,285		3,352
Commercial Real Estate - Non-Owner Occupied	9,662		640		1,672,359		6,696		16,308		—		1,698,329		7,336
Multifamily Real Estate	—		—		365,210		1,119		2,047		—		367,257		1,119
Commercial & Industrial	6,876		1,034		560,975		4,580		751		—		568,602		5,614
Residential 1-4 Family	12,978		424		1,038,454		5,824		15,087		—		1,066,519		6,248
Auto	270		1		273,892		919		—		—		274,162		920
HELOC	2,111		70		531,821		1,270		1,156		—		535,088		1,340
Consumer and all other	629		1		572,463		3,229		218		—		573,310		3,230
Total loans held for investment, net	$	54,200	$	2,893	$	6,661,123	$	35,321	$	56,167	$	—	$	6,771,490	$	38,214

-21-

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 six months ended and as of June 30, 2016. In addition, a $100,000 provision was recognized during the six months ended June 30, 2016 for unfunded loan commitments for which the reserves are recorded as a component of “Other Liabilities” on the Company’s Consolidated Balance Sheets. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories (dollars in thousands):

	Allowance for loan losses
	Balance, beginning of the year		Recoveries credited to allowance		Loans charged off			Provision charged to operations			Balance, end of period
Construction and Land Development	$	6,040	$	97	$	(859	)	$	5,030		$	10,308
Commercial Real Estate - Owner Occupied	4,614		62		(772		)	129			4,033
Commercial Real Estate - Non-Owner Occupied	6,929		—		—			(1,536		)	5,393
Multifamily Real Estate	1,606		—		—			(697		)	909
Commercial & Industrial	3,163		355		(1,285		)	1,793			4,026
Residential 1-4 Family	5,414		381		(295		)	600			6,100
Auto	1,703		131		(525		)	(470		)	839
HELOC	2,934		132		(800		)	(948		)	1,318
Consumer and all other	1,644		330		(729		)	903			2,148
Total	$	34,047	$	1,488	$	(5,265	)	$	4,804		$	35,074

	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	$	31,710	$	64	$	729,274	$	10,244	$	5,013	$	—	$	765,997	$	10,308
Commercial Real Estate - Owner Occupied	13,492		49		797,696		3,984		20,692		—		831,880		4,033
Commercial Real Estate - Non-Owner Occupied	4,260		1		1,348,188		5,392		18,297		—		1,370,745		5,393
Multifamily Real Estate	3,777		—		331,854		909		2,092		—		337,723		909
Commercial & Industrial	2,488		47		465,212		3,979		1,354		—		469,054		4,026
Residential 1-4 Family	13,945		345		960,707		5,755		17,805		—		992,457		6,100
Auto	140		1		244,435		838		—		—		244,575		839
HELOC	2,337		81		515,342		1,237		1,517		—		519,196		1,318
Consumer and all other	326		1		408,745		2,147		400		—		409,471		2,148
Total loans held for investment, net	$	72,475	$	589	$	5,801,453	$	34,485	$	67,170	$	—	$	5,941,098	$	35,074

-22-

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 June 30, 2017 (dollars in thousands):

	Pass		Special Mention		Substandard		Doubtful		Total
Construction and Land Development	$	726,106	$	58,155	$	12,883	$	100	$	797,244
Commercial Real Estate - Owner Occupied	824,793		41,397		4,189		—		870,379
Commercial Real Estate - Non-Owner Occupied	1,648,876		23,666		9,479		—		1,682,021
Multifamily Real Estate	358,597		6,613		—		—		365,210
Commercial & Industrial	543,951		18,291		5,609		—		567,851
Residential 1-4 Family	1,021,053		22,903		4,995		2,481		1,051,432
Auto	271,701		2,254		77		130		274,162
HELOC	528,606		3,501		1,245		580		533,932
Consumer and all other	570,248		2,226		509		109		573,092
Total	$	6,493,931	$	179,006	$	38,986	$	3,400	$	6,715,323

-23-

The following table shows the recorded investment in all loans, excluding PCI loans, by segment with their related risk level as of December 31, 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 June 30, 2017 (dollars in thousands):

	Pass		Special Mention		Substandard		Doubtful		Total
Construction and Land Development	$	1,121	$	1,297	$	276	$	—	$	2,694
Commercial Real Estate - Owner Occupied	5,617		8,337		3,952		—		17,906
Commercial Real Estate - Non-Owner Occupied	12,807		2,230		1,271		—		16,308
Multifamily Real Estate	338		1,709		—		—		2,047
Commercial & Industrial	105		368		278		—		751
Residential 1-4 Family	7,735		4,624		1,850		878		15,087
HELOC	808		221		11		116		1,156
Consumer and all other	158		49		11		—		218
Total	$	28,689	$	18,835	$	7,649	$	994	$	56,167

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.

-24-

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 Six Months Ended June 30,
	2017			2016
Balance at beginning of period	$	19,739		$	22,139
Accretion	(3,188		)	(2,792		)
Reclass of nonaccretable difference due to improvement in expected cash flows	2,072			3,450
Other, net (1)	(875		)	(2,139		)
Balance at end of period	$	17,748		$	20,658

(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 $56.2 million at June 30, 2017 and $59.3 million at December 31, 2016. The outstanding balance of the Company’s PCI loan portfolio totaled $68.9 million at June 30, 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 $996.8 million at June 30, 2017 and $1.1 billion at December 31, 2016; the remaining discount on these loans totaled $15.4 million at June 30, 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 2017 and determined that there was no impairment to its goodwill or intangible assets.

Amortization expense of core deposit intangibles for the three and six months ended June 30, 2017 totaled $1.4 million and $2.9 million, respectively; and the three and six months ended June 30, 2016 totaled $1.7 million and $3.6 million, respectively. Amortization expense of other intangibles for both the three and six months ended June 30, 2017 totaled $120,000 and $240,000, respectively and $0 for theboththree and sixmonths endedJune 30, 2016. As of June 30, 2017, the estimated remaining amortization expense of intangibles is as follows (dollars in thousands):

For the remaining six months of 2017	$	2,890
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	$	17,422

-25-

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 June 30, 2017 and December 31, 2016 (dollars in thousands):

	June 30, 2017			December 31, 2016
Securities sold under agreements to repurchase	$	34,543		$	59,281
Other short-term borrowings	602,000			517,500
Total short-term borrowings	$	636,543		$	576,781
Maximum month-end outstanding balance	$	696,529		$	678,262
Average outstanding balance during the period	586,476			590,074
Average interest rate (year-to-date)	0.81		%	0.49		%
Average interest rate at end of period	1.02		%	0.60		%
Other short-term borrowings:
FHLB	602,000			517,500
Other lines of credit	—			—

The Bank maintains federal funds lines with several correspondent banks; the remaining available balance was $185.0 million and $175.0 million at both June 30, 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 June 30, 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 $2.6 billion and $2.4 billion at June 30, 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 $6.6 million at June 30, 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	%	4.05	%	6/17/2034
Trust Preferred Capital Note - Statutory Trust II	36,000,000		1,114,000		1.40	%	2.70	%	6/15/2036
VFG Limited Liability Trust I Indenture	20,000,000		619,000		2.73	%	4.03	%	3/18/2034
FNB Statutory Trust II Indenture	12,000,000		372,000		3.10	%	4.40	%	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" on 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

-26-

plus 3.175% through its maturity date in December 15, 2026. At June 30, 2017 and December 31, 2016, the carrying value of the subordinated debt was $150.0 million, with a remaining discount of $1.9 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 and six months ended June 30, 2017 and 2016 was $478,000 and $947,000 and $466,000 and $930,000, 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 June 30, 2017 that had a remaining fair value premium of $336,000.

As of June 30, 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	%	1.74	%	8/23/2022	$	55,000
Adjustable Rate Credit	0.45	%	1.75	%	11/23/2022	65,000
Adjustable Rate Credit	0.45	%	1.75	%	11/23/2022	10,000
Adjustable Rate Credit	0.45	%	1.75	%	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
Fixed Rate Hybrid	—		1.58	%	5/18/2020	20,000
						$	210,000
(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 June 30, 2017 and December 31, 2016, refer to Note 6 "Commitments and Contingencies".

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As of June 30, 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 six months of 2017	$	—	$	—	$	10,000	$	(25	)	$	(974	)	$	9,001
2018	—		—		40,000		(343		)	(1,970		)	37,687
2019	—		—		—		(486		)	(2,018		)	(2,504		)
2020	—		—		20,000		(501		)	(2,074		)	17,425
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	$	210,000	$	(8,179	)	$	(10,862	)	$	434,260

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 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 June 30, 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.

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

	June 30, 2017		December 31, 2016
Commitments with off-balance sheet risk:
Commitments to extend credit (1)	$	2,001,802	$	1,924,885
Standby letters of credit	117,949		84,212
Total commitments with off-balance sheet risk	$	2,119,751	$	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 period ended June 30, 2017, the aggregate amount of daily average required reserves was approximately $71.6 million and was satisfied by vault cash holdings and deposits maintained with the Federal Reserve Bank.

As of June 30, 2017, the Company had approximately $42.4 million in deposits in other financial institutions, of which $20.2 million served as collateral for cash flow and loan swap derivatives. The Company had approximately $20.9 million in deposits in other financial institutions that were uninsured at June 30, 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 mortgage loans previously sold based on historical statistics and loss rates; as of June 30, 2017 and December 31, 2016, the Company’s indemnification reserve was approximately $334,000 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 June 30, 2017 and December 31, 2016 (dollars in thousands):

	Pledged Assets as of June 30, 2017
	Cash		AFS Securities (1)		HTM Securities (1)		Loans (2)		Total
Public deposits	$	—	$	224,984	$	209,235	$	—	$	434,219
Repurchase agreements	—		92,678		—		—		92,678
FHLB advances	—		1,162		—		2,239,193		2,240,355
Derivatives	20,177		4,074		—		—		24,251
Other purposes	—		16,109		—		—		16,109
Total pledged assets	$	20,177	$	339,007	$	209,235	$	2,239,193	$	2,807,612

(1) Balance represents market value.

(2) Balance represents book value.

	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 reclassified 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 June 30, 2018 is $391,000.

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 June 30, 2017 and December 31, 2016, the aggregate notional amount of the related hedged items totaled $79.6 million and $65.9 million, respectively, and the fair value of the related hedged items was an unrealized loss of $547,000 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 June 30, 2017 and December 31, 2016, segregated by derivatives that are considered accounting hedges and those that are not (dollars in thousands):

	June 30, 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	$	152,500		$	153	$	9,995	$	188,500		$	211	$	9,619
Fair value hedges	79,560			1,282		368		65,920			1,437		296
Derivatives not designated as accounting hedges:
Loan Swaps
Pay fixed - receive floating interest rate swaps	492,158			2,770		—		373,355			—		1,005
Pay floating - receive fixed interest rate swaps	492,158			—		2,770		373,355			1,005		—
Other contracts:
Interest rate lock commitments	55,062			724		—		48,743			610		—
Best efforts forward delivery commitments	94,853			235		—		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 and six months ended June 30, 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 - March 31, 2017	$	2,782		$	3,193		$	(5,030	)	$	(1,356	)	$	(411	)
Other comprehensive income (loss)	5,027			—			(775		)	—			4,252
Amounts reclassified from accumulated other comprehensive income	(76		)	(160		)	318			85			167
Net current period other comprehensive income (loss)	4,951			(160		)	(457		)	85			4,419
Balance - June 30, 2017	$	7,733		$	3,033		$	(5,487	)	$	(1,271	)	$	4,008

	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)	8,664			—			(807		)	—			7,857
Amounts reclassified from accumulated other comprehensive income	(389		)	(344		)	499			194			(40		)
Net current period other comprehensive income (loss)	8,275			(344		)	(308		)	194			7,817
Balance - June 30, 2017	$	7,733		$	3,033		$	(5,487	)	$	(1,271	)	$	4,008

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

	Unrealized Gains (Losses) on AFS Securities			Unrealized Gain for AFS Securities Transferred to HTM			Change in Fair Value of Cash Flow Hedge			Total
Balance - March 31, 2016	$	10,716		$	4,140		$	(8,497	)	$	6,359
Other comprehensive income (loss)	3,698			—			(1,007		)	2,691
Amounts reclassified from accumulated other comprehensive income	(2		)	(287		)	138			(151		)
Net current period other comprehensive income (loss)	$	3,696		$	(287	)	$	(869	)	$	2,540
Balance - June 30, 2016	$	14,412		$	3,853		$	(9,366	)	$	8,899

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	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)	6,730			—			(3,688		)	3,042
Amounts reclassified from accumulated other comprehensive income	(95		)	(579		)	279			(395		)
Net current period other comprehensive income (loss)	6,635			(579		)	(3,409		)	2,647
Balance - June 30, 2016	$	14,412		$	3,853		$	(9,366	)	$	8,899

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 $117,000 and $598,000 for the three and six months ended June 30, 2017, respectively, and $3,000 and $146,000 for the three and six months ended June 30, 2016, respectively, related to the sale of securities. The tax effects of these transactions during the three and six months ended June 30, 2017 were $41,000 and $209,000, respectively, and were $1,000 and $51,000 during the three and six months ended June 30, 2016, 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 $246,000 and $529,000 for the three and six months ended June 30, 2017, respectively, and $442,000 and $891,000 for the three and six months ended June 30, 2016, respectively. The tax effect of these transactions during the three and six months ended June 30, 2017 were $86,000 and $185,000, respectively, and were $155,000 and $312,000 for the three and six months ended June 30, 2016, 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 $489,000 and $768,000 for the three and six months ended June 30, 2017, respectively, and $212,000 and $429,000 for the three and six months ended June 30, 2016, respectively. The tax effects of these transactions during the three and six months ended June 30, 2017 were $171,000 and $269,000, respectively, and were $74,000 and $150,000 during the three and six months ended June 30, 2016, 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 $85,000 and $194,000 for the three and six months ended June 30, 2017, respectively, and $0 for the both three and six months ended June 30, 2016.

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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 June 30, 2017 and December 31, 2016. The interest rate lock commitments are recorded as a component of “Other Assets” on the Company’s Consolidated Balance Sheets.

Securities available for sale

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

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

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

The Company primarily uses Bloomberg Valuation Service, an independent information source that draws on quantitative models and market data contributed from over 4,000 market participants, to validate third party valuations. Any material differences between valuation sources are researched by further analyzing the various inputs that are utilized by each pricing source. No material differences were identified during the validation as of June 30, 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 June 30, 2017 and December 31, 2016 (dollars in thousands): 

	Fair Value Measurements at June 30, 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	$	—	$	278,540	$	—	$	278,540
Corporate and other bonds	—		116,418		—		116,418
Mortgage-backed securities	—		551,751		—		551,751
Other securities	—		13,828		—		13,828
Loans held for sale	—		41,135		—		41,135
Derivatives:
Interest rate swap	—		2,770		—		2,770
Cash flow hedges	—		153		—		153
Fair value hedges	—		1,282		—		1,282
Interest rate lock commitments	—		—		724		724
Best efforts forward delivery commitments	—		—		235		235
LIABILITIES
Derivatives:
Interest rate swap	$	—	$	2,770	$	—	$	2,770
Cash flow hedges	—		9,995		—		9,995
Fair value hedges	—		368		—		368

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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). At June 30, 2017 and December 31, 2016, the Level 3 weighted average adjustments related to impaired loans were 3.2% 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. At June 30, 2017 and December 31, 2016, the Level 3 weighted average adjustments related to OREO were approximately 25.3% and 25.1%, respectively.

Total valuation expenses related to OREO properties for the three months ended June 30, 2017 and 2016 totaled $19,000 and $274,000, respectively. Total valuation expenses related to OREO properties for the six months ended June 30, 2017 and 2016 totaled $257,000 and $400,000, respectively.

The following tables summarize the Company’s financial assets that were measured at fair value on a nonrecurring basis at June 30, 2017 and December 31, 2016 (dollars in thousands):

	Fair Value Measurements at June 30, 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	$	—	$	—	$	18,320	$	18,320
Other real estate owned	—		—		9,482		9,482

	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 June 30, 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 June 30, 2017 and December 31, 2016 are as follows (dollars in thousands):

			Fair Value Measurements at June 30, 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	$	181,910	$	181,910	$	—	$	—	$	181,910
Securities available for sale	960,537		—		960,537		—		960,537
Held to maturity securities	205,630		—		211,446		—		211,446
Restricted stock	69,631		—		69,631		—		69,631
Loans held for sale	41,135		—		41,135		—		41,135
Net loans	6,733,276		—		—		6,745,405		6,745,405
Derivatives:
Interest rate swap	2,770		—		2,770		—		2,770
Cash flow hedge	153		—		153		—		153
Fair value hedge	1,282		—		1,282		—		1,282
Interest rate lock commitments	724		—		—		724		724
Best efforts forward delivery commitments	235		—		—		235		235
Accrued interest receivable	23,801		—		23,801		—		23,801
Bank owned life insurance	180,110		—		180,110		—		180,110
LIABILITIES
Deposits	$	6,764,434	$	—	$	6,756,022	$	—	$	6,756,022
Borrowings	1,070,803		—		1,051,143		—		1,051,143
Accrued interest payable	2,196		—		2,196		—		2,196
Derivatives:
Interest rate swap	2,770		—		2,770		—		2,770
Cash flow hedges	9,995		—		9,995		—		9,995
Fair value hedges	368		—		368		—		368

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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 102,984 and 407 shares underlying anti-dilutive awards for the three months ended June 30, 2017 and 2016, respectively, and there were approximately 72,951 and 1,116 shares underlying anti-dilutive awards for the six months ended June 30, 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 and six months ended June 30, 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 June 30, 2017
Net income, basic	$	17,956	43,693	$	0.41
Add: potentially dilutive common shares - stock awards	—		91	—
Diluted	$	17,956	43,784	$	0.41
Three months ended June 30, 2016
Net income, basic	$	19,337	43,747	$	0.44
Add: potentially dilutive common shares - stock awards	—		77	—
Diluted	$	19,337	43,824	$	0.44
Six months ended June 30, 2017
Net income, basic	$	37,080	43,674	$	0.85
Add: potentially dilutive common shares - stock awards	—		81	—
Diluted	$	37,080	43,755	$	0.85
Six months ended June 30, 2016
Net income, basic	$	36,298	43,999	$	0.82
Add: potentially dilutive common shares - stock awards	—		77	—
Diluted	$	36,298	44,076	$	0.82

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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 112 retail locations in Virginia as of June 30, 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 and six months ended June 30, 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.

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Information about reportable segments and reconciliation of such information to the consolidated financial statements for the three and six months ended June 30, 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 June 30, 2017
Net interest income	$	68,580	$	419		$	—		$	68,999
Provision for credit losses	2,184		(11		)	—			2,173
Net interest income after provision for credit losses	66,396		430			—			66,826
Noninterest income	15,203		2,993			(140		)	18,056
Noninterest expenses	57,496		2,574			(140		)	59,930
Income before income taxes	24,103		849			—			24,952
Income tax expense	6,698		298			—			6,996
Net income	$	17,405	$	551		$	—		$	17,956
Total assets	$	8,904,819	$	105,429		$	(95,061	)	$	8,915,187
Three Months Ended June 30, 2016
Net interest income	$	65,478	$	298		$	—		$	65,776
Provision for credit losses	2,260		40			—			2,300
Net interest income after provision for credit losses	63,218		258			—			63,476
Noninterest income	14,940		3,207			(154		)	17,993
Noninterest expenses	52,766		2,639			(154		)	55,251
Income before income taxes	25,392		826			—			26,218
Income tax expense	6,594		287			—			6,881
Net income	$	18,798	$	539		$	—		$	19,337
Total assets	$	8,094,176	$	75,802		$	(69,417	)	$	8,100,561
Six Months Ended June 30, 2017
Net interest income	$	134,816	$	751		$	—		$	135,567
Provision for credit losses	4,288		7			—			4,295
Net interest income after provision for credit losses	130,528		744			—			131,272
Noninterest income	31,959		5,216			(281		)	36,894
Noninterest expenses	112,510		5,096			(281		)	117,325
Income before income taxes	49,977		864			—			50,841
Income tax expense	13,452		309			—			13,761
Net income	$	36,525	$	555		$	—		$	37,080
Total assets	$	8,904,819	$	105,429		$	(95,061	)	$	8,915,187
Six Months Ended June 30, 2016
Net interest income	$	128,903	$	604		$	—		$	129,507
Provision for credit losses	4,760		144			—			4,904
Net interest income after provision for credit losses	124,143		460			—			124,603
Noninterest income	28,548		5,684			(325		)	33,907
Noninterest expenses	104,610		5,238			(325		)	109,523
Income before income taxes	48,081		906			—			48,987
Income tax expense	12,376		313			—			12,689
Net income	$	35,705	$	593		$	—		$	36,298
Total assets	$	8,094,176	$	75,802		$	(69,417	)	$	8,100,561

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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 June 30, 2017, and the related consolidated statements of income and comprehensive income for the three and six-month periods ended June 30, 2017 and 2016, and the consolidated statements of changes in stockholders’ equity and cash flows for the six-month periods ended June 30, 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

August 8, 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 and six months ended June 30, 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:

• the possibility that any of the anticipated benefits of the acquisition of Xenith pursuant to a definitive merger agreement between the Company and Xenith, dated as of May 19, 2017 (the “Pending Merger”) with Xenith will not be realized or will not be realized within the expected time period, the businesses of the Company and Xenith may not be integrated successfully or such integration may be more difficult, time-consuming or costly than expected, the expected revenue synergies and cost savings from the Pending Merger may not be fully realized or realized within the expected time frame, revenues following the Pending Merger may be lower than expected, customer and employee relationships and business operations may be disrupted by the Pending Merger, or obtaining required regulatory and shareholder approvals, or completing the Pending Merger on the expected timeframe, may be more difficult, time-consuming or costly than expected,

• 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.

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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, this Quarterly Report on Form 10-Q for the quarter ended June 30, 2017, 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.

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 “Management's Discussion & Analysis of Financial Condition and Operations—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 112 bank branches and approximately 173 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 June 30, 2017, the Company reported net income of $18.0 million and earnings per share of $0.41. Excluding after-tax acquisition and conversion costs of $2.4 million, net operating earnings⁽¹⁾ were $20.3 million and operating earnings per share⁽¹⁾ were $0.46 for the second quarter of 2017. The Company's net operating earnings and operating earnings per share for the second quarter of 2017 represent an increase of $977,000, or 5.1%, over net income and an increase of $0.02, or 4.5%, over earnings per share, in each case compared to the second quarter of 2016. This increase is primarily attributable to increases in net interest income, driven by higher average loan and investment balances.

For the six months ended June 30, 2017, the Company reported net income of $37.1 million and earnings per share of $0.85. Excluding after-tax acquisition and conversion costs of $2.4 million, net operating earnings⁽¹⁾ were $39.4 million and operating earnings per share⁽¹⁾ were $0.90 for the first six months of 2017. The Company's net operating earnings and operating earnings per share for the first six months of 2017 represent an increase of $3.1 million, or 8.7%, over net income and an increase of $0.08, or 9.8%, over earnings per share, in each case compared to the first six months of 2016. This increase is primarily

attributable to increases in net interest income, driven by higher average loan balances, as well as higher overall noninterest income.

• The Company entered into a definitive merger agreement to acquire Xenith in the Pending Merger, which is expected to close in early January 2018, subject to customary closing conditions, including regulatory and shareholder approvals.

• Net income for the community bank segment was $17.4 million, or $0.40 per share, for the second quarter of 2017, compared to $18.8 million, or $0.43 per share, for the second quarter of 2016. Net operating earnings⁽¹⁾ for the community bank segment were $19.8 million, or $0.45 per share, for the second quarter of 2017. Net income for the community bank segment was $36.5 million, or $0.84 per share, for the six months ended June 30, 2017, compared to $35.7 million, or $0.81 per share, for the six months ended June 30, 2016. Net operating earnings⁽¹⁾ for the community bank segment were $38.9 million, or $0.89 per share, for the six months ended June 30, 2017.

• The mortgage segment reported net income of $551,000 for the second quarter of 2017, compared to net income of $539,000 in the second quarter of 2016. The mortgage segment reported net income of $555,000 for the six months ended June 30, 2017 compared to $593,000 for the six months ended June 30, 2016.

• ROA was 0.82% for the quarter ended June 30, 2017 compared to 0.98% for the second quarter of 2016. Operating ROA⁽¹⁾ for the quarter ended June 30, 2017 was 0.93%. ROA was 0.87% for the six months ended June 30, 2017 compared to 0.93% for the six months ended June 30, 2016. Operating ROA⁽¹⁾ for the six months ended June 30, 2017 was 0.92%.

• ROE was 7.02% for the quarter ended June 30, 2017 compared to 7.88% for the second quarter of 2016. Operating ROE⁽¹⁾ for the quarter ended June 30, 2017 was 7.94%. ROE was 7.34% for the six months ended June 30, 2017 compared to 7.39% for the six months ended June 30, 2016. Operating ROE⁽¹⁾ for the six months ended June 30, 2017 was 7.81%.

• ROTCE was 10.15% for the quarter ended June 30, 2017 compared to 11.60% for the second quarter of 2016. Operating ROTCE⁽¹⁾ for the quarter ended June 30, 2017 was 11.48%. ROTCE was 10.66% for the six months ended June 30, 2017 compared to 10.86% for the six months ended June 30, 2016. Operating ROTCE⁽¹⁾ for the six months ended June 30, 2017 was 11.34%.

• Loans held for investment grew $464.4 million, or 14.7% (annualized), from December 31, 2016. Quarterly average loans held for investment increased $765.0 million, or 13.0%, compared to the quarter ended June 30, 2016.

• Deposits grew $384.9 million, or 12.1% (annualized), from December 31, 2016. Quarterly average deposits increased $612.2 million, or 10.2%, compared to the quarter ended June 30, 2016.

(1)For a reconciliation of the non-GAAP operating measures that exclude acquisition and conversion costs unrelated to the Company’s normal operations, refer to “Non-GAAP Measures” section in this Item 2 of this Form 10-Q.

-47-

Net Interest Income

	For the Three Months Ended June 30,
	2017			2016			Change
	(Dollars in thousands)
Average interest-earning assets	$	7,934,405		$	7,153,627		$	780,778
Interest income	$	81,221		$	72,781		$	8,440
Interest income (FTE) (1)	$	83,869		$	75,232		$	8,637
Yield on interest-earning assets	4.11		%	4.09		%	2			bps
Yield on interest-earning assets (FTE) (1)	4.24		%	4.23		%	1			bps
Average interest-bearing liabilities	$	6,203,373		$	5,523,926		$	679,447
Interest expense	$	12,222		$	7,005		$	5,217
Cost of interest-bearing liabilities	0.79		%	0.51		%	28			bps
Cost of funds	0.62		%	0.39		%	23			bps
Net interest income	$	68,999		$	65,776		$	3,223
Net interest income (FTE) (1)	$	71,647		$	68,227		$	3,420
Net interest margin	3.49		%	3.70		%	(21		)	bps
Net interest margin (FTE) (1)	3.62		%	3.84		%	(22		)	bps
Core net interest margin (FTE) (1)(2)	3.54		%	3.76		%	(22		)	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 second quarter of 2017, net interest income was $69.0 million, an increase of $3.2 million from the second quarter of 2016. For the second quarter of 2017, tax-equivalent net interest income was $71.6 million, an increase of $3.4 million from the second quarter of 2016. The increases in both net interest income and tax-equivalent net interest income were primarily driven by higher average loan and investment balances. Net accretion related to acquisition accounting increased $215,000 from the second quarter of 2016 to $1.6 million in the second quarter of 2017. In the second quarter of 2017, net interest margin decreased 21 basis points to 3.49% from 3.70% in the second quarter of 2016, while tax-equivalent net interest margin decreased by 22 basis points to 3.62% compared to 3.84% for the same periods. Core tax-equivalent net interest margin (which excludes the 8 basis point impact of acquisition accounting accretion in both the second quarters of 2017 and 2016) decreased by 22 basis points to 3.54% in the second quarter of 2017 from 3.76% in the second quarter of 2016. The net decreases in net interest margin and tax-equivalent net interest margin measures were primarily driven by the increase in cost of funds slightly offset by the increase in interest-earning asset yields. The increase in the cost of funds was primarily attributable to subordinated debt that the Company issued in the fourth quarter of 2016 as well as increased interest-bearing deposit and short-term borrowing rates.

-48-

	For the Six Months Ended June 30,
	2017			2016			Change
	(Dollars in thousands)
Average interest-earning assets	$	7,798,427		$	7,061,307		$	737,120
Interest income	$	157,861		$	143,530		$	14,331
Interest income (FTE) (1)	$	163,049		$	148,471		$	14,578
Yield on interest-earning assets	4.08		%	4.09		%	(1		)	bps
Yield on interest-earning assets (FTE) (1)	4.22		%	4.23		%	(1		)	bps
Average interest-bearing liabilities	$	6,102,228		$	5,451,862		$	650,366
Interest expense	$	22,294		$	14,023		$	8,271
Cost of interest-bearing liabilities	0.74		%	0.52		%	22			bps
Cost of funds	0.58		%	0.40		%	18			bps
Net interest income	$	135,567		$	129,507		$	6,060
Net interest income (FTE) (1)	$	140,755		$	134,448		$	6,307
Net interest margin	3.51		%	3.69		%	(18		)	bps
Net interest margin (FTE) (1)	3.64		%	3.83		%	(19		)	bps
Core net interest margin (FTE) (1)(2)	3.56		%	3.76		%	(20		)	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 six months of 2017, net interest income was $135.6 million, an increase of $6.1 million from the first six months of 2016. For the first six months of 2017, tax-equivalent net interest income was $140.8 million, an increase of $6.3 million from the first six months of 2016. The increases in both net interest income and tax-equivalent net interest income were primarily driven by higher average loan balances. Net accretion related to acquisition accounting increased $562,000 from the first six months of 2016 to $3.1 million in the first six months of 2017. In the first six months of 2017, net interest margin decreased 18 basis points to 3.51% from 3.69% in the first six months of 2016, while tax-equivalent net interest margin decreased by 19 basis points to 3.64% compared to 3.83% for the same periods. Core tax-equivalent net interest margin (which excludes the 8 basis point impact of acquisition accounting accretion in the first six months of 2017 and 7 basis points the first six months of 2016) decreased by 20 basis points to 3.56% in the first six months of 2017 from 3.76% in the first six months of 2016. The net decreases in net interest margin and tax-equivalent net interest margin measures were primarily driven by the increase in cost of funds, which was primarily attributable to subordinated debt that the Company issued in the fourth quarter of 2016 as well as increased interest-bearing deposit and short-term borrowing rates.

-49-

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

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

	For the Three Months Ended June 30,
	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	$	768,648		$	4,982	2.60	%	$	755,655		$	4,510	2.40	%
Tax-exempt	460,945			5,403		4.70	%	447,117			5,321		4.79	%
Total securities	1,229,593			10,385		3.39	%	1,202,772			9,831		3.29	%
Loans, net (3) (4)	6,628,011			73,073		4.42	%	5,863,007			65,115		4.47	%
Other earning assets	76,801			411		2.15	%	87,848			286		1.31	%
Total earning assets	7,934,405			$	83,869	4.24	%	7,153,627			$	75,232	4.23	%
Allowance for loan losses	(38,577		)					(35,282		)
Total non-earning assets	851,549							831,231
Total assets	$	8,747,377						$	7,949,576
Liabilities and Stockholders' Equity:
Interest-bearing deposits:
Transaction and money market accounts	$	3,367,008		$	2,729	0.33	%	$	2,882,468		$	1,448	0.20	%
Regular savings	563,948			152		0.11	%	595,870			224		0.15	%
Time deposits	1,248,818			3,219		1.03	%	1,164,561			2,525		0.87	%
Total interest-bearing deposits	5,179,774			6,100		0.47	%	4,642,899			4,197		0.36	%
Other borrowings (5)	1,023,599			6,122		2.40	%	881,027			2,808		1.28	%
Total interest-bearing liabilities	6,203,373			$	12,222	0.79	%	5,523,926			$	7,005	0.51	%
Noninterest-bearing liabilities:
Demand deposits	1,457,968							1,382,646
Other liabilities	59,888							55,857
Total liabilities	7,721,229							6,962,429
Stockholders' equity	1,026,148							987,147
Total liabilities and stockholders' equity	$	8,747,377						$	7,949,576
Net interest income				$	71,647						$	68,227
Interest rate spread						3.45	%						3.72	%
Cost of funds						0.62	%						0.39	%
Net interest margin (6)						3.62	%						3.84	%

(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 $1.6 million and $1.3 million for the three months ended June 30, 2017 and 2016, respectively, in accretion of the fair market value adjustments related to acquisitions.

(5) Interest expense on borrowings includes $47,000 and $143,000 for the three months ended June 30, 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 3.54% and 3.76% for the three months ended June 30, 2017 and 2016, respectively. 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.

-50-

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

	For the Six Months Ended June 30,
	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	$	757,565		$	9,905	2.64	%	$	749,690		$	8,826	2.37	%
Tax-exempt	461,176			10,883		4.76	%	445,271			10,612		4.79	%
Total securities	1,218,741			20,788		3.44	%	1,194,961			19,438		3.27	%
Loans, net (3) (4)	6,506,632			141,576		4.39	%	5,786,502			128,442		4.46	%
Other earning assets	73,054			685		1.89	%	79,844			591		1.49	%
Total earning assets	7,798,427			$	163,049	4.22	%	7,061,307			$	148,471	4.23	%
Allowance for loan losses	(38,240		)					(35,158		)
Total non-earning assets	847,038							831,054
Total assets	$	8,607,225						$	7,857,203
Liabilities and Stockholders' Equity:
Interest-bearing deposits:
Transaction and money market accounts	$	3,286,795		$	4,698	0.29	%	$	2,846,214		$	2,841	0.20	%
Regular savings	580,164			343		0.12	%	588,397			442		0.15	%
Time deposits	1,230,045			6,135		1.01	%	1,168,267			5,110		0.88	%
Total interest-bearing deposits	5,097,004			11,176		0.44	%	4,602,878			8,393		0.37	%
Other borrowings (5)	1,005,224			11,118		2.23	%	848,984			5,630		1.33	%
Total interest-bearing liabilities	6,102,228			$	22,294	0.74	%	5,451,862			$	14,023	0.52	%
Noninterest-bearing liabilities:
Demand deposits	1,426,144							1,359,597
Other liabilities	60,576							57,463
Total liabilities	7,588,948							6,868,922
Stockholders' equity	1,018,277							988,281
Total liabilities and stockholders' equity	$	8,607,225						$	7,857,203
Net interest income				$	140,755						$	134,448
Interest rate spread						3.48	%						3.71	%
Cost of funds						0.58	%						0.40	%
Net interest margin (6)						3.64	%						3.83	%

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

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

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

(4) Interest income on loans includes $3.0 million and $2.3 million for the six months ended June 30, 2017 and 2016, respectively, in accretion of the fair market value adjustments related to acquisitions.

(5) Interest expense on borrowings includes $95,000 and $205,000 for the six months ended June 30, 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 3.56% and 3.76% for the six months ended June 30, 2017 and 2016, respectively. 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.

-51-

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 June 30, 2017 vs. June 30, 2016 Increase (Decrease) Due to Change in:									Six Months Ended June 30, 2017 vs. June 30, 2016 Increase (Decrease) Due to Change in:
	Volume			Rate			Total			Volume			Rate			Total
Earning Assets:
Securities:
Taxable	$	78		$	394		$	472		$	93		$	986		$	1,079
Tax-exempt	163			(81		)	82			376			(105		)	271
Total securities	241			313			554			469			881			1,350
Loans, net (1)	8,437			(479		)	7,958			15,712			(2,578		)	13,134
Other earning assets	(40		)	165			125			(53		)	147			94
Total earning assets	$	8,638		$	(1	)	$	8,637		$	16,128		$	(1,550	)	$	14,578
Interest-Bearing Liabilities:
Interest-bearing deposits:
Transaction and money market accounts	$	275		$	1,006		$	1,281		$	490		$	1,367		$	1,857
Regular savings	(11		)	(61		)	(72		)	(6		)	(93		)	(99		)
Time Deposits	192			502			694			280			745			1,025
Total interest-bearing deposits	456			1,447			1,903			764			2,019			2,783
Other borrowings (2)	516			2,798			3,314			1,186			4,302			5,488
Total interest-bearing liabilities	972			4,245			5,217			1,950			6,321			8,271
Change in net interest income	$	7,666		$	(4,246	)	$	3,420		$	14,178		$	(7,871	)	$	6,307

(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 $311,000 and $672,000 for the three- and six-month change, respectively.

(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 $96,000 and $110,000 for the three- and six-month change, respectively.

The Company’s fully taxable equivalent net interest margin includes the impact of acquisition accounting fair value adjustments. The impact of net accretion for the first and second quarters of 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, 2017	$	1,445	$	48		$	1,493
For the quarter ended June 30, 2017	1,570		47			1,617
For the remaining six months of 2017 (estimated) (1)	2,886		75			2,961
For the years ending (estimated) (1):
2018	4,911		(143		)	4,768
2019	3,518		(286		)	3,232
2020	2,678		(301		)	2,377
2021	2,112		(316		)	1,796
2022	1,766		(332		)	1,434
Thereafter	6,653		(4,974		)	1,679

⁽¹⁾Estimated accretion only includes accretion for previously executed acquisitions. The effects of the Pending Merger are not included in the information above.

-52-

Noninterest Income

	For the Three Months Ended
	June 30,						Change
	2017			2016			$			%
	(Dollars in thousands)
Noninterest income:
Service charges on deposit accounts	$	4,963		$	4,754		$	209		4.4	%
Other service charges and fees	4,637			4,418			219			5.0	%
Fiduciary and asset management fees	2,725			2,333			392			16.8	%
Mortgage banking income, net	2,793			2,972			(179		)	(6.0	)%
Gains on securities transactions, net	117			3			114			NM
Bank owned life insurance income	1,335			1,361			(26		)	(1.9	)%
Loan-related interest rate swap fees	1,031			1,091			(60		)	(5.5	)%
Other operating income	455			1,061			(606		)	(57.1	)%
Total noninterest income	$	18,056		$	17,993		$	63		0.4	%
Community bank segment	$	15,203		$	14,940		$	263		1.8	%
Mortgage segment	2,993			3,207			(214		)	(6.7	)%
Intercompany eliminations	(140		)	(154		)	14			9.1	%
Total noninterest income	$	18,056		$	17,993		$	63		0.4	%

NM - Not meaningful

Noninterest income was $18.1 million for the quarter ended June 30, 2017, relatively flat compared to the second quarter of 2016. Customer-related fee income increased $428,000 primarily related to increases in overdraft and debit card interchange fees; fiduciary and asset management fees were $392,000 higher due to the acquisition of ODCM in the second quarter of 2016; and gains on sales of securities were $114,000 higher, in each case as compared to the second quarter of 2016. Other operating income decreased $606,000 primarily related to insurance-related income recognition timing differences. Mortgage banking income decreased $179,000 primarily related to declines in mortgage loan originations and unrealized losses on mortgage banking derivatives in the second quarter of 2017 compared to unrealized gains on mortgage banking derivatives in the second quarter of 2016.

-53-

	For the Six Months Ended
	June 30,						Change
	2017			2016			$			%
	(Dollars in thousands)
Noninterest income:
Service charges on deposit accounts	$	9,792		$	9,488		$	304		3.2	%
Other service charges and fees	9,045			8,574			471			5.5	%
Fiduciary and asset management fees	5,519			4,471			1,048			23.4	%
Mortgage banking income, net	4,818			5,117			(299		)	(5.8	)%
Gains on securities transactions, net	598			146			452			309.6	%
Bank owned life insurance income	3,460			2,734			726			26.6	%
Loan-related interest rate swap fees	2,211			1,753			458			26.1	%
Other operating income	1,451			1,624			(173		)	(10.7	)%
Total noninterest income	$	36,894		$	33,907		$	2,987		8.8	%
Community bank segment	$	31,959		$	28,548		$	3,411		11.9	%
Mortgage segment	5,216			5,684			(468		)	(8.2	)%
Intercompany eliminations	(281		)	(325		)	44			13.5	%
Total noninterest income	$	36,894		$	33,907		$	2,987		8.8	%

Noninterest income increased $3.0 million, or 8.8%, to $36.9 million for the six months ended June 30, 2017 from $33.9 million for the six months ended June 30, 2016. For the first six months of 2017, fiduciary and asset management fees were $1.0 million higher due to the acquisition of ODCM in the second quarter of 2016; customer-related fee income increased $775,000 primarily related to increases in overdraft and debit card interchange fees; bank owned life insurance income increased $726,000 primarily related to death benefit proceeds received in 2017; loan-related swap fees increased $458,000; and gains on sales of securities were $452,000 higher, in each case as compared to the first six months of 2016. Mortgage banking income decreased $299,000 primarily related to declines in mortgage loan originations and lower unrealized gains on mortgage banking derivatives in the first six months of 2017 compared to the first six months of 2016.

-54-

Noninterest expense

	For the Three Months Ended
	June 30,						Change
	2017			2016			$			%
	(Dollars in thousands)
Noninterest expense:
Salaries and benefits	$	30,561		$	28,519		$	2,042		7.2	%
Occupancy expenses	4,718			4,809			(91		)	(1.9	)%
Furniture and equipment expenses	2,720			2,595			125			4.8	%
Printing, postage, and supplies	1,406			1,280			126			9.8	%
Communications expense	872			927			(55		)	(5.9	)%
Technology and data processing	3,927			3,608			319			8.8	%
Professional services	2,092			2,548			(456		)	(17.9	)%
Marketing and advertising expense	2,279			1,924			355			18.5	%
FDIC assessment premiums and other insurance	947			1,379			(432		)	(31.3	)%
Other taxes	2,022			1,607			415			25.8	%
Loan-related expenses	1,281			1,229			52			4.2	%
OREO and credit-related expenses	342			894			(552		)	(61.7	)%
Amortization of intangible assets	1,544			1,745			(201		)	(11.5	)%
Training and other personnel costs	1,043			905			138			15.2	%
Acquisition and conversion costs	2,744			—			2,744			NM
Other expenses	1,432			1,282			150			11.7	%
Total noninterest expense	$	59,930		$	55,251		$	4,679		8.5	%
Community bank segment	$	57,496		$	52,766		$	4,730		9.0	%
Mortgage segment	2,574			2,639			(65		)	(2.5	)%
Intercompany eliminations	(140		)	(154		)	14			9.1	%
Total noninterest expense	$	59,930		$	55,251		$	4,679		8.5	%

NM - Not meaningful

Noninterest expense increased $4.7 million, or 8.5%, to $59.9 million for the quarter ended June 30, 2017 from $55.3 million in the second quarter of 2016. Excluding acquisition and conversion costs of $2.7 million, noninterest expense for the quarter ended June 30, 2017 increased $1.9 million, or 3.5%, compared to the second quarter of 2016. Salaries and benefits expenses increased by $2.0 million primarily related to annual merit adjustments; increases in benefits and incentive compensation; and increased expenses related to investments in the Company's growth, including the acquisition of ODCM. This increase was partially offset by lower OREO and credit-related expenses of $552,000, declines in professional fees of $456,000 due to lower legal and consulting fees, and lower FDIC and other insurance expenses of $432,000.

-55-

	For the Six Months Ended
	June 30,						Change
	2017			2016			$			%
	(Dollars in thousands)
Noninterest expense:
Salaries and benefits	$	62,730		$	56,567		$	6,163		10.9	%
Occupancy expenses	9,621			9,785			(164		)	(1.7	)%
Furniture and equipment expenses	5,323			5,232			91			1.7	%
Printing, postage, and supplies	2,556			2,419			137			5.7	%
Communications expense	1,782			2,016			(234		)	(11.6	)%
Technology and data processing	7,827			7,422			405			5.5	%
Professional services	3,750			4,537			(787		)	(17.3	)%
Marketing and advertising expense	4,019			3,863			156			4.0	%
FDIC assessment premiums and other insurance	1,652			2,741			(1,089		)	(39.7	)%
Other taxes	4,043			3,225			818			25.4	%
Loan-related expenses	2,610			2,107			503			23.9	%
OREO and credit-related expenses	884			1,463			(579		)	(39.6	)%
Amortization of intangible assets	3,180			3,625			(445		)	(12.3	)%
Training and other personnel costs	2,012			1,649			363			22.0	%
Acquisition and conversion costs	2,744			—			2,744			NM
Other expenses	2,592			2,872			(280		)	(9.7	)%
Total noninterest expense	$	117,325		$	109,523		$	7,802		7.1	%
Community bank segment	$	112,510		$	104,610		$	7,900		7.6	%
Mortgage segment	5,096			5,238			(142		)	(2.7	)%
Intercompany eliminations	(281		)	(325		)	44			13.5	%
Total noninterest expense	$	117,325		$	109,523		$	7,802		7.1	%

NM - Not meaningful

Noninterest expense increased $7.8 million, or 7.1%, to $117.3 million for the six months ended June 30, 2017 from $109.5 million in the first six month of 2016. Excluding acquisition and conversion costs of $2.7 million, noninterest expense for the six months ended June 30, 2017 increased $5.1 million, or 4.6%, compared to the first six months of 2016. Salaries and benefits expenses increased by $6.2 million primarily related to annual merit adjustments; increases in benefits and incentive compensation; and increased expenses related to investments in the Company's growth, including the acquisition of ODCM. This increase was partially offset by lower FDIC and other insurance expenses of $1.1 million, declines in professional fees of $787,000 due to lower legal and consulting fees, lower OREO and credit-related expenses of $579,000, and lower intangible amortization expense of $445,000, in each case as compared to the first six months of 2016.

SEGMENT INFORMATION

Community Bank Segment

For the three months ended June 30, 2017, the community bank segment reported net income of $17.4 million, which was a decrease of $1.4 million compared to the second quarter of 2016. Excluding after-tax acquisition and conversion costs of $2.4 million, net operating earnings for the community bank segment for the quarter ended June 30, 2017 were $19.8 million, which was an increase of $965,000 compared to the net income for the second quarter of 2016. Net interest income increased $3.1 million year-over-year to $68.6 million for the quarter ended June 30, 2017, primarily driven by higher average loan and investment balances. The provision for credit losses for the quarter ended June 30, 2017 was $2.2 million, which was relatively consistent with the provision for credit losses for the quarter ended June 30, 2016.

Noninterest income increased $263,000, or 1.8%, from $14.9 million in the second quarter of 2016 to $15.2 million in the second quarter of 2017. Customer-related fee income increased $428,000 primarily related to increases in overdraft and debit

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card interchange fees; fiduciary and asset management fees were $392,000 higher due to the acquisition of ODCM in the middle of the second quarter of 2016; and gains on sales of securities were $114,000 higher, in each case as compared to the second quarter of 2016. Other operating income decreased $599,000 primarily related to declines in insurance-related income.

Noninterest expense increased $4.7 million, or 9.0%, from $52.8 million for the second quarter of 2016 to $57.5 million for the quarter ended June 30, 2017. Excluding acquisition and conversion costs of $2.7 million, noninterest expense for the quarter ended June 30, 2017 increased $2.0 million, or 3.8%, compared to the second quarter of 2016. Salaries and benefits expenses increased by $2.1 million primarily related to annual merit adjustments; increases in benefits and incentive compensation; and increased expenses related to the Company's acquisition of ODCM in the second quarter of 2016. This increase was partially offset by lower OREO and credit-related expenses of $552,000, declines in professional fees of $492,000 due to lower legal and consulting fees, and lower FDIC and other insurance expenses of $432,000.

For the six months ended June 30, 2017, the community bank segment reported net income of $36.5 million, which was an increase of $820,000 compared to the first six months of 2016. Excluding after-tax acquisition and conversion costs of $2.4 million, net operating earnings for the community bank segment for the six months ended June 30, 2017 were $38.9 million, which was an increase of $3.2 million compared to the net income for the first six months of 2016. Net interest income increased $5.9 million year-over-year to $134.8 million for the six months ended June 30, 2017, primarily driven by higher average loan balances. The provision for credit losses for the six months ended June 30, 2017 was $4.3 million, which was a decline of $472,000 compared to the provision for credit losses for the six months ended June 30, 2016, primarily due to lower historical loss rates and lower charge-off levels.

Noninterest income increased $3.4 million, or 11.9%, from $28.5 million in the first six months of 2016 to $32.0 million in the first six months of 2017. For the first six months of 2017, fiduciary and asset management fees were $1.0 million higher due to the acquisition of ODCM in the second quarter of 2016; customer-related fee income increased $775,000 primarily related to increases in overdraft and debit card interchange fees; bank owned life insurance income increased $726,000 primarily related to death benefit proceeds received in 2017; loan-related swap fees increased $458,000; and gains on sales of securities were $452,000 higher, in each case as compared to the first six months of 2016.

Noninterest expense increased $7.9 million, or 7.6%, from $104.6 million for the first six months of 2016 to $112.5 million for the six months ended June 30, 2017. Excluding acquisition and conversion costs of $2.7 million, noninterest expense for the six months ended June 30, 2017 increased $5.2 million, or 4.9%, compared to the first six months of 2016. Salaries and benefits expenses increased by $6.2 million primarily related to annual merit adjustments; increases in benefits and incentive compensation; and increased expenses related to the Company's acquisition of ODCM in 2016. This increase was partially offset by lower FDIC and other insurance expenses of $1.1 million, declines in professional fees of $853,000 due to lower legal and consulting fees, lower OREO and credit-related expenses of $579,000, and lower intangible amortization expense of $445,000, in each case as compared to the first six months of 2016.

Mortgage Segment

The mortgage segment reported net income of $551,000 for the second quarter of 2017, compared to net income of $539,000 in the second quarter of 2016. Mortgage banking income, net of commissions, decreased $179,000, primarily related to declines in mortgage loan originations and unrealized losses on mortgage banking derivatives in the second quarter of 2017 compared to unrealized gains on mortgage banking derivatives in the second quarter of 2016. Mortgage loan originations decreased $3.5 million, or 2.5%, from $140.1 million for the quarter ended June 30, 2016 to $136.6 million for the quarter ended June 30, 2017. Noninterest expense decreased $65,000 when comparing the second quarter of 2017 to the second quarter of 2016, largely a result of declines in equipment-related expenses and volume-driven loan costs.

The mortgage segment reported net income of $555,000 for the first six months of 2017, compared to net income of $593,000 for the first six months of 2016. Mortgage banking income, net of commissions, decreased $299,000 primarily related to declines in mortgage loan originations and lower unrealized gains on mortgage banking derivatives in the first six months of 2017 compared to the first six months of 2016. Mortgage loan originations decreased $1.5 million, or 0.6%, from $238.3 million for the six months ended June 30, 2016 to $236.8 million for the six months ended June 30, 2017. Noninterest expense decreased $142,000, largely a result of declines in equipment-related expenses and personnel-related 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

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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 June 30, 2017 and 2016 was 28.0% and 26.2%, respectively; the effective tax rate for the six months ended June 30, 2017 and 2016 was 27.1% and 25.9%, 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 as well as the impact of nondeductible acquisition-related expenses recognized in 2017.

BALANCE SHEET

Assets

At June 30, 2017, total assets were $8.9 billion, an increase of $488.4 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 $6.8 billion at June 30, 2017, an increase of $464.4 million, or 14.7% (annualized), from December 31, 2016. Loan growth occurred across all categories. Quarterly average loans increased $765.0 million, or 13.0%, for the quarter ended June 30, 2017 compared to the quarter ended June 30, 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 June 30, 2017, total liabilities were $7.9 billion, an increase of $458.6 million from December 31, 2016.

Total deposits were $6.8 billion at June 30, 2017, an increase of $384.9 million, or 12.1% (annualized), from December 31, 2016. Deposits increased in all categories with the exception of savings accounts 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 $612.2 million, or 10.2%, for the quarter ended June 30, 2017 compared to the quarter ended June 30, 2016. For further discussion on this topic, see “Deposits” below.

At June 30, 2017, stockholders’ equity was $1.0 billion, an increase of $29.8 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 asset growth. The total risk-based capital ratios at June 30, 2017 and December 31, 2016 were 13.00% and 13.56%, respectively. The Tier 1 risk-based capital ratios were 10.57% and 10.97% at June 30, 2017 and December 31, 2016, respectively. The common equity Tier 1 risk-based capital ratios were 9.39% and 9.72% at June 30, 2017 and December 31, 2016, respectively. The Company’s common equity to total asset ratios at June 30, 2017 and December 31, 2016 were 11.56% and 11.88%, respectively, while its tangible common equity to tangible assets ratios were 8.32% and 8.41%, respectively, at the same dates.

Also, the Company declared and paid a cash dividend of $0.20 per share during the second quarter of 2017, an increase of $0.01 per share, or 5.3%, compared to the dividend paid during the same quarter in the prior year. Dividends for the six months ended June 30, 2017 were $0.40 compared to $0.38 for the six months ended June 30, 2016.

Securities

At June 30, 2017, the Company had total investments in the amount of $1.2 billion, or 13.9 % 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

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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): 

	June 30, 2017		December 31, 2016
Available for Sale:
Obligations of states and political subdivisions	$	278,540	$	275,890
Corporate and other bonds	116,418		121,780
Mortgage-backed securities	551,751		535,286
Other securities	13,828		13,808
Total securities available for sale, at fair value	960,537		946,764
Held to Maturity:
Obligations of states and political subdivisions, at carrying value	205,630		201,526
Federal Reserve Bank stock	27,559		23,808
Federal Home Loan Bank stock	42,072		36,974
Total restricted stock, at cost	69,631		60,782
Total investments	$	1,235,798	$	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 during the three and six months ended June 30, 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 June 30, 2017 (dollars in thousands): 

	1 Year or Less			1 - 5 Years			5 - 10 Years			Over 10 Years			Total
Mortgage backed securities:
Amortized cost	$	129		$	62,931		$	147,114		$	338,055		$	548,229
Fair value	130			63,250			148,224			340,147			551,751
Weighted average yield (1)	3.62		%	2.02		%	2.23		%	2.41		%	2.32		%
Obligations of states and political subdivisions:
Amortized cost	12,006			56,640			72,217			129,343			270,206
Fair value	12,146			58,723			75,560			132,111			278,540
Weighted average yield (1)	5.80		%	4.69		%	4.57		%	3.83		%	4.30		%
Corporate bonds and other securities:
Amortized cost	11,392			506			56,938			61,368			130,204
Fair value	11,334			506			57,804			60,602			130,246
Weighted average yield (1)	0.60		%	0.72		%	4.37		%	2.43		%	3.11		%
Total securities available for sale:
Amortized cost	23,527			120,077			276,269			528,766			948,639
Fair value	23,610			122,479			281,588			532,860			960,537
Weighted average yield (1)	3.27		%	3.28		%	3.28		%	2.76		%	2.99		%

(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 June 30, 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	$	4,797		$	34,383		$	63,538		$	102,912		$	205,630
Fair value	4,826			35,020			65,281			106,319			211,446
Weighted average yield (1)	2.87		%	2.73		%	3.15		%	3.75		%	3.37		%

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

As of June 30, 2017, the Company maintained a diversified municipal bond portfolio with approximately 74% of its holdings in general obligation issues and the remainder backed by revenue bonds. Issuances within the State of Washington and the State of Texas both represented 12% and issuances within the Commonwealth of Virginia 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, loans held for sale, and securities 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 June 30, 2017, liquid assets totaled $2.7 billion, or 30.0%, of total assets, and liquid earning assets totaled $2.5 billion, or31.4% of total earning assets. Asset liquidity is also provided by managing loan and securities maturities and cash flows. As of June 30, 2017, approximately $2.3 billion, or 33.9% of total loans, are scheduled to mature within one year based on contractual maturity, adjusted for expected prepayments, and approximately $161.7 million, or 13.1% of total securities, are scheduled to mature within one year.

Additional sources of liquidity available to the Company include its capacity to borrow additional funds when necessary. For additional information and the available balances on various lines of credit, please refer to Note 5 “Borrowings” in Part I, Item 1 - Financial Statements of this report. In addition to lines of credit, the Bank may also borrow additional funds by purchasing certificates of deposit through a nationally recognized network of financial institutions. For additional information and outstanding balances on purchased certificates of deposits, please refer to “Deposits” above.

Loan Portfolio

Loans held for investment, net of deferred fees and costs, were $6.8 billion at June 30, 2017, $6.3 billion at December 31, 2016, and $5.9 billion at June 30, 2016, respectively. Commercial real estate - non-owner occupied loans continue to represent the Company’s largest category, comprising 25.1% of the total loan portfolio at June 30, 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): 

	June 30, 2017				March 31, 2017				December 31, 2016				September 30, 2016				June 30, 2016
Construction and Land Development	$	799,938	11.8	%	$	770,287	11.8	%	$	751,131	11.9	%	$	776,430	12.6	%	$	765,997	12.9	%
Commercial Real Estate - Owner Occupied	888,285		13.1	%	870,559		13.3	%	857,805		13.6	%	857,142		13.9	%	831,880		14.0	%
Commercial Real Estate - Non-Owner Occupied	1,698,329		25.1	%	1,631,767		24.9	%	1,564,295		24.8	%	1,454,828		23.7	%	1,370,745		23.1	%
Multifamily Real Estate	367,257		5.4	%	353,769		5.4	%	334,276		5.3	%	339,313		5.5	%	337,723		5.7	%
Commercial & Industrial	568,602		8.4	%	576,567		8.8	%	551,526		8.7	%	509,857		8.3	%	469,054		7.9	%
Residential 1-4 Family	1,066,519		15.8	%	1,057,439		16.1	%	1,029,547		16.3	%	999,361		16.3	%	992,457		16.7	%
Auto	274,162		4.0	%	271,466		4.1	%	262,071		4.2	%	255,188		4.2	%	244,575		4.1	%
HELOC	535,088		7.9	%	527,863		8.1	%	526,884		8.4	%	524,097		8.5	%	519,196		8.7	%
Consumer and all other	573,310		8.5	%	494,329		7.5	%	429,525		6.8	%	432,702		7.0	%	409,471		6.9	%
Total loans held for investment	$	6,771,490	100.0	%	$	6,554,046	100.0	%	$	6,307,060	100.0	%	$	6,148,918	100.0	%	$	5,941,098	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 June 30, 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	$	799,938	$	460,535	$	207,662	$	159,704	$	47,958	$	131,741	$	104,541	$	27,200
Commercial Real Estate - Owner Occupied	888,285		90,754		256,025		29,694		226,331		541,506		379,226		162,280
Commercial Real Estate - Non-Owner Occupied	1,698,329		159,192		576,860		191,035		385,825		962,277		675,795		286,482
Multifamily Real Estate	367,257		34,851		142,779		27,629		115,150		189,627		165,277		24,350
Commercial & Industrial	568,602		182,407		164,342		122,073		42,269		221,853		146,810		75,043
Residential 1-4 Family	1,066,519		68,400		342,798		12,950		329,848		655,321		364,857		290,464
Auto	274,162		2,207		—		—		—		271,955		132,620		139,335
HELOC	535,088		35,431		497,355		43,347		454,008		2,302		1,856		446
Consumer and all other	573,310		51,133		70,441		13,357		57,084		451,736		191,406		260,330
Total loans held for investment	$	6,771,490	$	1,084,910	$	2,258,262	$	599,789	$	1,658,473	$	3,428,318	$	2,162,388	$	1,265,930

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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 June 30, 2017, the largest components 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.

Asset Quality

Overview

During the second quarter of 2017, the Company had higher levels of NPAs compared to December 31, 2016 and June 30, 2016, due to the increase in nonaccrual loan levels, primarily related to three unrelated credit relationships. Partially offsetting

this increase, OREO balances declined compared to the same periods. During the second quarter of 2017, the Company experienced declines in past due loans as a percentage of total loans compared to December 31, 2016 and June 30, 2016. Net charge-offs and the provision for loan losses declined for the six months ended June 30, 2017 compared to the six months ended June 30, 2016. The 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 PCI loans totaling $56.2 million (net of fair value mark of $12.7 million) at June 30, 2017.

Troubled Debt Restructurings

The total recorded investment in TDRs as of June 30, 2017 was $19.4 million, an increase of $4.0 million, or 26.0%, from $15.4 million at December 31, 2016 and an increase of $5.9 million, or 43.3%, from $13.5 million at June 30, 2016. Of the $19.4 million of TDRs at June 30, 2017, $14.9 million, or 77.0%, were considered performing while the remaining $4.5 million were considered nonperforming.

Loans removed from TDR status represent restructured loans with a market rate of interest at the time of the restructuring. These loans have performed in accordance with their modified terms for twelve consecutive months and were no longer considered impaired. Loans removed from TDR status are collectively evaluated for impairment; due to the significant improvement in the expected future cash flows, these loans are grouped based on their primary risk characteristics, 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

At June 30, 2017, NPAs totaled $34.1 million, an increase of $14.0 million, or 69.8%, from December 31, 2016 and an increase of $9.8 million, or 40.5%, from June 30, 2016. In addition, NPAs as a percentage of total outstanding loans increased 18 basis points to 0.50% at June 30, 2017 from 0.32% at December 31, 2016 and increased 9 basis points from 0.41% at June 30, 2016.

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

	June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016
Nonaccrual loans, excluding PCI loans	$	24,574		$	22,338		$	9,973		$	12,677		$	10,861
Foreclosed properties	6,828			6,951			7,430			7,927			10,076
Former bank premises	2,654			2,654			2,654			2,654			3,305
Total nonperforming assets	34,056			31,943			20,057			23,258			24,242
Loans past due 90 days and accruing interest	3,625			2,323			3,005			3,529			3,533
Total nonperforming assets and loans past due 90 days and accruing interest	$	37,681		$	34,266		$	23,062		$	26,787		$	27,775
Performing TDRs	$	14,947		$	14,325		$	13,967		$	11,824		$	11,885
PCI loans	56,167			57,770			59,292			62,346			67,170
Balances
Allowance for loan losses	$	38,214		$	38,414		$	37,192		$	36,542		$	35,074
Average loans, net of deferred fees and costs	6,628,011			6,383,905			6,214,084			6,033,723			5,863,007
Loans, net of deferred fees and costs	6,771,490			6,554,046			6,307,060			6,148,918			5,941,098
Ratios
NPAs to total loans	0.50		%	0.49		%	0.32		%	0.38		%	0.41		%
NPAs & loans 90 days past due to total loans	0.56		%	0.52		%	0.37		%	0.44		%	0.47		%
NPAs to total loans & OREO	0.50		%	0.49		%	0.32		%	0.38		%	0.41		%
NPAs & loans 90 days past due and accruing to total loans & OREO	0.56		%	0.52		%	0.37		%	0.43		%	0.47		%
ALL to nonaccrual loans	155.51		%	171.97		%	372.93		%	288.25		%	322.94		%
ALL to nonaccrual loans & loans 90 days past due and accruing	135.52		%	155.77		%	286.58		%	225.48		%	243.67		%

NPAs at June 30, 2017 included $24.6 million in nonaccrual loans, a net increase of $14.6 million, or 146.4%, from December 31, 2016 and a net increase of $13.7 million, or 126.3%, from June 30, 2016. The following table shows the activity in nonaccrual loans for the quarter ended (dollars in thousands):

	June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016
Beginning Balance	$	22,338		$	9,973		$	12,677		$	10,861		$	13,092
Net customer payments	(1,498		)	(1,068		)	(1,451		)	(1,645		)	(2,859		)
Additions	5,979			13,557			1,094			4,359			2,568
Charge-offs	(2,004		)	(97		)	(1,216		)	(660		)	(1,096		)
Loans returning to accruing status	(134		)	(27		)	(1,039		)	(23		)	(396		)
Transfers to OREO	(107		)	—			(92		)	(215		)	(448		)
Ending Balance	$	24,574		$	22,338		$	9,973		$	12,677		$	10,861

The nonaccrual additions during 2017 primarily relate to three unrelated credit relationships, comprised of commercial real estate - non-owner occupied loans, commercial & industrial loans, and constructions loans.

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The following table presents the composition of nonaccrual loans at the quarters ended (dollars in thousands):

	June 30, 2017		March 31, 2017		December 31, 2016		September 30, 2016		June 30, 2016
Construction and Land Development	$	5,659	$	6,545	$	2,037	$	2,301	$	1,604
Commercial Real Estate - Owner Occupied	1,279		1,298		794		1,609		1,661
Commercial Real Estate - Non-owner Occupied	4,765		2,798		—		—		—
Commercial & Industrial	4,281		3,245		124		1,344		263
Residential 1-4 Family	6,128		5,856		5,279		5,279		5,448
Auto	270		393		169		231		140
HELOC	2,059		1,902		1,279		1,464		1,495
Consumer and all other	133		301		291		449		250
Total	$	24,574	$	22,338	$	9,973	$	12,677	$	10,861

NPAs at June 30, 2017 also included $9.5 million in OREO, a decline of $602,000, or 6.0%, from December 31, 2016 and a decline of $3.9 million, or 29.1%, from June 30, 2016. The following table shows the activity in OREO for the quarters ended (dollars in thousands):

	June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016
Beginning Balance	$	9,605		$	10,084		$	10,581		$	13,381		$	14,246
Additions of foreclosed property	132			—			859			246			501
Valuation adjustments	(19		)	(238		)	(138		)	(479		)	(274		)
Proceeds from sales	(272		)	(277		)	(1,282		)	(2,844		)	(1,086		)
Gains (losses) from sales	36			36			64			277			(6		)
Ending Balance	$	9,482		$	9,605		$	10,084		$	10,581		$	13,381

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

	June 30, 2017		March 31, 2017		December 31, 2016		September 30, 2016		June 30, 2016
Land	$	3,205	$	3,328	$	3,328	$	3,440	$	4,759
Land Development	2,050		2,111		2,379		2,320		2,416
Residential Real Estate	1,399		1,338		1,549		1,806		2,412
Commercial Real Estate	174		174		174		361		489
Former Bank Premises (1)	2,654		2,654		2,654		2,654		3,305
Total	$	9,482	$	9,605	$	10,084	$	10,581	$	13,381

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

Past Due Loans

At June 30, 2017, total accruing past due loans were $27.4 million, or 0.40% of total loans, compared to $27.9 million, or 0.44%, at December 31, 2016 and $25.3 million, or 0.43%, at June 30, 2016. At June 30, 2017, loans past due 90 days or more and accruing interest totaled $3.6 million, or 0.05% of total loans, compared to $3.0 million, or 0.05%, at December 31, 2016 and $3.5 million, or 0.06%, at June 30, 2016.

Net Charge-offs

For the quarter ended June 30, 2017, net charge-offs were $2.5 million, or 0.15% of average loans on an annualized basis, compared to $1.6 million, or 0.11%, for the quarter ended June 30, 2016. Of the net charge-offs in the second quarter of 2017, approximately half were specifically reserved for in the prior quarter. For the six months ended June 30, 2017, net charge-offs were $3.3 million, or 0.10% of total average loans on annualized basis, compared to $3.8 million, or 0.13%, for the same period in 2016.

Provision for Loan Losses

The provision for loan losses for the quarter ended June 30, 2017 was $2.3 million, consistent with the quarter ended June 30, 2016. The provision for loan losses for the six months ended June 30, 2017 was $4.3 million compared to $4.8 million for the six months ended June 30, 2016. Despite the loan growth that has occurred during 2017, the provision for loan losses declined

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in the first six months of 2017 compared to the same period in 2016, primarily due to lower historical loss rates and lower charge-off levels.

Allowance for Loan Losses

The allowance for loan losses of $38.2 million at June 30, 2017, is an increase of $1.0 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):

	June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016
Balance, beginning of period	$	38,414		$	37,192		$	36,542		$	35,074		$	34,399
Loans charged-off:
Commercial	316			241			620			16			668
Real estate	1,595			374			469			929			1,299
Consumer	1,416			1,018			738			518			318
Total loans charged-off	3,327			1,633			1,827			1,463			2,285
Recoveries:
Commercial	123			139			61			67			117
Real estate	306			273			806			303			281
Consumer	398			433			136			164			262
Total recoveries	827			845			1,003			534			660
Net charge-offs	2,500			788			824			929			1,625
Provision for loan losses	2,300			2,010			1,474			2,397			2,300
Balance, end of period	$	38,214		$	38,414		$	37,192		$	36,542		$	35,074
ALL to loans	0.56		%	0.59		%	0.59		%	0.59		%	0.59		%
Net charge-offs to average loans	0.15		%	0.05		%	0.05		%	0.06		%	0.11		%
Provision to average loans	0.14		%	0.13		%	0.09		%	0.16		%	0.16		%

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):

	June 30, 2017				March 31, 2017				December 31, 2016				September 30, 2016				June 30, 2016
	$		% (1)		$		% (1)		$		% (1)		$		% (1)		$		% (1)
Commercial	$	5,614	8.4	%	$	5,279	8.8	%	$	4,627	8.7	%	$	5,403	8.3	%	$	4,026	7.9	%
Real estate	28,450		79.1	%	29,356		79.6	%	29,441		80.3	%	28,064		81.0	%	28,061		81.6	%
Consumer	4,150		12.5	%	3,779		11.6	%	3,124		11.0	%	3,075		10.7	%	2,987		10.5	%
Total	$	38,214	100.0	%	$	38,414	100.0	%	$	37,192	100.0	%	$	36,542	100.0	%	$	35,074	100.0	%

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

Deposits

As of June 30, 2017, total deposits were $6.8 billion, an increase of $384.9 million, or 12.1% (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 $1.3 billion accounted for 24.0% of total interest-bearing deposits at June 30, 2017.

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

	June 30, 2017				December 31, 2016
Deposits:	Amount		% of total deposits		Amount		% of total deposits
Non-interest bearing	$	1,501,570	22.2	%	$	1,393,625	21.8	%
NOW accounts	1,882,287		27.8	%	1,765,956		27.7	%
Money market accounts	1,559,895		23.1	%	1,435,591		22.5	%
Savings accounts	558,472		8.2	%	591,742		9.3	%
Time deposits of $100,000 and over	580,962		8.6	%	530,275		8.3	%
Other time deposits	681,248		10.1	%	662,300		10.4	%
Total Deposits	$	6,764,434	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 June 30, 2017 and December 31, 2016, there were $7.1 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 June 30, 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	$	55,342	$	160,853	$	364,767	$	580,962
Maturities of other time deposits	62,478		240,630		378,140		681,248
Total time deposits	$	117,820	$	401,483	$	742,907	$	1,262,210

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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.

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 June 30, 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):

	June 30, 2017			December 31, 2016			June 30, 2016
Common equity Tier 1 capital	$	720,805		$	699,728		$	674,608
Tier 1 capital	811,305			790,228			765,108
Tier 2 capital	187,014			185,917			35,496
Total risk-based capital	998,319			976,145			800,604
Risk-weighted assets	7,676,620			7,200,778			6,789,054
Capital ratios:
Common equity Tier 1 capital ratio	9.39		%	9.72		%	9.94		%
Tier 1 capital ratio	10.57		%	10.97		%	11.27		%
Total capital ratio	13.00		%	13.56		%	11.79		%
Leverage ratio (Tier 1 capital to average assets)	9.61		%	9.87		%	10.01		%
Capital conservation buffer ratio (1)	4.57		%	4.97		%	3.49		%
Common equity to total assets	11.56		%	11.88		%	12.21		%
Tangible common equity to tangible assets	8.32		%	8.41		%	8.59		%

(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 June 30, 2017, the Company has provided supplemental performance measures on a tax-equivalent, core, tangible, and/or operating 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.

Operating measures exclude acquisition and conversion costs unrelated to the Company’s normal operations. Such costs were only incurred during the second quarter of 2017; thus each of these operating measures is equivalent to the corresponding GAAP financial measure for the three and six months ended June 30, 2016. The Company believes these measures are useful to investors as they exclude certain costs resulting from acquisition activity and allow investors to more clearly see the combined economic results of the organization's operations.

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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 June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Interest Income (FTE)
Interest Income (GAAP)	$	81,221		$	72,781		$	157,891		$	143,530
FTE adjustment	2,648			2,451			5,188			4,941
Interest Income FTE (non-GAAP)	$	83,869		$	75,232		$	163,079		$	148,471
Average earning assets	$	7,934,405		$	7,153,627		$	7,798,427		$	7,061,307
Yield on interest-earning assets (GAAP)	4.11		%	4.09		%	4.08		%	4.09		%
Yield on interest-earning assets (FTE) (non-GAAP)	4.24		%	4.23		%	4.22		%	4.23		%
Net Interest Income (FTE) & Core Net Interest Income (FTE)
Net Interest Income (GAAP)	$	68,999		$	65,776		$	135,567		$	129,507
FTE adjustment	2,648			2,451			5,188			4,941
Net Interest Income FTE (non-GAAP)	71,647			68,227			140,755			134,448
Less: Net accretion of acquisition fair value marks	1,617			1,402			3,110			2,548
Core Net Interest Income FTE (non-GAAP)	$	70,030		$	66,825		$	137,645		$	131,900
Average earning assets	$	7,934,405		$	7,153,627		$	7,798,427		$	7,061,307
Net interest margin (GAAP)	3.49		%	3.70		%	3.51		%	3.69		%
Net interest margin (FTE) (non-GAAP)	3.62		%	3.84		%	3.64		%	3.83		%
Core net interest margin (FTE) (non-GAAP)	3.54		%	3.76		%	3.56		%	3.76		%
Tangible Assets
Ending Assets (GAAP)	$	8,915,187		$	8,100,561		$	8,915,187		$	8,100,561
Less: Ending goodwill	298,191			297,659			298,191			297,659
Less: Ending amortizable intangibles	17,422			23,449			17,422			23,449
Ending tangible assets (non-GAAP)	$	8,599,574		$	7,779,453		$	8,599,574		$	7,779,453
Tangible Common Equity
Ending Equity (GAAP)	$	1,030,869		$	989,201		$	1,030,869		$	989,201
Less: Ending goodwill	298,191			297,659			298,191			297,659
Less: Ending amortizable intangibles	17,422			23,449			17,422			23,449
Ending tangible common equity (non-GAAP)	$	715,256		$	668,093		$	715,256		$	668,093
Average equity (GAAP)	$	1,026,148		$	987,147		$	1,018,277		$	988,281
Less: Average goodwill	298,191			294,886			298,191			294,204
Less: Average amortizable intangibles	18,164			21,758			18,948			22,044
Average tangible common equity (non-GAAP)	$	709,793		$	670,503		$	701,138		$	672,033
ROE (GAAP)	7.02		%	7.88		%	7.34		%	7.39		%
ROTCE (non-GAAP)	10.15		%	11.60		%	10.66		%	10.86		%
Common equity to assets (GAAP)	11.56		%	12.21		%	11.56		%	12.21		%
Tangible common equity to tangible assets (non-GAAP)	8.32		%	8.59		%	8.32		%	8.59		%

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	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Operating Measures
Net income (GAAP)	$	17,956		$	19,337		$	37,080		$	36,298
Acquisition and conversion costs, net of tax	2,358			—			2,358			—
Net operating earnings (non-GAAP)	$	20,314		$	19,337		$	39,438		$	36,298
Weighted average common shares outstanding, diluted	43,783,952			43,824,183			43,755,045			44,075,706
Earnings per common share, diluted (GAAP)	$	0.41		$	0.44		$	0.85		$	0.82
Operating earnings per common share, diluted (non-GAAP)	$	0.46		$	0.44		$	0.90		$	0.82
Average assets (GAAP)	$	8,747,377		$	7,949,576		$	8,607,225		$	7,857,203
ROA (GAAP)	0.82		%	0.98		%	0.87		%	0.93		%
Operating ROA (non-GAAP)	0.93		%	0.98		%	0.92		%	0.93		%
Average common equity (GAAP)	$	1,026,148		$	987,147		$	1,018,277		$	988,281
ROE (GAAP)	7.02		%	7.88		%	7.34		%	7.39		%
Operating ROE (non-GAAP)	7.94		%	7.88		%	7.81		%	7.39		%
Average tangible common equity (non-GAAP)	$	709,793		$	670,503		$	701,138		$	672,033
ROTCE (non-GAAP)	10.15		%	11.60		%	10.66		%	10.86		%
Operating ROTCE (non-GAAP)	11.48		%	11.60		%	11.34		%	10.86		%
Noninterest expense (GAAP)	$	59,930		$	55,251		$	117,325		$	109,523
Less: Acquisition and conversion costs	2,744			—			2,744			—
Operating noninterest expense (non-GAAP)	$	57,186		$	55,251		$	114,581		$	109,523
Net interest income (GAAP)	$	68,999		$	65,776		$	135,567		$	129,507
Net interest income (FTE) (non-GAAP)	71,647			68,227			140,755			134,448
Noninterest income (GAAP)	18,056			17,993			36,894			33,907
Efficiency ratio (GAAP)	68.84		%	65.96		%	68.03		%	67.02		%
Efficiency ratio (FTE) (non-GAAP)	66.81		%	64.08		%	66.04		%	65.06		%
Operating efficiency ratio (FTE) (non-GAAP)	63.75		%	64.08		%	64.50		%	65.06		%
Community bank segment net income (GAAP)	$	17,405		$	18,798		$	36,525		$	35,705
Acquisition and conversion costs, net of tax	2,358			—			2,358			—
Community bank segment net operating earnings (non-GAAP)	$	19,763		$	18,798		$	38,883		$	35,705
Weighted average common shares outstanding, diluted	43,783,952			43,824,183			43,755,045			44,075,706
Earnings per common share, diluted (GAAP)	$	0.40		$	0.43		$	0.84		$	0.81
Operating earnings per common share, diluted (non-GAAP)	$	0.45		$	0.43		$	0.89		$	0.81
Community bank segment noninterest expense (GAAP)	$	57,496		$	52,766		$	112,510		$	104,610
Less: Acquisition and conversion costs	2,744			—			2,744			—
Community bank segment operating noninterest expense (non-GAAP)	$	54,752		$	52,766		$	109,766		$	104,610

ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

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

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

EARNINGS SIMULATION ANALYSIS

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

Assumptions used in the model are derived from historical trends and management’s outlook and include loan and deposit growth rates and projected yields and rates. 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 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 June 30, 2017 and 2016 (dollars in thousands):

	Change In Net Interest Income June 30,
	2017				2016
	%		$		%		$
Change in Yield Curve:
+300 basis points	10.49		31,679		9.81		27,312
+200 basis points	7.18		21,674		6.73		18,723
+100 basis points	3.76		11,368		3.59		9,997
Most likely rate scenario	—		—		—		—
-100 basis points	(4.25	)	(12,841	)	(2.40	)	(6,690	)
-200 basis points	(8.10	)	(24,475	)	(3.22	)	(8,977	)
-300 basis points	(8.47	)	(25,589	)	(3.32	)	(9,244	)

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

As of June 30, 2017, the Company was more asset sensitive in a rising interest rate environment scenario when compared to June 30, 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.

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 June 30, 2017 and 2016 (dollars in thousands):

	Change In Economic Value of Equity June 30,
	2017				2016
	%		$		%		$
Change in Yield Curve:
+300 basis points	1.31		18,820		1.73		22,167
+200 basis points	1.54		22,074		2.12		27,155
+100 basis points	1.20		17,209		1.53		19,570
Most likely rate scenario	—		—		—		—
-100 basis points	(3.58	)	(51,487	)	(4.69	)	(59,963	)
-200 basis points	(10.17	)	(146,146	)	(7.11	)	(90,938	)
-300 basis points	(11.91	)	(171,098	)	(3.74	)	(47,765	)

As of June 30, 2017, the Company was less sensitive to market interest rate fluctuations in the shock down 100, and shock up 100, 200, and 300 basis points scenarios when compared to June 30, 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 June 30, 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

The following risk factors should be considered in addition 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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Combining the Company and Xenith may be more difficult, costly or time-consuming than we expect.

The success of the Pending Merger will depend, in part, on the Company’s ability to realize the anticipated benefits and cost savings from combining the businesses of the Company and Xenith and to combine the businesses of the Company and Xenith in a manner that permits growth opportunities and cost savings to be realized without materially disrupting the existing customer relationships of Xenith or the Company or decreasing revenues due to loss of customers. However, to realize these anticipated benefits and cost savings, the Company must successfully combine the businesses of the Company and Xenith. If the Company is not able to achieve these objectives, the anticipated benefits and cost savings of the Pending Merger may not be realized fully, or at all, or may take longer to realize than expected.

The Company and Xenith have operated, and, until the completion of the Pending Merger, will continue to operate, independently. The success of the Pending Merger and the future operating performance of the Company and the Bank will depend, in part, on the Company’s ability to successfully combine the businesses of the Company and Xenith, including the merger of Xenith Bank into the Bank (or the “subsidiary bank merger”), which is expected to occur after the Pending Merger in early January 2018. The success of the subsidiary bank merger will, in turn, depend on a number of factors, including the Company’s ability to: (i) integrate the operations and branches of Xenith Bank and the Bank; (ii) retain the deposits and customers of Xenith Bank and the Bank; (iii) control the incremental increase in noninterest expense arising from the Pending Merger in a manner that enables the combined bank to improve its overall operating efficiencies; and (iv) retain and integrate the appropriate personnel of Xenith Bank into the operations of the Bank, as well as reducing overlapping bank personnel. The integration of Xenith Bank and the Bank following the subsidiary bank merger will require the dedication of the time and resources of the banks’ management and may temporarily distract managements’ attention from the day-to-day business of the banks. If the Bank is unable to successfully integrate Xenith Bank, the Bank may not be able to realize expected operating efficiencies and eliminate redundant costs.

The integration process in the Pending Merger and the subsidiary bank merger could result in the loss of key employees, the disruption of each party’s ongoing business, inconsistencies in standards, controls, procedures and policies that affect adversely either party’s ability to maintain relationships with customers and employees or achieve the anticipated benefits of the Pending Merger. The loss of key employees could adversely affect the Company’s ability to successfully conduct its business in the markets in which Xenith now operates, which could have an adverse effect on the Company’s financial results and the value of its common stock. As with any merger of financial institutions, there also may be disruptions that cause the Company and Xenith to lose customers or cause customers to withdraw their deposits from Xenith’s or the Company’s banking subsidiaries, or other unintended consequences that could have a material adverse effect on the Company’s results of operations or financial condition after the Pending Merger. These integration matters could have an adverse effect on each of Xenith and the Company during this transition period and for an undetermined period after completion of the Pending Merger.

The Company will be subject to additional regulation, increased supervision and increased costs following the Pending Merger.

Various federal banking laws and regulations, including rules adopted by the Federal Reserve pursuant to the requirements of the Dodd-Frank Act imposes additional regulatory requirements on institutions with $10 billion or more in assets. The Company had $8.9 billion in assets as of June 30, 2017. If the Pending Merger is completed, then the Company will have more than $10 billion in assets and, as a result, will be subject to the additional regulatory requirements, increased supervision and increased costs, including the following: (i) supervision, examination and enforcement by the Consumer Financial Protection Bureau with respect to consumer financial protection laws; (ii) regulatory stress testing requirements, whereby the Company would be required to conduct an annual stress test (using assumptions for baseline, adverse and severely adverse scenarios); (iii) a modified methodology for calculating FDIC insurance assessments and potentially higher assessment rates; (iv) enhanced supervision as a larger financial institution; and (v) under the Durbin Amendment to the Dodd-Frank Act, institutions with $10 billion or more in assets are subject to a cap on the interchange fees that may be charged in certain electronic debit and prepaid card transactions.

The imposition of these regulatory requirements and increased supervision may require commitment of additional financial resources to regulatory compliance, may increase the Company’s cost of operations, and may otherwise have a significant impact on the Company’s business, financial condition and results of operations. Further, the results of the stress testing process may lead the Company to retain additional capital or alter the mix of its capital components as compared to the Company’s current capital management strategy.

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Regulatory approvals may not be received, may take longer than expected or may impose conditions that are not presently anticipated or that could have an adverse effect on the surviving company following the Pending Merger.

Before the Pending Merger, or the merger of Xenith Bank into the Bank, may be completed, the Company and Xenith must obtain approvals from the Federal Reserve and the Virginia State Corporation Commission. Other approvals, waivers or consents from regulators may also be required. In determining whether to grant these approvals the regulators consider a variety of factors, including the regulatory standing of each party, and the competitive effects of the contemplated transactions. An adverse development in either party’s regulatory standing or these factors could result in an inability to obtain approval or delay their receipt. The Community Reinvestment Act of 1977, as amended, and the regulations issued thereunder (the “CRA”) also requires that the bank regulatory authorities, in deciding whether to approve the Pending Merger and the subsidiary bank merger, assess the records of performance of the Bank and Xenith Bank in meeting the credit needs of the communities they serve, including low and moderate income neighborhoods. Each of the Bank and Xenith Bank currently maintains a CRA rating of “Satisfactory” from its primary federal regulator. As part of the review process under the CRA, it is not unusual for the bank regulatory authorities to receive protests and other adverse comments from community groups and others. Any such protests or adverse comments could prolong the period during which the Pending Merger and the subsidiary bank merger are subject to review by the bank regulatory authorities.

These regulators may impose conditions on the completion of the Pending Merger or the subsidiary bank merger or require changes to the terms of the Pending Merger or the subsidiary bank merger. Such conditions or changes could have the effect of delaying or preventing completion of the Pending Merger or the subsidiary bank merger or imposing additional costs on or limiting the revenues of the surviving company following the Pending Merger and the subsidiary bank merger, any of which might have an adverse effect on the surviving company following the Pending Merger.

The Pending Merger and the subsidiary bank merger may distract management of the Company and Xenith from their other responsibilities.

The Pending Merger and the subsidiary bank merger could cause the respective management groups of the Company and Xenith to focus their time and energies on matters related to the transaction that otherwise would be directed to their business and operations. Any such distraction on the part of either company’s management could affect its ability to service existing business and develop new business and adversely affect the business and earnings of the Company or Xenith before the Pending Merger, or the business and earnings of the Company after the Pending Merger.

Termination of the Agreement and Plan of Reorganization between the Company and Xenith, dated May 19, 2017 (or the “merger agreement”) could negatively impact the Company or Xenith.

If the merger agreement is terminated, the Company’s or Xenith’s business may be impacted adversely by the failure to pursue other beneficial opportunities due to the focus of management on the Pending Merger, without realizing any of the anticipated benefits of completing the Pending Merger. Additionally, if the merger agreement is terminated, the market price of the Company’s common stock or Xenith common stock could decline to the extent that the current market prices reflect a market assumption that the Pending Merger will be completed. Furthermore, costs relating to the Pending Merger, such as legal, accounting and financial advisory fees, must be paid even if the Pending Merger is not completed. If the merger agreement is terminated under certain circumstances, including circumstances involving a change in recommendation by the Company’s or Xenith’s board of directors, the Company or Xenith may be required to pay to the other party a termination fee of $26.5 million.

The merger agreement limits the ability of the Company and Xenith to pursue alternatives to the Pending Merger and might discourage competing offers for a higher price or premium.

The merger agreement contains “no-shop” provisions that, subject to limited exceptions, limit the ability of the Company and Xenith to discuss, facilitate or commit to competing third-party proposals to acquire all or a significant part of either company. In addition, under certain circumstances, if the merger agreement is terminated and either the Company or Xenith, subject to certain restrictions, completes a similar transaction other than the Pending Merger, the party completing such transaction must pay to the other a termination fee of $26.5 million. These provisions might discourage a potential competing acquiror that might have an interest in acquiring all or a significant percentage of ownership of the Company or Xenith from considering or proposing the acquisition even if it were prepared to pay consideration, with respect to Xenith, with a higher per share market price than that proposed in the Pending Merger, and with respect to the Company, with a per share market price that would amount to a premium over the current per share market price of the Company.

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The Company and Xenith will be subject to business uncertainties and contractual restrictions until the Pending Merger is completed.

Uncertainty about the effect of the Pending Merger on employees and customers may have an adverse effect on the Company and Xenith. These uncertainties may impair the Company’s and Xenith’s ability to attract, retain and motivate key personnel until the Pending Merger is completed, and could cause customers and others that deal with the Company and Xenith to seek to change existing business relationships with the Company and Xenith. Retention of certain employees by the Company and Xenith may be challenging until the Pending Merger is completed, as certain employees may experience uncertainty about their future roles with the Company or Xenith. If key employees depart because of issues relating to the uncertainty and difficulty of integration or a desire not to remain with the Company or Xenith, the Company’s or Xenith’s business, or the business of the combined company following the Pending Merger, could be harmed. In addition, subject to certain exceptions, the Company and Xenith have each agreed to operate its business in the ordinary course prior to completion of the Pending Merger and refrain from taking certain specified actions until the Pending Merger occurs, which may prevent the Company or Xenith from pursuing attractive business opportunities that may arise prior to completion of the Pending Merger.

If the Pending Merger is not completed, the Company and Xenith will have incurred substantial expenses without realizing the expected benefits of the Pending Merger.

Each of the Company and Xenith has incurred and will incur substantial expenses in connection with the negotiation and completion of the transactions contemplated by the merger agreement, as well as the costs and expenses of filing, printing and mailing a joint proxy statement/prospectus and all filing and other fees paid to the Securities and Exchange Commission in connection with the Pending Merger. If the Pending Merger is not completed, the Company and Xenith would have to incur these expenses without realizing the expected benefits of the Pending Merger.

The Company may not be able to recognize the full value of Xenith’s deferred tax assets and other attributes after the Pending Merger.

The Company’s ability to use the net operating loss carryovers (or “NOLs”) and other tax attributes of Xenith after the Pending Merger will be subject to certain limitations and possible changes in tax law that may impact the value of Xenith’s deferred tax asset. The Pending Merger will constitute a change in the ownership of Xenith under Section 382 of the Internal Revenue Code that will place certain limits on the Company’s ability to utilize Xenith’s NOLs and other tax attributes to reduce the Company’s future income taxes. As a result of these limitations the value of Xenith’s deferred tax asset to the Company after the Pending Merger could decrease, because these limitations could reduce the present value of future tax savings to the Company from Xenith’s deferred tax asset.

In addition, comprehensive tax reform remains a topic of discussion in the U.S. Congress and the executive branch of the U.S. government, and any legislation to enact comprehensive tax reform could significantly alter the Internal Revenue Code, including to reduce U.S. federal corporate income tax rates. The value of Xenith’s deferred tax asset on Xenith’s financial statements is currently based on a 35% U.S. federal corporate income tax rate. If Congress passes legislation reducing such U.S. federal corporate income tax rate (e.g., from a 35% tax rate to a 15% tax rate), the value of Xenith’s deferred tax asset would decrease and likely would be accompanied by a related charge to earnings, which could negatively affect the Company’s financial condition and results of operations following the Pending Merger.

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
2.01	Agreement and Plan of Reorganization, dated as of May 19, 2017, by and between Union Bankshares Corporation and Xenith Bankshares, Inc. (incorporated by reference to Exhibit 2.1 to Current Report on Form 8-K filed on May 23, 2017).
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).
10.31	Severance Agreement and Release of Claims, dated June 5, 2017, by and between Union Bankshares Corporation and Union Bank & Trust, and D. Anthony Peay (incorporated by reference to Exhibit 10.31 to Current Report on Form 8-K filed on June 5, 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 June 30, 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: August 8, 2017	By:	/s/ John C. Asbury
		John C. Asbury,
		President and Chief Executive Officer
		(principal executive officer)
Date: August 8, 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 Stockholders 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 August 8, 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 June 30, 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

August 8, 2017

EX-31.01

Exhibit 31.01

CERTIFICATIONS

I, John C. Asbury, 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: August 8, 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: August 8, 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 June 30, 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

August 8, 2017

/s/ Robert M. Gorman

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

August 8, 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.

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2017	Aug. 02, 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	Jun. 30, 2017
Amendment Flag	false
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		43,707,506

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Cash and cash equivalents:
Cash and due from banks	$ 135,759	$ 120,758
Interest-bearing deposits in other banks	45,473	58,030
Federal funds sold	678	449
Total cash and cash equivalents	181,910	179,237
Securities available for sale, at fair value	960,537	946,764
Securities held to maturity, at carrying value	205,630	201,526
Restricted stock, at cost	69,631	60,782
Loans held for sale, at fair value	41,135	36,487
Loans held for investment, net of deferred fees and costs	6,771,490	6,307,060
Less allowance for loan losses	38,214	37,192
Net loans held for investment	6,733,276	6,269,868
Premises and equipment, net	121,842	122,027
Other real estate owned, net of valuation allowance	9,482	10,084
Goodwill	298,191	298,191
Amortizable intangibles, net	17,422	20,602
Bank owned life insurance	180,110	179,318
Other assets	96,021	101,907
Total assets	8,915,187	8,426,793
LIABILITIES
Noninterest-bearing demand deposits	1,501,570	1,393,625
Interest-bearing deposits	5,262,864	4,985,864
Total deposits	6,764,434	6,379,489
Securities sold under agreements to repurchase	34,543	59,281
Other short-term borrowings	602,000	517,500
Long-term borrowings	434,260	413,308
Other liabilities	49,081	56,183
Total liabilities	7,884,318	7,425,761
Commitments and contingencies
STOCKHOLDERS' EQUITY
Common stock, $1.33 par value, shares authorized 100,000,000; issued and outstanding, 43,706,000 shares and 43,609,317 shares, respectively.	57,643	57,506
Additional paid-in capital	607,666	605,397
Retained earnings	361,552	341,938
Accumulated other comprehensive income	4,008	(3,809)
Total stockholders' equity	1,030,869	1,001,032
Total liabilities and stockholders' equity	$ 8,915,187	$ 8,426,793

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CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 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)	43,706,000	43,609,317
Common stock, shares outstanding (in shares)	43,706,000	43,609,317

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CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Interest and dividend income:
Interest and fees on loans	$ 72,612	$ 64,747	$ 140,696	$ 127,694
Interest on deposits in other banks	115	65	186	112
Interest and dividends on securities:
Taxable	4,982	4,510	9,905	8,826
Nontaxable	3,512	3,459	7,074	6,898
Total interest and dividend income	81,221	72,781	157,861	143,530
Interest expense:
Interest on deposits	6,100	4,197	11,176	8,393
Interest on short-term borrowings	1,400	710	2,350	1,332
Interest on long-term borrowings	4,722	2,098	8,768	4,298
Total interest expense	12,222	7,005	22,294	14,023
Net interest income	68,999	65,776	135,567	129,507
Provision for credit losses	2,173	2,300	4,295	4,904
Net interest income after provision for credit losses	66,826	63,476	131,272	124,603
Noninterest income:
Service charges on deposit accounts	4,963	4,754	9,792	9,488
Other service charges and fees	4,637	4,418	9,045	8,574
Fiduciary and asset management fees	2,725	2,333	5,519	4,471
Mortgage banking income, net	2,793	2,972	4,818	5,117
Gains on securities transactions, net	117	3	598	146
Bank owned life insurance income	1,335	1,361	3,460	2,734
Loan-related interest rate swap fees	1,031	1,091	2,211	1,753
Other operating income	455	1,061	1,451	1,624
Total noninterest income	18,056	17,993	36,894	33,907
Noninterest expenses:
Salaries and benefits	30,561	28,519	62,730	56,567
Occupancy expenses	4,718	4,809	9,621	9,785
Furniture and equipment expenses	2,720	2,595	5,323	5,232
Printing, postage, and supplies	1,406	1,280	2,556	2,419
Communications expense	872	927	1,782	2,016
Technology and data processing	3,927	3,608	7,827	7,422
Professional services	2,092	2,548	3,750	4,537
Marketing and advertising expense	2,279	1,924	4,019	3,863
FDIC assessment premiums and other insurance	947	1,379	1,652	2,741
Other taxes	2,022	1,607	4,043	3,225
Loan-related expenses	1,281	1,229	2,610	2,107
OREO and credit-related expenses	342	894	884	1,463
Amortization of intangible assets	1,544	1,745	3,180	3,625
Training and other personnel costs	1,043	905	2,012	1,649
Acquisition and conversion costs	2,744	0	2,744	0
Other expenses	1,432	1,282	2,592	2,872
Total noninterest expenses	59,930	55,251	117,325	109,523
Income before income taxes	24,952	26,218	50,841	48,987
Income tax expense	6,996	6,881	13,761	12,689
Net income	$ 17,956	$ 19,337	$ 37,080	$ 36,298
Basic earnings per common share (in usd per share)	$ 0.41	$ 0.44	$ 0.85	$ 0.82
Diluted earnings per common share (in usd per share)	0.41	0.44	0.85	0.82
Dividends declared per common share (in usd per share)	$ 0.20	$ 0.19	$ 0.4	$ 0.38
Basic weighted average number of common shares outstanding (in shares)	43,693,427	43,746,583	43,674,070	43,998,929
Diluted weighted average number of common shares outstanding (in shares)	43,783,952	43,824,183	43,755,045	44,075,706

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Statement of Comprehensive Income [Abstract]
Net income	$ 17,956	$ 19,337	$ 37,080	$ 36,298
Cash flow hedges:
Change in fair value of cash flow hedges	(775)	(1,007)	(807)	(3,688)
Reclassification adjustment for losses (gains) included in net income (net of tax, $171 and $74 for the three months and $269 and $150 for the six months ended June 30, 2017 and 2016, respectively)	318	138	499	279
AFS securities:
Unrealized holding gains (losses) arising during period (net of tax, $2,707 and $1,991 for the three months and $4,665 and $3,624 for the six months ended June 30, 2017 and 2016, respectively)	5,027	3,698	8,664	6,730
Reclassification adjustment for losses (gains) included in net income (net of tax, $41 and $1 for the three months and $209 and $51 for the six months ended June 30, 2017 and 2016, respectively)	(76)	(2)	(389)	(95)
HTM securities:
Reclassification adjustment for accretion of unrealized gain on AFS securities transferred to HTM (net of tax, $86 and $155 for the three months and $185 and $312 for the six months ended June 30, 2017 and 2016, respectively)	(160)	(287)	(344)	(579)
Bank owned life insurance:
Reclassification adjustment for losses included in net income	85	0	194	0
Net current period other comprehensive income (loss)	4,419	2,540	7,817	2,647
Comprehensive income	$ 22,375	$ 21,877	$ 44,897	$ 38,945

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Statement of Comprehensive Income [Abstract]
Tax expense (benefit) related to reclassification adjustment for losses included in net income	$ (171)	$ (74)	$ (269)	$ (150)
Tax expense (benefit) related to unrealized holding (losses) gains arising during period	2,707	1,991	4,665	3,624
Tax expense (benefit) related to (gains) losses on the sale of securities	(41)	(1)	(209)	(51)
Tax expense (benefit) related to (gains) losses for AFS securities transferred to HTM	$ 86	$ 155	$ 185	$ 312

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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
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	36,298			36,298
Other comprehensive income, (net of taxes)	2,647				2,647
Issuance of common stock in regard to acquisition	453	23	430
Dividends on common stock	(16,685)			(16,685)
Stock purchased under stock repurchase plan	(30,690)	(1,747)	(28,943)
Issuance of common stock under Equity Compensation Plans	482	46	436
Issuance of common stock for services rendered	240	13	227
Vesting of restricted stock, including tax effects, under Equity Compensation Plans	(398)	43	(441)
Stock-based compensation expense	1,487		1,487
Ending balance at Jun. 30, 2016	989,201	57,537	605,018	317,747	8,899
Beginning balance at Mar. 31, 2016					6,359
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	19,337
Other comprehensive income, (net of taxes)	2,540
Ending balance at Jun. 30, 2016	989,201	57,537	605,018	317,747	8,899
Beginning balance at Dec. 31, 2016	1,001,032	57,506	605,397	341,938	(3,809)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	37,080			37,080
Other comprehensive income, (net of taxes)	7,817				7,817
Issuance of common stock in regard to acquisition	0
Dividends on common stock	(17,466)			(17,466)
Issuance of common stock under Equity Compensation Plans	572	43	529
Issuance of common stock for services rendered	398	15	383
Vesting of restricted stock, including tax effects, under Equity Compensation Plans	(1,066)	79	(1,145)
Stock-based compensation expense	2,502		2,502
Ending balance at Jun. 30, 2017	1,030,869	57,643	607,666	361,552	4,008
Beginning balance at Mar. 31, 2017					(411)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	17,956
Other comprehensive income, (net of taxes)	4,419
Ending balance at Jun. 30, 2017	$ 1,030,869	$ 57,643	$ 607,666	$ 361,552	$ 4,008

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Statement of Stockholders' Equity [Abstract]
Other comprehensive income (loss), tax	$ 4,540	$ 3,411
Issuance of common stock, acquisition, shares		17,232
Dividends on common stock, per share (in usd per share)	$ 0.4	$ 0.38
Stock purchased under stock repurchase plan, shares		1,312,556
Issuance of common stock under Equity Compensation Plan , shares	31,818	34,227
Issuance of common stock for services rendered, shares	11,320	9,552
Vesting of restricted stock under Equity Compensation Plans, shares	59,426	31,993

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CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Operating activities:
Net income	$ 37,080	$ 36,298
Adjustments to reconcile net income to net cash and cash equivalents provided by (used in) operating activities:
Depreciation of premises and equipment	5,431	4,983
Writedown of OREO	257	400
Amortization, net	6,977	6,845
Amortization related to acquisition, net	70	1,077
Provision for credit losses	4,295	4,904
Gains on securities transactions, net	(598)	(146)
Bank owned life insurance income	(3,460)	(2,734)
Increase in loans held for sale, net	(4,648)	(2,084)
Gains on sales of other real estate owned, net	(72)	(1)
Losses on sales of premises, net	27	72
Stock-based compensation expenses	2,502	1,487
Issuance of common stock for services	398	240
Net decrease (increase) in other assets	3,991	(8,549)
Net (decrease) increase in other liabilities	(4,392)	1,920
Net cash and cash equivalents provided by (used in) operating activities	47,858	44,712
Investing activities:
Purchases of securities available for sale and restricted stock	(124,411)	(122,690)
Purchases of securities held to maturity	(7,836)	0
Proceeds from sales of securities available for sale and restricted stock	52,626	15,424
Proceeds from maturities, calls and paydowns of securities available for sale	59,342	56,414
Proceeds from maturities, calls and paydowns of securities held to maturity	909	610
Net increase in loans held for investment	(464,667)	(271,689)
Net increase in premises and equipment	(5,273)	(3,059)
Proceeds from sales of other real estate owned	381	2,138
Cash paid in acquisition	0	(4,077)
Cash acquired in acquisitions	0	207
Net cash and cash equivalents provided by (used in) investing activities	(488,929)	(326,722)
Financing activities:
Net increase in noninterest-bearing deposits	107,945	19,797
Net increase in interest-bearing deposits	277,000	112,093
Net increase in short-term borrowings	59,762	289,285
Cash paid for contingent consideration	(3,003)	0
Proceeds from issuance of long-term debt	20,000	0
Repayments of long-term debt	0	(17,500)
Cash dividends paid - common stock	(17,466)	(16,685)
Repurchase of common stock	0	(30,690)
Issuance of common stock	572	482
Vesting of restricted stock, net of shares held for taxes	(1,066)	(398)
Net cash and cash equivalents provided by (used in) financing activities	443,744	356,384
Increase in cash and cash equivalents	2,673	74,374
Cash and cash equivalents at beginning of the period	179,237	142,660
Cash and cash equivalents at end of the period	181,910	217,034
Cash payments for:
Interest	22,424	14,212
Income taxes	16,400	15,800
Supplemental schedule of noncash investing and financing activities
Transfers between loans and other real estate owned	(36)	619
Issuance of common stock in exchange for net assets in acquisition	$ 0	$ 453

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ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 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.

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.

Below is a summary of the Company's loan segments:

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 and six months ended June 30, 2017, the Company recognized amortization of $190,000 and $414,000, respectively, and tax credits of $174,000 and $484,000, respectively, associated with these investments within “Income tax expense” on the Company’s Consolidated Statements of Income. For the three and six months ended June 30, 2016, the Company recognized amortization of $130,000 and $260,000, respectively, and tax credits of $210,000 and $420,000, respectively. The carrying value of the Company’s investments in these qualified affordable housing projects was $9.4 million and $9.9 million as of June 30, 2017 and December 31, 2016, respectively. At June 30, 2017 and December 31, 2016, the Company's recorded liability totaled $4.6 million and $7.1 million, respectively, for the related unfunded commitments, which are expected to be paid from the second half of 2017 through 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 May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers: Topic 606.” This ASU revised guidance for the recognition, measurement, and disclosure of revenue from contracts with customers. The original guidance has been amended through subsequent accounting standard updates that resulted in technical corrections, improvements, and a one-year deferral of the effective date to January 1, 2018. The guidance, as amended, is applicable to all entities and, once effective, will replace significant portions of existing industry and transaction-specific revenue recognition rules with a more principles-based recognition model. Most revenue associated with financial instruments, including interest income, loan origination fees, and credit card fees, is outside the scope of the guidance. Gains and losses on investment securities, derivatives, and sales of financial instruments are similarly excluded from the scope. Entities can elect to adopt the guidance either on a full or modified retrospective basis. Full retrospective adoption will require a cumulative effect adjustment to retained earnings as of the beginning of the earliest comparative period presented. Modified retrospective adoption will require a cumulative effect adjustment to retained earnings as of the beginning of the reporting period in which the entity first applies the new guidance. The Company plans to adopt this guidance on the effective date, January 1, 2018. The Company is finalizing its assessment of the adoption of this ASU and the related subsequent technical corrections issued; however, based on the work performed, the Company does not anticipate that there will be a material impact on its consolidated financial statements.

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

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

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.

In May 2017, the FASB issued ASU No. 2017-09, “Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting.”This ASU relates to changes in the terms or conditions of a share-based payment award. The amendments provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The amendments will be effective for the Company for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted. The Company has concluded the adoption of ASU 2017-09 will not have a material impact on its consolidated financial statements.

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SECURITIES

6 Months Ended

Jun. 30, 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 June 30, 2017 and December 31, 2016 are summarized as follows (dollars in thousands):

	Amortized		Gross Unrealized					Estimated
	Cost		Gains		(Losses)			Fair Value
June 30, 2017
Obligations of states and political subdivisions	$	270,206	$	9,087	$	(753	)	$	278,540
Corporate bonds	116,318		1,009		(909		)	116,418
Mortgage-backed securities	548,229		5,417		(1,895		)	551,751
Other securities	13,886		—		(58		)	13,828
Total available for sale securities	$	948,639	$	15,513	$	(3,615	)	$	960,537
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 June 30, 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
June 30, 2017
Obligations of states and political subdivisions	$	27,804	$	(717	)	$	624	$	(36	)	$	28,428	$	(753	)
Mortgage-backed securities	197,560		(1,436		)	41,582		(459		)	239,142		(1,895		)
Corporate bonds and other securities	20,230		(367		)	38,872		(600		)	59,102		(967		)
Total available for sale securities	$	245,594	$	(2,520	)	$	81,078	$	(1,095	)	$	326,672	$	(3,615	)
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 June 30, 2017, there were $81.1 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 June 30, 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 June 30, 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.

	June 30, 2017				December 31, 2016
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due in one year or less	$	23,527	$	23,610	$	21,403	$	21,517
Due after one year through five years	120,077		122,479		108,198		109,778
Due after five years through ten years	276,269		281,588		300,552		301,888
Due after ten years	528,766		532,860		517,444		513,581
Total securities available for sale	$	948,639	$	960,537	$	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 June 30, 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 June 30, 2017 and December 31, 2016 are summarized as follows (dollars in thousands):

	Carrying		Gross Unrealized					Estimated
	Value (1)		Gains		(Losses)			Fair Value
June 30, 2017
Obligations of states and political subdivisions	$	205,630	$	5,909	$	(93	)	$	211,446
December 31, 2016
Obligations of states and political subdivisions	$	201,526	$	1,617	$	(828	)	$	202,315

(1) The carrying value includes $4.4 million as of June 30, 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 (dollars 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 June 30, 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
June 30, 2017
Obligations of states and political subdivisions	$	3,088	$	(67	)	$	644	$	(26	)	$	3,732	$	(93	)
December 31, 2016
Obligations of states and political subdivisions	$	92,841	$	(747	)	$	648	$	(81	)	$	93,489	$	(828	)

As of June 30, 2017, there was $644,000, or one 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 $26,000. As of December 31, 2016, there was $648,000, or one 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 June 30, 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 June 30, 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.

	June 30, 2017				December 31, 2016
	Carrying Value (1)		Estimated Fair Value		Carrying Value (1)		Estimated Fair Value
Due in one year or less	$	4,797	$	4,826	$	4,403	$	4,440
Due after one year through five years	34,383		35,020		28,383		28,763
Due after five years through ten years	63,538		65,281		51,730		51,522
Due after ten years	102,912		106,319		117,010		117,590
Total securities held to maturity	$	205,630	$	211,446	$	201,526	$	202,315

(1)The carrying value includes $4.4 million as of June 30, 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 June 30, 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 June 30, 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 June 30, 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 June 30, 2017 and December 31, 2016 and FHLB stock in the amount of $42.1 million and $37.0 million as of June 30, 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 and six months ended June 30, 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 and six months ended June 30, 2017 and 2016 (dollars in thousands).

	Three Months Ended June 30, 2017			Six Months Ended June 30, 2017
Realized gains (losses):
Gross realized gains	$	180		$	661
Gross realized losses	(63		)	(63		)
Net realized gains	$	117		$	598
Proceeds from sales of securities	$	31,320		$	52,626

	Three Months Ended June 30, 2016		Six Months Ended June 30, 2016
Realized gains (losses):
Gross realized gains	$	3	$	242
Gross realized losses	—		(96		)
Net realized gains	$	3	$	146
Proceeds from sales of securities	$	892	$	15,424

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LOANS AND ALLOWANCE FOR LOAN LOSSES

6 Months Ended

Jun. 30, 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 June 30, 2017 and December 31, 2016 (dollars in thousands):

	June 30, 2017		December 31, 2016
Construction and Land Development	$	799,938	$	751,131
Commercial Real Estate - Owner Occupied	888,285		857,805
Commercial Real Estate - Non-Owner Occupied	1,698,329		1,564,295
Multifamily Real Estate	367,257		334,276
Commercial & Industrial	568,602		551,526
Residential 1-4 Family	1,066,519		1,029,547
Auto	274,162		262,071
HELOC	535,088		526,884
Consumer and all other	573,310		429,525
Total loans held for investment, net (1)	$	6,771,490	$	6,307,060

(1)Loans, as presented, are net of deferred fees and costs totaling $898,000 and $1.8 million as of June 30, 2017 and December 31, 2016, respectively.

The following table shows the aging of the Company’s loan portfolio, by segment, at June 30, 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	$	602	$	26	$	83	$	2,694	$	5,659	$	790,874	$	799,938
Commercial Real Estate - Owner Occupied	3,148		194		56		17,906		1,279		865,702		888,285
Commercial Real Estate - Non-Owner Occupied	1,530		571		298		16,308		4,765		1,674,857		1,698,329
Multifamily Real Estate	500		—		—		2,047		—		364,710		367,257
Commercial & Industrial	1,652		113		55		751		4,281		561,750		568,602
Residential 1-4 Family	2,477		5,663		2,369		15,087		6,128		1,034,795		1,066,519
Auto	1,562		240		35		—		270		272,055		274,162
HELOC	1,405		964		544		1,156		2,059		528,960		535,088
Consumer and all other	1,891		1,242		185		218		133		569,641		573,310
Total loans held for investment	$	14,767	$	9,013	$	3,625	$	56,167	$	24,574	$	6,663,344	$	6,771,490

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 June 30, 2017 (dollars in thousands):

	30-89 Days Past Due		Greater than 90 Days		Current		Total
Construction and Land Development	$	67	$	—	$	2,627	$	2,694
Commercial Real Estate - Owner Occupied	339		650		16,917		17,906
Commercial Real Estate - Non-Owner Occupied	1,195		76		15,037		16,308
Multifamily Real Estate	—		—		2,047		2,047
Commercial & Industrial	109		—		642		751
Residential 1-4 Family	1,138		903		13,046		15,087
HELOC	221		127		808		1,156
Consumer and all other	35		—		183		218
Total	$	3,104	$	1,756	$	51,307	$	56,167

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, by segment at June 30, 2017 and December 31, 2016 (dollars in thousands):

	June 30, 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	$	10,097	$	10,109	$	—	$	13,877	$	14,353	$	—
Commercial Real Estate - Owner Occupied	5,810		5,981		—		5,886		6,042		—
Commercial Real Estate - Non-Owner Occupied	1,671		1,671		—		1,399		1,399		—
Commercial & Industrial	1,040		1,285		—		648		890		—
Residential 1-4 Family	9,144		10,208		—		8,496		9,518		—
HELOC	1,174		1,351		—		1,017		1,094		—
Consumer and all other	605		716		—		230		427		—
Total impaired loans without a specific allowance	$	29,541	$	31,321	$	—	$	31,553	$	33,723	$	—
Loans with a specific allowance
Construction and Land Development	$	5,136	$	5,331	$	720	$	1,395	$	1,404	$	107
Commercial Real Estate - Owner Occupied	631		631		3		646		646		4
Commercial Real Estate - Non-Owner Occupied	7,991		8,040		640		2,809		2,809		474
Commercial & Industrial	5,836		5,945		1,034		857		880		14
Residential 1-4 Family	3,834		4,071		424		3,335		3,535		200
Auto	270		393		1		169		235		1
HELOC	937		962		70		323		433		15
Consumer and all other	24		88		1		62		298		1
Total impaired loans with a specific allowance	$	24,659	$	25,461	$	2,893	$	9,596	$	10,240	$	816
Total impaired loans	$	54,200	$	56,782	$	2,893	$	41,149	$	43,963	$	816

The following tables show the average recorded investment and interest income recognized for the Company’s impaired loans, excluding PCI loans, by segment for the three and six months ended June 30, 2017 and 2016 (dollars in thousands):

	Three Months Ended June 30, 2017				Six Months Ended June 30, 2017
	Average Investment		Interest Income Recognized		Average Investment		Interest Income Recognized
Construction and Land Development	$	15,111	$	119	$	14,939	$	235
Commercial Real Estate - Owner Occupied	6,471		61		6,507		122
Commercial Real Estate - Non-Owner Occupied	9,675		48		9,698		139
Commercial & Industrial	6,942		41		7,212		72
Residential 1-4 Family	13,311		43		13,372		108
Auto	347		2		368		2
HELOC	2,265		1		2,273		5
Consumer and all other	564		8		405		7
Total impaired loans	$	54,686	$	323	$	54,774	$	690

	Three Months Ended June 30, 2016				Six Months Ended June 30, 2016
	Average Investment		Interest Income Recognized		Average Investment		Interest Income Recognized
Construction and Land Development	$	30,524	$	495	$	30,174	$	962
Commercial Real Estate - Owner Occupied	13,567		148		13,719		292
Commercial Real Estate - Non-Owner Occupied	4,215		43		4,216		79
Multifamily Real Estate	3,791		60		3,804		120
Commercial & Industrial	2,622		31		2,861		61
Residential 1-4 Family	14,189		90		14,365		183
Auto	162		—		183		—
HELOC	2,492		11		2,519		29
Consumer and all other	374		1		572		4
Total impaired loans	$	71,936	$	879	$	72,413	$	1,730

The Company considers TDRs to be impaired loans. A modification of a loan’s terms constitutes a TDR if the creditor grants a concession that it would not otherwise consider to the borrower for economic or legal reasons related to the borrower’s financial difficulties. All loans that are considered to be TDRs are evaluated for impairment in accordance with the Company’s allowance for loan loss methodology and are included in the preceding impaired loan tables. For the three and six months ended June 30, 2017, the recorded investment in TDRs 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 June 30, 2017 and December 31, 2016 (dollars in thousands):

	June 30, 2017					December 31, 2016
	No. of Loans	Recorded Investment		Outstanding Commitment		No. of Loans	Recorded Investment		Outstanding Commitment
Performing
Construction and Land Development	7	$	3,282	$	—	8	$	3,793	$	—
Commercial Real Estate - Owner Occupied	6	2,579		—		7	3,106		—
Commercial Real Estate - Non-Owner Occupied	2	1,631		—		2	2,390		—
Commercial & Industrial	13	2,194		—		3	533		—
Residential 1-4 Family	32	4,766		—		28	4,145		—
Consumer and all other	1	495		—		—	—		—
Total performing	61	$	14,947	$	—	48	$	13,967	$	—
Nonperforming
Construction and Land Development	5	$	502	$	—	2	$	215	$	—
Commercial Real Estate - Owner Occupied	3	616		—		2	156		—
Commercial Real Estate - Non-Owner Occupied	1	2,050		—		—	—		—
Commercial & Industrial	1	86		—		1	116		—
Residential 1-4 Family	10	1,200		—		8	948		—
Total nonperforming	20	$	4,454	$	—	13	$	1,435	$	—
Total performing and nonperforming	81	$	19,401	$	—	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 and six months ended June 30, 2017, the Company identified five TDRs, totaling approximately $1.1 million that went into default that had been restructured in the twelve-month period prior to default; these loans consisted of commercial real estate - owner occupied, residential 1-4 family, and construction and land development loans. During the three and six months ended June 30, 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 and six months ended June 30, 2017 (dollars in thousands):

	Three Months Ended June 30, 2017			Six Months Ended June 30, 2017
	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
Construction and Land Development	3	$	1,084	3	$	1,084
Commercial Real Estate - Non-Owner Occupied	—	—		2	1,631
Commercial & Industrial	2	157		4	973
Residential 1-4 Family	2	562		5	939
Consumer and all other	1	495		1	495
Total loan term extended at a market rate	8	$	2,298	15	$	5,122
Term modification, below market rate
Commercial Real Estate - Owner Occupied	1	$	844	1	$	844
Commercial & Industrial	1	85		3	195
Residential 1-4 Family	3	244		7	1,107
Total loan term extended at a below market rate	5	$	1,173	11	$	2,146
Total	13	$	3,471	31	$	7,929

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

	Three Months Ended June 30, 2016			Six Months Ended June 30, 2016
	No. of Loans	Recorded  Investment at Period End		No. of Loans	Recorded  Investment at Period End
Term modification, at a market rate
Construction and Land Development	1	$	1,193	1	$	1,193
Commercial Real Estate - Owner Occupied	1	38		2	743
Residential 1-4 Family	1	100		2	476
Total loan term extended at a market rate	3	$	1,331	5	$	2,412
Term modification, below market rate
Residential 1-4 Family	1	$	37	1	$	37
Total loan term extended at a below market rate	1	$	37	1	$	37
Interest rate modification, below market rate
Commercial & Industrial	1	$	135	1	$	135
Total interest only at below market rate of interest	1	$	135	1	$	135
Total	5	$	1,503	7	$	2,584

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 six months ended and as of June 30, 2017. The table below includes the provision for loan losses. 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	$	45	$	(253	)	$	(792	)	$	9,055
Commercial Real Estate - Owner Occupied	3,801		65		—			(514		)	3,352
Commercial Real Estate - Non-Owner Occupied	6,622		1		(677		)	1,390			7,336
Multifamily Real Estate	1,236		—		—			(117		)	1,119
Commercial & Industrial	4,627		262		(557		)	1,282			5,614
Residential 1-4 Family	6,399		266		(466		)	49			6,248
Auto	946		249		(586		)	311			920
HELOC	1,328		202		(573		)	383			1,340
Consumer and all other	2,178		582		(1,848		)	2,318			3,230
Total	$	37,192	$	1,672	$	(4,960	)	$	4,310		$	38,214

	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	$	15,233	$	720	$	782,011	$	8,335	$	2,694	$	—	$	799,938	$	9,055
Commercial Real Estate - Owner Occupied	6,441		3		863,938		3,349		17,906		—		888,285		3,352
Commercial Real Estate - Non-Owner Occupied	9,662		640		1,672,359		6,696		16,308		—		1,698,329		7,336
Multifamily Real Estate	—		—		365,210		1,119		2,047		—		367,257		1,119
Commercial & Industrial	6,876		1,034		560,975		4,580		751		—		568,602		5,614
Residential 1-4 Family	12,978		424		1,038,454		5,824		15,087		—		1,066,519		6,248
Auto	270		1		273,892		919		—		—		274,162		920
HELOC	2,111		70		531,821		1,270		1,156		—		535,088		1,340
Consumer and all other	629		1		572,463		3,229		218		—		573,310		3,230
Total loans held for investment, net	$	54,200	$	2,893	$	6,661,123	$	35,321	$	56,167	$	—	$	6,771,490	$	38,214

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 six months ended and as of June 30, 2016. In addition, a $100,000 provision was recognized during the six months ended June 30, 2016 for unfunded loan commitments for which the reserves are recorded as a component of “Other Liabilities” on the Company’s Consolidated Balance Sheets. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories (dollars in thousands):

	Allowance for loan losses
	Balance, beginning of the year		Recoveries credited to allowance		Loans charged off			Provision charged to operations			Balance, end of period
Construction and Land Development	$	6,040	$	97	$	(859	)	$	5,030		$	10,308
Commercial Real Estate - Owner Occupied	4,614		62		(772		)	129			4,033
Commercial Real Estate - Non-Owner Occupied	6,929		—		—			(1,536		)	5,393
Multifamily Real Estate	1,606		—		—			(697		)	909
Commercial & Industrial	3,163		355		(1,285		)	1,793			4,026
Residential 1-4 Family	5,414		381		(295		)	600			6,100
Auto	1,703		131		(525		)	(470		)	839
HELOC	2,934		132		(800		)	(948		)	1,318
Consumer and all other	1,644		330		(729		)	903			2,148
Total	$	34,047	$	1,488	$	(5,265	)	$	4,804		$	35,074

	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	$	31,710	$	64	$	729,274	$	10,244	$	5,013	$	—	$	765,997	$	10,308
Commercial Real Estate - Owner Occupied	13,492		49		797,696		3,984		20,692		—		831,880		4,033
Commercial Real Estate - Non-Owner Occupied	4,260		1		1,348,188		5,392		18,297		—		1,370,745		5,393
Multifamily Real Estate	3,777		—		331,854		909		2,092		—		337,723		909
Commercial & Industrial	2,488		47		465,212		3,979		1,354		—		469,054		4,026
Residential 1-4 Family	13,945		345		960,707		5,755		17,805		—		992,457		6,100
Auto	140		1		244,435		838		—		—		244,575		839
HELOC	2,337		81		515,342		1,237		1,517		—		519,196		1,318
Consumer and all other	326		1		408,745		2,147		400		—		409,471		2,148
Total loans held for investment, net	$	72,475	$	589	$	5,801,453	$	34,485	$	67,170	$	—	$	5,941,098	$	35,074

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 June 30, 2017 (dollars in thousands):

	Pass		Special Mention		Substandard		Doubtful		Total
Construction and Land Development	$	726,106	$	58,155	$	12,883	$	100	$	797,244
Commercial Real Estate - Owner Occupied	824,793		41,397		4,189		—		870,379
Commercial Real Estate - Non-Owner Occupied	1,648,876		23,666		9,479		—		1,682,021
Multifamily Real Estate	358,597		6,613		—		—		365,210
Commercial & Industrial	543,951		18,291		5,609		—		567,851
Residential 1-4 Family	1,021,053		22,903		4,995		2,481		1,051,432
Auto	271,701		2,254		77		130		274,162
HELOC	528,606		3,501		1,245		580		533,932
Consumer and all other	570,248		2,226		509		109		573,092
Total	$	6,493,931	$	179,006	$	38,986	$	3,400	$	6,715,323

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 June 30, 2017 (dollars in thousands):

	Pass		Special Mention		Substandard		Doubtful		Total
Construction and Land Development	$	1,121	$	1,297	$	276	$	—	$	2,694
Commercial Real Estate - Owner Occupied	5,617		8,337		3,952		—		17,906
Commercial Real Estate - Non-Owner Occupied	12,807		2,230		1,271		—		16,308
Multifamily Real Estate	338		1,709		—		—		2,047
Commercial & Industrial	105		368		278		—		751
Residential 1-4 Family	7,735		4,624		1,850		878		15,087
HELOC	808		221		11		116		1,156
Consumer and all other	158		49		11		—		218
Total	$	28,689	$	18,835	$	7,649	$	994	$	56,167

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 Six Months Ended June 30,
	2017			2016
Balance at beginning of period	$	19,739		$	22,139
Accretion	(3,188		)	(2,792		)
Reclass of nonaccretable difference due to improvement in expected cash flows	2,072			3,450
Other, net (1)	(875		)	(2,139		)
Balance at end of period	$	17,748		$	20,658

(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 $56.2 million at June 30, 2017 and $59.3 million at December 31, 2016. The outstanding balance of the Company’s PCI loan portfolio totaled $68.9 million at June 30, 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 $996.8 million at June 30, 2017 and $1.1 billion at December 31, 2016; the remaining discount on these loans totaled $15.4 million at June 30, 2017 and $16.9 million at December 31, 2016.

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INTANGIBLE ASSETS

6 Months Ended

Jun. 30, 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 2017 and determined that there was no impairment to its goodwill or intangible assets.

Amortization expense of core deposit intangibles for the three and six months ended June 30, 2017 totaled $1.4 million and $2.9 million, respectively; and the three and six months ended June 30, 2016 totaled $1.7 million and $3.6 million, respectively. Amortization expense of other intangibles for both the three and six months ended June 30, 2017 totaled $120,000 and $240,000, respectively and $0 for theboththree and sixmonths endedJune 30, 2016. As of June 30, 2017, the estimated remaining amortization expense of intangibles is as follows (dollars in thousands):

For the remaining six months of 2017	$	2,890
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	$	17,422

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BORROWINGS

6 Months Ended

Jun. 30, 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 June 30, 2017 and December 31, 2016 (dollars in thousands):

	June 30, 2017			December 31, 2016
Securities sold under agreements to repurchase	$	34,543		$	59,281
Other short-term borrowings	602,000			517,500
Total short-term borrowings	$	636,543		$	576,781
Maximum month-end outstanding balance	$	696,529		$	678,262
Average outstanding balance during the period	586,476			590,074
Average interest rate (year-to-date)	0.81		%	0.49		%
Average interest rate at end of period	1.02		%	0.60		%
Other short-term borrowings:
FHLB	602,000			517,500
Other lines of credit	—			—

The Bank maintains federal funds lines with several correspondent banks; the remaining available balance was $185.0 million and $175.0 million at both June 30, 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 June 30, 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 $2.6 billion and $2.4 billion at June 30, 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 $6.6 million at June 30, 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	%	4.05	%	6/17/2034
Trust Preferred Capital Note - Statutory Trust II	36,000,000		1,114,000		1.40	%	2.70	%	6/15/2036
VFG Limited Liability Trust I Indenture	20,000,000		619,000		2.73	%	4.03	%	3/18/2034
FNB Statutory Trust II Indenture	12,000,000		372,000		3.10	%	4.40	%	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" on 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 June 30, 2017 and December 31, 2016, the carrying value of the subordinated debt was $150.0 million, with a remaining discount of $1.9 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 and six months ended June 30, 2017 and 2016 was $478,000 and $947,000 and $466,000 and $930,000, 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 June 30, 2017 that had a remaining fair value premium of $336,000.

As of June 30, 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	%	1.74	%	8/23/2022	$	55,000
Adjustable Rate Credit	0.45	%	1.75	%	11/23/2022	65,000
Adjustable Rate Credit	0.45	%	1.75	%	11/23/2022	10,000
Adjustable Rate Credit	0.45	%	1.75	%	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
Fixed Rate Hybrid	—		1.58	%	5/18/2020	20,000
						$	210,000
(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 June 30, 2017 and December 31, 2016, refer to Note 6 "Commitments and Contingencies".

As of June 30, 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 six months of 2017	$	—	$	—	$	10,000	$	(25	)	$	(974	)	$	9,001
2018	—		—		40,000		(343		)	(1,970		)	37,687
2019	—		—		—		(486		)	(2,018		)	(2,504		)
2020	—		—		20,000		(501		)	(2,074		)	17,425
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	$	210,000	$	(8,179	)	$	(10,862	)	$	434,260

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COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 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 June 30, 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): 

	June 30, 2017		December 31, 2016
Commitments with off-balance sheet risk:
Commitments to extend credit (1)	$	2,001,802	$	1,924,885
Standby letters of credit	117,949		84,212
Total commitments with off-balance sheet risk	$	2,119,751	$	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 period ended June 30, 2017, the aggregate amount of daily average required reserves was approximately $71.6 million and was satisfied by vault cash holdings and deposits maintained with the Federal Reserve Bank.

As of June 30, 2017, the Company had approximately $42.4 million in deposits in other financial institutions, of which $20.2 million served as collateral for cash flow and loan swap derivatives. The Company had approximately $20.9 million in deposits in other financial institutions that were uninsured at June 30, 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 mortgage loans previously sold based on historical statistics and loss rates; as of June 30, 2017 and December 31, 2016, the Company’s indemnification reserve was approximately $334,000 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 June 30, 2017 and December 31, 2016 (dollars in thousands):

	Pledged Assets as of June 30, 2017
	Cash		AFS Securities (1)		HTM Securities (1)		Loans (2)		Total
Public deposits	$	—	$	224,984	$	209,235	$	—	$	434,219
Repurchase agreements	—		92,678		—		—		92,678
FHLB advances	—		1,162		—		2,239,193		2,240,355
Derivatives	20,177		4,074		—		—		24,251
Other purposes	—		16,109		—		—		16,109
Total pledged assets	$	20,177	$	339,007	$	209,235	$	2,239,193	$	2,807,612

(1) Balance represents market value.

(2) Balance represents book value.

	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

6 Months Ended

Jun. 30, 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 reclassified 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 June 30, 2018 is $391,000.

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 June 30, 2017 and December 31, 2016, the aggregate notional amount of the related hedged items totaled $79.6 million and $65.9 million, respectively, and the fair value of the related hedged items was an unrealized loss of $547,000 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 June 30, 2017 and December 31, 2016, segregated by derivatives that are considered accounting hedges and those that are not (dollars in thousands):

	June 30, 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	$	152,500		$	153	$	9,995	$	188,500		$	211	$	9,619
Fair value hedges	79,560			1,282		368		65,920			1,437		296
Derivatives not designated as accounting hedges:
Loan Swaps
Pay fixed - receive floating interest rate swaps	492,158			2,770		—		373,355			—		1,005
Pay floating - receive fixed interest rate swaps	492,158			—		2,770		373,355			1,005		—
Other contracts:
Interest rate lock commitments	55,062			724		—		48,743			610		—
Best efforts forward delivery commitments	94,853			235		—		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)

6 Months Ended

Jun. 30, 2017

Equity [Abstract]

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The change in accumulated other comprehensive income (loss) for the three and six months ended June 30, 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 - March 31, 2017	$	2,782		$	3,193		$	(5,030	)	$	(1,356	)	$	(411	)
Other comprehensive income (loss)	5,027			—			(775		)	—			4,252
Amounts reclassified from accumulated other comprehensive income	(76		)	(160		)	318			85			167
Net current period other comprehensive income (loss)	4,951			(160		)	(457		)	85			4,419
Balance - June 30, 2017	$	7,733		$	3,033		$	(5,487	)	$	(1,271	)	$	4,008

	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)	8,664			—			(807		)	—			7,857
Amounts reclassified from accumulated other comprehensive income	(389		)	(344		)	499			194			(40		)
Net current period other comprehensive income (loss)	8,275			(344		)	(308		)	194			7,817
Balance - June 30, 2017	$	7,733		$	3,033		$	(5,487	)	$	(1,271	)	$	4,008

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

	Unrealized Gains (Losses) on AFS Securities			Unrealized Gain for AFS Securities Transferred to HTM			Change in Fair Value of Cash Flow Hedge			Total
Balance - March 31, 2016	$	10,716		$	4,140		$	(8,497	)	$	6,359
Other comprehensive income (loss)	3,698			—			(1,007		)	2,691
Amounts reclassified from accumulated other comprehensive income	(2		)	(287		)	138			(151		)
Net current period other comprehensive income (loss)	$	3,696		$	(287	)	$	(869	)	$	2,540
Balance - June 30, 2016	$	14,412		$	3,853		$	(9,366	)	$	8,899

	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)	6,730			—			(3,688		)	3,042
Amounts reclassified from accumulated other comprehensive income	(95		)	(579		)	279			(395		)
Net current period other comprehensive income (loss)	6,635			(579		)	(3,409		)	2,647
Balance - June 30, 2016	$	14,412		$	3,853		$	(9,366	)	$	8,899

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 $117,000 and $598,000 for the three and six months ended June 30, 2017, respectively, and $3,000 and $146,000 for the three and six months ended June 30, 2016, respectively, related to the sale of securities. The tax effects of these transactions during the three and six months ended June 30, 2017 were $41,000 and $209,000, respectively, and were $1,000 and $51,000 during the three and six months ended June 30, 2016, 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 $246,000 and $529,000 for the three and six months ended June 30, 2017, respectively, and $442,000 and $891,000 for the three and six months ended June 30, 2016, respectively. The tax effect of these transactions during the three and six months ended June 30, 2017 were $86,000 and $185,000, respectively, and were $155,000 and $312,000 for the three and six months ended June 30, 2016, 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 $489,000 and $768,000 for the three and six months ended June 30, 2017, respectively, and $212,000 and $429,000 for the three and six months ended June 30, 2016, respectively. The tax effects of these transactions during the three and six months ended June 30, 2017 were $171,000 and $269,000, respectively, and were $74,000 and $150,000 during the three and six months ended June 30, 2016, 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 $85,000 and $194,000 for the three and six months ended June 30, 2017, respectively, and $0 for the both three and six months ended June 30, 2016.

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FAIR VALUE MEASUREMENTS

6 Months Ended

Jun. 30, 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 June 30, 2017 and December 31, 2016. The interest rate lock commitments are recorded as a component of “Other Assets” on the Company’s Consolidated Balance Sheets.

Securities available for sale

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

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

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

The Company primarily uses Bloomberg Valuation Service, an independent information source that draws on quantitative models and market data contributed from over 4,000 market participants, to validate third party valuations. Any material differences between valuation sources are researched by further analyzing the various inputs that are utilized by each pricing source. No material differences were identified during the validation as of June 30, 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 June 30, 2017 and December 31, 2016 (dollars in thousands): 

	Fair Value Measurements at June 30, 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	$	—	$	278,540	$	—	$	278,540
Corporate and other bonds	—		116,418		—		116,418
Mortgage-backed securities	—		551,751		—		551,751
Other securities	—		13,828		—		13,828
Loans held for sale	—		41,135		—		41,135
Derivatives:
Interest rate swap	—		2,770		—		2,770
Cash flow hedges	—		153		—		153
Fair value hedges	—		1,282		—		1,282
Interest rate lock commitments	—		—		724		724
Best efforts forward delivery commitments	—		—		235		235
LIABILITIES
Derivatives:
Interest rate swap	$	—	$	2,770	$	—	$	2,770
Cash flow hedges	—		9,995		—		9,995
Fair value hedges	—		368		—		368

	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). At June 30, 2017 and December 31, 2016, the Level 3 weighted average adjustments related to impaired loans were 3.2% 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. At June 30, 2017 and December 31, 2016, the Level 3 weighted average adjustments related to OREO were approximately 25.3% and 25.1%, respectively.

Total valuation expenses related to OREO properties for the three months ended June 30, 2017 and 2016 totaled $19,000 and $274,000, respectively. Total valuation expenses related to OREO properties for the six months ended June 30, 2017 and 2016 totaled $257,000 and $400,000, respectively.

The following tables summarize the Company’s financial assets that were measured at fair value on a nonrecurring basis at June 30, 2017 and December 31, 2016 (dollars in thousands):

	Fair Value Measurements at June 30, 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	$	—	$	—	$	18,320	$	18,320
Other real estate owned	—		—		9,482		9,482

	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 June 30, 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 June 30, 2017 and December 31, 2016 are as follows (dollars in thousands):

			Fair Value Measurements at June 30, 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	$	181,910	$	181,910	$	—	$	—	$	181,910
Securities available for sale	960,537		—		960,537		—		960,537
Held to maturity securities	205,630		—		211,446		—		211,446
Restricted stock	69,631		—		69,631		—		69,631
Loans held for sale	41,135		—		41,135		—		41,135
Net loans	6,733,276		—		—		6,745,405		6,745,405
Derivatives:
Interest rate swap	2,770		—		2,770		—		2,770
Cash flow hedge	153		—		153		—		153
Fair value hedge	1,282		—		1,282		—		1,282
Interest rate lock commitments	724		—		—		724		724
Best efforts forward delivery commitments	235		—		—		235		235
Accrued interest receivable	23,801		—		23,801		—		23,801
Bank owned life insurance	180,110		—		180,110		—		180,110
LIABILITIES
Deposits	$	6,764,434	$	—	$	6,756,022	$	—	$	6,756,022
Borrowings	1,070,803		—		1,051,143		—		1,051,143
Accrued interest payable	2,196		—		2,196		—		2,196
Derivatives:
Interest rate swap	2,770		—		2,770		—		2,770
Cash flow hedges	9,995		—		9,995		—		9,995
Fair value hedges	368		—		368		—		368

			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

6 Months Ended

Jun. 30, 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 102,984 and 407 shares underlying anti-dilutive awards for the three months ended June 30, 2017 and 2016, respectively, and there were approximately 72,951 and 1,116 shares underlying anti-dilutive awards for the six months ended June 30, 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 and six months ended June 30, 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 June 30, 2017
Net income, basic	$	17,956	43,693	$	0.41
Add: potentially dilutive common shares - stock awards	—		91	—
Diluted	$	17,956	43,784	$	0.41
Three months ended June 30, 2016
Net income, basic	$	19,337	43,747	$	0.44
Add: potentially dilutive common shares - stock awards	—		77	—
Diluted	$	19,337	43,824	$	0.44
Six months ended June 30, 2017
Net income, basic	$	37,080	43,674	$	0.85
Add: potentially dilutive common shares - stock awards	—		81	—
Diluted	$	37,080	43,755	$	0.85
Six months ended June 30, 2016
Net income, basic	$	36,298	43,999	$	0.82
Add: potentially dilutive common shares - stock awards	—		77	—
Diluted	$	36,298	44,076	$	0.82

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SEGMENT REPORTING DISCLOSURES

6 Months Ended

Jun. 30, 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 112 retail locations in Virginia as of June 30, 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 and six months ended June 30, 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 and six months ended June 30, 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 June 30, 2017
Net interest income	$	68,580	$	419		$	—		$	68,999
Provision for credit losses	2,184		(11		)	—			2,173
Net interest income after provision for credit losses	66,396		430			—			66,826
Noninterest income	15,203		2,993			(140		)	18,056
Noninterest expenses	57,496		2,574			(140		)	59,930
Income before income taxes	24,103		849			—			24,952
Income tax expense	6,698		298			—			6,996
Net income	$	17,405	$	551		$	—		$	17,956
Total assets	$	8,904,819	$	105,429		$	(95,061	)	$	8,915,187
Three Months Ended June 30, 2016
Net interest income	$	65,478	$	298		$	—		$	65,776
Provision for credit losses	2,260		40			—			2,300
Net interest income after provision for credit losses	63,218		258			—			63,476
Noninterest income	14,940		3,207			(154		)	17,993
Noninterest expenses	52,766		2,639			(154		)	55,251
Income before income taxes	25,392		826			—			26,218
Income tax expense	6,594		287			—			6,881
Net income	$	18,798	$	539		$	—		$	19,337
Total assets	$	8,094,176	$	75,802		$	(69,417	)	$	8,100,561
Six Months Ended June 30, 2017
Net interest income	$	134,816	$	751		$	—		$	135,567
Provision for credit losses	4,288		7			—			4,295
Net interest income after provision for credit losses	130,528		744			—			131,272
Noninterest income	31,959		5,216			(281		)	36,894
Noninterest expenses	112,510		5,096			(281		)	117,325
Income before income taxes	49,977		864			—			50,841
Income tax expense	13,452		309			—			13,761
Net income	$	36,525	$	555		$	—		$	37,080
Total assets	$	8,904,819	$	105,429		$	(95,061	)	$	8,915,187
Six Months Ended June 30, 2016
Net interest income	$	128,903	$	604		$	—		$	129,507
Provision for credit losses	4,760		144			—			4,904
Net interest income after provision for credit losses	124,143		460			—			124,603
Noninterest income	28,548		5,684			(325		)	33,907
Noninterest expenses	104,610		5,238			(325		)	109,523
Income before income taxes	48,081		906			—			48,987
Income tax expense	12,376		313			—			12,689
Net income	$	35,705	$	593		$	—		$	36,298
Total assets	$	8,094,176	$	75,802		$	(69,417	)	$	8,100,561

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ACCOUNTING POLICIES (Policies)

6 Months Ended

Jun. 30, 2017

Accounting Policies [Abstract]

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.

Below is a summary of the Company's loan segments:

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 May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers: Topic 606.” This ASU revised guidance for the recognition, measurement, and disclosure of revenue from contracts with customers. The original guidance has been amended through subsequent accounting standard updates that resulted in technical corrections, improvements, and a one-year deferral of the effective date to January 1, 2018. The guidance, as amended, is applicable to all entities and, once effective, will replace significant portions of existing industry and transaction-specific revenue recognition rules with a more principles-based recognition model. Most revenue associated with financial instruments, including interest income, loan origination fees, and credit card fees, is outside the scope of the guidance. Gains and losses on investment securities, derivatives, and sales of financial instruments are similarly excluded from the scope. Entities can elect to adopt the guidance either on a full or modified retrospective basis. Full retrospective adoption will require a cumulative effect adjustment to retained earnings as of the beginning of the earliest comparative period presented. Modified retrospective adoption will require a cumulative effect adjustment to retained earnings as of the beginning of the reporting period in which the entity first applies the new guidance. The Company plans to adopt this guidance on the effective date, January 1, 2018. The Company is finalizing its assessment of the adoption of this ASU and the related subsequent technical corrections issued; however, based on the work performed, the Company does not anticipate that there will be a material impact on its consolidated financial statements.

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

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

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.

In May 2017, the FASB issued ASU No. 2017-09, “Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting.”This ASU relates to changes in the terms or conditions of a share-based payment award. The amendments provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The amendments will be effective for the Company for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted. The Company has concluded the adoption of ASU 2017-09 will not have a material impact on its consolidated financial statements.

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SECURITIES (Tables)

6 Months Ended

Jun. 30, 2017

Schedule of Investments [Line Items]

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 and six months ended June 30, 2017 and 2016 (dollars in thousands).

	Three Months Ended June 30, 2017			Six Months Ended June 30, 2017
Realized gains (losses):
Gross realized gains	$	180		$	661
Gross realized losses	(63		)	(63		)
Net realized gains	$	117		$	598
Proceeds from sales of securities	$	31,320		$	52,626

	Three Months Ended June 30, 2016		Six Months Ended June 30, 2016
Realized gains (losses):
Gross realized gains	$	3	$	242
Gross realized losses	—		(96		)
Net realized gains	$	3	$	146
Proceeds from sales of securities	$	892	$	15,424

Available-for-sale Securities

Schedule of Investments [Line Items]

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

The amortized cost, gross unrealized gains and losses, and estimated fair values of securities available for sale as of June 30, 2017 and December 31, 2016 are summarized as follows (dollars in thousands):

	Amortized		Gross Unrealized					Estimated
	Cost		Gains		(Losses)			Fair Value
June 30, 2017
Obligations of states and political subdivisions	$	270,206	$	9,087	$	(753	)	$	278,540
Corporate bonds	116,318		1,009		(909		)	116,418
Mortgage-backed securities	548,229		5,417		(1,895		)	551,751
Other securities	13,886		—		(58		)	13,828
Total available for sale securities	$	948,639	$	15,513	$	(3,615	)	$	960,537
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 June 30, 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
June 30, 2017
Obligations of states and political subdivisions	$	27,804	$	(717	)	$	624	$	(36	)	$	28,428	$	(753	)
Mortgage-backed securities	197,560		(1,436		)	41,582		(459		)	239,142		(1,895		)
Corporate bonds and other securities	20,230		(367		)	38,872		(600		)	59,102		(967		)
Total available for sale securities	$	245,594	$	(2,520	)	$	81,078	$	(1,095	)	$	326,672	$	(3,615	)
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 June 30, 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.

	June 30, 2017				December 31, 2016
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due in one year or less	$	23,527	$	23,610	$	21,403	$	21,517
Due after one year through five years	120,077		122,479		108,198		109,778
Due after five years through ten years	276,269		281,588		300,552		301,888
Due after ten years	528,766		532,860		517,444		513,581
Total securities available for sale	$	948,639	$	960,537	$	947,597	$	946,764

Held-to-maturity Securities

Schedule of Investments [Line Items]

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 June 30, 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.

	June 30, 2017				December 31, 2016
	Carrying Value (1)		Estimated Fair Value		Carrying Value (1)		Estimated Fair Value
Due in one year or less	$	4,797	$	4,826	$	4,403	$	4,440
Due after one year through five years	34,383		35,020		28,383		28,763
Due after five years through ten years	63,538		65,281		51,730		51,522
Due after ten years	102,912		106,319		117,010		117,590
Total securities held to maturity	$	205,630	$	211,446	$	201,526	$	202,315

(1)The carrying value includes $4.4 million as of June 30, 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 June 30, 2017 and December 31, 2016 are summarized as follows (dollars in thousands):

	Carrying		Gross Unrealized					Estimated
	Value (1)		Gains		(Losses)			Fair Value
June 30, 2017
Obligations of states and political subdivisions	$	205,630	$	5,909	$	(93	)	$	211,446
December 31, 2016
Obligations of states and political subdivisions	$	201,526	$	1,617	$	(828	)	$	202,315

(1) The carrying value includes $4.4 million as of June 30, 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 (dollars 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 June 30, 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
June 30, 2017
Obligations of states and political subdivisions	$	3,088	$	(67	)	$	644	$	(26	)	$	3,732	$	(93	)
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)

6 Months Ended

Jun. 30, 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 June 30, 2017 and December 31, 2016 (dollars in thousands):

	June 30, 2017		December 31, 2016
Construction and Land Development	$	799,938	$	751,131
Commercial Real Estate - Owner Occupied	888,285		857,805
Commercial Real Estate - Non-Owner Occupied	1,698,329		1,564,295
Multifamily Real Estate	367,257		334,276
Commercial & Industrial	568,602		551,526
Residential 1-4 Family	1,066,519		1,029,547
Auto	274,162		262,071
HELOC	535,088		526,884
Consumer and all other	573,310		429,525
Total loans held for investment, net (1)	$	6,771,490	$	6,307,060

(1)Loans, as presented, are net of deferred fees and costs totaling $898,000 and $1.8 million as of June 30, 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 June 30, 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	$	602	$	26	$	83	$	2,694	$	5,659	$	790,874	$	799,938
Commercial Real Estate - Owner Occupied	3,148		194		56		17,906		1,279		865,702		888,285
Commercial Real Estate - Non-Owner Occupied	1,530		571		298		16,308		4,765		1,674,857		1,698,329
Multifamily Real Estate	500		—		—		2,047		—		364,710		367,257
Commercial & Industrial	1,652		113		55		751		4,281		561,750		568,602
Residential 1-4 Family	2,477		5,663		2,369		15,087		6,128		1,034,795		1,066,519
Auto	1,562		240		35		—		270		272,055		274,162
HELOC	1,405		964		544		1,156		2,059		528,960		535,088
Consumer and all other	1,891		1,242		185		218		133		569,641		573,310
Total loans held for investment	$	14,767	$	9,013	$	3,625	$	56,167	$	24,574	$	6,663,344	$	6,771,490

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, by segment at June 30, 2017 and December 31, 2016 (dollars in thousands):

	June 30, 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	$	10,097	$	10,109	$	—	$	13,877	$	14,353	$	—
Commercial Real Estate - Owner Occupied	5,810		5,981		—		5,886		6,042		—
Commercial Real Estate - Non-Owner Occupied	1,671		1,671		—		1,399		1,399		—
Commercial & Industrial	1,040		1,285		—		648		890		—
Residential 1-4 Family	9,144		10,208		—		8,496		9,518		—
HELOC	1,174		1,351		—		1,017		1,094		—
Consumer and all other	605		716		—		230		427		—
Total impaired loans without a specific allowance	$	29,541	$	31,321	$	—	$	31,553	$	33,723	$	—
Loans with a specific allowance
Construction and Land Development	$	5,136	$	5,331	$	720	$	1,395	$	1,404	$	107
Commercial Real Estate - Owner Occupied	631		631		3		646		646		4
Commercial Real Estate - Non-Owner Occupied	7,991		8,040		640		2,809		2,809		474
Commercial & Industrial	5,836		5,945		1,034		857		880		14
Residential 1-4 Family	3,834		4,071		424		3,335		3,535		200
Auto	270		393		1		169		235		1
HELOC	937		962		70		323		433		15
Consumer and all other	24		88		1		62		298		1
Total impaired loans with a specific allowance	$	24,659	$	25,461	$	2,893	$	9,596	$	10,240	$	816
Total impaired loans	$	54,200	$	56,782	$	2,893	$	41,149	$	43,963	$	816

The following tables show the average recorded investment and interest income recognized for the Company’s impaired loans, excluding PCI loans, by segment for the three and six months ended June 30, 2017 and 2016 (dollars in thousands):

	Three Months Ended June 30, 2017				Six Months Ended June 30, 2017
	Average Investment		Interest Income Recognized		Average Investment		Interest Income Recognized
Construction and Land Development	$	15,111	$	119	$	14,939	$	235
Commercial Real Estate - Owner Occupied	6,471		61		6,507		122
Commercial Real Estate - Non-Owner Occupied	9,675		48		9,698		139
Commercial & Industrial	6,942		41		7,212		72
Residential 1-4 Family	13,311		43		13,372		108
Auto	347		2		368		2
HELOC	2,265		1		2,273		5
Consumer and all other	564		8		405		7
Total impaired loans	$	54,686	$	323	$	54,774	$	690

	Three Months Ended June 30, 2016				Six Months Ended June 30, 2016
	Average Investment		Interest Income Recognized		Average Investment		Interest Income Recognized
Construction and Land Development	$	30,524	$	495	$	30,174	$	962
Commercial Real Estate - Owner Occupied	13,567		148		13,719		292
Commercial Real Estate - Non-Owner Occupied	4,215		43		4,216		79
Multifamily Real Estate	3,791		60		3,804		120
Commercial & Industrial	2,622		31		2,861		61
Residential 1-4 Family	14,189		90		14,365		183
Auto	162		—		183		—
HELOC	2,492		11		2,519		29
Consumer and all other	374		1		572		4
Total impaired loans	$	71,936	$	879	$	72,413	$	1,730

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 June 30, 2017 and December 31, 2016 (dollars in thousands):

	June 30, 2017					December 31, 2016
	No. of Loans	Recorded Investment		Outstanding Commitment		No. of Loans	Recorded Investment		Outstanding Commitment
Performing
Construction and Land Development	7	$	3,282	$	—	8	$	3,793	$	—
Commercial Real Estate - Owner Occupied	6	2,579		—		7	3,106		—
Commercial Real Estate - Non-Owner Occupied	2	1,631		—		2	2,390		—
Commercial & Industrial	13	2,194		—		3	533		—
Residential 1-4 Family	32	4,766		—		28	4,145		—
Consumer and all other	1	495		—		—	—		—
Total performing	61	$	14,947	$	—	48	$	13,967	$	—
Nonperforming
Construction and Land Development	5	$	502	$	—	2	$	215	$	—
Commercial Real Estate - Owner Occupied	3	616		—		2	156		—
Commercial Real Estate - Non-Owner Occupied	1	2,050		—		—	—		—
Commercial & Industrial	1	86		—		1	116		—
Residential 1-4 Family	10	1,200		—		8	948		—
Total nonperforming	20	$	4,454	$	—	13	$	1,435	$	—
Total performing and nonperforming	81	$	19,401	$	—	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 and six months ended June 30, 2017 (dollars in thousands):

	Three Months Ended June 30, 2017			Six Months Ended June 30, 2017
	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
Construction and Land Development	3	$	1,084	3	$	1,084
Commercial Real Estate - Non-Owner Occupied	—	—		2	1,631
Commercial & Industrial	2	157		4	973
Residential 1-4 Family	2	562		5	939
Consumer and all other	1	495		1	495
Total loan term extended at a market rate	8	$	2,298	15	$	5,122
Term modification, below market rate
Commercial Real Estate - Owner Occupied	1	$	844	1	$	844
Commercial & Industrial	1	85		3	195
Residential 1-4 Family	3	244		7	1,107
Total loan term extended at a below market rate	5	$	1,173	11	$	2,146
Total	13	$	3,471	31	$	7,929

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

	Three Months Ended June 30, 2016			Six Months Ended June 30, 2016
	No. of Loans	Recorded  Investment at Period End		No. of Loans	Recorded  Investment at Period End
Term modification, at a market rate
Construction and Land Development	1	$	1,193	1	$	1,193
Commercial Real Estate - Owner Occupied	1	38		2	743
Residential 1-4 Family	1	100		2	476
Total loan term extended at a market rate	3	$	1,331	5	$	2,412
Term modification, below market rate
Residential 1-4 Family	1	$	37	1	$	37
Total loan term extended at a below market rate	1	$	37	1	$	37
Interest rate modification, below market rate
Commercial & Industrial	1	$	135	1	$	135
Total interest only at below market rate of interest	1	$	135	1	$	135
Total	5	$	1,503	7	$	2,584

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 six months ended and as of June 30, 2017. The table below includes the provision for loan losses. 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	$	45	$	(253	)	$	(792	)	$	9,055
Commercial Real Estate - Owner Occupied	3,801		65		—			(514		)	3,352
Commercial Real Estate - Non-Owner Occupied	6,622		1		(677		)	1,390			7,336
Multifamily Real Estate	1,236		—		—			(117		)	1,119
Commercial & Industrial	4,627		262		(557		)	1,282			5,614
Residential 1-4 Family	6,399		266		(466		)	49			6,248
Auto	946		249		(586		)	311			920
HELOC	1,328		202		(573		)	383			1,340
Consumer and all other	2,178		582		(1,848		)	2,318			3,230
Total	$	37,192	$	1,672	$	(4,960	)	$	4,310		$	38,214

	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	$	15,233	$	720	$	782,011	$	8,335	$	2,694	$	—	$	799,938	$	9,055
Commercial Real Estate - Owner Occupied	6,441		3		863,938		3,349		17,906		—		888,285		3,352
Commercial Real Estate - Non-Owner Occupied	9,662		640		1,672,359		6,696		16,308		—		1,698,329		7,336
Multifamily Real Estate	—		—		365,210		1,119		2,047		—		367,257		1,119
Commercial & Industrial	6,876		1,034		560,975		4,580		751		—		568,602		5,614
Residential 1-4 Family	12,978		424		1,038,454		5,824		15,087		—		1,066,519		6,248
Auto	270		1		273,892		919		—		—		274,162		920
HELOC	2,111		70		531,821		1,270		1,156		—		535,088		1,340
Consumer and all other	629		1		572,463		3,229		218		—		573,310		3,230
Total loans held for investment, net	$	54,200	$	2,893	$	6,661,123	$	35,321	$	56,167	$	—	$	6,771,490	$	38,214

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 six months ended and as of June 30, 2016. In addition, a $100,000 provision was recognized during the six months ended June 30, 2016 for unfunded loan commitments for which the reserves are recorded as a component of “Other Liabilities” on the Company’s Consolidated Balance Sheets. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories (dollars in thousands):

	Allowance for loan losses
	Balance, beginning of the year		Recoveries credited to allowance		Loans charged off			Provision charged to operations			Balance, end of period
Construction and Land Development	$	6,040	$	97	$	(859	)	$	5,030		$	10,308
Commercial Real Estate - Owner Occupied	4,614		62		(772		)	129			4,033
Commercial Real Estate - Non-Owner Occupied	6,929		—		—			(1,536		)	5,393
Multifamily Real Estate	1,606		—		—			(697		)	909
Commercial & Industrial	3,163		355		(1,285		)	1,793			4,026
Residential 1-4 Family	5,414		381		(295		)	600			6,100
Auto	1,703		131		(525		)	(470		)	839
HELOC	2,934		132		(800		)	(948		)	1,318
Consumer and all other	1,644		330		(729		)	903			2,148
Total	$	34,047	$	1,488	$	(5,265	)	$	4,804		$	35,074

	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	$	31,710	$	64	$	729,274	$	10,244	$	5,013	$	—	$	765,997	$	10,308
Commercial Real Estate - Owner Occupied	13,492		49		797,696		3,984		20,692		—		831,880		4,033
Commercial Real Estate - Non-Owner Occupied	4,260		1		1,348,188		5,392		18,297		—		1,370,745		5,393
Multifamily Real Estate	3,777		—		331,854		909		2,092		—		337,723		909
Commercial & Industrial	2,488		47		465,212		3,979		1,354		—		469,054		4,026
Residential 1-4 Family	13,945		345		960,707		5,755		17,805		—		992,457		6,100
Auto	140		1		244,435		838		—		—		244,575		839
HELOC	2,337		81		515,342		1,237		1,517		—		519,196		1,318
Consumer and all other	326		1		408,745		2,147		400		—		409,471		2,148
Total loans held for investment, net	$	72,475	$	589	$	5,801,453	$	34,485	$	67,170	$	—	$	5,941,098	$	35,074

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 June 30, 2017 (dollars in thousands):

	Pass		Special Mention		Substandard		Doubtful		Total
Construction and Land Development	$	726,106	$	58,155	$	12,883	$	100	$	797,244
Commercial Real Estate - Owner Occupied	824,793		41,397		4,189		—		870,379
Commercial Real Estate - Non-Owner Occupied	1,648,876		23,666		9,479		—		1,682,021
Multifamily Real Estate	358,597		6,613		—		—		365,210
Commercial & Industrial	543,951		18,291		5,609		—		567,851
Residential 1-4 Family	1,021,053		22,903		4,995		2,481		1,051,432
Auto	271,701		2,254		77		130		274,162
HELOC	528,606		3,501		1,245		580		533,932
Consumer and all other	570,248		2,226		509		109		573,092
Total	$	6,493,931	$	179,006	$	38,986	$	3,400	$	6,715,323

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 Six Months Ended June 30,
	2017			2016
Balance at beginning of period	$	19,739		$	22,139
Accretion	(3,188		)	(2,792		)
Reclass of nonaccretable difference due to improvement in expected cash flows	2,072			3,450
Other, net (1)	(875		)	(2,139		)
Balance at end of period	$	17,748		$	20,658

(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 June 30, 2017 (dollars in thousands):

	30-89 Days Past Due		Greater than 90 Days		Current		Total
Construction and Land Development	$	67	$	—	$	2,627	$	2,694
Commercial Real Estate - Owner Occupied	339		650		16,917		17,906
Commercial Real Estate - Non-Owner Occupied	1,195		76		15,037		16,308
Multifamily Real Estate	—		—		2,047		2,047
Commercial & Industrial	109		—		642		751
Residential 1-4 Family	1,138		903		13,046		15,087
HELOC	221		127		808		1,156
Consumer and all other	35		—		183		218
Total	$	3,104	$	1,756	$	51,307	$	56,167

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 June 30, 2017 (dollars in thousands):

	Pass		Special Mention		Substandard		Doubtful		Total
Construction and Land Development	$	1,121	$	1,297	$	276	$	—	$	2,694
Commercial Real Estate - Owner Occupied	5,617		8,337		3,952		—		17,906
Commercial Real Estate - Non-Owner Occupied	12,807		2,230		1,271		—		16,308
Multifamily Real Estate	338		1,709		—		—		2,047
Commercial & Industrial	105		368		278		—		751
Residential 1-4 Family	7,735		4,624		1,850		878		15,087
HELOC	808		221		11		116		1,156
Consumer and all other	158		49		11		—		218
Total	$	28,689	$	18,835	$	7,649	$	994	$	56,167

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)

6 Months Ended

Jun. 30, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Estimated Remaining Amortization Expense of Core Deposit Intangibles

As of June 30, 2017, the estimated remaining amortization expense of intangibles is as follows (dollars in thousands):

For the remaining six months of 2017	$	2,890
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	$	17,422

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BORROWINGS (Tables)

6 Months Ended

Jun. 30, 2017

Debt Disclosure [Abstract]

Short-Term Borrowings

Total short-term borrowings consist of the following as of June 30, 2017 and December 31, 2016 (dollars in thousands):

	June 30, 2017			December 31, 2016
Securities sold under agreements to repurchase	$	34,543		$	59,281
Other short-term borrowings	602,000			517,500
Total short-term borrowings	$	636,543		$	576,781
Maximum month-end outstanding balance	$	696,529		$	678,262
Average outstanding balance during the period	586,476			590,074
Average interest rate (year-to-date)	0.81		%	0.49		%
Average interest rate at end of period	1.02		%	0.60		%
Other short-term borrowings:
FHLB	602,000			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	%	4.05	%	6/17/2034
Trust Preferred Capital Note - Statutory Trust II	36,000,000		1,114,000		1.40	%	2.70	%	6/15/2036
VFG Limited Liability Trust I Indenture	20,000,000		619,000		2.73	%	4.03	%	3/18/2034
FNB Statutory Trust II Indenture	12,000,000		372,000		3.10	%	4.40	%	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" on the Consolidated Balance Sheets.

Advances from the FHLB

As of June 30, 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	%	1.74	%	8/23/2022	$	55,000
Adjustable Rate Credit	0.45	%	1.75	%	11/23/2022	65,000
Adjustable Rate Credit	0.45	%	1.75	%	11/23/2022	10,000
Adjustable Rate Credit	0.45	%	1.75	%	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
Fixed Rate Hybrid	—		1.58	%	5/18/2020	20,000
						$	210,000
(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 June 30, 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 six months of 2017	$	—	$	—	$	10,000	$	(25	)	$	(974	)	$	9,001
2018	—		—		40,000		(343		)	(1,970		)	37,687
2019	—		—		—		(486		)	(2,018		)	(2,504		)
2020	—		—		20,000		(501		)	(2,074		)	17,425
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	$	210,000	$	(8,179	)	$	(10,862	)	$	434,260

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COMMITMENTS AND CONTINGENCIES (Tables)

6 Months Ended

Jun. 30, 2017

Commitments and Contingencies Disclosure [Abstract]

Balances of Commitments and Contingencies

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

	June 30, 2017		December 31, 2016
Commitments with off-balance sheet risk:
Commitments to extend credit (1)	$	2,001,802	$	1,924,885
Standby letters of credit	117,949		84,212
Total commitments with off-balance sheet risk	$	2,119,751	$	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 June 30, 2017 and December 31, 2016 (dollars in thousands):

	Pledged Assets as of June 30, 2017
	Cash		AFS Securities (1)		HTM Securities (1)		Loans (2)		Total
Public deposits	$	—	$	224,984	$	209,235	$	—	$	434,219
Repurchase agreements	—		92,678		—		—		92,678
FHLB advances	—		1,162		—		2,239,193		2,240,355
Derivatives	20,177		4,074		—		—		24,251
Other purposes	—		16,109		—		—		16,109
Total pledged assets	$	20,177	$	339,007	$	209,235	$	2,239,193	$	2,807,612

(1) Balance represents market value.

(2) Balance represents book value.

	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)

6 Months Ended

Jun. 30, 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 June 30, 2017 and December 31, 2016, segregated by derivatives that are considered accounting hedges and those that are not (dollars in thousands):

	June 30, 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	$	152,500		$	153	$	9,995	$	188,500		$	211	$	9,619
Fair value hedges	79,560			1,282		368		65,920			1,437		296
Derivatives not designated as accounting hedges:
Loan Swaps
Pay fixed - receive floating interest rate swaps	492,158			2,770		—		373,355			—		1,005
Pay floating - receive fixed interest rate swaps	492,158			—		2,770		373,355			1,005		—
Other contracts:
Interest rate lock commitments	55,062			724		—		48,743			610		—
Best efforts forward delivery commitments	94,853			235		—		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)

6 Months Ended

Jun. 30, 2017

Equity [Abstract]

Change in Accumulated Other Comprehensive Income

The change in accumulated other comprehensive income (loss) for the three and six months ended June 30, 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 - March 31, 2017	$	2,782		$	3,193		$	(5,030	)	$	(1,356	)	$	(411	)
Other comprehensive income (loss)	5,027			—			(775		)	—			4,252
Amounts reclassified from accumulated other comprehensive income	(76		)	(160		)	318			85			167
Net current period other comprehensive income (loss)	4,951			(160		)	(457		)	85			4,419
Balance - June 30, 2017	$	7,733		$	3,033		$	(5,487	)	$	(1,271	)	$	4,008

	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)	8,664			—			(807		)	—			7,857
Amounts reclassified from accumulated other comprehensive income	(389		)	(344		)	499			194			(40		)
Net current period other comprehensive income (loss)	8,275			(344		)	(308		)	194			7,817
Balance - June 30, 2017	$	7,733		$	3,033		$	(5,487	)	$	(1,271	)	$	4,008

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

	Unrealized Gains (Losses) on AFS Securities			Unrealized Gain for AFS Securities Transferred to HTM			Change in Fair Value of Cash Flow Hedge			Total
Balance - March 31, 2016	$	10,716		$	4,140		$	(8,497	)	$	6,359
Other comprehensive income (loss)	3,698			—			(1,007		)	2,691
Amounts reclassified from accumulated other comprehensive income	(2		)	(287		)	138			(151		)
Net current period other comprehensive income (loss)	$	3,696		$	(287	)	$	(869	)	$	2,540
Balance - June 30, 2016	$	14,412		$	3,853		$	(9,366	)	$	8,899

	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)	6,730			—			(3,688		)	3,042
Amounts reclassified from accumulated other comprehensive income	(95		)	(579		)	279			(395		)
Net current period other comprehensive income (loss)	6,635			(579		)	(3,409		)	2,647
Balance - June 30, 2016	$	14,412		$	3,853		$	(9,366	)	$	8,899

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FAIR VALUE MEASUREMENTS (Tables)

6 Months Ended

Jun. 30, 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 June 30, 2017 and December 31, 2016 (dollars in thousands): 

	Fair Value Measurements at June 30, 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	$	—	$	278,540	$	—	$	278,540
Corporate and other bonds	—		116,418		—		116,418
Mortgage-backed securities	—		551,751		—		551,751
Other securities	—		13,828		—		13,828
Loans held for sale	—		41,135		—		41,135
Derivatives:
Interest rate swap	—		2,770		—		2,770
Cash flow hedges	—		153		—		153
Fair value hedges	—		1,282		—		1,282
Interest rate lock commitments	—		—		724		724
Best efforts forward delivery commitments	—		—		235		235
LIABILITIES
Derivatives:
Interest rate swap	$	—	$	2,770	$	—	$	2,770
Cash flow hedges	—		9,995		—		9,995
Fair value hedges	—		368		—		368

	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 June 30, 2017 and December 31, 2016 (dollars in thousands):

	Fair Value Measurements at June 30, 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	$	—	$	—	$	18,320	$	18,320
Other real estate owned	—		—		9,482		9,482

	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 June 30, 2017 and December 31, 2016 are as follows (dollars in thousands):

			Fair Value Measurements at June 30, 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	$	181,910	$	181,910	$	—	$	—	$	181,910
Securities available for sale	960,537		—		960,537		—		960,537
Held to maturity securities	205,630		—		211,446		—		211,446
Restricted stock	69,631		—		69,631		—		69,631
Loans held for sale	41,135		—		41,135		—		41,135
Net loans	6,733,276		—		—		6,745,405		6,745,405
Derivatives:
Interest rate swap	2,770		—		2,770		—		2,770
Cash flow hedge	153		—		153		—		153
Fair value hedge	1,282		—		1,282		—		1,282
Interest rate lock commitments	724		—		—		724		724
Best efforts forward delivery commitments	235		—		—		235		235
Accrued interest receivable	23,801		—		23,801		—		23,801
Bank owned life insurance	180,110		—		180,110		—		180,110
LIABILITIES
Deposits	$	6,764,434	$	—	$	6,756,022	$	—	$	6,756,022
Borrowings	1,070,803		—		1,051,143		—		1,051,143
Accrued interest payable	2,196		—		2,196		—		2,196
Derivatives:
Interest rate swap	2,770		—		2,770		—		2,770
Cash flow hedges	9,995		—		9,995		—		9,995
Fair value hedges	368		—		368		—		368

			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)

6 Months Ended

Jun. 30, 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 and six months ended June 30, 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 June 30, 2017
Net income, basic	$	17,956	43,693	$	0.41
Add: potentially dilutive common shares - stock awards	—		91	—
Diluted	$	17,956	43,784	$	0.41
Three months ended June 30, 2016
Net income, basic	$	19,337	43,747	$	0.44
Add: potentially dilutive common shares - stock awards	—		77	—
Diluted	$	19,337	43,824	$	0.44
Six months ended June 30, 2017
Net income, basic	$	37,080	43,674	$	0.85
Add: potentially dilutive common shares - stock awards	—		81	—
Diluted	$	37,080	43,755	$	0.85
Six months ended June 30, 2016
Net income, basic	$	36,298	43,999	$	0.82
Add: potentially dilutive common shares - stock awards	—		77	—
Diluted	$	36,298	44,076	$	0.82

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SEGMENT REPORTING DISCLOSURES (Tables)

6 Months Ended

Jun. 30, 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 and six months ended June 30, 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 June 30, 2017
Net interest income	$	68,580	$	419		$	—		$	68,999
Provision for credit losses	2,184		(11		)	—			2,173
Net interest income after provision for credit losses	66,396		430			—			66,826
Noninterest income	15,203		2,993			(140		)	18,056
Noninterest expenses	57,496		2,574			(140		)	59,930
Income before income taxes	24,103		849			—			24,952
Income tax expense	6,698		298			—			6,996
Net income	$	17,405	$	551		$	—		$	17,956
Total assets	$	8,904,819	$	105,429		$	(95,061	)	$	8,915,187
Three Months Ended June 30, 2016
Net interest income	$	65,478	$	298		$	—		$	65,776
Provision for credit losses	2,260		40			—			2,300
Net interest income after provision for credit losses	63,218		258			—			63,476
Noninterest income	14,940		3,207			(154		)	17,993
Noninterest expenses	52,766		2,639			(154		)	55,251
Income before income taxes	25,392		826			—			26,218
Income tax expense	6,594		287			—			6,881
Net income	$	18,798	$	539		$	—		$	19,337
Total assets	$	8,094,176	$	75,802		$	(69,417	)	$	8,100,561
Six Months Ended June 30, 2017
Net interest income	$	134,816	$	751		$	—		$	135,567
Provision for credit losses	4,288		7			—			4,295
Net interest income after provision for credit losses	130,528		744			—			131,272
Noninterest income	31,959		5,216			(281		)	36,894
Noninterest expenses	112,510		5,096			(281		)	117,325
Income before income taxes	49,977		864			—			50,841
Income tax expense	13,452		309			—			13,761
Net income	$	36,525	$	555		$	—		$	37,080
Total assets	$	8,904,819	$	105,429		$	(95,061	)	$	8,915,187
Six Months Ended June 30, 2016
Net interest income	$	128,903	$	604		$	—		$	129,507
Provision for credit losses	4,760		144			—			4,904
Net interest income after provision for credit losses	124,143		460			—			124,603
Noninterest income	28,548		5,684			(325		)	33,907
Noninterest expenses	104,610		5,238			(325		)	109,523
Income before income taxes	48,081		906			—			48,987
Income tax expense	12,376		313			—			12,689
Net income	$	35,705	$	593		$	—		$	36,298
Total assets	$	8,094,176	$	75,802		$	(69,417	)	$	8,100,561

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ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Affordable Housing Projects [Abstract]
Affordable housing projects, recognized amortization	$ 190	$ 130	$ 414	$ 260
Affordable housing projects, tax credits	174	$ 210	484	$ 420
Affordable housing projects, investment amount	9,400		9,400		$ 9,900
Affordable housing projects, liability	$ 4,600		$ 4,600		$ 7,100

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SECURITIES (Amortized Cost, Gross Unrealized Gains and Losses, and Estimated Fair Values of Investment Securities) (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	$ 948,639	$ 947,597
Gross Unrealized Gains	15,513	10,480
Gross Unrealized (Losses)	(3,615)	(11,313)
Estimated Fair Value	960,537	946,764
Obligations of States and Political Subdivisions
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	270,206	274,007
Gross Unrealized Gains	9,087	4,962
Gross Unrealized (Losses)	(753)	(3,079)
Estimated Fair Value	278,540	275,890
Corporate and Other Bonds
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	116,318	123,674
Gross Unrealized Gains	1,009	892
Gross Unrealized (Losses)	(909)	(2,786)
Estimated Fair Value	116,418	121,780
Mortgage-Backed Securities
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	548,229	536,031
Gross Unrealized Gains	5,417	4,626
Gross Unrealized (Losses)	(1,895)	(5,371)
Estimated Fair Value	551,751	535,286
Other Securities
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	13,886	13,885
Gross Unrealized Gains	0	0
Gross Unrealized (Losses)	(58)	(77)
Estimated Fair Value	$ 13,828	$ 13,808

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SECURITIES (Schedule of Gross Unrealized Losses and Fair Value of Investments) (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Schedule of Trading Securities and Other Trading Assets [Line Items]
Less than 12 months, Fair Value	$ 245,594	$ 472,297
Less than 12 months, Unrealized Losses	(2,520)	(9,523)
More than 12 Months, Fair Value	81,078	83,152
More than 12 months, Unrealized Losses	(1,095)	(1,790)
Total, Fair Value	326,672	555,449
Total, Unrealized Losses	(3,615)	(11,313)
Obligations of States and Political Subdivisions
Schedule of Trading Securities and Other Trading Assets [Line Items]
Less than 12 months, Fair Value	27,804	108,440
Less than 12 months, Unrealized Losses	(717)	(3,007)
More than 12 Months, Fair Value	624	588
More than 12 months, Unrealized Losses	(36)	(72)
Total, Fair Value	28,428	109,028
Total, Unrealized Losses	(753)	(3,079)
Mortgage-Backed Securities
Schedule of Trading Securities and Other Trading Assets [Line Items]
Less than 12 months, Fair Value	197,560	316,469
Less than 12 months, Unrealized Losses	(1,436)	(4,979)
More than 12 Months, Fair Value	41,582	42,096
More than 12 months, Unrealized Losses	(459)	(392)
Total, Fair Value	239,142	358,565
Total, Unrealized Losses	(1,895)	(5,371)
Corporate Bonds and Other Securities
Schedule of Trading Securities and Other Trading Assets [Line Items]
Less than 12 months, Fair Value	20,230	47,388
Less than 12 months, Unrealized Losses	(367)	(1,537)
More than 12 Months, Fair Value	38,872	40,468
More than 12 months, Unrealized Losses	(600)	(1,326)
Total, Fair Value	59,102	87,856
Total, Unrealized Losses	$ (967)	$ (2,863)

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SECURITIES (Narrative) (Details)	3 Months Ended		6 Months Ended	12 Months Ended
	Jun. 30, 2017 USD ($) security	Jun. 30, 2015 USD ($)	Jun. 30, 2017 USD ($) security	Dec. 31, 2016 USD ($) 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	$ 81,078,000		$ 81,078,000	$ 83,152,000
Securities that had been in a continuous loss position for more than 12 months, unrealized loss	1,095,000		1,095,000	1,790,000
Held to maturity securities unrealized gains before tax		$ 8,100,000	4,400,000	5,200,000
Held-to-maturity securities in continuous loss position for more than 12 months	$ 644,000		$ 644,000	$ 648,000
Number of held-to-maturity securities in unrealized loss positions | security	1		1	1
Held-to-maturity securities, continuous unrealized loss position, more than 12 months	$ 26,000		$ 26,000	$ 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		$ 27,600,000	$ 23,800,000
Federal Home Loan Bank stock	42,100,000		42,100,000	$ 37,000,000
Credit-related OTTI	$ 0		$ 0		$ 300,000
Available-for-sale Securities
Schedule of Investments [Line Items]
Individual securities that had been in a continuous loss position | security	30		30	30

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SECURITIES (Schedule of Amortized Cost and Estimated Fair Value of Securities) (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Amortized Cost
Due in one year or less	$ 23,527	$ 21,403
Due after one year through five years	120,077	108,198
Due after five years through ten years	276,269	300,552
Due after ten years	528,766	517,444
Total securities available for sale	948,639	947,597
Estimated Fair Value
Due in one year or less	23,610	21,517
Due after one year through five years	122,479	109,778
Due after five years through ten years	281,588	301,888
Due after ten years	532,860	513,581
Total securities available for sale	960,537	946,764
Carrying Value
Due in one year or less	4,797	4,403
Due after one year through five years	34,383	28,383
Due after five years through ten years	63,538	51,730
Due after ten years	102,912	117,010
Total securities held to maturity	205,630	201,526
Estimated Fair Value
Due in one year or less	4,826	4,440
Due after one year through five years	35,020	28,763
Due after five years through ten years	65,281	51,522
Due after ten years	106,319	117,590
Total securities held to maturity	$ 211,446	$ 202,315

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SECURITIES (Schedule of Carrying Value, Gross Unrealized Gains and Losses and Estimated Fair Value of Securities) (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended	12 Months Ended
	Jun. 30, 2015	Jun. 30, 2017	Dec. 31, 2016
Schedule of Held-to-maturity Securities [Line Items]
Total securities held to maturity		$ 205,630	$ 201,526
Estimated Fair Value		211,446	202,315
Held to maturity securities unrealized gains before tax	$ 8,100	4,400	5,200
Obligations of States and Political Subdivisions
Schedule of Held-to-maturity Securities [Line Items]
Total securities held to maturity		205,630	201,526
Gross Unrealized Gains		5,909	1,617
Gross Unrealized (Losses)		(93)	(828)
Estimated Fair Value		$ 211,446	$ 202,315

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SECURITIES (Gross Unrealized Losses and Fair Value of Securities) (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Schedule of Held-to-maturity Securities [Line Items]
More than 12 months, Fair Value	$ 644	$ 648
More than 12 months, Unrealized Losses	(26)	(81)
Obligations of States and Political Subdivisions
Schedule of Held-to-maturity Securities [Line Items]
Less than 12 months, Fair Value	3,088	92,841
Less than 12 months, Unrealized Losses	(67)	(747)
More than 12 months, Fair Value	644	648
More than 12 months, Unrealized Losses	(26)	(81)
Total, Fair Value	3,732	93,489
Total, Unrealized Losses	$ (93)	$ (828)

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SECURITIES (Gross Realized Gains and Losses on the Sale of Securities) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Realized gains (losses):
Gross realized gains	$ 180	$ 3	$ 661	$ 242
Gross realized losses	(63)	0	(63)	(96)
Net realized gains	117	3	598	146
Proceeds from sales of securities	$ 31,320	$ 892	$ 52,626	$ 15,424

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LOANS AND ALLOWANCE FOR LOAN LOSSES (Loans Stated at Face Amount, Net of Deferred Fees and Costs) (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016	Jun. 30, 2016
Loans and Leases Receivable Disclosure [Line Items]
Total loans held for investment, net	$ 6,771,490	$ 6,307,060	$ 5,941,098
Loans receivable, deferred fees and costs	898	1,800
Construction and Land Development
Loans and Leases Receivable Disclosure [Line Items]
Total loans held for investment, net	799,938	751,131	765,997
Commercial Real Estate - Owner Occupied
Loans and Leases Receivable Disclosure [Line Items]
Total loans held for investment, net	888,285	857,805	831,880
Commercial Real Estate - Non-Owner Occupied
Loans and Leases Receivable Disclosure [Line Items]
Total loans held for investment, net	1,698,329	1,564,295	1,370,745
Multifamily Real Estate
Loans and Leases Receivable Disclosure [Line Items]
Total loans held for investment, net	367,257	334,276	337,723
Commercial & Industrial
Loans and Leases Receivable Disclosure [Line Items]
Total loans held for investment, net	568,602	551,526	469,054
Residential 1-4 Family
Loans and Leases Receivable Disclosure [Line Items]
Total loans held for investment, net	1,066,519	1,029,547	992,457
Auto
Loans and Leases Receivable Disclosure [Line Items]
Total loans held for investment, net	274,162	262,071	244,575
HELOC
Loans and Leases Receivable Disclosure [Line Items]
Total loans held for investment, net	535,088	526,884	519,196
Consumer and all other
Loans and Leases Receivable Disclosure [Line Items]
Total loans held for investment, net	$ 573,310	$ 429,525	$ 409,471

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LOANS AND ALLOWANCE FOR LOAN LOSSES (Summary of Aging of the Loan Portfolio by Segment) (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016	Jun. 30, 2016
Financing Receivable, Recorded Investment, Past Due [Line Items]
Greater than 90 Days and still Accruing	$ 3,625	$ 3,005
Total Loans	6,771,490	6,307,060	$ 5,941,098
Nonaccrual	24,574	9,973
Current	6,663,344	6,209,924
Purchased Impaired
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	56,167	59,292	67,170
Current	51,307	55,244
30 to 59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	14,767	20,245
60 to 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	9,013	4,621
Construction and Land Development
Financing Receivable, Recorded Investment, Past Due [Line Items]
Greater than 90 Days and still Accruing	83	76
Total Loans	799,938	751,131	765,997
Nonaccrual	5,659	2,037
Current	790,874	744,702
Construction and Land Development | Purchased Impaired
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	2,694	2,922	5,013
Current	2,627	2,838
Construction and Land Development | 30 to 59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	602	1,162
Construction and Land Development | 60 to 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	26	232
Commercial Real Estate - Owner Occupied
Financing Receivable, Recorded Investment, Past Due [Line Items]
Greater than 90 Days and still Accruing	56	35
Total Loans	888,285	857,805	831,880
Nonaccrual	1,279	794
Current	865,702	836,682
Commercial Real Estate - Owner Occupied | Purchased Impaired
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	17,906	18,343	20,692
Current	16,917	17,553
Commercial Real Estate - Owner Occupied | 30 to 59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	3,148	1,842
Commercial Real Estate - Owner Occupied | 60 to 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	194	109
Commercial Real Estate - Non-Owner Occupied
Financing Receivable, Recorded Investment, Past Due [Line Items]
Greater than 90 Days and still Accruing	298	0
Total Loans	1,698,329	1,564,295	1,370,745
Nonaccrual	4,765	0
Current	1,674,857	1,544,623
Commercial Real Estate - Non-Owner Occupied | Purchased Impaired
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	16,308	17,303	18,297
Current	15,037	16,768
Commercial Real Estate - Non-Owner Occupied | 30 to 59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	1,530	2,369
Commercial Real Estate - Non-Owner Occupied | 60 to 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	571	0
Multifamily Real Estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Greater than 90 Days and still Accruing	0	0
Total Loans	367,257	334,276	337,723
Nonaccrual	0	0
Current	364,710	332,063
Multifamily Real Estate | Purchased Impaired
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	2,047	2,066	2,092
Current	2,047	2,066
Multifamily Real Estate | 30 to 59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	500	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	55	9
Total Loans	568,602	551,526	469,054
Nonaccrual	4,281	124
Current	561,750	548,702
Commercial & Industrial | Purchased Impaired
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	751	1,074	1,354
Current	642	974
Commercial & Industrial | 30 to 59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	1,652	759
Commercial & Industrial | 60 to 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	113	858
Residential 1-4 Family
Financing Receivable, Recorded Investment, Past Due [Line Items]
Greater than 90 Days and still Accruing	2,369	2,048
Total Loans	1,066,519	1,029,547	992,457
Nonaccrual	6,128	5,279
Current	1,034,795	998,448
Residential 1-4 Family | Purchased Impaired
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	15,087	16,200	17,805
Current	13,046	13,957
Residential 1-4 Family | 30 to 59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	2,477	7,038
Residential 1-4 Family | 60 to 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	5,663	534
Auto
Financing Receivable, Recorded Investment, Past Due [Line Items]
Greater than 90 Days and still Accruing	35	111
Total Loans	274,162	262,071	244,575
Nonaccrual	270	169
Current	272,055	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	1,562	2,570
Auto | 60 to 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	240	317
HELOC
Financing Receivable, Recorded Investment, Past Due [Line Items]
Greater than 90 Days and still Accruing	544	635
Total Loans	535,088	526,884	519,196
Nonaccrual	2,059	1,279
Current	528,960	520,833
HELOC | Purchased Impaired
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	1,156	1,161	1,517
Current	808	865
HELOC | 30 to 59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	1,405	1,836
HELOC | 60 to 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	964	1,140
Consumer and all other
Financing Receivable, Recorded Investment, Past Due [Line Items]
Greater than 90 Days and still Accruing	185	91
Total Loans	573,310	429,525	409,471
Nonaccrual	133	291
Current	569,641	424,967
Consumer and all other | Purchased Impaired
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	218	223	$ 400
Current	183	223
Consumer and all other | 30 to 59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	1,891	2,522
Consumer and all other | 60 to 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	$ 1,242	$ 1,431

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LOANS AND ALLOWANCE FOR LOAN LOSSES (PCI Loan Portfolios by Segment and Delinquency Status) (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016	Jun. 30, 2016
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	$ 6,663,344	$ 6,209,924
Total Loans	6,771,490	6,307,060	$ 5,941,098
Construction and Land Development
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	790,874	744,702
Total Loans	799,938	751,131	765,997
Commercial Real Estate - Owner Occupied
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	865,702	836,682
Total Loans	888,285	857,805	831,880
Commercial Real Estate - Non-Owner Occupied
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	1,674,857	1,544,623
Total Loans	1,698,329	1,564,295	1,370,745
Multifamily Real Estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	364,710	332,063
Total Loans	367,257	334,276	337,723
Commercial & Industrial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	561,750	548,702
Total Loans	568,602	551,526	469,054
Residential 1-4 Family
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	1,034,795	998,448
Total Loans	1,066,519	1,029,547	992,457
HELOC
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	528,960	520,833
Total Loans	535,088	526,884	519,196
Consumer and all other
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	569,641	424,967
Total Loans	573,310	429,525	409,471
Purchased Impaired
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	51,307	55,244
Total Loans	56,167	59,292	67,170
Purchased Impaired | 30 To 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	3,104	2,197
Purchased Impaired | Greater than 90 Days
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	1,756	1,851
Purchased Impaired | Construction and Land Development
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	2,627	2,838
Total Loans	2,694	2,922	5,013
Purchased Impaired | Construction and Land Development | 30 To 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	67	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	16,917	17,553
Total Loans	17,906	18,343	20,692
Purchased Impaired | Commercial Real Estate - Owner Occupied | 30 To 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	339	271
Purchased Impaired | Commercial Real Estate - Owner Occupied | Greater than 90 Days
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	650	519
Purchased Impaired | Commercial Real Estate - Non-Owner Occupied
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	15,037	16,768
Total Loans	16,308	17,303	18,297
Purchased Impaired | Commercial Real Estate - Non-Owner Occupied | 30 To 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	1,195	409
Purchased Impaired | Commercial Real Estate - Non-Owner Occupied | Greater than 90 Days
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	76	126
Purchased Impaired | Multifamily Real Estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	2,047	2,066
Total Loans	2,047	2,066	2,092
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	642	974
Total Loans	751	1,074	1,354
Purchased Impaired | Commercial & Industrial | 30 To 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	109	44
Purchased Impaired | Commercial & Industrial | Greater than 90 Days
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	0	56
Purchased Impaired | Residential 1-4 Family
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	13,046	13,957
Total Loans	15,087	16,200	17,805
Purchased Impaired | Residential 1-4 Family | 30 To 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	1,138	1,298
Purchased Impaired | Residential 1-4 Family | Greater than 90 Days
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	903	945
Purchased Impaired | HELOC
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	808	865
Total Loans	1,156	1,161	1,517
Purchased Impaired | HELOC | 30 To 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	221	175
Purchased Impaired | HELOC | Greater than 90 Days
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	127	121
Purchased Impaired | Consumer and all other
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	183	223
Total Loans	218	223	$ 400
Purchased Impaired | Consumer and all other | 30 To 89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	35	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		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Recorded Investment
Loans without a specific allowance	$ 29,541		$ 29,541		$ 31,553
Loans with a specific allowance	24,659		24,659		9,596
Total impaired loans	54,200		54,200		41,149
Unpaid Principal Balance
Loans without a specific allowance	31,321		31,321		33,723
Loans with a specific allowance	25,461		25,461		10,240
Total impaired loans	56,782		56,782		43,963
Related Allowance	2,893		2,893		816
Average Investment	54,686	$ 71,936	54,774	$ 72,413
Interest Income Recognized	323	879	690	1,730
Construction and Land Development
Recorded Investment
Loans without a specific allowance	10,097		10,097		13,877
Loans with a specific allowance	5,136		5,136		1,395
Unpaid Principal Balance
Loans without a specific allowance	10,109		10,109		14,353
Loans with a specific allowance	5,331		5,331		1,404
Related Allowance	720		720		107
Average Investment	15,111	30,524	14,939	30,174
Interest Income Recognized	119	495	235	962
Commercial Real Estate - Owner Occupied
Recorded Investment
Loans without a specific allowance	5,810		5,810		5,886
Loans with a specific allowance	631		631		646
Unpaid Principal Balance
Loans without a specific allowance	5,981		5,981		6,042
Loans with a specific allowance	631		631		646
Related Allowance	3		3		4
Average Investment	6,471	13,567	6,507	13,719
Interest Income Recognized	61	148	122	292
Commercial Real Estate - Non-Owner Occupied
Recorded Investment
Loans without a specific allowance	1,671		1,671		1,399
Loans with a specific allowance	7,991		7,991		2,809
Unpaid Principal Balance
Loans without a specific allowance	1,671		1,671		1,399
Loans with a specific allowance	8,040		8,040		2,809
Related Allowance	640		640		474
Average Investment	9,675	4,215	9,698	4,216
Interest Income Recognized	48	43	139	79
Multifamily Real Estate
Unpaid Principal Balance
Average Investment		3,791		3,804
Interest Income Recognized		60		120
Commercial & Industrial
Recorded Investment
Loans without a specific allowance	1,040		1,040		648
Loans with a specific allowance	5,836		5,836		857
Unpaid Principal Balance
Loans without a specific allowance	1,285		1,285		890
Loans with a specific allowance	5,945		5,945		880
Related Allowance	1,034		1,034		14
Average Investment	6,942	2,622	7,212	2,861
Interest Income Recognized	41	31	72	61
Residential 1-4 Family
Recorded Investment
Loans without a specific allowance	9,144		9,144		8,496
Loans with a specific allowance	3,834		3,834		3,335
Unpaid Principal Balance
Loans without a specific allowance	10,208		10,208		9,518
Loans with a specific allowance	4,071		4,071		3,535
Related Allowance	424		424		200
Average Investment	13,311	14,189	13,372	14,365
Interest Income Recognized	43	90	108	183
Auto
Recorded Investment
Loans with a specific allowance	270		270		169
Unpaid Principal Balance
Loans with a specific allowance	393		393		235
Related Allowance	1		1		1
Average Investment	347	162	368	183
Interest Income Recognized	2	0	2	0
HELOC
Recorded Investment
Loans without a specific allowance	1,174		1,174		1,017
Loans with a specific allowance	937		937		323
Unpaid Principal Balance
Loans without a specific allowance	1,351		1,351		1,094
Loans with a specific allowance	962		962		433
Related Allowance	70		70		15
Average Investment	2,265	2,492	2,273	2,519
Interest Income Recognized	1	11	5	29
Consumer and all other
Recorded Investment
Loans without a specific allowance	605		605		230
Loans with a specific allowance	24		24		62
Unpaid Principal Balance
Loans without a specific allowance	716		716		427
Loans with a specific allowance	88		88		298
Related Allowance	1		1		$ 1
Average Investment	564	374	405	572
Interest Income Recognized	$ 8	$ 1	$ 7	$ 4

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	Jun. 30, 2017 USD ($) loan	Dec. 31, 2016 USD ($) loan
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	81	61
Recorded Investment	$ 19,401	$ 15,402
Outstanding Commitment	$ 0	$ 0
Performing
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	61	48
Recorded Investment	$ 14,947	$ 13,967
Outstanding Commitment	$ 0	$ 0
Performing | Construction and Land Development
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	7	8
Recorded Investment	$ 3,282	$ 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	$ 2,579	$ 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	$ 1,631	$ 2,390
Outstanding Commitment	$ 0	$ 0
Performing | Commercial & Industrial
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	13	3
Recorded Investment	$ 2,194	$ 533
Outstanding Commitment	$ 0	$ 0
Performing | Residential 1-4 Family
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	32	28
Recorded Investment	$ 4,766	$ 4,145
Outstanding Commitment	$ 0	$ 0
Performing | Consumer and all other
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	1	0
Recorded Investment	$ 495	$ 0
Outstanding Commitment	$ 0	$ 0
Nonperforming
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	20	13
Recorded Investment	$ 4,454	$ 1,435
Outstanding Commitment	$ 0	$ 0
Nonperforming | Construction and Land Development
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	5	2
Recorded Investment	$ 502	$ 215
Outstanding Commitment	$ 0	$ 0
Nonperforming | Commercial Real Estate - Owner Occupied
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	3	2
Recorded Investment	$ 616	$ 156
Outstanding Commitment	$ 0	$ 0
Nonperforming | Commercial Real Estate - Non-Owner Occupied
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	1	0
Recorded Investment	$ 2,050	$ 0
Outstanding Commitment	$ 0	$ 0
Nonperforming | Commercial & Industrial
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	1	1
Recorded Investment	$ 86	$ 116
Outstanding Commitment	$ 0	$ 0
Nonperforming | Residential 1-4 Family
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	10	8
Recorded Investment	$ 1,200	$ 948
Outstanding Commitment	$ 0	$ 0

XML

LOANS AND ALLOWANCE FOR LOAN LOSSES (Narrative) (Details) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2017 USD ($) loan	Jun. 30, 2017 USD ($) loan	Jun. 30, 2016 USD ($)	Dec. 31, 2016 USD ($)
Financing Receivable, Modifications [Line Items]
Period for restructured loan to be considered default		90 days
Number of restructured TDR loans | loan	5	5
Restructured TDR loans that defaulted, amount	$ 1,100	$ 1,100
Provision for unfunded commitments			$ 100
Total loans held for investment, net	6,771,490	6,771,490	5,941,098	$ 6,307,060
Acquired Performing Loan Portfolio
Financing Receivable, Modifications [Line Items]
Total loans held for investment, net	996,800	996,800		1,100,000
Remaining discount on acquired loans	15,400	15,400		16,900
Purchased Impaired
Financing Receivable, Modifications [Line Items]
Total loans held for investment, net	56,167	56,167	$ 67,170	59,292
Purchased impaired loans (gross)	$ 68,900	$ 68,900		$ 73,600

XML

LOANS AND ALLOWANCE FOR LOAN LOSSES (Schedule of TDR by Class and Modification Type) (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017 USD ($) loan	Jun. 30, 2016 USD ($) loan	Jun. 30, 2017 USD ($) loan	Jun. 30, 2016 USD ($) loan
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	13	5	31	7
Recorded Investment at Period End | $	$ 3,471	$ 1,503	$ 7,929	$ 2,584
Modified to interest only, at a market rate
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	0		5
Recorded Investment at Period End | $	$ 0		$ 661
Modified to interest only, at a market rate | Commercial & Industrial
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	0		5
Recorded Investment at Period End | $	$ 0		$ 661
Term modification, at a market rate
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	8	3	15	5
Recorded Investment at Period End | $	$ 2,298	$ 1,331	$ 5,122	$ 2,412
Term modification, at a market rate | Commercial & Industrial
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	2		4
Recorded Investment at Period End | $	$ 157		$ 973
Term modification, at a market rate | Construction and Land Development
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	3	1	3	1
Recorded Investment at Period End | $	$ 1,084	$ 1,193	$ 1,084	$ 1,193
Term modification, at a market rate | Commercial Real Estate - Owner Occupied
Financing Receivable, Modifications [Line Items]
No. of Loans | loan		1		2
Recorded Investment at Period End | $		$ 38		$ 743
Term modification, at a market rate | Commercial Real Estate - Non-Owner Occupied
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	0		2
Recorded Investment at Period End | $	$ 0		$ 1,631
Term modification, at a market rate | Residential 1-4 Family
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	2	1	5	2
Recorded Investment at Period End | $	$ 562	$ 100	$ 939	$ 476
Term modification, at a market rate | Consumer and all other
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	1		1
Recorded Investment at Period End | $	$ 495		$ 495
Term modification, below market rate
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	5	1	11	1
Recorded Investment at Period End | $	$ 1,173	$ 37	$ 2,146	$ 37
Term modification, below market rate | Commercial & Industrial
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	1		3
Recorded Investment at Period End | $	$ 85		$ 195
Term modification, below market rate | Commercial Real Estate - Owner Occupied
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	1		1
Recorded Investment at Period End | $	$ 844		$ 844
Term modification, below market rate | Residential 1-4 Family
Financing Receivable, Modifications [Line Items]
No. of Loans | loan	3	1	7	1
Recorded Investment at Period End | $	$ 244	$ 37	$ 1,107	$ 37
Interest rate modification, below market rate
Financing Receivable, Modifications [Line Items]
No. of Loans | loan		1		1
Recorded Investment at Period End | $		$ 135		$ 135
Interest rate modification, below market rate | Commercial & Industrial
Financing Receivable, Modifications [Line Items]
No. of Loans | loan		1		1
Recorded Investment at Period End | $		$ 135		$ 135

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	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Dec. 31, 2016	Jun. 30, 2016
Allowance for loan losses
Balance, beginning of the year	$ 37,192	$ 34,047
Recoveries credited to allowance	1,672	1,488
Loans charged off	(4,960)	(5,265)
Provision charged to operations	4,310	4,804
Balance, end of period	38,214	35,074
Total Loans
Loans individually evaluated for impairment			$ 54,200		$ 72,475
ALL individually evaluated for impairment			2,893		589
Loans collectively evaluated for impairment			6,661,123		5,801,453
ALL collectively evaluated for impairment			35,321		34,485
Total Loans			6,771,490	$ 6,307,060	5,941,098
Total ALL	37,192	34,047	38,214	37,192	35,074
Purchased Impaired
Allowance for loan losses
Balance, end of period	0	0
Total Loans
Total Loans			56,167	59,292	67,170
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	45	97
Loans charged off	(253)	(859)
Provision charged to operations	(792)	5,030
Balance, end of period	9,055	10,308
Total Loans
Loans individually evaluated for impairment			15,233		31,710
ALL individually evaluated for impairment			720		64
Loans collectively evaluated for impairment			782,011		729,274
ALL collectively evaluated for impairment			8,335		10,244
Total Loans			799,938	751,131	765,997
Total ALL	10,055	6,040	9,055	10,055	10,308
Construction and Land Development | Purchased Impaired
Allowance for loan losses
Balance, end of period	0	0
Total Loans
Total Loans			2,694	2,922	5,013
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	65	62
Loans charged off	0	(772)
Provision charged to operations	(514)	129
Balance, end of period	3,352	4,033
Total Loans
Loans individually evaluated for impairment			6,441		13,492
ALL individually evaluated for impairment			3		49
Loans collectively evaluated for impairment			863,938		797,696
ALL collectively evaluated for impairment			3,349		3,984
Total Loans			888,285	857,805	831,880
Total ALL	3,801	4,614	3,352	3,801	4,033
Commercial Real Estate - Owner Occupied | Purchased Impaired
Allowance for loan losses
Balance, end of period	0	0
Total Loans
Total Loans			17,906	18,343	20,692
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	1	0
Loans charged off	(677)	0
Provision charged to operations	1,390	(1,536)
Balance, end of period	7,336	5,393
Total Loans
Loans individually evaluated for impairment			9,662		4,260
ALL individually evaluated for impairment			640		1
Loans collectively evaluated for impairment			1,672,359		1,348,188
ALL collectively evaluated for impairment			6,696		5,392
Total Loans			1,698,329	1,564,295	1,370,745
Total ALL	6,622	6,929	7,336	6,622	5,393
Commercial Real Estate - Non-Owner Occupied | Purchased Impaired
Allowance for loan losses
Balance, end of period	0	0
Total Loans
Total Loans			16,308	17,303	18,297
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	(117)	(697)
Balance, end of period	1,119	909
Total Loans
Loans individually evaluated for impairment			0		3,777
ALL individually evaluated for impairment			0		0
Loans collectively evaluated for impairment			365,210		331,854
ALL collectively evaluated for impairment			1,119		909
Total Loans			367,257	334,276	337,723
Total ALL	1,236	1,606	1,119	1,236	909
Multifamily Real Estate | Purchased Impaired
Allowance for loan losses
Balance, end of period	0	0
Total Loans
Total Loans			2,047	2,066	2,092
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	262	355
Loans charged off	(557)	(1,285)
Provision charged to operations	1,282	1,793
Balance, end of period	5,614	4,026
Total Loans
Loans individually evaluated for impairment			6,876		2,488
ALL individually evaluated for impairment			1,034		47
Loans collectively evaluated for impairment			560,975		465,212
ALL collectively evaluated for impairment			4,580		3,979
Total Loans			568,602	551,526	469,054
Total ALL	4,627	3,163	5,614	4,627	4,026
Commercial & Industrial | Purchased Impaired
Allowance for loan losses
Balance, end of period	0	0
Total Loans
Total Loans			751	1,074	1,354
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	266	381
Loans charged off	(466)	(295)
Provision charged to operations	49	600
Balance, end of period	6,248	6,100
Total Loans
Loans individually evaluated for impairment			12,978		13,945
ALL individually evaluated for impairment			424		345
Loans collectively evaluated for impairment			1,038,454		960,707
ALL collectively evaluated for impairment			5,824		5,755
Total Loans			1,066,519	1,029,547	992,457
Total ALL	6,399	5,414	6,248	6,399	6,100
Residential 1-4 Family | Purchased Impaired
Allowance for loan losses
Balance, end of period	0	0
Total Loans
Total Loans			15,087	16,200	17,805
Total ALL	0	0	0		0
Auto
Allowance for loan losses
Balance, beginning of the year	946	1,703
Recoveries credited to allowance	249	131
Loans charged off	(586)	(525)
Provision charged to operations	311	(470)
Balance, end of period	920	839
Total Loans
Loans individually evaluated for impairment			270		140
ALL individually evaluated for impairment			1		1
Loans collectively evaluated for impairment			273,892		244,435
ALL collectively evaluated for impairment			919		838
Total Loans			274,162	262,071	244,575
Total ALL	946	1,703	920	946	839
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	202	132
Loans charged off	(573)	(800)
Provision charged to operations	383	(948)
Balance, end of period	1,340	1,318
Total Loans
Loans individually evaluated for impairment			2,111		2,337
ALL individually evaluated for impairment			70		81
Loans collectively evaluated for impairment			531,821		515,342
ALL collectively evaluated for impairment			1,270		1,237
Total Loans			535,088	526,884	519,196
Total ALL	1,328	2,934	1,340	1,328	1,318
HELOC | Purchased Impaired
Allowance for loan losses
Balance, end of period	0	0
Total Loans
Total Loans			1,156	1,161	1,517
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	582	330
Loans charged off	(1,848)	(729)
Provision charged to operations	2,318	903
Balance, end of period	3,230	2,148
Total Loans
Loans individually evaluated for impairment			629		326
ALL individually evaluated for impairment			1		1
Loans collectively evaluated for impairment			572,463		408,745
ALL collectively evaluated for impairment			3,229		2,147
Total Loans			573,310	429,525	409,471
Total ALL	2,178	1,644	3,230	2,178	2,148
Consumer and all other | Purchased Impaired
Allowance for loan losses
Balance, end of period	0	0
Total Loans
Total Loans			218	$ 223	400
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	Jun. 30, 2017	Dec. 31, 2016	Jun. 30, 2016
Financing Receivable, Recorded Investment [Line Items]
Total Loans	$ 6,771,490	$ 6,307,060	$ 5,941,098
Construction and Land Development
Financing Receivable, Recorded Investment [Line Items]
Total Loans	799,938	751,131	765,997
Commercial Real Estate - Owner Occupied
Financing Receivable, Recorded Investment [Line Items]
Total Loans	888,285	857,805	831,880
Commercial Real Estate - Non-Owner Occupied
Financing Receivable, Recorded Investment [Line Items]
Total Loans	1,698,329	1,564,295	1,370,745
Multifamily Real Estate
Financing Receivable, Recorded Investment [Line Items]
Total Loans	367,257	334,276	337,723
Commercial & Industrial
Financing Receivable, Recorded Investment [Line Items]
Total Loans	568,602	551,526	469,054
Residential 1-4 Family
Financing Receivable, Recorded Investment [Line Items]
Total Loans	1,066,519	1,029,547	992,457
Auto
Financing Receivable, Recorded Investment [Line Items]
Total Loans	274,162	262,071	244,575
HELOC
Financing Receivable, Recorded Investment [Line Items]
Total Loans	535,088	526,884	519,196
Consumer and all other
Financing Receivable, Recorded Investment [Line Items]
Total Loans	573,310	429,525	$ 409,471
Excluding Purchased Impaired
Financing Receivable, Recorded Investment [Line Items]
Total Loans	6,715,323	6,247,768
Excluding Purchased Impaired | Pass
Financing Receivable, Recorded Investment [Line Items]
Total Loans	6,493,931	6,017,055
Excluding Purchased Impaired | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total Loans	179,006	198,078
Excluding Purchased Impaired | Substandard
Financing Receivable, Recorded Investment [Line Items]
Total Loans	38,986	28,617
Excluding Purchased Impaired | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Total Loans	3,400	4,018
Excluding Purchased Impaired | Construction and Land Development
Financing Receivable, Recorded Investment [Line Items]
Total Loans	797,244	748,209
Excluding Purchased Impaired | Construction and Land Development | Pass
Financing Receivable, Recorded Investment [Line Items]
Total Loans	726,106	667,018
Excluding Purchased Impaired | Construction and Land Development | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total Loans	58,155	69,311
Excluding Purchased Impaired | Construction and Land Development | Substandard
Financing Receivable, Recorded Investment [Line Items]
Total Loans	12,883	11,857
Excluding Purchased Impaired | Construction and Land Development | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Total Loans	100	23
Excluding Purchased Impaired | Commercial Real Estate - Owner Occupied
Financing Receivable, Recorded Investment [Line Items]
Total Loans	870,379	839,462
Excluding Purchased Impaired | Commercial Real Estate - Owner Occupied | Pass
Financing Receivable, Recorded Investment [Line Items]
Total Loans	824,793	801,565
Excluding Purchased Impaired | Commercial Real Estate - Owner Occupied | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total Loans	41,397	32,364
Excluding Purchased Impaired | Commercial Real Estate - Owner Occupied | Substandard
Financing Receivable, Recorded Investment [Line Items]
Total Loans	4,189	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	1,682,021	1,546,992
Excluding Purchased Impaired | Commercial Real Estate - Non-Owner Occupied | Pass
Financing Receivable, Recorded Investment [Line Items]
Total Loans	1,648,876	1,505,153
Excluding Purchased Impaired | Commercial Real Estate - Non-Owner Occupied | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total Loans	23,666	37,631
Excluding Purchased Impaired | Commercial Real Estate - Non-Owner Occupied | Substandard
Financing Receivable, Recorded Investment [Line Items]
Total Loans	9,479	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	365,210	332,210
Excluding Purchased Impaired | Multifamily Real Estate | Pass
Financing Receivable, Recorded Investment [Line Items]
Total Loans	358,597	312,711
Excluding Purchased Impaired | Multifamily Real Estate | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total Loans	6,613	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	567,851	550,452
Excluding Purchased Impaired | Commercial & Industrial | Pass
Financing Receivable, Recorded Investment [Line Items]
Total Loans	543,951	539,999
Excluding Purchased Impaired | Commercial & Industrial | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total Loans	18,291	9,391
Excluding Purchased Impaired | Commercial & Industrial | Substandard
Financing Receivable, Recorded Investment [Line Items]
Total Loans	5,609	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	1,051,432	1,013,347
Excluding Purchased Impaired | Residential 1-4 Family | Pass
Financing Receivable, Recorded Investment [Line Items]
Total Loans	1,021,053	986,973
Excluding Purchased Impaired | Residential 1-4 Family | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total Loans	22,903	18,518
Excluding Purchased Impaired | Residential 1-4 Family | Substandard
Financing Receivable, Recorded Investment [Line Items]
Total Loans	4,995	4,813
Excluding Purchased Impaired | Residential 1-4 Family | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Total Loans	2,481	3,043
Excluding Purchased Impaired | Auto
Financing Receivable, Recorded Investment [Line Items]
Total Loans	274,162	262,071
Excluding Purchased Impaired | Auto | Pass
Financing Receivable, Recorded Investment [Line Items]
Total Loans	271,701	258,188
Excluding Purchased Impaired | Auto | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total Loans	2,254	3,648
Excluding Purchased Impaired | Auto | Substandard
Financing Receivable, Recorded Investment [Line Items]
Total Loans	77	135
Excluding Purchased Impaired | Auto | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Total Loans	130	100
Excluding Purchased Impaired | HELOC
Financing Receivable, Recorded Investment [Line Items]
Total Loans	533,932	525,723
Excluding Purchased Impaired | HELOC | Pass
Financing Receivable, Recorded Investment [Line Items]
Total Loans	528,606	519,928
Excluding Purchased Impaired | HELOC | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total Loans	3,501	4,225
Excluding Purchased Impaired | HELOC | Substandard
Financing Receivable, Recorded Investment [Line Items]
Total Loans	1,245	969
Excluding Purchased Impaired | HELOC | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Total Loans	580	601
Excluding Purchased Impaired | Consumer and all other
Financing Receivable, Recorded Investment [Line Items]
Total Loans	573,092	429,302
Excluding Purchased Impaired | Consumer and all other | Pass
Financing Receivable, Recorded Investment [Line Items]
Total Loans	570,248	425,520
Excluding Purchased Impaired | Consumer and all other | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total Loans	2,226	3,491
Excluding Purchased Impaired | Consumer and all other | Substandard
Financing Receivable, Recorded Investment [Line Items]
Total Loans	509	40
Excluding Purchased Impaired | Consumer and all other | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Total Loans	$ 109	$ 251

XML

LOANS AND ALLOWANCE FOR LOAN LOSSES (Loans Receivables Related Risk Rating Including Purchased Impaired Loans) (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016	Jun. 30, 2016
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	$ 6,771,490	$ 6,307,060	$ 5,941,098
Construction and Land Development
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	799,938	751,131	765,997
Commercial Real Estate - Owner Occupied
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	888,285	857,805	831,880
Commercial Real Estate - Non-Owner Occupied
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	1,698,329	1,564,295	1,370,745
Multifamily Real Estate
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	367,257	334,276	337,723
Commercial & Industrial
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	568,602	551,526	469,054
Residential 1-4 Family
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	1,066,519	1,029,547	992,457
HELOC
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	535,088	526,884	519,196
Consumer and all other
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	573,310	429,525	409,471
Purchased Impaired
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	56,167	59,292	67,170
Purchased Impaired | Pass
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	28,689	27,569
Purchased Impaired | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	18,835	21,837
Purchased Impaired | Substandard
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	7,649	9,256
Purchased Impaired | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	994	630
Purchased Impaired | Construction and Land Development
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	2,694	2,922	5,013
Purchased Impaired | Construction and Land Development | Pass
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	1,121	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	1,297	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	276	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	17,906	18,343	20,692
Purchased Impaired | Commercial Real Estate - Owner Occupied | Pass
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	5,617	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	8,337	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	3,952	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	16,308	17,303	18,297
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	12,807	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	2,230	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	1,271	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	2,047	2,066	2,092
Purchased Impaired | Multifamily Real Estate | Pass
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	338	343
Purchased Impaired | Multifamily Real Estate | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	1,709	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	751	1,074	1,354
Purchased Impaired | Commercial & Industrial | Pass
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	105	107
Purchased Impaired | Commercial & Industrial | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	368	480
Purchased Impaired | Commercial & Industrial | Substandard
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	278	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	15,087	16,200	17,805
Purchased Impaired | Residential 1-4 Family | Pass
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	7,735	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	4,624	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	1,850	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	878	516
Purchased Impaired | HELOC
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	1,156	1,161	1,517
Purchased Impaired | HELOC | Pass
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	808	857
Purchased Impaired | HELOC | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	221	183
Purchased Impaired | HELOC | Substandard
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	11	7
Purchased Impaired | HELOC | Doubtful
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	116	114
Purchased Impaired | Consumer and all other
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	218	223	$ 400
Purchased Impaired | Consumer and all other | Pass
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	158	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	49	37
Purchased Impaired | Consumer and all other | Substandard
Financing Receivable, Recorded Investment [Line Items]
Loans held for investment, net of deferred fees and costs	11	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

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LOANS AND ALLOWANCE FOR LOAN LOSSES (Schedule of Acquired Loan Portfolio and Accretable Yield) (Details) - Purchased Impaired - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Accretable Yield
Balance at beginning of period	$ 19,739	$ 22,139
Accretion	(3,188)	(2,792)
Reclass of nonaccretable difference due to improvement in expected cash flows	2,072	3,450
Other, net	(875)	(2,139)
Balance at end of period	$ 17,748	$ 20,658

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INTANGIBLE ASSETS (Narrative) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Finite-Lived Intangible Assets [Line Items]
Impairment charges	$ 0
Intangible assets, amortization expense	1,544,000	$ 1,745,000	$ 3,180,000	$ 3,625,000
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	1,400,000	1,700,000	$ 2,900,000	3,600,000
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	$ 240,000	$ 0

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INTANGIBLE ASSETS (Estimated Remaining Amortization Expense of Core Deposit Intangibles) (Details) $ in Thousands	Jun. 30, 2017 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
For the remaining six months of 2017	$ 2,890
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	$ 17,422

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BORROWINGS (Short-Term Borrowings) (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Debt Disclosure [Abstract]
Securities sold under agreements to repurchase	$ 34,543	$ 59,281
Other short-term borrowings	602,000	517,500
Total short-term borrowings	636,543	576,781
Maximum month-end outstanding balance	696,529	678,262
Average outstanding balance during the period	$ 586,476	$ 590,074
Average interest rate (year-to-date)	0.81%	0.49%
Average interest rate at end of period	1.02%	0.60%
Other short-term borrowings:
FHLB	$ 602,000	$ 517,500
Other lines of credit	$ 0	$ 0

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BORROWINGS (Narrative) (Details) $ in Thousands			3 Months Ended			6 Months Ended
	Jan. 01, 2014 USD ($)	Aug. 23, 2012 USD ($)	Jun. 30, 2017 USD ($)	Dec. 31, 2016 USD ($)	Jun. 30, 2016 USD ($)	Jun. 30, 2017 USD ($) acquisition	Jun. 30, 2016 USD ($)
Subordinated Borrowing [Line Items]
Remaining available balance for the federal funds lines			$ 185,000	$ 175,000		$ 185,000
Remaining available balance of alternate line of credit			25,000	25,000		25,000
Maximum collateral dependent line of credit with the FHLB			2,600,000	2,400,000		2,600,000
Subordinated debt			150,000	150,000		150,000
Prepayment penalty		$ 19,600
Prepayment penalty amortization expense			478		$ 466	947	$ 930
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			1,900	$ 1,900		$ 1,900
Spread on LIBOR				5.00%
Maturity Date						Dec. 15, 2026
Subordinated Debt | LIBOR
Subordinated Borrowing [Line Items]
Spread on LIBOR						3.175%
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			20,000
Remaining fair value premium on acquired FHLB advances			336			336
StellarOne | Trust Preferred Capital Notes
Subordinated Borrowing [Line Items]
Trust preferred capital notes principal balance	$ 32,000
Remaining fair value discount on acquired notes			$ 6,600			$ 6,600

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BORROWINGS (Trust Preferred Capital Notes Qualify for Tier 1 Capital) (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Debt Instrument [Line Items]
Investment	$ 96,021	$ 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	4.05%
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	2.70%
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	4.03%
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	4.40%
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	6 Months Ended	12 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Federal Home Loan Bank, Advances [Line Items]
Advance Amount	$ 210,000	$ 190,000
Adjustable Rate Credit One
Federal Home Loan Bank, Advances [Line Items]
Interest Rate	1.74%	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	1.75%	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	1.75%	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	1.75%	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
Fixed Rate Hybrid Two
Federal Home Loan Bank, Advances [Line Items]
Interest Rate	1.58%
Maturity Date	May 18, 2020
Advance Amount	$ 20,000

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BORROWINGS (Contractual Maturities of Long-Term Debt) (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Fair Value Premium (Discount)
For the remaining six months of 2017	$ (25)
2018	(343)
2019	(486)
2020	(501)
2021	(516)
Thereafter	(6,308)
Total Long-term borrowings	(8,179)
Prepayment Penalty
For the remaining six months of 2017	(974)
2018	(1,970)
2019	(2,018)
2020	(2,074)
2021	(2,119)
Thereafter	(1,707)
Total Long-term borrowings	(10,862)
Total Long-term Borrowings
For the remaining six months of 2017	9,001
2018	37,687
2019	(2,504)
2020	17,425
2021	(2,635)
Thereafter	375,286
Total Long-term borrowings	434,260	$ 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 six months of 2017	10,000
2018	40,000
2020	20,000
Thereafter	140,000
Total Long-term borrowings	$ 210,000

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COMMITMENTS AND CONTINGENCIES (Narrative) (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Other Commitments [Line Items]
Daily average required reserves	$ 71,600
Deposits with other financial institutions	42,400
Uninsured deposits with other financial institutions	20,900
Indemnification reserves	334	$ 379
Cash Flow Hedges
Other Commitments [Line Items]
Deposits with other financial institutions serves as collateral	20,200
Reserve for Off-balance Sheet Activities
Other Commitments [Line Items]
Off-balance sheet credit risks, amount, liability	$ 700	$ 725

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COMMITMENTS AND CONTINGENCIES (Balances of Commitments and Contingencies) (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Commitments with off-balance sheet risk:
Total commitments with off-balance sheet risk	$ 2,119,751	$ 2,009,097
Commitments to Extend Credit
Commitments with off-balance sheet risk:
Total commitments with off-balance sheet risk	2,001,802	1,924,885
Standby Letters of Credit
Commitments with off-balance sheet risk:
Total commitments with off-balance sheet risk	$ 117,949	$ 84,212

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COMMITMENTS AND CONTINGENCIES (Schedule of Securities Pledged as Collateral) (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Financial Instruments Owned and Pledged as Collateral [Line Items]
Cash	$ 20,177	$ 33,595
Loans	2,239,193	1,959,929
Total pledged assets	2,807,612	2,533,517
AFS Securities
Financial Instruments Owned and Pledged as Collateral [Line Items]
Securities pledged	339,007	342,104
HTM Securities
Financial Instruments Owned and Pledged as Collateral [Line Items]
Securities pledged	209,235	197,889
Public deposits
Financial Instruments Owned and Pledged as Collateral [Line Items]
Cash	0	0
Loans	0	0
Total pledged assets	434,219	408,435
Public deposits | AFS Securities
Financial Instruments Owned and Pledged as Collateral [Line Items]
Securities pledged	224,984	210,546
Public deposits | HTM Securities
Financial Instruments Owned and Pledged as Collateral [Line Items]
Securities pledged	209,235	197,889
Repurchase agreements
Financial Instruments Owned and Pledged as Collateral [Line Items]
Cash	0	0
Loans	0	0
Total pledged assets	92,678	108,208
Repurchase agreements | AFS Securities
Financial Instruments Owned and Pledged as Collateral [Line Items]
Securities pledged	92,678	108,208
Repurchase agreements | HTM Securities
Financial Instruments Owned and Pledged as Collateral [Line Items]
Securities pledged	0	0
FHLB advances
Financial Instruments Owned and Pledged as Collateral [Line Items]
Cash	0	0
Loans	2,239,193	1,959,929
Total pledged assets	2,240,355	1,961,404
FHLB advances | AFS Securities
Financial Instruments Owned and Pledged as Collateral [Line Items]
Securities pledged	1,162	1,475
FHLB advances | HTM Securities
Financial Instruments Owned and Pledged as Collateral [Line Items]
Securities pledged	0	0
Derivatives
Financial Instruments Owned and Pledged as Collateral [Line Items]
Cash	20,177	33,595
Loans	0	0
Total pledged assets	24,251	37,971
Derivatives | AFS Securities
Financial Instruments Owned and Pledged as Collateral [Line Items]
Securities pledged	4,074	4,376
Derivatives | HTM Securities
Financial Instruments Owned and Pledged as Collateral [Line Items]
Securities pledged	0	0
Other purposes
Financial Instruments Owned and Pledged as Collateral [Line Items]
Cash	0	0
Loans	0	0
Total pledged assets	16,109	17,499
Other purposes | AFS Securities
Financial Instruments Owned and Pledged as Collateral [Line Items]
Securities pledged	16,109	17,499
Other purposes | HTM Securities
Financial Instruments Owned and Pledged as Collateral [Line Items]
Securities pledged	$ 0	$ 0

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DERIVATIVES (Narrative) (Details) $ in Thousands		6 Months Ended	12 Months Ended
	Jun. 13, 2016 USD ($) derivative_instrument	Jun. 30, 2017 USD ($)	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		$ 391
Fair Value Hedges
Derivatives, Fair Value [Line Items]
Aggregate notional amount of the hedged items		79,600	$ 65,900
Fair value of aggregate notional amount of the hedged items, unrealized loss		$ (547)	$ (890)

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DERIVATIVES (Summary of the Derivatives) (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Interest Rate Lock Commitments
Summary of the derivative designated as a cash flow hedge
Derivative Assets	$ 724	$ 610
Designated as Accounting Hedges | Cash Flow Hedges
Summary of the derivative designated as a cash flow hedge
Notional or Contractual Amount	152,500	188,500
Derivative Assets	153	211
Derivative Liabilities	9,995	9,619
Designated as Accounting Hedges | Fair Value Hedges
Summary of the derivative designated as a cash flow hedge
Notional or Contractual Amount	79,560	65,920
Derivative Assets	1,282	1,437
Derivative Liabilities	368	296
Not Designated as Accounting Hedges | Interest Rate Lock Commitments
Summary of the derivative designated as a cash flow hedge
Notional or Contractual Amount	55,062	48,743
Derivative Assets	724	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	94,853	85,400
Derivative Assets	235	1,469
Derivative Liabilities	0	0
Not Designated as Accounting Hedges | Pay Fixed - Receive Floating Interest Rate Swaps
Summary of the derivative designated as a cash flow hedge
Notional or Contractual Amount	492,158	373,355
Derivative Assets	2,770	0
Derivative Liabilities	0	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	492,158	373,355
Derivative Assets	0	1,005
Derivative Liabilities	$ 2,770	$ 0

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Change in Accumulated Other Comprehensive Income) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
AOCI Attributable to Parent, Net of Tax
Beginning balance			$ 1,001,032,000	$ 995,367,000
Other comprehensive income (loss)	$ 4,252,000	$ 2,691,000	7,857,000	3,042,000
Amounts reclassified from accumulated other comprehensive income	167,000	(151,000)	(40,000)	(395,000)
Net current period other comprehensive income (loss)	4,419,000	2,540,000	7,817,000	2,647,000
Ending balance	1,030,869,000	989,201,000	1,030,869,000	989,201,000
Accumulated Other Comprehensive Income (Loss)
AOCI Attributable to Parent, Net of Tax
Beginning balance	(411,000)	6,359,000	(3,809,000)	6,252,000
Net current period other comprehensive income (loss)			7,817,000	2,647,000
Ending balance	4,008,000	8,899,000	4,008,000	8,899,000
Unrealized Gains (Losses) on AFS Securities
AOCI Attributable to Parent, Net of Tax
Beginning balance	2,782,000	10,716,000	(542,000)	7,777,000
Other comprehensive income (loss)	5,027,000	3,698,000	8,664,000	6,730,000
Amounts reclassified from accumulated other comprehensive income	(76,000)	(2,000)	(389,000)	(95,000)
Net current period other comprehensive income (loss)	4,951,000	3,696,000	8,275,000	6,635,000
Ending balance	7,733,000	14,412,000	7,733,000	14,412,000
Unrealized Gain for AFS Securities Transferred to HTM
AOCI Attributable to Parent, Net of Tax
Beginning balance	3,193,000	4,140,000	3,377,000	4,432,000
Other comprehensive income (loss)	0	0	0	0
Amounts reclassified from accumulated other comprehensive income	(160,000)	(287,000)	(344,000)	(579,000)
Net current period other comprehensive income (loss)	(160,000)	(287,000)	(344,000)	(579,000)
Ending balance	3,033,000	3,853,000	3,033,000	3,853,000
Change in Fair Value of Cash Flow Hedge
AOCI Attributable to Parent, Net of Tax
Beginning balance	(5,030,000)	(8,497,000)	(5,179,000)	(5,957,000)
Other comprehensive income (loss)	(775,000)	(1,007,000)	(807,000)	(3,688,000)
Amounts reclassified from accumulated other comprehensive income	318,000	138,000	499,000	279,000
Net current period other comprehensive income (loss)	(457,000)	(869,000)	(308,000)	(3,409,000)
Ending balance	(5,487,000)	(9,366,000)	(5,487,000)	(9,366,000)
Unrealized Gains (Losses) on BOLI
AOCI Attributable to Parent, Net of Tax
Beginning balance	(1,356,000)		(1,465,000)
Other comprehensive income (loss)	0		0
Amounts reclassified from accumulated other comprehensive income	85,000	$ 0	194,000	$ 0
Net current period other comprehensive income (loss)	85,000		194,000
Ending balance	$ (1,271,000)		$ (1,271,000)

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Narrative) (Details) - USD ($)	3 Months Ended			6 Months Ended		12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Accumulated Other Comprehensive Income (Loss) [Line Items]
Gains on securities transactions, net	$ 117,000	$ 3,000		$ 598,000	$ 146,000
Tax expense (benefit) related to (gains) losses on the sale of securities	41,000	1,000		209,000	51,000
Transfer from securities available for sale to securities held to maturity			$ 201,800,000
Held to maturity securities unrealized gains before tax			$ 8,100,000	4,400,000		$ 5,200,000
Accretion expense	246,000	442,000		529,000	891,000
Tax expense (benefit) related to (gains) losses for AFS securities transferred to HTM	86,000	155,000		185,000	312,000
Tax expense (benefit) related to (gains) losses on the cash flow hedges	(171,000)	(74,000)		(269,000)	(150,000)
Reclassification adjustment for gains (losses) included in net income	(167,000)	151,000		40,000	395,000
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	489,000	212,000		768,000	429,000
Unrealized Gains (Losses) on BOLI
Accumulated Other Comprehensive Income (Loss) [Line Items]
Reclassification adjustment for gains (losses) included in net income	$ (85,000)	$ 0		$ (194,000)	$ 0

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FAIR VALUE MEASUREMENTS (Narrative) (Details) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2017 USD ($)	Jun. 30, 2016 USD ($)	Jun. 30, 2017 USD ($) participant	Jun. 30, 2016 USD ($)	Dec. 31, 2016
Fair Value Disclosures [Abstract]
Weighted average pull through rate			80.00%		80.00%
Minimum number of market participants (more than) | participant			4,000
Level 3 Fair value measurements weighted average related to impaired loans			3.20%		1.50%
Level 3 fair value measurements weighted average related to other real estate owned			25.30%		25.10%
Total valuation expenses related to OREO properties | $	$ 19	$ 274	$ 257	$ 400

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FAIR VALUE MEASUREMENTS (Schedule of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis) (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
ASSETS
Securities available for sale	$ 960,537	$ 946,764
Loans held for sale	41,135	36,487
Cash flow hedges	153	211
Fair value hedges	1,282	1,437
Best efforts forward delivery commitments	235	1,469
LIABILITIES
Interest rate swap	2,770	1,005
Cash flow hedges	9,995	9,619
Fair value hedges	368	296
Interest Rate Lock Commitments
ASSETS
Interest rate lock commitments	724	610
Obligations of States and Political Subdivisions
ASSETS
Securities available for sale	278,540	275,890
Corporate and Other Bonds
ASSETS
Securities available for sale	116,418	121,780
Mortgage-Backed Securities
ASSETS
Securities available for sale	551,751	535,286
Other Securities
ASSETS
Securities available for sale	13,828	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	0
LIABILITIES
Interest rate swap	0	0
Cash flow hedges	0	0
Fair value hedges	0	0
Quoted Prices in Active Markets for Identical Assets Level 1 | Interest Rate Lock Commitments
ASSETS
Interest rate lock commitments	0	0
Significant Other Observable Inputs Level 2
ASSETS
Securities available for sale	960,537	946,764
Loans held for sale	41,135	36,487
Cash flow hedges	153	211
Fair value hedges	1,282	1,437
Best efforts forward delivery commitments	0	0
LIABILITIES
Interest rate swap	2,770	1,005
Cash flow hedges	9,995	9,619
Fair value hedges	368	296
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	235	1,469
LIABILITIES
Interest rate swap	0	0
Cash flow hedges	0	0
Fair value hedges	0	0
Significant Unobservable Inputs Level 3 | Interest Rate Lock Commitments
ASSETS
Interest rate lock commitments	724	610
Recurring
ASSETS
Loans held for sale	41,135	36,487
Interest rate swap	2,770	1,005
Cash flow hedges	153	211
Fair value hedges	1,282	1,437
Best efforts forward delivery commitments	235	1,469
LIABILITIES
Interest rate swap	2,770	1,005
Cash flow hedges	9,995	9,619
Fair value hedges	368	296
Recurring | Interest Rate Lock Commitments
ASSETS
Interest rate lock commitments	724	610
Recurring | Obligations of States and Political Subdivisions
ASSETS
Securities available for sale	278,540	275,890
Recurring | Corporate and Other Bonds
ASSETS
Securities available for sale	116,418	121,780
Recurring | Mortgage-Backed Securities
ASSETS
Securities available for sale	551,751	535,286
Recurring | Other Securities
ASSETS
Securities available for sale	13,828	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	0
LIABILITIES
Interest rate swap	0	0
Cash flow hedges	0	0
Fair value hedges	0	0
Recurring | Quoted Prices in Active Markets for Identical Assets Level 1 | Interest Rate Lock Commitments
ASSETS
Interest rate lock commitments	0	0
Recurring | Quoted Prices in Active Markets for Identical Assets Level 1 | Obligations of States and Political Subdivisions
ASSETS
Securities available for sale	0	0
Recurring | Quoted Prices in Active Markets for Identical Assets Level 1 | Corporate and Other Bonds
ASSETS
Securities available for sale	0	0
Recurring | Quoted Prices in Active Markets for Identical Assets Level 1 | Mortgage-Backed Securities
ASSETS
Securities available for sale	0	0
Recurring | Quoted Prices in Active Markets for Identical Assets Level 1 | Other Securities
ASSETS
Securities available for sale	0	0
Recurring | Significant Other Observable Inputs Level 2
ASSETS
Loans held for sale	41,135	36,487
Interest rate swap	2,770	1,005
Cash flow hedges	153	211
Fair value hedges	1,282	1,437
Best efforts forward delivery commitments	0	0
LIABILITIES
Interest rate swap	2,770	1,005
Cash flow hedges	9,995	9,619
Fair value hedges	368	296
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	278,540	275,890
Recurring | Significant Other Observable Inputs Level 2 | Corporate and Other Bonds
ASSETS
Securities available for sale	116,418	121,780
Recurring | Significant Other Observable Inputs Level 2 | Mortgage-Backed Securities
ASSETS
Securities available for sale	551,751	535,286
Recurring | Significant Other Observable Inputs Level 2 | Other Securities
ASSETS
Securities available for sale	13,828	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	235	1,469
LIABILITIES
Interest rate swap	0	0
Cash flow hedges	0	0
Fair value hedges	0	0
Recurring | Significant Unobservable Inputs Level 3 | Interest Rate Lock Commitments
ASSETS
Interest rate lock commitments	724	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

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FAIR VALUE MEASUREMENTS (Schedule of Financial Assets Measured at Fair Value on Nonrecurring Basis) (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
ASSETS
Other real estate owned	$ 9,482	$ 10,084
Nonrecurring
ASSETS
Impaired loans	18,320	4,344
Other real estate owned	9,482	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	18,320	4,344
Other real estate owned	$ 9,482	$ 10,084

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FAIR VALUE MEASUREMENTS (Carrying Values and Estimated Fair Values of the Company's Financial Instruments) (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
ASSETS
Cash and cash equivalents	$ 181,910	$ 179,237
Securities available for sale, at fair value	960,537	946,764
Held to maturity securities	211,446	202,315
Restricted stock	69,631	60,782
Loans held for sale	41,135	36,487
Net loans	6,745,405	6,265,443
Derivatives:
Cash flow hedges	153	211
Fair value hedges	1,282	1,437
Best efforts forward delivery commitments	235	1,469
Accrued interest receivable	23,801	23,448
Bank owned life insurance	180,110	179,318
LIABILITIES
Deposits	6,756,022	6,370,457
Borrowings	1,051,143	970,195
Accrued interest payable	2,196	2,230
Derivatives:
Interest rate swap	2,770	1,005
Cash flow hedges	9,995	9,619
Fair value hedges	368	296
Interest Rate Swap
Derivatives:
Interest rate swap	2,770	1,005
Interest Rate Lock Commitments
Derivatives:
Interest rate lock commitments	724	610
Carrying Value
ASSETS
Cash and cash equivalents	181,910	179,237
Securities available for sale, at fair value	960,537	946,764
Held to maturity securities	205,630	201,526
Restricted stock	69,631	60,782
Loans held for sale	41,135	36,487
Net loans	6,733,276	6,269,868
Derivatives:
Cash flow hedges	153	211
Fair value hedges	1,282	1,437
Best efforts forward delivery commitments	235	1,469
Accrued interest receivable	23,801	23,448
Bank owned life insurance	180,110	179,318
LIABILITIES
Deposits	6,764,434	6,379,489
Borrowings	1,070,803	990,089
Accrued interest payable	2,196	2,320
Derivatives:
Interest rate swap	2,770	1,005
Cash flow hedges	9,995	9,619
Fair value hedges	368	296
Carrying Value | Interest Rate Swap
Derivatives:
Interest rate swap	2,770	1,005
Carrying Value | Interest Rate Lock Commitments
Derivatives:
Interest rate lock commitments	724	610
Quoted Prices in Active Markets for Identical Assets Level 1
ASSETS
Cash and cash equivalents	181,910	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	0
Accrued interest receivable	0	0
Bank owned life insurance	0	0
LIABILITIES
Deposits	0	0
Borrowings	0	0
Accrued interest payable	0	0
Derivatives:
Interest rate swap	0	0
Cash flow hedges	0	0
Fair value hedges	0	0
Quoted Prices in Active Markets for Identical Assets Level 1 | Interest Rate 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	960,537	946,764
Held to maturity securities	211,446	202,315
Restricted stock	69,631	60,782
Loans held for sale	41,135	36,487
Net loans	0	0
Derivatives:
Cash flow hedges	153	211
Fair value hedges	1,282	1,437
Best efforts forward delivery commitments	0	0
Accrued interest receivable	23,801	23,448
Bank owned life insurance	180,110	179,318
LIABILITIES
Deposits	6,756,022	6,370,457
Borrowings	1,051,143	970,195
Accrued interest payable	2,196	2,230
Derivatives:
Interest rate swap	2,770	1,005
Cash flow hedges	9,995	9,619
Fair value hedges	368	296
Significant Other Observable Inputs Level 2 | Interest Rate Swap
Derivatives:
Interest rate swap	2,770	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	6,745,405	6,265,443
Derivatives:
Cash flow hedges	0	0
Fair value hedges	0	0
Best efforts forward delivery commitments	235	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
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	$ 724	$ 610

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EARNINGS PER SHARE (Narrative) (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Earnings Per Share [Abstract]
Anti-dilutive stock awards, shares	102,984	407	72,951	1,116

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EARNINGS PER SHARE (Reconciliation of the Denominators of the Basic and Diluted EPS Computations) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Earnings Per Share [Abstract]
Basic EPS, Net Income Available to Common Stockholders (Numerator)	$ 17,956	$ 19,337	$ 37,080	$ 36,298
Basic EPS, Weighted Average Shares (Denominator)	43,693,427	43,746,583	43,674,070	43,998,929
Basic EPS, Per Share Amount (in usd per share)	$ 0.41	$ 0.44	$ 0.85	$ 0.82
Effect of dilutive stock awards, Weighted Average Shares (Denominator)	91,000	77,000	81,000	77,000
Diluted EPS, Net Income Available to Common Stockholders (Numerator)	$ 17,956	$ 19,337	$ 37,080	$ 36,298
Diluted EPS, Weighted Average Common Shares	43,783,952	43,824,183	43,755,045	44,075,706
Diluted EPS, Per Share Amount (in usd per share)	$ 0.41	$ 0.44	$ 0.85	$ 0.82

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SEGMENT REPORTING DISCLOSURES (Narrative) (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2017 store	Jun. 30, 2016	Jun. 30, 2017 segment bank store	Jun. 30, 2016
Segment Reporting Information [Line Items]
Number of reportable segments | segment			2
Number of subsidiary bank | bank			1
Number of retail locations | store	112		112
Warehouse Line of Credit | LIBOR
Segment Reporting Information [Line Items]
Spread on LIBOR	0.15%	0.15%	0.15%	0.15%
Mortgage banking segment interest - floor	0.00%	0.00%	0.00%	0.00%

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SEGMENT REPORTING DISCLOSURES (Information About Reportable Segments and Reconciliation) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Segment Reporting Information [Line Items]
Net interest income	$ 68,999	$ 65,776	$ 135,567	$ 129,507
Provision for credit losses	2,173	2,300	4,295	4,904
Net interest income after provision for credit losses	66,826	63,476	131,272	124,603
Noninterest income	18,056	17,993	36,894	33,907
Noninterest expenses	59,930	55,251	117,325	109,523
Income before income taxes	24,952	26,218	50,841	48,987
Income tax expense	6,996	6,881	13,761	12,689
Net income	17,956	19,337	37,080	36,298
Total assets	8,915,187	8,100,561	8,915,187	8,100,561	$ 8,426,793
Operating Segments | Community Bank
Segment Reporting Information [Line Items]
Net interest income	68,580	65,478	134,816	128,903
Provision for credit losses	2,184	2,260	4,288	4,760
Net interest income after provision for credit losses	66,396	63,218	130,528	124,143
Noninterest income	15,203	14,940	31,959	28,548
Noninterest expenses	57,496	52,766	112,510	104,610
Income before income taxes	24,103	25,392	49,977	48,081
Income tax expense	6,698	6,594	13,452	12,376
Net income	17,405	18,798	36,525	35,705
Total assets	8,904,819	8,094,176	8,904,819	8,094,176
Operating Segments | Mortgage
Segment Reporting Information [Line Items]
Net interest income	419	298	751	604
Provision for credit losses	(11)	40	7	144
Net interest income after provision for credit losses	430	258	744	460
Noninterest income	2,993	3,207	5,216	5,684
Noninterest expenses	2,574	2,639	5,096	5,238
Income before income taxes	849	826	864	906
Income tax expense	298	287	309	313
Net income	551	539	555	593
Total assets	105,429	75,802	105,429	75,802
Eliminations
Segment Reporting Information [Line Items]
Net interest income	0	0	0	0
Provision for credit losses	0	0	0	0
Net interest income after provision for credit losses	0	0	0	0
Noninterest income	(140)	(154)	(281)	(325)
Noninterest expenses	(140)	(154)	(281)	(325)
Income before income taxes	0	0	0	0
Income tax expense	0	0	0	0
Net income	0	0	0	0
Total assets	$ (95,061)	$ (69,417)	$ (95,061)	$ (69,417)