Edgar Filing: FNB CORP/FL/

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Form 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

x	Quarterly Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

For the quarterly period ended June 30, 2015

¨	Transition Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

For the transition period from to

Commission file number 001-31940

F.N.B. CORPORATION

(Exact name of registrant as specified in its charter)

Florida

25-1255406

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)


One North Shore Center, 12 Federal Street, Pittsburgh, PA		15212
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: 800-555-5455

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

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

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

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

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

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


Class		Outstanding at July 31, 2015
Common Stock, $0.01 Par Value		175,288,069 Shares

F.N.B. CORPORATION

FORM 10-Q

June 30, 2015

INDEX


		PAGE
PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements

	Consolidated Balance Sheets		3

	Consolidated Statements of Comprehensive Income		4

	Consolidated Statements of Stockholders’ Equity		5

	Consolidated Statements of Cash Flows		6

	Notes to Consolidated Financial Statements		7

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		69

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings		70

Item 1A.	Risk Factors		70

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		70

Item 3.	Defaults Upon Senior Securities		70

Item 4.	Mine Safety Disclosures		70

Item 5.	Other Information		70

Item 6.	Exhibits		71

Signatures			72

PART I – FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

F.N.B. CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

Dollars in thousands, except par value


	June 30,			December 31,
	2015			2014
	(Unaudited)
Assets
Cash and due from banks	$	196,189		$	196,240
Interest bearing deposits with banks		41,290			91,153

Cash and Cash Equivalents		237,479			287,393
Securities available for sale		1,618,620			1,534,065
Securities held to maturity (fair value of $1,526,040 and $1,468,258)		1,518,060			1,453,355
Residential mortgage loans held for sale		6,711			6,180
Loans and leases, net of unearned income of $49,856 and $56,131		11,626,787			11,247,038
Allowance for credit losses		(131,141	)		(125,926	)

Net Loans and Leases		11,495,646			11,121,112
Premises and equipment, net		167,010			168,756
Goodwill		831,333			832,213
Core deposit and other intangible assets, net		45,057			47,504
Bank owned life insurance		304,318			301,771
Other assets		374,367			374,741

Total Assets	$	16,598,601		$	16,127,090

Liabilities
Deposits:
Non-interest bearing demand	$	2,813,488		$	2,647,623
Interest bearing demand		5,226,703			4,547,628
Savings		1,730,359			1,575,922
Certificates and other time deposits		2,587,577			2,611,035

Total Deposits		12,358,127			11,382,208
Short-term borrowings		1,507,582			2,041,658
Long-term borrowings		542,578			541,443
Other liabilities		124,543			140,325

Total Liabilities		14,532,830			14,105,634
Stockholders’ Equity
Preferred stock - $0.01 par value Authorized – 20,000,000 shares Issued – 110,877 shares		106,882			106,882
Common stock - $0.01 par value Authorized – 500,000,000 shares Issued – 176,434,735 and 175,450,303 shares		1,765			1,754
Additional paid-in capital		1,803,347			1,798,984
Retained earnings		210,422			176,120
Accumulated other comprehensive loss		(43,953	)		(46,003	)
Treasury stock – 1,147,755 and 1,458,045 shares at cost		(12,692	)		(16,281	)

Total Stockholders’ Equity		2,065,771			2,021,456

Total Liabilities and Stockholders’ Equity	$	16,598,601		$	16,127,090

See accompanying Notes to Consolidated Financial Statements

F.N.B. CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

In thousands, except per share data

Unaudited


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
Interest Income
Loans and leases, including fees	$	119,460	$	109,542	$	237,199	$	213,639
Securities:
Taxable		14,467		13,577		28,681		25,864
Nontaxable		1,484		1,287		2,857		2,578
Dividends		9		13		20		192
Other		28		21		60		47

Total Interest Income		135,448		124,440		268,817		242,320
Interest Expense
Deposits		7,636		7,461		15,085		14,610
Short-term borrowings		1,794		1,333		3,562		2,552
Long-term borrowings		2,251		1,454		4,482		3,141

Total Interest Expense		11,681		10,248		23,129		20,303

Net Interest Income		123,767		114,192		245,688		222,017
Provision for credit losses		8,864		10,405		17,000		17,411

Net Interest Income After Provision for Credit Losses		114,903		103,787		228,688		204,606
Non-Interest Income
Service charges		17,514		17,441		33,331		32,710
Trust fees		5,432		4,862		10,593		9,626
Insurance commissions and fees		3,559		3,691		7,928		8,636
Securities commissions and fees		3,597		3,002		6,654		5,393
Net securities gains		14		776		5		10,237
Mortgage banking operations		2,516		928		4,315		1,142
Bank owned life insurance		1,838		1,807		3,681		3,992
Other		5,282		6,683		11,427		9,524

Total Non-Interest Income		39,752		39,190		77,934		81,260
Non-Interest Expense
Salaries and employee benefits		50,431		48,465		99,700		97,418
Net occupancy		8,472		8,068		17,448		16,550
Equipment		7,698		7,177		15,346		14,076
Amortization of intangibles		1,999		2,461		4,114		4,744
Outside services		9,163		8,233		17,940		15,470
FDIC insurance		2,783		3,399		6,472		6,393
Merger and acquisition related		371		832		371		6,150
Other		15,582		13,949		29,763		25,949

Total Non-Interest Expense		96,499		92,584		191,154		186,750

Income Before Income Taxes		58,156		50,393		115,468		99,116
Income taxes		18,025		15,562		34,994		29,761

Net Income		40,131		34,831		80,474		69,355
Less: Preferred stock dividends		2,010		2,010		4,020		4,332

Net Income Available to Common Stockholders	$	38,121	$	32,821	$	76,454	$	65,023

Net Income per Common Share – Basic	$	0.22	$	0.20	$	0.44	$	0.40
Net Income per Common Share – Diluted		0.22		0.20		0.43		0.39
Cash Dividends per Common Share		0.12		0.12		0.24		0.24
Comprehensive Income	$	31,158	$	42,313	$	82,524	$	89,720

See accompanying Notes to Consolidated Financial Statements

F.N.B. CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Dollars in thousands, except per share data

Unaudited


	Preferred Stock		Common Stock		Additional Paid-In Capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Total
Balance at January 1, 2015	$	106,882	$	1,754	$	1,798,984	$	176,120		$	(46,003	)	$	(16,281	)	$	2,021,456
Comprehensive income								80,474			2,050						82,524
Dividends declared:
Preferred stock								(4,020	)								(4,020	)
Common stock: $0.24/share								(42,152	)								(42,152	)
Issuance of common stock				11		2,607								3,589			6,207
Restricted stock compensation						1,564											1,564
Tax benefit of stock-based compensation						192											192

Balance at June 30, 2015	$	106,882	$	1,765	$	1,803,347	$	210,422		$	(43,953	)	$	(12,692	)	$	2,065,771

Balance at January 1, 2014	$	106,882	$	1,592	$	1,608,117	$	121,870		$	(56,924	)	$	(7,154	)	$	1,774,383
Comprehensive income								69,355			20,365						89,720
Dividends declared:
Preferred stock								(4,332	)								(4,332	)
Common stock: $0.24/share								(40,123	)								(40,123	)
Issuance of common stock				14		7,857		(228	)					(3,527	)		4,116
Issuance of common stock - acquisitions				67		81,322											81,389
Restricted stock compensation						1,419											1,419
Tax benefit of stock-based compensation						1,505											1,505

Balance at June 30, 2014	$	106,882	$	1,673	$	1,700,220	$	146,542		$	(36,559	)	$	(10,681	)	$	1,908,077

See accompanying Notes to Consolidated Financial Statements

F.N.B. CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

Dollars in thousands

Unaudited


	Six Months Ended
	June 30,
	2015			2014
Operating Activities
Net income	$	80,474		$	69,355
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation, amortization and accretion		21,871			16,290
Provision for credit losses		17,000			17,411
Deferred tax expense (benefit)		5,789			(2,454	)
Net securities gains		(5	)		(10,237	)
Tax benefit of stock-based compensation		(192	)		(1,505	)
Loans originated for sale		(195,538	)		(51,761	)
Loans sold		198,787			58,659
Gain on sale of loans		(3,780	)		(2,465	)
Net change in:
Interest receivable		(1,593	)		40
Interest payable		(492	)		(1,292	)
Securities classified as trading in business combination and sold		—			203,178
Bank owned life insurance		(2,524	)		(3,375	)
Other, net		(14,562	)		8,705

Net cash flows provided by operating activities		105,235			300,549

Investing Activities
Net change in loans and leases		(402,216	)		(538,144	)
Securities available for sale:
Purchases		(242,375	)		(526,470	)
Sales		33,228			150,055
Maturities		125,270			172,295
Securities held to maturity:
Purchases		(204,591	)		(325,989	)
Maturities		137,518			95,152
Purchase of bank owned life insurance		(24	)		(4,448	)
Withdrawal/surrender of bank owned life insurance		—			715
Increase in premises and equipment		(8,651	)		(8,021	)
Net cash received in business combinations		—			27,058

Net cash flows used in investing activities		(561,841	)		(957,797	)

Financing Activities
Net change in:
Demand (non-interest bearing and interest bearing) and savings accounts		999,376			451,460
Time deposits		(21,510	)		(122,075	)
Short-term borrowings		(534,076	)		263,271
Increase in long-term borrowings		14,654			216,736
Decrease in long-term borrowings		(13,544	)		(58,831	)
Net proceeds from issuance of common stock		7,772			6,376
Tax benefit of stock-based compensation		192			1,505
Cash dividends paid:
Preferred stock		(4,020	)		(4,332	)
Common stock		(42,152	)		(40,123	)

Net cash flows provided by financing activities		406,692			713,987

Net (Decrease) Increase in Cash and Cash Equivalents		(49,914	)		56,739
Cash and cash equivalents at beginning of period		287,393			213,981

Cash and Cash Equivalents at End of Period	$	237,479		$	270,720

See accompanying Notes to Consolidated Financial Statements

F.N.B. CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Dollars in thousands, except share data

(Unaudited)

June 30, 2015

BUSINESS

F.N.B. Corporation (the Corporation), headquartered in Pittsburgh, Pennsylvania, is a diversified financial services company operating in six states and three major metropolitan areas, including Pittsburgh, Baltimore, Maryland and Cleveland, Ohio. As of June 30, 2015, the Corporation had 284 banking offices throughout Pennsylvania, Ohio, Maryland and West Virginia. The Corporation provides a full range of commercial banking, consumer banking and wealth management solutions through its subsidiary network which is led by its largest affiliate, First National Bank of Pennsylvania (FNBPA). Commercial banking solutions include corporate banking, small business banking, investment real estate financing, international banking, business credit, capital markets and lease financing. Consumer banking provides a full line of consumer banking products and services including deposit products, mortgage lending, consumer lending and a complete suite of mobile and online banking services. Wealth management services include asset management, private banking and insurance. The Corporation also operates Regency Finance Company (Regency), which had 73 consumer finance offices in Pennsylvania, Ohio, Kentucky and Tennessee as of June 30, 2015.

BASIS OF PRESENTATION

The Corporation’s accompanying consolidated financial statements and these notes to the financial statements include subsidiaries in which the Corporation has a controlling financial interest. The Corporation owns and operates FNBPA, First National Trust Company, First National Investment Services Company, LLC, F.N.B. Investment Advisors, Inc., First National Insurance Agency, LLC, Regency, Bank Capital Services, LLC and F.N.B. Capital Corporation, LLC, and includes results for each of these entities in the accompanying consolidated financial statements.

The accompanying consolidated financial statements include all adjustments that are necessary, in the opinion of management, to fairly reflect the Corporation’s financial position and results of operations in accordance with U.S. generally accepted accounting principles (GAAP). All significant intercompany balances and transactions have been eliminated. Certain prior period amounts have been reclassified to conform to the current period presentation. Events occurring subsequent to the date of the balance sheet have been evaluated for potential recognition or disclosure in the consolidated financial statements through the date of the filing of the consolidated financial statements with the Securities and Exchange Commission (SEC).

Certain information and note disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. The interim operating results are not necessarily indicative of operating results the Corporation expects for the full year. These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Corporation’s Annual Report on Form 10-K filed with the SEC on February 27, 2015.

USE OF ESTIMATES

The accounting and reporting policies of the Corporation conform with GAAP. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates. Material estimates that are particularly susceptible to significant changes include the allowance for credit losses, securities valuations, goodwill and other intangible assets and income taxes.

MERGERS AND ACQUISITIONS

OBA Financial Services, Inc.

On September 19, 2014, the Corporation completed its acquisition of OBA Financial Services, Inc. (OBA), a bank holding company based in Germantown, Maryland. On the acquisition date, the estimated fair values of OBA included $390,160 in assets, $291,393 in loans and $295,922 in deposits. The acquisition was valued at approximately $85,554 and resulted in the Corporation issuing 7,170,037 shares of its common stock in exchange for 4,025,895 shares

of OBA common stock. The Corporation also acquired the outstanding stock options of OBA that became fully vested upon the acquisition. The assets and liabilities of OBA were recorded on the Corporation’s consolidated balance sheet at their fair values as of September 19, 2014, the acquisition date, and OBA’s results of operations have been included in the Corporation’s consolidated statement of comprehensive income since that date. OBA’s banking affiliate, OBA Bank, was merged into FNBPA on September 19, 2014. Based on the purchase price allocation, the Corporation recorded $20,107 in goodwill and $4,304 in core deposit intangibles as a result of the acquisition. None of the goodwill is deductible for income tax purposes.

BCSB Bancorp, Inc.

On February 15, 2014, the Corporation completed its acquisition of BCSB Bancorp, Inc. (BCSB), a bank holding company based in Baltimore, Maryland. On the acquisition date, the estimated fair values of BCSB included $596,122 in assets, $304,932 in loans and $532,197 in deposits. The acquisition was valued at $80,547 and resulted in the Corporation issuing 6,730,597 shares of its common stock in exchange for 3,235,961 shares of BCSB common stock. The Corporation also acquired the outstanding stock options of BCSB that became fully vested upon the acquisition. The assets and liabilities of BCSB were recorded on the Corporation’s consolidated balance sheet at their fair values as of February 15, 2014, the acquisition date, and BCSB’s results of operations have been included in the Corporation’s consolidated statement of comprehensive income since that date. BCSB’s banking affiliate, Baltimore County Savings Bank, was merged into FNBPA on February 15, 2014. Based on the purchase price allocation, the Corporation recorded $42,451 in goodwill and $6,591 in core deposit intangibles as a result of the acquisition. None of the goodwill is deductible for income tax purposes.

Pending Acquisition – Metro Bancorp, Inc.

On August 4, 2015, the Corporation entered into a definitive merger agreement to acquire Metro Bancorp, Inc. (METR), a bank holding company based in Harrisburg, Pennsylvania with approximately $3,001,357 in total assets. The transaction is valued at approximately $474,000. Under the terms of the merger agreement, METR shareholders will be entitled to receive 2.373 shares of the Corporation’s common stock for each share of METR common stock. METR’s banking affiliate, Metro Bank, will be merged into FNBPA. The transaction is expected to be completed in the first quarter of 2016, pending regulatory approvals, the approval of shareholders and the satisfaction of other closing conditions.

Pending Branch Purchase – Bank of America

On May 27, 2015, the Corporation announced that it has entered into a purchase and assumption agreement to acquire approximately $280,000 in deposits and five branch-banking locations in southeastern Pennsylvania from Bank of America. The transaction is expected to close during the third quarter of 2015.

NEW ACCOUNTING STANDARDS

Insurance – Disclosures about Short-Duration Contracts

In May 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2015-09, Financial Services – Insurance. ASU 2015-09 requires insurance entities that issue short-duration contracts to provide additional disclosures about the liability for unpaid claims and claim adjustment expenses, including disclosure of information about significant changes in methodologies and assumptions used to calculate the liability, reasons for the change, and the effects on the financial statements. These additional disclosures will increase the transparency of significant estimates made in measuring those liabilities, improve comparability by requiring consistent disclosure of information, and provide financial statement users with information to facilitate analysis. The requirements of ASU 2015-09 should be applied retrospectively and are effective for annual periods beginning after December 15, 2015, and interim periods within annual periods beginning after December 15, 2016, with early adoption permitted. The adoption of this update is not expected to have a material effect on the financial statements, results of operations or liquidity of the Corporation.

Cloud Computing Arrangements

In April 2015, the FASB issued ASU No. 2015-05, Intangibles-Goodwill and Other-Internal-Use Software. ASU 2015-05 provides guidance to help entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement environment. The amendments in this Update provide a basis for evaluating whether a cloud computing arrangement includes a software license to internal-use software, and how to account for the software license element of the arrangement. This update supersedes the existing requirement to analogize to operating lease guidance in accounting for some software licenses. The requirements of ASU 2015-05 are effective for reporting periods beginning after December 15, 2015, with early adoption permitted. A reporting entity may apply ASU 2015-05 either prospectively or retrospectively. The Corporation is evaluating this new guidance and has not yet determined which approach it will adopt to apply the amendments in ASU 2015-05 or the impact that the adoption of this update will have on its financial statements.

Consolidation

In February 2015, the FASB issued ASU No. 2015-02, Consolidation. ASU 2015-02 changes the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. This update modifies the evaluation of whether limited partnerships or similar legal entities are variable interest entities (VIEs) or voting interest entities, eliminates the presumption that a general partner should consolidate a limited partnership and affects the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships. The requirements of ASU 2015-02 are effective for reporting periods beginning after December 15, 2015, with early adoption permitted. A reporting entity may apply ASU 2015-02 either retrospectively or by using a modified retrospective approach by recording a cumulative-effect adjustment to equity as of the beginning of the fiscal year of adoption. The adoption of this update is not expected to have a material effect on the financial statements, results of operations or liquidity of the Corporation.

Income Statement

In January 2015, the FASB issued ASU No. 2015-01, Income Statement – Extraordinary and Unusual Items. The FASB issued ASU 2015-01 as part of its Simplification Initiative to reduce complexity in accounting standards. ASU 2015-01 eliminates from GAAP the concept of extraordinary items. The requirements of ASU 2015-01 are effective for reporting periods beginning after December 15, 2015, with early adoption permitted. A reporting entity may apply ASU 2015-01 prospectively, or retrospectively to all prior periods presented in the financial statements. The adoption of this update will not have an effect on the financial statements, results of operations or liquidity of the Corporation, as the Corporation has not reported extraordinary items.

SECURITIES

The amortized cost and fair value of securities are as follows:


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Securities Available for Sale
June 30, 2015
U.S. Treasury	$	29,670	$	258	$	—		$	29,928
U.S. government-sponsored entities		403,396		1,853		(1,173	)		404,076
Residential mortgage-backed securities:
Agency mortgage-backed securities		588,103		6,454		(801	)		593,756
Agency collateralized mortgage obligations		561,212		2,324		(7,939	)		555,597
Non-agency collateralized mortgage obligations		1,270		9		—			1,279
Commercial mortgage-backed securities		5,004		2		—			5,006
States of the U.S. and political subdivisions		11,138		359		(40	)		11,457
Other debt securities		16,671		312		(742	)		16,241

Total debt securities		1,616,464		11,571		(10,695	)		1,617,340
Equity securities		975		305		—			1,280

	$	1,617,439	$	11,876	$	(10,695	)	$	1,618,620


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
December 31, 2014
U.S. Treasury	$	29,604	$	78	$	—		$	29,682
U.S. government-sponsored entities		338,330		742		(1,939	)		337,133
Residential mortgage-backed securities:
Agency mortgage-backed securities		546,572		7,548		(35	)		554,085
Agency collateralized mortgage obligations		580,601		1,617		(9,047	)		573,171
Non-agency collateralized mortgage obligations		1,414		17		—			1,431
Commercial mortgage-backed securities		7,891		—		(11	)		7,880
States of the U.S. and political subdivisions		12,713		477		(32	)		13,158
Other debt securities		16,615		420		(857	)		16,178

Total debt securities		1,533,740		10,899		(11,921	)		1,532,718
Equity securities		1,031		316		—			1,347

	$	1,534,771	$	11,215	$	(11,921	)	$	1,534,065

Securities Held to Maturity
June 30, 2015
U.S. Treasury	$	500	$	152	$	—		$	652
U.S. government-sponsored entities		146,561		1,054		(379	)		147,236
Residential mortgage-backed securities:
Agency mortgage-backed securities		670,817		12,981		(1,006	)		682,792
Agency collateralized mortgage obligations		484,832		2,351		(6,793	)		480,390
Non-agency collateralized mortgage obligations		3,375		14		(3	)		3,386
Commercial mortgage-backed securities		17,410		231		—			17,641
States of the U.S. and political subdivisions		194,565		1,936		(2,558	)		193,943

	$	1,518,060	$	18,719	$	(10,739	)	$	1,526,040

December 31, 2014
U.S. Treasury	$	502	$	168	$	—		$	670
U.S. government-sponsored entities		101,602		885		(524	)		101,963
Residential mortgage-backed securities:
Agency mortgage-backed securities		677,169		16,712		(346	)		693,535
Agency collateralized mortgage obligations		501,965		1,858		(7,329	)		496,494
Non-agency collateralized mortgage obligations		4,285		28		—			4,313
Commercial mortgage-backed securities		17,560		179		—			17,739
States of the U.S. and political subdivisions		150,272		3,315		(43	)		153,544

	$	1,453,355	$	23,145	$	(8,242	)	$	1,468,258

The Corporation classifies securities as trading securities when management intends to sell such securities in the near term. Such securities are carried at fair value, with unrealized gains (losses) reflected through the consolidated statements of comprehensive income. The Corporation classified certain securities acquired in conjunction with its acquisitions as trading securities. The Corporation both acquired and sold these trading securities during the quarterly periods in which each of the acquisitions occurred. As of June 30, 2015 and December 31, 2014, the Corporation did not hold any trading securities.

Gross gains and gross losses were realized on securities as follows:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2015		2014		2015			2014
Gross gains	$	14	$	739	$	14		$	18,748
Gross losses		—		37		(9	)		(8,511	)

	$	14	$	776	$	5		$	10,237

During the first quarter of 2014, the Corporation strategically sold its entire portfolio of pooled trust preferred securities (TPS) with net proceeds of $51,540 and a gain of $13,766. These were previously classified as collateralized debt obligations (CDOs) available for sale. Of the 23 pooled securities sold, one was determined to be a disallowed investment under the Volcker Rule (Section 619) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), and as such, was required to be disposed of by July 2016. Partially offsetting this gain was a net loss of $3,529 relating to the sale of other securities. By selling these securities, the Corporation strengthened the risk profile of its investment portfolio, improved its capital levels due to lowered risk-weighted assets and generated capital to support future growth.

As of June 30, 2015, the amortized cost and fair value of securities, by contractual maturities, were as follows:


	Available for Sale				Held to Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	4,990	$	5,040	$	1,010	$	1,017
Due from one to five years		438,979		440,208		140,854		141,072
Due from five to ten years		10,014		10,304		72,031		73,550
Due after ten years		6,892		6,150		127,731		126,192

		460,875		461,702		341,626		341,831
Residential mortgage-backed securities:
Agency mortgage-backed securities		588,103		593,756		670,817		682,792
Agency collateralized mortgage obligations		561,212		555,597		484,832		480,390
Non-agency collateralized mortgage obligations		1,270		1,279		3,375		3,386
Commercial mortgage-backed securities		5,004		5,006		17,410		17,641
Equity securities		975		1,280		—		—

	$	1,617,439	$	1,618,620	$	1,518,060	$	1,526,040

Maturities may differ from contractual terms because borrowers may have the right to call or prepay obligations with or without penalties. Periodic payments are received on mortgage-backed securities based on the payment patterns of the underlying collateral.

At June 30, 2015 and December 31, 2014, securities with a carrying value of $1,961,096 and $1,036,380, respectively, were pledged to secure public deposits, trust deposits and for other purposes as required by law. Securities with a carrying value of $240,738 and $892,647 at June 30, 2015 and December 31, 2014, respectively, were pledged as collateral for short-term borrowings.

Following are summaries of the fair values and unrealized losses of securities, segregated by length of impairment:


	Less than 12 Months							12 Months or More							Total
	#		Fair Value		Unrealized Losses			#		Fair Value		Unrealized Losses			#		Fair Value		Unrealized Losses
Securities Available for Sale
June 30, 2015
U.S. government-sponsored entities		5	$	84,445	$	(571	)		5	$	55,389	$	(602	)		10	$	139,834	$	(1,173	)
Residential mortgage-backed securities:
Agency mortgage-backed securities		11		186,261		(801	)		—		—		—			11		186,261		(801	)
Agency collateralized mortgage obligations		6		104,538		(563	)		18		237,775		(7,376	)		24		342,313		(7,939	)
States of the U.S. and political subdivisions		1		2,079		(3	)		1		1,153		(37	)		2		3,232		(40	)
Other debt securities		—		—		—			4		6,150		(742	)		4		6,150		(742	)

		23	$	377,323	$	(1,938	)		28	$	300,467	$	(8,757	)		51	$	677,790	$	(10,695	)


	Less than 12 Months							12 Months or More							Total
	#		Fair Value		Unrealized Losses			#		Fair Value		Unrealized Losses			#		Fair Value		Unrealized Losses
December 31, 2014
U.S. government-sponsored entities		7	$	89,986	$	(275	)		7	$	99,326	$	(1,664	)		14	$	189,312	$	(1,939	)
Residential mortgage-backed securities:
Agency mortgage-backed securities		2		45,145		(35	)		—		—		—			2		45,145		(35	)
Agency collateralized mortgage obligations		9		166,908		(1,238	)		16		225,700		(7,809	)		25		392,608		(9,047	)
Commercial mortgage-backed securities		1		7,880		(11	)		—		—		—			1		7,880		(11	)
States of the U.S. and political subdivisions		—		—		—			1		1,159		(32	)		1		1,159		(32	)
Other debt securities		—		—		—			4		6,030		(857	)		4		6,030		(857	)

		19	$	309,919	$	(1,559	)		28	$	332,215	$	(10,362	)		47	$	642,134	$	(11,921	)

Securities Held to Maturity
June 30, 2015
U.S. government-sponsored entities		3	$	44,772	$	(227	)		1	$	14,849	$	(152	)		4	$	59,621	$	(379	)
Residential mortgage-backed securities:
Agency mortgage-backed securities		10		115,966		(974	)		1		1,127		(32	)		11		117,093		(1,006	)
Agency collateralized mortgage obligations		7		95,239		(884	)		14		176,572		(5,909	)		21		271,811		(6,793	)
Non-agency collateralized mortgage obligations		2		1,731		(3	)		—		—		—			2		1,731		(3	)
States of the U.S. and political subdivisions		45		83,795		(2,558	)		—		—		—			45		83,795		(2,558	)

		67	$	341,503	$	(4,646	)		16	$	192,548	$	(6,093	)		83	$	534,051	$	(10,739	)

December 31, 2014
U.S. government-sponsored entities		2	$	24,989	$	(40	)		2	$	29,516	$	(484	)		4	$	54,505	$	(524	)
Residential mortgage-backed securities:
Agency mortgage-backed securities		1		1,099		(1	)		4		45,042		(345	)		5		46,141		(346	)
Agency collateralized mortgage obligations		8		104,071		(630	)		14		189,642		(6,699	)		22		293,713		(7,329	)
States of the U.S. and political subdivisions		1		1,427		(4	)		4		5,453		(39	)		5		6,880		(43	)

		12	$	131,586	$	(675	)		24	$	269,653	$	(7,567	)		36	$	401,239	$	(8,242	)

The Corporation does not intend to sell the debt securities and it is not more likely, than not, that the Corporation will be required to sell the securities before recovery of their amortized cost basis.

The Corporation’s remaining portfolio of TPS consists of four single-issuer securities, which are primarily from money-center and large regional banks and are included in other debt securities. These TPS had an amortized cost and estimated fair value of $6,892 and $6,150 at June 30, 2015, respectively. The Corporation has concluded from its analysis performed at June 30, 2015 that it is probable that the Corporation will collect all contractual principal and interest payments related to these securities.

Other-Than-Temporary Impairment

The Corporation evaluates its investment securities portfolio for other-than-temporary impairment (OTTI) on a quarterly basis. Impairment is assessed at the individual security level. The Corporation considers an investment security impaired if the fair value of the security is less than its cost or amortized cost basis. The following table presents a summary of the cumulative credit-related OTTI charges recognized as components of earnings for securities for which a portion of an OTTI is recognized in other comprehensive income:


	Collateralized Debt Obligations			Equities		Total
For the Six Months Ended June 30, 2015
Beginning balance		—		$	27	$	27
Loss where impairment was not previously recognized		—			—		—
Additional loss where impairment was previously recognized		—			—		—
Reduction due to credit impaired securities sold		—			—		—

Ending balance		—		$	27	$	27

For the Six Months Ended June 30, 2014
Beginning balance	$	17,155		$	27	$	17,182
Loss where impairment was not previously recognized		—			—		—
Additional loss where impairment was previously recognized		—			—		—
Reduction due to credit impaired securities sold		(17,155	)		—		(17,155	)

Ending balance	$	—		$	27	$	27

The Corporation did not recognize any impairment losses on securities for the six months ended June 30, 2015 or 2014.

States of the U.S. and Political Subdivisions

The Corporation’s municipal bond portfolio of $206,022 as of June 30, 2015 is highly rated with an average entity-specific rating of AA and 99.0% of the portfolio rated A or better. General obligation bonds comprise 99.6% of the portfolio. Geographically, municipal bonds support the Corporation’s primary footprint as 92.5% of the securities are from municipalities located throughout Pennsylvania, Ohio and Maryland. The average holding size of the securities in the municipal bond portfolio is $1,355. In addition to the strong stand-alone ratings, 84.0% of the municipalities have some formal credit enhancement insurance that strengthens the creditworthiness of their issue. Management also reviews the credit profile of each issuer on a quarterly basis.

FEDERAL HOME LOAN BANK STOCK

The Corporation is a member of the Federal Home Loan Bank (FHLB) of Pittsburgh. The FHLB requires members to purchase and hold a specified minimum level of FHLB stock based upon their level of borrowings, collateral balances and participation in other programs offered by the FHLB. Stock in the FHLB is non-marketable and is redeemable at the discretion of the FHLB. Both cash and stock dividends on FHLB stock are reported as income.

Members do not purchase stock in the FHLB for the same reasons that traditional equity investors acquire stock in an investor-owned enterprise. Rather, members purchase stock to obtain access to the low-cost products and services offered by the FHLB. Unlike equity securities of traditional for-profit enterprises, the stock of FHLB does not provide its holders with an opportunity for capital appreciation because, by regulation, FHLB stock can only be purchased, redeemed and transferred at par value.

At June 30, 2015 and December 31, 2014, the Corporation’s FHLB stock totaled $58,047 and $54,751, respectively, and is included in other assets on the balance sheet. The Corporation accounts for the stock in accordance with ASC 325, which requires the investment to be carried at cost and evaluated for impairment based on the ultimate recoverability of the par value. Due to the continued improvement of the FHLB’s financial performance and stability over the past several years, along with a special dividend during the first quarter of 2015 and quarterly cash dividends in 2014 and 2015, the Corporation believes its holdings in the stock are ultimately recoverable at par value and, therefore, determined that FHLB stock was not other-than-temporarily impaired. In addition, the Corporation has ample liquidity and does not require redemption of its FHLB stock in the foreseeable future.

LOANS AND LEASES

Following is a summary of loans and leases, net of unearned income:


	Originated Loans		Acquired Loans		Total Loans and Leases
June 30, 2015
Commercial real estate	$	3,178,219	$	674,388	$	3,852,607
Commercial and industrial		2,343,213		110,655		2,453,868
Commercial leases		190,881		—		190,881

Total commercial loans and leases		5,712,313		785,043		6,497,356
Direct installment		1,623,290		53,059		1,676,349
Residential mortgages		953,840		396,662		1,350,502
Indirect installment		941,851		950		942,801
Consumer lines of credit		972,474		146,496		1,118,970
Other		40,809		—		40,809

	$	10,244,577	$	1,382,210	$	11,626,787

December 31, 2014
Commercial real estate	$	3,031,810	$	783,898	$	3,815,708
Commercial and industrial		2,197,793		120,222		2,318,015
Commercial leases		177,824		—		177,824

Total commercial loans and leases		5,407,427		904,120		6,311,547
Direct installment		1,579,770		64,851		1,644,621
Residential mortgages		817,586		445,467		1,263,053
Indirect installment		873,645		1,906		875,551
Consumer lines of credit		946,427		164,549		1,110,976
Other		41,290		—		41,290

	$	9,666,145	$	1,580,893	$	11,247,038

Commercial real estate includes both owner-occupied and non-owner-occupied loans secured by commercial properties. Commercial and industrial includes loans to businesses that are not secured by real estate. Commercial leases are made for new or used equipment. Direct installment is comprised of fixed-rate, closed-end consumer loans for personal, family or household use, such as home equity loans and automobile loans. Residential mortgages consist of conventional and jumbo mortgage loans for non-commercial properties. Indirect installment is comprised of loans originated by third parties and underwritten by the Corporation, primarily automobile loans. Consumer lines of credit include home equity lines of credit (HELOC) and consumer lines of credit that are either unsecured or secured by collateral other than home equity. Other is comprised primarily of credit cards, mezzanine loans and student loans.

The loan and lease portfolio consists principally of loans to individuals and small- and medium-sized businesses within the Corporation’s primary market area of Pennsylvania, eastern Ohio, Maryland and northern West Virginia. The total loan portfolio contains consumer finance loans to individuals in Pennsylvania, Ohio, Tennessee and Kentucky, which totaled $178,455 or 1.5% of total loans and leases at June 30, 2015, compared to $180,588 or 1.6% of total loans and leases at December 31, 2014. Due to the relative size of the consumer finance loan portfolio, they are not segregated from other consumer loans.

As of June 30, 2015, 40.4% of the commercial real estate loans were owner-occupied, while the remaining 59.6% were non-owner-occupied, compared to 41.6% and 58.4%, respectively, as of December 31, 2014. As of June 30, 2015 and December 31, 2014, the Corporation had commercial construction loans of $243,382 and $296,156, respectively, representing 2.1% and 2.6% of total loans and leases at those respective dates.

Acquired Loans

All acquired loans were initially recorded at fair value at the acquisition date. The outstanding balance and the carrying amount of acquired loans included in the consolidated balance sheet are as follows:


	June 30, 2015		December 31, 2014
Accounted for under ASC 310-30:
Outstanding balance	$	1,423,534	$	1,597,558
Carrying amount		1,169,717		1,344,171
Accounted for under ASC 310-20:
Outstanding balance		219,358		242,488
Carrying amount		205,548		228,748
Total acquired loans:
Outstanding balance		1,642,892		1,840,046
Carrying amount		1,375,265		1,572,919

The carrying amount of purchased credit impaired loans included in the table above totaled $8,808 at June 30, 2015 and $9,556 at December 31, 2014, representing less than 1% of the carrying amount of total acquired loans as of each date.

The following table provides changes in accretable yield for all acquired loans accounted for under ASC 310-30. Loans accounted for under ASC 310-20 are not included in this table.


	Six Months Ended
	June 30,
	2015			2014
Balance at beginning of period	$	331,899		$	305,646
Reduction due to unexpected early payoffs		(25,735	)		(18,821	)
Reclass from non-accretable difference		15,653			2,605
Disposals/transfers		(348	)		(2,130	)
Accretion		(31,656	)		(28,275	)

Balance at end of period	$	289,813		$	259,025

Credit Quality

Management monitors the credit quality of the Corporation’s loan and lease portfolio on an ongoing basis. Measurement of delinquency and past due status is based on the contractual terms of each loan.

Non-performing loans include non-accrual loans and non-performing troubled debt restructurings (TDRs). Past due loans are reviewed on a monthly basis to identify loans for non-accrual status. The Corporation places a loan on non-accrual status and discontinues interest accruals on originated loans generally when principal or interest is due and has remained unpaid for a certain number of days, or when the full amount of principal and interest due is not expected to be collected in full, unless the loan is both well secured and in the process of collection. Commercial loans are placed on non-accrual at 90 days, installment loans are placed on non-accrual at 120 days and residential mortgages and consumer lines of credit are generally placed on non-accrual at 180 days. When a loan is placed on non-accrual status, all unpaid interest is reversed. Non-accrual loans may not be restored to accrual status until all delinquent principal and interest have been paid and the ultimate ability to collect the remaining principal and interest is reasonably assured. TDRs are loans in which the borrower has been granted a concession on the interest rate or the original repayment terms due to financial distress.

Following is a summary of non-performing assets:


	June 30, 2015			December 31, 2014
Non-accrual loans	$	45,396		$	45,113
Troubled debt restructurings		22,916			23,439

Total non-performing loans		68,312			68,552
Other real estate owned (OREO)		40,190			41,466

Total non-performing assets	$	108,502		$	110,018

Asset quality ratios:
Non-performing loans as a percent of total loans and leases		0.59	%		0.61	%
Non-performing loans + OREO as a percent of total loans and leases + OREO		0.93	%		0.97	%
Non-performing assets as a percent of total assets		0.65	%		0.68	%

The carrying value of residential OREO held as a result of obtaining physical possession upon completion of a foreclosure or through completion of a deed in lieu of foreclosure amounted to $5,138 at June 30, 2015. Also, the recorded investment of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process at June 30, 2015 amounted to $13,154.

The following tables provide an analysis of the aging of the Corporation’s past due loans by class, segregated by loans and leases originated and loans acquired:


	30-89 Days Past Due		³ 90 Days Past Due and Still Accruing		Non-Accrual		Total Past Due		Current		Total Loans and Leases
Originated Loans and Leases
June 30, 2015
Commercial real estate	$	6,054	$	3	$	24,652	$	30,709	$	3,147,510	$	3,178,219
Commercial and industrial		2,800		3		8,966		11,769		2,331,444		2,343,213
Commercial leases		818		—		699		1,517		189,364		190,881

Total commercial loans and leases		9,672		6		34,317		43,995		5,668,318		5,712,313
Direct installment		9,414		2,969		5,656		18,039		1,605,251		1,623,290
Residential mortgages		8,198		1,536		3,767		13,501		940,339		953,840
Indirect installment		7,040		358		898		8,296		933,555		941,851
Consumer lines of credit		2,192		975		694		3,861		968,613		972,474
Other		65		73		—		138		40,671		40,809

	$	36,581	$	5,917	$	45,332	$	87,830	$	10,156,747	$	10,244,577

December 31, 2014
Commercial real estate	$	9,601	$	313	$	24,132	$	34,046	$	2,997,764	$	3,031,810
Commercial and industrial		2,446		3		8,310		10,759		2,187,034		2,197,793
Commercial leases		961		43		722		1,726		176,098		177,824

Total commercial loans and leases		13,008		359		33,164		46,531		5,360,896		5,407,427
Direct installment		9,333		3,617		7,117		20,067		1,559,703		1,579,770
Residential mortgages		8,709		3,891		2,964		15,564		802,022		817,586
Indirect installment		7,804		684		1,149		9,637		864,008		873,645
Consumer lines of credit		2,408		562		719		3,689		942,738		946,427
Other		13		135		—		148		41,142		41,290

	$	41,275	$	9,248	$	45,113	$	95,636	$	9,570,509	$	9,666,145


	30-89 Days Past Due		³ 90 Days Past Due and Still Accruing		Non- Accrual		Total Past Due (1) (2)		Current		Discount			Total Loans
Acquired Loans
June 30, 2015
Commercial real estate	$	10,618	$	11,098	$	—	$	21,716	$	691,401	$	(38,729	)	$	674,388
Commercial and industrial		528		756		64		1,348		117,132		(7,825	)		110,655

Total commercial loans		11,146		11,854		64		23,064		808,533		(46,554	)		785,043
Direct installment		1,108		1,057		—		2,165		49,963		931			53,059
Residential mortgages		7,909		15,688		—		23,597		410,919		(37,854	)		396,662
Indirect installment		21		17		—		38		1,149		(237	)		950
Consumer lines of credit		654		1,474		—		2,128		148,470		(4,102	)		146,496

	$	20,838	$	30,090	$	64	$	50,992	$	1,419,034	$	(87,816	)	$	1,382,210

December 31, 2014
Commercial real estate	$	12,076	$	12,368		—	$	24,444	$	799,991	$	(40,537	)	$	783,898
Commercial and industrial		687		1,968		—		2,655		127,535		(9,968	)		120,222

Total commercial loans		12,763		14,336		—		27,099		927,526		(50,505	)		904,120
Direct installment		2,670		1,443		—		4,113		59,532		1,206			64,851
Residential mortgages		8,159		19,936		—		28,095		456,810		(39,438	)		445,467
Indirect installment		38		30		—		68		2,179		(341	)		1,906
Consumer lines of credit		1,048		2,279		—		3,327		166,912		(5,690	)		164,549

	$	24,678	$	38,024		—	$	62,702	$	1,612,959	$	(94,768	)	$	1,580,893

(1)	Past due information for acquired loans is based on the contractual balance outstanding at June 30, 2015 and December 31, 2014.

(2)

Acquired loans are considered performing upon acquisition, regardless of whether the customer is contractually delinquent, if the Corporation can reasonably estimate the timing and amount of expected cash flows on such loans. Accordingly, the Corporation does not consider acquired contractually delinquent loans to be non-accrual or non-performing and continues to recognize interest income on these loans using the accretion method.

The Corporation utilizes the following categories to monitor credit quality within its commercial loan and lease portfolio:


Rating Category		Definition
Pass		in general, the condition and performance of the borrower is satisfactory or better

Special Mention		in general, the condition of the borrower has deteriorated, requiring an increased level of monitoring

Substandard		in general, the condition and performance of the borrower has significantly deteriorated and could further deteriorate if deficiencies are not corrected

Doubtful		in general, the condition of the borrower has significantly deteriorated and the collection in full of both principal and interest is highly questionable or improbable

The use of these internally assigned credit quality categories within the commercial loan and lease portfolio permits management’s use of transition matrices to estimate a quantitative portion of credit risk. The Corporation’s internal credit risk grading system is based on past experiences with similarly graded loans and leases and conforms with regulatory categories. In general, loan and lease risk ratings within each category are reviewed on an ongoing basis according to the Corporation’s policy for each class of loans and leases. Each quarter, management analyzes the resulting ratings, as well as other external statistics and factors such as delinquency, to track the migration performance of the

commercial loan and lease portfolio. Loans and leases within the Pass credit category or that migrate toward the Pass credit category generally have a lower risk of loss compared to loans and leases that migrate toward the Substandard or Doubtful credit categories. Accordingly, management applies higher risk factors to Substandard and Doubtful credit categories.

The following tables present a summary of the Corporation’s commercial loans and leases by credit quality category, segregated by loans and leases originated and loans acquired:


	Commercial Loan and Lease Credit Quality Categories
	Pass		Special Mention		Substandard		Doubtful		Total
Originated Loans and Leases
June 30, 2015
Commercial real estate	$	3,056,070	$	59,893	$	61,601	$	655	$	3,178,219
Commercial and industrial		2,244,956		60,547		36,140		1,570		2,343,213
Commercial leases		187,988		2,002		891		—		190,881

	$	5,489,014	$	122,442	$	98,632	$	2,225	$	5,712,313

December 31, 2014
Commercial real estate	$	2,890,830	$	58,630	$	81,951	$	399	$	3,031,810
Commercial and industrial		2,085,893		71,420		39,684		796		2,197,793
Commercial leases		174,677		2,198		949		—		177,824

	$	5,151,400	$	132,248	$	122,584	$	1,195	$	5,407,427

Acquired Loans
June 30, 2015
Commercial real estate	$	533,067	$	61,595	$	79,726		—	$	674,388
Commercial and industrial		97,178		4,076		9,401		—		110,655

	$	630,245	$	65,671	$	89,127		—	$	785,043

December 31, 2014
Commercial real estate	$	610,260	$	73,891	$	99,747		—	$	783,898
Commercial and industrial		103,862		3,506		12,854		—		120,222

	$	714,122	$	77,397	$	112,601		—	$	904,120

Credit quality information for acquired loans is based on the contractual balance outstanding at June 30, 2015 and December 31, 2014.

The Corporation uses delinquency transition matrices within the consumer and other loan classes to enable management to estimate a quantitative portion of credit risk. Each month, management analyzes payment and volume activity, FICO scores and other external factors such as unemployment, to determine how consumer loans are performing.

Following is a table showing originated consumer loans by payment status:


	Consumer Loan Credit Quality by Payment Status
	Performing		Non- Performing		Total
June 30, 2015
Direct installment	$	1,608,934	$	14,356	$	1,623,290
Residential mortgages		939,368		14,472		953,840
Indirect installment		940,799		1,052		941,851
Consumer lines of credit		970,554		1,920		972,474
Other		40,809		—		40,809


December 31, 2014
Direct installment	$	1,565,090	$	14,680	$	1,579,770
Residential mortgages		802,522		15,064		817,586
Indirect installment		872,340		1,305		873,645
Consumer lines of credit		944,631		1,796		946,427
Other		41,290		—		41,290

Loans and leases are designated as impaired when, in the opinion of management, based on current information and events, the collection of principal and interest in accordance with the loan and lease contract is doubtful. Typically, the Corporation does not consider loans and leases for impairment unless a sustained period of delinquency (i.e., 90-plus days) is noted or there are subsequent events that impact repayment probability (i.e., negative financial trends, bankruptcy filings, imminent foreclosure proceedings, etc.). Impairment is evaluated in the aggregate for consumer installment loans, residential mortgages, consumer lines of credit and commercial loan and lease relationships less than $500 based on loan and lease segment loss given default. For commercial loan relationships greater than or equal to $500, a specific valuation allowance is allocated, if necessary, so that the loan is reported net, at the present value of estimated future cash flows using a market interest rate or at the fair value of collateral if repayment is expected solely from the collateral. Consistent with the Corporation’s existing method of income recognition for loans and leases, interest on impaired loans, except those classified as non-accrual, is recognized as income using the accrual method. Impaired loans, or portions thereof, are charged off when deemed uncollectible.

Following is a summary of information pertaining to originated loans and leases considered to be impaired, by class of loan and lease:


	Unpaid Contractual Principal Balance		Recorded Investment With No Specific Reserve		Recorded Investment With Specific Reserve		Total Recorded Investment		Specific Reserve		Average Recorded Investment
At or for the Six Months Ended June 30, 2015
Commercial real estate	$	35,137	$	25,753	$	822	$	26,575	$	655	$	26,301
Commercial and industrial		10,130		7,325		1,909		9,234		1,570		9,650
Commercial leases		699		699		—		699		—		716

Total commercial loans and leases		45,966		33,777		2,731		36,508		2,225		36,667
Direct installment		15,043		14,356		—		14,356		—		14,322
Residential mortgages		14,962		14,472		—		14,472		—		15,076
Indirect installment		2,782		1,052		—		1,052		—		1,208
Consumer lines of credit		2,079		1,920		—		1,920		—		1,808
Other		—		—		—		—		—		—

	$	80,832	$	65,577	$	2,731	$	68,308	$	2,225	$	69,081

At or for the Year Ended December 31, 2014
Commercial real estate	$	34,583	$	25,443	$	883	$	26,326	$	399	$	30,807
Commercial and industrial		11,412		7,609		1,948		9,557		780		9,510
Commercial leases		722		722		—		722		—		686

Total commercial loans and leases		46,717		33,774		2,831		36,605		1,179		41,003
Direct installment		14,987		14,680		—		14,680		—		14,248
Residential mortgages		16,791		15,064		—		15,064		—		16,924
Indirect installment		1,467		1,305		—		1,305		—		1,399
Consumer lines of credit		1,803		1,796		—		1,796		—		1,793
Other		—		—		—		—		—		—

	$	81,765	$	66,619	$	2,831	$	69,450	$	1,179	$	75,367

Interest income is generally no longer recognized once a loan becomes impaired.

These tables do not reflect the additional allowance for credit losses relating to acquired loans in the following pools and categories: commercial real estate of $3,454; commercial and industrial of $607; direct installment of $1,562; residential mortgages of $752; indirect installment of $284; and consumer lines of credit of $286, totaling $6,945 at June 30, 2015 and commercial real estate of $3,286; commercial and industrial of $1,484; direct installment of $1,847; residential mortgages of $858; indirect installment of $232; and consumer lines of credit of $267, totaling $7,974 at December 31, 2014.

Troubled Debt Restructurings

TDRs are loans whose contractual terms have been modified in a manner that grants a concession to a borrower experiencing financial difficulties. TDRs typically result from loss mitigation activities and could include the extension of a maturity date, interest rate reduction, principal forgiveness, deferral or decrease in payments for a period of time and other actions intended to minimize the economic loss and to avoid foreclosure or repossession of collateral.

Following is a summary of the payment status of total TDRs:


	June 30, 2015		December 31, 2014
Accruing:
Performing	$	11,669	$	9,441
Non-performing		22,916		23,439
Non-accrual		8,406		8,272

	$	42,991	$	41,152

TDRs that are accruing and performing include loans that met the criteria for non-accrual of interest prior to restructuring for which the Corporation can reasonably estimate the timing and amount of the expected cash flows on such loans and for which the Corporation expects to fully collect the new carrying value of the loans. During the six months ended June 30, 2015, the Corporation returned to performing status $3,831 in restructured residential mortgage loans that have consistently met their modified obligations for more than six months. TDRs that are accruing and non-performing are comprised of consumer loans that have not demonstrated a consistent repayment pattern on the modified terms for more than six months, however it is expected that the Corporation will collect all future principal and interest payments. TDRs that are on non-accrual are not placed on accruing status until all delinquent principal and interest have been paid and the ultimate collectability of the remaining principal and interest is reasonably assured. Some loan modifications classified as TDRs may not ultimately result in the full collection of principal and interest, as modified, and may result in potential incremental losses which are factored into the allowance for credit losses.

Excluding purchased impaired loans, commercial loans over $500 whose terms have been modified in a TDR are generally placed on non-accrual, individually analyzed and measured for estimated impairment based on the fair value of the underlying collateral. The Corporation’s allowance for credit losses included specific reserves for commercial TDRs of $510 and $371 at June 30, 2015 and December 31, 2014, respectively, and pooled reserves for individual loans under $500 of $1,086 and $1,215 for those same respective periods, based on loan segment loss given default. Upon default, the amount of the recorded investment in the TDR in excess of the fair value of the collateral, less estimated selling costs, is generally considered a confirmed loss and is charged-off against the allowance for credit losses.

All other classes of loans, which are primarily secured by residential properties, whose terms have been modified in a TDR are pooled and measured for estimated impairment based on the expected net present value of the estimated future cash flows of the pool. The Corporation’s allowance for credit losses included pooled reserves for these classes of loans of $4,936 and $3,448 at June 30, 2015 and December 31, 2014, respectively. Upon default of an individual loan, the Corporation’s charge-off policy is followed accordingly for that class of loan.

The majority of TDRs are the result of interest rate concessions for a limited period of time. Following is a summary of loans, by class, that have been restructured:


	Three Months Ended June 30, 2015						Six Months Ended June 30, 2015
	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
Commercial real estate		—	$	—	$	—		2	$	312	$	176
Commercial and industrial		1		5		4		1		5		4

Total commercial loans		1		5		4		3		317		180
Direct installment		110		1,761		1,729		241		3,310		3,201
Residential mortgages		7		231		234		21		812		846
Indirect installment		5		14		13		10		30		30
Consumer lines of credit		14		250		249		30		520		519
Other		—		—		—		—		—		—

		137	$	2,261	$	2,229		305	$	4,989	$	4,776


	Three Months Ended June 30, 2014						Six Months Ended June 30, 2014
	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
Commercial real estate		8	$	2,508	$	2,496		9	$	2,581	$	2,553
Commercial and industrial		—		—		—		1		188		188

Total commercial loans		8		2,508		2,496		10		2,769		2,741
Direct installment		136		1,873		1,843		262		3,573		3,479
Residential mortgages		15		1,070		1,045		24		1,359		1,324
Indirect installment		6		18		16		13		34		32
Consumer lines of credit		18		555		553		25		812		807
Other		—		—		—		—		—		—

		183	$	6,024	$	5,953		334	$	8,547	$	8,383

Following is a summary of TDRs, by class of loans and leases, for which there was a payment default, excluding loans that were either charged-off or cured by period end. Default occurs when a loan is 90 days or more past due and is within 12 months of restructuring.


	Three Months Ended June 30, 2015 (1)				Six Months Ended June 30, 2015 (1)
	Number of Contracts		Recorded Investment		Number of Contracts		Recorded Investment
Commercial real estate		—	$	—		—	$	—
Commercial and industrial		1		229		1		229

Total commercial loans		1		229		1		229
Direct installment		27		96		58		182
Residential mortgages		3		114		4		171
Indirect installment		3		7		5		7
Consumer lines of credit		—		—		1		92
Other		—		—		—		—

		34	$	446		69	$	681


	Three Months Ended June 30, 2014 (1)				Six Months Ended June 30, 2014 (1)
	Number of Contracts		Recorded Investment		Number of Contracts		Recorded Investment
Commercial real estate		—	$	—		—	$	—
Commercial and industrial		—		—		—		—

Total commercial loans		—		—		—		—
Direct installment		33		240		47		392
Residential mortgages		—		—		—		—
Indirect installment		1		—		1		—
Consumer lines of credit		—		—		—		—
Other		—		—		—		—

Direct installment		34	$	240		48	$	392

(1)	The recorded investment is as of period end.

ALLOWANCE FOR CREDIT LOSSES

The allowance for credit losses is established as losses are estimated to have occurred through a provision charged to earnings. Losses are charged against the allowance for credit losses when management believes the uncollectability of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance for credit losses. Allowances for impaired commercial loans over $500 are generally determined based on collateral values or the present value of estimated cash flows. All other impaired loans and leases are evaluated in the aggregate based on loan segment loss given default. Changes in the allowance for credit losses related to impaired loans and leases are charged or credited to the provision for credit losses.

The allowance for credit losses is maintained at a level that, in management’s judgment, is believed adequate to absorb probable losses associated with specifically identified loans and leases, as well as estimated probable credit losses inherent in the remainder of the portfolio. Adequacy of the allowance for credit losses is based on management’s evaluation of potential losses in the portfolio, which includes an assessment of past experience, current economic conditions in specific industries and geographic areas, general economic conditions, known and inherent risks in the portfolio, the estimated value of underlying collateral and residuals and changes in the composition of the portfolio. Determination of the allowance for credit losses is inherently subjective as it requires significant estimates, including the amounts and timing of expected future cash flows on impaired loans and leases, estimated losses on pools of homogeneous loans and leases based on transition matrices with predefined loss emergence periods and consideration of qualitative factors, all of which are susceptible to significant change.

Credit impaired loans obtained through acquisitions are accounted for under the provisions of ASC 310-30. The Corporation also accounts for certain acquired loans considered performing at the time of acquisition by analogy to ASC 310-30. ASC 310-30 requires the initial recognition of acquired loans at the present value of amounts expected to be received. Any deterioration in the credit quality of acquired loans subsequent to acquisition would be considered in the allowance for credit losses.

Following is a summary of changes in the allowance for credit losses, by loan and lease class:


	Balance at Beginning of Period		Charge- Offs			Recoveries		Net Charge- Offs			Provision for credit losses			Balance at End of Period
Three Months Ended June 30, 2015
Commercial real estate	$	38,792	$	(977	)	$	200	$	(777	)	$	1,857		$	39,872
Commercial and industrial		32,803		(1,416	)		976		(440	)		(58	)		32,305
Commercial leases		2,576		(111	)		35		(76	)		(277	)		2,223

Total commercial loans and leases		74,171		(2,504	)		1,211		(1,293	)		1,522			74,400
Direct installment		21,204		(2,953	)		297		(2,656	)		3,731			22,279
Residential mortgages		8,471		(112	)		24		(88	)		196			8,579
Indirect installment		7,657		(1,503	)		332		(1,171	)		2,423			8,909
Consumer lines of credit		8,890		(323	)		36		(287	)		515			9,118
Other		854		(325	)		25		(300	)		357			911

Total allowance on originated loans and leases		121,247		(7,720	)		1,925		(5,795	)		8,744			124,196

Purchased credit-impaired loans		621		—			—		—			37			658
Other acquired loans		6,631		(468	)		41		(427	)		83			6,287

Total allowance on acquired loans		7,252		(468	)		41		(427	)		120			6,945

Total allowance	$	128,499	$	(8,188	)	$	1,966	$	(6,222	)	$	8,864		$	131,141

Six Months Ended June 30, 2015
Commercial real estate	$	37,588	$	(1,978	)	$	409	$	(1,569	)	$	3,853		$	39,872
Commercial and industrial		32,645		(2,100	)		1,096		(1,004	)		664			32,305
Commercial leases		2,398		(204	)		45		(159	)		(16	)		2,223

Total commercial loans and leases		72,631		(4,282	)		1,550		(2,732	)		4,501			74,400
Direct installment		20,538		(5,386	)		566		(4,820	)		6,561			22,279
Residential mortgages		8,024		(623	)		39		(584	)		1,139			8,579
Indirect installment		7,504		(2,783	)		634		(2,149	)		3,554			8,909
Consumer lines of credit		8,496		(733	)		76		(657	)		1,279			9,118
Other		759		(660	)		36		(624	)		776			911

Total allowance on originated loans and leases		117,952		(14,467	)		2,901		(11,566	)		17,810			124,196

Purchased credit-impaired loans		660		(64	)		19		(45	)		43			658
Other acquired loans		7,314		(545	)		371		(174	)		(853	)		6,287

Total allowance on acquired loans		7,974		(609	)		390		(219	)		(810	)		6,945

Total allowance	$	125,926	$	(15,076	)	$	3,291	$	(11,785	)	$	17,000		$	131,141


	Balance at Beginning of Period		Charge- Offs			Recoveries		Net Charge- Offs			Provision for credit losses			Balance at End of Period
Three Months Ended June 30, 2014
Commercial real estate	$	38,534	$	(1,572	)	$	263	$	(1,309	)	$	1,253		$	38,478
Commercial and industrial		29,971		(540	)		168		(372	)		3,418			33,017
Commercial leases		1,944		(63	)		53		(10	)		145			2,079

Total commercial loans and leases		70,449		(2,175	)		484		(1,691	)		4,816			73,574
Direct installment		16,630		(2,264	)		283		(1,981	)		2,195			16,844
Residential mortgages		5,307		(137	)		44		(93	)		292			5,506
Indirect installment		6,500		(696	)		230		(466	)		659			6,693
Consumer lines of credit		7,658		(340	)		38		(302	)		308			7,664
Other		579		(307	)		5		(302	)		630			907

Total allowance on originated loans and leases		107,123		(5,919	)		1,084		(4,835	)		8,900			111,188

Purchased credit-impaired loans		708		(1,653	)		—		(1,653	)		1,393			448
Other acquired loans		4,388		(126	)		738		612			112			5,112

Total allowance on acquired loans		5,096		(1,779	)		738		(1,041	)		1,505			5,560

Total allowance	$	112,219	$	(7,698	)	$	1,822	$	(5,876	)	$	10,405		$	116,748

Six Months Ended June 30, 2014
Commercial real estate	$	32,548	$	(3,795	)	$	562	$	(3,233	)	$	9,163		$	38,478
Commercial and industrial		32,603		(1,053	)		538		(515	)		929			33,017
Commercial leases		1,903		(150	)		82		(68	)		244			2,079

Total commercial loans and leases		67,054		(4,998	)		1,182		(3,816	)		10,336			73,574
Direct installment		17,824		(4,785	)		550		(4,235	)		3,255			16,844
Residential mortgages		5,836		(269	)		48		(221	)		(109	)		5,506
Indirect installment		6,409		(1,498	)		447		(1,051	)		1,335			6,693
Consumer lines of credit		7,231		(663	)		93		(570	)		1,003			7,664
Other		530		(569	)		10		(559	)		936			907

Total allowance on originated loans and leases		104,884		(12,782	)		2,330		(10,452	)		16,756			111,188

Purchased credit-impaired loans		1,000		(1,902	)		—		(1,902	)		1,350			448
Other acquired loans		4,900		(117	)		1,024		907			(695	)		5,112

Total allowance on acquired loans		5,900		(2,019	)		1,024		(995	)		655			5,560

Total allowance	$	110,784	$	(14,801	)	$	3,354	$	(11,447	)	$	17,411		$	116,748

Following is a summary of the individual and collective originated allowance for credit losses and corresponding loan and lease balances by class:


	Allowance				Loans and Leases Outstanding
	Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Loans and Leases		Individually Evaluated for Impairment		Collectively Evaluated for Impairment
June 30, 2015
Commercial real estate	$	655	$	39,217	$	3,178,219	$	13,713	$	3,164,506
Commercial and industrial		1,570		30,735		2,343,213		5,585		2,337,628
Commercial leases		—		2,223		190,881		—		190,881

Total commercial loans and leases		2,225		72,175		5,712,313		19,298		5,693,015
Direct installment		—		22,279		1,623,290		—		1,623,290
Residential mortgages		—		8,579		953,840		—		953,840
Indirect installment		—		8,909		941,851		—		941,851
Consumer lines of credit		—		9,118		972,474		—		972,474
Other		—		911		40,809		—		40,809

	$	2,225	$	121,971	$	10,244,577	$	19,298	$	10,225,279

December 31, 2014
Commercial real estate	$	399	$	37,189	$	3,031,810	$	13,952	$	3,017,858
Commercial and industrial		780		31,865		2,197,793		5,837		2,191,956
Commercial leases		—		2,398		177,824		—		177,824

Total commercial loans and leases		1,179		71,452		5,407,427		19,789		5,387,638
Direct installment		—		20,538		1,579,770		—		1,579,770
Residential mortgages		—		8,024		817,586		—		817,586
Indirect installment		—		7,504		873,645		—		873,645
Consumer lines of credit		—		8,496		946,427		—		946,427
Other		—		759		41,290		—		41,290

	$	1,179	$	116,773	$	9,666,145	$	19,789	$	9,646,356

BORROWINGS

Following is a summary of short-term borrowings:


	June 30, 2015		December 31, 2014
Securities sold under repurchase agreements	$	212,380	$	882,696
Federal Home Loan Bank advances		840,000		820,000
Federal funds purchased		330,000		210,000
Subordinated notes		125,202		128,962

	$	1,507,582	$	2,041,658

Securities sold under repurchase agreements is comprised of customer repurchase agreements, which are sweep accounts with next day maturities utilized by larger commercial customers to earn interest on their funds. Securities are pledged to these customers in an amount equal to the outstanding balance.

Following is a summary of long-term borrowings:


	June 30, 2015		December 31, 2014
Federal Home Loan Bank advances	$	400,017	$	400,042
Subordinated notes		84,289		83,155
Junior subordinated debt		58,272		58,246

	$	542,578	$	541,443

The Corporation’s banking affiliate has available credit with the FHLB of $4,393,116 of which $1,240,018 was used as of June 30, 2015. These advances are secured by loans collateralized by residential mortgages, HELOCs, commercial real estate and FHLB stock and are scheduled to mature in various amounts periodically through the year 2021. Effective interest rates paid on the long-term advances ranged from 0.76% to 4.19% for both the six months ended June 30, 2015 and the year ended December 31, 2014.

The Corporation had two unconsolidated subsidiary trusts as of June 30, 2015 (collectively, the Trusts): F.N.B. Statutory Trust II and Omega Financial Capital Trust I. One hundred percent of the common equity of each Trust is owned by the Corporation. The Trusts were formed for the purpose of issuing Corporation-obligated mandatorily redeemable capital securities (TPS) to third-party investors. The proceeds from the sale of TPS and the issuance of common equity by the Trusts were invested in junior subordinated debt securities (subordinated debt) issued by the Corporation, which are the sole assets of each Trust. Since third-party investors are the primary beneficiaries, the Trusts are not consolidated in the Corporation’s financial statements. The Trusts pay dividends on the TPS at the same rate as the distributions paid by the Corporation on the junior subordinated debt held by the Trusts. Omega Financial Capital Trust I was assumed as a result of an acquisition.

Distributions on the subordinated debt issued to the Trusts are recorded as interest expense by the Corporation. The TPS are subject to mandatory redemption, in whole or in part, upon repayment of the subordinated debt. The TPS are eligible for redemption, at any time, at the Corporation’s discretion. Under recently issued capital guidelines, effective January 1, 2015, the portion of the subordinated debt, net of the Corporation’s investments in the Trusts, that qualifies as tier 1 capital is limited to 25% of the total $57,500 outstanding at June 30, 2015, with the remaining 75% moving to tier 2 capital. In 2016, the entire balance of the subordinated debt will be included in tier 2 capital. The Corporation has entered into agreements which, when taken collectively, fully and unconditionally guarantee the obligations under the TPS subject to the terms of each of the guarantees.

The following table provides information relating to the Trusts as of June 30, 2015:


	Trust Preferred Securities		Common Securities		Junior Subordinated Debt		Stated Maturity Date		Interest Rate
F.N.B. Statutory Trust II	$	21,500	$	665	$	22,165		6/15/36		1.94	%	Variable; 3-month LIBOR + 165 basis points (bps)
Omega Financial Capital Trust I		36,000		1,114		36,107		10/18/34		2.47	%	Variable; 3-month LIBOR + 219 bps

	$	57,500	$	1,779	$	58,272

DERIVATIVE AND HEDGING ACTIVITIES

The Corporation is exposed to certain risks arising from both its business operations and economic conditions. The Corporation principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Corporation manages economic risks, including interest rate risk, primarily by managing the amount, source, and duration of its assets and liabilities, and through the use of derivative instruments. Derivative instruments are used to reduce the effects that changes in interest rates may have on net income and cash flows. The Corporation also uses derivative instruments to facilitate transactions on behalf of its customers.

All derivatives are carried on the consolidated balance sheet at fair value and do not take into account the effects of master netting arrangements the Corporation has with other financial institutions. Credit risk is included in the determination of the estimated fair value of derivatives. Derivative assets are classified in the consolidated balance sheet under other assets and derivative liabilities are classified in the consolidated balance sheet under other liabilities. Changes in fair value are recognized in earnings except for certain changes related to derivative instruments designated as part of a cash flow hedging relationship.

The following table presents notional amounts and gross fair values of all derivative assets and derivative liabilities held by the Corporation:


	June 30, 2015						December 31, 2014
	Notional		Fair Value				Notional		Fair Value
	Amount		Asset		Liability		Amount		Asset		Liability
Gross Derivatives
Subject to master netting arrangements:
Interest rate contracts – designated	$	200,000	$	1,867	$	1,869	$	200,000	$	2,109	$	2,330
Interest rate swaps – not designated		1,080,889		491		40,943		972,002		140		43,655
Equity contracts – not designated		1,210		17		—		1,210		47		—

Total subject to master netting arrangements		1,282,099		2,375		42,812		1,173,212		2,296		45,985
Not subject to master netting arrangements:
Interest rate swaps – not designated		1,080,889		40,664		377		972,002		43,602		128
Credit risk contracts – not designated		102,700		10		114		68,632		—		—
Equity contracts – not designated		1,210		—		16		1,210		—		47

Total not subject to master netting arrangements		1,184,799		40,674		507		1,041,844		43,602		175

	$	2,466,898	$	43,049	$	43,319	$	2,215,056	$	45,898	$	46,160

Derivatives Designated as Hedging Instruments under GAAP

Interest Rate Contracts. The Corporation entered into interest rate derivative agreements to modify the interest rate characteristics of designated commercial loans from variable rate to fixed rate in order to reduce the impact of changes in future cash flows due to market interest rate changes. These agreements are designated as cash flow hedges (i.e., hedging the exposure to variability in expected future cash flows). The effective portion of the derivative’s gain or loss is initially reported as a component of other comprehensive income and subsequently reclassified into earnings in the same line item associated with the forecasted transaction when the forecasted transaction affects earnings. The ineffective portion of the gain or loss is reported in earnings immediately.

At June 30, 2015 and December 31, 2014, the notional amount of these interest rate derivative agreements totaled $200,000. Fair values included in other assets and other liabilities on the consolidated balance sheet applicable to these agreements amounted to $1,867 and $1,869, respectively, at June 30, 2015, and $2,109 and $2,330, respectively, at December 31, 2014. For the six months ended June 30, 2015, the amount reclassified from accumulated other comprehensive income (AOCI) to interest income on loans and leases totaled $1,623 ($1,055 net of tax).

As of June 30, 2015, the maximum length of time over which forecasted interest cash flows are hedged is eight years. In the twelve months that follow June 30, 2015, the Corporation expects to reclassify from the amount currently reported in AOCI net derivative gains of $2,817 ($1,831 net of tax), in association with interest received on the hedged loans. This amount could differ from amounts actually recognized due to changes in interest rates, hedge de-designations, and the addition of other hedges subsequent to June 30, 2015.

There were no components of derivative gains or losses excluded from the assessment of hedge effectiveness related to these cash flow hedges. For the six months ended June 30, 2015 and 2014, there was no hedge ineffectiveness. Also, during the six months ended June 30, 2015 and 2014, there were no gains or losses from cash flow hedge derivatives reclassified to earnings because it became probable that the original forecasted transactions would not occur.

Derivatives Not Designated as Hedging Instruments under GAAP

Interest Rate Swaps. The Corporation enters into interest rate swap agreements to meet the financing, interest rate and equity risk management needs of qualifying commercial loan customers. These agreements provide the customer the ability to convert from variable to fixed interest rates. The credit risk associated with derivatives executed with customers is essentially the same as that involved in extending loans and is subject to normal credit policies and monitoring. Swap derivative transactions with customers are not subject to enforceable master netting arrangements and are generally secured by rights to non-financial collateral, such as real and personal property.

The Corporation enters into positions with a derivative counterparty in order to offset its exposure on the fixed components of the customer interest rate swap agreements. The Corporation seeks to minimize counterparty credit risk by entering into transactions only with high-quality financial dealer institutions. These arrangements meet the definition of derivatives, but are not designated as hedging instruments under ASC 815, Derivatives and Hedging. Substantially all contracts with dealers that require central clearing (generally, transactions since June 10, 2014) are novated to a SEC registered clearing agency who becomes the Corporation’s counterparty.

The notional amount of these customer derivative agreements and the offsetting derivative counterparty positions each totaled $1,080,889 at June 30, 2015. Fair values included in other assets and other liabilities on the consolidated balance sheet applicable to these agreements amounted to $41,155 and $41,320, respectively, at June 30, 2015. At December 31, 2014, the notional amount of these customer derivative agreements and the offsetting derivative counterparty positions each totaled $972,002. At December 31, 2014, fair values included in other assets and other liabilities on the consolidated balance sheet amounted to $43,742 and $43,783, respectively.

The interest rate swap agreement with the loan customer and with the counterparty is reported at fair value in other assets and other liabilities on the consolidated balance sheet with any resulting gain or loss recorded in current period earnings as other income or other expense.

Credit Risk Contracts. The Corporation purchases and sells credit protection under risk participation agreements to share with other counterparties some of the credit exposure related to interest rate derivative contracts or to take on credit exposure to generate revenue. The Corporation will make/receive payments under these agreements if a customer defaults on its obligation to perform under certain derivative swap contracts.

Risk participation agreements sold with notional amounts totaling $74,010 have remaining terms ranging from two to nine years. Under these agreements, the Corporation’s maximum exposure assuming a customer defaults on its obligation to perform under certain derivative swap contracts with third parties would be $114 at June 30, 2015 and $25 at December 31, 2014.

The fair values of risk participation agreements purchased and sold were not material at June 30, 2015 and December 31, 2014.

Counterparty Credit Risk

The Corporation is party to master netting arrangements with most of its swap derivative counterparties. Collateral, usually marketable securities and/or cash, is exchanged between the Corporation and its counterparties, and is generally subject to thresholds and transfer minimums. For swap transactions that require central clearing, the Corporation posts cash to its clearing agency. Collateral positions are valued daily, and adjustments to amounts received and pledged by the Corporation are made as appropriate to maintain proper collateralization for these transactions.

Certain master netting agreements contain provisions that, if violated, could cause the counterparties to request immediate settlement or demand full collateralization under the derivative instrument. If the Corporation had breached its agreements with its derivative counterparties it would be required to settle its obligations under the agreements at the termination value and would be required to pay an additional $1,974 and $1,862 as of June 30, 2015 and December 31, 2014, respectively, in excess of amounts previously posted as collateral with the respective counterparty.

The following table presents information about derivative assets and derivative liabilities that are subject to enforceable master netting arrangements as well as those not subject to enforceable master netting arrangements:


	Gross Amount		Gross Amounts Offset in the Balance Sheet		Net Amount Presented in the Balance Sheet
June 30, 2015
Derivative Assets
Subject to master netting arrangements:
Interest rate contracts
Designated	$	1,867		—	$	1,867
Not designated		491		—		491
Equity contracts – not designated		17		—		17
Not subject to master netting arrangements:
Interest rate contracts – not designated		40,664		—		40,664
Credit contracts – not designated		10		—		10

	$	43,049		—	$	43,049

Derivative Liabilities
Subject to master netting arrangements:
Interest rate contracts
Designated	$	1,869		—	$	1,869
Not designated		40,943		—		40,943
Not subject to master netting arrangements:
Interest rate contracts – not designated		377		—		377
Credit contracts – not designated		114		—		114
Equity contracts – not designated		16		—		16

	$	43,319		—	$	43,319

December 31, 2014
Derivative Assets
Subject to master netting arrangements:
Interest rate contracts
Designated	$	2,109		—	$	2,109
Not designated		140		—		140
Equity contracts – not designated		47		—		47
Not subject to master netting arrangements:
Interest rate contracts – not designated		43,602		—		43,602

	$	45,898		—	$	45,898

Derivative Liabilities
Subject to master netting arrangements:
Interest rate contracts
Designated	$	2,330		—	$	2,330
Not designated		43,655		—		43,655
Not subject to master netting arrangements:
Interest rate contracts – not designated		128		—		128
Equity contracts – not designated		47		—		47

	$	46,160		—	$	46,160

The following table presents a reconciliation of the net amounts of derivative assets and derivative liabilities presented in the balance sheet to the net amounts that would result in the event of offset:


			Amount Not Offset in the Balance Sheet
	Net Amount Presented in the Balance Sheet		Financial Instruments		Cash Collateral		Net Amount
June 30, 2015
Derivative Assets
Interest rate contracts:
Designated	$	1,867	$	519	$	1,348		—
Not designated		491		105		386		—
Equity contracts – not designated		17		17		—		—

	$	2,375	$	641	$	1,734		—

Derivative Liabilities
Interest rate contracts:
Designated	$	1,869	$	1,869	$	—	$	—
Not designated		40,943		24,793		14,388		1,762

	$	42,812	$	26,662	$	14,388	$	1,762

December 31, 2014
Derivative Assets
Interest rate contracts:
Designated	$	2,109	$	810	$	1,299		—
Not designated		140		138		2		—
Equity contracts – not designated		47		47		—		—

	$	2,296	$	995	$	1,301		—

Derivative Liabilities
Interest rate contracts:
Designated	$	2,330	$	2,330	$	—	$	—
Not designated		43,655		28,646		13,243		1,766

	$	45,985	$	30,976	$	13,243	$	1,766

The following table presents the effect of certain of the Corporation’s derivative financial instruments on the income statement:


	Income		Six Months Ended
	Statement		June 30,
	Location		2015			2014
Interest Rate Swaps		Other income	$	(123	)	$	1
Credit Risk Contracts		Other income		(105	)		—

Other

The Corporation has entered into interest rate lock commitments to originate residential mortgage loans held for sale and forward commitments to sell residential mortgage loans to secondary market investors. These arrangements are considered derivative instruments. The fair values of the Corporation’s rate lock commitments to customers and commitments with investors at June 30, 2015 and December 31, 2014 are not material.

COMMITMENTS, CREDIT RISK AND CONTINGENCIES

The Corporation has commitments to extend credit and standby letters of credit that involve certain elements of credit risk in excess of the amount stated in the consolidated balance sheet. The Corporation’s exposure to credit loss in the event of non-performance by the customer is represented by the contractual amount of those instruments. The credit risk associated with loan commitments and standby letters of credit is essentially the same as that involved in extending loans and leases to customers and is subject to normal credit policies. Since many of these commitments expire without being drawn upon, the total commitment amounts do not necessarily represent future cash flow requirements.

Following is a summary of off-balance sheet credit risk information:


	June 30, 2015		December 31, 2014
Commitments to extend credit	$	3,921,382	$	3,665,481
Standby letters of credit		108,436		121,186

At June 30, 2015, funding of 69.1% of the commitments to extend credit was dependent on the financial condition of the customer. The Corporation has the ability to withdraw such commitments at its discretion. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Based on management’s credit evaluation of the customer, collateral may be deemed necessary. Collateral requirements vary and may include accounts receivable, inventory, property, plant and equipment and income-producing commercial properties.

Standby letters of credit are conditional commitments issued by the Corporation that may require payment at a future date. The credit risk involved in issuing letters of credit is quantified on a quarterly basis, through the review of historical performance of the Corporation’s portfolios and allocated as a liability on the Corporation’s balance sheet.

Other Legal Proceedings

The Corporation and its subsidiaries are involved in various pending legal proceedings in which claims for monetary damages and other relief are asserted. These actions include claims brought against the Corporation and its subsidiaries where the Corporation or a subsidiary acted as one or more of the following: a depository bank, lender, underwriter, fiduciary, financial advisor, broker, agent, acquiror or was engaged in other business activities. Although the ultimate outcome for any asserted claim cannot be predicted with certainty, the Corporation believes that it and its subsidiaries have valid defenses for all asserted claims. Reserves are established for legal claims when losses associated with the claims are judged to be probable and the amount of the loss can be reasonably estimated.

Based on information currently available, advice of counsel, available insurance coverage and established reserves, the Corporation does not anticipate, at the present time, that the aggregate liability, if any, arising out of such legal proceedings will have a material adverse effect on the Corporation’s consolidated financial position. However, the Corporation cannot determine whether or not any claims asserted against it will have a material adverse effect on its consolidated results of operations in any future reporting period.

STOCK INCENTIVE PLANS

Restricted Stock

The Corporation issues restricted stock awards, consisting of both restricted stock and restricted stock units, to key employees under its Incentive Compensation Plans (Plans). The Corporation issues time-based awards and performance-based awards under these Plans, both of which are based on a three-year vesting period. The grant date fair value of the time-based awards is equal to the price of the Corporation’s common stock on the grant date. The fair value of the performance-based awards is based on a Monte-Carlo Simulation valuation of the Corporation’s common stock as of the grant date.

For the six months ended June 30, 2015 and 2014, the Corporation issued 401,510 and 357,341 restricted stock awards, respectively, with aggregated grant date fair values of $5,284 and $4,871 under these plans. For performance-based restricted stock awards granted, the amount of shares recipients will earn is variable based on the Corporation’s total stockholder return relative to a specified peer group of financial institutions over the three-year period. These market-based restricted stock units are included in the table below as if the recipients earned shares equal to 100% of the units issued. As of June 30, 2015, the Corporation had available up to 2,077,572 shares of common stock to issue under the Plans.

The unvested restricted stock awards are eligible to receive cash dividends or dividend equivalents which are ultimately used to purchase additional shares of stock and are subject to forfeiture if the requisite service period is not completed or the specified performance criteria are not met. These awards are subject to certain accelerated vesting provisions upon retirement, death, disability or in the event of a change of control as defined in the award agreements.

Share-based compensation expense related to restricted stock awards was $1,564 and $1,385 for the six months ended June 30, 2015 and 2014, the tax benefit of which was $548 and $485, respectively.

The following table summarizes certain information concerning restricted stock awards:


	Six Months Ended June 30,
	2015					2014
	Awards			Weighted Average Grant Price		Awards			Weighted Average Grant Price
Unvested awards outstanding at beginning of period		1,354,093		$	11.86		1,729,033		$	10.23
Granted		401,510			13.16		357,341			13.63
Net adjustment due to performance		(46,956	)		10.25		(87,512	)		11.41
Vested		(460,606	)		10.61		(698,121	)		8.77
Forfeited		(2,774	)		17.24		(32,909	)		10.99
Dividend reinvestment		18,359			14.13		22,501			12.74

Unvested awards outstanding at end of period		1,263,626			12.82		1,290,333			11.90

The total fair value of awards vested was $5,770 and $8,641 for the six months ended June 30, 2015 and 2014, respectively.

As of June 30, 2015, there was $8,141 of unrecognized compensation cost related to unvested restricted stock awards, including $65 that is subject to accelerated vesting under the Plan’s immediate vesting upon retirement provision for awards granted prior to the adoption of ASC 718, Compensation – Stock Compensation. The components of the restricted stock awards as of June 30, 2015 are as follows:


	Service- Based Awards		Performance- Based Awards		Total
Unvested awards		663,106		600,520		1,263,626
Unrecognized compensation expense	$	5,165	$	2,976	$	8,141
Intrinsic value	$	9,496	$	8,599	$	18,095
Weighted average remaining life (in years)		2.31		2.20		2.26

Stock Options

All outstanding stock options were assumed from acquisitions and are fully vested. Upon consummation of the Corporation’s acquisitions, all outstanding stock options issued by the acquired companies were converted into equivalent Corporation stock options. The Corporation issues shares of treasury stock or authorized but unissued shares to satisfy stock options exercised. Shares issued upon the exercise of stock options were 82,810 and 93,154 for the six months ended June 30, 2015 and 2014, respectively.

The following table summarizes certain information concerning stock option awards:


	Six Months Ended June 30,
	2015					2014
	Shares			Weighted Average Exercise Price		Shares			Weighted Average Exercise Price
Options outstanding at beginning of period		568,834		$	8.86		533,524		$	11.50
Assumed from acquisitions		—			—		304,785			5.77
Exercised		(82,810	)		5.57		(134,687	)		6.24
Forfeited		(2,182	)		4.34		(52,262	)		25.03

Options outstanding and exercisable at end of period		483,842			9.44		651,360			8.82

The intrinsic value of outstanding and exercisable stock options at June 30, 2015 was $2,255.

Warrants

In conjunction with its participation in the U.S. Department of the Treasury’s (UST) Capital Purchase Program (CPP), the Corporation issued to the UST a warrant to purchase up to 1,302,083 shares of the Corporation’s common stock. Pursuant to Section 13(H) of the Warrant to Purchase Common Stock, the number of shares of common stock issuable upon exercise of the warrant was reduced in half to 651,042 shares on June 16, 2009, the date the Corporation completed a public offering. The warrant, which expires in 2019, has an exercise price of $11.52 per share.

In conjunction with the Parkvale Financial Corporation (Parkvale) acquisition on January 1, 2012, the warrant issued by Parkvale to the UST under the CPP has been converted into a warrant to purchase up to 819,640 shares of the Corporation’s common stock. This warrant, which was recorded at its fair value on January 1, 2012, was sold at auction by the UST and was exercised at $5.81 per share during the second quarter of 2015.

In conjunction with the Annapolis Bancorp, Inc. (ANNB) acquisition on April 6, 2013, the warrant issued by ANNB to the UST under the CPP has been converted into a warrant to purchase up to 342,564 shares of the Corporation’s common stock at an exercise price of $3.57 per share. Subsequent adjustments related to actual dividends paid by the Corporation have increased the share amount of these warrants to 370,929, with a resulting lower exercise price of $3.30 per share as of June 30, 2015. The warrant, which was recorded at its fair value on April 6, 2013, expires in 2019.

RETIREMENT PLANS

The Corporation sponsors the Retirement Income Plan (RIP), a qualified noncontributory defined benefit pension plan that covered substantially all salaried employees hired prior to January 1, 2008. The RIP covers employees who satisfied minimum age and length of service requirements. The Corporation’s funding guideline has been to make annual contributions to the RIP each year, if necessary, such that minimum funding requirements have been met. The RIP was frozen as of December 31, 2010.

The Corporation also sponsors two supplemental non-qualified retirement plans. The ERISA Excess Retirement Plan provides retirement benefits equal to the difference, if any, between the maximum benefit allowable under the Internal Revenue Code and the amount that would be provided under the RIP, if no limits were applied. The Basic Retirement Plan (BRP) is applicable to certain officers whom the Board of Directors designates. Officers participating in the BRP receive a benefit based on a target benefit percentage based on years of service at retirement and a designated tier as determined by the Board of Directors. When a participant retires, the basic benefit under the BRP is a monthly benefit equal to the target benefit percentage times the participant’s highest average monthly cash compensation during five consecutive calendar years within the last ten calendar years of employment. This monthly benefit is reduced by the monthly benefit the participant receives from Social Security, the RIP, the ERISA Excess Retirement Plan and the annuity equivalent of the three percent automatic contributions to the qualified 401(k) defined contribution plan and the ERISA Excess Lost Match Plan. The BRP was frozen as of December 31, 2008. The ERISA Excess Retirement Plan was frozen as of December 31, 2010.

The net periodic benefit credit for the defined benefit plans includes the following components:


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2014			2015			2014
Service cost	$	17		$	16		$	34		$	32
Interest cost		1,477			1,596			2,954			3,192
Expected return on plan assets		(2,491	)		(2,487	)		(4,982	)		(4,974	)
Amortization:
Unrecognized net transition asset		—			(5	)		—			(10	)
Unrecognized prior service cost		2			2			4			4
Unrecognized loss		536			337			1,072			674

Net periodic pension credit	$	(459	)	$	(541	)	$	(918	)	$	(1,082	)

The Corporation’s subsidiaries participate in a qualified 401(k) defined contribution plan under which employees may contribute a percentage of their salary. Employees are eligible to participate upon their first day of employment. Under this plan, the Corporation matches 100% of the first six percent that the employee defers. Additionally, the Corporation may provide a performance-based company contribution of up to three percent if the Corporation exceeds annual financial goals. Prior to January 1, 2015, the Corporation matched 100% of the first four percent that the employee deferred, provided an automatic contribution of three percent of compensation at the end of the year and could make an additional performance-based company contribution of up to two percent if the Corporation achieved its performance goals for the plan year. The Corporation’s contribution expense was $3,961 and $4,962 for the six months ended June 30, 2015 and 2014, respectively.

The Corporation also sponsors an ERISA Excess Lost Match Plan for certain officers. This plan provides retirement benefits equal to the difference, if any, between the maximum benefit allowable under the Internal Revenue Code and the amount that would have been provided under the qualified 401(k) defined contribution plan, if no limits were applied.

INCOME TAXES

The Corporation bases its provision for income taxes upon income before income taxes, adjusted for the effect of certain tax-exempt income and non-deductible expenses. In addition, the Corporation reports certain items of income and expense in different periods for financial reporting and tax return purposes. The Corporation recognizes the tax effects of these temporary differences currently in the deferred income tax provision or benefit. The Corporation computes deferred tax assets or liabilities based upon the differences between the financial statement and income tax bases of assets and liabilities using the applicable marginal tax rate.

The Corporation evaluates the probability that it will ultimately realize the full value of its deferred tax assets. Realization of the Corporation’s deferred tax assets is dependent upon a number of factors including the existence of any cumulative losses in prior periods, the amount of taxes paid in available carry-back periods, expectations for future earnings, applicable tax planning strategies and assessment of current and future economic and business conditions. The Corporation establishes a valuation allowance when it is “more likely than not” that the Corporation will not be able to realize a benefit from its deferred tax assets, or when future deductibility is uncertain.

At June 30, 2015, the Corporation anticipates that it will not utilize some of its state net operating loss carryforwards and other net deferred tax assets at certain of its subsidiaries and has recorded a valuation allowance against these deferred tax assets. The Corporation believes that, except for the portion which is covered by a valuation allowance, it is more likely than not the Corporation will realize the benefits of its deferred tax assets, net of the valuation allowance, at June 30, 2015, based on the levels of projected taxable income of some of its entities.

COMPREHENSIVE INCOME

The components of comprehensive income, net of related tax, are as follows:


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2014			2015			2014
Net income	$	40,131		$	34,831		$	80,474		$	69,355
Other comprehensive (loss) income:
Securities available for sale:
Unrealized (losses) gains arising during the period, net of tax (benefit) expense of $(3,870), $2,935, $652 and $11,950		(7,188	)		5,451			1,212			22,193
Reclassification adjustment for gains included in net income, net of tax expense of $5, $272, $2 and $3,583		(9	)		(504	)		(3	)		(6,654	)
Derivative instruments:
Unrealized (losses) gains arising during the period, net of tax (benefit) expense of $(860), $1,537, $645 and $2,939		(1,597	)		2,855			1,196			5,458
Reclassification adjustment for gains included in net income, net of tax expense of $285, $290, $568 and $575		(529	)		(538	)		(1,055	)		(1,067	)
Pension and postretirement benefit obligations:
Unrealized gains arising during the period, net of tax expense of $189, $117, $377 and $234		350			218			700			435

Other comprehensive (loss) income		(8,973	)		7,482			2,050			20,365

Comprehensive income	$	31,158		$	42,313		$	82,524		$	89,720

The amounts reclassified from AOCI related to securities available for sale are included in net securities gains on the Consolidated Statements of Comprehensive Income, while the amounts reclassified from AOCI related to derivative instruments are included in interest income on loans and leases on the Consolidated Statements of Comprehensive Income.

The tax (benefit) expense amounts reclassified from AOCI in connection with the securities available for sale and derivative instruments reclassifications are included in income taxes on the Consolidated Statements of Comprehensive Income.

The following table presents changes in AOCI, net of tax, by component:


	Unrealized Net Gains (Losses) on Securities Available for Sale			Unrealized Net Gains (Losses) on Derivative Instruments			Unrecognized Pension and Postretirement Obligations			Total
Six Months Ended June 30, 2015
Balance at beginning of period	$	(440	)	$	(143	)	$	(45,420	)	$	(46,003	)
Other comprehensive income before reclassifications		1,212			1,196			700			3,108
Amounts reclassified from AOCI		(3	)		(1,055	)		—			(1,058	)

Net current period other comprehensive income		1,209			141			700			2,050

Balance at end of period	$	769		$	(2	)	$	(44,720	)	$	(43,953	)

EARNINGS PER COMMON SHARE

Basic earnings per common share is calculated by dividing net income available to common stockholders by the weighted average number of shares of common stock outstanding net of unvested shares of restricted stock.

Diluted earnings per common share is calculated by dividing net income available to common stockholders by the weighted average number of shares of common stock outstanding, adjusted for the dilutive effect of potential common shares issuable for stock options, warrants and restricted shares, as calculated using the treasury stock method. Adjustments to the weighted average number of shares of common stock outstanding are made only when such adjustments dilute earnings per common share.

The following table sets forth the computation of basic and diluted earnings per common share:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
Net income	$	40,131	$	34,831	$	80,474	$	69,355
Less: Preferred stock dividends		2,010		2,010		4,020		4,332

Net income available to common stockholders	$	38,121	$	32,821	$	76,454	$	65,023

Basic weighted average common shares outstanding		174,940,911		166,185,080		174,548,775		164,196,783
Net effect of dilutive stock options, warrants, restricted stock and convertible debt		1,420,929		1,682,528		1,547,420		1,731,577

Diluted weighted average common shares outstanding		176,361,840		167,867,608		176,096,195		165,928,360

Earnings per common share:
Basic	$	0.22	$	0.20	$	0.44	$	0.40

Diluted	$	0.22	$	0.20	$	0.43	$	0.39

For the three months ended June 30, 2015 and 2014, 17,918 and 30,649 shares of common stock, respectively, related to stock options and warrants were excluded from the computation of diluted earnings per common share because the exercise price of the shares was greater than the average market price of the common shares and, therefore, the effect would be anti-dilutive. For the six months ended June 30, 2015 and 2014, 20,984 and 41,023 shares of common stock, respectively, related to stock options and warrants were excluded from the computation of diluted earnings per common share because the exercise price of the shares was greater than the average market price of the common shares and, therefore, the effect would be anti-dilutive.

CASH FLOW INFORMATION

Following is a summary of supplemental cash flow information:


	2015		2014
Six Months Ended June 30
Interest paid on deposits and other borrowings	$	23,621	$	21,366
Income taxes paid		21,000		1,000
Transfers of loans to other real estate owned		4,744		6,660
Financing of other real estate owned sold		222		259

BUSINESS SEGMENTS

The Corporation operates in four reportable segments: Community Banking, Wealth Management, Insurance and Consumer Finance.

•

The Community Banking segment provides commercial and consumer banking services. Commercial banking solutions include corporate banking, small business banking, investment real estate financing, international banking, business credit, capital markets and lease financing. Consumer banking products and services include deposit products, mortgage lending, consumer lending and a complete suite of mobile and online banking services.

•

The Wealth Management segment provides a broad range of personal and corporate fiduciary services including the administration of decedent and trust estates. In addition, it offers various alternative products, including securities brokerage and investment advisory services, mutual funds and annuities.

•

The Insurance segment includes a full-service insurance agency offering all lines of commercial and personal insurance through major carriers. The Insurance segment also includes a reinsurer.

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The Consumer Finance segment primarily makes installment loans to individuals and purchases installment sales finance contracts from retail merchants. The Consumer Finance segment activity is funded through the sale of the Corporation’s subordinated notes at the finance company’s branch offices.

The following tables provide financial information for these segments of the Corporation. The information provided under the caption “Parent and Other” represents operations not considered to be reportable segments and/or general operating expenses of the Corporation, and includes the parent company, other non-bank subsidiaries and eliminations and adjustments which are necessary for purposes of reconciliation to the consolidated amounts.


	Community Banking		Wealth Management		Insurance			Consumer Finance		Parent and Other			Consolidated
At or for the Three Months Ended June 30, 2015
Interest income	$	123,967	$	—	$	22		$	9,778	$	1,681		$	135,448
Interest expense		10,166		—		—			855		660			11,681
Net interest income		113,801		—		22			8,923		1,021			123,767
Provision for credit losses		6,945		—		—			1,964		(45	)		8,864
Non-interest income		28,313		9,199		2,753			732		(1,245	)		39,752
Non-interest expense		78,339		6,931		3,581			4,994		655			94,500
Intangible amortization		1,830		68		101			—		—			1,999
Income tax expense (benefit)		17,009		789		(312	)		1,038		(499	)		18,025
Net income (loss)		37,991		1,411		(595	)		1,659		(335	)		40,131
Total assets		16,412,240		21,255		22,523			186,134		(43,551	)		16,598,601
Total intangibles		851,250		10,584		12,747			1,809		—			876,390
At or for the Three Months Ended June 30, 2014
Interest income	$	113,161	$	—	$	25		$	9,578	$	1,676		$	124,440
Interest expense		8,730		—		—			809		709			10,248
Net interest income		104,431		—		25			8,769		967			114,192
Provision for credit losses		8,425		—		—			1,778		202			10,405
Non-interest income		27,420		8,033		2,999			741		(3	)		39,190
Non-interest expense		75,281		6,452		2,911			4,880		599			90,123
Intangible amortization		2,288		72		101			—		—			2,461
Income tax expense (benefit)		14,048		548		8			1,097		(139	)		15,562
Net income (loss)		31,809		961		4			1,755		302			34,831
Total assets		14,842,988		21,828		20,785			182,401		(48,755	)		15,019,247
Total intangibles		830,809		10,864		10,324			1,809		—			853,806


	Community Banking		Wealth Management		Insurance			Consumer Finance		Parent and Other			Consolidated
At or for the Six Months Ended June 30, 2015
Interest income	$	246,085	$	—	$	45		$	19,371	$	3,316		$	268,817
Interest expense		20,107		—		—			1,715		1,307			23,129
Net interest income		225,978		—		45			17,656		2,009			245,688
Provision for credit losses		13,272		—		—			3,538		190			17,000
Non-interest income		55,614		17,586		6,346			1,408		(3,020	)		77,934
Non-interest expense		155,418		13,424		7,751			9,802		645			187,040
Intangible amortization		3,777		136		201			—		—			4,114
Income tax expense (benefit)		32,940		1,447		(538	)		2,187		(1,042	)		34,994
Net income (loss)		76,185		2,579		(1,023	)		3,537		(804	)		80,474
Total assets		16,412,240		21,255		22,523			186,134		(43,551	)		16,598,601
Total intangibles		851,250		10,584		12,747			1,809		—			876,390
At or for the Six Months Ended June 30, 2014
Interest income	$	219,852	$	—	$	50		$	18,943	$	3,475		$	242,320
Interest expense		16,978		—		—			1,655		1,670			20,303
Net interest income		202,874		—		50			17,288		1,805			222,017
Provision for credit losses		13,721		—		—			3,235		455			17,411
Non-interest income		59,333		15,356		7,209			1,401		(2,039	)		81,260
Non-interest expense		152,147		12,744		5,957			9,817		1,341			182,006
Intangible amortization		4,398		144		202			—		—			4,744
Income tax expense (benefit)		27,391		899		393			2,170		(1,092	)		29,761
Net income (loss)		64,550		1,569		707			3,467		(938	)		69,355

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