10-Q

UNITED STATES OF AMERICA
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)
	☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934
	For the Quarterly Period Ended March 31, 2016 OR
	☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File Number: 000-11486

ConnectOne Bancorp, Inc.
(Exact Name of Registrant as Specified in Its Charter)

New Jersey	52-1273725
(State or Other Jurisdiction of	(IRS Employer
Incorporation or Organization)	Identification No.)

301 Sylvan Avenue
Englewood Cliffs, New Jersey 07632
(Address of Principal Executive Offices) (Zip Code)

201-816-8900
(Registrant’s Telephone Number, Including Area Code)

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

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or 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):

Large accelerated filer  ☐	Accelerated filer  ☒	Non-accelerated filer  ☐	Smaller reporting company  ☐
		(Do not check if smaller
		reporting company)

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

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

Common Stock, no par value:	30,179,900 shares
(Title of Class)	(Outstanding as of May 6, 2016)

Table of Contents

		Page
PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Statements of Condition at March 31, 2016 (unaudited) and December 31, 2015	3
	Consolidated Statements of Income for the three months ended March 31, 2016 and 2015 (unaudited)	4
	Consolidated Statements of Comprehensive Income for the three months ended March 31, 2016 and 2015
	(unaudited)	5
	Consolidated Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2016 (unaudited)
	and for the year ended December 31, 2015	6
	Consolidated Statements of Cash Flows for the three months ended March 31, 2016 and 2015 (unaudited)	7
	Notes to Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	42
Item 3.	Qualitative and Quantitative Disclosures about Market Risks	54
Item 4.	Controls and Procedures	55
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	56
Item 1a.	Risk Factors	56
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	57
Item 3.	Defaults Upon Senior Securities	57
Item 4.	Mine Safety Disclosures	57
Item 5.	Other Information	57
Item 6.	Exhibits	58
SIGNATURES

2

Item 1. Financial Statements

CONNECTONE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CONDITION

	March 31,		December 31,
(in thousands, except for share data)	2016		2015
	(unaudited)
ASSETS
Cash and due from banks	$	34,603	$	31,291
Interest-bearing deposits with banks		83,656		169,604
Cash and cash equivalents		118,259		200,895
Investment securities:
Available-for-sale		191,331		195,770
Held-to-maturity (fair value of $229,470 and $230,558)		219,373		224,056
Loans receivable		3,263,813		3,099,007
Less: Allowance for loan and lease losses		29,074		26,572
Net loans receivable		3,234,739		3,072,435
Investment in restricted stock, at cost		31,487		32,612
Bank premises and equipment, net		22,652		22,333
Accrued interest receivable		12,604		12,545
Bank-owned life insurance		79,412		78,801
Other real estate owned		1,696		2,549
Goodwill		145,909		145,909
Core deposit intangibles		3,691		3,908
Other assets		29,847		24,096
Total assets	$	4,091,000	$	4,015,909
LIABILITIES
Deposits:
Noninterest-bearing	$	614,507	$	650,775
Interest-bearing		2,278,564		2,140,191
Total deposits		2,893,071		2,790,966
Borrowings		646,501		671,587
Subordinated debentures (net of $763 and $812 in debt issuance costs)		54,392		54,343
Other liabilities		22,309		21,669
Total liabilities		3,616,273		3,538,565
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY
Preferred stock, $1,000 liquidation value per share, authorized 5,000,000 shares; issued and outstanding
11,250 shares of Series B preferred stock at December 31, 2015; total liquidation value of $11,250 at
December 31, 2015		-		11,250
Common stock, no par value, authorized 50,000,000 shares; issued 32,227,000 shares at March 31, 2016
and 32,149,585 at December 31, 2015; outstanding 30,163,078 shares at March 31, 2016 and 30,085,663
at December 31, 2015		374,287		374,287
Additional paid-in capital		9,324		8,527
Retained earnings		112,663		104,606
Treasury stock, at cost (2,063,922 common shares at March 31, 2016 and December 31, 2015)		(16,717)		(16,717)
Accumulated other comprehensive loss		(4,830)		(4,609)
Total stockholders’ equity		474,727		477,344
Total liabilities and stockholders’ equity	$	4,091,000	$	4,015,909

See accompanying notes to unaudited consolidated financial statements.

3

CONNECTONE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)

	Three Months Ended
	March 31,
(dollars in thousands, except for per share data)	2016		2015
Interest income
Interest and fees on loans	$	35,017	$	29,314
Interest and dividends on investment securities:
Taxable		2,140		2,910
Tax-exempt		883		883
Dividends		352		220
Interest on federal funds sold and other short-term investments		134		43
Total interest income		38,526		33,370
Interest expense
Deposits		3,939		3,025
Borrowings		3,267		2,053
Total interest expense		7,206		5,078
Net interest income		31,320		28,292
Provision for loan and lease losses		3,000		1,825
Net interest income after provision for loan and lease losses		28,320		26,467
Noninterest income
Annuities and insurance commissions		40		86
Bank-owned life insurance		612		386
Net gains on sale of loans held for sale		35		114
Deposit, loan and other income		515		463
Net gains on sale of investment securities		-		506
Total other income		1,202		1,555
Noninterest expense
Salaries and employee benefits		7,599		6,628
Occupancy and equipment		2,247		2,082
FDIC insurance		595		560
Professional and consulting		711		494
Marketing and advertising		184		194
Data processing		1,024		900
Amortization of core deposit intangible		217		241
Other expenses		1,776		1,532
Total other expense		14,353		12,631
Income before income tax expense		15,169		15,391
Income tax expense		4,778		5,012
Net Income		10,391		10,379
Less: Preferred stock dividends		22		28
Net income available to common stockholders	$	10,369	$	10,351
Earnings per common share
Basic	$	0.35	$	0.35
Diluted	$	0.34	$	0.34
Weighted average common shares outstanding
Basic		29,995,870		29,757,316
Diluted		30,257,676		30,149,469
Dividends per common share	$	0.075	$	0.075

See accompanying notes to unaudited consolidated financial statements.

4

CONNECTONE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited)

	Three Months Ended
	March 31,
(in thousands)	2016		2015
Net income	$	10,391	$	10,379
Other comprehensive income (loss):
Unrealized gains and losses on securities:
Unrealized holding gains on available-for-sale securities arising
during the period		895		1,509
Tax effect		(357)		(595)
Net of tax		538		914
Reclassification adjustment for realized gains included in net
income		-		(506)
Tax effect		-		207
Net of tax		-		(299)
Amortization of unrealized net losses on held-to-maturity
securities transferred from available-for-sale securities		51		65
Tax effect		(20)		(25)
Net of tax		31		40
Unrealized losses on cash flow hedge		(1,437)		(534)
Tax effect		587		218
Net of tax		(850)		(316)
Unrealized pension plan gains and losses:
Unrealized pension plan (losses) gains before reclassifications		(1)		634
Tax effect		-		(259)
Net of tax		(1)		375
Reclassification adjustment for realized losses included in net
income		102		108
Tax effect		(41)		(44)
Net of tax		61		64
Total other comprehensive (loss) income		(221)		778
Total comprehensive income	$	10,170	$	11,157

See accompanying notes to unaudited consolidated financial statements.

5

CONNECTONE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(unaudited)

											Accumulated
					Additional						Other		Total
	Preferred		Common		Paid In		Retained		Treasury		Comprehensive		Stockholders’
(dollars in thousands, except for per share data)	Stock		Stock		Capital		Earnings		Stock		Loss		Equity
Balance as of December 31, 2014	$	11,250	$	374,287	$	6,015	$	72,398	$	(16,717)	$	(1,014)	$	446,219
Net income		-		-		-		10,379		-		-		10,379
Other comprehensive income, net of tax		-		-		-		-		-		778		778
Dividend on series B preferred stock		-		-		-		(28)		-		-		(28)
Cash dividends declared on common stock
($0.075 per share)		-		-		-		(2,223)		-		-		(2,223)
Exercise of stock options (110,500 shares)		-		-		590		-		-		-		590
Restricted stock grants (59,466 shares)		-		-		-		-		-		-		-
Stock-based compensation		-		-		479		-		-		-		479
Balance as of March 31, 2015	$	11,250	$	374,287	$	7,084	$	80,526	$	(16,717)	$	(236)	$	456,194
Balance as of December 31, 2015	$	11,250	$	374,287	$	8,527	$	104,606	$	(16,717)	$	(4,609)	$	477,344
Net income		-		-		-		10,391		-		-		10,391
Other comprehensive loss, net of tax		-		-		-		-		-		(221)		(221)
Dividend on series B preferred stock		-		-		-		(22)		-		-		(22)
Cash dividends declared on common stock
($0.075 per share)		-		-		-		(2,312)		-		-		(2,312)
Redemption of preferred stock		(11,250)		-		-		-		-		-		(11,250)
Exercise of stock options (5,495 shares)		-		-		42		-		-		-		42
Restricted stock grants (71,920 shares)		-		-		-		-		-		-		-
Stock-based compensation		-		-		755		-		-		-		755
Balance as of March 31, 2016	$	-	$	374,287	$	9,324	$	112,663	$	(16,717)	$	(4,830)	$	474,727

See accompanying notes to unaudited consolidated financial statements.

6

CONNECTONE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

	Three Months Ended
	March 31,
(in thousands)	2016		2015
Cash flows from operating activities
Net income	$	10,391	$	10,379
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of premises and equipment		653		799
Provision for loan and lease losses		3,000		1,825
Amortization of intangibles		217		241
Net accretion of loans		(1,174)		(1,442)
Accretion on bank premises		(31)		(26)
Accretion on deposits		(75)		(191)
Accretion on borrowings		(86)		(143)
Stock-based compensation		755		479
Gains on sales of investment securities, net		-		(506)
Gains on sale of loans held for sale, net		(35)		(114)
Loans originated for resale		(1,916)		(8,468)
Proceeds from sale of loans held for sale		1,951		7,190
Net loss on sale of other real estate owned		115		112
Increase in cash surrender value of bank-owned life insurance		(612)		(386)
Amortization of premiums and accretion of discounts on investments securities, net		417		518
(Increase) decrease in accrued interest receivable		(58)		187
Increase in other assets		(7,137)		(49)
Increase (decrease) in other liabilities		960		(2,388)
Net cash provided by operating activities		7,335		8,017
Cash flows from investing activities
Investment securities available-for-sale:
Purchases		(19,135)		(1,543)
Sales		-		9,537
Maturities, calls and principal repayments		24,295		6,673
Investment securities held-to-maturity:
Purchases		(1,000)		(9,986)
Maturities and principal repayments		5,439		2,749
Net redemptions (purchases) of restricted investment in bank stocks		1,125		(1,339)
Net increase in loans		(164,130)		(100,708)
Purchases of premises and equipment		(941)		(478)
Proceeds from sale of other real estate owned		738		126
Net cash used in investing activities		(153,609)		(94,969)
Cash flows from financing activities
Net increase in deposits		102,180		20,595
Advances of FHLB borrowings		50,000		90,101
Repayments of FHLB borrowings		(75,000)		(60,363)
Cash dividends paid on common stock		(2,312)		(2,247)
Cash dividends paid on preferred stock		(22)		(28)
Redemption of preferred stock		(11,250)		-
Proceeds from exercise of stock options		42		590
Net cash provided by financing activities		63,638		48,648
Net change in cash and cash equivalents		(82,636)		(38,304)
Cash and cash equivalents at beginning of period		200,895		126,847
Cash and cash equivalents at end of period	$	118,259	$	88,543
Supplemental disclosures of cash flow information
Cash payments for:
Interest paid on deposits and borrowings	$	6,492	$	4,724
Income taxes	$	10,235	$	5,500

See accompanying notes to unaudited consolidated financial statements.

7

CONNECTONE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Note 1. Nature of Operations and Principles of Consolidation

The consolidated financial statements of ConnectOne Bancorp, Inc. (the “Parent Corporation”) are prepared on an accrual basis and include the accounts of the Parent Corporation and its wholly-owned subsidiary, ConnectOne Bank (the “Bank” and, collectively with the Parent Corporation and the Parent Corporation’s other direct and indirect subsidiaries, the “Company”). All significant intercompany accounts and transactions have been eliminated from the accompanying consolidated financial statements.

The Bank is a community-based, full-service New Jersey-chartered commercial bank that was founded in 2005. The Bank operates from its headquarters located at 301 Sylvan Avenue in the Borough of Englewood Cliffs, Bergen County, New Jersey and through its twenty other banking offices. Substantially all loans are secured by specific items of collateral including business assets, consumer assets, and commercial and residential real estate. Commercial loans are expected to be repaid from cash flow from business operations. There are no significant concentrations of loans to any one industry or client. However, the clients’ ability to repay their loans is dependent on the cash flows, real estate and general economic conditions in the area.

The preceding unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X, and, accordingly, do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. However, in the opinion of management, all adjustments (consisting only of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2016 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2016, or for any other interim period. The Company’s 2015 Annual Report on Form 10-K should be read in conjunction with these financial statements.

In preparing the consolidated financial statements, management has made estimates and assumptions that affect the reported amounts of assets and liabilities as of the dates of the consolidated statements of condition and that affect the results of operations for the periods presented. Actual results could differ significantly from those estimates.

The consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). Some items in the prior year financial statements were reclassified to conform to current presentation. Reclassifications had no effect on prior year net income or stockholders’ equity.

Note 2. New Authoritative Accounting Guidance

ASU No. 2014-12, "Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period ("ASU 2014-12"). ASU 2014-12 requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant date fair value of the award. This update further clarifies that compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. The Company adopted ASU 2014-12 effective on January 1, 2016 and is not expected to have a significant impact on the Company's consolidated financial statements.

ASU No. 2015-03, "Interest-Imputation of Interest (Subtopic 835-30) Simplifying the Presentation of Debt Issuance Costs" requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in the ASU No. 2015-03. The Company adopted ASU 2015-03 effective on January 1, 2016 and is not expected to have a significant impact on the Company's consolidated financial statements.

ASU No. 2015-12, "Plan Accounting: Defined Benefit Pension Plans (Topic 960): Defined Contribution Pension Plans, (Topic 962): Health and Welfare Benefit Plans, (Topic 965): (Part I) Fully Benefit-Responsive Investment Contracts, (Part II) Plan Investment Disclosures, (Part III) Measurement Date Practical Expedient." ASU No. 2015-12 simplifies accounting for employee benefit plans as follows: (i) fully benefit-responsive investment contracts are now to be measured, presented and disclosed at contract value, (ii) the requirement to disclose investments that represent 5 percent or more of net assets available for benefits has been eliminated, (iii) the net appreciation or depreciation in investments for the period should be presented in the aggregate, but is no longer required to be disaggregated and disclosed by general type, (iv) if an investment is measured using the net asset value per share (or its equivalent) practical expedient in Topic 820, and that investment is in a fund that files a U.S. Department of Labor Form 5500, Annual Return/Report of Employee Benefit Plan, as a direct filing entity, disclosure of that investment’s strategy is no longer required, and (v) allows employers to measure (as a practical expedient) benefit plan assets on a month-end date nearest to the employer’s fiscal year end when the fiscal period does not coincide with a month end. ASU No. 2015-12 is effective for the Company on January 1, 2016 and is not expected to have a significant impact on the Company’s consolidated financial statements.

ASU No. 2016-02, “Leases (Topic 842)” requires the recognition of a right of use asset and related lease liability by lessees for leases classified as operating leases under current GAAP. Topic 842, which replaces the current guidance under Topic 840, retains a distinction between finance leases and operating leases. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee also will not significantly change from current GAAP. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize right of use assets and lease liabilities. Topic 842 will be effective for the Company for reporting periods beginning January 1, 2019, with an early adoption permitted. The Company must apply a modified retrospective transition approach for the applicable leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Management is currently evaluating the impact of Topic 842 on the Company’s consolidated financial statements.

8

CONNECTONE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Note 3. Earnings per Common Share

Basic earnings per common share is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding. Diluted EPS includes any additional common shares as if all potentially dilutive common shares were issued (e.g., stock options). The Company’s weighted average common shares outstanding for diluted EPS include the effect of stock options and restricted stock awards outstanding using the Treasury Stock Method, which are not included in the calculation of basic EPS.

Earnings per common share have been computed as follows:

	Three Months Ended
	March 31,
(in thousands, except for per share data)	2016		2015
Net income	$	10,391	$	10,379
Preferred stock dividends		(22)		(28)
Net income available to common stockholders	$	10,369	$	10,351
Basic weighted average common shares outstanding		29,996		29,757
Effect of dilutive options		262		392
Diluted weighted average common shares outstanding		30,258		30,149
Earnings per common share:
Basic	$	0.35	$	0.35
Diluted	$	0.34	$	0.34

Note 4. Investment Securities

The Company’s investment securities are classified as available-for-sale and held-to-maturity at March 31, 2016 and December 31, 2015. Investment securities available-for-sale are reported at fair value with unrealized gains or losses included in equity, net of tax. Accordingly, the carrying value of such securities reflects their fair value as of March 31, 2016. Fair value is based upon either quoted market prices, or in certain cases where there is limited activity in the market for a particular instrument, assumptions are made to determine their fair value. See Note 7 of the Notes to Consolidated Financial Statements for a further discussion.

Transfers of debt securities from the available-for-sale category to the held-to-maturity category are made at fair value at the date of transfer. The unrealized holding gain or loss at the date of transfer remains in accumulated other comprehensive income and in the carrying value of the held-to-maturity investment security. Premiums or discounts on investment securities are amortized or accreted using the effective interest method over the life of the security as an adjustment of yield. Unrealized holding gains or losses that remain in accumulated other comprehensive income are amortized or accreted over the remaining life of the security as an adjustment of yield, offsetting the related amortization of the premium or accretion of the discount.

9

CONNECTONE BANCORP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Note 4. Investment Securities

The following tables present information related to the Company’s investment securities at March 31, 2016 and December 31, 2015 (dollars in thousands):

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
March 31, 2016	Cost		Gains		Losses		Value
Investment securities available-for-sale
Federal agency obligations	$	31,370	$	486	$	(29)	$	31,827
Residential mortgage pass-through securities		47,404		1,162		(21)		48,545
Commercial mortgage pass-through securities		2,965		88		-		3,053
Obligations of U.S. states and political subdivisions		9,642		164		-		9,806
Trust preferred securities		16,089		440		(350)		16,179
Corporate bonds and notes		40,771		873		(256)		41,388
Asset-backed securities		18,682		-		(528)		18,154
Certificates of deposit		1,496		20		-		1,516
Equity securities		376		29		(28)		377
Other securities		20,490		84		(88)		20,486
Total securities available-for-sale	$	189,285	$	3,346	$	(1,300)	$	191,331
			Gross		Gross
	Amortized		Unrecognized		Unrecognized		Fair
	Cost		Gains		Losses		Value
Investment securities held-to-maturity
U.S. Treasury and agency securities	$	28,523	$	1,890	$	-	$	30,413
Federal agency obligations		31,567		700		(8)		33,259
Residential mortgage-backed securities		3,489		28		(15)		3,502
Commercial mortgage-backed securities		1,317		30		-		1,347
Obligations of U.S. states and political divisions		117,416		6,208		-		123,624
Corporate bonds and notes		37,061		1,396		(132)		38,325
Total securities held-to-maturity	$	219,373	$	10,252	$	(155)	$	229,470
Total investment securities	$	408,658	$	13,598	$	(1,455)	$	420,801

10

CONNECTONE BANCORP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Note 4. Investment Securities – (continued)

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
December 31, 2015	Cost		Gains		Losses		Value
Investment securities available-for-sale
Federal agency obligations	$	29,062	$	142	$	(58)	$	29,146
Residential mortgage pass-through securities		44,155		803		(48)		44,910
Commercial mortgage pass-through securities		2,981		-		(9)		2,972
Obligations of U.S. states and political subdivisions		8,188		169		-		8,357
Trust preferred securities		16,088		398		(231)		16,255
Corporate bonds and notes		53,566		702		(292)		53,976
Asset-backed securities		20,005		18		(298)		19,725
Certificates of deposit		1,895		18		(8)		1,905
Equity securities		376		21		(23)		374
Other securities		18,303		-		(153)		18,150
Total securities available-for-sale	$	194,619	$	2,271	$	(1,120)	$	195,770
			Gross		Gross
	Amortized		Unrecognized		Unrecognized		Fair
	Cost		Gains		Losses		Value
Investment securities held-to-maturity
U.S. Treasury and agency securities	$	28,471	$	755	$	-	$	29,226
Federal agency obligations		33,616		280		(119)		33,777
Residential mortgage-backed securities		3,805		11		(6)		3,810
Commercial mortgage-backed securities		4,110		27		(2)		4,135
Obligations of U.S. states and political divisions		118,015		5,001		(3)		123,013
Corporate bonds and notes		36,039		719		(161)		36,597
Total securities held-to-maturity	$	224,056	$	6,793	$	(291)	$	230,558
Total investment securities	$	418,675	$	9,064	$	(1,411)	$	426,328

The following table presents information for investment securities at March 31, 2016, based on scheduled maturities. Actual maturities can be expected to differ from scheduled maturities due to prepayment or early call options of the issuer.

	March 31, 2016
	Amortized		Fair
	Cost		Value
	(in thousands)
Investment securities available-for-sale:
Due in one year or less	$	10,948	$	10,967
Due after one year through five years		15,800		16,287
Due after five years through ten years		37,582		37,795
Due after ten years		53,720		58,821
Residential mortgage pass-through securities		47,404		48,545
Commercial mortgage pass-through securities		2,965		3,053
Equity securities		376		377
Other securities		20,490		20,486
Total	$	189,285	$	191,331
Investment securities held-to-maturity:
Due in one year or less	$	1,000	$	1,000
Due after one year through five years		14,561		14,907
Due after five years through ten years		85,428		90,182
Due after ten years		113,578		118,532
Residential mortgage pass-through securities		3,489		3,502
Commercial mortgage pass-through securities		1,317		1,347
Total	$	219,373	$	229,470
Total investment securities	$	408,658	$	420,801

11

CONNECTONE BANCORP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Note 4. Investment Securities – (continued)

Gross gains and losses from the sales, calls and maturities of investment securities for the three months ended March 31, 2016 and 2015 were as follows:

	Three Months Ended
	March 31,
(in thousands)	2016		2015
Proceeds	$	-	$	9,537
Gross gains on sales of investment securities		-		506
Gross losses on sales of investment securities		-		-
Net gains on sales of investment securities		-		506
Less: tax provision on net gains		-		207
Total	$	-	$	299

The Company performs regular analysis on the securities portfolio to determine whether a decline in fair value indicates that an investment is other-than-temporarily impaired in accordance with FASB ASC 320-10. FASB ASC 320-10 requires companies to record other-than-temporary impairment (“OTTI”) charges, through earnings, if they have the intent to sell, or more likely than not will be required to sell, an impaired debt security before recovery of its amortized cost basis. If the Company intends to sell or it is more likely than not it will be required to sell the security before recovery of its amortized cost basis, less any current period credit loss, the OTTI is recognized in earnings equal to the entire difference between the investment’s amortized cost basis and its estimated fair value at the balance sheet date. If the Company does not intend to sell the security and it is more likely than not that the Company will not be required to sell the security before recovery of its amortized cost basis less any current period loss, and the Company determines that a decline in fair value is other than temporary, the OTTI is separated into the amount representing the credit loss and the amount related to all other factors. The amount of the OTTI related to the credit loss is determined based on the present value of cash flows expected to be collected and is recognized in earnings. The amount of the total OTTI related to other factors is recognized in other comprehensive income, net of applicable taxes. The previous amortized cost basis less the OTTI recognized in earnings becomes the new amortized cost basis of the investment.

The Company maintains a watch list for the identification and monitoring of securities experiencing problems that require a heightened level of review. This could include credit rating downgrades.

The Company’s assessment of whether an impairment in the portfolio is other than temporary includes factors such as whether the issuer has defaulted on scheduled payments, announced restructuring and/or filed for bankruptcy, has disclosed severe liquidity problems that cannot be resolved, disclosed deteriorating financial condition or sustained significant losses.

Temporarily Impaired Investments

The Company does not believe that the unrealized losses, for all securities, which were comprised of 46 and 74 investment securities as of March 31, 2016 and December 31, 2015, respectively, represent an other-than-temporary impairment. The gross unrealized losses associated with U.S. Treasury and agency securities, federal agency obligations, mortgage-backed securities, corporate bonds, tax-exempt securities, asset-backed securities, trust preferred securities, mutual funds and equity securities are not considered to be other than temporary because these unrealized losses are related to changes in interest rates and do not affect the expected cash flows of the underlying collateral or issuer.

Factors affecting the market price include credit risk, market risk, interest rates, economic cycles, and liquidity risk. The magnitude of any unrealized loss may be affected by the relative concentration of the Company’s investment in any one issuer or industry. The Company has established policies to reduce exposure through diversification of concentration of the investment portfolio including limits on concentrations to any one issuer. The Company believes the investment portfolio is prudently diversified.

The decline in value is related to a change in interest rates and subsequent change in credit spreads required for these issues affecting market price. All issues are performing and are expected to continue to perform in accordance with their respective contractual terms and conditions. Short to intermediate average durations and in certain cases monthly principal payments should reduce further market value exposure to increases in rates.

12

CONNECTONE BANCORP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Note 4. Investment Securities – (continued)

The Company evaluates all securities with unrealized losses quarterly to determine whether the loss is other than temporary. Unrealized losses in the corporate debt securities category consist primarily of senior unsecured corporate debt securities issued by large financial institutions, insurance companies and other corporate issuers. Single issuer corporate trust preferred securities are also included, and in the case of one holding the market valuation loss is largely based upon the floating rate coupon and corresponding market valuation. Neither that trust preferred issuer, nor any other corporate issuers, have defaulted on interest payments. The unrealized loss in equity securities consists of losses on other bank equities. The decline in fair value is due in large part to the lack of an active trading market for these securities, changes in market credit spreads and rating agency downgrades. Management concluded that these securities were not other-than-temporarily impaired at March 31, 2016.

In determining that the securities giving rise to the previously mentioned unrealized losses were not other than temporary, the Company evaluated the factors cited above, which the Company considers when assessing whether a security is other-than-temporarily impaired. In making these evaluations the Company must exercise considerable judgment. Accordingly, there can be no assurance that the actual results will not differ from the Company’s judgments and that such differences may not require the future recognition of other-than-temporary impairment charges that could have a material effect on the Company’s financial position and results of operations. In addition, the value of, and the realization of any loss on, an investment security is subject to numerous risks as cited above.

The following tables indicate gross unrealized losses not recognized in income and fair value, aggregated by investment category and the length of time individual securities have been in a continuous unrealized loss position at March 31, 2016 and December 31, 2015:

	March 31, 2016
	Total				Less than 12 Months				12 Months or Longer
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
	(in thousands)
Investment securities
available-for-sale:
Federal agency obligation	$	7,070	$	(29)	$	6,836	$	(28)	$	234	$	(1)
Residential mortgage
pass-through securities		7,173		(21)		6,679		(14)		494		(7)
Trust preferred securities		1,227		(350)		-		-		1,227		(350)
Corporate bonds and notes		15,553		(256)		11,727		(118)		3,826		(138)
Asset-backed securities		18,154		(528)		14,825		(417)		3,329		(111)
Equity securities		117		(28)		-		-		117		(28)
Other securities		5,412		(88)		-		-		5,412		(88)
Total	$	54,706	$	(1,300)	$	40,067	$	(577)	$	14,639	$	(723)
Investment securities
held-to-maturity:
Federal agency obligation	$	4,161	$	(8)	$	2,300	$	(6)	$	1,861	$	(2)
Residential mortgage
pass-through securities		1,920		(15)		1,920		(15)		-		-
Corporate bonds and notes		2,632		(131)		2,632		(131)		-		-
Total	$	8,713	$	(154)	$	6,852	$	(152)	$	1,861	$	(2)
Total temporarily impaired
securities	$	63,419	$	(1,454)	$	46,919	$	(729)	$	16,500	$	(725)

13

CONNECTONE BANCORP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Note 4. Investment Securities – (continued)

	December 31, 2015
	Total				Less than 12 Months				12 Months or Longer
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
	(dollars in thousands)
Investment Securities
Available-for-Sale:
Federal agency obligation	$	12,260	$	(58)	$	12,013	$	(54)	$	247	$	(4)
Residential mortgage
pass-through securities		9,027		(48)		9,027		(48)		—		—
Commercial mortgage-backed
securities		2,971		(9)		2,971		(9)		—		—
Trust preferred securities		1,345		(231)		—		—		1,345		(231)
Corporate bonds and notes		16,533		(292)		12,702		(161)		3,831		(131)
Asset-backed securities		14,745		(298)		11,250		(188)		3,495		(110)
Certificates of deposit		215		(8)		215		(8)		—		—
Equity securities		123		(23)		—		—		123		(23)
Other securities		5,347		(153)		—		—		5,347		(153)
Total	$	62,566	$	(1,120)	$	48,178	$	(468)	$	14,388	$	(652)
Investment Securities
Held-to-Maturity:
Federal agency obligation		12,554		(119)		11,783		(109)		771		(10)
Residential mortgage
pass-through securities		2,480		(6)		2,480		(6)		—		—
Commercial mortgage-backed
securities		1,331		(2)		1,331		(2)		—		—
Obligations of U.S. states
and political subdivisions		981		(3)		981		(3)		—		—
Corporate bonds and notes		5,536		(161)		5,536		(161)		—		—
Total	$	22,882	$	(291)	$	22,111	$	(281)	$	771	$	(10)
Total Temporarily Impaired
Securities	$	85,448	$	(1,411)	$	70,289	$	(749)	$	15,159	$	(662)

Investment securities having a carrying value of approximately $155.3 million and $142.5 million at March 31, 2016 and December 31, 2015, respectively, were pledged to secure public deposits, borrowings, Federal Reserve Discount Window and Federal Home Loan Bank advances and for other purposes required or permitted by law.

As of March 31, 2016 and December 31, 2015, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of stockholders’ equity.

Note 5 – Derivatives

The Company utilizes interest rate swap agreements as part of its asset liability management strategy to help manage its interest rate risk position. The notional amount of the interest rate swap does not represent amounts exchanged by the parties. The amount exchanged is determined by reference to the notional amount and the other terms of the individual interest rate swap agreements.

Interest rate swaps were entered into on August 24, 2015, October 15, 2014 and December 30, 2014, each with a respective notional amount of $25.0 million and were designated as cash flow hedges of a Federal Home Loan Bank advance. The swaps were determined to be fully effective during the period presented and therefore no amount of ineffectiveness has been included in net income while the aggregate fair value of the swaps is recorded in other assets (liabilities) with changes in fair value recorded in other comprehensive income (loss). The amount included in accumulated other comprehensive income (loss) would be reclassified to current earnings should the hedges no longer be considered effective. The Company expects the hedges to remain fully effective during the remaining term of the swaps.

14

CONNECTONE BANCORP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Note 5 – Derivatives – (continued)

Summary information about the interest rate swaps designated as cash flow hedges as of March 31, 2016, December 31, 2015 and March 31, 2015 are presented in the following table.

	March 31,		December 31,		March 31,
(dollars in thousands)	2016		2015		2015
Notional amount	$	75,000	$	75,000	$	50,000
Weighted average pay rates		1.57%		1.56%		1.58%
Weighted average receive rates		0.56%		0.44%		0.24%
Weighted average maturity	3.6 years			3.8 years		4.2 years
Fair value	$	(1,568)	$	(131)	$	(486)

Interest expense recorded on these swap transactions totaled approximately $191 thousand for the three months ended March 31, 2016 and $166 thousands for the three months ended March 31, 2015.

Cash Flow Hedge

The following table presents the net gains (losses), recorded in other comprehensive income and the Consolidated Statements of Income relating to the cash flow derivative instruments for the following periods:

	Three Months Ended March 31, 2016
					Amount of
					loss
					recognized
					in other
	Amount of loss				Non-
	recognized		Amount of loss		interest
	in OCI		reclassified		income
	(Effective		from OCI to interest		(Ineffective
(in thousands)	Portion)		income		Portion)
Interest rate contracts	$	(1,437)	$	-	$	-
	Three Months Ended March 31, 2015
					Amount of
					loss
					recognized
					in other
	Amount of loss				non-
	recognized		Amount of loss		interest
	in OCI		reclassified		income
	(effective		from OCI to interest		(ineffective
(in thousands)	Portion)		income		portion)
Interest rate contracts	$	(534)	$	-	$	-

The following table reflects the cash flow hedges included in the consolidated statements of condition as of March 31, 2016 and December 31, 2015:

	2016				2015
	Notional				Notional
(in thousands)	Amount		Fair Value		Amount		Fair Value
Included in other assets/(liabilities):
Interest rate swaps related to FHLB Advances	$	75,000	$	(1,568)	$	75,000	$	(131)

15

CONNECTONE BANCORP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Note 6. Loans and the Allowance for Loan and Lease Losses

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of deferred loan fees and costs, and an allowance for loan and lease losses. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level-yield method without anticipating prepayments.

Loan segments are defined as a group of loans and leases, which share similar initial measurement attributes, risk characteristics, and methods for monitoring and assessing credit risk. Management has determined that the Company has five segments of loans and leases: commercial (including lease financing), commercial real estate, commercial construction, residential real estate (including home equity) and consumer.

Interest income on commercial, commercial real estate, commercial construction and residential loans are discontinued at the time the loan is 90 days delinquent unless the loan is well-secured and in process of collection. Past due status is based on the contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. Nonaccrual loans and loans past due 90 days still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans. A loan is moved to nonaccrual status in accordance with the Company’s policy, typically after 90 days of non-payment.

All interest accrued but not received for loans placed on nonaccrual is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

The policy of the Company is to generally grant commercial, residential and consumer loans to residents and businesses within its market area. The borrowers’ abilities to repay their obligations are dependent upon various factors including the borrowers’ income and net worth, cash flows generated by the borrowers’ underlying collateral, value of the underlying collateral, and priority of the lender’s lien on the property. Such factors are dependent upon various economic conditions and individual circumstances beyond the control of the Company. The Company is therefore subject to risk of loss. The Company believes its lending policies and procedures adequately minimize the potential exposure to such risks and that adequate provisions for loan and lease losses are provided for all known and inherent risks. Collateral and/or personal guarantees are required for a large majority of the Company’s loans.

Allowance for Loan and Lease Losses

The allowance for loan and lease losses is a valuation allowance for probable incurred credit losses. Losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. Management estimates the allowance balance required using past loan and lease loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors. Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged off. The allowance consists of specific and general components. The specific component relates to loans that are individually classified as impaired.

A loan is impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. Loans, for which the terms have been modified, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings (“TDRs”) and classified as impaired. As part of the evaluation of impaired loans, the Company individually reviews for impairment all non-homogeneous loans internally classified as substandard or below. Generally, smaller impaired non-homogeneous loans and impaired homogeneous loans are collectively evaluated for impairment.

The Bank has defined its population of impaired loans to include all loans on nonaccrual status; all troubled debt restructuring loans; and all loans (above an established dollar threshold of $250,000) internally classified as “Special Mention” or below that require a specific reserve.

Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed.

16

CONNECTONE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(unaudited)

Note 6. Loans and the Allowance for Loan and Lease Losses – (continued)

Troubled debt restructurings are separately identified for impairment disclosures and are measured at the present value of estimated future cash flows using the loan’s effective rate at inception. If a troubled debt restructuring is considered to be a collateral dependent loan, the loan is reported, net, at the fair value of the collateral. For troubled debt restructurings that subsequently default, the Company determines the amount of reserve in accordance with the accounting policy for the allowance for loan and lease losses.

The general component covers non-impaired loans and is based on historical loss experience adjusted for current factors. The historical loss experience, the primary factor, is determined by loan class and is based on the actual loss history experienced by the Bank over an actual three year rolling calculation. This actual loss experience is supplemented with other economic factors based on the risks present for each portfolio segment. This actual loss experience is supplemented with the exogenous factor adjustments based on the risks present for each loan category. These exogenous factors (nine total) include consideration of the following: concentrations of credit; delinquency & nonaccrual trends; economic & business conditions including evaluation of the national and regional economies and industries with significant loan concentrations; external factors including legal, regulatory or competitive pressures that may impact the loan portfolio; changes in the experience, ability, or size of the lending staff, management, or board of directors that may impact the loan portfolio; changes in underwriting standards, collection procedures, charge-off practices, or other changes in lending policies and procedures that may impact the loan portfolio; loss and recovery trends; changes in portfolio size and mix; and trends in problem loans.

Purchased Credit-Impaired Loans

The Company purchases groups of loans in conjunction with mergers, some of which have shown evidence of credit deterioration since origination. These purchased credit impaired loans are recorded at the amount paid, such that there is no carryover of the seller’s allowance for loan and lease losses. After acquisition, losses are recognized by an increase in the allowance for loan and lease losses.

Such purchased credit-impaired loans (“PCI”) are accounted for individually. The Company estimates the amount and timing of expected cash flows for each loan and the expected cash flows in excess of amount paid is recorded as interest income over the remaining life of the loan (accretable yield). The excess of the loan’s contractual principal and interest over expected cash flows is not recorded (nonaccretable difference).

A PCI loan may be resolved either through a sale of the loan, by working with the customer and obtaining partial or full repayment, by short sale of the collateral, or by foreclosure. A gain or loss on resolution would be recognized based on the difference between the proceeds received and the carrying amount of the loan.

Payments received earlier than expected or in excess of expected cash flows from sales or other resolutions may result in the carrying value of a pool being reduced to zero even though outstanding contractual balances and expected cash flows remain related to loans in the pool. Once the carrying value of a pool is reduced to zero, any future proceeds, which may include cash or real estate acquired in foreclosure, from the remaining loans, representing further realization of accretable yield, are recognized as interest income upon receipt.

PCI loans that met the criteria for nonaccrual may be considered performing, regardless of whether the customer is contractually delinquent, if management can reasonably estimate the timing and amount of the expected cash flows on such loans and if management expects to fully collect the new carrying value of the loans. As such, management may no longer consider the loans to be nonaccrual or nonperforming and may accrue interest on these loans, including the impact of any accretable discount.

17

CONNECTONE BANCORP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(unaudited)

Note 6. Loans and the Allowance for Loan and Lease Losses – (continued)

Composition of Loan Portfolio

The following table sets forth the composition of the Company’s loan portfolio, including net deferred loan fees, at March 31, 2016 and December 31, 2015:

	March 31,		December 31,
	2016		2015
	(in thousands)
Commercial	$	601,708	$	570,116
Commercial real estate		2,028,301		1,966,696
Commercial construction		402,594		328,838
Residential real estate		231,319		233,690
Consumer		1,851		2,454
Gross loans		3,265,773		3,101,794
Net deferred loan fees		(1,960)		(2,787)
Total loans receivable	$	3,263,813	$	3,099,007

At March 31, 2016 and December 31, 2015 loan balances of approximately $1.6 billion were pledged to secure borrowings from the Federal Home Loan Bank of New York.

Purchased Credit-Impaired Loans

The Company holds purchased loans for which there was, at their acquisition date, evidence of deterioration of credit quality since their origination and it was probable, at acquisition, that all contractually required payments would not be collected. The carrying amount of those loans is as follows at March 31, 2016 and December 31, 2015.

	March 31,		December 31,
	2016		2015
	(in thousands)
Commercial	$	7,059	$	7,078
Commercial real estate		1,745		1,775
Residential real estate		334		328
Total carrying amount	$	9,138	$	9,181

For those purchased loans disclosed above, the Company did not increase the allowance for loan and lease losses for the three months ended March 31, 2016.

The accretable yield, or income expected to be collected, on the purchased loans disclosed above for the three months ended March 31, 2016 is as follows (in thousands):

	Three Months		Three Months
	Ended March		Ended March
	31, 2016		31, 2015
Beginning balance	$	3,599	$	4,805
New loans purchased		-		-
Accretion of income		(183)		(54)
Reclassification from nonaccretable differences		-		-
Disposals		-		-
Ending balance	$	3,416	$	4,751

18

CONNECTONE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(unaudited)

Note 6. Loans and the Allowance for Loan and Lease Losses – (continued)

The following table presents information about the recorded investment in loan receivables on nonaccrual status by segment at March 31, 2016 and December 31, 2015:

Loans Receivable on Nonaccrual Status

	March 31,		December 31,
	2016		2015
	(in thousands)
Commercial	$	7,239	$	6,586
Commercial real estate		8,841		9,112
Commercial construction		1,636		1,479
Residential real estate		3,734		3,559
Total loans receivable on nonaccrual status	$	21,450	$	20,736

The Company continuously monitors the credit quality of its loans receivable. In addition to its internal staff, the Company utilizes the services of a third party loan review firm to rate the credit quality of its loans receivable. Credit quality is monitored by reviewing certain credit quality indicators. Assets classified “Pass” are deemed to possess average to superior credit quality, requiring no more than normal attention. Assets classified as “Special Mention” have generally acceptable credit quality yet possess higher risk characteristics/circumstances than satisfactory assets. Such conditions include strained liquidity, slow pay, stale financial statements, or other conditions that require more stringent attention from the lending staff. These conditions, if not corrected, may weaken the loan quality or inadequately protect the Company’s credit position at some future date. Assets are classified “Substandard” if the asset has a well-defined weakness that requires management’s attention to a greater degree than for loans classified special mention. Such weakness, if left uncorrected, could possibly result in the compromised ability of the loan to perform to contractual requirements. An asset is classified as “Doubtful” if it is inadequately protected by the net worth and/or paying capacity of the obligor or of the collateral, if any, that secures the obligation. Assets classified as doubtful include assets for which there is a “distinct possibility” that a degree of loss will occur if the inadequacies are not corrected. The following table presents information, excluding net deferred loan fees, about the Company’s loan credit quality at March 31, 2016 and December 31, 2015:

	March 31, 2016
			Special
	Pass		Mention		Substandard		Doubtful		Total
	(in thousands)
Commercial	$	494,413	$	6,976	$	100,319	$	-	$	601,708
Commercial real estate		1,979,211		17,820		31,270		-		2,028,301
Commercial construction		400,131		827		1,636		-		402,594
Residential real estate		226,879		-		4,440		-		231,319
Consumer		1,770		-		81		-		1,851
Total loans	$	3,102,404	$	25,623	$	137,746	$	-	$	3,265,773
	December 31, 2015
			Special
	Pass		Mention		Substandard		Doubtful		Total
	(in thousands)
Commercial	$	462,358	$	11,760	$	95,998	$	-	$	570,116
Commercial real estate		1,919,041		18,990		28,426	239			1,966,696
Commercial construction		326,697		662		1,479		-		328,838
Residential real estate		229,426		-		4,264		-		233,690
Consumer		2,368		-		86		-		2,454
Total loans	$	2,939,890	$	31,412	$	130,253	$	239	$	3,101,794

19

CONNECTONE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Note 6. Loans and the Allowance for Loan and Lease Losses – (continued)

The following table provides an analysis of the impaired loans, by loan segment, at March 31, 2016 and December 31, 2015:

	March 31, 2016
			Unpaid
	Recorded		Principal		Related
	Investment		Balance		Allowance
No related allowance recorded	(in thousands)
Commercial	$	3,320	$	3,625
Commercial real estate		15,271		15,202
Commercial construction		2,466		2,538
Residential real estate		4,123		4,532
Consumer		81		81
Total	$	25,261	$	25,978
With an allowance recorded
Commercial	$	91,928	$	91,851	$	7,677
Total
Commercial	$	95,248	$	95,476	$	7,677
Commercial real estate		15,271		15,202		-
Commercial construction		2,466		2,538		-
Residential real estate		4,123		4,532		-
Consumer		81		81		-
Total	$	117,189	$	117,829	$	7,677
	December 31, 2015
			Unpaid
	Recorded		Principal		Related
	Investment		Balance		Allowance
No related allowance recorded	(in thousands)
Commercial	$	610	$	645
Commercial real estate		15,517		16,512
Commercial construction		2,149		2,141
Residential real estate		3,954		4,329
Consumer		87		86
Total	$	22,317	$	23,713
With an allowance recorded
Commercial	$	84,787	$	84,449	$	6,725
Total
Commercial	$	85,397	$	85,094	$	6,725
Commercial real estate		15,517		16,512		-
Commercial construction		2,149		2,141		-
Residential real estate		3,954		4,329		-
Consumer		87		86		-
Total	$	107,104	$	108,162	$	6,725

20

CONNECTONE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Note 6. Loans and the Allowance for Loan and Lease Losses – (continued)

The following table provides an analysis related to the average recorded investment and interest income recognized on impaired loans by segment as of and for the three and nine months ended March 31, 2016 and 2015 (in thousands):

	Three Months Ended March 31,
	2016				2015
	Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income
	Investment		Recognized		Investment		Recognized
Impaired loans with
no related allowance
recorded
Commercial	$	2,591	$	24	$	290	$	-
Commercial real
estate		15,274		25		6,052		19
Commercial
construction		2,307		16		-		-
Residential real
estate		4,107		5		3,613		2
Consumer		84		1		106		1
Total	$	24,363	$	71	$	10,061	$	22
Impaired loans with
an allowance
recorded
Commercial	$	83,759	$	737	$	387	$	-
Commercial real
estate		-		-		6,335		-
Total	$	83,759	$	737	$	6,722	$	-
Total impaired loans
Commercial	$	86,350	$	761	$	677	$	-
Commercial real
estate		15,274		25		12,387		19
Commercial
construction		2,307		16
Residential real
estate		4,107		5		3,613		2
Consumer		84		1		106		1
Total	$	108,122	$	808	$	16,783	$	22

Included in impaired loans at March 31, 2016 and December 31, 2015 are loans that are deemed troubled debt restructurings. The recorded investment in loans include accrued interest receivable and other capitalized costs such as real estate taxes paid on behalf of the borrower and loan origination fees, net, when applicable. Cash basis interest and interest income recognized on accrual basis approximate each other.

21

CONNECTONE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Note 6. Loans and the Allowance for Loan and Lease Losses – (continued)

The following table provides an analysis of the aging of the recorded investment of loans, excluding net deferred loan fees that are past due at March 31, 2016 and December 31, 2015 by segment:

Aging Analysis

	March 31, 2016
													Loans
													Receivable 90
					90 Days or								Days or Greater
	30-59 Days		60-89 Days		Greater Past		Total Past				Total Loans		Past Due and
	Past Due		Past Due		Due		Due		Current		Receivable		Accruing
	(in thousands)
Commercial	$	5,539	$	-	$	12,409	$	17,948	$	583,760	$	601,708	$	5,250
Commercial real
estate		5,408		-		10,027		15,435		2,012,866		2,028,301		1,382
Commercial
construction		1,750		-		-		1,750		400,844		402,594		-
Residential real
estate		1,741		380		2,746		4,867		226,452		231,319		-
Consumer		2		-		-		2		1,849		1,851
Total	$	14,440	$	380	$	25,181	$	40,002	$	3,225,771	$	3,265,773	$	6,632
	December 31, 2015
													Loans
													Receivable 90
					90 Days or								Days or Greater
	30-59 Days		60-89 Days		Greater Past		Total Past				Total Loans		Past Due and
	Past Due		Past Due		Due		Due		Current		Receivable		Accruing
	(in thousands)
Commercial	$	6,887	$	3,505	$	6,865	$	17,257	$	552,859	$	570,116	$	-
Commercial real
estate		1,998		988		9,561		12,547		1,954,149		1,966,696		-
Commercial
construction		-		-		1,479		1,479		327,359		328,838		-
Residential real
estate		-		-		2,122		2,122		231,568		233,690		-
Consumer		4		9		-		13		2,441		2,454		-
Total	$	8,889	$	4,502	$	20,027	$	33,418	$	3,068,376	$	3,101,794	$	-

22

CONNECTONE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Note 6. Loans and the Allowance for Loan and Lease Losses – (continued)

The following table details, at the period presented, the amount of loans receivable that are evaluated individually, and collectively, for impairment (excluding net deferred loan fees), those acquired with deteriorated quality, and the related portion of the allowance for loan and lease losses that are allocated to each loan portfolio segment:

	March 31, 2016
			Commercial		Commercial		Residential
	Commercial		real estate		construction		real estate		Consumer		Unallocated		Total
	(in thousands)
Allowance for loan and lease losses
Individually evaluated for impairment	$	7,677	$	-	$	-	$	-	$	-	$	-	$	7.677
Collectively evaluated for impairment		5,420		10,941		3,617		1,074		4		341		21,397
Acquired with deteriorated credit quality		-		-		-		-		-		-		-
Total	$	13,097	$	10,941	$	3,617	$	1,074	$	4	$	341	$	29,074
Gross loans
Individually evaluated for impairment	$	95,248	$	15,271	$	2,466	$	4,123	$	81	$	-	$	117,189
Collectively evaluated for impairment		499,401		2,011,285		400,128		226,862		1,770		-		3,139,446
Acquired with deteriorated credit quality		7,059		1,745		-		334		-		-		9,138
Total	$	601,708	$	2,028,301	$	402,594	$	231,319	$	1,851	$	-	$	3,265,773

The table above includes approximately $824 million of acquired loans for the period ended March 31, 2016 reported as collectively evaluated for impairment, of which approximately $661 million were included in the commercial real estate loan segment.

The following table details the amount of gross loans that are evaluated individually, and collectively, for impairment (excluding net deferred costs), those acquired with deteriorated quality, and the related portion of the allowance for loan and lease loss that is allocated to each loan portfolio class:

	December 31, 2015
			Commercial		Commercial		Residential
	Commercial		real estate		construction		real estate		Consumer		Unallocated		Total
	(in thousands)
Allowance for loan and lease losses
Individually evaluated for impairment	$	6,725	$	-	$	-	$	-	$	-	$	-	$	6,725
Collectively evaluated for impairment		4,224		10,926		3,253		976		4		464		19,847
Acquired with deteriorated credit quality		-		-		-		-		-		-		-
Total	$	10,949	$	10,926	$	3,253	$	976	$	4	$	464	$	26,572
Gross loans
Individually evaluated for impairment	$	85,397	$	15,517	$	2,149	$	3,954	$	87	$	-	$	107,104
Collectively evaluated for impairment		477,641		1,949,404		326,689		229,408		2,367		-		2,985,509
Acquired with deteriorated credit quality		7,078		1,775		-		328		-		-		9,181
Total	$	570,116	$	1,966,696	$	328,838	$	233,690	$	2,454	$	-	$	3,101,794

The tables above include approximately $867 million of acquired loans as of December 31, 2015 reported as collectively evaluated for impairment, of which $672 million were included in the commercial real estate loan segment.

23

CONNECTONE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Note 6. Loans and the Allowance for Loan and Lease Losses – (continued)

       The Company’s allowance for loan and lease losses is analyzed quarterly. Many factors are considered, including growth in the portfolio, delinquencies, nonaccrual loan levels, and other factors inherent in the extension of credit. There have been no material changes to the allowance for loan and lease losses methodology as disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.

A summary of the activity in the allowance for loan and lease losses is as follows:

	Three Months Ended March 31, 2016
			Commercial		Commercial		Residential
	Commercial		real estate		construction		real estate		Consumer		Unallocated		Total
	(in thousands)
Balance at December 31,
2015	$	10,949	$	10,926	$	3,253	$	976	$	4	$	464	$	26,572
Charge-offs		(445)		-		-		(67)		-		-		(512)
Recoveries		1		13		-		-		-		-		14
Provision		2,592		2		364		165		-		(123)		3,000
Balance at March 31, 2016	$	13,097	$	10,941	$	3,617	$	1,074	$	4	$	341	$	29,074
	Three Months Ended March 31, 2015
			Commercial		Commercial		Residential
	Commercial		real estate		construction		real estate		Consumer		Unallocated		Total
	(in thousands)
Balance at December 31,
2014	$	3,083	$	7,799	$	1,239	$	1,113	$	7	$	919	$	14,160
Charge-offs		(45)		(4)		-		-		(11)		-		(60)
Recoveries		6		-		-		1		1		-		8
Provision		883		1,051		279		(133)		7		(262)		1,825
Balance at March 31, 2015	$	3,927	$	8,846	$	1,518	$	981	$	4	$	657	$	15,933

24

CONNECTONE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Note 6. Loans and the Allowance for Loan and Lease Losses – (continued)

Trouble Debt Restructurings

At March 31, 2016, there were no commitments to lend additional funds to borrowers whose loans were on nonaccrual status or were contractually past due in excess of 90 days and still accruing interest, or whose terms have been modified in troubled debt restructurings.

The policy of the Company generally is to grant commercial, mortgage and consumer loans to residents and businesses within its market area. The ability of borrowers abilities to repay their obligations are dependent upon various factors, including the borrowers’ income and net worth, cash flows generated by the borrowers’ underlying collateral, value of the underlying collateral, and priority of the lender’s lien on the property. Such factors are dependent upon various economic conditions and individual circumstances beyond the control of the Company. The Company is therefore subject to risk of loss. The Company believes its lending policies and procedures adequately minimize the potential exposure to such risks and that adequate provisions for loan and lease losses are provided for all known and inherent risks. Collateral and/or personal guarantees are required for virtually all loans. A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms.

Loans modified in troubled debt restructurings totaled $96.5 million at March 31, 2016, of which $1.4 million were on nonaccrual status and $95.1 million were performing troubled debt restructurings. At December 31, 2015, loans modified in troubled debt restructurings totaled $86.6 million, of which $0.7 million were on nonaccrual status and $85.9 million were performing troubled debt restructurings. The Company has allocated $6.0 million in specific allocations with respect to loans whose loan terms had been modified in troubled debt restructurings as of March 31, 2016. At December 31, 2015, there were $4.5 million in specific allocations with respect to performing troubled debt restructurings, and there were no specific allocations with respect to troubled debt restructurings as of March 31, 2015. Performing TDRs as of March 31, 2016 increased the allowance for loan and lease losses by $1.5 million for the three months ended March 31, 2016. Performing TDRs as of March 31, 2015 did not increase the allowance for loan and lease losses for the three months ended March 31, 2015.

The $6.0 million in specific allocations referenced above were associated with taxi medallion lending and were calculated based on the present value of estimated cash flows, including contractual debt interest service through maturity, and principal repayments based on the fair value of the collateral excluding any consideration for personal guarantees of borrowers, which provide an additional source of repayment but cannot be relied upon. The valuation per corporate medallion used for the calculation at March 31, 2016 was approximately $775,000. An additional $1.5 million specific allocation was required at March 31, 2016 due to a decline in the Company’s estimated valuation of taxi medallions at December 31, 2015, when the specific allocation was $4.5 million.

The following table presents loans by class modified as troubled debt restructurings that occurred during the three months ended March 31, 2016 (dollars in thousands):

		Pre-Modification		Post-Modification
		Outstanding		Outstanding
	Number of	Recorded		Recorded
	Loans	Investment		Investment
Troubled debt restructurings:
Commercial	9	$	9,555	$	9,555
Commercial real estate	-		-		-
Commercial construction	-		-		-
Residential real estate	-		-		-
Consumer	-		-		-
Total	9	$	9,555	$	9,555

The increase in TDRs was primarily due to six loans secured by New York City taxi medallions totaling $8.0 million that were modified during the first quarter of 2016. Four of these modifications consisted of short-term extensions of the loans’ contractual maturity dates at the pre-existing contractual rate and two of these modifications interest rates decreased from approximately 3% to 1.3-1.6%. These six loans were accruing prior to modification, while five remained in accrual status post-modification.

The troubled debt restructurings described above increased the allowance for loan and lease losses by $45 thousand during the three months ended March 31, 2016. There were no charge-offs in connection with a loan modification at the time of modification during the three months ended March 31, 2016. There were no troubled debt restructurings for which there was a payment default within twelve months following the modification during the three months ended March 31, 2016.

25

CONNECTONE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Note 6. Loans and the Allowance for Loan and Lease Losses – (continued)

There were no troubled debt restructurings occurring during the three months ended March 31, 2015. There were no charge-offs in connection with a loan modification at the time of modification during the three months ended March 31, 2015. There were no troubled debt restructurings for which there was a payment default within twelve months following the modification during the three months ended March 31, 2015.

Note 7 - Fair Value Measurements and Fair Value of Financial Instruments

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair value:

FASB ASC 820-10-05 defines fair value, establishes a framework for measuring fair value, establishes a three-level valuation hierarchy for disclosure of fair value measurements and enhances disclosure requirements for fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date.

FASB ASC 820-10-65 provides additional guidance for estimating fair value in accordance with FASB ASC 820-10-05 when the volume and level of activity for the asset or liability have significantly decreased. This ASC also includes guidance on identifying circumstances that indicate a transaction is not orderly.

FASB ASC 820-10-05 establishes a fair value hierarchy that prioritizes the inputs to valuation methods used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under FASB ASC 820-10-05 are as follows:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2: Quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (for example, supported with little or no market activity).

An asset’s or liability’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

The following information should not be interpreted as an estimate of the fair value of the entire Company since a fair value calculation is only provided for a limited portion of the Company’s assets and liabilities. Due to a wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between the Company’s disclosures and those of other companies may not be meaningful. The following methods and assumptions were used to estimate the fair values of the Company’s assets measured at fair value on a recurring basis at March 31, 2016 and December 31, 2015:

Securities Available-for-Sale

Where quoted prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. Level 1 inputs include securities that have quoted prices in active markets for identical assets. If quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics, or discounted cash flows. Examples of instruments, which would generally be classified within Level 2 of the valuation hierarchy include municipal bonds and certain agency collateralized mortgage obligations. In certain cases where there is limited activity in the market for a particular instrument, assumptions must be made to determine the fair value of the instruments and these are classified as Level 3. When measuring fair value, the valuation techniques available under the market approach, income approach and/or cost approach are used. The Company’s evaluations are based on market data and the Company employs combinations of these approaches for its valuation methods depending on the asset class.

26

CONNECTONE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Note 7 - Fair Value Measurements and Fair Value of Financial Instruments

Derivatives

The fair value of derivatives are based on valuation models using observable market data as of the measurement date (level 2). Our derivatives are traded in an over-the-counter market where quoted market prices are not always available. Therefore, the fair values of derivatives are determined using quantitative models that utilize multiple market inputs. The inputs will vary based on the type of derivative, but could include interest rates, prices and indices to generate continuous yield or pricing curves, prepayment rate, and volatility factors to value the position. The majority of market inputs are actively quoted and can be validated through external sources, including brokers, market transactions and third-party pricing services.

Loans Held for Sale

Loans held for sale are required to be measured at the lower of cost or fair value. Under FASB ASC 820-10-05, market value is to represent fair value. Management obtains quotes or bids on all or part of these loans directly from the purchasing financial institutions.

Loans Receivable

The fair value of performing loans, except residential mortgages, is calculated by discounting scheduled cash flows through the estimated maturity using estimated market discount rates that reflect the credit and interest rate risks inherent in the loan. The estimate of maturity is based on the historical experience of the Bank with prepayments for each loan classification, modified as required by an estimate of the effect of current economic and lending conditions. For performing residential mortgage loans, fair value is estimated by discounting contractual cash flows adjusted for prepayment estimates using discount rates based on secondary market sources adjusted to reflect differences in servicing and credit costs.

Off-Balance Sheet Financial Instruments

The fair value of commitments to extend credit is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. For fixed rate loan commitments, fair value also considers the difference between current levels of interest rate and the committed rates.

The fair value of financial standby letters of credit is based on fees currently charged for similar agreements or on the estimated cost to terminate them or otherwise settle the obligations with the counterparties.

27

CONNECTONE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Note 7 - Fair Value Measurements and Fair Value of Financial Instruments

Assets and Liabilities Measured at Fair Value on a Recurring Basis

For financial assets and liabilities measured at fair value on a recurring basis, the fair value measurements by level within the fair value hierarchy used at March 31, 2016 and December 31, 2015 are as follows:

			March 31, 2016
			Fair Value Measurements at Reporting Date Using
			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
			(Level 1)		(Level 2)		(Level 3)
(in thousands)
Recurring fair value measurements:
Assets
Investment securities:
Available-for-sale:
Federal agency obligations	$	31,827	$	-	$	31,827	$	-
Residential mortgage pass-
through securities		48,545		-		48,545		-
Commercial mortgage pass-
through securities		3,053		-		3,053		-
Obligations of U.S. states and
political subdivision		9,806		-		9,806		-
Trust preferred securities		16,179		-		16,179		-
Corporate bonds and notes		41,388		-		41,388		-
Asset-backed securities		18,154		-		18,154		-
Certificates of deposit		1,516		-		1,516		-
Equity securities		377		377		-		-
Other securities		20,486		20,486		-		-
Total available-for-sale	$	191,331	$	20,863	$	170,468	$	-
Liabilities
Derivatives	$	1,568	$	-	$	1,568	$	-
Total liabilities	$	1,568	$	-	$	1,568	$	-

There were no transfers between Level 1, Level 2 and Level 3 during the three months ended March 31, 2016.

28

CONNECTONE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Note 7 - Fair Value Measurements and Fair Value of Financial Instruments – (continued)

			December 31, 2015
			Fair Value Measurements at Reporting Date Using
			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
			(Level 1)		(Level 2)		(Level 3)
(in thousands)
Recurring fair value measurements:
Assets
Investment securities:
Available-for-sale:
Federal agency obligations	$	29,146	$	-	$	29,146	$	-
Residential mortgage pass-
through securities		44,910		-		44,910		-
Commercial mortgage pass-
through securities		2,972		-		2,972		-
Obligations of U.S. states and
political subdivision		8,357		-		8,357		-
Trust preferred securities		16,255		-		16,255		-
Corporate bonds and notes		53,976		-		53,976		-
Asset-backed securities		19,725		-		19,725		-
Certificates of deposit		1,905		-		1,905		-
Equity securities		374		374		-		-
Other securities		18,150		18,150		-		-
Total available-for-sale	$	195,770	$	18,524	$	177,246	$	-
Liabilities
Derivatives	$	131	$	-	$	131	$	-
Total liabilities	$	131	$	-	$	131	$	-

There were no transfers between Level 1, Level 2 and Level 3 during the year ended December 31, 2015.

Assets Measured at Fair Value on a Non-Recurring Basis

The Company may be required periodically to measure certain assets at fair value on a nonrecurring basis in accordance with GAAP. These adjustments to fair value usually result from the application of lower of cost or fair value accounting or impairment write-downs of individual assets. The Company primarily utilized appraisal value less cost to sell and other unobservable market inputs to determine fair value of assets, and therefore, these valuations are classified as a Level 3 measurement. For assets measured at fair value on a non-recurring basis, the fair value measurements at March 31, 2016 and December 31, 2015 are as follows:

Impaired loans	Valuation Techniques	Range of Unobservable Inputs
Commercial	Appraisals of collateral value	Adjustment for age of comparable sales, generally a decline of 0% to 15%. Adjustment for age of lease payments. Market capitalization rates between 4% and 8%

29

CONNECTONE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Note 7 - Fair Value Measurements and Fair Value of Financial Instruments – (continued)

			Fair Value Measurements at Reporting Date Using
			Quoted
			Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
	March 31,		Assets		Inputs		Inputs
Assets measured at fair value on a nonrecurring basis:	2016		(Level 1)		(Level 2)		(Level 3)
Impaired loans		(in thousands)
Commercial	$	3,410	$	-	$	-	$	3,410
			Fair Value Measurements at Reporting Date Using
			Quoted
			Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
	December 31,		Assets		Inputs		Inputs
Assets measured at fair value on a nonrecurring basis:	2015		(Level 1)		(Level 2)		(Level 3)
Impaired loans	(in thousands)
Commercial	$	3,751	$	-	$	-	$	3,751

The following methods and assumptions were used to estimate the fair values of the Company’s assets measured at fair value on a non-recurring basis at March 31, 2016 and December 31, 2015.

Impaired loans - The value of the impaired loans above were measured based upon the fair value of the collateral of the loans. Smaller balance homogeneous loans that are collectively evaluated for impairment, such as residential mortgage loans and consumer loans, are specifically excluded from the impaired loan portfolio. The Company’s impaired loans are primarily collateral dependent. Impaired loans are individually assessed to determine that each loan’s carrying value is not in excess of the fair value of the related collateral. Impaired loans at March 31, 2016 that required a valuation allowance were $5.1 million with a related valuation allowance of $1.7 million compared to $6.0 million with a related valuation allowance of $2.2 million at December 31, 2015.

Fair Value of Financial Instruments

FASB ASC 825-10 requires all entities to disclose the estimated fair value of their financial instrument assets and liabilities. For the Company, as for most financial institutions, the majority of its assets and liabilities are considered financial instruments as defined in FASB ASC 825-10. Many of the Company’s financial instruments, however, lack an available trading market as characterized by a willing buyer and willing seller engaging in an exchange transaction. It is also the Company’s general practice and intent to hold its financial instruments to maturity and not to engage in trading or sales activities except for loans held-for-sale and investment securities available-for-sale. Therefore, significant estimations and assumptions, as well as present value calculations, were used by the Company for the purposes of this disclosure.

Cash and cash equivalents. The carrying amounts of cash and short-term instruments approximate fair values.

FHLB stock. It is not practical to determine the fair value of FHLB stock due to restrictions placed on its transferability.

30

CONNECTONE BANCORP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Note 7 - Fair Value Measurements and Fair Value of Financial Instruments – (continued)

Investment Securities Held-to-Maturity. The fair value of the Company’s investment securities held-to-maturity was primarily measured using information from a third-party pricing service. If quoted prices were not available, fair values were estimated primarily by obtaining quoted prices for similar assets in active markets or through the use of pricing models. In cases where there may be limited or less transparent information provided by the Company’s third-party pricing service, fair value may be estimated by the use of secondary pricing services or through the use of non-binding third-party broker quotes.

Loans. The fair value of the Company’s loans was estimated by discounting the expected future cash flows using the current interest rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. Loans were segregated by types such as commercial, residential and consumer loans. Expected future cash flows were projected based on contractual cash flows, adjusted for estimated prepayments.

Interest-Bearing Deposits. The fair values of the Company’s interest-bearing deposits were estimated using discounted cash flow analyses. The discounted rates used were based on rates currently offered for deposits with similar remaining maturities. The fair values of the Company’s interest-bearing deposits do not take into consideration the value of the Company’s long-term relationships with depositors, which may have significant value.

Term Borrowings and Subordinated Debentures. The fair value of the Company’s long-term borrowings and subordinated debentures were calculated using a discounted cash flow approach and applying discount rates currently offered based on weighted remaining maturities.

Accrued Interest Receivable/Payable. The carrying amounts of accrued interest approximate fair value resulting in a level 2 or level 3 classification based on the level of the asset or liability with which the accrual is associated.

31

CONNECTONE BANCORP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Note 7 - Fair Value Measurements and Fair Value of Financial Instruments – (continued)

The following presents the carrying amount, fair value, and placement in the fair value hierarchy of the Company’s financial instruments as of March 31, 2016 and December 31, 2015.

					Fair Value Measurements
					Quoted
					Prices in
					Active		Significant
					Markets for		Other		Significant
					Identical		Observable		Unobservable
	Carrying		Fair		Assets		Inputs		Inputs
	Amount		Value		(Level 1)		(Level 2)		(Level 3)
	(in thousands)
March 31, 2016
Financial assets
Cash and due from banks	$	118,259	$	118,259	$	118,259	$	-	$	-
Investment securities available-for-sale		191,331		191,331		20,863		170,468		-
Investment securities held-to-maturity		219,373		229,470		30,413		180,553		18,504
Restricted investment in bank stocks		31,487		n/a		n/a		n/a		n/a
Net loans		3,234,739		3,242,398		-		-		3,242,398
Accrued interest receivable		12,604		12,604		199		2,486		9,919
Financial liabilities
Noninterest-bearing deposits		614,507		614,507		614,507		-		-
Interest-bearing deposits		2,278,564		2,285,918		-		2,285,918		-
Borrowings		646,501		651,739		-		651,739		-
Subordinated debentures, net		54,392		57,879		-		57,879		-
Derivatives		1,568		1,568		-		1,568		-
Accrued interest payable	$	5,101	$	5,101	$	-	$	5,101	$	-
December 31, 2015
Financial assets
Cash and due from banks	$	200,895	$	200,895	$	200,895	$	-	$	-
Investment securities available-for-sale		195,770		195,770		18,524		177,246		-
Investment securities held-to-maturity		224,056		230,558		29,226		182,774		18,558
Restricted investment in bank stocks		32,612		n/a		n/a		n/a		n/a
Net loans		3,072,435		3,059,343		-		-		3,059,343
Accrued interest receivable		12,545		12,545		68		2,699		9,778
Financial liabilities
Noninterest-bearing deposits		650,775		650,775		650,775		-		-
Interest-bearing deposits		2,140,191		2,137,149		-		2,137,149		-
Borrowings		671,587		674,131		-		674,131		-
Subordinated debentures, net		54,343		55,209		-		55,209		-
Derivatives		131		131		-		131		-
Accrued interest payable	$	4,387	$	4,387	$	-	$	4,387	$	-

32

CONNECTONE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Note 7 - Fair Value Measurements and Fair Value of Financial Instruments – (continued)

The fair value of commitments to originate loans is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. For fixed-rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates. The fair values of letters of credit and lines of credit are based on fees currently charged for similar agreements or on the estimated cost to terminate or otherwise settle the obligations with the counterparties at the reporting date.

Changes in assumptions or estimation methodologies may have a material effect on these estimated fair values.

The Company’s remaining assets and liabilities, which are not considered financial instruments, have not been valued differently than has been customary with historical cost accounting. No disclosure of the relationship value of the Company’s core deposit base is required by FASB ASC 825-10.

Fair value estimates are based on existing balance sheet financial instruments, without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. For example, there are certain significant assets and liabilities that are not considered financial assets or liabilities, deferred taxes, premises and equipment, and goodwill. In addition, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in the estimates.

Management believes that reasonable comparability between financial institutions may not be likely, due to the wide range of permitted valuation techniques and numerous estimates which must be made, given the absence of active secondary markets for many of the financial instruments. This lack of uniform valuation methodologies also introduces a greater degree of subjectivity to these estimated fair values.

Note 8. Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss (net of tax) at March 31, 2016 and December 31, 2015 consisted of the following:

	March 31,		December 31,
	2016		2015
	(in thousands)
Net unrealized gain on investment securities available-for-sale	$	1,251	$	713
Cash flow hedge		(927)		(77)
Unamortized component of securities transferred from available-for-sale to held-to-
maturity		(1,142)		(1,173)
Defined benefit pension and post-retirement plans		(4,012)		(4,072)
Total accumulated other comprehensive loss	$	(4,830)	$	(4,609)

33

CONNECTONE BANCORP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Note 9. Stock-Based Compensation

The Company maintains three stock-based compensation plans from which new grants could be issued. The Company’s stock-based compensation plans permit Parent Corporation common stock to be issued to key employees and directors of the Company and its subsidiaries. Grants under the existing plans can be in the form of stock options (qualified or non-qualified), restricted shares, or performance units. Shares available for grant and issuance under the existing plans as of March 31, 2016 are as follows 68,516 under the 2009 Equity Incentive Plan and 235,090 shares under the North Jersey Community Bancorp 2009 Equity Compensation Plan. The Company intends to issue all shares under these plans in the form of newly issued shares.

Restricted stock and option awards typically have a three-year vesting period starting one year after the date of grant with one-third vesting each year. The options generally expire ten years from the date of grant. Restricted stock awards granted to new employees and board members may be granted with shorter vesting periods. Grants of performance units typically have a cliff vesting after 3 years. All issuances are subject to forfeiture if the recipient leaves or is terminated prior to the awards vesting. Restricted shares have the same dividend and voting rights as common stock while options and performance units do not.

All awards are issued at fair value of the underlying shares at the grant date. The Company expenses the cost of the awards, which is determined to be the fair market value of the awards at the date of grant, ratably over the vesting period.

No options were granted during the three months ended March 31, 2016 or 2015.

During the three months ended March 31, 2016 and 2015 a total of 71,920 and 48,507 restricted shares were awarded, respectively. The compensation expense related to restricted stock awards during the quarter ended March 31, 2016 was $182,000.

During 2016 and 2015, the Company granted to various key employees performance unit awards, with each unit entitling the holder to one share of the Company’s common stock contingent upon the Company meeting or exceeding certain return on asset targets over the course of a three-year period commencing on the date of issuance. Under the agreement, and assuming the Company has met or exceeded the applicable targets, grants of performance unit awards will vest on the third anniversary of the grant date or on an earlier date in the event of a change in control, as defined in the agreement. At March 31, 2016, the specific number of shares related to performance unit awards that were expected to vest was 151,577, determined by actual performance in consideration of the established range of the performance targets, which is consistent with the level of expense currently being recognized over the vesting period. Should this expectation change, additional compensation expense could be recorded in future periods or previously recognized expense could be reversed. The maximum amount of performance unit awards is 181,892 shares. The total amount of compensation cost related to performance unit awards included in salary expense during the quarter ended March 31, 2016 and 2015 was $193,000 and $0, respectively.

Option activity under the principal option plans as of March 31, 2016 and changes during the three months ended March 31, 2016 were as follows:

				Weighted-
				Average
		Weighted-		Remaining
		Average		Contractual
		Exercise		Term		Aggregate
	Shares	Price		(In Years)		Intrinsic Value
Outstanding at December 31, 2015	535,906	$	6.48
Granted	-		-
Exercised	(5,495)		7.67
Forfeited/cancelled/expired	(20,839)		9.77
Outstanding at March 31, 2016	509,572	$	6.34		2.92	$	5,102,923
Exercisable at March 31, 2016	503,941	$	6.22		2.90	$	5,071,354

34

CONNECTONE BANCORP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Note 9. Stock-Based Compensation

Information related to stock option exercises during 2016:

	2016
Intrinsic value of options exercised	$	54,326
Cash received from options exercised		42,171
Tax benefit realized from options exercised		17,114
Weighted average fair value of options granted		-

The aggregate intrinsic value of options above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on March 31, 2016 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on March 31, 2016. This amount changes based on the fair market value of the Parent Corporation’s stock.

The below table represents information regarding restricted shares currently outstanding at March 31, 2016:

		Weighted-
		Average
	Nonvested	Grant Date
	Shares	Fair Value
Nonvested at December 31, 2015	96,902	$	16.81
Granted	71,920		15.88
Vested	(54,648)		16.01
Forfeited/cancelled/expired	(1,000)		19.58
Nonvested at March 31, 2016	113,174	$	16.81

As of March 31, 2016, there was $1,806,000 of total unrecognized compensation cost related to nonvested restricted shares granted under the plans. The cost is expected to be recognized over a weighted average period of 24.0 months. The total fair value of shares vested during the quarter ended March 31, 2016, was $686,000.

35

CONNECTONE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Note 9 - Stock Based Compensation – (continued)

A summary of the status of unearned performance unit awards and the change during the period is presented in the table below:

		Weighted-
		Average
		Grant Date
	Shares	Fair Value
Unearned at December 31, 2015	94,485	$	19.46
Awarded	64,540		17.15
Forfeited	(7,447)		19.46
Expired	-		-
Unearned at March 31, 2016	151,578	$	19.46

At March 31, 2016, compensation cost of $2,198,000 related to nonvested awards not yet recognized is expected to be recognized over a weighted-average period of 2.3 years.

Note 10. Components of Net Periodic Pension Cost

The Company maintained a non-contributory defined benefit pension plan for substantially all of its employees until March 31, 2007, at which time the Company froze the plan. The following table sets forth the net periodic pension cost of the Company’s pension plan for the periods indicated.

	Three Months Ended
	March 31,
	2016		2015
Interest cost	$	128	$	138
Expected return on plan assets		(136)		(137)
Net amortization		102		108
Recognized settlement loss		-		450
Total periodic pension expense	$	94	$	559
Net actuarial gain	$	(101)	$	(742)
Total recognized in other comprehensive income	$	(101)	$	(742)
Total recognized in net periodic expense and other
comprehensive income (before tax)	$	(7)	$	(183)

Contributions

As of March 31, 2016, The Company intended to contribute $2.0 million to its Pension Trust during the second quarter of 2016. (As intended, the company contributed $2.0 million to its Pension Trust in April 2016). The trust is established to provide retirement and other benefits for eligible employees and their beneficiaries. No part of the trust assets may be applied to any purpose other than providing benefits under the plan and for defraying expenses of administering the plan and the trust.

36

CONNECTONE BANCORP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Note 11. FHLB and other borrowings

The Company’s FHLB and other borrowings and weighted average interest rates are summarized below:

	March 31, 2016				December 31, 2015
	Amount		Rate		Amount		Rate
	(in thousands)
By type of borrowing:
FHLB borrowings	$	631,501	1.30	%	$	656,587	1.26	%
Repurchase agreements ("REPO")		15,000	5.95			15,000	5.95
Total borrowings	$	646,501	1.41		$	671,587	1.37
By remaining period to maturity:
One year or less	$	330,501	0.64			270,587	0.64
One to two years		121,000	1.90			171,000	1.56
Two to three years		105,000	1.96			130,000	1.84
Three to four years		50,000	1.66			35,000	1.60
Four to five years		40,000	3.42			65,000	2.82
Total borrowings	$	646,501	1.41	%	$	671,587	1.37	%

The FHLB borrowings are secured by pledges of certain collateral including, but not limited to, U.S. government and agency mortgage-backed securities and a blanket assignment of qualifying first lien mortgage loans, consisting of both residential mortgages and commercial real estate loans.

The Company has entered into agreements under which it has sold securities subject to an obligation to repurchase the same or similar securities. Under these arrangements, the Company may transfer legal control over the assets but still retain effective control through an agreement that both entitles and obligates the Company to repurchase the assets. The obligation to repurchase the securities is reflected as a liability in the Company’s consolidated statement of condition, while the securities underlying the securities sold under agreements to repurchase remain in the respective asset accounts and are delivered to and held as collateral by third party trustees.

Three of the FHLB notes ($2,500,000 and $7,500,000 each due April 2, 2018, and $5,000,000 due July 16, 2018) contain a convertible option which allows the FHLB, at quarterly intervals, to convert the fixed convertible advance into replacement funding for the same or lesser principal based on any advance then offered by the FHLB at its current market rate. The Company has the option to repay these advances, if converted, without penalty. The remaining advances are payable at stated maturity, with a prepayment penalty for fixed rate advances. All FHLB advances are fixed rate while the REPOs are variable rate advances. The advances at March 31, 2016 were collateralized by approximately $1.2 billion of commercial mortgage loans, net of required over-collateralization amounts, under a blanket lien arrangement. At March 31, 2016 the Company had remaining borrowing capacity of approximately at FHLB of approximately $594 million.

37

CONNECTONE BANCORP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Note 12 – Securities Sold under Agreements to Repurchase

Repurchase agreements are secured borrowings. The Company pledges investment securities to secure those borrowings. Information concerning repurchase agreements is summarized as follows for the periods presented:

	March 31,		December 31,		March 31,
(dollars in thousands)	2016		2015		2015
Average daily balance during the year-to-date	$	15,000	$	22,890	$	31,000
Average interest rate during the year-to-date		5.95%		5.92%		5.90%
Maximum month-end balance during the year-to-date	$	15,000	$	31,000	$	31,000%
Weighted average interest rate during the year-to-date		5.95%		5.92%		5.90%

The table below shows the remaining contractual maturity of agreement by fair value of collateral pledged:

	March 31, 2016
	Remaining Contractual Maturity of the Agreements
	Overnight and		Up to 30				Greater Than
(dollars in thousands)	Continuous		Days		30-90 Days		90 Days		Total
Repurchase agreements and
Repurchase-to-maturity transactions
U.S. Treasury and agency securities	$	-	$	-	$	-	$	5,069	$	5,069
Residential mortgage pass-through securities		-		-		-		14,849		14,849
Total Borrowings	$	-	$	-	$	-	$	19,918	$	19,918
Amounts related to agreements not included in offsetting disclosure in Note 14									$	4,918

	December 31, 2015
	Remaining Contractual Maturity of the Agreements
	Overnight and		Up to 30				Greater Than
(dollars in thousands)	Continuous		Days		30-90 Days		90 Days		Total
Repurchase agreements and
Repurchase-to-maturity transactions
U.S. Treasury and agency securities	$	-	$	-	$	-	$	6,313	$	6,313
Residential mortgage pass-through securities		-		-		-		12,589		12,589
Total Borrowings	$	-	$	-	$	-	$	18,902	$	18,902
Amounts related to agreements not included in offsetting disclosure in Note 14									$	3,902

The fair value of securities pledged to secure repurchase agreement may decline. The Company manages this risk by having a policy to pledge securities valued at 8% above the gross outstanding balance of repurchase agreement. Securities sold under agreements to repurchase are secured by securities with a carrying amount of $19.1 million and $18.8 million at March 31, 2016 and December 31, 2015.

Note 13 - Subordinated Debentures

During 2003, the Company formed a statutory business trust, which exists for the exclusive purpose of (i) issuing Trust Securities representing undivided beneficial interests in the assets of the Trust; (ii) investing the gross proceeds of the Trust securities in junior subordinated deferrable interest debentures (subordinated debentures) of the Company; and (iii) engaging in only those activities necessary or incidental thereto. On December 19, 2003, Center Bancorp Statutory Trust II, a statutory business trust and wholly-owned subsidiary of the Parent Corporation issued $5.0 million of MMCapS capital securities to investors due on January 23, 2034. The capital securities presently qualify as Tier I capital. The trust loaned the proceeds of this offering to the Company and received in exchange $5.2 million of the Parent Corporation’s subordinated debentures. The subordinated debentures are redeemable in whole or in part prior to maturity. The floating interest rate on the subordinate debentures is three-month LIBOR plus 2.85% and reprices quarterly. The rate at March 31, 2016 was 3.47%. These subordinated debentures and the related income effects are not eliminated in the consolidated financial statements as the statutory business trust is not consolidated in accordance with FASB ASC 810-10. Distributions on the subordinated debentures owned by the subsidiary trust have been classified as interest expense in the Consolidated Statements of Income.

38

CONNECTONE BANCORP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Note 13 - Subordinated Debentures – (continued)

The following table summarizes the mandatory redeemable trust preferred securities of the Company’s Statutory Trust II at March 31, 2016 and December 31, 2015.

	Securities					Redeemable by
Issuance Date	Issued		Liquidation Value	Coupon Rate	Maturity	Issuer Beginning
12/19/2003	$	5,000,000	$1,000 per Capital	Floating 3-month	01/23/2034	01/23/2009
			Security	LIBOR + 285 Basis
				Points

During June 2015, the Parent Corporation issued $50 million in aggregate principal amount of fixed-to-floating rate subordinated notes (the “Notes”) to certain institutional investors. The Notes are non-callable for five years, have a stated maturity of July 1, 2025, and bear interest at a fixed rate of 5.75% per year, from and including June 30, 2015 to, but excluding July 1, 2020. From and including July 1, 2020 to the maturity date or early redemption date, the interest rate will reset quarterly to a level equal to the then current three-month LIBOR rate plus 393 basis points. As of March 31, 2016, unamortized costs related to the debt issuance were $763,000.

The net proceeds from the sale of the Notes were used by the Parent Corporation to contribute $35.0 million of common equity to the Bank on June 30, 2015, and to repay, on March 11, 2016, $11.25 million of SBLF preferred issued to the U.S. Treasury. Remaining funds will be used for general corporate purposes.

In connection with the issuance of the Notes, the Parent Corporation obtained ratings from Kroll Bond Rating Agency (“KBRA”). KBRA assigned investment grade ratings of BBB- for the Company’s subordinated debt and a senior deposit rating of BBB+ for the Bank.

Note 14 – Offsetting Assets and Liabilities

Certain financial instrument-related assets and liabilities may be eligible for offset on the consolidated statements of condition because they are subject to master netting agreements or similar agreements. However, the Company does not elect to offset such arrangements on the consolidated financial statements. The Company enters into interest rate swap agreements with financial institution counterparties. For additional detail regarding interest rate swap agreements refer to Footnote 5 within this section. In the event of default on, or termination of, any one contract, both parties have the right to net settle multiple contracts. Also, certain interest rate swap agreements may require the Company to receive or pledge cash or financial instrument collateral based on the contract provisions.

39

CONNECTONE BANCORP, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Note 14 – Offsetting Assets and Liabilities – (continued)

The Company also entered into an agreement to sell securities subject to an obligation to repurchase the same or similar securities, referred to as a repurchase agreement. Under this agreement, the Company may transfer legal control over the assets but still retain effective control through an agreement that both entitles and obligates the Company to repurchase the assets. The obligation to repurchase the securities is reflected as a liability in the Company’s consolidated statement of condition, while the securities underlying the repurchase agreements remain in the respective investment securities account, therefore there is no offsetting or netting of the investment securities assets with the repurchase agreement liability. The following table presents information about financial instruments that are eligible for offset as of March 31, 2016 and December 31, 2015:

							Gross Amounts Not Offset
			Gross Amounts		Net Amounts				Cash or
			Offset in the		of Assets Presented in the		Financial		Financial
	Gross Amounts		Statement of		Statement of Financial		Instruments		Instrument		Net
	Recognized		Financial Position		Position		Recognized		Collateral		Amount
	(in thousands)
March 31, 2016
Assets:
Interest rate swaps	$	-	$	-	$	-	$	-	$	-	$	-
Liabilities:
Interest rate swaps	$	1,568	$	-	$	1,568	$	-	$	1,568	$	-
Repurchase
agreements		15,000		-		15,000		-		15,000		-
Total	$	16,568	$	-	$	16,568	$	-	$	16,568	$	-
December 31, 2015
Assets:
Interest rate swaps	$	48	$	-	$	-	$	-	$	-	$	-
Liabilities:
Interest rate swaps	$	131	$	-	$	131	$	-	$	131	$	-
Repurchase
agreements		15,000		-		15,000		-		15,000		-
Total	$	15,131	$	-	$	15,131	$	-	$	15,131	$	-

40

CONNECTONE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Note 15 – Presentation of Debt Issuance Costs

As of January 1, 2016, the Company adopted Accounting Standards Update (“ASU”) No. 2015-03 “Simplifying the Presentation of Debt Issuance Costs,” which requires that debt issuance costs be presented in the consolidated statement of condition as a direct deduction from the carrying amount of debt liability. This ASU is required to be applied retrospectively to all periods presented. The following table summarizes the impact of retrospective application to the consolidated statement of condition for the year ended December 31, 2015:

	December 31,
(dollars in thousands)	2015
Other assets
As previously reported	$	24,908
As reported under the new guidance		24,096
Total assets
As previously reported	$	4,016,721
As reported under the new guidance		4,015,909
Subordinated debentures
As previously reported	$	55,155
As reported under the new guidance		54,343
Total liabilities
As previously reported	$	3,539,377
As reported under the new guidance		3,538,565

41

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

The purpose of this analysis is to provide the reader with information relevant to understanding and assessing the Company’s results of operations for the periods presented herein and financial condition as of March 31, 2016 and December 31, 2015. In order to fully understand this analysis, the reader is encouraged to review the consolidated financial statements and accompanying notes thereto appearing elsewhere in this report.

Cautionary Statement Concerning Forward-Looking Statements

This report includes forward-looking statements within the meaning of Sections 27A of the Securities Act of 1933, as amended, and 21E of the Securities Exchange Act of 1934, as amended, that involve inherent risks and uncertainties. This report contains certain forward-looking statements with respect to the financial condition, results of operations, plans, objectives, future performance and business of ConnectOne Bancorp Inc. and its subsidiaries, including statements preceded by, followed by or that include words or phrases such as “believes,” “expects,” “anticipates,” “plans,” “trend,” “objective,” “continue,” “remain,” “pattern” or similar expressions or future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” “can,” “may” or similar expressions. There are a number of important factors that could cause future results to differ materially from historical performance and these forward-looking statements. Factors that might cause such a difference include, but are not limited to: (1) competitive pressures among depository institutions may increase significantly; (2) changes in the interest rate environment may reduce interest margins; (3) prepayment speeds, loan origination and sale volumes, charge-offs and loan and lease loss provisions may vary substantially from period to period; (4) general economic conditions may be less favorable than expected; (5) political developments, sovereign debt problems, wars or other hostilities may disrupt or increase volatility in securities markets or other economic conditions; (6) legislative or regulatory changes or actions may adversely affect the businesses in which ConnectOne Bancorp is engaged, including, without limitation, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and regulations issued thereunder; (7) changes and trends in the securities markets may adversely impact ConnectOne Bancorp; (8) a delayed or incomplete resolution of regulatory issues could adversely impact planning by ConnectOne Bancorp; (9) the impact on reputation risk created by the developments discussed above on such matters as business generation and retention, funding and liquidity could be significant; and (10) the outcome of regulatory and legal investigations and proceedings may not be anticipated. Further information on other factors that could affect the financial results of ConnectOne Bancorp is included in Item 1a. of ConnectOne Bancorp’s Annual Report on Form 10-K and in ConnectOne Bancorp’s other filings with the Securities and Exchange Commission. These documents are available free of charge at the Commission’s website at http://www.sec.gov and/or from ConnectOne Bancorp, Inc.

Critical Accounting Policies and Estimates

The accounting and reporting policies followed by ConnectOne Bancorp, Inc. and its subsidiaries (collectively, the “Company”) conform, in all material respects, to U.S. generally accepted accounting principles. In preparing the consolidated financial statements, management has made estimates, judgments and assumptions that affect the reported amounts of assets and liabilities as of the dates of the consolidated statements of condition and for the periods indicated in the consolidated statements of operations. Actual results could differ significantly from those estimates.

The Company’s accounting policies are fundamental to understanding Management’s Discussion and Analysis (“MD&A”) of financial condition and results of operations. The Company has identified the determination of the allowance for loan and lease losses, the other-than-temporary impairment evaluation of securities, the evaluation of the impairment of goodwill and the evaluation of deferred tax assets to be critical because management must make subjective and/or complex judgments about matters that are inherently uncertain and could be most subject to revision as new information becomes available. Additional information on these policies is provided below.

Allowance for loan and lease losses and Related Provision

The allowance for loan and lease losses represents management’s estimate of probable credit losses inherent in the loan portfolio. Determining the amount of the allowance for loan and lease losses is considered a critical accounting estimate because it requires significant judgment and the use of estimates related to the amount and timing of expected future cash flows on impaired loans, estimated losses on pools of homogeneous loans based on historical loss experience, individual credit situation and consideration of current economic trends and conditions, all of which may be susceptible to significant change. The loan portfolio also represents the largest asset type on the consolidated statements of condition.

The evaluation of the adequacy of the allowance for loan and lease losses includes, among other factors, an analysis of historical loss rates by loan category applied to current loan totals. However, actual loan and lease losses may be higher or lower than historical trends, which vary. Actual losses on specified problem loans, which also are provided for in the evaluation, may vary from estimated loss percentages, which are established based upon a limited number of potential loss classifications.

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The allowance for loan and lease losses is established through a provision for loan and lease losses charged to expense. Management believes that the current allowance for loan and lease losses will be adequate to absorb loan and lease losses on existing loans that may become uncollectible based on the evaluation of known and inherent risks in the loan portfolio. The evaluation takes into consideration such factors as changes in the nature and size of the portfolio, overall portfolio quality, and specific problem loans and current economic conditions which may affect the borrowers’ ability to pay. The evaluation also details historical losses by loan category and the resulting loan and lease loss rates which are projected for current loan total amounts. Loss estimates for specified problem loans are also detailed. All of the factors considered in the analysis of the adequacy of the allowance for loan and lease losses may be subject to change. To the extent actual outcomes differ from management estimates, additional provisions for loan and lease losses may be required that could materially adversely impact earnings in future periods. Additional information can be found in Note 1 of the Notes to Consolidated Financial Statements.

Other-Than-Temporary Impairment of Investment Securities

Investment securities are evaluated on at least a quarterly basis, and more frequently when market conditions warrant such an evaluation, to determine whether a decline in their value is other-than-temporary. FASB ASC 320-10-65 clarifies the interaction of the factors that should be considered when determining whether a debt security is other–than-temporarily impaired. For debt securities, management assesses whether (a) it has the intent to sell the security and (b) it is more likely than not that it will be required to sell the security prior to its anticipated recovery.

In instances when a determination is made that an other-than-temporary impairment exists but the investor does not intend to sell the debt security and it is not more likely than not that it will be required to sell the debt security prior to its anticipated recovery, the other-than-temporary impairment is separated into (a) the amount of the total other-than-temporary impairment related to a decrease in cash flows expected to be collected from the debt security (the credit loss) and (b) the amount of the total other-than-temporary impairment related to all other factors. The amount of the total other-than-temporary impairment related to the credit loss is recognized in earnings. The amount of the total other-than-temporary impairment related to all other factors is recognized in other comprehensive income.

Fair Value of Investment Securities

FASB ASC 820-10-35 clarifies the application of the provisions of FASB ASC 820-10-05 in an inactive market and how an entity would determine fair value in an inactive market. The Company applies the guidance in FASB ASC 820-10-35 when determining fair value for the Company’s private label collateralized mortgage obligations, pooled trust preferred securities and single name corporate trust preferred securities. See Note 8 of the Notes to Consolidated Financial Statements for further discussion.

FASB ASC 820-10-65 provides additional guidance for estimating fair value in accordance with FASB ASC 820-10-05 when the volume and level of activity for the asset or liability have significantly decreased. This ASC also includes guidance on identifying circumstances that indicate a transaction is not orderly.

Goodwill

The Company adopted the provisions of FASB ASC 350-10, which requires that goodwill be reported separate from other intangible assets in the Consolidated Statements of Condition and not be amortized but rather tested for impairment annually or more frequently if impairment indicators arise. No impairment charge was deemed necessary.

Income Taxes

The objectives of accounting for income taxes are to recognize the amount of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in an entity’s financial statements or tax returns. Judgment is required in assessing the future tax consequences of events that have been recognized in the Company’s consolidated financial statements or tax returns.

Fluctuations in the actual outcome of these future tax consequences could impact the Company’s consolidated financial condition or results of operations. Note 12 of the Notes to Consolidated Financial Statements included in the Company’s Form 10-K for the year ended December 31, 2015 includes additional discussion on the accounting for income taxes.

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Operating Results Overview

Net income available to common stockholders for both the three months ended March 31, 2016 and March 31, 2015 amounted to $10.4 million, or $0.34 per diluted share.

Net Interest Income and Margin

Net interest income is the difference between the interest earned on the portfolio of earning assets (principally loans and investments) and the interest paid for deposits and borrowings, which support these assets. Net interest income is presented on a tax-equivalent basis by adjusting tax-exempt income (primarily interest earned on obligations of state and political subdivisions) by the amount of income tax which would have been paid had the assets been invested in taxable issues. Net interest margin is defined as net interest income on a tax-equivalent basis as a percentage of total average interest-earning assets.

Fully taxable equivalent net interest income for the first quarter of 2016 was $32.0 million, an increase of $3.1 million, or 10.7%, from the same quarter of 2015. This was a result of a 17.2% increase in average interest-earning assets due to significant organic loan growth, partially offset by a 23 basis-point contraction of the net interest margin. Included in net interest income was accretion and amortization of purchase accounting adjustments of $1.3 million during the first quarter of 2016 and $1.8 million in the same quarter of 2015. Excluding these purchase accounting adjustments, the adjusted net interest margin was 3.31% in the first quarter of 2016, 15 basis points lower than the 2015 first quarter adjusted net interest margin of 3.46%. The reduction in the adjusted net interest margin in the first quarter of 2016 versus the same 2015 period was attributable to a decline in yield on loans combined with an increase in overall funding rates. The decline in loan yields largely reflects the impact of a protracted low interest rate environment, while the increase in the cost of funds was due to the June 30, 2015 issuance of approximately $50 million in subordinated debt, the extension of liability duration in connection with interest rate risk management, and the impact of an increasingly competitive environment for deposits.

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Average Statements of Condition with Interest and Average Rates

The following tables, “Average Statements of Condition with Interest and Average Rates”, present for the three months ended March 31, 2016 and 2015, the Company’s average assets, liabilities and stockholders’ equity. The Company’s net interest income, net interest spread and net interest margin are also reflected.

	Three Months Ended March 31,
	2016						2015
			Interest						Interest
	Average		Income/		Average		Average		Income/		Average
	Balance		Expense		Rate (7)		Balance		Expense		Rate (7)
	(dollars in thousands)
Interest-earning assets:
Investment securities (1) (2)	$	415,481	$	3,499	3.39	%	$	509,931	$	4,268	3.39	%
Loans (2) (3) (4)		3,189,572		35,206	4.44			2,571,552		29,453	4.65
Federal funds sold and interest bearing with banks		90,712		134	0.59			76,138		43	0.23
Restricted investment in bank stocks		33,193		352	4.26			25,273		220	3.54
Total interest-earning assets		3,728,958		39,191	4.23			3,182,894		33,984	4.33
Allowance for loan and lease losses		(27,221)						(14,749)
Noninterest earning assets		332,638						298,675
Total assets	$	4,034,375					$	3,466,820
Interest-bearing liabilities:
Money market deposits	$	782,757	$	812	0.42		$	707,474	$	722	0.41
Savings deposits		215,491		157	0.29			222,613		162	0.29
Time deposits		807,801		2,535	1.26			688,989		1,818	1.07
Other interest-bearing deposits		377,696		435	0.46			349,628		323	0.37
Total interest-bearing deposits		2,183,745		3,939	0.73			1,968,704		3,025	0.62
Borrowings		684,469		2,413	1.42			534,052		1,968	1.49
Capital lease		2,874		43	6.02			2,989		45	6.10
Subordinated debentures (8)		55,155		811	5.91			5,155		40	3.14
Total interest-bearing liabilities		2,926,243		7,206	0.99			2,510,900		5,078	0.82
Demand deposits		609,312						481,500
Other liabilities		16,317						20,200
Total noninterest-bearing liabilities		625,629						501,700
Stockholders’ equity		482,503						454,220
Total liabilities and stockholders’ equity	$	4,034,375					$	3,466,820
Net interest income (tax equivalent basis)				31,985						28,906
Net interest spread (5)					3.24	%					3.51	%
Net interest margin (6)					3.45	%					3.68	%
Tax equivalent adjustment				(665)						(614)
Net interest income			$	31,320					$	28,292

(1)	Average balances are based on amortized cost.
(2)	Interest income is presented on a tax equivalent basis using 35% federal tax rate.
(3)	Includes loan fee income.
(4)	Loans include nonaccrual loans.
(5)	Represents difference between the average yield on interest earning assets and the average cost of interest bearing liabilities and is presented on a tax equivalent basis.
(6)	Represents net interest income on a tax equivalent basis divided by average total interest-earning assets.
(7)	Rates are annualized.
(8)	Amount does not reflect netting of debt issuance costs of $763 for the three months ended March 31, 2016.

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Noninterest Income

Noninterest income totaled $1.2 million in the first quarter of 2016, a decrease of $0.4 million from $1.6 million in the comparable prior-year quarter. There were no securities sold during the first quarter of 2016. Securities gains were $0.5 million for the first quarter of 2015.

Noninterest income includes bank-owned life insurance income, deposit and loan fees, annuities and life insurance commissions, and gains on sales of residential mortgages in the secondary market and represents a relatively small portion of the Bank’s total revenue. Although management intends to continue its strategy of de-emphasizing service charges in order to attract new and retain existing clients, it expects fee income to increase modestly in future periods.

Noninterest Expense

Noninterest expenses for the first quarter of 2016 were $14.4 million, a $1.7 million, or 13.6%, increase from $12.6 million in the first quarter of 2015. The increase was largely attributable to a $1.0 million increase in salary and employee benefits, $0.2 million in professional and consulting expense, $0.2 in occupancy and equipment expense, and $0.1 million in data processing, all resulting from increased levels of business and staff resulting from organic growth.

Income Taxes

Income tax expense was $4.8 million for the first quarter of 2016, compared to $5.0 million for the first quarter of 2015, resulting in effective tax rates of 31.5% and 32.6% for the first quarter of 2016 and first quarter of 2015, respectively. The effective tax rate for the full year 2016 is currently expected to be approximately 31.5%.

Financial Condition

Loan Portfolio

Commercial lending is the Company’s primary business activity. The Company’s loan portfolio consists of commercial, residential and consumer loans, serving the diverse client base in its market area. The composition of the Company’s portfolio remains relatively constant but can change due to factors such as the economic climate, the level and fluctuations in interest rates, real estate values and employment metrics. Organic growth (i.e., growth other than through mergers and acquisitions) is generated through business development, repeat client requests for new financings, penetration into existing markets and entry into new markets.

The Company seeks to create growth in commercial lending by offering client-focused products, competitive pricing and by capitalizing on the positive trends in its market area. Products offered are designed to meet the financial requirements of the Company’s clients. It is the objective of the Company’s credit policies to diversify the commercial loan portfolio to limit concentrations in any single segment.

The following table sets forth the composition of our loan portfolio, excluding loans held for sale and unearned net origination fees and costs, by type of loan at the periodsindicated.

							Dollar
	March 31, 2016			December 31, 2015			Change
	Amount		%	Amount		%	2016 vs. 2015
	(dollars in thousands)
Commercial	$	601,708	18.4%	$	570,116	18.4%	$	31,592
Commercial real estate		2,028,301	62.1		1,966,696	63.4		61,605
Commercial construction		402,594	12.3		328,838	10.6		73,756
Residential real estate		231,319	7.1		233,690	7.5		(2,371)
Consumer		1,851	0.1		2,454	0.1		(603)
Gross loans	$	3,265,773	100.0%	$	3,101,794	100.0%	$	163,979

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At March 31, 2016, total gross loans amounted to $3.3 billion, an increase of $0.2 billion, or 5.3%, as compared to December 31, 2015. Net loan growth was primarily attributable to multi-family ($32 million, excluding a $28 million loan reclassified during the current quarter as multi-family from other commercial real estate), commercial and industrial (“C&I”) ($32 million), other commercial real estate ($29 million, excluding the aforementioned reclassification) and construction ($74 million). Management’s current intent is to maintain a multi-family portfolio concentration in the range of 25-30% of total loans, while growing the C&I and construction segments. The growth in loans was funded with increases in deposits, borrowings and subordinated debt.

At March 31, 2016, acquired loans remaining in the loan portfolio totaled $0.8 billion, compared to $0.9 billion as of December 31, 2015.

Allowance for Loan and Lease Losses and Related Provision

The purpose of the allowance for loan and lease losses (the “ALLL”) is to establish a valuation allowance for probable incurred losses in the loan portfolio. Additions to the ALLL are made through provisions charged against current operations and through recoveries made on loans previously charged off. The ALLL is maintained at an amount considered adequate by management to provide for probable credit losses inherent in the loan portfolio based upon historical losses and a periodic evaluation of external and portfolio risk factors. In establishing an appropriate ALLL, an assessment of the individual borrowers, a determination of the value of the underlying collateral, a review of historical loss experience and an analysis of the levels and trends of loan categories, delinquencies and problem loans are considered. Such factors as the level and trend of interest rates and current economic conditions and peer group statistics are also reviewed. The Company’s analysis of its ALLL also takes into consideration the potential impact that current trends may have on the Company’s borrower base.

Although management uses the best information available, the level of the allowance for loan and lease losses remains an estimate, which is subject to significant judgment and short-term change. Various regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for loan and lease losses. Such agencies may require the Company to increase the ALLL based on their analysis of information available to them at the time of their examination. Furthermore, the majority of the Company’s loans are secured by real estate in the State of New Jersey. Future adjustments to the ALLL may be necessary due to economic factors impacting New Jersey real estate and the economy in general, as well as operating, regulatory and other conditions beyond the Company’s control.

At March 31, 2016, the allowance was $29.1 million as compared to $26.6 million at December 31, 2015. Provisions to the allowance for the three months ended March 31, 2016 totaled $3.0 million, compared to $1.8 for the same period in 2015. The increase to the three months ended March 31, 2016 primarily resulted from approximately $1.5 million of specific allocations to the Bank’s taxi medallion portfolio, partially offset by a reduced level of non-Taxi specific allocations. See “Asset Quality” for a discussion of the taxi cab medallion portfolio. There were $498 thousand in net charge-offs during the three months ended March 31, 2016, compared to $52 thousand in net charge-offs for the three months ended March 31, 2015. The allowance for loan and lease losses as a percentage of total loans amounted to 0.89% at March 31, 2016 compared to 0.86% at December 31, 2015 and 0.60% at March 31, 2015.

The level of the allowance for the respective periods of 2016 and 2015 reflects the credit quality within the loan portfolio, the loan volume recorded during the periods, the changing composition of the commercial and residential real estate loan portfolios and other related factors. In management’s view, the level of the ALLL at March 31, 2016 is adequate to cover losses inherent in the loan portfolio. Management’s judgment regarding the adequacy of the allowance constitutes a “Forward-Looking Statement” under the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from management’s analysis, based principally upon the factors considered by management in establishing the allowance.

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Changes in the allowance for loan and lease losses are presented in the following table for the periods indicated.

	Three Months Ended
	March 31,
	2016		2015
	(dollars in thousands)
Average loans for the period	$	3,189,572	$	2,571,552
Loans receivable at end of period	$	3,263,813	$	2,640,739
Analysis of the Allowance for loan and lease losses:
Balance - beginning of year	$	26,572	$	14,160
Charge-offs:
Commercial		(445)		(45)
Commercial real estate		-		(4)
Residential real estate		(67)		-
Consumer		-		(11)
Total charge-offs		(512)		(60)
Recoveries:
Commercial		1		6
Commercial real estate		13		-
Residential real estate		-		1
Consumer		-		1
Total recoveries		14		8
Net charge-offs		(498)		(52)
Provision for loan and lease losses		3,000		1,825
Balance - end of period	$	29,074	$	15,933
Ratio of annualized net charge-offs during the period to average loans during the period		0.06%		0.01%
Allowance for loan and lease losses as a percent of total loans		0.89%		0.60%

Asset Quality

The Company manages asset quality and credit risk by maintaining diversification in its loan portfolio and through review processes that include analysis of credit requests and ongoing examination of outstanding loans, delinquencies, and potential problem loans, with particular attention to portfolio dynamics and mix. The Company strives to identify loans experiencing difficulty early enough to correct the problems, to record charge-offs promptly based on realistic assessments of current collateral values and cash flows, and to maintain an adequate allowance for loan and lease losses at all times.

It is generally the Company’s policy to discontinue interest accruals once a loan is past due as to interest or principal payments for a period of ninety days. When a loan is placed on nonaccrual status, interest accruals cease and uncollected accrued interest is reversed and charged against current income. Payments received on nonaccrual loans are generally applied against principal. A loan may be restored to an accruing basis when all past due amounts have been collected. Loans past due 90 days or more which are both well-secured and in the process of collection may remain on an accrual basis.

Nonperforming assets include nonaccrual loans and other real estate owned. Nonaccrual loans represent loans on which interest accruals have been suspended. In general, it is the policy of management to consider the charge-off of uncollectible amounts of loans at the point they become past due 90 days. Performing troubled debt restructured loans represent loans to borrowers experiencing financial difficulties on which a concession was granted, such as a reduction in interest rate below the current market rate for new debt with similar risks or modified repayment terms, and are performing under the restructured terms.

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The following table sets forth, as of the dates indicated, the amount of the Company’s nonaccrual loans, other real estate owned (“OREO”), performing troubled debt restructurings (“TDRs”) and loans past due 90 days and still accruing:

	March 31,		December 31,
	2016		2015
Nonaccrual loans	$	21,450	$	20,737
OREO		1,696		2,549
Total nonperforming assets	$	23,146	$	23.286
Performing TDRs	$	95,122	$	85,925
Loans past due 90 days and still
accruing	$	6,631	$	-
Nonaccrual loans to total loans
receivable		0.66%		0.67%
Nonperforming assets to total assets		0.57%		0.58%
Nonperforming assets, performing
TDRs, and loans past due 90 days
and still accruing to total loans
receivable		3.83%		3.52%

The increase in TDRs was primarily due to six loans secured by New York City taxi medallions totaling $8.0 million that were modified during the first quarter of 2016. Four of these modifications consisted of short-term extensions of the loans’ contractual maturity dates at the pre-existing contractual rate and in two of these modifications interest rates decreased from approximately 3% to 1.3%-1.6%. These six loans were accruing prior to modification, while five remained in accrual status post-modification.

As of March 31, 2016, loans secured by New York City taxi medallions totaled $103.2 million, of which $99.9 million was current and $1.4 million was past due 30-59 days. Troubled debt restructurings associated with this portfolio totaled $86.4 million and total nonaccrual loans were $1.9 million. The Company has allocated $6.0 million in specific allocations with respect to loans whose loan terms had been modified in troubled debt restructurings as of March 31, 2016. The average net loan-to-value ratio of the medallion portfolio was approximately 92%, based on the Company’s valuation of the medallions discussed below.

The $6.0 million in specific allocations referenced above were calculated based on the present value of estimated cash flows, including contractual debt interest service through maturity, and principal repayments based on the fair value of the collateral excluding any consideration for personal guarantees of borrowers, which provide an additional source of repayment but cannot be relied upon. The valuation per corporate medallion used for the calculation at March 31, 2016 was approximately $775,000. An additional $1.5 million specific allocation was required at March 31, 2016 due to a decline in the Company’s estimated valuation of taxi medallions from December 31, 2015, when the specific allocation was $4.5 million.

Investment Portfolio

At March 31, 2016, the principal components of the investment securities portfolio were U.S. Treasury and agency obligations, federal agency obligations, mortgage-backed securities, obligations of U.S. states and political subdivisions, corporate bonds and notes, trust preferred securities, asset backed securities and equity securities.

During the three months ended March 31, 2016, no investment securities were sold from the available-for-sale portfolio. The cash flow from the investment securities was primarily used to fund loan growth.

For the three months ended March 31, 2016, average investment securities decreased $94.5 million to approximately $415.5 million, or 11.1% of average interest-earning assets, from $509.9 million on average, or 16.0% of average interest-earning assets, for the comparable period in 2015.

At March 31, 2016, net unrealized gains on investment securities available-for-sale, which are carried as a component of accumulated other comprehensive income and included in stockholders’ equity, net of tax, amounted to $1.3 million as compared with net unrealized gains of $0.7 million at December 31, 2015. At March 31, 2016, the net unrealized gains and losses on investment securities held-to-maturity that were transferred from securities available-for-sale, are carried, net of tax, as a component of accumulated other comprehensive income and included in stockholders’ equity. The gross unrealized losses associated with agency securities and federal agency obligations, mortgage-backed securities, corporate bonds and tax-exempt securities are not considered to be other-than-temporary because their unrealized losses are related to changes in interest rates and do not affect the expected cash flows of the underlying collateral or issuer.

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Interest Rate Sensitivity Analysis

The principal objective of our asset and liability management function is to evaluate the interest-rate risk included in certain balance sheet accounts; determine the level of risk appropriate given our business focus, operating environment, and capital and liquidity requirements; establish prudent asset concentration guidelines; and manage the risk consistent with Board approved guidelines. We seek to reduce the vulnerability of our operations to changes in interest rates, and actions in this regard are taken under the guidance of the Bank’s Asset Liability Committee (the “ALCO”). The ALCO generally reviews our liquidity, cash flow needs, maturities of investments, deposits and borrowings, and current market conditions and interest rates.

We currently utilize net interest income simulation and economic value of equity (“EVE”) models to measure the potential impact to the Bank of future changes in interest rates. As of March 31, 2016 and December 31, 2015 the results of the models were within guidelines prescribed by our Board of Directors. If model results were to fall outside prescribed ranges, action, including additional monitoring and reporting to the Board, would be required by the ALCO and Bank’s management.

The net interest income simulation model attempts to measure the change in net interest income over the next one-year period, and over the next three-year period on a cumulative basis, assuming certain changes in the general level of interest rates.

Based on our model, which was run as of March 31, 2016, we estimated that over the next one-year period a 200 basis-point instantaneous increase in the general level of interest rates would increase our net interest income by 5.82%, while a 100 basis-point instantaneous decrease in interest rates would decrease net interest income by 3.51%. As of December 31, 2015, we estimated that over the next one-year period, a 200 basis-point instantaneous increase in the general level of interest rates would increase our net interest income by 5.65%, while a 100 basis-point instantaneous decrease in the general level of interest rates would decrease our net interest income by 3.62%.

Based on our model, which was run as of March 31, 2016, we estimated that over the next three years, on a cumulative basis, a 200 basis-point instantaneous increase in the general level of interest rates would increase our net interest income by 6.91%, while a 100 basis-point instantaneous decrease in interest rates would decrease net interest income by 5.29%. As of December 31, 2015, we estimated that over the next three years, on a cumulative basis, a 200 basis-point instantaneous increase in the general level of interest rates would increase our net interest income by 6.66%, while a 100 basis-point instantaneous decrease in interest rates would decrease net interest income by 5.59%.

An EVE analysis is also used to dynamically model the present value of asset and liability cash flows with instantaneous rate shocks of up 200 basis points and down 100 basis points. The economic value of equity is likely to be different as interest rates change. Our EVE as of March 31, 2016, would decline by 10.32% with an instantaneous rate shock of up 200 basis points, and increase by 5.3% with an instantaneous rate shock of down 100 basis points. Our EVE as of December 31, 2015, would decline by 9.65% with an instantaneous rate shock of up 200 basis points, and increase by 8.20% with an instantaneous rate shock of down 100 basis points.

			Estimated Change in
Interest Rates	Estimated		EVE				Interest Rates	Estimated		Estimated Change in NII
(basis points)	EVE		Amount		%		(basis points)	NII		Amount		%
+300	$	368,986	$	(70,461)	(16.0)	%	+300	$	132,218	$	10,503	8.6	%
+200		394,087		(45,360)	(10.3)		+200		128,794		7,079	5.8
+100		417,015		(22,432)	(5.1)		+100		125,082		3,367	2.8
0		439,447		-	0.0		0		121,715		-	0.0
-100		462,792		23,345	5.3		-100		117,437		(4,278)	(3.5)

Estimates of Fair Value

The estimation of fair value is significant to a number of the Company’s assets, including loans held for sale and investment securities available-for-sale. These are all recorded at either fair value or the lower of cost or fair value. Fair values are volatile and may be influenced by a number of factors. Circumstances that could cause estimates of the fair value of certain assets and liabilities to change include a change in prepayment speeds, discount rates, or market interest rates. Fair values for most available-for-sale investment securities are based on quoted market prices. If quoted market prices are not available, fair values are based on judgments regarding future expected loss experience, current economic condition risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature, involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

50

Impact of Inflation and Changing Prices

The financial statements and notes thereto presented elsewhere herein have been prepared in accordance with generally accepted accounting principles, which require the measurement of financial position and operating results in terms of historical dollars without considering the change in the relative purchasing power of money over time due to inflation. The impact of inflation is reflected in the increased cost of operations; unlike most industrial companies, nearly all of the Company’s assets and liabilities are monetary. As a result, interest rates have a greater impact on performance than do the effects of general levels of inflation. Interest rates do not necessarily move in the same direction or to the same extent as the prices of goods and services.

Liquidity

Liquidity is a measure of a bank’s ability to fund loans, withdrawals or maturities of deposits, and other cash outflows in a cost-effective manner. Our principal sources of funds are deposits, scheduled amortization and prepayments of loan principal, maturities of investment securities, and funds provided by operations. While scheduled loan payments and maturing investments are relatively predictable sources of funds, deposit flow and loan prepayments are greatly influenced by general interest rates, economic conditions and competition.

At March 31, 2016, the amount of liquid assets remained at a level management deemed adequate to ensure that, on a short and long-term basis, contractual liabilities, depositors’ withdrawal requirements, and other operational and client credit needs could be satisfied. As of March 31, 2016, liquid assets (cash and due from banks, interest-bearing deposits with banks and unencumbered investment securities) were $368.2 million, which represented 9.0% of total assets and 10.4% of total deposits and borrowings, compared to $466.5 million at December 31, 2015, which represented 11.6% of total assets and 13.5% of total deposits and borrowings on such date. The decrease in the current period was mainly attributable to a reduction in cash balances of $82.6 million at March 31, 2016 from December 31, 2015.

The Bank is a member of the Federal Home Loan Bank of New York and, based on available qualified collateral as of March 31, 2016, had the ability to borrow $1.6 billion. In addition, at March 31, 2016, the Bank had in place borrowing capacity of $37 million through correspondent banks. The Bank also has a credit facility established with the Federal Reserve Bank of New York for direct discount window borrowings with capacity based on pledged collateral of $67.3 million. At March 31, 2016, the Bank had aggregate available and unused credit of $696.4 million, which represents the aforementioned facilities totaling $1.3 billion net of $631 million in outstanding borrowings. At March 31, 2016, outstanding commitments for the Bank to extend credit were $584 million.

Cash and cash equivalents totaled $118.3 million on March 31, 2016, decreasing by $82.6 million from $200.9 million at December 31, 2015. Operating activities provided $7.3 million in net cash. Investing activities used $153.6 million in net cash, primarily reflecting an increase in loans. Financing activities provided $63.6 million in net cash, primarily reflecting a net increase of $102.2 million in deposits, a redemption of $11.3 million from the repayment of preferred stock, and a net decrease of $25.0 million in borrowings (consisting of $50.0 million in new borrowings offset by repayments of $75.0 million).

Deposits

Total deposits increased by $102.1 million, or 3.7% to $2.9 billion at March 31, 2016, which was primarily attributable to increases in time deposits, interest-bearing demand and money market, offset by a decrease in non-interest-bearing demand. The following table sets forth the composition of our deposit base by the periodsindicated.

									Dollar
	March 31, 2016				December 31, 2015				Change
	Amount		%		Amount		%		2016 vs. 2015
	(dollars in thousands)
Demand, noninterest-bearing	$	614,508	21.2	%	$	650,775	23.3	%	$	(36,267)
Demand, interest-bearing & NOW		517,809	17.9			490,380	17.6			27,429
Money market		678,222	23.5			658,695	23.6			19,527
Savings		219,865	7.6			216,399	7.8			3,466
Time		862,667	29.8			774,717	27.7			87,950
Total deposits	$	2,893,071	100.0	%	$	2,790,966	100.0	%	$	102,105

51

Subordinated Debentures

During December 2003, Center Bancorp Statutory Trust II, a statutory business trust and wholly-owned subsidiary of the Parent Corporation issued $5.0 million of MMCapS capital securities to investors due on January 23, 2034. The trust loaned the proceeds of this offering to the Company and received in exchange $5.2 million of the Parent Corporation’s subordinated debentures. The subordinated debentures are redeemable in whole or part. The floating interest rate on the subordinated debentures is three-month LIBOR plus 2.85% and reprices quarterly. The rate at March 31, 2016 was 3.47%.

During June 2015, the Parent Corporation issued $50 million in aggregate principal amount of fixed-to-floating rate subordinated notes (the “Notes”) to certain institutional accredited investors. The net proceeds from the sale of the Notes were used by the Parent Corporation to contribute $35.0 million of common equity to the Bank on June 30, 2015, and to repay, on March 11, 2016, $11.25 million of SBLF preferred issued to the U.S. Treasury. Remaining funds will be used for general corporate purposes. The Notes are non-callable for five years, have a stated maturity of July 1, 2025, and bear interest at a fixed rate of 5.75% per year, from and including June 30, 2015 to, but excluding July 1, 2020. From and including July 1, 2020 to the maturity date or early redemption date, the interest rate will reset quarterly to a level equal to the then current three-month LIBOR rate plus 393 basis points.

Stockholders’ Equity

Total stockholders’ equity was $475 million at March 31, 2016, a decrease of $3 million from December 31, 2015. The decrease in stockholders’ equity was due to the $11.25 million payoff of our SBLF preferred stock, offset by an increase of $8 million in retained earnings and approximately $1 million of equity issuance related to stock-based compensation, including the exercise of options. Book value per common share was $15.74 at March 31, 2016, compared to $15.49 at December 31, 2015. Tangible book value (i.e., total stockholders’ equity less preferred stock, goodwill and other intangible assets) per common share was $10.78 at March 31, 2016, compared to $10.51 at December 31, 2015.

Tangible book value per share is a non-GAAP financial measure and represents tangible stockholders’ equity (or tangible book value) calculated on a per common share basis. The Company believes that a disclosure of tangible book value per share may be helpful for those investors who seek to evaluate the Company’s book value per share without giving effect to goodwill and other intangible assets. The following table presents a reconciliation of total book value per share to tangible book value per share as of March 31, 2016 and December 31, 2015.

	March 31,		December 31,
	2016		2015
	(in thousands, except for share data)
Stockholders’ equity	$	474,727	$	477,344
Less: Preferred stock		-		11,250
Less: Goodwill and other intangible assets		149,600		149,817
Tangible common stockholders’ equity	$	325,127	$	316,277
Common stock outstanding at period end		30,163,078		30,085,663
Book value per common share	$	15.74	$	15.49
Less: Goodwill and other intangible assets		4.96		4.98
Tangible book value per common share	$	10.78	$	10.51

Regulatory Capital and Capital Adequacy

The maintenance of a solid capital foundation is a primary goal for the Company. Accordingly, capital plans and dividend policies are monitored on an ongoing basis. The Company’s objective with respect to the capital planning process is to effectively balance the retention of capital to support future growth with the goal of providing stockholders with an attractive long-term return on their investment.

The Company and the Bank are subject to regulatory guidelines establishing minimum capital standards that involve quantitative measures of assets, and certain off-balance sheet items, as risk-adjusted assets under regulatory accounting practices.

52

The following is a summary of regulatory capital amounts and ratios as of March 31, 2016 for the Company and the Bank, compared with minimum capital adequacy requirements and the regulatory requirements for classification as a well-capitalized depository institution (dollars in thousands).

									To Be Well-Capitalized Under
					For Capital Adequacy				Prompt Corrective Action
	ConnectOne Bancorp, Inc.				Purposes				Provisions
At March 31, 2016	Amount		Ratio		Amount		Ratio		Amount		Ratio
	(dollars in thousands)
Tier 1 leverage capital	$	336,588	8.66	%	$	155,450	4.00	%		N/A	N/A
CET I risk-based ratio		331,433	9.06			164,619	4.50			N/A	N/A
Tier 1 risk-based capital		336,588	9.20			219,493	6.00			N/A	N/A
Total risk-based capital		415,662	11.36			292,657	8.00			N/A	N/A
									To Be Well-Capitalized Under
					For Capital Adequacy				Prompt Corrective Action
	ConnectOne Bank				Purposes				Provisions
At March 31, 2016	Amount		Ratio		Amount		Ratio		Amount		Ratio
	(dollars in thousands)
Tier 1 leverage capital	$	382,063	9.83	%	$	155,398	4.00	%	$	194,247	5.00	%
CET I risk-based ratio		382,063	10.45			164,556	4.50			237,964	6.50
Tier 1 risk-based capital		382,063	10.45			219,408	6.00			292,879	8.00
Total risk-based capital		411,137	11.24			292,544	8.00			366,099	10.00

N/A - not applicable

As of March 31, 2016, management believes that each of the Bank and the Company meet all capital adequacy requirements to which they are subject.

The new Basel III rules require a “capital conservation buffer,” for both the Company and the Bank. When fully phased in on January 1, 2019, each of the Company and the Bank will be required to maintain a 2.5% capital conservation buffer, above and beyond the capital levels otherwise required under applicable regulation. The implementation of this capital conservation buffer began on January 1, 2016 at a level of 0.625%, and will increase by 0.625% on each subsequent January 1 until it reaches 2.5% on January 1, 2019. Under this guidance banking institutions with a CET1, Tier 1 Capital Ratio and Total Risk Based Capital Ratio above the minimum regulatory adequate capital ratios but below the capital conservation buffer will face constraints on their ability to pay dividends, repurchase equity and pay discretionary bonuses to executive officers, based on the amount of the shortfall.

As of March 31, 2016 both the Company and Bank satisfy the capital conservation buffer requirements applicable to them. The lowest ratio at the Company is the CET 1 Capital Ratio which was 2.565% above the minimum buffer ratio and, at the Bank, the lowest ratio was the Total Risk Based Capital Ratio which was 2.605% above the minimum buffer ratio.

53

Item 3. Qualitative and Quantitative Disclosures about Market Risks

Market Risk

Interest rate risk management is our primary market risk. See "Item 2- Management's Discussion and Analysis of Financial Condition and Results of Operation- Interest Rate Sensitivity Analysis" herein for a discussion of our management of our interest rate risk.

54

Item 4. Controls and Procedures

a) Disclosure controls and procedures. As of the end of the Company’s most recently completed fiscal quarter covered by this report, the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures pursuant to Securities Exchange Act Rule 13a-15. Based upon that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that, the Company’s disclosure controls and procedures are not effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and are operating in an effective manner and that such information is accumulated and communicated to management, including the Company’s Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

In the course of business, and from time to time, the Company modifies loans at the request of borrowers. Modifications that involve borrowers experiencing financial difficulties and that result in concessions regarding loan terms including reduced interest rates, deferral of principal and extension of maturities can be deemed troubled debt restructurings. We recently identified material weaknesses in our controls over the identification and measurement of troubled debt restructurings in our taxi medallion portfolio, which, due to loan size and structure, is underwritten using market and industry data, and did not contain individual loan information required to accurately assess whether or not a modification should be deemed a TDR and the measurement of impairment for such TDRs. Upon completion of the review, it was determined that $75.4 million carrying value of taxi medallion loans, which were originally deemed to not be TDRs, should have been deemed TDRs when they were modified in April 2015.

b) Changes in internal controls over financial reporting. When the material weaknesses were identified, we enhanced our internal controls concerning identification of all TDRs by (i) strengthening our policies and procedures, including requirements that we obtain and analyze current information on each individual borrower and (ii) enhancing oversight, monitoring and approval authorities, before agreeing to any modification of a borrower’s loan. We also enhanced our internal controls concerning measurement of TDR impairment with regard to taxi medallion loans by employing the services of a third-party firm specializing in the industry and implementing a control to evaluate the results of the third party. Despite these control enhancements, we cannot assert as of March 31, 2016 that our material weaknesses have been fully remediated, due to insufficient time to fully test these controls.

Other than as discussed above, there have been no changes in the Company’s internal controls over financial reporting that occurred during the Company’s last fiscal quarter to which this report relates that have materially affected, or are reasonable likely to materially affect, the Company’s internal control over financial reporting.

55

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

The Company is not subject to any legal proceedings, which could have a materially adverse impact on its results of operations and financial condition.

Item 1a. Risk Factors

There have been no changes to the risks inherent in our business from those described under Item 1A – Risk Factors of our Annual Report on Form 10-K.

56

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

Not applicable

Item 3. Defaults Upon Senior Securities

Not applicable

Item 4. Mine Safety Disclosures

Not applicable

Item 5. Other Information

Not applicable

57

Item 6. Exhibits

Exhibit No.	Description
31.1	Certification of the Chief Executive Officer of the Parent Corporation Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of the Chief Financial Officer of the Parent Corporation Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of the Chief Executive Officer of the Parent Corporation Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of the Chief Financial Officer of the Parent Corporation Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Definition Taxonomy Extension Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

58

SIGNATURES

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

CONNECTONE BANCORP, INC.(Registrant)

By:	/s/ Frank Sorrentino III	By:	/s/ William S. Burns
	Frank Sorrentino III		William S. Burns
	Chairman and Chief Executive Officer		Executive Vice President and Chief Financial Officer
	Date: May 6, 2016		Date: May 6, 2016

59

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Frank Sorrentino III, certify that:

1. I have reviewed this quarterly report on Form 10-Q of ConnectOne Bancorp, Inc.;

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

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

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

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

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

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

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

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

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

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

Date: May 6, 2016	/s/ Frank Sorrentino III
	Frank Sorrentino III
	Chairman and Chief Executive Officer

60

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, William S. Burns, certify that:

1. I have reviewed this quarterly report on Form 10-Q of ConnectOne Bancorp, Inc.;

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

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

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

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

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

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

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

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

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

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

Date: May 6, 2016	/s/ William S. Burns
	William S. Burns
	Executive Vice President and Chief Financial Officer

61

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350,AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with this Quarterly Report of ConnectOne Bancorp, Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2016 filed with the Securities and Exchange Commission (the “Report”), I, Frank Sorrentino III, Chairman and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1. The Report fully complies with the requirements of Section 13 (a) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the consolidated financial condition of the Company as of the dates presented and the consolidated results of operations of the Company for the periods presented.

Date: May 6, 2016	/s/ Frank Sorrentino III
	Frank Sorrentino III
	Chairman and Chief Executive Officer

62

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350,AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with this Quarterly Report of ConnectOne Bancorp, Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2016 filed with the Securities and Exchange Commission (the “Report”), I, William S. Burns, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1. The Report fully complies with the requirements of Section 13 (a) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the consolidated financial condition of the Company as of the dates presented and the consolidated results of operations of the Company for the periods presented.

Date: May 6, 2016	/s/ William S. Burns
	William S. Burns
	Executive Vice President and Chief Financial Officer

63

XML

Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2016	May. 06, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	ConnectOne Bancorp, Inc.
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		30,179,900
Amendment Flag	false
Entity Central Index Key	0000712771
Entity Filer Category	Accelerated Filer
Document Period End Date	Mar. 31, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q1

XML

CONSOLIDATED STATEMENTS OF CONDITION - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
ASSETS
Cash and due from banks	$ 34,603	$ 31,291
Interest-bearing deposits with banks	83,656	169,604
Cash and cash equivalents	118,259	200,895
Investment securities:
Available-for-sale	191,331	195,770
Securities held-to-maturity (fair value of $229,470 and $230,558)	219,373	224,056
Loans receivable	3,263,813	3,099,007
Less: Allowance for loan and lease losses	29,074	26,572
Net loans receivable	3,234,739	3,072,435
Investment in restricted stock, at cost	31,487	32,612
Bank premises and equipment, net	22,652	22,333
Accrued interest receivable	12,604	12,545
Bank-owned life insurance	79,412	78,801
Other real estate owned	1,696	2,549
Goodwill	145,909	145,909
Core deposit intangibles	3,691	3,908
Other assets	29,847	24,096
Total assets	4,091,000	4,015,909
Deposits:
Noninterest-bearing	614,507	650,775
Interest-bearing	2,278,564	2,140,191
Total deposits	2,893,071	2,790,966
Borrowings	646,501	671,587
Subordinated debentures (net of $763 and $812 in debt issuance costs)	54,392	54,343
Other liabilities	22,309	21,669
Total liabilities	$ 3,616,273	$ 3,538,565
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock, $1,000 liquidation value per share, authorized 5,000,000 shares; issued and outstanding 11,250 shares of Series B preferred stock at December 31, 2015; total liquidation value of $11,250 at December 31, 2015		$ 11,250
Common stock, no par value, authorized 50,000,000 shares; issued 32,227,000 shares at March 31, 2016 and 32,149,585 at December 31, 2015; outstanding 30,163,078 shares at March 31, 2016 and 30,085,663 at December 31, 2015	$ 374,287	374,287
Additional paid-in capital	9,324	8,527
Retained earnings	112,663	104,606
Treasury stock, at cost (2,063,922 common shares at March 31, 2016 and December 31, 2015)	(16,717)	(16,717)
Accumulated other comprehensive loss	(4,830)	(4,609)
Total stockholders' equity	474,727	477,344
Total liabilities and stockholders' equity	$ 4,091,000	$ 4,015,909

XML

CONSOLIDATED STATEMENTS OF CONDITION (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Held-to-maturity, fair value (in Dollars)	$ 229,470	$ 230,558
Subordinated debentures, debt issuance costs	$ 763	$ 812
Preferred stock, liquidation value (in Dollars per share)	$ 1,000	$ 1,000
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred Stock, total liquidation value (in Dollars)	$ 11,250	$ 11,250
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	32,227,000	32,149,585
Common stock, shares outstanding	30,163,078	30,085,663
Treasury Stock, Shares	2,063,922	2,063,922
Series B Preferred Stock [Member]
Preferred stock, shares issued		11,250
Preferred stock, shares outstanding		11,250

XML

CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Interest income
Interest and fees on loans	$ 35,017	$ 29,314
Interest and dividends on investment securities:
Taxable	2,140	2,910
Tax-exempt	883	883
Dividends	352	220
Interest on federal funds sold and other short-term investments	134	43
Total interest income	38,526	33,370
Interest expense
Deposits	3,939	3,025
Borrowings	3,267	2,053
Total interest expense	7,206	5,078
Net interest income	31,320	28,292
Provision for loan and lease losses	3,000	1,825
Net interest income after provision for loan and lease losses	28,320	26,467
Noninterest income
Annuities and insurance commissions	40	86
Bank-owned life insurance	612	386
Net gains on sale of loans held for sale	35	114
Deposit, loan and other income	$ 515	463
Net gains on sale of investment securities		506
Total other income	$ 1,202	1,555
Noninterest expense
Salaries and employee benefits	7,599	6,628
Occupancy and equipment	2,247	2,082
FDIC insurance	595	560
Professional and consulting	711	494
Marketing and advertising	184	194
Data processing	1,024	900
Amortization of core deposit intangible	217	241
Other expenses	1,776	1,532
Total other expense	14,353	12,631
Income before income tax expense	15,169	15,391
Income tax expense	4,778	5,012
Net income	10,391	10,379
Less: Preferred stock dividends	22	28
Net income available to common stockholders	$ 10,369	$ 10,351
Earnings per common share
Basic	$ 0.35	$ 0.35
Diluted	$ 0.34	$ 0.34
Weighted average common shares outstanding
Basic	29,995,870	29,757,316
Diluted	30,257,676	30,149,469
Dividend per common share	$ 0.075	$ 0.075

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Statement of Comprehensive Income [Abstract]
Net income	$ 10,391	$ 10,379
Unrealized gains and losses on securities:
Unrealized holding gains on available-for-sale securities arising during the period	895	1,509
Tax effect	(357)	(595)
Net of tax	$ 538	914
Reclassification adjustment for realized gains included in net income		(506)
Tax effect		207
Net of tax		(299)
Amortization of unrealized net losses on held-to-maturity securities transferred from available-for-sale securities	$ 51	65
Tax effect	(20)	(25)
Net of tax	31	40
Unrealized losses on cash flow hedge	(1,437)	(534)
Tax effect	587	218
Net of tax	(850)	(316)
Unrealized pension plan (losses) gains before reclassifications	$ (1)	634
Tax effect		(259)
Net of tax	$ (1)	375
Reclassification adjustment for realized losses included in net income	102	108
Tax effect	(41)	(44)
Net of tax	61	64
Total other comprehensive (loss) income	(221)	778
Total comprehensive income	$ 10,170	$ 11,157

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (unaudited) - USD ($) $ in Thousands	Preferred Stock	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Treasury Stock [Member]	Accumulated Other Comprehensive Loss [Member]	Total
Balance at Dec. 31, 2014	$ 11,250	$ 374,287	$ 6,015	$ 72,398	$ (16,717)	$ (1,014)	$ 446,219
Net income				$ 10,379			10,379
Other comprehensive income (loss), net of tax						$ 778	778
Dividend on series B preferred stock				$ (28)			(28)
Cash dividends declared on common stock ($0.075 per share)				$ (2,223)			(2,223)
Exercise of stock options			$ 590				$ 590
Restricted stock grants
Stock-based compensation expense			$ 479				$ 479
Balance at Mar. 31, 2015	$ 11,250	$ 374,287	7,084	$ 80,526	$ (16,717)	$ (236)	456,194
Balance at Dec. 31, 2015	$ 11,250	$ 374,287	$ 8,527	104,606	$ (16,717)	(4,609)	477,344
Net income				10,391			10,391
Other comprehensive income (loss), net of tax						$ (221)	(221)
Dividend on series B preferred stock				(22)			(22)
Cash dividends declared on common stock ($0.075 per share)				$ (2,312)			(2,312)
Redemption of preferred stock	$ (11,250)						(11,250)
Exercise of stock options			$ 42				$ 42
Restricted stock grants
Stock-based compensation expense			$ 755				$ 755
Balance at Mar. 31, 2016		$ 374,287	$ 9,324	$ 112,663	$ (16,717)	$ (4,830)	$ 474,727

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Statement of Stockholders' Equity [Abstract]
Cash dividends declared on common stock	$ 0.075	$ 0.075
Exercise of stock options, shares	5,495	110,500
Issuance of restricted stock awards, shares	71,920	59,466

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Cash flows from operating activities
Net income	$ 10,391	$ 10,379
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of premises and equipment	653	799
Provision for loan and lease losses	3,000	1,825
Amortization of intangibles	217	241
Net accretion of loans	(1,174)	(1,442)
Accretion on bank premises	(31)	(26)
Accretion on deposits	(75)	(191)
Accretion on borrowings	(86)	(143)
Stock-based compensation	$ 755	479
Gains on sales of investment securities, net		(506)
Gains on sale of loans held for sale, net	$ (35)	(114)
Loans originated for resale	(1,916)	(8,468)
Proceeds from sale of loans held for sale	1,951	7,190
Net loss on sale of other real estate owned	115	112
Increase in cash surrender value of bank-owned life insurance	(612)	(386)
Amortization of premiums and accretion of discounts on investments securities, net	417	518
(Increase) decrease in accrued interest receivable	(58)	187
Increase in other assets	(7,137)	(49)
Increase (decrease) in other liabilities	960	(2,388)
Net cash provided by operating activities	7,335	8,017
Investment securities available-for-sale:
Purchases	$ (19,135)	(1,543)
Sales		9,537
Maturities, calls and principal repayments	$ 24,295	6,673
Investment securities held-to-maturity:
Purchases	(1,000)	(9,986)
Maturities and principal repayments	5,439	2,749
Net redemptions (purchases) of restricted investment in bank stocks	1,125	(1,339)
Net increase in loans	(164,130)	(100,708)
Purchases of premises and equipment	(941)	(478)
Proceeds from sale of other real estate owned	738	126
Net cash used in investing activities	(153,609)	(94,969)
Cash flows from financing activities
Net increase in deposits	102,180	20,595
Advances of FHLB borrowings	50,000	90,101
Repayments of FHLB borrowings	(75,000)	(60,363)
Cash dividends paid on common stock	(2,312)	(2,247)
Cash dividends paid on preferred stock	(22)	$ (28)
Redemption of preferred stock	(11,250)
Proceeds from exercise of stock options	42	$ 590
Net cash provided by financing activities	63,638	48,648
Net change in cash and cash equivalents	(82,636)	(38,304)
Cash and cash equivalents at beginning of period	200,895	126,847
Cash and cash equivalents at end of period	118,259	88,543
Cash payments for:
Interest paid on deposits and borrowings	6,492	4,724
Income taxes	$ 10,235	$ 5,500

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Nature of Operations and Principles of Consolidation

3 Months Ended

Mar. 31, 2016

Disclosure Text Block [Abstract]

Nature of Operations and Principles of Consolidation

Note 1. Nature of Operations and Principles of Consolidation

The consolidated financial statements of ConnectOne Bancorp, Inc. (the “Parent Corporation”) are prepared on an accrual basis and include the accounts of the Parent Corporation and its wholly-owned subsidiary, ConnectOne Bank (the “Bank” and, collectively with the Parent Corporation and the Parent Corporation’s other direct and indirect subsidiaries, the “Company”). All significant intercompany accounts and transactions have been eliminated from the accompanying consolidated financial statements.

The Bank is a community-based, full-service New Jersey-chartered commercial bank that was founded in 2005. The Bank operates from its headquarters located at 301 Sylvan Avenue in the Borough of Englewood Cliffs, Bergen County, New Jersey and through its twenty other banking offices. Substantially all loans are secured by specific items of collateral including business assets, consumer assets, and commercial and residential real estate. Commercial loans are expected to be repaid from cash flow from business operations. There are no significant concentrations of loans to any one industry or client. However, the clients’ ability to repay their loans is dependent on the cash flows, real estate and general economic conditions in the area.

The preceding unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X, and, accordingly, do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. However, in the opinion of management, all adjustments (consisting only of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2016 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2016, or for any other interim period. The Company’s 2015 Annual Report on Form 10-K should be read in conjunction with these financial statements.

In preparing the consolidated financial statements, management has made estimates and assumptions that affect the reported amounts of assets and liabilities as of the dates of the consolidated statements of condition and that affect the results of operations for the periods presented. Actual results could differ significantly from those estimates.

The consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). Some items in the prior year financial statements were reclassified to conform to current presentation. Reclassifications had no effect on prior year net income or stockholders’ equity.

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New Authoritative Accounting Guidance

3 Months Ended

Mar. 31, 2016

Accounting Changes and Error Corrections [Abstract]

New Authoritative Accounting Guidance

Note 2. New Authoritative Accounting Guidance

ASU No. 2014-12, "Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period ("ASU 2014-12"). ASU 2014-12 requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant date fair value of the award. This update further clarifies that compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. The Company adopted ASU 2014-12 effective on January 1, 2016 and is not expected to have a significant impact on the Company's consolidated financial statements.

ASU No. 2015-03, "Interest-Imputation of Interest (Subtopic 835-30) Simplifying the Presentation of Debt Issuance Costs" requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in the ASU No. 2015-03. The Company adopted ASU 2015-03 effective on January 1, 2016 and is not expected to have a significant impact on the Company's consolidated financial statements.

ASU No. 2015-12, "Plan Accounting: Defined Benefit Pension Plans (Topic 960): Defined Contribution Pension Plans, (Topic 962): Health and Welfare Benefit Plans, (Topic 965): (Part I) Fully Benefit-Responsive Investment Contracts, (Part II) Plan Investment Disclosures, (Part III) Measurement Date Practical Expedient." ASU No. 2015-12 simplifies accounting for employee benefit plans as follows: (i) fully benefit-responsive investment contracts are now to be measured, presented and disclosed at contract value, (ii) the requirement to disclose investments that represent 5 percent or more of net assets available for benefits has been eliminated, (iii) the net appreciation or depreciation in investments for the period should be presented in the aggregate, but is no longer required to be disaggregated and disclosed by general type, (iv) if an investment is measured using the net asset value per share (or its equivalent) practical expedient in Topic 820, and that investment is in a fund that files a U.S. Department of Labor Form 5500, Annual Return/Report of Employee Benefit Plan, as a direct filing entity, disclosure of that investment’s strategy is no longer required, and (v) allows employers to measure (as a practical expedient) benefit plan assets on a month-end date nearest to the employer’s fiscal year end when the fiscal period does not coincide with a month end. ASU No. 2015-12 is effective for the Company on January 1, 2016 and is not expected to have a significant impact on the Company’s consolidated financial statements.

ASU No. 2016-02, “Leases (Topic 842)” requires the recognition of a right of use asset and related lease liability by lessees for leases classified as operating leases under current GAAP. Topic 842, which replaces the current guidance under Topic 840, retains a distinction between finance leases and operating leases. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee also will not significantly change from current GAAP. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize right of use assets and lease liabilities. Topic 842 will be effective for the Company for reporting periods beginning January 1, 2019, with an early adoption permitted. The Company must apply a modified retrospective transition approach for the applicable leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Management is currently evaluating the impact of Topic 842 on the Company’s consolidated financial statements.

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Earnings per Common Share

3 Months Ended

Mar. 31, 2016

Earnings Per Share [Abstract]

Earnings per Common Share

Note 3. Earnings per Common Share

Basic earnings per common share is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding. Diluted EPS includes any additional common shares as if all potentially dilutive common shares were issued (e.g., stock options). The Company’s weighted average common shares outstanding for diluted EPS include the effect of stock options and restricted stock awards outstanding using the Treasury Stock Method, which are not included in the calculation of basic EPS.

Earnings per common share have been computed as follows:

	Three Months Ended
	March 31,
(in thousands, except for per share data)	2016		2015
Net income	$	10,391	$	10,379
Preferred stock dividends		(22)		(28)
Net income available to common stockholders	$	10,369	$	10,351
Basic weighted average common shares outstanding		29,996		29,757
Effect of dilutive options		262		392
Diluted weighted average common shares outstanding		30,258		30,149
Earnings per common share:
Basic	$	0.35	$	0.35
Diluted	$	0.34	$	0.34

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Investment Securities

3 Months Ended

Mar. 31, 2016

Investments, Debt and Equity Securities [Abstract]

Investment Securities

Note 4. Investment Securities

The Company’s investment securities are classified as available-for-sale and held-to-maturity at March 31, 2016 and December 31, 2015. Investment securities available-for-sale are reported at fair value with unrealized gains or losses included in equity, net of tax. Accordingly, the carrying value of such securities reflects their fair value as of March 31, 2016. Fair value is based upon either quoted market prices, or in certain cases where there is limited activity in the market for a particular instrument, assumptions are made to determine their fair value. See Note 7 of the Notes to Consolidated Financial Statements for a further discussion.

Transfers of debt securities from the available-for-sale category to the held-to-maturity category are made at fair value at the date of transfer. The unrealized holding gain or loss at the date of transfer remains in accumulated other comprehensive income and in the carrying value of the held-to-maturity investment security. Premiums or discounts on investment securities are amortized or accreted using the effective interest method over the life of the security as an adjustment of yield. Unrealized holding gains or losses that remain in accumulated other comprehensive income are amortized or accreted over the remaining life of the security as an adjustment of yield, offsetting the related amortization of the premium or accretion of the discount.

The following tables present information related to the Company’s investment securities at March 31, 2016 and December 31, 2015 (dollars in thousands):

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
March 31, 2016	Cost		Gains		Losses		Value
Investment securities available-for-sale
Federal agency obligations	$	31,370	$	486	$	(29)	$	31,827
Residential mortgage pass-through securities		47,404		1,162		(21)		48,545
Commercial mortgage pass-through securities		2,965		88		-		3,053
Obligations of U.S. states and political subdivisions		9,642		164		-		9,806
Trust preferred securities		16,089		440		(350)		16,179
Corporate bonds and notes		40,771		873		(256)		41,388
Asset-backed securities		18,682		-		(528)		18,154
Certificates of deposit		1,496		20		-		1,516
Equity securities		376		29		(28)		377
Other securities		20,490		84		(88)		20,486
Total securities available-for-sale	$	189,285	$	3,346	$	(1,300)	$	191,331
			Gross		Gross
	Amortized		Unrecognized		Unrecognized		Fair
	Cost		Gains		Losses		Value
Investment securities held-to-maturity
U.S. Treasury and agency securities	$	28,523	$	1,890	$	-	$	30,413
Federal agency obligations		31,567		700		(8)		33,259
Residential mortgage-backed securities		3,489		28		(15)		3,502
Commercial mortgage-backed securities		1,317		30		-		1,347
Obligations of U.S. states and political divisions		117,416		6,208		-		123,624
Corporate bonds and notes		37,061		1,396		(132)		38,325
Total securities held-to-maturity	$	219,373	$	10,252	$	(155)	$	229,470
Total investment securities	$	408,658	$	13,598	$	(1,455)	$	420,801
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
December 31, 2015	Cost		Gains		Losses		Value
Investment securities available-for-sale
Federal agency obligations	$	29,062	$	142	$	(58)	$	29,146
Residential mortgage pass-through securities		44,155		803		(48)		44,910
Commercial mortgage pass-through securities		2,981		-		(9)		2,972
Obligations of U.S. states and political subdivisions		8,188		169		-		8,357
Trust preferred securities		16,088		398		(231)		16,255
Corporate bonds and notes		53,566		702		(292)		53,976
Asset-backed securities		20,005		18		(298)		19,725
Certificates of deposit		1,895		18		(8)		1,905
Equity securities		376		21		(23)		374
Other securities		18,303		-		(153)		18,150
Total securities available-for-sale	$	194,619	$	2,271	$	(1,120)	$	195,770
			Gross		Gross
	Amortized		Unrecognized		Unrecognized		Fair
	Cost		Gains		Losses		Value
Investment securities held-to-maturity
U.S. Treasury and agency securities	$	28,471	$	755	$	-	$	29,226
Federal agency obligations		33,616		280		(119)		33,777
Residential mortgage-backed securities		3,805		11		(6)		3,810
Commercial mortgage-backed securities		4,110		27		(2)		4,135
Obligations of U.S. states and political divisions		118,015		5,001		(3)		123,013
Corporate bonds and notes		36,039		719		(161)		36,597
Total securities held-to-maturity	$	224,056	$	6,793	$	(291)	$	230,558
Total investment securities	$	418,675	$	9,064	$	(1,411)	$	426,328

The following table presents information for investment securities at March 31, 2016, based on scheduled maturities. Actual maturities can be expected to differ from scheduled maturities due to prepayment or early call options of the issuer.

	March 31, 2016
	Amortized		Fair
	Cost		Value
	(in thousands)
Investment securities available-for-sale:
Due in one year or less	$	10,948	$	10,967
Due after one year through five years		15,800		16,287
Due after five years through ten years		37,582		37,795
Due after ten years		53,720		58,821
Residential mortgage pass-through securities		47,404		48,545
Commercial mortgage pass-through securities		2,965		3,053
Equity securities		376		377
Other securities		20,490		20,486
Total	$	189,285	$	191,331
Investment securities held-to-maturity:
Due in one year or less	$	1,000	$	1,000
Due after one year through five years		14,561		14,907
Due after five years through ten years		85,428		90,182
Due after ten years		113,578		118,532
Residential mortgage pass-through securities		3,489		3,502
Commercial mortgage pass-through securities		1,317		1,347
Total	$	219,373	$	229,470
Total investment securities	$	408,658	$	420,801

Gross gains and losses from the sales, calls and maturities of investment securities for the three months ended March 31, 2016 and 2015 were as follows:

	Three Months Ended
	March 31,
(in thousands)	2016		2015
Proceeds	$	-	$	9,537
Gross gains on sales of investment securities		-		506
Gross losses on sales of investment securities		-		-
Net gains on sales of investment securities		-		506
Less: tax provision on net gains		-		207
Total	$	-	$	299

The Company performs regular analysis on the securities portfolio to determine whether a decline in fair value indicates that an investment is other-than-temporarily impaired in accordance with FASB ASC 320-10. FASB ASC 320-10 requires companies to record other-than-temporary impairment (“OTTI”) charges, through earnings, if they have the intent to sell, or more likely than not will be required to sell, an impaired debt security before recovery of its amortized cost basis. If the Company intends to sell or it is more likely than not it will be required to sell the security before recovery of its amortized cost basis, less any current period credit loss, the OTTI is recognized in earnings equal to the entire difference between the investment’s amortized cost basis and its estimated fair value at the balance sheet date. If the Company does not intend to sell the security and it is more likely than not that the Company will not be required to sell the security before recovery of its amortized cost basis less any current period loss, and the Company determines that a decline in fair value is other than temporary, the OTTI is separated into the amount representing the credit loss and the amount related to all other factors. The amount of the OTTI related to the credit loss is determined based on the present value of cash flows expected to be collected and is recognized in earnings. The amount of the total OTTI related to other factors is recognized in other comprehensive income, net of applicable taxes. The previous amortized cost basis less the OTTI recognized in earnings becomes the new amortized cost basis of the investment.

The Company maintains a watch list for the identification and monitoring of securities experiencing problems that require a heightened level of review. This could include credit rating downgrades.

The Company’s assessment of whether an impairment in the portfolio is other than temporary includes factors such as whether the issuer has defaulted on scheduled payments, announced restructuring and/or filed for bankruptcy, has disclosed severe liquidity problems that cannot be resolved, disclosed deteriorating financial condition or sustained significant losses.

Temporarily Impaired Investments

The Company does not believe that the unrealized losses, for all securities, which were comprised of 46 and 74 investment securities as of March 31, 2016 and December 31, 2015, respectively, represent an other-than-temporary impairment. The gross unrealized losses associated with U.S. Treasury and agency securities, federal agency obligations, mortgage-backed securities, corporate bonds, tax-exempt securities, asset-backed securities, trust preferred securities, mutual funds and equity securities are not considered to be other than temporary because these unrealized losses are related to changes in interest rates and do not affect the expected cash flows of the underlying collateral or issuer.

Factors affecting the market price include credit risk, market risk, interest rates, economic cycles, and liquidity risk. The magnitude of any unrealized loss may be affected by the relative concentration of the Company’s investment in any one issuer or industry. The Company has established policies to reduce exposure through diversification of concentration of the investment portfolio including limits on concentrations to any one issuer. The Company believes the investment portfolio is prudently diversified.

The decline in value is related to a change in interest rates and subsequent change in credit spreads required for these issues affecting market price. All issues are performing and are expected to continue to perform in accordance with their respective contractual terms and conditions. Short to intermediate average durations and in certain cases monthly principal payments should reduce further market value exposure to increases in rates.

The Company evaluates all securities with unrealized losses quarterly to determine whether the loss is other than temporary. Unrealized losses in the corporate debt securities category consist primarily of senior unsecured corporate debt securities issued by large financial institutions, insurance companies and other corporate issuers. Single issuer corporate trust preferred securities are also included, and in the case of one holding the market valuation loss is largely based upon the floating rate coupon and corresponding market valuation. Neither that trust preferred issuer, nor any other corporate issuers, have defaulted on interest payments. The unrealized loss in equity securities consists of losses on other bank equities. The decline in fair value is due in large part to the lack of an active trading market for these securities, changes in market credit spreads and rating agency downgrades. Management concluded that these securities were not other-than-temporarily impaired at March 31, 2016.

In determining that the securities giving rise to the previously mentioned unrealized losses were not other than temporary, the Company evaluated the factors cited above, which the Company considers when assessing whether a security is other-than-temporarily impaired. In making these evaluations the Company must exercise considerable judgment. Accordingly, there can be no assurance that the actual results will not differ from the Company’s judgments and that such differences may not require the future recognition of other-than-temporary impairment charges that could have a material effect on the Company’s financial position and results of operations. In addition, the value of, and the realization of any loss on, an investment security is subject to numerous risks as cited above.

The following tables indicate gross unrealized losses not recognized in income and fair value, aggregated by investment category and the length of time individual securities have been in a continuous unrealized loss position at March 31, 2016 and December 31, 2015:

		March 31, 2016
		Total								Less than 12 Months								12 Months or Longer
		Fair			Unrealized					Fair			Unrealized					Fair				Unrealized
		Value			Losses					Value			Losses					Value				Losses
		(in thousands)
Investment securities
available-for-sale:
Federal agency obligation		$	7,070		$		(29)			$	6,836		$			(28)		$		234		$		(1)
Residential mortgage
pass-through securities			7,173				(21)				6,679					(14)				494				(7)
Trust preferred securities			1,227				(350)				-					-				1,227				(350)
Corporate bonds and notes			15,553				(256)				11,727					(118)				3,826				(138)
Asset-backed securities			18,154				(528)				14,825					(417)				3,329				(111)
Equity securities			117				(28)				-					-				117				(28)
Other securities			5,412				(88)				-					-				5,412				(88)
Total		$	54,706		$		(1,300)			$	40,067		$			(577)		$		14,639		$		(723)
Investment securities
held-to-maturity:
Federal agency obligation		$	4,161		$		(8)			$	2,300		$			(6)		$		1,861		$		(2)
Residential mortgage
pass-through securities			1,920				(15)				1,920					(15)				-				-
Corporate bonds and notes			2,632				(131)				2,632					(131)				-				-
Total		$	8,713		$		(154)			$	6,852		$			(152)		$		1,861		$		(2)
Total temporarily impaired
securities		$	63,419		$		(1,454)			$	46,919		$			(729)		$		16,500		$		(725)
	December 31, 2015
	Total								Less than 12 Months								12 Months or Longer
	Fair					Unrealized			Fair					Unrealized			Fair				Unrealized
	Value					Losses			Value					Losses			Value				Losses
	(dollars in thousands)
Investment Securities
Available-for-Sale:
Federal agency obligation	$			12,260		$		(58)	$			12,013		$	(54)		$		247		$		(4)
Residential mortgage
pass-through securities				9,027				(48)				9,027			(48)				—				—
Commercial mortgage-backed
securities				2,971				(9)				2,971			(9)				—				—
Trust preferred securities				1,345				(231)				—			—				1,345				(231)
Corporate bonds and notes				16,533				(292)				12,702			(161)				3,831				(131)
Asset-backed securities				14,745				(298)				11,250			(188)				3,495				(110)
Certificates of deposit				215				(8)				215			(8)				—				—
Equity securities				123				(23)				—			—				123				(23)
Other securities				5,347				(153)				—			—				5,347				(153)
Total	$			62,566		$		(1,120)	$			48,178		$	(468)		$		14,388		$		(652)
Investment Securities
Held-to-Maturity:
Federal agency obligation				12,554				(119)				11,783			(109)				771				(10)
Residential mortgage
pass-through securities				2,480				(6)				2,480			(6)				—				—
Commercial mortgage-backed
securities				1,331				(2)				1,331			(2)				—				—
Obligations of U.S. states
and political subdivisions				981				(3)				981			(3)				—				—
Corporate bonds and notes				5,536				(161)				5,536			(161)				—				—
Total	$			22,882		$		(291)	$			22,111		$	(281)		$		771		$		(10)
Total Temporarily Impaired
Securities	$			85,448		$		(1,411)	$			70,289		$	(749)		$		15,159		$		(662)

Investment securities having a carrying value of approximately $155.3 million and $142.5 million at March 31, 2016 and December 31, 2015, respectively, were pledged to secure public deposits, borrowings, Federal Reserve Discount Window and Federal Home Loan Bank advances and for other purposes required or permitted by law.

As of March 31, 2016 and December 31, 2015, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of stockholders’ equity.

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Derivatives

3 Months Ended

Mar. 31, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

Note 5 – Derivatives

The Company utilizes interest rate swap agreements as part of its asset liability management strategy to help manage its interest rate risk position. The notional amount of the interest rate swap does not represent amounts exchanged by the parties. The amount exchanged is determined by reference to the notional amount and the other terms of the individual interest rate swap agreements.

Interest rate swaps were entered into on August 24, 2015, October 15, 2014 and December 30, 2014, each with a respective notional amount of $25.0 million and were designated as cash flow hedges of a Federal Home Loan Bank advance. The swaps were determined to be fully effective during the period presented and therefore no amount of ineffectiveness has been included in net income while the aggregate fair value of the swaps is recorded in other assets (liabilities) with changes in fair value recorded in other comprehensive income (loss). The amount included in accumulated other comprehensive income (loss) would be reclassified to current earnings should the hedges no longer be considered effective. The Company expects the hedges to remain fully effective during the remaining term of the swaps.

Summary information about the interest rate swaps designated as cash flow hedges as of March 31, 2016, December 31, 2015 and March 31, 2015 are presented in the following table.

	March 31,		December 31,		March 31,
(dollars in thousands)	2016		2015		2015
Notional amount	$	75,000	$	75,000	$	50,000
Weighted average pay rates		1.57%		1.56%		1.58%
Weighted average receive rates		0.56%		0.44%		0.24%
Weighted average maturity	3.6 years			3.8 years		4.2 years
Fair value	$	(1,568)	$	(131)	$	(486)

Interest expense recorded on these swap transactions totaled approximately $191 thousand for the three months ended March 31, 2016 and $166 thousands for the three months ended March 31, 2015.

Cash Flow Hedge

The following table presents the net gains (losses), recorded in other comprehensive income and the Consolidated Statements of Income relating to the cash flow derivative instruments for the following periods:

	Three Months Ended March 31, 2016
					Amount of
					loss
					recognized
					in other
	Amount of loss				Non-
	recognized		Amount of loss		interest
	in OCI		reclassified		income
	(Effective		from OCI to interest		(Ineffective
(in thousands)	Portion)		income		Portion)
Interest rate contracts	$	(1,437)	$	-	$	-
	Three Months Ended March 31, 2015
					Amount of
					loss
					recognized
					in other
	Amount of loss				non-
	recognized		Amount of loss		interest
	in OCI		reclassified		income
	(effective		from OCI to interest		(ineffective
(in thousands)	Portion)		income		portion)
Interest rate contracts	$	(534)	$	-	$	-

The following table reflects the cash flow hedges included in the consolidated statements of condition as of March 31, 2016 and December 31, 2015:

	2016				2015
	Notional				Notional
(in thousands)	Amount		Fair Value		Amount		Fair Value
Included in other assets/(liabilities):
Interest rate swaps related to FHLB Advances	$	75,000	$	(1,568)	$	75,000	$	(131)

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Loans and the Allowance for Loan and Lease Losses

3 Months Ended

Mar. 31, 2016

Receivables [Abstract]

Loans and the Allowance for Loan and Lease Losses

Note 6. Loans and the Allowance for Loan and Lease Losses

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of deferred loan fees and costs, and an allowance for loan and lease losses. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level-yield method without anticipating prepayments.

Loan segments are defined as a group of loans and leases, which share similar initial measurement attributes, risk characteristics, and methods for monitoring and assessing credit risk. Management has determined that the Company has five segments of loans and leases: commercial (including lease financing), commercial real estate, commercial construction, residential real estate (including home equity) and consumer.

Interest income on commercial, commercial real estate, commercial construction and residential loans are discontinued at the time the loan is 90 days delinquent unless the loan is well-secured and in process of collection. Past due status is based on the contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. Nonaccrual loans and loans past due 90 days still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans. A loan is moved to nonaccrual status in accordance with the Company’s policy, typically after 90 days of non-payment.

All interest accrued but not received for loans placed on nonaccrual is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

The policy of the Company is to generally grant commercial, residential and consumer loans to residents and businesses within its market area. The borrowers’ abilities to repay their obligations are dependent upon various factors including the borrowers’ income and net worth, cash flows generated by the borrowers’ underlying collateral, value of the underlying collateral, and priority of the lender’s lien on the property. Such factors are dependent upon various economic conditions and individual circumstances beyond the control of the Company. The Company is therefore subject to risk of loss. The Company believes its lending policies and procedures adequately minimize the potential exposure to such risks and that adequate provisions for loan and lease losses are provided for all known and inherent risks. Collateral and/or personal guarantees are required for a large majority of the Company’s loans.

Allowance for Loan and Lease Losses

The allowance for loan and lease losses is a valuation allowance for probable incurred credit losses. Losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. Management estimates the allowance balance required using past loan and lease loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors. Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged off. The allowance consists of specific and general components. The specific component relates to loans that are individually classified as impaired.

A loan is impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. Loans, for which the terms have been modified, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings (“TDRs”) and classified as impaired. As part of the evaluation of impaired loans, the Company individually reviews for impairment all non-homogeneous loans internally classified as substandard or below. Generally, smaller impaired non-homogeneous loans and impaired homogeneous loans are collectively evaluated for impairment.

The Bank has defined its population of impaired loans to include all loans on nonaccrual status; all troubled debt restructuring loans; and all loans (above an established dollar threshold of $250,000) internally classified as “Special Mention” or below that require a specific reserve.

Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed.

Troubled debt restructurings are separately identified for impairment disclosures and are measured at the present value of estimated future cash flows using the loan’s effective rate at inception. If a troubled debt restructuring is considered to be a collateral dependent loan, the loan is reported, net, at the fair value of the collateral. For troubled debt restructurings that subsequently default, the Company determines the amount of reserve in accordance with the accounting policy for the allowance for loan and lease losses.

The general component covers non-impaired loans and is based on historical loss experience adjusted for current factors. The historical loss experience, the primary factor, is determined by loan class and is based on the actual loss history experienced by the Bank over an actual three year rolling calculation. This actual loss experience is supplemented with other economic factors based on the risks present for each portfolio segment. This actual loss experience is supplemented with the exogenous factor adjustments based on the risks present for each loan category. These exogenous factors (nine total) include consideration of the following: concentrations of credit; delinquency & nonaccrual trends; economic & business conditions including evaluation of the national and regional economies and industries with significant loan concentrations; external factors including legal, regulatory or competitive pressures that may impact the loan portfolio; changes in the experience, ability, or size of the lending staff, management, or board of directors that may impact the loan portfolio; changes in underwriting standards, collection procedures, charge-off practices, or other changes in lending policies and procedures that may impact the loan portfolio; loss and recovery trends; changes in portfolio size and mix; and trends in problem loans.

Purchased Credit-Impaired Loans

The Company purchases groups of loans in conjunction with mergers, some of which have shown evidence of credit deterioration since origination. These purchased credit impaired loans are recorded at the amount paid, such that there is no carryover of the seller’s allowance for loan and lease losses. After acquisition, losses are recognized by an increase in the allowance for loan and lease losses.

Such purchased credit-impaired loans (“PCI”) are accounted for individually. The Company estimates the amount and timing of expected cash flows for each loan and the expected cash flows in excess of amount paid is recorded as interest income over the remaining life of the loan (accretable yield). The excess of the loan’s contractual principal and interest over expected cash flows is not recorded (nonaccretable difference).

A PCI loan may be resolved either through a sale of the loan, by working with the customer and obtaining partial or full repayment, by short sale of the collateral, or by foreclosure. A gain or loss on resolution would be recognized based on the difference between the proceeds received and the carrying amount of the loan.

Payments received earlier than expected or in excess of expected cash flows from sales or other resolutions may result in the carrying value of a pool being reduced to zero even though outstanding contractual balances and expected cash flows remain related to loans in the pool. Once the carrying value of a pool is reduced to zero, any future proceeds, which may include cash or real estate acquired in foreclosure, from the remaining loans, representing further realization of accretable yield, are recognized as interest income upon receipt.

PCI loans that met the criteria for nonaccrual may be considered performing, regardless of whether the customer is contractually delinquent, if management can reasonably estimate the timing and amount of the expected cash flows on such loans and if management expects to fully collect the new carrying value of the loans. As such, management may no longer consider the loans to be nonaccrual or nonperforming and may accrue interest on these loans, including the impact of any accretable discount.

Composition of Loan Portfolio

The following table sets forth the composition of the Company’s loan portfolio, including net deferred loan fees, at March 31, 2016 and December 31, 2015:

	March 31,		December 31,
	2016		2015
	(in thousands)
Commercial	$	601,708	$	570,116
Commercial real estate		2,028,301		1,966,696
Commercial construction		402,594		328,838
Residential real estate		231,319		233,690
Consumer		1,851		2,454
Gross loans		3,265,773		3,101,794
Net deferred loan fees		(1,960)		(2,787)
Total loans receivable	$	3,263,813	$	3,099,007

At March 31, 2016 and December 31, 2015 loan balances of approximately $1.6 billion were pledged to secure borrowings from the Federal Home Loan Bank of New York.

Purchased Credit-Impaired Loans

The Company holds purchased loans for which there was, at their acquisition date, evidence of deterioration of credit quality since their origination and it was probable, at acquisition, that all contractually required payments would not be collected. The carrying amount of those loans is as follows at March 31, 2016 and December 31, 2015.

	March 31,		December 31,
	2016		2015
	(in thousands)
Commercial	$	7,059	$	7,078
Commercial real estate		1,745		1,775
Residential real estate		334		328
Total carrying amount	$	9,138	$	9,181

For those purchased loans disclosed above, the Company did not increase the allowance for loan and lease losses for the three months ended March 31, 2016.

The accretable yield, or income expected to be collected, on the purchased loans disclosed above for the three months ended March 31, 2016 is as follows (in thousands):

	Three Months		Three Months
	Ended March		Ended March
	31, 2016		31, 2015
Beginning balance	$	3,599	$	4,805
New loans purchased		-		-
Accretion of income		(183)		(54)
Reclassification from nonaccretable differences		-		-
Disposals		-		-
Ending balance	$	3,416	$	4,751

The following table presents information about the recorded investment in loan receivables on nonaccrual status by segment at March 31, 2016 and December 31, 2015:

Loans Receivable on Nonaccrual Status

	March 31,		December 31,
	2016		2015
	(in thousands)
Commercial	$	7,239	$	6,586
Commercial real estate		8,841		9,112
Commercial construction		1,636		1,479
Residential real estate		3,734		3,559
Total loans receivable on nonaccrual status	$	21,450	$	20,736

The Company continuously monitors the credit quality of its loans receivable. In addition to its internal staff, the Company utilizes the services of a third party loan review firm to rate the credit quality of its loans receivable. Credit quality is monitored by reviewing certain credit quality indicators. Assets classified “Pass” are deemed to possess average to superior credit quality, requiring no more than normal attention. Assets classified as “Special Mention” have generally acceptable credit quality yet possess higher risk characteristics/circumstances than satisfactory assets. Such conditions include strained liquidity, slow pay, stale financial statements, or other conditions that require more stringent attention from the lending staff. These conditions, if not corrected, may weaken the loan quality or inadequately protect the Company’s credit position at some future date. Assets are classified “Substandard” if the asset has a well-defined weakness that requires management’s attention to a greater degree than for loans classified special mention. Such weakness, if left uncorrected, could possibly result in the compromised ability of the loan to perform to contractual requirements. An asset is classified as “Doubtful” if it is inadequately protected by the net worth and/or paying capacity of the obligor or of the collateral, if any, that secures the obligation. Assets classified as doubtful include assets for which there is a “distinct possibility” that a degree of loss will occur if the inadequacies are not corrected. The following table presents information, excluding net deferred loan fees, about the Company’s loan credit quality at March 31, 2016 and December 31, 2015:

	March 31, 2016
			Special
	Pass		Mention		Substandard		Doubtful		Total
	(in thousands)
Commercial	$	494,413	$	6,976	$	100,319	$	-	$	601,708
Commercial real estate		1,979,211		17,820		31,270		-		2,028,301
Commercial construction		400,131		827		1,636		-		402,594
Residential real estate		226,879		-		4,440		-		231,319
Consumer		1,770		-		81		-		1,851
Total loans	$	3,102,404	$	25,623	$	137,746	$	-	$	3,265,773
	December 31, 2015
			Special
	Pass		Mention		Substandard		Doubtful		Total
	(in thousands)
Commercial	$	462,358	$	11,760	$	95,998	$	-	$	570,116
Commercial real estate		1,919,041		18,990		28,426	239			1,966,696
Commercial construction		326,697		662		1,479		-		328,838
Residential real estate		229,426		-		4,264		-		233,690
Consumer		2,368		-		86		-		2,454
Total loans	$	2,939,890	$	31,412	$	130,253	$	239	$	3,101,794

The following table provides an analysis of the impaired loans, by loan segment, at March 31, 2016 and December 31, 2015:

	March 31, 2016
			Unpaid
	Recorded		Principal		Related
	Investment		Balance		Allowance
No related allowance recorded	(in thousands)
Commercial	$	3,320	$	3,625
Commercial real estate		15,271		15,202
Commercial construction		2,466		2,538
Residential real estate		4,123		4,532
Consumer		81		81
Total	$	25,261	$	25,978
With an allowance recorded
Commercial	$	91,928	$	91,851	$	7,677
Total
Commercial	$	95,248	$	95,476	$	7,677
Commercial real estate		15,271		15,202		-
Commercial construction		2,466		2,538		-
Residential real estate		4,123		4,532		-
Consumer		81		81		-
Total	$	117,189	$	117,829	$	7,677
	December 31, 2015
			Unpaid
	Recorded		Principal		Related
	Investment		Balance		Allowance
No related allowance recorded	(in thousands)
Commercial	$	610	$	645
Commercial real estate		15,517		16,512
Commercial construction		2,149		2,141
Residential real estate		3,954		4,329
Consumer		87		86
Total	$	22,317	$	23,713
With an allowance recorded
Commercial	$	84,787	$	84,449	$	6,725
Total
Commercial	$	85,397	$	85,094	$	6,725
Commercial real estate		15,517		16,512		-
Commercial construction		2,149		2,141		-
Residential real estate		3,954		4,329		-
Consumer		87		86		-
Total	$	107,104	$	108,162	$	6,725

The following table provides an analysis related to the average recorded investment and interest income recognized on impaired loans by segment as of and for the three and nine months ended March 31, 2016 and 2015 (in thousands):

	Three Months Ended March 31,
	2016				2015
	Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income
	Investment		Recognized		Investment		Recognized
Impaired loans with
no related allowance
recorded
Commercial	$	2,591	$	24	$	290	$	-
Commercial real
estate		15,274		25		6,052		19
Commercial
construction		2,307		16		-		-
Residential real
estate		4,107		5		3,613		2
Consumer		84		1		106		1
Total	$	24,363	$	71	$	10,061	$	22
Impaired loans with
an allowance
recorded
Commercial	$	83,759	$	737	$	387	$	-
Commercial real
estate		-		-		6,335		-
Total	$	83,759	$	737	$	6,722	$	-
Total impaired loans
Commercial	$	86,350	$	761	$	677	$	-
Commercial real
estate		15,274		25		12,387		19
Commercial
construction		2,307		16
Residential real
estate		4,107		5		3,613		2
Consumer		84		1		106		1
Total	$	108,122	$	808	$	16,783	$	22

Included in impaired loans at March 31, 2016 and December 31, 2015 are loans that are deemed troubled debt restructurings. The recorded investment in loans include accrued interest receivable and other capitalized costs such as real estate taxes paid on behalf of the borrower and loan origination fees, net, when applicable. Cash basis interest and interest income recognized on accrual basis approximate each other.

The following table provides an analysis of the aging of the recorded investment of loans, excluding net deferred loan fees that are past due at March 31, 2016 and December 31, 2015 by segment:

Aging Analysis

	March 31, 2016
													Loans
													Receivable 90
					90 Days or								Days or Greater
	30-59 Days		60-89 Days		Greater Past		Total Past				Total Loans		Past Due and
	Past Due		Past Due		Due		Due		Current		Receivable		Accruing
	(in thousands)
Commercial	$	5,539	$	-	$	12,409	$	17,948	$	583,760	$	601,708	$	5,250
Commercial real
estate		5,408		-		10,027		15,435		2,012,866		2,028,301		1,382
Commercial
construction		1,750		-		-		1,750		400,844		402,594		-
Residential real
estate		1,741		380		2,746		4,867		226,452		231,319		-
Consumer		2		-		-		2		1,849		1,851
Total	$	14,440	$	380	$	25,181	$	40,002	$	3,225,771	$	3,265,773	$	6,632
	December 31, 2015
													Loans
													Receivable 90
					90 Days or								Days or Greater
	30-59 Days		60-89 Days		Greater Past		Total Past				Total Loans		Past Due and
	Past Due		Past Due		Due		Due		Current		Receivable		Accruing
	(in thousands)
Commercial	$	6,887	$	3,505	$	6,865	$	17,257	$	552,859	$	570,116	$	-
Commercial real
estate		1,998		988		9,561		12,547		1,954,149		1,966,696		-
Commercial
construction		-		-		1,479		1,479		327,359		328,838		-
Residential real
estate		-		-		2,122		2,122		231,568		233,690		-
Consumer		4		9		-		13		2,441		2,454		-
Total	$	8,889	$	4,502	$	20,027	$	33,418	$	3,068,376	$	3,101,794	$	-

The following table details, at the period presented, the amount of loans receivable that are evaluated individually, and collectively, for impairment (excluding net deferred loan fees), those acquired with deteriorated quality, and the related portion of the allowance for loan and lease losses that are allocated to each loan portfolio segment:

	March 31, 2016
			Commercial		Commercial		Residential
	Commercial		real estate		construction		real estate		Consumer		Unallocated		Total
	(in thousands)
Allowance for loan and lease losses
Individually evaluated for impairment	$	7,677	$	-	$	-	$	-	$	-	$	-	$	7.677
Collectively evaluated for impairment		5,420		10,941		3,617		1,074		4		341		21,397
Acquired with deteriorated credit quality		-		-		-		-		-		-		-
Total	$	13,097	$	10,941	$	3,617	$	1,074	$	4	$	341	$	29,074
Gross loans
Individually evaluated for impairment	$	95,248	$	15,271	$	2,466	$	4,123	$	81	$	-	$	117,189
Collectively evaluated for impairment		499,401		2,011,285		400,128		226,862		1,770		-		3,139,446
Acquired with deteriorated credit quality		7,059		1,745		-		334		-		-		9,138
Total	$	601,708	$	2,028,301	$	402,594	$	231,319	$	1,851	$	-	$	3,265,773

The table above includes approximately $824 million of acquired loans for the period ended March 31, 2016 reported as collectively evaluated for impairment, of which approximately $661 million were included in the commercial real estate loan segment.

The following table details the amount of gross loans that are evaluated individually, and collectively, for impairment (excluding net deferred costs), those acquired with deteriorated quality, and the related portion of the allowance for loan and lease loss that is allocated to each loan portfolio class:

	December 31, 2015
			Commercial		Commercial		Residential
	Commercial		real estate		construction		real estate		Consumer		Unallocated		Total
	(in thousands)
Allowance for loan and lease losses
Individually evaluated for impairment	$	6,725	$	-	$	-	$	-	$	-	$	-	$	6,725
Collectively evaluated for impairment		4,224		10,926		3,253		976		4		464		19,847
Acquired with deteriorated credit quality		-		-		-		-		-		-		-
Total	$	10,949	$	10,926	$	3,253	$	976	$	4	$	464	$	26,572
Gross loans
Individually evaluated for impairment	$	85,397	$	15,517	$	2,149	$	3,954	$	87	$	-	$	107,104
Collectively evaluated for impairment		477,641		1,949,404		326,689		229,408		2,367		-		2,985,509
Acquired with deteriorated credit quality		7,078		1,775		-		328		-		-		9,181
Total	$	570,116	$	1,966,696	$	328,838	$	233,690	$	2,454	$	-	$	3,101,794

The tables above include approximately $867 million of acquired loans as of December 31, 2015 reported as collectively evaluated for impairment, of which $672 million were included in the commercial real estate loan segment.

       The Company’s allowance for loan and lease losses is analyzed quarterly. Many factors are considered, including growth in the portfolio, delinquencies, nonaccrual loan levels, and other factors inherent in the extension of credit. There have been no material changes to the allowance for loan and lease losses methodology as disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.

A summary of the activity in the allowance for loan and lease losses is as follows:

	Three Months Ended March 31, 2016
			Commercial		Commercial		Residential
	Commercial		real estate		construction		real estate		Consumer		Unallocated		Total
	(in thousands)
Balance at December 31,
2015	$	10,949	$	10,926	$	3,253	$	976	$	4	$	464	$	26,572
Charge-offs		(445)		-		-		(67)		-		-		(512)
Recoveries		1		13		-		-		-		-		14
Provision		2,592		2		364		165		-		(123)		3,000
Balance at March 31, 2016	$	13,097	$	10,941	$	3,617	$	1,074	$	4	$	341	$	29,074
	Three Months Ended March 31, 2015
			Commercial		Commercial		Residential
	Commercial		real estate		construction		real estate		Consumer		Unallocated		Total
	(in thousands)
Balance at December 31,
2014	$	3,083	$	7,799	$	1,239	$	1,113	$	7	$	919	$	14,160
Charge-offs		(45)		(4)		-		-		(11)		-		(60)
Recoveries		6		-		-		1		1		-		8
Provision		883		1,051		279		(133)		7		(262)		1,825
Balance at March 31, 2015	$	3,927	$	8,846	$	1,518	$	981	$	4	$	657	$	15,933

Trouble Debt Restructurings

At March 31, 2016, there were no commitments to lend additional funds to borrowers whose loans were on nonaccrual status or were contractually past due in excess of 90 days and still accruing interest, or whose terms have been modified in troubled debt restructurings.

The policy of the Company generally is to grant commercial, mortgage and consumer loans to residents and businesses within its market area. The ability of borrowers abilities to repay their obligations are dependent upon various factors, including the borrowers’ income and net worth, cash flows generated by the borrowers’ underlying collateral, value of the underlying collateral, and priority of the lender’s lien on the property. Such factors are dependent upon various economic conditions and individual circumstances beyond the control of the Company. The Company is therefore subject to risk of loss. The Company believes its lending policies and procedures adequately minimize the potential exposure to such risks and that adequate provisions for loan and lease losses are provided for all known and inherent risks. Collateral and/or personal guarantees are required for virtually all loans. A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms.

Loans modified in troubled debt restructurings totaled $96.5 million at March 31, 2016, of which $1.4 million were on nonaccrual status and $95.1 million were performing troubled debt restructurings. At December 31, 2015, loans modified in troubled debt restructurings totaled $86.6 million, of which $0.7 million were on nonaccrual status and $85.9 million were performing troubled debt restructurings. The Company has allocated $6.0 million in specific allocations with respect to loans whose loan terms had been modified in troubled debt restructurings as of March 31, 2016. At December 31, 2015, there were $4.5 million in specific allocations with respect to performing troubled debt restructurings, and there were no specific allocations with respect to troubled debt restructurings as of March 31, 2015. Performing TDRs as of March 31, 2016 increased the allowance for loan and lease losses by $1.5 million for the three months ended March 31, 2016. Performing TDRs as of March 31, 2015 did not increase the allowance for loan and lease losses for the three months ended March 31, 2015.

The $6.0 million in specific allocations referenced above were associated with taxi medallion lending and were calculated based on the present value of estimated cash flows, including contractual debt interest service through maturity, and principal repayments based on the fair value of the collateral excluding any consideration for personal guarantees of borrowers, which provide an additional source of repayment but cannot be relied upon. The valuation per corporate medallion used for the calculation at March 31, 2016 was approximately $775,000. An additional $1.5 million specific allocation was required at March 31, 2016 due to a decline in the Company’s estimated valuation of taxi medallions at December 31, 2015, when the specific allocation was $4.5 million.

The following table presents loans by class modified as troubled debt restructurings that occurred during the three months ended March 31, 2016 (dollars in thousands):

		Pre-Modification		Post-Modification
		Outstanding		Outstanding
	Number of	Recorded		Recorded
	Loans	Investment		Investment
Troubled debt restructurings:
Commercial	9	$	9,555	$	9,555
Commercial real estate	-		-		-
Commercial construction	-		-		-
Residential real estate	-		-		-
Consumer	-		-		-
Total	9	$	9,555	$	9,555

The increase in TDRs was primarily due to six loans secured by New York City taxi medallions totaling $8.0 million that were modified during the first quarter of 2016. Four of these modifications consisted of short-term extensions of the loans’ contractual maturity dates at the pre-existing contractual rate and two of these modifications interest rates decreased from approximately 3% to 1.3-1.6%. These six loans were accruing prior to modification, while five remained in accrual status post-modification.

The troubled debt restructurings described above increased the allowance for loan and lease losses by $45 thousand during the three months ended March 31, 2016. There were no charge-offs in connection with a loan modification at the time of modification during the three months ended March 31, 2016. There were no troubled debt restructurings for which there was a payment default within twelve months following the modification during the three months ended March 31, 2016.

There were no troubled debt restructurings occurring during the three months ended March 31, 2015. There were no charge-offs in connection with a loan modification at the time of modification during the three months ended March 31, 2015. There were no troubled debt restructurings for which there was a payment default within twelve months following the modification during the three months ended March 31, 2015.

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Fair Value Measurements and Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2016

Fair Value Disclosures [Abstract]

Fair Value Measurements and Fair Value of Financial Instruments

Note 7 - Fair Value Measurements and Fair Value of Financial Instruments

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair value:

FASB ASC 820-10-05 defines fair value, establishes a framework for measuring fair value, establishes a three-level valuation hierarchy for disclosure of fair value measurements and enhances disclosure requirements for fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date.

FASB ASC 820-10-65 provides additional guidance for estimating fair value in accordance with FASB ASC 820-10-05 when the volume and level of activity for the asset or liability have significantly decreased. This ASC also includes guidance on identifying circumstances that indicate a transaction is not orderly.

FASB ASC 820-10-05 establishes a fair value hierarchy that prioritizes the inputs to valuation methods used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under FASB ASC 820-10-05 are as follows:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2: Quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (for example, supported with little or no market activity).

An asset’s or liability’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

The following information should not be interpreted as an estimate of the fair value of the entire Company since a fair value calculation is only provided for a limited portion of the Company’s assets and liabilities. Due to a wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between the Company’s disclosures and those of other companies may not be meaningful. The following methods and assumptions were used to estimate the fair values of the Company’s assets measured at fair value on a recurring basis at March 31, 2016 and December 31, 2015:

Securities Available-for-Sale

Where quoted prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. Level 1 inputs include securities that have quoted prices in active markets for identical assets. If quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics, or discounted cash flows. Examples of instruments, which would generally be classified within Level 2 of the valuation hierarchy include municipal bonds and certain agency collateralized mortgage obligations. In certain cases where there is limited activity in the market for a particular instrument, assumptions must be made to determine the fair value of the instruments and these are classified as Level 3. When measuring fair value, the valuation techniques available under the market approach, income approach and/or cost approach are used. The Company’s evaluations are based on market data and the Company employs combinations of these approaches for its valuation methods depending on the asset class.

Derivatives

The fair value of derivatives are based on valuation models using observable market data as of the measurement date (level 2). Our derivatives are traded in an over-the-counter market where quoted market prices are not always available. Therefore, the fair values of derivatives are determined using quantitative models that utilize multiple market inputs. The inputs will vary based on the type of derivative, but could include interest rates, prices and indices to generate continuous yield or pricing curves, prepayment rate, and volatility factors to value the position. The majority of market inputs are actively quoted and can be validated through external sources, including brokers, market transactions and third-party pricing services.

Loans Held for Sale

Loans held for sale are required to be measured at the lower of cost or fair value. Under FASB ASC 820-10-05, market value is to represent fair value. Management obtains quotes or bids on all or part of these loans directly from the purchasing financial institutions.

Loans Receivable

The fair value of performing loans, except residential mortgages, is calculated by discounting scheduled cash flows through the estimated maturity using estimated market discount rates that reflect the credit and interest rate risks inherent in the loan. The estimate of maturity is based on the historical experience of the Bank with prepayments for each loan classification, modified as required by an estimate of the effect of current economic and lending conditions. For performing residential mortgage loans, fair value is estimated by discounting contractual cash flows adjusted for prepayment estimates using discount rates based on secondary market sources adjusted to reflect differences in servicing and credit costs.

Off-Balance Sheet Financial Instruments

The fair value of commitments to extend credit is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. For fixed rate loan commitments, fair value also considers the difference between current levels of interest rate and the committed rates.

The fair value of financial standby letters of credit is based on fees currently charged for similar agreements or on the estimated cost to terminate them or otherwise settle the obligations with the counterparties.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

For financial assets and liabilities measured at fair value on a recurring basis, the fair value measurements by level within the fair value hierarchy used at March 31, 2016 and December 31, 2015 are as follows:

			March 31, 2016
			Fair Value Measurements at Reporting Date Using
			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
			(Level 1)		(Level 2)		(Level 3)
(in thousands)
Recurring fair value measurements:
Assets
Investment securities:
Available-for-sale:
Federal agency obligations	$	31,827	$	-	$	31,827	$	-
Residential mortgage pass-
through securities		48,545		-		48,545		-
Commercial mortgage pass-
through securities		3,053		-		3,053		-
Obligations of U.S. states and
political subdivision		9,806		-		9,806		-
Trust preferred securities		16,179		-		16,179		-
Corporate bonds and notes		41,388		-		41,388		-
Asset-backed securities		18,154		-		18,154		-
Certificates of deposit		1,516		-		1,516		-
Equity securities		377		377		-		-
Other securities		20,486		20,486		-		-
Total available-for-sale	$	191,331	$	20,863	$	170,468	$	-
Liabilities
Derivatives	$	1,568	$	-	$	1,568	$	-
Total liabilities	$	1,568	$	-	$	1,568	$	-

There were no transfers between Level 1, Level 2 and Level 3 during the three months ended March 31, 2016.

			December 31, 2015
			Fair Value Measurements at Reporting Date Using
			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
			(Level 1)		(Level 2)		(Level 3)
(in thousands)
Recurring fair value measurements:
Assets
Investment securities:
Available-for-sale:
Federal agency obligations	$	29,146	$	-	$	29,146	$	-
Residential mortgage pass-
through securities		44,910		-		44,910		-
Commercial mortgage pass-
through securities		2,972		-		2,972		-
Obligations of U.S. states and
political subdivision		8,357		-		8,357		-
Trust preferred securities		16,255		-		16,255		-
Corporate bonds and notes		53,976		-		53,976		-
Asset-backed securities		19,725		-		19,725		-
Certificates of deposit		1,905		-		1,905		-
Equity securities		374		374		-		-
Other securities		18,150		18,150		-		-
Total available-for-sale	$	195,770	$	18,524	$	177,246	$	-
Liabilities
Derivatives	$	131	$	-	$	131	$	-
Total liabilities	$	131	$	-	$	131	$	-

There were no transfers between Level 1, Level 2 and Level 3 during the year ended December 31, 2015.

Assets Measured at Fair Value on a Non-Recurring Basis

The Company may be required periodically to measure certain assets at fair value on a nonrecurring basis in accordance with GAAP. These adjustments to fair value usually result from the application of lower of cost or fair value accounting or impairment write-downs of individual assets. The Company primarily utilized appraisal value less cost to sell and other unobservable market inputs to determine fair value of assets, and therefore, these valuations are classified as a Level 3 measurement. For assets measured at fair value on a non-recurring basis, the fair value measurements at March 31, 2016 and December 31, 2015 are as follows:

Impaired loans	Valuation Techniques			Range of Unobservable Inputs
Commercial	Appraisals of collateral value			Adjustment for age of comparable sales, generally a decline of 0% to 15%. Adjustment for age of lease payments. Market capitalization rates between 4% and 8%
					Fair Value Measurements at Reporting Date Using
					Quoted
					Prices
					in Active		Significant
					Markets for		Other		Significant
					Identical		Observable		Unobservable
		March 31,			Assets		Inputs		Inputs
Assets measured at fair value on a nonrecurring basis:		2016			(Level 1)		(Level 2)		(Level 3)
Impaired loans			(in thousands)
Commercial		$	3,410		$	-	$	-	$	3,410
					Fair Value Measurements at Reporting Date Using
					Quoted
					Prices
					in Active		Significant
					Markets for		Other		Significant
					Identical		Observable		Unobservable
		December 31,			Assets		Inputs		Inputs
Assets measured at fair value on a nonrecurring basis:		2015			(Level 1)		(Level 2)		(Level 3)
Impaired loans		(in thousands)
Commercial		$	3,751		$	-	$	-	$	3,751

The following methods and assumptions were used to estimate the fair values of the Company’s assets measured at fair value on a non-recurring basis at March 31, 2016 and December 31, 2015.

Impaired loans - The value of the impaired loans above were measured based upon the fair value of the collateral of the loans. Smaller balance homogeneous loans that are collectively evaluated for impairment, such as residential mortgage loans and consumer loans, are specifically excluded from the impaired loan portfolio. The Company’s impaired loans are primarily collateral dependent. Impaired loans are individually assessed to determine that each loan’s carrying value is not in excess of the fair value of the related collateral. Impaired loans at March 31, 2016 that required a valuation allowance were $5.1 million with a related valuation allowance of $1.7 million compared to $6.0 million with a related valuation allowance of $2.2 million at December 31, 2015.

Fair Value of Financial Instruments

FASB ASC 825-10 requires all entities to disclose the estimated fair value of their financial instrument assets and liabilities. For the Company, as for most financial institutions, the majority of its assets and liabilities are considered financial instruments as defined in FASB ASC 825-10. Many of the Company’s financial instruments, however, lack an available trading market as characterized by a willing buyer and willing seller engaging in an exchange transaction. It is also the Company’s general practice and intent to hold its financial instruments to maturity and not to engage in trading or sales activities except for loans held-for-sale and investment securities available-for-sale. Therefore, significant estimations and assumptions, as well as present value calculations, were used by the Company for the purposes of this disclosure.

Cash and cash equivalents. The carrying amounts of cash and short-term instruments approximate fair values.

FHLB stock. It is not practical to determine the fair value of FHLB stock due to restrictions placed on its transferability.

Investment Securities Held-to-Maturity. The fair value of the Company’s investment securities held-to-maturity was primarily measured using information from a third-party pricing service. If quoted prices were not available, fair values were estimated primarily by obtaining quoted prices for similar assets in active markets or through the use of pricing models. In cases where there may be limited or less transparent information provided by the Company’s third-party pricing service, fair value may be estimated by the use of secondary pricing services or through the use of non-binding third-party broker quotes. 

Loans. The fair value of the Company’s loans was estimated by discounting the expected future cash flows using the current interest rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. Loans were segregated by types such as commercial, residential and consumer loans. Expected future cash flows were projected based on contractual cash flows, adjusted for estimated prepayments.

Interest-Bearing Deposits. The fair values of the Company’s interest-bearing deposits were estimated using discounted cash flow analyses. The discounted rates used were based on rates currently offered for deposits with similar remaining maturities. The fair values of the Company’s interest-bearing deposits do not take into consideration the value of the Company’s long-term relationships with depositors, which may have significant value.

Term Borrowings and Subordinated Debentures. The fair value of the Company’s long-term borrowings and subordinated debentures were calculated using a discounted cash flow approach and applying discount rates currently offered based on weighted remaining maturities.

Accrued Interest Receivable/Payable. The carrying amounts of accrued interest approximate fair value resulting in a level 2 or level 3 classification based on the level of the asset or liability with which the accrual is associated.

The following presents the carrying amount, fair value, and placement in the fair value hierarchy of the Company’s financial instruments as of March 31, 2016 and December 31, 2015.

					Fair Value Measurements
					Quoted
					Prices in
					Active		Significant
					Markets for		Other		Significant
					Identical		Observable		Unobservable
	Carrying		Fair		Assets		Inputs		Inputs
	Amount		Value		(Level 1)		(Level 2)		(Level 3)
	(in thousands)
March 31, 2016
Financial assets
Cash and due from banks	$	118,259	$	118,259	$	118,259	$	-	$	-
Investment securities available-for-sale		191,331		191,331		20,863		170,468		-
Investment securities held-to-maturity		219,373		229,470		30,413		180,553		18,504
Restricted investment in bank stocks		31,487		n/a		n/a		n/a		n/a
Net loans		3,234,739		3,242,398		-		-		3,242,398
Accrued interest receivable		12,604		12,604		199		2,486		9,919
Financial liabilities
Noninterest-bearing deposits		614,507		614,507		614,507		-		-
Interest-bearing deposits		2,278,564		2,285,918		-		2,285,918		-
Borrowings		646,501		651,739		-		651,739		-
Subordinated debentures, net		54,392		57,879		-		57,879		-
Derivatives		1,568		1,568		-		1,568		-
Accrued interest payable	$	5,101	$	5,101	$	-	$	5,101	$	-
December 31, 2015
Financial assets
Cash and due from banks	$	200,895	$	200,895	$	200,895	$	-	$	-
Investment securities available-for-sale		195,770		195,770		18,524		177,246		-
Investment securities held-to-maturity		224,056		230,558		29,226		182,774		18,558
Restricted investment in bank stocks		32,612		n/a		n/a		n/a		n/a
Net loans		3,072,435		3,059,343		-		-		3,059,343
Accrued interest receivable		12,545		12,545		68		2,699		9,778
Financial liabilities
Noninterest-bearing deposits		650,775		650,775		650,775		-		-
Interest-bearing deposits		2,140,191		2,137,149		-		2,137,149		-
Borrowings		671,587		674,131		-		674,131		-
Subordinated debentures, net		54,343		55,209		-		55,209		-
Derivatives		131		131		-		131		-
Accrued interest payable	$	4,387	$	4,387	$	-	$	4,387	$	-

The fair value of commitments to originate loans is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. For fixed-rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates. The fair values of letters of credit and lines of credit are based on fees currently charged for similar agreements or on the estimated cost to terminate or otherwise settle the obligations with the counterparties at the reporting date.

Changes in assumptions or estimation methodologies may have a material effect on these estimated fair values.

The Company’s remaining assets and liabilities, which are not considered financial instruments, have not been valued differently than has been customary with historical cost accounting. No disclosure of the relationship value of the Company’s core deposit base is required by FASB ASC 825-10.

Fair value estimates are based on existing balance sheet financial instruments, without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. For example, there are certain significant assets and liabilities that are not considered financial assets or liabilities, deferred taxes, premises and equipment, and goodwill. In addition, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in the estimates.

Management believes that reasonable comparability between financial institutions may not be likely, due to the wide range of permitted valuation techniques and numerous estimates which must be made, given the absence of active secondary markets for many of the financial instruments. This lack of uniform valuation methodologies also introduces a greater degree of subjectivity to these estimated fair values.

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Accumulated Other Comprehensive Loss

3 Months Ended

Mar. 31, 2016

Disclosure Text Block [Abstract]

Accumulated Other Comprehensive Loss

Note 8. Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss (net of tax) at March 31, 2016 and December 31, 2015 consisted of the following:

	March 31,		December 31,
	2016		2015
	(in thousands)
Net unrealized gain on investment securities available-for-sale	$	1,251	$	713
Cash flow hedge		(927)		(77)
Unamortized component of securities transferred from available-for-sale to held-to-
maturity		(1,142)		(1,173)
Defined benefit pension and post-retirement plans		(4,012)		(4,072)
Total accumulated other comprehensive loss	$	(4,830)	$	(4,609)

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Stock Based Compensation

3 Months Ended

Mar. 31, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

Note 9. Stock-Based Compensation

The Company maintains three stock-based compensation plans from which new grants could be issued. The Company’s stock-based compensation plans permit Parent Corporation common stock to be issued to key employees and directors of the Company and its subsidiaries. Grants under the existing plans can be in the form of stock options (qualified or non-qualified), restricted shares, or performance units. Shares available for grant and issuance under the existing plans as of March 31, 2016 are as follows 68,516 under the 2009 Equity Incentive Plan and 235,090 shares under the North Jersey Community Bancorp 2009 Equity Compensation Plan. The Company intends to issue all shares under these plans in the form of newly issued shares.

Restricted stock and option awards typically have a three-year vesting period starting one year after the date of grant with one-third vesting each year. The options generally expire ten years from the date of grant. Restricted stock awards granted to new employees and board members may be granted with shorter vesting periods. Grants of performance units typically have a cliff vesting after 3 years. All issuances are subject to forfeiture if the recipient leaves or is terminated prior to the awards vesting. Restricted shares have the same dividend and voting rights as common stock while options and performance units do not.

All awards are issued at fair value of the underlying shares at the grant date. The Company expenses the cost of the awards, which is determined to be the fair market value of the awards at the date of grant, ratably over the vesting period.

No options were granted during the three months ended March 31, 2016 or 2015.

During the three months ended March 31, 2016 and 2015 a total of 71,920 and 48,507 restricted shares were awarded, respectively. The compensation expense related to restricted stock awards during the quarter ended March 31, 2016 was $182,000.

During 2016 and 2015, the Company granted to various key employees performance unit awards, with each unit entitling the holder to one share of the Company’s common stock contingent upon the Company meeting or exceeding certain return on asset targets over the course of a three-year period commencing on the date of issuance. Under the agreement, and assuming the Company has met or exceeded the applicable targets, grants of performance unit awards will vest on the third anniversary of the grant date or on an earlier date in the event of a change in control, as defined in the agreement. At March 31, 2016, the specific number of shares related to performance unit awards that were expected to vest was 151,577, determined by actual performance in consideration of the established range of the performance targets, which is consistent with the level of expense currently being recognized over the vesting period. Should this expectation change, additional compensation expense could be recorded in future periods or previously recognized expense could be reversed. The maximum amount of performance unit awards is 181,892 shares. The total amount of compensation cost related to performance unit awards included in salary expense during the quarter ended March 31, 2016 and 2015 was $193,000 and $0, respectively.

Option activity under the principal option plans as of March 31, 2016 and changes during the three months ended March 31, 2016 were as follows:

				Weighted-
				Average
		Weighted-		Remaining
		Average		Contractual
		Exercise		Term		Aggregate
	Shares	Price		(In Years)		Intrinsic Value
Outstanding at December 31, 2015	535,906	$	6.48
Granted	-		-
Exercised	(5,495)		7.67
Forfeited/cancelled/expired	(20,839)		9.77
Outstanding at March 31, 2016	509,572	$	6.34		2.92	$	5,102,923
Exercisable at March 31, 2016	503,941	$	6.22		2.90	$	5,071,354

Information related to stock option exercises during 2016:

	2016
Intrinsic value of options exercised	$	54,326
Cash received from options exercised		42,171
Tax benefit realized from options exercised		17,114
Weighted average fair value of options granted		-

The aggregate intrinsic value of options above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on March 31, 2016 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on March 31, 2016. This amount changes based on the fair market value of the Parent Corporation’s stock.

The below table represents information regarding restricted shares currently outstanding at March 31, 2016:

		Weighted-
		Average
	Nonvested	Grant Date
	Shares	Fair Value
Nonvested at December 31, 2015	96,902	$	16.81
Granted	71,920		15.88
Vested	(54,648)		16.01
Forfeited/cancelled/expired	(1,000)		19.58
Nonvested at March 31, 2016	113,174	$	16.81

As of March 31, 2016, there was $1,806,000 of total unrecognized compensation cost related to nonvested restricted shares granted under the plans. The cost is expected to be recognized over a weighted average period of 24.0 months. The total fair value of shares vested during the quarter ended March 31, 2016, was $686,000.

A summary of the status of unearned performance unit awards and the change during the period is presented in the table below:

		Weighted-
		Average
		Grant Date
	Shares	Fair Value
Unearned at December 31, 2015	94,485	$	19.46
Awarded	64,540		17.15
Forfeited	(7,447)		19.46
Expired	-		-
Unearned at March 31, 2016	151,578	$	19.46

At March 31, 2016, compensation cost of $2,198,000 related to nonvested awards not yet recognized is expected to be recognized over a weighted-average period of 2.3 years.

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Components of Net Periodic Pension Cost

3 Months Ended

Mar. 31, 2016

Compensation and Retirement Disclosure [Abstract]

Components of Net Periodic Pension Cost

Note 10. Components of Net Periodic Pension Cost

The Company maintained a non-contributory defined benefit pension plan for substantially all of its employees until March 31, 2007, at which time the Company froze the plan. The following table sets forth the net periodic pension cost of the Company’s pension plan for the periods indicated.

	Three Months Ended
	March 31,
	2016		2015
Interest cost	$	128	$	138
Expected return on plan assets		(136)		(137)
Net amortization		102		108
Recognized settlement loss		-		450
Total periodic pension expense	$	94	$	559
Net actuarial gain	$	(101)	$	(742)
Total recognized in other comprehensive income	$	(101)	$	(742)
Total recognized in net periodic expense and other
comprehensive income (before tax)	$	(7)	$	(183)

Contributions

As of March 31, 2016, The Company intended to contribute $2.0 million to its Pension Trust during the second quarter of 2016. (As intended, the company contributed $2.0 million to its Pension Trust in April 2016). The trust is established to provide retirement and other benefits for eligible employees and their beneficiaries. No part of the trust assets may be applied to any purpose other than providing benefits under the plan and for defraying expenses of administering the plan and the trust.

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FHLB and other borrowings

3 Months Ended

Mar. 31, 2016

Debt Disclosure [Abstract]

FHLB and other borrowings

Note 11. FHLB and other borrowings

The Company’s FHLB and other borrowings and weighted average interest rates are summarized below:

	March 31, 2016				December 31, 2015
	Amount		Rate		Amount		Rate
	(in thousands)
By type of borrowing:
FHLB borrowings	$	631,501	1.30	%	$	656,587	1.26	%
Repurchase agreements ("REPO")		15,000	5.95			15,000	5.95
Total borrowings	$	646,501	1.41		$	671,587	1.37
By remaining period to maturity:
One year or less	$	330,501	0.64			270,587	0.64
One to two years		121,000	1.90			171,000	1.56
Two to three years		105,000	1.96			130,000	1.84
Three to four years		50,000	1.66			35,000	1.60
Four to five years		40,000	3.42			65,000	2.82
Total borrowings	$	646,501	1.41	%	$	671,587	1.37	%

The FHLB borrowings are secured by pledges of certain collateral including, but not limited to, U.S. government and agency mortgage-backed securities and a blanket assignment of qualifying first lien mortgage loans, consisting of both residential mortgages and commercial real estate loans.

The Company has entered into agreements under which it has sold securities subject to an obligation to repurchase the same or similar securities. Under these arrangements, the Company may transfer legal control over the assets but still retain effective control through an agreement that both entitles and obligates the Company to repurchase the assets. The obligation to repurchase the securities is reflected as a liability in the Company’s consolidated statement of condition, while the securities underlying the securities sold under agreements to repurchase remain in the respective asset accounts and are delivered to and held as collateral by third party trustees.

Three of the FHLB notes ($2,500,000 and $7,500,000 each due April 2, 2018, and $5,000,000 due July 16, 2018) contain a convertible option which allows the FHLB, at quarterly intervals, to convert the fixed convertible advance into replacement funding for the same or lesser principal based on any advance then offered by the FHLB at its current market rate. The Company has the option to repay these advances, if converted, without penalty. The remaining advances are payable at stated maturity, with a prepayment penalty for fixed rate advances. All FHLB advances are fixed rate while the REPOs are variable rate advances. The advances at March 31, 2016 were collateralized by approximately $1.2 billion of commercial mortgage loans, net of required over-collateralization amounts, under a blanket lien arrangement. At March 31, 2016 the Company had remaining borrowing capacity of approximately at FHLB of approximately $594 million.

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Securities Sold under Agreements to Repurchase

3 Months Ended

Mar. 31, 2016

Securities Sold under Agreements to Repurchase [Abstract]

Securities Sold under Agreements to Repurchase

Note 12 – Securities Sold under Agreements to Repurchase

Repurchase agreements are secured borrowings. The Company pledges investment securities to secure those borrowings. Information concerning repurchase agreements is summarized as follows for the periods presented:

	March 31,		December 31,		March 31,
(dollars in thousands)	2016		2015		2015
Average daily balance during the year-to-date	$	15,000	$	22,890	$	31,000
Average interest rate during the year-to-date		5.95%		5.92%		5.90%
Maximum month-end balance during the year-to-date	$	15,000	$	31,000	$	31,000%
Weighted average interest rate during the year-to-date		5.95%		5.92%		5.90%

The table below shows the remaining contractual maturity of agreement by fair value of collateral pledged:

	March 31, 2016
	Remaining Contractual Maturity of the Agreements
	Overnight and		Up to 30				Greater Than
(dollars in thousands)	Continuous		Days		30-90 Days		90 Days		Total
Repurchase agreements and
Repurchase-to-maturity transactions
U.S. Treasury and agency securities	$	-	$	-	$	-	$	5,069	$	5,069
Residential mortgage pass-through securities		-		-		-		14,849		14,849
Total Borrowings	$	-	$	-	$	-	$	19,918	$	19,918
Amounts related to agreements not included in offsetting disclosure in Note 14									$	4,918

	December 31, 2015
	Remaining Contractual Maturity of the Agreements
	Overnight and		Up to 30				Greater Than
(dollars in thousands)	Continuous		Days		30-90 Days		90 Days		Total
Repurchase agreements and
Repurchase-to-maturity transactions
U.S. Treasury and agency securities	$	-	$	-	$	-	$	6,313	$	6,313
Residential mortgage pass-through securities		-		-		-		12,589		12,589
Total Borrowings	$	-	$	-	$	-	$	18,902	$	18,902
Amounts related to agreements not included in offsetting disclosure in Note 14									$	3,902

The fair value of securities pledged to secure repurchase agreement may decline. The Company manages this risk by having a policy to pledge securities valued at 8% above the gross outstanding balance of repurchase agreement. Securities sold under agreements to repurchase are secured by securities with a carrying amount of $19.1 million and $18.8 million at March 31, 2016 and December 31, 2015.

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Subordinated Debentures

3 Months Ended

Mar. 31, 2016

Subordinated Borrowings [Abstract]

Subordinated Debentures

Note 13 - Subordinated Debentures

During 2003, the Company formed a statutory business trust, which exists for the exclusive purpose of (i) issuing Trust Securities representing undivided beneficial interests in the assets of the Trust; (ii) investing the gross proceeds of the Trust securities in junior subordinated deferrable interest debentures (subordinated debentures) of the Company; and (iii) engaging in only those activities necessary or incidental thereto. On December 19, 2003, Center Bancorp Statutory Trust II, a statutory business trust and wholly-owned subsidiary of the Parent Corporation issued $5.0 million of MMCapS capital securities to investors due on January 23, 2034. The capital securities presently qualify as Tier I capital. The trust loaned the proceeds of this offering to the Company and received in exchange $5.2 million of the Parent Corporation’s subordinated debentures. The subordinated debentures are redeemable in whole or in part prior to maturity. The floating interest rate on the subordinate debentures is three-month LIBOR plus 2.85% and reprices quarterly. The rate at March 31, 2016 was 3.47%. These subordinated debentures and the related income effects are not eliminated in the consolidated financial statements as the statutory business trust is not consolidated in accordance with FASB ASC 810-10. Distributions on the subordinated debentures owned by the subsidiary trust have been classified as interest expense in the Consolidated Statements of Income.

The following table summarizes the mandatory redeemable trust preferred securities of the Company’s Statutory Trust II at March 31, 2016 and December 31, 2015.

	Securities					Redeemable by
Issuance Date	Issued		Liquidation Value	Coupon Rate	Maturity	Issuer Beginning
12/19/2003	$	5,000,000	$1,000 per Capital	Floating 3-month	01/23/2034	01/23/2009
			Security	LIBOR + 285 Basis
				Points

During June 2015, the Parent Corporation issued $50 million in aggregate principal amount of fixed-to-floating rate subordinated notes (the “Notes”) to certain institutional investors. The Notes are non-callable for five years, have a stated maturity of July 1, 2025, and bear interest at a fixed rate of 5.75% per year, from and including June 30, 2015 to, but excluding July 1, 2020. From and including July 1, 2020 to the maturity date or early redemption date, the interest rate will reset quarterly to a level equal to the then current three-month LIBOR rate plus 393 basis points. As of March 31, 2016, unamortized costs related to the debt issuance were $763,000.

The net proceeds from the sale of the Notes were used by the Parent Corporation to contribute $35.0 million of common equity to the Bank on June 30, 2015, and to repay, on March 11, 2016, $11.25 million of SBLF preferred issued to the U.S. Treasury. Remaining funds will be used for general corporate purposes.

In connection with the issuance of the Notes, the Parent Corporation obtained ratings from Kroll Bond Rating Agency (“KBRA”). KBRA assigned investment grade ratings of BBB- for the Company’s subordinated debt and a senior deposit rating of BBB+ for the Bank.

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Offsetting Assets and Liabilities

3 Months Ended

Mar. 31, 2016

Offsetting [Abstract]

Offsetting Assets and Liabilities

Note 14 – Offsetting Assets and Liabilities

Certain financial instrument-related assets and liabilities may be eligible for offset on the consolidated statements of condition because they are subject to master netting agreements or similar agreements. However, the Company does not elect to offset such arrangements on the consolidated financial statements. The Company enters into interest rate swap agreements with financial institution counterparties. For additional detail regarding interest rate swap agreements refer to Footnote 5 within this section. In the event of default on, or termination of, any one contract, both parties have the right to net settle multiple contracts. Also, certain interest rate swap agreements may require the Company to receive or pledge cash or financial instrument collateral based on the contract provisions.

The Company also entered into an agreement to sell securities subject to an obligation to repurchase the same or similar securities, referred to as a repurchase agreement. Under this agreement, the Company may transfer legal control over the assets but still retain effective control through an agreement that both entitles and obligates the Company to repurchase the assets. The obligation to repurchase the securities is reflected as a liability in the Company’s consolidated statement of condition, while the securities underlying the repurchase agreements remain in the respective investment securities account, therefore there is no offsetting or netting of the investment securities assets with the repurchase agreement liability. The following table presents information about financial instruments that are eligible for offset as of March 31, 2016 and December 31, 2015:

							Gross Amounts Not Offset
			Gross Amounts		Net Amounts				Cash or
			Offset in the		of Assets Presented in the		Financial		Financial
	Gross Amounts		Statement of		Statement of Financial		Instruments		Instrument		Net
	Recognized		Financial Position		Position		Recognized		Collateral		Amount
	(in thousands)
March 31, 2016
Assets:
Interest rate swaps	$	—	$	—	$	—	$	—	$	—	$	—
Liabilities:
Interest rate swaps	$	1,568	$	—	$	1,568	$	—	$	1,568	$	—
Repurchase
agreements		15,000		—		15,000		—		15,000		—
Total	$	16,568	$	—	$	16,568	$	—	$	16,568	$	—
December 31, 2015
Assets:
Interest rate swaps	$	48	$	—	$	—	$	—	$	—	$	—
Liabilities:
Interest rate swaps	$	131	$	—	$	131	$	—	$	131	$	—
Repurchase
agreements		15,000		—		15,000		—		15,000		—
Total	$	15,131	$	—	$	15,131	$	—	$	15,131	$	—

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Presentation of Debt Issuance Costs

3 Months Ended

Mar. 31, 2016

Presentation Of Debt Issuance Costs

Presentation of Debt Issuance Costs

Note 15 – Presentation of Debt Issuance Costs

As of January 1, 2016, the Company adopted Accounting Standards Update (“ASU”) No. 2015-03 “Simplifying the Presentation of Debt Issuance Costs,” which requires that debt issuance costs be presented in the consolidated statement of condition as a direct deduction from the carrying amount of debt liability. This ASU is required to be applied retrospectively to all periods presented. The following table summarizes the impact of retrospective application to the consolidated statement of condition for the year ended December 31, 2015:

	December 31,
(dollars in thousands)	2015
Other assets
As previously reported	$	24,908
As reported under the new guidance		24,096
Total assets
As previously reported	$	4,016,721
As reported under the new guidance		4,015,909
Subordinated debentures
As previously reported	$	55,155
As reported under the new guidance		54,343
Total liabilities
As previously reported	$	3,539,377
As reported under the new guidance		3,538,565

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New Authoritative Accounting Guidance (Policies)

3 Months Ended

Mar. 31, 2016

Accounting Changes and Error Corrections [Abstract]

New Authoritative Accounting Guidance

ASU No. 2014-12, "Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period ("ASU 2014-12"). ASU 2014-12 requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant date fair value of the award. This update further clarifies that compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. The Company adopted ASU 2014-12 effective on January 1, 2016 and is not expected to have a significant impact on the Company's consolidated financial statements.

ASU No. 2015-03, "Interest-Imputation of Interest (Subtopic 835-30) Simplifying the Presentation of Debt Issuance Costs" requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in the ASU No. 2015-03. The Company adopted ASU 2015-03 effective on January 1, 2016 and is not expected to have a significant impact on the Company's consolidated financial statements.

ASU No. 2015-12, "Plan Accounting: Defined Benefit Pension Plans (Topic 960): Defined Contribution Pension Plans, (Topic 962): Health and Welfare Benefit Plans, (Topic 965): (Part I) Fully Benefit-Responsive Investment Contracts, (Part II) Plan Investment Disclosures, (Part III) Measurement Date Practical Expedient." ASU No. 2015-12 simplifies accounting for employee benefit plans as follows: (i) fully benefit-responsive investment contracts are now to be measured, presented and disclosed at contract value, (ii) the requirement to disclose investments that represent 5 percent or more of net assets available for benefits has been eliminated, (iii) the net appreciation or depreciation in investments for the period should be presented in the aggregate, but is no longer required to be disaggregated and disclosed by general type, (iv) if an investment is measured using the net asset value per share (or its equivalent) practical expedient in Topic 820, and that investment is in a fund that files a U.S. Department of Labor Form 5500, Annual Return/Report of Employee Benefit Plan, as a direct filing entity, disclosure of that investment’s strategy is no longer required, and (v) allows employers to measure (as a practical expedient) benefit plan assets on a month-end date nearest to the employer’s fiscal year end when the fiscal period does not coincide with a month end. ASU No. 2015-12 is effective for the Company on January 1, 2016 and is not expected to have a significant impact on the Company’s consolidated financial statements.

ASU No. 2016-02, “Leases (Topic 842)” requires the recognition of a right of use asset and related lease liability by lessees for leases classified as operating leases under current GAAP. Topic 842, which replaces the current guidance under Topic 840, retains a distinction between finance leases and operating leases. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee also will not significantly change from current GAAP. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize right of use assets and lease liabilities. Topic 842 will be effective for the Company for reporting periods beginning January 1, 2019, with an early adoption permitted. The Company must apply a modified retrospective transition approach for the applicable leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Management is currently evaluating the impact of Topic 842 on the Company’s consolidated financial statements.

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Earnings per Common Share (Tables)

3 Months Ended

Mar. 31, 2016

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three Months Ended
	March 31,
(in thousands, except for per share data)	2016		2015
Net income	$	10,391	$	10,379
Preferred stock dividends		(22)		(28)
Net income available to common stockholders	$	10,369	$	10,351
Basic weighted average common shares outstanding		29,996		29,757
Effect of dilutive options		262		392
Diluted weighted average common shares outstanding		30,258		30,149
Earnings per common share:
Basic	$	0.35	$	0.35
Diluted	$	0.34	$	0.34

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Investment Securities (Tables)

3 Months Ended

Mar. 31, 2016

Investments, Debt and Equity Securities [Abstract]

Unrealized Gain (Loss) on Investments [Table Text Block]

The following tables present information related to the Company’s investment securities at March 31, 2016 and December 31, 2015 (dollars in thousands):

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
March 31, 2016	Cost		Gains		Losses		Value
Investment securities available-for-sale
Federal agency obligations	$	31,370	$	486	$	(29)	$	31,827
Residential mortgage pass-through securities		47,404		1,162		(21)		48,545
Commercial mortgage pass-through securities		2,965		88		-		3,053
Obligations of U.S. states and political subdivisions		9,642		164		-		9,806
Trust preferred securities		16,089		440		(350)		16,179
Corporate bonds and notes		40,771		873		(256)		41,388
Asset-backed securities		18,682		-		(528)		18,154
Certificates of deposit		1,496		20		-		1,516
Equity securities		376		29		(28)		377
Other securities		20,490		84		(88)		20,486
Total securities available-for-sale	$	189,285	$	3,346	$	(1,300)	$	191,331
			Gross		Gross
	Amortized		Unrecognized		Unrecognized		Fair
	Cost		Gains		Losses		Value
Investment securities held-to-maturity
U.S. Treasury and agency securities	$	28,523	$	1,890	$	-	$	30,413
Federal agency obligations		31,567		700		(8)		33,259
Residential mortgage-backed securities		3,489		28		(15)		3,502
Commercial mortgage-backed securities		1,317		30		-		1,347
Obligations of U.S. states and political divisions		117,416		6,208		-		123,624
Corporate bonds and notes		37,061		1,396		(132)		38,325
Total securities held-to-maturity	$	219,373	$	10,252	$	(155)	$	229,470
Total investment securities	$	408,658	$	13,598	$	(1,455)	$	420,801
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
December 31, 2015	Cost		Gains		Losses		Value
Investment securities available-for-sale
Federal agency obligations	$	29,062	$	142	$	(58)	$	29,146
Residential mortgage pass-through securities		44,155		803		(48)		44,910
Commercial mortgage pass-through securities		2,981		-		(9)		2,972
Obligations of U.S. states and political subdivisions		8,188		169		-		8,357
Trust preferred securities		16,088		398		(231)		16,255
Corporate bonds and notes		53,566		702		(292)		53,976
Asset-backed securities		20,005		18		(298)		19,725
Certificates of deposit		1,895		18		(8)		1,905
Equity securities		376		21		(23)		374
Other securities		18,303		-		(153)		18,150
Total securities available-for-sale	$	194,619	$	2,271	$	(1,120)	$	195,770
			Gross		Gross
	Amortized		Unrecognized		Unrecognized		Fair
	Cost		Gains		Losses		Value
Investment securities held-to-maturity
U.S. Treasury and agency securities	$	28,471	$	755	$	-	$	29,226
Federal agency obligations		33,616		280		(119)		33,777
Residential mortgage-backed securities		3,805		11		(6)		3,810
Commercial mortgage-backed securities		4,110		27		(2)		4,135
Obligations of U.S. states and political divisions		118,015		5,001		(3)		123,013
Corporate bonds and notes		36,039		719		(161)		36,597
Total securities held-to-maturity	$	224,056	$	6,793	$	(291)	$	230,558
Total investment securities	$	418,675	$	9,064	$	(1,411)	$	426,328

Investments Classified by Contractual Maturity Date [Table Text Block]

The following table presents information for investment securities at March 31, 2016, based on scheduled maturities. Actual maturities can be expected to differ from scheduled maturities due to prepayment or early call options of the issuer.

	March 31, 2016
	Amortized		Fair
	Cost		Value
	(in thousands)
Investment securities available-for-sale:
Due in one year or less	$	10,948	$	10,967
Due after one year through five years		15,800		16,287
Due after five years through ten years		37,582		37,795
Due after ten years		53,720		58,821
Residential mortgage pass-through securities		47,404		48,545
Commercial mortgage pass-through securities		2,965		3,053
Equity securities		376		377
Other securities		20,490		20,486
Total	$	189,285	$	191,331
Investment securities held-to-maturity:
Due in one year or less	$	1,000	$	1,000
Due after one year through five years		14,561		14,907
Due after five years through ten years		85,428		90,182
Due after ten years		113,578		118,532
Residential mortgage pass-through securities		3,489		3,502
Commercial mortgage pass-through securities		1,317		1,347
Total	$	219,373	$	229,470
Total investment securities	$	408,658	$	420,801

Schedule of Realized Gain (Loss) [Table Text Block]

Gross gains and losses from the sales, calls and maturities of investment securities for the three months ended March 31, 2016 and 2015 were as follows:

	Three Months Ended
	March 31,
(in thousands)	2016		2015
Proceeds	$	-	$	9,537
Gross gains on sales of investment securities		-		506
Gross losses on sales of investment securities		-		-
Net gains on sales of investment securities		-		506
Less: tax provision on net gains		-		207
Total	$	-	$	299

Schedule of Unrealized Loss on Investments [Table Text Block]

The following tables indicate gross unrealized losses not recognized in income and fair value, aggregated by investment category and the length of time individual securities have been in a continuous unrealized loss position at March 31, 2016 and December 31, 2015:

		March 31, 2016
		Total								Less than 12 Months								12 Months or Longer
		Fair			Unrealized					Fair			Unrealized					Fair				Unrealized
		Value			Losses					Value			Losses					Value				Losses
		(in thousands)
Investment securities
available-for-sale:
Federal agency obligation		$	7,070		$		(29)			$	6,836		$			(28)		$		234		$		(1)
Residential mortgage
pass-through securities			7,173				(21)				6,679					(14)				494				(7)
Trust preferred securities			1,227				(350)				-					-				1,227				(350)
Corporate bonds and notes			15,553				(256)				11,727					(118)				3,826				(138)
Asset-backed securities			18,154				(528)				14,825					(417)				3,329				(111)
Equity securities			117				(28)				-					-				117				(28)
Other securities			5,412				(88)				-					-				5,412				(88)
Total		$	54,706		$		(1,300)			$	40,067		$			(577)		$		14,639		$		(723)
Investment securities
held-to-maturity:
Federal agency obligation		$	4,161		$		(8)			$	2,300		$			(6)		$		1,861		$		(2)
Residential mortgage
pass-through securities			1,920				(15)				1,920					(15)				-				-
Corporate bonds and notes			2,632				(131)				2,632					(131)				-				-
Total		$	8,713		$		(154)			$	6,852		$			(152)		$		1,861		$		(2)
Total temporarily impaired
securities		$	63,419		$		(1,454)			$	46,919		$			(729)		$		16,500		$		(725)
	December 31, 2015
	Total								Less than 12 Months								12 Months or Longer
	Fair					Unrealized			Fair					Unrealized			Fair				Unrealized
	Value					Losses			Value					Losses			Value				Losses
	(dollars in thousands)
Investment Securities
Available-for-Sale:
Federal agency obligation	$			12,260		$		(58)	$			12,013		$	(54)		$		247		$		(4)
Residential mortgage
pass-through securities				9,027				(48)				9,027			(48)				—				—
Commercial mortgage-backed
securities				2,971				(9)				2,971			(9)				—				—
Trust preferred securities				1,345				(231)				—			—				1,345				(231)
Corporate bonds and notes				16,533				(292)				12,702			(161)				3,831				(131)
Asset-backed securities				14,745				(298)				11,250			(188)				3,495				(110)
Certificates of deposit				215				(8)				215			(8)				—				—
Equity securities				123				(23)				—			—				123				(23)
Other securities				5,347				(153)				—			—				5,347				(153)
Total	$			62,566		$		(1,120)	$			48,178		$	(468)		$		14,388		$		(652)
Investment Securities
Held-to-Maturity:
Federal agency obligation				12,554				(119)				11,783			(109)				771				(10)
Residential mortgage
pass-through securities				2,480				(6)				2,480			(6)				—				—
Commercial mortgage-backed
securities				1,331				(2)				1,331			(2)				—				—
Obligations of U.S. states
and political subdivisions				981				(3)				981			(3)				—				—
Corporate bonds and notes				5,536				(161)				5,536			(161)				—				—
Total	$			22,882		$		(291)	$			22,111		$	(281)		$		771		$		(10)
Total Temporarily Impaired
Securities	$			85,448		$		(1,411)	$			70,289		$	(749)		$		15,159		$		(662)

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Derivatives (Tables)

3 Months Ended

Mar. 31, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Interest Rate Derivatives [Table Text Block]

Summary information about the interest rate swaps designated as cash flow hedges as of March 31, 2016, December 31, 2015 and March 31, 2015 are presented in the following table.

	March 31,		December 31,		March 31,
(dollars in thousands)	2016		2015		2015
Notional amount	$	75,000	$	75,000	$	50,000
Weighted average pay rates		1.57%		1.56%		1.58%
Weighted average receive rates		0.56%		0.44%		0.24%
Weighted average maturity	3.6 years			3.8 years		4.2 years
Fair value	$	(1,568)	$	(131)	$	(486)

Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) [Table Text Block]

The following table presents the net gains (losses), recorded in other comprehensive income and the Consolidated Statements of Income relating to the cash flow derivative instruments for the following periods:

	Three Months Ended March 31, 2016
					Amount of
					loss
					recognized
					in other
	Amount of loss				Non-
	recognized		Amount of loss		interest
	in OCI		reclassified		income
	(Effective		from OCI to interest		(Ineffective
(in thousands)	Portion)		income		Portion)
Interest rate contracts	$	(1,437)	$	-	$	-
	Three Months Ended March 31, 2015
					Amount of
					loss
					recognized
					in other
	Amount of loss				non-
	recognized		Amount of loss		interest
	in OCI		reclassified		income
	(effective		from OCI to interest		(ineffective
(in thousands)	Portion)		income		portion)
Interest rate contracts	$	(534)	$	-	$	-

Schedule of Cash Flow Hedging Instruments, Statements of Financial Performance and Financial Position, Location [Table Text Block]

The following table reflects the cash flow hedges included in the consolidated statements of condition as of March 31, 2016 and December 31, 2015:

	2016				2015
	Notional				Notional
(in thousands)	Amount		Fair Value		Amount		Fair Value
Included in other assets/(liabilities):
Interest rate swaps related to FHLB Advances	$	75,000	$	(1,568)	$	75,000	$	(131)

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Loans and the Allowance for Loan and Lease Losses (Tables)

3 Months Ended

Mar. 31, 2016

Receivables [Abstract]

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

The following table sets forth the composition of the Company’s loan portfolio, including net deferred loan fees, at March 31, 2016 and December 31, 2015:

	March 31,		December 31,
	2016		2015
	(in thousands)
Commercial	$	601,708	$	570,116
Commercial real estate		2,028,301		1,966,696
Commercial construction		402,594		328,838
Residential real estate		231,319		233,690
Consumer		1,851		2,454
Gross loans		3,265,773		3,101,794
Net deferred loan fees		(1,960)		(2,787)
Total loans receivable	$	3,263,813	$	3,099,007

Loans and Leases Receivable Purchase Credit Impaired Loans [Table Text Block]

The carrying amount of those loans is as follows at March 31, 2016 and December 31, 2015.

	March 31,		December 31,
	2016		2015
	(in thousands)
Commercial	$	7,059	$	7,078
Commercial real estate		1,745		1,775
Residential real estate		334		328
Total carrying amount	$	9,138	$	9,181

Loans and Leases Receivable Purchased Loans [Table Text Block]

The accretable yield, or income expected to be collected, on the purchased loans disclosed above for the three months ended March 31, 2016 is as follows (in thousands):

	Three Months		Three Months
	Ended March		Ended March
	31, 2016		31, 2015
Beginning balance	$	3,599	$	4,805
New loans purchased		-		-
Accretion of income		(183)		(54)
Reclassification from nonaccretable differences		-		-
Disposals		-		-
Ending balance	$	3,416	$	4,751

Schedule of Financing Receivables, Non Accrual Status [Table Text Block]

The following table presents information about the recorded investment in loan receivables on nonaccrual status by segment at March 31, 2016 and December 31, 2015:

Loans Receivable on Nonaccrual Status

	March 31,		December 31,
	2016		2015
	(in thousands)
Commercial	$	7,239	$	6,586
Commercial real estate		8,841		9,112
Commercial construction		1,636		1,479
Residential real estate		3,734		3,559
Total loans receivable on nonaccrual status	$	21,450	$	20,736

Financing Receivable Credit Quality Indicators [Table Text Block]

The following table presents information, excluding net deferred loan fees, about the Company’s loan credit quality at March 31, 2016 and December 31, 2015:

	March 31, 2016
			Special
	Pass		Mention		Substandard		Doubtful		Total
	(in thousands)
Commercial	$	494,413	$	6,976	$	100,319	$	-	$	601,708
Commercial real estate		1,979,211		17,820		31,270		-		2,028,301
Commercial construction		400,131		827		1,636		-		402,594
Residential real estate		226,879		-		4,440		-		231,319
Consumer		1,770		-		81		-		1,851
Total loans	$	3,102,404	$	25,623	$	137,746	$	-	$	3,265,773
	December 31, 2015
			Special
	Pass		Mention		Substandard		Doubtful		Total
	(in thousands)
Commercial	$	462,358	$	11,760	$	95,998	$	-	$	570,116
Commercial real estate		1,919,041		18,990		28,426	239			1,966,696
Commercial construction		326,697		662		1,479		-		328,838
Residential real estate		229,426		-		4,264		-		233,690
Consumer		2,368		-		86		-		2,454
Total loans	$	2,939,890	$	31,412	$	130,253	$	239	$	3,101,794

Impaired Financing Receivables [Table Text Block]

The following table provides an analysis of the impaired loans, by loan segment, at March 31, 2016 and December 31, 2015:

	March 31, 2016
			Unpaid
	Recorded		Principal		Related
	Investment		Balance		Allowance
No related allowance recorded	(in thousands)
Commercial	$	3,320	$	3,625
Commercial real estate		15,271		15,202
Commercial construction		2,466		2,538
Residential real estate		4,123		4,532
Consumer		81		81
Total	$	25,261	$	25,978
With an allowance recorded
Commercial	$	91,928	$	91,851	$	7,677
Total
Commercial	$	95,248	$	95,476	$	7,677
Commercial real estate		15,271		15,202		-
Commercial construction		2,466		2,538		-
Residential real estate		4,123		4,532		-
Consumer		81		81		-
Total	$	117,189	$	117,829	$	7,677
	December 31, 2015
			Unpaid
	Recorded		Principal		Related
	Investment		Balance		Allowance
No related allowance recorded	(in thousands)
Commercial	$	610	$	645
Commercial real estate		15,517		16,512
Commercial construction		2,149		2,141
Residential real estate		3,954		4,329
Consumer		87		86
Total	$	22,317	$	23,713
With an allowance recorded
Commercial	$	84,787	$	84,449	$	6,725
Total
Commercial	$	85,397	$	85,094	$	6,725
Commercial real estate		15,517		16,512		-
Commercial construction		2,149		2,141		-
Residential real estate		3,954		4,329		-
Consumer		87		86		-
Total	$	107,104	$	108,162	$	6,725

Schedule of Average Balance and Interest Income Recognized on Impaired Loans [Table Text Block]

The following table provides an analysis related to the average recorded investment and interest income recognized on impaired loans by segment as of and for the three and nine months ended March 31, 2016 and 2015 (in thousands):

	Three Months Ended March 31,
	2016				2015
	Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income
	Investment		Recognized		Investment		Recognized
Impaired loans with
no related allowance
recorded
Commercial	$	2,591	$	24	$	290	$	-
Commercial real
estate		15,274		25		6,052		19
Commercial
construction		2,307		16		-		-
Residential real
estate		4,107		5		3,613		2
Consumer		84		1		106		1
Total	$	24,363	$	71	$	10,061	$	22
Impaired loans with
an allowance
recorded
Commercial	$	83,759	$	737	$	387	$	-
Commercial real
estate		-		-		6,335		-
Total	$	83,759	$	737	$	6,722	$	-
Total impaired loans
Commercial	$	86,350	$	761	$	677	$	-
Commercial real
estate		15,274		25		12,387		19
Commercial
construction		2,307		16
Residential real
estate		4,107		5		3,613		2
Consumer		84		1		106		1
Total	$	108,122	$	808	$	16,783	$	22

Past Due Financing Receivables [Table Text Block]

The following table provides an analysis of the aging of the recorded investment of loans, excluding net deferred loan fees that are past due at March 31, 2016 and December 31, 2015 by segment:

Aging Analysis

	March 31, 2016
													Loans
													Receivable 90
					90 Days or								Days or Greater
	30-59 Days		60-89 Days		Greater Past		Total Past				Total Loans		Past Due and
	Past Due		Past Due		Due		Due		Current		Receivable		Accruing
	(in thousands)
Commercial	$	5,539	$	-	$	12,409	$	17,948	$	583,760	$	601,708	$	5,250
Commercial real
estate		5,408		-		10,027		15,435		2,012,866		2,028,301		1,382
Commercial
construction		1,750		-		-		1,750		400,844		402,594		-
Residential real
estate		1,741		380		2,746		4,867		226,452		231,319		-
Consumer		2		-		-		2		1,849		1,851
Total	$	14,440	$	380	$	25,181	$	40,002	$	3,225,771	$	3,265,773	$	6,632
	December 31, 2015
													Loans
													Receivable 90
					90 Days or								Days or Greater
	30-59 Days		60-89 Days		Greater Past		Total Past				Total Loans		Past Due and
	Past Due		Past Due		Due		Due		Current		Receivable		Accruing
	(in thousands)
Commercial	$	6,887	$	3,505	$	6,865	$	17,257	$	552,859	$	570,116	$	-
Commercial real
estate		1,998		988		9,561		12,547		1,954,149		1,966,696		-
Commercial
construction		-		-		1,479		1,479		327,359		328,838		-
Residential real
estate		-		-		2,122		2,122		231,568		233,690		-
Consumer		4		9		-		13		2,441		2,454		-
Total	$	8,889	$	4,502	$	20,027	$	33,418	$	3,068,376	$	3,101,794	$	-

Schedule of Recorded Investment in Financing Receivables [Table Text Block]

The following table details, at the period presented, the amount of loans receivable that are evaluated individually, and collectively, for impairment (excluding net deferred loan fees), those acquired with deteriorated quality, and the related portion of the allowance for loan and lease losses that are allocated to each loan portfolio segment:

	March 31, 2016
			Commercial		Commercial		Residential
	Commercial		real estate		construction		real estate		Consumer		Unallocated		Total
	(in thousands)
Allowance for loan and lease losses
Individually evaluated for impairment	$	7,677	$	-	$	-	$	-	$	-	$	-	$	7.677
Collectively evaluated for impairment		5,420		10,941		3,617		1,074		4		341		21,397
Acquired with deteriorated credit quality		-		-		-		-		-		-		-
Total	$	13,097	$	10,941	$	3,617	$	1,074	$	4	$	341	$	29,074
Gross loans
Individually evaluated for impairment	$	95,248	$	15,271	$	2,466	$	4,123	$	81	$	-	$	117,189
Collectively evaluated for impairment		499,401		2,011,285		400,128		226,862		1,770		-		3,139,446
Acquired with deteriorated credit quality		7,059		1,745		-		334		-		-		9,138
Total	$	601,708	$	2,028,301	$	402,594	$	231,319	$	1,851	$	-	$	3,265,773

The following table details the amount of gross loans that are evaluated individually, and collectively, for impairment (excluding net deferred costs), those acquired with deteriorated quality, and the related portion of the allowance for loan and lease loss that is allocated to each loan portfolio class:

	December 31, 2015
			Commercial		Commercial		Residential
	Commercial		real estate		construction		real estate		Consumer		Unallocated		Total
	(in thousands)
Allowance for loan and lease losses
Individually evaluated for impairment	$	6,725	$	-	$	-	$	-	$	-	$	-	$	6,725
Collectively evaluated for impairment		4,224		10,926		3,253		976		4		464		19,847
Acquired with deteriorated credit quality		-		-		-		-		-		-		-
Total	$	10,949	$	10,926	$	3,253	$	976	$	4	$	464	$	26,572
Gross loans
Individually evaluated for impairment	$	85,397	$	15,517	$	2,149	$	3,954	$	87	$	-	$	107,104
Collectively evaluated for impairment		477,641		1,949,404		326,689		229,408		2,367		-		2,985,509
Acquired with deteriorated credit quality		7,078		1,775		-		328		-		-		9,181
Total	$	570,116	$	1,966,696	$	328,838	$	233,690	$	2,454	$	-	$	3,101,794

Allowance for Credit Losses on Financing Receivables [Table Text Block]

A summary of the activity in the allowance for loan and lease losses is as follows:

	Three Months Ended March 31, 2016
			Commercial		Commercial		Residential
	Commercial		real estate		construction		real estate		Consumer		Unallocated		Total
	(in thousands)
Balance at December 31,
2015	$	10,949	$	10,926	$	3,253	$	976	$	4	$	464	$	26,572
Charge-offs		(445)		-		-		(67)		-		-		(512)
Recoveries		1		13		-		-		-		-		14
Provision		2,592		2		364		165		-		(123)		3,000
Balance at March 31, 2016	$	13,097	$	10,941	$	3,617	$	1,074	$	4	$	341	$	29,074
	Three Months Ended March 31, 2015
			Commercial		Commercial		Residential
	Commercial		real estate		construction		real estate		Consumer		Unallocated		Total
	(in thousands)
Balance at December 31,
2014	$	3,083	$	7,799	$	1,239	$	1,113	$	7	$	919	$	14,160
Charge-offs		(45)		(4)		-		-		(11)		-		(60)
Recoveries		6		-		-		1		1		-		8
Provision		883		1,051		279		(133)		7		(262)		1,825
Balance at March 31, 2015	$	3,927	$	8,846	$	1,518	$	981	$	4	$	657	$	15,933

Schedule of Debtor Troubled Debt Restructuring, Current Period [Table Text Block]

The following table presents loans by class modified as troubled debt restructurings that occurred during the three months ended March 31, 2016 (dollars in thousands):

		Pre-Modification		Post-Modification
		Outstanding		Outstanding
	Number of	Recorded		Recorded
	Loans	Investment		Investment
Troubled debt restructurings:
Commercial	9	$	9,555	$	9,555
Commercial real estate	-		-		-
Commercial construction	-		-		-
Residential real estate	-		-		-
Consumer	-		-		-
Total	9	$	9,555	$	9,555

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Fair Value Measurements and Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2016

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

For financial assets and liabilities measured at fair value on a recurring basis, the fair value measurements by level within the fair value hierarchy used at March 31, 2016 and December 31, 2015 are as follows:

			March 31, 2016
			Fair Value Measurements at Reporting Date Using
			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
			(Level 1)		(Level 2)		(Level 3)
(in thousands)
Recurring fair value measurements:
Assets
Investment securities:
Available-for-sale:
Federal agency obligations	$	31,827	$	-	$	31,827	$	-
Residential mortgage pass-
through securities		48,545		-		48,545		-
Commercial mortgage pass-
through securities		3,053		-		3,053		-
Obligations of U.S. states and
political subdivision		9,806		-		9,806		-
Trust preferred securities		16,179		-		16,179		-
Corporate bonds and notes		41,388		-		41,388		-
Asset-backed securities		18,154		-		18,154		-
Certificates of deposit		1,516		-		1,516		-
Equity securities		377		377		-		-
Other securities		20,486		20,486		-		-
Total available-for-sale	$	191,331	$	20,863	$	170,468	$	-
Liabilities
Derivatives	$	1,568	$	-	$	1,568	$	-
Total liabilities	$	1,568	$	-	$	1,568	$	-

			December 31, 2015
			Fair Value Measurements at Reporting Date Using
			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
			(Level 1)		(Level 2)		(Level 3)
(in thousands)
Recurring fair value measurements:
Assets
Investment securities:
Available-for-sale:
Federal agency obligations	$	29,146	$	-	$	29,146	$	-
Residential mortgage pass-
through securities		44,910		-		44,910		-
Commercial mortgage pass-
through securities		2,972		-		2,972		-
Obligations of U.S. states and
political subdivision		8,357		-		8,357		-
Trust preferred securities		16,255		-		16,255		-
Corporate bonds and notes		53,976		-		53,976		-
Asset-backed securities		19,725		-		19,725		-
Certificates of deposit		1,905		-		1,905		-
Equity securities		374		374		-		-
Other securities		18,150		18,150		-		-
Total available-for-sale	$	195,770	$	18,524	$	177,246	$	-
Liabilities
Derivatives	$	131	$	-	$	131	$	-
Total liabilities	$	131	$	-	$	131	$	-

Fair Value, Assets and Liabilities Measured on Nonrecurring Basis, Valuation Techniques [Table Text Block]

For assets measured at fair value on a non-recurring basis, the fair value measurements at March 31, 2016 and December 31, 2015 are as follows:

Impaired loans	Valuation Techniques	Range of Unobservable Inputs
Commercial	Appraisals of collateral value	Adjustment for age of comparable sales, generally a decline of 0% to 15%. Adjustment for age of lease payments. Market capitalization rates between 4% and 8%

Fair Value Measurements, Nonrecurring [Table Text Block]

			Fair Value Measurements at Reporting Date Using
			Quoted
			Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
	March 31,		Assets		Inputs		Inputs
Assets measured at fair value on a nonrecurring basis:	2016		(Level 1)		(Level 2)		(Level 3)
Impaired loans		(in thousands)
Commercial	$	3,410	$	-	$	-	$	3,410
			Fair Value Measurements at Reporting Date Using
			Quoted
			Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
	December 31,		Assets		Inputs		Inputs
Assets measured at fair value on a nonrecurring basis:	2015		(Level 1)		(Level 2)		(Level 3)
Impaired loans	(in thousands)
Commercial	$	3,751	$	-	$	-	$	3,751

Fair Value, by Balance Sheet Grouping [Table Text Block]

The following presents the carrying amount, fair value, and placement in the fair value hierarchy of the Company’s financial instruments as of March 31, 2016 and December 31, 2015.

					Fair Value Measurements
					Quoted
					Prices in
					Active		Significant
					Markets for		Other		Significant
					Identical		Observable		Unobservable
	Carrying		Fair		Assets		Inputs		Inputs
	Amount		Value		(Level 1)		(Level 2)		(Level 3)
	(in thousands)
March 31, 2016
Financial assets
Cash and due from banks	$	118,259	$	118,259	$	118,259	$	-	$	-
Investment securities available-for-sale		191,331		191,331		20,863		170,468		-
Investment securities held-to-maturity		219,373		229,470		30,413		180,553		18,504
Restricted investment in bank stocks		31,487		n/a		n/a		n/a		n/a
Net loans		3,234,739		3,242,398		-		-		3,242,398
Accrued interest receivable		12,604		12,604		199		2,486		9,919
Financial liabilities
Noninterest-bearing deposits		614,507		614,507		614,507		-		-
Interest-bearing deposits		2,278,564		2,285,918		-		2,285,918		-
Borrowings		646,501		651,739		-		651,739		-
Subordinated debentures, net		54,392		57,879		-		57,879		-
Derivatives		1,568		1,568		-		1,568		-
Accrued interest payable	$	5,101	$	5,101	$	-	$	5,101	$	-
December 31, 2015
Financial assets
Cash and due from banks	$	200,895	$	200,895	$	200,895	$	-	$	-
Investment securities available-for-sale		195,770		195,770		18,524		177,246		-
Investment securities held-to-maturity		224,056		230,558		29,226		182,774		18,558
Restricted investment in bank stocks		32,612		n/a		n/a		n/a		n/a
Net loans		3,072,435		3,059,343		-		-		3,059,343
Accrued interest receivable		12,545		12,545		68		2,699		9,778
Financial liabilities
Noninterest-bearing deposits		650,775		650,775		650,775		-		-
Interest-bearing deposits		2,140,191		2,137,149		-		2,137,149		-
Borrowings		671,587		674,131		-		674,131		-
Subordinated debentures, net		54,343		55,209		-		55,209		-
Derivatives		131		131		-		131		-
Accrued interest payable	$	4,387	$	4,387	$	-	$	4,387	$	-

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Accumulated Other Comprehensive Loss (Tables)

3 Months Ended

Mar. 31, 2016

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

Accumulated other comprehensive loss (net of tax) at March 31, 2016 and December 31, 2015 consisted of the following:

	March 31,		December 31,
	2016		2015
	(in thousands)
Net unrealized gain on investment securities available-for-sale	$	1,251	$	713
Cash flow hedge		(927)		(77)
Unamortized component of securities transferred from available-for-sale to held-to-
maturity		(1,142)		(1,173)
Defined benefit pension and post-retirement plans		(4,012)		(4,072)
Total accumulated other comprehensive loss	$	(4,830)	$	(4,609)

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Stock Based Compensation (Tables)

3 Months Ended

Mar. 31, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Share-based Compensation Arrangements by Share-based Payment Award [Table Text Block]

Option activity under the principal option plans as of March 31, 2016 and changes during the three months ended March 31, 2016 were as follows:

				Weighted-
				Average
		Weighted-		Remaining
		Average		Contractual
		Exercise		Term		Aggregate
	Shares	Price		(In Years)		Intrinsic Value
Outstanding at December 31, 2015	535,906	$	6.48
Granted	-		-
Exercised	(5,495)		7.67
Forfeited/cancelled/expired	(20,839)		9.77
Outstanding at March 31, 2016	509,572	$	6.34		2.92	$	5,102,923
Exercisable at March 31, 2016	503,941	$	6.22		2.90	$	5,071,354

Schedule of Share Based Compensation Stock Option Plan Table Text Block

Information related to stock option exercises during 2016:

	2016
Intrinsic value of options exercised	$	54,326
Cash received from options exercised		42,171
Tax benefit realized from options exercised		17,114
Weighted average fair value of options granted		-

Schedule of Nonvested Restricted Stock Units Activity [Table Text Block]

The below table represents information regarding restricted shares currently outstanding at March 31, 2016:

		Weighted-
		Average
	Nonvested	Grant Date
	Shares	Fair Value
Nonvested at December 31, 2015	96,902	$	16.81
Granted	71,920		15.88
Vested	(54,648)		16.01
Forfeited/cancelled/expired	(1,000)		19.58
Nonvested at March 31, 2016	113,174	$	16.81

Schedule of Unearned Performance Unit Awards [Table Text Block]

A summary of the status of unearned performance unit awards and the change during the period is presented in the table below:

		Weighted-
		Average
		Grant Date
	Shares	Fair Value
Unearned at December 31, 2015	94,485	$	19.46
Awarded	64,540		17.15
Forfeited	(7,447)		19.46
Expired	-		-
Unearned at March 31, 2016	151,578	$	19.46

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Components of Net Periodic Pension Cost (Tables)

3 Months Ended

Mar. 31, 2016

Compensation and Retirement Disclosure [Abstract]

Schedule of Net Benefit Costs [Table Text Block]

The following table sets forth the net periodic pension cost of the Company’s pension plan for the periods indicated.

	Three Months Ended
	March 31,
	2016		2015
Interest cost	$	128	$	138
Expected return on plan assets		(136)		(137)
Net amortization		102		108
Recognized settlement loss		-		450
Total periodic pension expense	$	94	$	559
Net actuarial gain	$	(101)	$	(742)
Total recognized in other comprehensive income	$	(101)	$	(742)
Total recognized in net periodic expense and other
comprehensive income (before tax)	$	(7)	$	(183)

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FHLB and other borrowings (Tables)

3 Months Ended

Mar. 31, 2016

Debt Disclosure [Abstract]

Schedule of Long-term Debt Instruments [Table Text Block]

The Company’s FHLB and other borrowings and weighted average interest rates are summarized below:

	March 31, 2016				December 31, 2015
	Amount		Rate		Amount		Rate
	(in thousands)
By type of borrowing:
FHLB borrowings	$	631,501	1.30	%	$	656,587	1.26	%
Repurchase agreements ("REPO")		15,000	5.95			15,000	5.95
Total borrowings	$	646,501	1.41		$	671,587	1.37
By remaining period to maturity:
One year or less	$	330,501	0.64			270,587	0.64
One to two years		121,000	1.90			171,000	1.56
Two to three years		105,000	1.96			130,000	1.84
Three to four years		50,000	1.66			35,000	1.60
Four to five years		40,000	3.42			65,000	2.82
Total borrowings	$	646,501	1.41	%	$	671,587	1.37	%

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Securities Sold under Agreements to Repurchase (Tables)

3 Months Ended

Mar. 31, 2016

Securities Sold Under Agreements To Repurchase Tables

Schedule of information concerning repurchase agreements [Table Text Block]

The Company pledges investment securities to secure those borrowings. Information concerning repurchase agreements is summarized as follows for the periods presented:

	March 31,		December 31,		March 31,
(dollars in thousands)	2016		2015		2015
Average daily balance during the year-to-date	$	15,000	$	22,890	$	31,000
Average interest rate during the year-to-date		5.95%		5.92%		5.90%
Maximum month-end balance during the year-to-date	$	15,000	$	31,000	$	31,000%
Weighted average interest rate during the year-to-date		5.95%		5.92%		5.90%

Schedule of remaining contractual maturity [Table Text Block]

The table below shows the remaining contractual maturity of agreement by fair value of collateral pledged:

	March 31, 2016
	Remaining Contractual Maturity of the Agreements
	Overnight and		Up to 30				Greater Than
(dollars in thousands)	Continuous		Days		30-90 Days		90 Days		Total
Repurchase agreements and
Repurchase-to-maturity transactions
U.S. Treasury and agency securities	$	-	$	-	$	-	$	5,069	$	5,069
Residential mortgage pass-through securities		-		-		-		14,849		14,849
Total Borrowings	$	-	$	-	$	-	$	19,918	$	19,918
Amounts related to agreements not included in offsetting disclosure in Note 14									$	4,918

	December 31, 2015
	Remaining Contractual Maturity of the Agreements
	Overnight and		Up to 30				Greater Than
(dollars in thousands)	Continuous		Days		30-90 Days		90 Days		Total
Repurchase agreements and
Repurchase-to-maturity transactions
U.S. Treasury and agency securities	$	-	$	-	$	-	$	6,313	$	6,313
Residential mortgage pass-through securities		-		-		-		12,589		12,589
Total Borrowings	$	-	$	-	$	-	$	18,902	$	18,902
Amounts related to agreements not included in offsetting disclosure in Note 14									$	3,902

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Subordinated Debentures (Tables)

3 Months Ended

Mar. 31, 2016

Subordinated Borrowings [Abstract]

Schedule of Subordinated Debentures [Table Text Block]

The following table summarizes the mandatory redeemable trust preferred securities of the Company’s Statutory Trust II at March 31, 2016 and December 31, 2015.

	Securities					Redeemable by
Issuance Date	Issued		Liquidation Value	Coupon Rate	Maturity	Issuer Beginning
12/19/2003	$	5,000,000	$1,000 per Capital	Floating 3-month	01/23/2034	01/23/2009
			Security	LIBOR + 285 Basis
				Points

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Offsetting Assets and Liabilities (Tables)

3 Months Ended

Mar. 31, 2016

Offsetting Assets And Liabilities Tables

Schedule of financial instruments that are eligible for offset [Table Text Block]

The following table presents information about financial instruments that are eligible for offset as of March 31, 2016 and December 31, 2015:

							Gross Amounts Not Offset
			Gross Amounts		Net Amounts				Cash or
			Offset in the		of Assets Presented in the		Financial		Financial
	Gross Amounts		Statement of		Statement of Financial		Instruments		Instrument		Net
	Recognized		Financial Position		Position		Recognized		Collateral		Amount
	(in thousands)
March 31, 2016
Assets:
Interest rate swaps	$	—	$	—	$	—	$	—	$	—	$	—
Liabilities:
Interest rate swaps	$	1,568	$	—	$	1,568	$	—	$	1,568	$	—
Repurchase
agreements		15,000		—		15,000		—		15,000		—
Total	$	16,568	$	—	$	16,568	$	—	$	16,568	$	—
December 31, 2015
Assets:
Interest rate swaps	$	48	$	—	$	—	$	—	$	—	$	—
Liabilities:
Interest rate swaps	$	131	$	—	$	131	$	—	$	131	$	—
Repurchase
agreements		15,000		—		15,000		—		15,000		—
Total	$	15,131	$	—	$	15,131	$	—	$	15,131	$	—

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Presentation of Debt Issuance Costs (Tables)

3 Months Ended

Mar. 31, 2016

Presentation Of Debt Issuance Costs

Presentation of Debt Issuance Costs [Table Text Block]

The following table summarizes the impact of retrospective application to the consolidated statement of condition for the year ended December 31, 2015:

	December 31,
(dollars in thousands)	2015
Other assets
As previously reported	$	24,908
As reported under the new guidance		24,096
Total assets
As previously reported	$	4,016,721
As reported under the new guidance		4,015,909
Subordinated debentures
As previously reported	$	55,155
As reported under the new guidance		54,343
Total liabilities
As previously reported	$	3,539,377
As reported under the new guidance		3,538,565

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Earnings per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Earnings Per Share [Abstract]
Net income	$ 10,391	$ 10,379
Preferred stock dividends	(22)	(28)
Net income available to common stockholders	$ 10,369	$ 10,351
Basic weighted average common shares outstanding	29,996	29,757
Effect of dilutive options	262	392
Diluted	30,257,676	30,149,469
Earnings per common share:
Basic	$ 0.35	$ 0.35
Diluted	$ 0.34	$ 0.34

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Investment Securities (Details) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2016 USD ($)	Dec. 31, 2015 USD ($) Integer
Investments, Debt and Equity Securities [Abstract]
Number of Investment Securities Sold	46	74
Available-for-sale Securities Pledged as Collateral	$ 155,300	$ 142,500
Description of Holding Securities	there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of stockholders’ equity.

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Investment Securities (Details) - Unrealized gains on investment securities - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Investment securities available-for-sale
Investment Securities Available-for-Sale, Amortized Cost	$ 189,285	$ 194,619
Investment Securities Available-for-Sale, Gross Unrealized Gains	3,346	2,271
Investment Securities Available-for-Sale, Gross Unrealized Losses	(1,300)	(1,120)
Investment Securities Available-for-Sale, Fair Value	191,331	195,770
Investment securities held-to-maturity
Investment Securities Held-to-Maturity, Amortized Cost	219,373	224,056
Investment Securities Held-to-Maturity, Gross Unrealized Gains	10,252	6,793
Investment Securities Held-to-Maturity, Gross Unrealized Losses	(155)	(291)
Investment Securities Held-to-Maturity, Fair Value	229,470	230,558
Total, Amortized Cost	408,658	418,675
Total, Gross Unrealized Gains	13,598	9,064
Total, Gross Unrealized Losses	(1,455)	(1,411)
Total, Fair Value	420,801	426,328
US Treasury Securities [Member]
Investment securities held-to-maturity
Investment Securities Held-to-Maturity, Amortized Cost	28,523	28,471
Investment Securities Held-to-Maturity, Gross Unrealized Gains	$ 1,890	$ 755
Investment Securities Held-to-Maturity, Gross Unrealized Losses
Investment Securities Held-to-Maturity, Fair Value	$ 30,413	$ 29,226
Federal Agency Obligations [Member]
Investment securities available-for-sale
Investment Securities Available-for-Sale, Amortized Cost	31,370	29,062
Investment Securities Available-for-Sale, Gross Unrealized Gains	486	142
Investment Securities Available-for-Sale, Gross Unrealized Losses	(29)	(58)
Investment Securities Available-for-Sale, Fair Value	31,827	29,146
Investment securities held-to-maturity
Investment Securities Held-to-Maturity, Amortized Cost	31,567	33,616
Investment Securities Held-to-Maturity, Gross Unrealized Gains	700	280
Investment Securities Held-to-Maturity, Gross Unrealized Losses	(8)	(119)
Investment Securities Held-to-Maturity, Fair Value	33,259	33,777
Residential Mortgage Backed Securities [Member]
Investment securities available-for-sale
Investment Securities Available-for-Sale, Amortized Cost	47,404	44,155
Investment Securities Available-for-Sale, Gross Unrealized Gains	1,162	803
Investment Securities Available-for-Sale, Gross Unrealized Losses	(21)	(48)
Investment Securities Available-for-Sale, Fair Value	48,545	44,910
Investment securities held-to-maturity
Investment Securities Held-to-Maturity, Amortized Cost	3,489	3,805
Investment Securities Held-to-Maturity, Gross Unrealized Gains	28	11
Investment Securities Held-to-Maturity, Gross Unrealized Losses	(15)	(6)
Investment Securities Held-to-Maturity, Fair Value	3,502	3,810
Commercial Mortgage Backed Securities [Member]
Investment securities available-for-sale
Investment Securities Available-for-Sale, Amortized Cost	2,965	$ 2,981
Investment Securities Available-for-Sale, Gross Unrealized Gains	$ 88
Investment Securities Available-for-Sale, Gross Unrealized Losses		$ (9)
Investment Securities Available-for-Sale, Fair Value	$ 3,053	2,972
Investment securities held-to-maturity
Investment Securities Held-to-Maturity, Amortized Cost	1,317	4,110
Investment Securities Held-to-Maturity, Gross Unrealized Gains	$ 30	27
Investment Securities Held-to-Maturity, Gross Unrealized Losses		(2)
Investment Securities Held-to-Maturity, Fair Value	$ 1,347	4,135
US States and Political Subdivisions Debt Securities [Member]
Investment securities available-for-sale
Investment Securities Available-for-Sale, Amortized Cost	9,642	8,188
Investment Securities Available-for-Sale, Gross Unrealized Gains	$ 164	$ 169
Investment Securities Available-for-Sale, Gross Unrealized Losses
Investment Securities Available-for-Sale, Fair Value	$ 9,806	$ 8,357
Investment securities held-to-maturity
Investment Securities Held-to-Maturity, Amortized Cost	117,416	118,015
Investment Securities Held-to-Maturity, Gross Unrealized Gains	$ 6,208	5,001
Investment Securities Held-to-Maturity, Gross Unrealized Losses		(3)
Investment Securities Held-to-Maturity, Fair Value	$ 123,624	123,013
Corporate Bonds And Notes [Member]
Investment securities available-for-sale
Investment Securities Available-for-Sale, Amortized Cost	40,771	53,566
Investment Securities Available-for-Sale, Gross Unrealized Gains	873	702
Investment Securities Available-for-Sale, Gross Unrealized Losses	(256)	(292)
Investment Securities Available-for-Sale, Fair Value	41,388	53,976
Investment securities held-to-maturity
Investment Securities Held-to-Maturity, Amortized Cost	37,061	36,039
Investment Securities Held-to-Maturity, Gross Unrealized Gains	1,396	719
Investment Securities Held-to-Maturity, Gross Unrealized Losses	(132)	(161)
Investment Securities Held-to-Maturity, Fair Value	38,325	36,597
Trust Preferred Securities [Member]
Investment securities available-for-sale
Investment Securities Available-for-Sale, Amortized Cost	16,089	16,088
Investment Securities Available-for-Sale, Gross Unrealized Gains	440	398
Investment Securities Available-for-Sale, Gross Unrealized Losses	(350)	(231)
Investment Securities Available-for-Sale, Fair Value	16,179	16,255
Asset-backed Securities [Member]
Investment securities available-for-sale
Investment Securities Available-for-Sale, Amortized Cost	$ 18,682	20,005
Investment Securities Available-for-Sale, Gross Unrealized Gains		18
Investment Securities Available-for-Sale, Gross Unrealized Losses	$ (528)	(298)
Investment Securities Available-for-Sale, Fair Value	18,154	19,725
Certificates of Deposit [Member]
Investment securities available-for-sale
Investment Securities Available-for-Sale, Amortized Cost	1,496	1,895
Investment Securities Available-for-Sale, Gross Unrealized Gains	$ 20	18
Investment Securities Available-for-Sale, Gross Unrealized Losses		(8)
Investment Securities Available-for-Sale, Fair Value	$ 1,516	1,905
Equity Securities [Member]
Investment securities available-for-sale
Investment Securities Available-for-Sale, Amortized Cost	376	376
Investment Securities Available-for-Sale, Gross Unrealized Gains	29	21
Investment Securities Available-for-Sale, Gross Unrealized Losses	(28)	(23)
Investment Securities Available-for-Sale, Fair Value	377	374
Other Securities [Member]
Investment securities available-for-sale
Investment Securities Available-for-Sale, Amortized Cost	20,490	$ 18,303
Investment Securities Available-for-Sale, Gross Unrealized Gains	84
Investment Securities Available-for-Sale, Gross Unrealized Losses	(88)	$ (153)
Investment Securities Available-for-Sale, Fair Value	$ 20,486	$ 18,150

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Investment Securities (Details) - Investments classified by maturity date - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Investment securities available-for-sale:
Due in one year or less	$ 10,948
Due in one year or less	10,967
Due after one year through five years	15,800
Due after one year through five years	16,287
Due after five years through ten years	37,582
Due after five years through ten years	37,795
Due after ten years	53,720
Due after ten years	58,821
Total	189,285	$ 194,619
Total	191,331
Investment securities held-to-maturity:
Due in one year or less	1,000
Due in one year or less	1,000
Due after one year through five years	14,561
Due after one year through five years	14,907
Due after five years through ten years	85,428
Due after five years through ten years	90,182
Due after ten years	113,578
Due after ten years	118,532
Total	219,373	224,056
Investment Securities Held-to-Maturity, Fair Value	229,470	230,558
Total investment securities	408,658
Total investment securities	420,801
Residential Mortgage Backed Securities [Member]
Investment securities available-for-sale:
Investment Securities Available-for-Sale: Amortized Cost	47,404
Investment Securities Available-for-Sale: Fair Value	48,545
Total	47,404	44,155
Investment securities held-to-maturity:
Investment Securities Held-to-Maturity: Amoritzed Cost	3,489
Investment Securities Held-to-Maturity: Fair Value	3,502
Investment Securities Held-to-Maturity, Fair Value	3,502	3,810
Commercial Mortgage Backed Securities [Member]
Investment securities available-for-sale:
Investment Securities Available-for-Sale: Amortized Cost	2,965
Investment Securities Available-for-Sale: Fair Value	3,053
Total	2,965	2,981
Investment securities held-to-maturity:
Investment Securities Held-to-Maturity: Amoritzed Cost	1,317
Investment Securities Held-to-Maturity: Fair Value	1,347
Investment Securities Held-to-Maturity, Fair Value	1,347	4,135
Equity Securities [Member]
Investment securities available-for-sale:
Investment Securities Available-for-Sale: Amortized Cost	376
Investment Securities Available-for-Sale: Fair Value	377
Total	376	376
Other Securities [Member]
Investment securities available-for-sale:
Investment Securities Available-for-Sale: Amortized Cost	20,490
Investment Securities Available-for-Sale: Fair Value	20,486
Total	$ 20,490	$ 18,303

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Investment Securities (Details) - Schedule of realized gains and losses - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Schedule of realized gains and losses [Abstract]
Proceeds		$ 9,537
Gross gains on sales of investment securities		$ 506
Gross losses on sales of investment securities
Net gains on sales of investment securities		$ 506
Less: tax provision on net gains		207
Net gains on sales of investment securities		$ 299

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Investment Securities (Details) - Schedule of unrealized losses not recognized in income - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Investment securities available-for-sale:
Investment Securities Available-for-Sale: Total, Fair Value	$ 54,706	$ 62,566
Investment Securities Available-for-Sale: Total, Unrealized Losses	(1,300)	(1,120)
Investment Securities Available-for-Sale: Less than 12 Months, Fair Value	40,067	48,178
Investment Securities Available-for-Sale: Less than 12 Months, Unrealized Losses	(577)	(468)
Investment Securities Available-for-Sale: 12 Months or Longer, Fair Value	14,639	14,388
Investment Securities Available-for-Sale: 12 Months or Longer, Unrealized Losses	(723)	(652)
Investment securities held-to-maturity:
Investment Securities Held-to-Maturity: Total, Fair Value	8,713	22,882
Investment Securities Held-to-Maturity: Total, Unrealized Losses	(154)	(291)
Investment Securities Held-to-Maturity: Less than 12 Months, Fair Value	6,852	22,111
Investment Securities Held-to-Maturity: Less than 12 Months, Unrealized Losses	(152)	(281)
Investment Securities Held-to-Maturity: 12 Months or Longer, Fair Value	1,861	771
Investment Securities Held-to-Maturity: 12 Months or Longer, Unrealized Losses	(2)	(10)
Fair Value, Total	63,419	85,448
Unrealized Losses, Total	(1,454)	(1,411)
Fair Value, Less than 12 Months	46,919	70,289
Unrealized Losses, Less than 12 Months	(729)	(749)
Fair Value, 12 Months or Longer	16,500	15,159
Unrealized Losses, 12 Months or Longer	(725)	(662)
Federal Agency Obligations [Member]
Investment securities available-for-sale:
Investment Securities Available-for-Sale: Total, Fair Value	7,070	12,260
Investment Securities Available-for-Sale: Total, Unrealized Losses	(29)	(58)
Investment Securities Available-for-Sale: Less than 12 Months, Fair Value	6,836	12,013
Investment Securities Available-for-Sale: Less than 12 Months, Unrealized Losses	(28)	(54)
Investment Securities Available-for-Sale: 12 Months or Longer, Fair Value	234	247
Investment Securities Available-for-Sale: 12 Months or Longer, Unrealized Losses	(1)	(4)
Investment securities held-to-maturity:
Investment Securities Held-to-Maturity: Total, Fair Value	4,161	12,554
Investment Securities Held-to-Maturity: Total, Unrealized Losses	(8)	(119)
Investment Securities Held-to-Maturity: Less than 12 Months, Fair Value	2,300	11,783
Investment Securities Held-to-Maturity: Less than 12 Months, Unrealized Losses	(6)	(109)
Investment Securities Held-to-Maturity: 12 Months or Longer, Fair Value	1,861	771
Investment Securities Held-to-Maturity: 12 Months or Longer, Unrealized Losses	(2)	(10)
Residential Mortgage Backed Securities [Member]
Investment securities available-for-sale:
Investment Securities Available-for-Sale: Total, Fair Value	7,173	9,027
Investment Securities Available-for-Sale: Total, Unrealized Losses	(21)	(48)
Investment Securities Available-for-Sale: Less than 12 Months, Fair Value	6,679	9,027
Investment Securities Available-for-Sale: Less than 12 Months, Unrealized Losses	(14)	$ (48)
Investment Securities Available-for-Sale: 12 Months or Longer, Fair Value	494
Investment Securities Available-for-Sale: 12 Months or Longer, Unrealized Losses	(7)
Investment securities held-to-maturity:
Investment Securities Held-to-Maturity: Total, Fair Value	1,920	$ 2,480
Investment Securities Held-to-Maturity: Total, Unrealized Losses	(15)	(6)
Investment Securities Held-to-Maturity: Less than 12 Months, Fair Value	1,920	2,480
Investment Securities Held-to-Maturity: Less than 12 Months, Unrealized Losses	$ (15)	$ (6)
Investment Securities Held-to-Maturity: 12 Months or Longer, Fair Value
Investment Securities Held-to-Maturity: 12 Months or Longer, Unrealized Losses
Corporate Bonds And Notes [Member]
Investment securities available-for-sale:
Investment Securities Available-for-Sale: Total, Fair Value	$ 15,553	$ 16,533
Investment Securities Available-for-Sale: Total, Unrealized Losses	(256)	(292)
Investment Securities Available-for-Sale: Less than 12 Months, Fair Value	11,727	12,702
Investment Securities Available-for-Sale: Less than 12 Months, Unrealized Losses	(118)	(161)
Investment Securities Available-for-Sale: 12 Months or Longer, Fair Value	3,826	3,831
Investment Securities Available-for-Sale: 12 Months or Longer, Unrealized Losses	(138)	(131)
Investment securities held-to-maturity:
Investment Securities Held-to-Maturity: Total, Fair Value	2,632	5,536
Investment Securities Held-to-Maturity: Total, Unrealized Losses	(131)	(161)
Investment Securities Held-to-Maturity: Less than 12 Months, Fair Value	2,632	5,536
Investment Securities Held-to-Maturity: Less than 12 Months, Unrealized Losses	$ (131)	$ (161)
Investment Securities Held-to-Maturity: 12 Months or Longer, Fair Value
Investment Securities Held-to-Maturity: 12 Months or Longer, Unrealized Losses
Trust Preferred Securities [Member]
Investment securities available-for-sale:
Investment Securities Available-for-Sale: Total, Fair Value	$ 1,227	$ 1,345
Investment Securities Available-for-Sale: Total, Unrealized Losses	$ (350)	$ (231)
Investment Securities Available-for-Sale: Less than 12 Months, Fair Value
Investment Securities Available-for-Sale: Less than 12 Months, Unrealized Losses
Investment Securities Available-for-Sale: 12 Months or Longer, Fair Value	$ 1,227	$ 1,345
Investment Securities Available-for-Sale: 12 Months or Longer, Unrealized Losses	(350)	(231)
Asset-backed Securities [Member]
Investment securities available-for-sale:
Investment Securities Available-for-Sale: Total, Fair Value	18,154	14,745
Investment Securities Available-for-Sale: Total, Unrealized Losses	(528)	(298)
Investment Securities Available-for-Sale: Less than 12 Months, Fair Value	14,825	11,250
Investment Securities Available-for-Sale: Less than 12 Months, Unrealized Losses	(417)	(188)
Investment Securities Available-for-Sale: 12 Months or Longer, Fair Value	3,329	3,495
Investment Securities Available-for-Sale: 12 Months or Longer, Unrealized Losses	(111)	(110)
Equity Securities [Member]
Investment securities available-for-sale:
Investment Securities Available-for-Sale: Total, Fair Value	117	123
Investment Securities Available-for-Sale: Total, Unrealized Losses	$ (28)	$ (23)
Investment Securities Available-for-Sale: Less than 12 Months, Fair Value
Investment Securities Available-for-Sale: Less than 12 Months, Unrealized Losses
Investment Securities Available-for-Sale: 12 Months or Longer, Fair Value	$ 117	$ 123
Investment Securities Available-for-Sale: 12 Months or Longer, Unrealized Losses	(28)	(23)
Other Securities [Member]
Investment securities available-for-sale:
Investment Securities Available-for-Sale: Total, Fair Value	5,412	5,347
Investment Securities Available-for-Sale: Total, Unrealized Losses	$ (88)	$ (153)
Investment Securities Available-for-Sale: Less than 12 Months, Fair Value
Investment Securities Available-for-Sale: Less than 12 Months, Unrealized Losses
Investment Securities Available-for-Sale: 12 Months or Longer, Fair Value	$ 5,412	$ 5,347
Investment Securities Available-for-Sale: 12 Months or Longer, Unrealized Losses	$ (88)	(153)
Commercial Mortgage Backed Securities [Member]
Investment securities available-for-sale:
Investment Securities Available-for-Sale: Total, Fair Value		2,971
Investment Securities Available-for-Sale: Total, Unrealized Losses		(9)
Investment Securities Available-for-Sale: Less than 12 Months, Fair Value		2,971
Investment Securities Available-for-Sale: Less than 12 Months, Unrealized Losses		$ (9)
Investment Securities Available-for-Sale: 12 Months or Longer, Fair Value
Investment Securities Available-for-Sale: 12 Months or Longer, Unrealized Losses
Investment securities held-to-maturity:
Investment Securities Held-to-Maturity: Total, Fair Value		$ 1,331
Investment Securities Held-to-Maturity: Total, Unrealized Losses		(2)
Investment Securities Held-to-Maturity: Less than 12 Months, Fair Value		1,331
Investment Securities Held-to-Maturity: Less than 12 Months, Unrealized Losses		$ (2)
Investment Securities Held-to-Maturity: 12 Months or Longer, Fair Value
Investment Securities Held-to-Maturity: 12 Months or Longer, Unrealized Losses
Obligation Of Us States And Political Subdivisions [Member]
Investment securities held-to-maturity:
Investment Securities Held-to-Maturity: Total, Fair Value		$ 981
Investment Securities Held-to-Maturity: Total, Unrealized Losses		(3)
Investment Securities Held-to-Maturity: Less than 12 Months, Fair Value		981
Investment Securities Held-to-Maturity: Less than 12 Months, Unrealized Losses		$ (3)
Investment Securities Held-to-Maturity: 12 Months or Longer, Fair Value
Investment Securities Held-to-Maturity: 12 Months or Longer, Unrealized Losses
Certificates of Deposit [Member]
Investment securities available-for-sale:
Investment Securities Available-for-Sale: Total, Fair Value		$ 215
Investment Securities Available-for-Sale: Total, Unrealized Losses		(8)
Investment Securities Available-for-Sale: Less than 12 Months, Fair Value		215
Investment Securities Available-for-Sale: Less than 12 Months, Unrealized Losses		$ (8)
Investment Securities Available-for-Sale: 12 Months or Longer, Fair Value
Investment Securities Available-for-Sale: 12 Months or Longer, Unrealized Losses

XML

Derivatives (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Aug. 24, 2015	Dec. 30, 2014	Oct. 15, 2014
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Notional Amount of Interest Rate Cash Flow Hedge Derivatives			$ 25,000	$ 25,000	$ 25,000
Interest expense on derivatives	$ 191	$ 166

XML

Derivatives (Details) - Summary of interest rate swap designated as a cash flow hedges - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Summary of interest rate swap designated as a cash flow hedges [Abstract]
Notional amount	$ 75,000	$ 50,000	$ 75,000
Weighted average pay rates	1.57%	1.58%	1.56%
Weighted average receive rates	0.56%	0.24%	0.44%
Weighted average maturity	3 years 7 months 6 days	4 years 2 months 12 days	3 years 9 months 18 days
Fair value	$ (1,568)	$ (486)	$ (131)

XML

Derivatives (Details) - Summary of net gains (losses) recorded in accumulated other comprehensive income - Interest Rate Contract [Member] - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Derivatives (Details) - Summary of net gains (losses) recorded in accumulated other comprehensive income and statements of income relating to cash flow derivative instruments [Line Items]
Amount of loss recognized in OCI (Effective Portion)	$ (1,437)	$ (534)
Amount of loss reclassified from OCI to interest income
Amount of loss recognized in other Non-interest income (Ineffective Portion)

XML

Derivatives (Details) - Summary of cash flow hedges included in the consolidated balance sheets - Interest Rate Swap [Member] - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Included in other asset/(liabilities):
Interest rate swap related to FHLB Advances, Notional Amount	$ 75,000	$ 75,000
Interest rate swap related to FHLB Advances, Fair Value	$ (1,568)	$ (131)

XML

Loans and the Allowance for Loan and Lease Losses (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
LOANS AND THE ALLOWANCE FOR LOAN LOSSES (Details) [Line Items]
Non Accrual Contractual Due	90 days
Loans Pledged as Collateral	$ 1,600,000	$ 1,600,000
Loans performing under the restructured terms	95,100	85,900
Loans and Leases Receivable, Impaired, Interest Lost on Nonaccrual Loans	1,400	700
Troubled debt restructurings	96,500	86,600
Financing Receivable, Collectively Evaluated for Impairment	3,139,446	2,985,509
Allowance for Loan and Lease Losses Period Increase Decrease Due to Trouble Debt Restructuring	$ 1,500
Debt Instrument, Interest Rate, Stated Percentage Rate Range	5.75%
Debt Instrument, Interest Rate, Increase (Decrease)	3.00%
Specific allocations associated with taxi medallion, fair value	$ 6,000	4,500
Modified specific allocations associated with taxi medallion, fair value	8,000
Valuation per Medallion Amount	775
Increase in allowance for loan and lease losses	$ 45
Minimum [Member]
LOANS AND THE ALLOWANCE FOR LOAN LOSSES (Details) [Line Items]
Debt Instrument, Interest Rate, Stated Percentage Rate Range	1.30%
Maximum [Member]
LOANS AND THE ALLOWANCE FOR LOAN LOSSES (Details) [Line Items]
Debt Instrument, Interest Rate, Stated Percentage Rate Range	1.60%
Acquired Loans [Member]
LOANS AND THE ALLOWANCE FOR LOAN LOSSES (Details) [Line Items]
Financing Receivable, Collectively Evaluated for Impairment	$ 824,000	867,000
Real Estate Loan [Member]
LOANS AND THE ALLOWANCE FOR LOAN LOSSES (Details) [Line Items]
Financing Receivable, Collectively Evaluated for Impairment	$ 661,000	$ 672,000

XML

Loans and the Allowance for Loan and Lease Losses (Details) - Composition of loan portfolio - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	$ 3,265,773	$ 3,101,794
Net deferred loan fees	(1,960)	(2,787)
Total loans receivable	3,263,813	3,099,007
Commercial Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	601,708	570,116
Commercial Real Estate Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	2,028,301	1,966,696
Construction Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	402,594	328,838
Residential Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	231,319	233,690
Consumer Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross loans	$ 1,851	$ 2,454

XML

Loans and the Allowance for Loan and Lease Losses (Details) - Purchase credit impaired loans - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Loans and the Allowance for Loan and Lease Losses (Details) - Purchase credit impaired loans [Line Items]
Total carrying amount	$ 9,138	$ 9,181
Commercial Portfolio Segment [Member]
Loans and the Allowance for Loan and Lease Losses (Details) - Purchase credit impaired loans [Line Items]
Total carrying amount	7,059	7,078
Commercial Real Estate Portfolio Segment [Member]
Loans and the Allowance for Loan and Lease Losses (Details) - Purchase credit impaired loans [Line Items]
Total carrying amount	1,745	1,775
Residential Portfolio Segment [Member]
Loans and the Allowance for Loan and Lease Losses (Details) - Purchase credit impaired loans [Line Items]
Total carrying amount	$ 334	$ 328

XML

Loans and the Allowance for Loan and Lease Losses (Details) - Schedule of accretable yield, or income expected to be collected - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Schedule of accretable yield, or income expected to be collected [Abstract]
Beginning balance	$ 3,599	$ 4,805
Accretion of income	(183)	(54)
Ending balance	$ 3,416	$ 4,751

XML

Loans and the Allowance for Loan and Lease Losses (Details) - Loans receivable on nonaccrual status - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Loans and the Allowance for Loan and Lease Losses (Details) - Loans receivable on nonaccrual status [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	$ 21,450	$ 20,736
Commercial Portfolio Segment [Member]
Loans and the Allowance for Loan and Lease Losses (Details) - Loans receivable on nonaccrual status [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	7,239	6,586
Commercial Real Estate Portfolio Segment [Member]
Loans and the Allowance for Loan and Lease Losses (Details) - Loans receivable on nonaccrual status [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	8,841	9,112
Construction Loans [Member]
Loans and the Allowance for Loan and Lease Losses (Details) - Loans receivable on nonaccrual status [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	1,636	1,479
Residential Portfolio Segment [Member]
Loans and the Allowance for Loan and Lease Losses (Details) - Loans receivable on nonaccrual status [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	$ 3,734	$ 3,559

XML

Loans and the Allowance for Loan and Lease Losses (Details) - Credit quality indicators - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	$ 3,265,773	$ 3,101,794
Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	3,102,404	2,939,890
Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	25,623	31,412
Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	$ 137,746	130,253
Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount		239
Commercial Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	$ 601,708	570,116
Commercial Portfolio Segment [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	494,413	462,358
Commercial Portfolio Segment [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	6,976	11,760
Commercial Portfolio Segment [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	$ 100,319	$ 95,998
Commercial Portfolio Segment [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount
Commercial Real Estate Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	$ 2,028,301	$ 1,966,696
Commercial Real Estate Portfolio Segment [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	1,979,211	1,919,041
Commercial Real Estate Portfolio Segment [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	17,820	18,990
Commercial Real Estate Portfolio Segment [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	$ 31,270	28,426
Commercial Real Estate Portfolio Segment [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount		239
Construction Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	$ 402,594	328,838
Construction Loans [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	400,131	326,697
Construction Loans [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	827	662
Construction Loans [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	$ 1,636	1,479
Construction Loans [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount
Residential Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	$ 231,319	233,690
Residential Portfolio Segment [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	226,879	229,426
Residential Portfolio Segment [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	4,440	4,264
Consumer Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	1,851	2,454
Consumer Portfolio Segment [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	1,770	2,368
Consumer Portfolio Segment [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	$ 81	$ 86

XML

Loans and the Allowance for Loan and Lease Losses (Details) - Schedule of analysis of impaired loans, by class - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Financing Receivable, Impaired [Line Items]
No related allowance recorded, Recorded Investment	$ 25,261		$ 22,317
No related allowance recorded, Unpaid Principal Balance	25,978		23,713
No Related Allowance Average Recorded Investment	24,363	$ 10,061
No Related Allowance Interest Income Recognized	71	22
With an allowance recorded, Recorded Investment	5,100		6,000
With An Allowance Recorded Average Recorded Investment	83,759	$ 6,722
With An Allowance Recorded Interest Income Recognized	737
Total, Recorded Investment	117,189		107,104
Total, Unpaid Principal Balance	117,829		108,162
Total, Related Allowance	7,677		6,725
Total Impaired Average Recorded Investment	108,122	$ 16,783
Total Impaired Interest Income Recognized	808	22
Commercial Portfolio Segment [Member]
Financing Receivable, Impaired [Line Items]
No related allowance recorded, Recorded Investment	3,320		610
No related allowance recorded, Unpaid Principal Balance	3,625		645
No Related Allowance Average Recorded Investment	2,591	$ 290
No Related Allowance Interest Income Recognized	24
With an allowance recorded, Recorded Investment	91,928		84,787
With an allowance recorded, Unpaid Principal Balance	91,851		84,449
With an allowance recorded, Related Allowance	7,677		6,725
With An Allowance Recorded Average Recorded Investment	83,759	$ 387
With An Allowance Recorded Interest Income Recognized	737
Total, Recorded Investment	95,248		85,397
Total, Unpaid Principal Balance	95,476		85,094
Total, Related Allowance	7,677		6,725
Total Impaired Average Recorded Investment	86,350	$ 677
Total Impaired Interest Income Recognized	761
Commercial Real Estate Portfolio Segment [Member]
Financing Receivable, Impaired [Line Items]
No related allowance recorded, Recorded Investment	15,271		15,517
No related allowance recorded, Unpaid Principal Balance	15,202		16,512
No Related Allowance Average Recorded Investment	15,274	$ 6,052
No Related Allowance Interest Income Recognized	$ 25	19
With An Allowance Recorded Average Recorded Investment		$ 6,335
With An Allowance Recorded Interest Income Recognized
Total, Recorded Investment	$ 15,271		15,517
Total, Unpaid Principal Balance	$ 15,202		$ 16,512
Total, Related Allowance
Total Impaired Average Recorded Investment	$ 15,274	$ 12,387
Total Impaired Interest Income Recognized	25	19
Construction Loans [Member]
Financing Receivable, Impaired [Line Items]
No related allowance recorded, Recorded Investment	2,466		$ 2,149
No related allowance recorded, Unpaid Principal Balance	2,538		2,141
No Related Allowance Average Recorded Investment	2,307
No Related Allowance Interest Income Recognized	16
Total, Recorded Investment	2,466		2,149
Total, Unpaid Principal Balance	$ 2,538		$ 2,141
Total, Related Allowance
Total Impaired Average Recorded Investment	$ 2,307
Total Impaired Interest Income Recognized	16
Residential Portfolio Segment [Member]
Financing Receivable, Impaired [Line Items]
No related allowance recorded, Recorded Investment	4,123		$ 3,954
No related allowance recorded, Unpaid Principal Balance	4,532		4,329
No Related Allowance Average Recorded Investment	4,107	3,613
No Related Allowance Interest Income Recognized	5	2
Total, Recorded Investment	4,123		3,954
Total, Unpaid Principal Balance	$ 4,532		$ 4,329
Total, Related Allowance
Total Impaired Average Recorded Investment	$ 4,107	3,613
Total Impaired Interest Income Recognized	5	2
Consumer Portfolio Segment [Member]
Financing Receivable, Impaired [Line Items]
No related allowance recorded, Recorded Investment	81		$ 87
No related allowance recorded, Unpaid Principal Balance	81		86
No Related Allowance Average Recorded Investment	84	106
No Related Allowance Interest Income Recognized	1	1
Total, Recorded Investment	81		87
Total, Unpaid Principal Balance	$ 81		$ 86
Total, Related Allowance
Total Impaired Average Recorded Investment	$ 84	106
Total Impaired Interest Income Recognized	$ 1	$ 1

XML

Loans and the Allowance for Loan and Lease Losses (Details) - Aging analysis - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 40,002	$ 33,418
Current	3,225,771	3,068,376
Loans	3,265,773	3,101,794
Loans Receivable 90 Days or Greater Past Due and Accruing	6,632
30 - 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	14,440	8,889
60 - 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	380	4,502
90 Days or Greater Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	25,181	20,027
Commercial Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	17,948	17,257
Current	583,760	552,859
Loans	601,708	570,116
Loans Receivable 90 Days or Greater Past Due and Accruing	5,250
Commercial Portfolio Segment [Member] | 30 - 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 5,539	6,887
Commercial Portfolio Segment [Member] | 60 - 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due		3,505
Commercial Portfolio Segment [Member] | 90 Days or Greater Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 12,409	6,865
Commercial Real Estate Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	15,435	12,547
Current	2,012,866	1,954,149
Loans	2,028,301	1,966,696
Loans Receivable 90 Days or Greater Past Due and Accruing	1,382
Commercial Real Estate Portfolio Segment [Member] | 30 - 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 5,408	1,998
Commercial Real Estate Portfolio Segment [Member] | 60 - 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due		988
Commercial Real Estate Portfolio Segment [Member] | 90 Days or Greater Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 10,027	9,561
Construction Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,750	1,479
Current	400,844	327,359
Loans	402,594	328,838
Construction Loans [Member] | 30 - 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,750
Construction Loans [Member] | 90 Days or Greater Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due		1,479
Residential Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	4,867	2,122
Current	226,452	231,568
Loans	231,319	233,690
Residential Portfolio Segment [Member] | 30 - 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	1,741
Residential Portfolio Segment [Member] | 60 - 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	380
Residential Portfolio Segment [Member] | 90 Days or Greater Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	2,746	2,122
Consumer Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	2	13
Current	1,849	2,441
Loans	1,851	2,454
Consumer Portfolio Segment [Member] | 30 - 59 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 2	4
Consumer Portfolio Segment [Member] | 60 - 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due		$ 9

XML

Loans and the Allowance for Loan and Lease Losses (Details) - Allowance for loan and lease losses - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015	Mar. 31, 2015	Dec. 31, 2014
Allowance for loan and lease losses
Allowance for loan and lease losses, individually evaluated for impairment	$ 7,677	$ 6,725
Allowance for loan and lease losses, collectively evaluated for impairment	21,397	19,847
Allowance for loan and lease losses, total	29,074	26,572	$ 15,933	$ 14,160
Gross loans
Loans Receivable, individually evaluated for impairment	117,189	107,104
Loans Receivable, collectively evaluated for impairment	3,139,446	2,985,509
Loans Receivables, acquired with deteriorated credit quality	9,138	9,181
Loans Receivable, Total	3,265,773	3,101,794
Commercial Portfolio Segment [Member]
Allowance for loan and lease losses
Allowance for loan and lease losses, individually evaluated for impairment	7,677	6,725
Allowance for loan and lease losses, collectively evaluated for impairment	5,420	4,224
Allowance for loan and lease losses, total	13,097	10,949	3,927	3,083
Gross loans
Loans Receivable, individually evaluated for impairment	95,248	85,397
Loans Receivable, collectively evaluated for impairment	499,401	477,641
Loans Receivables, acquired with deteriorated credit quality	7,059	7,078
Loans Receivable, Total	$ 601,708	$ 570,116
Commercial Real Estate Portfolio Segment [Member]
Allowance for loan and lease losses
Allowance for loan and lease losses, individually evaluated for impairment
Allowance for loan and lease losses, collectively evaluated for impairment	$ 10,941	$ 10,926
Allowance for loan and lease losses, total	10,941	10,926	8,846	7,799
Gross loans
Loans Receivable, individually evaluated for impairment	15,271	15,517
Loans Receivable, collectively evaluated for impairment	2,011,285	1,949,404
Loans Receivables, acquired with deteriorated credit quality	1,745	1,775
Loans Receivable, Total	$ 2,028,301	$ 1,966,696
Construction Loans [Member]
Allowance for loan and lease losses
Allowance for loan and lease losses, individually evaluated for impairment
Allowance for loan and lease losses, collectively evaluated for impairment	$ 3,617	$ 3,253
Allowance for loan and lease losses, total	3,617	3,253	1,518	1,239
Gross loans
Loans Receivable, individually evaluated for impairment	2,466	2,149
Loans Receivable, collectively evaluated for impairment	$ 400,128	$ 326,689
Loans Receivables, acquired with deteriorated credit quality
Loans Receivable, Total	$ 402,594	$ 328,838
Residential Portfolio Segment [Member]
Allowance for loan and lease losses
Allowance for loan and lease losses, individually evaluated for impairment
Allowance for loan and lease losses, collectively evaluated for impairment	$ 1,074	$ 976
Allowance for loan and lease losses, total	1,074	976	981	1,113
Gross loans
Loans Receivable, individually evaluated for impairment	4,123	3,954
Loans Receivable, collectively evaluated for impairment	226,862	229,408
Loans Receivables, acquired with deteriorated credit quality	334	328
Loans Receivable, Total	$ 231,319	$ 233,690
Consumer Portfolio Segment [Member]
Allowance for loan and lease losses
Allowance for loan and lease losses, individually evaluated for impairment
Allowance for loan and lease losses, collectively evaluated for impairment	$ 4	$ 4
Allowance for loan and lease losses, total	4	4	4	7
Gross loans
Loans Receivable, individually evaluated for impairment	81	87
Loans Receivable, collectively evaluated for impairment	$ 1,770	$ 2,367
Loans Receivables, acquired with deteriorated credit quality
Loans Receivable, Total	$ 1,851	$ 2,454
Unallocated Financing Receivables [Member]
Allowance for loan and lease losses
Allowance for loan and lease losses, individually evaluated for impairment
Allowance for loan and lease losses, collectively evaluated for impairment	$ 341	$ 464
Allowance for loan and lease losses, total	$ 341	$ 464	$ 657	$ 919
Gross loans
Loans Receivable, individually evaluated for impairment
Loans Receivable, collectively evaluated for impairment
Loans Receivables, acquired with deteriorated credit quality
Loans Receivable, Total

XML

Loans and the Allowance for Loan and Lease Losses (Details) - Schedule of allowance for loan losses - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance	$ 26,572	$ 14,160
Loans charged-off	(512)	(60)
Recoveries	14	8
Provision	3,000	1,825
Balance	29,074	15,933
Commercial Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance	10,949	3,083
Loans charged-off	(445)	(45)
Recoveries	1	6
Provision	2,592	883
Balance	13,097	3,927
Commercial Real Estate Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance	$ 10,926	7,799
Loans charged-off		$ (4)
Recoveries	$ 13
Provision	2	$ 1,051
Balance	10,941	8,846
Construction Loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance	$ 3,253	$ 1,239
Loans charged-off
Recoveries
Provision	$ 364	$ 279
Balance	3,617	1,518
Residential Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance	976	$ 1,113
Loans charged-off	$ (67)
Recoveries		$ 1
Provision	$ 165	(133)
Balance	1,074	981
Consumer Portfolio Segment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance	$ 4	7
Loans charged-off		(11)
Recoveries		1
Provision		7
Balance	$ 4	4
Unallocated Financing Receivables [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance	$ 464	$ 919
Loans charged-off
Recoveries
Provision	$ (123)	$ (262)
Balance	$ 341	$ 657

XML

Loans and the Allowance for Loan and Lease Losses (Details) - Schedule of Troubled Debt Restructuring by Class $ in Thousands	3 Months Ended
	Mar. 31, 2016 USD ($) Integer
Troubled debt restructurings:
Number of Loans | Integer	9
Pre-Modification Outstanding Recorded Investment	$ 9,555
Post-Modification Outstanding Recorded Investment	$ 9,555
Commercial Portfolio Segment [Member]
Troubled debt restructurings:
Number of Loans | Integer	9
Pre-Modification Outstanding Recorded Investment	$ 9,555
Post-Modification Outstanding Recorded Investment	$ 9,555
Commercial Real Estate Portfolio Segment [Member]
Troubled debt restructurings:
Number of Loans | Integer
Pre-Modification Outstanding Recorded Investment
Post-Modification Outstanding Recorded Investment
Construction Loans [Member]
Troubled debt restructurings:
Number of Loans | Integer
Pre-Modification Outstanding Recorded Investment
Post-Modification Outstanding Recorded Investment
Residential Portfolio Segment [Member]
Troubled debt restructurings:
Number of Loans | Integer
Pre-Modification Outstanding Recorded Investment
Post-Modification Outstanding Recorded Investment
Consumer Portfolio Segment [Member]
Troubled debt restructurings:
Number of Loans | Integer
Pre-Modification Outstanding Recorded Investment
Post-Modification Outstanding Recorded Investment

XML

Fair Value Measurements and Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Fair Value Disclosures [Abstract]
Impaired Financing Receivable, with Related Allowance, Recorded Investment	$ 5,100	$ 6,000
Impaired Financing Receivable, Related Allowance	$ 1,700	$ 2,200

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Fair Value Measurements and Fair Value of Financial Instruments (Details) - Schedule of Fair Value on a recurring basis - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Available-for-sale:
Investment securities: Available-for-sale, Fair Value	$ 191,331	$ 195,770
Liabilities
Derivatives	1,568	131
Total liabilities	1,568	131
Fair Value, Inputs, Level 1 [Member]
Available-for-sale:
Investment securities: Available-for-sale, Fair Value	$ 20,863	$ 18,524
Liabilities
Derivatives
Total liabilities
Fair Value, Inputs, Level 2 [Member]
Available-for-sale:
Investment securities: Available-for-sale, Fair Value	$ 170,468	$ 177,246
Liabilities
Derivatives	1,568	131
Total liabilities	$ 1,568	$ 131
Fair Value, Inputs, Level 3 [Member]
Available-for-sale:
Investment securities: Available-for-sale, Fair Value
Liabilities
Derivatives
Total liabilities
Federal Agency Obligations [Member]
Available-for-sale:
Investment securities: Available-for-sale, Fair Value	$ 31,827	$ 29,146
Federal Agency Obligations [Member] | Fair Value, Inputs, Level 2 [Member]
Available-for-sale:
Investment securities: Available-for-sale, Fair Value	31,827	29,146
Residential Mortgage Backed Securities [Member]
Available-for-sale:
Investment securities: Available-for-sale, Fair Value	48,545	44,910
Residential Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Available-for-sale:
Investment securities: Available-for-sale, Fair Value	48,545	44,910
Commercial Mortgage Backed Securities [Member]
Available-for-sale:
Investment securities: Available-for-sale, Fair Value	3,053	2,972
Commercial Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Available-for-sale:
Investment securities: Available-for-sale, Fair Value	3,053	2,972
US States and Political Subdivisions Debt Securities [Member]
Available-for-sale:
Investment securities: Available-for-sale, Fair Value	9,806	8,357
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Available-for-sale:
Investment securities: Available-for-sale, Fair Value	9,806	8,357
Trust Preferred Securities [Member]
Available-for-sale:
Investment securities: Available-for-sale, Fair Value	16,179	16,255
Trust Preferred Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Available-for-sale:
Investment securities: Available-for-sale, Fair Value	16,179	16,255
Corporate Bonds And Notes [Member]
Available-for-sale:
Investment securities: Available-for-sale, Fair Value	41,388	53,976
Corporate Bonds And Notes [Member] | Fair Value, Inputs, Level 2 [Member]
Available-for-sale:
Investment securities: Available-for-sale, Fair Value	41,388	53,976
Asset-backed Securities [Member]
Available-for-sale:
Investment securities: Available-for-sale, Fair Value	18,154	19,725
Asset-backed Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Available-for-sale:
Investment securities: Available-for-sale, Fair Value	18,154	19,725
Certificates of Deposit [Member]
Available-for-sale:
Investment securities: Available-for-sale, Fair Value	1,516	1,905
Equity Securities [Member]
Available-for-sale:
Investment securities: Available-for-sale, Fair Value	377	374
Equity Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Available-for-sale:
Investment securities: Available-for-sale, Fair Value	377	374
Other Securities [Member]
Available-for-sale:
Investment securities: Available-for-sale, Fair Value	20,486	18,150
Other Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Available-for-sale:
Investment securities: Available-for-sale, Fair Value	20,486	18,150
Certificate Of Deposit [Member] | Fair Value, Inputs, Level 2 [Member]
Available-for-sale:
Investment securities: Available-for-sale, Fair Value	$ 1,516	$ 1,905

XML

Fair Value Measurements and Fair Value of Financial Instruments (Details) - Schedule of Fair Value on a non-recurring basis - Commercial Portfolio Segment [Member]	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Market Capitalization [Member] | Minimum [Member]
Fair Value Measurements and Fair Value of Financial Instruments (Details) - Fair value, assets and liabilities measured on nonrecurring basis, valuation techniques [Line Items]
Discounted Range	4.00%	4.00%
Market Capitalization [Member] | Maximum [Member]
Fair Value Measurements and Fair Value of Financial Instruments (Details) - Fair value, assets and liabilities measured on nonrecurring basis, valuation techniques [Line Items]
Discounted Range	8.00%	8.00%
Impaired Loans [Member] | Appraisals Of Collateral Valuation Technique [Member]
Fair Value Measurements and Fair Value of Financial Instruments (Details) - Fair value, assets and liabilities measured on nonrecurring basis, valuation techniques [Line Items]
Valuation Technique	Appraisals of collateral value	Appraisals of collateral value
Impaired Loans [Member] | Appraisals Of Collateral Valuation Technique [Member] | Minimum [Member]
Fair Value Measurements and Fair Value of Financial Instruments (Details) - Fair value, assets and liabilities measured on nonrecurring basis, valuation techniques [Line Items]
Discounted Range	0.00%	0.00%
Impaired Loans [Member] | Appraisals Of Collateral Valuation Technique [Member] | Maximum [Member]
Fair Value Measurements and Fair Value of Financial Instruments (Details) - Fair value, assets and liabilities measured on nonrecurring basis, valuation techniques [Line Items]
Discounted Range	15.00%	15.00%

XML

Fair Value Measurements and Fair Value of Financial Instruments (Details) - Schedule of Assets at Fair Value on Non-Recurring - Impaired Loans [Member] - Commercial Portfolio Segment [Member] - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Assets Measured at Fair Value on a Non-Recurring Basis:
Assets, Fair Value Disclosure, Nonrecurring	$ 3,410	$ 3,751
Fair Value, Inputs, Level 3 [Member]
Assets Measured at Fair Value on a Non-Recurring Basis:
Assets, Fair Value Disclosure, Nonrecurring	$ 3,410	$ 3,751

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Fair Value Measurements and Fair Value of Financial Instruments (Details) - Schedule of fair value hierarchy - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015	Mar. 31, 2015	Dec. 31, 2014
Financial assets
Cash and cash equivalents, Carrying Amount	$ 118,259	$ 200,895	$ 88,543	$ 126,847
Cash and cash equivalents, Fair Value	118,259	200,895
Investment securities available-for-sale	191,331	195,770
Investment Securities Available-for-Sale, Fair Value	191,331	195,770
Investment securities held-to-maturity, Carrying Amount	219,373	224,056
Investment securities held-to-maturity, Fair Value	229,470	230,558
Investments in restricted stock, at cost, Carrying Amount	$ 31,487	$ 32,612
Investments in restricted stock, at cost, Fair Value
Net loans, Carrying Amount	$ 3,234,739	$ 3,072,435
Net loans, Fair Value	3,242,398	3,059,343
Accrued interest receivable, Carrying Amount	12,604	12,545
Accrued interest receivable, Fair Value	12,604	12,545
Financial liabilities
Noninterest-bearing deposits, Carrying Amount	614,507	650,775
Noninterest-bearing deposits, Fair Value	614,507	650,775
Interest-bearing deposits, Carrying Amount	2,278,564	2,140,191
Interest-bearing deposits, Fair Value	2,285,918	2,137,149
Borrowings, Carrying Amount	646,501	671,587
Borrowings, Fair Value	651,739	674,131
Subordinated debentures, net	54,392	54,343
Subordinated debentures, Fair Value	57,879	55,209
Derivatives	1,568	131
Derivatives	1,568	131
Accrued interest payable, Carrying Amount	5,101	4,387
Accrued interest payable, Fair Value	5,101	4,387
Fair Value, Inputs, Level 1 [Member]
Financial assets
Cash and cash equivalents, Fair Value	118,259	200,895
Investment Securities Available-for-Sale, Fair Value	20,863	18,524
Investment securities held-to-maturity, Fair Value	30,413	29,226
Accrued interest receivable, Fair Value	199	68
Financial liabilities
Noninterest-bearing deposits, Fair Value	$ 614,507	650,775
Derivatives
Fair Value, Inputs, Level 2 [Member]
Financial assets
Investment Securities Available-for-Sale, Fair Value	$ 170,468	177,246
Investment securities held-to-maturity, Fair Value	180,553	182,774
Accrued interest receivable, Fair Value	2,486	2,699
Financial liabilities
Interest-bearing deposits, Fair Value	2,285,918	2,137,149
Borrowings, Fair Value	651,739	674,131
Subordinated debentures, Fair Value	57,879	55,209
Derivatives	1,568	131
Accrued interest payable, Fair Value	$ 5,101	$ 4,387
Fair Value, Inputs, Level 3 [Member]
Financial assets
Investment Securities Available-for-Sale, Fair Value
Investment securities held-to-maturity, Fair Value	$ 18,504	$ 18,558
Net loans, Fair Value	3,242,398	3,059,343
Accrued interest receivable, Fair Value	$ 9,919	$ 9,778
Financial liabilities
Derivatives

XML

Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
Net unrealized gain on investment securities available-for-sale	$ 1,251	$ 713
Cash flow hedge	(927)	(77)
Unamortized component of securities transferred from available-for-sale to held-to-maturity	(1,142)	(1,173)
Defined benefit pension and post-retirement plans	(4,012)	(4,072)
Total accumulated other comprehensive loss	$ (4,830)	$ (4,609)

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Stock Based Compensation (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2016 USD ($) Integer $ / shares shares	Mar. 31, 2015 USD ($) shares	Dec. 31, 2015 shares
Share Based Compensation Arrangement by Share Based Payment Award Number of Plans | Integer	3
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	3 years
Stock Issued During Period, Shares, Restricted Stock Award, Gross (in Shares)	71,920	59,466
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number	509,572		535,906
Unrecognized compensation cost related to nonvested shares | $	$ 2,198
Weighted average period related to compensation cost	2 years 3 months 18 days
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in Dollars per share) | $ / shares
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in Shares)
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | $	$ 686
Restricted Stock [Member]
Stock Issued During Period, Shares, Restricted Stock Award, Gross (in Shares)	71,920	48,507
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost (in Dollars) | $	$ 182
Unrecognized compensation cost related to nonvested shares | $	$ 1,806
Weighted average period related to compensation cost	24 months
Performance Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost (in Dollars) | $	$ 193	$ 0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number	151,577
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number	181,892
Employee Director Stock Option Plan 2009 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant (in Shares)	68,516
Equity Compensation Plan 2009 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant (in Shares)	235,090

XML

Stock Based Compensation (Details) - Disclosure of Share-based Compensation Arrangements by Share-based Payment Award - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Beginning balance	535,906
Granted
Exercised	(5,495)	(110,500)
Forfeited/cancelled/expired	(20,839)
Ending balance	509,572
Exercisable Ending Balance	503,941
Outstanding Beginning Balance, Weighted-Average Exercise Price	$ 6.48
Granted, Weighted-Average Exercise Price
Exercised, Weighted-Average Exercise Price	$ 7.67
Forfeited/cancelled/expired, Weighted-Average Exercise Price	9.77
Outstanding Ending Balance, Weighted-Average Exercise Price	6.34
Exercisable Ending Balance, Weighted-Average Exercise Price	$ 6.22
Outstanding Ending Balance - Weighted average remaining contractual term (years)	2 years 11 months 1 day
Exercisable Ending Balance - Weighted average remaining contractual term (years)	2 years 10 months 24 days
Outstanding Ending Balance - Aggregate intrinsic value	$ 5,102,923
Exercisable Ending Balance - Aggregate intrinsic value	$ 5,071,354

XML

Stock Based Compensation (Details) - Disclosure related to stock option plan $ in Thousands	3 Months Ended
	Mar. 31, 2016 USD ($)
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Intrinsic value of options exercised	$ 54,326
Cash received from options exercised	42,171
Tax benefit realized from options exercised	$ 17,114
Weighted average fair value of options granted

XML

Stock Based Compensation (Details) - Schedule of Share-based Payment Award, Nonvested Shares	3 Months Ended
	Mar. 31, 2016 $ / shares shares
Granted
Nonvested [Member]
Beginning balance	96,902
Granted	71,920
Vested	(54,648)
Forfeited/cancelled/expired	(1,000)
Ending balance	113,174
Beginning balance | $ / shares	$ 16.81
Granted | $ / shares	15.88
Vested | $ / shares	16.01
Forfeited/cancelled/expired | $ / shares	19.58
Ending balance | $ / shares	$ 16.81

XML

Stock Based Compensation (Details) - Schedule of Share-based Payment Award, Unearned Shares	3 Months Ended
	Mar. 31, 2016 $ / shares shares
Beginning balance	535,906
Awarded
Ending balance	509,572
Unearned [Member]
Beginning balance	94,485
Awarded	64,540
Forfeited	(7,447)
Expired
Ending balance	151,578
Beginning balance | $ / shares	$ 19.46
Awarded | $ / shares	17.15
Forfeited | $ / shares	$ 19.46
Expired | $ / shares
Ending balance | $ / shares	$ 19.46

XML

Components of Net Periodic Pension Cost (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended
	Apr. 30, 2016	Mar. 31, 2016	Mar. 31, 2015
Defined Benefit Plan Disclosure [Line Items]
Interest cost		$ 128	$ 138
Expected return on plan assets		(136)	(137)
Net amortization		$ 102	108
Recognized settlement loss			450
Total net periodic pension expense		$ 94	559
Net actuarial (gain) loss		(101)	(742)
Total recognized in other comprehensive income		(101)	(742)
Total recognized in net periodic expense and other comprehensive income (before tax)		$ (7)	$ (183)
Subsequent Event [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Contributions by Employer	$ 2,000

XML

FHLB and other borrowings (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2016 USD ($)
Number of Federal Home Loan Bank Notes	3
Debt Instrument, Maturity Date	Jul. 01, 2025
Long-term Line of Credit	$ 1,200,000
Line of Credit Facility, Remaining Borrowing Capacity	594,000
Federal Home Loan Bank Note One [Member]
Extinguishment of Debt, Amount	$ 2,500
Debt Instrument, Maturity Date	Apr. 02, 2018
Federal Home Loan Bank Note Two [Member]
Extinguishment of Debt, Amount	$ 7,500
Debt Instrument, Maturity Date	Apr. 02, 2018
Federal Home Loan Bank Note Three [Member]
Extinguishment of Debt, Amount	$ 5,000
Debt Instrument, Maturity Date	Jul. 16, 2018

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FHLB and other borrowings (Details) - Schedule of components of FHLB and other borrowings and weighted average interest rates - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
By type of borrowing:
FHLB and other borrowings (in Dollars)	$ 646,501	$ 671,587
Weighted average interest rates	1.41%	1.37%
By remaining period to maturity:
One year or less (in Dollars)	$ 330,501	$ 270,587
One year or less	0.64%	0.64%
One to two years (in Dollars)	$ 121,000	$ 171,000
One to two years	1.90%	1.56%
Two to three years (in Dollars)	$ 105,000	$ 130,000
Two to three years	1.96%	1.84%
Three to four years (in Dollars)	$ 50,000	$ 35,000
Three to four years	1.66%	1.60%
Four to five years (in Dollars)	$ 40,000	$ 65,000
Four to five years	3.42%	2.82%
Federal Home Loan Bank Advances [Member]
By type of borrowing:
FHLB and other borrowings (in Dollars)	$ 631,501	$ 656,587
Weighted average interest rates	1.30%	1.26%
Repurchase Agreements ("REPO") [Member]
By type of borrowing:
FHLB and other borrowings (in Dollars)	$ 15,000	$ 15,000
Weighted average interest rates	5.95%	5.95%

XML

Securities Sold under Agreements to Repurchase (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Mar. 31, 2016
Securities Sold under Agreements to Repurchase [Abstract]
Pledge securities	8.00%
Securities carrying amount	$ 18,800	$ 19,100

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Securities Sold under Agreements to Repurchase (Details) - Schedule of repurchase agreements - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Securities Sold under Agreements to Repurchase [Abstract]
Average daily balance during the year	$ 15,000	$ 31,000	$ 22,890
Average interest rate during the year	5.95%	5.90%	5.92%
Maximum month-end balance during the year-to-date	$ 15,000	$ 31,000	$ 31,000
Weighted average interest rate during the year-to-date	5.95%	5.90%	5.92%

XML

Securities Sold under Agreements to Repurchase (Details) - Schedule of remaining contractual maturity - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Total Borrowings	$ 19,918	$ 18,902
Amounts related to agreements not included in offsetting disclosure in Note 13	4,918	3,902
US Treasury Securities [Member]
Total Borrowings	5,069	6,313
Residential Mortgage Backed Securities [Member]
Total Borrowings	$ 14,849	$ 12,589
Overnight and Continuous [Member]
Total Borrowings
Overnight and Continuous [Member] | US Treasury Securities [Member]
Total Borrowings
Overnight and Continuous [Member] | Residential Mortgage Backed Securities [Member]
Total Borrowings
Upto 30 Days [Member]
Total Borrowings
Upto 30 Days [Member] | US Treasury Securities [Member]
Total Borrowings
Upto 30 Days [Member] | Residential Mortgage Backed Securities [Member]
Total Borrowings
30 - 90 Days [Member]
Total Borrowings
30 - 90 Days [Member] | US Treasury Securities [Member]
Total Borrowings
30 - 90 Days [Member] | Residential Mortgage Backed Securities [Member]
Total Borrowings
Greater Than 90 Days[Member]
Total Borrowings	$ 19,918	$ 18,902
Greater Than 90 Days[Member] | US Treasury Securities [Member]
Total Borrowings	5,069	6,313
Greater Than 90 Days[Member] | Residential Mortgage Backed Securities [Member]
Total Borrowings	$ 14,849	$ 12,589

XML

Subordinated Debentures (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2016 USD ($)
Subordinated Debentures (Details) [Line Items]
Value of subordinated debentures received by Trust	$ 5,200
Percentage Rate Added to Libor	2.85%
Floating interest rate on subordinated debentures	3.47%
Proceeds from Issuance of Debt	$ 50,000
Debt Instrument, Term	5 years
Debt Instrument, Maturity Date	Jul. 01, 2025
Debt Instrument, Interest Rate, Stated Percentage	5.75%
Debt Instrument, Description of Variable Rate Basis	three-month LIBOR rate plus 393 basis points
Debt Instrument, Basis Spread on Variable Rate	3.93%
Debt Issuance Cost	$ 763
Proceeds from Stock Plans	35,000
Noncumulative Preferred Stock [Member]
Subordinated Debentures (Details) [Line Items]
Preferred Stock, Value, Outstanding	$ 11,250

XML

Subordinated Debentures (Details) - Schedule of Subordinated Borrowing - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Schedule of Subordinated Borrowing [Abstract]
Issuance Date	Dec. 19, 2003	Dec. 19, 2003
Securities Issued	$ 5,000	$ 5,000
Liquidation Value	$1,000 per Capital Security	$1,000 per Capital Security
Coupon Rate	Floating 3-month LIBOR + 285 Basis Points	Floating 3-month LIBOR + 285 Basis Points
Maturity	Jan. 23, 2034	Jan. 23, 2034
Redeemable by Issuer Beginning	Jan. 23, 2009	Jan. 23, 2009

XML

Offsetting Assets and Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Gross Amounts Recognized, Total	$ 16,568	$ 15,131
Gross Amounts Offset in the Statement of Financial Position, Total
Net Amounts of Assets Presented in the Statement of Financial Position, Total	$ 16,568	$ 15,131
Financial Instruments Recognized, Total
Cash or Financial Instrument Collateral, Total	$ 16,568	$ 15,131
Net Amount, Total
Repurchase Agreements ("REPO") [Member]
Gross Amounts Recognized, Liabilities	$ 15,000	$ 15,000
Gross Amounts Offset in the Statement of Financial Position, Liabilities
Net Amounts of Assets Presented in the Statement of Financial Position, Liabilities	$ 15,000	$ 15,000
Financial Instruments Recognized, Liabilities
Cash or Financial Instrument Collateral, Liabilities	$ 15,000	$ 15,000
Net Amount, Liabilities
Interest Rate Swap [Member]
Gross Amounts Recognized, Assets		$ 48
Gross Amounts Offset in the Statement of Financial Position
Net Amounts of Assets Presented in the Statement of Financial Position, Assets
Financial Instruments Recognized, Assets
Cash or Financial Instrument Collateral, Assets
Net Amount, Assets
Gross Amounts Recognized, Liabilities	$ 1,568	$ 131
Gross Amounts Offset in the Statement of Financial Position, Liabilities
Net Amounts of Assets Presented in the Statement of Financial Position, Liabilities	$ 1,568	$ 131
Financial Instruments Recognized, Liabilities
Cash or Financial Instrument Collateral, Liabilities	$ 1,568	$ 131
Net Amount, Liabilities

XML

Presentation of Debt Issuance Costs (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Other assets	$ 29,847	$ 24,096
Total assets	4,091,000	4,015,909
Subordinated debentures	54,392	54,343
Total liabilities	$ 3,616,273	3,538,565
As previously reported [Member]
Other assets		24,908
Total assets		4,016,721
Subordinated debentures		55,155
Total liabilities		3,539,377
As reported under the new guidance [Member]
Other assets		24,096
Total assets		4,015,909
Subordinated debentures		54,343
Total liabilities		$ 3,538,565